EXHIBIT 4(a)
CERTIFICATE OF DESIGNATIONS,
PREFERENCES, RIGHTS AND LIMITATIONS OF
7% PRIDES, Convertible Preferred Stock
of
REYNOLDS METALS COMPANY
______________________
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
______________________
Reynolds Metals Company, a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby
certifies that, under (i) authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation of the Corporation, as amended
to date, (ii) the provisions of Sections 141(c) and 151 of the General
Corporation Law of the State of Delaware, and (iii) resolutions adopted by
the Board of Directors at its meeting on December 17, 1993, the 1993
Preferred Stock Committee of the Board of Directors at its meeting on
January 18, 1994 duly adopted the following resolution:
RESOLVED, that under (i) authority conferred upon the 1993
Preferred Stock Committee by the Board of Directors and (ii) authority
conferred upon the Board of Directors by the Restated Certificate of
Incorporation, as amended to date (the "Restated Certificate of
Incorporation"), the 1993 Preferred Stock Committee hereby authorizes
the issuance of 11,000,000 shares of authorized and unissued preferred
stock, without par value, of the Corporation, and hereby fixes the
designation, powers, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or
restrictions thereof, of such shares, in addition to those set forth
in the Restated Certificate of Incorporation, as follows, to be set
forth in a certificate of designations (the "Certificate of
Designations"):
Section 1. Designation and Size of Issue; Ranking. (a)
The distinctive designation of the series of preferred stock shall be
"7% PRIDES, Convertible Preferred Stock" (the "PRIDES"). The shares
are Preferred Redeemable Increased Dividend Equity Securities. The
number of shares constituting the PRIDES shall be 11,000,000 shares.
Each share of PRIDES shall have a stated value of $47.25.
(b) Any shares of the PRIDES which at any time have been
redeemed for, or converted into, Common Stock, without par value, of
the Corporation (the "Common Stock") or otherwise reacquired by the
Corporation shall, after such redemption, conversion or other
acquisition, resume the status of authorized and unissued shares of
preferred stock, without par value, of the Corporation (the "Preferred
Stock"), without designation as to series until such shares are once
more designated as part of a particular series by the Board of
Directors.
(c) The shares of PRIDES shall rank on a parity, both as to
payment of dividends and distribution of assets upon liquidation, with
any Preferred Stock issued by the Corporation after the date of this
Certificate of Designations that by its terms ranks pari passu with
the PRIDES.
Section 2. Dividends. (a) The holders of record of the
shares of PRIDES shall be entitled to receive, when and as declared by
the Board of Directors out of funds legally available therefor, cash
dividends ("Preferred Dividends") from the date of the issuance of the
shares of PRIDES at the rate per annum of 7 percent of the stated
value per share (equivalent to $3.31 per annum or $0.8275 per quarter
for each share of PRIDES), payable quarterly in arrears, on each April
1, July 1, October 1 and December 31 (each a "Dividend Payment Date")
or, if any such date is not a business day (as defined herein), the
Preferred Dividend due on such Dividend Payment Date shall be paid on
the next succeeding business day; provided, however, that, with
respect to any dividend period during which a redemption occurs, the
Corporation may, at its option, declare accrued Preferred Dividends
to, and pay such Preferred Dividends on, the date fixed for
redemption, in which case such Preferred Dividends shall be payable to
the holders of shares of PRIDES as of the record date for such
dividend payment and shall not be included in the calculation of the
related PRIDES Call Price (as defined herein). The first dividend
period shall be from the date of initial issuance of the shares of
PRIDES to but excluding April 1, 1994 and the first Preferred Dividend
shall be payable on April 1, 1994. Preferred Dividends on shares of
PRIDES shall be cumulative and shall accumulate from the date of
original issuance. Preferred Dividends on shares of PRIDES shall
cease to accrue on and after the Mandatory Conversion Date (as defined
herein) or on and after the date of their earlier conversion or
redemption, as the case may be. Preferred Dividends shall be payable
to holders of record as they appear on the stock register of the
Corporation on such record dates, not less than 15 nor more than 60
days preceding the payment date thereof, as shall be fixed by the
Board of Directors. Preferred Dividends payable on shares of PRIDES
for any period less than a full quarterly dividend period (or, in the
case of the first Preferred Dividend, from the date of initial
issuance of the shares of PRIDES to but excluding the first Dividend
Payment Date) shall be computed on the basis of a 360-day year of
twelve 30-day months and the actual number of days elapsed in any
period less than one month. Preferred Dividends shall accrue on a
daily basis whether or not there are funds of the Corporation legally
available for the payment of such dividends and whether or not such
Preferred Dividends are declared. Accrued but unpaid Preferred
Dividends shall cumulate as of the Dividend Payment Date on which they
first become payable, but no interest shall accrue on accumulated but
unpaid Preferred Dividends.
