SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant / X /
Filed by a Party other than the Registrant /___/
Check the appropriate box:
/___/ Preliminary Proxy Statement
/ X / Definitive Proxy Statement
/ X / Definitive Additional Materials
/___/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
________________
REYNOLDS METALS COMPANY
(Name of Registrant as Specified in Its Charter)
Board of Directors of Reynolds Metals Company
(Name of Person(s) Filing Proxy Statement)
________________
Payment of filing fee (Check the appropriate box):
/ X / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
/___/ $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/___/ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11*:
(4) Proposed maximum aggregate value of transaction:
/___/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
*Set forth the amount on which the filing fee is calculated and state how
it was determined.
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REYNOLDS METALS COMPANY
6601 West Broad Street
Richmond, Virginia 23230
February 25, 1994
To Our Stockholders:
You are cordially invited to attend the 1994 Annual Meeting of
Stockholders of Reynolds Metals Company which will be held at the offices
of the Company, Reynolds Metals Building, 6601 West Broad Street, Richmond,
Virginia, on Wednesday, April 20, 1994, at 10:00 a.m., local time. All
holders of record of the Company's outstanding Common Stock and 7% PRIDES*,
Convertible Preferred Stock at the close of business on February 22, 1994
are entitled to vote at the Annual Meeting.
At the Meeting, Stockholders will consider the items of business
described in the accompanying Notice of Annual Meeting and Proxy Statement.
In addition, I will present a report on the Company's business operations.
We hope you will be able to attend the Annual Meeting. If you plan to
attend, please mark the attendance box located in the upper right hand
corner of the proxy card.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, I URGE YOU TO
COMPLETE AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
ATTEND, YOUR HAVING SENT IN YOUR PROXY WILL NOT RESTRICT YOUR RIGHT TO VOTE
IN PERSON.
Sincerely,
Richard G. Holder
Richard G. Holder
Chairman of the Board and
Chief Executive Officer
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REYNOLDS METALS COMPANY
6601 West Broad Street
Richmond, Virginia 23230
__________
NOTICE
OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 20, 1994
__________
To the Holders of Shares of Common Stock and 7% PRIDES, Convertible
Preferred Stock:
The Annual Meeting of Stockholders of Reynolds Metals Company will be
held on Wednesday, April 20, 1994, at 10:00 a.m., local time, at the
offices of the Company, Reynolds Metals Building, 6601 West Broad Street,
Richmond, Virginia, for the following purposes:
1. To elect Directors of the Company;
2. To approve a Restricted Stock Plan for Outside Directors;
3. To ratify the selection of Ernst & Young as independent
auditors of the Company for the year 1994; and
4. To transact such other business as may properly come before
the Meeting.
Stockholders of record at the close of business on February 22, 1994
are entitled to vote at the Meeting. Holders of Common Stock will be
entitled to one vote per share. Holders of 7% PRIDES, Convertible
Preferred Stock will be entitled to 4/5 of a vote per share.
By Order of the Board of Directors,
D. MICHAEL JONES
Secretary
February 25, 1994
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REYNOLDS METALS COMPANY
__________
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 20, 1994
__________
PROXY SOLICITATION AND VOTING
This Proxy Statement is furnished to holders of shares of Common
Stock, without par value (the "Common Stock"), and 7% PRIDES, Convertible
Preferred Stock (the "PRIDES"), of Reynolds Metals Company (the "Company")
in connection with the solicitation of proxies by the Board of Directors of
the Company for use at the Annual Meeting of Stockholders to be held on
April 20, 1994 and at any adjournments thereof.
Proxies may be solicited by mail, telephone, telegraph or other
electronic means and personal interview. The Company has retained Morrow &
Co., Inc., 909 Third Avenue, New York, New York 10022-4799, to aid in the
solicitation of proxies. For this service, Morrow & Co., Inc. will receive
a fee of $10,000, plus reimbursement of out-of-pocket expenses. Brokers,
banks and other custodians, nominees and fiduciaries will be requested to
forward soliciting material to the beneficial owners of Common Stock and
PRIDES. All costs of the solicitation will be borne by the Company.
Holders of Common Stock and PRIDES of record at the close of business
on February 22, 1994 are entitled to vote at the Annual Meeting. On that
date, the Company had outstanding and entitled to vote at the Meeting
60,892,480 shares of Common Stock, each entitled to one vote, and
11,000,000 shares of PRIDES, each entitled to 4/5 of a vote. Holders of
shares of Common Stock and PRIDES will vote together as one class. The
presence, in person or by proxy, of Stockholders entitled to cast at least
a majority of the votes which all Stockholders are entitled to cast will
constitute a quorum. The affirmative vote of Stockholders representing a
majority of the votes cast is required for the election of the Nominees
(Item 1) and the approval of Item 2. Abstentions will be treated as votes
against an item. "Non-votes" (in which a nominee holding shares for a
beneficial owner votes on certain matters pursuant to discretionary
authority or instructions from the beneficial owner but does not vote on
other matters for which the nominee has not received instructions from the
beneficial owner and may not exercise discretionary voting authority, the
latter being termed "non-votes") will have no effect on the vote.
Any Stockholder giving a proxy has the power to revoke it at any time
before its use. If a proxy is properly signed and is not revoked by the
Stockholder, the shares it represents will be voted at the Annual Meeting
in accordance with the instructions of the Stockholder, or where no
instructions are given, such shares will be voted FOR Items 1, 2 and 3.
It is anticipated that proxy materials will first be mailed to
Stockholders on or about March 7, 1994.
ITEM 1. ELECTION OF DIRECTORS
Information Concerning the Nominees
The Board of Directors currently consists of fifteen persons. Unless
otherwise instructed on the proxy, the shares represented by proxies will be
voted for the election of the fourteen Nominees named below as Directors of
the Company for the ensuing year. If any Nominee becomes unavailable to
serve as a Director for any reason, the shares represented by such proxies
may be voted for a substitute Nominee designated by the Board of Directors.
Thirteen of the Nominees were elected at the 1993 Annual Meeting of
Stockholders. Jeremiah J. Sheehan was elected by the Board of Directors
effective January 21, 1994. Ralph S. Thomas, a Director since 1972, will
retire from the Board of Directors and not stand for reelection.
The following table sets forth the names, ages and principal occupations
of, and certain other information regarding, the Nominees:
Director
Name-Age-Principal Occupation-Other Information Since
WILLIAM O. BOURKE (66) 1982
Retired. Chairman of the Board and Chief Executive
Officer of the Company, 1988-1992. Director, Merrill
Lynch & Co., Inc., Premark International, Inc. and Sonat
Inc.
YALE M. BRANDT (63) 1988
Vice Chairman of the Board of the Company since May 1992.
Executive Vice President, Fabricated Industrial Products
of the Company, 1990-1992. Executive Vice President,
Fabricating Operations of the Company, 1988-1990.
THOMAS A. GRAVES, JR. (69) 1977
Retired. Director, Chief Executive Officer and Trustee,
The Henry Francis du Pont Winterthur Museum and Gardens,
an American decorative arts museum, gardens and library,
1985-1992. Director, Delaware Trust Company.
GERALD GREENWALD (58) 1991
Chairman of the Board and Chief Executive Officer, Tatra
Koprivnice, a Czech truck manufacturer, since 1993.
President and Deputy Chief Executive Officer, Olympia &
York Developments Limited, a Canadian real estate
company, 1992-1993. Managing Director, Dillon, Read &
Co., Inc., an investment banking firm, 1991-1992. Chief
Executive Officer, United Employee Acquisition Corp., a
corporation formed for the purchase of United Airlines by
employees, 1990. Vice Chairman, Chrysler Corporation, an
automobile manufacturer, 1988-1990. Director, Honeywell
Inc. and Aetna Life and Casualty Company.
JOHN R. HALL (61) 1985
Chairman of the Board and Chief Executive Officer,
Ashland Oil, Inc., a petroleum refiner and supplier of
petroleum products, since 1981. Director, Banc One
Corporation, The Canada Life Assurance Company and Humana
Inc.
ROBERT L. HINTZ (63) 1986
Chairman of the Board, R. L. Hintz & Associates, a
management services firm, since 1989. Director, The
Chesapeake Corporation, Scott & Stringfellow, Inc. and
Ashland Coal, Inc.
RICHARD G. HOLDER (62) 1984
Chairman of the Board and Chief Executive Officer of the
Company since May 1992. President and Chief Operating
Officer of the Company, 1988-1992. Director, Universal
Corporation and CPC International Inc.
DAVID P. REYNOLDS (78) 1945
Chairman Emeritus of the Board of the Company since 1988.
Chairman of the Board of the Company, 1986-1988.
Chairman of the Board and Chief Executive Officer of the
Company, 1976-1986.
RANDOLPH N. REYNOLDS (52) 1984
Vice Chairman of the Board of the Company since January
1994. Executive Vice President, International of the
Company, 1990-1994. Vice President of the Company,
1985-1990. President, Reynolds International, Inc., a
subsidiary of the Company, since 1980, and Chief
Executive Officer of that subsidiary since 1981.
Director, First Union Bank.
CHARLES A. SANDERS, M.D. (61) 1992
Chairman, Glaxo Inc., a pharmaceutical company and
subsidiary of British drug company Glaxo Holdings p.l.c.,
as of March 1, 1994. Chairman and Chief Executive
Officer, Glaxo Inc., 1989-March 1, 1994. Director,
Merrill Lynch & Co., Inc., Glaxo Holdings p.l.c. and
Morton International, Inc.
HENRY S. SAVEDGE, JR. (60) 1992
Executive Vice President and Chief Financial Officer of
the Company since May 1992. Vice President, Finance of
the Company, 1990-1992. Vice President, Planning and
Analysis of the Company, 1987-1990.
JEREMIAH J. SHEEHAN (55) 1994
President and Chief Operating Officer of the Company
since January 1994. Executive Vice President,
Fabricated Products of the Company, 1993-1994.
