SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 2, 2014
Reynolds American Inc.
(Exact Name of Registrant as Specified in its Charter)
| North Carolina | 1-32258 | 20-0546644 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
401 North Main Street,
Winston-Salem, NC 27101
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: 336-741-2000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On December 2, 2014, Thomas R. Adams, Executive Vice President and Chief Financial Officer of Reynolds American Inc., referred to as RAI, presented to the Board of Directors of RAI, referred to as the Board, his notice of resignation as Chief Financial Officer of RAI, effective upon the close of business on February 28, 2015, and indicated that he was planning to retire as an employee of RAI later in 2015. Mr. Adams also serves as the Executive Vice President, Chief Financial Officer and Chief Information Officer of RAI Services Company, a subsidiary of RAI that provides certain services to RAI and its operating companies through services agreements and referred to as RAISC, and also will resign from those roles effective upon the close of business on February 28, 2015.
At its December 4, 2014 meeting, the Board accepted Mr. Adams’ resignation as Chief Financial Officer of RAI, effective upon
the close of business on February 28, 2015. A copy of Mr. Adams’ resignation letter is attached to this Current Report on Form 8-K as
Exhibit 99.1.
Also at its December 4, 2014 meeting, the Board appointed Andrew D. Gilchrist as Executive Vice President and Chief Financial Officer of RAI, effective March 1, 2015. Mr. Adams will begin transitioning the role of RAI’s Chief Financial Officer to Mr. Gilchrist in January 2015 to ensure a smooth transition. Mr. Gilchrist, age 42, has served as Executive Vice President of RAI since October 2014; and served as Executive Vice President and Chief Commercial Officer of R. J. Reynolds Tobacco Company, the largest of RAI’s operating companies and referred to as RJRT, from January 2011 to October 2014; as Executive Vice President and Chief Financial Officer of RJRT and Executive Vice President and Chief Information Officer of RAISC from January 2010 to January 2011; as Executive Vice President, Chief Financial Officer and Chief Information Officer of RJRT from July 2008 to January 2010; and in various other senior management roles after joining RAI in 2004. Prior to 2004, Mr. Gilchrist held various positions with British American Tobacco p.l.c., referred to as BAT, and its subsidiary Brown & Williamson Tobacco Corporation, now known as Brown & Williamson Holdings, Inc. and referred to as B&W. Mr. Gilchrist also will assume the roles of Executive Vice President, Chief Financial Officer and Chief Information Officer of RAISC, effective March 1, 2015.
In connection with the foregoing appointment, at its December 4, 2014 meeting, the Board approved, based upon the recommendation of the Board’s Compensation and Leadership Development Committee, effective January 1, 2015, an increase to Mr. Gilchrist’s annual base salary from $637,600 to $675,000 and an increase in his target long-term incentive opportunity under the Amended and Restated Reynolds American Inc. 2009 Omnibus Incentive Compensation Plan from 3.0 to 3.25 times his annual base salary.
At its December 4, 2014 meeting, the Board also accepted the previously announced resignation of Neil R. Withington, effective immediately upon the conclusion of the Board’s meeting on that date. Mr. Withington has served as a Class III Director on the Board since July 30, 2004, as a designee of B&W, a subsidiary of BAT, under the terms of the governance agreement, dated July 30, 2004, as amended, among RAI, B&W and BAT, referred to as the governance agreement.
Additionally, on December 4, 2014, the Board elected Ricardo Oberlander, a Management Board Director of BAT and designee of B&W under the terms of the governance agreement, to serve on the Board as a Class III Director, effective immediately upon the conclusion of the Board’s meeting on that date. Mr. Oberlander is the Regional Director of BAT’s Americas Region, and Chairman of the Board of BAT’s subsidiary in Brazil, Souza Cruz.
