-----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, Qc8VB30Sj3S9NvhP5SE48Ou4g9KhumHCXnFOSKuA/XHabRqDfi0agkbQugR/MSV6 5wc7mv1CyaLq5+Fg7xbHPQ== 0000083604-98-000016.txt : 19980629 0000083604-98-000016.hdr.sgml : 19980629 ACCESSION NUMBER: 0000083604-98-000016 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980626 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-K/A SEC ACT: SEC FILE NUMBER: 001-01430 FILM NUMBER: 98655250 BUSINESS ADDRESS: STREET 1: 6601 W BROAD ST STREET 2: PO BOX 27003 CITY: RICHMOND STATE: VA ZIP: 23261 BUSINESS PHONE: 8042812000 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 TO FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 Commission File Number 1-1430 REYNOLDS METALS COMPANY A Delaware Corporation (IRS Employer Identification No. 54-0355135) 6601 West Broad Street, P. O. Box 27003, Richmond, Virginia 23261-7003 Telephone: (804) 281-2000 2 PART II Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Forward, futures, option and swap contracts are designated to manage market risks resulting from fluctuations in the aluminum, natural gas, foreign currency and debt markets. Contracts used to manage risks in these markets are not material. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) The consolidated financial statements and exhibits listed below are filed as a part of this report. (1) Consolidated Financial Statements: Previously filed Consolidated statement of income and retained earnings - Years ended December 31, 1997, 1996 and 1995. Consolidated balance sheet - December 31, 1997 and 1996. Consolidated statement of cash flows - Years ended December 31, 1997, 1996 and 1995. Consolidated statement of changes in stockholders' equity - Years ended December 31, 1997, 1996 and 1995. Notes to consolidated financial statements. Report of Ernst & Young LLP, Independent Auditors. (2) Financial Statement Schedules This report omits all schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission because they are not required, are inapplicable or the required information has otherwise been given. This report omits individual financial statements of Reynolds Metals Company because the restricted net assets (as defined in Accounting Series Release 302) of all subsidiaries included in the consolidated financial statements filed, in the aggregate, do not exceed 25% of the consolidated net assets shown in the consolidated balance sheet as of December 31, 1997. This report omits financial statements of all associated companies (20% to 50% owned) because no associated company is individually significant. (3) Exhibits EXHIBIT 2 - None. EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended. [FN] _______________________ Previously filed. 3 EXHIBIT 3.2 - By-laws, as amended. 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 December 1, 1997 (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 December 1, 1997, pertaining to Preferred Stock Purchase Rights, EXHIBIT 1) EXHIBIT 4.6 - 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 4.7 - Form of Fixed Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.3) EXHIBIT 4.8 - Form of Floating Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.4) EXHIBIT 4.9 - Form of Book-Entry Fixed Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.15) EXHIBIT 4.10 - Form of Book-Entry Floating Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.16) EXHIBIT 4.11 - Form of 9% Debenture due August 15, 2003. (File No. 1-1430, Form 8-K Report dated August 16, 1991, Exhibit 4(a)) EXHIBIT 4.12 - 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) ("RACC"), as amended. (File No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.13) EXHIBIT 4.13 - By-Laws of RACC, as amended. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1997, EXHIBIT 4.14) EXHIBIT 4.14 - Articles of Incorporation of Societe Canadienne de Metaux Reynolds, Ltee/Canadian Reynolds Metals Company, Ltd. ("CRM"), as amended. (File No. 1- 1430, Form 10-Q Report for the Quarter Ended September 30, 1997, EXHIBIT 4.15) [FN] _______________________ Previously filed. Incorporated by reference. 4 EXHIBIT 4.15 - By-Laws of CRM, as amended. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1997, EXHIBIT 4.16) EXHIBIT 4.16 - Indenture dated as of April 1, 1993 among RACC, 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 4.17 - First Supplemental Indenture, dated as of December 18, 1995 among RACC, 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 4.18 - Form of 6-5/8% Guaranteed Amortizing Note due July 15, 2002. (File No. 1-1430, Form 8- K Report dated July 14, 1993, EXHIBIT 4(d)) EXHIBIT 9 - None. EXHIBIT 10.1 - Reynolds Metals Company 1987 Nonqualified Stock Option Plan. (Registration Statement No. 33-13822 on Form S-8, dated April 28, 1987, EXHIBIT 28.1) EXHIBIT 10.2 - 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 10.3 - 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 10.4 - Agreement dated December 9, 1987 between Reynolds Metals Company and Jeremiah J. Sheehan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.9) EXHIBIT 10.5 - Supplemental Death Benefit Plan for Officers. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.8) EXHIBIT 10.6 - Financial Counseling Assistance Plan for Officers. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.11) EXHIBIT 10.7 - Management Incentive Deferral Plan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.12) EXHIBIT 10.8 - 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 10.9 - Form of Indemnification Agreement for Directors and Officers. (File No. 1-1430, Form 8- K Report dated April 29, 1987, EXHIBIT 28.3) [FN] ____________________________ Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 5 EXHIBIT 10.10 - Form of Executive Severance Agreement as amended between Reynolds Metals Company and key executive personnel, including each of the individuals listed in Item 4A of this report. EXHIBIT 10.11 - 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 10.12 - 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 10.13 - 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 10.14 - 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 10.15 - 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 10.16 - 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 10.17 - 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 10.18 - 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 10.19 - 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 10.20 - 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) [FN] ____________________________ Previously filed. Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 6 EXHIBIT 10.21 - 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 10.22 - Amendment to Reynolds Metals Company 1992 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.35) EXHIBIT 10.23 - 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 10.24 - 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 10.25 - 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 10.26 - 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 10.27 - 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 10.28 - 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 10.29 - Reynolds Metals Company 1996 Nonqualified Stock Option Plan. (Registration Statement No. 333-03947 on Form S-8, dated May 17, 1996, EXHIBIT 4.6) EXHIBIT 10.30 - Amendment to Reynolds Metals Company 1992 Nonqualified Stock Option Plan effective January 1, 1993. (Registration Statement No. 333-03947 on Form S-8, dated May 17, 1996, EXHIBIT 99) EXHIBIT 10.31 - Form of Stock Option Agreement, as approved May 17, 1996 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1996, EXHIBIT 10.41) [FN] ____________________________ Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 7 EXHIBIT 10.32 - Form of Three Party Stock Option Agreement, as approved May 17, 1996 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1996, EXHIBIT 10.42) EXHIBIT 10.33 - Stock Option Agreement dated August 30, 1996 between Reynolds Metals Company and Jeremiah J. Sheehan. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1996, EXHIBIT 10.43) EXHIBIT 10.34 - Amendment to Deferred Compensation Plan for Outside Directors effective August 15, 1996. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1996, EXHIBIT 10.44) EXHIBIT 10.35 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1996. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.38) EXHIBIT 10.36 - Amendment to Reynolds Metals Company Performance Incentive Plan effective January 1, 1996. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.39) EXHIBIT 10.37 - Reynolds Metals Company Supplemental Incentive Plan. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.40) EXHIBIT 10.38 - Reynolds Metals Company Stock Plan for Outside Directors. