EXHIBIT 10(s)
ALCOA DEFERRED COMPENSATION
ESTATE ENHANCEMENT PLAN
ADOPTED BY
ALUMINUM COMPANY OF AMERICA
The Compensation Committee of the Board of Directors of
Aluminum Company of America has adopted this Alcoa Deferred
Compensation Estate Enhancement Plan for the exclusive benefit of
select officers and employees (1) who are actively at work for
the Company or a subsidiary on or after July 10, 1998, (2) who
meet the requirements for participation hereunder, and (3) who
are not in a collective bargaining unit. The purposes of this
Plan are to promote the growth and profitability of the Company,
to attract and retain employees and to provide eligible employees
with certain benefits under the terms and conditions as set forth
herein. This Plan is designed as an alternative to the Alcoa
Deferred Compensation Plan, to provide an estate enhancement
option to eligible officers and other employees. Accordingly,
participants' account balances in the Alcoa Deferred Compensation
Plan will be transferred to this Plan.
ARTICLE I - DEFINITIONS
1.1 The following terms have the specified meanings.
"Additional Salary Reduction Credits" means any amounts
deemed to be credited to a Participant's account equivalent to
the dollar amount by which a Participant elected to reduce his or
her salary up to a whole percentage of not more than 14%. A
Participant who is authorized by the Inside Director Committee
may elect to reduce his or her salary up to a whole percentage of
not more than 20%.
"Affiliate" means any non-corporate business entity which
the Company and/or one or more Subsidiaries control in fact.
"Alternative Death Benefit" means a Company-paid death
benefit paid by the Company to the Participant's Death Benefit
Beneficiary pursuant to an Alternative Death Benefit Election
under Section 8.5.
"Alternative Death Benefit Amount" means, with respect to a
Participant, an amount that, after subtracting any Company
federal, state, and local income tax savings resulting from the
deductibility of the payment for corporate tax purposes, is
equal to the Participant's Coverage Amount; provided, that for
purposes of this definition, the Participant's Coverage Amount
shall be the amount that would be payable to the Death Benefit
Beneficiary of the Participant under Section 8.4 if there was no
Alternative Death Benefit Election. The Alternative Death
Benefit Amount shall be determined at the time the payment is to
be made, based on the Company's federal, state and local income
tax rate (calculated at the marginal tax rate then applicable to
the Company, but net of any federal deduction for state and local
taxes) at the time of the payment, and shall be determined by the
Committee or its designee.
"Alternative Death Benefit Election" means an election made
by the Participant pursuant to Section 8.5.
"Assignee" means that person or entity designated as such in
a Participant's Assignment of Rights Agreement, or the person(s)
or entity to which the Participant or assignee assigns his or her
interest under this Plan.
"Award Date" means February of the calendar year following
the Award Year except as may be otherwise designated in
accordance with the provisions of the Incentive Compensation
Plan.
"Award Year" means the calendar year for which awards are
made under the provisions of the Incentive Compensation Plan.
"Board" means the Board of Directors of the Company or any
duly authorized committee thereof.
"Committee" means the Compensation Committee or its
designee..
"Company" means Aluminum Company of America.
"Company Death Benefit" means the portion of the Policy's
death benefit payable to the Company as provided in Section 8.4.
"Company Stock" means Company Stock as defined in the
Savings Plan.
"Continuous Service" means, except as modified by the
balance of this definition, the period of continuous employment
with the Company, Subsidiary or Affiliate, either as a salaried
employee or as an hourly-rated employee, subject to such rules as
may be adopted from time to time by the Committee. Continuous
Service shall terminate upon any quit, dismissal, discharge or
any other termination of employment with the Company, Subsidiary
or Affiliate; any determination by the Committee that employment
with these entities has terminated shall be conclusive.
Continuous Service upon reemployment does not include any
Continuous Service accrued prior to a termination of Continuous
Service, except that if a Participant's Continuous Service is
terminated by reason of retirement, Continuous Service at the
time of such termination shall be reinstated upon the date of his
or her reemployment with the Company, a Subsidiary or Affiliate.
Absences from such employment due to inactive status, sick leave,
leave of absence or layoff shall not constitute a termination of
Continuous Service, but such time lost shall not count as
Continuous Service except to the extent determined by the
Committee under uniform rules applicable to all employees
similarly situated.
"Credited Amount" means the portion of the Participant's
Elected Amount for which the Company has paid a Premium in
accordance with the provisions of Section 8.2(a) as of the time
the determination is made.
