Use these links to rapidly review the document
TABLE OF CONTENTS
TABLE OF CONTENTS
CALCULATION OF REGISTRATION FEE
|
||||||||
| Title of Each Class of Securities to be Registered |
Amount to be Registered |
Proposed Maximum Offering Price Per Share(1) |
Proposed Maximum Aggregate Offering Price(1) |
Amount of Registration Fee |
||||
|---|---|---|---|---|---|---|---|---|
Common Stock, par value $0.001 per share |
23,824,050 | $4.70 | $111,973,035.00 | $14,422.13 | ||||
|
||||||||
- (1)
- Calculated
pursuant to Rule 457(c) and Rule 457(r) under the Securities Act of 1933, on the basis of the average of the high and low prices of
the registrant's common stock on April 1, 2014 as reported on the New York Stock Exchange.
Filed Pursuant to Rule 424(b)(7)
Registration No. 333-183336
PROSPECTUS SUPPLEMENT
To Prospectus dated August 16, 2012
MOLYCORP, INC.
COMMON STOCK
23,824,050 Shares of Common Stock
This prospectus supplement relates to 23,824,050 shares of our common stock that may be offered for sale or otherwise from time to time by the selling stockholders. The prices at which the selling stockholders may sell the shares will be determined by prevailing market prices or through privately-negotiated transactions. We will not receive any proceeds from the sale of these shares.
The shares of common stock offered under this prospectus supplement are being registered to permit the selling stockholders to sell shares from time to time in the public market. The selling stockholders may sell the shares through ordinary brokerage transactions or through any other means described in the section entitled "Plan of Distribution." We do not know when or in what amount the selling stockholders may offer the shares for sale. The selling stockholders may sell any, all or none of the shares of common stock offered by this prospectus supplement.
Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol "MCP." The last reported sale price of our common stock on the NYSE on April 3, 2014 was $4.79 per share.
Investing in our common stock involves risk. Please read carefully the section entitled "Risk Factors" on page S-2 of this prospectus supplement and the information included and incorporated by reference in this prospectus supplement.
Neither the Securities and Exchange Commission, or SEC, nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
April 4, 2014
S-i
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement, and the accompanying prospectus, are part of a registration statement that we filed with the SEC using a "shelf" registration process. Generally, when we refer to this prospectus, we are referring to both this prospectus supplement and the accompanying prospectus combined. As permitted under the rules of the SEC, this prospectus incorporates important business information about Molycorp, Inc. that is contained in documents that we file with the SEC, but that are not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the SEC at www.sec.gov, as well as other sources. See "Where You Can Find More Information."
We and the selling stockholders have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the selling stockholders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. You should not assume that the information contained in this prospectus, any document incorporated by reference or any free writing prospectus is accurate as of any date, other than the date mentioned on the cover page of these documents. We and the selling stockholders are not making offers to sell the securities described in this prospectus supplement in any jurisdiction in which an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation.
References in this prospectus to the terms "we," "us," "our," "the Company" or "Molycorp" or other similar terms mean Molycorp, Inc. and its consolidated subsidiaries, unless we state otherwise or the context indicates otherwise.
S-ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, including the documents incorporated by reference, contains forward-looking statements that represent our current beliefs, projections and predictions about future events or our future performance. You can identify forward-looking statements by terminology such as "may," "will," "would," "could," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or the negative or plural of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied by such statements.
Risk factors and uncertainties that may cause actual results to differ materially from expected results include, among others:
- •
- the potential need to secure additional capital to implement our business plans, and our ability to successfully secure
any such capital;
- •
- our ability to optimize our Molycorp Mountain Pass Rare Earth Facility, which we refer to as the Molycorp Mountain Pass
facility, to produce rare earths and other planned downstream products at planned production rates;
- •
- the success of our cost mitigation efforts in connection with our modernization and expansion efforts at the Molycorp
Mountain Pass facility, which if unsuccessful, might cause our costs to exceed budget;
- •
- the final costs of our planned capital projects which may differ from estimated costs, including unanticipated costs or
further delays associated with the expansion, modernization and optimization of our Molycorp Mountain Pass facility;
- •
- market conditions, including prices and demand for our products;
- •
- our ability to control our working capital needs;
- •
- our ability to service our debt;
- •
- risks and uncertainties related to stockholder class action litigation and derivative litigation to which we currently are
subject;
- •
- risks and uncertainties associated with intangible assets, including any future goodwill impairment charges;
- •
- our ability to protect our intellectual property, and our ability to defend against any claims of infringement of
intellectual property rights of third parties;
- •
- risks associated with doing business globally, including foreign exchange rate fluctuations and our ability to repatriate
cash generated from our global operations;
- •
- our ability to develop internal and external sources of demand for our products;
- •
- the development and commercialization of new products;
- •
- unexpected actions of domestic and foreign governments, including changes to China's export quota system for the rare
earths industry;
- •
- various events which could disrupt operations, including natural events and other risks;
- •
- uncertainties associated with our reserve estimates and non-reserve deposit information, including estimated mine life and annual production;
S-iii
- •
- uncertainties related to feasibility studies that provide estimates of expected or anticipated costs, expenditures and
economic returns, rare earth oxides, or REO, prices, production costs and other expenses for operations, which are subject to fluctuation;
- •
- risks and liabilities related to the dangers involved in the mining of minerals and the manufacture of mineral products;
- •
- uncertainties regarding global supply and demand for rare earths materials;
- •
- uncertainties regarding the results of our exploratory drilling programs;
- •
- our ability to enter into additional definitive agreements with our customers and our ability to maintain customer
relationships;
- •
- uncertainties related to Molycorp Canada's (formerly Neo Material Technologies Inc.) competitive position in the
manufacture of neodymium-iron-boron, or NdFeB, powders resulting from the expiration of certain key patents;
- •
- our sintered NdFeB rare earths magnet joint venture's ability to successfully manufacture magnets within its expected
timeframe;
- •
- our ability to remediate the material weaknesses in our internal controls, and our ability to maintain sufficient internal
controls in the future, could affect our ability to ensure timely and reliable financial reports;
- •
- our ability to successfully integrate other acquired businesses;
- •
- our ability to maintain appropriate relations with unions and employees;
- •
- our ability to successfully implement our vertical integration strategy;
- •
- environmental laws, regulations and permits affecting our business, directly and indirectly, including, among others,
those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by us;
- •
- our ability to obtain and renew permits required for the operation of our manufacturing facilities;
- •
- uncertainties associated with unanticipated geological conditions related to mining; and
- •
- the outcome of the stockholder class action litigation and derivative litigation, including any actions taken by government agencies in connection therewith.
See "Risk Factors" for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. Any forward-looking statement you read in this prospectus supplement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to our beliefs, projections or predictions as of the date when made. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.
S-iv
This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider before investing in our common stock. You should read this entire prospectus supplement carefully, including the section entitled "Risk Factors" and the documents incorporated by reference herein, including the financial statements and related notes.
The Company
We are a leading global rare earths producer that operates a vertically integrated, global supply chain that combines a world-class rare earths resource with manufacturing facilities on three continents that can produce a wide variety of custom engineered, advanced rare earth materials from all of the lanthanide elements, plus yttrium. With a workforce of approximately 2,580 employees at 26 locations in 11 countries, our vertically integrated business allows us to operate multiple product supply chains, serve as a supplier of advanced rare earths and rare metal materials, and provide price visibility to customers worldwide.
Rare earth products are critical inputs in many existing and emerging applications including: clean energy technologies, such as hybrid and electric vehicles and wind power turbines; multiple high-tech uses, including mobile devices, fiber optics, lasers and hard disk drives; and advanced water treatment technology for use in industrial, municipal and recreational applications. Global demand for rare earth elements, or REEs, is projected by industry analysts to steadily increase both due to continuing growth in existing applications and increased innovation and development of new end uses. We have made significant investments, and expect to continue to invest, in developing technologically advanced applications and proprietary applications for individual REEs.
Corporate Information
Our principal executive offices are located at: 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111, our telephone number is (303) 843-8040 and our web site is http://www.molycorp.com. We do not intend for information contained in our web site to be part of this prospectus, other than documents that we file with the SEC that are incorporated by reference in this prospectus supplement.
S-1
Investing in our common stock involves risk. Prior to making a decision about investing in our common stock, you should carefully consider the specific factors discussed under the heading "Risk Factors" in our most recent Annual Report on Form 10-K, which is incorporated herein by reference and may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future. The risks and uncertainties we have described are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. If any of these risks actually occurs, our business, results of operations and financial condition could suffer. In that case, the trading price of our common stock could decline, and you could lose part of your investment.
The shares of common stock offered hereby are being registered for the account of the selling stockholders identified in this prospectus supplement. See "Selling Stockholders." All net proceeds from the sale of the shares of common stock covered by this prospectus supplement will go to the selling stockholders. We will not receive any part of the proceeds from such sale of shares.
We have entered into a registration rights agreement, dated as of April 15, 2010, with Resource Capital Fund IV L.P., Resource Capital Fund V L.P. (collectively, the "RCF Funds"), PP IV Mountain Pass II, LLC, PP IV MP AIV 1 LLC, PP IV MP AIV 2 LLC, PP IV MP AIV 3 LLC (collectively, "Pegasus Capital"), TNA Moly Group LLC ("TNA Moly"), MP Rare Company LLC ("MP Rare") and KMSMITH LLC, pursuant to which the stockholders party thereto were granted certain demand and piggyback registration rights. MP Rare subsequently distributed its shares of common stock subject to the registration rights agreement to its members, which included Alan Docter and Mark S. Kristoff, and TNA Moly subsequently transferred its shares of common stock subject to the registration rights agreement to its members, which included Traxys S.à.r.l. ("Traxys").
In February 2014, the RCF Funds initiated a demand registration right under the registration rights agreement. This prospectus supplement is being filed pursuant to the exercise by the RCF Funds of the demand registration right.
Under the registration rights agreement, certain of the stockholders, including the RCF Funds, Pegasus Capital and Traxys, each may make an unlimited number of demands for registration of its shares of common stock acquired prior to our initial public offering for resale on Form S-3, subject to certain exceptions. We are required to maintain the effectiveness of the registration statement until all shares of common stock registered thereunder have been sold, subject to certain exceptions. In addition, the registration rights agreement also provides that the stockholders, including RCF Funds, Pegasus Capital and Traxys, are permitted to participate in other registration statements we file, subject to certain exceptions.
From September 2008 until December 2013, Ross R. Bhappu, one of the Principals of the RCF Funds, was one of our directors. Brian Dolan, who was a Principal of the RCF Funds until January 1, 2012, has been one of our directors since September 2008. Mr. Alec Machiels has served as a partner at Pegasus Capital Advisors, L.P. since May 2006 and has been one of our directors since September 2008. Finally, Mark S. Kristoff, who is the chief executive officer of Traxys and serves on its board of managers, has been one of our directors since September 2008.
The shares offered by this prospectus supplement may be offered from time to time by the selling stockholders listed below. We do not know when or in what amounts the selling stockholders may offer shares of common stock for sale. The selling stockholders may sell any or all of the shares of common
S-2
stock offered by this prospectus supplement. We cannot estimate the number of the shares of common stock that will be held by the selling stockholders after the completion of this offering. For purposes of the table below, we have assumed that, after completion of the offering, none of the shares of common stock covered by this prospectus supplement will be held by the selling stockholders.
We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that each of the selling stockholders named in the table below has sole voting and investment power with respect to all shares of common stock that it beneficially owns, subject to applicable community property laws. The table below is based upon information supplied by the selling stockholders and Schedule 13Ds filed with the SEC through April 1, 2014.