Executive Vice President, Consumer and Packaging
Products of the Company, 1990-1993. Vice President,
Can Division of the Company, 1988-1990.
ROBERT J. VLASIC (67) 1987
Chairman Emeritus, Campbell Soup Company, a
manufacturer of prepared convenience foods, since
November 1993. Chairman, Campbell Soup Company,
1988-1993. Director, Campbell Soup Company.
JOE B. WYATT (58) 1992
Chancellor, Vanderbilt University since 1982.
Director, Sonat Inc. and Ingram Industries, Inc.
Randolph N. Reynolds is a nephew of David P. Reynolds. William G.
Reynolds, Jr., a nephew of David P. Reynolds and the brother of Randolph N.
Reynolds, is a Vice President of the Company.
Mr. Greenwald served as President and Deputy Chief Executive Officer
of Olympia & York Developments Limited ("O&Y") from April 1992 to August
1993. Mr. Greenwald was hired to head O&Y's restructuring efforts at a
time when O&Y was facing a liquidity crisis. In May 1992, O&Y filed for
protection under the Canadian Companies' Creditors Arrangement Act and
under Chapter 11 of the United States federal bankruptcy code with respect
to a portion of its operations. O&Y's operations in the United Kingdom
were also placed in Administration under the insolvency laws of that
country.
Meetings and Committees of the Board
The Board of Directors held nine meetings and acted once by unanimous
written consent in 1993. The Board has appointed from its members six
standing committees of the Board, which met periodically during 1993.
Directors' attendance at meetings of the Board and of standing committees
on which they served averaged over 90% during 1993. All incumbent
Directors serving in 1993 attended at least 75% of such meetings.
The Executive Committee is composed of W. O. Bourke (Chairman), Y. M.
Brandt, R. G. Holder, R. N. Reynolds, H. S. Savedge, Jr. and J. J. Sheehan.
It has the power to act in place of the Board of Directors during intervals
between meetings of the Board and to review and approve the compensation of
Directors of the Company. This committee met once and acted four times by
unanimous written consent in 1993.
The Finance Committee is composed of H. S. Savedge, Jr. (Chairman), W.
O. Bourke, Y. M. Brandt, G. Greenwald, J. R. Hall, R. L. Hintz, R. G.
Holder, D. P. Reynolds, R. N. Reynolds, J. J. Sheehan and R. J. Vlasic.
Its principal function is to review regularly the financial condition of
the Company and its consolidated subsidiaries so as to counsel the Board of
Directors on the total financial resources available. It makes
recommendations respecting long-term and short-term financing,
acquisitions, investments, major capital expenditures and dividends. It
reviews the Company's cash flow, financial plans and insurance programs.
This committee met seven times in 1993.
The Audit Committee is composed of R. L. Hintz (Chairman), G.
Greenwald, J. R. Hall, C. A. Sanders, and J. B. Wyatt. The principal
functions of the Audit Committee are to oversee the performance and review
and approve the scope of the audit function of the Company's independent
auditors and its Internal Auditing Division. In this connection, the Audit
Committee recommends to the Board of Directors the firm to be engaged by
the Company as its independent auditors. It reviews, among other things,
audit plans and procedures, the Company's policies with respect to
conflicts of interest and the prohibition of the use of corporate funds or
other assets for improper purposes, changes in accounting policies and the
use of independent auditors for nonaudit services. This committee met
three times in 1993.
The Compensation Committee is composed of J. R. Hall (Chairman), T. A.
Graves, Jr., R. L. Hintz, C. A. Sanders and R. J. Vlasic. The principal
functions of the Compensation Committee are to review recommendations
submitted to it by management with respect to compensation of Executive
Officers of the Company, to make such recommendations to the Board of
Directors as its review dictates and to administer the 1982, 1987 and 1992
Nonqualified Stock Option Plans and the Performance Incentive Plan. See
"Report of Compensation Committee on Executive Compensation". This
committee met four times in 1993.
The Nominating Committee is composed of T. A. Graves, Jr. (Chairman),
W. O. Bourke, R. G. Holder, D. P. Reynolds, C. A. Sanders, R. S. Thomas and
J. B. Wyatt. The primary function of the Nominating Committee is to
recommend to the Board of Directors persons to be considered for election
to the Board. In making such recommendations, the Nominating Committee
will consider nominations submitted by Stockholders. The Board of
Directors has adopted a policy under which it will not elect or nominate
for election or reelection to the Board of Directors any person who has
attained age 70. The Board of Directors has waived the policy with respect
to D. P. Reynolds until he has attained age 79. An Officer of the Company
serving as a member of the Board of Directors is expected to resign as a
Director at the time he ceases to be an Officer, whether due to retirement
or otherwise. The Board of Directors has waived this requirement with
respect to W. O. Bourke, who retired in 1992. The Nominating Committee
will consider Stockholder nominations for the 1995 Annual Meeting if
submitted in writing in accordance with the procedures set forth under
"General Information - Stockholders' Proposals and Nominations". This
committee met twice and acted once by unanimous written consent in 1993.
The Pension Investment Committee is composed of R. S. Thomas
(Chairman), Y. M. Brandt, H. S. Savedge, Jr., J. J. Sheehan and J. B.
Wyatt. It handles the financial administration of funds of the pension
plans of the Company and subsidiaries. In this function, it establishes
funding policies, appoints investment managers, actuaries and independent
auditors for each pension fund and reviews periodically with the Board of
Directors the activities and investment results achieved. This committee
met three times and acted once by unanimous written consent in 1993.
Board Compensation and Benefits
Directors who are not employed by the Company or any of its
subsidiaries are paid an annual retainer of $24,000 for serving as a
Director, $3,000 for each committee of the Board on which they serve, and
$2,000 for serving as committee chairman, except the chairmen of each of
the Audit Committee and Compensation Committee are paid $4,000. Directors
who are not employed by the Company or any of its subsidiaries are paid
$1,000 for each Board and committee meeting attended, plus expenses
reasonably incurred in connection with attending such meetings.
The Company has a deferred compensation plan under which a Director
may elect for each year to defer receipt of all or part of his retainer and
meeting fees. The deferred amounts will be paid in cash after (a) a
specified year, (b) the Director ceases to be a member of the Board of
Directors or (c) the Director reaches age 70, as the Director elects
(except that clause (b) applies in all cases where the deferred amounts are
credited with additional compensation in the form of share equivalents as
described in clause (ii) in the next sentence). Amounts deferred in 1988
and subsequent years are credited with additional compensation in the form
(as elected by the Director) of (i) interest at an annual rate set by the
plan committee, whose members are not eligible to participate in the plan,
or (ii) effective December 1, 1993, a number of equivalent shares of Common
Stock, together with dividend equivalents based on the dividends paid on
such shares of Common Stock. Participants have the option to receive
payment in a lump sum or in annual installments over a two- to ten-year
period.
The Company also has a retirement plan for Directors who are not
active or retired employees of the Company or a subsidiary. The annual
retirement payment is equal to the annual retainer being paid for serving
as a member of the Board at the time the Director retires as a Director.
Payments will begin when the Director attains age 65 or, if later, when he
retires as a Director. Payments will be made quarterly and will continue
for the same number of calendar quarters as the person served as a
nonemployee Director. All payments will cease upon the former Director's
death.
In addition, the Company has a death benefit plan for Directors who
are not active or retired employees of the Company or a subsidiary. Any
such Director who serves until attaining age 65 will continue to be covered
after retirement. The amount of the death benefit is $50,000.
The Executive Committee of the Board of Directors has authorized
adoption of a Restricted Stock Plan for Outside Directors, subject to
Stockholder approval. See Item 2 below. If the plan is approved by
Stockholders, the annual retainer for non-employee Directors' service on
committees of the Board described above will be eliminated effective April
1, 1994.
Other Compensation
The Company has a consulting agreement with W. O. Bourke, a Director
of the Company and former Chairman of the Board and Chief Executive Officer
of the Company, which has been extended through April 30, 1997, providing
for (i) payment of an annual fee of $100,000, (ii) reimbursement of
reasonable travel and other related business expenses and (iii) making
available to Mr. Bourke office space, secretarial services and a car. For
1993, Mr. Bourke received $111,559 in consulting fees and personal
benefits.
The Company has a consulting agreement with D. P. Reynolds, a Director
of the Company and former Chairman of the Board and Chief Executive Officer
of the Company, which has been extended through April 30, 1995. The
agreement provides for (i) payment of an annual fee of $200,000 (subject to
increase for a particular year, if so determined in the discretion of the
Compensation Committee after the close of such year, depending on the
performance achieved during such year), (ii) reimbursement of reasonable
travel and other related business expenses and certain club membership fees
and (iii) making available to Mr. Reynolds office space, secretarial
services and a car. For 1993, Mr. Reynolds received $234,314 in consulting
fees and personal benefits.
ITEM 2. APPROVAL OF RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
The Executive Committee of the Board of Directors has authorized
adoption of the Reynolds Metals Company Restricted Stock Plan for Outside
Directors (the "Directors Plan"), subject to Stockholder approval. If
approved by Stockholders, the Directors Plan will be effective April 20,
1994. Grants of restricted stock under the Directors Plan will replace the
annual retainer of $3,000 per committee currently paid to non-employee
Directors for service on committees of the Board. See "Item 1. Election of
Directors - Board Compensation and Benefits".
The purposes of the Directors Plan are to promote a greater identity
of interests between the Company's outside Directors and its Stockholders
through ownership of Common Stock, and to attract and retain outside
Directors by affording them an opportunity to share in the future successes
of the Company. Management believes that the grant of shares of restricted
stock to non-employee Directors is an appropriate complement to the
Company's payment of fees to such Directors.
