Exhibit 99
DESCRIPTION OF REYNOLDS METALS COMPANY CAPITAL STOCK
The Company is authorized by its Restated Certificate of
Incorporation to issue a total of 221,000,000 shares of capital
stock, consisting of (i) 200,000,000 shares of common stock,
without par value (the "Common Stock"), (ii) 20,000,000 shares of
preferred stock, without par value (the "Preferred Stock"), and
(iii) 1,000,000 shares of second preferred stock, $100 par value
(the "Second Preferred Stock"). Shares of Preferred Stock and
Second Preferred Stock are issuable in one or more series, each
with such designations, preferences, rights, qualifications,
limitations and restrictions as the Board of Directors of the
Company may determine in resolutions providing for their
issuance.
As of April 30, 1998, there were issued, outstanding and
entitled to vote 72,003,415 shares of Common Stock. No shares of
Preferred Stock or Second Preferred Stock are currently
outstanding, although the Board of Directors has adopted
resolutions authorizing the issuance of up to 2,000,000 shares of
a Series A Junior Participating Preferred Stock, without par
value, issuable upon the occurrence of certain events as
described below in the section entitled "Common Stock - Preferred
Stock Purchase Rights."
Common Stock
Dividend Rights and Restrictions on Payment of Dividends.
Holders of Common Stock are entitled to receive dividends, when
and as declared by the Board of Directors, subject to
restrictions which may be imposed by (i) resolutions providing
for the issuance of series of Preferred Stock or Second Preferred
Stock; and (ii) certain credit agreements of the Company, as
described below. Dividends on Preferred Stock and Second
Preferred Stock may be cumulative, and no payments or
distributions (except in Common Stock or other junior stock) may
be made on Common Stock, nor may any Common Stock be acquired by
the Company, unless all past and current dividends on Preferred
Stock and Second Preferred Stock have been paid or provided for.
Under certain of the Company's credit agreements, the Company may
not declare or pay dividends on, make any payment on account of,
or set apart assets for a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition
of, any shares of capital stock of the Company, nor may the
Company make any other distribution in respect thereof, if
specified events of default (including payment defaults and
events relating to bankruptcy, insolvency or reorganization) have
occurred and are continuing. No such events of default have
occurred.
Voting Rights. Holders of Common Stock are entitled to one
vote for each share held of record and are not entitled to
cumulate votes for the election of directors. As a consequence,
holders of more than 50% of the shares of Common Stock voting for
the election of directors can elect all of the directors if they
so choose; in such event, the holders of the remaining shares of
Common Stock would not be able to elect any directors. Holders
of Common Stock have voting powers on all matters requiring
approval of stockholders, other than certain matters subject to
the voting rights of holders of the Company's Preferred Stock and
Second Preferred Stock to the extent provided in the applicable
resolutions authorizing their issuance or otherwise under
Delaware law.
Liquidation Rights. In the event of liquidation,
dissolution or winding up of the Company, holders of Common Stock
are entitled to share ratably in the assets of the Company
remaining after payment or provision for payment of all the
Company's debts and other liabilities and after the holders of
any outstanding series of Preferred Stock and Second Preferred
Stock have been paid the full preferential amounts due them. Any
preferential rights to be accorded holders of Preferred Stock and
Second Preferred Stock will be set forth in resolutions of the
Board of Directors authorizing issuance of any series.
Preemptive Rights; Assessability. Holders of Common Stock
have no preemptive or conversion rights and there are no
redemption or sinking fund provisions applicable thereto. The
outstanding shares of Common Stock are fully paid and non-
assessable.
Transfer Agent and Registrar. The transfer agent and
registrar for the Common Stock is ChaseMellon Shareholder
Services LLC, 450 West 33rd Street, 15th Floor, New York, New
York 10001.
