Exhibit 10.4
SEVERANCE COMPENSATION AGREEMENT
          This Agreement is effective as of the date it is signed by both
Novelis Inc., a Canadian corporation (the “Company”), and                     
(“Executive”).
          WHEREAS, the Company’s Board of Directors has determined that it is in
the best interest of the Company’s shareholders to reinforce and encourage the
continued attention and dedication of members of the Company’s management,
including Executive, to their assigned duties without distraction in potentially
disturbing circumstances arising from the termination of Executive’s employment
other than for Cause; and
          WHEREAS, this Agreement sets forth the payments and other benefits to
which Executive will be entitled upon certain conditions if the Company
terminates Executive’s employment other than for Cause.
          NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth below, it is hereby agreed as follows:

1.   Severance and Other Termination Benefits

Executive shall be entitled to severance and other benefits if the Company
terminates Executive’s employment other than for Cause defined as follows:
“Cause” means only (i) Executive’s conviction of any crime (whether or not
involving the Company) constituting a felony in the applicable jurisdiction;
(ii) willful and material violation of the Company’s policies, including, but
not limited to, those relating to sexual harassment and confidential
information; (iii) willful misconduct in the performance of Executive’s duties
for the Company; or (iv) willful failure or refusal to perform Executive’s
material duties and responsibilities which is not remedied within ten (10) days
after written demand from the board of directors to remedy such failure or
refusal.
Executive’s right to receive severance and benefits shall be subject to the
terms and conditions of the Company’s release from and waiver by Executive of
claims, non-compete agreement and non-solicitation agreement for executive
employees. No payments or benefits shall be paid unless Executive executes such
release and waiver of claims, non-compete agreement and non-solicitation
agreement. The release shall not release Executive’s right to receive
indemnification and defense from the Company for any claims arising out of the
performance of Executive’s duties on behalf of the Company. Termination of
employment due to Cause, Death, Disability or Retirement at any time shall not
give rise to any rights to compensation.
(a) Severance Pay. The Company shall pay a lump sum cash amount equal to: [A x
(B)] – C, where
“A” equals a multiplier of 1.5
“B” equals Executive’s annual base salary (including all amounts of such base
salary that are voluntarily deferred under any qualified and non-qualified plans
of the Company) determined at the rate in effect as of the date of such
termination of employment;

 

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“C” equals the amount of severance payments, if any, paid or payable to
Executive by the Company other than pursuant to this Agreement; it being
expressly understood that the purpose of this deduction is to avoid any
duplication of payments to Executive.
(b) Other Benefits.
(i) If Executive is not eligible for retiree medical benefits and is covered
under the Company’s group health plan at the time of Executive’s termination of
employment, the Company shall pay an additional lump sum cash amount for the
purpose of assisting Executive with the cost of post-employment medical
continuation coverage equal to: (C x M) / (1 – T), where
“C” equals the full monthly COBRA premium (or equivalent) charged for coverage
under the Company’s group medical plan at Executive’s then current level of
coverage;
“M” equals twelve (12) months; and
“T” equals an assumed tax rate of 40%.
(ii) To the extent available, Executive shall be entitled to continue coverage
under the Company’s group life plan for a period of twelve (12) months at
Executive’s pre-termination level of coverage.
(iii) Executive shall be entitled to twelve (12) months of additional credit for
benefit accrual and contribution allocation purposes including credit for age,
service and earnings prorated over twelve (12) months under the Company’s
tax-qualified and non-qualified pension, savings or other retirement plans;
provided that if applicable provisions of tax code prevent payment in respect of
such credit under the Company’s tax-qualified plans, such payments shall be made
under the Company’s non-qualified plans.
(iv) To the extent Executive is not already fully vested under the Company’s
tax-qualified and non–qualified retirement pension, savings and other retirement
plans, Executive shall become 100% vested under such plans; provided that if
applicable provisions of the Code prevent accelerated vesting under the
Company’s tax-qualified plans, an equivalent benefit shall be payable under the
Company’s non-qualified plans.
Notwithstanding the foregoing provisions of this paragraph 1 or any other
provision in this Agreement, if Executive is a “specified employee” within the
meaning of Code Section 409A, then all payments under this Agreement shall be
delayed for a period of six (6) months to the extent required by Section 409A.
Should Executive decide to voluntarily separate from the company Executive will
have to give the company a three (3) month notice and will not be entitled to
any of the payments in this paragraph 1.

