CHANGE OF CONTROL AGREEMENT BETWEEN ALCAN & BRIAN W. STURGELL
Published on January 7, 2005
EXHIBIT 10.1
ALCAN
Alcan Inc. [LOGO]
1188 Sherbrooke Street West Tel: (514) 848-8000
Montreal, Quebec H3A 3G2 Fax: (514) 848-8115
Canada www.alcan.com
May 11, 2004
PERSONAL AND CONFIDENTIAL
Mr. Brian W. Sturgell
Executive Vice-President
Office of the President
Alcan Inc.
1188 Sherbrooke Street West
Montreal, Quebec H3A 3G2
RE: PROJECT ARCHER
Dear Brian:
Project Archer (the "Project") relates to a value-maximizing transaction
involving substantially all of the rolled products businesses owned by Alcan
prior to its acquisition of Pechiney. Our plan is to announce an intention to
implement the Project as a distribution (commonly referred to as a "spin-out")
to Alcan shareholders of shares of RP Newco (a new entity to which, as part of
the Project, we intend to transfer the said rolled products businesses). The
ultimate structure and conditions of the Project will, of course, be under the
full control of our Board of Directors. The actual implementation of the Project
will require regulatory approvals and, as currently planned, shareholder
approval.
We have advised you of our desire to have the announcement indicate that you
have been selected to become the Chief Executive Officer of RP Newco. On your
part you have expressed your strong support for the Project and your intention
to accept the position of Chief Executive Officer of RP Newco, subject to the
finalization of the terms and conditions of the employment agreement.
Notwithstanding our respective intentions and support for the Project, its
completion is not a certainty. This lack of certainty combined with the nature
of the Project and your designated role create potential challenges in relation
to (i) the effective and successful separation of the RP Newco from the other
Alcan businesses; (ii) the careful and responsible management of all of Alcan's
businesses pending completion of the Project, (iii) your future with Alcan in
the event that the Project is not completed or, after the completion of the
Project, you are not retained as the Chief Executive Officer of RP Newco; and
(iv) the safeguarding of the interests of Alcan shareholders in relation to the
Project and the process leading to its completion.
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ALCAN
Further to the above, the following reciprocal undertakings are required to
protect both Alcan and you.
1. In the event that a transaction which will form the basis of the Project:
(i) is not completed within a period of ten months following its
announcement, or
(ii) is completed but upon completion you do not occupy the position of
Chief Executive Officer of RP Newco or its substantial equivalent,
Alcan undertakes that you shall have the same rights as regards the
termination of your employment as those which would apply if there were to
be a change of control affecting Alcan as defined in Section 1 of the
Change of Control Agreement entered with you on August 1, 2002, with the
date of change of control for such purpose being deemed to be the earlier
of:
a) the completion of the transaction which will form the basis of the
Project,
b) the expiry of the said ten month period, or
c) the date upon which you receive written notification from Alcan that
you will not occupy the position of Chief Executive Officer of RP
Newco or its substantial equivalent,
Alcan also agrees that for the limited purposes of this letter the
termination indemnity payable pursuant to the Change of Control Agreement
shall be based upon 36 months as opposed to 24 months.
2. As part of your obligations as a senior executive of Alcan, you undertake
(i) to act in good faith and cooperate reasonably with a view to the
completion of the Project in the best interests of Alcan as a whole as
determined by the Board of Directors, (ii) to conduct yourself as an
employee of Alcan and use your influence as one of its senior executives so
that the interests of Alcan as a whole are fairly protected and
well-managed in a manner consistent with past practice until such time as
the transaction which will form the basis of the Project actually takes
place, and (iii) to conduct yourself so as to facilitate the due exercise
by the Board of Directors of the fiduciary and other duties to which it is
bound in the context of the Project.
Please note that should you enter into any employment agreement with Alcan or RP
Newco which is in force immediately following the completion of the transaction
which will form the basis of the Project, your rights under this agreement, the
Change of Control Agreement referred to above and your existing employment
contract with Alcan shall lapse except as may be otherwise specified in writing.
================================================================================
ALCAN
You are requested to sign a copy of this letter in evidence of your agreement as
set forth herein.
We trust that in the coming months we will be able to work together effectively
with a view to the successful completion of the Project. Yours very truly,
ALCAN INC.
