Exhibit 10.2
ALCOA INC.
SECOND AMENDMENT TO
THE
FEE CONTINUATION PLAN FOR
NON-EMPLOYEE DIRECTORS
(effective September 15,
2006)
WHEREAS, the Fee Continuation Plan
for Non-Employee Directors (the “Plan”) of Alcoa Inc.
(the “Company”) was amended November 10, 1995 (the
“First Amendment”) to freeze payments to be made under
the Plan to directors who were members of the Board at
December 31, 1995; and
WHEREAS, under the First Amendment,
each non-employee Director having 120 or more months of service as
a member of the Board of Directors at December 31, 1995 shall
be entitled to receive payments upon retirement from the Board or
at age 65 (whichever is later) at 100% of the minimum annual cash
retainer fee and annual stock grant amounts, and each non-employee
Director having less than 120 months of service as a member of the
Board of Directors at December 31, 1995 shall be entitled to
receive Fee Continuation Payments upon retirement from the Board or
age 65 (whichever is later) at a rate of 10% of such minimum annual
cash retainer fee and annual stock grant amounts for each full year
of service as a non-employee Director as of December 31, 1995;
and
WHEREAS, the maximum annual payment
for eligible Directors under the Plan is $30,000 and 2000 shares
and the minimum annual payment for eligible Directors under the
Plan is $3,000 and 200 shares; and
WHEREAS, it is in the best interest
of the Company and the Plan Participants to convert the Plan to an
all cash payment plan with equivalent value to the cash and stock
payment formula; and
WHEREAS, it is in the best interest
of the Company and the future Plan Participants to establish a
fixed date for receipt of payments under the Plan on or before
December 31, 2006; and
1
WHEREAS, the Plan Participants and
the future Plan Participants have consented to these proposed
changes; and
WHEREAS, the Board of Directors have
approved such changes;
NOW THEREFORE, the Plan, as amended
by the First Amendment, is hereby further amended effective
September 15, 2006, as follows:
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1.
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Section 5
of the Plan is amended by deleting the second paragraph thereto and
substituting the following:
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“Beginning in 2007, in lieu of
Fee Continuation Payments payable in the form of the
Company’s common stock, an additional cash payment shall be
paid annually as soon as practicable following December 31 of
each year, in an amount equal to the closing price of the
Company’s common stock on December 31 as reported on the
New York Stock Exchange – Composite Transactions, multiplied
by the number of shares of the Company’s common stock to
which the Participant
