EXHIBIT 10.8
REYNOLDS METALS COMPANY
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS
As Amended and Restated
Effective March 8, 1999
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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 retire-
ment.
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.
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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.
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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.
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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
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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
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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, or if
any special distribution is made to holders of Company
Stock, the aggregate number and kind of equivalent
shares of Company Stock credited to the account of a
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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
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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 later of (i) the end of the year in
which the Participant's Deferral Termination Date with
respect to such compensation occurs, or (ii) the date on
which all of the Participant's transactions under the Plan
shall be exempt or excluded from liability under Section
16(b) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"). 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. The first annual
installment shall be paid as soon as administratively
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feasible following the later of (i) the end of the year in
which the Participant's Deferral Termination Date with
respect to such compensation occurs, or (ii) the date on
which all of the Participant's transactions under the Plan
shall be exempt or excluded from liability under Section
16(b) of the 1934 Act. Each annual installment thereafter
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 (a) Subject to the provisions of Section
4.04(c), 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) Subsection (a) above shall apply both to Director
Compensation deferred in previous years and to Director
Compensation being deferred during the year in which the
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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.
(c) 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 and until the accelerated
payment will be exempt from short-swing profit liability pursuant
to the rules promulgated under Section 16(b) of the 1934 Act.
4.05 (a) Anything herein to the contrary
notwithstanding, if at any time a Change in Control (as defined
below) occurs, then all unpaid Deferred Compensation (together
with the Additional Compensation applicable thereto) shall be
accelerated and paid out to each Participant in a single lump sum
within ten (10) days of the date of such Change in Control, with
Additional Compensation for this purpose computed through the
date of the Change in Control. This provision shall apply both
to Director Compensation deferred in previous years and to
Director Compensation being deferred during the year in which the
Change in Control occurs, except that no Deferred Compensation
shall be paid out prior to the date such Deferred Compensation
would be payable if it were Current Compensation. After the
Change in Control, no further amounts shall be deferred hereunder
for the remainder of the year.
(b) For purposes of this Section 4.05, "Change in
Control" shall mean the occurrence of any of the following:
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(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 4.05(b)(iii)
hereof;
(ii) During any period of two consecutive years,
individuals who at the beginning of such period constitute
the Board (as defined below), and any new director (other
than a director designated by a person who has entered into
an agreement with the Company to effect a transaction
described in Sections 4.05(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 or any of its subsidiaries 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
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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 Company's assets, either directly or through one or more
subsidiaries (the "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 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; and
(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) For purposes of this Section 4.05(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
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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 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) "Board" means the Board of Directors of the
Company.
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
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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. Anything herein to the contrary
notwithstanding, at any time before a Change in Control (as
defined in Section 4.05(b)) occurs, the Board may amend Section
4.05(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 4.05(b)(vi)(C)).
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.
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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 and subsequent payment
of the Deferred Compensation to which the change relates will be
exempt from short-swing profit liability pursuant to the rules
promulgated under Section 16(b) of the 1934 Act.
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
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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 28 day of April, 1999,
pursuant to action taken by the Board of Directors of Reynolds
Metals Company at its meeting on March 8, 1999.
REYNOLDS METALS COMPANY
By /s/ D. Michael Jones
______________________________
Title: Senior Vice President and
General Counsel
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