-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fPO5vFRSuyEz2jfoMz8cvhEHKTuzwJx5KrP0vKrjvx8/7Ja8PVbczYsxVmBkrn5U Gui5550P6MiWOWn0Q3mjXA== 0000083604-95-000006.txt : 19950609 0000083604-95-000006.hdr.sgml : 19950609 ACCESSION NUMBER: 0000083604-95-000006 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950306 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REYNOLDS METALS CO CENTRAL INDEX KEY: 0000083604 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY PRODUCTION OF ALUMINUM [3334] IRS NUMBER: 540355135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-01430 FILM NUMBER: 95518711 BUSINESS ADDRESS: STREET 1: 6601 W BROAD ST STREET 2: PO BOX 27003 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8042812000 10-K405 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1994 Commission File Number 1-1430 REYNOLDS METALS COMPANY A Delaware Corporation (IRS Employer Identification No. 54-0355135) 6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003 Telephone: (804) 281-2000 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on Which Registered ___________________ ________________________ Common Stock, no par value New York Stock Exchange Chicago Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Chicago Stock Exchange SM 7% PRIDES, Convertible Preferred Stock New York Stock Exchange Chicago Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] As of February 21, 1995: (a) the aggregate market value of the voting stock held by nonaffiliates of the Registrant was approximately $2.47 billion*. (b) the Registrant had 62,185,902 shares of Common Stock outstanding and entitled to vote. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on April 19, 1995 - Part III _____________________ * For this purpose, "nonaffiliates" are deemed to be persons other than directors, officers and persons owning beneficially more than five percent of the voting stock. The amount reported includes the market value of 7,400,930 shares of 7% PRIDES, Convertible Preferred Stock, each entitled to 4/5 of a vote. NOTE This copy includes only EXHIBITS 11 and 21 of those listed on pages 56 - 61. In accordance with the Securities and Exchange Commission's requirements, we will furnish copies of the remaining exhibits listed below upon payment of a fee of 10 cents per page. Please remit the proper amount with your request to: Secretary Reynolds Metals Company P.O. Box 27003 Richmond, Virginia 23261-7003 Exhibits have the following number of pages: EXHIBIT 3.1 77 EXHIBIT 10.13 7 EXHIBIT 3.2 19 EXHIBIT 10.14 7 EXHIBIT 4.1 77 EXHIBIT 10.15 12 EXHIBIT 4.2 19 EXHIBIT 10.16 13 EXHIBIT 4.3 165 EXHIBIT 10.17 1 EXHIBIT 4.4 6 EXHIBIT 10.18 2 EXHIBIT 4.5 74 EXHIBIT 10.19 1 EXHIBIT 4.6 2 EXHIBIT 10.20 1 EXHIBIT 4.7 2 EXHIBIT 10.21 1 EXHIBIT 4.8 2 EXHIBIT 10.22 4 EXHIBIT 4.9 2 EXHIBIT 10.23 3 EXHIBIT 4.10 10 EXHIBIT 10.24 3 EXHIBIT 4.11 14 EXHIBIT 10.25 3 EXHIBIT 4.12 9 EXHIBIT 10.26 3 EXHIBIT 4.13 33 EXHIBIT 10.27 2 EXHIBIT 4.14 23 EXHIBIT 10.28 1 EXHIBIT 4.15 89 EXHIBIT 10.29 10 EXHIBIT 4.16 12 EXHIBIT 10.30 10 EXHIBIT 10.1 21 EXHIBIT 10.31 13 EXHIBIT 10.2 16 EXHIBIT 10.32 6 EXHIBIT 10.3 19 EXHIBIT 10.33 2 EXHIBIT 10.4 6 EXHIBIT 10.34 2 EXHIBIT 10.5 3 EXHIBIT 10.35 1 EXHIBIT 10.6 3 EXHIBIT 10.36 3 EXHIBIT 10.7 3 EXHIBIT 10.37 3 EXHIBIT 10.8 2 EXHIBIT 10.38 2 EXHIBIT 10.9 7 EXHIBIT 23 1 EXHIBIT 10.10 6 EXHIBIT 24 25 EXHIBIT 10.11 10 EXHIBIT 27 1 EXHIBIT 10.12 14 TABLE OF CONTENTS PART I ITEM PAGE 1. BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . 1 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . 1 COMPETITION . . . . . . . . . . . . . . . . . . . . . . 5 Principal Competitors. . . . . . . . . . . . . . . . 5 Industry Conditions. . . . . . . . . . . . . . . . . 5 RAW MATERIALS AND PRECIOUS METALS . . . . . . . . . . . 5 Bauxite, Alumina and Related Materials . . . . . . . 5 Australia . . . . . . . . . . . . . . . . . . . . 6 Brazil. . . . . . . . . . . . . . . . . . . . . . 6 Guinea. . . . . . . . . . . . . . . . . . . . . . 6 Guyana. . . . . . . . . . . . . . . . . . . . . . 6 Jamaica . . . . . . . . . . . . . . . . . . . . . 6 Precious Metals. . . . . . . . . . . . . . . . . . . 7 ALUMINUM PRODUCTION . . . . . . . . . . . . . . . . . . 7 FABRICATING OPERATIONS. . . . . . . . . . . . . . . . . 8 ENERGY. . . . . . . . . . . . . . . . . . . . . . . . . 9 ENVIRONMENTAL COMPLIANCE. . . . . . . . . . . . . . . . 10 RESEARCH AND DEVELOPMENT. . . . . . . . . . . . . . . . 11 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . 11 2. PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . 14 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . 16 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . 17 4A. EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . . . . . . 18 PART II 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . 20 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . 21 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . 22 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . 32 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . . 55 PART III 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. . . . 55 11. EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . 55 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . 55 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . 55 PART IV 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . 56 PART I Item 1. BUSINESS Reynolds Metals Company (the "Registrant") was incorporated in 1928 under the laws of the State of Delaware. As used herein, "Reynolds" and "Company" each means the Registrant and its consolidated subsidiaries unless otherwise indicated. GENERAL Reynolds serves global markets as a supplier and recycler of aluminum and other products, with its core business being as a vertically integrated producer of a wide variety of value-added aluminum products. Reynolds produces alumina, carbon products and primary and reclaimed aluminum, principally to supply the needs of its fabricating operations. These fabricating operations produce aluminum foil, sheet, plate, cans and extruded products (including heat exchanger tubing, drive shafts, bumpers and window systems), flexible packaging and wheels, among other items. Reynolds also produces a broad range of plastic products, including film, bags, containers and lids, for consumer products, foodservice and packaging uses. The Company markets an extensive line of consumer products under the Reynolds brand name, including the well-known Reynolds Wrap aluminum foil. Reynolds' largest market for its products is the packaging and containers market, which includes consumer products. The Company also is engaged in the distribution of aluminum and stainless steel and other non-aluminum industrial products to a variety of markets. Reynolds operates a one-of-a-kind facility which converts spent potliner from Reynolds' and other producers' North American aluminum smelting operations into an environmentally safe material with potential for recycling. Since 1986, the Company has been a gold producer through operations in Western Australia; however, it sold a portion of those operations in 1994 and is considering the sale of its remaining gold operations. See the discussion below under this Item. To describe more fully the nature of its operations, Reynolds has separated its vertically integrated operations into two areas -- (1) Finished Products and Other Sales and (2) Production and Processing. Finished Products and Other Sales includes the manufacture and distribution of various finished aluminum products, such as cans, containers, flexible packaging products, foodservice and household foils (including Reynolds Wrap), laminated and printed foil and aluminum building products. Finished Products and Other Sales also includes the sale of plastic bags and food wraps (for example, Reynolds Plastic Wrap, Reynolds Crystal Color Plastic Wrap, Reynolds Oven Bags and Presto disposer bags), plastic lidding and container products, plastic film packaging, Reynolds Freezer Paper, Reynolds Baker's Choice baking cups, Reynolds Cut-Rite wax paper and wax paper sandwich bags, composite and non-aluminum building products, and printing cylinders and machinery. Production and Processing includes the refining of bauxite into alumina, calcination of petroleum coke and production of prebaked carbon anodes, all of which are vertically integrated with aluminum production and processing plants. These plants produce and sell primary and reclaimed aluminum and a wide range of semifinished aluminum mill products, including flat rolled products, extruded and drawn products, cast products and other aluminum products. Examples of flat rolled products include aluminum can sheet and machined plate. Examples of extruded and drawn products include heat exchanger tubing, drive shafts and bumpers. Examples of cast products include aluminum wheels. Production and Processing also includes the treatment of spent potliner and the sale of gold and other non-aluminum products, technology, and various licensing, engineering and other services related to the production and processing of aluminum. In June, 1994, Reynolds acquired Bev-Pak, Inc. and its aluminum beverage can and end manufacturing facility in Monticello, Indiana. The purchase increased Reynolds' U.S. aluminum can- and end-making capacity by approximately 15 and 20 percent, respectively, to approximately 19 billion cans and 21 billion ends annually. In July, 1994, Reynolds completed the sale of Reynolds Australia Metals, Ltd., which held a 40% interest in the Boddington Gold Mine in Western Australia, to PosGold (BGM) Pty Ltd., a subsidiary of Poseidon Gold Limited. Proceeds have been used to repay debt and for reinvestment in Reynolds' value-added businesses. Reynolds acquired the metals distribution business of Prime Metals, Inc., in August, 1994. Reynolds is operating the business, which distributes aluminum and stainless steel mill products through six facilities located in Atlanta, Georgia; Dallas, Texas; Cleveland, Ohio; Detroit and Grand Rapids, Michigan; and Kansas City, Missouri, as part of its Reynolds Aluminum Supply Company division. Also in August, 1994, Reynolds acquired The United States Shoe Corporation's facility in Beloit, Wisconsin. Reynolds is modifying and equipping the facility for the manufacture of aluminum wheels, with production expected to begin in the second quarter of 1995. Information on shipments and net sales by classes of similar products is shown in Table 1. TABLE 1
Net Sales and Shipments Net Sales Shipments (in millions) (metric tons in thousands) _______________________________ __________________________ 1994 1993 1992 1994 1993 1992 _______________________________ __________________________ Finished products and other sales Packaging and containers: Aluminum $1,583.2 $1,262.3 $1,357.2 358.5 267.9 268.3 Non-aluminum 529.5 511.0 522.6 Other aluminum 449.1 359.2 339.9 151.1 123.6 111.1 Other non-aluminum 478.5 395.6 362.5 _______________________________ __________________________ 3,040.3 2,528.1 2,582.2 509.6 391.5 379.4 _______________________________ __________________________ Production and processing Primary aluminum 440.4 379.9 364.4 277.2 309.4 275.2 Flat rolled 1,003.1 1,063.3 1,187.4 417.8 452.4 455.6 Extruded and drawn 626.6 526.1 683.4 211.3 182.9 189.2 Other aluminum 390.8 352.1 398.4 156.7 157.7 174.7 Other non-aluminum 261.6 289.0 278.6 Gold 116.3 130.7 98.2 _______________________________ __________________________ 2,838.8 2,741.1 3,010.4 1,063.0 1,102.4 1,094.7 _______________________________ __________________________ Net Sales $5,879.1 $5,269.2 $5,592.6 1,572.6 1,493.9 1,474.1 =============================== ========================== Revenues per pound __________________ Fabricated aluminum products $1.48 $1.45 $1.61 Primary aluminum $0.72 $0.56 $0.60
Financial information relating to Reynolds' operations and identifiable assets by major operating and geographic areas is presented in Note P to the consolidated financial statements in Item 8 of this report. Reynolds' products are generally sold to producers and distributors of industrial and consumer products in various markets. Information on sales of products by principal geographic and business markets is shown in Tables 2 and 3. TABLE 2 Principal Geographic Markets Approximate Percentage of Sales _______________________________ 1994 1993 1992 ____ ____ ____ United States 77% 75% 75% Canada 6 6 5 Other (Principally Europe) 17 19 20 ____ ____ ____ Total 100% 100% 100% TABLE 3 Principal Business Markets Approximate Percentage of Sales _______________________________ 1994 1993 1992 ____ ____ ____ Packaging and Containers 45% 45% 45% Distributors and Fabricators 13 13 15 Building and Construction 13 12 12 Automotive and Transportation 12 11 11 Electrical* 3 3 5 Other 14 16 12 ____ ____ ____ Total 100% 100% 100% _________________ *Reynolds sold its North American electrical cable operations in September, 1992. COMPETITION Principal Competitors Reynolds' principal competitors in the sale in North America of products derived from primary aluminum are ten other domestic companies, a Canadian company and other foreign producers. Reynolds and many other companies produce reclaimed aluminum. In the sale of semifinished and finished products, Reynolds competes with (i) other producers of primary and reclaimed aluminum, which are also engaged in fabrication, (ii) other fabricators of aluminum and other products, (iii) other producers of plastic products and (iv) metals service center companies engaged in the distribution of aluminum and other products. Reynolds' principal competitors in Europe are seven major multinational producers and a number of smaller European producers of aluminum semifabricated products. Aluminum and related products compete with various products, including those made of iron, steel, copper, zinc, tin, titanium, lead, glass, wood, plastic, magnesium and paper. Plastic products compete with products made of glass, aluminum, steel, paper, wood and ceramics, among others. Competition is based upon price, quality and service. Industry Conditions A worldwide oversupply of aluminum, caused by high exports beginning in 1990 from the Commonwealth of Independent States ("CIS") (mostly from Russia), start-up of substantial new capacity in the industry and economic weakness, severely depressed the price of aluminum on world commodity markets. This supply-demand imbalance, with its resultant effect on prices, dramatically affected the aluminum industry and the Company. Multilateral government negotiations were commenced in late 1993 to develop strategies to integrate the CIS aluminum industries into the world market. A Memorandum of Understanding relating to primary aluminum supply-demand conditions and international trade in aluminum was agreed to by the governments of six major aluminum producing countries in March, 1994. If the negotiations had not been successful, the likely alternatives would have been unilateral trade sanctions (including, for example, import quotas and anti-dumping actions). Subsequently, European quotas on Russian aluminum imports were permitted to expire and no anti-dumping actions were filed in the United States. RAW MATERIALS AND PRECIOUS METALS Bauxite, Alumina and Related Materials Bauxite, the principal raw material used in the production of aluminum, is refined into alumina, which is then reduced by an electrolytic process into primary aluminum. Reynolds' bauxite requirements and a portion of its alumina requirements are met from sources outside the United States. Reynolds has long-term arrangements to obtain bauxite at negotiated prices from sources in Australia, Brazil and Guinea. Reynolds also has a long-term arrangement with the U.S. government under which Reynolds has agreed to purchase at a negotiated price an aggregate of approximately 1,250,000 long dry tons of Jamaican bauxite stored next to Reynolds' Sherwin alumina plant near Corpus Christi, Texas, for the period 1995 through 1998. Reynolds refines bauxite into alumina at its Sherwin alumina plant. Reynolds also acquires alumina from two joint ventures in which it has interests, one located in Western Australia, known as the Worsley Joint Venture ("Worsley"), and the other located in Stade, Germany, known as Aluminium Oxid Stade ("Stade"). See Table 4 under this Item and the discussion of Worsley under "Australia". Production and purchases of bauxite and production of alumina are adjusted from time to time in response to changes in demand for primary aluminum and other factors. Reynolds has reduced production at its Sherwin plant in connection with the curtailment of operations at its U.S. primary aluminum production plants. See "Aluminum Production". At December 31, 1994, the Sherwin plant was operating at 65% of capacity. Australia In December, 1994, Reynolds acquired from The Shell Company of Australia an additional 6% interest in Worsley, increasing Reynolds' interest in the joint venture to 56%. Worsley has a rated capacity of 1,700,000 metric tons of alumina per year (expandable to 2,700,000 metric tons per year). Worsley has proven bauxite reserves sufficient to operate the alumina plant at its rated capacity (taking into account future expansions to increase rated capacity to up to 2,700,000 metric tons per year) for at least the next 50 years. The joint venture has no specified termination date. Reynolds has a long-term purchase arrangement under which it may purchase from a third party an aggregate of approximately 18,800,000 dry metric tons of Australian bauxite for the period 1995 through 2021. Of this amount, Reynolds has agreed to purchase 1,000,000 dry metric tons annually through 1996. Brazil Reynolds and various other companies are participants in the Trombetas bauxite mining project in Brazil. Reynolds has a 5% equity interest in the project and has agreed to purchase an aggregate of approximately 2,000,000 dry metric tons of Brazilian bauxite from the project for the period 1995 through 1999. Reynolds is also maintaining an interest in other, undeveloped bauxite deposits in Brazil. Guinea Reynolds owns a 6% interest in Halco (Mining), Inc. ("Halco"). Halco owns 51% and the Guinean government owns 49% of Compagnie des Bauxites de Guinee ("CBG"), which has the exclusive right through 2038 to develop and mine bauxite in a 10,000 square-mile area in northwestern Guinea. Reynolds has a bauxite purchase contract with CBG which will provide Reynolds with an aggregate of approximately 8,800,000 dry metric tons of Guinean bauxite for the period 1995 through 2011. Guyana Reynolds and the Guyanese government each owns a 50% interest in a bauxite mining project in the Berbice region of Guyana. Reynolds has a bauxite purchase contract under which it has agreed to purchase 800,000 dry metric tons of Guyanese bauxite from the project in 1995. Jamaica Reynolds has a purchase arrangement under which it has agreed to purchase from a third party up to 1,500,000 dry metric tons of Jamaican bauxite in 1995. Reynolds' present sources of bauxite and alumina are more than adequate to meet the forecasted requirements of its primary aluminum production operations for the foreseeable future. To utilize excess alumina capacity, Reynolds enters into third-party sales arrangements. Reynolds also enters into arrangements to sell bauxite in excess of its needs to third parties. Other materials used in making aluminum are either purchased from others or supplied from Reynolds' carbon products plants in Baton Rouge and Lake Charles, Louisiana. Precious Metals In July, 1994, Reynolds completed the sale of Reynolds Australia Metals, Ltd., which held a 40% interest in the Boddington Gold Mine in Western Australia, to PosGold (BGM) Pty Ltd., a subsidiary of Poseidon Gold Limited. The Company's remaining gold mining assets consist principally of mines in the Marvel Loch and Southern Cross areas and the Mt. Gibson gold project near Dalwallinu, all in Western Australia, and exploration activities underway in Western Australia and the Northern Territory. The operations are managed by Reynolds Australian Gold Operations, Ltd., based in Perth. These operations produced 217,000 ounces of gold in 1994. ALUMINUM PRODUCTION Reynolds owns and operates three primary aluminum production plants in the United States and one located at Baie Comeau, Quebec, Canada. Reynolds is also entitled to a share of the primary aluminum produced at three joint ventures in which it participates, one located in Quebec, Canada, known as the Becancour joint venture ("Becancour"), one located in Hamburg, Germany, known as Hamburger Aluminium-Werk GmbH ("Hamburg"), and the third in Ghana, Africa, known as Volta Aluminium Company Limited ("Ghana"). See Table 5 (and related notes) under this Item for information on these primary aluminum production plants. Reynolds also buys primary aluminum on the open market. Production at the primary aluminum plants listed in Table 5 can vary due to a number of factors, including changes in worldwide supply and demand. Due to the worldwide aluminum supply-demand imbalance, Reynolds has idled a total of 209,000 metric tons, or 21%, of its 998,000 metric tons of primary aluminum capacity. Reynolds temporarily shut down 88,000 metric tons of primary aluminum production capacity at its Massena, New York (41,000 metric tons) and Longview, Washington (47,000 metric tons) plants, effective in the fourth quarter of 1993, and its Troutdale, Oregon plant, with a capacity of 121,000 metric tons, has been idle since 1991. At December 31, 1994, the U.S. plants listed in Table 5 were operating collectively at a rate of 53% of capacity; Ghana (in which Reynolds has a 10% equity interest), where production has been curtailed by drought (see "Energy") since September, 1994, was operating at 70% of capacity; and all other plants listed in Table 5 were operating at full capacity. See Table 6 under this Item. In order to balance its alumina supply system, Reynolds has temporarily reduced production at its Sherwin alumina plant in Texas in connection with the curtailments. See "Raw Materials and Precious Metals - Bauxite, Alumina and Related Materials". Reynolds has an 8% equity interest in C.V.G. Aluminio del Caroni, S.A., which produces primary aluminum in Venezuela. Reynolds has agreed to acquire a 10% equity interest in the Aluminum Smelter Company of Nigeria (ALSCON), with the Nigerian government and private interests holding the remaining equity. As part of the arrangement, Reynolds will purchase at market-related prices 140,000 metric tons of primary aluminum annually from a 180,000 metric ton smelter being constructed by ALSCON in Nigeria. Reynolds produces reclaimed aluminum from aluminum scrap at its facilities located in Bellwood, Virginia and Sheffield, Alabama, and at a facility in which it has a 99.5% equity interest located in Isernia, Italy. See Table 6 under this Item. Scrap for the U.S. facilities is obtained through Reynolds' nationwide recycling network and other scrap purchases and from Reynolds' manufacturing operations. Scrap for the Italian facility is obtained through scrap purchases. In 1994, Reynolds obtained approximately 303,600 metric tons of recycled aluminum from its recycling network and other scrap purchases. FABRICATING OPERATIONS Reynolds' semifinished and finished aluminum products and non-aluminum products are produced at numerous domestic and foreign plants wholly or partly owned by Reynolds. These plants are included in Table 7 under Item 2 of this report. The annual capacity of these plants depends upon the variety and type of products manufactured. In line with its strategic emphasis on growth opportunities in its core downstream fabricating operations serving the packaging, consumer products, aluminum can, transportation, building and construction, and infrastructure markets, Reynolds has over the past three years: - - continued to upgrade and modernize its extrusion, sheet, plate, foil, can, plastics and flexible packaging manufacturing facilities, particularly facilities for production of such value-added products as household foil, packaging, can sheet and components for the transportation industry; - - substantially increased marketing support behind its flagship Reynolds Wrap brand; - - increased PVC film capacity by 20% in 1992-1993 to serve the growing Reynolon shrink film as well as consumer and foodservice film markets; - - announced in 1994 plans for an expansion at its Grottoes, Virginia plastics manufacturing plant that will increase capacity by approximately 20%; - - introduced new products, including Regard stretch pallet overwrap film (manufactured by Presto Products Company) and Reynolds Micro-Redi microwavable containers, both in 1992, and, in 1993, a complete line of Diamond plastic wraps and bags for selected international markets; - - acquired in 1994 assets to expand its printing cylinder and engraving business; - - acquired in 1993 Miller Brewing Company's aluminum can and end manufacturing operations, increasing its U.S. can-making capacity by almost 50%; - - acquired in 1994 Bev-Pak, Inc. and its aluminum beverage can and end manufacturing facility in Monticello, Indiana, increasing the Company's U.S. aluminum can- and end-making capacity by approximately 15 and 20 percent, respectively, to approximately 19 billion cans and 21 billion ends annually; - - completed an expansion in 1992 of a joint venture facility to produce aluminum cans in Brazil and began a further expansion of the facility in 1993; - - continued in 1994 construction of two joint venture can plants, one in Brazil and one in Chile; - - announced in 1994 plans to further expand its overseas can-making capacity by participating in the construction of joint venture can plants in Brazil (the third in that country), Argentina and Saudi Arabia; - - completed in 1994 a 70% expansion of its Tampa can plant; - - developed new types of, and applications for, aluminum cans; - - commercialized in 1993 Spin Flow can necking technology (developed by Reynolds in conjunction with Ball Corporation) for forming the neck of aluminum cans at high speeds; - - increased its investment in manufacturing equipment and facilities for composite, vinyl and plastic building products; - - completed in 1992 an expansion at its McCook plant in Illinois, increasing machined aluminum plate capacity by 50% to serve the automotive, aircraft and aerospace industries; - - entered into an agreement with Mitsubishi Materials Corporation, Mitsubishi Aluminum Co., Ltd. and Mitsubishi Corporation, and an agreement with Sumitomo Light Metal Industries, Ltd., to pursue joint research and development work on new technologies and processes in the production of aluminum extrusion and sheet applications, respectively, for the worldwide automotive industry, both in 1992; - - completed an expansion of a jointly-owned aluminum wheel plant in Ontario, Canada in 1992; - - purchased in 1994 a facility in Beloit, Wisconsin, which it is modifying and equipping for the manufacture of aluminum wheels with production expected to begin in the second quarter of 1995; - - in 1994 began production of aluminum automotive extruded components at a new fabricating plant in Auburn, Indiana; - - acquired in 1994 the metals distribution business of Prime Metals, Inc., allowing the Company to broaden the geographic processing and service capabilities of its Reynolds Aluminum Supply Company metals distribution business; - - announced in 1994 a major, multi-year capital program to build a new aluminum foil rolling mill at its Louisville, Kentucky plant which will increase annual capacity at the plant by about 25%; and - - announced in January, 1995 that Reynolds and AMAG Austria had reached agreement for Reynolds to purchase the aluminum extrusion operations of AMAG's wholly owned subsidiary, Wexal International Ltd., in Ireland. ENERGY Reynolds consumes substantial amounts of energy in refining bauxite into alumina and in reducing alumina to aluminum. Alumina is produced by a process requiring high temperatures at various stages. These temperatures are achieved by burning natural gas or coal at the alumina plants. Natural gas and coal are purchased under long- and short-term contracts. See Table 4 under this Item. Primary aluminum is produced from alumina by an electrolytic process requiring large amounts of electric power. Electricity required for Reynolds' primary aluminum production plants is purchased under long-term contracts. See Table 5 under this Item. Reynolds expects to meet its energy requirements for primary aluminum production for the foreseeable future under long-term contracts. Under these contracts, however, Reynolds may experience shortages of interruptible power from time to time at its Washington, Oregon, New York and Ghana reduction plants. Production at Ghana is dependent on hydroelectric power and has from time to time been curtailed by drought. The Bonneville Power Administration ("BPA"), which serves the Company's Troutdale, Oregon and Longview, Washington primary aluminum production plants, is expected to propose in April, 1995, an increase in the base rate that it will charge for electricity and to put an increase into effect on January 1, 1996. The magnitude of that increase, its duration, and the ultimate impact on the Company cannot be predicted with certainty, due in large part to ongoing political, regulatory and judicial developments relating to remedial measures required in the Pacific Northwest to conserve certain types of salmon listed as endangered species and the effect of such measures on BPA's hydroelectric operations. The uncertain outlook for BPA's rates may cause the Company to seek alternate sources of power. The Company would also have to consider whether paying increased power rates for its smelter operations in the Northwest would be prudent under prevailing economic conditions. Further increases in power rates which are already relatively high by worldwide standards could jeopardize the long-term competitiveness of the Company's Troutdale and Longview plants. ENVIRONMENTAL COMPLIANCE Reynolds has spent and will spend substantial capital and operating amounts relating to ongoing compliance with environmental laws. The area of environmental management, including environmental controls, continues to be in a state of scientific, technological and regulatory evolution. Consequently, it is not possible for Reynolds to predict accurately the total expenditures necessary to meet all future environmental requirements. Reynolds expects, however, to add or modify environmental control facilities at a number of its worldwide locations to meet existing and certain anticipated regulatory requirements, including regulations to be implemented under the Clean Air Act Amendments of 1990 (the "Clean Air Act"). Based on information currently available, Reynolds estimates that compliance with the Clean Air Act's hazardous air pollutant standards would require in excess of $250 million of capital expenditures (including a portion of the expenditures at Reynolds' Massena plant referred to below) beginning in the latter half of this decade, primarily at Reynolds' U.S. primary aluminum production plants. The ultimate effect of the Clean Air Act on such plants and Reynolds' other operations (and the actual amount of any such capital expenditures) will depend on how the Clean Air Act is interpreted and implemented pursuant to regulations that are currently being developed and on such additional factors as the evolution of environmental control technologies and the economic viability of such operations at the time. In October, 1994, based on an agreement in principle with the State of New York to resolve environmental issues at its Massena, New York primary aluminum production plant, Reynolds approved a five-year capital spending program of an estimated $150 million to $200 million to modernize the Massena plant and significantly reduce air emissions from the plant. Reynolds will accelerate certain expenditures believed necessary to achieve compliance with the Clean Air Act's Maximum Achievable Control Technology standards, although the U.S. Environmental Protection Agency (the "EPA") is not expected to establish such standards until 1996 or 1997. (See the related discussion in Item 3 of this report.) Capital expenditures for equipment designed for environmental control purposes were approximately $63 million in 1992, $55 million in 1993 and $34 million in 1994. The portion of such amounts expended in the United States was $57 million in 1992, $47 million in 1993 and $15 million in 1994. Expenditures in 1992, 1993 and 1994 included $32 million, $19 million and $1 million, respectively, for construction of Reynolds' facility in Arkansas that converts spent potliner from Reynolds' and other producers' aluminum smelting operations into an environmentally safe material with potential for recycling. Reynolds estimates that annual capital expenditures for environmental control facilities will be approximately $55 million in 1995, $57 million in 1996 and $95 million in 1997, the majority of such expenditures being associated with the capital spending program referred to above at Reynolds' Massena plant. Future capital expenditures for environmental control facilities cannot be predicted with accuracy for the reasons cited above; however, it may be expected that environmental control standards will become increasingly stringent and that the expenditures necessary to comply with them could increase substantially. Reynolds has been identified as a potentially responsible party ("PRP") and is involved in remedial investigations and remedial actions under the Comprehensive Environmental Response, Compensation and Liability Act ("Superfund") and similar state laws regarding the past disposal of wastes at approximately 40 sites in the United States. Such statutes may impose joint and several liability for the costs of such remedial investigations and actions on the entities that arranged for disposal of the wastes, the waste transporters that selected the disposal sites and the owners and operators of such sites; responsible parties (or any one of them) may be required to bear all of such costs regardless of fault, legality of the original disposal or ownership of the disposal site. In addition, Reynolds is investigating possible environmental contamination, which may also require remedial action, at certain of its present and former United States manufacturing facilities, including contamination by polychlorinated biphenyls ("PCBs") at its Massena, New York primary aluminum production plant which requires remediation. On December 16, 1994, the EPA added Reynolds' Troutdale, Oregon primary aluminum production plant to the National Priorities List of Superfund sites; the Company is working cooperatively with the EPA in investigating potential environmental contamination at the Troutdale site. At most of the 40 sites referred to above where Reynolds has been identified as a PRP, it is one of many PRPs, and its share of the anticipated cleanup costs is expected to be small. With respect to certain other sites (not included in the foregoing number) where Reynolds has been identified as a PRP, Reynolds has either fully or substantially settled or resolved actions related to such sites at minimal cost or believes that it has no responsibility with regard to them. Reynolds has been notified that it may be a PRP at certain additional sites. Reynolds' policy is to accrue remediation costs when it is probable that remedial efforts will be required and the related costs can be reasonably estimated. On a quarterly basis, Reynolds evaluates the status of all sites, develops or revises estimates of costs to satisfy known remediation requirements and adjusts its accruals accordingly. At December 31, 1994, the accrual for known remediation requirements was $272 million. This amount reflects management's best estimate of Reynolds' ultimate liability for such costs. Potential insurance recoveries are not expected to be material and therefore have not been considered. As a result of such factors as the developing nature of administrative standards promulgated under Superfund and other environmental laws; the unavailability of information regarding the condition of potential sites; the lack of standards and information for use in the apportionment of remedial responsibilities; the numerous choices and costs associated with diverse technologies that may be used in remedial actions at such sites; the availability of insurance coverage; the ability to recover indemnification or contribution from third parties; and the time periods over which eventual remediation may occur, estimated costs for future environmental compliance and remediation are necessarily imprecise and it is not possible to predict the amount or timing of future costs of environmental remediation which may subsequently be determined. Based on information currently available, it is management's opinion that such future costs are not likely to have a material adverse effect on Reynolds' competitive or financial position or its ongoing results of operations. However, such costs could be material to future quarterly or annual results of operations. See the discussion under "Costs and Expenses - Environmental Matters" in Item 7, and under Note N to the consolidated financial statements in Item 8, of this report regarding the Company's anticipated costs of environmental compliance. RESEARCH AND DEVELOPMENT Reynolds engages in a continuous program of basic and applied research and development. This program deals with new and improved materials, products, processes and related environmental compliance technologies. It includes the development and expansion of products and markets which benefit from aluminum's light weight, strength, resistance to corrosion, ease of fabrication, high heat and electrical conductivity, recyclability and other properties. Materials involving aluminum, plastics, ceramics and various polymers and their processing are also included in the scope of Reynolds' research and development activity. Expenditures for Reynolds-sponsored research and development activities were approximately $38 million in 1992, $36 million in 1993 and $38 million in 1994. Reynolds owns numerous patents relating to its products and processes based predominantly upon its in-house research and development activities. The patents owned by Reynolds, or under which it is licensed, generally concern particular products or manufacturing techniques. Reynolds' business is not, however, materially dependent on patents. EMPLOYEES At December 31, 1994, Reynolds had approximately 29,000 employees. TABLE 4 Alumina Plants and Energy Supply Rated Capacity(a) at Principal December 31, 1994 Energy Energy Contract Plant Metric Tons Purchased(b) Expiration Date ______ _________________ ____________ _______________ Corpus Christi, Texas 1,600,000(c) Natural Gas 1995 (d) Worsley, Australia 952,000(e) Coal 2002 Stade, Germany 375,000(e) Natural Gas 1996 TABLE 5 Primary Aluminum Production Plants and Energy Supply Rated Capacity(a) at Principal December 31, 1994 Energy Energy Contract Plant Metric Tons Purchased(b) Expiration Date ______ _________________ ____________ _______________ Baie Comeau, Canada 400,000 Electricity 2011 and 2014 Longview, Washington 204,000(f) Electricity 2001 Massena, New York 123,000(f) Electricity 2013(g) Troutdale, Oregon 121,000(f) Electricity 2001 Becancour, Canada 90,000(h) Electricity 2014 Hamburg, Germany 40,000(h) Electricity 2000 Ghana, Africa 20,000(h) Electricity 1997(i) TABLE 6 Aluminum Capacity and Production (Metric Tons) Primary Aluminum(j) Reclaimed Aluminum(k) ________________________________ ________________________ Rated Rated Year Capacity(a),(f) Production(f) Capacity(a) Production ____ _______________ _____________ ___________ __________ 1992 991,000 880,000 510,000 445,000 1993 991,000 869,000 462,000 386,000 1994 998,000 792,000 491,000 409,000 NOTES TO TABLES 4, 5, and 6. (a) Ratings are estimates at the end of the period based on designed capacity and normal operating efficiencies and do not necessarily represent maximum possible production. (b) See "Energy". (c) In order to balance its alumina supply system, Reynolds has reduced production at its Sherwin alumina plant near Corpus Christi, Texas in connection with the curtailment of operations at its U.S. primary aluminum plants. See "Aluminum Production". At December 31, 1994, the Sherwin plant was operating at 65% of capacity. (d) At current production levels, approximately 50% of the plant's natural gas requirements is purchased under a nine-month contract and the remainder is purchased under other short-term contracts. Additional natural gas requirements that might arise at higher production levels would also be purchased under short-term contracts. The base term of the nine-month contract referred to above will conclude in August, 1995, but the contract will extend from month to month unless terminated by one of the parties. (e) Reynolds is entitled to 56% of the production of Worsley and 50% of the production of Stade. Capacity figures reflect Reynolds' share. (f) Reynolds curtailed 70,500 metric tons of production at its Troutdale primary aluminum plant in the third quarter of 1991 and the remainder of the plant's capacity in the fourth quarter of 1991. The Troutdale plant remains idle. Reynolds curtailed an aggregate of 88,000 metric tons of primary aluminum production capacity at its Massena (41,000 metric tons) and Longview (47,000 metric tons) plants effective in the fourth quarter of 1993. See "Aluminum Production". (g) The power contract terminates in 2013, subject to earlier termination by the supplier in 2003 if its federal license for a hydroelectric project is not renewed. (h) Reynolds is entitled to 25% of the production of Becancour, 33-1/3% of the production of Hamburg, and 10% of the production of Ghana. Capacity figures reflect Reynolds' share. Production at Ghana has been curtailed since September, 1994 by drought. See "Aluminum Production" and "Energy". At December 31, 1994, Ghana was operating at 70% of capacity. (i) The power contract provides for a 20-year extension at the option of the smelter owners. (j) Production is from Reynolds' primary aluminum production operations listed in Table 5. (k) Production through the second quarter of 1993 is from Reynolds' Bellwood, Virginia; Sheffield, Alabama; and Benton Harbor, Michigan reclamation facilities. Reynolds sold its Benton Harbor, Michigan facility in the second quarter of 1993. Production in 1994 includes the Isernia, Italy reclamation facility, in which Reynolds has a 99.5% equity interest. Item 2. PROPERTIES For information on the location and general nature of Reynolds' principal domestic and foreign properties, see Item 1, BUSINESS. Table 7 lists as of February 15, 1995 Reynolds' wholly-owned domestic and foreign operations and shows the domestic and foreign locations of operations in which Reynolds has interests. Facilities that are under construction or for other reasons have not begun production are not listed. The properties listed are held in fee except as otherwise indicated. Properties held other than in fee are not, individually or in the aggregate, material to Reynolds' operations and the arrangements under which such properties are held are not expected to limit their use. Reynolds believes that its facilities are suitable and adequate for its operations. With the exception of the Longview, Massena, Troutdale and Ghana primary aluminum production plants and the Sherwin alumina plant, as explained above, there is no significant surplus or idle capacity at any of Reynolds' major manufacturing facilities. TABLE 7 Wholly-Owned Domestic and Foreign Operations Manufacturing, Mining and Distribution Alumina: Recycling: Corpus Christi, Texas Recycling Plants and Malakoff, Texas Centers (U.S.)(662)** Calcined Coke: Reclamation: Baton Rouge, Louisiana Sheffield, Alabama (2) Lake Charles, Louisiana Bellwood, Virginia Carbon Anodes: Mill Products: Lake Charles, Louisiana Sheffield, Alabama McCook, Illinois Primary Aluminum: Bellwood, Virginia Massena, New York Cap-de-la-Madeleine, Troutdale, Oregon Quebec, Canada Longview, Washington Hamburg, Germany*** Baie Comeau, Quebec, Canada Latina, Italy Aluminum Cans: Spent Potliner Treatment: San Francisco, California Gum Springs, Arkansas Torrance, California Tampa, Florida Extruded Products: Moultrie, Georgia Auburn, Indiana Honolulu, Hawaii Louisville, Kentucky Monticello, Indiana (cans and ends) El Campo, Texas Kansas City, Missouri Ashland, Virginia* Fulton, New York Bellwood, Virginia Middletown, New York Richmond Hill, Ontario, Canada Reidsville, North Carolina (cans and ends) Ste. Therese, Quebec, Canada Salisbury, North Carolina Nachrodt, Germany* Fort Worth, Texas Harderwijk, Netherlands Houston, Texas Lelystad, Netherlands Seattle, Washington Maracay, Venezuela Milwaukee, Wisconsin Rocklin, California (ends) Bristol, Virginia (ends) Guayama, Puerto Rico Powder and Paste: Printing Cylinders: Louisville, Kentucky Longmont, Colorado* Atlanta, Georgia* Electrical Rod: Clarksville, Indiana* Becancour, Quebec, Canada Louisville, Kentucky (2) Newport, Kentucky* Foil Feed Stock: Battle Creek, Michigan* Hot Springs, Arkansas St. Louis, Missouri Fulton, New York* Packaging and Consumer Wilmington, North Carolina* Products: Exton, Pennsylvania* Beacon Falls, Connecticut Franklin, Tennessee* Louisville, Kentucky Richmond, Virginia (2) Mt. Vernon, Kentucky Toronto, Ontario, Canada Sparks, Nevada* Downingtown, Pennsylvania Reynolds Aluminum Supply Lewiston, Utah Company: Bellwood, Virginia Service Centers (U.S.)