SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File Number 1-1430
REYNOLDS METALS COMPANY
A Delaware Corporation
(IRS Employer Identification No. 54-0355135)
6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003
Telephone: (804) 281-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
- - ------------------- -----------------------
Common Stock, no par value New York Stock Exchange
Chicago Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days. Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
As of February 25, 1997:
(a) the aggregate market value of the voting stock held by
nonaffiliates of the Registrant was approximately $3.9
billion*.
(b) the Registrant had 72,901,274 shares of Common Stock
outstanding and entitled to vote.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting of
Stockholders to be held on April 16, 1997 - Part III
__________________
* For this purpose, "nonaffiliates" are deemed to be persons
other than directors, officers and persons owning
beneficially more than five percent of the voting stock.
NOTE
In accordance with the Securities and Exchange Commission's
requirements, we will furnish copies of the remaining exhibits
listed below upon payment of a fee of 10 cents per page. Please
remit the proper amount with your request to:
Secretary
Reynolds Metals Company
P.O. Box 27003
Richmond, Virginia 23261-7003
Exhibits have the following number of pages:
EXHIBIT 3.1 87 EXHIBIT 10.14 2
EXHIBIT 3.2 21 EXHIBIT 10.15 1
EXHIBIT 4.1 71 EXHIBIT 10.16 1
EXHIBIT 4.2 16 EXHIBIT 10.17 4
EXHIBIT 4.3 165 EXHIBIT 10.18 3
EXHIBIT 4.4 6 EXHIBIT 10.19 3
EXHIBIT 4.5 74 EXHIBIT 10.20 3
EXHIBIT 4.6 2 EXHIBIT 10.21 3
EXHIBIT 4.7 2 EXHIBIT 10.22 2
EXHIBIT 4.8 2 EXHIBIT 10.23 1
EXHIBIT 4.9 2 EXHIBIT 10.24 10
EXHIBIT 4.10 10 EXHIBIT 10.25 10
EXHIBIT 4.11 14 EXHIBIT 10.26 13
EXHIBIT 4.12 9 EXHIBIT 10.27 6
EXHIBIT 4.13 36 EXHIBIT 10.28 2
EXHIBIT 4.14 24 EXHIBIT 10.29 2
EXHIBIT 4.15 18 EXHIBIT 10.30 1
EXHIBIT 4.16 24 EXHIBIT 10.31 3
EXHIBIT 4.17 89 EXHIBIT 10.32 3
EXHIBIT 4.18 7 EXHIBIT 10.33 2
EXHIBIT 4.19 12 EXHIBIT 10.34 10
EXHIBIT 10.1 21 EXHIBIT 10.35 10
EXHIBIT 10.2 16 EXHIBIT 10.35 10
EXHIBIT 10.3 19 EXHIBIT 10.37 10
EXHIBIT 10.4 7 EXHIBIT 10.38 1
EXHIBIT 10.5 2 EXHIBIT 10.39 2
EXHIBIT 10.6 7 EXHIBIT 10.40 5
EXHIBIT 10.7 6 EXHIBIT 10.41 9
EXHIBIT 10.8 10 EXHIBIT 10.42 1
EXHIBIT 10.9 14 EXHIBIT 10.43 1
EXHIBIT 10.10 7 EXHIBIT 21 1
EXHIBIT 10.11 7 EXHIBIT 23 1
EXHIBIT 10.12 12 EXHIBIT 24 31
EXHIBIT 10.13 13 EXHIBIT 27 1
TABLE OF CONTENTS
PART I
ITEM PAGE
1. BUSINESS................................................ 1
GENERAL............................................... 1
COMPETITION........................................... 5
RAW MATERIALS......................................... 5
ALUMINUM PRODUCTION................................... 6
FABRICATING OPERATIONS................................ 7
ENERGY................................................ 9
ENVIRONMENTAL COMPLIANCE.............................. 10
RESEARCH AND DEVELOPMENT.............................. 11
EMPLOYEES............................................. 12
2. PROPERTIES.............................................. 15
3. LEGAL PROCEEDINGS....................................... 18
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..... 18
4A. EXECUTIVE OFFICERS OF THE REGISTRANT.................... 19
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS..................................... 21
6. SELECTED FINANCIAL DATA................................. 22
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................... 23
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............. 35
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.................. 56
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...... 56
11. EXECUTIVE COMPENSATION.................................. 56
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.......................................... 56
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......... 56
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K............................................. 57
PART I
Item 1. BUSINESS
Reynolds Metals Company (the "Registrant") was incorporated in
1928 under the laws of the State of Delaware. In this report,
"Reynolds" and "Company" each means the Registrant and its
consolidated subsidiaries unless otherwise indicated.
GENERAL
Nature of Operations
- - --------------------
Reynolds is a leading global aluminum and packaging company.
Reynolds serves global markets as a supplier and recycler of
aluminum and other products, with its core business being as a
vertically integrated producer of a wide variety of value-added
aluminum products. Reynolds produces alumina, carbon products
and primary and reclaimed aluminum, principally to supply the
needs of its fabricating operations. These fabricating
operations produce aluminum foil, sheet, plate, beverage cans,
extruded products (including heat exchanger tubing, drive shafts,
bumpers and window systems), flexible packaging and wheels, among
other items. Reynolds also produces a broad range of plastic
products, including film, bags, containers and lids, for consumer
products, foodservice and packaging uses. The Company markets an
extensive line of consumer products under the Reynolds brand
name, including the well-known Reynolds Wrap aluminum foil.
Reynolds' largest market for its products is the packaging and
containers market, which includes consumer products. The Company
also is engaged in the distribution of aluminum and stainless
steel and other non-aluminum industrial products to a variety of
markets.
To better describe the nature of its operations, Reynolds has
separated its vertically integrated operations into two groups --
(1) Finished Products and Other Sales and (2) Production and
Processing.
Finished Products and Other Sales includes:
- - - the manufacture and distribution of various finished
aluminum products, such as beverage cans; containers; flexible
packaging products; foodservice and household foils (including
Reynolds Wrap); laminated and printed foil; and aluminum building
products;
- - - the distribution of aluminum and stainless steel and other
non-aluminum industrial products; and
- - - the manufacture and sale of plastic bags and food wraps (for
example, Reynolds Plastic Wrap, Reynolds Crystal Color Plastic
Wrap, Reynolds Oven Bags and Presto disposer bags); plastic
lidding and container products; plastic film packaging; Reynolds
Freezer Paper; Reynolds baking cups; Reynolds Cut-Rite wax paper
and wax paper sandwich bags; composite building products;
printing cylinders; plates and engravings for the rotogravure,
flexographic and lithographic printing industries; and
flexographic printed film and film laminations.
Production and Processing includes:
- - - the refining of bauxite into alumina, calcination of
petroleum coke and production of prebaked carbon anodes (all of
such activities being vertically integrated with aluminum
production and processing plants);
- - - the production and sale of primary and reclaimed aluminum;
- - - the production and sale of a wide range of semifinished
aluminum mill products, including flat rolled products (e.g.,
aluminum can sheet and machined plate); extruded and drawn
products (such as heat exchanger tubing, drive shafts and
bumpers); cast products (wheels, for example); and other
products; and
- - - the sale of non-aluminum products, technology and various
licensing, engineering and other services related to the
production and processing of aluminum.
Recent Developments
- - -------------------
In April 1996, Reynolds acquired an interest in an operation in
China that produces aluminum foil and extrusions. The operation,
Bohai Aluminium Industries, Ltd., runs a fabricating facility 180
miles east of Beijing. The facility manufactures aluminum foil
primarily for the food, pharmaceutical and tobacco industries,
and extrusions for the automotive and construction products
markets.
In June 1996, Reynolds announced plans to build a $34 million
facility in Lebanon, Virginia to manufacture aluminum wheels.
The new facility, Reynolds' second U.S. wheel plant, features a
manufacturing process that combines Reynolds' computer-
controlled, flow-formed casting technology with forging to
produce lightweight wheels with added styling flexibility. The
Company expects to start production at the 55,000-square-foot
facility in the second quarter of 1997.
Reynolds closed its aluminum beverage can manufacturing plant in
Houston, Texas in December 1996. Continued operations at the
Houston plant would have been uneconomical because of its high
costs, lack of a local customer base and modernizations and
productivity improvements at other Reynolds facilities.
In February 1997, Reynolds and Philip Environmental, Inc.
announced they have signed a letter of intent for the purchase by
Philip of Reynolds' aluminum reclamation plant in Chesterfield
County, Virginia. The plant is a secondary recycling plant that
processes scrap aluminum into a deoxidizing agent used by the
steel industry. The transaction, which is subject to certain
conditions, is expected to close in the second quarter of 1997.
Reynolds announced in March 1997 that it has signed a letter of
intent for the William L. Bonnell subsidiary of Tredegar
Industries to buy Reynolds' aluminum extrusion plant in El Campo,
Texas. The plant produces standard and specialty extrusions for
various markets and performs fabricating operations required by
customers. The transaction, which is subject to certain
conditions, is expected to close in the second quarter of 1997.
Also in March 1997, Reynolds concluded the sale of its
residential construction products operations in the U.S. to
AmeriMark Building Products, Inc. Included in the sale were
Reynolds' construction products plants located in Ashville, Ohio,
Bourbon, Indiana and Lynchburg, Virginia; the manufactured
housing operations at its Eastman, Georgia, facility; a plant in
Chesterfield County, Virginia that supplies aluminum building
sheet to the construction industry; and 54 service centers.
Reynolds has retained the Reynobond aluminum composite operations
at its Eastman facility.
Net Sales and Shipments; Principal Markets
- - ------------------------------------------
Table 1 shows information on shipments and net sales by classes
of similar products. Net sales are in millions of dollars;
shipments are in thousands of metric tons.
<PAGE>
<TABLE>
TABLE 1
Net Sales and Shipments
<CAPTION>
1996 1995 1994
------------------------------------------------------------------
Net Net Net
Shipments Sales Shipments Sales Shipments Sales
--------- ----- --------- ------ --------- -----
<S> <C> <C> <C> <C> <C> <C>
Finished Products and Other Sales
- - ---------------------------------
Packaging and containers
Aluminum 355 $1,850 368 $1,871 359 $1,583
Nonaluminum 603 556 529
Other aluminum 163 552 163 580 151 449
Other nonaluminum 533 528 479
------------------------------------------------------------------
518 3,538 531 3,535 510 3,040
------------------------------------------------------------------
Production and Processing
- - -------------------------
Primary aluminum 386 634 346 684 277 440
Sheet and plate 381 1,168 409 1,350 418 1,003
Extrusions 204 706 200 765 211 627
Other aluminum 164 481 179 494 157 391
Other nonaluminum 445 385 378
------------------------------------------------------------------
1,135 3,434 1,134 3,678 1,063 2,839
------------------------------------------------------------------
Total 1,653 $6,972 1,665 $7,213 1,573 $5,879
==================================================================
Average realized price per pound:
- - ---------------------------------
Fabricated aluminum products $1.79 $1.84 $1.48
Primary aluminum 0.74 0.90 0.72
</TABLE>
<PAGE>
Financial information relating to Reynolds' operations and
identifiable assets by major operating and geographic areas is
presented in Note 12 to the consolidated financial statements in
Item 8 of this report.
Reynolds generally sells its products to producers and
distributors of industrial and consumer products in various
markets. Tables 2 and 3 show information on sales of products by
principal geographic and business markets.
<TABLE>
TABLE 2
Principal Geographic Markets
<CAPTION>
Approximate
Percentage of Sales
----------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
United States 78% 77% 77%
Canada 7 7 6
Other (Principally Europe) 15 16 17
---- ---- ----
Total 100% 100% 100%
</TABLE>
<TABLE>
TABLE 3
Principal Business Markets
<CAPTION>
Approximate
Percentage of Sales
---------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Packaging and Containers 44% 44% 45%
Automotive and Transportation 13 13 12
Building and Construction* 13 13 13
Distributors and Fabricators 12 13 13
Other 18 17 17
---- ---- ----
Total 100% 100% 100%
_______________________
*Reynolds sold its residential construction products operations
in the U.S. in March 1997. See "General-Recent Developments".
</TABLE>
COMPETITION
Reynolds' principal competitors in North American and worldwide
sales of products derived from primary aluminum are ten other
domestic companies, a Canadian company and other foreign
producers. Reynolds and many other companies produce reclaimed
aluminum.
In the sale of semifinished and finished products, Reynolds
competes with (i) other producers of primary and reclaimed
aluminum, which are also engaged in fabrication, (ii) other
fabricators of aluminum and other products, (iii) other producers
of plastic products and (iv) metals service center companies
engaged in the distribution of aluminum and other products.
Reynolds' principal competitors in Europe are seven major
multinational producers and a number of smaller European
producers of aluminum semifabricated products. In the aluminum
beverage can business, Reynolds competes worldwide with four
major producers and a number of smaller ones. Aluminum and
related products compete with various products, including those
made of iron, steel, copper, zinc, tin, titanium, lead, glass,
wood, plastic, magnesium and paper. Plastic products compete
with products made of glass, aluminum, steel, paper, wood and
ceramics, among others. Competition is based upon price, quality
and service.
RAW MATERIALS
Bauxite, the principal raw material used in the production of
aluminum, is refined into alumina, which is then reduced by an
electrolytic process into primary aluminum.
Most of Reynolds' bauxite requirements and a portion of its
alumina requirements are met from sources outside the United
States.
Reynolds has long-term arrangements to obtain bauxite at
negotiated prices from sources in Australia, Brazil, Guinea,
Guyana and Jamaica. Reynolds also has an arrangement with the
U.S. government under which Reynolds has agreed to buy at a
negotiated price an aggregate of approximately 600,000 long dry
tons of Jamaican bauxite stored next to Reynolds' Sherwin alumina
plant near Corpus Christi, Texas, for the period 1997 through
1998.
Reynolds refines bauxite into alumina at its Sherwin alumina
plant. Reynolds also acquires alumina from two joint ventures in
which it has interests, one located in Western Australia, known
as the Worsley Joint Venture ("Worsley"), and the other located
in Stade, Germany, known as Aluminium Oxid Stade ("Stade"). See
Table 4 under this Item and the discussion of Worsley under
"Australia". In addition, Reynolds has a long-term third-party
arrangement to obtain Australian alumina at a negotiated price
and another third-party arrangement under which it will buy
approximately 120,000 metric tons of alumina at a negotiated
price through 1998.
The Company adjusts purchases of bauxite and production of
alumina from time to time in response to changes in demand for
primary aluminum and other factors. Reynolds has reduced
production at its Sherwin plant in connection with the
curtailment of operations at its U.S. primary aluminum production
plants. See "Aluminum Production". Reynolds restarted the idle
alumina capacity at the Sherwin plant late in 1995 due to strong
demand in the alumina market, but again temporarily curtailed 15%
of the plant's capacity in the third quarter of 1996 due to
deteriorating market conditions.
Australia
Worsley has a rated capacity of 1,700,000 metric tons of
alumina per year (expandable to 3,200,000 metric tons per
year). Worsley has proven bauxite reserves sufficient to
operate the alumina plant at its rated capacity (taking into
account future expansions to increase rated capacity to up
to 3,200,000 metric tons per year) for at least the next 35
years. The joint venture has no specified termination date.
Australia -- continued
Reynolds has a long-term purchase arrangement under which it
may buy from a third party an aggregate of approximately
18,800,000 dry metric tons of Australian bauxite through
2021.
Reynolds has a long-term purchase arrangement under which it
will buy from a third party an aggregate of approximately
480,000 metric tons of Australian alumina through 2000.
Brazil
Reynolds and various other companies are participants in the
Trombetas bauxite mining project in Brazil. Reynolds has a
5% equity interest in the project and has agreed to buy an
aggregate of approximately 1,000,000 dry metric tons of
Brazilian bauxite from the project for the period 1997
through 1999.
Reynolds also maintains an interest in other, undeveloped
bauxite deposits in Brazil.
Guinea
Reynolds owns a 6% interest in Halco (Mining), Inc.
("Halco"). Halco owns 51% and the Guinean government owns
49% of Compagnie des Bauxites de Guinee ("CBG"), which has
the exclusive right through 2038 to develop and mine bauxite
in a 10,000 square-mile area in northwestern Guinea.
Reynolds has a bauxite purchase contract with CBG which will
provide Reynolds with an aggregate of approximately
7,550,000 dry metric tons of Guinean bauxite for the period
1997 through 2011.
Guyana
Reynolds and the Guyanese government each owns a 50%
interest in a bauxite mining project in the Berbice region
of Guyana. Reynolds has a bauxite purchase contract running
through 1998 under which it will buy approximately 1,200,000
dry metric tons of Guyanese bauxite from the project in
1997. The parties will agree upon quantities to be
purchased in 1998 at the beginning of the contract year.
Jamaica
Reynolds has a purchase arrangement under which it will buy
from a third party an aggregate of up to 9,000,000 dry
metric tons of Jamaican bauxite for the period 1997 through
2001.
Reynolds' present sources of bauxite and alumina are more than
adequate to meet the forecasted requirements of its primary
aluminum production operations for the foreseeable future. To
utilize excess alumina capacity, Reynolds enters into third-party
sales arrangements. Reynolds also enters into arrangements to
sell bauxite in excess of its needs to third parties.
Other materials used in making aluminum are either purchased from
others or supplied from Reynolds' carbon products plants in Baton
Rouge and Lake Charles, Louisiana.
ALUMINUM PRODUCTION
Reynolds owns and operates three primary aluminum production
plants in the United States and one located at Baie Comeau,
Quebec, Canada. Reynolds is also entitled to a share of the
primary aluminum produced at three joint ventures in which it
participates, one located in Quebec, Canada, known as the
Becancour joint venture ("Becancour"), one located in Hamburg,
Germany, known as Hamburger Aluminium-Werk GmbH ("Hamburg"), and
the third in Ghana, Africa, known as Volta Aluminium Company
Limited ("Ghana"). See Table 5 (and related notes) under this
Item for information on these primary aluminum production plants.
Reynolds also buys primary aluminum on the open market.
Production at the primary aluminum plants listed in Table 5 can
vary due to a number of factors, including changes in worldwide
supply and demand. Due to the worldwide aluminum supply-demand
imbalance, Reynolds has idled a total of 209,000 metric tons, or
19%, of its 1,094,000 metric tons of primary aluminum production
capacity. Reynolds temporarily shut down 88,000 metric tons of
primary aluminum production capacity at its Massena, New York
(41,000 metric tons) and Longview, Washington (47,000 metric
tons) plants, effective in the fourth quarter of 1993, and its
Troutdale, Oregon plant, with a capacity of 121,000 metric tons,
has been idle since 1991. At December 31, 1996, the U.S. plants
listed in Table 5 were operating collectively at a rate of 53% of
capacity; Ghana (in which Reynolds has a 10% equity interest),
where production has been curtailed by drought (see "Energy")
since September 1994, was operating at 70% of capacity; and all
other plants listed in Table 5 were operating at full capacity.
See Table 6 under this Item. In order to balance its alumina
supply system, Reynolds has temporarily reduced production at its
Sherwin alumina plant in Texas in connection with the
curtailments. See "Raw Materials".
Reynolds has an 8% equity interest in C.V.G. Aluminio del Caroni,
S.A., which produces primary aluminum in Venezuela.
Reynolds has agreed to acquire a 10% equity interest in the
Aluminum Smelter Company of Nigeria (ALSCON), with the Nigerian
government and private interests holding the remaining equity.
As part of the arrangement, Reynolds will buy at market-related
prices 140,000 metric tons of primary aluminum annually from a
180,000 metric ton smelter ALSCON is building in Nigeria.
Reynolds produces reclaimed aluminum from aluminum scrap at its
facilities located in Bellwood, Virginia and Sheffield, Alabama,
and at a facility in which it has a 99.8% equity interest located
in Isernia, Italy. See Table 6 under this Item. Reynolds
obtains scrap for the U.S. facilities through its nationwide
recycling network, other scrap purchases and its manufacturing
operations. Scrap for the Italian facility is obtained through
scrap purchases. In 1996, Reynolds obtained approximately
308,010 metric tons of recycled aluminum from its recycling
network and other scrap purchases.
In response to a regulation proposed by the U.S. Environmental
Protection Agency (the "EPA") that would require treatment of
spent potliner to reduce its hazardous properties, Reynolds built
a new facility in Arkansas to convert spent potliner from
Reynolds' and other producers' North American aluminum smelting
operations into an environmentally safe material with potential
for recycling. The facility began operations in 1993 and has the
capacity to treat an estimated 120,000 short tons of spent
potliner annually. The EPA has delayed implementing a final
regulation requiring treatment of spent potliner pending its
resolution of questions concerning the effectiveness of the
process Reynolds uses at the facility. Reynolds is currently
developing process modifications and analytical procedures that
are intended to address EPA's concerns. The facility currently
is operating at 50% of capacity.
FABRICATING OPERATIONS
Reynolds' semifinished and finished aluminum products and non-
aluminum products are produced at numerous domestic and foreign
plants wholly or partly owned by Reynolds. These plants are
included in Table 7 under Item 2 of this report. The annual
capacity of these plants depends upon the variety and type of
products manufactured.
With a view to better serving its principal business markets,
Reynolds has over the past three years continued to upgrade and
modernize its manufacturing facilities, particularly facilities
for production of such value-added products as cans, can sheet,
packaging, household foil and components for the transportation
industry. Specific actions the Company has taken include the
following:
Packaging and Containers
- - ------------------------
- - - acquired in 1994 assets to expand its printing cylinder and
engraving business and, in 1995, acquired Wilson Engraving
Company Inc., strengthening the Company's ability to meet the
needs of flexographic and lithographic printers and extending the
Company's geographic reach by adding plants in Louisiana and
Texas;
- - - began in 1995 an expansion at its Grottoes, Virginia
plastics manufacturing plant that will increase capacity by
approximately 20%;
- - - began in 1995 a major, multi-year capital program to build a
new aluminum foil rolling mill at its Louisville, Kentucky plant
that will increase annual plant capacity by about 25%;
- - - acquired in 1995 a laminated foil plant in Louisville,
Kentucky, strengthening the Company's ability to serve the
flexible packaging needs of the tobacco and pharmaceutical
industries;
- - - acquired in 1995 the flexible packaging manufacturing
operations of Hargro Flexible Packaging Corp. in Boyertown,
Pennsylvania, establishing a major position in flexographic
printing and increasing the Company's capacity to produce printed
film and film laminations;
- - - developed new types of, and applications for, aluminum cans;
- - - acquired in 1994 Bev-Pak, Inc. and its aluminum can and end
manufacturing facility in Monticello, Indiana, increasing the
Company's U.S. aluminum can- and end-making capacity by
approximately 15% and 20%, respectively;
- - - completed in 1994 a 70% expansion of its Tampa can plant;
- - - participated in a number of jointly-owned aluminum can
facilities, (i) completing in 1995 an expansion of a can plant in
Brazil and beginning operations at another can plant in Brazil
and one in Chile; (ii) beginning operations in 1996 at can plants
in Brazil (the third in that country) and Argentina and, in the
same year, putting into operation two production lines at a new
can end plant in Brazil and beginning construction of a fourth
can plant in that country; and (iii) starting up in 1997 a can
plant in Saudi Arabia;
- - - substantially completed in 1996 modernization of its
Torrance can plant, replacing six slow-speed production lines
with three high-speed lines with a marginal increase in capacity;
- - - commercialized in 1996 large-opening ends in various
diameters for the enhanced and expanded use of aluminum can
packaging;
- - - substantially increased marketing support behind its
Reynolds Wrap aluminum foil and Reynolds Plastic Wrap brands;
- - - acquired in 1995 the Canadian Cut-Rite brand from Scott
Paper Company, and other wax paper brands from Scott Paper
Company's Canadian affiliate, Scott Paper Limited, enabling the
Company to market Cut-Rite wax paper throughout Canada, a key
market for Reynolds consumer products;
- - - introduced in 1995 a 50-foot Heavy Duty line extension of
its Reynolds Wrap brand, two printed plastic wrap products and
several new Reynolds baking cup products;
- - - in 1995 expanded its consumer products business in Latin
America, the Middle East and the Far East; and
Packaging and Containers -- continued
- - ------------------------
- - - acquired in 1996 (i) selected assets of a Canadian company
engaged in spooling and packaging aluminum foil products and
paper products and (ii) James River Paper Company, Inc.'s retail
Paper Maid and 20 Below product lines, consisting of bake cup,
freezer paper and kitchen parchment businesses.
Automotive and Transportation
- - -----------------------------
- - - restructured in 1994 its McCook plant in Illinois, exiting
common alloy sheet products and emphasizing plate and automotive
sheet;
- - - began production in 1994 of aluminum automotive extruded
components at a new fabricating plant in Auburn, Indiana and
completed an expansion of the plant in 1996;
- - - commercialized in 1995, for aerospace applications, aluminum-
lithium plate products manufactured at its McCook plant in
Illinois and aluminum-lithium extrusions manufactured by its
Extrusion Division;
- - - began manufacturing in 1995 aluminum wheels at a facility in
Beloit, Wisconsin, which it purchased in 1994 and modified and
equipped for that purpose;
- - - purchased in 1995 the aluminum extrusion operations of AMAG
Austria's wholly owned subsidiary, Wexal International Ltd., in
Ireland; and
- - - began construction in 1996 of a facility in Lebanon,
Virginia to manufacture aluminum wheels using a manufacturing
process that combines Reynolds' computer-controlled, flow-formed
casting technology with forging to produce lightweight wheels
with added styling flexibility.
Distributors and Fabricators
- - ----------------------------
- - - acquired in 1994 the metals distribution business of Prime
Metals, Inc., allowing the Company to broaden the geographic
processing and service capabilities of its Reynolds Aluminum
Supply Company metals distribution business.
ENERGY
Reynolds consumes substantial amounts of energy in refining
bauxite into alumina and in reducing alumina to aluminum.
Alumina is produced by a process requiring high temperatures at
various stages. These temperatures are achieved by burning
natural gas or coal at the alumina plants. Natural gas and coal
are purchased under long- and short-term contracts. See Table 4
under this Item.
Primary aluminum is produced from alumina by an electrolytic
process requiring large amounts of electric power. Electricity
required for Reynolds' primary aluminum production plants
generally is purchased under long-term contracts. See Table 5
under this Item.
Reynolds expects generally to meet its energy requirements for
primary aluminum production for the foreseeable future under long-
term contracts. Under these contracts, however, Reynolds may
experience shortages of interruptible power from time to time at
its New York and Ghana reduction plants. That portion of power
supplied to the New York plant that is interruptible
(approximately 15%) can be offset with purchased power.
Production at Ghana is dependent on hydroelectric power and has
from time to time been curtailed by drought.
Rates for electricity charged by the Bonneville Power
Administration ("BPA"), which serves the Company's Troutdale,
Oregon and Longview, Washington primary aluminum production
plants, are established under a new five-year contract that runs
through September 2001. The new contract establishes a fixed
rate which is 16% less than rates previously in effect. These
rates are, however, subject to review and approval in a process
being conducted by the Federal Energy Regulatory Commission
("FERC"). Third parties are challenging the contract in the U.S.
Court of Appeals for the Ninth Circuit, and the contract's rates
are subject to further appeal in the courts by third parties
following FERC review. Should the new contract be rejected in
any of these processes, the Company could renegotiate with BPA or
seek service from third parties.
ENVIRONMENTAL COMPLIANCE
Reynolds has spent and will spend substantial capital and
operating amounts relating to ongoing compliance with
environmental laws. The area of environmental management,
including environmental controls, continues to be in a state of
scientific, technological and regulatory evolution.
Consequently, it is not possible for Reynolds to predict
accurately the total expenditures necessary to meet all future
environmental requirements. Reynolds expects, however, to add or
modify environmental control facilities at a number of its
worldwide locations to meet existing and certain anticipated
regulatory requirements, including regulations to be implemented
under the Clean Air Act Amendments of 1990 (the "Clean Air Act").
Based on information currently available, Reynolds estimates that
compliance with the Clean Air Act's hazardous air pollutant
standards would require in excess of $250 million of capital
expenditures (including a portion of the expenditures at
Reynolds' Massena plant referred to below), primarily at
Reynolds' U.S. primary aluminum production plants. The ultimate
effect of the Clean Air Act on such plants and Reynolds' other
operations (and the actual amount of any such capital
expenditures) will depend on how the Clean Air Act is interpreted
and implemented pursuant to regulations that are currently being
developed and on such additional factors as the evolution of
environmental control technologies and the economic viability of
such operations at the time. Based on an August 1995 memorandum
of understanding with the State of New York to resolve
environmental issues at its Massena, New York primary aluminum
production plant, Reynolds has undertaken a five-year capital
spending program of an estimated $185 million to modernize the
Massena plant and significantly reduce air emissions from the
plant. Pursuant to the memorandum of understanding, Reynolds is
accelerating certain expenditures believed necessary to achieve
compliance with the Clean Air Act's proposed Maximum Achievable
Control Technology standards.
Capital expenditures for equipment designed for environmental
control purposes were approximately $34 million in 1994, $39
million in 1995 and $24 million in 1996. The portion of such
amounts expended in the United States was $15 million in 1994,
$18 million in 1995 and $16 million in 1996. Reynolds estimates
that annual capital expenditures for environmental control
facilities will be approximately $65 million in 1997, $105
million in 1998 and $70 million in 1999. The majority of these
estimated expenditures are associated with the capital spending
program referred to above at Reynolds' Massena plant. Future
capital expenditures for environmental control facilities cannot
be predicted with accuracy for the reasons cited above; however,
one may expect that environmental control standards will become
increasingly stringent and that the expenditures necessary to
comply with them could increase substantially.
Reynolds has been identified as a potentially responsible party
("PRP") and is involved in remedial investigations and remedial
actions under the Comprehensive Environmental Response,
Compensation and Liability Act ("Superfund") and similar state
laws regarding the past disposal of wastes at approximately 44
sites in the United States. Such statutes may impose joint and
several liability for the costs of such remedial investigations
and actions on the entities that arranged for disposal of the
wastes, the waste transporters that selected the disposal sites
and the owners and operators of such sites.
Responsible parties (or any one of them) may be required to bear
all of such costs regardless of fault, legality of the original
disposal or ownership of the disposal site. In addition,
Reynolds is investigating possible environmental contamination,
which may also require remedial action, at certain of its present
and former United States manufacturing facilities, including
contamination by polychlorinated biphenyls ("PCBs") at its
Massena, New York primary aluminum production plant which
requires remediation. In 1994, the U.S. Environmental Protection
Agency (the "EPA") added Reynolds' Troutdale, Oregon primary
aluminum production plant to the National Priorities List of
Superfund sites. The Company is cooperating with the EPA and,
under a September 1995 consent order, is working with the EPA in
investigating potential environmental contamination at the
Troutdale site and to promote more efficient cleanup at the site.
At most of the 44 sites referred to above where Reynolds has been
identified as a PRP, it is one of many PRPs, and its share of the
anticipated cleanup costs is expected to be small. With respect
to certain other sites (not included in the foregoing number)
where Reynolds has been identified as a PRP, Reynolds has either
fully or substantially settled or resolved actions related to
such sites at minimal cost or believes that it has no
responsibility with regard to them. Reynolds has been notified
that it may be a PRP at certain sites in addition to those
already referred to in this paragraph.
Reynolds' policy is to accrue remediation costs when it is
probable that remedial efforts will be required and the related
costs can be reasonably estimated. On a quarterly basis,
Reynolds evaluates the status of all sites, develops or revises
estimates of costs to satisfy known remediation requirements and
adjusts its accruals accordingly. At December 31, 1996, the
accrual for known remediation requirements was $197 million.
This amount reflects management's best estimate of Reynolds'
ultimate liability for such costs. Potential insurance
recoveries are uncertain and therefore have not been considered.
As a result of such factors as the developing nature of
administrative standards promulgated under Superfund and other
environmental laws; the unavailability of information regarding
the condition of potential sites; the lack of standards and
information for use in the apportionment of remedial
responsibilities; the numerous choices and costs associated with
diverse technologies that may be used in remedial actions at such
sites; the availability of insurance coverage; the ability to
recover indemnification or contribution from third parties; and
the time periods over which eventual remediation may occur,
estimated costs for future environmental compliance and
remediation are necessarily imprecise. It is not possible to
predict the amount or timing of future costs of environmental
remediation which may subsequently be determined. Based on
information currently available, it is management's opinion that
such future costs are not likely to have a material adverse
effect on Reynolds' competitive or financial position or its
ongoing results of operations. However, such costs could be
material to future quarterly or annual results of operations.
See the discussion under "Environmental" in Item 7, and under
Note 11 to the consolidated financial statements in Item 8, of
this report regarding the Company's anticipated costs of
environmental compliance.
RESEARCH AND DEVELOPMENT
Reynolds engages in a continuous program of basic and applied
research and development. This program deals with new and
improved materials, products, processes and related environmental
compliance technologies. It includes development and expansion
of products and markets that benefit from aluminum's light
weight, strength, resistance to corrosion, ease of fabrication,
high heat and electrical conductivity, recyclability and other
properties. Materials and core competencies involving aluminum,
ceramics, composites and various polymers and their processing,
fabrication and applications are also included in the scope of
Reynolds' research and development activity. Expenditures for
Reynolds-sponsored research and development activities were
approximately $38 million in 1994, $43 million in 1995, and $49
million in 1996.
In January 1996, Reynolds completed the purchase of Brown &
Williamson Tobacco Corp.'s administrative and research and
development facilities in Enon, Virginia, near the Company's
headquarters in Richmond, Virginia. Reynolds is consolidating
four Richmond-area research and development facilities and its
corporate engineering group at the complex. The new Corporate
Technology Center consists of two buildings that Reynolds has
modified to meet its needs for developing and testing new and
improved materials, products and processes and for providing
the full array of corporate engineering services, and a new
building Reynolds built to house an experimental casting operation.
Reynolds owns numerous patents relating to its products and
processes based predominantly on its in-house research and
development activities. The patents owned by Reynolds, or under
which it is licensed, generally concern particular products or
manufacturing techniques. Reynolds' business is not, however,
materially dependent on patents.
EMPLOYEES
At December 31, 1996, Reynolds had approximately 29,000
employees.
In the second quarter of 1996, Reynolds and the United
Steelworkers of America and the Aluminum, Brick and Glass Workers
International Union agreed to new six-year labor contracts. The
contracts involve approximately 7,000 employees. Major
provisions of the new contracts include wage increases of $1.15
an hour over the first five years (plus incremental increases in
1997 and 1999) and enhanced pension and other benefits. At the
end of the fifth year, the economic provisions of the contracts
will be reopened. If agreement cannot be reached, the economic
provisions will be submitted to arbitration for one additional
year. Reynolds and the unions also agreed to work cooperatively
on customer requirements, business objectives and shareholder and
union interests. In addition, the contracts contain broad, new
provisions for employee safety, job security and employee
participation in the work environment.
In January 1997, the Aluminum, Brick and Glass Workers
International Union merged with the United Steelworkers of
America. Reynolds does not expect the merger to have a material
impact on the Company.
<TABLE>
TABLE 4
Alumina Plants and Energy Supply
<CAPTION>
Rated
Capacity(a) at Principal
December 31, 1996 Energy Energy Contract
Plant Metric Tons Purchased(b) Expiration Date
- - ----- ----------------- ------------ ---------------
<S> <C> <C> <C>
Corpus Christi, Texas 1,600,000(c) Natural Gas (d)
Worsley, Australia 952,000(e) Coal 2002
Stade, Germany 375,000(e) Natural Gas 2008
</TABLE>
<TABLE>
TABLE 5
Primary Aluminum Production Plants and Energy Supply
<CAPTION>
Rated
Capacity(a) at Principal
December 31, 1996 Energy Energy Contract
Plant Metric Tons Purchased(b) Expiration Date
- - ----- ----------------- ------------ ---------------
<S> <C> <C> <C>
Baie Comeau, Canada 400,000 Electricity 2011 and 2014
Longview, Washington 204,000(f) Electricity 2001
Massena, New York 123,000(f) Electricity 2013(g)
Troutdale, Oregon 121,000(f) Electricity 2001
Becancour, Canada 186,000(h) Electricity 2014
Hamburg, Germany 40,000(h) Electricity 2000
Ghana, Africa 20,000(h) Electricity 1997(i)
</TABLE>
<TABLE>
TABLE 6
Aluminum Capacity and Production
(Metric Tons)
<CAPTION>
Primary Aluminum(j) Reclaimed Aluminum(k)
------------------------------- -------------------------
Rated Rated
Year Capacity(a),(f) Production(f) Capacity(a) Production
- - ---- --------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
1994 998,000 792,000 491,000 409,000
1995 1,094,000(h) 814,500 485,500 396,500
1996 1,094,000(h) 893,500 492,600 401,500
</TABLE>
NOTES TO TABLES 4, 5, and 6.
(a) Ratings are estimates at the end of the period based on
designed capacity and normal operating efficiencies and do
not necessarily represent maximum possible production.
(b) See "Energy".
(c) In order to balance its alumina supply system, Reynolds has
reduced production at its Sherwin alumina plant near Corpus
Christi, Texas in connection with the curtailment of
operations at its U.S. primary aluminum plants. See
"Aluminum Production". Reynolds restarted the idle alumina
capacity at the Sherwin plant late in 1995 due to strong
demand in the alumina market, but again temporarily
curtailed 15% of the plant's capacity in the third quarter
of 1996 due to deteriorating market conditions.
(d) Approximately 25% of the plant's natural gas requirements is
purchased under a two-year contract, 25% is purchased under
a three-year contract and the remainder is purchased under
short-term contracts. The base term of the two-year
contract and three-year contract expires in October 1998 and
October 1999, respectively, but will extend from month to
month unless one of the parties terminates it.
(e) Reynolds is entitled to 56% of the production of Worsley and
50% of the production of Stade. Capacity figures reflect
Reynolds' share.
(f) Reynolds curtailed 70,500 metric tons of production at its
Troutdale primary aluminum plant in the third quarter of
1991 and the remainder of the plant's capacity in the fourth
quarter of 1991. The Troutdale plant remains idle.
Reynolds curtailed an aggregate of 88,000 metric tons of
primary aluminum production capacity at its Massena (41,000
metric tons) and Longview (47,000 metric tons) plants
effective in the fourth quarter of 1993. In October 1995,
Reynolds acquired an additional 24.95% interest in
Becancour, increasing Reynolds' share to 50%. At current
production levels, the acquisition provides Reynolds an
additional 93,000 metric tons of Becancour's annual primary
aluminum output for a total of 186,000 metric tons, and
increases its worldwide primary aluminum capacity to
1,094,000 metric tons per year. See "Aluminum Production".
(g) The power contract terminates in 2013, subject to earlier
termination by the supplier in 2003 if its federal license
for its hydroelectric project is not renewed.
(h) Reynolds is entitled to 50% of the production of Becancour,
33-1/3% of the production of Hamburg, and 10% of the
production of Ghana. Capacity figures reflect Reynolds'
share. Production at Ghana has been curtailed since
September 1994 by drought. See "Aluminum Production" and
"Energy". At December 31, 1996, Ghana was operating at 70%
of capacity.
(i) The power contract provides for a 20-year extension at the
option of the smelter owners.
(j) Production is from Reynolds' primary aluminum production
operations listed in Table 5.
(k) Production is from Reynolds' Bellwood, Virginia and
Sheffield, Alabama reclamation facilities, and the Isernia,
Italy reclamation facility, in which Reynolds has a 99.8%
equity interest.
Item 2. PROPERTIES
For information on the location and general nature of Reynolds'
principal domestic and foreign properties, see Item 1 of this
report. Table 7 lists as of February 15, 1997 Reynolds' wholly
owned domestic and foreign operations and shows the domestic and
foreign locations of operations in which Reynolds has interests.
Facilities that are under construction or for other reasons have
not begun production are not listed. The properties listed are
held in fee except as otherwise indicated. Properties held other
than in fee are not, individually or in the aggregate, material
to Reynolds' operations and the arrangements under which such
properties are held are not expected to limit their use.
Reynolds believes that its facilities are suitable and adequate
for its operations. With the exception of the Longview, Massena,
Troutdale and Ghana primary aluminum production plants, the
Sherwin alumina plant and the Arkansas spent potliner treatment
facility, as explained in Item 1, there is no significant surplus
or idle capacity at any of Reynolds' major manufacturing
facilities.
