exv10w1



 



EXHIBIT 10.1



Inco Limited



Non-Employee Director Share Ownership Plan

(as amended and restated effective as of February 3, 2004)



WHEREAS:




	 	A.	 	In 1995, the Board of Directors of Inco Limited (the
“Company”) adopted a share ownership plan for the Company’s
non-employee directors (the “Original Plan”) in order to align the
interests of the Company’s non-employee directors more closely with
the interests of the Company’s shareholders;
	 
	 	B.	 	In 1998, the Original Plan was superseded by the 1998
Non-Employee Director Share Ownership Plan (as amended and restated
from time to time, the “Plan”);
	 
	 	C.	 	The Plan provides that the Board has the authority to make
annual awards of Common Shares (or, at the non-employee director’s
option, deferred share units) to each of the Company’s non-employee
directors as part of their total compensation package;
	 
	 	D.	 	In addition, the Plan provides that the Company’s
non-employee directors may elect to receive, in the form of Common
Shares, deferred share units or cash, all or part of the
compensation ordinarily payable to them in cash;
	 
	 	E.	 	The Board of Directors wishes to amend and restate the Plan
in order to, among other matters, vest the Board with greater
flexibility with respect to the timing and form of the awards which
may be made under the Plan and to change the redemption features of
the deferred share units so that they shall be redeemable on up to
two redemption dates selected by the relevant non-employee director,
which redemption dates shall be during the one year period following
the date on which such non-employee director has ceased to be a
director of the Company; and
	 
	 	F.	 	The Plan, as amended and restated hereby, and as it may be
further amended and restated from time to time, shall be referred to
as the “Non-Employee Director Share Ownership Plan”.
	 
	 	 	 	NOW THEREFORE,



Section 1     Interpretation




	1.1	 	Purposes



     The purposes of the Plan are:



	 	(a)	 	to facilitate share ownership and holdings of deferred share
units by the Company’s non-employee directors and thereby align
their interests more closely with those of the Company’s
shareholders; and



 






 







	 	(b)	 	to provide a financial incentive that will help the Company
to attract and retain highly qualified individuals to serve as
non-employee directors of the Company.




	1.2	 	Definitions



     Wherever used in the Plan, unless otherwise defined, the following terms
shall have the meanings set forth below:



	 	(a)	 	“Affiliate” means an affiliate of the Company, as the term
“affiliate” is defined in paragraph 8 of the Canada Customs and
Revenue Agency’s interpretation bulletin IT-337R3, Retiring
Allowances;
	 
	 	(b)	 	“Aggregate Purchase Price” has the meaning set forth in
Section 3.3;
	 
	 	(c)	 	“Award” has the meaning set forth in Section 3.1;
	 
	 	(d)	 	“Average Cost Per Share” has the meaning set forth in Section
3.3;
	 
	 	(e)	 	“Beneficiary” has the meaning set forth in Section 2.5;
	 
	 	(f)	 	“Board” or “Board of Directors” means those individuals who
serve from time to time as the Board of Directors of the Company;
	 
	 	(g)	 	“Board Committee” means a committee of the Board of Directors
of the Company, including, without limitation, the Audit Committee,
the Corporate Governance and Nominating Committee, the Management
Resources and Compensation Committee, the Pension Committee and the
Environment, Health and Safety Committee;
	 
	 	(h)	 	“Broker” means Royal Trust Corporation of Canada, RBC Capital
Markets or such other trust company or securities dealer as may be
designated from time to time by the Committee;
	 
	 	(i)	 	“Business Day” means a day on which banks are open for
business in Toronto, Ontario and New York, New York;
	 
	 	(j)	 	“Cash Compensation” means all cash amounts payable to a
Non-Employee Director by the Company in respect of the services
provided by the Non-Employee Director to the Company in a calendar
year, including, without limitation, (i) the annual retainer fee for
serving as a Non-Employee Director, (ii) the annual retainer fee for
serving as a member of a Board Committee, (iii) the annual retainer
fee for chairing the Board or a Board Committee, and (iv) the fees
for attending meetings of the Board or a Board Committee, but, for
greater certainty, shall not include either (a) amounts received as
a reimbursement for expenses incurred in attending meetings of the
Board or a Board Committee or (b) any Award;



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	 	(k)	 	“Committee” means the Corporate Governance and Nominating
Committee of the Board or any successor thereof;
	 
	 	(l)	 	“Common Share” means a Common Share of the Company;
	 
