As filed with the Securities and Exchange Commission on May 24, 1999
Registration No. 333-________
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------
REYNOLDS METALS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 54-0355135
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
6601 West Broad Street, Richmond, VA 23230
(Address of principal executive offices, including zip code)
--------
REYNOLDS METALS COMPANY
1999 NONQUALIFIED STOCK OPTION PLAN
(Full title of plan)
--------
D. MICHAEL JONES, ESQ., Senior Vice President and General Counsel
and
BRENDA A. HART, ESQ., Chief Securities/Finance Counsel and Assistant Secretary
Reynolds Metals Company
6601 West Broad Street, Richmond, VA 23230
(804) 281-2000
(Names, addresses and telephone numbers, including area code,
of agents for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to to be price per offering registration
be registered registered share<FN*> price<FN*> fee<FN*>
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 2,250,000 $62.40625 $140,414,062.50 $39,305.11
without par value shares
==============================================================================
<FN>
<FN*> In accordance with Rule 457(h)(1) under the Securities Act of 1933,
the aggregate offering price and registration fee are computed on the basis of
a price per share based, pursuant to Rule 457(c), on the average of the high
and low prices of the Common Stock as reported on the New York Stock Exchange
Composite Transactions Tape on May 19, 1999.
</FN>
</TABLE>
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEMS 1 AND 2.
The document(s) containing the information specified in this
Part I will be sent or given to employees as specified by Rule 428(b)(1).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (the "Exchange Act") are incorporated
herein by reference:
(1) The Annual Report of Reynolds Metals Company (the "Company" or the
"Registrant") on Form 10-K for the year ended December 31, 1998.
(2) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since December 31, 1998.
(3) The description of the Company's Common Stock set forth in Exhibit 99
to the Company's Form 10-Q Report for the Quarter Ended March 31, 1999.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-
effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
The consolidated financial statements of the Company appearing in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1998, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers the Company to indemnify any 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 by reason of the fact that such person is or was a director,
officer, employee or agent of the Company or is or was serving at the request
of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred 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 Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful,
except that, in the case of an action or suit by or in the right of the
Company, no indemnification may be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Company unless the Court of Chancery or the court in which such action or suit
was brought shall determine that such person is fairly and reasonably entitled
to indemnity for proper expenses. Article X of the By-Laws of the Company
incorporates substantially the provisions of Section 145 of the General
Corporation Law of the State of Delaware and requires the Company to indemnify
any director, officer or employee of the Company to the full extent of its
powers as described above. The Company has also entered into indemnification
agreements with each of its directors and officers. The rights conferred
thereunder include the indemnification rights under Article X of the
Company's By-Laws. In addition, the agreements provide, among other
things, for indemnification coverage as a non-party participant in a covered
proceeding, indemnification of expenses incurred as a witness, payment of
expenses incurred in enforcing the agreement, and contribution rights
(to the extent permitted by law) in circumstances where indemnification
is not available; and require the Company to observe specified procedures,
within set time limits, when indemnification or advancement of expenses is
requested. Article XI of the Company's Restated Certificate of Incorporation
limits the personal liability of directors to the Company or its
shareholders for monetary damages for certain breaches of fiduciary duty.
The Company has placed in effect insurance indemnifying against certain
liabilities that could arise from acts (or omissions to act) of its officers
and directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
*4.1 Restated Certificate of Incorporation, as amended to the date hereof.
(File No. 001-01430, 1998 Form 10-K Report, EXHIBIT 3.1)
4.2 Form of Common Stock Certificate.
*4.3 By-Laws, as amended to the date hereof. (File No. 001-01430, 1998 Form 10-
K Report, EXHIBIT 3.2)
*4.4 Rights Agreement dated as of March 8, 1999, between Reynolds Metals
Company and ChaseMellon Shareholder Services, L.L.C. (File No. 001-01430,
Form 8-K Report dated March 8, 1999, pertaining to preferred stock
purchase rights, Exhibit 4.1)
4.5 Reynolds Metals Company 1999 Nonqualified Stock Option Plan
23 Consent of Ernst & Young LLP
*24 Powers of Attorney. (File No. 001-01430, 1998 Form 10-K Report, Exhibit
24)
_____________
* Incorporated by reference.