The following summary of the principal features of the Directors Plan
is subject to and qualified in its entirety by the full text of the
Directors Plan. Any Stockholder desiring a copy of the Directors Plan in
the form approved by the Executive Committee of the Board of Directors may
obtain it by writing to Reynolds Metals Company, 6601 West Broad Street,
P. O. Box 27003, Richmond, Virginia 23261-7003, Attention: Secretary.
The Directors Plan
The Directors Plan provides for the grant to Directors who are not
employed by the Company or any of its subsidiaries ("Outside Directors")
shares of Common Stock subject to forfeiture and transfer restrictions
("restricted stock"), which restrictions lapse following the completion of
specified periods of service as a Director of the Company, as described
below. Nine of the Nominees are Outside Directors.
Each Outside Director elected to office by the Stockholders of the
Company on April 20, 1994 and who continues to serve as an Outside Director
on June 1, 1994 will be granted 1,000 shares of restricted stock on June 1,
1994, assuming that the Directors Plan is approved by Stockholders. In
addition, each person who becomes an Outside Director after April 20, 1994
will receive a grant of 1,000 shares of restricted stock 60 days after the
date such person is initially elected to the Board. Restrictions will
expire as to 200 shares of restricted stock on the April 1 immediately
following the date of grant (or, if later, on the date that is the
six-month anniversary of the date of grant), and restrictions will expire
as to an additional 200 shares on each successive April 1, so that by the
fifth April 1 following the date of grant, restrictions on all 1,000 shares
will have expired, assuming continued service by the Outside Director
throughout such period. An additional grant of 1,000 shares of restricted
stock will be made to each Outside Director on June 1 of the year in which
the restrictions have expired as to all the shares covered by such Outside
Director's previous grant under the Directors Plan (assuming such Outside
Director continues to serve as an Outside Director on such June 1).
One or more stock certificates representing shares of restricted stock
granted under the Directors Plan will be registered in the Outside
Director's name, but will be held by or on behalf of the Company until the
restrictions on such shares expire. The Outside Director will be entitled
to vote and receive dividends on such restricted stock but will not be
entitled to delivery of the stock certificates. No shares of restricted
stock may be sold, transferred, assigned, pledged or otherwise encumbered
or disposed of by the Outside Director until such time as the restrictions
have expired as to such shares. Certificates for the shares of Common
Stock representing each 200-share portion of a grant will be distributed to
the Outside Director free of all restrictions as soon as practicable after
the expiration of the restrictions applicable to such portion.
If an Outside Director ceases to be a member of the Board because he
dies or becomes disabled or because of a Change in Control (as defined in
the Directors Plan) of the Company, restrictions on 200 shares will lapse
immediately, with all other shares as to which restrictions have not
expired being forfeited. If an Outside Director ceases to be a member of
the Board for any reason other than a reason specified above, all shares as
to which restrictions have not expired will be forfeited.
Shares of restricted stock under the Directors Plan are subject to
adjustment for stock dividends, stock splits, mergers, consolidations or
other recapitalizations or reorganizations of the Company. Shares of
restricted stock may be authorized but unissued shares, shares reacquired
by the Company or a combination of both. Shares of Common Stock covered by
any grant of restricted stock which are forfeited under the Directors Plan
will become available for the grant of additional shares of restricted
stock under the Directors Plan.
The Board of Directors may amend, suspend or terminate the Directors
Plan; however, the provisions of the Directors Plan with respect to the
individuals eligible to participate and the amount, price and timing of
grants thereunder may not be amended more than once every six months other
than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder. Notwithstanding
the foregoing, the Board of Directors may, in any circumstance where it
deems such approval necessary or desirable, require Stockholder approval as
a condition to the effectiveness of any amendment or modification of the
Directors Plan.
The following table sets forth the number of shares of restricted
stock that will be allocated on June 1, 1994 to the named groups, assuming
that the Directors Plan and the election of the Nominees in Item 1 are
approved by Stockholders and assuming each Outside Director continues to
serve as an Outside Director on such date.
NEW PLAN BENEFITS
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
Name and Position Number of Shares
R. G. Holder, Chairman of the Board and Chief
Executive Officer 0
Y. M. Brandt, Vice Chairman of the Board 0
R. N. Reynolds, Vice Chairman of the Board; President and
Chief Executive Officer, Reynolds International, Inc. 0
J. J. Sheehan, President and Chief Operating Officer 0
H. S. Savedge, Jr., Executive Vice President and Chief
Financial Officer 0
Executive Officer Group (21 persons) 0
Non-Executive Officer Director Group (9 persons) 9,000
Non-Executive Officer Employee Group 0
Federal Income Tax Consequences
Under existing federal income tax law and regulations, no tax will be
imposed on an Outside Director, and no deduction will be available to the
Company, upon the grant of shares of restricted stock, except as noted
below. When the shares of restricted stock vest, the Company will be
entitled to an income tax deduction equal to the amount required to be
reported by the Outside Director as income at the time such amount is
included in the Outside Director's income.
Outside Directors will, when the shares of restricted stock vest,
recognize ordinary income for federal income tax purposes in an amount
equal to the fair market value of such restricted stock on the date the
shares vest. The tax basis of the shares acquired by an Outside Director
as restricted stock will be equal to their fair market value on the date
income with respect to the shares is recognized. Dividends paid on the
shares before they vest will be taxed as additional compensation to the
Outside Director. An Outside Director may, however, elect to recognize
income as of the date of grant of the restricted stock in an amount equal
to the fair market value of the restricted stock on the date of grant. An
Outside Director who makes this election will not recognize a loss for tax
purposes in the event of a subsequent forfeiture of the shares.
Various state laws may provide tax consequences that vary
significantly from those described above.
On February 24, 1994, the last reported sale price of the Company's
Common Stock on the New York Stock Exchange Composite Transactions Tape was
$49 3/4 per share.
The Board of Directors recommends that Stockholders vote FOR the
approval of the Directors Plan. Shares represented by proxies will be
voted for approval unless instructions to the contrary are given on the
proxy.
ITEM 3. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of its Audit
Committee, has selected Ernst & Young as independent auditors to examine
and report upon the financial statements of the Company and its
consolidated subsidiaries for the year 1994 and is submitting this matter
to Stockholders for their ratification. Ernst & Young served as the
Company's independent auditors in 1993 and in prior years. If Stockholders
do not ratify the selection of Ernst & Young, other independent auditors
will be considered. One or more partners of the firm of Ernst & Young will
be present at the Annual Meeting to make a statement if they desire to do
so and to respond to appropriate questions that may be asked by
Stockholders.
The Board of Directors of the Company recommends that Stockholders
vote FOR the ratification of the selection of Ernst & Young as independent
auditors to examine and report upon the financial statements of the Company
and its consolidated subsidiaries for the year 1994. Shares represented by
proxies will be voted for approval unless instructions to the contrary are
given on the proxy.
ITEM 4. OTHER PROPOSED ACTION
The Board of Directors is not aware that any matters other than those
stated in this Proxy Statement will come before the Annual Meeting. Should
any matters requiring the vote of Stockholders arise, it is intended that
shares represented by proxies will be voted in accordance with the
discretion of the person or persons holding the proxy.
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BENEFICIAL OWNERSHIP OF SECURITIES
Principal Holders
Stockholders who were known to the Company to own beneficially more
than five percent of any class of voting securities of the Company at
February 22, 1994 are set forth in the following table. Under the rules of
the Securities and Exchange Commission ("SEC"), "beneficial ownership" is
deemed to include any shares with respect to which the person, directly or
indirectly, has or shares voting and/or investment power, whether or not
such shares are held for the person's benefit.
Amount and
Nature of
Beneficial
Ownership Percent
(Number of of
Title of Class Shares) Class
-------------- ------------ -------
Wellington Management Company Common Stock 7,183,500(1) 11.8%
75 State Street
Boston, Massachusetts 02109
FMR Corp. Common Stock 6,439,718(2) 10.6%
82 Devonshire Street
Boston, Massachusetts 02109
Vanguard/Windsor Funds, Inc. Common Stock 5,440,400(3) 8.9%
P. O. Box 2600
Valley Forge,
Pennsylvania 19482
____________________
[FN]
(1) As reported in an Amendment No. 2 dated February 10, 1994 to a
Schedule 13G dated February 10, 1993 filed with the SEC. Based on the
information contained in such filing, of the number of shares of
Common Stock shown as beneficially owned, Wellington Management
Company, an investment advisor and parent holding company, has shared
voting power with respect to 502,100 shares, shared dispositive power
with respect to all of the shares, and sole voting and dispositive
power with respect to none of the shares. The reported shares are
owned by a variety of investment advisory clients of Wellington
Management Company, including Vanguard/Windsor Funds, Inc. See
footnote (3).
(2) As reported in an Amendment No. 2 dated February 11, 1994 to a
Schedule 13G dated April 10, 1992 filed with the SEC. Based on the
information contained in such filing, of the shares of Common Stock
shown as beneficially owned, FMR Corp., a parent holding company, has
sole voting power with respect to 218,995 shares, sole dispositive
power with respect to all of the shares, and shared voting and
dispositive power with respect to none of the shares. The filing
indicates that it was filed jointly on behalf of FMR Corp., Edward C.
Johnson 3d, chairman of FMR Corp., and Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR Corp.
(3) As reported in an Amendment No. 1 dated February 10, 1994 to a
Schedule 13G dated February 10, 1993 filed with the SEC. Based on the
information contained in such filing, Vanguard/Windsor Funds, Inc., an
investment company, has sole voting and shared dispositive power with
respect to all of the reported shares, and shared voting and sole
dispositive power with respect to none of the reported shares.<PAGE>
<TABLE>
Directors, Nominees and Executive Officers
The following table sets forth the beneficial ownership (as defined above), as of February 22,
1994, of the Company's Common Stock by each Director and Nominee, each of the Executive Officers
named in the Summary Compensation Table, and all Directors and Executive Officers of the Company as
a group.