TABLE 7
Wholly Owned Operations
Manufacturing, Mining and Distribution
Alumina: Recycling:
------- ---------
Corpus Christi, Texas Recycling Plants and Centers (U.S.)(565)**
Malakoff, Texas
Calcined Coke: Reclamation:
------------- -----------
Baton Rouge, Louisiana Sheffield, Alabama (2)
Lake Charles, Louisiana Bellwood, Virginia#
Carbon Anodes: Mill Products***:
------------- ----------------
Lake Charles, Louisiana Sheffield, Alabama
McCook, Illinois
Primary Aluminum: Cap-de-la-Madeleine, Quebec, Canada
---------------- Hamburg, Germany##
Massena, New York Latina, Italy
Troutdale, Oregon
Longview, Washington
Baie Comeau, Quebec, Canada
Spent Potliner Treatment: Aluminum Beverage Cans:
------------------------ ----------------------
Gum Springs, Arkansas San Francisco, California
Torrance, California
Extruded Products: Tampa, Florida
----------------- Moultrie, Georgia
Auburn, Indiana Honolulu, Hawaii
Louisville, Kentucky Monticello, Indiana (cans and ends)
El Campo, Texas# Kansas City, Missouri
Ashland, Virginia* Middletown, New York
Bellwood, Virginia Reidsville, North Carolina (cans and ends)
Richmond Hill, Ontario, Canada Salisbury, North Carolina
Ste. Therese, Quebec, Canada Fort Worth, Texas
Nachrodt, Germany Seattle, Washington
Wexford, Ireland Milwaukee, Wisconsin
Harderwijk, Netherlands Rocklin, California (ends)
Lelystad, Netherlands Bristol, Virginia (ends)
Maracay, Venezuela Guayama, Puerto Rico
Powder and Paste: Printing Cylinders:
---------------- ------------------
Louisville, Kentucky Longmont, Colorado*
Atlanta, Georgia*
Electrical Rod: Clarksville, Indiana*
-------------- Louisville, Kentucky (2)
Becancour, Quebec, Canada Newport, Kentucky*
West Monroe, Louisiana
Foil Feed Stock: Battle Creek, Michigan*
--------------- St. Louis, Missouri
Hot Springs, Arkansas Fulton, New York*
Wilmington, North Carolina*
Packaging and Consumer Exton, Pennsylvania*
Products: Franklin, Tennessee*
---------------------- Dallas, Texas
Beacon Falls, Connecticut Richmond, Virginia (2)
Louisville, Kentucky (2) Ontario, Canada (2)
Mt. Vernon, Kentucky
Sparks, Nevada*
Boyertown, Pennsylvania
Downingtown, Pennsylvania Reynolds Aluminum Supply
Lewiston, Utah Company:
Bellwood, Virginia ------------------------
Grottoes, Virginia Service Centers (U.S.)(24)**
Richmond, Virginia Processing Centers (U.S.)(3)**
South Boston, Virginia
Appleton, Wisconsin (2) Research and Development
Little Chute, Wisconsin
Weyauwega, Wisconsin Richmond, Virginia:
Rexdale, Ontario, Canada* ------------------
Cap-de-la-Madeleine, Can Division Headquarters
Quebec, Canada Corporate Technology Center
Latina, Italy Packaging Technology
Building and Construction Corpus Christi, Texas:
Products***: ---------------------
------------------------- Alumina Technology
Eastman, Georgia
Weston, Ontario, Canada Sheffield, Alabama:
Merxheim, France* ------------------
Nachrodt, Germany Manufacturing Technology
Dublin, Ireland* Laboratory
Wexford, Ireland
Harderwijk, Netherlands
Lisburn, Northern Ireland*
Service Centers (Canada)(10)*
Wheels:
------
Beloit, Wisconsin
Ferrara, Italy
Can Machinery and Systems:
-------------------------
Richmond, Virginia
Other Operations
In Which Reynolds Has Interests
Argentina: Germany:
Aluminum cans, recycling Alumina, primary aluminum*
Australia: Ghana:
Bauxite, alumina Primary aluminum*
Belgium: Guinea:
Building products, extrusions Bauxite
Brazil: Guyana:
Bauxite, aluminum cans Bauxite*
and ends, recycling, reclamation
India:
Canada: Extrusions
Primary aluminum, electric
power generation, aluminum Italy:
wheels Reclamation
Chile: Russia:
Aluminum cans, recycling Foil
China: Spain:
Foil, extrusions Mill products, extrusions, foil,
packaging, printing cylinders
Colombia:
Mill products, extrusions, Venezuela:
foil Primary aluminum, mill products,
foil, aluminum cans and ends,
Egypt: recycling, aluminum wheels
Extrusions
____________________________
* Leased.
** Recycling Plants and Centers - 565 leased.
Reynolds Aluminum Supply Company Service Centers - 18 leased.
Reynolds Aluminum Supply Company Processing Centers - 1 leased.
*** In March 1997, Reynolds concluded the sale of its
residential construction products operations in the U.S. to
AmeriMark Building Products, Inc. Included in the sale were
Reynolds' construction products plants located in Ashville,
Ohio, Bourbon, Indiana and Lynchburg, Virginia; the
manufactured housing operations at its Eastman, Georgia,
facility; a Mill Products Division plant in Chesterfield
County, Virginia that supplies aluminum building sheet to
the construction industry; and 54 service centers.
# In February 1997, Reynolds and Philip Environmental, Inc.
announced they have signed a letter of intent for the purchase by
Philip of Reynolds' Bellwood aluminum reclamation plant.
Reynolds announced in March 1997 that it has signed a letter of
intent for the William L. Bonnell subsidiary of Tredegar
Industries to buy Reynolds' El Campo aluminum extrusion plant.
Both transactions, which are subject to certain conditions, are
expected to close in the second quarter of 1997.
## Held under an installment purchase arrangement.
The titles to Reynolds' various properties were not examined
specifically for this report.
Item 3. LEGAL PROCEEDINGS
On June 10, 1988, the Atlantic States Legal Foundation ("Atlantic
States") filed suit against the Registrant in the U.S. District
Court for the Western District of New York (the "Court") under
the "citizen suit" provision of the federal Clean Water Act. The
State of New York intervened in the case on December 1, 1989.
The suit involved the discharge of substances from the
Registrant's Massena, New York primary aluminum production plant.
An agreement of the parties to settle the suit for payments by
the Registrant aggregating $515,000, resolving claims for
penalties and other costs, was approved by the Court on May 12,
1992; however, the Court retained jurisdiction of the matter. In
a letter dated April 12, 1993, Atlantic States informed the
Registrant that it has withdrawn its waiver of enforcement,
citing violations at the Massena plant of interim effluent limits
contained in the settlement agreement and other effluent limit
violations.
The Registrant received from the U.S. Department of Justice on
August 29, 1994 a civil investigative demand relating to
production of primary aluminum. The Registrant is cooperating
with this inquiry and is confident that its conduct has been in
compliance with U.S. antitrust laws.
The Registrant received from the U.S. Department of Justice on
March 30, 1995 a civil investigative demand relating to the
pricing of aluminum can stock. The Justice Department advised
the Registrant on November 25, 1996 that this civil investigation
had been concluded and closed.
A private antitrust lawsuit styled Hammons v. Alcan Aluminum
Corp. et al., was filed in the Superior Court of California for
the County of Los Angeles on March 5, 1996 against the Registrant
and other aluminum producers. The lawsuit alleges a conspiracy
to reduce worldwide and U.S. aluminum production. Estimated
damages of approximately $26 billion were sought in the lawsuit,
which claims class action status. Defendants removed the case to
the U.S. District Court for the Central District of California
(the "District Court"). On July 1, 1996, the District Court
granted summary judgment for defendants. Plaintiff filed a
motion for reconsideration with the District Court, which was
denied on July 16, 1996. On July 18, 1996, plaintiff filed a
notice of appeal to the U.S. Court of Appeals for the Ninth
Circuit. As noted above, the Registrant is confident that its
conduct has been in compliance with the antitrust laws. The
Registrant has made, and will make, its decisions regarding
production levels independently.
In December 1995, an oil tank failed at the Registrant's Massena,
New York primary aluminum production plant, resulting in an oil
spill at the plant. The Registrant promptly reported the matter
to the New York Department of Environmental Conservation (the
"NYDEC"). On January 8, 1997, NYDEC notified the Registrant that
it is seeking a civil penalty of $120,000 in connection with the
matter for the Registrant's failure to comply with State tank
management regulations. The Registrant has responded to the
demand, stating that it believes the proposed penalty is
excessive under the circumstances.
Various other suits, claims and actions are pending against
Reynolds. In the opinion of Reynolds' management, after
consultation with legal counsel, disposition of these proceedings
and those referred to in the preceding paragraphs, either
individually or in the aggregate, will not have a material
adverse effect on Reynolds' competitive or financial position or
its ongoing results of operations. No assurance can be given,
however, that the disposition of one or more of such suits,
claims or actions in a particular reporting period will not be
material in relation to the reported results for such period.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Registrant's security
holders during the fourth quarter of 1996.
Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Registrant are as follows:
Name Age* Positions Held During Past Five Years
- - ---- ---- -------------------------------------
Jeremiah J. Sheehan 58 Chairman of the Board and Chief
Executive Officer since October 1996.
President and Chief Operating Officer
1994-1996. Executive Vice President,
Fabricated Products 1993-1994. Executive
Vice President, Consumer and Packaging
Products 1990-1993. Director since 1994.
Randolph N. Reynolds** 55 Vice Chairman and Executive Officer
since October 1996. Vice Chairman 1994-
1996. Executive Vice President,
International 1990-1994. President,
Reynolds International, Inc. ("RII"), a
subsidiary of the Company, since November
1980, and Chief Executive Officer of RII
since November 1981. Director since
1984.
J. Wilt Wagner 55 Vice Chairman and Executive Officer
since October 1996. Executive Vice
President, Raw Materials, Metals and
Industrial Products 1993-1996. Executive
Vice President, Fabricated Industrial
Products 1992-1993. Director since 1996.
Henry S. Savedge, Jr. 63 Executive Vice President and Chief
Financial Officer since May 1992. Vice
President, Finance 1990-1992. Director
since 1992.
D. Michael Jones 43 Senior Vice President and General
Counsel since October 1996. Vice
President, General Counsel and Secretary
1993-1996. Associate General Counsel and
Assistant Secretary 1990-1993.
James R. Aitken 62 Vice President since April 1994.
Executive Vice President, RII since March
1993. Vice President, Europe of RII and
President, Reynolds (Europe) Ltd., a
subsidiary of RII, 1987-1993.
Thomas P. Christino 57 Vice President, Flexible Packaging
Division since November 1993. Flexible
Packaging Division General Manager 1992-
1993.
Donald T. Cowles 49 Vice President and Reynolds Aluminum
Supply Company Division General Manager
since August 1995. Executive Vice
President, Human Resources and External
Affairs 1993-1995. Vice President,
General Counsel and Secretary 1989-1993.
Eugene M. Desvernine 55 Vice President since April 1994.
Executive Vice President, RII since March
1993. Vice President, Latin America of
RII 1982-1993.
Allen M. Earehart 54 Vice President, Controller since
April 1994. Controller 1993-1994.
Director, Corporate Accounting 1982-1993.
E. Jack Gates 55 Vice President, Raw Materials and
Carbon Products Division since April
1993. Raw Materials and Precious Metals
Division General Manager 1993. Reduction
Division General Manager 1990-1993.
Rodney E. Hanneman 60 Vice President, Quality Assurance
and Technology Operations since March
1985.
Paul S. Hayden 54 Vice President, Recycling Division
since April 1995. Recycling Division
General Manager 1991-1995.
Douglas M. Jerrold 46 Vice President, Tax Affairs since
April 1990.
John B. Kelzer 60 Vice President, Extrusion Division
since April 1993. Extrusion Division
General Manager 1990-1993.
William E. Leahey, Jr. 47 Vice President, Can Division since
April 1993. Can Division General Manager
1992-1993.
John M. Lowrie 56 Vice President, Consumer Products
Division since October 1988.
F. Robert Newman 53 Vice President, Human Resources
since October 1995. Corporate Director,
Human Resources 1993-1995. Corporate
Director, Industrial Relations 1992-1993.
John M. Noonan 63 Vice President, Construction
Products and Properties Divisions since
January 1984.
Paul Ratki 57 Vice President, Metals Division
since April 1994. Reduction and
Reclamation Division General Manager 1993-
1994. Reduction and Reclamation Division
Operations Manager 1991-1993.
William G. Reynolds, Jr.** 57 Vice President, Government
Relations and Public Affairs since
October 1980.
John F. Rudin 51 Vice President, Chief Information
Officer since August 1995. Vice
President since April 1995. Reynolds
Aluminum Supply Company Division General
Manager 1989-1995.
Julian H. Taylor 53 Vice President, Treasurer since
April 1988.
C. Stephen Thomas 57 Vice President, Mill Products
Division since May 1992. Vice President,
Can Division 1990-1992.
Donna C. Dabney 49 Secretary and Assistant General
Counsel since October 1996. Associate
General Counsel 1993-1996. Chief Real
Estate Counsel 1990-1993. Assistant
Secretary 1987-1996.
_______________
* As of February 15, 1997
** Randolph N. Reynolds and William G. Reynolds, Jr. are brothers.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Registrant's Common Stock is listed on the New York Stock
Exchange and the Chicago Stock Exchange. At February 25, 1997,
there were 9,126 holders of record of the Registrant's Common
Stock.
The high and low sales prices for shares of the Registrant's
Common Stock as reported on the New York Stock Exchange Composite
Transactions Tape and the dividends declared per share during the
periods indicated are set forth below:
<TABLE>
<CAPTION>
High Low Dividends
---- --- ---------
1996
<S> <C> <C> <C>
First Quarter $ 61-3/8 $ 49 $.35
Second Quarter 61-5/8 51-3/4 .35
Third Quarter 55-1/2 48-3/4 .35
Fourth Quarter 60-1/2 50-3/8 .35
1995
First Quarter $ 56-1/2 $ 46-1/4 $.25
Second Quarter 52-3/8 46-3/4 .30
Third Quarter 64-3/4 51-5/8 .30
Fourth Quarter 58-5/8 48-1/2 .35
</TABLE>
On February 21, 1997, the Board of Directors declared a dividend
of $.35 per share of Common Stock, payable April 1, 1997 to
stockholders of record on March 3, 1997.
Item 6. SELECTED FINANCIAL DATA
- - ------------------------------------------------------------------------
<TABLE>
Consolidated Income Statement (In millions, except per share amounts)
- - ----------------------------------------------------------------------
<CAPTION>
1996 1995 1994 1993 1992
---------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $6,972 $7,213 $5,879 $5,269 $5,593
Equity, interest and other income 44 39 46 25 28
Gains on sales of assets - - 88 - 36
---------------------------------------------
7,016 7,252 6,013 5,294 5,657
---------------------------------------------
Cost of products sold 5,856 5,739 4,950 4,604 4,716
Selling, administrative and
general expenses 445 449 376 358 369
Depreciation and amortization 365 344 341 340 330
Interest 160 172 156 159 167
Operational restructuring and asset
revaluation costs 37 - - 348 106
Provision for estimated
environmental costs - - - - 164
---------------------------------------------
6,863 6,704 5,823 5,809 5,852
---------------------------------------------
Income (loss) before income taxes
and cumulative effects of
accounting changes 153 548 190 (515) (195)
Taxes on income (credit) 49 159 68 (193) (86)
---------------------------------------------
Income (loss) before cumulative
effects of accounting changes 104 389 122 (322) (109)
Cumulative effects of accounting
changes <F1> (15) - - - (640)
---------------------------------------------
Net income (loss) $ 89 $ 389 $ 122 ($322) ($749)
=============================================
Earnings per share
Income (loss) before cumulative
effects of accounting changes $1.06 $5.35 $1.42 $(5.38) $(1.83)
Cumulative effects of accounting
changes (0.24) - - - (10.73)
---------------------------------------------
Net income (loss) $0.82 $5.35 $1.42 $(5.38) $(12.56)
=============================================
Cash dividends declared =============================================
per common share $1.40 $1.20 $1.00 $1.20 $1.80
=============================================
Other items:
- - -----------
Total assets $7,516 $7,740 $7,461 $6,709 $6,897
=============================================
Long-term debt $1,793 $1,853 $1,848 $1,990 $1,798
=============================================
<FN>
<F1> See Item 8. Financial Statements and Supplementary Data -
Note 1 for a discussion of the 1996 change in accounting
principle. In 1992, the Company adopted FAS No. 106,
requiring accrual accounting for postretirement benefits other
than pensions, and FAS No. 109, which requires use of the
liability method of determining deferred income taxes.
Charges of $610 million (FAS No. 106) and $30 million (FAS No.
109) were recognized in 1992 for the cumulative effects of
these accounting changes. The adoption of FAS No. 109 enabled
the Company to fully recognize the deferred tax benefits
associated with the adoption of FAS No. 106.
</FN>
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following information should be read in conjunction with the
consolidated financial statements, related notes and other
sections of this report. In the tables, dollars are in millions,
except per share and per pound amounts, and shipments are in
thousands of metric tons. A metric ton is equivalent to 2,205
pounds.
Management's Discussion and Analysis contains forecasts,
projections, estimates, statements of management's plans and
objectives for the Company and other forward-looking statements.
Please refer to the "Risk Factors" section beginning on page 33,
where we have summarized factors that could cause actual results
to differ materially from those projected in a forward-looking
statement or affect the extent to which a particular projection
is realized.
RESULTS OF OPERATIONS
The Company's results in 1996 were adversely affected by lower
realized prices for primary aluminum (approximately 18% lower
than 1995), as well as price declines for a number of our
fabricated aluminum products. The results reflect softness in
the overall global aluminum market, primarily attributable to
slower economic growth that has caused end users to liquidate
excess inventories. Other factors affecting results include
higher costs for certain raw materials, reduced shipping and
manufacturing levels in the can and can sheet businesses due to
weaker demand, and severe winter weather conditions early in the
year that resulted in facility curtailments and lower volumes.
<TABLE>
<CAPTION>
1996 1995 1994
----------------------
<S> <C> <C> <C>
Net income $89 $389 $122
Special items included in net income:
LIFO inventory liquidations (see Note 1) 19 - -
Operational restructuring costs (see Note 3) (23) - -
Cumulative effect of accounting change (see Note 1) (15) - -
Gains on sales of assets (see Note 2) - - 57
Earnings per share $0.82 $5.35 $1.42
Special items included in earnings per share:
LIFO inventory liquidations 0.29 - -
Operational restructuring costs (0.36) - -
Cumulative effect of accounting change (0.24) - -
Gains on sales of assets - - 0.92
</TABLE>
ALUMINUM INDUSTRY
The aluminum industry entered 1996 facing carryover effects of
the prior year and weakness in key economies. The aluminum
industry had a strong performance in 1995, particularly in the
first half of the year, because of improved aluminum
supply/demand fundamentals. Prices for both primary and
fabricated aluminum products improved significantly. Industry
shipments increased in late 1994 and early 1995, largely as a
result of hedge buying by end users who were anticipating price
increases. This created a customer inventory buildup, which
resulted in lower shipments in the latter part of 1995 and in
1996 as end users reduced their excess inventories. Demand for
aluminum products was further weakened by the soft landing of the
U.S. economy and weakness in European and other
ALUMINUM INDUSTRY -- continued
economies in late 1995 and 1996. In addition, higher worldwide
production and higher exports from Russia affected aluminum
industry fundamentals in 1996.
<PAGE>
<TABLE>
SHIPMENTS AND NET SALES
<CAPTION>
1996 1995 1994
----------------------------------------------------------------
Net Net Net
Shipments Sales Shipments Sales Shipments Sales
--------- ----- --------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Finished Products and Other Sales
- - ---------------------------------
Packaging and containers
Aluminum 355 $1,850 368 $1,871 359 $1,583
Nonaluminum 603 556 529
Other aluminum 163 552 163 580 151 449
Other nonaluminum 533 528 479
----------------------------------------------------------------
518 3,538 531 3,535 510 3,040
----------------------------------------------------------------
Production and Processing
- - -------------------------
Primary aluminum 386 634 346 684 277 440
Sheet and plate 381 1,168 409 1,350 418 1,003
Extrusions 204 706 200 765 211 627
Other aluminum 164 481 179 494 157 391
Other nonaluminum 445 385 378
----------------------------------------------------------------
1,135 3,434 1,134 3,678 1,063 2,839
----------------------------------------------------------------
Total 1,653 $6,972 1,665 $7,213 1,573 $5,879
================================================================
Average realized price per pound:
- - --------------------------------
Fabricated aluminum products $1.79 $1.84 $1.48
Primary aluminum 0.74 0.90 0.72
</TABLE>
<PAGE>
Finished Products and Other Sales
- - ---------------------------------
Aluminum packaging and container shipments decreased in 1996 due
to lower can shipments. Can shipments decreased because of
reduced beer can volumes and lower export sales to Latin America
as our partially owned can operations there added capacity. We
realized higher shipments of laminated aluminum foil in 1996 as a
result of acquiring a laminated aluminum products plant in mid-
1995. Higher aluminum packaging and container shipments in 1995
resulted primarily from our acquisition of a can operation in mid-
1994.
Shipments of other aluminum products were relatively flat in 1996
after increasing in 1995. Severe winter weather conditions in
early 1996 adversely affected our distribution and construction
products businesses. Lower activity in the transportation
market, especially for trucks and trailers, also negatively
affected our distribution business. Both of these businesses
continually strengthened during the year as weather and business
conditions improved. Other aluminum shipments increased in 1995
due to our acquisition of a metals distribution company in the
third quarter of 1994.
Net sales were slightly higher in 1996, with higher nonaluminum
sales offsetting the effect of lower aluminum shipments.
Nonaluminum sales increased for a broad range of products
including plastic packaging, printing cylinders, construction
products and can machinery. The effect of slightly higher prices
for cans was offset by lower prices for aluminum distribution
products. Higher net sales in 1995 as compared to 1994 reflected
higher aluminum shipments, higher nonaluminum sales (principally
stainless steel) and improved prices for aluminum products.
Production and Processing
Primary aluminum shipments fluctuate from year to year because of
variations in internal requirements and changes in customer
demand for value-added foundry ingot and billet. Our 1995
acquisition of an
additional interest in a Canadian primary aluminum plant
contributed to the higher shipments in 1995 and 1996.
Sheet and plate shipments decreased in 1996 due mainly to lower
demand for can sheet. Can sheet shipments in 1995 were higher
because of strong demand and higher shipments to the Latin
American operations. The increase in can sheet shipments in 1995
was more than offset by a decrease in shipments of other sheet
products resulting from a conversion of a portion of the other
sheet business to tolling.
The increase in other aluminum shipments in 1995 reflected strong
demand for deoxidization products used in the steel industry.
Wheel shipments were up sharply in both years due to strong
demand and the additional capacity in 1996 at our new plant in
Wisconsin.
Year-to-year changes in net sales primarily reflect changes in
demand for aluminum products over the past two years as explained
earlier under "Aluminum Industry". The increases in nonaluminum
sales in both years resulted from strong demand for alumina and
carbon products, although the alumina market slowed later in
1996.
<TABLE>
OPERATING PROFIT
<CAPTION>
1996 1995 1994
--------------------------
<S> <C> <C> <C>
Finished Products and Other Sales $185 $232 $256
Production and Processing 86 492 2
</TABLE>
Operating results generally reflect the contrast in the aluminum
industry during the past two years. Lower aluminum prices,
weaker volumes and lower capacity utilization in fabricating
operations affected 1996 results. Generally, the opposite was
true for 1995 with higher prices and volumes. The year 1996 was
also impacted by lower shipping levels in our can and can sheet
businesses, higher labor costs (as discussed below), the
favorable effects of LIFO liquidations and benefits from a
reduction in primary aluminum purchases (due to our 1995 purchase
of an additional interest in a Canadian primary aluminum plant).
Both years also were affected by higher costs for materials used
to produce alumina and the favorable effects of continuous
improvement efforts. Selling, administrative and general
expenses increased in 1995 primarily due to the higher level of
business activity.
Results for all three periods were negatively affected by unused
capacity at our primary aluminum plants. U.S. production
capacity of 209,000 metric tons remains temporarily curtailed.
In response to strong demand in the alumina market in 1995, we
returned our Texas alumina refinery to full production. In 1996,
because of slowing market conditions, we temporarily curtailed
15% of the capacity at this refinery. We do not expect this
temporary curtailment to have a material impact on future
operating results or affect our ability to meet the requirements
of our primary aluminum operations.
In 1996, we entered into new six-year labor contracts with the
unions that represent a majority of our domestic hourly
employees. Major provisions of the new agreements include wage
increases of $1.15 an hour over the first five years (plus
incremental increases in 1997 and 1999) and enhanced pension
OPERATING PROFIT -- continued
and other benefits. At the end of the fifth year, the economic
provisions of the contracts will be reopened. If agreement
cannot be reached, the economic provisions will be submitted to
arbitration for one additional year. The Company and the unions
also agreed to work cooperatively on customer requirements,
business objectives and shareholder and union interests. In
addition, the agreements contain broad, new provisions for
employee safety, job security and employee participation in the
work environment.
In 1996, we closed a can plant in Texas. Operational
restructuring costs of $37 million (pre-tax) were recognized.
These costs related principally to employee termination costs at
the Texas plant (see Note 3 to the consolidated financial
statements). In 1995, we closed a can plant in New York. Costs
of $25 million were recognized in 1995 for the closing of the New
York plant and for asset revaluations at certain foreign
entities. This amount was offset by the reversal of existing
reserves in 1995 resulting from changes in estimated requirements
for previously restructured operations. Our current strategy for
the U.S. can business is to aggressively reduce costs and
increase production efficiencies through modernization programs
and new technologies.
GEOGRAPHIC AREA ANALYSIS
The Company has operations in the U.S., Canada and other foreign
areas including Europe, Latin America and Australia. Certain of
these operations, especially in Latin America, consist of equity
interests, whose sales are not included in our consolidated net
sales. We also participate in an unincorporated joint venture
that mines bauxite and produces alumina in Australia.
Year-to-year changes in net sales and operating profits in our
three geographic areas (domestic, Canada and other foreign)
primarily reflect the previously discussed changes in aluminum
industry fundamentals.
INTEREST EXPENSE
Interest expense declined in 1996 because of lower effective
interest rates and higher amounts of capitalized interest. These
benefits were partially offset by an increase in the amount of
debt outstanding. Interest expense increased in 1995 due to
higher rates.
We use interest rate swap agreements to manage exposure to
interest rate fluctuations after considering market conditions
and levels of variable-rate and fixed-rate debt outstanding (see
Note 6). Our strategy is to provide for lower interest expense
during economic downturns, with the potential for higher interest
expense during periods of economic growth.
TAXES ON INCOME
The Company pays U.S. federal, state and foreign taxes based on
the laws of the various jurisdictions in which it operates. The
effective tax rates reflected in the income statement differ from
the U.S. federal statutory rate principally because of foreign
taxes at different rates, the effects of percentage depletion
allowances and, in 1995, the effect of a non-recurring foreign
tax benefit. A reconciliation of the effective rates is included
in Note 9.
TAXES ON INCOME -- continued
The Company has worldwide operations in many tax jurisdictions
that generate deferred tax assets and/or liabilities. Deferred
tax assets and liabilities have been netted by jurisdiction,
resulting in both a deferred tax asset and a deferred tax
liability on the balance sheet.
At December 31, 1996, we had $890 million of deferred tax assets
that relate primarily to U.S. tax positions. The most
significant portions of these assets relate to tax carryforward
benefits and accrued costs for employee health care,
environmental and restructuring costs. A major portion of these
assets will be realized in the future through the reversal of
temporary differences, principally depreciation. To the extent
that these assets are not covered by reversals of depreciation,
we expect the remainder to be realized through U.S. income earned
in future periods.
The Company has a strong history of sustainable earnings.
However, even without considering projections of income, certain
tax planning strategies, such as changing the method of valuing
inventories from LIFO to FIFO and/or entering into sale-leaseback
transactions, would generate sufficient taxable income to realize
the portion of the deferred tax asset related to U.S. operations.
In addition, we can indefinitely carry forward the majority of
our U.S. tax carryforward benefits.
Based on our evaluation of these matters, we expect that the
deferred tax assets will be realized. We are not aware of any
events or uncertainties that could significantly affect our
conclusions regarding realization. We reassess the realization
of deferred tax assets quarterly and, if necessary, adjust the
valuation allowance accordingly.
ENVIRONMENTAL
The Company is involved in remedial investigations and actions at
various locations, including Environmental Protection Agency
Superfund sites where we and, in most cases, others have been
designated as potentially responsible parties (PRPs). We accrue
remediation costs when it becomes probable that such efforts will
be required and the costs can be reasonably estimated. We
evaluate the status of all significant existing or potential
environmental issues quarterly, develop or revise cost estimates
to satisfy known remediation requirements, and adjust the accrual
accordingly. At December 31, 1996, the accrual was $197 million
($242 million at December 31, 1995). The accrual reflects our
best estimate of the ultimate liability for known remediation
costs.
In estimating anticipated costs, we consider the extent of our
involvement at each site, joint and several liability provisions
under applicable law, and the likelihood of obtaining
contributions from other PRPs. Potential insurance recoveries
are uncertain and therefore have not been considered. Based on
information currently available, we expect to make remediation
expenditures relating to costs currently accrued over the next 15
to 20 years with the majority spent by the year 2002. We expect
cash flows from operations to provide the funds for environmental
capital, operating and remediation expenditures.
Annual capital expenditures for equipment designed for
environmental control purposes averaged approximately $32 million
over the past three years. Ongoing environmental operating costs
for the same period averaged approximately $78 million per year.
We estimate that operating expenditures for 1997 through 1999
will remain at approximately these same levels. We estimate that
annual capital expenditures for environmental control facilities
will be approximately $65 million in 1997, $105 million in 1998
and $70 million in 1999. The majority of these expenditures are
for the capital spending program referred to below at our primary
aluminum plant in New York.
ENVIRONMENTAL -- continued
Our spending on environmental compliance will be influenced by
future environmental regulations, including those issued and to
be issued under the Clean Air Act Amendments of 1990. We have
begun a five-year capital spending program of an estimated $185
million at our primary aluminum plant in New York. The project
includes new air emissions controls and a phased modernization of
the plant's production lines. We are accelerating certain
expenditures believed necessary to achieve compliance with the
Clean Air Act's proposed Maximum Achievable Control Technology
standards. Based on current information, we estimate that
compliance with the Clean Air Act's hazardous air pollutant
standards will require in excess of $250 million of capital
expenditures (including a portion of the expenditures at the New
York plant referred to above), principally at our U.S. primary
aluminum plants.
For additional information concerning environmental expenditures,
see Note 11.
OTHER INFORMATION
Rates for electricity charged by the Bonneville Power
Administration (BPA), which serves our primary aluminum plants in
Oregon and Washington, are established under a new contract that
expires in 2001. The new contract establishes fixed rates which
are 16% less than rates previously in effect. These rates,
however, are subject to review and approval in a process being
conducted by the Federal Energy Regulatory Commission (FERC).
Third parties are challenging the contract in the U.S. Court of
Appeals for the Ninth Circuit, and the contract's rates are
subject to further appeal in the courts by third parties
following FERC review. Should the new contract be rejected in
any of these processes, we could renegotiate with BPA or seek
service from third parties.
In December 1996, the Aluminum, Brick and Glass Workers
International Union voted to merge with the United Steelworkers
of America. This merger was completed in January 1997. We do
not expect the merger to have a material impact on the Company.
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
WORKING CAPITAL
<CAPTION>
December 31
----------------
1996 1995
---- ----
<S> <C> <C>
Working capital $540 $647
Ratio of current assets to current liabilities 1.4/1 1.5/1
</TABLE>
The decrease in working capital resulted primarily from the
success of our inventory management program.
<TABLE>
OPERATING ACTIVITIES
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash provided from operations $520 $489 $493
</TABLE>
Cash provided from operating activities over the past three years
was used mainly to fund investing activities.
INVESTING ACTIVITIES
Substantial investments have been aimed at providing us with low-
cost operations in most of our raw materials, industrial and
finished products businesses. We have also focused on strategic
areas for expansion and on further quality and efficiency
enhancements. The following table shows actual and projected
capital expenditures in the following categories: operational
(replacement equipment, environmental control projects, etc.) and
strategic (performance improvement, acquisitions and
investments).
<TABLE>
<CAPTION>
Projected
1997 1996 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operational $222 $195 $219 $151
Strategic 128 237 626 253
-----------------------------------------
Total capital investments $350 $432 $845 $404
=========================================
</TABLE>
In Finished Products and Other Sales, strategic projects that
have been completed in the past three years or that are underway
include:
- - - expansions and modernizations of can, foil and plastic film
plants
- - - the participation in the construction of can plants in
Argentina, Brazil, Chile and Saudi Arabia
- - - the acquisitions of a can plant and a metals distribution
business in 1994; and a printing cylinder engraving company, foil
laminating plant, and flexible packaging operation in 1995
In Production and Processing, strategic projects that have been
completed in the past three years or that are underway include:
- - - the acquisitions of additional interests in an Australian
alumina refinery (6%) in 1994 and a Canadian primary aluminum
plant (24.95%) in 1995
- - - the expansion of a plant in Indiana to produce bumpers and
other automotive components (completed in 1996)
INVESTING ACTIVITIES - continued
- - - the modification and equipping of a purchased facility in
Wisconsin to produce aluminum wheels (completed in 1996)
- - - a quality improvement program and equipment upgrades at a
can sheet operation in Alabama
- - - the modernization of a primary aluminum plant in New York
- - - the construction of a forged wheel plant in Virginia (as
discussed below)
- - - the participation in a foil and extrusion plant in China (as
discussed below)
In addition to these major projects, capacity expansions,
equipment upgrades and/or improvement programs have been
completed or are currently underway at a number of other
facilities.
In 1996, we began construction of a $34-million facility in
Virginia to manufacture aluminum wheels. Production is expected
to start in 1997. The facility will use a manufacturing process
that combines our computer-controlled, flow-formed casting
technology with forging to produce lightweight wheels with added
styling flexibility.
Also in 1996, we acquired a partial interest in an operation in
China that produces aluminum foil and extrusions. The operation
includes a large aluminum fabricating facility that was built in
the mid-1980s and expanded later that decade. The facility
manufactures aluminum foil, primarily for the food,
pharmaceutical and tobacco industries, and extrusions for the
automotive and construction products markets.
Capital investments planned for 1997 include amounts for those
projects now underway and continuing operating requirements. We
expect to fund these capital investments with internally
generated funds. While the planned 1997 capital investments do
not include amounts for acquisitions, we will evaluate any
opportunities that arise.
A part of our strategy is to sell non-core assets and use the
proceeds in our strategic businesses. Sales over the past three
years included:
1996
- - - real estate (principally, developed commercial investment
properties)
1995
- - - remaining gold mining assets in Australia
- - - real estate (principally, developed commercial investment
properties)
1994
- - - Austrian can plant
- - - a subsidiary that held a 40% investment in an Australian
gold mine
- - - timberland in the Pacific Northwest
FINANCING ACTIVITIES
We believe our available financial resources, together with
internally generated funds, are sufficient to meet our present
and future business needs. We continue to exceed the financial
ratio requirements contained in our financing arrangements and
expect to do so in the future. At December 31, 1996, $113
million of our $1.65-billion shelf registration remained
available for the issuance of debt securities. We also have a
$500-million revolving credit facility. A summary of significant
financing activities over the past three years follows:
FINANCING ACTIVITIES -- continued
1994:
- - - Issued 11 million shares of 7% PRIDES(SM), Convertible
Preferred Stock (PRIDES) for $47.25 (stated value) per share,
generating $505 million of net proceeds
- - - Voluntarily prepaid the remaining balance ($72 million) of a
term-loan agreement
- - - Repaid the balance ($50 million) of commercial paper
outstanding
- - - Contributed 1.5 million shares (valued at $77 million) of
the Company's common stock to pension plans
We used proceeds from the PRIDES issue for capital investments in
1994 and 1995 and to repay obligations incurred in the fourth
quarter of 1993 to acquire Miller Brewing Company's can plants.
1995:
- - - Borrowed $22 million through the issuance of tax-exempt
bonds that require a single repayment in 2025 and bear interest
at a variable rate
- - - Issued $72 million of medium-term notes, which bear
interest at an average rate of 6% and mature in 1996 and 1997
- - - Contributed 0.9 million shares (valued at $45 million) of
the Company's common stock to pension plans
We used proceeds from the tax-exempt bonds to finance a portion
of the costs of acquiring, constructing and installing
environmental control facilities at our primary aluminum plant in
New York. Proceeds from the medium-term notes were supplemented
with cash on hand and cash generated from operations to acquire
the additional interest in the Canadian primary aluminum plant
for approximately $390 million, plus associated working capital.
1996:
- - - Called for redemption of all outstanding shares of PRIDES
(see Note 7), which will reduce annual dividend requirements by
approximately $24 million based on the current common stock
dividend
- - - Substantially met our goal to fully fund our pension plans
- - - Entered into $400 million of interest rate swap agreements
(see Note 6)
- - - Amended the $500-million revolving credit facility arranged
in 1994 to extend the term and lower the cost (see Note 6)
OUTLOOK
In 1997, we expect to show improvement over 1996 operating
results. This expectation is based primarily on our performance
improvement program discussed below. We also anticipate
improvements in aluminum industry fundamentals and are encouraged
by increases in primary aluminum prices in early 1997.
Looking forward, we believe the outlook for aluminum is strong.
We are forecasting a 4-5% increase in U.S. industry shipments and
a 5-6% increase in global aluminum consumption for 1997, with
especially strong transportation and packaging markets.
Generally, order rates are increasing in all of our businesses.
OUTLOOK -- continued
Programs are in place to improve operating performance in 1997 by
at least $100 million pre-tax, exclusive of price changes and in
excess of inflation. These programs include:
- - - significant cost reductions in our U.S. can business,
including the closing of our Houston, Texas can plant (completed
at the end of 1996) and the start-up of our modernized and more
efficient Torrance, California can plant
- - - aggressive cost reductions at our Alabama rolling mill
(including reducing the workforce, principally through attrition)
- - - benefits from a new power contract for our primary aluminum
plants in the Pacific Northwest (approximately $12 million
annually at our current production levels)
We also expect the following factors to contribute to improved
results in 1997:
- - - additional soft drink can business
- - - improved results from partially owned can operations in
Latin America and Saudi Arabia
- - - stronger can sheet volume
- - - improved demand for alumina
- - - anticipated lower costs for natural gas and caustic soda
(used in the production of alumina)
We expect to strengthen our balance sheet in 1997 by:
- - - managing our capital expenditures to $350 million
- - - continuing to lower our inventory days of supply
- - - realizing cash savings from our PRIDES redemption
- - - reducing debt by more than $200 million
- - - selling non-core assets
PORTFOLIO REVIEW
We are conducting a review of all our operations and businesses.
We are considering a number of alternatives that include, among
other things, asset sales, spin-offs and the forming of strategic
alliances to increase scale. No decisions will be made until
later in 1997.
In March 1997 we concluded the sale of our residential
construction products business in the U.S. Included in the sale
were four plants that make various aluminum and vinyl
construction products, a mini-mill in Virginia that makes
building sheet from recycled aluminum, and 54 service
centers. We have retained our non-residential building
operations in Georgia that produce Reynobond aluminum composite
panels. The disposition of this portion of our construction
products business will not materially affect the Company.
We continue to negotiate the sale of our coal properties in
western Kentucky. The properties include surface and mineral
rights on about 16,000 acres, mineral rights on an additional
32,000 acres (approximately) and varying percentages of oil and
gas rights on about 6,700 acres.
We have also signed letters of intent for the sale of an aluminum
reclamation plant in Virginia and an aluminum extrusion plant in
Texas. We expect both of these transactions, which are subject
to certain conditions, to close in the second quarter of 1997.
Proceeds from these transactions, together with proceeds from the
sale of certain real estate assets scheduled to close through mid-
April 1997, are expected to total approximately $240 million. We
will use these proceeds to reduce current debt. We expect the sale of
our U.S. residential construction products business to result in a
modest gain which we will announce with our first quarter 1997 results.
RISK FACTORS
This section should be read in conjunction with Items 1 and 3 of
this report and the preceding portions of this Item.
This report contains (and oral communications made by or on
behalf of the Company may contain) forecasts, projections,
estimates, statements of management's plans and objectives for
the Company and other forward-looking statements. The Company's
expectations for the future and related forward-looking
statements are based on a number of assumptions and forecasts as
to world economic growth and other economic indicators (including
rates of inflation, industrial production, housing starts and
light vehicle sales), trends in the Company's key markets, global
aluminum supply and demand conditions, and aluminum ingot prices,
among other items. By their nature, forward-looking statements
involve risk and uncertainty, and various factors could cause the
Company's actual results to differ materially from those
projected in a forward-looking statement or affect the extent to
which a particular projection is realized.
Consensus expectations for 1997 indicate global economic growth
of 3%. The Company is forecasting a 4-5% increase in U.S.
aluminum industry shipments and a 5-6% increase in global
aluminum consumption for the year, with especially strong
transportation and packaging markets. Barring a recession in any
major world economy, the Company expects the improved conditions
in aluminum industry supply/demand fundamentals that are becoming
evident at the beginning of 1997 to continue for the next several
years. The Company's outlook for growth in aluminum consumption
for the remainder of this decade is an average of 4% per year.
The Company expects greater use of aluminum around the world in
automobiles and other light vehicles. The Company also expects
U.S. aluminum beverage can shipments to grow at about 2% per year
and global shipments to grow 5% annually, with rapid growth of
the aluminum beverage can market in Latin America, Asia, the
Middle East and other developing economies.
Economic and/or market conditions other than as forecast by the
Company in the preceding paragraph, particularly in the U.S.,
Japan and Germany (which are large consumers of aluminum) and in
Latin America, could cause the Company's actual results to differ
materially from those projected in a forward-looking statement or
affect the extent to which a particular projection is realized.
The following factors also could affect the Company's results:
- - - Primary aluminum is an internationally traded commodity.
The price of primary aluminum is subject to worldwide market
forces of supply and demand and other influences. Prices can be
volatile. The Company's current strategy of being a vertically
integrated producer of value-added aluminum products, and its use
of contractual arrangements including fixed-price sales
contracts, fixed-price supply contracts, and forward, futures and
option contracts, reduces its exposure to this volatility but
does not eliminate it.
RISK FACTORS -- continued
- - - The markets for most aluminum products are highly
competitive. Certain of the Company's competitors are larger
than the Company in terms of total assets and operations and have
greater financial resources. Certain foreign governments are
involved in the operation and/or ownership of certain competitors
and may be motivated by political, as well as economic
considerations. In addition, aluminum competes with other
materials, such as steel, vinyl, plastics and glass, among
others, for various applications in the Company's key markets.
Unanticipated actions or developments by or affecting the
Company's competitors and/or the willingness of customers to
accept substitutions for the products sold by the Company could
affect results.
- - - The Company spends substantial capital and operating amounts
relating to ongoing compliance with environmental laws. In
addition, the Company is involved in remedial investigations and
actions in connection with past disposal of wastes. Estimating
future environmental compliance and remediation costs is
imprecise due to the continuing evolution of environmental laws
and regulatory requirements and uncertainties about their
application to the Company's operations, the availability and
application of technology, the identification of currently
unknown remediation sites, and the allocation of costs among
potentially responsible parties.
