Exhibit 10.1
2013 Arconic Stock Incentive Plan, as Amended and Restated
SECTION 1. PURPOSE. The purpose of the 2013 Arconic Stock Incentive Plan is to
encourage selected Directors and Employees to acquire a proprietary interest in
the long-term growth and financial success of the Company and to further link
the interests of such individuals to the long-term interests of shareholders.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms have the
meanings set forth below:
“Affiliate” shall have the meaning set forth in Rule 12b-2 under Section 12 of
the Securities Exchange Act of 1934, as amended.
“Award” means any Option, Stock Appreciation Right, Restricted Share Award,
Restricted Share Unit, or any other right, interest, or option relating to
Shares or other property granted pursuant to the provisions of the Plan.
“Award Agreement” means any written or electronic agreement, contract, or other
instrument or document evidencing any Award granted by the Committee hereunder,
which may, but need not, be executed or acknowledged by both the Company and the
Participant.
“Board” means the Board of Directors of the Company.
“Change in Control” means the occurrence of an event set forth in any one of the
following paragraphs:
(a) any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the U.S. Securities Exchange Act of 1934, as amended) (a “Person”)
becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under
the U.S. Securities Exchange Act of 1934, as amended) of 30% or more of either
(A) the then-outstanding Shares (the “Outstanding Company Common Stock”) or (B)
the combined voting power of the then-outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that, for purposes
hereof, the following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its Affiliates or (iv) any
acquisition pursuant to a transaction that complies with clauses (i), (ii) and
(iii) of paragraph (c) of this definition;
(b) individuals who, as of May 24, 2017, constituted the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to May 24,
2017 whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least two-thirds of the directors then comprising
the Incumbent Board shall be considered as though such individual was a member
of the Incumbent Board; but, provided, further, that any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be considered a member of the Incumbent
Board unless and until such individual is elected to the Board at an annual
meeting of the Company occurring after the date such individual initially
assumed office, so long as such election occurs pursuant to a nomination
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board, which nomination is not made pursuant to a Company contractual
obligation;
(c) consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving the Company or any of its
Subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or stock of another entity
by the Company or any of its Subsidiaries (each, a “Business Combination”), in
each case unless, following such Business Combination, (i) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, 55% or more of the then-outstanding shares of common stock (or, for
a non-corporate entity, equivalent securities) and the combined voting power of
the then-outstanding voting securities entitled to vote generally in the
election of directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more Subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then-outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) of the entity resulting from such
Business Combination or the combined voting power of the
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then-outstanding voting securities of such entity entitled to vote generally in
the election of directors (or, for a non-corporate entity, equivalent
securities), except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members of the board
of directors (or, for a non-corporate entity, equivalent governing body) of the
entity resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement or of the action of
the Board providing for such Business Combination; or
(d) the shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company.
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
“Committee” means the Compensation and Benefits Committee of the Board, any
successor to such committee or a subcommittee thereof or, if the Board so
determines, another committee of the Board, in each case composed of no fewer
than two directors, each of whom is a Non-Employee Director and an “outside
director” within the meaning of Section 162(m).
“Company” means Arconic Inc., a Delaware corporation (formerly known as Alcoa
Inc.).
“Contingency Period” has the meaning set forth in SECTION 8.
“Covered Employee” means a “covered employee” within the meaning of
Section 162(m)(3) of the Code.
“Director” means a member of the Board who is not an Employee.
“Employee” means any employee (including any officer or employee director) of
the Company or of any Subsidiary.
“Equity Restructuring” means a nonreciprocal transaction between the Company and
its shareholders, such as a stock dividend, stock split (including a reverse
stock split), spin-off, rights offering or recapitalization through a large,
nonrecurring cash dividend, that affects the Shares (or other securities of the
Company) or the price of Shares (or other securities) and causes a change in the
per share value of the Shares underlying outstanding Awards.
“Executive Officer” means an officer who is designated as an executive officer
by the Board or by its designees in accordance with the definition of executive
officer under Rule 3b-7 of the U.S. Securities Exchange Act of 1934, as amended.
“Exercisable Time-Based Award” has the meaning set forth in SECTION 12.
“Fair Market Value” with respect to Shares on any given date means the closing
price per Share on that date as reported on the New York Stock Exchange or other
stock exchange on which the Shares principally trade. If the New York Stock
Exchange or such other exchange is not open for business on the date fair market
value is being determined, the closing price as reported for the next business
day on which that exchange is open for business will be used.
“Family Member” has the same meaning as such term is defined in Form S-8 (or any
successor form) promulgated under the U.S. Securities Act of 1933, as amended.
“Non-Employee Director” has the meaning set forth in Rule 16b-3(b)(3) under the
U.S. Securities Exchange Act of 1934, as amended, or any successor definition
adopted by the U.S. Securities and Exchange Commission.
“Option” means any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period or
periods as the Committee shall determine. All Options granted under the Plan are
intended to be nonqualified stock options for purposes of the Code.
“Other Awards” has the meaning set forth in SECTION 10.
“Participant” means an Employee or a Director who is selected to receive an
Award under the Plan.
“Performance Award” means any award granted pursuant to SECTION 11 hereof in the
form of Options, Stock Appreciation Rights, Restricted Share Units, Restricted
Shares or other awards of property, including cash, that have a performance
feature described in SECTION 11.
“Performance Period” means that period established by the Committee at the time
any Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are to
be measured. A Performance Period may not be less than one year.
“Plan” means this 2013 Arconic Stock Incentive Plan, as amended and restated and
as may be further amended from time to time.
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“Prior Plans” mean the 2009 Alcoa Stock Incentive Plan, 2004 Alcoa Stock
Incentive Plan, the Long Term Stock Incentive Plan of Aluminum Company of
America, and the Alcoa Stock Incentive Plan, each as amended and restated from
time to time.
“Replacement Award” means an Award resulting from adjustments or substitutions
referred to in Section 4(f) herein, provided that such Award is issued by a
company (foreign or domestic) the majority of the equity of which is listed
under and in compliance with the domestic company listing rules of the New York
Stock Exchange or with a similarly liquid exchange which has comparable
standards to the domestic company listing standards of the New York Stock
Exchange.
