Exhibit 10(l)
ALUMINUM COMPANY OF AMERICA
DIVIDEND EQUIVALENT COMPENSATION PLAN
1. PURPOSE.
The purpose of the Aluminum Company of America Dividend
Equivalent Compensation Plan (the "Plan") is to attract and
retain outstanding individuals as officers and key employees
of Aluminum Company of America (the "Company") and its
subsidiaries and to furnish additional incentives to such
individuals through cash awards related to the performance
of the Company and its common stock. To this end, the Board
of Directors of the Company or the Committee hereinafter
designated may determine that compensation shall be awarded
and paid periodically to officers and other key employees of
the Company and its subsidiaries, in amounts based upon cash
dividends paid to holders of common stock of the Company, on
the terms and subject to the conditions set forth in this
Plan.
2. PARTICIPANTS.
Participants in the Plan shall consist of such officers and
other key employees of the Company and its subsidiaries as
the Committee in its sole discretion may select from time to
time to receive dividend equivalent payments. Participants
who are no longer active employees of the Company or one of
its subsidiaries may continue to have Plan accounts, but no
new dividend equivalent units may be credited to the
participant's account once active employment ceases, except
for adjustments required by Section 6 of this Plan.
3. ADMINISTRATION OF THE PLAN.
(a) Committee. The Plan shall be administered by a
committee (the "Committee") consisting of at least two
members designated by the Board of Directors of the Company
from among those of its members who are not officers or
employees of the Company or a parent or subsidiary of the
Company and who otherwise satisfy the definition of a "Non-
Employee Director" in Rule 16b-3(b)(3) promulgated under
Section 16 of the Securities Exchange Act of 1934 (the
"Exchange Act"). In the absence of specific rules to the
contrary, action by the Committee shall require the consent
of a majority of the members of the Committee, expressed
either orally at a meeting of the Committee or in writing in
the absence of a meeting.
(b) Committee Authority. Subject to the provisions of
the Plan, the Committee shall have authority (a) to
determine which employees of the Company and its
subsidiaries shall be eligible for participation in the
Plan; (b) to select employees to receive compensation
payments under the Plan; (c) to determine the number of
share units on which dividend equivalent payments will be
made and all other terms and conditions of any payment; and
(d) to determine the amount of the dividend equivalent
payment per share unit which may be a percentage, not
exceeding 100%, of the amount of the cash dividend per share
of common stock payable to holders of the Company's common
stock. The Committee also shall have authority to interpret
the Plan and to establish, amend and rescind rules and
regulations for the administration of the Plan, and all such
interpretations, rules and regulations shall be conclusive
and binding on all persons; provided, however, that the
Committee shall not exercise such authority in a manner
adversely and significantly affecting dividend equivalent
payments previously made unless the action taken is required
to comply with any applicable law or regulation.
4. EFFECTIVE DATE AND TERM OF PLAN.
The Plan shall become effective on January 1, 1997. The
Plan shall remain in effect until terminated by action of
the Board of Directors.
5. DIVIDEND EQUIVALENT PAYMENTS.
(a) Dividend Equivalent Units and Dividend Equivalent
Payments. The Board of Directors or the Committee shall
have discretion to make dividend equivalent payments on
hypothetical share units ("Dividend Equivalent Units" or "DE
Units") determined from time to time for participants in the
Plan. The amount of such payments shall be determined by
the Board of Directors or the Committee. The record and
payment dates for dividend equivalent payments will be the
same as the record and payment dates for dividends on shares
of common stock of the Company, except that payment may be
made in the employee's regular pay check next being
delivered after the dividend payment date to shareholders.
(b) Participant Accounts. The Company shall maintain
a dividend equivalent unit account for each participant in
the Plan. Dividend Equivalent Units shall be credited to or
debited from such account as determined by the Committee.
The number of DE Units in any individual participant's
account may not exceed the number of shares subject to stock
options granted under the Company's Long Term Stock
Incentive Plan (or any successor plan) and held by such
participant. DE Units shall not be awarded or credited on
any discount options held by any participant nor shall any
additional DE Units be awarded or credited to any
participant who is not an active employee on the date the
award or credit is made, except as required by operation of
section 6 of this Plan. The Committee shall prescribe in
administrative rules or otherwise the method and timing of
determining the number of DE Units to be credited to or
debited from Plan participant accounts.
(c) Account Value and Activity. Dividend Equivalent
Units shall have no value and shall not entitle the
participant to receive any benefit or payment other than a
cash dividend equivalent payment if, when and in such amount
as determined by the Board of Directors or the Committee in
its discretion. No person other than a current or former
active employee of the Company or one of its subsidiaries
may have a Plan account or any interest therein.
(d) Additional Terms and Conditions. The agreement or
instrument, if any, evidencing an individual's participation
in the Plan may contain such other terms, provisions and
conditions not inconsistent with the Plan as may be
determined by the Committee in its sole discretion. The
Committee may at any time impose such additional terms and
conditions on dividend equivalent payments as it deems
necessary or desirable for compliance with Section 16(a) or
16(b) of the Securities Exchange Act of 1934 and the rules
and regulations thereunder or to preserve or qualify for
deductibility of compensation payable hereunder under
applicable U.S. federal tax law or regulations.
6. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION, ETC.
The number of DE Units in a participant's Plan account shall
be subject to adjustment by the Committee in its sole
discretion in the event of changes in the outstanding common
stock of the Company by reason of stock dividends, stock
splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges or other relevant
changes in corporate structure or capitalization occurring
after the credit thereof, provided that if the Company shall
change its common stock into a greater or lesser number of
shares through a stock dividend, stock split-up or
combination of shares, outstanding Dividend Equivalent Units
shall be adjusted proportionately to prevent inequitable
results.
7. AMENDMENT AND TERMINATION OF PLAN.
The Plan may be amended in any respect or terminated by the
Board of Directors of the Company. In the event of
termination, no participant shall be entitled to receive any
payment or benefit for any DE Units standing in his or her
account prior to termination.
8. MISCELLANEOUS.
(a) No Right to a Payment. Neither the adoption of
the Plan nor any action of the Board of Directors or of the
Committee shall be deemed to give any employee any right to
be selected as a participant or to be paid a dividend
equivalent payment.
(b) Rights as Shareholder. No person shall have any
rights as a shareholder of the Company with respect to any
Dividend Equivalent Units.
(c) Employment. Nothing contained in this Plan shall
be deemed to confer upon any employee any right of continued
employment with the Company or any of its subsidiaries or to
limit or diminish in any way the right of the Company or any
such subsidiary to terminate his or her employment at any
time with or without cause.
(d) Taxes. The Company or a subsidiary shall be
entitled to deduct from any payment under the Plan the
amount of any tax required by law to be withheld with
respect to such payment or may require any participant to
pay such amount to the Company prior to and as a condition
of making such payment.
(e) Nontransferability. No Dividend Equivalent Unit
shall be transferable.
(f) Governing Law. This Plan shall be construed in
accordance with and governed by the laws of the Commonwealth
of Pennsylvania, excluding any choice of law provisions
which may indicate the application of the laws of another
jurisdiction. Any provision of this Plan which is
determined to be illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be severed and
stricken herefrom, and, in that event, the remaining
provisions hereof shall continue in effect, subject in all
cases to the right of the Board of Directors or the
Committee to terminate or modify the Plan at any time.