- - - Unanticipated material legal proceedings or investigations,
or the disposition of those currently pending against the Company
other than as anticipated by management and counsel, could affect
the Company's results.
- - - Changes in the costs of power, resins, caustic soda, green
coke and other raw materials can affect results. A new five-year
contract with the Bonneville Power Administration for the period
October 1996 - September 2001 will provide a fixed rate for
electrical power that is 16% less than rates previously in effect
for the Company's Washington and Oregon primary aluminum
production plants. These rates are subject to regulatory review
and approval. In addition, third parties are challenging the
contract in court, and the rates are subject to further appeal in
the courts by third parties following regulatory review.
- - - The Company's key transportation market is cyclical, and
sales to that market in particular can be influenced by economic
conditions.
- - - A strike at a customer facility or a significant downturn in
the business of a key customer supplied by the Company could
affect the Company's results.
- - - The Company is conducting a portfolio review of all its
operations and businesses. The Company is considering
alternatives that include, among other things, asset sales, spin-
offs and formation of strategic alliances. The timing, nature
and magnitude of the actions, if any, that will be taken are not
certain. Such actions, if taken, could affect the Company's
results and ongoing operating performance.
In addition to the factors referred to above, the Company is
exposed to general financial, political, economic and business
risks in connection with its worldwide operations. The Company
continues to evaluate and manage its operations in a manner to
mitigate the effects from exposure to such risks. In general,
the Company's expectations for the future are based on the
assumption that conditions relating to costs, currency values,
competition and the legal, regulatory, financial, political and
business environments in the economies and markets in which the
Company operates will not change significantly overall.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (millions, except
per share amounts)
=============================================================================
<CAPTION>
- - -----------------------------------------------------------------------------
Years ended December 31 1996 1995 1994
- - -----------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Net sales $6,972 $7,213 $5,879
Equity, interest and other income 44 39 46
Gains on sales of assets - - 88
- - -----------------------------------------------------------------------------
7,016 7,252 6,013
- - -----------------------------------------------------------------------------
COSTS AND EXPENSES
Cost of products sold 5,856 5,739 4,950
Selling, administrative and general expenses 445 449 376
Depreciation and amortization 365 344 341
Interest 160 172 156
Operational restructuring costs 37 - -
- - -----------------------------------------------------------------------------
6,863 6,704 5,823
- - -----------------------------------------------------------------------------
EARNINGS
Income before income taxes and cumulative effect
of accounting change 153 548 190
Taxes on income 49 159 68
- - -----------------------------------------------------------------------------
Income before cumulative effect of accounting change 104 389 122
Cumulative effect of accounting change (15) - -
- - -----------------------------------------------------------------------------
NET INCOME 89 389 122
Preferred stock dividends 36 36 34
- - -----------------------------------------------------------------------------
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS 53 353 88
RETAINED EARNINGS
Balance at beginning of year 1,256 980 954
Cash dividends on common stock 89 77 62
- - -----------------------------------------------------------------------------
Retained earnings at end of year $1,220 $1,256 $ 980
=============================================================================
EARNINGS PER SHARE
Average shares outstanding 64 73 62
Income before cumulative effect of accounting
change $1.06 $5.35 $1.42
Cumulative effect of accounting change (0.24) - -
- - -----------------------------------------------------------------------------
Net income $0.82 $5.35 $1.42
=============================================================================
CASH DIVIDENDS PER COMMON SHARE $1.40 $1.20 $1.00
=============================================================================
See notes beginning on page 38.
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEET (millions)
=============================================================================
<CAPTION>
December 31 1996 1995
- - -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 38 $ 39
Receivables
Customers, less allowances of $18 (1995 - $20) 811 889
Other 150 154
- - -----------------------------------------------------------------------------
Total receivables 961 1,043
Inventories 787 891
Prepaid expenses and other 87 41
- - -----------------------------------------------------------------------------
Total current assets 1,873 2,014
Unincorporated joint ventures and associated companies 1,337 1,286
Property, plant and equipment - net 3,237 3,223
Deferred taxes 296 376
Other assets 773 841
- - -----------------------------------------------------------------------------
Total assets $7,516 $7,740
=============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade payables $ 499 $ 527
Accrued compensation and related amounts 209 252
Payables to unincorporated joint ventures and
associated companies 97 102
Commercial paper 79 -
Notes payable to banks 138 111
Long-term debt 96 101
Other liabilities 215 274
- - -----------------------------------------------------------------------------
Total current liabilities 1,333 1,367
Long-term debt 1,793 1,853
Postretirement benefits 1,087 1,213
Environmental 179 178
Deferred taxes 262 236
Other liabilities 228 276
Stockholders' equity
Preferred stock - 505
Common stock 1,451 941
Retained earnings 1,220 1,256
Cumulative currency translation adjustments (37) (22)
Pension liability adjustment - (63)
- - -----------------------------------------------------------------------------
Total stockholders' equity 2,634 2,617
Contingent liabilities and commitments (Notes 10 and 11)
- - -----------------------------------------------------------------------------
Total liabilities and stockholders' equity $7,516 $7,740
=============================================================================
See notes beginning on page 38.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS (millions)
=============================================================================
<CAPTION>
Years ended December 31 1996 1995 1994
- - -----------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 89 $ 389 $ 122
Adjustments to reconcile to net cash provided by
operating activities:
Depreciation and amortization 365 344 341
Gains on sales of assets - - (88)
Operational restructuring costs 37 - -
Cumulative effect of accounting change 15 - -
Other 26 18 3
Changes in operating assets and liabilities net of
effects from acquisitions and dispositions:
Accounts payable, accrued and other liabilities (110) (173) 272
Receivables 67 (59) (173)
Inventories 93 17 (106)
Other (62) (47) 122
- - -----------------------------------------------------------------------------
Net cash provided by operating activities 520 489 493
INVESTING ACTIVITIES
Capital investments
Operational (195) (219) (151)
Strategic (237) (626) (253)
Purchases of debt securities - - (139)
Maturities of investments in debt securities - 125 14
Proceeds from sales of assets 12 28 162
Other (17) (48) (71)
- - -----------------------------------------------------------------------------
Net cash used in investing activities (437) (740) (438)
FINANCING ACTIVITIES
Proceeds from long-term debt 40 106 -
Proceeds from preferred stock issue - - 505
Reduction of long-term debt and other financing
liabilities (105) (22) (165)
Increase (decrease) in short-term borrowings 111 (18) (37)
Cash dividends paid (135) (106) (71)
Other 5 22 2
- - -----------------------------------------------------------------------------
Net cash provided by (used in) financing activities (84) (18) 234
CASH AND CASH EQUIVALENTS
Net increase (decrease) (1) (269) 289
At beginning of year 39 308 19
- - -----------------------------------------------------------------------------
At end of year $ 38 $ 39 $ 308
=============================================================================
Supplemental disclosure of cash flow information:
Cash paid (received) during the year for:
Income taxes $ 2 $ 56 $ (17)
Interest (net of capitalized interest) 163 172 152
See notes beginning on page 38.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- - ------------------------------------------
(In the tables, dollars are in millions, except per share
amounts. Certain amounts have been reclassified to conform to
the 1996 presentation.)
1. ACCOUNTING POLICIES
- - -----------------------
General
- - -------
The consolidated financial statements are prepared in conformity
with generally accepted accounting principles. As a result,
management is required to make estimates and assumptions that
affect the following:
- - - reported amounts of revenues and expenses during the
reporting period
- - - reported amounts of assets and liabilities at the date of
the financial statements
- - - disclosure of contingent assets and liabilities at the date
of the financial statements
Actual results could differ from those estimates.
Principles of Consolidation
- - ---------------------------
The consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries after eliminating
inter-company transactions, profits and losses. The investments
in unincorporated joint ventures are accounted for on an
investment cost basis adjusted for the Company's share of the non-
cash production charges of the operation. Unincorporated joint
ventures are production facilities without marketing or sales
activities. Investments in associated companies (20-to-50%
owned) are carried at cost, which is adjusted for the Company's
equity in undistributed net income.
Revenue Recognition
- - -------------------
Revenues are recognized when products are shipped and ownership
risk and title pass to the customer.
Inventories
- - -----------
Inventories are stated at the lower of cost or market. Inventory
costs were determined by the last-in, first-out (LIFO), first-in,
first-out (FIFO) and average-cost methods. LIFO method
inventories were $279 million at the end of 1996 (1995 - $312
million). FIFO and average-cost method inventories were $508
million at the end of 1996 (1995 - $579 million). Inventories
would increase by $470 million at the end of 1996 (1995 - $508
million), if the FIFO method were applied to LIFO method
inventories.
In 1996, the liquidation of certain LIFO layers decreased cost of
products sold by $30 million. The inventories in these LIFO
layers were acquired at lower costs in prior years.
Since inventories are sold at various stages of processing, there
is no practical distinction between finished products, in-process
products and other materials. Inventories are therefore
presented as a single classification.
Depreciation and Amortization
- - -----------------------------
The straight-line method is used to depreciate plant and
equipment over their estimated useful lives (buildings and
leasehold improvements - 10 to 40 years, machinery and equipment
- - - 5 to 20 years). Improvements to leased properties are
generally amortized over the shorter of the terms of the
respective leases or the estimated useful life of the
improvement.
Environmental Expenditures
- - --------------------------
Remediation costs are accrued when it is probable that such
efforts will be required and the related costs can be reasonably
estimated.
1. ACCOUNTING POLICIES -- continued
- - ------------------------------------
Postemployment Benefits
- - -----------------------
The expected cost of postemployment benefits is accrued when it
becomes probable that such benefits will be paid.
Hedging
- - -------
Forward, futures, option and swap contracts are designated to
manage market risks resulting from fluctuations in the aluminum,
natural gas, foreign currency and debt markets. These
instruments, which are not held for trading purposes, are
effective in minimizing such risks by creating equal and
offsetting exposures. Unrealized gains and losses are deferred
and recorded as a component of the underlying hedged transaction
when it occurs. Realized gains or losses from matured and
terminated hedge contracts are recorded in other assets or
liabilities until the underlying hedged transaction is
consummated. Realized and unrealized gains or losses on hedge
contracts relating to transactions that are subsequently not
expected to occur are recognized in results currently. None of
these instruments contains multiplier or leverage features.
There is exposure to credit risk if the other parties to these
instruments do not meet their obligations. Creditworthiness of
the other parties is closely monitored, and they are expected to
fulfill their obligations. Contracts used to manage risks in
these markets are not material.
Cumulative Effect of Accounting Change
- - --------------------------------------
In 1996, Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of," was adopted. The cumulative
effect of adopting the standard was an after-tax loss of $15
million. The loss was for the impairment of assets held for
sale, principally undeveloped land.
Earnings Per Share
- - ------------------
For 1996 and 1994, earnings per share equals net income, minus
dividends on the Company's 7% PRIDES(SM), Convertible Preferred
Stock (PRIDES), divided by the weighted-average number of common
shares outstanding during the year. For 1995, earnings per share
equals net income divided by the weighted-average number of
common shares and common share equivalents outstanding during the
year. The number of common share equivalents outstanding for
1995 was based on the assumed conversion of the PRIDES. For the
purpose of this computation, the conversion rate (0.88 per share)
of common stock for each share of PRIDES was based on the average
market value of common stock during 1995 ($53.56 per share).
Common share equivalents relating to the PRIDES were not included
in 1996 and 1994 since their effect would have been anti-
dilutive. All of the outstanding shares of PRIDES were redeemed
for or converted into shares of common stock in late 1996 (see
Note 7). If this exchange had occurred on January 1, 1996,
earnings per share (net income) would have been $1.22 for 1996.
Stock Options
- - -------------
Stock options are accounted for using the intrinsic value method.
Compensation expense is not recognized because the exercise price
of the stock options equals the market price of the underlying
stock on the date of grant.
Compensation expense is recognized for performance-based stock
options if and when the performance condition is satisfied.
Compensation expense is the difference between the market price
of the common stock when the performance condition is satisfied
and the exercise price of the stock options.
Statement of Cash Flows
- - -----------------------
In preparing the Statement of Cash Flows, all highly liquid,
short-term investments purchased with an original maturity of
three months or less are considered to be cash equivalents.
2. GAINS ON SALES OF ASSETS
- - ----------------------------
In 1994, a pre-tax gain of $63 million was recognized on the sale
of a subsidiary that held a 40% interest in an Australian gold
mine. Also in 1994, a pre-tax gain of $25 million was recognized
on the sale of timberland.
3. OPERATIONAL RESTRUCTURING COSTS
- - -----------------------------------
Operational restructuring costs of $37 million (pre-tax) were
recognized in 1996. These costs consisted principally of
employee termination benefits relating to the closing of a can
plant in Texas. The plant's annual capacity of 1.4-billion cans
was in excess of the Company's domestic customer needs.
Productivity gains within the Company's can-making system and
slower overall growth in the domestic can market permitted this
rationalization of operations. Certain equipment at the plant
will be transferred to the Company's other domestic and
international operations. The plant and property are expected to
be sold.
Approximately one-half of the cash requirements relating to these
costs was paid in 1996. Most of the remainder is expected to be
paid in 1997.
4. UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES
- - ----------------------------------------------------------
Investments in unincorporated joint ventures that produce alumina
and primary aluminum consist of the following:
<TABLE>
<CAPTION>
December 31
------------------
1996 1995
------------------
<S> <C> <C>
Current assets $63 $67
Current liabilities (55) (54)
Property, plant and equipment and other assets 1,047 1,032
------------------
Net investment $1,055 $1,045
==================
</TABLE>
Foreign-based associated companies produce bauxite, alumina,
primary aluminum, hydroelectric power and fabricated aluminum
products. Investments in these companies were $282 million at
the end of 1996 (1995 - $241 million), including advances of $46
million (1995 - $46 million). Equity income (pre-tax) of $21
million was recognized during 1996 (1995 - $17 million, 1994 -
$24 million). Summarized financial information related to these
entities follows:
<TABLE>
<CAPTION>
Years ended December 31
----------------------------
1996 1995 1994
----------------------------
<S> <C> <C> <C>
Net sales $950 $709 $476
Cost of products sold 814 602 410
Net income 31 37 33
</TABLE>
<TABLE>
<CAPTION>
December 31
------------------
1996 1995
------------------
<S> <C> <C>
Current assets $599 $533
Noncurrent assets 917 575
Current liabilities 458 384
Noncurrent liabilities 469 265
Stockholders' equity 589 459
</TABLE>
5. PROPERTY, PLANT AND EQUIPMENT (AT COST)
- - -------------------------------------------
<TABLE>
<CAPTION>
December 31
-------------------
1996 1995
-------------------
<S> <C> <C>
Land, land improvements and mineral properties $303 $302
Buildings and leasehold improvements 1,092 1,057
Machinery and equipment 5,211 4,972
Construction in progress 207 269
-------------------
$6,813 $6,600
Less allowances for depreciation and amortization 3,576 3,377
-------------------
Net property, plant and equipment $3,237 $3,223
===================
</TABLE>
6. FINANCING ARRANGEMENTS
- - --------------------------
<TABLE>
<CAPTION>
December 31
------------------
1996 1995
------------------
<S> <C> <C>
Public debt securities:
Medium-term notes $997 $1,046
9% debentures due 2003 100 100
9-3/8% debentures due 1999 100 100
6-5/8% amortizing notes 284 284
Industrial and environmental control revenue bonds 237 242
Other arrangements:
Bank credit agreement 150 150
Mortgages and other notes payable 21 32
------------------
1,889 1,954
Amounts due within one year 96 101
------------------
Long-term debt $1,793 $1,853
==================
</TABLE>
Long-term debt at December 31, 1996 matures as follows:
1997 $96
1998 291
1999 197
2000 154
2001 169
2002-2025 982
The medium-term notes, 9% debentures and 9-3/8% debentures were
issued under a $1.65-billion shelf registration. The medium-term
notes bear interest at an average fixed rate of 8.8% and have
maturities ranging from 1997 to 2013. At December 31, 1996, $113
million of debt securities remained unissued under the shelf
registration.
The 6-5/8% amortizing notes were issued at a discount (99.48%)
and have an effective interest rate of 6.7%. The notes require
annual principal repayments of $57 million between 1998 and 2002.
Industrial and environmental control revenue bonds consist of
variable-rate debt with interest rates averaging approximately
3.6% at December 31, 1996. These bonds require principal
repayment periodically or in a lump sum through 2025. Letters of
credit issued by banks support these bonds.
The bank credit agreement has a variable interest rate (5.9% at
December 31, 1996) and matures in 1998.
6. FINANCING ARRANGEMENTS -- continued
- - ---------------------------------------
Mortgages and other notes payable consist of fixed-rate debt with
an average rate of 6.4%. They require principal repayment
through 2009.
The Company has a $500-million revolving credit facility that
expires in 2001. No amounts were outstanding under the facility
at December 31, 1996. The annual commitment fee on the facility
is .10%.
Certain financing arrangements contain restrictions that
primarily consist of requirements to maintain specified financial
ratios. These restrictions do not inhibit operations or the use
of fixed assets. At December 31, 1996, the Company exceeded all
such requirements.
The fair value of long-term debt was approximately $2.0 billion
at the end of 1996 (1995 - $2.1 billion). The fair value was
determined by using discounted cash flow analysis.
Interest rate swap agreements are designated to manage a portion
of the exposure to interest rate fluctuations after considering
outstanding levels of variable-rate and fixed-rate debt. The
differential to be paid or received as interest rates change is
accrued and recognized as an adjustment of interest expense. The
fair values of these agreements (which at the end of 1996 and
1995 were not material) are not recognized in the financial
statements. At December 31, 1996, the Company had $625 million
of these agreements (1995 - $742 million), which effectively
convert a portion of its debt (principally medium-term notes)
from fixed-rate to variable-rate. Payments are received based on
a fixed rate (5.9%) and made based on a variable rate (5.7% at
December 31, 1996). These agreements mature in 1997 ($125
million), 1998 ($100 million) and 2001 ($400 million). The
Company also had $175 million of agreements (1995 - $175
million), which effectively convert a portion of its debt
(principally the bank credit agreement and industrial and
environmental control revenue bonds) from variable-rate
to fixed-rate. Payments are received based on a variable rate
(5.9% at December 31, 1996) and made based on a fixed rate
(6.0%). These agreements mature in 1998. The variable rates in
these agreements are based on the London Interbank Offer Rate.
Interest capitalized was $13 million during 1996 (1995 - $7
million, 1994 - $5 million).
The weighted-average interest rate on commercial paper was 5.9%
at the end of 1996. The weighted-average interest rate on other
short-term borrowings was 4.6% at the end of 1996 (1995 - 7.0%).
7. STOCKHOLDERS' EQUITY
- - ------------------------
Preferred stock
- - ---------------
The Company has 21,000,000 shares of preferred stock authorized.
Two million shares have been designated Series A Junior
Participating Preferred.
On December 31, 1996, the Company called for redemption of all
its outstanding PRIDES. As a result of the call, the Company
issued a total of 9,019,990 shares of common stock upon the
redemption or conversion of all of the PRIDES. A total of
4,673,800 shares of common stock were issued in redemption of
5,699,756 shares of PRIDES. The redemption rate of .82 of a
share of common stock for each share of PRIDES was based on a
call price of $48.077 per share and a common stock market price
of $58.79 per share (determined as provided in the PRIDES
governing documents). In lieu of redemption, holders of
5,300,244 shares of PRIDES elected to convert their shares of
PRIDES (on or before the redemption date) into 4,346,190 shares
of common stock (at a conversion rate of .82 of a share of common
stock for each share of PRIDES). Dividends declared on each
share of PRIDES were $3.31 in 1996 (1995 - $3.31).
7. STOCKHOLDERS' EQUITY -- continued
- - -------------------------------------
<TABLE>
<CAPTION>
Common stock
- - ------------
Shares Amount
-----------------------
<S> <C> <C>
Authorized, without par value 200,000,000
Outstanding:
At beginning of 1994 60,488,863 $784
Shares issued under employee benefit plans:
1994 1,679,792 86
1995 1,429,822 71
1996 100,132 5
Shares issued for the redemption or
conversion of PRIDES in 1996 9,019,990 505
-----------------------
At end of 1996 72,718,599 $1,451
=======================
</TABLE>
<TABLE>
<CAPTION>
Cash dividends declared
1996 1995 1994
------------------------
<S> <C> <C> <C>
PRIDES $36 $36 $34
Common stock 89 77 62
------------------------
$125 $113 $96
========================
</TABLE>
Stock options
- - -------------
The Company has a non-qualified stock option plan under which key
employees may be granted stock options at a price equal to the
fair market value at the date of grant. Other than the
performance-based options discussed below, the stock options
currently outstanding vest in one year and are exercisable
between one year and 10 years from the date of grant. A summary
of stock option activity and related information follows
(options are in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Outstanding at January 1 4,680 4,404 3,756
Granted 750 755 728
Exercised (103) (453) (55)
Canceled (9) (26) (25)
------------------------------
Outstanding at December 31 5,318 4,680 4,404
Exercisable at December 31 4,569 3,931 3,681
Available for grant (increased on
January 1, 1996 by 2 million shares) 1,630 520 1,260
Weighted-average prices:
Outstanding at January 1 $52 $51 $52
Granted 55 52 45
Exercised 39 43 31
Canceled 52 53 56
Outstanding at December 31 52 52 51
Exercisable at December 31 52 52 52
</TABLE>
7. STOCKHOLDERS' EQUITY -- continued
- - -------------------------------------
Stock options-continued
- - -----------------------
The following table summarizes information about stock options
outstanding at December 31, 1996 (options are in thousands and
remaining contractual life and exercise prices are weighted-
averages):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------- -------------------
Range of Remaining
Exercise Contractual Exercise Exercise
Prices Options Life Price Options Price
------ ------- ---- ----- ------- -----
<S> <C> <C> <C> <C> <C>
$35 to $49 1,518 6 Years $44 1,518 $44
$52 to $60 3,800 6 Years 56 3,051 56
------- -------
$35 to $60 5,318 6 Years 52 4,569 52
======= =======
</TABLE>
In 1996, the Company also granted 150,000 performance-based stock
options at an exercise price of $53.50 per share. The stock
options will not be exercisable unless, on or before September
30, 1999, the closing price of the common stock equals or exceeds
$80.25 per share for 30 consecutive days. If this condition is
satisfied, the options may be exercised any time between August
30, 1997 and March 31, 2000.
Pro forma net income and earnings per share have been prepared
based on expensing (after tax) the estimated fair value of stock
options granted during 1996 and 1995. The estimated fair value
of the stock options was determined by using a Black-Scholes
option pricing model. The estimated fair values and the weighted-
average assumptions used to estimate those values follow:
<TABLE>
<CAPTION>
Performance-
Stock Options Based Options
----------------- -------------
1996 1995 1996
---- ---- ----
<S> <C> <C> <C>
Risk-free interest rate 6.9% 6.5% 6.5%
Dividend yield 2.6% 3.0% 2.1%
Volatility factor of the expected
market price of the Company's
common stock .278 .270 .262
Expected life of the option 6 years 6 years 3 years
Estimated fair value of each
stock option granted $16.97 $14.30 $11.73
</TABLE>
The Black-Scholes option pricing model was not developed for use
in valuing employee stock options. This model was developed for
use in estimating the fair value of traded options that have no
vesting restrictions and are fully transferable. In addition, it
requires the input of highly subjective assumptions including
expectations of future dividends and stock price volatility. The
assumptions are only used for making the required fair value
estimate and should not be considered as indicators of future
dividend policy or stock price appreciation. Because changes in
the subjective input assumptions can materially affect the fair
value estimate and because the employee stock options have
characteristics significantly different from those of traded
options, the use of the Black-Scholes option pricing model may
not provide a reliable single measure of the employee stock
options.
The pro forma information follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Pro forma net income $79 $ 382
Pro forma earnings per share $0.67 $5.25
</TABLE>
7. STOCKHOLDERS' EQUITY -- continued
- - -------------------------------------
Shareholder rights plan
- - -----------------------
Each share of common stock has one right attached and the rights
trade with the common stock. The rights are exercisable only if
a person or group buys 20% or more of the Company's common stock,
or announces a tender offer for 30% or more of the outstanding
common stock. Each right will entitle a holder to buy one-
hundredth of one share of the Company's Series A Junior
Participating Preferred Stock at an exercise price of $125.
If at any time after the rights become exercisable, the Company
is acquired in a merger or other business combination, or if
there is a sale or transfer of 50% of its assets or earning
power, each right would enable its holder to buy common stock of
the acquiring company at a 50% discount. In addition, if a
person or group acquires 30% or more of the common stock, or if
certain other events occur, each right would enable its holder to
buy common stock of the Company at a 50% discount. The rights,
which do not have voting privileges, expire in late 1997. The
Board of Directors may redeem the rights before
expiration, under certain circumstances, for $0.05 per right.
Until the rights become exercisable, they have no dilutive effect
on earnings per share.
These rights should not interfere with a business combination
approved by the Board of Directors. However, they will cause
substantial dilution to a person or group that attempts to
acquire the Company without conditioning the offer on redemption
of the rights or acquiring a substantial number of the rights.
<TABLE>
<CAPTION>
Cumulative currency translation adjustments
- - -------------------------------------------
1996 1995 1994
-----------------------
<S> <C> <C> <C>
At beginning of year $(22) $(43) $(50)
Currency translation adjustments (16) 23 7
Income taxes 1 (2) -
-----------------------
At end of year $(37) $(22) $(43)
=======================
</TABLE>
8. POSTRETIREMENT BENEFITS
- - ---------------------------
Pensions
- - --------
The Company has several noncontributory defined benefit pension
plans that cover substantially all employees. Plans covering
salaried employees provide pension benefits based on a formula.
The formula considers length of service and earnings during years
of service. Plans covering hourly employees generally provide a
specific amount of benefits for each year of service.
Net pension costs were:
<TABLE>
<CAPTION>
1996 1995 1994
------------------------
<S> <C> <C> <C>
Service cost $38 $27 $32
Interest cost 138 133 127
Actual return on plan assets -- (gain) loss (212) (308) 3
Net amortization and deferrals 94 192 (92)
Other 14 12 12
------------------------
Total $72 $56 $82
========================
</TABLE>
8. POSTRETIREMENT BENEFITS -- continued
- - ----------------------------------------
Pensions-continued
- - ------------------
The following table sets forth information on the principal
pension plans:
<TABLE>
<CAPTION>
December 31
-------------------
1996 1995
-------------------
<S> <C> <C>
Actuarial present value of pension benefit obligation:
Vested $1,593 $1,546
Nonvested 192 177
-------------------
Accumulated $1,785 $1,723
===================
Projected $1,916 $1,858
Plan assets at fair value 1,876 1,692
-------------------
Plan assets less than projected benefit obligation (40) (166)
Items not yet recognized:
Unrecognized net loss 95 271
Unamortized plan change benefits 156 98
Recognition of minimum liability (18) (151)
-------------------
Net pension asset $193 $52
===================
</TABLE>
Assumptions used in accounting for the principal pension plans
were:
<TABLE>
<CAPTION>
1996 1995 1994
-------------------------
<S> <C> <C> <C>
Discount rate 7.75% 7.25% 8.75%
Approximate weighted-average rate of increase
in compensation levels (salaried plan only) 4.5% 4.5% 4.5%
Expected long-term rate of return on assets 9.25% 9.25% 9.25%
</TABLE>
At December 31, 1996, the accumulated benefit obligations of the
pension plans were substantially fully funded. In the future,
the Company expects to keep the plans fully funded absent
significant plan changes and/or deviations in actuarial
assumptions. Absent these changes and/or deviations, funding
levels will approximate pension costs in future years. Cash for
the contributions is expected to be generated from operations.
Contributions totaled $87 million in 1996 and $127 million
(including 0.9 million shares of common stock of the Company
valued at $45 million) in 1995.
8. POSTRETIREMENT BENEFITS -- continued
- - ----------------------------------------
At December 31, 1996, the plans' assets consisted of the
following:
Corporate equity securities 59%
Corporate bonds 26
Government debt securities and cash equivalents 10
Real estate 5
Corporate equity securities include 1.5 million shares of the
Company's common stock. These shares had a market value of $85
million at the end of 1996. Dividends paid on the Company's
common stock held by the plans during 1996 totaled $2 million.
Other postretirement benefits
- - -----------------------------
The Company provides most domestic retired employees with health
care and life insurance benefits. Substantially all domestic
employees may become eligible for these benefits if they work for
the Company until retirement age. The cost of these benefits is
funded when actual expenses are incurred.
Net periodic postretirement benefit cost was:
<TABLE>
<CAPTION>
1996 1995 1994
----------------------------
<S> <C> <C> <C>
Service cost $8 $6 $8
Interest cost 62 74 74
Net amortization (19) (19) (16)
----------------------------
Total $51 $61 $66
============================
</TABLE>
The accumulated postretirement benefit obligation consists of the
following:
<TABLE>
<CAPTION>
December 31
-------------------
1996 1995
-------------------
<S> <C> <C>
Retirees $625 $694
Active employees fully eligible 81 71
Active employees not fully eligible 146 165
Unamortized plan change benefits 145 178
Unrecognized net gain (loss) 75 (46)
-------------------
Total $1,072 $1,062
===================
</TABLE>
The health care cost trend rate has a significant effect on the
amounts reported. The annual assumed rate of increase for the
principal plans is 6.5% for 1997 (7% in 1996 and 10% in 1995) and
is assumed to decrease gradually to 5% for 2002 and beyond. Each
1% change in the rate would change the accumulated postretirement
benefit obligation by $52 million at December 31, 1996 and net
periodic postretirement benefit cost for 1996 by $4 million.
The discount rate used in determining the accumulated
postretirement benefit obligation for the principal plans was
7.75% at December 31, 1996 (1995 - 7.25%).
9. TAXES ON INCOME
- - -------------------
The significant components of the provision for income taxes
were:
<TABLE>
<CAPTION>
1996 1995 1994
----------------------
<S> <C> <C> <C>
Current:
Federal $3 $10 $30
Foreign 3 10 15
State 1 3 1
----------------------
Total current 7 23 46
----------------------
Deferred:
Federal 2 66 (13)
Foreign 28 62 32
State (2) - (8)
----------------------
Total deferred 28 128 11
----------------------
Equity income 14 8 11
----------------------
Total $49 $159 $68
======================
</TABLE>
The deferred tax provision includes domestic carryforward
benefits of $28 million (1995 - $9 million, 1994 -$14 million).
The effective income tax rate varied from the U.S. statutory rate
as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------------
<S> <C> <C> <C>
U.S. rate 35% 35% 35%
Income taxed at other than the U.S. rate 2 (5) 2
Percentage depletion (3) (1) (3)
State income taxes and other (2) - 2
----------------------
Effective rate 32% 29% 36%
======================
</TABLE>
Income taxed at other than the U.S. rate includes a non-recurring
foreign tax benefit of 3% in 1995.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes. At December 31, 1996, the Company had
$890 million (1995 - $902 million) of deferred tax assets and
$826 million (1995 - $759 million) of deferred tax liabilities
that have been netted with respect to tax jurisdictions for
presentation purposes. The significant components of these
amounts were:
<TABLE>
<CAPTION>
1996 1995
------------------------------------
Asset Liability Asset Liability
------------------------------------
<S> <C> <C> <C> <C>
Retiree health benefits $ 412 $- $415 $-
Tax carryforward benefits 225 - 213 (1)
Environmental and restructuring costs 110 (2) 121 (2)
Other 5 54 44 39
Tax over book depreciation (380) 210 (369) 200
Valuation reserve relating to tax
carryforward benefits (46) - (45) -
------------------------------------
Total deferred tax assets and liabilities 326 262 379 236
Amount included as current in
balance sheet 30 - 3 -
------------------------------------
Noncurrent deferred tax assets and
liabilities $296 $262 $376 $236
====================================
</TABLE>
9. TAXES ON INCOME -- continued
- - --------------------------------
The tax carryforward benefits can be carried forward indefinitely
except for $61 million that will expire primarily between 2001
and 2011. A valuation reserve of $46 million relating to certain
of these benefits has been recorded. Alternatives continue to be
evaluated that may result in the ultimate realization of a
portion of these reserved assets.
Income taxes have not been provided on the undistributed earnings
($1,015 million) of foreign subsidiaries. The Company intends to
use such earnings to finance foreign expansion, reduce foreign
debt or support foreign operating requirements.
10. CONTINGENT LIABILITIES AND COMMITMENTS
- - -------------------------------------------
Various suits, claims and actions are pending against the
Company. In the opinion of management, after consultation with
legal counsel, disposition of these suits, claims and actions,
either individually or in the aggregate, will not have a material
adverse effect on the Company's competitive or financial position
or its ongoing results of operations. No assurance can be given,
however, that the disposition of one or more of such suits,
claims or actions in a particular reporting period will not be
material in relation to the reported results for such period.
The Company is committed to paying its proportionate share of
annual primary aluminum production charges (including debt
service) relating to its interests in an unincorporated joint
venture and an associated company. These arrangements include
minimum commitments of approximately $45 million annually through
1999. The present value of these commitments at December 31,
1996 was $122 million, after excluding interest of $13 million.
The Company purchased approximately $150 million of primary
aluminum in each of the last three years under these
arrangements.
Certain items of property, plant and equipment are leased under
long-term operating leases. Lease expense was approximately $48
million per year for the years 1994 to 1996. Lease commitments
at December 31, 1996, were approximately $80 million. Leases
covering major items contain renewal and/or purchase options that
may be exercised.
11. ENVIRONMENTAL EXPENDITURES
- - -------------------------------
The Company is involved in various worldwide environmental
improvement activities resulting from past operations, including
designation as a potentially responsible party (PRP), with
others, at various Environmental Protection Agency-designated
Superfund sites. Amounts have been recorded (on an undiscounted
basis) which, in management's best estimate, will be sufficient
to satisfy anticipated costs of known remediation requirements.
At December 31, 1996, the accrual for environmental remediation
costs was $197 million. This amount is expected to be spent over
the next 15 to 20 years with the majority to be spent by the year
2002.
Estimated environmental remediation costs are developed after
considering, among other things, the following:
- - - currently available technological solutions
- - - alternative cleanup methods
- - - risk-based assessments of the contamination
- - - estimated proportionate share of remediation costs (if applicable)
11. ENVIRONMENTAL EXPENDITURES -- continued
- - --------------------------------------------
The Company may also use external consultants, and consider, when
available, estimates by other PRPs and governmental agencies and
information regarding the financial viability of other PRPs.
Based on information currently available, the Company believes it
is unlikely that it will incur substantial additional costs as a
result of failure by other PRPs to satisfy their responsibilities
for remediation costs.
Estimated costs for future environmental compliance and
remediation are necessarily imprecise because of factors such as:
- - - continuing evolution of environmental laws and regulatory
requirements
- - - availability and application of technology
- - - identification of presently unknown remediation requirements
- - - cost allocations among PRPs
Further, it is not possible to predict the amount or timing of
future costs of environmental remediation that may subsequently
be determined. Based on information presently available, such
future costs are not expected to have a material adverse effect
on the Company's competitive or financial position or its ongoing
results of operations. However, such costs could be material to
results of operations in a future interim or annual reporting
period.
12. COMPANY OPERATIONS
- - -----------------------
The Company serves global markets as a supplier and recycler of
aluminum and other products, with its core business being as a
vertically integrated producer of a wide variety of value-added
aluminum products. The Company produces alumina, carbon products
and primary and reclaimed aluminum, principally to supply the
needs of its fabricating operations. These fabricating
operations produce aluminum foil, sheet, plate, cans, extruded
products (including heat exchanger tubing, drive shafts, bumpers
and window systems), flexible packaging and wheels, among other
items. The Company also produces a broad range of plastic
products, including film, bags, containers and lids, for consumer
products, foodservice and packaging uses. The Company markets an
extensive line of consumer products under the Reynolds brand
name, including the well-known Reynolds Wrap aluminum foil. The
Company's principal markets for its products are the aluminum
beverage can, packaging, consumer products, transportation, and
building and construction markets. The Company also is engaged
in the distribution of aluminum and stainless steel and other
nonaluminum industrial products to a variety of markets.
Primary aluminum is an internationally traded commodity. The
price of primary aluminum is subject to worldwide market forces
of supply and demand and other influences. Prices can be
volatile and fluctuations influence the Company's operating
results. The Company's current strategy of being a vertically
integrated producer of value-added aluminum products and its use
of contractual arrangements including fixed-price sales
contracts, fixed-price supply contracts, and forward, futures and
option contracts, reduces its exposure to this volatility but
does not eliminate it. Through these activities, the Company's
risk profile is managed in a manner consistent with management's
operational strategies. The Company continues to manage its
global operations in order to mitigate its exposure to general
financial, political, economic and business risks.
In order to more fully describe the nature of its operations and
to supplement the foregoing, the Company has separated its
vertically integrated operations into two groups referred to as
Finished Products and Other Sales, and Production and Processing.
Summarized financial information relating to the Company's
operations and investments is as follows:
12. COMPANY OPERATIONS -- continued
- - ------------------------------------
<PAGE>
<TABLE>
Operating Data
<CAPTION>
Finished Production
Products and and Eliminations,
1996 Other Sales Processing etc. Consolidated
- - --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales to customers $3,538 $3,434 $- $6,972
Internal transfers 6 785 (791) -
- - --------------------------------------------------------------------------------------------------
Total sales $3,544 $4,219 $(791) $6,972
- - --------------------------------------------------------------------------------------------------
Operating income $185 $86 $(2) $269
Equity income 19 9 (7) 21
Interest and other income 23
Interest expense (160)
-------------
Income before income taxes and
cumulative effect of accounting change $153
- - --------------------------------------------------------------------------------------------------
Depreciation and amortization 102 263 365
Identifiable assets 1,546 3,966 (51) 5,461
Capital investments 131 301 432
- - --------------------------------------------------------------------------------------------------
1995
- - --------------------------------------------------------------------------------------------------
Sales to customers $3,535 $3,678 $- $7,213
Internal transfers 9 809 (818) -
- - --------------------------------------------------------------------------------------------------
Total sales $3,544 $4,487 $(818) $7,213
- - --------------------------------------------------------------------------------------------------
Operating income $232 $492 $(43) $681
Equity income 14 11 (8) 17
Interest and other income 22
Interest expense (172)
-------------
Income before income taxes $548
- - --------------------------------------------------------------------------------------------------
Depreciation and amortization 99 245 344
Identifiable assets 1,558 4,121 (83) 5,596
Capital investments $157 $688 845
- - --------------------------------------------------------------------------------------------------
1994
- - --------------------------------------------------------------------------------------------------
Sales to customers $3,040 $2,839 $- $5,879
Internal transfers 4 706 (710) -
- - --------------------------------------------------------------------------------------------------
Total sales $3,044 $3,545 $(710) $5,879
- - --------------------------------------------------------------------------------------------------
Operating income $256 $2 $(46) $212
Equity income 23 10 (9) 24
Interest and other income 110
Interest expense (156)
-------------
Income before income taxes $190
- - --------------------------------------------------------------------------------------------------
Depreciation and amortization 91 250 341
Identifiable assets 1,452 3,963 (84) 5,331
Capital investments $183 $221 404
- - --------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
12. COMPANY OPERATIONS -- continued
- - ------------------------------------
<TABLE>
Geographic Data
<CAPTION>
Other
Foreign
(Principally
1996 Domestic Canada Europe) Eliminations Consolidated
- - -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales to customers $5,450 $509 $1,013 $6,972
Transfers between areas 380 677 203 $(1,260) -
- - -----------------------------------------------------------------------------------------
Total sales $5,830 $1,186 $1,216 $(1,260) $6,972
- - -----------------------------------------------------------------------------------------
Operating income (loss) $148 $154 $(18) $(15) $269
Identifiable assets $4,220 $1,332 $798 $(171) $6,179
- - -----------------------------------------------------------------------------------------
1995
- - -----------------------------------------------------------------------------------------
Sales to customers $5,524 $529 $1,160 $7,213
Transfers between areas 484 726 176 (1,386) -
- - -----------------------------------------------------------------------------------------
Total sales $6,008 $1,255 $1,336 $(1,386) $7,213
- - -----------------------------------------------------------------------------------------
Operating income $230 $351 $87 $13 $681
Identifiable assets $4,360 $1,326 $981 $(213) $6,454
- - -----------------------------------------------------------------------------------------
1994
- - -----------------------------------------------------------------------------------------
Sales to customers $4,506 $375 $998 $5,879
Transfers between areas 404 576 178 (1,158) -
- - -----------------------------------------------------------------------------------------
Total sales $4,910 $951 $1,176 $(1,158) $5,879
- - -----------------------------------------------------------------------------------------
Operating income $27 $133 $63 $(11) $212
Identifiable assets $4,578 $1,288 $975 $(236) $6,605
- - -----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Approximately 30% of products transferred between operating
groups is reflected at cost-related prices. The remaining
transfers between operating areas and transfers among Canada,
other foreign and domestic areas are reflected at market-related
prices.
Operating profit is after allocation of selling, administrative
and general expenses. It does not reflect interest expense or
other items of income or expense considered to be general
corporate in nature.
Investments in and advances to associated companies and
unincorporated joint ventures not consolidated totaled $1,337
million at the end of 1996 (1995 - $1,286 million, 1994 - $856
million). These investments and advances relate principally to
Australian and Canadian entities in the Production and Processing
group. Corporate assets of $718 million at the end of 1996 (1995
- - - $858 million, 1994 - $1,274 million) consist principally of
cash, investments, deferred taxes and other assets.
Research and development expenditures were $49 million in 1996
(1995 - $43 million, 1994 - $38 million).
We are conducting a review of all our operations and businesses.
We are considering a number of alternatives that include, among
other things, asset sales, spin-offs, and the forming of
strategic alliances to increase scale. Such actions, if taken,
could affect the Company's results and ongoing operating
performance. No decisions will be made until later in 1997.
13. CANADIAN REYNOLDS METALS COMPANY, LTD. AND REYNOLDS ALUMINUM
COMPANY OF CANADA, LTD.
