EXHIBIT 10.18
REYNOLDS METALS COMPANY
NEW MANAGEMENT INCENTIVE DEFERRAL PLAN
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 key employees by providing an
opportunity for deferred taxation and capital accumulation.
ARTICLE II
DEFINITIONS
2.01 "Additional Income" shall have the meaning
specified in Section 4.01.
2.02 "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.
2.03 "Company" shall mean Reynolds Metals Company, a
Delaware corporation.
2.04 "Current Compensation" shall mean that portion of
Incentive Compensation which the Participant accepts immediately
in return for services performed for the Company.
2.05 "Deferred Compensation" shall mean that portion of
Incentive Compensation which the Participant elects to defer in
the manner provided for herein, until the time or times selected
for payment in accordance with Section 4.02.
2.06 "Deferral Termination Date" shall mean one of the
following dates, as elected by the Participant: (a) the date on
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which the Participant is retired and entitled to an immediate
benefit under the New Retirement Program or (b) the last day of
such specified calendar year as the Participant shall elect;
provided, however, that the year specified in any election under
(b) must be at least five (5) years from the year during which
the Incentive Compensation subject to the deferral is earned; and
further provided, that regardless of any election made under (b),
a Participant's actual Deferral Termination Date shall in no
event be later than the date on which the Participant is actually
retired and entitled to an immediate benefit under the New
Retirement Program.
2.07 "Effective Date" shall mean September 1, 1994.
2.08 "Eligible Employee" shall mean such officers and
other key employees of the Company and its subsidiaries who are
recommended by the Chief Executive Officer of the Company each
year as eligible to defer Incentive Compensation hereunder.
2.09 "Incentive Compensation" shall mean the cash
incentive payable to Eligible Employees under the Company's
Performance Incentive Plan and/or its Supplemental Incentive
Plan.
2.10 "New Retirement Program" shall mean the Company's
New Retirement Program for Salaried Employees, as amended from
time to time.
2.11 "Participant" shall mean an Eligible Employee who
submits a written request pursuant to the terms of this Plan for
deferral of Incentive Compensation.
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2.12 "Performance Incentive Plan" shall mean the
Reynolds Metals Company Performance Incentive Plan, as amended
from time to time.
2.13 "Plan" shall mean this Reynolds Metals Company New
Management Incentive Deferral Plan.
2.14 "Plan Committee" shall mean the committee
appointed by the Board of Directors of the Company to administer
the Plan.
ARTICLE III
ELECTIONS TO DEFER INCENTIVE COMPENSATION
3.01 Each calendar year during the term of the Plan,
each Eligible Employee, whether or not then a Participant, shall
have the right to elect to defer the receipt of up to 85% of the
Incentive Compensation to be earned by such Eligible Employee in
respect of such calendar year. At the election of the Eligible
Employee, the amount deferred may be expressed (a) as a
percentage of Incentive Compensation, in multiples of 5%, (b) as
a dollar amount, in multiples of $100, or (c) as either a
percentage of the amount or a dollar amount, in each case, in
excess of a floor amount specified by the Eligible Employee. In
no case, however, may the total amount deferred be less than
$2,000 nor more than 85% of the Eligible Employee's Incentive
Compensation for the year. At the same time a deferral election
is made under this Section 3.01, the Eligible Employee shall also
elect the Deferral Termination Date applicable to such Deferred
Compensation, as provided in Section 2.06, and the method of
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payment of such Deferred Compensation, as provided in Section
4.02.
3.02 With respect to Incentive Compensation earned for
any year, the elections referred to in Section 3.01 must be made
during September of such year unless another time period is
specified by the Plan Committee.
3.03 The elections referred to in Section 3.01 shall be
irrevocable as to the Incentive Compensation to which such
elections apply, except as otherwise provided herein.