The information shown in the table with respect to the percentage of shares of common stock beneficially owned after the offering of common stock is based on 244,699,258 shares of common stock outstanding at April 1, 2014.
| |
Shares of Common Stock Beneficially Owned Prior to the Offering |
|
Shares of Common Stock Beneficially Owned After the Offering(1) |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Shares of Common Stock That May be Offered Hereby |
|||||||||||||||
Name of Selling Stockholder
|
Number | Percentage | Number | Percentage | ||||||||||||
Resource Capital Funds |
16,760,529 | (2) | 6.8 | % | 12,343,863 | 4,416,666 | 1.8 | % | ||||||||
Pegasus Capital LLC |
11,358,305 | (3)(4) | 4.6 | % | 10,611,127 | (5) | 747,178 | * | ||||||||
Traxys S.à.r.l. |
3,388,232 | (4) | 1.4 | % | 2,641,054 | 747,178 | * | |||||||||
Alan Docter |
3,908,820 | (6)(7) | 1.6 | % | 3,075,584 | (5) | 833,236 | * | ||||||||
Mark S. Kristoff |
3,930,392 | (8)(9) | 1.6 | % | 3,075,584 | (5) | 854,808 | * | ||||||||
- *
- Less
than 1% of the outstanding common stock.
- (1)
- Assumes
all of the shares of common stock offered pursuant to this prospectus supplement are sold.
- (2)
- As reported on Schedule 13D/A filed on September 7, 2012, includes (a) 11,042,605 shares of the Company's common stock held by Resource Capital Fund IV L.P., of which Resource Capital Associates IV L.P. is the general partner (RCA IV GP L.L.C. is the general partner of Resource Capital Associates IV L.P.) and (b) 5,301,258 shares of the Company's common stock held by Resource Capital Fund V L.P., of which Resource Capital Associates V L.P. is the general partner (RCA V GP Ltd. is the general partner of Resource Capital Associates V L.P.). The sole members of each of RCA IV GP L.L.C. and RCA V GP Ltd. are Messrs. Ryan T. Bennett, Ross R. Bhappu, Russ Cranswick, James McClements and Henderson G. Tuten and Ms. Sherri Croasdale (collectively, the "Principals"). Also Includes 416,666 shares of the Company's common stock issuable upon conversion of $5,000,000 aggregate principal amount of the Company's 6.00% Convertible Senior Notes due 2017 (the "Notes") held by Resource Capital Fund V L.P. The conversion rate for the Notes is initially 83.3333 shares of Company common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of $12.00 per share of Company common stock), subject to adjustment, pursuant to the terms of the Notes. The businesses of each of RCA IV GP L.L.C. and RCA V GP Ltd. are directed by the officers of each general partner. The Principals serve as executive officers. RCA IV GP L.L.C. may be deemed to have sole voting and dispositive power over 11,042,605 shares of the Company's common stock and RCA V GP Ltd. may be deemed to have sole voting and dispositive power over 5,301,258 shares of the Company's common stock, as well as any of the 416,666 shares of common stock issuable upon conversion of the Notes. The address of RCA IV GP L.L.C. and RCA V GP Ltd. is 1400 Sixteenth Street, Suite 200, Denver, Colorado 80202.
S-3
- (3)
- As
reported on Schedule 13D/A filed by Pegasus Partners IV, L.P. on December 2, 2011, includes: (a) 4,335,721 shares of the
Company's common stock held by PP IV Mountain Pass II, LLC; (b) 2,100,144 shares of the Company's common stock held by PP IV MP AIV 1, LLC; (c) 767,104 shares of the
Company's common stock held by PP IV MP AIV 2, LLC; and (d) 767,104 shares of the Company's common stock held by PP IV MP AIV 3, LLC. Pegasus Capital LLC may be deemed to
beneficially own the shares of the Company's common stock held by PP IV Mountain Pass II, LLC, PP IV MP AIV 1, LLC, PP IV MP AIV 2, LLC, and PP IV MP AIV 3, LLC
(collectively, the "Pegasus Entities"). Accordingly, each of Craig Cogut and Pegasus Capital LLC may be deemed to have sole voting and dispositive power over all 7,970,073 shares. Each of Craig
Cogut and Pegasus Capital LLC disclaims beneficial ownership of any of the Company's securities held by Pegasus Entities, except to the extent of any pecuniary interest therein. The address of
each of the Pegasus Entities is 505 Park Avenue, 21st Floor, New York, New York 10022. The address of Traxys S.à.r.l. is 19-21 route d'Arlon, Immeuble Serenity, Batiments C+D,
2nd Floor, L-8009 STRASSEN, Grand-Duchy of Luxembourg.
- (4)
- As
reported on Schedule 13D/A filed by Pegasus Partners IV, L.P. on December 2, 2011, includes 3,388,232 shares of the Company's common
stock held by Traxys S.à.r.l. Pegasus Capital LLC may be deemed to beneficially own the shares of the Company's common stock held by Traxys S.à.r.l. Accordingly,
each of Craig Cogut and Pegasus Capital LLC may be deemed to have sole voting and dispositive power over all 3,388,232 shares. Each of Craig Cogut and Pegasus Capital LLC disclaims
beneficial ownership of any of the Company's securities held by Traxys S.à.r.l., except to the extent of any pecuniary interest therein. The address of Traxys S.à.r.l. is
19-21 route d'Arlon, Immeuble Serenity, Batiments C+D, 2nd Floor, L-8009 STRASSEN, Grand-Duchy of Luxembourg.
- (5)
- Includes
2,641,054 shares of the Company's common stock being offered by Traxys S.à.r.l.
- (6)
- Includes
2,000 shares of the Company's common stock held by the wife of Mr. Docter. Mr. Docter disclaims beneficial ownership of the shares of
the Company's common stock held by his wife, except to the extent of his pecuniary interest therein, if any.
- (7)
- Includes
518,588 shares of the Company's common stock held by Mr. Docter. Also includes 3,388,232 shares of the Company's common stock held by Traxys
S.à.r.l. Mr. Docter is the chairman of Traxys S.à.r.l. and serves on its board of managers. Mr. Docter disclaims beneficial ownership of the shares of the
Company's common stock held by Traxys S.à.r.l., except to the extent of his pecuniary interest therein, if any.
- (8)
- Includes
23,531 shares of the Company's common stock issuable to Mr. Kristoff upon the exercise of restricted stock units, each of which represents
the right to receive one share of the Company's common stock, that are fully vested and are payable after Mr. Kristoff's separation from service as a director of the Company.
- (9)
- Includes 518,588 shares of the Company's common stock held by Mr. Kristoff. Also includes 3,388,232 shares of the Company's common stock held by Traxys S.à.r.l. Mr. Kristoff is the chief executive officer of Traxys S.à.r.l. and serves on its board of managers. Mr. Kristoff disclaims beneficial ownership of the shares of the Company's common stock held by Traxys S.à.r.l., except to the extent of his pecuniary interest therein, if any.
S-4
The shares of common stock covered by this prospectus supplement may be offered and sold from time to time by the selling stockholders or the selling stockholders' pledgees, donees, transferees or other successors-in-interest who have received, after the date of this prospectus supplement and from the selling stockholders, shares as a gift, pledge, partnership distribution or other transfer. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then current market price, in negotiated transactions or at fixed prices, which may be changed from time to time. The offering price of the shares of common stock may be higher or lower than the current market price of our common stock on the NYSE or any other exchange or market. The selling stockholders may sell their shares of common stock by one or more of, or a combination of, the following methods:
- •
- purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus
supplement;
- •
- ordinary brokerage transactions, which may include long or short sales, and transactions in which the broker solicits
purchasers;
- •
- "at the market" offerings to or through market makers into an existing market for the shares;
- •
- transactions involving cross trades;
- •
- block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
- •
- a transaction on any exchange or in the over-the-counter market;
- •
- in other ways not involving market makers or established markets, including direct sales to purchasers in privately
negotiated transactions;
- •
- through a bidding or auction process;
- •
- through one or more underwriters on a firm commitment or best efforts basis;
- •
- through the writing of options (including put or call options) whether the options are listed on an options exchange or
otherwise; or
- •
- by any other legally available means.
In addition, any shares that qualify for sale pursuant to Rule 144 or other available exemption under the Securities Act may be sold under Rule 144 or such other exemption rather than pursuant to this prospectus supplement.
The selling stockholders may effect transactions by selling shares directly to purchasers or to or through broker-dealers. The broker-dealers may act as agents or principals. Broker-dealers, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from the selling stockholders or the purchasers of the shares, or both. The compensation of any particular broker-dealer, underwriter or agent may be in excess of customary commissions. Any commissions received by them and any profit on the resale of shares may be deemed to be underwriting compensation. Because the selling stockholders and broker-dealers that participate with the selling stockholders in the distribution of shares may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, the selling stockholders may be subject to the prospectus delivery requirements of the Securities Act.
In connection with distributions of shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions. In connection
S-5
with such transactions, broker-dealers or other financial institutions may engage in short sales of shares of common stock in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also sell shares of common stock short and redeliver the shares to close out such short positions. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealer or other financial institution of shares of common stock offered by this prospectus supplement, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus supplement. The selling stockholders may also pledge shares of common stock to a broker-dealer or other financial institution and, upon a default, such broker-dealer or other financial institution may effect sales of the pledged shares pursuant to this prospectus supplement.
The selling stockholders may enter into derivative transactions with third parties, or sell securities not covered by this prospectus supplement to third parties in privately negotiated transactions.
In effecting sales, broker-dealers or agents engaged by the selling stockholders may arrange for other broker-dealers to participate. Broker-dealers or their agents may receive commissions, discounts or concessions from the selling stockholders or from other broker-dealers or agents in amounts to be negotiated immediately prior to the sale.
The selling stockholders may donate, pledge or otherwise transfer their shares in a non-sale related transaction to any person so long as the transfer complies with applicable securities laws. As a result, donees, pledgees, transferees and other successors in interest that receive such shares as a gift, distribution or other non-sale related transfer may offer shares of common stock under this prospectus supplement.
The selling stockholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their securities. There is no underwriter or coordinating broker acting in connection with the proposed sale of shares by the selling stockholders.
In order to comply with the securities laws of certain states, if applicable, shares of common stock must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states shares of common stock may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934, or Exchange Act, may apply to sales of shares of common stock in the market and to the activities of the selling stockholders. Certain persons participating in an offering may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act that stabilize, maintain or otherwise affect the price of the offered securities. If any such activities may occur, they will be described in an additional prospectus supplement or a document incorporated by reference to the extent required. In addition, we will make copies of this prospectus supplement and the accompanying prospectus available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act, which may include delivery through the facilities of the NYSE pursuant to Rule 153 under the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of shares of common stock against certain liabilities, including liabilities arising under the Securities Act.
If we are notified at the time a particular offer of shares of common stock is made and determine that the offer or sale arrangement requires additional disclosure, we will prepare and file a prospectus supplement that will set forth the number of shares being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any
S-6
discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.
We will receive no proceeds from the sale of shares by selling stockholders pursuant to this prospectus supplement. We will bear all costs, expenses and fees in connection with the registration of the shares, except that the selling stockholders will bear all commissions and discounts, if any, attributable to the sales of the shares.
Under the terms of the registration rights agreement, we have agreed to indemnify the selling stockholders, and the selling stockholders have agreed to indemnify us, and we may agree to indemnify any underwriter, broker-dealer or agent that participates in transactions involving sales of the shares, against certain liabilities, including liabilities arising under the Securities Act.
S-7
Jones Day will pass upon the validity of the shares of common stock being offered hereby.
The consolidated financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is included in Management's Report on Internal Control over Financial Reporting) incorporated in this Prospectus Supplement by reference to the Annual Report on Form 10-K for the year ended December 31, 2013 have been so incorporated in reliance on the report (which contains an adverse opinion on the effectiveness of internal control over financial reporting due to a failure to (i) maintain a sufficient complement of resources with an appropriate level of accounting knowledge, experience and training commensurate with the Company's financial reporting requirements and (ii) design and maintain effective controls over restricted access, automated controls and change management activities within a recently implemented ERP system, and certain personnel having the ability to prepare and post journal entries without independent review by someone other than the preparer existed as of that date) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The information incorporated in this prospectus concerning estimates of our proven and probable REO reserves and non-reserve REO deposits for our Molycorp Mountain Pass facility was derived from the report of SRK Consulting (U.S.), Inc., independent mining consultants, and has been incorporated herein upon the authority of SRK Consulting as experts with respect to the matters covered by such report and in giving such report.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational reporting requirements of the Exchange Act. We file reports, proxy statements and other information with the SEC. Our SEC filings are available over the Internet at the SEC's web site at http://www.sec.gov. You may read and copy any reports, statements and other information filed by us at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the Public Reference Room. You may also inspect our SEC reports and other information at our web site at http://www.molycorp.com. We do not intend for information contained in our web site to be part of this prospectus, other than documents that we file with the SEC that are incorporated by reference in this prospectus.
