EXHIBIT 10-1

The Procter & Gamble 2001 Stock and Incentive Compensation Plan

Related Correspondence and Terms and Conditions

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LOGO [g25748ex10_1.jpg]

 

  [GRANT_DATE]   [GLOBALID]

[FIRST_NAME] [MIDDLE_NAME] [LAST_NAME]]

Subject: NON-STATUTORY STOCK OPTION SERIES 09-AA

In recognition of your contributions to the future success of the business, The
Procter & Gamble Company (“Company”) hereby grants to you an option to purchase
shares of Procter & Gamble Common Stock as follows:

 

Grant Value:    $[DELIVERED_GRANT_VALUE] Option Price per Share:   
$[STOCK_PRCE] Number of Shares:    [SHARES] Date of Grant:    [GRANT_DATE]
Expiration of Option:    27 February 2019 Option Vest Date:    100% after 27
February 2012 Acceptance Deadline:    28 April 2009

This stock option is granted in accordance with and subject to the terms of The
Procter & Gamble 2001 Stock and Incentive Compensation Plan (including any
applicable sub-plan) (the “Plan”), the Regulations of the Compensation and
Leadership Development Committee of the Board of Directors (“Committee”), and
the Exercise Instructions in place as may be revised from time to time.

You may access, download and/or print the terms, or any portion thereof, of the
Plan by activating this hyperlink: The Procter & Gamble 2001 Stock and Incentive
Compensation Plan. Specific portions of the Plan are also hyperlinked below for
your ease in reviewing. Nonetheless, if you would prefer to receive a paper copy
of The Procter & Gamble 2001 Stock and Incentive Compensation Plan, please send
a written request via email to Execcomp.IM@pg.com. Please understand that you
will continue to receive future Plan materials and information via electronic
mail even though you may have requested a paper copy.

The option is not transferable other than by will or the laws of descent and
distribution and is exercisable during your life only by you. This option will
become void upon any separation (including retirement) from the Company or any
of its subsidiaries within 6 months of the grant date. This option may also
become void upon separation from the Company or any of its subsidiaries at any
time later than 6 months after the grant date (see Article G, paragraph 4 of the
Plan). For the purposes of this option, separation from the Company or any of
its subsidiaries and termination of employment will be effective as of the date
that you are no longer actively employed and will not be extended by any notice
period required under local law.

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Please note that when the issue or transfer of the Common Stock covered by this
option may, in the opinion of the Company, conflict or be inconsistent with any
applicable law or regulation of any governmental agency, the Company reserves
the right to refuse to issue or transfer said Common Stock and that any
outstanding options may be suspended or terminated if you engage in actions that
are significantly contrary to the best interests of the Company or any of its
subsidiaries.

This option to purchase shares of Common Stock of the Company is subject to the
Employee Acknowledgement and Consent Form below and to the terms of the Plan,
with which you acknowledge you are familiar by accepting this award, including
the non-compete provision and other terms of Article F. The option is also
subject to and bound by the actions of the Compensation and Leadership
Development Committee and of the Company’s Board of Directors. This option grant
and the Plan together constitute an agreement between the Company and you in
accordance with the terms thereof and hereof, and no other understandings and/or
agreements have been entered by you with the Company regarding this specific
stock option grant. Any legal action related to this option, including Article
F, may be brought in any federal or state court located in Hamilton County,
Ohio, USA, and you hereby agree to accept the jurisdiction of these courts and
consent to service of process from said courts solely for legal actions related
to this option grant.

Under IRS standards of professional practice, certain tax advice must meet
requirements as to form and substance. To assure compliance with these
standards, we disclose to you that this communication is not intended or written
to be used, and cannot be used, for the purpose of avoiding penalties or
promoting, marketing, or recommending to another party any transaction or matter
addressed herein.

 

THE PROCTER & GAMBLE COMPANY Steven W. Jemison Secretary for the Compensation
and Leadership Development Committee

ATTACHMENTS

To Accept Your Stock Option

Read and check each of the boxes below:

 

¨

 

I have read, understand and agree to be bound by each of:

  the terms of this letter; The Procter & Gamble 2001 Stock and Incentive
Compensation Plan; and the Employee Acknowledgement and Consent Form (below).

¨

  I accept the stock option grant detailed above. (To accept this option, you
must also check the box above.)

To Reject Your Stock Option

Read and check the box below:

 

¨

  I have read and understand the terms noted above. I do not agree to be bound
by these terms, and hereby reject the stock option grant detailed above.  
SUBMIT

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Employee Acknowledgement and Consent Form

I understand that I am eligible to receive a grant of stock options or
restricted stock units (“RSUs”) under The Procter & Gamble 2001 Stock and
Incentive Compensation Plan or The Gillette Company 2004 Long Term Incentive
Plan (together, referred to as the “Plans”).

Data Privacy

I hereby explicitly and unambiguously consent to the collection, use and
transfer, in electronic or other form, of my personal data as described in this
document by and among, as applicable, my employer (“Employer”) and The Procter &
Gamble Company and its subsidiaries and affiliates (“P&G”) for the exclusive
purpose of implementing, administering and managing my participation in the
Plans.

I understand that P&G and my Employer hold certain personal information about
me, including, but not limited to, my name, home address and telephone number,
date of birth, social insurance number or other identification number, salary,
nationality, job title, any shares of stock or directorships held in P&G,
details of all options or RSUs or any other entitlement to shares of stock
awarded, canceled, exercised, vested, unvested or outstanding in my favor, for
the purpose of implementing, administering and managing the Plans (“Data”). I
understand that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plans, that these
recipients may be located in my country or elsewhere, and that the recipient’s
country may have different data privacy laws and protections than my country. I
understand that I may request a list with the names and addresses of any
potential recipients of the Data by contacting my local human resources
representative. I authorize the recipients to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing my participation in the Plans,
including any requisite transfer of such Data as may be required to a broker or
other third party with whom I may elect to deposit any shares of stock acquired
upon exercise of the option or settlement of the RSU. I understand that Data
will be held only as long as is necessary to implement, administer and manage my
participation in the Plans. I understand that I may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data or refuse or withdraw the consents herein, in
any case without cost, by contacting in writing my local human resources
representative. I understand, however, that refusing or withdrawing my consent
may affect my ability to participate in the Plans. For more information on the
consequences of my refusal to consent or withdrawal of consent, I understand
that I may contact my local human resources representative.

Nature of Grant

By completing this form and accepting the grant of the stock options or RSUs
evidenced hereby, I acknowledge that: i) the Plans are established voluntarily
by The Procter & Gamble Company, it is discretionary in nature and it may be
amended, suspended or terminated at any time; ii) the grant of options or RSUs
under the Plans is voluntary and occasional and does not create any contractual
or other right to receive future grants of options or RSUs, or benefits in lieu
of options or RSUs, even if options or RSUs have been granted repeatedly in the
past; iii) all decisions with respect to future grants of options or RSUs, if
any, will be at the sole discretion of P&G; iv) my participation in the Plans is
voluntary; v) the option or RSU is an extraordinary item and not part of normal
or expected compensation or salary for any purposes including, but not limited
to, calculating any termination, severance, resignation, redundancy, end of
service payments, bonuses, long-service awards, pension or retirement benefits
or similar payments; vi) in the event that my employer is not P&G, the grant of
options or RSUs will not be interpreted to form an employment relationship with
P&G; and furthermore, the grant of options or RSUs will not be interpreted to
form an employment contract with my Employer; vii) the future value of the
shares purchased under the Plans is unknown and cannot be predicted with
certainty, may increase or decrease in value, even below the exercise price and,
if the underlying shares do not increase in value, the

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option will have no value; iix) my participation in the Plans shall not create a
right to further employment with my Employer and shall not interfere with the
ability of my Employer to terminate my employment relationship at any time, with
or without cause; ix) and no claim or entitlement to compensation or damages
arises from the termination of the option or RSU or the diminution in value of
the option or RSU or shares purchased and I irrevocably release P&G and my
Employer from any such claim that may arise.

Responsibility for Taxes

Regardless of any action P&G or my Employer takes with respect to any or all
income tax, social insurance, payroll tax, payment on account or other
tax-related withholding (“Tax-Related Items”), I acknowledge that the ultimate
liability for all Tax-Related Items is and remains my responsibility and that
P&G and/or my Employer (1) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the option
or RSU grant, including the grant, vesting or exercise of the option, settlement
of the shares from the RSU, the subsequent sale of shares acquired and the
receipt of any dividends or the potential impact of current or future tax
legislation in any jurisdiction; and (2) do not commit to structure the terms of
the grant or any aspect of the option or RSU to reduce or eliminate my liability
for Tax-Related Items.

