Exhibit 10.1

Execution Version

SETTLEMENT AGREEMENT

This settlement agreement (this “Agreement”), dated as of May 22, 2017, is
entered into by and among Arconic Inc., a Pennsylvania corporation (the
“Company”), Elliott Associates, L.P., a Delaware limited partnership (“Elliott
Associates”), Elliott International, L.P., a Cayman Islands limited partnership
(“Elliott International”), and Elliott International Capital Advisors Inc., a
Delaware corporation (“EICA” and collectively with Elliott Associates and
Elliott International, “Elliott”; each of Elliott Associates, Elliott
International and EICA is an “Elliott Party”). Each of the Company and the
Elliott Parties is referred to herein as a “Party” and, collectively, as the
“Parties.” Certain capitalized terms used herein are defined in paragraph 17
below.

WHEREAS, the Company’s 2017 annual meeting of shareholders is scheduled to be
held on May 25, 2017 (including any adjournment or postponement thereof, the
“Annual Meeting”);

WHEREAS, L. Rafael Reif has submitted his resignation as a member of the Board
of Directors of the Company (the “Board”) to be effective as of immediately
following the Annual Meeting, and the Board has resolved (a) to appoint James
“Jim” F. Albaugh to fill the vacancy resulting from Mr. Reif’s resignation, with
such appointment to be effective as of immediately following the Annual Meeting,
and (b) that Mr. Albaugh will be a member of the “Incumbent Board” for the
purposes of the Amendment and Restatement of the Trust Agreement between Wells
Fargo Bank, N.A. (as successor trustee) and Arconic Inc., dated September 24,
2007, as amended;

WHEREAS, Elliott and the Company have each nominated certain individuals for
election as directors at the Annual Meeting; and

WHEREAS, Elliott and the Company desire to withdraw certain of their respective
director nominations in furtherance of the shared objective of working together
in a positive and constructive manner for the benefit of all shareholders.

NOW, THEREFORE, in consideration of the mutual representations, warranties and
covenants and subject to the conditions set forth in this Agreement, and
intending to be legally bound hereby, the Parties agree as follows:

 

  1. Withdrawal of Elliott Director Nominations. Each Elliott Party, on behalf
of itself and its Affiliates, hereby irrevocably withdraws the nomination of
Bernd F. Kessler notified by or on behalf of it to the Company in connection
with the Annual Meeting and any related materials or notices submitted to the
Company in connection therewith or related thereto (in respect of Mr. Kessler
only), and agrees not to nominate any new nominee for election at the Annual
Meeting in substitution for Mr. Kessler, so that its nominees for election at
the Annual Meeting shall consist only of Christopher L. Ayers, Elmer L. Doty and
Patrice E. Merrin (the “Elliott Nominees”). Each Elliott Party hereby further
(a) agrees that all votes on any proxies that have been or may be received by or
on behalf of any Elliott Party for the election of Mr. Kessler at the Annual
Meeting will be disregarded, and (b) withdraws and terminates all requests for
stock list materials and other books and records of the Company under
Section 1508 of the Pennsylvania Business Corporation Law or other statutory or
regulatory provisions providing for shareholder access to books and records.

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  2. Withdrawal of Company Director Nominations. The Company hereby irrevocably
withdraws the nominations of James “Jim” F. Albaugh, Amy E. Alving and Janet C.
Wolfenbarger in connection with the Annual Meeting, and agrees not to nominate
any new nominees for election at the Annual Meeting in substitution for
Mr. Albaugh, Dr. Alving or General Wolfenbarger, so that its nominees for
election at the Annual Meeting shall consist only of David P. Hess and Ulrich R.
Schmidt (the “Company Nominees”). The Company hereby further agrees that all
votes on any proxies that have been or may be received by or on behalf of the
Company for the election of Mr. Albaugh, Dr. Alving and General Wolfenbarger at
the Annual Meeting will be disregarded.

 

  3. Voting of Elliott Shares. At the Annual Meeting, the Elliott Parties will
cause to be present for quorum purposes all Company common stock that the
Elliott Parties or any of their respective controlling or controlled Affiliates
have the right to vote as of the record date for such meeting, and vote or cause
to be voted all such common stock (a) in favor of the election of the Company
Nominees, (b) in favor of the election of the Elliott Nominees, and (c) in
accordance with the recommendation of the Board on each proposal set forth in
the Company’s proxy statement dated March 13, 2017.

 

  4. Annual Meeting Date; Governance Proposals. The Company shall cause the
Annual Meeting to be held on May 25, 2017, and shall not cause the Annual
Meeting to be adjourned or postponed to a later date. The Company shall not
withdraw proposals 5-8 set forth in the Company’s proxy statement dated
March 13, 2017.

 

  5.