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.41) EXHIBIT 10.39 - Special Executive Severance Package for Certain Employees who Terminate Employment between January 1, 1997 and June 30, 1998, as approved by the Compensation Committee of the Company's Board of Directors on January 17, 1997. (File No. 1-1430, 1996 Form 10- K Report, EXHIBIT 10.42) EXHIBIT 10.40 - Special Award Program for Certain Executives or Key Employees, as approved by the Compensation Committee of the Company's Board of Directors on January 17, 1997. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.43) EXHIBIT 10.41 - Amendment to Reynolds Metals Company 1996 Nonqualified Stock Option Plan effective December 1, 1997. EXHIBIT 10.42 - Amendment to Reynolds Metals Company Restricted Stock Plan for Outside Directors effective December 1, 1997. EXHIBIT 11 - Omitted; see Item 8 for computation of earnings per share EXHIBIT 12 - Not applicable EXHIBIT 13 - Not applicable [FN] ____________________________ Previously filed. Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 8 EXHIBIT 16 - Not applicable EXHIBIT 18 - None EXHIBIT 21 - List of Subsidiaries of Reynolds Metals Company EXHIBIT 22 - None EXHIBIT 23 - Consent of Independent Auditors EXHIBIT 24 - Powers of Attorney EXHIBIT 27 - Financial Data Schedule EXHIBIT 99.1 - Reynolds Metals Company Savings and Investment Plan for Salaried Employees Annual Report on Form 11-K for the Fiscal Year Ended December 31, 1997 EXHIBIT 99.2 - Reynolds Metals Company Savings Plan for Hourly Employees Annual Report on Form 11-K for the Fiscal Year Ended December 31, 1997 EXHIBIT 99.3 - Employees Savings Plan Annual Report on Form 11-K for the Fiscal Year Ended December 31, 1997 [FN] ____________________________ Previously filed. Pursuant to Item 601 of Regulation S-K, certain instruments with respect to long-term debt of the Company are omitted because such debt does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any such instrument to the Commission upon request. (b) Reports on Form 8-K During the fourth quarter of 1997, the Registrant filed three Current Reports on Form 8-K with the Commission. The Registrant reported on the Form 8-K dated December 15, 1997 that (i) it had determined to keep and grow its packaging and consumer products business, (ii) it was discussing a potential agreement with Ball Corporation for the sale of substantially all of Reynolds' global can business, and (iii) if the sale of the can business is completed, the Registrant expects to apply a substantial portion of the proceeds to a stock repurchase program. The Registrant reported on the Form 8-K dated December 29, 1997 that the U.S. Justice Department had filed suit to block the proposed sale of the Registrant's Alloys complex in North Alabama to Alcoa. The Registrant reported on the Form 8-K dated December 30, 1997, that Alcoa had withdrawn from the Alloys complex transaction. All of the foregoing matters were reported under Item 5. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized. REYNOLDS METALS COMPANY By: /s/ Allen M. Earehart ---------------------------- Allen M. Earehart Vice President, Controller Date: June 26, 1998 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 EXHIBITS TO FORM 10-K/A AMENDMENT NO. 1 TO FORM 10-K For the fiscal year ended December 31, 1997 Commission File No. 1-1430 REYNOLDS METALS COMPANY Attached herewith are Exhibits 99.1, 99.2 and 99.3 INDEX EXHIBIT 2 - None. EXHIBIT 3.1 - Restated Certificate of Incorporation, as amended. EXHIBIT 3.2 - By-laws, as amended. 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 December 1, 1997 (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 December 1, 1997, pertaining to Preferred Stock Purchase Rights, EXHIBIT 1) EXHIBIT 4.6 - 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 4.7 - Form of Fixed Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.3) [FN] ______________________ Previously filed. Incorporated by reference. 2 EXHIBIT 4.8 - Form of Floating Rate Medium-Term Note. (Registration Statement No. 33-30882 on Form S-3, dated August 31, 1989, EXHIBIT 4.4) EXHIBIT 4.9 - Form of Book-Entry Fixed Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.15) EXHIBIT 4.10 - Form of Book-Entry Floating Rate Medium-Term Note. (File No. 1-1430, 1991 Form 10-K Report, EXHIBIT 4.16) EXHIBIT 4.11 - Form of 9% Debenture due August 15, 2003. (File No. 1-1430, Form 8-K Report dated August 16, 1991, Exhibit 4(a)) EXHIBIT 4.12 - 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) ("RACC"), as amended. (File No. 1-1430, 1995 Form 10-K Report, EXHIBIT 4.13) EXHIBIT 4.13 - By-Laws of RACC, as amended. (File No. 1-1430, Form 10-Q Report for the Quarter Ended March 31, 1997, EXHIBIT 4.14) EXHIBIT 4.14 - Articles of Incorporation of Societe Canadienne de Metaux Reynolds, Ltee/Canadian Reynolds Metals Company, Ltd. ("CRM"), as amended. (File No. 1- 1430, Form 10-Q Report for the Quarter Ended September 30, 1997, EXHIBIT 4.15) EXHIBIT 4.15 - By-Laws of CRM, as amended. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1997, EXHIBIT 4.16) EXHIBIT 4.16 - Indenture dated as of April 1, 1993 among RACC, 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 4.17 - First Supplemental Indenture, dated as of December 18, 1995 among RACC, 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 4.18 - Form of 6-5/8% Guaranteed Amortizing Note due July 15, 2002. (File No. 1-1430, Form 8- K Report dated July 14, 1993, EXHIBIT 4(d)) EXHIBIT 9 - None. EXHIBIT 10.1 - Reynolds Metals Company 1987 Nonqualified Stock Option Plan. (Registration Statement No. 33-13822 on Form S-8, dated April 28, 1987, EXHIBIT 28.1) [FN] ____________________________ Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 3 EXHIBIT 10.2 - 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 10.3 - 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 10.4 - Agreement dated December 9, 1987 between Reynolds Metals Company and Jeremiah J. Sheehan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.9) EXHIBIT 10.5 - Supplemental Death Benefit Plan for Officers. (File No. 1-1430, 1986 Form 10-K Report, EXHIBIT 10.8) EXHIBIT 10.6 - Financial Counseling Assistance Plan for Officers. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.11) EXHIBIT 10.7 - Management Incentive Deferral Plan. (File No. 1-1430, 1987 Form 10-K Report, EXHIBIT 10.12) EXHIBIT 10.8 - 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 10.9 - Form of Indemnification Agreement for Directors and Officers. (File No. 1-1430, Form 8-K Report dated April 29, 1987, EXHIBIT 28.3) EXHIBIT 10.10 - Form of Executive Severance Agreement as amended between Reynolds Metals Company and key executive personnel, including each of the individuals listed in Item 4A of this report. EXHIBIT 10.11 - 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 10.12 - 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 10.13 - 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 10.14 - 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) [FN] ____________________________ Previously filed. Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 4 EXHIBIT 10.15 - 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 10.16 - 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 10.17 - 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 10.18 - 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 10.19 - 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 10.20 - 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 10.21 - 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 10.22 - Amendment to Reynolds Metals Company 1992 Nonqualified Stock Option Plan effective August 19, 1994. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1994, EXHIBIT 10.35) EXHIBIT 10.23 - 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 10.24 - 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 10.25 - 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 10.26 - 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) [FN] ____________________________ Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 5 EXHIBIT 10.27 - 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 10.28 - 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 10.29 - Reynolds Metals Company 1996 Nonqualified Stock Option Plan. (Registration Statement No. 333-03947 on Form S-8, dated May 17, 1996, EXHIBIT 4.6) EXHIBIT 10.30 - Amendment to Reynolds Metals Company 1992 Nonqualified Stock Option Plan effective January 1, 1993. (Registration Statement No. 333-03947 on Form S-8, dated May 17, 1996, EXHIBIT 99) EXHIBIT 10.31 - Form of Stock Option Agreement, as approved May 17, 1996 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1996, EXHIBIT 10.41) EXHIBIT 10.32 - Form of Three Party Stock Option Agreement, as approved May 17, 1996 by the Compensation Committee of the Company's Board of Directors. (File No. 1-1430, Form 10-Q Report for the Quarter Ended June 30, 1996, EXHIBIT 10.42) EXHIBIT 10.33 - Stock Option Agreement dated August 30, 1996 between Reynolds Metals Company and Jeremiah J. Sheehan. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1996, EXHIBIT 10.43) EXHIBIT 10.34 - Amendment to Deferred Compensation Plan for Outside Directors effective August 15, 1996. (File No. 1-1430, Form 10-Q Report for the Quarter Ended September 30, 1996, EXHIBIT 10.44) EXHIBIT 10.35 - Amendment to Reynolds Metals Company New Management Incentive Deferral Plan effective January 1, 1996. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.38) EXHIBIT 10.36 - Amendment to Reynolds Metals Company Performance Incentive Plan effective January 1, 1996. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.39) EXHIBIT 10.37 - Reynolds Metals Company Supplemental Incentive Plan. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.40) EXHIBIT 10.38 - Reynolds Metals Company Stock Plan for Outside Directors. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.41) [FN] ____________________________ Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. 6 EXHIBIT 10.39 - Special Executive Severance Package for Certain Employees who Terminate Employment between January 1, 1997 and June 30, 1998, as approved by the Compensation Committee of the Company's Board of Directors on January 17, 1997. (File No. 1-1430, 1996 Form 10- K Report, EXHIBIT 10.42) EXHIBIT 10.40 - Special Award Program for Certain Executives or Key Employees, as approved by the Compensation Committee of the Company's Board of Directors on January 17, 1997. (File No. 1-1430, 1996 Form 10-K Report, EXHIBIT 10.43) EXHIBIT 10.41 - Amendment to Reynolds Metals Company 1996 Nonqualified Stock Option Plan effective December 1, 1997. EXHIBIT 10.42 - Amendment to Reynolds Metals Company Restricted Stock Plan for Outside Directors effective December 1, 1997. EXHIBIT 11 - Omitted; see Item 8 for computation of earnings per share EXHIBIT 12 - Not applicable EXHIBIT 13 - Not applicable EXHIBIT 16 - Not applicable EXHIBIT 18 - None EXHIBIT 21 - List of Subsidiaries of Reynolds Metals Company EXHIBIT 22 - None EXHIBIT 23 - Consent of Independent Auditors EXHIBIT 24 - Powers of Attorney EXHIBIT 27 - Financial Data Schedule EXHIBIT 99.1 - Reynolds Metals Company Savings and Investment Plan for Salaried Employees Annual Report on Form 11-K for the Fiscal Year Ended December 31, 1997 EXHIBIT 99.2 - Reynolds Metals Company Savings Plan for Hourly Employees Annual Report on Form 11-K for the Fiscal Year Ended December 31, 1997 EXHIBIT 99.3 - Employees Savings Plan Annual Report on Form 11-K for the Fiscal Year Ended December 31, 1997 [FN] ____________________________ Previously filed. Incorporated by reference. Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K. EX-99 2 EXHIBIT 99.1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 1-1430 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: REYNOLDS METALS COMPANY SAVINGS AND INVESTMENT PLAN FOR SALARIED EMPLOYEES B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: REYNOLDS METALS COMPANY 6601 West Broad Street P. O. Box 27003 Richmond, Virginia 23261-7003 2 REQUIRED INFORMATION FINANCIAL STATEMENTS AND EXHIBITS FINANCIAL STATEMENTS Page No. Report of Independent Auditors........................... F-1 Audited Financial Statements Statements of Net Assets Available for Plan Benefits, with Fund Information.................. F-2 Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information.............. F-4 Notes to Financial Statements........................... F-5 EXHIBITS Exhibit A Consent of Independent Auditors 3 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. REYNOLDS METALS COMPANY SAVINGS AND INVESTMENT PLAN FOR SALARIED EMPLOYEES By: /s/ F. Robert Newman --------------------------------- F. Robert Newman Vice President, Human Resources Reynolds Metals Company and Member, Savings and Investment Plan Committee DATE: June 24, 1998 F-1 Report of Ernst & Young LLP, Independent Auditors Board of Directors Reynolds Metals Company We have audited the accompanying statements of net assets available for plan benefits of the Reynolds Metals Company Savings and Investment Plan for Salaried Employees as of December 31, 1997 and 1996, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1997. These financial statements are the responsibility of the management of Reynolds Metals Company, the Plan's sponsor. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1997 and 1996, and the changes in its net assets available for plan benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The Fund Information in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The Fund Information has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ ERNST & YOUNG LLP Richmond, Virginia June 19, 1998 F-2 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Statement of Net Assets Available for Plan Benefits, with Fund Information December 31, 1997 (Dollars in Thousands)
Fund Information --------------------------------------------------------------------------------- Non- Participant Participant Directed Directed --------------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Reynolds Stock Equities Investment Income Equities Equities Loan Stock Fund Fund Fund Fund Fund Fund Fund Fund Total -------------------------------------------------------------------------------------------- Assets Investment in Master Trust $76,209 $95,078 $33,492 $92,267 $8,097 $23,919 $10,405 $106,153 $445,620 Accrued income 431 - - - - - - 601 1,032 Contributions receivable 208 62 126 260 54 11 - 355 1,076 -------------------------------------------------------------------------------------------- Net assets available for plan benefits $76,848 $95,140 $33,618 $92,527 $8,151 $23,930 $10,405 $107,109 $447,728 ============================================================================================ See accompanying notes.
F-3 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Statement of Net Assets Available for Plan Benefits, with Fund Information December 31, 1996 (Dollars in Thousands)
Fund Information --------------------------------------------------------------------------------- Non- Participant Participant Directed Directed --------------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Reynolds Stock Equities Investment Income Equities Equities Loan Stock Fund Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------------- Assets Investment in Master Trust $55,482 $71,995 $27,906 $ 98,504 $7,401 $15,271 $11,327 $103,780 $391,666 Accrued income 340 - - - - - - 637 977 Contributions receivable 107 202 177 137 39 95 - 146 903 Receivable from Executive Life Insurance Company - - - 2,565 - - - - 2,565 --------------------------------------------------------------------------------------------- Total assets 55,929 72,197 28,083 101,206 7,440 15,366 11,327 104,563 396,111 Liabilities Payable to Reynolds Metals Company - - - 2,565 - - - - 2,565 -------------------------------------------------------------------------------------------- Net assets available for plan benefits $55,929 $72,197 $28,083 $ 98,641 $7,440 $15,366 $11,327 $104,563 $393,546 ============================================================================================ See accompanying notes.
F-4 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information Year Ended December 31, 1997 (Dollars in Thousands)
Fund Information --------------------------------------------------------------------------------- Non- Participant Participant Directed Directed --------------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Reynolds Stock Equities Investment Income Equities Equities Loan Stock Fund Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------------- Additions to net assets: Net Investment gain from Master Trust (Note 3): $ 4,535 $24,006 $ 5,927 $ 6,916 $ 221 $ 4,984 $ 944 $ 9,496 $ 57,029 Contributions: Employer - - - - - - - 6,983 6,983 Employee 3,588 6,771 3,219 4,371 1,283 2,660 - - 21,892 --------------------------------------------------------------------------------------------- 3,588 6,771 3,219 4,371 1,283 2,660 - 6,983 28,875 Assets transferred from other plans 11,357 - - - - - - - 11,357 --------------------------------------------------------------------------------------------- Total Additions 19,480 30,777 9,146 11,287 1,504 7,644 944 16,479 97,261 Deductions from net assets: Withdrawals by participants 5,861 6,768 2,287 10,916 722 1,375 788 12,688 41,405 Assets transferred to other plans - 299 78 452 24 30 106 685 1,674 --------------------------------------------------------------------------------------------- Total Deductions 5,861 7,067 2,365 11,368 746 1,405 894 13,373 43,079 Interfund transfers 7,300 (767) (1,246) (6,033) (47) 2,325 (972) (560) - --------------------------------------------------------------------------------------------- Net increase (decrease) 20,919 22,943 5,535 (6,114) 711 8,564 (922) 2,546 54,182 Net assets available for plan benefits: Beginning of year 55,929 72,197 28,083 98,641 7,440 15,366 11,327 104,563 393,546 --------------------------------------------------------------------------------------------- End of year $76,848 $95,140 $33,618 $92,527 $8,151 $23,930 $10,405 $107,109 $447,728 ============================================================================================= See accompanying notes.