Prior to exercise of the option or settlement of the shares from the RSU, I
shall pay or make adequate arrangements satisfactory to P&G and/or my Employer
to satisfy all withholding and payment on account obligations of P&G and/or my
Employer. In this regard, I authorize P&G and/or my Employer to withhold all
applicable Tax-Related Items from my wages or other cash compensation paid to me
by P&G and/or my Employer or from proceeds of the sale of the shares.
Alternatively, or in addition, if permissible under local law, P&G may (1) sell
or arrange for the sale of shares that I acquire to meet the withholding
obligation for Tax-Related Items, and/or (2) withhold in shares, provided that
P&G only withholds the amount of shares necessary to satisfy the minimum
withholding amount. Finally, I shall pay to P&G or my Employer any amount of
Tax-Related Items that P&G or my Employer may be required to withhold as a
result of my participation in the Plans or my purchase of shares that cannot be
satisfied by the means previously described. P&G may refuse to honor the
exercise and refuse to deliver the shares if I fail to comply with my
obligations in connection with the Tax-Related Items as described in this
section.

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Appendix 1: Payment Preference Materials for Key Manager Awards

[DATE]

[NAME]

Subject: Preferences for [YEAR] Key Manager Payments

Your choices for the awards are:

February [YEAR] Key Manager Award

 

  •  

Stock Options

 

  •  

Restricted Stock Units (RSUs) (0%, 25% or 50%)

Attached you will find an election form to be returned to [NAME].

Please keep the following in mind as you consider your choices:

 

  •  

It is recommended that you consult legal/tax/financial advisors to determine the
appropriate award form(s) for your personal situation.

 

  •  

While your selection will be given consideration, it is not binding on the
Company until approved by the Compensation & Leadership Development Committee of
the Board of Directors.

IF YOU MISS THE [DATE] DEADLINE, YOU WILL RECEIVE THE DEFAULT (STOCK OPTIONS).

[NAME]

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[YEAR] EXECUTIVE COMPENSATION AWARD FORM PREFERENCES

[YEAR] Key Manager Long-Term Incentive Award Payable [DATE] [YEAR] Preference
Selection

 

Stock Options                %   

Restricted Stock Units (RSUs)

Choices are 0%, 25% or 50%

               %

 

(maximum of 50%)

   Shares will deliver 100% in 5 years ([DATE]). Key Manager RSUs have no
dividend equivalents and no deferral past 5 years. Total          100%   

 

  •  

You must be an active employee as of the award date to receive any non-cash
award

 

  •  

All elections are irrevocable after [DATE].

 

 

 

   

 

    Signature     Date  

Return form to [NAME]

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Appendix 2: Key Manager Individual Grant Summary

Name:     [NAME]

 

Your [YEAR] Key Manager Total Grant Value is:     [Grant Value]  
You elected to receive your 2008 Key Manager Award as:     [    ]%    Stock
Options     [    ]%    Restricted Stock Units (RSUs)

You must accept this award electronically prior to [DATE] or it will be
forfeited.

Grant Details:

 

Stock Options

Grant Date:   [DATE] Grant Value:   [SO GRANT VALUE] Number of Option Shares:  
[NUMBER] Grant Price:   [PRICE] Vest Date:   [DATE] Expiration Date:   [DATE]

Restricted Stock Units

Number of RSUs:   [NUMBER] Date Shares Deliver:   [DATE]

Grant Calculation:

The closing stock price on the grant date of [DATE] was [PRICE]

 

Number of Stock Options  

=  Total Grant Value

 

÷  Grant Price

 

x  % stock options elected

Number of RSUs  

=  Total Grant Value

 

÷  Grant Price

 

x  % RSUs elected

 

÷  [conversion factor]

  

As a Recipient, what can you expect next?

 

  •  

Your manager will release your grant in the system and you will receive an email
message from [NAME] that contains:

 

  •  

a link to instructions on what you need to do to accept your grant

 

  •  

a link to your official Grant Letter where you must electronically accept or
reject your grant

 

  •  

Grants not accepted by [DATE] will be forfeited.

 

  •  

You will receive an email confirmation from [NAME] when you have successfully
accepted or rejected the grant.

 

  •  

Accepted grants appear in your personal stock option account (My Stock
Options/Future Shares found on my.PG.com/Employee Resources) within 48 hours.

This summary is for information purposes only. This summary does not replace
your official grant letter that is being sent to you electronically to which you
must respond.

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Appendix 3: Grant Letter for Key Manager Award in Stock Options and Stock
Appreciation Rights

 

[DATE]    [NAME]    Subject:    Non-Statutory Stock Option Series xx-xx

In recognition of your contributions to the success of the business, the
Procter & Gamble Company (“Company”) hereby grants to you an option to purchase
shares of the Procter & Gamble Common Stock as follows:

 

Grant Value:    [NUMBER] Option Price per Share:    [NUMBER] Number of Shares:
   [NUMBER] Date of Grant:    [DATE] Expiration of Option:    [DATE] Option
Exercisable:    [NUMBER]% after [DATE] Acceptance Deadline:    [DATE]

This stock option is granted in accordance with and subject to the terms of The
Procter & Gamble 2001 Stock and Incentive Compensation Plan (including any
applicable sub-plan) (the “Plan”), the Regulations of the Compensation &
Leadership Development Committee of the Board of Directors (the “Committee”),
and the Exercise Instructions in place as may be revised from time to time.

You may access, download and/or print the terms, or any portion thereof, of the
Plan by activating this hyperlink [LINK]. Nonetheless, if you would prefer to
receive a paper copy of The Procter & Gamble 2001 Stock and Incentive
Compensation Plan, please send a written request via email to [EMAIL ADDRESS].
Please understand that you will continue to receive future Plan materials and
information via electronic mail even though you may have requested a paper copy.

The option is not transferable other than by will or the laws of descent and
distribution and is exercisable during your life only by you. This option will
become void upon any separation (including retirement) from the company or any
of its subsidiaries within 6 months of the grant date. This option may also
become void upon separation from the Company or any of its subsidiaries at any
time later than 6 months after the grant date (see Article G, paragraph 4 of the
Plan). For the purposes of this option, separation from the company or any of
its subsidiaries and termination of employment will be effective as of the date
that you are no longer actively employed and will not be extended by any notice
period required under local law.

Please note that when the issue or transfer of the Common Stock covered by this
option may, in the opinion of the Company, conflict or be inconsistent with any
applicable law or regulation of any governmental agency, the Company reserves
the right to refuse to issue or transfer said Common Stock and that any
outstanding stock options may be suspended or terminated if you engage in
actions that are significantly contrary to the best interests of the Company or
any of its subsidiaries.

This option to purchase shares of Common Stock of the Company is subject to the
Employee Acknowledgement and Consent Form below and to the terms of the Plan,
with which you acknowledge you are familiar by accepting this award, including
the non-compete provision and other terms of Article F. The option is also
subject to and bound by the actions of the compensation and Leadership
Development Committee and of the Company’s Board of Directors. This option grant
and the Plan together constitute an agreement between the Company and you in
accordance with the terms thereof and hereof, and no other understandings and/or
agreements have been entered by you with the company regarding this specific
stock option grant. Any legal action related to this option, including Article
F, may be brought in any federal or state court located in Hamilton County,
Ohio, USA, and you hereby agree to accept the jurisdiction of these courts and
consent to service of process from said courts solely for legal actions related
to this option grant.

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Under IRS standards of professional practice, certain tax advice must meet
requirements as to form and substance. To assure compliance with these
standards, we disclose to you that this communication is not intended or written
to be used, and cannot be used, for the purpose of avoiding penalties, or
promoting, marketing or recommending to another party any transaction or matter
addressed herein.

 

The Procter & Gamble Company [NAME]

To Accept Your Stock Option

Read and check each of the boxes below:

 

¨ I have read, understand and agree to be bound by each of:

The terms of this letter; The Procter & Gamble 2001 Stock and Incentive Plan;
and the Employee Acknowledgement and Consent Form.

 

¨ I accept the stock option grant detailed above. (To accept this option, you
must also check the box above.)

To Reject Your Stock Option

Read and check each of the boxes below:

 

¨ I have read and understand the terms noted above. I do not agree to be bound
by these terms, and hereby reject the stock option grant detailed above.

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Appendix 4: Grant Letter for Key Manager Award in RSUs

 

[DATE]    [NAME]   

Subject:

   Award of Restricted Stock Units Series xx-KM-RSU

In recognition of your contributions to the future success of the business, The
Procter & Gamble Company (“Company”) hereby grants to your Restricted Stock
Units (“RSUs”) as follows:

 

Number of Restricted Stock Units:    [NUMBER] Date of Grant:    [DATE]
Forfeiture Date:    [DATE] Settlement Date (Shares Delivered on):    [DATE]
Acceptance Deadline:    [DATE]

These RSUs are granted in accordance with and subject to the terms of The
Procter & Gamble 2001 Stock and Incentive Compensation Plan (including any
applicable sub-plan) (“the Plan”), the Regulations of the Compensation and
Leadership Development Committee of the Board of Directors (“Committee”), the
Settlement Instructions in place as may be revised from time to time, and the
attached Statement of Terms and Conditions Form [CODE].

You may access, download and/or print the terms, or any portion thereof, of the
Plan by activating this hyperlink: [LINK]. Nonetheless, if you would prefer to
receive a paper copy of The Procter & Gamble 2001 Stock and Incentive
Compensation Plan, please send a written request via email to [EMAIL ADDRESS].
Please understand that you will continue to receive future Plan materials and
information via electronic mail even though you may have requested a paper copy.