	 	(m)	 	“Company” means Inco Limited, a corporation organized under
the federal laws of Canada, including any successor to all or
substantially all of its business by merger, consolidation,
amalgamation, purchase of assets or otherwise;
	 
	 	(n)	 	“Deferred Share Unit” means a unit credited by the Company to
a Non-Employee Director by way of a bookkeeping entry in the books
of the Company, the value of which at any particular date shall be
the Fair Market Value at that date;
	 
	 	(o)	 	“DSU Account” has the meaning set forth in Section 2.2;
	 
	 	(p)	 	“Election Form” means a document substantially in the form
attached as Schedule “A” hereto, as such form may be amended or
revised from time to time;
	 
	 	(q)	 	“Fair Market Value” means, with respect to any particular
date, the mean between the high and low sales prices of the Common
Shares reported for such date on the Toronto Stock Exchange or the
New York Stock Exchange, as elected by a Non-Employee Director
pursuant to his or her then applicable Election Form, or on such
other stock exchange on which the Common Shares are then listed and
posted for trading (or, if such exchange is not open for trading on
such date, then the immediately preceding date on which such
exchange is open for trading), or, if the Common Shares are not
listed on any stock exchange, then on the over-the-counter market or
such other market in which prices are regularly quoted for the
Common Shares, or if there has been no published bid or asked
quotations with respect to the Common Shares, the value established
by the Committee in good faith;
	 
	 	(r)	 	“Non-Employee Director” means a member of the Board of
Directors who is not an employee of the Company or any Affiliate of
the Company;
	 
	 	(s)	 	“Plan” means this Non-Employee Director Share Ownership Plan,
as amended and restated from time to time;
	 
	 	(t)	 	“Quarter” means a fiscal quarter of the Company which, until
changed by the Company, shall be the three-month periods ending
March 31, June 30, September 30 and December 31 in any calendar
year;
	 
	 	(u)	 	“Redemption Amount” has the meaning set forth in Section 5.2;
	 
	 	(v)	 	“Redemption Date” has the meaning set forth in Section 5.1;
	 
	 	(w)	 	“Redemption Notice” has the meaning set forth in Section 5.1;



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	 	(x)	 	“Termination Date” means, with respect to a Non-Employee
Director, the date upon which such Non-Employee Director ceases to
be a member of the Board for any reason whatsoever; and
	 
	 	(y)	 	“Termination Value” means the average of the Fair Market
Values of the Common Shares on the exchange elected by the
Non-Employee Director on his or her Election Form for the five
trading days immediately preceding the relevant Redemption Date.




	1.3	 	Effective Date and Transition



     The Plan, as amended and restated hereby, shall be effective as of
February 3, 2004, provided that, any and all outstanding Share Units (as
defined in the 1998 Non-Employee Director Share Ownership Plan) shall continue
as outstanding Deferred Share Units under the Plan, as amended and restated
hereby.



	1.4	 	Eligibility



     Each Non-Employee Director shall be eligible to participate in the Plan.



	1.5	 	Construction



     All references in the Plan to the masculine shall also include the
feminine and all references to the singular shall also include the plural and
vice versa, as the context shall require. If any provision of the Plan is
determined to be illegal or invalid for any reason, in whole or in part, such
illegality or invalidity shall not affect the remaining parts of the Plan and
the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included. Headings wherever used herein are for reference
purposes only and do not limit or extend the meaning of the provisions
contained herein. A reference to a “Section” means a section of the Plan,
unless expressly stated otherwise.



	1.6	 	Governing Law



     The Plan shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.


Section 2     Administration of the Plan




	2.1	 	Administration



     Subject to the Company’s Articles and By-laws or any resolutions of the
Board, the Committee shall have the power to (i) construe, interpret and
administer the Plan and any agreement or instrument entered into under the
Plan, (ii) establish, amend and rescind any rules and regulations relating to
the Plan, (iii) make any other determinations that the Committee deems
necessary or desirable for the administration of the Plan, and (iv) delegate to
other persons any duties and responsibilities relating to the administration of
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency or ambiguity in the


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Plan in the manner and to the extent the Committee deems, in its sole and
absolute discretion, necessary or desirable. No member of the Committee shall
be liable for any action or determination made in good faith. Any decision of
the Committee with respect to the administration and interpretation of the Plan
shall be binding and conclusive for all purposes and on all persons, including
the Company, all Non-Employee Directors and any other person claiming an
entitlement or benefit through any Non-Employee Director. All expenses of
administration of the Plan shall be borne by the Company, including any
reasonable brokerage fees relating to the purchase of Common Shares under the
Plan.