“Restricted Shares” has the meaning set forth in SECTION 8.
“Restricted Share Unit” has the meaning set forth in SECTION 9.
“Section 162(m)” means Section 162(m) of the Code as in effect prior to its
amendment by the Tax Cuts and Jobs Act, P.L. 115-97; all references in the Plan
to sections or subsections of Section 162(m) shall be construed accordingly.
“Shares” means the shares of common stock of the Company, $1.00 par value.
“Stock Appreciation Right” means any right granted under SECTION 7.
“Subsidiary” means any corporation or other entity in which the Company owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock in such corporation or entity, and any
corporation, partnership, joint venture, limited liability company or other
business entity as to which the Company possesses a significant ownership
interest, directly or indirectly, as determined by the Committee.
“Substitute Awards” means Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted, or
the right or obligation to make future awards, by a company acquired by the
Company or any of its Subsidiaries or with which the Company or any of its
Subsidiaries combines.
“Time-Based Award” means any Award granted pursuant to the Plan that is not a
Performance Award.
SECTION 3. ADMINISTRATION. The Plan shall be administered by the Committee. The
Committee shall have full power and authority, subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time to
time be adopted by the Board, to: (i) select the Employees of the Company and
its Subsidiaries to whom Awards may from time to time be granted hereunder; (ii)
determine the type or types of Award to be granted to each Employee Participant
hereunder; (iii) determine the number of Shares to be covered by each Employee
Award granted hereunder; (iv) determine the terms and conditions of any Employee
Award granted hereunder, and make modifications to such terms and conditions
with respect to any outstanding Employee Award, in each case, which are not
inconsistent with the provisions of the Plan; (v) determine whether, to what
extent and under what circumstances Employee Awards may be settled in cash,
Shares or other property or canceled or suspended; (vi) determine whether, to
what extent and under what circumstances cash, Shares and other property and
other amounts payable with respect to an Employee Award under this Plan shall be
deferred either automatically or at the election of the Participant; (vii)
interpret and administer the Plan and any instrument or agreement entered into
under the Plan; (viii) determine whether any corporate transaction, such as a
sale or spin-off of a division or business unit, or a joint venture, shall be
deemed to result in a Participant’s termination of service for purposes of
Awards granted under the Plan; (ix) establish such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (x) make any other determination and take any other action that
the Committee deems necessary or desirable for administration of the Plan,
including, without limiting the generality of the foregoing, make any
determinations necessary to effectuate the purpose of Section 12(a)(v) below.
Decisions of the Committee shall be final, conclusive and binding upon all
persons, including the Company, any Participant and any shareholder; provided
that the Board shall approve any decisions affecting Director Awards.
The Board shall have full power and authority, upon the recommendation of the
Governance and Nominating Committee of the Board to: (i) select the Directors of
the Company to whom Awards may from time to time be granted hereunder;
(ii) determine the type or types of Award to be granted to each Director
Participant hereunder; (iii) determine the number of Shares to be covered by
each Director Award granted hereunder; (iv) determine the terms and conditions
of any Director Award granted hereunder, and make modifications to such terms
and conditions with respect to any outstanding Director Award, in each case,
which are not inconsistent with the provisions of the Plan; (v) determine
whether, to what extent and under what circumstances Director Awards may be
settled in cash, Shares or other property or canceled or suspended; and
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(vi) determine whether, to what extent and under what circumstances cash, Shares
and other property and other amounts payable with respect to a Director Award
under this Plan shall be deferred either automatically or at the election of the
Director.
Notwithstanding any provision to the contrary in the Plan or in any policy of
the Company regarding compensation payable to a Director, the sum of the grant
date fair value (determined in accordance with Financial Accounting Standards
Board Accounting Standards Codification Topic 718, or any successor thereto) of
all Awards payable in Shares and the maximum cash value of any other Award
granted under the Plan to an individual as compensation for services as a
Director, together with cash compensation paid to the Director in the form of
Board and Committee retainer, meeting or similar fees, during any calendar year
shall not exceed $750,000. For avoidance of doubt, compensation shall count
towards this limit for the calendar year in which it was granted or earned, and
not later when distributed, in the event it is deferred.
SECTION 4. SHARES SUBJECT TO THE PLAN.
(a) Number of Shares Reserved under the Plan. Subject to the adjustment
provisions of Section 4(f) below and the provisions of Section 4(b), commencing
May 6, 2016, up to 46,666,666 Shares may be issued under the Plan (which
reflects an increase of 28,333,333 Shares from 18,333,333, the original number
of Shares that were authorized for issuance under the Plan as of May 3, 2013).
Each Share issued pursuant to an Award other than an Option or a Stock
Appreciation Right shall count as 2.33 Shares for purposes of the foregoing
authorization. Each Share issued pursuant to an Option or Stock Appreciation
Right shall be counted as one Share for each Option or Stock Appreciation Right.
(b) Share Replenishment. In addition to the Shares authorized by Section 4(a),
the following Shares shall become available for issuance under the Plan:
(i) Shares underlying Awards that are granted under the Plan, which are
subsequently forfeited, cancelled or expire in accordance with the terms of the
Award, and (ii) Shares underlying Awards that had previously been granted under
Prior Plans that are outstanding as of the date of the Plan, which are
subsequently forfeited, cancelled or expire in accordance with the terms of the
Award. The following Shares shall not become available for issuance under the
Plan: (x) Shares tendered in payment of an Option or other Award, and (y) Shares
withheld for taxes. Shares purchased by the Company using Option proceeds shall
not be added to the Plan limit and if Stock Appreciation Rights are settled in
Shares, each Stock Appreciation Right shall count as one Share whether or not
Shares are actually issued or transferred under the Plan.
(c) Issued Shares. Shares shall be deemed to be issued hereunder only when and
to the extent that payment or settlement of an Award is actually made in Shares.
Notwithstanding anything herein to the contrary, the Committee may at any time
authorize a cash payment in lieu of Shares, including without limitation if
there are insufficient Shares available for issuance under the Plan to satisfy
an obligation created under the Plan.