RSUs are not transferable other than by will or the laws of descent and
distribution. RSUs will become void upon any separation (including retirement)
from the company or any of its subsidiaries within 6 months of the grant date.
RSUs may also become void upon separation from the Company or any of its
subsidiaries at any time later than 6 months after the grant date (see
Section 2(b) of the Terms and Conditions Form [FORM]). For the purposes of this
RSU grant, separation from the company or any of its subsidiaries and
termination of employment will be effective as of the date that you are no
longer actively employed and will not be extended by any notice period required
under local law.

Please note that when the issue or transfer of the Common Stock covered by this
RSU grant may, in the opinion of the Company, conflict or be inconsistent with
any applicable law or regulation of any governmental agency, the Company
reserves the right to refuse to issue or transfer said Common Stock and that any
outstanding RSUs may be suspended or terminated if you engage in actions that
are significantly contrary to the best interests of the Company or any of its
subsidiaries.

RSUs granted hereunder are subject to the Employee Acknowledgement and Consent
Form below and to the terms of the Plan, and the attached statement of Terms and
Conditions Form [FORM] with which you acknowledge you are familiar by accepting
this award, including the non-compete provision and other terms of Section 3(a)
of Terms and Conditions Form [FORM]. These RSUs are also subject to and bound by
the actions of the compensation and Leadership Development Committee and of the
Company’s Board of Directors. This RSU grant, the Plan, and the attached
statement of Terms and Conditions Form [FORM] together constitute an agreement
between the Company and you in accordance with the terms thereof and hereof, and
no other understandings and/or agreements have been entered by you with the
company regarding these RSUs. Any legal

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action related to these RSUs, including the non-compete provisions, may be
brought in any federal or state court located in Hamilton County, Ohio, USA, and
you hereby agree to accept the jurisdiction of these courts and consent to
service of process from said courts solely for legal actions related to this RSU
grant.

Under IRS standards of professional practice, certain tax advice must meet
requirements as to form and substance. To assure compliance with these
standards, we disclose to you that this communication is not intended or written
to be used, and cannot be used, for the purpose of avoiding penalties, or
promoting, marketing or recommending to another party any transaction or

 

THE PROCTER & GAMBLE COMPANY [NAME]

To Accept Your Restricted Stock Unit Grant

Read and check each of the boxes below:

 

¨ I have read, understand and agree to be bound by each of:

The terms of this letter; The Procter & Gamble 2001 Stock and Incentive Plan;
Terms and Conditions Form [FORM] and the Employee Acknowledgement and Consent
Form.

 

¨ I accept the Restricted Stock Unit grant detailed above. (To accept this
option, you must also check the box above.)

To Reject Your Restricted Stock Unit Grant

Read and check each of the boxes below:

 

¨ I have read and understand the terms noted above. I do not agree to be bound
by these terms, and hereby reject the Restricted Stock Unit grant detailed
above.

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Form RTN

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Data” has the meaning described in Section 10;

(b) “Disability” means termination of employment under the permanent disability
provision of any retirement plan of Procter & Gamble;

(c) “Dividend Equivalents” has the meaning described in Section 4;

(d) “Forfeiture Date” is the date identified as such in your Award Letter;

(e) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(f) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(g) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(h) “Post-Forfeiture Period” means the period from the Forfeiture Date until the
Original Settlement Date;

(i) “Procter & Gamble” means the Company and/or its Subsidiaries;

(j) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the Original Settlement Date;

(k) “Separation from Service” shall have the meaning provided under Section 409A
of the Code and regulations thereto.

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit (including all rights to receive
Dividend Equivalents).

 

12-31-08

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Form RTN

 

(b) During the Forfeiture Period, your Restricted Stock Units (including all
rights to receive Dividend Equivalents) will be forfeited and cancelled if you
leave your employment with Procter & Gamble for any reason, except due to:
(i) your Disability; (ii) death; or (iii) in certain circumstances, your Special
Separation. In the event of your death or Disability during the Forfeiture
Period, your Forfeiture Date will automatically and immediately become, without
any further action by you or the Company, the date of your death or Disability.
In the event of your Special Separation during the Forfeiture Period, your
Restricted Stock Units will be forfeited and cancelled unless otherwise agreed
to in writing by the Company.

(c) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units and/or Dividend Equivalents, your
Original Settlement Date will automatically and immediately become, without any
further action by you or the Company, the date of your death or Disability, as
applicable.

(d) Upon the occurrence of a Change in Control, the Forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date will become the date the
Change in Control occurred, and the award will be settled in accordance with the
terms of the Plan. If the Change in Control does not meet the Section 409A
requirements, your Original Settlement Date will not be changed.

(e) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, or to settle your Restricted Stock Units, including requiring you to do
so by means of electronic signature, or charging you an administrative fee for
doing so.

(f) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect and you will cease to receive Dividend
Equivalents associated with the Restricted Stock Units.

 

3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

 

12-31-08

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Form RTN

 

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is, by its nature, irreparable because,
among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. You agree that any interim or final equitable relief
entered by a court of competent jurisdiction will, at the request of Procter &
Gamble, be entered on consent and enforced by any court having jurisdiction over
you, without prejudice to any rights you or Procter & Gamble may have to appeal
from the proceedings which resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

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Form RTN

 

4. Dividend Equivalents.

As a holder of Restricted Stock Units, during the period from the Grant Date
until the Original Settlement Date, each time a cash dividend or other cash
distribution is paid with respect to Common Stock, you will receive additional
Restricted Stock Units (“Dividend Equivalents”). The number of such additional
Restricted Stock Units will be determined as follows: multiply the number of
Restricted Stock Units currently held by the per share amount of the cash
dividend or other cash distribution on the Common Stock, and then divide the
result by the price of the Common Stock on the date of the dividend or
distribution. These Dividend Equivalent Restricted Stock Units will be subject
to the same terms and conditions as the original Restricted Stock Units that
gave rise to them, including forfeiture and settlement terms, except that if
there is a fractional number of Dividend Equivalent Restricted Stock Units on
the date they are to be settled, you will receive one share of Common Stock for
the fractional Dividend Equivalent Restricted Stock Units.

 

5. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

6. Adjustments in Case of Stock Dividends, Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering, share
exchange, reclassification, distribution, spin-off, or other change affecting
the corporate structure, capitalization or Common Stock, the number of
Restricted Stock Units you hold will be adjusted appropriately and equitably to
prevent dilution or enlargement of your rights.

 

7. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units or Dividend
Equivalents, the Committee may require you to make such arrangements as
Procter & Gamble may deem appropriate for the payment of such taxes required to
be withheld, including without limitation, relinquishment of some of the shares
of Common Stock that would otherwise be given to you. However, regardless of any
action taken by Procter & Gamble with respect to any income tax, social
insurance, payroll tax, or other tax, by accepting a Restricted Stock Unit or
Dividend Equivalent, you acknowledge that the ultimate liability for any such
tax owed by you is and remains your responsibility, and that Procter & Gamble
makes no representations about the tax treatment of your Restricted Stock Units
or Dividend Equivalents, and does not commit to structure any aspect of the
Restricted Stock Units or Dividend Equivalents to reduce or eliminate your tax
liability.

 

8. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

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Form RTN

 

9. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the sole discretion of
the Company; (iv) your participation in the Plan is voluntary; (v) Restricted
Stock Units are an extraordinary item and not part of normal or expected
compensation or salary for any purpose, including without limitation calculating
any termination, severance, resignation, redundancy, or end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments; (vi) in the event that your employer is not the Company, the award of
Restricted Stock Units will not be interpreted to form an employment
relationship with the Company; and, furthermore, the award of Restricted Stock
Units will not be interpreted to form an employment contract with any Procter &
Gamble entity; (vii) the future value of Common Stock is unknown and cannot be
predicted with certainty; and (viii) no claim or entitlement to compensation or
damages arises from termination or forfeiture of Restricted Stock Units, or
diminution in value of Restricted Stock Units or Common Stock received in
settlement thereof, and you irrevocably release Procter & Gamble from any such
claim that may arise.

 

10. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be

 

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Form RTN

 

located in your country or elsewhere, and that the recipient’s country may have
different data privacy laws and protections than your country. You understand
that you may request a list with the names and addresses of any potential
recipients of Data by contacting your local human resources representative. You
authorize the recipients to receive, possess, use, retain and transfer the Data,
in electronic or other form, for the purposes of implementing, administering and
managing your participation in the Plan, including any requisite transfer of
such Data to any broker or other third party with whom you may elect to deposit
any shares of Common Stock in connection with the settlement of your Restricted
Stock Units. You understand that Data will be held only as long as is necessary
to implement, administer and manage your participation in the plan. You
understand that you may, at any time, view Data, request additional information
about the storage and processing of Data, require any necessary amendments to
Data, or refuse or withdraw the consents contained in this paragraph, in any
case without cost, by contacting in writing your local human resources
representative. You understand, however, that refusing or withdrawing your
consent may affect your ability to participate in the Plan. For more information
on the consequences of your refusal to consent or withdrawal of consent, you
understand that you may contact your local human resources representative.

