Document:

Performance Share Awards Rules effective January 1, 2004

 Exhibit 10f 
  
 ALCOA INC. 
  
 RULES FOR PERFORMANCE SHARE 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 Performance Share 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.	Performance Share Awards are subject to the terms and conditions set forth in the related form of Performance Share Award notification letter, the provisions of the Plan and the
provisions of these rules. A Performance Share Award is a commitment by the Company to issue, on the third anniversary date of the date shown in the Award notification letter, from 0 to 200% of the Target number of shares of Alcoa common stock
indicated in the Award notification letter. 

  
 Vesting and Payment 
  

	2.	The exact amount of Stock to be received under a grant by a participant, if any, will be determined within not later than 18 months after the date of the Award grant, and such
determination will be made in accordance with the performance metrics reflected in the Award notification letter. The Award will then vest 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 Performance Share 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 Performance Share Award, the Award is forfeited and is automatically canceled. 

  

	4.	Prior to issuance of Stock upon vesting, the participant has no voting rights or rights to receive dividends with respect to shares covered by the Performance Share Award. However,
prior to issuance of any 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: (i) during the first
12 – 18 months following the date of grant, the Target number of shares covered by the Award and specified in the Award notification letter, or (ii) after the exact amount of Stock to be received under the grant by the participant, if any, is
determined in accordance with the performance metrics reflected in the Award notification letter, the exact number of shares to be received by the participant upon vesting. 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 Performance Share Award in the following situations: 

  

	 	(i)	 A Performance Share Award held by a participant who, anytime after 6 months from the Award’s grant date, retires under a Company, subsidiary or government

  

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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 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)	As determined at the Company CEO’s discretion, if an unvested Performance Share 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. Upon certain Change in Control events
described in the Plan, all contingencies and restrictions shall lapse, the Performance Share Award shall be considered to be earned and payable and the Award shall be immediately settled or distributed. If the Change in Control event occurs before
the actual number of shares to be received by the participant based on performance results can be determined pursuant to paragraph 2 above, the Performance Share Award shall be settled at the Target amount reflected in the Award notification letter.
If the Change in Control event occurs after the actual number of shares, if any, to be received by the participant can be determined pursuant to paragraph 2 above, the Performance Share Award shall be settled at the exact number of shares that would
have been received by the participant upon vesting. 
  

	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 Performance Share 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 Performance Share 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 Performance Share 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 Performance Share 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. 

  

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	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. 

  

	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 Performance Share 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 Performance Share Awards only upon the prior death of another named beneficiary, all
beneficiaries designated on the form will be entitled to share equally in the Performance Share Award upon vesting. Unless otherwise indicated, all such beneficiaries will have an equal, undivided interest in all such Performance Share Awards.

  

	16.	Should a beneficiary die after the participant but before the Performance Share 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 Performance Share 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) 
  

 3Alcoa Incentive Compensation Plan

 Exhibit 10g 
  

 
  
 2004 Alcoa Incentive 

Compensation Plan 
  

 

 
  

					
	 INTRODUCTION
	  	1	  	 
			
	 OVERVIEW
	  	1	  	 
			
	 HOW THE PLAN WORKS
	  	 	  	 
			
	 Who Is Eligible
	  	2	  	 
	 Target Incentive Levels
	  	2	  	 
	 Performance Goals
	  	2	  	 
	 How Payouts Are Calculated
	  	3	  	 
	 Payment and Taxation of Payouts
	  	4	  	 
			
	 WHAT HAPPENS WHEN:
 A REFERENCE GUIDE
	  	5	  	 
			
	This booklet was prepared to give you a better understanding of the Alcoa Incentive Compensation Plan. The official plan document and payout letters issued under the Plan control the Plan’s
operation. If there are any differences between this booklet and the official plan document, the plan document will control. Alcoa reserves the right to change or terminate the Plan at any time for any reason. Participation in the Plan does not give
anyone the right to continued employment with Alcoa.	  	 	  	