INFORMATION WE INCORPORATE BY REFERENCE
The SEC allows us to incorporate by reference the information we file with them, which means:
- •
- incorporated documents are considered part of this prospectus;
- •
- we can disclose important information to you by referring you to those documents; and
- •
- information that we file with the SEC after the date of this prospectus will automatically update and supersede the information contained in this prospectus and incorporated filings.
We incorporate by reference the documents listed below that we filed with the SEC under the Exchange Act:
- •
- our Annual Report on Form 10-K for the fiscal year ended December 31, 2013;
- •
- our Current Reports on Form 8-K filed on March 6, 2014, March 21, 2014 and April 4, 2014; and
S-8
- •
- the description of our common stock contained in the Registration Statement on Form 8-A filed on July 21, 2010, including any subsequently filed amendments and reports updating such description.
We also incorporate by reference each of the documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus and prior to the termination of the offering under this prospectus supplement. We will not, however, incorporate by reference in this prospectus any documents or portions thereof that are not deemed "filed" with the SEC, including any information furnished pursuant to Item 2.02 or Item 7.01 of our Current Reports on Form 8-K after the date of this prospectus unless, and except to the extent, specified in such Current Reports.
We will provide you with a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically incorporated by reference into the filing requested) at no cost, if you submit a request to us by writing or telephoning us at the following address and telephone number:
Molycorp, Inc.
5619 Denver Tech Center Parkway
Suite 1000
Greenwood Village, Colorado 80111
Telephone Number: (303) 843-8040
S-9
Molycorp, Inc.
Common Stock
Preferred Stock
Depositary Shares
Warrants
Subscription Rights
Senior Debt Securities
Subordinated Debt Securities
Units
We may offer and sell from time to time our common stock, preferred stock, depositary shares, warrants, subscription rights, senior debt securities and subordinated debt securities, as well as units that include any of these securities.
We will provide the specific terms of the securities to be offered in one or more supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest in our securities. This prospectus may not be used to offer and sell our securities unless accompanied by a prospectus supplement describing the method and terms of the offering of those offered securities.
We may sell the securities directly or to or through underwriters or dealers, and also to other purchasers or through agents. The names of any underwriters or agents that are included in a sale of securities to you, and any applicable commissions or discounts, will be stated in an accompanying prospectus supplement. In addition, the underwriters, if any, may over-allot a portion of the securities.
Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol "MCP." Our 5.50% Series A Mandatory Convertible Preferred Stock is listed on the NYSE under the symbol "MCP-PA." None of the other securities that we may offer under this prospectus are currently publicly traded.
Investing in any of our securities involves risk. Please read carefully the section entitled "Risk Factors" on page 5 of this prospectus and the information included and incorporated by reference in this prospectus.
Neither the Securities and Exchange Commission, nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 16, 2012
i
This prospectus is part of a registration statement that we filed with the SEC using a "shelf" registration process. As permitted under the rules of the SEC, this prospectus incorporates important business information about Molycorp, Inc. that is contained in documents that we file with the SEC, but that are not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the SEC at www.sec.gov, as well as other sources. See "Where You Can Find More Information."
We have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus, any prospectus supplement or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. You should not assume that the information contained in this prospectus, any prospectus supplement, any document incorporated by reference or any free writing prospectus is accurate as of any date, other than the date mentioned on the cover page of these documents. We are not making offers to sell the securities described in this prospectus in any jurisdiction in which an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation.
References in this prospectus to the terms "we," "us," "our," "the Company" or "Molycorp" or other similar terms mean Molycorp, Inc. and its consolidated subsidiaries, unless we state otherwise or the context indicates otherwise.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference, contains forward-looking statements that represent our beliefs, projections and predictions about future events or our future performance. You can identify forward-looking statements by terminology such as "may," "will," "would," "could," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" or the negative or plural of these terms or other similar expressions or phrases. These forward-looking statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements or industry results to differ materially from any future results, performance or achievement described in or implied by such statements.
Risk factors and uncertainties that may cause actual results to differ materially from expected results include, among others:
- •
- the amount of additional capital we need to secure to implement our business plans, and our ability to successfully secure
any such capital;
- •
- our ability to complete our planned capital projects, such as our modernization and expansion efforts, including achieving
an annual production capacity of 19,050 mt at our Mountain Pass, California rare earth mine and processing facility, or the Molycorp Mountain Pass facility, which we refer to as "Project Phoenix
Phase 1," and our second phase capacity expansion plan, which we refer to as "Project Phoenix Phase 2," and reach full planned production rates for rare earth oxides, or REO, and other
planned downstream products, in each case within the projected time frame;
- •
- the success of our cost mitigation efforts in connection with Project Phoenix, which if unsuccessful, might cause our
costs to exceed budget;
- •
- the final costs of our planned capital projects, such as Project Phoenix Phase 1 and Project Phoenix Phase 2, which may differ from estimated costs;
1
- •
- our ability to successfully integrate Molycorp Minerals Canada ULC (formerly Neo Material Technologies Inc.
(which we refer to as "Molycorp Canada")), with our operations;
- •
- our ability to achieve fully the strategic and financial objectives related to the acquisition of Molycorp Canada,
including the acquisition's impact on our financial condition and results of operations;
- •
- unexpected costs or liabilities that may arise from the acquisition, ownership or operation of Molycorp Canada;
- •
- the rate of exchange of the U.S. dollar to the Canadian dollar, the Japanese yen, and the Chinese Renminbi;
- •
- new products pricing and the competitive environment for these new products;
- •
- unexpected actions of domestic and foreign governments;
- •
- various events which could disrupt operations, including natural events and other risks;
- •
- uncertainties associated with our reserve estimates and non-reserve deposit information, including estimated mine life and
annual production;
- •
- uncertainties related to feasibility studies that provide estimates of expected or anticipated costs, expenditures and
economic returns, REO prices, production costs and other expenses for operations, which are subject to fluctuation;
- •
- uncertainties regarding global supply and demand for rare earths materials;
- •
- uncertainties regarding the results of our exploratory drilling programs;
- •
- our ability to enter into additional definitive agreements with our customers and our ability to maintain customer
relationships;
- •
- our sintered neodymium-iron-boron, or NdFeB, rare earth magnet joint venture's ability to successfully manufacture magnets
within its expected timeframe;
- •
- our ability to successfully integrate other acquired businesses;
- •
- our ability to maintain appropriate relations with unions and employees;
- •
- our ability to successfully implement our "mine-to-magnets" strategy;
- •
- environmental laws, regulations and permits affecting our business, directly and indirectly, including, among others,
those relating to mine reclamation and restoration, climate change, emissions to the air and water and human exposure to hazardous substances used, released or disposed of by us; and
- •
- uncertainties associated with unanticipated geological conditions related to mining.
See "Risk Factors" for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. Any forward-looking statement you read in this prospectus reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speak only as to the date when made. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, except as otherwise required by applicable law.
2
We are one of the world's leading rare earth products and rare metals companies that combines a world-class rare earth resource at Mountain Pass, California, with world-leading ultra-high-purity rare earth and rare metal materials processing capabilities. We are vertically integrated across the global rare earth mine-to-magnetics supply chain and we currently produce custom engineered materials from 15 different rare earths, with purity levels of up to 5N (99.999%), and from five other metals (niobium, tantalum, gallium, indium and rhenium) at purity levels of up to 8N (99.999999%).
Rare earth products are critical inputs in many existing and emerging applications including: clean energy technologies, such as hybrid and electric vehicles and wind power turbines; multiple high-tech uses, including mobile devices, fiber optics, lasers and hard disk drives; critical defense applications, such as guidance and control systems and global positioning systems; and advanced water treatment technology for use in industrial, military and outdoor recreation applications. Global demand for rare earth elements, or REEs, is projected by industry analysts to steadily increase both due to continuing growth in existing applications and increased innovation and development of new end uses. We have made significant investments, and expect to continue to invest, in developing technologically advanced applications and proprietary applications for individual REEs.
The foundation for our "mine-to-magnets" strategy is our Molycorp Mountain Pass facility. Our Molycorp Mountain Pass facility is the largest, most fully developed rare earth mine outside of China and has been producing rare earth products for approximately 60 years. Upon completion of Project Phoenix Phase 1, which we anticipate to occur in the fourth quarter of 2012, we expect our Molycorp Mountain Pass facility to have production cash costs lower than those publicly reported for China by government officials and those reported for other non-Chinese rare earth projects. We are targeting a full planned production rate of approximately 19,050 mt of REO per year by the fourth quarter of 2012, an annual production capacity of 40,000 mt of REO by the end of 2012 and, if customer demand and end-market conditions warrant, a full planned production rate of 40,000 mt of REO per year as early as mid-2013 is possible.
We also own several of the leading rare earth processing facilities in the world. Our Molycorp Silmet facility, located in Sillamäe, Estonia, is one of the largest REO and rare metals producers in Europe. Our Molycorp Metals & Alloys facility, located in Tolleson, Arizona, is the only producer of neodymium and samarium magnet alloy and other specialty alloy products in the United States. We also have created a joint venture with Daido Steel Co., Ltd. and Mitsubishi Corporation in the form of a private company, Intermetallics Japan, to manufacture sintered NdFeB permanent rare earth magnets.
As a result of the Molycorp Canada acquisition in June 2012, we became a leading global producer, processor and developer of NdFeB magnetic powders, or Neo Powders, rare earths and zirconium based engineered materials and applications and other rare metals and their compounds. These innovative products are essential in many of today's high-technology products.
Neo Powders are used in the production of high performance, bonded NdFeB permanent magnets, which are found in micro motors, precision motors, sensors and other applications requiring high levels of magnetic strength, flexibility, small size and reduced weight. Molycorp Canada is the only legal supplier of Neo Powders for bonded magnets manufactured or sold in the United States.
Our Molycorp Canada segment also manufactures a product line of oxides and salts of REEs, including cerium, lanthanum, neodymium, yttrium and yttrium europium coprecipitates, dysprosium and terbium, among others, and zirconium based engineered materials and salts, as well as a line of mixed rare earth/zirconium oxides. Rare earths and zirconium applications include catalytic converters, computers, television display panels, optical lenses, mobile phones and electronic chips. Additionally, Molycorp Canada produces, reclaims, refines and markets high value niche metals and their compounds
3
including gallium, indium and rhenium used in wireless, light emitting diode flat panel display, turbine, solar and catalyst applications.
Our Molycorp Canada segment operates joint ventures and majority owned manufacturing facilities in Jiangsu Province, China; Shandong Province, China; Stade, Germany; Sagard, Germany; and Quapaw, Oklahoma. Molycorp Canada also operates wholly owned manufacturing facilities in Peterborough, Ontario; Napanee, Ontario; Blanding, Utah; the Hyeongok Industrial Zone in South Korea; Tianjin, China; and Korat, Thailand. Additionally, Molycorp Canada conducts ongoing research and product development through laboratories in Singapore and Abingdon, United Kingdom.
Our combined workforce of approximately 2,650 employees includes scientists, engineers, chemists, technologists and highly skilled workers in 27 locations across 11 countries.
Our principal executive offices are located at: 5619 Denver Tech Center Parkway, Suite 1000, Greenwood Village, Colorado 80111, our telephone number is (303) 843-8040 and our web site is http://www.molycorp.com. We do not intend for information contained in our web site to be part of this prospectus, other than documents that we file with the SEC that are incorporated by reference in this prospectus.
4
Investing in our securities involves risk. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed under the heading "Risk Factors" in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are incorporated herein by reference and may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future and by any prospectus supplement. The risks and uncertainties we have described are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. If any of these risks actually occurs, our business, results of operations and financial condition could suffer. In that case, the trading price of our securities could decline, and you could lose part of your investment.