ARTICLE IV
PAYMENT OF DEFERRED COMPENSATION
4.01 All Deferred Compensation 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 Incentive
Compensation would have been paid if it were Current Compensation
through the December 31st immediately preceding the date of each
payment. Each calendar year, before elections are made with
regard to Incentive Compensation to be earned in respect of such
calendar year, the Plan Committee shall determine the rate
applicable to Incentive Compensation deferred for that year.
This rate shall apply to amounts deferred for that year until all
such amounts are paid out. Deferred Compensation and any
applicable Additional Income shall be paid in cash following the
applicable Deferral Termination Date in accordance with the
provisions of Section 4.02.
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4.02 A Participant's Deferred Compensation and
Additional Income shall be paid to such Participant in a single
lump sum payment or in annual installments over a period of five
(5) or 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 Article III of this Plan. Lump sum payments shall be paid
as soon as administratively feasible in the January following the
year in which the Deferral Termination Date occurs. Annual
installments, which shall be in equal amounts and shall consist
of Deferred Compensation and the Additional Income applicable
thereto, shall be paid as soon as administratively feasible each
January of each calendar year following the year in which the
Deferral Termination Date occurs.
4.03 If a Participant's employment with the Company and
its subsidiaries terminates at a time when the Participant is not
entitled to an immediate benefit under the New Retirement
Program, or if the Participant becomes disabled for purposes of
the New Retirement Program, or if the Participant dies, any
remaining unpaid portion of such Participant's Deferred
Compensation and Additional Income shall be accelerated and paid
to the Participant (or to the Participant's Beneficiary, as the
case may be) in a single lump sum as soon as administratively
feasible in the January following the year in which the
Participant's termination, disability or death occurs.
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4.04 (a) Upon receipt of a written request from a
Participant (or if the Participant is not competent to manage his
affairs, from a Participant's legal representative), the Plan
Committee may direct that all or any part of the undelivered
portion of Deferred Compensation (together with the Additional
Income applicable thereto) be accelerated and paid in a lump sum
if it finds, in its sole discretion, that the Participant has
incurred a substantial unforeseen hardship. For purposes of this
subsection (a), a substantial unforeseen hardship is a severe
financial hardship resulting from extraordinary and unforeseeable
circumstances arising as a result of one or more recent events
beyond the control of the Participant. In no event, however, may
accelerated payments be made to the extent such hardship is or
may be relieved (i) through reimbursement or compensation by
insurance or otherwise, (ii) by liquidation of the Participant's
assets, to the extent the liquidation of such assets would not
itself cause severe hardship, or (iii) by cessation of deferrals
under the Plan. Acceleration of payments because of a
substantial unforeseen hardship may only be permitted to the
extent reasonably necessary to satisfy the hardship.
(b) The Plan Committee may direct that all unpaid
Deferred Compensation (together with the Additional Income
applicable thereto) be accelerated and paid in a lump sum if, in
conjunction with the termination of the Plan, the Plan Committee
finds, in its sole discretion, that extraordinary circumstances
make such acceleration of payments in the best interest of the
Company.
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(c) Subsections (a) and (b) above shall apply both to
Incentive Compensation deferred in previous years and to
Incentive Compensation being deferred during the year in which
the acceleration of payments is approved, except that no Deferred
Compensation shall be paid out prior to the date such Deferred
Compensation would be payable if it were Current Compensation.
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 Income 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 Income for this purpose computed through the date of
the Change in Control. This provision shall apply both to
Incentive Compensation deferred in previous years and to
Incentive Compensation being deferred during the year in which
the Change in Control occurs, except that no Incentive
Compensation shall be paid out prior to the date such Incentive
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:
(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
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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 Section 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 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
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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 (as defined below), 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 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
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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) "1934 Act" means the Securities Exchange
Act of 1934, as amended.
(E) "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 in the Plan 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
established with respect to such election.
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 an officer or an employee of the Company.
8.03 No benefit under the Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, except by will or the laws of
descent and distribution, and any attempt thereat shall be void.
No such benefit shall, prior to receipt thereof, be in any manner
liable for or subject to the recipient's debts, contracts,
liabilities, engagements, or torts.