 

11. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

  

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

12. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) the
Company and its successors and assigns; and (b) you and, if applicable, the
representative of your estate.

 

13. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

14. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

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Form RTN

 

15. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

12-31-08

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Form KM

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR KEY MANAGER RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Data” has the meaning described in Section 9;

(b) “Forfeiture Date” is the date identified as such in your Award Letter;

(c) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(d) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(e) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(f) “Procter & Gamble” means the Company and/or its Subsidiaries;

(g) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the Original Settlement Date;

(h) “Separation from Service” shall have the meaning provided under Section 409A
of the code and regulations thereto.

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit.

(b) During the Forfeiture Period, your Restricted Stock Units will be forfeited
and cancelled if you leave your employment with Procter & Gamble for any reason,
except due to: (i) your Disability; (ii) death; (iii) Retirement in accordance
with the provisions of any appropriate Retirement plan of Procter & Gamble that
occurs more than six months from the Grant Date; or (iv) Special Separation that
occurs more than six months from

 

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Form KM

 

the Grant Date. In the event of your death or Disability during the Forfeiture
Period, your Forfeiture Date will automatically and immediately become, without
any further action by you or the Company, the date of your death or Disability.
In the event of your Retirement or Special Separation that occurs more than six
months from the Grant Date, your Forfeiture Date will automatically and
immediately become, without any further action by you or the Company, the date
of your Retirement or Special Separation.

(c) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units, your Original Settlement Date will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(d) Upon the occurrence of a Change in Control, the Forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date will become the date the
Change in Control occurred, and the award will be settled in accordance with the
terms of the Plan. If the Change in Control does not meet the Section 409A
requirements, your Original Settlement Date will not be changed.

(e) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, or to settle your Restricted Stock Units, including requiring you to do
so by means of electronic signature, or charging you an administrative fee for
doing so.

(f) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect.

 

3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

 

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Form KM

 

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is, by its nature, irreparable because,
among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. You agree that any interim or final equitable relief
entered by a court of competent jurisdiction will, at the request of Procter &
Gamble, be entered on consent and enforced by any court having jurisdiction over
you, without prejudice to any rights you or Procter & Gamble may have to appeal
from the proceedings which resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

4. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

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Form KM

 

5. Adjustments in Case of Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split,
combination of shares, merger, consolidation, rights offering, share exchange,
reclassification, distribution, spin-off, or other change affecting the
corporate structure, capitalization or Common Stock, the number of Restricted
Stock Units you hold will be adjusted appropriately and equitably to prevent
dilution or enlargement of your rights.

 

6. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units, the Committee may
require you to make such arrangements as Procter & Gamble may deem appropriate
for the payment of such taxes required to be withheld, including without
limitation, relinquishment of some of the shares of Common Stock that would
otherwise be given to you. However, regardless of any action taken by Procter &
Gamble with respect to any income tax, social insurance, payroll tax, or other
tax, by accepting a Restricted Stock Unit, you acknowledge that the ultimate
liability for any such tax owed by you is and remains your responsibility, and
that Procter & Gamble makes no representations about the tax treatment of your
Restricted Stock Units, and does not commit to structure any aspect of the
Restricted Stock Units to reduce or eliminate your tax liability.

 

7. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

8. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the

 

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Form KM

 

sole discretion of the Company; (iv) your participation in the Plan is
voluntary; (v) Restricted Stock Units are an extraordinary item and not part of
normal or expected compensation or salary for any purpose, including without
limitation calculating any termination, severance, resignation, redundancy, or
end-of-service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments; (vi) in the event that your employer is not the
Company, the award of Restricted Stock Units will not be interpreted to form an
employment relationship with the Company; and, furthermore, the award of
Restricted Stock Units will not be interpreted to form an employment contract
with any Procter & Gamble entity; (vii) the future value of Common Stock is
unknown and cannot be predicted with certainty; and (viii) no claim or
entitlement to compensation or damages arises from termination or forfeiture of
Restricted Stock Units, or diminution in value of Restricted Stock Units or
Common Stock received in settlement thereof, and you irrevocably release
Procter & Gamble from any such claim that may arise.

 

9. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

10. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

  

 

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Form KM

 

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

11. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) the
Company and its successors and assigns; and (b) you and, if applicable, the
representative of your estate.

 

12. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

13. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

14. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

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Form KMG

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR KEY MANAGER RESTRICTED STOCK UNITS

THE GILLETTE COMPANY 2004 LONG-TERM INCENTIVE PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Gillette Company 2004
Long-Term Incentive Plan (the “Plan”), and the following terms will have the
following meanings.

(a) “Data” has the meaning described in Section 9;

(b) “Forfeiture Date” is the date identified as such in your Award Letter;

(c) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(d) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(e) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(f) “Procter & Gamble” means the Company and/or its Subsidiaries;

(g) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the Original Settlement Date;

(h) “Separation from Service” shall have the meaning provided under Section 409A
of the code and regulations thereto.

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit.

(b) During the Forfeiture Period, your Restricted Stock Units will be forfeited
and cancelled if you leave your employment with Procter & Gamble for any reason,
except due to: (i) your Disability; (ii) death; (iii) Retirement in accordance
with the provisions of any appropriate Retirement plan of Procter & Gamble that
occurs more than six months from the Grant Date; or (iv) Special Separation that
occurs more than six months from

 

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Form KMG

 

the Grant Date. In the event of your death or Disability during the Forfeiture
Period, your Forfeiture Date will automatically and immediately become, without
any further action by you or the Company, the date of your death or Disability.
In the event of your Retirement or Special Separation that occurs more than six
months from the Grant Date, your Forfeiture Date will automatically and
immediately become, without any further action by you or the Company, the date
of your Retirement or Special Separation.

(c) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units, your Original Settlement Date will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(d) Upon the occurrence of a Change in Control, the Forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date will become the date the
Change in Control occurred, and the award will be settled in accordance with the
terms of the Plan. If the Change in Control does not meet the Section 409A
requirements, your Original Settlement Date will not be changed.

(e) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, or to settle your Restricted Stock Units, including requiring you to do
so by means of electronic signature, or charging you an administrative fee for
doing so.

(f) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect.

 

3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

 

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Form KMG

 

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is, by its nature, irreparable because,
among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. You agree that any interim or final equitable relief
entered by a court of competent jurisdiction will, at the request of Procter &
Gamble, be entered on consent and enforced by any court having jurisdiction over
you, without prejudice to any rights you or Procter & Gamble may have to appeal
from the proceedings which resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

4. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

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Form KMG

 

5. Adjustments in Case of Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split,
combination of shares, merger, consolidation, rights offering, share exchange,
reclassification, distribution, spin-off, or other change affecting the
corporate structure, capitalization or Common Stock, the number of Restricted
Stock Units you hold will be adjusted appropriately and equitably to prevent
dilution or enlargement of your rights.

 

6. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units, the Committee may
require you to make such arrangements as Procter & Gamble may deem appropriate
for the payment of such taxes required to be withheld, including without
limitation, relinquishment of some of the shares of Common Stock that would
otherwise be given to you. However, regardless of any action taken by Procter &
Gamble with respect to any income tax, social insurance, payroll tax, or other
tax, by accepting a Restricted Stock Unit, you acknowledge that the ultimate
liability for any such tax owed by you is and remains your responsibility, and
that Procter & Gamble makes no representations about the tax treatment of your
Restricted Stock Units, and does not commit to structure any aspect of the
Restricted Stock Units to reduce or eliminate your tax liability.

 

7. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

8. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the

 

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Form KMG

 

sole discretion of the Company; (iv) your participation in the Plan is
voluntary; (v) Restricted Stock Units are an extraordinary item and not part of
normal or expected compensation or salary for any purpose, including without
limitation calculating any termination, severance, resignation, redundancy, or
end-of-service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments; (vi) in the event that your employer is not the
Company, the award of Restricted Stock Units will not be interpreted to form an
employment relationship with the Company; and, furthermore, the award of
Restricted Stock Units will not be interpreted to form an employment contract
with any Procter & Gamble entity; (vii) the future value of Common Stock is
unknown and cannot be predicted with certainty; and (viii) no claim or
entitlement to compensation or damages arises from termination or forfeiture of
Restricted Stock Units, or diminution in value of Restricted Stock Units or
Common Stock received in settlement thereof, and you irrevocably release
Procter & Gamble from any such claim that may arise.

 

9. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

10. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

  

 

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Form KMG

 

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

11. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) the
Company and its successors and assigns; and (b) you and, if applicable, the
representative of your estate.

 

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Form KMG

 

12. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

13. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

14. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

12-31-08

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Form KMW

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR KEY MANAGER RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Data” has the meaning described in Section 9;

(b) “Forfeiture Date” is the date identified as such in your Award Letter;

(c) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(d) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(e) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(f) “Procter & Gamble” means the Company and/or its Subsidiaries;

(g) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the Original Settlement Date;

(h) “Separation from Service” shall have the meaning provided under Section 409A
of the code and regulations thereto.

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit.