	2.2	 	DSU Accounts



     The Company shall maintain in its books and records an account for each
Non-Employee Director (a “DSU Account”) recording at all times the number of
Deferred Share Units credited to a Non-Employee Director. Upon payment in
satisfaction of Deferred Share Units credited to a Non-Employee Director in the
manner described herein, such Deferred Share Units shall be cancelled. After
the end of each Quarter, the Company shall provide each Non-Employee Director
with a written statement showing the balance in such Non-Employee Director’s
DSU Account as at the end of the applicable Quarter.



	2.3	 	Credit for Dividends on Deferred Share Units



     When cash dividends are paid on the Common Shares, a Non-Employee
Director’s DSU Account shall be credited with dividend equivalents in the form
of additional Deferred Share Units. Such dividend equivalents shall be
credited on the dividend payment date and shall be computed by dividing (a) the
amount obtained by multiplying the amount of the dividend declared and paid per
Common Share by the number of Deferred Share Units credited to the Non-Employee
Director’s DSU Account on the record date for the payment of such dividend, by
(b) the Fair Market Value of the Common Shares on the dividend payment date for
such dividend, with fractions of Deferred Share Units so credited computed to
four decimal points rounded down.



	2.4	 	Share Adjustments and Reorganizations



     If (a) there is any stock split, stock consolidation, reclassification,
recapitalization or similar event affecting the Common Shares, (b) the Common
Shares are exchanged in connection with a reorganization, including any merger,
amalgamation, statutory arrangement, consolidation of the Company or similar
event, or a sale by the Company of all or a part of its assets, for a different
number or class of shares or other securities of the Company or for shares or
other securities of any other corporation, (c) new, different or additional
shares or other securities of the Company or of another company are received by
holders of the Common Shares, or (d) any distribution is made to the holders of
the Common Shares (other than a cash dividend), then the Committee shall
recommend such adjustments to the Deferred Share Units credited to the
Non-Employee Directors under the Plan as the Committee deems appropriate in its
sole discretion, provided that, such adjustments shall not take effect until
approved by the Board of Directors. Except as provided above, the issuance by
the Company of any shares of the Company, or any rights, warrants, options or
other securities convertible into or exchangeable for


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any shares of the Company, shall not affect the number of Deferred Share Units
credited pursuant to the terms of the Plan.



	2.5	 	Designation of Beneficiary



     Upon his or her election or appointment to the Board, subject to
applicable law, each Non-Employee Director shall designate an individual as his
or her beneficiary to receive any benefits that are payable under the Plan upon
the death of such Non-Employee Director (the “Beneficiary”). The Non-Employee
Director may, subject to applicable laws, change his or her Beneficiary at any
time or from time to time. Where no Beneficiary has been validly designated by
the Non-Employee Director, or the Beneficiary does not survive the Non-Employee
Director, the Non-Employee Director’s legal representative shall be his or her
Beneficiary. In the event of a Non-Employee Director’s death, the Beneficiary
shall be entitled to exercise the rights of, and receive the benefits payable
to, the Non-Employee Director under Section 5.


Section 3    Awards




	3.1	 	Awards of Common Shares or Deferred Share Units



     The Committee may from time to time make awards of Common Shares or
Deferred Share Units to the Non-Employee Directors in consideration of their
service on the Board or a Board Committee, or as chair of a Board Committee, or
as the Lead Director of the Board, or as the Chair of the Board, in such amount
or amounts as the Committee deems appropriate (collectively, the “Awards”).
Where an Award is made in respect of a Non-Employee Director’s annual service
during a fiscal year, unless otherwise provided by the Committee, the Award
shall be payable on a Quarterly basis, on the last Business Day of each Quarter
of that fiscal year, and the amount of the Award shall be pro rated to reflect
the actual number of whole months that the Non-Employee Director has served on
the Board during such period. The Committee may provide that the Award shall
be payable (a) entirely in the form of Deferred Share Units, or (b) in the form
of either Common Shares or Deferred Share Units (at the election of the
Non-Employee Director and generally in accordance with Section 3.2). In lieu
of any fractional Common Share, the Company shall pay the Fair Market Value of
such fractional Common Share. Any fractional Deferred Share Unit shall be
calculated to four decimal points rounded down. The Awards may be subject to
such conditions as may be imposed by the Committee at the time of the Award.