- - -----------------------------------------------------------------
Financial statements for Canadian Reynolds Metals Company, Ltd.
and Reynolds Aluminum Company of Canada, Ltd. have been omitted
because certain securities registered under the Securities Act of
1933, of which these entities are obligors (thus subjecting them
to reporting requirements under Section 13 or 15(d) of the
Securities Exchange Act of 1934), are fully and unconditionally
guaranteed by Reynolds Metals Company. Financial information
relating to these companies is presented herein in accordance
with Staff Accounting Bulletin 53 as an addition to the notes to
the financial statements of Reynolds Metals Company. Summarized
financial information is as follows:
<TABLE>
Canadian Reynolds Metals Company, Ltd.
<CAPTION>
Years ended December 31
--------------------------
1996 1995 1994
--------------------------
<S> <C> <C> <C>
Net Sales:
Customers $202 $226 $111
Parent company 599 690 576
--------------------------
801 916 687
Cost of products sold 677 651 603
Net income (loss) $65 $176 $38
</TABLE>
<TABLE>
<CAPTION>
December 31
----------------
1996 1995
----------------
<S> <C> <C>
Current assets $189 $112
Noncurrent assets 1,225 1,266
Current liabilities (50) (91)
Noncurrent liabilities (624) (617)
</TABLE>
<TABLE>
Reynolds Aluminum Company of Canada, Ltd.
<CAPTION>
Years ended December 31
-------------------------
1996 1995 1994
-------------------------
<S> <C> <C> <C>
Net Sales:
Customers $509 $522 $373
Parent company 517 619 498
-------------------------
1,026 1,141 871
Cost of products sold 884 849 755
Net income (loss) $59 $188 $50
</TABLE>
<TABLE>
<CAPTION>
December 31
------------------
1996 1995
------------------
<S> <C> <C>
Current assets $240 $221
Noncurrent assets 1,370 1,407
Current liabilities (95) (199)
Noncurrent liabilities (656) (632)
</TABLE>
<PAGE>
<TABLE>
Quarterly Results of Operations (Unaudited)
(millions, except per share amounts)
<CAPTION>
- - --------------------------------------------------------------------------------------------------------
1996 1995
- - --------------------------------------------------------------------------------------------------------
Quarter 1st 2nd 3rd 4th 1st 2nd 3rd 4th
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $1,662 $1,823 $1,751 $1,736 $1,651 $1,864 $1,841 $1,857
Gross profit 205 227 180 151 259 304 307 272
Income before cumulative effect of
accounting change 17 60 26 1 82 111 112 84
Cumulative effect of accounting
change (See Note 1) (15) - - - - - - -
- - --------------------------------------------------------------------------------------------------------
Net income $2 $60 $26 $1 $82 $111 $112 $84
========================================================================================================
Earnings per common share
Income (loss) before cumulative
effect of accounting change $0.12 $0.81 $0.26 $(0.13) $1.13 $1.51 $1.56 $1.15
Cumulative effect of accounting change (0.24) - - - - - - -
- - --------------------------------------------------------------------------------------------------------
Net income (loss) $(0.12) $0.81 $0.26 $(0.13) $1.13 $1.51 $1.56 $1.15
========================================================================================================
Gross profit equals net sales minus cost of products sold (including
manufacturing depreciation). Included in income before cumulative
effect of accounting change for 1996 is a charge for restructuring costs of $23
million ($0.36 per share) in the first quarter of 1996 and favorable effects
from LIFO inventory liquidations of $3 million ($0.05 per share), $6 million
($0.10 per share) and $10 million ($0.14 per share) in the second, third and
fourth quarters, respectively.
</TABLE>
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Stockholders and Board of Directors
Reynolds Metals Company
We have audited the accompanying consolidated balance sheets of
Reynolds Metals Company as of December 31, 1996 and 1995, and
the related consolidated statements of income and retained
earnings, and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Reynolds Metals Company at December 31,
1996 and 1995, and the consolidated results of its operations
and its cash flows for each of the three years in the period
ended December 31, 1996, in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the Consolidated Financial Statements,
in 1996 the Company adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of."
Ernst & Young LLP
Richmond, Virginia
February 21, 1997
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information concerning the directors and nominees for
directorship and compliance with Section 16(a) of the Exchange
Act of 1934, see the information under the captions "Item 1.
Election of Directors" and "General Information - Section 16(a)
Beneficial Ownership Reporting Compliance" in the Registrant's
Proxy Statement for the Annual Meeting of Stockholders to be held
on April 16, 1997. That information is incorporated in this
report by reference.
Information concerning executive officers of the Registrant is
shown in Part I - Item 4A of this report.
Item 11. EXECUTIVE COMPENSATION
For information required by this item, see the information under
the captions "Item 1. Election of Directors - Board Compensation
and Benefits", "Item 1. Election of Directors - Other
Compensation", and "Executive Compensation" in the Registrant's
Proxy Statement for the Annual Meeting of Stockholders to be held
on April 16, 1997. That information is incorporated in this
report by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
For information required by this item, see the information under
the caption "Beneficial Ownership of Securities" in the
Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 16, 1997. That information
(other than that appearing under the caption "Beneficial
Ownership of Securities - Stock Ownership Guidelines") is
incorporated in this report by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For information required by this item, see the information under
the captions "Item 1. Election of Directors - Certain
Relationships", "Item 1. Election of Directors - Other
Compensation", "Executive Compensation - Pension Plan Table" and
"Executive Compensation - Certain Arrangements" in the
Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 16, 1997. That information is
incorporated in this report by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The consolidated financial statements and exhibits listed
below are filed as a part of this report.
(1) Consolidated Financial Statements: Page
----
Consolidated statement of income and retained earnings -
Years ended December 31, 1996, 1995 and 1994. 35
Consolidated balance sheet - December 31, 1996 and 1995. 36
Consolidated statement of cash flows - Years ended
December 31, 1996, 1995 and 1994. 37
Notes to consolidated financial statements. 38
Report of Ernst & Young LLP, Independent Auditors. 55
(2) Financial Statement Schedules
This report omits all schedules for which provision is
made in the applicable accounting regulations of the
Securities and Exchange Commission because they are not
required, are inapplicable or the required information
has otherwise been given.
This report omits individual financial statements of
Reynolds Metals Company because the restricted net
assets (as defined in Accounting Series Release 302) of
all subsidiaries included in the consolidated financial
statements filed, in the aggregate, do not exceed 25%
of the consolidated net assets shown in the
consolidated balance sheet as of December 31, 1996.
This report omits financial statements of all
associated companies (20% to 50% owned) because no
associated company is individually significant.
(3) Exhibits
EXHIBIT 2 - None
EXHIBIT 3.1 - Restated Certificate of Incorporation,
as amended
EXHIBIT 3.2 - By-Laws, as amended
EXHIBIT 4.1 - Restated Certificate of Incorporation.
See EXHIBIT 3.1.
EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2.
* EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the
"Indenture") between Reynolds Metals
Company and The Bank of New York, as
Trustee, relating to Debt Securities.
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended March 31, 1989,
EXHIBIT 4(c))
_______________________
*Incorporated by reference.
* EXHIBIT 4.4 - Amendment No. 1 dated as of November 1,
1991 to the Indenture. (File No. 1-
1430, 1991 Form 10-K Report, EXHIBIT
4.4)
* EXHIBIT 4.5 - Rights Agreement dated as of November
23, 1987 (the "Rights Agreement")
between Reynolds Metals Company and The
Chase Manhattan Bank, N.A. (File No. 1-
1430, Registration Statement on Form 8-A
dated November 23, 1987, pertaining to
Preferred Stock Purchase Rights, EXHIBIT
1)
* EXHIBIT 4.6 - Amendment No. 1 dated as of December 19,
1991 to the Rights Agreement. (File No.
1-1430, 1991 Form 10-K Report, EXHIBIT
4.11)
* EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999.
(File No. 1-1430, Form 8-K Report dated
June 6, 1989, EXHIBIT 4)
* EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.3)
* EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.4)
* EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.15)
* EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.16)
* EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003.
(File No. 1-1430, Form 8-K Report dated
August 16, 1991, Exhibit 4(a))
* EXHIBIT 4.13 - Articles of Continuance of Societe
d'Aluminium Reynolds du Canada,
Ltee/Reynolds Aluminum Company of
Canada, Ltd. (formerly known as Canadian
Reynolds Metals Company, Limited --
Societe Canadienne de Metaux Reynolds,
Limitee) ("REYCAN"), as amended. (File
No. 1-1430, 1995 Form 10-K Report,
EXHIBIT 4.13)
* EXHIBIT 4.14 - By-Laws of REYCAN, as amended. (File No. 1-
1430, 1995 Form 10-K Report, EXHIBIT
4.14)
* EXHIBIT 4.15 - Articles of Incorporation of Societe
Canadienne de Metaux Reynolds,
Ltee/Canadian Reynolds Metals Company,
Ltd. ("CRM"), as amended. (File No. 1-
1430, 1995 Form 10-K Report, EXHIBIT
4.15)
* EXHIBIT 4.16 - By-Laws of CRM, as amended. (File No. 1-
1430, 1995 Form 10-K Report, EXHIBIT
4.16)
_______________________
*Incorporated by reference.
* EXHIBIT 4.17 - Indenture dated as of April 1, 1993
among REYCAN, Reynolds Metals Company
and The Bank of New York, as Trustee.
(File No. 1-1430, Form 8-K Report dated
July 14, 1993, EXHIBIT 4(a))
* EXHIBIT 4.18 - First Supplemental Indenture, dated as of
December 18, 1995 among REYCAN, Reynolds
Metals Company, CRM and The Bank of New
York, as Trustee. (File No. 1-1430,
1995 Form 10-K Report, EXHIBIT 4.18)
* EXHIBIT 4.19 - Form of 6-5/8% Guaranteed Amortizing Note due
July 15, 2002. (File No. 1-1430, Form 8-
K Report dated July 14, 1993, EXHIBIT
4(d))
EXHIBIT 9 - None
=* EXHIBIT 10.1 - Reynolds Metals Company 1987
Nonqualified Stock Option Plan.
(Registration Statement No. 33-13822 on
Form S-8, dated April 28, 1987, EXHIBIT
28.1)
=* EXHIBIT 10.2 - Reynolds Metals Company 1992
Nonqualified Stock Option Plan.
(Registration Statement No. 33-44400 on
Form S-8, dated December 9, 1991,
EXHIBIT 28.1)
=* EXHIBIT 10.3 - Reynolds Metals Company Performance
Incentive Plan, as amended and restated
effective January 1, 1996. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended March 31, 1995, EXHIBIT 10.4)
=* EXHIBIT 10.4 - Agreement dated December 9, 1987 between
Reynolds Metals Company and Jeremiah J.
Sheehan. (File No. 1-1430, 1987 Form 10-
K Report, EXHIBIT 10.9)
=* EXHIBIT 10.5 - Supplemental Death Benefit Plan for
Officers. (File No. 1-1430, 1986 Form
10-K Report, EXHIBIT 10.8)
=* EXHIBIT 10.6 - Financial Counseling Assistance Plan for
Officers. (File No. 1-1430, 1987 Form
10-K Report, EXHIBIT 10.11)
=* EXHIBIT 10.7 - Management Incentive Deferral Plan.
(File No. 1-1430, 1987 Form 10-K Report,
EXHIBIT 10.12)
=* EXHIBIT 10.8 - Deferred Compensation Plan for Outside
Directors as Amended and Restated
Effective December 1, 1993. (File No. 1-
1430, 1993 Form 10-K Report, EXHIBIT
10.12)
=* EXHIBIT 10.9 - Form of Indemnification Agreement for
Directors and Officers. (File No. 1-
1430, Form 8-K Report dated April 29,
1987, EXHIBIT 28.3)
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 601 of Regulation S-K.
=* EXHIBIT 10.10 - Form of Executive Severance Agreement between
Reynolds Metals Company and key
executive personnel, including each of
the individuals (other than Donna C.
Dabney) listed in Item 4A of this
report. (File No. 1-1430, 1987 Form 10-
K Report, EXHIBIT 10.18)
=* EXHIBIT 10.11 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective May 20, 1988. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended June 30, 1988, EXHIBIT 19(a))
=* EXHIBIT 10.12 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective October 21, 1988. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1988, EXHIBIT 19(a))
=* EXHIBIT 10.13 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective January 1, 1987. (File No. 1-
1430, 1988 Form 10-K Report, EXHIBIT
10.22)
=* EXHIBIT 10.14 - Form of Stock Option and Stock Appreciation
Right Agreement, as approved February
16, 1990 by the Compensation Committee
of the Company's Board of Directors.
(File No. 1-1430, 1989 Form 10-K Report,
EXHIBIT 10.24)
=* EXHIBIT 10.15 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective January 18, 1991. (File No. 1-
1430, 1990 Form 10-K Report, EXHIBIT
10.26)
=* EXHIBIT 10.16 - Letter Agreement dated January 18, 1991
between Reynolds Metals Company and
William O. Bourke. (File No. 1-1430,
1990 Form 10-K Report, EXHIBIT 10.27)
=* EXHIBIT 10.17 - Form of Stock Option Agreement, as approved
April 22, 1992 by the Compensation
Committee of the Company's Board of
Directors. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended March 31,
1992, EXHIBIT 28(a))
=* EXHIBIT 10.18 - Consulting Agreement dated May 1, 1992
between Reynolds Metals Company and
William O. Bourke. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
March 31, 1992, EXHIBIT 28(b))
=* EXHIBIT 10.19 - Renewal dated February 18, 1994 of
Consulting Agreement dated May 1, 1992
between Reynolds Metals Company and
William O. Bourke. (File No. 1-1430,
1993 Form 10-K Report, EXHIBIT 10.28)
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
=* EXHIBIT 10.20 - Reynolds Metals Company Restricted Stock
Plan for Outside Directors.
(Registration Statement No. 33-53851 on
Form S-8, dated May 27, 1994, EXHIBIT
4.6)
=* EXHIBIT 10.21 - Reynolds Metals Company New Management
Incentive Deferral Plan. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended June 30, 1994, EXHIBIT 10.30)
=* EXHIBIT 10.22 - Reynolds Metals Company Salary Deferral
Plan for Executives. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
June 30, 1994, EXHIBIT 10.31)
=* EXHIBIT 10.23 - Reynolds Metals Company Supplemental
Long Term Disability Plan for
Executives. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1994, EXHIBIT 10.32)
=* EXHIBIT 10.24 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective August 19, 1994. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1994, EXHIBIT 10.34)
=* EXHIBIT 10.25 - Amendment to Reynolds Metals Company
1992 Nonqualified Stock Option Plan
effective August 19, 1994. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1994, EXHIBIT 10.35)
=* EXHIBIT 10.26 - Amendment to Reynolds Metals Company New
Management Incentive Deferral Plan
effective January 1, 1995. (File No. 1-
1430, 1994 Form 10-K Report, EXHIBIT
10.36)
=* EXHIBIT 10.27 - Form of Split Dollar Life Insurance Agreement
(Trustee Owner, Trustee Pays Premiums).
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1995, EXHIBIT
10.34)
=* EXHIBIT 10.28 - Form of Split Dollar Life Insurance Agreement
(Trustee Owner, Employee Pays Premium).
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1995, EXHIBIT
10.35)
=* EXHIBIT 10.29 - Form of Split Dollar Life Insurance Agreement
(Employee Owner, Employee Pays Premium).
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1995, EXHIBIT
10.36)
=* EXHIBIT 10.30 - Form of Split Dollar Life Insurance Agreement
(Third Party Owner, Third Party Pays
Premiums). (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1995, EXHIBIT 10.37)
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
=* EXHIBIT 10.31 - Form of Split Dollar Life Insurance Agreement
(Third Party Owner, Employee Pays
Premiums). (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1995, EXHIBIT 10.38)
=* EXHIBIT 10.32 - Reynolds Metals Company 1996
Nonqualified Stock Option Plan.
(Registration Statement No. 333-03947 on
Form S-8, dated May 17, 1996, EXHIBIT
4.6)
=* EXHIBIT 10.33 - Amendment to Reynolds Metals Company
1992 Nonqualified Stock Option Plan
effective January 1, 1993.
(Registration Statement No. 333-03947 on
Form S-8, dated May 17, 1996, EXHIBIT
99)
=* EXHIBIT 10.34 - Form of Stock Option Agreement, as approved
May 17, 1996 by the Compensation
Committee of the Company's Board of
Directors. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1996, EXHIBIT 10.41)
=* EXHIBIT 10.35 - Form of Three Party Stock Option Agreement,
as approved May 17, 1996 by the
Compensation Committee of the Company's
Board of Directors. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
June 30, 1996, EXHIBIT 10.42)
=* EXHIBIT 10.36 - Stock Option Agreement dated August 30, 1996
between Reynolds Metals Company and
Jeremiah J. Sheehan. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
September 30, 1996, EXHIBIT 10.43)
=* EXHIBIT 10.37 - Amendment to Deferred Compensation Plan
for Outside Directors effective August
15, 1996. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended September
30, 1996, EXHIBIT 10.44)
= EXHIBIT 10.38 - Amendment to Reynolds Metals Company
New Management Incentive Deferral Plan
effective January 1, 1996
= EXHIBIT 10.39 - Amendment to Reynolds Metals Company
Performance Incentive Plan effective
January 1, 1996
= EXHIBIT 10.40 - Reynolds Metals Company Supplemental
Incentive Plan
= EXHIBIT 10.41 - Reynolds Metals Company Stock Plan for
Outside Directors
= EXHIBIT 10.42 - Special Executive Severance Package for
Certain Employees who Terminate
Employment between January 1, 1997 and
June 30, 1998, as approved by the
Compensation Committee of the Company's
Board of Directors on January 17, 1997
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
= EXHIBIT 10.43 - Special Award Program for Certain
Executives or Key Employees, as approved
by the Compensation Committee of the
Company's Board of Directors on January
17, 1997
EXHIBIT 11 - Computation of Earnings Per Share
EXHIBIT 12 - Not applicable
EXHIBIT 13 - Not applicable
EXHIBIT 16 - Not applicable
EXHIBIT 18 - None
EXHIBIT 21 - List of Subsidiaries of Reynolds Metals
Company
EXHIBIT 22 - None
EXHIBIT 23 - Consent of Independent Auditors
EXHIBIT 24 - Powers of Attorney
EXHIBIT 27 - Financial Data Schedule
____________________________
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
Pursuant to Item 601 of Regulation S-K, certain instruments
with respect to long-term debt of the Company are omitted
because such debt does not exceed 10 percent of the total
assets of the Company and its subsidiaries on a consolidated
basis. The Company agrees to furnish a copy of any such
instrument to the Commission upon request.
(b) Reports on Form 8-K
During the fourth quarter of 1996, the
Registrant filed with the Commission a Current Report on Form
8-K dated December 2, 1996 reporting under Item 5 that it
would redeem on December 31, 1996 all of its outstanding 7%
PRIDES(SM), Convertible Preferred Stock, stated value $47.25
per share.
_______________________
(SM) "PRIDES" is a service mark of Merrill Lynch & Co., Inc.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
REYNOLDS METALS COMPANY
By Jeremiah J. Sheehan
Jeremiah J. Sheehan, Chairman of
the Board and Chief Executive
Officer
Date March 21, 1997
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.
By Henry S. Savedge, Jr. By Jeremiah J. Sheehan
Henry S. Savedge, Jr., Director Jeremiah J. Sheehan, Director
Executive Vice President and Chairman of the Board and
Chief Financial Officer Chief Executive Officer
(Principal Financial Officer) (Principal Executive Officer)
Date March 21, 1997 Date March 21, 1997
By *Patricia C. Barron By *William O. Bourke
Patricia C. Barron, Director William O. Bourke, Director
Date March 21, 1997 Date March 21, 1997
By *John R. Hall By *Robert L. Hintz
John R. Hall, Director Robert L. Hintz, Director
Date March 21, 1997 Date March 21, 1997
By *William H. Joyce By *Mylle Bell Mangum
William H. Joyce, Director Mylle Bell Mangum, Director
Date March 21, 1997 Date March 21, 1997
By *D. Larry Moore By Randolph N. Reynolds
D. Larry Moore, Director Randolph N. Reynolds, Director
Date March 21, 1997 Date March 21, 1997
By *James M. Ringler By *Samuel C. Scott, III
James M. Ringler, Director Samuel C. Scott, III, Director
Date March 21, 1997 Date March 21, 1997
By J. Wilt Wagner By *Joe B. Wyatt
J. Wilt Wagner, Director Joe B. Wyatt, Director
Date March 21, 1997 Date March 21, 1997
By Allen M. Earehart
Allen M. Earehart,
Vice President, Controller
(Principal Accounting Officer)
Date March 21, 1997
*By D. Michael Jones
D. Michael Jones, Attorney-in-Fact
Date March 21, 1997
(THIS PAGE LEFT BLANK INTENTIONALLY)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM 10-K
For the fiscal year ended December 31, 1996
Commission File No. 1-1430
REYNOLDS METALS COMPANY
Attached herewith are
Exhibits 3.1, 3.2, 10.38, 10.39, 10.40, 10.41, 10.42, 10.43,
11, 21, 23, 24 and 27
INDEX
EXHIBIT 2 - None
EXHIBIT 3.1 - Restated Certificate of Incorporation,
as amended
EXHIBIT 3.2 - By-Laws, as amended
EXHIBIT 4.1 - Restated Certificate of Incorporation.
See EXHIBIT 3.1.
EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2.
* EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the
"Indenture") between Reynolds Metals
Company and The Bank of New York, as
Trustee, relating to Debt Securities.
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended March 31, 1989,
EXHIBIT 4(c))
_______________________
*Incorporated by reference.
* EXHIBIT 4.4 - Amendment No. 1 dated as of November 1,
1991 to the Indenture. (File No. 1-
1430, 1991 Form 10-K Report, EXHIBIT
4.4)
* EXHIBIT 4.5 - Rights Agreement dated as of November
23, 1987 (the "Rights Agreement")
between Reynolds Metals Company and The
Chase Manhattan Bank, N.A. (File No. 1-
1430, Registration Statement on Form 8-A
dated November 23, 1987, pertaining to
Preferred Stock Purchase Rights, EXHIBIT
1)
* EXHIBIT 4.6 - Amendment No. 1 dated as of December 19,
1991 to the Rights Agreement. (File No.
1-1430, 1991 Form 10-K Report, EXHIBIT
4.11)
* EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999.
(File No. 1-1430, Form 8-K Report dated
June 6, 1989, EXHIBIT 4)
* EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.3)
* EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note.
(Registration Statement No. 33-30882 on
Form S-3, dated August 31, 1989, EXHIBIT
4.4)
* EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.15)
* EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term
Note. (File No. 1-1430, 1991 Form 10-K
Report, EXHIBIT 4.16)
* EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003.
(File No. 1-1430, Form 8-K Report dated
August 16, 1991, Exhibit 4(a))
* EXHIBIT 4.13 - Articles of Continuance of Societe
d'Aluminium Reynolds du Canada,
Ltee/Reynolds Aluminum Company of
Canada, Ltd. (formerly known as Canadian
Reynolds Metals Company, Limited --
Societe Canadienne de Metaux Reynolds,
Limitee) ("REYCAN"), as amended. (File
No. 1-1430, 1995 Form 10-K Report,
EXHIBIT 4.13)
* EXHIBIT 4.14 - By-Laws of REYCAN, as amended. (File No. 1-
1430, 1995 Form 10-K Report, EXHIBIT
4.14)
* EXHIBIT 4.15 - Articles of Incorporation of Societe
Canadienne de Metaux Reynolds,
Ltee/Canadian Reynolds Metals Company,
Ltd. ("CRM"), as amended. (File No. 1-
1430, 1995 Form 10-K Report, EXHIBIT
4.15)
* EXHIBIT 4.16 - By-Laws of CRM, as amended. (File No. 1-
1430, 1995 Form 10-K Report, EXHIBIT
4.16)
_______________________
*Incorporated by reference.
* EXHIBIT 4.17 - Indenture dated as of April 1, 1993
among REYCAN, Reynolds Metals Company
and The Bank of New York, as Trustee.
(File No. 1-1430, Form 8-K Report dated
July 14, 1993, EXHIBIT 4(a))
* EXHIBIT 4.18 - First Supplemental Indenture, dated as of
December 18, 1995 among REYCAN, Reynolds
Metals Company, CRM and The Bank of New
York, as Trustee. (File No. 1-1430,
1995 Form 10-K Report, EXHIBIT 4.18)
* EXHIBIT 4.19 - Form of 6-5/8% Guaranteed Amortizing Note due
July 15, 2002. (File No. 1-1430, Form 8-
K Report dated July 14, 1993, EXHIBIT
4(d))
EXHIBIT 9 - None
=* EXHIBIT 10.1 - Reynolds Metals Company 1987
Nonqualified Stock Option Plan.
(Registration Statement No. 33-13822 on
Form S-8, dated April 28, 1987, EXHIBIT
28.1)
=* EXHIBIT 10.2 - Reynolds Metals Company 1992
Nonqualified Stock Option Plan.
(Registration Statement No. 33-44400 on
Form S-8, dated December 9, 1991,
EXHIBIT 28.1)
=* EXHIBIT 10.3 - Reynolds Metals Company Performance
Incentive Plan, as amended and restated
effective January 1, 1996. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended March 31, 1995, EXHIBIT 10.4)
=* EXHIBIT 10.4 - Agreement dated December 9, 1987 between
Reynolds Metals Company and Jeremiah J.
Sheehan. (File No. 1-1430, 1987 Form 10-
K Report, EXHIBIT 10.9)
=* EXHIBIT 10.5 - Supplemental Death Benefit Plan for
Officers. (File No. 1-1430, 1986 Form
10-K Report, EXHIBIT 10.8)
=* EXHIBIT 10.6 - Financial Counseling Assistance Plan for
Officers. (File No. 1-1430, 1987 Form
10-K Report, EXHIBIT 10.11)
=* EXHIBIT 10.7 - Management Incentive Deferral Plan.
(File No. 1-1430, 1987 Form 10-K Report,
EXHIBIT 10.12)
=* EXHIBIT 10.8 - Deferred Compensation Plan for Outside
Directors as Amended and Restated
Effective December 1, 1993. (File No. 1-
1430, 1993 Form 10-K Report, EXHIBIT
10.12)
=* EXHIBIT 10.9 - Form of Indemnification Agreement for
Directors and Officers. (File No. 1-
1430, Form 8-K Report dated April 29,
1987, EXHIBIT 28.3)
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 601 of Regulation S-K.
=* EXHIBIT 10.10 - Form of Executive Severance Agreement between
Reynolds Metals Company and key
executive personnel, including each of
the individuals (other than Donna C.
Dabney) listed in Item 4A of this
report. (File No. 1-1430, 1987 Form 10-
K Report, EXHIBIT 10.18)
=* EXHIBIT 10.11 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective May 20, 1988. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended June 30, 1988, EXHIBIT 19(a))
=* EXHIBIT 10.12 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective October 21, 1988. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1988, EXHIBIT 19(a))
=* EXHIBIT 10.13 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective January 1, 1987. (File No. 1-
1430, 1988 Form 10-K Report, EXHIBIT
10.22)
=* EXHIBIT 10.14 - Form of Stock Option and Stock Appreciation
Right Agreement, as approved February
16, 1990 by the Compensation Committee
of the Company's Board of Directors.
(File No. 1-1430, 1989 Form 10-K Report,
EXHIBIT 10.24)
=* EXHIBIT 10.15 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective January 18, 1991. (File No. 1-
1430, 1990 Form 10-K Report, EXHIBIT
10.26)
=* EXHIBIT 10.16 - Letter Agreement dated January 18, 1991
between Reynolds Metals Company and
William O. Bourke. (File No. 1-1430,
1990 Form 10-K Report, EXHIBIT 10.27)
=* EXHIBIT 10.17 - Form of Stock Option Agreement, as approved
April 22, 1992 by the Compensation
Committee of the Company's Board of
Directors. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended March 31,
1992, EXHIBIT 28(a))
=* EXHIBIT 10.18 - Consulting Agreement dated May 1, 1992
between Reynolds Metals Company and
William O. Bourke. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
March 31, 1992, EXHIBIT 28(b))
=* EXHIBIT 10.19 - Renewal dated February 18, 1994 of
Consulting Agreement dated May 1, 1992
between Reynolds Metals Company and
William O. Bourke. (File No. 1-1430,
1993 Form 10-K Report, EXHIBIT 10.28)
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
=* EXHIBIT 10.20 - Reynolds Metals Company Restricted Stock
Plan for Outside Directors.
(Registration Statement No. 33-53851 on
Form S-8, dated May 27, 1994, EXHIBIT
4.6)
=* EXHIBIT 10.21 - Reynolds Metals Company New Management
Incentive Deferral Plan. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended June 30, 1994, EXHIBIT 10.30)
=* EXHIBIT 10.22 - Reynolds Metals Company Salary Deferral
Plan for Executives. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
June 30, 1994, EXHIBIT 10.31)
=* EXHIBIT 10.23 - Reynolds Metals Company Supplemental
Long Term Disability Plan for
Executives. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1994, EXHIBIT 10.32)
=* EXHIBIT 10.24 - Amendment to Reynolds Metals Company
1987 Nonqualified Stock Option Plan
effective August 19, 1994. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1994, EXHIBIT 10.34)
=* EXHIBIT 10.25 - Amendment to Reynolds Metals Company
1992 Nonqualified Stock Option Plan
effective August 19, 1994. (File No. 1-
1430, Form 10-Q Report for the Quarter
Ended September 30, 1994, EXHIBIT 10.35)
=* EXHIBIT 10.26 - Amendment to Reynolds Metals Company New
Management Incentive Deferral Plan
effective January 1, 1995. (File No. 1-
1430, 1994 Form 10-K Report, EXHIBIT
10.36)
=* EXHIBIT 10.27 - Form of Split Dollar Life Insurance Agreement
(Trustee Owner, Trustee Pays Premiums).
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1995, EXHIBIT
10.34)
=* EXHIBIT 10.28 - Form of Split Dollar Life Insurance Agreement
(Trustee Owner, Employee Pays Premium).
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1995, EXHIBIT
10.35)
=* EXHIBIT 10.29 - Form of Split Dollar Life Insurance Agreement
(Employee Owner, Employee Pays Premium).
(File No. 1-1430, Form 10-Q Report for
the Quarter Ended June 30, 1995, EXHIBIT
10.36)
=* EXHIBIT 10.30 - Form of Split Dollar Life Insurance Agreement
(Third Party Owner, Third Party Pays
Premiums). (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1995, EXHIBIT 10.37)
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
=* EXHIBIT 10.31 - Form of Split Dollar Life Insurance Agreement
(Third Party Owner, Employee Pays
Premiums). (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1995, EXHIBIT 10.38)
=* EXHIBIT 10.32 - Reynolds Metals Company 1996
Nonqualified Stock Option Plan.
(Registration Statement No. 333-03947 on
Form S-8, dated May 17, 1996, EXHIBIT
4.6)
=* EXHIBIT 10.33 - Amendment to Reynolds Metals Company
1992 Nonqualified Stock Option Plan
effective January 1, 1993.
(Registration Statement No. 333-03947 on
Form S-8, dated May 17, 1996, EXHIBIT
99)
=* EXHIBIT 10.34 - Form of Stock Option Agreement, as approved
May 17, 1996 by the Compensation
Committee of the Company's Board of
Directors. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended June 30,
1996, EXHIBIT 10.41)
=* EXHIBIT 10.35 - Form of Three Party Stock Option Agreement,
as approved May 17, 1996 by the
Compensation Committee of the Company's
Board of Directors. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
June 30, 1996, EXHIBIT 10.42)
=* EXHIBIT 10.36 - Stock Option Agreement dated August 30, 1996
between Reynolds Metals Company and
Jeremiah J. Sheehan. (File No. 1-1430,
Form 10-Q Report for the Quarter Ended
September 30, 1996, EXHIBIT 10.43)
=* EXHIBIT 10.37 - Amendment to Deferred Compensation Plan
for Outside Directors effective August
15, 1996. (File No. 1-1430, Form 10-Q
Report for the Quarter Ended September
30, 1996, EXHIBIT 10.44)
= EXHIBIT 10.38 - Amendment to Reynolds Metals Company
New Management Incentive Deferral Plan
effective January 1, 1996
= EXHIBIT 10.39 - Amendment to Reynolds Metals Company
Performance Incentive Plan effective
January 1, 1996
= EXHIBIT 10.40 - Reynolds Metals Company Supplemental
Incentive Plan
= EXHIBIT 10.41 - Reynolds Metals Company Stock Plan for
Outside Directors
= EXHIBIT 10.42 - Special Executive Severance Package for
Certain Employees who Terminate
Employment between January 1, 1997 and
June 30, 1998, as approved by the
Compensation Committee of the Company's
Board of Directors on January 17, 1997
____________________________
* Incorporated by reference.
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
= EXHIBIT 10.43 - Special Award Program for Certain
Executives or Key Employees, as approved
by the Compensation Committee of the
Company's Board of Directors on January
17, 1997
EXHIBIT 11 - Computation of Earnings Per Share
EXHIBIT 12 - Not applicable
EXHIBIT 13 - Not applicable
EXHIBIT 16 - Not applicable
EXHIBIT 18 - None
EXHIBIT 21 - List of Subsidiaries of Reynolds Metals
Company
EXHIBIT 22 - None
EXHIBIT 23 - Consent of Independent Auditors
EXHIBIT 24 - Powers of Attorney
EXHIBIT 27 - Financial Data Schedule
____________________________
= Management contract or compensatory plan or arrangement
required to be filed as an exhibit pursuant to
Item 601 of Regulation S-K.
EXHIBIT 3.1
RESTATED
CERTIFICATE OF INCORPORATION
of
REYNOLDS METALS COMPANY
___________
INTRODUCTION
This Restated Certificate of Incorporation has been duly adopted by
the Board of Directors of Reynolds Metals Company in accordance with
Section 245 of the General Corporation Law of the State of Delaware. It
only restates and integrates, and does not further amend, the provisions of
the corporation's Certificate of Incorporation as heretofore amended or
supplemented, and there is no discrepancy between those provisions and this
Restated Certificate of Incorporation. The corporation's original
Certificate of Incorporation was filed with the Delaware Secretary of State
on July 18, 1928.
ARTICLE I
The name of the corporation is
REYNOLDS METALS COMPANY
ARTICLE II
Its registered office in the State of Delaware is located at 1013
Centre Road, in the City of Wilmington, County of New Castle, Delaware.
The name and address of its registered agent is CORPORATION SERVICE
COMPANY, a corporation of the State of Delaware, located at 1013 Centre
Road, Wilmington, New Castle County, Delaware.
ARTICLE III
The nature of the business and the objects and purposes proposed to
be transacted, promoted or carried on are:
1. To manufacture, purchase, or otherwise acquire, hold, own,
mortgage, pledge, sell, lease, assign and transfer, or otherwise dispose
of, to invest, trade, deal in and deal with, goods, wares and merchandise
and real and personal property of every class and description.
2. To erect, or cause to be erected, on any lands owned, held, and
occupied by the corporation, buildings or other structures with their
appurtenances and to rebuild, enlarge, alter, or improve any buildings or
other structures now, or hereafter erected, on any lands so owned, held, or
occupied.
3. To enter into, make and perform contracts of every kind for any
lawful purpose with any person, firm, association or corporation,
municipality, body politic, country, territory, State, government or colony
or dependency thereof.
4. To acquire the goodwill, rights and property and the whole or
any part of the assets, tangible or intangible, and to undertake or in any
way assume the liabilities of any person, firm, association or corporation;
to pay for the said goodwill, rights, property, and assets in cash, the
stock of this company, bonds or otherwise, or by undertaking the whole or
any part of the liabilities of the transferor; to hold or in any manner to
dispose of the whole or any part of the property so purchased; to conduct
in any lawful manner the whole or any part of any business so acquired, and
to exercise all the powers necessary or convenient in and about the conduct
and management of such business.
5. To apply for, purchase, register or in any manner to acquire,
and to hold, own, use, operate and introduce, and to sell, lease, assign,
pledge, or in any manner dispose of, and in any manner deal with patents,
patent rights, licenses, copyrights, trademarks, trade names, and to
acquire, own, use or in any manner dispose of any and all inventions,
improvements and processes, labels, designs, brands, or other rights, and
to work, operate, or develop the same, and to carry on any business,
manufacturing or otherwise, which may directly or indirectly effectuate
these objects or any of them.
6. To guarantee, purchase, receive, hold, own, sell, assign,
transfer, mortgage, pledge or otherwise dispose of shares of capital stock,
bonds, mortgages, debentures, notes or other securities, obligations,
contracts or evidences of indebtedness of any corporation, company or
association (organized under the laws of this State or any other State,
country, nation or government) or of any state, country, nation,
municipality, government or a body politic; to receive, collect and dispose
of interest, dividends and income upon, of and from any of the bonds,
mortgages, debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other property held
or owned by it and to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property any and all rights,
powers and privileges of individual ownership thereof, including the right
to vote thereon.
7. Without limit as to amount to draw, make, accept, endorse,
discount, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures, and other negotiable or transferable
instruments and evidences of indebtedness whether secured by mortgage or
otherwise, as well as to secure the same by mortgage or otherwise, so far
as may be permitted by the laws of the State of Delaware.
8. To purchase, in so far as the same may be done without impairing
the capital of the corporation, and to hold, pledge and reissue shares of
its own capital stock; but such stock, so acquired and held, shall not be
entitled to vote nor to receive dividends.
9. To have one or more offices, conduct its business and promote
its objects within and without the State of Delaware, in other States, the
District of Columbia, the territories, colonies and dependencies of the
United States, and in foreign countries, without restriction as to place or
amount, but subject to the laws of such State, District, territory, colony,
dependency or country.
10. To do any or all of the things herein set forth to the same
extent as natural persons might or could do and in any part of the world,
as principals, agents, contractors, trustees, or otherwise, and either
alone or in company with others.
11. In general to carry on any other business in connection
therewith, whether manufacturing or otherwise, not forbidden by the laws of
the State of Delaware, and with all the powers conferred upon corporations
by the laws of the State of Delaware.
But if this corporation shall undertake to do any of the things
hereinabove set forth in any State other than Delaware, in the District of
Columbia, in any territory, colony, or dependency of the United States, or
in any foreign country or in any colony or dependency thereof, then as to
such jurisdictions and each of them this corporation shall be deemed to
have such powers in so far only as such jurisdictions respectively permit
corporations within their several respective jurisdictions to be organized
for or to execute such powers.
It is the intention that each of the objects, purposes and powers
specified in each of the paragraphs of this third article of this
Certificate of Incorporation shall, except where otherwise specified, be
nowise limited or restricted by reference to or inference from the terms of
any other paragraph or of any other article in this Certificate of
Incorporation, but that the objects, purposes and powers specified in this
article and in each of the articles or paragraphs of this Certificate shall
be regarded as independent objects, purposes and powers, and the
enumeration of specific purposes and powers shall not be construed to
restrict in any manner the general terms and powers of this corporation,
nor shall the expression of one thing be deemed to exclude another,
although it be of like nature.
ARTICLE IV
The total number of shares of stock of all classes that may be issued
by the Corporation is Two Hundred Twenty-one Million (221,000,000) shares,
of which Twenty Million (20,000,000) shares shall be preferred stock
without par value and shall be designated "Preferred Stock", One Million
(1,000,000) shares shall be second preferred stock of the par value of One
Hundred Dollars ($100.00) each and shall be designated "Second Preferred
Stock" and Two Hundred Million (200,000,000) shares shall be common stock
without par value and shall be designated "Common Stock".
I. PREFERRED STOCK
1. The Preferred Stock may be issued in one or more series, from
time to time, with each such series to have such designation, powers,
preferences and relative, participating, optional or other special rights,
and qualifications, limitations or restrictions thereof, as shall be stated
and expressed in the resolution or resolutions providing for the issue of
such series adopted by the Board of Directors of the Corporation (referred
to herein as the "Issuing Resolution" for such series), subject to the
limitations prescribed by law and in accordance with the provisions hereof,
the Board of Directors being hereby expressly vested with authority to
adopt any such resolution or resolutions.
2. The authority of the Board of Directors with respect to each
series of the Preferred Stock shall include, but not be limited to, the
determination or fixing of the following:
(a) The distinctive designation and number of shares comprising
such series, which number may (except where otherwise provided by the
Board of Directors in creating such series) be increased or decreased
(but not below the number of shares then outstanding) from time to
time by like action of the Board of Directors;
(b) The dividend rate of such series, the conditions upon which
and times at which such dividends shall be payable, the relation
which such dividends shall bear to the dividends payable on any other
series of the Preferred Stock, and whether such dividends shall be
cumulative or noncumulative;
(c) The conditions, if any, upon which the shares of such
series shall be subject to redemption by the Corporation and the
times, prices and other terms and provisions upon which the shares of
the series may be redeemed;
(d) Whether or not the shares of the series shall be subject to
the operation of a retirement or sinking fund to be applied to the
purchase or redemption of such shares and, if such retirement or
sinking fund be established, the annual amount thereof and the terms
and provisions governing the operation of such retirement or sinking
fund;
(e) Whether or not the shares of the series shall be
convertible into or exchangeable for shares of any other class or
classes, with or without par value, or of any other series of the
same class, and, if provision is made for conversion or exchange, the
times, prices, rates, adjustments, and other terms and conditions of
such conversion or exchange;
(f) Whether or not the shares of the series shall have voting
rights, in addition to the voting rights provided by law, and, if so,
the terms of such voting rights;
(g) The rights of the shares of the series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the Corporation;
(h) The relative seniority, parity or junior rank of such
series with respect to any other series of the Preferred Stock; and
(i) Any other powers, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of the shares of such series, as the Board of
Directors may deem advisable and as shall not be inconsistent with
the provisions of this Certificate of Incorporation.
