{"id":38610,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/change-in-control-severance-plan-alcoa.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"change-in-control-severance-plan-alcoa","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/change-in-control-severance-plan-alcoa.html","title":{"rendered":"Change in Control Severance Plan – Alcoa"},"content":{"rendered":"

AMENDMENT TO <\/strong><\/p>\n

ALCOA INC. <\/strong><\/p>\n

CHANGE IN CONTROL SEVERANCE PLAN <\/strong><\/p>\n

The Alcoa Inc. Change in Control Severance Plan dated as of
\nJanuary 11, 2002 (the “Plan”) is hereby amended as follows: <\/strong><\/p>\n

1. The following provisions of the Plan shall not apply to any person
\nwho becomes an Eligible Employee under the Plan on or after January 1, 2010:
\n<\/strong><\/p>\n

Section 1.18 (iv) Good Reason<\/u> <\/strong><\/p>\n

“Notwithstanding anything in this Section 1.18 to the contrary, any
\ntermination of employment by a Tier I Employee or a Tier II Employee, whether or
\nnot voluntary or involuntary, for any reason or for no reason, within a thirty
\n(30) day period commencing on a date six months immediately following a Change
\nin Control shall be deemed to constitute a termination for Good Reason
\nhereunder.” <\/strong><\/p>\n

Section 2.2 Gross-Up Payment<\/u> <\/strong><\/p>\n

(a) “Whether or not an Eligible Employee incurs a Severance, if any
\nof the payments or benefits received or to be received by the Eligible Employee
\nin connection with a Change in Control or the Eligible Employee’s termination of
\nemployment (whether pursuant to the terms of this Plan or any other plan,
\narrangement or agreement) (all such payments and benefits, excluding the
\nGross-Up Payment, being hereinafter referred to as the “Total Payments”) will be
\nsubject to the Excise Tax, the Company shall pay to the Eligible Employee an
\nadditional amount (the “Gross-Up Payment”) such that the net amount retained by
\nthe Eligible Employee, after deduction of any Excise Tax on the Total Payments
\nand any federal, state and local income and employment taxes and Excise Tax upon
\nthe Gross-Up Payment, and after taking into account the phase out of itemized
\ndeductions and personal exemptions attributable to the Gross-Up Payment, shall
\nbe equal to the Total Payments. <\/strong><\/p>\n

(b) Subject to the provisions of Section 2.2(c), all determinations
\nrequired to be made under this Section 2.2, including whether and when a
\nGross-Up Payment is required, the amount of such Gross-Up Payment and the
\nassumptions to be utilized in arriving at such determination, shall be made by
\nPricewaterhouseCoopers (the “Accounting Firm”). The Accounting Firm shall
\nprovide detailed supporting calculations both to the Company and the Eligible
\nEmployee within 15 business days of the receipt of notice from the <\/strong>\n<\/p>\n<\/p>\n

1<\/p>\n<\/p>\n

\n

Eligible Employee that there has been any payment or distribution in
\nthe nature of compensation (within the meaning of Section 280G(b)(2) of the
\nCode) to or for the benefit of the Eligible Employee, whether paid or payable
\npursuant to this Agreement or otherwise, or such earlier time as is requested by
\nthe Company. In the event that the Accounting Firm is serving as accountant or
\nauditor for the individual, entity or group effecting the Change in Control, the
\nEligible Employee may appoint another nationally recognized accounting firm to
\nmake the determinations required hereunder (which accounting firm shall then be
\nreferred to as the Accounting Firm hereunder). All fees and expenses of the
\nAccounting Firm shall be borne solely by the Company. Any determination by the
\nAccounting Firm shall be binding upon the Company and the Eligible Employee.
\n<\/strong><\/p>\n

(c) In the event that the Excise Tax is finally determined to be less
\nthan the amount taken into account hereunder in calculating the Gross-Up
\nPayment, the Eligible Employee shall repay to the Company, within five
\n(5) business days following the time that the amount of such reduction in the
\nExcise Tax is finally determined, the portion of the Gross-Up Payment
\nattributable to such reduction (plus that portion of the Gross-Up Payment
\nattributable to the Excise Tax and federal, state and local income and
\nemployment taxes imposed on the Gross-Up Payment being repaid by the Eligible
\nEmployee), to the extent that such repayment results in a reduction in the
\nExcise Tax and a dollar-for-dollar reduction in the Eligible Employee’s taxable
\nincome and wages for purposes of federal, state and local income and employment
\ntaxes, plus interest on the amount of such repayment at 120% of the rate
\nprovided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
\nis determined to exceed the amount taken into account hereunder in calculating
\nthe Gross-Up Payment (including by reason of any payment the existence or amount
\nof which cannot be determined at the time of the Gross-Up Payment), the Company
\nshall make an additional Gross-Up Payment in respect of such excess (plus any
\ninterest, penalties or additions payable by the Eligible Employee with respect
\nto such excess) within five (5) business days following the time that the amount
\nof such excess is finally determined. The Eligible Employee and the Company
\nshall each reasonably cooperate with the other in connection with any
\nadministrative or judicial proceedings concerning the existence or amount of
\nliability for Excise Tax with respect to the Total Payments. <\/strong><\/p>\n

(d) The Gross-Up Payment shall be paid on the thirtieth (30) day (or
\nsuch earlier date as the Excise Tax becomes due and payable to the taxing
\nauthorities) after it has been determined that the Total Payments are subject to
\nthe Excise Tax; provided however, that if the amount of the Gross-Up Payment or
\nany portion thereof cannot be finally determined on or before that day, the
\nCompany shall pay to the Eligible Employee on such date an estimate as
\ndetermined by the <\/strong><\/p>\n<\/p>\n