	3.2	 	Form of Election



     Where the Committee has provided that an Award shall be payable in the
form of either Common Shares or Deferred Share Units at the election of the
Non-Employee Director, then such Award shall be payable to the Non-Employee
Director in accordance with the elections set forth in his or her then
applicable Election Form. Each Non-Employee Director shall, within 30 days
following his or her first election or appointment to the Board in respect of
Awards payable during the remainder of such calendar year, and thereafter by
December 1st in respect of Awards payable during the next following calendar
year, complete, sign and deliver an Election Form to the Secretary of the
Company indicating his or her election for such applicable calendar


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year. If no timely election has been made,
then the Non-Employee Director shall be deemed to have elected to receive his
or her Award in the form of Deferred Share Units for the applicable
period. Notwithstanding the foregoing, an election made pursuant to any predecessor
provision shall remain effective until it is changed by the completion,
signature and delivery to the Secretary of the Company of a new Election Form,
in accordance with the terms of the Plan.



	3.3	 	Purchase and Delivery of Common Shares



     Where a Non-Employee Director has elected to receive an Award in the form
of Common Shares, the Committee shall instruct the Broker to purchase the
required number of Common Shares, having regard for any applicable
withholdings, on the open market on the last Business Day of the applicable
Quarter. The Broker shall purchase such Common Shares and shall notify the
Committee of (a) the aggregate purchase price of the Common Shares (the
“Aggregate Purchase Price”), (b) the purchase price per share or, if the shares
were purchased at different prices, the average purchase price (computed on a
weighted average basis) per share (the “Average Cost Per Share”), (c) the
amount of any related brokerage commissions, and (d) the settlement date for
the purchase of the Common Shares. On the settlement date, the Company shall
pay the Broker the Aggregate Purchase Price and the related brokerage
commissions. The Common Shares shall as soon as practical after such purchase
then be delivered to the Non-Employee Director. The Non-Employee
Director shall indicate on his or her applicable Election Form (a) whether
such Common Shares shall be purchased on the Toronto Stock Exchange or the New
York Stock Exchange, and (b) the brokerage account to which such Common Shares
shall be delivered.



	3.4	 	Credit to DSU Account



     Where an Award consists of Deferred Share Units, or the Non-Employee
Director has elected to receive an Award in the form of Deferred Share Units,
the Company shall credit the relevant Non-Employee Director’s DSU Account with
the number of Deferred Share Units payable to such Non-Employee Director
pursuant to the Award, as of the last Business Day of the applicable Quarter or
such other date as may be specified by the Committee. Such Deferred Share
Units shall be fully vested upon being credited to the Non-Employee Director’s
DSU Account and the Non-Employee Director’s entitlement to the redemption of
such Deferred Share Units shall not be subject to the satisfaction of any
requirements as to any minimum period of membership on the Board.



	3.5	 	Awards for 2004



     The Committee has made the following Awards for service on the Board in
2004:



	 	(a)	 	a base Award of 1,100 Common Shares or Deferred Share Units
(at the election of the Non-Employee Director);
	 
	 	(b)	 	where the Non-Employee Director serves on more than two Board
Committees, an additional Award of 200 Common Shares or Deferred
Share Units (at the election of the Non-Employee Director);



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	 	(c)	 	where the Non-Employee Director serves as Chair of a Board
Committee other than the Audit Committee, an additional Award of 200
Common Shares or Deferred Share Units (at the election of the
Non-Employee Director);
	 
	 	(d)	 	where the Non-Employee Director serves as Chair of the Audit
Committee of the Board, an additional Award of 500 Common Shares or
Deferred Share Units (at the election of the Non-Employee Director);
and
	 
	 	(e)	 	where the Non-Employee Director serves as the Lead Director
of the Board, an additional Award of Common Shares or Deferred Share
Units having a value of U.S.$15,000;



provided that, such Awards shall have been paid on the first Business Day of
2004, and provided further, that, the two Non-Employee Directors who are
scheduled to retire in April 2004 in accordance with the Board’s retirement
policy shall have received pro rated awards based on service for four months
during 2004 (i.e., January to April 2004). Such Awards shall also be made to
any Non-Employee Director who is elected or appointed to the Board in 2004,
provided that such Awards shall be pro rated to reflect the number of whole
months from the date of his or her election or appointment to the Board to the
last day of 2004.


