-----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, E/Z+DTs21ph2X6QuwDxiFrcMIQlNP4xs8NtgDXcUwyHF1WHI01sQT20TTCAzxwfV 2TJcaH2jGM0NUYSNt2qClQ== 0000083604-96-000011.txt : 19960515 0000083604-96-000011.hdr.sgml : 19960515 ACCESSION NUMBER: 0000083604-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REYNOLDS METALS CO CENTRAL INDEX KEY: 0000083604 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY PRODUCTION OF ALUMINUM [3334] IRS NUMBER: 540355135 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01430 FILM NUMBER: 96563892 BUSINESS ADDRESS: STREET 1: 6601 W BROAD ST STREET 2: PO BOX 27003 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8042812000 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-1430 REYNOLDS METALS COMPANY A Delaware Corporation (I.R.S. Employer Identification No. 54-0355135) 6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003 Telephone Number (804) 281-2000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ As of April 30, 1996, the Registrant had 63,670,434 shares of Common Stock, no par value, outstanding and entitled to vote. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS -------------------- CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) - -------------------------------------------------------------------------------------------------- Reynolds Metals Company
Quarter ended March 31 - -------------------------------------------------------------------------------------------------- (In millions, except per share amounts) 1996 1995 - -------------------------------------------------------------------------------------------------- Revenues Net sales $1,662 $1,651 Equity, interest and other income 13 10 - -------------------------------------------------------------------------------------------------- 1,675 1,661 - -------------------------------------------------------------------------------------------------- Costs and expenses Cost of products sold 1,380 1,319 Selling, administrative and general expenses 111 104 Provision for depreciation and amortization 80 76 Interest - principally on long-term obligations 42 43 Operational restructuring costs 37 - - -------------------------------------------------------------------------------------------------- 1,650 1,542 - -------------------------------------------------------------------------------------------------- Income before income taxes and cumulative effect of accounting change 25 119 Taxes on income 8 37 - -------------------------------------------------------------------------------------------------- Income before cumulative effect of accounting change 17 82 Cumulative effect of accounting change (15) - - -------------------------------------------------------------------------------------------------- Net income 2 82 Preferred stock dividends 9 9 - -------------------------------------------------------------------------------------------------- Net income (loss) available to common stockholders ($ 7) $ 73 ================================================================================================== Earnings per share Average shares outstanding 64 72 Income before cumulative effect of accounting change $0.12 $1.13 Cumulative effect of accounting change (0.24) - - -------------------------------------------------------------------------------------------------- Net income (loss) ($0.12) $1.13 ================================================================================================== Cash dividends per common share $0.35 $0.25 - --------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) - -------------------------------------------------------------------------------------------------- Reynolds Metals Company
March 31 December 31 - -------------------------------------------------------------------------------------------------- (In millions) 1996 1995 - -------------------------------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents $ 37 $ 39 Receivables, less allowances of $20 (1995 - $20) 1,066 1,043 Inventories 962 891 Prepaid expenses 49 41 - -------------------------------------------------------------------------------------------------- Total current assets 2,114 2,014 Unincorporated joint ventures and associated companies 1,284 1,286 Property, plant and equipment 6,640 6,600 Less allowances for depreciation and amortization 3,415 3,377 - -------------------------------------------------------------------------------------------------- 3,225 3,223 Deferred taxes and other assets 1,221 1,217 - -------------------------------------------------------------------------------------------------- Total assets $7,844 $7,740 ================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable, accrued and other liabilities $1,089 $1,155 Short-term borrowings 308 111 Long-term debt 116 101 - -------------------------------------------------------------------------------------------------- Total current liabilities 1,513 1,367 Long-term debt 1,839 1,853 Postretirement benefits 1,232 1,213 Environmental, deferred taxes and other liabilities 676 690 Stockholders' equity Preferred stock 505 505 Common stock 942 941 Retained earnings 1,227 1,256 Cumulative currency translation adjustments (27) (22) Pension liability adjustment (63) (63) - -------------------------------------------------------------------------------------------------- Total stockholders' equity 2,584 2,617 - -------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $7,844 $7,740 ==================================================================================================
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) - -------------------------------------------------------------------------------------------------- Reynolds Metals Company
Three Months Ended March 31 - -------------------------------------------------------------------------------------------------- (In millions) 1996 1995 - -------------------------------------------------------------------------------------------------- Operating activities Net income $ 2 $ 82 Adjustments to reconcile to net cash used in operating activities: Depreciation and amortization 80 76 Operational restructuring costs 37 - Cumulative effect of accounting change 15 - Changes in operating assets and liabilities: Accounts payable, accrued and other liabilities (56) (109) Receivables (28) (111) Inventories (78) (161) Other (53) (23) - -------------------------------------------------------------------------------------------------- Net cash used in operating activities ( 81) (246) Investing activities Capital investments: Operational (45) (42) Strategic (51) (43) Investments (2) - Proceeds from sale of assets - 28 Maturities of investments in debt securities - 36 Other investing activities - net 7 5 - -------------------------------------------------------------------------------------------------- Net cash used in investing activities ( 91) ( 16) Financing activities Increase in borrowings (principally short-term) 201 17 Cash dividends paid (31) (25) Net cash provided by (used in) financing activities 170 ( 8) Cash and cash equivalents Net decrease ( 2) (270) At beginning of period 39 308 - -------------------------------------------------------------------------------------------------- At end of period $ 37 $ 38 ================================================================================================== /TABLE REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Quarters Ended March 31, 1996 and 1995 Note A - Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim period of 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1995. Note B - Operational Restructuring Costs In the first quarter of 1996, the Company recorded operational restructuring costs of $37 million, which relate principally to employee termination costs associated with the planned closing of the Company's aluminum beverage can plant located in Houston, Texas. The facility's 1.4-billion-can annual capacity was determined to be in excess of the Company's domestic customer needs due to productivity gains within the Company's can-making system and slower overall growth in the domestic demand for cans. The Company intends to transfer some equipment to other of its domestic and international can operations and sell the plant and property. Note C - Cumulative Effect of Accounting Change In the first quarter of 1996, the Company adopted Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of ("SFAS No. 121"). The Company recognized an after-tax loss of $15 million for the cumulative effect of adopting SFAS No. 121. The loss was for the impairment of assets held for sale, principally undeveloped land. Note D - Earnings per share In the first quarter of 1996, earnings per share equals net income, minus dividends on the Company's preferred stock ("PRIDES"), divided by the weighted- average number of common shares outstanding during the period. In the first quarter of 1995, earnings per share equals net income divided by the weighted- average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the assumed conversion of the PRIDES. For the purpose of this computation, the conversion rate of 0.93 share of common stock for each share of PRIDES was based on the average market value of the Company's common stock during the 1995 period ($50.65 per share). Common share equivalents relating to the PRIDES were not included in the first quarter of 1996 since their effect would have been anti-dilutive. Note E - Financing arrangements In the first quarter of 1996, the Company entered into $400 million of interest rate swap agreements, 