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EXHIBIT 10.16.: EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
AGREEMENT, dated this 23rd day of February 2001 (this
"Agreement"), among Alcan Aluminium Limited, a Canadian corporation (the
"Employer"), with offices at 0000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxx,
Xxxxxx, and Xxxxxx Xxxxx (the "Employee").
1. EMPLOYMENT, DUTIES AND AGREEMENTS.
(a) The Employer hereby agrees to employ the Employee as the President and
Chief Executive Officer of the Employer and to nominate the Employee
for re-election as a member of the Board of Directors of the Employer
(the "Board") and the Employee hereby accepts such positions and
agrees to serve the Employer in such capacities during the employment
period fixed by Section 4 hereof (the "Employment Period"). The
Employee shall report solely and directly to the Board. The Employee's
duties and responsibilities shall be such duties and responsibilities
that are consistent with the positions of President, Chief Executive
Officer and Director.
(b) During the Employment Period and as long as the Employer shall not be
in default of a material obligation hereunder, excluding any periods
of vacation and sick leave to which the Employee is entitled, the
Employee shall devote substantially all of his business time and
attention to the performance of his duties and responsibilities
hereunder. Notwithstanding any provision to the contrary, nothing
herein shall prohibit the Employee from (i) acting or serving as a
director, trustee, committee member or principal of any type of
business or civic or charitable organization except where such service
is inconsistent with the non-competition provision referred to in
Section 9(a) hereof or otherwise inconsistent with the effective
completion of his responsibilities hereunder and provided that the
Employee has received the prior approval in writing of the Personnel
Committee (or equivalent committee) of the Board
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which shall not be unreasonably withheld, and (ii) managing his
personal, financial and legal affairs.
2. COMPENSATION.
(a) As compensation for the agreements made by the Employee herein and the
performance by the Employee of his obligations hereunder, during the
Employment Period, the Employer shall pay the Employee, not less than
once a month pursuant to the Employer's normal and customary payroll
procedures, a base salary at the rate of not less than $1,200,000 per
annum (the "Base Salary").
(b) In addition to the Base Salary, for each of calendar years 2001
through 2005, the Employee shall be entitled to a bonus (the "Annual
Bonus") based on an established target bonus level and the achievement
of performance objectives. The Annual Bonus shall be determined on a
calendar year basis and the Employee shall be entitled to a full
year's Annual Bonus with respect to calendar year 2001 (i.e., without
proration relating to the commencement of the Employment Period after
January 1, 2001). The target bonus (the "Target Bonus") level for each
such year and the performance objectives shall be determined in a
manner and a level consistent with the Employer's past practice. The
minimum amount of the Annual Bonus for calendar year 2001 shall be not
less than 100% of the Employee's Base Salary, regardless of the
achievement of the performance objectives for such calendar year.
(c) On the date of this Agreement, the Employer shall grant the Employee
an option (the "Option") to purchase shares of the Employer's common
stock and such Option shall become exercisable at a price and
according to the conditions as set forth in the Option Agreement
attached as Schedule I hereto. Notwithstanding Schedule I, such
options will become fully vested and exercisable upon the termination
of the Employee's employment by the Employer without Cause, by the
Employee for Good Reason or upon a Change of Control (as defined
below), provided that to the extent the minimum waiting periods
stipulated by law or listing regulations have not expired as of the
date of termination of employment or Change of Control, such options
shall become fully vested and exercisable on the expiration of such
minimum waiting periods. Notwithstanding any provision in this
Agreement or any other agreement or document to the contrary, and upon
becoming exercisable, the Option and any
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other stock options granted to the Employee under any plan, practice, policy or
program of the Employer, shall remain outstanding and exercisable for the full
ten (10) year period from the date such stock option was issued regardless of
any termination of Employee's employment.
(d) During the Employment Period, the Employee shall be entitled to
participate in all long-term incentive compensation practices,
policies and programs of the Employer and its affiliated companies
which are made available generally to other executive officers of the
Employer and its affiliated companies. The term "affiliated companies"
means all companies controlled by the Employer.
(e) The amounts of the Base Salary, Target Bonus and long term incentive
opportunities shall be reviewed from time to time in a manner
consistent with the Employer's past practice based on competitive
market pay levels.
3. BENEFITS, PERQUISITES AND EXPENSES
(a) During the Employment Period: (i) the Employee shall be entitled to
participate in all savings and retirement plans, practices, policies
and programs of the Employer and its affiliated companies which are
made available to any other executive officers of the Employer and its
affiliated companies; and (ii) the Employee and/or the Employee's
family, as the case may be, shall be eligible for participation in,
and shall receive all benefits under, all welfare benefit plans,
practices, policies and programs provided by the Employer and its
affiliated companies (including, without limitation, medical,
prescription, dental, disability, life insurance, group life
insurance, short- and long-term disability, accidental death and
travel accident insurance plans and programs) which are made available
to any other executive officers of the Employer and its affiliated
companies.
(b) During the Employment Period, the Employee shall be entitled to paid
vacation in accordance with the Employer's practice and policies. The
ability to carry forward vacation time shall be subject to the
Employer's vacation policy applicable to executive officers of the
Employer as in effect from time to time.
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(c) The Employer shall pay or promptly reimburse the Employee for any
fees, dues and expenses with respect to any club, society, or
organization in which the Employee is a member provided that such
memberships are reasonably necessary to assist the Employee in
performing his duties and responsibilities hereunder. The Employer
shall provide the Employee with a supplemental cash payment to
gross-up the Employee for any tax liability incurred with respect to
any such payment or reimbursement, including any such liability
incurred with respect to the payment provided for by this sentence.
(d) The Employer shall pay or promptly reimburse the Employee for the
costs of obtaining financial and tax planning advice and preparation
of tax returns by a leading international accounting firm chosen by
the Employee for each relevant jurisdiction in connection with the
employment of the Employee hereunder during the Employment Period and
for the year in which the Employment Period terminates. The Employer
shall provide the Employee with a supplemental cash payment to
gross-up the Employee for any tax liability incurred with respect to
any such payment or reimbursement, including any such liability
incurred with respect to the payment provided for by this sentence.
(e) The Employer shall pay or promptly reimburse the Employee for all
expenses incurred by the Employee or the Employee's spouse in
connection with the performance of the Employee's duties hereunder,
including without limitation any travel (including without limitation
the use of a car service to travel from home to the office),
accommodation or meals and entertainment costs. The Employer shall
provide the Employee with a supplemental cash payment to gross-up the
Employee for any tax liability incurred with respect to any such
payment or reimbursement, including any such liability incurred with
respect to the payment provided for by this sentence.
(f) During the Employment Period, the Employee shall be entitled to the
use of a limousine service for business related transport in
accordance with the Employer's policies.
(g) In order to compensate the Employee for any additional income tax
liability that he may be subject to in Canada or any other non-U.S.
jurisdiction as a result of his employment hereunder, the Employer
shall provide the Employee with quarterly tax-equalization payments,
such that the Employee's net income after taxes from all compensation
received by
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Employee from the Employer is equal to what his net income after taxes
would have been if such amounts were earned in New Canaan,
Connecticut. The quarterly payments will be based on estimates
calculated by a leading international accounting firm chosen by the
Employee, on behalf of the Employee and Employer. Upon the filing of
the Employee's final tax returns each year, the accounting firm shall
calculate the total tax-equalization amount and determine whether
there is a shortfall or excess between such amount and the quarterly
payments paid to the Employee in respect of such tax year. If there is
a shortfall, the Employer shall pay the Employee the difference, and,
if there is an excess, the Employee shall pay the Employer such
difference. In the event any governmental taxing authority audits or
otherwise challenges the Employee's tax liability determined by the
international accounting firm, the Employer shall advance all costs of
defending the calculation and shall indemnify the Employee and hold
the Employee harmless from any and all costs and liabilities related
to such governmental taxing authority's audit or other action.