(b) During the Forfeiture Period, your Restricted Stock Units will be forfeited
and cancelled if you leave your employment with Procter & Gamble for any reason,
except due to: (i) your Disability; (ii) death; (iii) Retirement in accordance
with the provisions of any appropriate Retirement plan of Procter & Gamble; or
(iv) Special Separation. In the event of your death or Disability during the
Forfeiture Period, your Forfeiture Date will

 

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Form KMW

 

automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability. In the event of your Retirement
or Special Separation, your Forfeiture Date will automatically and immediately
become, without any further action by you or the Company the date of your
Retirement or Special Separation.

(c) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units, your Original Settlement Date will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(d) Upon the occurrence of a Change in Control, the Forfeiture Date (if any)
shall become the date the change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date will become the date the
Change in Control occurred, and the award will be settled in accordance with the
terms of the Plan. If the Change in Control does not meet the Section 409A
requirements, your Original Settlement Date will not be changed.

(e) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, or to settle your Restricted Stock Units, including requiring you to do
so by means of electronic signature, or charging you an administrative fee for
doing so.

(f) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect.

 

3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

 

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Form KMW

 

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is, by its nature, irreparable because,
among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. You agree that any interim or final equitable relief
entered by a court of competent jurisdiction will, at the request of Procter &
Gamble, be entered on consent and enforced by any court having jurisdiction over
you, without prejudice to any rights you or Procter & Gamble may have to appeal
from the proceedings which resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

4. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

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Form KMW

 

5. Adjustments in Case of Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split,
combination of shares, merger, consolidation, rights offering, share exchange,
reclassification, distribution, spin-off, or other change affecting the
corporate structure, capitalization or Common Stock, the number of Restricted
Stock Units you hold will be adjusted appropriately and equitably to prevent
dilution or enlargement of your rights.

 

6. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units, the Committee may
require you to make such arrangements as Procter & Gamble may deem appropriate
for the payment of such taxes required to be withheld, including without
limitation, relinquishment of some of the shares of Common Stock that would
otherwise be given to you. However, regardless of any action taken by Procter &
Gamble with respect to any income tax, social insurance, payroll tax, or other
tax, by accepting a Restricted Stock Unit, you acknowledge that the ultimate
liability for any such tax owed by you is and remains your responsibility, and
that Procter & Gamble makes no representations about the tax treatment of your
Restricted Stock Units, and does not commit to structure any aspect of the
Restricted Stock Units to reduce or eliminate your tax liability.

 

7. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

8. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the

 

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Form KMW

 

sole discretion of the Company; (iv) your participation in the Plan is
voluntary; (v) Restricted Stock Units are an extraordinary item and not part of
normal or expected compensation or salary for any purpose, including without
limitation calculating any termination, severance, resignation, redundancy, or
end-of-service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments; (vi) in the event that your employer is not the
Company, the award of Restricted Stock Units will not be interpreted to form an
employment relationship with the Company; and, furthermore, the award of
Restricted Stock Units will not be interpreted to form an employment contract
with any Procter & Gamble entity; (vii) the future value of Common Stock is
unknown and cannot be predicted with certainty; and (viii) no claim or
entitlement to compensation or damages arises from termination or forfeiture of
Restricted Stock Units, or diminution in value of Restricted Stock Units or
Common Stock received in settlement thereof, and you irrevocably release
Procter & Gamble from any such claim that may arise.

 

9. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

10. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

 

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Form KMW

 

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

11. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) the
Company and its successors and assigns; and (b) you and, if applicable, the
representative of your estate.

 

12. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

13. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

14. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

12-31-08

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Form OPN

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Agreed Settlement Date” has the meaning described in Section 2(b);

(b) “Data” has the meaning described in Section 10;

(c) “Disability” means termination of employment under the permanent disability
provision of any retirement plan of Procter & Gamble;

(d) “Dividend Equivalents” has the meaning described in Section 4;

(e) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(f) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(g) “Procter & Gamble” means the Company and/or its Subsidiaries;

(h) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the later of the Original Settlement
Date or the Agreed Settlement Date.

(i) “Settlement Period” means the period from the Grant Date until the later of
the Original Settlement Date or the Agreed Settlement Date;

(k) “Separation from Service” shall have the meaning provided under Section 409A
of the code and regulations thereto.

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit (including all rights to Dividend
Equivalents).

 

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Form OPN

 

(b) At any time at least one calendar year prior to the Original Settlement
Date, you and the Company may agree to postpone the date on which you are
entitled to receive one share of Common Stock for each Restricted Stock Unit you
hold, according to the deferral terms in place at the time, and provided the new
date (the “Agreed Settlement Date”) is at least five years from the Original
Settlement Date.

(c) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units and/or Dividend Equivalents, your
Original Settlement Date (or Agreed Settlement Date, if applicable) will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(d) Upon the occurrence of a Change in Control, if the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date (or Agreed Settlement Date, if
applicable) will become the date the Change in Control occurred, and the award
will be settled in accordance with the terms of the Plan. If the Change in
Control does not meet the Section 409A requirements, your Original Settlement
Date (or Agreed Settlement Date, if applicable) will not be changed.

(e) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, to agree to an Agreed Settlement Date, or to settle your Restricted Stock
Units, including requiring you to do so by means of electronic signature, or
charging you an administrative fee for doing so.

(f) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect and you will cease to receive Dividend
Equivalents associated with the Restricted Stock Units.

 

3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

 

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Form OPN

 

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is, by its nature, irreparable because,
among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. You agree that any interim or final equitable relief
entered by a court of competent jurisdiction will, at the request of Procter &
Gamble, be entered on consent and enforced by any court having jurisdiction over
you, without prejudice to any rights you or Procter & Gamble may have to appeal
from the proceedings which resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

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Form OPN

 

4. Dividend Equivalents.

As a holder of Restricted Stock Units, during the Settlement period, each time a
cash dividend or other cash distribution is paid with respect to Common Stock,
you will receive additional Restricted Stock Units (“Dividend Equivalents”). The
number of such additional Restricted Stock Units will be determined as follows:
multiply the number of Restricted Stock Units currently held by the per share
amount of the cash dividend or other cash distribution on the Common Stock, and
then divide the result by the price of the Common Stock on the date of the
dividend or distribution. These Dividend Equivalent Restricted Stock Units will
be subject to the same terms and conditions as the original Restricted Stock
Units that gave rise to them, including forfeiture and settlement terms, except
that if there is a fractional number of Dividend Equivalent Restricted Stock
Units on the date they are to be settled, you will receive one share of Common
Stock for the fractional Dividend Equivalent Restricted Stock Units.

 

5. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

6. Adjustments in Case of Stock Dividends, Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering, share
exchange, reclassification, distribution, spin-off, or other change affecting
the corporate structure, capitalization or Common Stock, the number of
Restricted Stock Units you hold will be adjusted appropriately and equitably to
prevent dilution or enlargement of your rights.

 

7. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units or Dividend
Equivalents, the Committee may require you to make such arrangements as
Procter & Gamble may deem appropriate for the payment of such taxes required to
be withheld, including without limitation, relinquishment of some of the shares
of Common Stock that would otherwise be given to you. However, regardless of any
action taken by Procter & Gamble with respect to any income tax, social
insurance, payroll tax, or other tax, by accepting a Restricted Stock Unit or
Dividend Equivalent, you acknowledge that the ultimate liability for any such
tax owed by you is and remains your responsibility, and that Procter & Gamble
makes no representations about the tax treatment of your Restricted Stock Units
or Dividend Equivalents, and does not commit to structure any aspect of the
Restricted Stock Units or Dividend Equivalents to reduce or eliminate your tax
liability.

 

8. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

9. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to

 

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Form OPN

 

it with respect to any action or conduct on your part. Without limiting the
previous sentence, the Committee may, for example, suspend or terminate any
outstanding Restricted Stock Units for actions taken by you if the Committee
determines that you have acted significantly contrary to the best interests of
Procter & Gamble or its subsidiaries. For purposes of this paragraph, an action
taken “significantly contrary to the best interests of Procter & Gamble or its
subsidiaries” includes without limitation any action taken or threatened by you
that the Committee determines has, or is reasonably likely to have, a
significant adverse impact on the reputation, goodwill, stability, operation,
personnel retention and management, or business of Procter & Gamble or any
subsidiary. This paragraph is in addition to any remedy Procter & Gamble or a
subsidiary may have at law or in equity, including without limitation injunctive
and other appropriate relief.

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by the Company, is discretionary in nature, and may be
amended, suspended or terminated at any time; (ii) the award of Restricted Stock
Units is voluntary and occasional and does not create any contractual or other
right to receive future awards of Restricted Stock Units, or benefits in lieu of
Restricted Stock Units, even if Restricted Stock Units have been awarded
repeatedly in the past; (iii) all decisions with respect to future Restricted
Stock Unit awards, if any, will be at the sole discretion of the Company;
(iv) your participation in the Plan is voluntary; (v) Restricted Stock Units are
an extraordinary item and not part of normal or expected compensation or salary
for any purpose, including without limitation calculating any termination,
severance, resignation, redundancy, or end-of-service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments; (vi) in
the event that your employer is not the Company, the award of Restricted Stock
Units will not be interpreted to form an employment relationship with the
Company; and, furthermore, the award of Restricted Stock Units will not be
interpreted to form an employment contract with any Procter & Gamble entity;
(vii) the future value of Common Stock is unknown and cannot be predicted with
certainty; and (viii) no claim or entitlement to compensation or damages arises
from termination or forfeiture of Restricted Stock Units, or diminution in value
of Restricted Stock Units or Common Stock received in settlement thereof, and
you irrevocably release Procter & Gamble from any such claim that may arise.

