<PAGE>   1
                                                                      Exhibit 99
                                 (Alcan LOGO)
 
                                 Notice of Annual Meeting
                                 22 April 1999
 
                                 Management Proxy Circular
 
(1999 LOGO)
Please complete, sign and date
your proxy and return it promptly in
the enclosed postage-paid envelope.
<PAGE>   2
 
                                    CONTENTS
 
<TABLE>
<S>                                                          <C>
                                                                Page
NOTICE OF ANNUAL MEETING  ..................................    1
MANAGEMENT PROXY CIRCULAR  .................................    2
  Proxy Solicitation  ......................................    2
  Voting Shares and Record Date  ...........................    3
  Voting by Shareholders  ..................................    3
  Voting by Proxyholders  ..................................    3
     Appointment of Proxyholders and Revocation of
      Proxies  .............................................    3
     Confidential Proxy Voting Procedures  .................    4
  Business at Annual Meeting  ..............................    4
  Financial Statements and Auditors' Report  ...............    4
  Election of Directors  ...................................    5
  Holdings of Shares and Deferred Share Units by
     Directors  ............................................    9
  Holdings of Shares by Others  ............................    9
  Corporate Governance Practices  ..........................    9
  Board Meetings and Board Committees  .....................   10
     Corporate Governance Committee  .......................   11
     Audit Committee  ......................................   11
     Environment Committee  ................................   11
     Personnel Committee  ..................................   11
     Options Committee  ....................................   11
  Executive Compensation  ..................................   12
     Report on Executive Compensation  .....................   12
     Performance Graph  ....................................   16
     Summary Compensation Table  ...........................   17
     Executive Performance Award  ..........................   18
     Other Compensation  ...................................   18
     Alcan Executive Share Option Plan  ....................   19
     Retirement Benefits  ..................................   21
     Retiring Allowances  ..................................   22
     Board Fees  ...........................................   22
  Compensation of Non-Executive Directors  .................   23
     Fees and Expenses  ....................................   23
     Share Investment Plan for Directors  ..................   23
     Retirement Arrangements  ..............................   23
  Indebtedness of Directors and Executive Officers  ........   23
  Directors' and Officers' Liability Insurance  ............   25
  Appointment of Auditors  .................................   25
  Special Business: Amendment and Restatement of the
     Shareholder Rights Plan  ..............................   26
  Approval of Board of Directors  ..........................   29
  SCHEDULE A  ..............................................   30
  SCHEDULE B  ..............................................   31
</TABLE>
 
La version francaise du present document ainsi que la formule de procuration qui
l'accompagne seront envoyees aux actionnaires sur demande. Veuillez communiquer
avec Alcan Aluminium Limitee -- Services aux actionnaires, en appelant au
1-888-252-5226 (sans frais).
<PAGE>   3
(LOGO)
 
NOTICE OF ANNUAL MEETING
 
The 97th Annual Meeting of the holders of the Common Shares of Alcan Aluminium
Limited will be held on Thursday, 22 April 1999 at 10:00 a.m. in the Assembly
Hall, International Civil Aviation Organization, 999 University Street, Atrium
entrance, Montreal, Quebec, Canada, for the following purposes:
 
1. receiving the financial statements and the Auditors' Report for the year
   ended 31 December 1998,
 
2. electing Directors,
 
3. appointing Auditors and authorizing the Directors to fix their remuneration,
   and
 
4. as special business, approving amendments to, and a restatement of, the
   Shareholder Rights Plan as described in the attached Management Proxy
   Circular.
 
Shareholders who cannot attend the Annual Meeting may submit their proxies in
accordance with the procedures set out in the attached Management Proxy
Circular.
 
                                             By order of the Board of Directors,
 
                                                                     (Signature)
 
                                                                        P.K. Pal
Montreal, Canada                                                 Vice President,
3 March 1999                                   Chief Legal Officer and Secretary
 
                                        1
<PAGE>   4
 
(LOGO)
 
                                                                    3 March 1999
 
MANAGEMENT PROXY CIRCULAR
 
THIS MANAGEMENT PROXY CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION
OF PROXIES BY THE BOARD OF DIRECTORS AND MANAGEMENT OF ALCAN ALUMINIUM LIMITED
FOR USE AT THE ANNUAL MEETING TO BE HELD IN MONTREAL ON 22 APRIL 1999 (AND ANY
ADJOURNMENT THEREOF) FOR THE PURPOSES SET OUT IN THE ATTACHED NOTICE OF ANNUAL
MEETING.
 
Unless stated otherwise, the following expressions used in this Management Proxy
Circular have the meanings indicated:
 
"Alcan" or "Company" means Alcan Aluminium Limited,
"Board" or "Board of Directors" means the Board of Directors of Alcan,
"Chief Executive Officer" means the Chief Executive Officer of Alcan,
"Director" means a Director of Alcan,
"Executive Officers" means the President and Chief Executive Officer, the
     Executive Vice Presidents, the Vice Presidents (including the Secretary),
     the Treasurer and the Controller of Alcan,
"Meeting" means the Annual Meeting to be held on 22 April 1999 and any
     adjournment thereof,
"Non-Executive Director" means a Director of Alcan who is not an employee of
     Alcan or its Subsidiaries or Related Companies,
"Notice" means the attached Notice of Annual Meeting,
"Related Company" means a company in which Alcan has significant influence over
     management but owns 50% or less of the voting stock,
"Shareholder" means a holder of the Shares,
"Share" means a Common Share in the capital of Alcan,
"Subsidiary" means a company controlled by Alcan, and
"$" means U.S. Dollars.
 
PROXY SOLICITATION
 
The solicitation of proxies will be made primarily by mail, but may also be made
by electronic means, by telephone or in person. The cost of soliciting proxies
will be borne by Alcan. CIBC Mellon Trust Company and Morrow & Co., Inc. have
been retained by Alcan in Canada and the United States of America, respectively,
to assist in the solicitation of proxies from Shareholders. For these services,
CIBC Mellon Trust Company and Morrow & Co., Inc. are expected to receive, from
Alcan, fees of approximately Can. $15,000 and $20,000, respectively, plus
reimbursement of reasonable expenses. In addition, employees of Alcan may
solicit proxies without compensation. CIBC Mellon Trust Company is responsible
for the tabulation of proxies.
 
                                        2
<PAGE>   5
 
VOTING SHARES AND RECORD DATE
 
The Shares are the only class of outstanding shares of Alcan which entitle
holders to vote at the Meeting. Each Share entitles the holder to one vote at
the Meeting. As at 3 March 1999, there were 220,873,108 Shares outstanding. Only
Shareholders of record at the close of business on that date are entitled to
receive the Notice. They will also be entitled to vote unless their Shares have
been transferred and the transferee has produced a properly-endorsed
certificate(s) representing the transferred Shares or has otherwise established
ownership of the transferred Shares and has requested, at least 10 days before
the Meeting, that such transferee's name be included on the list of
Shareholders, in which case the transferee will be entitled to vote such Shares
instead of the transferor.
 
VOTING BY SHAREHOLDERS
 
A vote at the Meeting may be given by the Shareholder attending in person. The
participation by a Shareholder in such a vote will automatically revoke any
proxy which has been previously given by the Shareholder in respect of business
covered by that vote.
 
VOTING BY PROXYHOLDERS
 
APPOINTMENT OF PROXYHOLDERS AND REVOCATION OF PROXIES
 
A vote at the Meeting may, instead, be given by proxy, and the proxyholder need
not be a Shareholder. If the Shareholder is a body corporate or association, the
form of proxy must be signed by a person duly authorized by that body corporate
or association.
 
The authority granted by a proxy may be revoked by the Shareholder with a letter
of revocation or another proxy with a later date.
 
All proxies or letters of revocation must be delivered NO LATER THAN THE CLOSE
OF BUSINESS (5:00 P.M. E.D.T.) ON 21 APRIL 1999 TO:
 
<TABLE>
     <S>                          <C>
     Alcan                        at Maison Alcan
                                  1188 Sherbrooke Street West
                                  Montreal, Quebec, Canada H3A 3G2
                                  Telecopier: (514) 848-8115,
     CIBC Mellon Trust Company    at 200 Queen's Quay East Unit 6
                                  Toronto, Ontario, Canada M5A 4K9
                                  Telecopier: (416) 368-2502,
     Morrow & Co., Inc.           at 445 Park Avenue
                                  New York, N.Y. 10022, U.S.A.
                                  Telecopier: (212) 754-8300,
</TABLE>
 
or hand-delivered on 22 APRIL 1999 to the Chairman prior to the commencement of
the Meeting.
 
                                        3
<PAGE>   6
 
CONFIDENTIAL PROXY VOTING PROCEDURES
 
The accompanying form of proxy represents all Shares registered in the
Shareholder's name, including any whole Shares which the Shareholder may own as
a participant in Alcan's Dividend Reinvestment Plan and/or Share Purchase Plan.
 
Three persons, who are not Directors or employees of Alcan or its Subsidiaries
or Related Companies, are proposed in the accompanying form of proxy as
proxyholders to attend the Meeting and vote the Shares represented by the proxy.
Their names are printed on the form of proxy. If the form of proxy is signed and
returned, these proxyholders will vote in accordance with the instructions the
Shareholder marks on it. IF NO INSTRUCTIONS ARE MARKED, THEY WILL VOTE THE
SHARES FOR THE ELECTION OF DIRECTORS (SEE PAGES 5 TO 8), FOR THE APPOINTMENT OF
AUDITORS (SEE PAGE 25), AND FOR THE APPROVAL OF THE AMENDMENTS TO AND
RESTATEMENT OF THE SHAREHOLDER RIGHTS PLAN (SEE PAGE 26).
 
A Shareholder may appoint any other person as proxyholder either by writing that
person's name in the blank space provided for that purpose on the form of proxy
or by completing another appropriate form of proxy. In either of these cases,
the Shareholder is advised in his or her own interest to specify a choice with
respect to each of the matters to be presented for action at the Meeting.
 
Proxies will not be submitted to Management except where they contain comments
clearly intended for Management or in the event of a proxy contest or in order
to meet legal requirements.
 
BUSINESS AT ANNUAL MEETING
 
Only the business described in the Notice may be presented for action at the
Meeting. The form of proxy provides discretionary authority to vote only on
matters concerning the conduct of the Meeting.
 
FINANCIAL STATEMENTS AND AUDITORS' REPORT
 
The consolidated financial statements of Alcan and the Auditors' Report for 1998
will be submitted to Shareholders at the Meeting, but no vote with respect
thereto is required or proposed to be taken.
 
                                        4
<PAGE>   7
 
ELECTION OF DIRECTORS
 
Mrs. S.I. Bata and Mr. W.R.C. Blundell, each having attained retirement age,
will not seek election at the Meeting and will retire from the Board at the
close of the Meeting.
 
Twelve Directors are to be elected to serve until the close of the 2000 Annual
Meeting or until they cease to hold office as such. The Board of Directors and
Management recommend the election of the nominees named below, all of whom are
existing Directors except Ms. E.R. Clitheroe.
 
<TABLE>
<CAPTION>
                                                                                                                  Director
                                                                                                                    since
                                                                                                                  --------
<C>                                 <S>                                                                       <C>
 
          (photo)                   JACQUES BOUGIE, O.C.                                                            1989
                                    Jacques Bougie, 51, has been President and Chief Executive Officer of
                                    Alcan since November 1993, having served earlier as President and
                                    Chief Operating Officer since July 1989. Mr. Bougie joined Alcan in
                                    1979 and held a number of senior management positions until 1989,
                                    including having responsibility for all of Alcan's fabricating
                                    operations in North America other than rolling. Mr. Bougie is also a
                                    director of Bell Canada.
                                    Mr. Bougie is a member of the Environment Committee.
 
          (photo)                   WARREN CHIPPINDALE, F.C.A., C.M.                                                1986
                                    Warren Chippindale, 70, was chairman and chief executive partner of
                                    Coopers & Lybrand (Canada) from 1971 to 1986 and chairman of Coopers &
                                    Lybrand (International) for five years during that period. Mr.
                                    Chippindale is a director of The Spectrum United Funds.
                                    Mr. Chippindale is a member of the Corporate Governance Committee and
                                    the Audit Committee, and is Chairman of the Personnel Committee.
 
          (photo)                   ELEANOR R. CLITHEROE                                                          Nominated
                                    Eleanor Clitheroe, 45, is president and chief executive officer of             in 1999
                                    Ontario Hydro Services Company. Ms. Clitheroe had earlier served as
                                    managing director and chief financial officer in that organization.
                                    Prior to joining Ontario Hydro in 1993, Ms. Clitheroe served as deputy
                                    minister of finance for the Province of Ontario, before which she was
                                    vice president of Canadian Imperial Bank of Commerce.
</TABLE>
 
                                        5
<PAGE>   8
 
<TABLE>
<CAPTION>
                                                                                                                  Director
                                                                                                                    since
                                                                                                                  --------
<C>                                 <S>                                                                       <C>
          (photo)                   TRAVIS ENGEN                                                                    1996
                                    Travis Engen, 54, is chairman and chief executive officer of ITT
                                    Industries, Inc. in the United States of America and has held several
                                    important positions within the ITT organization, including that of
                                    executive vice president of ITT Corporation from 1991 to 1995. Mr.
                                    Engen is a member of the U.S. President's National Security
                                    Telecommunications Advisory Committee. He is a director of Fundacion
                                    Chile. He is also a director of Lyondell Chemical Company and a member
                                    of the Business Roundtable and the Manufacturers Alliance Board of
                                    Trustees, all of which are located in the United States of America.
                                    Mr. Engen is a member of the Corporate Governance Committee, the Audit
                                    Committee and the Environment Committee.
 
          (photo)                   DR. JOHN R. EVANS, C.C.                                                         1986
                                    John Evans, 69, is Chairman of Alcan as well as chairman of Allelix
                                    Biopharmaceuticals Inc. and Torstar Corporation. Dr. Evans was
                                    chairman and chief executive officer of Allelix Inc. from 1983 to
                                    1989, president of the University of Toronto from 1972 to 1978 and
                                    director of the Population, Health and Nutrition Department of the
                                    World Bank from 1979 to 1983. He is past chairman of the Rockefeller
                                    Foundation. He is also a director of Connaught Laboratories Ltd., MDS
                                    Health Group Ltd. and Pasteur Merieux Serums & Vaccines.
                                    Dr. Evans is Chairman of the Corporate Governance Committee and member
                                    of the Audit Committee and the Personnel Committee.
 
          (photo)                   ALLAN E. GOTLIEB,C.C.                                                           1989
                                    Allan Gotlieb, 71, was Ambassador of Canada to the United States of
                                    America from 1981 to 1989 and chairman of the Canada Council from 1989
                                    to 1994. Mr. Gotlieb is a director of Hollinger Inc., Champion
                                    International Corporation, Livent Inc. and Peoples Jewellers, a senior
                                    consultant with the law firm of Stikeman, Elliott, a member of the
                                    advisory boards of Nestle Canada Inc., Hollinger International Inc.,
                                    Investment Co. of America and senior advisor to Julius Baer Investment
                                    Advisory (Canada) Ltd., co-chairman of Saturday Night magazine,
                                    chairman of the Donner Canadian Foundation and Ontario Heritage
                                    Foundation.
                                    Mr. Gotlieb is a member of the Corporate Governance Committee, the
                                    Environment Committee and the Personnel Committee.
</TABLE>
 
                                        6
<PAGE>   9
 
<TABLE>
<CAPTION>
                                                                                                                  Director
                                                                                                                    since
                                                                                                                  --------
<C>                                 <S>                                                                       <C>
 
          (photo)                   J.E. NEWALL, O.C.                                                               1985
                                    Ted Newall, 63, is chairman and a director of NOVA Chemicals
                                    Corporation. He was chairman and chief executive officer of Du Pont
                                    Canada Inc. from 1980 to 1991. Mr. Newall is a director of BCE Inc.,
                                    BCI Inc., Bell Canada Ltd., Canadian Pacific Ltd., Maple Leaf Foods
                                    Inc. and Royal Bank of Canada. He is also honorary chairman and member
                                    of the executive and policy committees of the Business Council on
                                    National Issues.
                                    Mr. Newall is a member of the Corporate Governance Committee and the
                                    Personnel Committee and is Chairman of the Environment Committee.
 
          (photo)                   DR. PETER H. PEARSE, C.M.                                                       1989
                                    Peter Pearse, 66, is a consultant on natural resources economics and
                                    policies and president of a private investment company. He is a
                                    Professor Emeritus at the University of British Columbia where he was
                                    a member of the faculty from 1962 to 1996. Dr. Pearse has served on
                                    the Economic Council of Canada, the Canadian Consumer Council, the
                                    Board of Governors of the University of British Columbia, the
                                    executive board of the Law of the Sea Institute and the board of
                                    directors of World Wildlife Fund Canada. Dr. Pearse has conducted two
                                    Royal Commissions on natural resources policies and has been an
                                    advisor on natural resources matters to Canadian and foreign
                                    governments and to the World Bank.
                                    Dr. Pearse is a member of the Corporate Governance Committee and the
                                    Environment Committee.
 
          (photo)                   SIR GEORGE RUSSELL, C.B.E.                                                      1987
                                    Sir George Russell, 63, is chairman of 3i Group plc, an industrial
                                    investment bank in the United Kingdom. Sir George had previously
                                    served with Alcan from 1972, becoming managing director of British
                                    Alcan Aluminium plc, a Subsidiary of Alcan, in 1981. He resigned from
                                    that company in 1986, but rejoined its board in 1997. He is also
                                    chairman of Camelot plc and director of Northern Rock Building Society
                                    and Taylor Woodrow, all of which are located in the United Kingdom.
                                    Sir George is a member of the Corporate Governance Committee, the
                                    Audit Committee and the Personnel Committee.
</TABLE>
 
                                        7
<PAGE>   10
 
<TABLE>
<CAPTION>
                                                                                                                  Director
                                                                                                                    since
                                                                                                                  --------
<S>                                 <C>                                                                       <C>
 
          (photo)                   GUY SAINT-PIERRE, O.C.                                                          1994
                                    Guy Saint-Pierre, 64, is chairman and a director of SNC-Lavalin Group
                                    Inc., having served as president and chief executive officer from 1989
                                    to 1996. From 1970 to 1976, he served with the Government of Quebec,
                                    first as Minister of Education and then as Minister of Industry and
                                    Commerce. Between 1978 and 1989, he was president and chief executive
                                    officer of Ogilvie Mills Ltd. Mr. Saint-Pierre is a director of BCE
                                    Inc., General Motors of Canada and Royal Bank of Canada.
                                    Mr. Saint-Pierre is a member of the Corporate Governance Committee and
                                    the Audit Committee.
 
                                    GERHARD SCHULMEYER                                                              1996
          (photo)                   Gerhard Schulmeyer, 60, is president and chief executive officer of
                                    Siemens Corporation in the United States of America, having been
                                    president and chief executive officer of Siemens Nixdorf
                                    Informationssysteme AG and chairman of its managing board since 1994.
                                    Prior to joining Siemens Nixdorf, Mr. Schulmeyer was executive vice
                                    president and a member of the executive committee of Asea Brown Boveri
                                    Ltd. as well as president and chief executive officer of ABB Inc.,
                                    U.S.A. From 1980 to 1989, he held various senior positions with
                                    Motorola Inc., culminating with that of executive vice president,
                                    deputy to the chief executive officer, responsible for European
                                    business. He is a member of the supervisory board of Thyssen-
                                    Bornemisza Holding N.V. and of the boards of Zurich Financial Services
                                    and A.D. Little, Inc. He is also a member of the board of trustees of
                                    the MIT Corporation.
                                    Mr. Schulmeyer is a member of the Corporate Governance Committee and
                                    the Audit Committee.
 
          (photo)                   PAUL M. TELLIER, C.C.                                                           1998
                                    Paul M. Tellier, 59, has been president and chief executive officer of
                                    the Canadian National Railway Company since October 1992. From 1985 to
                                    1992, Mr. Tellier held the position of Canada's most senior civil
                                    servant as Clerk of the Privy Council Office and Secretary to the
                                    Cabinet of the Government of Canada. During his service in the
                                    Canadian civil service since 1967, Mr. Tellier held several senior
                                    positions including deputy minister of Indian Affairs and Northern
                                    Development, deputy minister of Energy, Mines and Resources,
                                    directorships of Petro Canada and Atomic Energy of Canada Limited and
                                    chairman of the International Energy Agency. Mr. Tellier is a director
                                    of Bombardier Inc., Bell Canada and McCain Foods, and is past chairman
                                    of the Conference Board of Canada.
                                    Mr. Tellier is a member of the Corporate Governance Committee.
</TABLE>
 
                                        8
<PAGE>   11
 
HOLDINGS OF SHARES AND DEFERRED SHARE UNITS BY DIRECTORS
 
All Directors named below are present Directors (with the exception of Ms.
Clitheroe) and are nominees for election as Directors at the Meeting, there
being no other nominees.
 
The second column in the table below shows Shares which are beneficially owned
(including Shares over which control or direction is exercised) as well as
Shares subject to Options granted under the Alcan Executive Share Option Plan
described on page 19. The third column shows Units held under the Deferred Share
Unit Plans described on pages 13 and 23; these Units do not carry voting rights.
 
<TABLE>
<S>                                                          <C>                             <C>
----------------------------------------------------------------------------------------------------------------------------
                                                                                                        Number of
  Name                                                              Number of Shares              Deferred Share Units
----------------------------------------------------------------------------------------------------------------------------
  J. Bougie                                                            785,514(1)                       51,874(2)
----------------------------------------------------------------------------------------------------------------------------
  W. Chippindale                                                          1,810                          942(3)
----------------------------------------------------------------------------------------------------------------------------
  E.R. Clitheroe                                                           430                             --
----------------------------------------------------------------------------------------------------------------------------
  T. Engen                                                                5,500                          806(3)
----------------------------------------------------------------------------------------------------------------------------
  J.R. Evans                                                              3,429                         2,458(3)
----------------------------------------------------------------------------------------------------------------------------
  A.E. Gotlieb                                                            1,539                          819(3)
----------------------------------------------------------------------------------------------------------------------------
  J.E. Newall                                                             6,154                          942(3)
----------------------------------------------------------------------------------------------------------------------------
  P.H. Pearse                                                             2,338                          717(3)
----------------------------------------------------------------------------------------------------------------------------
  G. Russell                                                              4,629                          819(3)
----------------------------------------------------------------------------------------------------------------------------
  G. Saint-Pierre                                                        10,141                          717(3)
----------------------------------------------------------------------------------------------------------------------------
  G. Schulmeyer                                                           1,184                          704(3)
----------------------------------------------------------------------------------------------------------------------------
  P.M. Tellier                                                            1,084                          228(3)
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) Made up as follows: 37,614 Shares and Options to purchase 747,900 Shares.
 
(2) Held as EDSUs described on page 13; Mr. Bougie may be entitled to additional
    deferred share units as mentioned in paragraph 3 on page 14.
 
(3) Held as DDSUs described on page 23.
 
A trust in which Sir George Russell's children have an interest owns 10,701
Shares. Sir George disclaims beneficial ownership in the Shares owned by his
children.
 
Mr. Engen owns his Shares jointly with his wife.
 
HOLDINGS OF SHARES BY OTHERS
 
As of 31 December 1998, Sanford C. Bernstein & Co., Inc. beneficially owned
25,085,051 Shares, with sole dispositive power over this entire amount, sole
voting power over 13,948,336 of these and shared voting power over 2,676,976 of
these, according to a Schedule 13G filing; this shareholding amounted to 11% of
the outstanding Shares.
 
