Exhibit 10.1



 

Exhibit 10.1

 




ALCAN

Alcan Inc.

	1188 Sherbrooke Street West	
		Tel:   (514) 848-8000

	Montreal, Quebec H3A 3G2	Fax:  (514) 848-8115
	Canada	www.alcan.com


 

May
11, 2004

PERSONAL AND
CONFIDENTIAL

Mr.
Brian W. Sturgell

Executive
Vice-President

Office
of the President

Alcan
Inc.

1188
  Sherbrooke Street West

Montreal, Quebec  H3A 3G2

RE: Project Archer

Dear
Brian:

Project Archer (the "Project") relates to a
value-maximizing transaction involving substantially all of the rolled products
businesses owned by Alcan prior to its acquisition of Pechiney. Our plan is to
announce an intention to implement the Project as a distribution (commonly
referred to as a "spin-out") to Alcan shareholders of shares of RP Newco (a new
entity to which, as part of the Project, we intend to transfer the said rolled
products businesses).  The ultimate structure and conditions of the Project
will, of course, be under the full control of our Board of Directors.  The
actual implementation of the Project will require regulatory approvals and, as
currently planned, shareholder approval.

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

Notwithstanding our respective intentions and
support for the Project, its completion is not a certainty.  This lack of
certainty combined with the nature of the Project and your designated role
create potential challenges in relation to (i) the effective and successful
separation of the RP Newco from the other Alcan businesses; (ii) the careful
and responsible management of all of Alcan's businesses pending completion of
the Project, (iii) your future with Alcan in the event that the Project is not
completed or, after the completion of the Project, you are not retained as the
Chief Executive Officer of RP Newco; and (iv) the safeguarding of the interests
of Alcan shareholders in relation to the Project and the process leading to its
completion.  

 


 ALCAN

-2-





 

 

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

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

(i)                 is
not completed within a period of ten months following its announcement, or 

(ii)               
is
completed but upon completion you do not occupy the position of Chief Executive
Officer of RP Newco or its substantial equivalent, 

Alcan undertakes that
you shall have the same rights as regards the termination of your employment as
those which would apply if there were to be a change of control affecting Alcan
as defined in Section 1 of the Change of Control Agreement entered with you on
August 1, 2002, with the date of change of control for such purpose being
deemed to be the earlier of:


		 	
			a)

			b)

			c)
	
			the
completion of the transaction which will form the basis of the Project, 

			the
expiry of the said ten month period, or

			the
date upon which you receive written notification from Alcan that you will not
occupy the position of Chief Executive Officer of RP Newco or its substantial
equivalent,





Alcan also agrees that
for the limited purposes of this letter the termination indemnity payable
pursuant to the Change of Control Agreement shall be based upon 36 months as
opposed to 24 months.

2.   As part of your obligations
as a senior executive of Alcan, you undertake (i) to act in good faith and
cooperate reasonably with a view to the completion of the Project in the best
interests of Alcan as a whole as determined by the Board of Directors, (ii) to
conduct yourself as an employee of Alcan and use your influence as one of its
senior executives so that the interests of Alcan as a whole are fairly
protected and well-managed in a manner consistent with past practice until such
time as the transaction which will form the basis of the Project actually takes
place, and (iii) to conduct yourself so as to facilitate the due exercise by
the Board of Directors of the fiduciary and other duties to which it is bound
in the context of the Project.

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

 


 ALCAN

-3-





 

 

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

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

Yours very truly,

 

 

 

ALCAN INC.  

Per: __________________

            Travis Engen

            President and Chief Executive
Officer

In duplicate

Seen and agreed

Montreal, 11 May, 2004

_____________________

Brian W. Sturgell