SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1997
Commission File Number: 0-19989
FM Properties Inc.
Incorporated in Delaware 72-1211572
(IRS Employer Identification No.)
1615 Poydras Street, New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
On June 30, 1997, there were issued and outstanding 14,285,770 shares
of the registrant's Common Stock, par value $0.01 per share.
1
FM PROPERTIES INC.
TABLE OF CONTENTS
Page
Part I. Financial Information
Financial Statements:
Condensed Balance Sheets 3
Statements of Operations 4
Statements of Cash Flow 4
Notes to Financial Statements 5
Remarks 6
Report of Independent Public Accountants 7
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II. Other Information 11
Signature 12
Exhibit Index E-1
2
FM PROPERTIES INC.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
CONDENSED BALANCE SHEETS (Unaudited)
June 30, December 31,
1997 1996
---------- ----------
(In Thousands)
ASSETS
Current assets:
Accounts receivable and other $ - $ 56
Income tax receivable 489 503
Amounts receivable from the
Partnership 4,167 4,371
---------- ----------
Total current assets 4,656 4,930
Investment in the Partnership 60,081 56,055
---------- ----------
Total assets $ 64,737 $ 60,985
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Other liabilities $ 1,422 $ 1,386
Stockholders' equity 63,315 59,599
---------- ----------
Total liabilities and
stockholders' equity $ 64,737 $ 60,985
========== ==========
The accompanying notes are an integral part of these financial
statements.
3
FM PROPERTIES INC.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(In Thousands, Except Per Share Amounts)
Income (loss) from
the Partnership $ 2,024 $ 559 $ 4,026 $ (306)
General and
administrative
expenses (60) (59) (90) (88)
---------- ---------- ---------- ----------
Operating income
(loss) 1,964 500 3,936 (394)
Income tax provision 220 - 220 -
---------- ---------- ---------- ----------
Net income (loss) $ 1,744 $ 500 $ 3,716 $ (394)
========== ========== ========== ==========
Net income (loss)
per share $0.12 $0.03 $0.26 $(0.03)
===== ===== ===== ======
Average shares
outstanding 14,468 14,394 14,444 14,368
====== ====== ====== ======
FM PROPERTIES INC.
STATEMENTS OF CASH FLOW (Unaudited)
Six Months Ended June 30,
------------------------
1997 1996
---------- ----------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 3,716 $ (394)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Excess of equity in (income)
losses of the Partnership over
distributions received (4,026) 306
Decrease in working capital 310 88
---------- ----------
Net cash provided by operating
activities - -
Cash flow from investing activities - -
Cash flow from financing activities - -
---------- ----------
Net increase in cash and cash
equivalents - -
Cash and cash equivalents at
beginning of year - -
---------- ----------
Cash and cash equivalents at
end of period $ - $ -
========== ==========
The accompanying notes are an integral part of these financial
statements.
4
FM PROPERTIES INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
FM Properties Inc. (FMPO) operates through its 99.8 percent interest
in FM Properties Operating Co. (the Partnership), with 0.2 percent
owned by the Managing General Partner, Freeport-McMoRan Inc. (FTX).
FTX guarantees the Partnership's debt. Because of the rights that FTX
retains in connection with its guarantee of the Partnership's debt,
FMPO reflects its interest in the Partnership under the equity basis
of accounting. However, if the FTX guarantee is eliminated, FMPO will
have the authority to remove FTX as the Managing General Partner and
FTX's rights with respect to the Partnership and FMPO would be
eliminated. FMPO has no significant operations or source of funds
other than its interest in the Partnership. The Partnership's
financial statements follow: (certain prior year amounts have been
reclassified to conform to the 1997 presentation):
BALANCE SHEETS
June 30, December 31,
1997 1996
---------- ----------
ASSETS (In Thousands)
Current assets:
Cash and cash equivalents $ 2,671 $ 2,108
Accounts receivable and other 2,456 4,133
---------- ----------
Total current assets 5,127 6,241
Real estate and facilities, net 106,806 118,029
Other assets 7,088 5,922
---------- ----------
Total assets $ 119,021 $ 130,192
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable and accrued
liabilities $ 2,206 $ 5,754
Amounts due to FMPO 4,167 4,371
Short-term debt 45,693 -
---------- ----------
Total current liabilities 52,066 10,125
Long-term debt - 58,325
Other liabilities 6,753 5,574
Partners' capital 60,202 56,168
---------- ----------
Total liabilities and partners'
capital $ 119,021 $ 130,192
========== ==========
STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ---------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(In Thousands)
Revenues $ 5,191 $ 23,764 $ 20,261 $ 37,593
Costs and expenses:
Cost of sales 2,245a 21,771 14,458a 35,427
General and
administrative
expenses 622 617 1,389 1,223
---------- ---------- ---------- ----------
Total costs and
expenses 2,867 22,388 15,847 36,650
---------- ---------- ---------- ----------
Operating income 2,324 1,376 4,414 943
Interest expense,
net (525) (1,158) (1,061) (1,892)
Other income, net 229 341 681 643
---------- ---------- ---------- ----------
Net income (loss) $ 2,028 $ 559 $ 4,034 $ (306)
========== ========== ========== ==========
a. Includes a $3.1 million reimbursement for previously expensed
infrastructure costs.