(h) As regards the pension benefits to which the Employee would normally
be entitled as a employee of the Employer, the Employer shall adjust
its retirement programs as regards the rights and interests of the
Employee so as to meet the requirements of SCHEDULE II attached
hereto.
4. EMPLOYMENT PERIOD.
The Employment Period shall commence on March 12, 2001 (the "EFFECTIVE
DATE") and shall end on the day preceding the fifth anniversary of the Effective
Date (the "SCHEDULED TERMINATION DATE"); provided, however, that on the fifth
anniversary of the Effective Date, and on every anniversary of the Effective
Date thereafter, the Employment Period shall be extended for a period of one
year (and the Scheduled Termination Date shall also be extended until the day
preceding such anniversary date) unless either party gives notice to the other
at least ninety (90) days before such anniversary date that such party is
electing not to extend the Employment Period. Notwithstanding the foregoing, the
Employee's employment hereunder may be terminated during the Employment Period
upon the earliest to occur of the following events (at which time the Employment
Period shall be terminated):
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(a) DEATH. The Employee's employment hereunder shall terminate upon his
death.
(b) DISABILITY. The Employer shall be entitled to terminate the
Employee's employment hereunder for "DISABILITY" being the disability
of the Employee as defined according to the Employer's applicable
Long-Term Disability program and insurance policies.
(c) CAUSE. The Employer may terminate the Employee's employment hereunder
for Cause. For purposes of this Agreement, the term "CAUSE" shall
mean: (i) the willful failure of the Employee substantially to perform
the Employee's duties under this Agreement (other than as a result of
physical or mental illness or injury) that has a material adverse
effect on the Employer, after the Board delivers to the Employee a
written demand for substantial performance that specifically
identifies the manner in which the Board believes that the Employee
has not substantially performed the Employee's duties; and (ii) the
willful engaging by the Employee, in the Employee's capacity as an
employee of the Employer, in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Employer. Any act or
failure to act that is based upon authority given pursuant to a
resolution duly adopted by the Board, or the advice of counsel for the
Employer, shall not constitute Cause. For purposes of this SECTION
4(c), any act or failure to act by the Employee shall not be
considered "willful" unless done by the Employee not in good faith and
without reasonable belief that the Employee's action or omission was
in the best interests of the Employer. Cause shall not exist unless
and until the Employer has delivered to the Employee, within ninety
(90) days after the Employer becomes aware of the proposed basis
giving rise to Cause, a copy of a resolution duly adopted by a
majority of the Board at a meeting of the Board called and held for
such purpose (after reasonable but in no event less than thirty (30)
days' notice to the Employee and an opportunity for the Employee,
together with his counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Employee was guilty
of the conduct set forth above and specifying the particulars thereof
in detail. The Employee shall have the right to cure the same, to the
extent reasonably susceptible to cure, within thirty (30) days of the
date of such written notice. This SECTION 4(c) shall not prevent the
Employee from challenging in any court of competent jurisdiction the
Board's determination that Cause exists or that the Employee has
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failed to cure any act (or failure to act) that purportedly formed the
basis for the Board's determination.
(d) Good Reason. The Employee may terminate his employment hereunder for
"GOOD REASON," for any of the following reasons enumerated in this
SECTION 4(d) (and such termination shall be treated as if it were a
termination by the Employer without Cause, and not a voluntary
termination by the Employee): (i) the assignment to the Employee of
any duties inconsistent with SECTION 1(a) of this Agreement, or any
other action by the Employer that results in a diminution in the
Employee's position, authority, status, duties or responsibilities as
they currently exist, or any failure to reelect the Employee to any
positions or offices the Employee held as contemplated hereunder; (ii)
any reduction by the Employer of the Employee's Base Salary or Target
Bonus or in any material term or condition of his compensation or
benefits as they currently exist, or failure to comply with, or breach
of, any of the provisions of this Agreement or any other agreement
related to the Employee's employment or other relationship with the
Employer, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the
Employer promptly after receipt of notice thereof given by the
Employee; (iii) a Change of Control (as defined in SCHEDULE III
attached hereto); (iv) if the Employee, having accepted to be
nominated, is not re-elected at each annual general meeting of the
shareholders of the Employer following the date hereof at which such
an election is required under the Articles of Incorporation or Bylaws
of the Employer, as the case may be; (v) if the Employee is removed as
a member of the Board at any time during the Employment Period; or
(vi) any purported termination of the Employee's employment by the
Employer for a reason or in a manner not expressly permitted by this
Agreement. Termination by the Employee pursuant to this SECTION 4(d)
shall not be effective until the Employee delivers to the Board a
notice specifically identifying the conduct of the Employer which the
Employee believes constitutes a reason enumerated in this SECTION 4(d)
and, to the extent reasonably susceptible to cure, the Employee
provides the Board thirty (30) days to remedy such conduct. This
SECTION 4 (d) shall not prevent the Employer from challenging in any
court of competent jurisdiction the Employee's determination that
"Good Reason" exists or that the Employer has failed to cure any act
(or failed to act) that purportedly formed the basis for Employee's
determination.
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(e) WITHOUT CAUSE. The Employer may terminate the Employee's employment
hereunder without Cause, provided that the Employer provides the
Employee with notice of its intent to terminate the Employee's
employment without Cause at least thirty (30) days in advance of the
Date of Termination (as defined below).
(f) WITHOUT GOOD REASON. The Employee may terminate his employment
hereunder without Good Reason, provided that the Employee provides the
Employer with notice of his intent to terminate his employment without
Good Reason at least thirty (30) days in advance of the Date of
Termination (as defined below).
(g) PUBLIC ANNOUNCEMENT OF TERMINATION. The Employee and the Employer
shall exercise reasonable efforts to mutually agree on the time,
method and content of any public announcement regarding the Employee's
termination of employment hereunder. Neither the Employee nor the
Employer shall make any public statements which are inconsistent with
the information which has been so agreed upon by the Employer and the
Employee and the parties hereto shall cooperate with each other in
refuting any public statements made by other persons, which are
inconsistent with the information mutually agreed upon between the
Employee and Employer as described above.
5. TERMINATION PROCEDURE.
(a) NOTICE OF TERMINATION. Any termination of the Employee's employment
by the Employer or by the Employee during the Employment Period (other
than termination pursuant to SECTION 4(a)) shall be communicated by
written "NOTICE OF TERMINATION" to the other party hereto in
accordance with SECTION 15(a) hereof. For purposes of this Agreement,
a Notice of Termination shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the
provision so indicated and shall attach any prior notices required
under SECTION 4.