  

			
	 Introduction
  
 As an organization, Alcoa sets high goals for itself—goals that “stretch” company performance to the next level. You play an important role in helping
your business realize those goals.
	  	

  
 The Alcoa Incentive Compensation
(IC) Plan provides financial rewards when you achieve key individual performance results and your business reaches its performance goals during the plan year (January 1 – December 31). The IC Plan is designed to align individual and business
unit goals and offer you the opportunity to increase your total annual cash compensation by meeting or exceeding these goals. 
  
 Overview 
  
 Our variable pay program creates a clear link between each employee’s actions and their Business Unit’s results. This link and our payout targets are consistent with our business focus and driven by our
market-competitive compensation philosophy. The IC Plan is a key component of total compensation for Alcoa managers who can have a direct impact on the near-term performance of their business unit. It supports the company’s pay-for-performance
philosophy by linking a portion of your annual compensation opportunity to the achievement of specific business unit and individual performance goals. The goals are intended to promote teamwork and collaboration among employees throughout your
business unit, and encourage individual accountability as well. 
  
 The Plan also
helps Alcoa manage costs and improve results because payouts under the Plan are variable—sensitive to the operating performance of our various businesses. The Plan is designed to be self-funding so the payouts are primarily based on performance
measures that align with increasing the company’s value (either by increasing profits or reducing costs). In years when your business unit’s performance improvement goals are not met, the Plan does not pay. Additionally, your individual
performance will impact any payout. 
  
 Business and Performance Focused

  
 Alcoa’s compensation programs align corporate, business unit and
individual results. 
  

			
	

	  	

  

 1 

 How the Incentive Compensation Plan Works 
  
 Who Is Eligible 
  
 Alcoa managers and professionals who, as determined by the company, directly impact the financial performance of their businesses are eligible to participate in the Plan.
When you first become eligible, your manager will notify you. 
  
 Target
Incentive Levels 
  
 Every Incentive Compensation Plan participant has a
target incentive, which is a percentage of annual base salary earnings. Your target depends on your job responsibilities and competitive compensation practices in the labor markets where we compete for talent. Your manager will inform you of the
target incentive for your job grade. It is important to note that managers may adjust payout levels under the Plan to reflect individual performance. Your actual incentive payout may be less or greater than your target, depending on business unit
and individual performance. 
  
 For any incentive to be awarded under the
Plan, a threshold (or minimum) level of performance for your business must be achieved. The maximum incentive that can be awarded for financial metrics is typically 200% of target and for non-financial metrics is 150% of target, for a maximum
incentive plan payout of 190% of target. 
  
 Performance Goals 

 
 Each year, business unit and corporate management agree upon performance goals for
financial and non-financial measures. These goals are aggressive and require a “stretch” by the organization to meet them. Your incentive payout under the Plan will be calculated based on performance against these goals plus your
manager’s assessment of your individual performance. 
  
 Financial
goals: Eighty percent (80%) of the payout opportunity is based on your business unit’s performance against key financial measures. Each year senior management determines the specific financial performance measures and targets for your
Business Unit. Financial goals are capped at a maximum of 200% of target. 
  

			
	

	  	

  

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 Non-financial goals: The remaining 20% of
the payout opportunity is based on performance against key goals such as quality, delivery performance, safety, environmental compliance and productivity. These goals are determined by your business unit and, when attained, will lead to the
longer-term financial success of your business. Payouts for non-financial goals are capped at a maximum of 150% of target. 
  
 How Payouts Are Calculated 
  
 In January following the plan year, the achievement against each performance measure is determined in order to calculate the total incentive payout. For each performance
measure, the percentage weighting is applied to the percentage of target that was actually achieved. The weighted performance measure results are added together to determine the total payout for the plan as a percentage of target. This plan
percentage of target is used to determine the pool of available incentive dollars for your business unit. (See below for a calculation example.) All performance targets do not have to be met for a payout to be made. If results for all
performance measures are below the threshold level, no payout will be made. In the event of significant external influences on actual results, such as currency exchange impacts, business units will provide an assessment of actions taken to address
such factors which will be used in conjunction with actual results to determine the final performance against goals. 
  