5
STATEMENTS OF CASH FLOW
Six Months Ended June 30,
------------------------
1997 1996
---------- ----------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 4,034 $ (306)
Adjustments to reconcile net
income (loss) to net cash provided
by operating activities:
Cost of real estate sales and
depreciation and amortization 16,113 31,910
(Increase) decrease in working
capital:
Accounts receivable and other 512 (2,636)
Accounts payable and accrued
liabilities (2,573) (3,063)
---------- ----------
Net cash provided by operating
activities 18,086 25,905
---------- ----------
Cash flow from investing activities:
Real estate and facilities (a) (4,891) (4,175)
---------- ----------
Net cash used in investing
activities (4,891) (4,175)
---------- ----------
Cash flow from financing activities:
Proceeds from debt - 1,000
Repayment of debt (12,632) (23,201)
---------- ----------
Net cash used in financing
activities (12,632) (22,201)
---------- ----------
Net increase (decrease) in cash and
cash equivalents 563 (471)
Cash and cash equivalents at
beginning of year 2,108 2,282
---------- ----------
Cash and cash equivalents at
end of period $ 2,671 $ 1,811
========== ==========
a. Includes capitalized interest of $0.9 million in the 1997 period
and $2.3 million in the 1996 period.
2. NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 128 (SFAS 128),
"Earnings Per Share", which simplifies the computation of earnings per
share. SFAS 128 is effective for financial statements issued for
periods ending after December 15, 1997 and requires restatement for
all prior period earnings per share data presented. Earnings per
share calculated in accordance with SFAS 128 would be unchanged for
the periods presented.
In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive
Income," and SFAS 131, "Disclosures About Segments of an Enterprise
and Related Information." SFAS 130 establishes standards for the
reporting and display of comprehensive income in the financial
statements. Comprehensive income is the total of net income and all
other non-owner changes in equity. SFAS 131 requires that companies
disclose segment data based on how management makes decisions about
allocating resources to segments and measuring their performance.
SFAS 130 and 131 are effective for 1998. Adoption of these standards
is not expected to have an effect on FMPO's financial statements,
financial position or results of operations.
--------------------
Remarks
The information furnished herein should be read in conjunction with
FMPO's financial statements contained in its 1996 Annual Report to
stockholders included in its Annual Report on Form 10-K.
The information furnished herein reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of the
results for the periods. All such adjustments are, in the opinion of
management, of a normal recurring nature.
6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
of FM Properties Inc.:
We have reviewed the accompanying condensed consolidated balance sheet
of FM Properties Inc. (the Company), a Delaware Corporation, as of
June 30, 1997, and the related condensed statements of operations for
the three-month and six-month periods ended June 30, 1997 and 1996 and
the condensed statements of and cash flow for the six-month periods
ended June 30, 1997 and 1996. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for
them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet of FM Properties Inc. as of
December 31, 1996, and the related statements of operations,
stockholders' equity and cash flow for the year then ended (not
presented herein), and in our report dated January 21, 1997, based on
our audit, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the
accompanying condensed balance sheet as of December 31, 1996, is
fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
July 22, 1997
7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
OVERVIEW
FM Properties Inc. (FMPO) operates through its 99.8 percent interest
in FM Properties Operating Co. (the Partnership), with 0.2 percent
owned by the Managing General Partner, Freeport-McMoRan Inc. (FTX).
The Partnership's most significant investments are located near
Austin, Texas and include approximately 3,300 acres of primarily
undeveloped land in and around the Barton Creek Community and
approximately 1,000 acres of undeveloped commercial and multi-family
property in the Circle C development. The Partnership is also engaged
in the development and marketing of real estate in the Dallas, Houston
and San Antonio, Texas areas.
FTX guarantees the Partnership's debt. Because of the rights
that FTX retains in connection with its guarantee of the Partnership's
debt, FMPO reflects its interest in the Partnership under the equity
basis of accounting. However, if the FTX guarantee is eliminated,
FMPO will have the authority to remove FTX as the Managing General
Partner and FTX's rights with respect to the Partnership and FMPO
would be eliminated.
RESULTS OF OPERATIONS
Second Quarter Six Months
------------------------ ------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(In Thousands)
Income (loss) from
the Partnership $ 2,024 $ 559 $ 4,026 $ (306)
Operating income
(loss) 1,964 500 3,936 (394)
Net income (loss) 1,744 500 3,716 (394)
FMPO has no significant operations or source of funds other than
its interest in the Partnership. Accordingly, the following
discussion and analysis addresses the results of operations and the
capital resources and liquidity of the Partnership. The
Partnership's summary operating results follow:
Second Quarter Six Months
------------------------ ------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(In Thousands)
Revenues:
Developed
properties $ 1,351 $ 8,014 $ 5,190 $ 12,291
Undeveloped
properties
and other 3,840 15,750 15,071 25,302
---------- ---------- ---------- ----------
Total revenues 5,191 23,764 20,261 37,593
---------- ---------- ---------- ----------
Operating income 2,324a 1,376 4,414a 943
Net income (loss) 2,028a 559 4,034a (306)
a. Includes a $3.1 million reimbursement for previously expensed
infrastructure costs.
Revenues from developed properties represented the sale of 24 and
85 single-family homesites during the second-quarter and six-month
periods of 1997, respectively, compared with the sale of 206 and 282
single-family homesites during the 1996 periods. Revenues from
undeveloped properties for the second-quarter and six-month periods of
1997 represented the sale of 68 and 194 acres of undeveloped
commercial and multi-family property, respectively, compared with the
sale of 447 and 603 undeveloped acres for the year-ago periods.
