-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AaSgWAsIMEsNme12nmaiRx3IYHQb9RZYj0Us718hj5QYyAhD2UuRLoLHsZb7JYh3 Y9sKlNvzoCEmJu4ErJbHhw== 0000083604-96-000007.txt : 19960307 0000083604-96-000007.hdr.sgml : 19960307 ACCESSION NUMBER: 0000083604-96-000007 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960306 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-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-01430 FILM NUMBER: 96531805 BUSINESS ADDRESS: STREET 1: 6601 W BROAD ST STREET 2: PO BOX 27003 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8042812000 10-K405 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 Commission File Number 1-1430 REYNOLDS METALS COMPANY A Delaware Corporation (IRS Employer Identification No. 54-0355135) 6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003 Telephone: (804) 281-2000 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on Which Registered - ------------------- ----------------------- Common Stock, no par value New York Stock Exchange Chicago Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Chicago Stock Exchange 7% PRIDES(SM), Convertible Preferred Stock New York Stock Exchange Chicago Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. __X__ As of February 20, 1996: (a) the aggregate market value of the voting stock held by nonaffiliates of the Registrant was approximately $2.58 billion*. (b) the Registrant had 63,604,494 shares of Common Stock outstanding and entitled to vote. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on April 17, 1996 - Part III _____________________ * For this purpose, "nonaffiliates" are deemed to be persons other than directors, officers and persons owning beneficially more than five percent of the voting stock. The amount reported includes the market value of 8,594,400 shares of 7% PRIDES, Convertible Preferred Stock, each entitled to 4/5 of a vote. NOTE In accordance with the Securities and Exchange Commission's requirements, we will furnish copies of the exhibits listed below upon payment of a fee of 10 cents per page. Please remit the proper amount with your request to: Secretary Reynolds Metals Company P.O. Box 27003 Richmond, Virginia 23261-7003 Exhibits have the following number of pages: EXHIBIT 3.1 71 EXHIBIT 10.12 12 EXHIBIT 3.2 16 EXHIBIT 10.13 13 EXHIBIT 4.1 71 EXHIBIT 10.14 2 EXHIBIT 4.2 16 EXHIBIT 10.15 1 EXHIBIT 4.3 165 EXHIBIT 10.16 1 EXHIBIT 4.4 6 EXHIBIT 10.17 4 EXHIBIT 4.5 74 EXHIBIT 10.18 3 EXHIBIT 4.6 2 EXHIBIT 10.19 3 EXHIBIT 4.7 2 EXHIBIT 10.20 3 EXHIBIT 4.8 2 EXHIBIT 10.21 3 EXHIBIT 4.9 2 EXHIBIT 10.22 2 EXHIBIT 4.10 10 EXHIBIT 10.23 1 EXHIBIT 4.11 14 EXHIBIT 10.24 10 EXHIBIT 4.12 9 EXHIBIT 10.25 10 EXHIBIT 4.13 36 EXHIBIT 10.26 13 EXHIBIT 4.14 24 EXHIBIT 10.27 6 EXHIBIT 4.15 18 EXHIBIT 10.28 2 EXHIBIT 4.16 24 EXHIBIT 10.29 2 EXHIBIT 4.17 89 EXHIBIT 10.30 1 EXHIBIT 4.18 7 EXHIBIT 10.31 3 EXHIBIT 4.19 12 EXHIBIT 10.32 3 EXHIBIT 10.1 21 EXHIBIT 10.33 2 EXHIBIT 10.2 16 EXHIBIT 10.34 10 EXHIBIT 10.3 19 EXHIBIT 10.35 10 EXHIBIT 10.4 7 EXHIBIT 10.36 10 EXHIBIT 10.5 2 EXHIBIT 10.37 10 EXHIBIT 10.6 7 EXHIBIT 10.38 10 EXHIBIT 10.7 6 EXHIBIT 23 1 EXHIBIT 10.8 10 EXHIBIT 24 31 EXHIBIT 10.9 14 EXHIBIT 27 1 EXHIBIT 10.10 7 EXHIBIT 10.11 7 TABLE OF CONTENTS PART I ITEM PAGE 1. BUSINESS................................................... 1 GENERAL................................................. 1 COMPETITION............................................. 5 Principal Competitors................................ 5 Industry Conditions.................................. 5 RAW MATERIALS........................................... 5 Bauxite, Alumina and Related Materials............... 5 Australia......................................... 6 Brazil............................................ 6 Guinea............................................ 6 Guyana............................................ 6 Jamaica........................................... 6 ALUMINUM PRODUCTION..................................... 7 FABRICATING OPERATIONS.................................. 8 ENERGY.................................................. 10 ENVIRONMENTAL COMPLIANCE................................ 10 RESEARCH AND DEVELOPMENT................................ 12 EMPLOYEES............................................... 12 2. PROPERTIES................................................. 15 3. LEGAL PROCEEDINGS.......................................... 17 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........ 18 4A. EXECUTIVE OFFICERS OF THE REGISTRANT....................... 19 PART II 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........................................ 21 6. SELECTED FINANCIAL DATA.................................... 22 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................ 23 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................ 33 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE..................... 54 PART III 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT......... 54 11. EXECUTIVE COMPENSATION..................................... 54 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................................. 54 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............. 54 PART IV 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K................................................ 55 PART I Item 1. BUSINESS Reynolds Metals Company (the "Registrant") was incorporated in 1928 under the laws of the State of Delaware. As used herein, "Reynolds" and "Company" each means the Registrant and its consolidated subsidiaries unless otherwise indicated. GENERAL Reynolds is a leading global aluminum and packaging company. Reynolds serves global markets as a supplier and recycler of aluminum and other products, with its core business being as a vertically integrated producer of a wide variety of value-added aluminum products. Reynolds produces alumina, carbon products and primary and reclaimed aluminum, principally to supply the needs of its fabricating operations. These fabricating operations produce aluminum foil, sheet, plate, beverage cans, extruded products (including heat exchanger tubing, drive shafts, bumpers and window systems), flexible packaging and wheels, among other items. Reynolds also produces a broad range of plastic products, including film, bags, containers and lids, for consumer products, foodservice and packaging uses. The Company markets an extensive line of consumer products under the Reynolds brand name, including the well-known Reynolds Wrap aluminum foil. Reynolds' largest market for its products is the packaging and containers market, which includes consumer products. The Company also is engaged in the distribution of aluminum and stainless steel and other non-aluminum industrial products to a variety of markets. Reynolds operates a one-of-a-kind facility that converts spent potliner from Reynolds' and other producers' North American aluminum smelting operations into an environmentally safe material with potential for recycling. To describe more fully the nature of its operations, Reynolds has separated its vertically integrated operations into two areas -- (1) Finished Products and Other Sales and (2) Production and Processing. Finished Products and Other Sales includes the manufacture and distribution of various finished aluminum products, such as beverage cans, containers, flexible packaging products, foodservice and household foils (including Reynolds Wrap), laminated and printed foil and aluminum building products and the distribution of aluminum and stainless steel and other non-aluminum industrial products. Finished Products and Other Sales also includes the manufacture and sale of plastic bags and food wraps (for example, Reynolds Plastic Wrap, Reynolds Crystal Color Plastic Wrap, Reynolds Oven Bags and Presto disposer bags), plastic lidding and container products, plastic film packaging, Reynolds Freezer Paper, Reynolds Baker's Choice baking cups, Reynolds Cut-Rite wax paper and wax paper sandwich bags, composite and non-aluminum building products, and printing cylinders and machinery. Production and Processing includes the refining of bauxite into alumina, calcination of petroleum coke and production of prebaked carbon anodes, all of which are vertically integrated with aluminum production and processing plants. These plants produce and sell primary and reclaimed aluminum and a wide range of semifinished aluminum mill products, including flat rolled products, extruded and drawn products, cast products and other aluminum products. Examples of flat rolled products include aluminum can sheet and machined plate. Examples of extruded and drawn products include heat exchanger tubing, drive shafts and bumpers. Examples of cast products include aluminum wheels. Production and Processing also includes the treatment of spent potliner and the sale of non-aluminum products, technology and various licensing, engineering and other services related to the production and processing of aluminum. In March, 1995, Reynolds completed the sale of its wholly owned subsidiary, Reynolds Australian Gold Operations, Ltd. ("RAGOL") to Sons of Gwalia Ltd. and Camelot Resources N.L., both of Australia. RAGOL held Reynolds' principal gold mining assets remaining after Reynolds' 1994 sale of Reynolds Australia Metals, Ltd., which held a 40% interest in the Boddington Gold Mine in Western Australia. The Company had been a gold producer through its operations in Western Australia since 1986. Reynolds acquired Alcan Aluminum Corporation's laminated foil plant in Louisville, Kentucky in June, 1995. The plant laminates aluminum foil onto paper and primarily serves the flexible packaging needs of the tobacco and pharmaceutical industries. Reynolds is operating the plant as part of its Flexible Packaging Division. Also in June, 1995, Reynolds acquired Wilson Engraving Company, Inc., which operates manufacturing plants in Dallas, Texas and West Monroe, Louisiana. Wilson Engraving Company, Inc. prepares film and manufactures printing plates and is being operated as an affiliate of Southern Graphic Systems, Inc., Reynolds' wholly owned manufacturer of printing cylinders and engravings for the rotogravure, flexographic and lithographic printing industries. In October, 1995, Reynolds acquired an additional 24.95% interest in the Becancour, Quebec, Canada, primary aluminum production plant from Societe Generale de financement du Quebec, an agency of the Government of Quebec. The acquisition increased Reynolds' interest in the Becancour joint venture to 50%. At current production levels, the acquisition provides Reynolds an additional 93,000 metric tons of the joint venture's primary aluminum annual output for a total of 186,000 metric tons, and increases Reynolds' worldwide primary aluminum production capacity to approximately 1.09 million metric tons per year. Reynolds acquired the flexible packaging manufacturing operations of Hargro Flexible Packaging Corp. in Boyertown, Pennsylvania in December, 1995. The operations produce flexographic printed film and film laminations, primarily for the healthcare, confectionery and snack industries, and are being managed as part of Reynolds' Flexible Packaging Division. In another December, 1995 acquisition, Reynolds purchased the Canadian Cut-Rite brand from Scott Paper Company, and other wax paper brands from Scott Paper Company's Canadian affiliate, Scott Paper Limited. The acquisition enables Reynolds, through its Reynolds Aluminum Company of Canada, Ltd. subsidiary, to market Cut-Rite wax paper throughout Canada. Reynolds acquired Scott Paper Company's Cut-Rite trademark rights except for Canada in 1986. Reynolds closed its aluminum beverage can manufacturing plant in Fulton, New York in December, 1995. Because of productivity gains throughout Reynolds' can system, a geographic shift in customer demand and slower overall growth in U.S. demand for aluminum cans, the Fulton plant's 1-billion-can capacity exceeded the needs of Reynolds' customers. Information on shipments and net sales by classes of similar products is shown in Table 1. Net sales are in millions of dollars; shipments are in thousands of metric tons.
TABLE 1 Net Sales and Shipments 1995 1994 1993 - ------------------------------------------------------------------- Net Net Net Shipments Sales Shipments Sales Shipments Sales --------- ------- --------- ------- - --------- ------ Finished Products and Other Sales - --------------------------------- Packaging and containers Aluminum 368 $1,871 359 $1,583 268 $1,262 Nonaluminum 556 529 511 Other aluminum 163 580 151 449 124 359 Other nonaluminum 528 479 396 - ------------------------------------------------------------------- 531 3,535 510 3,040 392 2,528 - ------------------------------------------------------------------- Production and Processing - ------------------------- Primary aluminum 346 684 277 440 309 380 Sheet and plate 409 1,350 418 1,003 452 1,063 Extrusions 200 765 211 627 183 526 Other aluminum 179 494 157 391 158 352 Other nonaluminum 385 378 420 - ------------------------------------------------------------------- 1,134 3,678 1,063 2,839 1,102 2,741 - ------------------------------------------------------------------- Total 1,665 $7,213 1,573 $5,879 1,494 $5,269 =================================================================== Average realized price per pound: - --------------------------------- Fabricated aluminum products $1.84 $1.48 $1.45 Primary aluminum 0.90 0.72 0.56
Financial information relating to Reynolds' operations and identifiable assets by major operating and geographic areas is presented in Note L to the consolidated financial statements in Item 8 of this report. Reynolds' products generally are sold to producers and distributors of industrial and consumer products in various markets. Information on sales of products by principal geographic and business markets is shown in Tables 2 and 3.
TABLE 2 Principal Geographic Markets Approximate Percentage of Sales ------------------------ 1995 1994 1993 ---- ---- ---- United States 77% 77% 75% Canada 7 6 6 Other (Principally Europe) 16 17 19 ---- ---- ---- Total 100% 100% 100%
TABLE 3 Principal Business Markets Approximate Percentage of Sales -------------------------- 1995 1994 1993 ---- ---- ---- Packaging and Containers 44% 45% 45% Automotive and Transportation 13 12 11 Distributors and Fabricators 13 13 13 Building and Construction 13 13 12 Other 17 17 19 ---- ---- ---- Total 100% 100% 100%
COMPETITION Principal Competitors - --------------------- Reynolds' principal competitors in the sale in North America of products derived from primary aluminum are ten other domestic companies, a Canadian company and other foreign producers. Reynolds and many other companies produce reclaimed aluminum. In the sale of semifinished and finished products, Reynolds competes with (i) other producers of primary and reclaimed aluminum, which are also engaged in fabrication, (ii) other fabricators of aluminum and other products, (iii) other producers of plastic products and (iv) metals service center companies engaged in the distribution of aluminum and other products. Reynolds' principal competitors in Europe are seven major multinational producers and a number of smaller European producers of aluminum semifabricated products. In the aluminum beverage can business, Reynolds competes worldwide with four major producers and a number of smaller ones. Aluminum and related products compete with various products, including those made of iron, steel, copper, zinc, tin, titanium, lead, glass, wood, plastic, magnesium and paper. Plastic products compete with products made of glass, aluminum, steel, paper, wood and ceramics, among others. Competition is based upon price, quality and service. Industry Conditions - ------------------- A worldwide oversupply of aluminum, caused by high exports beginning in 1990 from the Commonwealth of Independent States ("CIS") (mostly from Russia), start-up of substantial new capacity in the industry and economic weakness, severely depressed the price of aluminum on world commodity markets in the early 1990's, affecting the aluminum industry and the Company. Multilateral government negotiations were commenced in late 1993 to develop strategies to integrate the CIS aluminum industries into the world market. A Memorandum of Understanding ("MOU") relating to primary aluminum supply-demand conditions and international trade in aluminum was agreed to by the governments of six major aluminum producing countries in March, 1994, and has since expired. See the discussion in Note L to the consolidated financial statements in Item 8, and under "Results of Operations - Aluminum Industry" and "Outlook and Strategy" in Item 7, of this report with respect to current industry conditions. RAW MATERIALS Bauxite, Alumina and Related Materials - -------------------------------------- Bauxite, the principal raw material used in the production of aluminum, is refined into alumina, which is then reduced by an electrolytic process into primary aluminum. Reynolds' bauxite requirements and a portion of its alumina requirements are met from sources outside the United States. Reynolds has long-term arrangements to obtain bauxite at negotiated prices from sources in Australia, Brazil, Guinea and Guyana, and is finalizing such an arrangement as to Jamaican bauxite. Reynolds also has a long-term arrangement with the U.S. government under which Reynolds has agreed to purchase at a negotiated price an aggregate of approximately 1,000,000 long dry tons of Jamaican bauxite stored next to Reynolds' Sherwin alumina plant near Corpus Christi, Texas, for the period 1996 through 1998. Reynolds refines bauxite into alumina at its Sherwin alumina plant. Reynolds also acquires alumina from two joint ventures in which it has interests, one located in Western Australia, known as the Worsley Joint Venture ("Worsley"), and the other located in Stade, Germany, known as Aluminium Oxid Stade ("Stade"). See Table 4 under this Item and the discussion of Worsley under "Australia". Production and purchases of bauxite and production of alumina are adjusted from time to time in response to changes in demand for primary aluminum and other factors. Reynolds had reduced production at its Sherwin plant in connection with the curtailment of operations at its U.S. primary aluminum production plants. See "Aluminum Production". Although the curtailment of such operations continues, the idle alumina capacity at the Sherwin plant was restarted during 1995 due to strong demand in the alumina market. Australia Worsley has a rated capacity of 1,700,000 metric tons of alumina per year (expandable to 3,200,000 metric tons per year). Worsley has proven bauxite reserves sufficient to operate the alumina plant at its rated capacity (taking into account future expansions to increase rated capacity to up to 3,200,000 metric tons per year) for at least the next 35 years. The joint venture has no specified termination date. Reynolds has a long-term purchase arrangement under which it may purchase from a third party an aggregate of approximately 18,800,000 dry metric tons of Australian bauxite through 2021. Of this amount, Reynolds has agreed to purchase 1,000,000 dry metric tons in 1996. Brazil Reynolds and various other companies are participants in the Trombetas bauxite mining project in Brazil. Reynolds has a 5% equity interest in the project and has agreed to purchase an aggregate of approximately 1,600,000 dry metric tons of Brazilian bauxite from the project for the period 1996 through 1999. Reynolds also maintains an interest in other, undeveloped bauxite deposits in Brazil. Guinea Reynolds owns a 6% interest in Halco (Mining), Inc. ("Halco"). Halco owns 51% and the Guinean government owns 49% of Compagnie des Bauxites de Guinee ("CBG"), which has the exclusive right through 2038 to develop and mine bauxite in a 10,000 square-mile area in northwestern Guinea. Reynolds has a bauxite purchase contract with CBG which will provide Reynolds with an aggregate of approximately 8,250,000 dry metric tons of Guinean bauxite for the period 1996 through 2011. Guyana Reynolds and the Guyanese government each owns a 50% interest in a bauxite mining project in the Berbice region of Guyana. Reynolds has a bauxite purchase contract running through 1998 under which it will purchase approximately 1,200,000 dry metric tons of Guyanese bauxite from the project in 1996. Quantities to be purchased in 1997 and 1998 are to be agreed upon at the beginning of each contract year. Jamaica Reynolds is finalizing a purchase arrangement under which it will agree to purchase from a third party an aggregate of up to 9,000,000 dry metric tons of Jamaican bauxite for the period 1996 through 2000. Reynolds' present sources of bauxite and alumina are more than adequate to meet the forecasted requirements of its primary aluminum production operations for the foreseeable future. To utilize excess alumina capacity, Reynolds enters into third-party sales arrangements. Reynolds also enters into arrangements to sell bauxite in excess of its needs to third parties. Other materials used in making aluminum are either purchased from others or supplied from Reynolds' carbon products plants in Baton Rouge and Lake Charles, Louisiana. ALUMINUM PRODUCTION Reynolds owns and operates three primary aluminum production plants in the United States and one located at Baie Comeau, Quebec, Canada. Reynolds is also entitled to a share of the primary aluminum produced at three joint ventures in which it participates, one located in Quebec, Canada, known as the Becancour joint venture ("Becancour"), one located in Hamburg, Germany, known as Hamburger Aluminium-Werk GmbH ("Hamburg"), and the third in Ghana, Africa, known as Volta Aluminium Company Limited ("Ghana"). See Table 5 (and related notes) under this Item for information on these primary aluminum production plants. Reynolds also buys primary aluminum on the open market. In October, 1995, Reynolds acquired an additional 24.95% interest in Becancour from Societe Generale de financement du Quebec, an agency of the Government of Quebec, increasing Reynolds' interest in Becancour to 50%. At current production levels, the acquisition provides Reynolds an additional 93,000 metric tons of Becancour's annual primary aluminum output for a total of 186,000 metric tons, and increases its worldwide primary aluminum capacity to 1,094,000 metric tons per year. Production at the primary aluminum plants listed in Table 5 can vary due to a number of factors, including changes in worldwide supply and demand. Due to the worldwide aluminum supply-demand imbalance, Reynolds has idled a total of 209,000 metric tons, or 19%, of its 1,094,000 metric tons of primary aluminum capacity. Reynolds temporarily shut down 88,000 metric tons of primary aluminum production capacity at its Massena, New York (41,000 metric tons) and Longview, Washington (47,000 metric tons) plants, effective in the fourth quarter of 1993, and its Troutdale, Oregon plant, with a capacity of 121,000 metric tons, has been idle since 1991. At December 31, 1995, the U.S. plants listed in Table 5 were operating collectively at a rate of 53% of capacity; Ghana (in which Reynolds has a 10% equity interest), where production has been curtailed by drought (see "Energy") since September, 1994, was operating at 70% of capacity; and all other plants listed in Table 5 were operating at full capacity. See Table 6 under this Item. In order to balance its alumina supply system, Reynolds had temporarily reduced production at its Sherwin alumina plant in Texas in connection with the curtailments. The idle alumina capacity at the Sherwin plant was restarted during 1995. See "Raw Materials - Bauxite, Alumina and Related Materials". Reynolds has an 8% equity interest in C.V.G. Aluminio del Caroni, S.A., which produces primary aluminum in Venezuela. Reynolds has agreed to acquire a 10% equity interest in the Aluminum Smelter Company of Nigeria (ALSCON), with the Nigerian government and private interests holding the remaining equity. As part of the arrangement, Reynolds will purchase at market-related prices 140,000 metric tons of primary aluminum annually from a 180,000 metric ton smelter being constructed by ALSCON in Nigeria. Reynolds produces reclaimed aluminum from aluminum scrap at its facilities located in Bellwood, Virginia and Sheffield, Alabama, and at a facility in which it has a 99.8% equity interest located in Isernia, Italy. See Table 6 under this Item. Scrap for the U.S. facilities is obtained through Reynolds' nationwide recycling network and other scrap purchases and from Reynolds' manufacturing operations. Scrap for the Italian facility is obtained through scrap purchases. In 1995, Reynolds obtained approximately 276,100 metric tons of recycled aluminum from its recycling network and other scrap purchases. FABRICATING OPERATIONS Reynolds' semifinished and finished aluminum products and non-aluminum products are produced at numerous domestic and foreign plants wholly or partly owned by Reynolds. These plants are included in Table 7 under Item 2 of this report. The annual capacity of these plants depends upon the variety and type of products manufactured. In line with its strategic emphasis on growth opportunities in its core downstream fabricating operations serving the aluminum beverage can, packaging, consumer products, transportation, and building and construction markets, Reynolds has over the past three years continued to upgrade and modernize its beverage can, flexible packaging, foil, plastics, extrusion, sheet and plate manufacturing facilities, particularly facilities for production of such value-added products as can sheet, packaging, household foil and components for the transportation industry. Specific actions the Company has taken include the following: Aluminum Beverage Cans - ---------------------- - -- developed new types of, and applications for, aluminum cans; - -- acquired in 1993 Miller Brewing Company's aluminum can and end manufacturing operations, increasing its U.S. can-making capacity by almost 50%; - -- commercialized in 1993 Spin Flow can necking technology (developed by Reynolds in conjunction with Ball Corporation) for forming the neck of aluminum cans at high speeds; - -- acquired in 1994 Bev-Pak, Inc. and its aluminum beverage can and end manufacturing facility in Monticello, Indiana, increasing the Company's U.S. aluminum can- and end-making capacity by approximately 15 and 20 percent, respectively; - -- completed in 1994 a 70% expansion of its Tampa can plant; - -- completed in 1995 an expansion of a joint venture facility to produce aluminum cans and announced plans for the construction of a joint venture can end plant, both in Brazil; - -- in 1995 completed construction of, and began operations at, two joint venture can plants, one in Brazil and one in Chile; and - -- continued in 1995 its participation in the construction of joint venture can plants in Brazil (the third in that country), Argentina (which has begun production) and Saudi Arabia. Packaging - --------- - -- increased PVC film capacity by 20% in 1992-1993 to serve the growing Reynolon shrink film as well as consumer and foodservice film markets; - -- acquired in 1994 assets to expand its printing cylinder and engraving business and, in 1995, acquired Wilson Engraving Company Inc., strengthening the Company's ability to meet the needs of flexographic and lithographic printers and extending the Company's geographic reach by adding plants in Louisiana and Texas; - -- began in 1995 an expansion at its Grottoes, Virginia plastics manufacturing plant that will increase capacity by approximately 20%; - -- began in 1995 a major, multi-year capital program to build a new aluminum foil rolling mill at its Louisville, Kentucky plant that will increase annual plant capacity by about 25%; - -- acquired in 1995 a laminated foil plant in Louisville, Kentucky, strengthening the Company's ability to serve the flexible packaging needs of the tobacco and pharmaceutical industries; and - -- acquired in 1995 the flexible packaging manufacturing operations of Hargro Flexible Packaging Corp. in Boyertown, Pennsylvania, establishing a major position in flexographic printing and increasing the Company's capacity to produce printed film and film laminations. Consumer Products - ----------------- - -- substantially increased marketing support behind its Reynolds Wrap and Reynolds Plastic Wrap brands; - -- introduced in 1993 new products, including a complete line of Diamond plastic wraps and bags for selected international markets; - -- acquired in 1995 the Canadian Cut-Rite brand from Scott Paper Company, and other wax paper brands from Scott Paper Company's Canadian affiliate, Scott Paper Limited, enabling the Company to market Cut-Rite wax paper throughout Canada, a key market for Reynolds' consumer products; - -- introduced in 1995 a 50-foot Heavy Duty line extension of its Reynolds Wrap brand, two printed plastic wrap products and several new Reynolds Baker's Choice baking cup products; and - -- in 1995 expanded its consumer products business in Latin America, the Middle East and the Far East. Transportation - -------------- - -- restructured in 1994 its McCook plant in Illinois, exiting common alloy sheet products and emphasizing plate and automotive sheet; - -- began production in 1994 of aluminum automotive extruded components at a new fabricating plant in Auburn, Indiana and began an expansion of the plant in 1995; - -- commercialized in 1995, for aerospace applications, aluminum-lithium plate products manufactured at its McCook plant in Illinois and aluminum-lithium extrusions manufactured by its Extrusion Division; and - -- began manufacturing in 1995 aluminum wheels at a facility in Beloit, Wisconsin, which it purchased in 1994 and modified and equipped for that purpose. Building and Construction - ------------------------- - -- increased its investment in manufacturing equipment and facilities for composite, vinyl and plastic building products. Other - ----- - -- acquired in 1994 the metals distribution business of Prime Metals, Inc., allowing the Company to broaden the geographic processing and service capabilities of its Reynolds Aluminum Supply Company metals distribution business; and - -- purchased in 1995 the aluminum extrusion operations of AMAG Austria's wholly owned subsidiary, Wexal International Ltd., in Ireland. ENERGY Reynolds consumes substantial amounts of energy in refining bauxite into alumina and in reducing alumina to aluminum. Alumina is produced by a process requiring high temperatures at various stages. These temperatures are achieved by burning natural gas or coal at the alumina plants. Natural gas and coal are purchased under long- and short-term contracts. See Table 4 under this Item. Primary aluminum is produced from alumina by an electrolytic process requiring large amounts of electric power. Electricity required for Reynolds' primary aluminum production plants generally is purchased under long-term contracts. See Table 5 under this Item. Reynolds expects generally to meet its energy requirements for primary aluminum production for the foreseeable future under long-term contracts. Under these contracts, however, Reynolds may experience shortages of interruptible power from time to time at its Washington, Oregon, New York and Ghana reduction plants. Production at Ghana is dependent on hydroelectric power and has from time to time been curtailed by drought. 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. The Company and BPA have entered into a new five-year contract that would supersede the existing power contract for the period October, 1996 - September, 2001 (when the existing contract was due to expire). The new contract establishes a fixed rate, which is 16% less than rates now in effect, that would apply for the entire term of the new contract. This contract is, however, subject to review and approval both in BPA's currently pending rate case and in a subsequent review process conducted by the Federal Energy Regulatory Commission. Further, as part of a BPA rate decision, the contract is subject to appeal in the courts by third parties. Should the new contract be rejected in any of these processes, the Company could continue service under the existing contract, renegotiate with BPA, or contract for competitive power supplied by third parties. ENVIRONMENTAL COMPLIANCE Reynolds has spent and will spend substantial capital and operating amounts relating to ongoing compliance with environmental laws. The area of environmental management, including environmental controls, continues to be in a state of scientific, technological and regulatory evolution. Consequently, it is not possible for Reynolds to predict accurately the total expenditures necessary to meet all future environmental requirements. Reynolds expects, however, to add or modify environmental control facilities at a number of its worldwide locations to meet existing and certain anticipated regulatory requirements, including regulations to be implemented under the Clean Air Act Amendments of 1990 (the "Clean Air Act"). Based on information currently available, Reynolds estimates that compliance with the Clean Air Act's hazardous air pollutant standards would require in excess of $250 million of capital expenditures (including a portion of the expenditures at Reynolds' Massena plant referred to below), primarily at Reynolds' U.S. primary aluminum production plants. The ultimate effect of the Clean Air Act on such plants and Reynolds' other operations (and the actual amount of any such capital expenditures) will depend on how the Clean Air Act is interpreted and implemented pursuant to regulations that are currently being developed and on such additional factors as the evolution of environmental control technologies and the economic viability of such operations at the time. Based on an August, 1995 memorandum of understanding with the State of New York to resolve environmental issues at its Massena, New York primary aluminum production plant, Reynolds has begun a five-year capital spending program of an estimated $150 million to $200 million to modernize the Massena plant and significantly reduce air emissions from the plant. Pursuant to the memorandum of understanding, Reynolds is accelerating certain expenditures believed necessary to achieve compliance with the Clean Air Act's Maximum Achievable Control Technology standards, although the U.S. Environmental Protection Agency (the "EPA") is still developing such standards. (See the related discussion in Item 3 of this report.) Capital expenditures for equipment designed for environmental control purposes were approximately $55 million in 1993, $34 million in 1994 and $39 million in 1995. The portion of such amounts expended in the United States was $43 million in 1993, $15 million in 1994 and $18 million in 1995. Expenditures in 1993 and 1994 included $19 million and $1 million, respectively, for construction of Reynolds' facility in Arkansas that converts spent potliner from Reynolds' and other producers' aluminum smelting operations into an environmentally safe material with potential for recycling. Reynolds estimates that annual capital expenditures for environmental control facilities will be approximately $53 million in 1996, $98 million in 1997 and $82 million in 1998, the majority of such expenditures being associated with the capital spending program referred to above at Reynolds' Massena plant. Future capital expenditures for environmental control facilities cannot be predicted with accuracy for the reasons cited above; however, it may be expected that environmental control standards will become increasingly stringent and that the expenditures necessary to comply with them could increase substantially. Reynolds has been identified as a potentially responsible party ("PRP") and is involved in remedial investigations and remedial actions under the Comprehensive Environmental Response, Compensation and Liability Act ("Superfund") and similar state laws regarding the past disposal of wastes at approximately 40 sites in the United States. Such statutes may impose joint and several liability for the costs of such remedial investigations and actions on the entities that arranged for disposal of the wastes, the waste transporters that selected the disposal sites and the owners and operators of such sites; responsible parties (or any one of them) may be required to bear all of such costs regardless of fault, legality of the original disposal or ownership of the disposal site. In addition, Reynolds is investigating possible environmental contamination, which may also require remedial action, at certain of its present and former United States manufacturing facilities, including contamination by polychlorinated biphenyls ("PCBs") at its Massena, New York primary aluminum production plant which requires remediation. In 1994, the EPA added Reynolds' Troutdale, Oregon primary aluminum production plant to the National Priorities List of Superfund sites; the Company is cooperating with the EPA and, under a September, 1995 consent order, is working with the EPA in investigating potential environmental contamination at the Troutdale site and to promote more efficient cleanup at the site. At most of the 40 sites referred to above where Reynolds has been identified as a PRP, it is one of many PRPs, and its share of the anticipated cleanup costs is expected to be small. With respect to certain other sites (not included in the foregoing number) where Reynolds has been identified as a PRP, Reynolds has either fully or substantially settled or resolved actions related to such sites at minimal cost or believes that it has no responsibility with regard to them. Reynolds has been notified that it may be a PRP at certain additional sites. Reynolds' policy is to accrue remediation costs when it is probable that remedial efforts will be required and the related costs can be reasonably estimated. On a quarterly basis, Reynolds evaluates the status of all sites, develops or revises estimates of costs to satisfy known remediation requirements and adjusts its accruals accordingly. At December 31, 1995, the accrual for known remediation requirements was $242 million. This amount reflects management's best estimate of Reynolds' ultimate liability for such costs. Potential insurance recoveries are uncertain and therefore have not been considered. As a result of such factors as the developing nature of administrative standards promulgated under Superfund and other environmental laws; the unavailability of information regarding the condition of potential sites; the lack of standards and information for use in the apportionment of remedial responsibilities; the numerous choices and costs associated with diverse technologies that may be used in remedial actions at such sites; the availability of insurance coverage; the ability to recover indemnification or contribution from third parties; and the time periods over which eventual remediation may occur, estimated costs for future environmental compliance and remediation are necessarily imprecise. It is not possible to predict the amount or timing of future costs of environmental remediation which may subsequently be determined. Based on information currently available, it is management's opinion that such future costs are not likely to have a material adverse effect on Reynolds' competitive or financial position or its ongoing results of operations. However, such costs could be material to future quarterly or annual results of operations. See the discussion under "Environmental" in Item 7, and under Note J to the consolidated financial statements in Item 8, of this report regarding the Company's anticipated costs of environmental compliance. RESEARCH AND DEVELOPMENT Reynolds engages in a continuous program of basic and applied research and development. This program deals with new and improved materials, products, processes and related environmental compliance technologies. It includes the development and expansion of products and markets which benefit from aluminum's light weight, strength, resistance to corrosion, ease of fabrication, high heat and electrical conductivity, recyclability and other properties. Materials and core competencies involving aluminum, ceramics, composites and various polymers and their processing, fabrication and applications are also included in the scope of Reynolds' research and development activity. Expenditures for Reynolds-sponsored research and development activities were approximately $36 million in 1993, $38 million in 1994 and $43 million in 1995. Reynolds owns numerous patents relating to its products and processes based predominantly upon its in-house research and development activities. The patents owned by Reynolds, or under which it is licensed, generally concern particular products or manufacturing techniques. Reynolds' business is not, however, materially dependent on patents. EMPLOYEES At December 31, 1995, Reynolds had approximately 29,800 employees. Labor contracts between Reynolds and the United Steelworkers of America and the Aluminum, Brick and Glass Workers International Union, respectively, entered into in 1993 will expire by their terms in May, 1996. The contracts involve approximately 7,000 employees.
