SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
REYNOLDS METALS COMPANY
- -------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
<PAGE>
________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________
(5) Total fee paid:
________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________
(3) Filing Party:
________________________________________________________________
(4) Date Filed:
________________________________________________________________
<PAGE>
REYNOLDS METALS COMPANY
6601 West Broad Street
Richmond, Virginia 23230
March 18, 1998
TO OUR STOCKHOLDERS:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Reynolds Metals Company on Thursday, May 14, 1998, at 4:00
p.m., Eastern Daylight Time, at the Company's offices, 6601 West Broad Street,
Richmond, Virginia.
All holders of record of the Company's outstanding Common Stock at the
close of business on March 16, 1998 are entitled to vote at the Meeting. The
accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
describe the matters to be acted upon at the Meeting.
As a Stockholder, your vote is important. PLEASE SIGN AND RETURN THE
ENCLOSED PROXY PROMPTLY WHETHER OR NOT YOU PLAN TO ATTEND SO THAT WE MAY HAVE
AS MANY SHARES AS POSSIBLE REPRESENTED AT THE MEETING. Returning your
completed proxy will not prevent you from voting in person at the Meeting if
you wish to do so.
The Meeting gives us an opportunity to review results and discuss the
steps the Company is taking to enhance Stockholder value. Your interest in the
Company is much appreciated, and I hope you will be able to join us. If you
plan to attend, please mark the attendance box on your completed proxy.
Sincerely,
/s/ Jeremiah J. Sheehan
Jeremiah J. Sheehan
Chairman of the Board and
Chief Executive Officer
<PAGE>
REYNOLDS METALS COMPANY
6601 West Broad Street
Richmond, Virginia 23230
__________
NOTICE
OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
__________
TO THE HOLDERS OF SHARES OF COMMON STOCK:
Reynolds Metals Company will hold its 1998 Annual Meeting of Stockholders
on Thursday, May 14, 1998, at 4:00 p.m., Eastern Daylight Time, at the
Company's offices, 6601 West Broad Street, Richmond, Virginia, for the
following purposes:
1. To elect Directors of the Company;
2. To ratify the selection of Ernst & Young LLP as independent
auditors of the Company for 1998;
3. To consider and act upon a Stockholder proposal requesting
endorsement of the CERES Principles, if presented at the
Meeting; and
4. To transact such other business as may properly come before the
Meeting.
Holders of the Company's Common Stock of record at the close of business
on March 16, 1998 are entitled to vote at the Meeting.
By order of the Board of Directors,
/s/ Donna C. Dabney
DONNA C. DABNEY
Secretary
March 18, 1998
<PAGE>
REYNOLDS METALS COMPANY
___________________
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
___________________
PROXY SOLICITATION AND VOTING
The enclosed proxy is being solicited by the Board of Directors of
Reynolds Metals Company (the "Company") for use at the 1998 Annual Meeting of
Stockholders to be held on Thursday, May 14, 1998, and at any adjournments
thereof. This Proxy Statement and the accompanying proxy materials are first
being mailed to Stockholders on or about March 27, 1998.
Holders of record of the Company's outstanding common stock, without par
value (the "Common Stock"), at the close of business on March 16, 1998, are
entitled to vote at the Meeting. On that date, 72,549,288 shares of Common
Stock were outstanding and entitled to vote at the Meeting, each entitled to
one vote.
A majority of the shares entitled to vote, present in person or by proxy,
will constitute a quorum for the transaction of business at the Meeting. The
affirmative vote of a majority of the votes cast by Stockholders, present in
person or by proxy at the Meeting, is required to elect the Nominees and to
approve each of the other items of business described in this Proxy Statement.
Abstentions will be counted for purposes of determining whether a quorum exists
and will have the effect of votes against an item. Proxies submitted by
brokers that do not indicate a vote for some or all of the items of business
because the brokers do not have discretionary voting authority and have not
received instructions as to how to vote on those items from the beneficial
owners of the shares (so-called "broker non-votes") will have no effect on the
vote.
Any Stockholder giving a proxy may revoke it at any time before it is
exercised by (i) giving written notice to the Secretary of the Company, (ii)
submitting a properly signed proxy bearing a later date or (iii) casting a
ballot in person at the Meeting.
If a proxy is properly signed and returned and is not revoked by the
Stockholder, the shares it represents will be voted at the Meeting in
accordance with the instructions of the Stockholder. If a proxy is properly
signed and returned without specifying choices, the shares will be voted in
accordance with the recommendations of the Board of Directors. The Board of
Directors recommends a vote FOR Items 1 and 2 and AGAINST Item 3.
The Company will bear all costs relating to the solicitation of proxies.
The Company has retained Morrow & Co., Inc., 909 Third Avenue, New York, New
York 10022-4799, to aid in the solicitation of proxies, at a fee of $11,000,
plus reimbursement of out-of-pocket expenses. The Company may also solicit
proxies in person or by mail, telephone, facsimile or other means of
<PAGE>
electronic communication. Brokers, banks, nominees, fiduciaries and other
custodians will be requested to forward soliciting material to the beneficial
owners of Common Stock.
ITEM 1. ELECTION OF DIRECTORS
Information Concerning the Nominees
The Board of Directors proposes the election of the eleven Nominees named
below as Directors of the Company for the ensuing year. Unless otherwise
instructed on the proxy, the shares represented by proxies will be voted for
the election of all eleven Nominees. If any Nominee becomes unavailable to
serve as a Director, the shares represented by such proxies may be voted for a
substitute Nominee designated by the Board of Directors.
All of the Nominees were elected at the 1997 Annual Meeting of
Stockholders. J. Wilt Wagner, a Director since 1996, retired from the Company
and the Board of Directors effective October 1, 1997. Henry S. Savedge, Jr., a
Director since 1992, will retire from the Board of Directors and not stand for
reelection.
The following table sets forth the Nominees' names, ages and principal
occupations and additional information about them:
Director
Name-Age-Principal Occupation-Other Information Since
----------------------------------------------- -----
PATRICIA C. BARRON (55) 1994
Corporate Vice President, Business Operations Support, Xerox
Corporation, a manufacturer of office systems and equipment,
since 1997. Vice President, Xerox Corporation, and President,
Engineering Systems Division, Xerox Corporation, 1993-1997.
Director, Quaker Chemical Corporation, Frontier Corporation,
ARAMARK Corporation and Teleflex Incorporated.
JOHN R. HALL (65) 1985
Chairman of the Board, Arch Coal, Inc., a coal company formed
effective July 1, 1997 by the merger of Ashland Coal, Inc. and
Arch Mineral Corporation, since July 1, 1997. Chairman of the
Board, Ashland Inc., a worldwide energy and chemical company
engaged in petroleum refining and marketing, October 1996 -
January 1997. Chairman of the Board and Chief Executive Officer,
Ashland Inc., 1981-1996. Director, Banc One Corporation, The
Canada Life Assurance Company, CSX Corporation, Humana Inc.,
LaRoche Industries Inc. and UCAR International Inc.
ROBERT L. HINTZ (67) 1986
Chairman of the Board, R. L. Hintz & Associates, a management
services firm, since 1989. Director, The Chesapeake Corporation,
Scott & Stringfellow Financial, Inc. and Arch Coal, Inc.
WILLIAM H. JOYCE (62) 1995
Chairman of the Board and Chief Executive Officer, Union Carbide
Corporation, a manufacturer of chemicals and plastics, since
January 1996. President and Chief Executive Officer, Union
Carbide Corporation, April 1995-December 1995. President and
Chief Operating Officer, Union Carbide Corporation, 1993-
April 1995. Director, CVS Corporation.
<PAGE>
Director
Name-Age-Principal Occupation-Other Information Since
----------------------------------------------- -----
MYLLE BELL MANGUM (49) 1995
Senior Vice President, Expense Management and Strategic
Planning, Carlson Wagonlit Travel, a travel services
company, since March 1997. Executive Vice President, Strategic
Management, Holiday Inn Worldwide, a subsidiary of Bass PLC
engaged in the operation of hotels worldwide, 1992-February 1997.
Director, Scientific-Atlanta, Inc. and Payless ShoeSource, Inc.
D. LARRY MOORE (61) 1995
Retired. President and Chief Operating Officer, Honeywell
Inc., a global manufacturer of automation and control systems,
1993-April 15, 1997. Executive Vice President and Chief
Operating Officer for Space and Aviation, Honeywell Inc.,
1990-1993. Director, The Geon Company, Thiokol Corporation
and Howmet International Inc.
RANDOLPH N. REYNOLDS (56) 1984
Vice Chairman and Executive Officer of the Company since
October 1996. Vice Chairman of the Board of the Company,
1994-1996. Executive Vice President, International of the
Company, 1990-1994. Director, First Union Corporation.
JAMES M. RINGLER (52) 1994
Chairman of the Board, President and Chief Executive Officer,
Premark International, Inc., a multinational manufacturer and
marketer of food equipment, decorative products and consumer
products, since October 1, 1997. President and Chief Executive
Officer, Premark International, Inc., 1996-September 30, 1997.