(d) Source of Shares. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued Shares, treasury Shares or Shares purchased in
the open market or otherwise.
(e) Substitute Awards. Shares issued or granted in connection with Substitute
Awards shall not reduce the Shares available for issuance under the Plan or to a
Participant in any calendar year.
(f) Adjustments. Subject to SECTION 12:
(i) Corporate Transactions other than an Equity Restructuring. In the event of
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other distribution (other than normal cash dividends) of
Company assets to shareholders, or any other change affecting the Shares or the
price of the Shares other than an Equity Restructuring, the Committee shall make
such adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change with respect to (i) the aggregate number and
kind of shares that may be issued under the Plan (including, but not limited to,
adjustments of the limitations in Sections 4(a) and 13(f) hereof); (ii) the
terms and conditions of any outstanding Awards (including, without limitation,
any applicable performance targets or criteria with respect thereto); and
(c) the grant or exercise price per Share for any outstanding Awards under the
Plan. Any adjustment affecting an Award intended to be “performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code, shall be
made consistent with the requirements of Section 162(m).
In the event of any transaction or event described above in this Section 4(f)(i)
or any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations or accounting
principles, the Committee, on such terms and
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conditions as it deems appropriate, either by the terms of the Award or by
action taken prior to the occurrence of such transaction or event (except that
action to give effect to a change in applicable laws or accounting principles
may be made within a reasonable period of time after such change), is hereby
authorized to take actions, including but not limited to any one or more of the
following actions, whenever the Committee determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Award under the Plan, to facilitate such transactions or events or to
give effect to such changes in laws, regulations or principles, provided that
the number of Shares subject to any Award will always be a whole number:
(A)

To provide for either (I) termination of any such Award in exchange for an
amount of cash, if any, equal to the amount that would have been attained upon
the exercise of such Award or realization of the Participant’s rights (and, for
the avoidance of doubt, if as of the date of the occurrence of the transaction
or event described above in this Section 4(f)(i) the Committee determines in
good faith that no amount would have been attained upon the exercise of such
Award or realization of the Participant’s rights, then such Award may be
terminated by the Company without payment) or (II) the replacement of such Award
with other rights or property selected by the Committee in its sole discretion;

(B)

To provide that such Award be assumed by the successor or survivor corporation,
or a parent or subsidiary thereof, or shall be substituted for by similar
options, rights or awards covering the stock of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices;

(C)

To make adjustments in the number and type of Shares (or other securities or
property) subject to outstanding Awards, and in the number and kind of
outstanding Restricted Shares and/or in the terms and conditions of (including
the grant or exercise price), and the criteria included in, outstanding options,
rights and awards;

(D)

To provide that such Award shall be exercisable or payable or fully vested with
respect to all Shares covered thereby; or

(E)

To provide that the Award cannot vest, be exercised or become payable after such
event.

(ii) Equity Restructuring. In connection with the occurrence of any Equity
Restructuring, and notwithstanding anything to the contrary in this
Section 4(f), the Committee will adjust the terms of the Plan and each
outstanding Award as it deems equitable to reflect the Equity Restructuring,
which may include (i) adjusting the number and type of securities subject to
each outstanding Award and/or with respect to which Awards may be granted under
the Plan (including, but not limited to, adjustments of the limitations in
Sections 4(a) and 13(f) hereof); (ii) adjusting the terms and conditions of 
(including the grant or exercise price), and the performance targets or other
criteria included in, outstanding Awards; and (iii) granting new Awards or
making cash payments to Participants. The adjustments provided under this
Section 4(f)(ii) will be nondiscretionary and final and binding on all
interested parties, including the affected Participant and the Company; provided
that the Committee will determine whether an adjustment is equitable and the
number of Shares subject to any Award will always be a whole number.
(iii) Awards under Prior Plans. Any outstanding Awards granted under Prior Plans
before the expiration date of the Prior Plans shall continue to be subject to
the terms and conditions of the Prior Plans.
SECTION 5. ELIGIBILITY. Any Director or Employee shall be eligible to be
selected as a Participant.
SECTION 6. STOCK OPTIONS. Options may be granted hereunder to Participants
either alone or in addition to other Awards granted under the Plan. Any Option
granted under the Plan may be evidenced by an Award Agreement in such form as
the Committee from time to time approves. Any such Option shall be subject to
the terms and conditions required by this SECTION 6 and to such additional terms
and conditions, not inconsistent with the provisions of the Plan, as the
Committee may deem appropriate in each case.
(a) Option Price. The purchase price (or Option price) per Share purchasable
under an Option shall be determined by the Committee in its sole discretion;
provided that, except in connection with an adjustment provided for in
Section 4(f) or Substitute Awards, such purchase price shall not be less than
the Fair Market Value of one Share on the date of the grant of the Option. The
Committee may, in its sole discretion, establish a limit on the amount of gain
that can be realized on an Option.
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(b) Option Period. The term of each Option granted hereunder shall not exceed
ten years from the date the Option is granted.
(c) Exercisability. Options shall be exercisable at such time or times as
determined by the Committee at or subsequent to grant, provided, however, that
the minimum vesting period of an Option shall be one year, except in connection
with an adjustment provided for in Section 4(f) or Substitute Awards.
(d) Method of Exercise. Subject to the other provisions of the Plan, any Option
may be exercised by the Participant in whole or in part at such time or times,
and the Participant may make payment of the Option price in such form or forms,
including, without limitation, payment by delivery of cash, Shares or other
consideration (including, where permitted by law and the Committee, Awards)
having a fair market value on the exercise date equal to the total Option price,
or by any combination of cash, Shares and other consideration as the Committee
may specify in the applicable Award Agreement.
SECTION 7. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be granted
to Participants on such terms and conditions as the Committee may determine,
subject to the requirements of the Plan. A Stock Appreciation Right shall confer
on the holder a right to receive, upon exercise, the excess of  (i) the Fair
Market Value of one Share on the date of exercise or, if the Committee shall so
determine, at any time during a specified period before the date of exercise
over (ii) the grant price of the right on the date of grant, or if granted in
connection with an outstanding Option on the date of grant of the related
Option, as specified by the Committee in its sole discretion, which, except in
the case of Substitute Awards or in connection with an adjustment provided in
Section 4(f), shall not be less than the Fair Market Value of one Share on such
date of grant of the right or the related Option, as the case may be. Any
payment by the Company in respect of such right may be made in cash, Shares,
other property or any combination thereof, as the Committee, in its sole
discretion, shall determine. The Committee may, in its sole discretion,
establish a limit on the amount of gain that can be realized on a Stock
Appreciation Right.