Replacement of Elliott-Recommended Directors. In the event that any of the three
directors appointed to the Board pursuant to the agreement (the “2016
Agreement”) with Elliott dated February 1, 2016 (i.e., Sean O. Mahoney, John C.
Plant or Ulrich “Rick” Schmidt, collectively, the “2016 Directors”) or any of
the Elliott Nominees (together with the 2016 Directors, the “Elliott-Recommended
Directors”) becomes unable or unwilling to serve as a director of the Company
(other than on account of failure to be elected, reelected or nominated for
election), the Company agrees that during the Term, Elliott will have the right
to select a replacement candidate who (a) qualifies as “independent” under the
applicable rules and regulations of the U.S. Securities and Exchange Commission
(the “SEC”) and the New York Stock Exchange (“NYSE”), and whose service as a
director of the Company complies with applicable requirements of the Clayton
Antitrust Act of 1914 and other applicable competition laws and regulations,
(b) is not an employee, director, general partner, manager or other agent of any
Elliott Party or any Affiliate of any Elliott Party, (c) is not a limited
partner, member or other investor in any Elliott Party or any Affiliate of any
Elliott Party and (d) does not have any agreement, arrangement or understanding,
written or oral, with any Elliott Party or any Affiliate thereof regarding such
replacement candidate’s service on the Board (the foregoing, the “Independence
Criteria”). Subject to the approval of the Governance and Nominating Committee
of the Board, not to be unreasonably withheld, delayed or conditioned, the
Company shall appoint such replacement candidate who meets the Independence
Criteria and has provided the Required Information to replace any such
Elliott-Recommended Director who is unable or unwilling to serve, with such
replacement candidate to be appointed to the Board to serve the unexpired term,
if any, of the departed Elliott-Recommend Director and such replacement shall be
considered an “Elliott-Recommended Director” for all purposes of this Agreement;
provided, however,

 

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  that Elliott’s right to select a qualified replacement candidate, and the
Company’s obligation to appoint such candidate to the Board, shall terminate
prior to the end of the Term upon the earliest of (i) five Business days’ after
written notice is delivered by the Company to Elliott of a material breach of
this Agreement by Elliott if such breach has not been cured within such notice
period, provided that the Company is not then in material breach of this
Agreement, (ii) in the case of Elliott’s right to select a qualified replacement
candidate to replace any of the Elliott-Recommended Directors other than the
Elliott Nominees, such time as the Elliott Parties and their controlling and
controlled Affiliates’ Net Long Position constitutes less than 10% of the
Company’s outstanding common stock as a result of dispositions by the Elliott
Parties, or (iii) in the case of Elliott’s right to select a qualified
replacement candidate to replace any of the Elliott Nominees, such time as the
Elliott Parties and their controlling and controlled Affiliates’ Net Long
Position constitutes less than 5% of the Company’s outstanding common stock as a
result of dispositions by the Elliott Parties. For the avoidance of doubt,
neither the Board nor the Governance and Nominating Committee shall be required
to nominate any Elliott-Recommended Directors for election after the Annual
Meeting.

 

  6. Company Policies. The Parties acknowledge that each of the Elliott
Nominees, upon election to the Board, will be governed by the same protections
and obligations regarding confidentiality, conflicts of interest, fiduciary
duties, trading and disclosure policies and other governance policies
(collectively, “Company Policies”), and shall be required to preserve the
confidentiality of Company business and information, including discussions or
matters considered in meetings of the Board or Board committees, and shall have
the same rights and benefits, including with respect to insurance,
indemnification, exculpation, compensation and fees, as are applicable to all
independent directors of the Company.

 

  7. Board Committees; Board Size; Board Chair. As promptly as practicable
following the Annual Meeting, (a) Christopher L. Ayers shall be appointed to
serve on the Executive Committee and the Finance Committee of the Board,
(b) Elmer L. Doty shall be appointed to serve on two standing committees of the
Board to be determined by the Governance and Nominating Committee, and
(c) Patrice E. Merrin shall be appointed to serve on the CEO Search Committee
and the Compensation Committee of the Board. For the avoidance of doubt, each
Party hereby acknowledges and agrees that there are no continuing rights or
obligations under paragraph 3 of the agreement between Alcoa Inc. and the
Elliott Parties dated February 1, 2016. The Board shall not, during the Term,
increase the size of the Board above thirteen (13) directors; provided that the
Board may be increased to enable the Company’s new permanent Chief Executive
Officer to become a member of the Board. At or prior to the appointment of the
Company’s new permanent Chief Executive Officer, the Board shall designate a new
Chair who shall qualify as an “independent” director under the applicable rules
and regulations of the SEC and the NYSE. The Board shall not include the
Company’s new permanent Chief Executive Officer among the potential candidates
for Chair prior to the second anniversary of the date of this Agreement.

 

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  8. Corporate Governance Guidelines. The Company hereby agrees that as promptly
as practicable following the Annual Meeting, the Company’s Corporate Governance
Guidelines shall be amended to provide that in recommending nominations of
directors for re-election each year, the Governance and Nominating Committee
will consider, as detracting factors, (i) lengthy tenure on the Board and
(ii) whether any potential director nominee serves on more than three public
company boards (not including the Company’s Board), in each case while assessing
whether such factors are outweighed by other qualifications, skills and
attributes of potential director nominees that are consistent with independent
and engaged oversight by the Board.

 

  9. Reincorporation in Delaware. The Company shall use reasonable best efforts
to reincorporate in Delaware (by merger, conversion or otherwise) on or prior to
December 31, 2017, and the Certificate of Incorporation, Bylaws and corporate
governance documents of the resulting Delaware corporation will (a) provide for
a declassified Board structure with all directors having terms expiring on an
annual basis and (b) contain no provisions requiring a supermajority shareholder
vote. With respect to any special meeting of shareholders of the Company
convened to approve one or more proposals required to effect the
reincorporation, the Elliott Parties will cause to be present for quorum
purposes all Company common stock that the Elliott Parties or any of their
respective controlling or controlled Affiliates have the right to vote as of the
record date for such special meeting, and vote or cause to be voted all such
common stock in favor of the approval of such proposals.