President and Chief Operating Officer, Premark International,
Inc., 1992-1996. Director, Union Carbide Corporation.
SAMUEL C. SCOTT, III (53) 1997
President and Chief Operating Officer, Corn Products
International, Inc., a corn refining company created by the
spin-off to shareholders of the corn refining business of CPC
International Inc. (which changed its name to Bestfoods
effective January 1, 1998), since January 1998. Vice
President, CPC International Inc., 1991-1997, and
President-Corn Refining Business (a division of CPC
International Inc.), 1995-1997. Director, Motorola, Inc.
JEREMIAH J. SHEEHAN (59) 1994
Chairman of the Board and Chief Executive Officer of the
Company since October 1996. President and Chief Operating
Officer of the Company, 1994-1996. Executive Vice President,
Fabricated Products of the Company, 1993-1994. Director,
Union Camp Corporation, Federal Reserve Bank of Richmond and
Universal Corporation.
JOE B. WYATT (62) 1992
Chancellor, Vanderbilt University since 1982. Director,
Sonat Inc. and Ingram Micro Inc.
Certain Relationships
Randolph N. Reynolds' brother, William G. Reynolds, Jr., is a Vice
President of the Company. The husband of Donna C. Dabney, Secretary and
Assistant General Counsel of the Company, is a partner of McGuire, Woods,
Battle & Boothe, L.L.P., a law firm which provides legal services to the
Company.
<PAGE>
Meetings and Committees of the Board
The Board of Directors held nine meetings in 1997. Six standing
committees of the Board also met periodically during 1997. Incumbent
Directors' attendance at meetings of the Board and of standing committees on
which they served averaged over 95% during 1997. All incumbent Directors
serving in 1997 attended at least 75% of such meetings. The Board also meets
periodically in executive session.
In late 1997, the Board approved the elimination of the Finance Committee
of the Board of Directors and the re-assignment of that Committee's
responsibilities to the full Board and other standing committees of the Board.
In addition, the Pension and Investment Committee was renamed the Pension and
Finance Committee. Information regarding the current standing committees of
the Board is set forth below.
The Executive Committee is composed of J. J. Sheehan (Chairman), R. N.
Reynolds and H. S. Savedge, Jr. It has the power to act in place of the Board
of Directors during intervals between meetings of the Board. This committee
acted seven times by unanimous written consent in 1997.
The Audit Committee is composed of R. L. Hintz (Chairman), P. C. Barron,
J. R. Hall, J. M. Ringler and S. Scott. The principal function of the Audit
Committee is to review the system of internal controls which management and the
Board of Directors have established and the audit function of the Company's
independent auditors and its Internal Auditing Department. The Audit Committee
recommends to the Board of Directors the firm to be engaged by the Company as
its independent auditors. It reviews, among other things, audit plans and
procedures, the Company's financial statements, the Company's policies with
respect to conflicts of interest and the prohibition of the use of corporate
funds or other assets for improper purposes, changes in accounting policies and
the use of independent auditors for nonaudit services. The committee also
reviews the Company's risk management programs. This committee met three times
in 1997.
The Compensation Committee is composed of J. R. Hall (Chairman), W. H.
Joyce, M. B. Mangum, D. L. Moore, J. M. Ringler, S. Scott and J. B. Wyatt. The
principal functions of the Compensation Committee are to review and recommend
to the Board, or determine, the compensation paid to the Company's Executive
Officers and to administer designated executive compensation plans of the
Company, including stock option, cash incentive and deferral plans. See
"Report of Compensation Committee on Executive Compensation." This committee
met four times and acted twice by unanimous written consent in 1997.
The Committee on Directors is composed of J. M. Ringler (Chairman), P. C.
Barron, R. L. Hintz and W. H. Joyce. The primary function of the Committee on
Directors is to recommend to the Board of Directors persons to be considered
for election to the Board. In making such recommendations, the Committee on
Directors will consider nominations submitted by Stockholders. Stockholder
nominations for the 1999 Annual Meeting must be submitted in writing in
accordance with the procedures set forth under "General Information -
Stockholders' Proposals and Nominations." The Board of Directors has adopted a
policy under which it will not elect or nominate for election or reelection to
the Board of Directors any person who has attained
<PAGE>
age 70. An officer of the Company serving as a member of the Board of
Directors is expected to resign as a Director at the time he ceases to be an
officer, whether due to retirement or otherwise. In addition, the policy
provides that if a nonemployee Director has a substantial change in principal
employment and/or responsibility, the Director is expected to resign effective
on the last day of the month in which the next regular meeting of the Board is
held, unless before that date the Board, based on a review and determination by
the Committee on Directors regarding whether the Director's continued service
on the Board is in the Company's best interests, approves the withdrawal of the
resignation. Other functions of the Committee on Directors include
recommending the compensation to be paid to Directors and evaluating the
corporate governance practices followed by the Board and its standing
committees. This committee met twice in 1997.
The Pension and Finance Committee is composed of J. B. Wyatt (Chairman),
W. H. Joyce, M. B. Mangum, D. L. Moore and R. N. Reynolds. It oversees the
capital structure of the Company and the financial administration of the assets
of the pension plans of the Company and certain subsidiaries, including the
selection of trustees and investment managers for the assets of these plans and
periodic review of investment results. It also maintains a comprehensive
statement of investment policy and appoints independent auditors for each
pension plan. This committee met three times and acted once by unanimous
written consent in 1997.
Board Compensation and Benefits
Fees. Directors who are not employed by the Company or any of its
subsidiaries ("Outside Directors") are paid an annual retainer of $30,000 for
serving as a Director. Outside Directors are paid $4,000 for serving as
chairman of the Audit Committee and Compensation Committee and $3,000 for
chairing other committees. Outside Directors are also paid $1,000 for each
Board and committee meeting attended, plus expenses reasonably incurred in
connection with Company business.
Restricted Stock Plan for Outside Directors. Under this plan, approved by
Stockholders at the 1994 Annual Meeting, Outside Directors are granted 1,000
shares of Common Stock subject to forfeiture and transfer restrictions
("Restricted Stock") 60 days after initial election to the Board. The
restrictions expire as to 200 shares of Restricted Stock on the April 1
immediately following the date of grant (or, if later, the date of the
six-month anniversary of the grant date). Restrictions expire as to an
additional 200 shares on each successive April 1, so that by the fifth April 1
following the date of grant, restrictions on all 1,000 shares will have
expired, assuming continued service by the Outside Director throughout the
period. The plan provides for an additional grant of 1,000 shares of
Restricted Stock to each Outside Director on June 1 of the year in which the
restrictions have expired as to all the shares covered by the Outside
Director's previous grant under the plan (assuming the Outside Director
continues to serve as an Outside Director on such June 1). If an Outside
Director ceases to be a member of the Board because of death or disability or
because of a Change in Control (as defined in the plan) of the Company,
restrictions on 200 shares will lapse immediately, with all other shares as to
which restrictions have not expired being forfeited. If an Outside Director
ceases to be a member of the Board for any other reason, all shares as to which
restrictions have not expired will be forfeited.
<PAGE>
Stock Plan for Outside Directors. Under this plan, Outside Directors
receive an annual grant of 225 shares of phantom stock of the Company, plus
dividend equivalents based on the dividends that would have been paid on the
phantom stock if the Outside Director had actually owned shares of Common
Stock. The annual grant is made in quarterly installments at the end of each
calendar quarter. In addition, the accounts of current Outside Directors who
had been covered by the Company's retirement and death benefit plans for
Outside Directors, which were terminated effective January 1, 1997, were
credited as of that date with shares of phantom stock equivalent in value to
their benefits earned under the terminated plans through December 31, 1996.
Outside Directors' accounts under this plan are payable upon the Outside
Director's retirement, resignation or death. The accounts are paid in shares
of Common Stock of the Company, with fractional shares paid in cash. Payments
will be made in a lump sum or in five annual installments, as elected by the
Outside Director.
Deferred Compensation Plan for Outside Directors. Under this plan, an
Outside Director may elect for each year to defer receipt of all or part of his
or her retainer and meeting fees. The deferred amounts will be paid in cash
after (a) a specified year, (b) the Outside Director ceases to be a member of
the Board of Directors or (c) the Outside Director reaches age 70, as the
Outside Director elects (except that clause (b) applies in all cases where the
deferred amounts are credited with additional compensation in the form of share
equivalents as described in clause (ii) in the next sentence). Amounts
deferred are credited with additional compensation in the form (as elected by
the Outside Director) of (i) interest at an annual rate set by the plan
committee, whose members are not eligible to participate in the plan, or (ii) a
number of equivalent shares of common stock, together with dividend equivalents
based on the dividends paid on such equivalent shares of common stock.
Participants have the option to receive payment in a lump sum or in annual
installments over a two- to ten-year period.
Stock Ownership Guidelines. For information on stock ownership guidelines
for Outside Directors, see "Beneficial Ownership of Securities -- Stock
Ownership Guidelines."
Other Compensation
The Company had a consulting agreement through April 30, 1997 with William
O. Bourke, who retired as Chairman of the Board and Chief Executive Officer of
the Company in 1992 and as a Director of the Company effective April 16, 1997.
