Alcoa 2013 Annual Report Download - page 150

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.
As of December 31, 2013, 110 million and 119 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 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
Conversion of convertible notes - 310
Issued for stock-based compensation plans (3,798,899) 3,798,899
Balance at end of 2013 106,895,705 1,071,011,162
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. Features based on date of original grant for stock options outstanding as of December 31, 2013 were as
follows:
Date of original grant Vesting Term Reload feature
2008 - 2009 3 years
(1/3 each year)
6 years None
2010 and forward 3 years
(1/3 each year)
10 years None
In addition to the stock options described above, Alcoa grants stock awards that vest three years from the date of grant.
Certain of these stock awards were granted with performance conditions. In 2013, 2012, and 2011, the final number of
performance stock awards earned will be based on the achievement of sales and profitability targets over a three-year
period. One-third of the award will be earned each year based on the performance against pre-established targets for
that year. The performance stock awards earned over the three-year period vest at the end of the third year.
Most plan participants can choose whether to receive their award in the form of stock options, stock awards, or a
combination of both. This choice is made before the grant is issued and is irrevocable.
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