F-5 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Notes to Financial Statements (Dollars in Thousands) December 31, 1997 1. Significant Accounting Policies The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The accounting records of the Reynolds Metals Company Savings and Investment Plan for Salaried Employees ("Plan") are maintained on the accrual basis. All securities transactions are recorded as of the trade date. Investments in Reynolds Metals Company Common Stock (stated at fair value) are valued at the last reported sales price on the last business day of the year. Investments in mutual funds are measured by quoted market prices and are reported at aggregate fair value at year-end. Guaranteed investment contracts with insurance companies are reported at "contract value," which equals cost plus accrued income. Structured investment contracts are reported at fair value, which in the case of structured investment contracts equals contract value. 2. Summary of Significant Plan Provisions Reynolds Metals Company (the "Company") established the Plan effective July 1, 1978, covering salaried employees of the Company and certain of its subsidiaries and affiliates. The Plan is a defined contribution plan under the Employee Retirement Income Security Act of 1974 ("ERISA") and qualifies as a "cash or deferred" arrangement under Section 401(k) of the Internal Revenue Code. A complete description of the Plan is contained in the Summary Plan Description and in the Plan document, copies of which are available from the Company. Plan participation is available to eligible employees who have completed 30 days of service and is voluntary. A participant is entitled to make payroll contributions to the Plan in specified amounts ranging from 1% to 16% of compensation in 1% increments. F-6 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Notes to Financial Statements (continued) 2. Summary of Significant Plan Provisions (continued) The Company contributes an amount equal to 50% of each participating employee's payroll contributions up to 6% of compensation. The Company may also contribute up to an additional 50% of each participating employee's payroll contributions up to 6% of compensation. The Company did not elect to make an additional matching contribution for 1997 or 1996. Participants may contribute 1% to 16% (in 1% increments) of any profit sharing award or gainsharing payment received. Such contributions are not matched by the Company. Participants may elect to make their contributions on a before or after tax basis or a combination thereof. Company matching contributions are made on a "pretax" basis. Highly compensated participants may be required to reduce the amount of "pretax" contributions made to or held by the Plan on their behalf to permit the Plan to satisfy the nondiscrimination requirements of Section 401(k) of the Internal Revenue Code. Participants in the Plan are fully vested in their account balances. Withdrawals and distributions are handled in accordance with the Plan provisions and are subject to certain regulatory restrictions. The trustee holds all of the Plan's investment assets and executes transactions therein. Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. The Company is the Plan adminstrator and bears the related costs, except for investment-related and trustee fees, which are paid by the Plan. 3. Commingled Master Trust Investments As of January 1, 1996, all of the assets of the Plan were transferred into a Master Trust under a Master Trust Agreement between Reynolds Metals Company and The Northern Trust Company, as trustee, and are commingled with the assets of three other savings plans of the Company and one of its subsidiaries. All the investments of the Plan were held in the Master Trust as of December 31, 1997 and 1996. Net assets and net investment gains from the Master Trust are allocated to participating plans based on the aggregate account balances of individual participants in each plan. F-7 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued) Substantially all of the assets held in the Diversified Equities Fund and the Balanced Investment Fund are invested in the Vanguard Institutional Index Fund and the Vanguard STAR Fund, respectively. These are no-load mutual funds held and managed by The Vanguard Group of Investment Companies. Substantially all of the assets held in the International Equities Fund and the Small Capitalization Equities Fund are invested in the T. Rowe Price Foreign Equity Fund and the T. Rowe Price Small-Cap Value Fund, respectively. These are no- load mutual funds held and managed by T. Rowe Price Associates, Inc. The assets held in the Interest Income Fund generally are invested in guaranteed investment contracts ("GICs") at a fixed rate of return and structured investment contracts ("SICs") with various insurance companies and banks. SICs represent a diversified portfolio of high grade investments held in the name of the Plan in conjunction with a corresponding contract with the issuer of the SIC to provide a fixed or variable rate of return (based on the investment experience and reset quarterly) on the cost of the portfolio. GICs and SICs generally provide for the full repayment of principal and interest. Upon the occurrence of certain events (including layoffs by the Company or its applicable affiliates), however, market value of the GIC or SIC, if lower than its book value, may be repaid (a "Market Value Adjustment"). Currently, in the opinion of the Company, the likelihood of a material loss to the Plan as a result of such a Market Value Adjustment is remote. Interest is credited to participants' accounts on the dollar-weighted average (blended rate) basis. The annual rate of return on these contracts during 1997 and 1996 was approximately 6.3% and 6.4%, respectively. The current yield on December 31, 1997 was 6.4% (6.4% on December 31, 1996). The fair value of the Plan's GICs approximates contract value. No individual SIC or GIC exceeded 5% of the Master Trust's assets, except for a SIC with Transamerica Life with a balance of approximately $39,000 at December 31, 1997. Cash and cash equivalents of the Master Trust are invested in a short-term investment fund managed by The Northern Trust Company. F-8 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued) In April 1991, Executive Life Insurance Company ("Executive Life"), the issuer of one of the guaranteed investment contracts then held by the Plan, was placed into conservator ship. The Company and the Plan entered into an agreement on August 1, 1991, whereby the Company was obligated to provide interest-free loans to the Plan for any amounts due under the guaranteed investment contract which Executive Life failed to pay. As of December 31, 1997, the Company had advanced to the Plan all amounts due under this contract. The Plan is obligated to repay the loans to the extent amounts are subsequently recovered from, or on behalf of, Executive Life, and any remaining balance will be forgiven by the Company. As of December 31, 1997, no additional recoveries from Executive Life are expected. During 1997, certain assets of the Plan were transferred into other plans and from other plans of the Company as a result of employee transfers. There was no effect on any participant's accounts as a result of the transfers. Summarized financial fund information of the commingled accounts within the Master Trust is presented below:
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- MASTER TRUST NET ASSETS-1997 Assets Accrued Income $ 1,082 $ 1,082 Cash and cash equivalents 2,247 $ 47 $ 11 $ 40,726 $ 6 $ 25 43,062 Contributions receivable 598 195 215 671 79 56 $ 13 1,827 Investments: Common stock 189,068 - - - - - - 189,068 Investment contracts - - - 195,952 - - - 195,952 Mutual funds - 131,723 46,727 - 10,219 34,639 - 223,308 Loans to participants - - - - - - 19,962 19,962 --------------------------------------------------------------------------------------- Master Trust net assets $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261 ======================================================================================= Portion of Master Trust allocable to the Plan $183,957 $ 95,140 $33,618 $ 92,527 $ 8,151 $23,930 $10,405 $447,728 Percent 95% 72% 72% 39% 79% 69% 52% 66%
F-9 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued)
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- MASTER TRUST NET ASSETS-1996 Assets Accrued Income $ 997 $ 997 Cash and cash equivalents 2,213 $ 48 $ 3 $ 17,070 $ 4 $ 3 19,341 Contributions receivable 259 209 183 143 56 166 1,016 Investments: Common stock 160,346 - - - - - 160,346 Investment contracts - - - 220,145 - - 220,145 Mutual funds - 88,863 36,576 - 8,640 19,993 154,072 Loans to participants - - - - - - $19,326 19,326 --------------------------------------------------------------------------------------- Total assets 163,815 89,120 36,762 237,358 8,700 20,162 19,326 575,243 Liabilities Accounts payable 1 - - 12 - - - 13 --------------------------------------------------------------------------------------- Master Trust net assets $163,814 $89,120 $36,762 $237,346 $8,700 $20,162 $19,326 $575,230 ======================================================================================= Portion of Master Trust allocable to the Plan $160,492 $72,197 $28,083 $ 98,641 $7,440 $15,366 $11,327 $393,546 Percent 98% 81% 76% 42% 86% 76% 59% 68%
