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As
filed with the Securities and Exchange Commission on June 30, 2006
Registration No. 333-12588
U.S. SECURITIES AND EXCHANGE COMMISSION
Post-Effective Amendment No. 1
to
FORM F-10
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INCO LIMITED
(Exact name of Registrant as specified in its charter)
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1061
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98-0000676 |
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(Primary Standard Industrial Classification)
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(I.R.S. Employer Identification Number |
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Code Number (if applicable))
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145 King Street West, Suite 1500,
Toronto, Ontario,
M5H 4B7 (416) 361-7511
(Address and telephone number of Registrant’s principal executive offices)
CT Corporation System
111 8th Avenue
New York, NY 10011
(212) 894-8940
(Name, address, (including zip code) and telephone number (including area code) of agent for service in the United States)
Copies to:
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| Simon A. Fish, Esq.
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Donald R. Crawshaw, Esq.
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| Executive Vice-President, General
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Sullivan & Cromwell LLP
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| Counsel & Secretary
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125 Broad Street
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| Inco Limited
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New York, New York 10004
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| 145 King Street West, Suite 1500 |
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| Toronto, Ontario, M5H 4B7 |
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Approximate date of commencement of proposed sale of the securities to the public:
Promptly after effectiveness of this Registration Statement.
Province of Ontario
(Principal jurisdiction regulating this offering (if applicable))
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| It is proposed that this filing shall become effective (check appropriate box): |
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Upon filing with the Commission, pursuant to Rule 467(a) (if in connection with an
offering being made contemporaneously in the United States and Canada) |
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At some future date (check the appropriate box below): |
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pursuant to Rule 467(b) on at (designate a time not sooner than 7 calendar days after
filing) |
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pursuant to Rule 467(b) on at (designate a time 7 calendar days or sooner after
filing) because the securities regulatory authority in the review jurisdiction has issued
a receipt or notification of clearance on |
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pursuant to Rule 467(b) as soon as practicable after notification of the Commission by
the Registrant or the Canadian securities regulatory authority of the review jurisdiction
that a receipt or notification of clearance has been issued with respect hereto. |
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After the filing of the next amendment to this form (if preliminary material is being
filed). |
If any of the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to the home jurisdiction’s shelf short form prospectus offering
procedures, check the following box. þ
The Registrant amends this registration statement on such date or dates as may be necessary to
delay its effective date until the registration statement shall become effective as provided in
Rule 467 under the Securities Act of 1933 or on such date as the Commission, acting pursuant to
Section 8(a) of the Act, may determine.
This Post-Effective Amendment No. 1 to the Registration Statement on Form F-10 (File No.
333-12588) (the “Registration Statement”) is filed by Inco Limited, a corporation organized and
continued under the Canada Business Corporations Act (“Inco”). Except as amended or supplemented
hereby, the Registration Statement remains in full force and effect. Capitalized terms not defined
herein have the meanings ascribed to them in the Registration Statement.
PART I
INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS
Part 1 of the Registration Statement is hereby amended as follows:
Additional Issue
INCO LIMITED
Up to 11,773,245 Common Shares Issuable Upon Exercise of Common Share Purchase Warrants
Expiring August 21, 2006, Each Whole Warrant to Purchase One Common Share of Inco Limited
at an Exercise Price of Cdn. $30.00 or the U.S. Dollar Equivalent Thereof (Subject to Adjustment)
Inco Limited (“Inco” or the “Company”) has filed a registration statement on Form F-10 with the
Securities and Exchange Commission registering the distribution of up to 5,872,324 Common Shares of
the Company issuable upon the exercise of Inco Common Share purchase warrants (the “Underlying
Common Shares”), each warrant entitling the holder to purchase one Common Share of the Company at
an exercise price of Cdn. $30.00 or the U.S. dollar equivalent thereof, subject to adjustment (the
“Exercise Price”) until 5:00 p.m., Toronto time, August 21, 2006 (the “Warrants”) based upon
prevailing exchange rates at the time of exercise, and the associated rights relating thereto under
the Shareholder Rights Plan (as defined herein), in the United States in accordance with the
multijurisdictional disclosure system adopted by the United States Securities and Exchange
Commission and the provincial securities regulators in Canada.
The issue of the Underlying Common Shares will result in cash proceeds to the Company equal to the
amount of the Exercise Price for each Underlying Common Share issued. Assuming no adjustment is
made to the Exercise Price and all of the Warrants are exercised prior to their August 21, 2006
expiry date, the total proceeds to the Company would be Cdn.
$353,197,350 or U.S. $316,500,145
based upon the June 29, 2006 Bank of Canada noon exchange rate
of Cdn. $1.00 = U.S. $0.8961. See
“Use of Proceeds”. No commissions or fees will be payable by the Company in connection with the
issuance of the Underlying Common Shares.
The Common Shares of the Company are listed on The Toronto Stock Exchange (the “TSX”) and the New
York Stock Exchange (the “NYSE”).
For a discussion of certain risks that should be considered by investors in evaluating the
securities qualified for distribution hereby, see “Risk
Factors” beginning on page 14.
This amended and restated short form prospectus has not been filed in the Province of Ontario for
the purpose of qualifying, and will not qualify, any distribution of the Underlying Common Shares
in the Province of Ontario or elsewhere in Canada.
This offering is made by a Canadian issuer that is permitted, under a multijurisdictional
disclosure system adopted by the United States, to prepare this prospectus in accordance with the
disclosure requirements of Canada. Prospective investors should be aware that such requirements
are different from those of the United States. The financial statements and other financial information included or incorporated by reference herein in respect of
Inco and Falconbridge Limited
(“Falconbridge”) is prepared in accordance with Canadian
generally accepted accounting principles (“Canadian
GAAP”), while the financial statements and other information incorporated by reference herein in respect of Phelps
Dodge is prepared in accordance with United States generally accepted
accounting principles (“U.S. GAAP”). There
are a number of significant differences between Canadian GAAP and
U.S. GAAP, and financial statements prepared in
accordance with one type of GAAP may not be comparable to financial statements prepared in accordance with another
type of GAAP. Investors are cautioned that Phelps Dodge financial statements and other financial information are not
reconciled to Canadian GAAP. Inco's financial statements and Falconbridge's annual financial statements are
reconciled to U.S. GAAP in footnotes thereto.
Further, the audited
financial statements of Inco and Falconbridge are subject to Canadian auditing
and auditor independence standards.
Prospective investors should be aware that the acquisition of the securities described herein may
have tax consequences both in the United States and Canada. Such consequences for investors who
are resident in, or citizens of, the United States may not be described fully herein.
The enforcement by investors of civil liabilities under the federal securities laws may be affected
adversely by the fact that the Company is organized under the laws of Canada, that some or all of
its officers and directors may be residents of Canada, that some or all of the experts named in the
registration statement may be residents of Canada, and that all or a substantial portion of the
assets of the Company and said persons may be located outside the United States.
