COMPANY PROPOSAL

ARCONIC CORPORATION & UAWAND ITS LOCAL NO.1050

2017 CLEVELAND LABOR AGREEMENT NEGOTIATIONS

CO. PROPOSAL- PAY FOR PERFORMANCE PLAN SUBMITTED ON: 2/28/17

APPENDIX XI

PAY FOR PERFORMANCE PLAN

The following Pay for Performance Plan provides for participation by hourly employees represented by the Union.

II. PURPOSE AND PHILOSOPHY

The purpose of Pay for Performance Plan is to align employees in a Business Unit on Business Unit financial performance. Working together and achieving corporate Financial and Business Unit goals will result in increased profitability for the business and provide a monetary reward to employees.  The intent is that all eligible bargained employees in a Business Unit will have the same goals for variable compensation to achieve a common focus on key performance goals and congruency of employee treatment.

Variable compensation payouts will supplement the negotiated base level of wages. II.DESIGN

1.  General

The design requires that a range of performance improvement be established for financial performance defined as Earnings Before Interest, Taxes, Depreciation, and Amortization Dollars (EBITDA $). Threshold level of financial performance will be defined as the lower of (1) Last Year's EBITDA $Performance or (2) 10% lower than current year EBITDA $Plan. Target level of performance will be equal to the EBITDA $ Annual Plan. The financial results will fund a pool whereby the eligible participants will receive an award based upon their earnings relative to the overall eligible participant's

earnings.

2.  Design Rules I Payout Calculation

A. Payments will be made quarterly against the annual cumulative baseline.

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B. Any back slide in performance against the business plan target within a calendar year must be recaptured before the plan will fund additional payouts within that year.

C. Performance attainment against the annual business plan target is reset each calendar year, meaning any deficit from the prior year will not carry forward to the following year.

D. In Quarter 1-3 50% of the award will be held back until a true up is made after the close of Quarter 4.

E.  Payouts will be paid as soon as practical after the close of the quarter. F.  Cleveland UAW represented employees may voluntarily elect to

contribute a portion of pay for performance awards on a pre-tax basis to

the Arconic Retirement Savings Plan. Employees may elect to contribute

0%, 10%, 20%, 30%, 40% or 50% of his or her pay for performance award.   A separate election process will be made available to employees as soon as administratively possible. An election, or a change in election, for the contribution of performance pay will take

effect as of the first full pay period after the request is processed and will only be applicable to pay for performance awards paid after the election process has been made available. Pre-tax contributions on pay for performance will not be eligible for company matching contributions.

Ill. DEFINITIONS

For purpose of Pay for Performance, the following definitions are established:

1. Business Unit- an organizational unit within a location.

2. Eligible Earnings - sum of straight-time hourly-base wages (for straight-time hours and overtime hours); straight-time cost-of-living allowance (for straight-time hours and overtime hours); straight-time shift and schedule premiums (for straight-time hours and overtime hours); overtime hours credited at the half time rate regardless if paid at the rate of time and one half or double time, vacation pay; unworked holiday pay; jury and witness, and bereavement pay.

The definition of Eligible Earnings for an Eligible Employee who is on disability attributable in whole or in part to his or her employment with the Company, shall include

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the time lost and the straight-time earnings associated with that time lost at a rate not to exceed 8 hours per day or 40 hours per week.

The period used to determine Eligible Earnings for a quarter shall encompass the same payroll weeks used for that quarter.

3. Eligible Employee - an hourly employee covered by this Agreement who had actual hours earned during the associated quarterly payroll weeks.  In the event an employee terminates during the quarter, no pay-out shall be paid. In the event of death, disability, retirement, or layoff an employee's award will be calculated on their quarterly eligible earnings.

4. Plan Pool- Each plan year the company will define the incremental EBITDA dollar above target. The company will pay X% of AFE's incremental EBITDA $ and X% of AWTP's incremental EBITDA dollars, based on Business Unit performance.

5.Performance Measure - the measure for the pay for Performance Plan is defined as Earnings Before Interest, Taxes, Depreciation, and Amortization Dollars (EBITDA $).