 

10. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering

 

12-31-08

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Form OPN

 

and managing your participation in the Plan, including any requisite transfer of
such Data to any broker or other third party with whom you may elect to deposit
any shares of Common Stock in connection with the settlement of your Restricted
Stock Units. You understand that Data will be held only as long as is necessary
to implement, administer and manage your participation in the plan. You
understand that you may, at any time, view Data, request additional information
about the storage and processing of Data, require any necessary amendments to
Data, or refuse or withdraw the consents contained in this paragraph, in any
case without cost, by contacting in writing your local human resources
representative. You understand, however, that refusing or withdrawing your
consent may affect your ability to participate in the Plan. For more information
on the consequences of your refusal to consent or withdrawal of consent, you
understand that you may contact your local human resources representative.

 

11. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  The Procter & Gamble Company     ATTN: Corporate Secretary’s Office     P.O.
Box 599     Cincinnati, OH 45201  

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

12. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) the
Company and its successors and assigns; and (b) you and, if applicable, the
representative of your estate.

 

13. Governing Law.

The validity, interpretation, performance and enforcements of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

14. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

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Form OPN

 

15. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

12-31-08

--------------------------------------------------------------------------------

Form RTD

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Agreed Settlement Date” has the meaning described in Section 2(c);

(b) “Data” has the meaning described in Section 10;

(c) “Disability” means termination of employment under the permanent disability
provision of any retirement plan of Procter & Gamble;

(d) “Dividend Equivalents” has the meaning described in Section 4;

(e) “Forfeiture Date” is the date identified as such in your Award Letter;

(f) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(g) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(h) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(i) “Post-Forfeiture Period” means the period from the Forfeiture Date until the
later of the Original Settlement Date or the Agreed Settlement Date;

(j) “Procter & Gamble” means the Company and/or its Subsidiaries;

(k) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the later of the Original Settlement
Date or the Agreed Settlement Date;

(l) “Separation from Service” shall have the meaning provided under Section 409A
of the Code and regulations thereto.

 

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Form RTD

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit (including all rights to Dividend
Equivalents).

(b) During the Forfeiture Period, your Restricted Stock Units (including all
rights to receive Dividend Equivalents) will be forfeited and cancelled if you
leave your employment with Procter & Gamble for any reason, except due to:
(i) your Disability; (ii) your retirement in accordance with the provisions of
any appropriate retirement plan of Procter & Gamble; (iii) death; or (iv) in
certain circumstances, your Special Separation. In the event of your death or
Disability during the Forfeiture Period, your Forfeiture Date will automatically
and immediately become, without any further action by you or the Company, the
date of your death or Disability. In the event of your retirement in accordance
with the provisions of any appropriate retirement plan of Procter & Gamble
during the Forfeiture Period, you will retain your Restricted Stock Units
subject to the Plan and these Terms and Conditions. In the event of your Special
Separation during the Forfeiture Period, your Restricted Stock Units will be
forfeited and cancelled unless otherwise agreed to in writing by the Company.

(c) At any time at least one calendar year prior to the Original Settlement
Date, you and the Company may agree to postpone the date on which you are
entitled to receive one share of Common Stock for each Restricted Stock Unit you
hold, according to the deferral terms in place at the time, and provided the new
date (the “Agreed Settlement Date”) is at least five years from the Original
Settlement Date.

(d) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units and/or Dividend Equivalents, your
Original Settlement Date or Agreed Settlement Date, (if applicable) will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(e) Upon the occurrence of a Change in Control, the Forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date (or Agreed Settlement Date, if
applicable) will become the date the change in Control occurred, and the award
will be settled in accordance with the terms of the Plan. If the Change in
Control does not meet the Section 409A requirements, your Original Settlement
Date (or Agreed Settlement Date, if applicable) will not be changed.

(f) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, to agree to an Agreed Settlement Date, or to settle your Restricted Stock
Units, including requiring you to do so by means of electronic signature, or
charging you an administrative fee for doing so.

(g) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect and you will cease to receive Dividend
Equivalents associated with the Restricted Stock Units.

 

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3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is,

 

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by its nature, irreparable because, among other things, it is not readily
susceptible of proof as to the monetary harm that would ensue. You agree that
any interim or final equitable relief entered by a court of competent
jurisdiction will, at the request of Procter & Gamble, be entered on consent and
enforced by any court having jurisdiction over you, without prejudice to any
rights you or Procter & Gamble may have to appeal from the proceedings which
resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

4. Dividend Equivalents.

As a holder of Restricted Stock Units, during the period from the Grant Date
until the Original Settlement Date or the Agreed Settlement Date, whichever is
later, each time a cash dividend or other cash distribution is paid with respect
to Common Stock, you will receive additional Restricted Stock Units (“Dividend
Equivalents”). The number of such additional Restricted Stock Units will be
determined as follows: multiply the number of Restricted Stock Units currently
held by the per share amount of the cash dividend or other cash distribution on
the Common Stock, and then divide the result by the price of the Common Stock on
the date of the dividend or distribution. These Dividend Equivalent Restricted
Stock Units will be subject to the same terms and conditions as the original
Restricted Stock Units that gave rise to them, including forfeiture and
settlement terms, except that if there is a fractional number of Dividend
Equivalent Restricted Stock Units on the date they are to be settled, you will
receive one share of Common Stock for the fractional Dividend Equivalent
Restricted Stock Units.

 

5. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

6. Adjustments in Case of Stock Dividends, Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering, share
exchange, reclassification, distribution, spin-off, or other change affecting
the corporate structure, capitalization or Common Stock, the number of
Restricted Stock Units you hold will be adjusted appropriately and equitably to
prevent dilution or enlargement of your rights.

 

7. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units or Dividend
Equivalents, the Committee may require you to make such arrangements as
Procter & Gamble may deem appropriate for the payment of such taxes required to
be withheld, including without limitation, relinquishment of some of the shares
of Common Stock that would otherwise be given to you. However,

 

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regardless of any action taken by Procter & Gamble with respect to any income
tax, social insurance, payroll tax, or other tax, by accepting a Restricted
Stock Unit or Dividend Equivalent, you acknowledge that the ultimate liability
for any such tax owed by you is and remains your responsibility, and that
Procter & Gamble makes no representations about the tax treatment of your
Restricted Stock Units or Dividend Equivalents, and does not commit to structure
any aspect of the Restricted Stock Units or Dividend Equivalents to reduce or
eliminate your tax liability.

 

8. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

9. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the sole discretion of
the Company; (iv) your participation in the Plan is voluntary; (v) Restricted
Stock Units are an extraordinary item and not part of normal or expected
compensation or salary for any purpose, including without limitation calculating
any termination, severance, resignation, redundancy, or end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments; (vi) in the event that your employer is not the Company, the award of
Restricted Stock Units will not be interpreted to form an employment
relationship with the Company; and, furthermore, the award of Restricted Stock
Units will not be interpreted to form an employment contract with any Procter &
Gamble entity; (vii) the future value of Common Stock is unknown and cannot be
predicted with certainty; and (viii) no claim or entitlement to compensation or
damages arises from termination or forfeiture of Restricted Stock Units, or
diminution in value of Restricted Stock Units or Common Stock received in
settlement thereof, and you irrevocably release Procter & Gamble from any such
claim that may arise.

 

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10. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

11. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  The Procter & Gamble Company     ATTN: Corporate Secretary’s Office     P.O.
Box 599     Cincinnati, OH 45201  

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

12. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) The
Procter & Gamble Company and its successors and assigns; and (b) you and, if
applicable, the representative of your estate.

 

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Form RTD

 

13. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

14. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

15. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

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Form RTD-A

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Agreed Settlement Date” has the meaning described in Section 2(c);

(b) “Data” has the meaning described in Section 10;

(c) “Disability” means termination of employment under the permanent disability
provision of any retirement plan of Procter & Gamble;

(d) “Dividend Equivalents” has the meaning described in Section 4;

(e) “Forfeiture Date” is the date identified as such in your Award Letter;

(f) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(g) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(h) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(i) “Post-Forfeiture Period” means the period from the Forfeiture Date until the
later of the Original Settlement Date or the Agreed Settlement Date;

(j) “Procter & Gamble” means the Company and/or its Subsidiaries;

(k) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the later of the Original Settlement
Date or the Agreed Settlement Date;

(l) “Separation from Service” shall have the meaning provided under Section 409A
of the Code and regulations thereto.

 

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2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit (including all rights to Dividend
Equivalents).

