UNITED STATES
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): May 30, 2017 (May 26, 2017)
Reynolds American Inc.
(Exact Name of Registrant as Specified in Charter)
North Carolina | 1-32258 | 20-0546644 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
401 North Main Street Winston-Salem, North Carolina 27101 (Address of Principal Executive Offices) (ZIP Code) |
Registrants 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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐ | Emerging growth company |
☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 16, 2017, Reynolds American Inc., referred to as RAI, British American Tobacco p.l.c., referred to as BAT, BATUS Holdings Inc., a wholly owned subsidiary of BAT, Flight Acquisition Corporation, a wholly owned subsidiary of BAT and referred to as Merger Sub, entered into an Agreement and Plan of Merger, pursuant to which, subject to the satisfaction or waiver of certain conditions, Merger Sub will merge with and into RAI, referred to as the merger, with RAI surviving as a wholly owned subsidiary of BAT.
Retention Agreements and Severance Modifications
On May 26, 2017, in connection with and contingent upon the completion of the merger, RAI entered into arrangements with each of Debra A. Crew, RAIs President and Chief Executive Officer, and Joseph P. Fragnito, President and Chief Commercial Officer of R. J. Reynolds Tobacco Company, a wholly owned operating subsidiary of RAI. These arrangements consist of a retention agreement with each of Ms. Crew and Mr. Fragnito and certain modifications to the Reynolds American Inc. Executive Severance Plan, as amended and restated, referred to as the ESP, with respect to each of Ms. Crew and Mr. Fragnito, both of which are described below.
Retention Agreements
On May 26, 2017, in connection with and contingent upon the completion of the merger, RAI entered into a retention agreement, each referred to as a Retention Agreement and collectively the Retention Agreements, with each of Ms. Crew and Mr. Fragnito. The Retention Agreement with Ms. Crew provides for the payment of a cash retention bonus in the amount of $1,500,000 (subject to applicable withholding) to Ms. Crew if she remains an employee of RAI or any affiliate of or successor to RAI, collectively referred to as the Company, until December 31, 2019. The Retention Agreement with Mr. Fragnito provides for the payment of a cash retention bonus in the amount of $900,000 (subject to applicable withholding) to Mr. Fragnito if he remains an employee of the Company until December 31, 2020. In the event Ms. Crews or Mr. Fragnitos employment with the Company is terminated for any reason prior to December 31, 2019 or December 31, 2020, respectively, the cash retention bonus will be forfeited. Similar retention agreements were entered into with certain of RAIs other executive officers.
The foregoing description of the Retention Agreements does not purport to be a complete description of the terms of the Retention Agreements, and is qualified in all respects by reference to the complete text of the form Retention Agreement, a copy of which is being filed as Exhibit 10.1 hereto, and the form Retention Agreement is incorporated into this Item 5.02 by reference.
Severance Modifications
Additionally, on May 26, 2017, again in connection with and contingent upon the completion of the merger, RAI entered into an agreement with each of Ms. Crew and Mr. Fragnito, each referred to as a Severance Agreement and collectively the Severance Agreements, that modify, as to Ms. Crew and Mr. Fragnito, certain terms of the ESP. Similar severance agreements were entered into with certain of RAIs other executive officers. In addition to certain non-material clarification and consistency changes, such modifications are as described below:
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| With respect to Ms. Crew, the Severance Agreement provides that any termination of Ms. Crews employment with the Company other than for Cause (as defined in the ESP) during the period beginning on the completion of the merger, referred to as the closing date, and ending on December 31, 2020, will be a Qualifying Termination as to Ms. Crew under the ESP. |
| With respect to Mr. Fragnito, the Severance Agreement provides that any termination of Mr. Fragnitos employment with the Company other than for Cause during the period beginning on the closing date and ending on December 31, 2022, will be a Qualifying Termination as to Mr. Fragnito under the ESP. |
| Prior to the modifications described above, the ESP had provided that, in general, after a change in control such as the merger, a Qualifying Termination would occur within the 24-month period following the change in control only upon, as applicable, a termination of Ms. Crew or Mr. Fragnitos employment by RAI or a Participating Company (as defined in the ESP) without Cause or by Ms. Crew or Mr. Fragnito for Change in Control Good Reason (as defined in the ESP). |
| The Severance Agreements provide that upon a Qualifying Termination, subject to the execution of a release of claims, the Company will pay Ms. Crew or Mr. Fragnito (or, in the event of Ms. Crews or Mr. Fragnitos death, Ms. Crews or Mr. Fragnitos estate), as applicable, the Change in Control Severance Benefits payable under the ESP, which in general provides for a cash payment equal to a multiple of base salary plus target annual bonus opportunity as of the date of termination (Ms. Crew has a three times multiple, and Mr. Fragnito has a two times multiple) and six months of subsidized coverage under RAIs medical plan. As modified by the Severance Agreements, the amount calculated as a multiple of base salary and annual bonus will be calculated as if such Qualifying Termination occurred on the closing date. |
| The Severance Agreements provide that any such Qualifying Termination under the Severance Agreements would be considered a termination of employment entitling Ms. Crew or Mr. Fragnito, as applicable, to severance benefits for purposes of any annual bonus or equity arrangements of the Company that provide special benefits upon such a termination. |
| The Severance Agreements provide that if Ms. Crew remains employed by the Company after December 31, 2020, or Mr. Fragnito remains employed by the Company after December 31, 2022, Ms. Crew or Mr. Fragnito, as applicable, will have a right to be covered by any severance arrangement the Company determines is appropriate, as long as the terms of such arrangement are at least as favorable to them as the terms of the Companys severance arrangements then in effect for similarly situated executives of the Company. |
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| In connection with (and as a condition to) entering into the Severance Agreements, each of Ms. Crew and Mr. Fragnito executed a restrictive covenants agreement, covering non-competition, non-solicitation, non-disparagement and cooperation matters, that will apply for up to a three-year period following a termination of Ms. Crews or Mr. Fragnitos employment, as applicable. As a result, payments under the Severance Agreements are subject to repayment under certain conditions as described in the Severance Agreements. The restrictive covenants agreement is attached as Exhibit A to the form of Severance Agreement. In addition, payments under the Severance Agreements are subject to applicable withholding. |
The foregoing description of the Severance Agreements does not purport to be a complete description of the terms of the Severance Agreements, and is qualified in all respects by reference to the complete text of the form Severance Agreement, a copy of which is being filed as Exhibit 10.2 hereto, and the form Severance Agreement is incorporated into this Item 5.02 by reference.
