EXHIBIT 10.28
REYNOLDS METALS COMPANY
1996 NONQUALIFIED STOCK OPTION PLAN
As Amended and Restated
Effective April 1, 1999
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ARTICLE I
DEFINITIONS
1.01 "Board" shall mean the Board of Directors of the
Company.
1.02 "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
1.03 "Committee" shall mean the Committee established
under Section 3.01 to administer the Plan.
1.04 "Company" shall mean Reynolds Metals Company, a
Delaware corporation.
1.05 "Company Stock" shall mean Common Stock of the
Company and such other stock and securities as may be substituted
therefor pursuant to Section 6.02.
1.06 "Eligible Employee" shall mean any officer or
regular salaried employee of the Company or a Subsidiary who
satisfies all of the requirements of Section 2.02; provided,
however, that no individual who is not a regular salaried
employee of the Company or a Subsidiary may be granted a stock
option hereunder if such individual is deemed at the time of the
grant to be an "officer" of the Company for purposes of Section
16(a) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
1.07 "Fair Market Value" shall mean, with respect to
Company Stock, the closing price of Company Stock (a) as reported
on New York Stock Exchange-Composite Transactions (or other
appropriate reporting vehicle as determined by the Committee) for
a specified date or (b) if no such report for Company Stock is
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available for such date, the closing price of Company Stock as
reported for the next preceding day on which Company Stock was
traded and for which such report is available.
1.08 "Grantee" shall mean any person who has been
granted a stock option, either with or without related stock
appreciation rights, under the Plan.
1.09 "Option Period" shall mean the period of time
provided pursuant to Section 4.04 within which a stock option may
be exercised.
1.10 "Plan" shall mean the Reynolds Metals Company 1996
Nonqualified Stock Option Plan, as amended from time to time.
1.11 "Stockholder Approval" shall mean approval by the
affirmative vote of the stockholders of the Company present in
person or by proxy and entitled to vote, representing a majority
of the votes cast at a meeting duly called for that purpose and
at which a quorum shall be present.
1.12 "Subsidiary" shall mean any corporation now or
hereafter in existence in which the Company owns, directly or
indirectly, a voting stock interest of more than fifty percent
(50%).
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ARTICLE II
PARTICIPATION
2.01 Purpose. The purpose of the Plan is to further
the growth and success of the Company and its Subsidiaries by
providing key employees with additional incentive to contribute
to such growth and success and by aiding the Company in
attracting and retaining key employees.
2.02 Eligibility. Key employees of the Company and its
Subsidiaries (including officers and employees who may be members
of the Board) who, in the sole opinion of the Committee,
contribute significantly to the growth and success of the Company
or a Subsidiary shall be eligible for options to purchase Company
Stock and related stock appreciation rights under the Plan. From
among all such Eligible Employees, the Committee shall determine
from time to time those Eligible Employees to whom options and
related stock appreciation rights, if any, shall be granted. No
Eligible Employee shall have any right whatsoever to receive
options or stock appreciation rights unless so determined by the
Committee.
2.03 No Employment Rights. The Plan shall not be
construed as conferring any rights upon any person for a
continuation of employment, nor shall it interfere with the
rights of the Company or any Subsidiary to terminate the
employment of any person or to take any other action affecting
such person.
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ARTICLE III
COMMITTEE
3.01 Administration. The Plan shall be administered by
a Committee of at least three (3) persons, all of whom shall be
members of the Board, appointed from time to time by the Board.
The Board shall appoint one member of the Committee to act as
Chairman. Vacancies shall be filled in the same manner as
original appointments. The Committee shall hold meetings upon
such notice and at such place or places, and at such time or
times as it may from time to time determine. A majority of the
members of the Committee at the time in office shall constitute a
quorum for the transaction of business, and the acts of a
majority of the members participating in any meeting at which a
quorum is present shall be the acts of the Committee. The
Committee may act without a meeting if a consent in writing
setting forth the action so taken shall be signed by all of the
members of the Committee and filed with the minutes of the
Committee. As of the time that the Committee exercises its
discretion in administering the Plan, all of the members of the
Committee shall be "disinterested persons" as contemplated by
Rule l6b-3, as in effect at such time, under the Securities
Exchange Act of 1934, as amended.