Unless otherwise specified in any prospectus supplement, we intend to use the net proceeds from the sale of our securities offered under this prospectus for working capital and general corporate purposes including, but not limited to, capital expenditures, working capital, acquisitions and other business opportunities.
Pending any specific application, we may initially invest funds in short-term marketable securities or apply them to the reduction of short-term indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED SHARE DIVIDENDS
| |
June 12, 2008 (Inception) through December 31, 2008 2008 |
Year Ended December 31, | |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Six Months Ended June 30, 2012 |
|||||||||||||||
| |
2009 | 2010 | 2011 | |||||||||||||
Ratio of earnings to fixed charges |
— | — | — | 17.1 | x | — | ||||||||||
Ratios of earnings to combined fixed charges and preferred stock dividends |
— | — | — | 5.9 | x | — | ||||||||||
Fixed charges are equal to interest expense, plus the portion of rent expense estimated to represent interest. Total earnings for the period from June 12, 2008 (Inception) through December 31, 2008, for the years ended December 31, 2009 and December 31, 2010 and for the six months ended June 30, 2012 were insufficient to cover fixed charges by $14.1 million, $28.6 million, $50.8 million and $99.4 million, respectively. Total earnings for the period from June 12, 2008 (Inception) through December 31, 2008, for the years ended December 31, 2009 and December 31, 2010 and for the six months ended June 30, 2012 were insufficient to cover fixed charges, included preferred stock dividends, by $14.1 million, $28.6 million, $50.8 million and $99.4 million, respectively. The insufficient earnings were primarily due to our net operating losses for each of the periods presented. Accordingly, such ratios are not presented.
5
General
The following is a summary of the rights of our capital stock, certain provisions of our certificate of incorporation and our bylaws, and certain provisions of applicable law. For more detailed information, please see our certificate of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part.
Authorized Capitalization
Our authorized capital stock consists of shares, with a par value of $0.001 per share, of which:
- •
- 350,000,000 shares are designated as common stock; and
- •
- 5,000,000 shares are designated as preferred stock.
Common Stock
Each outstanding share of common stock is entitled to one vote on all matters submitted to a vote of stockholders. Pursuant to our certificate of incorporation, holders of our common stock do not have the right to cumulate votes in elections of directors. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of our common stock are entitled to receive ratably such dividends as may be declared from time to time by our board of directors out of legally available funds. In the event of our liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and any amounts due to the holders of preferred stock. Holders of our common stock have no preemptive, conversion or subscription rights. No redemption or sinking fund provisions apply to our common stock. All of our outstanding shares of common stock are fully paid and non-assessable.
Preferred Stock
Our certificate of incorporation authorizes our board of directors, without stockholder approval, to designate and issue up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon each such series of preferred stock, including voting rights, dividend rights, conversion rights, terms of redemption, liquidation preference, sinking fund terms, subscription rights and the number of shares constituting any series or the designation of a series. Our board of directors can issue, without stockholder approval, preferred stock with voting and conversion rights that could adversely affect the voting power of the holders of common stock and reduce the likelihood that such holders will receive dividend payments or payments upon liquidation. Such issuance could have the effect of decreasing the market price of the common stock. The issuance of preferred stock or even the ability to issue preferred stock could also have the effect of delaying, deterring or preventing a change of control or other corporate action.
As of June 30, 2012, we had outstanding 2,070,000 shares of preferred stock designated as the Series A Mandatory Convertible Preferred Stock, and one share of preferred stock designated as the Special Voting Preferred Stock, which is held by the trustee of the exchangeable shares, which we refer to as the "Exchangeable Shares," issued by MCP Exchangeco Inc., a Canadian subsidiary of ours. The Exchangeable Shares are exchangeable for shares of our common stock on a one for one basis.
6
Series A Mandatory Convertible Preferred Stock
Ranking
The Series A Mandatory Convertible Preferred Stock, with respect to dividend rights and rights upon our liquidation, winding-up or dissolution, ranks:
- •
- senior to (i) our common stock and (ii) each other class of capital stock and series of preferred stock
established after the first original issue date of the Series A Mandatory Convertible Preferred Stock (which we refer to as the "initial issue date") the terms of which do not expressly provide
that such class or series ranks senior to or on a parity with the Series A Mandatory Convertible Preferred Stock as to dividend rights and rights upon our liquidation, winding-up or dissolution
(which we refer to collectively as "junior stock");
- •
- on parity with any class of capital stock or series of preferred stock established after the initial issue date the terms
of which expressly provide that such class or series will rank on a parity with the Series A Mandatory Convertible Preferred Stock as to dividend rights and rights upon our liquidation,
winding-up or dissolution (which we refer to collectively as "parity stock");
- •
- junior to each class of capital stock or series of preferred stock established after the initial issue date the terms of
which expressly provide that such class or series will rank senior to the Series A Mandatory Convertible Preferred Stock as to dividend rights and rights upon our liquidation, winding-up or
dissolution (which we refer to collectively as "senior stock"); and
- •
- junior to our existing and future indebtedness.
In addition, the Series A Mandatory Convertible Preferred Stock, with respect to dividend rights and rights upon our liquidation, winding-up or dissolution, is structurally subordinated to existing and future indebtedness of our subsidiaries as well as the capital stock of our subsidiaries held by third parties.
Dividends
Subject to the rights of holders of any class of capital stock ranking senior to the Series A Mandatory Convertible Preferred Stock with respect to dividends, holders of shares of Series A Mandatory Convertible Preferred Stock will receive, when, as and if declared by our board of directors, out of funds legally available for payment, cumulative dividends at the rate per annum of 5.50% on the liquidation preference of $100.00 per share of Series A Mandatory Convertible Preferred Stock (equivalent to $5.50 per annum per share), payable in cash, by delivery of shares of our common stock or through any combination of cash and shares of our common stock, as determined by us in our sole discretion (subject to certain limitations). Any shares delivered in the payment of dividends will be valued for such purpose at the average volume weighted average price per share of our common stock over the five consecutive trading day period ending on the second trading day immediately preceding the applicable dividend payment date, or the "five day average price," multiplied by 97%. Declared dividends on the Series A Mandatory Convertible Preferred Stock will be payable quarterly on March 1, June 1, September 1 and December 1 of each year to and including the mandatory conversion date (as defined below), commencing June 1, 2011 (each of which we refer to as a "dividend payment date"), at such annual rate, and dividends shall accumulate from the most recent date as to which dividends shall have been paid or, if no dividends have been paid, from the initial issue date of the Series A Mandatory Convertible Preferred Stock, whether or not in any dividend period or periods there have been funds legally available for the payment of such dividends.
Declared dividends will be payable on the relevant dividend payment date to holders of record as they appear on our stock register at 5:00 p.m., New York City time, on the immediately preceding February 15, May 15, August 15 and November 15 (each, a "record date"), whether or not such holders convert their shares, or such shares are automatically converted, after a record date and on or prior to the immediately succeeding dividend payment date. These record dates will apply regardless of whether
7
a particular record date is a business day. A "business day" means any day other than a Saturday or Sunday or other day on which commercial banks in New York City are authorized or required by law or executive order to close. If a dividend payment date is not a business day, payment will be made on the next succeeding business day, without any interest or other payment in lieu of interest accruing with respect to this delay.
So long as any shares of our Series A Mandatory Convertible Preferred Stock remain outstanding, no dividend or distribution may be declared or paid on our common stock unless all accumulated and unpaid dividends have been paid on our Series A Mandatory Convertible Preferred Stock, subject to certain exceptions, such as dividends paid on our common stock in shares of our common stock.
Our ability to declare and pay cash dividends and make other distributions with respect to our capital stock, including the Series A Mandatory Convertible Preferred Stock, may be limited by the terms of any existing and future indebtedness. In addition, our ability to declare and pay dividends may be limited by applicable Delaware law.
Redemption
The Series A Mandatory Convertible Preferred Stock is not redeemable.
Liquidation Preference
In the event of our voluntary or involuntary liquidation, winding-up or dissolution, each holder of Series A Mandatory Convertible Preferred Stock will receive a liquidation preference in the amount of $100.00 per share of the Series A Mandatory Convertible Preferred Stock (the "liquidation preference"), plus an amount equal to accumulated and unpaid dividends on the shares to (but excluding) the date fixed for liquidation, winding-up or dissolution to be paid out of our assets available for distribution to our stockholders, after satisfaction of liabilities to our creditors and holders of any senior stock and before any payment or distribution is made to holders of junior stock (including our common stock). If, upon our voluntary or involuntary liquidation, winding-up or dissolution, the amounts payable with respect to the liquidation preference plus an amount equal to accumulated and unpaid dividends of the Series A Mandatory Convertible Preferred Stock and all parity stock are not paid in full, the holders of the Series A Mandatory Convertible Preferred Stock and any parity stock will share equally and ratably in any distribution of our assets in proportion to the respective liquidation preferences and amounts equal to accumulated and unpaid dividends to which they are entitled. After payment of the full amount of the liquidation preference and an amount equal to accumulated and unpaid dividends to which they are entitled, the holders of the Series A Mandatory Convertible Preferred Stock will have no right or claim to any of our remaining assets.
Voting Rights
The holders of the Series A Mandatory Convertible Preferred Stock do not have voting rights other than those described below, except as specifically required by Delaware law.
Whenever dividends on any shares of Series A Mandatory Convertible Preferred Stock have not been declared and paid for the equivalent of six or more dividend periods, whether or not for consecutive dividend periods, the holders of such shares of Series A Mandatory Convertible Preferred Stock, voting together as a single class with holders of any and all other series of parity stock with similar voting rights then outstanding, will be entitled at our next special or annual meeting of stockholders to vote for the election of a total of two additional members of our board of directors, subject to certain limitations.
So long as any shares of Series A Mandatory Convertible Preferred Stock remain outstanding, we will not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series A Mandatory Convertible Preferred Stock and all other series of voting preferred stock
8
entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing or at a meeting:
- •
- amend or alter the provisions of our certificate of incorporation or the certificate of designations for the shares of
Series A Mandatory Convertible Preferred Stock so as to authorize or create, or increase the authorized amount of, any specific class or series of stock ranking senior to the Series A
Mandatory Convertible Preferred Stock with respect to payment of dividends or the distribution of our assets upon our liquidation, dissolution or winding up; or
- •
- amend, alter or repeal the provisions of our certificate of incorporation or the certificate of designations for the
shares of Series A Mandatory Convertible Preferred Stock so as to adversely affect the special rights, preferences, privileges or voting powers of the shares of Series A Mandatory
Convertible Preferred Stock; or
- •
- consummate a binding share exchange or reclassification involving the shares of Series A Mandatory Convertible Preferred Stock or a merger or consolidation of us with another entity, unless in each case: (i) shares of Series A Mandatory Convertible Preferred Stock remain outstanding and are not amended in any respect or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent; and (ii) such shares of Series A Mandatory Convertible Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series A Mandatory Convertible Preferred Stock immediately prior to such consummation, taken as a whole.
Mandatory Conversion
Each share of the Series A Mandatory Convertible Preferred Stock, unless previously converted, will automatically convert on March 1, 2014 (the "mandatory conversion date"), into a number of shares of common stock equal to the conversion rate described below. If we declare a dividend for the dividend period ending on the mandatory conversion date, we will pay such dividend to the holders of record on the applicable record date, as described above under "—Dividends." If on or prior to the record date immediately preceding the mandatory conversion date we have not declared all or any portion of the accumulated and unpaid dividends on the Series A Mandatory Convertible Preferred Stock, the conversion rate will be adjusted so that holders receive an additional number of shares of common stock equal to the amount of accumulated and unpaid dividends that have not been declared (the "additional conversion amount") divided by the greater of the floor price and 97% of the five day average price. To the extent that the additional conversion amount exceeds the product of the number of additional shares and 97% of the five-day average price, we will, if we are legally able to do so, declare and pay such excess amount in cash pro rata to the holders of the Series A Mandatory Convertible Preferred Stock.