<CAPTION>
Amount and Nature
Of Beneficial Ownership
(Number of Shares)
-----------------------------------------------------
Sole Voting Shared Voting
and/or and/or Percent
Investment Investment of
Title of Class Power(1) Power(2) Total(3) Class(4)
<S> <C> <C> <C> <C> <C>
Directors, Nominees and
Certain Executive Officers
William O. Bourke Common Stock 304,600 25,046 329,646 0.5%
Yale M. Brandt Common Stock 108,429 19,310 127,739 0.2%
Thomas A. Graves, Jr. Common Stock 690 --- 690
Gerald Greenwald Common Stock 900 --- 900
John R. Hall Common Stock 3,200 --- 3,200
Robert L. Hintz Common Stock 500 --- 500
Richard G. Holder Common Stock 248,334 20,769 269,103 0.4%
David P. Reynolds Common Stock 511,961 1,325,997 1,837,958 3.0%
Randolph N. Reynolds Common Stock 176,149 169,346 345,495 0.6%
Charles A. Sanders Common Stock 1,000 --- 1,000
Henry S. Savedge, Jr. Common Stock 39,593 3,036 42,629
Jeremiah J. Sheehan Common Stock 46,500 598 47,098
Ralph S. Thomas Common Stock 400 --- 400
Robert J. Vlasic Common Stock 3,000 --- 3,000
Joe B. Wyatt Common Stock 500 --- 500
All Directors and
Executive Officers
as a group (31 in
number) Common Stock 1,861,617 1,601,079 3,462,696 5.7%
__________________
<FN>
(1) Reported in this column are shares held of record individually or held in the name of a bank,
broker or nominee for the person's account and other shares with respect to which Directors,
Nominees and Executive Officers (or their spouses, minor children or other relatives who share
their home) have sole voting and/or investment power, including shares held as sole trustee or
custodian for the benefit of others. Also included in this column are the following shares of
the Company's Common Stock which may be acquired within 60 days after February 22, 1994 under
the Company's 1982, 1987 and 1992 Nonqualified Stock Option Plans: W. O. Bourke, 280,000
shares; Y. M. Brandt, 108,329 shares; R. G. Holder, 198,000 shares; R. N. Reynolds, 96,000
shares; H. S. Savedge, Jr., 30,250 shares; J. J. Sheehan, 46,500 shares; and all Directors and
Executive Officers as a group, 1,129,129 shares.
(2) Reported in this column are shares with respect to which Directors, Nominees and Executive
Officers (or their spouses or minor children) share voting and/or investment power, including
shares held jointly with others or as co-trustee for the benefit of others and shares credited
as of December 31, 1993 to the accounts of participants under the Company's Savings and
Investment Plan for Salaried Employees and Tax Reduction Act Stock Ownership Plan for Salaried
Employees.
(3) Each Director, Nominee and Executive Officer disclaims beneficial ownership of all securities
which are not held for his benefit. Each of W. O. Bourke, J. R. Hall, R. G. Holder and R. N.
Reynolds also disclaims beneficial ownership of the following shares of Common Stock of the
Company held by his wife: Mrs. W. O. Bourke, 400 shares; Mrs. J. R. Hall, 200 shares; Mrs. R.
G. Holder (as trustee and co-trustee of trusts for the benefit of her daughters), 11,100
shares; and Mrs. R. N. Reynolds, 1,770 shares. R. N. Reynolds also disclaims beneficial
ownership of 3,400 shares held by two sons. Another Executive Officer not named in the table
disclaims beneficial ownership of 90 shares held by his wife as custodian for the benefit of a
son. All disclaimed shares are included in the table.
(4) Unless otherwise indicated, beneficial ownership of any named individual does not exceed 0.1%
of the outstanding shares.
/TABLE
<PAGE>
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Stockholders
Reynolds Metals Company
The Compensation Committee of the Board of Directors (the "Committee")
has general oversight responsibilities for compensation paid to Executive
Officers.
The Company's executive compensation program is designed to help the
Company achieve its vision of being the premier supplier and recycler of
aluminum and other products in the global markets it serves by (i) building
and retaining a management team with exceptional abilities and (ii)
focusing management's attention, energy and skill on achieving short-term
business goals, securing profitable growth and maximizing long-term
shareholder interests. The principal components of the program are base
salary and variable compensation including annual cash incentives and stock
option awards. As discussed under "Salaries" and "Annual Cash Incentives",
the program combines relatively lower base salaries with relatively higher
incentive awards for superior performance, but with a penalty for falling
short of targeted performance. The higher the executive grade level, the
greater the proportion of compensation contingent on the accomplishment of
business objectives.
The Committee meets regularly with management and periodically with an
independent compensation consultant to review the Company's executive
compensation program. In its review, the Committee compares the total
compensation of the Company's Executive Officers to that of a comparison
group of companies. The comparison group currently consists of 30
comparably sized, capital intensive companies about which the Company's
independent consultant has comprehensive compensation data. The group
includes three of the companies in the aluminum and metals industry peer
group against which the Company's shareholder return is measured in the
Performance Graphs on page 13. Differences in size among the comparison
group are adjusted by regression analysis based on sales levels. The
Committee believes the comparison group, which is a more varied selection
of companies than the industry peer group, is a representative sample of
types of companies which are the Company's most direct competitors for
executive talent. The Company targets individual components of executive
compensation against the comparison group but has no specific target for
total compensation.
The Omnibus Budget Reconciliation Act of 1993 placed limits on
deductibility by the Company for federal income tax purposes of
compensation paid to certain Executive Officers. The Committee, with the
assistance of the Company's legal and tax personnel, has reviewed the
impact of these limits on the Company. Based on currently available
information, it appears unlikely that any compensation paid to Executive
Officers for 1994 will be nondeductible. The Committee will continue to
monitor this area and to assess various alternatives to minimize or
eliminate any loss of tax deductions in future years, provided the
alternatives are consistent with the objectives of the Company's executive
compensation program.
Salaries. The Company pays salaries to Executive Officers which are
targeted to be, and in 1993 were, somewhat below the size-adjusted median
for the comparison group.
The Committee reviews management's recommendations regarding the
salaries of all Executive Officers (other than the Chief Executive Officer)
and makes recommendations to the Board of Directors as it deems
appropriate. The Committee makes its own assessment of the Chief Executive
Officer's salary. In its review, the Committee considers the Executive
Officer's job responsibilities and performance, the business outlook for
the Company and pay practices of the comparison group, including salary
data provided by the Company's independent compensation consultant.
As the Committee reported last year, no salary increases for Executive
Officers were given in 1993, except in the case of promotions involving
increased responsibilities (with the salary increase in some cases lagging
the effective date of the promotion). This salary freeze was implemented
for the year 1993 as a cost-saving measure in response to difficult
industry conditions which have adversely affected the Company's
performance. As a result of the salary freeze, none of the Executive
Officers named in the Summary Compensation Table, except Mr. Savedge,
received an increase in base salary rate in 1993, although 1993 data
include twelve full months for increases given during 1992. Mr. Savedge
received a promotional increase in 1993 from $230,000 to $265,000.
Annual Cash Incentives. The Company has a Performance Incentive Plan
under which it pays Executive Officers and other key employees annual cash
incentives which vary in amount from year to year, or are not paid at all,
based on performance.
The Plan does not specify particular performance measures that must be
taken into account, leaving the determination of such measures to the
Committee's discretion on an annual basis. Corporate and business unit
performance measures typically take into account profitability, cash-flow
and other short-term financial and operating goals established at the
beginning of the year. For 1993, such goals included achieving the
Company's 1993 profit plan; improving customer satisfaction; reducing cycle
time on significant products and processes; increasing inventory turns; and
accomplishing an annualized $250 million performance improvement rate by
the end of the year (the "1993 Goals"). Individual performance measures
take into account the person's accomplishment of individual goals and
contribution to overall corporate performance for the year. Threshold,
target and maximum award levels are established by the Committee to reward
performance based on corporate, business unit and individual goals. None
of the goals has a specific weight, although overall levels of corporate
profitability are generally a threshold factor in determining incentive
awards.
After the close of each year, management recommends cash awards for
Executive Officers (other than the Chief Executive Officer) for that year
based on its assessment of corporate, business unit and individual
performance for the year. The Committee makes its own assessment of
corporate and individual performance in determining any cash award to be
paid to the Chief Executive Officer. The Committee grants cash awards it
deems appropriate after considering management's recommendations and the
total annual cash compensation levels necessary to be competitive with
levels paid by the comparison group. When performance is superior, annual
cash incentives are targeted to be such that total annual cash compensation
paid (i.e., salary and incentive for the year) will be in the top quartile
of the comparison group.
For 1993 management recommended that the Committee not grant incentive
awards under the Plan. The principal factor taken into account was the
operating loss reported by the Company for the year. Although the
Committee took particular note of substantial progress toward a number of
the other 1993 Goals, in particular achievement of the Company's $250
million profit improvement program, the Committee accepted the
recommendation. Accordingly, no incentive awards were granted for 1993.
Stock Options. The Company maintains a 1992 Nonqualified Stock Option
Plan, under which the Committee grants annually to Executive Officers and
other key employees options to purchase Common Stock of the Company. The
options provide a long-term incentive to build the Company's businesses and
align management's objectives with shareholders' interests by rewarding
management only when shareholder value is created. All options granted
under the 1992 Plan are exercisable no earlier than one year or later than
ten years from the date of grant at an exercise price equal to the fair
market value of the underlying Common Stock on the date of grant. The
ten-year Performance Graph on page 13, which compares the Company's
shareholder return over the last ten years with that of the S&P 500 Stock
Index and an aluminum and metals industry peer group, corresponds to the
term of the stock options.