     In addition, in lieu of the Common Share options that the Non-Employee
Directors would otherwise have received pursuant to the Company’s 2002
Non-Employee Director Share Option Plan (which has been suspended by the
Board), each of the Non-Employee Directors serving on the Board on April 22,
2004 (being the day following the Company’s 2004 Annual and Special Meeting of
Shareholders) shall receive an Award of 1,500 Deferred Share Units (the
“Replacement DSUs”). The Replacement DSUs shall vest on the earlier of (a) one
year following the date of the Award of the Replacement DSUs, or (b) the date
of the Company’s 2005 Annual Meeting of Shareholders, provided that, the
relevant Non-Employee Director is still serving on the Board of Directors at
such time. Each additional Non-Employee Director who may be appointed to the
Board prior to the Company’s 2005 Annual Meeting of Shareholders shall also
receive an Award of Replacement DSUs, as at the date of his or her appointment
to the Board, provided that, such Award shall be pro rated to reflect the
number of whole months remaining in the term of such Non-Employee Director
through such Annual Meeting, treating service during the month in which the
Annual Meeting is held as service for a whole month.


Section 4     Election Regarding Form of Payment of Cash Compensation




	4.1	 	Form of Election



     Each Non-Employee Director may elect to receive up to 100% of his or her
Cash Compensation in the form of Common Shares or Deferred Share Units, subject
to the restrictions set forth in Section 4.2 and subject to such rules,
regulations, approvals and conditions as the Committee may impose. Such
election may be made only in increments of 0%, 25%, 50% or 100% of all Cash
Compensation. Each Non-Employee Director shall, within 30 days following his
or her first election or appointment to the Board in respect of Cash
Compensation payable


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during the remainder of such calendar year, and thereafter by December 1st in
respect of Cash Compensation payable during the next succeeding calendar year,
complete, sign and deliver an Election Form to the Secretary of the Company
indicating his or her election. If
no timely election has been made, then the Non-Employee Director shall be
deemed to have elected to receive all of his or her Cash Compensation in the
form of cash (subject to the restrictions set forth in
Section 4.2). Notwithstanding the foregoing, an election made pursuant to any predecessor provision shall remain effective until it is
changed by the completion, signature and delivery to the Secretary of the
Company of a new Election Form, in accordance with the terms of the Plan.



	4.2	 	Restrictions on Election Where Minimum Share Ownership Requirements Have
Not Been Met



     Until such time as a Non-Employee Director owns beneficially the greater
of (a) 7,500 Common Shares or Deferred Share Units, or (b) Common Shares and/or
Deferred Share Units having a Fair Market Value of U.S.$180,000 or the
equivalent in Canadian dollars, or such other minimum share ownership
requirements as may be established by the Board of Directors from time to time,
a Non-Employee Director shall be required to elect to receive at least 25% of
such Non-Employee Director’s Cash Compensation in the form of Common Shares or
Deferred Share Units.



	4.3	 	Time of Payment



     Subject to the terms and conditions of the Plan, a Non-Employee Director’s
Cash Compensation (including any amounts payable in cash or, pursuant to an
election made pursuant to this Plan, in Common Shares or Deferred Share Units)
shall be paid on a Quarterly basis, as of the last Business Day of each
Quarter.



	4.4	 	Purchase and Delivery of Common Shares



     Where a Non-Employee Director has elected to receive all or a portion of
his or her Cash Compensation in the form of Common Shares, the Committee shall
instruct the Broker to purchase Common Shares on the open market on the last
Business Day of the relevant Quarter having an aggregate value equal to the
aggregate amount of the Cash Compensation payable to such Non-Employee Director
(less any applicable withholdings). The Broker shall purchase such Common
Shares and shall notify the Committee of (a) the Aggregate Purchase Price, (b)
the purchase price per share or, if the shares were purchased at different
prices, the Average Cost Per Share, (c) the amount of any related brokerage
commissions, and (d) the settlement date for the purchase of the Common Shares.
On the settlement date, the Company shall pay to the Broker the Aggregate
Purchase Price and the related brokerage commissions. The Common Shares shall
be delivered to the Non-Employee Director as soon as practical after such
purchase. The Non-Employee Director
shall indicate on his or her Election Form (a) whether such Common Shares shall be purchased on the Toronto
Stock Exchange or the New York Stock Exchange, and (b) the brokerage account to
which such Common Shares shall be delivered. An amount that would otherwise
give rise to a fractional Common Share shall be paid by the Company in cash.