The conversion rate, which is the number of shares of common stock issuable upon conversion of each share of Series A Mandatory Convertible Preferred Stock on the mandatory conversion date, will, subject to adjustment as described in the section of this prospectus entitled "—Anti-dilution Adjustments" below and the preceding paragraph, be as follows:
- •
- if the applicable market value of our common stock is greater than $60.00, which we call the "threshold appreciation
price," then the conversion rate will be 1.6667 shares of common stock per share of Series A Mandatory Convertible Preferred Stock (the "minimum conversion rate"), which is equal to $100
divided by the threshold appreciation price;
- •
- if the applicable market value of our common stock is less than or equal to the threshold appreciation price but equal to or greater than $50.00 (the "initial price"), then the conversion
9
- •
- if the applicable market value of our common stock is less than the initial price, then the conversion rate will be 2.0000 shares of common stock per share of Series A Mandatory Convertible Preferred Stock (the "maximum conversion rate"), which is equal to $100 divided by the initial price.
rate will be equal to $100 divided by the applicable market value of our common stock, which will be between 1.6667 and 2.0000 shares of common stock per share of Series A Mandatory Convertible Preferred Stock; or
"Applicable market value" means the average volume-weighted average price per share of our common stock over the 20 consecutive trading day period ending on, and including, the third trading day immediately preceding the mandatory conversion date.
Conversion at the Option of the Holder
Holders of the Series A Mandatory Convertible Preferred Stock have the right to convert their shares of Series A Mandatory Convertible Preferred Stock, in whole or in part (but in no event less than one share of Series A Mandatory Convertible Preferred Stock), at any time prior to the mandatory conversion date, into shares of our common stock at the minimum conversion rate of 1.6667 shares of common stock per share of Series A Mandatory Convertible Preferred Stock, subject to certain anti-dilution and other adjustments.
Conversion at the Option of the Holder upon Fundamental Change; Fundamental Change Dividend Make-whole Amount
If certain fundamental changes occur, on or prior to the mandatory conversion date, holders of the Series A Mandatory Convertible Preferred Stock will have the right to: (i) convert their shares of Series A Mandatory Convertible Preferred Stock, in whole or in part (but in no event less than one share of Series A Mandatory Convertible Preferred Stock), into shares of common stock at the fundamental change conversion rate, which will be based on the effective date of the fundamental change and the price paid (or deemed paid) per share of our common stock in the fundamental change; (ii) with respect to such converted shares, receive an amount equal to the present value, calculated using a discount rate of 5.50% per annum, of all dividend payments on such shares for all the remaining dividend periods (excluding any accumulated and unpaid dividends as of the effective date of the fundamental change) from such effective date to but excluding the mandatory conversion date; and (iii) with respect to such converted shares receive the amount of any accumulated and unpaid dividends as of the effective date, subject to certain exceptions.
Anti-Dilution Adjustments
The formula for determining the conversion rate on the mandatory conversion date and the number of shares of our common stock to be delivered upon an early conversion event may be adjusted if certain events occur, including if:
- •
- We issue common stock to all or substantially all holders of our common stock as a dividend or other distribution.
- •
- We issue to all or substantially all holders of our common stock rights or warrants (other than rights or warrants issued
pursuant to a dividend reinvestment plan or share purchase plan or other similar plans) entitling them, for a period of up to 45 calendar days from the date of issuance of such rights or warrants, to
subscribe for or purchase our shares of common stock at less than the current market price of our common stock.
- •
- We subdivide or combine our common stock.
- •
- We distribute to all or substantially all holders of our common stock evidences of our indebtedness, shares of capital stock, securities, rights to acquire our capital stock, cash or other
10
- •
- We make a distribution consisting exclusively of cash to all or substantially all holders of our common stock, subject to
limited exceptions.
- •
- We or any of our subsidiaries successfully complete a tender or exchange offer pursuant to a Schedule TO or registration statement on Form S-4 for our common stock (excluding any securities convertible or exchangeable for our common stock), where the cash and the value of any other consideration included in the payment per share of our common stock exceeds the current market price of our common stock.
assets, excluding any dividend, distribution, rights or warrants referred to in the bullets above and any dividend, distribution or spin-off referred to in the bullets below.
Special Voting Preferred Stock
The Special Voting Preferred Stock entitles the trustee of the Exchangeable Shares to vote on matters in which holders of our common stock are entitled to vote. The Special Voting Preferred Stock is entitled to a number of votes equal to the number of Exchangeable Shares outstanding on the record date for determining holders of our common stock entitled to vote and for which the trustee has received voting instructions from the holders of such Exchangeable Shares.
The Special Voting Preferred Stock is not entitled to receive any dividends or other distributions or assets, nor is the Special Voting Preferred Stock convertible into, or exchangeable for, shares of any other series or class of our capital stock.
Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaw Provisions
Our certificate of incorporation and bylaws contain several provisions that may make it more difficult to acquire us by means of a tender offer, open market purchase, proxy fight or otherwise. These provisions and certain provisions of Delaware law are expected to discourage coercive takeover practices and inadequate takeover bids.
These provisions of our certificate of incorporation and bylaws are designed to encourage persons seeking to acquire control of us to negotiate with our board of directors. We believe that, as a general rule, our interests and the interests of our stockholders would be served best if any change in control results from negotiations with our board of directors based upon careful consideration of the proposed terms, such as the price to be paid to stockholders, the form of consideration to be paid and the anticipated tax effects of the transaction.
Our certificate of incorporation and bylaws provisions could, however, have the effect of delaying, deferring or discouraging a prospective acquiror from making a tender offer for our shares or otherwise attempting to obtain control of us. To the extent that these provisions discourage takeover attempts, they could deprive stockholders of opportunities to realize takeover premiums for their shares. Moreover, these provisions could discourage accumulations of large blocks of common stock, thus depriving stockholders of any advantages which large accumulations of stock might provide.
Set forth below is a summary of the relevant provisions of our certificate of incorporation and bylaws and certain applicable sections of the General Corporation Law of the State of Delaware. For additional information we refer you to the provisions of our certificate of incorporation, our bylaws and the sections of the General Corporation Law of the State of Delaware.
Delaware Anti-Takeover Statute
We are subject to the provisions of Section 203 of the General Corporation Law of the State of Delaware regulating corporate takeovers. In general, Section 203, subject to certain exceptions, prohibits a publicly-held Delaware corporation from engaging in any business combination with any
11
interested stockholder for a period of three years following the date that such person or entity became an interested stockholder, unless:
- •
- prior to such date, the board of directors of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder;
- •
- upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding specified shares; or
- •
- at or subsequent to such date of the transaction that resulted in a person or entity becoming an interested stockholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3% of the outstanding voting stock that is not owned by the interested stockholder.
The application of Section 203 may limit the ability of stockholders to approve a transaction that they may deem to be in their best interests. In addition, Section 203 makes it more difficult for an interested stockholder to effect various business combinations with a corporation for a three-year period, although the stockholders may, by adopting an amendment to our certificate of incorporation or bylaws, elect not to be governed by this section, effective 12 months after adoption.
In general, Section 203 defines "business combination" as:
- •
- any merger or consolidation involving the corporation and the interested stockholder;
- •
- any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation
to or with the interested stockholder;
- •
- subject to certain exceptions, any transaction which results in the issuance or transfer by the corporation of any stock
of the corporation to the interested stockholder;
- •
- any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any
class or series of the corporation beneficially owned by the interested stockholder; or
- •
- the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
In general, Section 203 defines an "interested stockholder" as any person that is:
- •
- the owner of 15% or more of the outstanding voting stock of the corporation;
- •
- an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the
corporation at any time within three years immediately prior to the relevant date; or
- •
- an affiliate or associate of the above.
Our certificate of incorporation and bylaws do not exclude us from the restrictions imposed under Section 203. We anticipate that the provisions of Section 203 may encourage companies interested in acquiring us to negotiate in advance with our board of directors because the stockholder approval requirement would be avoided if a majority of the directors then in office approve either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder.
Classified Board of Directors
Our certificate of incorporation provides for our board of directors to be divided into three classes of directors, as nearly equal in number as possible, serving staggered terms. Approximately one-third of our board of directors are elected each year. Under Section 141 of the General Corporation Law of
12
the State of Delaware, unless the certificate of incorporation provides otherwise, directors serving on a classified board can only be removed for cause. Accordingly, our directors may only be removed for cause. The provision for our classified board of directors may be amended, altered or repealed only upon the affirmative vote of the holders of 662/3% of our outstanding voting stock.
The provision for a classified board of directors could prevent a party that acquires control of a majority of the outstanding voting stock from obtaining control of our board of directors until the second annual stockholders meeting following the date the acquiror obtains the controlling stock interest. The classified board of directors provision could have the effect of discouraging a potential acquiror from making a tender offer for shares of common stock or otherwise attempting to obtain control of us and could increase the likelihood that our incumbent directors will retain their positions.
We believe that a classified board of directors helps to assure the continuity and stability of our board and our business strategies and policies as determined by our board of directors because a majority of the directors at any given time will have prior experience on our board. The classified board of directors provision should also help to ensure that our board of directors, if confronted with an unsolicited proposal from a third party that has acquired a block of our voting stock, will have sufficient time to review the proposal and appropriate alternatives and to seek the best available result for all stockholders.
Number of Directors; Removal; Vacancies
Our certificate of incorporation and bylaws provide that the number of directors shall be fixed by the affirmative vote of our board of directors or by the affirmative vote of holders of at least 662/3% of our outstanding voting stock. The size of our board of directors is currently fixed at eight directors.
Pursuant to our certificate of incorporation, each director will serve until his or her successor is duly elected and qualified, unless he or she resigns, dies, becomes disqualified or is removed. Our certificate of incorporation also provides that, subject to the rights of the holders of any series of preferred stock, directors may be removed, but only for cause.
Our certificate of incorporation further provides that generally, vacancies or newly created directorships in our board may only be filled by a resolution approved by a majority of our board of directors and any director so chosen will hold office until the next election of the class for which such director was chosen.
Stockholder Action; Special Meetings
Our certificate of incorporation provides that stockholder action can be taken only at an annual or special meeting of stockholders and cannot be taken by written consent in lieu of a meeting. Our certificate of incorporation and bylaws provide that, except as otherwise required by law, special meetings of the stockholders can only be called by the Chairman of our board of directors, our Chief Executive Officer or our Secretary at the written request of a majority of the number of directors that we would have if there were no vacancies on our board of directors. Unless our board of directors determines otherwise, the Chairman or another designated officer has sole discretion to determine the order of business and procedure at annual and special meetings of stockholders. In addition, stockholders are not permitted to call a special meeting or to require our board of directors to call a special meeting. Stockholders also may not bring business before a special meeting of stockholders.
Stockholder Proposals and Nominations
Our bylaws provide that stockholders seeking to bring business before an annual meeting of stockholders or to nominate candidates for election as directors at an annual meeting of stockholders must provide timely notice of such proposed business in writing. To be timely, a stockholder's notice generally must be delivered to or mailed and received at our principal executive office not less than 90 days or more than 120 days prior to the first anniversary of the preceding year's annual meeting.
13
Our bylaws also provide certain requirements as to the form and content of a stockholder's notice. These provisions may preclude stockholders from bringing matters before an annual meeting of stockholders or from making nominations for directors at an annual meeting of stockholders. A stockholder's notice must set forth, among other things, as to each business matter or nomination the stockholder proposes to bring before the meeting:
- •
- the name and address of the stockholder and the beneficial owner, if any, on whose behalf the proposal or nomination is
made;
- •
- the class and number of shares that are owned of record and beneficially by the stockholder proposing the business or
nominating the nominee;
- •
- a representation that the stockholder giving the notice is a holder of record of shares of our voting stock entitled to
vote at such annual meeting and intends to appear in person or by proxy at the annual meeting to propose the business or nominate the person or persons specified in the notice, as applicable; and
- •
- whether such stockholder or beneficial owner intends to deliver a proxy statement and forms of proxy to holders of at least the percentage of shares of our voting stock required to approve such proposal or nominate such nominee or nominees.
If the stockholder is nominating a candidate for director, the stockholder's notice must also include the name, age, business address, residence address and occupation of the nominee proposed by the stockholder and the signed consent of the nominee to serve as a director on our board of directors if so elected. The candidate may also be required to present certain information and make certain representations and agreements at our request.