Per: /s/ Travis Engen
----------------
Travis Engen
President and Chief Executive Officer
In duplicate
Seen and agreed
Montreal, 11 May, 2004
/s/ Brian W. Sturgell
- ---------------------
Brian W. Sturgell
CHANGE OF CONTROL AGREEMENT
A G R E E M E N T
Agreement made as of the 1st day of August 2002, by and between Alcan Inc., a
corporation incorporated under the laws of Canada with its registered office at
1188 Sherbrooke Street West, Montreal, Quebec, Canada H3A 3G2 (the
"Corporation") and Brian W. Sturgell (the "Executive").
WITNESSETH:
WHEREAS, the Executive is the Executive Vice President of Alcan Inc.
WHEREAS, the Corporation believes that the establishment and maintenance of
a sound and vital senior management team is essential to the protection and
enhancement of the interests of the Corporation and its shareholders; and
WHEREAS, the Corporation also recognizes that the possibility of a Change
of Control of the Corporation (as defined in Section 1 hereof), with the
attendant uncertainties and risks, might result in the departure or distraction
of key employees of the Corporation to the detriment of the Corporation and its
shareholders; and
WHEREAS, the Corporation has determined that it is appropriate to take
steps to induce key employees to remain with the Corporation, and to reinforce
and encourage their continued attention and dedication, when faced with the
possibility of a Change of Control of the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Change of Control shall mean any of the following:
1.1 the acquisition of direct or indirect beneficial ownership (as
determined under Rule 13d-3 promulgated under the United States Securities
Exchange Act of 1934), in the aggregate, of securities of the Corporation
representing twenty percent (20%) or more of the combined voting power of
the Corporation's then issued and outstanding voting securities by any
person or entity or group of associated persons or entities (within the
meaning of Section 13(d)(3) or 14(d)(2) of the United States Securities
Exchange Act of 1934) acting jointly or in concert (other than its
subsidiaries or any employee benefit plan of either) (a "Person"), provided
that, if a buyback of shares by the Corporation causes the Person to attain
such limit, such limit shall be deemed not to have been attained without
such Person having acquired further voting securities of the Corporation;
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1.2 any amalgamation, merger, arrangement, reorganization or consolidation
in respect of the Corporation (the foregoing shall include, for the
purposes of this Agreement any transaction or series of transactions, such
as share exchange transaction with the same stated or effective objective)
other than:
(a) an amalgamation, merger, arrangement, reorganization or
consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving or parent entity) two-thirds or
more of the combined voting power of the voting securities of the
Corporation or such surviving, combined or parent entity outstanding
immediately after such amalgamation, merger, arrangement,
reorganization or consolidation, without there occurring as a result
or in connection therewith any substantial change in the composition
of the Corporation's Board of Directors; or
(b) an amalgamation, merger, arrangement, reorganization or
consolidation initiated by the Corporation for the purpose of
implementing a recapitalization of the Corporation (or similar
transaction) provided that pursuant thereto no Person is or becomes
the beneficial owner, directly or indirectly (as determined under Rule
13-d-3 promulgated under the United States Securities Exchange Act of
1934), of securities representing twenty per cent (20%) or more of the
contained voting power of the voting securities of the Corporation
outstanding immediately after such amalgamation, merger, arrangement,
reorganization or consolidation;
1.3 the approval by shareholders of the Corporation of any plan or proposal
for the complete or effective liquidation or dissolution of the
Corporation;
1.4 the issuance by the Corporation of shares in connection with an
exchange offer acquisition (including, for the purposes of this Agreement,
a series of connected exchange offer acquisitions), if such issuance
results in the holders of the Corporation's principal class of publicly
listed voting shares (immediately prior to the issuance) holding less than
two-thirds of the combined voting power of the voting securities of the
Corporation which are outstanding immediately following such issuance and
if there occurs in connection therewith any substantial change in the
composition of the Corporation's Board of Directors.