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	4.5	 	Credit to DSU Account



     Where a Non-Employee Director has elected to receive all or a portion of
his or her Cash Compensation in the form of Deferred Share Units, the Company
shall credit such Non-Employee Director’s DSU Account in respect of such
Deferred Share Units. The number of Deferred Share Units to be credited shall
be determined by dividing the amount of the Non-Employee Director’s Cash
Compensation to be satisfied by Deferred Share Units by the Fair Market Value
on the last Business Day of the applicable Quarter. The Deferred Share Units
shall be fully vested upon being credited to the Non-Employee Director’s DSU
Account and the Non-Employee Director’s entitlement to the redemption of such
Deferred Share shall not be subject to the satisfaction of any requirements as
to any minimum period of membership on the Board. Any fractional Deferred
Share Unit shall be calculated to four decimal points rounded down.


Section 5     Redemption of DSUs




	5.1	 	Redemption of Deferred Share Units



     Except as otherwise provided in this Section 5, on or after his or her
Termination Date, a Non-Employee Director will be entitled to redeem all (or
some if such Non-Employee Director wishes to deliver more than one Redemption
Notice as provided below) of the Deferred Share Units credited to his or her
DSU Account by filing a written notice of redemption (the “Redemption Notice”)
with the Secretary of the Company, specifying a redemption date (the
“Redemption Date”) which shall be no earlier than five Business Days following
the delivery of the Redemption Notice and no later than one year following such
Termination Date. Each Non-Employee Director shall be entitled to deliver up
to two Redemption Notices, provided that, the second Redemption Notice shall
cover all of the Deferred Share Units remaining in the Non-Employee Director’s
DSU Account. If a Non-Employee Director has not filed a Redemption Notice
providing for the redemption of all of the Deferred Share Units remaining in
such Non-Employee Director’s DSU Account by the date which is one year
following such Non-Employee Director’s Termination Date, then the Redemption
Date for such remaining Deferred Share Units shall be the date which is one
year following such Non-Employee Director’s Termination Date.



	5.2	 	Redemption Amount



     In respect of any given redemption of Deferred Share Units, the Company
shall pay to the relevant Non-Employee Director on the Redemption Date the
amount (the “Redemption Amount”) which shall be obtained by multiplying (a) the
number of Deferred Share Units to be redeemed by (b) the Termination Value of
the Common Shares, by cheque, less any applicable withholding or similar taxes,
and shall be fully discharged in so doing and such Deferred Share Units shall,
as provided for in Section 2.2, be cancelled.


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	5.3	 	Extended Redemption Date Where Dividends Declared



     Notwithstanding Section 5.1, in the event that the Redemption Date falls
between the record date for a dividend on the Common Shares and the related
dividend payment date, then the Redemption Date shall be the day immediately
following the date of payment of such dividend, provided, however, that in no
event will the Redemption Date for all of the Deferred Share Units be later
than the last day of the calendar year commencing immediately after the
relevant Non-Employee Director’s Termination Date.



	5.4	 	Postponed Redemption Date Where Material Non-Public Information



     Notwithstanding Section 5.1, if, in the opinion of the Committee, a
Non-Employee Director or his or her Beneficiary, as the case may be, is in
possession of material non-public information regarding the Company on the
Redemption Date selected by such Non-Employee Director, then such Redemption
Date shall be postponed until the earlier of (a) the date on which, in the
opinion of the Committee, such individual ceases to be in possession of
material non-public information regarding the Company, and (b) December 31 of
the calendar year commencing immediately after the Non-Employee Director’s
Termination Date.


Section 6     General




	6.1	 	Unfunded Plan



     Unless otherwise determined by the Committee, the Plan shall be unfunded.
To the extent any individual holds any rights by virtue of an election under
the Plan, such rights (unless otherwise determined by the Committee) shall be
no greater than the rights of an unsecured general creditor of the Company.



	6.2	 	Successors and Assigns



     The Plan shall be binding on the Company and its successors and assigns
and each Non-Employee Director and his or her heirs and legal representatives
and on any receiver or trustee in bankruptcy or representative of creditors of
the Company or Non-Employee Director, as the case may be.



	6.3	 	Amendment of the Plan



     The Board may amend the Plan as it deems necessary or appropriate, but no
such amendment shall, without the consent of the Non-Employee Director or
unless required by law, adversely affect the rights of a Non-Employee Director
with respect to Deferred Share Units to which the Non-Employee Director is then
entitled under the Plan. Notwithstanding the foregoing, any amendment of the
Plan shall be such that the Deferred Share Unit provisions of the Plan
continuously meet the requirements of paragraph 6801(d) of the regulations
under the Income Tax Act (Canada) or any successor to such regulation.