 

  10. CEO Search Process. The Board has formed a CEO Search Committee to work
with an executive recruitment firm and oversee the recruitment of a permanent
Chief Executive Officer (the “CEO Search Process”). Promptly following their
appointment or election to the Board, James F. Albaugh and Patrice E. Merrin
shall be appointed to the CEO Search Committee. The Parties have entered into a
confidentiality agreement regarding any non-public information to be received by
Elliott in connection with the CEO Search Process, in the form attached hereto
as Exhibit B, and shall cooperate in good faith to agree on further terms and
conditions thereof as contemplated by such confidentiality agreement. The CEO
Search Committee shall (a) keep Elliott reasonably informed regarding the CEO
Search Process so that they can provide input and feedback to the CEO Search
Committee, including keeping Elliott reasonably informed about key CEO
candidates and material developments in the status of the CEO Search Process,
(b) provide Elliott with an opportunity to meet any CEO candidates who are
interviewed by a majority of the Board members (as shall be the case for all
final round CEO candidates), and (c) provide Elliott with an opportunity to
present its views to the CEO Search Committee for its consideration; provided,
in each case, that in exercising its rights under this paragraph 10, the Elliott
Parties shall not unreasonably delay or interfere with the CEO Search Process.
It is expressly agreed that neither Elliott nor any directors nominated by
Elliott shall have any veto, consent or special voting rights with respect to
the CEO Search Process or the selection of a permanent Chief Executive Officer,
which such selection shall be made by the Board. The CEO Search Committee shall
include Mr. Larry Lawson among the candidates to be considered to serve as a
potential permanent Chief Executive Officer. From the date hereof until May 31,
2018, each of the Elliott Parties agrees that it shall, and shall cause its
respective Affiliates and its and their respective principals, directors,
members, general partners, officers and employees and agents, and
representatives acting on their behalf, not to make or cause to be made any
public statement or announcement (including in any document or report filed or
furnished to the SEC or through the press, media, analysts or other Persons)
regarding the CEO Search Process or the candidates under consideration.

 

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  11. Private Communications; Confidentiality. The Company hereby confirms that
it will afford representatives of the Elliott Parties a reasonable opportunity
to continue to engage in discussions with the Company. Subject to the foregoing,
in addition, the Elliott Parties acknowledge and agree that the Company’s
directors, Chief Executive Officer, Chief Financial Officer, Chief Legal Officer
or investor relations personnel (the “Contact Personnel”) may engage in
discussions with the Elliott Parties and their respective Affiliates subject to,
and in accordance with, the terms of their fiduciary duties to the Company and
the Company Policies (but without being limited by Company Policies to the
extent they provide that management (rather than directors) shall be responsible
for engaging in communications with external constituencies). The Company shall
not adopt any new Company Policies that further restrict the ability of the
Contact Personnel to engage in discussions with the Elliott Parties. Without
limiting the foregoing and without limiting Elliott’s rights under paragraph 10,
the Company may restrict the Contact Personnel and instruct them to refrain from
disclosing to the Elliott Parties and their respective Affiliates (a) any
information regarding the deliberations of the Board or its committees as a
whole or of individual members of the Board or its committees or members of the
Company’s management, (b) any confidential or proprietary information of any
third party in the possession of the Company and its subsidiaries that either
(i) is identified as such to the Contact Personnel by or on behalf of the
Company or (ii) as to which it is reasonably apparent that the Company or any of
its subsidiaries is obligated by a contractual, legal or fiduciary obligation
prohibiting disclosure, (c) any legal advice provided by external or internal
counsel to the Company or any of its subsidiaries or (d) any other information
that may constitute a waiver of the Company’s or any of its subsidiaries’
attorney-client privilege or attorney work-product privilege (both with respect
to internal or external legal counsel). The Elliott Parties hereby agree that
any confidential or proprietary information of the Company that they or their
Affiliates obtain in discussions contemplated by this paragraph 11 will be kept
confidential and may be used solely for the purpose of monitoring and evaluating
their investment in the Company.

 

  12. Registration Rights. Each of the Company, on the one hand, and the Elliott
Parties, on the other hand, shall cooperate in good faith to enter into a
registration rights agreement (the “Registration Rights Agreement”) within 30
Business days of the date of this Agreement containing customary and reasonable
terms. The Registration Rights Agreement shall (a) obligate the Company to file
a resale registration statement relating to the resale by the Elliott Parties of
the Company common stock held by them within 30 Business days of the date of
such agreement and to use its commercially reasonable efforts to keep such
registration statement continuously effective until the earlier of (x) such time
as the Elliott Parties beneficially own less than 10% of the Company’s
outstanding common stock or (y) the date that is two years after the date of
such agreement, (b) include no demand rights (except as contemplated by the
preceding clause (a)) or piggyback registration rights or right to require
underwritten offerings, (c) provide the Elliott Parties with customary
indemnification, indemnification procedures and related rights, (d) not obligate
the Company to pay any expenses of the Elliott Parties, except pursuant to the
indemnification rights contemplated by the preceding clause (c), and (e) provide
the Company with black-out rights for any periods during which the Company shall
reasonably determine that sales should be suspended due to material non-public
information or other legal considerations.