(27)** Grottoes, Virginia Processing Centers (U.S.)(3)** Richmond, Virginia South Boston, Virginia Gold: Appleton, Wisconsin (2) Marvel Loch, Southern Cross Little Chute, Wisconsin and Mt. Gibson, Western Weyauwega, Wisconsin Australia, Australia Rexdale, Ontario, Canada* Cap-de-la-Madeleine, Research and Development Quebec, Canada Latina, Italy Richmond, Virginia: Can Division Headquarters Building and Construction Corporate Research Products: and Development Eastman, Georgia* Central Laboratories Bourbon, Indiana Packaging Technology Ashville, Ohio Lynchburg, Virginia Corpus Christi, Texas: Weston, Ontario, Canada Alumina Technology Merxheim, France* Nachrodt, Germany Sheffield, Alabama: Dublin, Ireland* Manufacturing Technology Harderwijk, Netherlands Laboratory Lisburn, Northern Ireland* Service Centers (U.S.)(47)** Service Centers (Canada) (11)** Wheels: Ferrara, Italy Can Machinery and Systems: Richmond, Virginia Other Operations In Which Reynolds Has Interests Australia: Guinea: Bauxite, alumina Bauxite Belgium: Guyana: Building products, extrusions Bauxite* Brazil: Italy: Bauxite, aluminum cans Reclamation and ends, recycling Russia: Canada: Foil feed stock Primary aluminum, electric power generation, aluminum Spain: wheels Mill products, extrusions, foil, packaging and consumer products, Colombia: printing cylinders Mill products, extrusions, foil Venezuela: Primary aluminum, mill products, Egypt: foil, aluminum cans and ends, Extrusions recycling, aluminum wheels Germany: Alumina, primary aluminum* Ghana: Primary aluminum* ____________________________ * Leased. ** Recycling Plants and Centers - 653 leased. Building and Construction Products Service Centers - 56 leased. Reynolds Aluminum Supply Company Service Centers - 19 leased. Reynolds Aluminum Supply Company Processing Centers - 1 leased. *** Held under an installment purchase arrangement. The titles to Reynolds' various properties were not examined specifically for this report. Item 3. LEGAL PROCEEDINGS On July 29, 1992, the U.S. Environmental Protection Agency (the "EPA") filed an administrative complaint against the Registrant alleging paperwork violations and failure to determine whether certain materials in storage constituted hazardous wastes under the federal Resource Conservation and Recovery Act and state hazardous waste regulations at the Registrant's Longview, Washington primary aluminum production plant. The EPA sought $296,000 in civil penalties. Based on the Registrant's response to the complaint, the EPA dropped certain claims and amended others. The parties agreed to a settlement of the matter under which the Registrant has paid a penalty of $11,250 and has installed certain parts washing stations at the Longview plant. On June 10, 1988, the Atlantic States Legal Foundation ("Atlantic States") filed suit against the Registrant in the U.S. District Court for the Western District of New York (the "Court") under the "citizen suit" provision of the federal Clean Water Act. The State of New York intervened in the case on December 1, 1989. The suit involved the discharge of substances from the Registrant's Massena, New York primary aluminum production plant. An agreement of the parties to settle the suit for payments by the Registrant aggregating $515,000, resolving claims for penalties and other costs, was approved by the Court on May 12, 1992; however, the Court retained jurisdiction of the matter. In a letter dated April 12, 1993, Atlantic States informed the Registrant that it has withdrawn its waiver of enforcement, citing violations at the Massena plant of interim effluent limits contained in the settlement agreement and other effluent limit violations. Atlantic States has stated that it would be providing the Registrant a settlement offer concerning such violations, which the Registrant to date has not received. On November 9, 1993, counsel for the St. Regis Mohawk Tribe served the Registrant with a notice of intent to file a citizen suit for alleged violations of the federal Clean Air Act and certain New York state air emission standards at the Registrant's Massena, New York primary aluminum production plant. Subsequently, the State of New York alleged that the Registrant's emissions were causing a violation of certain state air emission standards. In October, 1994, based on an agreement in principle with the State to resolve environmental issues at the plant, the Registrant approved a five-year capital spending program of an estimated $150 million to $200 million to modernize the Massena plant and significantly reduce air emissions from the plant. The Registrant will accelerate certain expenditures believed necessary to achieve compliance with the MACT standards, although the EPA is not expected to establish such standards until 1996 or 1997. See the discussion of Clean Air Act compliance costs in Item 1 under the caption "Environmental Compliance". On August 29, 1994, the Registrant received a civil investigative demand from the U.S. Department of Justice relating to production of primary aluminum. The Registrant is cooperating with the inquiry and is confident that its conduct has been in compliance with U.S. antitrust laws. Various other suits and claims are pending against Reynolds. In the opinion of Reynolds' management, after consultation with counsel, disposition of these suits and claims and the actions referred to in the preceding paragraphs, either individually or in the aggregate, will not have a material adverse effect on Reynolds' competitive or financial position or its ongoing results of operations. No assurance can be given, however, that the disposition of one or more of such suits, claims or actions in a particular reporting period will not be material in relation to the reported results for such period. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of the Registrant's security holders during the fourth quarter of 1994. Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the Registrant are as follows: Name Age* Positions Held During Past Five Years Richard G. Holder 63 Chairman of the Board and Chief Executive Officer since May 1992. President and Chief Operating Officer 1988-1992. Director since 1984. Yale M. Brandt 64 Vice Chairman since May 1992. Executive Vice President, Fabricated Industrial Products 1990-1992. Director since 1988. Randolph N. Reynolds 53 Vice Chairman since January 1994. Executive Vice President, International 1990-1994. President, Reynolds International, Inc. ("RII"), a subsidiary of the Company, since November 1980, and Chief Executive Officer of RII since November 1981. Director since 1984. Jeremiah J. Sheehan 56 President and Chief Operating Officer since January 1994. Executive Vice President, Fabricated Products 1993-1994. Executive Vice President, Consumer and Packaging Products 1990-1993. Director since January 1994. Henry S. Savedge, Jr. 61 Executive Vice President and Chief Financial Officer since May 1992. Vice President, Finance 1990-1992. Director since 1992. Donald T. Cowles 47 Executive Vice President, Human Resources and External Affairs since February 1993. Vice President, General Counsel and Secretary 1989-1993. J. Wilt Wagner 53 Executive Vice President, Raw Materials, Metals and Industrial Products since March 1993. Executive Vice President, Fabricated Industrial Products 1992-1993. Vice President, Mill Products Division 1990-1992. James R. Aitken 60 Vice President since April 1994. Executive Vice President, RII since March 1993. Vice President Europe of RII and President, Reynolds (Europe) Ltd., a subsidiary of RII, 1987-1993. Thomas P. Christino 55 Vice President, Flexible Packaging Division since November 1993. Flexible Packaging Division General Manager 1992-1993. Flexible Packaging Products National Sales and Marketing Manager 1987- 1992. Eugene M. Desvernine 53 Vice President since April 1994. Executive Vice President, RII since March 1993. Vice President Latin America of RII 1982-1993. Allen M. Earehart 52 Vice President, Controller since April 1994. Controller 1993-1994. Director, Corporate Accounting 1982-1993. E. Jack Gates 53 Vice President, Raw Materials and Precious Metals Division since April 1993. Raw Materials and Precious Metals Division General Manager 1993. Reduction Division General Manager 1990-1993. Rodney E. Hanneman 58 Vice President, Quality Assurance and Technology Operations since March 1985. Douglas M. Jerrold 44 Vice President, Tax Affairs since April 1990. D. Michael Jones 41 Vice President, General Counsel and Secretary since February 1993. Associate General Counsel and Assistant Secretary 1990-1993. John B. Kelzer 58 Vice President, Extrusion Division since April 1993. Extrusion Division General Manager 1990-1993. William E. Leahey, Jr. 45 Vice President, Can Division since April 1993. Can Division General Manager 1992-1993. Can Division Sales and Marketing Director 1990-1992. John M. Lowrie 54 Vice President, Consumer Products Division since October 1988. John M. Noonan 61 Vice President, Construction Products and Properties Divisions since January 1984. Paul Ratki 55 Vice President, Metals Division since April 1994. Reduction and Reclamation Division General Manager 1993-1994. Reduction and Reclamation Division Operations Manager 1991-1993. Executive Vice President, Canadian Reynolds Metals Company, Limited, a subsidiary of the Company, since April 1987. William G. Reynolds, Jr. 55 Vice President, Government Relations and Public Affairs since 1980. Julian H. Taylor 51 Vice President, Treasurer since April 1988. C. Stephen Thomas 55 Vice President, Mill Products Division since May 1992. Vice President, Can Division 1990-1992. Vice President, Operations, Can Division July-December 1990. Vice President, Extrusion Division 1987-1990. Nicholas D. Triano 63 Vice President, Materials Management since April 1989. _______________ * As of February 17, 1995 PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Registrant's Common Stock is listed on the New York Stock Exchange and the Chicago Stock Exchange. At February 21, 1995, there were 10,306 holders of record of the Registrant's Common Stock. The high and low sales prices for shares of the Registrant's Common Stock as reported on the New York Stock Exchange Composite Transactions Tape and the dividends declared per share during the periods indicated are set forth below: High Low Dividends 1994 First Quarter $54-5/8 $44-7/8 $.25 Second Quarter 50-5/8 40-3/8 .25 Third Quarter 58 47-1/4 .25 Fourth Quarter 59-3/8 44-3/4 .25 1993 First Quarter $58-7/8 $48-5/8 $.45 Second Quarter 49 42 .25 Third Quarter 52-3/4 41-5/8 .25 Fourth Quarter 48-7/8 41-1/8 .25 On February 17, 1995, the Board of Directors declared a dividend of $0.25 per share of Common Stock, payable April 3, 1995 to stockholders of record on March 3, 1995. Item 6. SELECTED FINANCIAL DATA Consolidated Income Statements (In millions, except per share amounts)
1994 1993 1992 1991 1990 _____________________________________________________ Net sales $5,879.1 $5,269.2 $5,592.6 $5,730.1 $6,022.4 Equity, interest and other income 45.9 25.0 27.7 54.4 53.3 Gains on sales of assets 88.2 - 36.1 - - _____________________________________________________ 6,013.2 5,294.2 5,656.4 5,784.5 6,075.7 _____________________________________________________ Cost of products sold 5,278.5 4,930.3 5,031.8 5,010.3 5,023.6 Operational restructuring and asset revaluation costs - 348.2 106.4 - - Selling, administrative and general expenses 389.0 371.6 382.8 393.0 384.1 Interest expense 155.6 159.2 166.8 160.9 96.1 Provision for estimated environmental costs - - 164.0 - 150.0 _____________________________________________________ 5,823.1 5,809.3 5,851.8 5,564.2 5,653.8 Income (loss) before income taxes and cumulative effects of accounting changes 190.1 (515.1) (195.4) 220.3 421.9 Taxes on income (credit) 68.4 (193.0) (86.2) 66.2 125.3 _____________________________________________________ Income (loss) before cumulative effects of accounting changes 121.7 (322.1) (109.2) 154.1 296.6 Cumulative effects of accounting changes (1) - - (639.6) - - _____________________________________________________ Net income (loss) $121.7 $(322.1) $(748.8) $154.1 $296.6 ===================================================== Amounts per common share Primary earnings (losses) $1.42 $(5.38) $(12.56) $2.60 $5.01 ===================================================== Cash dividends declared $1.00 $1.20 $1.80 $1.80 $1.80 ===================================================== Other items: Total assets $7,461.3 $6,708.6 $6,897.0 $6,685.3 $6,527.1 ===================================================== Long-term debt $1,848.4 $1,989.6 $1,797.7 $1,854.3 $1,741.5 ===================================================== (1) See Item 8. Financial Statements and Supplementary Data - Notes J and K. /TABLE Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with the consolidated financial statements, related notes and other sections of this report. RESULTS OF OPERATIONS Increased shipments, higher prices, and a shift in product mix to higher valued-added products contributed to Reynolds return to profitability in 1994.
(In millions, except per share amounts) 1994 1993 1992 ____ ____ ____ Net income (loss) before special items $65.2 $(94.6) $44.6 Special items 56.5 (227.5) (793.4) Net income (loss) 121.7 (322.1) (748.8) Preferred stock dividends 34.1 - - Net income (loss) available to common stockholders 87.6 (322.1) (748.8) Earnings (loss) per share before special items $1.06 $(1.58) $ 0.75 Special items .92 (3.80) (13.31) Preferred dividends (.56) - - Earnings (loss) per share - net 1.42 (5.38) (12.56)
Special items recorded in these periods were: 1994 - gains of $41 million, or 66 cents per share, from the sale of Reynolds Australia Metals, Ltd. (which held a 40% interest in the Boddington Gold Mine), and $16 million, or 26 cents per share, from the sale of timberland in the Pacific Northwest. 1993 - charges of $228 million, or $3.80 per share, principally to cover the costs associated with temporarily curtailing primary aluminum production and restructuring certain aluminum sheet, plate and extrusion operations. 1992 - special items of $793 million, or $13.31 per share, principally charges relating to the adoption of new accounting standards. For additional information on results and special items, see Notes J, K, N, and O to the consolidated financial statements and the quarterly results of operations following the consolidated financial statements. Shipments and Net Sales ___________________________________________________________________________ Aluminum (metric tons in thousands and dollars in millions, except per pound amounts) ___________________________________________________________________________ 1994 1993 1992 _____________________________ Product shipments (metric tons) 1,573 1,494 1,474 Net sales $4,493 $3,943 $4,331 Per pound: Fabricated $1.48 $1.45 $1.61 Primary $0.72 $0.56 $0.60 ___________________________________________________________________________ Shipments increased for the ninth consecutive year and helped revenues rebound in 1994 after a four-year decline. The increase in 1994 shipments reflects the continuing recovery in major global economies, particularly in the United States and Europe, as well as the net effect of strategic acquisitions and recent restructuring activities. Higher shipments were realized for most value-added fabricated aluminum products in 1994 and 1993, particularly for beverage cans and ends in 1994 as a result of the Company's acquisition of can manufacturing facilities in late 1993 and mid-1994. The increase in can shipments also represents a rebound in the beverage industry, which had been hampered in the previous two years by weather-related factors that lessened demand for beer and soft drinks, and is particularly noteworthy in light of the continuing advancements that are being made to produce thinner gauges of can body and end stock, which reduces overall tonnage volume. Shipments of other aluminum sheet products were lower in 1994 due to the restructuring of the Company's Illinois sheet and plate facility. Aluminum product prices benefited in 1994 from an improvement in demand, as well as a shift in mix toward higher value-added products. Fabricated aluminum prices stabilized in 1994, with the exception of can and can sheet prices, due to higher demand for the Company's value-added fabricated products. The decline in net sales in 1993 was attributable almost entirely to a decline in prices for aluminum products. Higher sales were realized for most non-aluminum products in 1994, particularly stainless steel, building products and packaging. ___________________________________________________________________________ Non-aluminum products (in millions) 1994 1993 1992 _________________________ Net sales $1,386 $1,326 $1,262 ___________________________________________________________________________ Gold sales were lower in 1994 due to the divestiture of an Australian gold mining operation. The increase in net sales of non-aluminum products in 1993 was due to higher gold production and higher sales of stainless steel and building products, which were partially offset by lower packaging sales. The increase in equity, interest and other income in 1994 was due principally to improved and expanded South American can operations and higher interest income due to an increase in the amount of funds invested. Costs and Expenses Cost of products sold increased in 1994 due principally to higher raw material costs, higher shipments and a shift in product mix to higher value-added aluminum products. Costs were unfavorably impacted in 1994 and favorably impacted in 1993 by energy and outside purchases of aluminum scrap and other aluminum products that are related to the price of primary aluminum. In 1994 and 1993, the Company experienced lower costs for certain raw materials used in primary aluminum production. Costs were also adversely affected in 1994 and 1993 by lower capacity utilization at primary aluminum and alumina production facilities resulting from curtailments made in response to the oversupply of aluminum on world markets. The Company temporarily curtailed U.S. primary aluminum production by 88,000 metric tons in 1993 and 121,000 metric tons in 1991. These curtailments total 21% of its 998,000 metric ton worldwide capacity. To balance the Company's alumina system, production at the Texas alumina refinery has been reduced. In 1994, the Company benefited from higher capacity utilization at its aluminum fabrication operations. Partially offsetting the increases in costs are performance improvements that have been made across all operations and include reducing costs, improving processes and exiting uneconomic operations. These performance improvements are expected to continue providing benefits in the future. Restructuring actions for which charges were taken in 1993 and 1992 reduced 1994 operating costs. Most significant was the restructuring of the Company's sheet and plate facility in Illinois, where the production of various common alloy aluminum sheet products was discontinued by mid-1994. The plant has been streamlined to manufacture sheet and plate products for the automotive, aircraft and aerospace markets. Extrusion operations also were restructured in 1993 to increase competitiveness and focus on markets with the greatest growth potential. As a result, production of irrigation tubing was discontinued at a California facility and a Kentucky operation was converted to manufacture products for the automotive industry. (See Note O to the consolidated financial statements.) The increase in selling, administrative and general expenses in 1994 was due principally to the higher level of business activity and related promotional and selling expenses and higher employment costs. The decline in these expenses in 1993 was due to benefits resulting from an early retirement program and other cost reductions. Interest expense declined in 1994 due to lower amounts of debt outstanding and in 1993 due to lower rates. The Company uses interest rate swap agreements to manage its exposure to interest rate fluctuations after considering market conditions and levels of variable-rate and fixed-rate debt outstanding. These arrangements caused interest expense to be slightly lower in 1994 and 1993, and slightly higher in 1992. The intent is to provide for lower interest expense during economic downturns, with the potential for higher interest cost during periods of economic growth. (See Note H to the consolidated financial statements.) Annual capital expenditures for equipment designed for environmental control purposes, excluding the cost of a new spent potliner treatment facility in Arkansas, averaged approximately $33 million over the last three years. Ongoing environmental operating costs for the same period averaged approximately $70 million per year. The Company estimates that operating expenditures for 1995 through 1997 will remain at approximately these same levels; annual capital expenditures for environmental control facilities are estimated at approximately $55 million in 1995, $57 million in 1996 and $95 million in 1997, the majority of such expenditures being associated with the capital spending program referred to below at the Company's New York primary aluminum production plant. The Company's spending on environmental compliance will be influenced by future environmental regulations, including those to be issued under the Clean Air Act Amendments of 1990. In 1994, plans were announced for a $150 million to $200 million, five-year capital spending program at the Company's primary aluminum production plant in New York. The project includes new air emissions controls and a phased modernization of the plant's production lines. The Company will accelerate certain expenditures believed necessary to achieve compliance with the Clean Air Act's Maximum Achievable Control Technology standards, although the U.S. Environmental Protection Agency (the "EPA") is not expected to establish such standards until 1996 or 1997. Based on current information, it is estimated that compliance with the Clean Air Act's hazardous air pollutant standards will require at least $250 million of capital expenditures (including a portion of the expenditures at the New York plant referred to above) beginning in the latter half of this decade, principally at the Company's U.S. primary aluminum plants. Reynolds is involved in remedial investigations and actions at various locations, including EPA Superfund sites where the Company and, in most cases, others have been designated as potentially responsible parties. The Company accrues remediation costs when it establishes the probability that such efforts will be required and the costs can be estimated. In 1992 and 1990, the Company recorded pretax environmental charges of $164 million and $150 million, respectively. The Company evaluates the status of all significant existing or potential environmental issues quarterly, develops or revises cost estimates to satisfy known remediation requirements, and adjusts the accrual accordingly. At December 31, 1994, the accrual was $272 million ($298 million at December 31, 1993) and reflects management's best estimate of the Company's ultimate liability for known remediation costs. In estimating anticipated costs, the Company considers the extent of its involvement at each site, joint and several liability provisions under applicable law, and the likelihood of obtaining contributions from other potentially responsible parties. Potential insurance recoveries are not expected to be material and therefore have not been considered. Based on information currently available, remediation expenditures relating to costs currently accrued are expected to be made over the next 15 to 20 years with the majority spent by the year 2000. Cash flows from operations are expected to provide most of the funds for capital, operating and remediation expenditures. Estimating future environmental compliance and remediation costs is imprecise due to the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of currently unknown remediation sites, and the allocation of costs among potentially responsible parties. Future costs are not expected to have a material adverse effect on the Company's competitive or financial position or ongoing operating results. However, future costs of environmental remediation requirements that may subsequently be determined could be material to future quarterly or annual results of operations. Taxes on Income The Company pays U.S. federal and state taxes and foreign taxes based on the laws of the various jurisdictions in which it operates. The effective tax rates reflected in the income statement differ from the U.S. federal statutory rate principally because of state and foreign taxes and the effects of percentage depletion allowances. In 1993, the effect of changes in rates in the U.S. and Quebec, Canada, generally offset one another in terms of the impact on the Company's results. A reconciliation of the effective rates is included in Note K to the consolidated financial statements. At December 31, 1994, the Company had recorded $976 million of deferred tax assets, which relate primarily to its U.S. and Canadian tax positions. The significant portions of these assets relate to accrued costs for employee health care, restructuring and other special charges. A major portion of these assets will be realized in the future through the reversal of temporary differences, principally depreciation. To the extent that these assets are not covered by reversals of depreciation, the remainder is expected to be realized through U.S. and Canadian income earned in future periods. The Company has worldwide operations in many tax jurisdictions, which generate deferred tax assets and/or liabilities. Deferred tax assets and liabilities have been netted by jurisdiction and this results in both a deferred tax asset and a deferred tax liability on the balance sheet. The Company has a strong history of sustainable earnings despite losses in 1993 and 1992, which included a number of significant special charges. However, even without considering projections of income, certain tax planning strategies, such as changing the method of valuing inventories from LIFO to FIFO and/or entering into sale-leaseback transactions, would generate sufficient taxable income to realize the portion of the asset related to U.S. operations. Also, the majority of the U.S. tax carryforward benefits, which are included as part of the deferred tax asset, can be carried forward indefinitely. Tax planning strategies related to the Company's Canadian operations could be used, if necessary, to realize the Canadian deferred tax assets. Such strategies include the flexibility provided in the Canadian tax laws for tax depreciation claimed and the ability to generate income on advance sales of products to the U.S. parent. Based on its evaluation of these matters, the Company is confident that its deferred tax assets will be realized and is not aware of any events or uncertainties that could significantly affect its conclusions regarding realization. The Company reassesses the realization of deferred tax assets quarterly and, if necessary, adjusts its valuation allowance accordingly. (See Note K to the consolidated financial statements.) Cumulative Effects of Accounting Changes In 1992, the Company adopted FAS No. 106, requiring accrual accounting for postretirement benefits other than pensions, and FAS No. 109, which requires use of the liability method of determining deferred income taxes. Charges of $610 million (FAS No. 106) and $30 million (FAS No. 109) were recognized in 1992 for the cumulative effects of these accounting changes. The adoption of FAS No. 109 enabled the Company to fully recognize the deferred tax benefits associated with the adoption of FAS No. 106. Additional information is included in the discussions of postretirement benefits and deferred taxes. (See Notes J and K to the consolidated financial statements.) OPERATING AREA ANALYSIS
Net Sales Shipments (in millions) (metric tons in thousands) _________________________________________________________________ 1994 1993 1992 1994 1993 1992 _________________________________________________________________ Finished products and other sales Packaging and containers: Aluminum $1,583.2 $1,262.3 $1,357.2 358.5 267.9 268.3 Non-aluminum 529.5 511.0 522.6 Other aluminum 449.1 359.2 339.9 151.1 123.6 111.1 Other non-aluminum 478.5 395.6 362.5 _________________________________________________________________ 3,040.3 2,528.1 2,582.2 509.6 391.5 379.4 _________________________________________________________________ Production and processing Primary aluminum 440.4 379.9 364.4 277.2 309.4 275.2 Flat rolled 1,003.1 1,063.3 1,187.4 417.8 452.4 455.6 Extruded and drawn 626.6 526.1 683.4 211.3 182.9 189.2 Other aluminum 390.8 352.1 398.4 156.7 157.7 174.7 Other non-aluminum 261.6 289.0 278.6 Gold 116.3 130.7 98.2 _________________________________________________________________ 2,838.8 2,741.1 3,010.4 1,063.0 1,102.4 1,094.7 _________________________________________________________________ Net Sales $5,879.1 $5,269.2 $5,592.6 1,572.6 1,493.9 1,474.1 =================================================================
Additional financial information relative to Reynolds operations and identifiable assets by geographic and operating areas is presented in Note P to the consolidated financial statements. FINISHED PRODUCTS AND OTHER SALES: Shipments increased 30% in 1994 after a 3% increase in 1993. The 1994 increase was due primarily to higher shipments of cans and ends and some improvements in shipments to the distributor and building and construction markets. Shipments in 1993 increased due to higher shipments of consumer products, building and construction products, and distributor sheet and extrusions. The increase in net sales and operating profit in 1994 was due to the higher shipping volume. Higher sales of non-aluminum products in 1994, principally to the distributor and building and construction markets, were offset by lower realized aluminum prices, principally for cans and ends. The decline in net sales in 1993 was due to lower aluminum prices. Operating profit declined in 1993 primarily because of lower aluminum prices, which were partially offset by lower aluminum raw material costs. PRODUCTION AND PROCESSING: After remaining relatively stable in 1993, aluminum shipments dipped slightly in 1994. Declines in shipments of can sheet and primary aluminum in 1994 were mostly offset by higher shipments of other sheet products and extrusions by foreign subsidiaries. In 1993, a decline in shipments of can sheet was offset by an increase in shipments of other sheet products. Shipments of can sheet to external customers were lower in 1994 due to greater internal consumption by the Company's growing can manufacturing operations, and in 1993 due to lessened demand in the beverage industry. Net sales and operating profit in 1994 increased due to higher prices for primary and recycled aluminum, partially offset by lower volume and non-aluminum product sales. In 1993, net sales and operating profit declined primarily due to lower aluminum prices. This effect on operating profit was partially offset by lower raw material costs. Gold production was approximately 300,000 ounces in 1994, 360,000 ounces in 1993 and 271,000 ounces in 1992. GEOGRAPHIC: Increases in 1994 revenues and operating profits in the domestic, Canadian and European operating areas were principally due to a shift in mix toward higher value-added products and higher prices for primary and recycled aluminum. In addition, 1994 domestic operations benefited from higher shipments, primarily of cans and ends. Declines in 1993 revenues and operating profits in the domestic, Canadian and European operating areas were due primarily to lower aluminum prices. LIQUIDITY AND CAPITAL RESOURCES Working Capital Greater amounts of working capital were needed in 1994 to support a higher level of business activity. Working capital also increased as a result of short-term investments of a portion of the proceeds from the Company's preferred stock issued in early 1994. Working capital totaled $898 million at the end of 1994 compared to $409 million at the end of 1993. The ratio of current assets to current liabilities was 1.6/1 at the end of 1994 compared to 1.3/1 at the end of 1993. The Company continues its emphasis on capital resource management. Operating Activities Cash provided from operations in 1994, 1993 and 1992 amounted to $493 million, $259 million and $301 million, respectively. These funds were used for investing activities during this period and financing activities in 1993 and 1992. Cash on hand was used in 1993 to supplement the funds generated from operations. Investing Activities Substantial investments have been made to provide the Company with low-cost operations in most of its raw materials, industrial and finished products businesses. With this foundation in place, the Company is now focusing its capital investing on strategic areas for expansion and on further quality and efficiency enhancements. Capital investments over the past three years include amounts for acquisitions, construction of new facilities, capacity expansions and equipment upgrades. Acquisitions in 1994 and 1993 included a metals distribution business, additional alumina capacity and can manufacturing facilities that increased the Company's U.S. can-making capacity by 70%. In addition to the acquisitions, the Company has expanded capacity and modernized production at other can manufacturing facilities and is a joint venture participant in the construction of can manufacturing facilities in Argentina, Brazil, Chile and Saudi Arabia. In connection with the Company's strategy to expand its can manufacturing capability, a capacity expansion and quality improvement program is continuing at a can sheet operation in Alabama. To better serve the growing transportation market, equipment was upgraded at an Illinois sheet and plate facility and construction was completed in 1994 of a facility in Indiana to produce bumpers and other automotive components. In addition, aluminum wheel production was expanded and a purchased facility in Wisconsin is being modified and equipped to produce aluminum wheels beginning in 1995. Constructed facilities also include an electrical rod plant in Canada, an aluminum recycling plant in Italy and a plant in Arkansas that processes spent potliner into an environmentally acceptable material with potential for recycling. Capacity expansions, equipment upgrades and/or improvement programs have been completed at a number of other facilities. Capital investments in 1995 are expected to total approximately $575 million. Major projects include the modernization and expansion of can manufacturing facilities (including participation in construction of the overseas can plants referred to previously); continuing improvements at the can sheet facility in Alabama; modification and equipping of the wheel facility in Wisconsin; modernization of the Company's primary aluminum production plant in New York; expansion of foil rolling capacity at a plant in Kentucky; capacity expansion at a plastic film plant in Virginia; equipment upgrades at a number of other facilities; and strategic investments. These capital investments will be funded primarily with cash generated from operations, proceeds from the sale of non-core assets and a portion of the remaining proceeds from the Company's preferred stock issue completed in early 1994. The Company continues its strategy of selling non-core assets and redeploying the proceeds into value-added businesses. In 1994, the Company sold a can manufacturing facility in Austria, a subsidiary that held a 40% investment in an Australian gold mine and timberland in the Pacific Northwest. An aluminum reclamation plant in Michigan was sold in 1993 and the Company sold its North American wire and cable operations and its investment in Eskimo Pie Corporation in 1992. The proceeds from these divestitures have been used to either repay debt or to invest in value-added businesses targeted for future growth. A portion of the proceeds has been invested pending its future use for capital expenditures, strategic investments and general corporate purposes. Financing Activities The Company believes its available financial resources (including cash and investments of over $400 million), together with internally generated funds, are sufficient to meet its business needs at the present time and for the foreseeable future. The Company continues to exceed the financial ratio requirements contained in its financing arrangements and expects to do so for the foreseeable future. Following is a summary of significant financing activities over the past three years: 1992: - -- Issued $97 million of medium-term notes at an average rate of 8.3% that mature in 1999 to 2007 - -- Issued $43 million of variable rate tax-exempt bonds that mature in 2022 - -- Increased net short-term borrowings by approximately $200 million made primarily under a $285 million short-term credit facility ($230 million was outstanding at December 31, 1992, at a variable rate of 4.1%), of which $173 million was reclassified to long-term Proceeds from these activities were used for voluntary prepayments of higher-cost debt, scheduled debt payments and other financing activities. Proceeds from the tax-exempt bonds were used to fund a portion of the costs to construct the spent potliner treatment plant in Arkansas. 1993: - -- Issued $78 million of medium-term notes at an average rate of 7.5% that mature in 2004 to 2013 - -- Issued $285 million of 6-5/8% amortizing notes due between 1998 and 2002 - -- Borrowed $150 million under a bank credit agreement that requires a single repayment in 1998 and bears interest at a variable rate Proceeds from these activities were used for voluntary prepayment of $143 million of a term loan agreement, refinancing approximately $200 million of short-term obligations, scheduled payments on long-term obligations of approximately $100 million and for general corporate purposes. 1994: - -- Issued 11 million shares of 7% PRIDES, convertible preferred stock for $47.25 (stated value) per share, which generated $505 million of net proceeds - -- Replaced $490 million of revolving credit facilities with a new $500 million credit facility that expires in 1999 - -- Voluntarily prepaid the remaining balance ($72 million) of a term loan agreement and repaid the balance ($50 million) of commercial paper outstanding Proceeds from the PRIDES issue were used for capital investments in 1994 and to repay obligations incurred in the fourth quarter of 1993 in connection with the acquisition of Miller Brewing Company's can manufacturing operations. The remainder of the proceeds is being invested pending its future use for capital expenditures, strategic investments and general corporate purposes. In 1993, the Company filed a registration statement relating to the contribution, through December 31, 1995, of up to 3 million shares of common stock to its pension plans. The Company contributed to its pension plans 600,000 shares (valued at approximately $28 million) in 1993, and 1.5 million shares (valued at approximately $77 million) in 1994. At December 31, 1994, $222 million of the Company's $1.65 billion shelf registration remained available for the issuance of debt securities. STRATEGY AND OUTLOOK The Company believes the long-term fundamentals for the aluminum industry are sound, and that prospects are excellent for continued growth of global aluminum demand over the next several years. Economic recoveries in Europe and Japan, plus rapid growth in the developing world, are expected to propel Western World aluminum consumption up almost 5% in 1995. Worldwide industry shipments to the transportation market are expected to rise significantly due to a combination of factors that includes continuing incremental gains in aluminum-pounds-per-car and strong truck and trailer activity. The rate of growth in the domestic aluminum can market is expected to decline slightly, but this should be largely offset by the aluminum can's continued expansion into international markets. Some weakness may occur in the construction market as an anticipated decline in housing starts is only partially offset by rising remodeling and nonresidential construction. Reynolds strategy is to continue improving its competitive position as a vertically integrated producer of value-added aluminum products, with emphasis on growth opportunities in its core downstream fabricating operations serving the packaging, consumer products, can, transportation, building and construction, and infrastructure markets. To improve its competitiveness, Reynolds has undertaken continuing intensive cost reduction and performance improvement programs that include work force reductions, permanent closures of higher cost facilities, disposal of uneconomic and non-core assets, and operational and organizational restructuring. The Company's restructuring efforts and performance improvements of the past few years, along with improving economic conditions which are expected to create a strong demand for aluminum, should contribute significantly to Reynolds operating results. Primary aluminum is an internationally traded commodity. The price of primary aluminum is subject to worldwide market forces of supply and demand. Prices can be volatile and fluctuations influence the Company's financial results. The world market is still recovering from a serious supply-demand imbalance that began in the early 1990's, and there may be periods of marked short-term price volatility. The Company's strategy of being a vertically integrated producer of value-added aluminum products reduces its exposure to these fluctuations, but does not eliminate the risk. The Company manages its exposure to these fluctuations, after giving consideration to market conditions, sale and purchase transactions, overall business strategies and other factors that affect the Company's risk profile, with contractual arrangements including fixed price sales contracts, fixed price supply contracts, and forward and futures contracts. Through these activities the Company balances its risk profile consistent with management's operational strategies. In addition to the price risk referred to above, Reynolds is exposed to general financial, political, economic and business risks in connection with its worldwide operations. The Company continues to evaluate and manage its operations in a manner to mitigate the effects from exposure to such risks. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (In millions, except per share amounts) ==================================================================================================== Years ended December 31 1994 1993 1992 ____________________________________________________________________________________________________ REVENUES Net sales (Note A) $5,879.1 $5,269.2 $5,592.6 Equity, interest and other income 45.9 25.0 27.7 Gains on sales of assets (Note B) 88.2 - 36.1 ______________________________ 6,013.2 5,294.2 5,656.4 ______________________________ COSTS AND EXPENSES Cost of products sold 5,278.5 4,930.3 5,031.8 Operational restructuring and asset revaluation costs (Note O) - 348.2 106.4 Selling, administrative and general expenses 389.0 371.6 382.8 Interest - principally on long-term obligations (Note H) 155.6 159.2 166.8 Provision for estimated environmental costs (Note N) - - 164.0 ______________________________ 5,823.1 5,809.3 5,851.8 ______________________________ EARNINGS Income (loss) before income taxes and cumulative effects of accounting changes 190.1 (515.1) (195.4) Taxes on income (credit) (Note K) 68.4 (193.0) (86.2) ______________________________ Income (loss) before cumulative effects of accounting changes 121.7 (322.1) (109.2) Cumulative effects of accounting changes (Notes J and K) - - (639.6) ______________________________ NET INCOME (LOSS) 121.7 (322.1) (748.8) Preferred stock dividends (Note I) 34.1 - - ______________________________ NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS 87.6 (322.1) (748.8) RETAINED EARNINGS Balance at beginning of year 953.8 1,347.8 2,203.9 Cash dividends on common stock (Note I) 61.9 71.9 107.3 ______________________________ Retained earnings at end of year $979.5 $953.8 $1,347.8 ============================== EARNINGS PER COMMON SHARE (Note A) Average shares outstanding 61.8 59.9 59.6 Income (loss) before cumulative effects of accounting changes $1.42 $(5.38) $(1.83) Cumulative effects of accounting changes - - (10.73) ______________________________ Net income (loss) $1.42 $(5.38) $(12.56) ============================== CASH DIVIDENDS PER COMMON SHARE $1.00 $1.20 $1.80 ============================== See Notes to Consolidated Financial Statements.