3. No holder of shares of any series of the Preferred Stock shall
have any preemptive or preferential right of subscription to any stock of
any class of the Corporation, or to any obligations convertible into stock
of any class, or to any warrant or option for the purchase of stock of any
class, except to the extent granted in the Issuing Resolution creating such
series.
4. The Board of Directors of the Corporation shall be empowered to
provide in any Issuing Resolution with respect to any series of the
Preferred Stock that any of the voting powers, designations, preferences,
rights and qualifications, limitations or restrictions of such series may
be made dependent upon facts ascertainable outside this Certificate of
Incorporation or any amendment hereto, or the Issuing Resolution with
respect to such series, so long as the manner in which such facts shall
operate upon the voting powers, designations, preferences, rights and
qualifications, limitations or restrictions of such series is clearly and
expressly set forth in this Certification of Incorporation, as amended, or
in the Issuing Resolution for such series.
5. The holders of shares of the Preferred Stock of each series
shall be entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends,
dividends at the rate fixed by the Board of Directors in the Issuing
Resolution for such series, and no more, before
(i) any dividends (other than dividends payable in Second
Preferred Stock or in Common Stock or in any other class of stock ranking
junior to the Preferred Stock both as to dividends and upon liquidation,
dissolution or winding up) shall be declared and paid, or set apart for
payment, on, or
(ii) any moneys or other consideration (other than shares of
Second Preferred Stock or Common Stock or any other class of stock ranking
junior to the Preferred Stock both as to dividends and upon liquidation,
dissolution or winding up) is set aside for or applied to the purchase or
redemption of,
shares of the Second Preferred Stock or the Common Stock or any other class
of stock ranking junior to the Preferred Stock as to dividends or upon
liquidation, dissolution or winding up.
6. The holders of shares of the Preferred Stock of each series
shall be entitled upon liquidation, dissolution or winding up of the
Corporation, whether involuntary or voluntary, to such preferences as are
provided in the Issuing Resolution creating such series of the Preferred
Stock, and no more, before any distribution of the assets of the
Corporation shall be made to or set apart for the holders of shares of the
Second Preferred Stock or the Common Stock or any other class of stock
ranking junior to the Preferred Stock upon liquidation, dissolution or
winding up. For the purposes of this paragraph 6, a consolidation or
merger of the Corporation with or into one or more other corporations
(whether or not the Corporation is the corporation surviving such
consolidation or merger), or a sale, lease or exchange of all or
substantially all of the assets of the Corporation, shall not be deemed to
be a liquidation, dissolution or winding up, voluntary or involuntary.
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. Designation and Amount. The distinctive designation of
the series shall be "Series A Junior Participating Preferred Stock." The
shares constituting such series shall be without par value. The number of
shares constituting such series shall be 2,000,000, subject to increase or
decrease by action of the Board of Directors as evidenced by a certificate
of designations.
Section 2. Dividends and Distributions. (A) Subject to the prior
rights of the holders of any shares of any series of Preferred Stock
ranking prior to the shares of Series A Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally available for the
payment of dividends, quarterly dividends payable in cash on the first day
of January, April, July and October in each year or such other days on
which dividends are declared with respect to the Common Stock (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to the greater of (a) $10 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions (other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise)), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series A Junior
Participating Preferred Stock. If the Corporation shall at any time after
November 20, 1987 (the "Rights Declaration Date") (i) declare any dividend
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which holders of shares of
Series A Junior Participating Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, if no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$10 per share on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless (i) such date of issue is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or (ii) such
date of issue is either a Quarterly Dividend Payment Date or a date after
the record date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Junior
Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to
the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which
holders of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) (i) If and whenever at any time or times dividends payable on
shares of any Series A Junior Participating Preferred Stock shall have been
in arrears and unpaid in an aggregate amount equal to or exceeding the
amount of dividends payable thereon for six quarterly dividend periods,
then the holders of shares of any Series A Junior Participating Preferred
Stock, together with the holders of any other series of Preferred Stock as
to which dividends are in arrears and unpaid in an aggregate amount equal
to or exceeding the amount of dividends payable thereon for six quarterly
dividend periods, shall have the exclusive right, voting separately as a
class with such other series, to elect two directors of the Corporation,
such directors to be in addition to the number of directors constituting
the Board of Directors immediately prior to the accrual of such right, the
remaining directors to be elected by the other class or classes of stock
entitled to vote therefor at each meeting of stockholders held for the
purpose of electing directors.
(ii) Such voting right may be exercised initially either at a
special meeting of the holders of the Preferred Stock having such voting
right, called as hereinafter provided, or at any annual meeting of
stockholders held for the purpose of electing directors, and thereafter at
each such annual meeting until such time as all cumulative dividends
accumulated and payable on the shares of Series A Junior Participating
Preferred Stock shall have been paid in full, at which time such voting
right shall terminate, subject to revesting on the basis set forth in
paragraph (C)(i).
(iii) At any time when such voting right shall have vested in
holders of the Preferred Stock, and if such right shall not already have
been initially exercised, a proper officer of the Corporation shall, upon
the written request of the record holders of 10% in number of shares of
Preferred Stock having such voting right then outstanding, addressed to the
Secretary of the Corporation, call a special meeting of the holders of
Preferred Stock having such voting right and of any other class or classes
of stock having voting power with respect to the election of such
directors. Such meeting shall be held at the earliest practicable date
upon the notice required for annual meetings of stockholders at the place
for holding annual meetings of stockholders of the Corporation or, if none,
at a place designated by the Board of Directors. If such meeting is not
called by the proper officers of the Corporation within 30 days after the
personal service of such written request upon the Secretary of the
Corporation, or within 30 days after mailing the same within the United
States of America, by registered mail, addressed to the Secretary of the
Corporation at its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the record holders
of 10% in number of shares of the Preferred Stock then outstanding which
would be entitled to vote at such meeting may designate in writing one of
their number to call such meeting at the expense of the Corporation, and
such meeting may be called by such person so designated upon the notice
required for annual meetings of stockholders and shall be held at the same
place as is elsewhere provided for in this paragraph (C)(iii) or such other
place as is selected by such designated stockholder. Any holder of the
Preferred Stock who would be entitled to vote at such meeting shall have
access to the stock books of the Corporation for the purpose of causing a
meeting of stockholders to be called pursuant to the provisions of this
paragraph (C). Notwithstanding the provisions of this paragraph (C), no
such special meeting shall be called during a period within 90 days
immediately preceding the date fixed for the next annual meeting of
stockholders.
(iv) At any meeting held for the purpose of electing directors at
which the holders of the Preferred Stock shall have the right to elect two
directors in addition to the number of directors constituting the Board of
Directors immediately prior to accrual of such right as provided herein,
the presence in person or by proxy of the holders of 40% of the then
outstanding shares of Preferred Stock having such right shall be required
and shall be sufficient to constitute a quorum of such class of the
election of directors by such class. At any such meeting or adjournment
thereof (i) the absence of a quorum of the holders of the Preferred Stock
having such right shall not prevent the election of directors other than
those to be elected by the holders of the Preferred Stock, and the absence
of a quorum or quorums of the holders of capital stock entitled to elect
such other directors shall not prevent the election of directors to be
elected by the holders of the Preferred Stock entitled to elect such
directors and (ii) except as otherwise required by law, in the absence of a
quorum of the holders of any class of stock entitled to vote for the
election of directors, a majority of the holders present in person or by
proxy of such class shall have the power to adjourn the meeting for the
election of directors which the holders of such class are entitled to
elect, from time to time, without notice other than announcement at the
meeting, until a quorum is present.
(v) Any vacancy in the Board of Directors in respect of a director
elected by holders of Preferred Stock pursuant to the voting right created
under this paragraph (C) shall be filled by vote of the remaining director
so elected, or if there be no such remaining director, by the holders of
Preferred Stock entitled to elect such director or directors at a special
meeting called in accordance with the procedures set forth in paragraph
(C)(iii), or, if no such special meeting is called, at the next annual
meeting of stockholders. Upon any termination of such voting right,
subject to the requirements of the General Corporation Law of Delaware, the
term of office of all directors elected by holders of Preferred Stock
voting separately as a class shall terminate.
(D) Except as set forth herein, or as required by law, holders of
Series A Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions. (A) Whenever quarterly dividends
or other dividends or distributions payable on the Series A Junior
Participating Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Junior Participating
Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the Series
A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(ii) purchase or otherwise acquire for consideration any shares of
Series A Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under Article IV,
Section I of its Certificate of Incorporation or paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by
(ii) 100 (as appropriately adjusted as set forth in paragraph C below to
reflect such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock) (such number in clause (ii), the
"Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred
Stock and Common Stock, on a per share basis, respectively.
(B) (i) If there are not sufficient assets available to permit
payment in full of the Series A Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which rank on a
parity with the Series A Junior Participating Preferred Stock, then such
assets as are available shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences.
(ii) If there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such assets as are available shall be
distributed ratably to the holders of Common Stock.
(C) If the Corporation shall at any time after November 20, 1987 (i)
declare any dividend payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Junior Participating Preferred
Stock shall at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the
Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of
shares of Series A Junior Participating Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred
Stock as to the payment of dividends and the distribution of assets, unless
the Issuing Resolution with respect to any such series shall provide
otherwise.
Section 10. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Junior Participating
Preferred Stock.
II. SECOND PREFERRED STOCK
1. The Second Preferred Stock may be issued, from time to time, in
one or more series, in any manner now or hereafter permitted by law.
2. The shares of each series shall have the designations,
preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof, which are
stated and expressed in this section II, and those which are stated and
expressed in the resolution or resolutions providing for the issue of such
series, adopted by the Board of Directors under the authority granted to
the Board of Directors by the provisions of paragraph 3 of this section II.
3. Authority is hereby expressly granted to and vested in the Board
of Directors of the Corporation to provide for the issue of the Second
Preferred Stock in one or more series, and with respect to each such series
to fix, by resolution or resolutions, the following:
(a) The maximum number of shares to constitute the series and
the distinctive designation of the shares;
(b) The annual dividend rate on the shares of the series and
the date or dates from which dividends shall accumulate;
(c) The amount which the holders of shares of the series shall
be entitled to receive upon the voluntary liquidation, dissolution or
winding up of the Corporation, which shall not be less than the par
value plus an amount equal to all accumulated and unpaid dividends to
the date of final distribution to such holders;
(d) Whether or not the shares of the series shall be subject to
redemption at the option of the Corporation and if so, the price
which holders of shares so redeemed shall be entitled to receive,
which price may vary at different redemption dates but shall in no
event be less than the par value per share plus an amount equal to
all accumulated and unpaid dividends to the date of redemption, and
if such price varies, the period during which each such variation in
price shall be applicable;
(e) Whether or not the shares of the series shall be subject to
redemption through the operation of a sinking fund and, if so, the
terms and provisions of such sinking fund and the extent to which and
the manner in which such fund shall be applied to the purchase,
redemption or other acquisition of shares of the series and the
redemption price for shares redeemed through the sinking fund, which
price may vary at different redemption dates but shall in no event be
less than the par value per share plus an amount equal to all
accumulated and unpaid dividends to the date of redemption, and if
such price varies, the period during which each such variation in
price shall be applicable;
(f) Whether or not there shall be a purchase fund to acquire
shares of the series and, if so, the terms and provisions of the
purchase fund and the extent to which and the manner in which such
purchase fund shall be applied to the acquisition of shares of the
series;
(g) The limitations and restrictions, if any, in addition to,
but not in derogation of, the limitations and restrictions set forth
in paragraph 5 of this section II, which are to be effective while
any shares of the series are outstanding, upon payment of dividends
on, or making of other distributions on, and upon the purchase,
redemption or other acquisition by the Corporation or any subsidiary
of, shares of Common Stock or any other class of stock ranking junior
to the Second Preferred Stock as to dividends or upon liquidation;
(h) The conditions or restrictions, if any, which are to be
effective while any shares of the series are outstanding, upon the
creation of indebtedness of the Corporation or upon the issuance of
shares of stock of the Corporation;
(i) Any voting rights of the shares of the series, other than
the voting rights for the election of Directors provided by paragraph
13 of this section II, in addition to and not inconsistent with those
granted by this Article IV to the holders of the Second Preferred
Stock;
(j) The right, if any, to exchange or convert the shares of the
series into shares of any other series of the Second Preferred Stock
or into shares of any other class of stock of the Corporation and the
rate or basis, time, manner and conditions of exchange or conversion
or the method by which the same shall be determined;
(k) Any other designations, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, of the series, which are now or
hereafter permitted by the laws of Delaware, and which are not
inconsistent with the provisions of paragraphs 4 to 17, inclusive, of
this section II.
The resolution or resolutions providing for the issue of shares of
any series are herein referred to as the "Issuing Resolution" for that
series.
4. All series of the Second Preferred Stock shall be senior to the
Common Stock and each series of the Second Preferred Stock shall rank
equally with every other series. Each share of any one series shall be
identical with every other share of that series except as to the date or
dates from which dividends shall accumulate.
5. Subject to the provisions of paragraph 5 of section I of this
Article IV and to any limitation or restriction contained in the Issuing
Resolution for any series of Preferred Stock, the holders of shares of each
series of the Second Preferred Stock shall be entitled to receive cash
dividends, when and as declared by the Board of Directors out of any funds
legally available therefor, at the annual rate fixed in the Issuing
Resolution for that particular series and no more. Such dividends on each
series of the Second Preferred Stock shall be payable quarterly on the
first day of February, May, August and November in each year to holders of
record on a date, not more than fifty (50) days before each such dividend
payment date, to be determined by the Board of Directors in advance of the
payment of each particular dividend. Dividends on each series of the
Second Preferred Stock shall be cumulative and preferential so that in no
event shall any dividend or other distribution (other than dividends
payable in Common Stock or in any other class of stock ranking junior to
the Second Preferred Stock as to dividends and upon liquidation) be
declared or paid upon or set apart for the Common Stock or any other class
of stock ranking junior to the Second Preferred Stock as to dividends or
upon liquidation nor shall any moneys or other consideration (other than
shares of Common Stock or any other class of stock ranking junior to the
Second Preferred Stock as to dividends and upon liquidation) be set aside
for or applied to the purchase or redemption of shares of Common Stock or
any other class of stock ranking junior to the Second Preferred Stock as to
dividends or upon liquidation, unless all dividends on each then
outstanding series of the Second Preferred Stock for all past
quarter-yearly dividend periods shall have been paid, or declared and a sum
sufficient for the payment thereof set apart, and the full dividend thereon
for the then quarterly dividend period shall have been or concurrently
shall be paid or declared. With respect to each series of the Second
Preferred Stock, such dividends shall accumulate from the date or dates
fixed in the Issuing Resolution for such series which date or dates shall
in no instance be more than ninety days before or after the date of the
issuance of those shares for which the date is being set. No dividends
shall be declared on any series of the Second Preferred Stock in respect of
any dividend period unless the same proportion of the annual dividend rate
respectively applicable to the shares of every series of the Second
Preferred Stock at the time outstanding shall likewise be declared as a
dividend in respect of such dividend period.
The term "accumulated and unpaid dividends" means, in respect of each
share of the Second Preferred Stock of any series, that amount which shall
be equal to simple interest upon the par value of such share at the
dividend rate for such series from the date from which dividends on such
share commenced to accumulate to the date as of which the computation is to
be made, less the aggregate amount (without interest thereon) of all
dividends theretofore paid or declared and set aside for payment in respect
thereof.
6. (a) In the event of any involuntary liquidation, dissolution or
winding up of the Corporation, the holders of the shares of every series of
the Second Preferred Stock shall, subject to the provisions of paragraph 6
of section I of this Article IV, be entitled to receive payment at the rate
of $100 per share, plus an amount equal to all accumulated and unpaid
dividends to the date of final distribution to such holders, and no more,
before any payment or distribution of the assets of the Corporation shall
be made to or set apart for the holders of the Common Stock or any other
class of stock ranking junior to the Second Preferred Stock upon
liquidation.
(b) In the event of any voluntary liquidation, dissolution or
winding up of the Corporation, the holders of the shares of each series of
the Second Preferred Stock shall, subject to the provisions of paragraph 6
of section I of this Article IV, be entitled to receive the amount set
forth for such payment in the Issuing Resolution for that particular
series, which amount shall in no case be less than $100 per share, plus an
amount equal to all accumulated and unpaid dividends to the date of final
distribution to such holders, and no more, before any payment or
distribution of the assets of the Corporation shall be made to or set apart
for the holders of the Common Stock or any other class of stock ranking
junior to the Second Preferred Stock upon liquidation.
(c) If, upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets of the
Corporation, or proceeds thereof, distributable among the holders of the
Second Preferred Stock shall be insufficient to pay in full the
preferential amount for every series of the Second Preferred Stock, then
such assets or the proceeds thereof shall be distributed among the holders
of the shares of all series of the Second Preferred Stock in proportion to
the respective amounts to which they would be entitled if all amounts
payable thereon were paid in full.
(d) For the purposes of this paragraph 6, a consolidation or merger
of the Corporation with or into one or more other corporations (whether or
not the Corporation is the corporation surviving such consolidation or
merger), or a sale, lease or exchange of all or substantially all of the
assets of the Corporation, shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.
7. (a) If the Issuing Resolution for any series of the Second
Preferred Stock provides that the Corporation, at the option of the Board
of Directors, may redeem at any time all, or from time to time any part, of
the shares of the Second Preferred Stock of such series at the time
outstanding or if the Issuing Resolution for any series of the Second
Preferred Stock provides for the creation of a sinking fund to redeem
outstanding shares of that series of the Second Preferred Stock, the shares
of the series to be redeemed at the option of the Board of Directors or to
be redeemed through operation of the sinking fund shall be redeemed in the
manner set forth in this paragraph 7.
(b) Notice of every such redemption shall be mailed at least 30 days
in advance of the date designated for such redemption (herein called the
"redemption date") to the holders of record of the shares of the Second
Preferred Stock so to be redeemed at their respective addresses as the same
shall appear on the books of the Corporation. In order to facilitate the
redemption of any shares of the Second Preferred Stock that may be chosen
for redemption as provided in this paragraph 7, the Board of Directors
shall be authorized to cause the transfer books of the Corporation to be
closed as to such shares as of a date within fifteen (15) days prior to the
redemption date. In case of the redemption of a part only of any series of
the Second Preferred Stock at the time outstanding, the shares of such
series so to be redeemed shall be selected by lot or by such other
equitable method as the Board of Directors may determine.
(c) If said notice of redemption shall have been given as aforesaid,
and if on or before the redemption date, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart
from its other funds, in trust for the pro rata benefit of the holders of
the shares so called for redemption, then, from and after the redemption
date, notwithstanding that any certificate for shares of the Second
Preferred Stock so called for redemption shall not have been surrendered
for cancellation, the shares represented thereby shall not be deemed
outstanding, and all rights of the holders of the shares of the Second
Preferred Stock so called for redemption shall forthwith, from and after
the redemption date, cease and terminate, excepting only the right to
receive the redemption price therefor but without interest. Any moneys so
set aside by the Corporation and unclaimed at the end of six years from the
date fixed for such redemption shall revert to the general funds of the
Corporation after which reversion any holder of such shares so called for
redemption shall have only such rights, if any, as he may possess under
applicable law to receive from the Corporation payment of the redemption
price.
(d) If, on or before the redemption date, the Corporation shall
deposit in trust, with a bank or trust company in the Borough of Manhattan,
in the City of New York, having a capital and surplus of at least
$5,000,000, the funds necessary for the redemption of the shares of the
Second Preferred Stock so to be redeemed, to be applied to the redemption
of such shares, and if the Corporation shall have given notice of
redemption as aforesaid or given irrevocable written authorization to such
bank or trust company, in form satisfactory to it, for the timely giving of
such notice, then from and after the time when such deposit is made all
shares of the Second Preferred Stock so called for redemption shall not be
deemed to be outstanding, and all rights of the holders of such shares of
the Second Preferred Stock so called for redemption shall cease and
terminate, excepting only the right to receive the redemption price
therefor, but without interest.
In case such deposit is made with a bank or trust company and any
holder of shares of the Second Preferred Stock which shall have been called
for redemption shall not, within one year after the redemption date, claim
the amount deposited with respect to the redemption thereof, such bank or
trust company shall, upon demand, pay over to the Corporation such
unclaimed amount and thereupon such bank or trust company shall be relieved
of all responsibility in respect thereof to such holder and such holder
thereafter shall have only such rights, if any, as he may possess under
applicable law to receive from the Corporation payment thereof. Any
interest accrued on funds so deposited shall be paid to the Corporation
from time to time. Any such unclaimed amounts paid over by any such bank
or trust company to the Corporation shall, for a period terminating six
years after the date fixed for redemption, be set aside and held by the
Corporation in the same manner as if such unclaimed amounts had been set
aside under the preceding paragraph 7(c).
8. Whether or not the Issuing Resolution for any series of the
Second Preferred Stock provides for optional redemption of shares, or for a
sinking fund or a purchase fund for the redemption or purchase of shares of
such series, the Corporation shall have the right, subject to the
provisions of paragraph 5 of section I of this Article IV and subject to
any limitation thereon in any Issuing Resolution for any series of
Preferred Stock or Second Preferred Stock, at any time to purchase
privately or in the public markets, and to solicit tenders of, any portion
or the whole of the shares of any or all series at prices which are not in
excess of the respective redemption prices of such shares.
9. (a) All shares of any series of the Second Preferred Stock
which have been acquired through the operation of a purchase fund or of a
sinking fund or by redemption or have been credited against any purchase
fund or sinking fund or have been surrendered to the Corporation on the
conversion or exchange thereof into or for other shares of the Corporation
shall, upon compliance with any applicable provisions of the General
Corporation Law of the State of Delaware, have the status of authorized and
unissued shares of the Second Preferred Stock, but shall be reissued only
as, or as part of, a new series of the Second Preferred Stock to be created
by an Issuing Resolution of the Board of Directors or as part of any other
series of the Second Preferred Stock the terms of which do not prohibit
such reissue as a part thereof, and shall not be reissued as a part of the
series of which they were originally a part.
(b) All shares of any series of the Second Preferred Stock which
have been acquired otherwise than through the operation of a purchase fund
or of a sinking fund or by redemption and which have not been credited
against any purchase fund or sinking fund, and which have not been
surrendered to the Corporation on the conversion or exchange thereof into
or for other shares of the Corporation, shall have the status of treasury
stock and may be disposed of as permitted by law.
10. So long as any of the Second Preferred Stock is outstanding, the
Corporation will not, without the affirmative vote or consent of the
holders of at least 66-2/3% of all of the Second Preferred Stock at the
time outstanding, voting as a class regardless of series, given in person
or by proxy, either in writing or by resolution adopted at a special
meeting called for the purpose:
(a) Amend, alter or repeal any of the provisions of this
Article IV so as to affect adversely the designations, preferences
and relative, participating, optional or other special rights, or the
qualifications, limitations or restrictions thereof, of all of the
series of the Second Preferred Stock;
(b) (i) increase the authorized amount of the Preferred Stock,
(ii) create any other class or classes of stock ranking senior to the
Second Preferred Stock either as to dividends or upon liquidation,
(iii) create any class or classes of stock which have any right to be
converted into any class or classes of stock ranking senior to the
Second Preferred Stock as to dividends or upon liquidation or grant
any rights to any class of stock to be so converted, or (iv) merge or
consolidate with or into any other corporation, if such merger or
consolidation would affect adversely the designations, preferences
and relative, participating, optional or other special rights, or the
qualifications, limitations or restrictions thereof, of all of the
series of the Second Preferred Stock.
11. The Corporation will not amend, alter or repeal any of the
provisions of this Article IV or of any Issuing Resolution for series of
Second Preferred Stock so as to affect adversely the designations,
preferences and relative, participating, optional or other special rights,
or the qualifications, limitations or restrictions thereof, of one or more,
but not all, series of the Second Preferred Stock, or merge or consolidate
with or into any other corporation if such merger or consolidation would
affect adversely the designations, preferences and relative, participating,
optional or other special rights, or the qualifications, limitations or
restrictions thereof, of one or more, but not all, series of the Second
Preferred Stock, without the affirmative vote or consent of the holders of
at least 66-2/3% of each series so adversely affected at the time
outstanding, voting as a class, in person or by proxy, either in writing or
by resolution adopted at a special meeting called for the purpose, but the
other series of the Second Preferred Stock not affected thereby shall not
have the right to vote thereon.
12. The Corporation will not, without the affirmative vote or
consent of the holders of at least a majority of all of the Second
Preferred Stock at the time outstanding, voting as a class regardless of
series, given in person or by proxy, either in writing or by resolution
adopted at a special meeting called for the purpose, (a) increase the
authorized amount of the Second Preferred Stock, (b) create any class or
classes of stock ranking on a parity with the Second Preferred Stock either
as to dividends or upon liquidation, or (c) create any class or classes of
stock which have any right to be converted into any class or classes of
stock ranking on a parity with the Second Preferred Stock as to dividends
or upon liquidation or grant any rights to any class of stock to be so
converted.
13. (a) If, and whenever, at any time or times, there shall remain
unpaid, on any series of the Second Preferred Stock, the dividends which
were payable for four full quarterly dividend periods, or if any arrearage
or default in any sinking fund provided for in any Issuing Resolution shall
occur under such conditions and continue for such period of time as, under
the provisions of such Issuing Resolution, to entitle the holders of the
outstanding shares of the Second Preferred Stock to the voting rights
provided by this paragraph 13, the outstanding Second Preferred Stock of
all series, voting separately as a class, shall have the right to elect two
Directors and the remaining Directors shall be elected by the holders of
shares of the Common Stock (subject to the voting rights of the holders of
the Preferred Stock).
(b) Whenever such right of the holders of the Second Preferred Stock
shall have vested, such right may be exercised initially either at a
special meeting of such holders of the Second Preferred Stock called as
provided in this paragraph, or at any annual meeting of stockholders, and
thereafter at annual meetings of stockholders. If the date upon which such
right of the holders of the Second Preferred Stock shall become vested
shall be more than sixty days preceding the date of the next ensuing annual
meeting of stockholders as fixed by the By-Laws of the Corporation, the
President of the Corporation shall call promptly a special meeting of the
holders of the Second Preferred Stock and the Common Stock to be held
within thirty days for the purpose of electing a new Board of Directors
(exclusive of any Directors elected to represent the Preferred Stock
pursuant to the provisions of section I of this Article IV) to serve until
the next annual meeting and until their successors shall be elected and
shall qualify. Notice of such meeting shall be mailed to each holder of
Second Preferred Stock and each holder of Common Stock not less than ten
days prior to the date of such meeting. If at any such meeting any
Director (other than a Director elected to represent the Preferred Stock)
shall not be re-elected, his term of office shall end upon the election of
his successor, notwithstanding that the term for which he was originally
elected shall not then have expired. In the event that at any such meeting
at which holders of the Second Preferred Stock shall be entitled to elect
Directors, a quorum of the holders of the Second Preferred Stock shall not
be present in person or by proxy, the holders of the Common Stock, if a
quorum thereof be present, may elect the Directors whom the holders of the
Second Preferred Stock were entitled, but failed, to elect. Such Directors
shall be designated as having been so elected to represent the Second
Preferred Stock and their successors shall be elected by the holders of the
Second Preferred Stock at the next annual meeting.
(c) Whenever the holders of the Second Preferred Stock shall be
entitled to elect Directors as provided in paragraph 13(a) of this section
II, any holder of Second Preferred Stock shall have the right, during
regular business hours, in person or by a duly authorized representative,
to examine and to make transcripts of the stock records of the Corporation
for the Second Preferred Stock for the purpose of communicating with other
holders of Second Preferred Stock with respect to the exercise of such
right of election.
(d) At any election of members of the Board of Directors by the
Second Preferred Stock, each holder of Second Preferred Stock shall have
one vote for each share of such stock standing in his name on the books of
the Corporation on any record date fixed for such purpose, or, if no such
date be fixed, on the date on which the election is held.
(e) The right of the holders of the Second Preferred Stock, voting
separately as a class, to elect members of the Board of Directors of the
Corporation as aforesaid shall continue until such time as any and all
unpaid dividends shall have been paid and any and all sinking fund
arrearages and defaults shall have been fully cured, at which time the
right of the holders of the Second Preferred Stock to elect members of the
Board of Directors shall terminate, subject to revesting.
(f) Whenever the holders of the Second Preferred Stock shall be
divested of the right to elect members of the Board of Directors, the
President of the Corporation shall, within ten days after delivery to the
Corporation at its principal office of a request to such effect signed by
any holder of Common Stock, call a special meeting of the holders of the
Common Stock to be held within forty days after the delivery of such
request for the purpose of electing a new Board of Directors (exclusive of
any Directors elected to represent the Preferred Stock pursuant to the
provisions of section I of this Article IV) to serve until the next annual
meeting or until their respective successors shall be elected and shall
qualify. If, at any such special meeting, any Director (other than a
Director elected to represent the Preferred Stock) shall not be re-elected,
his term of office shall terminate upon the election and qualification of
his successor, notwithstanding that the term for which such Director was
originally elected shall not then have expired.
14. At any annual or special meeting of stockholders held for the
purpose of electing Directors when the holders of the Second Preferred
Stock shall be entitled to elect members of the Board of Directors as
provided in paragraph 13 of this section II, the presence in person or by
proxy of the holders of one-third of all of the outstanding shares of the
Second Preferred Stock regardless of series shall be required to constitute
a quorum for the election by the Second Preferred Stock of such Directors,
and the presence in person or by proxy of the holders of a majority of the
outstanding shares of the Common Stock shall be required to constitute a
quorum for the election by the Common Stock of the remaining Directors
(other than Directors elected to represent the Preferred Stock pursuant to
the provisions of section I of this Article IV); provided, however, that
absence of a quorum of the Common Stock shall not prevent the Second
Preferred Stock if it has a quorum present from electing the number of
Directors such class shall be entitled to elect and the Directors so
elected by the Second Preferred Stock shall replace an equal number of
Directors then in office. The Directors to be replaced by those elected by
the holders of the Second Preferred Stock shall be designated by the Board
of Directors of the Corporation; and, if the Board of Directors shall fail
to make such designation within 15 days following such meeting, then such
designation shall be made by the Directors elected by the holders of the
Second Preferred Stock. The absence of a quorum of the Second Preferred
Stock shall not prevent the Common Stock from electing the entire Board of
Directors (other than Directors elected to represent the Preferred Stock)
which shall include the proper number of members to represent the Second
Preferred Stock.
15. If, during any interval between annual meetings of stockholders
for the election of Directors and while the holders of the Second Preferred
Stock shall be entitled to elect Directors, one of the Directors in office
elected by the holders of the Second Preferred Stock shall resign or die or
be removed, the vacancy shall be filled by a majority vote of all of the
remaining Directors then in office, although less than a quorum, who shall
elect a nominee designated by the remaining Director elected by the holders
of the Second Preferred Stock or his successor and if not so filled within
forty days after the creation thereof, the President of the Corporation
shall call a special meeting in the manner provided in paragraph 13 of this
section II but limited to the holders of shares of the Second Preferred
Stock and such vacancy shall be filled at such special meeting, to be held
within forty days after the delivery of such request.
16. If the Corporation is unable to meet the requirements of all
sinking fund and of all purchase fund provisions of all Issuing Resolutions
for series of Second Preferred Stock containing such provisions, the number
of shares of the respective series to be redeemed or purchased, as the case
may be, shall be in proportion to the respective amounts which would be
redeemed or purchased if all such provisions were complied with in full.
17. No holder of shares of any series of the Second Preferred Stock
shall have any preemptive or preferential right of subscription to any
stock of any class of the Corporation, or to any obligations convertible
into stock of any class, or to any warrant or option for the purchase of
stock of any class but the Board of Directors of the Corporation, in the
Issuing Resolution creating any series of the Second Preferred Stock, may
confer on that series the right to subscribe to additional shares of that
series or to shares of any series of the Second Preferred Stock which may
be created thereafter.
III. COMMON STOCK
1. All rights shall be held and possessed by the Common Stock
except for the designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, conferred on the Preferred Stock and the Second
Preferred Stock by applicable law, by the provisions of sections I and II
of this Article IV or by the provisions of any Issuing Resolutions for
series of the Preferred Stock or the Second Preferred Stock.
2. Holders of the shares of Common Stock without par value shall
have no right to subscribe for or purchase any part of any new or
additional issue of stock of any class whatsoever or of securities
convertible into stock of any class whatsoever whether now or hereafter
authorized.
ARTICLE V
The number of shares with which this corporation will commence
business is ten (10) shares of common stock, which shares are without
nominal or par value.
ARTICLE VI
This corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ARTICLE VII
This corporation is to have perpetual existence.
ARTICLE VIII
The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
ARTICLE IX
In furtherance, and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
1. To make, alter, amend and rescind the by-laws of this
corporation, without any action on the part of the stockholders.
2. To authorize and cause to be executed mortgages and liens upon
the real and personal property of this corporation.
3. To fix, determine and vary the amount to be maintained as
surplus and, subject to the other provisions and requirements of this
Certificate of Incorporation, the amount or amounts to be set apart or
reserved as working capital or for any other lawful purposes. If so
determined by the Board of Directors, the corporation may from time to time
receive money and/or other property and credit the amount or value thereof
to reserve or surplus, and such money or other property may be an undivided
part of money or other property for another part of which stock, bonds,
debentures and/or other obligations of the corporation are issued. Against
any reserve or surplus so established there may be charged losses at any
time incurred by the corporation, also dividends or other distributions
upon stock. Such reserve or surplus may be reduced from time to time by
the Board of Directors for the purposes above specified or by transfer from
such reserve or surplus to capital account.
4. From time to time to determine whether and to what extent, and
at what times and places, and under what conditions and regulations, the
accounts and books of this corporation (other than the stock ledger), or
any of them, shall be open to inspection of stockholders; and no
stockholder shall have any right of inspecting any account, book or
document of this corporation except as conferred by statute, unless
authorized by a resolution of stockholders or directors.
5. If the by-laws so provide, to designate two or more of its
number to constitute an executive committee, which committee shall for the
time being, as provided in said resolution or in the by-laws of this
corporation, have and exercise any or all of the powers of the Board of
Directors in the management of the business and affairs of this
corporation, and have power to authorize the seal of this corporation to be
affixed to all papers which may require it.
6. Pursuant to the affirmative vote of the holders of at least a
majority of the stock issued and outstanding having voting power, given at
a stockholders' meeting duly called for that purpose, or when authorized by
the written consent of the holders of a majority of the voting stock issued
and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets of
this corporation, including its goodwill and its corporate franchises, upon
such terms and conditions as its Board of Directors deem expedient and for
the best interests of the corporation.
7. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of this corporation or of any creditor or stockholder
thereof, or on the application of any receiver or receivers appointed for
this corporation under the provisions of Section 3883 of the Revised Code
of 1915 of said State, or on the application of trustees in dissolution or
of any receiver or receivers appointed for this corporation under the
provisions of Section 43 of this Chapter, order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of stockholders
of this corporation, as the case may be, to be summoned in such manner as
the said court directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of the stockholders
or class of stockholders of this corporation, as the case may be, agree to
any compromise or arrangement and to any reorganization of this corporation
as a consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court
to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
8. This corporation may in its by-laws confer powers upon its
directors in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon them by the statute.
9. Both stockholders and directors shall have power, if the by-laws
so provide, to hold their meetings, and to have one or more offices within
or without the State of Delaware and to keep the books of this corporation
(subject to the provisions of the statutes), outside of the State of
Delaware at such places as may be from time to time designated by the Board
of Directors.
ARTICLE X
The number of directors of this corporation shall be such number, not
less than three, as shall from time to time be fixed by the by-laws of the
corporation. In case of any vacancy in the Board of Directors through
death, resignation, disqualification or other cause, the remaining
directors, by affirmative vote of a majority thereof, may elect a successor
to office for the unexpired portion of the term of the director whose place
shall be vacant and until the election of a successor.
ARTICLE XI
A director of this corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except that nothing contained in this Article
XI shall eliminate or limit the liability of a director (1) for any breach
of the director's duty of loyalty to the corporation or its stockholders,
(2) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (3) under Section 174 of the
Delaware General Corporation Law, or (4) for any transaction from which the
director derived an improper personal benefit. No amendment to or repeal
of this Article XI shall apply to or have any effect on the liability or
alleged liability of any director of the corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment or
repeal.
ARTICLE XII
In the absence of fraud, no contract or transaction between this
corporation and any other association or corporation shall be affected by
the fact that any of the Directors or officers of this corporation are
interested in or are directors or officers of such other association or
corporation, and any director or officer of this corporation individually
may be a party to or may be interested in any such contract or transaction
of this corporation; and no such contract or transaction of this
corporation with any person or persons, firm, association or corporation
shall be affected by the fact that any director or officer of this
corporation is a party to or interested in such contract or transaction or
in any way connected with such person or persons, firm, association or
corporation; and each and every person who may become a director or officer
of this corporation is hereby relieved from any liability that might
otherwise exist from thus contracting with this corporation for the benefit
of himself or any person, firm, association or corporation in which he may
be in any wise interested.
IN WITNESS WHEREOF, the corporation has caused its corporate seal to
be affixed and this Restated Certificate of Incorporation to be signed by
its Senior Vice President and General Counsel and attested by its Secretary
this 21st day of October, 1988.
REYNOLDS METALS COMPANY
By John H. Galea
John H. Galea
Senior Vice President and
General Counsel
ATTEST:
Donald T. Cowles
Donald T. Cowles
Secretary
CERTIFICATE OF OWNERSHIP
AND MERGER
MERGING
FOIL DISTRIBUTING COMPANY
INTO
REYNOLDS METALS COMPANY
___________________________________
Pursuant to Section 253 of the
Delaware General Corporation Law
___________________________________
REYNOLDS METALS COMPANY, a corporation incorporated on the 18th
day of July, 1928, pursuant to the provisions of the General Corporation
Law of the State of Delaware (the "Corporation"), does hereby certify that
the Corporation owns all of the outstanding stock of FOIL DISTRIBUTING
COMPANY, a corporation incorporated on the 4th day of April, 1983, pursuant
to the provisions of the general corporation Law of the State of Delaware,
and that the Corporation by resolutions of its Board of Directors duly
adopted at a meeting held on the 17th day of April, 1991, determined to and
did merge into itself said FOIL DISTRIBUTING COMPANY, which resolutions are
as follows:
RESOLVED, that this corporation, as owner of all the
outstanding capital stock of Foil Distributing Company, merge
into itself Foil Distributing Company and assume all of its
liabilities and obligations effective as of 12:01 a.m. on April
30, 1991; and
FURTHER RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Secretary and any Assistant
Secretary are each hereby authorized to take all such other
action, including, without limitation, incurrence and payment
of all fees, expenses and other charges, and to execute and
deliver all such agreements, instruments and documents, which
in the opinion of any of them may be necessary or desirable to
achieve the purposes of or effect the transactions contemplated
by the preceding resolution, the taking of such action or the
execution of any such agreements, instruments or documents to
be conclusive evidence of the authority to take or execute the
same.
This Certificate of Ownership and Merger shall be effective as
of 12:01 A.M. on April 30, 1991.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be executed and attested by its officers thereunto duly authorized this
22nd day of April, 1991.
REYNOLDS METALS COMPANY
By Donald T. Cowles
Vice President, General Counsel
and Secretary
ATTEST:
Donna C. Dabney
Assistant Secretary
State of Delaware PAGE 1
Office of the Secretary of State
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF OWNERSHIP & MERGER OF "REYNOLDS METALS
COMPANY" FILED IN THIS OFFICE ON THE TWENTY-THIRD DAY OF APRIL,
A.D. 1991, AT 9 O'CLOCK A.M.
* * * * * * * *
William T. Quillen
-----------------------------
William T. Quillen, Secretary of State
AUTHENTICATION: *4114707
DATE: 10/25/1993
932985004
CERTIFICATE OF OWNERSHIP
AND MERGER
MERGING
REYNOLDS OF HAWAII, INC.
INTO
REYNOLDS METALS COMPANY
___________________________________
Pursuant to Section 253 of the
Delaware General Corporation Law
___________________________________
REYNOLDS METALS COMPANY, a corporation incorporated on the 18th
day of July, 1928, pursuant to the provisions of the General Corporation
Law of the State of Delaware (the "Corporation"), does hereby certify that
the Corporation owns all of the outstanding stock of REYNOLDS OF HAWAII,
INC., a corporation incorporated on the 4th day of May, 1979, pursuant to
the provisions of the general corporation Law of the State of Delaware, and
that the Corporation by resolutions of its Board of Directors duly adopted
at a meeting held on the 17th day of April, 1991, determined to and did
merge into itself said REYNOLDS OF HAWAII, INC., which resolutions are as
follows:
RESOLVED, that this corporation, as owner of all the
outstanding capital stock of Reynolds of Hawaii, Inc., merge
into itself Reynolds of Hawaii, Inc. and assume all of its
liabilities and obligations effective as of 12:01 a.m. on April
30, 1991; and
FURTHER RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Secretary and any Assistant
Secretary are each hereby authorized to take all such other
action, including, without limitation, incurrence and payment
of all fees, expenses and other charges, and to execute and
deliver all such agreements, instruments and documents, which
in the opinion of any of them may be necessary or desirable to
achieve the purposes of or effect the transactions contemplated
by the preceding resolution, the taking of such action or the
execution of any such agreements, instruments or documents to
be conclusive evidence of the authority to take or execute the
same.
This Certificate of Ownership and Merger shall be effective as
of 12:01 A.M. on April 30, 1991.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be executed and attested by its officers thereunto duly authorized this
22nd day of April, 1991.
