Common use of Valuation of Performance Units Clause in Contracts

Valuation of Performance Units. (a) At the end of the Performance Period, if the Threshold Requirement is met or otherwise waived by the Company’s Board of Directors, the value of each Performance Unit (the “Payment Value”) shall be determined by multiplying the Initial Grant Value by 0% to 200% based on the level of achievement of the third year RAI earnings per share target, set forth on Annex I, at the end of the Performance Period. An additional adjustment to the Payment Value will be made up to +/-10% based on the level of RAI’s total shareholder return compared against the total shareholder return of RAI’s Peer Group during the Performance Period, as set forth on Annex I. “RAI’s Peer Group” shall mean the companies comprising Standard & Poor’s Food and Beverage Index as of the date of grant, plus Altria Group, Inc., Carolina Group and UST Inc.

Valuation of Performance Units. (a) At the end of the Performance Period, if the Threshold Requirement is met or otherwise waived by the Company’s Board of Directors, the value of each Performance Unit (the “Payment Value”) shall be determined by multiplying the Initial Grant Value by 0% to 200% based on the level of achievement of the third year RAI earnings per share target, set forth on in Annex I, at the end of the Performance Period. An additional adjustment to the Payment Value will be made up to +/-10% based on the level of RAI’s total shareholder return compared against the total shareholder return of RAI’s Peer Group during the Performance Period, as set forth on Annex I. “RAI’s Peer Group” shall mean the companies comprising Standard & Poor’s Food and Beverage Index as of the date of grant, plus Altria Group, Inc.PM USA, Carolina Group and UST Inc.