DEFA14A 1 d770425ddefa14a.htm DEFA14A DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.     )

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¨ Preliminary Proxy Statement
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¨ Definitive Proxy Statement
¨ Definitive Additional Materials
þ Soliciting Material Pursuant to §240.14a-12

LORILLARD, INC.

 

(Name of Registrant as Specified In Its Charter)

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LOGO

 

TO:    My Co-Workers
FROM:    William Crump
DATE:    August 8, 2014
SUBJECT:    Your Questions

 

 

Thank you for the questions you have been submitting since the Merger Agreement announcement. We continue to receive a large variety of questions and let me assure you that, over time, we will directly respond to each one. Please be mindful of the complexity of this agreement and that Lorillard is unable to speak for the employment and benefits policies of Reynolds American Inc. or Imperial Tobacco beyond the present agreement. In the meantime, we have posted a list of your most Frequently Asked Questions with the appropriate answer.

I know that during the months to come, many more questions will arise and I encourage you to submit them to feedback@lortobco.com. While the Company is always sensitive to your concerns, we ask that you understand that many details are still to be worked out through a process that will take several months. When new information becomes available, it will be promptly posted. At the appropriate time, we will assemble a Lorillard team to work with the other companies involved in the Merger Agreement to ensure a well-coordinated transition. Importantly, most Lorillard employees will continue in their current jobs.

While there will be much effort put into this planning, it is vital that we remain focused on today’s business. Until the anticipated closing date, Lorillard remains a competitor to all parties in the agreement and is bound by law to conduct its daily business as such. We are only at the beginning of the process which will require approval by the Federal Trade Commission, and then by the shareholders of each company. Even after the proposed closing date, there will be a very involved transition period.

In the meantime, we must stay focused to support our continued success.


Hourly Union Employee Frequently Asked Questions (FAQ’s)

Below is a set of questions and answers that explain some of the effects of the Merger Agreement that Lorillard, Inc. (“Lorillard”) has entered into with Reynolds American Inc. (“RAI”) and the Asset Purchase Agreement that RAI has entered into with Imperial Tobacco Group PLC (“Imperial”) (together the “Transaction Documents”) on compensation, benefits and employment. These questions and answers are very preliminary, and we will provide more detail as we get closer to a closing date, which is many months away, at a minimum. The information in this summary is not complete, and this summary is qualified in its entirety by the terms of the governing plan documents, collective bargaining agreements and Transaction Documents. In the event of any inconsistency between this summary and an applicable plan document or arrangement, collective bargaining agreement or a Transaction Document, the terms of the plan documents and/or Transaction Documents, as applicable, will control.

In addition, nothing in these questions or answers (or the plans or arrangements being summarized) should be interpreted as an employment contract or as providing you with the right to employment for any period of time. This set of questions and answers does not create an entitlement to any benefit. This summary is only a high-level description of the benefits. Subject to certain limitations described in the relevant plan documents and agreements, Lorillard reserves the right to amend, modify change or terminate the plans and arrangements at any time.

What does this mean for collective bargaining agreements and union represented employees?

 

    For our union employees, our collective bargaining agreements will remain fully in effect through the closing date, and Imperial has committed to assuming the existing collective bargaining agreements.

Will hourly union employees be offered a position with RAI or Imperial, and will there be severance?

 

    At the close of the transaction, all hourly union employees will continue employment with Imperial. Because employment will continue with Imperial, severance will not be applicable.

Will Imperial recognize current service?

 

    Yes, Imperial will credit hourly union employees with current years of service at Lorillard for purposes of participation eligibility and vesting in benefits, such as for the calculation of vacation, sick days and severance, and also for purposes of determining the accrued pensions under the hourly pension plan that will transfer to Imperial in connection with the closing.

 

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What will happen to the hourly pension plan?

 

    The hourly pension plan will transfer to Imperial and will be maintained in accordance with the terms of the collective bargaining agreement.

Will my active employee benefits change?

 

    For hourly union employees, all benefits will continue as in effect before the closing date under the terms of the collective bargaining agreement.

Will my pension or other retirement benefits change?

 

    For hourly union employees, all benefits will continue as in effect before the closing date under the terms of the collective bargaining agreement.

Who will be responsible for current Lorillard retirees?

 

    As the hourly pension plan will transfer to Imperial, Imperial will be responsible for any current or future retirees under the hourly pension plan.

What happens with the hourly Profit Sharing Plan?