During 1995, legislation was enacted which enabled the
Partnership to create a series of municipal utility districts (MUDs)
to serve the Barton Creek development. The MUDs, through the issuance
of bonds, may reimburse the Partnership for costs related to the
installation of major utility, drainage and water quality
infrastructure. During the second quarter, the Partnership received
$3.1 million cash from MUD bond proceeds representing the
reimbursement of infrastructure costs relating to previously sold
properties. The funds were used to reduce the Partnership's debt.
The Partnership expects to receive additional reimbursements for past
infrastructure costs related to the Barton Creek development through
MUD bond proceeds in the future. However, the timing and the amount
of future reimbursements are uncertain.
8
Interest costs incurred by the Partnership totaled $0.5 million
in the second quarter of 1997 and $1.1 million during the first six
months of 1997 compared with $1.2 million and $1.9 million during the
respective 1996 periods, decreasing primarily because of lower average
debt levels.
Other income includes Partnership oil and gas overriding royalty
proceeds from previously discontinued operations of $0.2 million and
$0.6 million for the 1997 three and six-month periods, respectively,
compared with $0.3 million and $0.7 million for the same periods in
1996.
FMPO's business strategy includes the sale of larger undeveloped
tracts of land. The timing of these transactions can cause
significant variations in operating results between accounting periods
and may result in future operating losses. Consequently, past
operating results are not necessarily indicative of future trends in
profitability. The Partnership continues to develop single-family
homesites in Austin, Dallas and Houston and evaluate the development
of income-producing properties on certain tracts. Management believes
that these types of development activities have the potential to add
significant value to FMPO.
In January 1997, an investor group was unable to complete the
previously announced agreement for the purchase of FMPO's Circle C
assets for $34.0 million and the agreement expired. The Partnership
retained a $1.0 million non-refundable cash deposit and has no further
obligation to the investor group. FMPO is proceeding with developing
and marketing the Circle C properties.
CAPITAL RESOURCES AND LIQUIDITY
During the first six months of 1997, the Partnership generated
operating cash flow of $18.1 million which, after funding capital
additions, enabled the Partnership to reduce its debt from the
beginning of the year by $12.6 million to $45.7 million.
The Partnership amended its credit agreements in late 1996,
extending maturities until February 1998, lowering interest rates and
eliminating the debt guarantee of Freeport-McMoRan Copper & Gold Inc.,
leaving FTX as the sole guarantor through February 1998. On July 28,
1997, FTX and IMC Global, Inc. (IGL) announced that they had entered
into a letter of intent providing for, among other things, the merger
of FTX with and into IGL.
FMPO continues to seek a permanent financial restructuring, which
may include obtaining a new bank credit facility or issuing new debt
or equity. An objective in arranging new financing will be to
eliminate FTX's guarantee of the Partnership's debt. If the FTX
guarantee were eliminated, FMPO would have the authority to remove FTX
as Managing General Partner of the Partnership and dissolve the
Partnership, thereby enabling FMPO to manage its business without the
current restrictions imposed by its contractual relationship with FTX.
A new financing that would allow FMPO to establish itself as a stand-
alone company by eliminating the FTX guarantee may increase FMPO's
financing costs significantly. The extent of any refinancing,
including any need to sell properties in connection therewith, will
determine the future net cash flow available to FMPO to recover its
investment in the Partnership.
The future performance and the financial viability of FMPO are
dependent on the future cash flows from the Partnership's assets.
These cash flows will be significantly affected by future real estate
values and interest rate levels. There can be no assurance that the
Partnership will generate cash flow or obtain funds sufficient to make
required interest and principal payments.
During 1996, the State Court of Appeals overturned the favorable
1995 District Court ruling which invalidated the City of Austin (the
City) "SOS" ordinance; however, the appeals court upheld the lower
court's favorable ruling with respect to the interpretation of certain
grandfathered rights for previously platted land. A significant
portion of the Partnership's Austin area properties was previously
platted and is expected to benefit from these grandfathered rights.
An application for Writ of Error was filed with the Texas Supreme
Court in January 1997. An unfavorable final judgment is not expected
to adversely affect the Partnership's property holdings because of its
grandfathered rights and because the Partnership's property was
removed from the jurisdiction of the City pursuant to the water
quality protection zone at Barton Creek and the Southwest Travis
County Water District (the District) at Circle C, both of which were
authorized by Texas state legislation enacted in 1995.
9
In October 1996, the City filed a petition for declaratory
judgment asserting that the legislation that created the District is
unconstitutional. The District is defending itself against the City's
claim. Court-ordered mediation held in June 1997 was unsuccessful.
Approximately 1,000 acres owned by Circle C are included in the
District. None of the Partnership's other properties are in the
District. It is anticipated that regardless of the outcome at the
trial court, the non-prevailing party will appeal the decision. An
appeal of this suit will likely be protracted. Because a significant
portion of the Partnership's Circle C property is expected to be
developed under grandfathered entitlements, it is uncertain whether
there would be any adverse impact from a final judgment in favor of
the City.
In the last legislative session, a bill to reorganize a state
governmental agency inadvertently repealed the provisions of law which
established grandfathered rights for previously platted land. Under
the Texas Code Construction Act, previously vested rights are not
affected by the repeal of this statute. FMPO's counsel has advised
the Company that in its opinion, this inadvertent repeal should not
affect FMPO's rights to develop its properties.
During February 1997, FMPO filed a petition for declaratory
judgment against Phoenix Holdings, Ltd. (Phoenix) in order to secure
its ownership of certain MUD receivables that pertain to existing
infrastructure which serves the Circle C development. Phoenix filed a
counterclaim against Circle C in June 1997. A favorable outcome,
which FMPO expects to occur, would result in significant refunds of
prior capital expenditures to the Partnership over the next several
years.