(b) As long as shares of PRIDES are outstanding, no
dividends (other than dividends payable in shares of, or warrants,
rights or options exercisable for or convertible into shares of,
Second Preferred Stock, $100 par value, of the Corporation (the
"Second Preferred Stock"), Common Stock or any other capital stock of
the Corporation ranking junior to the shares of PRIDES as to the
payment of dividends and the distribution of assets upon liquidation
(collectively, the "Junior Stock") and cash in lieu of fractional
shares in connection with any such dividend) shall be paid or declared
in cash or otherwise, nor shall any other distribution be made (other
than a distribution payable in Junior Stock and cash in lieu of
fractional shares in connection with any such distribution), on any
Junior Stock unless (i) full dividends on Preferred Stock (including
the shares of PRIDES) that does not constitute Junior Stock ("Parity
Preferred Stock") have been paid, or declared and set aside for
payment, for all dividend periods terminating at or before the date of
such Junior Stock dividend or distribution payment to the extent such
dividends are cumulative; (ii) dividends in full for the current
quarterly dividend period have been paid, or declared and set aside
for payment, on all Parity Preferred Stock to the extent such
dividends are cumulative; (iii) the Corporation has paid or set aside
all amounts, if any, then or theretofore required to be paid or set
aside for all purchase, retirement, and sinking funds, if any, for any
Parity Preferred Stock; and (iv) the Corporation is not in default on
any of its obligations to redeem any Parity Preferred Stock.
(c) As long as any shares of PRIDES are outstanding, no
shares of any Junior Stock may be purchased, redeemed, or otherwise
acquired by the Corporation or any of its subsidiaries (except in
connection with a reclassification or exchange of any Junior Stock
through the issuance of other Junior Stock (and cash in lieu of
fractional shares in connection therewith) or the purchase, redemption
or other acquisition of any Junior Stock with any Junior Stock (and
cash in lieu of fractional shares in connection therewith)) nor may
any funds be set aside or made available for any sinking fund for the
purchase or redemption of any Junior Stock unless: (i) full dividends
on Parity Preferred Stock have been paid, or declared and set aside
for payment, for all dividend periods terminating at or before the
date of such purchase, redemption or other acquisition to the extent
such dividends are cumulative; (ii) dividends in full for the current
quarterly dividend period have been paid, or declared and set aside
for payment, on all Parity Preferred Stock to the extent such
dividends are cumulative; (iii) the Corporation has paid or set aside
all amounts, if any, then or theretofore required to be paid or set
aside for all purchase, retirement, and sinking funds, if any, for any
Parity Preferred Stock; and (iv) the Corporation is not in default on
any of its obligations to redeem any Parity Preferred Stock.
(d) As long as any shares of PRIDES are outstanding,
dividends or other distributions may not be declared or paid on any
Parity Preferred Stock (other than dividends or other distributions
payable in Junior Stock and cash in lieu of fractional shares in
connection therewith), and the Corporation may not purchase, redeem or
otherwise acquire any Parity Preferred Stock (except with any Junior
Stock and cash in lieu of fractional shares in connection therewith),
unless either: (a)(i) full dividends on Parity Preferred Stock have
been paid, or declared and set aside for payment, for all dividend
periods terminating at or before the date of such Parity Preferred
Stock dividend, distribution, purchase, redemption or other
acquisition payment to the extent such dividends are cumulative; (ii)
dividends in full for the current quarterly dividend period have been
paid, or declared and set aside for payment, on all Parity Preferred
Stock to the extent such dividends are cumulative; (iii) the
Corporation has paid or set aside all amounts, if any, then or
theretofore required to be paid or set aside for all purchase,
retirement, and sinking funds, if any, for any Parity Preferred Stock;
and (iv) the Corporation is not in default on any of its obligations
to redeem any Parity Preferred Stock; or (b) with respect to the
payment of dividends only, any such dividends shall be declared and
paid pro rata so that the amounts of any dividends declared and paid
per share of PRIDES and each other share of Parity Preferred Stock
shall in all cases bear to each other the same ratio that accrued
dividends (including any accumulation with respect to unpaid dividends
for prior dividend periods, if such dividends are cumulative) per
share of PRIDES and such other shares of Parity Preferred Stock bear
to each other.
Section 3. Conversion or Redemption. (a) Unless
previously either redeemed or converted at the option of the holder in
accordance with the provisions of Section 3(c), on December 31, 1997
(the "Mandatory Conversion Date"), each outstanding share of PRIDES
shall mandatorily convert ("Mandatory Conversion") into (i) shares of
authorized Common Stock at the PRIDES Common Equivalent Rate (as
defined herein) in effect on the Mandatory Conversion Date and (ii)
the right to receive cash in an amount equal to all accrued and unpaid
Preferred Dividends on such share of PRIDES (other than previously
declared dividends payable to a holder of record as of a prior date)
to but excluding the Mandatory Conversion Date, whether or not
declared, out of funds legally available for the payment of Preferred
Dividends, subject to the right of the Corporation to redeem the
shares of PRIDES on or after December 31, 1996 (the "Initial
Redemption Date") and before the Mandatory Conversion Date and subject
to the conversion of the shares of PRIDES at the option of the holder
at any time before the Mandatory Conversion Date. The "PRIDES Common
Equivalent Rate" shall initially be one share of Common Stock for each
share of PRIDES and shall be subject to adjustment as set forth in
Sections 3(d) and 3(e). Shares of PRIDES shall cease to be
outstanding on the Mandatory Conversion Date. The Corporation shall
make such arrangements as it deems appropriate for the issuance of
certificates representing shares of Common Stock and for the payment
of cash in respect of such accrued and unpaid dividends, if any, or
cash in lieu of fractional shares, if any, in exchange for and
contingent upon surrender of certificates representing the shares of
PRIDES, and the Corporation may defer the payment of dividends on such
shares of Common Stock and the voting thereof until, and make such
payment and voting contingent upon, the surrender of certificates
representing the shares of PRIDES; provided, that the Corporation
shall give the holders of the shares of PRIDES such notice of any such
actions as the Corporation deems appropriate and upon surrender such
holders shall be entitled to receive such dividends declared and paid,
if any, on such shares of Common Stock subsequent to the Mandatory
Conversion Date.