3.02 Authority of Committee. Subject to the provisions
of the Plan, the Committee shall have full and final authority to
determine:
(a) the persons to whom options shall be granted,
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(b) the number of shares to be included in each
option,
(c) the price at which the shares included in each
option may be purchased,
(d) the period or periods of time within which each
option may be exercised, and
(e) the stock appreciation rights, if any, related to
each option.
In no case, however, shall a Grantee be awarded options to
purchase in the aggregate more than three hundred thousand
(300,000) shares of Company Stock under the Plan. Nothing
contained in this Plan shall be construed to give any person the
right to be granted an option or stock appreciation right. The
Committee is empowered, in its discretion, (i) to modify, extend
or renew any option or stock appreciation right theretofore
granted, subject to the limitations set forth in Articles IV and
V, and (ii) to adopt such rules and regulations and take such
other action as it shall deem necessary or proper for the
administration of the Plan; provided, however, that except to the
extent provided under Section 6.02, the Committee shall not have
the power to reprice options or stock appreciation rights that
have been granted previously under the Plan. The Committee shall
also have authority to interpret the Plan, and the decision of
the Committee on any questions concerning the interpretation of
the Plan shall be final and conclusive. The Committee may
consult with counsel, who may be counsel for the Company, and
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shall not incur any liability for any action taken in good faith
in reliance upon the advice of counsel.
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ARTICLE IV
TERMS OF OPTIONS
4.01 General. Grants of options shall be made without
the payment of a purchase price by any Grantee. Each option
granted under the Plan shall be evidenced by a stock option
agreement between the Company and the Grantee which shall contain
the terms and conditions required by this Article IV, and such
other terms and conditions, not inconsistent herewith, as the
Committee may deem appropriate in each case.
4.02 Option Price. The price at which each share of
Company Stock covered by an option may be purchased shall be
determined in each case by the Committee and set forth in each
stock option agreement. In no event shall such price be less
than one hundred percent (100%) of the Fair Market Value of
Company Stock on the date the option is granted.
4.03 Period for Exercise. Each stock option agreement
shall state the period or periods of time within which the option
may be exercised by the Grantee, in whole or in part, which shall
be the period or periods of time as may be determined by the
Committee, provided that:
(a) No option may be exercised within one (l) year
from the date the option is granted;
(b) No Option Period may exceed ten (l0) years from
the date the option is granted;
(c) If the Grantee's employment by the Company and its
Subsidiaries terminates because of the Grantee's
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retirement or disability, or for any other reason with the
approval of the Committee, any option outstanding and exercisable
as of the date of termination (and, in the Committee's sole
discretion, any option outstanding but not yet exercisable
as of such date) may be exercised by the Grantee following
the date of termination (to the extent permitted by Section
4.03(a) and in accordance with the terms of the stock option
agreement);
(d) If the Grantee dies during the Option Period
either while in the employ of the Company or a Subsidiary or
following the date of termination of employment as described
in subsection (c) above, any option otherwise outstanding
and exercisable as of the date of death may be exercised
following such death in accordance with the terms of the
stock option agreement, by the person or persons entitled to
do so under the Grantee's last will and testament, or if the
Grantee shall fail to make testamentary disposition of his
or her option or shall die intestate, by the person or
persons entitled to receive said option under the intestate
laws; and
(e) If the Grantee's employment by the Company and its
Subsidiaries terminates for reasons other than death,
retirement, disability, or other reasons approved by the
Committee pursuant to subsection (c) above, then any
outstanding option shall be deemed terminated immediately
and shall not thereafter be exercisable by the Grantee.
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4.04 Exercise of Option. Subject to Section 4.03, each
option may be exercised in whole or in part from time to time as
specified in the stock option agreement. Each Grantee may
exercise an option by giving written notice of the exercise to
the Company, specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price therefor; if
required, the Grantee shall also pay an amount equal to the
applicable withholding taxes as soon as administratively
feasible. The purchase price may be paid in cash, by check, or,
with the approval of the Committee, in shares of Company Stock
having at the time the option is exercised an aggregate Fair
Market Value equal to the purchase price of the shares acquired
pursuant to the exercise of the option, or a combination thereof.