CORPORATE GOVERNANCE PRACTICES
 
The following description of corporate governance practices in Alcan is made in
response to regulations of The Montreal Exchange and The Toronto Stock Exchange.
The Guidelines referred to below are the Guidelines set out in the aforesaid
regulations.
 
The mandate of the Board is to "manage the business and affairs" of the Company
through the Company's Management and to discharge its duties and obligations in
accordance with the provisions of (a) the Canada Business Corporations Act, (b)
the Company's constituting documents and by-laws, and (c) other applicable
legislation and Company policies. The Company's system of corporate governance
covers the items listed in Guideline 1.
 
                                        9
<PAGE>   12
 
The Board is satisfied that the number of Directors should range from between 11
to 15. Of the present Board of 13 Directors, J. Bougie is the President and
Chief Executive Officer of the Company and Sir George Russell is a former
employee of Alcan (having retired in 1986) and is also a director of British
Alcan Aluminium plc (a wholly-owned Subsidiary of Alcan). The composition of the
Board, accordingly, meets the test in Guideline 2.
 
As Alcan does not have a controlling Shareholder, none of the Directors
represents the investment of minority Shareholders.
 
The Board has a Chairman (J.R. Evans) who is not a member of Management; this
structure allows the Board to function independently of Management. This is in
accordance with Guideline 12.
 
The Board has appointed five committees, whose mandates and activities are
described on page 11. These are in accordance with Guidelines 4, 5, 10 and 13.
Each Committee is made up of a majority of unrelated Directors and, therefore,
meets the requirements in Guideline 9.
 
In addition to the statutory duties under the Canada Business Corporations Act,
the Company's corporate governance practices require that the following matters
be subject to Board approval:
 
     (1)  capital expenditure budgets and significant investments and
          divestments (over $50 million),
 
     (2)  at the discretion of the Chief Executive Officer, any business which
          may have the potential for important impact on the Company,
 
     (3)  the number of Directors within the minimum (9) and maximum (20) limits
          provided in the Company's Articles of Incorporation,
 
     (4)  the terms of appointment of Non-Executive Directors, and
 
     (5)  the appointment and remuneration of Officers of the Company.
 
The Corporate Governance Committee is responsible for recommending candidates to
the Board for appointment as Directors. Nominees are selected as potential
representatives of Shareholders as a whole and not as representatives of any
particular Shareholder or group of Shareholders. Care is taken to ensure that
the Board of Directors is constituted with a majority of individuals who qualify
as unrelated Directors. An unrelated Director is a Director who is free from any
interest and any business or other relationship which could, or could reasonably
be perceived to, materially interfere with the Director's ability to act with a
view to the best interests of the Company, other than interests and
relationships arising from shareholding.
 
The Corporate Governance Committee is also responsible for assessing the
performance of the Board. The Committee ensures the adequacy of the time
commitment of individuals to Alcan matters.
 
In order to receive Shareholder feedback and respond to Shareholder concerns,
Alcan maintains an experienced investor relations staff whose primary
responsibility is to provide information and analysis to the investing community
in accordance with Alcan's policy on public disclosures. This policy has been
established in compliance with applicable legal disclosure requirements in
Canada and in the U.S.A. and is reviewed periodically. The investor relations
staff meets periodically with investors and analysts and is accessible to
Shareholders by telephone during business hours. These services facilitate the
receiving of Shareholder comments.
 
The Management of Alcan is responsible for conducting the business and
operations of the Company in accordance with a business strategy approved by the
Board. Management's authority to act in certain matters which may have the
potential for important impact on the Company, including decisions by the Chief
Executive Officer, is subject to prior Board approval as described above.
However, before being submitted to the Board, certain matters (e.g., dividends,
securities issues, proxy circulars, annual reports and significant
investment/divestment proposals) are prepared and reviewed by Management with
external professional advice, as necessary.
 
BOARD MEETINGS AND BOARD COMMITTEES
 
The Board held 10 meetings during 1998, one of which was held by telephone
conference.
 
The Board has appointed the Committees described below but has not appointed an
executive committee of the Board.
 
                                       10
<PAGE>   13
 
CORPORATE GOVERNANCE COMMITTEE
 
This Committee is composed of Directors who are not officers or employees of
Alcan or its Subsidiaries or Related Companies. S.I. Bata, W.R.C. Blundell, W.
Chippindale, T. Engen, J.R. Evans (Committee Chairman), A.E. Gotlieb, J.E.
Newall, P.H. Pearse, Sir George Russell, G. Saint-Pierre, G. Schulmeyer and P.M.
Tellier serve on this Committee. It met six times in 1998.
 
As mentioned above (page 10), the Committee has the broad responsibility of
reviewing corporate governance within Alcan (including Board practices and
performance) and of making recommendations with respect to such matters to the
Board. The Committee also maintains an overview of the composition of the Board
and reviews candidates for nomination as Directors as well as membership of all
Board Committees. It also considers recommendations from the Personnel Committee
regarding compensation of Non-Executive Directors as well as the appointments of
the Chairman of the Board and the Chief Executive Officer of Alcan.
 
AUDIT COMMITTEE
 
This Committee consists of not less than three Directors who are not officers or
employees of Alcan or its Subsidiaries or Related Companies. W.R.C. Blundell
(Committee Chairman), W. Chippindale, T. Engen, J.R. Evans, Sir George Russell,
G. Saint-Pierre and G. Schulmeyer serve on this Committee. It met three times in
1998.
 
The objective of the Committee is to assist the Board in fulfilling its
functions relating to corporate accounting and reporting practices as well as
financial and accounting controls, to provide effective oversight of the
financial reporting process, and to review financial statements as well as
proposals for issues of securities.
 
This Committee is established in accordance with the provisions of the Canada
Business Corporations Act.
 
ENVIRONMENT COMMITTEE
 
This Committee is composed of the Chief Executive Officer and not less than
three Directors who are not officers or employees of Alcan or its Subsidiaries
or Related Companies. S.I. Bata, J. Bougie, T. Engen, A.E. Gotlieb, J.E. Newall
(Committee Chairman) and P.H. Pearse serve on this Committee. It met three times
in 1998.
 
The Committee has the broad responsibility of reviewing the policy, management
practices and performance of Alcan in environmental matters and of making
recommendations to the Board with respect to such matters.
 
PERSONNEL COMMITTEE
 
This Committee is composed of the Chairman and not less than three Directors who
are not officers or employees of Alcan or its Subsidiaries or Related Companies.
W. Chippindale (Committee Chairman), J.R. Evans, A.E. Gotlieb, J.E. Newall and
Sir George Russell serve on this Committee. It met four times in 1998.
 
As mentioned on page 7, Sir George Russell is a former officer of a Subsidiary.
 
The Committee has the broad responsibility of reviewing any and all personnel
policy and employee relations matters and of making recommendations with respect
to such matters to the Board or the Chief Executive Officer, as appropriate. It
also reviews and approves Alcan's executive compensation policy.
 
The Committee also makes recommendations to the Corporate Governance Committee
on compensation of Non-Executive Directors as well as on the appointments of the
Chairman of the Board and the Chief Executive Officer of Alcan.
 
OPTIONS COMMITTEE
 
A Committee whose members are the same as the members of the Personnel Committee
administers the Alcan Executive Share Option Plan described on page 19.
 
                                       11
<PAGE>   14
 
EXECUTIVE COMPENSATION
 
REPORT ON EXECUTIVE COMPENSATION
 
General
 
Alcan's executive compensation policies cover cash compensation and benefits,
including pensions, and are designed to enable Alcan to attract and retain
highly qualified people to carry out the objectives of the organization. The
Personnel Committee (the "Committee"), all of whose members are Non-Executive
Directors, has the duty and responsibility to review and approve these policies
periodically and to make recommendations with respect to such matters either to
the Board or to the Chief Executive Officer, as may be appropriate. The policies
provide a compensation package that is internally equitable, externally
competitive and reflects individual efforts and achievements. The cash
compensation structure and benefits programs, including short- and long-term
incentive plans, are designed to be competitive with the median of selected
comparator groups of companies. These companies, identified as a "Compensation
Peer Group", are comparable in size, are involved in cyclical industries as is
Alcan, and have a global presence. In the case of the Canada-based Executive
Officers, the Compensation Peer Group includes both Canada-based (12) and
U.S.-based (15) enterprises. When establishing the level of compensation, weight
is given to U.S. compensation practices. For certain Canada-based Executive
Officers, an equal weighting is given to both U.S. and Canadian practices while,
for the others, more weight is given to Canadian compensation practices. In the
case of the Chief Executive Officer, the total annual compensation is set at the
level of U.S.-based peers. These different weightings reflect the increasing
global importance of the senior management level positions in the organization.
At all other levels in the Company world-wide, the policies governing the
compensation of executives are generally related solely to their relevant
national markets; the competitiveness of senior employees' compensation in
countries other than Canada is derived from consultant surveys of the
Compensation Peer Group in their respective countries.
 
Alcan retains external consultants to assist its Human Resources Department and
the Committee in collecting the required comparative data and providing advice
concerning all aspects of compensation of its senior employees. From time to
time, the Committee has retained the services of its own consultant to assist it
in its deliberations, and may do so again in the future.
 
Annual Compensation
 
Annual compensation of the Executive Officers comprises base salaries, incentive
plans and benefits programs. Base salaries for Executive Officers are reviewed
annually. Any proposed changes are reviewed and approved by the Committee before
implementation and are based on an evaluation of each Executive Officer's
current performance.
 
A substantial proportion of the Executive Officers' compensation is related to
the performance of Alcan.
 
Alcan's short-term incentive plan, known as the Executive Performance Award
("EPA") Plan, has three components, each based on a different aspect of
performance: (1) the overall profitability of Alcan, (2) the performance of
Alcan against key strategic corporate objectives, and (3) the performance of
Alcan's business units. These are explained in the numbered paragraphs below.
 
     1.  The award for overall profitability of Alcan is called the
        Value Creation Award ("VCA"). The VCA is related to Economic
        Value Added ("EVA(R)"). The VCA for the Executive Officers has a
        guideline payment range of 12% to 35% of salary grade mid-point
        against which actual performance is measured. The minimum VCA
        payment can be nil and the maximum, in a year of exceptionally
        strong improvement in EVA, could be up to three times the
        guideline amount. The Committee establishes a threshold
        corporate EVA performance target which must be met before any
        VCA payment will be made. All Executive Officers received an
        award from this component of the EPA for the year 1998. ("EVA"
        is a registered trademark of Stern Stewart & Co.)
 
     2.  The award for achieving corporate objectives, called the
        Corporate Objectives Award ("COA"), focuses on Alcan's critical
        corporate objectives. These objectives are established as part
        of the annual business planning process by the Chief Executive
 
                                       12
<PAGE>   15
 
        Officer and are submitted to the Committee for approval at the start of
        each year. The COA is independent of the VCA objective. For Executive
        Officers, the COA has a guideline payment range of 12% to 30% of salary
        grade mid-point. The minimum COA payment is nil and the maximum could be
        up to twice the guideline amount. All Executive Officers received an
        award from this component of the EPA for the year 1998.
 
     3.  The award for business unit performance is called the Business
        Unit Award ("BUA"). The BUA provides for an award based on the
        business unit's performance measured against pre-established
        objectives for the year. The BUA is independent of the VCA and
        COA objectives. For Executive Officers, the BUA has a guideline
        payment range of 15% to 20% of salary grade mid-point. The
        minimum BUA payment is nil and the maximum could be up to twice
        the guideline amount. The criteria for rewards under this aspect
        of the EPA are set annually by managements at various levels and
        their respective superiors. There are 17 major business units
        within Alcan world-wide. All Executive Officers received awards
        from this component of the EPA for the year 1998.
 
An exception to the practice described in the preceding paragraphs is made in
the case of termination of employment (retirement, resignation or death). In
that year, the employee receives guideline VCA, COA and BUA amounts, prorated
for the number of months actually employed.
 
Under the Executive Deferred Share Unit Plan, Canada-based Executive Officers
may elect, prior to the beginning of any particular year, to receive Executive
Deferred Share Units ("EDSUs") with a value equal to 50% or 100% of their EPA in
respect of that year, instead of a cash payment. The number of EDSUs is
determined by dividing the amount so elected by the average price of a Share on
the Montreal, Toronto and New York stock exchanges at the end of the year
preceding the year in question. Additional EDSUs are credited to each holder
thereof corresponding to dividends declared on Shares. The EDSUs are redeemable
only upon termination of employment (retirement, resignation or death). The
amount to be paid by Alcan upon redemption (which must be on or before 15
December of the calendar year next following the termination) will be calculated
by multiplying the accumulated balance of EDSUs by the average price of a Share
on the said exchanges at the time of redemption.
 
Effective 1 June 1998, a Non-Qualified Deferred Compensation Plan was introduced
at Alcan's U.S. Subsidiary, under which Executive Officers based in the USA may
elect, prior to the beginning of any particular year, to defer up to 75% of
their base salary and up to 100% of their EPA award in respect of that year,
instead of cash payments. The deferral period elected by a participant in the
plan must not be less than three years from the date of deferral nor extend more
than five years beyond the date of normal retirement. The deferral amount is
allocated to one or more of nine investment vehicles chosen by the participant.
Final distribution of the accumulated balance is made within 90 days after
either the end of the last year of the elected period or the end of the year of
the participant's death, resignation or retirement.
 
Long-Term Compensation
 
The Alcan Executive Share Option Plan (described on page 19), which is
administered by the Options Committee, composed of Non-Executive Directors, is a
long-term incentive plan closely aligned with the interests of Shareholders and
forms part of the Executive Officers' total compensation. The purpose of the
Option Plan is to attract and retain employees and to encourage them to
contribute to growth in the price of Alcan Shares. The number of Options granted
is related to salary grade mid-point but not to the amount of Options or SARs
(described on page 19). When determining the competitiveness of senior
employees' total compensation, the compensation value of Option grants is taken
into account. For Executive Officers, the number of Options granted annually
generally produces annual compensation values which, when expressed as a
multiple of annual base salary, are much lower than those provided by U.S.-based
companies within the Compensation Peer Group but higher than those of
Canada-based companies within the Compensation Peer Group.
 
For the 1998 annual grant, the Options Committee introduced a market-value-based
vesting provision (waiting period) replacing the previous time-based vesting ("C
Options" described on page 19). In addition, an investment incentive feature was
added in 1998 to provide further incentive for increased Share ownership to
certain senior executives ("D Options" described on page 20); this feature
 
                                       13
<PAGE>   16
 
encourages early exercise of the Options and retention of the resulting Shares.
The Options Committee also granted, to 14 senior executives other than the Chief
Executive Officer, D Options based upon the 1996 and 1997 Option grants, up to a
maximum of 10,000 D Options for each executive.
 
Compensation of the Chief Executive Officer
 
The Chief Executive Officer's annual compensation is administered by the
Committee according to the policies described above. The companies forming the
Compensation Peer Group for the Chief Executive Officer are specifically
selected because they and Alcan have chief executive officers with
responsibilities of similar magnitude. Alcan's Chief Executive Officer
participates in the EPA and the relationship between his compensation and
Alcan's performance is based on the same criteria as those discussed generally
for other participants in the EPA.
 
Given the uniqueness of Alcan as one of the largest global Canadian corporations
with two-thirds of its assets and employees located outside Canada, the
Committee has decided to set the total annual compensation of its Chief
Executive Officer, beginning in 1997, at the level of his U.S.-based peers (15
similar enterprises). In making this change, the Committee has also increased
the proportion of his compensation which is variable and "at risk" and, more
importantly, has placed greater emphasis on long-term performance linked
directly to total Shareholder return. With this change, the Committee has
decided to administer the Chief Executive Officer's total compensation on a
longer term perspective rather than through annual adjustments. To this end, the
Chief Executive Officer's compensation is now covered by an agreement with a
three-year term (1997-1999). Under this modified approach, the fixed portion of
his total compensation (the base salary and the value of pension benefits) will
represent some 33% thereof while the "at risk" portion, comprising the
short-term, medium-term and long-term incentive plans, will represent 67%
thereof. The "at risk" portion is linked directly to improved long-term
Shareholders' value through a combination of grants under the Option Plan and
the Executive Deferred Share Unit Plan.
 
The three-year agreement, referred to above, with the Chief Executive Officer
provides for compensation as set out below:
 
     1.  A base salary of Can. $1,000,000 per annum, commencing 1 March
        1997.
 
     2.  An annual short-term incentive grant using the formula under
        the EPA and based on a guideline of 85% of salary mid-point but
        to be received in the form of EDSUs.
 
          For the year 1998, the Chief Executive Officer received 29,732
        EDSUs (the figure being determined by dividing the value he
        would have received under the EPA by the average price of a
        Share at the end of 1997, $27.16).
 
     3.  As a medium-term incentive, the Chief Executive Officer will be
        entitled to receive a further award (by way of deferred share
        units issued under an arrangement that generally parallels the
        Executive Deferred Share Unit Plan) if, over the three-year
        period (1997-1999), Alcan achieves specific financial targets
        based on the objective of a sustainable improvement of $300
        million in net income over 1996, subject to adjustment if
        certain underlying assumptions change. The achievement of this
        objective over a three-year cycle will give rise to an award of
        19,400 deferred share units; lower and higher awards will be
        made if the income improvement falls short or surpasses that
        objective. The maximum would be 58,200 deferred share units for
        an income improvement of $600 million over 1996.
 
          The grant, if any, of deferred share units under this
        medium-term incentive will be made in the year 2000.
 
     4.  As a long-term incentive in respect of the three-year period
        (1997-1999) under the agreement, the Chief Executive Officer was
        granted 312,800 Options on 28 May 1997 at an exercise price of
        Can. $48.91 per Share, exercisable during the period from 1
        January 2000 up to 28 May 2007 (10 years from the date of
        grant). Upon the introduction of the additional investment
        incentive in 1998, the Options Committee granted 10,000 D
        Options related to the 1996 grant and 208,000 D Options related
        to the
 
                                       14
<PAGE>   17
 
        1997 grant. D Options under both grants have the same waiting periods
        and terminate on the same termination date as the associated 1996 and
        1997 Options.
 
     5.  Pensions under the Canadian Plans (see page 21) for eligible
        Alcan employees are calculated on the basis of salary plus the
        EPA guideline amount but, in view of the increases in the Chief
        Executive Officer's direct compensation described above, the
        pensionable portion of his EPA was reduced from 85% of salary to
        40% thereof. This change results in a reduction of about 25% in
        the pension which would otherwise have accrued to him under the
        Canadian Plans. However, under certain conditions of termination
        of employment, his pension will be subject to a minimum
        guaranteed amount once again based on salary and pensionable EPA
        at 75% of salary.
 
     6.  The Board may adjust the compensation arrangement set out above
        in order to correct for a sudden change in the relative values
        of the Canadian and U.S. Dollars. On 10 February 1999, such an
        adjustment was made with respect to the Chief Executive
        Officer's remuneration for 1997 and 1998 in the amounts of
        $20,600 and $68,900, respectively.
 
Approval of this Report on Executive Compensation
 
The Committee, whose members are set out below, has approved the issue of this
Report and its inclusion in this Management Proxy Circular.
 
<TABLE>
<S>                                                      <C>
                                                         W. Chippindale, Chairman of the Committee
                                                         J.R. Evans
                                                         A.E. Gotlieb
                                                         J.E. Newall
                                                         G. Russell
</TABLE>
 
                                       15
<PAGE>   18
PERFORMANCE GRAPH
 
The following graph compares the cumulative total Shareholder return on Can.
$100 invested in Shares with the cumulative total return of the Toronto Stock
Exchange 300 Stock Index, assuming reinvestment of all dividends. Additional
comparisons, which the Personnel Committee believes to be appropriate, are
provided with respect to two U.S. Dollar-based indices, the Standard & Poor's
500 Index and the Standard & Poor's Aluminum Index.

 
                                    
                    COMPARISON OF FIVE YEAR CUMULATIVE RETURN

 
                                    (graph)
               
                                      16
<PAGE>   19
 
SUMMARY COMPENSATION TABLE
 
Compensation paid to the Chief Executive Officer and the four other most highly
compensated Executive Officers for each of the three most recently completed
financial years is set out in the table below. These individuals are hereinafter
collectively referred to as the "Named Executive Officers".
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<S>                                  <C>       <C>              <C>              <C>              <C>              <C>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Long-term
                                                              Annual Compensation                   Compensation
                                                 ---------------------------------------------
                                                                     Bonus
                                                                   (Executive                       Shares Under
                                                                  Performance      Other Annual       Options         All Other
                                                    Salary           Award)        Compensation       Granted        Compensation
                                                                      (1)              (2)              (3)              (2)
Name and Principal Position            Year          ($)              ($)              ($)              (#)              ($)
-----------------------------------------------------------------------------------------------------------------------------------
 J. Bougie                             1998      739,906 (4)      807,363 (5)         52,914             --           20,475 (6)
 President and                         1997      728,543 (4)      727,142 (7)         31,786        312,800 (8)       20,900 (6)
 Chief Executive Officer               1996        647,415          424,274           45,773         65,000 (9)         19,225
-----------------------------------------------------------------------------------------------------------------------------------
 J.-P. Ergas                           1998        524,042          312,863           20,521        20,100 (10)         22,667
 Executive Vice President              1997        508,750          296,125           2,000          20,000 (9)         21,301
                                       1996        453,061          162,319           83,516         20,000 (9)         40,202
-----------------------------------------------------------------------------------------------------------------------------------
 E.N. Santos                           1998        513,023          335,360           36,358        16,800 (10)         44,081
 Executive Vice President              1997        501,270          282,305           33,757         16,700 (9)         43,093
                                       1996        357,761          168,829          125,942         20,000 (9)         12,064
-----------------------------------------------------------------------------------------------------------------------------------
 R.L. Ball                             1998        370,000          284,500          218,107        35,100 (10)         49,148
 Executive Vice President              1997        340,000          246,780           64,516         18,200 (9)         46,213
                                       1996        312,500          142,762           54,381         18,200 (9)         29,218
-----------------------------------------------------------------------------------------------------------------------------------
 B.W. Sturgell                         1998        336,667          308,786          813,612        32,100 (10)         15,670
 Executive Vice President              1997        284,500          246,780          345,210         20,000 (9)         18,099
                                       1996        202,333           92,039           19,073         6,800 (11)         13,161
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) See page 12 for description of the Executive Performance Award Plan.
 
(2) See Other Compensation on page 18.
 
(3) See page 19 for description of the Alcan Executive Share Option Plan.
 
(4) Including adjustments described in paragraph 6 on page 15.
 
(5) Received in the form of 29,732 EDSUs under the Executive Deferred Share Unit
    Plan (see page 13 for description) based on the Share price ($27.16) at the
    end of 1997; these qualify for additional EDSUs corresponding to dividends
    declared subsequently (see page 13 for description).
 
(6) See also paragraph 3 on page 14.
 
(7) Received in the form of 21,767 EDSUs, based on the Share price (Can. $46.40)
    at the end of 1996; these qualify for additional EDSUs corresponding to
    dividends declared subsequently (see page 13 for description).
 
(8) Granted as B Options. In 1998, 208,000 associated D Options were granted in
    addition.
 
(9) Granted as B Options. In 1998, 10,000 associated D Options were granted in
    addition.
 
(10) Granted as C Options together with the same number of associated D Options.
 
(11) Granted as B Options. In 1998, 6,800 associated D Options were granted in
    addition.
 
