Exhibit 10.2
ALCOA INC.
STOCK OPTION AWARD
CERTIFICATE
Alcoa Inc. (the “Company”) has on
[DATE] granted to
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[NAME]
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[EMPLOYEE ID NUMBER]
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(Name)
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(EMPLOYEE ID)
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(“Participant”), the option to
purchase [NUMBER] shares of common stock of the Company at the
option grant price of
$[ ] per share,
based upon the following terms:
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1.
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This stock
option is granted under the provisions of the 2004 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”).
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2.
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This stock
option grant vests on [DATE or DATES], 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.
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3.
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This stock
option grant expires [NUMBER] years after the date of the grant,
unless earlier terminated under the terms of the Governing
Documents.
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Issued in Pittsburgh, Pennsylvania
on the date set forth above.
ALCOA INC.
TERMS AND CONDITIONS FOR STOCK
OPTION AWARDS
Effective January 1,
2006
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 stock
option awarded under the 2004 Alcoa Stock Incentive Plan, as last
amended prior to the grant (the “Plan”) on or after
January 1, 2006, unless the Award certificate provides
otherwise.
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. Stock option awards are subject to the terms
and conditions set forth in the Award certificate, the provisions
of the Plan and the provisions of these terms and
conditions.
2. The grant price per share of a stock option
is 100% of the fair market value per share of Alcoa Inc. common
stock (“Stock”) on the date of grant, unless the Award
certificate specifies a higher grant price. The date of grant is
the date selected by the Committee as the date of grant or, if no
date is selected, the date on which the option is
awarded.
3. Except as provided in the following
subsection of this paragraph, “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.
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The fair market
value per share on the exercise date of an option is the price at
which shares that were or will be issued to the Participant in
connection with the option exercise are sold by the Participant on
the exercise date in the open market. This subsection has no
application if the Participant is not selling shares in the open
market on the option exercise date.
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Vesting and Exercisability
4. As a condition to exercise of a stock option
award, a Participant must remain an Alcoa employee actively at work
until the date the option vests. If an option vests as to some but
not all shares covered by the option, the Participant must be an
active employee on the date the relevant portion of the option
vests. Except as provided in paragraph 5 below, if the
Participant’s employment with Alcoa terminates prior to the
vesting date of the option (or relevant option portion), the option
(or relevant option portion) is forfeited and is automatically
canceled.
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An option vests
on the first anniversary of its grant date, unless the Committee
specifies a different vesting period with respect to all or a
portion of the shares subject to the option. The Award certificate
evidencing an original option grant sets forth the vesting
provisions that are applicable to that grant.
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5. The following are exceptions to the vesting
rules:
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An option held
by a Participant who dies while an employee vests immediately but
can be exercised by a legal representative or beneficiary only in
accordance with the original vesting schedule.
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An option vests
and becomes exercisable immediately upon certain Change in Control
events described in the Plan.
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A Reload Option
vests immediately but is not exercisable until at least 6 months
after its grant date.
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An option held
by a Participant who retires under a Company, subsidiary or
government retirement plan at least 6 months after the grant date
is not forfeited. Such option vests in accordance with the original
vesting schedule of the grant.
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6. No option may be exercised after its stated
termination date or prior to the date it vests or, in the case of
death or retirement, the date it would have vested in accordance
with its original vesting schedule.
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7. Vested options that were issued under the
Plan and are held by Participants who, at least six months after
the grant date, retire under a Company, subsidiary or government
retirement plan in which the Participant is eligible for immediate
payment of a retirement benefit will be exercisable for the
remaining stated terms of the options (after the expiration of any
original vesting schedule periods applicable to such options) or,
if the Participant dies after retiring, 5 years from the date of
the Participant’s death, whichever occurs first.
8. Options held by a Participant who dies while
in the employ of Alcoa may be exercised by the Participant’s
legal representative or beneficiary beginning after the expiration
of any stated period of vesting applicable to such options and
ending 5 years after the Participant’s death, but not later
than the expiration date of the option.
9. Vested, exercisable options held by a
Participant whose employment with the Company terminates (other
than as a result of the Participant’s retirement, death, or
as provided in paragraph 10 below) may be exercised only within a
period of 90 days after the date of employment termination, but not
later than the expiration date of the option.
10. As determined at the Company CEO’s
discretion, if an unvested stock option 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 a
divestitu