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 (6.0%) and made based on a variable rate (5.3% at March 31, 1996). These arrangements mature in 2001. The variable rate is based on the London Interbank Offer Rate. Note F - Contingent liabilities As previously disclosed in the Company's annual report on Form 10-K for the year ended December 31, 1995, the Company is involved in various worldwide environmental improvement activities resulting from past operations, including designation as a potentially responsible party, with others, at various EPA designated Superfund sites. The Company has recorded amounts which, in management's best estimate, will be sufficient to satisfy anticipated costs of known remediation requirements. As a result of factors such as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of presently unknown remediation sites and the allocation of costs among potentially responsible parties, estimated costs for future environmental compliance and remediation are necessarily imprecise. Based upon information presently available, such future costs are not expected to have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. However, such costs could be material to future quarterly or annual results of operations. Note G - Canadian Reynolds Metals Company, Ltd. and Reynolds Aluminum Company of Canada, Ltd. Financial statements and financial statement schedules for Canadian Reynolds Metals Company, Ltd. and Reynolds Aluminum Company of Canada, Ltd. have been omitted because certain securities registered under the Securities Act of 1933, of which these entities are obligors (thus subjecting them 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 these companies 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: Note G - Canadian Reynolds Metals Company, Ltd. and Reynolds Aluminum Company of Canada, Ltd.-continued Canadian Reynolds Metals Company, Ltd. Quarter ended March 31 -------------------------- 1996 1995 -------------------------- Net Sales: Customers $ 48 $ 42 Parent company 169 200 -------------------------- $217 $242 Cost of products sold 154 167 Net income (loss) $ 37 $ 51 March 31 December 31 1996 1995 ---------------------------- Current assets $ 240 $ 112 Noncurrent assets 1,260 1,266 Current liabilities (162) (91) Noncurrent liabilities (609) (617) Reynolds Aluminum Company of Canada, Ltd. Quarter ended March 31 -------------------------- 1996 1995 -------------------------- Net Sales: Customers $117 $113 Parent company 143 179 -------------------------- $260 $292 Cost of products sold 199 215 Net income (loss) $ 32 $ 50 March 31 December 31 1996 1995 --------------------------- Current assets $357 $221 Noncurrent assets 1,403 1,407 Current liabilities (293) (199) Noncurrent liabilities (637) (632) Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------------------------- INTRODUCTION - ------------ The following information should be read in conjunction with the consolidated financial statements and related footnotes included in the Company's annual report on Form 10-K for the year ended December 31, 1995, along with the consolidated financial statements and related footnotes included in and referred to in 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 net income, before a restructuring charge and the effects of an accounting change, of $40 million ($.48 per share). Following an after- tax restructuring charge of $23 million ($.36 per share) and the cumulative effect of an accounting change of $15 million ($.24 per share), the Company had net income of $2 million. After deducting preferred stock dividends, the Company had a net loss per common share of 12 cents. Net income for the first quarter of 1995 was $82 million ($1.13 per share). The restructuring charge relates principally to employee termination costs associated with the planned closing of an aluminum beverage can plant located in Houston, Texas. The accounting change resulted from adopting a new accounting standard (SFAS No. 121) covering impaired assets held for sale, principally undeveloped land. The Company is experiencing what it believes is a short-term softness in the overall global aluminum market, primarily attributable to a protracted soft landing in the U.S. economy and continued weakness in Europe and other areas. The economic situation has caused end users to continue liquidating excess inventories, and these conditions have resulted in lower realized prices for primary aluminum. Other factors affecting first quarter results include higher costs for certain raw materials, particularly in the production of alumina, and severe winter weather conditions, which resulted in facility curtailments and lower volumes, particularly in the distribution and construction products businesses. OPERATING AREA ANALYSIS - ----------------------- Shipments and Net Sales - -----------------------
First Quarter 1996 First Quarter 1995 --------------------------------------------------- Shipments Net Sales Shipments Net Sales --------------------------------------------------- Finished Products and Other Sales Packaging and containers Aluminum 83 $438 82 $402 Nonaluminum 130 123 Other aluminum 38 133 44 151 Other nonaluminum 127 128 --------------------------------------------------- 121 828 126 804 --------------------------------------------------- Production and Processing Primary aluminum 81 142 61 133 Sheet and plate 91 292 106 330 Extrusions 51 178 56 195 Other aluminum 39 113 43 123 Other nonaluminum 109 66 --------------------------------------------------- 262 834 266 847 --------------------------------------------------- Total 383 $1,662 392 $1,651 =================================================== Average realized price per pound: Fabricated aluminum products $1.83 $1.73 Primary aluminum $0.80 $0.99
SHIPMENTS AND NET SALES - ----------------------- Finished Products and Other Sales - --------------------------------- Aluminum packaging and container shipments were slightly higher in the first quarter of 1996 due primarily to higher shipments of laminated aluminum foil attributable to the acquisition in the second quarter of 1995 of a laminated aluminum products plant. The decrease in other aluminum shipments was due principally to severe winter weather conditions, which adversely affected the Company's construction products and distribution businesses. The increase in net sales was due principally to higher prices for cans and ends and certain foil products and higher nonaluminum sales. The increase in nonaluminum sales was mostly attributable to the acquisition of a flexible packaging manufacturing operation in the fourth quarter of 1995. These increases were somewhat offset by the lower shipping volumes, particularly for the Company's construction products and distribution businesses. Production and Processing - ------------------------- Primary aluminum shipments fluctuate from period to period because of variations in internal requirements and changes in customer demand for value-added foundry ingot and billet. The acquisition of an additional 25% interest in the Becancour, Quebec primary aluminum production facility in the fourth quarter of 1995 contributed to the increase in primary aluminum shipments in the first quarter of 1996, in addition to providing primary aluminum for use in the Company's fabricating operations. The decrease in average realized prices for primary aluminum was attributable to weak economic conditions and the continuing excess inventory liquidation process. SHIPMENTS AND NET SALES - continued - ----------------------------------- Production and Processing - continued - ------------------------------------- The decrease in shipments for the other product groups in this operating area was also attributable to the economic and inventory situations described under "Results of Operations" as well as the severe winter weather. These conditions generally affected most markets served by this operating area. The increase in nonaluminum sales was due to strong demand for alumina and carbon products. The strong demand for alumina was met with the return to full production during late 1995 of the Company's Texas alumina refinery. Costs and Expenses - ------------------ The increase in cost of products sold was due to higher costs for purchased materials, particularly in the production of alumina, and lower capacity utilization at aluminum fabricating facilities. Costs were favorably impacted by performance improvement programs and lower outside purchases of primary aluminum due to the acquisition of an additional 25% interest in the Becancour, Quebec primary aluminum production facility in the fourth quarter of 1995. Selling, administrative and general expenses increased due to a higher level of advertising. In the first quarter of 1996, the Company recorded operational restructuring costs of $37 million which relate principally to employee termination costs associated with the planned closing of an aluminum beverage can plant located in Houston, Texas. The Company's strategy for its U.S. can business is to aggressively reduce costs and increase production efficiencies through modernization programs and new technologies. The closing of the Houston facility will provide the Company with annual cost savings of approximately $18 million. The facility's 1.4-billion-can annual capacity was determined to be in excess of the Company's domestic customer needs due to productivity gains within the Company's can-making system and slower overall growth in the domestic demand for cans. As a result of improved efficiencies system-wide, the Company