                                       17
<PAGE>   20
 
Compensation payments to each Named Executive Officer were determined in the
currency of his normal place of work (except for J.-P. Ergas and R.L. Ball who
received part of their compensation in U.S. Dollars). Unless otherwise
indicated, all compensation payments reported in this Management Proxy Circular
are stated in U.S. Dollars converted, where necessary, from the currency of
disbursement to U.S. Dollars at the average exchange rates for the respective
year. The currency and exchange rate details are given in the table below:
 
                        CURRENCY AND EXCHANGE RATE TABLE
 
<TABLE>
<S>                            <C>                                   <C>                 <C>
------------------------------------------------------------------------------------------------------------------------------
                                            Currency of                                          Average Exchange Rate
  Name                                     Disbursement                     Year              to convert to U.S. Dollars
------------------------------------------------------------------------------------------------------------------------------
 J. Bougie                               Canadian Dollars                   1998                        0.6710
                                         Canadian Dollars                   1997                        0.7199
                                         Canadian Dollars                   1996                        0.7329
------------------------------------------------------------------------------------------------------------------------------
 J.-P. Ergas                               U.S. Dollars                     1998                        1.0000
                                          British Pounds                    1998                        1.6625
                                           U.S. Dollars                     1997                        1.0000
                                          British Pounds                    1997                        1.6404
                                           U.S. Dollars                     1996                        1.0000
                                          British Pounds                    1996                        1.5672
------------------------------------------------------------------------------------------------------------------------------
 E.N. Santos                              Brazilian Reals                   1998                        0.8594
                                          Brazilian Reals                   1997                        0.9250
                                         Canadian Dollars                   1996                        0.7329
                                          Brazilian Reals                   1996                        0.9924
------------------------------------------------------------------------------------------------------------------------------
 R.L. Ball                                 U.S. Dollars                     1998                        1.0000
                                          British Pounds                    1998                        1.6625
                                           U.S. Dollars                     1997                        1.0000
                                           U.S. Dollars                     1996                        1.0000
------------------------------------------------------------------------------------------------------------------------------
 B.W. Sturgell                             U.S. Dollars                     1998                        1.0000
                                           U.S. Dollars                     1997                        1.0000
                                           U.S. Dollars                     1996                        1.0000
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
EXECUTIVE PERFORMANCE AWARD
 
The Executive Performance Award Plan and the related Executive Deferred Share
Unit Plan are described on pages 12 and 13.
 
OTHER COMPENSATION
 
Compensation benefits made available to senior employees under various plans
included those under (a) the Executive Performance Award Plan mentioned above,
(b) the Alcan Executive Share Option Plan described on page 19, (c) retirement
benefit plans described on pages 21 and 22, (d) life insurance plans, (e)
savings plans, (f) plans for the use and parking of automobiles, for
professional financial advice through independent organizations, for deemed
interest on loans and for the reimbursement of club membership fees, and (g) in
applicable cases, expatriate benefits, foreign taxes, housing assistance, and
directors' fees from Subsidiaries and Related Companies.
 
In the Summary Compensation Table on page 17, the amounts indicated for the year
1998 under the column titled Other Annual Compensation include benefits paid to
the Named Executive Officers under these plans: automobile usage (J. Bougie,
$19,150 and E.N. Santos, $22,476), deemed interest (J. Bougie, $21,831 and E.N.
Santos, $12,559), expatriate benefits (B.W. Sturgell, $450,035), financial
advice (J.-P. Ergas, $15,274), foreign taxes (R.L. Ball, $83,067) and housing
assistance (B.W. Sturgell, $317,948).
 
                                       18
<PAGE>   21
 
ALCAN EXECUTIVE SHARE OPTION PLAN
 
The Alcan Executive Share Option Plan ("Option Plan") provides for the granting
to senior employees of non-transferable options ("Options") to purchase Shares
(see REPORT ON EXECUTIVE COMPENSATION -- Long-term Compensation on page 13). The
Option Plan is administered by the Options Committee referred to on page 11.
 
A Options
 
Prior to 22 April 1993, the Option Plan provided for the granting of Options
hereinafter referred to as "A Options". No further A Options have been, or may
be, issued after that date.
 
The exercise price per Share under A Options was initially set in 1981 at not
less than 90% of the market value on the effective date of each grant of an A
Option, but all A Options granted after 1985 were set at 100% of the market
value on their effective dates. The effective date was fixed at the time of each
grant. Each A Option is exercisable in whole or in part during a period
commencing not less than three months after the effective date and ending not
later than 10 years after that date. In the event of retirement or death of the
employee, any remainder of this 10-year period in excess of five years is
reduced to five years. Alcan may make loans ("Option Loans"), at such interest
rate, if any, as the above-mentioned committee may determine, to assist in
financing the purchase of Shares through the exercise of A Options, but not in
the case of the other Options hereinafter described (see INDEBTEDNESS OF
DIRECTORS AND EXECUTIVE OFFICERS on page 23). The interest rate is currently nil
on all outstanding Option Loans. The Option Loans have terms of up to 9 3/4
years. After exercise of an A Option, the employee may not dispose of the Shares
during a one-year period ("Holding Period"). In the event of retirement or
resignation or other termination of the employee, the Holding Period terminates
upon repayment of the Option Loan. Each A Option has connected therewith stock
appreciation rights ("SARs") in respect of one-half of the Shares covered by the
A Option. Each SAR entitles the optionee to surrender unexercised the right to
subscribe for one Share in return for a cash payment in an amount equal to the
excess of the market value of such Share at the time of surrender over the
subscription price.
 
B Options
 
Since 22 April 1993, the Option Plan provided for Options hereinafter referred
to as "B Options".
 
The exercise price per Share under B Options is set at not less than 100% of the
market value on the effective date of the grant of each B Option. The effective
date is fixed at the time of the grant. Each B Option is exercisable (not less
than three months after the effective date) in respect of 25%, 50%, 75% or 100%
of the grant after a Waiting Period of 12, 24, 36 and 48 months, respectively,
following the effective date. The Options expire 10 years after the effective
date; in the event of retirement or death of the employee, any remainder of this
10-year period in excess of five years is reduced to five years. The B Options
do not have SARs connected therewith.
 
C Options
 
Since 23 September 1998, the Option Plan has provided for Options hereinafter
referred to as "C Options".
 
The exercise price per Share under C Options is set at not less than 100% of the
market value of the Share on the effective date of the grant of each C Option.
The effective date is fixed at the time of the grant. Each C Option is
exercisable (not less than three months after the effective date) in respect of
one-third of the grant when the market value of the Share has increased by 20%
over the exercise price, two-thirds of the grant when the market value of the
Share has so increased by 40% and the entire amount of the grant when the market
value of the Share has so increased by 60%. The said market values must exceed
those thresholds for at least 21 consecutive trading days. The said thresholds
are waived 12 months prior to the expiry date which is 10 years after the
effective date. In the event of death or retirement, any remainder of this
10-year period in excess of five years is reduced to five years, and the said
thresholds are waived. The C Options do not have SARs connected therewith.
 
                                       19
<PAGE>   22
 
D Options
 
In respect of B and C Options granted to certain senior executives, Alcan has
granted further Options, hereinafter referred to as "D Options", which grant
shall become effective upon the exercise of associated B or C Options and upon
the executive placing at least one-half of the Shares resulting from the
exercise of the B or C Option, as the case may be, in trust with an agency named
by Alcan for a minimum period of five years. The exercise price per Share of
each D Option is set at not less than 100% of the market value on the exercise
date of the associated B or C Option. D Options are exercisable in the same
manner as the associated B or C Option. The option period for the D Option will
terminate on the same date as the associated B or C Option. In the event of
death or retirement, any remainder of this Option period in excess of five years
is reduced to five years. The vesting provisions of the D Option are identical
to those of the associated B or C Option. The D Options do not have SARs
connected therewith.
 
As mentioned on page 14, Alcan has also granted D Options to certain executives
associated with each of the 1996 and 1997 option grants, up to a maximum of
10,000 D Options for each grant.
 
Limits on Grants of B, C and D Options
 
As stated above, no further A Options may be issued.
 
Alcan may issue in any year B, C or D Options in respect of a Yearly Allotment,
as defined in the Option Plan, in aggregate not exceeding 0.75% of the Shares
outstanding as at the end of the previous calendar year. In addition, the unused
portion of any previous Yearly Allotment may be carried forward. The cumulative
maximum number of Shares which can be issued under the Option Plan after 31
December 1995 is 20,500,000.
 
Grants and Exercises during 1998
 
The following table provides information pertaining to Options granted to the
Named Executive Officers during 1998:
 
                           OPTION GRANTS DURING 1998
 
<TABLE>
<S>                               <C>                 <C>                      <C>                      <C>
------------------------------------------------------------------------------------------------------------------------------
                                        Shares
                                         Under                                      Exercise Price
                                        Options           Percent of Total         and Market Value
                                        Granted           Options Granted          on Date of Grant
  Name                                  (#)(1)          to Employees in 1998        (Can. $/Share)      Expiration Date
------------------------------------------------------------------------------------------------------------------------------
 J. Bougie                            208,000 (2)               10.9                      --            28 May 2007
                                      10,000 (3)                0.5                       --            25 September 2006
------------------------------------------------------------------------------------------------------------------------------
 J.-P. Ergas                          20,100 (4)                1.1                     34.70           4 October 2008
                                      10,000 (2)                0.5                       --            24 September 2007
                                      10,000 (3)                0.5                       --            25 September 2006
------------------------------------------------------------------------------------------------------------------------------
 E.N. Santos                          16,800 (4)                0.9                     34.70           4 October 2008
                                      10,000 (2)                0.5                       --            24 September 2007
                                      10,000 (3)                0.5                       --            4 December 2006
------------------------------------------------------------------------------------------------------------------------------
 R.L. Ball                            35,100 (4)                1.9                     34.70           4 October 2008
                                      10,000 (2)                0.5                       --            24 September 2007
                                      10,000 (3)                0.5                       --            25 September 2006
------------------------------------------------------------------------------------------------------------------------------
 B.W. Sturgell                        32,100 (4)                1.7                     34.70           4 October 2008
                                      10,000 (2)                0.5                       --            24 September 2007
                                       6,800 (3)                0.4                       --            25 September 2006
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) Date of grant: 5 October 1998.
 
(2) D Option grant associated with the 1997 option grant.
 
(3) D Option grant associated with the 1996 option grant.
 
(4) C Option grant together with the same number of associated D Options (see
    ALCAN EXECUTIVE SHARE OPTION PLAN -- D Options above).
 
                                       20
<PAGE>   23
 
The following table provides certain required information pertaining to Options
exercised by the Named Executive Officers during 1998 as well as year-end
values:
 
                    AGGREGATED OPTION EXERCISES DURING 1998
                           AND YEAR-END OPTION VALUES
 
<TABLE>
<S>                            <C>              <C>              <C>                             <C>
--------------------------------------------------------------------------------------------------------------------------------
                                                                        Shares Underlying                   Value of
                                    Shares         Aggregate               Unexercised                     Unexercised
                                   Acquired          Value                 Options at                in-the-Money Options at
                                 on Exercise        Realized          31 December 1998 (1)            31 December 1998 (1)
  Name                               (#)            (Can. $)                   (#)                          (Can. $)
--------------------------------------------------------------------------------------------------------------------------------
 J. Bougie                            0                0                   E:  170,975                     E:  975,189
                                                                           U: 576,925                      U:   5,654
--------------------------------------------------------------------------------------------------------------------------------
 J.-P. Ergas                          0                0                   E:   42,000                     E:   73,305
                                                                           U:  94,200                      U: 157,598
--------------------------------------------------------------------------------------------------------------------------------
 E.N. Santos                          0                0                   E:   39,075                     E:  192,297
                                                                           U:  76,125                      U: 111,300
--------------------------------------------------------------------------------------------------------------------------------
 R.L. Ball                            0                0                   E:   57,850                     E:  366,957
                                                                           U: 116,950                      U: 234,198
--------------------------------------------------------------------------------------------------------------------------------
 B.W. Sturgell                      3,000            72,920                E:   15,000                     E:   30,141
                                                                           U: 100,450                      U: 213,098
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) E: Exercisable U: Unexercisable
 
Stock Appreciation Rights
 
During 1998, the Named Executive Officers did not receive or exercise any SARs,
nor did they have any remaining unexercised SARs at the year end.
 
RETIREMENT BENEFITS
 
Canadian Plans
 
The Alcan Pension Plan (Canada) and the Alcan Supplemental Retirement Benefit
Plan (Canada) are together herein referred to as the "Canadian Plans". Pensions
up to a statutory limit are payable under the former and, in excess thereof,
under the latter.
 
The Canadian Plans provide for pensions calculated on pensionable service and
annual average earnings during the 36 consecutive months when they were the
greatest, which earnings consist of salary and the Executive Performance Award
at its guideline amount up to a maximum (for J. Bougie, see page 15). The
following table shows estimated annual retirement benefits, expressed as a
percentage of annual average earnings during the said 36 months, payable upon
normal retirement at age 65 to persons in the indicated earnings and pensionable
service classifications.
 
                                 CANADIAN PLANS
 
<TABLE>
<S>                                 <C>            <C>            <C>            <C>            <C>            <C>
-----------------------------------------------------------------------------------------------------------------------------
          Average Annual                                          Years of Pensionable Service
                                    -------------------------------------------------------------------------------------
             Earnings
                ($)                       10             15             20             25             30             35
 
-----------------------------------------------------------------------------------------------------------------------------
        900,000 -- 2,000,000             17%            25%            34%            42%            51%            59%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
The Alcan Supplemental Retirement Benefits Plan also provides for an additional
pension to J. Bougie which increases the percentages in the table above by 4%.
 
                                       21
<PAGE>   24
 
Non-Canadian Plans
 
During 1998, R.L. Ball and B.W. Sturgell participated in an Alcan-sponsored
pension plan in the U.S.A. ("U.S. Plan") which provides for retirement benefits
which are generally comparable with the Canadian Plans, but with a ceiling of
60% of annual average earnings and a maximum pensionable service of 35 years.
The following table shows estimated annual retirement benefits, expressed as a
percentage of annual average earnings during the three consecutive calendar
years when they were the greatest, payable upon normal retirement at age 65 to
persons in the indicated earnings and pensionable service classifications.
 
                                   U.S. PLAN
 
<TABLE>
<S>                                 <C>            <C>            <C>            <C>            <C>            <C>
-----------------------------------------------------------------------------------------------------------------------------
          Average Annual                                          Years of Pensionable Service
                                    -------------------------------------------------------------------------------------
             Earnings
                ($)                       10             15             20             25             30             35
-----------------------------------------------------------------------------------------------------------------------------
        500,000 --  900,000              17%            25%            34%            42%            51%            59%
-----------------------------------------------------------------------------------------------------------------------------
      1,000,000 -- 2,000,000             17%            26%            34%            43%            51%            60%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
J.-P. Ergas participated in an Alcan-sponsored pension plan in the United
Kingdom and also in a supplemental retirement benefit agreement which provides
for a pension based on the terms of the U.S. Plan but in excess of statutory
limitations in both countries. E.N. Santos participated in an Alcan-sponsored
pension plan in Brazil, which is comparable to the U.S. Plan.
 
Deductions for Social Security
 
In the Canadian Plans, the retirement benefits described above are reduced by
the excess (if any) of retirement benefits payable from non-Canadian social
security and the Canada Pension Plan or the Quebec Pension Plan ("C/QPP") over
the maximum retirement benefits under the C/QPP. The normal form of payment of
pensions is a lifetime annuity with a guaranteed minimum of 60 monthly payments
or a 50% lifetime pension to the surviving spouse.
 
Pensionable Earnings and Years of Pensionable Service
 
The 1998 pensionable earnings and estimated years of pensionable service on
normal retirement at age 65 (subject to a maximum of 35 years where applicable)
for the Named Executive Officers were as follows: J. Bougie, $939,408 and 33
years; J.-P. Ergas, $781,542 and 10 years; E.N. Santos, $772,992 and 35 years;
R.L. Ball, $601,300 and 35 years; B.W. Sturgell, $567,967 and 25 years.
 
RETIRING ALLOWANCES
 
Upon his retirement, E.N. Santos will be paid a retiring allowance equal to
$200,000 plus an amount determined at the rate of $10,000 per year from 1 August
1995 to his retirement date.
 
BOARD FEES
 
An employee of Alcan who is a Director is not entitled to receive fees for
serving on the Board or on any Committee thereof.
 
                                       22
<PAGE>   25
 
COMPENSATION OF NON-EXECUTIVE DIRECTORS
 
FEES AND EXPENSES
 
During 1998, every Non-Executive Director was paid an annual fee of $25,000 and
an additional annual fee of $5,000 for serving on a Committee of the Board,
except for the Options Committee. If such Director also served as Chairman of a
Committee, a further annual fee of $6,000 was paid. J.R. Evans, as Non-Executive
Chairman of the Board, was paid a fee of $155,000 during 1998 in lieu of the
above fees.
 
Non-Executive Directors are reimbursed for transportation and other expenses
actually incurred in attending Board/Committee meetings. A travel fee of $1,000
is also payable to those Non-Executive Directors who require an extra day of
travel to attend any Board/Committee meeting; during 1998, travel fees were paid
as follows: P.H. Pearse, $8,000; Sir George Russell, $6,000; and G. Schulmeyer,
$3,000.
 
SHARE INVESTMENT PLAN FOR DIRECTORS
 
Non-Executive Directors may invest all or part of their fees in Shares through
the Share Investment Plan for Directors.
 
RETIREMENT ARRANGEMENTS
 
Under the Non-Executive Directors' Deferred Share Unit Plan, each Non-Executive
Director is credited with a number of Directors' Deferred Share Units ("DDSUs"),
as determined by the Board. At present, this number has been set at the
equivalent of one DDSU for every $100 of Directors' fees (as described above,
but excluding the travel fees) received by the Director. Until redemption,
additional DDSUs are credited to each Director corresponding to dividends
declared on the Shares. The DDSUs are redeemable only upon termination
(retirement, resignation or death). The amount to be paid by Alcan upon
redemption (which must be on or before 15 December of the calendar year next
following the termination) will be calculated by multiplying the accumulated
balance of DDSUs by the average price of a Share on the Montreal, Toronto and
New York stock exchanges at the time of redemption.
 
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
 
Non-Executive Directors
 
Non-Executive Directors and former Non-Executive Directors are not indebted to
Alcan.
 
Option Loans to Executive Officers
 
The required details with regard to Option Loans given to Executive Officers are
shown in the following table. The aggregate indebtedness of all Executive
Officers and employees and former Executive Officers and employees of Alcan and
its Subsidiaries (including the Named Executive Officers) to Alcan in respect of
Option Loans at 8 February 1999 was $3,810,156.
 
The terms of Option Loans are described on page 19.
 
                                       23
<PAGE>   26
 
           TABLE OF INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
                               UNDER OPTION PLAN
 
<TABLE>
<S>                  <C>                    <C>            <C>              <C>              <C>              <C>
------------------------------------------------------------------------------------------------------------------------------
        Name and Principal Position                                                            Financially
                                                                                 Amount          Assisted
                                                               Largest        Outstanding         Share
                                                                Amount           as at          Purchases
                                                             Outstanding       8 February      During 1998
                                             Involvement     During 1998          1999             (1)          Security for
                                               of Alcan          ($)              ($)              (#)          Indebtedness
------------------------------------------------------------------------------------------------------------------------------
 R.L. Ball           Executive Vice
                     President                  Lender          70,254             0                0               (2)
------------------------------------------------------------------------------------------------------------------------------
 G.P. Batt (3)       Treasurer                  Lender          62,471           62,471           4,000             (2)
------------------------------------------------------------------------------------------------------------------------------
 J. Bougie (4)       President and Chief
                     Executive Officer          Lender         459,342          434,652             0               (2)
------------------------------------------------------------------------------------------------------------------------------
 C. Chamberland      Executive Vice
                     President                  Lender          28,826           23,123             0               (2)
------------------------------------------------------------------------------------------------------------------------------
 E.P. LeBlanc        Executive Vice
                     President                  Lender          52,543           51,260           2,000             (2)
------------------------------------------------------------------------------------------------------------------------------
 G. Ouellet          Vice President             Lender          57,035           54,184             0               (2)
------------------------------------------------------------------------------------------------------------------------------
 E.N. Santos         Executive Vice
                     President                  Lender         265,046          251,096             0               (2)
------------------------------------------------------------------------------------------------------------------------------
 B.W. Sturgell       Executive Vice
                     President                  Lender          45,682           43,366           3,000             (2)
------------------------------------------------------------------------------------------------------------------------------
 S. Thadhani         Executive Vice
                     President                  Lender         116,923          111,077             0               (2)
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) In respect of A Options only.
 
(2) Security for the indebtedness is provided by the deposit of the certificates
    representing the relevant Shares with CIBC Mellon Trust Company, as trustee,
    which holds the certificates registered in its name until full repayment of
    the particular Option Loan has been made to Alcan.
 
(3) G.P. Batt transferred to a Subsidiary during 1998.
 
(4) J. Bougie is a nominee proposed for election as Director.
 
Other Loans to Executive Officers
 
The required details with regard to loans other than Option Loans given to
Executive Officers are shown in the following table. The aggregate indebtedness
of all Executive Officers and employees and former Executive Officers and
employees of Alcan and its Subsidiaries (including the Named Executive Officers)
to Alcan in respect of loans other than Option Loans at 8 February 1999 was
$2,292,464.
 
           TABLE OF INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
                          OTHER THAN UNDER OPTION PLAN
 
<TABLE>
<S>                  <C>                                  <C>            <C>                    <C>
----------------------------------------------------------------------------------------------------------------------
                                                                             Largest Amount       Amount Outstanding
                                                           Involvement        Outstanding               as at
                                                             of Alcan         During 1998          8 February 1999
               Name and Principal Position                                        ($)                    ($)
----------------------------------------------------------------------------------------------------------------------
 C. Carroll          Vice President                           Lender            209,658                209,658
----------------------------------------------------------------------------------------------------------------------
</TABLE>
 
                                       24
<PAGE>   27
 
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
 
Alcan carries insurance covering liability, including defence costs, of
directors and officers of Alcan and its Subsidiaries, incurred as a result of
their acting as such, except in the case of failure to act honestly and in good
faith. The policy provides coverage against certain risks in situations where
Alcan may be prohibited by law from indemnifying the directors or officers. The
policy also reimburses Alcan for certain indemnity payments made by Alcan to
such director or officer, subject to a $10 million deductible in respect of each
insured loss.
 
The premium paid by Alcan for coverage in 1998 was $345,000 and the limit of
insurance is $100 million per occurrence and in the aggregate per year.
 
APPOINTMENT OF AUDITORS
 
At the Meeting, Shareholders will be called upon to appoint Auditors to serve
until the next Annual Meeting of Alcan and to authorize the Directors to fix the
remuneration of the Auditors so appointed.
 
The Board of Directors and Management, on the advice of the Audit Committee,
recommend that PricewaterhouseCoopers LLP (formerly Price Waterhouse), Montreal,
Canada, be appointed as Auditors. Price Waterhouse have been the Auditors of
Alcan since 1936.
 
A representative of PricewaterhouseCoopers LLP will be present at the Meeting
and will have the opportunity to make a statement should he desire to do so. He
will also be available to answer questions.
 
                                       25
<PAGE>   28
 
SPECIAL BUSINESS: AMENDMENT AND RESTATEMENT OF THE SHAREHOLDER RIGHTS PLAN
 
The Shareholders will be asked at the Meeting to adopt a resolution to amend and
restate the existing Shareholder Rights Plan ("Rights Plan") which is set out in
full in the Shareholder Rights Agreement ("Plan Agreement") between Alcan and
CIBC Mellon Trust Company (successor to The Royal Trust Company) as trustee
("Rights Agent") dated 14 December 1989, as subsequently amended. The resolution
is set out in Schedule A hereto, and the complete text of the Plan Agreement
(including the amendments now proposed) is set out in Schedule B hereto.
 