In addition, a stockholder must also comply with all applicable requirements of the Exchange Act and the rules and regulations under the Exchange Act with respect to matters relating to nomination of candidates for directors.
Amendment of Certificate of Incorporation
Except as otherwise provided by law or our certificate of incorporation, our certificate of incorporation may be amended, altered or repealed at a meeting of the stockholders provided that such amendment has been described or referred to in the notice of such meeting or a meeting of our board of directors.
Amendment of Bylaws
Except as otherwise provided by law, our certificate of incorporation or our bylaws, our bylaws may be amended, altered or repealed at a meeting of the stockholders provided that such amendment has been described or referred to in the notice of such meeting or a meeting of our board of directors, provided that no amendment adopted by the board of directors may vary or conflict with any amendment adopted by the stockholders in accordance with our certificate of incorporation or bylaws.
Transfer Agent and Registrar
Computershare Shareowner Services, LLC is the transfer agent and registrar for our common stock and preferred stock.
Listing
Our common stock is listed on the NYSE under the symbol "MCP." Our Series A Mandatory Convertible Preferred Stock is listed on the NYSE under the symbol "MCP-PA."
14
DESCRIPTION OF DEPOSITARY SHARES
General
We may offer depositary shares representing fractional shares of our preferred stock of any series. The following description sets forth certain general terms and provisions of the depositary shares that we may offer pursuant to this prospectus. The particular terms of the depositary shares, including the fraction of a preferred share that such depositary share will represent, and the extent, if any, to which the general terms and provisions may apply to the depositary shares so offered will be described in the applicable prospectus supplement.
The shares of preferred stock represented by depositary shares will be deposited under a depositary agreement between us and a bank or trust company that meets certain requirements and is selected by us, which we refer to as the bank depositary. Each owner of a depositary share will be entitled to all the rights and preferences of the shares of preferred stock represented by the depositary share. The depositary shares will be evidenced by depositary receipts issued pursuant to the depositary agreement. Depositary receipts will be distributed to those persons purchasing the fractional shares of preferred stock in accordance with the terms of the offering. The deposit agreement will also contain provisions relating to the manner in which any subscription or similar rights we offer to holders of the preferred stock will be made available to the holders of depositary shares.
The following description is a general summary of some common provisions of a depositary agreement and the related depositary receipts. The description below and in any prospectus supplement does not include all of the terms of the depositary agreement and the related depositary receipts. Copies of the form of depositary agreement and the depositary receipts relating to any particular issue of depositary shares will be filed with the SEC each time we issue depositary shares, and you should read those documents for provisions that may be important to you. For more information on how you can obtain copies of the forms of the depositary agreement and the related depositary receipts, see "Where You Can Find More Information."
Dividends and Other Distributions
If we pay a cash distribution or dividend on a series of preferred stock represented by depositary shares, the bank depositary will distribute these dividends to the record holders of these depositary shares. If the distributions are in property other than cash, the bank depositary will distribute the property to the record holders of the depositary shares. However, if the bank depositary determines that it is not feasible to make the distribution of property, the bank depositary may, with our approval, sell this property and distribute the net proceeds from this sale to the record holders of the depositary shares.
Redemption of Depositary Shares
If we redeem a series of preferred stock represented by depositary shares, the bank depositary will redeem the depositary shares from the proceeds received by the bank depositary in connection with the redemption. The redemption price per depositary share will equal the applicable fraction of the redemption price per share of the preferred stock. If fewer than all the depositary shares are redeemed, the depositary shares to be redeemed will be selected by lot or pro rata as the bank depositary may determine.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the preferred stock represented by depositary shares are entitled to vote, the bank depositary will mail the notice to the record holders of the depositary shares relating to the preferred stock. Each record holder of these depositary shares on
15
the record date (which will be the same date as the record date for the preferred stock) may instruct the bank depositary as to how to vote the preferred stock represented by this holder's depositary shares. The bank depositary will endeavor, insofar as practicable, to vote the amount of the preferred stock represented by such depositary shares in accordance with these instructions, and we will take all action which the bank depositary deems necessary in order to enable the bank depositary to do so. The bank depositary will abstain from voting shares of the preferred stock to the extent it does not receive specific instructions from the holders of depositary shares representing this preferred stock.
Amendment and Termination of the Depositary Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the depositary agreement may be amended by agreement between the bank depositary and us. However, any amendment that materially and adversely alters the rights of the holders of depositary shares will not be effective unless this amendment has been approved by the holders of at least a majority of the depositary shares then outstanding. The depositary agreement may be terminated by the bank depositary or us only if:
- •
- all outstanding depositary shares have been redeemed; or
- •
- there has been a final distribution in respect of the preferred stock in connection with any liquidation, dissolution or winding up of the Company and this distribution has been distributed to the holders of depositary receipts.
Charges of Bank Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the bank depositary in connection with the initial deposit of the preferred stock and any redemption of the preferred stock. Holders of depositary receipts will pay other transfer and other taxes and governmental charges and any other charges, including a fee for the withdrawal of shares of preferred stock upon surrender of depositary receipts, as are expressly provided in the depositary agreement to be for their accounts.
Withdrawal of Preferred Stock
Except as may be provided otherwise in the applicable prospectus supplement, upon surrender of depositary receipts at the principal office of the bank depositary, subject to the terms of the depositary agreement, the owner of the depositary shares may demand delivery of the number of whole shares of preferred stock and all money and other property, if any, represented by those depositary shares. Fractional shares of preferred stock will not be issued. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number of depositary shares representing the number of whole shares of preferred stock to be withdrawn, the bank depositary will deliver to this holder at the same time a new depositary receipt evidencing the excess number of depositary shares. Holders of preferred stock thus withdrawn may not thereafter deposit those shares under the depositary agreement or receive depositary receipts evidencing depositary shares therefor.
Miscellaneous
The bank depositary will forward to holders of depositary receipts all reports and communications from us that are delivered to the bank depositary and that we are required to furnish to the holders of preferred stock.
Neither the bank depositary nor we will be liable if we are prevented or delayed by law or any circumstance beyond our control in performing our obligations under the depositary agreement. The obligations of the bank depositary and us under the depositary agreement will be limited to
16
performance in good faith of our duties thereunder, and we will not be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or shares of preferred stock unless satisfactory indemnity is furnished. We may rely upon written advice of counsel or accountants, or upon information provided by persons presenting shares of preferred stock for deposit, holders of depositary receipts or other persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Bank Depositary
The bank depositary may resign at any time by delivering to us notice of its election to do so, and we may at any time remove the bank depositary. Any such resignation or removal will take effect upon the appointment of a successor bank depositary and the successor's acceptance of this appointment. The successor bank depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company meeting the requirements of the depositary agreement.
17
General
We may issue warrants for the purchase of common stock, preferred stock, depositary shares or debt securities. The following description sets forth certain general terms and provisions of the warrants that we may offer pursuant to this prospectus. The particular terms of the warrants and the extent, if any, to which the general terms and provisions may apply to the warrants so offered will be described in the applicable prospectus supplement.
Warrants may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.
A copy of the forms of the warrant agreement and the warrant certificate relating to any particular issue of warrants will be filed with the SEC each time we issue warrants, and you should read those documents for provisions that may be important to you. For more information on how you can obtain copies of the forms of the warrant agreement and the related warrant certificate, see "Where You Can Find More Information."
Debt Warrants
The prospectus supplement relating to a particular issue of warrants to issue debt securities will describe the terms of those warrants, including the following:
- •
- the title of the warrants;
- •
- the offering price for the warrants, if any;
- •
- the aggregate number of the warrants;
- •
- the designation and terms of the debt securities purchasable upon exercise of the warrants;
- •
- if applicable, the designation and terms of the debt securities that the warrants are issued with and the number of
warrants issued with each debt security;
- •
- if applicable, the date from and after which the warrants and any debt securities issued with them will be separately
transferable;
- •
- the principal amount of debt securities that may be purchased upon exercise of a warrant and the price at which the debt
securities may be purchased upon exercise;
- •
- the dates on which the right to exercise the warrants will commence and expire;
- •
- if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
- •
- whether the warrants represented by the warrant certificates or debt securities that may be issued upon exercise of the
warrants will be issued in registered or bearer form;
- •
- information relating to book-entry procedures, if any;
- •
- the currency or currency units in which the offering price, if any, and the exercise price are payable;
- •
- if applicable, a discussion of material United States federal income tax considerations;
- •
- anti-dilution provisions of the warrants, if any;
- •
- redemption or call provisions, if any, applicable to the warrants;
18
- •
- any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of
the warrants; and
- •
- any other information we think is important about the warrants.
Stock Warrants
The prospectus supplement relating to a particular issue of warrants to issue common stock, preferred stock or depositary shares will describe the terms of the common stock warrants, preferred stock warrants and depositary share warrants, including the following:
- •
- the title of the warrants;
- •
- the offering price for the warrants, if any;
- •
- the aggregate number of the warrants;
- •
- the designation and terms of the common stock, preferred stock or depositary shares that may be purchased upon exercise of
the warrants;
- •
- if applicable, the designation and terms of the securities that the warrants are issued with and the number of warrants
issued with each security;
- •
- if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately
transferable;
- •
- the number of shares of common stock or preferred stock or depositary shares that may be purchased upon exercise of a
warrant and the price at which the shares may be purchased upon exercise;
- •
- the dates on which the right to exercise the warrants commence and expire;
- •
- if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
- •
- the currency or currency units in which the offering price, if any, and the exercise price are payable;
- •
- if applicable, a discussion of material United States federal income tax considerations;
- •
- anti-dilution provisions of the warrants, if any;
- •
- redemption or call provisions, if any, applicable to the warrants;
- •
- any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of
the warrants; and
- •
- any other information we think is important about the warrants.
Exercise of Warrants
Each warrant will entitle the holder of the warrant to purchase at the exercise price set forth in the applicable prospectus supplement the number of shares of common stock, preferred stock or depositary shares or the principal amount of debt securities being offered. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants are void. Holders may exercise warrants as set forth in the prospectus supplement relating to the warrants being offered.
Until a holder exercises the warrants to purchase our common stock, preferred stock, depositary shares or debt securities, the holder will not have any rights as a holder of our common stock, preferred stock, depositary shares or debt securities, as the case may be, by virtue of ownership of warrants.
19
DESCRIPTION OF SUBSCRIPTION RIGHTS
We may issue to our stockholders subscription rights to purchase our common stock, preferred stock, depositary shares or debt securities. The following description sets forth certain general terms and provisions of the subscription rights that we may offer pursuant to this prospectus. The particular terms of the subscription rights and the extent, if any, to which the general terms and provisions may apply to the subscription rights so offered will be described in the applicable prospectus supplement.
Subscription rights may be issued independently or together with any other security offered by this prospectus and may or may not be transferable by the stockholder receiving the rights in the rights offering. In connection with any rights offering, we may enter into a standby underwriting agreement with one or more underwriters pursuant to which the underwriter will purchase any securities that remain unsubscribed for upon completion of the rights offering, or offer these securities to other parties who are not our stockholders. A copy of the form of subscription rights certificate will be filed with the SEC each time we issue subscription rights, and you should read that document for provisions that may be important to you. For more information on how you can obtain a copy of any subscription rights certificate, see "Where You Can Find More Information."
The applicable prospectus supplement relating to any subscription rights will describe the terms of the offered subscription rights, including, where applicable, the following:
- •
- the exercise price for the subscription rights;
- •
- the number of subscription rights issued to each stockholder;
- •
- the extent to which the subscription rights are transferable;
- •
- any other terms of the subscription rights, including terms, procedures and limitations relating to the exchange and
exercise of the subscription rights;
- •
- the date on which the right to exercise the subscription rights will commence and the date on which the right will expire;
- •
- the extent to which the subscription rights include an over-subscription privilege with respect to unsubscribed
securities; and
- •
- the material terms of any standby underwriting arrangement entered into by us in connection with the subscription rights offering.
