-----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, WR917PZBs5al0AK28Q3HSlqaf6HPcwzFEgrgXO/zP+TyAmTgdMsAG4MgzKiqJrE0 bAgs0wZ9meWxeEl5VFcajg== 0000083604-95-000012.txt : 19950814 0000083604-95-000012.hdr.sgml : 19950814 ACCESSION NUMBER: 0000083604-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: CSX 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01430 FILM NUMBER: 95561557 BUSINESS ADDRESS: STREET 1: 6601 W BROAD ST STREET 2: PO BOX 27003 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8042812000 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-1430 REYNOLDS METALS COMPANY A Delaware Corporation (I.R.S. Employer Identification No. 54-0355135) 6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003 Telephone Number (804) 281-2000 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 (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ As of July 31, 1995, the Registrant had 63,446,718 shares of Common Stock, no par value, outstanding and entitled to vote. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) _________________________________________________________________________________________ Reynolds Metals Company
Quarter ended Six months ended June 30 June 30 _________________________________________________________________________________________ (In millions, except per share amounts) 1995 1994 1995 1994 _________________________________________________________________________________________ REVENUES Net sales $1,864 $1,455 $3,515 $2,709 Equity, interest and other income 10 5 20 12 _________________________________________________________________________________________ 1,874 1,460 3,535 2,721 _________________________________________________________________________________________ COSTS AND EXPENSES Cost of products sold 1,560 1,311 2,952 2,477 Selling, administrative and general expenses 113 93 220 185 Interest - principally on long-term obligations 44 38 87 74 _________________________________________________________________________________________ 1,717 1,442 3,259 2,736 _________________________________________________________________________________________ Income (loss) before income taxes 157 18 276 ( 15) Taxes on income (credit) 46 6 83 ( 6) _________________________________________________________________________________________ NET INCOME (LOSS) 111 12 193 ( 9) Preferred stock dividends 9 9 18 16 _________________________________________________________________________________________ NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 102 $ 3 $ 175 ($ 25) ========================================================================================= INCOME (LOSS) PER SHARE (Note B) Average shares outstanding 73 62 73 61 Net income (loss) $1.51 $0.05 $2.64 ($0.41) CASH DIVIDENDS PER COMMON SHARE $0.30 $0.25 $0.55 $0.50 _________________________________________________________________________________________
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) _________________________________________________________________________________________ Reynolds Metals Company
June 30 December 31 _________________________________________________________________________________________ (In millions) 1995 1994 _________________________________________________________________________________________ ASSETS Current assets Cash and cash equivalents $41 $308 Short-term investments 71 126 Receivables, less allowances of $21 (1994 - $19) 1,157 962 Inventories 1,042 873 Prepaid expenses 70 53 _________________________________________________________________________________________ Total current assets 2,381 2,322 Unincorporated joint ventures and associated companies 884 856 Property, plant and equipment 6,471 6,308 Less allowances for depreciation and amortization 3,326 3,200 _________________________________________________________________________________________ 3,145 3,108 Deferred taxes and other assets 1,207 1,175 _________________________________________________________________________________________ Total assets $7,617 $7,461 ========================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable, accrued and other liabilities $1,198 $1,286 Short-term obligations 211 120 Long-term debt 19 18 _________________________________________________________________________________________ Total current liabilities 1,428 1,424 Long-term debt 1,868 1,848 Postretirement benefits 1,113 1,145 Environmental, deferred taxes and other liabilities 722 772 Stockholders' equity Preferred stock 505 505 Common stock 918 870 Retained earnings 1,119 980 Cumulative currency translation adjustments (16) (43) Pension liability adjustment (40) (40) _________________________________________________________________________________________ Total stockholders' equity 2,486 2,272 _________________________________________________________________________________________ Total liabilities and stockholders' equity $7,617 $7,461 =========================================================================================
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) _________________________________________________________________________________________ Reynolds Metals Company
Six months ended June 30 _________________________________________________________________________________________ (In millions) 1995 1994 _________________________________________________________________________________________ OPERATING ACTIVITIES Net income (loss) $193 ($9) Adjustments to reconcile to net cash used in operating activities: Depreciation and amortization 153 143 Deferred taxes and other 24 21 Changes in operating assets and liabilities net of effects from acquisitions and dispositions: Accounts payable, accrued and other liabilities (116) 112 Receivables (187) (106) Inventories (161) (93) Other (87) (7) _________________________________________________________________________________________ Net cash provided by (used in) operating activities ( 181) 61 INVESTING ACTIVITIES Capital investments (210) (175) Proceeds from sales of assets 28 14 Investments in debt securities - (139) Maturities of investments in debt securities 54 - Other investing activities - net (4) (66) _________________________________________________________________________________________ Net cash used in investing activities (132) (366) FINANCING ACTIVITIES Proceeds from preferred stock issue - 505 Increase (decrease) in short-term borrowings 80 (57) Cash dividends paid (49) (22) Other financing activities - net 15 (52) _________________________________________________________________________________________ Net cash provided by financing activities 46 374 CASH AND CASH EQUIVALENTS Net increase (decrease) (267) 69 At beginning of period 308 19 _________________________________________________________________________________________ AT END OF PERIOD $ 41 $ 88 =========================================================================================
REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Quarters and Six Months Ended June 30, 1995 and 1994 Note A - Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods of 1995 are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. Note B - Earnings per share In the second quarter and six months of 1995, earnings per share equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the assumed conversion of the Company's 7% PRIDES(SM), Convertible Preferred Stock ("PRIDES"). In the second quarter and six months of 1994, earnings per share equals net income, minus PRIDES dividends, divided by the weighted-average number of common shares outstanding during the period. Common share equivalents relating to the PRIDES were not included in the second quarter and six months of 1994 since their effect would have been anti-dilutive. Note C - Financing Arrangements In the first quarter of 1995, the Company amended its $500 million revolving credit facility to extend the term and lower the cost. The expiration date of the facility was extended from 1999 to 2000. The annual commitment fee on the unused portion of the facility was lowered from .20% to .125%. No amounts were outstanding under the facility at June 30, 1995. Note D - Contingent liabilities As previously disclosed in the Company's annual report on Form 10-K for the year ended December 31, 1994, the Company is involved in various worldwide environmental improvement activities resulting from past operations, including designation as a potentially responsible party, with others, at various EPA designated Superfund sites. The Company has recorded amounts which, in management's best estimate, will be sufficient to satisfy anticipated costs of known remediation requirements. 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. 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 future quarterly or annual results of operations. 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. Note E - Canadian Reynolds Metals Company, Limited Summarized financial information for Canadian Reynolds Metals Company, Limited is as follows:
Quarter ended June 30 Six Months ended June 30 ______________________ ________________________ 1995 1994 1995 1994 ______________________ ________________________ Net Sales: Customers $136 $93 $249 $166 Parent company 140 114 319 230 ______________________ ________________________ 276 207 568 396 Cost of products sold 178 188 393 368 Net income (loss) $59 $1 $109 $6
June 30 December 31 1995 1994 ____________ ______________ Current assets $424 $238 Noncurrent assets 996 1,015 Current liabilities (106) (83) Noncurrent liabilities (595) (564)
Note F - Other Information The Financial Accounting Standards Board issued in March, 1995, FAS No. 121 - - Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company is in the process of evaluating the provisions of this pronouncement and has not made a determination as to the impact, if any, on the Company's financial position and/or results of operations. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto included in or referred to in this report. RESULTS OF OPERATIONS The Company had net income of $111 million ($1.51 per share) and $193 million ($2.64 per share) in the second quarter and six months of 1995, respectively, compared to net income of $12 million ($0.05 per share) in the second quarter of 1994 and a net loss of $9 million ($0.41 per share) in the six months of 1994. The Company's results for the second quarter and six months of 1995 reflect higher demand for the Company's products and stronger aluminum prices worldwide as well as the ongoing benefits of performance improvement programs, which include cost reduction, restructurings in prior years, and strategic acquisitions and divestitures. Shipments and Revenues Shipments, net sales and revenues per pound for the second quarter and six months of 1995 and 1994 were as follows (metric tons in thousands and dollars in millions, except per pound amounts):
Second Quarter Six Months 1995 1994 1995 1994 ____________________ ____________________ Aluminum product shipments 426 406 818 751 Net sales: Aluminum $1,508 $1,127 $2,842 $2,053 Nonaluminum 356 328 673 656 ____________________ ____________________ Total $1,864 $1,455 $3,515 $2,709 ==================== ==================== Revenues per pound: Fabricated aluminum products $1.87 $1.45 $1.80 $1.42 Primary aluminum $0.92 $0.66 $0.95 $0.64
Shipments of aluminum products set an all time Company record in the second quarter of 1995 and contributed to increased shipments in the six months of 1995. Higher shipments were realized in both periods for most products, particularly primary aluminum, recycled aluminum, cans and ends, can sheet and distributor sheet. Demand was strong in most of the Company's principal markets. Higher shipments of cans and ends and distributor sheet were also attributable to the acquisitions of a can manufacturing facility in the second quarter of 1994 and a metals distribution business in the third quarter of 1994. The increases in net sales for aluminum products in both periods were due to the higher shipping volume and higher prices for most aluminum products. The increase in nonaluminum sales was due to strong demand and improved prices for alumina and stainless steel. Due to the strength in the alumina market, the Company has restarted a portion of its idle capacity at its alumina plant near Corpus Christi, Texas. The increase in sales of stainless steel was also attributable to the acquisition of the metals distribution business mentioned above. RESULTS OF OPERATIONS - continued Shipments and Revenues - continued For further information concerning shipments and revenues, see the discussion under "Operating Area Analysis". Markets Revenues by principal markets were:
Second Quarter Six Months 1995 1994 1995 1994 _______________ ______________ Packaging and Containers 45% 47% 43% 46% Distributors and Fabricators 13 12 14 12 Automotive and Transportation 13 11 14 11 Building and Construction 13 13 13 12 Electrical 3 3 3 3 Other 13 14 13 16 _______________ _______________ Total 100% 100% 100% 100% ======= ======== ======= =======
Sales to the packaging and containers market improved 22% and 20%, respectively, in the second quarter and six months of 1995, but provided a lower percentage of total revenues due to more substantial gains in sales to other markets. The Company is benefiting in this market from acquisitions, mix of customers who are performing well in the market, and positive growth in specialty cans. Industry volumes relating to cans and can sheet have shown some weakness due to accelerated purchases in late 1994 in anticipation of higher prices in 1995, unseasonably cool and wet weather throughout the U.S. in the first half of 1995, and competition from other materials. Sales to the distributors and fabricators market improved 41% and 49%, respectively, in the second quarter and six months of 1995. The improvements were due to strong demand and the 1994 acquisition of a metals distribution business. Sales to the automotive and transportation market improved 54% and 62%, respectively, in the second quarter and six months of 1995. This improvement reflects the increased use of aluminum in cars. Lower car production in the second quarter of 1995 had only a slight impact on the Company's sales of wheels, extrusions and sheet. Higher car production is expected later in the year after the model change over, and any short-term decline in car production should be offset by new applications and new business. Sales to the building and construction market improved 28% and 38%, respectively, in the second quarter and six months of 1995. The improvements were due to strong commercial construction which is expected to continue for the balance of the year. This strength is offset somewhat by residential construction, which remains soft, particularly in new construction, while remodeling remains steady. Costs and Expenses The increases in cost of products sold were due to the higher shipping volume and higher costs for purchased materials. Costs were favorably impacted by performance improvement programs and higher capacity utilization at aluminum fabricating facilities. Selling, administrative and general expenses increased in both 1995 periods due to the higher level of business activity, but declined slightly as a percent of sales. Interest expense increased in both 1995 periods due to higher rates. RESULTS OF OPERATIONS - continued Costs and Expenses - continued On a quarterly basis, the Company evaluates the status of all significant existing or potential environmental issues, develops or revises estimates of costs to satisfy known remediation requirements and adjusts its accruals accordingly. 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, it is not possible to predict the amount or timing of future costs of environmental remediation requirements which may subsequently be determined. Such costs could be material to future quarterly or annual results of operations. On August 29, 1994 and March 30, 1995, the Company received civil investigative demands from the U.S. Department of Justice relating to production of primary aluminum and the pricing of aluminum can stock, respectively. The Company is cooperating with both inquiries and is confident that its conduct has been in compliance with U.S. antitrust laws. 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. Taxes on Income The effective tax rates reflected in the income statement differ from the U.S. federal statutory rate because of state and foreign taxes and the effects of percentage depletion allowances. OPERATING AREA ANALYSIS (Dollars in millions, metric tons in thousands)
SECOND QUARTER SIX MONTHS ___________________________ __________________________ Net Sales Shipments Net Sales Shipments 1995 1994 1995 1994 1995 1994 1995 1994 ___________________________ ___________________________ Finished products and other sales Packaging and containers: Aluminum $510 $426 101 97 $912 $763 183 173 Nonaluminum 134 128 257 249 Other aluminum 147 106 41 36 298 198 85 69 Other nonaluminum 129 101 257 211 __________________________ ___________________________ 920 761 142 133 1,724 1,421 268 242 __________________________ ___________________________ Production and processing Primary aluminum 159 103 78 71 292 177 139 126 Flat rolled 359 240 106 105 689 457 212 203 Extruded and drawn 205 154 52 56 400 285 108 107 Other aluminum 128 98 48 41 251 173 91 73 Other nonaluminum 93 61 159 124 Gold 38 72 __________________________ ___________________________ 944 694 284 273 1,791 1,288 550 509 ___________________________ ___________________________ Net sales $1,864 $1,455 426 406 $3,515 $2,709 818 751 =========================== ===========================