8.04 This Plan shall inure to the benefit of, and be
binding upon, the Company and each Participant, and upon the
successors and assigns of the Company and of each Participant.
8.05 The Company shall deduct from the amount of any
payments hereunder all taxes required to be withheld by
applicable laws.
8.06 This Plan shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia.
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ARTICLE IX
PHANTOM STOCK ADDITIONAL INCOME
9.01 The provisions of this Article IX shall apply only
to an Eligible Employee who, at the time an election to defer
Incentive Compensation is made in accordance with Article III, is
subject to the Company's Stock Ownership Guidelines for Officers
(an "Officer"). Any such Officer electing to defer Incentive
Compensation may also elect to have a specified part or all of
such deferred Incentive Compensation subject to Phantom Stock
Additional Income (as provided herein) instead of having
Additional Income computed at a specified rate as set forth in
Section 4.01.
9.02 Phantom Stock Additional Income shall be computed
in accordance with this Section 9.02.
(a) As of the date when Incentive Compensation would
have been paid if it were Current Compensation, each Officer
who elected to receive Phantom Stock Additional Income shall
have his or her account under this Plan credited with a
number of equivalent shares of the Company's Common Stock,
without par value ("Company Stock") determined by dividing
(i) the total dollar amount of such Deferred Compensation 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 such date. Fractional equivalent
shares shall be calculated to three decimal places.
(b) As of each date when cash dividends are paid on
Company Stock, each Officer who elected to receive Phantom
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Stock Additional Income shall also have his or her account
under this Plan adjusted to reflect dividend equivalents
computed pursuant to this subsection (b). The dollar amount
of the dividend equivalent for each Officer shall equal the
cash dividends that would have been paid on the number of
equivalent shares of Company Stock credited to the Officer'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
Officer shall be converted into a number representing
equivalent shares of Company Stock by dividing (i) the total
dollar amount of the Officer'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 Officer'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.
(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 equivalent shares of Company Stock credited to the
account of an Officer under the Plan shall be
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proportionately adjusted as the Plan Committee may deem
appropriate.
9.03 Any election of Phantom Stock Additional Income in
accordance with this Article IX shall be subject to the following
terms and conditions:
(a) The election of Phantom Stock Additional Income
must be made at the same time as the election to defer
Incentive Compensation.
(b) The election of Phantom Stock Additional Income
shall be irrevocable as to the Incentive Compensation to
which such election applies.
(c) The Deferral Termination Date shall be the date on
which the Officer is retired and entitled to an immediate
benefit under the New Retirement Program.
(d) Any Officer electing Phantom Stock Additional
Income may also irrevocably elect at the same time that if
the Officer dies before receiving full payment of any
deferred Incentive Compensation subject to Phantom Stock
Additional Income, payments after death will be made in the
form of five (5) annual installments.
(e) If Phantom Stock Additional Income is being paid
on 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 Officer'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
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Company Stock as reported on New York Stock Exchange -
Composite Transactions on such date. This lump sum payment
shall be paid as soon as administratively feasible following
the end of the year. If annual installments are elected
instead of a lump sum, the amount of the installment payment
to be made in a calendar year shall be computed by taking
(y) the amount that would have been payable after the end of
the preceding year had the entire amount remaining as of the
end of such year been paid as a single lump sum, divided by
(z) the number of installment payments remaining, including
the installment about to be paid. Annual installments shall
be paid as soon as administratively feasible in each
calendar year following the year in which the Deferral
Termination Date occurs. All payments under the Plan shall
be made in cash.
(f) Anything in Sections 4.04 and 4.05 to the contrary
notwithstanding, no payment of Deferred Compensation with
respect to which Phantom Stock Additional Income is to be
paid may be accelerated unless the 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.
9.04 Unless the context clearly indicates otherwise,
any reference in the Plan to Additional Income, including but not
limited to references found in Sections 4.04 and 4.05, shall
include Phantom Stock Additional Income.
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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