(b) DATE OF TERMINATION. "DATE OF TERMINATION" shall mean (i) if the
Employee's employment is terminated by his death, the date of his
death, (ii) if the Employee's employment is terminated pursuant to
SECTION 4(b), thirty (30) days after Notice of Termination (provided
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that the Employee shall not have returned to the substantial
performance of his duties during such thirty (30) day period), (iii)
if the Employee's employment is terminated pursuant to SECTIONS 4(E)
or 4(F), a date specified in the Notice of Termination which is at
least thirty (30) days from the date of such notice as specified in
such SECTIONS 4(E) or 4(F); and (iv) if the Employee's employment is
terminated for any other reason, the date on which a Notice of
Termination is given or any later date (within thirty (30) days (or
any alternative time period agreed upon by the parties) after the
giving of such notice) set forth in such Notice of Termination.
6. TERMINATION PAYMENTS.
(a) WITHOUT CAUSE OR FOR GOOD REASON. In the event of the termination of
the Employee's employment during the Employment Period by the Employer
without Cause or by the Employee for Good Reason, the Employee shall
be entitled to:
(i) a payment of (A) the Employee's Base Salary through the Date of
Termination (to the extent not theretofore paid), (B) any earned
but unpaid Annual Bonus in respect of the year ending prior to
or coincident with the Date of Termination, (C) any accrued
vacation pay, and (D) any unreimbursed expenses under SECTION
3(c), (d), (e) and (g) (together, the payments under SECTION
6(a)(i)(A), (B), (C), and (D), the "ACCRUED OBLIGATIONS");
(ii) a lump-sum payment equal to the product of (A) the greater of
(x) the quotient of the number of full and partial months from
the Date of Termination to the Scheduled Termination Date,
divided by twelve (12), and (y) three (3), and (B) the
Employee's highest annualized Base Salary in effect during the
Employment Period and Target Bonus (assuming a Target Bonus
equal to one hundred percent (100%) of the Employee's highest
annualized Base Salary and all performance objectives have been
met);
(iii) immediate acceleration of vesting and exercisability of all
stock grants, stock options and any other incentive
compensation;
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(iv) an additional service credit (for all purposes, including without
limitation vesting and benefit accrual) under the Employer's
Supplemental Executive Retirement Plan (SERP) in accordance with
SCHEDULE II, to bring the total years of service to five (5)
years under SCHEDULE II; and
(v) continuation of all benefits provided in SECTION 3 hereunder from
the Date of Termination to the later of (A) the Scheduled
Termination Date, or (B) the third anniversary of the Date of
Termination.
(b) CAUSE OR WITHOUT GOOD REASON. If the Employee's employment is
terminated during the Employment Period by the Employer for Cause or
by the Employee without Good Reason, the Employer shall pay to the
Employee: (i) the Accrued Obligations, and (ii) a pro-rata portion of
the Target Bonus (assuming a Target Bonus equal to one hundred percent
(100%) of the Employee's annualized Base Salary then in effect and all
performance objectives have been met).
(c) DEATH OR DISABILITY. If the Employee's employment is terminated
during the Employment Period as a result of the Employee's Death or
the Employee's Disability, the Employee or the Employee's estate or
legal representative, as the case may be, shall be entitled to receive
the proceeds of the insurance policies and similar employee benefit
plans and policies referred to under SECTION 3 above and, except as
set forth in SCHEDULE IV attached hereto, no further compensation from
the Employer.
(d) TIME OF PAYMENTS. Unless otherwise specified in this Section 6 or in
the policies and plans referred to in SECTION 6(c), all payments due
under this SECTION 6 shall be paid no later than ten (10) days after
the Date of Termination.
(e) SCHEDULED TERMINATION DATE. Notwithstanding anything else contained
herein and for the purposes of clarity, the Employee shall not be
entitled to receive any termination payments or other payments similar
to those referred to under this SECTION 6 (other than Accrued
Obligations) in the event that this Agreement terminates on the
Scheduled Termination Date.
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7. NON-EXCLUSIVITY OF RIGHTS.
Any vested benefits and other amounts that the Employee is otherwise
entitled to receive under any employee benefit plan, policy, practice or
program of the Employer or any of its affiliated companies shall be payable
in accordance with such employee benefit plan, policy, practice or program
as the case may be, except as explicitly modified by this Agreement.
8. FULL SETTLEMENT; NO DUTY TO MITIGATE.
(a) The Employer's obligation to make the payments provided for in, and
otherwise to perform its obligations under, this Agreement shall not
be affected by any set off, counterclaim, recoupment, defense or other
claim, right or action that the Employer may have against the Employee
or others.
(b) In no event shall the Employee be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement, and
such amounts shall not be reduced, regardless of whether the Employee
obtains other employment.
9. CONFIDENTIALITY OF INFORMATION; DUTY OF NON-DISCLOSURE; NON-COMPETITION.
(a) CONFIDENTIALITY AND NON-COMPETITION. The Employee acknowledges and
agrees that his employment as President and Chief Executive Officer of
the Employer under this Agreement is conditional upon his agreeing to
be bound by the Confidentiality Undertaking attached hereto as
SCHEDULE V and the Non-Competition Undertaking attached hereto as
SCHEDULE VI.
(b) REMEDIES. The parties hereto hereby declare that the payment of money
as damages or indemnification by the Employee to the Employer will
alone be inadequate compensation for the loss and damages that will
accrue to the Employer by reason of a failure by the Employee to
perform any of his obligations under this SECTION 9. Accordingly, if
the Employer institutes any action or proceeding to enforce the
provisions hereof, to the extent permitted by applicable law, the
Employee hereby waives the claim or defense that the Employer
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has an adequate remedy at law, and the Employee shall not urge in any
such action or proceeding the defense that any such remedy exists at
law.
(c) SURVIVAL OF COVENANTS. This SECTION 9 and the undertakings referred
to herein shall survive the termination of the Employment Period.
10. NON-SOLICITATION.
During the Employment Period and for a period of two (2) years following
the Date of Termination, the Employee shall not directly or indirectly
induce any employee of the Employer or any of its subsidiaries to terminate
employment with such entity, and shall not employ or offer employment to
any person who is or was employed by the Employer or a subsidiary thereof
unless such person shall have ceased to be employed by such entity for a
period of at least three (3) months.
11. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) GENERAL. The Employer undertakes to indemnify the Employee in
accordance with SCHEDULE VII.
(b) DIRECTORS' AND OFFICERS' INSURANCE. The Employer shall maintain
appropriate and customary directors' and officers' liability insurance
for the benefit of the Employee, and the Employee shall be entitled to
the protection of any other insurance policies the Employer or any of
its affiliates from time to time maintains for the benefit of its
senior executive officers and directors (or substantially similar
policies) respecting liabilities, costs, charges, and expenses of any
type whatsoever incurred or sustained by the Employee (or the
employee's legal representatives or other successors) in connection
with any action, suit or proceeding to which the Employee (or the
Employee's legal representatives or other successors) may be made a
party or may be threatened to be made a party by reason of the
Employee's being or having been a director, officer, employee or agent
of the Employer or serving or having served at the request of the
Employer as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
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(c) SURVIVAL OF OBLIGATION. This SECTION 11 and the undertakings referred
to herein shall survive the termination of the Employment Period.
12. CHANGE OF CONTROL PROVISIONS.
(a) The Employer shall enter into with the Employee a Change of Control
Agreement in the form attached hereto as SCHEDULE III. Notwithstanding
anything to the contrary in SCHEDULE III or in any other agreement or
arrangement, nothing in SCHEDULE III shall diminish, reduce or
otherwise adversely affect the payments, rights and benefits provided
to Employee in this Agreement, including without limitation the
payments, rights and benefits that the Employee becomes entitled to as
a result of a Change of Control. Accordingly, in the event any
provision in SCHEDULE III (or any successor Change of Control
Agreement) conflicts or is otherwise inconsistent with any provision
of this Agreement, this Agreement shall govern. In addition, the
definition of Change of Control provided in SCHEDULE III shall apply
to this Agreement even after the expiration of SCHEDULE III, unless
any new Change of Control Agreement specifically provides that it is
intended to replace the definition of Change of Control in this
Agreement.