3
<PAGE> 4
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the change in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions referred to in Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
4
<PAGE> 5
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the County of Henrico, Commonwealth of Virginia,
on this 24th day of May, 1999.
REYNOLDS METALS COMPANY
By /s/ Jeremiah J. Sheehan
-------------------------------------
Jeremiah J. Sheehan, Chairman of
the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated, on May 24, 1999.
By /s/ William E. Leahey, Jr. By /s/ Jeremiah J. Sheehan
-------------------------------- -----------------------------
William E. Leahey, Jr., Jeremiah J. Sheehan, Director,
Executive Vice President and Chairman of the Board and Chief
Chief Financial Officer Executive Officer
(Principal Financial Officer) (Principal Executive Officer)
By *Patricia C. Barron By *John R. Hall
-------------------------------- -----------------------------
Patricia C. Barron, Director John R. Hall, Director
By *Robert L. Hintz By *William H. Joyce
-------------------------------- -----------------------------
Robert L. Hintz, Director William H. Joyce, Director
By *Mylle Bell Mangum By *D. Larry Moore
-------------------------------- -----------------------------
Mylle Bell Mangum, Director D. Larry Moore, Director
By /s/ Randolph N. Reynolds By *James M. Ringler
-------------------------------- -----------------------------
Randolph N. Reynolds, Director James M. Ringler, Director
By *Samuel C. Scott, III By *Joe B. Wyatt
-------------------------------- -----------------------------
Samuel C. Scott, III, Director Joe B. Wyatt, Director
*By: /s/ Brenda A. Hart By /s/ Allen M. Earhart
-------------------------------- -----------------------------
Brenda A. Hart, Attorney-in-Fact Allen M. Earehart,
Senior Vice President and
Controller
(Principal Accounting Officer)
5
<PAGE> 6
EXHIBIT INDEX
(Attached herewith are Exhibits 4.2, 4.5 and 23)
EXHIBIT NO. DESCRIPTION OF EXHIBIT
*4.1 Restated Certificate of Incorporation, as amended to the date hereof.
(File No. 001-01430, 1998 Form 10-K Report, EXHIBIT 3.1)
4.2 Form of Common Stock Certificate.
*4.3 By-Laws, as amended to the date hereof. (File No. 001-01430, 1998
Form 10-K Report, EXHIBIT 3.2)
*4.4 Rights Agreement dated as of March 8, 1999, between Reynolds Metals
Company and ChaseMellon Shareholder Services, L.L.C. (File No. 001-
01430, Form 8-K Report dated March 8, 1999, pertaining to preferred
stock purchase rights, Exhibit 4.1)
4.5 Reynolds Metals Company 1999 Nonqualified Stock Option Plan
23 Consent of Ernst & Young LLP
*24 Powers of Attorney. (File No. 001-01430, 1998 Form 10-K Report,
Exhibit 24)
____________
* Incorporated by reference.
6
EXHIBIT 4.2
CERTIFICATE NUMBER OF
NUMBER SHARES
REYNOLDS METALS COMPANY
Incorporated Under the Laws of the State of Delaware
CUSIP ___________
See reverse for
certain definitions
This is to certify that _________________________________
___________________________________________ is the owner of
_______________ fully paid and non-assessable shares of Common
Stock without par value of Reynolds Metals Company (the
"Corporation"), transferable on the books of the Corporation
by the holder hereof in person or by duly authorized attorney
upon surrender of this certificate properly endorsed. This
certificate and the shares represented hereby are issued and
shall be held subject to all the provisions of the Certificate of
Incorporation, as amended, of the Corporation (a copy of which is
on file with the Transfer Agent), to all of which the holder by
acceptance hereof assents. This certificate is not valid until
countersigned by the Transfer Agent and registered by the
Registrar.
WITNESS the seal of the Corporation and the signatures of
its duly authorized officers.
Dated:___________________
_________________________ ____________________________
Secretary and Assistant Chairman of the Board
General Counsel and Chief Executive Officer
[SEAL]
Countersigned and Registered:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Transfer Agent and Registrar
By:____________________________
Authorized Signature
<PAGE>
REYNOLDS METALS COMPANY
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH
STOCKHOLDER WHO SO REQUESTS A COPY OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF,
WHICH THE CORPORATION IS AUTHORIZED TO ISSUE, AND THE
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES
AND/OR RIGHTS. ANY SUCH REQUEST MAY BE MADE TO THE CORPORATION
OR THE TRANSFER AGENT.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COMM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - ............Custodian..........