1.5 the sale or other disposition of all or substantially all of the assets
of the Corporation other than the sale or other disposition of all or
substantially all of the assets of the Corporation:
(a) to a person or persons who beneficially own, directly or
indirectly, at least two-thirds of the then outstanding common equity
of the Corporation to which are attached at least two-thirds of the
combined voting power of the outstanding voting securities of the
acquirer; or
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(b) in a manner such that after such sale or other disposition the
acquirer is, directly or indirectly, owned or controlled as to at
least two-thirds of its then outstanding common equity to which are
attached at least two-thirds of the combined voting power of the
outstanding voting securities of the acquirer by shareholders of the
Corporation who owned or controlled, immediately prior to such
transaction, at least two-thirds of the Corporation's then outstanding
common equity to which were attached at least two-thirds of the
combined voting power of the outstanding voting securities of the
acquirer;
provided that there does not occur in connection therewith any substantial
change in the composition of the Corporation's Board of Directors.
1.6 the completion of the corporate approvals necessary on the part of the
Corporation to give effect to any amalgamation, merger, arrangement,
reorganization, continuance or consolidation in respect of the Corporation
(including any transaction or series of transactions with the same stated
or effective objective) pursuant to which the Corporation will not survive
as a stand-alone publicly-traded corporation (in this regard, but without
limitation, the Corporation shall be deemed not to have survived as a
publicly traded corporation should (i) there cease to be a liquid market
for the Corporation's common shares on an internationally recognized
exchange, (ii) more than fifty percent (50%) of the corporation's
outstanding common shares to which are attached more than fifty percent
(50%) of the then outstanding combined voting power of the outstanding
securities of the Corporation be held by a single shareholder or group of
shareholders acting jointly or in concert, or (iii) the Corporation become
a subsidiary, as defined in the Canada Business Corporations Act, of
another Corporation);
1.7 any occurrence pursuant to which individuals who, as of the close of
business on the effective date of this Agreement, constitute the Board of
Directors (the "Incumbent Directors") cease for any reason to constitute at
least two-thirds of the Board; provided that any person becoming a Director
subsequent to the close of business on the effective date of this
Agreement, whose election or nomination for election was approved by a vote
of at least two-thirds of the Incumbent Directors then on the Board of
Directors (either by a specific vote or by approval of the Management Proxy
Circular of the Corporation in which such person is named a nominee for
Director, without objection to such nomination) shall be an Incumbent
Director; but further provided, that no individual elected or nominated as
a Director of the Corporation initially as a result of an actual or
threatened proxy or election contest with respect to Directors, as a result
of any other actual or threatened solicitation of proxies or consents by or
on behalf of any person other than the Board of Directors or as a result of
or in connection with any amalgamation, merger, arrangement,
reorganization, consolidation or share exchange acquisition transaction by
the Corporation with any Person, shall be deemed to be an Incumbent
Director;
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For the purposes of this Agreement : (i) only the first Change of Control after
the date hereof shall be deemed a Change of Control hereunder; (ii) voting power
of securities shall be determined by reference to the right to vote in respect
of the general election of Directors: (iii) a substantial change in the
composition of the Board of Directors of the Corporation shall be any change
involving the immediate confirmed departure of at least three Directors or any
other change pursuant to which the Directors in office immediately prior thereto
cease to constitute at least two-thirds of the members of the Board of
Directors; and (iv) no event of Change of Control shall have occurred if
immediately prior thereto the Corporation was in a state of insolvency or in a
position of being protected from its creditors by virtue of any applicable
legislation or court order.
2. Term. This agreement shall commence on the date hereof and shall expire,
unless previously terminated as provided herein, on the earliest of
(i) 30 April 2005;
(ii) the date of the Executive's death or termination as a result of
Disability, as defined below;
(iii) subject to Section 3 hereof, the date of the retirement or other
termination of the Executive's employment (voluntarily or involuntarily)
with the Corporation prior to a Change of Control; or
(iv) if, prior to and without causing a Change of Control, the entity for
which the Executive is then working ceases to be a subsidiary, (as defined
in the Canada Business Corporations Act) of the Corporation.
Notwithstanding anything in this Agreement to the contrary, if the
Corporation becomes obligated to make any payment to the Executive pursuant
to the terms hereof at or prior to the expiration of this Agreement, then
this Agreement shall remain in effect for such purposes until all of the
Corporation's obligations hereunder are fulfilled. Further, the provisions
of paragraph 9.1 hereunder shall survive and remain in effect
notwithstanding the termination of this Agreement, the termination of the
Executive's employment or any breach or repudiation of alleged breach or
repudiation by the Corporation of this Agreement or any one or more of its
terms.