(b) During the Forfeiture Period, your Restricted Stock Units (including all
rights to receive Dividend Equivalents) will be forfeited and cancelled if you
leave your employment with Procter & Gamble for any reason, except due to:
(i) your Disability; (ii) death; or (iii) in certain circumstances, your Special
Separation. In the event of your death or Disability during the Forfeiture
Period, your Forfeiture Date will automatically and immediately become, without
any further action by you or the Company, the date of your death or Disability.
In the event of your Special Separation during the Forfeiture Period, your
Restricted Stock Units will be forfeited and cancelled unless otherwise agreed
to in writing by the Company.

(c) At any time at least one calendar year prior to the Original Settlement
Date, you and the Company may agree to postpone the date on which you are
entitled to receive one share of Common Stock for each Restricted Stock Unit you
hold, according to the deferral terms in place at the time, and provided the new
date (the “Agreed Settlement Date”) is at least five years from the Original
Settlement Date.

(d) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units and/or Dividend Equivalents, your
Original Settlement Date (or Agreed Settlement Date, if applicable) will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(e) Upon the occurrence of a Change in Control, the Forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement date (or Agreed Settlement Date, if
applicable) will become the date the Change in Control occurred, and the award
will be settled in accordance with the terms of the Plan. If the Change in
Control does not meet the Section 409A requirements, your Original Settlement
Date (or Agreed Settlement Date, if applicable) will not be changed.

(f) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, to agree to an Agreed Settlement Date, or to settle your Restricted Stock
Units, including requiring you to do so by means of electronic signature, or
charging you an administrative fee for doing so.

(g) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect and you will cease to receive Dividend
Equivalents associated with the Restricted Stock Units.

 

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Form RTD-A

 

3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is,

 

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Form RTD-A

 

by its nature, irreparable because, among other things, it is not readily
susceptible of proof as to the monetary harm that would ensue. You agree that
any interim or final equitable relief entered by a court of competent
jurisdiction will, at the request of Procter & Gamble, be entered on consent and
enforced by any court having jurisdiction over you, without prejudice to any
rights you or Procter & Gamble may have to appeal from the proceedings which
resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

4. Dividend Equivalents.

As a holder of Restricted Stock Units, during the period from the Grant Date
until the Original Settlement Date or the Agreed Settlement Date, whichever is
later, each time a cash dividend or other cash distribution is paid with respect
to Common Stock, you will receive additional Restricted Stock Units (“Dividend
Equivalents”). The number of such additional Restricted Stock Units will be
determined as follows: multiply the number of Restricted Stock Units currently
held by the per share amount of the cash dividend or other cash distribution on
the Common Stock, and then divide the result by the price of the Common Stock on
the date of the dividend or distribution. These Dividend Equivalent Restricted
Stock Units will be subject to the same terms and conditions as the original
Restricted Stock Units that gave rise to them, including forfeiture and
settlement terms, except that if there is a fractional number of Dividend
Equivalent Restricted Stock Units on the date they are to be settled, you will
receive one share of Common Stock for the fractional Dividend Equivalent
Restricted Stock Units.

 

5. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

6. Adjustments in Case of Stock Dividends, Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering, share
exchange, reclassification, distribution, spin-off, or other change affecting
the corporate structure, capitalization or Common Stock, the number of
Restricted Stock Units you hold will be adjusted appropriately and equitably to
prevent dilution or enlargement of your rights.

 

7. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units or Dividend
Equivalents, the Committee may require you to make such arrangements as
Procter & Gamble may deem appropriate for the payment of such taxes required to
be withheld, including without limitation, relinquishment of some of the shares
of Common Stock that would otherwise be given to you. However,

 

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Form RTD-A

 

regardless of any action taken by Procter & Gamble with respect to any income
tax, social insurance, payroll tax, or other tax, by accepting a Restricted
Stock Unit or Dividend Equivalent, you acknowledge that the ultimate liability
for any such tax owed by you is and remains your responsibility, and that
Procter & Gamble makes no representations about the tax treatment of your
Restricted Stock Units or Dividend Equivalents, and does not commit to structure
any aspect of the Restricted Stock Units or Dividend Equivalents to reduce or
eliminate your tax liability.

 

8. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

9. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the sole discretion of
the Company; (iv) your participation in the Plan is voluntary; (v) Restricted
Stock Units are an extraordinary item and not part of normal or expected
compensation or salary for any purpose, including without limitation calculating
any termination, severance, resignation, redundancy, or end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments; (vi) in the event that your employer is not the Company, the award of
Restricted Stock Units will not be interpreted to form an employment
relationship with the Company; and, furthermore, the award of Restricted Stock
Units will not be interpreted to form an employment contract with any Procter &
Gamble entity; (vii) the future value of Common Stock is unknown and cannot be
predicted with certainty; and (viii) no claim or entitlement to compensation or
damages arises from termination or forfeiture of Restricted Stock Units, or
diminution in value of Restricted Stock Units or Common Stock received in
settlement thereof, and you irrevocably release Procter & Gamble from any such
claim that may arise.

 

12-31-08

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Form RTD-A

 

10. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

11. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  The Procter & Gamble Company     ATTN: Corporate Secretary’s Office     P.O.
Box 599     Cincinnati, OH 45201  

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

12. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) The
Procter & Gamble Company and its successors and assigns; and (b) you and, if
applicable, the representative of your estate.

 

12-31-08

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Form RTD-A

 

13. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

14. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

15. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

12-31-08

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Form RTN2

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Data” has the meaning described in Section 9;

(b) “Disability” means termination of employment under the permanent disability
provision of any retirement plan of Procter & Gamble;

(c) “Forfeiture Date” is the date identified as such in your Award Letter;

(d) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(e) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(f) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(g) “Post-Forfeiture Period” means the period from the Forfeiture Date until the
Original Settlement Date;

(h) “Procter & Gamble” means the Company and/or its Subsidiaries;

(i) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the Original Settlement Date;

(k) “Separation from Service” shall have the meaning provided under Section 409A
of the Code and regulations thereto.

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a Restricted Stock Unit, whether voluntary or involuntary
on your part, will result in the immediate forfeiture to the Company, and
cancellation, of the Restricted Stock Unit.

 

12-31-08

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Form RTN2

 

(b) During the Forfeiture Period, your Restricted Stock Units will be forfeited
and cancelled if you leave your employment with Procter & Gamble for any reason,
except due to: (i) your Disability; (ii) death; or (iii) in certain
circumstances, your Special Separation. In the event of your death or Disability
during the Forfeiture Period, your Forfeiture Date will automatically and
immediately become, without any further action by you or the Company, the date
of your death or Disability. In the event of your Special Separation during the
Forfeiture Period, your Restricted Stock Units will be forfeited and cancelled
unless otherwise agreed to in writing by the Company.

(c) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units, your Original Settlement Date will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(d) Upon the occurrence of a Change in control, the Forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date will become the date the
Change in Control occurred, and the award will be settled in accordance with the
terms of the Plan. If the Change in Control does not meet the Section 409A
requirements, your Original Settlement Date will not be changed.

(e) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, or to settle your Restricted Stock Units, including requiring you to do
so by means of electronic signature, or charging you an administrative fee for
doing so.

(f) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect.

 

3. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

 

12-31-08

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Form RTN2

 

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in a discrete geographic region, which information Procter & Gamble is
considering for broader use, will not be deemed to be “generally known” until
such broader use is actually commercially implemented. As used in this Section,
“trade secrets or other confidential information” also includes personnel
knowledge about a manager, or managers, of Procter & Gamble or its subsidiaries
gained in the course of your employment with Procter & Gamble or its
subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation,
work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which
directly or indirectly affords you a confidential basis to solicit, encourage,
or participate in soliciting any manager, or managers, of Procter & Gamble or
any subsidiary to terminate his or her relationship with Procter & Gamble or
that subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is, by its nature, irreparable because,
among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. You agree that any interim or final equitable relief
entered by a court of competent jurisdiction will, at the request of Procter &
Gamble, be entered on consent and enforced by any court having jurisdiction over
you, without prejudice to any rights you or Procter & Gamble may have to appeal
from the proceedings which resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

 

12-31-08

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Form RTN2

 

4. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

5. Adjustments in Case of Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split,
combination of shares, merger, consolidation, rights offering, share exchange,
reclassification, distribution, spin-off, or other change affecting the
corporate structure, capitalization or Common Stock, the number of Restricted
Stock Units you hold will be adjusted appropriately and equitably to prevent
dilution or enlargement of your rights.

 

6. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units, the Committee may
require you to make such arrangements as Procter & Gamble may deem appropriate
for the payment of such taxes required to be withheld, including without
limitation, relinquishment of some of the shares of Common Stock that would
otherwise be given to you. However, regardless of any action taken by Procter &
Gamble with respect to any income tax, social insurance, payroll tax, or other
tax, by accepting a Restricted Stock Unit, you acknowledge that the ultimate
liability for any such tax owed by you is and remains your responsibility, and
that Procter & Gamble makes no representations about the tax treatment of your
Restricted Stock Units, and does not commit to structure any aspect of the
Restricted Stock Units to reduce or eliminate your tax liability.