will maintain its current annual worldwide aluminum beverage can production capacity. Operations at the facility will cease in early 1997, at which time the Company intends to transfer some equipment to its other domestic and international can operations and sell the plant and property. On a quarterly basis, the Company updates the status of all significant existing or potential environmental issues, develops or revises estimates of costs to satisfy known remediation requirements and adjusts its accruals accordingly. Based upon information presently available, such future costs are not expected to have a material adverse effect on the company's competitive or financial position or its ongoing results of operations. However, it is not possible to predict the amount or timing of future costs of environmental requirements which may subsequently be determined. Such costs could be material to future quarterly or annual results of operations. Various suits and claims are pending against the Company. In the opinion of management, after consultation with counsel, disposition of these suits and claims, either individually or in the aggregate, will not have a material adverse effect on the Company's competitive or financial position or its ongoing results of operations. No assurance can be given, however, that the disposition of one or more of such suits or claims in a particular reporting period will not be material in relation to the reported results for such period. Taxes on Income - --------------- The effective tax rates reflected in the income statement differ from the U.S. federal statutory rate because of state and foreign taxes and the effects of percentage depletion allowances. SHIPMENTS AND NET SALES - continued - ----------------------------------- Cumulative Effect of Accounting Change - -------------------------------------- In the first quarter of 1996, the Company adopted Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of ("SFAS No. 121"). The Company recognized an after-tax loss of $15 million for the cumulative effect of adopting SFAS No. 121. The loss was for the impairment of assets held for sale, principally undeveloped land. Operating Outlook - ----------------- The Company continues to remain optimistic regarding favorable, long-term aluminum industry fundamentals. The Company expects momentum to build as 1996 progresses, based on the Company's projections of world economic growth of 3% and growth in world aluminum consumption of 3.5% to 4%. This will be fueled by market strength in the U.S., Latin America and Asia. The Company expects 1996 to close out on a positive note, with a much stronger second half. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Working Capital - --------------- Working capital totaled $601 million at March 31, 1996, compared to $647 million at December 31, 1995. The ratio of current assets to current liabilities was 1.4/1 at March 31, 1996, compared to 1.5/1 at December 31, 1995. Operating Activities - -------------------- In the first quarter of 1996, cash generated from operations was supplemented with short-term borrowings principally to reduce accounts payable, accrued and other liabilities and to finance an increase in inventories. Inventories increased in anticipation of higher shipping volumes in the second quarter of 1996. Investing Activities - -------------------- Capital investments of $98 million in the first quarter of 1996 included $45 million for operating requirements (i.e., replacement equipment, capital maintenance, environmental control projects, etc.). The remainder was for continuing performance improvement and strategic investment projects including the modernization of aluminum can and end facilities; expansions at foil and plastic film facilities; quality improvements at a can sheet facility in Alabama; and the modification and equipping of a purchased facility in Wisconsin to produce aluminum wheels. Financing Activities - -------------------- Cash provided by financing activities in the first quarter of 1996 was used to fund operating and investing activities. The principal source of funds was from the issuance of $165 million of commercial paper at a weighted-average rate of 5.5%. In the first quarter of 1996, the Company entered into $400 million of interest rate swap agreements 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 (6.0%) and made based on a variable rate (5.3% at March 31, 1996). These arrangements mature in 2001. The variable rate is based on the London Interbank Offer Rate. LIQUIDITY AND CAPITAL RESOURCES - continued - ------------------------------------------- Financial Outlook - ----------------- Capital investments in 1996 are expected to total $500 million. Approximately 47% of this amount will be for operating requirements. The remainder will be for continuing expenditures for those performance improvement and strategic investment projects underway and an interest in a Chinese joint venture as discussed below. Capital investments in 1996 are expected to be funded with cash generated from operations, supplemented with short-term borrowings as needed. These short-term borrowings are expected to be repaid later in the year as economic and business conditions improve. Early in the second quarter of 1996, the Company announced that a wholly owned subsidiary had acquired an interest in a joint venture in China that produces aluminum foil and extrusions. The operation, Bohai Aluminium Industries, Ltd., includes a large, aluminum fabricating facility that was built in the mid-1980's and expanded later that decade. The facility will manufacture aluminum foil, primarily for the food, pharmaceutical and tobacco industries, and extrusions for the automotive and building products markets. 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 March 31, 1996, $150 million of the Company's $1.65 billion shelf registration remained available for the issuance of debt securities. RISK FACTORS - ------------ This section should be read in conjunction with Part I, Items 1 (Business), 3 (Legal Proceedings) and 7 (Management's Discussion and Analysis of Financial Condition and Results of Operations) of the Company's annual report on Form 10-K for the year ended December 31, 1995 and Part II, Item 1 (Legal Proceedings) of this report. This report contains, and oral communications made by or on behalf of the Company may contain, forecasts, projections, estimates, statements of management's plans and objectives for the Company and other forward-looking statements. The Company's expectations for the future and related forward-looking statements are based on a number of assumptions and forecasts as to world economic growth and other economic indicators (including rates of inflation, industrial production, housing starts and light vehicle sales), trends in the Company's key markets, global aluminum supply and demand conditions, and aluminum ingot prices, among other things. By their nature, forward-looking statements involve risk and uncertainty, and various factors could cause the Company's actual results to differ from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. As 1996 progresses, the Company expects market conditions to improve based on its projections of world economic growth of just over 3%, and world aluminum consumption growth of 3.5% - 4%. The Company expects this growth to be fueled by anticipated market strength in the U.S., Latin America and Asia, with an expected recovery in Japan and growth of approximately 10% in other parts of Asia. After the current liquidation of excess inventories by customers ends, and barring a recession in any major world economy, the Company expects improved conditions 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. The Company expects greater use of aluminum around the world in automobiles and other light vehicles; a slowing in the growth in U.S. aluminum beverage can shipments to about 2% per year and a 5% annual increase in global RISK FACTORS - continued - ------------------------ shipments, with 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 Eastern Europe and the Commonwealth of Independent States and as a result of new construction projects in emerging markets. Economic and/or market conditions other than as forecast by the Company in the preceding paragraph, particularly in the U.S., Japan and Germany (which are large consumers of aluminum) and in South America, could cause the Company's actual results to differ from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. The following factors also could affect the Company's results: - - Primary aluminum is an internationally traded commodity. The price of primary aluminum is subject to worldwide market forces of supply and demand and other influences. Prices can be volatile. The Company's strategy of being a vertically integrated producer of value-added aluminum products, and its use of contractual arrangements including fixed-price sales contracts, fixed-price supply contracts, and forward, futures and option contracts, reduces its exposure to this volatility but does not eliminate it. - - The markets for most aluminum products are highly competitive. Certain of the Company's competitors are larger than the Company in terms of total assets and operations and have greater financial resources. Certain foreign governments are involved in the operation and/or ownership of certain competitors, and may be motivated by political as well as economic considerations. In addition, aluminum competes with other materials, such as steel, vinyl, plastics and glass, among others, for various applications in the Company's key markets. Unanticipated actions or developments by the Company's competitors and/or the willingness of customers to accept substitutions for the products sold by the Company could affect results. - - The Company spends substantial capital and operating amounts relating to ongoing compliance with environmental laws. In addition, the Company is involved in remedial investigations and actions in connection with past disposal of wastes. 