Exhibit 10.3

ALCOA INC.

RESTRICTED SHARE UNIT CERTIFICATE

Alcoa Inc. (the “Company”) has on [DATE] granted to

 

[NAME]

  

[EMPLOYEE ID NUMBER]

(Name)    (Employee ID)

(“Participant”), an Award of [NUMBER] Restricted Share Units, based upon the
following terms:

 

1. This Restricted Share Unit is granted under the provisions of the 2009 Alcoa
Stock Incentive Plan, as last amended prior to the date above (the “Plan”), and
is subject to the provisions of the Plan and the applicable Terms and Conditions
for the grant (the “Governing Documents”).

 

2. This Restricted Share Unit grant vests on [DATE] if the Participant is still
an active employee of the Company or any of its controlled subsidiaries or
affiliates, subject to the further provisions set forth in the Governing
Documents.

 

3. Company common stock is issued when the award vests.

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ALCOA INC.

TERMS AND CONDITIONS FOR RESTRICTED SHARE UNITS

Effective May 8, 2009

These terms and conditions 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 Award of Restricted Share Units issued under the 2009 Alcoa
Stock Incentive Plan, as last amended prior to the grant (the “Plan”) on or
after May 8, 2009.

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

General Terms and Conditions

1. Restricted Share Units are subject to the provisions of the Plan, the
provisions of these terms and conditions and the provisions of the Award
certificate. A Restricted Share Unit is an undertaking by the Company to issue
the number of Shares indicated in the Award certificate on the date the Award
vests, except to the extent otherwise provided herein. A Participant has no
voting rights or rights to receive dividends on Restricted Share Units, but the
Board of Directors may authorize that dividend equivalents be payable on
Restricted Share Units, subject to limitations provided in the Plan.

Vesting

2. A Restricted Share Unit vests on the third anniversary date of the date of
grant, unless the Committee establishes another 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. Except as provided in paragraph 4, if a Participant’s employment with the
Company is terminated before the Restricted Share Unit vests, the Award is
forfeited and is automatically canceled.

4. The following are exceptions to the vesting rules:

 

  •  

Death: a Restricted Share Unit held by a Participant who dies while an employee
is not forfeited, but vests on the original stated vesting date.

 

  •  

Change in Control: a Restricted Share Unit vests immediately upon certain Change
in Control events described in the Plan.

 

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  •  

Retirement: a Restricted Share Unit held by a Participant who retires at least 6
months after the grant date under a Company or government retirement plan in
which the Participant is eligible for an immediate payment of a retirement
benefit, is not forfeited and vests in accordance with the original vesting
schedule of the grant.

 

  •  

Divestiture: if a Restricted Share Unit is held by a Participant identified by
the Company to be terminated from employment with the Company as a result of a
divestiture of a business or a portion of a business of the Company and the
Participant either becomes an employee of (or is leased or seconded to) the
entity acquiring the business on the date of the closing, or the Participant is
not offered employment with the entity acquiring the business and is terminated
by the Company within 90 days of the closing of the sale, then, at the
discretion of the Chief Executive Officer of Alcoa Inc., the Restricted Share
Unit will not be forfeited and will vest in accordance with the original vesting
schedule. For purposes of this paragraph, employment by “the entity acquiring
the business” includes employment by a subsidiary or affiliate of the entity
acquiring the business; and “divestiture of a business” means the sale of assets
or stock resulting in the sale of a going concern. “Divestiture of a business”
does not include a plant shut down or other termination of a business.

Taxes

5. All taxes required to be withheld under applicable tax laws in connection
with a Restricted Share Unit must be paid by the Participant at the appropriate
time under applicable tax laws. Alcoa will withhold from the Shares to be issued
upon payment of the Restricted Share Unit that number of Shares with a Fair
Market Value on the vesting date equal to the taxes required to be withheld at
the minimum required rates, which include, for Participants subject to taxation
in the United States, applicable income taxes, federal and state unemployment
compensation taxes and FICA/FUTA taxes.

Fair Market Value

6. “Fair Market Value” per Share on any given date is 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.

Beneficiaries

7. Participants will be entitled to designate one or more beneficiaries to
receive all Restricted Share Units 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 Communications Center on Merrill Lynch’s OnLine® website.

 

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8. Beneficiary designations on an approved form will be effective at the time
received by the Alcoa Manager, Stock Administration. A Participant may revoke a
beneficiary designation at any time by written notice to the Alcoa Manager,
Stock Administration 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.

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

10. 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 Restricted Share Unit prior to the death
of the Participant who designated such beneficiary.

11. Unless the Participant indicates on the form that a named beneficiary is to
receive Restricted Share Units only upon the prior death of another named
beneficiary, all beneficiaries designated on the form will be entitled to share
equally in the Restricted Share Unit upon vesting. Unless otherwise indicated,
all such beneficiaries will have an equal, undivided interest in all such
Restricted Share Units.

12. Should a beneficiary die after the Participant but before the Restricted
Share Unit 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 Restricted Share Unit, 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.”

Performance Feature

13. If a Restricted Share Unit is issued with a performance feature, the
following additional terms and conditions will apply to that Award:

 

  •  

The Participant will have the right to receive from 0% to 200% of the number of
Shares indicated in the Award certificate, based on achievement of performance
objectives established by the Committee for that Award.

 

  •  

The performance period and vesting schedule will be set forth in the Award
certificate.

 

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  •  

The performance conditions may be adjusted as deemed appropriate in the
Committee’s business judgment.

2009 ALCOA STOCK INCENTIVE PLAN RESTRICTED SHARE UNIT TERMS AND CONDITIONS (MAY
2009)

 

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