EXHIBIT 10.43
REYNOLDS METALS COMPANY
LONG-TERM PERFORMANCE SHARE PLAN
Effective January 1, 1998
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ARTICLE I
PURPOSE OF THE PLAN
The purpose of the Plan is to assist the Company in
attracting and retaining key employees by providing long-term
performance-based incentives.
ARTICLE II
DEFINITIONS
2.01 "Additional Income" shall have the meaning
specified in Section 5.01(c).
2.02 "Beneficiary" shall mean the individual or
entity designated by the Participant to receive any amounts
allocated to the Participant that remain in the Plan upon the
death of the Participant. 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.
2.03 "Board" shall mean the Board of Directors of
the Company.
2.04 "Company" shall mean Reynolds Metals Company,
a Delaware corporation.
2.05 "Company Stock" shall mean the Common Stock of
the Company, without par value.
2.06 "Effective Date" shall mean January 1, 1998.
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2.07 "Election Period" shall mean for each
Performance Cycle the September of the third year of the
Performance Cycle; provided, however, that for the initial two-
year Performance Cycle that begins January 1, 1998, and ends
December 31, 1999, the Election Period shall mean September of
1998; and further provided that the Plan Committee in its
discretion may designate a different period for any Performance
Cycle.
2.08 "Participant" shall mean each officer and
other key employee of the Company and its subsidiaries and
affiliates who is designated by the Plan Committee to receive a
grant for a Performance Cycle.
2.09 "Performance Cycle" shall mean initially the
cycle of two full calendar years beginning January 1, 1998, and
ending December 31, 1999, and otherwise shall mean a cycle of
four full calendar years. The initial four-year Performance
Cycle shall begin January 1, 1998, and end December 31, 2001. A
new four-year Performance Cycle shall begin January 1, 2000, and
every subsequent second January 1.
2.10 "Performance Share Units" shall mean the award
units granted by the Plan Committee for a Performance Cycle as
described in Article III.
2.11 "Phantom Stock" shall mean shares of Company
Stock credited to a Participant's account in accordance with this
Plan.
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2.12 "Plan" shall mean this Reynolds Metals Company
Long-Term Performance Share Plan, as amended from time to time.
2.13 "Plan Committee" shall mean the committee of
nonemployee directors appointed by the Board to administer the
Plan.
2.14 "Termination" or "Terminated" shall mean a
Participant's termination of employment with the Company and any
subsidiary or affiliate of the Company.
ARTICLE III
GRANTS OF PERFORMANCE SHARE UNITS
As soon as feasible after the beginning of each
Performance Cycle, the Plan Committee shall (1) designate the
officers and other key employees of the Company and its
subsidiaries and affiliates who will participate in the Plan for
the Performance Cycle, (2) determine the Performance Share Units
to be granted to each such Participant, and (3) establish the
performance goal or goals that must be reached by the end of the
Performance Cycle in order for Participants to receive an award
from the Plan at the end of the Performance Cycle.
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ARTICLE IV
CALCULATION AND PAYMENT OF AWARDS
4.01 (a) After the end of each Performance Cycle,
each Participant shall be entitled to receive an award for that
Performance Cycle if and to the extent the performance goals
established in accordance with Article III for that Performance
Cycle have been met. Except as otherwise specified herein, half
of the award shall be payable in cash to the Participant (the
"Cash Portion") and half of the award shall be in the form of
shares of Phantom Stock credited to the Participant's account
(the "Phantom Stock Portion").
(b) A Participant whose employment is Terminated
before the last day of the Performance Cycle shall not be
entitled to any award for the Performance Cycle unless the
Participant's employment was Terminated on account of (i)
disability or immediate retirement, in either case for purposes
of the Reynolds Metals Company New Retirement Program for
Salaried Employees, (ii) death, (iii) a reduction in force for
purposes of the Company's Termination Allowance Policy, or (iv)
such other reason as the Plan Committee may determine. A
Participant who terminates for one of the specified reasons shall
be entitled to a pro rata portion of any award that would
otherwise be due the Terminated Participant after the end of the
Performance Cycle. This pro rata portion shall be determined by
multiplying the award that would otherwise be due the Terminated
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Participant by a fraction, the numerator of which is equal to the
number of full calendar months the Participant worked before his
or her Termination and the denominator of which is the number of
months in the Performance Cycle. Any awards made in accordance
with this Section 4.01(b) shall be distributed to the Participant
(or the Participant's Beneficiary, in case of death) as soon as
feasible after the end of the Performance Cycle; except as
otherwise provided in Section 5.04 in case of the Participant's
death, no deferral or installment payment elections made with
respect to the Performance Cycle shall apply.
