EXHIBIT 10.12
REYNOLDS METALS COMPANY
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS
As Amended and Restated
Effective December 1, 1993
ARTICLE I
PURPOSE OF THE PLAN
The purpose of the Plan is to assist the Company in attracting and
retaining qualified individuals to serve as Directors and to assist
Directors in planning for their retirement.
ARTICLE II
DEFINITIONS
2.01 "Beneficiary" shall mean the individual or entity designated
by the Participant to receive any amounts remaining in the Plan upon the
Participant's death. If no such designation is made, or if the designated
individual predeceases the Participant or the entity no longer exists, then
the Beneficiary shall be the Participant's estate.
2.02 "Company" shall mean Reynolds Metals Company, a Delaware
corporation.
2.03 "Company Stock" shall mean the Common Stock of the Company,
without par value.
2.04 "Current Compensation" shall mean that portion of Director
Compensation which the Participant elects to accept immediately in return
for services performed for the Company.
2.05 "Deferred Compensation" shall mean that portion of Director
Compensation which the Participant elects to defer in the manner provided
for herein, until the time or times selected for payment in accordance with
Section 4.02.
2.06 "Deferral Termination Date" shall mean one of the following
dates, as elected by the Participant: (a) the date on which the Participant
ceases to be a member of the Board of Directors of the Company, (b) the
date of the Participant's seventieth (70th) birthday, or (c) the last day
of such specified year as the Participant shall elect.
2.07 "Director" shall mean a member of the Board of Directors of
the Company who is not an employee of the Company or of one of its
subsidiaries.
2.08 "Director Compensation" shall mean all compensation received
for services on and after January l, 1987, as a member of the Board of
Directors of the Company, as Chairman of the Board, and as chairman or a
member of a committee of the Board, including retainers and meeting fees
duly authorized by the Board of Directors, but shall not include payments
made in reimbursement of travel and other out-of-pocket expenses.
2.09 "Effective Date" shall mean December l, 1986.
2.10 "Participant" shall mean a Director who submits a written
request pursuant to the terms of this Plan for deferral of Director
Compensation.
2.11 "Plan" shall mean this Reynolds Metals Company Deferred
Compensation Plan for Outside Directors.
2.12 "Plan Committee" shall mean the committee appointed by the
Chief Executive Officer of the Company to administer the Plan.
ARTICLE III
ELECTIONS TO DEFER DIRECTOR COMPENSATION
3.01 Before the start of each calendar year during the term of
the Plan, each Director, whether or not then a Participant, shall have the
right to elect to defer the receipt of 25%, 50%, 75% or 100% of Director
Compensation to be earned by such Director in respect of such calendar
year. At the time of such election, the Director shall also elect with
respect to such Deferred Compensation:
(a) The Deferral Termination Date, as provided in Section 2.06;
provided, however, that if the Participant elects Additional
Compensation in the form of Stock Equivalent Additional Compensation
as provided in Section 4.01(b), the Deferral Termination Date must be
the date described in Section 2.06(a);
(b) The form of Additional Compensation, as provided in Section
4.01; and
(c) The method of payment, as provided in Section
4.02.
3.02 An individual who becomes a Director after the
beginning of a calendar year may make the elections referred to
in Section 3.01 with respect to any Director Compensation to be
earned in respect of the remaining portion of such calendar year.
Any such election must be made within forty-five (45) days of the
date the Director first becomes eligible hereunder.
3.03 An election made under Section 3.01 or 3.02 shall
be irrevocable as to the Director Compensation to which such
election applies, except as otherwise provided herein.
ARTICLE IV
PAYMENT OF DEFERRED COMPENSATION
4.01 Deferred Compensation shall be paid in cash
following the applicable Deferral Termination Date in accordance
with the provisions of Section 4.02. There shall be added to all
Deferred Compensation payments an amount of additional
compensation (hereinafter referred to as "Additional
Compensation") computed under subsection (a) or (b) below, as
elected by the Participant with regard to the Deferred
Compensation being paid:
(a) "Interest Equivalent Additional Compensation"
shall be computed at a specified rate and compounded semi-
annually on June 30th and December 31st from the date the
compensation would have been paid if it were Current
Compensation to the date of payment. Interest Equivalent
Additional Compensation shall be computed as follows:
(i) For Director Compensation deferred on and
after January 1, 1988, the rate at which Interest
Equivalent Additional Compensation is computed shall be
determined pursuant to this subsection (i). Before the
start of each calendar year, and before the elections
referred to in Section 3.01 are made with regard to
Director Compensation to be earned in respect of such
year, the Plan Committee shall determine the rate
applicable to Director Compensation deferred for that
year. This rate shall apply to amounts deferred during
that year until all such amounts are paid out.