(b) In the event of a Change of Control (as defined in SCHEDULE III), in
addition to the payments provided under SECTION 6 or under any other
plan, program, agreement or arrangement, the Employee shall further be
entitled to additional payments equal to: (A) any excise taxes imposed
by Section 4999 of the Internal Revenue Code of 1986 (the "CODE") (or
any similar taxes or charges imposed by any other state or
jurisdiction, including without limitation Canada) on the payments or
benefits to or for the benefit of the Employee provided for herein or
under any other plan, program, agreement or arrangement of the
Employer (or any member of the Employer's affiliated group as such
term is defined in Section 1504 of the Code, without regard to Section
1504(b) thereof); and (B) any such excise taxes and any other taxes
imposed by the Code or under the laws or regulations of any other
state or jurisdiction (including without limitation, Canada) on the
payments provided for in this SECTION 12.
(c) The Employer shall pay to the Employee the payments provided for in
this Section 12 as soon as practical following the determination of
the tax counsel referred to below. Tax counsel selected by the
Employee and reasonably acceptable to the Employer shall
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determine on behalf of the Employee and the Employer whether the
payments provided for by this SECTION 12 shall be required. Tax
counsel shall determine that payments shall be necessary only if, and
to the extent that, it is more likely than not that the payments or
benefits are subject to a tax. In making the determinations required
by this SECTION 12, tax counsel may rely on benefit consultants,
accountants or other experts. The Employer hereby agrees to pay all
reasonable fees and expenses of such tax counsel and other experts.
If, subsequent to the payment to the Employee of payments pursuant to
this SECTION 12, the tax counsel referred to in this SECTION 12
reasonably determines that the amount of the payments paid pursuant to
this SECTION 12 are less or more than the amount required to have been
paid, then based on such determination, the Employer shall pay to the
Employee any shortfall and the Employee shall repay any overpayment to
the Employer. In the event that tax counsel referred to in this
SECTION 12 reasonably determines that the Employee is required to pay
interest or penalties to a governmental taxing authority as a result
of his non-payment of taxes in accordance with any prior determination
pursuant to this SECTION 12, the Employer shall pay to the Employee an
additional amount equal to (i) the amount of such interest and/or
penalties and (ii) any excise tax and any other taxes imposed by the
Code or under the laws of any state or jurisdiction on the payments
provided for in this sentence. Nothing in this SECTION 12 shall be
interpreted as absolving the tax counsel from any professional
responsibility with respect to his determinations hereunder.
13. LEGAL FEES. The Employer shall reimburse the Employee for legal and other
professional fees (based upon a reasonable hourly rate) and reasonable
out-of-pocket expenses and other fees incurred in connection with the
preparation of this Agreement.
14. ENFORCEMENT.
(a) Any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement, or the breach thereof (except as otherwise
specified herein), shall be settled by arbitration. The arbitration
shall be administered by the American Arbitration Association ("AAA")
under its Commercial Arbitration Rules ("RULES") except as those Rules
conflict with the provisions of this SECTION 14, in which case the
provisions of this SECTION 14 shall control. Nothing herein shall
limit the Employer's right to seek injunctive relief in a court of
competent
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jurisdiction in connection with a breach by the Employee of his
obligations under Section 9(b) of this Agreement.
(b) The parties shall submit the dispute to the New York City regional
office of the AAA and the situs of the arbitration shall be the New
York metropolitan area unless another location is otherwise agreed to
in writing by the parties.
(c) The arbitration shall be conducted by a panel of three arbitrators.
Each such arbitrator shall be an attorney admitted to practice law in
a state of the United States. Within thirty (30) business days of the
filing of a demand for arbitration by the claimant(s) with the New
York City regional office of the AAA, the claimant(s) and the
respondent(s) shall each appoint one arbitrator, and within sixty (60)
business days of the date of their appointment, the two arbitrators
shall appoint a third arbitrator, who shall act as chairperson. If any
arbitrator is not appointed within the times specified above, the AAA
or President of local bar association where appropriate shall appoint
such arbitrator(s) in accordance with the Rules.
(d) The arbitration proceedings and any record thereof, including all
submissions, shall be confidential, except as necessary to enforce the
arbitration award.
(e) The Employer agrees to pay as incurred, to the full extent permitted
by law, all legal fees (based upon a reasonable hourly rate),
reasonable out-of-pocket expenses and all costs of any arbitration
which the Employee may reasonably incur as a result of any arbitration
contest (regardless of the outcome thereof) pursued or defended
against in good faith by the Employee regarding the validity or
enforceability of, or liability under, any provision of this Agreement
or any guarantee of performance thereof (including as a result of any
contest by the Employee of the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the
lowest rate specified to be payable by the Employer to any of its
bankers or other arm's length lenders in respect of U.S. dollar
denominated indebtedness.
(f) Judgment on the award rendered by the arbitrators shall be final and
binding upon the parties and may be entered in any court having
competent jurisdiction thereof.
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15. MISCELLANEOUS.
(a) NOTICES. Any notice to be given hereunder shall be given in writing.
Notice shall be deemed to be given when delivered by hand, or three
(3) days after being mailed, postage prepaid, registered with return
receipt requested, to the following addresses:
If to the Employer:
Alcan Aluminium Limited
0000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx, XXXXXX X0X 0X0
Attention: Chairman
with a copy to:
Senior Vice President and Chief Legal Officer
If to the Employee:
Xxxxxx Xxxxx
000 Xxxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
X.X.X.
with a copy to:
Xxxxxx Xxxx, Esq.
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as any party hereto may designate by notice to the
other, and shall be deemed to have been given upon receipt.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto with respect to the Employee's employment
with the Employer.
(c) MODIFICATION OR AMENDMENT. This Agreement may be amended only by an
instrument in writing signed by the parties hereto, and any provision
hereof may be waived only by an instrument in writing signed by the
party or parties against whom or which enforcement of
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such waiver is sought. The failure of any party hereto at any time to
require the performance by any other party hereto of any provision
hereof shall in no way affect the full right to require such
performance at any time thereafter, nor shall the waiver by any party
hereto of a breach of any provision hereof be taken or held to be a
waiver of any succeeding breach of such provision or a waiver of the
provision itself or a waiver of any other provision of this Agreement.
(d) SUCCESSORS.
(i) This Agreement is binding on and is for the benefit of the
parties hereto and their respective successors, heirs,
executors, administrators and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may
be assigned by the Employer or by the Employee.
(ii) The Employer shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Employer expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Employer
would have been required to perform it if no such succession had
taken place. As used in the Agreement, the "Employer" shall mean
both the Employer as defined above and any such successor that
assumes and agrees to perform this Agreement, by operation of
law or otherwise.
(iii) Notwithstanding the foregoing, the Employer shall have the right
to assign all or part of its obligations hereunder to any of its
U.S. incorporated subsidiaries provided that the Employer shall
remain responsible on a solidary (i.e., joint and several) basis
with the assignee as regards the obligations so assigned.
