Exhibit 10.1

INCENTIVE COMPENSATION PLAN

OF

ALCOA INC.

(Revised September 15, 2006)

Except as provided in Article IV, this Incentive Compensation Plan, revised September 15, 2006, replaces and supersedes the Incentive Compensation Plan revised January 1, 1993.

ARTICLE I - DEFINITIONS

For the purposes of this Incentive Compensation Plan (“Plan”), unless a different meaning is clearly required by the context:

AWARD YEAR means any calendar year for which awards are made to eligible employees.

BOARD means the Board of Directors of the Company, and includes the Executive Committee or any other duly authorized committee thereof when acting in lieu thereof and/or pursuant to authority delegated thereby.

BOARD COMMITTEE means the Compensation and Benefits Committee of the Board of Directors or such other committee selected by the Board of Directors comprised solely of independent directors.

COMMITTEE means the Incentive Compensation Committee and, with respect to awards for officers of the Company, the Compensation and Benefits Committee of the Board.

COMPANY means Alcoa Inc. and any successor thereto.

DEFERRED COMPENSATION PLAN means the Company’s Deferred Compensation Plans as amended from time to time.

DISABILITY means a mental or physical condition preventing the employee from performing his position satisfactorily, where a qualified physician designated by the Committee certifies that, in his opinion, the employee’s state of health is such that he should not be burdened with the responsibilities of his position even though he is not totally or permanently disabled.

ELIGIBLE EMPLOYEE has the meaning set forth in Article II, Section 2.

RETIREMENT means (a) termination of employment in which there is a right to immediate payment of a pension benefit under the provisions of any retirement plan or arrangement of the Company or a Subsidiary; or (b) termination of employment upon or after attaining age 65 regardless of pension eligibility.

SUBSIDIARY means any corporation in which the Company owns, directly or indirectly, stock possessing 50% or more of the total combined voting power of all classes of stock of such corporation, and any corporation, partnership, joint venture, limited liability company or other business entity as to which the Company possesses a significant ownership interest, directly or indirectly, as determined by the Company.

ARTICLE II - PARTICIPATION

SECTION 1. Purpose . The purpose of the Plan is to provide annual cash incentive compensation for Eligible Employees if performance metrics for financial and non-financial performance established by the Committee from time to time are achieved. The Committee reserves the right to make adjustments to awards to reflect individual performance.

SECTION 2. Eligibility . Officers and other key employees of the Company and its Subsidiaries who have, in the sole judgment of the Committee, contributed to the management, growth, and success of some part or all of the business of those companies shall be eligible for awards under the Plan (referred to as “Eligible Employees”).

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SECTION 3. Limits on awards . The aggregate amount of awards for any Award Year shall not exceed an amount determined by or in accordance with a procedure specified by the Board Committee. All awards shall be granted in accordance with guidelines approved from time to time by the Board Committee and any exceptions to the guidelines require the approval of the Board Committee.

ARTICLE III - AWARDS

SECTION 1. Determination . For each Award Year, the Committee shall make awards to such Eligible Employees in such individual amounts as it deems appropriate under the circumstances, taking into account individual performance and the financial and non-financial performance metrics established by the Committee for the Award Year.

SECTION 2. Cash awards . Except as otherwise determined by the Committee and except for awards or portions of awards which may be deferred, each award shall be paid in cash at a time determined by the Board Committee as soon as practicable following the Award Year, but in any event no later than March 15 of the year following the Award Year. Cash payment of awards shall be made from the general funds of the Company. In its discretion, the Company may establish one or more trusts or special funds from which awards may be paid.

SECTION 3. Deferred awards . Eligible Employees who are also eligible to participate in the Deferred Compensation Plan may defer all or part of their awards under this Plan in accordance with the terms of the Deferred Compensation Plan.

ARTICLE IV – CONTINGENT CREDITS ISSUED PRIOR TO OR FOR THE YEAR 1990

SECTION 1. Contingent credits . Contingent credits were issued under the Incentive Compensation Plan in effect prior to and for the year 1990. Since 1991, no contingent credits have been issued and the Plan with respect to contingent credits was frozen. The provisions of

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this Article IV relate solely to contingent credits issued prior to or for the year 1990. Due to the American Jobs Creation Act of 2004, all remaining contingent credits and earnings thereon shall continue to be subject to the Incentive Compensation Plan provisions in effect as of December 31, 2004, and this Incentive Compensation Plan revised September 15, 2006, shall not supersede or replace the provisions of the Incentive Compensation Plan revised January 1, 1993 as it pertains to contingent credits.

ARTICLE V - ADMINISTRATION

SECTION 1. Committee . The Incentive Compensation Committee for the Plan shall be appointed by the Board and shall have exclusive power and authority to interpret and administer the Plan; provided however, that the Compensation and Benefits Committee of the Board shall have exclusive power and authority to interpret and administer the Plan with respect to and to make awards to Eligible Employees who are officers of the Company. The Incentive Compensation Committee may take all action, including the adoption of rules and regulations as it deems appropriate for the administration of the Plan and all determinations by the Committee shall be final and binding upon the Company, its Subsidiaries, Eligible Employees and their beneficiaries.