(ii) For Director Compensation deferred during
1987, the rate at which Interest Equivalent Additional
Compensation is computed shall continue to be
determined pursuant to the terms of the Plan in effect
on January l, 1987.
(b) "Stock Equivalent Additional Compensation" shall
be computed in accordance with this Section 4.01(b).
(i) As of each date when Director Compensation
would have been paid if it were Current Compensation,
each Participant who elected to receive Stock
Equivalent Additional Compensation shall have his
account under this Plan credited with a number of
equivalent shares of Company Stock determined by
dividing (A) the total dollar amount of such Deferred
Compensation by (B) the arithmetic average of the high
and low sales prices of Company Stock as reported on
New York Stock Exchange - Composite Transactions on
such date. Fractional equivalent shares shall be
calculated to three decimal places.
(ii) As of each date when cash dividends are
paid on Company Stock, each Participant who elected to
receive Stock Equivalent Additional Compensation shall
also have his account under this Plan adjusted to
reflect dividend equivalents computed pursuant to this
subsection (ii). The dollar amount of the dividend
equivalent for each Participant shall equal the cash
dividends that would have been paid on the number of
equivalent shares of Company Stock credited to the
Participant's account as of the dividend record date if
that number of equivalent shares had actually been
issued and outstanding on the record date. This
dividend equivalent for each Participant shall be
converted into a number representing equivalent shares
of Company Stock by dividing (A) the total dollar
amount of the Participant's dividend equivalent by (B)
the arithmetic average of the high and low sales prices
of Company Stock as reported on New York Stock Exchange
- Composite Transactions on the date when the cash
dividends are paid. The Participant's account under
this Plan shall then be credited with the determined
number of equivalent shares of Company Stock, including
fractional shares calculated to three decimal places.
(iii) If any stock dividend is declared upon
Company Stock, or if there is any stock split, stock
distribution, or other recapitalization of the Company
with respect to its Company Stock resulting in a split-
up or combination or exchange of shares, the aggregate
number and kind of equivalent shares of Company Stock
credited to the account of a Participant under the Plan
shall be proportionately adjusted as the Plan Committee
may deem appropriate.
4.02 A Participant's Deferred Compensation and Addi-
tional Compensation shall be paid to such Participant in a single
lump sum payment or in annual installments over a period of
between two (2) and ten (10) years, as elected by the
Participant, following the applicable Deferral Termination Date.
Such election as to payment period shall be made by the
Participant at the same time as the election of the Deferral
Termination Date in accordance with Sections 3.01 and 3.02 of
this Plan. The following rules shall apply to payments under
this Section 4.02:
(a) If Interest Equivalent Additional Compensation is
being paid on the Deferred Compensation, lump sum payments
shall be paid as soon as administratively feasible following
the year in which the Deferral Termination Date occurs.
Annual installments shall consist of equal amounts of
Deferred Compensation, and, together with the Interest
Equivalent Additional Compensation applicable thereto, shall
be paid as soon as administratively feasible in each
calendar year following the year in which the Deferral
Termination Date occurs. For purposes of this Plan, the
Interest Equivalent Additional Compensation applicable to
any installment payment shall equal (i) the total amount of
Interest Equivalent Additional Compensation then accrued and
applicable to the total Deferred Compensation being paid in
installments, divided by (ii) the number of installment
payments remaining, including the installment about to be
paid.
(b) If Stock Equivalent Additional Compensation is
being paid on the Deferred Compensation, the amount of a
lump sum payment shall be equal to (i) the total number of
equivalent shares of Company Stock credited to the
Participant's account under this Plan as of the last day on
which the New York Stock Exchange, Inc. is open in the year
the Deferral Termination Date occurs, multiplied by (ii) the
closing sales price of Company Stock as reported on New York
Stock Exchange - Composite Transactions on such date. This
lump sum payment shall be paid as soon as administratively
feasible following the end of the year. If annual
installments are elected instead of a lump sum, the amount
of the installment payment to be made in a calendar year
shall be computed by taking (y) the amount that would have
been payable after the end of the preceding year had the
entire amount remaining as of the end of such year been paid
as a single lump sum, divided by (z) the number of
installment payments remaining, including the installment
about to be paid. Annual installments shall be paid as soon
as administratively feasible in each calendar year following
the year in which the Deferral Termination Date occurs.