These securities have not been approved or disapproved by the Securities and Exchange Commission or
any State Securities Commission nor has the Securities and Exchange Commission or any State
Securities Commission passed upon the accuracy or adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
The date
of this amended and restated prospectus is June 30, 2006
TABLE OF CONTENTS
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CURRENCY REFERENCES |
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DOCUMENTS INCORPORATED BY REFERENCE |
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ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES |
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CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS |
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THE COMPANY |
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USE OF PROCEEDS |
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DESCRIPTION OF SHARE CAPITAL |
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CERTAIN INCOME TAX CONSIDERATIONS |
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RISK FACTORS |
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PLAN OF DISTRIBUTION |
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EXPERTS |
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AVAILABLE INFORMATION |
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DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT |
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CURRENCY REFERENCES
In this prospectus, unless otherwise specified or the context otherwise requires, all references to
dollar amounts are references to U.S. dollars. The exchange rate between the Canadian dollar and
the U.S. dollar used in this prospectus varies depending on the date and context of the information
contained herein.
On
June 29, 2006, the noon buying rate for U.S. dollars reported by the Bank of Canada was U.S.
$1.00 equals Cdn. $0.8961.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, filed with the applicable securities commissions or similar authorities in
the Provinces of Canada and in the United States are incorporated by reference herein and form an
integral part of this prospectus:
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the Annual Information Form of the Company, consisting of the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2005 (the “2005 10-K”); |
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the Proxy Circular and Statement of the Company dated April 20, 2006 other than the sections
entitled “Report of the Management Resources and Compensation Committee on Executive
Compensation” and “Comparative Shareholder Return”; |
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the Take-Over Bid Circular of the Company dated October 24, 2005, as amended on December 14,
2005, January 19, 2006, February 27, 2006, May 29, 2006
and June 30, 2006 (including the documents of Company and
Falconbridge and Phelps Dodge incorporated by reference therein) (the
“Take-Over Bid Circular”); |
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the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2006; |
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the Directors’ Circular of the Company dated May 29, 2006; and |
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the material change reports of the Company dated May 15, 2006 and June 30, 2006. |
Material change reports (other than confidential reports), financial statements, annual information
forms, information circulars (including the management information circular and proxy statement
expected to be filed in connection with the proposed plan of arrangement described in the material
change report of the Company dated June 30, 2006 that would combine the Company with a
wholly-owned subsidiary of Phelps Dodge Corporation), take-over bid circulars, directors’ circulars
and amendments to any of the foregoing which are filed by the Company with a securities commission
or any other similar authority in Canada after the date of this prospectus and prior to the
termination of the distribution of Underlying Common Shares under this prospectus shall be deemed
to be incorporated by reference into this prospectus. In addition, any other documents which are
filed by the Company with a securities commission or similar regulatory authority in Canada or the
United States and that expressly state that such filings are intended to be incorporated by
reference into this prospectus shall be deemed to be incorporated by reference into this
prospectus.
Any statement contained in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for the purposes of this prospectus to the extent that
a statement contained herein, or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein, modifies or supersedes that statement. The modifying
or superseding statement need not state that it has modified or superseded a prior statement or
include any other information set forth in the document that it modifies or supersedes. The making
of a modifying or superseding statement shall not be deemed an admission for any purposes that the
modified or superseded statement, when made, constituted a misrepresentation, an untrue statement
of a material fact or an omission to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in light of the circumstances in which it was made.
Any statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus. Upon a new annual information form and annual financial
statements being filed by the Company with, and where required, accepted by, the Ontario Securities
Commission during the currency of this prospectus, the previous annual information form, the
previous annual financial statements and all interim financial statements, material change reports
and information circulars filed prior to the commencement of the then current fiscal year will be
deemed no longer to be incorporated by reference into this prospectus for purposes of future offers
and sales of Underlying Common Shares hereunder.
The Company will provide without charge to each person to whom this prospectus is delivered, upon
the written or oral request of such person, a copy of any or all of the foregoing documents
incorporated herein by reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests for such documents should be
directed to the Office of the Secretary, Inco Limited, 145 King Street West, Suite 1500, Toronto,
Ontario, M5H 4B7, telephone (416) 361-7511.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
The Company is a corporation organized under the laws of Canada and a majority of its assets are
located in, and many of its directors and officers are residents of, Canada. As a result, it may be
difficult for United States investors to effect service within the United States upon those
directors or officers who are not residents of the United States, or to realize in the United
States upon judgments of courts of the United States predicated upon civil liability of such
directors or officers under U.S. federal securities laws. The Company has been advised by Osler,
Hoskin & Harcourt LLP, Canadian counsel for the Company, that a judgment of a U.S. court predicated
solely upon civil liability under such laws would probably be enforceable in Canada if the U.S.
court in which the judgment was obtained had a basis for jurisdiction in the
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matter that was
recognized by a Canadian court for such purposes. The Company has also been advised by such
counsel, however, that there is substantial doubt whether an action could be brought in Canada in the first instance on the
basis of liability predicated solely upon such laws.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus or included in documents incorporated by reference
in this prospectus are forward-looking statements (as defined in the U.S. Securities Exchange Act
of 1934) or contain forward-looking information (as defined in the Ontario Securities Act).
Examples of such statements include, but are not limited to, statements concerning: (1) the price
volatility for nickel and other primary metal products produced by the Company; (2) the demand for
and supply of nickel, copper and other metals, both globally and for certain markets and uses, as
well as the availability of, and prices for, and the Company’s requirements for, intermediate
products containing nickel purchased by the Company and/or to be produced by the Company and
nickel-containing stainless steel scrap and other substitutes for primary nickel and nickel
inventories; (3) the premiums realized by the Company over London Metal Exchange (“LME”) cash
prices and the sensitivity of the Company’s results of operations to changes in metals prices,
prices of commodities and other supplies used in its operations, interest and exchange rates, and
our common share price; (4) the Company’s strategies and plans and level of capital expenditures
and contributions thereto from third parties; (5) the Company’s nickel unit cash cost of sales
before and after by-product credits, interest and other expenses; (6) the Company’s energy and
other costs, and pension contributions and expenses and assumptions relating thereto; (7) the
Company’s position as a low-cost producer of nickel; (8) the Company’s debt-equity ratio and
tangible net worth; (9) the political unrest or instability in countries (such as Indonesia) in
which the Company and its subsidiaries (such as its subsidiary PT Inco) operate and the impact
thereof on the Company; (10) construction, commissioning, initial start-ups, shipments and other
schedules, capital costs and other aspects of the Goro and Voisey’s Bay projects and PT Inco’s
latest expansion program to increase its production, changes in the ownership of the Goro project,
capital expenditures, and hydroelectric power generation at PT Inco and the effect thereon of lower
water levels; (11) receipt of funds under the necessary financing plans and arrangements for, and
partner or similar investment and other agreements or arrangements associated with, the Goro
project, and the timing of the start of production and the costs of construction with respect to,
the issuance of the necessary permits and other authorizations required for, and engineering and
construction timetables for, the Goro project and the additional phases of the Voisey’s Bay
project; (12) the Company’s estimates of the quantity and quality of its ore/mineral reserves and
mineral resources, exploration and drilling schedules and the timing of completion of feasibility
assessments of the Company’s estimated ore/mineral reserves; (13) planned capital expenditures and
tax payments; (14) the Company’s costs of production, deliveries of products, and production levels
for 2006 and beyond, including the costs of and potential impact on operations and production of
complying with existing and proposed environmental laws and regulations and net reductions in
environmental emissions; (15) the impact of changes in Canadian dollar-U.S. dollar and other
exchange rates on the Company’s costs and the results of its operations; (16) the Company’s sales
of specialty nickel products; (17) the Company’s cost reduction and other financial and operating
objectives and planned maintenance and other shutdowns; (18) the commercial viability of new
production processes and process changes and processing recoveries for its development projects;
(19) the Company’s productivity, exploration and research and development initiatives as well as
environmental, health and safety initiatives; (20) the negotiation of collective agreements with
its unionized employees; (21) the Company’s sales organization and personnel requirements; (22)
business and economic conditions; (23) the extension of current mining and other leases, export
licences and concessionary rights; (24) third party tolling, smelting and refining arrangements;
and (25) factors relating to the Offer made by the Company to the common shareholders of
Falconbridge to purchase all of the outstanding common shares of Falconbridge and the results
expected to be achieved from the successful completion of the Offer and the combination of the
Company and Falconbridge, including the timing and conditions to receipt of required regulatory
clearances, the synergies and cost savings expected to be achieved and the timing thereof; the
increased market capitalization, share price multiple and improved liquidity of the Company’s
shares; the improved cash flow and earnings of the Company; statements regarding strategies,
objectives, goals and targets; and the financial position and international presence that would
permit the combined company to better compete against global mining companies. Inherent in
forward-looking statements and forward-looking information are risks and uncertainties that are
well beyond the Company’s ability to predict or control. Actual results and developments are likely
to differ, and may differ materially, from those expressed or implied by the forward-looking
statements and forward-looking information contained in this prospectus.