Disability shall have the meaning ascribed to such term in the
Corporation's long-term disability plan in which the Executive
participates. A termination for Disability shall be deemed to occur when
the Executive is terminated by the Corporation by written notice after the
disability is established and the Executive remains disabled.
3. Termination Following Change of Control.
3.1 If, and only if, a Change of Control occurs and one of the following
occurs : (i) the Executive's employment with the Corporation is terminated
by the Corporation without Cause other than for Disability, or (ii) by the
Executive for Good Reason, during the period running from the date of the
Change of Control to twelve (12) months after the date of such Change of
Control, then the Executive shall be entitled to the amounts provided in
Section 4 upon such termination.
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In addition, notwithstanding the foregoing, in the event the Executive is
either terminated without Cause or terminates employment for Good Reason
within three (3) months prior the occurrence of a Change of Control, such
termination shall, upon the occurrence of a Change of Control, be deemed to
be covered under the Agreement and the Executive shall be entitled to the
amounts provided under Section 4 hereof reduced by any amounts otherwise
received in connection with his termination of employment.
3.2 As used in this Agreement, termination for Good Reason shall mean a
termination by the Executive within ninety (90) days after the occurrence
of the Good Reason event, failing which such event shall not constitute
Good Reason under this Agreement. For purposes of this Agreement, "Good
Reason" shall mean the occurrence or failure to cause the occurrence of any
of the following events without the Executive's express written consent:
(i) any material diminution in the Executive's duties and
responsibilities, authority (except in each case in connection with
the termination of the Executive's employment for Cause or as a result
of the Executive's death, or temporarily as a result of the
Executive's illness or other absence,);
(ii) a reduction in the Executive's annual base salary rate;
(iii) a relocation of the Executive's principal business location to
an area outside the country of the Executive's principal business
location at the time of the Change of Control;
(iv) a failure by the Corporation after a Change of Control to
continue any annual Executive Performance Award Plan, program or
arrangement in which the Executive is then entitled to participate
(the "Bonus Plans"), provided that any such plan(s) may be modified at
the Corporation's discretion from time to time but shall be deemed
terminated if (x) any such plan does not remain substantially in the
form in effect prior to such modification and (y) if plans providing
the Executive with substantially similar benefits are not substituted
therefor ("Substitute Plans"), or a failure by the Corporation to
continue the Executive as a participant in the Bonus Plans and
Substitute Plans on at least the same basis as to potential amount of
the bonus and the achievability thereof as the Executive participated
immediately prior to any change in such plans of awards, in accordance
with the Bonus Plans and the Substitute Plans;
(v) a failure to permit the Executive after the Change of Control to
participate in cash or equity based long-term incentive plans and
programs other than Bonus Plans on a basis providing the Executive in
the aggregate with an annualized award value in each fiscal year after
the Change of Control at least equal to the aggregate annualized award
value being provided by the Corporation to the Executive under such
incentive plans and programs immediately prior to the Change of
Control (with any awards intended not to be repeated on an annual
basis allocated over the years the awards are intended to cover);
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(vi) the failure by the Corporation to continue in effect any employee
benefit program such as a saving, pension, excess pension, medical,
dental, disability, accident, life insurance plan or a relocation plan
or policy or any other material plan, program, perquisite or policy of
the Corporation intended to benefit the Executive in which the
Executive is participating at the time of a Change of Control (or
programs providing the Executive with at least substantially similar
benefits) other than as a result of the normal expiration of any such
employee benefit program in accordance with its terms as in effect at
the time of a Change of Control, or taking of any action, or the
failure to act, by the Corporation which would adversely affect the
executive's continued participation in any of such employee benefit
programs on at least as favourable a basis to the Executive as is the
case on the date of a Change of Control; or which would materially
reduce the Executive's benefits in the future under any of such
employee benefit programs or deprive him of any material benefit
enjoyed by the Executive at the time of a Change of Control;
(vii) a material breach by the Corporation of any other written
agreement with the Executive that remains uncured for twenty-one (21)
days after written notice of such breach is given to the Corporation;
(viii) failure of any successor (as defined in Section 10 herein) to
assume in a writing delivered to the Executive the obligations
hereunder within twenty-one (21) days after written notice by the
Executive, or
For the purposes of the foregoing, there shall be deemed to have occurred a
material diminution in the duties and responsibilities of an Executive
occupying the position of or performing the functions normally assigned to
any of the Chief Executive Officer or other member of the Office of the
President, the Chief Financial Officer or the Chief Legal Officer in the
event of any Change of Control referred to in any of paragraphs 1.2 to 1.6
(inclusive) above.