(Cust) (Minor)
under Uniform Gifts to Minors
Act..........................
(State)
Additional abbreviations may also be used though not in the
above list.
For Value Received __________________________________________
_______________________ hereby sell, assign and transfer unto
_____________________________________________________________
[please print or typewrite name and address including postal zip code of
assignee]
___________ Shares of the capital stock represented by the within
Certificate, and do hereby irrevocably constitute and appoint
_________________ Attorney to transfer the said stock on the
books of the within-named Corporation with full power of
substitution in the premises.
Dated: _______________
__________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY
PARTICULAR.
By ______________________
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Reynolds Metals Company and The Chase Manhattan Bank,
N.A., dated as of December 1, 1997 (as amended from time to
time, the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal offices of Reynolds Metals Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Rights will expire
at the close of business on December 1, 2007 unless exercised or
redeemed prior thereto. Reynolds Metals Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become
null and void.
EXHIBIT 4.5
REYNOLDS METALS COMPANY
1999 NONQUALIFIED STOCK OPTION PLAN
Effective May 20, 1999
<PAGE> 1
ARTICLE I
DEFINITIONS
1.01 "Board" means the Board of Directors of the
Company.
1.02 "Code" means the Internal Revenue Code of 1986,
as amended from time to time.
1.03 "Committee" means the Committee established under
Section 3.01 to administer the Plan.
1.04 "Company" means Reynolds Metals Company, a
Delaware corporation.
1.05 "Company Stock" means common stock of the Company
or other stock and securities substituted for common stock under
Section 6.02.
1.06 "Eligible Employee" means any officer or regular
salaried employee of the Company or a Subsidiary who satisfies
all of the requirements of Section 2.02.
1.07 "Fair Market Value" means the closing price of
Company Stock (a) as reported on New York Stock Exchange-
Composite Transactions (or other appropriate reporting vehicle as
determined by the Committee) for a specified date or (b) if no
such report is available, the closing price of Company Stock for
the next preceding day on which Company Stock was traded and for
which such report is available.
1.08 "Grantee" means any person who has been granted a
stock option, either with or without related stock appreciation
rights, under the Plan.
- 1 -
<PAGE> 2
1.09 "Option Period" means the period of time provided
under Section 4.03 within which a stock option may be exercised.
1.10 "Plan" means the Reynolds Metals Company 1999
Nonqualified Stock Option Plan, as amended from time to time.
1.11 "Stockholder Approval" means approval by the
affirmative vote of stockholders of the Company present in person
or by proxy and entitled to vote representing a majority of the
votes cast on the matter at an annual or special meeting of
stockholders at which a quorum is present.
1.12 "Subsidiary" means any corporation or other
entity in which the Company owns, directly or indirectly, a
voting stock interest (or its equivalent) of more than fifty
percent (50%).
1.13 "1934 Act" means the Securities Exchange Act of
1934, as amended from time to time.
- 2 -
<PAGE> 3
ARTICLE II
PARTICIPATION
2.01 Purpose. The purpose of the Plan is to further
the growth and success of the Company and its Subsidiaries by
providing key officers and employees with additional incentive to
contribute to such growth and success and by aiding the Company
in attracting and retaining key officers and employees.
2.02 Eligibility. Key officers and employees of the
Company and its Subsidiaries (including officers and employees
who may be members of the Board) who, in the sole opinion of the
Committee, contribute significantly to the growth and success of
the Company or a Subsidiary are eligible for options to purchase
Company Stock and related stock appreciation rights under the
Plan. From among all such Eligible Employees, the Committee will
determine from time to time those to whom options and related
stock appreciation rights, if any, will be granted. No Eligible
Employee has any right to receive options or stock appreciation
rights unless so determined by the Committee.
2.03 No Employment Rights. The Plan does not confer
any rights upon any person for continued employment, nor does it
interfere with the rights of the Company or any Subsidiary to
terminate such person's employment or to take any other action
affecting such person.
- 3 -
<PAGE> 4
ARTICLE III
COMMITTEE
3.01 Administration. The Plan will be administered by
a Committee of at least three (3) persons, all of whom must be
members of the Board, designated from time to time by the Board.