The agreement provided for (i) payment of an annual fee of $100,000, (ii)
reimbursement of reasonable travel and other related business expenses and
(iii) making available to Mr. Bourke office space, secretarial services and a
car. For 1997, Mr. Bourke received $38,759 in consulting fees and personal
benefits.
<PAGE>
BENEFICIAL OWNERSHIP OF SECURITIES
Principal Holders
The following table shows Stockholders who were known to the Company to
own beneficially more than five percent of the Company's Common Stock at March
16, 1998. Under the rules of the Securities and Exchange Commission ("SEC"),
"beneficial ownership" is deemed to include any shares with respect to which
the person, directly or indirectly, has or shares voting and/or investment
power, whether or not such shares are held for the person's benefit.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial
Ownership
(Number of Percent
Title of Class Shares) of Class
-------------- ------------- --------
<S> <C> <C> <C>
Wellington Management Company, LLP Common Stock 8,617,110 <F1> 11.9%
75 State Street
Boston, Massachusetts 02109
Vanguard/Windsor Fund, Inc. Common Stock 6,702,548 <F2> 9.2%
100 Vanguard Building
P. O. Box 2600
Malvern, Pennsylvania 19355
Franklin Resources, Inc. Common Stock 4,884,304 <F3> 6.7%
Charles B. Johnson
Rupert H. Johnson, Jr.
777 Mariners Island Boulevard
San Mateo, California 94404
Institutional Capital Corporation Common Stock 3,944,820 <F4> 5.4%
Robert H. Lyon
225 West Wacker Drive, Suite 2400
Chicago, Illinois 60606
<FN>
_________________
<F1> As reported in an Amendment No. 6 dated January 17, 1998 to a Schedule 13G
dated February 10, 1993. Such filing stated that 8,617,110 shares of
Common Stock were beneficially owned at December 31, 1997 by a variety of
investment advisory clients of Wellington Management Company, LLP, an
investment advisor and parent holding company, including Vanguard/Windsor
Fund, Inc. See footnote (2). As to the reported shares, the filing
indicated that Wellington Management Company, LLP had shared voting power
with respect to 300 shares, shared dispositive power with respect to all
of the shares, and sole voting and dispositive power with respect to none
of the shares.
<F2> As reported in an Amendment No. 5 dated February 9, 1998 to a Schedule 13G
dated February 10, 1993. Such filing stated that 6,702,548 shares of
Common Stock were beneficially owned at December 31, 1997 by
Vanguard/Windsor Fund, Inc., an investment company. As to the reported
shares, the filing indicated that Vanguard/Windsor Fund, Inc. had sole
voting and shared dispositive power with respect to all of the shares, and
shared voting and sole dispositive power with respect to none of the
shares.
<F3> As reported in a joint filing of an Amendment No. 1 dated February 5, 1998
to a Schedule 13G dated February 12, 1997. Such filing stated that
4,884,304 shares of Common Stock were beneficially owned at December 31,
1997 by one or more investment companies or other managed accounts which
are advised by investment advisory subsidiaries of Franklin Resources,
Inc. ("FRI"), a parent holding company, and that Charles B. Johnson and
Rupert H. Johnson, Jr. are the principal stockholders of FRI (the
"Principal Stockholders"). As to the reported shares, the filing
indicated that FRI and the Principal Stockholders had
<PAGE>
no sole voting or dispositive power with respect to the shares and that
the following advisory subsidiaries had sole voting and dispositive power
with respect to the following shares: Templeton Global Advisors Limited,
2,776,504 shares; Franklin Mutual Advisers Inc., 1,788,900 shares;
Templeton Investment Counsel, Inc., 264,900 shares -- sole voting power
(284,100 shares -- sole dispositive power); and Templeton Management
Limited, 34,800 shares.
<F4> As reported in a joint filing of a Schedule 13G dated January 28, 1998.
Such filing stated that 3,944,820 shares of Common Stock were beneficially
owned at December 31, 1997 by Institutional Capital Corporation ("ICC"),
an investment advisor, which has been granted discretionary dispositive
and in some cases voting power over its institutional clients' securities,
and that Robert H. Lyon is the president and majority holder of the
outstanding voting securities of ICC. As to the reported shares, the
filing indicated that ICC and Mr. Lyon had sole voting power with respect
to 3,719,570 shares, sole dispositive power with respect to all of the
shares, and shared voting and dispositive power with respect to none of
the shares.
</FN>
</TABLE>
Directors, Nominees and Executive Officers
The following table shows the beneficial ownership (as defined above), as
of March 16, 1998, of the Company's Common Stock by each Director and Nominee,
each of the Executive Officers named in the Summary Compensation Table, and all
current Directors and Executive Officers of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
(Number of Shares)
---------------------------------------------
Addi-
tional
Sole Shared Per- Common
Voting Voting cent Stock
and/or and/or of Equiva-
Investment Investment Total Class lents
Title of Class Power<F1> Power<F2> <F3> <F4> <F5>
-------------- --------- ---------- -------- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Directors and/or Nominees:
(*also a Named
Executive Officer)
Patricia C. Barron Common Stock 1,526 --- 1,526 859
John R. Hall Common Stock 4,200 --- 4,200 7,582
Robert L. Hintz Common Stock 1,500 --- 1,500 3,679
William H. Joyce Common Stock 3,465 --- 3,465 4,115
Mylle Bell Mangum Common Stock 1,544 --- 1,544 709
D. Larry Moore Common Stock 1,559 --- 1,559 1,470
Randolph N. Reynolds* Common Stock 247,340 60,770 308,110 0.4% 771
James M. Ringler Common Stock 1,071 --- 1,071 4,124
Henry S. Savedge, Jr.* Common Stock 139,693 4,668 144,361 0.2% 394
Sam Scott Common Stock 2,000 --- 2,000 247
Jeremiah J. Sheehan* Common Stock 230,805<F6> 1,082 231,887 0.3% 13,135
Joe B. Wyatt Common Stock 1,500 --- 1,500 2,030
Named Executive Officers:
J. Wilt Wagner <F7> Common Stock 136,500 7,372 143,872 0.2% 4,044
Donald T. Cowles Common Stock 110,345 198,096 308,441 0.3% 674
C. Stephen Thomas Common Stock 56,750 6,579 63,329 0.1% 265
All Directors and
Executive Officers
as a group
(31 persons): Common Stock 1,520,297 622,263 2,142,560 2.9% 53,141
<FN>
__________
<F1> Reported in this column are shares held of record individually or held in
the name of a bank, broker or nominee for the person's account and other
shares with respect to which Directors, Nominees and Executive Officers
(or their spouses, minor children or other relatives who share their home)
have sole
<PAGE>
voting and/or investment power, including shares held as sole trustee or
custodian for the benefit of others. Also included in this column are the
following shares of the Company's Common Stock which may be acquired
within 60 days after March 16, 1998 under the Company's 1987, 1992 and
1996 Nonqualified Stock Option Plans: R. N. Reynolds, 183,000 shares; H.
S. Savedge, Jr., 132,750 shares; J. J. Sheehan, 223,000 shares; D. T.
Cowles, 108,500 shares; C. S. Thomas, 56,750 shares; and J. W. Wagner,
136,500 shares; and all current Directors and Executive Officers as a
group, 1,370,650 shares.
<F2> Reported in this column are shares with respect to which Directors,
Nominees and Executive Officers (or their spouses or minor children) share
voting and/or investment power, including shares held jointly with others
or as co-trustee for the benefit of others and shares credited as of March
16, 1998 to the accounts of participants under the Company's Savings and
Investment Plan for Salaried Employees.
<F3> Each Director, Nominee and Executive Officer disclaims beneficial
ownership of all securities which are not held for his or her benefit.
Each of J. R. Hall, R. N. Reynolds and J. J. Sheehan also disclaims
beneficial ownership of the following shares of Common Stock of the
Company held by his wife: Mrs. J. R. Hall, 200 shares; Mrs. R. N.
Reynolds, 1,934 shares; and Mrs. J. J. Sheehan, 7,805 shares. An Executive
Officer not named in the table disclaims beneficial ownership of 164
shares of Common Stock held by his wife. All disclaimed shares are
included in the table.
<F4> Unless otherwise indicated, beneficial ownership of any named individual
does not exceed 0.1% of the outstanding shares. Shares of Common Stock
which can be acquired within 60 days after March 16, 1998 through the
exercise of stock options by a Director or Executive Officer named in the
table are deemed outstanding for the purpose of computing the percentage
of outstanding Common Stock owned by such Director or Executive Officer,
but are not deemed outstanding for the purpose of computing the percentage
of Common Stock owned by any other Director or Executive Officer.
<F5> Reported in this column are equivalent shares of common stock credited as
of March 16, 1998 to the accounts of (i) Outside Directors and Nominees
under a deferred compensation plan and a stock plan; and (ii) Executive
Officers under variable compensation and salary deferral plans and an
excess benefit plan.