(b)(i) Shares of PRIDES are not redeemable by the
Corporation before the Initial Redemption Date. At any time and from
time to time on or after that date until immediately before the
Mandatory Conversion Date, the Corporation shall have the right to
redeem, in whole or in part, the outstanding shares of PRIDES (subject
to the notice provisions set forth in Section 3(b)(iii)). Upon any
such redemption, the Corporation shall deliver to each holder thereof,
in exchange for each such share of PRIDES subject to redemption, the
greater of:
(A) the number of shares of Common Stock equal to the
applicable PRIDES Call Price (as defined herein) in effect on the
redemption date divided by the Current Market Price (as defined
herein) of the Common Stock, determined as of the second Trading
Day (as defined herein) immediately preceding the Notice Date (as
defined herein); or
(B) .82 of a share of Common Stock (subject to adjustment in
the same manner as the PRIDES Optional Conversion Rate (as
defined herein) is adjusted).
Preferred Dividends on the shares of PRIDES shall cease to accrue on
and after the date fixed for their redemption.
The "PRIDES Call Price" of each share of PRIDES shall be the
sum of (x) $48.077 on and after the Initial Redemption Date, to and
including March 31, 1997; $47.870 on and after April 1, 1997, to and
including June 30, 1997; $47.663 on and after July 1, 1997, to and
including September 30, 1997; $47.457 on and after October 1, 1997, to
and including November 30, 1997; and $47.25 on and after December 1,
1997, to and including December 31, 1997; and (y) all accrued and
unpaid Preferred Dividends thereon to but not including the date fixed
for redemption (other than previously declared Preferred Dividends
payable to a holder of record as of a prior date). If fewer than all
the outstanding shares of PRIDES are to be called for redemption,
shares of PRIDES to be called shall be selected by the Corporation
from outstanding shares of PRIDES not previously called by lot or pro
rata (as nearly as may be) or by any other method determined by the
Board of Directors in its sole discretion to be equitable.
(ii) The term "Current Market Price" per share of the
Common Stock on any date of determination means the lesser of (x) the
average of the Closing Prices (as defined herein) of the Common Stock
for the 15 consecutive Trading Days ending on and including such date
of determination, or (y) the Closing Price of the Common Stock for
such date of determination; provided, however, that, with respect to
any redemption of shares of PRIDES, if any event resulting in an
adjustment of the PRIDES Common Equivalent Rate occurs during the
period beginning on the first day of such 15-day period and ending on
the applicable redemption date, the Current Market Price as determined
pursuant to the foregoing shall be appropriately adjusted to reflect
the occurrence of such event.
(iii) The Corporation shall provide notice of any
redemption of the shares of PRIDES to holders of record of the shares
of PRIDES to be called for redemption not less than 15 nor more than
60 days before the date fixed for redemption. Any such notice shall
be provided by mail, sent to the holders of record of the shares of
PRIDES to be called at each such holder's address as it appears on the
stock register of the Corporation, first class postage prepaid;
provided, however, that failure to give such notice or any defect
therein shall not affect the validity of the proceeding for redemption
of any shares of PRIDES to be redeemed except as to the holder to whom
the Corporation has failed to give such notice or whose notice was
defective. A public announcement of any call for redemption shall be
made by the Corporation before, or at the time of, the mailing of such
notice of redemption. The term "Notice Date" with respect to any
notice given by the Corporation in connection with a redemption of the
shares of PRIDES means the date on which first occurs either the
public announcement of such redemption or the commencement of mailing
of the notice to the holders of shares of PRIDES, in each case
pursuant to this Section 3(b)(iii).
Each such notice shall state, as appropriate, the following
and may contain such other information as the Corporation deems
advisable:
(A) the redemption date;
(B) that all outstanding shares of PRIDES are to be
redeemed or, in the case of a redemption of fewer than all
outstanding shares of PRIDES, the number of such shares held by
such holder to be redeemed;
(C) the PRIDES Call Price, the number of shares of Common
Stock deliverable upon redemption of each share of PRIDES to be
redeemed and the Current Market Price used to calculate such
number of shares of Common Stock;
(D) the place or places where certificates for such shares
are to be surrendered for redemption; and
(E) that dividends on the shares of PRIDES to be redeemed
shall cease to accrue on and after such redemption date (except
as otherwise provided herein).
(iv) The Corporation's obligation to deliver shares of
Common Stock and provide funds upon redemption in accordance with this
Section 3(b) shall be deemed fulfilled if, on or before a redemption
date, the Corporation shall deposit with a bank or trust company, or
an affiliate of a bank or trust company, having an office or agency in
New York, New York and having (or such affiliate having) a combined
capital and surplus of at least $50,000,000 according to its last
published statement of condition, or shall set aside or make other
reasonable provision for the issuance of, such number of shares of
Common Stock as are required to be delivered by the Corporation
pursuant to this Section 3(b) upon the occurrence of the related
redemption of shares of PRIDES and for the payment of cash in lieu of
the issuance of fractional share amounts and accrued and unpaid
dividends payable in cash on the shares of PRIDES to be redeemed as
required by this Section 3(b), in trust for the account of the holders
of such shares of PRIDES to be redeemed (and so as to be and continue
to be available therefor), with irrevocable instructions and authority
to such bank or trust company that such shares and funds be delivered
upon redemption of the shares of PRIDES so called for redemption. Any
interest accrued on such funds shall be paid to the Corporation from
time to time. Any shares of Common Stock or funds so deposited and
unclaimed at the end of three years from such redemption date shall be
repaid and released to the Corporation, after which the holder or
holders of such shares of PRIDES so called for redemption shall look
only to the Corporation for delivery of shares of Common Stock and the
payment of any other funds due in connection with the redemption of
the shares of PRIDES.