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	6.4	 	Termination of the Plan



     The Board may terminate the Plan at any time, but no such termination
shall, without the consent of the Non-Employee Director or unless required by
law, adversely affect the rights of a Non-Employee Director with respect to
Deferred Share Units to which the Non-Employee Director is then entitled under
the Plan. Notwithstanding the foregoing, any termination of the Plan shall be
such that the Deferred Share Unit provisions of the Plan continuously meet the
requirements of paragraph 6801(d) of the regulations under the Income Tax Act
(Canada) or any successor to such regulation.


     If the Board terminates the Plan, no additional Common Shares or new
Deferred Share Units will be credited to the account of a Non-Employee Director
after the effective date of such termination, but previously credited Deferred
Share Units shall remain outstanding, be entitled to dividend equivalents as
provided under the Plan, and be paid in accordance with the terms and
conditions of the Plan existing at the time of termination. The Plan will
finally terminate for all purposes when the last remaining Non-Employee
Director receives payment of all Deferred Share Units which have been credited
to his or her DSU Account.



	6.5	 	Applicable Trading Policies



     The Committee and each Non-Employee Director will ensure that all actions
taken and decisions made by the Committee or the Non-Employee Director, as the
case may be, pursuant to the Plan comply with all applicable laws, including
securities and income tax laws, and all applicable policies, guidelines or
similar requirements of the Company relating to insider trading, “black out”
periods, insider disclosure, conflicts of interest, business and ethical
conduct.



	6.6	 	Limitations on Rights of Non-Employee Directors




	 	(a)	 	Except as specifically set out in the Plan, no Non-Employee
Director or any other person shall have any claim or right to any
cash or other benefit in respect of Deferred Share Units credited
pursuant to the Plan.
	 
	 	(b)	 	Any and all of the rights of the of the Non-Employee
Directors respecting Deferred Share Units or other benefits under
the Plan shall not be transferable or assignable other than by will
or the laws of descent and distribution, nor shall they be pledged,
encumbered or charged, and any attempt to do so shall be void.
	 
	 	(c)	 	Neither the Plan nor any Award thereunder shall be construed
as conferring upon a Non-Employee Director a right to be retained as
a member of the Board or a claim or right to any future Awards or
other benefits under the Plan.
	 
	 	(d)	 	Under no circumstances shall Deferred Share Units be
considered Common Shares nor shall they entitle any Non-Employee
Director or other person to exercise any voting rights or any other
rights attaching to the ownership of Common Shares, nor shall any
Non-Employee Director or other person be considered the owner of
Common Shares by virtue of this Plan until after the date



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	 	 	 	of the purchase of such Common Shares on the open market pursuant
to the terms of the Plan.
	 
	 	(e)	 	Any liability of the Company to any Non-Employee Director
with respect to receipt of Common Shares, Deferred Share Units or an
Award shall be based solely upon contractual obligations created by
the Plan. Neither the Committee nor the Board shall be liable for
any actions taken in accordance with the terms of the Plan.




	6.7	 	Compliance with Law



     The obligations of the Company with respect to the making of Awards and
the delivery of Common Shares and/or Deferred Share Units pursuant to the terms
of the Plan are subject to compliance with all applicable laws and regulations
and stock exchange rules. In connection with the Plan, each Non-Employee
Director shall comply with all applicable laws and regulations and stock
exchange rules and shall furnish the Company with any and all information and
undertakings as may be required to ensure compliance therewith.



	6.8	 	Applicable Taxes and Deductions



     The Company shall be authorized to deduct from any amount paid or credited
hereunder such taxes and other amounts as may be required by applicable law or
regulation in such manner as it determines appropriate.


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SCHEDULE “A”



INCO LIMITED



	 	 	 
	TO:	 	
Non-Employee Directors
	 	 	 
	RE:	 	
Annual Election Form pursuant to the Company’s Non-Employee Director Share
Ownership Plan (the “Plan”)








In accordance with the terms of the Plan, you are required to make annual
elections with respect to the manner in which you wish to receive (a) the Cash
Compensation payable to you for your service on the Board, and (b) any Awards
which are payable in the form of either Common Shares or Deferred Share Units,
at the election of the Non-Employee Director. These elections are set forth in
Items I and II below. This Election Form also provides an opportunity for you
to designate, if you have elected to receive any Common Shares under the Plan,
whether such Common Shares should be purchased on the Toronto Stock Exchange
(the “TSX”) or the New York Stock Exchange (the “NYSE”), and the brokerage
account to which such Common Shares should be delivered. Finally, the Election
Form provides you with the opportunity to designate whether the price of any
Deferred Share Units deliverable to you under the Plan should be determined
based on the trading price of the Common Shares on the TSX or the NYSE.