<F6> The shares reported for J. J. Sheehan in this column exclude 150,000
shares of Common Stock covered by a performance-based stock option granted
to him in 1996. The option becomes exercisable only if the closing price
of the Common Stock equals or exceeds $80.25 per share for 30 consecutive
calendar days on or before September 30, 1999. If this condition is
satisfied, the option may be exercised any time between August 30, 1997
and March 31, 2000.
<F7> Mr. Wagner retired as Vice Chairman and Executive Officer of the Company
effective October 1, 1997.
</FN>
</TABLE>
Stock Ownership Guidelines
The Company has established Stock Ownership Guidelines for Outside
Directors under which each Outside Director is expected to own at least 1,500
shares of Company Common Stock (or its equivalent, including equivalent shares
of common stock under a deferred compensation plan and a stock plan). No
specific period of time is established within which the minimum level must be
reached. The Board of Directors believes it appropriate that the Committee on
Directors consider an Outside Director's failure to make reasonable progress
toward meeting the minimum level in weighing the Outside Director's
renomination to the Board. At the present time, all Outside Directors have met
the goal.
For information on Stock Ownership Guidelines for Officers, see "Report of
Compensation Committee on Executive Compensation -- Stock Ownership
Guidelines."
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Stockholders
Reynolds Metals Company
The Compensation Committee of the Board of Directors (the "Committee") has
general oversight responsibilities for compensation paid to Executive Officers.
The Company's executive compensation program is designed to help the
Company become the premier supplier of aluminum and other products in the
global markets it serves by (i) building and retaining a management team with
exceptional abilities and (ii) focusing management's attention, energy and
skill on achieving short-term business goals, securing long-term profitable
growth and building stockholder value. The key elements of the program
currently are base salary, variable compensation in the form of annual awards,
and stock option awards. Variable compensation is highly leveraged against
performance, with lower or no payments as performance drops below
preestablished goals and relatively higher payments for superior performance.
The higher the executive grade level, the greater the proportion of
compensation contingent on the accomplishment of business objectives.
The Committee meets regularly with management and periodically with an
independent compensation consultant to review the Company's executive
compensation program. In its review, the Committee compares the total
compensation of the Company's Executive Officers to that of a comparison group
of companies. The comparison group currently consists of 26 comparably sized,
capital intensive companies about which the Company's independent consultant
has comprehensive compensation data. The group includes four of the companies
in the aluminum, metals and containers industry peer group against which the
Company's stockholder return is measured in the Performance Graph on page 15.
Differences in size within the comparison group are adjusted by regression
analysis based on sales levels. The Committee believes the comparison group,
which is a more varied selection of companies than the industry peer group, is
a representative sample of types of companies which are the Company's most
direct competitors for executive talent. The Company targets individual
components of executive compensation against the comparison group but has no
specific target for total compensation.
Deductibility of Compensation. The Committee reviews, with the assistance
of appropriate corporate personnel, the impact of changes in regulatory
requirements on executive compensation. Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), limits the deductibility by the Company
of certain compensation in excess of $1 million paid to the Company's Chief
Executive Officer and the other four most highly compensated Executive
Officers. The Company's Performance Incentive Plan ("PIP") is administered so
that variable compensation paid under that plan should qualify for
deductibility. Likewise, stock option awards under the Company's nonqualified
stock option plans should qualify as performance-based compensation not subject
to the $1 million cap. All compensation paid to Executive Officers for 1997
was fully deductible, and the Company anticipates that substantially all future
compensation paid to Executive Officers should also be fully deductible.
<PAGE>
Salaries. The Company pays salaries to Executive Officers which are
targeted to be at the size-adjusted median for the comparison group. Each year
management recommends to the Committee the salaries of all Executive Officers
other than the Chief Executive Officer. The Committee makes its own assessment
of the Chief Executive Officer's salary. In its review, the Committee
considers the Executive Officer's job responsibilities and performance,
experience, the business outlook for the Company, the general state of the
economy and pay practices of the comparison group, including salary data
provided by the Company's independent compensation consultant. Based on its
review, the Committee makes recommendations to the Board as it deems
appropriate.
For 1997, salaries paid to Executive Officers as a group were
approximately 4% below the size-adjusted median for the comparison group.
Variable Compensation. Under the PIP, the Company pays Executive Officers
and other key employees awards which vary in amount from year to year, or are
not paid at all, based on performance. Except as noted below under "Stock
Ownership Guidelines", all awards are payable in cash. The Committee
establishes threshold, target and maximum award levels under the PIP to reward
performance based on corporate, business unit and individual goals.
Special provisions apply each year to awards to participants who are
designated by the Committee as "Top Executives" for that calendar year. "Top
Executives" will include the Company's Chief Executive Officer and any other
Executive Officer of the Company who may be reasonably likely to be subject to
the limitations imposed by Section 162(m) of the Code. Within 90 days of the
beginning of each calendar year, the Committee establishes (i) one or more
objective performance goals that must be reached for a Top Executive to receive
an award under the PIP and (ii) the amount of the award to be paid if the goals
are achieved. The Committee may reduce (or not pay) awards, but may not
increase them. Performance goals may be based on net earnings, stock price,
profit before taxes, return on equity, return on capital, return on assets,
total return to stockholders, earnings per share or debt rating. To allow the
Committee some discretion to reward achievement of less objective but still
important goals, the Company maintains a Supplemental Incentive Plan covering
Top Executives. Under the supplemental plan, the Committee establishes annual
performance goals different from and independent of the objective performance
goals under the PIP. The Committee establishes a performance threshold that
must be reached before any award may be paid under the supplemental plan and
maximum awards that can be paid under the supplemental plan. No awards are
payable under the supplemental plan unless the Company achieves that
performance threshold. Payments under the supplemental plan do not qualify as
"performance-based compensation" under Section 162(m) of the Code.
Two objective performance factors were established under the PIP for the
year 1997 to determine variable compensation levels. The first was return on
equity, excluding extraordinary items ("ROE"). The second was total return to
stockholders ("TSR") measured against a peer group of integrated aluminum
companies (Alcoa, Alcan, Alumax and Kaiser) over the 15-month period from
October 1, 1996 to December 31, 1997. The stock price appreciation component
was based on the average closing price for the ten trading days preceding the
beginning and the
<PAGE>
end of the period. Dividends paid during the period were also taken into
account. The period chosen covered the time from the announcement of the
Company's portfolio review program to the end of 1997.
The performance factors were weighted for participants in the PIP based on
their responsibilities. For Executive Officers, the weighting was 50% each for
ROE and TSR.
The Company exceeded the threshold target for ROE; in the case of TSR, the
Company achieved a return of 17.07%, trailing only Alcoa in the peer group (by
1.2 percentage points) and surpassing the next best performer by 18.8
percentage points. The Committee authorized payment of variable compensation
in accordance with previously determined levels based on these achievements.
Discretionary goals were also established by the Committee at the
beginning of 1997. Based on performance against these goals, including
improved safety performance, inventory reductions, and meeting international
standards organization requirements, the Committee authorized payment of
additional variable compensation. In total, performance against the objective
goals accounted for approximately 71% of the variable compensation payments to
Executive Officers and discretionary goals accounted for approximately 29%.
Stock Options. The Company maintains a nonqualified stock option plan,
under which the Committee grants annually to Executive Officers and other key
employees options to purchase Common Stock of the Company. The options provide
a long-term incentive to build the Company's businesses and align management's
objectives with Stockholders' interests by rewarding management only when
stockholder value is created. All options are exercisable no earlier than one
year or later than ten years from the date of grant at an exercise price equal
to the fair market value of the underlying Common Stock on the date of grant.
Except for required adjustments to reflect changes in the Company's capital
structure, such as stock splits, the Company has never adjusted the price nor
amended the financial terms of outstanding options. As a result, Executive
Officers cannot benefit from stock price appreciation unless Stockholders also
benefit.
Stock options are currently the Company's sole incentive tied to long-term
performance. The size of the option award granted to each Executive Officer is
generally based on a stock option grant schedule, approved by the Committee,
which allocates shares authorized for stock options to eligible employees based
on salary grade and long-term incentive compensation data provided by the
Company's independent compensation consultant. The schedule is used as a guide
for what a typical award might be for each eligible employee, including each
Executive Officer, while actual awards may vary based on the experience,
achievements and anticipated future contributions to the Company of each
individual. (The number of options and shares currently held by an optionee is
not a factor in determining individual grants.) In approving the schedule and
the size of the awards for 1997, the Committee's decisions were based on its
own judgment exercised within the framework described above, rather than on any
particular corporate performance measure. Stock option awards to Executive
Officers in 1997 averaged
<PAGE>
approximately 36% below the size-adjusted median long-term incentives for the
comparison group.
Chief Executive Officer Compensation. Compensation for the Company's
Chief Executive Officer is established in accordance with the executive
compensation philosophy and policies described above.
The Board of Directors meets after the close of each year in executive
session to review the performance of the Company generally, senior management
as a group and the Chief Executive Officer individually. The Chairman of the
Committee acts as "lead director" for this executive session.
