EMPLOYMENT AGREEMENT OF BRIAN W. STURGELL
Published on December 22, 2004
EXHIBIT 10.32
ALCAN
Alcan Inc. [ALCAN LOGO]
1188, rue Sherbrooke Quest Address postal: Tel. : (514) 848-8000
Montreal (Quebec) H3A 3G2 C.P. 6090 Telec. : (514) 848-8115
Canada Montreal (Quebec) H3C 3A7 www.alcan.com
Canada
CONFIDENTIAL PERSONAL INFORMATION
December 16, 2004
Mr. Brian Sturgell
1 Summer Island Lane
Kiawah Island, SC 29455
U.S.A.
Dear Brian,
I am very pleased to confirm your appointment as President and Chief Executive
Officer of Novelis. This is a truly exciting opportunity, possibly a once in
a lifetime opportunity, to lead and create a brand new company. We all wish you
and your team the greatest of success in this endeavor and are looking forward
to seeing you achieve that.
This letter addresses the specific terms and conditions of your offer
recognizing that in conjunction with the Novelis Board, some of these may be
modified as you begin to better align terms and conditions with the needs of
Novelis.
POSITION TITLE
I am pleased to confirm the title of President and Chief Executive Officer,
Novelis Inc.
EMPLOYMENT DATE
Your appointment in this role will commence immediately following the spin off
of Novelis. We continue to believe that this will occur on schedule around
year-end.
RECOGNITION OF ALCAN SERVICE
Novelis will recognize Alcan and predecessor company service for the purposes
of eligibility and accrual of Novelis benefits.
BASE SALARY
Your base salary will be US$985,000.00 This salary recommendation was arrived
at following a review by Towers Perrin of similar positions in similar sized
organizations and has been approved by the Human Resources Committee of the
Board of Directors.
EXECUTIVE PERFORMANCE AWARD 2004
Your participation in the 2004 Alcan Executive Performance Award plan will
continue uninterrupted to year-end at your existing Alcan job grade and will be
paid in the same timeframe and manner as you have experienced in the past.
EXECUTIVE PERFORMANCE AWARD 2005
Novelis will institute a short-term incentive program for the 2005 plan year
conceptually similar to the existing Alcan plan. It is possible that the
financial metrics will be adjusted to better fit the new business. The target
guideline for your job grade 59 is 100%.
_______________________________________________________________________________
Page 2 of 3
TOTAL SHAREHOLDER RETURN (TSR) PERFORMANCE PLAN
Your participation in the Alcan TSR program will be terminated at the date of
spin-off. Your accrued entitlement in this plan (Cycle 1 & Cycle 2) will be
converted into Novelis Restricted Stock Units the day after the spin-off. These
will become fully vested on 1 October 2005 for cycle 1 and 1 October 2006 for
cycle 2.
STOCK OPTIONS
Your current Alcan share options will be converted to Novelis share options at
the time of spin-off so that the intrinsic value of your current Alcan stock
options as at the spin-off date is preserved. All outstanding options will be
converted and those that are vested will continue to be vested. Any that are
unvested will vest in 4 equal installments on the anniversary of the spin date
on each of the next four years.
As you are aware, Novelis will introduce a Long Term Incentive Program, the
details of which will require the approval of its Board of Directors, in which
you will be entitled to participate to a level determined by the Novelis Board.
Alcan options vest based upon performance of Alcan stock with the performance
goals established to reflect Alcan's stock past performance. Novelis being a
new company has no past performance and therefore performance vesting is not
possible.
U.S. DEFERRED COMPENSATION PLAN
Alcan will maintain your deferred compensation account (if any) which will
continue to be subject to the elections that you have made previously. There
are no plans to create a deferred compensation plan within Novelis at the point
of the spin-off.
CHANGE IN CONTROL AGREEMENT
Your Change in Control agreement with Alcan will be cancelled at the date of
spin-off and be replaced by a Novelis agreement with similar terms and
provisions.
BENEFIT PLANS
Your participation in the Alcan retirement and health and welfare benefit plans
will continue up to the point of the spin-off. Novelis will adopt plans with
provisions for the most part similar to those currently in effect within Alcan.
MISCELLANEOUS PLANS
Participation in other plans (e.g. Flexperks, Auto, and Executive Physical
Exams) will continue as they exist today.
PENSION
Your participation in the Alcan Pension Plan for Officers (APPO) will terminate
at the date of spin-off. Novelis will adopt a plan, the Novelis Pension Plan
for Officers (NPPO), with provisions for the most part, identical to those of
the APPO. Your benefits accrued under the APPO will be transferred to the NPPO
which shall recognize your service and earnings as officer with Alcan.
Your membership in the Alcancorp Pension Plan (ACPP) will be maintained and the
plan will be amended in 2005 to recognize service with Novelis for the
transferred employees. Following this period it is anticipated that Novelis
will provide a replacement plan that provides in the aggregate broadly
equivalent benefits.
Page 3 of 3
Please sign this offer and return it to me at your earliest convenience.
I wish the very best of success in your challenging and exciting new role.
Yours truly,
/s/ Travis
- -----------------------------------
Travis
Accepted by /s/ Brian Sturgell date
----------------------- -------------------------