(a) Grant Price. The grant price for a Stock Appreciation Right shall be
determined by the Committee, provided, however, and except as provided in
Section 4(f) and Substitute Awards, that such price shall not be less than 100%
of the Fair Market Value of one Share on the date of grant of the Stock
Appreciation Right.
(b) Term. The term of each Stock Appreciation Right shall not exceed ten years
from the date of grant, or if granted in tandem with an Option, the expiration
date of the Option. The minimum vesting period of a Stock Appreciation Right
shall be one year, except in connection with an adjustment provided for in
Section 4(f) or Substitute Awards.
(c) Time and Method of Exercise. The Committee shall establish the time or times
at which a Stock Appreciation Right may be exercised in whole or in part.
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SECTION 8. RESTRICTED SHARES.
(a) Definition. A Restricted Share means any Share issued with the contingency
or restriction that the holder may not sell, transfer, pledge or assign such
Share and with such other contingencies or restrictions as the Committee, in its
sole discretion, may impose (including, without limitation, any contingency or
restriction on the right to vote such Share and the right to receive any cash
dividends), which contingencies and restrictions may lapse separately or in
combination, at such time or times, in installments or otherwise, as the
Committee may deem appropriate.
(b) Issuance. A Restricted Share Award shall be subject to contingencies or
restrictions imposed by the Committee during a period of time specified by the
Committee (the “Contingency Period”). Restricted Share Awards may be issued
hereunder to Participants, for no cash consideration or for such minimum
consideration as may be required by applicable law, either alone or in addition
to other Awards granted under the Plan. The terms and conditions of Restricted
Share Awards need not be the same with respect to each recipient.
(c) Registration. Any Restricted Share issued hereunder may be evidenced in such
manner as the Committee in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of Restricted Shares awarded under the Plan, such certificate shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions, contingencies and restrictions applicable to
such Award.
(d) Forfeiture. Except as otherwise determined by the Committee at the time of
grant or thereafter or as otherwise set forth in the terms and conditions of an
Award, upon termination of service for any reason during the Contingency Period,
all Restricted Shares still subject to any contingency or restriction shall be
forfeited by the Participant and reacquired by the Company.
(e) Minimum Restrictions. Restricted Share Awards that are restricted only on
the passage of time shall have a minimum three-year pro-rata restriction period
(the restrictions lapse each year as to 1/3 of the Restricted Share Awards),
except in connection with an adjustment provided for in Section 4(f) or
Substitute Awards; provided, however, that a restriction period of less than
this period may be approved for Awards with respect to up to 5% of the Shares
authorized under the Plan.
(f) Section 83(b) Election. A Participant may, with the consent of the
Committee, make an election under Section 83(b) of the Code to report the value
of Restricted Shares as income on the date of grant.
SECTION 9. RESTRICTED SHARE UNITS.
(a) Definition. A Restricted Share Unit is an Award of a right to receive, in
cash or Shares, as the Committee may determine, the Fair Market Value of one
Share, the grant, issuance, retention and/or vesting of which is subject to such
terms and conditions as the Committee may determine at the time of the grant,
which shall not be inconsistent with this Plan.
(b) Terms and Conditions. In addition to the terms and conditions that may be
established at the time of a grant of Restricted Share Unit Awards, the
following terms and conditions apply:
(i) Restricted Share Unit Awards may not be sold, pledged (except as permitted
under Section 15(a)) or otherwise encumbered prior to the date on which the
Shares are issued, or, if later, the date on which any applicable contingency,
restriction or performance period lapses.
(ii) Restricted Share Unit Awards that are vested only due to the passage of
time shall have a minimum three-year pro-rata vesting period (1/3 vests each
year), except in connection with an adjustment provided for in Section 4(f) or
Substitute Awards; provided, however, that a vesting period of less than
three years may be approved for Restricted Share Unit Awards with respect to up
to 5% of the Shares authorized under the Plan.
(iii) Shares (including securities convertible into Shares) subject to
Restricted Share Unit Awards may be issued for no cash consideration or for such
minimum consideration as may be required by applicable law. Shares (including
securities convertible into Shares) purchased pursuant to a purchase right
granted under this SECTION 9 thereafter shall be purchased for such
consideration as the Committee shall in its sole discretion determine, which
shall not be less than the Fair Market Value of such Shares or other securities
as of the date such purchase right is granted.
(iv) The terms and conditions of Restricted Share Unit Awards need not be the
same with respect to each recipient.
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SECTION 10. OTHER AWARDS. Other Awards of Shares and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, Shares or
other property (“Other Awards”) may be granted to Participants. Other Awards may
be paid in Shares, cash or any other form of property as the Committee shall
determine. Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the Participants to whom, and the time or
times at which, such Awards shall be made, the number of Shares to be granted
pursuant to such Awards and all other conditions of the Awards. The terms and
conditions of Other Awards need not be the same with respect to each recipient.
Other Awards shall not exceed 5% of the Shares available for issuance under this
Plan.
SECTION 11. PERFORMANCE AWARDS. Awards with a performance feature are referred
to as “Performance Awards.” Performance Awards may be granted in the form of
Options, Stock Appreciation Rights, Restricted Share Units, Restricted Shares or
Other Awards with the features and restrictions applicable thereto. The
performance criteria to be achieved during any Performance Period and the length
of the Performance Period shall be determined by the Committee upon the grant of
each Performance Award, provided that the minimum performance period shall be
one year. Performance Awards may be paid in cash, Shares, other property or any
combination thereof in the sole discretion of the Committee. The performance
levels to be achieved for each Performance Period and the amount of the Award to
be paid shall be conclusively determined by the Committee. Except as provided in
SECTION 12, each Performance Award shall be paid following the end of the
Performance Period or, if later, the date on which any applicable contingency or
restriction has ended.