OPERATING AREA ANALYSIS - continued Finished Products and Other Sales Higher shipments were realized for most products in both 1995 periods, particularly cans and ends and distributor sheet. The increases in aluminum sales were due to the higher shipping volume and improved prices for most aluminum products. The increases in nonaluminum sales were principally attributable to strong demand and improved prices for stainless steel. Higher shipments of cans and ends, distributor sheet and stainless steel were due to 1994 acquisitions. Production and Processing Higher shipments were realized for most products in both 1995 periods, particularly primary and recycled aluminum and can sheet. The increases in aluminum sales were due to the higher shipping volume and improved prices for most aluminum products. The increase in nonaluminum sales was due to improved prices for alumina, as well as higher demand which was met by the restart of idle capacity at an alumina facility. There were no gold revenues due to the divestiture of gold operations in 1994 and early 1995. LIQUIDITY AND CAPITAL RESOURCES Working Capital Working capital totalled $953 million at June 30, 1995, compared to $898 million at December 31, 1994. The ratio of current assets to current liabilities was 1.7/1 at June 30, 1995, compared to 1.6/1 at December 31, 1994. The increase in working capital reflects the higher level of business activity. Operating Activities In the first six months of 1995, cash provided by operations was supplemented with cash on hand and cash provided by financing activities to fund investing activities and increases in inventories and receivables and to reduce accounts payable, accrued and other liabilities. Investing Activities Capital investments of $210 million in the first six months of 1995 included $81 million for operating requirements (i.e., replacement equipment, capital maintenance, environmental control projects, etc.). The remainder was for continuing performance improvement and strategic investment projects including the modernization of a primary aluminum production plant in New York; the modernization and expansion of can manufacturing facilities (including participation in the construction of can plants in South America); expansions at foil and plastic film facilities; modification and equipping of a new wheel facility; and equipment upgrades at a number of other facilities. In addition, strategic investments were made in two major projects and for two acquisitions as discussed below. The Company's fabricated aluminum automotive components plant in Indiana is undergoing a $12 million expansion that will more than double annual production capacity. The start-up of the additional capacity is set for early 1996. The expansion will allow the facility to keep up with a growing customer base. LIQUIDITY AND CAPITAL RESOURCES - continued Investing Activities - continued At its can sheet facility in Alabama, a three-year, $75 million modernization is underway. The expenditure is in addition to the nearly $500 million invested on continuous improvement projects in the facility since 1988. The project will include two new furnaces, as well as improvements to existing equipment. The modernization will allow for enhanced overall product quality and will reduce costs. In the second quarter of 1995, the Company acquired a laminated foil plant located in Louisville, Ky. The facility laminates aluminum foil onto paper and primarily serves the flexible packaging needs of the tobacco and pharmaceutical industries. The facility complements the Company's current product and customer mix, and further strengthens the Company's ability to serve customers in this market. Also in the second quarter of 1995, the Company acquired an engraving company that serves the flexographic and lithographic printers that supply the packaging and publication industries in the U.S., Canada and Mexico. The acquired company operates facilities in Texas, Louisiana and Washington which prepare film and manufacture printing plates. The acquisition will strengthen the Company's operation that manufactures printing cylinders and engravings for the rotogravure, flexographic and lithographic printing industries. In the first quarter of 1995, the Company sold its remaining gold mining assets in Australia for $28 million. The proceeds from the sale, which approximated book value, will be redeployed into value-added businesses. The sale is not expected to have a material effect on the Company's ongoing results of operations. Financing Activities In the first quarter of 1995, the Company amended its $500 million revolving credit facility to extend the term and lower the cost. The expiration date of the facility was extended from 1999 to 2000. The annual commitment fee on the unused portion of the facility was lowered from .20% to .125%. No amounts were outstanding under the facility at June 30, 1995. Borrowings in the second quarter of 1995 included $22 million of tax exempt bonds which were issued to finance a portion of the costs of acquiring, constructing and installing sewage and solid waste disposal facilities at the Company's primary aluminum production plant in Massena, N.Y. The bonds, which require a single repayment in 2025, bear interest at a variable rate (4.0% at June 30, 1995). In the second quarter of 1995, the Company increased the quarterly dividend on its common stock by 5 cents to 30 cents a share. The dividend was increased in view of the Company's improved performance and profitability. In the first half of 1995, the Company contributed 906,000 shares of common stock, valued at approximately $45 million, to its pension plans. This completes the contribution of three million shares of common stock to the Company's pension plans which were the subject of a registration statement filed in 1993. Financial Outlook Capital investments in 1995 are expected to total $475 million and include amounts for operating requirements and continuing expenditures for those performance improvement and strategic investment projects that are underway. These 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 issued in early 1994. LIQUIDITY AND CAPITAL RESOURCES - continued Financial Outlook - continued The Company believes its available financial resources (including cash and investments of over $100 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. At June 30, 1995, $222 million of the Company's $1.65 billion shelf registration remained available for the issuance of debt securities. Rates for electricity charged by the Bonneville Power Administration ("BPA"), which serves the Company's Troutdale, Oregon and Longview, Washington primary aluminum production plants, have been settled through October, 1996, with a four percent increase over the prior rate. However, the longer-term outlook for BPA's rates remains uncertain, due in part to ongoing political, regulatory and judicial developments relating to endangered species listings of Snake River salmon and the effect of such developments on BPA's hydroelectric operations. 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. The Company would have to consider whether paying increased power rates for its smelter operations in the Pacific Northwest would be prudent under prevailing economic conditions. The Company is exploring competitive alternatives to BPA power and BPA is attempting to meet the competition by lowering its operating costs and rates. OTHER INFORMATION The Financial Accounting Standards Board issued in March, 1995, FAS No. 121 - Accounting for the Impairment of Long-Lived Assets and for LongLived Assets to be Disposed Of. The Company is in the process of evaluating the provisions of this pronouncement and has not made a determination as to the impact, if any, on the Company's financial position and/or results of operations. PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See Index to Exhibits. (b) Reports on Form 8-K The Registrant filed no reports on Form 8-K during the second quarter of 1995. SIGNATURES Pursuant to the requirements 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 Allen M. Earehart Allen M. Earehart Vice President, Controller (Principal Accounting Officer) DATE: August 11, 1995 INDEX TO EXHIBITS EXHIBIT 2 - None * EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended to the date hereof. (File No. 1-1430, 1994 Form 10-K Report, EXHIBIT 3.1) 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 10K 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 10K 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)) ____________________________ * Incorporated by reference. * 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. 11430, 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 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, 1996. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1995, EXHIBIT 10.4) * EXHIBIT 10.5 - 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 10.6 - Supplemental Death Benefit Plan for Officers. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.8) * EXHIBIT 10.7 - Financial Counseling Assistance Plan for Officers. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.11) * EXHIBIT 10.8 - Management Incentive Deferral Plan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.12) * EXHIBIT 10.9 - 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 10.10 - Retirement Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.10) ____________________________ * Incorporated by reference. * EXHIBIT 10.11 - Death Benefit Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.11) * EXHIBIT 10.12 - Form of Indemnification Agreement for Directors and Officers. (File No. 1-1430, Form 8-K Report dated April 29, 1987, EXHIBIT 28.3) * EXHIBIT 10.13 - Form of Executive Severance Agreement between Reynolds Metals Company and key executive personnel, including each of the individuals listed in Item 4A of the Reynolds Metals Company 1994 Form 10-K Report, Paul S. Hayden and John F. Rudin. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.18) * EXHIBIT 10.14 - 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 10.15 - 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 10.16 - 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 10.17 - 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 10.18 - 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 10.19 - 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 10.20 - 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 10.21 - Form of Stock Option Agreement, as approved April 22, 1992 by the Compensation Committee of the Company's Board of Directors. (File No. 11430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(a)) * EXHIBIT 10.22 - 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)) ____________________________ * Incorporated by reference. * EXHIBIT 10.23 - 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 10.24 - 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 10.25 - 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 10.26 - 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 10.27 - 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 10.28 - 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 10.29 - 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 10.30 - 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 10.31 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995. (File No. 1-1430, 1994 Form 10-K Report, EXHIBIT 10.36) * EXHIBIT 10.32 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1995 through December 31, 1996. (File No. 1- 1430, 1994 Form 10-K Report, EXHIBIT 10.37) * EXHIBIT 10.33 - Amendment to Reynolds Metals Company Salary Deferral Plan for Executives effective January 1, 1995 through December 31, 1996. (File No. 1- 1430, 1994 Form 10-K Report, EXHIBIT 10.38) EXHIBIT 10.34 - Form of Split Dollar Life Insurance Agreement (Trustee Owner, Trustee Pays Premiums) EXHIBIT 10.35 - Form of Split Dollar Life Insurance Agreement (Trustee Owner, Employee Pays Premium) ____________________________ * Incorporated by reference. EXHIBIT 10.36 - Form of Split Dollar Life Insurance Agreement (Employee Owner, Employee Pays Premium) EXHIBIT 10.37 - Form of Split Dollar Life Insurance Agreement (Third Party Owner, Third Party Pays Premiums) EXHIBIT 10.38 - Form of Split Dollar Life Insurance Agreement (Third Party Owner, Employee Pays Premiums) EXHIBIT 11 - Computation of Earnings Per Share EXHIBIT 15 - None EXHIBIT 18 - None EXHIBIT 19 - None EXHIBIT 22 - None EXHIBIT 23 - None EXHIBIT 24 - None EXHIBIT 27 - Financial Data Schedule Pursuant to Item 601 of Regulation S-K, certain instruments with respect to long-term debt of Reynolds Metals Company (the "Registrant") and its consolidated subsidiaries are omitted because such debt does not exceed 10 percent of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant agrees to furnish a copy of any such instrument to the Commission upon request. EX-3 2 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 Assis tant Secretary, or the Treasurer or an Assistant Treasurer, and sealed with the corporate seal; provided, that where any Certifi cate of Stock is signed by a duly appointed and authorized Transfer Agent or Registrar the signatures of the Chairman of the Board of Directors, Vice Chairman of the Board of Directors, the President, Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer may be facsimile, engraved or printed, and the seal of the corporation on any such Certificate of Stock may be facsimile, engraved or printed. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. 2. Transfers of Stock. Transfers of stock shall be made only upon the books of the corporation, and only by the person named in the certificate or by attorney, lawfully constituted in writing, and only upon surrender of the certificate therefor. The directors may by resolution make reasonable regulations for the transfers of stock. 3. Holders of Record. Registered stockholders only shall be entitled to be treated by the corporation as the holders in fact of the stock standing in their respective names and the corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the laws of Delaware. 4. Lost or Destroyed Certificates. In case of loss or destruction of any certificate of stock another may be issued in its place upon satisfactory proof of such loss or destruction and upon the giving of a satisfactory bond of indemnity to the corporation, all as determined either expressly by the directors or pursuant to general authority granted by them. ARTICLE II - Stockholders' Meetings 1. Place of Meetings. Meetings of the stockholders shall be held at such place, within or outside the State of Delaware, as the Board of Directors may determine. 2. Annual Meeting. The annual meeting of the stockholders of the corporation, for the election of directors to succeed those whose terms expire, and for the transaction of such other business as may come before the meeting, shall be held on the first Wednesday after April 15th of each year, if not a legal holiday, and if a legal holiday, then on the first business day following, at 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 meet ing, the person proposing such business was a participant in a solicitation subject to Section 14 of the Securities Exchange Act of 1934, as amended, or any successor thereto. No business shall be brought before any meeting of stockholders of the corporation otherwise than as provided in this Section. 5. Notice of Meetings. Written notice of the place, date and hour of the annual and of all special meetings of the stock holders and, in the case of special meetings, of the purpose or purposes for which such special meeting is called, shall be given in the manner specified in Section l of Article VII of these By- Laws not less than ten (10) nor more than sixty (60) days prior to the meeting, to each stockholder of record of the corporation entitled to vote thereat. Business transacted at all special meetings shall be confined to the purposes stated in the notice. 6. Quorum. A quorum at any annual or special meeting of the stockholders shall consist of the presence, in person or by proxy, of stockholders entitled to cast a majority of the votes which all stockholders are entitled to cast, except as otherwise specifically provided by law or in the Certificate of Incorpora tion. 7. Adjourned Meetings. If a quorum be not present at a properly called stockholders' meeting, the meeting may be ad journed 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 Certifi cate of Incorporation or these By-Laws for action upon any given matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if there shall be present thereat in person or by proxy stockholders holding the number of shares of stock of the corporation required in respect of such other matter or matters. 8. Inspectors of Election. In advance of any meeting of stockholders or any corporate action to be taken by the stock holders in writing without a meeting, the Chief Executive Offi cer, Chief Operating Officer, Chief Financial Officer or Secre tary of the corporation shall appoint one or more inspectors of election to serve at such meeting or to examine such written consents and to make a written report with respect thereto. In addition, any such officer may, but shall not be required to, designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer at such meeting shall appoint one or more inspectors to act at the meeting. Each inspector shall discharge his or her duties in accordance with applicable law and shall, before entering upon the discharge of his or her duties, take and sign an oath faith fully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. 9. List of Stockholders. A complete list of the stock holders entitled to vote at each annual or special meeting of the stockholders of the corporation, arranged in alphabetical order, showing the address of record of each and the number of voting shares held by each, shall be prepared by the Secretary, who shall have charge of the stock ledger, and filed in the City (or, if such meeting is to be held at a place not within any city, then in the county) where the meeting is to be held, at a loca tion specified in the Notice of Meeting, or if no such location is specified in such notice, at the place where the meeting is to be held, at least ten (10) days before every such meeting, and shall, during the usual hours for business, be open to the examination of any stockholder for any purpose germane to the meeting, and during the whole time of said meeting be open to the examination of any stockholder. 10. Voting. Subject to the provisions of Article VI, Section 2 of these By-Laws, and except where a different vote per share is prescribed by the Certificate of Incorporation for a class of stock, each holder of stock of a class which is entitled to vote in any election or on any other questions at any annual or special meeting of the stockholders shall be entitled to one vote, in person or by written proxy, for each share of such class held of record. Except where, and to the extent that, a differ ent percentage of votes and/or a different exercise of voting power is prescribed by law, the Certificate of Incorporation or these By-Laws, all elections and other questions shall be decided by the vote of stockholders, present in person or by proxy and entitled to vote, representing a majority of the votes cast. Abstentions shall be counted in the tabulation of the votes cast. The votes for directors, and, upon demand of any stockholder, or where required by law, the votes upon any question before the meeting, shall be by ballot; otherwise, the election shall be held as the presiding officer prescribes. 11. Consents in Writing. Any action which might have been taken under these By-Laws by a vote of the stockholders at a meeting thereof may be taken by them without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken shall be signed by the holders of outstanding shares of stock of the corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted; 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 fifteen (15) persons. Direc tors shall be elected for one year, and shall hold office until their successors are elected and qualified. Directors need not be stockholders. In addition to the power and authority express ly conferred upon them by the By-Laws and the Certificate of Incorporation, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. 