PLEASE RETURN THIS FORM TO STUART F. FEINER IN THE ENCLOSED ENVELOPE BY NO
LATER THAN DECEMBER 1, [2004]. IN ORDER TO PROTECT THE TAX DEFERRED STATUS OF
ANY DEFERRED SHARE UNITS TO WHICH YOU MAY BE ENTITLED UNDER THE PLAN, YOUR
ELECTION FORM MUST BE RECEIVED BY NO LATER THAN DECEMBER 1, [2004].


By signing below, you acknowledge that you have read, and agree to abide by,
the terms of the Plan. All capitalized terms not otherwise defined in this
Election Form shall have the respective meanings ascribed to them under the
Plan. The following elections and designations will apply with respect to
compensation payable to you under the Plan in fiscal [2005].



	I.	 	Election Regarding Payment of Cash Compensation.
	 
	 	 	Required Minimum Election. You are required to elect, until the total
number of Common Shares and/or Deferred Share Units you own exceeds the
greater of (a) 7,500 and (2) U.S.$180,000, or the equivalent in Canadian
dollars, based upon the then fair market value of such total number of
Common Shares and Deferred Share Units owned, to receive at least
25% of
the Cash Compensation you are to be paid as a Director in
the form of either Common Shares or Deferred Share Units. Once these Director ownership
guidelines have been met, there is no longer any mandatory minimum
election to be made for your Cash Compensation.
	 
	 	 	Percentage Election. Subject to the Required Minimum Election referred
to above, you can elect to receive 0%, 25%, 50% or 100% of your Cash
Compensation in the form of either Common Shares or Deferred Share Units, with the
balance, depending upon the election made, to be received in cash.



 






 







	 	 	Accordingly, please check one of the following seven elections:




	 	 	 	 	 	 
	 	1.	 	o	 	All in Cash (can only be selected assuming
you have already met the Director ownership guidelines
summarized above)
	 
	 	2.	 	o	 	25% in Common Shares and 75% in Cash
	 
	 	3.	 	o	 	50% in Common Shares and 50% in Cash,
	 
	 	4.	 	o	 	100% in Common Shares
	 
	 	5.	 	o	 	25% in Deferred Share Units and 75% in Cash
	 
	 	6.	 	o	 	50% in Deferred Share Units and 50% in Cash
	 
	 	7.	 	o	 	100% in Deferred Share Units




	II.	 	Election Regarding Payment of Awards Payable in the Form of Either Common
Shares or Deferred Share Units. From time to time, the Board may make
Awards which are payable in the form of either Common Shares or Deferred
Share Units, at the election of the relevant Non-Employee Director. You
are entitled to elect whether you will take these Awards either all in
Common Shares or all in Deferred Share Units. Please indicate your choice
by checking the appropriate box below.




	 	 	 	 	 	 
	 	A.
	 	o	 	All in Common Shares
	 
	 	B.
	 	o	 	All in Deferred Share Units




	III.	 	Designation of Stock Exchange and Brokerage Account Re: Delivery of
Common Shares. If you have elected to receive Common Shares pursuant to
Item 1 or II above, then please indicate by checking the appropriate box
below your choice as to the stock exchange to be used for the purchase of
any Common Shares to be delivered to you under the Plan.




	 	 	 	 	 	 
	 	A.	 	o	 	TSX
	 
	 	B.
	 	o	 	NYSE




	 	 	In addition, please designate below the financial institution and account
number to which such Common Shares shall be delivered, and the name,
address and telephone number of any relevant broker or financial adviser.




	 	 	 
	Financial Institution:	 	 


	 	 	 
	Account:	 	 


	 	 	 
	Name of Contact:	 	 


	 	 	 
	Address:	 	 


	 	 	 
	 	 	 


	 	 	 
	 	 	 


	 	 	 
	Telephone:	 	 





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	IV.	 	Designation of Stock Exchange Reference Price for Deferred Share Units.
Please indicate by checking the appropriate box in below your choice of
the stock exchange to be used for the determination of the value of any
Deferred Share Units to be credited to you under the Plan.




	 	 	 	 	 	 
	 	A.	 	o	 	TSX
	 
	 	B.
	 	o	 	NYSE




	 	 	 
	 
	 
	

Name of Non-Employee Director	 	 
	 	 	 
	 
	 
	

Signature	 	


Date




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