3.3 As used in this Agreement, the term "Cause" shall mean:
(i) the failure by the Executive to attempt to substantially perform
his or her duties and responsibilities with regard to the Corporation
or any affiliate (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness of any such
actual or anticipated failure by the Executive for Good Reason, as
defined in paragraph 3.2) after demand for substantial performance is
delivered by the Corporation that specifically identifies the manner
in which the Corporation believes the Executive has failed to attempt
to substantially perform his or her duties and responsibilities and a
reasonable time for the Executive to correct or remedy;
(ii) the willful engaging by the Executive in misconduct in connection
with the Corporation or its business which is materially injurious to
the Corporation monetarily or otherwise (including but not limited to
conduct which is prohibited by the provisions of Section 9.1 herein);
or
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(iii) any misappropriation or fraud with regard to the Corporation or
any of the assets of the Corporation (other than good faith expense
account disputes).
For purposes of this paragraph, no act, or failure to act, on the
Executive's part shall be considered "willful" unless done or omitted to be
done, by him or her not in good faith and without reasonable belief that
his or her action or omission was in the best interests of the Corporation.
In the event that the Executive alleges that the failure to attempt to
perform his or her duties and responsibilities is due to a physical or
mental illness, and thus not "Cause" under paragraph 3.3, the Executive
shall be required to furnish the Corporation with a written statement from
a licensed physician who is reasonably acceptable to the Corporation which
confirms the Executive's inability to attempt to perform due to such
physical or mental illness. A termination for Cause after a Change of
Control shall be based only on events occurring after such Change of
Control; provided, however, the foregoing limitation shall not apply to an
event constituting Cause which was not discovered by the Corporation prior
to a Change of Control.
4. Compensation Upon Termination.
4.1 If the Executive's employment is terminated for Cause following a
Change of Control or upon the occurrence of a Change of Control in a manner
described in paragraph 3.1 the Corporation shall:
(a) pay to the Date of Termination, the Executive's Base Salary, the
prorated amount of the guideline award under the Corporation's
Executive Performance Award Plan (EPA) and the cash value of any
untaken and accrued vacations to the Date of Termination. The
aggregate amount will be paid within five (5) days of the Date of
Termination;
(b) accrue service under the Corporation's pension plans to the Date
of Termination;
(c) maintain all other benefits and perquisites in which the Executive
participates to the Date of Termination, but limited to the coverage
in force under those benefit plans on the Date of Notice of
Termination; and
(d) not grant any options to purchase shares under the Alcan Executive
Share Option Plan, nor any other long-term incentive plans adopted by
the Corporation, to the Executive between the date of Notice of
Termination and the actual Date of Termination.
4.2 In the event of Termination for Cause following a Change of Control,
the Corporation's obligations to the Executive under this Agreement shall
be limited to those under paragraph 4.1. In all other cases, the Executive
shall have each of the following additional rights and entitlements, to the
extent applicable;
(a) If the Executive's employment is terminated after the first
occurrence of a Change of Control in a manner described in paragraph
3.1 then, the Executive shall be entitled, without regard to any
contrary provisions of any benefit plan and subject to any express
limitations hereinafter set forth, to severance pay as follows:
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(i) an amount equal to 36 times the Executive's monthly base
salary as of the Date of Termination;
(ii) an amount equal to 36 times the monthly EPA guideline amount
in force as regards the Executive Performance Award Plan as of
the Date of Termination;
(b) the amount payable under the provisions of the TSR Performance
Plan (or its equivalent) in the event of a Change of Control, provided
that the amount payable shall never be less than the amount payable to
the Executive thereunder had he retired on the Date of Termination.
Notwithstanding the foregoing, if the Date of Termination is before the
Executive's declared retirement date and the number of months remaining to
such retirement date is less than the number specified in paragraphs a(i)
and a(ii) above, the number specified in each of sub-paragraphs (a)(i) and
(a)(ii) above shall be replaced by the number of months remaining to such
retirement date.