 

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  13. Press Release. Following the execution of this Agreement, by 9:20 A.M.
(New York time) on May 22, 2017, the Company shall issue a press release in the
form attached hereto as Exhibit A (the “Press Release”). No Party shall make any
statement regarding this Agreement that is inconsistent with the Press Release.
None of the Elliott Parties or their Affiliates shall issue a press release in
connection with this Agreement or the actions contemplated hereby.

 

  14. Form 8-K; Schedule 13D Amendment; Updates to Solicitation Materials.
Promptly following the execution and delivery of this Agreement, the Company
will file a Current Report on Form 8-K, which will report the entry into this
Agreement. The Elliott Parties shall promptly, but in no case prior to the
filing or other public release by the Company of the Press Release, prepare and
file an amendment to the Schedule 13D with respect to the Company originally
filed by the Elliott Parties with the SEC on November 23, 2015, as amended
through the date hereof, to report the entry into this Agreement and to amend
applicable items to conform to its obligations hereunder. Such Current Report on
Form 8-K and amendment to Schedule 13D shall be consistent with the Press
Release and the terms of this Agreement, and shall be in form and substance
reasonably acceptable to the Company and the Elliott Parties. In addition,
promptly following the execution and delivery of this Agreement (and in any
event no later than the second business day following the date hereof), each of
the Elliott Parties and the Company shall file with the SEC definitive
additional materials supplementing their respective proxy statements for the
Annual Meeting to disclose the terms of this Agreement, including the withdrawal
of the nominations of Mr. Kessler, Mr. Albaugh, Dr. Alving and General
Wolfenbarger, as applicable, and the fact that votes for such withdrawn nominees
on previously submitted proxy cards will be disregarded. Such definitive
additional materials shall be consistent with the terms of this Agreement.

 

  15. Insider Trading Restrictions. The Elliott Parties hereby acknowledge that
they are aware of their obligations under the United States securities laws.

 

  16. Representations and Warranties of the Company. The Company represents and
warrants to Elliott that (a) the Company has the corporate power and authority
to execute this Agreement and to bind it thereto, (b) this Agreement has been
duly and validly authorized, executed and delivered by the Company, constitutes
a valid and binding obligation and agreement of the Company, and is enforceable
against the Company in accordance with its terms, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws generally affecting the rights of
creditors and subject to general equity principles and (c) the execution,
delivery and performance of this Agreement by the Company does not and will not
(i) violate or conflict with any law, rule, regulation, order, judgment or
decree applicable to the Company, or (ii) result in any breach or violation of
or constitute a default (or an event which with notice or lapse of time or both
could constitute such a breach, violation or default) under or pursuant to, or
result in the loss of a material benefit under, or give any right of
termination, amendment, acceleration or cancellation of, any organizational
document, agreement, contract, commitment, understanding or arrangement to which
the Company is a party or by which it is bound.

 

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  17. Representations and Warranties of Elliott Parties. Each of the Elliott
Parties represents and warrants to the Company that (a) the authorized signatory
of such Elliott Party set forth on the signature page hereto has the power and
authority to execute this Agreement and any other documents or agreements to be
entered into in connection with this Agreement and to bind it thereto, (b) this
Agreement has been duly authorized, executed and delivered by such Elliott
Party, and is a valid and binding obligation of such Elliott Party, enforceable
against it in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws generally affecting the rights of
creditors and subject to general equity principles, (c) the execution of this
Agreement, the consummation of any of the transactions contemplated hereby, and
the fulfillment of the terms hereof, in each case in accordance with the terms
hereof, will not conflict with, or result in a breach or violation of the
organizational documents of Elliott as currently in effect, (d) the execution,
delivery and performance of this Agreement by such Elliott Party does not and
will not (i) violate or conflict with any law, rule, regulation, order, judgment
or decree applicable to Elliott, or (ii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both
could constitute such a breach, violation or default) under or pursuant to, or
result in the loss of a material benefit under, or give any right of
termination, amendment, acceleration or cancellation of, any organizational
document, agreement, contract, commitment, understanding or arrangement to which
such Elliott Party is a party or by which it is bound, and (e) as of the date of
this Agreement, (i) the Elliott Parties beneficially own in the aggregate
51,102,133 shares of Company common stock, and (ii) the Elliott Parties have
additional economic exposure to the Company’s common stock through notional
principal amount derivative agreements in the form of cash settled swaps
comparable to an interest in 7,262,517 shares of Company common stock.