Likewise, the applicable withholding taxes may be paid in cash,
by check, or, with the approval of the Committee, in shares of
Company Stock (including shares received from the exercise of the
option) having at the time the option is exercised an aggregate
Fair Market Value equal to such withholding taxes, or a
combination thereof. A Grantee may also exercise an option by
way of the Company's broker-assisted stock option exercise
program, provided such program is available to the Grantee at the
time of the option's exercise. An option shall become
nonexercisable and shall be treated as voluntarily surrendered to
the extent that the related stock appreciation right is
exercised. No Grantee shall be under any obligation to exercise
any option granted hereunder. The Grantee may exercise the
option or not in his or her sole discretion.
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4.05 Date Option Granted. For purposes of the Plan, a
stock option shall be considered as having been granted on the
date on which the Committee authorized the grant of the option,
except where the Committee has designated a later date, in which
event the later date shall constitute the date of grant of the
option; provided, however, that in either case notice of the
grant of the option shall be given to the employee within a
reasonable time.
4.06 No Incentive Stock Options. No option granted
under the Plan shall be treated as an incentive stock option for
purposes of Sections 421 and 422A of the Code or any comparable
section or sections of future legislation amending, modifying,
supplementing or superseding those sections.
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ARTICLE V
STOCK APPRECIATION RIGHTS
5.01 General. Each stock appreciation right granted
under the Plan shall be evidenced by a stock appreciation right
agreement between the Company and the Grantee which shall contain
the terms and conditions required by this Article V, and such
other terms and conditions, not inconsistent herewith, as the
Committee may deem appropriate in each case. Each stock
appreciation right shall relate to a specific option granted
under the Plan and shall be granted to the Grantee either
concurrently with the grant of such option or at such later time
as may be determined by the Committee; provided, however, that
the grant of a stock appreciation right shall not otherwise
change the terms of the underlying option. A stock appreciation
right shall entitle a Grantee to receive a number of shares of
Company Stock (without payment to the Company, except for
applicable withholding taxes), cash, or shares and cash, as
determined by the Committee in accordance with this Article.
5.02 Number of Shares or Amount of Cash. Unless
otherwise determined by the Committee, in its sole discretion,
and provided in the stock appreciation right agreement, the
number of shares which shall be issued pursuant to the exercise
of a right shall be determined by dividing:
(a) that portion, as elected by the Grantee in the
notice of exercise, of the total number of shares of Company
Stock (i) which the Grantee is eligible to purchase as of
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the exercise date under the related option and (ii) as to
which stock appreciation rights have been granted, but not
exercised, multiplied by the amount (if any) by which the
Fair Market Value of Company Stock on the exercise date
exceeds the price per share at which the related option
could have been exercised on the exercise date, by
(b) the Fair Market Value of Company Stock on the
exercise date;
provided, however, that fractional shares shall not be issued and
in lieu thereof a cash adjustment equal to the same fraction of
the Fair Market Value on the exercise date shall be paid. In
lieu of issuing Company Stock on the exercise of a right, the
Committee in its sole discretion may elect to pay the cash
equivalent of the Fair Market Value on the exercise date of any
or all the shares of Company Stock which would otherwise be
issuable upon exercise of the right. The Committee may require
that in order to be paid cash upon the exercise of a stock
appreciation right, certain Grantees must exercise the right
during a limited window period following the public release of
the Company's quarterly or annual earnings report, as established
pursuant to Securities and Exchange Commission rules. If this
restriction applies to a Grantee when he or she exercises a stock
appreciation right for cash, the amount received upon exercise of
the right shall be based on the highest Fair Market Value during
the limited window period.
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5.03 Exercise. Each stock appreciation right may be
exercised in whole or in part from time to time, to the extent
that the option to which it relates shall be exercisable and to
the extent permitted by its stock appreciation right agreement;
provided, however, that no stock appreciation right may be
exercised until the expiration of six (6) months from the date of
its grant. Each Grantee may exercise a stock appreciation right
by giving written notice to the Company, specifying the number of
shares as to which such right is being exercised, accompanied by
an amount equal to the applicable withholding taxes, if
necessary. The date the Company receives the written notice is
herein referred to as the "exercise date." No Grantee shall be
under any obligation to exercise any stock appreciation right
granted hereunder. The Grantee may exercise the right or not in
his or her sole discretion. A stock appreciation right shall
become nonexercisable and shall be forfeited to the extent that
the related option is exercised.