6. Year - means the 12-month period beginning January 1 and ending on December 31 for the year 2017 and each additional year for the duration of the Agreement.

IV.CALCULATION OF THE PAY FOR PERFORMANCE AWARD

At the end of each quarter the actual results of business performance will be used to make this calculation.

The actual result for EBITDA $ will be compared to its range of performance to determine the pool contribution as follows:

If EBITDA $ is below threshold, it will result in no Pay for Performance;

The EBITDA $ for each Business Unit Performance Measure will be used to determine the Pool contribution for each Business Unit:

The results will fund a pool and then be allocated to individuals based upon their eligible earnings as a percentage of the eligible earnings of all eligible employees.  In Quarter 1, Quarter 2, and Quarter 3 50% of the award will be held back with an annual true up after Quarter 4 results are tabulated.

V. ADMINISTRATION OF THE PAY FOR PERFORMANCE PLAN

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Communication

The parties believe it is important for participants in the Pay for Performance Plan to understand the relevant targets and potential payout opportunities.

Administration

The determination of accounting policies in regards to Pay for Performance Plan shall be at the sole discretion of the Company.  Such policies will be applied in accordance with accounting practices of the Company.

The Compensation Committee of Arconic's Board of Directors has the authority to make adjustments to results because of unusual events. Business Unit management and bargaining unit representatives will be provided the opportunity to give input for consideration for such adjustments.  Such events might include the purchase or sale of business assets that was not planned when goals were set for the Year, plant shutdowns, etc. It is intended that, once a commitment has been made to goals, changes will not be entertained except in truly unusual situations.

The Pay for Performance Pay Plan calculations for each Year will be communicated to the Union prior to payment.  The information will be disclosed only to those reviewing for the Union the computations related to Pay for Performance and neither the Union nor anyone reviewing such information for the Union will make any other disclosure of the information.

A report of such calculations, when accompanied by a certification by the Controller for the Company that the Pay for Performance Plan calculations are in accordance with the provisions of Pay for Performance Plan, shall be final and binding on the Union, participants, beneficiaries, and the Company.

Payments of the Pay for Performance Plan shall not be considered earnings for any other purpose, except as subject to the applicable statutory taxes on income.

The provisions governing Pay for Performance Plan shall not be subject to the grievance and arbitration procedures of the Labor Agreement.

The Company reserves the right to add additional proposals and to modify and/or delete from any and all proposals.

Tentative Agreement Union:                          Arconic:                        Date:                    _

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COMPANY PROPOSAL

ARCONIC CORPORATION & UAW AND ITS LOCAL NO.1050

2017 CLEVELAND LABOR AGREEMENT NEGOTIATIONS

CO. PROPOSAL NO. 1

SUBMITTED ON: 217/17

ARTICLE X- VACATIONS

The following regulations shall govern the Vacation Plan for Hourly Rated Employees effective January 1, 2018 and shall replace the vacation language applicable to the 2017 vacation period.

A. Eligibility

1.        An employee shall be entitled to a vacation with pay during a calendar year if, at December 31 of the preceding year or at any time while he/she is working between January 1 and November 30, inclusive, of such calendar year, he/she has completed one or more years of accumulated departmental seniority and has either (a) ·.worked 1000 or more hours in the immediately

preceding 365 days or (b) worked in at least 60% of the preceding 52 weeks,

provided during such period the scheduled work weeks have been reduced below five (5) days per week for more than twenty six (26) weeks.  For the purposes of determining whether 1000 or more hours have been worked, For vacation taken on or after January 1, 2018 vacation is earned during the same calendar year it is taken. Then shall be no advance accrual of vacation time. Vacation shall be earned on a monthly basis at the rate of 1/12th of the employee's annual length of vacation for each calendar month  in  which the  employee has  forty  (40} or more  actual  hours worked. Time lost during such 365 days the calendar year due to an injury arising out of company employment, or due to Jury or Witness Duty (Article XX}, or due to absence from work while on a previous year's vacation or due to Bereavement Pay (Article XXVI) shall be added to the actual hours the employee worked at the rate of eight (8) hours per day but no more than forty (40) hours per week considered hours of actual work for determining vacation eligibility.