In April 1997, the U.S. Department of Interior (DOI) listed the
Barton Springs Salamander as an endangered species after a federal
court overturned a March 1997 decision by the DOI not to list the
Barton Springs Salamander based on a conservation agreement between
the State of Texas and federal agencies. The listing of the Barton
Springs Salamander does not affect the Partnership's Barton Creek and
Lantana properties because of its 10A permit obtained in 1995. The
Partnership's Circle C properties could, however, be affected,
although the extent of any impact cannot be determined at this time.
CAUTIONARY STATEMENT
Management's Discussion and Analysis contains "forward-looking
statements." All statements other than statements of historical fact
included in this report, including, without limitation, statements
regarding future reimbursement for infrastructure costs, future events
related to financing and the FTX guarantee, the anticipated outcome of
the litigation and regulatory matters discussed herein, the expected
results of FMPO's business strategy, and other plans and objectives of
management of the Company for future operations and activities are
forward-looking statements.
Important factors that could cause actual results to differ
materially from FMPO's expectations include, without limitation,
economic and business conditions, business opportunities that may be
presented to and pursued by the Company, changes in laws or
regulations and other factors, many of which are beyond the control of
the Company. Further information regarding these and other factors
that might cause future results to differ from those projected in the
forward-looking statements are described in more detail under the
heading "Cautionary Statement" in FMPO's Form 10-K for the year ended
December 31, 1996.
----------------------------
The results of operations reported and summarized above are not
necessarily indicative of future operating results.
10
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings.
During February 1997, FMPO filed a petition for declaratory
judgment against Phoenix Holdings, Ltd. (Phoenix) in order to secure
its ownership of certain MUD receivables that pertain to existing
infrastructure which serves the Circle C development. Phoenix filed a
counterclaim against Circle C in June 1997. A favorable outcome,
which FMPO expects to occur, would result in significant refunds of
prior capital expenditures to the Partnership over the next several
years.
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Annual Meeting of Stockholders of the Company was held
on May 8, 1997 (the "Annual Meeting"). Proxies were solicited
pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended.
(b) At the Annual Meeting, James C. Leslie was elected to serve
until the 2000 annual meeting of stockholders. In addition to the
director elected at the Annual Meeting, the terms of Richard C.
Adkerson and Michael D. Madden continued after the Annual Meeting.
(c) At the Annual Meeting, holders of shares of the Company's
Common Stock elected one director with the number of votes cast for or
withheld from such nominee as follows:
Name For Withheld
- ---- --- --------
James C. Leslie 13,473,927 119,403
With respect to the election of the director, there were no
abstentions or broker non-votes.
At the Annual Meeting, the stockholders also voted on and
approved a proposal to ratify the appointment of Arthur Andersen LLP
to act as the independent auditors to audit the financial statements
of the Company and its subsidiaries for the year 1997. Holders of
13,510,616 shares voted for, holders of 51,189 shares voted against
and holders of 31,525 shares abstained from voting on, such proposal.
There were no broker non-votes with respect to such proposal.
At the Annual Meeting, the stockholders voted on and approved a
proposal to approve the Company's 1996 Stock Option Plan for Non-
Employee Directors. Holders of 12,341,060 shares voted for, holders
of 582,199 shares voted against and holders of 670,071 shares
abstained from voting on, such proposal. There were no broker non-
votes with respect to such proposal.
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits to this report are listed in the Exhibit Index
appearing on page E-1 hereof.
(b) During the quarter for which this report is filed, the
registrant filed one Current Report on Form 8-K and one Current Report
on Form 8-K/A dated April 22, 1997 and May 22, 1997, respectively,
both under Item 5.
11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
FM PROPERTIES INC.
By: /s/ C. Donald Whitmire, Jr.
---------------------------
C. Donald Whitmire, Jr.
Vice President & Controller
(authorized signatory and
Principal Accounting Officer)
Date: August 12, 1997
12
FM PROPERTIES INC.
EXHIBIT INDEX
Exhibit
Number
3.1 Amended and Restated Certificate of Incorporation of the
Company. Incorporated by reference to Exhibit 3.1 to the 1992 Form
10-K.
3.2 By-laws of the Company, as amended. Incorporated by
reference to Exhibit 3.2 to the 1992 Form 10-K.
4.1 The Company's Certificate of Designations of Series A
Participating Cumulative Preferred Stock. Incorporated by reference
to Exhibit 4.1 to the 1992 Form 10-K.
4.2 Rights Agreement dated as of May 28, 1992 between the
Company and Mellon Securities Trust Company, as Rights Agent.
Incorporated by reference to Exhibit 4.2 to the 1992 Form 10-K.
4.3 Amended and Restated Credit Agreement dated as of December
20, 1996 (the "Credit Agreement") among FTX, the Partnership, certain
banks, and The Chase Manhattan Bank, as Administrative Agent, FTX
Collateral Agent and Documentation Agent. Incorporated by reference
to Exhibit 4.3 to the Annual Report on Form 10-K of the Company for
the fiscal year ended December 31, 1996 (the "1996 Form 10-K").
4.4 Second Amended and Restated Note Agreement dated as of June
30, 1995, among FTX, FCX, the Partnership, Chemical Bank, and Hibernia
National Bank, individually and as agent. Incorporated by reference
to Exhibit 4.4 to the Quarterly Report on Form 10-Q of FTX for the
quarter ended September 30, 1995.