Press Release
On May 30, 2017, RAI issued a press release announcing, among other things, that in the event of the completion of the merger, Andrew D. Gilchrist has indicated that he intends to resign shortly thereafter from his position as executive vice president and chief financial officer of RAI. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
Item 8.01 | Other Events |
On May 30, 2017, RAI issued a press release. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
Forward-Looking and Cautionary Statements
Statements included in this report that are not historical in nature, including financial estimates and statements as to regulatory approvals and the expected timing, completion and effects of the proposed transaction, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this report and in documents incorporated by reference, forward-looking statements include, without limitation, statements regarding the benefits of the proposed transaction, including future financial and operating results, financial forecasts or projections, the combined companys plans, expectations, beliefs, intentions and future strategies, and other statements that are not historical facts, and other statements that are signified by the words anticipate, believe, estimate, expect, intend, may, objective, outlook, plan, project, predict, possible, potential, could, should and similar expressions. These statements regarding future events or the future performance or results of RAI and its subsidiaries or the combined company inherently are subject to a variety of risks, contingencies and other uncertainties that could cause actual results, performance or achievements to differ materially from those described in or implied by the forward-looking statements.
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Among the risks, contingencies and uncertainties that could cause actual results to differ from those described in the forward-looking statements or could result in the failure of the proposed transaction to be consummated, or if consummated, could have an adverse effect on the results of operations, cash flows and financial position of RAI or the combined company, respectively, are the following: the failure to obtain necessary shareholder approvals for the proposed transaction; the failure to obtain other necessary approvals for the proposed transaction, or if obtained, the possibility of being subjected to conditions that could reduce the expected synergies and other benefits of the proposed transaction, result in a material delay in, or the abandonment of, the proposed transaction or otherwise have an adverse effect on RAI or the combined company; the failure to satisfy required closing conditions or complete the proposed transaction in a timely manner or at all; the effect of restrictions placed on RAIs and its subsidiaries business activities and the limitations put on RAIs ability to pursue alternatives to the proposed transaction pursuant to the merger agreement; risks related to disruption of management time from ongoing business operations due to the proposed transaction; the failure to realize projected synergies and other benefits from the proposed transaction; failure to promptly and effectively integrate RAI into BAT; the uncertainty of the value of the proposed transaction consideration that RAI shareholders will receive in the proposed transaction due to a fixed exchange ratio and a potential fluctuation in the market price of BAT common stock; the difference in rights provided to RAI shareholders under North Carolina law, the RAI articles of incorporation and the RAI bylaws, as compared to the rights RAI shareholders will obtain as BAT shareholders under the laws of England and Wales and BATs governing documents; the possibility of RAIs directors and officers having interests in the proposed transaction that are different from, or in addition to, the interests of RAI shareholders generally; the effect of the announcement of the proposed transaction on the ability to retain and hire key personnel, maintain business relationships, and on operating results and businesses generally; the incurrence of significant pre- and post-transaction related costs in connection with the proposed transaction; evolving legal, regulatory and tax regimes; and the occurrence of any event giving rise to the right of a party to terminate the merger agreement. Discussions of additional risks, contingencies and uncertainties are contained in RAIs filings with the U.S. Securities and Exchange Commission (the SEC). Due to these risks, contingencies and other uncertainties, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as provided by federal securities laws, RAI is not under any obligation to, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.
Additional Information
This report may be deemed to be solicitation material in respect of the proposed transaction involving RAI and BAT. In connection with the proposed transaction, BAT has filed with the SEC a registration statement on Form F-4 that includes the proxy statement of RAI that also constitutes a prospectus of BAT. The registration statement has not yet become effective and the proxy statement included therein is in preliminary form. RAI plans to mail the definitive proxy statement/prospectus to its shareholders in connection with the proposed transaction. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY
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CONTAIN IMPORTANT INFORMATION ABOUT BAT, RAI, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and shareholders may obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by RAI and BAT through the SECs website at http://www.sec.gov. In addition, investors and shareholders may obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by RAI by contacting RAI Investor Relations at raiinvestorrelations@reynoldsamerican.com or by calling (336) 741-5165 or at RAIs website at www.reynoldsamerican.com, and may obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by BAT by contacting BAT Investor Relations at batir@bat.com or by calling +44 (0) 20 7845 1000 or at BATS website at www.bat.com.
RAI, BAT and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from RAI shareholders in respect of the proposed transaction that will be described in the proxy statement/prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of proxies from RAI shareholders in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, are set forth in the proxy statement/prospectus filed with the SEC. You may also obtain the documents that RAI files electronically from the SECs website at http://www.sec.gov. Information regarding RAIs directors and executive officers is contained in RAIs Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC on February 9, 2017, and its Form 10-K/A, which was filed with the SEC on March 20, 2017. Information regarding BATs directors and executive officers is contained in BATs Annual Reports, which may be obtained free of charge from BATs website at www.bat.com.
This report is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities in any jurisdiction pursuant to the acquisition, the merger or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No. |
Description | |
10.1 | Form of Retention Agreement between Reynolds American Inc. and the executive officer named therein. | |
10.2 | Form of Severance Agreement between Reynolds American Inc. and the executive officer named therein. | |
99.1 | Press Release of Reynolds American Inc., dated May 30, 2017. |
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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 thereunto duly authorized.