CONSOLIDATED BALANCE SHEET (In millions) ====================================================================================================
December 31 1994 1993 ____________________________________________________________________________________________________ ASSETS Current assets Cash and cash equivalents $308.3 $19.2 Short-term investments (Note C) 125.4 - Receivables Customers, less allowances of $19.4 (1993 - $16.7) 851.4 670.4 Other 110.8 123.8 ______________________________ Total receivables 962.2 794.2 Inventories (Note D) 873.1 731.8 Prepaid expenses 53.1 44.8 ______________________________ Total current assets 2,322.1 1,590.0 Unincorporated joint ventures and associated companies (Note E) 856.1 832.5 Property, plant and equipment - net (Note F) 3,108.4 3,081.2 Deferred taxes (Note K) 425.5 408.2 Other assets 749.2 796.7 ______________________________ Total assets $7,461.3 $6,708.6 ============================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities (Note G) Accounts payable, accrued and other liabilities $1,286.2 $979.9 Indebtedness 138.3 201.0 ______________________________ Total current liabilities 1,424.5 1,180.9 Long-term debt (Note H) 1,848.4 1,989.6 Postretirement benefits (Note J) 1,144.6 1,260.9 Environmental (Note N) 235.5 258.9 Deferred taxes (Note K) 183.2 156.8 Other liabilities 353.4 238.6 Stockholders' equity Preferred stock (Note I) 505.1 - Common stock (Note I) 869.7 784.2 Retained earnings 979.5 953.8 Cumulative currency translation adjustments (Note I) (42.9) (49.9) Pension liability adjustment (Note J) (39.7) (65.2) ______________________________ Total stockholders' equity 2,271.7 1,622.9 Contingent liabilities and commitments (Notes M and N) ______________________________ Total liabilities and stockholders' equity $7,461.3 $6,708.6 ============================== See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS (In millions) ====================================================================================================
Years ended December 31 1994 1993 1992 ____________________________________________________________________________________________________ OPERATING ACTIVITIES Net income (loss) $121.7 $(322.1) $(748.8) Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization (Note F) 294.8 287.0 284.0 Gains on sales of assets (Note B) (88.2) - (36.1) Deferred taxes (Note K) 6.9 (160.6) (119.1) Estimated operational restructuring, asset revaluation and environmental costs (Notes N and O) - 344.3 268.2 Cumulative effects of accounting changes (Notes J and K) - - 639.6 Other 42.3 105.9 100.5 Changes in operating assets and liabilities net of effects from acquisitions and dispositions: Accounts payable, accrued and other liabilities 272.1 50.1 (2.5) Receivables (172.9) (55.3) 31.9 Inventories (105.9) 70.0 (34.6) Other 122.2 (60.6) (81.9) ______________________________ Net cash provided by operating activities 493.0 258.7 301.2 INVESTING ACTIVITIES Capital investments (404.3) (400.5) (325.4) Proceeds from sales of assets 162.5 35.5 95.6 Purchases of debt securities (Note C) (138.7) - - Other (57.1) 59.9 (21.8) ______________________________ Net cash used in investing activities (437.6) (305.1) (251.6) FINANCING ACTIVITIES Proceeds from preferred stock issue (Note I) 505.1 - - Proceeds from long-term obligations - 544.8 316.3 Reduction of long-term debt and other financing liabilities (162.9) (467.8) (276.8) Net increase (decrease) in short-term borrowings (37.2) (19.9) 31.6 Cash dividends paid (71.3) (71.9) (107.3) ______________________________ Net cash provided by (used in) financing activities 233.7 (14.8) (36.2) CASH AND CASH EQUIVALENTS Net increase (decrease) 289.1 (61.2) 13.4 At beginning of year 19.2 80.4 67.0 ______________________________ At end of year $308.3 $19.2 $80.4 ============================== See Notes to Consolidated Financial Statements. /TABLE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In millions, except share amounts. Certain amounts have been reclassified to conform to the 1994 presentation.) ___________________________________________________________________________ NOTE A - ACCOUNTING POLICIES Certain of the Company's accounting policies are shown in boldface type and discussed below. Accounting policies which relate to a specific disclosure are italicized and shown with such disclosure. Principles of Consolidation THE ACCOUNTS OF THE COMPANY AND ITS MAJORITY-OWNED SUBSIDIARIES ARE INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS AFTER ELIMINATION OF INTERCOMPANY TRANSACTIONS AND PROFITS AND LOSSES. Revenue Recognition REVENUES ARE RECOGNIZED AT THE TIME PRODUCTS ARE SHIPPED AND TITLE AND RISK OF OWNERSHIP PASS TO THE CUSTOMER. Earnings Per Share EARNINGS PER SHARE IS BASED ON THE AVERAGE NUMBER OF COMMON SHARES OUTSTANDING AND, IN 1994, IS AFTER PREFERRED STOCK DIVIDEND REQUIREMENTS. COMMON STOCK EQUIVALENTS RELATING TO PREFERRED STOCK ARE NOT INCLUDED SINCE THEIR EFFECT WOULD BE ANTI-DILUTIVE. Postemployment Benefits THE EXPECTED COST OF POSTEMPLOYMENT BENEFITS IS ACCRUED WHEN IT BECOMES PROBABLE THAT SUCH BENEFITS WILL BE PAID. Statement of Cash Flows FOR PURPOSES OF THE STATEMENT OF CASH FLOWS, ALL HIGHLY LIQUID SHORT-TERM INVESTMENTS PURCHASED WITH AN ORIGINAL MATURITY OF THREE MONTHS OR LESS ARE CONSIDERED TO BE CASH EQUIVALENTS. Hedging FORWARD, FUTURES AND OPTION CONTRACTS AND SWAP AGREEMENTS ARE USED TO MANAGE A PORTION OF THE COMPANY'S EXPOSURES IN THE ALUMINUM, GOLD, NATURAL GAS, FOREIGN CURRENCY AND DEBT MARKETS. THE EFFECTS OF THESE CONTRACTS ARE RECOGNIZED OR ACCRUED AS A COMPONENT OF THE HEDGED TRANSACTIONS. NOTE B - GAINS ON SALES OF ASSETS In 1994, the Company completed the sale of Reynolds Australia Metals, Ltd., which held a 40% interest in the Boddington Gold Mine, to a subsidiary of Poseidon Gold Limited, and recognized a gain of $62.6 million. Also in 1994, the Company recorded a gain of $25.6 million on the sale of timberland in the Pacific Northwest. In 1992, the Company realized a gain of $36.1 million from the sale of its 84% interest in Eskimo Pie Corporation. NOTE C - SHORT-TERM INVESTMENTS MANAGEMENT DETERMINES THE APPROPRIATE CLASSIFICATION OF ITS INVESTMENT IN CORPORATE DEBT SECURITIES AT THE TIME OF PURCHASE AND REEVALUATES SUCH DESIGNATION AS OF EACH BALANCE SHEET DATE. THESE SECURITIES ARE CLASSIFIED AS HELD-TO-MATURITY WHEN THE COMPANY HAS THE POSITIVE INTENT AND ABILITY TO HOLD THE SECURITIES TO MATURITY. HELD-TO-MATURITY SECURITIES ARE STATED AT AMORTIZED COST, ADJUSTED FOR AMORTIZATION OF PREMIUMS AND ACCRETIONS OF DISCOUNTS TO MATURITY. THE FAIR VALUE OF THESE SECURITIES IS BASED ON QUOTED MARKET PRICES. At December 31, 1994, the Company had $125.4 million (amortized cost) of held-to-maturity securities that mature in 1995. The fair value of these securities at December 31, 1994, was approximately the same as book value. NOTE D - INVENTORIES INVENTORIES ARE STATED AT THE LOWER OF COST OR MARKET. Cost of inventories of $309.3 million in 1994 and $270.5 million in 1993 is determined by the last-in, first-out (LIFO) method. Remaining inventories of $563.8 million in 1994 and $461.3 million in 1993 are determined by the average or first-in, first-out (FIFO) methods. If the FIFO method were applied to LIFO inventories, the amount for inventories would increase by $453.5 million at December 31, 1994, and $417.4 million at December 31, 1993. Since certain inventories may be sold at various stages of processing, no practical distinction can be made between finished products, in-process products and other materials. Inventories are therefore presented as a single classification. NOTE E - UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES UNINCORPORATED JOINT VENTURES ARE PRODUCTION FACILITIES WHICH HAVE NO MARKETING OR SALES ACTIVITIES AND ARE ACCOUNTED FOR ON AN INVESTMENT COST BASIS ADJUSTED FOR THE COMPANY'S SHARE OF THE NON-CASH PRODUCTION CHARGES OF THE OPERATION. INVESTMENTS IN ASSOCIATED (20% TO 50% OWNED) COMPANIES ARE CARRIED AT COST, ADJUSTED FOR THE COMPANY'S EQUITY IN THEIR UNDISTRIBUTED NET INCOME. The Company has an interest in an unincorporated joint venture which produces alumina. The Company also had an interest in an unincorporated joint venture, which produced gold, that was sold in 1994 (see Note B). At December 31, the investment in these activities consisted of the following: 1994 1993 _________________ Unincorporated joint ventures Current assets $14.6 $18.1 Current liabilities (12.7) (13.5) Property, plant and equipment and other assets 557.1 578.0 _________________ Net investment $559.0 $582.6 ================= NOTE E - UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES - continued The Company also has interests in foreign-based associated companies which produce bauxite, alumina, primary aluminum, hydroelectric power and aluminum cans. The investment in these companies was $297.1 million and $249.9 million at December 31, 1994 and 1993, respectively, which includes advances of $27.0 million and $12.9 million. The Company recorded equity income (pretax) of $23.5 million, $8.6 million and $8.1 million during 1994, 1993 and 1992, respectively. Summarized financial information related to these entities is as follows: Years ended December 31 ___________________________ 1994 1993 1992 ___________________________ Net sales $642.6 $609.4 $601.6 Cost of products sold 552.0 517.9 513.5 Net income 37.4 24.3 31.3 December 31 ___________________ 1994 1993 ___________________ Current assets $479.7 $404.9 Noncurrent assets 787.5 772.0 Current liabilities (289.4) (251.8) Noncurrent liabilities (502.9) (520.3) Stockholders' equity 474.9 404.8 NOTE F - PROPERTY, PLANT AND EQUIPMENT - AT COST DEPRECIATION OF PLANT AND EQUIPMENT IS RECORDED ON THE STRAIGHT-LINE METHOD OVER THEIR ESTIMATED USEFUL LIVES. IMPROVEMENTS TO LEASED PROPERTIES ARE AMORTIZED GENERALLY ON THE BASIS OF THE SHORTER OF THE TERMS OF THE RESPECTIVE LEASES OR THE ESTIMATED USEFUL LIVES OF THE RELATED FACILITIES. Components of property, plant and equipment are as follows at December 31:
1994 1993 ____________________________ Land, land improvements and mineral properties $306.2 $302.8 Buildings and leasehold improvements 1,029.5 993.0 Machinery and equipment 4,797.3 4,587.0 Construction in progress 175.2 210.3 ____________________________ 6,308.2 6,093.1 Less: Allowances for depreciation and amortization 3,199.8 3,011.9 ____________________________ Net property, plant and equipment $3,108.4 $3,081.2 ============================
NOTE G - CURRENT LIABILITIES 1994 1993 ____________________ Trade payables $657.7 $386.7 Accrued compensation and related amounts 263.0 218.7 Payables to associated companies 84.4 71.8 Other liabilities 281.1 302.7 ____________________ Accounts payable, accrued and other liabilities 1,286.2 979.9 Notes payable to banks 120.5 158.4 Long-term obligations 17.8 42.6 ____________________ Indebtedness 138.3 201.0 ____________________ Total current liabilities $1,424.5 $1,180.9 ==================== The weighted-average interest rate for notes payable to banks was 7.6% and 7.1% at December 31, 1994 and 1993, respectively. NOTE H - FINANCING ARRANGEMENTS Long-term debt outstanding at December 31: 1994 1993 ____________________ Public debt securities: Medium-term notes $976.5 $976.5 6-5/8% amortizing notes 283.8 283.6 9% debentures due 2003 100.0 100.0 9-3/8% debentures due 1999 99.9 99.9 Industrial and environmental control revenue bonds 220.0 227.7 Commercial paper - 50.0 Other issues: Bank credit agreement 150.0 150.0 Mortgages and other notes payable 36.0 52.7 Term loan agreement - 91.8 ____________________ 1,866.2 2,032.2 Amounts due within one year 17.8 42.6 ____________________ Long-term debt $1,848.4 $1,989.6 ==================== Maturities of long-term debt are $57.9 million in 1996, $41.9 million in 1997, $290.9 million in 1998, $196.3 million in 1999 and $1,261.4 million from 2000 to 2022. Interest paid amounted to $152.2 million, $159.0 million and $169.6 million during 1994, 1993 and 1992, respectively, net of interest capitalized of $5.1 million, $8.0 million and $13.6 million. NOTE H - FINANCIAL ARRANGEMENTS - continued The Company has on file a shelf registration to issue up to $1.65 billion of debt securities. The medium-term notes, 9% debentures and 9-3/8% debentures were issued under the shelf registration. The medium-term notes bear interest at an average rate of 9% and have maturities ranging from 1995 to 2013. At December 31, 1994, $222 million of debt securities remained unissued under the shelf registration. The 6-5/8% amortizing notes were issued at a discount (99.48%) and have an effective interest rate of 6.7%. The notes require annual principal repayments of $57 million each year between 1998 and 2002. Industrial and environmental control revenue bonds consist principally of variable rate debt averaging approximately 4% at December 31, 1994. These bonds require principal repayment periodically or in a lump sum through 2022. $215 million of these bonds are supported by bank letters of credit. The bank credit agreement bears interest at a variable rate (6.5% at December 31, 1994) and requires a single repayment in 1998. Mortgages and other notes payable consist of fixed-rate debt at an average rate of 7.2% and require principal repayment through 2009. The Company has a $500 million revolving credit facility that expires in 1999. No amounts were outstanding under the facility at December 31, 1994. A commitment fee of .20% per year is paid on the unused portion of the facility. The Company uses interest rate swap agreements to manage a portion of its exposure to interest rate fluctuations after considering outstanding levels of variable-rate and fixed-rate debt. At December 31, 1994, the Company had $742 million of interest rate swap agreements (1993 - $742 million) which effectively convert a portion of its debt from fixed-rate to variable-rate. Under these agreements payments are received based on a fixed rate (5.0%) and made based on a variable rate (6.4% at December 31, 1994). These agreements expire in 1996 ($517 million), 1997 ($125 million) and 1998 ($100 million). The Company also had $175 million of interest rate swap agreements (1993 - $230 million) which effectively convert a portion of its debt from variable-rate to fixed-rate. Under these agreements payments are received based on a variable rate (6.4% at December 31, 1994) and made based on a fixed rate (6.0%). These agreements expire in 1998. The variable rates in the Company's interest rate swap agreements are based on the London Interbank Offer Rate. The effects of these transactions are recognized in interest expense. Certain of the Company's financing arrangements contain restrictions which, among other things, require maintenance of specified financial ratios. These restrictions do not inhibit operations or the use of fixed assets. At December 31, 1994, all such requirements were exceeded. NOTE I - STOCKHOLDERS' EQUITY Preferred stock The Company has 21,000,000 shares of preferred stock authorized of which 2,000,000 shares have been designated Series A Junior Participating Preferred Stock and 11,000,000 have been designated 7% PRIDES, Convertible Preferred Stock. The Company has 11,000,000 shares of 7% PRIDES outstanding, which were issued early in 1994 for $47.25 (stated value) per share. The PRIDES mature on December 31, 1997, at which time they mandatorily convert into shares of the Company's common stock on a one for one basis. Dividends are cumulative from the date of issuance and are payable quarterly in arrears. Holders may convert each share of PRIDES into .82 of a share of common stock (to be adjusted under certain circumstances) at any time prior to December 31, 1997. The Company has the option of redeeming the PRIDES at any time on or after December 31, 1996, for common stock having a fair market value equal to the issue price plus accrued dividends plus a small premium. The redemption price will in no event be less than .82 of a share of common stock per share of PRIDES. The holders of shares of PRIDES have the right to vote with the holders of common stock in the election of Directors and upon each other matter coming before any meeting of the holders of common stock on the basis of 4/5 of a vote for each share of PRIDES. Dividends declared in 1994 were $3.10 per share. Common stock Shares Amount _________________________ Authorized, without par value 200,000,000 Outstanding: At beginning of 1992 59,606,960 $742.0 Shares issued under employee benefit plans: 1992 153,259 8.2 1993 728,644 34.0 1994 1,679,792 85.5 _________________________ At end of 1994 62,168,655 $869.7 ========================= The Company filed a registration statement in late 1993 relating to the contribution, through December 31, 1995, of up to 3.0 million shares of common stock to one or more of its pension plans. Contributions were made totaling 600,000 shares (valued at $28 million) in 1993 and 1.5 million shares (valued at $77 million) in 1994. NOTE I - STOCKHOLDERS' EQUITY - continued Cash dividends declared 1994 1993 1992 _________________________ 7% PRIDES $34.1 - - Common stock 61.9 $71.9 $107.3 _________________________ $96.0 $71.9 $107.3 ========================= Stock option plan The Company has a non-qualified stock option plan under which stock options may be granted to key employees at a price equal to the fair market value at the date of grant. Transactions involving the plan are summarized as follows: 1994 1993 1992 ____________________________________ Outstanding January 1 3,755,806 3,138,856 2,609,856 Granted 727,950 673,100 620,700 Cancelled (24,650) (33,250) (26,550) Exercised (55,052) (22,900) (65,150) ____________________________________ Outstanding at December 31 4,404,054 3,755,806 3,138,856 ==================================== Exercisable at December 31 3,681,204 3,084,356 2,531,056 ==================================== Options available for grant 1,312,700 2,016,000 2,655,850 ==================================== Weighted-average prices: Granted $45.38 $45.50 $57.25 Exercised 31.00 35.25 36.50 Outstanding at December 31 50.75 51.50 52.75 Exercisable at December 31 51.75 52.75 51.50 NOTE I - STOCKHOLDERS' EQUITY - continued Shareholder rights plan Each share of the Company's common stock has one right attached. The rights trade with the common stock and are exercisable only if a person or group buys 20% or more of the Company's common stock, or announces a tender offer for 30% or more of the outstanding common stock. When exercisable, each right will entitle a holder to buy one-hundredth of one share of the Company's Series A Junior Participating Preferred Stock at an exercise price of $125. If at any time after the rights become exercisable, the Company is acquired in a merger or other business combination or if 50% of its assets or earning power is sold or transferred, each right would enable its holder to buy common stock of the acquiring company at a 50% discount. In addition, if a person or group acquires 30% or more of the common stock or if certain other events occur, each right would enable its holder to buy common stock of the Company at a 50% discount. The rights, which do not have voting privileges, expire in 1997, but may be redeemed by action of the Board of Directors before then, under certain circumstances, for $0.05 per right. Until the rights become exercisable, they have no dilutive effect on earnings per share. Although these rights should not interfere with a business combination approved by the Board of Directors, they will cause substantial dilution to a person or group that attempts to acquire the Company without conditioning the offer on redemption of the rights or acquiring a substantial number of the rights. Cumulative currency translation adjustments 1994 1993 1992 _______________________________ At beginning of year $(49.9) $(1.7) $14.2 Currency translation adjustments 7.0 (49.1) (15.0) Income taxes - .9 (.9) _______________________________ At end of year $(42.9) $(49.9) $(1.7) =============================== NOTE J - POSTRETIREMENT BENEFITS Pensions The Company has several noncontributory defined benefit pension plans covering substantially all employees. Plans covering salaried employees provide pension benefits that are based on a formula which considers length of service and earnings during years of service. Plans covering hourly employees generally provide a specific amount of benefits for each year of service. Net pension costs were as follows: 1994 1993 1992 ___________________________ Service cost $32.0 $26.8 $27.1 Interest cost 126.4 116.8 107.7 Actual return on plan assets 2.8 (162.8) (43.5) Net amortization and deferrals (91.9) 83.9 (27.1) Other 12.3 9.8 12.8 ___________________________ Total $81.6 $74.5 $77.0 =========================== Assumptions used in accounting for the principal pension plans are as follows: 1994 1993 1992 __________________________ Weighted-average discount rate 8.75% 7.5% 8.5% Approximate weighted-average rate of increase in compensation levels (salaried plan only) 4.5% 4.5% 4.5% Expected long-term rate of return on assets 9.25% 9.25% 9.25% NOTE J - POSTRETIREMENT BENEFITS - continued The following table sets forth information on the principal pension plans at December 31: 1994 1993 ___________________ Actuarial present value of pension benefit obligation: Vested $1,285.8 $1,375.7 Nonvested 160.2 168.2 ___________________ Accumulated $1,446.0 $1,543.9 =================== Projected $1,539.6 $1,660.7 Plan assets at fair value 1,346.4 1,329.2 ___________________ Plan assets less than pension benefit obligation 193.2 331.5 Items not yet recognized: Unrecognized net loss (181.4) (253.7) Unamortized plan change benefits (95.7) (104.5) Recognition of minimum liability 103.5 153.0 ___________________ Net pension liability $19.6 $126.3 =================== Reflected in the Company's balance sheet is the additional minimum liability relative to its underfunded plans in the amount of $103.5 million in 1994 ($153.0 million in 1993). A corresponding amount is recognized as an intangible asset, to the extent it does not exceed unamortized plan change benefits, while the excess, net of tax, has been charged to stockholders' equity. From 1995 to 1998, the Company plans to make contributions totaling approximately $200 million to its pension plans. The timing of the contributions will depend upon conditions in the securities markets and the overall business environment. Cash for the fundings is expected to be generated from operations. If there are no significant plan changes and/or deviations in actuarial assumptions, this funding level will provide for a fully funded accumulated benefit obligation by 1998. The Company contributed $122 million (including 1.5 million shares of common stock valued at $77 million) in 1994 and $150 million (including 600,000 shares of common stock valued at $28 million) in 1993. At December 31, 1994, approximately 58% of the plans' assets were invested in corporate equity securities (including 1.9 million shares of common stock of the Company), 26% in corporate bonds, 11% in government debt securities and cash equivalents and 5% in real estate. The market value of the common stock of the Company held by the plans at December 31, 1994 was $91 million. Dividends paid on these shares in 1994 were $1.7 million. NOTE J - POSTRETIREMENT BENEFITS - continued Other postretirement benefits IN 1992, THE COMPANY ELECTED EARLY ADOPTION OF FAS NO. 106 - EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT BENEFITS OTHER THAN PENSIONS. FAS NO. 106 GENERALLY REQUIRES THE ACCRUAL OF THE EXPECTED COST OF POSTRETIREMENT BENEFITS (HEALTH CARE AND LIFE INSURANCE) BY THE DATE EMPLOYEES ATTAIN FULL ELIGIBILITY FOR BENEFITS TO BE RECEIVED. PREVIOUSLY, THE EXPENSE FOR THESE BENEFITS WAS RECOGNIZED WHEN COSTS WERE INCURRED OR CLAIMS WERE RECEIVED. A charge of $610 million ($975 million before tax) was recognized in 1992 for the cumulative effects of this accounting change. The Company provides health care and life insurance benefits to most domestic retired employees. Substantially all of the Company's domestic employees may become eligible for these benefits if they reach retirement age while working for the Company. In late 1992 and in 1993 the Company changed the plans to provide for additional cost-sharing features with future retirees. These include the elimination of certain reimbursements and requiring retiree contributions based upon age and service criteria and at specified cost levels. These changes reduced the cost of providing these benefits by approximately $39 million in 1993. The Company's policy is to fund the cost of these benefits when actual expenses are incurred. The Company's accumulated postretirement benefit obligation is comprised of the following at December 31: 1994 1993 ___________________ Retirees $716.6 $748.0 Active employees fully eligible 54.8 57.2 Active employees not fully eligible 140.0 176.4 Unamortized plan change benefits 188.7 207.4 Unrecognized net loss (20.5) (115.9) ___________________ Total $1,079.6 $1,073.1 =================== Net periodic postretirement benefit cost was: 1994 1993 1992 ____________________________ Service cost $8.0 $9.4 $16.6 Interest cost 73.5 73.7 84.7 Net amortization (16.0) (14.5) - ____________________________ Total $65.5 $68.6 $101.3 ============================ The annual assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) is 10% for 1995 (11% in 1994 and 12.5% in 1993) and is assumed to decrease gradually to 6% for 2002 and remain at that level thereafter. The health care cost trend rate assumption has a significant effect on the amounts reported. For example, each one percentage point change in the assumed health care cost trend rate would change the accumulated postretirement benefit obligation as of December 31, 1994, by approximately $57 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for 1994 by approximately $5 million. NOTE J - POSTRETIREMENT BENEFITS - continued The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 8.75% at December 31, 1994, and 7.5% at December 31, 1993. NOTE K - TAXES ON INCOME IN 1992 THE COMPANY CHANGED ITS METHOD OF ACCOUNTING FOR INCOME TAXES FROM THE DEFERRED METHOD TO THE LIABILITY METHOD AS REQUIRED BY FAS NO. 109 - ACCOUNTING FOR INCOME TAXES. AS PERMITTED UNDER THE NEW RULES, PRIOR YEARS' FINANCIAL STATEMENTS HAVE NOT BEEN RESTATED. A charge of $30 million was recognized in 1992 for the cumulative effects of this accounting change. Adoption of FAS No. 109 enabled full recognition of the deferred tax benefits associated with the adoption of FAS No. 106. At December 31, 1994, the Company had various U.S., Canadian and German income tax carryforward benefits of $98 million that expire primarily between 1998 and 2009 and $121 million that can be carried forward indefinitely. The Company has deferred tax assets primarily relating to certain foreign entities of approximately $49 million against which a full valuation reserve has been recorded. The Company is continuing to evaluate alternatives which may result in the ultimate realization of a portion of these assets. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 1994, the Company had $976 million (1993 - $925 million) of deferred tax assets and $717 million (1993 - $656 million) of deferred tax liabilities which have been netted with respect to tax jurisdictions for presentation purposes. The significant components of these amounts as shown on the balance sheet are as follows:
1994 1993 __________________________________________ Asset Liability Asset Liability __________________________________________ Retiree health benefits $413.7 - $412.3 - Tax carryforward benefits 206.9 $(60.6) 182.2 $(52.1) Environmental, restructuring and other costs 141.7 (2.7) 168.8 (2.9) Other 69.5 16.9 27.8 13.9 Tax over book depreciation (341.1) 229.7 (321.1) 198.0 Valuation reserve relating to tax carryforward benefits (48.5) - (44.0) - __________________________________________ Total deferred tax assets and liabilities 442.2 183.3 426.0 156.9 Amount included as current in balance sheet 16.7 .1 17.8 .1 __________________________________________ Noncurrent deferred tax assets and liabilities $425.5 $183.2 $408.2 $156.8 ========================================== /TABLE NOTE K - TAXES ON INCOME - continued Significant components of the provision for income taxes are as follows: 1994 1993 1992 ______________________________ Current: Federal $29.3 $(55.8) $10.8 Foreign 15.2 14.3 19.8 State 1.3 4.3 2.4 ______________________________ Total current 45.8 (37.2) 33.0 ______________________________ Deferred: Federal (13.2) (98.4) (89.0) Foreign 32.5 (33.3) (16.9) State (8.1) (28.9) (17.7) ______________________________ Total deferred 11.2 (160.6) (123.6) ______________________________ Equity income 11.4 4.8 4.4 ______________________________ Total $68.4 $(193.0) $(86.2) ============================== The deferred tax provision includes state and foreign operating loss carryforward benefits of $14 million. The Company has not provided taxes on the undistributed earnings ($752 million) of foreign subsidiaries as it is the intent of the Company to use such earnings to finance foreign expansion, reduce foreign debt and support foreign operating requirements. The Company's effective income tax rate varied from the United States statutory rate as follows: 1994 1993 1992 _______________________ United States rate 35% (35)% (34)% Income taxed at other than United States rate 2 3 (3) Percentage depletion (3) (1) (2) State income taxes and other 2 (4) (5) _______________________ Effective rate 36% (37)% (44)% ======================= Net income taxes paid (refunded) were ($16.9 million), $5.7 million and $17.1 million in 1994, 1993 and 1992, respectively. NOTE L - FINANCIAL INSTRUMENTS The Company uses forward contracts and swap agreements to manage a portion of its exposure to fluctuations in foreign currencies relating to certain foreign debt agreements and certain committed aluminum sales and raw material acquisitions in foreign markets. At December 31, 1994, the Company had $578 million of these arrangements (1993 - $514 million) which mature in 1995 to 2002. The effects of these contracts are recognized or accrued as a component of the hedged transaction. The fair value of the Company's financial instruments was estimated based upon quoted prices for comparable contracts and discounted cash flow analyses and varies from period to period based on a number of factors, principally interest rates. At the end of 1994 and 1993, the fair value of the financial instruments discussed above and interest rate swap agreements discussed in Note H was approximately the same as carrying value. The Company is exposed to certain losses if the other parties to these agreements do not perform, but the counterparties are expected to perform their obligations. The carrying amount of long-term debt was approximately $140 million lower than its fair value in 1993 and approximately equal to fair value in 1994. NOTE M - CONTINGENT LIABILITIES AND COMMITMENTS Various suits and claims are pending against the Company. In the opinion of management, after consultation with counsel, disposition of these suits and claims, either individually or in the aggregate, will not have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. No assurance can be given, however, that the disposition of one or more of such suits or claims in a particular reporting period will not be material in relation to the reported results for such period. In order to assure an adequate supply of certain raw material requirements, the Company has committed to pay its proportionate share of annual production charges (including debt service) relating to its interests in certain unincorporated joint ventures and associated companies. These arrangements include minimum commitments of approximately $45 million annually through 1999 and additional amounts thereafter which together, at present value, aggregate $190 million at December 31, 1994, after excluding interest of $36 million and variable operating costs of the facilities. During 1994 approximately $190 million (1993 - $195 million; 1992 - $200 million) of raw materials were purchased under these arrangements. Certain items of property, plant and equipment are leased under long-term operating leases. Lease expense was approximately $45 million per year for the years 1992 to 1994. Lease commitments at December 31, 1994, were approximately $76 million. Leases covering major items contain renewal and/or purchase options which may be exercised. NOTE N - ENVIRONMENTAL EXPENDITURES THE COMPANY'S POLICY IS TO ACCRUE REMEDIATION COSTS WHEN IT IS PROBABLE THAT SUCH EFFORTS WILL BE REQUIRED AND THE RELATED COSTS CAN BE REASONABLY ESTIMATED. The Company is involved in various worldwide environmental improvement activities resulting from past operations, including designation as a potentially responsible party (PRP), with others, at various EPA designated Superfund sites. In developing its estimate of environmental remediation costs, the Company considers, among other things, currently available technological solutions, alternative cleanup methods and risk-based assessments of the contamination and, as applicable, an estimation of its proportionate share of remediation costs. The Company may also make use of external consultants, and consider, when available, estimates by other PRP's and governmental agencies and information regarding the financial viability of other PRP's. Based upon information currently available, the Company believes it is unlikely that it will incur substantial additional costs as a result of failure by other PRP's to satisfy their responsibilities for remediation costs. Amounts have been recorded which, in management's best estimate, will be sufficient to satisfy anticipated costs of known remediation requirements. At December 31, 1994, $272 million for estimated environmental remediation costs had been accrued. Expenditures relating to costs currently accrued are expected to be made over the next 15 to 20 years with the majority to be spent by the year 2000. As a result of factors such as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of presently unknown remediation sites and the allocation of costs among potentially responsible parties, estimated costs for future environmental compliance and remediation are necessarily imprecise and it is not possible to predict the amount or timing of future costs of environmental remediation requirements which may subsequently be determined. Based upon information presently available, such future costs are not expected to have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. However, such costs could be material to results of operations in a future period. NOTE O - OPERATIONAL RESTRUCTURING AND ASSET REVALUATION COSTS The Company recorded $348.2 million in 1993 and $106.4 million in 1992 in operational restructuring and asset revaluation costs. These costs resulted from the Company's estimate of the ultimate realization of the carrying value of certain assets, liabilities related to the offering of an early retirement program for certain salaried employees, and the employee termination and other costs associated with disposal or restructuring of certain uneconomic operations. The components of these charges were as follows: 1993 1992 ___________________ Asset revaluation $188.6 $50.5 Pension, health care and early retirement costs 116.4 21.2 Other operational restructuring costs 43.2 34.7 ___________________ Total $348.2 $106.4 =================== The 1993 charges relate primarily to the Company's plans to restructure operations at certain manufacturing facilities. The Company discontinued manufacturing various sheet products in Illinois and eliminated extruded shapes operations in Kentucky. To reduce costs, the Company offered in 1992 an early retirement program to certain salaried employees. In addition, in both 1993 and 1992, the Company provided for the restructuring and/or disposal of certain other uneconomic operations. Cash requirements were $7.5 million in 1992, $13.6 million in 1993 and $41.5 million in 1994 principally for employee termination and benefit costs. Estimated cash requirements for 1995 are $27 million. Most of the restructuring activities for which costs have been accrued will be completed during 1995. NOTE P - COMPANY OPERATIONS The Company is a vertically integrated enterprise operating predominantly in the aluminum industry in both domestic and foreign areas. In order to more fully describe the nature of its operations and to supplement the foregoing, the Company has separated its vertically integrated operations into two groups referred to as finished products and other sales, and production and processing. Summarized financial information relating to the Company's operations and investments is as follows:
Domestic Canada _____________________________ ___________________________ GEOGRAPHIC DATA 1994 1993 1992 1994 1993 1992 _____________________________ ___________________________ Products and services sold Customers $4,506.5 $3,966.5 $4,212.6 $374.7 $293.5 $276.8 Transfers between areas 329.2 224.1 276.4 498.7 377.4 425.5 _____________________________ ___________________________ Total products and services sold $4,835.7 $4,190.6 $4,489.0 $873.4 $670.9 $702.3 ============================= =========================== Operating profit (loss) $54.6 $(16.8) $76.4 $105.3 $(9.3) $19.4 Equity in income of companies not consolidated 9.0 8.5 8.3 Interest and other income 45.3 6.0 44.7 1.3 .7 1.2 Interest expense (116.5) (116.1) (130.6) (27.9) (23.5) (19.4) _____________________________ ___________________________ Income (loss) before income taxes and cumulative effects of accounting changes $(16.6) $(126.9) $(9.5) $87.7 $(23.6) $9.5 ============================= =========================== Identifiable assets $4,577.9 $3,991.1 $3,969.7 $1,287.8 $1,215.8 $1,250.5
Finished products and other sales ___________________________________ OPERATING DATA 1994 1993 1992 ___________________________________ Products and services sold Customers $3,040.3 $2,528.1 $2,582.2 Internal transfers 3.7 2.1 3.8 ___________________________________ Total products and services sold $3,044.0 $2,530.2 $2,586.0 =================================== Operating profit (loss) $255.4 $146.5 $214.1 Equity in income of companies not consolidated Interest and other income Interest expense Income (loss) before income taxes and cumulative effects of accounting changes Operating profit (loss) includes depreciation and amortization of $85.5 $71.1 $71.8 Identifiable assets $1,451.7 $1,252.9 $1,156.3 Capital investments $176.2 $173.1 $63.6
Other foreign (principally Europe) Eliminations, etc. Consolidated __________________________________ ________________________________ _____________________________ 1994 1993 1992 1994 1993 1992 1994 1993 1992 __________________________________ ________________________________ _____________________________ $997.9 $1,009.2 $1,103.2 $5,879.1 $5,269.2 $5,592.6 178.3 160.7 178.8 $(1,006.2) $(762.2) $(880.7) __________________________________ ________________________________ _____________________________ $1,176.2 $1,169.9 $1,282.0 $(1,006.2) $(762.2) $(880.7) $5,879.1 $5,269.2 $5,592.6 ================================== ================================ ============================= $63.0 $(5.1) $74.9 $(11.3) $(349.7) $(263.1) $211.6 $(380.9) $(92.4) 23.5 8.6 8.1 (9.0) (8.5) (8.3) 23.5 8.6 8.1 66.8 9.8 13.8 (2.8) (.1) (4.0) 110.6 16.4 55.7 (14.0) (19.7) (20.8) 2.8 .1 4.0 (155.6) (159.2) (166.8) __________________________________ ________________________________ _____________________________ $139.3 $(6.4) $76.0 $(20.3) $(358.2) $(271.4) $190.1 $(515.1) $(195.4) ================================== ================================ ============================= $975.1 $748.2 $941.4 $(235.6) $(79.0) $(114.4) $6,605.2 $5,876.1 $6,047.2 Production and processing Eliminations, etc. Consolidated _______________________________ _______________________________ _____________________________ 1994 1993 1992 1994 1993 1992 1994 1993 1992 _______________________________ _______________________________ _____________________________ $2,838.8 $2,741.1 $3,010.4 $5,879.1 $5,269.2 $5,592.6 705.8 659.4 770.6 $(709.5) $(661.5) $(774.4) _______________________________ _______________________________ _____________________________ $3,544.6 $3,400.5 $3,781.0 $(709.5) $(661.5) $(774.4) $5,879.1 $5,269.2 $5,592.6 =============================== =============================== ============================= $2.0 $(188.2) $(53.6) $(45.8) $(339.2) $(252.9) $211.6 $(380.9) $(92.4) 32.5 17.1 16.4 (9.0) (8.5) (8.3) 23.5 8.6 8.1 110.6 16.4 55.7 (155.6) (159.2) (166.8) _____________________________ $190.1 $(515.1) $(195.4) ============================= $209.3 $215.9 $212.2 $294.8 $287.0 $284.0 $3,963.3 $3,686.3 $4,117.3 $(84.3) $(15.2) $(14.4) $5,330.7 $4,924.0 $5,259.2 $228.1 $227.4 $261.8 $404.3 $400.5 $325.4
NOTE P - COMPANY OPERATIONS - continued Approximately 27% of products transferred between operating areas and all transfers from other foreign areas are reflected at cost-related prices. Other transfers between operating areas and transfers between Canada and domestic areas are reflected at market-related prices. Operating profit is after allocation of selling, administrative and general expenses. It does not reflect interest expense or other items of income or expense considered to be general corporate in nature. The Company has investments in and advances to associated companies and unincorporated joint ventures not consolidated amounting to $856.1 million in 1994, $832.5 million in 1993 and $849.8 million in 1992. Such investments and advances relate principally to Australian and Canadian entities in the production and processing area. Corporate assets associated with operating data of $1,274.5 million in 1994, $952.1 million in 1993 and $788.0 million in 1992 consist principally of cash, investments, deferred taxes and other assets. Research and development expenditures were $38.2 million in 1994, $36.1 million in 1993 and $37.7 million in 1992. NOTE Q - CANADIAN REYNOLDS METALS COMPANY, LIMITED Financial statements and financial statement schedules for Canadian Reynolds Metals Company, Limited have been omitted because the securities it has registered under the Securities Act of 1933 (thus subjecting it to reporting requirements under Section 13 or 15(d) of the Securities Exchange Act of 1934) are fully and unconditionally guaranteed by Reynolds Metals Company. Financial information relating to Canadian Reynolds Metals Company, Limited is presented herein in accordance with Staff Accounting Bulletin 53 as an addition to the footnotes to the financial statements of Reynolds Metals Company. Summarized financial information is as follows: Year ended December 31 __________________________ 1994 1993 1992 __________________________ Net Sales: Customers $372.9 $293.5 $276.8 Parent company 498.2 377.5 425.5 __________________________ 871.1 671.0 702.3 Cost of products sold 754.7 666.4 683.5 Income (loss) before cumulative effect of accounting change 49.7 (35.7) 22.2 Net income (loss) $49.7 $(35.7) $28.6 [CAPTION] December 31 _____________________ 1994 1993 _____________________ Current assets $237.7 $146.9 Noncurrent assets 1,014.9 1,056.1 Current liabilities (83.3) (99.8) Noncurrent liabilities (563.7) (540.7)