 Your manager will explain the performance goals for the coming year, tell you your target payout amount, and indicate what you can do to help achieve these goals. Prior
to your Incentive Compensation payout being made, your manager will review your accomplishments throughout the year and determine your final payout based on your individual performance. Once the performance results have been determined and your
performance assessed, your manager will inform you of your payout amount. 
  
 

 
  
 (80% Financial Goals X 200% Maximum) + (20% Non
Financial Goals X 150% Maximum) = Your Maximum Total Opportunity of 190% 
  
 Note: For employees of corporate resource units, all or a portion of annual goals are based on composite performance against the business unit goals. 
  

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 Example of Annual Incentive Payout Calculation

  
 Let’s say your target incentive level for the year is 10% of
your base salary earnings of $100,000, or $10,000. Performance goals (explained on page 2) are weighted as shown below. 
  
 Assume that your business unit performance is: 
  

	 	•	Financial goals (worth 80% of your total payout): 75% of target 

  

	 	•	Non-financial goals (worth 20% of your total payout): 100% of target 

  
 Here’s how the total payout percentage is calculated to determine the payout amount that is added to the pool of available incentive dollars): 
  

										
	 Business Unit
Measures

	  	Weight for
Each Goal

	 	 	Actual BU Performance
as a Percentage of Target

	 	 	Percentage of Payout
Based on Performance*

	 
	 Financial goals
	  	80	%	 	75	%	 	60	%
	 Non-financial goals
	  	20	%	 	100	%	 	20	%
	 Total
	  	100	%	 	 	 	 	80	%

  

	*	Your actual payout amount will be based on your individual performance. 

  
 For each goal, the actual performance as a percentage of target is multiplied by the goal’s weighting and then added together to get
the total payout as a percent of your incentive target. In this example, 8% of your base salary earnings, or $8,000 would be added to the pool of available incentive dollars for your business unit (plan percent payout 80% x your incentive target 10%
x eligible earnings $100,000). Using this amount as a basis, your manager would then determine your incentive payout amount from the pool of available incentive compensation dollars for your business unit. 
  
 Payment and Taxation of Payouts 
  
 Annual incentive payouts typically are paid in the first quarter of each year. Normally,
your incentive payout will be treated as ordinary income in the year it is paid. 
  
 It is recommended that you consult a personal tax or financial advisor for guidance on the tax treatment of your payouts. 
  
 

 
  
 

 
  

 4 

 What Happens When: A Reference Guide 
  

			
	You are hired or promoted to an eligible position in the middle of the plan year	  	Any annual incentive payout for that year will be prorated based on the actual base pay received in the bonus-eligible position during the year. The actual payout you receive may be adjusted
based on your individual performance.
		
	You transfer between business units during the plan year	  	Your annual incentive payout for that year will be prorated based on your BU’s performance against goals and the number of whole months you worked in each unit. Managers from your BU will
collaborate on the assessment of your individual performance.
		
	You take a leave of absence (including short-term disability, long-term disability, paid and unpaid leave, military leave and/or FMLA)	  	The amount of annual incentive payout calculated and added to the available incentive pool will be prorated based on your eligible earnings for the time actually worked during the year. Your
manager will determine your incentive payout based on your contribution to the incentive pool and your individual performance.
		
	You retire, die, or are laid off during the plan year	  	The amount of annual incentive payout calculated and added to the available pool will be prorated based on your eligible earnings for the time actually worked during the year. Your manager will
determine your incentive payout based on your contribution to the incentive pool and your individual performance.
		
	Your employment ends for any reason other than retirement, death, or layoff	  	Payments under the plan are at management's discretion. In general, if you voluntarily resign or are terminated for cause you will not be considered for an award.
		
	 

  
  
  
  
  
	  	

  

 5 

 

 
  
 2004 Alcoa Incentive Compensation Plan

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