(v) Each holder of shares of PRIDES called for redemption
must surrender the certificates evidencing such shares (properly
endorsed or assigned for transfer, if the Board of Directors shall so
require and the notice shall so state) to the Corporation at the place
designated in the notice of such redemption and shall thereupon be
entitled to receive certificates evidencing shares of Common Stock and
to receive any funds payable pursuant to this Section 3(b) following
such surrender and following the date of such redemption. In case
fewer than all the shares represented by any such surrendered
certificate are called for redemption, a new certificate shall be
issued at the expense of the Corporation representing the unredeemed
shares. If such notice of redemption shall have been given, and if on
the date fixed for redemption shares of Common Stock and funds
necessary for the redemption shall have been irrevocably either set
aside by the Corporation separate and apart from its other funds or
assets in trust for the account of the holders of the shares to be
redeemed (and so as to be and continue to be available therefor) or
deposited with a bank or trust company or an affiliate thereof as
provided herein or the Corporation shall have made other reasonable
provision therefor, then notwithstanding that the certificates
evidencing any shares of PRIDES so called for redemption shall not
have been surrendered, the shares represented thereby so called for
redemption shall be deemed no longer outstanding and Preferred
Dividends with respect to the shares so called for redemption and all
rights with respect to the shares so called for redemption shall
forthwith on and after such date cease and terminate (unless the
Corporation defaults on the payment of the redemption price), except
for (i) the rights of the holders to receive the shares of Common
Stock and funds, if any, payable pursuant to this Section 3(b) without
interest upon surrender of their certificates therefor and (ii) the
right of the holders, pursuant to Section 3(c) to convert the shares
of PRIDES called for redemption until immediately before the close of
business on any redemption date; provided, however, that holders of
shares of PRIDES at the close of business on a record date for any
payment of Preferred Dividends shall be entitled to receive the
Preferred Dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the redemption of such shares
following such record date and before the Dividend Payment Date.
Holders of shares of PRIDES that are redeemed shall not be entitled to
receive dividends declared and paid on such shares of Common Stock,
and such shares of Common Stock shall not be entitled to vote, until
such shares of Common Stock are issued upon the surrender of the
certificates representing such shares of PRIDES and upon such
surrender such holders shall be entitled to receive such dividends
declared and paid on such shares of Common Stock subsequent to such
redemption date.
(c) Shares of PRIDES are convertible, in whole or in part,
at the option of the holders thereof ("Optional Conversion"), at any
time before the Mandatory Conversion Date, unless previously redeemed,
into shares of Common Stock at a rate of .82 of a share of Common
Stock for each share of PRIDES (the "PRIDES Optional Conversion
Rate"), subject to adjustment as set forth below. The right of
Optional Conversion of shares of PRIDES called for redemption shall
terminate immediately before the close of business on any redemption
date with respect to such shares.
Optional Conversion of shares of PRIDES may be effected by
delivering certificates evidencing such shares of PRIDES, together
with written notice of conversion and a proper assignment of such
certificates to the Corporation or in blank (and, if applicable, cash
payment of an amount equal to the Preferred Dividend attributable to
the current quarterly dividend period payable on such shares), to the
office of the transfer agent for the shares of PRIDES or to any other
office or agency maintained by the Corporation for that purpose and
otherwise in accordance with Optional Conversion procedures
established by the Corporation. Each Optional Conversion shall be
deemed to have been effected immediately before the close of business
on the date on which the foregoing requirements shall have been
satisfied. The Optional Conversion shall be at the PRIDES Optional
Conversion Rate in effect at such time and on such date.
Holders of shares of PRIDES at the close of business on a
record date for any payment of declared Preferred Dividends shall be
entitled to receive the Preferred Dividend payable on such shares of
PRIDES on the corresponding Dividend Payment Date notwithstanding the
Optional Conversion of such shares of PRIDES following such record
date and before such Dividend Payment Date. However, shares of PRIDES
surrendered for Optional Conversion after the close of business on a
record date for any payment of declared Preferred Dividends and before
the opening of business on the next succeeding Dividend Payment Date
must be accompanied by payment in cash of an amount equal to the
Preferred Dividends attributable to the current quarterly dividend
period payable on such date (unless such shares of PRIDES are subject
to redemption on a redemption date between such record date
established for such Dividend Payment Date and such Dividend Payment
Date). Except as provided above, upon any Optional Conversion of
shares of PRIDES, the Corporation shall make no payment of or
allowance for unpaid Preferred Dividends, whether or not in arrears,
on such shares of PRIDES as to which Optional Conversion has been
effected or for previously declared dividends or distributions on the
shares of Common Stock issued upon Optional Conversion.
(d) The PRIDES Common Equivalent Rate and the PRIDES
Optional Conversion Rate are each subject to adjustment from time to
time as provided below in this paragraph (d).
