Performance Unit
One-Year Vest
REYNOLDS AMERICAN INC.
LONG-TERM INCENTIVE PLAN
PERFORMANCE UNIT
AGREEMENT
DATE OF GRANT: February 3,
2009
1.
Grant . Pursuant to the provisions of the Long-Term
Incentive Plan (collectively, the “Plan”), Reynolds
American Inc. (the “Company”) on the above date has
granted to
«FirstName»
«LastName» (the “Grantee”),
subject to the
terms and conditions which follow and the terms and conditions of
the Plan, a target of
«Number» Performance
Units.
A copy of the
Plan has been provided to the Grantee and made a part of this
Agreement with the same effect as if set forth in the Agreement
itself. All capitalized terms used in this Agreement shall have the
meaning set forth in the Plan, unless otherwise
indicated.
2.
Valuation of Performance Units . (a) Each Performance
Unit shall have an initial value of $1,000 (the “Initial
Grant Value”). The Compensation and Leadership Development
Committee of the Company’s Board of Directors (the
“Compensation Committee”) shall value each Performance
Unit at the end of 2009 using the performance measures set forth in
the grid attached as Exhibit A , but the Compensation
Committee shall have the discretion to reduce the resulting
valuation (the “Payment Value”). The Grantee agrees
that the Performance Units granted hereunder are in lieu of an
award under the Company’s Annual Incentive Award Plan for
2009.
(b) Pursuant
to Section 3(a) of the Plan and Section 11(a) hereof, the
Compensation Committee shall, in determining whether actual results
have met the Goals, exclude the effect, or otherwise make equitable
adjustments in recognition, of such of the following as are set
forth in Exhibit A on the Date of Grant: charges for
restructuring or asset impairment, acquisitions, divestitures,
discontinued operations, pension gains and/or losses, extraordinary
items, unusual or non-recurring items and changes in applicable
laws (including, without limitation, tax laws and changes in
generally accepted accounting principles). To the extent that the
Compensation Committee determines that a change in the business,
operations, corporate structure or capital structure of the
Company, or the manner in which it conducts its business, or other
events or circumstances render the performance measures unsuitable,
the Compensation Committee may in its discretion modify
such
1
performance
measures or the related minimum acceptable level or levels of
achievement, in whole or in part, as the Compensation Committee
deems appropriate and equitable, except in the case when such
action would result in the loss of the otherwise available
exemption of the Performance Units under Section 162(m) of the
Code. In such case, the Compensation Committee will not make any
modification of the performance measures or the minimum acceptable
level or levels of achievement with respect to the Performance
Units granted hereunder.
3.
Vesting. (a) The Performance Units shall fully vest on
December 31, 2009.
(b) Notwithstanding
anything in Section 3(a) to the contrary, in the event of
(i) the Grantee’s death, (ii) the Grantee’s
Permanent Disability (as defined in the Company’s Long Term
Disability Plan), (iii) the Grantee’s Retirement (as
defined below) or (iv) the Grantee’s involuntary
Termination of Employment without Cause (as such terms are defined
in Section 5 of this Agreement), the number of Performance
Units which shall vest shall be equal to the product of (i) the
original number of Performance Units granted to the Grantee under
this Agreement and (ii) a fraction, the numerator of which
shall be the number of whole or partial months between
January 1, 2009, and the date of the Grantee’s
Termination of Employment, and the denominator of which shall be
12. For purposes of this Agreement, the term
“Retirement” shall mean the Grantee’s voluntary
Termination of Employment (as such term is defined in
Section 5 of this Agreement) on or after his or her 65
th birthday, on or after his or her 55
th birthday with 10 or more years of service, or on
or after his or her 50 th birthday with 20 or more years of service with
the Company or a subsidiary of the Company.
(c) Upon the
Grantee’s voluntary Termination of Employment or Termination
of Employment for Cause (as such terms are defined in
Section 5 of this Agreement) prior to the end of
December 31, 2009, all of the Grantee’s Performance
Units shall be cancelled.
(d) Notwithstanding
anything to the contrary contained in this Section 3 or in any
other Section of this Agreement, if the Grantee has a written
employment or severance agreement with the Company or one of its
subsidiaries, and such other agreement contains provisions relating
to the vesting by the Grantee in the Performance Units or the right
of the Grantee to receive the Payment Value (including, without
limitation, vesting provisions upon the termination of employment
of the Grantee), and such provisions are different than the
comparable provisions of this Agreement, then the provisions of
such other agreement shall govern and control.
4.
Payment. (a) Payment of Performance Units shall be made
only in Cash.
(b) Payment
of Performance Units vesting on December 31, 2009, shall be
made in the amount of the Payment Value as soon as practicable
following the close of the Company books at the end of 2009, and in
any event no later than March 15, 2010.
(c) In the
event of the Grantee’s death or Permanent Disability, the
Payment Value of each vested Performance Unit shall be equal to the
Initial Grant Value. Payment of such vested Performance Units shall
be made as soon as practicable following the Grantee’s death
or Permanent Disability, as the case may be.
(d) In the
event of the Grantee’s Retirement or involuntary Termination
of Employment without Cause, the Payment Value of each vested
Performance Unit shall be
2
determined in
accordance with Section 2 of this Agreement. Payment of such
vested Performance Units shall be made as soon as practicable
following the close of the Company books at the end of 2009, and in
any event no later than March 15, 2010.
(e) In the
event of the death of a Grantee, any payment to which such Grantee
is entitled under the Plan shall be made to the beneficiary
designated by the Grantee to receiv
|