TABLE 4 Alumina Plants and Energy Supply Rated Capacity(a) at Principal December 31, 1995 Energy Energy Contract Plant Metric Tons Purchased(b) Expiration Date - ----- ----------------- ------------ --------------- Corpus Christi, Texas 1,600,000(c) Natural Gas 1996(d) Worsley, Australia 952,000(e) Coal 2002 Stade, Germany 375,000(e) Natural Gas 2008
TABLE 5 Primary Aluminum Production Plants and Energy Supply Rated Capacity(a) at Principal December 31, 1995 Energy Energy Contract Plant Metric Tons Purchased(b) Expiration Date - ----- ----------------- ------------ --------------- Baie Comeau, Canada 400,000 Electricity 2011 and 2014 Longview, Washington 204,000(f) Electricity 2001 Massena, New York 123,000(f) Electricity 2013(g) Troutdale, Oregon 121,000(f) Electricity 2001 Becancour, Canada 186,000(h) Electricity 2014 Hamburg, Germany 40,000(h) Electricity 2000 Ghana, Africa 20,000(h) Electricity 1997(i)
TABLE 6 Aluminum Capacity and Production (Metric Tons) Primary Aluminum(j) Reclaimed Aluminum(k) ------------------------------- ------------------------- Rated Rated Year Capacity(a),(f) Production(f) Capacity(a) Production - ---- --------------- ------------- ----------- ---------- 1993 991,000 869,000 462,000 386,000 1994 998,000 792,000 491,000 409,000 1995 1,094,000 814,500 485,500 396,500
NOTES TO TABLES 4, 5, and 6. (a) Ratings are estimates at the end of the period based on designed capacity and normal operating efficiencies and do not necessarily represent maximum possible production. (b) See "Energy". (c) In order to balance its alumina supply system, Reynolds had reduced production at its Sherwin alumina plant near Corpus Christi, Texas in connection with the curtailment of operations at its U.S. primary aluminum plants. Although the curtailment of such operations continues, the idle alumina capacity at the Sherwin plant was restarted during 1995. See "Aluminum Production". (d) Approximately 50% of the plant's natural gas requirements is purchased under a one-year contract and the remainder is purchased under other short-term contracts. The base term of the one-year contract referred to above will conclude in October, 1996, but the contract will extend from month to month unless terminated by one of the parties. (e) Reynolds is entitled to 56% of the production of Worsley and 50% of the production of Stade. Capacity figures reflect Reynolds' share. (f) Reynolds curtailed 70,500 metric tons of production at its Troutdale primary aluminum plant in the third quarter of 1991 and the remainder of the plant's capacity in the fourth quarter of 1991. The Troutdale plant remains idle. Reynolds curtailed an aggregate of 88,000 metric tons of primary aluminum production capacity at its Massena (41,000 metric tons) and Longview (47,000 metric tons) plants effective in the fourth quarter of 1993. See "Aluminum Production". (g) The power contract terminates in 2013, subject to earlier termination by the supplier in 2003 if its federal license for a hydroelectric project is not renewed. (h) Reynolds is entitled to 50% of the production of Becancour, 33-1/3% of the production of Hamburg, and 10% of the production of Ghana. Capacity figures reflect Reynolds' share. Production at Ghana has been curtailed since September, 1994 by drought. See "Aluminum Production" and "Energy". At December 31, 1995, Ghana was operating at 70% of capacity. (i) The power contract provides for a 20-year extension at the option of the smelter owners. (j) Production is from Reynolds' primary aluminum production operations listed in Table 5. (k) Production through the second quarter of 1993 is from Reynolds' Bellwood, Virginia; Sheffield, Alabama; and Benton Harbor, Michigan reclamation facilities. Reynolds sold its Benton Harbor, Michigan facility in the second quarter of 1993. Production in 1994 and 1995 includes the Isernia, Italy reclamation facility, in which Reynolds has a 99.8% equity interest. Item 2. PROPERTIES For information on the location and general nature of Reynolds' principal domestic and foreign properties, see Item 1, BUSINESS. Table 7 lists as of February 15, 1996 Reynolds' wholly-owned domestic and foreign operations and shows the domestic and foreign locations of operations in which Reynolds has interests. Facilities that are under construction or for other reasons have not begun production are not listed. The properties listed are held in fee except as otherwise indicated. Properties held other than in fee are not, individually or in the aggregate, material to Reynolds' operations and the arrangements under which such properties are held are not expected to limit their use. Reynolds believes that its facilities are suitable and adequate for its operations. With the exception of the Longview, Massena, Troutdale and Ghana primary aluminum production plants, as explained above, there is no significant surplus or idle capacity at any of Reynolds' major manufacturing facilities. TABLE 7 Wholly-Owned Operations Manufacturing, Mining and Distribution Alumina: Recycling: Corpus Christi, Texas Recycling Plants and Centers (U.S.)(698)** Malakoff, Texas Calcined Coke: Reclamation: Baton Rouge, Louisiana Sheffield, Alabama (2) Lake Charles, Louisiana Bellwood, Virginia Carbon Anodes: Mill Products: Lake Charles, Louisiana Sheffield, Alabama McCook, Illinois Primary Aluminum: Bellwood, Virginia Massena, New York Cap-de-la-Madeleine, Troutdale, Oregon Quebec, Canada Longview, Washington Hamburg, Germany*** Baie Comeau, Quebec, Canada Latina, Italy Aluminum Beverage Cans: Spent Potliner Treatment: San Francisco, California Gum Springs, Arkansas Torrance, California Tampa, Florida Extruded Products: Moultrie, Georgia Auburn, Indiana Honolulu, Hawaii Louisville, Kentucky Monticello, Indiana (cans and ends) El Campo, Texas Kansas City, Missouri Ashland, Virginia* Middletown, New York Bellwood, Virginia Reidsville, North Carolina (cans and ends) Richmond Hill, Ontario, Canada Salisbury, North Carolina Ste. Therese, Quebec, Canada Fort Worth, Texas Nachrodt, Germany Houston, Texas Wexford, Ireland Seattle, Washington Harderwijk, Netherlands Milwaukee, Wisconsin Lelystad, Netherlands Rocklin, California (ends) Maracay, Venezuela Bristol, Virginia (ends) Guayama, Puerto Rico Powder and Paste: Printing Cylinders: Louisville, Kentucky Longmont, Colorado* Atlanta, Georgia* Electrical Rod: Clarksville, Indiana* Becancour, Quebec, Canada Louisville, Kentucky (2) Newport, Kentucky* West Monroe, Louisiana Foil Feed Stock: Battle Creek, Michigan* Hot Springs, Arkansas St. Louis, Missouri Fulton, New York* Packaging and Consumer Wilmington, North Carolina* Products: Exton, Pennsylvania* Beacon Falls, Connecticut Franklin, Tennessee* Louisville, Kentucky(2) Dallas, Texas Mt. Vernon, Kentucky Richmond, Virginia (2) Sparks, Nevada* Toronto, Ontario, Canada Boyertown, Pennsylvania(3)* Downingtown, Pennsylvania Lewiston, Utah Reynolds Aluminum Supply Bellwood, Virginia Company: Grottoes, Virginia Service Centers (U.S.)(27)** Richmond, Virginia Processing Centers (U.S.)(3)** South Boston, Virginia Appleton, Wisconsin (2) Little Chute, Wisconsin Research and Development Weyauwega, Wisconsin Rexdale, Ontario, Canada* Richmond, Virginia: Cap-de-la-Madeleine, Can Division Headquarters Quebec, Canada Corporate Research Latina, Italy and Development Central Laboratories Building and Construction Packaging Technology Products: Eastman, Georgia* Bourbon, Indiana Corpus Christi, Texas: Ashville, Ohio Alumina Technology Lynchburg, Virginia Weston, Ontario, Canada Merxheim, France* Sheffield, Alabama: Nachrodt, Germany Manufacturing Technology Dublin, Ireland* Laboratory Wexford, Ireland Harderwijk, Netherlands Lisburn, Northern Ireland* Service Centers (U.S.)(51)** Service Centers (Canada) (11)** Wheels: Beloit, Wisconsin Ferrara, Italy Can Machinery and Systems: Richmond, Virginia Other Operations In Which Reynolds Has Interests Argentina: Ghana: Aluminum cans, recycling Primary aluminum* Australia: Guinea: Bauxite, alumina Bauxite Belgium: Guyana: Building products, extrusions Bauxite* Brazil: India: Bauxite, aluminum cans Extrusions and ends, recycling, reclamation Italy: Canada: Reclamation Primary aluminum, electric power generation, aluminum Russia: wheels Foil Chile: Spain: Aluminum cans, recycling Mill products, extrusions, foil, packaging and consumer products, Colombia: printing cylinders Mill products, extrusions, foil Venezuela: Primary aluminum, mill products, Egypt: foil, aluminum cans and ends, Extrusions recycling, aluminum wheels Germany: Alumina, primary aluminum* ____________________________ * Leased. ** Recycling Plants and Centers - 689 leased. Building and Construction Products Service Centers - 60 leased. Reynolds Aluminum Supply Company Service Centers - 18 leased. Reynolds Aluminum Supply Company Processing Centers - 1 leased. *** Held under an installment purchase arrangement. The titles to Reynolds' various properties were not examined specifically for this report. Item 3. LEGAL PROCEEDINGS On June 10, 1988, the Atlantic States Legal Foundation ("Atlantic States") filed suit against the Registrant in the U.S. District Court for the Western District of New York (the "Court") under the "citizen suit" provision of the federal Clean Water Act. The State of New York intervened in the case on December 1, 1989. The suit involved the discharge of substances from the Registrant's Massena, New York primary aluminum production plant. An agreement of the parties to settle the suit for payments by the Registrant aggregating $515,000, resolving claims for penalties and other costs, was approved by the Court on May 12, 1992; however, the Court retained jurisdiction of the matter. In a letter dated April 12, 1993, Atlantic States informed the Registrant that it has withdrawn its waiver of enforcement, citing violations at the Massena plant of interim effluent limits contained in the settlement agreement and other effluent limit violations. Atlantic States has stated that it would be providing the Registrant a settlement offer concerning such violations, which the Registrant to date has not received. On November 9, 1993, counsel for the St. Regis Mohawk Tribe (the "Tribe") served the Registrant with a notice of intent to file a citizen suit for alleged violations of the federal Clean Air Act and certain New York state air emission standards at the Registrant's Massena, New York primary aluminum production plant. Subsequently, the State of New York alleged that the Registrant's emissions were causing a violation of certain state air emission standards. In October, 1994, based on an agreement in principle with the State to resolve environmental issues at the plant, the Registrant approved a five-year capital spending program of an estimated $150 million to $200 million to modernize the Massena plant and significantly reduce air emissions from the plant. In August, 1995, the Registrant and the State of New York formalized the agreement in principle in a memorandum of understanding, and the Registrant has begun the work included in the capital spending program. The Registrant is accelerating certain expenditures believed necessary to achieve compliance with the MACT standards, although the EPA is still developing such standards. The Registrant and the Tribe reached an agreement in November, 1995 to resolve issues relating to the Massena plant's air emissions and certain other environmental matters at the plant. Under the agreement, the Registrant will, in order to promote continued communication and to foster good will between the Tribe and the Registrant, complete the capital spending program referred to above, contribute $1.65 million to establish a perpetual scholarship fund for the Tribe, fund a $250,000 air sampling program to be developed by the Tribe and pay $100,000 for past and future legal fees and expenses. See the discussion of Clean Air Act compliance costs in Item 1 under the caption "Environmental Compliance". The Registrant received from the U.S. Department of Justice (i) on August 29, 1994, a civil investigative demand relating to production of primary aluminum and (ii) on March 30, 1995, a civil investigative demand relating to the pricing of aluminum can stock. The Registrant is cooperating with both inquiries and is confident that its conduct has been in compliance with U.S. antitrust laws. A private antitrust lawsuit styled Hammons v. Alcan Aluminum Corp. et al., seeking estimated damages of approximately $13 billion, was filed in the Superior Court of California for the County of Los Angeles on March 5, 1996 against the Registrant and other aluminum producers. The lawsuit alleges a conspiracy to reduce worldwide and U.S. aluminum production. The Registrant has made, and will make, its decisions regarding production levels independent- ly. As noted above, the Registrant is confident that its conduct has been in compliance with the antitrust laws. Various other suits and claims are pending against Reynolds. In the opinion of Reynolds' management, after consultation with counsel, disposition of these suits and claims and the actions referred to in the preceding paragraphs, either individually or in the aggregate, will not have a material adverse effect on Reynolds' competitive or financial position or its ongoing results of operations. No assurance can be given, however, that the disposition of one or more of such suits, claims or actions in a particular reporting period will not be material in relation to the reported results for such period. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of the Registrant's security holders during the fourth quarter of 1995. Item 4A. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the Registrant are as follows: Name Age* Positions Held During Past Five Years - ---- ---- ----------------------------------------- Richard G. Holder 64 Chairman of the Board and Chief Executive Officer since May 1992. President and Chief Operating Officer 1988-1992. Director since 1984. Randolph N. Reynolds** 54 Vice Chairman since January 1994. Executive Vice President, International 1990-1994. President, Reynolds International, Inc. ("RII"), a subsidiary of the Company, since November 1980, and Chief Executive Officer of RII since November 1981. Director since 1984. Jeremiah J. Sheehan 57 President and Chief Operating Officer since January 1994. Executive Vice President, Fabricated Products 1993-1994. Executive Vice President, Consumer and Packaging Products 1990-1993. Director since January 1994. Henry S. Savedge, Jr. 62 Executive Vice President and Chief Financial Officer since May 1992. Vice President, Finance 1990-1992. Director since 1992. J. Wilt Wagner 54 Executive Vice President, Raw Materials, Metals and Industrial Products since March 1993. Executive Vice President, Fabricated Industrial Products 1992-1993. Vice President, Mill Products Division 1990- 1992. James R. Aitken 61 Vice President since April 1994. Executive Vice President, RII since March 1993. Vice President, Europe of RII and President, Reynolds (Europe) Ltd., a subsidiary of RII, 1987-1993. Thomas P. Christino 56 Vice President, Flexible Packaging Division since November 1993. Flexible Packaging Division General Manager 1992-1993. Flexible Packaging Products National Sales and Marketing Manager 1987-1992. Donald T. Cowles 48 Vice President and Reynolds Aluminum Supply Company Division General Manager since August 1995. Executive Vice President, Human Resources and External Affairs 1993-1995. Vice President, General Counsel and Secretary 1989-1993. Eugene M. Desvernine 54 Vice President since April 1994. Executive Vice President, RII since March 1993. Vice President, Latin America of RII 1982-1993. Allen M. Earehart 53 Vice President, Controller since April 1994. Controller 1993-1994. Director, Corporate Accounting 1982-1993. E. Jack Gates 54 Vice President, Raw Materials and Carbon Products Division since April 1993. Raw Materials and Precious Metals Division General Manager 1993. Reduction Division General Manager 1990-1993. Rodney E. Hanneman 59 Vice President, Quality Assurance and Technology Operations since March 1985. Paul S. Hayden 53 Vice President, Recycling Division since April 1995. Recycling Division General Manager 1991-1995. Douglas M. Jerrold 45 Vice President, Tax Affairs since April 1990. D. Michael Jones 42 Vice President, General Counsel and Secretary since February 1993. Associate General Counsel and Assistant Secretary 1990-1993. John B. Kelzer 59 Vice President, Extrusion Division since April 1993. Extrusion Division General Manager 1990-1993. William E. Leahey, Jr. 46 Vice President, Can Division since April 1993. Can Division General Manager 1992- 1993. Can Division Sales and Marketing Director 1990-1992. John M. Lowrie 55 Vice President, Consumer Products Division since October 1988. F. Robert Newman 52 Vice President, Human Resources since October 1995. Corporate Director, Human Resources 1993-1995. Corporate Director, Industrial Relations 1992-1993. Director, Industrial Relations Operations 1986-1992. John M. Noonan 62 Vice President, Construction Products and Properties Divisions since January 1984. Paul Ratki 56 Vice President, Metals Division since April 1994. Reduction and Reclamation Division General Manager 1993-1994. Reduction and Reclamation Division Operations Manager 1991-1993. William G. Reynolds, Jr.** 56 Vice President, Government Relations and Public Affairs since 1980. John F. Rudin 50 Vice President, Chief Information Officer since August 1995. Vice President since April 1995. Reynolds Aluminum Supply Company Division General Manager 1989-1995. Julian H. Taylor 52 Vice President, Treasurer since April 1988. C. Stephen Thomas 56 Vice President, Mill Products Division since May 1992. Vice President, Can Division 1990-1992. Nicholas D. Triano 64 Vice President, Materials Management since April 1989. _______________ * As of February 17, 1996 ** Randolph N. Reynolds and William G. Reynolds, Jr. are brothers. PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Registrant's Common Stock is listed on the New York Stock Exchange and the Chicago Stock Exchange. At February 20, 1996, there were 9,666 holders of record of the Registrant's Common Stock. The high and low sales prices for shares of the Registrant's Common Stock as reported on the New York Stock Exchange Composite Transactions Tape and the dividends declared per share during the periods indicated are set forth below:
High Low Dividends ---- --- --------- 1995 First Quarter $ 56-1/2 $ 46-1/4 $.25 Second Quarter 52-3/8 46-3/4 .30 Third Quarter 64-3/4 51-5/8 .30 Fourth Quarter 58-5/8 48-1/2 .35 1994 First Quarter $ 54-5/8 $ 44-7/8 $.25 Second Quarter 50-5/8 40-3/8 .25 Third Quarter 58 47-1/4 .25 Fourth Quarter 59-3/8 44-3/4 .25
On February 16, 1996, the Board of Directors declared a dividend of $.35 per share of Common Stock, payable April 1, 1996 to stockholders of record on March 1, 1996. Item 6. SELECTED FINANCIAL DATA - ------------------------------------------------------------------------------
Consolidated Income Statement (In millions, except per share amounts) - ---------------------------------------------------------------------- 1995 1994 1993 1992 1991 - ------------------------------------------------------ Net sales $7,213 $5,879 $5,269 $5,593 $5,730 Equity, interest and other income 39 46 25 28 54 Gains on sales of assets - 88 - 36 - - ------------------------------------------------------ 7,252 6,013 5,294 5,657 5,784 - ------------------------------------------------------ Cost of products sold 5,772 4,996 4,657 4,762 4,760 Selling, administrative and general expenses 449 376 358 369 378 Provision for depreciation and amortization 311 295 287 284 265 Interest expense 172 156 159 167 161 Operational restructuring and asset revaluation costs - - 348 106 - Provision for estimated environmental costs - - - 164 - - ------------------------------------------------------ 6,704 5,823 5,809 5,852 5,564 - ------------------------------------------------------ Income (loss) before income taxes and cumulative effects of accounting changes 548 190 ( 515) ( 195) 220 Taxes on income (credit) 159 68 (193) (86) 66 - ------------------------------------------------------ Income (loss) before cumulative effects of accounting changes 389 122 ( 322) ( 109) 154 Cumulative effects of accounting changes (1) - - - (640) - - ------------------------------------------------------ Net income (loss) $ 389 $ 122 ($ 322) ($ 749) $ 154 ====================================================== Earnings per share Primary earnings (losses) $5.35 $1.42 $(5.38) $(12.56) $2.60 ====================================================== Cash dividends declared ====================================================== per common share $1.20 $1.00 $1.20 $1.80 $1.80 ====================================================== Other items: Total assets $7,740 $7,461 6,709 $6,897 $6,685 ====================================================== Long-term debt $1,853 $1,848 $1,990 $1,798 $1,854 ======================================================
[FN] (1) In 1992, the Company adopted FAS No. 106, requiring accrual accounting for postretirement benefits other than pensions, and FAS No. 109, which requires use of the liability method of determining deferred income taxes. Charges of $610 million (FAS No. 106) and $30 million (FAS No. 109) were recognized in 1992 for the cumulative effects of these accounting changes. The adoption of FAS No. 109 enabled the Company to fully recognize the deferred tax benefits associated with the adoption of FAS No. 106. [/FN] Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with the consolidated financial statements, related notes and other sections of this report. In the tables, dollars are in millions, except per share and per pound amounts, and shipments are in thousands of metric tons. A metric ton is equivalent to 2,205 pounds. - ------------------------------------------------------------------------------- RESULTS OF OPERATIONS The Company had a very successful year in 1995 with record shipments and revenues and the third-highest net income in the Company's history. These results reflect continued strength in overall global demand for aluminum products, improved prices and actions the Company has taken to improve operating performance such as acquisitions, divestitures, restructurings and cost reductions. The Company achieved these results despite weaker market conditions in the second half of the year and with approximately 20% of its primary aluminum capacity temporarily idled. The overall improved performance and optimistic long-term outlook for the aluminum business led the Company to increase the dividend on its common stock in 1995 at an annual rate of 40%.
1995 1994 1993 - ----------------------------------- Net income (loss) $389 $122 $(322) Net income (loss) includes special items: Gains on sales of assets - 57 - Operational restructuring and asset revaluation costs - - (227) Earnings (loss) per share $5.35 $1.42 $(5.38) Earnings (loss) per share includes special items: Gains on sales of assets - .92 - Operational restructuring and asset revaluation costs - - (3.80)
ALUMINUM INDUSTRY The aluminum industry turned in a strong performance in 1995, particularly in the first half of the year, due to improved aluminum supply/demand fundamentals. Prices for both primary and fabricated aluminum products improved from their recent depressed lows. Industry shipments increased in late 1994 and early 1995, largely as a result of hedge buying by end-users anticipating price increases. The hedge buying occurred primarily in the aluminum beverage can and distributor markets. This created a customer inventory buildup, which resulted in lower shipments to these markets during the second half of 1995 as excess inventories were starting to be reduced. Additionally, the soft landing of the U.S. and European economies that occurred in 1995 led to lower shipments to some markets, particularly construction and automotive. The inventory liquidation process and the economic soft landing led to lower primary aluminum prices in the latter part of 1995. SHIPMENTS AND NET SALES
1995 1994 1993 - --------------------------------------------------------- Net Net Net Shipments Sales Shipments Sales Shipments Sales --------- ----- --------- ----- - --------- ----- Finished Products and Other Sales - --------------------------------- Packaging and containers Aluminum 368 $1,871 359 $1,583 268 $1,262 Nonaluminum 556 529 511 Other aluminum 163 580 151 449 124 359 Other nonaluminum 528 479 396 - --------------------------------------------------------- 531 3,535 510 3,040 392 2,528 - --------------------------------------------------------- Production and Processing - ------------------------- Primary aluminum 346 684 277 440 309 380 Sheet and plate 409 1,350 418 1,003 452 1,063 Extrusions 200 765 211 627 183 526 Other aluminum 179 494 157 391 158 352 Other nonaluminum 385 378 420 - --------------------------------------------------------- 1,134 3,678 1,063 2,839 1,102 2,741 - --------------------------------------------------------- Total 1,665 $7,213 1,573 5,879 1,494 $5,269 ========================================================= Average realized price per pound: - -------------------------------- Fabricated aluminum products $1.84 $1.48 $1.45 Primary aluminum 0.90 0.72 0.56
Finished Products and Other Sales - --------------------------------- Aluminum packaging and container shipments increased in 1995 and 1994, principally due to additional aluminum beverage can and end shipments resulting primarily from acquisitions in late 1993 and mid-1994. The increases in other aluminum shipments in 1995 and 1994 resulted from the 1994 acquisition of a metals distribution company and strong demand in the distribution market in 1994. Production and Processing - ------------------------- Primary aluminum shipments fluctuate from year to year because of variations in internal requirements and changes in customer demand for value-added foundry ingot and billet. The acquisition of an additional interest in the Becancour, Quebec primary aluminum production facility contributed to the increase in 1995. The decrease in 1994 resulted from a decision to idle 88 thousand metric tons of primary aluminum capacity late in 1993 due to weak aluminum supply/demand fundamentals at that time. Shipments of sheet and plate were slightly lower in 1995 compared to 1994, as higher can stock shipments were offset by lower shipments of other sheet products. The increase in can stock shipments resulted from higher shipments to the growing operations of the Company's partially owned aluminum beverage can operations in Latin America. Shipments of other sheet products decreased due to the conversion of a portion of the Company's sheet business to tolling. The decline from 1993 to 1994 can be attributed to the restructuring of the Company's Illinois sheet and plate facility and lower can stock shipments caused by greater internal consumption by the Company's growing can manufacturing operations. Extrusion shipments were slightly lower in 1995 after increasing in 1994. The differences in shipping levels primarily reflect changes in demand for electrical rod that was impacted by customers adjusting inventory levels in 1995. Additionally, the Company's restructuring of extrusion operations in 1993, to focus on markets with the greatest potential, has resulted in reduced shipments of certain products in each of the past two years. The increase in shipments of other aluminum products in 1995 resulted from strong demand for aluminum wheels in the transportation market and for deoxidation products in the steel industry. Net Sales - --------- The increases in net sales resulted from higher shipments and improved aluminum prices in 1995 and from higher shipments in 1994. Average realized prices for fabricated aluminum products increased more than 20% in 1995 due to strong demand for these products. The increases in sales of nonaluminum products in 1995 and 1994 were due partially to higher sales of stainless steel (due in part to the 1994 acquisition of a metals distribution company). The increases also resulted from higher sales of alumina in 1995 and increased sales of vinyl building products and packaging products in 1994.
OPERATING PROFIT (LOSS) 1995 1994 1993 --------------------------------- Finished Products and Other Sales $232 $256 $146 Production and Processing 492 2 (188)
Operating profits in Finished Products and Other Sales and Production and Processing in 1995 and 1994 benefited from improved shipping volumes (except for Production and Processing in 1994), higher prices for aluminum products, increased levels of capacity utilization at aluminum fabricating operations and performance-improvement programs, including acquisitions, divestitures, restructurings and cost reductions. Operating profits in both years were adversely affected by higher costs for purchased materials and increases in selling, administrative and general expenses, which were generally the result of the higher level of business activity. Unused capacity at primary aluminum and alumina production facilities adversely affected operating results in all three years. The Company has temporarily curtailed U.S. primary aluminum production of 209,000 metric tons and had reduced production at its Texas alumina refinery. The alumina refinery returned to full production during 1995 due to strong demand in the alumina market. Restructuring actions for which charges were taken in 1993 and 1992 reduced 1995 and 1994 operating costs. Most significant was the restructuring of the Company's sheet and plate facility in Illinois, where the production of various common alloy aluminum sheet products was discontinued by mid-1994. The Company streamlined the plant to manufacture sheet and plate products for the automotive, aircraft and aerospace markets. Extrusion operations also were restructured in 1993 to increase competitiveness and focus on markets with the greatest growth potential. As a result, the Company discontinued production of irrigation tubing at a California facility, and a Kentucky operation was converted to manufacture products for the automotive industry. In 1995, the Company closed an aluminum beverage can manufacturing facility in New York. The facility's billion-can annual capacity was determined to be in excess of the Company's customer needs due to productivity gains throughout the Company's can system, a geographic shift in customer demand and slower overall growth in U.S. demand for aluminum beverage cans. The Company has sold the equipment at the facility and intends to sell the plant and property. In 1995, the Company recorded asset revaluation costs related to certain of its foreign investments, and costs related to the closing of the can facility, of $25 million. As a result of changes in estimated requirements for previously restructured operations, existing reserves of approximately the same amount were reversed during 1995. These actions did not have a material impact on revenues, operating results or financial position. GEOGRAPHIC AREA ANALYSIS The Company has operations in the U.S., Canada and other foreign areas, which include Europe, Latin America and Australia. Certain of these operations, especially in Latin America, consist of equity interests, whose sales are not included in the consolidated net sales of the Company. The Company participates in an unincorporated joint venture that mines bauxite and produces alumina in Australia. U.S. operations produce and sell a broad range of aluminum and nonaluminum products. U.S. sales and operating profits increased in 1995 and 1994 on the strength of higher shipments of certain products, especially cans and ends, and higher realized prices for aluminum products. Sales and operating profits from Canada and Europe increased in 1995 due to higher realized prices for aluminum products and in 1994 due to higher shipments. INTEREST EXPENSE Interest expense increased in 1995 due to higher rates and declined in 1994 due to lower amounts of debt outstanding. The Company uses interest rate swap agreements to manage its exposure to interest rate fluctuations after considering market conditions and levels of variable-rate and fixed-rate debt outstanding. These arrangements caused interest expense to be slightly higher in 1995 and slightly lower in 1994. The Company's strategy is to provide for lower interest expense during economic downturns, with the potential for higher interest cost during periods of economic growth. TAXES ON INCOME The Company pays U.S. federal and state taxes and foreign taxes based on the laws of the various jurisdictions in which it operates. The effective tax rates reflected in the income statement differ from the U.S. federal statutory rate principally because of foreign taxes, the effects of percentage depletion allowances and, in 1995, the effect of a non-recurring foreign tax benefit. A reconciliation of the effective rates is included in Note H to the consolidated financial statements. At December 31, 1995, the Company had recorded $902 million of deferred tax assets that relate primarily to its U.S. tax positions. The most significant portions of these assets relate to tax carryforward benefits and accrued costs for employee health care and environmental and restructuring costs. A major portion of these assets will be realized in the future through the reversal of temporary differences, principally depreciation. To the extent that these assets are not covered by reversals of depreciation, the remainder is expected to be realized through U.S. income earned in future periods. The Company has worldwide operations in many tax jurisdictions that generate deferred tax assets and/or liabilities. Deferred tax assets and liabilities have been netted by jurisdiction and this results in both a deferred tax asset and a deferred tax liability on the balance sheet. The Company has a strong history of sustainable earnings. However, even without considering projections of income, certain tax planning strategies, such as changing the method of valuing inventories from LIFO to FIFO and/or entering into sale-leaseback transactions, would generate sufficient taxable income to realize the portion of the deferred tax asset related to U.S. operations. Also, the majority of the U.S. tax carryforward benefits can be carried forward indefinitely. Based on its evaluation of these matters, the Company is confident that its deferred tax assets will be realized and is not aware of any events or uncertainties that could significantly affect its conclusions regarding realization. The Company reassesses the realization of deferred tax assets quarterly and, if necessary, adjusts its valuation allowance accordingly. ENVIRONMENTAL Annual capital expenditures for equipment designed for environmental control purposes averaged approximately $36 million over the last three years. Ongoing environmental operating costs for the same period averaged approximately $76 million per year. The Company estimates that operating expenditures for 1996 through 1998 will remain at approximately these same levels and estimates annual capital expenditures for environmental control facilities at approximately $53 million in 1996, $98 million in 1997 and $82 million in 1998. The majority of these expenditures are associated with the capital spending program referred to below at the Company's New York primary aluminum production plant. The Company's spending on environmental compliance will be influenced by future environmental regulations, including those issued and to be issued under the Clean Air Act Amendments of 1990. The Company has begun a five-year capital spending program of an estimated $150 million to $200 million at its primary aluminum production plant in New York. The project includes new air emissions controls and a phased modernization of the plant's production lines. The Company is accelerating certain expenditures believed necessary to achieve compliance with the Clean Air Act's Maximum Achievable Control Technology standards, although the U.S. Environmental Protection Agency (the "EPA") is still developing such standards. Based on current information, it is estimated that compliance with the Clean Air Act's hazardous air pollutant standards will require in excess of $250 million of capital expenditures (including a portion of the expenditures at the New York plant referred to above), principally at the Company's U.S. primary aluminum plants. The Company is involved in remedial investigations and actions at various locations, including EPA Superfund sites where the Company and, in most cases, others have been designated as potentially responsible parties. The Company accrues remediation costs when it establishes the probability that such efforts will be required and the costs can be reasonably estimated. The Company evaluates the status of all significant existing or potential environmental issues quarterly, develops or revises cost estimates to satisfy known remediation requirements, and adjusts the accrual accordingly. At December 31, 1995, the accrual was $242 million ($272 million at December 31, 1994) and reflects management's best estimate of the Company's ultimate liability for known remediation costs. In estimating anticipated costs, the Company considers the extent of its involvement at each site, joint and several liability provisions under applicable law, and the likelihood of obtaining contributions from other potentially responsible parties. Potential insurance recoveries are uncertain and therefore have not been considered. Based on information currently available, remediation expenditures relating to costs currently accrued are expected to be made over the next 15 to 20 years with the majority spent by the year 2000. Cash flows from operations are expected to provide most of the funds for capital, operating and remediation expenditures. Estimating future environmental compliance and remediation costs is imprecise due to the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of currently unknown remediation sites, and the allocation of costs among potentially responsible parties. Future costs are not expected to have a material adverse effect on the Company's competitive or financial position or ongoing operating results. However, future costs of environmental remediation requirements that may subsequently be determined could be material to future quarterly or annual results of operations. OTHER INFORMATION In 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company will adopt the statement in 1996. It is not expected to have a material impact on the Company's financial position or results of operations. Also in 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based Compensation. With respect to accounting for its stock options, as permitted under SFAS No. 123, the Company intends to retain the intrinsic value method currently used as prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. The Company will provide disclosures in accordance with SFAS No. 123 when the standard is adopted in 1996. 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. Rates for electricity charged by the Bonneville Power Administration ("BPA"), which serves the Company's Oregon and Washington primary aluminum production plants, have been settled through October 1996, with a 4% increase over the prior rate. The Company and BPA have entered into a 5-year contract that would supersede the existing power contract for the period October 1996 - September 2001 (when the existing contract was due to expire). The new contract establishes a fixed rate, which is 16% less than rates now in effect, that would apply for the entire term of the new contract. The contract is, however, subject to review and approval both in BPA's currently pending rate case and in a subsequent review process conducted by the Federal Energy Regulatory Commission. Further, as part of a BPA rate decision, the contract is subject to appeal in the courts by third parties. Should the new contract be rejected in any of these processes, the Company could continue service under the existing contract, renegotiate with BPA, or contract for competitive power supplied by third parties. LIQUIDITY AND CAPITAL RESOURCES WORKING CAPITAL Working capital totaled $647 million at the end of 1995 compared to $898 million at the end of 1994. The ratio of current assets to current liabilities was 1.5/1 at the end of 1995 compared to 1.6/1 at year-end 1994. The decrease in working capital was due to the use of cash and the proceeds from the maturities of investments in debt securities to fund a part of the requirements of investing activities. OPERATING ACTIVITIES Cash provided from operations in 1995, 1994 and 1993 amounted to $489 million, $493 million and $259 million, respectively. The Company used these funds for investing activities during this period. INVESTING ACTIVITIES Substantial investments have provided the Company with low-cost operations in most of its raw materials, industrial and finished products businesses. The Company is now focusing on strategic areas for expansion and on further quality and efficiency enhancements. The table below shows actual and projected capital expenditures in the following categories: operational (replacement equipment, environmental control projects, etc.), strategic (performance improvement and strategic investments), and acquisitions and investments.