2.   Code Section 409A

To the extent applicable, this Agreement shall be interpreted in accordance with
Section 409A of the Code and the applicable U.S. Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any
regulations or other guidance that may be

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issued after the effective date of this Agreement. Notwithstanding any provision
of the Agreement to the contrary, the Company may adopt such amendments to the
Agreement or adopt other policies and procedures, or take any other actions,
that the Company determines is necessary or appropriate to exempt the Agreement
from Section 409A and/or preserve the intended tax treatment of the benefits
provided hereunder, or to comply with the requirements of Section 409A and
related U.S. Treasury guidance, as long as such changes do not reduce the
overall compensation.

3.   Confidential Information.

Executive agrees not to disclose during the term hereof or thereafter any of the
Company’s confidential or trade secret information, except as required by law.
Executive recognizes that Executive shall be employed in a sensitive position in
which, as a result of a relationship of trust and confidence, Executive will
have access to trade secrets and other highly confidential and sensitive
information.
Executive further recognizes that the knowledge and information acquired by
Executive concerning the Company’s materials regarding employer/employee
contracts, customers, pricing schedules, advertising, manuals, systems,
procedures and forms represent the most vital part of the Company’s business and
constitute by their very nature, trade secrets and confidential knowledge and
information. Executive hereby stipulates and agrees that all such information
and materials shall be considered trade secrets and confidential information. If
it is at any time determined that any of the information or materials identified
in this Section are, in whole or in part, not entitled to protection as trade
secrets, they shall nevertheless be considered and treated as confidential
information in the same manner as trade secrets, to the maximum extent permitted
by law. Executive further agrees that all such trade secrets or other
confidential information, and any copy, extract or summary thereof, whether
originated or prepared by or for Executive or otherwise coming into Executive’s
knowledge, possession, custody, or control, shall be and remain the exclusive
property of the Company.

4.   Non-Competition

4.1   Competing Entities: In this Agreement, “Competing Entities” includes any
entity whose major business operations consist of manufacturing or recycling of
aluminum, alumina, or downstream rolled aluminum products.   4.2   Competitive
Activities: Executive covenants and agrees that, while employed with the Company
and for eighteen months thereafter, Executive shall not, directly or indirectly,
in any manner whatsoever including, without limitation, either individually, or
in partnership, jointly or in conjunction with any other person, or as employee,
principal, agent, consultant, director, shareholder, lender or otherwise:

  (a)   be engaged actively in or by any Competing Entities in order to provide
products or services similar to the products and services provided by the
Company;     (b)   have any financial or other interest including, without
limitation, an interest by way of royalty or other compensation arrangements, in
or in respect of any Competing Entities, excluding the ownership of not more
than 5% of the issued shares of any such Competing Entities, the shares of which
are listed on a recognized stock exchange or traded in the over-the-counter
market; or

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  (c)   advise, lend money to or guarantee the debts or obligations of any
Competing Entities.