20
DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of the debt securities. We will issue debt securities that will be senior debt under the senior debt indenture between us and Wells Fargo Bank, National Association, as senior debt trustee. We will issue debt securities that will be subordinated debt under the subordinated debt indenture between us and Wells Fargo Bank, National Association, as subordinated debt trustee. This prospectus refers to the senior debt indenture and the subordinated debt indenture individually as the indenture and collectively as the indentures. This prospectus refers to the senior debt trustee and the subordinated debt trustee individually as the trustee and collectively as the trustees. When we offer to sell a particular series of debt securities, we will describe the specific terms for the securities in a supplement to this prospectus. The prospectus supplement will also indicate whether the general terms and provisions described in this prospectus apply to a particular series of debt securities.
We have summarized certain terms and provisions of the indentures. The summary is not complete. The indentures have been filed as an exhibit to the registration statement for these securities that we have filed with the SEC. You should read the indentures for the provisions which may be important to you. The indentures are subject to and governed by the Trust Indenture Act of 1939, as amended. The indentures are substantially identical, except for the provisions relating to subordination. See "—Subordinated Debt."
Capitalized terms used in this section and not defined herein have the meanings specified in the indentures. When we refer to "Molycorp," "we," "our" and "us" in this section, we mean Molycorp, Inc. excluding, unless the context otherwise requires or as otherwise expressly stated, its subsidiaries.
Neither indenture will limit the amount of debt securities which we may issue. We may issue debt securities up to an aggregate principal amount as we may authorize from time to time. The prospectus supplement will describe the terms of any debt securities being offered, including:
- •
- classification as senior or subordinated debt securities;
- •
- ranking of the specific series of debt securities relative to other outstanding indebtedness, including subsidiaries'
debt;
- •
- if the debt securities are subordinated, the aggregate amount of outstanding indebtedness, as of a recent date, that is
senior to the subordinated securities, and any limitation on the issuance of additional senior indebtedness;
- •
- the designation, aggregate principal amount and authorized denominations;
- •
- the maturity date;
- •
- the interest rate, if any, and the method for calculating the interest rate;
- •
- the interest payment dates and the record dates for the interest payments;
- •
- any mandatory or optional redemption terms or prepayment, conversion, sinking fund or exchangeability or convertibility
provisions;
- •
- the place where we will pay principal and interest;
- •
- if other than denominations of $1,000 or multiples of $1,000, the denominations the debt securities will be issued in;
- •
- whether the debt securities will be issued in the form of global securities or certificates;
- •
- additional provisions, if any, relating to the defeasance of the debt securities;
21
- •
- the currency or currencies, if other than the currency of the United States, in which principal and interest will be paid;
- •
- any United States federal income tax consequences;
- •
- the dates on which premium, if any, will be paid;
- •
- our right, if any, to defer payment of interest and the maximum length of this deferral period;
- •
- any listing on a securities exchange;
- •
- the initial public offering price; and
- •
- other specific terms, including any additional events of default or covenants.
Senior Debt
We will issue under the senior debt indenture the debt securities that will constitute part of our senior debt. These senior debt securities will rank equally and pari passu with all other unsecured and unsubordinated debt of Molycorp.
Subordinated Debt
We will issue under the subordinated debt indenture the debt securities that will constitute part of our subordinated debt. These subordinated debt securities will be subordinate and junior in right of payment, to the extent and in the manner set forth in the subordinated debt indenture, to all "senior indebtedness" of Molycorp. The subordinated debt indenture defines "senior indebtedness" the principal of (and premium, if any) and interest on all debt of Molycorp whether created, incurred or assumed before, on or after the date of the subordinated debt indenture. "Senior indebtedness" does not include nonrecourse obligations, the subordinated debt securities, redeemable stock or any other obligations specifically designated as being subordinate in right of payment to senior indebtedness.
In general, the holders of all senior indebtedness are first entitled to receive payment of the full amount unpaid on senior indebtedness before the holders of any of the subordinated debt securities or coupons are entitled to receive a payment on account of the principal or interest on the indebtedness evidenced by the subordinated debt securities in certain events. These events include:
- •
- any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings
which concern Molycorp or a substantial part of its property;
- •
- a default having occurred for the payment of principal, premium, if any, or interest on or other monetary amounts due and
payable on any senior indebtedness or any other default having occurred concerning any senior indebtedness, which permits the holder or holders of any senior indebtedness to accelerate the maturity of
any senior indebtedness with notice or lapse of time, or both. Such an event of default must have continued beyond the period of grace, if any, provided for such event of default, and such an event of
default shall not have been cured or waived or shall not have ceased to exist; or
- •
- the principal of, and accrued interest on, any series of the subordinated debt securities having been declared due and payable upon an event of default pursuant to section 6.01 of the subordinated debt indenture. This declaration must not have been rescinded and annulled as provided in the subordinated debt indenture.
If this prospectus is being delivered in connection with a series of subordinated debt securities, the accompanying prospectus supplement or the information incorporated in this prospectus by reference will set forth the approximate amount of senior indebtedness outstanding as of the end of the most recent fiscal quarter.
22
Events of Default
Unless otherwise specified in the applicable prospectus supplement, when we use the term "Event of Default" in the indentures with respect to the debt securities of any series, here are some examples of what we mean:
(1) default in the payment of the principal of any debt security of such series when the same becomes due and payable at maturity, upon acceleration, redemption or mandatory repurchase, including as a sinking fund installment, or otherwise;
(2) default in the payment of interest on any debt security of such series when the same becomes due and payable, and such default continues for a period of 30 days;
(3) default in the performance of or breaches of any other covenant or agreement of Molycorp in either indenture with respect to any debt security of such series or in the debt security of such series and such default or breach continues for a period of 60 consecutive days or more after written notice to Molycorp by the trustee or to Molycorp and the trustee by the holders of 25% or more in aggregate principal amount of the debt securities of all series affected thereby specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" under the indenture;
(4) certain events of bankruptcy, insolvency, reorganization, administration or similar proceedings with respect to Molycorp or any material subsidiary;
(5) any other Events of Default set forth in the prospectus supplement.
If an Event of Default (other than an Event of Default specified in clause (4) with respect to Molycorp) under each indenture occurs with respect to the debt securities of any series and is continuing, then the trustee or the holders of at least 25% in principal amount of the outstanding debt securities of that series may, by written notice to us and also to the trustee if given by holders, require us to repay immediately the entire principal amount of the outstanding debt securities of that series (or such lesser amount as may be provided in the terms of the securities), together with all accrued and unpaid interest and premium, if any.
If an Event of Default under the indenture specified in clause (4) with respect to Molycorp occurs and is continuing, then the entire principal amount of the outstanding debt securities (or such lesser amount as may be provided in the terms of the securities) will automatically become due immediately and payable without any declaration or other act on the part of the trustee or any holder.
After a declaration of acceleration or any automatic acceleration under clause (4) described above, the holders of a majority in principal amount of outstanding debt securities of any series may rescind this accelerated payment requirement if all existing Events of Default, except for nonpayment of the principal and interest on the debt securities of that series that has become due solely as a result of the accelerated payment requirement, have been cured or waived and if the rescission of acceleration would not conflict with any judgment or decree. The holders of a majority in principal amount of the outstanding debt securities of any series also have the right to waive past defaults, except a default in paying principal or interest on any outstanding debt security, or in respect of a covenant or a provision that cannot be modified or amended without the consent of all holders of the debt securities of that series.
Holders of at least 25% in principal amount of the outstanding debt securities of a series may seek to institute a proceeding only after they have made written request, and offered indemnity satisfactory to the trustee to the trustee to institute a proceeding and the trustee has failed to do so within 60 days after it received this notice and offer of indemnity. In addition, within this 60-day period the trustee must not have received directions inconsistent with this written request by holders of a majority in principal amount of the outstanding debt securities of that series. These limitations do not apply,
23
however, to a suit instituted by a holder of a debt security for the enforcement of the payment of principal, interest or any premium on or after the due dates for such payment.
During the existence of an Event of Default, the trustee is required to exercise the rights and powers vested in it under the indenture and use the same degree of care and skill in its exercise as a prudent person would under the circumstances in the conduct of that person's own affairs. The trustee is not under any obligation to exercise any of its rights or powers at the request or direction of any of the holders unless the holders have offered to the trustee security or indemnity satisfactory to it. Subject to certain provisions, the holders of a majority in principal amount of the outstanding debt securities of any series have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust, or power conferred on the trustee.
The trustee will, within 90 days after any default occurs that is known to the trustee, give notice of the default to the holders of the debt securities of that series, unless the default was already cured or waived. Unless there is a default in paying principal, interest or any premium when due, the trustee can withhold giving notice to the holders if it determines in good faith that the withholding of notice is in the interest of the holders.
We are required to furnish to each trustee an annual statement as to compliance with all conditions and covenants under the indenture.
Modification and Waiver
Each indenture may be supplemented, or modified without the consent of any holder of debt securities in order to:
- •
- cure ambiguities, defects or inconsistencies;
- •
- provide for the assumption of our obligations in the case of a merger or consolidation;
- •
- establish the form or forms of debt securities of any series;
- •
- maintain the qualification of the indenture under the Trust Indenture Act;
- •
- evidence and provide for the acceptance of appointment under the indenture with respect to the debt securities of any or
all series by a successor trustee and to add to or change any of the provisions of each indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more
than one trustee;
- •
- provide for uncertificated or unregistered debt securities; and
- •
- make any change that does not materially and adversely affect the rights of any holder.
Other amendments and modifications of each indenture or the debt securities issued may be made with the consent of the holders of not less than a majority of the aggregate principal amount of the outstanding debt securities of each series affected by the amendment or modification. However, no modification or amendment may, without the consent of the holder of each outstanding debt security affected:
- •
- change the stated maturity of the principal of, or any sinking fund obligation or any installment of interest on, such
holder's debt security,
- •
- reduce the principal amount thereof or the rate of interest thereon;
- •
- reduce the above stated percentage of outstanding debt securities the consent of whose holders is necessary to modify or amend the indenture with respect to the debt securities of the relevant series; and
24
- •
- reduce the percentage in principal amount of outstanding debt securities of the relevant series the consent of whose holders is required for any supplemental indenture or for any waiver of compliance with certain provisions of the indenture or certain defaults and their consequences provided for in the indenture.
Covenants
Consolidation, Merger or Sale of Assets
Unless otherwise specified in the applicable prospectus supplement, we will not consolidate or combine with or merge with or into or, directly or indirectly, sell, assign, convey, lease, transfer or otherwise dispose of all or substantially all of our properties and assets to any person or persons in a single transaction or through a series of transactions, unless:
- •
- we shall be the continuing person or, if we are not the continuing person, the resulting, surviving or transferee person
(the "surviving entity") is a company organized and existing under the laws of the United States or any State or territory;
- •
- the surviving entity will expressly assume all of our obligations under the debt securities and each indenture, and will,
if required by law to effectuate the assumption, execute supplemental indentures which will be delivered to the trustees and will be in form and substance reasonably satisfactory to the trustees;
- •
- immediately after giving effect to such transaction or series of transactions on a pro forma basis, no default has
occurred and is continuing; and
- •
- we or the surviving entity will have delivered to the trustee an officers' certificate and opinion of counsel stating that the transaction or series of transactions and a supplemental indenture, if any, complies with this covenant and that all conditions precedent in the indenture relating to the transaction or series of transactions have been satisfied.
If any consolidation or merger or any sale, assignment, conveyance, lease, transfer or other disposition of all or substantially all of our assets occurs in accordance with the indentures, the successor corporation will succeed to, and be substituted for, and may exercise every right and power of Molycorp under the indentures with the same effect as if such successor corporation had been named as Molycorp. Except for (1) any lease or (2) any sale, assignment, conveyance, transfer, lease or other disposition to certain subsidiaries of Molycorp, we will be discharged from all obligations and covenants under the indentures and the debt securities.
Satisfaction, Discharge and Covenant Defeasance
Unless otherwise specified in the applicable prospectus supplement, we may terminate our obligations under each indenture, when:
- •
- either:
- •
- all debt securities of any series issued that have been authenticated and delivered have been delivered to the trustee for
cancellation; or
- •
- all the debt securities of any series issued that have not been delivered to the trustee for cancellation will become due and payable within one year (a "Discharge") and we have made irrevocable arrangements satisfactory to the trustee for the giving of notice of redemption by such trustee in our name, and at our expense and we have irrevocably deposited or caused to be deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal, interest and any premium;
25
- •
- we have paid or caused to be paid all other sums then due and payable under such indenture; and
- •
- we have delivered to the trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent under such indenture relating to the satisfaction and discharge of such indenture have been complied with.