(i) If the Corporation shall pay a stock dividend or make a
distribution with respect to its Common Stock in shares of Common
Stock (including by way of reclassification of any shares of its
Common Stock), the PRIDES Common Equivalent Rate and the PRIDES
Optional Conversion Rate in effect at the opening of business on
the day following the date fixed for the determination by
stockholders entitled to receive such dividend or other
distribution shall each be increased by multiplying such PRIDES
Common Equivalent Rate and PRIDES Optional Conversion Rate by a
fraction of which the numerator shall be the sum of the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination, immediately before such
dividend or distribution, plus the total number of shares of
Common Stock constituting such dividend or other distribution,
and of which the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date
fixed for such determination, immediately before such dividend or
distribution, such increase to become effective immediately after
the opening of business on the day following the date fixed for
such determination. For the purposes of this clause (i), the
number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Corporation but
shall include shares issuable in respect of certificates issued
in lieu of fractions of shares of Common Stock.
(ii) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common
Stock, the PRIDES Common Equivalent Rate and the PRIDES Optional
Conversion Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective
shall each be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the PRIDES Common
Equivalent Rate and the PRIDES Optional Conversion Rate in effect
at the opening of business on the day following the day upon
which such combination becomes effective shall each be
proportionately reduced, such increases or reductions, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision
or combination becomes effective.
(iii) If the Corporation shall, after the date of this
Certificate of Designations, issue rights or warrants to all
holders of its Common Stock entitling them (for a period not
exceeding 45 days from the date of such issuance) to subscribe
for or purchase shares of Common Stock at a price per share less
than the Current Market Price of the Common Stock (determined
pursuant to Section 3(b)(ii)) on the record date for the
determination of stockholders entitled to receive such rights or
warrants, then in each case the PRIDES Common Equivalent Rate and
the PRIDES Optional Conversion Rate shall each be adjusted by
multiplying the PRIDES Common Equivalent Rate and the PRIDES
Optional Conversion Rate in effect on such record date by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights
or warrants, immediately before such issuance, plus the number of
additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants, and of which the
denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately before such issuance, plus the number of shares of
Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at
such Current Market Price (determined by multiplying such total
number of shares by the exercise price of such rights or warrants
and dividing the product so obtained by such Current Market
Price). Shares of Common Stock held by the Corporation or by
another corporation of which a majority of the shares entitled to
vote in the election of directors are held, directly or
indirectly, by the Corporation shall not be deemed to be
outstanding for purposes of such computation. Such adjustment
shall become effective at the opening of business on the business
day next following the record date for the determination of
stockholders entitled to receive such rights or warrants. To the
extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the PRIDES Common
Equivalent Rate and the PRIDES Optional Conversion Rate shall
each be readjusted to the PRIDES Common Equivalent Rate and the
PRIDES Optional Conversion Rate which would then be in effect had
the adjustments made after the issuance of such rights or
warrants been made upon the basis of issuance of rights or
warrants in respect of only the number of shares of Common Stock
actually delivered.
(iv) If the Corporation shall pay a dividend or make a
distribution to all holders of its Common Stock consisting of
evidences of its indebtedness, cash or other assets (including
shares of capital stock of the Corporation other than Common
Stock but excluding any cash dividends or distributions, other
than Extraordinary Cash Distributions (as defined herein) and
dividends referred to in clauses (i) and (ii) above), or shall
issue to all holders of its Common Stock rights or warrants to
subscribe for or purchase any of its securities (other than those
referred to in clause (iii) above), then in each such case, the
PRIDES Common Equivalent Rate and the PRIDES Optional Conversion
Rate shall each be adjusted by multiplying the PRIDES Common
Equivalent Rate and the PRIDES Optional Conversation Rate in
effect on the record date for such dividend or distribution or
for the determination of stockholders entitled to receive such
rights or warrants, as the case may be, by a fraction of which
the numerator shall be the Current Market Price per share of the
Common Stock (determined pursuant to Section 3(b)(ii) on such
record date), and of which the denominator shall be such Current
Market Price per share of Common Stock less either (i) the fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive) on such record date of the
portion of the assets or evidences of indebtedness so
distributed, or of such subscription rights or warrants,
applicable to one share of Common Stock, or (ii) if applicable,
the amount of the Extraordinary Cash Distributions. Such
adjustment shall become effective on the opening of business on
the business day next following the record date for such dividend
or distribution or for the determination of holders entitled to
receive such rights or warrants, as the case may be.
(v) Any shares of Common Stock issuable in payment of a
dividend or other distribution shall be deemed to have been
issued immediately before the close of business on the record
date for such dividend or other distribution for purposes of
calculating the number of outstanding shares of Common Stock
under this Section 3.
(vi) Anything in this Section 3 notwithstanding, the
Corporation shall be entitled (but shall not be required) to make
such upward adjustments in the PRIDES Common Equivalent Rate, the
PRIDES Optional Conversion Rate and the PRIDES Call Price in
addition to those set forth by this Section 3, as the
Corporation, in its sole discretion, shall determine to be
advisable, in order that any stock dividends, subdivision of
stock, distribution of rights to purchase stock or securities, or
distribution of securities convertible into or exchangeable for
stock (or any transaction that could be treated as any of the
foregoing transactions pursuant to Section 305 of the Internal
Revenue Code of 1986, as amended) hereafter made by the
Corporation to its stockholders shall not be taxable. The term
"Extraordinary Cash Distribution" means, with respect to any
consecutive 12-month period, all cash dividends and cash
distributions on the Common Stock during such period (other than
cash dividends and cash distributions for which a prior
adjustment to the PRIDES Common Equivalent Rate and PRIDES
Optional Conversion Rate was previously made) to the extent such
dividends and distributions exceed, on a per share of Common
Stock basis, 10% of the average daily Closing Price of the Common
Stock over such period.