Date: May 30, 2017
REYNOLDS AMERICAN INC. | ||
By: | /s/ McDara P. Folan, III | |
Name: | McDara P. Folan, III | |
Title: | Senior Vice President, Deputy General Counsel and Secretary |
EXHIBIT INDEX
Exhibit No. |
Description | |
10.1 | Form of Retention Agreement between Reynolds American Inc. and the executive officer named therein. | |
10.2 | Form of Severance Agreement between Reynolds American Inc. and the executive officer named therein. | |
99.1 | Press Release of Reynolds American Inc., dated May 30, 2017. |
Exhibit 10.1
, 2017
PERSONAL AND CONFIDENTIAL
[Name]
[Address]
Dear [Name]:
Reynolds American Inc. (RAI) is pleased to offer you this Retention Bonus Agreement in connection with the completion of the transactions described in that certain Agreement and Plan of Merger, dated as of January 16, 2017, among British American Tobacco p.l.c., BATUS Holdings Inc., Flight Acquisition Corporation and RAI (the Merger Agreement). This Retention Bonus Agreement will be binding immediately upon its execution, but, notwithstanding any provision of this Retention Bonus Agreement to the contrary, this Retention Bonus Agreement will not become effective or operative (and neither party will have any obligation hereunder) until the occurrence of the Closing (as defined in the Merger Agreement). Notwithstanding any provision in this Retention Bonus Agreement to the contrary, if the Merger Agreement is terminated (with the effect that the Closing will not occur), this Retention Bonus Agreement will immediately terminate and you will not be entitled to any payments or benefits hereunder.
1. Retention Bonus.
(a) | Amount and Eligibility. If you remain an employee of RAI or any affiliate of or successor to RAI (collectively, the Company) until December 31, 20 (the Retention Date), the Company will pay you a retention bonus in an amount equal to $ (the Retention Bonus). If your employment with the Company terminates for any reason prior to the Retention Date, no Retention Bonus will be payable under this Retention Bonus Agreement. |
(b) | Time of Payment. Your Retention Bonus, if earned, will be paid in a lump sum in cash as soon as practicable (but in no event later than thirty (30) days) following the Retention Date. |
2. Tax Withholding. The Company shall withhold from your Retention Bonus all federal, state, city or other taxes as may be required to be withheld pursuant to any law or governmental regulation or ruling.
3. Complete Agreement. This Retention Bonus Agreement embodies the complete agreement and understanding between the parties with respect to the subject matter hereof and effective as of its date supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.
4. Counterparts. This Retention Bonus Agreement may be executed in two or more counterparts (including by facsimile or PDF), each of which will be deemed an original but all of which together will constitute one and the same instrument.
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Please be aware that this Retention Bonus Agreement does not constitute an offer or guarantee of employment with the Company. Please indicate your agreement to the terms set forth herein by executing this Retention Bonus Agreement in the space provided below.
Very truly yours, | ||
REYNOLDS AMERICAN INC. | ||
By: |
| |
Name: Title: |
I hereby agree to the terms of this Retention Bonus Agreement.
By: |
| |
[Name] | ||
Date: |
|
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Exhibit 10.2
, 2017
PERSONAL AND CONFIDENTIAL
[Name]
[Address]
Dear [Name]:
Reynolds American Inc. (RAI) is pleased to offer you this Letter Agreement in connection with the completion of the transactions described in that certain Agreement and Plan of Merger, dated as of January 16, 2017, among British American Tobacco p.l.c., BATUS Holdings Inc., Flight Acquisition Corporation and RAI (the Merger Agreement). This Letter Agreement will be binding immediately upon its execution, but, notwithstanding any provision of this Letter Agreement to the contrary, this Letter Agreement will not become effective or operative (and neither party will have any obligation hereunder) until the occurrence of the Closing (as defined in the Merger Agreement). Notwithstanding any provision in this Letter Agreement to the contrary, if the Merger Agreement is terminated (with the effect that the Closing will not occur), this Letter Agreement will immediately terminate and you will not be entitled to any payments or benefits hereunder. Words and phrases used in this Letter Agreement with initial capital letters that are not defined in this Letter Agreement, and are defined in the Reynolds American Inc. Executive Severance Plan, as amended and restated effective May 5, 2016, as in effect on the date of this Letter Agreement (the ESP), are used herein as so defined.
1. Amendment to the ESP to Provide Change in Control Severance Benefits for any Termination of Employment Other Than For Cause During the ESP Severance Period. Pursuant to Section 9.9 of the ESP, with respect to you and your participation in the ESP, the ESP is hereby amended, effective as of the Closing, to provide that the termination of your employment with RAI, its affiliates and successors (collectively, the Company) at any time during the period beginning on the Closing Date (as defined in the Merger Agreement) and ending on December 31, 20 (the ESP Severance Period) for any reason other than Cause (as determined in accordance with Section 2(h) of the ESP, as amended as to you by this Letter Agreement) will constitute a Qualifying Termination under Section 3.1(a) of the ESP, as amended as to you by this Letter Agreement. Unless otherwise apparent from the context, subsequent references to the ESP in this Letter Agreement are references to the ESP as amended as to you by this Letter Agreement. Upon your Qualifying Termination, the Company shall pay and provide to you, pursuant to the ESP, the Change in Control Severance Benefits payable upon a Qualifying Termination pursuant to Section 4.1(b) of the ESP, subject to the satisfaction of the requirements of Section 3 of this Letter Agreement, provided that the amount payable pursuant to Section 4.1(b)(iv) of the ESP will be calculated as if your Qualifying Termination occurred on the Closing Date, and provided further that Section 4.1(b)(v) shall not apply. If the Qualifying Termination is due to your death, the payments and benefits that become payable pursuant to Section 4.1(b) of the ESP by reason of such Qualifying Termination shall be paid to your estate (in the case of cash payments) or provided to your eligible dependents (in the case of benefits to
be provided to your eligible dependents). For the avoidance of doubt, any termination of employment under this Section 1 shall be considered a termination entitling you to severance benefits for purposes of any annual bonus or equity arrangements of the Company that provide special benefits upon such a termination.
2. Termination of Employment After ESP Severance Period. If you remain employed at the end of the ESP Severance Period, you will be covered by whatever severance arrangement of the Company that the Company then determines is appropriate, provided that (a) such severance arrangement shall have terms that are at least as favorable to you as the Companys severance arrangements then in effect for executives of the Company who are similarly situated to you and (b) in the event that you become eligible for severance benefits under such severance arrangement, you shall be 100% vested in and entitled to such benefits in any event, but the payment of such benefits shall be made in such manner and at such time as would avoid the inclusion of amounts in respect of such severance benefits in your income under Code Section 409A(a)(1)(A).