Projected 1996 1995 1994 1993 ---- ---- ---- ---- Operational $230 $219 $151 $146 Strategic 195 189 107 138 Acquisitions and investments 65 437 146 117 -------------------------------------------- Total capital investments $490 $845 $404 $401 ============================================
In the Finished Products and Other Sales operating area, strategic projects and acquisitions and investments that have been completed in the past three years or that are underway include: the acquisition of can manufacturing facilities that increased the Company's U.S. can-making capacity by 70%; the expansion and modernization of other can manufacturing facilities; the participation as a joint-venture partner in the construction of can manufacturing facilities in Argentina, Brazil, Chile and Saudi Arabia; expansions at foil and plastic film facilities; and the acquisitions of a metals distribution business, a printing cylinder engraving company, a foil laminating plant, and a flexible packaging manufacturing operation. In the Production and Processing operating area, strategic projects and acquisitions and investments that have been completed in the past three years or that are underway include: the acquisition of an additional interest (6%) in an alumina refinery in Australia; the acquisition of an additional interest (24.95%) in the Becancour, Quebec primary aluminum production facility; the modernization of a primary aluminum production plant in New York; the construction of a plant in Arkansas that processes spent potliner into an environmentally acceptable material with potential for recycling; a quality improvement program at a can sheet operation in Alabama; the construction and expansion of a facility in Indiana to produce bumpers and other automotive components; and the modification and equipping of a purchased facility in Wisconsin to produce aluminum wheels. In addition to these major projects, capacity expansions, equipment upgrades and/or improvement programs have been completed or are currently underway at a number of other facilities. Capital investments for 1996 will include amounts for those projects now underway, the participation in a joint venture in China that produces foil and extrusions, and continuing operating requirements. Projected 1996 capital investments do not include amounts for acquisitions as no significant acquisitions are pending. The Company will, however, consider any opportunities that arise. A part of the Company's strategy is to sell non-core assets and redeploy the proceeds into strategic businesses. In early 1995, the Company sold its remaining gold mining assets in Australia. In 1994, the Company sold a can manufacturing facility in Austria, a subsidiary that held a 40% investment in an Australian gold mine, and timberland in the Pacific Northwest. FINANCING ACTIVITIES The Company believes its available financial resources, 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 December 31, 1995, $150 million of the Company's $1.65 billion shelf registration remained available for the issuance of debt securities. The Company also has a $500 million revolving credit facility. Following is a summary of significant financing activities over the past three years: 1993: - -- Issued $78 million of medium-term notes at an average rate of 7.5% that mature in 2004 to 2013 - -- Issued $285 million of 6-5/8% amortizing notes due between 1998 and 2002 - -- Borrowed $150 million under a bank credit agreement that requires a single repayment in 1998 and bears interest at a variable rate (6.4% at December 31, 1995) Proceeds from these activities were used for voluntary prepayment of $143 million of a term loan agreement, refinancing approximately $200 million of short-term obligations, scheduled payments on long-term obligations of approximately $100 million and for general corporate purposes. 1994: - -- Issued 11 million shares of 7% PRIDES(SM), Convertible Preferred Stock for $47.25 (stated value) per share, which generated $505 million of net proceeds - -- Voluntarily prepaid the remaining balance ($72 million) of a term loan agreement and repaid the balance ($50 million) of commercial paper outstanding The Company used proceeds from the PRIDES issue for capital investments in 1994 and 1995 and to repay obligations incurred in the fourth quarter of 1993 to acquire Miller Brewing Company's can manufacturing operations. FINANCING ACTIVITIES - continued 1995: - -- Amended the $500 million revolving credit facility arranged in 1994 to extend the term from 1999 to 2000 and lower the commitment fee on the unused portion of the facility from .20% to .125%. No amounts were outstanding under the facility at December 31, 1995 - -- Borrowed $22 million through the issuance of tax-exempt bonds that require a single repayment in 2025 and bear interest at a variable rate (4% at December 31, 1995) - -- Issued $72 million of medium-term notes, which bear interest at an average rate of 6% and mature in 1996 and 1997 - -- Increased the quarterly dividend on the Company's common stock by 10 cents to 35 cents per share, in view of the Company's improved performance and outlook for the future Proceeds from the tax-exempt bonds were used to finance a portion of the costs of acquiring, constructing and installing environmental control facilities at the Company's primary aluminum production plant in New York. Proceeds from the medium-term notes were supplemented with cash on hand and cash generated from operations to acquire an additional interest (24.95%) in the Becancour, Quebec primary aluminum production facility for approximately $390 million, plus associated working capital. In 1993, the Company filed a registration statement relating to the contribution, through December 31, 1995, of up to 3 million shares of common stock to its pension plans. The shares were contributed as follows (in millions):
Year Shares Value ---- ------ ----- 1993 .6 $28 1994 1.5 77 1995 .9 45 ---------------------------- 3.0 $150 ============================
OUTLOOK AND STRATEGY At the beginning of 1996, the liquidation of excess customer inventories continues and slower economic growth rates worldwide are expected to have an impact on market conditions, possibly through the first half. As the year progresses, market conditions are expected to improve based on the Company's projections of world economic growth of just over 3%, and world aluminum consumption growth of 3.5%-4%. After the inventory liquidation process ends, and barring a recession in any major world economy, the Company expects the improvement in aluminum industry supply/demand fundamentals to continue for the next several years. The Company's outlook for growth in aluminum consumption for the remainder of this decade is an average of 4% per year, compared to 1.5% in the 1980s, and 2% in the 1970s. The Company expects greater use of aluminum around the world in automobiles and other light vehicles; rapid growth of the aluminum beverage can market in Latin America, Asia, the Middle East, and other developing economies; and increased use of aluminum in the building and construction markets, particularly in developing countries. The Company's strategy is to continue improving its global competitive position as a vertically integrated producer of value-added aluminum products, with emphasis on growth opportunities in its fabricating operations serving the can, packaging, consumer products, transportation, and building and construction markets. To improve its competitiveness, the Company has undertaken intensive cost reduction and performance improvement programs that include work force reductions, permanent closures of higher-cost facilities, disposal of uneconomic and non-core assets, and operational and organizational restructuring. The Company's restructuring efforts and performance improvements of the past few years, along with improving economic conditions that are expected to create a strong demand for aluminum, should contribute significantly to the Company's operating results. Primary aluminum is an internationally traded commodity. The price of primary aluminum is subject to worldwide market forces of supply and demand. Prices can be volatile and fluctuations influence the Company's financial results. The world market is still recovering from a serious supply-demand imbalance that began in the early 1990s and there may be periods of marked short-term price volatility. The Company's strategy of being a vertically integrated producer of value-added aluminum products reduces its exposure to these fluctuations, but does not eliminate it. The Company manages its exposure to these fluctuations, after giving consideration to market conditions, sale and purchase transactions, overall business strategies and other factors that affect the Company's risk profile, with contractual arrangements including fixed-price sales contracts, fixed-price supply contracts, and forward, futures and option contracts. Through these activities, the Company balances its risk profile consistent with management's operational strategies. In addition to the aluminum price risk, the Company is exposed to general financial, political, economic and business risks in connection with its worldwide operations. The Company continues to evaluate and manage its operations in a manner to mitigate the effects from exposure to such risks. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (In millions, except per share amounts) =============================================================================== ================== Years ended December 31 1995 1994 1993 - ------------------------------------------------------------------------------- - ------------------ REVENUES Net sales $7,213 $5,879 $5,269 Equity, interest and other income 39 46 25 Gains on sales of assets - 88 - - ------------------------------------------------------------------------------- - ------------------ 7,252 6,013 5,294 - ------------------------------------------------------------------------------- - ------------------ COSTS AND EXPENSES Cost of products sold 5,772 4,996 4,657 Selling, administrative and general expenses 449 376 358 Provision for depreciation and amortization 311 295 287 Interest - principally on long-term obligations 172 156 159 Operational restructuring and asset revaluation costs - - 348 - ------------------------------------------------------------------------------- - ------------------ 6,704 5,823 5,809 - ------------------------------------------------------------------------------- - ------------------ EARNINGS Income (loss) before income taxes 548 190 ( 515) Taxes on income (credit) 159 68 (193) - ------------------------------------------------------------------------------- - ------------------ NET INCOME (LOSS) 389 122 ( 322) Preferred stock dividends 36 34 - - ------------------------------------------------------------------------------- - ------------------ NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS 353 88 ( 322) RETAINED EARNINGS Balance at beginning of year 980 954 1,348 Cash dividends on common stock 77 62 72 - ------------------------------------------------------------------------------- - ------------------ Retained earnings at end of year $1,256 $ 980 $ 954 =============================================================================== ================== EARNINGS PER SHARE Average shares outstanding 73 62 60 Net income (loss) $5.35 $1.42 $(5.38) =============================================================================== ================== CASH DIVIDENDS PER COMMON SHARE $1.20 $1.00 $1.20 =============================================================================== ================== See notes beginning on page 36. /TABLE
CONSOLIDATED BALANCE SHEET (In millions) =============================================================================== ================== December 31 1995 1994 - ------------------------------------------------------------------------------- - ------------------ ASSETS Current assets Cash $ 17 $ 26 Short-term investments (cash equivalents 1995 - $22, 1994 - $282) 22 408 Receivables Customers, less allowances of $20 (1994 - $19) 889 851 Other 154 111 - ------------------------------------------------------------------------------- - ------------------ Total receivables 1,043 962 Inventories 891 873 Prepaid expenses 41 53 - ------------------------------------------------------------------------------- - ------------------ Total current assets 2,014 2,322 Unincorporated joint ventures and associated companies 1,286 856 Property, plant and equipment - net 3,223 3,108 Deferred taxes 376 426 Other assets 841 749 - ------------------------------------------------------------------------------- - ------------------ Total assets $7,740 $7,461 =============================================================================== ================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Trade payables $ 527 $ 658 Accrued compensation and related amounts 252 263 Payables to unincorporated joint ventures and associated companies 102 84 Short-term borrowings 111 120 Long-term debt 101 18 Other liabilities 274 281 - ------------------------------------------------------------------------------- - ------------------ Total current liabilities 1,367 1,424 Long-term debt 1,853 1,848 Postretirement benefits 1,213 1,145 Environmental 178 236 Deferred taxes 236 183 Other liabilities 276 353 Stockholders' equity Preferred stock 505 505 Common stock 941 870 Retained earnings 1,256 980 Cumulative currency translation adjustments (22) (43) Pension liability adjustment (63) (40) - ------------------------------------------------------------------------------- - ------------------ Total stockholders' equity 2,617 2,272 Contingent liabilities and commitments (Notes I and J) - ------------------------------------------------------------------------------- - ------------------ Total liabilities and stockholders' equity $7,740 $7,461 =============================================================================== ================== See notes beginning on page 36.
CONSOLIDATED STATEMENT OF CASH FLOWS (In millions) =============================================================================== ================== Years ended December 31 1995 1994 1993 - ------------------------------------------------------------------------------- - ------------------ OPERATING ACTIVITIES Net income (loss) $389 $122 ($322) Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization 311 295 287 Gains on sales of assets - (88) - Deferred taxes 127 7 (161) Operational restructuring and asset revaluation costs - - 344 Other (76) 42 106 Changes in operating assets and liabilities net of effects from acquisitions and dispositions: Accounts payable, accrued and other liabilities (173) 272 50 Receivables (59) (173) (55) Inventories 17 (106) 70 Other (47) 122 (60) - ------------------------------------------------------------------------------- - ------------------ Net cash provided by operating activities 489 493 259 INVESTING ACTIVITIES Capital investments Operational (219) (151) (146) Strategic (189) (107) (138) Acquisitions and investments (437) (146) (117) Purchases of debt securities - (139) - Maturities of investments in debt securities 125 14 - Proceeds from sales of assets 28 162 36 Other (48) (71) 60 - ------------------------------------------------------------------------------- - ------------------ Net cash used in investing activities ( 740) ( 438) ( 305) FINANCING ACTIVITIES Proceeds from long-term debt 106 - 545 Proceeds from preferred stock issue - 505 - Reduction of long-term debt and other financing liabilities (22) (165) (469) Decrease in short-term borrowings (18) (37) (20) Cash dividends paid (106) (71) (72) Other 22 2 1 - ------------------------------------------------------------------------------- - ------------------ Net cash provided by (used in) financing activities ( 18) 234 ( 15) CASH AND CASH EQUIVALENTS Net increase (decrease) ( 269) 289 ( 61) At beginning of year 308 19 80 - ------------------------------------------------------------------------------- - ------------------ At end of year $ 39 $ 308 $ 19 =============================================================================== ================== See notes beginning on page 36.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------ (In the tables, dollars are in millions, except share amounts. Certain amounts have been reclassified to conform to the 1995 presentation.) - ------------------------------------------------------------------------------- NOTE A - ACCOUNTING POLICIES - ---------------------------- General - ------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Principles of Consolidation - --------------------------- The accounts of the Company and its majority-owned subsidiaries are included in the consolidated financial statements after eliminating intercompany transactions, profits and losses. The investments in unincorporated joint ventures, which are production facilities without marketing or sales activities, are accounted for on an investment cost basis adjusted for the Company's share of the non-cash production charges of the operation. Investments in associated (20% to 50% owned) companies are carried at cost, adjusted for the Company's equity in their undistributed net income. Revenue Recognition - ------------------- Revenues are recognized when products are shipped and the title and risk of ownership pass to the customer. Inventories - ----------- Inventories are stated at the lower of cost or market. Costs of inventories totaling $312 million in 1995 and $309 million in 1994 were determined by the last-in, first-out (LIFO) method. Remaining inventories of $579 million in 1995 and $564 million in 1994 were determined by the average or first-in, first-out (FIFO) methods. If the FIFO method were applied to LIFO inventories, the amount for inventories would increase by $508 million at December 31, 1995, and $454 million at December 31, 1994. Since certain inventories may be sold at various stages of processing, no practical distinction can be made between finished products, in-process products and other materials. Inventories are therefore presented as a single classification. Depreciation and Amortization - ----------------------------- Depreciation of plant and equipment is recorded on the straight-line method over their estimated useful lives. Improvements to leased properties are amortized generally on the basis of the shorter of the terms of the respective leases or the estimated useful lives of the related facilities. Environmental Expenditures - -------------------------- The Company's policy is to accrue remediation costs when it is probable that such efforts will be required and the related costs can be reasonably estimated. Postemployment Benefits - ----------------------- The expected cost of postemployment benefits is accrued when it becomes probable that such benefits will be paid. Hedging - ------- The Company designates forward, futures and option contracts and swap agreements to manage market risks resulting from fluctuations in the aluminum, foreign currency and debt markets. These instruments, which are held for purposes other than trading, are effective in minimizing these risks by creating equal and offsetting market exposure. None of these instruments contain multiplier or leverage features. The NOTE A - ACCOUNTING POLICIES - continued - ---------------------------------------- Company is exposed to credit risk if the other parties to these instruments do not perform. The Company closely monitors the creditworthiness of the counterparties and they are expected to fulfill their obligations. Instruments utilized by the Company to manage risks in the foreign currency and debt markets are not material. For contracts that are designated and effective as hedges, unrealized gains and losses are deferred and recorded as a component of the underlying transaction. Realized gains or losses resulting from termination of contracts designated as hedges are deferred as a component of other assets or liabilities until the occurrence of the underlying transaction. Realized and unrealized gains and losses on contracts that relate to transactions that are no longer probable of occurring are recognized in results currently. Earnings Per Share - ------------------ For 1995, earnings per share equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the year. The number of common share equivalents outstanding was based on the assumed conversion of the Company's preferred stock ("PRIDES"). For the purpose of this computation, the conversion rate (0.88 per share) of common stock for each share of PRIDES was based on the average market value of the Company's common stock during the year ($53.56 per share). For 1994, earnings per share equals net income, minus PRIDES dividends, divided by the weighted-average number of common shares outstanding during the year. Common share equivalents relating to the PRIDES were not included in 1994 since their effect would have been anti-dilutive. For 1993, earnings per share equals net income divided by the weighted-average number of common shares outstanding during the year. Statement of Cash Flows - ----------------------- For purposes of the Statement of Cash Flows, all highly liquid, short-term investments purchased with an original maturity of three months or less are considered to be cash equivalents. New Accounting Rules - -------------------- In 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Company will adopt the statement in 1996. It is not expected to have a material impact on the Company's financial position or results of operations. Also in 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based Compensation. With respect to accounting for its stock options, as permitted under SFAS No. 123, the Company intends to retain the intrinsic value method currently used as prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. The Company will provide disclosures in accordance with SFAS No. 123 when the standard is adopted in 1996. NOTE B - GAINS ON SALES OF ASSETS - --------------------------------- In 1994, the Company completed the sale of Reynolds Australia Metals, Ltd., which held a 40% interest in the Boddington Gold Mine, to a subsidiary of Poseidon Gold Limited, recognizing a pre-tax gain of $63 million. Also in 1994, the Company recorded a pre-tax gain of $25 million on the sale of timberland in the Pacific Northwest. NOTE C - UNINCORPORATED JOINT VENTURES AND ASSOCIATED COMPANIES - --------------------------------------------------------------- The Company has interests in unincorporated joint ventures that produce alumina and primary aluminum. The investments in these entities consist of the following:
December 31 --------------------- 1995 1994 --------------------- Current assets $67 $71 Current liabilities (54) (51) Property, plant and equipment and other assets 1,032 624 --------------------- Net investment $1,045 $644 =====================
The Company also has interests in foreign-based associated companies that produce bauxite, alumina, primary aluminum, hydroelectric power and aluminum cans. The investments in these companies were $241 million and $212 million at December 31, 1995 and 1994, respectively, which includes advances of $46 million and $49 million. The Company recorded equity income (pre-tax) of $17 million, $24 million and $9 million during 1995, 1994 and 1993, respectively. Summarized financial information related to these entities is as follows:
Years ended December 31 ----------------------------- 1995 1994 1993 ----------------------------- Net sales $709 $476 $444 Cost of products sold 602 410 376 Net income 37 33 22
December 31 ---------------------- 1995 1994 ---------------------- Current assets $533 $367 Non-current assets 575 422 Current liabilities 384 214 Non-current liabilities 265 197 Stockholders' equity 459 378
NOTE D - PROPERTY, PLANT AND EQUIPMENT - AT COST - ------------------------------------------------
December 31 ----------------------- 1995 1994 ----------------------- Land, land improvements and mineral properties $302 $306 Buildings and leasehold improvements 1,057 1,030 Machinery and equipment 4,972 4,797 Construction in progress 269 175 ----------------------- $6,600 $6,308 Less allowances for depreciation and amortization 3,377 3,200 ----------------------- Net property, plant and equipment $3,223 $3,108 =======================
NOTE E - FINANCING ARRANGEMENTS - -------------------------------
December 31 ------------------------ 1995 1994 ------------------------ Public debt securities: Medium-term notes $1,046 $976 6-5/8% amortizing notes 284 284 9% debentures due 2003 100 100 9-3/8% debentures due 1999 100 100 Industrial and environmental control revenue bonds 242 220 Other issues: Bank credit agreement 150 150 Mortgages and other notes payable 32 36 ------------------------ 1,954 1,866 Amounts due within one year 101 18 ------------------------ Long-term debt $1,853 $1,848 ========================
Maturities of long-term debt at December 31, 1995 were $101 million in 1996, $72 million in 1997, $292 million in 1998, $197 million in 1999, $155 million in 2000 and $1,137 million from 2001 to 2025. Interest paid amounted to $172 million, $152 million and $159 million during 1995, 1994 and 1993, respectively, net of interest capitalized of $7 million, $5 million and $8 million. The Company has on file a shelf registration to issue up to $1.65 billion of debt securities. The medium-term notes, 9% debentures and 9-3/8% debentures were issued under the shelf registration. The medium-term notes bear interest at an average fixed rate of 8.8% and have maturities ranging from 1996 to 2013. At December 31, 1995, $150 million of debt securities remained unissued under the shelf registration. The 6-5/8% amortizing notes were issued at a discount (99.48%) and have an effective interest rate of 6.7%. The notes require annual principal repayments of $57 million each year between 1998 and 2002. Industrial and environmental control revenue bonds consist principally of variable-rate debt with interest rates averaging approximately 4.3% at December 31, 1995. These bonds require principal repayment periodically or in a lump sum through 2025. $237 million of these bonds are supported by bank letters of credit. The bank credit agreement bears interest at a variable rate (6.4% at December 31, 1995) and requires a single repayment in 1998. The mortgages and other notes payable category consists of fixed-rate debt at an average rate of 6.7% and requires principal repayment through 2009. The Company has a $500 million revolving credit facility that expires in 2000. No amounts were outstanding under the facility at December 31, 1995. The Company pays a commitment fee of .125% per year on the unused portion of the facility. NOTE E - FINANCING ARRANGEMENTS - continued - ------------------------------------------- The Company designates interest rate swap agreements to manage a portion of its exposure to interest rate fluctuations after considering outstanding levels of variable-rate and fixed-rate debt. The differential to be paid or received under these agreements as interest rates change is accrued and recognized as an adjustment of interest expense. The fair values of the swap agreements (which at the end of 1995 and 1994 were not material) are not recognized in the financial statements. At December 31, 1995, the Company had $742 million of interest rate swap agreements (1994 - $742 million), which effectively convert a portion of its debt (principally medium-term notes) from fixed-rate to variable-rate. Under these agreements, payments are received based on a fixed rate (4.9%) and made based on a variable rate (5.6% at December 31, 1995). These agreements mature in 1996 ($517 million, including $317 million in January), 1997 ($125 million) and 1998 ($100 million). The Company also had $175 million of interest rate swap agreements (1994 - $175 million), which effectively convert a portion of its debt (principally the bank credit agreement and industrial and environmental control revenue bonds) from variable-rate to fixed-rate. Under these agreements, payments are received based on a variable rate (5.9% at December 31, 1995) and made based on a fixed rate (6.0%). These agreements mature in 1998. The variable rates in the Company's interest rate swap agreements are based on the London Interbank Offer Rate. Certain of the Company's financing arrangements contain restrictions that primarily consist of requirements to maintain specified financial ratios. These restrictions do not inhibit operations or the use of fixed assets. At December 31, 1995, the Company exceeded all such requirements. The fair value of the Company's long-term debt (determined based on discounted cash flows) was approximately $2.1 billion at the end of 1995 and approximately equal to book value at the end of 1994. Short-term borrowings included in current liabilities represent notes payable to banks. The weighted-average interest rate on these debt instruments was 7.0% and 7.6% at December 31, 1995 and 1994, respectively. NOTE F - STOCKHOLDERS' EQUITY - ----------------------------- Preferred stock - --------------- The Company has 21,000,000 shares of preferred stock authorized of which 2,000,000 shares have been designated Series A Junior Participating Preferred and 11,000,000 have been designated 7% PRIDES(SM), Convertible Preferred Stock. The Company has 11,000,000 shares of 7% PRIDES outstanding ($47.25 stated value). The PRIDES mature on December 31, 1997, at which time they mandatorily convert into shares of the Company's common stock on a one-for-one basis. Dividends are cumulative from the date of issuance and are payable quarterly in arrears. Holders may convert each share of PRIDES into .82 of a share of common stock (to be adjusted under certain circumstances) at any time prior to December 31, 1997. The Company has the option of redeeming the PRIDES at any time on or after December 31, 1996, for common stock having a fair market value equal to the issue price plus accrued dividends plus a small premium. The redemption price will in no event be less than .82 of a share of common stock per share of PRIDES. The holders of shares of PRIDES have the right to vote with the holders of common stock in the election of Directors and on each matter coming before any meeting of the holders of common stock on the basis of 4/5 of a vote for each share of PRIDES. Dividends declared were $3.31and $3.10 per share in 1995 and 1994, respectively. NOTE F - STOCKHOLDERS' EQUITY - continued - -----------------------------------------
Common stock - ------------ Shares Amount ----------------------------- Authorized, without par value 200,000,000 Outstanding: At beginning of 1993 59,760,219 $750 Shares issued under employee benefit plans: 1993 728,644 34 1994 1,679,792 86 1995 1,429,822 71 ----------------------------- At end of 1995 63,598,477 $941 =============================
The Company filed a registration statement in late 1993 relating to the contribution, through December 31, 1995, of up to 3 million shares of common stock to one or more of its pension plans. Contributions were made totaling 0.6 million shares (valued at $28 million) in 1993, 1.5 million shares (valued at $77 million) in 1994 and 0.9 million shares (valued at $45 million) in 1995.
Cash dividends declared - ----------------------- 1995 1994 1993 ---------------------------------- 7% PRIDES $36 $34 - Common stock 77 62 $72 ---------------------------------- $113 $96 $72 ==================================
Stock option plan - ----------------- The Company has a non-qualified stock option plan under which stock options may be granted to key employees at a price equal to the fair market value at the date of grant. Transactions involving the plan were as follows:
1995 1994 1993 --------------------------------------------- Outstanding January 1 4,404,054 3,755,806 3,138,856 Granted 755,400 727,950 673,100 Cancelled (26,225) (24,650) (33,250) Exercised (453,509) (55,052) (22,900) --------------------------------------------- Outstanding at December 31 4,679,720 4,404,054 3,755,806 ============================================= Exercisable at December 31 3,931,370 3,681,204 3,084,356 ============================================= Options available for grant 520,025 1,259,500 1,978,150 ============================================= Weighted-average prices: Granted $51.50 $45.38 $45.50 Exercised 42.75 31.00 35.25 Outstanding at December 31 51.50 50.75 51.50 Exercisable at December 31 51.50 51.75 52.75
NOTE F - STOCKHOLDERS' EQUITY - continued - ----------------------------------------- Shareholder rights plan - ----------------------- Each share of the Company's common stock has one right attached. The rights trade with the common stock and are exercisable only if a person or group buys 20% or more of the Company's common stock, or announces a tender offer for 30% or more of the outstanding common stock. When exercisable, each right will entitle a holder to buy one-hundredth of one share of the Company's Series A Junior Participating Preferred Stock at an exercise price of $125. If at any time after the rights become exercisable, the Company is acquired in a merger or other business combination or if 50% of its assets or earning power is sold or transferred, each right would enable its holder to buy common stock of the acquiring company at a 50% discount. In addition, if a person or group acquires 30% or more of the common stock or if certain other events occur, each right would enable its holder to buy common stock of the Company at a 50% discount. The rights, which do not have voting privileges, expire in 1997, but may be redeemed by action of the Board of Directors before then, under certain circumstances, for $0.05 per right. Until the rights become exercisable, they have no dilutive effect on earnings per share. Although these rights should not interfere with a business combination approved by the Board of Directors, they will cause substantial dilution to a person or group that attempts to acquire the Company without conditioning the offer on redemption of the rights or acquiring a substantial number of the rights.
Cumulative currency translation adjustments - ------------------------------------------- 1995 1994 1993 ------------------------------- At beginning of year $(43) $(50) $(2) Currency translation adjustments 23 7 (49) Income taxes (2) - 1 ------------------------------- At end of year $(22) $(43) $(50) ===============================
NOTE G - POSTRETIREMENT BENEFITS - -------------------------------- Pensions - -------- The Company has several noncontributory defined benefit pension plans covering substantially all employees. Plans covering salaried employees provide pension benefits that are based on a formula which considers length of service and earnings during years of service. Plans covering hourly employees generally provide a specific amount of benefits for each year of service. Net pension costs were as follows:
1995 1994 1993 ------------------------------- Service cost $27 $32 $27 Interest cost 133 127 117 Actual return on plan assets (308) 3 (163) Net amortization and deferrals 192 (92) 84 Other 12 12 10 ------------------------------- Total $56 $82 $75 ===============================
NOTE G - POSTRETIREMENT BENEFITS - continued - -------------------------------------------- Assumptions used in accounting for the principal pension plans were as follows:
1995 1994 1993 ---------------------------- Discount rate 7.25% 8.75% 7.5% Approximate weighted-average rate of increase in compensation levels (salaried plan only) 4.5% 4.5% 4.5% Expected long-term rate of return on assets 9.25% 9.25% 9.25%
The following table sets forth information on the principal pension plans:
December 31 1995 1994 --------------------- Actuarial present value of pension benefit obligation: Vested $1,546 $1,286 Nonvested 177 160 --------------------- Accumulated $1,723 $1,446 ===================== Projected $1,858 $1,539 Plan assets at fair value 1,692 1,346 --------------------- Plan assets less than pension benefit obligation 166 193 Items not yet recognized: Unrecognized net loss (271) (181) Unamortized plan change benefits (98) (96) Recognition of minimum liability 151 104 --------------------- Net pension (asset) liability $(52) $20 =====================
The increase in the accumulated benefit obligation in 1995 was due to the reduction in the discount rate. Reflected in the Company's balance sheet is the additional minimum liability relative to its underfunded plans in the amount of $151 million in 1995 ($104 million in 1994). A corresponding amount was recognized as an intangible asset, to the extent it does not exceed unamortized plan change benefits, while the excess, net of tax, has been charged to stockholders' equity. The Company plans to make contributions totaling approximately $200 million to its pension plans between 1996 and 1998. The timing and ultimate level of the contributions will depend upon conditions in the securities markets and the overall business environment. Cash for the fundings is expected to be generated from operations. If there are no significant plan changes and/or deviations in actuarial assumptions, this funding level will provide for a fully funded accumulated benefit obligation by 1998. The Company contributed $127 million (including 0.9 million shares of common stock valued at $45 million) in 1995 and $122 million (including 1.5 million shares of common stock valued at $77 million) in 1994. At December 31, 1995, approximately 62% of the plans' assets were invested in corporate equity securities (including 1.8 million shares of common stock of the Company with a market value of $102 million), 18% in corporate bonds, 16% in government debt securities and cash equivalents and 4% in real estate. Dividends paid on common shares of the Company held by the plans during 1995 totaled $3 million. NOTE G - POSTRETIREMENT BENEFITS - continued - -------------------------------------------- Other postretirement benefits - ----------------------------- The Company provides health care and life insurance benefits to most domestic retired employees. Substantially all of the Company's domestic employees may become eligible for these benefits if they reach retirement age while working for the Company. The Company's policy is to fund the cost of these benefits when actual expenses are incurred. The Company's accumulated postretirement benefit obligation was comprised of the following:
December 31 -------------------- 1995 1994 -------------------- Retirees $694 $717 Active employees fully eligible 71 55 Active employees not fully eligible 165 140 Unamortized plan change benefits 178 189 Unrecognized net loss (46) (21) -------------------- Total $1,062 $1,080 ====================
Net periodic postretirement benefit cost was:
1995 1994 1993 ------------------------------------ Service cost $6 $8 $9 Interest cost 74 74 74 Net amortization (19) (16) (14) ------------------------------------ Total $61 $66 $69 ====================================
The annual assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) is 7% for 1996 (10% in 1995 and 11% in 1994) and is assumed to decrease gradually to 5% for 2002 and remain at that level thereafter. The health care cost trend rate assumption has a significant effect on the amounts reported. For example, each one percentage point change in the assumed health care cost trend rate would change the accumulated postretirement benefit obligation as of December 31, 1995, by approximately $61 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost for 1995 by approximately $4 million. The discount rate used in determining the accumulated postretirement benefit obligation was 7.25% at December 31, 1995, and 8.75% at December 31, 1994. The effect of the reduction in the discount rate in 1995 was partially offset by a reduction in the health care cost trend rate. NOTE H - TAXES ON INCOME - ------------------------ At December 31, 1995, the Company had various U.S. and German income tax carryforward benefits of $37 million that expire primarily between 1998 and 2010 and $132 million that can be carried forward indefinitely. The Company has deferred tax assets primarily relating to certain state operating loss carryforwards, and foreign entities of approximately $45 million against which a full valuation reserve has been recorded. The Company is continuing to evaluate alternatives that may result in the ultimate realization of a portion of these assets. NOTE H - TAXES ON INCOME - continued - ------------------------------------ Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 1995, the Company had $902 million (1994 - $976 million) of deferred tax assets and $759 million (1994 - $717 million) of deferred tax liabilities that have been netted with respect to tax jurisdictions for presentation purposes. The significant components of these amounts as shown on the balance sheet were as follows:
1995 1994 - ------------------------------------------ Asset Liability Asset Liability - ------------------------------------------ Retiree health benefits $415 - $414 - Tax carryforward benefits 213 $(1) 207 $(61) Environmental and restructuring costs 121 (2) 142 (3) Other 44 39 69 17 Tax over book depreciation (369) 200 (341) 230 Valuation reserve relating to tax carryforward benefits (45) - (49) - - ------------------------------------------ Total deferred tax assets and liabilities 379 236 442 183 Amount included as current in balance sheet 3 - 16 - - ------------------------------------------ Noncurrent deferred tax assets and liabilities $376 $236 $426 $183 ==========================================
The significant components of the provision for income taxes were as follows:
1995 1994 1993 - -------------------------------- Current: Federal $10 $30 $(55) Foreign 10 15 14 State 3 1 4 - -------------------------------- Total current 23 46 (37) - -------------------------------- Deferred: Federal 66 (13) (99) Foreign 62 32 (33) State - - (8) (29) - -------------------------------- Total deferred 128 11 (161) - -------------------------------- Equity income 8 11 5 - -------------------------------- Total $159 $68 $(193) ================================
The deferred tax provision included state and foreign operating loss carryforward benefits of $9 million. The Company has not provided taxes on the undistributed earnings ($992 million) of foreign subsidiaries. It is the intent of the Company to use such earnings to finance foreign expansion, reduce foreign debt, or support foreign operating requirements. NOTE H - TAXES ON INCOME - continued - ------------------------------------- The Company's effective income tax rate varied from the U.S. statutory rate as follows:
1995 1994 1993 ----------------------------- U.S. rate 35% 35% (35)% Income taxed at other than the U.S. rate (5) 2 3 Percentage depletion (1) (3) (1) State income taxes and other - 2 (4) ----------------------------- Effective rate 29% 36% (37)% =============================
In 1995, income taxed at other than the U.S. rate includes a non-recurring foreign tax benefit of 3%. Net income taxes paid (refunded) were $56 million, ($17 million) and $6 million in 1995, 1994 and 1993, respectively. NOTE I - CONTINGENT LIABILITIES AND COMMITMENTS - ----------------------------------------------- Various suits and claims are pending against the Company. In the opinion of management, after consultation with counsel, disposition of these suits and claims, either individually or in the aggregate, will not have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. No assurance can be given, however, that the disposition of one or more of such suits or claims in a particular reporting period will not be material in relation to the reported results for such period. In order to ensure an adequate supply of certain raw material requirements, the Company has committed to pay its proportionate share of annual production charges (including debt service) relating to its interests in an unincorporated joint venture and certain associated companies. These arrangements include minimum commitments of approximately $37 million annually through 2000 and additional amounts thereafter which together, at present value, total $159 million at December 31, 1995, after excluding interest of $25 million and variable operating costs of the facilities. During 1995, approximately $154 million (1994 - $190 million; 1993 - $195 million) of raw materials were purchased under these arrangements. Certain items of property, plant and equipment are leased under long-term operating leases. Lease expense was approximately $46 million per year for the years 1993 to 1995. Lease commitments at December 31, 1995, were approximately $83 million. Leases covering major items contain renewal and/or purchase options that may be exercised. NOTE J - ENVIRONMENTAL EXPENDITURES - ----------------------------------- The Company is involved in various worldwide environmental improvement activities resulting from past operations, including designation as a potentially responsible party (PRP), with others, at various Environmental Protection Agency designated Superfund sites. In developing its estimate of environmental remediation costs, the Company considers, among other things, currently available technological solutions, alternative cleanup methods and risk-based assessments of the contamination and, as applicable, an estimation of its proportionate share of remediation costs. The Company may also use external consultants, and consider, when available, estimates by other PRP's and governmental agencies and information regarding the financial viability of other PRP's. Based on information currently available, the Company believes it is unlikely that it will incur substantial additional costs as a result of failure by other PRP's to satisfy their responsibilities for remediation costs. NOTE J - ENVIRONMENTAL EXPENDITURES - continued - ----------------------------------------------- Amounts have been recorded which, in management's best estimate, will be sufficient to satisfy anticipated costs of known remediation requirements. At December 31, 1995, $242 million for estimated environmental remediation costs had been accrued. Expenditures relating to costs currently accrued are expected to be made over the next 15 to 20 years with the majority to be spent by the year 2000. As a result of factors such as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of presently unknown remediation sites and the allocation of costs among potentially responsible parties, estimated costs for future environmental compliance and remediation are necessarily imprecise. It is not possible to predict the amount or timing of future costs of environmental remediation which may subsequently be determined. Based on information presently available, such future costs are not expected to have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. However, such costs could be material to results of operations in a future period. NOTE K - OPERATIONAL RESTRUCTURING AND ASSET REVALUATION COSTS - -------------------------------------------------------------- The Company recorded $348 million in 1993 for operational restructuring and asset revaluation costs. These charges related primarily to the Company's plans to discontinue the manufacture of various sheet products in Illinois and extruded shapes in Kentucky. The components of these charges were as follows: Asset revaluation $189 Pension, health care and early retirement costs 116 Other operational restructuring costs 43 -------- Total $348 ======== Substantially all of the restructuring activities for which costs were accrued have been completed and future cash requirements are not expected to be material. NOTE L - COMPANY OPERATIONS The Company serves global markets as a supplier and recycler of aluminum and other products, with its core business being as a vertically integrated producer of a wide variety of value-added aluminum products. The Company produces alumina, carbon products and primary and reclaimed aluminum, principally to supply the needs of its fabricating operations. These fabricating operations produce aluminum foil, sheet, plate, cans, extruded products (including heat exchanger tubing, drive shafts, bumpers and window systems), flexible packaging and wheels, among other items. The Company also produces a broad range of plastic products, including film, bags, containers and lids, for consumer products, foodservice and packaging uses. The Company markets an extensive line of consumer products under the Reynolds brand name, including the well-known Reynolds Wrap aluminum foil. The Company's principal markets for its products are the aluminum beverage can, packaging, consumer products, transportation, and building and construction markets. The Company also is engaged in the distribution of aluminum and stainless steel and other nonaluminum industrial products to a variety of markets. Primary aluminum is an internationally traded commodity. The price of primary aluminum is subject to worldwide market forces of supply and demand. Prices can be volatile and fluctuations influence the Company's financial results. The world market is still recovering from a serious supply-demand imbalance that began in the early 1990s, and there may be periods of marked short-term price volatility. The Company's strategy of being a vertically integrated producer of value-added aluminum products reduces, but does not eliminate its exposure to these fluctuations. The Company manages its exposure NOTE L - COMPANY OPERATIONS - continued - --------------------------------------- to these fluctuations, after giving consideration to market conditions, sale and purchase transactions, overall business strategies and other factors that affect the Company's risk profile, with contractual arrangements including fixed-price sales contracts, fixed-price supply contracts, and forward, futures and option contracts. Through these activities the Company balances its risk profile consistent with management's operational strategies. In addition to the aluminum price risk, the Company is exposed to general financial, political, economic and business risks in connection with its worldwide operations. The Company continues to evaluate and manage its operations in a manner to mitigate the effects from exposure to such risks. In order to more fully describe the nature of its operations and to supplement the foregoing, the Company has separated its vertically integrated operations into two groups referred to as Finished Products and Other Sales, and Production and Processing. Summarized financial information relating to the Company's operations and investments is as follows: NOTE L - COMPANY OPERATIONS - continued - ---------------------------------------