(e) SEVERABILITY. Each provision hereof is severable from this Agreement,
and if one or more provisions hereof are declared invalid, the
remaining provisions shall nevertheless remain in full force and
effect. If any provision of this Agreement or portion thereof is so
broad, in scope or duration or otherwise, as to be unenforceable, such
provision or portion thereof shall be interpreted to be only so broad
as is enforceable.
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(f) WAIVER. The failure to enforce at any time any of the provisions of
this Agreement or to require at any time performance by the other
party of any of the provisions of this Agreement shall in no way be
construed to be a waiver of such provisions or to affect the validity
of this Agreement, or any part hereof, or the right of either party
thereafter to enforce each and every such provision in accordance with
the terms of this Agreement.
(g) TAX WITHHOLDING. The Employer may withhold from any amounts payable
to the Employee hereunder all federal, state, city or other taxes that
the Employer may reasonably determine are required to be withheld
pursuant to any applicable law or regulation.
(h) RULE OF CONSTRUCTION. The parties hereto acknowledge and agree that
each party has reviewed and negotiated the terms and provisions of
this Agreement and has had the opportunity to contribute to its
revision. Accordingly, the rule of construction to the effect that
ambiguities are resolved against the drafting party shall not be
employed in the interpretation of this Agreement. Rather, the terms of
this Agreement shall be construed fairly as to both parties hereto and
not in favor or against either party. This Agreement has been prepared
in the English language at the specific request of both parties. All
monetary amounts referred to herein are expressed in U.S. dollars
unless otherwise stipulated as is the case for Schedule I.
(i) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the STATE OF NEW YORK, USA, without
reference to its principles of conflicts of law.
(j) COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(k) HEADINGS. The headings in this Agreement are inserted for convenience
of reference only and shall not be a part of or control or affect the
meaning of any provision hereof.
* * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Alcan Aluminium Limited
/s/ Xx. Xxxx X. Xxxxx
-------------------------------
Name: Xx. Xxxx X. Xxxxx
Title: Chairman
/s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx
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SCHEDULE I
STOCK OPTION GRANT
This Agreement made as of the 23rd day of February 2001, between:
ALCAN ALUMINIUM LIMITED
(the "Company")
- and -
Xxxxxx Xxxxx
(the "Optionee")
WHEREAS the Company has adopted the "Alcan Executive Share Option Plan" (the
"Plan") as set out in a Circular dated April 22, 1993 providing for the grant to
key employees of the Company and its subsidiaries of options to purchase Shares
of the Company; and
WHEREAS the Company wishes to grant an option to the Optionee subject to the
terms of the Plan and the terms contained herein and the Optionee has agreed to
accept the said grant of such option;
NOW, THEREFORE, the parties hereto agree as follows:
1. CONSTRUCTION
The terms and conditions of the Plan, as the same may be revised, amended
or supplemented from time to time, shall form part of this Agreement as if
set out at length herein. If a conflict arises between the terms of this
Agreement and those of the Plan, the terms of the Plan shall govern,
subject, in each case, to the relevant provisions of the Optionee's
Employment Agreement of the same date hereof.
2. GRANT OF OPTION
The Company hereby grants to the Optionee the option ("C Option") to
purchase the number of Shares ("Shares") of the Company at the subscription
price and during the Option Period set forth below (subject to the terms of
the Plan and this Agreement):
Subscription Option Period
Effective Number Price -------------------------
Date of shares (CAD/Share) From To
---- --------- ----------- ---- --
March 12, 2001 579,000 $59.35
March 12, March, 11
2001 2011
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3. Waiting Period
The expression "Waiting Period" as defined in the Plan shall, in its
application to the C Options, mean a period (ending not less than three
months from the Effective Date) during which the Market Value of a Share
for each of 21 consecutive trading days exceeds the minimum market value
stated in column 1 of the following table whereupon the portion of the
original C Option stated in column 2 of that table shall become vested in
the Optionee for exercise at his discretion:
------------------------------------------- ---------------------------------------------------------------
(1) (2)
Minimum Market Value as percentage of the Portion of the original C Option granted which may be
February 23, 2001 reference price: exercised:
=========================================== ===============================================================
120% not exceeding 33%
------------------------------------------- ---------------------------------------------------------------
140% not exceeding 66%
------------------------------------------- ---------------------------------------------------------------
160% 100%
------------------------------------------- ---------------------------------------------------------------
EXCEPTIONS AND CLARIFICATIONS:
(a) reference is made to the Optionee's Employment Agreement with respect
to the exceptions to the waiting period stipulations and the term of
the C Option.
(b) the Waiting Period shall be waived on the day which is one year
preceding the date of termination of the Option Period.
(c) the February 23, 2001 reference price shall be CAD $ 55.83.
4. HOLDING PERIOD
There shall not be a Holding Period for the Shares issued on the exercise
of C Options.
5. STOCK APPRECIATION RIGHTS
No stock appreciation rights shall be connected with the C Option.
6. EXERCISE OF OPTION AND SPECIAL PAYMENT ON EXERCISE
A C Option may be exercised (in part or in whole) by the Optionee giving
written notice to the Vice President, Human Resources of the Company (with
a copy to the Secretary of the Company) specifying the number of Shares
being purchased, together with payment in Canadian Dollars of the
subscription price for such Shares. At the time of exercise of the Option
(in whole or in part), the Optionee shall be entitled to receive from the
Company a per share adjusting payment equal to CAD $ 3.52 in the form of
Deferred Share Units (as defined in the Company's Deferred Share Unit
Plan). The number of Deferred Share Units to be credited to the account of
the Optionee will be equal to the number of options exercised multiplied by
CAD $ 3.52 divided by the average common share trading price on the Toronto
Stock Exchange on the date of exercise.
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7. INSIDERS
Notwithstanding anything contained herein, if the Optionee is, or becomes,
an insider of the Company for the purposes of any applicable law, the
exercise of the Option and disposal of the Shares acquired pursuant to such
exercise shall be subject to restrictions under such law. The Optionee
shall be responsible for complying with all obligations arising in
connection with the Shares under applicable securities or other laws.
8. NOTICE
Any notice or request which either party hereto gives to the other shall be
in writing, and if to the Company, addressed to:
Alcan Aluminium Limited
X.X. Xxx 0000
Xxxxxxxx, Xxxxxx, Xxxxxx
X0X 0X0
Attention: Vice President, Human Resources, or
Secretary
as the case may be
and, if to the Optionee, at his address as shown in the records of the
Company, and in both cases to such other address as one party may designate
in writing from time to time to the other. No notice hereunder shall be
deemed delivered until it has been received.
9. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Quebec. The Parties hereto have agreed and
requested that this Agreement be drafted in English. Les parties ont
convenu et requis que cette convention soit redigee en anglais.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
ALCAN ALUMINIUM LIMITED
Per: /s/ Xxxxxx Xxxxxxx Signature: /s/ Xxxxxx Xxxxx
______________________ __________________________
Xxxxxx Xxxxxxx Xxxxxx Xxxxx
Senior Vice President
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RETIREMENT BENEFIT AGREEMENT
THIS AGREEMENT is made in duplicate as of the 12 of March, 2001
BETWEEN XXXXXX XXXXX
(hereinafter referred to as "the Executive")
OF THE FIRST PART
AND ALCAN INC., a Corporation incorporated under the laws of Canada
(hereinafter referred to as "Alcan").