4.02 The amount of the cash to be paid to a
Participant for a Performance Cycle with respect to the Cash
Portion of an award shall be determined by multiplying the number
of Performance Share Units payable in cash by the average closing
price of Company Stock on New York Stock Exchange Composite
Transactions for the last twenty (20) trading days of the
Performance Cycle. Except in the case of a voluntary or
mandatory deferral hereunder, the Cash Portion shall be paid out
to the Participant as soon as feasible after the end of the
Performance Cycle.
4.03 (a) The number of shares of Phantom Stock to
be initially credited to a Participant's account for a
Performance Cycle with respect to the Phantom Stock Portion of an
award shall be equal to the number of Performance Share Units
payable in Phantom Stock for the Performance Cycle.
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(b) As of each date when cash dividends are paid
on Company Stock, each Participant's Phantom Stock account under
the Plan shall be adjusted to reflect dividend equivalents
computed in accordance with this Section 4.03(b). The dollar
amount of the dividend equivalent for each Participant shall
equal the cash dividends that would have been paid on the number
of shares of Phantom Stock credited to the Participant's account
as of the dividend record date if that number of shares of
Phantom Stock had actually been issued and outstanding on the
record date. This dividend equivalent for each Participant shall
be converted into a number representing additional shares of
Phantom Stock by dividing (i) the total dollar amount of the
Participant's dividend equivalent by (ii) 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 the
Plan shall then be credited with the determined number of shares
of Phantom Stock, including fractional shares calculated to three
decimal places.
(c) 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, or if any special distribution is made to holders of
Company Stock, the aggregate number and
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kind of shares of Phantom
Stock credited to the account of a Participant under the Plan
shall be proportionately adjusted as the Plan Committee may deem
appropriate.
(d) No Participant shall receive any distribution
relating to Phantom Stock while the Participant is still employed
by the Company or any of its subsidiaries or affiliates. If a
Participant's employment is Terminated during a calendar year,
the Participant's Phantom Stock account shall be maintained under
the Plan through January 15 of the following year. As of such
January 15, the total number of shares of Phantom Stock credited
to the Participant's account (representing both awards and
dividend equivalents) shall be computed and a distribution made
to the Participant as soon after January 15 as administratively
feasible. Distributions shall be in shares of Company Stock,
except that the cash value of any fractional share shall be paid
in cash. The cash value of the fractional share shall be based
on the arithmetic average of the high and low sales prices of
Company Stock as reported on New York Stock Exchange Composite
Transactions on January 15 (or on the preceding business day if
the New York Stock Exchange is not open on January 15). Unless
the Participant has elected to receive the distribution in
installments in accordance with Section 5.03, any distribution
relating to Phantom Stock shall be made in a single lump sum.
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ARTICLE V
DEFERRAL OF PAYMENTS
5.01 (a) Each Participant who has not Terminated
employment shall have the right to elect to defer the receipt of
up to 85% of the Cash Portion payable with respect to a
Performance Cycle in accordance with Article IV. At the election
of the Participant, the amount deferred may be expressed (i) as a
percentage of the Cash Portion payable under Article IV, in
multiples of 5%, (ii) as a dollar amount, in multiples of $100,
or (iii) as either a percentage of the Cash Portion or a dollar
amount, in each case, in excess of a floor amount specified by
the Participant. In no case, however, may the total amount
deferred be less than $2,000 nor more than 85% of the
Participant's Cash Portion for the Performance Cycle. Any
deferral election shall be made by the Participant during the
Election Period for the Performance Cycle to which the election
relates; once made, the election shall be irrevocable.
(b) Deferred amounts shall be increased by an
amount of additional income (hereinafter referred to as
"Additional Income") computed at a specified rate and compounded
Annually on December 31st from the date the amounts would have
been paid in accordance with Section 4.02 through the December
31st coincident with or next following the Participant's
Termination. The specified rate for Cash Portions with respect
to a Performance Cycle shall be equal to the rate established
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under the Reynolds Metals Company New Management Incentive
Deferral Plan for amounts deferred under that plan with respect
to the last year of the Performance Cycle.
(c) Unless the Participant has elected to receive
installment payments in accordance with Section 5.03, any amounts
deferred in accordance with this Section 5.01, including any
applicable Additional Income, shall be paid out to the
Participant as soon as feasible in the January following the
calendar year in which the Participant's employment Terminates.
5.02 The provisions of this Section 5.02 shall
apply only to a Participant who, at the time an election to defer
is made in accordance with Section 5.01, is subject to the
Company's Stock Ownership Guidelines for Officers (an "Officer").