 

    The hourly Profit Sharing Plan will be transferred to Imperial and will be maintained in accordance with the terms of the collective bargaining agreement.

FORWARD LOOKING STATEMENTS

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which represent the current expectations and beliefs of management of Lorillard, Inc. (“Lorillard”) concerning the proposed transaction involving Reynolds American Inc. (“Reynolds American”) and Lorillard (the “transaction”) and other future events and their potential effects on Lorillard, including, but not limited to, statements relating to anticipated financial and operating results, the companies’ plans, objectives, expectations and intentions, cost savings and other statements, including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of Lorillard’s management, are not guarantees of future results and are subject to a significant number of risks and uncertainties. Actual results may differ materially from the results anticipated in these forward looking statements. Those factors include, without limitation: the ability to obtain the approval of the transaction by Lorillard’s stockholders; the ability to obtain governmental approvals of the transaction or to satisfy other conditions to the transaction on the proposed terms and timeframe; the possibility that the transaction does not close when expected or at all, or that the

 

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companies may be required to modify aspects of the transaction to achieve regulatory approval; the ability to realize the expected synergies resulting for the transaction in the amounts or in the timeframe anticipated; the ability to integrate Lorillard’s businesses into those of Reynolds American’s in a timely and cost-efficient manner; the impact of regulatory initiatives, including the regulation of cigarettes and electronic cigarettes and a possible ban or regulation of the use of menthol in cigarettes by the Food and Drug Administration, and compliance with governmental regulations; the outcome of pending or future litigation; health concerns, claims, regulations and other restrictions relating to the use of tobacco products and exposure to environmental tobacco smoke; the effect on pricing and consumption rates of legislation, including actual and potential federal and state excise tax increases, and tobacco litigation settlements; continued intense competition from other cigarette and electronic cigarette manufacturers; the continuing decline in volume in the domestic cigarette industry; changes in the price, quality or quantity of tobacco leaf and other raw materials available for use in Lorillard’s cigarettes; reliance on a limited number of suppliers for certain raw materials; and other risks and uncertainties, including those detailed from time to time in Lorillard’s periodic reports filed with the Securities and Exchange Commission, including Lorillard’s Current Reports on Form 8-K, Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. In particular, we refer you to “Item 1A. Risk Factors” of Lorillard’s 2013 Annual Report on Form 10-K and its Quarterly Report for the quarterly period ended March 31, 2014, which were filed with the Securities and Exchange Commission on February 21, 2014 and April 24, 2014, respectively, for additional information regarding the risks and uncertainties discussed above as well as additional risks and uncertainties that may affect Lorillard’s actual results. The forward-looking statements in this communication are qualified by these risk factors. Each statement speaks only as of the date of this communication (or any earlier date indicated in this communication) and Lorillard undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. Investors, potential investors and others should give careful consideration to these risks and uncertainties.

 

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This communication may be deemed to be solicitation material in respect of the proposed transaction involving Lorillard and Reynolds American. In connection with the proposed transaction, Reynolds American will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 that will include the joint proxy statement of Reynolds American and Lorillard that also constitutes a prospectus of Reynolds American. Lorillard and Reynolds American plan to mail the definitive joint proxy statement/prospectus to their respective stockholders in connection with the proposed transaction. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN

 

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IMPORTANT INFORMATION ABOUT LORILLARD, REYNOLDS AMERICAN, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and stockholders will be able to obtain free copies of the joint proxy statement/prospectus and other documents filed with the SEC by Lorillard and Reynolds American through the website maintained by the SEC at www.sec.gov. In addition, investors and stockholders will be able to obtain free copies of the definitive joint proxy statement/prospectus and other documents filed by Lorillard with the SEC by contacting Robert Bannon, CFA Director, Investor Relations, at investorrelations@lortobco.com or by calling (336) 335-7000.

Lorillard and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from Lorillard’s stockholders in respect of the proposed transaction that will be described in the joint proxy statement/prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of proxies from Lorillard’s stockholders in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, in Lorillard is set forth in Lorillard’s Annual Report on Form 10-K for the year ended December 31, 2013 and its Proxy Statement on Schedule 14A, dated April 4, 2014, which are filed with the SEC. Additional information regarding the interests of Lorillard’s directors and executive officers in the proposed transaction, which may be different than those of Lorillard’s stockholders generally, is contained in the joint proxy statement/prospectus when filed with the SEC.

 

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