SECTION 12. CHANGE IN CONTROL PROVISIONS.
(a) Effect of a Change in Control on Existing Awards under this Plan.
Notwithstanding any other provision of the Plan to the contrary, unless the
Committee shall determine otherwise at the time of grant with respect to a
particular Award, in the event of a Change in Control:
(i) any Time-Based Award consisting of Options, Stock Appreciation Rights or any
other Time-Based Award in the form of rights that are exercisable by
Participants upon vesting (“Exercisable Time-Based Award”), that is outstanding
as of the date on which a Change in Control shall be deemed to have occurred and
that is not then vested, shall become vested and exercisable, unless replaced by
a Replacement Award;
(ii) any Time-Based Award that is not an Exercisable Time-Based Award that is
outstanding as of the date on which a Change in Control shall be deemed to have
occurred and that is not then vested, shall become free of all contingencies,
restrictions and limitations and shall become vested and transferable, unless
replaced by a Replacement Award;
(iii) any Replacement Award for which an Exercisable Time-Based Award has been
exchanged upon a Change in Control shall vest and become exercisable in
accordance with the vesting schedule and term for exercisability that applied to
the corresponding Exercisable Time-Based Award immediately prior to such Change
in Control, provided, however, that if within twenty four (24) months of such
Change in Control, the Participant’s service with the Company or a Subsidiary is
terminated without Cause (as such term is defined in the Arconic Inc. Change in
Control Severance Plan) or by the Participant for Good Reason (as such term is
defined in the Arconic Inc. Change in Control Severance Plan), such Award shall
become vested and exercisable to the extent outstanding at the time of such
termination of service. Any Replacement Award that has become vested and
exercisable pursuant to this paragraph shall expire on the earlier of  (A)
thirty six (36) months following the date of termination of such Participant’s
service (or, if later, the conclusion of the applicable post-termination
exercise period pursuant to the applicable Award Agreement) and (B) the last day
of the term of such Replacement Award;
(iv) any Replacement Award for which a Time-Based Award that is not an
Exercisable Time-Based Award has been exchanged upon a Change in Control shall
vest in accordance with the vesting schedule that applied to the corresponding
Time-Based Award immediately prior to such Change in Control, provided, however,
that if within twenty four (24) months of such Change in Control, the
Participant’s service with the Company or a Subsidiary is terminated without
Cause (as such term is defined in the Arconic Inc. Change in Control Severance
Plan) or by the Participant for Good Reason (as such term is defined in the
Arconic Inc. Change in Control Severance Plan), such Award shall become free of
all contingencies, restrictions and limitations and become vested and
transferable to the extent outstanding;
(v) any Performance Award shall be converted so that such Award is no longer
subject to any performance condition referred to in SECTION 11 above, but
instead is subject to the passage of time, with the number or value of such
Replacement Award determined as follows: (A) if 50% or more of the Performance
Period has been completed as of the date on which such Change in Control is
deemed to have occurred, the number or value of such Award shall be based on
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actual performance during the Performance Period; or (B) if less than 50% of the
Performance Period has been completed as of the date on which such Change in
Control is deemed to have occurred, the number or value of such Award shall be
the target number or value. Paragraphs (i) through (iv) above shall govern the
terms of such Time-Based Award.
(b) Change in Control Settlement. Notwithstanding any other provision of this
Plan, if approved by the Committee, upon a Change in Control, a Participant may
receive a cash settlement under clauses (i) and (ii) below of existing Awards
that are vested and exercisable as of the date on which such Change in Control
shall be deemed to have occurred:
(i) a Participant who holds an Option or Stock Appreciation Right may, in lieu
of the payment of the purchase price for the Shares being purchased under the
Option or Stock Appreciation Right, surrender the Option or Stock Appreciation
Right to the Company and receive cash, within 30 days of the Change in Control
in an amount equal to the amount by which the Fair Market Value of the Shares on
the date of the Change in Control exceeds the purchase price per Share under the
Option or Stock Appreciation Right multiplied by the number of Shares granted
under the Option or Stock Appreciation Right; and
(ii) a Participant who holds Restricted Share Units may, in lieu of receiving
Shares which have vested under Section 12(a)(ii) of this Plan, receive cash,
within 30 days of a Change in Control, in an amount equal to the Fair Market
Value of the Shares on the date of the Change in Control multiplied by the
number of Restricted Share Units held by the Participant.
SECTION 13. CODE SECTION 162(m) PROVISIONS.
(a) Notwithstanding any other provision of this Plan, if the Committee
determines at the time a Restricted Share Award, a Performance Award or a
Restricted Share Unit Award is granted to a Participant that such Participant
is, or is likely to be as of the end of the tax year in which the Company would
claim a tax deduction in connection with such Award, a Covered Employee, then
the Committee may provide that this SECTION 13 is applicable to such Award.
(b) If an Award is subject to this SECTION 13, then the lapsing of contingencies
or restrictions thereon and the distribution of cash, Shares or other property
pursuant thereto, as applicable, shall be subject to the achievement by the
Company on a consolidated basis, and/or by specified Subsidiaries or divisions
or business units of the Company, as appropriate, of one or more objective
performance goals established by the Committee. Performance goals shall be set
by the Committee (and any adjustments shall be made by the Committee) within the
time period prescribed by, and shall otherwise comply with, the requirements of
Section 162(m) and the regulations thereunder.