(vii) In any case in which this Section 3(d) shall require
that an adjustment as a result of any event become effective at
the opening of business on the business day next following a
record date and the date fixed for conversion pursuant to Section
3(a) or redemption pursuant to Section 3(b) on and after such
record date, but before the occurrence of such event, the
Corporation may, in its sole discretion, elect to defer the
following until after the occurrence of such event: (A) issuing
to the holder of any shares of PRIDES surrendered for conversion
or redemption the fractional shares of Common Stock issuable
before giving effect to such adjustment; and (B) paying to such
holder any amount in cash in lieu of a fractional share of Common
Stock pursuant to Section 4.
(viii) All adjustments to the PRIDES Common Equivalent Rate
and the PRIDES Optional Conversion Rate shall be calculated to
the nearest 1/100th of a share of Common Stock. No adjustment in
the PRIDES Common Equivalent Rate or in the PRIDES Optional
Conversion Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein;
provided, however, that any adjustments which by reason of this
Section 3(d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All
adjustments to the PRIDES Common Equivalent Rate and PRIDES
Optional Conversion Rate shall be made successively.
(ix) At least 10 business days before taking any action
that could result in an adjustment affecting the PRIDES Common
Equivalent Rate or the PRIDES Optional Conversion Rate such that
the conversion price (for purposes of this section, an amount
equal to the PRIDES Call Price divided by the PRIDES Common
Equivalent Rate or the PRIDES Optional Conversion Rate,
respectively, as in effect from time to time) would be below the
then par value of the Common Stock, the Corporation shall take
any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally
issue fully paid and nonassessable shares of Common Stock at the
PRIDES Common Equivalent Rate or the PRIDES Optional Conversion
Rate as so adjusted.
(x) Before redeeming any shares of PRIDES, the Corporation
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of Common
Stock upon such redemption.
(e) In case of any consolidation or merger to which the
Corporation is a party (other than a consolidation or merger in which
the Corporation is the surviving or continuing corporation and in
which the shares of Common Stock outstanding immediately before the
merger or consolidation remain unchanged), or in the case of any sale
or transfer to another corporation of the property of the Corporation
as an entirety or substantially as an entirety, or in the case of a
statutory exchange of securities with another corporation (other than
in connection with a merger or acquisition), each share of PRIDES
shall, after consummation of such transaction, be subject to (i)
conversion at the option of the holder into the kind and amount of
securities, cash, or other property receivable upon consummation of
such transaction by a holder of the number of shares of Common Stock
into which such share of PRIDES might have been converted immediately
before consummation of such transaction, (ii) conversion on the
Mandatory Conversion Date into the kind and amount of securities,
cash, or other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock into
which such share of PRIDES would have been converted if the conversion
on the Mandatory Conversion Date had occurred immediately before the
date of consummation of such transaction, plus the right to receive
cash in an amount equal to all accrued and unpaid dividends on such
share of PRIDES (other than previously declared dividends payable to a
holder of record as of a prior date), and (iii) redemption on any
redemption date in exchange for the kind and amount of securities,
cash, or other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock that
would have been issuable at the PRIDES Call Price in effect on such
redemption date upon a redemption of such share of PRIDES immediately
before consummation of such transaction, assuming that, if the Notice
Date for such redemption is not before such transaction, the Notice
Date had been the date of such transaction; and assuming in each case
that such holder of shares of Common Stock failed to exercise rights
of election, if any, as to the kind or amount of securities, cash, or
other property receivable upon consummation of such transaction
(provided that, if the kind or amount of securities, cash, or other
property receivable upon consummation of such transaction is not the
same for each non-electing share, then the kind and amount of
securities, cash, or other property receivable upon consummation of
such transaction for each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the
non-electing shares). The kind and amount of securities into or for
which the shares of PRIDES shall be convertible or redeemable after
consummation of such transaction shall be subject to adjustment as
described in Section 3(d) following the date of consummation of such
transaction. The Corporation may not become a party to any such
transaction unless the terms thereof are consistent with the
foregoing.
(f) Whenever the PRIDES Common Equivalent Rate and PRIDES
Optional Conversion Rate are adjusted as provided in Section 3(d), the
Corporation shall:
(i) forthwith compute the adjusted PRIDES Common Equivalent
Rate and PRIDES Optional Conversion Rate in accordance with this
Section 3 and prepare a certificate signed by the Chief Financial
Officer, any Vice President, the Treasurer or the Controller of
the Corporation setting forth the adjusted PRIDES Common
Equivalent Rate and the PRIDES Optional Conversion Rate, the
method of calculation thereof in reasonable detail and the facts
requiring such adjustment and upon which such adjustment is
based, which certificate shall be conclusive, final and binding
evidence of the correctness of the adjustment, and shall file
such certificate forthwith with the transfer agent for the shares
of the PRIDES and the Common Stock;
(ii) make a prompt public announcement stating that the
PRIDES Common Equivalent Rate and PRIDES Optional Conversion Rate
have been adjusted and setting forth the adjusted PRIDES Common
Equivalent Rate and PRIDES Optional Conversion Rate;
(iii) mail a notice stating that the PRIDES Common
Equivalent Rate and the PRIDES Optional Conversion Rate have been
adjusted, the facts requiring such adjustment and upon which such
adjustment is based and setting forth the adjusted PRIDES Common
Equivalent Rate and PRIDES Optional Conversion Rate, to the
holders of record of the outstanding shares of PRIDES, at or
prior to the time the Corporation mails an interim statement, if
any, to its stockholders covering the fiscal quarter period
during which the facts requiring such adjustment occurred, but in
any event within 45 days of the end of such fiscal quarter
period.