2<\/p>\n<\/p>\n

\n

Auditor until such point in time that the final determination of the
\nGross-up Payment can occur. <\/strong><\/p>\n

(e) The Eligible Employee shall notify the Company in writing of any
\nclaim by the Internal Revenue Service that, if successful, would require the
\npayment by the Company of any additional Gross-Up Payment pursuant to
\nSection 2.2(c). Such notification shall be given as soon as practicable but no
\nlater than ten (10) business days after the Eligible Employee is informed in
\nwriting of such claim and shall apprise the Company of the nature of such claim
\nand date on which the Company must respond to contest the claim. If the Company
\nprovides timely notice to the Eligible Employee in writing that it desires to
\ncontest such claim, the Eligible Employee shall (i) give the Company any
\ninformation reasonably requested by the Company relating to such claim;
\n(ii) take such action in connection with contesting such claim, as the Company
\nshall reasonably request in writing from time to time, including, without
\nlimitation, accepting legal representation with respect to such claim by an
\nattorney reasonably selected by the Company; (iii) cooperate with the Company in
\ngood faith in order effectively to contest such claim; and (iv) permit the
\nCompany to participate in any proceeding relating to such claim. The Company
\nshall bear and pay directly all costs and expenses (including additional
\ninterest and penalties) incurred in connection with such contest and shall
\nindemnify and hold the Eligible Employee harmless on an after-tax basis, for any
\nExcise tax or income tax including interest and penalties with respect hereto)
\nimposed as a result of such representation and payment of cost and expenses.
\nWithout limiting the foregoing, the Company shall control all proceedings taken
\nin connection with such contest and at its sole option, may pursue or forgo any
\nand all administrative appeals, proceedings, hearings and conferences with the
\ntaxing authority in respect of such claim and may at its sole option either
\ndirect the Eligible Employee to pay the tax claimed and sue for a refund or
\ncontest the claim in any permissible manner, and the Eligible Employee agrees to
\nprosecute such contest to a determination before any administrative tribunal, in
\na court of initial jurisdiction and in one or more appellate courts as the
\nCompany shall determine. Provided however if the Company directs the Eligible
\nEmployee to pay such claim and sue for a refund, the Company shall make such
\npayment on behalf of the Eligible Employee and shall indemnify and hold the
\nEligible Employee harmless on an after-tax basis from any Excise Tax or income
\ntax imposed with respect to such payment or with respect to such imputed income
\nwith respect to such payment and further provided that any extension of the
\nstatute of limitation relating to such payment of taxes for the taxable year of
\nthe Eligible Employee with respect to which such contested amount is claimed to
\nbe due is limited solely to such contested amount. Furthermore, the Company’s
\ncontrol of the contest and reimbursement for the expenses shall be limited to
\nissues with respect <\/strong><\/p>\n<\/p>\n

3<\/p>\n<\/p>\n

\n

to which an additional Gross-Up Payment would be payable hereunder
\nand the Eligible Employee shall be entitled to settle or contest as the case may
\nbe, any other issue raised by the Internal Revenue Service or any other taxing
\nauthority. If after the Company has made any such payment on behalf of the
\nEligible Employee, the Eligible Employee becomes entitled to receive any refund
\nwith respect to such claims, the Eligible Employee shall promptly pay to the
\nCompany the amount of such refund (together with any interest paid or credited
\nthereon after taxes applicable thereto). If, after the Company has made any such
\npayment of behalf of the Eligible Employee pursuant to the above section, a
\ndetermination is made that the Eligible Employee shall not be entitled to any
\nrefund with respect to such claim and the Company does not notify the Eligible
\nEmployee in writing of its intent to contest such denial of refund prior to the
\nexpiration of thirty (30) days after such determination, then such payment shall
\nnot be required to be repaid and the amount of such payment shall off-set to the
\nextent thereof the amount of Gross-Up Payment required to be paid. <\/strong>\n<\/p>\n

(f) In order to comply with Section 409A of the Code, any Gross-Up
\nPayment, as determined pursuant to this Section 2.2, shall in all events be paid
\nby the Company no later than the end of the Eligible Employee’s taxable year
\nnext following the Eligible Employee’s taxable year in which the Excise Tax (and
\nany income or other related taxes or interest or penalties thereon) on a Payment
\nare remitted to the Internal Revenue Service or any other applicable taxing
\nauthority or, in the case of amounts relating to a claim described in
\nSection 2.2(e) that does not result in the remittance of any federal, state,
\nlocal and foreign income, excise, social security and other taxes, the calendar
\nyear in which the claim is finally settled or otherwise resolved.
\nNotwithstanding any other provision of this Section 2.2, the Company may, in its
\nsole discretion, withhold and pay over to the Internal Revenue Service or any
\nother applicable taxing authority, for the benefit of the Eligible Employee, all
\nor any portion of any Gross-Up Payment, and the Eligible Employee hereby
\nconsents to such withholding.” <\/strong><\/p>\n

2. Capitalized terms in this amendment shall have the meaning
\nascribed to them in the Plan. <\/strong><\/p>\n

3. Except as amended herein, the Plan remains in full force and
\neffect. <\/strong><\/p>\n

Dated: January 1, 2010 <\/strong><\/p>\n<\/p>\n

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