Unless otherwise specified in the applicable prospectus supplement, we may elect to have our obligations under each indenture discharged with respect to the outstanding debt securities of any series ("legal defeasance"). Legal defeasance means that we will be deemed to have paid and discharged the entire indebtedness represented by the outstanding debt securities of such series under such indenture, except for:
- •
- the rights of holders of the debt securities to receive principal, interest and any premium when due;
- •
- our obligations with respect to the debt securities concerning issuing temporary debt securities, registration of transfer
of debt securities, Molycorp's right of optional redemption, mutilated, defaced, destroyed, lost or stolen debt securities and the maintenance of an office or agency for payment for security payments
held in trust;
- •
- the rights, obligations and immunities of the trustee; and
- •
- the defeasance provisions of the indenture.
In addition, unless otherwise specified in the applicable prospectus supplement, we may elect to have our obligations released with respect to certain covenants in each indenture ("covenant defeasance"). Any omission to comply with these obligations will not constitute a default or an event of default with respect to the debt securities of any series. In the event covenant defeasance occurs, certain events, not including non-payment, bankruptcy and insolvency events, described under "Events of Default" will no longer constitute an event of default for that series.
In order to exercise either legal defeasance or covenant defeasance with respect to outstanding debt securities of any series:
- •
- we must irrevocably have deposited or caused to be deposited with the trustee as trust funds for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely to the benefits of the holders of the debt securities of a series:
- •
- money in an amount;
- •
- U.S. Government Obligations; or
- •
- a combination of money and U.S. Government Obligations,
- •
- in the case of legal defeasance, we have delivered to the trustee an opinion of counsel stating that, under then applicable Federal income tax law, the holders of the debt securities of that series will not recognize gain or loss for federal income tax purposes as a result of the deposit, defeasance and discharge to be effected and will be subject to the same federal income tax as would be the case if the deposit, defeasance and discharge did not occur;
in each case sufficient without reinvestment, in the written opinion of an internationally recognized firm of independent public accountants delivered to the trustee, to pay and discharge, and which shall be applied by the trustee to pay and discharge, all of the principal, interest and any premium at due date or maturity or if we have made irrevocable arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name and at our expense, the redemption date;
26
- •
- in the case of covenant defeasance, we have delivered to the trustee an opinion of counsel to the effect that the holders
of the debt securities of that series will not recognize gain or loss for U.S. federal income tax purposes as a result of the deposit and covenant defeasance to be effected and will be subject to the
same federal income tax as would be the case if the deposit and covenant defeasance did not occur;
- •
- no default with respect to the outstanding debt securities of that series has occurred and is continuing at the time of
such deposit after giving effect to the deposit or, in the case of legal defeasance, no default relating to bankruptcy or insolvency has occurred and is continuing at any time on or before the
123rd day after the date of such deposit, it being understood that this condition is not deemed satisfied until after the 123rd day;
- •
- we must have delivered to the trustee an opinion of counsel to the effect that
- •
- if at such time the debt securities of such series are listed on a national securities exchange, Molycorp has delivered to
the trustee an opinion of counsel to the effect that the debt securities of such series will not be delisted as a result of such deposit, defeasance and discharge;
- •
- we have delivered to the trustee an officers' certificate and an opinion of counsel stating that all conditions precedent
with respect to the defeasance or covenant defeasance have been complied with; and
- •
- if the debt securities of such series are to be redeemed prior to the final maturity thereof (other than from mandatory sinking fund payments or analogous payments), notice of such redemption shall have been duly given pursuant to the indenture or provision therefor satisfactory to the trustee shall have been made.
(1) the creation of the defeasance trust does not violate the Investment Company Act of 1940 and
(2) after the 123rd day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;
Concerning our Relationship with the Trustee
We and our subsidiaries maintain ordinary banking relationships with Wells Fargo Bank, National Association. Wells Fargo Bank, National Association also serves as trustee under certain of our other indentures.
27
We may issue units comprising one or more securities described in this prospectus in any combination. The following description sets forth certain general terms and provisions of the units that we may offer pursuant to this prospectus. The particular terms of the units and the extent, if any, to which the general terms and provisions may apply to the units so offered will be described in the applicable prospectus supplement.
Each unit will be issued so that the holder of the unit also is the holder of each security included in the unit. Thus, the unit will have the rights and obligations of a holder of each included security. Units will be issued pursuant to the terms of a unit agreement, which may provide that the securities included in the unit may not be held or transferred separately at any time or at any time before a specified date. A copy of the forms of the unit agreement and the unit certificate relating to any particular issue of units will be filed with the SEC each time we issue units, and you should read those documents for provisions that may be important to you. For more information on how you can obtain copies of the forms of the unit agreement and the related unit certificate, see "Where You Can Find More Information."
The prospectus supplement relating to any particular issuance of units will describe the terms of those units, including, to the extent applicable, the following:
- •
- the designation and terms of the units and the securities comprising the units, including whether and under what
circumstances those securities may be held or transferred separately;
- •
- any provision for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the
units; and
- •
- whether the units will be issued in fully registered or global form.
28
We may sell the offered securities in and outside the United States:
- •
- through underwriters or dealers;
- •
- directly to purchasers;
- •
- in a rights offering;
- •
- in "at the market" offerings, within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market
maker or into an existing trading market on an exchange or otherwise;
- •
- through agents; or
- •
- through a combination of any of these methods.
The prospectus supplement will include the following information:
- •
- the terms of the offering;
- •
- the names of any underwriters or agents;
- •
- the name or names of any managing underwriter or underwriters;
- •
- the purchase price or initial public offering price of the securities;
- •
- the net proceeds from the sale of the securities;
- •
- any delayed delivery arrangements;
- •
- any underwriting discounts, commissions and other items constituting underwriters' compensation;
- •
- any discounts or concessions allowed or reallowed or paid to dealers; and
- •
- any commissions paid to agents.
Sale through Underwriters or Dealers
If underwriters are used in the sale, the underwriters will acquire the securities for their own account. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless we inform you otherwise in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers.
If we offer securities in a subscription rights offering to our existing security holders, we may enter into a standby underwriting agreement with dealers, acting as standby underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase on a standby basis. If we do not enter into a standby underwriting agreement, we may retain a dealer-manager to manage a subscription rights offering for us.
During and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include overallotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters may also impose a penalty bid, which means that selling concessions allowed to syndicate
29
members or other broker-dealers for the offered securities sold for their account may be reclaimed by the syndicate if the offered securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the offered securities, which may be higher than the price that might otherwise prevail in the open market. If commenced, the underwriters may discontinue these activities at any time.
Underwriters may be entitled under agreements entered into with us to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the underwriters may be required to make. Underwriters may be customers of, engage in transactions with, or perform services for us and our affiliates in the ordinary course of business.
Some or all of the securities that we offer though this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell our securities for public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any market making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any securities that we offer.
If dealers are used in the sale of securities, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. We will include in the prospectus supplement the names of the dealers and the terms of the transaction.
Direct Sales and Sales through Agents
We may sell the securities directly. In this case, no underwriters or agents would be involved. We may also sell the securities through agents designated from time to time at fixed prices or at varying prices determined at the time of sale. In the prospectus supplement, we will name any agent involved in the offer or sale of the offered securities, and we will describe any commissions payable to the agent. Unless we inform you otherwise in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. We will describe the terms of any sales of these securities in the prospectus supplement.
Remarketing Arrangements
Offered securities may also be offered and sold, if so indicated in the applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for us. Any remarketing firm will be identified and the terms of its agreements, if any, with us and its compensation will be described in the applicable prospectus supplement.
Delayed Delivery Contracts
If we so indicate in the prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities from us at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The prospectus supplement will describe the commission payable for solicitation of those contracts.
30
General Information
We may have agreements with the agents, dealers, underwriters and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments that the agents, dealers, underwriters or remarketing firms may be required to make. Agents, dealers, underwriters and remarketing firms may be customers of, engage in transactions with or perform services for us in the ordinary course of their businesses.
31
Jones Day will pass upon the validity of the securities being offered hereby.
The consolidated financial statements incorporated in this prospectus by reference to Molycorp, Inc.'s Current Report on Form 8-K dated August 16, 2012 and management's assessment of the effectiveness of internal control over financial reporting (which is included in Management's Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form 10-K of Molycorp, Inc. for the year ended December 31, 2011 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP which contains an explanatory paragraph on the effectiveness of internal control over financial reporting due to the exclusion of certain elements of the internal control over financial reporting of Molycorp Sillamäe and Molycorp Tolleson (businesses acquired by Molycorp, Inc. during 2011), an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Neo Material Technologies Inc. (now Molycorp Minerals Canada ULC) as of December 31, 2011, December 31, 2010 and January 1, 2010, and for each of the years in the two-year period ended December 31, 2011, and the consolidated financial statements of Neo Material Technologies Inc. (now Molycorp Minerals Canada ULC) as of December 31, 2010 and December 31, 2009 and for each of the years in the two-year period ended December 31, 2010, have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent chartered accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.
The information incorporated in this prospectus concerning estimates of our proven and probable REO reserves and non-reserve REO deposits for our Molycorp Mountain Pass facility was derived from the report of SRK Consulting (U.S.), Inc., independent mining consultants, and has been incorporated herein upon the authority of SRK Consulting as experts with respect to the matters covered by such report and in giving such report.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational reporting requirements of the Securities Exchange Act of 1934, or Exchange Act. We file reports, proxy statements and other information with the SEC. Our SEC filings are available over the Internet at the SEC's web site at http://www.sec.gov. You may read and copy any reports, statements and other information filed by us at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the Public Reference Room. You may also inspect our SEC reports and other information at our web site at http://www.molycorp.com. We do not intend for information contained in our web site to be part of this prospectus, other than documents that we file with the SEC that are incorporated by reference in this prospectus.
INFORMATION WE INCORPORATE BY REFERENCE
The SEC allows us to incorporate by reference the information we file with them, which means:
- •
- incorporated documents are considered part of this prospectus;
- •
- we can disclose important information to you by referring you to those documents; and
- •
- information that we file with the SEC after the date of this prospectus will automatically update and supersede the information contained in this prospectus and incorporated filings.
32
We incorporate by reference the documents listed below that we filed with the SEC under the Exchange Act:
- •
- our Annual Report on Form 10-K for the fiscal year ended December 31, 2011;
- •
- our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2012 and June 30, 2012;
- •
- our Current Reports on Form 8-K filed on February 2, 2012, February 8, 2012, March 5, 2012,
March 9, 2012, March 14, 2012, May 14, 2012 (Film No. 12836519), May 18, 2012, May 30, 2012, June 6, 2012, June 7, 2012, June 11, 2012,
June 12, 2012, June 15, 2012, August 7, 2012 and August 16, 2012 ; and
- •
- the description of our common stock contained in the Current Report on Form 8-K/A filed on July 21, 2010, including any subsequently filed amendments and reports updating such description.
Our Current Report on Form 8-K filed on August 16, 2012 updates and supersedes Items 6, 7, 8 and 15 of our Annual Report on Form 10-K for the year ended December 31, 2011.
We also incorporate by reference each of the documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this prospectus and prior to the termination of the offerings under this prospectus and any prospectus supplement. We will not, however, incorporate by reference in this prospectus any documents or portions thereof that are not deemed "filed" with the SEC, including any information furnished pursuant to Item 2.02 or Item 7.01 of our Current Reports on Form 8-K after the date of this prospectus unless, and except to the extent, specified in such Current Reports.
We will provide you with a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically incorporated by reference into the filing requested) at no cost, if you submit a request to us by writing or telephoning us at the following address and telephone number:
Molycorp, Inc.
5619 Denver Tech Center Parkway
Suite 1000
Greenwood Village, Colorado 80111
Telephone Number: (303) 843-8040
33