OF THE SECOND PART
WHEREAS by Agreement dated February 23, 2001 (the "Employment Agreement"), Alcan
agreed to employ the Executive as its President and Chief Executive Officer and
as a director, and the Executive agreed to accept such positions;
WHEREAS Section 3 and Schedule II of the Employment Agreement set forth in
general terms an undertaking by Alcan to provide retirement benefits to the
Executive in the manner described in such Section and such Schedule,
respectively;
WHEREAS, in order to give effect to the above-mentioned Section and Schedule of
the Employment Agreement and in order to retain the Executive in its employ,
Alcan is entering into a retirement benefits agreement (hereinafter referred to
as the "Agreement") to pay to the Executive retirement benefits (hereinafter
referred to as the "Retirement Benefit") as herein stated;
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NOW, THEREFORE this Agreement witnesses that the parties hereto covenant and
agree each with the other as follows:
1. INTERPRETATION
1.1 In this Agreement, "Plan" means Alcan's qualified pension plan in the
United States of America called the "Alcancorp Pension Plan". Unless
the context otherwise specifies or requires, all terms contained in
this Agreement which are defined in the Plan shall for the purposes of
this Agreement have the meaning given to such terms in the Plan.
1.2 Words importing the singular number shall include the plural and vice
versa, and words importing the masculine gender shall include the
feminine gender.
2. RETIREMENT, TERMINATION AND DEATH BENEFIT
ALCAN shall, in the event of the termination of the Executive's employment
for whatever reason, including his retirement or his death (hereinafter
referred to as the "Date of Determination"), determine a Retirement Benefit
payable by Alcan to the Executive or, in the event of his death, to his
Qualified Spouse, in the manner provided in paragraph 3 below.
3. DETERMINATION OF BENEFITS AND PAYMENTS
3.1 The total Retirement Benefit as of the Date of Determination, in U.S.
currency, is a monthly pension equal to the product of
-- $6,432, and
-- the number of years and fraction of years of service
rendered from 1 April 2001 by the Executive to Alcan, up to
a maximum of 5 years. A fraction of month shall be rounded
up to a whole month.
3.2 Notwithstanding paragraph 3.1 above, if the Executive shall become
disabled and qualify for payment under Schedule IV of the Employment
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Agreement, the service accrual for pension purposes shall be at the
rate of one half of one month for each month during which a payment is
made pursuant to paragraph (ii) of the aforementioned Schedule IV
("Supplemental Disability Payment"),
3.3 If the Executive does not have a Qualified Spouse (as defined under
the Plan) at the pension commencement date, the Retirement Benefit
shall be payable for the lifetime of the Executive. If the Executive
has a Qualified Spouse, the Executive may elect, before the pension
commencement date, to receive a reduced Retirement Benefit for his
lifetime and his surviving Qualified Spouse shall receive either 50%
of the unreduced Retirement Benefit or 100% of the reduced Retirement
Benefit for her lifetime.
The applicable reduction factors are as follows:
-- 50% spousal option: 90.4%
-- 100% spousal option: 83.9%.
3.4 Notwithstanding paragraph 3.1, the Retirement Benefit may be commuted
to an immediate cash value on an Actuarially Equivalent basis at the
applicable Date of Determination, in whole or in part, at the request
of the Executive and with the consent of the Board of Directors of
Alcan. Such request shall be made in writing to Alcan at least one
month prior to his applicable Date of Determination, or at the pension
commencement date if it occurs later than said Date of Determination.
Actuarial Equivalence shall be determined by the rules in the Plan for
the cash-out of Members' benefits (Section 4.3.4 of the Plan). Any
Retirement Benefit payable in any year is limited to the deduction
limitation provided in Section 162(m) of the Internal Revenue Code.
Any amount deferred pursuant to this deduction limitation shall be
credited with interest at the rate used to calculate the actuarial
equivalent of the Retirement Benefits.
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3.5 In the event of the Executive's death prior to his Pension
Commencement Date, a monthly spousal benefit will be payable to the
Executive's surviving Qualified Spouse for her life.
The amount of the monthly spouse's benefit will be equal to the amount
of benefits that the Qualified Spouse would have received had the
Executive retired on the day before his death, chosen the 50% spousal
option and then died the following day.
3.6 The monthly pension shall be payable from the first of the month
coinciding with or next following the Date of Determination.
4. GENERAL PROVISIONS
4.1 Nothing contained herein shall constitute an agreement or undertaking
by the Executive to remain in the employment of the Alcan for any
specific period, nor an undertaking by Alcan to employ the Executive
for any specific period. The term of the Executive's employment and
its termination shall be governed by the terms of the Employment
Agreement.
4.2 Any benefits which the Executive shall receive under this Agreement
shall be in substitution for any rights he may now or hereafter have
to an annuity, retirement allowance, pension or similar benefit under
any other agreement with Alcan or any of its Subsidiaries. The
Executive hereby agrees that he will be excluded from participation to
the Plan.
4.3 Alcan shall be entitled to assign its rights hereunder to, and to
cause all or any portion of its obligations hereunder to be assumed
by, any direct or indirect subsidiary of Alcan incorporated in the
United States of America. However Alcan shall remain liable on a joint
and several basis with the assignee as regards any obligation so
assumed.
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4.4 This Agreement and all of the rights and benefits of the Executive
hereunder are personal to the Executive, and may not be alienated,
assigned or transferred by the Executive in whole or in part,
voluntarily or involuntarily.
4.5 This Agreement shall enure to the benefit of and be binding upon the
heirs, executors, administrators and successors of the parties hereto.
4.6 The benefits paid to the Executive under this Agreement are considered
by Alcan to be in the nature of a retirement benefit. However, Alcan
neither warrants nor guarantees that the benefits will be so regarded
and so treated by third parties, including taxation authorities of the
United States of America or Canada.
4.7 Any notice to be given hereunder shall be given in writing and may be
given either personally or may be sent by registered mail, addressed
in the case of the Executive to him at his last known place of
residence and, in the case of Alcan Inc., at its principal place of
business, 0000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxx, X0X 0X0, c/o
the Secretary.
4.8 Pension benefits provided under this agreement are not subject to
post-retirement pension augmentations.
4.9 Alcan will use its best endeavors at all times to ensure payment of
the Retirement Benefit provided herein, but shall be under no
obligation in that regard to set aside any amounts or make any
contribution to any trust or other fund or establish any book reserve
in the amount of the Retirement Benefit payable hereunder, in
accordance with generally acceptable accounting practices.
4.10 This Agreement shall be construed in accordance with and governed by
the laws of the State of New York.
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IN WITNESS WHEREOF the parties hereto have duly executed this Agreement,
with effect as of the day and year first above written, at the places and on the
dates indicated below.
ALCAN INC.
