EXHIBIT NO. 99.2: ALCAN INC. 2001 DEFERRED SHARE UNIT PLAN FOR NON-EXECUTIVE
DIRECTORS.
ALCAN INC.
2001 DEFERRED SHARE UNIT PLAN
FOR
NON-EXECUTIVE DIRECTORS
ADOPTED WITH EFFECT FROM 1 APRIL 2001
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1. PURPOSE AND DEFINITIONS
1.1 Purpose
The purpose of this Plan is to enhance the Company's ability to attract
and retain talented individuals to serve as members of the Board of
Directors of the Company and to promote a greater alignment of interests
between Members and the shareholders of the Company.
1.2 Definitions
Unless the context indicates otherwise, the following terms have the
following meanings:
(a) "Account" means a book account maintained by the Company
reflecting the Units credited to each Member pursuant to Article
4.1.
(b) "Average Share Price" means the average of the closing sale
prices for board lots for the Shares on The Toronto Stock
Exchange and for record lots for the Shares as reported on the
New York Stock Exchange - Consolidated Trading, on each day
during the last five trading days prior to the date on which
Units are awarded with respect to a Quarter pursuant to Articles
4.1.1 and 4.1.2, the dividend declaration date (pursuant to
Article 4.1.3) or the redemption date (pursuant to Articles 4.2,
4.3 and 4.4, as applicable), any currency conversion being made
at the Bank of Canada noon rate of exchange on the relevant day.
(c) "Board" means the board of directors of the Company.
(d) "Committee" means any committee of the Board and any successor
committee (and includes the Personnel Committee).
(e) "Company" means Alcan Inc. and any successor corporation whether
by amalgamation, merger or otherwise.
(f) "Director" means a director of the Company.
(g) "Employee" means an employee (otherwise than in the capacity of
a director) of the Company or of any company in which the
Company holds more than fifty percent of the outstanding voting
shares.
(h) "Director's Annual Remuneration" means all amounts payable to a
Non-Executive Director by the Company in respect of the services
provided to the Company by the Non-Executive Director in a
calendar year.
(i) "Member" means an individual who joins the Plan in accordance
with Article 3.
(j) "Non-Executive Director" means a Director of the Company who is
not an Employee.
(k) "Personnel Committee" means the Personnel Committee of the Board
and any successor committee.
(l) "Plan" means this Alcan Inc. 2001 Deferred Share Unit Plan for
Non-Executive Directors, as amended by the Board from time to
time.
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(m) "Quarter" means a period of three consecutive calendar months
commencing on the first day of the months of January, April,
July or October, as the case may be.
(n) "Retirement Date" means the date on which a Member ceases to be
a Director (subject to Article 4.5).
(o) "Secretary" means the Secretary of the Company.
(p) "Share" means a common share of the Company.
(q) "Spouse" means the person, who, on the day preceding the death
of a Member, is the person who has been designated in accordance
with Article 5.1 of the Plan and who is legally married to the
Member or, in the event the Member is not married, the person
who qualifies as a spouse under the laws applying to the Plan.
(r) "Unit" means a unit of measurement for record-keeping purposes
under the Plan, and shall include fractional units.
2. CONSTRUCTION AND INTERPRETATION
2.1 The effective date of the Plan shall be 1 April, 2001.
2.2 The Plan shall be governed and interpreted in accordance with the
laws of the Province of Quebec and the applicable laws of Canada.
2.3 If any provision of the Plan is determined to be void or
unenforceable in whole or in part, such determination shall not
affect the validity or enforcement of any other provision or part
thereof.
2.4 Headings are for reference purposes only and do not limit or extend
the meaning of the provisions of the Plan.
2.5 References to the masculine include the feminine; references to the
singular shall include the plural and vice versa.
3. ELIGIBILITY MEMBERSHIP AND RETIREMENT
3.1 Every person who is a Non-Executive Director on 1 April, 2001 shall
be eligible to become a Member as of that date.
3.2 Every person who becomes a Non-Executive Director after 1 April, 2001
shall be eligible to become a Member as of the date he becomes such a
Director.
3.3 Upon becoming eligible to become a Member, the Director shall signify
his intention of becoming a Member by signing a form prescribed for
this purpose and delivering it to the Secretary. Membership in the
Plan becomes effective upon receipt by the Secretary of such duly
executed prescribed form.
3.4 Subject to Article 4.5, a Member shall be deemed to retire on the
date he ceases to be a Director.
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3.5 Nothing herein shall be deemed to give any Member the right to
be retained as a Director of the Company.
4. BENEFITS
4.1 Calculation of Benefits
4.1.1 Annual Compensation of Non-Executive Directors
Effective 1 April, 2001, each Member will receive his
Director's Annual Remuneration payable quarterly for the
Quarter commencing 1 April, 2001 and for each subsequent
Quarter as follows:
(a) 50% in Units; and
(b) 50% in Units or cash, as elected by the Member
pursuant to Article 4.1.2
Notwithstanding the provisions set out above in this
Article 4.1.1, the Personnel Committee shall have the
right, in its sole discretion, to require payment of a
Member's Director's Annual Remuneration solely in cash or
Units or a combination of cash and Units as determined by
the Personnel Committee.