F-10 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued)
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- CHANGES IN MASTER TRUST ASSETS -1997 Additions: Contributions from plans $ 11,682 $ 13,182 $ 5,775 $ 28,736 $ 2,090 $ 4,979 $ 66,444 Net realized and unrealized appreciation (depreciation) of investments 9,977 29,085 6,564 - 109 6,267 52,002 Interest and dividends 4,107 1,976 1,427 15,552 135 549 $ 1,707 25,453 Assets transferred into Master Trust 11,809 - - - - - 25 11,834 --------------------------------------------------------------------------------------- 37,575 44,243 13,766 44,288 2,334 11,795 1,732 155,733 --------------------------------------------------------------------------------------- Deductions: Distributions to plans 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702 Administrative expenses - - - - - - - - --------------------------------------------------------------------------------------- 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702 Interfund transfers-net 10,617 6,197 (788) (20,669) 70 4,386 187 - --------------------------------------------------------------------------------------- Net additions 29,181 42,845 10,191 3 1,604 14,558 649 99,031 Master Trust net assets at beginning of period 163,814 89,120 36,762 237,346 8,700 20,162 19,326 575,230 --------------------------------------------------------------------------------------- Master Trust net assets at end of period $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261 =======================================================================================
F-11 Reynolds Metals Company Savings and Investment Plan for Salaried Employees Notes to Financial Statements (continued) 4. Differences Between Financial Statements and Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 1997 1996 --------------------- Net assets available for benefits per the financial statements $447,728 $393,546 Amounts allocated to withdrawn participants 870 329 --------------------- Net assets available for benefits per the Form 5500 $446,858 $393,217 =====================
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
Year ended December 31, 1997 -------------- Benefits paid to participants per the financial statements $41,405 Add: Amounts allocated on Form 5500 to withdrawn participants in the current year 870 Less: Amounts allocated on Form 5500 to withdrawn participants in the prior year (329) -------------- Benefits paid to participants per the Form 5500 $41,946 ==============
5. Income Taxes The Internal Revenue Service has determined that the Plan qualifies under Section 401(a) of the Internal Revenue Code (the "Code"). As long as the Plan continues to be qualified, under present Federal income tax laws and regulations participants will not be taxed on employer contributions or investment earnings allocated to their account. Participants will normally be subject to tax thereon at such time as they receive distributions from the Plan. As long as the Plan continues to be qualified, the Plan will not be taxed on its dividend and interest income or on any capital gains realized by it or on any unrealized appreciation of investments. INDEX TO EXHIBITS Exhibit A Consent of Independent Auditors EXHIBIT A CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-20498) pertaining to the Reynolds Metals Company Savings and Investment Plan for Salaried Employees and in the related Prospectus of our report dated June 19, 1998, with respect to the financial statements of the Reynolds Metals Company Savings and Investment Plan for Salaried Employees included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ ERNST & YOUNG LLP Richmond, Virginia June 19, 1998 EX-99 3 EXHIBIT 99.2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 1-1430 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: REYNOLDS METALS COMPANY SAVINGS PLAN FOR HOURLY EMPLOYEES B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: REYNOLDS METALS COMPANY 6601 West Broad Street P. O. Box 27003 Richmond, Virginia 23261-7003 2 REQUIRED INFORMATION FINANCIAL STATEMENTS AND EXHIBITS FINANCIAL STATEMENTS Page No. Report of Independent Auditors............................ F-1 Audited Financial Statements Statements of Net Assets Available for Plan Benefits, with Fund Information................... F-2 Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information............... F-4 Notes to Financial Statements............................ F-5 EXHIBITS Exhibit A Consent of Independent Auditors 3 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. REYNOLDS METALS COMPANY SAVINGS PLAN FOR HOURLY EMPLOYEES By: /s/ F. Robert Newman ----------------------------------- F. Robert Newman Vice President, Human Resources Reynolds Metals Company and Member, Plan Committee for Hourly Savings Plan DATE: June 24, 1998 F-1 Report of Ernst & Young LLP, Independent Auditors Board of Directors Reynolds Metals Company We have audited the accompanying statements of net assets available for plan benefits of the Reynolds Metals Company Savings Plan for Hourly Employees as of December 31, 1997 and 1996, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1997. These financial statements are the responsibility of the management of Reynolds Metals Company, the Plan's sponsor. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1997 and 1996, and the changes in its net assets available for plan benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The Fund Information in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The Fund Information has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ ERNST & YOUNG LLP Richmond, Virginia June 19, 1998 F-2 Reynolds Metals Company Savings Plan for Hourly Employees Statement of Net Assets Available for Plan Benefits, with Fund Information (Dollars in Thousands)
December 31, 1997 --------------------------------------------------------------------------------------- Fund Information --------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- Assets Investment in Master Trust $7,638 $34,654 $12,428 $139,651 $1,953 $10,108 $9,119 $215,551 Accrued income 43 - - - - - - 43 Contribution receivable 30 125 84 404 23 43 13 722 --------------------------------------------------------------------------------------- Net assets available for plan benefits $7,711 $34,779 $12,512 $140,055 $1,976 $10,151 $9,132 $216,316 ======================================================================================= See accompanying notes.
F-3 Reynolds Metals Company Savings Plan for Hourly Employees Statement of Net Assets Available for Plan Benefits, with Fund Information (Dollars in Thousands) December 31, 1996 --------------------------------------------------------------------------------------- Fund Information --------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- Assets Investment in Master Trust $3,061 $16,274 $8,334 $134,757 $1,189 $4,644 $7,744 $176,003 Accrued income 19 - - - - - - 19 --------------------------------------------------------------------------------------- Total assets 3,080 16,274 8,334 134,757 1,189 4,644 7,744 176,022 --------------------------------------------------------------------------------------- Liabilities Accounts payable and other 1 - - 12 - - - 13 --------------------------------------------------------------------------------------- Net assets available for plan benefits $3,079 $16,274 $8,334 $134,745 $1,189 $4,644 $7,744 $176,009 ======================================================================================= See accompanying notes.
F-4 Reynolds Metals Company Savings Plan for Hourly Employees Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information (Dollars in Thousands)
Year Ended December 31, 1997 --------------------------------------------------------------------------------------- Fund Information --------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- Additions to net assets: Net investment gain (loss) from Master Trust (Note 3): $ (48) $ 6,658 $ 1,945 $ 8,343 $ 23 $ 1,718 $ 730 $ 19,369 Assets received from other plans 80 - - - - - - 80 Contributions: Employer 366 2,236 800 10,720 264 814 - 15,200 Employee 601 3,759 1,533 12,822 463 1,333 - 20,511 --------------------------------------------------------------------------------------- 967 5,995 2,333 23,542 727 2,147 - 35,711 --------------------------------------------------------------------------------------- Total Additions 999 12,653 4,278 31,885 750 3,865 730 55,160 Deductions from net assets: Withdrawals by participants 295 733 448 12,134 71 234 425 14,340 Assets transferred to other plans - 35 27 398 11 27 15 513 Administrative expenses - - - - - - - - --------------------------------------------------------------------------------------- Total Deductions 295 768 475 12,532 82 261 440 14,853 Interfund transfers 3,928 6,620 375 (14,043) 119 1,903 1,098 - --------------------------------------------------------------------------------------- Net increase 4,632 18,505 4,178 5,310 787 5,507 1,388 40,307 Net assets available for plan benefits: Beginning of year 3,079 16,274 8,334 134,745 1,189 4,644 7,744 176,009 --------------------------------------------------------------------------------------- End of year $7,711 $34,779 $12,512 $140,055 $1,976 $10,151 $9,132 $216,316 ======================================================================================= See accompanying notes.