Domestic Canada ----------------------------- - --------------------------- GEOGRAPHIC DATA 1995 1994 1993 1995 1994 1993 ----------------------------- - --------------------------- Products and services sold Customers $5,524 $4,506 $3,966 $529 $375 $294 Transfers between areas 484 404 283 726 576 508 ---------------------------- - --------------------------- Total products and services sold $6,008 $4,910 $4,249 $1,255 $951 $ 802 ============================ =========================== Operating profit (loss) $230 $27 $(19) $351 $133 $(7) Equity in income of companies not consolidated 8 9 8 Interest and other income 19 45 6 2 2 - Interest expense (129) (117) (116) (31) (28) (23) ---------------------------- - --------------------------- Income (loss) before income taxes $120 $(45) $(129) $330 $116 $(22) ============================ =========================== Identifiable assets $4,360 $4,578 $3,991 $1,326 $1,288 $1,216
- ------------------------------------------------------------------------------- - ----------------
Finished products and Other Sales - --------------------------------- OPERATING DATA 1995 1994 1993 - --------------------------------- Products and services sold Customers $3,535 $3,040 $2,528 Internal transfers 9 4 2 - --------------------------------- Total products and services sold $3,544 $3,044 $2,530 ================================= Operating profit (loss) $232 $256 $146 Equity in income of companies not consolidated 14 22 7 Interest and other income Interest expense Income (loss) before income taxes Operating profit (loss) includes depreciation and amortization of $94 $86 $71 Identifiable assets $1,558 $1,452 $1,253 Capital investments $157 $183 $183 Other Foreign (principally Europe) Eliminations, etc. Consolidated - ------------------------------------ -------------------------------- - ----------------------------- 1995 1994 1993 1995 1994 1993 1995 1994 1993 - ------------------------------------ -------------------------------- - ----------------------------- $1,160 $998 $1,009 $7,213 $5,879 $5,269 176 178 161 $(1,386) $(1,158) $(952) - ------------------------------------ -------------------------------- - ----------------------------- $1,336 $1,176 $1,170 $(1,386) $(1,158) $(952) $7,213 $5,879 $5,269 ==================================== ================================ ============================= $87 $63 $(5) $13 $(11) $(350) $681 $212 $(381) 17 23 9 (8) (9) (8) 17 23 9 6 67 10 (5) (3) - 22 111 16 (17) (14) (20) 5 3 - (172) (156) (159) - ------------------------------------ -------------------------------- - ----------------------------- $93 $139 $(6) $5 $(20) $(358) $548 $190 $(515) ==================================== ================================ ============================= $981 $975 $748 $(213) $(236) $(79) $6,454 $6,605 $5,876 - ------------------------------------------------------------------------------- - -------------------------- Production and Processing Eliminations, etc. Consolidated - ------------------------------------ -------------------------------- - ----------------------------- 1995 1994 1993 1995 1994 1993 1995 1994 1993 - ------------------------------------ -------------------------------- - ----------------------------- $3,678 $2,839 $2,741 $7,213 $5,879 $5,269 809 706 660 $(818) $(710) $(662) - ------------------------------------ -------------------------------- - ----------------------------- $4,487 $3,545 $3,401 $(818) $(710) $(662) $7,213 $5,879 $5,269 - ------------------------------------ -------------------------------- - ----------------------------- $492 $2 $(188) $(43) $(46) $(339) $681 $212 $(381) 11 10 10 (8) (9) (8) 17 23 9 22 111 16 (172) (156) (159) - ----------------------------- $548 $190 $(515) ============================= $217 $209 $216 $311 $295 $287 $4,121 $3,963 $3,686 $(83) $(84) $(15) $5,596 $5,331 $4,924 $688 $221 $218 $845 $404 $401
NOTE L- COMPANY OPERATIONS - continued - -------------------------------------- Approximately 33% of products transferred between operating areas are reflected at cost-related prices. The remaining transfers between operating areas and transfers between Canada, other foreign and domestic areas are reflected at market-related prices. Operating profit is after allocation of selling, administrative and general expenses. It does not reflect interest expense or other items of income or expense considered to be general corporate in nature. The Company had investments in, and advances to, associated companies and unincorporated joint ventures not consolidated amounting to $1,286 million, $856 million and $833 million at the end of 1995, 1994 and 1993, respectively. These investments and advances relate principally to Australian and Canadian entities in the Production and Processing operating area. Corporate assets of $858 million, $1,274 million and $952 million at the end of 1995, 1994 and 1993, respectively, consist principally of cash, investments, deferred taxes and other assets. Research and development expenditures were $43 million in 1995, $38 million in 1994 and $36 million in 1993. NOTE M - CANADIAN REYNOLDS METALS COMPANY, LIMITED - -------------------------------------------------- Financial statements and financial statement schedules for Canadian Reynolds Metals Company, Limited, whose name was changed to Reynolds Aluminum Company of Canada, Ltd. effective January 1, 1996, have been omitted because the securities it has registered under the Securities Act of 1933 (thus subjecting it to reporting requirements under Section 13 or 15(d) of the Securities Exchange Act of 1934) are fully and unconditionally guaranteed by Reynolds Metals Company. Financial information relating to Canadian Reynolds Metals Company, Limited is presented herein in accordance with Staff Accounting Bulletin 53 as an addition to the footnotes to the financial statements of Reynolds Metals Company. Summarized financial information is as follows:
Years ended December 31 --------------------------------- 1995 1994 1993 --------------------------------- Net Sales: Customers $522 $373 $294 Parent company 619 498 377 --------------------------------- 1,141 871 671 Cost of products sold 849 755 666 Net income (loss) $188 $50 $(36)
December 31 --------------------- 1995 1994 --------------------- Current assets $221 $238 Noncurrent assets 1,407 1,015 Current liabilities (199) (83) Noncurrent liabilities (632) (564)
Quarterly Results of Operations (Unaudited) (In millions, except per share amounts) 1995 1994 ---------------------------------------- - --------------------------------------------- Quarter 1st 2nd 3rd 4th 1st 2nd 3rd 4th ---------------------------------------- - --------------------------------------------- Net sales $1,651 $1,864 $1,841 $1,857 $1,254 $1,455 $1,531 $1,639 Gross profit 259 304 307 272 88 145 158 210 Net income (loss) $82 $111 $112 $84 $(21) $12 $62 $69 ======================================== ============================================= Net income (loss) per share $1.13 $1.51 $1.56 $1.15 $(0.46) $0.05 $0.86 $0.97 _________________________________ Gross profit is net sales minus cost of products sold (including manufacturing depreciation). Net income (loss) for 1994 includes a gain of $41 million in the third quarter from the sale of Reynolds Australia Metals, Ltd. and a gain of $16 million in the fourth quarter from the sale of timberland in the Pacific Northwest.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Stockholders and Board of Directors Reynolds Metals Company We have audited the accompanying consolidated balance sheets of Reynolds Metals Company as of December 31, 1995 and 1994, and the related consolidated statements of income and retained earnings, and cash flows for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Reynolds Metals Company at December 31, 1995 and 1994, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. Ernst & Young LLP Richmond, Virginia February 16, 1996 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT For information concerning the directors and nominees for directorship, see the information under the caption "Item 1. Election of Directors" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 17, 1996, which information is incorporated herein by reference. Information concerning executive officers of the Registrant is shown in Part I - - Item 4A of this report. Item 11. EXECUTIVE COMPENSATION For information required by this item, see the information under the captions "Item 1. Election of Directors - Board Compensation and Benefits", "Item 1. Election of Directors - Other Compensation", and "Executive Compensation" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 17, 1996, which information is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT For information required by this item, see the information under the caption "Beneficial Ownership of Securities" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 17, 1996, which information (other than that appearing under the caption "Beneficial Ownership of Securities - Stock Ownership Guidelines") is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS For information required by this item, see the information under the captions "Item 1. Election of Directors - Other Compensation", "Executive Compensation - - Pension Plan Table" and "Executive Compensation - Certain Arrangements" in the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on April 17, 1996, which information is incorporated herein by reference. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) The consolidated financial statements and exhibits listed below are filed as a part of this report. (1) Consolidated Financial Statements: Page ---- Consolidated statement of income and retained earnings - Years ended December 31, 1995, 1994 and 1993. 33 Consolidated balance sheet - December 31, 1995 and 1994. 34 Consolidated statement of cash flows - Years ended December 31, 1995, 1994 and 1993. 35 Notes to consolidated financial statements. 36 Report of Ernst & Young LLP, Independent Auditors. 53 (2) Financial Statement Schedules All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because they are not required, are inapplicable or the required information has otherwise been given. Individual financial statements of Reynolds Metals Company have been omitted because the restricted net assets (as defined in Accounting Series Release 302) of all subsidiaries included in the consolidated financial statements filed, in the aggregate, do not exceed 25% of the consolidated net assets shown in the consolidated balance sheet as of December 31, 1995. Financial statements of all associated companies (20% to 50% owned) have been omitted because no associated company is individually significant. (3) Exhibits EXHIBIT 2 - None * EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended to the date hereof. (Registration Statement No. 33-00929 on Form S-8, dated February 14, 1996, EXHIBIT 4.1) * EXHIBIT 3.2 - By-Laws, as amended to the date hereof. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 3.2) EXHIBIT 4.1 - Restated Certificate of Incorporation. See EXHIBIT 3.1. EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2. ___________________________ *Incorporated by reference. * EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the "Indenture") between Reynolds Metals Company and The Bank of New York, as Trustee, relating to Debt Securities. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1989, EXHIBIT 4(c)) * EXHIBIT 4.4 - Amendment No. 1 dated as of November 1, 1991 to the Indenture. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.4) * EXHIBIT 4.5 - Rights Agreement dated as of November 23, 1987 (the "Rights Agreement") between Reynolds Metals Company and The Chase Manhattan Bank, N.A. (File No. 1-1430, Registration Statement on Form 8-A dated November 23, 1987, pertaining to Preferred Stock Purchase Rights, EXHIBIT 1) * EXHIBIT 4.6 - Amendment No. 1 dated as of December 19, 1991 to the Rights Agreement. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.11) * EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999. (File No. 1-1430, Form 8-K Report dated June 6, 1989, EXHIBIT 4) * EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.3) * EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.4) * EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.15) * EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.16) * EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003. (File No. 1-1430, Form 8-K Report dated August 16, 1991, Exhibit 4(a)) EXHIBIT 4.13 - Articles of Continuance of Societe d'Aluminium Reynolds du Canada, Ltee/Reynolds Aluminum Company of Canada, Ltd. (formerly known as Canadian Reynolds Metals Company, Limited -- Societe Canadienne de Metaux Reynolds, Limitee) ("REYCAN"), as amended to the date hereof EXHIBIT 4.14 - By-Laws of REYCAN, as amended to the date hereof EXHIBIT 4.15 - Articles of Incorporation of Societe Canadienne de Metaux Reynolds, Ltee/Canadian Reynolds Metals Company, Ltd. ("CRM"), as amended to the date hereof ___________________________ *Incorporated by reference. EXHIBIT 4.16 - By-Laws of CRM, as amended to the date hereof * EXHIBIT 4.17 - Indenture dated as of April 1, 1993 among REYCAN, Reynolds Metals Company and The Bank of New York, as Trustee. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(a)) EXHIBIT 4.18 - First Supplemental Indenture, dated as of December 18, 1995 among REYCAN, Reynolds Metals Company, CRM and The Bank of New York, as Trustee * EXHIBIT 4.19 - Form of 6-5/8% Guaranteed Amortizing Note due July 15, 2002. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(d)) EXHIBIT 9 - None #* EXHIBIT 10.1 - Reynolds Metals Company 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) _______________________________ * Incorporated by reference. # Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. #* EXHIBIT 10.10 - Retirement Plan for Outside Directors. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.10) #* 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 hereof. (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 10.27) #* 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. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1992, EXHIBIT 28(a)) ____________________________ * Incorporated by reference. # Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. #* EXHIBIT 10.22 - 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)) #* 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) ____________________________ * Incorporated by reference. # Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. #* EXHIBIT 10.33 - 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). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.34) #* EXHIBIT 10.35 - Form of Split Dollar Life Insurance Agreement (Trustee Owner, Employee Pays Premium). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.35) #* EXHIBIT 10.36 - Form of Split Dollar Life Insurance Agreement (Employee Owner, Employee Pays Premium). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.36) #* EXHIBIT 10.37 - Form of Split Dollar Life Insurance Agreement (Third Party Owner, Third Party Pays Premiums). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.37) #* EXHIBIT 10.38 - Form of Split Dollar Life Insurance Agreement (Third Party Owner, Employee Pays Premiums). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.38) EXHIBIT 11 - Computation of Earnings Per Share EXHIBIT 12 - Not applicable EXHIBIT 13 - Not applicable EXHIBIT 16 - Not applicable EXHIBIT 18 - None EXHIBIT 21 - List of Subsidiaries of Reynolds Metals Company EXHIBIT 22 - None EXHIBIT 23 - Consent of Independent Auditors EXHIBIT 24 - Powers of Attorney ____________________________ * Incorporated by reference. # Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. EXHIBIT 27 - Financial Data Schedule EXHIBIT 28 - Not applicable Pursuant to Item 601 of Regulation S-K, certain instruments with respect to long-term debt of the Company are omitted because such debt does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any such instrument to the Commission upon request. (b) Reports on Form 8-K The Registrant filed no reports on Form 8-K during the fourth quarter of 1995. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REYNOLDS METALS COMPANY By Richard G. Holder Richard G. Holder, Chairman of the Board and Chief Executive Officer Date March 6, 1996 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By Henry S. Savedge, Jr. By Richard G. Holder Henry S. Savedge, Jr., Director Richard G. Holder, Director Executive Vice President and Chairman of the Board and Chief Financial Officer Chief Executive Officer (Principal Financial Officer) (Principal Executive Officer) Date March 6, 1996 Date March 6, 1996 By *Patricia C. Barron By *William O. Bourke Patricia C. Barron, Director William O. Bourke, Director Date March 6, 1996 Date March 6, 1996 By *John R. Hall By *Robert L. Hintz John R. Hall, Director Robert L. Hintz, Director Date March 6, 1996 Date March 6, 1996 By *William H. Joyce By *Mylle Bell Mangum William H. Joyce, Director Mylle Bell Mangum, Director Date March 6, 1996 Date March 6, 1996 By *D. Larry Moore By Randolph N. Reynolds D. Larry Moore, Director Randolph N. Reynolds, Director Date March 6, 1996 Date March 6, 1996 By *James M. Ringler By Jeremiah J. Sheehan James M. Ringler, Director Jeremiah J. Sheehan, Director Date March 6, 1996 Date March 6, 1996 By *Robert J. Vlasic By *Joe B. Wyatt Robert J. Vlasic, Director Joe B. Wyatt, Director Date March 6, 1996 Date March 6, 1996 By Allen M. Earehart Allen M. Earehart, Vice President, Controller (Principal Accounting Officer) Date March 6, 1996 *By D. Michael Jones D. Michael Jones, Attorney-in-Fact Date March 6, 1996 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 EXHIBITS TO FORM 10-K For the fiscal year ended December 31, 1995 Commission File No. 1-1430 REYNOLDS METALS COMPANY Attached herewith are Exhibits 4.13, 4.14, 4.15, 4.16, 4.18, 11, 21, 23, 24 and 27 INDEX EXHIBIT 2 - None * EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended to the date hereof. (Registration Statement No. 33-00929 on Form S-8, dated February 14, 1996, EXHIBIT 4.1) * EXHIBIT 3.2 - By-Laws, as amended to the date hereof. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 3.2) EXHIBIT 4.1 - Restated Certificate of Incorporation. See EXHIBIT 3.1. EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2. * EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the "Indenture") between Reynolds Metals Company and The Bank of New York, as Trustee, relating to Debt Securities. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1989, EXHIBIT 4(c)) * EXHIBIT 4.4 - Amendment No. 1 dated as of November 1, 1991 to the Indenture. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.4) * EXHIBIT 4.5 - Rights Agreement dated as of November 23, 1987 (the "Rights Agreement") between Reynolds Metals Company and The Chase Manhattan Bank, N.A. (File No. 1-1430, Registration Statement on Form 8-A dated November 23, 1987, pertaining to Preferred Stock Purchase Rights, EXHIBIT 1) * EXHIBIT 4.6 - Amendment No. 1 dated as of December 19, 1991 to the Rights Agreement. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.11) ___________________________ *Incorporated by reference. * EXHIBIT 4.7 - Form of 9-3/8% Debenture due June 15, 1999. (File No. 1-1430, Form 8-K Report dated June 6, 1989, EXHIBIT 4) * EXHIBIT 4.8 - Form of Fixed Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.3) * EXHIBIT 4.9 - Form of Floating Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.4) * EXHIBIT 4.10 - Form of Book-Entry Fixed Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.15) * EXHIBIT 4.11 - Form of Book-Entry Floating Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.16) * EXHIBIT 4.12 - Form of 9% Debenture due August 15, 2003. (File No. 1-1430, Form 8-K Report dated August 16, 1991, Exhibit 4(a)) EXHIBIT 4.13 - Articles of Continuance of Societe d'Aluminium Reynolds du Canada, Ltee/Reynolds Aluminum Company of Canada, Ltd. (formerly known as Canadian Reynolds Metals Company, Limited -- Societe Canadienne de Metaux Reynolds, Limitee) ("REYCAN"), as amended to the date hereof EXHIBIT 4.14 - By-Laws of REYCAN, as amended to the date hereof EXHIBIT 4.15 - Articles of Incorporation of Societe Canadienne de Metaux Reynolds, Ltee/Canadian Reynolds Metals Company, Ltd. ("CRM"), as amended to the date hereof EXHIBIT 4.16 - By-Laws of CRM, as amended to the date hereof * EXHIBIT 4.17 - Indenture dated as of April 1, 1993 among REYCAN, Reynolds Metals Company and The Bank of New York, as Trustee. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(a)) EXHIBIT 4.18 - First Supplemental Indenture, dated as of December 18, 1995 among REYCAN, Reynolds Metals Company, CRM and The Bank of New York, as Trustee * EXHIBIT 4.19 - Form of 6-5/8% Guaranteed Amortizing Note due July 15, 2002. (File No. 1-1430, Form 8-K Report dated July 14, 1993, EXHIBIT 4(d)) EXHIBIT 9 - None ___________________________ *Incorporated by reference. * 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) * 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 hereof. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.18) _______________________________ * Incorporated by reference. * 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 10.27) * 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. 1-1430, 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)) * 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) _______________________________ * Incorporated by reference. * 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). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.34) * EXHIBIT 10.35 - Form of Split Dollar Life Insurance Agreement (Trustee Owner, Employee Pays Premium). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.35) * EXHIBIT 10.36 - Form of Split Dollar Life Insurance Agreement (Employee Owner, Employee Pays Premium). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.36) _______________________________ * Incorporated by reference. * EXHIBIT 10.37 - Form of Split Dollar Life Insurance Agreement (Third Party Owner, Third Party Pays Premiums). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.37) * EXHIBIT 10.38 - Form of Split Dollar Life Insurance Agreement (Third Party Owner, Employee Pays Premiums). (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1995, EXHIBIT 10.38) EXHIBIT 11 - Computation of Earnings Per Share EXHIBIT 12 - Not applicable EXHIBIT 13 - Not applicable EXHIBIT 16 - Not applicable EXHIBIT 18 - None EXHIBIT 21 - List of Subsidiaries of Reynolds Metals Company EXHIBIT 22 - None EXHIBIT 23 - Consent of Independent Auditors EXHIBIT 24 - Powers of Attorney EXHIBIT 27 - Financial Data Schedule EXHIBIT 28 - Not applicable ______________________________ * Incorporated by reference. EX-4 2 EXHIBIT 4.13 Quebec CERTIFICAT DE MODIFICATION Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J'atteste par les presentes que la compagnie SOCIETE D'ALUMINIUM REYNOLDS DU CANADA, LTEE et sa version REYNOLDS ALUMINUM COMPANY OF CANADA, LTD. a modifie ses statuts le 1ER JANVIER 1996, sous l'autorite de la partie IA de la Loi sur les compagnies, tel qu'indique dans les statuts de modification ci-joints. Deposes au registre le 15 decembre 1995 sous le matricule 1143544550 Gouvernement du Quebec L'Inspecteur general des Alfred Vaillancourt institutions Inspecteur general des institutions financieres par interim financieres T130D10C55S43JA [IMAGE OF SEAL OMITTED] Gouvernement du Quebec L'Inspecteur general des institutions financieres Formulaire 5 STATUTS DE MODIFICATION Loi sur les compagnies, L.R.Q. c. C-38 Partie 1A 1. Denomination sociale SOCIETE D'ALUMINIUM REYNOLDS DU CANADA, LTEE REYNOLDS ALUMINUM COMPANY OF CANADA, LTD. 2. Adresse actuelle de la compagnie 1002 SHERBROOKE WEST, SUITE 2420 No Nom de la rue MONTREAL Municipalite QUEBEC H3A 3L6 Province Code postal 3. ____ Requete presentee en vertu de l'article 123.140 et suivants de la Loi sur les compagnies 4. Les statuts de la compagnie sont modifies de la facon suivante: 5. Date d'entree en vigueur, 6. Denomination sociale (ou numero si differente de la date matricule) anterieure a la modification, si du depot (voir instructions) differente de celle mentionnee a la case 1 JANUARY 1, 1996 SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE CANADIAN REYNOLDS METALS COMPANY, LIMITED Si l'espace est insuffisant, joindre une annexe en deux (2) exemplaires Signature de l'administrateur autorise D. Michael Jones ____________________________________________________________________________ Reserve a 'l'administration GOUVERNEMENT DU QUEBEC DEPOSE LE 15 DEC. 1995 INSPECTEUR GENERAL DES INSTITUTIONS FINANCIERES Gouvernement du Quebec L'Inspecteur general des institutions financieres CERTIFICAT DE MODIFICATION Loi sur les compagnies (L.R.Q., chap. C-38) Partie IA J'atteste par les presentes que la compagnie SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE a modifie ses statuts, sous l'autorite de la partie IA de la Loi sur les compagnies, tel qu'indique dans les statuts de modifi- cation ci-joints. Le 1993 02 19 Jean Marie Bandchard Inspecteur general des institutions financieres Gouvernement du Quebec L'Inspecteur general des institutions 1171-7386 financieres [IMAGE OF SEAL OMITTED] Gouvernement du Quebec L'Inspecteur general des institutions financieres CERTIFICAT D'ENREGISTREMENT Loi sur les compagnies (L.R.Q., chap. C-38) Partie IA J'atteste par les presentes que la copie qui accompagne le present certificat est une copie authentique de l'original d'un document concernant SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE et que cette copie a ete enregistree le 1993 02 19 au libro S-3016, folio 53 Jean Marie Bandchard Inspecteur general des institutions financieres Gouvernement du Quebec L'Inspecteur general des institutions 1171-7386 financieres [IMAGE OF SEAL OMITTED] Gouvernement du Quebec L'Inspecteur general des institutions financieres Formulaire 5 STATUTS DE MODIFICATION Loi sur les compagnies Partie 1A 1. Denomination sociale ou numero matricule Canadian Reynolds Metals Company, Limited -- Societe Canadienne de Metaux Reynolds, Limitee 2. Les statuts de la compagnie sont modifies de la facon suivante: Section 5 of the articles of continuance is amended by deleting therefrom the following provision (set forth in Annex B to the articles of continuance): (c) Any invitation to the public to subscribe for any shares, debentures or other securities of the company shall be prohibited. Section 5, as so amended, reads in its entirety as set forth in the revised Annex B to the articles of continuance attached hereto. 3. Date d'entree en vigueur, 4. Denomination sociale (ou numero matricule) si differente de la date anterieure a la modification, si du depot (Voir instructions) differente de celle mentionnee a la case 1 Signature de Fonction du l'administrateur autorise signataire Director Henry S. Savedge, Jr. ____________________________________________________________________________ Reserve a 'l'administration 1171-7386 GOUVERNEMENT DU QUEBEC DEPOSE LE 19 FEV. 1993 L'INSPECTEUR GENERAL DES INSTITUTIONS FINANCIERES ANNEX B TO ARTICLES OF CONTINUANCE OF ------------------------------------- CANADIAN REYNOLDS METALS COMPANY, LIMITED-- ------------------------------------------- SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE ---------------------------------------------- 5. Limitations on the transfers of shares, if any. ----------------------------------------------- (a) The shares of the capital stock of the company shall not be transferred without the consent of the Board of Directors evidenced by a resolution adopted by them and recorded in the books of the company or the consent of the holders of the majority in number of the outstanding shares of the company then entitled to vote at meetings of shareholders of the company. (b) The number of shareholders of the company shall be limited to fifty (50) not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company were, while in that employment and have continued after the termination of that employment to be, shareholders of the company, two (2) or more persons holding one (1) or more shares jointly being counted as a single shareholder. ARTICLES OF CONTINUANCE Form 7 (Part 1A of the Companies Act) 1 Corporate name 2 Date of incorporation Canadian Reynolds Metals Company Limited -- July 31, 1970 Societe Canadienne De Metaux Reynolds, Limitee 3 Judicial district within Quebec chosen as the company's head-office location Judicial District of Montreal 4 Description of the company's share capital See Annex A. 5 Limitations on the transfer of shares, if any See Annex B. 6 Number (or minimum and maximum number) of directors permissible The Board of Directors of the company shall consist of such number, being not less than three and not greater than twelve, as may be determined from time to time by the Board of Directors. 7 Limitations imposed on activities, if any None. 8 Other provisions See Annex C. Signature of authorized Post of Vice Chairman of the Board director William S. Leonhardt signatory and Chief Financial Officer William S. Leonhardt Date October 1, 1982 For Departmental use only - ------------------------------------------------------------------------------- Date filed File number 1171-7386 QUEBEC DEPOSES LE 1982 10 01 LE DIRECTEUR DES COMPAGNIES Gouvernement du Quebec Ministere des Institutions financieres et Cooperatives Direction des compagnies CERTIFICAT D'ENREGISTREMENT (Partie 1A de la Loi sur les compagnies) Je certifie par les presentes que chaque document qui accompagne le present certificat est une copie authentique de l'original d'un document concernant SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE et qu'il a ete enregistre le 82/10/06 au libro S-228, folio 138 Le Directeur Hubert Jaudry Dossier: 1171-7386 Gouvernement du Quebec Ministere des Institutions financieres et Cooperatives Direction des compagnies CERTIFICAT DE CONTINUATION (Partie 1A de la Loi sur les compagnies) Je certifie par les presentes que la compagnie SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE a continue son existence sous l'autorite de la partie 1A de la Loi sur les compagnies, tel qu'indique dans les statuts de continuation ci-joints. Date 82/10/01 Le Directeur Hubert Jaudry ANNEX A TO ARTICLES OF CONTINUANCE OF ------------------------------------- CANADIAN REYNOLDS METALS COMPANY, LIMITED-- ------------------------------------------- SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE ---------------------------------------------- 4. Description of the Company's Share Capital. The authorized share capital of the company shall be unlimited and shall consist of: 1. An unlimited number of Common Shares, without Par Value ("Common Shares"); 2. An unlimited number of Class A Preferred Shares, $100 Par Value ("Class A Preferred"); 3. An unlimited number of Class B Preferred Shares, $100 Par Value ("Class B Preferred"); and 4. An unlimited number of Class C Preferred Shares, $100 Par Value ("Class C Preferred"). The said Common Shares and the Class A Preferred, Class B Preferred and Class C Preferred (such three classes of preferred shares hereinafter referred to in the aggregate as the "Preferred Shares") shall carry and be subject to the following preferences, priorities, rights, conditions, limitations and restrictions: (1) The holders of each class of the Preferred Shares shall, when and as declared by the Board of Directors, be entitled, out of the funds of the company legally available therefor, to noncumulative dividends at a rate of (a) $10.00 per annum and no more for each share of Class A Preferred, (b) $9.50 per annum and no more for each share of Class B Preferred, and (c) $9.00 per annum and no more for each share of Class C Preferred. Such dividends shall be preferential, so that in no event shall any dividend be declared, paid or set apart for payment on the Common Shares in respect of any quarter-annual period (other than a dividend payable solely in Common Shares) unless and until all dividends on all then outstanding Preferred Shares for such quarter shall have been (i) paid or (ii) declared and a sum sufficient for the payment thereof set apart. The holders of the Preferred Shares shall not be entitled to any dividend other than or in excess of the noncumulative dividends at the rates provided for above. No dividends for any quarter-annual period shall be declared, paid or set apart for payment on any class of then outstanding Preferred Shares unless the same proportion of the annual dividend rate respectively applicable to the shares of every class of Preferred Shares at the time outstanding shall likewise be declared, paid or set apart as a dividend in respect of such quarter-annual dividend period. (2) In the event of the voluntary or involuntary liquidation, dissolution or winding up of the company, the holders of the then outstanding Preferred Shares shall be entitled to receive the sum of $100.00 per share, together with all unpaid declared dividends thereon in priority to any distribution to the holders of the then outstanding Common Shares and shall not be entitled to share any further in the distribution of the property or assets of the company. If, on any voluntary or involuntary liquidation, dissolution or winding up of the company, the assets of the company are insufficient to permit full payment to the holders of the then outstanding Preferred Shares as herein provided, then the holders of the then outstanding Preferred Shares shall share ratably in any distribution of assets in proportion to the full amounts to which they would otherwise be respectively entitled. An amalgamation of the company with or into another company or companies shall not be deemed to be a liquidation, dissolution or winding up of the company within the meaning of this Paragraph. (3) The company may, at the option of the Board of Directors of the company, redeem all or, from time to time, any part of the then outstanding Preferred Shares on payment to the holders thereof, for each share to be redeemed, of the amount of S100.00, together with all unpaid declared dividends thereon. Before redeeming any Preferred Shares, the company shall mail to each person who, at the date of such mailing, is a registered holder of shares to be redeemed, notice of the intention of the company to redeem such shares held by such registered holder. Such notice shall be mailed by registered or certified post addressed to the last address of any such holder as it appears on the records of the company or, in the event of the address of any such holder not appearing on the records of the company, then to the last known address of such holder, at least 10 days before the date specified for redemption. Such notice shall set out the class to be redeemed, redemption price, the date on which redemption is to take place and, if only part of the shares held by the person to whom it is addressed is to be redeemed, the number thereof so to be redeemed. On or after the date so specified for redemption, the company shall pay or cause to be paid the redemption price to the registered holders of the shares to be redeemed, on presentation and surrender of the certificates for the shares so called for redemption, duly endorsed in blank, at the head office of the company or at such other place or places as may be specified for redemption in such notice. On and after the date so specified for redemption, the holders of such shares called for redemption shall cease to be entitled to any rights in respect thereof, except to receive the redemption price, without interest, unless payment of the redemption price shall not be made by the company in accordance with the foregoing provisions, in which case the rights of the holders of such shares shall remain unimpaired. On or before the date specified for redemption, the company shall have the right to deposit the redemption price of the shares called for redemption in a special account with a bank or trust company named in the notice of redemption to be paid, without interest, to or to the order of the respective holders of such shares called for redemption upon presentation and surrender of the certificates representing the same, duly endorsed in blank, and, on the date specified for redemption, the shares in respect whereof such deposit shall have been made shall be deemed to have been redeemed and the rights of the several holders thereof, after such date, shall be limited to receiving, out of the moneys so deposited, without interest, the redemption price applicable to their respective shares against presentation and surrender of the certificates representing such shares. (4) The company may at any time or times purchase for cancellation the whole or any part of the Preferred Shares outstanding from time to time pursuant to tenders, or, with the unanimous consent of the holders of all the then outstanding Preferred Shares (or, if only one or two classes are involved, by the holders of all then outstanding shares of the involved class or classes), by private contract at the lowest price at which, in the opinion of the Board of Directors, such shares are obtainable but not exceeding the amount of $100.00 per share, together with all unpaid declared dividends thereon. (5) Subject to the provisions of the Companies Act (Quebec), any holder of one or more then outstanding Preferred Shares may require the company to redeem all or any of such shares registered in the name of such holder on the books of the company, by tendering to the company at its head office the share certificate(s), duly endorsed in blank, representing such share(s) which such holder desires to have the company redeem and a written request for redemption specifying (i) the number of shares for which redemption is sought (the "sold shares") and (ii) the business day (the "purchase date") on which such holder desires to have the company redeem the sold shares, which shall be not less than 10 days after the day on which the request is given to the company. After receipt of such share certificate(s) and request the company shall on the purchase date redeem the sold shares by paying to such shareholder an amount of $100 per sold share plus any unpaid declared dividends thereon. Such payment shall be made by check payable at any branch of the company's bank. The sold shares shall be redeemed on the purchase date and thereafter their holders shall cease to be entitled to any rights of shareholders in respect of the sold shares (except to receive the redemption price) unless payment of the redemption price is not made on the purchase date, in which case the rights of the holders of the sold shares shall remain unimpaired. Notwithstanding the foregoing, the company shall not be obliged to purchase the sold shares to the extent that such purchase would be contrary to any applicable law, and if such purchase of any such sold shares would be contrary to any applicable law, the company shall only be obliged to purchase such sold shares to the extent that the monies applied thereto shall be such amount (rounded to the next lower multiple of $100) as would not be contrary to such law, in which case, the company shall pay to each holder of sold shares his pro rata share of the purchase monies allocable and shall cause to be issued to such holder a new share certificate representing the sold shares held by such holder and not purchased by the company. (6) The holders of the then outstanding Preferred Shares and the holders of the then outstanding Common Shares shall be entitled to receive notice of and to attend and vote at all meetings of shareholders of the company and each share of the Preferred Shares and Common Shares then outstanding shall confer the right to one (1) vote in person or by proxy at all meetings of shareholders of the company. (7) The company shall not, except by by-law passed by the Board of Directors and confirmed by resolution by a majority of not less than two-thirds of the votes cast by (i) the holders of each class of the then outstanding Preferred Shares and (ii) the holders of the then outstanding Common Shares present or represented at, and voting separately by classes at, a special general meeting of the shareholders called for considering such resolution and upon compliance with any relevant provisions of the laws governing the company, (i) create any other class of shares, (ii) voluntarily liquidate or dissolve the company, (iii) distribute any surplus of the company other than by way of dividend or by purchase or redemption of any Preferred Shares in accordance with the provisions of paragraphs (1), (3), (4) and (5), respectively, hereof, or (iv) repeal, amend or otherwise alter any of the provisions contained in paragraphs (1) to (6) hereof or in this paragraph (7). FI2734 ANNEX B TO ARTlCLES OF CONTINUANCE OF ------------------------------------- CANADIAN REYNOLDS METALS COMPANY, LIMITED- ------------------------------------------ SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE ---------------------------------------------- 5. Limitations on the transfers of shares, if any. (a) The shares of the capital stock of the company shall not be transferred without the consent of the Board of Directors evidenced by a resolution adopted by them and recorded in the books of the company or the consent of the holders of the majority in number of the outstanding shares of the company then entitled to vote at meetings of shareholders of the company. (b) The number of shareholders of the company shall be limited to fifty (50) not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company were, while in that employment and have continued after the termination of that employment to be, shareholders of the company, two (2) or more persons holding one (1) or more shares jointly being counted as a single shareholder. (c) Any invitation to the public to subscribe for any shares, debentures or other securities of the company shall be prohibited. FI2734 ANNEX C TO ARTICLES OF CONTINUATION OF -------------------------------------- CANADIAN REYNOLDS METALS COMPANY, LIMITED-- ------------------------------------------- SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE ---------------------------------------------- 8. Other Provisions. (a) So long as the company has not made a distribution of its securities to the public, the annual meeting of the shareholders of the company may be held within or outside Quebec at such place as the Board of Directors of the company may from time to time designate. (b) So long as the company has not made a distribution of its securities to the public, the shareholders of the company may participate and vote at any shareholders' meeting by any means allowing all participants to communicate with each other. (c) The company shall have the power to purchase or otherwise acquire and to hold, sell, exchange or otherwise dispose of and deal in the property, rights and assets of, and bonds, debentures, debenture stock, shares of all classes and securities of any form or type issued by any individual, corporation or company, public or private, incorporated or unincorporated. (d) The Board of Directors may, when they deem it expedient: (i) Borrow money upon the credit of the company; (ii) Issue debentures or other securities of the company, and pledge or sell the same for such sums and at such prices as may be deemed expedient; (iii) Notwithstanding the provisions of the Civil Code, hypothecate, mortgage or pledge the moveable or immoveable property, present or future, of the company, to secure any such debentures, or other securities, or give part only of such guarantee for such purposes; and constitute the hypothec, mortgage or pledge above mentioned, by trust deed, in accordance with sections 28 and 29 of the Special Corporate Powers Act (Chap. p-16), or in any other manner; (iv) Hypothecate or mortgage the immoveable property of the company, or pledge or otherwise affect the moveable property, or give all such guarantees, to secure the payment of loans made otherwise than by the issue of debentures, as well as the payment or performance of any other debt, contract or obligation of the company. FI2734 NOTICE OF ADDRESS OR OF CHANGE OF ADDRESS OF HEAD OFFICE Form 2 (Part IA of the Companies Act) Corporate name or designating number Canadian Reynolds Metals Company, Limited -- Societe Canadienne De Metaux Reynolds, Limitee Notice is hereby given that the address of the head office of the company, within the limits of the judicial district declared in the articles, is as follows: 1100 Sherbrooke Street West Civic number Street: Montreal Locality Quebec H3A IG7 Province or country Postal code The company Canadian Reynolds Metals Company, Limited -- Societe Canadienne De Metaux Reynolds, Limitee Post occupied Vice Chairman of the Board by William S. Leonhardt by signatory and Chief Financial Officer (signature) Date October 1, 1982 William S.Leonhardt For Departmental use only - ------------------------------------------------------------------------------ Date filed File number 1171-7386 QUEBEC DEPOSES LE 1982 10 01 LE DIRECTEUR DES COMPAGNIES NOTICE CONCERNING COMPOSITION OF BOARD OF DIRECTORS Form 4 (Part IA of the Companies Act) 1. Corporate name or designating number Canadian Reynolds Metals Company, Limited -- Societe Canadienne De Metaux Reynolds, Limitee 2. The directors of the company are: Name and surname Full residential address Profession (postal code included) David P. Reynolds 905 Tresco Rd., Richmond, VA 23229 Company Executive John. H. Galea 207 Hollyport Rd.,Richmond, VA 23229 Company Executive William S. Leonhardt 3000 S. Ocean Blvd., Apt. 1106 Company Executive Boca Raton, FL 33432 A. D. Reynolds, III 2956 Hathaway Rd., No. 610-612 Company Executive Richmond, VA 23233 W. J. Bennett Chateau Apartments, #F-41 Company Executive 1321 Sherbrooke St., West Montreal, Quebec H-3G 1J4 H. W. DeJong 15 Mance Avenue Company Executive Baie Comeau, Quebec G4Z 1M6 Jock K. Finlayson 18 Misty Crescent Avenue Company Executive Don Mills, Ontario MCV 1T3 If space is insufficient, join an annex See also attached Annex The company Canadian Reynolds Metals Company, Limited - Societe Canadienne De Metaux Reynolds Limitee Post occupied Vice Chairman of the Board by: William S. Leonhardt by signatory & Chief Financial Officer (signature) Date: October 1, 1982 William S. Leonhardt For Departmental use only - ------------------------------------------------------------------------------- Date filed File number QUEBEC 1171-7386 DEPOSES LE 1982 10 01 LE DIRECTEUR DES COMPAGNIES ANNEX TO FORM 4 NOTICE CONCERNING COMPOSITION OF BOARD OF DIRECTORS H. V. Helton 10800 Whitaker Woods Road Company Executive Richmond, VA 23233 Randolph N. Reynolds 8605 River Road Company Executive Richmond, VA 23229 Warren Y. Soper 1415 Scarboro Road Company Executive Montreal, Quebec H3P 2S2 Gouvernement du Quebec L'Inspecteur general CERTIFICAT D'ENREGISTREMENT des Institutions financieres Loi sur les compagnies (L.R.Q., chap. C-38) Partie IA J'atteste par les presentes que la copie qui accompagne le present certificat est une copie authentique de l'original d'un document concernant SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE et que cette copie a ete enregistree le 1986 08 12 au libro S-877 , folio 100 Jean Marie Bandchard Inspecteur general des institutions financieres Gouvernement du Quebec - L'Inspecteur general des institutions financieres [IMAGE OF SEAL OMITTED] Dossier: 1171-7386 Gouvernement du Quebec CERTIFICAT DE MODIFICATION L'Inspecteur general Loi sur Ies compagnies des Institutions financieres (L.R.Q. chap. C-38) Partie IA J 'atteste par les presentes que la compagnie SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE a modifie ses statuts, sous l'autorite de la partie IA de la Loi sur les compagnies, tel qu'indique dans les statuts de modification ci-joints. Le 1986 08 11 Jean Marie Bandchard Inspecteur general des institutions financieres Gouvernement du Quebec - L'Inspecteur general des institutions financieres [IMAGE OF SEAL OMITTED] FORM 5 ARTICLES OF AMENDMENT The Companies Act Part IA 1 Corporate name or designating number CANADIAN REYNOLDS METALS COMPANY, LIMITED SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE 2 The company's articles are amended as follows: Section 6 of the articles of continuance be and is hereby deleted and replaced by the following: [6 Precise number of minimum and maximum number of directors] [Minimum: 3 Maximum:13] The Board of Directors of the company shall consist of such number, being not less than three and not greater than thirteen, as may be determined from time to time by the Board of Directors. 