REYNOLDS METALS COMPANY
By Donald T. Cowles
Vice President, General Counsel
and Secretary
ATTEST:
Donna C. Dabney
Assistant Secretary
CERTIFICATE OF OWNERSHIP
AND MERGER
MERGING
BROAD ST. ROAD CORPORATION
INTO
REYNOLDS METALS COMPANY
___________________________________
Pursuant to Section 253 of the
Delaware General Corporation Law
___________________________________
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify that the Corporation owns all the
outstanding stock of BROAD ST. ROAD CORPORATION, a Delaware corporation,
and that the Corporation by resolutions of its Board of Directors duly
adopted at a meeting held on the 15th day of November, 1991, determined to
and did merge into itself BROAD ST. ROAD CORPORATION, which resolutions are
as follows:
RESOLVED, that this corporation, as owner of all the
outstanding capital stock of Broad St. Road Corporation, merge
into itself Broad St. Road Corporation and assume all of its
liabilities and obligations effective as of 5:00 p.m. on
December 31, 1991; and
FURTHER RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Secretary and any Assistant
Secretary are each hereby authorized to take all such other
action, including, without limitation, incurrence and payment
of all fees, expenses and other charges, and to execute and
deliver all such agreements, instruments and documents, which
in the opinion of any of them may be necessary or desirable to
achieve the purposes of or effect the transactions contemplated
by the preceding resolution, the taking of such action or the
execution of any such agreements, instruments or documents to
be conclusive evidence of the authority to take or execute the
same.
This Certificate of Ownership and Merger shall be effective as
of 5:00 p.m. on December 31, 1991.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be executed and attested by its officers thereunto duly authorized this
26th day of November, 1991.
REYNOLDS METALS COMPANY
By Donald T. Cowles
Vice President, General Counsel
and Secretary
ATTEST:
D. Michael Jones
Assistant Secretary
CERTIFICATE OF OWNERSHIP
AND MERGER
MERGING
REYNOLDS ALUMINUM RECYCLING COMPANY
INTO
REYNOLDS METALS COMPANY
____________________________________
Pursuant to Section 253 of the
Delaware General Corporation Law
____________________________________
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify that the Corporation owns all the
outstanding stock of REYNOLDS ALUMINUM RECYCLING COMPANY, a Missouri
corporation, and that the Corporation by resolutions of its Board of
Directors duly adopted by unanimous written consent on December 16, 1991
pursuant to Section 141(f) of the Delaware General Corporation Law
determined to and did merge into itself REYNOLDS ALUMINUM RECYCLING
COMPANY, which resolutions are as follows:
RESOLVED, that this corporation, as owner of all the
outstanding capital stock of Reynolds Aluminum Recycling
Company, merge into itself Reynolds Aluminum Recycling Company
and assume all of its liabilities and obligations effective as
of 5:00 p.m. on December 31, 1991 pursuant to the following
Plan of Merger:
1. Reynolds Metals Company of Delaware is the
survivor.
2. All of the property, rights, privileges, leases
and patents of Reynolds Aluminum Recycling Company, a
Missouri corporation, are to be transferred to and
become the property of Reynolds Metals Company, the
survivor. The officers and board of directors of the
above named corporations are authorized to execute
all deeds, assignments, and documents of every nature
which may be needed to effectuate a full and complete
transfer of ownership.
3. The officers and board of directors of Reynolds
Metals Company shall continue in office until their
successors are duly elected and qualified under the
provisions of the by-laws of the surviving
corporation.
4. It is agreed that, upon and after the issuance
of a certificate of merger by the Secretary of State
of the State of Missouri:
a. The surviving corporation may be served
with process in the State of Missouri in
any proceeding for the enforcement of any
obligation of any corporation organized
under the laws of the State of Missouri
which is a party to the merger and in any
proceeding for the enforcement of the
rights of a dissenting shareholder of any
such corporation organized under the laws
of the State of Missouri against the
surviving corporation;
b. The Secretary of State of the State of
Missouri shall be and hereby is irrevocably
appointed as the agent of the surviving
corporation to accept service of process in
any such proceeding; the address to which
the service of process in any such
proceeding shall be mailed is: Secretary,
Reynolds Metals Company, 6601 West Broad
Street, Richmond, Virginia 23230; and
c. The surviving corporation will promptly pay
to the dissenting shareholders of any
corporation organized under the laws of the
State of Missouri which is a party to the merger
the amount, if any, to which they shall be
entitled under the provisions of "The General
and Business Corporation Law of Missouri" with
respect to the rights of dissenting
shareholders.
5. The articles of incorporation of the survivor
are not amended.
provided that, at any time prior to the filing with the
Delaware Secretary of State of a Certificate of Ownership and
Merger merging Reynolds Aluminum Recycling Company into this
corporation, the Board of Directors of this corporation may
terminate this resolution and abandon the merger contemplated
hereby; and
FURTHER RESOLVED, that the Chairman of the Board, the
President, any Vice President, the Secretary and any Assistant
Secretary are each hereby authorized to take all such action,
including, without limitation, incurrence and payment of all
fees, expenses and other charges, and to execute and deliver
all such agreements, instruments and documents, which in the
opinion of any of them may be necessary or desirable to achieve
the purposes of or effect the transactions contemplated by the
preceding resolution, the taking of such action or the
execution of any such agreements, instruments or documents to
the conclusive evidence of the authority to take or execute the
same.
This Certificate of Ownership and Merger shall be effective as
of 5:00 p.m. on December 31, 1991.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be executed and attested by its officers thereunto duly authorized this
20th day of December, 1991.
REYNOLDS METALS COMPANY
By Donald T. Cowles
Vice President, General Counsel
and Secretary
ATTEST:
D. Michael Jones
Assistant Secretary
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
REYNOLDS SEATTLE CAN COMPANY
INTO
REYNOLDS METALS COMPANY
_____________________________________________
Pursuant to Section 253 of the
General Corporation Law of Delaware
_____________________________________________
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify:
FIRST: That the Corporation is incorporated pursuant to the
General Corporation Law of the State of Delaware.
SECOND: That the Corporation owns all of the outstanding shares
of each class of the capital stock of REYNOLDS SEATTLE CAN COMPANY, a
Delaware corporation.
THIRD: That the Corporation, by the following resolutions of
its Board of Directors, duly adopted at a meeting held on the 19th day of
June, 1992, determined to merge into itself REYNOLDS SEATTLE CAN COMPANY on
the conditions set forth in such resolutions:
RESOLVED, that this corporation, as owner of all of
the outstanding shares of each class of the capital stock
of Reynolds Seattle Can Company, merge into itself
Reynolds Seattle Can Company and assume all of its
liabilities and obligations effective as of 5:00 p.m.
E.D.T. on June 30, 1992; and
FURTHER RESOLVED, that the Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer,
any Vice Chairman, any Executive Vice President, any Vice
President, the Secretary and any Assistant Secretary are
each hereby authorized to take all such action, including,
without limitation, incurrence and payment of all fees,
expenses and other charges, and to execute and deliver all
such agreements, instruments and documents (including,
without limitation, a certificate of ownership and merger)
which in the opinion of any of them may be necessary or
desirable to achieve the purposes of or effect the
transactions contemplated by the preceding resolution, the
taking of any such action or the execution of any such
agreements, instruments or documents to be conclusive
evidence of the authority to take or execute the same.
This Certificate of Ownership and Merger shall be effective as
of 5:00 p.m. E.D.T. on June 30, 1992.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed and this Certificate to be executed and attested by its
officers thereunto duly authorized this 19th day of June, 1992.
REYNOLDS METALS COMPANY
By Donald T. Cowles
Vice President, General Counsel
and Secretary
[SEAL]
ATTEST:
By: D. Michael Jones
Assistant Secretary
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
REYNOLDS ALUMINUM CREDIT CORPORATION
INTO
REYNOLDS METALS COMPANY
Pursuant to Section 253 of the
General Corporation Law of Delaware
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify:
FIRST: That the Corporation is incorporated pursuant to the
General Corporation Law of the State of Delaware.
SECOND: That the Corporations owns all of the outstanding shares
of the capital stock of REYNOLDS ALUMINUM CREDIT CORPORATION, a Delaware
corporation.
THIRD: That the Corporation, by the following resolutions of
its Board of Directors, duly adopted by unanimous written consent dated
December 16, 1993, determined to merge into itself REYNOLDS ALUMINUM CREDIT
CORPORATION on the conditions set forth in such resolutions:
RESOLVED, that this corporation, as owner of all of the
outstanding shares of the capital stock of Reynolds Aluminum
Credit Corporation, merge into itself Reynolds Aluminum Credit
Corporation and assume all of its liabilities and obligations
effective as of 5:00 p.m. E.S.T. on December 31, 1993;
FURTHER RESOLVED, that the Chief Executive Officer, the
Chief Financial Officer, any Vice Chairman, any Executive Vice
President, any Vice President, the Secretary and any Assistant
Secretary are each hereby authorized to take all such action,
including, without limitation, incurrence and payment of all
fees, expenses and other charges, and to execute and deliver all
such agreements, instruments and documents (including, without
limitation, a certificate of ownership and merger) which in the
opinion of any of them may be necessary or desirable to achieve
the purposes of or effect the transactions contemplated by the
preceding resolution, the taking of any such action or the
execution of any such agreements, instruments or documents to be
conclusive evidence of the authority to take or execute the
same.
This Certificate of Ownership and Merger shall be effective as
of 5:00 p.m. E.S.T. on December 31, 1993.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed and this Certificate to be executed and attested by its
officers thereunto duly authorized this 29th day of December, 1993.
REYNOLDS METALS COMPANY
By: D. Michael Jones
Vice President, General Counsel
and Secretary
[SEAL]
ATTEST:
By:Carol L. Dillon
Assistant Secretary
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
REYNOLDS KANSAS CITY CAN COMPANY
INTO
REYNOLDS METALS COMPANY
Pursuant to Section 253 of the
General Corporation Law of Delaware
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify:
FIRST: That the Corporation is incorporated pursuant to the
General Corporation Law of the State of Delaware.
SECOND: That the Corporations owns all of the outstanding shares
of each class of the capital stock of REYNOLDS KANSAS CITY CAN COMPANY, a
Delaware corporation.
THIRD: That the Corporation, by the following resolutions of
its Board of Directors, duly adopted by unanimous written consent dated
December 16, 1993, determined to merge into itself REYNOLDS KANSAS CITY CAN
COMPANY on the conditions set forth in such resolutions:
RESOLVED, that this corporation, as owner of all of the
outstanding shares of each class of the capital stock of
Reynolds Kansas City Can Company, merge into itself Reynolds
Kansas City Can Company and assume all of its liabilities and
obligations effective as of 5:00 p.m. E.S.T. on December 31,
1993;
FURTHER RESOLVED, that the Chief Executive Officer, the
Chief Financial Officer, any Vice Chairman, any Executive Vice
President, any Vice President, the Secretary and any Assistant
Secretary are each hereby authorized to take all such action,
including, without limitation, incurrence and payment of all
fees, expenses and other charges, and to execute and deliver all
such agreements, instruments and documents (including, without
limitation, a certificate of ownership and merger) which in the
opinion of any of them may be necessary or desirable to achieve
the purposes of or effect the transactions contemplated by the
preceding resolution, the taking of any such action or the
execution of any such agreements, instruments or documents to be
conclusive evidence of the authority to take or execute the
same.
This Certificate of Ownership and Merger shall be effective as
of 5:00 p.m. E.S.T. on December 31, 1993.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed and this Certificate to be executed and attested by its
officers thereunto duly authorized this 29th day of December, 1993.
REYNOLDS METALS COMPANY
By:D. Michael Jones
Vice President, General Counsel
and Secretary
[SEAL]
ATTEST:
By:Carol L. Dillon
Assistant Secretary
State of Delaware PAGE 1
Office of the Secretary of State
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF DESIGNATION OF "REYNOLDS METALS
COMPANY" FILED IN THIS OFFICE ON THE TWENTIETH DAY OF JANUARY,
A.D. 1994, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
William T. Quillen
-----------------------------
William T. Quillen, Secretary of State
AUTHENTICATION: 7005454
DATE: 01-21-94
0240111 8100
944002852
CERTIFICATE OF DESIGNATIONS,
PREFERENCES, RIGHTS AND LIMITATIONS OF
7% PRIDES, Convertible Preferred Stock
of
REYNOLDS METALS COMPANY
______________________
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
______________________
Reynolds Metals Company, a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby
certifies that, under (i) authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation of the Corporation, as amended
to date, (ii) the provisions of Sections 141(c) and 151 of the General
Corporation Law of the State of Delaware, and (iii) resolutions adopted by
the Board of Directors at its meeting on December 17, 1993, the 1993
Preferred Stock Committee of the Board of Directors at its meeting on
January 18, 1994 duly adopted the following resolution:
RESOLVED, that under (i) authority conferred upon the 1993
Preferred Stock Committee by the Board of Directors and (ii)
authority conferred upon the Board of Directors by the Restated
Certificate of Incorporation, as amended to date (the "Restated
Certificate of Incorporation"), the 1993 Preferred Stock Committee
hereby authorizes the issuance of 11,000,000 shares of authorized and
unissued preferred stock, without par value, of the Corporation, and
hereby fixes the designation, powers, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of such shares,
in addition to those set forth in the Restated Certificate of
Incorporation, as follows, to be set forth in a certificate of
designations (the "Certificate of Designations"):
Section 1. Designation and Size of Issue; Ranking. (a)
The distinctive designation of the series of preferred stock shall be
"7% PRIDES, Convertible Preferred Stock" (the "PRIDES"). The shares
are Preferred Redeemable Increased Dividend Equity Securities. The
number of shares constituting the PRIDES shall be 11,000,000 shares.
Each share of PRIDES shall have a stated value of $47.25.
(b) Any shares of the PRIDES which at any time have been
redeemed for, or converted into, Common Stock, without par value, of
the Corporation (the "Common Stock") or otherwise reacquired by the
Corporation shall, after such redemption, conversion or other
acquisition, resume the status of authorized and unissued shares of
preferred stock, without par value, of the Corporation (the
"Preferred Stock"), without designation as to series until such
shares are once more designated as part of a particular series by the
Board of Directors.
(c) The shares of PRIDES shall rank on a parity, both as
to payment of dividends and distribution of assets upon liquidation,
with any Preferred Stock issued by the Corporation after the date of
this Certificate of Designations that by its terms ranks pari passu
with the PRIDES.
Section 2. Dividends. (a) The holders of record of the
shares of PRIDES shall be entitled to receive, when and as declared
by the Board of Directors out of funds legally available therefor,
cash dividends ("Preferred Dividends") from the date of the issuance
of the shares of PRIDES at the rate per annum of 7 percent of the
stated value per share (equivalent to $3.31 per annum or $0.8275 per
quarter for each share of PRIDES), payable quarterly in arrears, on
each April 1, July 1, October 1 and December 31 (each a "Dividend
Payment Date") or, if any such date is not a business day (as defined
herein), the Preferred Dividend due on such Dividend Payment Date
shall be paid on the next succeeding business day; provided, however,
that, with respect to any dividend period during which a redemption
occurs, the Corporation may, at its option, declare accrued Preferred
Dividends to, and pay such Preferred Dividends on, the date fixed for
redemption, in which case such Preferred Dividends shall be payable
to the holders of shares of PRIDES as of the record date for such
dividend payment and shall not be included in the calculation of the
related PRIDES Call Price (as defined herein). The first dividend
period shall be from the date of initial issuance of the shares of
PRIDES to but excluding April 1, 1994 and the first Preferred
Dividend shall be payable on April 1, 1994. Preferred Dividends on
shares of PRIDES shall be cumulative and shall accumulate from the
date of original issuance. Preferred Dividends on shares of PRIDES
shall cease to accrue on and after the Mandatory Conversion Date (as
defined herein) or on and after the date of their earlier conversion
or redemption, as the case may be. Preferred Dividends shall be
payable to holders of record as they appear on the stock register of
the Corporation on such record dates, not less than 15 nor more than
60 days preceding the payment date thereof, as shall be fixed by the
Board of Directors. Preferred Dividends payable on shares of PRIDES
for any period less than a full quarterly dividend period (or, in the
case of the first Preferred Dividend, from the date of initial
issuance of the shares of PRIDES to but excluding the first Dividend
Payment Date) shall be computed on the basis of a 360-day year of
twelve 30-day months and the actual number of days elapsed in any
period less than one month. Preferred Dividends shall accrue on a
daily basis whether or not there are funds of the Corporation legally
available for the payment of such dividends and whether or not such
Preferred Dividends are declared. Accrued but unpaid Preferred
Dividends shall cumulate as of the Dividend Payment Date on which
they first become payable, but no interest shall accrue on
accumulated but unpaid Preferred Dividends.
(b) As long as shares of PRIDES are outstanding, no
dividends (other than dividends payable in shares of, or warrants,
rights or options exercisable for or convertible into shares of,
Second Preferred Stock, $100 par value, of the Corporation (the
"Second Preferred Stock"), Common Stock or any other capital stock of
the Corporation ranking junior to the shares of PRIDES as to the
payment of dividends and the distribution of assets upon liquidation
(collectively, the "Junior Stock") and cash in lieu of fractional
shares in connection with any such dividend) shall be paid or
declared in cash or otherwise, nor shall any other distribution be
made (other than a distribution payable in Junior Stock and cash in
lieu of fractional shares in connection with any such distribution),
on any Junior Stock unless (i) full dividends on Preferred Stock
(including the shares of PRIDES) that does not constitute Junior
Stock ("Parity Preferred Stock") have been paid, or declared and set
aside for payment, for all dividend periods terminating at or before
the date of such Junior Stock dividend or distribution payment to the
extent such dividends are cumulative; (ii) dividends in full for the
current quarterly dividend period have been paid, or declared and set
aside for payment, on all Parity Preferred Stock to the extent such
dividends are cumulative; (iii) the Corporation has paid or set aside
all amounts, if any, then or theretofore required to be paid or set
aside for all purchase, retirement, and sinking funds, if any, for
any Parity Preferred Stock; and (iv) the Corporation is not in
default on any of its obligations to redeem any Parity Preferred
Stock.
(c) As long as any shares of PRIDES are outstanding, no
shares of any Junior Stock may be purchased, redeemed, or otherwise
acquired by the Corporation or any of its subsidiaries (except in
connection with a reclassification or exchange of any Junior Stock
through the issuance of other Junior Stock (and cash in lieu of
fractional shares in connection therewith) or the purchase,
redemption or other acquisition of any Junior Stock with any Junior
Stock (and cash in lieu of fractional shares in connection
therewith)) nor may any funds be set aside or made available for any
sinking fund for the purchase or redemption of any Junior Stock
unless: (i) full dividends on Parity Preferred Stock have been paid,
or declared and set aside for payment, for all dividend periods
terminating at or before the date of such purchase, redemption or
other acquisition to the extent such dividends are cumulative; (ii)
dividends in full for the current quarterly dividend period have been
paid, or declared and set aside for payment, on all Parity Preferred
Stock to the extent such dividends are cumulative; (iii) the
Corporation has paid or set aside all amounts, if any, then or
theretofore required to be paid or set aside for all purchase,
retirement, and sinking funds, if any, for any Parity Preferred
Stock; and (iv) the Corporation is not in default on any of its
obligations to redeem any Parity Preferred Stock.
(d) As long as any shares of PRIDES are outstanding,
dividends or other distributions may not be declared or paid on any
Parity Preferred Stock (other than dividends or other distributions
payable in Junior Stock and cash in lieu of fractional shares in
connection therewith), and the Corporation may not purchase, redeem
or otherwise acquire any Parity Preferred Stock (except with any
Junior Stock and cash in lieu of fractional shares in connection
therewith), unless either: (a)(i) full dividends on Parity Preferred
Stock have been paid, or declared and set aside for payment, for all
dividend periods terminating at or before the date of such Parity
Preferred Stock dividend, distribution, purchase, redemption or other
acquisition payment to the extent such dividends are cumulative; (ii)
dividends in full for the current quarterly dividend period have been
paid, or declared and set aside for payment, on all Parity Preferred
Stock to the extent such dividends are cumulative; (iii) the
Corporation has paid or set aside all amounts, if any, then or
theretofore required to be paid or set aside for all purchase,
retirement, and sinking funds, if any, for any Parity Preferred
Stock; and (iv) the Corporation is not in default on any of its
obligations to redeem any Parity Preferred Stock; or (b) with respect
to the payment of dividends only, any such dividends shall be
declared and paid pro rata so that the amounts of any dividends
declared and paid per share of PRIDES and each other share of Parity
Preferred Stock shall in all cases bear to each other the same ratio
that accrued dividends (including any accumulation with respect to
unpaid dividends for prior dividend periods, if such dividends are
cumulative) per share of PRIDES and such other shares of Parity
Preferred Stock bear to each other.
Section 3. Conversion or Redemption. (a) Unless
previously either redeemed or converted at the option of the holder
in accordance with the provisions of Section 3(c), on December 31,
1997 (the "Mandatory Conversion Date"), each outstanding share of
PRIDES shall mandatorily convert ("Mandatory Conversion") into (i)
shares of authorized Common Stock at the PRIDES Common Equivalent
Rate (as defined herein) in effect on the Mandatory Conversion Date
and (ii) the right to receive cash in an amount equal to all accrued
and unpaid Preferred Dividends on such share of PRIDES (other than
previously declared dividends payable to a holder of record as of a
prior date) to but excluding the Mandatory Conversion Date, whether
or not declared, out of funds legally available for the payment of
Preferred Dividends, subject to the right of the Corporation to
redeem the shares of PRIDES on or after December 31, 1996 (the
"Initial Redemption Date") and before the Mandatory Conversion Date
and subject to the conversion of the shares of PRIDES at the option
of the holder at any time before the Mandatory Conversion Date. The
"PRIDES Common Equivalent Rate" shall initially be one share of
Common Stock for each share of PRIDES and shall be subject to
adjustment as set forth in Sections 3(d) and 3(e). Shares of PRIDES
shall cease to be outstanding on the Mandatory Conversion Date. The
Corporation shall make such arrangements as it deems appropriate for
the issuance of certificates representing shares of Common Stock and
for the payment of cash in respect of such accrued and unpaid
dividends, if any, or cash in lieu of fractional shares, if any, in
exchange for and contingent upon surrender of certificates
representing the shares of PRIDES, and the Corporation may defer the
payment of dividends on such shares of Common Stock and the voting
thereof until, and make such payment and voting contingent upon, the
surrender of certificates representing the shares of PRIDES;
provided, that the Corporation shall give the holders of the shares
of PRIDES such notice of any such actions as the Corporation deems
appropriate and upon surrender such holders shall be entitled to
receive such dividends declared and paid, if any, on such shares of
Common Stock subsequent to the Mandatory Conversion Date.
(b)(i) Shares of PRIDES are not redeemable by the
Corporation before the Initial Redemption Date. At any time and from
time to time on or after that date until immediately before the
Mandatory Conversion Date, the Corporation shall have the right to
redeem, in whole or in part, the outstanding shares of PRIDES
(subject to the notice provisions set forth in Section 3(b)(iii)).
Upon any such redemption, the Corporation shall deliver to each
holder thereof, in exchange for each such share of PRIDES subject to
redemption, the greater of:
(A) the number of shares of Common Stock equal to the
applicable PRIDES Call Price (as defined herein) in effect on
the redemption date divided by the Current Market Price (as
defined herein) of the Common Stock, determined as of the second
Trading Day (as defined herein) immediately preceding the Notice
Date (as defined herein); or
(B) .82 of a share of Common Stock (subject to adjustment
in the same manner as the PRIDES Optional Conversion Rate (as
defined herein) is adjusted).
Preferred Dividends on the shares of PRIDES shall cease to accrue on
and after the date fixed for their redemption.
The "PRIDES Call Price" of each share of PRIDES shall be
the sum of (x) $48.077 on and after the Initial Redemption Date, to
and including March 31, 1997; $47.870 on and after April 1, 1997, to
and including June 30, 1997; $47.663 on and after July 1, 1997, to
and including September 30, 1997; $47.457 on and after October 1,
1997, to and including November 30, 1997; and $47.25 on and after
December 1, 1997, to and including December 31, 1997; and (y) all
accrued and unpaid Preferred Dividends thereon to but not including
the date fixed for redemption (other than previously declared
Preferred Dividends payable to a holder of record as of a prior
date). If fewer than all the outstanding shares of PRIDES are to be
called for redemption, shares of PRIDES to be called shall be
selected by the Corporation from outstanding shares of PRIDES not
previously called by lot or pro rata (as nearly as may be) or by any
other method determined by the Board of Directors in its sole
discretion to be equitable.
(ii) The term "Current Market Price" per share of the
Common Stock on any date of determination means the lesser of (x) the
average of the Closing Prices (as defined herein) of the Common Stock
for the 15 consecutive Trading Days ending on and including such date
of determination, or (y) the Closing Price of the Common Stock for
such date of determination; provided, however, that, with respect to
any redemption of shares of PRIDES, if any event resulting in an
adjustment of the PRIDES Common Equivalent Rate occurs during the
period beginning on the first day of such 15-day period and ending on
the applicable redemption date, the Current Market Price as
determined pursuant to the foregoing shall be appropriately adjusted
to reflect the occurrence of such event.
(iii) The Corporation shall provide notice of any
redemption of the shares of PRIDES to holders of record of the shares
of PRIDES to be called for redemption not less than 15 nor more than
60 days before the date fixed for redemption. Any such notice shall
be provided by mail, sent to the holders of record of the shares of
PRIDES to be called at each such holder's address as it appears on
the stock register of the Corporation, first class postage prepaid;
provided, however, that failure to give such notice or any defect
therein shall not affect the validity of the proceeding for
redemption of any shares of PRIDES to be redeemed except as to the
holder to whom the Corporation has failed to give such notice or
whose notice was defective. A public announcement of any call for
redemption shall be made by the Corporation before, or at the time
of, the mailing of such notice of redemption. The term "Notice Date"
with respect to any notice given by the Corporation in connection
with a redemption of the shares of PRIDES means the date on which
first occurs either the public announcement of such redemption or the
commencement of mailing of the notice to the holders of shares of
PRIDES, in each case pursuant to this Section 3(b)(iii).
Each such notice shall state, as appropriate, the following
and may contain such other information as the Corporation deems
advisable:
(A) the redemption date;
(B) that all outstanding shares of PRIDES are to be
redeemed or, in the case of a redemption of fewer than all
outstanding shares of PRIDES, the number of such shares held by
such holder to be redeemed;
(C) the PRIDES Call Price, the number of shares of Common
Stock deliverable upon redemption of each share of PRIDES to be
redeemed and the Current Market Price used to calculate such
number of shares of Common Stock;
(D) the place or places where certificates for such shares
are to be surrendered for redemption; and
(E) that dividends on the shares of PRIDES to be redeemed
shall cease to accrue on and after such redemption date (except
as otherwise provided herein).
(iv) The Corporation's obligation to deliver shares of
Common Stock and provide funds upon redemption in accordance with
this Section 3(b) shall be deemed fulfilled if, on or before a
redemption date, the Corporation shall deposit with a bank or trust
company, or an affiliate of a bank or trust company, having an office
or agency in New York, New York and having (or such affiliate having)
a combined capital and surplus of at least $50,000,000 according to
its last published statement of condition, or shall set aside or make
other reasonable provision for the issuance of, such number of shares
of Common Stock as are required to be delivered by the Corporation
pursuant to this Section 3(b) upon the occurrence of the related
redemption of shares of PRIDES and for the payment of cash in lieu of
the issuance of fractional share amounts and accrued and unpaid
dividends payable in cash on the shares of PRIDES to be redeemed as
required by this Section 3(b), in trust for the account of the
holders of such shares of PRIDES to be redeemed (and so as to be and
continue to be available therefor), with irrevocable instructions and
authority to such bank or trust company that such shares and funds be
delivered upon redemption of the shares of PRIDES so called for
redemption. Any interest accrued on such funds shall be paid to the
Corporation from time to time. Any shares of Common Stock or funds
so deposited and unclaimed at the end of three years from such
redemption date shall be repaid and released to the Corporation,
after which the holder or holders of such shares of PRIDES so called
for redemption shall look only to the Corporation for delivery of
shares of Common Stock and the payment of any other funds due in
connection with the redemption of the shares of PRIDES.
(v) Each holder of shares of PRIDES called for redemption
must surrender the certificates evidencing such shares (properly
endorsed or assigned for transfer, if the Board of Directors shall so
require and the notice shall so state) to the Corporation at the
place designated in the notice of such redemption and shall thereupon
be entitled to receive certificates evidencing shares of Common Stock
and to receive any funds payable pursuant to this Section 3(b)
following such surrender and following the date of such redemption.
In case fewer than all the shares represented by any such surrendered
certificate are called for redemption, a new certificate shall be
issued at the expense of the Corporation representing the unredeemed
shares. If such notice of redemption shall have been given, and if
on the date fixed for redemption shares of Common Stock and funds
necessary for the redemption shall have been irrevocably either set
aside by the Corporation separate and apart from its other funds or
assets in trust for the account of the holders of the shares to be
redeemed (and so as to be and continue to be available therefor) or
deposited with a bank or trust company or an affiliate thereof as
provided herein or the Corporation shall have made other reasonable
provision therefor, then notwithstanding that the certificates
evidencing any shares of PRIDES so called for redemption shall not
have been surrendered, the shares represented thereby so called for
redemption shall be deemed no longer outstanding and Preferred
Dividends with respect to the shares so called for redemption and all
rights with respect to the shares so called for redemption shall
forthwith on and after such date cease and terminate (unless the
Corporation defaults on the payment of the redemption price), except
for (i) the rights of the holders to receive the shares of Common
Stock and funds, if any, payable pursuant to this Section 3(b)
without interest upon surrender of their certificates therefor and
(ii) the right of the holders, pursuant to Section 3(c) to convert
the shares of PRIDES called for redemption until immediately before
the close of business on any redemption date; provided, however, that
holders of shares of PRIDES at the close of business on a record date
for any payment of Preferred Dividends shall be entitled to receive
the Preferred Dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the redemption of such shares
following such record date and before the Dividend Payment Date.
Holders of shares of PRIDES that are redeemed shall not be entitled
to receive dividends declared and paid on such shares of Common
Stock, and such shares of Common Stock shall not be entitled to vote,
until such shares of Common Stock are issued upon the surrender of
the certificates representing such shares of PRIDES and upon such
surrender such holders shall be entitled to receive such dividends
declared and paid on such shares of Common Stock subsequent to such
redemption date.
(c) Shares of PRIDES are convertible, in whole or in part,
at the option of the holders thereof ("Optional Conversion"), at any
time before the Mandatory Conversion Date, unless previously
redeemed, into shares of Common Stock at a rate of .82 of a share of
Common Stock for each share of PRIDES (the "PRIDES Optional
Conversion Rate"), subject to adjustment as set forth below. The
right of Optional Conversion of shares of PRIDES called for
redemption shall terminate immediately before the close of business
on any redemption date with respect to such shares.
Optional Conversion of shares of PRIDES may be effected by
delivering certificates evidencing such shares of PRIDES, together
with written notice of conversion and a proper assignment of such
certificates to the Corporation or in blank (and, if applicable, cash
payment of an amount equal to the Preferred Dividend attributable to
the current quarterly dividend period payable on such shares), to the
office of the transfer agent for the shares of PRIDES or to any other
office or agency maintained by the Corporation for that purpose and
otherwise in accordance with Optional Conversion procedures
established by the Corporation. Each Optional Conversion shall be
deemed to have been effected immediately before the close of business
on the date on which the foregoing requirements shall have been
satisfied. The Optional Conversion shall be at the PRIDES Optional
Conversion Rate in effect at such time and on such date.
Holders of shares of PRIDES at the close of business on a
record date for any payment of declared Preferred Dividends shall be
entitled to receive the Preferred Dividend payable on such shares of
PRIDES on the corresponding Dividend Payment Date notwithstanding the
Optional Conversion of such shares of PRIDES following such record
date and before such Dividend Payment Date. However, shares of
PRIDES surrendered for Optional Conversion after the close of
business on a record date for any payment of declared Preferred
Dividends and before the opening of business on the next succeeding
Dividend Payment Date must be accompanied by payment in cash of an
amount equal to the Preferred Dividends attributable to the current
quarterly dividend period payable on such date (unless such shares of
PRIDES are subject to redemption on a redemption date between such
record date established for such Dividend Payment Date and such
Dividend Payment Date). Except as provided above, upon any Optional
Conversion of shares of PRIDES, the Corporation shall make no payment
of or allowance for unpaid Preferred Dividends, whether or not in
arrears, on such shares of PRIDES as to which Optional Conversion has
been effected or for previously declared dividends or distributions
on the shares of Common Stock issued upon Optional Conversion.
(d) The PRIDES Common Equivalent Rate and the PRIDES
Optional Conversion Rate are each subject to adjustment from time to
time as provided below in this paragraph (d).
(i) If the Corporation shall pay a stock dividend or make
a distribution with respect to its Common Stock in shares of
Common Stock (including by way of reclassification of any shares
of its Common Stock), the PRIDES Common Equivalent Rate and the
PRIDES Optional Conversion Rate in effect at the opening of
business on the day following the date fixed for the
determination by stockholders entitled to receive such dividend
or other distribution shall each be increased by multiplying
such PRIDES Common Equivalent Rate and PRIDES Optional
Conversion Rate by a fraction of which the numerator shall be
the sum of the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination,
immediately before such dividend or distribution, plus the total
number of shares of Common Stock constituting such dividend or
other distribution, and of which the denominator shall be the
number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination, immediately
before such dividend or distribution, such increase to become
effective immediately after the opening of business on the day
following the date fixed for such determination. For the
purposes of this clause (i), the number of shares of Common
Stock at any time outstanding shall not include shares held in
the treasury of the Corporation but shall include shares
issuable in respect of certificates issued in lieu of fractions
of shares of Common Stock.
(ii) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common
Stock, the PRIDES Common Equivalent Rate and the PRIDES Optional
Conversion Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective
shall each be proportionately increased, and, conversely, in
case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the PRIDES Common
Equivalent Rate and the PRIDES Optional Conversion Rate in
effect at the opening of business on the day following the day
upon which such combination becomes effective shall each be
proportionately reduced, such increases or reductions, as the
case may be, to become effective immediately after the opening
of business on the day following the day upon which such
subdivision or combination becomes effective.
(iii) If the Corporation shall, after the date of this
Certificate of Designations, issue rights or warrants to all
holders of its Common Stock entitling them (for a period not
exceeding 45 days from the date of such issuance) to subscribe
for or purchase shares of Common Stock at a price per share less
than the Current Market Price of the Common Stock (determined
pursuant to Section 3(b)(ii)) on the record date for the
determination of stockholders entitled to receive such rights or
warrants, then in each case the PRIDES Common Equivalent Rate
and the PRIDES Optional Conversion Rate shall each be adjusted
by multiplying the PRIDES Common Equivalent Rate and the PRIDES
Optional Conversion Rate in effect on such record date by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights
or warrants, immediately before such issuance, plus the number
of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants, and of which the
denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately before such issuance, plus the number of shares of
Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at
such Current Market Price (determined by multiplying such total
number of shares by the exercise price of such rights or
warrants and dividing the product so obtained by such Current
Market Price). Shares of Common Stock held by the Corporation
or by another corporation of which a majority of the shares
entitled to vote in the election of directors are held, directly
or indirectly, by the Corporation shall not be deemed to be
outstanding for purposes of such computation. Such adjustment
shall become effective at the opening of business on the
business day next following the record date for the
determination of stockholders entitled to receive such rights or
warrants. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the
PRIDES Common Equivalent Rate and the PRIDES Optional Conversion
Rate shall each be readjusted to the PRIDES Common Equivalent
Rate and the PRIDES Optional Conversion Rate which would then be
in effect had the adjustments made after the issuance of such
rights or warrants been made upon the basis of issuance of
rights or warrants in respect of only the number of shares of
Common Stock actually delivered.
(iv) If the Corporation shall pay a dividend or make a
distribution to all holders of its Common Stock consisting of
evidences of its indebtedness, cash or other assets (including
shares of capital stock of the Corporation other than Common
Stock but excluding any cash dividends or distributions, other
than Extraordinary Cash Distributions (as defined herein) and
dividends referred to in clauses (i) and (ii) above), or shall
issue to all holders of its Common Stock rights or warrants to
subscribe for or purchase any of its securities (other than
those referred to in clause (iii) above), then in each such
case, the PRIDES Common Equivalent Rate and the PRIDES Optional
Conversion Rate shall each be adjusted by multiplying the PRIDES
Common Equivalent Rate and the PRIDES Optional Conversation Rate
in effect on the record date for such dividend or distribution
or for the determination of stockholders entitled to receive
such rights or warrants, as the case may be, by a fraction of
which the numerator shall be the Current Market Price per share
of the Common Stock (determined pursuant to Section 3(b)(ii) on
such record date), and of which the denominator shall be such
Current Market Price per share of Common Stock less either (i)
the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive) on such record date of
the portion of the assets or evidences of indebtedness so
distributed, or of such subscription rights or warrants,
applicable to one share of Common Stock, or (ii) if applicable,
the amount of the Extraordinary Cash Distributions. Such
adjustment shall become effective on the opening of business on
the business day next following the record date for such
dividend or distribution or for the determination of holders
entitled to receive such rights or warrants, as the case may be.
(v) Any shares of Common Stock issuable in payment of a
dividend or other distribution shall be deemed to have been
issued immediately before the close of business on the record
date for such dividend or other distribution for purposes of
calculating the number of outstanding shares of Common Stock
under this Section 3.
(vi) Anything in this Section 3 notwithstanding, the
Corporation shall be entitled (but shall not be required) to
make such upward adjustments in the PRIDES Common Equivalent
Rate, the PRIDES Optional Conversion Rate and the PRIDES Call
Price in addition to those set forth by this Section 3, as the
Corporation, in its sole discretion, shall determine to be
advisable, in order that any stock dividends, subdivision of
stock, distribution of rights to purchase stock or securities,
or distribution of securities convertible into or exchangeable
for stock (or any transaction that could be treated as any of
the foregoing transactions pursuant to Section 305 of the
Internal Revenue Code of 1986, as amended) hereafter made by the
Corporation to its stockholders shall not be taxable. The term
"Extraordinary Cash Distribution" means, with respect to any
consecutive 12-month period, all cash dividends and cash
distributions on the Common Stock during such period (other than
cash dividends and cash distributions for which a prior
adjustment to the PRIDES Common Equivalent Rate and PRIDES
Optional Conversion Rate was previously made) to the extent such
dividends and distributions exceed, on a per share of Common
Stock basis, 10% of the average daily Closing Price of the
Common Stock over such period.
(vii) In any case in which this Section 3(d) shall require
that an adjustment as a result of any event become effective at
the opening of business on the business day next following a
record date and the date fixed for conversion pursuant to
Section 3(a) or redemption pursuant to Section 3(b) on and after
such record date, but before the occurrence of such event, the
Corporation may, in its sole discretion, elect to defer the
following until after the occurrence of such event: (A) issuing
to the holder of any shares of PRIDES surrendered for conversion
or redemption the fractional shares of Common Stock issuable
before giving effect to such adjustment; and (B) paying to such
holder any amount in cash in lieu of a fractional share of
Common Stock pursuant to Section 4.
(viii) All adjustments to the PRIDES Common Equivalent
Rate and the PRIDES Optional Conversion Rate shall be calculated
to the nearest 1/100th of a share of Common Stock. No
adjustment in the PRIDES Common Equivalent Rate or in the PRIDES
Optional Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one
percent therein; provided, however, that any adjustments which
by reason of this Section 3(d) are not required to be made shall
be carried forward and taken into account in any subsequent
adjustment. All adjustments to the PRIDES Common Equivalent
Rate and PRIDES Optional Conversion Rate shall be made
successively.
(ix) At least 10 business days before taking any action
that could result in an adjustment affecting the PRIDES Common
Equivalent Rate or the PRIDES Optional Conversion Rate such that
the conversion price (for purposes of this section, an amount
equal to the PRIDES Call Price divided by the PRIDES Common
Equivalent Rate or the PRIDES Optional Conversion Rate,
respectively, as in effect from time to time) would be below the
then par value of the Common Stock, the Corporation shall take
any corporate action which may, in the opinion of its counsel,
be necessary in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of Common
Stock at the PRIDES Common Equivalent Rate or the PRIDES
Optional Conversion Rate as so adjusted.
(x) Before redeeming any shares of PRIDES, the Corporation
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of Common
Stock upon such redemption.
(e) In case of any consolidation or merger to which the
Corporation is a party (other than a consolidation or merger in which
the Corporation is the surviving or continuing corporation and in
which the shares of Common Stock outstanding immediately before the
merger or consolidation remain unchanged), or in the case of any sale
or transfer to another corporation of the property of the Corporation
as an entirety or substantially as an entirety, or in the case of a
statutory exchange of securities with another corporation (other than
in connection with a merger or acquisition), each share of PRIDES
shall, after consummation of such transaction, be subject to (i)
conversion at the option of the holder into the kind and amount of
securities, cash, or other property receivable upon consummation of
such transaction by a holder of the number of shares of Common Stock
into which such share of PRIDES might have been converted immediately
before consummation of such transaction, (ii) conversion on the
Mandatory Conversion Date into the kind and amount of securities,
cash, or other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock into
which such share of PRIDES would have been converted if the
conversion on the Mandatory Conversion Date had occurred immediately
before the date of consummation of such transaction, plus the right
to receive cash in an amount equal to all accrued and unpaid
dividends on such share of PRIDES (other than previously declared
dividends payable to a holder of record as of a prior date), and
(iii) redemption on any redemption date in exchange for the kind and
amount of securities, cash, or other property receivable upon
consummation of such transaction by a holder of the number of shares
of Common Stock that would have been issuable at the PRIDES Call
Price in effect on such redemption date upon a redemption of such
share of PRIDES immediately before consummation of such transaction,
assuming that, if the Notice Date for such redemption is not before
such transaction, the Notice Date had been the date of such
transaction; and assuming in each case that such holder of shares of
Common Stock failed to exercise rights of election, if any, as to the
kind or amount of securities, cash, or other property receivable upon
consummation of such transaction (provided that, if the kind or
amount of securities, cash, or other property receivable upon
consummation of such transaction is not the same for each
non-electing share, then the kind and amount of securities, cash, or
other property receivable upon consummation of such transaction for
each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). The
kind and amount of securities into or for which the shares of PRIDES
shall be convertible or redeemable after consummation of such
transaction shall be subject to adjustment as described in Section
3(d) following the date of consummation of such transaction. The
Corporation may not become a party to any such transaction unless the
terms thereof are consistent with the foregoing.