F-5 Reynolds Metals Company Savings Plan for Hourly Employees Notes to Financial Statements December 31, 1997 (Dollars in Thousands) 1. Significant Accounting Policies The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The accounting records of the Reynolds Metals Company Savings Plan for Hourly Employees ("Plan") are maintained on the accrual basis. All securities transactions are recorded as of the trade date. Investments in Reynolds Metals Company Common Stock (stated at fair value) are valued at the last reported sales price on the last business day of the year. Investments in mutual funds are measured by quoted market prices and are reported at aggregate fair value at year-end. Guaranteed investment contracts with insurance companies are reported at "contract value," which equals cost plus accrued income. Structured investment contracts are reported at fair value, which in the case of structured investment contracts equals contract value. 2. Summary of Significant Plan Provisions Reynolds Metals Company (the "Company") established the Plan effective January 1, 1986, covering hourly employees of the Company and certain of its subsidiaries (each an "Employer") who are in a bargaining unit covered by a labor agreement that incorporates the Plan by reference. The Plan is a defined contribution plan under the Employee Retirement Income Security Act of 1974 ("ERISA") and qualifies as a "cash or deferred" arrangement under Section 401(k) of the Internal Revenue Code. A complete description of the Plan is contained in the Summary Plan Description and in the Plan document, copies of which are available from the Company. Hourly employees who are in a bargaining unit covered by a collective bargaining agreement that incorporates the Plan by reference will become eligible to participate in the Plan on the later of (a) 30 days after beginning their employment with an Employer, or (b) the date on which the collective bargaining agreement under which they are covered first incorporates the Plan by reference. Plan participation is voluntary. F-6 Reynolds Metals Company Savings Plan for Hourly Employees Notes to Financial Statements (continued) 2. Summary of Significant Plan Provisions (continued) Each collective bargaining agreement that incorporates the Plan by reference provides that participants may elect to make payroll contributions to the Plan in specified amounts ranging from 1% to 12% of compensation in 1% increments. Each such collective bargaining agreement may also provide for the following types of contributions: (a) Company Matching Contributions: At certain bargaining units, the applicable Employer will, subject to certain limitations, contribute to the Plan on behalf of each eligible participant, a fixed percentage of a portion of the payroll contributions by the participant. (b) Negotiated Deferral Contributions: At certain bargaining units, the applicable Employer will make a contribution to a participant's account based on the number of hours worked by each active employee participating in the Plan. (c) Additional Voluntary Contributions: Eligible employees who receive a profit-sharing award, gainsharing payment or other designated type of lump sum payment may contribute between 10% and 50% of the award and/or payment (in 10% increments) to the Plan. Such contributions are not matched by the Company or any other Employer. Participants may elect to make their contributions on a before or after tax basis or a combination thereof. Employer contributions (matching and negotiated deferral) are made on a "pretax" basis. Highly compensated participants may be required to reduce the amount of "pretax" contributions made to or held by the Plan on their behalf to permit the Plan to satisfy the nondiscrimination requirements of Section 401(k) of the Internal Revenue Code. Participants are fully vested in their account balances. Withdrawals and distributions are handled in accordance with the Plan provisions and are subject to certain regulatory restrictions. The trustee holds all of the Plan's investment assets and executes transactions therein. Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA and subject to the terms of any applicable collective bargaining agreement. F-7 Reynolds Metals Company Savings Plan for Hourly Employees Notes to Financial Statements (continued) 2. Summary of Significant Plan Provisions (continued) The Company is the Plan administrator and bears the related costs, except for investment-related and trustee fees, which are paid by the Plan. 3. Commingled Master Trust Investments All of the investments of the Plan as of December 31, 1997 and 1996 were held in a Master Trust under a Master Trust Agreement between Reynolds Metals Company and The Northern Trust Company, as trustee, and are commingled with the assets of three other savings plans of the Company and one of its subsidiaries. Net assets and net investment gains from the Master Trust are allocated to participating plans based on the aggregate account balance of individual participants in each Plan. Substantially all the assets held in the Diversified Equities Fund and the Balanced Investment Fund are invested in the Vanguard Institutional Index Fund and the Vanguard STAR Fund, respectively. These are no-load mutual funds held and managed by The Vanguard Group of Investment Companies. Substantially all of the assets held in the International Equities Fund and the Small Capitalization Equities Fund are invested in the T. Rowe Price Foreign Equity Fund and the T. Rowe Price Small-Cap Value Fund, respectively. These are no- load mutual funds held and managed by T. Rowe Price Associates, Inc. The assets of the Interest Income Fund generally are invested in guaranteed investment contracts ("GICs") at fixed rates of return and structured investment contracts ("SICs") with various insurance companies and banks. SICs represent high grade investments held in the name of the Master Trust in conjunction with a corresponding contract with the issuer of the SIC to provide a fixed or variable rate of return (based on investment experience and reset quarterly) on the cost of the investment. GICs and SICs generally provide for the full repayment of principal and interest. Upon the occurrence of certain events (including layoffs by the Company or its applicable affiliates), however, market value of the GIC or SIC, if lower than its book value, may be repaid (a "Market Value Adjustment"). Currently, in the opinion of the Company, the likelihood of a material loss to the Plan as a result of such a Market Value Adjustment is remote. The annual rate of return on these contracts during 1997 and 1996 was 6.3% and 6.3%, respectively. The current yield on these contracts at December 31, 1997 was 6.3% (6.4% at December 31, 1996). Interest is credited to participants' accounts on the dollar-weighted average (blended rate) basis. The fair value of the Plan's GICs approximates contract value. F-8 Reynolds Metals Company Savings Plan for Hourly Employees Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued) No individual SIC or GIC exceeded 5% of the Master Trust's assets, except for a SIC with Transamerica Life with a balance of approximately $39,000. Cash and cash equivalents of the Master Trust are invested in a short-term investment fund managed by The Northern Trust Company. During 1997 and 1996, certain assets of the Plan were transferred into other plans and from other plans of the Company as a result of employee transfers. There was no effect on any participant's accounts as a result of the transfer. Summarized financial fund information of the commingled accounts within the Master Trust is presented below:
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- MASTER TRUST NET ASSETS-1997 Assets Accrued Income $ 1,082 $ 1,082 Cash and cash equivalents 2,247 $ 47 $ 11 $ 40,726 $ 6 $ 25 43,062 Contributions receivable 598 195 215 671 79 56 $ 13 1,827 Investments: Common stock 189,068 - - - - - - 189,068 Investment contracts - - - 195,952 - - - 195,952 Mutual funds - 131,723 46,727 - 10,219 34,639 - 223,308 Loans to participants - - - - - - 19,962 19,962 --------------------------------------------------------------------------------------- Master Trust net assets $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261 ======================================================================================= Portion of Master Trust allocable to the Plan $ 7,711 $ 34,779 $12,512 $140,055 $ 1,976 $10,151 $ 9,132 $216,316 Percent 4% 26% 26% 59% 19% 29% 46% 32%
F-9 Reynolds Metals Company Savings Plan for Hourly Employees Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued)
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- MASTER TRUST NET ASSETS-1996 Assets Accrued Income $ 997 $ 997 Cash and cash equivalents 2,213 $ 48 $ 3 $ 17,070 $ 4 $ 3 19,341 Contributions receivable 259 209 183 143 56 166 1,016 Investments: Common stock 160,346 - - - - - 160,346 Investment contracts - - - 220,145 - - 220,145 Mutual funds - 88,863 36,576 - 8,640 19,993 154,072 Loans to participants - - - - - - $19,326 19,326 --------------------------------------------------------------------------------------- Total assets 163,815 89,120 36,762 237,358 8,700 20,162 19,326 575,243 Liabilities Accounts payable 1 - - 12 - - - 13 --------------------------------------------------------------------------------------- Master Trust net assets $163,814 $89,120 $36,762 $237,346 $8,700 $20,162 $19,326 $575,230 ======================================================================================= Portion of Master Trust allocable to the Plan $ 3,079 $16,274 $ 8,334 $134,745 $1,189 $4,644 $ 7,744 $176,009 Percent 2% 18% 23% 57% 14% 23% 40% 31%
F-10 Reynolds Metals Company Savings Plan for Hourly Employees Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued)