The size of the option award granted to each Executive Officer is
based on a stock option grant schedule, approved by the Committee, which
allocates the total number of shares authorized for stock options under the
1992 Plan to eligible employees based on job responsibilities, assuming
that all option shares will be granted over five years. The total number
of shares authorized for stock options under the 1992 Plan (3,250,000
shares, as approved by Stockholders at the 1991 Annual Meeting) was
established based on estimated requirements for competitive long-term
compensation opportunities for designated key employees over a five-year
period. The option grant schedule was prepared on the same basis, taking
into account individual job responsibilities. The schedule is used as a
guide for what a typical award might be for each eligible employee,
including each Executive Officer, while actual awards may vary based on the
experience, achievements and anticipated future contributions to the
Company of each individual. The schedule was adjusted in 1993 by adding a
discretionary pool of shares equal to approximately 16.5% of the shares
that otherwise would have been granted. The additional discretionary pool
was intended to (i) provide a strong incentive for employees to work for
the long-term growth and financial success of the Company and to reinforce
a long-term focus in decision making, consistent with the Companywide
performance improvement program, and (ii) permit recognition of the
performance of deserving employees and additional responsibilities
undertaken in connection with organizational changes resulting from an
early retirement window for salaried employees. No other corporate
performance factors were taken into account. As a result of the addition
of the discretionary pool, the option grants in 1993 to each of the
Executive Officers (other than Mr. Holder) named in the Summary
Compensation Table were above the previously scheduled amount for their
respective salary grade levels.
Even with the additional discretionary pool, stock option awards were
generally at or below the size-adjusted median for long-term compensation
in the comparison group of companies. For this purpose, the option awards
are measured against long-term compensation of the comparison group, using
values based on option pricing models provided by the Company's
compensation consultant.
The number of options and shares currently held by an optionee is not
a factor in determining individual grants.
Chief Executive Officer Compensation. Compensation for the Company's
Chief Executive Officer is established in accordance with the executive
compensation philosophy and policies described above.
Mr. Holder's salary level is generally the result of: (i) the salary
grade level assigned to his position, which takes into account knowledge
and level of responsibility; (ii) time in his current position and
individual performance; (iii) salary data provided by the Company's
independent compensation consultant; and (iv) salary budget guidelines for
the year which take into account the business outlook for the Company. By
design, Mr. Holder's salary is positioned to be slightly below the
size-adjusted median for the comparison group, consistent with the
Company's executive compensation philosophy. At Mr. Holder's request, Mr.
Holder's base salary for 1993 remained at the same level as in 1992,
consistent with the freeze on all Executive Officer salaries implemented as
a cost-saving measure. Due to the salary freeze, Mr. Holder's salary is
now more than 20% below the size-adjusted median for the comparator group.
The Company paid no cash incentives under the Performance Incentive
Plan for 1993 even though the Company made substantial progress toward a
number of the 1993 Goals, in particular achievement of the Company's $250
million profit improvement program; accordingly, Mr. Holder received none.
The Committee approved a 1993 stock option grant to Mr. Holder of
80,000 shares, which was above the scheduled amount for his salary grade
level. In taking this action, the Committee noted that this was the first
stock option grant to Mr. Holder as Chief Executive Officer and that a
higher grant was appropriate (i) to weight his 1993 compensation package
toward long-term objectives, and (ii) to recognize his efforts in
restructuring activities and achieving substantial progress toward
performance improvement targets. These efforts and achievements included
reducing employment levels, containing health care costs, improving
manufacturing processes, restructuring and reorganizing operations and
divesting non-core assets.
COMPENSATION COMMITTEE
John R. Hall, Chairman
Thomas A. Graves, Jr.
Robert L. Hintz
Charles A. Sanders
Robert J. Vlasic
February 25, 1994
Richmond, Virginia
<PAGE>
PERFORMANCE GRAPHS
Following are two line graphs comparing the cumulative total shareholder
return on the Company's Common Stock with the cumulative total returns of the
S&P 500 Stock Index and a peer group which consists of companies included by
S&P in its published indices for the Aluminum Industry (Alcoa, Alcan and the
Company) and the Metals Industry (Asarco, Amax*, Cypress Minerals, Inco and
Phelps-Dodge). The returns of each component company in the peer group were
weighted according to the respective company's stock market capitalization as
of the beginning of each measurement period. The first graph compares the
returns over a five-year period; the second compares the returns over a
ten-year period, which corresponds to the term of the stock options granted
to Executive Officers during 1993. See "Executive Compensation - Stock
Option Grants in 1993".
The graphs assume that the value of the investment in the Company's
Common Stock and each index was $100 on December 31, 1988 and December 31,
1983, respectively, and that all dividends were reinvested. Since December
31, 1988, the cumulative total shareholder return on the Company's Common
Stock was -2%; since December 31, 1983, the return was 196%.
COMPARISON OF CUMULATIVE TOTAL RETURN
COMPANY, S & P 500, AND ALUMINUM & METALS INDUSTRY
[GRAPH]
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
Company 100 103 113 113 112 98
S & P 500 100 132 128 166 179 197
Aluminum & Metals 100 118 108 119 125 132
Industry
COMPARISON OF CUMULATIVE TOTAL RETURN
COMPANY, S & P 500, AND ALUMINUM & METALS INDUSTRY
[GRAPH]
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Company 100 88 102 110 266 300 309 339 338 337 296
S & P 500 100 106 140 166 174 203 268 259 338 364 401
Aluminum &
Metals
Industry 100 79 83 78 126 160 188 173 190 199 210
_____________________
*Amax was deleted from the published Metals Industry Index effective upon
the merger of Amax with Cyprus Minerals in November 1993.
<PAGE>
<TABLE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the total annual and long-term compensation of the Company's Chief
Executive Officer and four other most highly compensated Executive Officers for services in all
capacities during 1993, 1992 and 1991:
<CAPTION>
Annual Long-Term
Compensation Compensation
------------------------- ------------
Securities All
Name and Underlying Other
Principal Position Year Salary($) Bonus($)(1) Options(#)(2) Compensation($)(3)
<S> <C> <C> <C> <C> <C>
Richard G. Holder,
Chairman of the Board and 1993 $575,000 $ -0- 80,000 shs. $25,516
Chief Executive Officer, 1992(4) 541,667 -0- 30,000 shs. 23,099
Reynolds Metals Company 1991 475,000 250,000 30,000 shs. 23,601
Yale M. Brandt,
Vice Chairman of the 1993 $375,000 $ -0- 21,000 shs. $12,406
Board, Reynolds Metals 1992 366,667 -0- 16,000 shs. 11,918
Company 1991 350,000 125,000 16,000 shs. 11,957
Randolph N. Reynolds,
Vice Chairman of the 1993(5) $315,000 $ -0- 19,000 shs. $12,457
Board, Reynolds Metals 1992 306,667 -0- 16,000 shs. 11,637
Company; President and 1991 295,000 110,000 16,000 shs. 13,015
Chief Executive Officer,
Reynolds International, Inc.
Jeremiah J. Sheehan,
President and Chief 1993(6) $280,000 $ -0- 19,000 shs. $8,820
Operating Officer, 1992 271,667 -0- 12,000 shs. 8,400
Reynolds Metals Company 1991 260,000 100,000 12,000 shs. 8,620
Henry S. Savedge, Jr.,
Executive Vice President 1993 $262,083 $ -0- 20,000 shs. $10,868
and Chief Financial Officer, 1992 220,000 -0- 7,500 shs. 9,600
Reynolds Metals Company 1991 200,000 75,000 7,500 shs. 9,590
____________________
<FN>
(1) Amounts shown in this column are cash awards granted under the Company's Performance Incentive
Plan.
(2) Option awards in 1993 and 1992 were granted under the Company's 1992 Nonqualified Stock Option
Plan. See the section below entitled "Stock Option Grants in 1993." Option awards in 1991 were
granted under the Company's 1987 Nonqualified Stock Option Plan. None of the options has stock
appreciation rights attached.
(3) Amounts shown in this column for 1993 include the following:
(a) Company contributions to the Savings and Investment Plan for Salaried Employees (the
"Savings Plan") in the amount of $6,000 for R. G. Holder; $6,000 for Y. M. Brandt; $7,080 for R.
N. Reynolds; $6,000 for J. J. Sheehan; and $7,080 for H. S. Savedge, Jr.
(b) Amounts credited as Company contributions under the Benefit Restoration Plan for the
Savings Plan in the amount of $11,256 for R. G. Holder; $5,256 for Y. M. Brandt; $2,377 for R. N.
Reynolds; $2,400 for J. J. Sheehan; and $788 for H. S. Savedge, Jr.
(c) Amounts paid under the Financial Counseling Assistance Plan for Officers in the amount
of $8,260 for R. G. Holder; $1,150 for Y. M. Brandt; $3,000 for R. N. Reynolds; $420 for J. J.
Sheehan; and $3,000 for H. S. Savedge, Jr.
(4) Mr. Holder was elected Chairman of the Board and Chief Executive Officer of the Company effective
May 1, 1992, having previously served as President and Chief Operating Officer of the Company
since 1988. Effective May 1, 1992, Mr. Holder's annual salary rate increased from $475,000 to
$575,000; the 1992 stock option award was granted before he assumed the new position.
(5) Mr. Reynolds was elected a Vice Chairman of the Board of the Company effective January 21, 1994,
having previously served as Executive Vice President, International of the Company since 1990.
(6) Mr. Sheehan was elected President and Chief Operating Officer of the Company effective January 21,
1994, having previously served as Executive Vice President, Fabricated Products of the Company
since 1993.
/TABLE
<PAGE>
<TABLE>
Stock Option Grants in 1993
The following table sets forth information with respect to stock options granted by the Company to
each of the five named Executive Officers during 1993 and the grant-date present value of such options.
The grant-date present value is a theoretical value which is not necessarily indicative of the ultimate
value of the options to the Executive Officers. Ultimately, value is dependent on the amount, if any,
by which the market price of the Common Stock at any point in time exceeds the exercise price. (See
footnote (4) to the table.)
