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Alcoa Provides Notice of Pendency and Proposed Settlement of Shareholder Derivative Actions

Friday, October 31, 2014 5:15 pm EDT

NEW YORK--(BUSINESS WIRE)--Alcoa (NYSE: AA) today issued the following statement:

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF PENNSYLVANIA

    

CATHERINE RUBERY, Derivatively on

) Case No. 2:12-cv-00844-DWA

Behalf of ALCOA INC.,

)  
 )  
Plaintiff,) Electronically Filed
 )  
v.)  
 )  
KLAUS KLEINFELD, JUDITH M. GUERON, KATHRYN S.)  
FULLER, ERNESTO ZEDILLO, JAMES W. OWENS,)  
RATAN N. TATA, MICHAEL G. MORRIS, E. STANLEY)  
O'NEAL, PATRICIA F. RUSSO, ALAIN J. P.)  
BELDA, FRANKLIN A. THOMAS, HENRY B. SCHACHT,)  
JOSEPH T. GORMAN, CARLOS GHOSN, VICTOR)  
DAHDALEH, and WILLIAM J. RICE,)  
 )  
Defendants,)  
 )  
-and-)  
 )  
ALCOA INC., a Pennsylvania corporation,)  
 )  
Nominal Defendant.)  
 )  
 )  
 )  
 )  
    

SUMMARY NOTICE OF PENDENCY AND PROPOSED SETTLEMENT
OF STOCKHOLDER DERIVATIVE ACTIONS

   

TO:

 

ALL CURRENT RECORD HOLDERS AND BENEFICIAL OWNERS OF ALCOA INC. ("ALCOA" OR "THE COMPANY") COMMON STOCK AS OF OCTOBER 20, 2014 ("CURRENT ALCOA STOCKHOLDERS"). IF YOU HOLD ALCOA COMMON STOCK FOR THE BENEFIT OF ANOTHER, PLEASE TRANSMIT THIS DOCUMENT TO SUCH BENEFICIAL OWNER. PLEASE NOTE THAT THIS ACTION IS NOT A “CLASS ACTION” AND NO INDIVIDUAL STOCKHOLDER HAS THE RIGHT TO BE COMPENSATED AS A RESULT OF THIS SETTLEMENT.

 
  

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL OF THE ABOVE-CAPTIONED DERIVATIVE ACTION AND RELATED DERIVATIVE ACTIONS AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS, WHICH MAY BE AFFECTED BY THESE LEGAL PROCEEDINGS.

   
  

IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE ACTION, ALCOA STOCKHOLDERS WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING THE SETTLED CLAIMS.

   

YOU ARE HEREBY NOTIFIED, pursuant to Federal Rule of Civil Procedure 23.1 and an Order of the U.S. District Court for the Western District of Pennsylvania (the "Court"), of the proposed settlement (the "Settlement") that has been reached between the Settling Parties to the stockholder derivative actions entitled Rubery v. Kleinfeld, et al., Case No. 2:12-cv-00844-DWA, pending in the United States District Court for the Western District of Pennsylvania (the "Federal Action"), and Teamsters Local #500 Severance Fund and Southeastern Pennsylvania Transportation Authority v. Belda, Case No. GD-08-014664, and Philadelphia Gas Works Retirement Fund v. Alcoa, Inc., et al., Case No. GD-09-018679, currently pending in the Court of Common Pleas of Allegheny County (the "State Actions," and together with the Federal Action, the "Actions"). The terms of the proposed Settlement of the Actions are set forth in a Stipulation of Settlement dated October 20, 2014 (the "Stipulation").1 This summary should be read in conjunction with, and is qualified in its entirety by reference to, the text of the Stipulation, which has been filed with the Court and is attached to a Form 8-K that will be filed with the U.S. Securities and Exchange Commission and published on Alcoa's website at www.alcoa.com/usa/en/news/news_releases.asp.

The Settlement does not constitute a finding of any wrongdoing on the part of the Company or the Settling Defendants. The Court has made no findings or determinations respecting the merits of the action. The recitation of the background and circumstances of the Settlement contained herein does not constitute the findings of the Court. It is based on representations made to the Court by counsel for the parties.

The Stockholder Derivative Litigation was brought derivatively on behalf of Alcoa against certain of Alcoa's directors and executive officers and certain of Alcoa's agents in connection with alleged breaches of fiduciary duties, waste of corporate assets and unjust enrichment relating to Alcoa's alleged years-long scheme pursuant to which individuals and entities acting on behalf of Alcoa bribed members of the Bahraini government in order to receive market-premium prices for alumina. The terms of the Settlement set forth in the Stipulation include the adoption and implementation by the Company of corporate governance reforms that address the purported misconduct alleged in the Actions, comprising: (1) the creation by Alcoa of the position of Chief Ethics and Compliance Officer ("CECO"), an officer-level position who reports directly to Alcoa's Chief Legal Officer and oversees the implementation and performance of Alcoa's Ethics and Compliance Program (the "Alcoa Program"), including Alcoa's Anti-Corruption Policy; (2) substantial enhancements to the Alcoa Program, including the development of a clearly articulated and visible Anti-Corruption Policy; (3) implementation of Alcoa's Due Diligence and Contracting Procedure for Intermediaries ("DDCP"), which provides for an appropriate review of any intermediary whose services Alcoa wishes to use and provides for appropriate monitoring of Alcoa's relationships with Alcoa's intermediaries; (4) a reorganization of Alcoa's regional and local counsel reporting structure; (5) enhanced mandatory annual FCPA and Anti-Corruption training for all employees; (6) improvements to Alcoa's policies regarding business expense and meals and entertainment; and (7) enhancements to Alcoa's compliance code, policies and procedures designed to evaluate and improve the effectiveness in preventing and detecting violations of anti-corruption laws. The Settlement also provides for Alcoa and/or its insurance carrier to pay Plaintiffs' Counsel's attorneys' fees and expenses in the amount of $3,750,000 (the "Fee and Expense Amount"). The Settlement is subject to Court approval.