(c) As the Committee deems appropriate, performance goals established by the
Committee may be based upon (x) the achievement of specified levels of Company,
Subsidiary, division or business unit performance under one or more of the
measures described below, (y) the improvement in Company, Subsidiary, division
or business unit performance under one or more of the measures, and (z) Company,
Subsidiary or business unit performance under one or more of the measures
relative to the performance of other comparator companies or groups of companies
or an external index or indicator. Performance goals may include a threshold
level of performance below which no Award will be earned, levels of performance
at which an Award will become partially earned, and a level of performance at
which an Award will be fully earned. Any of the measures listed below, as
applicable, may be calculated to exclude special items, unusual or infrequently
occurring items or nonrecurring items or may be normalized for fluctuations in
market forces, including, but not limited to, foreign currency exchange rates
and the price of aluminum on the London Metal Exchange:
(i) earnings, including earnings margin, operating income, earnings before or
after taxes, and earnings before or after interest, taxes, depreciation, and
amortization;
(ii) book value per share;
(iii) pre-tax income, after-tax income, income from continuing operations, or
after tax operating income;
(iv) operating profit;
(v) earnings per common share (basic or diluted);
(vi) return on assets (net or gross);
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(vii) return on capital;
(viii) return on invested capital;
(ix) sales, revenues or growth in or returns on sales or revenues;
(x) share price appreciation;
(xi) total shareholder return;
(xii) cash flow, operating cash flow, free cash flow, cash flow return on
investment (discounted or otherwise), cash on hand, reduction of debt, capital
structure of the Company including debt to capital ratios;
(xiii) implementation or completion of critical projects or processes;
(xiv) economic profit, economic value added or created;
(xv) cumulative earnings per share growth;
(xvi) achievement of cost reduction goals;
(xvii) return on shareholders’ equity;
(xviii) total shareholders’ return;
(xix) reduction of days working capital, working capital or inventory;
(xx) operating margin or profit margin;
(xxi) capital expenditures;
(xxii) cost targets, reductions and savings, productivity and efficiencies;
(xxiii) strategic business criteria, consisting of one or more objectives based
on market penetration, geographic business expansion, customer satisfaction
(including product quality and delivery), employee satisfaction, human resources
management (including diversity representation), supervision of litigation,
information technology, and goals relating to acquisitions, divestitures, joint
ventures and similar transactions, and budget comparisons;
(xxiv) personal professional objectives, including any of the foregoing
performance measures, the implementation of policies and plans, the negotiation
of transactions, the development of long-term business goals, formation of joint
ventures, research or development collaborations, technology and best practice
sharing within the Company, and the completion of other corporate goals or
transactions;
(xxv) sustainability measures, community engagement measures or environmental,
health or safety goals of the Company or the Subsidiary or business unit of the
Company for or within which the Participant is primarily employed; or
(xxvi) audit and compliance measures.
(d) Notwithstanding any provision of this Plan other than Section 4(f) and
SECTION 12, with respect to any Award that is subject to this SECTION 13, the
Committee may adjust downwards, but not upwards, the amount payable pursuant to
such Award, and the Committee may not waive the achievement of the applicable
performance goals.
(e) The Committee shall have the power to impose such other restrictions on
Awards subject to this SECTION 13 as it may deem necessary or appropriate to
ensure that such Awards satisfy all requirements for “performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code.
(f) For purposes of complying with Section 162(m) limitations on
“performance-based compensation,” and subject to the adjustment provisions of
Section 4(f), no Participant may be granted Options and/or Stock Appreciation
Rights in any calendar year with respect to more than 3,333,333 Shares, or
Restricted Share Awards or Restricted Share Unit Awards covering more than
1,333,333 Shares. The maximum dollar value payable with respect to Performance
Awards that are valued with reference to property other than Shares and granted
to any Participant in any one calendar year is $15,000,000.
SECTION 14. AMENDMENTS AND TERMINATION. The Board may amend, alter, suspend,
discontinue or terminate the Plan or any portion thereof at any time; provided
that notwithstanding any other provision in this Plan, no such amendment,
alteration, suspension, discontinuation or termination shall be made:
(a) without shareholder approval, if such approval would be required pursuant to
applicable law or the requirements of the New York Stock Exchange or such other
stock exchange on
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which the Shares trade; or (b) without the consent of the affected Participant,
if such action would impair the rights of such Participant under any outstanding
Award, except as provided in Sections 15(e) and 15(f). Notwithstanding anything
to the contrary herein, the Committee may amend the Plan in such manner as may
be necessary so as to have the Plan conform to local rules and regulations in
any jurisdiction outside the United States or to qualify for or comply with any
tax or regulatory requirement for which or with which the Board or Committee
deems it necessary or desirable to qualify or comply. For clarity, this
paragraph shall apply to all Awards granted under the Plan, whether granted
prior to or following the amendment and restatement of the Plan effective on
May 6, 2016.
SECTION 15. GENERAL PROVISIONS.
(a) Transferability of Awards. Awards may be transferred by will or the laws of
descent and distribution. Except as set forth herein, awards shall be
exercisable, during the Participant’s lifetime, only by the Participant or, if
permissible under applicable law, by the Participant’s guardian or legal
representative. Unless otherwise provided by the Committee or limited by
applicable laws, a Participant may, in the manner established by the Committee,
designate a beneficiary to exercise the rights of the Participant with respect
to any Award upon the death of the Participant. Unless otherwise provided by the
Committee or limited by applicable laws, Awards may be transferred to one or
more Family Members, individually or jointly, or to a trust whose beneficiaries
include the Participant or one or more Family Members under terms and conditions
established by the Committee. The Committee shall have authority to determine,
at the time of grant, any other rights or restrictions applicable to the
transfer of Awards; provided however, that no Award may be transferred to a
third party for value or consideration. Except as provided in this Plan or the
terms and conditions established for an Award, any Award shall be null and void
and without effect upon any attempted assignment or transfer, including, without
limitation, any purported assignment, whether voluntary or by operation of law,
pledge, hypothecation or other disposition, attachment, divorce or trustee
process or similar process, whether legal or equitable.
(b) Award Entitlement. No Employee or Director shall have any claim to be
granted any Award under the Plan and there is no obligation for uniformity of
treatment of Employees or Directors under the Plan.
(c) Terms and Conditions of Award. The prospective recipient of any Award under
the Plan shall be deemed to have become a Participant subject to all the
applicable terms and conditions of the Award upon the grant of the Award to the
prospective recipient, unless the prospective recipient notifies the Company
within 30 days of the grant that the prospective recipient does not accept the
Award. This Section 15(c) is without prejudice to the Company’s right to require
a Participant to affirmatively accept the terms and conditions of an Award.
