UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K/A
Amendment No. 1
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2006
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Or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
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Commission file number
001-32312
Novelis Inc.
(Exact name of registrant as
specified in its charter)
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Canada
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98-0442987
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(State or other jurisdiction
of
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(I.R.S. Employer
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incorporation or
organization)
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Identification No.)
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3399 Peachtree Road NE;
Suite 1500
Atlanta, Georgia
(Address of principal
executive offices)
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30326
(Zip
Code)
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(404) 814-4200
(Registrants telephone
number, including area code)
Securities registered pursuant to Section 12(b) of the
Securities Exchange Act of 1934:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Shares, no par value
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New York Stock Exchange
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Common Share Purchase Rights
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934:
None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the
Act. Yes o No þ
Indicate by check mark whether the registrant: (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past
90 days. Yes þ No
o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of the registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer or a non-accelerated
filer. See definition of accelerated filer and large accelerated
filer in
Rule 12b-2
of the Exchange Act.
Large accelerated
filer þ Accelerated
filer o Non-accelerated
filer o
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the
Act). Yes o No þ
The aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant as of
June 30, 2006 was approximately $1,595,561,800 based on the
closing price of the registrants common shares on the New
York Stock Exchange on such date. All executive officers and
directors of the registrant have been deemed, solely for the
purpose of the foregoing calculation, to be affiliates of the
registrant.
As of March 20, 2007, the registrant had 75,350,963 common
shares outstanding.
EXPLANATORY
NOTE
This Amendment No. 1 on
Form 10-K/A
amends our Annual Report on
Form 10-K
for the year ended December 31, 2006, initially filed with
the Securities and Exchange Commission (SEC) on March 1,
2007, to include Part III Items 10 through 14,
which were not included in our definitive proxy statement within
the required
120-day
period. Item 15 of Part IV of the original
Form 10-K
has also been amended to contain currently dated certifications
from our Acting Chief Executive Officer and Chief Financial
Officer containing the certifications required by SEC rules.
Unless otherwise specifically identified as the original
Form 10-K
or the
Form 10-K/A,
any references to the
Form 10-K
made throughout this document shall refer to the
Form 10-K
filed with the SEC on March 1, 2007, as amended.
PART III
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Item 10.
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Directors
and Executive Officers of the Registrant
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Our
Directors
Our Board of Directors is currently comprised of
13 directors. Our directors terms will expire at each
annual shareholders meeting. Biographical details for each of
our directors are set forth below.
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Name
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Director Since
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Age
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Position
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William T. Monahan
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January 6, 2005
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58
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Chairman of the Board and Former
Interim Chief Executive Officer
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Edward A. Blechschmidt
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June 29, 2006
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Director and Acting Chief
Executive Officer
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Charles G. Cavell(2)(3)
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January 6, 2005
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64
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Director
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Clarence J. Chandran(3)(4)
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January 6, 2005
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Director
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C. Roberto Cordaro(1)(3)(4)
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January 6, 2005
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Director
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Helmut Eschwey(2)(3)
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January 6, 2005
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Director
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David J. FitzPatrick(1)(2)
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March 24, 2005
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53
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Director
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Suzanne Labarge(1)(4)
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January 6, 2005
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60
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Director
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Patrick J. Monahan(4)
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December 26, 2006
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Director
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Sheldon Plener(2)
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December 26, 2006
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Director
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Rudolf Rupprecht(4)
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January 6, 2005
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Director
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Kevin M. Twomey(1)(2)
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May 25, 2006
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60
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Director
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Edward V. Yang(3)(4)
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January 6, 2005
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61
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Director
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(1) |
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Member of our Audit Committee. |
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(2) |
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Member of our Nominating and Corporate Governance Committee. |
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(3) |
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Member of our Human Resources Committee. |
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(4) |
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Member of our Customer Relations Committee. |
William T. Monahan is Chairman of our Board of Directors
and from August 29, 2006 to December 31, 2006, served
as our Interim Chief Executive Officer. Mr. Monahan is the
retired chairman and chief executive officer of Imation
Corporation (imaging and data storage), where he served in that
capacity from its spin-off from 3M Co. (industrial, medical,
consumer and office products) in 1996 to May 2004. Prior to
that, he held numerous executive positions at 3M, including
Group Vice President, Senior Vice President of 3M Italy and Vice
President of the data storage division. Mr. Monahan is a
member of the Board of Directors of Pentair, Inc. (water
industry), Hutchinson Technology Inc. (computer industry) and
Mosaic, Inc. (chemicals). William T. Monahan and Patrick J.
Monahan (Director) are not related.
Edward A. Blechschmidt is a Director and was appointed
Acting Chief Executive Officer of Novelis Inc. effective
January 2, 2007, to take over the responsibilities from
Interim Chief Executive Officer, William T. Monahan.
Mr. Blechschmidt was Chairman, Chief Executive Officer and
President of Gentiva Health Services, Inc., a leading provider
of specialty pharmaceutical and home health care services, from
March 2000 to June 2002. From March 1999 to March 2000,
Mr. Blechschmidt served as Chief Executive Officer and a
director of Olsten Corporation, the conglomerate from which
Gentiva Health Services was spun off and taken public. He served
as President of Olsten Corporation (staffing services) from
October 1998 to March 1999. He also served as President and
Chief Executive Officer of Siemens Nixdorf Americas and Siemens
Pyramid Technologies (information technology) from July 1996 to
October 1998. Prior to Siemens, he spent more than 20 years
with Unisys Corporation (information technology), including
serving as its Chief Financial Officer. Mr. Blechschmidt
serves as a director of Healthsouth Corp. (healthcare),
Lionbridge Technologies, Inc. (software), Option Care, Inc.
(healthcare) and Columbia Laboratories, Inc. (pharmaceuticals).
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Charles G. Cavell is a retired former President and Chief
Executive Officer of Quebecor World Inc., one of the
worlds largest commercial printers, with plants throughout
Europe, South America and North America. He served in such
capacity from 1989 to his retirement in 2003. He currently
serves on the board of several private companies and charitable
institutions and he is Vice Chairman of the Board of Governors
of Concordia University.
Clarence J. Chandran is Chairman of the Chandran Family
Foundation Inc. (health care research and education). He is a
director of Marfort Deep Sea Technologies Inc. and is a past
director of Alcan Inc. and MDS Inc. He retired as President,
Business Process Services, of CGI Group Inc. (information
technology) in 2004 and retired as Chief Operating Officer of
Nortel Networks Corporation (communications) in 2001.
Mr. Chandran is a member of the Duke University Board of
Visitors and the Strategic Plan Executive Committee of the Pratt
School of Engineering at Duke.
C. Roberto Cordaro has been President and Chief
Executive Officer and a member of the Board of Directors of
Nuvera Fuel Cells, Inc. (fuel cell power systems manufacturing)
since 2002. He was Chief Executive Officer of Motor Coach
Industries International (coach manufacturing) from 2000 to 2001
and was Executive Vice President and Group President
Automotive of Cummins Inc. (engine manufacturing) from 1996 to
1999.
Helmut Eschwey has been Chairman of the Board of
Management of Heraeus Holding GmbH (precious metals) in Germany
since 2003. From 1994 to 2003, Dr. Eschwey was the head of
the plastics technology business at SMS AG (engineering). Before
he joined SMS AG, he held management positions at Freudenberg
Group of Companies (industrial products), Pirelli & C.
S.P.A. (tires) and the Henkel Group (chemicals).
David J. FitzPatrick was the senior advisor to the chief
executive officer of Tyco International Ltd. (Tyco) (fire,
security, electronics, healthcare and other industrial products)
from March 2005 until December 2005, at which time he retired.
Previously, he was Executive Vice President and Chief Financial
Officer of Tyco, a post he held from September 2002 until March
2005. He was Senior Vice President and Chief Financial Officer
of United Technologies Corporation (aerospace and building) from
June 1998 until September 2002.
Suzanne Labarge retired in 2004 from her position as Vice
Chairman and Chief Risk Officer of the Royal Bank of Canada,
which she held since 1999. She was Executive Vice President,
Corporate Treasury, of the Royal Bank of Canada from 1995 to
1998. She is a member of the Board of Governors of McMaster
University.
Patrick J. Monahan has been a Professor of Law at Osgoode
Hall Law School since 1982 and was appointed Dean in 2003.
Additionally, he is an Affiliated Scholar with Davies Ward
Phillips & Vineberg LLP, providing legal advice and
opinions to leading Canadian corporations and private sector
organizations. He is also a member of the Board of Governors of
the Law Commission of Ontario. Mr. Monahan holds a Master
of Laws degree from Harvard University and a Bachelor of Laws
degree from Osgoode Hall Law School, as well as a Master of Arts
degree from Carleton University and a Bachelor of Arts from the
University of Ottawa. Patrick J. Monahan and William T. Monahan
(Chairman of the Board) are not related.
Sheldon Plener joined Cassels Brock & Blackwell
in 1978 and became a partner in 1983 in the Business Law
Practice Group. He is currently a member of the firms
Executive Committee and Chair of its Audit Committee, and has
been lead counsel to public and private clients in a broad range
of industries. He is also a director of Biovail Corporation, the
largest publicly traded pharmaceutical company in Canada, and
serves as Chair of its Risk and Compliance Committee. As well,
Mr. Plener is an Alternate National Hockey League Governor
representing the Ottawa Senators Hockey Team and is counsel to
Ronald McDonald House Toronto and the Canadian Breast Cancer
Foundation.
Rudolf Rupprecht was the chairman of the executive board
of MAN AG (mechanical engineering and trucks), in Germany from
1996 until the end of 2004, at which time he retired. Prior to
that, Dr. Rupprecht was chairman of various supervisory
boards within that company which he joined in 1966.
Dr. Rupprecht is also a member of the supervisory boards of
Salzgitter AG (steel mill), MAN AG, KME AG (copper
manufacturer), Karl Augustin Spedition Logistik and Transport
GmbH and Bayerische Staatsforsten (forestry and related
products) and is the chairman of the supervisory board of SMS
GmbH (steel mill equipment).
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Kevin M. Twomey recently retired as President and Chief
Operating Officer of The St. Joe Company (real estate), having
joined the company in 1999. He served as a consultant to the St.
Joe Company until December of 2006. Mr. Twomey formerly
served as Vice Chairman and Chief Financial Officer of H.F.
Ahmanson & Company and its principal subsidiary, Home
Savings of America (financial services). Prior to joining
Ahmanson in 1993, Mr. Twomey was Chief Financial Officer at
First Gibraltar Bank, owned by MacAndrews and Forbes Holdings of
New York. Mr. Twomey also held management positions with
MCorp and Bank of America. Mr. Twomey is a trustee of the
University of North Florida and serves on the board of trustees
of the United Way of Northeast Florida and the Schultz Center
for Teaching and Leadership Executive Board. Mr. Twomey is
also a member of the board of Trustees of the U.S. Navy
Supply Corps Foundation. Mr. Twomey is a director of
PartnerRe Ltd. (reinsurance) and Intergraph Corporation
(computer software).
Edward V. Yang has been Chairman of Cross Shore
Acquisition Corporation (service outsourcing) since April 2006.
From 2001 to 2006 he has been a senior advisor at ING Barings
Private Equity Partners Asia (financial services). He was
formerly Vice Chairman and Chief Executive Officer of the
Netstar Group (network management services) from 2002 to 2006.
Prior to this role, Mr. Yang was also a corporate senior
vice president and the president of Asia Pacific at Electronic
Data Systems Corporation (information technology outsourcing)
from 1992 to 2000.
Our
Executive Officers
The information required as to executive officers is set forth
in Part I, Item 1, Business Our Executive
Officers, in the original
Form 10-K.
Board of
Directors and Corporate Governance Matters
We are committed to the highest levels of corporate governance
practices, which we believe are essential to our success and to
the enhancement of shareholder value. Our shares are listed on
the Toronto Stock Exchange and the New York Stock Exchange, and
we make required filings with the Canadian and
U.S. securities regulators. We make these filings available
on our website at www.novelis.com as soon as reasonably
practicable after they are electronically filed. We are subject
to a variety of corporate governance and disclosure
requirements. Our corporate governance practices meet the
Toronto Stock Exchange Corporate Governance Guidelines (TSX
Guidelines), the New York Stock Exchange rules and other
applicable regulatory requirements to ensure transparency and
effective governance of the Company.
Our Board of Directors regularly reviews corporate governance
practices in light of developing requirements in this field. As
new provisions come into effect, our Board of Directors will
reassess our corporate governance practices and implement
changes as and when appropriate. The following is an overview of
our corporate governance practices.
Novelis
Board of Directors
Our Board of Directors has the responsibility for stewardship of
Novelis Inc., including the responsibility to ensure that we are
managed in the interest of our shareholders as a whole, while
taking into account the interests of other stakeholders. Our
Board of Directors supervises the management of our business and
affairs and discharges its duties and obligations in accordance
with the provisions of: (1) the Canada Business
Corporations Act (CBCA); (2) our articles of incorporation
and bylaws; (3) the charters of our Board of Directors and
its committees; and (4) other applicable legislation and
company policies.
Our corporate governance practices require that, in addition to
its statutory duties, the following matters be subject to our
Board of Directors approval: (1) capital expenditure
budgets and significant investments and divestments;
(2) our strategic and value-maximizing plans; (3) the
number of directors within the limits provided in our articles
of incorporation; and (4) any matter which may have the
potential for substantial impact on our Company. Our Board of
Directors reviews the composition and size of our Board of
Directors once a year. All new directors will receive a Board of
Directors manual containing a record of historical public
information about the Company, as well as the charters of our
Board of Directors and its committees, and other
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relevant corporate and business information. Senior management
makes regular presentations to our Board of Directors on the
main areas of our business. Directors are invited to tour our
various facilities.
Corporate
Governance Guidelines
Our Board of Directors has adopted a charter that establishes
various corporate governance guidelines relating to, among other
things, the composition and organization of the Board of
Directors, the duties and responsibilities of the Board of
Directors and the resources and authority of the Board of
Directors (the Board of Directors Charter). Under the Board of
Directors Charter, which is available on our website at
www.novelis.com and is available in print from our Corporate
Secretary upon request, every meeting of the Board of Directors
is to be followed by an executive session at which no executive
directors or other members of management are present. These
executive sessions are designed to ensure free and open
discussion and communication among the non-management directors.
The chairman of the Board of Directors leads these meetings.
Mr. Monahan currently serves as chairman. Shareholders and
other interested parties may communicate with the Board of
Directors, a committee or an individual director by writing to
Novelis Inc., 3399 Peachtree Rd. NE, Suite 1500, Atlanta,
GA 30326, Attention: Corporate Secretary Board
Communication. All such communications will be compiled by the
Corporate Secretary and submitted to the appropriate director or
board committee. The Corporate Secretary will reply or take
other actions in accordance with instructions from the
applicable board contact.
Independence
of Our Board of Directors
To assist in determining the independence of its members, our
Board of Directors has established Guidelines on the
Independence of the Directors of Novelis Inc. (Guidelines on
Independence). The definition of an Independent Director under
the Guidelines on Independence, which is available on our
website at www.novelis.com and is available in print from our
Corporate Secretary upon request, encompasses both the
definition of an unrelated director within the meaning of the
TSX Guidelines and of an independent director within the meaning
of the rules of the New York Stock Exchange. Such a director:
(1) must not have any relationship with us or any of our
employees which is likely to be perceived to interfere with the
exercise of his or her judgment in a manner that is independent
from management; and (2) must not have an interest or
relationship which could reasonably be perceived to materially
interfere with his or her ability to act in the best interests
of our Company (an Independent Director). Under the Guidelines
on Independence, the following relationships generally will be
considered not to be material relationships that would impair a
directors independence: (1) if a director is an
officer, partner or significant shareholder in an entity that
does business with us and the annual sales or purchases, for
goods or services, to or from us are less than two percent of
the consolidated gross annual revenues of that entity;
(2) if a director is a limited partner, a non-managing
member or occupies a similar position in an entity that does
business with us, or has a shareholding in such entity which is
not significant, and who, in each case, has no active role in
sales to or in providing services to us and derives no direct
material personal benefit from the same; and (3) if a
director serves as an officer, director or trustee of a
charitable organization and our charitable contributions to the
organization are less than two percent of that
organizations total consolidated gross annual revenues.
For purposes of the Guidelines on Independence, a significant
shareholding means direct or indirect beneficial ownership of
five percent or more of the outstanding equity or voting rights
of the relevant entity. Our Board of Directors has determined
that all members of the Board of Directors during fiscal 2006,
with the exception of William T. Monahan, our Chairman and
Former Interim Chief Executive Officer, and Brian W. Sturgell,
our Former Chief Executive Officer, were Independent Directors.
The Guidelines on Independence establish standards for members
of our Audit, Human Resources and Nominating and Corporate
Governance Committees. These standards comply with the audit
committee member independence qualifications under the
U.S. Sarbanes-Oxley Act of 2002 (SOX). To satisfy the SOX
audit committee qualifications, a director must not, directly or
indirectly, accept any consulting, advisory or other
compensatory fee from us (except in his or her capacity as
director) and may not be an affiliated person of our Company or
any subsidiary other than in his or her capacity as a member of
our Board of Directors or any committee of our Board of
Directors.
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Committees
of Our Board of Directors
Our Board of Directors has established four standing committees:
the Audit Committee, the Nominating and Corporate Governance
Committee, the Human Resources Committee and the Customer
Relations Committee. Each committee is governed by its own
charter which is available on our website at www.novelis.com and
is available in print from our Corporate Secretary upon request.
All four standing committees are required to be composed
entirely of Independent Directors.
According to their authority as set out in their charters, our
board and each of its committees may engage outside advisors at
the expense of Novelis.
Audit
Committee and Financial Experts
Our Board of Directors has a separately-designated standing
Audit Committee established in accordance with
Section 3(a)(58)(A) of the Exchange Act, the requirements
of the Canadian Business Corporations Act (CBCA) and the New
York Stock Exchange and Toronto Stock Exchange rules. Our Board
of Directors has determined that David J. FitzPatrick, Suzanne
Labarge and Kevin M. Twomey are Audit Committee financial
experts as defined by the rules of the SEC and that each member
of our Audit Committee is an Independent Director within the
meaning of the applicable New York Stock Exchange and Toronto
Stock Exchange listing standards.
