EMPLOYMENT AGREEMENT OF JACK MORRISON
Published on March 30, 2005
[LOGO NOVELIS]
Exhibit 10.27
PERSONAL & CONFIDENTIAL
Dear Jack,
Further to our recent discussions, this is to confirm to you the terms of the
expatriate offer for the position of President, Novelis Asia. You will be
located in Seoul, Republic of Korea, and you will report to me.
The terms and conditions of this expatriate assignment are as follows:
1. STARTING DATE AND DURATION
The effective date of your appointment is January 1, 2005, and is
contingent upon successful completion of the spin-off and creation of
Novelis Inc.
The anticipated duration of this assignment is one to two years. Actual
duration will be reviewed annually.
2. STATUS OF EMPLOYMENT
You will be an employee of and paid by Novelis Corporation. Your status is
that of an employee of Novelis Corporation seconded to Novelis Korea
Limited. U.S. laws provide that a U.S. employee may remain outside of the
United States for an extended term and yet retain participation in a number
of the Novelis Corporation Benefit Plans and the U.S. Social Security
system.
However, in order to maintain your participation in these plans, it is
essential that Novelis Corporation retain certain customary employee
management rights as your employer during your secondment. There is no
reason why in practice this retention of rights in Novelis Corporation
should in any way interfere with your ability to work loyally and
effectively for Novelis Korea Limited.
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Within the context of Novelis Corporation's Policy on International
Assignments, your status is defined as being that of a U.S. based
expatriate on assignment in the Republic of Korea.
3. COMPENSATION PACKAGE
Your base compensation and benefits package is designed to provide you with a
level of income and benefits which are similar to those you would have received
in the U.S.A. in a similar position.
(a) POSITION GRADE
The Position Grade is Grade 47.
(b) HOME BASE SALARY
Your home base salary will be US$ 277,000.00 per annum.
Your home base salary will be subject to review periodically in
accordance with Novelis Corporation's salary administration practices
in the U.S.A.
(c) EXPATRIATE PREMIUM
You will receive an Expatriate Premium, which is 10% of your Home Base
Salary, net after tax per annum. This premium will be adjusted as and
when your Home Base Salary is adjusted.
(d) LOCATION ALLOWANCE
You will receive a Location Allowance, which is 10% of your Home Base
Salary, net after tax per annum. This premium will be adjusted as and
when your Home Base Salary is adjusted.
(e) EXECUTIVE PERFORMANCE AWARD PLAN EPA
You will continue to participate in the Executive Performance Award
(EPA) Plan consistent with your new Job Grade 47, which is currently
55%.
(f) NOVELIS CORPORATION LONG TERM INCENTIVE
You will continue to be eligible for annual Long Term Incentive at Job
Grade 47. The delivery method for the Novelis Corporation Long Term
Incentive will be developed in 2005. The details of the Novelis
Corporation's Long Term Incentive program will be communicated when
they become available. The explanation of the conversion methodology
for both your Alcan Stock Options and your Alcan TSR awards will be
sent to you separately.
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(g) FLEXIBLE PERQUISITES PROGRAM
As an employee on the expatriate program you will not participate in
the Novelis Flexible Perquisites Program.
(h) DEFERRED COMPENSATION PROGRAM
Alcan will maintain your deferred compensation account and be subject
to the elections that you made. Given the nature of this plan, there
is no plan to create a deferred compensation plan within Novelis
Corporation at the point of the spin-off. This will be reviewed in due
course.
(i) METHOD OF SALARY PAYMENT
Your salary will be paid to you by Novelis Corporation.
(j) ALCAN SAVINGS PLAN
You will be eligible to continue your active participation in the
Alcancorp Employee Savings Plan on the compensation paid by Novelis
Corporation. You will be able to join the Novelis Corporation Savings
Plan when it is created.
(k) GOODS AND SERVICES ADJUSTMENT
You will receive an allowance or have a deduction made, as the case
may be, to compensate for the differences in relative costs of goods
and services between Seoul, Republic of Korea and the U.S.A. This
allowance, or deduction, will vary from time to time.
(L) EXPATRIATE COMPENSATION STATEMENT (ECS)
Attached is your Expatriate Compensation Statement, which reflects the
current data. It is sent to you in order that you may understand the
composition of your compensation package. The Expatriate Compensation
Statement will be updated from time to time as conditions change.
These adjustments will be made based on data supplied from our
consultant (ORC).
4. RETIREMENT BASE
The U.S.A. is designated as your Retirement Base.