 

  18. Certain Defined Terms. “Affiliate” shall have the meaning set forth in
Rule 12b-2 promulgated under the Exchange Act and shall include Persons who
become Affiliates of any Person subsequent to the date of this Agreement.
“Beneficially own”, “beneficially owned” and “beneficial ownership” shall have
the meaning set forth in Rules 13d-3 and 13d-5(b)(1) promulgated under the
Exchange Act. “Business day” shall mean any day other than a Saturday, Sunday or
a day on which the Federal Reserve Bank of New York is closed. “Controlled,”
“controlling” and “controlled by” shall have the meanings set forth in Rule
12b-2 promulgated under the Exchange Act. “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended. “Net Long Position” shall mean,
with respect to any Person, such Person’s net long position, as defined in Rule
14e-4 under the Exchange Act, mutatis mutandis, in respect of the Company common
stock. “Person” shall be interpreted broadly to include, among others, any
individual, general or limited partnership, corporation, limited liability or
unlimited liability company, joint venture, estate, trust, group, association or
other entity of any kind or structure. “Required Information” means any
information required to be disclosed in a proxy statement or other filing under
applicable law, stock exchange rules or listing standards, and information in
connection with assessing eligibility, independence and other criteria

 

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  applicable to directors or satisfying compliance and legal obligations,
including appropriate background checks comparable to those undergone by other
non-management directors. “Term” shall mean the date of this Agreement until the
date immediately prior to the annual meeting of shareholders of the Company to
be held in 2018 (including any adjournment or postponement thereof).

 

  19. Affiliates. Each of the Elliott Parties agrees that it will cause its
Affiliates, including Elliott Management Corporation, and their respective
employees and other representatives, to comply with the terms of this Agreement.

 

  20. Specific Performance. Each of Elliott, on the one hand, and the Company,
on the other hand, acknowledges and agrees that irreparable injury to the other
Party hereto would occur in the event any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached and that such injury would not be adequately compensable by the
remedies available at law (including the payment of money damages). It is
accordingly agreed that Elliott, on the one hand, and the Company, on the other
hand (the “Moving Party”), shall each be entitled to specific enforcement of,
and injunctive relief to prevent any violation of, the terms hereof, and the
other Party hereto will not take action, directly or indirectly, in opposition
to the Moving Party seeking such relief on the grounds that any other remedy or
relief is available at law or in equity. This paragraph 20 is not the exclusive
remedy for any violation of this Agreement.

 

  21. Expenses. Each Party shall be responsible for its own fees and expenses
incurred in connection with (a) the Annual Meeting, including any and all
nominations and solicitation efforts in connection therewith and all matters
related thereto, and (b) the negotiation, execution and effectuation of this
Agreement and the transactions contemplated hereby.

 

  22. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the Parties that the Parties would have executed
the remaining terms, provisions, covenants and restrictions without including
any of such which may be hereafter declared invalid, void or unenforceable. In
addition, the Parties agree to use their best efforts to agree upon and
substitute a valid and enforceable term, provision, covenant or restriction for
any of such that is held invalid, void or enforceable by a court of competent
jurisdiction.

 

  23. Notices. Any notices, consents, determinations, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (a) upon
receipt, when delivered personally, (b) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party), or (c) one Business day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the Party to receive the same. The addresses and facsimile
numbers for such communications shall be:

 

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If to the Company:

Arconic Inc.

390 Park Avenue

New York, New York 10022

Facsimile No: (212) 437-9876

Attention: Chief Legal Officer

With a copy (which shall not constitute notice) to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Facsimile No: (212) 403-2000

Attention: Karessa L. Cain

If to the Elliott Parties:

Elliott Associates, L.P.

Elliott International, L.P.

40 West 57th Street

New York, New York 10019

Facsimile No: (212) 478-2401

Attention: Dave Miller

Austin Camporin

With copies (which shall not constitute notice) to:

Elliott Associates, L.P.

Elliott International, L.P.

40 West 57th Street

New York, New York 10019

Facsimile No: (212) 478-1851

Attention: General Counsel

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

Facsimile No: (212) 728-8111

Attention: Maurice M. Lefkort

Martin L. Seidel

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

Facsimile No: (212) 451-2222

Attention: Steve Wolosky

 

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  24. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without reference
to the conflict of laws principles thereof that would result in the application
of the laws of another jurisdiction. Each of the Parties hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement and
the rights and obligations arising hereunder, or for recognition and enforcement
of any judgment in respect of this Agreement and the rights and obligations
arising hereunder brought by the other Party hereto or its successors or
assigns, shall be brought and determined exclusively in either (a) the United
States District Court for the Southern District of New York, to the extent that
such court has subject matter jurisdiction, or (b) the Commercial Division of
the Supreme Court of the State of New York in the County of New York (or if such
court lacks subject matter jurisdiction, in the courts of the State of New York
in the County of New York) and, in each case, any appellate court therefrom.
Each of the Parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any action relating to this Agreement in any court other
than the aforesaid courts. Each of the Parties hereto hereby irrevocably waives,
and agrees not to assert in any action or proceeding with respect to this
Agreement, (i) any claim that it is not personally subject to the jurisdiction
of the abovenamed courts for any reason, (ii) any claim that it or its property
is exempt or immune from jurisdiction of any such court or from any legal
process commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) and (iii) to the fullest extent permitted by applicable
legal requirements, any claim that (A) the suit, action or proceeding in such
court is brought in an inconvenient forum, (B) the venue of such suit, action or
proceeding is improper or (C) this Agreement, or the subject matter hereof, may
not be enforced in or by such courts.

 

  25. Counterparts; Headings. This Agreement may be executed in two or more
counterparts, each of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the Parties
and delivered to the other Party (including by means of electronic delivery or
facsimile). The paragraph headings contained in this Agreement are inserted for
convenience of reference only and will not affect the meaning or interpretation
of this Agreement.