3 Effective date, if different 4 Corporate name, or designating number, from date of filing prior to amendment (if different from that mentioned in Item 1) Signature of Post occupied authorized director John H. Galea by signatory Director John H. Galea _____________________________________________________________________________ For departmental use only 1171-7386 Gouvernement du Quebec Depose le 1986 08 11 Gouvernement du Quebec L'Inspecteur general CERTIFICAT D'ENREGISTREMENT des Institutions financieres Loi sur les compagnies (L.R.Q., chap. C-38) Partie IA J 'atteste par les presentes que la copie qui accompagne le present certificat est une copie authentique de l'original d'un document concernant SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE et que cette copie a ete enregistree le 1988 03 04 au libro S-1384 , folio 85 Jean Marie Bandchard Inspecteur general des institutions financieres Gouvernement du Quebec - L'Inspecteur 1171-7386 general des institutions financieres [IMAGE OF SEAL OMITTED] Gouvernement du Quebec L'Inspecteur general CERTIFICAT DE MODIFICATION des Institutions financieres Loi sur les compagnies (L.R.Q., chap. C-38) Partie IA J 'atteste par les presentes que la compagnie SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE a modifie ses statuts, sous l'autorite de la partie IA de la Loi sur les compagnies, tel qu'indique dans les statuts de modifi- cation ci-joints Le 1988 02 29 Jean Marie Bandchard Inspecteur general des institutions financieres Gouvernement du Quebec - L'Inspecteur 1171-7386 general des institutions financieres [IMAGE OF SEAL OMITTED] Form 5 ARTICLES OF AMENDMENT The Companies Act Part IA 1 Corporate name or designating number CANADIAN REYNOLDS METALS COMPANY, LIMITED SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE 2 The company's articles are amended as follows: Section 4 of the articles of continuance be and is hereby deleted and replaced by the following: A Description of share capital See Annex A 3 Effective date, if different 4 Corporate name, or designating number, from date of filing prior to amendment (if different from that mentioned in Item 1) Signature of Post occupied authorized director John H. Galea by signatory Director John H. Galea _______________________________________________________________________________ For departmental use only 1171-7386 Gouvernement du Quebec Depose le 1988 02 29 ANNEX A TO ARTICLES OF AMENDMENT OF ----------------------------------- CANADIAN REYNOLDS METALS COMPANY, LIMITED-- ------------------------------------------- SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE ---------------------------------------------- 4. Description of the Company's Share Capital. The authorized share capital of the company shall be unlimited and shall consist of: 1. An unlimited number of Common Shares, Without Par Value ("Common Shares"); 2. An unlimited number of Class A Preferred Shares, $100 Par Value ("Class A Preferred"); 3. An unlimited number of Class B Preferred Shares, $l00 Par Value ("Class B Preferred"); 4. An unlimited number of Class C Preferred Shares, $100 Par Value ("Class C Preferred"); and 5. An unlimited number of Class D Preferred Shares, $100 Par Value ("Class D Preferred"). The said Common Shares and the Class A Preferred, Class B Preferred, Class C Preferred and Class D Preferred (such four classes of preferred shares hereinafter referred to in the aggregate as the "Preferred Shares") shall carry and be subject to the following preferences, priorities, rights, conditions, limitations and restrictions: (1) The holders of each class of the Preferred Shares shall, when and as declared by the Board of Directors, be entitled, out of the funds of the company legally available therefor, to noncumulative dividends at a rate of (a) $10.00 per annum and no more for each share of Class A Preferred, (b) $9.50 per annum and no more for each share of Class B Preferred, (c) $9.00 per annum and no more for each share of Class C Preferred, and (d) $8.75 per annum and no more for each share of Class D Preferred. Such dividends shall be preferential, so that in no event shall any dividend be declared, paid or set apart for payment on the Common Shares in respect of any quarter-annual period (other than a dividend payable solely in Common Shares) unless and until all dividends on all then outstanding Preferred Shares for such quarter shall have been (i) paid or (ii) declared and a sum sufficient for the payment thereof set apart. The holders of the Preferred Shares shall not be entitled to any dividend other than or in excess of the noncumulative dividends at the rates provided for above. No dividends for any quarter-annual period shall be declared, paid or set apart for payment on any class of then outstanding Preferred Shares unless the same proportion of the annual dividend rate respectively applicable to the shares of every class of Preferred Shares at the time outstanding shall likewise be declared, paid or set apart as a dividend in respect of such quarter-annual dividend period. (2) In the event of the voluntary or involuntary liquidation, dissolution or winding up of the company, the holders of the then outstanding Preferred Shares shall be entitled to receive the sum of $100.00 per share, together with all unpaid declared dividends thereon in priority to any distribution to the holders of the then outstanding Common Shares and shall not be entitled to share any further in the distribution of the property or assets of the company. If, on any voluntary or involuntary liquidation, dissolution or winding up of the company, the assets of the company are insufficient to permit full payment to the holders of the then outstanding Preferred Shares as herein provided, then the holders of the then outstanding Preferred Shares shall share ratably in any distribution of assets in proportion to the full amounts to which they would otherwise be respectively entitled. An amalgamation of the company with or into another company or companies shall not be deemed to be a liquidation, dissolution or winding up of the company within the meaning of this Paragraph. (3) The company may, at the option of the Board of Directors of the company, redeem all or, from time to time, any part of the then outstanding Preferred Shares on payment to the holders thereof, for each share to be redeemed, of the amount of $100.00, together with all unpaid declared dividends thereon. Before redeeming any Preferred Shares, the company shall mail to each person who, at the date of such mailing, is a registered holder of shares to be redeemed, notice of the intention of the company to redeem such shares held by such registered holder. Such notice shall be mailed by registered or certified post addressed to the last address of any such holder as it appears on the records of the company or, in the event of the address of any such holder not appearing on the records of the company, then to the last known address of such holder, at least 10 days before the date specified for redemption. Such notice shall set out the class to be redeemed, redemption price, the date on which redemption is to take place and, if only part of the shares held by the person to whom it is ad-dressed is to be redeemed, the number thereof so to be redeemed. On or after the date so specified for redemption, the company shall pay or cause to be paid the redemption price to the registered holders of the shares to be redeemed, on presentation and surrender of the certificates for the shares so called for redemption, duly endorsed in blank, at the head office of the company or at such other place or places as may be specified for redemption in such notice. On and after the date so specified for redemption, the holders of such shares called for redemption shall cease to be entitled to any rights in respect thereof, except to receive the redemption price, without interest, unless payment of the redemption price shall not be made by the company in accordance with the foregoing provisions, in which case the rights of the holders of such shares shall remain unimpaired. On or before the date specified for redemption, the company shall have the right to deposit the redemption price of the shares called for redemption in a special account with a bank or trust company named in the notice of redemption to be paid, without interest, to or to the order of the respective holders of such shares called for redemption upon presentation and surrender of the certificates representing the same, duly endorsed in blank, and, on the date specified for redemption, the shares in respect whereof such deposit shall have been made shall be deemed to have been redeemed and the rights of the several holders thereof, after such date, shall be limited to receiving, out of the moneys so deposited, without interest, the redemption price applicable to their respective shares against presentation and surrender of the certificates representing such shares. (4) The company may at any time or times purchase for cancellation the whole or any part of the Preferred Shares outstanding from time to time pursuant to tenders, or, with the unanimous consent of the holders of all the then outstanding Preferred Shares (or, if only one, two or three classes are involved, by the holders of all then outstanding shares of the involved class or classes), by private contract at the lowest price at which, in the opinion of the Board of Directors, such shares are obtainable but not exceeding the amount of $100.00 per share, together with all unpaid declared dividends thereon. (5) Subject to the provisions of the Companies Act (Quebec), any holder of one or more then outstanding Preferred Shares may require the company to redeem all or any of such shares registered in the name of such holder on the books of the company, by tendering to the company at its head office the share certificate(s), duly endorsed in blank, representing such share(s) which such holder desires to have the company redeem and a written request for redemption specifying (i) the number of shares for which redemption is sought (the "sold shares") and (ii) the business day (the "purchase date") on which such holder desires to have the company redeem the sold shares, which shall be not less than 10 days after the day on which the request is given to the company. After receipt of such share certificate(s) and request the company shall on the purchase date redeem the sold shares by paying to such shareholder an amount of $100 per sold share plus any unpaid declared dividends thereon. Such payment shall be made by check payable at any branch of the company's bank. The sold shares shall be redeemed on the purchase date and thereafter their holders shall cease to be entitled to any rights of shareholders in respect of the sold shares (except to receive the redemption price) unless payment of the redemption price is not made on the purchase date, in which case the rights of the holders of the sold shares shall remain unimpaired. Notwithstanding the foregoing, the company shall not be obliged to purchase the sold shares to the extent that such purchase would be contrary to any applicable law, and if such purchase of any such sold shares would be contrary to any applicable law, the company shall only be obliged to purchase such sold shares to the extent that the monies applied thereto shall be such amount (rounded to the next lower multiple of $100) as would not be contrary to such law, in which case, the company shall pay to each holder of sold shares his pro rata share of the purchase rnonies allocable and shall cause to be issued to such holder a new share certificate representing the sold shares held by such holder and not purchased by the company. (6) The holders of the then outstanding Preferred Shares and the holders of the then outstanding Common Shares shall be entitled to receive notice of and to attend and vote at all meetings of shareholders of the company and each share of the Preferred Shares and Common Shares then outstanding shall confer the right to one (1) vote in person or by proxy at all meetings of shareholders of the company. (7) The company shall not, except by by-law passed by the Board of Directors and confirmed by resolution by a majority of not less than two-thirds of the votes cast by (i) the holders of each class of the then outstanding Preferred Shares and (ii) the holders of the then outstanding Common Shares present or represented at, and voting separately by classes at, a special general meeting of the shareholders called for considering such resolution and upon compliance with any relevant provisions of the laws governing the company, (i) create any other class of shares, (ii) voluntarily liquidate or dissolve the company, (iii) distribute any surplus of the company other than by way of dividend or by purchase or redemption of any Preferred Shares in accordance with the provisions of paragraphs (1), (3), (4) and (5), respectively hereof, or (iv) repeal, amend or otherwise alter any of the provisions contained in paragraphs (1) to (6) hereof or in this paragraph (7). EX-4 3 EXHIBIT 4.14 BY-LAWS (consisting of General and Special By-Laws) of SOCIETE D'ALUMINIUM REYNOLDS DU CANADA, LTEE REYNOLDS ALUMINUM COMPANY OF CANADA, LTD. (Incorporated under the Laws of the Province of Quebec) GENERAL BY-LAWS GENERAL BY-LAW NO. 1 ARTICLE I - Shares 1. Share Certificates. Share certificates shall be issued in numerical order, be signed by the Chairman of the Board of Directors, the President or a Vice President who is a director, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and sealed with the corporate seal. 2. Transfers of Shares. Transfers of shares shall be made only upon the register of transfers of the company, 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 Board of Directors may by resolution make reasonable regulations for the transfers of shares. 3. Holders of Record. Registered shareholders only shall be entitled to be treated by the company as the holders in fact of the shares standing in their respective names and the company 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 Quebec. 4. Lost or Destroyed Certificates. In case of loss or destruction of any share certificate 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 company, all as determined either expressly by the Board of Directors or pursuant to general authority granted by them. ARTICLE II - Shareholders' Meetings 1. Place of Meetings. Subject to paragraph 2 of this Article II, unless otherwise prescribed by law or by the articles of the company, meetings of the shareholders shall be held at such place, within or outside Quebec, as the Board of Directors may determine. 2. Annual Meeting. So long as the company has not made a distribution of its securities to the public, the annual meeting of the shareholders of the company, for the election of directors and for the transaction of such other business as may properly come before the meeting, may be held within or outside Quebec at such place as the Board of Directors may from time to time designate. The annual meeting of the shareholders shall be held on the first Friday after April 15th of each year, if not a legal holiday, and if a legal holiday, then on the first business day following, at 10:00 o'clock in the A.M., 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 shareholders be not held as herein prescribed, the election of directors may be held at any meeting of shareholders thereafter called pursuant to the By-Laws of the company. 3. Special Meetings. Special meetings of the shareholders may be called by the Chairman of the Board of Directors, or by the President, or by the Board of Directors, and shall be called at any time by the Board of Directors or, if there is not a quorum in office, the director or directors which remain, upon receipt by the Secretary of the company of a request in writing of shareholders owning not less than one-tenth of the subscribed shares of the company. Such request must state the purpose of the meeting. If such meeting is not called and held within twenty-one days of the date on which the requisition is delivered to the Secretary of the company, any group of shareholders, whether signatories to the requisition or not, who hold in the aggregate not less than one-tenth of the outstanding voting shares of the company, may themselves call the meeting. 4. Notice of Meetings. Written notice of the place, date and hour of the annual and of all special meetings of the shareholders 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 1 of Article VII of these By-Laws not less than ten (10) nor more than sixty (60) days prior to the meeting, to each shareholder of record of the company entitled to vote thereat. Business transacted at all special meetings shall be confined to the purposes stated in the notice. The attendance of a shareholder at a meeting constitutes waiver of notice thereof or of any irregularity in the notice except where he attends for the express purpose of objecting to the holding of the meeting on the grounds that the manner of calling it was irregular. 5. Quorum. A quorum at any annual or special meeting of the shareholders shall consist of shareholders holding a majority of the shares of the company outstanding and entitled to vote thereat, represented either in person or by proxy, except as otherwise specifically provided by law, in the articles of the company or in the By-Laws of the company. Where the company has only one shareholder or only one holder of any class or series of shares, the shareholder present in person or by proxy constitutes a quorum. 6. Adjourned Meetings. If a quorum be not present at a properly called shareholders' meeting, the meeting may be adjourned from time to time by a majority in interest of those present in person or by proxy and entitled to vote thereat. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder 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 shareholders holding the number of shares of stock of the company required by law, the articles of the company or the By-Laws of the company 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 shareholders holding the number of shares of the company required in respect of such other matter or matters. 7. Voting. Unless otherwise prescribed by law or by the articles of the company, and subject to the provisions of Article VI, Section 2 of these By-Laws, each holder of shares of a class which is entitled to vote in any election or on any other questions at any annual or special meeting of the shareholders shall be entitled to one vote, in person or by written proxy, for each share of such class held of record. However, no shareholder in arrears in respect of any call may vote at a shareholders' meeting. Except where, and to the extent that, a different percentage of votes and/or a different exercise of voting power is prescribed by law, the articles of the company or the By-Laws of the company, all elections and other questions shall be decided by the holders of a majority in number of the shares of the company present in person or by proxy and entitled to vote. The votes for directors and the votes upon any question before the meeting shall be cast by such method as the Chairman of the Board of Directors prescribes, provided that any shareholder or proxy may demand a poll in respect of any matter submitted to the vote of the shareholders. In case of an equality of votes, the chairman of the meeting shall not have a second or casting vote in addition to the vote or votes to which he may be entitled as a shareholder. 8. Consents in Writing. Any action which might have been taken by a vote of the shareholders at a meeting thereof may be taken by them without a meeting, without prior notice and without a vote, if a resolution in writing setting forth the action so taken shall be signed by all the holders of outstanding shares entitled to vote at a shareholders' meeting of the company on that resolution. 9. Irregularities and Omissions. Any irregularities affecting the notice of meeting or its expedition, the involuntary omission to give any such notice or the fact that such a notice has not been received by a shareholder, shall not affect in any manner the validity of the meeting of shareholders. Furthermore, the involuntary omission of the general nature of an item of business which should have been mentioned in the notice of the meeting as being on the agenda of the meeting does not prevent such item of business from being considered and voted upon at the meeting, unless a shareholder suffers prejudice or his interests are injured as a result. A certificate signed by the Secretary or any other duly authorized officer of the company or any registrar or transfer agent for shares of the company shall constitute conclusive evidence of the expedition of a notice of meeting to the shareholders and the shareholders shall be bound by such certificate. 10. Participation by Telephone. So long as the company has not made a distribution of its securities to the public, the shareholders may participate and vote at a shareholders' meeting by any means allowing all the participants to communicate with each other if all the shareholders entitled to participate and vote at the meeting consent thereto. ARTICLE III - Board of Directors 1. Number, Term of Office and Powers. The business and affairs of the company shall be under the direction of a Board of Directors, consisting of such minimum and maximum number of persons as may be set out in the articles of the company, the exact number of which shall be fixed from time to time by resolution of the Board of Directors. Until such time as the Board of Directors shall by resolution fix a different number of directors, the Board of Directors shall consist of ten (10) persons. Each director shall be elected for a term running from the date of his election to the next annual meeting of shareholders, but, notwithstanding the expiration of his term, each director shall remain in office until he is re-elected, replaced or removed. Directors need not be shareholders and need not be residents of Canada or Quebec. In addition to the power and authority expressly conferred upon them by the By-Laws and the articles, the Board of Directors may exercise all such powers of the company and do all such lawful acts and things as are not by law or by the articles of the company or by the By-Laws of the company directed or required to be exercised or done by the shareholders. 2. Resignations. Any director may resign at any time by giving written notice of resignation to the Board of Directors, to the Chairman of the Board of Directors or to the Secretary of the company. 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, by the articles of the company or by the By-Laws of the company, all vacancies in the Board of Directors, whether caused by resignation, death, increase in the number of authorized directors or otherwise, may be filled by a majority of the Board of Directors then in office, even though less than a quorum, or by the shareholders at a special meeting. A director thus elected to fill any vacancy shall hold office until he is re-elected, replaced or removed. 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 shareholders, or at such other date, time or place as the Board of 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 Quebec, as the Board of Directors may from time to time by resolution designate. 6. Special Meetings. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board of Directors; or any Vice Chairman of the Board of Directors; or the 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 company or at such office within or outside Quebec 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 shall be given to each director, at least two days before the day on which the meeting is to be held, by personal delivery, mail, telegram, telephone, radio, cable or other comparable means. Such notice shall state the time and place of such meeting, but need not state the purpose thereof unless otherwise required by law. No notice need be given of the annual meeting of the Board of Directors or of regular meetings, provided that, whenever the time or place of such meetings shall be fixed or changed, notice of such action shall be mailed promptly to each director 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 law, by the articles of the company or by the By-Laws of the company, 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. Advisory Committees. Standing or temporary advisory 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 advisory powers as the directors may see fit, subject to such conditions as the directors may prescribe or as may be prescribed by the laws of Quebec. All advisory committees shall consist of two or more directors. The term of office of the members of each advisory 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 an advisory committee may be removed at any time with or without cause by the Board of Directors, and any vacancy in the committee may be filled by the Board of Directors. All advisory committees shall keep regular minutes of their transactions and shall cause them to be recorded in books kept for that purpose in the office of the company, 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 advisory committee may make rules for the conduct of its business. 10. Compensation. Subject to the articles or any unanimous shareholders' agreement, directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees, other compensation and expenses for their services as directors, including, without limitation, services as chairmen or as members of committees of the Board of Directors; provided, however, that nothing herein contained shall be construed to preclude any director from serving the company 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 may be taken without a meeting if all members of the Board of Directors entitled to vote thereon at a meeting thereof sign a resolution in writing setting forth the actions so taken, and the writing or writings are filed with the minutes of proceedings of the Board of Directors. 12. Participation by Conference Telephone. Members of the Board of Directors may participate in a meeting thereof, if all such members consent, 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. 13. Validation. All acts done at any meeting of the directors by any person or persons acting as a director or directors shall, notwithstanding that it be afterwards discovered that there was a defect in the appointment of any such director or directors or person or persons acting as aforesaid, or that they or any of them were disqualified as directors, be as valid as if every such person or persons had been duly appointed and qualified as directors. ARTICLE IV - Officers 1. Officers. The company 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 company 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. 2. Chairman of the Board. The Chairman of the Board of Directors shall preside at all meetings of shareholders and directors, shall be the chief executive officer of the company and, subject to the direction of the Board of Directors, shall have general supervision and management of the business and affairs of the company and shall perform all such duties as are incident to such office or are properly required by the Board of Directors. The Chairman of the Board shall be a director. 3. Vice Chairmen of the Board. A Vice Chairman of the Board of Directors shall perform all such duties as are properly required by the Board of Directors. A Vice Chairman of the Board shall be a director. 4. President. The President shall be the chief operating officer of the company and shall, subject to the direction of the Board of Directors and the Chairman of the Board of Directors, direct and supervise the business and affairs of the company and shall perform all such other duties as are incident to such office or as are properly required by the Board of Directors or the Chairman of the Board of Directors. During the absence or disability of the Chairman of the Board of Directors, or in the event such office remains vacant, the President shall exercise all powers and discharge all the duties of the Chairman of the Board of Directors. The President shall be a director. 5. Executive Vice Presidents and Vice Presidents. Each of the Executive Vice Presidents and other Vice Presidents shall perform such duties as are properly required by the Board of Directors, the Chairman of the Board of Directors or the President. If any Executive Vice President or other Vice President shall be elected and designated the "General Manager" by the Board of Directors, during the absence of the President, he shall, subject to the direction of the Board of Directors, the Chairman of the Board of Directors and the President, direct and supervise the business and affairs of the company and shall perform all such other duties as are incident to such office or as are properly required by the Board of Directors, the Chairman of the Board of Directors, or the President. 6. General Counsel. The General Counsel shall advise the company on legal matters affecting the company 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. Treasurer. The Treasurer shall have the custody of all moneys and securities of the company and shall keep or cause to be kept accurate accounts of all moneys received or payments made in books kept for that purpose. The Treasurer shall deposit or cause to be deposited funds of the company in accordance with Article V, Section 2 of these By-Laws and shall disburse the funds of the company 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. 8. Secretary. The Secretary shall keep the minutes of the meetings of the shareholders and of the Board of Directors, and, when required, the minutes of the meetings of the Executive Committee, 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 company. The Secretary shall have custody of the corporate seal and shall affix and attest such seal to any instrument whose execution under seal shall have been duly authorized and enjoy all other powers incident to the office of Secretary. 9. Secretary - Treasurer. Whenever one person is to hold the offices of Secretary and Treasurer, he may, at the option of the Board of Directors, be elected and designated as the "Secretary-Treasurer," and references to the "Secretary" or to the "Treasurer" shall be deemed to include the "Secretary-Treasurer." 10. Controller. The Controller shall be the chief accounting officer of the company. The Controller shall keep or cause to be kept all books of accounts and accounting records of the company and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the company. The Controller shall prepare or cause to be prepared appropriate financial statements for the company and shall have such other powers and perform such other duties as may be incident to the office of Controller. 11. 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. 12. Term of Office; Vacancies. Each officer shall hold office until the annual meeting of the Board of Directors following the end of the term of the Board by which such officer is elected, except in the case of earlier death, resignation or removal. Vacancies in any office arising from any cause may be filled by the directors at any regular or special meeting. 13. 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. Subject to the provisions of the laws of Quebec, the Board of Directors may from time to time by resolution declare dividends payable to the shareholders according to their respective rights and interests in the company. Dividends may be paid in money or property or by issuing fully paid shares of the company. The Directors may deduct from the dividends payable to a shareholder any amounts owed by the shareholder to the company by virtue of a call or calls or for any other reason. 2. Deposits; Withdrawals; Notes and Other Instruments. The moneys of the company shall be deposited in the name of the company in such banks or trust companies as shall be designated by the Board of Directors or by an officer or assistant officer of the company to whom the Board of Directors has delegated such authority, and shall be drawn out only by persons designated, from time to time, by the Board of Directors or by an officer or assistant officer of this company 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 or assistant officer of this company to whom the Board of Directors has delegated such authority. 3. Fiscal Year. The fiscal year of the company 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 company, except as may be otherwise required by the laws of Quebec (including with respect to the book of the company, which shall be kept at the head office of the company), may be kept within or outside of Quebec at such places as the Board of Directors may from time to time designate. 2. Record Date. The Board of Directors is authorized to fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of shareholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares shall go into effect, or a date in connection with obtaining consent, as a record date for the determination of the shareholders 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 to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital shares, or to give such consent. In such case such shareholders and only such shareholders as shall be shareholders of record on the 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 to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any shares on the register of transfers of the company after any such record date fixed as aforesaid. Any such record date fixed in connection with a meeting of shareholders shall not be less than ten (10) days before the date of such meeting. ARTICLE VII - Notices 1. Notices. Whenever any provision of law or the By-Laws of the company requires notice to be given to any director, officer or shareholder, such notice may be given in writing by mailing the same to such director, officer or shareholder at his or her address as the same appears in the books of the company, unless such shareholder 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. However, any notice given by the company to shareholders, other than notices of annual or special meetings, shall be by registered or certified letter. Such notice by registered or certified letter shall be deemed given at the time such letter would be delivered in the ordinary course of post. This section shall not be deemed to preclude the giving of notice by other means if permitted by law, by the articles of the company, or by the By-Laws of the company. 2. Waivers of Notice. A waiver of any notice in writing, signed by a shareholder, 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 director, officer or shareholder. ARTICLE VIII - Contracts 1. Interested Directors or Officers. No contract or transaction between the company and one or more of its directors or officers, or between the company and any other company, partnership, association, or other organization in which one or more of the directors or officers of the company 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 company is present at or participates in the meeting of the Board of Directors or the Executive Committee thereof which authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (i) The material facts as to the relationship or interest of such person and as to the contract or transaction are disclosed or are known to the Board of Directors or the Executive Committee thereof, and the Board of Directors or Executive Committee in good faith authorizes the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors of the company; 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 Executive Committee; or (ii) The material facts as to the relationship or interest of such person and as to the contract or transaction are disclosed or are known to the shareholders of the company entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders of the company; or (iii) The contract or transaction is fair as to the company as of the time it is authorized, approved or ratified, by the Board of Directors, the Executive Committee thereof, or the shareholders of the company. ARTICLE IX - Seal 1. Seal. The corporate seal of the company shall be circular in form and bear the name of the company and the year of its incorporation. ARTICLE X - Indemnification 1. Indemnification in Third Party Action. Unless and except to the extent prohibited by law, the company shall assume the defense of 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 company) by reason of the fact that such person is or was a director, officer, employee or agent of the company, or is or was serving at the request of the company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, and shall indemnify each such person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding unless such person has committed a grievous offense or personal offense separable from the exercise of his or her duties. With respect to any penal or criminal action or proceeding, the company shall likewise indemnify each such person if he or she had reason to believe his or her conduct was lawful or if they have been freed or acquitted. The termination of any action 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 have reasonable cause to believe that his or her conduct was unlawful. 2. Indemnification in an Action by or in the Right of the Company. The company shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the company 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 company, or is or was serving at the request of the company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, 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 company loses its case and the court so decides. If the company wins its case only in part, the court may determine the amount of the expense the company shall assume. 3. Determination of Indemnification. Any indemnification under Sections 1 and 2 of this Article X (unless ordered by a court) shall be made by the company only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because the person has met or failed to meet, as the case may be, the applicable standard of conduct set forth in such Sections 1 and 2. Such determination shall be made (a) by the Board of Directors 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 shareholders. 4. Advance for Expenses. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the company in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by the company as authorized in this Article X. 5. General Provisions. (a) Any payment of indemnification made pursuant to this Article X shall be reported to the shareholders, except that no such payment need be reported if the person to whom it was made has been fully successful on the merits or otherwise. (b) All expenses incurred in defending a civil or criminal action or proceeding which are advanced by the company under Section 4 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 company exceed the indemnification to which such person is entitled. (c) The company 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 company 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 company. (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 provided by this Article X shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any By-Law, agreement, vote of shareholders 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 - Borrowing of Money by the Company 1. Borrowing. The Board of Directors of the company may from time to time: (a) borrow money upon the credit of the company; (b) issue debentures or other securities of the company, and pledge or sell the same for such sums and at such prices as may be deemed expedient; (c) notwithstanding the provisions of the Civil Code, hypothecate, mortgage or pledge the moveable or immoveable property, present or future, of the company, to secure any such debentures or other securities, or give part only of such guarantee for such purposes and constitute the hypothec, mortgage or pledge above mentioned, by trust deed, in accordance with Sections 28 and 29 of the Special Corporate Powers Act (Chap. P-16), or in any other manner; and (d) hypothecate or mortgage the immoveable property of the company, or pledge or otherwise affect the moveable property, or give all such guarantees, to secure the payment of loans made otherwise than by the issue of debentures, as well as the payment or performance of any other debt, contract or obligation of the company. The limitations and restrictions contained in this section shall not apply to the borrowing of money by the company on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the company. 