4.3 The Executive may, in writing, (in the Notice of Termination or
otherwise) direct the Corporation that the severance pay pursuant to the
paragraph 4.2 hereof shall be paid, either :
(i) in a lump sum payable within five (5) days of the Date of
Termination where in such case, all benefit plan coverage cease on
such date, or
(ii) in 36 equal monthly installments, (or for a period consistent
with the Corporation's practices as approved by the Personnel
Committee of the Board) after having the Executive transferred to the
non-active payroll of the Corporation in which case all benefit plan
coverage continue at the previous level for that same number of months
except for coverage under the Corporation's short-term and long-term
disability plans, vacation program, eligibility in the Alcan Executive
Share Option Plan or any other long-term incentive plans adopted by
the Corporation and perquisite benefit (car, financial and tax
counseling, club membership) all of which shall cease on Date of
Termination.
Monthly installments paid on the non-active payroll shall be excluded
in the calculation of pensionable earnings while the duration on the
non-active payroll shall be included as service for calculating years of
service under the Corporation's pension plans.
4.4 Any loans owing by the Executive to the Corporation shall become due
and payable as per the terms of the applicable loan agreement.
4.5 After the occurrence of a Change of Control, as defined in Section 1,
all options under the Corporation's Executive Share Option Plan shall
become immediately exercisable and all waiting periods and holding periods,
as defined in such plan, shall be waived.
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5. Notice of Termination. After a Change of Control, any purported termination
of the Executive's employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 13. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment. The "Date of Notice of
Termination" is the date, determined in accordance with Section 13 below,
when the Notice of Termination is deemed to have been given.
6. Date of Termination. "Date of Termination", with respect to any purported
termination of the Executive's employment after a Change of Control, shall
mean the date specified in the Notice of Termination. In the case of a
termination by the Corporation, the Date of Termination shall not be less
than thirty (30) days after the Change of Control except in the case of a
termination for Cause which shall be the date specified in the Notice of
Termination. In the case of a termination by the Executive for Good Reason,
the Date of Termination shall not be earlier than 90 days after the Change
of Control. In the event of Notice of Termination by the Corporation, the
Executive may treat such notice as having a date of termination at any date
between the date of the receipt of such notice and the date of termination
indicated in the Notice of Termination by the Corporation; provided, that
the Executive must give the Corporation written notice of the Date of
Termination if he or she deems it to have occurred prior to the Date of
Termination indicated in the notice.
7. No Duty to Mitigate/Set-off. The Corporation agrees that if the Executive's
employment with the Corporation is terminated pursuant to this Agreement
during the term of this Agreement, the Executive shall not be required to
seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Corporation pursuant to this Agreement.
Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned by the Executive
or benefit provided to the Executive as the result of employment by another
employer or otherwise. Except as otherwise provided herein and apart from
any disagreement between the Executive and the Corporation concerning
interpretation of this Agreement or any term or provision hereof, the
Corporation's obligations to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including without limitation, any set-off,
counterclaim, recoupment, defense or other right which the Corporation may
have against the Executive.
8. Service with Subsidiaries or the Corporation. For purposes of this
Agreement, employment by the Corporation or subsidiary (as defined in the
Canada Business Corporations Act) of the Corporation shall be deemed to be
employment by the Corporation and references to the Corporation shall
include all such entities, except that the payment obligation hereunder
shall be solely that of the Corporation. A Change of Control, however, as
used in this Agreement, shall refer only to a Change of Control of Alcan
Inc.
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9. Confidentiality and Non-Competition Undertakings.
9.1 Without prejudice to any other confidentiality undertakings or
obligations by which the Executive may be bound in favor of the
Corporation, the Executive shall not at any time during the term of this
Agreement, or thereafter, directly or indirectly, for any reason
whatsoever, communicate or disclose to any unauthorized person, firm or
corporation, or use for the Executive's own account, without the prior
written consent of the Board of Directors, any proprietary processes, trade
secrets or other confidential data or information of the Corporation and
its related and affiliated companies concerning their businesses or
affairs, accounts, products, services or customers, it being understood,
however, that the obligations set forth in this Section shall not apply to
the extent that the aforesaid matters (i) are disclosed in circumstances in
which the Executive is legally required to do so, or (ii) become known to
and available for use by the public other than by the Executive's wrongful
act or omission.