Our Audit Committees main objective is to assist our Board
of Directors in fulfilling its oversight responsibilities for
the integrity of our financial statements, our compliance with
legal and regulatory requirements, the qualifications and
independence of our independent registered public accounting
firm and the performance of both our internal audit function and
our independent registered public accounting firm. Under the
Audit Committee charter, the Audit Committee is responsible for,
among other matters:
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evaluating and compensating our independent registered public
accounting firm;
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making recommendations to the board and shareholders relating to
the appointment, retention and termination of our independent
registered public accounting firm;
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discussing with our independent registered public accounting
firm their independence from management;
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reviewing with our independent registered public accounting firm
the scope and results of their audit;
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pre-approving all audit and permissible non-audit services to be
performed by our independent registered public accounting firm;
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overseeing the financial reporting process and discussing with
management and our independent registered public accounting firm
the interim and annual financial statements that we file with
the SEC; and
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reviewing and monitoring our accounting principles, accounting
policies and disclosure, internal control over financial
reporting and disclosure controls and procedures.
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Our Audit Committee will also assist us in ensuring that our
process for monitoring compliance with, and dealing with
violations of, our Code of Conduct, which is described below, is
established and updated. In particular, our Audit Committee has
established procedures in relation to complaints or concerns
that we may receive involving accounting, internal accounting
controls or audit matters, including the anonymous handling
thereof. Such procedures are available at www.novelis.com under
our Code of Conduct.
Nominating
and Corporate Governance Committee
Our Nominating and Corporate Governance Committee has the broad
responsibility of regularly reviewing our corporate governance
practices in general. Our Nominating and Corporate Governance
Committee is composed entirely of Independent Directors.
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In addition to its responsibilities for the design,
implementation, review, and evaluation of our corporate
governance policies and practices, our Nominating and Corporate
Governance Committee oversees the composition and size of our
Board of Directors. The committee reviews candidates for
nomination as directors and recommends candidates for election
to our Board of Directors. The committee also considers nominees
submitted by shareholders to our Corporate Secretary. You may
submit director nominations in writing to Novelis Inc., 3399
Peachtree Road, NE Suite 1500, Atlanta, Georgia, 30326,
Attention: Corporate Secretary.
In identifying and evaluating candidates for nomination to our
Board of Directors, our Nominating and Corporate Governance
Committee considers several factors, including judgment,
independence, skill, diversity and experience with businesses
and other organizations of comparable size, and the requirement
that, as a federal Canadian corporation, at least 25% of our
directors must be resident Canadians. The qualifications and
backgrounds of prospective candidates are reviewed in the
context of the current composition of the Board of Directors to
ensure it maintains the proper balance of knowledge, experience
and diversity to effectively manage our business for the
long-term interests of our shareholders. Our Nominating and
Corporate Governance Committee is allowed to employ search firms
for identifying and evaluating director nominees.
Our Nominating and Corporate Governance Committee assesses and
ensures on an annual basis the effectiveness of our Board of
Directors as a whole, of each committee of our Board of
Directors and the contribution of individual directors. Each
director will complete a survey of board effectiveness on an
annual basis which we anticipate will cover the subjects under
the categories of board composition, responsibility, meetings
and committees. As part of this survey, each of our directors
will be asked to complete a self-evaluation and an evaluation of
the Board of Directors as a whole and its committees. Our
Nominating and Corporate Governance Committee also assesses our
boards relationship with management.
Human
Resources Committee
Our Human Resources Committee has the broad responsibility to
review human resources policy and employee relations matters and
makes recommendations with respect to such matters to our Board
of Directors or our chief executive officer, as appropriate. Our
Human Resources Committee is composed entirely of Independent
Directors. Its specific roles and responsibilities are set out
in its charter. Our Human Resources Committee will periodically
review the effectiveness of our overall management organization
structure and succession planning for senior management, review
recommendations for the appointment of executive officers, and
consider and make recommendations to our Board of Directors
based on trends and developments in the area of human resource
management.
Our Human Resources Committee will establish our general
compensation philosophy and oversee the development and
implementation of compensation policies and programs. It also
will review and approve the level of
and/or
changes in the compensation of individual executive officers,
except that in the case of the chief executive officer and chief
operating officer, it will make recommendations regarding
compensation and objectives to the Board of Directors, in each
case taking into consideration individual performance and
competitive compensation practices.
Our Human Resources Committee has the responsibility of
reviewing our policies, management practices and performance in
environment, health and safety matters and making
recommendations to our Board of Directors on such matters in
light of current and changing requirements. Our Human Resources
Committee will also review, assess and provide advice to our
Board of Directors on policy, legal, regulatory and consumer
trends and developments related to the environment, as they
impact us, our employees, businesses, processes and products.
Customer
Relations Committee
In an advisory capacity, our Customer Relations Committee
reviews information furnished by management, provides advice and
counsel, and serves as a conduit for communications with our
Board of Directors for the purposes of deepening our
boards understanding of: (1) key end-use markets
served by us; (2) our existing and prospective customers in
such markets; (3) the nature of our relationships with such
customers (and efforts to further develop such relationships);
(4) the needs of, and trends facing, our customers and key
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end-use markets; (5) the fact base regarding flat rolled
products markets and competitive environments that, in the
foreseeable future, may be served by the Company; and
(6) our efforts to identify and implement best practices in
the areas of marketing and sales.
Code
of Ethics and Code of Conduct
Novelis has adopted a Code of Ethics for Senior Financial
Officers (Code of Ethics) that applies to our senior financial
officers including our chief executive officer, chief financial
officer and controller. We have also adopted a Code of Conduct
that governs all our employees as well as our directors. As an
annex to the Code of Conduct and supplemental thereto, we have
adopted additional standards specifically tailored to our
business operations around the globe. Copies of the Code of
Ethics and Code of Conduct are available on our website at
www.novelis.com. We will promptly disclose any future amendments
to these codes on our website as well as any waivers from these
codes for executive officers and directors. Copies of these
codes are also available in print from our Corporate Secretary
upon request.
We have also established whistleblower procedures so that an
employee can anonymously report concerns that he or she may have
regarding compliance with corporate policies, the Code of
Conduct, the Code of Ethics, applicable laws or auditing,
internal accounting controls and accounting matters. These
procedures are part of the Code of Conduct.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires our directors, executive officers, and persons who own
more than 10% of our common stock, to file reports of ownership
and changes in ownership of our common stock with the SEC.
Based solely upon a review of the copies of such reports filed
with the SEC, and on written representations from our reporting
persons, we believe that all Section 16(a) filing
requirements applicable to our directors, executive officers and
persons who own more than 10% of our common stock were complied
with during 2006, with the following exception. A reporting
deadline was missed that resulted in a late Form 4 filing
with respect to each of our executive officers. On
October 26, 2006, immediately following the adoption of the
Novelis 2006 Incentive Plan by our shareholders, the Board of
Directors authorized the grant of certain long term incentives
in the form of non-qualified stock options and stock
appreciation rights with an effective date of October 26,
2006 for executive officers and other employees. Because award
letters were not finalized until on or about October 31,
2006, the Form 4s filed with respect to the grant for
executive officers were late.
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Item 11.
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Executive
Compensation
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The following discussion of executive compensation contains
descriptions of various employee benefit plans and
employment-related agreements. These descriptions are qualified
in their entirety by reference to the full text or detailed
descriptions of the plans and agreements, which are filed as
exhibits to, or incorporated by reference into, this Annual
Report on
Form 10-K/A.
8
Compensation
Discussion and Analysis
Introduction
This section provides a discussion of the background and
objectives of our compensation programs for senior management
and a discussion of all material elements of the compensation of
each of the named executive officers for 2006 identified in the
following table, whom we refer to as our named executive
officers. The named executive officers are determined in
accordance with SEC rules, and include (1) the persons that
served as our principal executive officer and principal
financial officer during any part of 2006, (2) the four
other highest paid executive officers that were employed on
December 31, 2006 and (3) two other executive officers
who were no longer our employees on December 31, 2006.
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Name
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Title
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William T. Monahan
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Former Interim Chief Executive
Officer
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Brian W. Sturgell
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Former President & Chief
Executive Officer
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Rick Dobson
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Senior Vice President &
Chief Financial Officer
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Geoffrey Batt
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Former Senior Vice
President & Chief Financial Officer
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Martha Finn Brooks
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Chief Operating Officer
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John F. Morrison
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Senior Vice President and
President Asia
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Arnaud de Weert
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Senior Vice President and
President Europe
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Kevin Greenawalt
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Senior Vice President and
President North America
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Christopher Bark-Jones
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Former Senior Vice President and
President Europe
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Pierre Arseneault
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Former Vice President Strategic
Planning & IT
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Human
Resources Committee and Role of Management
The Human Resources Committee of our Board of Directors (the
Committee) has the responsibility for approving the compensation
programs for our named executive officers and making decisions
regarding specific compensation to be paid or awarded to them.
The Committee is comprised solely of Independent Directors and
acts pursuant to a charter approved by our board, which is
reviewed annually.
Our Vice President for Human Resources serves as the management
liaison officer for the Committee. Our human resources and legal
departments provide assistance to the Committee in connection
with administration of the Committees responsibilities,
such as setting meetings and assembling and distributing
materials for Committee meetings.
Our named executive officers have no direct role in setting
their own compensation. The Committee, however, normally meets
with our Chief Executive Officer to evaluate performance against
pre-established goals and the Chief Executive Officer makes
recommendations to the board regarding budgets, which affect
certain goals. Our Chief Executive Officer also makes
recommendations regarding compensation matters related to other
named executive officers and provides input regarding executive
compensation programs and policies generally.
Management also assists the Committee by providing information
needed or requested by the Committee or its compensation
consultant (such as our performance against budget and
objectives, historic compensation, compensation expense, stock
plan utilization, our policies and programs, peer companies) and
by providing input and advice regarding compensation programs
and policies and their impact on the Company and its executives.
9
Objectives
and Design of Our Compensation Program
Our executive compensation program is designed to attract,
retain, and reward talented executives who can contribute to our
long-term success and thereby build value for our shareholders.
The program is organized around three fundamental principles:
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Provide Total Direct Compensation Opportunities That Are
Competitive: To enable us to attract, motivate
and retain qualified executives, total direct compensation
opportunities for each executive (base pay, short-term (annual)
incentives and long-term incentives) are targeted at levels to
be competitive with similar positions at comparable companies.
The Committee strives to create a total direct compensation
package that is at the median of the peer companies described
below.
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A Substantial Portion Of Total Direct Compensation Should Be
At Risk Because It Is Performance-Based: We
believe executives should be rewarded for their performance.
Consequently, a substantial portion of an executives total
direct compensation should be at risk, with amounts actually
paid dependent on performance against pre-established objectives
for the individual and us. The proportion of an
individuals total direct compensation that is based upon
these performance objectives should increase as the
individuals business responsibilities increase.
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A Substantial Portion of Total Direct Compensation Should Be
Delivered in the Form of Equity-Based Awards: We
believe an equity stake in Novelis effectively aligns executive
and shareholder interests and provides motivation for enhancing
shareholder value. As a result, we may provide stock options,
restricted stock or stock units, performance shares and stock
appreciation rights (as well as other awards paid in cash or
equity).
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The Committee recognizes that the engagement of strong talent in
critical functions may entail recruiting new executives at times
and involve negotiations with individual candidates. As a
result, the Committee may determine in a particular situation
that it is in our best interests to negotiate compensation
packages that deviate from the principles set forth above.
Independent
Compensation Consultant
In 2006, the Committee, in its review and determination of
executive compensation levels, utilized the services of James F.
Reda and Associates, a compensation consulting firm (JRA), as
its independent consultant. JRA representatives generally
participated in all regularly scheduled meetings of the
Committee. There have been no other engagements of JRA for the
performance of any other services to us in 2006. Any other
engagements of JRA by management are required to be disclosed to
the Committee so the Committee may consider any possible impact
on the independence of JRA.
Market
Data and Peer Group
To determine 2006 compensation levels, the Committee relied on
market data provided by JRA. This data consisted of compensation
information for the named executive officers of the following
peer group of companies: Ball Corporation, Bemis, Coca Cola
Enterprises Inc., Commercial Metals Company, Crown Holdings,
Cummins, Eastman Chemicals, Georgia Pacific, MeadWestvaco,
Newell Rubbermaid, Nucor, Owens Illinois, Pactiv, Parker
Hannifin, Smurfit-Stone Container and Worthington Industries. We
also review data from several compensation surveys including
those published by Hay Group and Towers Perrin.
Elements
of Our Compensation Program
Our compensation program consists of the following key elements:
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Base Pay
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Short-Term (Annual) Incentives
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Long-Term Incentives
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Employee Benefits
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The Committee periodically compares the competitiveness of these
key elements to that of companies in our peer group. In 2006,
this review revealed that the total direct compensation
opportunity for our executive officers was at market overall,
without significant variation by position and by element of
compensation.
Base Pay. Based on market practices, the
Committee believes it is appropriate that some portion of total
direct compensation (generally 20% to 40%) be provided in a form
that is fixed and liquid. Base salary for our named executive
officers is generally reviewed by the Committee in the first
quarter of each year and any increases are effective on
April 1. In setting base salary, the Committee is mindful
of its overall goal for allocation of total compensation to this
element and the median base salary for comparable positions at
companies in our peer group.
Named executive officers who were employees as of
January 1, 2006, did not receive a base salary increase in
2006. In reaching that decision, the Committee considered
several factors including market position, share price
performance and our financial restatement.
Short-Term (Annual) Incentives. We believe
having an annual incentive opportunity is necessary to attract
and retain key management. Our general philosophy is that annual
cash incentives should be tied to both company-wide and business
unit goals as well as individual performance. Annual incentives
should be consistent with the strategic goals set by the board,
and the performance benchmarks should be sufficiently ambitious
so as to provide meaningful incentive to our executive officers.
In the normal circumstances, we would expect that approximately
20% of an executive officers total direct compensation
would be attributable to short-term incentives.
Following consultation with management, the Committee approved
the 2006 short term incentive program. The performance
benchmarks for the year were tied to three key components:
(1) improvements in cash flow as measured by working
capital turns; (2) increases in profitability as measured
by Total Regional Income; and (3) satisfaction of certain
Environment, Health and Safety (EHS) targets. The specific
weightings among these three components was 50% for cash flow
targets; 40% for profitability targets; and 10% for EHS targets.
A named executive officers incentive opportunity was
further weighted to reflect the region or regions for which he
or she was primarily responsible.
The potential payout attributable to working capital turns could
range from 0% of target if 2006 results did not exceed 2005
results, 100% of target if 2006 results met the business plan
and up to a maximum of 200% of target if 2006 results exceed the
business plan by 10% or more. The potential payout attributable
to Total Regional Income could range from 0% of target if 2006
results did not exceed 2005 results, 100% of target if 2006
results met the business plan, and up to 200% of target if 2006
results exceeded the business plan by 10% or more. The potential
payout attributable to EHS objectives also ranged from 0% to
200% of target and is measured against continuous improvement
targets for recordable cases and lost time injuries and illness
as well as the completion of strategic EHS initiatives.
The Committee met during the first quarter of 2007 to evaluate
and approve 2006 short-term incentive payouts for
Ms. Brooks and Messrs. Monahan, Dobson, Morrison, de
Weert and Greenawalt. Former executives Messrs. Sturgell,
Arseneault, Bark-Jones and Batt each received a severance
payment in lieu of consideration under our short-term incentive
program.
In evaluating 2006 results, the Committee determined that the
original 2006 benchmarks were not reflective of our actual
performance for 2006. The Committee exercised its discretion to
consider and evaluate performance against other performance
factors including net income, metal prices, can price ceiling,
the turnover in senior management, the financial restatement,
the proposed sale of the Company and total shareholder return.
In view of performance against these factors, the Committee
exercised its authority to set the actual short-term incentive
payouts for Ms. Brooks and Messrs. de Weert,
Greenawalt and Dobson as shown below. Mr. Morrisons
short-term incentive award was paid at 100% of target because
the Company was contractually obligated to pay him no less than
this amount in accordance with his repatriation agreement
summarized later in this Annual Report.
11
The table below summarizes 2006 target and actual payments for
Ms. Brooks and Messrs. Dobson, Morrison, de Weert and
Greenawalt.
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2006 Target
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2006 Actual
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Martha Finn Brooks
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$
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589,500
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$
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475,000
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Rick Dobson
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$
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337,500
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$
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200,000
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(1)
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John F. Morrison
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$
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152,350
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$
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152,350
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Arnaud de Weert
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$
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329,925
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$
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300,000
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Kevin Greenawalt
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$
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186,000
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$
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150,000
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Pro-rated for his service. |
Lastly, the board approved an incentive award of $250,000 for
Mr. Monahan based on his efforts and successes while
serving as our Interim Chief Executive Officer.
Long-Term Incentives. The Committee believes
that a substantial portion of each executives total direct
compensation opportunity (generally 40% to 60%) should be based
on long-term performance and should be in the form of
equity-based awards because such awards align the interests of
our executives and shareholders. Equity-based awards are made
under our 2006 Incentive Plan, which was approved by our
shareholders on October 26, 2006 (the Incentive Plan). The
Incentive Plan authorizes awards in the form of stock options,
restricted stock, restricted stock units, performance shares and
stock appreciation rights (as well as other awards paid in cash
or equity). The mix between various types of equity awards may
vary from year to year.
The opportunity to receive long-term incentive compensation by
an executive in a given year is generally determined by
reference to the market for long-term incentive compensation
among our peer group companies. The Committee is also mindful of
long-term incentive awards made in prior years and takes such
awards into account in determining the amount of current-year
awards. On October 26, 2006, our named executive officers
received 100% of their equity awards in the form of stock
options, or stock appreciation rights (SARs) in the case of
Mr. de Weert, each with an exercise price of
$25.53 per share, the closing price for our common shares
on the NYSE on the grant date.