(d) Award Adjustments. Except as provided in SECTION 13, the Committee shall be
authorized to make adjustments in Performance Award criteria or in the terms and
conditions of other Awards in recognition of unusual or nonrecurring events
affecting the Company or its financial statements or changes in applicable laws,
regulations or accounting principles. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem desirable to carry it into effect.
(e) Committee Right to Cancel. The Committee shall have full power and authority
to determine whether, to what extent and under what circumstances any Award
shall be canceled or suspended at any time prior to a Change in Control: (i) if
an Employee, without the consent of the Committee, while employed by the Company
or a Subsidiary or after termination of such employment, becomes associated
with, employed by, renders services to or owns any interest (other than an
interest of up to 5% in a publicly traded company or any other nonsubstantial
interest, as determined by the Committee) in any business that is in competition
with the Company or any Subsidiary; (ii) in the event of the Participant’s
willful engagement in conduct which is injurious to the Company or any
Subsidiary, monetarily or otherwise; (iii) in the event of an Executive
Officer’s misconduct described in Section 15(f); or (iv) in order to comply with
applicable laws as described in Section 15(h) below. For purposes of clause
(ii), no act, or failure to act, on the Participant’s part shall be deemed
“willful” unless done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that the Participant’s act, or failure to
act, was in the best interest of the Company or a Subsidiary. In the event of a
dispute concerning the application of this Section 15(e), no claim by the
Company shall be given effect unless the Board determines that there is clear
and convincing evidence that the Committee has the right to cancel an Award or
Awards hereunder, and the Board finding to that effect is adopted by the
affirmative vote of not less than three quarters of the entire membership of the
Board (after reasonable notice to the Participant and an opportunity for the
Participant to provide information to the Board in such manner as the Board, in
its sole discretion, deems to be appropriate under the circumstances).
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(f) Clawback. Notwithstanding any other provision of the Plan to the contrary,
in accordance with the Company’s Corporate Governance Guidelines, if the Board
learns of any misconduct by an Executive Officer that contributed to the Company
having to restate all or a portion of its financial statements, the Board will,
to the full extent permitted by governing law, in all appropriate cases, effect
the cancellation and recovery of Awards (or the value of Awards) previously
granted to the Executive Officer if: (i) the amount of the Award was calculated
based upon the achievement of certain financial results that were subsequently
the subject of a restatement, (ii) the executive engaged in intentional
misconduct that caused or partially caused the need for the restatement, and
(iii) the amount of the Award had the financial results been properly reported
would have been lower than the amount actually awarded. Furthermore, all Awards
(including Awards that have vested in accordance with the Award Agreement) shall
be subject to the terms and conditions, if applicable, of any other recoupment
policy adopted by the Company from time to time or any recoupment requirement
imposed under applicable laws, rules, regulations or stock exchange listing
standards, including, without limitation, recoupment requirements imposed
pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, Section 304 of the Sarbanes-Oxley Act of 2002, or any
regulations promulgated thereunder, or recoupment requirements under the laws of
any other jurisdiction.
(g) Stock Certificate Legends. All certificates for Shares delivered under the
Plan pursuant to any Award shall be subject to such stock transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the U.S. Securities and Exchange
Commission, any stock exchange upon which the Shares are then listed and any
applicable Federal or state securities law, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to
such restrictions.
(h) Compliance with Securities Laws and Other Requirements. No Award granted
hereunder shall be construed as an offer to sell securities of the Company, and
no such offer shall be outstanding, unless and until the Company in its sole
discretion has determined that any such offer, if made, would be in compliance
with all applicable requirements of the U.S. Federal securities laws and any
other laws, rules, regulations, stock exchange listing or other requirements to
which such offer, if made, would be subject. Without limiting the foregoing, the
Company shall have no obligation to issue or deliver Shares pursuant to Awards
granted hereunder prior to: (i) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable, and (ii)
completion of any registration or other qualification with respect to the Shares
under any applicable law in the United States or in a jurisdiction outside of
the United States or procurement of any ruling or determination of any
governmental body that the Company determines to be necessary or advisable or at
a time when any such registration, qualification or determination is not
current, has been suspended or otherwise has ceased to be effective. The
inability or impracticability of the Company to obtain or maintain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained, and shall constitute circumstances in which the Committee may
determine to amend or cancel Awards pertaining to such Shares, with or without
consideration to the affected Participants.
(i) Dividends. No Award of Options or Stock Appreciation Rights shall have the
right to receive dividends or dividend equivalents. A recipient of an Award of
Restricted Shares shall receive dividends on the Restricted Shares subject to
such contingencies or restrictions, if any, as the Committee, in its sole
discretion, may impose. Dividend equivalents shall accrue on Restricted Share
Units (including Restricted Share Units that have a performance feature) and
shall only be paid if and when such Restricted Share Units vest, unless
otherwise determined by the Committee. Dividend equivalents that accrue on
Restricted Share Units will be calculated at the same rate as dividends paid on
the common stock of the Company. Notwithstanding any provision herein to the
contrary, no dividends or dividend equivalents shall be paid on Restricted Share
Units that have not vested or on Restricted Share Units that have not been
earned during a Performance Period.
(j) Consideration for Awards. Except as otherwise required in any applicable
Award Agreement or by the terms of the Plan, recipients of Awards under the Plan
shall not be required to make any payment or provide consideration other than
the rendering of services.
(k) Delegation of Authority by Committee. The Committee may delegate to one or
more Executive Officers or a committee of Executive Officers the right to grant
Awards to Employees who are not Executive Officers or Directors of the Company
and to cancel or suspend Awards to Employees who are not Executive Officers or
Directors of the Company.