The purpose of the resolution is to enable Alcan to continue to have in place
the protection afforded by a rights plan beyond the expiry of the existing
Rights Plan (14 December 1999). The resolution extends that termination date and
makes the other amendments suitable to the form of plans being adopted by
Canadian companies currently.
 
Passage of the resolution mentioned above will require approval by a majority of
the votes cast on the matter at the Meeting. According to the terms of the Plan
Agreement, any Shareholder who, at the time of the vote, is an Acquiring Person
(as defined in the Plan Agreement) or any person who has made or announced an
intention to make a Take-Over Bid (as defined in the Plan Agreement) will not be
eligible to participate in the vote.
 
At the present time, Alcan has no knowledge of any take-over bid, or any
intended take-over bid, from any person.
 
If the Rights Plan is amended as proposed in the resolution in Schedule A, it
will continue in effect until 1 May 2008, unless terminated earlier in
accordance with its terms. If the said resolution is not adopted, the existing
Rights Plan will remain in effect until 14 December 1999, unless terminated
earlier.
 
The Rights Plan does not in any way alter the financial condition of Alcan or
its current business plans.
 
The Board of Directors has determined that having a rights plan continues to be
in the best interests of Alcan and its Shareholders.
 
Background to the Rights Plan
 
The primary objective of the Rights Plan is to provide the Board with sufficient
time to explore and develop alternatives for maximizing Shareholder value if a
take-over bid is made for Alcan and to provide every Shareholder with an equal
opportunity to participate in such a bid. The Rights Plan encourages a potential
acquiror to proceed either by way of a Permitted Bid (as defined in the Plan
Agreement), which requires the take-over bid to satisfy certain minimum
standards designed to promote fairness, or with the concurrence of the Board.
 
The Board of Directors believes that the current legislation in Canada, which
permits a take-over bid to expire in as little as 21 calendar days after it is
made, does not provide the Board with adequate time to evaluate and respond to a
take-over bid in the best interests of the Shareholders. The key objective of
the Board in a take-over bid context will be to maximize value for Shareholders.
The Rights Plan creates a sufficient opportunity for the Board, in the face of a
take-over bid, to make a proper recommendation to the Shareholders -- whether to
accept the bid, or to negotiate with the bidder for a higher value or to explore
and develop alternatives for maximizing Shareholder value, such as, locating
other potential bidders or to develop a corporate restructuring alternative.
 
As for the Shareholders themselves, a 21-day bid period may not provide
sufficient time to consider a take-over bid and the recommendations of the Board
(including alternatives to the bid) and, thus, to make a fully informed
decision. The Rights Plan helps address these issues.
 
A large percentage of Alcan Shares are currently held in the United States of
America. The Rights Plan is intended to ensure equal treatment of Shareholders
and prevent an acquiror from exploiting differences in Canadian and United
States securities laws in a way that could be detrimental to some Shareholders.
 
While the Rights Plan is intended to regulate certain aspects of take-over bids
for Alcan, it is not intended to deter a bona fide attempt to acquire control of
Alcan if the offer is made fairly. The Rights Plan does not diminish or
otherwise affect the duty of the Board to give due and proper consideration to
any offer that is made and to act honestly, in good faith and in the best
interests of the Shareholders.
 
                                       26
<PAGE>   29
 
The Rights Plan may be terminated by the Board with Shareholder approval through
a redemption process prior to the accumulation of 20% or more of the Shares by
any person or group of persons. The Rights Plan will not interfere with any
amalgamation or other business reorganization approved by the Board. Nor does
the Rights Plan inhibit any Shareholder from utilizing the proxy mechanism of
the Canada Business Corporations Act to promote a change in the management or
direction of Alcan, including the right of holders of not less than 5% of the
outstanding Shares to requisition a meeting of Shareholders for the purpose of
transacting proper corporate business.
 
In contrast to many rights plans adopted in the United States, the Rights Plan
has a Permitted Bid feature which allows a take-over bid to proceed in the face
of the Rights Plan even if the Board does not support the bid, provided that the
bid meets certain minimum specified standards of fairness and disclosure.
Specifically, the Permitted Bid procedure allows persons to make a take-over bid
for all or part of the outstanding Shares, provided it is made to all
Shareholders, and is held open for a specified period longer than the statutory
period required by the Canada Business Corporations Act, which is only 21
calendar days. The Permitted Bid procedure provides Shareholders and the Board
with this additional time to assess a bid properly and to permit alternative
bids to emerge. If more than 50% of the Shares held by parties other than the
bidder, its affiliates and associates are tendered and not withdrawn at the end
of the specified period, the bid may proceed and must be held open for an
additional 10 business days to allow Shareholders who have not tendered their
Shares additional time to do so after having had an opportunity to determine
that the bid will otherwise be successful. This two-stage requirement, which
separates evaluation of the bid from the tender process, helps remove any
element of coercion that might otherwise be present in a one-stage bid process.
 
Amendments Now Proposed
 
The Rights Plan was adopted on 14 December 1989 and has been amended
subsequently, the last amendment being made on 27 April 1995. The following are
the highlights of the amendments which will be proposed to be made to the Rights
Plan at the Meeting:
 
-  the Rights Plan will terminate on 1 May 2008,
 
-  the Rights Plan must be reconfirmed by the Shareholders at the annual
   meetings of the Shareholders in each of the years 2002 and 2005,
 
-  the definition of "Beneficial Owner" will be modified to exclude a person
   holding voting rights over Shares,
 
-  certain residual discretion of the Board will be removed, and
 
-  a Permitted Bid must remain open for 60 calendar days instead of 75 calendar
   days.
 
Prior to the Meeting, Alcan may propose further amendments to the Plan Agreement
which the Board may in good faith deem necessary or desirable. Alcan will issue
a press release relating to any significant amendment so proposed and will
advise the Shareholders of any such amendment at the Meeting.
 
Summary of the Rights Plan (including the amendments now proposed)
 
References in italics to Sections below are to Sections of the Plan Agreement,
the text of which is set out in Schedule B hereto.
 
Pursuant to the Plan Agreement, one right ("Right") to purchase additional
securities, subject to the terms and conditions of the Plan Agreement, has been
issued for each Share outstanding and Rights will likewise be issued in respect
of Shares issued in the future until the Separation Time (as defined below) or
until the termination of the Rights Plan. The Rights are not exercisable until
the Separation Time. (Section 2.01)
 
Until the Separation Time (or earlier termination or expiration of the Rights),
the Rights are evidenced by the certificates for the Shares to which the Rights
attach. The Rights are transferred with, and only with, the associated Shares.
Furthermore, until such time, Share certificates issued will contain a notation
incorporating the Plan Agreement by reference. (Section 2.01)
 
The Rights will separate and trade independently of the Shares after the
Separation Time. (Section 2.01)
 
                                       27
<PAGE>   30
 
Promptly following the Separation Time, separate certificates evidencing the
Rights ("Rights Certificates") will be given to holders of record of Shares as
of the close of business at the Separation Time and such separate Rights
Certificates alone will evidence the Rights. (Section 2.01)
 
The Separation Time is the close of business on the tenth business day after
either the first date that a person has acquired beneficial ownership of 20% or
more of the Shares, or the date of commencement or announcement of a Take-Over
Bid. (Section 1.01)
 
The Exercise Price and the number of Rights outstanding are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Shares,
(ii) upon the grant to Shareholders of certain rights or warrants to subscribe
for the Shares or convertible securities at less than the current market price
of the Shares, or (iii) upon distribution to Shareholders of evidences of
indebtedness or assets (excluding Regular Periodic Cash Dividends as defined in
the Plan Agreement) or of rights or warrants (other than those referred to
above). (Section 2.03)
 
A Flip-In Event occurs when a Person becomes an Acquiring Person. (Section 1.01)
Upon the occurrence of a Flip-In Event, each Right (except for Rights
beneficially owned by an Acquiring Person or a person acting in concert with an
Acquiring Person or certain transferees of an Acquiring Person, which Rights
shall be void) shall constitute the right to receive, upon the exercise thereof
at the then current Exercise Price of the Right, Shares having an aggregate
Market Price on the date of occurrence of such Flip-In Event equal to twice the
Exercise Price. For example, if at the time of the Flip-In Event, the Exercise
Price is $200 and the Shares have a Market Price of $50, the holder of each
Right will be entitled to receive $400 in market value of the Shares (8 Shares)
for $200, i.e. at a 50% discount. (Section 3.01)
 
The Board of Directors may, upon notice delivered to the Rights Agent, determine
to waive the application of the provisions of the Flip-In Event section of the
Plan Agreement to a particular Flip-In Event or any particular acquisition or
other transaction or event that would, but for the waiver, constitute or result
in a Flip-In Event, provided that such waiver shall automatically constitute a
waiver of the application of such provisions to all contemporaneous Flip-In
Events. (Section 5.01)
 
At every third annual meeting following the Meeting, the Board of Directors
shall submit a resolution to the Shareholders for approval ratifying the
continued existence of the Rights Plan. If a majority of the votes cast on such
a resolution is against the continued existence of the Rights Plan, then the
Plan Agreement, the Rights Plan and any outstanding Rights shall be of no
further force or effect. (Section 5.16)
 
Any Person who makes a take-over bid in compliance with the provisions of a
Permitted Bid will not become an Acquiring Person (Section 1.01). The
requirements of a Permitted Bid (Section 6.01) include the following:
 
-  the bid, which may be for all or part of the Shares of a particular class,
   must be made to all holders thereof,
 
-  the bid must remain outstanding for a minimum period of 60 calendar days
   after which period the Shares may be taken up and paid for only if more than
   50% of the Shares held by Independent Shareholders (as defined in the Plan
   Agreement) have been tendered and not withdrawn, and
 
-  if more than 50% of the Shares held by Independent Shareholders have been
   tendered and not withdrawn at the end of the above-mentioned 60-day period,
   the bid must remain open for an additional 10 business days.
 
A competing Permitted Bid may proceed contemporaneously provided it expires no
earlier than the initial Permitted Bid and is outstanding for a minimum period
of 21 calendar days. (Section 6.02)
 
The Company may from time to time supplement or amend the Plan Agreement with
the approval of the Rights Agent but without the consent of the holders of the
Rights or the holders of the Shares in order to correct a clerical or
typographical error or in order to maintain the validity of the Plan Agreement
as a result of a change in applicable legislation or regulation, provided that
such latter change is subsequently approved by the holders of the Shares or the
holders of the Rights, as applicable. (Section 5.04)
 
                                       28
<PAGE>   31
 
Until a Right is exercised, the holder thereof, as such, will have no rights as
a Shareholder including, without limitation, the right to vote or to receive
dividends. (Section 5.07)
 
Tax Consequences
 
For Canadian federal income tax purposes, Alcan has not had any income as a
result of the issuance of the Rights. Under the Income Tax Act (Canada) (the
"Act"), the issuance of the Rights may be a taxable benefit which must be
included in the income of the recipient. However, no amount must be included in
the income of the recipient if the Rights do not have a monetary value at the
date of issue. Alcan views the Rights as currently having negligible monetary
value. A holder of Rights may have income or be subject to withholding tax under
the Act if the Rights become exercisable, are exercised or are otherwise
disposed of. This statement does not address the Canadian income tax
consequences of other events, e.g., separation of the Rights from Shares, a
Flip-In Event, lapse of Alcan's right to redeem the Rights and redemption of the
Rights.
 
For United States federal income tax purposes, the adoption and approval of the
resolution amending and restating the Rights Plan should not be a taxable
transaction to the Shareholders. The United States federal income tax
consequences of other events in connection with the Rights Plan, e.g.,
separation of the Rights from the Shares, a Flip-In Event, lapse of Alcan's
right to redeem the Rights, redemption of the Rights and exercise of the Rights,
are uncertain. The tax consequences, including the likelihood that an event will
be a taxable transaction (which, in certain cases, is probable) or, if taxable,
whether it is a distribution or a sale or exchange of a Right, can vary
depending on the facts and circumstances at the time of the event.
 
Shareholders should consult their own tax advisors regarding the consequences of
approval of the resolution and of receiving, holding, exercising, exchanging or
otherwise disposing of the Rights.
 
APPROVAL OF BOARD OF DIRECTORS
 
The Board of Directors has approved the contents of this Management Proxy
Circular and its issue to Shareholders.
                                                                     (Signature)
 
                                                                        P.K. Pal
                                                                 Vice President,
                                               Chief Legal Officer and Secretary
 
                                       29
<PAGE>   32
 
                                                                      SCHEDULE A
 
            AMENDMENT AND RESTATEMENT OF THE SHAREHOLDER RIGHTS PLAN
 
THAT, the Shareholder Rights Plan as amended and restated in its entirety in
Schedule B of the Management Proxy Circular dated 3 March 1999, which reproduces
the entire Shareholder Rights Agreement between the Company and CIBC Mellon
Trust Company (successor to The Royal Trust Company), be and is hereby approved.
 
                      ------------------------------------
 
                                       30
<PAGE>   33
 
                                                                      SCHEDULE B
 
                          SHAREHOLDER RIGHTS AGREEMENT
 
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                          <C>
ARTICLE 1 -- INTERPRETATION
1.01 Definitions............................................      32
1.02 Headings...............................................      39
1.03 Extended Meanings......................................      40
1.04 Currency...............................................      40
1.05 Schedule...............................................      40
1.06 Language Clause........................................      40
1.07 Acting Jointly or in Concert...........................      40
1.08 As Now Enacted.........................................      40
ARTICLE 2 -- THE RIGHTS
2.01 Initial Exercise Price, Exercise of Rights and
  Detachment of Rights......................................      40
2.02 Legend on Common Share Certificates....................      42
2.03 Adjustments............................................      43
2.04 Date on Which Exercise is Effective....................      46
2.05 Execution, Authentication, Delivery and Dating of
  Rights Certificates.......................................      46
2.06 Registration of Rights.................................      46
2.07 Mutilated, Destroyed, Lost and Stolen Rights
  Certificates..............................................      47
2.08 Persons Deemed Owners..................................      47
2.09 Delivery and Cancellation of Certificates..............      48
2.10 Agreement of Rights Holders............................      48
ARTICLE 3 -- EFFECT OF CERTAIN TRANSACTIONS
3.01 Flip-In Event..........................................      48
ARTICLE 4 -- THE RIGHTS AGENT
4.01 General................................................      49
4.02 Merger or Consolidation or Change of Name of the Rights
  Agent.....................................................      50
4.03 Entitlements of the Rights Agent.......................      50
4.04 Change of the Rights Agent.............................      52
ARTICLE 5 -- MISCELLANEOUS
5.01 Redemption, Waiver and Termination.....................      52
5.02 Expiration.............................................      53
5.03 Issuance of New Rights Certificates....................      53
5.04 Supplements and Amendments.............................      53
5.05 Fractional Rights and Fractional Shares................      54
5.06 Rights of Action.......................................      55
5.07 Holder of Rights Not Deemed to be a Shareholder........      55
5.08 Notices................................................      55
5.09 Costs of Enforcement...................................      56
5.10 Benefit of the Agreement...............................      56
5.11 Governing Law..........................................      56
5.12 Counterparts...........................................      56
5.13 Severability...........................................      56
5.14 Determinations and Actions by the Board................      57
5.15 Effective Date.........................................      57
5.16 Re-confirmation after Three Years......................      57
5.17 Regulatory Approvals...................................      57
5.18 Declaration as to Non-Canadian Holders.................      57
ARTICLE 6 -- PERMITTED BIDS
6.01 Permitted Bids.........................................      58
6.02 Competing Permitted Bids...............................      58
Schedule 1..................................................      60
</TABLE>
 
                                       31
<PAGE>   34
 
                          SHAREHOLDER RIGHTS AGREEMENT
 
THIS AGREEMENT made as of 14 December 1989, amended on 8 February 1990 and 5
March 1990, approved by the Shareholders on 26 April 1990, further amended and
restated on 2 March 1995 and 24 April 1995, reconfirmed by the Shareholders on
27 April 1995 and amended and restated on 22 April 1999
 
B E T W E E N:
 
           ALCAN ALUMINIUM LIMITED, a corporation incorporated under
           the laws of Canada (hereinafter referred to as the
           "Corporation"),
                                                   OF THE FIRST PART,
 
A N D:
 
           CIBC MELLON TRUST COMPANY, a trust company incorporated
           under the laws of Canada (hereinafter referred to as the
           "Rights Agent"),
                                                   OF THE SECOND PART
 
WITNESSES that:
 
WHEREAS the Board has determined that it is advisable for the Corporation to
adopt and maintain a shareholder rights plan inter alia in order to (i) provide
a framework in which Take-Over Bids for the Corporation can be made for the
Voting Shares of the Corporation including providing the Board with sufficient
time to explore and develop alternatives, (ii) facilitate the maximization of
shareholder values if a substantial portion of the Voting Shares is to be
acquired by any Person, and (iii) protect the Corporation and its shareholders
from abusive acquisition tactics or acquisitions which may not be in the best
interests of the Corporation;
 
AND WHEREAS it is not the intention of the Board to adopt the Rights Plan as a
means of preventing or deterring any Person from seeking to acquire the Voting
Shares, provided they do so fairly, or of foreclosing the ability of the Board
to take any action that in its discretion it considers reasonable in the
circumstances of any such transaction;
 
AND WHEREAS, in order to implement the Rights Plan, the Board authorized and
declared a distribution of one Right effective 8:15 p.m. (Eastern Standard Time)
14 December 1989 ("Record Time") in respect of each Common Share outstanding as
at the Record Time and has authorized the issuance of one Right in respect of
each Common Share issued after such date and prior to the earlier of the
Separation Time and the Expiration Time;
 
AND WHEREAS each Right entitles the holder thereof, after the Separation Time
but prior to the Expiration Time, to purchase securities of the Corporation
pursuant to the terms and subject to the conditions set forth herein;
 
AND WHEREAS the Corporation desires to appoint the Rights Agent to act on behalf
of the Corporation in connection with the issuance, transfer, exchange and
replacement of Rights Certificates, the exercise of the Rights and the other
matters relating to the Corporation referred to herein and to act as the trustee
for the holders of the Rights in connection with the promise of the Corporation
herein to issue Rights Certificates to the Rights Agent for distribution to the
holders of Common Shares after the Separation Time, and the Rights Agent is
willing to so act;
 
NOW THEREFORE in consideration of the premises and the agreements herein
contained the parties hereto agree as follows:
 
                          ARTICLE 1 -- INTERPRETATION
 
1.01  DEFINITIONS
 
For purposes of this Agreement, the following terms have the meanings indicated:
 
                                       32
<PAGE>   35
 
(a)   "Agreement" means this agreement and all amendments made hereto by written
      agreement between the Corporation and the Rights Agent.
 
(b)   "Acquiring Person" means any Person (other than the Corporation or any
      Subsidiary of the Corporation) who is a Beneficial Owner of 20% or more of
      the outstanding Voting Shares. Notwithstanding the foregoing, no Person
      shall become an "Acquiring Person"
 
      (i)  (A) as a result of the purchase, redemption or other acquisition of
               Voting Shares by the Corporation which, by reducing the number of
               Voting Shares then outstanding, increases the proportionate
               number of shares Beneficially Owned by such Person to 20% or more
               of the Voting Shares then outstanding;
 
           (B) as a result of share acquisitions made pursuant to a Permitted
               Bid or Competing Permitted Bid;
 
           (C) as a result of share acquisitions made pursuant to a Permitted
               Acquisition;
 
           (D) as a result of an Exempt Acquisition; or
 
           (E) as a result of a Convertible Security Acquisition;
 
      provided, however, that if a Person becomes the Beneficial Owner of 20% or
      more of the Voting Shares then outstanding as a result of a purchase,
      redemption or other acquisition of Voting Shares by the Corporation as
      provided for in clause (A) above, or as a result of a Permitted Bid or
      Competing Permitted Bid as provided for in clause (B) above, or as a
      result of a Permitted Acquisition as provided for in clause (C) above, or
      as a result of the waiver of the application of Section 3.01 pursuant to
      Section 5.01(2) as provided for in clause (D) above, or as a result of a
      Convertible Security Acquisition as provided for in clause (E) above, or
      as a result of any combination of acquisitions referred to in clauses (A)
      to (E) above, and after such acquisition or acquisitions such Person
      becomes the Beneficial Owner of more than an additional 1% of the Voting
      Shares then outstanding other than pursuant to clauses (A), (B), (C), (D)
      or (E) above or any combination thereof, such Person shall thereupon
      immediately be deemed to be an "Acquiring Person";
 
      (ii)  as a result of such person (a "Grandfathered Person") being the
         Beneficial Owner of 20% or more of the outstanding Voting Shares of the
         Corporation determined as at the Record Time provided, however, that
         this exception shall not be, and shall cease to be, applicable to such
         Grandfathered Person in the event that such Grandfathered Person shall,
         after the Record Time, become the Beneficial Owner of any additional
         Voting Shares of the Corporation that increase its Beneficial Ownership
         of Voting Shares by more than 1% of the number of Voting Shares
         outstanding as at the Record Time, other than as a result of a
         Permitted Bid, a Competing Permitted Bid, a Permitted Acquisition or
         any Take-Over Bid in respect of which a waiver is, or is deemed to have
         been, granted under Section 5.01(2);
 
      (iii) for a period of ten calendar days after the Disqualification Date
         (as defined below), where such Person becomes the Beneficial Owner of
         20% or more of the outstanding Voting Shares as a result of such Person
         becoming disqualified from relying on Section 1.01(e)(v) solely because
         such Person or the Beneficial Owner of such Voting Shares is making or
         has announced an intention to make a Take-Over Bid, either alone or by
         acting jointly or in concert with any other Person. For the purposes of
         this definition, "Disqualification Date" means the first date of public
         announcement that any Person is making or has announced an intention to
         make a Take-Over Bid;
 
      (iv) being an underwriter or member of a banking or selling group that
         becomes the Beneficial Owner of 20% or more of the Voting Shares in
         connection with a distribution of securities of the Corporation.
 
(c)   "Affiliate" when used to indicate a relationship with a specified Person,
      shall mean a Person that controls, or is controlled by, or is under common
      control with, such specified Person.
 
                                       33
<PAGE>   36
 
(d)   "Associate" means, when used to indicate a relationship with a specified
      Person, a spouse of that Person or any Person with whom that Person is
      living in a conjugal relationship outside marriage or a child of that
      Person or a relative of that Person who has the same residence as that
      Person.
 