The Committee considered the use of various forms of long-term
awards, but ultimately determined that the use of stock options
and SARs (one-half of which are in the form of premium award
shares) provided the best link between the interests of
executives and shareholders. The use of premium stock options
and premium SARs created an additional share price performance
requirement in that premium stock options and premium SARs
cannot be exercised unless the closing price of our common
shares on the day before exercise is at least 12% higher than
the closing price on the date of grant. For future long-term
awards, the Committee will consider all types of awards
available under the Incentive Plan and will determine at the
time of each award the appropriate form of award to use.
Employee
Benefits
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U.S. Pension Plan: During 2005, those of
our employees previously participating in the Alcancorp Pension
Plan and the Alcan Supplemental Executive Retirement Plan
received up to one year of additional service under each plan to
the extent that such employees continued to be employed by us
during 2005. We paid to Alcan the normal cost (in the case of
the Alcancorp Pension Plan) and the current service cost (in the
case of the Alcan Supplemental Executive Retirement Plan) with
respect to those employees. The Alcan plans provide for pensions
calculated based upon combined service with us or Alcan of up to
35 years. Eligible earnings consist of the average annual
salary and the short-term incentive award up to its target
during the three consecutive calendar years when they were the
greatest, subject to a cap for those participating in the
Pension Plan for Officers described below.
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Effective January 1, 2006, we adopted the Novelis Pension
Plan and the Novelis Supplemental Executive Retirement Plan (the
Novelis SERP), which provide benefits identical to the benefits
provided under the Alcancorp plans. Executives who were
participants in the Alcancorp Pension Plan will participate in
the Novelis Pension Plan and Novelis SERP (collectively referred
to as the
12
U.S. Pension Plan). Executives who were not participants in
the Alcancorp Pension Plan or who were hired on or after
January 1, 2005 will not participate in the
U.S. Pension Plan.
Messrs. Sturgell, Morrison, Greenawalt and Arseneault and
Ms. Brooks are all participants in the U.S. Pension
Plan.
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U.K. Pension Plan: The U.K. Pension Plan,
which was transferred to us from Alcan in connection with the
spin-off, provides for pensions calculated on service of up to
40 years and eligible earnings, which consist of the
average annual salary and the short-term incentive award up to
its target during the last 12 months before retirement,
subject to a cap for those participating in the Pension Plan for
Officers (described below). Prior to his termination in 2006,
Mr. Bark-Jones was the only executive entitled to
participate in the U.K. Pension Plan during 2006.
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Swiss Pension Schemes: Since our spin-off from
Alcan, we continued to participate in Alcans two pension
schemes in Switzerland: (1) the Pensionskasse Alcan Schweiz
(a defined benefit plan) and (2) the Erganzungskasse Alcan
Schweiz (a defined contribution plan). The defined benefit plan
is computed based on a participants final annual earnings
(up to a limit and less a coordination amount) and service up to
45 years. The defined contribution plan only recognizes
earnings in excess of the defined benefit earnings limit.
Mr. de Weert was the only named executive officer eligible
for the Swiss pension schemes in 2006.
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Novelis Pension Plan for Officers: The Pension
Plan for Officers (PPO) is a separate non-qualified supplemental
executive retirement plan that provides an additional pension
benefit based on combined service of up to 20 years as an
officer of Novelis or Alcan and eligible earnings, which consist
of the excess of the average annual salary and target short-term
incentive award during the 60 consecutive months when they were
the greatest over eligible earnings in the U.S. Pension
Plan or the U.K. Pension Plan, as applicable. The Committee
determines participants in the PPO. Both the U.S. Pension
Plan and U.K. Pension Plan provide for a maximum pension benefit
on eligible earnings that is established with reference to the
position of the officer prior to being designated a PPO
participant. Prior to their termination of employment during
2006, Messrs. Sturgell and Bark-Jones were the only
participants in the PPO. Both individuals received a lump sum
payment of their entire benefits under the PPO following their
termination of employment. We do not expect that any new
participants will be added to the PPO.
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Additional Pension Benefits: In addition to
her participation in the U.S. Pension Plan described above,
Ms. Brooks will receive from us a supplemental pension
equal to the excess, if any, of the pension she would have
received from her employer prior to joining Alcan had she been
covered by her prior employers pension plan until her
separation or retirement from Novelis, over the sum of her
pension from the U.S. Pension Plan and the pension rights
actually accrued with her previous employer.
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Mr. Batt is entitled to a lifetime non-qualified pension of
$2,325 per month beginning March 1, 2007, with 50% of
that amount continuing to his surviving spouse, if applicable.
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Savings Plan and Non-Qualified Defined Contribution
Plan: All U.S. based executives are eligible
to participate in our tax qualified savings plan. We match up to
4.5% of pay (up to the IRS compensation limit; $220,000 for
2006) for participants who contribute 6% of pay or more to
the savings plan. In addition, U.S. based executives hired
on or after January 1, 2005 are eligible to share in our
discretionary contributions. Discretionary contributions are
first made to the qualified plan (up to the IRS compensation
limit) and any excess amounts are made to our non-qualified
defined contribution plan. For 2006, we made a discretionary
contribution equal to 5% of pay. Mr. Dobson was the only
named executive officer eligible for a discretionary
contribution for 2006.
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Health & Welfare Benefits: Executives
are entitled to participate in our employee benefit plans
(including medical, dental, and life insurance benefits) on the
same basis as other employees.
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Perquisites: As noted in our Summary
Compensation Table, we provide our officers with certain
perquisites consistent with market practice. We do not view
perquisites as a significant element of our comprehensive
compensation structure.
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13
Employment-Related
Agreements
Each of our named executive officers during 2006 was covered by
an employment or letter agreement setting forth the general
terms of his or her employment. See Employment-Related
Agreements and Certain Employee Benefit Plans for a discussion
of these agreements.
On September 25, 2006, we entered into change in control
agreements with certain members of our management team,
including the following named executive officers:
Ms. Brooks and Messrs. Dobson, de Weert, and
Greenawalt. In the case of Ms. Brooks and
Mr. Greenawalt, these change in control agreements replaced
previous change in control agreements that were entered into
prior to our spin-off from Alcan. We believe that such change in
control agreements are critical because they allow management to
remain focused on our shareholders best interests in the
event of a potential change in control situation. The change in
control agreements generally terminate on December 31,
2008, unless a change in control event occurs on or before such
date in which case they terminate 24 months following the
date of the change in control event. Prior to January 6,
2007, each named executive officer was entitled to payment if we
terminated his or her employment other than for cause, or if the
executive resigned for good reason. After January 6, 2007,
each named executive officer is entitled to payment if we
terminate his or her employment other than for cause, or if the
executive resigns for good reason, within six months before or
24 months after a change in control event. Such payments
will not be made if the executives employment terminates
because of death, disability, or retirement.
On September 25, 2006, we also entered into recognition
agreements with certain members of our management team,
including the following named executive officers:
Ms. Brooks and Messrs. Dobson, de Weert, and
Greenawalt. These recognition agreements include both a
retention and severance component. Under the retention
component, the executive will be entitled to a recognition
payment if an executive remains continuously employed by us
through each of two vesting dates (December 31, 2007 and
December 31, 2008). Under the severance component, the
executive will be entitled to a severance payment if his or her
employment is terminated by us other than for cause on or before
December 31, 2008.
We believe that such recognition agreements are in the best
interest of our shareholders because the potential for
recognition payments encourages the retention of key executives
and provides a direct link with share price performance. For our
named executive officers who would be entitled to benefits under
the provisions of their change in control agreements, any
retention payments and any severance payments under the
recognition agreements would offset dollar for dollar any
amounts to be received under the change in control agreements in
order to avoid duplication.
See Employment-Related Agreements and Certain Employee Benefit
Plans for an additional discussion of these agreements.
Impact of
Accounting and Tax Treatments
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the Internal Revenue Code) limits our ability to deduct
annual compensation in excess of $1 million paid to any of
the named executive officers. This limitation generally does not
apply to compensation based on performance goals if certain
requirements are met. The Committee has considered the effect of
Section 162(m) on our executive compensation program in
developing its policy with respect to the deductibility of our
executive compensation. It is the Committees position that
in administering the performance-based portion of our executive
compensation program, it will attempt to satisfy the
requirements for deductibility under Section 162(m).
However, the Committee believes that it needs to retain the
flexibility to exercise its judgment in assessing an
executives performance and that the total compensation
system for executives should be managed in accordance with the
objectives outlined in this Compensation Discussion and Analysis
and in the overall best interests of our shareholders. Should
the requirements for deductibility under Section 162(m)
conflict with our executive compensation philosophy and
objectives or with what the Committee believes to be in the best
interests of the shareholders, the Committee may authorize
compensation that is not fully deductible for any given year.
With the adoption of Statement of Financial Accounting Standards
No. 123 (revised 2004) Share-Based Payment
(SFAS 123(R)), we do not expect accounting treatment of
differing forms of equity awards to vary
14
significantly and, therefore, SFAS 123(R) is not expected
to have a material effect on the selection of forms of equity
compensation.
Timing of
Compensation Decisions
The Committee develops an annual agenda to assist it in
fulfilling its responsibilities. Generally, in the first quarter
of each year, the Committee (1) reviews prior year
performance and authorizes the distribution of short-term
incentive pay-outs, if any, for the prior year,
(2) establishes performance criteria for the current year
short-term incentive program, and (3) reviews base pay and
annual short-term incentive targets for executives.
Long-term incentive awards are generally considered and approved
by the Committee during the fourth quarter of each year,
although the Committee may deviate from this practice when
appropriate under the circumstances.
This timing has been selected as a result of a variety of tax
considerations. In order to satisfy the deductibility
requirements under Section 162(m) of the Internal Revenue
Code, performance objectives must be established in the first
90 days of the performance period. For annual incentive
awards, this means performance objectives must be established no
later than the end of March.
We have established written guidelines for the grant, delivery,
documentation and recording of equity awards. Equity awards may
be made only by the Committee or those authorized by the
Committee. The Committee has established written delegations
authorizing our Chief Executive Officer to make certain awards
to non-executive officers, subject to pre-established
limitations on individual awards and total awards. Our Vice
President for Human Resources reports to the Committee, at each
meeting, on the use of such authority and the Committee reviews
the authority annually.
Grants can only be authorized in writing. Authorizations of
amendments, modifications or changes to awards must be in
writing and can only be adopted with the approval of the
Committee. For option and SAR awards, the awards must be granted
at the NYSE closing price of our common shares on the grant
date. Generally, for employees, we target granting annual awards
on the date of the Board of Directors meeting in December of
each year, unless another date is determined by the Committee.
Stock
Ownership Guidelines
We have not adopted guidelines for executive ownership of our
common shares due, in part, to the fact that a significant
portion of each named executive officers total direct
compensation opportunity is in the form of equity-based
compensation. Our equity award programs are designed to create a
significant link between the interests of executives with the
interests of shareholders.
Hedging
of Company Stock
Pursuant to our Insider Trading Policy, directors, officers and
employees may not engage in short-term speculative transactions
involving trading in our securities. This includes short sales,
sales against the box and puts, calls and options on our
securities (other than the exercise of employee or director
stock options). Margin loans involving our securities are
discouraged because of the complex legal issues surrounding such
loans and must have legal approval in advance. Other practices
which may be effectively considered hedging, such as forward
purchase contracts, are not prohibited, but are subject to legal
review in advance.
15
Compensation
Committee Report
The Committee has reviewed and discussed the foregoing
Compensation Discussion and Analysis with management. Based on
the Committees review of and discussions with management,
the Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Annual
Report on
Form 10-K/A.
The foregoing report is provided by the following directors, who
constitute the Committee:
Clarence J. Chandran, Chairman
Charles G. Cavell
C. Roberto Cordaro
Helmut Eschwey
Edward V. Yang
Summary
Compensation Table
The table below sets forth information regarding 2006
compensation for our named executive officers.
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Non-Equity
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Incentive
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Change in
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Stock
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Option
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Plan
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Pension
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All Other
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Salary
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Bonus
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Awards
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Awards
|
|
|
Compensation
|
|
|
Value
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)
|
|
|
William T. Monahan,
|
|
|
2006
|
|
|
|
260,000
|
(6)
|
|
|
250,000
|
(6)
|
|
|
109,154
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108,333
|
(6)
|
|
|
727,487
|
(6)
|
Former Interim Chief Executive
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Sturgell,
|
|
|
2006
|
|
|
|
656,667
|
|
|
|
|
|
|
|
54,645
|
|
|
|
2,988,200
|
|
|
|
|
|
|
|
1,200,669
|
|
|
|
6,385,436
|
|
|
|
11,285,617
|
|
Former President & Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick Dobson,
|
|
|
2006
|
|
|
|
202,679
|
|
|
|
125,000
|
(7)
|
|
|
74,073
|
|
|
|
63,096
|
|
|
|
200,000
|
|
|
|
|
|
|
|
56,890
|
|
|
|
721,738
|
|
Senior Vice President &
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geoffrey Batt,
|
|
|
2006
|
|
|
|
283,333
|
|
|
|
|
|
|
|
71,547
|
|
|
|
223,996
|
|
|
|
|
|
|
|
125,666
|
|
|
|
2,271,578
|
|
|
|
2,976,120
|
|
Former Senior Vice
President & Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha Finn Brooks,
|
|
|
2006
|
|
|
|
655,000
|
|
|
|
|
|
|
|
784,197
|
|
|
|
552,181
|
|
|
|
475,000
|
|
|
|
139,903
|
|
|
|
132,535
|
|
|
|
2,738,816
|
|
Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Morrison,
|
|
|
2006
|
|
|
|
277,000
|
|
|
|
|
|
|
|
201,747
|
|
|
|
300,855
|
|
|
|
152,350
|
|
|
|
268,665
|
|
|
|
551,970
|
|
|
|
1,752,587
|
|
Former Senior Vice President and
President Asia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arnaud de Weert,
|
|
|
2006
|
|
|
|
340,631
|
|
|
|
160,927
|
(8)
|
|
|
31,149
|
|
|
|
33,413
|
|
|
|
300,000
|
|
|
|
9,428
|
|
|
|
110,487
|
|
|
|
986,035
|
|
Senior Vice President and President
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Greenawalt,
|
|
|
2006
|
|
|
|
310,000
|
|
|
|
|
|
|
|
232,896
|
|
|
|
293,949
|
|
|
|
150,000
|
|
|
|
219,749
|
|
|
|
36,730
|
|
|
|
1,243,324
|
|
Senior Vice President and President
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher Bark-Jones,
|
|
|
2006
|
|
|
|
436,007
|
|
|
|
|
|
|
|
72,621
|
|
|
|
2,221,328
|
|
|
|
|
|
|
|
314,362
|
|
|
|
2,659,746
|
|
|
|
5,704,064
|
|
Former Senior Vice President and
President Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pierre Arseneault,
|
|
|
2006
|
|
|
|
125,000
|
|
|
|
|
|
|
|
21,947
|
|
|
|
341,160
|
|
|
|
|
|
|
|
267,534
|
|
|
|
1,042,195
|
|
|
|
1,797,836
|
|
Former Vice President Strategic
Planning & IT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts in this column reflect the dollar amount recognized
for financial statement reporting purposes for the fiscal year
ended December 31, 2006, in accordance with
SFAS 123(R) (excluding the impact of |
16
|
|
|
|
|
estimated forfeitures). With the exception of Mr. Monahan,
the awards were granted under our Founders Performance Award
Plan, Total Shareholder Returns Performance Plan and individual
Recognition Agreements and may include amounts from awards
granted in and prior to 2006. See footnote (6) with respect
to Mr. Monahan. Assumptions used in the calculation of
these amounts are included in Note 14 to our audited
financial statements included in our original
Form 10-K
for the fiscal year ended December 31, 2006. The expense
attributable to each of these plans and agreements is set forth