"Credits" means the Salary Reduction Credits, Additional
Salary Reduction Credits, Incentive Compensation Deferral
Credits, Excess D Deferral Credits and Matching Company Credits
credited to a Participant's account with a deemed value
equivalent to the unit value of the Investment Option in which
each Credit is deemed to be invested.
"Death Benefit Beneficiary" means the person or persons
designated in writing on the Death Benefit Agreement Beneficiary
Designation Form in accordance with the provisions of Article
VIII of the Plan.
"Deferred Compensation Beneficiary" means the person or
persons designated in writing by a Participant, in accordance
with Article VII of this Plan, to receive benefits in the event
of the Participant's death.
"Earnings Credits" mean:
(a) the interest deemed to be credited to the accounts of
Participants in the Equivalent Fixed Income Investment Fund,
(b) the amount of the increase or decrease in the deemed
value of Participant's investments in the Equivalent Equity
Investment Fund, and
(c) the deemed amount of dividends received, and gain or
loss realized on, Equivalent Company Stock.
(d) zero amount for any account elected under the Estate
Enhancement Option Election.
"Effective Date" means July 10, 1998.
"Elected Amount" means the total amount of the Participant's
Plan account balance and future Incentive Compensation Plan
awards identified by the Participant in the Participant's
Election.
"Election" means the Participant's Estate Enhancement Option
Election made pursuant to the provisions of the Plan.
"Eligible Employee" means all officers and other employees
of the Company or a subsidiary selected from time to time by the
Compensation Committee or its designee, and who are eligible to
participate in the Alcoa Deferred Compensation Plan.
"Equivalent Company Stock" means the number of shares of
Company Stock deemed to be credited to a Participant's account.
"Equivalent Equity Investment Fund" means the phantom
investment vehicle which is deemed to be equivalent in all
respects, including value, to the Equity Investment Fund
established under the Savings Plan.
"Equivalent Fixed Income Fund" means the phantom investment
vehicle which is deemed to be equivalent in all respects,
including value, to the Fixed Income Fund established under the
Savings Plan.
"Estate Enhancement Option Election" means an election made
by a Participant pursuant to the terms of Article VIII of the
Plan.
"Excess D Deferral Credits" means any amounts deemed to be
credited to a Participant's account equivalent to the dollar
amount which the Participant will have automatically credited to
the Plan in accordance with the Company's Employees' Excess
Benefits Plan D.
"Face Value Beneficiary" means the person or persons
designated in writing on the Insurance Agreement for ADEEP Plan
form in accordance with the provisions of Article VIII of the
Plan.
"Frozen Deferred Account Beneficiary" means the person or
persons designated in writing on the Frozen Deferred
Compensation/Fee Beneficiary Designation Form in accordance with
the provisions of Article VIII of the Plan.
"Incentive Compensation Deferral Credits" means any amounts
deemed to be credited to a Participant's account on the
applicable Award Date equivalent to the dollar amount which the
Participant has elected to defer from an award which he or she is
eligible to receive under the Company's Incentive Compensation
Plan for the 1998 Award Year or any later Award Year.
"Incentive Compensation Plan" means the Incentive
Compensation Plan of Aluminum Company of America.
"Inside Director Committee" means the Committee appointed by
the Board, which has been given authority to implement certain
policy decisions regarding qualified and non-qualified pension
plans.
"Insurer" means, with respect to a Participant's Policy, the
insurance company issuing the Policy on the Participant's life
(or on the lives of the Participant and the Participant's spouse,
in the case of a Survivorship Policy) pursuant to the provisions
of the Plan.
"Investment Options" means the phantom investment vehicles
established hereunder for either Salary Reduction Credits,
Additional Salary Reduction Credits, Matching Company Credits,
Incentive Compensation Deferral Credits and/or Excess D Deferral
Credits with reference to the equivalent investment options under
the Savings Plan, or any other such equivalent investment option
later added to the Savings Plan, unless otherwise determined by
the Inside Director Committee.
"Matching Company Credits" means an amount deemed to be
equivalent to the dollar amount that otherwise would have been
contributed by the Company to the Participant's account under the
Savings Plan, had the Participant elected to contribute to the
Savings Plan an amount equivalent to the Participant's elected
Salary Reduction Credits under this Plan and the Participant's
contribution under the Savings Plan had not been limited by the
internal Revenue Code's limits on contributions to the Savings
Plan.
"Other Plan" means any cash or deferred arrangements
established under Section 401(k) of the Internal Revenue Code of
1986 as amended, other than the Savings Plan, under which a
Participant may elect to have a portion of his or her Salary
reduced.