Any such Officer electing to defer payment of a Cash Portion may
also elect to have a specified part or all of such deferred
amount subject to Phantom Stock Additional Income (as provided
herein) instead of having Additional Income computed at a
specified rate as set forth in Section 5.01(b). Phantom Stock
Additional Income shall be computed in accordance with the
following rules:
(a) As of the date when the Cash Portion would
have been paid but for the deferral election, each Officer
who elects to receive Phantom Stock Additional Income shall
have his or her account under this Plan credited with a
number of shares of Phantom Stock, equal to the number of
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Performance Share Units in the portion of the Cash Portion
to which the deferral election relates.
(b) As of each date when cash dividends are paid
on Company Stock, each Officer who elected to receive
Phantom Stock Additional Income shall also have the
appropriate portion of his or her account under this Plan
adjusted to reflect dividend equivalents as described in
Section 4.03(b).
(c) 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, or if any special distribution is made
to holders of Company Stock, the aggregate number and kind
of shares of Phantom Stock credited to the appropriate
portion of the account of an Officer under the Plan shall be
proportionately adjusted as the Plan Committee may deem
appropriate.
(d) The election of Phantom Stock Additional
Income must be made at the same time as the election to
defer the Cash Portion in accordance with Section 5.01.
Once made, the election of Phantom Stock Additional Income
shall be irrevocable as to the Performance Cycle to which
such election applies.
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(e) Distribution of any amounts to which this
Section 5.02 applies shall be in shares of Company Stock and
shall be subject to the provisions of Section 4.03(d).
5.03 (a) All of a Participant's deferred amounts,
including any Phantom Stock Portion and any Additional Income and
dividend equivalents, shall be distributed to the Participant in
the January following the calendar year in which the
Participant's employment Terminates unless the Participant has
elected with respect to a Performance Cycle to receive the
distribution in annual installments over a period of five (5)
years. An election to receive installment payments shall be made
by the Participant during the Election Period for the Performance
Cycle to which the election relates, and if the installment
payment election relates to a Cash Portion, the installment
payment election shall be made at the same time as the election
to defer the Cash Portion. Once made, the installment payment
election shall be irrevocable.
(b) Annual installments of amounts paid in cash
shall be in equal amounts, shall consist of the deferred amounts
and the Additional Income applicable thereto, and shall be paid
as soon as administratively feasible at the beginning of each
calendar year following the year in which the Participant
Terminates employment. If the Participant has elected to receive
distributions of Phantom Stock (whether arising from the
Participant's Phantom Stock Portion, a voluntary deferral, or a
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mandatory deferral, and including in any event applicable
dividend equivalents) in five (5) annual installments, the
initial installment shall be distributed as soon as
administratively feasible after January 15 of the year following
the year of the Participant's Termination of employment and shall
equal one-fifth of the number of shares of Phantom Stock subject
to installment payments. The subsequent four annual installments
shall be paid as soon as administratively feasible after the next
four January 15 dates and shall equal in each case (i) the
remaining number of shares of Phantom Stock subject to
installment payments divided by (ii) the number of installment
payments remaining, including the installment about to be paid.
5.04 Any Participant may also irrevocably elect
during an Election Period that if the Participant dies before
receiving full distribution of all amounts for the Performance
Cycle to which the election relates, distribution to the
Beneficiary of any amounts remaining after the Participant's
death shall be made in five (5) annual installments. Such
installments shall be computed and distributed as described in
Section 5.03(b).
5.05 Anything herein to the contrary
notwithstanding, the Plan Committee may direct that all unpaid
deferred amounts, including any Phantom Stock Portion and any
applicable Additional Income and dividend equivalents, be
accelerated and distributed in a lump sum if it finds, in its
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sole discretion, that a major challenge to the control of the
Company exists or if, in conjunction with the termination of the
Plan, the Plan Committee finds, in its sole discretion, that
other extraordinary circumstances make such acceleration of
payments in the best interest of the Company; provided, however,
that the Plan Committee shall not accelerate any payment with
respect to Phantom Stock unless the Plan Committee determines
that such accelerated payment will be exempt from short-swing
profit liability pursuant to the rules promulgated under Section
16(b) of the Securities Exchange Act of 1934, as amended.
5.06 (a) The provisions of this Section 5.06 shall
apply each calendar year to each Participant who is a Top
Executive (as defined below) at the time the Cash Portion of an
award is to be paid under the Plan in that year. To the extent a
Top Executive's Estimated Annual Compensation (as defined below)
would exceed One Million Dollars ($1,000,000) for the year,
payment of any Cash Portion shall be automatically deferred in
accordance with this Section 5.06 to the extent necessary to
bring the top Executive's Estimated Annual Compensation below One
Million Dollars ($1,000,000). If necessary, all of a
Participant's Cash Portion shall be deferred, in which case any
applicable payroll taxes shall be deducted and paid from such Top
Executive's regular salary checks unless the Top Executive
reimburses the Company separately for such payroll taxes.