An employee otherwise eligible, who on November 30 lacks 31 days or less of the required accumulated departmental seniority will be deemed to have  satisfied  the  seniority  requirements  for  eligibility  and  for  length  of vacation.

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·     2. An employee, who.in any calendar year obtains a leave.  of absence for the purpose of entering;  the Armed   Forces, and who provides. proof of having entered the Armed. Forces, in such    year will be credited with actual hours worked at the rate of eight (8) hours per  day but not more than forty (40) hours per week during such leave up to the date of having entered the Armed Forces, for the purpose of determining whether 1000 hours have been worked during the immediately preceding 365 days vacation  eligibility.  Should such hours not equal forty (40)hours in the calendar month, due to the leave of  absence  for  entering  the  Armed Forces, employee  will  be eligible  to accrue  vacation for said month. And The employee will be credited with accumulated departmental seniority for the balance of such year for the purpose of satisfying the seniority requirements for eligibility and length of vacation for that year.

An employee who, after being honorably discharged from the Armed Forces, is reinstated pursuant to the Company's Military Service Regulations, shall in the year of his/her reinstatement to active employment without regard to the hours or weeks worked requirement be entitled to a regular vacation.

3.   Any employee otherwise entitled to a vacation pursuant to this Agreement in the calendar year in which he/she retires under the terms of the Pension Agreement between the Company and the Union, which makes him/her eligible for a special retirement payment, but who has not taken such vacation prior to the date of such retirement, shall not be required to take a vacation in that calendar year and shall not be entitled to vacation pay for that calendar year or in any subsequent year.

4. An employee may take vacation in advance of having earned it within the calendar year. However, if employment with the Company is terminated for any reason, other than death, an employee is entitled to pay only for vacation time that is earned and unused as of the date of termination. In the event of a death of an employee, the employee's annual length of vacation eligibility for the year in which the death occurs will be paid to their legal representative. If an employee has been paid for vacation that has not yet been earned as of the date of termination, for any reason other than death the employee will be required to reimburse the Company for such unearned vacation.

5.  Upon retirement the employee, regardless of vacation earned, will be considered to have earned their entire vacation allotment for the year.

B. Length of Vacation

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An eligible employee who has attained the years of accumulated departmental seniority indicated in the following table in any calendar year during the continuation of this Agreement shall receive a vacation (except as otherwise provided) corresponding to such years of accumulated departmental seniority as shown in the following table:

Accumulated Departmental

              Seniority                   

1 year but less than 3 years

3 years but less than 10 years

10 years but less than 17 years

17 years but less than 25 years

25 years or more

Weeks of

Vacation

1 week

2weeks

3weeks

4weeks

5weeks

The vacation taken shall consist of  seven  (7)  consecutive days beginning on Monday and ending on Sunday and shall include holidays; however, vacations of two, three, four, or five weeks may consist of separate periods of one week each.

1.  An employee will not be required to work mandatory overtime on the weekend immediately prior to or during a scheduled full week of vacation, but he/she may elect to work a mandatory or voluntary weekend during such periods at their option.

C. Return from Vacation

Notwithstanding any provisions  of  Section 28,  an  employee  who overstays his/her vacation leave without first notifying his/her plant Management and securing permission for the extension, unless such notification proves to be impractical, may be subject to disciplinary action.

D. Vacation Scheduling

1.   The vacation period shall be from January 1 to December 31,

inclusive.          ·

2.  Time lost by an employee for a period of at least an entire payroll week during the vacation period due to the necessity of reducing the working forces or due to bona fide sickness or injury or due to leave of absence may be applied to any vacation time to which such employee is entitled if the employee so requests.

3.   It is the intent and purpose of the Vacation Plan that all eligible employees shall receive benefit of a vacation from work. However, the employee who is required to work instead of taking time off for vacation shall  be

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entitled to vacation pay in addition to his/her regular pay provided he/she has not had time lost as described applied to all' 'vacation time to which he/she is entitled.