4.5 First Amendment to Second Amended and Restated Note
Agreement dated as of December 31, 1995, among FTX, FCX, the
Partnership, Chemical Bank and Hibernia National Bank, individually
and as agent. Incorporated by reference to Exhibit 10.18 to the
Annual Report on Form 10-K of FCX for the fiscal year ended December
31, 1995.
4.6 Second Amendment to Second Amended and Restated Note
Agreement dated as of December 20, 1996, among FTX, the Partnership,
The Chase Manhattan Bank and Hibernia National Bank, individually and
as agent. Incorporated by reference to Exhibit 4.6 to the 1996 Form
10-K.
4.7 Credit Agreement dated as of December 20, 1996, between FTX
and the Partnership. Incorporated by reference to Exhibit 4.7 to the
1996 Form 10-K.
4.8 Amended and Restated Credit Agreement dated as of December
20, 1996 between Circle C Land Corp. ("Circle C") and Texas Commerce
Bank National Association ("TCB"). Incorporated by reference to
Exhibit 4.8 to the 1996 Form 10-K.
10.1 FMPO Stock Option Plan, as amended.
15.1 Letter dated July 22, 1997 from Arthur Andersen LLP
regarding unaudited interim financial statements.
27.1 Financial Data Schedule
13
FM PROPERTIES INC.
STOCK OPTION PLAN
SECTION 1
Purpose. The purposes of the FM Properties Inc. Stock Option
Plan (the "Plan") are to promote the interests of FM Properties Inc. and
its stockholders by (i) attracting and retaining officers and executive
and other key employees or managers of the business of FM Properties Inc.
and its subsidiaries; (ii) motivating such individuals by means of
performance-related incentives to achieve longer-range performance goals;
and (iii) enabling such individuals to participate in the long-term
growth and financial success of FM Properties Inc. and its subsidiaries.
SECTION 2
Definitions. As used in the Plan, the following terms shall
have the meanings set forth below:
"Award" shall mean any Option, Stock Appreciation Right,
Limited Right or Other Stock-Based Award.
"Award Agreement" shall mean any written agreement, contract
or other instrument or document evidencing any Award, which may, but need
not, be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of FM Properties
Inc.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean a committee of the Board designated by
the Board to administer the Plan and composed of not fewer than two
directors, each of whom, to the extent necessary to comply with
Rule 16b-3 only, is a "non-employee director" within the meaning of
Rule 16b-3 and, to the extent necessary to comply with Section 162(m)
only, is an "outside director" under Section 162(m). Until otherwise
determined by the Board, the Committee shall be the Corporate Personnel
Committee of the Board.
"Company" shall mean FM Properties Inc.
"Designated Beneficiary" shall mean the beneficiary designated
by the Participant, in a manner determined by the Committee, to receive
the benefits due the Participant under the Plan in the event of the
Participant's death. In the absence of an effective designation by the
Participant, Designated Beneficiary shall mean the Participant's estate.
"Eligible Individual" shall mean (i) any person providing
services as an officer or an executive or key manager of the Company or
a Subsidiary, whether or not employed by such entity, (ii) any employee
of the Company or a Subsidiary, including any director who is also an
employee of the Company or a Subsidiary, and (iii) any person who has
agreed in writing to become a person described in clauses (i) or (ii)
within not more than 30 days following the date of grant of such person's
first Award under the Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"FTX" shall mean Freeport-McMoRan Inc.
"Incentive Stock Option" shall mean an option granted under
Section 6 of the Plan that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.
"Limited Right" shall mean any right granted under Section 8
of the Plan.
"Nonqualified Stock Option" shall mean an option granted under
Section 6 of the Plan that is not intended to be an Incentive Stock
Option.
"Offer" shall mean any tender offer, exchange offer or series
of purchases or other acquisitions, or any combination of those
transactions, as a result of which any person, or any two or more persons
acting as a group, and all affiliates of such person or persons, shall
own beneficially more than 40% of the Shares outstanding (exclusive of
Shares held in the Company's treasury or by the Company's Subsidiaries).
"Offer Price" shall mean the highest price per Share paid in
any Offer that is in effect at any time during the period beginning on
the ninetieth day prior to the date on which a Limited Right is exercised
and ending on and including the date of exercise of such Limited Right.
Any securities or property that comprise all or a portion of the
consideration paid for Shares in the Offer shall be valued in determining
the Offer Price at the higher of (i) the valuation placed on such
securities or property by the person or persons making such Offer, or
(ii) the valuation, if any, placed on such securities or property by the
Committee or the Board.
"Option" shall mean an Incentive Stock Option or a
Nonqualified Stock Option.
"Other Stock-Based Award" shall mean any right or award
granted under Section 9 of the Plan.
"Participant" shall mean any Eligible Individual granted an
Award under the Plan.
"Partnership" shall mean FM Properties Operating Co.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC
under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.
"SAR" shall mean any Stock Appreciation Right.
"SEC" shall mean the Securities and Exchange Commission,
including the staff thereof, or any successor thereto.
"Section 162(m)" shall mean Section 162(m) of the Code and all
regulations promulgated thereunder as in effect from time to time.
"Shares" shall mean the shares of common stock, par value $.01
per share, of the Company, and such other securities of the Company or
a Subsidiary as the Committee may from time to time designate.
"Stock Appreciation Right" shall mean any right granted under
Section 7 of the Plan.
"Subsidiary" shall mean the Partnership and any corporation or
other entity in which the Company possesses directly or indirectly equity
interests representing at least 50% of the total ordinary voting power
or at least 50% of the total value of all classes of equity interests of
such corporation or other entity.
