Exhibit 10c

 

TO:

[DATE]

 

FROM:

 

RE: [DATE] ALCOA PERFORMANCE SHARE PLAN GRANT

 

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Congratulations! As one of Alcoa’s most senior leaders, you have been included
as part of a select team of employees to receive a Performance Share Award under
Alcoa’s Stock Incentive Plan.

 

This is a new feature of our long-term compensation design, which will
strengthen the connection between your compensation and our journey to becoming
the best company in the world. Your management has made a recommendation to
include you in the top leadership team that must lead the corporation towards
this goal.

 

Based on your position within the company, your performance, and your potential,
your Executive Council member has made a recommendation on your award and the
Compensation and Benefits Committee of the Board have been confirmed this.

 

This award provides you with an opportunity to earn from __% up to __% of target
award depending on the performance of corporate ROC versus an average ROC of an
external comparator group during this year. In the [NUMBER] quarter of [YEAR],
we will determine the final size of the grant to be issued on [DATE].

 

There are some excellent features associated with the Performance Share Award.
You will receive dividend equivalent payments on the target award amount during
the first year and on actual earned award for the following two years of the
vesting period. This means that you will receive dividends in [YEAR], [YEAR] and
[YEAR] on this Award. Performance Share Awards will offer a number of other
benefits to recipients, detailed below, and more predictability for the Company
– greater alignment between accounting cost and value of awards at the date of
grant.

 

Most people receiving the [YEAR] awards are familiar with Alcoa’s Stock Options.
Over the next few years, we envision using a blend of Stock Options, Stock
Awards and Performance Share Awards while maintaining a competitive compensation
market position in each country or region where we operate.

 

An assessment of your leadership position within Alcoa will be conducted each
year to determine performance share award participants and individual award
levels. It should be noted that there is no guarantee that this design will
remain constant or that you will participate in this special award.

 

What is a Performance Share?

 

A Performance Share Award represents a commitment to provide you with Alcoa
stock, upon vesting, providing that you meet certain employment criteria and
that the corporation achieves certain financial performance levels. This award
is a contractual promise to issue shares to you on [DATE], and does not
represent immediate share ownership. A Stock Award alleviates the leveraged
aspect of the market risk associated with Stock Options and delivers more
predictable value to the employee under almost all market conditions.

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How Does The Performance Share Plan Work?Shar

 

  n Your Award is determined by your job grade level and then flexed depending
on our Corporate ROC performance compared to the average ROC of the comparator
group in the first year of the three-year vesting period.

 

Application:

 

  n Selected Business and Resource unit leaders

 

Comparator Group:

 

  n Comparator group is a composite of the ___________ plus ____________ index.
This group has been selected to include shareholders’ investment alternatives
and to ensure that there is a similar exposure to commodity price as compared
with our current exposure.

 

Measurement Period:

 

  n Three-year cliff vesting after the initial award date or approximately two
years after the determination of the actual number of awards

 

Performance Flex:

 

· The award level will flex according to the corporate position in the
comparator group distribution for [YEAR].

 

Dividend Equivalents:

 

  n Quarterly dividend equivalent payments will be made on target unvested
shares in the first year and then on the final number of shares to be issued
during the rest of the vesting period.

 

Performance Share Award Terms and Conditions:

 

Performance Share Awards have a 3 year performance vesting, meaning, a common
stock entry will be posted to your EquiServe account on [DATE] for those
employees issued a grant on [DATE] if certain performance thresholds are
achieved. You will then own common shares of Alcoa stock. The award will be
subject to non-compete provisions comparable to those applicable to Stock
Options and Stock Awards. In most jurisdictions, you can generally defer income
taxation on the award until it is fully vested. However, we encourage you to
consult with a qualified accountant or attorney to review your personal
situation. Please refer to the Terms and Conditions and Rules for Performance
Share Awards on the stock option web site for additional details.

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Terms and Conditions – [YEAR] Performance Share Awards

 

1. A Performance Share Award is a commitment by the Company to issue, on the
third anniversary date of the date of the grant of the award, from 0 to 200% of
the Target number of shares of Alcoa common stock indicated in the award
notification letter. Alcoa common stock, if any, will not be issued until the
award vests.

 

2. The exact amount of stock to be received under this Performance Share Award,
if any, will be determined no later than 18 months after the grant date, and
such determination will be made in accordance with the performance metrics
reflected in the award notification letter.

 

3. Until the award vests, the Participant has no voting rights or rights to
receive dividends with respect to the shares of Alcoa common stock potentially
covered by the award. The Committee may, however, authorize the payment of cash
dividend equivalents prior to vesting of the award. Such amounts, if authorized,
will be equal to the common stock dividend per share payable from time to time
on Alcoa common stock multiplied by, (i) during the first 12 to 18 months after
the grant date, the Target number of shares covered by the award, or (ii) after
the exact amount of stock to be received under the grant is determined as
provided in paragraph 2. above, that exact number of shares.

 

4. Except as provided below, if the Participant’s employment terminates before
the award vests, the award is forfeited, and it is automatically canceled.

 

5. A. This award vests three years from its grant date, except in the following
instances:

 

(i) If the Participant’s employment terminates due to retirement under a
Company, subsidiary or government retirement plan on a date that is at least six
months from the grant date, the award is not forfeited but vests on the original
stated vesting date set forth in the award notification letter.

 

(ii) A Performance Share Award held by a Participant who dies while an employee
is not forfeited but vests on the original stated vesting date set forth in the
award notification letter.

 

(iii) A Performance Share Award vests in accordance with the three year time
vesting schedule, as determined at the Company CEO’s discretion, if, prior to
the Performance Share Award otherwise vesting, (i) management identifies the
Participant to be terminated from employment with the Company or a subsidiary of
the Company as a result of a divestiture of a business or a portion of a
business, and (ii) 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 or a subsidiary of the Company within 90 days
of the closing of the sale. 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.

 

    B. A Performance Share 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 event.

 

6. When the Performance Share Award vests and stock, if any, becomes issuable,
this award will be settled by delivery to the Participant of the number of
shares of Alcoa common stock determined as provided in paragraph 2. above. U.S.
taxes required to be withheld under applicable tax laws in connection with a
Performance Share Award will be satisfied by Alcoa’s withholding from the shares
of stock to be issued that number of shares whose fair market value on the
vesting date equals the withholding amount to be paid. Employees in non-U.S.
locations must satisfy tax requirements as outlined by their country of
residence.

 

7. This award is nontransferable.

 

8. This award may be suspended or limited by the Committee at any time if it
determines that this action is necessary or desirable in order to permit the
Company to obtain the listing, registration or qualification of shares covered
by this award upon any securities exchange or under any law, rule, regulation or
decision or the consent or approval of any governmental regulatory body or to
comply with insider trading laws. No suspension or delay resulting from this
action will extend the termination date of this award.

 

9.

The Committee has full power and authority to determine whether, to what extent
and under what circumstances this award will be cancelled. In particular, but
without limitation, all Performance Share Awards granted to any Participant may
be canceled if the Participant, without the consent of the Committee, while
employed by the Company or after termination of employment, becomes

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associated with, employed by, renders services to or owns any interest in (other
than any insubstantial interest, as determined by the Committee) any business
that is in competition with the Company or with any business in which the
Company has substantial interest as determined by the Committee, or otherwise
takes any action that in the judgment of the Committee is not in the best
interests of the Company.

 

10. This award does not confer any rights of continued employment upon the
Participant.

 

11. To accept this award, you must, within 90 days from the grant date, confirm
your agreement to the Terms and Conditions and Rules for Performance Share
Awards at the Alcoa stock option web site.