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Such forward-looking statements and forward-looking information are based on a number of
assumptions which may prove to be incorrect, including, but not limited to, assumptions about:
business and economic conditions generally; exchange rates, availability and cost of energy and other anticipated and unanticipated costs and pension
contributions and expenses; the supply and demand for, deliveries of, and the level and volatility
of prices of, nickel, copper, cobalt, aluminum, zinc and other primary metals products, purchased
intermediates and nickel-containing stainless steel scrap and other substitutes and competing
products for the primary nickel and other metal products the Company produces; the timing and
quantities of available Voisey’s Bay intermediate nickel and copper concentrates and the
feasibility and timing of the development of a hydrometallurgical
process for the Voisey’s Bay Project; the
timing of the receipt of remaining regulatory and governmental approvals for the Goro project and
other operations; the continued availability of financing on appropriate terms, including through
partner or other participation arrangements in the case of the Goro project, for the Company’s
development projects; the Company’s costs of production and production and productivity levels, as
well as those of the Company’s competitors; the Company’s ability to continue to pay quarterly cash
dividends in amounts as its Board of Directors may determine in light of other uses for such funds;
metal recovery rates and ore recovery and dilution factors; engineering and construction timetables
and capital and operating costs for the Goro and Voisey’s Bay projects and PT Inco’s latest
expansion program; market competition; mining, processing, exploration and research and development
activities and methods; the accuracy of ore/mineral reserve and mineral resource estimates;
premiums realized over LME cash and other benchmark prices; tax benefits/charges; the resolution of
environmental reviews and environmental and other proceedings and the impact on the Company of
various environmental regulations and initiatives; the ability to obtain or renew permits,
licences, leases and concessions; assumptions concerning political and economic stability and
expectations of inflation in Indonesia and other countries or locations in which the Company
operates or otherwise; and the Company’s ongoing relations with its employees at its operations
throughout the world. In addition to the foregoing, forward-looking statements and forward-looking
information relating to the Offer, its completion and the consequences thereof, are based on a
number of assumptions which may prove to be incorrect, including, but not limited to, assumptions
respecting Falconbridge and its operations and plans, the ability of the Company to successfully
compete against global metals and mining and exploration companies by creating through the
combination of the Company and Falconbridge an enterprise of increased scale; continued strong
demand for nickel, copper and other metals in emerging markets such as China; the level of pre-tax
operating and other synergies and cost savings, and other benefits to be realized based on the
achievement of operational efficiencies from restructuring, integration and other initiatives
relating to the combination; the approvals or clearances required to be obtained by the Company and
Falconbridge from regulatory and other agencies and bodies being obtained in a timely manner;
divestitures required by regulatory agencies being acceptable and completed in a timely manner;
there being limited costs, difficulties or delays relating to the integration of Falconbridge’s
operations with those of the Company; and the timely completion of the steps required to be taken
for the eventual combination and integration of the two companies.
The forward-looking statements and forward-looking information included in this prospectus
represent the Company’s views as of the date of this prospectus. While the Company anticipates that
subsequent events and developments may cause the Company’s views to change, the Company
specifically disclaims any obligation to update these forward-looking statements and
forward-looking information. These forward-looking statements and forward-looking information
should not be relied upon as representing the Company’s views as of any date subsequent to the date
of this prospectus. Although the Company has attempted to identify important factors or assumptions
that could cause actual actions, events or results to differ materially from those described in
forward-looking statements and forward-looking information, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or intended. There can be no
assurance that forward-looking statements and forward-looking information will prove to be
accurate, as actual results and future events could differ materially from those anticipated in
such statements. Accordingly, readers of this prospectus should not place undue reliance on
forward-looking statements and forward-looking information. These factors are not intended to
represent a complete list of the factors that could affect the Company. Additional factors are
noted elsewhere in this prospectus.
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THE COMPANY
Business of Inco Limited
Inco Limited was incorporated in 1916 under the laws of Canada, succeeding a business established
in 1902. In 1979, Inco was continued by articles of continuance under the Canada Business
Corporations Act and is governed by that Act. The Company’s executive offices are located at 145
King Street West, Suite 1500, Toronto, Ontario, Canada M5H 4B7. Unless the context otherwise requires, all references in this prospectus to “Inco”, “we”, “us” or the
“Company include all of its consolidated subsidiaries, unincorporated units and divisions.
Inco is one of the world’s premier mining and metals companies. We are a leading producer of
nickel, a hard, malleable metal which, given its properties and wide range of applications, can be
found in thousands of products. We are also an important producer of copper, precious metals and
cobalt and a major producer of value-added specialty nickel products. We also produce sulphuric
acid and liquid sulphur dioxide as by-products from our processing operations in Sudbury, Ontario.