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5. PENSION
As an employee of Novelis Corporation, you will continue to participate in
the Alcancorp Pension Plan during the 2005 transition year. You will be
eligible to join the new Novelis Corporation Pension Plan in 2006. You will
not be eligible to join the pension and related benefit plans of Korea.
6. LIFE AND BUSINESS TRAVEL ACCIDENT INSURANCE
During your assignment, you will continue to be covered by the Novelis Life
Insurance and Business Travel Accident Plans. You may continue to purchase
optional and dependent life insurance.
Annual adjustments to your coverage and resulting contribution changes will
take into consideration any salary adjustment you might receive during your
assignment.
7. LONG-TERM DISABILITY
You will also maintain coverage under the Novelis Long Term Disability
Plan. The provisions of that plan are explained in the Alcancorp benefits
handbook, Moving Toward Tomorrow, a copy of which you already have. The
cost of this program is borne by the company.
8. SOCIAL SECURITY
You will continue to participate in the United States Social Security
System. If required to make contributions to Korean Social Security, these
funds will be reimbursed to you.
9. MEDICAL AND DENTAL INSURANCE
You will continue to be covered for medical and dental insurance under
Novelis' plans for expatriates. In addition, services of S.O.S., an
independent contract firm which provides emergency medical advice, referral
and if necessary medical evacuation will continue.
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10. AUTOMOBILE
Novelis Korea Limited will continue to provide you with a company car for
your business and personal use. In line with practice in the Republic of
Korea, you will also be provided with the services of a company driver for
your business and personal use, with priority given to business
requirements.
12. LEAVE
(a) VACATION
Your entitlement will continue according to the Novelis schedule.
(b) HOME LEAVE
The United States is designated as your Home Leave base.
(c) TRAVEL COSTS
Home leaves will be granted for the duration of this assignment. You
and/or your wife will be entitled to claim a combined maximum of three
(3) round trip business class airfare tickets per 12 month period
(June 1- May 31) between Seoul and the U.S.A. The cost of the airfares
will be for the Company's account. All other incidental expenses
incurred during any home leave trip will be for your account.
13. HOUSING
UNITED STATES
Since you utilized the Company provided assistance with the sale of your
house in Cleveland, you will continue to have the discounted ORC housing
charge of $15,000 per year included in your ECS for the term of this
assignment.
SEOUL
The cost of appropriate fully furnished accommodations, including
utilities, in Korea will be born by Novelis Korea Limited for your use for
the term of the assignment.
14. SPORTS/SOCIAL CLUB
The cost of joining and maintaining a family membership in one
sports/social club in Seoul will be for Novelis Korea Limited account.
Expenses incurred at the club, other than those that are for business
entertainment will be for your account. This provision is a taxable benefit
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and the hypothetical tax cost will also be for Novelis Korea Limited
account.
15. PROFESSIONAL ASSISTANCE FOR PREPARATION OF INCOME TAX RETURNS
You will be provided with the services of professional consultants for the
preparation of your personal income tax requirements in Korea and the
United States. The fees for this service will be for Novelis Korea Limited
account. Any tax liabilities you incur in Korea, over and above what you
would be required to pay from your regular employment status with Novelis
Corporation in the United States will be for the Company's account.
16. COMPASSIONATE LEAVE
In addition to the trips outlined above, should a member of your immediate
family not residing with you in Seoul suffer life-threatening illness,
injury or death, assistance will be provided to allow you/and your wife to
be with the relative or attend to necessary arrangements.
17. CHANGE IN STATUS
Should the duration of this assignment or the position itself change
significantly, then certain parts of this letter will have to be
re-discussed with you.
18. REPATRIATION TO THE UNITED STATES
Upon completion or termination of this assignment, should there be no
mutually agreeable position available at that time within Novelis, you and
your wife will be repatriated by the company to the United States. Your
employment will be terminated in accordance with the severance policy then
in effect in the United States
19. CONTACTS
Mr. Kenneth Grillo will be your contact in Cleveland. Your contact in the
Republic of Korea will be Bernie Sanders.
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Kindly indicate your acceptance of this offer by signing where indicated below
and returning the letter to me. Please make a copy for your file.
/s/ Martha Brooks
--------------------------------------
Martha Brooks
Chief Operating Officer
Novelis Corporation
Accepted: /s/ John C. Morrison
--------------------------
John C. Morrison
Date:
January 17, 2005
Copies to:
Mr. Kenneth C. Dunn
Mr. David K. Godsell
Mr. Kenneth A. Grillo
Mr. Bernie Sanders