 

  26. Entire Agreement; Amendment and Waiver; Successors and Assigns; Third
Party Beneficiaries; Waiver of Jury Trial. This Agreement contains the entire
understanding of the Parties hereto with respect to its subject matter and, in
the event of any inconsistency between the terms of this Agreement and the terms
of the 2016 Agreement, the terms of this Agreement shall control. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings between the Parties other than those expressly set forth herein. No
modifications of this Agreement can be made except in writing signed by an
authorized representative of each the Company and the Elliott Parties. No
failure on the part of any Party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such Party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. Time is of the essence in the performance of this

 

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  Agreement. All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law. The terms and conditions of this Agreement shall
be binding upon, inure to the benefit of, and be enforceable by the Parties
hereto and their respective successors, heirs, executors, legal representatives,
and permitted assigns. No Party shall assign this Agreement or any rights or
obligations hereunder without, with respect to any Elliott Party, the prior
written consent of the Company, and with respect to the Company, the prior
written consent of the Elliott Parties. This Agreement is solely for the benefit
of the Parties hereto and is not enforceable by any other Persons. Each of the
Parties, after consulting or having had the opportunity to consult with counsel,
knowingly, voluntarily and intentionally waives any right that such Party may
have had to a trial by jury in any litigation based on or arising out of this
Agreement or any related instrument or agreement, or any of the transactions
contemplated thereby, or any related course of conduct, dealing, statements
(whether oral or written), or actions of any of them.

 

  27. Interpretation. Each of the Parties acknowledges that it has been
represented by counsel of its choice throughout all negotiations that have
preceded the execution of this Agreement, and that it has executed this
Agreement with the advice of such counsel. Each Party and its counsel cooperated
and participated in the drafting and preparation of this Agreement, and any and
all drafts relating thereto exchanged among the Parties shall be deemed the work
product of all of the Parties and may not be construed against any Party by
reason of its drafting or preparation. Accordingly, any rule of law or any legal
decision that would require interpretation of any ambiguities in this Agreement
against any Party that drafted or prepared it is of no application and is hereby
expressly waived by each of the Parties, and any controversy over
interpretations of this Agreement shall be decided without regard to events of
drafting or preparation. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”

[Signature page follows]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized signatories of the Parties as of the date hereof.

 

ARCONIC INC. By:  

/s/ Katherine H. Ramundo

  Name: Katherine H. Ramundo   Title: Executive Vice President, Chief
          Legal Officer and Secretary ELLIOTT ASSOCIATES, L.P.

By:  Elliott Capital Advisors, L.P.,

        its General Partner

By:  Braxton Associates, Inc.,

        its General Partner

By:  

/s/ Elliot Greenberg

  Name: Elliot Greenberg   Title:   Vice President ELLIOTT INTERNATIONAL, L.P.

By:  Elliott International Capital Advisors Inc.,

        as Attorney-in-Fact

By:  

/s/ Elliot Greenberg

  Name: Elliot Greenberg   Title:   Vice President ELLIOTT INTERNATIONAL CAPITAL
ADVISORS INC. By:  

/s/ Elliot Greenberg

  Name: Elliot Greenberg   Title:   Vice President

 

 

[Signature page to Settlement Agreement dated May 22, 2017]

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Exhibit A:

Press Release

[to be attached]

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[ARCONIC LOGO]

FOR IMMEDIATE RELEASE

 

Investor Contact    Media Contact   Patricia Figueroa      Shona Sabnis   (212)
836-2758      (212) 836-2626   Patricia.Figueroa@arconic.com     
Shona.Sabnis@arconic.com  

Arconic and Elliott Reach Resolution to End Proxy Contest

NEW YORK, May 22, 2017 – Arconic (NYSE: ARNC) (the “Company”) today announced
that it has entered into an agreement with affiliates of Elliott Management
Corporation (collectively, “Elliott”), which have combined beneficial and
economic ownership of approximately 13.2% of the Company’s outstanding common
stock, to resolve the pending proxy contest in connection with the Company’s
May 25, 2017 annual meeting of shareholders.

Under the terms of the agreement, Elliott will nominate Christopher L. Ayers,
Elmer L. Doty and Patrice E. Merrin for election as directors at the upcoming
annual meeting, and the Company will nominate David P. Hess and Ulrich R.
Schmidt for election as directors. Elliott and the Company have agreed to
withdraw their respective nominations of any other director candidates for
election at the annual meeting.

The Company’s Board of Directors issued the following statement about the
agreement:

“We are pleased to have reached a constructive agreement with Elliott, our
largest shareholder, and look forward to working collaboratively with Elliott to
enable Arconic to realize the full potential of its great businesses. We are
proud of what Arconic has accomplished to date. In the weeks and months ahead,
we will recruit a new world-class CEO and select a new permanent Board Chair. We
expect the new CEO to work with the Board to review Arconic’s strategy and its
operations with the goal of optimizing the Company’s strategic plan and
associated performance targets.”

One of Elliott’s director nominees will be added to the CEO search committee and
Elliott will have the opportunity to engage collaboratively with the CEO search
committee and meet with candidates as the Board manages the search and selection
process. The mandate of the CEO search committee is to identify a world-class
leader for Arconic. It will consider a number of candidates, including Larry
Lawson.