SECTION 3
Administration. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority
to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to an Eligible Individual; (iii) determine the
number of Shares to be covered by, or with respect to which payments,
rights or other matters are to be calculated in connection with, Awards;
(iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be
settled or exercised in cash, whole Shares, other whole securities, other
Awards, other property or other cash amounts payable by the Company upon
the exercise of that or other Awards, or canceled, forfeited or suspended
and the method or methods by which Awards may be settled, exercised,
canceled, forfeited or suspended; (vi) determine whether, to what extent,
and under what circumstances cash, Shares, other securities, other
Awards, other property, and other amounts payable by the Company with
respect to an Award shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan; (viii) establish, amend, suspend or waive such
rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan. Unless
otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect
to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and
binding upon all Persons, including the Company, any Subsidiary, any
Participant, any holder or beneficiary of any Award, any stockholder of
the Company and any Eligible Individual.
SECTION 4
Eligibility. Any Eligible Individual who is not a member of
the Committee shall be eligible to be granted an Award.
SECTION 5
(a) Shares Available for Awards. Subject to adjustment as
provided in Section 5(b):
(i) Calculation of Number of Shares Available. The number of
Shares with respect to which Awards may be granted under the Plan shall
be 850,000. If, after the effective date of the Plan, an Award granted
under the Plan expires or is exercised, forfeited, canceled or terminated
without the delivery of Shares, then the Shares covered by such Award or
to which such Award relates, or the number of Shares otherwise counted
against the aggregate number of Shares with respect to which Awards may
be granted, to the extent of any such expiration, exercise, forfeiture,
cancellation or termination without the delivery of Shares, shall again
be, or shall become, Shares with respect to which Awards may be granted.
Notwithstanding the foregoing and subject to adjustment as provided in
Section 5(b), the aggregate number of Shares in respect of which Awards
may be granted under the Plan to any Eligible Individual shall not exceed
250,000 in any year.
(ii) Substitute Awards. Any Shares delivered by the Company,
any Shares with respect to which Awards are made by the Company, or any
Shares with respect to which the Company becomes obligated to make
Awards, through the assumption of, or in substitution for, outstanding
awards previously granted by an acquired company or a company with which
the Company combines, shall not be counted against the Shares available
for Awards under the Plan.
(iii) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist of authorized and unissued
Shares or of treasury Shares, including Shares held by the Company or a
Subsidiary and acquired in the open market or otherwise obtained by the
Company or a Subsidiary.
(b) Adjustments. In the event that the Committee determines
that any dividend or other distribution (whether in the form of cash,
Shares, Partnership interests, Subsidiary securities, other securities
or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company,
issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or
event affects the Shares such that an adjustment is determined by the
Committee to be appropriate to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the
Plan, then the Committee may, in its sole discretion and in such manner
as it may deem equitable, adjust any or all of (i) the number and type
of Shares (or other securities or property) with respect to which Awards
may be granted, (ii) the number and type of Shares (or other securities
or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award or,
if deemed appropriate, adjust outstanding Awards to provide the rights
contemplated by Section 9(b) hereof; provided, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to
violate Section 422(b)(1) of the Code or any successor provision thereto;
and provided further, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number.
SECTION 6
(a) Stock Options. Subject to the provisions of the Plan,
the Committee shall have sole and complete authority to determine the
Eligible Individuals to whom Options shall be granted, the number of
Shares to be covered by each Option, the option price therefor and the
conditions and limitations applicable to the exercise of the Option.
The Committee shall have the authority to grant Incentive Stock Options,
Nonqualified Stock Options or both. In the case of Incentive Stock
Options, the terms and conditions of such grants shall be subject to and
comply with such rules as may be required by Section 422 of the Code, as
from time to time amended, and any implementing regulations. Except in
the case of an Option granted in assumption of or substitution for an
outstanding award of a company acquired by the Company or with which the
Company combines, the exercise price of any Option granted under this
Plan shall not be less than 100% of the fair market value of the
underlying Shares on the date of grant.
(b) Exercise. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee may, in its
sole discretion, specify in the applicable Award Agreement or thereafter,
provided, however, that in no event may any Option granted hereunder be
exercisable after the expiration of 10 years after the date of such
grant. The Committee may impose such conditions with respect to the
exercise of Options, including without limitation, any condition relating
to the application of Federal or state securities laws, as it may deem
necessary or advisable.
(c) Payment. No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the option price therefor
is received by the Company. Such payment may be made in cash, or its
equivalent, or, if and to the extent permitted by the Committee, by
applying cash amounts payable by the Company upon the exercise of such
Option or other Awards by the holder thereof or by exchanging whole
Shares owned by such holder (which are not the subject of any pledge or
other security interest), or by a combination of the foregoing, provided
that the combined value of all cash, cash equivalents, cash amounts so
payable by the Company upon exercises of Awards and the fair market value
of any such whole Shares so tendered to the Company, valued (in
accordance with procedures established by the Committee) as of the
effective date of such exercise, is at least equal to such option price.
SECTION 7
(a) Stock Appreciation Rights. Subject to the provisions of
the Plan, the Committee shall have sole and complete authority to
determine the Eligible Individuals to whom Stock Appreciation Rights
shall be granted, the number of Shares to be covered by each Stock
Appreciation Right, the grant price thereof and the conditions and
limitations applicable to the exercise thereof. Stock Appreciation
Rights may be granted in tandem with another Award, in addition to
another Award, or freestanding and unrelated to any other Award. Stock
Appreciation Rights granted in tandem with or in addition to an Option
or other Award may be granted either at the same time as the Option or
other Award or at a later time. Stock Appreciation Rights shall not be
exercisable after the expiration of 10 years after the date of grant.
