Exhibit 10.2
RJR NABISCO HOLDINGS CORP.
1990 LONG TERM INCENTIVE PLAN
PERFORMANCE APPRECIATION RIGHT AGREEMENT
DATE OF GRANT: JANUARY 9, 1997
1. GRANT. Pursuant to the RJR Nabisco Holdings Corp. 1990 Long Term
Incentive Plan (the "Plan"), RJR Nabisco Holdings Corp. ("RJRN Holdings") hereby
grants the following Performance Appreciation Rights ("Appreciation Rights") to
FIRST_NAME LAST_NAME
("you", or the "Grantee")
subject to the terms and conditions of the Plan and this Agreement (the
"Agreement"):
A) (RN) RJR Nabisco, Inc. ("RJRN") Appreciation Rights
B) (TO) ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco Company ("RJRT") Appreciation
Rights
C) (RI) ▇.▇. ▇▇▇▇▇▇▇▇ International ("RJRI") Appreciation
Rights
D) (NAB) Nabisco Holdings Corp. ("Nabisco") Appreciation Rights
(TOTAL) Total
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2. DEFINITIONS. Capitalized terms have the meanings set forth in Exhibit
A to this Agreement or, if not defined therein, the Plan.
3. VALUATION.
(a) Each Appreciation Right represents the right to receive a cash payment
from RJRN Holdings in an amount (the "Payment Value") equal to the excess of the
Note Value for each type of Note at the time of exercise over its Initial Value.
Each of the RJRN, RJRT and RJRI Notes has an Initial Value of $32.00. Each
Nabisco Note has an Initial Value of $38.00. The Note Values are set
periodically pursuant to Section 3(b) below.
(b) As soon as practicable after the end of each year during the
Performance Period, the Committee will determine the Note Values as of December
31 of the
preceding year for each type of Note using the Performance Measures and
Valuation Formulas set forth on Exhibit B to this Agreement. The Committee will
set Note Values only once each year, so the Note Values will remain unchanged
during the year. The Committee will provide a written notice (the "Valuation
Notice") setting forth the Note Values and the Payment Values for Appreciation
Rights promptly after the Committee completes each valuation.
(c) In general, the Payment Value for each type of Appreciation Right will
be based on the Note Value in effect at the time of exercise. However, Payment
Values for Appreciation Rights exercised within thirty (30) days of the date the
Committee makes its regular annual determination of new Note Values pursuant to
Section 3(b) above will be calculated using the higher of the Note Values in
effect for the year of exercise or the Note Values in effect for the immediately
preceding year.
(d) If a Change of Control occurs, the Payment Value of each Appreciation
Right will equal the greater of (i) the Payment Value of the Appreciation Right
as determined pursuant to Sections 3(b) and 3(c) above, and (ii) the excess of
the Closing Price of the Common Stock on the date of the Change of Control over
$32.00.
4. VESTING.
Subject to Section 5 below, 33% of each type of Appreciation Right will
vest on each of December 31, 1997 and 1998 and 34% will vest on December 31,
1999, provided in each case that you remain actively employed by a Company or
one of its subsidiaries through the date of vesting.
5. RIGHTS IN EVENT OF TERMINATION OF EMPLOYMENT.
(a) Unless otherwise provided in a written employment or termination
agreement between you and your Employer, no additional Appreciation Rights shall
vest following your Termination of Active Employment for any reason other than a
Termination of Active Employment because of death, Permanent Disability,
Retirement or your involuntary termination by your Employer without Cause.
(b) In the event of your Termination of Active Employment because of
death, Permanent Disability, Retirement or involuntary termination by your
Employer without Cause, your unvested Appreciation Rights will vest immediately,
but only in proportion to the ratio of (i) the number of partial or complete
months of employment since January 1, 1997 to (ii) 36.
(c) If your employment is terminated by your Employer without Cause within
two years after a Change of Control, all of your Appreciation Rights will vest
immediately.
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(d) If your employment is terminated by your Employer for Cause, all of
your outstanding Appreciation Rights shall be cancelled and no longer
exercisable as of your Termination of Active Employment.
(e) You shall be deemed to have a "Permanent Disability" if you become
totally and permanently disabled (as defined in RJR Nabisco, Inc.'s Long Term
Disability Plan applicable to senior executive officers as in effect on the date
hereof), or if the Board of Directors or any committee thereof so determines.
(f) "Retirement" as used herein means retirement at age 65 or over, or
early retirement at age 55 or over with at least ten (10) years of service.
(g) "Termination of Active Employment" as used herein means termination
from active employment; it does not mean termination of payment or benefits at
the end of salary continuation or other form of severance or pay in lieu of
salary.
(h) If you have an employment or severance agreement, your employment
shall be deemed to have been terminated for "Cause" only as such term is defined
in your employment or severance agreement. If you do not have an employment or
severance agreement which defines the term "Cause", your employment shall be
deemed to have been terminated for "Cause" if the termination results from your
(a) criminal conduct, (b) deliberate continual refusal to perform employment
duties on substantially a full time basis, (c) deliberate and continual refusal
to act in accordance with any specific lawful instructions of an authorized
officer or employee more senior than you, or (d) deliberate misconduct which
could be materially damaging to your Employer or any of its business operations
without a reasonable good faith belief by you that such conduct was in the best
interests of your Employer. A termination of your employment shall not be
deemed for Cause hereunder unless the senior personnel executive of your
Employer shall confirm that any such termination is for Cause as defined
hereunder. Any voluntary termination by your in anticipation of an involuntary
termination of your employment for Cause shall be deemed to be a termination of
your employment for Cause.