(g) In case, at any time while any of the shares of PRIDES
are outstanding,
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock, excluding any cash dividends
other than Extraordinary Cash Distributions; or
(ii) the Corporation shall authorize the issuance to all
holders of the Common Stock of rights or warrants to subscribe
for or purchase shares of the Common Stock or of any other
subscription rights or warrants; or
(iii) the Corporation shall authorize any reclassification
of the Common Stock (other than a subdivision or combination
thereof) or any consolidation or merger to which the Corporation
is a party and for which approval of any stockholders of the
Corporation is required (except for a merger of the Corporation
into one of its subsidiaries solely for the purpose of changing
the corporate domicile of the Corporation to another state of the
United States and in connection with which there is no
substantive change in the rights or privileges of any securities
of the Corporation other than changes resulting from differences
in the corporate statutes of the state the Corporation was then
domiciled in and the new state of domicile), or the sale or
transfer of all or substantially all of the assets of the
Corporation;
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of PRIDES, and
shall cause to be mailed to the holders of shares of PRIDES at their
last addresses as they shall appear on the stock register of the
Corporation, at least 10 business days before the date hereinafter
specified in clause (A) or (B) below (or the earlier of the dates
hereinafter specified, in the event that more than one date is
specified), a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (B) the date
on which any such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property (including cash), if any,
deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. The failure to give
or receive the notice required by this paragraph (g) or any defect
therein shall not affect the legality or validity of any such
dividend, distribution, right or warrant or other action.
Section 4. No Fractional Shares. No fractional shares of
Common Stock shall be issued upon redemption or conversion of any
shares of the PRIDES. In lieu of any fractional share otherwise
issuable in respect of the aggregate number of shares of the PRIDES of
any holder that are redeemed or converted on any redemption date or
upon Mandatory Conversion or Optional Conversion, such holder shall be
entitled to receive an amount in cash (computed to the nearest cent)
equal to the same fraction of the (i) Current Market Price of the
Common Stock (determined as of the second Trading Day immediately
preceding the Notice Date) in the case of redemption, or (ii) Closing
Price of the Common Stock determined (A) as of the fifth Trading Day
immediately preceding the Mandatory Conversion Date, in the case of
Mandatory Conversion, or (B) as of the second Trading Day immediately
preceding the effective date of conversion, in the case of an Optional
Conversion by a holder. If more than one share of PRIDES shall be
surrendered for conversion or redemption at one time by or for the
same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate
number of shares of the PRIDES so surrendered or redeemed.
Section 5. Reservation of Common Stock. The Corporation
shall at all times reserve and keep available out of its authorized
and unissued Common Stock, solely for issuance upon the conversion or
redemption of shares of PRIDES, as herein provided, free from
preemptive rights, such maximum number of shares of Common Stock as
shall from time to time be issuable upon the Mandatory Conversion or
Optional Conversion or redemption of all the shares of PRIDES then
outstanding.
Section 6. Definitions. As used in this Certificate of
Designations:
(i) the term "business day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close;
(ii) the term "Closing Price", on any day, shall mean the
last sale price as shown on the New York Stock Exchange Composite
Tape on such day, or, in case no such sale takes place on such
day, the average of the reported closing bid and asked prices
regular way on the New York Stock Exchange, or, if the Common
Stock is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or, if not listed or
admitted to trading on any national securities exchange, the
average of the closing bid and asked prices of the Common Stock
on the over-the-counter market on the day in question as reported
by the National Association of Securities Dealers, Inc. Automated
Quotation System, or a similar generally accepted reporting
service, or if not so available in such manner, as furnished by
any New York Stock Exchange member firm selected from time to
time by the Board of Directors for that purpose;
(iii) the term "record date" shall be such date as from
time to time fixed by the Board of Directors with respect to the
receipt of dividends, the receipt of a redemption price upon
redemption or the taking of any action or exercise of any voting
rights permitted hereby; and
(iv) the term "Trading Day" shall mean a date on which the
New York Stock Exchange (or any successor to such Exchange) is
open for the transaction of business.
Section 7. Payment of Taxes. The Corporation shall pay any
and all documentary, stamp or similar issue or transfer taxes payable
in respect of the issue or delivery of shares of Common Stock on the
redemption or conversion of shares of PRIDES pursuant to Section 3;
provided, however, that the Corporation shall not be required to pay
any tax which may be payable in respect of any registration of
transfer involved in the issue or delivery of shares of Common Stock
in a name other than that of the registered holder of shares of PRIDES
redeemed or converted or to be redeemed or converted, and no such
issue or delivery shall be made unless and until the person requesting
such issue has paid to the Corporation the amount of any such tax or
has established, to the satisfaction of the Corporation, that such tax
has been paid.