Units granted to a Member pursuant to this Article 4.1.1 or
Article 4.1.2 shall be credited to the Member's Account on
the first day following the end of every applicable
Quarter. The portion of Director's Annual Remuneration
payable in cash in respect of a Quarter pursuant to this
Article 4.1.1 shall be paid as soon as practicable after
the last day of the applicable Quarter.
The number of Units (including fractional Units) to be
credited on each of the dates prescribed in this Article
4.1.1 shall be determined by dividing the amount of the
Director's Annual Remuneration to be satisfied by Units on
such date by the Average Share Price on such date.
Any currency conversion required for the purposes of this
Article 4.1 shall be made at the Bank of Canada noon rate
of exchange on the relevant day.
4.1.2 Election to Receive Units
To elect a form or forms of payment of Director's Annual
Remuneration pursuant to Article 4.1.1(b) for the year in
which this Plan becomes effective, the Member shall
complete and deliver to the Secretary an initial written
election by no later than 15 business days before the last
day of the Quarter commencing on or immediately after the
effective date of this Plan, respecting the Director's
Annual Remuneration payable for such Quarter and the
remaining Quarters for that year. To elect a change in the
form of payment of Director's Annual Remuneration for
subsequent years, the Member shall complete and deliver to
the Secretary a new written election by no later than the
last business day of the year preceding the first year in
which the Director's Annual Remuneration to which such
election applies becomes payable. The Member's election
under this Article 4.1.2 should be in a form prescribed by
the Personnel Committee and shall designate the percentage
of his Director's Annual Remuneration that is (i) to be
satisfied by Units, and (ii) to be paid in cash, such
designation to be in whole percentages only.
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In the absence of a new election made in accordance with
this Article 4.1.2, the Member's election for the latest
year with respect to the percentage of the Director's Annual
Remuneration that is to be satisfied by Units and paid in
cash shall continue to apply to all subsequent Director's
Annual Remuneration payments payable pursuant to the Plan
until the Member submits another written election in
accordance with this Article 4.1.2. An election shall be
irrevocable for the year commencing immediately following
the date of the election and for any subsequent year unless
the Member makes a new election in accordance with this
Article 4.1.2 by the last business day of the year
immediately prior to the year in respect of which the new
election is intended to apply.
If no election is made, and no prior election remains
effective, or if the Member does not make an initial
election in accordance with this Article 4.1.2, the Member
shall be deemed to have elected the Director's Annual
Remuneration payable to him pursuant to Article 4.1.1(b) to
be paid in cash.
4.1.3 Dividends
In respect of every cash dividend declared on the Shares,
each Member's Account will be credited with an additional
number of Units, determined as follows:
Units held in each respective Account
on dividend declaration date
multiplied by
a dollar amount equal to the dividend declared per Share
divided by
the Average Share Price.
The credit of such additional Units shall be made on the
dividend declaration date.
4.1.4 Certain Adjustments
In the event of a reorganization, recapitalization,
reclassification, stock split, stock dividend, combination
of shares, merger, amalgamation or consolidation, or the
sale, conveyance, lease or other transfer by the Company of
all or substantially all of the assets of the Company,
pursuant to any of which such events the then outstanding
Shares are split or combined or changed into, become
exchangeable at the holder's election for, or entitle the
holder thereof to, other shares of stock, or any similar
change in the Shares or other similar event, each Member's
Account shall be adjusted in an equitable manner to reflect
such change or other event. Such adjustment shall be made by
the Personnel Committee and shall be conclusive and binding
for all purposes of the Plan. Except as provided for in this
Article, Members shall have no other rights as a result of
any change in the Shares or of any other event.
For greater certainty, no amount will be paid to, or in
respect of, a Member under the Plan or pursuant to any other
arrangement, and no additional Units will be granted to such
Member to compensate for a downward fluctuation in the price
of Shares, nor will any other form of benefit be conferred
upon, or in respect of, a Member for such purpose.
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4.2 Payment of Benefits on Retirement
4.2.1 On a Member's Retirement Date, the Member will be able to
redeem the Units credited to his Account by filing a written
notice of redemption with the Secretary, specifying a
redemption date of at least 5 business days from the
delivery of the said notice to the Company but no later that
15 December of the first calendar year commencing after the
Director's Retirement Date. The Units credited to such
Member's Account will then be multiplied by the Average
Share Price on such redemption date. In any event, the
payment of the Member's benefits under the Plan will take
place no later than 31 December of the first calendar year
commencing after the Director's Retirement Date.
If a Member fails to advise the Company of his selection of
a redemption date within the above-mentioned period, the
redemption date shall be considered to be 15 December of the
first calendar year commencing after the Director's
Retirement Date.
4.2.2 The value of the redeemed Units shall be paid by the Company
to the Member as soon as possible after the determination of
the redemption date and the deduction of appropriate taxes
and other required withholdings (if any), at the Member's
option, in either:
(a) cash,
(b) Shares, or
(c) a combination thereof.