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. - - Unanticipated material legal proceedings or investigations, or the disposition of those currently pending against the Company other than as anticipated by management and counsel, could affect the Company's results. - - Changes in the costs of power, resins, caustic soda, green coke and other raw materials can affect results. A new five-year contract with the Bonneville Power Administration for the period October 1996 - September 2001 would provide a fixed rate for electrical power that is 16% less than rates now in effect for the Company's Longview, Washington and Troutdale, Oregon primary aluminum production plants. The new contract is subject to regulatory review and approval and is critical to the competitive position of those two smelters. RISK FACTORS - continued - ------------------------ - - The Company's principal labor contracts with the United Steelworkers of America and the Aluminum, Brick and Glass Workers International Union, respectively, will expire by their terms in May 1996. In the event of a strike at one or more Company facilities, production could be affected at struck facilities and at non-struck facilities supplied by them. In addition, the terms of the new union contracts, or failure to enter into new contracts in timely fashion, could affect labor costs. - - The Company's key transportation and building and construction markets are cyclical, and sales to those markets in particular can be influenced by economic conditions. In addition to the factors referred to above, 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 general, the Company's expectations for the future are based on the assumption that conditions relating to costs, currency values, competition and the legal, regulatory, financial, political and business environments in the economies and markets in which the Company operates will not change significantly overall. PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS ----------------- As previously reported in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995, a private lawsuit styled Hammons v. Alcan Aluminum Corp. et al. 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 original complaint sought estimated damages of approximately $13 billion. In subsequently filed court documents, the plaintiff's attorney has indicated that damages should have been sought covering a two-year period (in an estimated amount of approximately $26 billion) rather than a one-year period as in the original complaint. The Registrant is confident that its conduct has been in compliance with the antitrust laws. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- The Annual Meeting of Stockholders of the Registrant was held on April 17, 1996. The stockholders (i) elected the thirteen nominees named in the Registrant's proxy statement to serve as Directors, (ii) approved an amendment to the Registrant's Performance Incentive Plan, (iii) approved the Registrant's 1996 Nonqualified Stock Option Plan, and (iv) ratified the selection of Ernst & Young LLP as independent auditors of the Registrant for 1996. The number of votes cast for, against or withheld, and the number of abstentions, as applicable, with respect to each of the foregoing matters were as set forth below. There were no broker nonvotes with respect to any of the foregoing matters. No other matters were voted upon at the meeting. (i) Election of Directors Number Of Votes Number Of Votes Name Cast "For" Withheld ---------------------- --------------- --------------- Patricia C. Barron 62,349,180 475,835 William O. Bourke 62,314,757 510,258 John R. Hall 62,350,590 474,425 Robert L. Hintz 62,348,608 476,407 Richard G. Holder 62,323,892 501,123 William H. Joyce 62,352,842 472,173 Mylle Bell Mangum 62,352,740 472,275 D. Larry Moore 62,352,107 472,908 Randolph N. Reynolds 62,351,073 473,942 James M. Ringler 62,351,709 473,306 Henry S. Savedge, Jr. 62,354,295 470,720 Jeremiah J. Sheehan 62,350,879 474,136 Joe B. Wyatt 62,357,655 467,360 (ii) Approval of Amendment to Performance Incentive Plan Number of Votes Cast "For" 59,859,529 Number of Votes Cast "Against" 2,604,984 Number of Abstentions 360,402 (iii) Approval of 1996 Nonqualified Stock Option Plan Number of Votes Cast "For" 50,691,761 Number of Votes Cast "Against" 11,719,629 Number of Abstentions 414,600 (iv) Ratification of Selection of Ernst & Young LLP as Independent Auditors Number of Votes Cast "For" 62,491,251 Number of Votes Cast "Against" 175,909 Number of Abstentions 157,855 Item 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits See Index to Exhibits. (b) Reports on Form 8-K The Registrant filed no reports on Form 8-K during the first quarter of 1996. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. REYNOLDS METALS COMPANY By Allen M. Earehart Allen M. Earehart Vice President, Controller (Principal Accounting Officer) DATE: May 14, 1996 INDEX TO EXHIBITS EXHIBIT 2 - None * EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended to the date hereof. (Registration Statement No. 333-00929 on Form S-8, dated February 14, 1996, EXHIBIT 4.1) EXHIBIT 3.2 - By-Laws, as amended to the date hereof EXHIBIT 4.1 - Restated Certificate of Incorporation. See EXHIBIT 3.1. EXHIBIT 4.2 - By-Laws. See EXHIBIT 3.2. * EXHIBIT 4.3 - Indenture dated as of April 1, 1989 (the "Indenture") between Reynolds Metals Company and The Bank of New York, as Trustee, relating to Debt Securities. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1989, EXHIBIT 4(c)) * EXHIBIT 4.4 - Amendment No. 1 dated as of November 1, 1991 to the Indenture. (File No. 1-1430, 1991 Form 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)) _______________________ *Incorporated by reference. * 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. (File No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.13) * EXHIBIT 4.14 - By-Laws of REYCAN, as amended to the date hereof. (File No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.14) * 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. (File No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.15) * EXHIBIT 4.16 - By-Laws of CRM, as amended to the date hereof. (File No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.16) * 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. (File No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.18) * 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 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) _______________________ *Incorporated by reference. * 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 of the Reynolds Metals Company 1995 Form 10-K Report. (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) ____________________________ * Incorporated by reference. * 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) * 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) ____________________________ * Incorporated by reference. * 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) * 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 15 - None EXHIBIT 18 - None EXHIBIT 19 - None ____________________________ * Incorporated by reference. EXHIBIT 22 - None EXHIBIT 23 - None EXHIBIT 24 - None EXHIBIT 27 - Financial Data Schedule Pursuant to Item 601 of Regulation S-K, certain instruments with respect to long-term debt of Reynolds Metals Company (the "Registrant") and its consolidated subsidiaries are omitted because such debt does not exceed 10 percent of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant agrees to furnish a copy of any such instrument to the Commission upon request. EX-3 2 EXHIBIT 3.2 By-Laws of REYNOLDS METALS COMPANY (Incorporated under the Laws of Delaware) By-Laws of REYNOLDS METALS COMPANY Table of Contents ----------------- Page ARTICLE I - Stock Section 1. Certificates for Stock.............................. 1 Section 2. Transfers of Stock.................................. 1 Section 3. Holders of Record................................... 1 Section 4. Lost or Destroyed Certificates...................... 2 ARTICLE II - Stockholders' Meetings Section 1. Place of Meetings................................... 2 Section 2. Annual Meetings..................................... 2 Section 3. Special Meetings.................................... 2 Section 4. Matters to be Brought Before Stockholders Meetings............................... 2 Section 5. Notice of Meetings.................................. 3 Section 6. Quorum.............................................. 4 Section 7. Adjourned Meetings.................................. 4 Section 8. Inspectors of Election.............................. 4 Section 9. List of Stockholders................................ 5 Section 10. Voting.............................................. 5 Section 11. Consents in Writing................................. 5 ARTICLE III - Board of Directors Section 1. Number; Term of Office; Powers...................... 6 Section 2. Resignations........................................ 6 Section 3. Vacancies........................................... 6 Section 4. Annual Meeting...................................... 