Quarterly Results of Operations (Unaudited) (In millions, except per share amounts) 1994 1993 ________________________________________ ___________________________________________ Quarter 1st 2nd 3rd 4th 1st 2nd 3rd 4th ________________________________________ ___________________________________________ Net sales $1,253.9 $1,455.0 $1,531.4 $1,638.8 $1,230.7 $1,356.0 $1,336.2 $1,346.3 Gross profit 87.7 145.0 158.3 209.6 74.7 93.8 78.2 92.2 Net income (loss) $(21.1) $11.9 $62.0 $68.9 $(32.7) $(22.8) $(28.0) $(238.6) ======================================== =========================================== Net income (loss) per common share $(0.46) $0.05 $0.86 $0.97 $(0.55) $(0.38) $(0.47) $(3.98)
Gross profit is net sales minus cost of products sold. Net income (loss) for 1994 includes a gain of $41 million in the third quarter from the sale of Reynolds Australia Metals, Ltd. and a gain of $16 million in the fourth quarter from the sale of timberland in the Pacific Northwest. Net income (loss) for 1993 includes a charge of $8 million in the third quarter to cover the costs of the temporary curtailment of primary aluminum production and a charge of $220 million in the fourth quarter for operational restructuring and asset revaluation costs. REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Stockholders and Board of Directors Reynolds Metals Company We have audited the accompanying consolidated balance sheets of Reynolds Metals Company as of December 31, 1994 and 1993, and the related consolidated statements of income and retained earnings, and cash flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Reynolds Metals Company at December 31, 1994 and 1993, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles. As discussed in the notes to the consolidated financial statements, the Company changed its methods of accounting for postretirement benefits other than pensions (Note J) and income taxes (Note K) in 1992. Ernst & Young LLP Richmond, Virginia February 17, 1995 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT For information concerning the directors and nominees for directorship, see the information under the caption "Item 1. Election of Directors" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 19, 1995, which information is incorporated herein by reference. Information concerning executive officers of the Registrant is shown in Part I - Item 4A of this report. Item 11. EXECUTIVE COMPENSATION For information required by this item, see the information under the captions "Item 1. Election of Directors - Board Compensation and Benefits", "Item 1. Election of Directors - Other Compensation", and "Executive Compensation" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 19, 1995, which information is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT For information required by this item, see the information under the caption "Beneficial Ownership of Securities" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 19, 1995, which information (other than that appearing under the caption "Beneficial Ownership of Securities - Stock Ownership Guidelines") is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS For information required by this item, see the information under the captions "Item 1. Election of Directors - Other Compensation" and "Executive Compensation - Pension Plan Table" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 19, 1995, which information is incorporated herein by reference. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) The consolidated financial statements and exhibits listed below are filed as a part of this report. (1) Consolidated Financial Statements: Page Consolidated statement of income and retained earnings - Years ended December 31, 1994, 1993 and 1992. 32 Consolidated balance sheet - December 31, 1994 and 1993. 33 Consolidated statement of cash flows - Years ended December 31, 1994, 1993 and 1992. 34 Notes to consolidated financial statements. 35 Report of Ernst & Young LLP, Independent Auditors. 54 (2) Financial Statement Schedules All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because they are not required, are inapplicable or the required information has otherwise been given. Individual financial statements of Reynolds Metals Company have been omitted because the restricted net assets (as defined in Accounting Series Release 302) of all subsidiaries included in the consolidated financial statements filed, in the aggregate, do not exceed 25% of the consolidated net assets shown in the consolidated balance sheet as of December 31, 1994. Financial statements of all associated companies (20% to 50% owned) have been omitted because no associated company is individually significant. (3) Exhibits EXHIBIT 2 - None EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended to the date hereof EXHIBIT 3.2 - By-Laws, as amended to the date hereof EXHIBIT 4.1 - Restated Certificate of Incorporation. See EXHIBIT 3.1. EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2. * EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the "Indenture") between Reynolds Metals Company and The Bank of New York, as Trustee, relating to Debt Securities. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1989, EXHIBIT 4(c)) * EXHIBIT 4.4 - Amendment No. 1 dated as of November 1, 1991 to the Indenture. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.4) * EXHIBIT 4.5 - Rights Agreement dated as of November 23, 1987 (the "Rights Agreement") between Reynolds Metals Company and The Chase Manhattan Bank, N.A. (File No. 1-1430, Registration Statement on Form 8-A dated November 23, 1987, pertaining to Preferred Stock Purchase Rights, EXHIBIT 1) * EXHIBIT 4.6 - Amendment No. 1 dated as of December 19, 1991 to the Rights Agreement. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.11) * EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999. (File No. 1-1430, Form 8-K Report dated June 6, 1989, EXHIBIT 4) * EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.3) * EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.4) * EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.15) * EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.16) * EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003. (File No. 1-1430, Form 8-K Report dated August 16, 1991, Exhibit 4(a)) * EXHIBIT 4.13 - Articles of Continuance of Canadian Reynolds Metals Company, Limited -- Societe Canadienne de Metaux Reynolds, Limitee ("CRM"), as amended to the date hereof. (Registration Statement No. 33-59168 on Form S-3, dated March 5, 1993, EXHIBIT 4.1) * EXHIBIT 4.14 - By-Laws of CRM, as amended to the date hereof. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1993, EXHIBIT 4.19) * EXHIBIT 4.15 - Indenture dated as of April 1, 1993 among CRM, Reynolds Metals Company and The Bank of New York, as Trustee. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(a)) * EXHIBIT 4.16 - Form of 6-5/8% Guaranteed Amortizing Note due July 15, 2002. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(d)) EXHIBIT 9 - None #* EXHIBIT 10.1 - Reynolds Metals Company 1982 Nonqualified Stock Option Plan, as amended through May 17, 1985. (File No. 1-1430, 1985 Form 10-K Report, EXHIBIT 10.2) #* EXHIBIT 10.2 - Reynolds Metals Company 1987 Nonqualified Stock Option Plan. (Registration Statement No. 33-13822 on Form S-8, dated April 28, 1987, EXHIBIT 28.1) #* EXHIBIT 10.3 - Reynolds Metals Company 1992 Nonqualified Stock Option Plan. (Registration Statement No. 33-44400 on Form S-8, dated December 9, 1991, EXHIBIT 28.1) #* EXHIBIT 10.4 - Reynolds Metals Company Performance Incentive Plan, as amended and restated effective January 1, 1985. (File No. 1-1430, 1985 Form 10-K Report, EXHIBIT 10.3) #* EXHIBIT 10.5 - Consulting Agreement dated April 16, 1986 between Reynolds Metals Company and David P. Reynolds. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1986, EXHIBIT 19) #* EXHIBIT 10.6 - Form of Deferred Compensation Agreement dated February 17, 1984 between Reynolds Metals Company and David P. Reynolds. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1994, EXHIBIT 10.6) #* EXHIBIT 10.7 - Deferred Compensation Agreement dated May 16, 1986 between Reynolds Metals Company and David P. Reynolds. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1986, EXHIBIT 19) #* EXHIBIT 10.8 - Agreement dated December 9, 1987 between Reynolds Metals Company and Jeremiah J. Sheehan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.9) #* EXHIBIT 10.9 - Supplemental Death Benefit Plan for Officers. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.8) #* EXHIBIT 10.10 - Financial Counseling Assistance Plan for Officers. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.11) #* EXHIBIT 10.11 - Management Incentive Deferral Plan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.12) #* EXHIBIT 10.12 - Deferred Compensation Plan for Outside Directors as Amended and Restated Effective December 1, 1993. (File No. 1-1430, 1993 Form 10-K Report, EXHIBIT 10.12) #* EXHIBIT 10.13 - Retirement Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.10) #* EXHIBIT 10.14 - Death Benefit Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.11) #* EXHIBIT 10.15 - Form of Indemnification Agreement for Directors and Officers. (File No. 1-1430, Form 8-K Report dated April 29, 1987, EXHIBIT 28.3) #* EXHIBIT 10.16 - Form of Executive Severance Agreement between Reynolds Metals Company and key executive personnel, including each of the individuals listed in Item 4A hereof. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.18) #* EXHIBIT 10.17 - Renewal dated February 21, 1992 of Consulting Agreement dated April 16, 1986 between Reynolds Metals Company and David P. Reynolds. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 10.19) #* EXHIBIT 10.18 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective May 20, 1988. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1988, EXHIBIT 19(a)) #* EXHIBIT 10.19 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective October 21, 1988. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1988, EXHIBIT 19(a)) #* EXHIBIT 10.20 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective January 1, 1987. (File No. 1-1430, 1988 Form 10-K Report, EXHIBIT 10.22) #* EXHIBIT 10.21 - Amendment to Reynolds Metals Company Performance Incentive Plan effective January 1, 1989. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1989, EXHIBIT 19) #* EXHIBIT 10.22 - Form of Stock Option and Stock Appreciation Right Agreement, as approved February 16, 1990 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, 1989 Form 10-K Report, EXHIBIT 10.24) #* EXHIBIT 10.23 - Amendment to Reynolds Metals Company 1982 Nonqualified Stock Option Plan effective January 18, 1991. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.25) #* EXHIBIT 10.24 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective January 18, 1991. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.26) #* EXHIBIT 10.25 - Letter Agreement dated January 18, 1991 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.29) #* EXHIBIT 10.26 - Form of Stock Option Agreement, as approved April 22, 1992 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(a)) #* EXHIBIT 10.27 - Consulting Agreement dated May 1, 1992 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(b)) #* EXHIBIT 10.28 - Renewal dated February 18, 1994 of Consulting Agreement dated May 1, 1992 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, 1993 Form 10-K Report, EXHIBIT 10.28) #* EXHIBIT 10.29 - Reynolds Metals Company Restricted Stock Plan for Outside Directors. (Registration Statement No. 33-53851 on Form S-8, dated May 27, 1994, EXHIBIT 4.6) #* EXHIBIT 10.30 - Reynolds Metals Company New Management Incentive Deferral Plan. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.30) #* EXHIBIT 10.31 - Reynolds Metals Company Salary Deferral Plan for Executives. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.31) #* EXHIBIT 10.32 - Reynolds Metals Company Supplemental Long Term Disability Plan for Executives. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.32) #* EXHIBIT 10.33 - Amendment to Reynolds Metals Company 1982 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.33) #* EXHIBIT 10.34 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.34) #* EXHIBIT 10.35 - Amendment to Reynolds Metals Company 1992 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.35) # EXHIBIT 10.36 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995 # EXHIBIT 10.37 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995 through December 31, 1996 # EXHIBIT 10.38 - Amendment to Reynolds Metals Company Salary Deferral Plan for Executives effective January 1, 1995 through December 31, 1996 EXHIBIT 11 - Computation of Earnings Per Share EXHIBIT 12 - Not applicable EXHIBIT 13 - Not applicable EXHIBIT 16 - Not applicable EXHIBIT 18 - None EXHIBIT 21 - List of Subsidiaries of Reynolds Metals Company EXHIBIT 22 - None EXHIBIT 23 - Consent of Independent Auditors EXHIBIT 24 - Powers of Attorney EXHIBIT 27 - Financial Data Schedule EXHIBIT 28 - Not applicable ____________________________ * Incorporated by reference. # Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. Pursuant to Item 601 of Regulation S-K, certain instruments with respect to long-term debt of the Company are omitted because such debt does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any such instrument to the Commission upon request. (b) Reports on Form 8-K The Registrant filed no reports on Form 8-K during the fourth quarter of 1994. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REYNOLDS METALS COMPANY By Richard G. Holder Richard G. Holder, Chairman of the Board and Chief Executive Officer Date March 6, 1995 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By Henry S. Savedge, Jr. By Richard G. Holder Henry S. Savedge, Jr., Director, Richard G. Holder, Director Executive Vice President and Chairman of the Board and Chief Chief Financial Officer Executive Officer Date March 6, 1995 Date March 6, 1995 By *Patricia C. Barron By *William O. Bourke Patricia C. Barron, Director William O. Bourke, Director Date March 6, 1995 Date March 6, 1995 By Yale M. Brandt By *Thomas A. Graves, Jr. Yale M. Brandt, Director Thomas A. Graves, Jr., Director Date March 6, 1995 Date March 6, 1995 By *John R. Hall By *Robert L. Hintz John R. Hall, Director Robert L. Hintz, Director Date March 6, 1995 Date March 6, 1995 By *William H. Joyce By *David P. Reynolds William H. Joyce, Director David P. Reynolds, Director Date March 6, 1995 Date March 6, 1995 By Randolph N. Reynolds By *James M. Ringler Randolph N. Reynolds, Director James M. Ringler, Director Date March 6, 1995 Date March 6, 1995 By *Charles A. Sanders By Jeremiah J. Sheehan Charles A. Sanders, Director Jeremiah J. Sheehan, Director Date March 6, 1995 Date March 6, 1995 By *Robert J. Vlasic By *Joe B. Wyatt Robert J. Vlasic, Director Joe B. Wyatt, Director Date March 6, 1995 Date March 6, 1995 By Allen M. Earehart Allen M. Earehart, Vice President, Controller Date March 6, 1995 *By D. Michael Jones D. Michael Jones, Attorney-in-Fact Date March 6, 1995 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 EXHIBITS TO FORM 10-K For the fiscal year ended December 31, 1994 Commission File No. 1-1430 REYNOLDS METALS COMPANY Attached herewith are Exhibits 3.1, 3.2, 10.36, 10.37, 10.38, 11, 21, 23, 24 and 27 INDEX EXHIBIT 2 - None EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended to the date hereof EXHIBIT 3.2 - By-Laws, as amended to the date hereof EXHIBIT 4.1 - Restated Certificate of Incorporation. See EXHIBIT 3.1. EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2. * EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the "Indenture") between Reynolds Metals Company and The Bank of New York, as Trustee, relating to Debt Securities. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1989, EXHIBIT 4(c)) * EXHIBIT 4.4 - Amendment No. 1 dated as of November 1, 1991 to the Indenture. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.4) * EXHIBIT 4.5 - Rights Agreement dated as of November 23, 1987 (the "Rights Agreement") between Reynolds Metals Company and The Chase Manhattan Bank, N.A. (File No. 1-1430, Registration Statement on Form 8-A dated November 23, 1987, pertaining to Preferred Stock Purchase Rights, EXHIBIT 1) * EXHIBIT 4.6 - Amendment No. 1 dated as of December 19, 1991 to the Rights Agreement. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.11) * EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999. (File No. 1-1430, Form 8-K Report dated June 6, 1989, EXHIBIT 4) * EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.3) * EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.4) * EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.15) * EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.16) * EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003. (File No. 1-1430, Form 8-K Report dated August 16, 1991, Exhibit 4(a)) * EXHIBIT 4.13 - Articles of Continuance of Canadian Reynolds Metals Company, Limited -- Societe Canadienne de Metaux Reynolds, Limitee ("CRM"), as amended to the date hereof. (Registration Statement No. 33- 59168 on Form S-3, dated March 5, 1993, EXHIBIT 4.1) * EXHIBIT 4.14 - By-Laws of CRM, as amended to the date hereof. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1993, EXHIBIT 4.19) * EXHIBIT 4.15 - Indenture dated as of April 1, 1993 among CRM, Reynolds Metals Company and The Bank of New York, as Trustee. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(a)) * EXHIBIT 4.16 - Form of 6-5/8% Guaranteed Amortizing Note due July 15, 2002. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(d)) EXHIBIT 9 - None * EXHIBIT 10.1 - Reynolds Metals Company 1982 Nonqualified Stock Option Plan, as amended through May 17, 1985. (File No. 1-1430, 1985 Form 10-K Report, EXHIBIT 10.2) * EXHIBIT 10.2 - Reynolds Metals Company 1987 Nonqualified Stock Option Plan. (Registration Statement No. 33-13822 on Form S-8, dated April 28, 1987, EXHIBIT 28.1) * EXHIBIT 10.3 - Reynolds Metals Company 1992 Nonqualified Stock Option Plan. (Registration Statement No. 33-44400 on Form S-8, dated December 9, 1991, EXHIBIT 28.1) * EXHIBIT 10.4 - Reynolds Metals Company Performance Incentive Plan, as amended and restated effective January 1, 1985. (File No. 1-1430, 1985 Form 10-K Report, EXHIBIT 10.3) * EXHIBIT 10.5 - Consulting Agreement dated April 16, 1986 between Reynolds Metals Company and David P. Reynolds. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1986, EXHIBIT 19) * EXHIBIT 10.6 - Form of Deferred Compensation Agreement dated February 17, 1984 between Reynolds Metals Company and David P. Reynolds. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1994, EXHIBIT 10.6) * EXHIBIT 10.7 - Deferred Compensation Agreement dated May 16, 1986 between Reynolds Metals Company and David P. Reynolds. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1986, EXHIBIT 19) * EXHIBIT 10.8 - Agreement dated December 9, 1987 between Reynolds Metals Company and Jeremiah J. Sheehan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.9) * EXHIBIT 10.9 - Supplemental Death Benefit Plan for Officers. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.8) * EXHIBIT 10.10 - Financial Counseling Assistance Plan for Officers. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.11) * EXHIBIT 10.11 - Management Incentive Deferral Plan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.12) * EXHIBIT 10.12 - Deferred Compensation Plan for Outside Directors as Amended and Restated Effective December 1, 1993. (File No. 1-1430, 1993 Form 10-K Report, EXHIBIT 10.12) * EXHIBIT 10.13 - Retirement Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.10) * EXHIBIT 10.14 - Death Benefit Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.11) * EXHIBIT 10.15 - Form of Indemnification Agreement for Directors and Officers. (File No. 1-1430, Form 8-K Report dated April 29, 1987, EXHIBIT 28.3) * EXHIBIT 10.16 - Form of Executive Severance Agreement between Reynolds Metals Company and key executive personnel, including each of the individuals listed in Item 4A hereof. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.18) * EXHIBIT 10.17 - Renewal dated February 21, 1992 of Consulting Agreement dated April 16, 1986 between Reynolds Metals Company and David P. Reynolds. (File No. 1- 1430, 1991 Form 10-K Report, EXHIBIT 10.19) * EXHIBIT 10.18 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective May 20, 1988. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1988, EXHIBIT 19(a)) * EXHIBIT 10.19 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective October 21, 1988. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1988, EXHIBIT 19(a)) * EXHIBIT 10.20 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective January 1, 1987. (File No. 1-1430, 1988 Form 10-K Report, EXHIBIT 10.22) * EXHIBIT 10.21 - Amendment to Reynolds Metals Company Performance Incentive Plan effective January 1, 1989. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1989, EXHIBIT 19) * EXHIBIT 10.22 - Form of Stock Option and Stock Appreciation Right Agreement, as approved February 16, 1990 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, 1989 Form 10-K Report, EXHIBIT 10.24) * EXHIBIT 10.23 - Amendment to Reynolds Metals Company 1982 Nonqualified Stock Option Plan effective January 18, 1991. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.25) * EXHIBIT 10.24 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective January 18, 1991. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.26) * EXHIBIT 10.25 - Letter Agreement dated January 18, 1991 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, 1990 Form 10-K Report, EXHIBIT 10.29) * EXHIBIT 10.26 - Form of Stock Option Agreement, as approved April 22, 1992 by the Compensation Committee of the Company's Board of Directors. (File No. 1- 1430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(a)) * EXHIBIT 10.27 - Consulting Agreement dated May 1, 1992 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(b)) * EXHIBIT 10.28 - Renewal dated February 18, 1994 of Consulting Agreement dated May 1, 1992 between Reynolds Metals Company and William O. Bourke. (File No. 1-1430, 1993 Form 10-K Report, EXHIBIT 10.28) * EXHIBIT 10.29 - Reynolds Metals Company Restricted Stock Plan for Outside Directors. (Registration Statement No. 33-53851 on Form S-8, dated May 27, 1994, EXHIBIT 4.6) * EXHIBIT 10.30 - Reynolds Metals Company New Management Incentive Deferral Plan. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.30) * EXHIBIT 10.31 - Reynolds Metals Company Salary Deferral Plan for Executives. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.31) * EXHIBIT 10.32 - Reynolds Metals Company Supplemental Long Term Disability Plan for Executives. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1994, EXHIBIT 10.32) * EXHIBIT 10.33 - Amendment to Reynolds Metals Company 1982 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.33) * EXHIBIT 10.34 - Amendment to Reynolds Metals Company 1987 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.34) * EXHIBIT 10.35 - Amendment to Reynolds Metals Company 1992 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.35) EXHIBIT 10.36 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995 EXHIBIT 10.37 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995 through December 31, 1996 EXHIBIT 10.38 - Amendment to Reynolds Metals Company Salary Deferral Plan for Executives effective January 1, 1995 through December 31, 1996 EXHIBIT 11 - Computation of Earnings Per Share EXHIBIT 12 - Not applicable EXHIBIT 13 - Not applicable EXHIBIT 16 - Not applicable EXHIBIT 18 - None EXHIBIT 21 - List of Subsidiaries of Reynolds Metals Company EXHIBIT 22 - None EXHIBIT 23 - Consent of Independent Auditors EXHIBIT 24 - Powers of Attorney EXHIBIT 27 - Financial Data Schedule EXHIBIT 28 - Not applicable ____________________________ * Incorporated by reference. EX-3 2 EXHIBIT 3.1 RESTATED CERTIFICATE OF INCORPORATION of REYNOLDS METALS COMPANY ___________ INTRODUCTION This Restated Certificate of Incorporation has been duly adopted by the Board of Directors of Reynolds Metals Company in accordance with Section 245 of the General Corporation Law of the State of Delaware. It only restates and integrates, and does not further amend, the provisions of the corporation's Certificate of Incorporation as heretofore amended or supplemented, and there is no discrepancy between those provisions and this Restated Certificate of Incorporation. The corporation's original Certificate of Incorporation was filed with the Delaware Secretary of State on July 18, 1928. ARTICLE I The name of the corporation is REYNOLDS METALS COMPANY ARTICLE II Its registered office in the State of Delaware is located at 1013 Centre Road, in the City of Wilmington, County of New Castle, Delaware. The name and address of its registered agent is CORPORATION SERVICE COMPANY, a corporation of the State of Delaware, located at 1013 Centre Road, Wilmington, New Castle County, Delaware. ARTICLE III The nature of the business and the objects and purposes proposed to be transacted, promoted or carried on are: 1. To manufacture, purchase, or otherwise acquire, hold, own, mortgage, pledge, sell, lease, assign and transfer, or otherwise dispose of, to invest, trade, deal in and deal with, goods, wares and merchandise and real and personal property of every class and description. 2. To erect, or cause to be erected, on any lands owned, held, and occupied by the corporation, buildings or other structures with their appurtenances and to rebuild, enlarge, alter, or improve any buildings or other structures now, or hereafter erected, on any lands so owned, held, or occupied. 3. To enter into, make and perform contracts of every kind for any lawful purpose with any person, firm, association or corporation, municipality, body politic, country, territory, State, government or colony or dependency thereof. 4. To acquire the goodwill, rights and property and the whole or any part of the assets, tangible or intangible, and to undertake or in any way assume the liabilities of any person, firm, association or corporation; to pay for the said goodwill, rights, property, and assets in cash, the stock of this company, bonds or otherwise, or by undertaking the whole or any part of the liabilities of the transferor; to hold or in any manner to dispose of the whole or any part of the property so purchased; to conduct in any lawful manner the whole or any part of any business so acquired, and to exercise all the powers necessary or convenient in and about the conduct and management of such business. 5. To apply for, purchase, register or in any manner to acquire, and to hold, own, use, operate and introduce, and to sell, lease, assign, pledge, or in any manner dispose of, and in any manner deal with patents, patent rights, licenses, copyrights, trademarks, trade names, and to acquire, own, use or in any manner dispose of any and all inventions, improvements and processes, labels, designs, brands, or other rights, and to work, operate, or develop the same, and to carry on any business, manufacturing or otherwise, which may directly or indirectly effectuate these objects or any of them. 6. To guarantee, purchase, receive, hold, own, sell, assign, transfer, mortgage, pledge or otherwise dispose of shares of capital stock, bonds, mortgages, debentures, notes or other securities, obligations, contracts or evidences of indebtedness of any corporation, company or association (organized under the laws of this State or any other State, country, nation or government) or of any state, country, nation, municipality, government or a body politic; to receive, collect and dispose of interest, dividends and income upon, of and from any of the bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property held or owned by it and to exercise in respect of all such bonds, mortgages, debentures, notes, shares of capital stock, securities, obligations, contracts, evidences of indebtedness and other property any and all rights, powers and privileges of individual ownership thereof, including the right to vote thereon. 7. Without limit as to amount to draw, make, accept, endorse, discount, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or transferable instruments and evidences of indebtedness whether secured by mortgage or otherwise, as well as to secure the same by mortgage or otherwise, so far as may be permitted by the laws of the State of Delaware. 8. To purchase, in so far as the same may be done without impairing the capital of the corporation, and to hold, pledge and reissue shares of its own capital stock; but such stock, so acquired and held, shall not be entitled to vote nor to receive dividends. 9. To have one or more offices, conduct its business and promote its objects within and without the State of Delaware, in other States, the District of Columbia, the territories, colonies and dependencies of the United States, and in foreign countries, without restriction as to place or amount, but subject to the laws of such State, District, territory, colony, dependency or country. 10. To do any or all of the things herein set forth to the same extent as natural persons might or could do and in any part of the world, as principals, agents, contractors, trustees, or otherwise, and either alone or in company with others. 11. In general to carry on any other business in connection therewith, whether manufacturing or otherwise, not forbidden by the laws of the State of Delaware, and with all the powers conferred upon corporations by the laws of the State of Delaware. But if this corporation shall undertake to do any of the things hereinabove set forth in any State other than Delaware, in the District of Columbia, in any territory, colony, or dependency of the United States, or in any foreign country or in any colony or dependency thereof, then as to such jurisdictions and each of them this corporation shall be deemed to have such powers in so far only as such jurisdictions respectively permit corporations within their several respective jurisdictions to be organized for or to execute such powers. It is the intention that each of the objects, purposes and powers specified in each of the paragraphs of this third article of this Certificate of Incorporation shall, except where otherwise specified, be nowise limited or restricted by reference to or inference from the terms of any other paragraph or of any other article in this Certificate of Incorporation, but that the objects, purposes and powers specified in this article and in each of the articles or paragraphs of this Certificate shall be regarded as independent objects, purposes and powers, and the enumeration of specific purposes and powers shall not be construed to restrict in any manner the general terms and powers of this corporation, nor shall the expression of one thing be deemed to exclude another, although it be of like nature. ARTICLE IV The total number of shares of stock of all classes that may be issued by the Corporation is Two Hundred Twenty-one Million (221,000,000) shares, of which Twenty Million (20,000,000) shares shall be preferred stock without par value and shall be designated "Preferred Stock", One Million (1,000,000) shares shall be second preferred stock of the par value of One Hundred Dollars ($100.00) each and shall be designated "Second Preferred Stock" and Two Hundred Million (200,000,000) shares shall be common stock without par value and shall be designated "Common Stock". I. PREFERRED STOCK 1. The Preferred Stock may be issued in one or more series, from time to time, with each such series to have such designation, powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors of the Corporation (referred to herein as the "Issuing Resolution" for such series), subject to the limitations prescribed by law and in accordance with the provisions hereof, the Board of Directors being hereby expressly vested with authority to adopt any such resolution or resolutions. 2. The authority of the Board of Directors with respect to each series of the Preferred Stock shall include, but not be limited to, the determination or fixing of the following: (a) The distinctive designation and number of shares comprising such series, which number may (except where otherwise provided by the Board of Directors in creating such series) be increased or decreased (but not below the number of shares then outstanding) from time to time by like action of the Board of Directors; (b) The dividend rate of such series, the conditions upon which and times at which such dividends shall be payable, the relation which such dividends shall bear to the dividends payable on any other series of the Preferred Stock, and whether such dividends shall be cumulative or noncumulative; (c) The conditions, if any, upon which the shares of such series shall be subject to redemption by the Corporation and the times, prices and other terms and provisions upon which the shares of the series may be redeemed; (d) Whether or not the shares of the series shall be subject to the operation of a retirement or sinking fund to be applied to the purchase or redemption of such shares and, if such retirement or sinking fund be established, the annual amount thereof and the terms and provisions governing the operation of such retirement or sinking fund; (e) Whether or not the shares of the series shall be convertible into or exchangeable for shares of any other class or classes, with or without par value, or of any other series of the same class, and, if provision is made for conversion or exchange, the times, prices, rates, adjustments, and other terms and conditions of such conversion or exchange; (f) Whether or not the shares of the series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (g) The rights of the shares of the series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation; (h) The relative seniority, parity or junior rank of such series with respect to any other series of the Preferred Stock; and (i) Any other powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, of the shares of such series, as the Board of Directors may deem advisable and as shall not be inconsistent with the provisions of this Certificate of Incorporation. 3. No holder of shares of any series of the Preferred Stock shall have any preemptive or preferential right of subscription to any stock of any class of the Corporation, or to any obligations convertible into stock of any class, or to any warrant or option for the purchase of stock of any class, except to the extent granted in the Issuing Resolution creating such series. 4. The Board of Directors of the Corporation shall be empowered to provide in any Issuing Resolution with respect to any series of the Preferred Stock that any of the voting powers, designations, preferences, rights and qualifications, limitations or restrictions of such series may be made dependent upon facts ascertainable outside this Certificate of Incorporation or any amendment hereto, or the Issuing Resolution with respect to such series, so long as the manner in which such facts shall operate upon the voting powers, designations, preferences, rights and qualifications, limitations or restrictions of such series is clearly and expressly set forth in this Certification of Incorporation, as amended, or in the Issuing Resolution for such series. 5. The holders of shares of the Preferred Stock of each series shall be entitled to receive, when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, dividends at the rate fixed by the Board of Directors in the Issuing Resolution for such series, and no more, before (i) any dividends (other than dividends payable in Second Preferred Stock or in Common Stock or in any other class of stock ranking junior to the Preferred Stock both as to dividends and upon liquidation, dissolution or winding up) shall be declared and paid, or set apart for payment, on, or (ii) any moneys or other consideration (other than shares of Second Preferred Stock or Common Stock or any other class of stock ranking junior to the Preferred Stock both as to dividends and upon liquidation, dissolution or winding up) is set aside for or applied to the purchase or redemption of, shares of the Second Preferred Stock or the Common Stock or any other class of stock ranking junior to the Preferred Stock as to dividends or upon liquidation, dissolution or winding up. 6. The holders of shares of the Preferred Stock of each series shall be entitled upon liquidation, dissolution or winding up of the Corporation, whether involuntary or voluntary, to such preferences as are provided in the Issuing Resolution creating such series of the Preferred Stock, and no more, before any distribution of the assets of the Corporation shall be made to or set apart for the holders of shares of the Second Preferred Stock or the Common Stock or any other class of stock ranking junior to the Preferred Stock upon liquidation, dissolution or winding up. For the purposes of this paragraph 6, a consolidation or merger of the Corporation with or into one or more other corporations (whether or not the Corporation is the corporation surviving such consolidation or merger), or a sale, lease or exchange of all or substantially all of the assets of the Corporation, shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary. SERIES A JUNIOR PARTICIPATING PREFERRED STOCK Section 1. Designation and Amount. The distinctive designation of the series shall be "Series A Junior Participating Preferred Stock." The shares constituting such series shall be without par value. The number of shares constituting such series shall be 2,000,000, subject to increase or decrease by action of the Board of Directors as evidenced by a certificate of designations. Section 2. Dividends and Distributions. (A) Subject to the prior rights of the holders of any shares of any series of Preferred Stock ranking prior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors out of funds legally available for the payment of dividends, quarterly dividends payable in cash on the first day of January, April, July and October in each year or such other days on which dividends are declared with respect to the Common Stock (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions (other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise)), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. If the Corporation shall at any time after November 20, 1987 (the "Rights Declaration Date") (i) declare any dividend payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, if no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless (i) such date of issue is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or (ii) such date of issue is either a Quarterly Dividend Payment Date or a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (C) (i) If and whenever at any time or times dividends payable on shares of any Series A Junior Participating Preferred Stock shall have been in arrears and unpaid in an aggregate amount equal to or exceeding the amount of dividends payable thereon for six quarterly dividend periods, then the holders of shares of any Series A Junior Participating Preferred Stock, together with the holders of any other series of Preferred Stock as to which dividends are in arrears and unpaid in an aggregate amount equal to or exceeding the amount of dividends payable thereon for six quarterly dividend periods, shall have the exclusive right, voting separately as a class with such other series, to elect two directors of the Corporation, such directors to be in addition to the number of directors constituting the Board of Directors immediately prior to the accrual of such right, the remaining directors to be elected by the other class or classes of stock entitled to vote therefor at each meeting of stockholders held for the purpose of electing directors. (ii) Such voting right may be exercised initially either at a special meeting of the holders of the Preferred Stock having such voting right, called as hereinafter provided, or at any annual meeting of stockholders held for the purpose of electing directors, and thereafter at each such annual meeting until such time as all cumulative dividends accumulated and payable on the shares of Series A Junior Participating Preferred Stock shall have been paid in full, at which time such voting right shall terminate, subject to revesting on the basis set forth in paragraph (C)(i). (iii) At any time when such voting right shall have vested in holders of the Preferred Stock, and if such right shall not already have been initially exercised, a proper officer of the Corporation shall, upon the written request of the record holders of 10% in number of shares of Preferred Stock having such voting right then outstanding, addressed to the Secretary of the Corporation, call a special meeting of the holders of Preferred Stock having such voting right and of any other class or classes of stock having voting power with respect to the election of such directors. Such meeting shall be held at the earliest practicable date upon the notice required for annual meetings of stockholders at the place for holding annual meetings of stockholders of the Corporation or, if none, at a place designated by the Board of Directors. If such meeting is not called by the proper officers of the Corporation within 30 days after the personal service of such written request upon the Secretary of the Corporation, or within 30 days after mailing the same within the United States of America, by registered mail, addressed to the Secretary of the Corporation at its principal office (such mailing to be evidenced by the registry receipt issued by the postal authorities), then the record holders of 10% in number of shares of the Preferred Stock then outstanding which would be entitled to vote at such meeting may designate in writing one of their number to call such meeting at the expense of the Corporation, and such meeting may be called by such person so designated upon the notice required for annual meetings of stockholders and shall be held at the same place as is elsewhere provided for in this paragraph (C)(iii) or such other place as is selected by such designated stockholder. Any holder of the Preferred Stock who would be entitled to vote at such meeting shall have access to the stock books of the Corporation for the purpose of causing a meeting of stockholders to be called pursuant to the provisions of this paragraph (C). Notwithstanding the provisions of this paragraph (C), no such special meeting shall be called during a period within 90 days immediately preceding the date fixed for the next annual meeting of stockholders. (iv) At any meeting held for the purpose of electing directors at which the holders of the Preferred Stock shall have the right to elect two directors in addition to the number of directors constituting the Board of Directors immediately prior to accrual of such right as provided herein, the presence in person or by proxy of the holders of 40% of the then outstanding shares of Preferred Stock having such right shall be required and shall be sufficient to constitute a quorum of such class of the election of directors by such class. At any such meeting or adjournment thereof (i) the absence of a quorum of the holders of the Preferred Stock having such right shall not prevent the election of directors other than those to be elected by the holders of the Preferred Stock, and the absence of a quorum or quorums of the holders of capital stock entitled to elect such other directors shall not prevent the election of directors to be elected by the holders of the Preferred Stock entitled to elect such directors and (ii) except as otherwise required by law, in the absence of a quorum of the holders of any class of stock entitled to vote for the election of directors, a majority of the holders present in person or by proxy of such class shall have the power to adjourn the meeting for the election of directors which the holders of such class are entitled to elect, from time to time, without notice other than announcement at the meeting, until a quorum is present. (v) Any vacancy in the Board of Directors in respect of a director elected by holders of Preferred Stock pursuant to the voting right created under this paragraph (C) shall be filled by vote of the remaining director so elected, or if there be no such remaining director, by the holders of Preferred Stock entitled to elect such director or directors at a special meeting called in accordance with the procedures set forth in paragraph (C)(iii), or, if no such special meeting is called, at the next annual meeting of stockholders. Upon any termination of such voting right, subject to the requirements of the General Corporation Law of Delaware, the term of office of all directors elected by holders of Preferred Stock voting separately as a class shall terminate. (D) Except as set forth herein, or as required by law, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not: (i) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (ii) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Article IV, Section I of its Certificate of Incorporation or paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in paragraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. (B) (i) If there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such assets as are available shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. (ii) If there are not sufficient assets available to permit payment in full of the Common Adjustment, then such assets as are available shall be distributed ratably to the holders of Common Stock. (C) If the Corporation shall at any time after November 20, 1987 (i) declare any dividend payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. If the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable. Section 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the Issuing Resolution with respect to any such series shall provide otherwise. Section 10. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock. II. SECOND PREFERRED STOCK 1. The Second Preferred Stock may be issued, from time to time, in one or more series, in any manner now or hereafter permitted by law. 2. The shares of each series shall have the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, which are stated and expressed in this section II, and those which are stated and expressed in the resolution or resolutions providing for the issue of such series, adopted by the Board of Directors under the authority granted to the Board of Directors by the provisions of paragraph 3 of this section II. 3. Authority is hereby expressly granted to and vested in the Board of Directors of the Corporation to provide for the issue of the Second Preferred Stock in one or more series, and with respect to each such series to fix, by resolution or resolutions, the following: (a) The maximum number of shares to constitute the series and the distinctive designation of the shares; (b) The annual dividend rate on the shares of the series and the date or dates from which dividends shall accumulate; (c) The amount which the holders of shares of the series shall be entitled to receive upon the voluntary liquidation, dissolution or winding up of the Corporation, which shall not be less than the par value plus an amount equal to all accumulated and unpaid dividends to the date of final distribution to such holders; (d) Whether or not the shares of the series shall be subject to redemption at the option of the Corporation and if so, the price which holders of shares so redeemed shall be entitled to receive, which price may vary at different redemption dates but shall in no event be less than the par value per share plus an amount equal to all accumulated and unpaid dividends to the date of redemption, and if such price varies, the period during which each such variation in price shall be applicable; (e) Whether or not the shares of the series shall be subject to redemption through the operation of a sinking fund and, if so, the terms and provisions of such sinking fund and the extent to which and the manner in which such fund shall be applied to the purchase, redemption or other acquisition of shares of the series and the redemption price for shares redeemed through the sinking fund, which price may vary at different redemption dates but shall in no event be less than the par value per share plus an amount equal to all accumulated and unpaid dividends to the date of redemption, and if such price varies, the period during which each such variation in price shall be applicable; (f) Whether or not there shall be a purchase fund to acquire shares of the series and, if so, the terms and provisions of the purchase fund and the extent to which and the manner in which such purchase fund shall be applied to the acquisition of shares of the series; (g) The limitations and restrictions, if any, in addition to, but not in derogation of, the limitations and restrictions set forth in paragraph 5 of this section II, which are to be effective while any shares of the series are outstanding, upon payment of dividends on, or making of other distributions on, and upon the purchase, redemption or other acquisition by the Corporation or any subsidiary of, shares of Common Stock or any other class of stock ranking junior to the Second Preferred Stock as to dividends or upon liquidation; (h) The conditions or restrictions, if any, which are to be effective while any shares of the series are outstanding, upon the creation of indebtedness of the Corporation or upon the issuance of shares of stock of the Corporation; (i) Any voting rights of the shares of the series, other than the voting rights for the election of Directors provided by paragraph 13 of this section II, in addition to and not inconsistent with those granted by this Article IV to the holders of the Second Preferred Stock; (j) The right, if any, to exchange or convert the shares of the series into shares of any other series of the Second Preferred Stock or into shares of any other class of stock of the Corporation and the rate or basis, time, manner and conditions of exchange or conversion or the method by which the same shall be determined; (k) Any other designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, of the series, which are now or hereafter permitted by the laws of Delaware, and which are not inconsistent with the provisions of paragraphs 4 to 17, inclusive, of this section II. The resolution or resolutions providing for the issue of shares of any series are herein referred to as the "Issuing Resolution" for that series. 4. All series of the Second Preferred Stock shall be senior to the Common Stock and each series of the Second Preferred Stock shall rank equally with every other series. Each share of any one series shall be identical with every other share of that series except as to the date or dates from which dividends shall accumulate. 5. Subject to the provisions of paragraph 5 of section I of this Article IV and to any limitation or restriction contained in the Issuing Resolution for any series of Preferred Stock, the holders of shares of each series of the Second Preferred Stock shall be entitled to receive cash dividends, when and as declared by the Board of Directors out of any funds legally available therefor, at the annual rate fixed in the Issuing Resolution for that particular series and no more. Such dividends on each series of the Second Preferred Stock shall be payable quarterly on the first day of February, May, August and November in each year to holders of record on a date, not more than fifty (50) days before each such dividend payment date, to be determined by the Board of Directors in advance of the payment of each particular dividend. Dividends on each series of the Second Preferred Stock shall be cumulative and preferential so that in no event shall any dividend or other distribution (other than dividends payable in Common Stock or in any other class of stock ranking junior to the Second Preferred Stock as to dividends and upon liquidation) be declared or paid upon or set apart for the Common Stock or any other class of stock ranking junior to the Second Preferred Stock as to dividends or upon liquidation nor shall any moneys or other consideration (other than shares of Common Stock or any other class of stock ranking junior to the Second Preferred Stock as to dividends and upon liquidation) be set aside for or applied to the purchase or redemption of shares of Common Stock or any other class of stock ranking junior to the Second Preferred Stock as to dividends or upon liquidation, unless all dividends on each then outstanding series of the Second Preferred Stock for all past quarter-yearly dividend periods shall have been paid, or declared and a sum sufficient for the payment thereof set apart, and the full dividend thereon for the then quarterly dividend period shall have been or concurrently shall be paid or declared. With respect to each series of the Second Preferred Stock, such dividends shall accumulate from the date or dates fixed in the Issuing Resolution for such series which date or dates shall in no instance be more than ninety days before or after the date of the issuance of those shares for which the date is being set. No dividends shall be declared on any series of the Second Preferred Stock in respect of any dividend period unless the same proportion of the annual dividend rate respectively applicable to the shares of every series of the Second Preferred Stock at the time outstanding shall likewise be declared as a dividend in respect of such dividend period. The term "accumulated and unpaid dividends" means, in respect of each share of the Second Preferred Stock of any series, that amount which shall be equal to simple interest upon the par value of such share at the dividend rate for such series from the date from which dividends on such share commenced to accumulate to the date as of which the computation is to be made, less the aggregate amount (without interest thereon) of all dividends theretofore paid or declared and set aside for payment in respect thereof. 6. (a) In the event of any involuntary liquidation, dissolution or winding up of the Corporation, the holders of the shares of every series of the Second Preferred Stock shall, subject to the provisions of paragraph 6 of section I of this Article IV, be entitled to receive payment at the rate of $100 per share, plus an amount equal to all accumulated and unpaid dividends to the date of final distribution to such holders, and no more, before any payment or distribution of the assets of the Corporation shall be made to or set apart for the holders of the Common Stock or any other class of stock ranking junior to the Second Preferred Stock upon liquidation. (b) In the event of any voluntary liquidation, dissolution or winding up of the Corporation, the holders of the shares of each series of the Second Preferred Stock shall, subject to the provisions of paragraph 6 of section I of this Article IV, be entitled to receive the amount set forth for such payment in the Issuing Resolution for that particular series, which amount shall in no case be less than $100 per share, plus an amount equal to all accumulated and unpaid dividends to the date of final distribution to such holders, and no more, before any payment or distribution of the assets of the Corporation shall be made to or set apart for the holders of the Common Stock or any other class of stock ranking junior to the Second Preferred Stock upon liquidation. (c) If, upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the assets of the Corporation, or proceeds thereof, distributable among the holders of the Second Preferred Stock shall be insufficient to pay in full the preferential amount for every series of the Second Preferred Stock, then such assets or the proceeds thereof shall be distributed among the holders of the shares of all series of the Second Preferred Stock in proportion to the respective amounts to which they would be entitled if all amounts payable thereon were paid in full. (d) For the purposes of this paragraph 6, a consolidation or merger of the Corporation with or into one or more other corporations (whether or not the Corporation is the corporation surviving such consolidation or merger), or a sale, lease or exchange of all or substantially all of the assets of the Corporation, shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary. 7. (a) If the Issuing Resolution for any series of the Second Preferred Stock provides that the Corporation, at the option of the Board of Directors, may redeem at any time all, or from time to time any part, of the shares of the Second Preferred Stock of such series at the time outstanding or if the Issuing Resolution for any series of the Second Preferred Stock provides for the creation of a sinking fund to redeem outstanding shares of that series of the Second Preferred Stock, the shares of the series to be redeemed at the option of the Board of Directors or to be redeemed through operation of the sinking fund shall be redeemed in the manner set forth in this paragraph 7. (b) Notice of every such redemption shall be mailed at least 30 days in advance of the date designated for such redemption (herein called the "redemption date") to the holders of record of the shares of the Second Preferred Stock so to be redeemed at their respective addresses as the same shall appear on the books of the Corporation. In order to facilitate the redemption of any shares of the Second Preferred Stock that may be chosen for redemption as provided in this paragraph 7, the Board of Directors shall be authorized to cause the transfer books of the Corporation to be closed as to such shares as of a date within fifteen (15) days prior to the redemption date. In case of the redemption of a part only of any series of the Second Preferred Stock at the time outstanding, the shares of such series so to be redeemed shall be selected by lot or by such other equitable method as the Board of Directors may determine. (c) If said notice of redemption shall have been given as aforesaid, and if on or before the redemption date, the funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata benefit of the holders of the shares so called for redemption, then, from and after the redemption date, notwithstanding that any certificate for shares of the Second Preferred Stock so called for redemption shall not have been surrendered for cancellation, the shares represented thereby shall not be deemed outstanding, and all rights of the holders of the shares of the Second Preferred Stock so called for redemption shall forthwith, from and after the redemption date, cease and terminate, excepting only the right to receive the redemption price therefor but without interest. Any moneys so set aside by the Corporation and unclaimed at the end of six years from the date fixed for such redemption shall revert to the general funds of the Corporation after which reversion any holder of such shares so called for redemption shall have only such rights, if any, as he may possess under applicable law to receive from the Corporation payment of the redemption price. (d) If, on or before the redemption date, the Corporation shall deposit in trust, with a bank or trust company in the Borough of Manhattan, in the City of New York, having a capital and surplus of at least $5,000,000, the funds necessary for the redemption of the shares of the Second Preferred Stock so to be redeemed, to be applied to the redemption of such shares, and if the Corporation shall have given notice of redemption as aforesaid or given irrevocable written authorization to such bank or trust company, in form satisfactory to it, for the timely giving of such notice, then from and after the time when such deposit is made all shares of the Second Preferred Stock so called for redemption shall not be deemed to be outstanding, and all rights of the holders of such shares of the Second Preferred Stock so called for redemption shall cease and terminate, excepting only the right to receive the redemption price therefor, but without interest. In case such deposit is made with a bank or trust company and any holder of shares of the Second Preferred Stock which shall have been called for redemption shall not, within one year after the redemption date, claim the amount deposited with respect to the redemption thereof, such bank or trust company shall, upon demand, pay over to the Corporation such unclaimed amount and thereupon such bank or trust company shall be relieved of all responsibility in respect thereof to such holder and such holder thereafter shall have only such rights, if any, as he may possess under applicable law to receive from the Corporation payment thereof. Any interest accrued on funds so deposited shall be paid to the Corporation from time to time. Any such unclaimed amounts paid over by any such bank or trust company to the Corporation shall, for a period terminating six years after the date fixed for redemption, be set aside and held by the Corporation in the same manner as if such unclaimed amounts had been set aside under the preceding paragraph 7(c). 8. Whether or not the Issuing Resolution for any series of the Second Preferred Stock provides for optional redemption of shares, or for a sinking fund or a purchase fund for the redemption or purchase of shares of such series, the Corporation shall have the right, subject to the provisions of paragraph 5 of section I of this Article IV and subject to any limitation thereon in any Issuing Resolution for any series of Preferred Stock or Second Preferred Stock, at any time to purchase privately or in the public markets, and to solicit tenders of, any portion or the whole of the shares of any or all series at prices which are not in excess of the respective redemption prices of such shares. 9. (a) All shares of any series of the Second Preferred Stock which have been acquired through the operation of a purchase fund or of a sinking fund or by redemption or have been credited against any purchase fund or sinking fund or have been surrendered to the Corporation on the conversion or exchange thereof into or for other shares of the Corporation shall, upon compliance with any applicable provisions of the General Corporation Law of the State of Delaware, have the status of authorized and unissued shares of the Second Preferred Stock, but shall be reissued only as, or as part of, a new series of the Second Preferred Stock to be created by an Issuing Resolution of the Board of Directors or as part of any other series of the Second Preferred Stock the terms of which do not prohibit such reissue as a part thereof, and shall not be reissued as a part of the series of which they were originally a part. (b) All shares of any series of the Second Preferred Stock which have been acquired otherwise than through the operation of a purchase fund or of a sinking fund or by redemption and which have not been credited against any purchase fund or sinking fund, and which have not been surrendered to the Corporation on the conversion or exchange thereof into or for other shares of the Corporation, shall have the status of treasury stock and may be disposed of as permitted by law. 10. So long as any of the Second Preferred Stock is outstanding, the Corporation will not, without the affirmative vote or consent of the holders of at least 66-2/3% of all of the Second Preferred Stock at the time outstanding, voting as a class regardless of series, given in person or by proxy, either in writing or by resolution adopted at a special meeting called for the purpose: (a) Amend, alter or repeal any of the provisions of this Article IV so as to affect adversely the designations, preferences and relative, participating, optional or other special rights, or the qualifications, limitations or restrictions thereof, of all of the series of the Second Preferred Stock; (b) (i) increase the authorized amount of the Preferred Stock, (ii) create any other class or classes of stock ranking senior to the Second Preferred Stock either as to dividends or upon liquidation, (iii) create any class or classes of stock which have any right to be converted into any class or classes of stock ranking senior to the Second Preferred Stock as to dividends or upon liquidation or grant any rights to any class of stock to be so converted, or (iv) merge or consolidate with or into any other corporation, if such merger or consolidation would affect adversely the designations, preferences and relative, participating, optional or other special rights, or the qualifications, limitations or restrictions thereof, of all of the series of the Second Preferred Stock. 11. The Corporation will not amend, alter or repeal any of the provisions of this Article IV or of any Issuing Resolution for series of Second Preferred Stock so as to affect adversely the designations, preferences and relative, participating, optional or other special rights, or the qualifications, limitations or restrictions thereof, of one or more, but not all, series of the Second Preferred Stock, or merge or consolidate with or into any other corporation if such merger or consolidation would affect adversely the designations, preferences and relative, participating, optional or other special rights, or the qualifications, limitations or restrictions thereof, of one or more, but not all, series of the Second Preferred Stock, without the affirmative vote or consent of the holders of at least 66-2/3% of each series so adversely affected at the time outstanding, voting as a class, in person or by proxy, either in writing or by resolution adopted at a special meeting called for the purpose, but the other series of the Second Preferred Stock not affected thereby shall not have the right to vote thereon. 12. The Corporation will not, without the affirmative vote or consent of the holders of at least a majority of all of the Second Preferred Stock at the time outstanding, voting as a class regardless of series, given in person or by proxy, either in writing or by resolution adopted at a special meeting called for the purpose, (a) increase the authorized amount of the Second Preferred Stock, (b) create any class or classes of stock ranking on a parity with the Second Preferred Stock either as to dividends or upon liquidation, or (c) create any class or classes of stock which have any right to be converted into any class or classes of stock ranking on a parity with the Second Preferred Stock as to dividends or upon liquidation or grant any rights to any class of stock to be so converted. 13. (a) If, and whenever, at any time or times, there shall remain unpaid, on any series of the Second Preferred Stock, the dividends which were payable for four full quarterly dividend periods, or if any arrearage or default in any sinking fund provided for in any Issuing Resolution shall occur under such conditions and continue for such period of time as, under the provisions of such Issuing Resolution, to entitle the holders of the outstanding shares of the Second Preferred Stock to the voting rights provided by this paragraph 13, the outstanding Second Preferred Stock of all series, voting separately as a class, shall have the right to elect two Directors and the remaining Directors shall be elected by the holders of shares of the Common Stock (subject to the voting rights of the holders of the Preferred Stock). (b) Whenever such right of the holders of the Second Preferred Stock shall have vested, such right may be exercised initially either at a special meeting of such holders of the Second Preferred Stock called as provided in this paragraph, or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders. If the date upon which such right of the holders of the Second Preferred Stock shall become vested shall be more than sixty days preceding the date of the next ensuing annual meeting of stockholders as fixed by the By-Laws of the Corporation, the President of the Corporation shall call promptly a special meeting of the holders of the Second Preferred Stock and the Common Stock to be held within thirty days for the purpose of electing a new Board of Directors (exclusive of any Directors elected to represent the Preferred Stock pursuant to the provisions of section I of this Article IV) to serve until the next annual meeting and until their successors shall be elected and shall qualify. Notice of such meeting shall be mailed to each holder of Second Preferred Stock and each holder of Common Stock not less than ten days prior to the date of such meeting. If at any such meeting any Director (other than a Director elected to represent the Preferred Stock) shall not be re-elected, his term of office shall end upon the election of his successor, notwithstanding that the term for which he was originally elected shall not then have expired. In the event that at any such meeting at which holders of the Second Preferred Stock shall be entitled to elect Directors, a quorum of the holders of the Second Preferred Stock shall not be present in person or by proxy, the holders of the Common Stock, if a quorum thereof be present, may elect the Directors whom the holders of the Second Preferred Stock were entitled, but failed, to elect. Such Directors shall be designated as having been so elected to represent the Second Preferred Stock and their successors shall be elected by the holders of the Second Preferred Stock at the next annual meeting. (c) Whenever the holders of the Second Preferred Stock shall be entitled to elect Directors as provided in paragraph 13(a) of this section II, any holder of Second Preferred Stock shall have the right, during regular business hours, in person or by a duly authorized representative, to examine and to make transcripts of the stock records of the Corporation for the Second Preferred Stock for the purpose of communicating with other holders of Second Preferred Stock with respect to the exercise of such right of election. (d) At any election of members of the Board of Directors by the Second Preferred Stock, each holder of Second Preferred Stock shall have one vote for each share of such stock standing in his name on the books of the Corporation on any record date fixed for such purpose, or, if no such date be fixed, on the date on which the election is held. (e) The right of the holders of the Second Preferred Stock, voting separately as a class, to elect members of the Board of Directors of the Corporation as aforesaid shall continue until such time as any and all unpaid dividends shall have been paid and any and all sinking fund arrearages and defaults shall have been fully cured, at which time the right of the holders of the Second Preferred Stock to elect members of the Board of Directors shall terminate, subject to revesting. (f) Whenever the holders of the Second Preferred Stock shall be divested of the right to elect members of the Board of Directors, the President of the Corporation shall, within ten days after delivery to the Corporation at its principal office of a request to such effect signed by any holder of Common Stock, call a special meeting of the holders of the Common Stock to be held within forty days after the delivery of such request for the purpose of electing a new Board of Directors (exclusive of any Directors elected to represent the Preferred Stock pursuant to the provisions of section I of this Article IV) to serve until the next annual meeting or until their respective successors shall be elected and shall qualify. If, at any such special meeting, any Director (other than a Director elected to represent the Preferred Stock) shall not be re-elected, his term of office shall terminate upon the election and qualification of his successor, notwithstanding that the term for which such Director was originally elected shall not then have expired. 14. At any annual or special meeting of stockholders held for the purpose of electing Directors when the holders of the Second Preferred Stock shall be entitled to elect members of the Board of Directors as provided in paragraph 13 of this section II, the presence in person or by proxy of the holders of one-third of all of the outstanding shares of the Second Preferred Stock regardless of series shall be required to constitute a quorum for the election by the Second Preferred Stock of such Directors, and the presence in person or by proxy of the holders of a majority of the outstanding shares of the Common Stock shall be required to constitute a quorum for the election by the Common Stock of the remaining Directors (other than Directors elected to represent the Preferred Stock pursuant to the provisions of section I of this Article IV); provided, however, that absence of a quorum of the Common Stock shall not prevent the Second Preferred Stock if it has a quorum present from electing the number of Directors such class shall be entitled to elect and the Directors so elected by the Second Preferred Stock shall replace an equal number of Directors then in office. The Directors to be replaced by those elected by the holders of the Second Preferred Stock shall be designated by the Board of Directors of the Corporation; and, if the Board of Directors shall fail to make such designation within 15 days following such meeting, then such designation shall be made by the Directors elected by the holders of the Second Preferred Stock. The absence of a quorum of the Second Preferred Stock shall not prevent the Common Stock from electing the entire Board of Directors (other than Directors elected to represent the Preferred Stock) which shall include the proper number of members to represent the Second Preferred Stock. 15. If, during any interval between annual meetings of stockholders for the election of Directors and while the holders of the Second Preferred Stock shall be entitled to elect Directors, one of the Directors in office elected by the holders of the Second Preferred Stock shall resign or die or be removed, the vacancy shall be filled by a majority vote of all of the remaining Directors then in office, although less than a quorum, who shall elect a nominee designated by the remaining Director elected by the holders of the Second Preferred Stock or his successor and if not so filled within forty days after the creation thereof, the President of the Corporation shall call a special meeting in the manner provided in paragraph 13 of this section II but limited to the holders of shares of the Second Preferred Stock and such vacancy shall be filled at such special meeting, to be held within forty days after the delivery of such request. 16. If the Corporation is unable to meet the requirements of all sinking fund and of all purchase fund provisions of all Issuing Resolutions for series of Second Preferred Stock containing such provisions, the number of shares of the respective series to be redeemed or purchased, as the case may be, shall be in proportion to the respective amounts which would be redeemed or purchased if all such provisions were complied with in full. 17. No holder of shares of any series of the Second Preferred Stock shall have any preemptive or preferential right of subscription to any stock of any class of the Corporation, or to any obligations convertible into stock of any class, or to any warrant or option for the purchase of stock of any class but the Board of Directors of the Corporation, in the Issuing Resolution creating any series of the Second Preferred Stock, may confer on that series the right to subscribe to additional shares of that series or to shares of any series of the Second Preferred Stock which may be created thereafter. III. COMMON STOCK 1. All rights shall be held and possessed by the Common Stock except for the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, conferred on the Preferred Stock and the Second Preferred Stock by applicable law, by the provisions of sections I and II of this Article IV or by the provisions of any Issuing Resolutions for series of the Preferred Stock or the Second Preferred Stock. 2. Holders of the shares of Common Stock without par value shall have no right to subscribe for or purchase any part of any new or additional issue of stock of any class whatsoever or of securities convertible into stock of any class whatsoever whether now or hereafter authorized. ARTICLE V The number of shares with which this corporation will commence business is ten (10) shares of common stock, which shares are without nominal or par value. ARTICLE VI This corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. ARTICLE VII This corporation is to have perpetual existence. ARTICLE VIII The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever. ARTICLE IX In furtherance, and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized: 1. To make, alter, amend and rescind the by-laws of this corporation, without any action on the part of the stockholders. 2. To authorize and cause to be executed mortgages and liens upon the real and personal property of this corporation. 3. To fix, determine and vary the amount to be maintained as surplus and, subject to the other provisions and requirements of this Certificate of Incorporation, the amount or amounts to be set apart or reserved as working capital or for any other lawful purposes. If so determined by the Board of Directors, the corporation may from time to time receive money and/or other property and credit the amount or value thereof to reserve or surplus, and such money or other property may be an undivided part of money or other property for another part of which stock, bonds, debentures and/or other obligations of the corporation are issued. Against any reserve or surplus so established there may be charged losses at any time incurred by the corporation, also dividends or other distributions upon stock. Such reserve or surplus may be reduced from time to time by the Board of Directors for the purposes above specified or by transfer from such reserve or surplus to capital account. 4. From time to time to determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of this corporation (other than the stock ledger), or any of them, shall be open to inspection of stockholders; and no stockholder shall have any right of inspecting any account, book or document of this corporation except as conferred by statute, unless authorized by a resolution of stockholders or directors. 5. If the by-laws so provide, to designate two or more of its number to constitute an executive committee, which committee shall for the time being, as provided in said resolution or in the by-laws of this corporation, have and exercise any or all of the powers of the Board of Directors in the management of the business and affairs of this corporation, and have power to authorize the seal of this corporation to be affixed to all papers which may require it. 6. Pursuant to the affirmative vote of the holders of at least a majority of the stock issued and outstanding having voting power, given at a stockholders' meeting duly called for that purpose, or when authorized by the written consent of the holders of a majority of the voting stock issued and outstanding, the Board of Directors shall have power and authority at any meeting to sell, lease or exchange all of the property and assets of this corporation, including its goodwill and its corporate franchises, upon such terms and conditions as its Board of Directors deem expedient and for the best interests of the corporation. 7. Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 3883 of the Revised Code of 1915 of said State, or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 43 of this Chapter, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation. 8. This corporation may in its by-laws confer powers upon its directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon them by the statute. 9. Both stockholders and directors shall have power, if the by-laws so provide, to hold their meetings, and to have one or more offices within or without the State of Delaware and to keep the books of this corporation (subject to the provisions of the statutes), outside of the State of Delaware at such places as may be from time to time designated by the Board of Directors. ARTICLE X The number of directors of this corporation shall be such number, not less than three, as shall from time to time be fixed by the by-laws of the corporation. In case of any vacancy in the Board of Directors through death, resignation, disqualification or other cause, the remaining directors, by affirmative vote of a majority thereof, may elect a successor to office for the unexpired portion of the term of the director whose place shall be vacant and until the election of a successor. ARTICLE XI A director of this corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except that nothing contained in this Article XI shall eliminate or limit the liability of a director (1) for any breach of the director's duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the Delaware General Corporation Law, or (4) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article XI shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. ARTICLE XII In the absence of fraud, no contract or transaction between this corporation and any other association or corporation shall be affected by the fact that any of the Directors or officers of this corporation are interested in or are directors or officers of such other association or corporation, and any director or officer of this corporation individually may be a party to or may be interested in any such contract or transaction of this corporation; and no such contract or transaction of this corporation with any person or persons, firm, association or corporation shall be affected by the fact that any director or officer of this corporation is a party to or interested in such contract or transaction or in any way connected with such person or persons, firm, association or corporation; and each and every person who may become a director or officer of this corporation is hereby relieved from any liability that might otherwise exist from thus contracting with this corporation for the benefit of himself or any person, firm, association or corporation in which he may be in any wise interested. IN WITNESS WHEREOF, the corporation has caused its corporate seal to be affixed and this Restated Certificate of Incorporation to be signed by its Senior Vice President and General Counsel and attested by its Secretary this 21st day of October, 1988. REYNOLDS METALS COMPANY By /s/ John H. Galea John H. Galea Senior Vice President and General Counsel ATTEST: /s/ Donald T. Cowles Donald T. Cowles Secretary bah rmet cert/inc 100688 CERTIFICATE OF OWNERSHIP AND MERGER MERGING FOIL DISTRIBUTING COMPANY INTO REYNOLDS METALS COMPANY ___________________________________ Pursuant to Section 253 of the Delaware General Corporation Law ___________________________________ REYNOLDS METALS COMPANY, a corporation incorporated on the 18th day of July, 1928, pursuant to the provisions of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that the Corporation owns all of the outstanding stock of FOIL DISTRIBUTING COMPANY, a corporation incorporated on the 4th day of April, 1983, pursuant to the provisions of the general corporation Law of the State of Delaware, and that the Corporation by resolutions of its Board of Directors duly adopted at a meeting held on the 17th day of April, 1991, determined to and did merge into itself said FOIL DISTRIBUTING COMPANY, which resolutions are as follows: RESOLVED, that this corporation, as owner of all the outstanding capital stock of Foil Distributing Company, merge into itself Foil Distributing Company and assume all of its liabilities and obligations effective as of 12:01 a.m. on April 30, 1991; and FURTHER RESOLVED, that the Chairman of the Board, the President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized to take all such other action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents, which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of such action or the execution of any such agreements, instruments or documents to be conclusive evidence of the authority to take or execute the same. This Certificate of Ownership and Merger shall be effective as of 12:01 A.M. on April 30, 1991. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed and attested by its officers thereunto duly authorized this 22nd day of April, 1991. REYNOLDS METALS COMPANY By Donald T. Cowles Vice President, General Counsel and Secretary ATTEST: Donna C. Dabney Assistant Secretary CERTIFICATE OF OWNERSHIP AND MERGER MERGING REYNOLDS OF HAWAII, INC. INTO REYNOLDS METALS COMPANY ___________________________________ Pursuant to Section 253 of the Delaware General Corporation Law ___________________________________ REYNOLDS METALS COMPANY, a corporation incorporated on the 18th day of July, 1928, pursuant to the provisions of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that the Corporation owns all of the outstanding stock of REYNOLDS OF HAWAII, INC., a corporation incorporated on the 4th day of May, 1979, pursuant to the provisions of the general corporation Law of the State of Delaware, and that the Corporation by resolutions of its Board of Directors duly adopted at a meeting held on the 17th day of April, 1991, determined to and did merge into itself said REYNOLDS OF HAWAII, INC., which resolutions are as follows: RESOLVED, that this corporation, as owner of all the outstanding capital stock of Reynolds of Hawaii, Inc., merge into itself Reynolds of Hawaii, Inc. and assume all of its liabilities and obligations effective as of 12:01 a.m. on April 30, 1991; and FURTHER RESOLVED, that the Chairman of the Board, the President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized to take all such other action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents, which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of such action or the execution of any such agreements, instruments or documents to be conclusive evidence of the authority to take or execute the same. This Certificate of Ownership and Merger shall be effective as of 12:01 A.M. on April 30, 1991. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed and attested by its officers thereunto duly authorized this 22nd day of April, 1991. REYNOLDS METALS COMPANY By Donald T. Cowles Vice President, General Counsel and Secretary ATTEST: Donna C. Dabney Assistant Secretary CERTIFICATE OF OWNERSHIP AND MERGER MERGING BROAD ST. ROAD CORPORATION INTO REYNOLDS METALS COMPANY ___________________________________ Pursuant to Section 253 of the Delaware General Corporation Law ___________________________________ REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"), does hereby certify that the Corporation owns all the outstanding stock of BROAD ST. ROAD CORPORATION, a Delaware corporation, and that the Corporation by resolutions of its Board of Directors duly adopted at a meeting held on the 15th day of November, 1991, determined to and did merge into itself BROAD ST. ROAD CORPORATION, which resolutions are as follows: RESOLVED, that this corporation, as owner of all the outstanding capital stock of Broad St. Road Corporation, merge into itself Broad St. Road Corporation and assume all of its liabilities and obligations effective as of 5:00 p.m. on December 31, 1991; and FURTHER RESOLVED, that the Chairman of the Board, the President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized to take all such other action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents, which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of such action or the execution of any such agreements, instruments or documents to be conclusive evidence of the authority to take or execute the same. This Certificate of Ownership and Merger shall be effective as of 5:00 p.m. on December 31, 1991. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed and attested by its officers thereunto duly authorized this 26th day of November, 1991. REYNOLDS METALS COMPANY By Donald T. Cowles Vice President, General Counsel and Secretary ATTEST: D. Michael Jones Assistant Secretary CERTIFICATE OF OWNERSHIP AND MERGER MERGING REYNOLDS ALUMINUM RECYCLING COMPANY INTO REYNOLDS METALS COMPANY ____________________________________ Pursuant to Section 253 of the Delaware General Corporation Law ____________________________________ REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"), does hereby certify that the Corporation owns all the outstanding stock of REYNOLDS ALUMINUM RECYCLING COMPANY, a Missouri corporation, and that the Corporation by resolutions of its Board of Directors duly adopted by unanimous written consent on December 16, 1991 pursuant to Section 141(f) of the Delaware General Corporation Law determined to and did merge into itself REYNOLDS ALUMINUM RECYCLING COMPANY, which resolutions are as follows: RESOLVED, that this corporation, as owner of all the outstanding capital stock of Reynolds Aluminum Recycling Company, merge into itself Reynolds Aluminum Recycling Company and assume all of its liabilities and obligations effective as of 5:00 p.m. on December 31, 1991 pursuant to the following Plan of Merger: 1. Reynolds Metals Company of Delaware is the survivor. 2. All of the property, rights, privileges, leases and patents of Reynolds Aluminum Recycling Company, a Missouri corporation, are to be transferred to and become the property of Reynolds Metals Company, the survivor. The officers and board of directors of the above named corporations are authorized to execute all deeds, assignments, and documents of every nature which may be needed to effectuate a full and complete transfer of ownership. 3. The officers and board of directors of Reynolds Metals Company shall continue in office until their successors are duly elected and qualified under the provisions of the by-laws of the surviving corporation. 4. It is agreed that, upon and after the issuance of a certificate of merger by the Secretary of State of the State of Missouri: a. The surviving corporation may be served with process in the State of Missouri in any proceeding for the enforcement of any obligation of any corporation organized under the laws of the State of Missouri which is a party to the merger and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such corporation organized under the laws of the State of Missouri against the surviving corporation; b. The Secretary of State of the State of Missouri shall be and hereby is irrevocably appointed as the agent of the surviving corporation to accept service of process in any such proceeding; the address to which the service of process in any such proceeding shall be mailed is: Secretary, Reynolds Metals Company, 6601 West Broad Street, Richmond, Virginia 23230; and c. The surviving corporation will promptly pay to the dissenting shareholders of any corporation organized under the laws of the State of Missouri which is a party to the merger the amount, if any, to which they shall be entitled under the provisions of "The General and Business Corporation Law of Missouri" with respect to the rights of dissenting shareholders. 5. The articles of incorporation of the survivor are not amended. provided that, at any time prior to the filing with the Delaware Secretary of State of a Certificate of Ownership and Merger merging Reynolds Aluminum Recycling Company into this corporation, the Board of Directors of this corporation may terminate this resolution and abandon the merger contemplated hereby; and FURTHER RESOLVED, that the Chairman of the Board, the President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized to take all such action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents, which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of such action or the execution of any such agreements, instruments or documents to the conclusive evidence of the authority to take or execute the same. This Certificate of Ownership and Merger shall be effective as of 5:00 p.m. on December 31, 1991. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed and attested by its officers thereunto duly authorized this 20th day of December, 1991. REYNOLDS METALS COMPANY By Donald T. Cowles Vice President, General Counsel and Secretary ATTEST: D. Michael Jones Assistant Secretary CERTIFICATE OF OWNERSHIP AND MERGER MERGING REYNOLDS SEATTLE CAN COMPANY INTO REYNOLDS METALS COMPANY _____________________________________________ Pursuant to Section 253 of the General Corporation Law of Delaware _____________________________________________ REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"), does hereby certify: FIRST: That the Corporation is incorporated pursuant to the General Corporation Law of the State of Delaware. SECOND: That the Corporation owns all of the outstanding shares of each class of the capital stock of REYNOLDS SEATTLE CAN COMPANY, a Delaware corporation. THIRD: That the Corporation, by the following resolutions of its Board of Directors, duly adopted at a meeting held on the 19th day of June, 1992, determined to merge into itself REYNOLDS SEATTLE CAN COMPANY on the conditions set forth in such resolutions: RESOLVED, that this corporation, as owner of all of the outstanding shares of each class of the capital stock of Reynolds Seattle Can Company, merge into itself Reynolds Seattle Can Company and assume all of its liabilities and obligations effective as of 5:00 p.m. E.D.T. on June 30, 1992; and FURTHER RESOLVED, that the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, any Vice Chairman, any Executive Vice President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized to take all such action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents (including, without limitation, a certificate of ownership and merger) which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of any such action or the execution of any such agreements, instruments or documents to be conclusive evidence of the authority to take or execute the same. This Certificate of Ownership and Merger shall be effective as of 5:00 p.m. E.D.T. on June 30, 1992. IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be affixed and this Certificate to be executed and attested by its officers thereunto duly authorized this 19th day of June, 1992. REYNOLDS METALS COMPANY By Donald T. Cowles Vice President, General Counsel and Secretary [SEAL] ATTEST: By: D. Michael Jones Assistant Secretary CERTIFICATE OF OWNERSHIP AND MERGER MERGING REYNOLDS ALUMINUM CREDIT CORPORATION INTO REYNOLDS METALS COMPANY Pursuant to Section 253 of the General Corporation Law of Delaware REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"), does hereby certify: FIRST: That the Corporation is incorporated pursuant to the General Corporation Law of the State of Delaware. SECOND: That the Corporations owns all of the outstanding shares of the capital stock of REYNOLDS ALUMINUM CREDIT CORPORATION, a Delaware corporation. THIRD: That the Corporation, by the following resolutions of its Board of Directors, duly adopted by unanimous written consent dated December 16, 1993, determined to merge into itself REYNOLDS ALUMINUM CREDIT CORPORATION on the conditions set forth in such resolutions: RESOLVED, that this corporation, as owner of all of the outstanding shares of the capital stock of Reynolds Aluminum Credit Corporation, merge into itself Reynolds Aluminum Credit Corporation and assume all of its liabilities and obligations effective as of 5:00 p.m. E.S.T. on December 31, 1993; FURTHER RESOLVED, that the Chief Executive Officer, the Chief Financial Officer, any Vice Chairman, any Executive Vice President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized to take all such action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents (including, without limitation, a certificate of ownership and merger) which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of any such action or the execution of any such agreements, instruments or documents to be conclusive evidence of the authority to take or execute the same. This Certificate of Ownership and Merger shall be effective as of 5:00 p.m. E.S.T. on December 31, 1993. IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be affixed and this Certificate to be executed and attested by its officers thereunto duly authorized this 29th day of December, 1993. REYNOLDS METALS COMPANY By: D. Michael Jones Vice President, General Counsel and Secretary [SEAL] ATTEST: By:Carol L. Dillon Assistant Secretary CERTIFICATE OF OWNERSHIP AND MERGER MERGING REYNOLDS KANSAS CITY CAN COMPANY INTO REYNOLDS METALS COMPANY Pursuant to Section 253 of the General Corporation Law of Delaware REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"), does hereby certify: FIRST: That the Corporation is incorporated pursuant to the General Corporation Law of the State of Delaware. SECOND: That the Corporations owns all of the outstanding shares of each class of the capital stock of REYNOLDS KANSAS CITY CAN COMPANY, a Delaware corporation. THIRD: That the Corporation, by the following resolutions of its Board of Directors, duly adopted by unanimous written consent dated December 16, 1993, determined to merge into itself REYNOLDS KANSAS CITY CAN COMPANY on the conditions set forth in such resolutions: RESOLVED, that this corporation, as owner of all of the outstanding shares of each class of the capital stock of Reynolds Kansas City Can Company, merge into itself Reynolds Kansas City Can Company and assume all of its liabilities and obligations effective as of 5:00 p.m. E.S.T. on December 31, 1993; FURTHER RESOLVED, that the Chief Executive Officer, the Chief Financial Officer, any Vice Chairman, any Executive Vice President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized to take all such action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents (including, without limitation, a certificate of ownership and merger) which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of any such action or the execution of any such agreements, instruments or documents to be conclusive evidence of the authority to take or execute the same. This Certificate of Ownership and Merger shall be effective as of 5:00 p.m. E.S.T. on December 31, 1993. IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be affixed and this Certificate to be executed and attested by its officers thereunto duly authorized this 29th day of December, 1993. REYNOLDS METALS COMPANY By:D. Michael Jones Vice President, General Counsel and Secretary [SEAL] ATTEST: By:Carol L. Dillon Assistant Secretary CERTIFICATE OF DESIGNATIONS, PREFERENCES, RIGHTS AND LIMITATIONS OF 7% PRIDES, Convertible Preferred Stock of REYNOLDS METALS COMPANY ______________________ Pursuant to Section 151 of the General Corporation Law of the State of Delaware ______________________ Reynolds Metals Company, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), hereby certifies that, under (i) authority conferred upon the Board of Directors by the Restated Certificate of Incorporation of the Corporation, as amended to date, (ii) the provisions of Sections 141(c) and 151 of the General Corporation Law of the State of Delaware, and (iii) resolutions adopted by the Board of Directors at its meeting on December 17, 1993, the 1993 Preferred Stock Committee of the Board of Directors at its meeting on January 18, 1994 duly adopted the following resolution: RESOLVED, that under (i) authority conferred upon the 1993 Preferred Stock Committee by the Board of Directors and (ii) authority conferred upon the Board of Directors by the Restated Certificate of Incorporation, as amended to date (the "Restated Certificate of Incorporation"), the 1993 Preferred Stock Committee hereby authorizes the issuance of 11,000,000 shares of authorized and unissued preferred stock, without par value, of the Corporation, and hereby fixes the designation, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such shares, in addition to those set forth in the Restated Certificate of Incorporation, as follows, to be set forth in a certificate of designations (the "Certificate of Designations"): Section 1. Designation and Size of Issue; Ranking. (a) The distinctive designation of the series of preferred stock shall be "7% PRIDES, Convertible Preferred Stock" (the "PRIDES"). The shares are Preferred Redeemable Increased Dividend Equity Securities. The number of shares constituting the PRIDES shall be 11,000,000 shares. Each share of PRIDES shall have a stated value of $47.25. (b) Any shares of the PRIDES which at any time have been redeemed for, or converted into, Common Stock, without par value, of the Corporation (the "Common Stock") or otherwise reacquired by the Corporation shall, after such redemption, conversion or other acquisition, resume the status of authorized and unissued shares of preferred stock, without par value, of the Corporation (the "Preferred Stock"), without designation as to series until such shares are once more designated as part of a particular series by the Board of Directors. (c) The shares of PRIDES shall rank on a parity, both as to payment of dividends and distribution of assets upon liquidation, with any Preferred Stock issued by the Corporation after the date of this Certificate of Designations that by its terms ranks pari passu with the PRIDES. Section 2. Dividends. (a) The holders of record of the shares of PRIDES shall be entitled to receive, when and as declared by the Board of Directors out of funds legally available therefor, cash dividends ("Preferred Dividends") from the date of the issuance of the shares of PRIDES at the rate per annum of 7 percent of the stated value per share (equivalent to $3.31 per annum or $0.8275 per quarter for each share of PRIDES), payable quarterly in arrears, on each April 1, July 1, October 1 and December 31 (each a "Dividend Payment Date") or, if any such date is not a business day (as defined herein), the Preferred Dividend due on such Dividend Payment Date shall be paid on the next succeeding business day; provided, however, that, with respect to any dividend period during which a redemption occurs, the Corporation may, at its option, declare accrued Preferred Dividends to, and pay such Preferred Dividends on, the date fixed for redemption, in which case such Preferred Dividends shall be payable to the holders of shares of PRIDES as of the record date for such dividend payment and shall not be included in the calculation of the related PRIDES Call Price (as defined herein). The first dividend period shall be from the date of initial issuance of the shares of PRIDES to but excluding April 1, 1994 and the first Preferred Dividend shall be payable on April 1, 1994. Preferred Dividends on shares of PRIDES shall be cumulative and shall accumulate from the date of original issuance. Preferred Dividends on shares of PRIDES shall cease to accrue on and after the Mandatory Conversion Date (as defined herein) or on and after the date of their earlier conversion or redemption, as the case may be. Preferred Dividends shall be payable to holders of record as they appear on the stock register of the Corporation on such record dates, not less than 15 nor more than 60 days preceding the payment date thereof, as shall be fixed by the Board of Directors. Preferred Dividends payable on shares of PRIDES for any period less than a full quarterly dividend period (or, in the case of the first Preferred Dividend, from the date of initial issuance of the shares of PRIDES to but excluding the first Dividend Payment Date) shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in any period less than one month. Preferred Dividends shall accrue on a daily basis whether or not there are funds of the Corporation legally available for the payment of such dividends and whether or not such Preferred Dividends are declared. Accrued but unpaid Preferred Dividends shall cumulate as of the Dividend Payment Date on which they first become payable, but no interest shall accrue on accumulated but unpaid Preferred Dividends. (b) As long as shares of PRIDES are outstanding, no dividends (other than dividends payable in shares of, or warrants, rights or options exercisable for or convertible into shares of, Second Preferred Stock, $100 par value, of the Corporation (the "Second Preferred Stock"), Common Stock or any other capital stock of the Corporation ranking junior to the shares of PRIDES as to the payment of dividends and the distribution of assets upon liquidation (collectively, the "Junior Stock") and cash in lieu of fractional shares in connection with any such dividend) shall be paid or declared in cash or otherwise, nor shall any other distribution be made (other than a distribution payable in Junior Stock and cash in lieu of fractional shares in connection with any such distribution), on any Junior Stock unless (i) full dividends on Preferred Stock (including the shares of PRIDES) that does not constitute Junior Stock ("Parity Preferred Stock") have been paid, or declared and set aside for payment, for all dividend periods terminating at or before the date of such Junior Stock dividend or distribution payment to the extent such dividends are cumulative; (ii) dividends in full for the current quarterly dividend period have been paid, or declared and set aside for payment, on all Parity Preferred Stock to the extent such dividends are cumulative; (iii) the Corporation has paid or set aside all amounts, if any, then or theretofore required to be paid or set aside for all purchase, retirement, and sinking funds, if any, for any Parity Preferred Stock; and (iv) the Corporation is not in default on any of its obligations to redeem any Parity Preferred Stock. (c) As long as any shares of PRIDES are outstanding, no shares of any Junior Stock may be purchased, redeemed, or otherwise acquired by the Corporation or any of its subsidiaries (except in connection with a reclassification or exchange of any Junior Stock through the issuance of other Junior Stock (and cash in lieu of fractional shares in connection therewith) or the purchase, redemption or other acquisition of any Junior Stock with any Junior Stock (and cash in lieu of fractional shares in connection therewith)) nor may any funds be set aside or made available for any sinking fund for the purchase or redemption of any Junior Stock unless: (i) full dividends on Parity Preferred Stock have been paid, or declared and set aside for payment, for all dividend periods terminating at or before the date of such purchase, redemption or other acquisition to the extent such dividends are cumulative; (ii) dividends in full for the current quarterly dividend period have been paid, or declared and set aside for payment, on all Parity Preferred Stock to the extent such dividends are cumulative; (iii) the Corporation has paid or set aside all amounts, if any, then or theretofore required to be paid or set aside for all purchase, retirement, and sinking funds, if any, for any Parity Preferred Stock; and (iv) the Corporation is not in default on any of its obligations to redeem any Parity Preferred Stock. (d) As long as any shares of PRIDES are outstanding, dividends or other distributions may not be declared or paid on any Parity Preferred Stock (other than dividends or other distributions payable in Junior Stock and cash in lieu of fractional shares in connection therewith), and the Corporation may not purchase, redeem or otherwise acquire any Parity Preferred Stock (except with any Junior Stock and cash in lieu of fractional shares in connection therewith), unless either: (a)(i) full dividends on Parity Preferred Stock have been paid, or declared and set aside for payment, for all dividend periods terminating at or before the date of such Parity Preferred Stock dividend, distribution, purchase, redemption or other acquisition payment to the extent such dividends are cumulative; (ii) dividends in full for the current quarterly dividend period have been paid, or declared and set aside for payment, on all Parity Preferred Stock to the extent such dividends are cumulative; (iii) the Corporation has paid or set aside all amounts, if any, then or theretofore required to be paid or set aside for all purchase, retirement, and sinking funds, if any, for any Parity Preferred Stock; and (iv) the Corporation is not in default on any of its obligations to redeem any Parity Preferred Stock; or (b) with respect to the payment of dividends only, any such dividends shall be declared and paid pro rata so that the amounts of any dividends declared and paid per share of PRIDES and each other share of Parity Preferred Stock shall in all cases bear to each other the same ratio that accrued dividends (including any accumulation with respect to unpaid dividends for prior dividend periods, if such dividends are cumulative) per share of PRIDES and such other shares of Parity Preferred Stock bear to each other. Section 3. Conversion or Redemption. (a) Unless previously either redeemed or converted at the option of the holder in accordance with the provisions of Section 3(c), on December 31, 1997 (the "Mandatory Conversion Date"), each outstanding share of PRIDES shall mandatorily convert ("Mandatory Conversion") into (i) shares of authorized Common Stock at the PRIDES Common Equivalent Rate (as defined herein) in effect on the Mandatory Conversion Date and (ii) the right to receive cash in an amount equal to all accrued and unpaid Preferred Dividends on such share of PRIDES (other than previously declared dividends payable to a holder of record as of a prior date) to but excluding the Mandatory Conversion Date, whether or not declared, out of funds legally available for the payment of Preferred Dividends, subject to the right of the Corporation to redeem the shares of PRIDES on or after December 31, 1996 (the "Initial Redemption Date") and before the Mandatory Conversion Date and subject to the conversion of the shares of PRIDES at the option of the holder at any time before the Mandatory Conversion Date. The "PRIDES Common Equivalent Rate" shall initially be one share of Common Stock for each share of PRIDES and shall be subject to adjustment as set forth in Sections 3(d) and 3(e). Shares of PRIDES shall cease to be outstanding on the Mandatory Conversion Date. The Corporation shall make such arrangements as it deems appropriate for the issuance of certificates representing shares of Common Stock and for the payment of cash in respect of such accrued and unpaid dividends, if any, or cash in lieu of fractional shares, if any, in exchange for and contingent upon surrender of certificates representing the shares of PRIDES, and the Corporation may defer the payment of dividends on such shares of Common Stock and the voting thereof until, and make such payment and voting contingent upon, the surrender of certificates representing the shares of PRIDES; provided, that the Corporation shall give the holders of the shares of PRIDES such notice of any such actions as the Corporation deems appropriate and upon surrender such holders shall be entitled to receive such dividends declared and paid, if any, on such shares of Common Stock subsequent to the Mandatory Conversion Date. (b)(i) Shares of PRIDES are not redeemable by the Corporation before the Initial Redemption Date. At any time and from time to time on or after that date until immediately before the Mandatory Conversion Date, the Corporation shall have the right to redeem, in whole or in part, the outstanding shares of PRIDES (subject to the notice provisions set forth in Section 3(b)(iii)). Upon any such redemption, the Corporation shall deliver to each holder thereof, in exchange for each such share of PRIDES subject to redemption, the greater of: (A) the number of shares of Common Stock equal to the applicable PRIDES Call Price (as defined herein) in effect on the redemption date divided by the Current Market Price (as defined herein) of the Common Stock, determined as of the second Trading Day (as defined herein) immediately preceding the Notice Date (as defined herein); or (B) .82 of a share of Common Stock (subject to adjustment in the same manner as the PRIDES Optional Conversion Rate (as defined herein) is adjusted). Preferred Dividends on the shares of PRIDES shall cease to accrue on and after the date fixed for their redemption. The "PRIDES Call Price" of each share of PRIDES shall be the sum of (x) $48.077 on and after the Initial Redemption Date, to and including March 31, 1997; $47.870 on and after April 1, 1997, to and including June 30, 1997; $47.663 on and after July 1, 1997, to and including September 30, 1997; $47.457 on and after October 1, 1997, to and including November 30, 1997; and $47.25 on and after December 1, 1997, to and including December 31, 1997; and (y) all accrued and unpaid Preferred Dividends thereon to but not including the date fixed for redemption (other than previously declared Preferred Dividends payable to a holder of record as of a prior date). If fewer than all the outstanding shares of PRIDES are to be called for redemption, shares of PRIDES to be called shall be selected by the Corporation from outstanding shares of PRIDES not previously called by lot or pro rata (as nearly as may be) or by any other method determined by the Board of Directors in its sole discretion to be equitable. (ii) The term "Current Market Price" per share of the Common Stock on any date of determination means the lesser of (x) the average of the Closing Prices (as defined herein) of the Common Stock for the 15 consecutive Trading Days ending on and including such date of determination, or (y) the Closing Price of the Common Stock for such date of determination; provided, however, that, with respect to any redemption of shares of PRIDES, if any event resulting in an adjustment of the PRIDES Common Equivalent Rate occurs during the period beginning on the first day of such 15-day period and ending on the applicable redemption date, the Current Market Price as determined pursuant to the foregoing shall be appropriately adjusted to reflect the occurrence of such event. (iii) The Corporation shall provide notice of any redemption of the shares of PRIDES to holders of record of the shares of PRIDES to be called for redemption not less than 15 nor more than 60 days before the date fixed for redemption. Any such notice shall be provided by mail, sent to the holders of record of the shares of PRIDES to be called at each such holder's address as it appears on the stock register of the Corporation, first class postage prepaid; provided, however, that failure to give such notice or any defect therein shall not affect the validity of the proceeding for redemption of any shares of PRIDES to be redeemed except as to the holder to whom the Corporation has failed to give such notice or whose notice was defective. A public announcement of any call for redemption shall be made by the Corporation before, or at the time of, the mailing of such notice of redemption. The term "Notice Date" with respect to any notice given by the Corporation in connection with a redemption of the shares of PRIDES means the date on which first occurs either the public announcement of such redemption or the commencement of mailing of the notice to the holders of shares of PRIDES, in each case pursuant to this Section 3(b)(iii). Each such notice shall state, as appropriate, the following and may contain such other information as the Corporation deems advisable: (A) the redemption date; (B) that all outstanding shares of PRIDES are to be redeemed or, in the case of a redemption of fewer than all outstanding shares of PRIDES, the number of such shares held by such holder to be redeemed; (C) the PRIDES Call Price, the number of shares of Common Stock deliverable upon redemption of each share of PRIDES to be redeemed and the Current Market Price used to calculate such number of shares of Common Stock; (D) the place or places where certificates for such shares are to be surrendered for redemption; and (E) that dividends on the shares of PRIDES to be redeemed shall cease to accrue on and after such redemption date (except as otherwise provided herein). (iv) The Corporation's obligation to deliver shares of Common Stock and provide funds upon redemption in accordance with this Section 3(b) shall be deemed fulfilled if, on or before a redemption date, the Corporation shall deposit with a bank or trust company, or an affiliate of a bank or trust company, having an office or agency in New York, New York and having (or such affiliate having) a combined capital and surplus of at least $50,000,000 according to its last published statement of condition, or shall set aside or make other reasonable provision for the issuance of, such number of shares of Common Stock as are required to be delivered by the Corporation pursuant to this Section 3(b) upon the occurrence of the related redemption of shares of PRIDES and for the payment of cash in lieu of the issuance of fractional share amounts and accrued and unpaid dividends payable in cash on the shares of PRIDES to be redeemed as required by this Section 3(b), in trust for the account of the holders of such shares of PRIDES to be redeemed (and so as to be and continue to be available therefor), with irrevocable instructions and authority to such bank or trust company that such shares and funds be delivered upon redemption of the shares of PRIDES so called for redemption. Any interest accrued on such funds shall be paid to the Corporation from time to time. Any shares of Common Stock or funds so deposited and unclaimed at the end of three years from such redemption date shall be repaid and released to the Corporation, after which the holder or holders of such shares of PRIDES so called for redemption shall look only to the Corporation for delivery of shares of Common Stock and the payment of any other funds due in connection with the redemption of the shares of PRIDES. (v) Each holder of shares of PRIDES called for redemption must surrender the certificates evidencing such shares (properly endorsed or assigned for transfer, if the Board of Directors shall so require and the notice shall so state) to the Corporation at the place designated in the notice of such redemption and shall thereupon be entitled to receive certificates evidencing shares of Common Stock and to receive any funds payable pursuant to this Section 3(b) following such surrender and following the date of such redemption. In case fewer than all the shares represented by any such surrendered certificate are called for redemption, a new certificate shall be issued at the expense of the Corporation representing the unredeemed shares. If such notice of redemption shall have been given, and if on the date fixed for redemption shares of Common Stock and funds necessary for the redemption shall have been irrevocably either set aside by the Corporation separate and apart from its other funds or assets in trust for the account of the holders of the shares to be redeemed (and so as to be and continue to be available therefor) or deposited with a bank or trust company or an affiliate thereof as provided herein or the Corporation shall have made other reasonable provision therefor, then notwithstanding that the certificates evidencing any shares of PRIDES so called for redemption shall not have been surrendered, the shares represented thereby so called for redemption shall be deemed no longer outstanding and Preferred Dividends with respect to the shares so called for redemption and all rights with respect to the shares so called for redemption shall forthwith on and after such date cease and terminate (unless the Corporation defaults on the payment of the redemption price), except for (i) the rights of the holders to receive the shares of Common Stock and funds, if any, payable pursuant to this Section 3(b) without interest upon surrender of their certificates therefor and (ii) the right of the holders, pursuant to Section 3(c) to convert the shares of PRIDES called for redemption until immediately before the close of business on any redemption date; provided, however, that holders of shares of PRIDES at the close of business on a record date for any payment of Preferred Dividends shall be entitled to receive the Preferred Dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares following such record date and before the Dividend Payment Date. Holders of shares of PRIDES that are redeemed shall not be entitled to receive dividends declared and paid on such shares of Common Stock, and such shares of Common Stock shall not be entitled to vote, until such shares of Common Stock are issued upon the surrender of the certificates representing such shares of PRIDES and upon such surrender such holders shall be entitled to receive such dividends declared and paid on such shares of Common Stock subsequent to such redemption date. (c) Shares of PRIDES are convertible, in whole or in part, at the option of the holders thereof ("Optional Conversion"), at any time before the Mandatory Conversion Date, unless previously redeemed, into shares of Common Stock at a rate of .82 of a share of Common Stock for each share of PRIDES (the "PRIDES Optional Conversion Rate"), subject to adjustment as set forth below. The right of Optional Conversion of shares of PRIDES called for redemption shall terminate immediately before the close of business on any redemption date with respect to such shares. Optional Conversion of shares of PRIDES may be effected by delivering certificates evidencing such shares of PRIDES, together with written notice of conversion and a proper assignment of such certificates to the Corporation or in blank (and, if applicable, cash payment of an amount equal to the Preferred Dividend attributable to the current quarterly dividend period payable on such shares), to the office of the transfer agent for the shares of PRIDES or to any other office or agency maintained by the Corporation for that purpose and otherwise in accordance with Optional Conversion procedures established by the Corporation. Each Optional Conversion shall be deemed to have been effected immediately before the close of business on the date on which the foregoing requirements shall have been satisfied. The Optional Conversion shall be at the PRIDES Optional Conversion Rate in effect at such time and on such date. Holders of shares of PRIDES at the close of business on a record date for any payment of declared Preferred Dividends shall be entitled to receive the Preferred Dividend payable on such shares of PRIDES on the corresponding Dividend Payment Date notwithstanding the Optional Conversion of such shares of PRIDES following such record date and before such Dividend Payment Date. However, shares of PRIDES surrendered for Optional Conversion after the close of business on a record date for any payment of declared Preferred Dividends and before the opening of business on the next succeeding Dividend Payment Date must be accompanied by payment in cash of an amount equal to the Preferred Dividends attributable to the current quarterly dividend period payable on such date (unless such shares of PRIDES are subject to redemption on a redemption date between such record date established for such Dividend Payment Date and such Dividend Payment Date). Except as provided above, upon any Optional Conversion of shares of PRIDES, the Corporation shall make no payment of or allowance for unpaid Preferred Dividends, whether or not in arrears, on such shares of PRIDES as to which Optional Conversion has been effected or for previously declared dividends or distributions on the shares of Common Stock issued upon Optional Conversion. (d) The PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate are each subject to adjustment from time to time as provided below in this paragraph (d). (i) If the Corporation shall pay a stock dividend or make a distribution with respect to its Common Stock in shares of Common Stock (including by way of reclassification of any shares of its Common Stock), the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate in effect at the opening of business on the day following the date fixed for the determination by stockholders entitled to receive such dividend or other distribution shall each be increased by multiplying such PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate by a fraction of which the numerator shall be the sum of the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination, immediately before such dividend or distribution, plus the total number of shares of Common Stock constituting such dividend or other distribution, and of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination, immediately before such dividend or distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this clause (i), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation but shall include shares issuable in respect of certificates issued in lieu of fractions of shares of Common Stock. (ii) In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall each be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall each be proportionately reduced, such increases or reductions, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (iii) If the Corporation shall, after the date of this Certificate of Designations, issue rights or warrants to all holders of its Common Stock entitling them (for a period not exceeding 45 days from the date of such issuance) to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price of the Common Stock (determined pursuant to Section 3(b)(ii)) on the record date for the determination of stockholders entitled to receive such rights or warrants, then in each case the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate shall each be adjusted by multiplying