Our principal mines and processing operations are located in the Sudbury area of Ontario, the
Thompson area of Manitoba, Voisey’s Bay in Newfoundland and Labrador, and, through a subsidiary in
which we have an equity interest of approximately 61 per cent, PT International Nickel Indonesia
Tbk (“PT Inco”), on the Island of Sulawesi. We also operate additional wholly-owned metals
refineries at Port Colborne, Ontario and in the United Kingdom at Clydach, Wales and Acton,
England. We also have interests in nickel refining capacity in the following Asian countries: in
Japan, through Inco TNC Limited (“ITL”), in which we have an equity interest of 67 per cent; in
Taiwan, through Taiwan Nickel Refining Corporation (“Taiwan Nickel”), in which we have an equity
interest of 49.9 per cent; and in South Korea, through Korea Nickel Corporation (“Korea Nickel”),
in which we have an equity interest of 25 per cent. In addition, we have a 65 per cent equity
interest in Jinco Nonferrous Metals Co., Ltd., a company that produces nickel salts in Kunshan
City, People’s Republic of China (“China”). We also have joint venture operations in China, through
Inco Advanced Technology Materials (Dalian) Co., Ltd. (“Dalian”), in which we have a total direct
and indirect equity interest of 81.6 per cent, and Inco Advanced Technology Materials (Shenyang)
Co., Ltd. (“Shenyang”), in which we have a total direct and indirect equity interest of 82 per
cent. The Dalian and Shenyang ventures in China produce nickel foam products for the Asian battery
market. We also have a shearing and packaging operation in China for certain nickel products to
meet the specific needs of this geographic market.
Please also refer to the description of the Company’s business contained in the Company’s 2005
10-K, which is incorporated by reference into this prospectus.
USE OF PROCEEDS
The total proceeds to be received by the Company in respect of the exercise price of the Warrants
will be Cdn. $353,197,350 or U.S. $316,500,145 based upon the
June 29, 2006 exchange rate of Cdn.
$1.00 = U.S. $0.8961 (assuming that all of the Warrants are exercised prior to their expiry and
that there is no adjustment to the exercise price), which will be used by the Company for general
corporate purposes, including ongoing expenditures for the Company’s development projects.
DESCRIPTION OF SHARE CAPITAL
The Company is authorized to issue an unlimited number of Common Shares (without nominal or par
value). As of June 16, 2006, there were issued and outstanding 198,755,104 Common Shares. The
following is only a summary of the Company’s Common Shares, Preferred Shares and terms of the
Warrants and is qualified in its entirety by reference to the full text of, and more specific
details contained in, the Company’s Articles of Continuance, By-laws and the Warrant Agreement. A
copy of the Company’s Articles of Continuance, By-laws and the Warrant Agreement is available from
the Office of the Secretary of the Company, 145 King Street West, Suite 1500, Toronto, Ontario, M5H
4B7, telephone (416) 361-7511.
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Common Shares
The Common Shares of the Company have general voting rights, that is, each holder is entitled to
receive notice of, to attend and to vote at, on the basis of one vote for each share held, all
meetings of shareholders of the Company other than meetings at which the holders of another class
or series of shares are entitled to vote separately. Subject to the rights and priorities of the
holders of Preferred Shares and any other class or series of shares in the Company’s capital stock
authorized from time to time and ranking in priority to the Common Shares, the holders of Common
Shares are entitled to: (i) receive such dividends as may be declared by the Board of Directors of
the Company (the “Board of Directors”) in its discretion out of funds legally available therefor,
and (ii) in the event of a distribution of assets of the Company among its shareholders on a
liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other
distribution of assets of the Company among its shareholders for the purpose of winding up its
affairs, receive, in respect of each share so held, a pro rata amount of such assets of the Company
equivalent to the proportion equal to the Common Shares then outstanding divided by the number of
Common Shares, without preference or distinction.
The holders of Common Shares have no preemptive, redemption or conversion rights. The Common Shares
rank junior to all Preferred Shares both as to return of capital and as to dividends.
Dividends
Subject to the preferential rights of any prior ranking shares (of which none were issued and
outstanding as of the date of this prospectus), the holders of Common Shares are entitled to such
dividends as may be declared by the Company’s Board of Directors out of funds legally available
therefor. No dividend or other distribution on the Common Shares shall be paid, and no Common Share
shall be acquired for value, unless dividends on all outstanding Preferred Shares have been paid
for all past quarterly periods.
On April 19, 2005, the Company announced that its Board of Directors had reinstated a quarterly
cash dividend of $0.10 per share on the Company’s Common Shares, with the first such dividend
payable June 1, 2005, and on February 7, 2006 the Company announced that the Board of Directors had
increased the quarterly dividend to $0.125 per share, effective for the dividend payable March 1,
2006. The payment of dividends on the Common Shares had been eliminated by the Board of Directors
in 1999. The Board continues to review on a periodic basis the declaration and payment of dividends
on the Common Shares and its dividend policy. This policy is expected to be evaluated by the Board
of Directors upon the completion of the pending acquisition of Falconbridge. The quarter-to-quarter
decision as to the amount of the quarterly dividend per Common Share is reviewed by the Board of
Directors and determined with reference to a number of factors, including current business results
and cash needs.
Common Share Purchase Warrants
As part of the redemption price the Company paid in connection with the redemption of the Company’s
Class VBN Shares in late 2000, Inco issued approximately 11 million Common Share Purchase Warrants
(“Warrants”). The Warrants were issued under, and are governed by, a Warrant Agreement dated as of
December 1, 2000 by and among Inco, CIBC Mellon Trust Company, as the Canadian Warrant Agent, and
ChaseMellon Shareholder Services, L.L.C., as the U.S. Warrant Agent (the “Warrant Agreement”).
Each whole Warrant entitles the holder to purchase one Common Share at an exercise price of
Cdn.$30.00 (or the equivalent in U.S. dollars based upon then prevailing exchange rates at the time
of exercise), subject to certain adjustments (the “Exercise Price”), until 5:00 pm (Toronto time)
on August 21, 2006. Any Warrants not exercised prior to such date will expire. A Warrant holder
does not have any voting or pre-emptive rights or any other rights as a shareholder of the Company
until the Warrants held by such holder have been duly exercised and Common Shares of the Company
have been issued to the holder pursuant thereto.
The Warrant Agreement provides that the Exercise Price and/or the number and kind of securities or
property issuable on the exercise of the Warrants are subject to adjustment in certain events,
including (1) the subdivision or consolidation of the Common Shares, (2) the issuance to all or
substantially all the holders of Common Shares of a stock dividend or other
7
distributions excluding
any issuance of securities to holders of outstanding Common Shares which constitutes a “Dividend
Paid in the Ordinary Course” (defined generally in the Warrant Agreement to include dividends or
other distributions exceeding certain threshold aggregate or annual amounts based upon the value of
the dividends or other distributions paid or consolidated net earnings for specified periods), and
(3) the distribution to all or substantially all the holders of Common Shares of (i) shares of any
other class, (ii) rights, options or warrants to acquire Common Shares, or (iii) cash, property or
other assets of the Company (excluding, in each case, “Dividends Paid in the Ordinary Course”).
The Exercise Price and/or the number and kind of securities or property issuable on exercise will
also be subject to certain adjustments in connection with certain other events, including any
change, reclassification or alteration of the Common Shares, the consolidation, amalgamation, merger or other similar arrangement of the Company with
another Company, or the transfer of all or substantially all of the
Company’s assets.
No adjustment in the Exercise Price or the number or kind of securities or property issuable upon
exercise will be required to be made (1) unless the cumulative effect of such adjustment or
adjustments would change the Exercise Price by at least one per cent or, in the event of a change
in the number of Common Shares purchasable upon exercise, the number of Common Shares issuable
would change by at least one one-hundredth of a Common Share or (2) in respect of the issue of
Common Shares pursuant to (i) the exercise of the Warrants or (ii) the Company’s Optional Stock
Dividend Program and Share Purchase Plan and options granted current or former employees of the
Company or any other option or share purchase plan.