6 Section 5. Regular Meetings.................................... 6 Section 6. Special Meetings.................................... 6 Section 7. Notice of Meetings.................................. 7 Section 8. Quorum; Adjourned Meetings; Required Vote........... 7 Section 9. Committees.......................................... 7 Section 10. Compensation........................................ 8 Section 11. Consents in Writing................................. 8 Section 12. Participation by Conference Telephone............... 8 Table of Contents, Continued ARTICLE IV - Officers Section 1. Officers............................................ 8 Section 2. Chairman of the Board............................... 9 Section 3. Vice Chairmen of the Board.......................... 9 Section 4. President........................................... 9 Section 5. Vice Presidents..................................... 9 Section 6. General Counsel..................................... 9 Section 7. Secretary........................................... 9 Section 8. Treasurer........................................... 9 Section 9. Controller.......................................... 10 Section 10. Other Officers and Assistant Officers............... 10 Section 11. Term of Office; Vacancies........................... 10 Section 12. Removal............................................. 10 ARTICLE V - Dividends and Finance Section 1. Dividends........................................... 10 Section 2. Deposits; Withdrawals; Notes and Other Instruments.. 10 Section 3. Fiscal Year......................................... 10 ARTICLE VI - Books and Records; Record Date Section 1. Books and Records................................... 11 Section 2. Record Date......................................... 11 ARTICLE VII - Notices Section 1. Notices............................................. 12 Section 2. Waivers of Notice................................... 12 ARTICLE VIII - Contracts Section 1. Interested Directors or Officers.................... 12 ARTICLE IX - Seal Section 1. Seal................................................ 13 ARTICLE X - Indemnification Section 1. Indemnification in Third Party Actions............. 13 Section 2. Indemnification in an Action by or in the Right of the Corporation.................................... 14 Section 3. Indemnification as of Right........................ 14 Section 4. Determination of Indemnification................... 15 Section 5. Advance for Expenses............................... 15 Section 6. General Provisions................................. 15 ARTICLE XI - Amendments Section 1. Amendments......................................... 16 By-Laws of REYNOLDS METALS COMPANY (Incorporated under the Laws of Delaware) ARTICLE I - Stock 1. Certificates for Stock. Certificates of Stock shall be issued in numerical order, be signed by the Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, and sealed with the corporate seal; provided, that where any Certificate of Stock is signed by a duly appointed and authorized Transfer Agent or Registrar the signatures of the Chairman of the Board of Directors, Vice Chairman of the Board of Directors, the President, Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer may be facsimile, engraved or printed, and the seal of the corporation on any such Certificate of Stock may be facsimile, engraved or printed. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. 2. Transfers of Stock. Transfers of stock shall be made only upon the books of the corporation, and only by the person named in the certificate or by attorney, lawfully constituted in writing, and only upon surrender of the certificate therefor. The directors may by resolution make reasonable regulations for the transfers of stock. 3. Holders of Record. Registered stockholders only shall be entitled to be treated by the corporation as the holders in fact of the stock standing in their respective names and the corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the laws of Delaware. 4. Lost or Destroyed Certificates. In case of loss or destruction of any certificate of stock another may be issued in its place upon satisfactory proof of such loss or destruction and upon the giving of a satisfactory bond of indemnity to the corporation, all as determined either expressly by the directors or pursuant to general authority granted by them. ARTICLE II - Stockholders' Meetings 1. Place of Meetings. Meetings of the stockholders shall be held at such place, within or outside the State of Delaware, as the Board of Directors may determine. 2. Annual Meeting. The annual meeting of the stockholders of the corporation, for the election of directors to succeed those whose terms expire, and for the transaction of such other business as may come before the meeting, shall be held on the first Wednesday after April 15th of each year, if not a legal holiday, and if a legal holiday, then on the first business day following, at 10:00 a.m., or on such other date and at such other time as may be fixed by the Board of Directors. The annual meeting of the stockholders may be postponed by the Board of Directors upon public notice given before the date previously scheduled for such meeting. If the annual meeting of the stockholders be not held as herein prescribed, the election of directors may be held at any meeting thereafter called pursuant to these By-Laws. 3. Special Meetings. Special meetings of the stockholders may be called by the Chairman of the Board of Directors, or a Vice Chairman of the Board of Directors, or the President or by the Board of Directors, and shall be called at any time by the Board of Directors upon the request in writing of stockholders entitled to cast a majority of the votes which all stockholders are entitled to cast. Such request must state the purpose of the meeting. 4. Matters to be Brought Before Stockholders Meetings. Except as otherwise provided by law, at any annual or special meeting of stockholders only such business shall be conducted as shall have been properly brought before the meeting in accordance with this Section. In order to be properly brought before the meeting, such business must have either been (i) specified in the written notice of the meeting (or any supplement thereto) given to stockholders of record on the record date for such meeting by or at the direction of the Board of Directors, (ii) brought before the meeting at the direction of the Board of Directors or the officer presiding over the meeting, or (iii) specified in a written notice given by or on behalf of a stockholder of record on the record date for such meeting entitled to vote thereat or a duly authorized proxy for such stockholder, in accordance with all of the following requirements. A notice referred to in clause (iii) hereof must be delivered personally to, or mailed to and received at, the principal executive office of the corporation, addressed to the attention of the Secretary, not more than ten (10) days after the date of the initial notice referred to in clause (i) hereof, in the case of business to be brought before a special meeting of stockholders, and not less than thirty (30) days prior to the first anniversary date of the initial notice referred to in clause (i) hereof of the previous year's annual meeting, in the case of business to be brought before an annual meeting of stockholders, provided, however, that such notice shall not be required to be given more than ninety (90) days prior to an annual meeting of stockholders. Such notice referred to in clause (iii) hereof shall set forth: (a) a full description of each such item of business proposed to be brought before the meeting; (b) the name and address of the person proposing to bring such business before the meeting; (c) the class and number of shares held of record, held beneficially and represented by proxy by such person as of the record date for the meeting (if such date has then been made publicly available) and as of the date of such notice; (d) if any item of such business involves a nomination for director, all information regarding each such nominee that would be required to be set forth in a definitive proxy statement filed with the Securities and Exchange Commission pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, or any successor thereto and the written consent of each such nominee to serve if elected; and (e) all other information that would be required to be filed with the Securities and Exchange Commission if, with respect to the business proposed to be brought before the meet ing, the person proposing such business was a participant in a solicitation subject to Section 14 of the Securities Exchange Act of 1934, as amended, or any successor thereto. No business shall be brought before any meeting of stockholders of the corporation otherwise than as provided in this Section. 5. Notice of Meetings. Written notice of the place, date and hour of the annual and of all special meetings of the stockholders and, in the case of special meetings, of the purpose or purposes for which such special meeting is called, shall be given in the manner specified in Section l of Article VII of these By-Laws not less than ten (10) nor more than sixty (60) days prior to the meeting, to each stockholder of record of the corporation entitled to vote thereat. Business transacted at all special meetings shall be confined to the purposes stated in the notice. 