the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate in effect on such record date by a fraction of which the numerator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants, immediately before such issuance, plus the number of additional shares of Common Stock offered for subscription or purchase pursuant to such rights or warrants, and of which the denominator shall be the number of shares of Common Stock outstanding on the date of issuance of such rights or warrants, immediately before such issuance, plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase pursuant to such rights or warrants would purchase at such Current Market Price (determined by multiplying such total number of shares by the exercise price of such rights or warrants and dividing the product so obtained by such Current Market Price). Shares of Common Stock held by the Corporation or by another corporation of which a majority of the shares entitled to vote in the election of directors are held, directly or indirectly, by the Corporation shall not be deemed to be outstanding for purposes of such computation. Such adjustment shall become effective at the opening of business on the business day next following the record date for the determination of stockholders entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate shall each be readjusted to the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate which would then be in effect had the adjustments made after the issuance of such rights or warrants been made upon the basis of issuance of rights or warrants in respect of only the number of shares of Common Stock actually delivered. (iv) If the Corporation shall pay a dividend or make a distribution to all holders of its Common Stock consisting of evidences of its indebtedness, cash or other assets (including shares of capital stock of the Corporation other than Common Stock but excluding any cash dividends or distributions, other than Extraordinary Cash Distributions (as defined herein) and dividends referred to in clauses (i) and (ii) above), or shall issue to all holders of its Common Stock rights or warrants to subscribe for or purchase any of its securities (other than those referred to in clause (iii) above), then in each such case, the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate shall each be adjusted by multiplying the PRIDES Common Equivalent Rate and the PRIDES Optional Conversation Rate in effect on the record date for such dividend or distribution or for the determination of stockholders entitled to receive such rights or warrants, as the case may be, by a fraction of which the numerator shall be the Current Market Price per share of the Common Stock (determined pursuant to Section 3(b)(ii) on such record date), and of which the denominator shall be such Current Market Price per share of Common Stock less either (i) the fair market value (as determined by the Board of Directors, whose determination shall be conclusive) on such record date of the portion of the assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, applicable to one share of Common Stock, or (ii) if applicable, the amount of the Extraordinary Cash Distributions. Such adjustment shall become effective on the opening of business on the business day next following the record date for such dividend or distribution or for the determination of holders entitled to receive such rights or warrants, as the case may be. (v) Any shares of Common Stock issuable in payment of a dividend or other distribution shall be deemed to have been issued immediately before the close of business on the record date for such dividend or other distribution for purposes of calculating the number of outstanding shares of Common Stock under this Section 3. (vi) Anything in this Section 3 notwithstanding, the Corporation shall be entitled (but shall not be required) to make such upward adjustments in the PRIDES Common Equivalent Rate, the PRIDES Optional Conversion Rate and the PRIDES Call Price in addition to those set forth by this Section 3, as the Corporation, in its sole discretion, shall determine to be advisable, in order that any stock dividends, subdivision of stock, distribution of rights to purchase stock or securities, or distribution of securities convertible into or exchangeable for stock (or any transaction that could be treated as any of the foregoing transactions pursuant to Section 305 of the Internal Revenue Code of 1986, as amended) hereafter made by the Corporation to its stockholders shall not be taxable. The term "Extraordinary Cash Distribution" means, with respect to any consecutive 12-month period, all cash dividends and cash distributions on the Common Stock during such period (other than cash dividends and cash distributions for which a prior adjustment to the PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate was previously made) to the extent such dividends and distributions exceed, on a per share of Common Stock basis, 10% of the average daily Closing Price of the Common Stock over such period. (vii) In any case in which this Section 3(d) shall require that an adjustment as a result of any event become effective at the opening of business on the business day next following a record date and the date fixed for conversion pursuant to Section 3(a) or redemption pursuant to Section 3(b) on and after such record date, but before the occurrence of such event, the Corporation may, in its sole discretion, elect to defer the following until after the occurrence of such event: (A) issuing to the holder of any shares of PRIDES surrendered for conversion or redemption the fractional shares of Common Stock issuable before giving effect to such adjustment; and (B) paying to such holder any amount in cash in lieu of a fractional share of Common Stock pursuant to Section 4. (viii) All adjustments to the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate shall be calculated to the nearest 1/100th of a share of Common Stock. No adjustment in the PRIDES Common Equivalent Rate or in the PRIDES Optional Conversion Rate shall be required unless such adjustment would require an increase or decrease of at least one percent therein; provided, however, that any adjustments which by reason of this Section 3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All adjustments to the PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate shall be made successively. (ix) At least 10 business days before taking any action that could result in an adjustment affecting the PRIDES Common Equivalent Rate or the PRIDES Optional Conversion Rate such that the conversion price (for purposes of this section, an amount equal to the PRIDES Call Price divided by the PRIDES Common Equivalent Rate or the PRIDES Optional Conversion Rate, respectively, as in effect from time to time) would be below the then par value of the Common Stock, the Corporation shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at the PRIDES Common Equivalent Rate or the PRIDES Optional Conversion Rate as so adjusted. (x) Before redeeming any shares of PRIDES, the Corporation shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock upon such redemption. (e) In case of any consolidation or merger to which the Corporation is a party (other than a consolidation or merger in which the Corporation is the surviving or continuing corporation and in which the shares of Common Stock outstanding immediately before the merger or consolidation remain unchanged), or in the case of any sale or transfer to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or in the case of a statutory exchange of securities with another corporation (other than in connection with a merger or acquisition), each share of PRIDES shall, after consummation of such transaction, be subject to (i) conversion at the option of the holder into the kind and amount of securities, cash, or other property receivable upon consummation of such transaction by a holder of the number of shares of Common Stock into which such share of PRIDES might have been converted immediately before consummation of such transaction, (ii) conversion on the Mandatory Conversion Date into the kind and amount of securities, cash, or other property receivable upon consummation of such transaction by a holder of the number of shares of Common Stock into which such share of PRIDES would have been converted if the conversion on the Mandatory Conversion Date had occurred immediately before the date of consummation of such transaction, plus the right to receive cash in an amount equal to all accrued and unpaid dividends on such share of PRIDES (other than previously declared dividends payable to a holder of record as of a prior date), and (iii) redemption on any redemption date in exchange for the kind and amount of securities, cash, or other property receivable upon consummation of such transaction by a holder of the number of shares of Common Stock that would have been issuable at the PRIDES Call Price in effect on such redemption date upon a redemption of such share of PRIDES immediately before consummation of such transaction, assuming that, if the Notice Date for such redemption is not before such transaction, the Notice Date had been the date of such transaction; and assuming in each case that such holder of shares of Common Stock failed to exercise rights of election, if any, as to the kind or amount of securities, cash, or other property receivable upon consummation of such transaction (provided that, if the kind or amount of securities, cash, or other property receivable upon consummation of such transaction is not the same for each non-electing share, then the kind and amount of securities, cash, or other property receivable upon consummation of such transaction for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). The kind and amount of securities into or for which the shares of PRIDES shall be convertible or redeemable after consummation of such transaction shall be subject to adjustment as described in Section 3(d) following the date of consummation of such transaction. The Corporation may not become a party to any such transaction unless the terms thereof are consistent with the foregoing. (f) Whenever the PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate are adjusted as provided in Section 3(d), the Corporation shall: (i) forthwith compute the adjusted PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate in accordance with this Section 3 and prepare a certificate signed by the Chief Financial Officer, any Vice President, the Treasurer or the Controller of the Corporation setting forth the adjusted PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate, the method of calculation thereof in reasonable detail and the facts requiring such adjustment and upon which such adjustment is based, which certificate shall be conclusive, final and binding evidence of the correctness of the adjustment, and shall file such certificate forthwith with the transfer agent for the shares of the PRIDES and the Common Stock; (ii) make a prompt public announcement stating that the PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate have been adjusted and setting forth the adjusted PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate; (iii) mail a notice stating that the PRIDES Common Equivalent Rate and the PRIDES Optional Conversion Rate have been adjusted, the facts requiring such adjustment and upon which such adjustment is based and setting forth the adjusted PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate, to the holders of record of the outstanding shares of PRIDES, at or prior to the time the Corporation mails an interim statement, if any, to its stockholders covering the fiscal quarter period during which the facts requiring such adjustment occurred, but in any event within 45 days of the end of such fiscal quarter period. (g) In case, at any time while any of the shares of PRIDES are outstanding, (i) the Corporation shall declare a dividend (or any other distribution) on the Common Stock, excluding any cash dividends other than Extraordinary Cash Distributions; or (ii) the Corporation shall authorize the issuance to all holders of the Common Stock of rights or warrants to subscribe for or purchase shares of the Common Stock or of any other subscription rights or warrants; or (iii) the Corporation shall authorize any reclassification of the Common Stock (other than a subdivision or combination thereof) or any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation is required (except for a merger of the Corporation into one of its subsidiaries solely for the purpose of changing the corporate domicile of the Corporation to another state of the United States and in connection with which there is no substantive change in the rights or privileges of any securities of the Corporation other than changes resulting from differences in the corporate statutes of the state the Corporation was then domiciled in and the new state of domicile), or the sale or transfer of all or substantially all of the assets of the Corporation; then the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of the shares of PRIDES, and shall cause to be mailed to the holders of shares of PRIDES at their last addresses as they shall appear on the stock register of the Corporation, at least 10 business days before the date hereinafter specified in clause (A) or (B) below (or the earlier of the dates hereinafter specified, in the event that more than one date is specified), a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined, or (B) the date on which any such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property (including cash), if any, deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. The failure to give or receive the notice required by this paragraph (g) or any defect therein shall not affect the legality or validity of any such dividend, distribution, right or warrant or other action. Section 4. No Fractional Shares. No fractional shares of Common Stock shall be issued upon redemption or conversion of any shares of the PRIDES. In lieu of any fractional share otherwise issuable in respect of the aggregate number of shares of the PRIDES of any holder that are redeemed or converted on any redemption date or upon Mandatory Conversion or Optional Conversion, such holder shall be entitled to receive an amount in cash (computed to the nearest cent) equal to the same fraction of the (i) Current Market Price of the Common Stock (determined as of the second Trading Day immediately preceding the Notice Date) in the case of redemption, or (ii) Closing Price of the Common Stock determined (A) as of the fifth Trading Day immediately preceding the Mandatory Conversion Date, in the case of Mandatory Conversion, or (B) as of the second Trading Day immediately preceding the effective date of conversion, in the case of an Optional Conversion by a holder. If more than one share of PRIDES shall be surrendered for conversion or redemption at one time by or for the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of the PRIDES so surrendered or redeemed. Section 5. Reservation of Common Stock. The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion or redemption of shares of PRIDES, as herein provided, free from preemptive rights, such maximum number of shares of Common Stock as shall from time to time be issuable upon the Mandatory Conversion or Optional Conversion or redemption of all the shares of PRIDES then outstanding. Section 6. Definitions. As used in this Certificate of Designations: (i) the term "business day" shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close; (ii) the term "Closing Price", on any day, shall mean the last sale price as shown on the New York Stock Exchange Composite Tape on such day, or, in case no such sale takes place on such day, the average of the reported closing bid and asked prices regular way on the New York Stock Exchange, or, if the Common Stock is not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the average of the closing bid and asked prices of the Common Stock on the over-the-counter market on the day in question as reported by the National Association of Securities Dealers, Inc. Automated Quotation System, or a similar generally accepted reporting service, or if not so available in such manner, as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose; (iii) the term "record date" shall be such date as from time to time fixed by the Board of Directors with respect to the receipt of dividends, the receipt of a redemption price upon redemption or the taking of any action or exercise of any voting rights permitted hereby; and (iv) the term "Trading Day" shall mean a date on which the New York Stock Exchange (or any successor to such Exchange) is open for the transaction of business. Section 7. Payment of Taxes. The Corporation shall pay any and all documentary, stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on the redemption or conversion of shares of PRIDES pursuant to Section 3; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any registration of transfer involved in the issue or delivery of shares of Common Stock in a name other than that of the registered holder of shares of PRIDES redeemed or converted or to be redeemed or converted, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid. Section 8. Liquidation Rights. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Corporation, and subject to the rights of holders of any other series of Preferred Stock, the holders of outstanding shares of PRIDES are entitled to receive the sum of $47.25 per share, plus an amount equal to any accrued and unpaid Preferred Dividends thereon, out of the assets of the Corporation available for distribution to stockholders, before any distribution of assets is made to holders of Second Preferred Stock, Common Stock or any other capital stock ranking junior to the shares of PRIDES upon liquidation, dissolution, or winding up. If upon any voluntary or involuntary liquidation, dissolution, or winding up of the Corporation, the assets of the Corporation are insufficient to permit the payment of the full preferential amounts payable with respect to the shares of PRIDES and all other series of Parity Preferred Stock, the holders of shares of PRIDES and of all other series of Parity Preferred Stock shall share ratably in any distribution of assets of the Corporation in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of the liquidating distribution to which they are entitled, the holders of shares of PRIDES shall not be entitled to any further participation in any distribution of assets by the Corporation. A consolidation or merger of the Corporation with or into one or more other corporations (whether or not the Corporation is the corporation surviving such consolidation or merger), or a sale, lease or exchange of all or substantially all of the assets of the Corporation shall not be deemed to be a voluntary or involuntary liquidation, dissolution, or winding up of the Corporation. Section 9. Voting Rights. (a) The holders of shares of PRIDES shall have the right with the holders of Common Stock to vote in the election of directors and upon each other matter coming before any meeting of the holders of Common Stock on the basis of 4/5 of a vote for each share of PRIDES held. The holders of shares of PRIDES and the holders of Common Stock shall vote together as one class on such matters except as otherwise provided by law or by the Restated Certificate of Incorporation. (b) In the event that dividends on the shares of PRIDES or any other series of Preferred Stock shall be in arrears and unpaid for six quarterly dividend periods, or if any series of Preferred Stock (other than the PRIDES) shall be entitled for any other reason to exercise voting rights, separate from the Common Stock, to elect any directors of the Corporation ("Preferred Stock Directors"), the holders of the shares of PRIDES (voting separately as a class with holders of all other series of Preferred Stock upon which like voting rights have been conferred and are exercisable), with each share of PRIDES entitled to one vote on this and other matters in which Preferred Stock votes as a group, shall be entitled to vote for the election of two directors of the Corporation, such directors to be in addition to the number of directors constituting the Board of Directors immediately before the accrual of such right. Such right, when vested, shall continue until all cumulative dividends accumulated and payable on the shares of PRIDES and such other series of Preferred Stock shall have been paid in full and the right of any other series of Preferred Stock to exercise voting rights, separate from the Common Stock, to elect Preferred Stock Directors shall terminate or have terminated, and, when so paid and any such termination occurs or has occurred, such right of the holders of the shares of PRIDES shall cease. The term of office of any director elected by the holders of the shares of PRIDES and such other series shall terminate on the earlier of (i) the next annual meeting of stockholders at which a successor shall have been elected and qualified or (ii) the termination of the right of holders of the shares of PRIDES and such other series to vote for such directors. (c) The Corporation shall not, without the approval of the holders of at least 66-2/3 percent of the shares of PRIDES then outstanding: (i) amend, alter, or repeal any of the provisions of the Restated Certificate of Incorporation or By-Laws of the Corporation so as to affect adversely the powers, preferences or rights of the holders of the shares of PRIDES then outstanding or reduce the minimum time for any required notice to which the holders of the shares of PRIDES then outstanding may be entitled (an amendment of the Restated Certificate of Incorporation to authorize or create, or to increase the authorized amount of, Junior Stock or any stock of any class ranking on a parity with the PRIDES being deemed not to affect adversely the powers, preferences, or rights of the holders of the shares of PRIDES); (ii) authorize or create, or increase the authorized amount of, any capital stock, or any security convertible into capital stock of any class, ranking prior to the shares of PRIDES either as to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up of the Corporation; or (iii) merge or consolidate with or into any other corporation, unless each holder of shares of PRIDES immediately preceding such merger or consolidation shall receive or continue to hold in the resulting corporation the same number of shares, with substantially the same rights and preferences, as correspond to the shares of PRIDES so held. (d) The Corporation shall not, without the approval of the holders of at least a majority of the shares of PRIDES then outstanding: (i) increase the authorized number of shares of Preferred Stock; or (ii) create any other class or classes of capital stock of the Corporation ranking on a parity with the Preferred Stock, either as to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up of the Corporation, or create any stock or other security convertible into or exchangeable for or evidencing the right to purchase any stock of such other class ranking on a parity with the Preferred Stock, or increase the authorized number of shares of any such other class or amount of such other stock or security. (e) Notwithstanding the provisions set forth in Sections 9(c) and 9(d), no such approval described therein of the holders of the shares of PRIDES shall be required if, at or before the time when such amendment, alteration, or repeal is to take effect or when the authorization, creation, increase or issuance of any such prior or parity stock or convertible security is to be made, or when such consolidation or merger, voluntary liquidation, dissolution, or winding up, sale, lease, conveyance, purchase, or redemption is to take effect, as the case may be, provision is made for the redemption of all shares of PRIDES at the time outstanding. IN WITNESS WHEREOF, Reynolds Metals Company has caused this certificate to be signed and attested this 20th day of January, 1994. REYNOLDS METALS COMPANY By: Henry S. Savedge, Jr. Name: Henry S. Savedge, Jr. Title: Executive Vice President and Chief Financial Officer Attest: D. Michael Jones Name: D. Michael Jones Title: Vice President, General Counsel and Secretary CERTIFICATE OF OWNERSHIP AND MERGER MERGING R/M CAN COMPANY AND BEV-PAK, INC. INTO REYNOLDS METALS COMPANY _____________________________________________ Pursuant to Section 253 of the General Corporation Law of Delaware _____________________________________________ REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"), does hereby certify: FIRST: That the Corporation is incorporated pursuant to the General Corporation Law of the State of Delaware. SECOND: That the Corporation owns all of the outstanding shares of each class of the capital stock of R/M CAN COMPANY and BEV-PAK, INC., each a Delaware corporation. THIRD: That the Corporation, by the following resolutions of its Board of Directors, duly adopted at a meeting held on the 21st day of October, 1994, determined to merge into itself R/M CAN COMPANY and BEV-PAK, INC. on the conditions set forth in such resolutions: RESOLVED, that the corporation, as owner of all of the outstanding shares of each class of the capital stock of R/M Can Company and Bev-Pak, Inc., merge into itself R/M Can Company and Bev-Pak, Inc. and assume all of their respective liabilities and obligations effective as of 11:59 p.m. E.S.T. on December 31, 1994; and FURTHER RESOLVED, that the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, any Vice Chairman of the Board, any Executive Vice President, any Vice President, the Secretary and any Assistant Secretary are each hereby authorized on behalf of the corporation to take all such action, including, without limitation, incurrence and payment of all fees, expenses and other charges, and to execute and deliver all such agreements, instruments and documents (including, without limitation, a certificate of ownership and merger and documents relating to employee benefit plans maintained for employees of Bev-Pak, Inc.) which in the opinion of any of them may be necessary or desirable to achieve the purposes of or effect the transactions contemplated by the preceding resolution, the taking of any such action or the execution and delivery of any such agreements, instruments or documents to be conclusive evidence of the authority to take, execute or deliver the same. This Certificate of Ownership and Merger shall be effective as of 11:59 p.m. E.S.T. on December 31, 1994. IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be affixed and this Certificate to be executed and attested by its officers thereunto duly authorized this 29th day of November, 1994. REYNOLDS METALS COMPANY By _______________________________ Vice President, General Counsel and Secretary [SEAL] ATTEST: By: ___________________________ Assistant Secretary EX-3 3 EXHIBIT 3.2 By-Laws of REYNOLDS METALS COMPANY Table of Contents Page ARTICLE I - Stock Section 1. Certificates for Stock. . . . . . . . . . . . . . . l Section 2. Transfers of Stock . . . . . . . . . . . . . . . . 1 Section 3. Holders of Record . . . . . . . . . . . . . . . . . 1 Section 4. Lost or Destroyed Certificates. . . . . . . . . . . 2 ARTICLE II - Stockholders' Meetings Section 1. Place of Meetings . . . . . . . . . . . . . . . . . 2 Section 2. Annual Meetings . . . . . . . . . . . . . . . . . . 2 Section 3. Special Meetings. . . . . . . . . . . . . . . . . . 2 Section 4. Matters to be Brought Before Stockholders Meetings . . . . . . . . . . . . . . . 2 Section 5. Notice of Meetings. . . . . . . . . . . . . . . . . 3 Section 6. Quorum. . . . . . . . . . . . . . . . . . . . . . . 4 Section 7. Adjourned Meetings. . . . . . . . . . . . . . . . . 4 Section 8. Inspectors of Election. . . . . . . . . . . . . . . 4 Section 9. List of Stockholders. . . . . . . . . . . . . . . . 5 Section 10. Voting. . . . . . . . . . . . . . . . . . . . . . . 5 Section 11. Consents in Writing . . . . . . . . . . . . . . . . 5 ARTICLE III - Board of Directors Section 1. Number; Term of Office; Powers. . . . . . . . . . . 6 Section 2. Resignations. . . . . . . . . . . . . . . . . . . . 6 Section 3. Vacancies . . . . . . . . . . . . . . . . . . . . . 6 Section 4. Annual Meeting. . . . . . . . . . . . . . . . . . . 6 Section 5. Regular Meetings. . . . . . . . . . . . . . . . . . 6 Section 6. Special Meetings. . . . . . . . . . . . . . . . . . 6 Section 7. Notice of Meetings. . . . . . . . . . . . . . . . . 7 Section 8. Quorum; Adjourned Meetings; Required Vote . . . . . . . . . . . . . . . . . . . 7 Section 9. Committees. . . . . . . . . . . . . . . . . . . . . 7 Section 10. Compensation. . . . . . . . . . . . . . . . . . . . 8 Section 11. Consents in Writing . . . . . . . . . . . . . . . . 8 Section 12. Participation by Conference Telephone . . . . . . . 8 Table of Contents, Continued ARTICLE IV - Officers Section 1. Officers. . . . . . . . . . . . . . . . . . . . . . 8 Section 2. Chairman of the Board . . . . . . . . . . . . . . . 9 Section 3. Vice Chairmen of the Board. . . . . . . . . . . . . 9 Section 4. President . . . . . . . . . . . . . . . . . . . . . 9 Section 5. Vice Presidents . . . . . . . . . . . . . . . . . . 9 Section 6. General Counsel . . . . . . . . . . . . . . . . . . 9 Section 7. Secretary . . . . . . . . . . . . . . . . . . . . . 9 Section 8. Treasurer . . . . . . . . . . . . . . . . . . . . . 9 Section 9. Controller. . . . . . . . . . . . . . . . . . . . . 10 Section 10. Other Officers and Assistant Officers . . . . . . . 10 Section 11. Term of Office; Vacancies . . . . . . . . . . . . . 10 Section 12. Removal . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE V - Dividends and Finance Section 1. Dividends . . . . . . . . . . . . . . . . . . . . . 10 Section 2. Deposits; Withdrawals; Notes and Other Instruments . . . . . . . . . . . . . . . . . . . . 10 Section 3. Fiscal Year . . . . . . . . . . . . . . . . . . . . 10 ARTICLE VI - Books and Records; Record Date Section 1. Books and Records . . . . . . . . . . . . . . . . . 11 Section 2. Record Date . . . . . . . . . . . . . . . . . . . . 11 ARTICLE VII - Notices Section 1. Notices . . . . . . . . . . . . . . . . . . . . . . 12 Section 2. Waivers of Notice . . . . . . . . . . . . . . . . . 12 ARTICLE VIII - Contracts Section 1. Interested Directors or Officers. . . . . . . . . . 12 ARTICLE IX - Seal Section 1. Seal. . . . . . . . . . . . . . . . . . . . . . . . 13 ARTICLE X - Indemnification Section 1. Indemnification in Third Party Actions . . . . . . . . . . . . . . . . . . . . . . 13 Section 2. Indemnification in an Action by or in the Right of the Corporation. . . . . . . . . . . . 14 Section 3. Indemnification as of Right . . . . . . . . . . . . 14 Section 4. Determination of Indemnification. . . . . . . . . . 15 Section 5. Advance for Expenses. . . . . . . . . . . . . . . . 15 Section 6. General Provisions. . . . . . . . . . . . . . . . . 15 ARTICLE XI - Amendments Section 1. Amendments. . . . . . . . . . . . . . . . . . . . . 16 By-Laws of REYNOLDS METALS COMPANY (Incorporated under the Laws of Delaware) ARTICLE I - Stock 1. Certificates for Stock. Certificates of Stock shall be issued in numerical order, be signed by the Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and sealed with the corporate seal; provided, that where any Certificate of Stock is signed by a duly appointed and authorized Transfer Agent or Registrar the signatures of the Chairman of the Board of Directors, Vice Chairman of the Board of Directors, the President, Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer may be facsimile, engraved or printed, and the seal of the corporation on any such Certificate of Stock may be facsimile, engraved or printed. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. 2. Transfers of Stock. Transfers of stock shall be made only upon the books of the corporation, and only by the person named in the certificate or by attorney, lawfully constituted in writing, and only upon surrender of the certificate therefor. The directors may by resolution make reasonable regulations for the transfers of stock. 3. Holders of Record. Registered stockholders only shall be entitled to be treated by the corporation as the holders in fact of the stock standing in their respective names and the corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the laws of Delaware. 4. Lost or Destroyed Certificates. In case of loss or destruction of any certificate of stock another may be issued in its place upon satisfactory proof of such loss or destruction and upon the giving of a satisfactory bond of indemnity to the corporation, all as determined either expressly by the directors or pursuant to general authority granted by them. ARTICLE II - Stockholders' Meetings 1. Place of Meetings. Meetings of the stockholders shall be held at such place, within or outside the State of Delaware, as the Board of Directors may determine. 2. Annual Meeting. The annual meeting of the stockholders of the corporation, for the election of directors to succeed those whose terms expire, and for the transaction of such other business as may come before the meeting, shall be held on the first Wednesday after April 15th of each year, if not a legal holiday, and if a legal holiday, then on the first business day following, at eleven o'clock in the forenoon, or on such other date and at such other time as may be fixed by the Board of Directors. If the annual meeting of the stockholders be not held as herein prescribed, the election of directors may be held at any meeting thereafter called pursuant to these By-Laws. 3. Special Meetings. Special meetings of the stockholders may be called by the Chairman of the Board of Directors, or a Vice Chairman of the Board of Directors, or the President or by the Board of Directors, and shall be called at any time by the Board of Directors upon the request in writing of stockholders entitled to cast a majority of the votes which all stockholders are entitled to cast. Such request must state the purpose of the meeting. 4. Matters to be Brought Before Stockholders Meetings. Except as otherwise provided by law, at any annual or special meeting of stockholders only such business shall be conducted as shall have been properly brought before the meeting in accordance with this Section. In order to be properly brought before the meeting, such business must have either been (i) specified in the written notice of the meeting (or any supplement thereto) given to stockholders of record on the record date for such meeting by or at the direction of the Board of Directors, (ii) brought before the meeting at the direction of the Board of Directors or the officer presiding over the meeting, or (iii) specified in a written notice given by or on behalf of a stockholder of record on the record date for such meeting entitled to vote thereat or a duly authorized proxy for such stockholder, in accordance with all of the following requirements. A notice referred to in clause (iii) hereof must be delivered personally to, or mailed to and received at, the principal executive office of the corporation, addressed to the attention of the Secretary, not more than ten (10) days after the date of the initial notice referred to in clause (i) hereof, in the case of business to be brought before a special meeting of stockholders, and not less than thirty (30) days prior to the first anniversary date of the initial notice referred to in clause (i) hereof of the previous year's annual meeting, in the case of business to be brought before an annual meeting of stockholders, provided, however, that such notice shall not be required to be given more than ninety (90) days prior to an annual meeting of stockholders. Such notice referred to in clause (iii) hereof shall set forth: (a) a full description of each such item of business proposed to be brought before the meeting; (b) the name and address of the person proposing to bring such business before the meeting; (c) the class and number of shares held of record, held beneficially and represented by proxy by such person as of the record date for the meeting (if such date has then been made publicly available) and as of the date of such notice; (d) if any item of such business involves a nomination for director, all information regarding each such nominee that would be required to be set forth in a definitive proxy statement filed with the Securities and Exchange Commission pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, or any successor thereto and the written consent of each such nominee to serve if elected; and (e) all other information that would be required to be filed with the Securities and Exchange Commission if, with respect to the business proposed to be brought before the meeting, the person proposing such business was a participant in a solicitation subject to Section 14 of the Securities Exchange Act of 1934, as amended, or any successor thereto. No business shall be brought before any meeting of stockholders of the corporation otherwise than as provided in this Section. 5. Notice of Meetings. Written notice of the place, date and hour of the annual and of all special meetings of the stockholders and, in the case of special meetings, of the purpose or purposes for which such special meeting is called, shall be given in the manner specified in Section l of Article VII of these By-Laws not less than ten (10) nor more than sixty (60) days prior to the meeting, to each stockholder of record of the corporation entitled to vote thereat. Business transacted at all special meetings shall be confined to the purposes stated in the notice. 6. Quorum. A quorum at any annual or special meeting of the stockholders shall consist of the presence, in person or by proxy, of stockholders entitled to cast a majority of the votes which all stockholders are entitled to cast, except as otherwise specifically provided by law or in the Certificate of Incorporation. 7. Adjourned Meetings. If a quorum be not present at a properly called stockholders' meeting, the meeting may be adjourned from time to time by a majority in interest of those present in person or by proxy and entitled to vote thereat. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting; otherwise, no notice of such adjourned meeting need be given if the time and place thereof are announced at the meeting at which the adjournment is taken. The absence from any meeting of stockholders holding the number of shares of stock of the corporation required by law, the Certificate of Incorporation or these By-Laws for action upon any given matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if there shall be present thereat in person or by proxy stockholders holding the number of shares of stock of the corporation required in respect of such other matter or matters. 8. Inspectors of Election. In advance of any meeting of stockholders or any corporate action to be taken by the stockholders in writing without a meeting, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or Secretary of the corporation shall appoint one or more inspectors of election to serve at such meeting or to examine such written consents and to make a written report with respect thereto. In addition, any such officer may, but shall not be required to, designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer at such meeting shall appoint one or more inspectors to act at the meeting. Each inspector shall discharge his or her duties in accordance with applicable law and shall, before entering upon the discharge of his or her duties, take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. 9. List of Stockholders. A complete list of the stockholders entitled to vote at each annual or special meeting of the stockholders of the corporation, arranged in alphabetical order, showing the address of record of each and the number of voting shares held by each, shall be prepared by the Secretary, who shall have charge of the stock ledger, and filed in the City (or, if such meeting is to be held at a place not within any city, then in the county) where the meeting is to be held, at a location specified in the Notice of Meeting, or if no such location is specified in such notice, at the place where the meeting is to be held, at least ten (10) days before every such meeting, and shall, during the usual hours for business, be open to the examination of any stockholder for any purpose germane to the meeting, and during the whole time of said meeting be open to the examination of any stockholder. 10. Voting. Subject to the provisions of Article VI, Section 2 of these By-Laws, and except where a different vote per share is prescribed by the Certificate of Incorporation for a class of stock, each holder of stock of a class which is entitled to vote in any election or on any other questions at any annual or special meeting of the stockholders shall be entitled to one vote, in person or by written proxy, for each share of such class held of record. Except where, and to the extent that, a different percentage of votes and/or a different exercise of voting power is prescribed by law, the Certificate of Incorporation or these By-Laws, all elections and other questions shall be decided by the vote of stockholders, present in person or by proxy and entitled to vote, representing a majority of the votes cast. Abstentions shall be counted in the tabulation of the votes cast. The votes for directors, and, upon demand of any stockholder, or where required by law, the votes upon any question before the meeting, shall be by ballot; otherwise, the election shall be held as the presiding officer prescribes. 