3. Release Requirement. As a condition to receiving any amounts payable pursuant to Section 1 of this Letter Agreement, you (or in the event of your death, your estate) must satisfy the general release requirement of Section 3.4 of the ESP.
4. Tax Withholding. The Company shall withhold from all amounts payable hereunder all federal, state, city or other taxes as may be required to be withheld pursuant to any law or governmental regulation or ruling.
5. Restrictive Covenants. As a condition to entering into this Letter Agreement, you are executing the Restrictive Covenants Agreement attached hereto as Exhibit A.
6. Return of Benefits. With respect to the benefits payable under this Letter Agreement or the ESP, if at any time (a) you (or, in the event of your death, your estate) breach any provision of the release described in Section 3 of this Letter Agreement or (b) you breach any restrictive covenant agreement with the Company, including the Restrictive Covenants Agreement attached as Exhibit A, then in addition to all other rights and remedies available to it at law or equity, the Company may cease to provide any further benefits under this Letter Agreement or the ESP, and upon the Companys written demand, you (or, in the event of your death, your estate) will repay to the Company any amount previously received under this Letter Agreement or the ESP. Any amount to be repaid will be (i) determined by the Company in its sole and absolute discretion, (ii) held by you (or, in the event of your death, your estate) in constructive trust for the benefit of the Company and (iii) paid by you (or, in the event of your death, your estate) to the Company within ten (10) days of your (or, in the event of your death, your estates) receipt of written notice from the Company. The Company will have the right to offset such amount against any amounts otherwise owed to you (or, in the event of your death, your estate) by the Company.
7. Code Section 409A.
(a) | Specified Employees. Notwithstanding anything in this Letter Agreement to the contrary, in the event that you are deemed to be a specified employee on the date your employment with the Company terminates, determined pursuant to an |
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identification methodology adopted by the Company in compliance with Code Section 409A, and if any portion of the payments or benefits to be received by you upon separation from service would constitute a deferral of compensation subject to Code Section 409A, then to the extent necessary to comply with Code Section 409A, amounts that would otherwise be payable pursuant to this Letter Agreement or the ESP during the six (6) month period immediately following the date of your termination of employment and benefits that would otherwise be provided pursuant to this Letter Agreement or the ESP during the six (6) month period immediately following the date of your termination of employment will instead be paid or made available on the earlier of (i) within ten (10) days following the first business day of the seventh month after the date of your termination of employment, provided that you shall not have the right to designate the payment date or (ii) your death. |
(b) | General. The parties intend for this Letter Agreement to either comply with, or be exempt from, Code Section 409A, and all provisions of this Letter Agreement will be interpreted and applied accordingly. Each payment under this Letter Agreement shall be considered a separate payment and not one of a series of payments for purposes of Code Section 409A. |
8. Excise Tax. The parties acknowledge that the amounts payable under this Letter Agreement are Payments as defined in Section 5.1 of the ESP. In the event that any Payment would be subject to the Excise Tax, the procedures set forth in Section 5.1(b)-(f) of the ESP shall apply; provided, however, that, pursuant to Section 9.9 of the ESP, with respect to you and your participation in the ESP, the last sentence of Section 5.1(b) of the ESP is hereby amended in its entirety to read as follows: In the event that any Payments intended to be provided under this Plan or otherwise are required to be reduced pursuant to this Section 5.1(b), such reduction shall be made to your Payments in the following order: (i) reduction of those benefits or payments that are subject to full inclusion as parachute payments (as defined in Code Section 280G); and (ii) reduction of those benefits or payments that are not subject to full inclusion as parachute payments (as defined in Code Section 280G).
9. Legal Fees and Expenses. The Company will pay all reasonable legal fees, costs of litigation, prejudgment interest and other expenses which are incurred in good faith by you as a result of the Companys refusal to provide any amounts or benefits to which you become entitled under this Letter Agreement or the ESP, or as a result of the Companys (or any third partys) contesting the validity, enforceability, or interpretation of this Letter Agreement with respect to the amounts or benefits to which you become entitled under this Letter Agreement or the ESP, or as a result of any conflict between the parties pertaining to the amounts or benefits to which you become entitled under this Letter Agreement or the ESP; provided, however, that if the court determines that your claims were arbitrary and capricious, the Company will have no obligation under this Letter Agreement and you will be obligated to return to the Company any reimbursement made to you by the Company pursuant to this provision. If such fees and expenses are initially paid by you, subject to Section 7(a) of this Letter Agreement, the Company will reimburse you the full amount of such fees and expenses after receipt from you of reasonable evidence of payment; provided, however, that any such reimbursement will be made no later than December 31 of the year following the year in which you incur the fees and expenses. In no event will the amount of expenses eligible for reimbursement in one year affect the amount of expenses to be reimbursed, or in-kind benefits to be provided, in any other taxable year.
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10. Applicable Law. The laws of North Carolina shall be the controlling law in all matters relating to this Letter Agreement, without giving effect to principles of conflicts of laws. The Company shall apply and administer this Letter Agreement in a manner such that the Employee Retirement Income Security Act of 1974, as amended, does not apply to this Letter Agreement.
11. Amendments. This Letter Agreement may only be amended if agreed to in writing by you and the Company. Further, during the ESP Severance Period, the Company shall not modify or amend the ESP with respect to you unless such modification or waiver is agreed to in writing by you.
12. Complete Agreement. This Letter Agreement embodies the complete agreement and understanding between the parties with respect to the subject matter hereof and effective as of its date supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. For the avoidance of doubt, however, the parties agree that except as expressly set forth herein, nothing in this Letter Agreement supersedes, preempts or amends the ESP.
13. Counterparts. This Letter Agreement may be executed in two or more counterparts (including by facsimile or PDF), each of which will be deemed an original but all of which together will constitute one and the same instrument.
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Please be aware that this Letter Agreement does not constitute an offer or guarantee of employment with the Company. Please indicate your agreement to the terms set forth herein by executing this Letter Agreement in the space provided below.