6. Quorum. A quorum at any annual or special meeting of the stockholders shall consist of the presence, in person or by proxy, of stockholders entitled to cast a majority of the votes which all stockholders are entitled to cast, except as otherwise specifically provided by law or in the Certificate of Incorporation. 7. Adjourned Meetings. Whether or not a quorum is present at a properly called stockholders' meeting, the meeting may be adjourned from time to time by the Chairman of the meeting or by a majority in interest of those present in person or by proxy and entitled to vote thereat. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting; otherwise, no notice of such adjourned meeting need be given if the time and place thereof are announced at the meeting at which the adjournment is taken. The absence from any meeting of stockholders holding the number of shares of stock of the corporation required by law, the Certificate of Incorporation or these By-Laws for action upon any given matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if there shall be present thereat in person or by proxy stockholders holding the number of shares of stock of the corporation required in respect of such other matter or matters. 8. Inspectors of Election. In advance of any meeting of stockholders or any corporate action to be taken by the stockholders in writing without a meeting, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or Secretary of the corporation shall appoint one or more inspectors of election to serve at such meeting or to examine such written consents and to make a written report with respect thereto. In addition, any such officer may, but shall not be required to, designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer at such meeting shall appoint one or more inspectors to act at the meeting. Each inspector shall discharge his or her duties in accordance with applicable law and shall, before entering upon the discharge of his or her duties, take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. 9. List of Stockholders. A complete list of the stockholders entitled to vote at each annual or special meeting of the stockholders of the corporation, arranged in alphabetical order, showing the address of record of each and the number of voting shares held by each, shall be prepared by the Secretary, who shall have charge of the stock ledger, and filed in the City (or, if such meeting is to be held at a place not within any city, then in the county) where the meeting is to be held, at a location specified in the Notice of Meeting, or if no such location is specified in such notice, at the place where the meeting is to be held, at least ten (10) days before every such meeting, and shall, during the usual hours for business, be open to the examination of any stockholder for any purpose germane to the meeting, and during the whole time of said meeting be open to the examination of any stockholder. 10. Voting. Subject to the provisions of Article VI, Section 2 of these By-Laws, and except where a different vote per share is prescribed by the Certificate of Incorporation for a class of stock, each holder of stock of a class which is entitled to vote in any election or on any other questions at any annual or special meeting of the stockholders shall be entitled to one vote, in person or by written proxy, for each share of such class held of record. Except where, and to the extent that, a different percentage of votes and/or a different exercise of voting power is prescribed by law, the Certificate of Incorporation or these By-Laws, all elections and other questions shall be decided by the vote of stockholders, present in person or by proxy and entitled to vote, representing a majority of the votes cast. Abstentions shall be counted in the tabulation of the votes cast. The votes for directors, and, upon demand of any stockholder, or where required by law, the votes upon any question before the meeting, shall be by ballot; otherwise, the election shall be held as the presiding officer prescribes. 11. Consents in Writing. Any action which might have been taken under these By-Laws by a vote of the stockholders at a meeting thereof may be taken by them without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken shall be signed by the holders of outstanding shares of stock of the corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or the Secretary. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of such corporate action shall be given to those stockholders who have not consented thereto if less than unanimous written consent is obtained. Every written consent shall bear the date of signature of each stockholder who signs the consent. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the date the earliest dated written consent (executed and delivered in accordance with this Section) was received by the corporation, written consents signed by a sufficient number of holders (determined in accordance with this Section) to take such action are delivered to the corporation in the manner specified in this Section. ARTICLE III - Board of Directors 1. Number; Term of Office; Powers. The business and affairs of the corporation shall be under the direction of a Board of Directors, consisting of thirteen (13) persons. Direc tors shall be elected for one year, and shall hold office until their successors are elected and qualified. Directors need not be stockholders. In addition to the power and authority express ly conferred upon them by the By-Laws and the Certificate of Incorporation, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. 2. Resignations. Any director may resign at any time by giving written notice of resignation to the Board of Directors, to the Chief Executive Officer or to the Secretary of the corpo ration. Any such resignation shall take effect at the time specified therein, or if the time be not specified therein, then upon receipt thereof. The acceptance of such resignation shall not be necessary to make it effective. 3. Vacancies. Except as otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, all vacancies in the Board of Directors, whether caused by resigna tion, death, increase in the number of authorized directors or otherwise, may be filled by a majority of the Board of Directors then in office, even though less than a quorum, or by the stock holders at a special meeting. A director thus elected to fill any vacancy shall hold office until the next annual meeting of stockholders and until a successor is elected and qualified. 4. Annual Meeting. The annual meeting of the Board of Directors, for the election of officers and the transaction of other business, shall be held on the same day and at the same place as, and as soon as practicable following, the annual meeting of stockholders, or at such other date, time or place as the directors may by resolution designate. 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times, and at such place within or outside the State of Delaware, as the Board of Directors may from time to time by resolution designate. 6. Special Meetings. Special meetings of the directors may be called at any time by the Chairman of the Board of Direc tors, a Vice Chairman of the Board of Directors, the President or an Executive Vice President, or by the Secretary upon written request of one-third of the directors, such request stating the purpose for which the meeting is to be called. Special meetings shall be held at the principal office of the corporation or at such office within or outside the State of Delaware as the directors may from time to time designate. 7. Notice of Meetings. Except as otherwise required by law, notice of special meetings of the Board of Directors or of any committee of the Board of Directors shall be given to each director or to each committee member, as the case may be, by mail at least two days before the day on which the meeting is to be held or by personal delivery, word-of-mouth, telephone, tele graph, radio, cable or other comparable means at least six hours before the time at which the meeting is to be held. Such notice shall state the time and place of such meeting, but need not state the purposes thereof unless otherwise required by law. No notice need be given of the annual meeting of directors or of regular meetings of directors or of committees of the Board of Directors, provided that, whenever the time or place of such meetings shall be fixed or changed, notice of such action shall be given promptly to each director or to each committee member, as the case may be, who shall not have been present at the meeting at which such action was taken. 8. Quorum; Adjourned Meetings; Required Vote. A majority of the Board of Directors as constituted from time to time shall be necessary and sufficient at all meetings to constitute a quorum for the transaction of business. In the absence of a quorum, a majority of those present may adjourn the meeting from time to time and the meeting may be held as adjourned without further notice provided a quorum be present at such adjourned meeting. Unless otherwise specifically provided by the Certifi cate of Incorporation or statute, the act of a majority of the directors present at any properly convened meeting at which there is a quorum, but in no case less than one-third of all of the directors then in office, shall be the act of the Board of Directors. 