Per: /s/ Xxxx X. Xxxxx Per: /s/ Xxxxxx Xxxxx
---------------------- ------------------------
Xxxx X. Xxxxx Xxxxxx Xxxxx
Chairman of the Board
Date: 12 March , 2001 Date: 12 March, 2001
---------------------- ----------------------
Place: Montreal, Quebec Place:
----------------------
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SCHEDULE III
CHANGE OF CONTROL AGREEMENT
A G R E E M E N T
Agreement made as of the 23rd day of February 2001, by and between Alcan
Aluminium Limited, a corporation incorporated under the laws of Canada with its
registered office at 0000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxx, Xxxxxx
X0X 0X0 (the "Corporation") and Xxxxxx Xxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Corporation and the Executive have entered into an Employment
Agreement, dated the same date hereof (the "Employment Agreement") whereby the
Executive has agreed to become the President and Chief Executive Officer of the
Corporation;
WHEREAS, the Corporation believes that the establishment and maintenance of
a sound and vital management of the Corporation 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 total
combined voting power of the Corporation's then issued and outstanding
voting securities entitled to vote in the general election for
directors, 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
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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 not be deemed attained
unless and until such Person acquires any such voting securities of
the Corporation after the buyback that caused the level to be
attained;
1.2 the amalgamation, merger, arrangement, reorganization or consolidation
of the Corporation with a Person (including 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 (based on normal
issue voting) of the voting securities of the Corporation or such
surviving or parent entity outstanding immediately after such
amalgamation, merger, arrangement, reorganization or
consolidation in substantially the same proportion as immediately
prior to 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; or
(b) an amalgamation, merger, arrangement, reorganization or
consolidation effected to implement a recapitalization of the
Corporation (or similar transaction) in which 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 more
than the amounts set forth in paragraph 1.1 above;
1.3 the approval by shareholders of the Corporation of any plan or
proposal for the complete liquidation or dissolution of the
Corporation;
1.4 the issuance by the Corporation of shares (of the same or equivalent
class as the principal class of publicly listed voted equity shares of
the Corporation) 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 total number outstanding (immediately following the issuance) and
there occurs in connection therewith any substantial change in the
composition of the Corporation's Board.
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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 either
(a) to a person or persons who beneficially own, directly or
indirectly, at least fifty percent (50%) or more of the combined
voting power (based on normal issue voting) of the voting
securities of the Corporation at the time of the sale; or
(b) in a manner such that after such sale or other disposition the
ultimate parent entity of the acquirer is, directly or
indirectly, owned (based on normal issue voting) at least fifty
percent (50%) by shareholders who immediately prior to such
transaction owned at least fifty percent (50%) of the voting
power (based on normal issue voting) of the Corporation
immediately prior to such transaction in materially the same
proportion as owned by such shareholders immediately prior to
such transaction;
provided that there does not occur in connection therewith any
substantial change in the composition of the Corporation's Board.
1.6 the approval by the vote of the Corporation's holders voting shares of
any amalgamation, merger, arrangement, reorganization or consolidation
in which the Corporation will not survive as a publicly-owned
corporation or should the Corporation for any reason become a
subsidiary (as defined in the Canada Business Corporations Act) of any
other corporation;
1.7 individuals who, as of the close of business on the effective date of
this Agreement, constitute the Board (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 (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;
provided, however, 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 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;
Only the first Change of Control after the date hereof shall be deemed a Change
of Control hereunder.
Notwithstanding the foregoing, should the Person referred to in paragraph 1.1
above include Mr. Xxxxxx Xxxxx or BZ Group Holding Limited, the reference to
"twenty percent (20%)" in such paragraph shall be replaced with "thirty percent
(30%)."
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2. TERM. This agreement shall commence on the date hereof and shall expire,
unless previously terminated as provided herein, on the earliest of
(i) 31st July 2002;
(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 a Change of Control, the entity for which the Executive
is then working ceases to be a Subsidiary, as defined in Section 8
hereof, of 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 his 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.
In addition, notwithstanding the foregoing, in the event the
Executive is either terminated without Cause or terminates
employment for Good Reason (based on an event occurring within three
(3) months prior the occurrence of a Change of Control) 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
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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 incentive plans and programs
(i.e. the Corporation's Executive Deferred Share Unit Plan,
Non-Qualified Deferred Compensation Plan, Executive Share Option
Plan) 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);
(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
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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
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
(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.
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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 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 shall be limited to
those under paragraph 4.1.
4.3 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, to a severance pay, subject to the
following paragraph, as provided below :
(a) an amount equal to 36 times the Executive's monthly base salary
on the Date of Termination;
(b) an amount equal to 36 times the monthly EPA guideline amount in
force on the Date of Termination; and
(c) an amount equal to 36 times the monthly Mid-Term Incentive
Program (MTIP) guideline amount in force on the Executive's Date
of Termination.
If the Date of Termination is before the Executive's declared
retirement date, the severance pay shall be calculated using a number,
in lieu of 36, equal to the number of months remaining to such
retirement date, in each of sub-paragraphs (a), (b) and (c) above.
The Executive may, in writing, (in the Notice of Termination or
otherwise) direct the Corporation that the severance pay pursuant to
the paragraph 4.3 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
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Board) after having the Executive transferred to the non-active
payroll of the Corporation where in such case all benefit plan
coverage continue at the previous level for that same number of
months except coverage under the Corporation's short-term and
long-term disability plans, vacation program, eligibility in the
Alcan Share Option Plan and perquisite benefit (car, financial
and tax counseling, club membership) 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 I,
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.
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.
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 (which, in the case of
a termination by the Corporation, shall not be less than thirty (30) days
except in the case of a termination for Cause which shall be the date
specified in the Notice of Termination and, in the case of a termination by
the Executive for Good Reason, shall not be earlier than twelve (12) months
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.
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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 a Subsidiary 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 Aluminium Limited. For purposes of this Agreement a
"Subsidiary" shall mean any entity in which the Corporation owns, directly
or indirectly, at least fifty percent (50%) of the outstanding securities
entitled to vote for the election of directors.
9. CONFIDENTIALITY - NO NON-COMPETITION - NO RESIGNATION.
9.1 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, 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 of this Section shall not
apply to the extent that the aforesaid maters (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.
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
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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. 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.
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 Aluminium Limited
0000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
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.
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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 a lawyer or lawyers, 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.
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 specifically 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.
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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 ALUMINIUM LIMITED
By: /s/ Xx. Xxxx X. Xxxxx
_______________________
/s/ Xxxxxx Xxxxx
_______________________
Xxxxxx Xxxxx
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SCHEDULE IV
SUPPLEMENTAL DISABILITY PAYMENT
The Employer will make such further payments to the Employee, or to his estate
or legal representatives, as the case may be, as may be necessary over and above
those provided for in Section 6 (c) of the attached Employment Agreement so that
in the event of the Employee's Death or Disability he, or his estate or legal
representatives, shall receive the equivalent of the Accrued Obligations as of
the Date of Termination, and in the event of the Employee's Disability, he shall
receive the equivalent of:
(i) continuation of Base Salary as in effect immediately prior to the
Date of Termination until the first anniversary of the Date of
Termination, plus an amount equal to the Target Bonus for the
year in which the Date of Termination occurs (assuming that the
Target Bonus equals one hundred percent (100%) of the Employee's
Base Salary as of the Date of Termination and all performance
objectives have been met); and
(ii) continuation of 50% of Base Salary for the period from the first
anniversary of the Date of Termination through the Scheduled
Termination Date, plus payment of 50% of the Target Bonus for
each year following the year in which the Date of Termination
occurred (assuming that the Target Bonus equals one hundred
percent (100%) of the Employee's Base Salary as of the Date of
Termination and all performance objectives have been met),
provided that if the Scheduled Termination Date falls on or
before the first anniversary of the Date of Termination, then the
Employee shall not be entitled to any payments under this
paragraph (ii).