The Chief Executive Officer's salary level is generally the result of:
(i) the salary grade level assigned to his position, which takes into account
knowledge and level of responsibility; (ii) time in his current position and
individual performance; (iii) salary data provided by the Company's independent
compensation consultant; and (iv) salary budget guidelines for the year which
take into account the business outlook for the Company. By design, the Chief
Executive Officer's salary should be at the size-adjusted median for the
comparison group, consistent with the Company's executive compensation
philosophy. Effective November 1, 1997, Mr. Sheehan received a salary increase
from $625,000 to $800,000. This increase was consistent with the Committee's
objective of bringing his salary to a competitive position within three years
of his becoming Chief Executive Officer. Even after the increase, Mr.
Sheehan's salary remained 6.3% below the size-adjusted median for the
comparison group.
The Committee authorized a variable compensation payment of $866,617 to
Mr. Sheehan for 1997, which was determined on the same basis as for other
Executive Officers.
The Committee approved a stock option grant to Mr. Sheehan of 70,000
shares, which was consistent with the scheduled amount for his salary grade
level as Chief Executive Officer.
Stock Ownership Guidelines. The Company has established Stock Ownership
Guidelines for Officers which apply to all Executive Officers. Under the
Guidelines, the following individuals are generally expected to own at least
the indicated amount of Company Common Stock (or its equivalent, including
equivalent shares of common stock under variable compensation and salary
deferral plans): the Chief Executive Officer--three times salary; any Vice
Chairman and any Executive Vice President--two times salary; and any other
officer or senior manager of the Company subject to the Guidelines--one times
salary. No specific period of time is established within which the minimum
level must be reached, although each individual subject to the Guidelines is
expected to meet the applicable minimum stock ownership level as soon as
reasonably practicable. To facilitate compliance with the Guidelines, the PIP
provides that if a participant in the PIP who is subject to the Guidelines does
not meet the applicable minimum stock ownership level as of year-end, the next
award to the participant under the PIP will be paid part in cash and part in
stock (up to one-half the value of the award but not to exceed the
participant's annual rate of base salary in effect at the time of the award).
<PAGE>
All members of the Committee except M. B. Mangum and S. Scott, who joined
the Committee effective November 1, 1997, served throughout 1997.
COMPENSATION COMMITTEE
John R. Hall, Chairman
William H. Joyce
Mylle B. Mangum
D. Larry Moore
James M. Ringler
Sam Scott
Joe B. Wyatt
February 20, 1998
Richmond, Virginia
<PAGE>
PERFORMANCE GRAPH
The graph below compares the five-year cumulative total stockholder return
on the Company's Common Stock with that of (1) the Standard & Poor's ("S&P")
500 Stock Index and (2) a peer group consisting of a composite of three S&P
published indices: (a) the Aluminum Industry Index, (b) the Metals Mining
Industry Index and (c) the Containers (Metals and Glass) Industry Index. The
indices in the composite peer group have been weighted according to their
respective stock market capitalization.
The graph assumes that $100 was invested on December 31, 1992 in each of
the Company's Common Stock, the S&P 500 Stock Index and the composite peer
group, and that all dividends were reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
COMPANY, S&P 500, AND PEER GROUP COMPARISONS
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Company $100 $ 88 $ 97 $115 $117 $127
S&P 500 100 110 112 153 189 252
Peer Group 100 106 123 144 160 138
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth for each of the last three fiscal years the
total annual and long-term compensation of the Company's Chief Executive
Officer, its other four most highly compensated Executive Officers who were
serving as Executive Officers at December 31, 1997, and J. W. Wagner, its
former Vice Chairman and Executive Officer who retired effective October 1,
1997:
<PAGE>
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
---------------------------- ------------
Awards
----------
Other Securities All
Annual Underlying Other
Name and Salary Bonus Compensation Options/SARs Compensation
Principal Position Year ($) ($)<F1> ($)<F2> (#)<F3> ($)<F4>
- --------------------------- ---- -------- ------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Jeremiah J. Sheehan,
Chairman of the Board and 1997 $654,167 $866,617 $ 5,506 70,000 shs. $76,597
Chief Executive Officer, 1996 508,750 -0- 2,148 185,000 shs.<F5> 59,709
Reynolds Metals Company 1995 423,750 510,000 494 30,000 shs. 20,284
Randolph N. Reynolds,
Vice Chairman and 1997 $433,333 $385,000 $18,321 25,000 shs. $61,653
Executive Officer, 1996 412,500 -0- 44,883 25,000 shs. 44,800
Reynolds Metals Company 1995 383,333 425,000 -0- 25,000 shs. 17,675
J. Wilt Wagner,
Vice Chairman and 1997 $400,000 $302,900 $ 1,258 25,000 shs. $47,791
Executive Officer, 1996 363,750 -0- 1,357 20,000 shs. 49,189
Reynolds Metals Company 1995 325,000 350,000 1,007 22,500 shs. 38,293
Henry S. Savedge, Jr.,
Executive Vice President 1997 $365,000 $335,500 $ -0- 20,000 shs. $64,767
and Chief Financial Officer, 1996 347,500 -0- -0- 20,000 shs. 67,149
Reynolds Metals Company 1995 325,000 350,000 -0- 20,000 shs. 40,505
Donald T. Cowles,
Senior Vice President, Global 1997 $319,208 $240,500 $ 212 12,000 shs. $34,974
Construction and Distribution, 1996 305,000 -0- 1,294 14,000 shs. 16,897
Reynolds Metals Company 1995 290,000 300,000 661 18,000 shs. 11,700
C. Stephen Thomas,
Senior Vice President, 1997 $297,167 $228,500 $ 316 10,000 shs. $33,173
Global Technology and 1996 283,333 -0- 2,197 10,500 shs. 30,455
Operational Services, 1995 263,333 235,000 2,785 10,500 shs. 18,565
Reynolds Metals Company<PAGE>
<FN>
____________
<F1> Amounts shown in this column for 1997 are cash awards granted under the
Company's Performance Incentive Plan and, in the case of Messrs. Sheehan,
Reynolds, Wagner and Savedge, Supplemental Incentive Plan.
<F2> Reported in this column for 1997 are amounts reimbursed to the named
Executive Officers for the payment of taxes.
<F3> Option awards in 1997 were granted under the Company's 1996 Nonqualified
Stock Option Plan. See the section below entitled "Stock Option Grants in
1997." None of the options has stock appreciation rights attached.
<PAGE>
<F4> Amounts shown in this column for 1997 include the following:
(a) Company contributions to the Company's Savings and Investment Plan
for Salaried Employees (the "Savings Plan") in the amount of $4,802
for J. J. Sheehan; $4,800 for R. N. Reynolds; $4,800 for J. W.
Wagner; $4,803 for H. S. Savedge, Jr.; $4,801 for D. T. Cowles; and
$4,748 for C. S. Thomas.
(b) Amounts credited as Company contributions under the Company's Benefit
Restoration Plan for the Savings Plan in the amount of $14,822 for J.
J. Sheehan; $8,200 for R. N. Reynolds; $7,200 for J. W. Wagner;
$6,153 for H. S. Savedge, Jr.; $4,779 for D. T. Cowles; and $4,172
for C. S. Thomas.
(c) Amounts paid under the Company's Financial Counseling Assistance Plan
for Officers in the amount of $8,390 for J. J. Sheehan; $14,180 for
R. N. Reynolds; $4,947 for J. W. Wagner; $3,000 for H. S. Savedge,
Jr.; $3,000 for D. T. Cowles; and $3,000 for C. S. Thomas.
(d) The present value costs of the Company's contribution toward 1997
premiums for split-dollar life insurance, above the term coverage
level provided generally to salaried employees, in the amount of
$48,583 for J. J. Sheehan; $34,473 for R. N. Reynolds; $30,450 for J.
W. Wagner; $49,873 for H. S. Savedge, Jr.; $22,019 for D. T. Cowles;
and $21,253 for C. S. Thomas. The Company pays all premiums in
excess of what the covered executive pays and retains a collateral
interest equal to this amount, which it will recover when the insured
executive reaches age 65 (or, if later, after 15 policy years). The
covered executive owns the policy and pays premiums equal to the cost
of individual term insurance.
(e) The dollar value of above-market interest earned in 1997 on deferred
compensation under the Company's New Management Incentive Deferral
Plan in the amount of $394 for J. W. Wagner; $938 for H. S. Savedge,
Jr.; and $375 for D. T. Cowles.
<F5> The stock options granted to Mr. Sheehan in 1996 included a regular grant
covering 35,000 shares and a special performance-based stock option grant
covering 150,000 shares awarded upon his election as Chief Executive
Officer.
</FN>
/TABLE
<PAGE>
Stock Option Grants in 1997
The following table sets forth information with respect to stock options
granted by the Company to each of the six named Executive Officers during 1997
and the grant-date present value of such options. The grant-date present value
is a theoretical value which is not necessarily indicative of the ultimate
value of the options to the Executive Officers. (See footnote (4) to the
table.)