2. Resignations. Any director may resign at any time by giving written notice of resignation to the Board of Directors, to the Chief Executive Officer or to the Secretary of the corpo ration. Any such resignation shall take effect at the time specified therein, or if the time be not specified therein, then upon receipt thereof. The acceptance of such resignation shall not be necessary to make it effective. 3. Vacancies. Except as otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, all vacancies in the Board of Directors, whether caused by resigna tion, death, increase in the number of authorized directors or otherwise, may be filled by a majority of the Board of Directors then in office, even though less than a quorum, or by the stock holders at a special meeting. A director thus elected to fill any vacancy shall hold office until the next annual meeting of stockholders and until a successor is elected and qualified. 4. Annual Meeting. The annual meeting of the Board of Directors, for the election of officers and the transaction of other business, shall be held on the same day and at the same place as, and as soon as practicable following, the annual meeting of stockholders, or at such other date, time or place as the directors may by resolution designate. 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times, and at such place within or outside the State of Delaware, as the Board of Directors may from time to time by resolution designate. 6. Special Meetings. Special meetings of the directors may be called at any time by the Chairman of the Board of Direc tors, a Vice Chairman of the Board of Directors, the President or an Executive Vice President, or by the Secretary upon written request of one-third of the directors, such request stating the purpose for which the meeting is to be called. Special meetings shall be held at the principal office of the corporation or at such office within or outside the State of Delaware as the directors may from time to time designate. 7. Notice of Meetings. Except as otherwise required by law, notice of special meetings of the Board of Directors or of any committee of the Board of Directors shall be given to each director or to each committee member, as the case may be, by mail at least two days before the day on which the meeting is to be held or by personal delivery, word-of-mouth, telephone, tele graph, radio, cable or other comparable means at least six hours before the time at which the meeting is to be held. Such notice shall state the time and place of such meeting, but need not state the purposes thereof unless otherwise required by law. No notice need be given of the annual meeting of directors or of regular meetings of directors or of committees of the Board of Directors, provided that, whenever the time or place of such meetings shall be fixed or changed, notice of such action shall be given promptly to each director or to each committee member, as the case may be, who shall not have been present at the meeting at which such action was taken. 8. Quorum; Adjourned Meetings; Required Vote. A majority of the Board of Directors as constituted from time to time shall be necessary and sufficient at all meetings to constitute a quorum for the transaction of business. In the absence of a quorum, a majority of those present may adjourn the meeting from time to time and the meeting may be held as adjourned without further notice provided a quorum be present at such adjourned meeting. Unless otherwise specifically provided by the Certifi cate of Incorporation or statute, the act of a majority of the directors present at any properly convened meeting at which there is a quorum, but in no case less than one-third of all of the directors then in office, shall be the act of the Board of Directors. 9. Committees. Standing or Temporary Committees may be appointed from their own number by the Board of Directors from time to time, and the directors may from time to time vest such committees with such powers as the directors may see fit, subject to such conditions as the directors may prescribe or as may be prescribed by law. All committees shall consist of two or more directors. The term of office of the members of each committee shall be as fixed from time to time by the Board of Directors; provided, however, that any committee member who ceases to be a director shall ipso facto cease to be a committee member. Any member of any committee may be removed at any time with or without cause by the Board of Directors, and any vacancy in any committee may be filled by the Board of Directors. All commit tees shall keep regular minutes of their transactions and shall cause them to be recorded in books kept for that purpose in the office of the corporation, and shall report the same to the Board of Directors at their regular meetings. Subject to this Section 9 and except as otherwise determined by the Board of Directors, each committee may make rules for the conduct of its business. 10. Compensation. Directors, as such, may receive, pursu ant to resolution of the Board of Directors, fixed fees, other compensation and expenses for their services as directors, including, without limitation, services as chairmen or as members of committees of the directors; provided, however, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. 11. Consents in Writing. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. 12. Participation by Conference Telephone. Members of the Board of Directors or of any committee may participate in a meeting of such Board of Directors or committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at the meeting. ARTICLE IV - Officers 1. Officers. The corporation may have a Chairman of the Board of Directors, one or more Vice Chairmen of the Board of Directors, a President, one or more Vice Presidents, which may include Executive and Senior Vice Presidents, a General Counsel, a Secretary, a Treasurer, a Controller and such other officers and assistant officers as the Board of Directors shall deem appropriate; provided, that the corporation shall have such officers as are required by applicable law. Officers shall be elected annually by the Board of Directors. One person may hold more than one office. The Board of Directors shall designate a Chief Execu tive Officer, and may designate a Chief Operating Officer and a Chief Financial Officer from among the officers of the corpora tion. The Chief Executive Officer shall have general supervi sion and management of the business and affairs of the corpora tion, subject to the control of the Board of Directors, and may prescribe the duties to be performed by the officers of the corporation in addition to the duties prescribed by these By-Laws or by the Board of Directors. In the absence or disability of the Chairman of the Board of Directors, the Chief Executive Officer shall preside at all meetings of stockholders and direc tors. In the absence or disability of the Chief Executive Officer, such officer of the corporation as the Chief Executive Officer shall have designated in writing to the Board of Direc tors or to the Secretary of the corporation shall, subject to further action by the Board of Directors, have the powers and perform the duties of the Chief Executive Officer. 2. Chairman of the Board. The Chairman of the Board of Directors shall preside at all meetings of stockholders and directors. 3. Vice Chairmen of the Board. A Vice Chairman shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 4. President. The President shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 5. Vice Presidents. Each of the Executive Vice presi dents, Senior Vice Presidents and other Vice Presidents shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 6. General Counsel. The General Counsel shall advise the corporation on legal matters affecting the corporation and its activities, shall supervise and direct the handling of all such legal matters and shall perform all such other duties as are incident to the office of General Counsel. 7. Secretary. The Secretary shall keep the minutes of the meetings of the stockholders and of the Board of Directors, and, when required, the minutes of the meetings of the committees, and shall be responsible for the custody of all such minutes. The Secretary shall be responsible for the custody of the stock ledger and documents of the corporation. The Secretary shall have custody of the corporate seal and may affix and attest such seal to any instrument whose execution shall have been duly authorized and shall perform all other duties incident to the office of Secretary. 8. Treasurer. The Treasurer shall have the custody of all moneys and securities of the corporation and shall keep or cause to be kept accurate accounts of all money received or payments made in books kept for that purpose. The Treasurer shall deposit or cause to be deposited funds of the corporation in accordance with Article V, Section 2 of these By-Laws and shall disburse the funds of the corporation by checks or vouchers as authorized by the Board of Directors. The Treasurer shall also perform all other duties incident to the office of Treasurer. 9. Controller. The Controller shall be the chief account ing officer of the corporation. The Controller shall keep or cause to be kept all books of accounts and accounting records of the corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation. The Controller shall prepare or cause to be prepared appropriate financial statements for the corporation and shall perform such other duties as may be incident to the office of Controller. 10. Other Officers and Assistant Officers. All other officers and assistant officers shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors or the Chief Executive Officer. 11. Term of Office; Vacancies. Each officer shall hold office until the annual meeting of the Board of Directors follow ing the end of the term of the Board by which such officer is elected, except in the case of earlier death, resignation or removal. Vacancies in any office arising from any cause may be filled by the directors at any regular or special meeting. 12. Removal. Any officer elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the Board of Directors. ARTICLE V - Dividends and Finance 1. Dividends. Dividends may be declared to the full extent permitted by law at such times as the Board of Directors shall direct. 2. Deposits; Withdrawals; Notes and Other Instruments. The moneys of the corporation shall be deposited in the name of the corporation in such banks or trust companies as shall be designated by the Board of Directors, and shall be drawn out only by 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 corpora tion to whom the Board of Directors has delegated such authority. 3. Fiscal Year. The fiscal year of the corporation shall date from the first day of January in each year. ARTICLE VI - Books and Records; Record Date 1. Books and Records. The books, accounts and records of the corporation, except as may be otherwise required by the laws of the State of Delaware, may be kept within or outside of the said State at such places as the Board of Directors may from time to time appoint. 2. Record Date. (a) The Board of Directors is authorized to fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or other distribution or allotment of any rights, or the date when any change, conversion or exchange of capital stock shall go into effect, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend or other distribution or allotment of rights, or to exercise any rights in respect of any such change, conversion or exchange of capital stock. Such stockhold ers and only such stockholders as shall be stockholders of record on the record date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend or other distribution or allot ment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. Any such record date fixed in connection with a meeting of stockhold ers shall not be less than ten (10) days before the date of such meeting. (b) In order that the corporation may determine the stock holders entitled to consent to corporate action in writing without a meeting, the Board of Directors is authorized to fix in advance a record date, which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockhold er of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. If no record date has been fixed by the Board of Directors within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applica ble law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or the Secretary. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. Such stockholders and only such stockholders as shall be stockholders of record on the record date so fixed shall be entitled to give such consent, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. ARTICLE VII - Notices 1. Notices. Whenever any provision of law or these By- Laws requires notice to be given to any director, officer or stockholder, such notice may be given in writing by mailing the same to such director, officer or stockholder at his or her address as the same appears in the books of the corporation, unless such stockholder shall have filed with the Secretary a written request that notices intended for him or her be mailed to some other address, in which case it shall be mailed to the address designated in such request. The time when the same shall be mailed shall be deemed to be the time of the giving of such notice. This section shall not be deemed to preclude the giving of notice by other means if permitted by the applicable provision of law or these By-Laws. 2. Waivers of Notice. A waiver of any notice in writing, signed by a stockholder, director or officer, whether before or after the time stated in said waiver for holding a meeting, shall be deemed equivalent to a notice required to be given to any stockholder, director or officer. ARTICLE VIII - Contracts 1. Interested Directors or Officers. No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of the directors or officers of the corporation are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer of the corporation is present at or partici pates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (i) The material facts as to the relationship or interest of such person and as to the contract or transac tion are disclosed or are known to the Board of Directors or the committee thereof, and the Board of Directors or commit tee in good faith authorizes the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors of the corporation; provided, however, that common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or committee; or (ii) The material facts as to the relationship or interest of such person and as to the contract or transac tion are disclosed or are known to the stockholders of the corporation entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders of the corporation; or (iii) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders of the corporation. ARTICLE IX - Seal 1. Seal. The corporate seal of the corporation shall consist of two concentric circles, between which is the name of the corporation, and in the center shall be inscribed the year of its incorporation and the words, "Corporate Seal, Delaware." ARTICLE X - Indemnification 1. Indemnification in Third Party Actions. The corpora tion shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corpora tion as a director, officer, employee or agent of another corpo ration, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) actually and reasonably in curred by such person in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that no indemnification shall be made in respect of any proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was autho rized by the Board of Directors of the corporation. The termina tion of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. 2. Indemnification in an Action by or in the Right of the Corporation. The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threat ened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of (a) any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper, or (b) any proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the corporation. 3. Indemnification as of Right. To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections l and 2 of this Article X, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by such person in connection therewith. 4. Determination of Indemnification. Any indemnification under Sections 1 and 2 of this Article X (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circum stances because the person has met the applicable standard of conduct set forth in such Sections l and 2. Such determination shall be made (a) by the Board of Directors (the Board) by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (c) by the stockholders. 5. Advance for Expenses. Expenses (including attorneys' fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation as authorized in this Article X. 6. General Provisions. (a) All expenses (including attorneys' fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding which are advanced by the corporation under Section 5 of this Article X shall be repaid (i) in case the person receiving such advance is ultimately found, under the procedure set forth in this Article X, not to be entitled to indemnification, or (ii) where indemnification is granted, to the extent that the expenses so advanced by the corporation exceed the indemnification to which such person is entitled. (b) The corporation may indemnify each person, though he or she is not or was not a director, officer, employee or agent of the corporation, who served at the request of the corporation on a committee created by the Board to consider and report to it in respect of any matter. Any such indemnification may be made under the preceding provisions of this Article X and shall be subject to the limitations thereof except that (as indicated) any such committee member need not be nor have been a director, officer, employee or agent of the corporation. (c) The provisions of this Article X shall be applicable to appeals. References to "serving at the request of the corpora tion" shall include without limitation any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries. A person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation." (d) If any section, subsection, paragraph, sentence, clause, phrase or word in this Article X shall be adjudicated invalid or unenforceable, such adjudication shall not be deemed to invalidate or otherwise affect any other section, subsection, paragraph, sentence, clause, phrase or word of this Article. (e) The indemnification and advancement of expenses provid ed by, or granted pursuant to, this Article X shall not be deemed exclusive of any other rights to which those seeking indemnifica tion or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE XI - Amendments 1. Amendments. Alterations or amendments of these By-Laws may be made by the stockholders at any annual or special meeting if the notice of such meeting contains a statement of the pro posed alteration or amendment, or by the Board of Directors at any annual, regular or special meeting, provided notice of such alteration or amendment has been given to each director in writing at least five (5) days prior to said meeting or has been waived by all the directors. 