W/2898623

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Dave Miller, Senior Portfolio Manager of Elliott, said, “Elliott greatly
appreciates the support received from other Arconic shareholders throughout this
contest, and we would like to express our profound gratitude to those
shareholders. We commend and thank the Arconic Board for demonstrating its
responsiveness to the Company’s shareholders through this agreement. We believe
the governance improvements and substantial infusion of new perspectives and
talent into the Board announced today – with highly qualified directors being
drawn from both the Elliott and Company cards – will successfully position
Arconic to realize its immense potential. We look forward to working
collaboratively with the CEO search committee and the Board to ensure that
Arconic has the right leadership at this critical juncture of its evolution.”

The agreement between the Company and Elliott will be filed with the U.S.
Securities and Exchange Commission.

In addition, the Company today announced that L. Rafael Reif, an Arconic
director since 2015, has announced his resignation as a Board member and that
the Board has appointed James “Jim” F. Albaugh, who was a candidate previously
nominated by Arconic for election at the annual meeting, to fill the resulting
vacancy on the Board, with such resignation and appointment to be effective
immediately following the 2017 annual meeting.

The Board remarked, “Rafael has been a valued colleague and member of this
Board, helping to lead our oversight of the transformational separation that
created today’s Arconic. On behalf of the shareholders and the entire Board, we
sincerely thank him for all his efforts and energy.”

The Company also announced that it will be working to reincorporate in Delaware
by the end of this year, and the certificate of incorporation and bylaws of the
resulting Delaware corporation will provide for an annually elected Board and
contain no provisions requiring a supermajority shareholder vote.

About Arconic

Arconic (NYSE: ARNC) creates breakthrough products that shape industries.
Working in close partnership with our customers, we solve complex engineering
challenges to transform the way we fly, drive, build and power. Through the
ingenuity of our people and cutting-edge advanced manufacturing techniques, we
deliver these products at a quality and efficiency that ensures customer success
and shareholder value. For more information: www.arconic.com. Follow @arconic:
Twitter, Instagram, Facebook, LinkedIn and YouTube.

 

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Forward–Looking Statements

This communication contains statements that relate to future events and
expectations and as such constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include those containing such words as “anticipates,” “believes,”
“could,” “estimates,” “expects,” “forecasts,” “guidance,” “goal,” “intends,”
“may,” “outlook,” “plans,” “projects,” “seeks,” “sees,” “should,” “targets,”
“will,” “would,” or other words of similar meaning. All statements that reflect
Arconic’s expectations, assumptions or projections about the future, other than
statements of historical fact, are forward-looking statements, including,
without limitation, forecasts relating to the growth of end markets and
potential share gains; statements and guidance regarding future financial
results or operating performance; and statements about Arconic’s strategies,
outlook, business and financial prospects. Forward-looking statements are not
guarantees of future performance, and it is possible that actual results may
differ materially from those indicated by these forward-looking statements due
to a variety of risks and uncertainties, including, but not limited to:
(a) deterioration in global economic and financial market conditions generally;
(b) unfavorable changes in the markets served by Arconic; (c) the inability to
achieve the level of revenue growth, cash generation, cost savings, improvement
in profitability and margins, fiscal discipline, or strengthening of
competitiveness and operations anticipated from restructuring programs and
productivity improvement, cash sustainability, technology advancements, and
other initiatives; (d) changes in discount rates or investment returns on
pension assets; (e) Arconic’s inability to realize expected benefits, in each
case as planned and by targeted completion dates, from acquisitions,
divestitures, facility closures, curtailments, expansions, or joint ventures;
(f) the impact of cyber attacks and potential information technology or data
security breaches; (g) political, economic, and regulatory risks in the
countries in which Arconic operates or sells products; (h) the outcome of
contingencies, including legal proceedings, government or regulatory
investigations, and environmental remediation; and (i) the other risk factors
discussed in Arconic’s Form 10-K for the year ended December 31, 2016, and other
reports filed with the U.S. Securities and Exchange Commission (SEC). Arconic
disclaims any obligation to update publicly any forward-looking statements,
whether in response to new information, future events or otherwise, except as
required by applicable law. Market projections are subject to the risks
discussed above and other risks in the market.

 

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Exhibit B:

Confidentiality Agreement

[to be attached]

--------------------------------------------------------------------------------

Execution Version

Arconic Inc.

390 Park Avenue

New York, New York 10022

May 22, 2017

Elliott Associates, L.P.

40 West 57th Street

New York, NY 10019-4001

Attention: Jesse A. Cohn

Ladies and Gentlemen:

1. Elliott Associates, L.P. (“Elliott”) and Arconic Inc. (the “Company”) have
agreed that the Company will (i) make available to Elliott, Elliott’s affiliates
or Elliott’s or its affiliates’ respective agents, members, representatives,
attorneys, advisors, directors, limited and general partners, officers and
employees (collectively, “Representatives”), certain confidential information
regarding the Company’s process for retaining a new Chief Executive Officer (the
“CEO Search”) and (ii) include Elliott in the CEO Search, each on the terms and
conditions set forth in that certain Settlement Agreement, dated as of the date
hereof, by and between the Company and Elliott (the confidential information
received pursuant to the foregoing clauses (i) and (ii) collectively, the
“Evaluation Material”). Notwithstanding the foregoing, “Evaluation Material”
does not include any information that (i) was publicly available prior to the
date of this agreement or hereafter becomes publicly available without any
violation of this agreement on the part of Elliott or any of its
Representatives, (ii) was available to Elliott or its Representatives on a
non-confidential basis prior to its disclosure by the Company or its
Representatives, (iii) becomes available to Elliott or its Representatives from
a person (other than the Company and its Representatives) who is not, to the
best of such person’s knowledge, subject to any legally binding obligation to
keep such information confidential, or (iv) is independently developed by
Elliott without use of or reference to the Evaluation Material.