The Warrant Agreement provides that modifications and alterations to it and to the Warrants may be
made if authorized by extraordinary resolution and if all other necessary approvals are received.
The term “extraordinary resolution” is defined in the Warrant Agreement to mean, in effect, a
resolution passed by the affirmative votes of the holders of not less than 66 2/3 per cent of the
Warrants represented and voting at a meeting of Warrant holders or an instrument or instruments in
writing signed by the holders of not less than 66 2/3 per cent of the outstanding Warrants. The
Warrant Agreement and the Warrants may be modified and altered without authorization by
extraordinary resolution and if all necessary approvals are received in order to cure defects or
ambiguities, to make ministerial amendments otherwise provided that the rights of Warrant holders
are not materially adversely affected thereby.
The Warrants are listed on the TSX and on the NYSE. Subject to applicable law, Inco may purchase
Warrants in the market or by tender or private contract, and any Warrants so purchased will be
cancelled.
No fractional Underlying Common Shares will be issuable upon exercise of any Warrants. To the
extent that the holder of a Warrant would otherwise be entitled to purchase a fraction of an
Underlying Common Share, in lieu of a fractional share, the holder will receive a cash payment
therefor based upon the then current market price of the Common Shares.
The warrant agreement by and among the Company, the Warrant Agent and the U.S. Warrant Agent (the
“Warrant Agreement”), provides that the Exercise Price and/or the number and kind of securities or
property issuable on the exercise of the Warrants are subject to adjustment in certain events.
Preferred Shares
Certain Provisions of the Preferred Shares as a Class Issuable in Series
Inco’s authorized share capital includes 45 million Preferred Shares issuable in series, each
series consisting of such number of shares and having such provisions attached thereto as may be
determined by the Board of Directors of the Company, subject to a maximum aggregate issue price of
Cdn.$1,500 million (or the equivalent in other currencies). As of the date of this prospectus, no
Preferred Shares were issued or outstanding.
Priority
8
The Preferred Shares of each series rank on a parity with the Preferred Shares of every other
series, and prior to the Common Shares with respect to the payment of cumulative dividends and the
distribution of assets on a liquidation, dissolution or winding up of the Company or for the
purpose of winding up its affairs (“Liquidation”).
Creation and Issue of Additional Preferred Shares
Subject to applicable law, Inco may, without the consent of the holders of the Preferred Shares as
a class, (i) create additional Preferred Shares, (ii) create preferred shares of another class or
classes ranking on a parity with the Preferred Shares with respect to the payment of dividends
and/or the distribution of assets on Liquidation and (iii) increase any maximum number of
authorized shares of any one or more of such other classes of shares. If (but only so long as) any
dividends are in arrears on any outstanding series of the Preferred Shares, the Company may not,
without the consent, by a simple majority of the votes cast, of the holders of the Preferred Shares
as a class, (i) issue any additional series of the Preferred Shares, or (ii) issue preferred shares of another class ranking on a parity with the Preferred Shares with respect to the
payment of dividends and/or the distribution of assets on Liquidation.
Class Voting Rights
The holders of the Preferred Shares are not entitled to any voting rights as a class except (i) as
provided above, (ii) as provided by law, or (iii) with respect to the right to vote on certain
matters as described under “Modification” below. When the holders of Preferred Shares vote as a
class, or when two or more series of Preferred Shares vote together at a joint meeting, each holder
has one one-hundredth of a vote in respect of each Canadian dollar (or its equivalent in a foreign
currency at the date of issuance) of the issue price of the Preferred Shares he or she holds.
The Board of Directors may, at the time of creation of any series of Preferred Shares, confer
voting rights on such series in addition to the voting rights of the holders of the Preferred
Shares as a class. It is the Board of Director’s intention that, with respect to the creation of
any future series of Preferred Shares, to the extent that such Preferred Shares would have general
voting rights then such shares would not have more than one vote in respect of each Preferred
Share.
Modification
The class provisions attaching to the Preferred Shares may be amended at any time with such
approval of the holders of such shares as may then be required by law or by the rules of any stock
exchange on which the shares or any series of Preferred Shares are then listed. Currently, this
approval requirement is by at least two-thirds of the votes cast at a meeting of such holders duly
called for the purpose and at which a quorum is present, or as are required by the rules of any
stock exchange upon which the shares of any series of Preferred Shares are then listed. In
addition, the approval by at least two-thirds of the votes cast at a meeting of the holders of all
shares of the Company carrying general voting rights is currently required by law for the amendment
of such class provisions.
Shareholder Rights Plan
Inco’s current shareholder rights plan is set out in a Rights Plan Agreement, as amended and
restated as noted below, entered into between Inco and CIBC Mellon Trust Company, as Rights Agent,
and is designed to (i) encourage the fair and equal treatment of shareholders in connection with
any bid for control of Inco by providing them with more time than the minimum statutory period
during which such bid must remain open in order to fully consider their options, and (ii) provide
Inco’s Board of Directors with additional time, if appropriate, to pursue other alternatives to
maximize shareholder value.
The plan was initially approved by Inco’s Board of Directors in September 1998 and became effective
in October 1998. It was amended in certain respects by Inco’s Board of Directors in February 1999
to ensure that it was consistent with rights plans which had been recently adopted by other
Canadian companies. The amended plan was approved by the shareholders at our 1999 Annual and
Special Meeting of Shareholders in April 1999. In February 2002, Inco’s Board of Directors approved
certain minor amendments to the plan to ensure that its terms remained consistent with other rights
plans in Canada and unanimously recommended that the plan, as proposed to be amended, be
reconfirmed, as amended
9
and restated, by the shareholders. Such reconfirmation was obtained at the
Company’s Annual and Special Meeting of Shareholders in April 2002. In February 2005, Inco’s Board
of Directors approved certain further minor amendments to the plan to reflect, among other things,
changes in Inco’s capital structure since April 2002, including the issuance of convertible debt
securities, and unanimously recommended that the plan, as proposed to be amended, be reconfirmed,
as amended and restated, by the shareholders. Such reconfirmation was obtained at our Annual and
Special Meeting of Shareholders in April 2005. The plan remains in effect until October 2008.
The rights issued under the plan are attached to and trade with Inco’s Common Shares and no
separate certificates will be issued unless an event triggering these rights occurs. Certificates
evidencing Common Shares will be legended to reflect that they evidence the rights until the
Separation Time (as defined below). Holders of Inco’s Convertible Debentures, Subordinated
Convertible Debentures and LYON Notes (as those terms are defined in Note 13 to the financial
statements included in Inco’s Form 10-K for the year ended December 31, 2005 and Inco’s Form 10-Q
for the three months ended March 31, 2006, which are incorporated by reference herein) and the
certificates of entitlement attached thereto (which entitle their holders to receive rights in the event that the related security is converted into
Common Shares) will generally be entitled to receive, upon conversion of the relevant security and
presentment of the certificate of entitlement, respectively, rights in an amount equal to the
number of Common Shares issued upon conversion of such securities.