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SCHEDULE V
CONFIDENTIALITY AGREEMENT
To Alcan Aluminium Limited
In consideration of your agreeing to employ him as your President and Chief
Executive Officer, the undersigned Employee acknowledges and agrees that his
employment by the Employer under this Agreement necessarily involves his
understanding of and access to certain trade secrets and confidential
information pertaining to the business of the Employer. Accordingly, the
Employee agrees that during the Employment Period and for a period of two (2)
years following the Date of Termination, he will not, directly or indirectly,
without the prior written consent of the Employer, disclose or use for the
benefit of any person, corporation or other entity, or for himself any and all
files, trade secrets or other confidential information concerning the internal
affairs of the Employer or its subsidiaries or affiliates, including, but not
limited to, information pertaining to its clients, services, products, earnings,
finances, operations, methods or other activities; provided, however, that the
foregoing shall not apply to information which is of public record or is
generally known, disclosed or available to the general public or the industry
generally. Notwithstanding the foregoing, the Employee may disclose such
information as required by law during any legal proceeding or to the Employee's
personal representatives and professional advisers and, with respect to such
personal representatives and professional advisers, the Employee agrees to
inform them of his obligations hereunder and take all reasonable steps to ensure
that such professional advisers do not disclose the existence or substance
hereof. Further, the Employee agrees that he shall not, directly or indirectly,
remove or retain, without the express prior written consent of the Employer, and
upon termination of employment for any reason shall return to the Employer, any
records, computer disks, computer printouts, business plans or any copies or
reproductions thereof, or any information or instruments derived therefrom,
arising out of or relating to the business of the Employer or obtained as a
result of his employment by the Employer.
Signed by the Employee as of February 23, 2001.
/s/ Xxxxxx Xxxxx
-------------------------------------
Xxxxxx Xxxxx
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SCHEDULE VI
NON-COMPETITION UNDERTAKING
To Alcan Aluminium Limited
In consideration of your agreeing to employ me as your President and Chief
Executive Officer, I acknowledge and undertake that until the expiry of two (2)
years following the termination of my employment with the Company, I will not be
entitled to act as an employee, director of or officer of, advisor to or
material investor in any corporation, partnership, person or other entity which
carries on any business which is materially competitive with the Company's
principal lines of business. Entities which carry on businesses which are so
materially competitive include without limitation, those which carry on any
business which relates to the mining or refining of bauxite, the production and
sale of alumina or primary aluminum, the production and sale of aluminum
products (such as can sheet, foil, litho sheet and other flat rolled products,
wire and cable, castings and extrusions), the trading of aluminum, the
production and sale of packaging products for tobacco, pharmaceutical,
cosmetics, health care, food or beverage products or any line of business
carried on by the Company and accounting for at least five percent (5.0%) of its
consolidated assets or gross revenues at the time of the termination of my
employment. Nevertheless, no such business shall be considered to be materially
competitive unless it is carried on in any of the jurisdictions in which the
Company carries on business at the time of the termination of my employment.
I acknowledge that in view of the position of extreme trust and confidence
attached to my position as Employee of the Company, this undertaking is
reasonable in all respects and essential to the protection of the Company and
its shareholders. I shall continue to be bound by its terms of this undertaking
notwithstanding the termination of my employment for any reason.
For the purposes of the foregoing: the "Company" means Alcan Aluminium Limited
as well as its subsidiaries, affiliates and joint ventures, and "Material
Investor" means the holder of more than five per cent (5.0% ) of the outstanding
voting or equity shares, units or similar interests.
Signed by the Employee as of February 23, 2001.
/s/ Xxxxxx Xxxxx
---------------------------------------
Xxxxxx Xxxxx
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SCHEDULE VII
INDEMNITY AGREEMENT
BETWEEN ALCAN ALUMINIUM LIMITED, a corporation incorporated under the
laws of Canada and having its head office in the City and
District of Montreal, in the Province of Quebec (hereinafter
referred to as "Alcan")
AND
XXXXXX XXXXX
(hereinafter referred to as "the Employee")
IN CONSIDERATION of the Employee consenting to act as a director, and continuing
to act as a director, of Alcan, Alcan agrees that it shall indemnify the
Employee in accordance with the conditions provided in this Agreement.
1. The terms "liability" and "expense" shall include, but shall not be limited
to, costs, charges, counsel fees and disbursements, and amounts paid to
settle claims, actions, suits or proceedings or to satisfy judgments, fines
or penalties incurred by or on behalf of the Employee in respect of a
claim, action, suit or proceeding as defined below.
2. The terms "claim, action, suit or proceeding" shall include any claim,
action, suit or proceeding (whether civil, criminal, administrative or
investigative) or any threat thereof, involving the Employee or to which
the Employee is made party by reason of being, or having been, an employee
or a director of Alcan or any one of its subsidiaries or affiliates (this
shall be interpreted as including any organization, partnership, joint
venture, trust, enterprise or entity under Alcan's direct or indirect
control).
3. Except in respect of a claim, action, suit or proceeding by or on behalf of
Alcan, Alcan shall, to the fullest extent permitted by law, indemnify the
Employee against any and all liability and expense that may reasonably be
incurred by the Employee in respect of any claim, action, suit or
proceeding.
4. In respect of a claim, action, suit or proceeding by or on behalf of Alcan,
Alcan shall, to the fullest extent permitted by law, indemnify the Employee
against any and all liability and expense that may reasonably be incurred
by the Employee in connection therewith.
5. If, prior to the final disposition of any claim, action, suit or
proceeding, the Employee wishes to be reimbursed for expenses incurred,
then, upon the application of the Employee
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to Alcan and upon receipt of an undertaking by the Employee to repay such
amount should it be determined upon such final disposition that the
Employee was not entitled to indemnification, Alcan shall advance monies to
the Employee to cover reasonable expenses actually incurred by the
Employee.
6. If any income tax is deemed by any taxation authority to be payable by the
Employee by reason of:
(a) the value to the Employee of the undertaking by Alcan herein
contained, and/or
(b) any indemnity payment actually made to the Employee hereunder,
then, Alcan shall, upon notice to such effect, pay to the Employee
such amount or amounts as shall be necessary to save the Employee
harmless from the burden of such income tax and any other income tax
paid consequent to the operation of this Article 7. In the event that
the Employee is assessed for income tax as aforesaid and Alcan makes
any payment to the Employee pursuant to this Article, the Employee
agrees to take any steps necessary to enable Alcan to contest, at its
expense, the assessment of income tax.
7. The rights of indemnification provided in this Agreement shall be in
addition to any rights to which the Employee may otherwise be entitled by
statute, by-law, agreement, vote of shareholders of Alcan or otherwise.
8. In the event that this Agreement would otherwise be held inoperative as
providing for indemnity to an extent greater than that permitted under the
provisions of the Canada Business Corporations Act, then those of its terms
which would be so affected shall be construed so as to provide indemnity to
the maximum extent permitted by the said Act.
9. This Agreement may not be amended or modified in any manner except by a
written agreement executed by the Employee and Alcan.
10. This Agreement shall be binding on Alcan, its successors and assigns and
shall ensure to the benefit of the Employee and the legal representatives,
heirs, successors and assigns of the Employee and shall continue
notwithstanding that the Employee has ceased to be an employee or a
director of Alcan.
12. 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.
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IN WITNESS WHEREOF the parties hereto have duly executed this Agreement at the
places and as of February 23, 2001.
ALCAN ALUMINIUM LIMITED
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx Xxxxx
------------------------- -------------------------
Xxxx X. Xxxxx, Chairman Xxxxxx Xxxxx
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