4. In light of the amount of vacation provided by this Article, the local Union and the local Management will meet as necessary to review vacation scheduling procedures for the purpose of arriving at mutually satisfactory scheduling arrangements.

5. If no local agreement exists at a plant concerning vacation scheduling procedures, the following provision shall apply:

The employee shall take his/her vacation as scheduled by the Management but with consideration being given to the employee's wishes as to the time his/her vacation is to be scheduled.

E. Reports

From time to time during the term of this Article, the Company shall furnish the Union on forms and at times to be agreed upon, with such information as may be reasonably required for the purpose of enabling it to be properly informed concerning the operation of this Article.

F. Vacation Pay

1. The vacation pay for a vacation of one week shall be the employee's average hours worked per week (not less than 40 hours and not more than 48 hours) multiplied by the employee's average earnings per hour (exclusive of overtime earnings). The vacation pay for two, three, etc., weeks shall be twice, three times, etc., that amount, respectively. The employee's average earnings per hour, as well as the employee's average hours  worked per week  are averaged over the last payroll quarter which ended 28 days or more prior to the date on which the vacation period begins or the date the vacation is considered as starting. Excluded from such period will be any week in which a paid holiday is observed, or any week during which the employee receives Jury or Witness Pay, or any week during which he/she was on a paid vacation. Vacation                                                                           pay computed on the basis of a calculation period prior to a general wage increase for a vacation, or portion thereof, scheduled after such wage increase in such year shall be adjusted for such increase,

A week shall be deemed to fall in the period in which it commences.

2. The vacation pay will be paid as follows:

(a)  Vacation pay will be paid on the paydays for the period of the employee's vacation.   However, an employee may ,receive vacation pay in a

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lump sum for vacation time off provided such request is made in writing to the Company at least 14 days prior to the date he/she wishes each lump sum; however, such lump sum shall not be paid prior to the last day worked before his/her vacation is scheduled to start.

(b)   For the employee who requests that regular vacation be applied because of time lost or who works instead of taking time off, as described under D-2 and D-3, the vacation pay shall be paid him/her on the first regular pay day occurring not less than ten days following the date the employee makes such request.

(c) In the event of death of an employee Who was eligible for a vacation, the entire amount of vacation pay to which he/she would have been entitled shall be paid to his/her proper legal representative.

G. In the event of a war or other national emergency, or federal legislation designed to reduce the normal work week below 40 hours, either party may notify the other of a desire to negotiate with respect to an appropriate modification of this Plan or its termination. In the event of failure to agree within 120 days from. such notice, if given as a result of the above-described type of federal legislation, the Plan shall remain in effect subject to the termination provision of the Agreement, but the parties shall be free to strike or lockout in support of their positions with respect to such matters (and no other) notwithstanding the provisions of any other agreement between the parties.

follows:

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Failure to Call Policy

Employees are required to notify the Company of an unscheduled absence at least one (1) hour prior to the start of their scheduled shift. The Company will maintain a means and provide a protocol for employees to provide notice.

Failing to provide notice as required will result in corrective action as follows:

          Points                                     Corrective Action

1 ^st occurrence                                   Verbal Warning

2 ^nd occurrence                                Written Warning

3 ^rd occurrence                                   Final Warning

4^th occurrence                                14-Day Disciplinary Suspension

             5 ^th occurrence                                   Termination

MODIFICATION OF STANDARDS

These policies may be amended at any time upon mutual agreement between the Company and the Union with the approval of a designated representative of the Company's Pittsburgh office and a designated representative of the International Union, UAW.

The Company reserves the right to add additional proposals and to modify and/or delete from any and all proposals.

Tentative Agreement Union:                       Arconic:  Date:

CO. PROPOSAL NO. 10     

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The Company reserves the right to add additional proposals and to modify and/or delete from any and all proposals.

Tentative Agreement  Union:                      

Arconic:                      

Date:                     ...;.