The rights will separate from the Common Shares and be transferable, trade separately from the
Common Shares and become exercisable at the time (the “Separation Time”) when a person acquires, or
announces its intention to acquire, beneficial ownership of 20 per cent or more of (i) Inco’s then
outstanding Voting Securities (defined at this time to be Inco’s Common Shares) or (ii) its then
outstanding Common Shares alone, in either case without complying with the “permitted bid”
provisions of the plan (as summarized below), or without the approval of Inco’s Board of Directors.
Should such an acquisition occur, each right would entitle its holders, other than the acquiring
person or persons related to or acting jointly or in concert with such person, to purchase
additional Common Shares of the Company at a 50 per cent discount to the then current market price.
The acquisition by any person (an “Acquiring Person”) of 20 per cent or more of Inco’s Common
Shares or Voting Securities, other than by way of a permitted bid, is referred to as a
“Flip-in-Event”. Any rights held by an Acquiring Person will become void upon the occurrence of a
Flip-in-Event.
A “permitted bid” is a bid made to all holders of Inco’s outstanding Voting Securities that is open
for at least 60 days. If, at the end of such 60-day period, more than 50 per cent of Inco’s then
outstanding Common Shares, other than those securities owned by the party making the bid and
certain related persons, have been tendered, such party may take up and pay for the Common Shares
but must extend the bid for a further 10 business days to allow other shareholders to tender, thus
providing shareholders who had not tendered to the bid with enough time to tender to the bid once
it is clear that a majority of Common Shares have been tendered.
Under the plan, Inco can (i) waive its application to enable a particular takeover bid to proceed,
in which case the plan will be deemed to have been waived with respect to any other takeover bid
made prior to the expiry of any bid subject to such waiver or (ii) with the prior approval of the
holders of Voting Securities or rights, redeem the rights for nominal consideration at any time
prior to a Flip-in-Event.
CERTAIN INCOME TAX CONSIDERATIONS
Certain Canadian Federal Income Tax Considerations
This summary is of a general nature only and is not intended to be, and should not be construed to
be, legal or tax advice to any particular holder and no representation is made with respect to the
Canadian tax consequences to any particular holder. Accordingly, holders should consult their own
tax advisors with respect to the Canadian tax considerations relevant to them, having regard to
their particular circumstances.
In the opinion of Osler, Hoskin & Harcourt LLP, counsel to the Company, the following summary
describes the principal Canadian federal income tax considerations generally applicable to a holder
who acquires as beneficial owner Underlying Common Shares pursuant to the exercise of the Warrants,
who holds at all relevant times for purposes of the Income Tax
10
Act (Canada) such Underlying Common
Shares as capital property, who is not affiliated with the Company and deals at arm’s length with
the Company, who is neither a resident nor deemed to be resident in Canada and who does not use or
hold, and is not deemed to use or hold, such Underlying Common Shares in connection with a business
carried on in Canada (‘a “non-resident holder”). Special rules that are not discussed in this
summary may apply to a non-resident holder that is an insurer carrying on business in Canada and
elsewhere; such holders should consult their own tax advisors.
This summary is based on the current provisions of the Tax Act, the regulations thereunder, the
current provisions of the Canada-United States Income Tax Convention, 1980 (the “Canada-U.S. Tax
Treaty”), all specific proposals to amend the Tax Act and the regulations thereunder publicly
announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax
Proposals”) and counsel’s understanding of the administrative and assessing practices of the Canada
Revenue Agency published in writing prior to the date hereof. There is no certainty that the Tax
Proposals will be enacted in the form proposed, if at all. This summary is not exhaustive of all
Canadian federal income tax considerations. This summary does not take into account or anticipate changes in income tax law or administrative practice, nor
does it take into account provincial, territorial or foreign tax considerations, which
considerations may differ significantly from those discussed herein.
Dividends
Dividends paid or credited or deemed to be paid or credited to a non-resident holder will generally
be subject to Canadian non-resident withholding tax at the rate of 25 per cent of the gross amount
of such dividends under the Tax Act. This rate may be reduced under an applicable income tax
treaty or convention between Canada and such non-resident holder’s country of residence. In the
case of a non-resident holder which is the beneficial owner of such dividends and a resident of the
United States entitled to the benefits of the Canada-U.S. Tax Treaty, the rate of Canadian
non-resident withholding tax in respect of dividends on the Underlying Common Shares will generally
be reduced to a rate of 15 per cent of the gross amount of such dividends (except that where such
beneficial owner is a corporation and owns at least 10 per cent of the voting stock of the Company,
the rate of withholding tax will be reduced to 5 per cent for dividends paid or credited).
Dispositions
A non-resident holder will not be subject to tax under the Tax Act in respect of capital gains
realized on the disposition or deemed disposition of the Underlying Common Shares unless such
securities are “taxable Canadian property” (for the purposes of the Tax Act) to the holder at the
time of the disposition and the non-resident holder is entitled to relief under an applicable
income tax treaty or convention between Canada and such non-resident holder’s country of residence.
The Underlying Common Shares will generally not constitute taxable Canadian property to a
non-resident holder provided such securities are listed on a prescribed stock exchange (which
currently includes the TSX) on the date of disposition and, at any time during the 60-month period
that ends at the time of the disposition or deemed disposition of the Underlying Common Shares, the
non-resident holder, persons with whom such holder did not deal at arm’s length or the non-resident
holder and together with all such persons has not owned 25 per cent or more of the issued shares of
any class or series of the capital stock of the Company. Notwithstanding the foregoing, in certain
circumstances set out in the Tax Act, the Underlying Common Shares could be deemed to be taxable
Canadian property.
Certain United States Federal Income Tax Considerations
This summary is of a general nature only and is not intended to be, and should not be construed to
be, legal or tax advice to any particular holder and no representation is made with respect to U.S.
federal income tax consequences to any particular holder. Accordingly, holders should consult
their own tax advisers with respect to the U.S. tax considerations relevant to them, having regard
to their particular circumstances.
In the opinion of Sullivan & Cromwell LLP, U.S. counsel to the Company, the following is a fair
summary of certain United States federal income tax consequences of the ownership of Underlying
Common Shares acquired pursuant to the
11
exercise of Warrants. This summary assumes that Underlying
Common Shares are held as capital assets for tax purposes. This summary does not take into account
the specific circumstances of any particular investors (such as tax-exempt entities, certain
insurance companies, broker-dealers, traders in securities that elect to mark to market, tax-exempt
organizations, regulated investment companies, investors liable for alternative minimum tax,
investors that actually or constructively own 10 per cent or more of the voting stock of the
Company, investors that hold Underlying Common Shares as part of a straddle or a hedging or
conversion transaction or investors whose functional currency is not the U.S. dollar), some of
which may be subject to special rules. This summary is based on the tax laws of the United States
(including the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history,
existing and proposed regulations thereunder, published rulings and court decisions), as in effect
on the date hereof, as well as the Canada-U.S. Tax Treaty, all of which are subject to change (or
changes in interpretation), possibly with retroactive effect.