Very truly yours, | ||
REYNOLDS AMERICAN INC. |
By: |
| |
Name: | ||
Title: |
As required by Section 9.9 of the ESP, on behalf of the Compensation & Leadership Development Committee |
By: |
|
Nana Mensah | ||
Chair of the Compensation & Leadership Development Committee |
I hereby agree to the terms of this Letter Agreement, including the amended terms with respect to me and my participation in the ESP.
By: |
| |
[Name] | ||
Date: |
|
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EXHIBIT A
Restrictive Covenants Agreement
THIS RESTRICTIVE COVENANTS AGREEMENT (this Agreement) is made and entered into as of , 2017, by and between you and Reynolds American Inc. (RAI). In consideration of the mutual covenants contained herein and other good and valuable consideration (including your letter agreement with RAI, dated , 2017 (your Letter Agreement)), the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. | Non-Competition and Non-Solicitation. |
a. | As a material inducement to the Company (as defined in your Letter Agreement) to enter into your Letter Agreement, you agree that, during your employment with any of the Related Companies (as defined below) and during the Restricted Period, you will not: |
i. | be employed, or retained as an independent contractor, or otherwise provide advisory or consulting services (in each case, whether compensated or not compensated), in any of the following roles for any Competitive Business (as defined below); |
(1) sales;
(2) marketing;
(3) strategic planning;
(4) finance; or
(5) product research or development
ii. | be employed by, or retained as an independent contractor by, or otherwise provide advisory or consulting services to (in each case, whether compensated or not compensated), any Competitive Business in any sort of position or capacity involving the performance of services that are the same as, or substantially similar to, the services you performed while an employee of any Related Company; |
iii. | serve (whether compensated or not compensated) as an officer or director of any Competitive Business; |
iv. | organize, own (other than owning up to 5% of the outstanding stock of a publicly traded company) or operate any Competitive Business; |
v. | (1) be employed, or retained as an independent contractor (in each case, whether compensated or not compensated) by, (2) provide advisory or consulting services (in each case, whether compensated or not compensated) to, (3) organize or operate or (4) serve as a director or official of (in each case, whether compensated or not-compensated) any Anti-Tobacco Organization (as defined below); |
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vi. | (1) be employed, or retained as an independent contractor (in each case, whether compensated or not compensated) by, (2) provide advisory or consulting services (in each case, whether compensated or not compensated) to or (3) serve as a director or official of (in each case, whether compensated or non-compensated) any Regulator (as defined below); or |
vii. | solicit, offer employment to, or hire any employee, independent contractor or any other individual providing services to any Related Company (other than secretarial and clerical personnel), who was employed by, or provided services to, any Related Company, at the time of your Termination Date, or who was employed by, or provided services to, any Related Company during the 90-day period preceding such date, to become employed by or otherwise provide services to, any person, firm, entity or corporation, or approach any such person for any of the foregoing reasons. |
b. | As a material inducement to the Company to enter into your Letter Agreement, you hereby affirm and restate the terms of the Employee Invention and Confidentiality Agreement executed by you during your employment with the Company. |
c. | For purposes of this Agreement, the terms used in this Paragraph 1 have the following definitions: |
i. | Anti-Tobacco Organization means any firm, organization, entity, group, or sole proprietorship, the activities or purposes of which include opposing, advocating or lobbying against, or seeking the imposition of restrictions or prohibitions with respect to, any of the Related Companies Businesses (as defined below) or the use or consumption of any of the Products (as defined below). |
ii. | Competitive Business means any corporation, limited liability company, partnership, person, firm, organization, entity, enterprise, business or activity that is engaged in any of the Related Companies Businesses in the Territory (as defined below) or seeking to engage in any of the Related Companies Businesses in the Territory. |
iii. | Governmental Authority means the government of the United States of America, any other nation or political subdivision thereof, whether state or local, and any agency, authority, administration, instrumentality, regulatory body, court or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. |
iv. | Regulator means: (1) the U.S. Food and Drug Administration (the FDA), the Center for Tobacco Products established within the FDA (the CTP), the Tobacco Products Scientific Advisory Committee established within the CTP, or any other office, division, branch, committee, department or other body (collectively, an Organizational Body) established by the FDA or by an Organizational Body; or (2) any other Governmental Authority having the authority to regulate, or make recommendations regarding any proposed regulations affecting, any part of any of the Related Companies Businesses. |
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v. | Related Companies Businesses means the businesses of manufacturing, distributing, advertising, promoting, marketing or selling any of the following products (collectively, Products): (1) any cigarette, cigar, little cigar, roll-your-own tobacco, smokeless or smoke-free tobacco product (including moist snuff, dry snuff, snus, loose leaf, plug and twist tobacco and any other smokeless or smoke-free tobacco, including dissolvable products, that may be invented through the date of your Termination Date); (2) any nicotine replacement therapy products, including nicotine gum, mouth spray and pouches, and any products otherwise marketed or intended to be used as part of a smoking cessation program; (3) any product commonly referred to as an e-cigarette; and (4) any other product, including any tobacco or cigarette substitute, that any Related Company invents, develops and/or markets through your Termination Date. |
vi. | Related Company means, at any time, individually, RAI and each of its subsidiaries; and Related Companies means, at any time, collectively, RAI and all of its subsidiaries, and, in any case, each and all of their respective subsidiaries, parents, affiliates (including partnerships and joint ventures in which any Related Company is a partner or joint venturer), successors and assigns. |
vii. | Restricted Period means the period of 36 months immediately following your Termination Date; provided however, if a court of competent jurisdiction determines that such period should be less than 36 months, then Restricted Period means the period of 30 months immediately following your Termination Date; provided further, however, if a court of competent jurisdiction determines that such period should be less than 30 months, then Restricted Period means the period of 24 months immediately following your Termination Date. |
viii. | Termination Date means the date of your termination from active employment with all Related Companies. |
ix. | Territory means |
(1) | the United States of America and each of the following individual states, territories, commonwealths and possessions (including duty-free stores or outlets located anywhere in any of the foregoing places): |
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Alabama Alaska American Samoa Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Guam Hawaii Idaho Illinois |
Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada |
New Hampshire New Jersey New Mexico New York North Carolina North Dakota Northern Mariana Islands Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina |
South Dakota Tennessee Texas United States Virgin Islands Utah Vermont Virginia Washington Washington, D.C. West Virginia Wisconsin Wyoming |
(2) | U.S. military installations located anywhere in the world; and |
(3) | any other location in which any Related Company conducts any of the Related Companies Businesses through your Termination Date. |
As used in this Paragraph 1, the term including, or variations thereof, shall not be a term of limitation, but rather shall be deemed to be followed by the words without limitation. The Territory described herein is a good faith estimate of the geographic area that is now applicable or that may be applicable at the termination of your employment as the area in which any Related Company does or will do business during the term of your employment, and any Related Company and you agree that this Agreement shall ultimately be construed to cover only so much of such estimate as relates to the geographic areas in which any Related Company does business within the two-year period preceding your Termination Date.