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------
% of
Number of Total
Securities Options Exercise
Underlying Granted to or Base Grant-Date
Options Employees Price Per Expiration Present
Name Granted<F1> in 1997<F2> Share<F3> Date Value<F4>
---- ---------- ---------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
J. J. Sheehan....... 70,000 9.8% $63.875 2/21/2007 $1,367,100
R. N. Reynolds...... 25,000 3.5 63.875 2/21/2007 488,250
J. W. Wagner........ 25,000 3.5 63.875 2/21/2007 488,250
H. S. Savedge, Jr. . 20,000 2.8 63.875 2/21/2007 390,600
D. T. Cowles........ 12,000 1.7 63.875 2/21/2007 234,360
C. S. Thomas........ 10,000 1.4 63.875 2/21/2007 195,300
<FN>
____________
<F1> All options were granted under the Company's 1996 Nonqualified Stock
Option Plan (the "Stock Option Plan"), approved by Stockholders at the
1996 Annual Meeting. Each option entitles the optionee to purchase one
share of Common Stock from the Company, and is exercisable no earlier than
one year or
<PAGE>
later than ten years from the date of grant at an exercise price equal to
the fair market value of the underlying Common Stock on the date of grant.
The options granted in 1997 became exercisable on February 21, 1998. None
of the options has stock appreciation rights attached.
If there is a Change in Control (as defined in the Stock Option Plan) of
the Company, the Stock Option Plan provides that all options already
granted under it will become immediately exercisable thirty days after the
Change in Control occurs, unless the Compensation Committee determines
that the Change in Control presents no material risk of loss of options to
any optionee and directs that exercisability not be accelerated. The
Stock Option Plan provides that to the extent necessary to preserve the
exemption from short-swing profit liability under Section 16(b) of the
Securities Exchange Act of 1934, the date as of which options first become
exercisable by optionees who are Executive Officers or Directors may not
be accelerated to occur earlier than six months from the date of the
respective grant.
<F2> In 1997, 432 persons were granted options under the Stock Option Plan.
The grants covered an aggregate of 711,250 shares of Common Stock, which
constituted approximately 44% of the shares available for options under
the Stock Option Plan.
<F3> The exercise price may be paid by the optionee in cash, in shares of
Common Stock valued at fair market value on the date of exercise, in a
combination of such stock or cash, or by use of the Company's
broker-assisted or cashless exercise stock option financing program.
Under the financing program, a brokerage firm makes a loan to the optionee
for the payment of the option exercise price and all applicable
withholding taxes. The optionee may repay the loan by selling the
purchased shares immediately through the brokerage firm, or the loan may
remain outstanding until the shares are later sold or the optionee
otherwise repays the loan.
<F4> These values were determined using the Black-Scholes method of option
valuation, as permitted by SEC rules. The following assumptions were used
in making the calculations: (i) a risk-free interest rate of 6.4%; (ii)
a dividend yield of 2.2%; (iii) a volatility factor of the expected market
price of the Common Stock of .265; (iv) an option term of six years; and
(v) an option exercise price of $63.875 per share. The assumptions used
should not be considered indicators of future dividend policy or stock
price appreciation.
The Black-Scholes formula does not take into account, and the values shown
in the table were not adjusted for, two important aspects of options
awarded under the Stock Option Plan. First, the formula assumes that a
liquid market exists for the options; however, options awarded under the
Stock Option Plan may not be transferred. Second, it assumes that the
options may be exercised immediately; however, options awarded under the
Stock Option Plan may not be exercised earlier than one year from the date
of grant.
The ultimate value of the options will depend on the amount, if any, by
which the market price of the Common Stock at any point in time exceeds
the exercise price, and each optionee's investment decisions, neither of
which can be accurately predicted. The options had no immediate value on
the date of grant and will have no value until one year after the grant
and then only to the extent that the market price of the Common Stock
exceeds the exercise price. On March 16, 1998, the closing price of the
Company's Common Stock as reported on the New York Stock Exchange
Composite Transactions Tape was $63.125 per share.
</FN>
</TABLE>
<PAGE>
Aggregated Option Exercises in 1997 and
Option Values at December 31, 1997
The table below sets forth information with respect to options exercised
by each of the six named Executive Officers during 1997 and the number and
value of unexercised options held at the end of 1997:<PAGE>
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Number of December 31, 1997 December 31, 1997
Shares ----------------- -----------------
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized<F1> Unexercisable Unexercisable<F2>
---- ---------- ------------ ----------------- ---------------------
<S> <C> <C> <C> <C>
J. J. Sheehan........ -0- -0- 156,500 / 220,000 $1,301,750 / $-0-<F3>
R. N. Reynolds....... 16,000 $503,000 158,000 / 25,000 1,153,250 / -0-
J. W. Wagner......... 3,500 88,375 111,500 / 25,000 975,188 / -0-
H. S. Savedge, Jr. .. -0- -0- 112,750 / 20,000 1,038,906 / -0-
D. T. Cowles 6,000 199,500 96,500 / 12,000 887,188 / -0-
C. S. Thomas 27,000 541,375 46,750 / 10,000 424,281 / -0-
<FN>
____________
<F1> Based on the difference between the option exercise price and the closing price of the Company's
Common Stock on the date of exercise as reported on the New York Stock Exchange Composite
Transactions Tape.
<F2> Based on the difference between the option exercise price and the closing price of $60 per share of
the Company's Common Stock on December 31, 1997 as reported on the New York Stock Exchange
Composite Transactions Tape.
<F3> Excluded from this column is the value of 150,000 shares of Common Stock covered by a
performance-based stock option granted to J. J. Sheehan in 1996 at an exercise price of $53.50 per
share. The option becomes exercisable only if the closing price of the Common Stock equals or
exceeds $80.25 per share for 30 consecutive calendar days on or before September 30, 1999. If this
condition is satisfied, the option may be exercised any time between August 30, 1997 and March 31,
2000.
</FN>
/TABLE
<PAGE>
Pension Plan Table
The following table sets forth the total estimated annual benefits payable
under the Company's defined benefit pension plan, called the New Retirement
Program for Salaried Employees (the "New Retirement Program"), and benefit
restoration plans upon retirement to persons in specified final average
earnings and years-of-benefit-service classifications. The amounts shown are
based on the Social Security Act in effect for retirement in 1998. Such
amounts are not necessarily indicative of amounts that are or may actually
become payable.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Years of Benefit Service at Retirement<F1>
-------------------------------------------------------------------------------------
Final Average
Earnings 5 10 15 20 25 30 35 40
- ------------- -------- -------- -------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 150,000 $ 12,653 $ 25,306 $ 37,958 $ 50,611 $ 63,264 $ 69,917 $ 76,570 $ 83,222
300,000 26,153 52,306 78,458 104,611 130,764 144,917 159,070 173,222
450,000 39,653 79,306 118,958 158,611 198,264 219,917 241,570 263,222
600,000 53,153 106,306 159,458 212,611 265,764 294,917 324,070 353,222
750,000 66,653 133,306 199,958 266,611 333,264 369,917 406,570 443,222
900,000 80,153 160,306 240,458 320,611 400,764 444,917 489,070 533,222
1,050,000 93,653 187,306 280,958 374,611 468,264 519,917 571,570 623,222
1,200,000 107,153 214,306 321,458 428,611 535,764 594,917 654,070 713,222
1,350,000 120,653 241,306 361,958 482,611 603,264 669,917 736,570 803,222
1,500,000 134,153 268,306 402,458 536,611 670,764 744,917 819,070 893,222
1,650,000 147,653 295,306 442,958 590,611 738,264 819,917 901,570 983,222
1,800,000 161,153 322,306 483,458 644,611 805,764 894,917 984,070 1,073,222
1,950,000 174,653 349,306 523,958 698,611 873,264 969,917 1,066,570 1,163,222
2,100,000 188,153 376,306 564,458 752,611 940,764 1,044,917 1,149,070 1,253,222
<FN>
____________
<F1> Benefits are computed as if paid on the basis of a straight life annuity, assuming retirement at
age 65.
</FN>
</TABLE>
<PAGE>
The table below sets forth information relating to the New Retirement
Program with respect to the six Executive Officers named in the Summary
Compensation Table, assuming retirement (and eligibility for retirement) at
January 1, 1998:
<TABLE>
<CAPTION>
Final Average Years of Benefit
Name Earnings Service Completed
---- ------------- -----------------
<S> <C> <C>
J. J. Sheehan <F1>....... $641,000 10
R. N. Reynolds........... 511,000 29
J. W. Wagner <F2>........ 423,000 34
H. S. Savedge, Jr. ...... 416,000 38
D. T. Cowles............. 364,000 19
C. S. Thomas............. 338,344 35
<FN>
____________
<F1> The Company has agreed to pay J. J. Sheehan (a) certain early retirement
benefits equivalent to those he would have received from a prior employer,
if his employment with the Company is involuntarily terminated before age
65, and (b) upon his death, surviving spouse benefits equal to one-half of
any amounts payable under clause (a).
<F2> J. W. Wagner retired from the Company effective October 1, 1997.