(e)   A Person shall be deemed to be the "Beneficial Owner" of and to have
      "Beneficial Ownership" of and to "Beneficially Own" any securities which:
 
      (i)  such Person or any of such Person's Affiliates or Associates owns at
         law or in equity;
 
      (ii)  such Person or any of such Person's Affiliates or Associates has the
         right to become the owner of at law or in equity (whether such right is
         exercisable immediately or within a period of 60 calendar days
         thereafter and whether or not on condition or on the happening of any
         contingency), (A) upon the exercise of any Convertible Securities or
         (B) pursuant to any agreement, arrangement, pledge or understanding,
         whether or not in writing, (other than (x) customary agreements with
         and between underwriters and/or banking group members and/or selling
         group members with respect to a public offering or private placement of
         securities and (y) pledges of securities in the ordinary course of
         business) or upon the exercise of any conversion right, exchange right,
         share purchase right (other than the Rights), warrant or option; or
 
      (iii) without limiting the generality of the foregoing, are beneficially
         owned within the meaning of paragraphs (i) and (ii) of this definition
         by any other Person with which such Person is acting jointly or in
         concert;
 
      provided, however, that a Person shall not be deemed to be the "Beneficial
      Owner" of or to have "Beneficial Ownership" of or to "Beneficially Own"
      any security:
 
      (iv) where such security has been, or has agreed to be, deposited or
         tendered pursuant to a Lock-up Agreement, or is otherwise deposited or
         tendered, to any Take-Over Bid made by such Person or by any of such
         Person's Affiliates or Associates or made by any Person acting jointly
         or in concert with such Person until such deposited or tendered
         security has been taken up and paid for, whichever shall first occur;
 
      (v)  where such Person, any of such Person's Affiliates or Associates or
         any other Person acting jointly or in concert with such Person holds
         such security provided that:
 
         (A) the ordinary business of any such Person (the "Investment Manager")
              includes the management of investment funds for others (which
              others, for greater certainty, may include or be limited to one or
              more employee benefit plans or pension plans) and such security is
              held by the Investment Manager in the ordinary course of such
              business in the performance of such Investment Manager's duties
              for the account of any other Person (a "Client");
 
         (B) such Person (the "Trust Company") is licensed to carry on the
              business of a trust company under applicable laws and, as such,
              acts as trustee or administrator or in a similar capacity in
              relation to the estates of deceased or incompetent Persons (each
              an "Estate Account") or in relation to other accounts (each an
              "Other Account") and holds such security in the ordinary course of
              such duties for the estate of any such deceased or incompetent
              Person or for such other accounts;
 
         (C) such Person is established by statute for purposes that include,
              and the ordinary business or activity of such Person (the
              "Statutory Body") includes, the management of investment funds for
              employee benefit plans, pension plans, insurance plans or various
              public bodies;
 
         (D) such Person (the "Administrator") is the administrator or trustee
              of one or more pension funds or plans (a "Plan"), or is a Plan,
              registered under the laws of Canada or any Province thereof or the
              laws of the United States of America or any State thereof;
 
         provided, in any of the above cases, that the Investment Manager, the
         Trust Company, the Statutory Body, the Administrator or the Plan, as
         the case may be, is not then making a Take-Over Bid or has not then
         announced an intention to make a Take-over Bid alone or
                                       34
<PAGE>   37
 
         acting jointly or in concert with any other Person, other than an Offer
         to Acquire Voting Shares or other securities (x) pursuant to a
         distribution by the Corporation (y) by means of a Permitted Bid or (z)
         by means of ordinary market transactions (including prearranged trades
         entered into in the ordinary course of business of such Person)
         executed through the facilities of a stock exchange or organized
         over-the-counter market;
 
      (vi) where such Person is:
 
         (A) a Client of the same Investment Manager as another Person on whose
              account the Investment Manager holds such security,
 
         (B) an Estate Account or an Other Account of the same Trust Company as
              another Person on whose account the Trust Company holds such
              security, or
 
         (C) a Plan with the same Administrator as another Plan on whose account
              the Administrator holds such security;
 
      (vii) where such Person is:
 
         (A) a Client of an Investment Manager and such security is owned at law
              or in equity by the Investment Manger,
 
         (B) an Estate Account or an Other Account of a Trust Company and such
              security is owned at law or in equity by the Trust Company, or
 
         (C) a Plan and such security is owned at law or in equity by the
              Administrator of the Plan; or
 
      (viii) where such Person is a registered holder of such security as a
         result of carrying on the business of, or acting as a nominee of, a
         securities depositary.
 
      For the purposes of this Agreement, in determining the percentage of the
      outstanding Voting Shares with respect to which a Person is the Beneficial
      Owner, all Voting Shares of which such Person is or is deemed to be the
      Beneficial Owner shall be deemed to be outstanding.
 
(f)  "Board" means the board of directors of the Corporation.
 
(g)  "Business Day" means any day, other than a Saturday or Sunday, on which
      banks are generally open for business in the City of Montreal.
 
(h)  "Canadian-U.S. Exchange Rate" means, on any date, the inverse of the
      U.S.-Canadian Exchange Rate in effect on such date.
 
(i)  "Canadian Dollar Equivalent" of any amount which is expressed in United
      States dollars means, on any date, the Canadian dollar equivalent of such
      amount determined by multiplying such amount by the U.S.-Canadian Exchange
      Rate in effect on such date.
 
(j)  "close of business" means, with respect to any date, the time on such date
      at which the offices of the Rights Agent in the City of Montreal are,
      after having been open to the public for business, closed to the public.
 
(k)  "Common Shares", when used with reference to the Corporation, means the
      common shares in the capital of the Corporation and, when used with
      reference to any Person other than the Corporation, means the class of
      shares in the capital of such other Person with the greatest voting power
      per share.
 
(l)  "Competing Permitted Bid" has the meaning set out in Section 6.02.
 
(m) "controlled": a corporation is "controlled" by another Person if:
 
      (i)  securities entitled to vote in the election of directors carrying
         more than 50% of the votes for the election of directors are held,
         directly or indirectly, by or on behalf of the other person; and
 
      (ii)  the votes carried by such securities are entitled, if exercised, to
         elect a majority of the board of directors of such corporation;
 
      and "controls", "controlling" and "under common control with" shall be
      interpreted accordingly.
 
                                       35
<PAGE>   38
 
(n)  "Convertible Securities" means at any time:
 
      (i)  any right (contractual or otherwise and regardless of whether such
         right constitutes a security) to acquire Voting Shares from the
         Corporation; and
 
      (ii)  any securities issued by the Corporation from time to time (other
         than a Right) carrying any exercise, conversion or exchange right;
 
      which is then exercisable or exercisable within a period of 60 calendar
      days from that time, pursuant to which the holder thereof may acquire
      Voting Shares or other securities which are convertible into, exercisable
      or exchangeable for Voting Shares (in each case, whether such right is
      then exercisable or exercisable within a period of 60 calendar days from
      that time and whether or not on condition or the happening of any
      contingency).
 
(o)   "Convertible Security Acquisition" means the acquisition of Voting Shares
      upon the exercise of a Convertible Security received by a Person pursuant
      to a Permitted Acquisition.
 
(p)   "Dividend Reinvestment Acquisition" shall mean an acquisition of Voting
      Shares of any class pursuant to a Dividend Reinvestment Plan.
 
(q)   "Dividend Reinvestment Plan" means a regular dividend reinvestment or
      other plan of the Corporation made available by the Corporation to holders
      of its securities where such plan permits the holder to direct that some
      or all of:
 
      (i)  dividends paid in respect of shares of any class of the Corporation;
 
      (ii)  proceeds of redemption of shares of the Corporation;
 
      (iii) interest paid on evidences of indebtedness of the Corporation; or
 
      (iv) optional cash payments;
 
      be applied to the purchase from the Corporation of Voting Shares.
 
(r)   "Election to Exercise" has the meaning set out in Section 2.01(4).
 
(s)   "Exempt Acquisition" means a share acquisition in respect of which the
      Board has waived the application of Section 3.01 pursuant to the
      provisions of Sections 5.01(2).
 
(t)   "Exercise Price" means, as of any date, the price at which a holder may
      purchase the securities issuable upon the exercise of one Right which,
      until the adjustment thereof in accordance with the provisions hereof,
      shall equal $200.
 
(u)   "Expansion Factor" has the meaning set out in Section 2.03(2)(e).
 
(v)   "Expiration Time" means the earlier of:
 
      (i)  the Termination Time, or
 
      (ii)  subject to Sections 5.15 and 5.16, the close of business on May 1,
         2008 .
 
(w)  "Flip-In Event" means a transaction or event in which any Person becomes an
      Acquiring Person.
 
(x)   "holder" has the meaning set out in Section 2.08.
 
(y)   "Independent Shareholders" means holders of Voting Shares, but shall not
      include any Acquiring Person or any Offeror (including an Offeror who is
      making a Permitted Bid or Competing Permitted Bid) other than any Person
      who by virtue of Section 1.01 (e) (v) is not deemed to Beneficially Own
      the Voting Shares held by such Person, any Affiliate or Associate of any
      such Acquiring Person or Offeror or any Person acting jointly or in
      concert with such Acquiring Person or Offeror, or Persons with rights or
      powers under any employee stock ownership plans, benefit plans, deferred
      profit sharing and any other similar plan or trust for the benefit of
      employees of the Corporation or a Subsidiary of the Corporation, unless
      the beneficiaries of such plan or trust direct the manner in which such
      Voting Shares are to be voted or direct whether the Voting Shares are to
      be tendered to a Take-Over Bid.
 
(z)   "Lock-up Agreement" means an agreement between an Offeror, any of its
      Affiliates or Associates or any other Person acting jointly or in concert
      with the Offeror and a Person (the "Locked-up
 
                                       36
<PAGE>   39
 
      Person") who is not an Affiliate or Associate of the Offeror or a Person
      acting jointly or in concert with the Offeror whereby the Locked-up Person
      agrees to deposit or tender the Voting Shares held by the Locked-up Person
      to the Offeror's Take-Over Bid or to any Take-Over Bid made by any of the
      Offeror's Affiliates or Associates or made by any other Person acting
      jointly or in concert with the Offeror, where the agreement permits the
      Locked-up Person to withdraw the Voting Shares from the agreement in order
      to tender or deposit the Voting Shares to another Take-Over Bid that
      contains an offering price for each Voting Share that is at least 5%
      higher than the offering price contained in or proposed to be contained in
      the Take-Over Bid that the Locked-up Person has agreed to deposit or
      tender Voting Shares pursuant to the Lock-up Agreement.
 
(aa) "Market Price" per share of any securities on any date of determination
      shall mean the average of the daily Closing Prices Per Share of such
      securities (determined as described below) on each of the 20 consecutive
      Trading Days through and including the Trading Day immediately preceding
      such date; provided, however, that if an event of a type analogous to any
      of the events described in Section 2.03 hereof shall have caused the
      closing prices used to determine the Market Price on any Trading Day not
      to be fully comparable with the closing price on such date of
      determination or, if the date of determination is not a Trading Day, on
      the immediately preceding Trading Day, each such closing price so used
      shall be appropriately adjusted in a manner analogous to the applicable
      adjustment provided for in Section 2.03 hereof in order to make it fully
      comparable with the closing price on such date of determination or, if the
      date of determination is not a Trading Day, on the immediately preceding
      Trading Day. The "Closing Price Per Share" of any securities on any date
      shall be:
 
      (i)  the closing board lot sale price or, if such price is not available,
         the average of the closing bid and asked prices, for each share as
         reported in the principal consolidated transaction reporting system
         with respect to securities listed or admitted to trading on The Toronto
         Stock Exchange, or if not so listed or admitted to trading, The
         Montreal Exchange;
 
      (ii)  if the securities are not listed or admitted to trading on The
         Toronto Stock Exchange or The Montreal Exchange, the last sale price,
         regular way, or, in the case no such sale takes place on such date, the
         average of the closing bid and asked prices, regular way, for each
         share of such securities as reported in the principal consolidated
         transaction reporting system with respect to securities listed or
         admitted to trading on the New York Stock Exchange;
 
      (iii) if for any reason none of such prices is available on such day or
         the securities are not listed or admitted to trading on any of The
         Toronto Stock Exchange, The Montreal Exchange or the New York Stock
         Exchange, the average of the high bid and low asked prices for each
         share of such securities in the over-the-counter market if such high
         bid and low asked prices are regularly published in a newspaper or
         business or financial publication of regular or paid circulation; or
 
      (iv) if on any such date the securities are not quoted by any such
         organization, the average of the closing bid and asked prices as
         furnished by a professional market maker making a market in the
         securities;
 
      provided, however, that if on any such date the securities are not traded
      in the over-the-counter market, the closing price per share of such
      securities on such date shall mean the fair value per share of securities
      on such date as determined by a nationally or internationally recognized
      Canadian investment dealer (or investment banker) with respect to the fair
      value per share of such securities. The Market Price shall be expressed in
      United States dollars and if initially determined in respect of any day
      forming part of the 20 consecutive Trading Day period in question in
      Canadian dollars, such amount shall be translated into United States
      dollars at the U.S. Dollar Equivalent thereof on the relevant Trading Day.
 
(bb) "Offer to Acquire" includes:
 
      (i)  an offer to purchase, or a solicitation of an offer to sell, Voting
         Shares, and
 
      (ii)  an acceptance of an offer to sell Voting Shares, whether or not such
         offer to sell has been solicited,
                                       37
<PAGE>   40
 
      or any combination thereof, and the Person accepting an offer to sell
      shall be deemed to be making an Offer to Acquire to the Person that made
      the offer to sell.
 
(cc)  "Offeror" means any Person who has announced an intention to make or who
      is making, but has not completed, a Take-Over Bid (including a Permitted
      Bid or a Competing Bid) but only so long as the Take-Over Bid so made or
      announced has not been withdrawn or terminated or has not expired.
 
(dd) "Offeror's Securities" means Voting Shares Beneficially Owned on the date
      of an Offer to Acquire by an Offeror.
 
(ee) "Permitted Acquisition" means an acquisition by a Person of Voting Shares
      pursuant to:
 
      (i)  a Dividend Reinvestment Acquisition;
 
      (ii)  a stock dividend, stock split or other event in respect of
         securities of the Corporation of one or more particular classes or
         series pursuant to which such Person becomes the Beneficial Owner of
         Voting Shares on the same pro rata basis as all other holders of
         securities of the particular class, classes or series;
 
      (iii) the acquisition or the exercise by the Person of only those rights
         to purchase Voting Shares distributed to that Person in the course of a
         distribution to all holders of securities of the Corporation of one or
         more particular classes or series pursuant to a rights offering or
         rights offering prospectus; or
 
      (iv) a distribution by the Corporation of Voting Shares or Convertible
         Securities (and the conversion or exchange of such), made pursuant to a
         prospectus or by way of a private placement, provided that the Person
         does not thereby acquire a greater percentage of such Voting Shares, or
         securities convertible into or exchangeable for Voting Shares, so
         offered than the Person's percentage of Voting Shares Beneficially
         Owned immediately prior to such acquisition.
 
(ff)   "Permitted Bid" has the meaning set out in Section 6.01.
 
(gg) "Person" includes any individual, partnership, association, body corporate,
      unincorporated syndicate, unincorporated organization, trust, trustee,
      executor, administrator or other legal representative or entity and any
      successor thereto.
 
(hh) "Record Time" has the meaning ascribed to that term in the third recital
      hereto.
 
(ii)   "Regular Periodic Cash Dividend" means cash dividends declared payable on
      the Common Shares of the Corporation and paid at regular intervals in any
      fiscal year of the Corporation to the extent that such cash dividends do
      not in any fiscal year exceed, in the aggregate, the greatest of:
 
      (i)  200% of the aggregate amount of cash dividends declared payable by
         the Corporation on its Common Shares in its immediately preceding
         fiscal year,
 
      (ii)  300% of the average of the aggregate amounts of cash dividends
         declared payable by the Corporation on its Common Shares in its three
         immediately preceding fiscal years, and
 
      (iii) 100% of the aggregate consolidated net income of the Corporation,
         before extraordinary items, for its immediately preceding fiscal year.
 
(jj)   "Right" means the right of each holder of Common Shares to purchase
      additional securities upon and subject to the terms and conditions hereof.
 
(kk)  "Rights Agent" means CIBC Mellon Trust Company or any successor thereto
      appointed pursuant to Section 4.04.
 
(ll)   "Rights Certificate" has the meaning set out in Section 2.01(3)(c).
 
(mm) "Rights Plan" means the shareholder rights plan established hereby.
 
(nn) "Rights Register" has the meaning set out in Section 2.06(1).
 
(oo) "Rights Registrar" has the meaning set out in Section 2.06(1).
 
(pp) "Separation Time" means the close of business on the tenth Business Day
      after the earliest of:
                                       38
<PAGE>   41
 
      (i)  the Stock Acquisition Date;
 
      (ii)  the date of the commencement of, or the first public announcement of
         the intent of any Person (other than a Person making a Permitted Bid or
         Competing Permitted Bid or the Corporation or any Subsidiary of the
         Corporation) to commence a Take-Over Bid (other than a Permitted Bid or
         a Competing Permitted Bid, as the case may be); and
 
      (iii) the date on which a Permitted Bid or Competing Bid ceases to qualify
         as such or on such later day as the Board shall determine acting in
         good faith; provided that, if any such Take-Over Bid expires, is
         cancelled, terminated or otherwise withdrawn prior to the Separation
         Time, such Take-Over Bid shall be deemed, for the purposes of this
         definition, never to have been made.
 
(qq) "Stock Acquisition Date" means the first date of public announcement by the
      Corporation or an Acquiring Person that an Acquiring Person has become
      such.
 
(rr)  "Subsidiary": a corporation shall be a Subsidiary of another corporation
      if:
 
      (i)  it is controlled by:
 
         (A) that other, or
 
         (B) that other and one or more corporations each of which is controlled
              by that other, or
 
         (C) two or more corporations each of which is controlled by that other,
              or
 
      (ii)  it is a Subsidiary of a corporation that is that other's Subsidiary.
 
(ss)  "Take-Over Bid" means an Offer to Acquire Voting Shares where the Voting
      Shares subject to the Offer to Acquire, together with the Offeror's
      Securities, constitute in the aggregate 20% or more of the outstanding
      Voting Shares at the date of the Offer to Acquire.
 
(tt)   "Termination Time" means the time at which the right to exercise the
      Rights shall terminate pursuant to Section 5.01 hereof.
 
(uu) "Trading Day", when used with respect to any securities, shall mean a day
      on which the principal securities exchange in Canada or the United States
      of America on which such securities are listed or admitted to trading is
      open for the transaction of business or, if the securities are not listed
      or admitted to trading on any securities exchange in Canada or the United
      States of America, a Business Day.
 
(vv)  "U.S.-Canadian Exchange Rate" means, on any date:
 
      (i)  if on such date the Bank of Canada sets a noon spot rate of exchange
         for the conversion of United States dollars into Canadian dollars, such
         rate, or
 
      (ii)  in any other case, the rate for the conversion of United States
         dollars into Canadian dollars as determined by the Board acting in good
         faith.
 
(ww) "U.S. Dollar Equivalent" of any amount which is expressed in Canadian
      dollars means, on any date, the United States dollar equivalent of such
      amount determined by multiplying such amount by the Canadian-U.S. Exchange
      Rate in effect on such date.
 
(xx) "Voting Shares" means the Common Shares of the Corporation and any other
      shares in the capital of the Corporation entitled to vote generally in the
      election of directors.
 
1.02  HEADINGS
 
The division of this Agreement into Articles and Sections and the insertion of
headings and a table of contents are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles and
Sections are to Articles and Sections of this Agreement.
 
                                       39
<PAGE>   42
 
1.03  EXTENDED MEANINGS
 
In this Agreement words importing the singular number only shall include the
plural and vice versa and words importing the masculine shall include the
feminine gender and vice versa.
 
1.04  CURRENCY
 
All references to currency herein are to lawful money of the United States of
America unless otherwise specified.
 
1.05  SCHEDULE
 
The form of the Rights Certificate is annexed hereto as Schedule 1 and
incorporated by reference and deemed to be a part hereof.
 
1.06  LANGUAGE CLAUSE
 
Les parties aux presentes ont exige que la presente convention ainsi que tous
les documents et avis qui s'y rattachent et/ou qui en decouleront soient rediges
en langue anglaise. The parties hereto have required that this Agreement and all
documents and notices related thereto or resulting therefrom be drawn up in
English.
 
1.07  ACTING JOINTLY OR IN CONCERT
 
For purposes of this Agreement, a Person is acting jointly or in concert with
every Person who is a party to any agreement, commitment or understanding,
whether formal or informal, with the first Person or any Associate or Affiliate
thereof for the purpose of acquiring or offering to acquire Voting Shares (other
than customary agreements with and between underwriters and/or banking group
members and/or selling group members with respect to a public offering or
private placement of securities or pledges of securities in the ordinary course
of business).
 
1.08  AS NOW ENACTED
 
For the purposes of this Agreement, references to statutes, as now enacted,
shall mean as in force and effect on April 22, 1999.
 
                            ARTICLE 2 -- THE RIGHTS
 
2.01  INITIAL EXERCISE PRICE, EXERCISE OF RIGHTS AND DETACHMENT OF RIGHTS
 
(1)   Subject to the provisions hereof including, without limiting the
      generality of the foregoing, Section 2.03, each Common Share now or, until
      the earlier of the Separation Time and the Expiration Time, hereafter
      issued shall have one Right associated therewith. Subject to the
      provisions hereof and subject to adjustment as herein set forth, each
      Right shall entitle the holder thereof, after the Separation Time, to
      purchase one Common Share for the Exercise Price or its Canadian Dollar
      Equivalent. Notwithstanding any other provision of this Agreement, any
      Rights held by the Corporation or by any of its Subsidiaries or
      Beneficially Owned by an Acquiring Person shall be void.
 
(2)   Until the Separation Time:
 
      (a)  no Right shall be exercisable and no Right may be exercised,
 
      (b)  each Right shall be evidenced by the certificate for the associated
         Common Share, and
 
      (c)  each Right shall be transferable only together with, and shall be
         transferred by a transfer of, such associated Common Share.
 
(3)   After the Separation Time but prior to the Expiration Time the Rights:
 
      (a)  may be exercised in accordance with the provisions hereof, and
 
      (b)  shall be transferable independently of the Common Shares.
 
      Promptly following the Separation Time the Corporation will prepare and
      the Rights Agent shall give to each holder of Common Shares of record as
      of the Separation Time (other than an
                                       40
<PAGE>   43
 
      Acquiring Person and, in respect of any Rights Beneficially Owned by such
      Acquiring Person which are not held of record by such Acquiring Person,
      the holder of record of such Rights (a "Nominee")),
 
      (c)  a certificate (a "Rights Certificate") substantially in the form
         annexed hereto as Schedule 1 appropriately completed, representing the
         number of Rights held by such holder as at the Separation Time and
         having such marks of identification or designation and such legends,
         summaries or endorsements printed thereon as the Corporation may deem
         appropriate and as are not inconsistent with the provisions of this
         Agreement, or as may be required to comply with any law or with any
         rule or regulation made pursuant thereto or with any rule or regulation
         of any stock exchange or quotation system on which the Rights may from
         time to time be listed or traded, or to conform to usage, and
 
      (d)  a disclosure statement describing the Rights.
 
(4)   Rights may be exercised on any Business Day after the Separation Time and
      prior to the Expiration Time by submitting to the Rights Agent the Rights
      Certificate evidencing such Rights with an election to exercise such
      Rights (an "Election to Exercise") substantially in the form attached to
      the Rights Certificate duly completed and accompanied by payment by
      certified cheque or money order payable to the order of the Corporation of
      a sum equal to the Exercise Price multiplied by the number of Rights being
      exercised and a sum sufficient to cover any transfer tax or charge which
      may be payable in respect of any transfer involved in the transfer or
      delivery of Rights Certificates or the issuance or delivery of
      certificates for Common Shares in a name other than that of the holder of
      the Rights being exercised.
 