6. EXERCISE.
(a) You may exercise your Appreciation Rights by giving a written notice
to RJRN Holdings in the manner prescribed by the Committee, which specifies the
type and number of Appreciation Rights being exercised. You must exercise all
of your vested Appreciation Rights for a Company unless you exercise at least
1,000 of its Appreciation Rights and, after the exercise, you still have at
least 1,000 vested Appreciation Rights in the Company
(b) If you do not exercise them earlier, Appreciation Rights that vest
pursuant to Sections 5(b) or 5(c) above will be deemed exercised as of the date
of the next regularly scheduled annual Valuation Notice. In the event of any
other Termination of Active Employment within the Performance Period, vested
Appreciation Rights will be deemed
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exercised as soon as administratively practicable following such Termination of
Active Employment.
(c) If you do not exercise them earlier, outstanding vested Appreciation
Rights will be deemed exercised as of the last day of the Performance Period.
7. PAYMENT OF AWARDS.
Promptly after your election to exercise an Appreciation Right is processed,
RJRN Holdings will pay you, in cash, the amount of its Payment Value unless you
have elected to defer receipt of the Payment Value pursuant to the provisions of
the Plan or as otherwise provided by the Committee. However, RJRN Holdings may
limit the frequency of the payments to one settlement date each month.
8. ADJUSTMENTS
The Committee may make an appropriate and equitable adjustment in the
number and/or Values of any type of Appreciation Rights if it determines that
conditions warrant such adjustment. Such conditions may include, but are not
limited to, changes in the economy, laws, regulations and generally accepted
accounting principles, as well as corporate events such as a merger,
consolidation, recapitalization, reclassification, stock split, stock dividend,
spinoff or other event. Any adjustment made by the Committee shall be final and
binding upon you, any Company and all other interested persons.
9. TAXES
Any taxes required by federal, state or local laws to be withheld by the
Company in respect of the grant or exercise of Appreciation Rights hereunder
shall be paid to the Company by you by the time such taxes are required to be
paid or deposited by the Company. You hereby authorize the necessary
withholding by the Company to satisfy such tax withholding obligations prior to
delivery of the Payment Value.
10. MISCELLANEOUS.
(a) The Committee has the power to interpret this Agreement and, together
with the officers of RJRN Holdings and its subsidiaries, complete discretion in
making determinations and taking action pursuant to the Agreement. All
interpretations, determinations and actions by the Committee and the officers
and employees to whom they delegate these responsibilities will be final,
conclusive and binding on all parties.
(b) This Agreement is subject to the Plan, a copy of which is attached.
The Board may amend the Plan and the Committee may amend this Agreement at any
time and in any way, except that any amendment of the Plan or this Agreement
that would impair your rights hereunder may not be made without your consent.
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(c) This Agreement and the award to you of Appreciation Rights does not
give you any right to employment or limit the ability of RJRN Holdings and its
subsidiaries to terminate your employment at any time with or without cause.
(d) Except for the payments to your beneficiaries contemplated by the
Plan, you may not transfer, pledge or encumber any benefit hereunder. Except as
required by law, your creditors may not attach or seize any such benefit.
(e) Except to the extent that you receive different instructions from the
Companies, you should send notices concerning this Agreement and the
Appreciation Rights to The Secretary, RJR Nabisco Holdings Corp., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. RJRN Holdings will send any notices to
your office or to your address as shown on the records of the Companies.
IN WITNESS WHEREOF, RJRN Holdings and the Grantee have executed this
Agreement as of the Date of Grant.
RJR NABISCO HOLDINGS CORP.
By:
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Authorized Signatory
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GRANTEE
Grantee's Taxpayer Identification Number:
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Date:
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Grantee's Home Address:
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EXHIBIT A
DEFINITIONS
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BOARD OF DIRECTORS. The Board of Directors of RJRN Holdings.
CLOSING PRICE. The closing sale price of the Common Stock as shown on the
New York Stock Exchange consolidated tape and reported in THE WALL STREET
JOURNAL.
COMMITTEE. The Compensation Committee of the Board of Directors.
COMMON STOCK. The Common Stock of RJRN Holdings.
COMPANIES. ▇▇▇▇, ▇▇▇▇, ▇▇▇▇ and Nabisco.
DATE OF GRANT. The date of this Agreement.
EMPLOYER. The Company (including any subsidiary) with which you are
employed.
INITIAL VALUE. The initial values assigned to the Notes as of January 1,
1997, as set forth in Section 3(a).
NOTES. The Performance Notes that RJRN (or Nabisco, in the case of
Nabisco Performance Notes) may issue to directors, officers and employees of
the Companies and their subsidiaries during the first 90 days of 1998
pursuant to its Annual Incentive Award Plan.
NOTE VALUE. The value of a Note as determined pursuant to Section 3(b).
PAYMENT VALUE. For any Appreciation Right, the excess of its Note Value
over its Initial Value.
PERFORMANCE MEASURES. The performance objectives for a Company that are
used in Valuation Formulas to determine Payment Values for the Company's
Notes.
PERFORMANCE PERIOD. January 1, 1997 through December 31, 2001.
VALUATION FORMULAS. The formulas used to value Notes as of December 31 in
each year in the Performance Period.
VALUATION NOTICE. The notice setting forth Note Values and Payment Values
described in Section 3(c).
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