2. Delegation. The Board of Directors may from time to time delegate to such one or more of the directors and officers of the company as may be designated by the Board of Directors all or any of the powers conferred on the Board of Directors by Article XI, Section 1 hereof or by the laws of Quebec to such extent and in such manner as the Board of Directors shall determine at the time of each such delegation. The powers hereby confirmed by this paragraph and the preceding paragraph shall be deemed to be in supplement to and not in substitution for any other borrowing powers which may otherwise be conferred on the directors or officers of the company independently of such paragraphs. ARTICLE XII - Executive Committee 1. Number; Term of Office; Increase or Decrease; Removal; Vacancies; Resignation. So long as the board of directors shall consist of more than six directors, the Board of Directors may designate and elect from among its members an Executive Committee. The Executive Committee shall be composed of three directors, unless and until the Board of Directors shall fix a different number of members; provided, that the Executive Committee may not be composed of less than three directors. Each member of the Executive Committee shall continue to be a member thereof so long as he shall continue to be a member of the Board of Directors or until his successor is designated and elected, unless, prior to his ceasing to be a director or his successor being designated and elected, he shall be removed from the Executive Committee by the Board of Directors or he shall resign from the Executive Committee. A majority of the Board of Directors then in office, even though less than a quorum, may at any time (i) increase or decrease (to not less than three) the number of members of the Executive Committee, (ii) remove (with or without cause) members of the Executive Committee, and (iii) designate and elect new members of the Executive Committee to replace existing members thereof or to fill vacancies therein, whether caused by death, increase in the number of members, resignation, removal or otherwise. Any member of the Executive Committee may at any time resign therefrom by giving written notice thereof to the Board of Directors, the Chairman of the Board, or the Secretary, and any such resignation shall take effect at the time specified therein, or if a time is not specified therein, then upon receipt thereof. 2. Powers. Subject to the provisions of paragraph 5 of this Article XII, during intervals between meetings of the Board of Directors, the Executive Committee shall have, and may exercise, any and all powers of the Board of Directors, except those powers which by law, by the Articles of the Company, or by any By-Laws of the Company hereafter enacted by the Board of Directors must be exercised only by the Board of Directors. 3. Meetings; Notice; Waiver of Notice. Meetings of the Executive Committee may be called by the Chairman of the Board, any Vice Chairman of the Board, the President, or, upon written request of any member, by the Secretary. Notice of a meeting of the Executive Committee shall be given to each member at least two days before the day on which the meeting is to be held by personal delivery, mail, telegram, radio, cable or other means. The notice shall state the time and place of the meeting and the purpose or purposes for which the meeting has been called. A written waiver of notice signed by a member of the Executive Committee, whether signed before or after a meeting, shall be deemed to satisfy any requirement to give notice of the meeting to such member. 4. Quorum; Adjourned Meetings; Required Vote; Consent in Writing; Participation by Conference Phone. A majority of the Executive Committee as then constituted, but in no event less than two members thereof, 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 the members present may adjourn the meeting from time to time and the meeting may be held as adjourned without further notice provided that a majority of the Executive Committee as then constituted, but in no event less than two members thereof, are present at such adjourned meeting. Unless otherwise specifically required by law, by the Articles of the Company, or by any By-Laws of the Company hereafter enacted by the Board of Directors, the act of a majority of the members of the Executive Committee present at any properly convened meeting at which there is a quorum shall be the act of the Executive Committee. Any action permitted to be taken at any meeting of the Executive Committee may be taken without a meeting if all members thereof entitled to vote at a meeting sign a resolution in writing setting forth the actions so taken, and the writing or writings are filed with the minutes of proceedings of the Executive Committee. If all members of the Executive Committee consent, members thereof may participate in a meeting thereof 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. 5. Validation. All acts done at any meeting of the Executive Committee by any person or persons acting as a member or members thereof shall, notwithstanding that it may subsequently be discovered that there was a defect in the appointment of any such person or persons as a member or members thereof, or that any such person or persons were disqualified as members thereof, be valid as if every such person or persons had been duly designated and elected as members of the Executive Committee. Actions by the Executive Committee need not be approved by the Board of Directors to be valid; however, any action by the Executive Committee shall be subject to rescission or alteration by the Board of Directors; provided, that no rights or actions of or with respect to third parties shall be prejudiced or affected by any such rescission or alteration. ARTICLE XIII - Head Office The company shall maintain a head office in Quebec in the judicial district indicated in its articles. The company may change the address of its head office within the limits of such judicial district by a resolution of its Board of Directors. It may also transfer its head office to another judicial district by amending its articles and such transfer shall have effect as of the date of the amendment to the articles. ARTICLE XIV - Amendments to the By-Laws The Board of Directors may from time to time repeal, amend, or re-enact By-Laws of the company, but every such By-law, (except By-Laws respecting agents, officers and servants of the company, and except such By-Laws which by law require approval or sanction by the shareholders before coming into effect) and every repeal, amendment or re-enactment thereof, unless in the meantime confirmed at a meeting of the shareholders of the company duly called for that purpose, shall have force only until the next annual meeting of shareholders of the company, and in default of confirmation thereat, shall, at and from that time only, cease to be in force. SPECIAL BY-LAWS SPECIAL BY-LAW NO. 1 (originally adopted as By-Law No. 1 at a meeting of the Directors held on September 17, 1982) That: 1. The Company be, and it hereby is, authorized to make an application to the Ministre des Consommateurs, Cooperatives et Institutions Financieres de la Province de Quebec for a Certificate of Continuance continuing the Company under Part 1A of the Companies Act, Quebec. 2. Subject to the issuance of such Certificate of Continuance and without affecting the validity of the incorporation and existence of the Company by and under its Charter, and of any act done thereunder, its Charter is hereby amended by deleting all of the provisions thereof and substituting therefor all provisions set out in the Articles of Continuance, a copy of which has been presented at this meeting and is to be included in the Minutes of this Meeting; and that the Chairman of the Board, the Vice Chairman of the Board and the President of the Company be, and each of them hereby is, authorized to execute and deliver such documents and instruments (including, without limitation, the Articles of Continuance of the Company), and to take and cause to be taken such additional actions, as he deems necessary or desirable to effect the foregoing. SPECIAL BY-LAW NO. 2 (originally adopted as By-Law No. 7 by consent of the Executive Committee of the Board of Directors dated July 18, 1986) 1. THAT the articles of amendment attached hereto, providing for increasing the maximum number of directors from twelve to thirteen which the board of directors may determine, is hereby approved; 2. THAT the Company file the articles of amendment with the Inspecteur general des institutions financieres in order to obtain a certificate of amendment, and that any one of the directors of the Company is hereby authorized to file the said articles of amendment for and on behalf of and in the name of the Company; 3. THAT upon the issuance of the certificate of amendment and without affecting the validity and the existence of the Company by virtue of its certificate of continuance, the articles of continuance are hereby amended by amending section 6 of the articles of continuance in accordance with the provisions of the articles of amendment attached hereto; 4. THAT any one of the directors of the Company is hereby authorized to sign all documents and forms necessary or incidental for the due carrying out of the foregoing; and 5. THAT upon the issuance of the certificate of amendment, the Board of Directors of the Company shall consist of thirteen persons. SPECIAL BY-LAW NO. 3 (originally adopted as By-Law No. 9 by consent of the Directors dated February 19, 1988) 1. THAT the articles of amendment presented at this meeting, amending the share capital to authorize an unlimited number of shares of Class D Preferred Stock, are hereby approved; 2. THAT the Company file articles of amendment with the Inspecteur general des institutions financieres in order to obtain a certificate of amendment amending its capital structure and that any one of the Directors of the Company be and he is hereby authorized to file the said articles of amendment for and on behalf of and in the name of the Company; 3. THAT upon the issuance of the certificate of amendment and without affecting the validity and the existence of the Company by virtue of its certificate of continuance, the articles of continuance be and they are hereby amended by amending Section 4 of the articles of continuance in accordance with the provisions of the articles of amendment approved by the Board of Directors of the Company; and 4. THAT any one of the Directors of the Company be and he is hereby authorized to sign all documents and forms necessary or incidental for the due carrying out of the foregoing. SPECIAL BY-LAW NO. 4 (originally adopted as By-Law No. 10 by consent of the Executive Committee of the Board of Directors dated February 15, 1993) 1. THAT the articles of amendment attached hereto amending Section 5 of the Company's articles of continuance to permit the Company to offer its securities to the public are hereby approved; 2. THAT the Company file articles of amendment with the Inspecteur general des institutions financieres in order to obtain a certificate of amendment amending the limitations on the public offering of the Company's securities set forth in Section 5 of the Company's articles of continuance and that any one of the Directors of the Company be and he is hereby authorized to execute and file the said articles of amendment for and on behalf of and in the name of the Company; 3. THAT upon the issuance of the certificate of amendment and without affecting the validity and the existence of the Company by virtue of its certificate of continuance, the articles of continuance be and they are hereby amended by amending Section 5 of the articles of continuance in accordance with the provisions of the articles of amendment approved by the Executive Committee of the Board of Directors of the Company; and 4. THAT any one of the Directors of the Company be and he is hereby authorized to do all things and sign all documents and forms necessary or incidental for the due carrying out of the foregoing. SPECIAL BY-LAW NO. 5 being a by-law authorizing the Company to file articles of amendment with the Inspecteur general des institutions financieres, in order to obtain a certificate of amendment changing the corporate name of the Company: 1. THAT the Company file articles of amendment with the Inspecteur general des institutions financieres, in order to obtain a certificate of amendment changing its corporate name from "Societe Canadienne de Metaux Reynolds, Limitee-Canadian Reynolds Metals Company, Limited" to "Societe d'Aluminium Reynolds du Canada, Ltee/Reynolds Aluminum Company of Canada, Ltd." effective January 1, 1996; and 2. THAT any one of the directors of the Company be and he/she is hereby authorized to do all things and sign all documents and forms necessary or incidental for the due carrying out of the foregoing. SPECIAL BY-LAW NO. 6 THAT the Company is hereby authorized to enter into and carry out a Plan of Reorganization (the "Plan of Reorganization") among the Company, Southern Graphic Systems, Inc. ("SGS") and Systemes Graphiques Southern-Canada, Ltee-Southern Graphic Systems-Canada, Ltd. ("SGSC"). THAT each of the officers of the Company is hereby authorized to execute and deliver on behalf of the Company the Plan of Reorganization in the form or substantially the form attached hereto, with such changes therein as the executing officer shall deem necessary or advisable. THAT each of the officers of the Company is hereby authorized to sign any and all certificates, agreements, instruments and documents required under Canadian federal or Quebec law relating to an election under Section 85 of the Canadian Income Tax Act. THAT each officer of the Company is hereby authorized to cause the Company to acquire from SGS (i) 100 class A common shares without par value of SGSC and (ii) 4,288 class A preferred shares without par value of SGSC (together, being all of the outstanding shares of SGSC, the "SGSC Shares"), solely in consideration of and exchange for 45,000 Class A Preferred Shares, Cdn. $100 Par Value, of the Company (the "Class A Preferred Shares"). THAT the Board of Directors hereby determines that the SGSC Shares to be acquired by the Company have a fair market value, and are the fair equivalent of cash in the amount, of Cdn. $4,500,000. THAT the Company issue, allot and deliver to SGS the Class A Preferred Shares for the consideration established above. THAT the Class A Preferred Shares when issued, allotted and delivered to SGS for the consideration described above shall be, and shall be deemed to be, fully paid and nonassessable, and the holders of the Class A Preferred Shares shall be subject to no further call or liability with respect thereto. THAT in the event the fair market value of the SGSC Shares to be acquired by the Company pursuant to this resolution shall be determined by final judgment of any competent administrative tribunal or court, or by uncontested decision of any revenue authority, to be other than Cdn. $4,500,000 as of the date such SGSC Shares are exchanged for the Class A Preferred Shares, each officer of the Company is hereby authorized to execute and deliver such documents and instruments, and to take and cause to be taken such additional action, as any such officer deems necessary or desirable to adjust retroactively the stated capital of the Class A Preferred Shares to reflect the valuation so determined, and to make or cause to be made all necessary adjustments, payments or repayments, cancellation or issuance of shares as may be required in order to give effect to such changes as of the date of issuance of the Class A Preferred Shares. THAT each of the officers of the Company is hereby authorized to take any and all such other actions, including without limitation the incurrence and payment of all fees, expenses and other charges, and to execute and deliver any and all agreements, instruments and documents which in the opinion of any of them may be necessary or desirable to achieve the purposes of, or effect the transactions contemplated by, this resolution, the taking of any such action or the execution and delivery of any such agreements, instruments or documents to be conclusive evidence of the authority to take, execute and deliver the same"; and FURTHER RESOLVED, that the amount of $4,500,000 be added to the paid-up share capital account being maintained by the Company for its Class A Preferred Shares. EX-4 4 EXHIBIT 4.15 Quebec CERTIFICAT DE MODIFICATION Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J'atteste par les presentes que la compagnie SOCIETE CANADIENNE DE METAUX REYNOLDS, LTEE et sa version CANADIAN REYNOLDS METALS COMPANY, LTD. a modifie ses statuts le 1ER JANVIER 1996, sous l'autorite de la partie IA de la Loi sur les compagnies, tel qu'indique dans les statuts de modification ci-joints. Deposes au registre le 15 decembre 1995 sous le matricule 1140329104 Gouvernement du Quebec L'Inspecteur general des Alfred Vaillancourt institutions Inspecteur general des institutions financieres par interim financieres [IMAGE OF SEAL OMITTED] APPENDIX 2 (1) The number of its shareholders is limited to fifty (50), exclusive of present or former employees of the Company or of a subsidiary. (2) The directors may, when they deem it expedient: (a) borrow money upon the credit of the Company; (b) issue debentures or other securities of the Company, and pledge or sell the same for such sums and at such prices as may be deemed expedient; (c) hypothecate the immovable and movable property or otherwise affect the movable property of the Company. Quebec CERTIFICAT DE CONSTITUTION Loi sur les compagnies, Partie IA (L.R.Q., chap. C-38) J'atteste par les presentes que la compagnie SYSTEMES GRAPHIQUES SOUTHERN-CANADA, LTEE et sa version SOUTHERN GRAPHIC SYSTEMS-CANADA, LTD. a ete constituee le 31 MARS 1994, sous l'autorite de la partie IA de la Loi sur les compagnies, tel qu'indique dans les statuts de constitution ci-joints. Deposes au registre le 12 avril 1994 sous le matricule 1140329104 Gouvernement du Quebec L'Inspecteur general des Jean Marie Blandchard institutions Inspecteur general des institutions financieres financieres S110S14G01S93MA [IMAGE OF SEAL OMITTED] Gouvernement du Quebec A-110220-J9401 L'Inspecteur general des institutions financieres Form 1 ARTICLES OF INCORPORATION The Companies Act, R.S.Q., c. C-38 Part 1A 1 Corporate name SYSTEMES GRAPHIQUES SOUTHERN-CANADA, LTEE SOUTHERN GRAPHIC SYSTEMS-CANADA, LTD. 2 Quebec judicial district 3 Precise number or 4 Effective date if wherein company is minimum and maximum after filing date setting up its head number of directors office Montreal Minimum: 3 Maximum: 10 N/A 5 Description of share capital The annexed Appendix 1 is incorporated in this form 6 Restrictions (if any) on transfer of shares No shares of the Company shall be transferred without the approval of the directors evidenced by a resolution duly adopted by them 7 Limitations (if any) on company activity None 8 Other provisions The annexed Appendix 2 is incorporated in this form 9 Incorporators Name and surname Address and postal code Signature of each incorporator (if a corporation, give (if a corporation, signature head office address and of authorized person) incorporation act) Bertrand, Maryse 3123 Daulac Road Maryse Bertrand Montreal, Quebec H3Y 2A1 ______________________________________________________________________________ If space is insufficient, attach an appendix in two (2) copies - ------------------------------------------------------------------------------ For departmental use only CA-211(REV.12-93) Gouvernement du Quebec Depose le 31 MARS 1994 L'Inspecteur general des Institutions financieres APPENDIX 1 ---------- Unlimited number of class A common shares without par value; Unlimited number of class B common shares without par value; Unlimited number of class A preferred shares without par value; Unlimited number of class B preferred shares without par value; Unlimited number of class C preferred shares without par value; and Unlimited number of class D preferred shares without par value. I. The class A common shares and the class B common shares shall have attached thereto the following rights, privileges, restrictions and conditions: (a) Each class A common share shall entitle the holder thereof to one (1) vote at all meetings of the shareholders of the Company (except meetings at which only holders of another specified class of shares are entitled to vote pursuant to the provisions hereof or pursuant to the provisions of the Companies Act (hereinafter referred to as the "Act")). The holders of the class B common shares shall not be entitled to receive notice of, nor to attend or vote at meetings of the shareholders of the Company (except as required by the provisions hereof or by the Act). (b) In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or other distribution of assets of the Company among shareholders for the purpose of winding-up its affairs, subject to the rights, privileges, restrictions and conditions attaching to the class A preferred shares, the class B preferred shares, the class C preferred shares, the class D preferred shares and to any other class of shares ranking prior to the class A common shares or the class B common shares, the holders of the class A common shares and the holders of the class B common shares shall be entitled to receive the remaining property of the Company; the class A common shares and the class B common shares shall rank equally with respect to the payment of dividends and to the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among shareholders for the purpose of winding-up its affairs. II. The class A preferred shares shall have attached thereto the following rights, privileges, restrictions and conditions: (a) Each class A preferred share shall entitle the holder thereof to one (1) vote at all meetings of the shareholders of the Company (except meetings at which only holders of another specified class of shares are entitled to vote pursuant to the provisions of the Act). (b) The holders of the class A preferred shares shall be entitled to receive during each month, as and when declared by the board of directors, but always in preference and priority to any payment of dividends on the other shares of the Company, non-cumulative dividends at a fixed rate of one percent (1%) per month calculated on the class A preferred redemption price (as hereinafter in paragraph II. (g) defined) of each such share payable in money, property or by the issue of fully paid shares of any class of the Company. The holders of the class A preferred shares shall not be entitled to any dividend in excess of the dividend hereinbefore provided for. (c) In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or other distribution of assets of the Company among shareholders for the purpose of winding-up its affairs, the holders of the class A preferred shares shall be entitled to receive for each class A preferred share, in preference and priority to any distribution of the property or assets of the Company to the holders of the other shares of the Company, an amount equal to the class A preferred redemption price plus all declared and unpaid dividends thereon, but shall not be entitled to share any further in the distribution of the property or assets of the Company. (d) The Company may, in the manner hereinafter provided, redeem at any time all, or from time to time any part, of the outstanding class A preferred shares on payment for each class A preferred share to be redeemed of the class A preferred redemption price plus all declared and unpaid dividends thereon (in paragraphs II. (e) and (f) called the "redemption price"). (e) Before redeeming any class A preferred shares, the Company shall mail or deliver to each person who, at the date of such mailing or delivery, shall be a registered holder of class A preferred shares to be redeemed, notice of the intention of the Company to redeem such shares held by such registered holder; such notice shall be delivered to, or mailed by ordinary prepaid post addressed to, the last address of such holder as it appears on the records of the Company, or in the event of the address of any such holder not appearing on the records of the Company, then to the last address of such holder known to the Company, at least one (1) day before the date specified for redemption; such notice shall set out the redemption price, the date on which the redemption is to take place and, if part only of the class A preferred shares held by the person to whom it is addressed is to be redeemed, the number thereof so to be redeemed; on or after the date so specified for redemption the Company shall pay or cause to be paid the redemption price to the registered holders of the class A preferred shares to be redeemed on presentation and surrender of the certificates for the class A preferred shares so called for redemption at the registered office of the Company or at such other place or places as may be specified in such notice, and the certificates for such class A preferred shares shall thereupon be cancelled, and the class A preferred shares represented thereby shall thereupon be redeemed; from and after the date specified for redemption in such notice, the holders of the class A preferred shares called for redemption shall cease to be entitled to dividends in respect of such shares and shall not be entitled to exercise any of the rights of the holders thereof, except the right to receive the redemption price, unless payment of the redemption price shall not be made by the Company in accordance with the foregoing provisions, in which case the rights of the holders of such shares shall remain unaffected; on or before the date specified for redemption, the Company shall have the right to deposit the redemption price of the class A preferred shares called for redemption in a special account with any chartered bank or trust company in Canada named in the notice of redemption, to be paid, without interest, to or to the order of the respective holders of such class A preferred shares called for redemption, upon presentation and surrender of the certificates representing the same and, upon such deposit being made or upon the date specified for redemption, whichever is later, the class A preferred shares in respect whereof such deposit shall have been made, shall be deemed to be redeemed and the rights of the respective holders thereof, after such deposit or after such redemption date, as the case may be, shall be limited to receiving, out of the moneys so deposited, without interest, the redemption price applicable to their respective class A preferred shares against presentation and surrender of the certificates representing such class A preferred shares. If less than all the class A preferred shares are to be redeemed, the shares to be redeemed shall be redeemed pro rata, disregarding fractions, unless the holders of the class A preferred shares unanimously agree to the adoption of another method of selection of the class A preferred shares to be redeemed. If less than all the class A preferred shares represented by any certificate be redeemed, a new certificate for the balance shall be issued. (f) The Company may purchase for cancellation at any time all, or from time to time any part, of the class A preferred shares outstanding, by private contract at any price, with the unanimous consent of the holders of the class A preferred shares then outstanding, or by invitation for tenders addressed to all the holders of the class A preferred shares at the lowest price at which, in the opinion of the directors, such shares are obtainable but not exceeding the redemption price thereof. If less than all the class A preferred shares represented by any certificate be purchased for cancellation, a new certificate for the balance shall be issued. (g) For the purposes of the foregoing paragraphs II. (b), (c) and (d), the "class A preferred redemption price" of each class A preferred share shall be an amount equal to (i) the monetary consideration received by the Company upon the issuance of such share (denominated in the currency in which such consideration was paid to the Company), if such share has been issued for money; or (ii) the fair market value of the consideration received by the Company (including, without limitation, shares of another class of the Company) upon the issuance of such share, if such share has been issued for a consideration other than money. Subject to the provisions of the following sub-paragraph, such fair market value is to be determined by the directors on the basis of generally accepted accounting and valuation principles. The fair market value determined as hereinabove provided for shall be subject to revision in accordance with any binding agreement with, or decision by, the appropriate taxation authorities, or any judgment of a court of competent jurisdiction. In the event that any such agreement, decision or judgment shall result in a final determination under the provisions of the appropriate taxation legislation and the amount thereby determined is an amount other than the amount for which such share was originally issued as determined by the directors in accordance with the preceding sub-paragraph, such finally determined amount for the purpose of the appropriate taxation legislation shall then be deemed to be the fair market value of the consideration received by the Company upon the issuance of such class A preferred share. (h) In the event that only part of the amount of the consideration received by the Company for any class A preferred share issued by the Company is added to the issued and paid up capital account for the class of shares of which such class A preferred share forms part, such class A preferred share shall be deemed to have been issued for the full amount of the consideration received, for all purposes of these articles (except only the issued and paid up capital of such shares) including, but without limiting the generality of the foregoing, dividend rights, redemption rights and rights upon liquidation and dissolution. (i) No change to any of the provisions of paragraphs II. (a) to (h) or of this paragraph (i) shall have any force or effect until it has been approved by a majority of not less than two-thirds (2/3) of the votes cast by the holders of the class A preferred shares, voting separately as a class at a meeting of such holders specially called for that purpose, or by a resolution in writing signed by all the holders of the class A preferred shares, in addition to any other approval required by the Act. III. The class B preferred shares shall have attached thereto the following rights, privileges, restrictions and conditions: (a) Subject to the provisions of the Act or as otherwise expressly provided herein, the holders of the class B preferred shares shall not be entitled to receive notice of, nor to attend or vote at meetings of the shareholders of the Company. (b) The holders of the class B preferred shares shall be entitled to receive during each month, as and when declared by the board of directors, but always in preference and priority to any payment of dividends on the class C preferred shares, the class D preferred shares, the class A common shares and the class B common shares or any other shares ranking junior to the class B preferred shares, non-cumulative dividends at a fixed rate of one percent (1%) per month calculated on the class B preferred redemption price (as hereinafter in paragraph III. (g) defined) of each such share payable in money, property or by the issue of fully paid shares of any class of the Company. The holders of the class B preferred shares shall not be entitled to any dividend in excess of the dividend hereinbefore provided for. (c) In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or other distribution of assets of the Company among shareholders for the purpose of winding-up its affairs, the holders of the class B preferred shares shall be entitled to receive for each class B preferred share, in preference and priority to any distribution of the property or assets of the Company to the holders of the class C preferred shares, the class D preferred shares, the class A and the class B common shares or any other shares ranking junior to the class B preferred shares, an amount equal to the class B preferred redemption price plus all declared and unpaid dividends thereon, but shall not be entitled to share any further in the distribution of the property or assets of the Company. (d) The Company may, in the manner hereinafter provided, redeem at any time all, or from time to time any part, of the outstanding class B preferred shares on payment for each class B preferred share to be redeemed of the class B preferred redemption price plus all declared and unpaid dividends thereon (in paragraphs III. (e) and (f) called the "redemption price"). (e) Before redeeming any class B preferred shares, the Company shall mail or deliver to each person who, at the date of such mailing or delivery, shall be a registered holder of class B preferred shares to be redeemed, notice of the intention of the Company to redeem such shares held by such registered holder; such notice shall be delivered to, or mailed by ordinary prepaid post addressed to, the last address of such holder as it appears on the records of the Company, or in the event of the address of any such holder not appearing on the records of the Company, then to the last address of such holder known to the Company, at least one (1) day before the date specified for redemption; such notice shall set out the redemption price, the date on which the redemption is to take place and, if part only of the class B preferred shares held by the person to whom it is addressed is to be redeemed, the number thereof so to be redeemed; on or after the date so specified for redemption the Company shall pay or cause to be paid the redemption price to the registered holders of the class B preferred shares to be redeemed on presentation and surrender of the certificates for the class B preferred shares so called for redemption at the head office of the Company or at such other place or places as may be specified in such notice, and the certificates for such class B preferred shares shall thereupon be cancelled, and the class B preferred shares represented thereby shall thereupon be redeemed; from and after the date specified for redemption in such notice, the holders of the class B preferred shares called for redemption shall cease to be entitled to dividends in respect of such shares and shall not be entitled to exercise any of the rights of the holders thereof, except the right to receive the redemption price, unless payment of the redemption price shall not be made by the Company in accordance with the foregoing provisions, in which case the rights of the holders of such shares shall remain unaffected; on or before the date specified for redemption, the Company shall have the right to deposit the redemption price of the class B preferred shares called for redemption in a special account with any chartered bank or trust company in Canada named in the notice of redemption, to be paid, without interest, to or to the order of the respective holders of such class B preferred shares called for redemption, upon presentation and surrender of the certificates representing the same and, upon such deposit being made or upon the date specified for redemption, whichever is later, the class B preferred shares in respect whereof such deposit shall have been made, shall be deemed to be redeemed and the rights of the respective holders hereof, after such deposit or after such redemption date, as the case may be, shall be limited to receiving, out of the moneys so deposited, without interest, the redemption price applicable to their respective class B preferred shares against presentation and surrender of the certificates representing such class B preferred shares. If less than all the class B preferred shares are to be redeemed, the shares to be redeemed shall be redeemed pro rata, disregarding fractions, unless the holders of the class B preferred shares unanimously agree to the adoption of another method of selection of the class B preferred shares to be redeemed. If less than all the class B preferred shares represented by any certificate be redeemed, a new certificate for the balance shall be issued. (f) The Company may purchase for cancellation at any time all, or from time to time any part, of the class B preferred shares outstanding, by private contract at any price, with the unanimous consent of the holders of the class B preferred shares then outstanding, or by invitation for tenders addressed to all the holders of the class B preferred shares at the lowest price at which, in the opinion of the directors, such shares are obtainable but not exceeding the redemption price thereof. If less than all the class B preferred shares represented by any certificate be purchased for cancellation, a new certificate for the balance shall be issued. (g) For the purposes of the foregoing paragraphs III. (b), (c) and (d), the "class B preferred redemption price" of each class B preferred share shall be an amount equal to (i) the monetary consideration received by the Company upon the issuance of such share (denominated in the currency in which such consideration was paid to the Company), if such share has been issued for money; or (ii) the fair market value of the consideration received by the Company (including, without limitation, shares of another class of the Company) upon the issuance of such share, if such share has been issued for a consideration other than money. Subject to the provisions of the following sub-paragraph, such fair market value is to be determined by the directors on the basis of generally accepted accounting and valuation principles. The fair market value determined as hereinabove provided for shall be subject to revision in accordance with any binding agreement with, or decision by, the appropriate taxation authorities, or any judgment of a court of competent jurisdiction. In the event that any such agreement, decision or judgment shall result in a final determination under the provisions of the appropriate taxation legislation and the amount thereby determined is an amount other than the amount for which such share was originally issued as determined by the directors in accordance with the preceding subparagraph, such finally determined amount for the purpose of the appropriate taxation legislation shall then be deemed to be the fair market value of the consideration received by the Company upon the issuance of such class B preferred share. (h) In the event that only part of the amount of the consideration received by the Company for any class B preferred share issued by the Company is added to the issued and paid up capital account for the class of shares of which such class B preferred share forms part, such class B preferred share shall be deemed to have been issued for the full amount of the consideration received, for all purposes of these articles (except only the issued and paid up capital of such shares) including, but without limiting the generality of the foregoing, dividend rights, redemption rights and rights upon liquidation and dissolution. (i) No change to any of the provisions of paragraphs III. (a) to (h) or of this paragraph (i) shall have any force or effect until a by-law has been approved by a majority of not less than two-thirds (2/3) of the votes cast by the holders of the class B preferred shares, voting separately as a class at a meeting of such holders specially called for that purpose, or by a resolution in writing signed by all the holders of the class B preferred shares, in addition to any other approval required by the Act. IV. The class C preferred shares shall have attached thereto the following rights, privileges, restrictions and conditions: (a) Each class C preferred share shall entitle the holder thereof to one (1) vote at all meetings of the shareholders of the Company (except meetings at which only holders of another specified class of shares are entitled to vote pursuant to the provisions hereof or pursuant to the Act). (b) The holders of the class C preferred shares shall be entitled to receive during each month, as and when declared by the board of directors, but always in preference and priority to any payment of dividends on the class D preferred shares, the class A and the class B common shares or any other shares ranking junior to the class C preferred shares, non-cumulative dividends at a fixed rate of one percent (1%) per month calculated on the class C preferred redemption price (as hereinafter in paragraph IV. (h) defined) of each such share payable in money, property or by the issue of fully paid shares of any class of the Company. The holders of the class C preferred shares shall not be entitled to any dividend in excess of the dividend hereinbefore provided for. (c) In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or other distribution of assets of the Company among shareholders for the purpose of winding-up its affairs, the holders of the class C preferred shares shall be entitled to receive for each class C preferred share, in preference and priority to any distribution of the property or assets of the Company to the holders of the class D preferred shares, the class A and the class B common shares or any other shares ranking junior to the class C preferred shares, an amount equal to the class C preferred redemption price plus all declared and unpaid dividends thereon, but shall not be entitled to share any further in the distribution of the property or assets of the Company. (d) The Company may, in the manner hereinafter provided, redeem at any time all, or from time to time any part, of the outstanding class C preferred shares on payment for each class C preferred share to be redeemed of the class C preferred redemption price plus all declared and unpaid dividends thereon (in paragraphs IV. (e), (f) and (g) called the "redemption price"). (e) Before redeeming any class C preferred shares, the Company shall mail or deliver to each person who, at the date of such mailing or delivery, shall be a registered holder of class C preferred shares to be redeemed, notice of the intention of the Company to redeem such shares held by such registered holder; such notice shall be delivered to, or mailed by ordinary prepaid post addressed to, the last address of such holder as it appears on the records of the Company, or in the event of the address of any such holder not appearing on the records of the Company, then to the last address of such holder known to the Company, at least one (1) day before the date specified for redemption; such notice shall set out the redemption price, the date on which the redemption is to take place and, if part only of the class C preferred shares held by the person to whom it is addressed is to be redeemed, the number thereof so to be redeemed; on or after the date so specified for redemption the Company shall pay or cause to be paid the redemption price to the registered holders of the class C preferred shares to be redeemed on presentation and surrender of the certificates for the class C preferred shares so called for redemption at the head office of the Company or at such other place or places as may be specified in such notice, and the certificates for such class C preferred shares shall thereupon be cancelled, and the class C preferred shares represented thereby shall thereupon be redeemed; from and after the date specified for redemption in such notice, the holders of the class C preferred shares called for redemption shall cease to be entitled to dividends in respect of such shares and shall not be entitled to exercise any of the rights of the holders thereof, except the right to receive the redemption price, unless payment of the redemption price shall not be made by the Company in accordance with the foregoing provisions, in which case the rights of the holders of such shares shall remain unaffected; on or before the date specified for redemption, the Company shall have the right to deposit the redemption price of the class C preferred shares called for redemption in a special account with any chartered bank or trust company in Canada named in the notice of redemption, to be paid, without interest, to or to the order of the respective holders of such class C preferred shares called for redemption, upon presentation and surrender of the certificates representing the same and, upon such deposit being made or upon the date specified for redemption, whichever is later, the class C preferred shares in respect whereof such deposit shall have been made, shall be deemed to be redeemed and the rights of the respective holders thereof, after such deposit or after such redemption date, as the case may be, shall be limited to receiving, out of the moneys so deposited, without interest, the redemption price applicable to their respective class C preferred shares against presentation and surrender of the certificates representing such class C preferred shares. If less than all the class C preferred shares are to be redeemed, the shares to be redeemed shall be redeemed pro rata, disregarding fractions, unless the holders of the class C preferred shares unanimously agree to the adoption of another method of selection of the class C preferred shares to be redeemed. If less than all the class C preferred shares represented by any certificate be redeemed, a new certificate for the balance shall be issued. (f) A holder of class C preferred shares shall be entitled to require the Company to redeem at any time all, or from time to time any part, of the class C preferred shares registered in the name of such holder by tendering to the Company at its head office the share certificate(s) representing the class C preferred shares which the registered holder desires to have the Company redeem together with a request in writing specifying (i) the number of class C preferred shares which the registered holder desires to have redeemed by the Company and (ii) the business day (in this paragraph referred to as the "redemption date") on which the holder desires to have the Company redeem such class C preferred shares, which redemption date shall not be less than five (5) days after the day on which the request in writing is given to the Company. Upon receipt of the share certificate(s) representing the class C preferred shares which the registered holder desires to have the Company redeem together with such a request, the Company shall on, or at its option, before, the redemption date redeem such class C preferred shares by paying to the registered holder thereof, for each share to be redeemed, an amount equal to the redemption price in respect thereof; such payment shall be made by cheque payable at par at any branch of the Company's bankers for the time being in Canada. The said class C preferred shares shall be deemed to be redeemed on the date of payment of the redemption price and from and after such date such class C preferred shares shall cease to be entitled to dividends and the holders thereof shall not be entitled to exercise any of the rights of the holders of class C preferred shares in respect thereof. Notwithstanding the foregoing, the Company shall only be obliged to redeem class C preferred shares so tendered for redemption to the extent that such redemption would not be contrary to any applicable law, and if such redemption of any such class C preferred shares would be contrary to any applicable law, the Company shall only be obliged to redeem such class C preferred shares to the extent that the moneys applied thereto shall be such amount (rounded to the next lower multiple of one hundred dollars ($100.00)) as would not be contrary to such law, in which case the Company shall pay to each holder his pro rata share of the