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ARTICLE VI
COMPANY STOCK
6.01 Number of Shares. The aggregate number of shares
of Company Stock that may be sold or delivered under the Plan
shall not exceed two million (2,000,000) shares. Shares of
Company Stock sold or delivered under the Plan may be authorized
but unissued shares, shares reacquired by the Company, or a
combination of both, as the Board may from time to time
determine. Shares of Company Stock not purchased under any
option granted under the Plan which are no longer available for
purchase thereunder by virtue of the total or partial expiration,
termination or voluntary surrender of the option and which were
not issued upon exercise of a related stock appreciation right
shall continue to be otherwise available for the purposes of the
Plan. Notwithstanding the above, however, upon surrender of any
portion of an option in connection with the exercise of the
related stock appreciation right, the number of shares of Company
Stock subject to the surrendered portion of the option (in lieu
of the number of shares, if any, issued pursuant to the exercise
of the related stock appreciation rights) shall be charged
against the maximum number of shares of Company Stock issuable
under the Plan, and such number of shares of Company Stock shall
not be available for future options and/or stock appreciation
rights.
6.02 Recapitalization. If any stock dividend is
declared upon the Company Stock, or if there is any stock split,
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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 which may thereafter be offered under the Plan
shall be proportionately and appropriately adjusted and the
number and kind of shares then subject to options granted under
the Plan and the per share option price therefor shall be
proportionately and appropriately adjusted, without any change in
the aggregate purchase prices to be paid therefor, all as the
Committee may deem appropriate. Such adjusted option price and
number and kinds of shares also shall be used to determine the
amount payable by the Company upon the exercise of any stock
appreciation rights associated with any such option as set forth
in Article V hereof. In the event the Company is merged or
consolidated with or into another corporation, or substantially
all of its assets are sold to another corporation, appropriate
provisions will be made for the protection and continuation of
any outstanding options and stock appreciation rights by the
substitution, on an equitable basis, of appropriate stock or
other securities of the surviving or purchasing or new parent
corporation.
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ARTICLE VII
GENERAL
7.01 Nontransferability. No option or stock
appreciation right granted under the Plan shall be transferable
or assignable by the Grantee except by last will and testament or
the laws of descent and distribution. During the Grantee's
lifetime, options and stock appreciation rights shall be
exercisable only by the Grantee or by the Grantee's guardian or
legal representative.
7.02 General Restriction. Each option and each stock
appreciation right shall be subject to the requirement that if at
any time the Board or the Committee shall determine, in its
discretion, that the listing, registration, or qualification of
securities upon any securities exchange or under any state or
federal or other applicable law, or the consent or approval of
any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option
or right or the issue or purchase of securities thereunder, such
option or right may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not
acceptable to the Board or the Committee.
7.03 No Rights as Stockholder. The holder of an option
or stock appreciation right shall not have any rights of a
stockholder with respect to the shares subject to the option or
right until such shares shall have been delivered to him or her.
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7.04 Effective Date and Duration of Plan. The Plan
shall become effective January l, 1996, subject to Stockholder
Approval. No stock options shall be granted under the Plan after
December 31, 2000.
7.05 Amendments. The Board may from time to time
amend, modify, suspend or terminate the Plan; provided, however,
that no such action shall (a) impair without the Grantee's
consent any option or stock appreciation right theretofore
granted under the Plan or deprive any Grantee of any shares of
Company Stock which he or she may have acquired through or as a
result of the Plan or (b) be made without Stockholder Approval
where such change would increase the total number of shares that
may be issued under the Plan (other than as provided in Section
6.02). Notwithstanding the foregoing, the Board may, in any
circumstance where it deems such approval necessary or desirable,
and shall, to the extent necessary to maintain compliance with
Rule 16b-3 under the Securities Exchange Act of 1934 as in effect
from time to time, require Stockholder Approval as a condition to
the effectiveness of any amendment or modification of the Plan.