d. | Notwithstanding anything to the contrary contained in this Agreement, this Agreement will not prohibit you from engaging in the authorized practice of law, whether for a firm, corporation or otherwise, in any jurisdiction that prohibits agreements restricting the right of an individual to engage in such practice; provided, however, you will continue to be bound by any and all applicable professional and ethical rules of conduct that govern the use or disclosure of confidential information obtained during the course of any representation of a Related Company or any of its subsidiaries; and, provided further, this Agreement does prohibit you from engaging in any of the activities outlined in this Agreement in a non-legal, business role. |
e. | You further understand and agree that: |
i. | the purpose of the covenants in this Paragraph 1 is solely to protect the Related Companies legitimate business interests, including, but not limited to, the Related Companies confidential information, customer relationships and goodwill, all of which contribute to the Related Companies competitive advantage in operating the Related Companies Businesses in the Territory; |
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ii. | the Related Companies manufacture, distribute, advertise, promote, market and sell Products in the Territory, and the restrictive covenants contained in this Paragraph 1 are necessary to protect the Related Companies legitimate business assets and interests, and they are reasonable in time, territory, and scope, and in all other respects; and |
iii. | the covenants set forth in this Paragraph 1 are essential elements of your Letter Agreement and shall be construed as agreements independent of any other provision in your Letter Agreement, and the existence of any claim or cause of action you have against any Related Company, whether predicated on your Letter Agreement or otherwise, shall not excuse your breach, or constitute a defense to the enforcement by the Related Companies, of these restrictive covenants. You have had the opportunity to independently consult with counsel for advice in all respects concerning the reasonableness and propriety of these covenants, with specific regard to the nature of the businesses conducted by the Related Companies. |
f. | You agree that any breach of the covenants contained in this Paragraph 1 would irreparably injure the Related Companies and that their remedies at law would be inadequate. Accordingly, in the event of any breach or threatened breach of the covenants in this Paragraph 1, the Related Companies, in addition to any other rights and remedies available at law or in equity, shall be entitled to an injunction (and/or other equitable relief), restraining such breach or threatened breach, and be entitled to the reimbursement of court costs, attorneys fees and other costs and expenses incurred in connection with enforcing this Agreement. The existence of any claim or cause of action on your part against any Related Company shall not constitute a defense to the enforcement of these provisions. This Agreement shall be enforceable by any Related Company, either alone or together with any other Related Company or Related Companies. The rights and remedies hereunder provided to the Related Companies shall be cumulative and shall be in addition to any other rights or remedies available at law, in equity or under this Agreement. |
g. | If any of the provisions of this Paragraph 1 are determined by a court of law to be excessively broad, whether as to geographical area, time, scope or otherwise, such provision shall be reduced to whatever extent is reasonable and shall be enforced as so modified. Any provisions of this Paragraph 1 not so modified shall remain in full force and effect. |
h. | If at any time you breach any of your obligations under this Paragraph 1 of this Agreement, then in addition to all other rights and remedies available to it at law or equity, the Company may cease to provide any further benefits under your Letter Agreement or any employee benefit plan or agreement amended by your Letter Agreement, and upon the Companys written demand, you (or, in the event of your death, your estate) will repay to the Company any amount previously received under your Letter Agreement or any employee benefit plan or agreement amended by your Letter Agreement. Any amount to be repaid will be (i) determined by the Company in its sole and absolute discretion, (ii) held by you (or, in the event of your death, your estate) in |
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constructive trust for the benefit of the Company and (iii) paid by you (or, in the event of your death, your estate) to the Company within ten (10) days of your (or, in the event of your death, your estates) receipt of written notice from the Company. The Company will have the right to offset such amount against any amounts otherwise owed to you (or, in the event of your death, your estate) by the Company. |
2. | Non-Disparagement. You agree not to: |
a. | make any critical or derogatory statement, oral or written, concerning the Company, the Companys business practices, officers, directors, employees or products, or any other aspect of the Companys business, to any person or entity including, but not limited to, any of the Companys current, former or prospective consumers, customers, business partners, employees or agents; |
b. | take any other action that a reasonable person would believe could adversely affect the reputation or business prospects of the Company, the Companys products, officers, directors or employees and/or the Companys business; |
c. | because damages flowing from a breach of the provisions of Paragraph 2 of this Agreement would be difficult to calculate with precision, you specifically and expressly agree that the amount of any payment received pursuant to your Letter Agreement, less one hundred dollars ($100.00), will be the amount of liquidated damages which will be recoverable from you for a breach of the provisions of Paragraph 2 of this Agreement; and |
d. | notwithstanding anything to the contrary contained herein, Paragraph 2 of this Agreement does not prohibit you from providing truthful testimony or information in response to any lawful subpoena, compulsory process or as part of any investigation, proceeding or hearing before any federal, state or local governmental agency. |
3. | Litigation Assistance. |
a. | In addition to any other obligations you have under law or any other agreement with any Related Company (as defined in Paragraph 1 of this Agreement), you specifically agree that: |
i. | if requested by the Company, you will personally provide reasonable assistance and cooperation to the Related Companies in activities related to the prosecution or defense of any pending or future lawsuits or claims involving any Related Company (with the Company reimbursing you for reasonable and necessary out-of-pocket costs and expenses incurred in connection therewith); |
ii. | you will promptly notify the Companys General Counsel, in writing, upon receipt of any requests from anyone other than an employee or agent of one of the Related Companies for information regarding any Related Company which could reasonably be construed as being proprietary, non-public or confidential, or if you become aware of any potential claim or proposed litigation against any Related Company; |