The Board shall appoint one member of the Committee to act as
Chairman. Vacancies shall be filled in the same manner as
original appointments. The Committee shall hold meetings upon
such notice and at such place or places, and at such time or
times as it may from time to time determine. A majority of the
members of the Committee at the time in office shall constitute a
quorum for the transaction of business, and the acts of a
majority of the members participating in any meeting at which a
quorum is present shall be the acts of the Committee. The
Committee may act without a meeting if a consent in writing
setting forth the action so taken shall be signed by all of the
members of the Committee and filed with the minutes of the
Committee. As of any time the Committee exercises its discretion
in administering the Plan, all of the members of the Committee
must be "Non-Employee Directors" as contemplated by Rule l6b-3,
as in effect at such time, under the 1934 Act.
3.02 Authority of Committee. Subject to the
provisions of the Plan, the Committee has full and final
authority to determine:
(a) the persons to whom options are granted,
- 4 -
<PAGE> 5
(b) the number of shares to be included in each
option,
(c) the price at which the shares included in each
option may be purchased,
(d) the Option Period or Periods, and
(e) the stock appreciation rights, if any, related to
each option.
No Grantee may be awarded options to purchase in the aggregate
more than seven hundred fifty thousand (750,000) shares of
Company Stock under the Plan; this limit applies regardless of
whether the options lapse or are terminated or surrendered. The
Committee is empowered, in its discretion, (i) to modify, extend
or renew any option or stock appreciation right previously
granted, subject to the limitations in Articles IV and V, and
(ii) to adopt such rules and regulations and take such other
action as it considers necessary or proper for the administration
of the Plan; provided, however, that except to the extent
provided under Section 6.02, the Committee does not have the
power to reprice options or stock appreciation rights previously
granted under the Plan. The Committee has authority to interpret
the Plan, and the Committee's decision on any questions
concerning the interpretation of the Plan is final and
conclusive. The Committee may consult with counsel, who may be
counsel for the Company, and will not be liable for any action
taken in good faith in reliance upon the advice of counsel.
3.03 1934 Act Compliance. Anything in the Plan to the
contrary notwithstanding, the Committee also has the authority at
- 5 -
<PAGE> 6
any time to impose any rules and regulations that may be
necessary to ensure that a grant or exercise of an option or
stock appreciation right will not trigger liability under Section
16(b) of the 1934 Act.
- 6 -
<PAGE> 7
ARTICLE IV
TERMS OF OPTIONS
4.01 General. Grants of options do not require the
payment of a purchase price by any Grantee. Each option granted
under the Plan will be evidenced by a stock option agreement
between the Company and the Grantee containing the terms and
conditions required by this Article IV and such other terms and
conditions consistent with this Article IV as the Committee
considers appropriate.
4.02 Option Price. The price at which each share of
Company Stock covered by an option may be purchased must be
determined in each case by the Committee and set forth in a stock
option agreement. Such price must not be less than the Fair
Market Value of Company Stock on the date the option is granted.
4.03 Period for Exercise. Each stock option agreement
must state the period or periods of time within which the option
may be exercised by the Grantee, in whole or in part, as
determined by the Committee, provided that:
(a) No option may be exercised within one year from
the date the option is granted;
(b) No Option Period may exceed ten years from the
date the option is granted;
(c) If the Grantee's employment by the Company and
its Subsidiaries terminates because of the Grantee's
retirement or disability, or for any other reason the
Committee approves, any option outstanding and exercisable
- 7 -
<PAGE> 8
as of the date of termination (and, in the Committee's sole
discretion, any option outstanding but not yet exercisable
as of such date) may be exercised by the Grantee following
the date of termination in accordance with the terms of the
applicable stock option agreement;
(d) If the Grantee dies during the Option Period, any
outstanding and exercisable option may be exercised in
accordance with the terms of the applicable stock option
agreement by the person or persons entitled to do so under
the Grantee's last will and testament, or if the Grantee has
not made a testamentary disposition of the option or dies
intestate, by the person or persons entitled to receive the
option under the intestate laws; and
(e) If the Grantee's employment by the Company and
its Subsidiaries terminates for reasons other than death,
retirement, disability, or other reasons approved by the
Committee under subsection (c) above, then any outstanding
option terminates immediately and is not exercisable by the
Grantee or any other person.