A Settlement Hearing will be held before the Honorable Donetta W. Ambrose, on January 20, 2015 at 1:00 p.m. at the U.S. District Court for the Western District of Pennsylvania, U.S. Courthouse, 700 Grant Street, Courtroom 3B, Pittsburgh, Pennsylvania 15219 to determine: (i) whether the proposed Settlement upon the terms set forth in the Stipulation, including the Fee and Expense Amount, should be finally approved in all respects as fair, reasonable, and adequate; and (ii) whether the Final Order and Judgment approving the Settlement should be entered. The Settlement Hearing may be continued by the Court at the Settlement Hearing, or at any adjourned session thereof without further notice.

Any Current Alcoa Stockholder may, but is not required to, appear and show cause—at its own expense, individually or though counsel of its choice—if he, she, or it has any reason why the terms of the Settlement should not be approved as fair, reasonable and adequate, or why a Final Order and Judgment should not be entered thereon; provided, however, unless otherwise ordered by the Court, no Current Alcoa Stockholder shall be heard or entitled to contest the approval of all or any of the terms and conditions of the Settlement or, if approved, the Final Order and Judgment to be entered thereon approving the same, unless that person has, at least fourteen (14) calendar days prior to the Settlement Hearing, filed with the Clerk of the Court, U.S. Courthouse, 700 Grant Street, Pittsburgh, Pennsylvania 15219 and served on the following legal counsel (delivered by hand or sent by first class mail) appropriate proof of stock ownership, along with written objections, including the basis therefor, and copies of any papers and briefs in support thereof:

Felipe J. Arroyo Robin Winchester
Robbins Arroyo LLP Kessler Topaz Meltzer & Check, LLP
600 B Street, Suite 1900 280 King of Prussia Road
San Diego, California 92101 Radnor, Pennsylvania 19087
   

Attorneys for Federal Plaintiff

 

Attorneys for State Plaintiffs

   
Jacob A. Goldberg Julie A. North
Cohen, Placitella & Roth, P.C. Cravath, Swaine & Moore LLP
Two Commerce Square Worldwide Plaza
2001 Market Street 825 Eighth Avenue
Suite 2900 New York, New York 10019
Philadelphia, Pennsylvania 19103  
  

Attorneys for Defendants Alain J.P. Belda,

Attorneys for State Plaintiffs

 

Klaus Kleinfeld, Kathryn S. Fuller, Carlos

  

Ghosn, Joseph T. Gorman, Judith M. Gueron,

  

James W. Owens, Henry B. Schacht, Ratan N.

  

Tata, Franklin A. Thomas, Ernesto Zedillo, E.

  

Stanley O’Neal, Michael G. Morris, Patricia

  

F. Russo, Lawrence R. Purtell, Bernt Reitan

  

and Peter Burgess

   
Richard Beizer Robert B. Sommer
Crowell & Moring LLP Meyer, Unkovic & Scott LLP
1001 Pennsylvania Avenue, N.W., Suite 1100 Henry W. Oliver Building
Washington, D.C. 20004 535 Smithfield Street, Suite 1300
  Pittsburgh, Pennsylvania 15222

Attorneys for Defendant William J. Rice

  
  

Attorneys for Nominal Defendant Alcoa Inc.

   

Any Current Alcoa Stockholder who does not make his, her or its objection in the manner provided herein shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the fairness, reasonableness, or adequacy of the Settlement, including the Fee and Expense Amount, unless otherwise ordered by the Court, and shall otherwise be bound by the Final Order and Judgment to be entered and the releases to be given in connection with the Settlement.

CURRENT ALCOA STOCKHOLDERS WHO HAVE NO OBJECTION TO THE SETTLEMENT DO NOT NEED TO APPEAR AT THE SETTLEMENT HEARING OR TAKE ANY OTHER ACTION.

If you are an Alcoa Stockholder, you will be bound by the Final Judgment and Order of the Court, and you will be deemed to have released any and all claims that have been or could have been brought in the Actions.

Inquiries regarding the Settlement or the Actions should be addressed in writing to the following:

Darnell Donahue Robin Winchester
Robbins Arroyo LLP Kessler Topaz Meltzer & Check, LLP
600 B Street, Suite 1900 280 King of Prussia Road
San Diego, California 92101 Radnor, Pennsylvania 19087
619.525.3990 610.667.7706
   

Attorneys for Federal Plaintiff

 

Attorneys for State Plaintiffs

   

PLEASE DO NOT TELEPHONE THE COURT OR THE CLERK'S OFFICE REGARDING THIS NOTICE.

DATED: OCTOBER 22, 2014    BY ORDER OF THE COURT
     UNITED STATES DISTRICT COURT
     WESTERN DISTRICT OF PENNSYLVANIA

1 Unless otherwise defined, all capitalized terms herein have the same meanings as set forth in the Stipulation.

Contact:

Alcoa
Investor Contact
Kelly Pasterick, +1-212-836-2674
Kelly.Pasterick@alcoa.com
or
Media Contact
Monica Orbe, +1-212-836-2632
Monica.Orbe@alcoa.com