below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Founders
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance
|
|
|
Total Shareholder Returns
|
|
|
Recognition
|
|
|
|
|
|
|
Award Plan
|
|
|
Performance Plan
|
|
|
Agreements
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
William T. Monahan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Sturgell
|
|
|
|
|
|
|
54,645
|
|
|
|
|
|
|
|
54,645
|
|
Rick Dobson
|
|
|
|
|
|
|
|
|
|
|
74,073
|
|
|
|
74,073
|
|
Geoffrey Batt
|
|
|
67,773
|
|
|
|
3,774
|
|
|
|
|
|
|
|
71,547
|
|
Martha Finn Brooks
|
|
|
633,975
|
|
|
|
42,342
|
|
|
|
107,880
|
|
|
|
784,197
|
|
John F. Morrison
|
|
|
192,195
|
|
|
|
9,552
|
|
|
|
|
|
|
|
201,747
|
|
Arnaud de Weert
|
|
|
|
|
|
|
|
|
|
|
31,149
|
|
|
|
31,149
|
|
Kevin Greenawalt
|
|
|
192,195
|
|
|
|
9,552
|
|
|
|
31,149
|
|
|
|
232,896
|
|
Christopher Bark-Jones
|
|
|
40,162
|
|
|
|
32,459
|
|
|
|
|
|
|
|
72,621
|
|
Pierre Arseneault
|
|
|
33,468
|
|
|
|
(11,521
|
)
|
|
|
|
|
|
|
21,947
|
|
|
|
|
(2) |
|
The amounts in this column reflect the dollar amount recognized
for financial statement reporting purposes for the fiscal year
ended December 31, 2006, in accordance with
SFAS 123(R) (excluding the impact of estimated
forfeitures), of awards pursuant to our 2005 Conversion Plan,
2005 Stock Price Appreciation Unit Plan, and 2006 Incentive Plan
and thus may include amounts from awards granted in and prior to
2006. Assumptions used in the calculation of this amount are
included in Note 14 to our audited financial statements
included in our original
Form 10-K
for the fiscal year ended December 31, 2006. The expense
attributable to each of the aforementioned plans is set forth
below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 Stock Price
|
|
|
|
|
|
|
|
|
|
2005 Conversion
|
|
|
Appreciation Unit
|
|
|
|
|
|
|
|
|
|
Plan (a)
|
|
|
Plan (a)
|
|
|
2006 Incentive Plan
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
William T. Monahan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Sturgell
|
|
|
2,988,200
|
|
|
|
|
|
|
|
|
|
|
|
2,988,200
|
|
Rick Dobson
|
|
|
|
|
|
|
|
|
|
|
63,096
|
|
|
|
63,096
|
|
Geoffrey Batt
|
|
|
223,996
|
|
|
|
|
|
|
|
|
|
|
|
223,996
|
|
Martha Finn Brooks
|
|
|
440,838
|
|
|
|
|
|
|
|
111,343
|
|
|
|
552,181
|
|
John F. Morrison
|
|
|
239,516
|
|
|
|
|
|
|
|
61,339
|
|
|
|
300,855
|
|
Arnaud de Weert
|
|
|
|
|
|
|
|
|
|
|
33,413
|
|
|
|
33,413
|
|
Kevin Greenawalt
|
|
|
76,395
|
|
|
|
187,861
|
|
|
|
29,693
|
|
|
|
293,949
|
|
Christopher Bark-Jones
|
|
|
2,554
|
|
|
|
2,218,774
|
|
|
|
|
|
|
|
2,221,328
|
|
Pierre Arseneault
|
|
|
341,160
|
|
|
|
|
|
|
|
|
|
|
|
341,160
|
|
|
|
|
(a) |
|
The 2005 Conversion Plan and 2005 Stock Price Appreciation Unit
Plan were the predecessor plans to the 2006 Incentive Plan. Any
outstanding awards that were granted under the 2005 plans remain
subject to the terms of such plans but all future awards will be
issued under the 2006 Incentive Plan. |
|
|
|
(3) |
|
Represents 2006 awards under our short-term incentive program. |
|
(4) |
|
Represents the aggregate change in actuarial present value of
the named executive officers accumulated benefit under our
qualified and non-qualified defined benefit pension plans during
2006. Assumptions used in the calculation of these amounts are
included in Note 15 to our audited financial statements for
the fiscal year ended December 31, 2006. |
17
|
|
|
(5) |
|
With the exception of Mr. Monahan (see footnote
(6) below), the amounts shown in the All Other Compensation
column are reflected in the following table: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
Relocation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution
|
|
|
|
|
|
and
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Severance-
|
|
|
to Defined
|
|
|
|
|
|
Housing-
|
|
|
|
|
|
Perquisites
|
|
|
|
|
|
|
Related
|
|
|
Contribution
|
|
|
Group Life
|
|
|
Related
|
|
|
Child Tuition
|
|
|
and Personal
|
|
|
|
|
|
|
Payments
|
|
|
Plans
|
|
|
Insurance
|
|
|
Payments
|
|
|
Reimbursment
|
|
|
Benefits
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)(a)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Brian W. Sturgell
|
|
|
6,227,339
|
(b)
|
|
|
6,206
|
|
|
|
7,399
|
|
|
|
|
|
|
|
|
|
|
|
144,492
|
(c)
|
|
|
6,385,436
|
|
Rick Dobson
|
|
|
|
|
|
|
18,572
|
|
|
|
338
|
|
|
|
30,065
|
|
|
|
|
|
|
|
7,915
|
(d)
|
|
|
56,890
|
|
Geoffrey Batt
|
|
|
2,222,055
|
(e)
|
|
|
9,900
|
|
|
|
1,239
|
|
|
|
16,091
|
|
|
|
|
|
|
|
22,293
|
(f)
|
|
|
2,271,578
|
|
Martha Finn Brooks
|
|
|
|
|
|
|
7,444
|
|
|
|
1,761
|
|
|
|
|
|
|
|
79,198
|
|
|
|
44,132
|
(g)
|
|
|
132,535
|
|
John F. Morrison
|
|
|
|
|
|
|
9,900
|
|
|
|
1,112
|
|
|
|
536,092
|
(h)
|
|
|
|
|
|
|
4,866
|
(i)
|
|
|
551,970
|
|
Arnaud de Weert
|
|
|
|
|
|
|
31,872
|
|
|
|
|
|
|
|
57,904
|
|
|
|
|
|
|
|
20,711
|
(j)
|
|
|
110,487
|
|
Kevin Greenawalt
|
|
|
|
|
|
|
9,900
|
|
|
|
1,179
|
|
|
|
|
|
|
|
|
|
|
|
25,651
|
(k)
|
|
|
36,730
|
|
Christopher Bark-Jones
|
|
|
2,477,653
|
(l)
|
|
|
|
|
|
|
|
|
|
|
3,874
|
|
|
|
|
|
|
|
178,219
|
(m)
|
|
|
2,659,746
|
|
Pierre Arseneault
|
|
|
998,750
|
(n)
|
|
|
|
|
|
|
898
|
|
|
|
1,858
|
|
|
|
|
|
|
|
40,689
|
(o)
|
|
|
1,042,195
|
|
|
|
|
(a) |
|
Represents matching contribution (and discretionary contribution
in the case of Mr. Dobson) made to our tax qualified
defined contribution plan. |
|
(b) |
|
Consists of a lump sum severance payment of $5,570,672 and an
additional lump sum payment of $656,667 in lieu of consideration
under our short-term incentive program for 2006. |
|
(c) |
|
Includes (i) accrued vacation of $111,760, plus
(ii) discounted dental coverage for 36 months;
executive flex allowance; car allowance; personal home security;
and the difference between the price paid by Mr. Sturgell
to purchase his company car and the cars estimated fair
market value following his separation from service, each of
which individually had an aggregate incremental cost less than
$25,000. |
|
(d) |
|
Includes executive flex allowance and car allowance, each of
which individually had an aggregate incremental cost less than
$25,000. |
|
(e) |
|
Consists of a lump sum severance payment of $1,610,000; a lump
sum payment of $201,250 in lieu of consideration under our
short-term incentive program for 2006; and a one time retention
payment equal to $410,805 for services rendered during
Mr. Batts employment transition period. |
|
(f) |
|
Includes executive flex allowance; car allowance; personal home
security; and club dues, each of which individually had an
aggregate incremental cost less than $25,000. |
|
(g) |
|
Includes executive flex allowance; car allowance; personal home
security; tax advice payment; cash to pay interest on a third
party loan; and spousal travel expenses, each of which
individually had an aggregate incremental cost less than $25,000. |
|
(h) |
|
Includes (i) an expatriate premium of $143,758;
(ii) employer-paid Korean tax deposit of $217,019;
(iii) employer-provided housing of $148,267;
(iv) travel reimbursement of $23,963; and (v) storage
payment of $3,085. |
|
(i) |
|
Includes tax advice payment and club dues, each of which
individually had an aggregate incremental cost less than $25,000. |
|
(j) |
|
Includes executive flex allowance; car allowance; and tax advice
payment, each of which individually had an aggregate incremental
cost less than $25,000. |
|
(k) |
|
Includes executive flex allowance; car allowance; personal home
security; and cash to pay interest on third party loan, each of
which individually had an aggregate incremental cost less than
$25,000. |
|
(l) |
|
Consists of a lump sum severance payment of $1,773,240 payable
under his change in control agreement; a lump sum payment of
$287,219 in lieu of consideration under our short-term incentive
program for 2006; and $417,194 paid upon completion of his
project assignment. |
|
(m) |
|
Includes (i) accrued vacation of $107,644,
(ii) $43,460 for the difference between the price paid by
Mr. Bark-Jones to purchase his company car and the
cars estimated fair market value following his |
18
|
|
|
|
|
separation from service plus (iii) tax advice services and
car allowance, each of which individually had an aggregate
incremental cost less than $25,000. |
|
(n) |
|
Consists of (i) a lump sum severance payment of $930,000
(paid in January 2007); plus (ii) a lump sum payment of
$68,750 in lieu of consideration under our short-term incentive
program for 2006. |
|
(o) |
|
Includes (i) accrued vacation of $28,846 plus
(ii) executive flex allowance; car allowance; and personal
home security, each of which individually had an aggregate
incremental cost less than $25,000. |
|
|
|
(6) |
|
Mr. Monahan received a base salary of $65,000 per
month while serving as our Interim Chief Executive Officer from
August 28, 2006 to December 31, 2006. He also received
directors fees of $217,487, of which $108,333 was paid in
cash and $109,154 was credited in the form of deferred share
units and dividend equivalents under the Deferred Share Unit
Plan for Non-Executive Executive Directors. The Board of
Directors approved a discretionary bonus of $250,000 during the
first quarter of 2007 in recognition of Mr. Monahans
successful management of Novelis and his contributions to the
sale process. |
|
(7) |
|
Mr. Dobson received this payment as an employment signing
bonus. |
|
(8) |
|
Mr. de Weert received this payment as an employment signing
bonus. |
Grants of
Plan-Based Awards in 2006
The table below sets forth information regarding grants of
plan-based awards made to our named executive officers during
2006.
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Future Payouts
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
Under
|
|
|
Awards:
|
|
|
Awards:
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
Non-Equity
|
|
|
Number of
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Fair Value
|
|
|
|
|
|
|
Incentive
|
|
|
Shares of
|
|
|
Securities
|
|
|
Base Price
|
|
|
of Stock
|
|
|
|
|
|
|
Plan Awards(1)
|
|
|
Stock or
|
|
|
Underlying
|
|
|
of Option
|
|
|
and Option
|
|
|
|
|
|
|
Target
|
|
|
Maximum
|
|
|
Units (#)(2)
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
Grant Date
|
|
|
($)
|
|
|
($)
|
|
|
(#)(1)
|
|
|
(#)(3)
|
|
|
($/Sh)
|
|
|
($)
|
|
|
William T. Monahan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Sturgell
|
|
|
|
|
|
|
985,000
|
|
|
|
1,970,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick Dobson
|
|
|
|
|
|
|
337,500
|
|
|
|
675,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/25/06
|
|
|
|
|
|
|
|
|
|
|
|
19,500
|
|
|
|
|
|
|
|
|
|
|
|
451,425
|
|
|
|
|
10/26/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,500
|
|
|
|
25.53
|
|
|
|
962,463
|
|
Geoffrey Batt
|
|
|
|
|
|
|
345,000
|
|
|
|
690,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha Finn Brooks
|
|
|
|
|
|
|
589,500
|
|
|
|
1,179,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/25/06
|
|
|
|
|
|
|
|
|
|
|
|
28,400
|
|
|
|
|
|
|
|
|
|
|
|
657,460
|
|
|
|
|
10/26/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
163,230
|
|
|
|
25.53
|
|
|
|
1,698,408
|
|
John F. Morrison
|
|
|
|
|
|
|
152,350
|
|
|
|
304,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/26/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,650
|
|
|
|
25.53
|
|
|
|
339,723
|
|
Arnaud de Weert(4)
|
|
|
|
|
|
|
329,925
|
|
|
|
659,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/25/06
|
|
|
|
|
|
|
|
|
|
|
|
8,200
|
|
|
|
|
|
|
|
|
|
|
|
189,830
|
|
|
|
|
10/26/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,530
|
|
|
|
25.53
|
|
|
|
N/A
|
(5)
|
Kevin Greenawalt
|
|
|
|
|
|
|
186,000
|
|
|
|
372,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/25/06
|
|
|
|
|
|
|
|
|
|
|
|
8,200
|
|
|
|
|
|
|
|
|
|
|
|
189,830
|
|
|
|
|
10/26/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,530
|
|
|
|
25.53
|
|
|
|
452,930
|
|
Christopher Bark-Jones
|
|
|
|
|
|
|
330,458
|
|
|
|
660,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pierre Arseneault
|
|
|
|
|
|
|
165,000
|
|
|
|
330,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
These columns show the range of payouts available under our
short-term incentive program for 2006 if the target or maximum
performance objectives are satisfied, as described under
Compensation Discussion and Analysis
Short-Term (Annual) Incentives. There is no minimum payout
under our short-term incentive program. The actual amount earned
for 2006 is reported in our Summary Compensation Table in the
column titled Non-Equity Incentive Plan Compensation. Amounts
assume a full-year of service. |
19
|
|
|
(2) |
|
These amounts represent restricted share units payable under
each executives recognition agreement dated
September 25, 2006. |
|
(3) |
|
These amounts represent stock options (or SARs in the case of
Mr. de Weert) granted on October 26, 2006 under the
2006 Incentive Plan. One-half of the total award is in the form
of premium award shares and one-half in the form of non-premium
award shares. See Employment-Related Agreements and
Certain Employee Benefit Plans 2006 Incentive
Plan for a discussion of these awards. |
|
(4) |
|
Payment is settled in Euros but shown in this table in
U.S. dollars based on December 29, 2006 exchange rate
of one U.S. dollar per 1.3197 Euro. |
|
(5) |
|
Mr. de Weerts SARs will be settled in cash at the time of
exercise. Because these SARs are accounted for as liability
awards (as opposed to equity awards) under SFAS 123(R), we
have not included the grant date fair value. The value of this
award at the December 31, 2006 valuation was $508,920. |
Employment-Related
Agreements and Certain Employee Benefit Plans
Each of our named executive officers was subject to an
employment or letter agreement during 2006. The terms of each
such agreement is summarized below.
Agreement
with William T. Monahan
Mr. Monahan served as our Interim Chief Executive Officer
during the period August 28, 2006 and ending
December 31, 2006. During this period, he received a base
salary of $65,000 per month plus reimbursement for
reasonable business expenses. Mr. Monahan was also entitled
to incentive compensation in the sole and exclusive discretion
of the board. Mr. Monahans salary and potential
incentive compensation was in addition to the fees
Mr. Monahan received for serving as Chairman of our Board.
Mr. Monahan was not entitled to long-term incentives,
employment-related benefits, or severance-related pay during or
following his tenure as Interim Chief Executive Officer.
Agreement
with Brian Sturgell
Mr. Sturgell served as our President and Chief Executive
Officer during the period January 1, 2005 to
August 28, 2006. During this period, he received an annual
base salary of $985,000 and participated in all of our executive
benefits including our qualified and non-qualified pension
plans, equity and short-term incentive plans, and executive
perquisites. He was also eligible for our broad-based employee
benefit and health plans.
On October 26, 2006, we entered into a separation and
release agreement with Mr. Sturgell in connection with his
termination of employment. We mutually agreed to terminate his
role as President and Chief Executive Officer effective
August 28, 2006. Pursuant to the terms of
Mr. Sturgells severance agreement dated
December 5, 2005, we were obligated to pay him
36 months of base salary and short-term incentives and to
continue his medical, dental, life insurance and pension
benefits for three years. The estimated present value of the
additional pension accrual is $1,009,000. Pursuant to the terms
of Mr. Sturgells separation and release agreement, we
agreed to pay his 36 months of severance in a single lump
sum of $5,770,672 rather than monthly installments. We also
agreed to (i) pay Mr. Sturgell $656,667 in lieu of
participation in the short-term incentive plan for 2006,
(ii) pay his total accrued benefit under our PPO in a
single lump sum of $1,529,350, (iii) reimburse him for the
expenses incurred in connection with the sale of his home in
Atlanta, Georgia, and relocation to his new address (estimated
cost of $200,000), and (iv) reimburse him for tax
preparation fees not to exceed $25,000. In exchange for the
foregoing, Mr. Sturgell executed a release and waiver of
claims and agreed not to work for a direct competitor for a
period of three years.
Agreement
with Rick Dobson
Mr. Dobson became our Chief Financial Officer, effective
July 19, 2006. Pursuant to his employment agreement, he is
entitled to a base salary of $450,000 and is eligible for
short-term and long-term incentives. Mr. Dobson also
participates in our broad-based employee benefit and health
programs and receives other executive perquisites. We also
agreed to reimburse Mr. Dobson for certain expenses that he
may incur in connection his relocation to the Atlanta, Georgia,
and to pay for any private school tuition costs for his
20
children in grades one through twelve. Mr. Dobsons
agreement also provides for a minimum of twelve months severance
upon his involuntary termination of employment. Any severance
payments that Mr. Dobson receives under his employment
agreement would offset any severance benefits he would be
entitled to receive under his recognition agreement or change in
control agreement, described below.
Agreement
with Geoffrey Batt
Mr. Batt served as our Chief Financial Officer during the
period January 1, 2005 to June 16, 2006. During this
period, he received an annual base salary of $460,000 and
participated in our equity and short-term incentive and
executive perquisites programs. He was also covered by a
supplemental retirement arrangement and was eligible for our
broad-based employee benefit and health plans other than our
qualified pension plan.
On June 27, 2006, we entered into a transition agreement
and our subsidiary, Novelis Corporation, entered into a release
and separation agreement with Mr. Batt, each regarding the
terms of his termination of employment. Pursuant to these
agreements, Mr. Batt terminated his role as our Chief
Financial Officer effective as of June 16, 2006; however,
Mr. Batt remained an employee on non-active payroll through
August 11, 2006 (his separation date). Until his separation
date, Mr. Batt s compensation and benefits continued
at their then-current levels. Pursuant to his change of control
agreement dated November 8, 2004, Mr. Batt was also
entitled to receive an amount equal to $1,610,000
(24 months of his base salary and short-term incentives).
We also agreed to pay Mr. Batt $201,250 in lieu of
participation in the short-term incentive plan for 2006.
Mr. Batt is also entitled to liability indemnification and
reimbursement for relocation, tax and outplacement services
(estimated at a collective cost of $150,000).
Agreement
with Martha Finn Brooks
We entered into an employment agreement with Ms. Brooks
dated November 8, 2004. Pursuant to this agreement, she
serves as our Chief Operating Officer with a base salary of
$655,000 in 2006. Ms. Brooks is eligible for all of our
executive equity and short-term incentive plans and is entitled
to certain executive perquisites. She is also eligible for our
broad-based employee benefit and health plans. We also agreed to
reimburse Ms. Brooks for certain expenses that she may
incur in connection with private school tuition costs for her
children in grades one through twelve. As part of her
May 2, 2002 employment agreement with Alcan, we guaranteed
that the total combined qualified and non-qualified pension
benefits Ms. Brooks receives under the Novelis, Alcan and
Cummins (her former employer) pension plans will not be less
than the pension benefit that she would have received if she
remained covered by the Cummins Pension Plan from
October 16, 1986, until her retirement/termination with us.
