**Exhibit 10.1**

 

ALCAN

Alcan Inc.

| 1188 Sherbrooke Street West | Tel:   (514) 848-8000Montreal, Quebec H3A 3G2Fax:  (514) 848-8115Canadawww.alcan.com
 

May11, 2004

**PERSONAL ANDCONFIDENTIAL**

Mr.Brian W. SturgellExecutiveVice-PresidentOfficeof the PresidentAlcanInc.1188  Sherbrooke Street WestMontreal, Quebec  H3A 3G2

**RE: Project Archer**

DearBrian:

Project Archer (the "Project") relates to avalue-maximizing transaction involving substantially all of the rolled productsbusinesses owned by Alcan prior to its acquisition of Pechiney. Our plan is toannounce an intention to implement the Project as a distribution (commonlyreferred to as a "spin-out") to Alcan shareholders of shares of RP Newco (a newentity to which, as part of the Project, we intend to transfer the said rolledproducts businesses).  The ultimate structure and conditions of the Projectwill, of course, be under the full control of our Board of Directors.  Theactual implementation of the Project will require regulatory approvals and, ascurrently planned, shareholder approval.

We have advised you of our desire to have theannouncement indicate that you have been selected to become the Chief ExecutiveOfficer of RP Newco.  On your part you have expressed your strong support forthe Project and your intention to accept the position of Chief ExecutiveOfficer of RP Newco, subject to the finalization of the terms and conditions ofthe employment agreement.

Notwithstanding our respective intentions andsupport for the Project, its completion is not a certainty.  This lack ofcertainty combined with the nature of the Project and your designated rolecreate potential challenges in relation to (i) the effective and successfulseparation of the RP Newco from the other Alcan businesses; (ii) the carefuland responsible management of all of Alcan's businesses pending completion ofthe Project, (iii) your future with Alcan in the event that the Project is notcompleted or, after the completion of the Project, you are not retained as theChief Executive Officer of RP Newco; and (iv) the safeguarding of the interestsof Alcan shareholders in relation to the Project and the process leading to itscompletion.  

 

ALCAN

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Further to the above, the following reciprocalundertakings are required to protect both Alcan and you. 

1.   In the event that atransaction which will form the basis of the Project:

(i)                 isnot completed within a period of ten months following its announcement, or (ii)               iscompleted but upon completion you do not occupy the position of Chief ExecutiveOfficer of RP Newco or its substantial equivalent, 

Alcan undertakes thatyou shall have the same rights as regards the termination of your employment asthose which would apply if there were to be a change of control affecting Alcanas defined in Section 1 of the Change of Control Agreement entered with you onAugust 1, 2002, with the date of change of control for such purpose beingdeemed to be the earlier of:
 
a)			b)			c)
thecompletion of the transaction which will form the basis of the Project, 			theexpiry of the said ten month period, or			thedate upon which you receive written notification from Alcan that you will notoccupy the position of Chief Executive Officer of RP Newco or its substantialequivalent,

Alcan also agrees thatfor the limited purposes of this letter the termination indemnity payablepursuant to the Change of Control Agreement shall be based upon 36 months asopposed to 24 months.

2.   As part of your obligationsas a senior executive of Alcan, you undertake (i) to act in good faith andcooperate reasonably with a view to the completion of the Project in the bestinterests of Alcan as a whole as determined by the Board of Directors, (ii) toconduct yourself as an employee of Alcan and use your influence as one of itssenior executives so that the interests of Alcan as a whole are fairlyprotected and well-managed in a manner consistent with past practice until suchtime as the transaction which will form the basis of the Project actually takesplace, and (iii) to conduct yourself so as to facilitate the due exercise bythe Board of Directors of the fiduciary and other duties to which it is boundin the context of the Project.

Please note that shouldyou enter into any employment agreement with Alcan or RP Newco which is inforce immediately following the completion of the transaction which will formthe basis of the Project, your rights under this agreement, the Change ofControl Agreement referred to above and your existing employment contract withAlcan shall lapse except as may be otherwise specified in writing.

 

ALCAN

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You are requested tosign a copy of this letter in evidence of your agreement as set forth herein.

We trust that in the coming months we will beable to work together effectively with a view to the successful completion ofthe Project.

Yours very truly,

 

 

 

ALCAN INC.  

Per: __________________

            Travis Engen            President and Chief ExecutiveOfficer

In duplicateSeen and agreedMontreal, 11 May, 2004

_____________________

Brian W. Sturgell

 

 

 

 

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