Alcoa 2012 Annual Report Download - page 141

In January 2011, Alcoa contributed 36,518,563 newly issued shares of its common stock to a master trust that holds the
assets of certain U.S. defined benefit pension plans in a private placement transaction. These shares were valued at
$16.43 per share (the closing price of Alcoa’s common stock on January 24, 2011), or $600 in the aggregate, and were
issued to satisfy the estimated minimum required funding and to provide additional funding towards maintaining an
approximately 80% funded status of Alcoa’s U.S. pension plans. On January 25, 2011, the 36,518,563 shares were
registered under Alcoa’s then-current shelf registration statement dated March 10, 2008 (replaced by shelf registration
statement dated February 18, 2011) for resale by the master trust, as selling stockholder.
In January 2010, Alcoa contributed 44,313,146 newly issued shares of its common stock to a master trust that holds the
assets of certain U.S. defined benefit pension plans in a private placement transaction. These shares were valued at
$13.54 per share (the closing price of Alcoa’s common stock on January 26, 2010), or $600 in the aggregate, and were
issued to satisfy a portion of Alcoa’s future funding obligations to these plans, including a portion of the estimated
minimum required funding for 2011. On January 27, 2010, the 44,313,146 shares were registered under Alcoa’s then-
current shelf registration statement dated March 10, 2008 for resale by the master trust, as selling stockholder.
As of December 31, 2012, 110 million and 86 million shares of common stock were reserved for issuance upon
conversion of convertible notes and under Alcoa’s stock-based compensation plans, respectively. Alcoa issues shares
from treasury stock to satisfy the exercise of stock options and the conversion of stock awards.
Share Activity (number of shares)
Common stock
Treasury Outstanding
Balance at end of 2009 122,695,718 974,378,820
Private placement - 44,313,146
Conversion of convertible notes - 310
Issued for stock-based compensation plans (3,333,689) 3,333,689
Balance at end of 2010 119,362,029 1,022,025,965
Private placement - 36,518,563
Issued for stock-based compensation plans (5,867,538) 5,867,538
Balance at end of 2011 113,494,491 1,064,412,066
Issued for stock-based compensation plans (2,799,887) 2,799,887
Balance at end of 2012 110,694,604 1,067,211,953
Stock-based Compensation
Stock options under Alcoa’s stock-based compensation plans are granted in January each year at market prices on the
dates of grant. Prior to 2011, performance stock options were also granted to certain individuals. For performance stock
options granted in 2010, the final number of options earned was based on Alcoa’s adjusted free cash flow and
profitability against pre-established targets. Stock option features based on date of original grant were as follows:
Date of
original grant Vesting Term Reload feature
2002 and prior 1 year 10 years One reload
over option term
2003 3 years
(1/3 each year)
10 years One reload in 2004 for 1/3
vesting in
2004
2004 - 2009 3 years
(1/3 each year)
6 years None
2010 and forward 3 years
(1/3 each year)
10 years
None
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