"Participant" means any Eligible Employee who commences
participation in this Plan as provided in Article II.
"Participant's Coverage Amount" means the portion of the
Policy's death benefit payable to the Death Benefit Beneficiaryof
the Assignee as provided in Section 8.4.
"Plan" means the Alcoa Deferred Compensation Estate
Enhancement Plan, adopted by the Company as described herein or
as from time to time hereafter amended.
"Plan Administrator" means the Committee, or its designee.
"Policy" means the life insurance coverage acquired on the
life of the Participant (or on the lives of the Participant and
the Participant's spouse, in the case of a Survivorship Policy)
by the Company.
"Policy Owner" means the Company.
"Premium" means, with respect to a Policy on the life of a
Participant (or the lives of a Participant and a Participant's
spouse, if the Policy is a Survivorship Policy), the amount the
Company is obligated, pursuant to the terms of this Plan, to pay
to the Insurer with respect to such Policy.
"Salary" means the regular base salary or hourly wages
payable during such periods as the employee is a Participant.
Where commission payments constitute all or part of an employee's
monthly remuneration, the commissions actually paid as
remuneration during a regular pay period will be used to
determine the salary for such employee. Salary shall not include
overtime, extended workweek premium, cost of living allowance
where separately designated, bonus, shift or other premiums, or
other payments, fees or allowances made for specific purposes as
determined by the Company.
"Salary Reduction Credits" means any amounts deemed to be
credited to a Participant's account equivalent to the dollar
amount by which a Participant elected to reduce his or her Salary
by a whole percentage of not more than 6%; provided, however, a
Participant who has elected and is contributing a portion of his
or her Salary under the Savings Plan, may not elect to defer any
percentage of said Salary as a Salary Reduction Credit under this
Plan.
"Savings Plan" means the Alcoa Savings Plan for Non-
Bargaining Employees, as now in existence or as hereafter
amended.
"Subsidiary" means a corporation at least 50% of whose
outstanding voting stock is owned or controlled by the Company
and/or one or more other Subsidiaries, and any non-corporate
business entity in which the Company and/or one or more other
Subsidiaries have at least a 50% interest in capital or profits.
"Survivorship Policy" means a Policy insuring the lives of
the Participant and a Participant's spouse, with the death
benefit payable at the death of the last survivor of the
Participant and his or her spouse.
"Termination of Service" (or "Terminates Service)" means any
termination from active service.
"Year of Plan Participation" means any 12-month period
extending from the first day of the month a Participant begins
participation in the Savings Plan and/or this Plan if the
Participant has maintained an account in the Savings Plan and/or
this Plan for such 12-month period.
"Zero Investment Fund" means the phantom investment vehicle
which is deemed to hold amounts related to Participants' Estate
Enhancement Option Elections.
ARTICLE II - PARTICIPATION
2.1 An Eligible Employee shall commence participation in
this Plan upon the first day of his or her first full payroll
period following selection by the Committee or its designee.
Such Eligible Employee may only become a Participant after
executing the appropriate form for authorizing payroll deductions
from his or her Salary and for Selecting investment options. An
Eligible Employee shall also commence participation on the Award
Date applicable to the portion of any award which he or she is
eligible to receive under the provisions of the Incentive
Compensation Plan and has deferred for the 1998 Award Year or any
later Award Year, or on such date that his or her account would
have been credited with Excess D Deferral Credits.
ARTICLE III - PARTICIPANT DEFERRALS
3.1 Commencing July 10, 1998, a Participant may by proper
election reduce his or her Salary each month in an amount up to,
but not more than 6% of his or her Salary, which shall be deemed
to be credited to his or her account as Salary Reduction Credits.
Whether or not the Participant elects any Salary Reduction
Credits, Participant may by proper election reduce his or her
Salary each month in an amount up to, but not more than 14% of
said Salary, which shall be credited to his or her account as
Additional Salary Reduction Credits. The figure 14% in the
foregoing sentence is revised to read 20% for Participants whose
Additional Salary Reduction Credit limitation has been increased
to 20% by the Inside Director Committee.
A Participant may change a previously elected percentage of
Salary reduction or terminate further deferrals in this Plan
effective for the first full payroll period following the date
the Company or its designee is advised of such request either
orally or in writing in accordance with uniform rules established
by the Committee.
3.2 In accordance with uniform rules established by the
Committee, Salary Reduction Credits and Additional Salary
Reduction Credits shall be deemed to be credited to the
Participant's account equivalent to the amount by which the
Participant's Salary is reduced in each category.