4.04 Exercise of Option. Subject to Section 4.03,
each option may be exercised in whole or in part from time to
time as specified in the stock option agreement. Each Grantee
may exercise an option by giving written notice of the exercise
to the Company, specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price for such
shares. If required, the Grantee must also pay an amount equal
to the applicable withholding taxes as soon as administratively
- 8 -
<PAGE> 9
feasible. The purchase price may be paid in cash; by check; with
the approval of the Committee, in shares of Company Stock having
at the time the option is exercised an aggregate Fair Market
Value equal to the purchase price of the shares acquired on
exercise; or a combination. Likewise, the applicable withholding
taxes may be paid in cash; by check; with the approval of the
Committee, in shares of Company Stock (including shares received
from the exercise of the option) having at the time the option is
exercised an aggregate Fair Market Value equal to the withholding
taxes; or a combination. A Grantee may also exercise an option
by way of the Company's broker-assisted stock option exercise
program, if such program is available to the Grantee at the time
of the option's exercise. An option becomes nonexercisable and
is treated as voluntarily surrendered to the extent that any
related stock appreciation right is exercised. No Grantee is
under any obligation to exercise any option. Grantees may
exercise options or not at their sole discretion.
4.05 Date Option Granted. For purposes of the Plan, a
stock option is considered as having been granted on the date on
which the Committee authorizes the grant, unless the Committee
designates a later date, in which case the later date is the date
of grant. Notice of the grant of an option will be given to the
employee within a reasonable time.
4.06 No Incentive Stock Options. No option granted
under the Plan is, or is to be treated as, an "incentive stock
option" for purposes of Sections 421 and 422 of the Code.
- 9 -
<PAGE> 10
ARTICLE V
STOCK APPRECIATION RIGHTS
5.01 General. Each stock appreciation right granted
under the Plan will be evidenced by a stock appreciation right
agreement between the Company and the Grantee containing the
terms and conditions required by this Article V and such other
terms and conditions consistent with this Article V as the
Committee considers appropriate. Each stock appreciation right
will relate to a specific option granted under the Plan and will
be granted to the Grantee either concurrently with the grant of
the option or at a later time as determined by the Committee;
provided, however, that the grant of a stock appreciation right
does not otherwise change the terms of the underlying option. A
stock appreciation right entitles a Grantee to receive a number
of shares of Company Stock (without payment to the Company,
except for applicable withholding taxes), cash, or shares and
cash, as determined by the Committee in accordance with this
Article V.
5.02 Number of Shares or Amount of Cash. Unless
otherwise determined by the Committee, in its sole discretion,
and provided in the stock appreciation right agreement, the
number of shares issued upon the exercise of a right shall be
determined by dividing:
(a) that portion, as elected by the Grantee in the
notice of exercise, of the total number of shares of Company
Stock (i) which the Grantee is eligible to purchase as of
- 10 -
<PAGE> 11
the exercise date under the related option and (ii) as to
which stock appreciation rights have been granted, but not
exercised, multiplied by the amount (if any) by which the
Fair Market Value of Company Stock on the exercise date
exceeds the price per share at which the related option
could have been exercised on the exercise date, by
(b) the Fair Market Value of Company Stock on the
exercise date;
provided, however, that fractional shares will not be issued.
Instead, a cash adjustment equal to the same fraction of the Fair
Market Value of Company Stock on the exercise date will be paid
to the Grantee. Instead of issuing Company Stock on the exercise
of a right, the Committee, in its sole discretion, may elect to
pay the cash equivalent of the Fair Market Value on the exercise
date of any or all of the shares of Company Stock which would
otherwise be issuable upon exercise of the right.
5.03 Exercise. Each stock appreciation right may be
exercised in whole or in part from time to time, only to the
extent that the option to which it relates is exercisable and as
permitted by the applicable stock appreciation right agreement;
provided, however, that no stock appreciation right may be
exercised until the expiration of six months from the date of its
grant. Each Grantee may exercise a stock appreciation right by
giving written notice to the Company, specifying the number of
shares as to which such right is being exercised, accompanied by
an amount equal to the applicable withholding taxes, if
necessary. The date the Company receives the written notice is
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<PAGE> 12
the "exercise date." No Grantee is under any obligation to
exercise any stock appreciation right. Grantees may exercise
rights or not in their sole discretion. A stock appreciation
right will become nonexercisable and will be forfeited to the
extent that the related option is exercised.
