Exhibit 10e

 

ALCOA INC.

 

RULES FOR STOCK AWARDS

 

Effective January 1, 2004

 

These rules are authorized by the Compensation and Benefits Committee of the
Board of Directors. They are deemed to be incorporated into and form a part of
every Stock Award issued under the Alcoa Stock Incentive Plan (the “Plan”) on or
after January 1, 2004, unless the notification form or agreement evidencing the
award provides otherwise.

 

Terms that are defined in the Plan have the same meanings in these rules, except
that Alcoa or Company means Alcoa Inc. or any of its controlled subsidiaries or
affiliates.

 

General Terms and Conditions

 

1. Stock Awards are subject to the terms and conditions set forth in the related
form of Stock Award notification or Award Agreement (if any), the provisions of
the Plan and the provisions of these rules. A Stock Award is an undertaking by
the Company to issue that number of shares of Alcoa common stock indicated in
the award notification or Award Agreement on the date the Award vests, except to
the extent otherwise provided herein.

 

Vesting and Payment

 

2. An Award vests on the third anniversary date of the date of grant, unless the
Committee establishes a later date for vesting with respect to all or a portion
of the shares subject to the Award at the time of the grant of the Award.

 

3. As a condition to a Stock Award vesting, a participant must remain an Alcoa
employee actively at work through the date of vesting. Except to the extent
otherwise provided herein, if the participant’s employment with Alcoa terminates
prior to the vesting date of the Stock Award, the award is forfeited and is
automatically canceled.

 

4. Awards will be paid by the issuance to the participant of shares of Alcoa
common stock (Stock) equal in number to the number of shares covered by the
Award, as set forth on the face of the Stock Award notification. Prior to
issuance of the Stock the participant has no voting rights or rights to receive
dividends with respect to shares covered by the Stock Award. However, prior to
issuance of the Stock, the Committee may authorize the payment of cash dividend
equivalents. Such amounts, if authorized, will be equal to the common stock
dividend per share payable on Alcoa common stock multiplied by the number of
shares covered by the Award. Dividend equivalents will be paid as part of a
participant’s salary at approximately the time of payment of regular Alcoa
common stock dividends.

 

5. A. The three year cliff vesting schedule continues to apply to a Stock Award
in the following situations:

 

  (i) A Stock Award held by a participant who, anytime after 6 months from the
Award’s grant date, retires under a Company, subsidiary or government retirement
plan in which the participant is eligible for immediate payment of a retirement
benefit, is not forfeited but vests on the original stated vesting date set
forth on the face of the Award certificate.

 

  (ii) A Stock Award held by a participant who dies while an employee is not
forfeited but vests on the original stated vesting date set forth on the face of
the Award certificate.

 

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  (iii) As determined at the Company CEO’s discretion, if an unvested Stock
Award is held by a participant identified by the Company to be terminated from
employment with the Company or a subsidiary as a result of the divestiture of a
business or portion of a business of the Company or a subsidiary and the
participant either becomes an employee of (or is leased or seconded to) the
entity acquiring the business on the date of closing, or the participant is not
offered a job by the entity acquiring the business and is terminated by the
Company or a subsidiary within 90 days of the closing of the sale, then the
three-year cliff vesting schedule continues to apply.

 

B. A Stock Award vests immediately upon certain Change in Control events
described in the Plan. The Award is payable and shares of Stock become issuable
immediately upon the occurrence of such Change in Control events.

 

6. All taxes required to be withheld under applicable tax laws in connection
with a participant’s receipt of Stock issued in connection with the Stock Award
must be paid by the participant at the time the Award vests and shares of Stock
with respect to the Award become issuable.

 

7. A participant’s obligation to pay required United States’ federal, state or
local withholding taxes in connection with his or her receipt of Stock will be
satisfied by Alcoa’s withholding from the shares of Stock to be issued upon
payment of the Stock Award that number of shares whose fair market value on the
vesting date equals the withholding amount to be paid. Withholding taxes include
applicable income taxes, federal and state unemployment compensation taxes and
FICA/FUTA taxes.

 

8. The amount of taxes to be paid by a participant using shares of Stock
retained from the shares then issuable in connection with the Stock Award will
be determined by applying the minimum rates required by applicable tax
regulations.

 

9. “Fair market value” per share of Stock on any given date is the mean of the
high and low trading prices per share of Stock on that date as reported on the
New York Stock Exchange or other stock exchange on which the Stock then
principally trades. 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 mean of
the high and low trading prices as reported for the next preceding day on which
that exchange was open for business will be used.

 

Beneficiaries

 

10. Participants will be entitled to designate one or more beneficiaries to
receive all Stock Awards that have not yet vested at the time of death of the
participant. All beneficiary designations will be on beneficiary designation
forms approved for the Plan. Copies of the form are available from the Plan
administrator.

 

11. Beneficiary designations on an approved form will be effective at the time
received by the Plan administrator. A participant may revoke a beneficiary
designation at any time by written notice to the Plan administrator or by filing
a new designation form. Any designation form previously filed by a participant
will be automatically revoked and superseded by a later-filed form.

 

12. A participant will be entitled to designate any number of beneficiaries on
the form, and the beneficiaries may be natural or corporate persons.

 

13. On the beneficiary designation form, it is recommended that the
participant’s signature be witnessed by two persons. However, no person named as
a beneficiary on the form should sign as a witness. If the participant is
married at the time the beneficiary designation form is filed, then unless the
participant’s spouse is the sole beneficiary named on the form, it is
recommended that the spouse also sign. The spouse’s signature should be
notarized.

 

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14. The failure of any participant to obtain any recommended signature on the
form will not invalidate the beneficiary designation or prohibit Alcoa from
treating such designation as valid and effective. No beneficiary will acquire
any beneficial or other interest in any Stock Award prior to the death of the
participant who designated such beneficiary.

 

15. Unless the participant indicates on the form that a named beneficiary is to
receive Stock Awards only upon the prior death of another named beneficiary, all
beneficiaries designated on the form will be entitled to share equally in the
Stock Award upon vesting. Unless otherwise indicated, all such beneficiaries
will have an equal, undivided interest in all such Stock Awards.

 

16. Should a beneficiary die after the participant but before the Stock Award is
paid, such beneficiary’s rights and interest in the Award will be transferable
by the beneficiary’s last will and testament or by the laws of descent and
distribution. A named beneficiary who predeceases the participant will obtain no
rights or interest in a Stock Award, nor will any person claiming on behalf of
such individual. Unless otherwise specifically indicated by the participant on
the form, beneficiaries designated by class (such as “children,” “grandchildren”
etc.) will be deemed to refer to the members of the class living at the time of
the participant’s death, and all members of the class will be deemed to take
“per capita.”

 

ASIP AWARD RULES (JANUARY 2004)

 

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