Except in the case of a Stock Appreciation Right granted in assumption
of or substitution for an outstanding award of a company acquired by the
Company or with which the Company combines, the grant price of any Stock
Appreciation Right granted under this Plan shall not be less than 100%
of the fair market value of the Shares covered by such Stock Appreciation
Right on the date of grant or, in the case of a Stock Appreciation Right
granted in tandem with a then outstanding Option or other Award, on the
date of grant of such related Option or Award.
(b) A Stock Appreciation Right shall entitle the holder
thereof to receive an amount equal to the excess, if any, of the fair
market value of a Share on the date of exercise of the Stock Appreciation
Right over the grant price. Any Stock Appreciation Right shall be
settled in cash, unless the Committee shall determine at the time of
grant of a Stock Appreciation Right that it shall or may be settled in
cash, Shares or a combination of cash and Shares.
SECTION 8
(a) Limited Rights. Subject to the provisions of the Plan,
the Committee shall have sole and complete authority to determine the
Eligible Individuals to whom Limited Rights shall be granted, the number
of Shares to be covered by each Limited Right, the grant price thereof
and the conditions and limitations applicable to the exercise thereof.
Limited Rights may be granted in tandem with another Award, in addition
to another Award, or freestanding and unrelated to any Award. Limited
Rights granted in tandem with or in addition to an Award may be granted
either at the same time as the Award or at a later time. Limited Rights
shall not be exercisable after the expiration of 10 years after the date
of grant and shall only be exercisable during a period determined at the
time of grant by the Committee beginning not earlier than one day and
ending not more than ninety days after the expiration date of an Offer.
Except in the case of a Limited Right granted in assumption of or
substitution for an outstanding award of a company acquired by the
Company or with which the Company combines, the grant price of any
Limited Right granted under this Plan shall not be less than 100% of the
fair market value of the Shares covered by such Limited Right on the date
of grant or, in the case of a Limited Right granted in tandem with a then
outstanding Option or other Award, on the date of grant of such related
Option or Award.
(b) A Limited Right shall entitle the holder thereof to
receive an amount equal to the excess, if any, of the Offer Price on the
date of exercise of the Limited Right over the grant price. Any Limited
Right shall be settled in cash, unless the Committee shall determine at
the time of grant of a Limited Right that it shall or may be settled in
cash, Shares or a combination of cash and Shares.
SECTION 9
(a) Other Stock-Based Awards. The Committee is hereby
authorized to grant to Eligible Individuals an "Other Stock-Based Award",
which shall consist of an Award, the value of which is based in whole or
in part on the value of Shares, that is not an instrument or Award
specified in Sections 6 through 8 of this Plan. Other Stock-Based Awards
may be awards of Shares or may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to,
Shares (including, without limitation, securities convertible or
exchangeable into or exercisable for Shares), as deemed by the Committee
consistent with the purposes of the Plan. The Committee shall determine
the terms and conditions of any such Other Stock-Based Award. Except in
the case of an Other Stock-Based Award granted in assumption of or in
substitution for an outstanding award of a company acquired by the
Company or with which the Company combines, the price at which securities
may be purchased pursuant to any Other Stock-Based Award granted under
this Plan, or the provision, if any, of any such Award that is analogous
to the purchase or exercise price, shall not be less than 100% of the
fair market value of the securities to which such Award relates on the
date of grant.
(b) Dividend Equivalents. In the sole and complete
discretion of the Committee, an Award, whether made as an Other Stock-Based
Award under this Section 9 or as an Award granted pursuant to
Sections 6 through 8 hereof, may provide the holder thereof with
dividends or dividend equivalents, payable in cash, Shares, Partnership
interests, Subsidiary securities, other securities or other property on
a current or deferred basis.
SECTION 10
(a) Amendments to the Plan. The Board may amend, suspend or
terminate the Plan or any portion thereof at any time, provided that no
amendment shall be made without stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement.
Notwithstanding anything to the contrary contained herein, the Committee
may amend the Plan in such manner as may be necessary for the Plan to
conform with local rules and regulations in any jurisdiction outside the
United States.
(b) Amendments to Awards. The Committee may amend, modify or
terminate any outstanding Award with the holder's consent at any time
prior to payment or exercise in any manner not inconsistent with the
terms of the Plan, including without limitation, (i) to change the date
or dates as of which an Award becomes exercisable, or (ii) to cancel an
Award and grant a new Award in substitution therefor under such different
terms and conditions as it determines in its sole and complete discretion
to be appropriate.
(c) Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee is hereby authorized to
make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 5(b)
hereof) affecting the Company, or the financial statements of the Company
or any Subsidiary, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such
adjustments are appropriate to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the
Plan.
(d) Cancellation. Any provision of this Plan or any Award
Agreement to the contrary notwithstanding, the Committee may cause any
Award granted hereunder to be canceled in consideration of a cash payment
or alternative Award made to the holder of such canceled Award equal in
value to such canceled Award. The determinations of value under this
subparagraph shall be made by the Committee in its sole discretion.
SECTION 11
(a) Delegation. Subject to the terms of the Plan and
applicable law, the Committee may delegate to one or more officers of the
Company the authority, subject to such terms and limitations as the
Committee shall determine, to grant Awards to, or to cancel, modify or
waive rights with respect to, or to alter, discontinue, suspend, or
terminate Awards held by, Eligible Individuals who are not officers or
directors of the Company for purposes of Section 16 of the Exchange Act,
or any successor section thereto, or who are otherwise not subject to
such Section.