3.3 Commencing for the 1998 Award Year and later Award
Years a Participant who by proper election has deferred under the
Incentive Compensation Plan all or a portion of an award which he
or she is eligible to receive under said Plan, shall have his or
her account deemed to be credited with Incentive Compensation
Deferred Credits in an amount equal to the amount of such
deferral.
3.4 Excess D Deferral Credits shall be credited to
Participants' accounts as applicable.
3.5 A Participant who is authorized by the Inside Director
Committee and who by proper election has deferred the receipt of
any "special payments" (as determined by the Company), shall have
his or her account credited in an amount equal to the amount of
such deferral. Such special payment credits shall be treated as
Incentive Compensation Deferral Credits
ARTICLE IV - MATCHING COMPANY CREDIT
4.1 A Participant who has elected to reduce his or her
Salary under this Plan shall have his or her account deemed to be
credited with Matching Company Credits for which he or she is
eligible.
ARTICLE V - INVESTMENTS
5.1 (a) Salary Reduction Credits, Additional Salary
Reduction Credits, Excess D Deferral Credits and Incentive
Compensation Deferral Credits shall be deemed to be invested in
10% increments, at the election of the Participant, in one or
more of the Investment Options.
A Participant may change his or her investment election,
effective for the first full payroll period following the date
the appropriate direction has been properly received by the
Company or its designee, in accordance with uniform rules
established by the Committee.
(b) Matching Company Credits shall be deemed to be invested
in the phantom investment vehicle which is equivalent to the
investment vehicle under the Savings Plan in which the Company's
matching contributions to Participants' accounts are invested.
(c) Amounts elected under an Estate Enhancement Option
Election will be deemed to be invested in the Zero Investment
Fund which does not provide any earnings.
ARTICLE VI - TRANSFER OF CREDITS
6.1 (a) Once every month a Participant may, by appropriate
direction which is properly received by the Company or its
designee, in accordance with uniform rules established by the
Company ("Appropriate Direction"), elect to transfer in
increments of 10% all or part of the deemed value of his or her
Salary Reduction Credits, Additional Salary Reduction Credits,
Incentive Compensation Deferral Credits, Excess D Deferral
Credits, except as may be limited by the Committee, from any one
or more investment Options to any one or more other such
Investment Options. Such a transfer shall not constitute a
change in the Participant's current investment election.
(b) Once every month a Participant who has attained 5 Years
of Plan Participation may, after Appropriate Direction, elect to
transfer in increments of 10% all or part of his or her Matching
Company Credits, except as may be limited by the Committee, which
have been in his or her account for two full calendar years from
the date that said Matching Company Credits were deemed to be
allocated to the Participant's account, from the Investment
Option in which such Credits are deemed to be invested, to any
one or more other Investment Option.
(c) Effective Date of Transfer. The effective date of any
transfer under paragraphs (a) or (b) above shall be the date for
which the Appropriate Direction to the Company or its designee
has been properly received in accordance with uniform rules
established by the Company.
Notwithstanding any other provision, any amounts elected
under the Estate Enhancement Option Election cannot be
transferred from the Zero Investment Fund.
(d) Notwithstanding the foregoing, upon a Participant's
termination of employment, for any reason other than retirement,
he or she may not elect to transfer any part of his or her Salary
Reduction Credits, Additional Salary Reduction Credits, Matching
Company Credits, Incentive Compensation Deferral Credits, Excess
D Deferral Credits and Earnings Credits from the investment
vehicle in which such Credits were deemed to be invested on the
date employment was terminated, to any other investment vehicle.
(e) The Company reserves the right to refuse to honor any
Participant direction related to investments or withdrawals,
including transfers among investment options, where necessary or
desirable to assure compliance with applicable law including U.S.
and other Securities laws. However, the Company does not assume
any responsibility for compliance by officers or others with any
such laws, and any failure by the Company to delay or dishonor
any such direction shall not be deemed to increase the Company's
legal exposure to the Participant or third parties.
ARTICLE VII - DISTRIBUTIONS
7.1 Except as otherwise specified in this Article VII or in
Article VIII below, the amount of Credits in a Participant's
account shall be distributed to the Participant upon his or her
termination of Continuous Service, for any reason. If at the
time of the Participant's termination of Continuous Service he or
she has attained five or more years of Continuous Service, the
Participant shall receive all Matching Company Credits which have
been credited to his or her account. Termination of the
Participant's Continuous Service prior to attaining five or more
years of Continuous Service shall cause the Participant to
forfeit his or her right to receive all Matching Company credits
contributed to his or her account.