SECTION 2. Amendments . The Board may from time to time amend, modify, suspend or terminate the Plan provided, however, that no such amendment, modification, suspension or termination shall affect any right or obligation with respect to any award theretofore made.

SECTION 3. Expenses . All expenses of administering the Plan shall be paid by the Company, which in turn may seek reimbursement from subsidiaries. The cost of all awards incurred by the Company with respect to employees of any Subsidiary shall be reimbursed by the Subsidiary.

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SECTION 4. Unsecured obligation . No Eligible Employee or other person shall, by virtue of any award or any unpaid installment thereof, have any interest whatever, either vested or contingent, in any property of the Company or its Subsidiaries.

SECTION 5. No rights to employment or awards . Participation in the Plan shall not give any employee the right to continued employment by the Company or its Subsidiaries. Holding the status of an Eligible Employee shall not give any employee the right to any award.

SECTION 6. Taxes . Each Eligible Employee is solely liable for any taxes due in regards to payments under this Plan, including but not limited to, federal, state, local, social security, foreign and excise taxes under Internal Revenue Code Section 409A if for any reason the Internal Revenue Service determines that amounts payable under this Plan are subject to the provisions of Section 409A.

SECTION 7. Construction . The Plan shall be construed in accordance with and governed by the laws of the Commonwealth of Pennsylvania, excluding any choice of law provisions which may indicate the application of the laws of another jurisdiction.

ARTICLE VI – FORFEITURE AND PRO-RATA PAYMENTS

SECTION 1. Forfeiture of Incentive Compensation . If the Board learns of any misconduct by an Eligible Employee that contributed to the Company’s having to restate all or a portion of its financial statements, it shall take such action as it deems necessary to remedy the misconduct, prevent its recurrence and, if appropriate, based on all relevant facts and circumstances, take remedial action against the wrongdoer in a manner it deems appropriate. In determining what remedies to pursue, the Board shall take into account all relevant factors,

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including whether the restatement was the result of negligent, intentional or gross misconduct. The Board shall, to the full extent permitted by governing law, in all appropriate cases, require reimbursement of any award under the Plan (including any bonus or incentive compensation that has been deferred) if: a) the amount of the award was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement, b) the Eligible Employee engaged in intentional misconduct that caused or partially caused the need for the restatement, and c) the amount of the award that would have been awarded to the Eligible Employee had the financial results been properly reported would have been lower than the amount actually awarded. In addition, the Board, in its full and complete discretion, may dismiss the Eligible Employee, authorize legal action for breach of fiduciary duty or take such other action to enforce the Eligible Employee’s obligations to the Company as the Board determines fit the facts surrounding the particular case. The Board may, in determining appropriate remedial action, take into account penalties or punishments imposed by third parties, such as law enforcement agencies, regulators or other authorities. The Board’s power to determine the appropriate punishment for the wrongdoer is in addition to, and not in replacement of, remedies imposed by such entities.

SECTION 2. Pro-rata Distribution upon Retirement . In the Committee’s discretion, if an Eligible Employee’s Retirement or termination of employment due to a Disability occurs during an Award Year, the Eligible Employee may be awarded a pro-rata portion of the award under the Plan that would have been paid for the Award Year had the Eligible Employee remained in active service through the end of the Award Year, based on the number of days of active service during the Award Year.

SECTION 3. Pro-rata Distribution upon a Change in Control . In the event of a Change in Control, as defined in the 2004 Alcoa Stock Incentive Plan, as the same may be amended from

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time to time, or any successor plan approved by the shareholders of the Company, Eligible Employees, at the discretion of the Committee, may be paid a pro-rata portion of target incentive compensation for the Award Year, based on the days of service during the Award Year from the beginning of the Award Year through the date of the Change in Control.

SECTION 4. Pro-rata distribution upon death . Upon the death of an Eligible Employee a pro-rata portion of the award for the Award Year shall be paid to the Eligible Employee’s beneficiary or beneficiaries, based on the number of days the Eligible Employee was actively employed during the Award Year.

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Exhibit 10.2

ALCOA INC.