(f) Whenever the PRIDES Common Equivalent Rate and PRIDES
Optional Conversion Rate are adjusted as provided in Section 3(d),
the Corporation shall:
(i) forthwith compute the adjusted PRIDES Common
Equivalent Rate and PRIDES Optional Conversion Rate in
accordance with this Section 3 and prepare a certificate signed
by the Chief Financial Officer, any Vice President, the
Treasurer or the Controller of the Corporation setting forth the
adjusted PRIDES Common Equivalent Rate and the PRIDES Optional
Conversion Rate, the method of calculation thereof in reasonable
detail and the facts requiring such adjustment and upon which
such adjustment is based, which certificate shall be conclusive,
final and binding evidence of the correctness of the adjustment,
and shall file such certificate forthwith with the transfer
agent for the shares of the PRIDES and the Common Stock;
(ii) make a prompt public announcement stating that the
PRIDES Common Equivalent Rate and PRIDES Optional Conversion
Rate have been adjusted and setting forth the adjusted PRIDES
Common Equivalent Rate and PRIDES Optional Conversion Rate;
(iii) mail a notice stating that the PRIDES Common
Equivalent Rate and the PRIDES Optional Conversion Rate have
been adjusted, the facts requiring such adjustment and upon
which such adjustment is based and setting forth the adjusted
PRIDES Common Equivalent Rate and PRIDES Optional Conversion
Rate, to the holders of record of the outstanding shares of
PRIDES, at or prior to the time the Corporation mails an interim
statement, if any, to its stockholders covering the fiscal
quarter period during which the facts requiring such adjustment
occurred, but in any event within 45 days of the end of such
fiscal quarter period.
(g) In case, at any time while any of the shares of PRIDES
are outstanding,
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock, excluding any cash dividends
other than Extraordinary Cash Distributions; or
(ii) the Corporation shall authorize the issuance to all
holders of the Common Stock of rights or warrants to subscribe
for or purchase shares of the Common Stock or of any other
subscription rights or warrants; or
(iii) the Corporation shall authorize any reclassification
of the Common Stock (other than a subdivision or combination
thereof) or any consolidation or merger to which the Corporation
is a party and for which approval of any stockholders of the
Corporation is required (except for a merger of the Corporation
into one of its subsidiaries solely for the purpose of changing
the corporate domicile of the Corporation to another state of
the United States and in connection with which there is no
substantive change in the rights or privileges of any securities
of the Corporation other than changes resulting from differences
in the corporate statutes of the state the Corporation was then
domiciled in and the new state of domicile), or the sale or
transfer of all or substantially all of the assets of the
Corporation;
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of PRIDES, and
shall cause to be mailed to the holders of shares of PRIDES at their
last addresses as they shall appear on the stock register of the
Corporation, at least 10 business days before the date hereinafter
specified in clause (A) or (B) below (or the earlier of the dates
hereinafter specified, in the event that more than one date is
specified), a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or
(B) the date on which any such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property (including cash),
if any, deliverable upon such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up. The
failure to give or receive the notice required by this paragraph (g)
or any defect therein shall not affect the legality or validity of
any such dividend, distribution, right or warrant or other action.
Section 4. No Fractional Shares. No fractional shares of
Common Stock shall be issued upon redemption or conversion of any
shares of the PRIDES. In lieu of any fractional share otherwise
issuable in respect of the aggregate number of shares of the PRIDES
of any holder that are redeemed or converted on any redemption date
or upon Mandatory Conversion or Optional Conversion, such holder
shall be entitled to receive an amount in cash (computed to the
nearest cent) equal to the same fraction of the (i) Current Market
Price of the Common Stock (determined as of the second Trading Day
immediately preceding the Notice Date) in the case of redemption, or
(ii) Closing Price of the Common Stock determined (A) as of the fifth
Trading Day immediately preceding the Mandatory Conversion Date, in
the case of Mandatory Conversion, or (B) as of the second Trading Day
immediately preceding the effective date of conversion, in the case
of an Optional Conversion by a holder. If more than one share of
PRIDES shall be surrendered for conversion or redemption at one time
by or for the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of the PRIDES so surrendered or
redeemed.
Section 5. Reservation of Common Stock. The Corporation
shall at all times reserve and keep available out of its authorized
and unissued Common Stock, solely for issuance upon the conversion or
redemption of shares of PRIDES, as herein provided, free from
preemptive rights, such maximum number of shares of Common Stock as
shall from time to time be issuable upon the Mandatory Conversion or
Optional Conversion or redemption of all the shares of PRIDES then
outstanding.
Section 6. Definitions. As used in this Certificate of
Designations:
(i) the term "business day" shall mean any day other than
a Saturday, Sunday, or a day on which banking institutions in
the State of New York are authorized or obligated by law or
executive order to close;
(ii) the term "Closing Price", on any day, shall mean the
last sale price as shown on the New York Stock Exchange
Composite Tape on such day, or, in case no such sale takes place
on such day, the average of the reported closing bid and asked
prices regular way on the New York Stock Exchange, or, if the
Common Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or, if not
listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices of the
Common Stock on the over-the-counter market on the day in
question as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System, or a similar generally
accepted reporting service, or if not so available in such
manner, as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that
purpose;
(iii) the term "record date" shall be such date as from
time to time fixed by the Board of Directors with respect to the
receipt of dividends, the receipt of a redemption price upon
redemption or the taking of any action or exercise of any voting
rights permitted hereby; and
(iv) the term "Trading Day" shall mean a date on which the
New York Stock Exchange (or any successor to such Exchange) is
open for the transaction of business.
Section 7. Payment of Taxes. The Corporation shall pay
any and all documentary, stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock
on the redemption or conversion of shares of PRIDES pursuant to
Section 3; provided, however, that the Corporation shall not be
required to pay any tax which may be payable in respect of any
registration of transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the registered holder of
shares of PRIDES redeemed or converted or to be redeemed or
converted, and no such issue or delivery shall be made unless and
until the person requesting such issue has paid to the Corporation
the amount of any such tax or has established, to the satisfaction of
the Corporation, that such tax has been paid.
Section 8. Liquidation Rights. In the event of any
voluntary or involuntary liquidation, dissolution, or winding up of
the Corporation, and subject to the rights of holders of any other
series of Preferred Stock, the holders of outstanding shares of
PRIDES are entitled to receive the sum of $47.25 per share, plus an
amount equal to any accrued and unpaid Preferred Dividends thereon,
out of the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of
Second Preferred Stock, Common Stock or any other capital stock
ranking junior to the shares of PRIDES upon liquidation, dissolution,
or winding up. If upon any voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, the assets of the
Corporation are insufficient to permit the payment of the full
preferential amounts payable with respect to the shares of PRIDES and
all other series of Parity Preferred Stock, the holders of shares of
PRIDES and of all other series of Parity Preferred Stock shall share
ratably in any distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they
are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of
PRIDES shall not be entitled to any further participation in any
distribution of assets by the Corporation. A consolidation or merger
of the Corporation with or into one or more other corporations
(whether or not the Corporation is the corporation surviving such
consolidation or merger), or a sale, lease or exchange of all or
substantially all of the assets of the Corporation shall not be
deemed to be a voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation.
Section 9. Voting Rights. (a) The holders of shares of
PRIDES shall have the right with the holders of Common Stock to vote
in the election of directors and upon each other matter coming before
any meeting of the holders of Common Stock on the basis of 4/5 of a
vote for each share of PRIDES held. The holders of shares of PRIDES
and the holders of Common Stock shall vote together as one class on
such matters except as otherwise provided by law or by the Restated
Certificate of Incorporation.
(b) In the event that dividends on the shares of PRIDES or
any other series of Preferred Stock shall be in arrears and unpaid
for six quarterly dividend periods, or if any series of Preferred
Stock (other than the PRIDES) shall be entitled for any other reason
to exercise voting rights, separate from the Common Stock, to elect
any directors of the Corporation ("Preferred Stock Directors"), the
holders of the shares of PRIDES (voting separately as a class with
holders of all other series of Preferred Stock upon which like voting
rights have been conferred and are exercisable), with each share of
PRIDES entitled to one vote on this and other matters in which
Preferred Stock votes as a group, shall be entitled to vote for the
election of two directors of the Corporation, such directors to be in
addition to the number of directors constituting the Board of
Directors immediately before the accrual of such right. Such right,
when vested, shall continue until all cumulative dividends
accumulated and payable on the shares of PRIDES and such other series
of Preferred Stock shall have been paid in full and the right of any
other series of Preferred Stock to exercise voting rights, separate
from the Common Stock, to elect Preferred Stock Directors shall
terminate or have terminated, and, when so paid and any such
termination occurs or has occurred, such right of the holders of the
shares of PRIDES shall cease. The term of office of any director
elected by the holders of the shares of PRIDES and such other series
shall terminate on the earlier of (i) the next annual meeting of
stockholders at which a successor shall have been elected and
qualified or (ii) the termination of the right of holders of the
shares of PRIDES and such other series to vote for such directors.
(c) The Corporation shall not, without the approval of the
holders of at least 66-2/3 percent of the shares of PRIDES then
outstanding: (i) amend, alter, or repeal any of the provisions of
the Restated Certificate of Incorporation or By-Laws of the
Corporation so as to affect adversely the powers, preferences or
rights of the holders of the shares of PRIDES then outstanding or
reduce the minimum time for any required notice to which the holders
of the shares of PRIDES then outstanding may be entitled (an
amendment of the Restated Certificate of Incorporation to authorize
or create, or to increase the authorized amount of, Junior Stock or
any stock of any class ranking on a parity with the PRIDES being
deemed not to affect adversely the powers, preferences, or rights of
the holders of the shares of PRIDES); (ii) authorize or create, or
increase the authorized amount of, any capital stock, or any security
convertible into capital stock of any class, ranking prior to the
shares of PRIDES either as to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up of
the Corporation; or (iii) merge or consolidate with or into any other
corporation, unless each holder of shares of PRIDES immediately
preceding such merger or consolidation shall receive or continue to
hold in the resulting corporation the same number of shares, with
substantially the same rights and preferences, as correspond to the
shares of PRIDES so held.
(d) The Corporation shall not, without the approval of the
holders of at least a majority of the shares of PRIDES then
outstanding: (i) increase the authorized number of shares of
Preferred Stock; or (ii) create any other class or classes of capital
stock of the Corporation ranking on a parity with the Preferred
Stock, either as to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up of the
Corporation, or create any stock or other security convertible into
or exchangeable for or evidencing the right to purchase any stock of
such other class ranking on a parity with the Preferred Stock, or
increase the authorized number of shares of any such other class or
amount of such other stock or security.
(e) Notwithstanding the provisions set forth in Sections
9(c) and 9(d), no such approval described therein of the holders of
the shares of PRIDES shall be required if, at or before the time when
such amendment, alteration, or repeal is to take effect or when the
authorization, creation, increase or issuance of any such prior or
parity stock or convertible security is to be made, or when such
consolidation or merger, voluntary liquidation, dissolution, or
winding up, sale, lease, conveyance, purchase, or redemption is to
take effect, as the case may be, provision is made for the redemption
of all shares of PRIDES at the time outstanding.
IN WITNESS WHEREOF, Reynolds Metals Company has caused this
certificate to be signed and attested this 20th day of January, 1994.
REYNOLDS METALS COMPANY
By: Henry S. Savedge, Jr.
Name: Henry S. Savedge, Jr.
Title: Executive Vice President
and Chief Financial Officer
Attest:
D. Michael Jones
Name: D. Michael Jones
Title: Vice President, General
Counsel and Secretary
State of Delaware PAGE 1
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF OWNERSHIP, WHICH MERGES:
"BEV-PAK, INC.", A DELAWARE CORPORATION,
"R/M CAN COMPANY", A DELAWARE CORPORATION,
WITH AND INTO "REYNOLDS METALS COMPANY" UNDER THE NAME OF
"REYNOLDS METALS COMPANY", A CORPORATION ORGANIZED AND EXISTING
UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED
IN THIS OFFICE THE TWELFTH DAY OF DECEMBER, A.D. 1994, AT 9
O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
Edward J. Freel
-----------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 7334005
DATE: 12-12-94
0240111 8100M
944241228
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
R/M CAN COMPANY
AND
BEV-PAK, INC.
INTO
REYNOLDS METALS COMPANY
_____________________________________________
Pursuant to Section 253 of the
General Corporation Law of Delaware
_____________________________________________
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify:
FIRST: That the Corporation is incorporated pursuant to the
General Corporation Law of the State of Delaware.
SECOND: That the Corporation owns all of the outstanding shares
of each class of the capital stock of R/M CAN COMPANY and BEV-PAK, INC.,
each a Delaware corporation.
THIRD: That the Corporation, by the following resolutions of
its Board of Directors, duly adopted at a meeting held on the 21st day of
October, 1994, determined to merge into itself R/M CAN COMPANY and BEV-PAK,
INC. on the conditions set forth in such resolutions:
RESOLVED, that the corporation, as owner of all of the
outstanding shares of each class of the capital stock of
R/M Can Company and Bev-Pak, Inc., merge into itself R/M
Can Company and Bev-Pak, Inc. and assume all of their
respective liabilities and obligations effective as of
11:59 p.m. E.S.T. on December 31, 1994; and
FURTHER RESOLVED, that the Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer,
any Vice Chairman of the Board, any Executive Vice
President, any Vice President, the Secretary and any
Assistant Secretary are each hereby authorized on behalf of
the corporation to take all such action, including, without
limitation, incurrence and payment of all fees, expenses
and other charges, and to execute and deliver all such
agreements, instruments and documents (including, without
limitation, a certificate of ownership and merger and
documents relating to employee benefit plans maintained for
employees of Bev-Pak, Inc.) which in the opinion of any of
them may be necessary or desirable to achieve the purposes
of or effect the transactions contemplated by the preceding
resolution, the taking of any such action or the execution
and delivery of any such agreements, instruments or
documents to be conclusive evidence of the authority to
take, execute or deliver the same.
This Certificate of Ownership and Merger shall be effective as
of 11:59 p.m. E.S.T. on December 31, 1994.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed and this Certificate to be executed and attested by its
officers thereunto duly authorized this 29th day of November, 1994.
REYNOLDS METALS COMPANY
By D. Michael Jones
Vice President, General Counsel
and Secretary
[SEAL]
ATTEST:
By: Brenda A. Hart
Assistant Secretary
State of Delaware PAGE 1
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF OWNERSHIP, WHICH MERGES:
"RMC HOLDING, INC.", A DELAWARE CORPORATION,
WITH AND INTO "REYNOLDS METALS COMPANY" UNDER THE NAME OF
"REYNOLDS METALS COMPANY", A CORPORATION ORGANIZED AND EXISTING
UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED
IN THIS OFFICE THE THIRTEENTH DAY OF DECEMBER, A.D. 1995, AT 9
O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
Edward J. Freel
-----------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 7752105
DATE: 12-15-95
0240111 8100M
950294013
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
RMC HOLDINGS, INC.
INTO
REYNOLDS METALS COMPANY
Pursuant to Section 253 of the
General Corporation Law of Delaware
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify:
FIRST: That the Corporation is incorporated pursuant
to the General Corporation Law of the State of Delaware.
SECOND: That the Corporation owns all of the
outstanding shares of each class of the capital stock of
RMC HOLDINGS, Inc., a Delaware corporation.
THIRD: That the Corporation, by the following
resolutions of its Board of Directors, duly adopted at a meeting
held on the 17th day of November, 1995, determined to merge into
itself RMC HOLDINGS, INC. on the conditions set forth in such
resolutions:
RESOLVED, that the corporation, as owner of all of
the outstanding shares of each class of the capital stock of
RMC Holdings, Inc., merge into itself RMC Holdings, Inc. and
assume all of its liabilities and obligations effective as
of 11:59 p.m. E.S.T. on December 15, 1995; provided, that at
any time prior to the filing of a certificate of ownership
and merger with the Delaware Secretary of State with respect
to such merger, this resolution may be rescinded by the
Board of Directors of the corporation or by the Executive
Committee thereof; and
FURTHER RESOLVED, that the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial
Officer, the Vice Chairman of the Board, any Executive Vice
President, any Vice President, the Secretary and any
Assistant Secretary are each hereby authorized on behalf of
the corporation to take all such action, including, without
limitation, incurrence and payment of all fees, expenses and
other charges, and to execute and deliver all such
agreements, instruments and documents (including, without
limitation, a certificate of ownership and merger) which in
the opinion of any of them may be necessary or desirable to
achieve the purposes of or effect the transactions
contemplated by the preceding resolution, the taking of any
such action or the execution and delivery of any such
agreements, instruments or documents to be conclusive
evidence of the authority to take, execute or deliver the
same.
FOURTH: That the foregoing resolutions of the
Corporation's Board of Directors have not been rescinded by the
Board of Directors or the Executive Committee thereof.
This Certificate of Ownership and Merger shall be
effective as of 11:59 p.m. E.S.T. on December 15, 1995.
IN WITNESS WHEREOF, the Corporation has caused its
corporate seal to be affixed and this Certificate to be executed
and attested by its officers thereunto duly authorized this 11th
day of December, 1995.
REYNOLDS METALS COMPANY
By D. Michael Jones
______________________________
Vice President, General
Counsel and Secretary
[SEAL]
ATTEST:
Brenda A. Hart
By: -----------------------------
Assistant Secretary
State of Delaware PAGE 1
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF OWNERSHIP, WHICH MERGES:
"RMC ACCEPTANCE, INC.", A DELAWARE CORPORATION,
WITH AND INTO "REYNOLDS METALS COMPANY" UNDER THE NAME OF
"REYNOLDS METALS COMPANY", A CORPORATION ORGANIZED AND EXISTING
UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED
IN THIS OFFICE THE TWENTY-THIRD DAY OF DECEMBER, A.D. 1996, AT 9
O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
Edward J. Freel
-----------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION:
DATE: 12-24-96
024011100 8100
96036137
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
RMC ACCEPTANCE, INC.
INTO
REYNOLDS METALS COMPANY
_____________________________________________
Pursuant to Section 253 of the
General Corporation Law of Delaware
_____________________________________________
REYNOLDS METALS COMPANY, a Delaware corporation (the
"Corporation"), does hereby certify:
FIRST: That the Corporation is incorporated pursuant
to the General Corporation Law of the State of Delaware.
SECOND: That the Corporation owns all of the
outstanding shares of each class of the capital stock of RMC
ACCEPTANCE, INC., a Delaware corporation.
THIRD: That the Corporation, by the following
resolutions of the Executive Committee of its Board of Directors,
duly adopted by unanimous written consent as of the 20th day of
December, 1996, determined to merge into itself RMC ACCEPTANCE,
INC. on the conditions set forth in such resolutions:
RESOLVED, that the corporation, as owner of all of
the outstanding shares of each class of the capital
stock of RMC ACCEPTANCE, INC., merge into itself RMC
ACCEPTANCE, INC. and assume all of its liabilities and
obligations effective as of 12:01 a.m. E.S.T. on
January 2, 1997; and
FURTHER RESOLVED, that the Chief Executive
Officer, any Vice Chairman and Executive Officer, the
Chief Financial Officer, any Senior Vice President, any
Vice President, the Secretary and any Assistant
Secretary are each authorized on behalf of the
corporation to take all such action, including, without
limitation, incurrence and payment of all fees,
expenses and other charges, and to execute and deliver
all such agreements, instruments and documents
(including, without limitation, a certificate of
ownership and merger) which in the opinion of any of
them may be necessary or desirable to achieve the
purposes of or effect the transactions contemplated by
the preceding resolution, the taking of any such action
or the execution and delivery of any such agreements,
instruments or documents to be conclusive evidence of
the authority to take, execute or deliver the same.
This Certificate of Ownership and Merger shall be
effective as of 12:01 a.m. E.S.T. on January 2, 1997.
IN WITNESS WHEREOF, the Corporation has caused its
corporate seal to be affixed and this Certificate to be executed
and attested by its officers thereunto duly authorized this 20th
day of December, 1996.
REYNOLDS METALS COMPANY
By D. Michael Jones
Senior Vice President and
General Counsel
[SEAL]
ATTEST:
By: Donna C. Dabney
Secretary
State of Delaware PAGE 1
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF DESIGNATION OF "REYNOLDS METALS
COMPANY", FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY OF
JANUARY, A.D. 1997, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO
THE NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
Edward J. Freel
-----------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8294419
DATE: 01-22-97
0240111 8100
971020822
CERTIFICATE OF ELIMINATION OF
7% PRIDES, Convertible Preferred Stock
of
REYNOLDS METALS COMPANY
________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
________________________
REYNOLDS METALS COMPANY, a corporation organized and
existing under the laws of the State of Delaware (the
"Corporation"), hereby certifies that:
1. The Corporation has heretofore authorized and issued
11,000,000 shares of 7% PRIDES, Convertible Preferred Stock,
Stated Value $47.25 Per Share (the "PRIDES"), pursuant to
its Certificate of Designations, Preferences, Rights and
Limitations under Section 151 of the General Corporation Law
of the State of Delaware (the "PRIDES Certificate of
Designations") filed in the Office of Secretary of State of
the State of Delaware on January 20, 1994.
2. Pursuant to Section 3 of the PRIDES Certificate of
Designations, on December 2, 1996 the Corporation called all
of the outstanding shares of PRIDES for redemption on
December 31, 1996.
3. The Board of Directors of the Corporation duly adopted the
following resolutions at a meeting held on January 17, 1997,
acknowledging that as a result of the redemption of all of
the outstanding shares of the PRIDES on December 31, 1996,
none of the authorized shares of the PRIDES are outstanding,
and none will be issued subject to the PRIDES Certificate of
Designations:
RESOLVED, that as a result of the
redemption on December 31, 1996 of all of the
outstanding shares of 7% PRIDES(SM), Convertible
Preferred Stock, Stated Value $47.25 Per Share
(the "PRIDES"), of the corporation, none of the
authorized shares of the PRIDES are outstanding
and none will be issued subject to the Certificate
of Designations, Preferences, Rights and
Limitations relating to the PRIDES (the "PRIDES
Certificate of Designations") previously filed in
the Office of Secretary of State of the State of
Delaware; and
FURTHER RESOLVED, that the Restated
Certificate of Incorporation of the corporation be
amended to eliminate all matters set forth in the
PRIDES Certificate of Designations; and
FURTHER RESOLVED, that the Chief Executive
Officer, any Vice Chairman and Executive Officer,
the Chief Financial Officer, the Senior Vice
President and General Counsel and the Secretary of
the corporation are each hereby authorized on
behalf of the corporation to take any and all such
action, including, without limitation, the filing
and recording of one or more certificates in the
appropriate offices in the State of Delaware, and
the incurrence and payment of all fees, expenses
and other charges, and to execute and deliver all
such agreements, instruments and documents which
in the opinion of any of them may be necessary or
desirable to achieve the purposes of, or to effect
the transactions contemplated by, the preceding
resolutions, the taking of any such action or the
execution and delivery of any such agreements,
instruments or documents to be conclusive evidence
of the authority to take, execute or deliver the
same.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be affixed and this Certificate to be executed and
attested by its officers thereunto duly authorized this 17th day
of January, 1997.
REYNOLDS METALS COMPANY
By D. Michael Jones
--------------------------
D. Michael Jones
Senior Vice President
and General Counsel
[SEAL]
ATTEST:
By Donna C. Dabney
------------------
Donna C. Dabney
Secretary
F:\BAH\PRIDES\ELIMIN.CER
EXHIBIT 3.2
By-Laws
of
REYNOLDS METALS COMPANY
(Incorporated under the Laws of Delaware)
By-Laws
of
REYNOLDS METALS COMPANY
Table of Contents
Page
ARTICLE I - Stock
Section 1. Certificates for Stock . . . . . . . . . 1
Section 2. Transfers of Stock . . . . . . . . . . . 1
Section 3. Holders of Record . . . . . . . . . . . 1
Section 4. Lost or Destroyed Certificates . . . . . 2
ARTICLE II - Stockholders' Meetings
Section 1. Place of Meetings . . . . . . . . . . . 2
Section 2. Annual Meetings . . . . . . . . . . . . 2
Section 3. Special Meetings . . . . . . . . . . . . 2
Section 4. Matters to be Brought Before
Stockholders Meetings . . . . . . . . . 2
Section 5. Notice of Meetings . . . . . . . . . . . 4
Section 6. Quorum . . . . . . . . . . . . . . . . . 4
Section 7. Adjourned Meetings . . . . . . . . . . . 4
Section 8. Inspectors of Election . . . . . . . . . 4
Section 9. List of Stockholders . . . . . . . . . . 5
Section 10. Voting . . . . . . . . . . . . . . . . . 5
Section 11. Consents in Writing . . . . . . . . . . 6
ARTICLE III - Board of Directors
Section 1. Number; Term of Office; Powers . . . . . 6
Section 2. Resignations . . . . . . . . . . . . . . 6
Section 3. Vacancies . . . . . . . . . . . . . . . 7
Section 4. Annual Meeting . . . . . . . . . . . . . 7
Section 5. Regular Meetings . . . . . . . . . . . . 7
Section 6. Special Meetings . . . . . . . . . . . . 7
Section 7. Notice of Meetings . . . . . . . . . . . 7
Section 8. Quorum; Adjourned Meetings;
Required Vote . . . . . . . . . . . . . 8
Section 9. Committees . . . . . . . . . . . . . . . 8
Section 10. Compensation . . . . . . . . . . . . . . 8
Section 11. Consents in Writing . . . . . . . . . . 9
Section 12. Participation by Conference Telephone . 9
Table of Contents, Continued
ARTICLE IV - Officers
Section 1. Officers . . . . . . . . . . . . . . . . 9
Section 2. Chairman of the Board . . . . . . . . . 10
Section 3. Vice Chairmen of the Board . . . . . . . 10
Section 4. President . . . . . . . . . . . . . . . 10
Section 5. Vice Presidents . . . . . . . . . . . . 10
Section 6. General Counsel . . . . . . . . . . . . 10
Section 7. Secretary . . . . . . . . . . . . . . . 10
Section 8. Treasurer . . . . . . . . . . . . . . . 10
Section 9. Controller . . . . . . . . . . . . . . . 11
Section 10. Other Officers and Assistant Officers . 11
Section 11. Term of Office; Vacancies . . . . . . . 11
Section 12. Removal . . . . . . . . . . . . . . . . 11
ARTICLE V - Dividends and Finance
Section 1. Dividends . . . . . . . . . . . . . . . 11
Section 2. Deposits; Withdrawals; Notes and Other
Instruments . . . . . . . . . . . . . . 11
Section 3. Fiscal Year . . . . . . . . . . . . . . 11
ARTICLE VI - Books and Records; Record Date
Section 1. Books and Records . . . . . . . . . . . 12
Section 2. Record Date . . . . . . . . . . . . . . 12
ARTICLE VII - Notices
Section 1. Notices . . . . . . . . . . . . . . . . 13
Section 2. Waivers of Notice . . . . . . . . . . . 13
ARTICLE VIII - Contracts
Section 1. Interested Directors or Officers . . . . 13
ARTICLE IX - Seal
Section 1. Seal . . . . . . . . . . . . . . . . . . 14
ARTICLE X - Indemnification
Section 1. Indemnification in Third Party
Actions . . . . . . . . . . . . . . . . 14
Section 2. Indemnification in an Action by or in
the Right of the Corporation . . . . . . 15
Section 3. Indemnification as of Right . . . . . . 16
Section 4. Determination of Indemnification . . . . 16
Section 5. Advance for Expenses . . . . . . . . . . 16
Section 6. General Provisions . . . . . . . . . . . 16
ARTICLE XI - Amendments
Section 1. Amendments . . . . . . . . . . . . . . . 18
By-Laws
of
REYNOLDS METALS COMPANY
(Incorporated under the Laws of Delaware)
ARTICLE I - Stock
1. Certificates for Stock. Certificates of Stock shall be
issued in numerical order, be signed by the Chairman of the Board
of Directors, a Vice Chairman of the Board of Directors, the
President or a Vice President, and by the Secretary or an Assis
tant Secretary, or the Treasurer or an Assistant Treasurer, and
sealed with the corporate seal; provided, that where any Certifi
cate of Stock is signed by a duly appointed and authorized
Transfer Agent or Registrar the signatures of the Chairman of the
Board of Directors, Vice Chairman of the Board of Directors, the
President, Vice President, Secretary, Assistant Secretary,
Treasurer or Assistant Treasurer may be facsimile, engraved or
printed, and the seal of the corporation on any such Certificate
of Stock may be facsimile, engraved or printed. In case any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation
with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
2. Transfers of Stock. Transfers of stock shall be made
only upon the books of the corporation, and only by the person
named in the certificate or by attorney, lawfully constituted in
writing, and only upon surrender of the certificate therefor.
The directors may by resolution make reasonable regulations for
the transfers of stock.
3. Holders of Record. Registered stockholders only shall
be entitled to be treated by the corporation as the holders in
fact of the stock standing in their respective names and the
corporation shall not be bound to recognize any equitable or
other claim to or interest in any share on the part of any other
person, whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of Delaware.
4. Lost or Destroyed Certificates. In case of loss or
destruction of any certificate of stock another may be issued in
its place upon satisfactory proof of such loss or destruction and
upon the giving of a satisfactory bond of indemnity to the
corporation, all as determined either expressly by the directors
or pursuant to general authority granted by them.
ARTICLE II - Stockholders' Meetings
1. Place of Meetings. Meetings of the stockholders shall
be held at such place, within or outside the State of Delaware,
as the Board of Directors may determine.
2. Annual Meeting. The annual meeting of the stockholders
of the corporation, for the election of directors to succeed
those whose terms expire, and for the transaction of such other
business as may come before the meeting, shall be held on the
first Wednesday after April 15th of each year, if not a legal
holiday, and if a legal holiday, then on the first business day
following, at 10:00 a.m., or on such other date and at such other
time as may be fixed by the Board of Directors. The annual
meeting of the stockholders may be postponed by the Board of
Directors upon public notice given before the date previously
scheduled for such meeting. If the annual meeting of the
stockholders be not held as herein prescribed, the election of
directors may be held at any meeting thereafter called pursuant
to these By-Laws.
3. Special Meetings. Special meetings of the stockholders
may be called by the Chairman of the Board of Directors, or a
Vice Chairman of the Board of Directors, or the President or by
the Board of Directors, and shall be called at any time by the
Board of Directors upon the request in writing of stockholders
entitled to cast a majority of the votes which all stockholders
are entitled to cast. Such request must state the purpose of the
meeting.
4. Matters to be Brought Before Stockholders Meetings.
Except as otherwise provided by law, at any annual or special
meeting of stockholders only such business shall be conducted as
shall have been properly brought before the meeting in accordance
with this Section.
In order to be properly brought before the meeting,
such business must have either been (i) specified in the written
notice of the meeting (or any supplement thereto) given to
stockholders of record on the record date for such meeting by or
at the direction of the Board of Directors, (ii) brought before
the meeting at the direction of the Board of Directors or the
officer presiding over the meeting, or (iii) specified in a
written notice given by or on behalf of a stockholder of record
on the record date for such meeting entitled to vote thereat or a
duly authorized proxy for such stockholder, in accordance with
all of the following requirements.
A notice referred to in clause (iii) hereof must be
delivered personally to, or mailed to and received at, the
principal executive office of the corporation, addressed to the
attention of the Secretary, not more than ten (10) days after the
date of the initial notice referred to in clause (i) hereof, in
the case of business to be brought before a special meeting of
stockholders, and not less than thirty (30) days prior to the
first anniversary date of the initial notice referred to in
clause (i) hereof of the previous year's annual meeting, in the
case of business to be brought before an annual meeting of
stockholders, provided, however, that such notice shall not be
required to be given more than ninety (90) days prior to an
annual meeting of stockholders. Such notice referred to in
clause (iii) hereof shall set forth:
(a) a full description of each such item of business
proposed to be brought before the meeting;
(b) the name and address of the person proposing to bring
such business before the meeting;
(c) 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 such date has then been made
publicly available) and as of the date of such notice;
(d) 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 Securities and Exchange Commission pursuant to Section
14 of the Securities Exchange Act of 1934, as amended, or any
successor thereto and the written consent of each such nominee to
serve if elected; and
(e) all other information that would be required to be
filed with the Securities and Exchange Commission if, with
respect to the business proposed to be brought before the meet
ing, the person proposing such business was a participant in a
solicitation subject to Section 14 of the Securities Exchange Act
of 1934, as amended, or any successor thereto.
No business shall be brought before any meeting of
stockholders of the corporation otherwise than as provided in
this Section.
5. Notice of Meetings. Written notice of the place, date
and hour of the annual and of all special meetings of the stock
holders and, in the case of special meetings, of the purpose or
purposes for which such special meeting is called, shall be given
in the manner specified in Section l of Article VII of these By-
Laws not less than ten (10) nor more than sixty (60) days prior
to the meeting, to each stockholder of record of the corporation
entitled to vote thereat. Business transacted at all special
meetings shall be confined to the purposes stated in the notice.
6. Quorum. A quorum at any annual or special meeting of
the stockholders shall consist of the presence, in person or by
proxy, of stockholders entitled to cast a majority of the votes
which all stockholders are entitled to cast, except as otherwise
specifically provided by law or in the Certificate of Incorpora
tion.
7. Adjourned Meetings. Whether or not a quorum is present
at a properly called stockholders' meeting, the meeting may be
adjourned from time to time by the Chairman of the meeting or by
a majority in interest of those present in person or by proxy and
entitled to vote thereat. At any such adjourned meeting at which
a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified.
If the adjournment is for more than thirty (30) days, or if after
the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting; otherwise,
no notice of such adjourned meeting need be given if the time and
place thereof are announced at the meeting at which the
adjournment is taken. The absence from any meeting of
stockholders holding the number of shares of stock of the corpora
tion required by law, the Certificate of Incorporation or these
By-Laws for action upon any given matter shall not prevent action
at such meeting upon any other matter or matters which may
properly come before the meeting, if there shall be present
thereat in person or by proxy stockholders holding the number of
shares of stock of the corporation required in respect of such
other matter or matters.
8. Inspectors of Election. In advance of any meeting of
stockholders or any corporate action to be taken by the stock
holders in writing without a meeting, the Chief Executive Offi
cer, Chief Operating Officer, Chief Financial Officer or Secre
tary of the corporation shall appoint one or more inspectors of
election to serve at such meeting or to examine such written
consents and to make a written report with respect thereto. In
addition, any such officer may, but shall not be required to,
designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is
able to act at a meeting of stockholders, the presiding officer
at such meeting shall appoint one or more inspectors to act at
the meeting. Each inspector shall discharge his or her duties in
accordance with applicable law and shall, before entering upon
the discharge of his or her duties, take and sign an oath faith
fully to execute the duties of inspector with strict impartiality
and according to the best of his or her ability.
9. List of Stockholders. A complete list of the stock
holders entitled to vote at each annual or special meeting of the
stockholders of the corporation, arranged in alphabetical order,
showing the address of record of each and the number of voting
shares held by each, shall be prepared by the Secretary, who
shall have charge of the stock ledger, and filed in the City (or,
if such meeting is to be held at a place not within any city,
then in the county) where the meeting is to be held, at a loca
tion specified in the Notice of Meeting, or if no such location
is specified in such notice, at the place where the meeting is to
be held, at least ten (10) days before every such meeting, and
shall, during the usual hours for business, be open to the
examination of any stockholder for any purpose germane to the
meeting, and during the whole time of said meeting be open to the
examination of any stockholder.
10. Voting. Subject to the provisions of Article VI,
Section 2 of these By-Laws, and except where a different vote per
share is prescribed by the Certificate of Incorporation for a
class of stock, each holder of stock of a class which is entitled
to vote in any election or on any other questions at any annual
or special meeting of the stockholders shall be entitled to one
vote, in person or by written proxy, for each share of such class
held of record. Except where, and to the extent that, a differ
ent percentage of votes and/or a different exercise of voting
power is prescribed by law, the Certificate of Incorporation or
these By-Laws, all elections and other questions shall be decided
by the vote of stockholders, present in person or by proxy and
entitled to vote, representing a majority of the votes cast.
Abstentions shall be counted in the tabulation of the votes cast.
The votes for directors, and, upon demand of any stockholder, or
where required by law, the votes upon any question before the
meeting, shall be by ballot; otherwise, the election shall be
held as the presiding officer prescribes.
11. Consents in Writing. Any action which might have been
taken under these By-Laws by a vote of the stockholders at a
meeting thereof may be taken by them without a meeting, without
prior notice and without a vote, if a consent in writing setting
forth the action so taken shall be signed by the holders of
outstanding shares of stock of the corporation having not less
than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be
delivered to the corporation by delivery to its registered office
in the State of Delaware, its principal place of business, or the
Secretary. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return
receipt requested. Prompt notice of the taking of such corporate
action shall be given to those stockholders who have not
consented thereto if less than unanimous written consent is
obtained. Every written consent shall bear the date of signature
of each stockholder who signs the consent. No written consent
shall be effective to take the corporate action referred to
therein unless, within sixty (60) days of the date the earliest
dated written consent (executed and delivered in accordance with
this Section) was received by the corporation, written consents
signed by a sufficient number of holders (determined in
accordance with this Section) to take such action are delivered
to the corporation in the manner specified in this Section.
ARTICLE III - Board of Directors
1. Number; Term of Office; Powers. The business and
affairs of the corporation shall be under the direction of a
Board of Directors, consisting of fourteen (14) persons. Direc
tors shall be elected for one year, and shall hold office until
their successors are elected and qualified. Directors need not
be stockholders. In addition to the power and authority express
ly conferred upon them by the By-Laws and the Certificate of
Incorporation, the Board of Directors may exercise all such
powers of the corporation and do all such lawful acts and things
as are not by law or by the Certificate of Incorporation or by
these By-Laws directed or required to be exercised or done by the
stockholders.
2. Resignations. Any director may resign at any time by
giving written notice of resignation to the Board of Directors,
to the Chief Executive Officer or to the Secretary of the corpo
ration. Any such resignation shall take effect at the time
specified therein, or if the time be not specified therein, then
upon receipt thereof. The acceptance of such resignation shall
not be necessary to make it effective.
3. Vacancies. Except as otherwise specifically provided
by law, the Certificate of Incorporation or these By-Laws, all
vacancies in the Board of Directors, whether caused by resigna
tion, death, increase in the number of authorized directors or
otherwise, may be filled by a majority of the Board of Directors
then in office, even though less than a quorum, or by the stock
holders at a special meeting. A director thus elected to fill
any vacancy shall hold office until the next annual meeting of
stockholders and until a successor is elected and qualified.
4. Annual Meeting. The annual meeting of the Board of
Directors, for the election of officers and the transaction of
other business, shall be held on the same day and at the same
place as, and as soon as practicable following, the annual
meeting of stockholders, or at such other date, time or place as
the directors may by resolution designate.
5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times, and at such place within
or outside the State of Delaware, as the Board of Directors may
from time to time by resolution designate.
6. Special Meetings. Special meetings of the directors
may be called at any time by the Chairman of the Board of Direc
tors, a Vice Chairman of the Board of Directors, the President or
an Executive Vice President, or by the Secretary upon written
request of one-third of the directors, such request stating the
purpose for which the meeting is to be called. Special meetings
shall be held at the principal office of the corporation or at
such office within or outside the State of Delaware as the
directors may from time to time designate.
7. Notice of Meetings. Except as otherwise required by
law, notice of special meetings of the Board of Directors or of
any committee of the Board of Directors shall be given to each
director or to each committee member, as the case may be, by mail
at least two days before the day on which the meeting is to be
held or by personal delivery, word-of-mouth, telephone, tele
graph, radio, cable or other comparable means at least six hours
before the time at which the meeting is to be held. Such notice
shall state the time and place of such meeting, but need not
state the purposes thereof unless otherwise required by law. No
notice need be given of the annual meeting of directors or of
regular meetings of directors or of committees of the Board of
Directors, provided that, whenever the time or place of such
meetings shall be fixed or changed, notice of such action shall
be given promptly to each director or to each committee member,
as the case may be, who shall not have been present at the
meeting at which such action was taken.
8. Quorum; Adjourned Meetings; Required Vote. A majority
of the Board of Directors as constituted from time to time shall
be necessary and sufficient at all meetings to constitute a
quorum for the transaction of business. In the absence of a
quorum, a majority of those present may adjourn the meeting from
time to time and the meeting may be held as adjourned without
further notice provided a quorum be present at such adjourned
meeting. Unless otherwise specifically provided by the Certifi
cate of Incorporation or statute, the act of a majority of the
directors present at any properly convened meeting at which there
is a quorum, but in no case less than one-third of all of the
directors then in office, shall be the act of the Board of
Directors.
9. Committees. Standing or Temporary Committees may be
appointed from their own number by the Board of Directors from
time to time, and the directors may from time to time vest such
committees with such powers as the directors may see fit, subject
to such conditions as the directors may prescribe or as may be
prescribed by law. All committees shall consist of two or more
directors. The term of office of the members of each committee
shall be as fixed from time to time by the Board of Directors;
provided, however, that any committee member who ceases to be a
director shall ipso facto cease to be a committee member. Any
member of any committee may be removed at any time with or
without cause by the Board of Directors, and any vacancy in any
committee may be filled by the Board of Directors. All commit
tees shall keep regular minutes of their transactions and shall
cause them to be recorded in books kept for that purpose in the
office of the corporation, and shall report the same to the Board
of Directors at their regular meetings. Subject to this Section
9 and except as otherwise determined by the Board of Directors,
each committee may make rules for the conduct of its business.