Under the terms of the governance agreement, B&W has the right, based on its current ownership of approximately 42% of RAI common stock, to designate five people for nomination to the Board; following the December 4, 2014 election of Mr. Oberlander as a Director, the Board is comprised of 12 Directors. At this time, B&W has designated four RAI Directors. In addition to Mr. Oberlander, the other current RAI Directors who have been designated by B&W pursuant to the governance agreement are: Ronald S. Rolfe (a Class I Director), John P. Daly (a Class II Director) and Martin D. Feinstein (a Class III Director). Each class of RAI Directors serves a staggered three-year term, with the term of the Class I, Class II and Class III Directors ending generally on the date of the RAI annual shareholders’ meeting held in 2017, 2015 and 2016, respectively. Mr. Oberlander’s initial term as a Class III Director, however, is scheduled to expire on the date of RAI’s 2015 annual shareholders’ meeting because under the law of North Carolina (the state in which RAI is incorporated), the term of a director elected to fill a vacancy will expire at the next shareholders’ meeting at which directors are elected (notwithstanding that the term of the other Directors in that same class is not yet scheduled to expire).
In consideration for the Board service of Mr. Oberlander, age 51, who is a full-time employee of a BAT subsidiary, RAI will pay BAT the amount of $306,436 per year; that amount is in lieu of any other compensation (other than the reimbursement of certain expenses) to which Mr. Oberlander otherwise would be entitled in his capacity as a member of the Board. Mr. Oberlander has entered into an indemnification agreement with RAI, the same indemnification agreement which RAI offers to all of its executive officers and directors. The form of such indemnification agreement was filed as Exhibit 10.1 to RAI’s Current Report on Form 8-K dated February 1, 2005.
A copy of the press release announcing the foregoing is attached to this Current Report on Form 8-K as Exhibit 99.2.
| ITEM 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
The following are furnished as Exhibits to this Current Report on Form 8-K.
| Number |
Exhibit | |
| 99.1 | Letter from Thomas R. Adams, dated December 2, 2014 | |
| 99.2 | Press Release of Reynolds American Inc., dated December 4, 2014 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| REYNOLDS AMERICAN INC. | ||
| By: | /s/ McDara P. Folan, III | |
| Name: | McDara P. Folan, III | |
| Title: | Senior Vice President, Deputy General Counsel and Secretary | |
Date: December 5, 2014
INDEX TO EXHIBITS
| Number |
Exhibit | |
| 99.1 | Letter from Thomas R. Adams, dated December 2, 2014 | |
| 99.2 | Press Release of Reynolds American Inc., dated December 4, 2014 | |
Exhibit 99.1
December 2, 2014
Board of Directors
Reynolds American Inc.
401 N. Main Street
Winston-Salem, NC 27101
Attention: McDara P. Folan, III, Secretary
Dear Dara:
I hereby submit my resignation as Chief Financial Officer of Reynolds American Inc. (“RAI”), effective upon the close of business on February 28, 2015. In addition, I am planning to retire as an employee of RAI later in 2015.
| Sincerely, |
|
|
| Thomas R. Adams |
Exhibit 99.2
Reynolds American Inc.
P.O. Box 2990
Winston-Salem, NC 27102-2990
| Contact | Investor Relations: Morris Moore (336) 741-3116 |
Media: Jane Seccombe (336) 741-5068 |
RAI 2014-29 |
Reynolds American announces upcoming CFO transition plan;
Gilchrist to be promoted, Adams to retire.
RAI board declares dividend; Oberlander elected to board
WINSTON-SALEM, N.C. – Dec. 4, 2014 – Andrew D. Gilchrist, executive vice president of Reynolds American Inc. (NYSE: RAI), will be promoted to executive vice president and chief financial officer effective March 1, 2015. Gilchrist’s upcoming promotion was approved by the RAI board of directors at its meeting today.
Thomas R. Adams, the company’s current executive vice president and chief financial officer, will begin transitioning the CFO role to Gilchrist in January, ensuring a smooth transition for Gilchrist as he steps into the role in March. Thereafter, Adams plans to retire from RAI.