purchase moneys allocable. If less than all the class C preferred shares represented by any certificate be redeemed, a new certificate for the balance shall be issued. (g) The Company may purchase for cancellation at any time all, or from time to time any part, of the class C preferred shares outstanding, by private contract at any price, with the unanimous consent of the holders of the class C preferred shares then outstanding, or by invitation for tenders addressed to all the holders of the class C preferred shares at the lowest price at which, in the opinion of the directors, such shares are obtainable but not exceeding the redemption price thereof. If less than all the class C preferred shares represented by any certificate be purchased for cancellation, a new certificate for the balance shall be issued. (h) For the purposes of the foregoing paragraphs IV. (b), (c) and (d), the "class C preferred redemption price" of each class C preferred share shall be an amount equal to (i) the monetary consideration received by the Company upon the issuance of such share (denominated in the currency in which such consideration was paid to the Company), if such share has been issued for money; or (ii) the fair market value of the consideration received by the Company (including, without limitation, shares of another class of the Company) upon the issuance of such share, if such share has been issued for a consideration other than money. Subject to the provisions of the following sub-paragraph, such fair market value is to be determined by the directors on the basis of generally accepted accounting and valuation principles. The fair market value determined as hereinabove provided for shall be subject to revision in accordance with any binding agreement with, or decision by, the appropriate taxation authorities, or any judgment of a court of competent jurisdiction. In the event that any such agreement, decision or judgment shall result in a final determination under the provisions of the appropriate taxation legislation and the amount thereby determined is an amount other than the amount for which such share was originally issued as determined by the directors in accordance with the preceding sub-paragraph, such finally determined amount for the purpose of the appropriate taxation legislation shall then be deemed to be the fair market value of the consideration received by the Company upon the issuance of such class C preferred share. (i) In the event that only part of the amount of the consideration received by the Company for any class C preferred share issued by the Company is added to the issued and paid up capital account for the class of shares of which such class C preferred share forms part, such class C preferred share shall be deemed to have been issued for the full amount of the consideration received, for all purposes of these articles (except only the issued and paid up capital of such class C preferred shares) including, but without limiting the generality of the foregoing, dividend rights, redemption rights and rights upon liquidation and dissolution. (j) No change to any of the provisions of paragraphs IV. (a) to (i) or of this paragraph (j) shall have any force or effect until a by-law has been approved by a majority of not less than two-thirds (2/3) of the votes cast by the holders of the class C preferred shares, voting separately as a class at a meeting of such holders specially called for that purpose, or by a resolution in writing signed by all the holders of the class C preferred shares, in addition to any other approval required by the Act. V. The class D preferred shares shall have attached thereto the following rights, privileges, restrictions and conditions: (a) Subject to the provisions of the Act or as otherwise expressly provided herein, the holders of the class D preferred shares shall not be entitled to receive notice of, nor to attend or vote at meetings of the shareholders of the Company. (b) The holders of the class D preferred shares shall be entitled to receive during each month, as and when declared by the board of directors, but always in preference and priority to any payment of dividends on the class A and the class B common shares or any other shares ranking junior to the class D preferred shares, non-cumulative dividends at a fixed rate of one percent (1%) per month calculated on the class D preferred redemption price (as hereinafter in paragraph V. (h) defined) of each such share payable in money, property or by the issue of fully paid shares of any class of the Company. The holders of the class D preferred shares shall not be entitled to any dividend in excess of the dividend hereinbefore provided for. (c) In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or other distribution of assets of the Company among shareholders for the purpose of winding-up its affairs, the holders of the class D preferred shares shall be entitled to receive for each class D preferred share, in preference and priority to any distribution of the property or assets of the Company to the holders of the class A and the class B common shares or any other shares ranking junior to the class D preferred shares, an amount equal to the class D preferred redemption price plus all declared and unpaid dividends thereon, but shall not be entitled to share any further in the distribution of the property or assets of the Company. (d) The Company may, in the manner hereinafter provided, redeem at any time all, or from time to time any part, of the outstanding class D preferred shares on payment for each class D preferred share to be redeemed of the class D preferred redemption price plus all declared and unpaid dividends thereon (in paragraphs V. (e), (f) and (g) called the "redemption price"). (e) Before redeeming any class D preferred shares, the Company shall mail or deliver to each person who, at the date of such mailing or delivery, shall be a registered holder of class D preferred shares to be redeemed, notice of the intention of the Company to redeem such shares held by such registered holder; such notice shall be delivered to, or mailed by ordinary prepaid post addressed to, the last address of such holder as it appears on the records of the Company, or in the event of the address of any such holder not appearing on the records of the Company, then to the last address of such holder known to the Company, at least one (1) day before the date specified for redemption; such notice shall set out the redemption price, the date on which the redemption is to take place and, if part only of the class D preferred shares held by the person to whom it is addressed is to be redeemed, the number thereof so to be redeemed; on or after the date so specified for redemption the Company shall pay or cause to be paid the redemption price to the registered holders of the class D preferred shares to be redeemed on presentation and surrender of the certificates for the class D preferred shares so called for redemption at the registered office of the Company or at such other place or places as may be specified in such notice, and the certificates for such class D preferred shares shall thereupon be cancelled, and the class D preferred shares represented thereby shall thereupon be redeemed; from and after the date specified for redemption in such notice, the holders of the class D preferred shares called for redemption shall cease to be entitled to dividends in respect of such shares and shall not be entitled to exercise any of the rights of the holders thereof, except the right to receive the redemption price, unless payment of the redemption price shall not be made by the Company in accordance with the foregoing provisions, in which case the rights of the holders of such shares shall remain unaffected; on or before the date specified for redemption, the Company shall have the right to deposit the redemption price of the class D preferred shares called for redemption in a special account with any chartered bank or trust company in Canada named in the notice of redemption, to be paid, without interest, to or to the order of the respective holders of such class D preferred shares called for redemption, upon presentation and surrender of the certificates representing the same and, upon such deposit being made or upon the date specified for redemption, whichever is later, the class D preferred shares in respect whereof such deposit shall have been made, shall be deemed to be redeemed and the rights of the respective holders thereof, after such deposit or after such redemption date, as the case may be, shall be limited to receiving, out of the moneys so deposited, without interest, the redemption price applicable to their respective class D preferred shares against presentation and surrender of the certificates representing such class D preferred shares. If less than all the class D preferred shares are to be redeemed, the shares to be redeemed shall be redeemed pro rata, disregarding fractions, unless the holders of the class D preferred shares unanimously agree to the adoption of another method of selection of the class D preferred shares to be redeemed. If less than all the class D preferred shares represented by any certificate be redeemed, a new certificate for the balance shall be issued. (f) A holder of class D preferred shares shall be entitled to require the Company to redeem at any time all, or from time to time any part, of the class D preferred shares registered in the name of such holder by tendering to the Company at its head office the share certificate(s) representing the class D preferred shares which the registered holder desires to have the Company redeem together with a request in writing specifying (i) the number of class D preferred shares which the registered holder desires to have redeemed by the Company and (ii) the business day (in this paragraph referred to as the "redemption date") on which the holder desires to have the Company redeem such class D preferred shares, which redemption date shall not be less than five (5) days after the day on which the request in writing is given to the Company. Upon receipt of the share certificate(s) representing the class D preferred shares which the registered holder desires to have the Company redeem together with such a request, the Company shall on, or at its option, before, the redemption date redeem such class D preferred shares by paying to the registered holder thereof, for each share to be redeemed, an amount equal to the redemption price in respect thereof; such payment shall be made by cheque payable at par at any branch of the Company's bankers for the time being in Canada. The said class D preferred shares shall be deemed to be redeemed on the date of payment of the redemption price and from and after such date such class D preferred shares shall cease to be entitled to dividends and the holders thereof shall not be entitled to exercise any of the rights of the holders of class D preferred shares in respect thereof. Notwithstanding the foregoing, the Company shall only be obliged to redeem class D preferred shares so tendered for redemption to the extent that such redemption would not be contrary to any applicable law, and if such redemption of any such class D preferred shares would be contrary to any applicable law, the Company shall only be obliged to redeem such class D preferred shares to the extent that the moneys applied thereto shall be such amount (rounded to the next lower multiple of one hundred dollars ($100.00)) as would not be contrary to such law, in which case the Company shall pay to each holder his pro rata share of the purchase moneys allocable. If less than all the class D preferred shares represented by any certificate be redeemed, a new certificate for the balance shall be issued. (g) The Company may purchase for cancellation at any time all, or from time to time any part, of the class D preferred shares outstanding, by private contract at any price, with the unanimous consent of the holders of the class D preferred shares then outstanding, or by invitation for tenders addressed to all the holders of the class D preferred shares at the lowest price at which, in the opinion of the directors, such shares are obtainable but not exceeding the redemption price thereof. If less than all the class D preferred shares represented by any certificate be purchased for cancellation, a new certificate for the balance shall be issued. (h) For the purposes of the foregoing paragraphs V. (b), (c) and (d), the "class D preferred redemption price" of each class D preferred share shall be an amount equal to (i) the monetary consideration received by the Company upon the issuance of such share (denominated in the currency in which such consideration was paid to the Company), if such share has been issued for money; or (ii) the fair market value of the consideration received by the Company (including, without limitation, shares of another class of the Company) upon the issuance of such share, if such share has been issued for a consideration other than money. Subject to the provisions of the following sub-paragraph, such fair market value is to be determined by the directors on the basis of generally accepted accounting and valuation principles. The fair market value determined as hereinabove provided for shall be subject to revision in accordance with any binding agreement with, or decision by, the appropriate taxation authorities, or any judgment of a court of competent jurisdiction. In the event that any such agreement, decision or judgment shall result in a final determination under the provisions of the appropriate taxation legislation and the amount thereby determined is an amount other than the amount for which such share was originally issued as determined by the directors in accordance with the preceding sub-paragraph, such finally determined amount for the purpose of the appropriate taxation legislation shall then be deemed to be the fair market value of the consideration received by the Company upon the issuance of such class D preferred share. (i) In the event that only part of the amount of the consideration received by the Company for any class D preferred share issued by the Company is added to the issued and paid up capital account for the class of shares of which such class D preferred share forms part, such class D preferred share shall be deemed to have been issued for the full amount of the consideration received, for all purposes of these articles (except only the issued and paid up capital of such shares) including, but without limiting the generality of the foregoing, dividend rights, redemption rights and rights upon liquidation and dissolution. (j) No change to any of the provisions of paragraphs V. (a) to (i) or of this paragraph (j) shall have any force or effect until a by-law has been approved by a majority of not less than two-thirds (2/3) of the votes cast by the holders of the class D preferred shares, voting separately as a class at a meeting of such holders specially called for that purpose, or by a resolution in writing signed by all the holders of the class D preferred shares, in addition to any other approval required by the Act. APPENDIX 2 (1) The number of its shareholders is limited to fifty (50), exclusive of present or former employees of the Company or of a subsidiary. (2) The Company shall not make a distribution to the public of any of its securities. (3) The directors may, when they deem it expedient: (a) borrow money upon the credit of the Company; (b) issue debentures or other securities of the Company, and pledge or sell the same for such sums and at such prices as may be deemed expedient; (c) hypothecate the immovable and movable property or otherwise affect the movable property of the Company. Gouvernement du Quebec A-110220-J9401 L'Inspecteur general des institutions financieres Form 4 NOTICE CONCERNING COMPOSITION OF THE BOARD OF DIRECTORS The Companies Act, R.S.Q., c. C-38 Part 1A 1 Corporate name SYSTEMES GRAPHIQUES SOUTHERN-CANADA, LTEE SOUTHERN GRAPHIC SYSTEMS-CANADA, LTD. 2 Present address of the company: 1420 Sherbrooke Street West, Suite 802 No Street name Montreal Municipality Quebec H3G 1K9 Province Postal code Full residential address Name and surname (including postal code) 3 The directors of the Company are: Christino, Thomas P. 6601 West Broad Street, Richmond, Virginia, U.S.A. 23230 Taylor, Julian H. 6601 West Broad Street, Richmond, Virginia, U.S.A. 23230 Jones, D. Michael 6601 West Broad Street, Richmond, Virginia, U.S.A. 23230 Hammond, T.L. 2929 South Floyd Street, Louisville, Kentucky, U.S.A. 40213 ______________________________________________________________________________ If space is insufficient, attach an appendix in two (2) copies The Company Post occupied Maryse Bertrand by signatory Incorporator (signature) ______________________________________________________________________________ For departmental use only CA214REV.12-93) Gouvernement du Quebec Depose le 31 MARS 1994 L'Inspecteur general des Institutions financieres Gouvernement du Quebec A-110220-J9401 L'Inspecteur general des institutions financieres Form 2 NOTICE OF ADDRESS OF HEAD OFFICE The Companies Act, R.S.Q., c. C-38 Part 1A 1 Corporate name SYSTEMES GRAPHIQUES SOUTHERN-CANADA, LTEE SOUTHERN GRAPHIC SYSTEMS-CANADA, LTD. 2 Notice is hereby given that the address of the head office of the company, within the limits of the judicial district indicated in the articles, is as follows: 1420 Sherbrooke Street West, Suite 802 No Street name Montreal Municipality Quebec H3G 1K9 Province Postal code The Company Post occupied Maryse Bertrand by signatory Incorporator (signature) _______________________________________________________________________________ For departmental use only CA-212(REV.12-93) Gouvernement du Quebec Depose le 31 MARS 1994 L'Inspecteur general des Institutions financieres EX-4 5 EXHIBIT 4.16 SOUTHERN GRAPHIC SYSTEMS-CANADA, LTD. SYSTEMES GRAPHIQUES SOUTHERN-CANADA, LTEE ----------------------------------------- BY-LAW ONE ---------- being the general by-laws of the Company. ARTICLE ONE DEFINITIONS SECTION 1.01 In this by-law and all other by-laws of the Company, unless the context otherwise requires: (a) "Act" means the Companies Act (Quebec) (R.S.Q. 1977, c. C-38), as amended by the Act modifying the Companies Act and other statutory dispositions, S.Q. 1979, c. 31, as from time to time further amended, and every statute that may be substituted therefor and, in the case of such amendment or substitution, any reference in the by-laws of the Company to any provision of the Act shall be read as referring to the amended or substituted provisions therefor; (b) "articles" means the articles of incorporation of the Company attached to the certificate of incorporation dated March 31, 1994, as from time to time amended; (c) "by-law" means this by-law and any other by-law of the Company from time to time in force and effect; (d) words importing the singular number shall include the plural and vice versa; words importing the masculine gender shall include the feminine and neuter genders and vice-versa; words importing persons shall include bodies corporate, corporations, companies, partnerships, syndicates, trusts and any number or aggregate of individuals; (e) the headings used in the by-laws are inserted for reference purposes only and are not to be considered or taken into account in construing the terms or provisions thereof or to be deemed in any way to clarify, modify or explain the effect of any such terms of provisions; and (f) all terms contained in the by-laws and which are defined in the Act shall have the meanings given to such terms in the Act. In the case of any conflict between the Act, the unanimous shareholder agreement, the articles and the by-laws of the Company, the Act shall prevail over the unanimous shareholder agreement, the articles and the by-laws, the unanimous shareholder agreement shall prevail over the articles and the by-laws and the articles shall prevail over the by-laws. ARTICLE TWO HEAD OFFICE SECTION 2.01 The Company shall maintain a head office in Quebec in the judicial district indicated in its articles. The Company may change the address of its head office within the limits of the judicial district indicated in its articles by a resolution of its board of directors. It may also transfer its head office to another judicial district by amending its articles and such transfer shall have effect as of the date of the amendment to the articles. ARTICLE THREE FINANCIAL YEAR SECTION 3.01 The fiscal period of the Company shall terminate on such date in each year as the board of directors may from time to time by resolution determine. ARTICLE FOUR CORPORATE SEAL SECTION 4.01 The Company may have one or more corporate seals which shall be such as the board of directors may by resolution from time to time adopt and change. ARTICLE FIVE DIRECTORS SECTION 5.01 NUMBER AND POWERS. The Company shall be managed by a board of directors consisting of such fixed number, or minimum and maximum number, of directors as may be set out in the articles. SECTION 5.02 QUALIFICATIONS. Subject to any provision to the contrary in the articles, a director of the Company need not be a shareholder of the Company or a resident of Canada or of Quebec. Moreover, any natural person may be a director of the Company, with the exception of a person under the age of eighteen (18) years, an interdicted person, a person of unsound mind who has been declared incapable by a court of another province or another country, and an undischarged bankrupt. SECTION 5.03 FILLING OF VACANCIES. Subject to the Act, if a vacancy occurs in the board of directors, a quorum of the board of directors may appoint a qualified person to fill the vacancy for the remainder of the term of the director giving rise to the vacancy. SECTION 5.04 TERM OF OFFICE. A director's term of office shall commence on the date of the meeting at which he is elected or appointed and shall terminate at the annual meeting next following his election or appointment (unless re- elected) or, if an election of the board of directors is not held at such meeting or if such meeting does not occur, on the date on which his successor is elected or appointed. A director's term of office shall also terminate if he dies or resigns, or is removed or ceases to be qualified to act as a director. SECTION 5.05 VACATION OF OFFICE. The office of a director shall ipso facto be vacated if: (a) he dies; (b) he resigns his office, by notice in writing to the Company, such resignation to be effective immediately upon receipt thereof by the Company unless by its terms it is made effective at a later date; (c) subject to the provisions of the articles, he is removed from office in accordance with the provisions of the Act by a resolution of the shareholders who are entitled to elect directors; or (d) he ceases to be qualified to be a director. SECTION 5.06 ELECTION. Directors shall be elected by the shareholders by ordinary resolution passed on a ballot at a meeting of shareholders entitled to elect directors. A retiring director shall remain in office until the adjournment or termination of the meeting at which his successor has been elected, unless such meeting was called for the purpose of removing him from office as a director, in which case the director so removed shall vacate office forthwith upon the passing of the resolution for his removal. SECTION 5.07 VALIDATION. All acts done at any meeting of the directors by any person or persons acting as a director or directors shall, notwithstanding that it be afterwards discovered that there was a defect in the appointment of any such director or directors or person or persons acting as aforesaid, or that they or any of them were disqualified as directors, be as valid as if every such person or persons had been duly appointed and qualified as directors. SECTION 5.08 PLACE OF MEETING. Meetings of the board of directors shall be held at the head office of the Company or at any other place as the officers or directors convening the meeting may from time to time determine. A meeting of the board of directors may be convened at any time by the chairman of the board of directors, the president, any vice-president, the secretary, any assistant-secretary or by two or more directors (other than any of the foregoing officers). SECTION 5.09 NOTICE. Notice of the time and place for the holding of any such meeting shall be given verbally or delivered or mailed or telegraphed or sent by any other form of transmitted or recorded message to each director at his latest address as shown on the books of the Company not less than two (2) days before the date of the meeting. For the first meeting of the board of directors to be held immediately following the election of directors at an annual or special meeting of the shareholders, no notice of such meeting need be given to the directors in order for the meeting to be duly constituted, provided a quorum of the directors is present. SECTION 5.10 WAIVER OF NOTICE. Notice of any meeting of the board of directors or any irregularity in any meeting or in the notice thereof may be waived by any director in writing (which shall include waiver by telegram, cable or telex) addressed to the Company at its head office; such waiver may be validly given either before or after the meeting to which such waiver relates. The attendance of a director at a meeting of directors constitutes a waiver of notice of the meeting except where a director attends a meeting for the express purpose of objecting to the holding of the meeting on the grounds that the manner of calling the meeting was irregular. SECTION 5.11 PARTICIPATION BY TELEPHONE. A director may, if all the directors of the Company consent, participate in a meeting of the board of directors by such means, particularly by telephone as permits all persons participating in the meeting to hear each other. A director participating in such a meeting by such means shall be deemed to be present at that meeting. SECTION 5.12 ADJOURNMENT. Any meeting of the board of directors may be adjourned from time to time by the chairman of the meeting, with the consent of the meeting, to such time and place as he may fix. No notice of an adjourned meeting need be given to any director. Any adjourned meeting shall be duly constituted if held in accordance with the terms of the adjournment and a quorum is present thereat. The directors who formed a quorum at the original meeting are not required to form the quorum at the adjourned meeting. If there is no quorum present at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment. SECTION 5.13 QUORUM. The directors may, from time to time, fix by resolution the quorum for meetings of directors, but until otherwise fixed, a majority of the directors in office from time to time shall constitute a quorum. Any meeting of directors at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the by-laws of the Company for the time being vested in or exercisable by the directors generally. Where the Company has only one director, that director shall constitute the meeting. SECTION 5.14 VOTING. Questions arising at any meeting of the board of directors shall be decided by a majority of votes cast. In case of an equality of votes, the chairman of the meeting shall not be entitled to a second or casting vote. SECTION 5.15 RESOLUTION IN WRITING IN LIEU OF MEETING. A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or of the executive committee of directors, as the case may be, is as valid as if it had been passed at a meeting of directors or of the executive committee of directors, respectively. A copy of every such resolution shall be kept with the minutes of the proceedings of the board of directors or executive committee of directors. SECTION 5.16 REMUNERATION OF DIRECTORS. Subject to the articles or any unanimous shareholders' agreement, the remuneration to be paid to the directors shall be such as the board of directors shall from time to time by resolution determine and such remuneration shall be in addition to the salary paid to any officer of the Company who is also a member of the board of directors. The directors may also by resolution award special remuneration to any director undertaking any special services on the Company's behalf other than the routine work ordinarily required of a director by the Company. The confirmation of any such resolution or resolutions by the shareholders shall not be required. ARTICLE SIX SUBMISSION OF CONTRACTS OR TRANSACTIONS TO SHAREHOLDERS FOR APPROVAL SECTION 6.01 The board of directors in its discretion may submit any contract, act or transaction for approval, ratification or confirmation at any annual meeting of the shareholders or at any special meeting of the shareholders called for the purpose of considering the same. Any contract, act or transaction that shall be approved, ratified or confirmed by resolution passed by a majority of the votes cast at any such meeting (unless any different or additional requirement is imposed by the Act or by the Company's articles or any other by-law) shall be as valid and as binding upon the Company and upon all the shareholders as though it had been approved, ratified and/or confirmed by every shareholder of the Company. ARTICLE SEVEN OFFICERS SECTION 7.01 APPOINTMENT OF OFFICERS. Subject to any unanimous shareholder agreement, the board of directors, annually or as often as may be required, shall appoint a president, and if they see fit, a chairman of the board and one or more vice-presidents of the Company and may also appoint a secretary, a treasurer and one or more assistant-secretaries and/or one or more assistant- treasurers. Any two or more of such offices may be held by the same person. If the same person holds the offices of secretary and treasurer, he may, but need not, be known as a secretary-treasurer. The board of directors may from time to time designate such other officers and appoint or authorize any one or more of the foregoing officers to appoint such other officers, employees and agents as it shall deem necessary who shall have such authority and shall perform such functions and duties as may from time to time be prescribed by resolution of the board of directors or by the officer or officers appointing such other officers, employees or agents. SECTION 7.02 QUALIFICATIONS. Subject to any contrary provisions herein, none of the officers need be a director or a shareholder of the Company. SECTION 7.03 REMUNERATION AND REMOVAL OF OFFICERS. Subject to any unanimous shareholders' agreement, the remuneration of all officers, employees and agents elected or appointed by the board of directors may be determined from time to time by resolution of the board of directors. The fact that any officer, employee or agent is a director or shareholder of the Company shall not disqualify him from receiving such remuneration as may be so determined. The board of directors may by resolution remove any officer, employee or agent at any time, with or without cause, subject to his rights under any employment contract in force between the Company and himself. SECTION 7.04 DUTIES OF OFFICERS MAY BE DELEGATED. In case of the absence or inability or refusal to act of any officer of the Company or for any other reason that the board of directors may deem sufficient, the board may delegate all or any of the powers of such officer to any other officer or to any director for the time being. SECTION 7.05 CHAIRMAN OF THE BOARD. The board of directors may from time to time appoint a chairman of the board who shall be a director. The chairman shall be the chief executive officer of the Company. The chairman presides, if present, at all meetings of the board of directors and shall have such other powers and duties as may from time to time be assigned to him by the board of directors. SECTION 7.06 PRESIDENT. If no chairman has been appointed, the president shall be the chief executive officer of the Company. If a chairman has been appointed, the president shall be the chief operating officer of the Company. He shall exercise general supervision over the business and affairs of the Company. In the absence of the chairman of the board (if any), the president shall, if present, preside at all meetings of the board of directors and shareholders; he shall sign such contracts, documents or instruments in writing as require his signature and shall have such other powers and shall perform such other duties as may from time to time be assigned to him by resolution of the board of directors or as are incident to his office. SECTION 7.07 VICE-PRESIDENT. The vice-president or, if more than one, the vice-presidents in order of seniority, shall be vested with all the powers and shall perform all the duties of the president in the absence or inability or refusal to act of the president, provided, however, that a vice-president who is not a director shall not preside as chairman at any meeting of directors or shareholders. The vice-president or, if more than one, the vice-presidents, shall sign such contracts, documents or instruments in writing as require his or their signatures and shall also have such other powers and duties as may from time to time be assigned to him or them by resolution of the board of directors. SECTION 7.08 SECRETARY. The secretary (if any), shall give or cause to be given notices for all meetings of the board of directors and shareholders when directed to do so. He shall have charge of the records and of the corporate seal(s), (if any). He shall sign such contracts, documents or instruments in writing as require his signature and shall have such other powers and duties as may from time to time be assigned to him by resolution of the board of directors or as are incident to his office. SECTION 7.09 TREASURER. Subject to the provisions of any resolution of the board of directors, the treasurer (if any) shall have the care and custody of all the funds and securities of the Company and shall deposit the same in the name of the Company in such bank or banks or with such other depositary or depositaries as the board of directors may by resolution direct. He shall prepare, maintain and keep or cause to be kept adequate books of accounts and accounting records. He shall sign such contracts, documents or instruments in writing as require his signature and shall have such other powers and duties as may from time to time be assigned to him by resolution of the board of directors or as are incident to his office. He may be required to give such bonds for the faithful performance of his duties as the board of directors in their uncontrolled discretion may require and no director shall be liable for failure to require any such bond or for the insufficiency of any such bond or for any loss by reason of the failure of the Company to receive any indemnity thereby provided. SECTION 7.10 ASSISTANT-SECRETARY AND ASSISTANT-TREASURER. The assistant- secretary or, if more than one, the assistant-secretaries in order of seniority, and the assistant treasurer or, if more than one, the assistant treasurers in order of seniority, shall respectively perform all the duties of the secretary and treasurer, respectively, in the absence or inability to act of the secretary or treasurer as the case may be. The assistant-secretary or assistant-secretaries, if more than one, and the assistant-treasurer or assistant-treasurers, if more than one, shall sign such contracts, documents or instruments in writing as require his or their signatures respectively and shall have such other powers and duties as may from time to time be assigned to them by resolution of the board of directors. ARTICLE EIGHT INDEMNITIES AND EXCLUSION OF LIABILITY SECTION 8.01 The Company shall assume the defence of its directors and/or officers prosecuted by a third person for acts done in the exercise of their duties and the Company shall pay damages, if any, resulting from those acts, unless the directors and/or officers have committed a grievous offence or a personal offence separable from the exercise of their duties. However, in a penal or criminal proceeding the Company shall assume the payment of the expenses of its directors and/or officers only if they had reasonable grounds to believe that their conduct was in conformity with the law, or if they have been freed or acquitted. The Company shall assume the expenses of its directors and/or officers, if, having prosecuted any or all of them for an act done in the exercise of their duties, it loses its case and the court so decides. The Company shall assume the aforesaid obligations in respect of any person who acted at its request as a director for a corporation of which it is a shareholder or creditor. ARTICLE NINE MEETING OF SHAREHOLDERS SECTION 9.01 ANNUAL MEETING. Subject to the Act, the annual meeting of the shareholders of the Company shall be held on the first Friday after April 15 in each year, or on such date in each year as the board of directors may from time to time by resolution determine, at the head office of the Company or, subject to the provisions of the Act, at any other place as may be specified in the notice convening such meeting, as the directors may by resolution determine. SECTION 9.02 SPECIAL MEETINGS. Other meetings of the shareholders may be convened by order of the chairman of the board, president or a vice-president or by the board of directors, to be held at such time and place as may be specified in a resolution of the board of directors. Special meetings of shareholders shall also be convened by the board of directors or, if there is not a quorum in office, the director or directors which remain, upon receipt by the secretary of the Company of a written requisition, signed by shareholders holding in the aggregate not less than one tenth (1/10) of the subscribed shares of the capital of the Company, stating the business to be transacted at the proposed meeting. If such meeting is not called and held within twenty-one (21) days of the date on which the requisition is delivered to the head office of the Company, any shareholder, whether signatories to the requisition or not, who hold not less than one tenth in the value of the subscribed shares of the capital of the Company, may themselves call the meeting. Notice of any special meeting shall state the business which is to be transacted thereat. SECTION 9.03 PLACE OF MEETINGS. Meetings of shareholders of the Company shall be held at the head office of the Company or at such other place as may be specified in the notice convening such meeting, which place must be located in the province of Quebec in the case of annual meetings of shareholders and meetings of shareholders at which any directors are elected. Notwithstanding the foregoing, the annual shareholders' meeting and any meeting of shareholders at which directors are elected may be held outside the Province of Quebec if the Company has not made distribution to the public of its securities and if its deed of incorporation so provides for it, or failing a provision in the deed to that effect, if all the shareholders entitled to attend the meeting consent. A shareholder who attends meetings held outside Quebec is deemed to have so agreed except when he attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held. SECTION 9.04 NOTICE. A printed, written or typewritten notice stating the day, hour and place of meeting and the general nature of the business to be transacted shall be sent not less than ten (10) days before the meeting, to the shareholders entitled thereto by messenger or by prepaid registered or certified mail to the shareholders entitled to vote at such meeting at their respective addresses, as shown in the books of the Company. If the address of a shareholder is not shown in the books of the Company, the notice may be delivered by messenger or by prepaid registered or certified mail to the address where, in the discretion of the sender, it is most likely to be received by such shareholder. Notice of any meeting of shareholders or any irregularity in any such meeting or in the notice thereof may be waived by any shareholder or by the duly appointed proxy of any shareholder by telegram, cable or telex or any other writing addressed to the Company and any such waiver may be validly given either before or after the meeting to which such waiver relates. The attendance of a shareholder at a meeting constitutes waiver of notice thereof or of any irregularity in the notice except where he attends for the express purpose of objecting to the holding of the meeting on the grounds that the manner of calling it was irregular. SECTION 9.05 VOTING. Voting at a meeting of shareholders shall be by show of hands except where a ballot is demanded by a shareholder entitled to vote at the meeting. A shareholder may demand a ballot either before or after any vote by show of hands. SECTION 9.06 IRREGULARITIES AND OMISSIONS. Any irregularities affecting the notice of meeting or its expedition, the involuntary omission to give any such notice or the fact that such a notice has not been received by a shareholder, shall not affect in any manner the validity of the meeting of shareholders. Furthermore, the involuntary omission of the general nature of an item of business which should have been mentioned in the notice of the meeting as being on the agenda of the meeting, does not prevent such item of business from being considered and voted upon at the meeting, unless a shareholder suffers prejudice or his interests are injured as a result. A certificate signed by the secretary or any other duly authorized officer of the Company or any registrar or transfer agent for shares of the Company, shall constitute conclusive evidence of the expedition of a notice of meeting to the shareholders and the shareholders shall be bound by such certificate. SECTION 9.07 RIGHT TO VOTE. Subject to the articles of the Company, at all shareholders' meetings, each shareholder entitled to vote has as many votes as he holds shares in the Company, and he may, subject to section 9.09 hereof, vote by proxy. However, no shareholder in arrears in respect of any call may vote at a shareholders' meeting. SECTION 9.08 VOTES. Every question submitted to any meeting of shareholders shall be decided in the first instance on a show of hands, unless a poll is demanded. In case of an equality of votes, the chairman of the meeting, both on a show of hands and on a poll, shall not have a second or casting vote in addition to the vote or votes to which he may be entitled as a shareholder. At any meeting, unless a poll is demanded, a declaration by the chairman of the meeting that a resolution has been carried unanimously or by a particular majority or lost or not carried unanimously or by a particular majority, along with an entry to that effect in the minute books of the Company, will constitute prima facia evidence of that fact without proof of the number or proportion of votes recorded in favour of or against such resolution. The chairman of the board, if any, shall preside at every meeting of shareholders of the Company. If there is no chairman of the board or if he is absent, the president of the Company shall preside as chairman and in his absence this right devolves to the vice-president(s) designated for the purpose of the board of directors. If at any meeting, none of the officers mentioned above is present within the first fifteen (15) minutes following the time fixed for the holding of the meeting, the shareholders present shall select from their number a chairman of such meeting. If at any meeting a poll is demanded on the election of a chairman or on the question of adjournment or termination, it shall be taken forthwith without adjournment. If a poll is demanded on any other question or as to the election of directors, it shall be taken in such manner and either at once or later at the meeting or after an adjournment as the chairman of the meeting directs. The result of a poll shall be deemed to be the resolution of the meeting at which the poll was demanded. A demand for a poll may be withdrawn. Where a person holds shares as a personal representative, such person or his proxy is the person entitled to vote at all meetings of shareholders in respect of the shares so held by him. Where two (2) or more persons hold the same share or shares jointly, any one of such persons present at a meeting of shareholders has the right, in the absence of the other or others, to vote in respect of such share or shares, but if more than one of such persons are present or represented by proxy and vote, they shall vote together as one on the share or shares jointly held by them. SECTION 9.09 PROXIES. A shareholder, including a shareholder that is a body corporate, who is entitled to vote at a meeting of shareholders, may by means of a proxy appoint a proxyholder or one or more alternate proxyholders, who are not required to be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy. A proxyholder, holding the right to vote on behalf of an absent shareholder, shall not have the right to vote on show of hands. An instrument appointing a proxyholder shall be in writing and shall be executed by the shareholder or his attorney authorized in writing or, if the shareholder is a body corporate, either under its seal or by an officer or attorney thereof, duly authorized. A proxy expires at the end of one year from the date on which it is issued, unless it expressly specifies some other period. Unless a relevant statute requires another form, an instrument appointing a proxyholder may be in the following form or any similar form: "The undersigned shareholder of ..... hereby appoints ..... of .... or failing him, of ..... as the proxy of the undersigned to attend and act for and on behalf of the undersigned at the meeting of the shareholders of the said Company to be held on the .... day of ...., 19.., and at any adjournment thereof to the same extent and with the same power as if the undersigned were personally present at the said meeting or such adjournment thereof. Dated the day of ...., 19... Signature of shareholder NOTE This form of proxy must be signed by a shareholder or his attorney authorized in writing or, if the shareholder is a body corporate, either under its seal or by an officer or attorney thereof duly authorized." An instrument appointing a proxy carries with it the revocation of any previous instrument appointing another proxy in respect of such meeting. The instrument appointing a proxy may be revoked at any time. The directors may from time to time pass regulations regarding the deposit of instruments appointing a proxy at some place or places other than the place at which a meeting or adjourned meeting of shareholders is to be held. They may as well from time to time pass regulations regarding particulars of such instruments to be telegraphed, cabled, telexed or sent in writing to the Company or any agent of the Company for the purpose of receiving such particulars. These regulations may provide that any instrument appointing a proxyholder so lodged may be voted