7.2 All distributions made pursuant to the termination of
the Participant's Continuous Service by reason other than death
or retirement shall be paid to the Participant as soon as
administratively practical in a lump sum.
Notwithstanding the foregoing, amounts in the Zero
Investment Fund will only be distributed in accordance with the
Estate Enhancement Option provisions of Article VIII.
7.3 Prior to his or her retirement date, a Participant may
elect that the value of his or her account be distributed either
in a lump sum at retirement or in annual installments of any
number designated by the Participant up to, but not more than ten
(10) following his or her retirement, commencing the January 31
of the first calendar year following such retirement and each
January 31 thereafter until he or she has received all
installments. A Participant's election to receive installments
must be made at least one year prior to his or her retirement
date. The Participant's election to receive either a lump sum or
annual installments shall become irrevocable one year prior to
the Participant's retirement date, or at such other time as may
be approved by the Committee. In the event the Participant fails
to make such an election, all amounts in his or her account shall
be distributed as a lump sum distribution as soon as
administratively practical after his or her retirement.
7.4 The Deferred Compensation Beneficiary under this Plan
shall be the Participant's spouse unless otherwise designated in
writing by the Participant and such other designated Deferred
Compensation Beneficiary has been agreed to in writing by the
Participant's spouse on a form approved by the Committee.
Distributions from this Plan to a Deferred Compensation
Beneficiary shall be in a lump sum or in annual installments of
any number designated by the Participant up to, but not more than
ten (10) following his or her death commencing the first January
31 after the Participant's death and each January 31 thereafter
until all installments have been distributed.
In the event a Deferred Compensation Beneficiary dies prior
to receiving all the annual installments which he or she is
entitled to receive from this Plan, any remaining installments
will be distributed as soon as administratively practical in a
lump sum to the Deferred Compensation Beneficiary's estate.
7.5 This Plan shall not be construed as conferring any
rights upon any Participant for continuation of employment with
the Company, Subsidiary or Affiliate, nor shall it interfere with
the rights of the Company, Subsidiary or Affiliate to terminate
the employment of any Participant and/or to take any personnel
action affecting any Participant without regard to the effect
which such action may have upon such Participant as to recipient
of benefits under this Plan.
7.6 No benefit under this Plan may be assigned,
transferred, pledged or encumbered or be subject in any manner to
alienation or anticipation. The foregoing does not prevent the
assignment of any separate right under the Estate Enhancement
Option Election.
7.7 (a) Benefits payable hereunder shall be payable out of
the general assets of the Company, and no segregation of assets
for such benefits shall be made. The right of a Participant or
any Deferred Compensation Beneficiary to receive benefits under
this Plan shall be an unsecured claim against said assets and
shall be no greater than the rights of an unsecured general
creditor to the Company. Notwithstanding the foregoing, in the
event the Company establishes a trust, to which it may, but shall
not be required to contribute money or other property of the
Company in contemplation of paying benefits under this Plan, such
money or other property shall remain subject to the claims of
creditors of the Company.
(b) Notwithstanding any other provisions of this Plan, if
any amounts held in a trust of the above described nature are
found, due to the creation or operation of said trust, in a final
decision by a court of competent jurisdiction, or under a
"determination" by the Internal Revenue Service in a closing
agreement in audit or a final refund disposition (within the
meaning of Section 1313(a) of Internal Revenue Code of 1986, as
amended), to have been includable in the gross income of a
Participant or Deferred Compensation Beneficiary prior to payment
of such amounts from said trust, the trustee for the trust shall,
as soon as practicable, pay to such Participant or Deferred
Compensation Beneficiary an amount equal to the amount determined
to have been includable in gross income in such determination,
and shall accordingly reduce the Participant's or Deferred
Compensation Beneficiary's future benefits payable under this
Plan. The trustee shall not make any distribution to a
Participant or Deferred Compensation Beneficiary pursuant to
this paragraph 7.7(b) unless it has received a copy of the
written determination described above together with any legal
opinion which it may request as to the applicability thereof.
7.8 All participants remain liable for any taxes which are
or will be applicable to the amounts payable under this contract
including (but not limited to) social security taxes, federal
income taxes and state and local income taxes. In addition, if
the Internal Revenue should determine that amounts payable are
includable at any point prior to payment, the participants remain
solely liable for such taxes and any penalties associated with
such. If the participants transfer any right in this benefit,
the participants shall be solely liable for determining the value
of the amounts subject to gift tax and the resulting amount of
gift tax, if applicable.
