Exhibit 10.2    Alcan Stock Price Appreciation Unit Plan, dated September 27,
2001, as amended.

 

Amended as of April 26, 2007

THE PLAN

1.         PURPOSE 

The purposes of the Plan are to provide a means for encouraging key employees to
obtain an increased proprietary interest in the enterprise and an additional
incentive to further its growth and development and to assist the Company in
retaining and attracting executives with experience and ability. 

The Plan provides for the granting to key employees of the Company and its
Subsidiaries of Stock Price Appreciation Unit ("SPAU") on terms and subject to
the conditions set forth in this Plan. The Committee which administers the Plan
may determine in its sole discretion which employees of the Company and its
Subsidiaries are eligible to be granted SPAUs. 

 

2.         Definitions 

"Alcan Group" means the Company together with its consolidated subsidiaries and
other companies in which the Company owns, directly or indirectly, less than 50%
of the voting stock but has significant influence over management; 

"Blackout Period" means any period during which a policy of the Company prevents
an Executive from exercising a SPAU; 

"Board of Directors" means the Board of Directors of the Company;  

"Business Day" means a day of the week other than a Saturday, Sunday or a legal
holiday recognized as such either in Canada or in the country of residence of
the Executive;

"Change of Control Event" means any of the following: 

1.   the acquisition of direct or indirect beneficial ownership of 50% or more
of the Shares of the Company by any person or group of associated persons acting
together or jointly and in concert;

2.   any amalgamation, merger, arrangement, reorganization or consolidation (or
substantially similar transactions or series of transactions) in respect of the
Company, other than where (a) the Shares of the Company after the transaction
would continue to represent two-thirds or more of the combined voting securities
of the resulting entity, without a concurrent substantial change in the
composition of the Company's Board of Directors, or (b) it is effected for the
purpose of implementing a recapitalization of the Company, without there also
occurring an acquisition of direct or indirect beneficial ownership of 20% or
more of the Shares of the Company by any person or group of associated persons
acting together or jointly and in concert;

3.   the approval by the Company's shareholders of a plan for the complete or
effective dissolution of the Company;

4.   the issuance by the Company of Shares in connection with an exchange offer
acquisition if such issuance results in the shareholders holding less than
two-thirds of the combined voting securities of the resulting entity and there
is a concurrent substantial change in the composition of the Company's Board of
Directors;

 

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5.   the sale of all or substantially all of the assets of the Company, other
than (a) to an owner or owners of at least two-thirds of the Company's Shares,
or (b) in a manner so that the acquirer is thereafter controlled as to at least
two-thirds of its voting securities by the owner or owners of at least
two-thirds of the Company's Shares, provided in each case that there is no
concurrent substantial change in the composition of the Company's Board of
Directors;

6.   the completion of the corporate approvals necessary on the part of the
Company to give effect to any amalgamation, merger, arrangement, reorganization,
continuance or consolidation (or substantially similar transactions or series of
transactions) in respect of the Company pursuant to which the Company will not
survive as a stand-alone publicly-traded corporation – without limitation the
Company shall be deemed not to have survived as a stand-alone publicly-traded
corporation if (a) there is no longer a liquid market for the Shares on the
Toronto or New York stock exchanges, (b) more that 50% of the Shares become held
by any person or group of associated persons acting together or jointly and in
concert, or (c) the Company becomes a subsidiary of another corporation; or

7.   any occurrence pursuant to which individuals who were the incumbent
Directors on 1 November 2005 cease for any reason to constitute at least
two-thirds of the Company's Board, provided that any individual who became a
Director subsequently whose election or appointment was approved by at least
two-thirds of the incumbent Directors shall also be considered to be an
incumbent Director, but further provided that no individual elected or appointed
initially as a result of an actual or threatened proxy contest or solicitation
of proxies or in connection with amalgamation, merger, arrangement,
reorganization, consolidation or share exchange acquisition transaction (or
substantially similar transactions or series of transactions) shall be deemed to
be an incumbent Director. 

For the purposes hereof a substantial change in the composition of the Company's
Board of Directors shall be any change involving the departure of at least three
Directors or any other change pursuant to which the Directors in office prior
thereto cease to constitute at least two-thirds of the members of the Board.  In
addition, any "change of control event" which occurs for the purposes of a
change of control agreement in force between the Company and an employee of the
Company or one of its subsidiaries as of the date hereof shall be deemed to be a
Change of Control Event hereunder in relation to that employee. 

The Chairman of the Committee may, in order to protect the interests of the
Executives if in his reasonable judgement a Change of Control Event has become
imminent but has not yet occurred, declare that a Change of Control Event has
occurred in relation to the Plan to enable the Executives to exercise their
SPAUs. 