Preferred Stock Purchase Rights. On November 21, 1997, the
Board of Directors of the Company declared a dividend
distribution of one Preferred Stock Purchase Right (individually
a "Right", and collectively the "Rights") for each outstanding
share of Common Stock to stockholders of record at the close of
business on December 1, 1997 (the "Record Date"). Each Right
entitles the record holder to purchase from the Company, from and
after the Distribution Date (as defined below) one one-hundredth
of a share of the Company's Series A Junior Participating
Preferred Stock, without par value (the "Series A Preferred
Stock") at a price of $300 (the "Purchase Price"), subject to
adjustment in certain circumstances. The description and terms
of the Rights are set forth in a Rights Agreement, dated as of
December 1, 1997 (the "Rights Agreement"), between the Company
and The Chase Manhattan Bank, N.A., as Rights Agent (the "Rights
Agent").
Initially, the Rights are attached to and represented by the
certificates representing outstanding shares of Common Stock.
The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earlier of (i) ten days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) ten business days following the
commencement of a tender offer or exchange offer if, upon
consummation thereof, the person or group making such offer would
be the beneficial owner of 20% or more of the outstanding shares
of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after December 1, 1997
will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable
following the Distribution Date, Rights Certificates will be
mailed to holders of record of the Common Stock as of the close
of business on the Distribution Date and, thereafter, such
separate
Rights Certificates alone will evidence the Rights.
Except in certain limited circumstances, only shares of Common
Stock issued prior to the Distribution Date will be issued with
Rights.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on December 1, 2007,
unless earlier exercised or redeemed by the Company as described
below.
At any time following the Distribution Date, if (i) the
Company is the surviving corporation in a merger with an
Acquiring Person and its Common Stock is not changed or
exchanged, (ii) a Person becomes the beneficial owner of 25% or
more of the then outstanding shares of Common Stock (other than
pursuant to an offer for all outstanding shares of Common Stock
at a price and on terms which the majority of the Continuing
Directors (as hereinafter defined) determine to be fair to, and
otherwise in the best interests of, stockholders), or (iii) an
Acquiring Person receives equity securities (other than pursuant
to a pro rata distribution) from the Company, acquires from or
transfers to the Company assets with a fair market value
exceeding $10,000,000 or engages in certain other "self-dealing"
transactions specified in the Rights Agreement, the Rights
Agreement requires that proper provision be made so that each
holder of a Right will thereafter have the right to receive, upon
the exercise thereof, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right. However,
Rights are not exercisable following the occurrence of the events
set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below. Notwithstanding
any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, any Rights that are, or
(under certain circumstances specified in the Rights Agreement)
were, beneficially owned by an Acquiring Person shall immediately
become null and void.
At any time following the Stock Acquisition Date, if (i) the
Company engages in a merger or consolidation in which the Company
is not the surviving corporation, (ii) the Company engages in a
merger or consolidation with another person in which the Company
is the surviving corporation, but in which all or part of the
Common Stock is changed or exchanged, or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, the
Rights Agreement requires that proper provision be made so that
each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to
receive, upon the exercise thereof, common stock of the acquiring
company having a value equal to two times the exercise price of
the Right. The Rights may not be so exercised in the case of a
merger or consolidation (a) which follows an offer described in
clause (ii) of the preceding paragraph and (b) in which the form
and amount of consideration is the same as was paid in such
offer. The events set forth in this paragraph and in the
preceding paragraph are referred to as the "Triggering Events."
The Rights Agreement provides that the Company may not
consolidate or merge with, or sell 50% of the Company's assets or
earning power to, any person which has securities or is bound by
agreements which would substantially diminish the benefits of the
Rights.
The Purchase Price payable, and the number of one one-
hundredths of a share of Series A Preferred Stock or other
securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on the Series A Preferred Stock
or other capital stock, or a subdivision, combination or
reclassification of the Series A Preferred Stock, (ii) upon the
grant to holders of the Series A Preferred Stock of certain
rights or warrants to subscribe for Series A Preferred Stock or
securities convertible into Series A Preferred Stock at less than
the current market price of the Series A Preferred Stock, or
(iii) upon the distribution to holders of the Series A Preferred
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends or dividends payable in Series A
Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. The Company
may, in lieu of issuing fractional shares of Series A Preferred
Stock (other than fractions which are integral multiples of one
one-hundredth of a share) upon exercise of the Rights, make a
cash payment based on the market price of the Series A Preferred
Stock on the last trading date prior to the date of exercise.