<CAPTION>
Individual Grants
------------------------------------------------
% of
Number of Total
Securities Options Exercise
Underlying Granted to or Base Grant-Date
Options Employees Price Per Expiration Present
Name Granted(1) in 1993(2) Share(3) Date Value(4)
<S> <C> <C> <C> <C> <C>
R. G. Holder 80,000 11.9% $45.50 5/20/03 $1,293,600
Y. M. Brandt 21,000 3.1 45.50 5/20/03 339,570
R. N. Reynolds 19,000 2.8 45.50 5/20/03 307,230
J. J. Sheehan 19,000 2.8 45.50 5/20/03 307,230
H. S. Savedge, Jr. 20,000 3.0 45.50 5/20/03 323,400
____________________
<FN>
(1) All options were granted under the Company's 1992 Nonqualified Stock Option Plan (the "1992 Plan"),
approved by Stockholders at the 1991 Annual Meeting. Each option entitles the optionee to purchase
one share of Common Stock from the Company, and is exercisable no earlier than one year or later than
ten years from the date of grant at an exercise price equal to the fair market value of the
underlying Common Stock on the date of grant. The options granted in 1993 will become exercisable
on May 20, 1994. None of the options has stock appreciation rights attached. If there is a Change
in Control (as defined in the 1992 Plan) of the Company, the 1992 Plan provides that all options
already granted thereunder will become immediately exercisable thirty days after the Change in
Control occurs, unless the Compensation Committee determines that the Change in Control presents no
material risk of loss of options to any optionee and directs that no such acceleration of
exercisability should occur. To the extent necessary to preserve the exemption from short-swing
profit liability under Section 16(b) of the Securities Exchange Act of 1934, the date as of which
options first become exercisable by optionees who are Executive Officers or Directors may not be
accelerated to occur earlier than six months from the date of the respective grant.
(2) A total of 440 persons were granted options in 1993 under the 1992 Plan, covering an aggregate of
673,100 shares of Common Stock, which constituted approximately 25% of the shares available for
options under the 1992 Plan.
(3) The exercise price may be paid by the optionee in cash, in shares of Common Stock valued at fair
market value on the date of exercise, or pursuant to an exercise procedure under which a brokerage
firm makes a loan to the optionee for the payment of the option exercise price and all applicable
withholding taxes. The optionee may repay the loan by selling the purchased shares immediately
through the brokerage firm, or the loan may remain outstanding until the shares are later sold or
the loan is otherwise repaid by the optionee.
(4) THE VALUES SHOWN ARE PURELY THEORETICAL. The options had no immediate value on the date of grant
and will have no value until one year after the grant and then only to the extent that the market
price of the Common Stock exceeds the exercise price. The values shown are based on the
Black-Scholes option pricing model, a complex mathematical formula used to value publicly-traded
options. The following assumptions were used to calculate the values under the Black-Scholes
formula: (i) an expected volatility rate of .26 with respect to the Common Stock based on the
average weekly price change of the Common Stock for the six months before the date of grant; (ii)
a risk-free rate of return of 6.0% based on the 10-year Treasury bond yield on the date of grant;
(iii) a dividend yield of 2.2% based on the current annual dividend of $1.00 per share; and (iv) an
option term of ten years, an option exercise price of $45.50 per share and an exercise date of May
20, 2003. The Black-Scholes formula does not take into account, and the values shown in the table
were not adjusted for, two important aspects of options awarded under the 1992 Plan. First, the
formula assumes that a liquid market exists for the options; however, options awarded under the 1992
Plan may not be transferred. Second, it assumes that the options may be exercised immediately;
however, options awarded under the 1992 Plan may not be exercised earlier than one year from the date
of grant.
The values assigned to the reported options are provided solely to comply with SEC rules. No
prediction is made as to possible future appreciation, if any, of the Company's stock price. See
page 7 for a recent price of the Common Stock.
/TABLE
<PAGE>
<TABLE>
Aggregated Option Exercises in 1993 and
Option Values at December 31, 1993
The table below sets forth information with respect to options exercised by each of the five named
Executive Officers during 1993 and the number and value of unexercised options held at the end of 1993:
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Number of December 31, 1993 December 31, 1993
Shares
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized(1) Unexercisable Unexercisable(2)
<S> <C> <C> <C> <C>
R. G. Holder -0- -0- 198,000 / 80,000 $782,250/ $-0-
Y. M. Brandt -0- -0- 108,329 / 21,000 290,694/ -0-
R. N. Reynolds 2,000 $59,000 96,000 / 19,000 200,000/ -0-
J. J. Sheehan -0- -0- 46,500 / 19,000 16,875/ -0-
H. S. Savedge, Jr. -0- -0- 30,250 / 20,000 11,250/ -0-
____________________
<FN>
(1) Based on the difference between the option exercise price and the closing price of the Company's
Common Stock on the date of exercise as reported on the New York Stock Exchange Composite
Transactions Tape.
(2) Based on the difference between the option exercise price and the closing price of the Company's
Common Stock on December 31, 1993 as reported on the New York Stock Exchange Composite Transactions
Tape.
</TABLE>
<PAGE>
<TABLE>
Pension Plan Table
The following table sets forth the total estimated annual benefits payable under the Company's
defined benefit pension plan, called the New Retirement Program for Salaried Employees (the "New
Retirement Program"), and benefit restoration plans upon retirement to persons in specified final average
earnings and years-of-benefit-service classifications. The amounts shown are based on the Social Security
Act in effect for retirement in 1994. Such amounts are not necessarily indicative of amounts that are
or may actually become payable.
<CAPTION>
Years of Benefit Service at Retirement (1)
-------------------------------------------------------------------------------
Final Average
Earnings 5 10 15 20 25 30 35 40
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 150,000 $ 12,811 $ 25,623 $ 38,435 $ 51,247 $ 64,059 $ 70,870 $ 77,682 $ 84,494
200,000 17,311 34,623 51,935 69,247 86,559 95,870 105,182 114,494
250,000 21,811 43,623 65,435 87,247 109,059 120,870 132,682 144,494
300,000 26,311 52,623 78,935 105,247 131,559 145,870 160,182 174,494
350,000 30,811 61,623 92,435 123,247 154,059 170,870 187,682 204,494
400,000 35,311 70,623 105,935 141,247 176,559 195,870 215,182 234,494
500,000 44,311 88,623 132,935 177,247 221,559 245,870 270,182 294,494
600,000 53,311 106,623 159,935 213,247 266,559 295,870 325,182 354,494
700,000 62,311 124,623 186,935 249,247 311,559 345,870 380,182 414,494
800,000 71,311 142,623 213,935 285,247 356,559 395,870 435,182 474,494
900,000 80,311 160,623 240,935 321,247 401,559 445,870 490,182 534,494
1,000,000 89,311 178,623 267,935 357,247 446,559 495,870 545,182 594,494
1,150,000 102,811 205,623 308,435 411,247 514,059 570,870 627,682 684,494
___________________________
<FN>
(1) Benefits are computed as if paid on the basis of a straight life annuity, assuming retirement at age
65.
/TABLE
<PAGE>
<PAGE>
The table below sets forth information relating to the New Retirement
Program with respect to the five Executive Officers named in the Summary
Compensation Table, assuming retirement (and eligibility for retirement) at
January 1, 1994:
Final Average Years of Benefit
Earnings Service Completed
R. G. Holder $917,000 35
Y. M. Brandt 607,000 36
R. N. Reynolds 511,000 25
J. J. Sheehan(1) 394,000 6
H. S. Savedge, Jr. 304,000 34
_______________
[FN]
(1) The Company has agreed to pay J. J. Sheehan (a) certain early retirement
benefits equivalent to those he would have received from a prior employer,
if his employment with the Company is involuntarily terminated before age
65, and (b) upon his death, surviving spouse benefits equal to one-half of
any amounts payable under clause (a).
The New Retirement Program provides participants an annual benefit upon
retirement determined pursuant to a formula which takes into account final
average earnings, years of benefit service (as defined in the New Retirement
Program), and Social Security benefits. For purposes of the New Retirement
Program, a participant's final average earnings include base salary in effect,
plus profit sharing and bonus awards, in the five consecutive calendar years for
which the average is highest during the fifteen calendar years preceding
retirement. (See the Summary Compensation Table for salary and bonus
information for the five named Executive Officers for the years 1991-1993.)
Benefits calculated pursuant to the formula are reduced by an amount based upon
both (a) the primary Social Security benefit estimated to be payable upon
retirement or, if later, at age 65 and (b) years of benefit service.
Regulations issued in 1991 to implement the Tax Reform Act of 1986 and
subsequent legislation may require the Company to make changes in the benefit
formula from time to time. Benefits payable under the New Retirement Program
are directly offset by benefits payable to participants from the Company's
Retirement Program for Salaried Employees, which was terminated effective August
22, 1983.
The Internal Revenue Code and the Tax Reform Act of 1986 prescribe limits
on compensation that may be taken into account to calculate benefits and the
actual benefits payable under tax-qualified defined benefit plans. The Company
has nonqualified benefit restoration plans providing for the payment from
general funds of amounts otherwise payable under the New Retirement Program but
for these limitations.
Severance Agreements
The Company has entered into severance agreements with key executives
designated by the Compensation Committee, including the five Executive Officers
named in the Summary Compensation Table. Each agreement provides that
termination compensation will be paid if the executive's employment is
terminated without Cause (as defined in the agreement) by the Company or
terminated by the executive in certain circumstances, in either case within two
years after a Change in Control (as defined in the agreement). Termination
compensation includes (a) a cash payment equal to three times the sum of (i)
annual base salary at the time of termination plus (ii) the highest cash
incentive award paid to the executive for any previous year, (b) a cash
settlement of stock options granted under the Company's stock option plans but
not yet exercisable at the date of termination, and (c) a cash payment to give
retirement benefits equal to those payable had the executive (i) been vested (if
not already vested at the time of termination) and (ii) worked for the Company
three additional years. In addition, each agreement provides for continuation
of medical, life and disability benefits for three years, ownership of the car
assigned to the executive at the time of termination and making the executive
whole for any applicable excise taxes as a result of payment of the termination
compensation.
The Company has a Management Incentive Deferral Plan under which Officers,
including the five Executive Officers named in the Summary Compensation Table,
and other key employees who are recommended by the Chief Executive Officer may
defer receipt of up to 50% of the incentive compensation, if any, otherwise
payable under the Company's Performance Incentive Plan for services performed
each year. Deferred compensation is credited with interest computed at a rate
determined by the Compensation Committee for that year's deferrals. Except in
the case of retirement, deferrals must be for a period of at least five years.