9.2 Upon the occurrence of a Change of Control, any non-competition
agreement between the Corporation and the Executive shall be considered
null and void. For the purposes of this Agreement, a non-competition
agreement shall include, without limitation, any provision restricting the
Executive's freedom to seek or obtain employment or invest in or advise any
corporation or business.
10. Successors - Binding Agreement. In addition to any obligations imposed by
law upon any successor to the Corporation, the Corporation will require any
successor (whether direct or indirect, by purchase, amalgamation, merger,
arrangement, reorganization, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to
expressly assume and agree in writing to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to
perform it if no such succession had taken place. This Agreement shall
inure to the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors and heirs. If
the Executive shall die after termination of his employment while any
amount would still be payable to the Executive hereunder if the Executive
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive's
estate. This Agreement is personal to the Executive and neither this
Agreement nor any rights hereunder may be assigned by the Executive.
11. Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board of Directors. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with,
any condition or provision shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement and the Employment Agreement constitute the
entire agreement between the parties hereto pertaining to the subject
matter hereof. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement or the
Employment Agreement. All references to any law shall be deemed also to
refer to any successor provisions to such laws.
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12. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, or sent by
registered mail, postage prepaid as follows:
(i) If to the Corporation, to:
Alcan Inc.
1188 Sherbrooke Street West
Montreal, Quebec
H3A 3G2
Attention: Corporate Secretary
(ii) If to the Executive, to his last shown address
on the books of the Corporation.
Any such notice shall be deemed given when so delivered personally, or, if
mailed, five days after the date of deposit in the Canadian mail. Any party may
by notice given in accordance with this Section to the other parties, designate
another address or person for receipt of notices hereunder.
14. Severability. If any provisions of this Agreement shall be declared to be
invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which
shall remain in full force and effect.
15. Legal Fees. In the event the Corporation does not make the payments due
hereunder on a timely basis and the Executive collects any part or all of
the payments provided for hereunder or otherwise successfully enforces the
terms of this Agreement by or through -legal counsel, the Corporation shall
pay all costs of such collection or enforcement, including reasonable legal
fees and other reasonable fees and expenses which the Executive may incur.
The Corporation shall pay to the Executive interest at the prime lending
rate as announced from time to time by Royal Bank of Canada on all or any
part of any amount to be paid to Executive hereunder that is not paid when
due. The prime rate for each calendar quarter shall be the prime rate in
effect on the first day of the calendar quarter.
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16. Non-Exclusivity of rights. Except as otherwise specifically provided
therein, (i) nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any benefit, bonus,
incentive, equity or other plan or program provided by the Corporation and
for which the Executive may qualify, nor (ii) shall anything herein limit
or otherwise prejudice such rights as the Executive may have under any
other currently existing plan, agreement as to employment or severance from
employment with the Corporation or statutory entitlements, provided, that
to the extent such amounts are paid under paragraph 4.2(a) hereof or
otherwise, such amounts shall be offset against any amounts that the
Executive is entitled to under any other program, plan, agreement or
statute, including without limitation the Employment Agreement. Amounts
that are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Corporation, at or subsequent to
the date of termination shall be payable in accordance with such plan or
program, except as otherwise specifically provided herein or in the
Employment Agreement.
17. Not an Agreement of Employment. This is not an agreement assuring
employment and the Corporation reserves the right to terminate the
Executive's employment at any time with or without cause, subject to the
Employment Agreement and the payment provisions hereof if such termination
is after, or within three (3) months prior to, a Change of Control, as
defined herein. The Executive acknowledges that he is aware that he shall
have no claim against the Corporation hereunder or for deprivation of the
right to receive the amounts hereunder as a result of any termination that
does not satisfy the requirements hereof or as a result of any other action
taken by the Corporation. The foregoing shall not affect the Executive's
rights under any other agreement with the Corporation.
18. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the Province of Quebec.
19. English Language. The parties hereto declare that they require that this
Agreement and any related documents be drawn up and executed in English.
Les parties declarent qu'elles requierent que cette convention ainsi que
tous documents relatifs a cette convention soient rediges et executes en
anglais.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed and the Executive has hereunto set his hand as of the date first set
forth above.
ALCAN INC.
By: /s/ Gaston Ouellet
---------------------------------------
Gaston Ouellet
EXECUTIVE
By: /s/ Brian W. Sturgell
---------------------------------------
Brian W. Sturgell
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