</FN>
</TABLE>
The New Retirement Program provides participants an annual benefit upon
retirement determined under a formula which takes into account final average
earnings, years of benefit service (as defined in the New Retirement Program),
and Social Security benefits. For purposes of the New Retirement Program, a
participant's final average earnings include base salary in effect, plus profit
sharing and bonus awards, in the five consecutive calendar years for which the
average is highest during the fifteen calendar years preceding retirement. (See
the Summary Compensation Table for salary and bonus information for the six
named Executive Officers for the years 1995-1997.) Benefits calculated under
the formula are reduced by an amount based on both (a) the primary Social
Security benefit estimated to be payable upon retirement or, if later, at age
<PAGE>
65 and (b) years of benefit service. Regulations issued in 1991 to implement
the Tax Reform Act of 1986 and subsequent legislation may require the Company
to change the benefit formula from time to time. Benefits payable under the
New Retirement Program are directly offset by benefits payable to participants
from the Company's Retirement Program for Salaried Employees, which was
terminated effective August 22, 1983.
The Internal Revenue Code and the Tax Reform Act of 1986 limit
compensation that may be taken into account to calculate benefits and the
actual benefits payable under tax-qualified defined benefit plans. The Company
has nonqualified benefit restoration plans providing for the payment from
general funds of amounts otherwise payable under the New Retirement Program but
for these limitations.
Certain Arrangements
The Company has entered into severance agreements with key executives
designated by the Compensation Committee, including the Executive Officers
named in the Summary Compensation Table. Each agreement provides that
termination compensation will be paid if the executive's employment is
terminated without Cause (as defined in the agreement) by the Company or
terminated by the executive in certain circumstances, in either case within two
years after a Change in Control (as defined in the agreement). Termination
compensation includes (a) a cash payment equal to three times the sum of (i)
annual base salary at the time of termination plus (ii) the highest cash target
incentive opportunity established for the executive for 1998 or any future
calendar year, (b) a cash settlement of stock options granted under the
Company's stock option plans but not yet exercisable at the date of
termination, and (c) a cash payment to give retirement benefits equal to those
payable had the executive (i) been vested (if not already vested at the time of
termination) and (ii) worked for the Company three additional years. In
addition, each agreement provides for continuation of medical, life and
disability benefits for three years, ownership of the car assigned to the
executive at the time of termination and making the executive whole for any
applicable excise taxes as a result of payment of the termination compensation.
The Company has a New Management Incentive Deferral Plan (the "New
Deferral Plan") under which Executive Officers (including the named Executive
Officers) and other key employees who are recommended by the Chief Executive
Officer may defer receipt of up to 85% of variable compensation, if any,
otherwise payable under the Company's Performance Incentive Plan and
Supplemental Incentive Plan for services performed each year. Deferred
compensation is credited with additional income in the form of (i) interest
computed at a rate determined by the Compensation Committee for that year's
deferrals or (ii) in certain cases, a number of equivalent shares of common
stock of the Company. Deferrals must be for a period of at least five years,
except in the case of retirement. Payments will be made in a lump sum or in 5
or 10 annual installments, as elected by the participant. The New Deferral
Plan allows the Compensation Committee to accelerate payments to all
participants if it determines that (i) a major challenge to the control of the
Company exists or (ii) other extraordinary circumstances make such acceleration
in the best interest of the Company. A predecessor plan to the New Deferral
Plan, under which no further deferrals are being made, contains provisions
generally similar to those described for the New Deferral Plan.
<PAGE>
The Company also has a Salary Deferral Plan for Executives (the "Salary
Deferral Plan"). Under the Salary Deferral Plan, eligible employees whose
annual base salary exceeds the compensation that can be taken into account for
qualified pension plan purposes under the Internal Revenue Code may irrevocably
elect to defer a specified percentage of each year's base salary to the extent
the salary exceeds the statutory limit. Deferrals may be in 5% increments, up
to a maximum of 90% of salary in excess of the statutory limit. Deferred
amounts are credited with phantom earnings equal to what would be earned if the
deferred amounts were actually invested in any of the investment funds
available under the Company's Savings and Investment Plan for Salaried
Employees. Deferrals are not paid out until the participant terminates
employment and are paid in cash. Payments will begin in the first, second,
third or fourth January following the year in which the participant terminates
employment and may be in the form of either a lump sum or five annual
installments, in each case as the participant elects. The Salary Deferral Plan
also allows the Compensation Committee to accelerate payments to all
participants if it determines that (i) a major challenge to the control of the
Company exists or (ii) other extraordinary circumstances make such acceleration
in the best interest of the Company.
As described in footnote (1) to the table in the section entitled "Stock
Option Grants in 1997", the Stock Option Plan provides that under certain
circumstances the exercisability of stock options granted to optionees may be
accelerated in the event of a Change in Control of the Company.
ITEM 2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of its Audit Committee,
has selected Ernst & Young LLP as independent auditors to examine and report
upon the financial statements of the Company and its consolidated subsidiaries
for the year 1998. The Board is submitting this matter to Stockholders for
ratification. Ernst & Young LLP served as the Company's independent auditors
in 1997 and in prior years. If Stockholders do not ratify the selection of
Ernst & Young LLP, the Board will consider other independent auditors. One or
more partners of Ernst & Young LLP will be present at the Annual Meeting to
make a statement if they desire to do so and to respond to appropriate
questions that may be asked by Stockholders.
The Board of Directors of the Company recommends that Stockholders vote
FOR the ratification of the selection of Ernst & Young LLP as independent
auditors to examine and report upon the financial statements of the Company and
its consolidated subsidiaries for the year 1998. Shares represented by proxies
will be voted for approval unless instructions to the contrary are given on the
proxy.
<PAGE>
ITEM 3. STOCKHOLDER PROPOSAL
The General Board of Pension and Health Benefits of the United Methodist
Church, 1201 Davis Street, Evanston, Illinois 60201-4118, owning 79,804 shares
of Common Stock of the Company, has notified the Company that it intends to
present a resolution requesting that the Company endorse the CERES Principles.
The proposal, as submitted, reads as follows:
"RESOLUTION REQUESTING ENDORSEMENT OF THE CERES PRINCIPLES
PROPOSED FOR INTRODUCTION BY
THE GENERAL BOARD OF PENSION AND HEALTH BENEFITS
OF THE UNITED METHODIST CHURCH
AT THE 1998 ANNUAL MEETING OF REYNOLDS METALS COMPANY
WHEREAS WE BELIEVE: responsible implementation of a sound, credible
environmental policy increases long-term shareholder value by raising
efficiency, decreasing clean-up costs, reducing litigation, and enhancing
public image and product attractiveness;
Adherence to public standards for environmental performance gives a company
greater public credibility than standards created by industry alone. For
maximum credibility and usefulness, such standards should specifically meet the
concerns of investors and other stakeholders;
Companies are increasingly being expected by investors to do meaningful,
regular, comprehensive and impartial environmental reports. Standardized
environmental reports enable investors to compare performance over time. They
also attract investment from investors seeking companies which are
environmentally responsible and which minimize risk of environmental liability.
The Coalition for Environmental Responsible Economics (CERES) - which includes
shareholders of this company, public interest representatives, and
environmental experts - consulted with corporations to produce the CERES
Principles as comprehensive public standards for both environmental performance
and reporting. Scores of companies, including Bank America, Baxter
International, Bethlehem Steel, General Motors, H.B. Fuller, ITT Industries,
Pennsylvania Power and Light, Polaroid, and Sun (Sunoco) have endorsed these
principles to demonstrate their commitment to public environmental
accountability and standardized reporting. Fortune 500 endorsers say that the
benefits of working with CERES are public credibility; direct access to major
environmental and shareholder organizations, leadership in designing the
rapidly advancing standardization of environmental disclosure, and measurable
value-added for the company's environmental initiatives;
<PAGE>
<TABLE>
<CAPTION>
In endorsing the CERES Principles, a company commits to work toward:
<S> <C> <C>
1. Protection of the biosphere 4. Energy conservation 7. Environmental restoration
2. Sustainable natural resource use 5. Risk reduction 8. Informing the public
3. Waste reduction and disposal 6. Safe products / services 9. Management commitment
10. Audits and reports
/TABLE
<PAGE>
<PAGE>
(Full text of the CERES Principles and accompanying CERES Report Form
obtainable from: CERES, 711 Atlantic Avenue, Boston, MA 02110; Tel:
617-451-0927).
CERES is distinguished from other initiatives for corporate environmental
responsibility, in being (1) a successful model of shareholder relations; (2) a
leader in public accountability through standardized environmental reporting;
and (3) a catalyst for significant and measurable environmental improvement
within firms.
RESOLVED: Shareholders request the Company to endorse the CERES Principles as
a part of its commitment to be publicly accountable for its environmental
impact.
SUPPORTING STATEMENT
Many investors support this resolution. Those sponsoring similar resolutions
at various companies have portfolios totaling $75 billion. The number of
public pension funds and foundations supporting this resolution increases every
year. We believe the CERES Principles exceed the European Community regulation
for voluntary participation in verified and publicly-reported eco-management
and auditing, and that they also exceed the requirements for ISO 14000
certification. Your vote FOR this resolution will encourage scrutiny of our
Company's environmental policies and reports, and adherence to goals supported
by management and shareholders alike. We believe the CERES Principles will
protect both your investment and your environment."