ARTICLE VIII - ESTATE ENHANCEMENT OPTION
8.1. Estate Enhancement Option Election
(a) A Plan Participant may make an Estate Enhancement
Option Election with regard to all or a portion of the value of
his or her account at the time of such election, as well as
related to amounts of Incentive Compensation Plan awards earned
and deferred under the Plan after the date of the election. The
Participant must make an Election using a form provided by the
Company, the terms of which are hereby incorporated by reference
in the Plan.
(b) The Company shall pay life insurance premiums on a life
insurance policy on the life of the Participant, or the lives of
the Participant and the Participant's spouse if so elected by the
Participant. The premiums of the life insurance policy will be
equal in amount to the amount subject to the Participant's
Election.
(c) As of the time of the Participant's Election, the value
of the portion of the Participant's account subject to such
election will be transferred to the Zero Investment Fund and
there will be no further Earnings Credits with respect to such
amounts. If the Participant's Election includes Incentive
Compensation Plan awards earned and deferred after the date of
the Election, there will be no Earnings Credits applied to these
amounts after they are credited to a Participant's account.
(d) Notwithstanding the provisions of Article VII but
subject to the provision of Section 8.3(a), any amounts in a
Participant's account which are subject to the Election will be
paid in a single sum to the Frozen Deferred Account Beneficiary
designated by the Participant, with the payment to be made by the
Company as soon as administratively practical following the death
of the Participant (or after the death of the last survivor of
the Participant and the Participant's spouse, if the insurance
policy is a survivorship policy insuring the Participant and the
Participant's spouse). The Death Benefit and Face Value
Beneficiary for amounts subject to an Election will be separately
designated on a form provided by the Company, and may be changed
by the Participant in accordance with procedures established by
the Company.
(e) Notwithstanding the provisions of Section 7.6, the
Participant may designate a trust or other entity or
individual(s) to own the Participant's rights under the Policy
issued pursuant to the Election, or assign any such rights to a
trust or other entity or individual(s).
(f) If the Insurer cancels the Participant's Policy
pursuant to Policy provisions related to suicide of the
Participant (or Participant's spouse if the Policy insures both
the Participant and the Participant's spouse) or material
misstatement of information, then the Participant's Election will
be null and void as of the time the Policy is canceled. In this
event, the Company will recover an amount equivalent to the
cumulative amount of Premiums paid from amounts subject to the
Election held in the Zero Investment Account but which have not
yet been used to pay Premiums.
(g) Except as may be otherwise provided in a Participant's
Death Benefit Agreement, an Election will be irrevocable.
8.2 Payments of Premiums
(a) Company Payments. Within thirty (30) days of the
issue of the Participant's Policy, the Company shall pay a
Premium equal to the amount of the Participant's Plan account
balance subject to the Participant's Election. With respect to
an Incentive Compensation Plan award that is subject to the
Participant's Election and that is credited to the Participant's
Plan account balance after the issue of the Participant's Policy,
the Company shall pay a Policy Premium equal to the amount
credited to the Participant's account no later than thirty (30)
days after the amount is credited to the Participant's Plan
account.
(b) Participant Payments. Except as otherwise provided
in this Plan, a Participant (or Assignee) shall not be required
to pay any portion of the Premium due on the Policy.
8.3 Policy Ownership
(a) Ownership. The Company shall be the owner of the
Policy and shall be entitled to exercise the rights of ownership,
except that the following rights shall be exercisable by the
Participant: (i) the right to designate the Death Benefit
Beneficiary to receive payment of that portion of the death
benefit under such Policy equal to the Participant's Coverage
Amount unless there is an Alternative Death Benefit Election in
effect, and (ii) the right to assign any part or all of the
Participant's rights under the Policy to any person, entity, or
trust. The Company shall not borrow from, hypothecate, or
withdraw cash value from, surrender in whole or in part, cancel,
or in any other manner encumber the Policy without the prior
written consent of the Participant. Notwithstanding any other
provision of the Plan, both the Participant and the Company have
separate and full right to reduce the Policy face amount pursuant
to Section 8.6.
(b) Possession of Policy. The Company shall keep
possession of the Policy. The Company agrees to make the Policy
available to the Participant or to the Insurer at such times, and
on such terms as the Company determines for the sole purpose of
endorsing or filing any change of Death Benefit or Face Value
Beneficiary or assignment on the Policy.
(c) Investment of Policy Cash Values. If the Policy
provides the Policy Owner with a choice of investment funds for
the Policy cash values, the Company shall invest the cash values
in the funds selected by and in the proportions specified by the
Participant, unless otherwise specified in this Plan. The
Company agrees to submit an investment election to the Insurer
within thirty (30) days after a written investment request by the
Participant or other person or entity designated in the Plan.