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<PAGE> 13
ARTICLE VI
COMPANY STOCK
6.01 Number of Shares. The aggregate number of shares
of Company Stock that may be sold or delivered under the Plan
shall not exceed two million two hundred fifty thousand
(2,250,000) shares. Shares of Company Stock sold or delivered
under the Plan may be authorized but unissued shares, treasury
shares, or a combination, as the Board may from time to time
determine. Shares of Company Stock no longer available for
purchase under the Plan by virtue of the total or partial
expiration or termination of an option and any related stock
appreciation right will continue to be otherwise available for
the purposes of the Plan. Upon surrender of any portion of an
option in connection with the exercise of the related stock
appreciation right, the number of shares of Company Stock subject
to the surrendered portion of the option (and not the number of
shares, if any, issued upon the exercise of the related stock
appreciation rights) will be charged against the maximum number
of shares of Company Stock issuable under the Plan, and such
number of shares of Company Stock will not be available for
future options and/or stock appreciation rights.
6.02 Recapitalization. If any stock dividend is
declared upon Company Stock, or if there is any stock split,
stock distribution, or other recapitalization with respect to
Company Stock, resulting in a split-up, combination or exchange
of shares, or if any special distribution is made to holders of
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<PAGE> 14
Company Stock, the aggregate number and kind of shares offered
under the Plan will be proportionately and appropriately adjusted
and the number and kind of shares then subject to options granted
under the Plan and the per share option price will be
proportionately and appropriately adjusted, without any change in
the aggregate purchase prices to be paid, all as the Committee
determines is appropriate. Such adjusted option price and number
and kinds of shares will also be used to determine the amount
payable by the Company upon the exercise of any stock
appreciation rights associated with any such option as set forth
in Article V. If the Company is merged or consolidated with or
into another corporation or entity, or substantially all of its
assets are sold to another corporation or entity, appropriate
provisions will be made for the protection and continuation of
any outstanding options and stock appreciation rights by the
substitution, on an equitable basis, of appropriate stock or
other securities of the surviving or purchasing or new parent
corporation or entity.
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<PAGE> 15
ARTICLE VII
GENERAL
7.01 Nontransferability. Except as otherwise
specifically determined by the Committee, (a) no option or stock
appreciation right granted under the Plan may be transferred or
assigned except by the Grantee's last will and testament or the
laws of descent and distribution, and (b) during the Grantee's
lifetime, options and stock appreciation rights may be exercised
only by the Grantee or by the Grantee's guardian or legal
representative.
7.02 General Restriction. Each option and each stock
appreciation right is subject to the requirement that if at any
time the Board or the Committee determines, in its discretion,
that the listing, registration, or qualification of securities
upon any securities exchange or under any state, federal or other
applicable law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or
in connection with, the granting of such option or right or the
issue or purchase of securities under the Plan, such option or
right may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions not acceptable
to the Board or the Committee.
7.03 No Rights as Stockholder. The holders of options
or stock appreciation rights have no rights as a stockholder
unless and until they are issued shares of stock under the Plan.
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<PAGE> 16
7.04 Effective Date and Duration of Plan. The Plan
shall become effective May 20, 1999, subject to Stockholder
Approval. No stock options may be granted under the Plan after
December 31, 2003.
7.05 Amendments. The Board may from time to time
amend, modify, suspend or terminate the Plan; provided, however,
that no such action may (a) except as provided in Section 3.03,
impair without the Grantee's consent any option or stock
appreciation right previously granted under the Plan or deprive
any Grantee of any shares of Company Stock acquired under the
Plan or (b) be made without Stockholder Approval if such change
would (i) increase the total number of shares that may be issued
under the Plan (other than as provided in Section 6.02), (ii)
permit repricing of options, or (iii) permit options to be
granted for less than Fair Market Value. Anything in the Plan to
the contrary notwithstanding, at any time before a Change in
Control (as defined in Section 7.07(b)) occurs, the Board may
amend Section 7.07(b)(i) to change the percentage referred to
therein to a percentage that is not more than 25%, so long as
such change is consistent with contemporaneous change of a
similar nature in the Rights Agreement (as defined in Section
7.07(b)(vi)).