Any severance payments that Ms. Brooks receives under her
employment agreement would offset any severance benefits she
would be entitled to receive under her recognition agreement or
change in control agreement, described below.
Agreement
with John F. Morrison
We entered into an employment agreement with Mr. Morrison
effective as of January 1, 2005, pursuant to which he
served as President of Novelis Asia with a base salary of
$277,000 in 2006. Under his agreement, Mr. Morrison was
entitled to an expatriate premium and location allowance, each
in amount equal to 10% of his base salary (net after tax).
Mr. Morrison was also eligible for our executive equity and
short-term incentive plans and certain executive perquisites as
well as our broad-based employee benefit and health plans.
During the term of his Korean assignment, Mr. Morrison was
provided with a fully furnished home which was paid for by
Novelis Korea Limited and was entitled to be reimbursed for up
to three trips to the United States during the year for himself
and his wife.
We entered into a repatriation agreement with Mr. Morrison
dated August 8, 2006, pursuant to which we agreed he would
retire effective March 1, 2007. Per his repatriation
agreement, Mr. Morrison was transferred to the non-active
payroll as of his retirement date and is entitled to receive
severance equal to
16-1/2
months base salary payable over our normal payroll cycle.
Mr. Morrison is also eligible to receive payment for his
accrued but unused vacation days. We also agreed to pay the
costs of relocating Mr. Morrison, his family, and
21
his household goods back to the United States from Korea, plus
to pay him one months base salary (grossed up for taxes)
to assist with incidentals incurred in connection with his
repatriation.
Agreement
with Arnaud de Weert
Mr. de Weert became our Senior Vice President and President of
Europe effective May 1, 2006. Pursuant to his employment
agreement, he is entitled to a base salary of $527,880 (400,000
Euros converted to U.S. Dollars at the December 31,
2006 exchange rate of 1.3197 U.S. Dollars per Euro) and is
eligible for short-term and long-term incentives. Mr. de
Weert also participates in our broad-based employee benefit and
health programs and receives other executive perquisites. We
also agreed to reimburse Mr. de Weert for certain expenses
that he may incur in connection with his relocation to Zurich.
Mr. de Weerts agreement also provides for a minimum
of twelve months severance upon his involuntary termination of
employment. Any severance payments that Mr. de Weert
receives under his employment agreement would offset any
severance benefits he would be entitled to receive under his
recognition agreement or change in control agreements, described
below.
Agreement
with Kevin Greenawalt
We entered into an employment agreement with Mr. Greenawalt
dated November 8, 2004. Pursuant to this agreement, he
serves as our Senior Vice President and President North America
with a base salary of $310,000 in 2006. Mr. Greenawalt is
eligible for all of our executive equity and short-term
incentive plans and is entitled to certain executive
perquisites. He is also eligible for our broad-based employee
benefit and health plans. Any severance payments that
Mr. Greenawalt receives under his employment agreement
would offset any severance benefits he would be entitled to
receive under his recognition agreement or change in control
agreement, described below.
Agreement
with Christopher Bark-Jones
Mr. Bark-Jones served as our Senior Vice President and
President of Europe during the period January 1, 2005 to
May 1, 2006. From May 1, 2006 through his termination
of employment, Mr. Bark-Jones served as strategic advisor
to the CEO. During these periods, he received an annual base
salary of $440,611 and participated in all of our executive
benefits including our qualified and non-qualified pension
plans, equity and short-term incentive plans, and executive
perquisites. He was also eligible for our broad-based employee
benefit and health plans.
On August 10, 2006, we entered into a release and
separation agreement with Mr. Bark-Jones, and on
October 8, 2006 we entered into a transition agreement with
Mr. Bark-Jones each regarding the terms of his termination
of employment. Mr. Bark-Jones terminated employment on
October 31, 2006. Pursuant to his change in control
agreement dated November 23, 2004, we were obligated to pay
Mr. Bark-Jones a lump sum amount equal to $1,773,240
(24 months of his base salary and short-term cash
incentives). We also agreed to (i) pay his total accrued
benefit under our PPO in a single lump sum of $402,378,
(ii) provide a lump sum payment of $287,219 in lieu of
consideration under our short-term incentive program for 2006,
(iii) provide a project completion bonus of $417,194,
(iv) reimburse Mr. Bark-Jones for the expenses
relating relocation to his new address (estimated cost of
$4,000), (v) provide lifetime medical coverage for him and
his spouse (estimated present value of $200,000) and
(vi) reimburse him for tax advice regarding his separation
pay (not to exceed $25,000). In exchange for the foregoing,
Mr. Bark-Jones executed a release and waiver of any and all
employment-related claims.
Agreement
with Pierre Arseneault
Mr. Arseneault served as our Vice President Strategic
Planning and IT during the period January 1, 2005 to
May 31, 2006. During this period, he received an annual
base salary of $300,000 and participated in all of our executive
benefits including our non-qualified pension plans, equity and
short-term incentive plans, and executive perquisites. He was
also eligible for our broad-based employee benefit and health
plans other than our qualified pension plan.
22
Mr. Arseneault terminated employment on June 1, 2006.
Pursuant to his change in control agreement dated
November 12, 2004, we were obligated to pay
Mr. Arseneault a lump sum amount equal to $930,000
(24 months of his base salary and short-term cash
incentives). We also agreed to pay Mr. Arseneault $68,750
in lieu of participation in the short-term incentive plan for
2006. We also agreed to payout Mr. Arseneaults unused
and accrued vacation in the amount of $28,846. We also agreed to
reimburse Mr. Arseneault for the expenses relating to
(i) the sale of his home and relocation to his new address
and (ii) tax advice regarding his separation pay (estimated
at a collective cost of $100,000). In exchange for the
foregoing, Mr. Arseneault executed a release and waiver of
any and all employment-related claims.
Change in
Control Agreements
We entered into change in control agreements on
September 25, 2006 with certain of our executives,
including Ms. Brooks and Messrs. Dobson, de Weert, and
Greenawalt. These new agreements replaced the change in control
agreements entered into with the executives (other than
Mr. Dobson and Mr. de Weert) prior to our spin-off
from Alcan.
The new change in control agreements will remain in effect until
December 31, 2008, unless a change in control event occurs
on or before such date in which event the agreements will
terminate 24 months following the date of the change in
control event. Prior to January 6, 2007, each above-named
executive officer was entitled to payment if we terminated his
or her employment other than for cause, or if the executive
resigned for good reason. After January 6, 2007, each
above-named executive officer is entitled to payment if we
terminate his or her employment other than for cause, or if the
executive resigns for good reason, within six months before or
24 months after a change in control event. Such payments
will not be made if the executives employment terminates
because of death, disability, or retirement.
The terms change in control, good
reason, and disability are defined in the
relevant agreements, each of which is filed as exhibit to our
original
Form 10-K.
The benefits under the change in control agreements include the
following:
|
|
|
|
|
a lump sum cash amount equal to two times the sum of the
executives base salary and target short-term incentive
opportunity, minus the amount of retention-related and severance
payments, if any, paid or payable to the executive other than
pursuant to
his/her
change in control agreement in order to avoid duplication of
payments;
|
|
|
|
all short-term and long-term incentive awards pursuant to the
terms of the incentive plan with respect to which such awards
were issued;
|
|
|
|
if the executive is not eligible for retiree medical benefits
and is covered under our group health plan at the time of
termination, we will pay an additional lump sum cash amount
(generally equal to the COBRA premium for 24 months grossed
up for taxes) in order to assist the executive with the cost of
post-employment medical continuation coverage;
|
|
|
|
continued coverage under our group life plan for 24 months;
|
|
|
|
an additional two-years credit for benefit accrual and
contribution allocation purposes under our qualified and
non-qualified pension, savings or other retirement plans;
|
|
|
|
100% vesting under our qualified and non-qualified retirement
pension, savings and other retirement plans; and
|
|
|
|
a gross-up
reimbursement for any excise tax liability imposed by
Section 4999 of the Internal Revenue Code.
|
We did not enter into a new change in control agreement with
Mr. Morrison during 2006. He was covered by a change in
control agreement dated November 10, 2004, which was
entered prior to our spin-off from Alcan.
Mr. Morrisons change in control agreement terminated
January 6, 2007, pursuant to its term.
23
Recognition
Agreements
On September 25, 2006, we entered into recognition
agreements with certain of our executives, including
Ms. Brooks and Messrs. Dobson, de Weert, and
Greenawalt. These agreements generally provide that the
executive will receive a fixed number of our common shares if he
or she remains employed through December 31, 2007 and
December 31, 2008. The number of our common shares payable
to each named executive officer on each applicable vesting date
is as follows:
|
|
|
|
|
|
|
|
|
|
|
Recognition Shares
|
|
|
Recognition Shares
|
|
|
|
Payable on
|
|
|
Payable on
|
|
Name
|
|
December 31, 2007 (#)
|
|
|
December 31, 2008 (#)
|
|
|
Martha Finn Brooks
|
|
|
14,200
|
|
|
|
14,200
|
|
Rick Dobson
|
|
|
9,750
|
|
|
|
9,750
|
|
Arnaud de Weert
|
|
|
4,100
|
|
|
|
4,100
|
|
Kevin Greenawalt
|
|
|
4,100
|
|
|
|
4,100
|
|
The recognition agreements also provide for severance payments
in the event an executives employment is terminated by us
other than for cause on or before December 31, 2008. The
severance payments are equal to the greater of (i) the
amount of severance the executive would receive from our
standard severance program or (ii) an amount equal to 150%
of annual base salary, in each case payable in cash in a single
lump sum. Our standard severance plan generally provides for a
benefit equal to one-half months pay multiplied by years
of service up to 19 years, plus one months pay
multiplied by years of service in excess of 19. For this
purpose, years of service includes service with us and Alcan.
Any retention or severance payments under the recognition
agreements reduce, dollar for dollar, any other
severance-related benefits to which the executive would
otherwise be entitled under his or her change in control
agreement in order to avoid duplication of benefits.
On February 10, 2007, our Board of Directors adopted
resolutions to amend the recognition agreements for certain of
our executives including Ms. Brooks and
Messrs. Dobson, Greenawalt, and de Weert. Under the amended
recognition agreements, if the executive remains continuously
employed by Novelis through the vesting dates of
December 31, 2007 and December 31, 2008, the executive
will be entitled to a recognition award payable in either, at
the option of the executive, (i) Hindalco Industries
Limited (Hindalco) common shares in certain circumstances or
(ii) an amount in cash, in each case equivalent to the
value of Novelis common shares determined at the effective date
of the arrangement under section 192 of the Canada Business
Corporations Act involving Novelis, its shareholders and other
security holders, Hindalco and AV Aluminum Inc. (Acquisition
Sub), a subsidiary of Hindalco, involving, among other things,
the acquisition by Acquisition Sub of all of the outstanding
common shares of Novelis for $44.93 in cash for each common
share.
2006
Incentive Plan
As noted in the above Grants of Plan-Based Awards table, we
granted stock options and SARs to certain of our named executive
officers on October 26, 2006. The terms of the stock
options and SARs are identical in all material respects, except
that the incremental increase in the value of the SARs is paid
in cash rather than our common shares at the time of exercise.
The option shares or SARs, as applicable, are comprised of two
equal portions: (i) premium award shares and
(ii) non-premium award shares. Both the premium award
shares and non-premium award shares have an exercise price of
$25.53 per share, vest ratably in 25% increments over the
four year period beginning October 26, 2006, and may be
exercised, in whole or in part, once vested no later than the
seventh anniversary of the date of grant. The premium award
shares, however, may only be exercised if the closing price per
share on the business day preceding the exercise date equals or
exceeds $28.59, a 12% premium over the closing price on the
grant date.
If an executive retires on or after October 26, 2007, then
the award shares will continue to vest in accordance with the
regular vesting schedule, but must be exercised in all events no
later than the third anniversary following the executives
retirement date. If the executive retires before
October 26, 2007, then all of the award shares will be
forfeited. In the event of the executives death or
disability, all of the award shares will become immediately
vested, but must be exercised in all cases no later than the
first anniversary following
24
the executives termination of employment. If the executive
terminates for any reason other than retirement, death,
disability, or for cause, then the executive will have
90 days to exercise any vested award shares and all
unvested award shares will be forfeited. All outstanding stock
options and SARs, both vested and non-vested, will be forfeited
in the event of termination for cause.
All of the stock options and SARs will become immediately vested
and exercisable, without regard to the per share price
restriction on premium award shares, upon a change in control of
Novelis.
Novelis
Founders Performance Awards
On March 24, 2005, our Board of Directors adopted the
Novelis Founders Performance Award Plan (the Founders Plan) to
allow for an additional compensation opportunity for certain of
our executives tied to Novelis share price improvement targets.
Participants earn performance share units (PSUs) if our share
price improvement targets are achieved within prescribed time
periods. The Founders Plan identifies three relevant performance
periods. The first performance period runs from March 24,
2005 to March 23, 2008, the second performance period runs
from March 24, 2006 to March 23, 2008 and the third
performance period runs from March 24, 2007 to
March 23, 2008. The share price improvement targets for
these three tranches are $23.57, $25.31 and $27.28,
respectively. An equal amount of PSUs may be earned during each
performance period if the applicable share price improvement
target is achieved during such period.
If earned, a particular tranche will be paid in cash on a
specified payment date, which is defined as the later of six
months from the date the specific share price improvement target
is achieved or twelve months after the start of the applicable
performance period. The value of a PSU equals the average of the
daily closing price of our common shares as reported on the New
York Stock Exchange for the last five trading days prior to the
payment date. On March 14, 2006, the Board of Directors
amended the Founders Plan in order to clarify when PSUs will be
earned under the second and third tranches of the Founders Plan
for periods beginning in 2006 and 2007, respectively.
The share price improvement target for the performance period
running from March 24, 2005 to March 23, 2008 has
already been achieved and 131,850 PSUs were earned on
June 20, 2005, and settled in cash in April 2006. Cash
payments were computed using a valuation date of March 24,
2006, which is the date that is twelve months after the start of
the applicable performance period. As of December 31, 2006,
a total of 188,900 PSUs remain outstanding.
The dollar value of PSUs paid in 2006 to our named executive
officers is set forth in the following table:
|
|
|
|
|
|
|
Performance Share
|
|
Name
|
|
Units Paid in 2006
|
|
|
William T. Monahan
|
|
$
|
0
|
|
Brian W. Sturgell
|
|
$
|
0
|
|
Rick Dobson
|
|
$
|
0
|
|
Geoffrey Batt
|
|
$
|
244,701
|
|
Martha Finn Brooks
|
|
$
|
478,325
|
|
John F. Morrison
|
|
$
|
145,008
|
|
Arnaud de Weert
|
|
$
|
0
|
|
Kevin Greenawalt
|
|
$
|
145,008
|
|
Christopher Bark-Jones
|
|
$
|
145,008
|
|
Pierre Arseneault
|
|
$
|
120,840
|
|
In connection with the proposed sale of the Company, our Board
of Directors amended the Founders Plan on February 10, 2007
to provide that the applicable threshold for (i) the second
tranche will be met as of February 28, 2007 and
(ii) the third tranche will be met as of March 26,
2007, for purposes of PSUs to be awarded under the Plan.
25
Total
Shareholders Return Plan
In connection with our spin-off from Alcan, each of our named
executive officers who was a participant in the Alcan Total
Shareholder Returns Performance Plan (Alcan TSR) ceased to
actively participate in and accrue benefits under the Alcan TSR
Plan. The accrued award amounts for each participant in the
Alcan TSR were converted into Novelis restricted share units.