In the case of a payment in Shares, the Company will
purchase the Shares on the open market, through a broker, on
behalf of the Member. If, after the broker applies the value
of a Member's Units to the purchase of whole Shares as
provided in this Article 4.2.2, an amount remains payable
under the Plan in respect of a Member, the Company shall pay
such amount in cash, net of applicable withholdings, to the
Member or the Member's spouse or legal representative, as
applicable.
4.3 Benefits Before Retirement
4.3.1 Death
In the event of death of a Member prior to the Retirement
Date, the Spouse of such Member, or where there is no
surviving Spouse, the Member's legal representative, shall
be able to redeem the Units credited to the Member's Account
by filing a written notice of redemption with the Secretary,
specifying a redemption date of at least 5 business days
from the delivery of the said notice to the Company but no
later than 15 December of the first calendar year commencing
after the death of the Member. The same conditions of
payment will then apply to the Spouse (or the Member's legal
representative, as the case may be) as they would have
applied to the Member had he retired on that date.
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4.4 Death After Retirement
In the event that a Member dies after the Retirement Date, the Spouse
of such Member, or where there is no surviving Spouse the Member's
legal representative, shall, provided the Member had not already done
so, be able to redeem the Units credited to the Member's Account by
filing a written notice of redemption with the Secretary, specifying a
redemption date of at least 5 business days from the delivery of the
said notice to the Company but no later than 15 December of the first
calendar year commencing after the death of the Member. The same
conditions of payment will then apply to the Spouse (or the Member's
legal representative, as the case may be) as they would have applied
to the Member.
4.5 Suspension of Benefits upon becoming an Employee
4.5.1 Director becoming an Employee
If a Member becomes an Employee but continues to be a
Director, his membership in the Plan shall be suspended
effective the date of the commencement of his employment and
shall resume upon termination of such employment.
If prior to the termination of his employment, such Employee
Director ceases to be a Director, such Member will be deemed
to retire on the date he ceases to be an Employee.
4.6 Taxes
All benefits paid under the Plan or in respect of a Member who is not
a resident of Canada to the extent attributable to services performed
in Canada are subject to applicable tax legislation.
4.7 Currency
4.7.1 Unless Article 4.7.2 applies, all benefits under the Plan
shall be determined in the same currency as the Director's
Annual Remuneration.
4.7.2 A Member or his Spouse, or where there is no surviving
Spouse the Member's legal representative, may request the
Company to pay his benefits in a currency other than the
designated currency under Article 4.7.1, in which event the
currency conversion shall be made at the Bank of Canada noon
rate of exchange on the day preceding the date of payment.
5. BENEFICIARIES AND CLAIMS FOR BENEFITS
5.1 Every Member, upon becoming a Member, shall advise the Secretary in
writing of the name and address of his Spouse on a prescribed form.
Every Member shall advise the Company of any change in such
information.
5.2 In the event of death of a Member and provided that there is a
surviving Spouse, the benefits under the Plan shall only be paid to
the Spouse of such Member as named on the latest filing on the
prescribed form which has been delivered to the Secretary. Where there
is no surviving Spouse, the benefits under the Plan shall be paid to
the Member's legal representative pursuant to Articles 4.3 and 4.4.
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6. ADMINISTRATION
6.1 Unless otherwise determined by the Board, the Plan shall remain an
unfunded obligation of the Company and all benefits payable to or in
respect of Members under the Plan represent merely unfunded,
unsecured promises of the Company to pay a sum of money to the
Members in the future.
6.2 The Plan shall be administered by the Personnel Committee and any
question regarding the proper administration of the Plan or the
construction of any term of the Plan shall be resolved by the
Personnel Committee, in its sole discretion.
6.3 The Plan may be amended or terminated at any time by the Board,
except as to rights already accrued hereunder by the Members.
Notwithstanding the foregoing, any amendment or termination of the
Plan shall be such that the Plan continuously meets the requirements
of paragraph 6801(d) of the regulations under the Income Tax Act
(Canada) or any successor to such provision.
6.4 For the purpose of the above Article 6.3, the accrued right in
respect of a Member prior to his Retirement Date shall be a right to
receive benefits in accordance with the terms of the Plan up to but
excluding the date of the amendment or termination of the Plan.
6.5 The Company shall keep accurate and detailed records of all
transactions for all Accounts and provide quarterly benefit
statements to Members.
6.6 All expenses associated with the establishment, maintenance and
termination of this Plan shall be borne by the Company.
7. NON-ALIENATION
7.1 Except as provided for herein, no transfer by a Member of any right
to any payment or benefit under the Plan, whether voluntary or
involuntary, by operation of law or otherwise, and whether by means
of alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind,
shall vest the transferee with any interest or right, and any attempt
to so alienate, sell, transfer, pledge, attach, charge or otherwise
encumber any such amount, whether presently or thereafter payable
shall be void and of no force or effect.
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