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iii. | you will refrain from providing any information related to any claim or potential litigation against any Related Company to any person who is not a representative of the Company without the Companys prior written permission, unless required to provide information pursuant to legal process; |
iv. | you will not disclose or misuse any confidential information or material concerning any Related Company; and |
v. | you will not engage in any activity detrimental to the interest of any Related Company, including an act of dishonesty, moral turpitude or other misconduct that has or could have a detrimental impact on the business or reputation of any Related Company. |
b. | As a material inducement to the Company to enter into your Letter Agreement, you agree that, if required by law to provide sworn testimony regarding any matter related to any Related Company: you will consult with and have Company designated legal counsel present for such testimony (with the Company being responsible for the costs of such designated counsel); and you will cooperate with the Companys attorneys to assist their efforts, especially on matters you have been privy to, holding all privileged attorney-client matters in strictest confidence. |
c. | Notwithstanding anything herein to the contrary, nothing in this Agreement shall (i) prohibit you from reporting possible violations of federal law or regulation to any governmental agency or entity in accordance with any whistleblower protection provisions of state or federal law or regulations, (ii) prohibit you from communicating with any governmental agency or entity or otherwise participating in any investigation or proceeding that may be conducted by such governmental agency or entity, including providing documents or information, (iii) require notification to or prior approval by the Company or the Companys General Counsel of any such reports, communications or disclosures, or (iv) limit your right to receive an award for information relating to a possible securities law violation to the Securities and Exchange Commission. |
4. | Severability and Waiver. Each provision of this Agreement shall be enforceable independently of every other provision. Furthermore, in the event that any provision is deemed to be unenforceable for any reason, the remaining provisions shall remain effective, binding and enforceable. The failure of any party to enforce any provision of this Agreement shall not constitute a waiver of that provision, or of any other provision of this Agreement. |
5. | Entire Agreement. This Agreement embodies the complete agreement and understanding between the parties with respect to the subject matter hereof and effective as of its date supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. This Agreement may be modified or amended only in writing and signed by both parties. |
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6. | Applicable Law. The laws of North Carolina shall be the controlling law in all matters relating to this Agreement, without giving effect to principles of conflicts of laws. Further, any litigation pertaining to the interpretation, application or enforcement of any provision of this Agreement must be filed in a federal or state court of competent jurisdiction located in Forsyth County, North Carolina. |
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EXECUTED on the date set forth above.
REYNOLDS AMERICAN INC. | ||
By: |
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Name: Title: | ||
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Name: |
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Exhibit 99.1
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Reynolds American Inc. P.O. Box 2990 Winston-Salem, NC 27102-2990 |
Contact: | Investor Relations: Bob Bannon (336) 741-3359 |
Media: David Howard (336) 741-3489 |
RAI 2017-11 |
RAI post-acquisition leadership team announced
WINSTON-SALEM, N.C. May 30, 2017 Reynolds American Inc. (NYSE: RAI) today announced its proposed leadership team after the anticipated third-quarter acquisition of RAI by British American Tobacco p.l.c. (BAT).
Debra A. Crew will remain as president and CEO of RAI. Should the acquisition be successfully completed, she will report to Nicandro Durante, president and CEO of BAT.
Andrew D. Gilchrist, currently executive vice president and chief financial officer of RAI, has indicated that, in the event of the completion of the proposed acquisition, he intends to resign from the company shortly thereafter. Gilchrists replacement will be named in the future, and will report to Crew.
Should the acquisition be successfully completed, the majority of RAI and its subsidiaries senior executives will remain with the RAI companies. The executives who plan to remain, and their titles at RAI or one of its subsidiaries, will be as follows:
| Michael P. Auger, president of RAI Trade Marketing Services Co.; |
| Lisa J. Caldwell, executive vice president and chief human resources officer of RAI, RAI Services Co. (RAIS) and R.J. Reynolds Tobacco Co. (RJRT); |
| Joseph P. Fragnito, president and chief commercial officer of RJRT; |
| Carolyn C. Hanigan, president of RAI Innovations Co.; |
| Nancy H. Hawley, executive vice president of operations of RJRT; |
| Daniel J. Herko, executive vice president of R&D of RJRT and executive vice president of scientific and regulatory affairs of RAIS; |
| Martin (Mark) L. Holton III, executive vice president of legal and external affairs and general counsel of RAI and RAIS; |
| N. Winton Jennette, senior vice president of strategy and planning of RJRT; |
| Kevan A. Ostrander, vice president of information management of RAIS; and |
| Mark A. Peters, senior vice president of decision support and transition planning of RAIS and chief financial officer of RJRT. |
Im delighted that so many of our companies strong, seasoned leaders will remain in their roles following completion of the proposed acquisition, Crew said. As a group, we are committed to our shared vision of transforming the U.S. tobacco industry, and we are confident that being part of a much larger, global organization will enable us to achieve this vision and amplify our success, she said.
In the weeks ahead, a new executive vice president of consumer marketing for RJRT is expected to be named, as Cressida Lozano, the current executive vice president of consumer marketing for RJRT, has indicated that, in the event of the completion of the proposed acquisition, she intends to resign from the company later this year.
In addition to Gilchrist and Lozano, J. Brice OBrien, the current executive vice president of public affairs and chief communications officer, has indicated that, in the event of the completion of the proposed acquisition, he intends to resign from the company shortly thereafter. Following such departure, his responsibilities will be assigned to Mark Holton, in addition to Holtons continuing role as RAIs general counsel.
Our companies owe Andrew Gilchrist, Brice OBrien and Cressida Lozano tremendous thanks for their leadership and commitment to our shared success, Crew said. Should these resignations occur, we wish them all the best in their future endeavors.
RAIs acquisition by BAT is subject to approval by both companies shareholders as well as other customary closing conditions. RAI continues to expect the transaction to be completed in the third quarter of 2017.