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- CHANGES IN MASTER TRUST ASSETS -1997 Additions: Contributions from plans $ 11,682 $ 13,182 $ 5,775 $ 28,736 $ 2,090 $ 4,979 $ 66,444 Net realized and unrealized appreciation (depreciation) of investments 9,977 29,085 6,564 - 109 6,267 52,002 Interest and dividends 4,107 1,976 1,427 15,552 135 549 $ 1,707 25,453 Assets transferred into Master Trust 11,809 - - - - - 25 11,834 --------------------------------------------------------------------------------------- 37,575 44,243 13,766 44,288 2,334 11,795 1,732 155,733 --------------------------------------------------------------------------------------- Deductions: Distributions to plans 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702 Administrative expenses - - - - - - - - --------------------------------------------------------------------------------------- 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702 Interfund transfers-net 10,617 6,197 (788) (20,669) 70 4,386 187 - --------------------------------------------------------------------------------------- Net additions 29,181 42,845 10,191 3 1,604 14,558 649 99,031 Master Trust net assets at beginning of period 163,814 89,120 36,762 237,346 8,700 20,162 19,326 575,230 --------------------------------------------------------------------------------------- Master Trust net assets at end of period $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261 =======================================================================================
F-11 Reynolds Metals Company Savings Plan for Hourly Employees Notes to Financial Statements (continued) 4. Differences Between Financial Statements and Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31 1997 1996 -------------------- Net assets available for benefits per the financial statements $216,316 $176,009 Amounts allocated to withdrawn participants 374 172 -------------------- Net assets available for benefits per the Form 5500 $215,942 $175,837 ====================
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
December 31 1997 ------------- Benefits paid to participants per the financial statements $14,340 Add: Amounts allocated on Form 5500 to withdrawn participants in the current year 374 Less: Amounts allocated on Form 5500 to withdrawn participants in the prior year (172) ------------- Benefits paid to participants per the Form 5500 $14,542 =============
5. Income Tax Status The Internal Revenue Service has determined that the Plan qualifies under Section 401(a) of the Internal Revenue Code (the "Code"). As long as the Plan continues to be qualified, under Federal income tax laws and regulations participants will not be taxed on employer contributions or investment earnings allocated to their account. Participants will normally be subject to tax thereon at such time as they receive distributions from the Plan. As long as the Plan continues to be qualified, the Plan will not be taxed on its dividend and interest income or any capital gains realized by it or any unrealized appreciation of investments. INDEX TO EXHIBITS Exhibit A Consent of Independent Auditors EXHIBIT A CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-66032) pertaining to the Reynolds Metals Company Savings Plan for Hourly Employees and in the related Prospectus of our report dated June 19, 1998, with respect to the financial statements of the Reynolds Metals Company Savings Plan for Hourly Employees included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ ERNST & YOUNG LLP Richmond, Virginia June 19, 1998 EX-99 4 EXHIBIT 99.3 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 1-1430 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: EMPLOYEES SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: REYNOLDS METALS COMPANY 6601 West Broad Street P. O. Box 27003 Richmond, Virginia 23261-7003 2 REQUIRED INFORMATION FINANCIAL STATEMENTS AND EXHIBITS FINANCIAL STATEMENTS Page No. Report of Independent Auditors............................ F-1 Audited Financial Statements Statement of Net Assets Available for Plan Benefits, with Fund Information................... F-2 Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information............... F-4 Notes to Financial Statements............................ F-5 EXHIBITS Exhibit A Consent of Independent Auditors 3 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, Reynolds Metals Company, which administers the Plan, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. EMPLOYEES SAVINGS PLAN By: /s/ F. Robert Newman --------------------------------- F. Robert Newman Vice President, Human Resources Reynolds Metals Company DATE: June 24, 1998 F-1 Report of Ernst & Young LLP, Independent Auditors Board of Directors Reynolds Metals Company We have audited the accompanying statements of net assets available for plan benefits of the Employees Savings Plan as of December 31, 1997 and 1996, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1997. These financial statements are the responsibility of the management of Reynolds Metals Company, the Plan's sponsor. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1997 and 1996, and the changes in its net assets available for plan benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The Fund Information in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The Fund Information has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ ERNST & YOUNG LLP Richmond, Virginia June 19, 1998 F-2 Employees Savings Plan Statement of Net Assets Available for Plan Benefits, with Fund Information (Dollars in Thousands)
December 31, 1997 --------------------------------------------------------------------------------------- Fund Information --------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- Assets Investment in Master Trust $1,315 $2,038 $818 $4,676 $175 $637 $438 $10,097 Accrued income 7 - - - - - - 7 Contributions receivable 5 8 5 7 2 2 - 29 --------------------------------------------------------------------------------------- Net assets available for plan benefits $1,327 $2,046 $823 $4,683 $177 $639 $438 $10,133 ======================================================================================= See accompanying notes.
F-3 Employees Savings Plan Statement of Net Assets Available for Plan Benefits, with Fund Information (Dollars in Thousands)
December 31, 1996 ------------------------------------------------------------------------------------- Fund Information --------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total ------------------------------------------------------------------------------------- Assets Investment in Master Trust $242 $642 $342 $3,875 $70 $150 $255 $5,576 Accrued income 1 - - - - - - 1 Contributions receivable - 7 3 6 1 2 - 19 --------------------------------------------------------------------------------------- Net assets available for plan benefits $243 $649 $345 $3,881 $71 $152 $255 $5,596 ======================================================================================= See accompanying notes.
F-4 Employees Savings Plan Statement of Changes in Net Assets Available for Plan Benefits, with Fund Information (Dollars in Thousands)
Year ended December 31, 1997 --------------------------------------------------------------------------------------- Fund Information --------------------------------------------------------------------------- Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- Additions to net assets: Net investment gain from Master Trust (Note 3) $ 101 $ 397 $119 $ 288 $114 $ 33 $ 1,052 Assets transferred from other plans 1,057 334 105 850 $ 35 57 146 2,584 Contributions: Employer 30 81 41 137 14 25 - 328 Employee 114 335 182 686 66 147 - 1,530 --------------------------------------------------------------------------------------- 144 416 223 823 80 172 - 1,858 --------------------------------------------------------------------------------------- Total Additions 1,302 1,147 447 1,961 115 343 179 5,494 Deductions from net assets: Withdrawals by participants 167 94 52 566 7 14 57 957 Interfund transfers (51) 344 83 (593) (2) 158 61 - --------------------------------------------------------------------------------------- Net increase 1,084 1,397 478 802 106 487 183 4,537 Net assets available for plan benefits: Beginning of year 243 649 345 3,881 71 152 255 5,596 --------------------------------------------------------------------------------------- End of year $1,327 $2,046 $823 $4,683 $177 $639 $438 $10,133 ======================================================================================= See accompanying notes.
F-5 Employees Savings Plan Notes to Financial Statements December 31, 1997 (Dollars in Thousands) 1. Significant Accounting Policies The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The accounting records of the Employees Savings Plan ("Plan") are maintained on the accrual basis. All securities transactions are recorded as of the trade date. Investments in Reynolds Metals Company Stock (stated at fair value) are valued at the last reported sales price on the last business day of the year. Investments in mutual funds are measured by quoted market prices and are reported at aggregate fair value at year-end. Guaranteed investment contracts with insurance companies are reported at "contract value", which equals cost plus accrued income. Structured investment contracts are reported at fair value, which in the case of structured investment contracts equals contract value. 