"Committee" means those members of the Personnel Committee of the Board of
Directors who are not employees of the Company or of any Subsidiary; 

"Common Share" or "Share" means a Common Share of the Company;  

"Company" means Alcan Inc;  

"Director" means a Director of the Company;  

"Effective Date" means the date on which a SPAU is granted or any subsequent
date so designated by the Committee at the time the SPAU is granted; 

"Executive" means a person who has been or is to be granted a SPAU;

 

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"Market Value" means the average of the high and low prices of Shares on The
Toronto Stock Exchange on the relevant day, or if two or more sales of Shares
shall not have been reported for that day, on the next preceding day for which
there have been two or more reported sales; 

"Plan" means the Alcan Inc Stock Price Appreciation Unit Plan adopted by the
Company on 27 of  September 2001, as amended from time to time; 

"Retirement" means (unless otherwise determined by the Committee):  

(i)    retirement in accordance with the provisions of those employee benefit
plans of the Company or any Subsidiary covering the Executive, or 

(ii)   if the Executive is not covered by any such plan, as determined by the
Committee, or 

(iii)  the placing of a terminated Executive on the Company's non-active payroll
in order to permit such Executive to attain early retirement age. 

"SPAU" means a right to receive from the Company cash in an amount equal to the
excess of the Market Value of a Share on the date of exercise of a SPAU over the
Market Value of a Share as of the date of the grant of such SPAU; 

"SPAU Period" has the meaning set out in paragraph 7 below;  

"Subsidiary" means any company in which the Company owns, directly or
indirectly, more than 50% of the voting stock;

"Waiting Period" means a period of at least three months commencing on the
Effective Date and such additional period, if any, as may be established by the
Committee at the time of the grant of the SPAU, such additional period to be
subject to such terms and conditions, including conditions for the earlier
termination of such additional period, as the Committee may determine. 

 

3.         Administration 

The Plan shall be administered by the Committee. The Committee shall have full
and complete authority to interpret the Plan and to prescribe such rules and
regulations and make such other determinations as it deems necessary or
desirable for the administration of the Plan. 

The Committee shall determine the grant of SPAU as set out in paragraph 5
below. 

 

4.         Eligibility 

In order to be eligible for the grant of SPAUs by the Committee as provided
herein, a person must be an employee of the Company or one of its Subsidiaries. 

No member of the Committee shall be eligible to participate in the Plan nor
shall have been eligible so to participate within the one-year period
immediately prior to membership on the Committee. 

 

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5.         Grant of SPAUs 

The Committee shall from time to time designate the Executives as well as the
number of SPAUs to be covered by each grant and shall fix the Effective Date of
the SPAU. Any Executive may hold more than one SPAU. 

 

6.         Exercise of a SPAU 

A SPAU may be exercised in the manner prescribed by the Committee in whole at
any time or in part from time to time during the SPAU Period or in such amounts
and at such times during the SPAU Period as the Committee may determine.  

 

7.         SPAU Period 

Each SPAU shall be exercisable by the Executive during a period ("SPAU Period")
established by the Committee at the time the SPAU is granted which shall
commence after the Waiting Period and shall terminate not later than ten years
after the Effective Date, except that: 

7.1       in the case of certain Executives who are, or may be deemed to be,
insiders of the Company in accordance with any applicable law, the Waiting
Period shall not be shorter than the period prescribed by such law; 

7.2       subject to the SPAU Period stated above, the SPAU Period shall
terminate not later than five years after the earlier of: 

(a)        the death of the Executive, and  

(b)        the Retirement of the Executive; and  

7.3       the SPAU Period shall (unless otherwise determined by the Committee)
terminate immediately upon the resignation of the Executive or other termination
(except if paragraph 7.2 applies) of employment of the Executive by the
Company. 

In the case of death, the Executive's estate shall have the right to exercise
the SPAUs at any time with respect to all or from time to time with respect to
any portion of the SPAUs which the Executive had not previously exercised. 

All rights under a SPAU unexercised in whole or in part at the termination of
the SPAU Period shall be forfeited. 

 

8.         Blackout Periods 

If the date on which a SPAU expires occurs during a Blackout Period or within
ten Business Days after the last day of a Blackout Period, the SPAU Period for
such SPAU shall be extended to the end of the tenth Business Day following the
last day of the Blackout Period.

 

 

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9.         Non-assignable 

No SPAU or any interest therein shall be assignable by the Executive otherwise
than by will or the laws of descent and distribution. During the life of the
Executive, a SPAU shall be exercisable only by the Executive or the Executive's
legal representative. 

 

10.       Effects of Certain Transactions 

In the event of any change in the outstanding Shares by reason of any stock
dividend, stock split, recapitalization, merger, consolidation, combination or
exchange of Shares or other similar corporate change, an equitable adjustment
shall be made in the formula for determining cash payable upon the exercise of
SPAUs. Such adjustment shall be made by the Committee and shall be conclusive
and binding for all purposes of the Plan.

 

11.       Amendment and Termination 

The Board of Directors may at any time and from time to time amend, suspend or
terminate the Plan in whole or in part. No such amendment, suspension or
termination may, without the consent of the Executive to whom SPAUs shall
theretofore have been granted, adversely affect the rights of such Executive. 

 

12.       Change of Control 

Upon the occurrence of a Change of Control Event, all SPAUs shall become
immediately exercisable and all Waiting Periods shall be waived, provided that
Executives who are, or may be deemed to be, insiders of the Company in
accordance with any applicable law shall be subject to such law. 

 

13.       Insiders 

Notwithstanding anything contained herein, if an Executive is, or becomes an
insider of the Company for the purposes of any applicable law, the exercise of a
SPAU is deemed, for the purposes of this Agreement and all aspects of the
Executive's relationship with the Company, to be a disposal of a Share as if
subject to trading restrictions under such law and corresponding Company's
policies.