060195 bylaws\rmet EX-10 3 EXHIBIT 10.34 SPLIT DOLLAR LIFE INSURANCE AGREEMENT [Trustee Owner, Trustee Pays Premiums] This SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement") is entered into as of this ____ day of __________, 1995, by and between REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"); _____________, Trustee under a Agreement made by ______________ dated ___________ __, 19__ (the "Trustee"); and __________________ (the "Employee"). RECITALS In recognition of the services of the Employee to the Corporation, the Corporation has determined that its best interests would be served by entering into this Split Dollar Life Insurance Agreement with the Trustee, whereby the Corporation will assist the Trustee in maintaining certain life insurance on the Employee's life, subject to the condition that the Corporation is to be repaid for any amounts which the Corporation may contribute toward the payment of any premiums due on such policy. In furtherance of the purposes of this Agreement, the Trustee will own a policy or policies of life insurance (collectively the "Policies" and individually the "Policy") issued by Northwestern Mutual Life Insurance Company (the "Insurer") on the Employee's life. The Trustee's ownership of the Policies shall be subject to the terms and conditions contained in this Agreement. AGREEMENT Now, therefore, the Corporation, the Trustee and the Employee agree as follows: I. DEATH BENEFIT. The Trustee shall acquire, with the Corporation's assistance, an insurance policy with a death benefit ("Trustee's Death Benefit") in an amount equal to two times the Employee's "Annual Earnings." Annual Earnings is defined as the Employee's current annual base salary plus any amount awarded to the Employee under a cash incentive plan in the previous calendar year, or such other definition of Annual Earnings as may be in effect from time to time under the Corporation's Group Term Life Insurance Plan for Salaried Employees. The Trustee's Death Benefit will be adjusted annually to reflect any increase in the Employee's Annual Earnings. The Trustee's Death Benefit will increase if the Employee's Annual Earnings increase. Except as otherwise provided in this Agreement, the Trustee's Death Benefit will not decrease if the Employee's Annual Earnings decrease. The Trustee's Death Benefit shall be reduced as of each Policy Release Date, as defined in Article VII of this Agreement, by that amount equal to the difference between (i) the total insurance death proceeds of the Released Policy, as defined in Article VII of this Agreement, as of the Policy Release Date inclusive of any amounts borrowed against the Released Policy by the Trustee, and (ii) the total premiums advanced by the Corporation with respect to the Released Policy. When the Employee reaches age sixty-five, the Trustee's Death Benefit shall decrease by one percent (the "Reduction Amount") of the Trustee's Death Benefit in effect at that time. The Trustee's Death Benefit will continue to decrease by the Reduction Amount each month for the next succeeding forty-nine months. During the fifty month period in which the Trustee's Death Benefit is being reduced by the Reduction Amount, if the Trustee's Death Benefit is also reduced due to a Released Policy pursuant to Article VII of this Agreement, the Reduction Amount shall be an amount equal to the previous Reduction Amount multiplied by a fraction. The numerator of the fraction shall equal the reduction in the Trustee's Death Benefit due to the Released Policy, and the denominator of the fraction shall equal the Trustee's Death Benefit prior to such reduction in the Trustee's Death Benefit. If the Employee retires prior to the Employee's sixty-fifth birthday, the Trustee's Death Benefit shall increase each year by five percent of the previous year's Trustee's Death Benefit. This annual five percent increase shall continue until the Employee reaches age sixty-five. As the Trustee's Death Benefit increases, temporary coverage for such increase in the Trustee's Death Benefit may be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees until an additional Policy is obtained under this Agreement. The Employee may be required to apply and qualify for additional coverage that may arise due to increases in the Trustee's Death Benefit. If the Employee does not receive satisfactory underwriting, any increases in the Trustee's Death Benefit will be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees. Any part of the Trustee's Death Benefit paid under the Corporation's Group Term Life Insurance Plan for Salaried Employees will be paid to the beneficiary designated under that plan in accordance with its terms and conditions. II. RIGHTS IN THE POLICY. All insurance policies on the life of the Employee that are subject to this Agreement shall be identified and made part of this Agreement by their inclusion on the attached Schedule A. Other insurance policies on the life of the Employee may be made subject to the terms of this Agreement by amending the description in Schedule A to include such policies. The Trustee is the owner of the Policies. The Policies are subject to the terms of this Agreement. The Trustee may exercise all ownership rights granted to the owner by the terms of the Policies, including without limitation, the right to assign rights and interests in the Policies, the right to change the beneficiary of the Policies and the right to exercise any and all settlement options applicable to the Policies. With written permission from the Corporation, the Trustee may borrow against the cash value of the Policies up to the difference between (i) the cash value of the Policies and (ii) the total amount of the premiums advanced by the Corporation. III. PAYMENT OF PREMIUMS. The Corporation will pay the entire annual premium due on the Policies (after taking into account any dividends) and will be reimbursed by the Trustee for the Trustee's portion of the annual premium. The Trustee is responsible for that portion of the annual premium which is equal to the lesser of (i) the amount of the entire economic benefit that would be taxable to the Trustee but for such payment, or (ii) the entire annual premium due on the Policies (the "Trustee's Portion"). The amount of the economic benefit to the Trustee shall be calculated using the lower of the P.S. 58 rates or the Insurer's term rates in accordance with Rev. Ruls. 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B. 12, or their successors, as in effect on the effective date of this Agreement. The Corporation's portion of the annual premium is equal to the entire annual premium less the Trustee's Portion (the "Corporation's Portion"). The Trustee shall be required to reimburse the Corporation for the Trustee's Portion of the premium within thirty days of the receipt of a statement from the Corporation or its delegate requesting such payment. If the Trustee does not reimburse the Corporation within the thirty day period, the Corporation (without notice to the Employee or Trustee) may make monthly or semi-monthly payroll deductions for any amounts then due and may continue to make monthly or semi-monthly payroll deductions for any future Trustee's Portion of the premium from the Employee's salary. The Employee hereby consents to the Corporation making such monthly or semi-monthly payroll deductions from the Employee's salary. In no case shall the Corporation be required to advance the Trustee, under this Article III, an amount in excess of $10,000.00. IV. COLLATERAL ASSIGNMENT. All sums advanced by the Corporation to pay the Corporation's Portion of the annual premiums shall be repayable to the Corporation as herein provided, notwithstanding termination of this Agreement. The Trustee shall assign the Policies to the Corporation as security for such advances by executing an Assignment of Life Insurance Policy as Collateral (the "Collateral Assignment") for each separate Policy. Subject to the terms of the Collateral Assignment, the Corporation shall not possess any incidents of ownership in the Policies and shall not be entitled to exercise any rights, privileges or benefits of ownership in the Policies. The Trustee shall possess all incidents of ownership in the Policies. V. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the occurrence of any of the following events: A. Performance of its terms, following the death of the Employee; B. Upon the Policy Release Date of the last Policy to be released from this Agreement pursuant to Article VII; C. The termination of the Employee's employment with the Corporation for reasons other than total disability (as defined under the Corporation's Long Term Disability Plan for Salaried Employees, or any successor plan) or retirement (defined as termination of employment at a time when the Employee is entitled to an immediate benefit under the Corporation's New Retirement Program for Salaried Employees, or any successor plan); D. Upon the failure of the Trustee or Employee to pay on a timely basis the Trustee's Portion of the premiums; E. Receivership or dissolution of the Corporation; F. Delivery to the Corporation of a written instrument of termination signed by the Trustee; or G. Delivery to the Trustee of a written instrument of termination authorized by the Corporation's Board of Directors. VI. RIGHTS TO THE PROCEEDS AT DEATH. So long as this Agreement is in effect, the beneficiary provisions of the Policies shall provide that the death proceeds due under the Policies shall be distributed to the following persons in the following order: 1) the Corporation shall receive an amount equal to the total premiums advanced by the Corporation (excluding amounts already reimbursed to the Corporation by the Trustee); 2) after the Corporation has received all of the premiums it advanced as provided above, the Trustee's designated beneficiary shall receive the remaining death proceeds, but in no event shall the amount paid to the designated beneficiary hereunder exceed an amount equal to the Trustee's Death Benefit; and 3) the Corporation shall receive the remaining death proceeds, if any. VII. POLICY RELEASE. Each separate Policy shall no longer be subject to the terms of this Agreement upon the later of (i) the Policy's anniversary date following the Employee's sixty-fifth birthday, or (ii) the expiration of fifteen policy years commencing on the effective date of the Policy (the "Policy Release Date"). At this time, the Trustee may repay to the Corporation, within sixty (60) days of such Policy Release Date, an amount equal to the total premiums advanced by the Corporation with respect to that Policy (the "Released Policy"). Also at this time, the Trustee's Death Benefit will be reduced as provided in Article I of this Agreement. Upon receipt of such payment from the Trustee, the Corporation shall release the Collateral Assignment securing the Released Policy by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Released Policy to the Trustee. If the Trustee does not repay the Corporation the amount calculated above within the prescribed time period, the Trustee shall be required to transfer ownership of the Released Policy to the Corporation, and the Trustee's Death Benefit will be reduced as provided in Article I of this Agreement. If the cash value of the Released Policy as of the Policy Release Date is less than the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date, the Trustee, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date and (ii) the cash value of the Released Policy as of the Policy Release Date. VIII. RIGHTS UPON TERMINATION OF THE AGREEMENT OTHER THAN DEATH OF THE EMPLOYEE. Upon the termination of this Agreement as provided in paragraphs C. through G. of Article V, the Trustee may repay to the Corporation, within sixty (60) days of such termination, an amount equal to the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement. Upon receipt of such payment from the Trustee, the Corporation shall release the Collateral Assignments by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Policies to the Trustee. If the Trustee does not repay the Corporation the amount calculated above within the prescribed time period, the Trustee shall be required to transfer ownership of the Policies to the Corporation. Except as provided below, if the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement is less than the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement, the Trustee, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. If the Corporation terminates the Agreement pursuant to paragraph G. of Article V of this Agreement, the Trustee and Employee are not obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. IX. NAMED FIDUCIARY. The Corporation is hereby designated as the "Named Fiduciary" under this Agreement. The Named Fiduciary shall have authority to control and manage the operation and administration of this Agreement, and it shall be responsible for establishing and carrying out a funding policy and method consistent with the objectives of this Agreement. The Corporation shall, in its discretion, make all determinations concerning rights to benefits under this Agreement. Should the Trustee or other beneficiary of the Policies fail to receive benefits to which the Trustee (or other beneficiary) believes he is entitled, a claim may be filed. Any claim for a benefit due in connection with this Agreement shall be filed by the Trustee or other beneficiary (the "Claimant") by written communication made by the Claimant or the Claimant's authorized representative to the Named Fiduciary. All such claims and notices shall be made in the manner provided in Article XIII of this Agreement. If a claim for a benefit is wholly or partially denied, a written notice of the decision shall be furnished to the Claimant by the Named Fiduciary or its designee within a reasonable period of time after receipt of the claim by the Named Fiduciary. The notice shall include the following information: a. The specific reason or reasons for the denial; b. Specific reference to the pertinent provisions of this Agreement and/or the Policy upon which the denial is based; c. A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and d. An explanation of all claim review procedures available under this Agreement. For purposes of the immediately preceding paragraph, a period of time shall be deemed to be unreasonable if it exceeds 90 days after receipt of the claim by the Named Fiduciary, unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Named Fiduciary expects to render the final decision. In order that a Claimant may appeal a denial of claim, a Claimant or his duly authorized representative may request a review by written application to the Named Fiduciary or his designee not later than 60 days after receipt by the Claimant of written notification of denial of a claim and may submit issues and comments in writing. A decision on review of a denied claim shall be made not later than 60 days after the Named Fiduciary's receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered within a reasonable period of time, but not later than 120 days after receipt of a request for review. The decision on review shall be in writing and shall include the specific reason(s) for the decision and the specific reference(s) to the pertinent provisions of this Agreement and/or the Policies on which the decision is based. Notwithstanding anything contained in this Article IX to the contrary, any claim for a death benefit under an insurance policy listed on Schedule A attached hereto shall be filed with the Insurer by the Claimant or his authorized representative on the form or forms prescribed for such purpose by the Insurer. The Insurer shall be responsible for determining whether a death claim shall or shall not be paid, either in whole or in part, in accordance with the terms of the insurance contract purchased on the life of the Employee. X. AMENDMENT AND ASSIGNMENT. The Corporation may, in its sole discretion, alter, amend or modify (including the addition of any extra Policy provisions) this Agreement at any time by a written instrument authorized by the Corporation, or its designee, and delivered to the Trustee and Employee. The Corporation or the Trustee may, subject to the limitations of Article IV, assign its rights and obligations under this Agreement, provided, however, that any assignment will be subject to the terms of this Agreement. XI. SEVERABILITY. The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement. XII. POSSESSION OF POLICIES. The Corporation will maintain possession of the Policies during the term of this Agreement. XIII. NOTICE. All notices, claims, requests and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed by certified or registered mail to the Corporation as follows: Attention: Corporate Director, Compensation and Benefits, Reynolds Metals Company, 6601 W. Broad Street, P.O. Box 27003, Richmond, Virginia 23261-7003 or to the Trustee and Employee at their last known addresses or at such addresses as any party shall designate to the other parties in writing. XIV. GOVERNING LAW. This Agreement sets forth the entire agreement of the parties hereto, and any and all prior agreements, to the extent inconsistent herewith, are hereby superseded. This Agreement will be governed by the laws of the Commonwealth of Virginia. XV. INTERPRETATION. Where appropriate in this Agreement, words used in the singular will include the plural and words used in the masculine will include the feminine. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. Reynolds Metals Company By: _____________________________ Title:___________________________ _________________________________ _________________________, Trustee __________________________________ _________________________, Employee LIST OF SCHEDULES A. Schedule of the Policies LIST OF EXHIBITS 1. Copies of Insurance Policies 2. Assignments of Life Insurance Death Benefit as Collateral SCHEDULE A The following life insurance policies are subject to that certain Split Dollar Life Insurance Agreement dated as of__________ __, 1995, among Reynolds Metals Company, ________________, Trustee and___________________. Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: 0190098.02 EX-10 4 EXHIBIT 10.35 SPLIT DOLLAR LIFE INSURANCE AGREEMENT [Trustee Owner, Employee Pays Premium] This SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement") is entered into as of this ____ day of __________, 1995, by and between REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"); _____________, Trustee under a Trust Agreement made by ______________ dated ___________ __, 19__ (the "Trustee"); and __________________ (the "Employee"). RECITALS In recognition of the services of the Employee to the Corporation, the Corporation has determined that its best interests would be served by entering into this Split Dollar Life Insurance Agreement with the Trustee, whereby the Corporation will assist the Trustee in maintaining certain life insurance on the Employee's life, subject to the condition that the Corporation is to be repaid for any amounts which the Corporation may contribute toward the payment of any premiums due on such policy. In furtherance of the purposes of this Agreement, the Trustee will own a policy or policies of life insurance (collectively the "Policies" and individually the "Policy") issued by Northwestern Mutual Life Insurance Company (the "Insurer") on the Employee's life. The Trustee's ownership of the Policies shall be subject to the terms and conditions contained in this Agreement. AGREEMENT Now, therefore, the Corporation, the Trustee and the Employee agree as follows: I. DEATH BENEFIT. The Trustee shall acquire, with the Corporation's assistance, an insurance policy with a death benefit ("Trustee's Death Benefit") in an amount equal to two times the Employee's "Annual Earnings." Annual Earnings is defined as the Employee's current annual base salary plus any amount awarded to the Employee under a cash incentive plan in the previous calendar year, or such other definition of Annual Earnings as may be in effect from time to time under the Corporation's Group Term Life Insurance Plan for Salaried Employees. The Trustee's Death Benefit will be adjusted annually to reflect any increase in the Employee's Annual Earnings. The Trustee's Death Benefit will increase if the Employee's Annual Earnings increase. Except as otherwise provided in this Agreement, the Trustee's Death Benefit will not decrease if the Employee's Annual Earnings decrease. The Trustee's Death Benefit shall be reduced as of each Policy Release Date, as defined in Article VII of this Agreement, by that amount equal to the difference between (i) the total insurance death proceeds of the Released Policy, as defined in Article VII of this Agreement, as of the Policy Release Date inclusive of any amounts borrowed against the Released Policy by the Trustee, and (ii) the total premiums advanced by the Corporation with respect to the Released Policy. When the Employee reaches age sixty-five, the Trustee's Death Benefit shall decrease by one percent (the "Reduction Amount") of the Trustee's Death Benefit in effect at that time. The Trustee's Death Benefit will continue to decrease by the Reduction Amount each month for the next succeeding forty-nine months. During the fifty month period in which the Trustee's Death Benefit is being reduced by the Reduction Amount, if the Trustee's Death Benefit is also reduced due to a Released Policy pursuant to Article VII of this Agreement, the Reduction Amount shall be an amount equal to the previous Reduction Amount multiplied by a fraction. The numerator of the fraction shall equal the reduction in the Trustee's Death Benefit due to the Released Policy, and the denominator of the fraction shall equal the Trustee's Death Benefit prior to such reduction in the Trustee's Death Benefit. If the Employee retires prior to the Employee's sixty-fifth birthday, the Trustee's Death Benefit shall increase each year by five percent of the previous year's Trustee's Death Benefit. This annual five percent increase shall continue until the Employee reaches age sixty-five. As the Trustee's Death Benefit increases, temporary coverage for such increase in the Trustee's Death Benefit may be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees until an additional Policy is obtained under this Agreement. The Employee may be required to apply and qualify for additional coverage that may arise due to increases in the Trustee's Death Benefit. If the Employee does not receive satisfactory underwriting, any increases in the Trustee's Death Benefit will be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees. Any part of the Trustee's Death Benefit paid under the Corporation's Group Term Life Insurance Plan for Salaried Employees will be paid to the beneficiary designated under that plan in accordance with its terms and conditions. II. RIGHTS IN THE POLICY. All insurance policies on the life of the Employee that are subject to this Agreement shall be identified and made part of this Agreement by their inclusion on the attached Schedule A. Other insurance policies on the life of the Employee may be made subject to the terms of this Agreement by amending the description in Schedule A to include such policies. The Trustee is the owner of the Policies. The Policies are subject to the terms of this Agreement. The Trustee may exercise all ownership rights granted to the owner by the terms of the Policies, including without limitation, the right to assign rights and interests in the Policies, the right to change the beneficiary of the Policies and the right to exercise any and all settlement options applicable to the Policies. With written permission from the Corporation, the Trustee may borrow against the cash value of the Policies up to the difference between (i) the cash value of the Policies and (ii) the total amount of the premiums advanced by the Corporation. III. PAYMENT OF PREMIUMS. The Corporation will pay the entire annual premium due on the Policies (after taking into account any dividends) and will be reimbursed by the Employee for the Trustee's portion of the annual premium. The Employee is responsible for that portion of the annual premium which is equal to the lesser of (i) the amount of the entire economic benefit that would be taxable to the Trustee but for such payment, or (ii) the entire annual premium due on the Policies (the "Trustee's Portion"). The amount of the economic benefit to the Trustee shall be calculated using the lower of the P.S. 58 rates or the Insurer's term rates in accordance with Rev. Ruls. 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B. 12, or their successors, as in effect on the effective date of this Agreement. The Corporation's portion of the annual premium is equal to the entire annual premium less the Trustee's Portion (the "Corporation's Portion"). The Employee hereby consents to the Corporation making monthly or semi-monthly payroll deductions of the Trustee's Portion of the premium from the Employee's salary. In no case shall the Corporation be required to advance the Trustee, under this Article III, an amount in excess of $10,000.00. IV. COLLATERAL ASSIGNMENT. All sums advanced by the Corporation to pay the Corporation's Portion of the annual premiums shall be repayable to the Corporation as herein provided, notwithstanding termination of this Agreement. The Trustee shall assign the Policies to the Corporation as security for such advances by executing an Assignment of Life Insurance Policy as Collateral (the "Collateral Assignment") for each separate Policy. Subject to the terms of the Collateral Assignment, the Corporation shall not possess any incidents of ownership in the Policies and shall not be entitled to exercise any rights, privileges or benefits of ownership in the Policies. The Trustee shall possess all incidents of ownership in the Policies. V. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the occurrence of any of the following events: A. Performance of its terms, following the death of the Employee; B. Upon the Policy Release Date of the last Policy to be released from this Agreement pursuant to Article VII; C. The termination of the Employee's employment with the Corporation for reasons other than total disability (as defined under the Corporation's Long Term Disability Plan for Salaried Employees, or any successor plan) or retirement (defined as termination of employment at a time when the Employee is entitled to an immediate benefit under the Corporation's New Retirement Program for Salaried Employees, or any successor plan); D. Upon the failure of the Employee to pay on a timely basis the Trustee's Portion of the premiums; E. Receivership or dissolution of the Corporation; F. Delivery to the Corporation of a written instrument of termination signed by the Trustee; or G. Delivery to the Trustee of a written instrument of termination authorized by the Corporation's Board of Directors. VI. RIGHTS TO THE PROCEEDS AT DEATH. So long as this Agreement is in effect, the beneficiary provisions of the Policies shall provide that the death proceeds due under the Policies shall be distributed to the following persons in the following order: 1) the Corporation shall receive an amount equal to the total premiums advanced by the Corporation (excluding amounts already reimbursed to the Corporation by the Trustee); 2) after the Corporation has received all of the premiums it advanced as provided above, the Trustee's designated beneficiary shall receive the remaining death proceeds, but in no event shall the amount paid to the designated beneficiary hereunder exceed an amount equal to the Trustee's Death Benefit; and 3) the Corporation shall receive the remaining death proceeds, if any. VII. POLICY RELEASE. Each separate Policy shall no longer be subject to the terms of this Agreement upon the later of (i) the Policy's anniversary date following the Employee's sixty-fifth birthday, or (ii) the expiration of fifteen policy years commencing on the effective date of the Policy (the "Policy Release Date"). At this time, the Trustee may repay to the Corporation, within sixty (60) days of such Policy Release Date, an amount equal to the total premiums advanced by the Corporation with respect to that Policy (the "Released Policy"). Also at this time, the Trustee's Death Benefit will be reduced as provided in Article I of this Agreement. Upon receipt of such payment from the Trustee, the Corporation shall release the Collateral Assignment securing the Released Policy by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Released Policy to the Trustee. If the Trustee does not repay the Corporation the amount calculated above within the prescribed time period, the Trustee shall be required to transfer ownership of the Released Policy to the Corporation, and the Trustee's Death Benefit will be reduced as provided in Article I of this Agreement. If the cash value of the Released Policy as of the Policy Release Date is less than the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date, the Trustee, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date and (ii) the cash value of the Released Policy as of the Policy Release Date. VIII. RIGHTS UPON TERMINATION OF THE AGREEMENT OTHER THAN DEATH OF THE EMPLOYEE. Upon the termination of this Agreement as provided in paragraphs C. through G. of Article V, the Trustee may repay to the Corporation, within sixty (60) days of such termination, an amount equal to the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement. Upon receipt of such payment from the Trustee, the Corporation shall release the Collateral Assignments by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Policies to the Trustee. If the Trustee does not repay the Corporation the amount calculated above within the prescribed time period, the Trustee shall be required to transfer ownership of the Policies to the Corporation. Except as provided below, if the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement is less than the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement, the Trustee, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. If the Corporation terminates the Agreement pursuant to paragraph G. of Article V of this Agreement, the Trustee and Employee are not obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Trustee) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. IX. NAMED FIDUCIARY. The Corporation is hereby designated as the "Named Fiduciary" under this Agreement. The Named Fiduciary shall have authority to control and manage the operation and administration of this Agreement, and it shall be responsible for establishing and carrying out a funding policy and method consistent with the objectives of this Agreement. The Corporation shall, in its discretion, make all determinations concerning rights to benefits under this Agreement. Should the Trustee or other beneficiary of the Policies fail to receive benefits to which the Trustee (or other beneficiary) believes he is entitled, a claim may be filed. Any claim for a benefit due in connection with this Agreement shall be filed by the Trustee or other beneficiary (the "Claimant") by written communication made by the Claimant or the Claimant's authorized representative to the Named Fiduciary. All such claims and notices shall be made in the manner provided in Article XIII of this Agreement. If a claim for a benefit is wholly or partially denied, a written notice of the decision shall be furnished to the Claimant by the Named Fiduciary or its designee within a reasonable period of time after receipt of the claim by the Named Fiduciary. The notice shall include the following information: a. The specific reason or reasons for the denial; b. Specific reference to the pertinent provisions of this Agreement and/or the Policy upon which the denial is based; c. A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and d. An explanation of all claim review procedures available under this Agreement. For purposes of the immediately preceding paragraph, a period of time shall be deemed to be unreasonable if it exceeds 90 days after receipt of the claim by the Named Fiduciary, unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Named Fiduciary expects to render the final decision. In order that a Claimant may appeal a denial of claim, a Claimant or his duly authorized representative may request a review by written application to the Named Fiduciary or his designee not later than 60 days after receipt by the Claimant of written notification of denial of a claim and may submit issues and comments in writing. A decision on review of a denied claim shall be made not later than 60 days after the Named Fiduciary's receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered within a reasonable period of time, but not later than 120 days after receipt of a request for review. The decision on review shall be in writing and shall include the specific reason(s) for the decision and the specific reference(s) to the pertinent provisions of this Agreement and/or the Policies on which the decision is based. Notwithstanding anything contained in this Article IX to the contrary, any claim for a death benefit under an insurance policy listed on Schedule A attached hereto shall be filed with the Insurer by the Claimant or his authorized representative on the form or forms prescribed for such purpose by the Insurer. The Insurer shall be responsible for determining whether a death claim shall or shall not be paid, either in whole or in part, in accordance with the terms of the insurance contract purchased on the life of the Employee. X. AMENDMENT AND ASSIGNMENT. The Corporation may, in its sole discretion, alter, amend or modify (including the addition of any extra Policy provisions) this Agreement at any time by a written instrument authorized by the Corporation, or its designee, and delivered to the Trustee and Employee. The Corporation or the Trustee may, subject to the limitations of Article IV, assign its rights and obligations under this Agreement, provided, however, that any assignment will be subject to the terms of this Agreement. XI. SEVERABILITY. The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement. XII. POSSESSION OF POLICIES. The Corporation will maintain possession of the Policies during the term of this Agreement. XIII. NOTICE. All notices, claims, requests and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed by certified or registered mail to the Corporation as follows: Attention: Corporate Director, Compensation and Benefits, Reynolds Metals Company, 6601 W. Broad Street, P.O. Box 27003, Richmond, Virginia 23261-7003 or to the Trustee and Employee at their last known addresses or at such addresses as any party shall designate to the other parties in writing. XIV. GOVERNING LAW. This Agreement sets forth the entire agreement of the parties hereto, and any and all prior agreements, to the extent inconsistent herewith, are hereby superseded. This Agreement will be governed by the laws of the Commonwealth of Virginia. XV. INTERPRETATION. Where appropriate in this Agreement, words used in the singular will include the plural and words used in the masculine will include the feminine. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. Reynolds Metals Company By: ______________________________ Title:____________________________ __________________________________ _________________________, Trustee __________________________________ _________________________, Employee LIST OF SCHEDULES A. Schedule of the Policies LIST OF EXHIBITS 1. Copies of Insurance Policies 2. Assignments of Life Insurance Death Benefit as Collateral SCHEDULE A The following life insurance policies are subject to that certain Split Dollar Life Insurance Agreement dated as of__________ __, 1995, among Reynolds Metals Company, ________________, Trustee and___________________. Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: 0190098.01 EX-10 5 EXHIBIT 10.36 SPLIT DOLLAR LIFE INSURANCE AGREEMENT [Employee Owner, Employee Pays Premium] This SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement") is entered into as of this ____ day of __________, 1995, by and between REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"), and __________________ (the "Employee"). RECITALS In recognition of the services of the Employee to the Corporation, the Corporation has determined that its best interests would be served by entering into this Split Dollar Life Insurance Agreement with the Employee, whereby the Corporation will assist the Employee in maintaining certain life insurance on the Employee's life, subject to the condition that the Corporation is to be repaid for any amounts which the Corporation may contribute toward the payment of any premiums due on such policy. In furtherance of the purposes of this Agreement, the Employee will own a policy or policies of life insurance (collectively the "Policies" and individually the "Policy") issued by Northwestern Mutual Life Insurance Company (the "Insurer") on the Employee's life. The Employee's ownership of the Policies shall be subject to the terms and conditions contained in this Agreement. AGREEMENT Now, therefore, the Corporation and the Employee agree as follows: I. DEATH BENEFIT. The Employee shall acquire, with the Corporation's assistance, an insurance policy with a death benefit ("Employee's Death Benefit") in an amount equal to two times the Employee's "Annual Earnings." Annual Earnings is defined as the Employee's current annual base salary plus any amount awarded to the Employee under a cash incentive plan in the previous calendar year, or such other definition of Annual Earnings as may be in effect from time to time under the Corporation's Group Term Life Insurance Plan for Salaried Employees. The Employee's Death Benefit will be adjusted annually to reflect any increase in the Employee's Annual Earnings. The Employee's Death Benefit will increase if the Employee's Annual Earnings increase. Except as otherwise provided in this Agreement, the Employee's Death Benefit will not decrease if the Employee's Annual Earnings decrease. The Employee's Death Benefit shall be reduced as of each Policy Release Date, as defined in Article VII of this Agreement, by that amount equal to the difference between (i) the total insurance death proceeds of the Released Policy, as defined in Article VII of this Agreement, as of the Policy Release Date inclusive of any amounts borrowed against the Released Policy by the Employee, and (ii) the total premiums advanced by the Corporation with respect to the Released Policy. When the Employee reaches age sixty-five, the Employee's Death Benefit shall decrease by one percent (the "Reduction Amount") of the Employee's Death Benefit in effect at that time. The Employee's Death Benefit will continue to decrease by the Reduction Amount each month for the next succeeding forty-nine months. During the fifty month period in which the Employee's Death Benefit is being reduced by the Reduction Amount, if the Employee's Death Benefit is also reduced due to a Released Policy pursuant to Article VII of this Agreement, the Reduction Amount shall be an amount equal to the previous Reduction Amount multiplied by a fraction. The numerator of the fraction shall equal the reduction in the Employee's Death Benefit due to the Released Policy, and the denominator of the fraction shall equal the Employee's Death Benefit prior to such reduction in the Employee's Death Benefit. If the Employee retires prior to the Employee's sixty-fifth birthday, the Employee's Death Benefit shall increase each year by five percent of the previous year's Employee's Death Benefit. This annual five percent increase shall continue until the Employee reaches age sixty-five. As the Employee's Death Benefit increases, temporary coverage for such increase in the Employee's Death Benefit may be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees until an additional Policy is obtained under this Agreement. The Employee may be required to apply and qualify for additional coverage that may arise due to increases in the Employee's Death Benefit. If the Employee does not receive satisfactory underwriting, any increases in the Employee's Death Benefit will be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees. Any part of the Employee's Death Benefit paid under the Corporation's Group Term Life Insurance Plan for Salaried Employees will be paid to the beneficiary designated under that plan in accordance with its terms and conditions. II. RIGHTS IN THE POLICY. All insurance policies on the life of the Employee that are subject to this Agreement shall be identified and made part of this Agreement by their inclusion on the attached Schedule A. Other insurance policies on the life of the Employee may be made subject to the terms of this Agreement by amending the description in Schedule A to include such policies. The Employee is the owner of the Policies. The Policies are subject to the terms of this Agreement. The Employee may exercise all ownership rights granted to the owner by the terms of the Policies, including without limitation, the right to assign rights and interests in the Policies, the right to change the beneficiary of the Policies and the right to exercise any and all settlement options applicable to the Policies. With written permission from the Corporation, the Employee may borrow against the cash value of the Policies up to the difference between (i) the cash value of the Policies and (ii) the total amount of the premiums advanced by the Corporation. III. PAYMENT OF PREMIUMS. The Corporation will pay the entire annual premium due on the Policies (after taking into account any dividends) and will be reimbursed by the Employee for the Employee's portion of the annual premium. The Employee is responsible for that portion of the annual premium which is equal to the lesser of (i) the amount of the entire economic benefit that would be taxable to the Employee but for such payment, or (ii) the entire annual premium due on the Policies (the "Employee's Portion"). The amount of the economic benefit to the Employee shall be calculated using the lower of the P.S. 58 rates or the Insurer's term rates in accordance with Rev. Ruls. 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B. 12, or their successors, as in effect on the effective date of this Agreement. The Corporation's portion of the annual premium is equal to the entire annual premium less the Employee's Portion (the "Corporation's Portion"). The Employee hereby consents to the Corporation making monthly or semi-monthly payroll deductions of the Employee's Portion of the premium from the Employee's salary. This consent shall not be revoked if the Employee subsequently assigns his rights and obligations under this Agreement. In no case shall the Corporation be required to advance the Employee, under this Article III, an amount in excess of $10,000.00. IV. COLLATERAL ASSIGNMENT. All sums advanced by the Corporation to pay the Corporation's Portion of the annual premiums shall be repayable to the Corporation as herein provided, notwithstanding termination of this Agreement. The Employee shall assign the Policies to the Corporation as security for such advances by executing an Assignment of Life Insurance Policy as Collateral (the "Collateral Assignment") for each separate Policy. Subject to the terms of the Collateral Assignment, the Corporation shall not possess any incidents of ownership in the Policies and shall not be entitled to exercise any rights, privileges or benefits of ownership in the Policies. The Employee shall possess all incidents of ownership in the Policies. V. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the occurrence of any of the following events: A. Performance of its terms, following the death of the Employee; B. Upon the Policy Release Date of the last Policy to be released from this Agreement pursuant to Article VII; C. The termination of the Employee's employment with the Corporation for reasons other than total disability (as defined under the Corporation's Long Term Disability Plan for Salaried Employees, or any successor plan) or retirement (defined as termination of employment at a time when the Employee is entitled to an immediate benefit under the Corporation's New Retirement Program for Salaried Employees, or any successor plan); D. Upon the failure of the Employee to pay on a timely basis the Employee's Portion of the premiums; E. Receivership or dissolution of the Corporation; F. Delivery to the Corporation of a written instrument of termination signed by the Employee; or G. Delivery to the Employee of a written instrument of termination authorized by the Corporation's Board of Directors. VI. RIGHTS TO THE PROCEEDS AT DEATH. So long as this Agreement is in effect, the beneficiary provisions of the Policies shall provide that the death proceeds due under the Policies shall be distributed as follows: 1) the Corporation shall receive an amount equal to the total premiums advanced by the Corporation (excluding amounts already reimbursed to the Corporation by the Employee); 2) after the Corporation has received all of the premiums it advanced as provided above, the Employee's designated beneficiary shall receive the remaining death proceeds, but in no event shall the amount paid to the designated beneficiary hereunder exceed an amount equal to the Employee's Death Benefit; and 3) the Corporation shall receive the remaining death proceeds, if any. VII. POLICY RELEASE. Each separate Policy shall no longer be subject to the terms of this Agreement upon the later of (i) the Policy's anniversary date following the Employee's sixty-fifth birthday, or (ii) the expiration of fifteen policy years commencing on the effective date of the Policy (the "Policy Release Date"). At this time, the Employee may repay to the Corporation, within sixty (60) days of such Policy Release Date, an amount equal to the total premiums advanced by the Corporation with respect to that Policy (the "Released Policy"). Also at this time, the Employee's Death Benefit will be reduced as provided in Article I of this Agreement. Upon receipt of such payment from the Employee, the Corporation shall release the Collateral Assignment securing the Released Policy by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Released Policy to the Employee. If the Employee does not repay the Corporation the amount calculated above within the prescribed time period, the Employee shall be required to transfer ownership of the Released Policy to the Corporation, and the Employee's Death Benefit will be reduced as provided in Article I of this Agreement. If the cash value of the Released Policy as of the Policy Release Date is less than the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date, the Employee is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date and (ii) the cash value of the Released Policy as of the Policy Release Date. VIII. RIGHTS UPON TERMINATION OF THE AGREEMENT OTHER THAN DEATH OF THE EMPLOYEE. Upon the termination of this Agreement as provided in paragraphs C. through G. of Article V, the Employee may repay to the Corporation, within sixty (60) days of such termination, an amount equal to the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Employee) as of the date of the termination of the Agreement. Upon receipt of such payment from the Employee, the Corporation shall release the Collateral Assignments by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Policies to the Employee. If the Employee does not repay the Corporation the amount calculated above within the prescribed time period, the Employee shall be required to transfer ownership of the Policies to the Corporation. Except as provided below, if the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement is less than the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Employee) as of the date of the termination of the Agreement, the Employee is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Employee) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. If the Corporation terminates the Agreement pursuant to paragraph G. of Article V of this Agreement, the Employee is not obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Employee) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. IX. NAMED FIDUCIARY. The Corporation is hereby designated as the "Named Fiduciary" under this Agreement. The Named Fiduciary shall have authority to control and manage the operation and administration of this Agreement, and it shall be responsible for establishing and carrying out a funding policy and method consistent with the objectives of this Agreement. The Corporation shall, in its discretion, make all determinations concerning rights to benefits under this Agreement. Should the Employee or other beneficiary of the Policies fail to receive benefits to which the Employee (or other beneficiary) believes he is entitled, a claim may be filed. Any claim for a benefit due in connection with this Agreement shall be filed by the Employee or other beneficiary (the "Claimant") by written communication made by the Claimant or the Claimant's authorized representative to the Named Fiduciary. All such claims and notices shall be made in the manner provided in Article XIII of this Agreement. If a claim for a benefit is wholly or partially denied, a written notice of the decision shall be furnished to the Claimant by the Named Fiduciary or its designee within a reasonable period of time after receipt of the claim by the Named Fiduciary. The notice shall include the following information: a. The specific reason or reasons for the denial; b. Specific reference to the pertinent provisions of this Agreement and/or the Policy upon which the denial is based; c. A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and d. An explanation of all claim review procedures available under this Agreement. For purposes of the immediately preceding paragraph, a period of time shall be deemed to be unreasonable if it exceeds 90 days after receipt of the claim by the Named Fiduciary, unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Named Fiduciary expects to render the final decision. In order that a Claimant may appeal a denial of claim, a Claimant or his duly authorized representative may request a review by written application to the Named Fiduciary or his designee not later than 60 days after receipt by the Claimant of written notification of denial of a claim and may submit issues and comments in writing. A decision on review of a denied claim shall be made not later than 60 days after the Named Fiduciary's receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered within a reasonable period of time, but not later than 120 days after receipt of a request for review. The decision on review shall be in writing and shall include the specific reason(s) for the decision and the specific reference(s) to the pertinent provisions of this Agreement and/or the Policies on which the decision is based. Notwithstanding anything contained in this Article IX to the contrary, any claim for a death benefit under an insurance policy listed on Schedule A attached hereto shall be filed with the Insurer by the Claimant or his authorized representative on the form or forms prescribed for such purpose by the Insurer. The Insurer shall be responsible for determining whether a death claim shall or shall not be paid, either in whole or in part, in accordance with the terms of the insurance contract purchased on the life of the Employee. X. AMENDMENT AND ASSIGNMENT. The Corporation may, in its sole discretion, alter, amend or modify (including the addition of any extra Policy provisions) this Agreement at any time by a written instrument authorized by the Corporation, or its designee, and delivered to the Employee. Either party may, subject to the limitations of Article IV, assign its rights and obligations under this Agreement, provided, however, that any assignment will be subject to the terms of this Agreement. XI. SEVERABILITY. The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement. XII. POSSESSION OF POLICIES. The Corporation will maintain possession of the Policies during the term of this Agreement. XIII. NOTICE. All notices, claims, requests and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed by certified or registered mail to the Corporation as follows: Attention: Corporate Director, Compensation and Benefits, Reynolds Metals Company, 6601 W. Broad Street, P.O. Box 27003, Richmond, Virginia 23261-7003 or to the Employee at his last known address or at such address as either party shall designate to the other party in writing. XIV. GOVERNING LAW. This Agreement sets forth the entire agreement of the parties hereto, and any and all prior agreements, to the extent inconsistent herewith, are hereby superseded. This Agreement will be governed by the laws of the Commonwealth of Virginia. XV. INTERPRETATION. Where appropriate in this Agreement, words used in the singular will include the plural and words used in the masculine will include the feminine. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. Reynolds Metals Company By: _____________________________ Title:___________________________ _________________________________ _________________________, Employee LIST OF SCHEDULES A. Schedule of the Policies LIST OF EXHIBITS 1. Copies of Insurance Policies 2. Assignments of Life Insurance Death Benefit as Collateral SCHEDULE A The following life insurance policies are subject to that certain Split Dollar Life Insurance Agreement dated as of__________ __, 1995, among Reynolds Metals Company and___________________. Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: 0184942.07 EX-10 6 EXHIBIT 10.37 SPLIT DOLLAR LIFE INSURANCE AGREEMENT [Third Party Owner, Third Party Pays Premiums] This SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement") is entered into as of this ____ day of __________, 1995, by and between REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"); _____________, (the "Owner"); and __________________ (the "Employee"). RECITALS In recognition of the services of the Employee to the Corporation, the Corporation has determined that its best interests would be served by entering into this Split Dollar Life Insurance Agreement with the Owner, whereby the Corporation will assist the Owner in maintaining certain life insurance on the Employee's life, subject to the condition that the Corporation is to be repaid for any amounts which the Corporation may contribute toward the payment of any premiums due on such policy. In furtherance of the purposes of this Agreement, the Owner will own a policy or policies of life insurance (collectively the "Policies" and individually the "Policy") issued by Northwestern Mutual Life Insurance Company (the "Insurer") on the Employee's life. The Owner's ownership of the Policies shall be subject to the terms and conditions contained in this Agreement. AGREEMENT Now, therefore, the Corporation, the Owner and the Employee agree as follows: I. DEATH BENEFIT. The Owner shall acquire, with the Corporation's assistance, an insurance policy with a death benefit ("Owner's Death Benefit") in an amount equal to two times the Employee's "Annual Earnings." Annual Earnings is defined as the Employee's current annual base salary plus any amount awarded to the Employee under a cash incentive plan in the previous calendar year, or such other definition of Annual Earnings as may be in effect from time to time under the Corporation's Group Term Life Insurance Plan for Salaried Employees. The Owner's Death Benefit will be adjusted annually to reflect any increase in the Employee's Annual Earnings. The Owner's Death Benefit will increase if the Employee's Annual Earnings increase. Except as otherwise provided in this Agreement, the Owner's Death Benefit will not decrease if the Employee's Annual Earnings decrease. The Owner's Death Benefit shall be reduced as of each Policy Release Date, as defined in Article VII of this Agreement, by that amount equal to the difference between (i) the total insurance death proceeds of the Released Policy, as defined in Article VII of this Agreement, as of the Policy Release Date inclusive of any amounts borrowed against the Released Policy by the Owner, and (ii) the total premiums advanced by the Corporation with respect to the Released Policy. When the Employee reaches age sixty-five, the Owner's Death Benefit shall decrease by one percent (the "Reduction Amount") of the Owner's Death Benefit in effect at that time. The Owner's Death Benefit will continue to decrease by the Reduction Amount each month for the next succeeding forty-nine months. During the fifty month period in which the Owner's Death Benefit is being reduced by the Reduction Amount, if the Owner's Death Benefit is also reduced due to a Released Policy pursuant to Article VII of this Agreement, the Reduction Amount shall be an amount equal to the previous Reduction Amount multiplied by a fraction. The numerator of the fraction shall equal the reduction in the Owner's Death Benefit due to the Released Policy, and the denominator of the fraction shall equal the Owner's Death Benefit prior to such reduction in the Owner's Death Benefit. If the Employee retires prior to the Employee's sixty-fifth birthday, the Owner's Death Benefit shall increase each year by five percent of the previous year's Owner's Death Benefit. This annual five percent increase shall continue until the Employee reaches age sixty-five. As the Owner's Death Benefit increases, temporary coverage for such increase in the Owner's Death Benefit may be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees until an additional Policy is obtained under this Agreement. The Employee may be required to apply and qualify for additional coverage that may arise due to increases in the Owner's Death Benefit. If the Employee does not receive satisfactory underwriting, any increases in the Owner's Death Benefit will be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees. Any part of the Owner's Death Benefit paid under the Corporation's Group Term Life Insurance Plan for Salaried Employees will be paid to the beneficiary designated under that plan in accordance with its terms and conditions. II. RIGHTS IN THE POLICY. All insurance policies on the life of the Employee that are subject to this Agreement shall be identified and made part of this Agreement by their inclusion on the attached Schedule A. Other insurance policies on the life of the Employee may be made subject to the terms of this Agreement by amending the description in Schedule A to include such policies. The Owner is the owner of the Policies. The Policies are subject to the terms of this Agreement. The Owner may exercise all ownership rights granted to the owner by the terms of the Policies, including without limitation, the right to assign rights and interests in the Policies, the right to change the beneficiary of the Policies and the right to exercise any and all settlement options applicable to the Policies. With written permission from the Corporation, the Owner may borrow against the cash value of the Policies up to the difference between (i) the cash value of the Policies and (ii) the total amount of the premiums advanced by the Corporation. III. PAYMENT OF PREMIUMS. The Corporation will pay the entire annual premium due on the Policies (after taking into account any dividends) and will be reimbursed by the Owner for the Owner's portion of the annual premium. The Owner is responsible for that portion of the annual premium which is equal to the lesser of (i) the amount of the entire economic benefit that would be taxable to the Owner but for such payment, or (ii) the entire annual premium due on the Policies (the "Owner's Portion"). The amount of the economic benefit to the Owner shall be calculated using the lower of the P.S. 58 rates or the Insurer's term rates in accordance with Rev. Ruls. 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B. 12, or their successors, as in effect on the effective date of this Agreement. The Corporation's portion of the annual premium is equal to the entire annual premium less the Owner's Portion (the "Corporation's Portion"). The Owner shall be required to reimburse the Corporation for the Owner's Portion of the premium within thirty days of the receipt of a statement from the Corporation or its delegate requesting such payment. If the Owner does not reimburse the Corporation within the thirty day period, the Corporation (without notice to the Employee or Owner) may make monthly or semi-monthly payroll deductions for any amounts then due and may continue to make monthly or semi-monthly payroll deductions for any future Owner's Portion of the premium from the Employee's salary. The Employee hereby consents to the Corporation making such monthly or semi-monthly payroll deductions from the Employee's salary. In no case shall the Corporation be required to advance the Owner, under this Article III, an amount in excess of $10,000.00. IV. COLLATERAL ASSIGNMENT. All sums advanced by the Corporation to pay the Corporation's Portion of the annual premiums shall be repayable to the Corporation as herein provided, notwithstanding termination of this Agreement. The Owner shall assign the Policies to the Corporation as security for such advances by executing an Assignment of Life Insurance Policy as Collateral (the "Collateral Assignment") for each separate Policy. Subject to the terms of the Collateral Assignment, the Corporation shall not possess any incidents of ownership in the Policies and shall not be entitled to exercise any rights, privileges or benefits of ownership in the Policies. The Owner shall possess all incidents of ownership in the Policies. V. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the occurrence of any of the following events: A. Performance of its terms, following the death of the Employee; B. Upon the Policy Release Date of the last Policy to be released from this Agreement pursuant to Article VII; C. The termination of the Employee's employment with the Corporation for reasons other than total disability (as defined under the Corporation's Long Term Disability Plan for Salaried Employees, or any successor plan) or retirement (defined as termination of employment at a time when the Employee is entitled to an immediate benefit under the Corporation's New Retirement Program for Salaried Employees, or any successor plan); D. Upon the failure of the Owner or Employee to pay on a timely basis the Owner's Portion of the premiums; E. Receivership or dissolution of the Corporation; F. Delivery to the Corporation of a written instrument of termination signed by the Owner; or G. Delivery to the Owner of a written instrument of termination authorized by the Corporation's Board of Directors. VI. RIGHTS TO THE PROCEEDS AT DEATH. So long as this Agreement is in effect, the beneficiary provisions of the Policies shall provide that the death proceeds due under the Policies shall be distributed to the following persons in the following order: 1) the Corporation shall receive an amount equal to the total premiums advanced by the Corporation (excluding amounts already reimbursed to the Corporation by the Owner); 2) after the Corporation has received all of the premiums it advanced as provided above, the Owner's designated beneficiary shall receive the remaining death proceeds, but in no event shall the amount paid to the designated beneficiary hereunder exceed an amount equal to the Owner's Death Benefit; and 3) the Corporation shall receive the remaining death proceeds, if any. VII. POLICY RELEASE. Each separate Policy shall no longer be subject to the terms of this Agreement upon the later of (i) the Policy's anniversary date following the Employee's sixty-fifth birthday, or (ii) the expiration of fifteen policy years commencing on the effective date of the Policy (the "Policy Release Date"). At this time, the Owner may repay to the Corporation, within sixty (60) days of such Policy Release Date, an amount equal to the total premiums advanced by the Corporation with respect to that Policy (the "Released Policy"). Also at this time, the Owner's Death Benefit will be reduced as provided in Article I of this Agreement. Upon receipt of such payment from the Owner, the Corporation shall release the Collateral Assignment securing the Released Policy by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Released Policyto the Owner. If the Owner does not repay the Corporation the amount calculated above within the prescribed time period, the Owner shall be required to transfer ownership of the Released Policy to the Corporation, and the Owner's Death Benefit will be reduced as provided in Article I of this Agreement. If the cash value of the Released Policy as of the Policy Release Date is less than the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date, the Owner, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date and (ii) the cash value of the Released Policy as of the Policy Release Date. VIII. RIGHTS UPON TERMINATION OF THE AGREEMENT OTHER THAN DEATH OF THE EMPLOYEE. Upon the termination of this Agreement as provided in paragraphs C. through G. of Article V, the Owner may repay to the Corporation, within sixty (60) days of such termination, an amount equal to the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement. Upon receipt of such payment from the Owner, the Corporation shall release the Collateral Assignments by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Policies to the Owner. If the Owner does not repay the Corporation the amount calculated above within the prescribed time period, the Owner shall be required to transfer ownership of the Policies to the Corporation. Except as provided below, if the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement is less than the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement, the Owner, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. If the Corporation terminates the Agreement pursuant to paragraph G. of Article V of this Agreement, the Owner and Employee are not obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. IX. NAMED FIDUCIARY. The Corporation is hereby designated as the "Named Fiduciary" under this Agreement. The Named Fiduciary shall have authority to control and manage the operation and administration of this Agreement, and it shall be responsible for establishing and carrying out a funding policy and method consistent with the objectives of this Agreement. The Corporation shall, in its discretion, make all determinations concerning rights to benefits under this Agreement. Should the Owner or other beneficiary of the Policies fail to receive benefits to which the Owner (or other beneficiary) believes he is entitled, a claim may be filed. Any claim for a benefit due in connection with this Agreement shall be filed by the Owner or other beneficiary (the "Claimant") by written communication made by the Claimant or the Claimant's authorized representative to the Named Fiduciary. All such claims and notices shall be made in the manner provided in Article XIII of this Agreement. If a claim for a benefit is wholly or partially denied, a written notice of the decision shall be furnished to the Claimant by the Named Fiduciary or its designee within a reasonable period of time after receipt of the claim by the Named Fiduciary. The notice shall include the following information: a. The specific reason or reasons for the denial; b. Specific reference to the pertinent provisions of this Agreement and/or the Policy upon which the denial is based; c. A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and d. An explanation of all claim review procedures available under this Agreement. For purposes of the immediately preceding paragraph, a period of time shall be deemed to be unreasonable if it exceeds 90 days after receipt of the claim by the Named Fiduciary, unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Named Fiduciary expects to render the final decision. In order that a Claimant may appeal a denial of claim, a Claimant or his duly authorized representative may request a review by written application to the Named Fiduciary or his designee not later than 60 days after receipt by the Claimant of written notification of denial of a claim and may submit issues and comments in writing. A decision on review of a denied claim shall be made not later than 60 days after the Named Fiduciary's receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered within a reasonable period of time, but not later than 120 days after receipt of a request for review. The decision on review shall be in writing and shall include the specific reason(s) for the decision and the specific reference(s) to the pertinent provisions of this Agreement and/or the Policies on which the decision is based. Notwithstanding anything contained in this Article IX to the contrary, any claim for a death benefit under an insurance policy listed on Schedule A attached hereto shall be filed with the Insurer by the Claimant or his authorized representative on the form or forms prescribed for such purpose by the Insurer. The Insurer shall be responsible for determining whether a death claim shall or shall not be paid, either in whole or in part, in accordance with the terms of the insurance contract purchased on the life of the Employee. X. AMENDMENT AND ASSIGNMENT. The Corporation may, in its sole discretion, alter, amend or modify (including the addition of any extra Policy provisions) this Agreement at any time by a written instrument authorized by the Corporation, or its designee, and delivered to the Owner and Employee. The Corporation or the Owner may, subject to the limitations of Article IV, assign its rights and obligations under this Agreement, provided, however, that any assignment will be subject to the terms of this Agreement. XI. SEVERABILITY. The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement. XII. POSSESSION OF POLICIES. The Corporation will maintain possession of the Policies during the term of this Agreement. XIII. NOTICE. All notices, claims, requests and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed by certified or registered mail to the Corporation as follows: Attention: Corporate Director, Compensation and Benefits, Reynolds Metals Company, 6601 W. Broad Street, P.O. Box 27003, Richmond, Virginia 23261-7003 or to the Owner and Employee at their last known addresses or at such addresses as any party shall designate to the other parties in writing. XIV. GOVERNING LAW. This Agreement sets forth the entire agreement of the parties hereto, and any and all prior agreements, to the extent inconsistent herewith, are hereby superseded. This Agreement will be governed by the laws of the Commonwealth of Virginia. XV. INTERPRETATION. Where appropriate in this Agreement, words used in the singular will include the plural and words used in the masculine will include the feminine. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. Reynolds Metals Company By: ______________________________ Title:____________________________ __________________________________ _________________________, Owner __________________________________ _________________________, Employee LIST OF SCHEDULES A. Schedule of the Policies LIST OF EXHIBITS 1. Copies of Insurance Policies 2. Assignments of Life Insurance Death Benefit as Collateral SCHEDULE A The following life insurance policies are subject to that certain Split Dollar Life Insurance Agreement dated as of__________ __, 1995, among Reynolds Metals Company, ________________, Owner and ___________________. Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: 0199558.01 EX-10 7 EXHIBIT 10.38 SPLIT DOLLAR LIFE INSURANCE AGREEMENT [Third Party Owner, Employee Pays Premiums] This SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement") is entered into as of this ____ day of __________, 1995, by and between REYNOLDS METALS COMPANY, a Delaware corporation (the "Corporation"); _____________, (the "Owner"); and __________________ (the "Employee"). RECITALS In recognition of the services of the Employee to the Corporation, the Corporation has determined that its best interests would be served by entering into this Split Dollar Life Insurance Agreement with the Owner, whereby the Corporation will assist the Owner in maintaining certain life insurance on the Employee's life, subject to the condition that the Corporation is to be repaid for any amounts which the Corporation may contribute toward the payment of any premiums due on such policy. In furtherance of the purposes of this Agreement, the Owner will own a policy or policies of life insurance (collectively the "Policies" and individually the "Policy") issued by Northwestern Mutual Life Insurance Company (the "Insurer") on the Employee's life. The Owner's ownership of the Policies shall be subject to the terms and conditions contained in this Agreement. AGREEMENT Now, therefore, the Corporation, the Owner and the Employee agree as follows: I. DEATH BENEFIT. The Owner shall acquire, with the Corporation's assistance, an insurance policy with a death benefit ("Owner's Death Benefit") in an amount equal to two times the Employee's "Annual Earnings." Annual Earnings is defined as the Employee's current annual base salary plus any amount awarded to the Employee under a cash incentive plan in the previous calendar year, or such other definition of Annual Earnings as may be in effect from time to time under the Corporation's Group Term Life Insurance Plan for Salaried Employees. The Owner's Death Benefit will be adjusted annually to reflect any increase in the Employee's Annual Earnings. The Owner's Death Benefit will increase if the Employee's Annual Earnings increase. Except as otherwise provided in this Agreement, the Owner's Death Benefit will not decrease if the Employee's Annual Earnings decrease. The Owner's Death Benefit shall be reduced as of each Policy Release Date, as defined in Article VII of this Agreement, by that amount equal to the difference between (i) the total insurance death proceeds of the Released Policy, as defined in Article VII of this Agreement, as of the Policy Release Date inclusive of any amounts borrowed against the Released Policy by the Owner, and (ii) the total premiums advanced by the Corporation with respect to the Released Policy. When the Employee reaches age sixty-five, the Owner's Death Benefit shall decrease by one percent (the "Reduction Amount") of the Owner's Death Benefit in