For purposes of this discussion, a “U.S. Holder” is any beneficial owner of Underlying Common
Shares that is (i) a citizen or resident of the United States, (ii) a corporation organized under
the laws of the United States or any State, (iii) an estate the income of which is subject to
United States federal income tax without regard to its source or (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration of the trust and one
or more United States persons have the authority to control all substantial decisions of the trust. An “Eligible U.S.
Holder” is a U.S. Holder that (i) is a resident of the United States for purposes of the
Canada-U.S. Tax Treaty, (ii) does not maintain a permanent establishment or fixed base in Canada to
which Underlying Common Shares are attributable and through which the beneficial owner carries on
or has carried on business (or, in the case of an individual, performs or has performed independent
personal services) and (iii) is not otherwise ineligible for benefits under the Canada-U.S. Tax
Treaty with respect to income and gain derived in connection with the Underlying Common Shares.
You should consult your own tax advisor regarding the United States federal, state and local and
other tax consequences of owning and disposing of Underlying Common Shares in your particular
circumstances.
This discussion addresses only United States federal income taxation.
Taxation of Dividends
Under the United States federal income tax laws, and subject to the passive foreign investment
company, or PFIC, rules discussed below, if you are a U.S. Holder of Underlying Common Shares, the
gross amount of any dividend we pay out of our current or accumulated earnings and profits (as
determined for United States federal income tax purposes) is subject to United States federal
income taxation. If you are a noncorporate U.S. holder, dividends paid to you in
taxable years beginning before January 1, 2011 that constitute qualified dividend income will be
taxable to you at a maximum tax rate of 15% provided that you hold the Underlying Common Shares for
more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet
other holding period requirements. Dividends we pay with respect to the Underlying Common Shares
generally will be qualified dividend income.
You must include any Canadian tax withheld from the dividend payment in this gross amount even
though you do not in fact receive it. The dividend is taxable to you when you receive the
dividend, actually or constructively. The dividend will not be eligible for the
dividends-received deduction generally allowed to United States corporations in respect of
dividends received from other United States corporations. The amount of the dividend distribution
that you must include in your income as a U.S. holder will be the U.S. dollar value of the Canadian
dollar payments made, determined at the spot Canadian dollar /U.S. dollar rate on the date the
dividend distribution is includible in your income, regardless of whether the payment is in fact
converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange
fluctuations during the period from the date you include the dividend payment in income to the date
you convert the payment into U.S. dollars will be treated as ordinary income or loss and will not
be eligible for the special tax rate applicable to qualified dividend income. The gain or loss
generally will be income or loss from sources within the United States for foreign tax credit
limitation purposes. Distributions in excess of current and accumulated earnings and profits, as
determined for United States federal income tax purposes, will be treated as a non-taxable return
of capital to the extent of your basis in the Underlying Common Shares and thereafter as a capital
gain.
12
Subject to certain limitations and the provisions of the next paragraph, the Canadian tax withheld
and paid over to Canada will be creditable or deductible against the Eligible U.S. Holder’s United
States federal income tax liability. Special rules apply in determining the foreign tax credit
limitation with respect to dividends that are subject to the maximum 15% tax rate. Dividends will
be income from sources outside the United States, but dividends paid in taxable years beginning
before January 1, 2007 generally will be “passive” or “financial services” income, and dividends
paid in taxable years beginning after December 31, 2006 will, depending on your circumstances, be
“passive” or “general” income which, in either case, is treated separately from other types of
income for purposes of computing the foreign tax credit allowable to you.
It is possible that, on the date a dividend is paid, the Company will be at least 50 per cent owned
(measured by using either the total voting power or the total value of the stock) by United States
persons. Under Section 904(h) of the Code, dividends paid by a foreign corporation that is at least
50 per cent owned by United States persons may be treated as United States source income (rather
than foreign source income) for foreign tax credit purposes to the extent the foreign corporation
has more than an insignificant amount of United States source income. The effect of this rule may
be to treat a portion of the dividends paid by the Company as United States source income.
The rules relating to the determination of the foreign tax credit are complex and U.S. Holders
should consult with their own tax advisors to determine whether and to what extent a credit would
be available.
Taxation of Capital Gains
Subject to the PFIC rules discussed below, if you are a U.S. holder of Underlying Common Shares and
you sell or otherwise dispose of your Underlying Common Shares, you will recognize a capital gain
or loss for United States federal income tax purposes equal to the difference between the U.S.
dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, in your
Underlying Common Shares. A U.S. Holder’s basis in an Underlying Common Share acquired pursuant to
the exercise of a Warrant is equal to the sum of such Holder’s adjusted tax basis in the Warrant
and the price at which the Warrant was exercised. Capital gain of a noncorporate U.S. holder that
is recognized in taxable years beginning before January 1, 2011 is generally taxed at a maximum
rate of 15% where such Holder has a holding period greater than one year. A U.S. Holder’s holding
period in an Underlying Common Share acquired pursuant to the exercise of a Warrant begins when the
Underlying Common Share was acquired. The gain or loss will generally be income or loss from
sources within the United States for foreign tax credit limitation purposes.
PFIC Rules
We, Inco Limited, believe that the Underlying Common Shares should not be treated as stock of a
PFIC for United States federal income tax purposes, but this conclusion is a factual determination
that is made annually and thus may be subject to change. If we were to be treated as a PFIC,
unless a U.S. holder elects to be taxed annually on a mark-to-market basis with respect to the
Underlying Common Shares, any gain realized on the sale or other disposition of your Underlying
Common Shares would in general not be treated as a capital gain. Instead, if you are a U.S.
Holder, you would be treated as if you had realized such gain and certain “excess distributions”
ratably over your holding period for the Underlying Common Shares and would be taxed at the highest
tax rate in effect for each such year to which the gain was allocated, together with an interest
charge in respect of the tax attributable to each such year. With certain exceptions, your
Underlying Common Shares will be treated as stock in a PFIC if we were a PFIC at any time during
your holding period in your Underlying Common Shares. Dividends that you receive from us will not
be eligible for the special tax rates applicable to qualified dividend income if we are treated as
a PFIC with respect to you either in the taxable year of the distribution or the preceding taxable
year, but instead will be taxable at rates applicable to ordinary income.
Backup Withholding and Information Reporting
If you are a noncorporate U.S. holder, information reporting requirements on Internal Revenue
Service Form 1099 generally will apply to:
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• |
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dividend payments or other taxable distributions made to you within the
United States, and |
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• |
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the payment of proceeds to you from the sale of Underlying Common Shares
effected at a United States office of a broker. |
Additionally, backup withholding may apply to such payments if you are a noncorporate U.S. holder
that:
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• |
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fails to provide an accurate taxpayer identification number, |
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• |
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is notified by the Internal Revenue Service that you have failed to report
all interest and dividends required to be shown on your federal income tax returns, or |
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• |
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in certain circumstances, fails to comply with applicable certification
requirements. |
Payment of the proceeds from the sale of Underlying Common Shares effected at a foreign office of a
broker generally will not be subject to information reporting or backup withholding. However, a
sale of Underlying Common Shares that is effected at a foreign office of a broker will be subject
to information reporting and backup withholding if:
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• |
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the proceeds are transferred to an account maintained by you in the United
States, |
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• |
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the payment of proceeds or the confirmation of the sale is mailed to you
at a United States address, or |
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the sale has some other specified connection with the United States as
provided in U.S. Treasury regulations, |
unless the broker does not have actual knowledge or reason to know that you are a United States
person and the documentation requirements described above are met or you otherwise establish an
exemption.