2. Summary of Significant Plan Provisions Reynolds Metals Company ("the Company") established the Plan effective January 1, 1990, covering all eligible employees of the Company and designated subsidiaries (each an "Employer") who elect to contribute. The Plan is a defined contribution plan under the Employee Retirement Income Security Act of 1974 ("ERISA") and qualifies as a "cash or deferred" arrangement under Section 401(k) of the Internal Revenue Code. A complete description of the Plan is contained in the Summary Plan Description and in the Plan document, copies of which are available from the Company. Plan participation is available to eligible employees on the later of (a) 30 days after beginning their employment with an Employer, or (b) the date at which their Employer adopts the Plan. Plan participation is voluntary. F-6 Employees Savings Plan Notes to Financial Statements (continued) 2. Summary of Significant Plan Provisions (continued) A participant may elect to make payroll contributions to the Plan in specified amounts ranging from 1% to 12% of compensation in 1% increments. At certain locations, the Employer will contribute to the Plan on behalf of each participant a fixed percentage of a portion of the payroll contributions made by the participant. Eligible employees who receive a profit-sharing award, gainsharing payment or other designated type of lump sum payment are also allowed to contribute between 10% and 50% of the award and/or payment (in 10% increments) to the Plan. Such contributions are not matched by the Company or any other Employer. Participants may elect to make their contributions on a before or after tax basis, or a combination thereof. Employer contributions are made on a "pretax" basis. Highly compensated participants may be required to reduce the amount of "pretax" contributions made to or held by the Plan on their behalf in order to permit the Plan to satisfy the nondiscrimination requirements of Section 401(k) of the Internal Revenue Code. Participants are fully vested in their account balances. Withdrawals and distributions are handled in accordance with the Plan provisions and are subject to certain regulatory restrictions. The trustee holds all of the Plan's investment assets and executes transactions therein. Although it has not expressed an intent to do so, the Company has the right under the Plan document to discontinue contributions at any time and to terminate the Plan subject to the provisions of ERISA. The Company is the Plan administrator and bears the related costs, except for investment-related and trustee fees, which are paid by the Plan. F-7 Employees Savings Plan Notes to Financial Statements (continued) 3. Commingled Master Trust Investments All of the investments of the Plan as of December 31, 1997 and 1996 were held in a Master Trust under a Master Trust Agreement between Reynolds Metals Company and The Northern Trust Company, as trustee, and are commingled with the assets of three other savings plans of the Company and one of its subsidiaries. Net assets and net investment gains from the Master Trust are allocated to participating plans based on the aggregate account balances of individual participants in each plan. Substantially all the assets held in the Balanced Investment Fund and the Diversified Equities Fund are invested in the Vanguard STAR Fund and the Vanguard Institutional Index Fund, respectively. These are no-load mutual funds held and managed by the Vanguard Group of Investment Companies. Substantially all of the assets held in the International Equities Fund and the Small Capitalization Equities Fund are invested in the T. Rowe Price Foreign Equity Fund and the T. Rowe Price Small-Cap Value Fund, respectively. These are no- load mutual funds held and managed by T. Rowe Price Associates, Inc. The assets of the Interest Income Fund generally are invested in guaranteed investment contracts ("GICs") at a fixed rate of return and structured investment contracts ("SICs") with various insurance companies and banks. SICs represent high grade investments held in the name of the Master Trust in conjunction with a corresponding contract with the issuer of the SIC to provide a fixed or variable rate of return (based on investment experience and reset quarterly) on the cost of the investment. GICs and SICs generally provide for the full repayment of principal and interest. Upon the occurrence of certain events (including layoffs by the Company or its applicable affiliates), however, market value of the GIC or SIC, if lower than book value, may be repaid (a "Market Value Adjustment"). Currently, in the opinion of the Company, the likelihood of a material loss to the Plan as a result of such a Market Value Adjustment is remote. The annual rate of return on these contracts during 1997 and 1996 was 6.3% and 6.3%, respectively. The current yield on these contracts at December 31, 1997 was 6.3% (6.4% at December 31, 1996). Interest is credited to participants' accounts on the dollar-weighted average (blended rate) basis. The fair value of the Plan's GICs approximates contract value. No individual SIC or GIC exceeded 5% of the Master Trust's assets, except for a SIC with Transamerica Life with a balance of approximately $39,000 at December 31, 1997. Cash and cash equivalents of the Master Trust are invested in a short-term investment fund managed by The Northern Trust Company. F-8 Employees Savings Plan Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued) During 1997 and 1996, certain assets of the Plan were transferred into other plans and from other plans of the Company as a result of employee transfers. There was no effect on any participant's accounts as a result of the transfer. Summarized financial fund information of the commingled accounts within the Master Trust is presented below:
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- MASTER TRUST NET ASSETS-1997 Assets Accrued Income $ 1,082 $ 1,082 Cash and cash equivalents 2,247 $ 47 $ 11 $ 40,726 $ 6 $ 25 43,062 Contributions receivable 598 195 215 671 79 56 $ 13 1,827 Investments: Common stock 189,068 - - - - - - 189,068 Investment contracts - - - 195,952 - - - 195,952 Mutual funds - 131,723 46,727 - 10,219 34,639 - 223,308 Loans to participants - - - - - - 19,962 19,962 --------------------------------------------------------------------------------------- Master Trust net assets $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261 ======================================================================================= Portion of Master Trust allocable to the Plan $ 1,327 $ 2,046 $ 823 $ 4,683 $ 177 $ 639 $ 438 $ 10,133 Percent 1% 2% 2% 2% 2% 2% 2% 2%
F-9 Employees Savings Plan Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued)
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- MASTER TRUST NET ASSETS-1996 Assets Accrued Income $ 997 $ 997 Cash and cash equivalents 2,213 $ 48 $ 3 $ 17,070 $ 4 $ 3 19,341 Contributions receivable 259 209 183 143 56 166 1,016 Investments: Common stock 160,346 - - - - - 160,346 Investment contracts - - - 220,145 - - 220,145 Mutual funds - 88,863 36,576 - 8,640 19,993 154,072 Loans to participants - - - - - - $19,326 19,326 --------------------------------------------------------------------------------------- Total assets 163,815 89,120 36,762 237,358 8,700 20,162 19,326 575,243 Liabilities Accounts payable 1 - - 12 - - - 13 --------------------------------------------------------------------------------------- Master Trust net assets $163,814 $89,120 $36,762 $237,346 $8,700 $20,162 $19,326 $575,230 ======================================================================================= Portion of Master Trust allocable to the Plan $ 243 $ 649 $ 345 $ 3,881 $ 71 $ 152 $ 255 $ 5,596 Percent 1% 1% 1% 2% 1% 1% 1% 1%
F-10 Employees Savings Plan Notes to Financial Statements (continued) 3. Commingled Master Trust Investments (continued)
Small Inter- Capita- Reynolds Diversified Balanced Interest national lization Stock Equities Investment Income Equities Equities Loan Fund Fund Fund Fund Fund Fund Fund Total --------------------------------------------------------------------------------------- CHANGES IN MASTER TRUST ASSETS - 1997 Additions: Contributions from plans $ 11,682 $ 13,182 $5,775 $ 28,736 $ 2,090 $ 4,979 $ 66,444 Net realized and unrealized appreciation (depreciation) of investments 9,977 29,085 6,564 - 109 6,267 52,002 Interest and dividends 4,107 1,976 1,427 15,552 135 549 $ 1,707 25,453 Assets transferred into Master Trust 11,809 - - - - - 25 11,834 --------------------------------------------------------------------------------------- 37,575 44,243 13,766 44,288 2,334 11,795 1,732 155,733 --------------------------------------------------------------------------------------- Deductions: Distributions to plans 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702 Administrative expenses - - - - - - - - --------------------------------------------------------------------------------------- 19,011 7,595 2,787 23,616 800 1,623 1,270 56,702 Interfund transfers-net 10,617 6,197 (788) (20,669) 70 4,386 187 - --------------------------------------------------------------------------------------- Net additions 29,181 42,845 10,191 3 1,604 14,558 649 99,031 Master Trust net assets at beginning of period 163,814 89,120 36,762 237,346 8,700 20,162 19,326 575,230 --------------------------------------------------------------------------------------- Master Trust net assets at end of period $192,995 $131,965 $46,953 $237,349 $10,304 $34,720 $19,975 $674,261 =======================================================================================
F-11 Employees Savings Plan Notes to Financial Statements (continued) 4. Differences Between Financial Statements and Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
December 31, 1997 1996 ------------------- Net assets available for benefits per the financial statements $10,133 $5,596 Amounts allocated to withdrawn participants 13 11 ------------------- Net assets available for benefits per the Form 5500 $10,120 $5,585 ===================
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500: Year ended December 31, 1997 --------------- Benefits paid to participants per the financial statements $957 Add: Amounts allocated on Form 5500 to withdrawn participants in the current year 13 Less: Amounts allocated on Form 5500 to withdrawn participants in the prior year (11) --------------- Benefits paid to participants per the Form 5500 $959 =============== 5. Income Taxes The Internal Revenue Service has determined that the Plan qualifies under Section 401(a) of the Internal Revenue Code (the "Code"). As long as the Plan continues to be qualified, under present Federal income tax laws and regulations participants will not be taxed on employer contributions or investment earnings allocated to their account. Participants will normally be subject to tax thereon at such time as they receive distributions from the Plan. As long as the Plan continues to be qualified, the Plan will not be taxed on its dividend and interest income or on any capital gains realized by it or any unrealized appreciation of investments. INDEX TO EXHIBITS Exhibit A Consent of Independent Auditors EXHIBIT A CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-53847) pertaining to the Employees Savings Plan and in the related Prospectus of our report dated June 19, 1998, with respect to the financial statements of the Employees Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ ERNST & YOUNG LLP Richmond, Virginia June 19, 1998 -----END PRIVACY-ENHANCED MESSAGE-----