Position of the Board of Directors
The Board of Directors recommends that Stockholders vote AGAINST this
proposal.
Management and the Board of Directors have carefully reviewed the CERES
Principles and do not believe adoption would help the Company better fulfill
its continuing commitment to global environmental responsibility. Social
responsibility is one of the Company's core corporate values. We seek to
practice it in all areas, with environmental compliance being one of the most
important. We recognize that good environmental management is essential to
good overall management. As in all things we do, we strive for continuous
improvement in this regard. At the same time, we are very conscious that our
environmental management practices must be value-adding for our Stockholders to
the maximum extent possible.
The Company already has adopted an environmental policy that includes a
commitment to the following principles:
* preserving health, safety and a sound environment
* operating the Company's facilities in compliance with applicable
environmental requirements
* working constructively with governmental bodies and the public to preserve
environmental resources
* monitoring the performance of the Company's operations to ensure proper
environmental performance
<PAGE>
* devoting research and technological resources to improving the environmental
performance of the Company's processes and products
* continuing the Company's efforts to minimize releases to the environment
* conducting educational and instructional programs to ensure that the
Company's employees know, understand and comply with environmental laws and
regulations
* providing public information on the Company's operations and their relation
to the environment
The Company also recognizes the importance of performance and
accountability in environmental matters. Not less than annually, the Audit
Committee of the Board of Directors, composed entirely of outside directors,
receives a presentation from the Company's chief environmental manager on the
Company's overall environmental compliance activities. The Company's
commitment to the principles summarized above, along with an ongoing program of
facility compliance assessments, and the requirement to comply with extensive
local, state, federal and foreign regulations applicable to the Company's
operations, already provide a strong basis of accountability to the public and
the Company's Stockholders.
The Board of Directors believes that implementation of the proposal,
though well-intentioned and laudable in substance, would burden the Company and
its Stockholders with additional requirements and costs while not providing any
greater environmental protection than already exists. In particular, the
Company finds the reporting requirements of the CERES Principles to be too
inflexible. The Board does not believe that adoption of another set of
principles, on top of the Company's existing environmental policy and programs,
would add value to its environmental performance. In the Board's view, the
Company's Stockholders and the environment will be best served by focusing the
Company's resources on action and results rather than re-stating principles,
debating reporting formats and duplicating effort.
Therefore, the Board of Directors recommends that Stockholders vote
AGAINST this proposal. Shares represented by proxies will be voted against
this item unless instructions to the contrary are given on the proxy.
ITEM 4. OTHER PROPOSED ACTION
The Board of Directors is not aware that any matters other than those
stated in this Proxy Statement will come before the Annual Meeting. Should any
matters requiring the vote of Stockholders arise, it is intended that shares
represented by proxies will be voted in accordance with the discretion of the
person or persons holding the proxy.
<PAGE>
GENERAL INFORMATION
Annual Report
The Annual Report of the Company containing audited financial statements
for the year 1997 is being mailed to each Stockholder with this Proxy
Statement.
Stockholders' Proposals and Nominations
Stockholders may present proposals which are proper subjects for
consideration at the 1999 Annual Meeting of Stockholders to the Company for
inclusion in its proxy materials relating to that meeting. These proposals
should be submitted in writing as specified by SEC rules to: Reynolds Metals
Company, 6601 West Broad Street, P.O. Box 27003, Richmond, Virginia 23261-7003,
Attention: Secretary. They must be received by November 18, 1998 in order to
be included in the proxy materials for the 1999 Annual Meeting.
Stockholder nominations for Directors will be considered by the Committee
on Directors if submitted in writing to the Committee on Directors, c/o
Secretary, Reynolds Metals Company, 6601 West Broad Street, P.O. Box 27003,
Richmond, Virginia 23261-7003. Nominations must include the information
specified in clauses (ii) through (v) in the following paragraph.
The Company's By-Laws require that Stockholders furnish written notice to
the Company of any business to be conducted at an annual meeting which is not
included in the Company's proxy materials or is not brought before the meeting
by or at the direction of the Board of Directors or the officer presiding over
the meeting. Such notice must contain the following information: (i) a full
description of each item of business proposed to be brought before the meeting;
(ii) the name and address of the person proposing such business (or nominating
a Nominee for Director); (iii) the class and number of shares held of record,
held beneficially and represented by proxy by such person as of the record date
for the meeting (if publicly available) and as of the date of such notice; (iv)
if any item of such business involves a nomination for Director, all
information regarding each such Nominee that would be required to be set forth
in a definitive proxy statement filed with the SEC under SEC rules, and the
written consent of each such Nominee; and (v) all other information that would
be required to be filed with the SEC if, with respect to such business, the
person were a participant in a solicitation subject to Section 14 of the
Securities Exchange Act of 1934. Notice of business to be brought before the
1999 Annual Meeting must be received by the Secretary of the Company at the
above address not later than February 19, 1999.
A copy of the By-Law provisions referred to above may be obtained, without
charge, upon written request to the Secretary.
DONNA C. DABNEY
Secretary
March 18, 1998
Richmond, Virginia
<PAGE>
- ------------------------------------------------------------------------------
Notice of
Annual Meeting
of Stockholders
May 14, 1998
and
Proxy Statement
(Reynolds logo)
- ------------------------------------------------------------------------------
<PAGE>
APPENDIX A
REYNOLDS METALS COMPANY
Proxy Solicited by the Board of Directors
for Annual Meeting of Stockholders
May 14, 1998
The undersigned appoints Jeremiah J. Sheehan, D. Michael Jones and Donna
C. Dabney, and each of them, proxies, with full power of substitution, to vote
the shares of Common Stock of Reynolds Metals Company which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be
held at the Company's offices, 6601 West Broad Street, Richmond, Virginia, on
Thursday, May 14, 1998 at 4:00 P.M. (Eastern Daylight Time), and at any
adjournments thereof. The undersigned hereby confer(s) upon the proxies and
each of them authority to vote for a substitute Nominee or substitute Nominees
designated by the Board of Directors with respect to the election of Directors
if any Nominee is unavailable to serve for any reason if elected.
For participants in the Company's Savings and Investment Plan for Salaried
Employees, Savings Plan for Hourly Employees and/or Employees Savings Plan,
this card also provides voting instructions to the respective trustees under
such plans for the undersigned's allocable portion, if any, of the total number
of shares of Common Stock of the Company held by such plans as indicated on the
reverse side. (Note: The number of plan shares indicated on the reverse side
may not be the same as the number of shares shown on the undersigned's last
account statement(s) from the plans due to the use of different valuation dates
and/or accounting methods.) These voting instructions are solicited and will
be carried out in accordance with the applicable provisions of such plans.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. THE
SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH ANY CHOICE SPECIFIED
BY THE STOCKHOLDER; WHERE THERE IS NO CHOICE, SUCH SHARES WILL BE VOTED IN
FAVOR OF ITEMS 1 AND 2 AND AGAINST ITEM 3.
(continued and to be SIGNED on the Reverse Side)
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark your
votes as indicated ___
in this example /_X_/
The Board of Directors recommends a vote FOR Items 1 and 2 and AGAINST Item 3.
Item 1 - Election of Directors:
FOR all Nominees - Patricia C. Barron, John R. Hall,
Nominees Robert L. Hintz, William H. Joyce, Mylle Bell Mangum,
(except as WITHHOLD D. Larry Moore, Randolph N. Reynolds,
withheld AUTHORITY James M. Ringler, Samuel C. Scott, III,
in the to Vote Jeremiah J. Sheehan, Joe B. Wyatt
space for all
provided) Nominees (To withhold authority to vote for any individual
___ ___ Nominee, write that Nominee's name in the space
/___/ /___/ provided below.)
______________________________________________________
Item 2 Item 3
Ratification of Stockholder proposal requesting endorsement of
Selection of Ernst & the CERES Principles
Young LLP as
Independent Auditors
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
___ ___ ___ ___ ___ ___
/___/ /___/ /___/ /___/ /___/ /___/
Item 4
In their discretion the
proxies are authorized ___
to vote upon such other I WILL ATTEND THE ANNUAL MEETING /___/
matters as may properly
come before the Annual
Meeting.
Signature____________________Signature_______________________Date ____________
Please mark, date and sign as your name appears above and return in the
enclosed envelope. If signing as attorney, executor, administrator, trustee,
guardian or in another representative capacity, please give your full title as
such. If the signer is a corporation, sign the full corporate name by a duly
authorized officer.
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
Dear Stockholder:
Enclosed are materials relating to Reynolds Metals Company's 1998 Annual
Meeting of Stockholders to be held Thursday, May 14, 1998, at 4:00 p.m.,
Eastern Daylight Time. The Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the Meeting.
Your vote is important to us. Whether or not you expect to attend the
Annual Meeting, please complete, sign and return BEFORE THE MEETING ON MAY 14,
1998 the attached proxy card in the accompanying envelope, which requires no
postage if mailed in the United States.
If you plan to attend the Annual Meeting, please mark the attendance box
on the proxy card.
REYNOLDS METALS COMPANY