The then current three-year performance periods, namely 2002
through 2005 and 2003 through 2006, were truncated as of the
date of the spin-off. At the end of each performance period,
each holder of restricted share units received the net proceeds
based on our common share price at that time, including declared
dividends. On October 1, 2006, the Novelis restricted share
units attributable to the 2003 to 2006 performance cycle were
paid to the following named executive officers and in the
following amounts:
|
|
|
|
|
|
|
Restricted
|
|
|
|
Share Units
|
|
Name
|
|
Paid in 2006
|
|
|
William T. Monahan
|
|
$
|
0
|
|
Brian W. Sturgell
|
|
$
|
963,987
|
|
Rick Dobson
|
|
$
|
0
|
|
Geoffrey Batt
|
|
$
|
87,723
|
|
Martha Finn Brooks
|
|
$
|
510,834
|
|
John F. Morrison
|
|
$
|
115,244
|
|
Arnaud de Weert
|
|
$
|
0
|
|
Kevin Greenawalt
|
|
$
|
115,244
|
|
Christopher Bark-Jones
|
|
$
|
391,605
|
|
Pierre Arseneault
|
|
$
|
122,237
|
|
26
Outstanding
Equity Awards at 2006 Fiscal Year-End
The table below sets forth the information regarding options and
stock awards held by our named executive officers as of
December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Value of
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
Market
|
|
Unearned
|
|
Unearned
|
|
|
of
|
|
Number of
|
|
|
|
|
|
Number of
|
|
Value of
|
|
Shares,
|
|
Shares,
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Units or
|
|
Units or
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Units of
|
|
Units of
|
|
Other
|
|
Other
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
Stock that
|
|
Stock that
|
|
Rights
|
|
Rights
|
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
have not
|
|
have not
|
|
that have
|
|
that have
|
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
not Vested
|
|
not Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
($)
|
|
Date
|
|
(#)
|
|
($) (1)
|
|
(#)
|
|
($) (1)
|
|
William T. Monahan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Sturgell
|
|
|
11,692
|
(2)
|
|
|
|
|
|
|
18.94
|
|
|
|
10/18/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99,220
|
(2)
|
|
|
|
|
|
|
19.03
|
|
|
|
9/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,114
|
(2)
|
|
|
|
|
|
|
21.49
|
|
|
|
9/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
438,751
|
(2)
|
|
|
|
|
|
|
23.74
|
|
|
|
9/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick Dobson
|
|
|
|
|
|
|
92,500
|
(3)
|
|
|
25.53
|
|
|
|
10/25/2013
|
|
|
|
19,500
|
(4)
|
|
|
543,075
|
|
|
|
|
|
|
|
|
|
Geoffrey Batt
|
|
|
4,564
|
(2)
|
|
|
|
|
|
|
18.94
|
|
|
|
1/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,844
|
(2)
|
|
|
|
|
|
|
19.03
|
|
|
|
1/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,883
|
(2)
|
|
|
|
|
|
|
21.49
|
|
|
|
1/1/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,766
|
(2)
|
|
|
|
|
|
|
23.74
|
|
|
|
8/11/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha Finn Brooks
|
|
|
101,205
|
|
|
|
33,734
|
(5)
|
|
|
23.96
|
|
|
|
8/1/2012
|
|
|
|
28,400
|
(4)
|
|
|
790,940
|
|
|
|
47,500
|
(6)
|
|
|
1,322,875
|
|
|
|
|
6,432
|
|
|
|
19,298
|
(5)
|
|
|
15.85
|
|
|
|
9/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,859
|
|
|
|
53,579
|
(5)
|
|
|
21.49
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38,993
|
|
|
|
116,981
|
(5)
|
|
|
23.74
|
|
|
|
9/22/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
163,230
|
(3)
|
|
|
25.53
|
|
|
|
10/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Morrison
|
|
|
1,389
|
|
|
|
4,167
|
(5)
|
|
|
18.94
|
|
|
|
10/18/2010
|
|
|
|
|
|
|
|
|
|
|
|
14,400
|
(6)
|
|
|
401,040
|
|
|
|
|
3,075
|
|
|
|
9,228
|
(5)
|
|
|
19.03
|
|
|
|
9/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,438
|
|
|
|
4,317
|
(5)
|
|
|
15.85
|
|
|
|
9/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,167
|
|
|
|
12,502
|
(5)
|
|
|
21.49
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,441
|
|
|
|
22,325
|
(5)
|
|
|
23.74
|
|
|
|
9/22/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,650
|
(3)
|
|
|
25.53
|
|
|
|
10/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arnaud de Weert
|
|
|
|
|
|
|
43,530
|
(3)
|
|
|
25.53
|
|
|
|
10/25/2013
|
|
|
|
8,200
|
(4)
|
|
|
228,370
|
|
|
|
|
|
|
|
|
|
Kevin Greenawalt
|
|
|
1,389
|
|
|
|
4,167
|
(5)
|
|
|
18.94
|
|
|
|
10/18/2010
|
|
|
|
8,200
|
(4)
|
|
|
228,370
|
|
|
|
14,400
|
(6)
|
|
|
401,040
|
|
|
|
|
3,307
|
|
|
|
9,921
|
(5)
|
|
|
19.03
|
|
|
|
9/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,570
|
|
|
|
4,713
|
(7)
|
|
|
15.85
|
|
|
|
9/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,167
|
|
|
|
12,502
|
(7)
|
|
|
21.49
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,441
|
|
|
|
22,325
|
(5)
|
|
|
23.74
|
|
|
|
9/22/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,530
|
(3)
|
|
|
25.53
|
|
|
|
10/25/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher Bark-Jones
|
|
|
4,630
|
(2)
|
|
|
|
|
|
|
18.94
|
|
|
|
10/18/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,811
|
(2)
|
|
|
8,433
|
(7)
|
|
|
19.03
|
|
|
|
9/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,109
|
(2)
|
|
|
15,330
|
(7)
|
|
|
15.85
|
|
|
|
11/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,692
|
(2)
|
|
|
41,077
|
(7)
|
|
|
21.49
|
|
|
|
11/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,849
|
(2)
|
|
|
95,549
|
(7)
|
|
|
23.74
|
|
|
|
11/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pierre Arseneault
|
|
|
3,373
|
(2)
|
|
|
|
|
|
|
18.94
|
|
|
|
10/18/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,583
|
(2)
|
|
|
|
|
|
|
19.03
|
|
|
|
6/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,400
|
(2)
|
|
|
|
|
|
|
15.85
|
|
|
|
6/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,646
|
(2)
|
|
|
|
|
|
|
21.49
|
|
|
|
6/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,030
|
(2)
|
|
|
|
|
|
|
23.74
|
|
|
|
6/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|
(1) |
|
Value is based on December 29, 2006 NYSE closing price of
$27.85 per share. |
|
(2) |
|
The options for Messrs. Sturgell, Batt, Bark-Jones, and
Arseneault include conversion options that vested according to
the conversion option vesting schedule as well as conversion
options that vested upon retirement per the terms of the
Conversion Plan, as amended. |
|
(3) |
|
These options (or stock appreciation rights in the case of
Mr. de Weert) were issued under the 2006 Incentive Plan and
become vested and exercisable in equal installments on
October 26, 2007, 2008, 2009 and 2010. Vesting is
accelerated upon a change in control. |
|
(4) |
|
Represents share units payable under the executives
recognition agreement dated September 25, 2006. The share
units vest in equal installments on December 31, 2007 and
December 31, 2008. |
|
(5) |
|
Effective with our spin-off from Alcan, these options were
issued under the 2005 Conversion Plan and become vested and
exercisable in equal installments on January 6, 2007, 2008
and 2009. Vesting is accelerated upon a change in control or
upon retirement. |
|
(6) |
|
Represents performance shares under the Founders Performance
Awards Plan. |
|
(7) |
|
Effective with our spin-off from Alcan, these stock appreciation
rights were issued under the Stock Price Appreciation Unit Plan
and become vested and exercisable in equal installments on
January 6, 2007, 2008 and 2009. Vesting is accelerated upon
a change in control. |
Option
Exercises and Stock Vested in 2006
The table below sets forth the information regarding stock
options that were exercised during 2006 and stock awards that
vested during 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
Acquired
|
|
|
Value Realized
|
|
|
Acquired
|
|
|
Value Realized
|
|
|
|
on Exercise
|
|
|
on Exercise
|
|
|
on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)(1)
|
|
|
William T. Monahan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Sturgell
|
|
|
65,700
|
|
|
|
769,567
|
|
|
|
40,704
|
(2)
|
|
|
963,987
|
|
Rick Dobson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geoffrey Batt
|
|
|
|
|
|
|
|
|
|
|
15,854
|
(3)
|
|
|
332,424
|
|
Martha Finn Brooks
|
|
|
|
|
|
|
|
|
|
|
45,320
|
(4)
|
|
|
989,159
|
|
John F. Morrison
|
|
|
|
|
|
|
|
|
|
|
12,066
|
(5)
|
|
|
260,252
|
|
Arnaud de Weert
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Greenawalt
|
|
|
|
|
|
|
|
|
|
|
12,066
|
(6)
|
|
|
260,252
|
|
Christopher Bark-Jones
|
|
|
|
|
|
|
|
|
|
|
23,735
|
(7)
|
|
|
536,613
|
|
Pierre Arseneault
|
|
|
|
|
|
|
|
|
|
|
11,162
|
(8)
|
|
|
243,077
|
|
|
|
|
(1) |
|
All performance shares under the Founders Performance Awards
Plan and the Total Shareholder Returns Performance Plan are
settled in cash. |
|
(2) |
|
Represents 40,704 performance shares under the Total Shareholder
Returns Performance Plan. |
|
(3) |
|
Represents 12,150 performance shares under the Founders
Performance Awards Plan and 3,704 performance shares under the
Total Shareholder Returns Performance Plan. |
|
(4) |
|
Represents 23,750 performance shares under the Founders
Performance Awards Plan and 21,570 performance shares under the
Total Shareholder Returns Performance Plan. |
|
(5) |
|
Represents 7,200 performance shares under the Founders
Performance Awards Plan and 4,866 performance shares under the
Total Shareholder Returns Performance Plan. |
|
(6) |
|
Represents 7,200 performance shares under the Founders
Performance Awards Plan and 4,866 performance shares under the
Total Shareholder Returns Performance Plan. |
28
|
|
|
(7) |
|
Represents 7,200 performance shares under the Founders
Performance Awards Plan and 16,535 performance shares under the
Total Shareholder Returns Performance Plan. |
|
(8) |
|
Represents 6,000 performance shares under the Founders
Performance Awards Plan and 5,162 performance shares under the
Total Shareholder Returns Performance Plan. |
Pension
Benefits in 2006
The table below sets forth information regarding the present
value as of December 31, 2006 of the accumulated benefits
of our named executive officers under our defined benefit
pension plans (both qualified and non-qualified).
U.S. executives who were hired on or after January 1,
2005 are not eligible to participate in our defined benefit
pension plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Years
|
|
Present Value
|
|
Payments
|
|
|
|
|
Credited
|
|
of Accumulated
|
|
during Last
|
|
|
|
|
Service
|
|
Benefit
|
|
Fiscal Year
|
Name
|
|
Plan Name(1)
|
|
(#)
|
|
($)(2)
|
|
($)
|
|
William T. Monahan
|
|
Not eligible
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian W. Sturgell
|
|
Novelis Pension Plan
|
|
|
17.75
|
(3)
|
|
|
554,717
|
|
|
|
|
|
|
|
Novelis SERP
|
|
|
17.75
|
(3)
|
|
|
2,059,046
|
|
|
|
|
|
|
|
Novelis Pension Plan for Officers
|
|
|
10.17
|
|
|
|
1,529,350
|
|
|
|
1,529,350
|
(4)
|
Rick Dobson
|
|
Not eligible
|
|
|
|
|
|
|
|
|
|
|
|
|
Geoffrey Batt
|
|
Supplemental Retirement
|
|
|
2.25
|
|
|
|
346,994
|
|
|
|
|
|
|
|
Arrangement(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha Finn Brooks
|
|
Novelis Pension Plan
|
|
|
4.42
|
|
|
|
80,495
|
|
|
|
|
|
|
|
Novelis SERP
|
|
|
4.42
|
|
|
|
250,285
|
|
|
|
|
|
John F. Morrison
|
|
Novelis Pension Plan
|
|
|
25.83
|
|
|
|
696,933
|
|
|
|
|
|
|
|
Novelis SERP
|
|
|
25.83
|
|
|
|
647,942
|
|
|
|
|
|
Arnaud de Weert
|
|
Pensionskasse Alcan Schweiz
|
|
|
0.67
|
|
|
|
9,428
|
|
|
|
|
|
Kevin Greenawalt
|
|
Novelis Pension Plan
|
|
|
23.5
|
|
|
|
482,506
|
|
|
|
|
|
|
|
Novelis SERP
|
|
|
23.5
|
|
|
|
465,830
|
|
|
|
|
|
Christopher Bark-Jones
|
|
Novelis Pension Plan (UK)
|
|
|
0.83
|
|
|
|
170,388
|
|
|
|
1,304
|
|
|
|
Novelis Pension Plan for Officers
|
|
|
4.83
|
|
|
|
402,378
|
|
|
|
402,378
|
(6)
|
Pierre Arseneault
|
|
Novelis Pension Plan
|
|
|
25.58
|
|
|
|
522,484
|
|
|
|
|
|
|
|
Novelis SERP
|
|
|
25.58
|
|
|
|
636,950
|
|
|
|
|
|
|
|
|
(1) |
|
See Compensation Discussion and Analysis Elements of
Our Compensation, Employee Benefits for a discussion of these
plans. |
|
(2) |
|
See Note 15 to our audited financial statements for the
fiscal year ended December 31, 2006, for a discussion of
the assumptions used in the calculation of these amounts. |
|
(3) |
|
Pursuant to Mr. Sturgells severance agreement dated
December 5, 2005, he will continue to accrue pension
service through September 1, 2009. |
|
(4) |
|
Mr. Sturgells benefit under the Pension Plan for
Officers was paid in a single lump sum on February 28,
2007, in connection with his termination of employment. |
|
(5) |
|
This arrangement applies solely to Mr. Batt and was
negotiated as part of his commencement of employment on
May 18, 2004. The annual lifetime benefit, commencing at
age 65, is equal to $15,000 times the number of years and
fractional years of service completed after May 18, 2004.
In the event of early retirement, the annual benefit will be
actuarially adjusted applying the early retirement factors under
the Novelis Pension Plan. |
|
(6) |
|
Mr. Bark-Jones benefit under the Pension Plan for
Officers was paid in a single lump sum on November 23,
2006, in connection with his termination of employment. |
29
The following table shows estimated retirement benefits,
expressed as a percentage of eligible earnings, payable upon
normal retirement at age 65:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years of Service
|
|
|
|
10
|
|
|
15
|
|
|
20
|
|
|
25
|
|
|
30
|
|
|
35
|
|
|
U.S. Pension Plan
|
|
|
17
|
%
|
|
|
25
|
%
|
|
|
34
|
%
|
|
|
42
|
%
|
|
|
51
|
%
|
|
|
59
|
%
|
U.K. Pension
|
|
|
17
|
%
|
|
|
26
|
%
|
|
|
35
|
%
|
|
|
43
|
%
|
|
|
52
|
%
|
|
|
60
|
%
|
Swiss Pension Scheme
|
|
|
18
|
%
|
|
|
27
|
%
|
|
|
36
|
%
|
|
|
45
|
%
|
|
|
54
|
%
|
|
|
63
|
%
|
Pension Plan for Officers
|
|
|
30
|
%
|
|
|
40
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
Nonqualified
Deferred Compensation
We maintain a non-qualified supplemental defined contribution
plan for certain executives who are not eligible to participate
in the Novelis Pensions Plan and Novelis SERP. No contributions
were made to this plan for 2006 for any of our named executive
officers and none of our named executive officers have an
existing account balance under the plan.
Potential
Payments Upon Termination or Change in Control
This section provides an estimate of the payments and benefits
that would be paid to certain of our named executive officers,
at December 31, 2006, upon voluntary or involuntary
termination of employment. This section, however, does not
reflect any payments or benefits that would be paid to our
salaried employees generally, including for example accrued
salary and vacation pay; regular pension benefits under our
qualified and non-qualified defined benefit plans; normal
distribution of account balances under our qualified and
non-qualified defined contribution plans; or normal retirement,
death or disability benefits.