Web and Social Media Disclosure
RAIs website, www.reynoldsamerican.com, is the primary source of publicly disclosed news, including our quarterly earnings, about RAI and its operating companies. RAI also uses Twitter to publicly disseminate company news via @RAI_News. It is possible that the information we post could be deemed to be material information. We encourage investors and others to register at www.reynoldsamerican.com to receive alerts when news about the company has been posted, and to follow RAI on Twitter at @RAI_News.
Cautionary Statement Regarding Forward-Looking Statements
Statements included in this communication that are not historical in nature, including financial estimates and statements as to regulatory approvals and the expected timing, completion and effects of the proposed transaction, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this communication and in documents incorporated by reference, forward-looking statements include, without limitation, statements regarding the benefits of the proposed transaction, including future financial and operating results, financial forecasts or projections, the combined companys plans, expectations, beliefs, intentions and future strategies, and other statements that are not historical facts, and other statements that are signified by the words anticipate, believe, estimate, expect, intend, may, objective, outlook, plan, project, predict, possible, potential, could, should and similar expressions. These statements regarding future events or the future performance or results of Reynolds American Inc. (RAI) and its subsidiaries or the combined company inherently are subject to a variety of risks, contingencies and other uncertainties that could cause actual results, performance or achievements to differ materially from those described in or implied by the forward-looking statements.
Among the risks, contingencies and uncertainties that could cause actual results to differ from those described in the forward-looking statements or could result in the failure of the proposed transaction to be consummated, or if consummated, could have an adverse effect on the results of operations, cash flows and financial position of RAI or the combined company, respectively, are the following: the failure to obtain necessary shareholder approvals for the proposed transaction; the failure to obtain other necessary approvals for the proposed transaction, or if obtained, the possibility of being subjected to conditions that could reduce the expected synergies and other benefits of the proposed transaction,
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result in a material delay in, or the abandonment of, the proposed transaction or otherwise have an adverse effect on RAI or the combined company; the failure to satisfy required closing conditions or complete the proposed transaction in a timely manner or at all; the effect of restrictions placed on RAIs and its subsidiaries business activities and the limitations put on RAIs ability to pursue alternatives to the proposed transaction pursuant to the merger agreement; risks related to disruption of management time from ongoing business operations due to the proposed transaction; the failure to realize projected synergies and other benefits from the proposed transaction; failure to promptly and effectively integrate RAI into British American Tobacco p.l.c. (BAT); the uncertainty of the value of the proposed transaction consideration that RAI shareholders will receive in the proposed transaction due to a fixed exchange ratio and a potential fluctuation in the market price of BAT common stock; the difference in rights provided to RAI shareholders under North Carolina law, the RAI articles of incorporation and the RAI bylaws, as compared to the rights RAI shareholders will obtain as BAT shareholders under the laws of England and Wales and BATs governing documents; the possibility of RAIs directors and officers having interests in the proposed transaction that are different from, or in addition to, the interests of RAI shareholders generally; the effect of the announcement of the proposed transaction on the ability to retain and hire key personnel, maintain business relationships, and on operating results and businesses generally; the incurrence of significant pre- and post-transaction related costs in connection with the proposed transaction; evolving legal, regulatory and tax regimes; and the occurrence of any event giving rise to the right of a party to terminate the merger agreement. Discussions of additional risks, contingencies and uncertainties are contained in RAIs filings with the U.S. Securities and Exchange Commission (the SEC).
Due to these risks, contingencies and other uncertainties, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Except as provided by federal securities laws, RAI is not under any obligation to, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.
Additional Information
This communication may be deemed to be solicitation material in respect of the proposed transaction involving RAI and BAT. In connection with the proposed transaction, BAT has filed with the SEC a registration statement on Form F-4 that includes the proxy statement of RAI that also constitutes a prospectus of BAT. The registration statement has not yet become effective and the proxy statement included therein is in preliminary form. RAI plans to mail the definitive proxy statement/prospectus to its shareholders in connection with the proposed transaction. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT BAT, RAI, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and shareholders may obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by RAI and BAT through the SECs website at http://www.sec.gov. In addition, investors and shareholders may obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by RAI by contacting RAI Investor Relations at raiinvestorrelations@reynoldsamerican.com or by calling (336) 741-5165 or at RAIs website at www.reynoldsamerican.com, and may obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by BAT by contacting BAT Investor Relations at batir@bat.com or by calling +44 (0) 20 7845 1000 or at BATS website at www.bat.com.
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RAI, BAT and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from RAI shareholders in respect of the proposed transaction that is described in the proxy statement/prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of proxies from RAI shareholders in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in the proxy statement/prospectus filed with the SEC. You may also obtain the documents that RAI files electronically from the SECs website at http://www.sec.gov. Information regarding RAIs directors and executive officers is contained in RAIs Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC on February 9, 2017, and its Form 10-K/A, which was filed with the SEC on March 20, 2017. Information regarding BATs directors and executive officers is contained in BATs Annual Reports, which may be obtained free of charge from BATs website at www.bat.com.
This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities in any jurisdiction pursuant to the acquisition, the merger or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
ABOUT US
Reynolds American Inc. (NYSE: RAI) is the parent company of R.J. Reynolds Tobacco Company; Santa Fe Natural Tobacco Company, Inc.; American Snuff Company, LLC; 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 Newport, Camel and Pall Mall. |
| Santa Fe Natural Tobacco Company, Inc. manufactures and markets Natural American Spirit products. |
| American Snuff Company, LLC is the nations second-largest manufacturer of smokeless tobacco products. Its leading brands are Grizzly and Kodiak. |
| Niconovum USA, Inc. and Niconovum AB market innovative nicotine replacement therapy products in the U.S. and Sweden, respectively, under the ZONNIC brand name. |
| R.J. Reynolds Vapor Company is a marketer of digital vapor cigarettes, manufactured on its behalf by R.J. Reynolds, under the VUSE brand name in the United States. |
Copies of RAIs 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 how RAI and its operating companies are transforming the tobacco industry, go to the RAI website, Transforming Tobacco.
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