4.03 Payments in Case of Death. In the event of a
Participant's death, the remaining unpaid portion of such
Participant's Deferred Compensation and Additional Compensation
shall be accelerated and paid to the Participant's Beneficiary as
soon as practicable after the Participant's death.
4.04 Acceleration of Payments.
(a) Subject to the provisions of Section 4.04(d),
upon receipt of a written request from a Participant or a
Participant's legal representative, if the Participant is not
competent to manage his affairs, the Plan Committee may direct
that all or any part of the undelivered portion of Deferred
Compensation (together with the Additional Compensation
applicable thereto) be accelerated and paid in a lump sum if it
finds, in its sole discretion, that continued deferral of such
Deferred Compensation will cause such Participant severe
financial hardship.
(b) Subject to the provisions of Section 4.04(d), the
Plan Committee may direct that all unpaid Deferred Compensation
(together with the Additional Compensation applicable thereto) be
accelerated and paid in a lump sum if it finds, in its sole
discretion, that a major challenge to the control of the Company
exists.
(c) Subsections (a) and (b) above shall apply both to
Director Compensation deferred in previous years and to Director
Compensation being deferred during the year in which the
acceleration of payments is approved, except that no Deferred
Compensation shall be paid out prior to the date such Deferred
Compensation would be payable if it were Current Compensation.
(d) Anything herein to the contrary notwithstanding,
the Plan Committee shall not accelerate any payment of Deferred
Compensation with respect to which Stock Equivalent Additional
Compensation is to be paid unless the Plan Committee determines
that such accelerated payments comply with Rule 16a-l(c)(3) under
Section 16 of the Securities Exchange Act of 1934.
ARTICLE V
ADMINISTRATION
The Plan Committee shall have full responsibility and
authority to interpret and administer the Plan, including the
power to promulgate rules of Plan administration, the power to
settle any disputes as to rights or benefits arising from the
Plan, the power to appoint agents and delegate its duties, and
the power to make such decisions or take such actions as the Plan
Committee, in its sole discretion, deems necessary or advisable
to aid in the proper administration of the Plan. Actions and
determinations by the Plan Committee shall be final, binding and
conclusive for all purposes of this Plan.
ARTICLE VI
AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN
The Board of Directors of the Company may from time to
time amend, suspend or terminate the Plan, in whole or in part,
except that no such amendment, suspension or termination shall
materially adversely affect the rights of any Participant in
respect of Deferred Compensation previously earned by such
Participant and not yet paid.
ARTICLE VII
FUNDING
No promises under this Plan shall be secured by any
specific assets of the Company, nor shall any assets of the
Company be designated as attributable or allocated to the
satisfaction of such promises. Benefit payments shall be made
from the Company's general assets.
ARTICLE VIII
GENERAL PROVISIONS
8.01 All elections by a Participant hereunder shall be
made in writing by the completion and delivery to the Company of
forms prescribed for such purpose within the time limits set
forth herein with respect to such election. In the event the
federal income tax treatment of deferred compensation is
unfavorably changed or interpreted, the Plan Committee may, in
its sole discretion, authorize Participants to change their
elections; provided, however, that the Plan Committee shall not
allow Participants to change their elections regarding any
Deferred Compensation with respect to which Stock Equivalent
Additional Compensation is to be paid unless the Plan Committee
determines that such change of elections complies with Rule 16a-
1(c)(3) under Section 16 of the Securities Exchange Act of 1934.
8.02 Neither the establishment of the Plan nor the
payment of any benefits hereunder nor any action of the Company,
including its Board of Directors, in connection therewith shall
be held or construed to confer upon any individual any legal
right to remain on the Board of Directors of the Company.
8.03 No benefit under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, except by will or the laws of
descent and distribution, and any attempt thereat shall be void.
No such benefit shall, prior to receipt thereof, be in any manner
liable for or subject to the recipient's debts, contracts,
liabilities, engagements, or torts.
8.04 This Plan shall inure to the benefit of, and be
binding upon, the Company and each Participant, and upon the
successors and assigns of the Company and of each Participant.
8.05 The Company shall deduct from the amount of any
payments hereunder all taxes required to be withheld by
applicable laws.
8.06 This Plan shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia.
Executed and adopted this 21st day of December, 1993,
pursuant to action taken by the Executive Committee of the Board
of Directors of Reynolds Metals Company at its meeting on
December 2, 1993.
REYNOLDS METALS COMPANY
By Donald T. Cowles
Title Executive Vice President,
Human Resources and
External Affairs