upon as though the instruments themselves were produced at the meeting or adjourned meeting in case of adjournment, and votes given in accordance with such regulations shall be valid and shall be counted. The chairman of any meeting of shareholders may, subject to regulations, if any, made as aforesaid, in his discretion accept telegraphic, telex, cable or written communication as to the authority of anyone claiming to vote on behalf of and to represent a shareholder notwithstanding that no instrument of proxy conferring such authority has been lodged with the Company. Any votes given in accordance with such communications accepted by a chairman of the meeting shall be counted. SECTION 9.10 ADJOURNMENT. The chairman of the meeting may with the consent of the meeting adjourn any meeting of shareholders from time to time to a fixed time and place. If a meeting of shareholders is adjourned by one or more adjournments for less than thirty (30) days, it is not necessary to give notice of the adjourned meeting other than by announcement at the earlier meeting that is adjourned. If a meeting of shareholders is adjourned by one or more adjournments for an aggregate of thirty (30) days or more, notice of the adjourned meeting shall be given as for an original meeting. Any adjourned meeting shall be duly constituted if held in accordance with the terms of the adjournment and a quorum is present thereat. The persons who formed a quorum at the original meeting are not required to form a quorum at the adjourned meeting. If there is no quorum present at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment. Any business may be brought before or dealt with at any adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling same. SECTION 9.11 QUORUM. Unless otherwise required by the Act, the articles or any other by-law, one or more persons present and holding or representing by proxy at least one (1) issued share of the Company entitled to vote at the meeting shall constitute a quorum of any meeting of shareholders for the choice of a chairman of the meeting and for the adjournment of the meeting. For all other purposes, one or more persons present and holding or representing by proxy not less than fifty-one percent (51%) of the shares entitled to vote at the meeting shall constitute a quorum for such a meeting. SECTION 9.12 RESOLUTION IN WRITING IN LIEU OF MEETING. A resolution in writing signed by all the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of the shareholders. A copy of every such resolution shall be kept with the minutes of the meetings of shareholders. SECTION 9.13 PARTICIPATION BY TELEPHONE. The shareholders of the Company that has not made a distribution to the public of its securities may participate and vote at a shareholders' meeting by any means allowing all the participants to communicate with each other. ARTICLE TEN SHARES SECTION 10.01 ALLOTMENT. The board of directors may from time to time allot or grant options to purchase the whole or any part of the authorized and unissued shares of the capital of the Company, including any shares created by an amendment to the articles increasing or otherwise varying the capital of the Company, to such person or persons or class of persons as the board of directors shall, by resolution, determine. SECTION 10.02 CALLS. The board of directors may, by resolution, make calls upon the shareholders in respect of any moneys unpaid on the whole or any part of shares held or subscribed by them, at the times and in the manner required or permitted by the Act, the articles or the by-laws. A call shall be deemed to have been made at the time when the resolution of the board of directors authorizing such call was passed. If a shareholder fails to pay any call due by him, on or before the day appointed for the payment thereof, he shall be liable to pay interest thereon at the rate of six percent (6%) per annum on the sum due from the date appointed for the payment of such call to the time of actual payment. The directors may, if they think fit, receive from any shareholder willing to advance the same, all or any part of the amounts due on shares held by such shareholder, in addition to amounts then actually owing by virtue of a call or calls on shares held by him. The Company may pay interest at a rate not exceeding eight percent (8%) per annum as may be agreed between the directors and the shareholders who pay such sums in advance, on the moneys so paid in advance, or so much thereof as, from time to time exceeds the amount of the call then made upon the shares in respect of which the advance payment was made. However, if after a call is made and notice thereof is given to the shareholder as prescribed by the resolution of the directors authorizing such call, the call is not paid within such time as the directors prescribe by the said resolution, the directors may, in their discretion, by resolution to that effect and duly recorded in the minutes, summarily declare forfeited such share or shares for which the amount called has not been paid and the same shall thereupon become the property of the Company and may be disposed of as the directors may prescribe. However, notwithstanding such forfeiture, the holder of such shares at the time of the forfeiture shall continue to be liable towards the then creditors of the Company, for the total amounts unpaid on such shares at the time of the forfeiture, less the amounts which are subsequently received by the Company in respect thereof. Instead of declaring any share or shares forfeited, the directors may, if they see fit, enforce payment of all calls, and interest thereon, by action in any court of competent jurisdiction, the whole as prescribed by the Act. SECTION 10.03 SHARE CERTIFICATES. Share certificates (and the form of stock transfer power on the reverse side thereof) shall be in such form and signed by such director(s) and/or officer(s) as the board of directors may from time to time by resolution determine. SECTION 10.04 REGISTRAR AND TRANSFER AGENTS. The board of directors may provide for the registration of securities issued as well as the registration of transfers of securities of the Company in one or several places. The board of directors may from time to time by resolution appoint or remove one or more registrars and/or branch registrars (which may but need not be the same person) to keep the register of securities and/or holders. The board of directors may also appoint one or more transfer agents and/or branch transfer agents (which may but need not be the same person) to keep the registers of securities and/or transfers. All certificates issued after any such appointment representing securities issued by the Company and in respect of the class for which such appointment has been made shall be countersigned by or on behalf of the said registrar transfer agent of such securities as the case may be. SECTION 10.05 TRANSFERS. All transfers of shares of the capital of the Company and all pertinent information relating thereto shall be registered in the register of transfers. Registration of a transfer of shares of the capital of the Company in the register of transfers held at the head office of the Company or elsewhere as provided for in the by-laws, shall constitute a complete and valid transfer. Subject to any provision to the contrary contained in the Act, no transfer of shares of the capital of the Company shall be valid for any purpose until entry thereof is duly made in the register of transfers or in a branch register of transfers. The directors may refuse to register any transfer of shares belonging to any shareholder who is indebted to the Company. A share may not be transferred without the consent of the directors if its price has not been fully paid. No share shall be transferable until all calls payable thereon up to the time of transfer have been fully paid. SECTION 10.06 SURRENDER OF SHARE CERTIFICATES. No transfer of a share issued by the Company shall be recorded or registered unless and until the certificate representing the share to be transferred has been surrendered and cancelled or, if no certificate has been issued by the Company in respect of such share, unless and until a duly executed share transfer power in respect thereof has been presented for registration. SECTION 10.07 REPLACEMENT OF CERTIFICATES. Where a shareholder declares under oath to the Company or the registrar, a branch registrar, transfer agent or a branch transfer agent of the Company, that the share certificate which he held has been destroyed, stolen or lost, and describes the circumstances under which this occurred, and provides, if so required, a bond against any loss for which the Company may be held responsible with regard to the issue of a new certificate, the president, or vice-president, the secretary or the treasurer, may issue a new certificate in replacement of the one which has been destroyed, stolen or lost. ARTICLE ELEVEN DIVIDENDS SECTION 11.01 Subject to the provisions of the Act, the board of directors may from time to time by resolution declare dividends payable to the shareholders according to their respective rights and interests in the Company. Dividends may be paid in money or property or by issuing fully paid shares of the Company. The directors may deduct from the dividends payable to a shareholder any amounts owed by the shareholder to the Company by virtue of a call or calls or for any other reason. As long as the Company pays interest on any amounts received in advance on shares in addition to amounts due by virtue of a call or calls, such amounts shall not be deemed paid on the said shares. Before declaring a dividend or a distribution of profits of the Company, the directors may transfer such sums as they may in their discretion decide to one or several reserve funds which may be used at the discretion of the directors for all purposes for which the profits of the Company may be legally applied. ARTICLE TWELVE NOTICES SECTION 12.01 NOTICE TO JOINT SHAREHOLDERS. If two (2) or more persons are registered as joint holders of any share, any notice shall be addressed to all of such joint holders but notice to one of such persons shall be sufficient notice to all of them. SECTION 12.02 PERSONS BECOMING ENTITLED BY TRANSFER OR OPERATION OF LAW. Every person who by operation of law, transfer or by any other means whatsoever shall become entitled to any shares in the capital of the Company shall be bound by every notice or other document in respect of such shares which prior to his name and address being entered on the records of the Company shall have been duly given to the person or persons from whom he derives his title to such shares. SECTION 12.03 DECEASED SHAREHOLDERS. Any notice or other document delivered or sent by post or left at the address of any shareholder as the same appears in the records of the Company shall, notwithstanding that such shareholder be then deceased and whether or not the Company has notice of his decease, be deemed to have been duly served in respect of the shares held by such shareholder (whether held solely or with other persons) until some other person is entered in his stead in the records of the Company as the holder or one of the holders thereof. Such service shall for all purposes be deemed a sufficient service of such notice or other document on his heirs, executors or administrators and all persons (if any) interested with him in such shares. SECTION 12.04 SIGNATURES TO NOTICES. The signature of any director or officer of the Company to any notice may be written, stamped, typewritten or printed or partly written, stamped, typewritten or printed. SECTION 12.05 COMPUTATION OF TIME. Where a given number of days, notice or notice extending over any period is required to be given under any provisions of the articles or by-laws of the Company, the day of service or posting of the notice shall, unless it is otherwise provided, be counted in such number of days or other period and such notice shall be deemed to have been given or sent on the day of service or posting. A notice or other document served by post by the Company on a shareholder shall be held to be served at the time when the registered or certified letter containing it would be delivered in the ordinary course of post, and to prove the fact and time of service it shall be sufficient to prove that such letter was properly addressed and put into the post office at the time when it was put in and the time required for its delivery in the ordinary course of post. ARTICLE THIRTEEN AUDITOR SECTION 13.01 Subject to sections 123.98 to 123.100 of the Act, an auditor shall be appointed each year by the shareholders at their first meeting and at every subsequent annual meeting. The remuneration of the auditor shall be set by the shareholders or by the directors when this power has been delegated to them by the shareholders. No director or officer of the Company may be appointed as auditor. If the auditor ceases to exercise his functions for any reason before the end of his term, the directors may fill the vacancy and appoint a replacement auditor who shall act as auditor until the annual meeting of shareholders next following his appointment. ARTICLE FOURTEEN CHEQUES, DRAFTS, NOTES SECTION 14.01 All cheques, drafts or orders for the payment of money and all notes, acceptances and bills of exchange shall be signed by such officer or officers or other person or persons, whether or not officers of the Company, and in such manner as the board of directors may from time to time determine by resolution. ARTICLE FIFTEEN CUSTODY OF SECURITIES SECTION 15.01 All securities (including warrants) owned by the Company shall be lodged (in the name of the Company) with a chartered bank or a trust company or in a safety deposit box or with such other financial institution or in such other manner as may be determined from time to time by the proper officers of the Company. ARTICLE SIXTEEN EXECUTION OF CONTRACTS SECTION 16.01 Deeds, contracts, documents, or instruments in writing requiring the signature of the Company may be signed by one (1) person alone who holds the office of chairman of the board, president, vice-president, director, secretary, treasurer, assistant secretary or assistant treasurer or any other office created by by-law or by resolution of the board. In addition, the board of directors may from time to time direct the manner in which the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal (if any) to any contract, document or instrument requiring the same. The term contracts, documents or instruments in writing as used in this by-law shall include deeds, mortgages, hypothecs, charges, conveyances, transfers and assignments of property, real or personal, immoveable or moveable, agreements, releases, receipts and discharges for the payment of money or other obligations, conveyances, transfers and assignment of shares, warrants, bonds, debentures or other securities and all other writings. In particular, one person alone who holds the office of chairman of the board, president, vice-president or director, secretary, treasurer, assistant-secretary or assistant-treasurer or any other office created by by- law or by resolution of the board is hereby authorized to sell, assign, transfer, exchange, convert or convey all shares, bonds, debentures, rights, warrants or other securities owned by or registered in the name of the Company and to sign and execute (under the seal of the Company or otherwise) all assignments, transfers, conveyances, powers of attorney and other instruments that may be necessary for the purpose of selling, assigning, transferring, exchanging, converting or conveying or enforcing or exercising any voting rights in respect of any such shares, bonds, debentures, rights, warrants or other securities. Where the Company has only one director and officer, being the same person, that person may perform the functions and exercise the powers contemplated by this paragraph. The signature or signatures of any officer or director of the Company and/or of any other officer or officers, person or persons appointed as aforesaid by resolution of the board of directors may, if specifically authorized by resolution of the board of directors, be printed, engraved, lithographed or otherwise mechanically reproduced upon all contracts, documents or instruments in writing or bonds, debentures or other securities of the Company executed or issued by or on behalf of the Company. All contracts, documents or instruments in writing or bonds, debentures or other securities of the Company on which the signatures of any of the foregoing officers, directors or persons shall be so reproduced, shall be deemed to have been duly signed by such officers, and as valid to all intents and purposes as if they had been signed manually. These documents are valid notwithstanding that any of the officers, directors or persons whose signature is or are so reproduced may have ceased to hold office at the date of the delivery or issue of such contracts, documents or instruments in writing or bonds, debentures or other securities of the Company. ARTICLE SEVENTEEN DECLARATIONS SECTION 17.01 The chairman of the board, if any, the president of the Company, any vice-president, secretary and/or treasurer, the assistant-secretaries and/or assistant-treasurers, comptroller, accountant, chief clerk, or any other officer or person authorized by an officer of the Company, is authorized and empowered to appear and make answer for the Company to all writs, orders and interrogatories upon articulated facts issued out of any court, to declare for and on behalf of the Company any answer to writs of attachment by way of garnishment in which the Company is garnishee, to make all affidavits and sworn declarations in connection therewith or in connection with any or all judicial proceedings to which the Company is a party, to make demands of abandonment or petitions for winding up or bankruptcy orders upon any debtor of the Company, to attend and vote at all meetings of creditors of any of the Company's debtors and grant proxies in connection therewith, and to generally do all such things in respect thereof as he deems to be in the best interests of the Company. ARTICLE EIGHTEEN AMENDMENTS TO BY-LAWS SECTION 18.01 The board of directors may from time to time repeal, amend, or re-enact the by-laws of the Company, but every such by-law, (except by-laws respecting agents, officers and servants of the Company, and except such by- laws which require, under the provisions of the Act, to be approved or sanctioned by the shareholders before coming into effect) and every repeal, amendment or re-enactment thereof unless in the meantime confirmed at a meeting of the shareholders of the Company duly called for that purpose, shall have force only until the next annual meeting of shareholders of the Company, and in default of confirmation thereat, shall, at and from that time only, cease to be in force. ARTICLE NINETEEN BORROWING OF MONEY BY THE COMPANY SECTION 19.01 The directors of the Company may from time to time: (a) borrow money upon the credit of the Company; (b) issue debentures or other securities of the Company, and pledge or sell the same for such sums and at such prices as may be deemed expedient; (c) hypothecate the immovable and movable property or otherwise affect the movable property of the Company. The limitations and restrictions contained in this section shall not apply to the borrowing of money by the Company on bills of exchange or promissory notes made, drawn, accepted or endorsed by or on behalf of the Company. SECTION 19.02 DELEGATION. The board may from time to time delegate to such one or more of the directors and officers of the Company as may be designated by the board all or any of the powers conferred on the board by section 19.01 or by the Act to such extent and in such manner as the board shall determine at the time of each such delegation. The powers hereby confirmed by this paragraph and the preceding paragraph shall be deemed to be in supplement to and not in substitution for any other borrowing powers which may otherwise be conferred on the directors or officers of the Company independently of such paragraphs. ARTICLE TWENTY SPECIAL POWERS OF DIRECTORS SECTION 20.01 The board of directors of the Company may from time to time purchase, lease or otherwise acquire, alienate, sell, exchange or otherwise dispose of stock, rights, warrants, options, debentures, lands, buildings, and other property, moveable and immoveable, and grant any right or privilege on the property of the Company for such considerations and upon such terms and conditions as they may deem advisable. Without limiting the generality of the foregoing, by this article the directors expressly authorize the Company to utilize, in whole or in part, its funds for the purchase of shares of other companies. ENACTED ON MARCH 31, 1994. CONFIRMED ON MARCH 31, 1994. T. L. Hammond T. L. Hammond President D. Michael Jones D. Michael Jones Secretary BY-LAW TWO being a by-law authorizing the Company to file articles of amendment with the Inspecteur general des institutions financieres, in order to obtain a certificate of amendment changing the corporate name of the Company and deleting the limitations on the public distribution of the Company's securities, such change and deletion to become effective as of January 1, 1996: 1. THAT the Company file the articles of amendment with the Inspecteur general des institutions financieres, in order to obtain a certificate of amendment changing its corporate name from "Systemes Graphiques Southern-Canada, Ltee/Southern Graphic Systems-Canada, Ltd." to "Societe Canadienne de Metaux Reynolds, Ltee/Canadian Reynolds Metals Company, Ltd." and deleting the limitations on the public distribution of the Company's securities set forth in Section 8 of its Articles of Incorporation, such change and deletion to become effective as of January 1, 1996; and 2. THAT any one of the directors of the Company be and he/she is hereby authorized to do all things and sign all documents and forms necessary or incidental for the due carrying out of the foregoing. EX-4 6 EXHIBIT 4.18 FIRST SUPPLEMENTAL INDENTURE FIRST SUPPLEMENTAL INDENTURE, dated as of December 18, 1995, among CANADIAN REYNOLDS METALS COMPANY, LIMITED-SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE, a company duly organized and existing under the laws of the Province of Quebec, Canada (whose name effective January 1, 1996 will be changed to "Reynolds Aluminum Company of Canada, Ltd.-Societe d'Aluminium Reynolds du Canada, Ltee") (the "Company"), REYNOLDS METALS COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (the "Guarantor"), THE BANK OF NEW YORK, a New York banking corporation, as Trustee (the "Trustee"), and SOUTHERN GRAPHIC SYSTEMS-CANADA, LTD./SYSTEMES GRAPHIQUES SOUTHERN-CANADA, LTEE, a company duly organized and existing under the laws of the Province of Quebec, Canada (whose name effective January 1, 1996 will be changed to "Canadian Reynolds Metals Company, Ltd./Societe Canadienne de Metaux Reynolds, Ltee") ("New Company"). WITNESSETH: WHEREAS, the Company, the Guarantor and the Trustee are parties to an Indenture, dated as of April 1, 1993 (the "Indenture"), providing for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness (the "Securities") in one or more series and the guarantees of the Guarantor with respect to the Securities; WHEREAS, at the date hereof, U.S. $285,000,000 aggregate principal amount of Securities designated the "6-5/8% Guaranteed Amortizing Notes due July 15, 2002" (the "Notes") are the only series of Securities issued and outstanding under the Indenture; WHEREAS, the Notes are fully and unconditionally guaranteed as to payment of principal and interest by the Guarantor (the "Guarantees"); WHEREAS, Section 803 of the Indenture permits any Subsidiary of the Guarantor to assume the obligations of the Company with respect to the Securities and under the Indenture, subject to compliance with the conditions set forth in Section 803; WHEREAS, Section 803 of the Indenture further provides that upon any such assumption by a Subsidiary of the Guarantor, such Subsidiary shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture with the same effect as if such Subsidiary had been named as the "Company" in the Indenture, and the Company shall be released from its liability as obligor upon the Securities; WHEREAS, in connection with a restructuring of the Canadian operations of the Guarantor, New Company, being a Subsidiary of the Guarantor, desires to assume the obligations of the Company under the Indenture and with respect to the Notes; WHEREAS, the Company desires to remain as an obligor under the Indenture and with respect to the Notes notwithstanding the assumption by New Company of the Company's obligations thereunder; WHEREAS, the Guarantor desires to confirm that the Guarantees shall apply to New Company's obligations under the Indenture and with respect to the Notes and shall continue to apply to the Company's obligations under the Indenture and with respect to the Notes; and WHEREAS, Section 901 of the Indenture provides that the Company, the Guarantor and the Trustee may, without the consent of any Holders, enter into one or more supplemental indentures to the Indenture, in form satisfactory to the Trustee, (1) to evidence the assumption by any Person of the covenants of the Company in the Indenture and in the Securities and (2) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred upon the Company. NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows: Section 1. Confirmation of the Indenture; Definitions. Except as amended and supplemented hereby, the Indenture is hereby confirmed and reaffirmed in all particulars. Without limiting the generality of the foregoing, all representations, covenants, agreements, obligations and rights contained in the Indenture or herein and all security for the same are and shall be for the equal and proportionate benefit and security of the Holders of all Securities issued and outstanding under the Indenture, as amended hereby. Anything in the Indenture or herein to the contrary notwithstanding, all recitals, definitions and provisions contained in this First Supplemental Indenture shall take precedence over the recitals, definitions and provisions of the Indenture to the extent of any conflict between the two. Unless otherwise defined herein, terms defined in the Indenture and used herein shall have the meanings given to them in the Indenture. Section 2. Amendment to Section 803. The last paragraph of Section 803 of the Indenture is hereby amended and restated in its entirety to read as follows: "Upon any such assumption, the Guarantor or such Subsidiary shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if the Guarantor or such Subsidiary had been named as the "Company" herein, and the Person named as the "Company" in the first paragraph of this instrument or any successor Person which shall theretofore have become such in the manner prescribed in this Article shall be released from its liability as obligor upon the Securities, unless (i) such Person expressly agrees to remain as an obligor upon the Securities and under this Indenture and (ii) the Guarantor expressly confirms that its Guarantees shall continue to apply to such Person's obligations under the Securities and this Indenture notwithstanding the assumption by the Guarantor or such Subsidiary of such Person's obligations." Section 3. Assumption by New Company of Company's Obligations. Pursuant to Section 803 of the Indenture, as amended hereby, New Company, being a Subsidiary of the Guarantor, hereby assumes the obligations of the Company for the due and punctual payment of the principal of (and premium, if any), interest, if any, on and any other payments with respect to the Notes and the performance of every covenant of the Indenture and the Notes on the part of the Company to be performed and observed. Section 4. Agreement by Company to Remain as Obligor. Notwithstanding the assumption by New Company of the Company's obligations under the Notes and the Indenture, as amended hereby, as provided in Section 3 hereof, the Company hereby expressly agrees to remain as an obligor upon the Notes and under the Indenture, as amended hereby, and not to be released from its liability with respect thereto. Section 5. Confirmation by Guarantor of Guarantees. The Guarantor hereby confirms that its Guarantees shall apply to (i) New Company's obligations under the Notes and the Indenture, as amended hereby, and (ii) the Company's obligations under the Notes and the Indenture, as amended hereby, notwithstanding the assumption by New Company of the Company's obligations thereunder. Section 6. Subsidiary; Place of Incorporation. New Company hereby confirms that it is a Subsidiary of the Guarantor and is incorporated under the laws of the Province of Quebec, Canada. Section 7. Payment of Additional Amounts. Without limiting the generality of Section 3 of this First Supplemental Indenture, New Company hereby expressly agrees that Section 1007 of the Indenture, as amended hereby, relating to the payment of Additional Amounts with respect to Canadian non- resident withholding taxes shall apply to and be binding upon it by virtue of its assumption of the obligations of the Company under the Notes and the Indenture, as amended hereby, as though said Section were fully recited herein and with the same effect as if New Company had been named as the "Company" therein. Section 8. Conditions to Effectiveness. This First Supplemental Indenture shall become effective on January 1, 1996, subject to the satisfaction of the following conditions precedent: (i) No Event of Default. Immediately after giving effect to the transactions contemplated herein, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing. (ii) Officers' Certificates and Opinions of Counsel. The Company, the Guarantor and New Company shall each have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel pursuant to Section 803 of the Indenture, as amended hereby, stating that: (I) (a) the assumption by New Company of the obligations of the Company under the Notes and the Indenture, as amended hereby, (b) the agreement of the Company to remain as an obligor upon the Notes and under the Indenture, as amended hereby, (c) the confirmation by the Guarantor that its Guarantees will apply to New Company's obligations under the Notes and the Indenture, as amended hereby, (d) the confirmation by the Guarantor that its Guarantees will continue to apply to the Company's obligations under the Notes and the Indenture, as amended hereby, and (e) this First Supplemental Indenture, comply with Article Eight of the Indenture, as amended hereby; and (II) all conditions precedent set forth in the Indenture, as amended hereby, relating to the foregoing have been complied with; and such Opinions of Counsel shall further state, in accordance with Section 903 of the Indenture, as amended hereby, that the execution of this First Supplemental Indenture is authorized or permitted by the Indenture, as amended hereby. (iii) Board Resolutions. The Company, the Guarantor and New Company shall each have delivered to the Trustee a copy of a Board Resolution, certified by its Secretary or an Assistant Secretary, duly adopted by its Board of Directors, authorizing the transactions contemplated by, and the execution and delivery of, this First Supplemental Indenture. Section 9. Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Section 10. Governing Law. This First Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed, all as of the date first above written. CANADIAN REYNOLDS METALS COMPANY, LIMITED-SOCIETE CANADIENNE DE METAUX REYNOLDS, LIMITEE ATTEST: Brenda A. Hart By Julian H. Taylor Assistant Secretary Title: Vice President, Finance [SEAL] REYNOLDS METALS COMPANY ATTEST: Brenda A. Hart By Julian H. Taylor Assistant Secretary Title: Vice President, Treasurer [SEAL] SOUTHERN GRAPHIC SYSTEMS-CANADA, LTD./SYSTEMES GRAPHIQUES SOUTHERN- CANADA, LTEE ATTEST: Brenda A. Hart By Julian H. Taylor Assistant Secretary Title: Vice President, Treasurer [SEAL] THE BANK OF NEW YORK ATTEST: Marie E. Trimboli By Nancy Gill Nancy Gill Title: Assistant Treasurer [SEAL] COMMONWEALTH OF VIRGINIA ) ) ss: COUNTY OF HENRICO ) On the 18th day of December, 1995, before me personally came Julian H. Taylor to me known, who, being by me duly sworn, did depose and say that he is Vice President, Finance of Canadian Reynolds Metals Company, Limited--Societe Canadienne de Metaux Reynolds, Limitee, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [SEAL] Elizabeth B. Richardson My commission expires September 30, 1997 COMMONWEALTH OF VIRGINIA ) ) ss: COUNTY OF HENRICO ) On the 18th day of December, 1995, before me personally came Julian H. Taylor to me known, who, being by me duly sworn, did depose and say that he is Vice President, Treasurer of Reynolds Metals Company, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [SEAL] Elizabeth B. Richardson My commission expires September 30, 1997 COMMONWEALTH OF VIRGINIA ) ) ss: COUNTY OF HENRICO ) On the 18th day of December, 1995, before me personally came Julian H. Taylor to me known, who, being by me duly sworn, did depose and say that he is Vice President, Treasurer of Southern Graphic Systems-Canada, Ltd./Systemes Graphiques Southern-Canada, Ltee, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [SEAL] Elizabeth B. Richardson My commission expires September 30, 1997 STATE OF NEW YORK ) ) ss: COUNTY OF NEW YORK ) On the 20th day of December, 1995, before me personally came Nancy Gill to me known, who, being by me duly sworn, did depose and say that he is Assistant Treasurer of The Bank of New York, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. [SEAL] William J. Cassels William J. Cassels Notary Public, State of New York No. 01CA5027729 Qualified in Bronx County Certificate Filed in New York County Commission Expires May 16, EX-11 7 EXHIBIT 11 REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In millions, except share data) EARNINGS PER SHARE: For 1995, earnings per share equals net income divided by the weighted-average number of common shares and common share equivalents outstanding during the year. The number of common share equivalents outstanding was based on the assumed conversion of the Company's preferred stock ("PRIDES"). For the purpose of this computation, the conversion rate shown below, which refers to the number of shares of common stock to be received for each share of PRIDES, was based on the average market value of the Company's common stock during the year (also shown below). For 1994, earnings per share equals net income, minus PRIDES dividends, divided by the weighted-average number of common shares outstanding during the year. Common share equivalents relating to the PRIDES were not included in 1994 since their effect would have been anti-dilutive, nor in 1993 since the PRIDES were not issued until January 25, 1994. For 1993, earnings per share equals net income divided by the weighted-average number of common shares outstanding during the year.
YEARS ENDED DECEMBER 31 - ----------------------------------------------- 1995 1994 1993 - ----------------------------------------------- Weighted-average shares outstanding: Common shares 63,051,000 61,756,000 59,850,000 Common share equivalents 9,704,000 - - - ----------------------------------------------- Total 72,755,000 61,756,000 59,850,000 =============================================== Net income (loss) $389 $122 $(322) Less preferred stock dividends - 34 - - - ----------------------------------------------- $389 $88 $(322) =============================================== Earnings per share $5.35 $1.42 $(5.38) =============================================== Conversion rate 0.88 - - - Average market value of common stock $53.56 - - -
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 year. 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, was anti-dilutive in 1994 and was not applicable in 1993. The difference between the number of common share equivalents for the years ended December 31, 1995 and 1994 is due to the PRIDES having been issued on January 25, 1994. YEARS ENDED DECEMBER 31 - ------------------------------------------------ 1995 1994 1993 - ------------------------------------------------ Weighted-average shares outstanding: Common shares 63,051,000 61,756,000 59,850,000 Common share equivalents 11,000,000 10,277,000 - - ------------------------------------------------ Total 74,051,000 72,033,000 59,850,000 ================================================ Net income (loss) $389 $122 $(322) ================================================ Earnings per share (fully diluted) $5.26 $1.69 $(5.38) ================================================ EX-21 8 EXHIBIT 21 PARENTS AND SUBSIDIARIES (A) Reynolds Metals Company has no parents. (B) Set forth below is a list of certain of the subsidiaries and associated companies of Reynolds Metals Company: Place of Incorporation Or Organization ------------ Aluminerie de Becancour Inc. Quebec * Aluminio Reynolds de Venezuela, S. A. Venezuela Aluminium Oxid Stade Gesellschaft mit beschrankter Haftung Germany * Canadian Reynolds Metals Company, Ltd./Societe Canadienne de Metaux Reynolds, Ltee Quebec * El Campo Aluminum Company Delaware Hamburger Aluminium-Werk Gesellschaft mit beschrankter Haftung Germany * Industria Navarra del Aluminio, S. A. Spain * Latas de Aluminio Reynolds, Inc. Delaware Latas de Aluminio, S. A. Brazil Manicouagan Power Company - La Compagnie Hydroelectrique Manicouagan Quebec * Mt. Vernon Plastics Corporation Delaware Pechiney Reynolds Quebec, Inc. Nebraska * Presidential Development Corporation New York * RAMCO Manufacturing Company Delaware * RB Sales Company, Ltd. Delaware * Reynolds Aluminium Deutschland, Inc. Delaware * Reynolds Aluminium Deutschland Internationale Vertriebsgesellschaft mbH Germany * Reynolds Aluminium France, S.A. France * Reynolds Aluminium Holland B. V. The Netherlands * Reynolds Aluminum Company of Canada, Ltd./Societe D'Aluminium Reynolds Du Canada, Ltee Quebec * Reynolds Australia Alumina, Ltd. Delaware * Reynolds Becancour, Inc. Delaware * Reynolds Consumer Europe, S. A./N.V. Belgium * Reynolds Consumer Products, Inc. Delaware * Reynolds (Europe) Limited Delaware * Reynolds International Holdings, Inc. Delaware * Reynolds International, Inc. Delaware * Reynolds International (Panama) Inc. Panama * Reynolds Italy Holding, S.p.A Italy * Reynolds Wheels-Holding, S.p.A. Italy * Reywest Development Corporation Arizona * RMC Delaware, Inc. Delaware * RMC Properties, Ltd. Delaware * RMC Texas, Inc. Delaware * RMCC Company Delaware * Reynolds Metals Development Company Delaware * Reynolds Metals Foreign Sales Corporation Barbados * Saint George Insurance Company Vermont * Southeast Vinyl Company Delaware * Southern Graphic Systems - Canada, Ltd./Systemes Graphiques Southern - Canada, Ltee Quebec * Southern Graphic Systems, Inc. Kentucky * Southern Reclamation Company, Inc. Alabama * Wilson Engraving Company, Inc. Texas The names of a number of subsidiaries and associated companies have been omitted because considered in the aggregate they would not constitute a significant subsidiary. * Consolidated subsidiaries EX-23 9 EXHIBIT 23 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in the: 1. Registration Statement (Form S-8 No. 2-76789) pertaining to the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; 2. Registration Statement (Form S-8 No. 33-13822) pertaining to the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; 3. Registration Statement (Form S-8 No. 33-44400) pertaining to the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; 4. Registration Statement (Form S-8 No. 33-20498) pertaining to the Reynolds Metals Company Savings and Investment Plan for Salaried Employees; 5. Registration Statement (Form S-3 No. 33-43443) pertaining to the shelf registration of debt securities of Reynolds Metals Company; 6. Registration Statement (Form S-8 No. 33-66032) pertaining to the Reynolds Metals Company Savings Plan for Hourly Employees; 7. Registration Statement (Form S-3 No. 33-51153) pertaining to the offer and resale of shares of Reynolds Metals Company Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust; 8. Registration Statement (Form S-8 No. 33-53847) pertaining to the Employees Savings Plan; 9. Registration Statement (Form S-8 No. 33-53851) pertaining to the Reynolds Metals Company Restricted Stock Plan for Outside Directors; 10. Registration Statement (Form S-3 No. 33-59168) pertaining to the registration of debt securities of Canadian Reynolds Metals Company Ltd.; 11. Registration Statement (Form S-3 No. 33-51631) pertaining to the registration of convertible preferred stock of Reynolds Metals Company; and 12. Registration Statement (Form S-8 No. 33-00929) pertaining to the Reynolds Metals Company Performance Incentive Plan, and in the related prospectuses of our report dated February 16, 1996, with respect to the consolidated financial statements of Reynolds Metals Company included in this Annual Report (Form 10-K) for the year ended December 31, 1995. Ernst & Young LLP Richmond, Virginia March 1, 1996 EX-24 10 EXHIBIT 24 1. Powers of Attorney from the following persons are attached: Patricia C. Barron William O. Bourke John R. Hall Robert L. Hintz William H. Joyce Mylle Bell Mangum D. Larry Moore James M. Ringler Robert J. Vlasic Joe B. Wyatt POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for her and in her name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. Patricia C. Barron Patricia C. Barron POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. William O. Bourke William O. Bourke POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. John R. Hall John R. Hall POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. Robert L. Hintz Robert L. Hintz POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. William H. Joyce William H. Joyce POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for her and in her name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. Mylle Bell Mangum Mylle Bell Mangum POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. D. Larry Moore D. Larry Moore POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. James M. Ringler James M. Ringler POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 17th day of April, 1996. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. Robert J. Vlasic Robert J. Vlasic POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints D. Michael Jones and Brenda A. Hart, or either of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including without limitation in any capacity on behalf of Reynolds Metals Company (the "Company")), to (i) Sign the Annual Report on Form 10-K of the Company for the year ended December 31, 1995 and any and all amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, if any, with the Securities and Exchange Commission (the "SEC"), and to take all such other action which they or either of them may consider necessary or desirable in connection therewith, all in accordance with the Securities Exchange Act of 1934, as amended; and (ii) Sign any and all Registration Statements on Form S-8, or on such other form as may be appropriate, for registration of up to 2,000,000 shares of the Company's common stock, without par value (the "Common Stock"), to be offered and sold under the Reynolds Metals Company 1996 Nonqualified Stock Option Plan, and any and all post-effective amendments to such Registration Statements, and to file the same, with all exhibits thereto and documents in connection therewith, with the SEC; and (iii) Sign any and all post-effective amendments to the Company's Registration Statements relating to (a) the offer and sale of interests in the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and an indefinite number of shares of Common Stock in connection therewith; (b) the offer and sale of up to 900,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Reynolds Metals Company Savings Plan for Hourly Employees; (c) the offer and sale of up to 50,000 shares of Common Stock together with an indeterminate amount of interests to be offered and sold in connection therewith under the Employees Savings Plan; (d) the offer and sale of 1,200,000 shares of Common Stock under the Reynolds Metals Company 1982 Nonqualified Stock Option Plan; (e) the offer and sale of 3,000,000 shares of Common Stock under the Reynolds Metals Company 1987 Nonqualified Stock Option Plan; (f) the offer and sale of 3,250,000 shares of Common Stock under the Reynolds Metals Company 1992 Nonqualified Stock Option Plan; and (g) the offer and sale of 30,000 shares of Common Stock under the Reynolds Metals Company Restricted Stock Plan for Outside Directors; and to file the same, with all exhibits thereto, and all documents in connection therewith, with the SEC; and (iv) Sign any and all Registration Statements on Form S-3, or on such other form as may be appropriate, for registration of the shares of Common Stock and Series A Junior Participating Preferred Stock (without par value) of the Company, issuable upon exercise of Rights (as defined in the Rights Agreement between the Company and The Chase Manhattan Bank, N.A., dated as of November 23, 1987, as amended from time to time) and any and all amendments (including post-effective amendments) to such Registration Statements, and to file the same, with all exhibits thereto, and all preliminary prospectuses, prospectuses, prospectus supplements and documents in connection therewith, with the SEC; and (v) Sign any and all post-effective amendments to the Company's Registration Statements relating to the offer and sale of up to $1,650,000,000 principal amount of unsecured debt securities of the Company, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; and (vi) Sign any and all post-effective amendments to the Company's Registration Statement relating to the offer and resale from time to time of up to 3,000,000 shares of Common Stock by the Trustee of the Reynolds Metals Company Pension Plans Master Trust, and to file the same, with all exhibits thereto, and all prospectuses, prospectus supplements, pricing supplements and documents in connection therewith, with the SEC; granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall expire on the 28th day of February, 1997. IN WITNESS WHEREOF, the undersigned has executed and delivered this Power of Attorney on the 16th day of February, 1996. Joe B. Wyatt Joe B. Wyatt EX-27 11
5 This schedule contains summary financial information extracted from the Reynolds Metals Company Consolidated Balance Sheet for December 31, 1995 and Consolidated Statement of Income and Retained Earnings for the Year Ended December 31, 1995 and is qualified in its entirety by reference to such financial statements. 1000000 12-MOS DEC-31-1995 DEC-31-1995 39 00 909 20 891 2014 6600 3377 7740 1367 1853 0 505 941 1171 7740 7213 7252 5772 6083 0 0 172 548 159 389 0 0 0 389 5.35 0
-----END PRIVACY-ENHANCED MESSAGE-----