(5)   Upon receipt of a Rights Certificate together with a duly completed
      Election to Exercise and the payments provided for in Section 2.01(4), the
      Rights Agent (unless otherwise instructed by the Corporation in the event
      that the Corporation is of the opinion that the Rights cannot be exercised
      in accordance with this Agreement) shall thereupon promptly:
 
      (a)  requisition from the Corporation or its transfer agent for Common
         Shares, certificates for the number of Common Shares to be purchased;
 
      (b)  after receipt of such Common Share certificates, remit the payments
         provided for in Section 2.01(4) to the Corporation and deliver the
         share certificates to or to the order of the registered holder of such
         Rights Certificate, registered in such name or names as may be
         designated by such holder;
 
      (c)  when appropriate, requisition from the Corporation the amount of cash
         to be paid in lieu of issuing fractional Common Shares; and
 
      (d)  tender to the Corporation all payments received on exercise of the
         Rights.
 
(6)   If the holder of any Rights exercises less than all the Rights evidenced
      by such holder's Rights Certificate, a new Rights Certificate evidencing
      the remaining unexercised Rights shall be issued by the Rights Agent to
      such holder or to such holder's duly authorized assigns.
 
(7)   The Corporation shall:
 
      (a)  promptly deliver the share certificates requisitioned by the Rights
         Agent pursuant to Section 2.01(5)(a) to the Rights Agent;
 
      (b)  take all such action as may be necessary and reasonably within its
         power to ensure that all Common Shares delivered upon the exercise of
         the Rights shall, at the time of delivery of the certificates for such
         shares (subject to payment of the Exercise Price), be duly and validly
         authorized, executed, issued and delivered as fully paid and
         non-assessable shares;
 
      (c)  take all such action as may be necessary and reasonably within its
         power to comply with the applicable requirements of securities laws in
         Canada and the United States of America in connection with the issuance
         and delivery of the Rights Certificates and the issuance of Common
         Shares upon the exercise of the Rights;
 
                                       41
<PAGE>   44
 
      (d)  use reasonable efforts to cause all Common Shares issued upon the
         exercise of the Rights to be listed upon issuance on The Montreal
         Exchange, The Toronto Stock Exchange, the New York Stock Exchange and
         such other exchanges, if any, that the Corporation determines are
         appropriate;
 
      (e)  cause to be reserved and kept available out of the authorized and
         unissued Common Shares, the number of Common Shares that, as provided
         in this Agreement, will from time to time be sufficient to permit the
         exercise in full of all outstanding Rights;
 
      (f)  pay when due and payable any and all federal, provincial and state
         transfer taxes of Canada and the United States of America (except, for
         greater certainty, any income taxes of the holder or exercising holder
         or any liability of the Corporation to withhold tax) and charges which
         may be payable in respect of the original issuance or delivery of the
         Rights Certificates, provided that the Corporation shall not be
         required to pay any transfer tax or charge which may be payable in
         respect of any transfer involved in the transfer or delivery of Rights
         Certificates or the issuance or delivery of certificates for Common
         Shares in a name other than that of the holder of the Rights being
         transferred or exercised; and
 
      (g)  after the Separation Time, except as permitted by Section 5.01, not
         take (or permit any Subsidiary to take) any action if at the time such
         action is taken it is reasonably foreseeable that such action will
         diminish substantially or otherwise eliminate the benefits intended to
         be afforded by the Rights.
 
2.02  LEGEND ON COMMON SHARE CERTIFICATES
 
(1)   Certificates issued for Common Shares after the Record Time but prior to
      the earlier of the Separation Time and the Expiration Time shall have
      printed on or affixed to them the following legend in, if appropriate,
      both the English and French languages:
 
          "Until the Separation Time (as defined in the Shareholder
          Rights Agreement referred to below), this certificate also
          evidences and entitles the holder hereof to certain Rights
          as set forth in a Shareholder Rights Agreement made as of
          December 14, 1989, (the "Rights Agreement") between Alcan
          Aluminium Limited (the "Corporation") and The Royal Trust
          Company, as Rights Agent, the terms of which are
          incorporated herein by reference and a copy of which is on
          file at the principal executive offices of the Corporation.
          Under certain circumstances, as set forth in the Rights
          Agreement, such Rights may be amended, redeemed, may expire,
          may become void if, in certain cases, they are "Beneficially
          Owned" by an "Acquiring Person" (as such terms are defined
          in the Rights Agreement) or a transferee thereof, or may be
          evidenced by separate certificates and may no longer be
          evidenced by this certificate. The Corporation will mail or
          arrange for the mailing of a copy of the Rights Agreement to
          the holder of this certificate without charge within five
          days after the receipt of a written request therefor."
 
(2)   Notwithstanding Section 2.02(1) any certificate for Common Shares issued
      after April 24, 1995 shall contain the following legend in, if
      appropriate, both the English and French languages:
 
          "Until the Separation Time (as defined in the Shareholder
          Rights Agreement referred to below), this certificate also
          evidences and entitles the holder hereof to certain Rights
          as set forth in a Shareholder Rights Agreement made as of
          December 14, 1989, as amended and restated from time to time
          (the "Rights Agreement") between Alcan Aluminium Limited
          (the "Corporation") and The R-M Trust Company (successor to
          The Royal Trust Company), as Rights Agent (the "Rights
          Agent"), the terms of which are incorporated herein by
          reference and a copy of which is on file at the principal
          executive offices of the Corporation. Under certain
          circumstances, as set forth in the Rights Agreement, such
          Rights may be amended, redeemed, may expire, may become void
          if, in certain circumstances, they are "Beneficially Owned"
          by an "Acquiring Person"
                                       42
<PAGE>   45
 
          (as such terms are defined in the Rights Agreement) or a
          transferee thereof, or may be evidenced by separate
          certificates and may no longer be evidenced by this
          certificate. The Corporation will mail or arrange for the
          mailing of a copy of the Rights Agreement to the holder of
          this certificate without charge within five days after the
          receipt of a written request therefor."
 
(3)   Notwithstanding Section 2.02(1) any certificate for Common Shares issued
      after April 22, 1999 shall contain the following legend in, if
      appropriate, both the English and French languages:
 
          "Until the Separation Time (as defined in the Shareholder
          Rights Agreement referred to below), this certificate also
          evidences and entitles the holder hereof to certain Rights
          as set forth in a Shareholder Rights Agreement made as of
          December 14, 1989, as amended and restated from time to time
          (the "Rights Agreement") between Alcan Aluminium Limited
          (the "Corporation") and CIBC Mellon Trust Company (successor
          to The Royal Trust Company), as Rights Agent (the "Rights
          Agent"), the terms of which are incorporated herein by
          reference and a copy of which is on file at the principal
          executive offices of the Corporation. Under certain
          circumstances, as set forth in the Rights Agreement, such
          Rights may be amended, redeemed, may expire, may become void
          if, in certain circumstances, they are "Beneficially Owned"
          by an "Acquiring Person" (as such terms are defined in the
          Rights Agreement) or a transferee thereof, or may be
          evidenced by separate certificates and may no longer be
          evidenced by this certificate. The Corporation will mail or
          arrange for the mailing of a copy of the Rights Agreement to
          the holder of this certificate without charge within five
          days after the receipt of a written request therefor."
 
(4)   With respect to any share certificate for Common Shares which contains the
      legend referred to in Sections 2.02(1) or (2), from and after April 22,
      1999, such legend shall be deemed to be a reference to the Shareholder
      Rights Agreement made as of December 14, 1989, as amended and restated
      from time to time thereafter.
 
(5)   Certificates representing Common Shares that are issued and outstanding at
      any time shall evidence one Right for each Common Share evidenced thereby
      notwithstanding the absence of a legend in accordance with Sections
      2.02(1), (2) or (3).
 
2.03  ADJUSTMENTS
 
(1)   The Exercise Price, the number and kind of securities subject to purchase
      upon exercise of each Right and the number of Rights outstanding are
      subject to adjustment from time to time as provided in this Section 2.03.
 
(2)   If the Corporation shall at any time after the Record Time but prior to
      the Expiration Time:
 
      (a)  declare or pay a dividend on the Common Shares payable in Common
         Shares or Convertible Securities other than pursuant to any optional
         stock dividend programme,
 
      (b)  subdivide or change the then outstanding Common Shares into a greater
         number of Common Shares,
 
      (c)  combine or change the then outstanding Common Shares into a smaller
         number of Common Shares, or
 
      (d)  issue any Common Shares or Convertible Securities in respect of, in
         lieu of or in exchange for existing Common Shares in a
         reclassification, amalgamation, arrangement or consolidation,
 
      the Exercise Price and the number of Rights outstanding or, if the payment
      or effective date thereof shall occur after the Separation Time, the
      securities purchasable upon exercise of the Rights shall be adjusted in
      the following manner.
 
      If the Exercise Price and the number of Rights outstanding are to be
      adjusted:
 
      (e)  the Exercise Price in effect after such adjustment shall be equal to
         the Exercise Price in effect immediately prior to such adjustment
         divided by the number of Common Shares that a holder
                                       43
<PAGE>   46
 
         of one Common Share immediately prior to such dividend, subdivision,
         change, combination or issuance would hold thereafter as a result
         thereof (such denominator being the "Expansion Factor"), and
 
      (f)  each Right held prior to such adjustment shall become that number of
         Rights equal to the Expansion Factor and, if such adjustment is to be
         made prior to the Separation Time, the adjusted number of Rights shall
         be deemed to be distributed among the Common Shares with respect to
         which the original Rights were associated (if they remain outstanding)
         and the shares issued in respect of such dividend, subdivision, change,
         combination or issuance, so that each such Common Share shall have
         exactly one Right associated with it.
 
      If the securities purchasable upon the exercise of the Rights are to be
      adjusted, the securities purchasable upon the exercise of each Right after
      such adjustment shall be the securities that a holder of the securities
      purchasable upon the exercise of one Right immediately prior to such
      dividend, subdivision, change, combination or issuance would hold
      thereafter as a result thereof.
 
      If, after the Record Time but prior to the Expiration Time, the
      Corporation issues any securities in a transaction of a type described in
      the first sentence of this Section 2.03(2) which are exchangeable for or
      convertible into or give a right to acquire Common Shares, such securities
      shall be treated herein as nearly equivalent to Common Shares as may be
      practicable and appropriate under the circumstances and the Corporation
      and the Rights Agent shall amend this Agreement in order to effect such
      treatment; provided that no such amendment may materially adversely affect
      the interests of the holders of the Rights generally.
 
      In the event the Corporation shall at any time after the Record Time and
      prior to the Separation Time issue any Common Share otherwise than in a
      transaction referred to in this Section 2.03(2), each Common Share so
      issued shall automatically have one new Right associated with it which
      Right shall be evidenced by the certificate representing such Common
      Share.
 
(3)   If the Corporation at any time after the Record Time but prior to the
      Expiration Time fixes a record date for the making of a distribution to
      all holders of Common Shares of rights or warrants entitling them (for a
      period expiring within 45 calendar days after such record date) to
      subscribe for or purchase Common Shares (or securities convertible into or
      exchangeable for or carrying a right to purchase or subscribe for Common
      Shares) at a price per Common Share (or, if a security convertible into or
      exchangeable for or carrying a right to purchase or subscribe for Common
      Shares, having a conversion, exchange or exercise price (including the
      price required to be paid to purchase such convertible or exchangeable
      security or right per share)) less than 95% of the Market Price per Common
      Share on such record date, the Exercise Price shall be adjusted by
      multiplying the Exercise Price in effect immediately prior to such record
      date by a fraction, the numerator of which shall be the number of Common
      Shares outstanding on such record date plus the number of Common Shares
      which the aggregate offering price of the total number of Common Shares so
      to be offered (and/or the aggregate initial conversion, exchange or
      exercise price of the convertible or exchangeable securities or rights so
      to be offered (including the price required to be paid to purchase such
      convertible or exchangeable securities or rights)) would purchase at such
      Market Price and the denominator of which shall be the number of Common
      Shares outstanding on such record date plus the number of additional
      Common Shares to be offered for subscription or purchase (or into which
      the convertible or exchangeable securities or rights so to be offered are
      initially convertible, exchangeable or exercisable). In case such
      subscription price may be paid in a consideration all or part of which is
      in a form other than cash, the value of such consideration shall be as
      determined in good faith by the Board. To the extent that such rights or
      warrants are not exercised prior to the expiration thereof, the Exercise
      Price shall be readjusted to the Exercise Price that would then be in
      effect based on the number of Common Shares (or securities convertible
      into or exchangeable for Common Shares) actually issued upon the exercise
      of such rights.
 
      For the purposes of this Agreement, the granting of the right to purchase
      Common Shares (whether from treasury or otherwise) pursuant to any (i)
      Dividend Reinvestment Plan and/or (ii) Common Share purchase plan
      providing for the investment of periodic optional payments
                                       44
<PAGE>   47
 
      and/or (iii) employee or executive or director benefit or similar plans
      (so long as such right to purchase is in no case evidenced by the delivery
      of rights or warrants) shall not be deemed to constitute an issue of
      rights or warrants by the Corporation; provided, however, that, in the
      case of any Dividend Reinvestment Plan or Common Share purchase plan, the
      right to purchase Common Shares is at a price per share not less than 90%
      of the then Market Price of the Common Shares.
 
(4)   If the Corporation at any time after the Record Time but prior to the
      Expiration Time fixes a record date for the making of a distribution to
      all holders of Common Shares of evidences of indebtedness or assets (other
      than a Regular Periodic Cash Dividend or a dividend paid in Common Shares)
      or rights or warrants (excluding those referred to in Section 2.03(3)),
      the Exercise Price shall be adjusted by multiplying the Exercise Price in
      effect immediately prior to such record date by a fraction, the numerator
      of which shall be the Market Price per Common Share on such record date
      less the fair market value per Common Share (as determined in good faith
      by the Board) of the evidences of indebtedness, assets, rights or warrants
      to be so distributed and the denominator of which shall be the Market
      Price per Common Share on such record date. Such adjustments shall be made
      successively whenever such a record date is fixed, and in the event that
      such a distribution is not so made, the Exercise Price shall be adjusted
      to be the Exercise Price that would have been in effect if such record
      date had not been fixed.
 
(5)   Each adjustment made pursuant to this Section 2.03 shall be made as of:
 
      (a)  the payment or effective date for the applicable dividend,
         subdivision, change, combination or issuance, in the case of an
         adjustment made pursuant to Section 2.03(2), or
 
      (b)  the record date for the applicable dividend or distribution, in the
         case of an adjustment made pursuant to Sections 2.03(3) or (4).
 
(6)   Subject to a prior consent of the holders of Voting Shares or Rights
      obtained as set forth in Sections 5.04(3) or (4) as applicable, if the
      Corporation at any time after the Record Time but prior to the Expiration
      Time issues any shares in the capital of the Corporation (other than
      Common Shares), any rights or warrants to subscribe for or purchase any
      such shares, or any securities convertible into or exchangeable for any
      such shares and the Board, acting in good faith, determines that the
      adjustments contemplated by Sections 2.03(2), (3) or (4) are not
      applicable and the interests of the holders of the Rights will, as a
      result thereof, be adversely affected or, if applicable, such adjustments
      will not appropriately protect the interests of the holders of the Rights,
      the Board may determine what adjustments to the Exercise Price, number of
      Rights and/or securities purchasable upon exercise of the Rights would be
      appropriate to protect the interests of the holders of the Rights and,
      notwithstanding Sections 2.03(2), (3) or (4), such adjustments, rather
      than, if applicable, the adjustments contemplated by Sections 2.03(2), (3)
      or (4), shall be made and the Corporation and the Rights Agent shall amend
      this Agreement as appropriate to provide for such adjustments.
 
(7)   Notwithstanding anything herein to the contrary, no adjustment to the
      Exercise Price shall be required unless such adjustment would require an
      increase or decrease of at least 1% in the Exercise Price, provided that
      any adjustment which is not made as a result of the provisions of this
      Section 2.03(7) shall be carried forward and taken into account in any
      subsequent adjustment. Each adjustment to the Exercise Price made pursuant
      to this Section 2.03 shall be rounded upward or downward to the nearest
      cent. Whenever an adjustment to the Exercise Price is made pursuant to
      this Section 2.03, the Corporation shall promptly:
 
      (a)  prepare a certificate setting forth such adjustment and a brief
         statement of the facts accounting for such adjustment,
 
      (b)  file a copy of such certificate with the Rights Agent and each
         transfer agent for the Common Shares, and
 
      (c)  mail a brief summary thereof to each holder of a Right.
 
                                       45
<PAGE>   48
 
(8)   Irrespective of any adjustment or change in the securities purchasable
      upon exercise of the Rights, the Rights Certificates theretofore and
      thereafter issued shall continue to express the securities so purchasable
      which were expressed in the initial Rights Certificates issued hereunder.
 
(9)   Notwithstanding anything contained in this Section 2.03 to the contrary,
      the Corporation shall be entitled to make such reductions in the Exercise
      Price, in addition to those adjustments expressly required by this Section
      2.03, as and to the extent that in their good faith judgment the Board
      shall determine to be advisable, in order that any:
 
      (a)  stock dividend;
 
      (b)  consolidation or subdivision of Common Shares;
 
      (c)  issuance (wholly or in part for cash) of Common Shares or securities
         that by their terms are convertible into or exchangeable for Common
         Shares; or
 
      (d)  issuance of rights, options or warrants referred to in this Section
         2.03,
 
      hereafter made by the Corporation to holders of its Common Shares, shall
      not be taxable to such shareholders.
 
2.04  DATE ON WHICH EXERCISE IS EFFECTIVE
 
Each person in whose name any certificate for Common Shares is issued upon the
exercise of the Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and the payment of the Exercise
Price for such Rights (and any applicable transfer tax and other governmental
charge payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Common
Share transfer books of the Corporation are closed, such person shall be deemed
to have become the record holder of such shares on, and such certificates shall
be dated, the next succeeding Business Day on which the Common Share transfer
books of the Corporation are open.
 
2.05  EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES
 
(1)   The Rights Certificates shall be executed (either manually or by facsimile
      signature) on behalf of the Corporation by any two officers of the
      Corporation under its corporate seal or a facsimile thereof. Rights
      Certificates bearing the manual or facsimile signatures of individuals who
      were at any time the proper officers of the Corporation shall bind the
      Corporation, notwithstanding that such individuals or any of them have
      ceased to hold such offices prior to the countersignature and delivery of
      such Rights Certificates as herein provided for.
 
(2)   Promptly after the Corporation learns of the Separation Time, the
      Corporation shall notify the Rights Agent of such Separation Time and,
      subject to compliance with Section 2.01(7), shall deliver Rights
      Certificates executed by the Corporation to the Rights Agent for
      countersignature, and the Rights Agent shall countersign (manually or by
      facsimile signature in a manner satisfactory to the Corporation) and give
      such Rights Certificates to the holders of the Rights pursuant to Section
      2.01(3) hereof. No Rights Certificates shall be valid for any purpose
      unless countersigned by the Rights Agent as aforesaid.
 
(3)   Each Rights Certificate shall be dated the date of countersignature
      thereof.
 
2.06  REGISTRATION OF RIGHTS
 
(1)   The Corporation shall cause a register (the "Rights Register") to be kept
      after the Separation Time in which, subject to such reasonable regulations
      as it may prescribe, the Corporation shall provide for the registration of
      the Rights. The Rights Agent is hereby appointed "Rights Registrar" for
      the purpose of maintaining the Rights Register for the Corporation and
      registering the Rights and the transfers and exchanges of the Rights as
      herein provided. If the Rights Agent ceases to be the Rights Registrar,
      the Rights Agent shall have the right to examine the Rights Register at
      all reasonable times.
 
                                       46
<PAGE>   49
 
(2)   After the Separation Time and prior to the Expiration Time, upon surrender
      of any Rights Certificate and subject to the provisions of Sections
      2.06(4) and (5), the Corporation shall execute, and the Rights Agent shall
      countersign and deliver in the name of the holder or the designated
      transferee or transferees, as required pursuant to the holder's
      instructions, one or more new Rights Certificates evidencing the same
      aggregate number of Rights as did the Rights Certificates so surrendered.
 
(3)   All Rights issued upon any registration of transfer or exchange of Rights
      Certificates shall be valid obligations of the Corporation and shall be
      entitled to the same benefits under this Agreement as the Rights
      surrendered upon such registration of transfer or exchange.
 
(4)   Every Rights Certificate surrendered for transfer or exchange shall be
      duly endorsed, or be accompanied by a written instrument of transfer in a
      form satisfactory to the Corporation or the Rights Agent, as the case may
      be, duly executed by the holder thereof or such holder's attorney duly
      authorized in writing.
 
(5)   As a condition to the issuance of any new Rights Certificate under this
      Section 2.06, the Corporation may require the payment of a sum sufficient
      to cover any tax or other governmental charge that may be imposed in
      relation thereto.
 
2.07  MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES
 
(1)   If any mutilated Rights Certificate is surrendered to the Rights Agent
      prior to the Expiration Time, the Corporation shall execute and the Rights
      Agent shall countersign and deliver in the name of the holder in exchange
      therefor a new Rights Certificate evidencing the same number of Rights as
      did the Rights Certificate so surrendered.
 
(2)   If prior to the Expiration Time there is delivered to the Corporation and
      the Rights Agent:
 
      (a)  evidence to their satisfaction of the destruction, loss or theft of
         any Rights Certificate, and
 
      (b)  such security or indemnity as may be required by them to save each of
         them and any of their agents harmless,
 
      then, in the absence of notice to the Corporation or the Rights Agent that
      such Rights Certificate has been acquired by a bona fide purchaser, the
      Corporation shall execute and the Rights Agent shall countersign and
      deliver in the name of the holder, in lieu of any such destroyed, lost or
      stolen Rights Certificate, a new Rights Certificate evidencing the same
      number of Rights as did the Rights Certificate so destroyed, lost or
      stolen.
 
(3)   As a condition to the issuance of any new Rights Certificate under this
      Section 2.07, the Corporation may require the payment of a sum sufficient
      to cover any tax or other governmental charge that may be imposed in
      relation thereto and any other expense (including the fees and expenses of
      the Rights Agent) connected therewith.
 
(4)   Every new Rights Certificate issued pursuant to this Section 2.07 in lieu
      of any destroyed, lost or stolen Rights Certificate shall evidence an
      original additional contractual obligation of the Corporation, whether or
      not the destroyed, lost or stolen Rights Certificate shall be at any time
      enforceable by anyone, and shall be entitled to all the benefits of this
      Agreement equally and proportionally with any and all other Rights duly
      issued hereunder.
 
2.08  PERSONS DEEMED OWNERS
 
Prior to due presentment of a Rights Certificate (or, prior to the Separation
Time, the associated Common Share certificate) for registration of transfer, the
Corporation, the Rights Agent and any agent of the Corporation or the Rights
Agent may deem and treat the person in whose name such Rights Certificate (or,
prior to the Separation Time, such Common Share certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever. As used in this Agreement, unless the context otherwise requires,
the term "holder" of Rights shall mean the registered holder of such Rights (or,
prior to the Separation Time, the associated Common Shares).
 
                                       47
<PAGE>   50
 
2.09  DELIVERY AND CANCELLATION OF CERTIFICATES
 
All Rights Certificates surrendered upon exercise or for registration of
transfer or exchange shall, if surrendered to any person other than the Rights
Agent, be delivered to the Rights Agent and, in any case, shall be promptly
cancelled by the Rights Agent. The Corporation may at any time deliver to the
Rights Agent for cancellation any Rights Certificates previously countersigned
and delivered hereunder which the Corporation may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly cancelled
by the Rights Agent. No Rights Certificate shall be countersigned in lieu of or
in exchange for any Rights Certificates cancelled as provided in this Section
2.09, except as expressly permitted by this Agreement. The Rights Agent shall
destroy all cancelled Rights Certificates and promptly thereafter deliver a
certificate of destruction to the Corporation.
 