Anything in the Plan to the contrary notwithstanding, at any time
before a Change in Control (as defined in Section 7.07(b))
occurs, the Board may amend Section 7.07(b)(i) to change the
percentage referred to therein to a percentage that is not more
than 25%, so long as such change is consistent with
contemporaneous change of a similar nature in the Rights
Agreement (as defined in Section 7.07(b)(vi)).
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7.06 Construction. Except as otherwise required by
applicable federal laws, the Plan shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Virginia.
7.07 Change in Control. (a) Anything herein to the
contrary notwithstanding, if there is a Change in Control of the
Company (as defined in subsection (b) below), all options and
stock appreciation rights already granted hereunder shall become
immediately exercisable; provided that to the extent necessary to
be exempt from Section 16(b) of the 1934 Act (as defined below),
the date as of which options and stock appreciation rights first
become exercisable pursuant to this Section 7.07 by grantees who
are officers or directors of the Company may in no event be
earlier than six (6) months from the date the option or stock
appreciation right is granted.
(b) For purposes of this Section 7.07, "Change in
Control" shall mean the occurrence of any of the following:
(i) Any Person (as defined below) becomes
the Beneficial Owner (as defined below), directly or
indirectly, of 15% or more of the Company's common
stock, unless such Person (A) is not deemed an
"Acquiring Person" in accordance with Section 1(a) of
the Rights Agreement (as defined below) or (B) became a
Beneficial Owner of 15% or more of the Company's common
stock in a transaction that did not constitute a Change
in Control under Section 7.07(b)(iii);
(ii) During any period of two consecutive
years, individuals who at the beginning of such period
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constitute the Board, and any new directors (other than
a director designated by a person who has entered into
an agreement with the Company to effect a transaction
described in Sections 7.07(b)(i), (iii) or (iv)) whose
election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at
least two-thirds of the directors then still in office
who either were directors at the beginning of the
period or whose election or nomination for election was
previously so approved, cease for any reason to
constitute a least a majority of the members of the
Board;
(iii) The effective date of a merger or
consolidation of the Company with any other entity,
other than a merger or consolidation which would result
in the voting securities of the Company outstanding
immediately before such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity or of any other
corporation or entity that as a result of such
transaction owns the Company or all or substantially
all of the assets of the Company, either directly or
through one or more subsidiaries (a "parent entity"))
more than 51% of the combined voting power of the
voting securities of the parent or surviving entity
outstanding immediately after such merger or
consolidation and with the power to elect at least a
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majority of the board of directors or other governing
body of such parent or surviving entity;
(iv) The approval by the shareholders of the
Company of a complete liquidation of the Company or an
agreement for the sale or disposition by the Company of
all or substantially all of the Company's assets; or
(v) There occurs any other event of a nature
that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or
form) under the 1934 Act, whether or not the Company is
then subject to such reporting requirement.
(vi) Certain Definitions. For purposes of
this Section 7.07(b), the following terms shall have
the following meanings:
(A) "Person" shall have the meaning as set
forth in Sections 13(d) and 14(d) of the 1934 Act;
provided, however, that Person shall exclude (i)
the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan
of the Company, and (iii) any corporation owned,
directly or indirectly, by the shareholders of the
Company in substantially the same proportions as
their ownership of stock of the Company.
(B) "Beneficial Owner" shall have the
meaning given to such term in Rule 13d-3 under the
1934 Act; provided, however, that Beneficial Owner
shall exclude any Person otherwise becoming a
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Beneficial Owner by reason of the shareholders of
the Company approving a merger of the Company with
another entity.
(C) "Rights Agreement" shall mean the
Amended and Restated Rights Agreement dated as of
March 8, 1999 between the Company and ChaseMellon
Shareholder Services, L.L.C., as initially in
effect.
(D) "1934 Act" shall mean the Securities
Exchange Act of 1934, as amended.
Executed and adopted this 15th day of April, 1999, in
accordance with action taken by the Board of Directors at its
meeting held on March 8, 1999.
REYNOLDS METALS COMPANY
By: /s/ D. Michael Jones
_________________________
Title: Senior Vice President
and General Counsel
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