effect at that time. The Owner's Death Benefit will continue to decrease by the Reduction Amount each month for the next succeeding forty-nine months. During the fifty month period in which the Owner's Death Benefit is being reduced by the Reduction Amount, if the Owner's Death Benefit is also reduced due to a Released Policy pursuant to Article VII of this Agreement, the Reduction Amount shall be an amount equal to the previous Reduction Amount multiplied by a fraction. The numerator of the fraction shall equal the reduction in the Owner's Death Benefit due to the Released Policy, and the denominator of the fraction shall equal the Owner's Death Benefit prior to such reduction in the Owner's Death Benefit. If the Employee retires prior to the Employee's sixty-fifth birthday, the Owner's Death Benefit shall increase each year by five percent of the previous year's Owner's Death Benefit. This annual five percent increase shall continue until the Employee reaches age sixty-five. As the Owner's Death Benefit increases, temporary coverage for such increase in the Owner's Death Benefit may be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees until an additional Policy is obtained under this Agreement. The Employee may be required to apply and qualify for additional coverage that may arise due to increases in the Owner's Death Benefit. If the Employee does not receive satisfactory underwriting, any increases in the Owner's Death Benefit will be provided for under the Corporation's Group Term Life Insurance Plan for Salaried Employees. Any part of the Owner's Death Benefit paid under the Corporation's Group Term Life Insurance Plan for Salaried Employees will be paid to the beneficiary designated under that plan in accordance with its terms and conditions. II. RIGHTS IN THE POLICY. All insurance policies on the life of the Employee that are subject to this Agreement shall be identified and made part of this Agreement by their inclusion on the attached Schedule A. Other insurance policies on the life of the Employee may be made subject to the terms of this Agreement by amending the description in Schedule A to include such policies. The Owner is the owner of the Policies. The Policies are subject to the terms of this Agreement. The Owner may exercise all ownership rights granted to the owner by the terms of the Policies, including without limitation, the right to assign rights and interests in the Policies, the right to change the beneficiary of the Policies and the right to exercise any and all settlement options applicable to the Policies. With written permission from the Corporation, the Owner may borrow against the cash value of the Policies up to the difference between (i) the cash value of the Policies and (ii) the total amount of the premiums advanced by the Corporation. III. PAYMENT OF PREMIUMS. The Corporation will pay the entire annual premium due on the Policies (after taking into account any dividends) and will be reimbursed by the Employee for the Owner's portion of the annual premium. The Employee is responsible for that portion of the annual premium which is equal to the lesser of (i) the amount of the entire economic benefit that would be taxable to the Owner but for such payment, or (ii) the entire annual premium due on the Policies (the "Owner's Portion"). The amount of the economic benefit to the Owner shall be calculated using the lower of the P.S. 58 rates or the Insurer's term rates in accordance with Rev. Ruls. 64-328, 1964-2 C.B. 11, and 66-110, 1966-1 C.B. 12, or their successors, as in effect on the effective date of this Agreement. The Corporation's portion of the annual premium is equal to the entire annual premium less the Owner's Portion (the "Corporation's Portion"). The Employee hereby consents to the Corporation making monthly or semi-monthly payroll deductions of the Owner's Portion of the premium from the Employee's salary. In no case shall the Corporation be required to advance the Owner, under this Article III, an amount in excess of $10,000.00. IV. COLLATERAL ASSIGNMENT. All sums advanced by the Corporation to pay the Corporation's Portion of the annual premiums shall be repayable to the Corporation as herein provided, notwithstanding termination of this Agreement. The Owner shall assign the Policies to the Corporation as security for such advances by executing an Assignment of Life Insurance Policy as Collateral (the "Collateral Assignment") for each separate Policy. Subject to the terms of the Collateral Assignment, the Corporation shall not possess any incidents of ownership in the Policies and shall not be entitled to exercise any rights, privileges or benefits of ownership in the Policies. The Owner shall possess all incidents of ownership in the Policies. V. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the occurrence of any of the following events: A. Performance of its terms, following the death of the Employee; B. Upon the Policy Release Date of the last Policy to be released from this Agreement pursuant to Article VII; C. The termination of the Employee's employment with the Corporation for reasons other than total disability (as defined under the Corporation's Long Term Disability Plan for Salaried Employees, or any successor plan) or retirement (defined as termination of employment at a time when the Employee is entitled to an immediate benefit under the Corporation's New Retirement Program for Salaried Employees, or any successor plan); D. Upon the failure of the Employee to pay on a timely basis the Owner's Portion of the premiums; E. Receivership or dissolution of the Corporation; F. Delivery to the Corporation of a written instrument of termination signed by the Owner; or G. Delivery to the Owner of a written instrument of termination authorized by the Corporation's Board of Directors. VI. RIGHTS TO THE PROCEEDS AT DEATH. So long as this Agreement is in effect, the beneficiary provisions of the Policies shall provide that the death proceeds due under the Policies shall be distributed to the following persons in the following order: 1) the Corporation shall receive an amount equal to the total premiums advanced by the Corporation (excluding amounts already reimbursed to the Corporation by the Owner); 2) after the Corporation has received all of the premiums it advanced as provided above, the Owner's designated beneficiary shall receive the remaining death proceeds, but in no event shall the amount paid to the designated beneficiary hereunder exceed an amount equal to the Owner's Death Benefit; and 3) the Corporation shall receive the remaining death proceeds, if any. VII. POLICY RELEASE. Each separate Policy shall no longer be subject to the terms of this Agreement upon the later of (i) the Policy's anniversary date following the Employee's sixty-fifth birthday, or (ii) the expiration of fifteen policy years commencing on the effective date of the Policy (the "Policy Release Date"). At this time, the Owner may repay to the Corporation, within sixty (60) days of such Policy Release Date, an amount equal to the total premiums advanced by the Corporation with respect to that Policy (the "Released Policy"). Also at this time, the Owner's Death Benefit will be reduced as provided in Article I of this Agreement. Upon receipt of such payment from the Owner, the Corporation shall release the Collateral Assignment securing the Released Policy by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Released Policy to the Owner. If the Owner does not repay the Corporation the amount calculated above within the prescribed time period, the Owner shall be required to transfer ownership of the Released Policy to the Corporation, and the Owner's Death Benefit will be reduced as provided in Article I of this Agreement. If the cash value of the Released Policy as of the Policy Release Date is less than the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date, the Owner, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation with respect to the Released Policy as of the Policy Release Date and (ii) the cash value of the Released Policy as of the Policy Release Date. VIII. RIGHTS UPON TERMINATION OF THE AGREEMENT OTHER THAN DEATH OF THE EMPLOYEE. Upon the termination of this Agreement as provided in paragraphs C. through G. of Article V, the Owner may repay to the Corporation, within sixty (60) days of such termination, an amount equal to the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement. Upon receipt of such payment from the Owner, the Corporation shall release the Collateral Assignments by the execution and delivery of an appropriate instrument(s) of release and shall deliver the Policies to the Owner. If the Owner does not repay the Corporation the amount calculated above within the prescribed time period, the Owner shall be required to transfer ownership of the Policies to the Corporation. Except as provided below, if the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement is less than the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement, the Owner, and otherwise the Employee, is obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. If the Corporation terminates the Agreement pursuant to paragraph G. of Article V of this Agreement, the Owner and Employee are not obligated to reimburse the Corporation for the difference between (i) the total premiums advanced by the Corporation (excluding premiums already reimbursed to the Corporation by the Owner) as of the date of the termination of the Agreement and (ii) the cash value of the Policies (as may be enhanced by any cash value enhancement rider in effect) as of the date of the termination of the Agreement. IX. NAMED FIDUCIARY. The Corporation is hereby designated as the "Named Fiduciary" under this Agreement. The Named Fiduciary shall have authority to control and manage the operation and administration of this Agreement, and it shall be responsible for establishing and carrying out a funding policy and method consistent with the objectives of this Agreement. The Corporation shall, in its discretion, make all determinations concerning rights to benefits under this Agreement. Should the Owner or other beneficiary of the Policies fail to receive benefits to which the Owner (or other beneficiary) believes he is entitled, a claim may be filed. Any claim for a benefit due in connection with this Agreement shall be filed by the Owner or other beneficiary (the "Claimant") by written communication made by the Claimant or the Claimant's authorized representative to the Named Fiduciary. All such claims and notices shall be made in the manner provided in Article XIII of this Agreement. If a claim for a benefit is wholly or partially denied, a written notice of the decision shall be furnished to the Claimant by the Named Fiduciary or its designee within a reasonable period of time after receipt of the claim by the Named Fiduciary. The notice shall include the following information: a. The specific reason or reasons for the denial; b. Specific reference to the pertinent provisions of this Agreement and/or the Policy upon which the denial is based; c. A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and d. An explanation of all claim review procedures available under this Agreement. For purposes of the immediately preceding paragraph, a period of time shall be deemed to be unreasonable if it exceeds 90 days after receipt of the claim by the Named Fiduciary, unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Named Fiduciary expects to render the final decision. In order that a Claimant may appeal a denial of claim, a Claimant or his duly authorized representative may request a review by written application to the Named Fiduciary or his designee not later than 60 days after receipt by the Claimant of written notification of denial of a claim and may submit issues and comments in writing. A decision on review of a denied claim shall be made not later than 60 days after the Named Fiduciary's receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered within a reasonable period of time, but not later than 120 days after receipt of a request for review. The decision on review shall be in writing and shall include the specific reason(s) for the decision and the specific reference(s) to the pertinent provisions of this Agreement and/or the Policies on which the decision is based. Notwithstanding anything contained in this Article IX to the contrary, any claim for a death benefit under an insurance policy listed on Schedule A attached hereto shall be filed with the Insurer by the Claimant or his authorized representative on the form or forms prescribed for such purpose by the Insurer. The Insurer shall be responsible for determining whether a death claim shall or shall not be paid, either in whole or in part, in accordance with the terms of the insurance contract purchased on the life of the Employee. X. AMENDMENT AND ASSIGNMENT. The Corporation may, in its sole discretion, alter, amend or modify (including the addition of any extra Policy provisions) this Agreement at any time by a written instrument authorized by the Corporation, or its designee, and delivered to the Owner and Employee. The Corporation or the Owner may, subject to the limitations of Article IV, assign its rights and obligations under this Agreement, provided, however, that any assignment will be subject to the terms of this Agreement. XI. SEVERABILITY. The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement. XII. POSSESSION OF POLICIES. The Corporation will maintain possession of the Policies during the term of this Agreement. XIII. NOTICE. All notices, claims, requests and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed by certified or registered mail to the Corporation as follows: Attention: Corporate Director, Compensation and Benefits, Reynolds Metals Company, 6601 W. Broad Street, P.O. Box 27003, Richmond, Virginia 23261-7003 or to the Owner and Employee at their last known addresses or at such addresses as any party shall designate to the other parties in writing. XIV. GOVERNING LAW. This Agreement sets forth the entire agreement of the parties hereto, and any and all prior agreements, to the extent inconsistent herewith, are hereby superseded. This Agreement will be governed by the laws of the Commonwealth of Virginia. XV. INTERPRETATION. Where appropriate in this Agreement, words used in the singular will include the plural and words used in the masculine will include the feminine. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. Reynolds Metals Company By: ______________________________ Title:____________________________ __________________________________ _________________________, Owner __________________________________ _________________________, Employee LIST OF SCHEDULES A. Schedule of the Policies LIST OF EXHIBITS 1. Copies of Insurance Policies 2. Assignments of Life Insurance Death Benefit as Collateral SCHEDULE A The following life insurance policies are subject to that certain Split Dollar Life Insurance Agreement dated as of__________ __, 1995, among Reynolds Metals Company, ________________, Owner and___________________. Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: Insurer: Northwestern Mutual Life Insurance Company Insured: Policy Number: Face Amount: Date of Issue: 0199846.01 EX-11 8 EXHIBIT 11 REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In millions, except per share data) EARNINGS PER SHARE In the second quarter and six months of 1995, earnings per share equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the assumed conversion of the Company's preferred stock ("PRIDES"). For the purpose of this computation, the conversion rates of common stock for each share of PRIDES were based on the average market value of the Company's common stock during the period. In the second quarter and six months of 1994, earnings per share equals net income, minus PRIDES dividends, divided by the weighted-average number of common shares outstanding during the period. Common share equivalents relating to the PRIDES were not included in the second quarter or six months of 1994 since their effect would have been anti-dilutive.
QUARTERS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 _______________________ ________________________ 1995 1994 1995 1994 _______________________ ________________________ Weighted-average shares outstanding: Common shares 62,926,000 61,971,000 62,573,000 61,466,000 Common share equivalents 10,518,000 - 10,388,000 - _______________________ ________________________ Total 73,444,000 61,971,000 72,961,000 61,466,000 ======================= ======================== Net income (loss) $111 $12 $193 $(9) Less preferred stock dividends - 9 - 16 _______________________ ________________________ $111 $3 $193 $(25) ======================= ======================== Earnings per share $1.51 $0.05 $2.64 $(0.41) ======================= ======================== Conversion rate 0.96 - 0.94 - Average market value of common stock $49.41 - $50.03 -
EARNINGS PER SHARE (FULLY DILUTED): Earnings per share (fully diluted) equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the maximum potential issuance of common shares upon conversion of PRIDES, which is one share of common for each share of PRIDES. This computation was made for presentation purposes only since its effect was not material in 1995 and was anti-dilutive in 1994. The difference between the number of common share equivalents for the six months ended June 30, 1995 and 1994 is due to the PRIDES having been issued on January 25, 1994.
QUARTERS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 _________________________ ________________________ 1995 1994 1995 1994 _________________________ ________________________ Weighted-average shares outstanding: Common shares 62,926,000 61,971,000 62,573,000 61,466,000 Common share equivalents 11,000,000 11,000,000 11,000,000 9,533,000 ________________________ ________________________ Total 73,926,000 72,971,000 73,573,000 70,999,000 ======================== ======================== Net income (loss) $111 $12 $193 $(9) ======================== ======================== Earnings per share (fully diluted) $1.50 $0.16 $2.62 $(0.13) ======================== ========================
EX-27 9
5 This schedule contains summary financial information extracted from the Reynolds Metals Company Condensed Consolidated Balance Sheet (Unaudited) for June 30, 1995 and Consolidated Statement of Income (Unaudited) for the Six Months ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 1000000 6-MOS DEC-31-1995 JUN-30-1995 41 71 1178 21 1042 2381 6471 3326 7617 1428 1868 918 0 505 1063 7617 3515 3535 2952 2952 220 0 87 276 83 193 0 0 0 193 2.64 0 This amount represents total receivables, since trade receivables are not broken out separately at interim dates, in accordance with S-X 10-01(2).
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