5.   Non-Solicitation

5.1   Customers and Suppliers: Executive covenants and agrees that, while
employed with the Company and for 18 months thereafter, Executive will not, in
any manner, directly or indirectly, by any means, in any capacity, in order to
direct away from the Company, approach, solicit, or contact any customers or
suppliers of the Company who have actively done business with the Company in the
preceding 18 months, or any prospective customer or supplier that the Company
approached, solicited or contacted in the preceding 18 months, or attempt to do
any of the foregoing, in order to offer or obtain services or products that
compete with the business of the Company (or any material part thereof) as
conducted at the time of the cessation of the Executive’s employment or during
the twelve-month period prior to such date or contemplated to be carried on in
its most recent annual business plan.   5.2   Employees: Executive covenants and
agrees that, while employed with the Company and for 18 months thereafter,
Executive will not induce or solicit, or attempt to induce or solicit, or assist
any person to induce or solicit, any management or higher employee, contractor
or advisor of the Company, or assist or encourage any management or higher
employee, contractor or advisor of the Company, to accept employment, or
engagement elsewhere that competes with the business of the Company (or any
material part thereof) as conducted at the time of the cessation of Executive’s
employment or any other business conducted by the Company during the
twelve-month period prior to such date or contemplated to be carried on in its
most recent annual business plan.

6.   Withholding.

Taxes resulting from any benefits received under this Agreement are for the
account of the Executive. The Company may withhold from any benefits payable
under this Agreement all applicable taxes and other amounts as shall be required
pursuant to any law or governmental regulation or ruling.

7.   Non-Bindinq Arbitration; Claim Venue.

Any claim or controversy arising out of or relating to this Agreement or any
breach thereof shall be subject to non-binding arbitration before either party
may seek any other legal recourse. Any such arbitration shall take place in
Atlanta, Georgia, in accordance with the rules of the American Arbitration
Association. Each party further submits to the exclusive jurisdiction of the
Georgia state courts and the United States District Court for the Middle
District of Georgia (Atlanta, Georgia) and irrevocably waives, to the fullest
extent permitted by law, any objections that either party may now or hereafter
have to the aforesaid venue, including without limitation any claim that any
such proceeding brought in either such court has been brought in an inconvenient
forum, provided however, this provision shall not limit the ability of either
party to enforce the other provisions of this Section.

8.   Not an Employment Contract.

All the information in this Agreement, including eligibility for participation
in compensation and benefit plans, is subject to the terms of the applicable
plan documents and policies, which are

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subject to change during the normal course of Company business. Except as
otherwise provided in a separate written agreement signed by an individual duly
authorized to enter into such agreement on behalf of the Company, Executive’s
employment at Company is “at-will” and either Executive or Company may decide to
terminate the employment relationship at any time and for any reason, except as
provided by law or such separate agreement. The terms of this Agreement,
therefore, do not and are not intended to create either an express or implied
contract of employment with Company for any particular duration.

9.   Successors and Assigns.

The Company will require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to absolutely and unconditionally assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession or
assignment had taken place.

10.   No Obligation to Mitigate Damages; No Effect on Other Contractual Rights.

10.1 Executive shall not be required to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for under this Agreement
be reduced by any compensation earned by Executive as the result of employment
by another employer after Executive’s termination of employment, or otherwise.
10.2 The provisions of this Agreement, and any payment provided for hereunder,
shall not reduce any amounts otherwise payable, or in any way diminish
Executive’s existing rights, or rights which would accrue solely as a result of
the passage of time, under any employee benefit plan or arrangement providing
retirement benefits or health, life, disability or similar welfare benefits.

11.   Sole Agreement.

This Agreement represents the entire agreement between the parties with respect
to the matters contemplated herein. 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 set forth expressly in this Agreement.

12.   Validity.

The invalidity or unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

13.   Headings.

The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall in no way restrict or modify any of the
terms or provisions hereof.

14.   Governing Law.

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This Agreement shall be governed by, and shall be construed in accordance with,
the internal laws (and not the laws of conflicts) of the State of Georgia.
THIS CONTRACT CONTAINS AN ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.

          NOVELIS INC.
 
       
By:
       
 
 
 
   
 
       
Date:
       
 
 
 
   
 
       
EXECUTIVE
       
 
       
By:
       
 
 
 
   

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