8.4. Death Benefit.
Upon the death of the Participant or last survivor of the
Participant and the Participant's spouse, the death benefit under
the Policy shall be divided as follows:
(a) The Company shall be entitled to receive as the Company
Death Benefit an amount equal to the greater of: (i) the Policy
cash accumulation value immediately prior to the death of the
Participant or survivor of the Participant and the Participant's
spouse, and before any surrender charges; or (ii) 200 percent of
the cumulative Premiums paid by the Company under the Policy. If
the Policy provides for a death benefit equal to the sum of the
face amount of the Policy and any cash account or accumulation
value, any Company Death Benefit should first be paid from the
cash account or accumulation value portion of the death benefit.
(b) The Death Benefit Beneficiary of the Participant shall
be entitled to receive the Participant's Coverage Amount, which
shall consist of the excess, if any, of the Policy's death
benefit over the Company Death Benefit less any unforeseen
extraordinary expenses incurred by the Company under this Plan
which are not recovered under any other agreement. These
unforeseen expenses may include such taxes or extraordinary
administrative expenses as determined by the Company.
The Company agrees to execute an endorsement to the Policy
issued to it by the Insurer providing for the division of the
Policy death benefit in accordance with the provisions of this
Section.
Notwithstanding the provisions of this Section, if the
Policy death benefit becomes payable while there is an
Alternative Death Benefit Election in effect pursuant to Section
8.5, then the entire Policy death benefit shall be paid to the
Company.
8.5. Alternative Death Benefit Election.
Subject to the discretion of the Committee, the Participant
may elect an Alternative Death Benefit in lieu of the insurance
benefit provided under this Plan. Any such election shall be
filed with the Committee in such form as may be prescribed by the
Committee. The Alternative Death Benefit shall be paid by the
Company from the general funds of the Company, and will not
constitute an insurance benefit. It will be paid by the Company
to the Participant's Death Benefit Beneficiary at the time the
Participant's insurance death benefit would have been paid (at
the Participant's death for single life coverage, or at the death
of the survivor of the Participant and the Participant's spouse
if the Policy is a Survivorship Policy). The amount of the
payment shall be equal to the Alternative Death Benefit Amount.
As long as an Alternative Death Benefit Election is in effect,
the Death Benefit Beneficiary of the Participant shall receive
only the Alternative Death Benefit, and shall not be entitled to
receive any portion of any death benefits that would become
payable under the Participant's Policy, and the Participant shall
cooperate with the Company in effecting a change of Death Benefit
Beneficiary of the Participant's Policy to achieve such result.
An Alternative Death Benefit Election (or an election to revoke
such an election) shall be effective when any necessary
documentation is submitted to and accepted by the Insurer. The
Company will promptly submit any required forms or documents to
the Insurer when an Alternative Death Benefit Election is made or
revoked.
8.6. Election to Reduce Policy Face Amount.
The Participant or the Company may elect to reduce the
Policy face amount, except that the Policy face amount shall not
be reduced to an amount less than the Company Death Benefit.
Within sixty (60) days of receipt of a written request from the
Participant, the Company shall complete and submit the necessary
forms to the Insurer to reduce the Policy face amount in
accordance with the Participant's request. Within sixty (60)
days of receipt of a written request from the Company, the
Participant shall cooperate to complete any necessary forms in
accordance with the Company's request.
8.7. Termination of Employment.
Upon a Termination of Service by the Participant:
(a) The Participant's Election shall terminate with respect
to any Incentive Compensation Plan award amounts which have not
been credited to the Participant's Plan account as of the time of
the Participant's Termination of Service.
(b) The Company's obligation to pay further Premiums for
the Participant's Policy will terminate, except that the Company
will be obligated to pay any Premium it is obligated to pay under
Section 8.2(a) with respect to any amounts credited to the
Participant's Plan account prior to the Participant's Termination
of Service for which a Premium has not yet been paid.
(c) The Policy face amount will be reduced by an amount
determined by multiplying the initial Policy face amount by a
fraction, the numerator of which will be equal to the Credited
Amount (including any Premium payable under Section 8.7(b) and
the denominator of which will be equal to the Election Amount.
Provided, however, that the face amount reduction determined
pursuant to the preceding sentence will be reduced by the amount
of any face amount reduction already applied pursuant to Section
8.6.
(d) Within thirty (30) days after the Participant
Terminates Service, the Participant may make a Policy premium
payment to the Insurer. If such a premium is paid, the amount
will be considered a Credited Amount for the purpose of Section
8.7(c).
