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| RAI > SEC Filings for RAI > Form 8-K on 9-Feb-2009 | All Recent SEC Filings |
9-Feb-2009
Change in Directors or Principal Officers, Financial Statements and Exhibit
2010. In addition, the one-year performance units will vest partially or fully
upon certain other events, such as the grantee's death, disability, involuntary
termination of employment without cause or a change of control of RAI; the
definitive terms governing the vesting of these one-year performance units upon
such events will be set forth in a standard form of agreement, which has not yet
been finalized.
(v) On February 3, 2009, upon recommendation of the Compensation Committee,
the Board approved (1) the three-year performance period of January 1, 2009
through December 31, 2011 for the 2009 performance share awards granted under
the LTIP, and (2) the performance formula for determining the award pool of
performance shares under the LTIP for such three-year performance period for
certain executive officers. The formula reflects RAI's intention to qualify, to
the extent possible, the performance share awards to such executive officers as
tax deductible, subject to the limitations of Section 162(m) of the Code. Under
the formula, the award pool of performance shares for each of the following
executive officers is determined based on the following percentages of RAI's
cumulative cash net income for the three-year performance period: Ms. Ivey -
0.50%; Mr. Adams - 0.15%; Mr. Delen - 0.20%; and Mr. Payne - 0.15%. For purposes
of determining such award pools, cash net income is defined as set forth above
in Item 5.2(e)(iii), except as reported in RAI's Annual Reports on Form 10-K for
the 2009, 2010 and 2011 fiscal years, respectively.
(vi) On February 3, 2009, upon recommendation of the Compensation Committee,
the Board also approved the grant to be effective on March 2, 2009, of awards
under the LTIP to certain executive officers, including Ms. Ivey, and
Messrs. Adams and Delen. On February 2, 2009, the Compensation Committee
approved the grant, also to be effective on March 2, 2009, of awards under the
LTIP to approximately 485 employees of RAI and its operating subsidiaries,
including Mr. Payne. The LTIP awards to all grantees, including Ms. Ivey, and
Messrs. Adams, Delen and Payne, will be entirely in the form of performance
shares. At the end of the performance period, the number of performance shares
will be adjusted based on (1) the amount of the quarterly dividends paid by RAI
over the three-year performance period relative to the $.85 per share dividend
declared by the Board at its February 3, 2009 meeting, and (2) the average of
the RAI scores under the AIAP for each of the three years of the performance
period, subject to a cap of 150% on such average AIAP score. The maximum value
of the 2009 LTIP award for each of the listed executive officers is limited to
the percentage of RAI's cash net income approved as the LTIP performance shares
award pool for such executive officer by the non-employee directors of the
Board, as described in Item 5.02(e)(v) above, and the shareholder approved award
limitations set forth in the LTIP.
Subject to the foregoing, the performance shares generally will vest on
March 2, 2012, and will be paid in the form of shares of RAI common stock on or
prior to March 15, 2013. Prior to the vesting date, a grantee generally will
receive dividend equivalents with respect to his or her outstanding unvested
performance shares to the same extent that any dividends are paid by RAI on
outstanding shares of RAI common stock. In addition, the performance shares will
vest partially or fully upon certain other events, such as the grantee's death,
disability, involuntary termination of employment without cause or a change of
control of RAI; the definitive terms governing the vesting of these three-year
performance shares upon such events will be set forth in a standard form of
grant agreement, which has not yet been finalized.
Although the dollar value of the performance shares Ms. Ivey, and
Messrs. Adams, Delen and Payne will receive on March 2, 2009 is known as of the
date of this report, the actual number of performance shares each of them will
be granted on March 2, 2009, will not be determinable until such date. For each
grantee, the number of performance shares granted will be equal to (1) the grant
date value for each grantee set forth below, divided by (2) the per share
closing price of RAI common stock on March 2, 2009: Ms. Ivey - $7,398,000;
Mr. Adams - $1,290,800; Mr. Delen - $2,372,700; and Mr. Payne - $806,400.
Number Exhibit
10.1 Reynolds American Inc. Executive Severance Plan, as amended and
restated effective February 1, 2009.
10.2 Amendment No. 1 to the Reynolds American Inc. Annual Incentive Award
Plan, as amended and restated effective January 1, 2009.
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