Messrs. Sturgell, Batt, Bark-Jones and Arsenault are not
shown below because they were not serving as one of our
executive officers at the end of 2006. In lieu of benefits to
which such executives might otherwise have been entitled, each
executive received payments in accordance with the terms of
their respective separation agreements described above. In
addition, Mr. Monahan is not shown below because he ceased
serving as our Interim Chief Executive Officer effective
December 31, 2006, and was not entitled to receive any
severance-related payment following his resignation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rick Dobson(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
us Without
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cause or by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good Reason in
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
Termination by
|
|
|
Connection with
|
|
|
|
|
|
|
Termination by
|
|
|
Termination by
|
|
|
us Without
|
|
|
Change in
|
|
|
Death or
|
|
|
|
Executive
|
|
|
us for Cause
|
|
|
Cause
|
|
|
Control
|
|
|
Disability
|
|
Type of Payment
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Short-Term Incentive Pay
|
|
|
140,625
|
(2)
|
|
|
|
|
|
|
140,625
|
(2)
|
|
|
140,625
|
(2)
|
|
|
140,625
|
(2)
|
Severance
|
|
|
|
|
|
|
|
|
|
|
675,000
|
(3)
|
|
|
1,575,000
|
(4)
|
|
|
|
|
Retirement plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,750
|
(5)
|
|
|
|
|
Lump sum cash payment for
continuation of health coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,976
|
(6)
|
|
|
|
|
Continued group life insurance
coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,620
|
(7)
|
|
|
|
|
Change in control tax
gross-up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
930,744
|
(8)
|
|
|
|
|
Accelerated vesting of outstanding
stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
214,600
|
(9)
|
|
|
214,600
|
(9)
|
Total
|
|
|
140,625
|
|
|
|
|
|
|
|
815,625
|
|
|
|
2,995,315
|
|
|
|
355,225
|
|
30
|
|
|
(1) |
|
In addition to the estimated payments set forth in this table,
the executive would be eligible for payments or benefits that
would be paid to our salaried employees generally upon
termination of employment (including, for example, earned but
unpaid base salary and accrued vacation (approximately $34,615
at December 31, 2006). Mr. Dobson was not eligible for
retirement on December 31, 2006. |
|
(2) |
|
This amount represents 100% of the executives target
short-term incentive opportunity for 2006, prorated for his
service. |
|
(3) |
|
This amount is equal to 150% of executives annual base
salary and would be paid pursuant to the executives
Recognition Agreement. |
|
(4) |
|
This amount is equal to two times the sum of executives
base salary and target short-term incentive and would be paid
pursuant to the executives Change in Control Agreement. |
|
(5) |
|
This amount is equal to the present value of two additional
years of benefit accrual under our qualified and non-qualified
retirement plans and is payable pursuant to the executives
Change in Control Agreement. See the Pension Benefits table for
pension benefits accrued as of December 31, 2006. |
|
(6) |
|
Pursuant to the executives Change in Control Agreement,
this amount is intended to assist the executive in paying
post-employment health coverage and is equal to 24 months
times the COBRA premium rate in effect at December 31,
2006, grossed up for applicable taxes using an assumed tax rate
of 40%. |
|
(7) |
|
The executives Change in Control Agreement provides that
the executive will be entitled to two additional years of
coverage under our group life insurance plan. |
|
(8) |
|
The executives Change in Control Agreement provides that
we will gross him up for any tax imposed under Section 4999
of the Internal Revenue Code. The amount shown in this table is
estimated using the highest marginal federal, state and local
tax rate and taking into account the effect of any loss of
personal exemptions resulting from receipt of the
gross-up
payment. |
|
(9) |
|
The amounts are based on the NYSE closing price on
December 29, 2006 of $27.85 per share. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martha Finn Brooks(1)
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
|
|
|
|
|
|
|
|
us Without
|
|
|
|
|
|
|
|
|
|
|
Cause or by
|
|
|
|
|
|
|
|
|
|
|
Executive for
|
|
|
|
|
|
|
|
|
|
|
Good Reason in
|
|
|
|
|
Voluntary
|
|
|
|
Termination by
|
|
Connection with
|
|
|
|
|
Termination by
|
|
Termination by
|
|
us Without
|
|
Change in
|
|
Death or
|
|
|
Executive
|
|
us for Cause
|
|
Cause
|
|
Control
|
|
Disability
|
Type of Payment
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Short-Term Incentive Pay
|
|
|
589,500
|
(2)
|
|
|
|
|
|
|
589,500
|
(2)
|
|
|
589,500
|
(2)
|
|
|
589,500
|
(2)
|
Severance
|
|
|
|
|
|
|
|
|
|
|
982,500
|
(3)
|
|
|
2,489,000
|
(4)
|
|
|
|
|
Retirement plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
390,740
|
(5)
|
|
|
|
|
Lump sum cash payment for
continuation of health coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,976
|
(6)
|
|
|
|
|
Continued group life insurance
coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,149
|
(7)
|
|
|
|
|
Change in control tax
gross-up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated vesting of outstanding
stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,563,050(8
|
)
|
|
|
1,563,050
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Death
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
378,694
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Disability
|
)
|
Total
|
|
|
589,500
|
|
|
|
|
|
|
|
1,572,000
|
|
|
|
5,090,415
|
|
|
|
2,152,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Death
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
968,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Disability
|
)
|
31
|
|
|
(1) |
|
In addition to the estimated payments set forth in this table,
the executive would be eligible for payments or benefits that
would be paid to our salaried employees generally upon
termination of employment (including, for example, earned but
unpaid base salary and accrued vacation (approximately $50,385
at December 31, 2006). Ms. Brooks was not eligible for
retirement on December 31, 2006. |
|
(2) |
|
This amount represents 100% of the executives target
short-term incentive opportunity for 2006. |
|
(3) |
|
This amount is equal to 150% of executives annual base
salary and would be paid pursuant to the executives
Recognition Agreement. |
|
(4) |
|
This amount is equal to two times the sum of executives
base salary and target short-term incentive and would be paid
pursuant to the executives Change in Control Agreement. |
|
(5) |
|
This amount is equal to the present value of two additional
years of benefit accrual under our qualified and non-qualified
retirement plans and is payable pursuant to the executives
Change in Control Agreement. See the Pension Benefits table for
pension benefits accrued as of December 31, 2006. |
|
(6) |
|
Pursuant to the executives Change in Control Agreement,
this amount is intended to assist the executive in paying
post-employment health coverage and is equal to 24 months
times the COBRA premium rate in effect at December 31,
2006, grossed up for applicable taxes using an assumed tax rate
of 40%. |
|
(7) |
|
The executives Change in Control Agreement provides that
the executive will be entitled to two additional years of
coverage under our group life insurance plan. |
|
(8) |
|
The amounts are based on the NYSE closing price on
December 29, 2006 of $27.85 per share. |
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Morrison(1)
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
|
|
|
|
|
|
|
|
us Without
|
|
|
|
|
|
|
|
|
|
|
Cause or by
|
|
|
|
|
|
|
|
|
|
|
Executive for
|
|
|
|
|
|
|
|
|
|
|
Good Reason in
|
|
|
|
|
Voluntary
|
|
|
|
Termination by
|
|
Connection with
|
|
Retirement,
|
|
|
Termination by
|
|
Termination by
|
|
us Without
|
|
Change in
|
|
Death or
|
|
|
Executive
|
|
us for Cause
|
|
Cause
|
|
Control
|
|
Disability
|
Type of Payment
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Short-Term Incentive Pay
|
|
|
152,350
|
(2)
|
|
|
|
|
|
|
152,350
|
(2)
|
|
|
152,350
|
(2)
|
|
|
152,350
|
(2))
|
Severance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
858,700
|
(3)
|
|
|
|
|
Retirement Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lump sum cash payment for
continuation of health coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued group life insurance
coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in control tax
gross-up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated vesting of outstanding
stock appreciation rights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
417,339
|
(4)
|
|
|
341,591
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Retirement
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
417,339
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Death
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,748
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Disability
|
)
|
Total
|
|
|
152,350
|
|
|
|
|
|
|
|
152,350
|
|
|
|
1,428,389
|
|
|
|
493,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Retirement
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
569,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Death
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
228,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Disability
|
)
|
|
|
|
(1) |
|
In addition to the estimated payments set forth in this table,
the executive would be eligible for payments or benefits that
would be paid to our salaried employees generally upon
termination of employment (including, for example, earned but
unpaid base salary and accrued vacation (approximately $21,208
at December 31, 2006). Mr. Morrison was eligible for
retirement on December 31, 2006. See the Pension Benefits
table for pension benefits accrued as of December 31, 2006. |
|
(2) |
|
This amount represents 100% of the executives target
short-term incentive opportunity for 2006. |
|
(3) |
|
This amount is equal to two times the sum of executives
base salary and target short-term incentive and would be paid
pursuant to the executives Change in Control Agreement. |
|
(4) |
|
The amounts are based on the NYSE closing price on
December 29, 2006 of $27.85 per share. |
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arnaud de Weert(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
us Without
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cause or by
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good Reason in
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
Termination by
|
|
|
Connection with
|
|
|
|
|
|
|
Termination by
|
|
|
Termination by
|
|
|
us Without
|
|
|
Change in
|
|
|
Death or
|
|
|
|
Executive
|
|
|
us for Cause
|
|
|
Cause
|
|
|
Control
|
|
|
Disability
|
|
Type of Payment
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Short-Term Incentive Pay
|
|
|
329,925
|
(2)
|
|
|
|
|
|
|
329,925
|
(2)
|
|
|
329,925
|
(2)
|
|
|
329,925
|
(2)
|
Severance
|
|
|
|
|
|
|
|
|
|
|
791,820
|
(3)
|
|
|
1,715,610
|
(4)
|
|
|
|
|
Retirement plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,054
|
(5)
|
|
|
|
|
Lump sum cash payment for
continuation of health coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,976
|
(6)
|
|
|
|
|
Continued group life insurance
coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in control tax
gross-up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated vesting of outstanding
stock appreciation rights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,990
|
(7)
|
|
|
100,990
|
(7)
|
Total
|
|
|
329,925
|
|
|
|
|
|
|
|
1,121,745
|
|
|
|
2,337,555
|
|
|
|
430,915
|
|
|
|
|
(1) |
|
In addition to the estimated payments set forth in this table,
the executive would be eligible for payments or benefits that
would be paid to our salaried employees generally upon
termination of employment (including, for example, earned but
unpaid base salary and accrued vacation (approximately $40,606
at December 31, 2006). Mr. de Weert was not eligible
for retirement on December 31, 2006. |
|
(2) |
|
This amount represents 100% of the executives target
short-term incentive opportunity for 2006. |
|
(3) |
|
This amount is equal to 150% of executives annual base
salary and would be paid pursuant to the executives
Recognition Agreement. |
|
(4) |
|
This amount is equal to two times the sum of executives
base salary and target short-term incentive and would be paid
pursuant to the executives Change in Control Agreement. |
|
(5) |
|
This amount is equal to the present value of two additional
years of benefit accrual under our qualified and non-qualified
retirement plans and is payable pursuant to the executives
Change in Control Agreement. See the Pension Benefits table for
pension benefits accrued as of December 31, 2006. |
|
(6) |
|
Pursuant to the executives Change in Control Agreement,
this amount is intended to assist the executive in paying
post-employment health coverage and is equal to 24 months
times the COBRA premium rate in effect at December 31,
2006, grossed up for applicable taxes using an assumed tax rate
of 40%. |
|
(7) |
|
The amounts are based on the NYSE closing price on
December 29, 2006 of $27.85 per share. |
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin Greenawalt(1)
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
|
|
|
|
|
|
|
|
us Without
|
|
|
|
|
|
|
|
|
|
|
Cause or by
|
|
|
|
|
|
|
|
|
|
|
Executive for
|
|
|
|
|
|
|
|
|
|
|
Good Reason in
|
|
|
|
|
Voluntary
|
|
|
|
Termination by
|
|
Connection with
|
|
|
|
|
Termination by
|
|
Termination by
|
|
us Without
|
|
Change in
|
|
Death or
|
|
|
Executive
|
|
us for Cause
|
|
Cause
|
|
Control
|
|
Disability
|
Type of Payment
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Short-Term Incentive Pay
|
|
|
186,000
|
(2)
|
|
|
|
|
|
|
186,000
|
(2)
|
|
|
186,000
|
(2)
|
|
|
186,000
|
(2)
|
Severance
|
|
|
|
|
|
|
|
|
|
|
465,000
|
(3)
|
|
|
992,000
|
(4)
|
|
|
|
|
Retirement plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
378,942
|
(5)
|
|
|
|
|
Lump sum cash payment for
continuation of health coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,976
|
(6)
|
|
|
|
|
Continued group life insurance
coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,769
|
(7)
|
|
|
|
|
Change in control tax
gross-up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated vesting of outstanding
stock options and Stock Price Appreciation Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
453,445
|
(8)
|
|
|
453,445
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Death
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,990
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Disability
|
)
|
Total
|
|
|
186,000
|
|
|
|
|
|
|
|
651,000
|
|
|
|
2,067,132
|
|
|
|
639,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Death
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
286,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Disability
|
)
|
|
|
|
(1) |
|
In addition to the estimated payments set forth in this table,
the executive would be eligible for payments or benefits that
would be paid to our salaried employees generally upon
termination of employment (including, for example, earned but
unpaid base salary and accrued vacation (approximately $23,846
at December 31, 2006). Mr. Greenawalt was not eligible
for retirement on December 31, 2006. |
|
(2) |
|
This amount represents 100% of the executives target
short-term incentive opportunity for 2006. |
|
(3) |
|
This amount is equal to 150% of executives annual base
salary and would be paid pursuant to the executives
Recognition Agreement. |
|
(4) |
|
This amount is equal to two times the sum of executives
base salary and target short-term incentive and would be paid
pursuant to the executives Change in Control Agreement. |
|
(5) |
|
This amount is equal to the present value of two additional
years of benefit accrual under our qualified and non-qualified
retirement plans and is payable pursuant to the executives
Change in Control Agreement. See the Pension Benefits table for
pension benefits accrued as of December 31, 2006. |
|
(6) |
|
Pursuant to the executives Change in Control Agreement,
this amount is intended to assist the executive in paying
post-employment health coverage and is equal to 24 months
times the COBRA premium rate in effect at December 31,
2006, grossed up for applicable taxes using an assumed tax rate
of 40%. |
|
(7) |
|
The executives Change in Control Agreement provides that
the executive will be entitled to two additional years of
coverage under our group life insurance plan. |
|
(8) |
|
The amounts are based on the NYSE closing price on
December 29, 2006 of $27.85 per share. |
35
Director
Compensation
The Chair of our Board of Directors is entitled to receive
compensation equal to $250,000 per year, and the Chair of
our Audit Committee is entitled to receive $175,000 per
year. Each of our other non-executive directors is entitled to
receive compensation equal to $150,000 per year, plus an
additional $5,000 if a member of our Audit Committee.
Directors fees are paid in quarterly installments. We have
adopted a Deferred Share Unit Plan for Non-Executive Directors,
pursuant to which 50% of our directors compensation is
required to be paid in the form of deferred stock units (which
we refer to as DDSUs), and 50% in the form of either cash,
additional DDSUs, or a combination of the two at the election of
each non-executive director, unless otherwise determined by our
Committee. DDSUs are the economic equivalent of our shares. An
employee of Novelis who is also a director is not entitled to
receive fees for serving on our Board of Directors.
Because at least one half of our non-executive directors
compensation will be paid in DDSUs, our non-executive directors
are not required to own a specific amount of our shares. A
director cannot redeem the accumulated DDSUs until he or she
ceases to be a member of our Board of Directors.
Our Board of Directors believes that compensation in the form of
DDSUs together with the requirement that our non-executive
directors retain all DDSUs until they cease to be a director
helps to align the interests of our non-executive directors with
those of our shareholders.
The number of DDSUs to be credited to the account of a
non-executive director each quarter will be determined by
dividing the quarterly amount payable in DDSUs, by the average
closing prices of our common shares on the Toronto (adjusted for
the noon exchange rate) and New York stock exchanges on the last
five trading days of the quarter. Additional DDSUs will be
credited to each non-executive director in an amount equal to
the dividends declared on our common shares. The DDSUs may be
redeemed in cash, our common shares or a combination thereof, at
the election of the director. The amount to be paid by us upon
redemption will be calculated by multiplying the accumulated
balance of DDSUs by the average closing prices of our common
shares on the Toronto (adjusted for the noon exchange rate) and
New York stock exchanges on the last five trading days prior to
the redemption date.
Our non-executive directors are also entitled to reimbursement
for transportation, lodging and other expenses incurred in
attending meetings of our Board of Directors and meetings of
committees of our Board of Directors. Our non-executive
directors who are not Canadian residents are entitled to
reimbursement for tax advice related to director compensation.
36
The table below sets forth the compensation received by our
non-employee directors during 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
or Paid in Cash
|
|
|
Stock Awards
|
|
|
Compensation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
Edward A. Blechschmidt
|
|
|
|
|
|
|
80,282
|
|
|
|
|
|
|
|
80,282
|
|
Jacques Bougie, O.C.
|
|
|
|
|
|
|
126,616
|
|
|
|
|
|
|
|
126,616
|
|
Charles G. Cavell
|
|
|
76,555
|
|
|
|
77,390
|
|
|
|
|
|
|
|
153,945
|
|
Clarence J. Chandran
|
|
|
|
|
|
|
151,616
|
|
|
|
|
|
|
|
151,616
|
|
C. Roberto Cordaro
|
|
|
75,000
|
|
|
|
75,808
|
|
|
|
535
|
|
|
|
151,343
|
|
Helmut Eschwey
|
|
|
75,000
|
|
|
|
75,808
|
|
|
|
535
|
|
|
|
151,343
|
|
David J. Fitzpatrick
|
|
|
77,500
|
|
|
|
78,215
|
|
|
|
535
|
|
|
|
156,250
|
|
Suzanne Labarge
|
|
|
87,500
|
|
|
|
88,443
|
|
|
|
|
|
|
|
175,943
|
|
Patrick J. Monahan(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William T. Monahan
|
|
|
108,333
|
(4)
|
|
|
109,154
|
(4)
|
|
|
|
|
|
|
217,487
|
(4)
|
J.E. Newall, O.C.
|
|
|
|
|
|
|
146,202
|
|
|
|
|
|
|
|
146,202
|
|
Sheldon Plener(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rudolf Rupprecht
|
|
|
76,555
|
|
|
|
77,390
|
|
|
|
|
|
|
|
153,945
|
|
Kevin Twomey
|
|
|
46,350
|
|
|
|
46,365
|
|
|
|
|
|
|
|
92,715
|
|
John Watson
|
|
|
|
|
|
|
41,622
|
|
|
|
|
|
|
|
41,622
|
|
Edward V. Yang
|
|
|
76,555
|
|
|
|
77,390
|
|
|
|
535
|
|
|
|
154,480
|
|
|
|
|
(1) |
|
This column reflects the value of each directors fees
credited under the Deferred Share Unit Plan for Non-Executive
Directors (plus dividend equivalents) and recognized for
financial statement reporting purposes for the fiscal year ended
December 31, 2006, in accordance with SFAS 123(R)
(excluding the impact of estimated forfeitures, if any). The
deferred share units granted in 2006 have a weighted average
grant date fair value of $22.77 per share. Deferred share
units are fully vested at all times and are not subject to
forfeiture. The number of deferred share units credited to each
director under the Deferred Share Unit Plan for Non-Executive
Directors is as follows: |
|
|
|
|
|
|
|
|
|
|
|
2006 Deferred Share
|
|
|
Aggregate Deferred
|
|
Name
|
|
Units (#)
|
|
|
Share Units (#)
|
|
|
Edward A. Blechschmidt
|
|
|
3,197
|
|
|
|
3,197
|
|
Jacques Bougie, O.C.
|
|
|
5,725
|
|
|
|
12,521
|
|
Charles G. Cavell
|
|
|
3,398
|
|
|
|
6,909
|
|
Clarence J. Chandran
|
|
|
6,647
|
|
|
|
13,443
|
|
C. Roberto Cordaro
|
|
|
3,323
|
|
|
|
6,721
|
|
Helmut Eschwey
|
|
|
3,323
|
|
|
|
6,721
|
|
David J. Fitzpatrick
|
|
|
3,428
|
|
|
|
6,339
|
|
Suzanne Labarge
|
|
|
3,877
|
|
|
|
7,842
|
|
Patrick J. Monahan
|
|
|
|
|
|
|
|
|
William T. Monahan
|
|
|
4,706
|
|
|
|
8,103
|
|
J.E. Newall, O.C.
|
|
|
7,054
|
|
|
|
22,911
|
|
Sheldon Plener
|
|
|
|
|
|
|
|
|
Rudolf Rupprecht
|
|
|
3,398
|
|
|
|
6,909
|
|
Kevin Twomey
|
|
|
1,892
|
|
|
|
1,892
|
|
John Watson
|
|
|
1,622
|
|
|
|
1,622
|
|
Edward V. Yang
|
|
|
3,398
|
|
|
|
6,909
|
|
|
|
|
(2) |
|
This column represents expenses paid by us for the preparation
of 2005 Canadian nonresident tax returns. |
37
|
|
|
(3) |
|
Patrick J. Monahan and Sheldon Plener were appointed to the
Board of Directors effective December 26, 2006. |
|
(4) |
|
Mr. Monahan received a base salary of $65,000 per
month while serving as our Interim Chief Executive Officer from
August 28, 2006 to December 31, 2006. He also received
directors fees of $217,487, of which $108,333 was paid in
cash and $109,154 was credited in the form of deferred share
units and dividend equivalents under the Deferred Share Unit
Plan for Non-Executive Executive Directors. The Board of
Directors approved a discretionary bonus of $250,000 during the
first quarter of 2007 in recognition of Mr. Monahans
successful management of Novelis and his contribution to the
sale process. |
Compensation
Committee Interlocks and Insider Participation
In 2006, only Independent Directors served on our Human
Resources Committee. Clarence J. Chandran was the Chairman of
the Committee. The other Committee members during all or part of
the year were Charles G. Cavell, C. Roberto Cordaro, Helmut
Eschwey, Suzanne Labarge, William T. Monahan, J.E. Newall, and
Edward V. Yang. Mr. Monahan resigned from the Human
Resources Committee when he became our Interim Chief Executive
Officer during 2006. No member of our Human Resources Committee
had any relationship with us requiring disclosure under
Item 404 of SEC
Regulation S-K.