9. Committees. Standing or Temporary Committees may be appointed from their own number by the Board of Directors from time to time, and the directors may from time to time vest such committees with such powers as the directors may see fit, subject to such conditions as the directors may prescribe or as may be prescribed by law. All committees shall consist of two or more directors. The term of office of the members of each committee shall be as fixed from time to time by the Board of Directors; provided, however, that any committee member who ceases to be a director shall ipso facto cease to be a committee member. Any member of any committee may be removed at any time with or without cause by the Board of Directors, and any vacancy in any committee may be filled by the Board of Directors. All commit tees shall keep regular minutes of their transactions and shall cause them to be recorded in books kept for that purpose in the office of the corporation, and shall report the same to the Board of Directors at their regular meetings. Subject to this Section 9 and except as otherwise determined by the Board of Directors, each committee may make rules for the conduct of its business. 10. Compensation. Directors, as such, may receive, pursu ant to resolution of the Board of Directors, fixed fees, other compensation and expenses for their services as directors, including, without limitation, services as chairmen or as members of committees of the directors; provided, however, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. 11. Consents in Writing. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. 12. Participation by Conference Telephone. Members of the Board of Directors or of any committee may participate in a meeting of such Board of Directors or committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at the meeting. ARTICLE IV - Officers 1. Officers. The corporation may have a Chairman of the Board of Directors, one or more Vice Chairmen of the Board of Directors, a President, one or more Vice Presidents, which may include Executive and Senior Vice Presidents, a General Counsel, a Secretary, a Treasurer, a Controller and such other officers and assistant officers as the Board of Directors shall deem appropriate; provided, that the corporation shall have such officers as are required by applicable law. Officers shall be elected annually by the Board of Directors. One person may hold more than one office. The Board of Directors shall designate a Chief Execu tive Officer, and may designate a Chief Operating Officer and a Chief Financial Officer from among the officers of the corpora tion. The Chief Executive Officer shall have general supervi sion and management of the business and affairs of the corpora tion, subject to the control of the Board of Directors, and may prescribe the duties to be performed by the officers of the corporation in addition to the duties prescribed by these By-Laws or by the Board of Directors. In the absence or disability of the Chairman of the Board of Directors, the Chief Executive Officer shall preside at all meetings of stockholders and direc tors. In the absence or disability of the Chief Executive Officer, such officer of the corporation as the Chief ExecutiveOfficer shall have designated in writing to the Board of Directors or to the Secretary of the corporation shall, subject to further action by the Board of Directors, have the powers and perform the duties of the Chief Executive Officer. 2. Chairman of the Board. The Chairman of the Board of Directors shall preside at all meetings of stockholders and directors. 3. Vice Chairmen of the Board. A Vice Chairman shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 4. President. The President shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 5. Vice Presidents. Each of the Executive Vice presi dents, Senior Vice Presidents and other Vice Presidents shall perform such duties as are properly required by the Board of Directors or the Chief Executive Officer. 6. General Counsel. The General Counsel shall advise the corporation on legal matters affecting the corporation and its activities, shall supervise and direct the handling of all such legal matters and shall perform all such other duties as are incident to the office of General Counsel. 7. Secretary. The Secretary shall keep the minutes of the meetings of the stockholders and of the Board of Directors, and, when required, the minutes of the meetings of the committees, and shall be responsible for the custody of all such minutes. The Secretary shall be responsible for the custody of the stock ledger and documents of the corporation. The Secretary shall have custody of the corporate seal and may affix and attest such seal to any instrument whose execution shall have been duly authorized and shall perform all other duties incident to the office of Secretary. 8. Treasurer. The Treasurer shall have the custody of all moneys and securities of the corporation and shall keep or cause to be kept accurate accounts of all money received or payments made in books kept for that purpose. The Treasurer shall deposit or cause to be deposited funds of the corporation in accordance with Article V, Section 2 of these By-Laws and shall disburse the funds of the corporation by checks or vouchers as authorized by the Board of Directors. The Treasurer shall also perform all other duties incident to the office of Treasurer. 9. Controller. The Controller shall be the chief account ing officer of the corporation. The Controller shall keep or cause to be kept all books of accounts and accounting records of the corporation and shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the corporation. The Controller shall prepare or cause to be prepared appropriate financial statements for the corporation and shall perform such other duties as may be incident to the office of Controller. 10. Other Officers and Assistant Officers. All other officers and assistant officers shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors or the Chief Executive Officer. 11. Term of Office; Vacancies. Each officer shall hold office until the annual meeting of the Board of Directors follow ing the end of the term of the Board by which such officer is elected, except in the case of earlier death, resignation or removal. Vacancies in any office arising from any cause may be filled by the directors at any regular or special meeting. 12. Removal. Any officer elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the Board of Directors. ARTICLE V - Dividends and Finance 1. Dividends. Dividends may be declared to the full extent permitted by law at such times as the Board of Directors shall direct. 2. Deposits; Withdrawals; Notes and Other Instruments. The moneys of the corporation shall be deposited in the name of the corporation in such banks or trust companies as shall be designated by the Board of Directors, and shall be drawn out only by persons designated from time to time by the Board of Directors or by an officer of this corporation to whom the Board of Directors has delegated such authority. All notes and other instruments for the payment of money shall be signed or endorsed by officers or other persons authorized from time to time by the Board of Directors or by an officer of this corporation to whom the Board of Directors has delegated such authority. 3. Fiscal Year. The fiscal year of the corporation shall date from the first day of January in each year. ARTICLE VI - Books and Records; Record Date 1. Books and Records. The books, accounts and records of the corporation, except as may be otherwise required by the laws of the State of Delaware, may be kept within or outside of the said State at such places as the Board of Directors may from time to time appoint. 2. Record Date. (a) The Board of Directors is authorized to fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or other distribution or allotment of any rights, or the date when any change, conversion or exchange of capital stock shall go into effect, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend or other distribution or allotment of rights, or to exercise any rights in respect of any such change, conversion or exchange of capital stock. Such stockhold ers and only such stockholders as shall be stockholders of record on the record date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend or other distribution or allot ment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. Any such record date fixed in connection with a meeting of stockhold ers shall not be less than ten (10) days before the date of such meeting. (b) In order that the corporation may determine the stock holders entitled to consent to corporate action in writing without a meeting, the Board of Directors is authorized to fix in advance a record date, which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockhold er of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. If no record date has been fixed by the Board of Directors within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applica ble law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or the Secretary. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. Such stockholders and only such stockholders as shall be stockholders of record on the record date so fixed shall be entitled to give such consent, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. ARTICLE VII - Notices 1. Notices. Whenever any provision of law or these By- Laws requires notice to be given to any director, officer or stockholder, such notice may be given in writing by mailing the same to such director, officer or stockholder at his or her address as the same appears in the books of the corporation, unless such stockholder shall have filed with the Secretary a written request that notices intended for him or her be mailed to some other address, in which case it shall be mailed to the address designated in such request. The time when the same shall be mailed shall be deemed to be the time of the giving of such notice. This section shall not be deemed to preclude the giving of notice by other means if permitted by the applicable provision of law or these By-Laws. 2. Waivers of Notice. A waiver of any notice in writing, signed by a stockholder, director or officer, whether before or after the time stated in said waiver for holding a meeting, shall be deemed equivalent to a notice required to be given to any stockholder, director or officer. ARTICLE VIII - Contracts 1. Interested Directors or Officers. No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of the directors or officers of the corporation are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer of the corporation is present at or partici pates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (i) The material facts as to the relationship or interest of such person and as to the contract or transac tion are disclosed or are known to the Board of Directors or the committee thereof, and the Board of Directors or commit tee in good faith authorizes the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors of the corporation; provided, however, that common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or committee; or (ii) The material facts as to the relationship or interest of such person and as to the contract or transac tion are disclosed or are known to the stockholders of the corporation entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders of the corporation; or (iii) The contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders of the corporation. ARTICLE IX - Seal 1. Seal. The corporate seal of the corporation shall consist of two concentric circles, between which is the name of the corporation, and in the center shall be inscribed the year of its incorporation and the words, "Corporate Seal, Delaware." ARTICLE X - Indemnification 1. Indemnification in Third Party Actions. The corpora tion shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corpora tion as a director, officer, employee or agent of another corpo ration, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) actually and reasonably in curred by such person in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that no indemnification shall be made in respect of any proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the corporation. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. 2. Indemnification in an Action by or in the Right of the Corporation. The corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of (a) any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper, or (b) any proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors of the corporation. 3. Indemnification as of Right. To the extent that a director, officer, employee or agent of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections l and 2 of this Article X, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by such person in connection therewith. 4. Determination of Indemnification. Any indemnification under Sections 1 and 2 of this Article X (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circum stances because the person has met the applicable standard of conduct set forth in such Sections l and 2. Such determination shall be made (a) by the Board of Directors (the Board) by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (c) by the stockholders. 5. Advance for Expenses. Expenses (including attorneys' fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation as authorized in this Article X. 6. General Provisions. (a) All expenses (including attorneys' fees) incurred in defending any civil, criminal, administrative or investigative action, suit or proceeding which are advanced by the corporation under Section 5 of this Article X shall be repaid (i) in case the person receiving such advance is ultimately found, under the procedure set forth in this Article X, not to be entitled to indemnification, or (ii) where indemnification is granted, to the extent that the expenses so advanced by the corporation exceed the indemnification to which such person is entitled. (b) The corporation may indemnify each person, though he or she is not or was not a director, officer, employee or agent of the corporation, who served at the request of the corporation on a committee created by the Board to consider and report to it in respect of any matter. Any such indemnification may be made under the preceding provisions of this Article X and shall be subject to the limitations thereof except that (as indicated) any such committee member need not be nor have been a director, officer, employee or agent of the corporation. (c) The provisions of this Article X shall be applicable to appeals. References to "serving at the request of the corpora tion" shall include without limitation any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries. A person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation." (d) If any section, subsection, paragraph, sentence, clause, phrase or word in this Article X shall be adjudicated invalid or unenforceable, such adjudication shall not be deemed to invalidate or otherwise affect any other section, subsection, paragraph, sentence, clause, phrase or word of this Article. (e) The indemnification and advancement of expenses provided by, or granted pursuant to, this Article X shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. ARTICLE XI - Amendments 1. Amendments. Alterations or amendments of these By-Laws may be made by the stockholders at any annual or special meeting if the notice of such meeting contains a statement of the pro posed alteration or amendment, or by the Board of Directors at any annual, regular or special meeting, provided notice of such alteration or amendment has been given to each director in writing at least five (5) days prior to said meeting or has been waived by all the directors. EX-11 3 EXHIBIT 11 REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In millions, except per share data) EARNINGS PER SHARE In the first quarter of 1996, earnings per share equals net income, minus dividends on the Company's preferred stock ("PRIDES"), divided by the weighted- average number of common shares outstanding during the period. In the first quarter of 1995, earnings per share equals net income divided by the weighted- average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents outstanding was based on the assumed conversion of the PRIDES. For the purpose of this computation, the conversion rate of 0.93 share of common stock for each share of PRIDES was based on the average market value of the Company's common stock during the period ($50.65 per share). Common share equivalents relating to the PRIDES were not included in the first quarter of 1996 since their effect would have been anti-dilutive.
QUARTERS ENDED MARCH 31 -------------------------------------- 1996 1995 -------------------------------------- Weighted-average shares outstanding: Common shares 63,604,000 62,220,000 Common share equivalents - 10,261,000 -------------------------------------- Total 63,604,000 72,481,000 ====================================== Income before cumulative effect of accounting change $17 $82 Less preferred stock dividends 9 - -------------------------------------- $8 $82 -------------------------------------- Cumulative effect of accounting change (15) - -------------------------------------- ($7) $82 ====================================== Earnings per share: Income before cumulative effect of accounting change $0.12 $1.13 Cumulative effect of accounting change (0.24) - -------------------------------------- Net income (loss) ($0.12) $1.13 ======================================
EARNINGS PER SHARE (FULLY DILUTED): Earnings per share (fully diluted) equals net income divided by the weighted- average number of common shares and common share equivalents outstanding during the period. The number of common share equivalents 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 anti-dilutive in 1996 and was not material in 1995.
QUARTERS ENDED MARCH 31 -------------------------------------- 1996 1995 -------------------------------------- Weighted-average shares outstanding: Common shares 63,604,000 62,220,000 Common share equivalents 11,000,000 11,000,000 -------------------------------------- Total 74,604,000 73,220,000 -------------------------------------- Income before cumulative effect of accounting change $17 $82 Cumulative effect of accounting change (15) - -------------------------------------- Net income $2 $82 ====================================== Earnings per share (fully diluted): Income before cumulative effect of accounting change $0.23 $1.12 Cumulative effect of accounting change (0.21) - -------------------------------------- Net income $0.02 $1.12 ======================================
EX-27 4
5 This schedule contains summary financial information extracted from the Reynolds Metals Company Condensed Consolidated Balance Sheet (Unaudited) for March 31, 1996 and Consolidated Statement of Income (Unaudited) for the Quarter ended March 31, 1996 and is qualified in its entirety by reference to such financial statements. 1000000 3-MOS DEC-31-1996 MAR-31-1996 37 0 1086 20 962 2114 6640 3415 7844 1513 1839 0 505 942 1137 7844 1662 1675 1380 1380 117 0 42 25 8 17 0 0 (15) 2 (0.12) 0 This amount represents total receivables, since trade receivables are not broken out separately at interim dates, in accordance with S-X 10-01(2).
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