Adams, 64, has served as RAI’s CFO since 2008, and also serves as chief information officer of RAI Services Company. Gilchrist will assume that responsibility as well in March.
Gilchrist, 42, served as president and chief commercial officer of R.J. Reynolds Tobacco Company from January 2011 until October 2014. Prior to that, Gilchrist served as executive vice president and CFO of R.J. Reynolds and chief information officer of RAI Services Company. He joined Brown & Williamson Tobacco Corp. in 1997, and held a number of management positions at both Brown & Williamson and British American Tobacco before joining Reynolds American and its operating companies as part of the business combination in 2004.
Adams joined R.J. Reynolds Tobacco Holdings, Inc. in 1999 as senior vice president and controller. He held a number of executive positions at RAI and its subsidiaries before becoming CFO in 2008. Before joining Reynolds, Adams was a partner at the accounting firm of Deloitte & Touche LLP.
“Andrew is well-prepared to assume the role of CFO for our company,” said Susan M. Cameron, RAI’s president and chief executive officer. “He has both a strong financial and commercial background, and will be uniquely able to transition smoothly into Tom’s current role.
“On behalf of RAI and its shareholders, I want to thank Tom for his outstanding leadership and guidance, particularly during his seven years of service as our CFO,” Cameron said. “Over the past 10 years, RAI’s total return to shareholders was about 520 percent – far outpacing the S&P 500’s performance during that period. We all wish him nothing but the best in his retirement.”
The RAI board also elected Ricardo Oberlander to board membership at its meeting today. Oberlander is a management board director of British American Tobacco, regional director of the Americas Region, and chairman of the board of British American Tobacco’s subsidiary in Brazil, Souza Cruz. Oberlander succeeds Neil R. Withington, who retired from the RAI board effective with the closure of today’s meeting.
Also at today’s meeting, the board declared a quarterly cash dividend on the company’s common stock of $0.67 per share ($2.68 per share annualized). The dividend will be payable on Jan. 2, 2015, to shareholders of record on Dec. 15, 2014.
This is the 42nd consecutive quarterly cash dividend that Reynolds American has declared since it became a public company on July 30, 2004. RAI’s policy is to return about 80 percent of the company’s current-year net income to shareholders in the form of dividends.
Web Disclosure
RAI’s website, www.reynoldsamerican.com, is the primary source of publicly disclosed news about RAI and its operating companies. We use the website as our primary means of distributing quarterly earnings and other company news. We encourage investors and others to register at www.reynoldsamerican.com to receive alerts when news about the company has been posted.
ABOUT US
Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company; American Snuff Company, LLC; Santa Fe Natural Tobacco Company, Inc.; Niconovum USA, Inc.; Niconovum AB; and R.J. Reynolds Vapor Company.
| • | R.J. Reynolds Tobacco Company is the second-largest U.S. tobacco company. R.J. Reynolds’ brands include two of the best-selling cigarettes in the United States: Camel and Pall Mall. These brands, and its other brands, including Winston, Kool, Doral, Salem, Misty and Capri, are manufactured in a variety of styles and marketed in the United States. |
| • | American Snuff Company, LLC is the nation’s second-largest manufacturer of smokeless tobacco products. Its leading brands are Grizzly and Kodiak. |
| • | Santa Fe Natural Tobacco Company, Inc. manufactures and markets Natural American Spirit 100% additive-free natural tobacco products, including styles made with organic tobacco. |
| • | Niconovum USA, Inc. and Niconovum AB market innovative nicotine replacement therapy products in the United States and Sweden, respectively, under the Zonnic brand name. |
| • | R.J. Reynolds Vapor Company makes and markets VUSE Digital Vapor Cigarette, a highly differentiated vapor product. |
Copies of RAI’s news releases, annual reports, SEC filings and other financial materials, including risk factors containing forward-looking information, are available at www.reynoldsamerican.com. To learn more about how Reynolds American and its operating companies are transforming the tobacco industry, visit TransformingTobacco.
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