11. Consents in Writing. Any action which might have been taken under these By-Laws by a vote of the stockholders at a meeting thereof may be taken by them without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken shall be signed by the holders of outstanding shares of stock of the corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted; provided, that prompt notice of the taking of such corporate action shall be given to those stockholders who have not consented thereto if less than unanimous written consent is obtained. ARTICLE III - Board of Directors 1. Number; Term of Office; Powers. The business and affairs of the corporation shall be under the direction of a Board of Directors, consisting of sixteen (16) persons. Directors shall be elected for one year, and shall hold office until their successors are elected and qualified. Directors need not be stockholders. In addition to the power and authority expressly conferred upon them by the By-Laws and the Certificate of Incorporation, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. 2. Resignations. Any director may resign at any time by giving written notice of resignation to the Board of Directors, to the Chief Executive Officer or to the Secretary of the corporation. Any such resignation shall take effect at the time specified therein, or if the time be not specified therein, then upon receipt thereof. The acceptance of such resignation shall not be necessary to make it effective. 3. Vacancies. Except as otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, all vacancies in the Board of Directors, whether caused by resignation, death, increase in the number of authorized directors or otherwise, may be filled by a majority of the Board of Directors then in office, even though less than a quorum, or by the stockholders at a special meeting. A director thus elected to fill any vacancy shall hold office until the next annual meeting of stockholders and until a successor is elected and qualified. 4. Annual Meeting. The annual meeting of the Board of Directors, for the election of officers and the transaction of other business, shall be held on the same day and at the same place as, and as soon as practicable following, the annual meeting of stockholders, or at such other date, time or place as the directors may by resolution designate. 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times, and at such place within or outside the State of Delaware, as the Board of Directors may from time to time by resolution designate. 6. Special Meetings. Special meetings of the directors may be called at any time by the Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, the President or an Executive Vice President, or by the Secretary upon written request of one-third of the directors, such request stating the purpose for which the meeting is to be called. Special meetings shall be held at the principal office of the corporation or at such office within or outside the State of Delaware as the directors may from time to time designate. 7. Notice of Meetings. Except as otherwise required by law, notice of special meetings of the Board of Directors or of any committee of the Board of Directors shall be given to each director or to each committee member, as the case may be, by mail at least two days before the day on which the meeting is to be held or by personal delivery, word-of-mouth, telephone, telegraph, radio, cable or other comparable means at least six hours before the time at which the meeting is to be held. Such notice shall state the time and place of such meeting, but need not state the purposes thereof unless otherwise required by law. No notice need be given of the annual meeting of directors or of regular meetings of directors or of committees of the Board of Directors, provided that, whenever the time or place of such meetings shall be fixed or changed, notice of such action shall be given promptly to each director or to each committee member, as the case may be, who shall not have been present at the meeting at which such action was taken. 8. Quorum; Adjourned Meetings; Required Vote. A majority of the Board of Directors as constituted from time to time shall be necessary and sufficient at all meetings to constitute a quorum for the transaction of business. In the absence of a quorum, a majority of those present may adjourn the meeting from time to time and the meeting may be held as adjourned without further notice provided a quorum be present at such adjourned meeting. Unless otherwise specifically provided by the Certificate of Incorporation or statute, the act of a majority of the directors present at any properly convened meeting at which there is a quorum, but in no case less than one-third of all of the directors then in office, shall be the act of the Board of Directors. 9. Committees. Standing or Temporary Committees may be appointed from their own number by the Board of Directors from time to time, and the directors may from time to time vest such committees with such powers as the directors may see fit, subject to such conditions as the directors may prescribe or as may be prescribed by law. All committees shall consist of two or more directors. The term of office of the members of each committee shall be as fixed from time to time by the Board of Directors; provided, however, that any committee member who ceases to be a director shall ipso facto cease to be a committee member. Any member of any committee may be removed at any time with or without cause by the Board of Directors, and any vacancy in any committee may be filled by the Board of Directors. All committees shall keep regular minutes of their transactions and shall cause them to be recorded in books kept for that purpose in the office of the corporation, and shall report the same to the Board of Directors at their regular meetings. Subject to this Section 9 and except as otherwise determined by the Board of Directors, each committee may make rules for the conduct of its business. 10. Compensation. Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees, other compensation and expenses for their services as directors, including, without limitation, services as chairmen or as members of committees of the directors; provided, however, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. 11. Consents in Writing. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. 12. Participation by Conference Telephone. Members of the Board of Directors or of any committee may participate in a meeting of such Board of Directors or committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at the meeting. ARTICLE IV - Officers 1. Officers. The corporation may have a Chairman of the Board of Directors, one or more Vice Chairmen of the Board of Directors, a President, one or more Vice Presidents, which may include Executive and Senior Vice Presidents, a General Counsel, a Secretary, a Treasurer, a Controller and such other officers and assistant officers as the Board of Directors shall deem appropriate; provided, that the corporation shall have such officers as are required by applicable law. Officers shall be elected annually by the Board of Directors. One person may hold more than one office. The Board of Directors shall designate a Chief Executive Officer, and may designate a Chief Operating Officer and a Chief Financial Officer from among the officers of the corporation. The Chief Executive Officer shall have general supervision and management of the business and affairs of the corporation, subject to the control of the Board of Directors, and may prescribe the duties to be performed by the officers of the corporation in addition to the duties prescribed by these By-Laws or by the Board of Directors. In the absence or disability of the Chairman of the Board of Directors, the Chief Executive Officer shall preside at all meetings of stockholders and directors. In the absence or disability of the Chief Executive Officer, such officer of the corporation as the Chief Executive Officer shall have designated in writing to the Board of Directors or to the Secretary of the corporation shall, subject to further action by the Board of Directors, have the powers and perform the duties of the Chief Executive Officer. 2. Chairman of the Board. The Chairman of the Board of Directors shall preside at all meetings of stockholders and directors. 3. Vice Chairmen of the Board. A Vice Chairman shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 4. President. The President shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 5. Vice Presidents. Each of the Executive Vice presidents, Senior Vice Presidents and other Vice Presidents shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 6. General Counsel. The General Counsel shall advise the corporation on legal matters affecting the corporation and its activities, shall supervise and direct the handling of all such legal matters and shall perform all such other duties as are incident to the office of General Counsel. 7. Secretary. The Secretary shall keep the minutes of the meetings of the stockholders and of the Board of Directors, and, when required, the minutes of the meetings of the committees, and shall be responsible for the custody of all such minutes. The Secretary shall be responsible for the custody of the stock ledger and documents of the corporation. The Secretary shall have custody of the corporate seal and may affix and attest such seal to any instrument whose execution shall have been duly authorized and shall perform all other duties incident to the office of Secretary. 8. Treasurer. The Treasurer shall have the custody of all moneys and securities of the corporation and shall keep or cause to be kept accurate accounts of all money received or payments made in books kept for that purpose. The Treasurer shall deposit or cause to be deposited funds of the corporation in accordance with Article V, Section 2 of these By-Laws and shall disburse the funds of the corporation by checks or vouchers as authorized by the Board of Directors. The Treasurer shall also perform all other duties incident to the office of Treasurer. 9. Controller. The Controller shall be the chief accounting officer of the corporation. The Controller shall keep or cause to be kept all books of accounts and accounting records of the corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation. The Controller shall prepare or cause to be prepared appropriate financial statements for the corporation and shall perform such other duties as may be incident to the office of Controller. 10. Other Officers and Assistant Officers. All other officers and assistant officers shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors or the Chief Executive Officer. 11. Term of Office; Vacancies. Each officer shall hold office until the annual meeting of the Board of Directors following the end of the term of the Board by which such officer is elected, except in the case of earlier death, resignation or removal. Vacancies in any office arising from any cause may be filled by the directors at any regular or special meeting. 12. Removal. Any officer elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the Board of Directors. ARTICLE V - Dividends and Finance 1. Dividends. Dividends may be declared to the full extent permitted by law at such times as the Board of Directors shall direct. 2. Deposits; Withdrawals; Notes and Other Instruments. The moneys of the corporation shall be deposited in the name of the corporation in such banks or trust companies as shall be designated by the Board of Directors, and shall be drawn out only by check signed by persons designated, from time to time, by the Board of Directors or by an officer of this corporation to whom the Board of Directors has delegated such authority. All notes and other instruments for the payment of money shall be signed or endorsed by officers or other persons authorized from time to time by the Board of Directors or by an officer of this corporation to whom the Board of Directors has delegated such authority. 3. Fiscal Year. The fiscal year of the corporation shall date from the first day of January in each year. ARTICLE VI - Books and Records; Record Date 1. Books and Records. The books, accounts and records of the corporation, except as may be otherwise required by the laws of the State of Delaware, may be kept within or outside of the said State at such places as the Board of Directors may from time to time appoint. 2. Record Date. (a) The Board of Directors is authorized to fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or other distribution or allotment of any rights, or the date when any change, conversion or exchange of capital stock shall go into effect, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend or other distribution or allotment of rights, or to exercise any rights in respect of any such change, conversion or exchange of capital stock. Such stockholders and only such stockholders as shall be stockholders of record on the record date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend or other distribution or allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. Any such record date fixed in connection with a meeting of stockholders shall not be less than ten (10) days before the date of such meeting. (b) In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors is authorized to fix in advance a record date, which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. If no record date has been fixed by the Board of Directors within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or the Secretary. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. Such stockholders and only such stockholders as shall be stockholders of record on the record date so fixed shall be entitled to give such consent, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. ARTICLE VII - Notices 1. Notices. Whenever any provision of law or these By-Laws requires notice to be given to any director, officer or stockholder, such notice may be given in writing by mailing the same to such director, officer or stockholder at his or her address as the same appears in the books of the corporation, unless such stockholder shall have filed with the Secretary a written request that notices intended for him or her be mailed to some other address, in which case it shall be mailed to the address designated in such request. The time when the same shall be mailed shall be deemed to be the time of the giving of such notice. This section shall not be deemed to preclude the giving of notice by other means if permitted by the applicable provision of law or these By-Laws. 2. Waivers of Notice. A waiver of any notice in writing, signed by a stockholder, director or officer, whether before or after the time stated in said waiver for holding a meeting, shall be deemed equivalent to a notice required to be given to any stockholder, director or officer. ARTICLE VIII - Contracts 1. Interested Directors or Officers. No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of the directors or officers of the corporation are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer of the corporation is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (i)The material facts as to the relationship or interest of such person and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee thereof, and the Board of Directors or committee in good faith authorizes the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors of the corporation; provided, however, that common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or committee; or (ii)The material facts as to the relationship or interest of such person and as to the contract or transaction are disclosed or are known to the stockholders of the corporation entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders of the corporation; or (iii)The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders of the corporation. ARTICLE IX - Seal 1. Seal. The corporate seal of the corporation shall consist of two concentric circles, between which is the name of the corporation, and in the center shall be inscribed the year of its incorporation and the words, "Corporate Seal, Delaware." ARTICLE X - Indemnification 1. Indemnification in Third Party Actions. The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) actually and reasonably 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 corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that no indemnification shall be made in respect of any proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the corporation. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. 2. Indemnification in an Action by or in the Right of the Corporation. The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of (a) any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper, or (b) any proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the corporation. 3. Indemnification as of Right. To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections l and 2 of this Article X, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by such person in connection therewith. 4. Determination of Indemnification. Any indemnification under Sections 1 and 2 of this Article X (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in such Sections l and 2. Such determination shall be made (a) by the Board of Directors (the Board) by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (c) by the stockholders. 5. Advance for Expenses. Expenses (including attorneys' fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation as authorized in this Article X. 6. General Provisions. (a) All expenses (including attorneys' fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding which are advanced by the corporation under Section 5 of this Article X shall be repaid (i) in case the person receiving such advance is ultimately found, under the procedure set forth in this Article X, not to be entitled to indemnification, or (ii) where indemnification is granted, to the extent that the expenses so advanced by the corporation exceed the indemnification to which such person is entitled. (b) The corporation may indemnify each person, though he or she is not or was not a director, officer, employee or agent of the corporation, who served at the request of the corporation on a committee created by the Board to consider and report to it in respect of any matter. Any such indemnification may be made under the preceding provisions of this Article X and shall be subject to the limitations thereof except that (as indicated) any such committee member need not be nor have been a director, officer, employee or agent of the corporation. (c) The provisions of this Article X shall be applicable to appeals. References to "serving at the request of the corporation" shall include without limitation any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries. A person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation." (d) If any section, subsection, paragraph, sentence, clause, phrase or word in this Article X shall be adjudicated invalid or unenforceable, such adjudication shall not be deemed to invalidate or otherwise affect any other section, subsection, paragraph, sentence, clause, phrase or word of this Article. (e) The indemnification and advancement of expenses provided by, or granted pursuant to, this Article X shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE XI - Amendments 1. Amendments. Alterations or amendments of these By-Laws may be made by the stockholders at any annual or special meeting if the notice of such meeting contains a statement of the proposed alteration or amendment, or by the Board of Directors at any annual, regular or special meeting, provided notice of such alteration or amendment has been given to each director in writing at least five (5) days prior to said meeting or has been waived by all the directors. 021595 bylaws\rmet EX-10 4 EXHIBIT 10.36 REYNOLDS METALS COMPANY NEW MANAGEMENT INCENTIVE DEFERRAL PLAN The Reynolds Metals Company New Management Incentive Deferral Plan shall be amended effective January 1, 1995, by adding a new Article IX to read as follows: ARTICLE IX PHANTOM STOCK ADDITIONAL INCOME 9.01 The provisions of this Article IX shall apply only to an Eligible Employee who, at the time an election to defer Incentive Compensation is made in accordance with Article III, is subject to the Company's Stock Ownership Guidelines for Officers (an "Officer"). Any such Officer electing to defer Incentive Compensation may also elect to have a specified part or all of such deferred Incentive Compensation subject to Phantom Stock Additional Income (as provided herein) instead of having Additional Income computed at a specified rate as set forth in Section 4.01. 9.02 Phantom Stock Additional Income shall be computed in accordance with this Section 9.02. (a) As of the date when Incentive Compensation would have been paid if it were Current Compensation, each Officer who elected to receive Phantom Stock Additional Income shall have his or her account under this Plan credited with a number of equivalent shares of the Company's Common Stock, without par value ("Company Stock") determined by dividing (i) the total dollar amount of such Deferred Compensation by (ii) the arithmetic average of the high and low sales prices of Company Stock as reported on New York Stock Exchange - Composite Transactions on such date. Fractional equivalent shares shall be calculated to three decimal places. (b) As of each date when cash dividends are paid on Company Stock, each Officer who elected to receive Phantom Stock Additional Income shall also have his or her account under this Plan adjusted to reflect dividend equivalents computed pursuant to this subsection (b). The dollar amount of the dividend equivalent for each Officer shall equal the cash dividends that would have been paid on the number of equivalent shares of Company Stock credited to the Officer's account as of the dividend record date if that number of equivalent shares had actually been issued and outstanding on the record date. This dividend equivalent for each Officer shall be converted into a number representing equivalent shares of Company Stock by dividing (i) the total dollar amount of the Officer's dividend equivalent by (ii) the arithmetic average of the high and low sales prices of Company Stock as reported on New York Stock Exchange - Composite Transactions on the date when the cash dividends are paid. The Officer's account under this Plan shall then be credited with the determined number of equivalent shares of Company Stock, including fractional shares calculated to three decimal places. (c) If any stock dividend is declared upon Company Stock, or if there is any stock split, stock distribution, or other recapitalization of the Company with respect to its Company Stock resulting in a split-up or combination or exchange of shares, the aggregate number and kind of equivalent shares of Company Stock credited to the account of an Officer under the Plan shall be proportionately adjusted as the Plan Committee may deem appropriate. 9.03 Any election of Phantom Stock Additional Income in accordance with this Article IX shall be subject to the following terms and conditions: (a) The election of Phantom Stock Additional Income must be made at the same time as the election to defer Incentive Compensation. (b) The election of Phantom Stock Additional Income shall be irrevocable as to the Incentive Compensation to which such election applies. (c) The Deferral Termination Date shall be the date on which the Officer is retired and entitled to an immediate benefit under the New Retirement Program. (d) Any Officer electing Phantom Stock Additional Income may also irrevocably elect at the same time that if the Officer dies before receiving full payment of any deferred Incentive Compensation subject to Phantom Stock Additional Income, payments after death will be made in the form of five (5) annual installments. (e) If Phantom Stock Additional Income is being paid on Deferred Compensation, the amount of a lump sum payment shall be equal to (i) the total number of equivalent shares of Company Stock credited to the Officer's account under this Plan as of the last day on which the New York Stock Exchange, Inc. is open in the year the Deferral Termination Date occurs, multiplied by (ii) the closing sales price of Company Stock as reported on New York Stock Exchange - Composite Transactions on such date. This lump sum payment shall be paid as soon as administratively feasible following the end of the year. If annual installments are elected instead of a lump sum, the amount of the installment payment to be made in a calendar year shall be computed by taking (y) the amount that would have been payable after the end of the preceding year had the entire amount remaining as of the end of such year been paid as a single lump sum, divided by (z) the number of installment payments remaining, including the installment about to be paid. Annual installments shall be paid as soon as administratively feasible in each calendar year following the year in which the Deferral Termination Date occurs. All payments under the Plan shall be made in cash. (f) Anything in Section 4.04 to the contrary notwithstanding, the Plan Committee shall not accelerate any payment of Deferred Compensation with respect to which Phantom Stock Additional Income is to be paid unless the Plan Committee determines that such accelerated payments comply with Rule 16a-l(c)(3) under Section 16 of the Securities Exchange Act of 1934. Executed and adopted this 15th day of February, 1995, pursuant to action taken by the Board of Directors of Reynolds Metals Company at its meeting on November 18, 1994. REYNOLDS METALS COMPANY By Donald T. Cowles Donald T. Cowles Executive Vice President, Human Resources and External Affairs EX-10 5 EXHIBIT 10.37 REYNOLDS METALS COMPANY NEW MANAGEMENT INCENTIVE DEFERRAL PLAN The Reynolds Metals Company New Management Incentive Deferral Plan shall be amended effective January 1, 1995, so that through December 31, 1996, a new Article X shall be added to read as follows: ARTICLE X MANDATORY DEFERRALS 10.01 The provisions of this Article X shall apply in 1995 and 1996 to each Eligible Employee who is a Top Executive (as defined below) at the time Incentive Compensation is paid in that year. To the extent a Top Executive's Estimated Annual Compensation (as defined below) would exceed One Million Dollars ($1,000,000) for the year, payment of such Incentive Compensation shall be automatically deferred in accordance with this Article X to the extent necessary to bring the Top Executive's Estimated Annual Compensation below One Million Dollars ($1,000,000). If necessary, all of a Top Executive's Incentive Compensation shall be deferred, in which case any applicable payroll taxes shall be deducted and paid from such Top Executive's regular salary checks unless the Top Executive reimburses the Company separately for such payroll taxes. 10.02 Any mandatory deferral in accordance with this Article X shall be subject to the following terms and conditions: (a) The Deferral Termination Date shall be the date on which the Top Executive terminates employment with the Company and any member of the controlled group of corporations. (b) Except as otherwise provided in subsections (c) and (d) below, Deferred Compensation shall earn Additional Income as described in Section 4.01, and all Deferred Compensation and Additional Income shall be paid to the Top Executive in a single lump sum payment unless the Top Executive has elected before the beginning of the calendar year to have any amounts deferred in accordance with this Article X paid in annual installments over a period of five (5) or ten (10) years as described in, and in accordance with, Section 4.02. (c) To the extent that under the terms of the Performance Incentive Plan the Incentive Compensation would have been paid in the form of the Company's Common Stock but for the mandatory deferral provisions of this Article X, then Deferred Compensation will earn Phantom Stock Additional Income in accordance with the provisions of Article IX rather than the Additional Income described in Section 4.01. (d) Before the beginning of the calendar year, an Eligible Employee who anticipates being a Top Executive subject to a mandatory deferral in accordance with this Article X may voluntarily elect to have any amounts subject to a mandatory deferral earn Phantom Stock Additional Income in accordance with the provisions of Article IX rather than the Additional Income described in Section 4.01. (e) Before the beginning of the calendar year, an Eligible Employee who anticipates being a Top Executive subject to a mandatory deferral in accordance with this Article X and who anticipates having part or all of the deferral earn Phantom Stock Additional Income may elect in accordance with Article IX that in case of such Top Executive's death before all amounts subject to Phantom Stock Additional Income are paid out, payment of remaining amounts shall be made to the Beneficiary in annual installments over five (5) years. 10.03 (a) For purposes of this Article X, a Top Executive's "Estimated Annual Compensation" for a given year will be equal to (i) the Top Executive's anticipated salary for the year as approved by the Compensation Committee in January of the year (taking into account any approved increase to become effective during the year), less any amounts the Top Executive has voluntarily elected to defer under the Reynolds Metals Company Salary Deferral Plan for Executives for the year, plus (ii) the Incentive Compensation to be paid to the Top Executive, less any amounts the Top Executive has voluntarily elected to defer under the applicable provisions of this Plan, plus (iii) the amount of any previously deferred Incentive Compensation payable to the Top Executive during the year that will count as compensation in the year for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, plus (iv) the amount of miscellaneous or imputed income (for items such as the imputed value of life insurance and the use of a car or plane) that the Top Executive had for the immediately preceding calendar year. (b) "Top Executive" means for any calendar year any individual who may reasonably be expected to be a "covered employee" for the year for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended. Executed and adopted this 15th day of February, 1995, pursuant to action taken by the Board of Directors of Reynolds Metals Company at its meeting on November 18, 1994. REYNOLDS METALS COMPANY By Donald T. Cowles Donald T. Cowles Executive Vice President, Human Resources and External Affairs EX-10 6 REYNOLDS METALS COMPANY SALARY DEFERRAL PLAN FOR EXECUTIVES The Reynolds Metals Company Salary Deferral Plan for Executives shall be amended effective January 1, 1995, so that through December 31, 1996, a new Article IX shall be added as follows: ARTICLE IX MANDATORY DEFERRALS 9.01 The provisions of this Article IX shall apply in 1995 and 1996 to each Eligible Employee who is a Top Executive. For purposes of this Article IX, a "Top Executive" means for any calendar year any individual who may reasonably be expected to be a "covered employee" for the year for purposes of Section 162(m) of the Internal Revenue Code. 9.02 If it appears that a Top Executive's compensation for the year will exceed the amount that the Company will be permitted to deduct in accordance with Section 162(m) of the Internal Revenue Code, after taking into account any voluntary or mandatory deferral under the Reynolds Metals Company New Management Incentive Deferral Plan and any voluntary deferral under this Plan, payment of such Top Executive's Salary shall be automatically deferred in accordance with this Article IX to the extent necessary to bring the Top Executive's compensation for purposes of Section 162(m) of the Internal Revenue Code below One Million Dollars ($1,000,000). Any applicable payroll taxes that cannot be deducted and paid from the Top Executive's Salary as a result of this mandatory deferral shall be reimbursed to the Company by the Top Executive. 9.03 Any mandatory deferral in accordance with this Article IX shall be subject to the following terms and conditions: (a) Unless the Top Executive has elected another Deferral Termination Date before the beginning of the calendar year, the Deferral Termination Date for any Salary subject to a mandatory deferral shall be the December 31st of the year in which the Top Executive's employment with the Company and any subsidiary terminates. (b) Unless the Top Executive has elected another schedule of payments before the beginning of the calendar year, payment of any Salary subject to a mandatory deferral shall be made in a single lump sum. (c) Unless before the beginning of the calendar year the Top Executive has elected otherwise with regard to any Salary subject to a mandatory deferral for the year, the Phantom Investment Alternative that will apply to amounts subject to a mandatory deferral shall be based on the Interest Income Fund under the Savings and Investment Plan. Executed and adopted this 15th day of February, 1995, pursuant to action taken by the Board of Directors of Reynolds Metals Company at its meeting on November 18, 1994. REYNOLDS METALS COMPANY By Donald T. Cowles Donald T. Cowles Executive Vice President, Human Resources and External Affairs EX-11 7 EXHIBIT 11 REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In millions, except share data) EARNINGS PER COMMON SHARE: Earnings per common share is based on the average number of common shares outstanding and, in 1994, is after preferred stock dividend requirements. Common stock equivalents relating to preferred stock are not included in 1994 since their effect would be anti-dilutive.
YEARS ENDED DECEMBER 31 ______________________________________________ 1994 1993 1992 ______________________________________________ Average shares outstanding 61,756,000 59,850,000 59,603,000 Income (loss) before cumulative effects of accounting changes $121.7 ($322.1) ($109.2) Cumulative effects of accounting changes - - (639.6) ______________________________________________ Net income (loss) 121.7 (322.1) (748.8) Less preferred stock dividends 34.1 - - ______________________________________________ Net income (loss) available to common stockholders $87.6 ($322.1) ($748.8) ============================================== Earnings per common share: Income (loss) before cumulative effects of accounting changes $1.42 ($5.38) ($1.83) Cumulative effects of accounting changes - - (10.73) ______________________________________________ Net income (loss) $1.42 ($5.38) ($12.56) ==============================================
EARNINGS PER SHARE OF COMMON STOCK AND COMMON STOCK EQUIVALENT: Earnings per share of common stock and common stock equivalent is based on the average number of shares outstanding and, in 1994, the average number of common stock equivalents outstanding. The average number of common stock equivalents outstanding is based on the maximum potential issuance of common stock upon conversion of PRIDES, which is one share of common stock for each share of PRIDES. This computation is made for presentation purposes only since its effect is anti-dilutive.
YEARS ENDED DECEMBER 31 ______________________________________________ 1994 1993 1992 ______________________________________________ Average shares outstanding 72,033,000 59,850,000 59,603,000 Income (loss) before cumulative effects of accounting changes $121.7 ($322.1) ($109.2) Cumulative effects of accounting changes - - (639.6) ______________________________________________ Net income (loss) available to common stock and common stock equivalents $121.7 ($322.1) ($748.8) ============================================== Earnings per share of common stock and common stock equivalent: Income (loss) before cumulative effects of accounting changes $1.69 ($5.38) ($1.83) Cumulative effects of accounting changes - - (10.73) ______________________________________________ Net income (loss) $1.69 ($5.38) ($12.56) ==============================================
EX-21 8 EXHIBIT 21 PARENTS AND SUBSIDIARIES EXHIBIT 21 (A) Reynolds Metals Company has no parents. (B) Set forth below is a list of certain of the subsidiaries and associated companies of Reynolds Metals Company:
Place of Incorporation Or Organization * Aluminio Reynolds de Venezuela, S. A. Venezuela Aluminium Oxid Stade Gesellschaft mit beschrankter Haftung Germany * Canadian Reynolds Metals Company, Limited - Societe Canadienne de Metaux Reynolds, Limitee Quebec * El Campo Aluminum Company Delaware Hamburger Aluminium-Werk Gesellschaft mit beschrankter Haftung Germany * Industria Navarra del Aluminio, S. A. Spain * Latas de Aluminio Reynolds, Inc. Delaware Latas de Aluminio, S. A. Brazil Manicouagan Power Company - La Compagnie Hydroelectrique Manicouagan Quebec * Mt. Vernon Plastics Corporation Delaware Pechiney Reynolds Quebec, Inc. Nebraska * Presidential Development Corporation New York * RB Sales Company, Ltd. Delaware * Reynolds Aluminium Deutschland, Inc. Delaware * Reynolds Aluminium Deutschland Internationale Vertriebsgesellschaft mbH Germany * Reynolds Aluminium France France * Reynolds Aluminium Holland B. V. The Netherlands * Reynolds Australia Alumina, Ltd. Delaware * Reynolds Australian Gold Operations, Ltd. Australia * Reynolds Becancour, Inc. Delaware * Reynolds Consumer Europe, S. A.\N.V. Belgium * Reynolds Consumer Products, Inc. Delaware * Reynolds (Europe) Limited Delaware * Reynolds International Holdings, Inc. Delaware * Reynolds International, Inc. Delaware * Reynolds International (Panama) Inc. Panama * Reynolds Italy Holding, S.p.A. Italy * Reynolds Wheels-Holding S.p.A. Italy * Reywest Development Corporation Arizona * RMC Holdings, Inc. Delaware * RMC Properties, Ltd. Delaware * RMC Texas, Inc. Delaware * Reynolds Metals Development Company Delaware * Reynolds Metals European Capital Corporation Delaware * Reynolds Metals Foreign Sales Corporation Barbados * Saint George Insurance Company Vermont * Southeast Vinyl Company Delaware * Southern Graphic Systems, Inc. Kentucky * Southern Reclamation Company, Inc. Alabama The names of a number of subsidiaries and associated companies have been omitted because considered in the aggregate they would not constitute a significant subsidiary. * Consolidated subsidiaries
EX-23 9 EXHIBIT 23 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in the: 1. Registration Statement (Form S-8 No. 2-76789) pertaining to the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; 2. Registration Statement (Form S-8 No. 33-13822) pertaining to the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; 3. Registration Statement (Form S-8 No. 33-44400) pertaining to the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; 4. Registration Statement (Form S-8 No. 33-20498) pertaining to the Reynolds Metals Company Savings and Investment Plan for Salaried Employees; 5. Registration Statement (Form S-3 No. 33-43443) pertaining to the shelf registration of debt securities of Reynolds Metals Company; 6. Registration Statement (Form S-8 No. 33-66032) pertaining to the Reynolds Metals Company Savings Plan for Hourly Employees; 7. Registration Statement (Form S-3 No. 33-51153) pertaining to the offer and resale of shares of Reynolds Metals Company Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust; 8. Registration Statement (Form S-8 No. 33-53847) pertaining to the Employees Savings Plan; 9. Registration Statement (Form S-8 No. 33-53851) pertaining to the Reynolds Metals Company Restricted Stock Plan for Outside Directors; 10. Registration Statement (Form S-3 No. 33-59168) pertaining to the registration of debt securities of Canadian Reynolds Metals Company Ltd.; and 11. Registration Statement (Form S-3 No. 33-51631) pertaining to the registration of convertible preferred stock of Reynolds Metals Company and in the related prospectuses of our report dated February 17, 1995, with respect to the consolidated financial statements of Reynolds Metals Company included in this Annual Report (Form 10-K) for the year ended December 31, 1994. Ernst & Young LLP Richmond, Virginia March 1, 1995 EX-24 10 EXHIBIT 24 1. Powers of Attorney from the following persons are attached: Patricia C. Barron William O. Bourke Thomas A. Graves, Jr. John R. Hall Robert L. Hintz William H. Joyce David P. Reynolds Randolph N. Reynolds James M. Ringler Charles A. Sanders Robert J. Vlasic Joe B. Wyatt POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for her and in her name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. Patricia C. Barron Patricia C. Barron POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. William O. Bourke William O. Bourke POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 19th day of April, 1995. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. Thomas A. Graves, Jr. Thomas A. Graves, Jr. POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. John R. Hall John R. Hall POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. Robert L. Hintz Robert L. Hintz POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. William H. Joyce William H. Joyce POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 19th day of April, 1995. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. David P. Reynolds David P. Reynolds POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. Randolph N. Reynolds Randolph N. Reynolds POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. James M. Ringler James M. Ringler POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. Charles A. Sanders Charles A. Sanders POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. Robert J. Vlasic Robert J. Vlasic POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1994 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of the Company's common stock, without par value (the "Common Stock") in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iii) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (iv) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 29th day of February, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 17th day of February, 1995. Joe B. Wyatt Joe B. Wyatt EX-27 11
5 This schedule contains summary financial information extracted from the Reynolds Metals Company Consolidated Balance Sheet for December 31, 1994 and Consolidated Statement of Income and Retained Earnings for the Year Ended December 31, 1994 and is qualified in its entirety by reference to such financial statements. 1,000,000 12-MOS DEC-31-1994 DEC-31-1994 308 125 871 19 873 2322 6308 3200 7461 1425 1848 870 0 505 897 7461 5879 6013 5279 5279 389 0 156 190 68 122 0 0 0 122 1.42 0
-----END PRIVACY-ENHANCED MESSAGE-----