7.06 Construction. Except as otherwise required by
applicable federal laws, the Plan will be governed by, and
construed in accordance with, the laws of the Commonwealth of
Virginia.
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<PAGE> 17
7.07 Change in Control. (a) Anything in the Plan to
the contrary notwithstanding, if there is a Change in Control of
the Company (as defined below), all options and stock
appreciation rights already granted under this Plan will become
immediately exercisable; provided that to the extent necessary to
be exempt from Section 16(b) of the 1934 Act, the date as of
which options and stock appreciation rights first become
exercisable pursuant to this Section 7.07 by grantees who are
officers or directors of the Company may in no event be earlier
than six (6) months from the date the option or stock
appreciation right is granted.
(b) For purposes of this Section 7.07, "Change in
Control" shall mean the occurrence of any of the following:
(i) Any Person (as defined below) becomes
the Beneficial Owner (as defined below), directly or
indirectly, of 15% or more of the Company's common
stock, unless such Person (A) is not deemed an
"Acquiring Person" in accordance with Section 1(a) of
the Rights Agreement or (B) became a Beneficial Owner
of 15% or more of the Company's common stock in a
transaction that did not constitute a Change in Control
under Section 7.07(b)(iii);
(ii) During any period of two consecutive
years, individuals who at the beginning of such period
constitute the Board, and any new director (other than
a director designated by a person who has entered into
an agreement with the Company to effect a transaction
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<PAGE> 18
described in Sections 7.07(b)(i), (iii) or (iv)) whose
election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at
least two-thirds of the directors then still in office
who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to
constitute a least a majority of the members of the
Board;
(iii) The effective date of a merger or
consolidation of the Company with any other entity,
other than a merger or consolidation which would result
in the voting securities of the Company outstanding
immediately before such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity or of any other
corporation or entity that as a result of such
transaction owns the Company or all or substantially
all of the assets of the Company, either directly or
through one or more subsidiaries (a "parent entity"))
more than 51% of the combined voting power of the
voting securities of the parent or surviving entity
outstanding immediately after such merger or
consolidation and with the power to elect at least a
majority of the board of directors or other governing
body of such parent or surviving entity;
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<PAGE> 19
(iv) The approval by the shareholders of the
Company of a complete liquidation of the Company or an
agreement for the sale or disposition by the Company of
all or substantially all of the Company's assets; and
(v) There occurs any other event of a nature
that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or
form) under the 1934 Act, whether or not the Company is
then subject to such reporting requirement.
(vi) Certain Definitions. For purposes of
this Section 7.07(b), the following terms shall have
the following meanings:
(A) "Person" shall have the meaning as set
forth in Sections 13(d) and 14(d) of the 1934 Act;
provided, however, that Person shall exclude (i)
the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan
of the Company, and (iii) any corporation owned,
directly or indirectly, by the shareholders of the
Company in substantially the same proportions as
their ownership of stock of the Company.
(B) "Beneficial Owner" shall have the
meaning given to such term in Rule 13d-3 under the
1934 Act; provided, however, that Beneficial Owner
shall exclude any Person otherwise becoming a
Beneficial Owner by reason of the shareholders of
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<PAGE> 20
the Company approving a merger of the Company with
another entity.
(C) "Rights Agreement" shall mean the
Amended and Restated Rights Agreement dated as of
March 8, 1999 between the Company and ChaseMellon
Shareholder Services, L.L.C., as initially in
effect.
Executed and adopted this ____ day of May, 1999, in
accordance with action taken by the Board of Directors of
Reynolds Metals Company at its meeting on February 19, 1999, and
by Stockholders at the Annual Meeting on May 20, 1999.
REYNOLDS METALS COMPANY
By:_______________________________
Vice President, Human Resources
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Exhibit 23
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) and related Prospectus pertaining to the
Reynolds Metals Company 1999 Nonqualified Stock Option Plan and to the
incorporation by reference therein of our report dated February 19, 1999, with
respect to the consolidated financial statements of Reynolds Metals Company
included in its Annual Report (Form 10-K) for the year ended December 31,
1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
May 21, 1999
