SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): September 26, 2006
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(Exact
name of Registrant as specified in its
charter)
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(State
or other jurisdiction of incorporation)
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1-3677
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Inapplicable
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Commission
File Number
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(I.R.S.
Employer Identification No.)
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1188
Sherbrooke Street West, Montreal, Quebec, Canada H3A
3G2
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(Address
of principal executive offices, including postal
code)
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(514)
848-8000
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(Registrant's
telephone number, including area code)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Restricted
Share Unit Plan
On
September 21, 2006, the Board of Directors of Alcan Inc. (“Alcan”), upon
recommendation of the Human Resources Committee of the Board (“Committee”),
approved a new long term compensation plan for executives, the Alcan Restricted
Share Unit Plan (“RSU Plan”).
The
RSU
Plan provides the Committee with the authority to grant Restricted Share Units
(“RSUs”) to eligible participants including employees of the Company or its
subsidiaries. The RSUs will have a vesting period of no longer than three years.
The Committee may establish performance conditions to the vesting; if no such
conditions are included in a RSU award, the RSUs will become vested on the
basis
of time. The grant price of a RSU shall be the Fair Market Value (defined as
the
average of the closing prices of Alcan’s Common Shares on the New York Stock
Exchange over the previous 21 trading days) on the date of the grant. The
participants will also be credited additional RSUs in relation to the
declaration of dividends on the Common Shares of the Company. The RSUs will
be
redeemed in cash at the end of the vesting period based on the Fair Market
Value
on that date multiplied by the number of RSUs held by the
participant.
Canadian
participants in the RSU Plan will be allowed to elect irrevocably to cancel
some
or all of the RSUs in exchange for the right to receive an equivalent amount
of
Deferred Share Units (“DSUs”) under the Executive Deferred Share Unit Plan
(“EDSUP”) (see below) upon vesting together with further DSUs as a Company
incentive to encourage these participants to commit to an equity-related
investment in the Company. Participants in countries other than Canada will
be
allowed to irrevocably elect to cancel some or all of the RSUs in exchange
for
the right to receive an alternate equity-related investment in the Company
together with a Company incentive to encourage participants to commit to such
investment.
The
form
of the RSU award agreement provides for the grant of RSUs with a three-year
time
vesting period and provides that participants will be awarded an additional
20%
of the RSU value in the form of a company incentive if a participant elects
to
exchange the RSUs into an equity-related investment (as described
above).
Amendment
to Executive Deferred Share Unit Plan
On
September 21, 2006, the Board of Directors of Alcan, upon recommendation of
the
Committee, amended the EDSUP. Under the EDSUP, eligible executives based in
Canada may elect to receive Deferred Share Units (“DSUs”) for their Executive
Performance Award (i.e. annual bonus) and their Award under the Alcan Total
Shareholder Return Performance Plan (“TSR Plan”) instead of a cash payment. The
EDSUP was amended to allow eligible executives to receive DSUs instead of a
cash
payment related to RSUs at the end of their vesting period.
Amendment
to Total Shareholder Return Performance Plan
On
September 20, 2006, the Committee approved amendments to the TSR Plan which
is a
long-term incentive compensation plan for senior executives. The amendment
to
the TSR Plan included the following substantive changes:
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changing
of the comparator peer group from the Standard & Poor’s Industrial
Composite Index to the Standard & Poor’s Materials
Index;
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changing
the maximum payout from 300% to 250% of the Target Cash
Award;
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changing
the number of days to calculate the Award from five trading days
to 21
trading days before the grant for the calculation of the TSR performance;
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adding
the possibility to exchange the cash Award payment into an equity-related
investment in the Company and receiving a Company incentive to encourage
participants to commit to an equity-related investment in the Company;
and
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amending
the form of Award Agreement to reflect the amendments described above
and
to establish that the Company incentive would represent 20% of the
value
of the Award exchanged by the
participant.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ALCAN
INC.
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BY:
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/s/
Roy Millington
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Roy
Millington
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Date:
September 26, 2006