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(b) Any mandatory deferral in accordance with this
Section 5.06 shall be subject to the following terms and
conditions:
(i) Except as otherwise provided in
subsection (ii) below, amounts deferred under this Section
5.06 shall earn Additional Income as described in Section
5.01(b). All amounts shall be distributed to the Top
Executive in a single lump sum in the January following the
calendar year in which the Top Executive's employment
Terminates unless the Top Executive has elected to have any
amounts deferred in accordance with this Section 5.06 paid
in annual installments over a period of five (5) years as
described in, and in accordance with, Section 5.03.
(ii) A Participant who anticipates being a Top
Executive subject to a mandatory deferral in accordance with
this Section 5.06 may elect to have any amounts subject to a
mandatory deferral earn Phantom Stock Additional Income in
accordance with the provisions of Section 5.02.
(iii) A Participant who anticipates being a Top
Executive subject to a mandatory deferral in accordance with
this Section 5.06 may elect in accordance with Section 5.04
that in case of such Top Executive's death before all
amounts subject to the mandatory deferral are distributed,
distribution to the Beneficiary of any amounts remaining
after the Participant's death shall be made in five (5)
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annual installments. Such installments shall be computed
and distributed as described in Section 5.03(b).
(iv) Any elections made under subsections (i),
(ii) and (iii) above shall be made at the same time, which
time shall be no later than the December 31st of the last
year of the Performance Cycle to which the Cash Portion
relates. Once made, any such election shall be irrevocable.
(v) Anything in this Section 5.06(b) to the
contrary notwithstanding, if and to the extent a Participant
who is a Top Executive has already made a deferral election,
a Phantom Stock Additional Income election, or an
installment payment election with respect to the Cash
Portion of an award affected by this Section 5.06, the prior
election(s) shall automatically apply to all amounts subject
to the mandatory deferral provisions of this Section 5.06,
and the Top Executive shall not be permitted to make any
different or additional elections under subsections (i),
(ii) and/or (iii) above.
(c) For purposes of this Section 5.06, a Top
Executive's "Estimated Annual Compensation" for a given year
shall be equal to (i) the Top Executive's anticipated salary for
the year as approved by the Compensation Committee in January of
the year (taking into account any approved increase to become
effective during the year), less any amounts the Top Executive
has voluntarily elected to defer under the Reynolds Metals
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Company Salary Deferral Plan for Executives for the year, plus
(ii) the anticipated incentive compensation to be paid to the Top
Executive under the Reynolds Metals Company Supplemental
Incentive Plan, less any amounts the Top Executive has
voluntarily elected to defer under the Reynolds Metals Company
New Management Incentive Deferral Plan, plus (iii) the amount of
any previously deferred incentive compensation payable to the Top
Executive during the year that will count as compensation in the
year for purposes of Section 162(m) of the Internal Revenue Code
of 1986, as amended, plus (iv) the amount of miscellaneous or
imputed income (for items such as the imputed value of life
insurance and the use of a car or plane) that the Top Executive
had for the immediately preceding calendar year.
(d) "Top Executive" shall mean for any calendar
year any individual who may reasonably be expected to be a
"covered employee" for the year for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended.
ARTICLE VI
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
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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 VII
AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN
The Board 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 any awards
previously earned by such Participant and not yet paid.
ARTICLE VIII
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.
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ARTICLE IX
COMPANY STOCK
Shares of Company Stock distributed under the Plan
shall be shares purchased by the Company on the open market or
shares held in the Company's treasury from time to time, or a
combination of both, as the Board may from time to time
determine.
ARTICLE X
GENERAL PROVISIONS
10.01 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
established with respect to such election.
10.02 Neither the establishment of the Plan nor the
payment of any benefits hereunder nor any action of the Company,
including its Board, in connection therewith shall be held or
construed to confer upon any individual any legal right to remain
an officer or an employee of the Company.
10.03 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
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any manner liable for or subject to the recipient's debts,
contracts, liabilities, engagements, or torts.
10.04 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.
10.05 The Company shall not be required to deliver
any fractional share of Common Stock but shall pay, in lieu
thereof, the cash value (measured as of the January 15
immediately preceding the distribution) of such fractional share
to the Participant (or the Participant's Beneficiary, if
applicable). The cash value of a fractional share shall be
computed as described in Section 4.03(d).
10.06 The Company shall either (a) deduct from the
amount of any payments hereunder all taxes required to be
withheld by applicable laws or (b) make such other arrangements
as may be necessary or appropriate to meet its withholding
obligations.
10.07 This Plan shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Virginia.
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Executed and adopted as of May 15, 1998, pursuant to
action taken by the Board of Directors of Reynolds Metals Company
at its meeting on that date.
REYNOLDS METALS COMPANY
By ___________________________
Title: Vice President,
Human Resources