Section 8. Liquidation Rights. In the event of any
voluntary or involuntary liquidation, dissolution, or winding up of
the Corporation, and subject to the rights of holders of any other
series of Preferred Stock, the holders of outstanding shares of PRIDES
are entitled to receive the sum of $47.25 per share, plus an amount
equal to any accrued and unpaid Preferred Dividends thereon, out of
the assets of the Corporation available for distribution to
stockholders, before any distribution of assets is made to holders of
Second Preferred Stock, Common Stock or any other capital stock
ranking junior to the shares of PRIDES upon liquidation, dissolution,
or winding up. If upon any voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, the assets of the
Corporation are insufficient to permit the payment of the full
preferential amounts payable with respect to the shares of PRIDES and
all other series of Parity Preferred Stock, the holders of shares of
PRIDES and of all other series of Parity Preferred Stock shall share
ratably in any distribution of assets of the Corporation in proportion
to the full respective preferential amounts to which they are
entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of shares of
PRIDES shall not be entitled to any further participation in any
distribution of assets by the Corporation. A consolidation or merger
of the Corporation with or into one or more other corporations
(whether or not the Corporation is the corporation surviving such
consolidation or merger), or a sale, lease or exchange of all or
substantially all of the assets of the Corporation shall not be deemed
to be a voluntary or involuntary liquidation, dissolution, or winding
up of the Corporation.
Section 9. Voting Rights. (a) The holders of shares of
PRIDES shall have the right with the holders of Common Stock to vote
in the election of directors and upon each other matter coming before
any meeting of the holders of Common Stock on the basis of 4/5 of a
vote for each share of PRIDES held. The holders of shares of PRIDES
and the holders of Common Stock shall vote together as one class on
such matters except as otherwise provided by law or by the Restated
Certificate of Incorporation.
(b) In the event that dividends on the shares of PRIDES or
any other series of Preferred Stock shall be in arrears and unpaid for
six quarterly dividend periods, or if any series of Preferred Stock
(other than the PRIDES) shall be entitled for any other reason to
exercise voting rights, separate from the Common Stock, to elect any
directors of the Corporation ("Preferred Stock Directors"), the
holders of the shares of PRIDES (voting separately as a class with
holders of all other series of Preferred Stock upon which like voting
rights have been conferred and are exercisable), with each share of
PRIDES entitled to one vote on this and other matters in which
Preferred Stock votes as a group, shall be entitled to vote for the
election of two directors of the Corporation, such directors to be in
addition to the number of directors constituting the Board of
Directors immediately before the accrual of such right. Such right,
when vested, shall continue until all cumulative dividends accumulated
and payable on the shares of PRIDES and such other series of Preferred
Stock shall have been paid in full and the right of any other series
of Preferred Stock to exercise voting rights, separate from the Common
Stock, to elect Preferred Stock Directors shall terminate or have
terminated, and, when so paid and any such termination occurs or has
occurred, such right of the holders of the shares of PRIDES shall
cease. The term of office of any director elected by the holders of
the shares of PRIDES and such other series shall terminate on the
earlier of (i) the next annual meeting of stockholders at which a
successor shall have been elected and qualified or (ii) the
termination of the right of holders of the shares of PRIDES and such
other series to vote for such directors.
(c) The Corporation shall not, without the approval of the
holders of at least 66-2/3 percent of the shares of PRIDES then
outstanding: (i) amend, alter, or repeal any of the provisions of the
Restated Certificate of Incorporation or By-Laws of the Corporation so
as to affect adversely the powers, preferences or rights of the
holders of the shares of PRIDES then outstanding or reduce the minimum
time for any required notice to which the holders of the shares of
PRIDES then outstanding may be entitled (an amendment of the Restated
Certificate of Incorporation to authorize or create, or to increase
the authorized amount of, Junior Stock or any stock of any class
ranking on a parity with the PRIDES being deemed not to affect
adversely the powers, preferences, or rights of the holders of the
shares of PRIDES); (ii) authorize or create, or increase the
authorized amount of, any capital stock, or any security convertible
into capital stock of any class, ranking prior to the shares of PRIDES
either as to the payment of dividends or the distribution of assets
upon liquidation, dissolution or winding up of the Corporation; or
(iii) merge or consolidate with or into any other corporation, unless
each holder of shares of PRIDES immediately preceding such merger or
consolidation shall receive or continue to hold in the resulting
corporation the same number of shares, with substantially the same
rights and preferences, as correspond to the shares of PRIDES so held.
(d) The Corporation shall not, without the approval of the
holders of at least a majority of the shares of PRIDES then
outstanding: (i) increase the authorized number of shares of
Preferred Stock; or (ii) create any other class or classes of capital
stock of the Corporation ranking on a parity with the Preferred Stock,
either as to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up of the Corporation, or create
any stock or other security convertible into or exchangeable for or
evidencing the right to purchase any stock of such other class ranking
on a parity with the Preferred Stock, or increase the authorized
number of shares of any such other class or amount of such other stock
or security.
(e) Notwithstanding the provisions set forth in Sections
9(c) and 9(d), no such approval described therein of the holders of
the shares of PRIDES shall be required if, at or before the time when
such amendment, alteration, or repeal is to take effect or when the
authorization, creation, increase or issuance of any such prior or
parity stock or convertible security is to be made, or when such
consolidation or merger, voluntary liquidation, dissolution, or
winding up, sale, lease, conveyance, purchase, or redemption is to
take effect, as the case may be, provision is made for the redemption
of all shares of PRIDES at the time outstanding.
IN WITNESS WHEREOF, Reynolds Metals Company has caused this
certificate to be signed and attested this 20th day of January, 1994.
REYNOLDS METALS COMPANY
By: Henry S. Savedge, Jr.
Name: Henry S. Savedge, Jr.
Title: Executive Vice President and
Chief Financial Officer
Attest:
D. Michael Jones
Name: D. Michael Jones
Title: Vice President, General
Counsel and Secretary