2.10  AGREEMENT OF RIGHTS HOLDERS
 
Every holder of Rights, by accepting the same, consents and agrees with the
Corporation and the Rights Agent and with every other holder of Rights that:
 
      (a)  such holder shall be bound by and subject to the provisions of this
         Agreement, as amended from time to time in accordance with the terms
         hereof in respect of all Rights held;
 
      (b)  prior to the Separation Time, each Right will be transferable only
         together with, and will be transferred by a transfer of, the associated
         Common Shares and after the Separation Time, the Rights shall be
         transferable only on the Rights Register as provided herein;
 
      (c)  prior to due presentment of a Rights Certificate (or, prior to the
         Separation Time, the associated Common Share certificate) for transfer,
         the Corporation, the Rights Agent and any agent of the Corporation or
         the Rights Agent may deem and treat the person in whose name the Rights
         Certificate (or, prior to the Separation Time, the associated Common
         Share certificate) is registered as the absolute owner thereof and of
         the Rights evidenced thereby (notwithstanding any notations of
         ownership or writing on such Rights Certificate or the associated
         Common Share certificate made by anyone other than the Corporation or
         the Rights Agent) for all purposes whatsoever, and neither the
         Corporation nor the Rights Agent shall be affected by any notice to the
         contrary;
 
      (d)  without the approval of any holder of Rights and upon the sole
         authority of the Board acting in good faith this Agreement may be
         supplemented or amended from time to time pursuant and subject to
         Section 2.03 or Section 5.04;
 
      (e)  if such holder at any time becomes an Acquiring Person or otherwise
         becomes subject to the provisions of Section 3.01(2), the Rights held
         by such holder shall immediately become void pursuant to the provisions
         of Section 3.01(2);
 
      (f)  such holder of Rights has waived his right to receive any fractional
         Right or any fractional Share or other security upon exercise of a
         Right (except as specifically provided herein); and
 
      (g)  notwithstanding anything in this Agreement to the contrary, neither
         the Corporation nor the Rights Agent shall have any liability to any
         holder of a Right or any other Person as a result of its inability to
         perform any of its obligations under this Agreement by reason of any
         preliminary or permanent injunction or other order, decree or ruling
         issued by a court of competent jurisdiction or by a governmental,
         regulatory or administrative agency or commission, or any statute,
         rule, regulation or executive order promulgated or enacted by any
         governmental authority, prohibiting or otherwise restraining
         performance of such obligation.
 
                  ARTICLE 3 -- EFFECT OF CERTAIN TRANSACTIONS
 
3.01  FLIP-IN EVENT
 
(1)   Subject to Section 3.01(2) and Section 5.01, if a Flip-In Event occurs
      prior to the Expiration Time, the Corporation shall take such action as is
      necessary to ensure and provide that, except as provided below, each Right
      shall thereafter constitute the right to purchase from the Corporation,
 
                                       48
<PAGE>   51
 
      upon the exercise thereof in accordance with the terms hereof, that number
      of Common Shares of the Corporation having an aggregate Market Price on
      the date of consummation or occurrence of such Flip-In Event equal to
      twice the Exercise Price for an amount in cash equal to the Exercise Price
      (such right to be appropriately adjusted in a manner analogous to the
      applicable adjustment provided for in Section 2.03 in the event that after
      such date of consummation or occurrence an event of a type analogous to
      any of the events described in Section 2.03 shall have occurred with
      respect to such Common Shares).
 
(2)   Notwithstanding the foregoing, upon the occurrence of any Flip-In Event,
      any Rights that are or were Beneficially Owned on or after the Stock
      Acquisition Date by:
 
      (i)  an Acquiring Person (or any Affiliate or Associate of an Acquiring
         Person or any Person acting jointly or in concert with an Acquiring
         Person or any Affiliate or Associate of an Acquiring Person), or
 
      (ii)  a transferee, direct or indirect, from an Acquiring Person (or any
         Affiliate or Associate of an Acquiring Person or any Person acting
         jointly or in concert with an Acquiring Person or any Affiliate or
         Associate of an Acquiring Person) in a transfer, whether or not for
         consideration, that the Board, acting in good faith has determined is
         part of a plan, arrangement or scheme of an Acquiring Person (or any
         Affiliate or Associate of an Acquiring Person) that has the purpose or
         effect of avoiding clause (i) of this Section 3.01(2),
 
      shall become void and any holder of such Rights (including transferees)
      shall thereafter have no right to exercise such Rights under any provision
      of this Agreement or otherwise.
 
      From and after the Separation Time, the Corporation shall do all such acts
      and things as shall be necessary and within its power to ensure compliance
      with the provisions of this Section 3.01, including without limitation,
      all such acts and things as may be required to satisfy the requirements of
      the Canada Business Corporations Act, the Securities Act (Ontario) and the
      securities laws or comparable legislation of each of the provinces of
      Canada, the United States of America and each of the states thereof in
      respect of the issue of Common Shares upon the exercise of Rights in
      accordance with this Agreement.
 
(3)   Any Rights Certificate issued pursuant to Section 2.01 that represents
      Rights Beneficially Owned by a Person described in either clauses (i) or
      (ii) of Section 3.01(2) or transferred to any nominee of any such Person
      and any Rights Certificates issued upon transfer, exchange, replacement or
      adjustment of any other Rights Certificates referred to in this sentence
      shall contain or will be deemed to contain the following additional
      legend:
 
         "The Rights represented by this Rights Certificate represent
         Rights Beneficially Owned by an Acquiring Person (as such
         terms are defined in the Rights Agreement). This Rights
         Certificate and the Rights represented hereby shall become
         void in the circumstances specified in Section 3.01(2) of the
         Shareholder Rights Agreement.";
 
      provided that the Rights Agent shall not be under any responsibility to
      ascertain the existence of facts that would require the imposition of such
      legend but shall be required to impose such legend only if instructed to
      do so by the Corporation or if a holder fails to certify upon transfer or
      exchange in the space provided on the Rights Certificate that the Rights
      represented thereby are not, and, to the best of such holder's knowledge,
      never have been, Beneficially Owned by an Acquiring Person after such
      person became an Acquiring Person.
 
                         ARTICLE 4 -- THE RIGHTS AGENT
 
4.01  GENERAL
 
(1)   The Corporation hereby appoints the Rights Agent to act as agent for the
      Corporation and the holders of Rights in accordance with the terms and
      conditions hereof, and the Rights Agent hereby accepts such appointments.
      The Corporation may upon such terms as it considers appropriate from time
      to time appoint such Co-Rights Agents as it may deem necessary or
      desirable. If the
 
                                       49
<PAGE>   52
 
      Corporation appoints one or more Co-Rights Agents, the respective duties
      of the Rights Agent and Co-Rights Agents shall be as the Corporation may
      determine. The Corporation agrees to pay to the Rights Agent reasonable
      compensation for all services rendered by it hereunder and, from time to
      time, on demand by the Rights Agent, its reasonable expenses and counsel
      fees and other disbursements incurred in the administration and execution
      of this Agreement and the exercise and performance of its duties
      hereunder. The Corporation also agrees to indemnify the Rights Agent for,
      its officers, directors, employees and agents for, and to hold it harmless
      against, any loss, liability or expense, if incurred without negligence,
      bad faith or wilful misconduct on the part of the Rights Agent for
      anything done or omitted to be done by the Rights Agent in connection with
      the exercise and performance of its duties hereunder, including the costs
      and expenses of defending against any claim of liability, which right to
      indemnification shall survive the termination of this Agreement or the
      removal or resignation of the Rights Agent.
 
(2)   The Rights Agent shall be protected and shall incur no liability for or in
      respect of any action taken, suffered or omitted to be taken by it in
      connection with the exercise and performance of its duties hereunder in
      reliance upon any certificate for Common Shares, Rights Certificate,
      certificate for other securities of the Corporation, instrument of
      assignment or transfer, power of attorney, endorsement, affidavit, letter,
      notice, direction, consent, certificate, statement or other paper or
      document believed by it to be genuine and to be signed, executed and,
      where necessary, verified or acknowledged, by the proper Person or
      Persons.
 
4.02  MERGER OR CONSOLIDATION OR CHANGE OF NAME OF THE RIGHTS AGENT
 
(1)   Any corporation into which the Rights Agent or any successor Rights Agent
      may be merged or amalgamated or with which it may be consolidated, or any
      corporation resulting from any merger, amalgamation or consolidation to
      which the Rights Agent or any successor Rights Agent is a party, or any
      corporation succeeding to the shareholder or stockholder services business
      of the Rights Agent or any successor Rights Agent, will be the successor
      to the Rights Agent under this Agreement without the execution or filing
      of any paper or any further act on the part of any of the parties hereto,
      provided that such corporation would be eligible for appointment as a
      successor Rights Agent under the provisions of Section 4.04. In case at
      the time such successor Rights Agent succeeds to the agency created by
      this Agreement any of the Rights Certificates have been countersigned but
      not delivered, any such successor Rights Agent may adopt the
      countersignature of the predecessor Rights Agent and deliver such Rights
      Certificates so countersigned; and in case at that time any of the Rights
      Certificates have not been countersigned, any successor Rights Agent may
      countersign such Rights Certificates either in the name of the predecessor
      Rights Agent or in the name of the successor Rights Agent; and in all such
      cases such Rights Certificates shall have the full force provided for in
      the Rights Certificates and in this Agreement.
 
(2)   In case at any time the name of the Rights Agent is changed and at such
      time any of the Rights Certificates shall have been countersigned but not
      delivered, the Rights Agent may adopt the countersignature under its prior
      name and deliver Rights Certificates so countersigned; and in case at that
      time any of the Rights Certificates shall not have been countersigned, the
      Rights Agent may countersign such Rights Certificates either in its prior
      name or in its changed name; and in all such cases such Rights
      Certificates shall have the full force provided for in the Rights
      Certificates and in this Agreement.
 
4.03  ENTITLEMENTS OF THE RIGHTS AGENT
 
The Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by which the Corporation and every
holder of Rights, by accepting the same, shall be bound:
 
      (a)  the Rights Agent may retain and consult with legal counsel (who may
         be legal counsel for the Corporation), or such other experts or
         advisors as the Rights Agent deems necessary to carry out its duties
         under this Agreement, and the opinion of such counsel or other expert
         or advisor shall be full and complete authorization and protection to
         the Rights Agent with respect to any action taken or omitted by it in
         good faith and in accordance with such opinion;
                                       50
<PAGE>   53
 
      (b)  whenever in the performance of its duties under this Agreement the
         Rights Agent deems it necessary or desirable that any fact or matter be
         proved or established by the Corporation prior to taking or suffering
         any action hereunder, such fact or matter (unless other evidence in
         respect thereof be herein specifically prescribed) may be deemed to be
         conclusively proved and established by a certificate signed by persons
         believed by the Rights Agent to be Chairman of the Board, President,
         Chief Executive Officer, any Vice President, Chief Financial Officer,
         the Secretary, or any Assistant Secretary of the Corporation and
         delivered to the Rights Agent; and such certificate shall be full
         authorization to the Rights Agent for any action taken or suffered in
         good faith by it under the provisions of this Agreement in reliance
         upon such certificate;
 
      (c)  the Rights Agent shall be liable hereunder for its own negligence,
         bad faith or wilful misconduct;
 
      (d)  the Rights Agent shall not be liable for or by reason of any of the
         statements of fact or recitals contained in this Agreement or in the
         certificates for Common Shares or the Rights Certificates (except its
         countersignature thereof) or be required to verify the same, and all
         such statements and recitals are and shall be deemed to have been made
         by the Corporation only;
 
      (e)  the Rights Agent shall not be under any responsibility in respect of
         the validity of this Agreement or the execution and delivery hereof
         (except the due authorization, execution and delivery hereof by the
         Rights Agent) or in respect of the validity or execution of any Common
         Share certificate or Rights Certificate (except its countersignature
         thereof); nor shall it be responsible for any breach by the Corporation
         of any covenant or condition contained in this Agreement or in any
         Rights Certificate; nor shall it be responsible for any change in the
         exercisability of the Rights (including the Rights becoming void
         pursuant to Section 3.01(2)) or any adjustment required under the
         provisions of Section 2.03 or for the manner, method or amount of any
         such adjustment or the ascertaining of the existence of facts that
         would require any such adjustment (except with respect to the exercise
         of Rights after receipt of the certificate contemplated by Section 2.03
         describing any such adjustment); nor shall it by any act hereunder be
         deemed to make any representation or warranty as to the authorization
         of any Common Shares to be issued pursuant to this Agreement or any
         Rights or as to whether any Common Shares will, when issued, be duly
         and validly authorized, executed, issued and delivered as fully paid
         and non-assessable;
 
      (f)  the Corporation shall perform, execute, acknowledge and deliver or
         cause to be performed, executed, acknowledged and delivered all such
         further and other acts, instruments and assurances as may reasonably be
         required by the Rights Agent for the carrying out or performing by the
         Rights Agent of the provisions of this Agreement;
 
      (g)  the Rights Agent is hereby authorized and directed to accept
         instructions with respect to the performance of its agency duties
         hereunder from any person believed by the Rights Agent to be the Chief
         Executive Officer or the Chief Legal Officer or the Chief Financial
         Officer of the Corporation, and to apply to such persons for advice or
         instructions in connection with its duties, and it shall not be liable
         for any action taken or suffered by it in good faith in accordance with
         instructions of any such person;
 
      (h)  the Rights Agent and any shareholder, director, officer or employee
         of the Rights Agent may buy, sell or deal in Common Shares, Rights or
         other securities of the Corporation or become pecuniarily interested in
         any transaction in which the Corporation may be interested, or contract
         with or lend money to the Corporation or otherwise act as fully and
         freely as though it were not Rights Agent under this Agreement. Nothing
         herein shall preclude the Rights Agent from acting in any other
         capacity for the Corporation or for any other legal entity; and
 
      (i)  the Rights Agent may execute and exercise any of the rights or powers
         hereby vested in it or perform any duty hereunder either itself or by
         or through its attorneys or agents, and the Rights Agent shall not be
         answerable or accountable for any act, default, neglect or
 
                                       51
<PAGE>   54
 
         misconduct of any such attorneys or agents or for any loss to the
         Corporation resulting from any such act, default, neglect or
         misconduct, provided reasonable care was exercised in the selection and
         continued employment thereof.
 
4.04  CHANGE OF THE RIGHTS AGENT
 
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 calendar days' notice (or such lesser notice as is acceptable
to the Corporation) to the Corporation, to each transfer agent of Common Shares
by registered or certified mail and to the holders of Rights. The Corporation
may remove the Rights Agent upon 60 calendar days' notice to the Rights Agent,
to each transfer agent of the Common Shares by registered or certified mail and
to the holders of Rights. If the Rights Agent resigns or is removed or otherwise
becomes incapable of acting, the Corporation shall appoint a successor to the
Rights Agent. If the Corporation fails to make such appointment within a period
of 30 calendar days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of any Rights (which holder shall, with such notice, submit
such holder's Rights Certificate for inspection by the Corporation), then the
holder of any Rights may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be a corporation incorporated under
the laws of Canada or a province thereof authorized to carry on the business of
a trust company in the Province of Ontario. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Corporation shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares, and give a notice thereof to
the holders of the Rights. Failure to give any notice provided for in this
Section 4.04 or any defect therein shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
 
                           ARTICLE 5 -- MISCELLANEOUS
 
5.01  REDEMPTION, WAIVER AND TERMINATION
 
(1)   Subject to the prior consent of the holders of Voting Shares or Rights
      obtained as set forth in Sections 5.04(3) or (4), as applicable, the Board
      acting in good faith may, at its option, at any time prior to the
      provisions of Sections 3.01 becoming applicable as a result of the
      occurrence of a Flip-In Event, elect to redeem all but not less than all
      of the then outstanding Rights at a redemption price of $0.01 per Right
      appropriately adjusted in a manner analogous to the applicable adjustment
      provided for in Section 2.03 in the event that an event of the type
      analogous to any of the events described in Section 2.03 shall have
      occurred (such redemption price being herein referred to as the
      "Redemption Price").
 
(2)   The Board may, until a Flip-In Event shall occur, upon written notice
      delivered to the Rights Agent, determine to waive the application of
      Section 3.01 to such particular Flip-In Event but only if such Flip-In
      Event would occur as a result of a Take-Over Bid made by way of a
      Take-Over Bid circular to all holders of Voting Shares of record; provided
      that if the Board waives the application of Section 3.01 to a particular
      Flip-In Event, the Board shall be deemed to have waived the application of
      Section 3.01 to any other Flip-In Event, that would occur as a result of a
      Take-Over Bid which is made by means of a Take-Over Bid circular to all
      holders of Voting Shares of record prior to the expiry of any Take-Over
      Bid in respect of which a waiver is, or is deemed to have been, granted
      under this Section 5.01(2).
 
(3)   Notwithstanding Section 5.01(2), the Board may also, with respect to any
      Flip-In Event, waive the application of Section 3.01 to that Flip-In
      Event, provided that both of the following conditions are satisfied:
 
                                       52
<PAGE>   55
 
      (i)  the Board has determined that the Acquiring Person became an
         Acquiring Person by inadvertence and without any intent that he would
         become an Acquiring Person; and
 
      (ii)  such Acquiring Person has reduced his Beneficial Ownership of Voting
         Shares such that at the time of waiver pursuant to this Section 5.01(3)
         he is no longer an Acquiring Person.
 
(4)   If the Board elects or is deemed to have elected to redeem the Rights, the
      right to exercise the Rights will thereupon, without further action and
      without notice, terminate and each Right will after redemption be null and
      void and the only right thereafter of the holders of Rights will be to
      receive the Redemption Price and no further Rights shall thereafter be
      issued.
 
(5)   Within 10 calendar days after the Board electing or having been deemed to
      have elected to redeem the Rights, the Corporation shall give notice of
      redemption to the holders of the then outstanding Rights by mailing such
      notice to each such holder at its last address as it appears upon the
      registry books of the Rights Agent or, prior to the Separation Time, on
      the registry books of the Corporation for the Common Shares. Any notice
      which is mailed in the manner herein provided will be deemed given,
      whether or not the holder receives the notice. Each such notice of
      redemption will state the method by which the payment of the Redemption
      Price will be made. The failure to give or any defect in such notice shall
      not affect the validity of such redemption.
 
(6)   Where a Take-Over Bid that is not a Permitted Bid or Competing Permitted
      Bid is withdrawn or otherwise terminated after the Separation Time has
      occurred and prior to the occurrence of a Flip-In Event, the Board may
      elect to redeem all the outstanding Rights at the Redemption Price.
 
(7)   Upon the Rights being redeemed pursuant to Section 5.01(6), all the
      provisions of this Agreement shall continue to apply as if the Separation
      Time had not occurred and Rights Certificates representing the number of
      Rights held by each holder of record of Common Shares, as of the
      Separation Time had not been mailed to each such holder and for all
      purposes of this Agreement the Separation Time shall be deemed not to have
      occurred.
 
(8)   In the event that prior to the occurrence of a Flip-In Event a Person
      acquires, pursuant to a Permitted Bid, a Competing Permitted Bid or an
      Exempt Acquisition, outstanding Voting Shares, then the Board shall
      immediately upon the consummation of such acquisition without further
      formality be deemed to have elected to redeem the Rights at the Redemption
      Price.
 
5.02  EXPIRATION
 
No Person shall have any rights pursuant to this Agreement or in respect of any
Right after the Expiration Time, except the Rights Agent as specified in Section
4.01(1).
 
5.03  ISSUANCE OF NEW RIGHTS CERTIFICATES
 
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Corporation may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the number or kind or class of shares purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement.
 
5.04  SUPPLEMENTS AND AMENDMENTS
 
(1)   The Corporation may from time to time amend this Agreement with the
      approval of the Rights Agent but without the consent of any holder of
      Rights or the holders of Voting Shares in order to correct a clerical or
      typographical error or to maintain the validity and effectiveness of this
      Agreement as a result of any change in any applicable laws, rules or
      regulatory requirements.
 
(2)   The Corporation may, prior to the date of the shareholders' meeting
      referred to in Section 5.15, supplement or amend this Agreement without
      the approval of any of the holders of Rights or Voting Shares (whether or
      not such action would materially adversely affect the interest of the
      holders of Rights generally) where the Board acting in good faith deems
      such action necessary or desirable. Notwithstanding anything in this
      Section 5.04 to the contrary, no such supplement or amendment shall be
      made to the provisions of Article 4 except with the written concurrence of
      the Rights Agent to such supplement or amendment.
 
                                       53
<PAGE>   56
 
(3)   Subject to Section 5.04(1), the Corporation may, with the prior consent of
      the holders of Voting Shares obtained as set forth below, at any time
      prior to the Separation Time, amend, vary or rescind any of the provisions
      of this Agreement and the Rights (whether or not such action would
      materially adversely affect the interests of the holders of Rights
      generally). Such consent shall be deemed to have been given if the action
      requiring such approval is authorized by the affirmative vote of a
      majority of the votes cast by Independent Shareholders present or
      represented at and entitled to be voted at a meeting of the holders of
      Voting Shares duly called and held in compliance with applicable laws and
      the articles and by-laws of the Corporation.
 
(4)   The Corporation may, with the prior consent of the holders of Rights, at
      any time on or after the Separation Time and before the Expiration Time,
      amend, vary or delete any of the provisions of this Agreement and the
      Rights (whether or not such action would materially adversely affect the
      interests of the holders of Rights generally), provided that no such
      amendment, variation or deletion shall be made to the provisions of
      Article 4 except with the written concurrence of the Rights Agent thereto.
      Such consent shall be deemed to have been given if such amendment,
      variation or deletion is authorized in the manner specified in Section
      5.04(5).
 
(5)   Any approval of the holders of Rights shall be deemed to have been given
      if the action requiring such approval is authorized by the affirmative
      votes of the holders of Rights present or represented at and entitled to
      be voted at a meeting of the holders of Rights and representing a majority
      of the votes cast in respect thereof. For the purposes hereof, each
      outstanding Right (other than Rights which are void pursuant to the
      provisions hereof) shall be entitled to one vote, and the procedures for
      the calling, holding and conduct of the meeting shall be those, as nearly
      as may be, which are provided in the Corporation's by-laws and the Canada
      Business Corporations Act with respect to meetings of shareholders of the
      Corporation.
 
(6)   Any amendment to this Agreement pursuant to Subsection 5.04(1) which is
      required to maintain the validity of this Agreement as a result of any
      change in any applicable laws, rules or regulatory requirements shall:
 
      (i)  if made before the Separation Time, any such amendment shall be
         submitted to the shareholders of the Corporation at the next meeting of
         shareholders and the shareholders may, by the majority referred to in
         Section 5.04(3) confirm or reject such amendment;
 
      (ii)  if made after the Separation Time, any such amendment shall be
         submitted to the holders of Rights at a meeting to be called for on a
         date not later than immediately following the next meeting of
         shareholders of the Corporation and the holders of Rights may, by
         resolution passed by the majority referred to in Section 5.04(5)
         confirm or reject such amendment.
 
      Any such amendment shall be effective from the date of the resolution of
      the Board adopting such amendment, until it is confirmed or rejected or
      until it ceases to be effective (as described in the next sentence) and,
      where such amendment is confirmed, it continues in effect in the form so
      confirmed. If such amendment is rejected by the shareholders or the
      holders of Rights or is not submitted to the shareholders or holders of
      Rights as required, then such amendment shall cease to be effective from
      and after the termination of the meeting at which it was rejected or to
      which it should have been but was not submitted or from and after the date
      of the meeting of holders of Rights that should have been but was not
      held, and no subsequent resolution of the Board to amend this Agreement to
      substantially the same effect shall be effective until confirmed by the
      shareholders or holders of Rights as the case may be.
 
