REYNOLDS AMERICAN INC. LONG-TERM INCENTIVE PLAN PERFORMANCE UNIT AGREEMENT DATE OF GRANT: MARCH 6, 2008
Exhibit 10.11
Performance Units
Three-Year Vest
Three-Year Vest
XXXXXXXX AMERICAN INC.
LONG-TERM INCENTIVE PLAN
LONG-TERM INCENTIVE PLAN
DATE OF GRANT: MARCH 6, 2008
«FirstName» «LastName» (the “Grantee”),
subject to the terms and conditions which follow and the terms and conditions of the Plan, a target
of
A copy of the Plan has been provided to the Grantee and is made a part of this Agreement with the
same effect as if set forth in the Agreement itself. The initial grant value of each Performance
Unit shall be $1.00 (the “Initial Grant Value”). All capitalized terms used in this Agreement
shall have the meaning set forth in the Plan, unless the context requires a different meaning.
(b) Notwithstanding anything in Section 2(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 such term is defined below), or (iv)
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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, if not cancelled
during the Performance Period due to the Company’s failure to meet the Threshold Requirement, shall
be equal to product of (x) the original number of Performance Units granted to the Grantee under
this Agreement and (y) a fraction, the numerator of which shall be the number of days between
January 1, 2008, and the date of the Grantee’s Termination of Employment, and the denominator of
which shall be the total number of days in the Performance Period. Such prorated award shall be
paid as soon as practicable following the close of the Company’s books at the end of the
Performance Period, and in any event no later than March 15, 2011, and each Performance Unit shall
have a Payment Value as set forth in Section 3 (a) of this Agreement. For purposes of this
Agreement, the term “Retirement” shall mean an employee’s voluntary Termination of Employment on or
after his or her 65th birthday, on or after his or her 55th birthday with 10
or more years of service with the Company or a subsidiary of the Company, or on or after his or her
50th birthday with 20 or more years of service with the Company or a subsidiary of the
Company.
(c) Notwithstanding anything in Section 2(a) to the contrary, in the event of a Change of
Control (as defined in the Plan), the number of Performance Units which shall vest, if not
cancelled prior to the Change of Control due to the Company’s failure to meet the Threshold
Requirement, 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
days in the Performance Period before the date of the Change of Control, and the denominator of
which shall be the total number of days in the Performance Period. Such prorated award shall be
paid as soon as practicable after the Change of Control, and in any event no later than March 15
after the end of the year in which the Change of Control occurs, and each Performance Unit shall
have a Payment Value as set forth in section 3(b) of this Agreement.
(d) 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 a Performance
Period, all of the Grantee’s Performance Units shall be cancelled.
(e) Notwithstanding anything to the contrary contained in this Section 2 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 (as defined below) (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.
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(b) In the event of a Change of Control, the Payment Value shall be equal to the greater of
(i) the Initial Grant Value, or (ii) the Initial Grant Value multiplied by (x) 0% to 200% based on
the level of achievement of the third year RAI earnings per share target, set forth in Annex I,
assuming that RAI’s growth rate through the vesting date had continued through the end of the
Performance Period, and (y) by an additional +/-10%, as set forth in Annex I, based on RAI’s total
shareholder return compared against the total shareholder return of RAI’s Peer Group through the
vesting date.
(c) In no event shall the Payment Value, determined pursuant to Section 3(a) or 3(b), be less
than 0% or greater than 200% of the Initial Grant Value.
(b) 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 receive the proceeds
of any noncontributory group life insurance coverage provided for the Grantee by the Company or a
subsidiary of the Company (“Group Life Insurance Coverage”). If the Grantee has not designated
such beneficiary, or desires to designate a different beneficiary, the Grantee may file with the
Company a written designation of a beneficiary under the Plan, which designation may be changed or
revoked only by the Grantee, in writing. If no designation of beneficiary has been made by a
Grantee under the Group Life Insurance Coverage or filed with the Company under the Plan,
distribution upon such Grantee’s death shall be made in accordance with the provisions of the Group
Life Insurance Coverage. If a Grantee is no longer an employee of the Company at the time of
death, no longer has any Group Life Insurance Coverage and has not filed a designation of
beneficiary with the Company under the Plan, distribution upon such Grantee’s death shall be made
to the Grantee’s estate.
(b) For purposes of this Agreement, if the Grantee has an employment or severance agreement
or is covered under a severance plan of the Company or one of its subsidiaries, employment shall be
deemed to have been terminated for “Cause” only as such term is defined in such employment or
severance agreement or such severance plan. For purposes of this Agreement, if the Grantee does
not have an employment or severance agreement that defines the term “Cause,” the Grantee’s
employment shall be deemed to have been terminated for “Cause” if the Termination of Employment
results from the Grantee’s: (i) criminal conduct; (ii) deliberate and continual refusal to perform
employment duties on substantially a
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full time basis; (iii) deliberate and continual refusal to act in accordance with any specific
lawful instructions of an authorized officer or employee more senior than the Grantee or a majority
of the Board of Directors of the Company; or (iv) deliberate misconduct which could be materially
damaging to the Company or any of its business operations without a reasonable good faith belief by
the Grantee that such conduct was in the best interests of the Company. A Termination of
Employment shall not be deemed for Cause hereunder unless the chief human resources officer of the
Company shall confirm that any such Termination of Employment is for Cause; provided,
however, that the chief executive officer of the Company shall be required to confirm that
a Termination of Employment of the chief human resources officer of the Company is for Cause. Any
voluntary Termination of Employment by the Grantee in anticipation of an involuntary Termination of
Employment for Cause shall be deemed to be a Termination of Employment for Cause.
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action, determination or interpretation made in good faith with respect to the Plan or the
Agreement. The Compensation Committee may delegate its interpretive authority to an officer or
officers of the Company.
(b) If the Company reasonably determines that the Grantee has materially violated any of the
Grantee’s obligations under this Agreement, then this Grant shall terminate, effective the date on
which such violation began (unless otherwise terminated sooner), and the Company may demand the
return of any amount paid to the Grantee hereunder and the Grantee hereby agrees to return such
amounts upon such demand. If after such demand the Grantee fails to return such amounts, the
Grantee acknowledges that the Company has the right to deduct from any amounts the Company owes to
the Grantee (including, but not limited to, wages or other compensation), or to commence judicial
proceedings against the Grantee, to recover such amounts and any and all of its attorney’s fees and
costs.
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15. GOVERNING LAW. THE LAWS OF THE STATE OF NORTH CAROLINA
SHALL GOVERN THE INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT,
REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF LAWS.
XXXXXXXX AMERICAN INC. | ||||
By: | /s/ Xxxx X. Xxxxxxxx | |||
Authorized Signature | ||||
Grantee |
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Grantee’s Taxpayer Identification Number: |
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Grantee’s Home Address: |
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