2. Promptly following the date of this agreement, Elliott and the Company shall
cooperate in good faith to agree on reasonable rules and procedures regarding,
among other things, the duration of the restrictions in Paragraphs 1 and 3 of
this agreement and an obligation on the part of the Company to publicly disclose
Evaluation Material that constitutes material non-public information restricting
Elliott and its Representatives from offering and trading (without contravening
this agreement or such laws) in any loans or debt or equity securities of the
Company.

3. Elliott hereby agrees that it and its Representatives will (a) keep the
Evaluation Material confidential and (b) not disclose any of the Evaluation
Material in any manner whatsoever without the prior written consent of the
Company; provided, however, that Elliott may disclose any of such information to
its Representatives (i) who need to know such information for the sole purpose
of advising Elliott with respect to the CEO Search or its participation therein
and (ii) who are informed by Elliott of the confidential nature of such
information and agree to comply with the restrictions herein; provided, further,
that Elliott will be responsible for any violation of the confidentiality
provisions of this agreement by its Representatives as if they were parties
hereto.

--------------------------------------------------------------------------------

4. Notwithstanding the foregoing, Elliott or its Representatives may disclose
Evaluation Material to the extent such disclosure is required by applicable
subpoena, legal process or other legal requirement or upon a request by a
regulatory authority to disclose any of the Evaluation Material, provided that
Elliott promptly notifies (except to the extent such notice would be legally
prohibited or would not be reasonably practicable) the Company in writing so
that the Company may, at the Company’s sole expense, seek a protective order or
other appropriate remedy and/or waive compliance with this agreement (and in no
event will Elliott or its Representatives oppose action by the Company to
obtain, at the Company’s sole expense, a protective order or other relief to
prevent the disclosure of the Evaluation Material).

5. Elliott acknowledges that (i) none of the Company or any of its
Representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of the Evaluation Material, and (ii) none of the
Company or any of its Representatives shall have any liability to Elliott or its
Representatives relating to or resulting from the use of the Evaluation Material
or any errors therein or omissions therefrom. All Evaluation Material shall
remain the property of the Company, and neither Elliott nor its Representatives
shall by virtue of the Company’s disclosure of and/or Elliott’s use of any
Evaluation Material acquire any rights with respect thereto, all of which rights
(including any intellectual property rights) shall remain exclusively with the
Company.

6. Elliott acknowledges that the Evaluation Material may contain material
non-public information under applicable federal and state securities laws, and
that is aware of its obligations under the United States securities laws.

7. Each party acknowledges that (i) the other party would be irreparably injured
by a breach of this agreement and (ii) monetary remedies may be inadequate to
protect a party against any actual or threatened breach or continuation of any
breach of this agreement. Without prejudice to any other rights and remedies
otherwise available to a party hereunder, each party shall be entitled to seek
equitable relief by way of injunction or otherwise to prevent breaches or
threatened breaches of any of the provisions of this agreement. Such remedy
shall not be deemed to be the exclusive remedy for a breach of this agreement
but shall be in addition to all other remedies available at law or equity (other
than punitive, special or consequential damages) to the non-breaching party.

8. This agreement shall be governed by and construed in accordance with the laws
of the State of Delaware without giving effect to the choice of law principles
of such state. Each party hereto hereby irrevocably and unconditionally consents
to the exclusive institution and resolution of any action, suit or proceeding of
any kind or nature with respect to or arising out of this agreement brought by
any party hereto in the Chancery Court of the State of Delaware and the
appellate courts thereof. Each party hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this agreement in such court, and further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. The parties agree that a final
judgment in any such dispute shall be conclusive and may be enforced in other
jurisdictions by suits on the judgment or in any other manner provided by law.

 

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9. This agreement may only be amended with the prior written consent of both
parties, and neither party may assign any of its rights or obligations hereunder
without the prior written consent of the other party. This agreement may be
executed in two or more counterparts (including by fax and .pdf), which together
shall constitute a single agreement.

[Signature page follows]

 

- 3 -

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Please confirm your agreement with the foregoing by signing and returning this
agreement to the undersigned, whereupon this letter agreement shall become a
binding agreement between Elliott and the Company.

 

Very truly yours, ARCONIC INC. By:                                     
                                        Name: Title:

Accepted and agreed

as of the date first written above:

ELLIOTT ASSOCIATES, L.P.

By: Elliott Capital Advisors, L.P., as General Partner

By: Braxton Associates, Inc., as General Partner

 

By:  

 

Name:   Title:  

[Signature Page to Confidentiality Agreement dated May 22, 2017]