5.05  FRACTIONAL RIGHTS AND FRACTIONAL SHARES
 
(1)   The Corporation shall not be required to issue fractions of Rights or to
      distribute Rights Certificates which evidence fractional Rights. After the
      Separation Time, in lieu of issuing fractional Rights, the Corporation
      shall pay to the holders of record of the Rights Certificates (provided
      the Rights represented by such Rights Certificates are not void pursuant
      to the provisions of Section 3.01(2), at the time such fractional Rights
      would otherwise be issuable), an amount in cash equal to the fraction of
      the Market Price of one whole Right that the fraction of a Right that
      would otherwise be issuable is of one whole Right.
                                       54
<PAGE>   57
 
(2)   The Corporation shall not be required to issue fractions of Common Shares
      upon exercise of Rights or to distribute certificates which evidence
      fractional Common Shares. In lieu of issuing fractional Common Shares, the
      Corporation shall pay to the registered holders of Rights Certificates, at
      the time such Rights are exercised as herein provided, an amount in cash
      equal to the fraction of the Market Price of one Common Share that the
      fraction of a Common Share that would otherwise be issuable upon the
      exercise of such Right is of one whole Common Share at the date of such
      exercise.
 
5.06  RIGHTS OF ACTION
 
Subject to the terms of this Agreement, all rights of action in respect of this
Agreement, other than rights of action vested solely in the Corporation or the
Rights Agent, are vested in the respective holders of Rights; and any holder of
Rights, without the consent of the Rights Agent or of any other holder of
Rights, may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to enforce or otherwise
act in respect of, such holder's right to exercise such holder's Rights in the
manner provided in such holder's Rights Certificate and in this Agreement.
Without limiting the generality of the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations of, and
injunctive relief against actual or threatened violations of the obligations of,
any Person subject to this Agreement.
 
5.07  HOLDER OF RIGHTS NOT DEEMED TO BE A SHAREHOLDER
 
No holder of Rights, as such, shall be entitled to vote, to receive dividends,
to receive the remaining property of the Corporation on dissolution or to be
deemed for any purpose the holder of Common Shares or any other securities which
may at any time be issuable on the exercise of such Rights, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon any
holder of Rights, as such, any of the rights of a shareholder of the Corporation
or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.08) or to receive dividends or
subscription rights or otherwise, until such Rights shall have been exercised in
accordance with the provisions hereof.
 
5.08  NOTICES
 
Any document or other communication to be given in connection with this
Agreement to the Corporation shall be given in writing and shall be given by (i)
personal delivery, (ii) telegraph, facsimile or other form of recorded
electronic communication (charges prepaid and confirmed in writing) or (iii) by
first-class postage prepaid mail (except during any general interruption of
postal services due to strike, lockout or other cause) addressed to the
Corporation as follows:
 
      Alcan Aluminium Limited
      Maison Alcan
      1188 Sherbrooke Street West
      Montreal, Quebec
      Canada
      H3A 3G2
 
      Attention: Secretary
 
Any document or other communication to be given in connection with this
Agreement to the Rights Agent shall be given in writing and shall be given by
(i) personal delivery, (ii) telegraph, facsimile or other form of recorded
electronic communication (charges prepaid and confirmed in writing) or (iii) by
first-class postage prepaid mail (except during any general interruption of
postal services due to strike, lockout or other cause) addressed to the Rights
Agent as follows:
 
                                       55
<PAGE>   58
 
      CIBC Mellon Trust Company
      2001 University Street
      16th Floor
      Montreal, Quebec
      Canada
      H3A 2A6
 
      Attention: President
 
Any document or other communication to be given in connection with this
Agreement to any holder of Rights shall be given in writing and shall be given
by (i) personal delivery, (ii) telegraph, facsimile or other form of recorded
electronic communication (charges prepaid and confirmed in writing) or (iii) by
first-class postage prepaid mail (except during any general interruption of
postal services due to strike, lockout or other cause) addressed to such holder
at the address of such holder as it appears upon the registry books of the
Rights Agent or, prior to the Separation Time, on the registry books of the
Corporation for the Common Shares (the Corporation hereby agreeing to furnish
copies of such records to the Rights Agent). The Corporation and the Rights
Agent may by notice to the other designate with respect to itself any other
address or individual. Any document or other communication given by personal
delivery shall be conclusively deemed to have been given on the day of actual
delivery thereof and, if given by first class postage prepaid mail, on the fifth
Business Day following the deposit thereof in the mail (it being acknowledged,
for greater certainty, that any such communication mailed to a holder of a Right
as herein provided shall be deemed to have been given whether or not the holder
receives such communication).
 
5.09  COSTS OF ENFORCEMENT
 
If the Corporation or any other Person, the securities of which are purchasable
upon exercise of the Rights, fails to fulfil any of its obligations pursuant to
this Agreement, then the Corporation or such Person shall reimburse any holder
of Rights for the costs and expenses (including reasonable legal fees) incurred
by such holder in any action to enforce his rights pursuant to any Rights or
this Agreement.
 
5.10  BENEFIT OF THE AGREEMENT
 
This Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the Corporation and the Rights Agent and upon the
heirs, executors, administrators, successors and assigns of the holders of
Rights. This Agreement shall be for the sole and exclusive benefit of the
Corporation, the Rights Agent and the holders of Rights and nothing in this
Agreement shall be construed to give any Person other than the Corporation, the
Rights Agent and the holders of Rights any legal or equitable right, remedy or
claim under this Agreement.
 
5.11  GOVERNING LAW
 
This Agreement and each Right issued hereunder shall be deemed to be a contract
made under the laws of the Province of Ontario and for all purposes shall be
governed by and construed in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein.
 
5.12  COUNTERPARTS
 
This Agreement may be executed in counterparts, each of which shall be
considered an original and both of which taken together shall constitute a
single agreement.
 
5.13  SEVERABILITY
 
If any term or provision hereof or the application thereof to any circumstance
shall, in any jurisdiction and to any extent, be invalid or unenforceable, such
provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof or the application of such provision to
circumstances other than those to which it is held invalid or unenforceable.
 
                                       56
<PAGE>   59
 
5.14  DETERMINATIONS AND ACTIONS BY THE BOARD
 
(1)   All actions, calculations, interpretations and determinations (including
      all omissions with respect to the foregoing) which are done or made by the
      Board, in good faith, shall not subject the Board to any liability to the
      holders of Rights.
 
(2)   Nothing contained in this Agreement shall be deemed to be in derogation of
      the obligation of the Board to exercise its fiduciary duties. Without
      limiting the generality of the foregoing, nothing contained herein shall
      be construed to suggest or imply that the Board shall not be entitled to
      recommend that the holders of the Voting Shares reject any Permitted Bid
      or any Competing Permitted Bid or any Take-Over Bid, or to take any other
      action (including, without limiting the generality of the foregoing, the
      commencement, prosecution, defence or settlement of any litigation and the
      submission of additional or alternative Permitted Bids or Competing
      Permitted Bids or Take-Over Bids) with respect to any Permitted Bid or any
      Competing Permitted Bid or any Take-Over Bid or otherwise that the Board
      believes is necessary or appropriate in the exercise of its fiduciary
      duties.
 
5.15  EFFECTIVE DATE
 
This Agreement is effective from the date hereof, provided that if the
amendments and restatements set forth herein are not confirmed by a resolution
passed by a majority of greater than 50% of the votes cast by holders of Voting
Shares who vote in respect of such amendments and restatements at the 1999
Annual Meeting of the Corporation then this Agreement, the Rights Plan and any
outstanding Rights shall continue in effect as set forth in the Shareholder
Rights Agreement made as of December 14, 1989 as amended and restated on April
24, 1995. There shall be excluded from the calculation of shares eligible to
vote at such meeting shares held by an Acquiring Person or by any Person who has
made or announced an intention to make a tender or exchange offer or Take-Over
Bid which, if consummated, would result in such Person holding in the aggregate
20% or more of the outstanding Voting Shares at the date of such bid.
 
5.16  RE-CONFIRMATION AFTER THREE YEARS
 
At every third Annual Meeting of Shareholders of the Corporation following the
1999 Annual Meeting, provided that a Flip-In Event has not occurred prior to
such time, the Board shall submit a resolution to the holders of Voting Shares
of the Corporation for their consideration and, if thought advisable, approval
ratifying the continued existence of the Rights. If a majority of greater than
50% of the votes cast by holders of Voting Shares who vote in respect of such
reconfirmation and approval is voted against the continued existence of the
Rights, then this Agreement, the Rights Plan and any outstanding Rights shall be
of no further force and effect. There shall be excluded from the calculation of
shares eligible to vote at such meeting shares held by an Acquiring Person or by
any Person who has made or announced an intention to make a tender or exchange
offer or Take-Over Bid which, if consummated, would result in such Person
holding in the aggregate 20% or more of the outstanding Voting Shares at the
date of such bid.
 
5.17  REGULATORY APPROVALS
 
Any obligation of the Corporation or action or event contemplated by this
Agreement, or any amendment or supplement to this Agreement, shall be subject to
the receipt of any requisite approval or consent from any governmental or
regulatory authority. Without limiting the generality of the foregoing, any
issuance or delivery of debt or equity securities (other than non-convertible
debt securities) of the Corporation upon the exercise of Rights and any
amendment or supplement to this Agreement shall be subject to the prior consent
of The Toronto Stock Exchange.
 
5.18  DECLARATION AS TO NON-CANADIAN HOLDERS
 
If in the opinion of the Board (who may rely upon the advice of counsel) any
action or event contemplated by this Agreement would require compliance by the
Corporation with the securities laws or comparable legislation of a jurisdiction
outside Canada, the Board acting in good faith shall take such actions as it may
deem appropriate to ensure such compliance. In no event shall the Corporation or
the
 
                                       57
<PAGE>   60
 
Rights Agent be required to issue or deliver Rights or securities issuable on
exercise of Rights to persons who are citizens, residents or nationals of any
jurisdiction other than Canada or the United States of America, in which such
issue or delivery would be unlawful without registration of the relevant Persons
or securities for such purposes.
 
                          ARTICLE 6 -- PERMITTED BIDS
 
6.01  PERMITTED BIDS
 
The expression "Permitted Bid" referred to in Section 1.01(ff) means a Take-Over
Bid made by an Offeror that is made by means of a Take-Over Bid circular sent to
holders of Voting Shares and which complies with the following additional
provisions:
 
      (i)  the Take-Over Bid is made to all holders of Voting Shares as
         registered on the books of the Corporation, other than the Offeror;
 
      (ii)  the Take-Over Bid contains, and the take-up and payment for
         securities tendered or deposited is subject to, the following
         irrevocable and unqualified provision that no Voting Shares will be
         taken up or paid for pursuant to the Take-Over Bid (A) prior to the
         close of business on the date which is not less than 60 calendar days
         following the date of the Take-Over Bid and (B) only if at such date
         more than 50% of the Voting Shares held by Independent Shareholders
         shall have been tendered or deposited pursuant to the Take-Over Bid and
         not withdrawn;
 
      (iii) unless the Take-Over Bid is withdrawn, the Take-Over Bid contains an
         irrevocable and unqualified provision that Voting Shares may be
         deposited pursuant to such Take-Over Bid at any time during the period
         of time described in Section 6.01(ii) and that any Voting Shares
         deposited pursuant to the Take-Over Bid may be withdrawn until taken up
         and paid for; and
 
      (iv) the Take-Over Bid also contains an irrevocable and unqualified
         condition that in the event that the deposit condition set forth in
         Section 6.01(ii)(B) is satisfied, the Offeror will make a public
         announcement of that fact and the Take-Over Bid will remain open for
         deposits and tenders of Voting Shares for not less than 10 Business
         Days from the date of such public announcement.
 
6.02  COMPETING PERMITTED BIDS
 
The expression "Competing Permitted Bid" referred to in Section 1.01(l) means a
Take-Over Bid that:
 
      (i)  is made for Voting Shares after a Permitted Bid or Competing
         Permitted Bid for Voting Shares has been made but prior to the expiry
         of such Permitted Bid or Competing Permitted Bid;
 
      (ii)  satisfies all of the conditions of the definition of Permitted Bid
         other than the requirements set out in Section 6.01(ii) (A); and
 
      (iii) contains, and the take-up and payment for securities tendered or
         deposited is subject to, an irrevocable and unqualified condition that
         no Voting Shares will be taken up and paid for pursuant to the
         Take-Over Bid prior to the close of business on a date which is not
         earlier than the later of (A) the 60th calendar day following the date
         on which the earliest Permitted Bid which preceded the Competing
         Permitted Bid was made and (B) 21 calendar days after the date of the
         Take-Over Bid constituting the Competing Permitted Bid.
 
                                       58
<PAGE>   61
 
IN WITNESS WHEREOF the parties have executed this Agreement on the date and year
above written.
 
<TABLE>
<S>                                       <C>
 
  ALCAN ALUMINIUM LIMITED                              CORPORATE
  PER:                                                   SEAL
  PER:                                                    OF
                                                         ALCAN
                                                       ALUMINIUM
                                                        LIMITED
 
  CIBC MELLON TRUST COMPANY                            CORPORATE
  PER:                                                   SEAL
  PER:                                                  OF THE
                                                   CIBC MELLON TRUST
                                                        COMPANY
</TABLE>
 
                                       59
<PAGE>   62
 
                                                                      SCHEDULE 1
 
                           FORM OF RIGHTS CERTIFICATE
 
Certificate No.  _______                                         _______  Rights
 
THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE CORPORATION, ON THE
TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN SECTION 3.01(2) OF THE SHAREHOLDER RIGHTS AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
SHAREHOLDER RIGHTS AGREEMENT) OR TRANSFEREES OF AN ACQUIRING PERSON MAY BECOME
VOID.
 
                               RIGHTS CERTIFICATE
 
This certifies that  _____________________ , or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Agreement made as of December 14, 1989, as
amended and restated from time to time (the "Rights Agreement") between Alcan
Aluminium Limited, a corporation incorporated under the laws of Canada (the
"Corporation") and CIBC Mellon Trust Company (successor to The Royal Trust
Company), a trust company incorporated under the laws of Canada, as Rights Agent
(the "Rights Agent") (which term shall include any successor Rights Agent under
the Rights Agreement) to purchase from the Corporation at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on May 1, 2008 one fully paid Common Share in the capital
of the Corporation (a "Common Share") at the Exercise Price referred to below,
upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed and submitted to the Rights Agent or
Co-Rights Agent at its principal office in any one of the Cities of Montreal,
Toronto, Winnipeg, Regina, Calgary, Vancouver or London, England. The Exercise
Price shall initially be $200 (U.S.) per Right and shall be subject to
adjustment in certain events as provided in the Rights Agreement.
 
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the registered office of the Corporation
and are available upon written request.
 
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
 
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be, and under certain circumstances are required to be, redeemed
by the Corporation at a redemption price of $0.01 per Right. No holder of this
Rights Certificate, as such, shall be entitled to vote or receive dividends or
be deemed for any purpose the holder of Common Shares or of any other securities
which may at any time be issuable upon the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
 
                                       60
<PAGE>   63
 
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
 
WITNESS the facsimile signature of the proper officers of the Corporation and
its corporate seal.
 
Date:
 
ATTEST:
 
        ALCAN ALUMINIUM LIMITED
 
By:
               Secretary
 
Countersigned:
 
       CIBC MELLON TRUST COMPANY
 
By:
         Authorized Signature
 
                                       61
<PAGE>   64
 
                               FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
                              Rights Certificate)
 
FOR VALUE RECEIVED
 
hereby sells, assigns and transfers unto
                 (Please print name and address of transferee)
 
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and
appoint ____________________________ , Attorney, to transfer the within Rights
Certificate on the books of the within-named Corporation, with full power of
substitution.
 
<TABLE>
<S>                                                  <C>
Dated:
                                                                       Signature
Signature Guaranteed:                                (Signature must correspond to the name as
                                                     written upon the face of this Rights
                                                     Certificate in every particular, without
                                                     alteration or enlargement or any change
                                                     whatsoever)
</TABLE>
 
Signature must be guaranteed by a member firm of a recognized stock exchange in
Canada, a registered national securities exchange in the United States of
America, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in Canada or
the United States of America.
                           (To be completed if true)
 
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the best of the knowledge of the undersigned, never have been,
Beneficially Owned by an Acquiring Person (as defined in the Rights Agreement)
after such person became an Acquiring Person.
 
<TABLE>
<S>                                                  <C>
                                                                     Signature
</TABLE>
 
                                       62
<PAGE>   65
 
                          FORM OF ELECTION TO EXERCISE
 
                  (To be attached to each Rights Certificate)
 
TO:
 
The undersigned hereby irrevocably elects to exercise  ___________________ whole
Rights represented by the attached Rights Certificate to purchase the Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
 
Name:
 
Street:
 
City, Province & Postal Code:
 
Social Insurance, Social Security or
Other Taxpayer Identification Number:
 
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
 
Name:
 
Street:
 
City, Province & Postal Code:
 
Social Insurance, Social Security or
Other Taxpayer Identification Number:
 
<TABLE>
<S>                                                  <C>
Dated:
                                                                       Signature
Signature Guaranteed:                                (Signature must correspond to the name as
                                                     written upon the face of this Rights
                                                     Certificate in every particular, without
                                                     alteration or enlargement or any change
                                                     whatsoever)
</TABLE>
 
Signature must be guaranteed by a member firm of a recognized stock exchange in
Canada, a registered national securities exchange in the United States of
America, a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in Canada or
the United States of America.
                           (To be completed if true)
 
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the best of the knowledge of the undersigned, never have been,
Beneficially Owned by an Acquiring Person (as defined in the Rights Agreement)
after such person became an Acquiring Person.
 
<TABLE>
<S>                                                  <C>
                                                                   Signature
</TABLE>
 
                                       63
<PAGE>   66
 
                                     NOTICE
 
In the event the certification set forth above in the Forms of Assignment and
Election is not completed, the Corporation will deem the Beneficial Owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Shareholder Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Rights Certificate issued in exchange for this Rights Certificate.
 
                      ------------------------------------
 
                                       64
<PAGE>   67
 
                                      (LOGO)
 
<TABLE>
<S>           <C>
                M - Official mark of Environment Canada.
              M - Marque officielle d'Environnement Canada.
</TABLE>
 
(LOGO)                                                         PRINTED IN CANADA
<PAGE>   68
                            ALCAN ALUMINIUM LIMITED

                                     PROXY

               SOLICITED BY THE BOARD OF DIRECTORS AND MANAGEMENT
            FOR THE ANNUAL MEETING OF SHAREHOLDERS ON 22 APRIL 1999

     The undersigned hereby appoints Jean Trudel, Joel Goldberg or Neil Wiener
or instead of them   _________________________________________ (see Notes below)
as proxyholder(s), with full power of substitution, to attend and to vote all
the Common Shares ("Shares") of Alcan Aluminium Limited held of record by the
undersigned on 3 March 1999 at the Annual Meeting of the holders of the Shares
to be held on 22 April 1999 and at any adjournment thereof.

Notes:

(1)  If you appoint the persons whose names are printed above to act as your
     proxyholders, the Shares represented by this Proxywill be voted or not
     voted, on any ballot that may be called, in accordance with the
     instructions, if any, you indicate in the spaces provided below. FAILING
     INSTRUCTIONS ON ANY MATTER, THE SHARES WILL BE VOTED FOR EACH OF THE
     MATTERS LISTED BELOW TO BE ACTED UPON AT THE MEETING.

(2)  YOU HAVE THE RIGHT TO APPOINT PERSON(S), OTHER THAN THOSE WHOSE NAMES ARE
     PRINTED ABOVE, AS YOUR PROXYHOLDER(S), TO ATTEND AND ACT ON YOUR BEHALF AT
     THE MEETING. YOU MAY USE THE SPACE PROVIDED ABOVE (OR ANOTHER APPROPRIATE
     FORM OF PROXY) FOR THAT PURPOSE. YOU ARE ADVISED IN YOUR OWN INTEREST TO
     SPECIFY A CHOICE FOR VOTING IN RESPECT OF EACH OF THE MATTERS TO BE ACTED
     UPON AT THE MEETING.

(3)  Please sign this Proxy and return it promptly whether or not you plan to
     attend the Meeting. Your right to attend and vote in person will not be
     affected.

(4)  If this Proxy is not dated, it will be deemed to bear the date on which it
     was mailed by Alcan Aluminium Limited.


<TABLE>

<S>  <C>            <C>   <C> 
1.   ELECTION OF    [ ]   VOTE FOR all nominees listed below
     DIRECTORS:           (except as indicated to the contrary
                          below)

                    [ ]   WITHHOLD VOTE
                          from all nominees listed below

</TABLE>

<TABLE>

<S>  <C>                    <C>               <C> 
     J. Bougie              J.R. Evans        G. Russell
     W. Chippindale         A.E. Gotlieb      G. Saint-Pierre
     E.R. Clitheroe         J.E. Newall       G. Schulmeyer
     T. Engen               P.H. Pearse       P.M. Tellier

</TABLE>

     To withhold authority to vote for any individual nominee, please write that
nominee's name on the line below:


2.  APPOINTMENT OF PRICEWATERHOUSECOOPERS AS AUDITORS:

   [ ] VOTE FOR     [ ] WITHHOLD VOTE


3.  APPROVAL OF AMENDMENTS TO AND RESTATEMENT OF SHAREHOLDER RIGHTS PLAN

   [ ] VOTE FOR     [ ] VOTE AGAINST

     Proxyholders are authorized to vote, at their discretion, on matters
concerning the conduct of the Meeting.


Signature(s) ___________________________________


Date ___________________________________________



(logo of Recycled Paper)                                 Printed in Canada

<PAGE>   69
                            ALCAN ALUMINIUM LIMITED

                                               Shareholder Number_______________


                      ANNUAL MEETING IDENTIFICATION TICKET

     If you attend the Annual Meeting in person, please present this
personalized ticket at the entrance; it will facilitate verification of your
status as a Shareholder.

     The Annual Meeting will be held at 10:00 a.m. on 22 April 1999, in the
Assembly Hall, International Civil Aviation Organization, Atrium entrance, 999
University Street, Montreal, Quebec, Canada.

------------------------------------------------------------------------------
                                  DETACH HERE

                                               Shareholder Number_______________

CHANGE OF ADDRESS

     If the address shown has changed, please PRINT the correct addressbelow and
return this part with the Proxy.


Address _______________________________________________________________________

_______________________________________________________________________________



Postal code _________________ Telephone ( __________ )_________________________
                                            Area.

Date ________________________ Signature _______________________________________


QUARTERLY REPORTS

     Alcan provides complete information to the press the day its quarterly
results are announced. Because of this, some of our Shareholders may not wish to
receive copies of Alcan's quarterly reports. By mailing these reports only to
those Shareholders who want them, we can achieve savings in both paper usage and
expense.

     IF YOU WISH TO RECEIVE ALCAN'S QUARTERLY REPORTS, PLEASE CHECK HERE AND
RETURN THIS PART WITH THE PROXY. PLEASE NOTE THAT YOU MUST RENEW THIS REQUEST
ANNUALLY.    [ ]                                                   

     If this part is not returned, we will assume you do not wish to receive the
quarterly reports. You will, however, continue to receive Alcan's Annual Report
and associated proxy material.


     You may change your instructions in this regard at any time by calling
Alcan Shareholder Services at 1-888-252-5226 (toll-free).