SECOND AMENDMENT TO THE

FEE CONTINUATION PLAN FOR NON-EMPLOYEE DIRECTORS

(effective September 15, 2006)

WHEREAS, the Fee Continuation Plan for Non-Employee Directors (the “Plan”) of Alcoa Inc. (the “Company”) was amended November 10, 1995 (the “First Amendment”) to freeze payments to be made under the Plan to directors who were members of the Board at December 31, 1995; and

WHEREAS, under the First Amendment, each non-employee Director having 120 or more months of service as a member of the Board of Directors at December 31, 1995 shall be entitled to receive payments upon retirement from the Board or at age 65 (whichever is later) at 100% of the minimum annual cash retainer fee and annual stock grant amounts, and each non-employee Director having less than 120 months of service as a member of the Board of Directors at December 31, 1995 shall be entitled to receive Fee Continuation Payments upon retirement from the Board or age 65 (whichever is later) at a rate of 10% of such minimum annual cash retainer fee and annual stock grant amounts for each full year of service as a non-employee Director as of December 31, 1995; and

WHEREAS, the maximum annual payment for eligible Directors under the Plan is $30,000 and 2000 shares and the minimum annual payment for eligible Directors under the Plan is $3,000 and 200 shares; and

WHEREAS, it is in the best interest of the Company and the Plan Participants to convert the Plan to an all cash payment plan with equivalent value to the cash and stock payment formula; and

WHEREAS, it is in the best interest of the Company and the future Plan Participants to establish a fixed date for receipt of payments under the Plan on or before December 31, 2006; and

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WHEREAS, the Plan Participants and the future Plan Participants have consented to these proposed changes; and

WHEREAS, the Board of Directors have approved such changes;

NOW THEREFORE, the Plan, as amended by the First Amendment, is hereby further amended effective September 15, 2006, as follows:

“Beginning in 2007, in lieu of Fee Continuation Payments payable in the form of the Company’s common stock, an additional cash payment shall be paid annually as soon as practicable following December 31 of each year, in an amount equal to the closing price of the Company’s common stock on December 31 as reported on the New York Stock Exchange – Composite Transactions, multiplied by the number of shares of the Company’s common stock to which the Participant otherwise would have been entitled under this Plan but for this amendment.”

“The first paragraph of Section 5 of the Plan shall not apply to Participants who have not retired from the Board of Directors as of the effective date of the Second Amendment to the Plan. In lieu thereof, such Participants shall make an irrevocable election before December 31, 2006 whether to receive Fee Continuation Payments which are payable in cash upon retirement (A) quarterly on a prorated basis, payable immediately after the end of the calendar quarter for which paid or (B) annually, payable immediately after the end of the calendar year for which paid. In either case, the final payment shall be made for the quarter in which death occurs. Payment of the amounts described in Section 8 of the Plan shall be governed by that section.”

“Section 8. Additional Payments .

(a) If the Board of Directors requests a non-employee Director who is entitled to Fee Continuation Payments under the Plan to remain a member of the Board of Directors beyond the Normal Retirement Date (as defined below), and the director

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agrees and continues as a member of the Board until retirement at a later date (the period from the Normal Retirement Date to the later retirement date, the “Additional Period”), then a lump sum payment in cash shall be made to the director within 2  ¹ / 2 months after retirement from the Board equal to the total of the following:

(b) For purposes of this Section 8, the following terms shall have the following meanings:

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Exhibit 10.3

ALCOA INC.

SPECIAL RETENTION

STOCK AWARD CERTIFICATE

Alcoa Inc. (the “Company”) has on [date] granted to

[NAME]

(“Participant”), a special retention stock award of              units, based upon the following terms:

ALCOA INC.

TERMS AND CONDITIONS FOR SPECIAL RETENTION STOCK AWARDS

Effective July 14, 2006

These terms and conditions are authorized by the Compensation and Benefits Committee of the Board of Directors. They are deemed to be incorporated into and form a part of every Stock Award issued under the 2004 Alcoa Stock Incentive Plan, as last amended prior to the grant (the “Plan”) on or after July 14, 2006, unless the Award certificate provides otherwise.

Terms that are defined in the Plan have the same meanings in these terms and conditions, except that Alcoa or Company means Alcoa Inc. or any of its controlled subsidiaries or affiliates and Stock Awards means Special Retention Stock Awards.

General Terms and Conditions

Vesting and Payment

(i) An unvested Stock Award held by a Participant who is involuntarily terminated without cause from employment with the Company during the vesting period is not forfeited in whole

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but only in part upon termination of employment, as described below. The portion of the Stock Award that is not forfeited vests on the original stated vesting date set forth on the face of the Award certificate and is calculated based on a proportionate share of the time during the vesting period that the Participant remained actively employed with Alcoa, with the remaining portion being automatically forfeited. The proportionate share is computed on the basis of the actual number of days actively employed after the date of grant over a total vesting period of three years of 360 days each (or a total vesting period of 1,080 days.) For example, a Participant who is involuntarily terminated without cause from employment with the Company at the end of the first year of the three-year vesting period will receive one-third of the Stock indicated on the Award certificate upon vesting, with the remaining two-thirds of the Stock being automatically forfeited upon termination.

(ii) An unvested Stock Award held by a Participant who dies while an active employee is not forfeited but vests on the original stated vesting date set forth on the face of the Award certificate.

(iii) A Stock Award vests immediately upon certain Change in Control events described in the Plan. The Award is payable and shares of Stock become issuable immediately upon the occurrence of such Change in Control events.

Beneficiaries

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2004 ASIP SPECIAL RETENTION Stock Award Terms and Conditions (JULY 2006)

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