In addition, a sale of Underlying Common Shares effected at a foreign office of a broker will be
subject to information reporting if the broker is:
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a United States person, |
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• |
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a controlled foreign corporation for United States tax purposes, |
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a foreign person 50% or more of whose gross income is effectively
connected with the conduct of a United States trade or business for a specified
three-year period, or |
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a foreign partnership, if at any time during its tax year: |
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one or more of its partners are “U.S. persons”, as defined in U.S.
Treasury regulations, who in the aggregate hold more than 50% of the income or
capital interest in the partnership, or |
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• |
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such foreign partnership is engaged in the conduct of a United
States trade or business, |
unless the broker does not have actual knowledge or reason to know that you are a United States
person and the documentation requirements described above are met or you otherwise establish an
exemption. Backup withholding will apply if the sale is subject to information reporting and the
broker has actual knowledge that you are a United States person.
You generally may obtain a refund of any amounts withheld under the backup withholding rules that
exceed your income tax liability by filing a refund claim with the United States Internal Revenue
Service.
RISK FACTORS
The risk factors contained in (i) the Company’s Annual Information Form for the year ended December
31, 2005, consisting of the Company’s 2005 10-K, and (ii) the Take-Over Bid Circular of the Company
dated October 25, 2005,
14
which are incorporated by reference herein, may affect the prospects of the
Company, and thereby also affect the value of the Underlying Common Shares. Investors should
carefully consider such risk factors as well as the other information contained and incorporated by
reference in this prospectus.
PLAN OF DISTRIBUTION
The Underlying Common Shares will be issued from time to time to holders of the Warrants upon the
exercise of the Warrants in accordance with their terms. The Company has filed a registration
statement on Form F-10 with the Securities and Exchange Commission registering the distribution of
up to 5,872,324 Underlying Common Shares and the associated rights thereto under the Shareholder
Rights Plan in the United States in accordance with the multijurisdictional disclosure system
adopted by the United States Securities and Exchange Commission and the provincial securities
regulators in Canada.
This amended and restated short form prospectus has not been filed in the Province of Ontario for
the purpose of qualifying, and will not qualify, any distribution of the Underlying Common Shares
in the Province of Ontario or elsewhere in Canada.
EXPERTS
The consolidated financial statements of the Company incorporated by reference to the Company’s
2005 10-K and its Takeover Bid Circular, as amended, and management’s assessment of the
effectiveness of internal control over financial reporting as of December 31, 2005 included in such
2005 10-K, have been audited by PricewaterhouseCoopers LLP (Toronto, Canada), independent
registered public accounting firm, as set forth in their report thereon, included therein, and
incorporated herein by reference. Such consolidated financial statements and management’s
assessment are incorporated herein by reference in reliance upon such reports, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Falconbridge incorporated by reference into this
prospectus by reference to the Company’s Takeover Bid Circular, as amended, which in turn
incorporate Falconbridge’s filings with the securities regulatory authority in each of the
provinces and territories of Canada have been so incorporated in reliance on the report of Ernst &
Young LLP (Toronto, Canada), independent registered public accounting firm, given on the authority
of said firm as experts in auditing and accounting.
The
consolidated financial statements and management’s assessment of
the effectiveness of internal control over financial reporting (which
is included in the Report of Management on Internal Control over
Financial Reporting) of Phelps Dodge incorporated in this prospectus by reference to the Company’s
Take-Over Bid Circular, as amended, which in turn incorporates Phelps
Dodge’s Annual Report on Form 10-K for the year ended
December 31, 2005,
have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP (Phoenix, Arizona), an independent
registered public accounting firm, given on the authority of said firm as experts in auditing and
accounting. With respect to the unaudited financial information of Phelps Dodge for the three-month periods ended March 31, 2006
and 2005 incorporated in this prospectus by reference to the
Company’s Take-Over Bid Circular,
as amended, which in turn incorporates Phelps Dodge’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006,
PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information.
However, their separate report dated April 26, 2006 incorporated by
reference herein, states that they did not audit and they do not
express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted
in light of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions
of Section 11 of the Securities Act of 1933 for their report on the
unaudited financial information because that report is not a
“report” or a “part” of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections
7 and 11 of the Act.
The statements as to the Company’s reserves incorporated into this prospectus by reference to the
Company’s 2005 10-K have been incorporated by reference herein upon the authority, as experts, of
Mr. S. Nicholas Sheard, Vice-President of Exploration, Dr. Olivier Tavchandjian, Principal
Geologist, Mineral Reserves and Mineral Resources and Dr. Lawrence B. Cochrane, who served as
Director of Mines Exploration until mid-June 2006, in each case to the extent described in the 2005
10-K.
AVAILABLE INFORMATION
Information has been incorporated by reference in this prospectus from documents filed with the
securities regulatory authority in each of the province and territories of Canada. Copies of
documents incorporated by reference in this prospectus regarding the Company may be obtained on
request without charge from the Secretary of the Company at Inco Limited, 145 King Street West,
Suite 1500, Toronto, Ontario, M5H 4B7 or by telephone at (416) 361-7511. For the purpose of the
Province of Quebec, this prospectus contains information to be completed by consulting the
permanent record, a copy of which permanent record may also be obtained from the Secretary of the Company at the
above-
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mentioned address and telephone number. Copies of documents incorporated by reference or
forming part of the permanent information record may also be obtained by accessing the website of
the Canadian securities regulatory authorities located at
www.sedar.com and the SEC website located
at www.edgar.gov.
Information
contained in or otherwise accessed through the Company’s
website, www.inco.com, or any
other website, does not form part of this prospectus. All references to the Company’s website, or
any other website, are inactive textual references only.
This prospectus constitutes part of a registration statement (the “Registration Statement”) filed
by the Company with the Commission under the Securities Act of 1933, as amended. As permitted by
the Rules and Regulations of the Commission, this prospectus does not contain all of the
information contained in the Registration Statement and the exhibits and schedules thereto and
reference is hereby made to the Registration Statement and the exhibits and schedules thereto and
further information with respect to the Company and the Underlying Common Shares offered hereby.
Statements contained herein concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not necessarily complete, and in
each instance reference is made to the copy of such document as so filed. Each statement is
qualified in its entirety by such reference.
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been filed with the Commission as part of the Registration Statement
of which this prospectus forms a part: the documents referred to under the heading “Documents
Incorporated by Reference”; consents of independent public accountants and counsel; and powers of
attorney.
No person has been authorized to give any information or make any representation other than those
contained in this prospectus in connection with any offer hereunder. If given or made, such
information or representations must not be relied upon as having been authorized by the Company.
This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any of
the securities offered hereunder in any jurisdiction to any person to whom it is unlawful to make
such an offer or solicitation in such jurisdiction. Neither the delivery of this prospectus nor
any sale made hereunder shall under any circumstances imply that the information herein or therein
is correct as of any time subsequent to the date hereof.
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