If the Company is not able to issue shares of Series A
Preferred Stock or Common Stock because of the absence of
necessary regulatory approval, restrictions contained in the
Company's Certificate of Incorporation or for any other reason, a
person exercising Rights will be entitled to receive a
combination of cash or property or other securities having a
value equal to the value of the shares of Preferred or Common
Stock which would otherwise have been issued upon exercise of the
Rights.
At any time until ten days following the Stock Acquisition
Date, the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right, payable
in cash or securities or both (the "Redemption Price"). Upon
certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of
the Continuing Directors. Thereafter, this right of redemption
may be reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving
the Company and there are no other Acquiring Persons.
Immediately upon the action of the Board of Directors of the
Company ordering redemption of the Rights, with, where required,
the concurrence of a majority of the Continuing Directors, the
Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
After a Person becomes an Acquiring Person and before any
Acquiring Person acquires 50% or more of the outstanding shares
of Common Stock, the Company, with the approval of a majority of
Continuing Directors, may require a holder to exchange all or any
portion of the holder's Rights for one share of Common Stock or
one one-hundredth of a share of the Series A Preferred Stock (or
in certain circumstances, other securities of the Company) per
Right.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While
the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income at such time as the
Rights become exercisable or are exercised for Common Stock (or
other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Certain provisions of the Rights Agreement relating to the
principal economic terms of the Rights may not be amended at any
time. Other provisions may be amended by the Board of Directors
of the Company prior to the Distribution Date. Thereafter, these
provisions of the Rights Agreement may be amended by the Board
(in certain circumstances only with the concurrence of the
Continuing Directors) in order: to cure any ambiguity, defect or
inconsistency; to shorten or lengthen any time period under the
Rights Agreement; or in any other respect that will not adversely
affect the interest of holders of Rights (excluding the interest
of any Acquiring Person); provided, that no amendment to adjust
the time period governing redemption may be made if the Rights
are not redeemable at the time of such amendment.
Shares of Series A Preferred Stock purchasable upon exercise
of the Rights will not be redeemable. Each one one-hundredth of
a share of Series A Preferred Stock will be entitled to (i) an
aggregate quarterly dividend equal to the greater of (a) the
quarterly dividend declared per share of Common Stock or (b)
$.10, (ii) upon liquidation, a minimum preferential liquidation
payment of $1.00 and an aggregate liquidation payment equal to
the liquidation payment made per share of Common Stock, (iii) one
vote, voting together with the shares of Common Stock and (iv) in
the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, the same amount
received per share of Common Stock. These rights are protected
by customary anti-dilution provisions. Because of the nature of
the Series A Preferred Stock's dividend, liquidation and voting
rights, the value of each one one-hundredth of a share of Series
A Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
The term "Continuing Director" means any member of the
Company's Board of Directors who was a member of the Board prior
to the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person is recommended
or approved by a majority of the Continuing Directors.
Continuing Directors do not include an Acquiring Person, or any
representative thereof.
Delaware General Corporation Law Section 203
The Company is subject to the provisions of Section 203 of
the General Corporation Law of the State of Delaware ("DGCL
Section 203"), the "business combination" statute. In general,
the statute prohibits a public Delaware corporation from engaging
in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in
which the person became an interested stockholder, unless (i)
prior to such date, the board of directors of the corporation
approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder,
(ii) upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced
(excluding certain shares described in DGCL Section 203), or
(iii) on or after such date, the business combination is approved
by the board of directors of the corporation and authorized at an
annual or special meeting of stockholders and by the affirmative
vote of at least two-thirds of the outstanding voting stock that
is not owned by the "interested stockholder". "Business
combination" is defined to include mergers, asset sales and
certain other transactions resulting in a financial benefit to a
stockholder. An "interested stockholder" is defined generally as
a person who, together with affiliates and associates, owns (or,
within the prior three years, did own) 15% or more of a
corporation's voting stock. The Company's Restated Certificate
of Incorporation does not exclude the Company from the
restrictions imposed under DGCL Section 203. Thus, such statute
could prohibit or delay the accomplishment of mergers or other
takeover or change in control attempts with respect to the
Company and, accordingly, may discourage attempts to acquire the
Company.