8.8. Company Default
(a) Company Default. A Company Default shall be
deemed to have occurred with respect to the Policy if the Company
fails to pay a Premium on the Policy as required under the terms
of the Plan within sixty (60) days after the due date for such
Premium, or if the Company processes or attempts to process a
policy loan, or a complete or partial surrender, or a cash value
withdrawal without the prior written approval from the
Participant.
(b) Rights Upon Company Default. In the event of a Company
Default as described in Section 8.8 (a), the Participant will
have the right to require the Company to cure the Company Default
by notifying the Company in writing within sixty (60) days after
the Company Default occurs, or if later, within thirty (30) days
after the Participant becomes aware of the Company Default. If
the Company fails to cure the Company Default within sixty (60)
days after being notified by the Participant of the Company
Default, the Participant will have the right to require the
Company to transfer its interest in the Participant's Policy to
the Participant. The Participant may exercise the right by
notifying the Company, in writing within sixty (60) days after
the Company Default occurs. Upon receipt of such notice, the
Company will immediately transfer its rights in the Policy to the
Participant, and the Company will thereafter have no rights with
respect to such Policy. A Participant's failure to exercise its
rights under this Section shall not be deemed to release the
Company from any of its obligations under this Plan, and will not
preclude the Participant from seeking other remedies with respect
to the Company Default. Also, a Participant's failure to
exercise its rights under this Section will not preclude the
Participant from exercising such rights upon a later Company
Default.
(c) Notices. All notices hereunder will be in writing and
sent by first class mail with postage prepaid. Any notice to the
Company shall be addressed to the attention of the Committee at
the principal office of the Company at Alcoa Corporate Center,
201 Isabella Street, Pittsburgh, PA 15212-5858. Any notice to
the Participant will be addressed to the Participant at the
address on file with the Company. Any party may change its
address by giving written notice of such change to the other
party pursuant to this Section.
ARTICLE IX - ADMINISTRATION AND EXPENSES OF THE PLAN
9.1 The general administration of this Plan shall be by the
Committee. The Committee's resolution of any matter concerning
this Plan shall be final and binding upon the Company, Subsidiary
or Affiliate and any Participant and/or beneficiary affected
thereby.
The Plan Administrator will have the authority to make,
amend, interpret, and enforce all rules and regulations for the
administration of this Plan and decide or resolve any and all
questions, including interpretations of this Plan, as may arise
in connection with the Plan in the Plan Administrator's sole
discretion. In the administration of this Plan, the Plan
Administrator from time to time may employ agents and delegate to
them or to others such administrative duties as it sees fit. The
Plan Administrator from time to time may consult with counsel,
who may be counsel to the Company. The Company will indemnify
and hold harmless the Plan Administrator and any employees of the
Company to whom administrative duties are delegated, against any
and all claims, loss, damage, expense or liability arising from
any action or failure to act with respect to this Plan, except in
the case of gross negligence or willful misconduct by the Plan
Administrator.
All costs and expenses incurred in administering the Plan,
including the expenses of the Committee or the Plan
Administrator, the fees and expenses of the Trustee, the fees and
charges payable under the investment arrangements, and other
legal and administrative expenses, shall be paid by the Plan.
Notwithstanding, for any Affiliate of which the Company owns less
than an 80% interest as defined under Internal Revenue Code
Section 1504, the obligation of and liability for the deferred
compensation benefits accrued under this Plan for Participants
employed by such an Affiliate, shall remain the sole obligation
and liability of the Affiliate by express resolution of its board
or other governing body.
ARTICLE X - AMENDMENT AND TERMINATION
10.1 This Plan may be amended, suspended or terminated at
any time by the Board; provided, however, that no such amendment,
suspension or termination shall reduce or in any manner adversely
affect any Participant's or assignee's rights with respect to
benefits that are payable or may become payable under this Plan
based upon said Participant's Credits as of the date of such
amendment, suspension or termination.
ARTICLE XI - SUCCESSORS
11.1 The terms and conditions of the Plan will inure to the
benefit of and bind the Company and the Participant and their
successors, assignees (including any Assignee), and
representatives. The Company will have the right to absolutely
and irrevocably assign its rights, title and interest in a Policy
without the consent of the Participant or Assignee.
ARTICLE XII - CONSTRUCTION
12.1 This Plan shall be construed, regulated and
administered under the laws of the Commonwealth of Pennsylvania,
including its choice of law provisions and applicable statute of
limitations.