(b) Award Agreements. Each Award hereunder shall be
evidenced by a writing delivered to the Participant that shall specify
the terms and conditions thereof and any rules applicable thereto,
including but not limited to the effect on such Award of the death,
retirement or other termination of employment of the Participant and the
effect thereon, if any, of a change in control of the Company or any
Subsidiary.
(c) Withholding. A Participant may be required to pay to
the Company, and the Company shall have the right to deduct from all
amounts paid to a Participant (whether under the Plan or otherwise), any
taxes required by law to be paid or withheld in respect of Awards
hereunder to such Participant. The Committee may provide for additional
cash payments to holders of Awards to defray or offset any tax arising
from the grant, vesting, exercise or payment of any Award.
(d) Transferability. No Awards granted hereunder may be
transferred, pledged, assigned or otherwise encumbered by a Participant
except: (i) by will; (ii) by the laws of descent and distribution; (iii)
pursuant to a domestic relations order, as defined in the Code, if
permitted by the Committee and so provided in the Award Agreement or an
amendment thereto; or (iv) if permitted by the Committee and so provided
in the Award Agreement or an amendment thereto, Options and Limited Rights
granted in tandem therewith may be transferred or assigned (a) to Immediate
Family Members, (b) to a partnership in which Immediate Family Members, or
entities in which Immediate Family Members are the owners, members or
beneficiaries, as appropriate, are the partners, (c) to a limited liability
company in which Immediate Family Members, or entities in which Immediate
Family Members are the owners, members or beneficiaries, as appropriate, are
the members, or (d) to a trust for the benefit of Immediate Family Members;
provided, however, that no more than a de minimus beneficial interest in
a partnership, limited liability company or trust described in (b), (c)
or (d) above may be owned by a person who is not an Immediate Family
Member or by an entity that is not beneficially owned solely by Immediate
Family Members. "Immediate Family Members" shall be defined as the
spouse and natural or adopted children or grandchildren of the
Participant and their spouses. To the extent that an Incentive Stock
Option is permitted to be transferred during the lifetime of the
Participant, it shall be treated thereafter as a Nonqualified Stock
Option. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of Awards, or levy of attachment or similar process
upon Awards not specifically permitted herein, shall be null and void and
without effect. The designation of a Designated Beneficiary shall not
be a violation of this Section 11(d).
(e) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the SEC, any stock exchange
upon which such Shares or other securities are then listed, and any
applicable federal or state laws, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(f) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company from adopting or
continuing in effect other compensation arrangements, which may, but need
not, provide for the grant of options, stock appreciation rights and
other types of Awards provided for hereunder (subject to stockholder
approval of any such arrangement if approval is required), and such
arrangements may be either generally applicable or applicable only in
specific cases.
(g) No Right to Employment. The grant of an Award shall not
be construed as giving a Participant the right to be engaged or employed
by or retained in the employ of FTX, the Company or any Subsidiary. FTX,
the Company or any Subsidiary may at any time dismiss a Participant from
engagement or employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement or any agreement relating to the engagement or employment of
the Participant by FTX, the Company or any Subsidiary. No Eligible
Individual, Participant or other person shall have any claim to be
granted any Award, and there is no obligation for uniformity of treatment
of Eligible Individuals, Participants or holders or beneficiaries of
Awards.
(h) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State
of Delaware.
(i) Severability. If any provision of the Plan or any Award
is or becomes or is deemed to be invalid, illegal, or unenforceable in
any jurisdiction or as to any Person or Award, or would disqualify the
Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of the Plan and any such
Award shall remain in full force and effect.
(j) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company and a Participant
or any other Person. To the extent that any Person acquires a right to
receive payments from the Company pursuant to an Award, such right shall
be no greater than the right of any unsecured general creditor of the
Company.
(k) No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities or other property shall
be paid or transferred in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated,
or otherwise eliminated.
(l) Headings. Headings are given to the subsections of the
Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.
SECTION 12
Effective Date of the Plan. The Plan shall be effective as of
the date of its approval by the Board, provided the Plan is approved by
the stockholders of the Company at the first annual meeting of
stockholders of the Company occurring subsequent to such date.
SECTION 13
Term of the Plan. No Award shall be granted under the Plan
after the tenth anniversary of the effective date of the Plan; however,
unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award theretofore granted may, and the authority of the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award
shall, extend beyond such date.
Exhibit 15.1
July 22, 1997
FM Properties Inc.
1615 Poydras Street
New Orleans, LA 70112
Gentlemen:
We are aware that FM Properties Inc. has incorporated by reference in
its Registration Statements (File Nos. 33-78798 and 333-31059) its
Form 10-Q for the quarter ended June 30, 1997, which includes our
report dated July 22, 1997 covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the
Securities Act of 1993 (the Act), this report is not considered a part
of the registration statements prepared or certified by our firm or a
report prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
Very truly yours,
Arthur Andersen LLP
5
0000885508
FM PROPERTIES INC.
1,000
6-MOS 6-MOS
DEC-31-1997 DEC-31-1996
JUN-30-1997 JUN-30-1996
0 0
0 0
0 0
0 0
0 0
4,656 2,684
0 0
0 0
64,737 60,515
0 0
0 0
0 0
0 0
143 143
63,172 58,986
64,737 60,515
0 0
0 0
0 0
0 0
0 0
0 0
0 0
3,936 (394)
220 0
3,716 (394)
0 0
0 0
0 0
3,716 (394)
.26 (.03)
0 0