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(l) Tax Obligations. The Company shall be authorized to withhold from any Award
granted or payment due under the Plan the amount of Tax Obligations due in
respect of an Award or payment hereunder and to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such Tax Obligations, including without limitation requiring the
Participant to pay cash, withholding otherwise deliverable cash or Shares having
a fair market value equal to the amount required to be withheld, forcing the
sale of Shares issued pursuant to an Award (or exercise or vesting thereof)
having a fair market value equal to the amount required to be withheld, or
requiring the Participant to deliver to the Company already-owned Shares having
a fair market value equal to the amount required to be withheld. For purposes of
the foregoing, “Tax Obligations” means tax, social insurance and social security
liability obligations and requirements in connection with the Awards, including,
without limitation, (i) all U.S. Federal, state, and local income, employment
and any other taxes (including the Participant’s U.S. Federal Insurance
Contributions Act (FICA) obligation) that are required to be withheld by the
Company (or a Subsidiary, as applicable), (ii) the Participant’s and, to the
extent required by the Company (or a Subsidiary, as applicable), the Company’s
(or a Subsidiary’s) fringe benefit tax liability, if any, associated with the
grant, vesting, or exercise of an Award or sale of Shares issued under the
Award, and (iii) any other taxes, social insurance, social security liabilities
or premium for which the Participant has an obligation, or which the Participant
has agreed to bear, with respect to such Award (or exercise thereof or issuance
of Shares or other consideration thereunder). Furthermore, the Committee shall
be authorized to, but is not required to, establish procedures for election by
Participants to satisfy such obligations for the payment of such taxes by
delivery of or transfer of Shares to the Company or by directing the Company to
retain Shares otherwise deliverable in connection with the Award. All personal
taxes applicable to any Award under the Plan are the sole liability of the
Participant.
(m) Other Compensatory Arrangements. Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in specific
cases.
(n) Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the laws of the United
States, shall be governed by the laws of the State of New York, United States of
America, without reference to principles of conflict of laws, and construed
accordingly.
(o) Severability. If any provision of this Plan is or becomes or is deemed
invalid, illegal or unenforceable in any jurisdiction, or would disqualify the
Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to applicable laws or
if it cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan, it shall be stricken and
the remainder of the Plan shall remain in full force and effect.
(p) Awards to Non-U.S. Employees. Awards may be granted to Employees and
Directors who are foreign nationals or residents or employed outside the United
States, or both, on such terms and conditions different from those applicable to
Awards to Employees and Directors who are not foreign nationals or residents or
who are employed in the United States as may, in the judgment of the Committee,
be necessary or desirable in order to recognize differences in local law,
regulations or tax policy. Without limiting the generality of the foregoing, the
Committee or the Board, as applicable, are specifically authorized to (i) adopt
rules and procedures regarding the conversion of local currency, withholding
procedures and handling of stock certificates which vary with local requirements
and (ii) adopt sub-plans, Award Agreements and Plan and Award Agreement addenda
as may be deemed desirable to accommodate foreign laws, regulations and
practice. The Committee also may impose conditions on the exercise or vesting of
Awards in order to minimize the Company’s or a Subsidiary’s obligation with
respect to tax equalization for Employees on assignments outside their home
countries. Notwithstanding the discretion of the Committee under this section,
the Participant remains solely liable for any applicable personal taxes.
(q) Repricing Prohibited. Except as provided in Section 4(f), the terms of
outstanding Options or Stock Appreciation Rights may not be amended, and action
may not otherwise be taken without shareholder approval, to: (i) reduce the
exercise price of outstanding Options or Stock Appreciation Rights, (ii) cancel
outstanding Options or Stock Appreciation Rights in exchange for Options or
Stock Appreciation Rights with an exercise price that is less than the exercise
price of the original Options or Stock Appreciation Rights, or (iii) replace
outstanding Options or Stock Appreciation Rights in exchange for other Awards or
cash at a time when the exercise price of such Options or Stock Appreciation
Rights is higher than the Fair Market Value of a Share.
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(r) Deferral. The Committee may require or permit Participants to elect to defer
the issuance of Shares or the settlement of Awards in cash or other property to
the extent that such deferral complies with Section 409A of the Code and any
regulations or guidance promulgated thereunder. The Committee may also authorize
the payment or crediting of interest, dividends or dividend equivalents on any
deferred amounts.
(s) Compliance with Section 409A of the Code. Except to the extent specifically
provided otherwise by the Committee and notwithstanding any other provision of
the Plan, Awards under the Plan are intended to satisfy the requirements of
Section 409A of the Code (and the Treasury Department guidance and regulations
issued thereunder) so as to avoid the imposition of any additional taxes or
penalties under Section 409A of the Code. If the Committee determines that an
Award, payment, distribution, transaction or any other action or arrangement
contemplated by the provisions of the Plan would, if undertaken, cause a
Participant to become subject to any additional taxes or other penalties under
Section 409A of the Code, then unless the Committee specifically provides
otherwise, such Award, payment, distribution, transaction or other action or
arrangement shall not be given effect to the extent it causes such result and
the related provisions of the Plan and/or Award Agreement will be deemed
modified, or, if necessary, suspended in order to comply with the requirements
of Section 409A of the Code to the extent determined appropriate by the
Committee, in each case without the consent of or notice to the Participant.
Although the Company may attempt to avoid adverse tax treatment under
Section 409A of the Code, the Company makes no representation to that effect and
expressly disavows any covenant to maintain favorable or avoid unfavorable tax
treatment. The Company shall be unconstrained in its corporate activities
without regard to the potential negative tax impact on holders of Awards under
the Plan.
(t) Effect of Headings. The Section headings and subheadings herein are for
convenience of reference only, are not to be considered a part hereof, and shall
in no way modify or restrict any of the terms or provisions hereof.
SECTION 16. TERM OF PLAN. No Award shall be granted pursuant to the Plan after
May 2, 2023, but any Award theretofore granted may extend beyond that date. The
Plan became effective upon its approval by the Company’s shareholders on May 3,
2013 and was subsequently amended and restated by the Board and re-approved by
shareholders, effective May 6, 2016. On March 27, 2018, the Board approved a
second amendment and restatement of the Plan, which was approved by the
Company’s shareholders on May 16, 2018.
SECTION 17. TERMINATION OF PRIOR PLAN. No stock options or other awards may be
granted under the Amended and Restated 2009 Alcoa Stock Incentive Plan after
May 2, 2013, but all such awards theretofore granted shall extend for the full
stated terms thereof and be administered under the Amended and Restated 2009
Alcoa Stock Incentive Plan. Notwithstanding any other provision to the contrary,
all outstanding awards previously granted under Prior Plans shall be governed by
the terms and conditions of the applicable Prior Plans under which such awards
were granted.
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