Payments will be made in a lump sum or in 5, 10, 15 or 20 annual installments,
as elected by the participant. The Plan also allows the Compensation Committee
to accelerate payments to all participants if it determines that a major
challenge to the control of the Company exists or if other extraordinary
circumstances make such acceleration in the best interest of the Company as
determined by the Committee.
In addition, as described in footnote (1) to the table in the section
entitled "Stock Option Grants in 1993", the 1992 Plan provides that under
certain circumstances the exercisability of stock options granted to optionees,
including the five Executive Officers named in the Summary Compensation Table,
may be accelerated in the event of a Change in Control of the Company.
GENERAL INFORMATION
Annual Report
The Annual Report of the Company containing audited financial statements
for the year 1993 is being mailed to each Stockholder with this Proxy Statement.
Stockholders' Proposals and Nominations
Stockholders may present proposals which are proper subjects for
consideration at the 1995 Annual Meeting of Stockholders to the Company for
inclusion in its proxy materials relating to that meeting. These proposals
should be submitted in writing as specified by SEC rules to: Reynolds Metals
Company, 6601 West Broad Street, P.O. Box 27003, Richmond, Virginia 23261-7003,
Attention: Secretary. They must be received by October 28, 1994 in order to
be included in the proxy materials for the 1995 Annual Meeting.
Stockholder nominations for Directors will be considered by the Nominating
Committee if submitted in writing to the Nominating Committee, c/o Secretary,
Reynolds Metals Company, 6601 West Broad Street, P.O. Box 27003, Richmond,
Virginia 23261-7003. Nominations must include the information specified in
clauses (ii) through (v) in the following paragraph.
The Company's By-Laws require that Stockholders furnish written notice to
the Company of any business to be conducted at an annual meeting which is not
included in the Company's proxy materials or is not brought before the meeting
by or at the direction of the Board of Directors or the Officer presiding over
the meeting. Such notice must contain the following information: (i) a full
description of each item of business proposed to be brought before the meeting;
(ii) the name and address of the person proposing such business (or nominating
a Nominee for Director); (iii) the class and number of shares held of record,
held beneficially and represented by proxy by such person as of the record date
for the meeting (if publicly available) and as of the date of such notice; (iv)
if any item of such business involves a nomination for Director, all information
regarding each such Nominee that would be required to be set forth in a
definitive proxy statement filed with the SEC pursuant to SEC rules, and the
written consent of each such Nominee; and (v) all other information that would
be required to be filed with the SEC if, with respect to such business, the
person were a participant in a solicitation subject to Section 14 of the
Securities Exchange Act of 1934. Notice of business to be brought before the
1995 Annual Meeting must be received by the Secretary of the Company at the
above address not later than January 26, 1995.
A copy of the By-Law provisions referred to above may be obtained, without
charge, upon written request to the Secretary.
D. MICHAEL JONES
Secretary
February 25, 1994
Richmond, Virginia
<PAGE>
<PAGE>
Notice of
Annual Meeting
of Stockholders
April 20, 1994
and
Proxy Statement
(Reynolds logo)
<PAGE>
[TEXT]
<PAGE>
APPENDIX
LIST OF GRAPHIC AND IMAGE INFORMATION
Performance Graphs -- Two line graphs (showing shareholder returns on the
Company's Common Stock, the S&P 500 Stock Index and a peer group consisting of
companies in the published S&P Aluminum Industry and Metals Industry Indices
over a five- and ten-year period, respectively) appear in the section entitled
"Performance Graphs". See the narrative discussion in the section entitled
"Performance Graphs".
<PAGE>
[TEXT]
<PAGE>
REYNOLDS METALS COMPANY
Proxy Solicited by the Board of Directors
for Annual Meeting of Stockholders
April 20, 1994
The undersigned appoints Richard G. Holder and D. Michael Jones, and
each of them, proxies, with full power of substitution, to vote the shares of
Common Stock of Reynolds Metals Company which the undersigned is entitled to
vote at the Annual Meeting of Stockholders of the Company to be held at
Reynolds Metals Company Building, 6601 West Broad Street, Richmond, Virginia,
on Wednesday, April 20, 1994 at 10:00 A.M. (local time), and at any
adjournments thereof. The undersigned hereby confer(s) upon the proxies and
each of them authority to vote for a substitute Nominee or substitute
Nominees designated by the Board of Directors with respect to the election of
Directors if any Nominee is unable or unwilling to serve if elected.
For participants in the Company's Savings and Investment Plan for
Salaried Employees, Tax Reduction Act Stock Ownership Plan for Salaried
Employees and/or Savings Plan for Hourly Employees, this card also provides
voting instructions to the respective trustees under such plans for the
undersigned's allocable portion, if any, of the total number of shares of
Common Stock of the Company held by such plans as indicated on the reverse
side. These voting instructions are solicited and will be carried out in
accordance with the applicable provisions of such plans.
(continued and to be SIGNED on the Reverse Side)
- ---------------------------------------------------------------------------
[Front, tear-off portion]
FOLD AND DETACH HERE
Dear Stockholder:
Enclosed are materials relating to the Company's 1994 Annual Meeting
of Stockholders. The notice of the Meeting and Proxy Statement describe
the formal business to be transacted at the Meeting.
Your vote is important to us. Whether or not you expect to attend the
Meeting, please complete, sign and return promptly the attached proxy card
in the accompanying envelope, which requires no postage if mailed in the
United States.
If you plan to attend the Meeting, please also mark the attendance box
located in the upper right hand corner of the proxy card.
REYNOLDS METALS COMPANY
<PAGE>
[TEXT]
<PAGE>
[Reverse Side]
I plan to
attend the
meeting
/__/
The Board of Directors recommends a vote FOR Items 1, 2 and 3.
Item 1 - Election of Directors:
For all Nominees - William O. Bourke, Yale M. Brandt,
Nominees Withhold Thomas A. Graves, Jr., Gerald Greenwald,
(except as Authority John R. Hall, Robert L. Hintz, Richard G.
withheld in to Vote Holder, David P. Reynolds, Randolph N.
the space for all Reynolds, Charles A. Sanders, M.D., Henry S.
provided) Nominees Savedge, Jr., Jeremiah J. Sheehan, Robert J.
Vlasic, Joe B. Wyatt
(To withhold authority to vote for any
individual Nominee, write that Nominee's name
in the space provided below.)
/_/ /_/ _____________________________________________
Item 2 Item 3
Approval of Restricted Stock Ratification of Selection
Plan for Outside Directors of Ernst & Young as
Independent Auditors
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
/_/ /_/ /_/ /_/ /_/ /_/
Item 4
In their discretion the proxies are
authorized to vote upon such other
matters as may properly come before
the Meeting.
Date:______________________________
___________________________________
Signature(s) of Stockholder(s)
___________________________________
Please mark, date and sign as your
name appears to the left and return
in the enclosed envelope. If
signing as attorney, executor,
administrator, trustee, guardian or
in another representative capacity,
please give your full title as
such.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. THE
SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH ANY CHOICE
SPECIFIED BY THE STOCKHOLDER; WHERE THERE IS NO CHOICE, SUCH SHARES WILL BE
VOTED IN FAVOR OF ITEMS 1, 2 AND 3.
<PAGE>
[TEXT]
<PAGE>
REYNOLDS METALS COMPANY
Proxy Solicited by the Board of Directors
for Annual Meeting of Stockholders
April 20, 1994
The undersigned appoints Richard G. Holder and D. Michael Jones, and
each of them, proxies, with full power of substitution, to vote the shares
of 7% PRIDES*, Convertible Preferred Stock of Reynolds Metals Company which
the undersigned is entitled to vote at the Annual Meeting of Stockholders
of the Company to be held at Reynolds Metals Company Building, 6601 West
Broad Street, Richmond, Virginia, on Wednesday, April 20, 1994 at 10:00
A.M. (local time), and at any adjournments thereof. The undersigned hereby
confer(s) upon the proxies and each of them authority to vote for a
substitute Nominee or substitute Nominees designated by the Board of
Directors with respect to the election of Directors if any Nominee is
unable or unwilling to serve if elected.
(continued and to be SIGNED on the Reverse Side)
- ---------------------------------------------------------------------------
[Front, tear-off portion]
FOLD AND DETACH HERE
Dear Stockholder:
Enclosed are materials relating to the Company's 1994 Annual Meeting
of Stockholders. The notice of the Meeting and Proxy Statement describe
the formal business to be transacted at the Meeting.
Your vote is important to us. Whether or not you expect to attend the
Meeting, please complete, sign and return promptly the attached proxy card
in the accompanying envelope, which requires no postage if mailed in the
United States.
If you plan to attend the Meeting, please also mark the attendance box
located in the upper right hand corner of the proxy card.
REYNOLDS METALS COMPANY
<PAGE>
[TEXT]
<PAGE>
[Reverse Side]
I plan to
attend the
meeting
/__/
The Board of Directors recommends a vote FOR Items 1, 2 and 3.
Item 1 - Election of Directors:
For all Nominees - William O. Bourke, Yale M. Brandt,
Nominees Withhold Thomas A. Graves, Jr., Gerald Greenwald,
(except as Authority John R. Hall, Robert L. Hintz, Richard G.
withheld in to Vote Holder, David P. Reynolds, Randolph N.
the space for all Reynolds, Charles A. Sanders, M.D., Henry S.
provided) Nominees Savedge, Jr., Jeremiah J. Sheehan, Robert J.
Vlasic, Joe B. Wyatt
(To withhold authority to vote for any
individual Nominee, write that Nominee's name
in the space provided below.)
/_/ /_/ _____________________________________________
Item 2 Item 3
Approval of Restricted Stock Ratification of Selection
Plan for Outside Directors of Ernst & Young as
Independent Auditors
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
/_/ /_/ /_/ /_/ /_/ /_/
Item 4
In their discretion the proxies are
authorized to vote upon such other
matters as may properly come before
the Meeting.