10. Compensation. Directors, as such, may receive, pursu
ant to resolution of the Board of Directors, fixed fees, other
compensation and expenses for their services as directors,
including, without limitation, services as chairmen or as members
of committees of the directors; provided, however, that nothing
herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving
compensation therefor.
11. Consents in Writing. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members
of the Board of Directors or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board of Directors or
committee.
12. Participation by Conference Telephone. Members of the
Board of Directors or of any committee may participate in a
meeting of such Board of Directors or committee, as the case may
be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by
such means shall constitute presence in person at the meeting.
ARTICLE IV - Officers
1. Officers. The corporation may have a Chairman of the
Board of Directors, one or more Vice Chairmen of the Board of
Directors, a President, one or more Vice Presidents, which may
include Executive and Senior Vice Presidents, a General Counsel,
a Secretary, a Treasurer, a Controller and such other officers
and assistant officers as the Board of Directors shall deem
appropriate; provided, that the corporation shall have such
officers as are required by applicable law. Officers shall be
elected annually by the Board of Directors. One person may hold
more than one office.
The Board of Directors shall designate a Chief Execu
tive Officer, and may designate a Chief Operating Officer and a
Chief Financial Officer from among the officers of the corpora
tion.
The Chief Executive Officer shall have general supervi
sion and management of the business and affairs of the corpora
tion, subject to the control of the Board of Directors, and may
prescribe the duties to be performed by the officers of the
corporation in addition to the duties prescribed by these By-Laws
or by the Board of Directors. In the absence or disability of
the Chairman of the Board of Directors, the Chief Executive
Officer shall preside at all meetings of stockholders and direc
tors. In the absence or disability of the Chief Executive
Officer, such officer of the corporation as the Chief Executive
Officer shall have designated in writing to the Board of Direc-
tors or to the Secretary of the corporation shall, subject to
further action by the Board of Directors, have the powers and
perform the duties of the Chief Executive Officer.
2. Chairman of the Board. The Chairman of the Board of
Directors shall preside at all meetings of stockholders and
directors.
3. Vice Chairmen of the Board. A Vice Chairman shall
perform such duties as are properly required by the Board of
Directors or the Chief Executive Officer.
4. President. The President shall perform such duties as
are properly required by the Board of Directors or the Chief
Executive Officer.
5. Vice Presidents. Each of the Executive Vice presi
dents, Senior Vice Presidents and other Vice Presidents shall
perform such duties as are properly required by the Board of
Directors or the Chief Executive Officer.
6. General Counsel. The General Counsel shall advise the
corporation on legal matters affecting the corporation and its
activities, shall supervise and direct the handling of all such
legal matters and shall perform all such other duties as are
incident to the office of General Counsel.
7. Secretary. The Secretary shall keep the minutes of the
meetings of the stockholders and of the Board of Directors, and,
when required, the minutes of the meetings of the committees, and
shall be responsible for the custody of all such minutes. The
Secretary shall be responsible for the custody of the stock
ledger and documents of the corporation. The Secretary shall
have custody of the corporate seal and may affix and attest such
seal to any instrument whose execution shall have been duly
authorized and shall perform all other duties incident to the
office of Secretary.
8. Treasurer. The Treasurer shall have the custody of all
moneys and securities of the corporation and shall keep or cause
to be kept accurate accounts of all money received or payments
made in books kept for that purpose. The Treasurer shall deposit
or cause to be deposited funds of the corporation in accordance
with Article V, Section 2 of these By-Laws and shall disburse the
funds of the corporation by checks or vouchers as authorized by
the Board of Directors. The Treasurer shall also perform all
other duties incident to the office of Treasurer.
9. Controller. The Controller shall be the chief account
ing officer of the corporation. The Controller shall keep or
cause to be kept all books of accounts and accounting records of
the corporation and shall keep and maintain, or cause to be kept
and maintained, adequate and correct accounts of the properties
and business transactions of the corporation. The Controller
shall prepare or cause to be prepared appropriate financial
statements for the corporation and shall perform such other
duties as may be incident to the office of Controller.
10. Other Officers and Assistant Officers. All other
officers and assistant officers shall exercise such powers and
perform such duties as shall be determined from time to time by
the Board of Directors or the Chief Executive Officer.
11. Term of Office; Vacancies. Each officer shall hold
office until the annual meeting of the Board of Directors follow
ing the end of the term of the Board by which such officer is
elected, except in the case of earlier death, resignation or
removal. Vacancies in any office arising from any cause may be
filled by the directors at any regular or special meeting.
12. Removal. Any officer elected or appointed by the Board
of Directors may be removed at any time, with or without cause,
by the Board of Directors.
ARTICLE V - Dividends and Finance
1. Dividends. Dividends may be declared to the full
extent permitted by law at such times as the Board of Directors
shall direct.
2. Deposits; Withdrawals; Notes and Other Instruments.
The moneys of the corporation shall be deposited in the name of
the corporation in such banks or trust companies as shall be
designated by the Board of Directors, and shall be drawn out only
by persons designated from time to time by the Board of Directors
or by an officer of this corporation to whom the Board of
Directors has delegated such authority. All notes and other
instruments for the payment of money shall be signed or endorsed
by officers or other persons authorized from time to time by the
Board of Directors or by an officer of this corporation to whom
the Board of Directors has delegated such authority.
3. Fiscal Year. The fiscal year of the corporation shall
date from the first day of January in each year.
ARTICLE VI - Books and Records; Record Date
1. Books and Records. The books, accounts and records of
the corporation, except as may be otherwise required by the laws
of the State of Delaware, may be kept within or outside of the
said State at such places as the Board of Directors may from time
to time appoint.
2. Record Date.
(a) The Board of Directors is authorized to fix in advance
a date, not exceeding sixty (60) days preceding the date of any
meeting of stockholders, or the date for the payment of any
dividend, or other distribution or allotment of any rights, or
the date when any change, conversion or exchange of capital stock
shall go into effect, as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such
meeting and any adjournment thereof, or entitled to receive
payment of any such dividend or other distribution or allotment
of rights, or to exercise any rights in respect of any such
change, conversion or exchange of capital stock. Such stockhold
ers and only such stockholders as shall be stockholders of record
on the record date so fixed shall be entitled to such notice of,
and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend or other distribution or allot
ment of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid. Any
such record date fixed in connection with a meeting of stockhold
ers shall not be less than ten (10) days before the date of such
meeting.
(b) In order that the corporation may determine the stock
holders entitled to consent to corporate action in writing
without a meeting, the Board of Directors is authorized to fix in
advance a record date, which record date shall not be more than
ten (10) days after the date upon which the resolution fixing the
record date is adopted by the Board of Directors. Any stockhold
er of record seeking to have the stockholders authorize or take
corporate action by written consent shall, by written notice to
the Secretary, request the Board of Directors to fix a record
date. If no record date has been fixed by the Board of Directors
within ten (10) days of the date on which such a request is
received, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting, when
no prior action by the Board of Directors is required by applica
ble law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is
delivered to the corporation by delivery to its registered office
in the State of Delaware, its principal place of business, or the
Secretary. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required
by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which
the Board of Directors adopts the resolution taking such prior
action. Such stockholders and only such stockholders as shall be
stockholders of record on the record date so fixed shall be
entitled to give such consent, notwithstanding any transfer of
any stock on the books of the corporation after any such record
date fixed as aforesaid.
ARTICLE VII - Notices
1. Notices. Whenever any provision of law or these By-
Laws requires notice to be given to any director, officer or
stockholder, such notice may be given in writing by mailing the
same to such director, officer or stockholder at his or her
address as the same appears in the books of the corporation,
unless such stockholder shall have filed with the Secretary a
written request that notices intended for him or her be mailed to
some other address, in which case it shall be mailed to the
address designated in such request. The time when the same shall
be mailed shall be deemed to be the time of the giving of such
notice. This section shall not be deemed to preclude the giving
of notice by other means if permitted by the applicable provision
of law or these By-Laws.
2. Waivers of Notice. A waiver of any notice in writing,
signed by a stockholder, director or officer, whether before or
after the time stated in said waiver for holding a meeting, shall
be deemed equivalent to a notice required to be given to any
stockholder, director or officer.
ARTICLE VIII - Contracts
1. Interested Directors or Officers. No contract or
transaction between the corporation and one or more of its
directors or officers, or between the corporation and any other
corporation, partnership, association or other organization in
which one or more of the directors or officers of the corporation
are directors or officers, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the
director or officer of the corporation is present at or partici
pates in the meeting of the Board of Directors or committee
thereof which authorizes the contract or transaction, or solely
because his, her or their votes are counted for such purpose, if:
(i) The material facts as to the relationship or
interest of such person and as to the contract or transac
tion are disclosed or are known to the Board of Directors or
the committee thereof, and the Board of Directors or commit
tee in good faith authorizes the contract or transaction by
a vote sufficient for such purpose without counting the vote
of the interested director or directors of the corporation;
provided, however, that common or interested directors may
be counted in determining the presence of a quorum at a
meeting of the Board of Directors or committee; or
(ii) The material facts as to the relationship or
interest of such person and as to the contract or transac
tion are disclosed or are known to the stockholders of the
corporation entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote
of the stockholders of the corporation; or
(iii) The contract or transaction is fair as to the
corporation as of the time it is authorized, approved or
ratified by the Board of Directors, a committee thereof or
the stockholders of the corporation.
ARTICLE IX - Seal
1. Seal. The corporate seal of the corporation shall
consist of two concentric circles, between which is the name of
the corporation, and in the center shall be inscribed the year of
its incorporation and the words, "Corporate Seal, Delaware."
ARTICLE X - Indemnification
1. Indemnification in Third Party Actions. The corpora
tion shall indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corpora
tion as a director, officer, employee or agent of another corpo
ration, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against
all expense, liability and loss (including attorneys fees,
judgments, fines, ERISA excise taxes or penalties, and amounts
paid or to be paid in settlement) actually and reasonably in
curred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful, except that no indemnification shall be
made in respect of any proceeding (or part thereof) initiated by
such person unless such proceeding (or part thereof) was autho
rized by the Board of Directors of the corporation. The termina
tion of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests
of the corporation, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
2. Indemnification in an Action by or in the Right of the
Corporation. The corporation shall indemnify each person who was
or is a party or is threatened to be made a party to any threat
ened, pending or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of
the fact that such person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense
or settlement of such action or suit if the person acted in good
faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation and except
that no indemnification shall be made in respect of (a) any
claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem
proper, or (b) any proceeding (or part thereof) initiated by such
person unless such proceeding (or part thereof) was authorized by
the Board of Directors of the corporation.
3. Indemnification as of Right. To the extent that a
director, officer, employee or agent of the corporation has been
successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in Sections l and 2 of this
Article X, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including
attorneys fees) actually and reasonably incurred by such person
in connection therewith.
4. Determination of Indemnification. Any indemnification
under Sections 1 and 2 of this Article X (unless ordered by a
court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circum
stances because the person has met the applicable standard of
conduct set forth in such Sections l and 2. Such determination
shall be made (a) by the Board of Directors (the Board) by a
majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a
quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel
in a written opinion or (c) by the stockholders.
5. Advance for Expenses. Expenses (including attorneys'
fees) incurred in defending any civil, criminal, administrative
or investigative action, suit or proceeding shall be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount
if it shall ultimately be determined that he or she is not
entitled to be indemnified by the corporation as authorized in
this Article X.
6. General Provisions.
(a) All expenses (including attorneys' fees) incurred in
defending any civil, criminal, administrative or investigative
action, suit or proceeding which are advanced by the corporation
under Section 5 of this Article X shall be repaid (i) in case the
person receiving such advance is ultimately found, under the
procedure set forth in this Article X, not to be entitled to
indemnification, or (ii) where indemnification is granted, to the
extent that the expenses so advanced by the corporation exceed
the indemnification to which such person is entitled.
(b) The corporation may indemnify each person, though he or
she is not or was not a director, officer, employee or agent of
the corporation, who served at the request of the corporation on
a committee created by the Board to consider and report to it in
respect of any matter. Any such indemnification may be made
under the preceding provisions of this Article X and shall be
subject to the limitations thereof except that (as indicated) any
such committee member need not be nor have been a director,
officer, employee or agent of the corporation.
(c) The provisions of this Article X shall be applicable to
appeals. References to "serving at the request of the corpora
tion" shall include without limitation any service as a director,
officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries. A person who acted in good faith
and in a manner he or she reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation."
(d) If any section, subsection, paragraph, sentence,
clause, phrase or word in this Article X shall be adjudicated
invalid or unenforceable, such adjudication shall not be deemed
to invalidate or otherwise affect any other section, subsection,
paragraph, sentence, clause, phrase or word of this Article.
(e) The indemnification and advancement of expenses provid
ed by, or granted pursuant to, this Article X shall not be deemed
exclusive of any other rights to which those seeking indemnifica
tion or advancement of expenses may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in their official capacities and as
to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
ARTICLE XI - Amendments
1. Amendments. Alterations or amendments of these By-Laws
may be made by the stockholders at any annual or special meeting
if the notice of such meeting contains a statement of the pro
posed alteration or amendment, or by the Board of Directors at
any annual, regular or special meeting, provided notice of such
alteration or amendment has been given to each director in
writing at least five (5) days prior to said meeting or has been
waived by all the directors.
010197
bylaws\rmet
EXHIBIT 10.38
REYNOLDS METALS COMPANY
NEW MANAGEMENT INCENTIVE DEFERRAL PLAN
Section 2.09 of the Reynolds Metals Company New
Management Incentive Deferral Plan is hereby amended effective
January 1, 1996, to read in its entirety as follows:
2.09 "Incentive Compensation" shall mean the cash
incentive payable to Eligible Employees under the Company's
Performance Incentive Plan and/or its Supplemental Incentive
Plan.
Executed and adopted as of January 1, 1996, pursuant to
action taken by the Board of Directors of Reynolds Metals Company
at its meeting on November 17, 1995.
REYNOLDS METALS COMPANY
By: F. Robert Newman
Vice President, Human Resources
F:\LJA\EXECCOMP\NEWMIDP\AM-01-01.996
EXHIBIT 10.39
REYNOLDS METALS COMPANY
PERFORMANCE INCENTIVE PLAN
The Reynolds Metals Company Performance Incentive Plan
is hereby amended effective January 1, 1996, by adding a new
Paragraph 11 to read as follows:
11. SPECIAL PROVISIONS FOR TOP EXECUTIVES
Anything herein to the contrary notwithstanding,
effective with the 1996 calendar year, the following
provisions shall apply each calendar year to awards to
participants who are designated by the Committee as "Top
Executives" for that calendar year. Top Executives shall be
eligible for awards only under this Paragraph 11.
(a) The provisions of this Paragraph 11,
including the designation of Top Executives each year,
shall be administered solely by those members of the
Committee (at least two) who are "outside directors"
for purposes of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). For the Top
Executives, the Plan shall be administered in a manner
consistent with the performance-based compensation
requirements of Section 162(m)(4) of the Code.
(b) No later than ninety days after the beginning
of each calendar year, the Committee shall establish in
writing (i) one or more Performance Goals (as defined
below) that must be reached in order for a Top
Executive to receive an award under the Plan for the
calendar year and (ii) the amount of the award to be
paid upon attainment of these goals. The Committee
shall have the discretion later to revise the amount to
be paid upon the attainment of these goals solely for
the purpose of reducing or eliminating the amount of
the award otherwise payable upon attainment of these
goals.
(c) In establishing Performance Goals, the
Committee shall establish both the minimum Performance
Goal(s) (the "Minimum Goals") that must be reached in
order for the Top Executive to receive any award for
the calendar year and the maximum Performance Goal(s)
(the "Maximum Goals") that must be reached in order for
the Top Executive to receive the maximum award for the
calendar year. Between the Minimum Goals and the
Maximum Goals, the Committee may establish a range of
intermediate Performance Goals with a corresponding
range of awards between the minimum and maximum award
opportunity. In no event may a Top Executive's maximum
award hereunder for any calendar year exceed
$2,500,000.
(d) A "Performance Goal" is an objective
performance goal established in writing by the
Committee; it may be based on net earnings, stock
price, profit before taxes, return on equity, return on
capital, return on assets, total return to
shareholders, earnings per share, or debt rating.
Performance Goals may be absolute in their terms or
measured against or in relationship to other companies
comparably or otherwise situated. Performance Goals
may be particular to a Top Executive or the division,
department, branch, line of business, subsidiary or
other unit in which the Top Executive works or with
respect to which the Top Executive has responsibility
and\or may be based on the performance of the Company
generally. Performance Goals may vary from Top
Executive to Top Executive and from calendar year to
calendar year.
(e) The amount payable to a Top Executive shall
be based upon the achievement of the Performance Goals,
as certified in writing by the Committee after the end
of each calendar year. If the Committee believes that
factors outside the Performance Goals should also be
taken into account in determining the amount of the
award, the Committee shall have the discretion to
reduce, but not increase, the amount payable to a Top
Executive based on these outside factors. No payment
shall be made unless the Minimum Goals are achieved.
(f) Awards under this Paragraph 11 shall be paid
out in accordance with the provisions of Paragraph 8.
Executed and adopted as of January 1, 1996, pursuant to
action taken by the Board of Directors of Reynolds Metals Company
and approved by the Stockholders of Reynolds Metals Company at
the 1996 Annual Meeting.
REYNOLDS METALS COMPANY
By: F. Robert Newman
Vice President, Human Resources
F:\LJA\EXECCOMP\PIP\162MAM11.996
EXHIBIT 10.40
REYNOLDS METALS COMPANY
SUPPLEMENTAL INCENTIVE PLAN
Effective January 1, 1996
<PAGE>
1. PURPOSE
The purpose of the Supplemental Incentive Plan (the "Plan")
is to promote the financial success of Reynolds Metals Company
(the "Company") by:
(a) providing compensation opportunities which are
competitive with those of other major companies;
(b) supporting the Company's goal-setting and
strategic planning process by permitting awards to be based
on other than completely objective criteria; and
(c) motivating designated key executives to achieve
important qualitative business goals by allowing them to
share in the risks and rewards of the business.
2. ADMINISTRATION
(a) The Plan shall be administered by the Compensation
Committee (the "Committee") of the Company's Board of Directors
(the "Board"). No member of the Committee shall be eligible to
participate in the Plan.
(b) The Committee shall have the power and authority to
adopt, amend and rescind any administrative guidelines, rules,
regulations, and procedures deemed appropriate to the
administration of the Plan, and to interpret and rule on any
questions relating to any provision of the Plan.
(c) The decisions of the Committee shall be final,
conclusive and binding on all parties, including the Company and
participating employees.
(d) The Board may from time to time amend, suspend or
terminate the Plan, in whole or in part.
3. PARTICIPATION
Each calendar year, the Committee shall designate employees
eligible to participate in this Plan during that calendar year.
4. MAXIMUM AWARD LEVELS
After consultation with management, the Committee shall
designate maximum award levels to be earned by participants for a
calendar year. Such maximum awards may vary by management level.
These maximum award levels shall be independent of any award
levels established under any other incentive plan of the Company.
The Committee shall also establish a performance threshold that
must be reached before any award can be paid hereunder for the
year. No award may be paid hereunder unless the Company achieves
adequate financial performance as established in the performance
threshold, such as achievement of the minimum goals established
under the Company's Performance Incentive Plan for the calendar
year.
5. PERFORMANCE GOALS
The Committee shall establish performance goals for
participants to help it determine awards for each calendar year.
Such goals shall be different from and independent of any goals
established under any other incentive plan of the Company and may
relate to corporate performance, divisional performance, and
individual performance as appropriate to the purpose of the Plan
and the positions and responsibilities of the participants.
6. DETERMINATION OF AWARDS
Subject to the limitations imposed by Paragraph 4, each
calendar year the Committee shall, after consultation with
management, determine the award earned by each participant under
this Plan for the calendar year based upon the achievement of the
performance goals established hereunder for the participant for
the calendar year.
7. COMMUNICATION
Participants shall be advised in writing of their
participation in the Plan and of the performance goals applicable
to their awards.
8. PAYMENT OF AWARDS
Awards shall be payable in cash as soon after the close of
the calendar year as feasible; provided, however, that payment of
part or all of any award may be deferred in accordance with the
terms of any incentive deferral plan maintained from time to time
by the Company.
9. EFFECTIVE DATE OF PLAN
The Plan shall be effective January 1, 1996, and shall
continue in effect, as amended from time to time, until it is
terminated by the Board.
Executed and adopted as of January 1, 1996, pursuant to
action taken by the Board of Directors of Reynolds Metals Company
at its meeting on November 17, 1995.
REYNOLDS METALS COMPANY
By: F. Robert Newman
Vice President, Human Resources
EXHIBIT 10.41
REYNOLDS METALS COMPANY
STOCK PLAN FOR OUTSIDE DIRECTORS
Effective January 1, 1997
<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 grants of Phantom Stock 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 any amounts
allocated to the Director that remain in the Plan upon the death
of the Director. 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.
2.05 "Director" shall mean a voting member of the
Board (a) who is not an employee of the Company or of one of its
subsidiaries and (b) who is not entitled, as a result of previous
employment by any of them, to receive any retirement benefits
from the Company or from any company that is or has been a
subsidiary.
2.06 "Effective Date" shall mean January 1, 1997.
2.07 "Phantom Stock" shall mean shares of Company
Stock credited to a Director in accordance with Article III.
2.08 "Plan" shall mean this Reynolds Metals Company
Stock Plan for Outside Directors, as amended from time to time.
ARTICLE III
GRANTS OF PHANTOM STOCK
3.01 Each Director shall be granted 225 shares of
Phantom Stock under the Plan each calendar year. Grants shall be
credited to Directors' accounts under the Plan in four equal
quarterly installments on the last day of each calendar quarter.
A Director who ceases to be a member of the Board during a
calendar quarter shall be credited on the last day of that
quarter with a proportionate share of the quarterly allocation
based on the Director's service during the quarter.
3.02 In addition to the Phantom Stock grants
described in Section 3.01 above, the account of each Director who
is serving as a Director on January 1, 1997, shall be credited as
of such date with an additional initial grant of Phantom Stock.
The number of shares of Phantom Stock in this initial grant shall
be determined in accordance with the action taken by the Board at
its meeting on November 15, 1996.
3.03 As of each date when cash dividends are paid on
Company Stock, each Director's account under the Plan shall also
be adjusted to reflect dividend equivalents computed in
accordance with this Section 3.03. The dollar amount of the
dividend equivalent for each Director shall equal the cash
dividends that would have been paid on the number of shares of
Phantom Stock credited to the Director's account as of the
dividend record date if that number of shares of Phantom Stock
had actually been issued and outstanding on the record date.
This dividend equivalent for each Director shall be converted
into a number representing additional shares of Phantom Stock by
dividing (a) the total dollar amount of the Director's dividend
equivalent by (b) the arithmetic average of the high and low
sales prices of Company Stock as reported on New York Stock
Exchange - Composite Transactions on the date when the cash
dividends are paid. The Director's account under this Plan shall
then be credited with the determined number of shares of Phantom
Stock, including fractional shares calculated to three decimal
places.
3.04 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 its Company
Stock, resulting in a split-up or combination or exchange of
shares, or if any special distribution is made to holders of
Company Stock, the aggregate number and kind of shares of Phantom
Stock credited to the account of a Director under the Plan shall
be proportionately and appropriately adjusted.
ARTICLE IV
PAYMENT OF PLAN ACCOUNTS
4.01 No Director shall receive any payment under the
Plan while serving as a Director. If a Director resigns or
retires during a calendar year, the Director's account shall be
maintained under the Plan through January 15 of the following
year. As of such January 15, the total number of shares of
Phantom Stock credited to the Director's account (representing
both grants and dividend equivalents) shall be computed and a
distribution made to the Director as soon after January 15 as
administratively feasible. Distributions shall be in shares of
Company Stock, except that any fractional share shall be paid in
cash. The cash value of the fractional share shall be based on
the arithmetic average of the high and low sales prices of
Company Stock as reported on New York Stock Exchange - Composite
Transactions on January 15 (or on the preceding business day if
the New York Stock Exchange is not open on January 15).
4.02 Except as otherwise specifically provided in
Section 4.03 below, any payment shall be made in a single lump
sum.
4.03(a) Payment of Phantom Stock credited to a
Director's account from time to time in accordance with Section
3.01, including any dividend equivalents attributable to such
Phantom Stock, shall be made in a single lump sum unless the
Director elects before December 31 of any year to have the
Phantom Stock (including dividend equivalents attributable
thereto) credited during the following calendar year paid out in
five annual installments. Once made, any such election is
irrevocable for the calendar year to which it applies. A new
election will be required each December if installments are
desired for the following calendar years.
If the Director elects payment in the form of five
annual installments, the initial installment shall be paid as
soon as administratively feasible after January 15 of the year
following the year of the Director's resignation or retirement
and shall equal one-fifth of the number of shares of Phantom
Stock subject to installment payments. The subsequent four
annual installments shall be paid as soon as administratively
feasible after the next four January 15 dates and shall equal in
each case (i) the remaining number of shares of Phantom Stock
subject to installment payments divided by (ii) the number of
installment payments remaining, including the installment about
to be paid.
(b) Payment of Phantom Stock credited to a
Director's account in accordance with Section 3.02, including any
dividend equivalents attributable to such Phantom Stock, shall be
made in a single lump sum.
4.04 In the event of a Director's death, the
remaining unpaid portion of such Director's Phantom Stock
credited under the Plan, including any applicable dividend
equivalents, shall be paid in a single lump sum to the Director's
Beneficiary as soon as administratively feasible after January 15
of the year following the calendar year of the Participant's
death. The payment shall be in shares of Company Stock, except
that the value of any fractional share shall be computed as
described in Section 4.01 and paid in cash.
ARTICLE V
COMPANY STOCK
Shares of Company Stock distributed under the Plan may
be shares purchased by the Company on the open market or shares
held in the Company's treasury from time to time, or a
combination of both, as the Board may from time to time
determine.
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
without the Director's consent, no such amendment, suspension or
termination shall materially adversely affect the rights of any
Director in respect of previous grants to such Director.
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 cash value (measured as of the January 15
immediately preceding the distribution) of such fractional share
to the Director (or the Director's Beneficiary, if applicable).
The cash value of a fractional share shall be computed as
described in Section 4.01.
7.05 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 effective January 1, 1997,
pursuant to action taken by the Board of Directors of Reynolds
Metals Company at its meeting on November 15, 1996.
REYNOLDS METALS COMPANY
By F Robert Newman
Title: Vice President,
Human Resources
F:\LJA\DIRCOMP\STOCKPLN\EF-01-01.997
EXHIBIT 10.42
Summary - Executive Severance Package
Purpose: To provide reduction- in- force benefits for
certain key employees from January 1997
through June 1998
Requirements: - Employees must fulfill service and
performance stipulations through designated
termination date
Severance Payment Tiers Amounts
Tier I - Office of 18 months base salary
the Chief plus 1997 termination
Executive allowance package
Tier II - all 12 months base salary
other officers of plus 1997 termination
Reynolds Metals allowance package
Company
Tier III - other 6 months base salary
key employees plus 1997 termination
allowance package
Outplacement Full individualized outplacement services
until individual is successfully placed.
Incentive If the employee works at least six months
during the incentive year, then a pro-rata
award based on performance and number of
months worked during incentive year will be
made.
Release Employees must sign a release to be
Requirement eligible for benefits under this policy.
Note: "Officer" does not include assistant officers.
EXHIBIT 10.43
Special Award Program
1-17-97
- - - Due to actions resulting from the portfolio review
process, special awards to certain executives or "key
employees" may be recommended for exceptional performance in
successfully completing the disposition of a business unit.
- - - Awards: amount is discretionary based on situation
can be based on the value of the proceeds
achieved from the sale of the business unit
no individual award to exceed $100,000
aggregate cap on all awards is $2,000,000
- - - Payment: generally paid in a lump sum
timing could be immediate or upon closing of
the sale
- - - Approval: all recommendations must be approved by
the Office of the Chief Executive
- - - Special awards would not be considered for purposes of
any pension or benefit plan
EXHIBIT 11
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In millions, except share data)
EARNINGS PER SHARE:
For 1996 and 1994, earnings per share equals net income, minus
dividends on the Company's convertible preferred stock (PRIDES),
divided by the weighted-average number of common shares
outstanding during the year. For 1995, earnings per share equals
net income divided by the weighted-average number of common
shares and common share equivalents outstanding during the year.
The number of common share equivalents outstanding for 1995 was
based on the assumed conversion of the PRIDES. For the purpose
of this computation, the conversion rate shown below, which
refers to the number of shares of common stock to be received for
each share of PRIDES, was based on the average market value of
common stock during 1995 (also shown below). Common share
equivalents relating to the PRIDES were not included in 1996 and
1994 since their effect would have been anti-dilutive.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
---------------------------------------
1996 1995 1994
---------------------------------------
<S> <C> <C> <C>
Weighted-average shares outstanding:
Common shares 63,730,000 63,051,000 61,756,000
Common share equivalents - 9,704,000 -
---------------------------------------
Total 63,730,000 72,755,000 61,756,000
=======================================
Income before cumulative effect of
accounting change $104 $389 $122
Less preferred stock dividends 36 - 34
---------------------------------------
$68 $389 $88
---------------------------------------
Cumulative effect of accounting change (15) - -
---------------------------------------
Net income $53 $389 $88
=======================================
Earnings per share:
Income before cumulative effect of
accounting change $1.06 $5.35 $1.42
Cumulative effect of accounting change (0.24) - -
---------------------------------------
Net income $0.82 $5.35 $1.42
=======================================
Conversion rate - 0.88 -
Average market value of common stock - $53.56 -
</TABLE>
EARNINGS PER SHARE (FULLY DILUTED):
For 1996, earnings per share (fully diluted) equals net income
divided by the weighted-average number of common shares
outstanding during the year. For purposes of this calculation,
the PRIDES were assumed to be redeemed or converted into
9,019,990 shares of common stock on January 1, 1996 (see Note 7).
For 1995 and 1994, earnings per share (fully diluted) equals net
income divided by the weighted-average number of common shares
and common share equivalents outstanding during the year. For
the 1995 and 1994 calculation, the number of common share
equivalents outstanding was based on the maximum potential
issuance of common shares upon conversion of the PRIDES, which
was one share of common for each share of PRIDES. These
computations were made for presentation purposes only since the
effect was anti-dilutive in 1996 and 1994 and was not material in
1995. The difference between the number of common share
equivalents for the years ended December 31, 1995 and 1994 is due
to the PRIDES having been issued on January 25, 1994. The
calculation for 1996 is equivalent to supplemental earnings per
share disclosed in Note 1.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------------
1996 1995 1994
----------------------------------------
<S> <C> <C> <C>
Weighted-average shares outstanding:
Common shares 72,680,000 63,051,000 61,756,000
Common share equivalents - 11,000,000 10,277,000
----------------------------------------
Total 72,680,000 74,051,000 72,033,000
========================================
Income before cumulative effect
of accounting change $104 $389 $122
Cumulative effect of accounting change (15) - -
----------------------------------------
Net income $89 $389 $122
========================================
Earnings per share (fully diluted):
Income before cumulative effect of
accounting change $1.43 $5.26 $1.69
Cumulative effect of accounting change (0.21) - -
----------------------------------------
Net income $1.22 $5.26 $1.69
========================================
</TABLE>
PARENTS AND SUBSIDIARIES EXHIBIT 21
(A) Reynolds Metals Company has no parents.
(B) Set forth below is a list of certain of the subsidiaries and
associated companies of Reynolds Metals Company:
Place of
Incorporation Or
Organization
------------
Aluminerie de Becancour Inc. Quebec
* Aluminio Reynolds de Venezuela, S. A. Venezuela
Aluminium Oxid Stade Gesellschaft mit beschrankter Haftung Germany
* Bakers Choice Products, Inc. Delaware
Bohai Aluminium Industries, Ltd. China
* Canadian Reynolds Metals Company, Ltd./Societe Canadienne de
Metaux Reynolds, Ltee Quebec
Hamburger Aluminium-Werk Gesellschaft mit beschrankter
Haftung Germany
* Hanover Manufacturing Corporation Delaware
* Industria Navarra del Aluminio, S. A. Spain
* Latas de Aluminio Reynolds, Inc. Delaware
Latas de Aluminio, S. A. Brazil
Manicouagan Power Company - La Compagnie Hydroelectrique
Manicouagan Quebec
* Malakoff Industries, Inc. Texas
* Mt. Vernon Plastics Corporation Delaware
Pechiney Reynolds Quebec, Inc. Nebraska
* Presidential Development Corporation New York
* RAMCO Manufacturing Company Delaware
* RB Sales Company, Ltd. Delaware
* Reynolds Aluminium Deutschland, Inc. Delaware
* Reynolds Aluminium Deutschland Internationale
Vertriebsgesellschaft mbH Germany
* Reynolds Aluminium France, S.A. France
* Reynolds Aluminium Holland B. V. The Netherlands
* Reynolds Aluminum Company of Canada, Ltd./Societe D'Aluminium
Reynolds Du Canada, Ltee Quebec
* Reynolds Australia Alumina, Ltd. Delaware
* Reynolds Becancour, Inc. Delaware
* Reynolds Consumer Products, Inc. Delaware
* Reynolds International Holdings, Inc. Delaware
* Reynolds International, Inc. Delaware
Reynolds International (China), Ltd. Bermuda
* Reynolds International Latin America, S.A. Panama
* Reynolds International (Panama) Inc. Panama
* Reynolds Italy Holding, S.p.A Italy
* Reynolds-Lemmerz Industries Ontario
* Reynolds Wheels-Holding, S.p.A. Italy
* Reywest Development Corporation Arizona
* RMC Delaware, Inc. Delaware
* RMC Properties, Ltd. Delaware
* RMCC Company Delaware
* Reynolds Metals Development Company Delaware
* Reynolds Metals Foreign Sales Corporation Barbados
* Saint George Insurance Company Vermont
* Southern Graphic Systems - Canada, Ltd./Systemes Graphiques
Southern - Canada, Ltee Quebec
* Southern Graphic Systems, Inc. Kentucky
* Southern Reclamation Company, Inc. Alabama
* Southwestern Graphics Systems, Inc. Texas
The names of a number of subsidiaries and associated companies
have been omitted because considered in the aggregate they would
not constitute a significant subsidiary.
* Consolidated subsidiaries
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the:
1. Registration Statement (Form S-8 No. 2-76789) pertaining
to the Reynolds Metals Company 1982 Nonqualified Stock
Option Plan;
2. Registration Statement (Form S-8 No. 33-13822) pertaining
to the Reynolds Metals Company 1987 Nonqualified Stock
Option Plan;
3. Registration Statement (Form S-8 No. 33-44400) pertaining
to the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan;
4. Registration Statement (Form S-8 No. 33-20498) pertaining
to the Reynolds Metals Company Savings and Investment
Plan for Salaried Employees;
5. Registration Statement (Form S-3 No. 33-43443) pertaining
to the shelf registration of debt securities of Reynolds
Metals Company;
6. Registration Statement (Form S-8 No. 33-66032) pertaining
to the Reynolds Metals Company Savings Plan for Hourly
Employees;
7. Registration Statement (Form S-3 No. 33-51153) pertaining
to the offer and resale of shares of Reynolds Metals
Company Common Stock by the Trustee of the Reynolds
Metals Company Pension Plans Master Trust;
8. Registration Statement (Form S-8 No. 33-53847) pertaining
to the Employees Savings Plan;
9. Registration Statement (Form S-8 No. 33-53851) pertaining
to the Reynolds Metals Company Restricted Stock Plan for
Outside Directors;
10. Registration Statement (Form S-3 No. 33-59168) pertaining
to the registration of debt securities of Reynolds
Aluminum Company of Canada, Ltd. (formerly known as
Canadian Reynolds Metals Company Limited);
11. Registration Statement (Form S-8 No. 333-00929)
pertaining to the Reynolds Metals Company Performance
Incentive Plan,
12. Registration Statement (Form S-8 No. 333-03947)
pertaining to the Reynolds Metals Company 1996
Nonqualified Stock Option Plan;
and in the related prospectuses of our report dated February 21,
1997, with respect to the consolidated financial statements of
Reynolds Metals Company included in this Annual Report (Form 10-
K) for the year ended December 31, 1996.
Ernst & Young LLP
Richmond, Virginia
March 18, 1997
EXHIBIT 24
1. Powers of Attorney from the following persons are attached:
Patricia C. Barron
William O. Bourke
John R. Hall
Robert L. Hintz
William H. Joyce
Mylle Bell Mangum
D. Larry Moore
James M. Ringler
Samuel C. Scott, III
Joe B. Wyatt
F:\BFH\SEC\10K\EX-24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for her and in her name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
Patricia C. Barron
______________________________
Patricia C. Barron
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 16th day of
April, 1997.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
William O. Bourke
______________________________
William O. Bourke
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
John R. Hall
______________________________
John R. Hall
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
Robert L. Hintz
______________________________
Robert L. Hintz
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
William H. Joyce
______________________________
William H. Joyce
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for her and in her name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
Mylle Bell Mangum
______________________________
Mylle Bell Mangum
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
D. Larry Moore
______________________________
D. Larry Moore
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
James M. Ringler
______________________________
James M. Ringler
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
Samuel C. Scott, III
______________________________
Samuel C. Scott, III
F:\BFH\SEC\POA.97
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
hereby constitutes and appoints D. Michael Jones and Brenda A.
Hart, or either of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all
capacities (including without limitation in any capacity on
behalf of Reynolds Metals Company (the "Company")), to
(i) Sign the Annual Report on Form 10-K of the Company
for the year ended December 31, 1996 and any and all
amendments thereto, and to file the same, with all exhibits
thereto, and all documents in connection therewith, if any,
with the Securities and Exchange Commission (the "SEC"), and
to take all such other action which they or either of them
may consider necessary or desirable in connection therewith,
all in accordance with the Securities Exchange Act of 1934,
as amended; and
(ii) Sign any and all post-effective amendments to the
Company's Registration Statements relating to (a) the offer
and sale of interests in the Reynolds Metals Company Savings
and Investment Plan for Salaried Employees and an indefinite
number of shares of the Company's common stock, without par
value (the "Common Stock") in connection therewith; (b) the
offer and sale of up to 900,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Reynolds
Metals Company Savings Plan for Hourly Employees; (c) the
offer and sale of up to 50,000 shares of Common Stock
together with an indeterminate amount of interests to be
offered and sold in connection therewith under the Employees
Savings Plan; (d) the offer and sale of up to 1,200,000
shares of Common Stock under the Reynolds Metals Company
1982 Nonqualified Stock Option Plan; (e) the offer and sale
of up to 3,000,000 shares of Common Stock under the Reynolds
Metals Company 1987 Nonqualified Stock Option Plan; (f) the
offer and sale of up to 3,250,000 shares of Common Stock
under the Reynolds Metals Company 1992 Nonqualified Stock
Option Plan; (g) the offer and sale of up to 2,000,000
shares of Common Stock under the Reynolds Metals Company
1996 Nonqualified Stock Option Plan; (h) the offer and sale
of up to 100,000 shares of Common Stock under the Reynolds
Metals Company Performance Incentive Plan; and (i) the offer
and sale of up to 30,000 shares of Common Stock under the
Reynolds Metals Company Restricted Stock Plan for Outside
Directors; and to file the same, with all exhibits thereto,
and all documents in connection therewith, with the SEC; and
(iii) Sign any and all Registration Statements on Form S-
3, or on such other form as may be appropriate, for
registration of the shares of Common Stock and Series A
Junior Participating Preferred Stock (without par value) of
the Company, issuable upon exercise of Rights (as defined in
the Rights Agreement between the Company and The Chase
Manhattan Bank, N.A., dated as of November 23, 1987, as
amended from time to time) and any and all amendments
(including post-effective amendments) to such Registration
Statements, and to file the same, with all exhibits thereto,
and all preliminary prospectuses, prospectuses, prospectus
supplements and documents in connection therewith, with the
SEC; and
(iv) Sign any and all post-effective amendments to the
Company's Registration Statements relating to the offer and
sale of up to $1,650,000,000 principal amount of unsecured
debt securities of the Company, and to file the same, with
all exhibits thereto, and all prospectuses, prospectus
supplements, pricing supplements and documents in connection
therewith, with the SEC; and
(v) Sign any and all post-effective amendments to the
Company's Registration Statement relating to the offer and
resale from time to time of up to 3,000,000 shares of Common
Stock by the Trustee of the Reynolds Metals Company Pension
Plans Master Trust, and to file the same, with all exhibits
thereto, and all prospectuses, prospectus supplements,
pricing supplements and documents in connection therewith,
with the SEC;
granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that each of said attorneys-
in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall expire on the 28th day of
February, 1998.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Power of Attorney on the 21st day of February,
1997.
Joe B. Wyatt
______________________________
Joe B. Wyatt
F:\BFH\SEC\POA.97
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Reynolds
Metals Company Consolidated Balance Sheet for December 31, 1996 and Consolidated
Statement of Income and Retained Earnings for the Year Ended December 31, 1996
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 38
<SECURITIES> 00
<RECEIVABLES> 829
<ALLOWANCES> 18
<INVENTORY> 787
<CURRENT-ASSETS> 1873
<PP&E> 6813
<DEPRECIATION> 3576
<TOTAL-ASSETS> 7516
<CURRENT-LIABILITIES> 1333
<BONDS> 1793
0
0
<COMMON> 1451
<OTHER-SE> 1183
<TOTAL-LIABILITY-AND-EQUITY> 7516
<SALES> 6972
<TOTAL-REVENUES> 7016
<CGS> 5856
<TOTAL-COSTS> 6221
<OTHER-EXPENSES> 37
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 160
<INCOME-PRETAX> 153
<INCOME-TAX> 49
<INCOME-CONTINUING> 104
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (15)
<NET-INCOME> 89
<EPS-PRIMARY> 0.82
<EPS-DILUTED> 0
</TABLE>