During 2006, none of our executive officers served as:
|
|
|
|
|
a member of the compensation committee (or other board committee
performing equivalent functions or, in the absence of any such
committee, the entire Board of Directors) of another entity, one
of whose executive officers served on our Human Resources
Committee;
|
|
|
|
a director of another entity, one of whose executive officers
served on our Human Resources Committee; or
|
|
|
|
a member of the compensation committee (or other board committee
performing equivalent functions or, in the absence of any such
committee, the entire Board of Directors) of another entity, one
of whose executive officers served as one of our directors.
|
|
|
Item 12.
|
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
|
Share
Ownership of Certain Beneficial Owners
Based on filings with the SEC, the following shareholders are
known by us to own more than 5% of our common shares as of
March 23, 2007:
|
|
|
|
|
|
|
|
|
|
|
Common Shares
|
|
|
|
|
Beneficially
|
|
Percentage of
|
Name and Address of Beneficial Owner
|
|
Owned
|
|
Class*
|
|
Noonday Asset Management, LP and
Farallon Capital Management, LLC(1)
|
|
|
4,790,000
|
|
|
|
6.4
|
%
|
|
|
|
* |
|
As of March 23, 2007, we had 75,350,963 common shares
outstanding. |
|
(1) |
|
The following information is based on a Schedule 13D filed
on March 19, 2007 with the Securities and Exchange
Commission by Noonday Asset Management, LP and Farallon Capital
Management, LLC on behalf of themselves and certain related
parties. The address of Noonday Asset Management, LP is
227 West Trade Street, Suite 2140, Charlotte, NC
28202. The address for Farallon Capital Management, LLC is One
Maritime Plaza, Suite 2100 San Francisco, California
94111. The Form 13D indicates that Noonday Asset
Management, LP is the beneficial owner of 4,790,000 common
shares. Noonday Asset Management, LP has shared voting power
over 4,790,000 common shares and has shared dispositive power
over 4,790,000 common shares. |
38
Share
Ownership of Directors and Executive Officers
The following table sets forth, as of March 23, 2007,
beneficial ownership of shares of our common shares by each
director and named executive officer and all directors, nominees
and executive officers as a group.
Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power
with respect to securities. Options, warrants and convertible
securities that are currently exercisable or convertible within
60 days of March 23, 2007, into our common shares are
deemed to be outstanding and to be beneficially owned by the
person holding the options, warrants or convertible securities
for the purpose of computing the percentage ownership of the
person, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person.
The address for the following individuals is: c/o Novelis Inc.,
3399 Peachtree Road NE; Suite 1500; Atlanta, GA 30326.
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially
|
|
|
Percentage
|
|
Name of Beneficial Owner
|
|
Owned
|
|
|
of Class
|
|
|
Edward A. Blechschmidt, Director
and Acting Chief Executive Officer(1)
|
|
|
3,197
|
|
|
|
*
|
|
William T. Monahan, Chairman of
the Board(2)
|
|
|
11,104
|
|
|
|
*
|
|
Charles G. Cavell, Director(3)
|
|
|
6,909
|
|
|
|
*
|
|
Clarence J. Chandran, Director(4)
|
|
|
14,243
|
|
|
|
*
|
|
C. Roberto Cordaro, Director(5)
|
|
|
6,722
|
|
|
|
*
|
|
Helmut Eschwey, Director(6)
|
|
|
6,722
|
|
|
|
*
|
|
David J. FitzPatrick, Director(7)
|
|
|
11,339
|
|
|
|
*
|
|
Suzanne Labarge, Director(8)
|
|
|
10,842
|
|
|
|
*
|
|
Patrick J. Monahan, Director
|
|
|
0
|
|
|
|
*
|
|
Sheldon Plener, Director
|
|
|
0
|
|
|
|
*
|
|
Rudolf Rupprecht, Director(9)
|
|
|
6,909
|
|
|
|
*
|
|
Kevin M. Twomey, Director(10)
|
|
|
1,892
|
|
|
|
*
|
|
Edward V. Yang, Director(11)
|
|
|
6,909
|
|
|
|
*
|
|
Martha Finn Brooks, Chief
Operating Officer
|
|
|
264,021
|
|
|
|
*
|
|
Rick Dobson, Chief Financial
Officer
|
|
|
0
|
|
|
|
*
|
|
Arnaud de Weert, Senior Vice
President and President Europe
|
|
|
0
|
|
|
|
*
|
|
Kevin Greenawalt, Senior Vice
President and President North America
|
|
|
24,304
|
|
|
|
*
|
|
Brian W. Sturgell, Former Chief
Executive Officer(12)
|
|
|
34,264
|
|
|
|
*
|
|
Geoffrey Batt, Former Chief
Financial Officer(13)
|
|
|
0
|
|
|
|
*
|
|
John F. Morrison, Senior Vice
President and President Asia(14)
|
|
|
38,348
|
|
|
|
*
|
|
Christopher Bark-Jones, Former
Senior Vice President and President Europe(15)
|
|
|
0
|
|
|
|
*
|
|
Pierre Arseneault, Former Vice
President Strategic Planning & IT(16)
|
|
|
0
|
|
|
|
*
|
|
Directors and current executive
officers as a group (22 persons)(17)
|
|
|
447,725
|
|
|
|
*
|
|
|
|
|
* |
|
Indicates less than 1% of the common shares. |
|
** |
|
As of March 20, 2007, we had 75,350,963 common shares
outstanding. |
|
(1) |
|
Includes 3,197 DDSUs. See Directors
Compensation. |
|
(2) |
|
Includes 8,103 DDSUs. See Directors
Compensation. |
|
(3) |
|
Includes 6,909 DDSUs. See Directors
Compensation. |
39
|
|
|
(4) |
|
Includes 13,443 DDSUs. See Directors
Compensation. |
|
(5) |
|
Includes 6,721 DDSUs. See Directors
Compensation. |
|
(6) |
|
Includes 6,721 DDSUs. See Directors
Compensation. |
|
(7) |
|
Includes 6,339 DDSUs. See Directors
Compensation. |
|
(8) |
|
Includes 7,842 DDSUs. See Directors
Compensation. |
|
(9) |
|
Includes 6,909 DDSUs. See Directors
Compensation. |
|
(10) |
|
Includes 1,892 DDSUs. See Directors
Compensation. |
|
(11) |
|
Includes 6,909 DDSUs. See Directors
Compensation. |
|
(12) |
|
Because Mr. Sturgell is no longer employed by the Company,
we do not track his open market purchases or sales of his
Novelis common shares. However, upon his departure from the
Company, Mr. Sturgell owned 34,264 shares (including
14,957 shares through the Employee Savings and Retirement
Plan). Mr. Sturgell has exercised all of his options since
his departure. |
|
(13) |
|
Because Mr. Batt is no longer employed by the Company, we
do not track his open market purchases or sales of his Novelis
common shares. Mr. Batt has exercised all of his options
since his departure. |
|
(14) |
|
Because Mr. Morrison is no longer employed by the Company,
we do not track his open market purchases or sales of his
Novelis common shares. Mr. Morrison owns 38,348
unexercised, vested options. |
|
(15) |
|
Because Mr. Bark-Jones is no longer employed by the
Company, we do not track his open market purchases or sales of
his Novelis common shares. Mr. Bark-Jones has exercised all
of his options since his departure. |
|
(16) |
|
Because Mr. Arseneault is no longer employed by the
Company, we do not track his open market purchases or sales of
his Novelis common shares. Mr. Arseneault has exercised all
of his options since his departure. |
|
(17) |
|
Includes 86,788 DDSUs held by our directors as a group. |
Securities
Authorized for Issuance under Equity Compensation
Plans
The following table provides information as of December 31,
2006 regarding the shares issuable upon the exercise of options
under the Novelis 2006 Incentive Plan and the Novelis Conversion
Plan of 2005 (plans), as well as the number of shares remaining
available for issuance under the plans. No new options will be
granted under the Novelis 2005 Conversion Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available
|
|
|
|
|
|
|
|
|
|
for Future Issuance
|
|
|
|
|
|
|
|
|
|
Under Equity
|
|
|
|
Number of
|
|
|
|
|
|
Compensation Plans
|
|
|
|
Securities to be
|
|
|
Weighted-Average
|
|
|
(Excluding
|
|
|
|
Issued Upon
|
|
|
Exercise Price of
|
|
|
Securities
|
|
|
|
Exercise of Options
|
|
|
Outstanding Options
|
|
|
Reflected in First
|
|
Plan Category
|
|
and DDSUs
|
|
|
and DDSUs
|
|
|
Column)
|
|
|
Equity compensation plans approved
by security holders(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Novelis Conversion Plan of 2005(2)
|
|
|
2,514,277
|
|
|
$
|
21.84
|
|
|
|
|
(2)
|
Novelis Inc. Deferred Share Unit
Plan for Non-Executive Directors(3)
|
|
|
112,039
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Novelis 2006 Incentive Plan(4)
|
|
|
858,500
|
|
|
$
|
25.53
|
|
|
|
5,760,410
|
(4)
|
Equity compensation plans not
approved by security holders
|
|
|
None
|
|
|
|
None
|
|
|
|
None
|
|
40
|
|
|
(1) |
|
The Novelis Conversion Plan of 2005 and the Novelis Inc.
Deferred Share Unit Plan for Non-Executive Directors were
approved by Alcan, as our sole shareholder, prior to the
spin-off date. |
|
(2) |
|
On January 5, 2005, our Board of Directors adopted the
Novelis 2005 Conversion Plan (Conversion Plan) to allow for all
Alcan stock options held by employees of Alcan who became
employees of Novelis following our spin-off from Alcan to be
replaced with options to purchase our common shares and for new
options to be granted. There were no new options granted in 2005
or 2006 under the Conversion Plan. No future awards will be
granted under the Conversion Plan. In the case of a change in
control, vesting of stock options will accelerate. |
|
(3) |
|
On January 5, 2005, our Board of Directors adopted the
Deferred Share Unit Plan for Non-Executive Directors. Fifty
percent of our non-executive directors compensation is
required to be paid in the form of DDSUs, and 50% in the form of
either cash, additional DDSUs or a combination of the two at the
election of each non-executive director. DDSUs are the economic
equivalent of shares. The DDSUs are redeemable only upon
termination of the directorship and may be redeemed in cash,
shares or a combination of both, at the election of the
non-executive director. The amount to be paid by us upon
redemption will be calculated by multiplying the accumulated
balance of DDSUs by the average per share price of our shares on
the Toronto adjusted for the noon exchange rate and New York
Stock exchanges on the last five trading days prior to the
redemption date. As of December 31, 2006, approximately
100,982 DDSUs had been granted with an additional
11,057 units granted January 1, 2007, all for services
rendered in 2006. |
|
(4) |
|
At our annual shareholders meeting on October 26, 2006, our
shareholders approved the 2006 Incentive Plan to effectively
replace the Conversion Plan and Stock Price Appreciation Unit
Plan. Under the 2006 Incentive Plan, up to an aggregate number
of 7,000,000 shares of Novelis common stock are authorized
to be issued in the form of stock options, SARs, restricted
shares, restricted share units, performance shares and other
share-based incentives. |
|
|
|
On October 26, 2006, our Board of Directors authorized a grant
of an aggregate of 885,170 seven-year non-qualified stock
options under the 2006 Incentive Plan at an exercise price of
$25.53 to certain of our executive officers and key employees.
These options are comprised of equal portions of premium and
non-premium options. Both the premium and non-premium options
vest ratably in 25% annual increments over a four year period
measured from October 26, 2006, and may be exercised, in
whole or in part, once vested. However, while the premium and
non-premium options carry the same exercise price of $25.53, in
no event may the premium options be exercised unless the fair
market value per share, as defined in the 2006 Incentive Plan,
on the business day preceding the exercise date equals or
exceeds $28.59. If the participant retires before
October 6, 2007, the options will be forfeited. If the
participant retires on or after October 6, 2007, the
options will continue to vest in accordance with the vesting
schedule, but must be exercised no later than the third
anniversary following the participants retirement date. In
the event of the participants death or disability, all of
the options will become immediately vested, but must be
exercised no later than the first anniversary following the
participants termination of employment. All of the options
become immediately vested and exercisable, without regard to the
per share price restriction on premium options, upon a change in
control of the Company. |
Hindalco
Transaction
On February 11, 2007, we entered a definitive agreement
with Hindalco Industries Limited (Hindalco) pursuant to which
Hindalco will acquire all of the outstanding common shares of
Novelis in an all-cash transaction which values Novelis at
approximately $6.0 billion, including approximately
$2.4 billion of debt. Under the terms of the agreement,
Novelis shareholders will receive $44.93 in cash for each
outstanding common share. The transaction has been unanimously
approved by the Boards of Directors of both companies. The
closing of the transaction is not conditional on Hindalco
obtaining financing. The transaction will be completed by way of
a plan of arrangement under applicable Canadian Law. It will
require the approval of
662/3%
of the votes cast by shareholders of Novelis at a special
meeting to be called to consider the arrangement followed by
Court approval. The transaction is also subject to certain other
customary conditions, including the receipt of regulatory
approvals. The transaction is expected to be completed in the
second quarter of 2007.
41
|
|
Item 13.
|
Certain
Relationships and Related Transactions and Director
Independence
|
In accordance with our Audit Committee charter, our Audit
Committee is responsible for reviewing the terms of our Code of
Conduct, which includes disclosure requirements applicable to
our employees and our directors relating to conflicts of
interest. Accordingly, the Audit Committee is responsible for
reviewing and approving the terms and conditions of all
transactions that involve the Company, one of our directors or
executive officers or any of their immediate family members.
Although we have not entered into any such transactions since
January 1, 2006 that meet the requirements for disclosure
in this annual report on
Form 10-K/A,
if there were to be such a transaction, we would need the
approval of our Audit Committee prior to entering into such
transaction.
See item 10 Directors and Executive Officers of the
Registrant Board of Directors and Corporate
Governance Matters for additional information regarding
the independence of our Board of Directors.
We maintain various policies and procedures that govern related
party transactions. First, pursuant to our Code of Conduct, all
employees and directors of the Company (a) must avoid any
action that creates or appears to create, a conflict of interest
between their own interest and the interest of the Company,
(b) cannot usurp corporate opportunities, and (c) must
deal fairly with third parties. Second, we maintain
Guidelines on the Independence of the Board of
Directors, which dictate that our directors remain free
from any interest, any business, or any relationship that could,
or could reasonably be perceived to, materially interfere with
the directors ability to act without bias and with a view
to the best interests of the Corporation. These policies are
available on our website at www.novelis.com. Finally, we have
enacted procedures to monitor related party transactions by
(x) identifying possible related parties through questions
in our director and officer questionnaires, (y) determining
whether we receive payments from or make payments to any of the
identified related parties, and (z) if we determine
payments are made or received, researching the nature of the
interactions between the Company and the related parties and
ensuring that the related person does not have an interest in
the transaction with the related party. Since January 1,
2006, none of our executive officers or directors have entered
into a related party transaction that required disclosure under
the SECs rules.
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Item 14.
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Principal
Accountant Fees and Services
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Audit
Fees
PricewaterhouseCoopers LLP has served as our independent
registered public accounting firm since our spin-off from Alcan
on January 6, 2005.
The following fees were paid to PricewaterhouseCoopers LLP for
services rendered during the Companys last two fiscal
years:
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Audit Fees: $13,597,000 (for the fiscal year
ended December 31, 2006) and $12,975,000 (for the
fiscal year ended December 31, 2005) for professional
services and fees rendered for the audit of the Companys
annual financial statements, review of financial statements
included in the Companys
Form 10-Qs
and services that are normally provided by
PricewaterhouseCoopers LLP in connection with statutory and
regulatory filings or engagements for those fiscal years.
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Audit-Related Fees: $91,000 (for the plan year
ended December 31, 2005) for assurance-related
services for audits of employee benefit plans.
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All Other Fees: $14,000 (for the fiscal year
ended December 31, 2006) and $18,000 (for the fiscal
year ended December 31, 2005) for fees related to an
on-line research tool.
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PricewaterhouseCoopers LLP did not perform any other services
for the Company during 2006 or 2005.
Pre-Approval
of Audit and Permissible Non-Audit Services
Effective May 9, 2005, the Audit Committee established a
policy requiring its pre-approval of all audit and permissible
non-audit services provided by our independent registered public
accounting firm. The policy gives detailed guidance to
management as to the specific services that are eligible for
general pre-approval and
42
provides specific cost limits for certain services on an annual
basis. Pursuant to the policy and the Audit Committee charter,
the Audit Committee has granted to its chairman the authority to
address any requests for pre-approval of individual services.
None of the services provided by our independent registered
public accounting firm for 2006 or 2005 that were approved by
the Audit Committee made use of the de minimus exception to
pre-approval set forth in applicable rules of the SEC.
PART IV
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Item 15.
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Exhibits
and Financial Statement Schedules
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(a)(3)
Exhibits
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|
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Exhibit
|
|
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No.
|
|
Description
|
|
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31
|
.1
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Section 302 Certification of
Principal Executive Officer
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|
31
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.2
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Section 302 Certification of
Principal Financial Officer
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|
32
|
.1
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Section 906 Certification of
Principal Executive Officer
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|
32
|
.2
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Section 906 Certification of
Principal Financial Officer
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43
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
Amendment No. 1 to this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
NOVELIS INC.
Name: Rick Dobson
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Title:
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Chief Financial Officer
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Date: April 30, 2007
44
EXHIBIT INDEX
|
|
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|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
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31
|
.1
|
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Section 302 Certification of
Principal Executive Officer
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|
31
|
.2
|
|
Section 302 Certification of
Principal Financial Officer
|
|
32
|
.1
|
|
Section 906 Certification of
Principal Executive Officer
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|
32
|
.2
|
|
Section 906 Certification of
Principal Financial Officer
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45