Date:______________________________
___________________________________
Signature(s) of Stockholder(s)
___________________________________
Please mark, date and sign as your
name appears to the left and return
in the enclosed envelope. If
signing as attorney, executor,
administrator, trustee, guardian or
in another representative capacity,
please give your full title as
such.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. THE
SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH ANY CHOICE
SPECIFIED BY THE STOCKHOLDER; WHERE THERE IS NO CHOICE, SUCH SHARES WILL BE
VOTED IN FAVOR OF ITEMS 1, 2 AND 3.
<PAGE>
[TEXT]
<PAGE>
APPENDIX
REYNOLDS METALS COMPANY
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
Effective April 20, 1994
<PAGE>
[TEXT]
<PAGE>
ARTICLE I
PURPOSE OF THE PLAN
The purposes of the Plan are to promote a greater identity of
interests between the Company's Directors and its stockholders through
increasing ownership of Company Stock by the Directors and to assist the
Company in attracting and retaining qualified individuals to serve as
Directors by affording them an opportunity to share in the future successes
of the Company.
ARTICLE II
DEFINITIONS
2.01 "Beneficiary" shall mean the individual or entity designated by
the Director to receive, upon the death of the Director, undelivered shares
of Restricted Stock as to which the applicable restrictions have expired.
If no such designation is made, or if the designated individual predeceases
the Director or the entity no longer exists, then the Beneficiary shall be
the Director's estate.
2.02 "Board" shall mean the Board of Directors of the Company.
2.03 "Company" shall mean Reynolds Metals Company, a Delaware
corporation.
2.04 "Company Stock" shall mean the Common Stock of the Company,
without par value, and such other stock and securities as may be
substituted therefor in accordance with Section 5.02.
2.05 "Director" shall mean a member of the Board who is not an
employee of the Company or of one of its subsidiaries.
2.06 "Effective Date" shall mean April 20, 1994.
2.07 "Plan" shall mean this Reynolds Metals Company Restricted Stock
Plan for Outside Directors, as amended from time to time.
2.08 "Restricted Stock" shall mean Company Stock granted to a
Director in accordance with Article III and subject to the restrictions set
forth in Section 4.03.
ARTICLE III
GRANTS OF RESTRICTED STOCK
3.01 On June 1, 1994, each Director elected to office by the
stockholders of the Company on April 20, 1994, shall receive a grant of
1,000 shares of Restricted Stock. Except as otherwise provided in Section
3.02, each individual who becomes a Director after April 20, 1994, shall
receive a grant of 1,000 shares of Restricted Stock 60 days after the date
the individual is first elected to the Board, whether by the Board or by
stockholders.
3.02 If an employee of the Company or of one of its subsidiaries
retires from employment with the Company or its subsidiary, as applicable,
and if such former employee is elected to serve as a Director following
retirement, then such former employee shall become eligible to participate
in the Plan and shall receive a grant of 1,000 shares of Restricted Stock
60 days after the date on which he or she is first elected or reelected to
the Board following his or her retirement.
3.03 So long as he or she remains a Director, an additional grant of
1,000 shares of Restricted Stock shall be made to each Director on June 1
(or on the next business day, if June 1 is not a business day) of the year
in which the restrictions expire as to all the shares covered by such
Director's previous grant under the Plan.
ARTICLE IV
TERMS AND CONDITIONS OF GRANTS
4.01 The terms and conditions set forth in this Article IV shall apply
to each grant of shares of Restricted Stock. If required by the Company,
each such grant shall be evidenced by a written agreement that sets forth
the specific terms of the grant in accordance with the Plan and that is
duly executed by or on behalf of the Company and the Director.
4.02 At the time of each grant, a share certificate or certificates
representing the number of shares of Restricted Stock granted to a Director
shall be registered in the Director's name but shall be held by or on
behalf of the Company for the Director's account. The Director shall
execute and deliver to the Company a stock power duly endorsed in blank
relating to such shares of Restricted Stock. The Director shall have all
the rights and privileges of a stockholder as to such shares of Restricted
Stock, including the right to receive dividends and the right to vote such
shares, subject to the restrictions set forth in Section 4.03.
4.03 The shares of Restricted Stock granted to any Director under
Article III shall be subject to the following restrictions:
(a) Such shares may not be sold, transferred, assigned, pledged
or otherwise encumbered or disposed of until such time as such
restrictions have expired as to such shares as provided in Section
4.04.
(b) A Director shall not be entitled to delivery of a share
certificate representing any shares of Restricted Stock until the
expiration of such restrictions as to such shares.
4.04 (a) Except as otherwise provided in Section 4.04(b), the
restrictions applicable to shares of Restricted Stock covered by any grant
to any Director shall expire in accordance with the terms of this Section
4.04(a). Restrictions shall expire as to 200 shares of Restricted Stock on
the later of (i) the April 1 immediately following the date of grant or
(ii) the date that is the six-month anniversary of the date of grant, and
restrictions shall expire as to an additional 200 shares on each successive
April 1, so that by the fifth April 1 following the date of grant,
restrictions on all 1,000 shares shall have expired; provided, however,
that restrictions shall expire as to shares of Restricted Stock only if the
Director shall have remained a member of the Board continuously from the
date of grant of such shares to the scheduled expiration date.
(b) If a Director ceases to be a member of the Board because of
death, Disability, or a Change in Control of the Company, the restrictions
on 200 shares of Restricted Stock shall expire as of the later of (i) the
date the Director ceases to be a member of the Board or (ii) the date that
is the six-month anniversary of the date of grant. Such 200 shares shall
be in addition to any shares as to which the restrictions have expired in
accordance with the second sentence of Section 4.04(a).
For purposes of this Section 4.04(b), the term "Disability" shall have
the same meaning as a "total disability" as determined under the rules and
procedures that apply under the Company's Long Term Disability Plan for
Salaried Employees, and the term "Change in Control" shall mean the
occurrence of any of the following dates or events:
(i) a Stock Acquisition Date;
(ii) a Distribution Date; or
(iii) Continuing Directors ceasing to be a majority of the Board,
with the terms "Stock Acquisition Date," "Distribution Date" and
"Continuing Directors" having the meanings given to them in the Rights
Agreement dated November 23, 1987 between the Company and The Chase
Manhattan Bank, N.A., as initially executed.
4.05 All of the shares of Restricted Stock granted to any Director as
to which the restrictions have not previously expired shall be forfeited
immediately, and all rights of such Director to such shares shall terminate
without further obligation on the part of the Company, if the Director
shall cease to be a member of the Board for any reason other than as set
forth in Section 4.04(b).
4.06 As soon as practicable after the expiration of the restrictions
on any shares of Restricted Stock as herein provided, a share certificate
for such shares shall be delivered, free of all such restrictions, to the
Director (or to the Director's Beneficiary, if applicable) subject to the
withholding requirements of Section 7.04 (if applicable).
ARTICLE V
COMPANY STOCK
5.01 Shares of Company Stock granted or delivered under the Plan may
be authorized but unissued shares, shares reacquired by the Company, or a
combination of both, as the Board may from time to time determine. Shares
of Company Stock granted under the Plan but subsequently forfeited shall
continue to be otherwise available for the purposes of the Plan.
5.02 If any stock dividend is declared upon Company Stock, or if
there is any stock split, stock distribution, or other recapitalization of
the Company with respect to Company Stock, resulting in a split-up or
combination or exchange of shares, the number and kind of shares which may
thereafter be granted under the Plan shall be proportionately and
appropriately adjusted and the number and kind of shares then being held by
the Company as Restricted Stock shall be proportionately and appropriately
adjusted. Any new or additional shares of Restricted Stock, or stock or
other securities substituted therefor, to which a Director may be entitled
under this Section 5.02 shall be subject to all of the terms and conditions
of Article IV.
ARTICLE VI
AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN
The Board may from time to time amend, suspend or terminate the Plan,
in whole or in part; provided, however, that (a) without the Director's
consent, no such amendment, suspension or termination shall materially
adversely affect the rights of any Director in respect of Restricted Stock
previously granted to such Director and (b) the provisions of the Plan with
respect to individuals eligible to participate and the amount, price and
timing of grants hereunder shall not be amended more than once every six
months other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder.
Notwithstanding the foregoing, the Board may, in any circumstance where it
deems such approval necessary or desirable, require stockholder approval as
a condition to the effectiveness of any amendment or modification of the
Plan.
ARTICLE VII
GENERAL PROVISIONS
7.01 Neither the establishment of the Plan nor the payment of any
benefits hereunder nor any action of the Company, including the Board, in
connection therewith shall be held or construed to confer upon any
individual any legal right to remain on the Board.
7.02 No rights or benefits under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, except by will or the laws of descent and
distribution, and any attempt thereat shall be void. No such right or
benefit shall, before receipt thereof, be in any manner liable for or
subject to the recipient's debts, contracts, liabilities, engagements, or
torts.
7.03 This Plan shall inure to the benefit of, and be binding upon, the
Company and each Director, and upon the successors and assigns of the
Company and of each Director.
7.04 The Company shall not be required to deliver any fractional
share of Common Stock but shall pay, in lieu thereof, the fair market value
(measured as of the date restrictions lapse) of such fractional share to
the Director (or the Director's Beneficiary, if applicable).
7.05 Before the issuance or delivery of any shares of Restricted
Stock on which the restrictions have expired, the Company shall require
payment in cash by the Director of any withholding taxes that the Company
may be required by law to pay with respect to the issuance or delivery of
such shares.
7.06 Except as otherwise required by applicable federal laws, this
Plan shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Virginia.
Executed and adopted this ____ day of April, 1994, pursuant to action
taken by the Executive Committee of the Board of Directors of Reynolds
Metals Company at its meeting on ____________, 1994, by the Board of
Directors of Reynolds Metals Company at its meeting on February 18, 1994,
and by stockholders at the Annual Meeting on April 20, 1994.
REYNOLDS METALS COMPANY
By_______________________________
Title____________________________