 

7. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

8. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

 

12-31-08

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Form RTN2

 

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the sole discretion of
the Company; (iv) your participation in the Plan is voluntary; (v) Restricted
Stock Units are an extraordinary item and not part of normal or expected
compensation or salary for any purpose, including without limitation calculating
any termination, severance, resignation, redundancy, or end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments; (vi) in the event that your employer is not the Company, the award of
Restricted Stock Units will not be interpreted to form an employment
relationship with the Company; and, furthermore, the award of Restricted Stock
Units will not be interpreted to form an employment contract with any Procter &
Gamble entity; (vii) the future value of Common Stock is unknown and cannot be
predicted with certainty; and (viii) no claim or entitlement to compensation or
damages arises from termination or forfeiture of Restricted Stock Units, or
diminution in value of Restricted Stock Units or Common Stock received in
settlement thereof, and you irrevocably release Procter & Gamble from any such
claim that may arise.

 

9. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

12-31-08

--------------------------------------------------------------------------------

Form RTN2

 

10. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  The Procter & Gamble Company     ATTN: Corporate Secretary’s Office     P.O.
Box 599     Cincinnati, OH 45201  

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

11. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) the
Company and its successors and assigns; and (b) you and, if applicable, the
representative of your estate.

 

12. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

13. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

14. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

12-31-08

--------------------------------------------------------------------------------

Form BOD

 

[INSERT DATE]

[INSERT NAME]

Subject: Award of Restricted Stock Units

This is to advise you that The Procter & Gamble Company, an Ohio corporation, is
awarding you with Restricted Stock Units, on the dates and in the amounts listed
below, pursuant to The Procter & Gamble 2003 Non-Employee Directors’ Stock Plan,
and subject to the attached Statement of Terms and Conditions Form BOD.

 

Grant Date:    [INSERT DATE OF GRANT] Forfeiture Date:    [One year following
grant] Original Settlement Date:    [One year after Separation from Service]
Number of Restricted Stock Units:    [INSERT NUMBER GRANTED]

As you will see from the Statement of Terms and Conditions Form BOD, under
certain circumstances you may agree with The Procter & Gamble Company to delay
the settlement of your Restricted Stock Units beyond the Original Settlement
Date. You may want to consult your personal tax advisor before making a decision
about this matter.

 

THE PROCTER & GAMBLE COMPANY Steven W. Jemison, Secretary For the Compensation
Committee

 

11-20-08

--------------------------------------------------------------------------------

Form BOD

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2003 NON-EMPLOYEE DIRECTORS’ STOCK PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

 

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2003
Non-Employee Directors’ Stock Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Agreed Settlement Date” has the meaning described in Section 2(c);

(b) “Data” has the meaning described in Section 8;

(c) “Dividend Equivalents” has the meaning described in Section 3;

(d) “Forfeiture Date” is the date identified as such in your Award Letter;

(e) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(f) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(g) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(h) “Post-Forfeiture Period” means the period from the Forfeiture Date until the
later of the Original Settlement Date or the Agreed Settlement Date;

(i) “Procter & Gamble” means the Company and/or its Subsidiaries;

(j) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the later of the Original Settlement
Date or the Agreed Settlement Date

(k) “Separation from Service” shall have the meaning provided under Section 409A
of the Code and regulations thereto.

 

2. Transfer and Restrictions.

(a) Neither Restricted Stock Units nor your interest in them may be sold,
exchanged, transferred, pledged, hypothecated, given or otherwise disposed of by
you at any time, except by will or by the laws of descent and distribution. Any
attempted transfer of a

--------------------------------------------------------------------------------

Form BOD

 

Restricted Stock Unit, whether voluntary or involuntary on your part, will
result in the immediate forfeiture to the Company, and cancellation, of the
Restricted Stock Unit (including all rights to receive Dividend Equivalents).

(b) During the Forfeiture Period, your Restricted Stock Units (including all
rights to receive Dividend Equivalents) will be forfeited and cancelled if you
leave your position as a Director of the Company for any reason, except due to
your: (i) disability; (ii) retirement after attaining the age of sixty-nine
(69); (iii) resignation following retirement from your principal employer in
good standing under the terms or your principal employer’s retirement plan; or
(iv) resignation for reasons of antitrust laws or the Company’s conflict of
interest, corporate governance or continued service policies. In the event of
your disability during the Forfeiture Period, unless otherwise agreed to in
writing by the Company, your Original Settlement Date shall automatically and
immediately become, without any further action by you or the Company, the date
of your disability. In the event of any of the other above exceptions occurring,
you will retain your Restricted Stock Units subject to the Plan and these Terms
and Conditions.

(c) At any time at least one calendar year prior to the Original Settlement
Date, you and the Company may agree to postpone the date on which you are
entitled to receive one share of Common Stock for each Restricted Stock Unit you
hold according to the deferral terms in place at the time, and provided the new
date (the “Agreed Settlement Date”) is at least five years from the Original
Settlement Date.

(d) Upon your death or upon your disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”), at any
time while you hold Restricted Stock Units and/or Dividend Equivalents, your
Original Settlement Date (or Agreed Settlement Date, if applicable) will
automatically and immediately become, without any further action by you or the
Company, the date of your death or disability, as applicable.

(e) Upon the occurrence of a Change in Control, the forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date (or Agreed Settlement Date, if
applicable) will become the date the change in control occurred, and the award
will be settled in accordance with the terms of the Plan. If the Change in
Control does not meet the Section 409A requirements, your Original Settlement
Date (or Agreed Settlement Date, if applicable) will not be changed.

(f) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, to agree to an Agreed Settlement Date, or to settle your Restricted Stock
Units, including requiring you to do so by means of electronic signature, or
charging you an administrative fee for doing so.

(g) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, the Restricted Stock Units will
have no further value, force or effect and you will cease to receive Dividend
Equivalents associated with the Restricted Stock Units.

--------------------------------------------------------------------------------

Form BOD

 

3. Dividend Equivalents.

As a holder of Restricted Stock Units, during the period from the Grant Date
until the Original Settlement Date or the Agreed Settlement Date, whichever is
later, each time a cash dividend or other cash distribution is paid with respect
to Common Stock, you will receive additional Restricted Stock Units (“Dividend
Equivalents”). The number of such additional Restricted Stock Units will be
determined as follows: multiply the number of Restricted Stock Units currently
held by the per share amount of the cash dividend or other cash distribution on
the Common Stock, and then divide the result by the price of the Common Stock on
the date of the dividend or distribution. These Dividend Equivalent Restricted
Stock Units will be subject to the same terms and conditions as the original
Restricted Stock Units that gave rise to them, including forfeiture and
settlement terms, except that if there is a fractional number of Dividend
Equivalent Restricted Stock Units on the date they are to be settled, you will
receive one share of Common Stock for the fractional Dividend Equivalent
Restricted Stock Units.

 

4. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

 

5. Adjustments in Case of Stock Dividends, Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering, share
exchange, reclassification, distribution, spin-off, or other change affecting
the corporate structure, capitalization or Common Stock, the number of
Restricted Stock Units you hold will be adjusted appropriately and equitably to
prevent dilution or enlargement of your rights.

 

6. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units or Dividend
Equivalents, the Committee may require you to make such arrangements as
Procter & Gamble may deem appropriate for the payment of such taxes required to
be withheld, including without limitation, relinquishment of some of the shares
of Common Stock that would otherwise be given to you. However, regardless of any
action taken by Procter & Gamble with respect to any income tax, social
insurance, payroll tax, or other tax, by accepting a Restricted Stock Unit or
Dividend Equivalent, you acknowledge that the ultimate liability for any such
tax owed by you is and remains your responsibility, and that Procter & Gamble
makes no representations about the tax treatment of your Restricted Stock Units
or Dividend Equivalents, and does not commit to structure any aspect of the
Restricted Stock Units or Dividend Equivalents to reduce or eliminate your tax
liability.

 

7. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

 

8. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in

--------------------------------------------------------------------------------

Form BOD

 

this document by and among, as applicable, any Procter & Gamble entity or third
party for the purpose of implementing, administering and managing your
participation in the Plan. You understand that Procter & Gamble holds certain
personal information about you, including without limitation your name, home
address and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in a Procter & Gamble entity, details of all options,
Restricted Stock Units, or any other entitlement to shares of stock awarded,
canceled, exercised, vested, unvested or outstanding in your favor, for the
purpose of implementing, administering and managing the Plan (“Data”). You
understand that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients
may be located in your country or elsewhere, and that the recipient’s country
may have different data privacy laws and protections than your country. You
understand that you may request a list with the names and addresses of any
potential recipients of Data by contacting your local human resources
representative. You authorize the recipients to receive, possess, use, retain
and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

9. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

  The Procter & Gamble Company     ATTN: Corporate Secretary’s Office     P.O.
Box 599     Cincinnati, OH 45201  

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

 

10. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) The
Procter & Gamble Company and its successors and assigns; and (b) you and, if
applicable, the representative of your estate.

--------------------------------------------------------------------------------

Form BOD

 

11. Governing Law.

The validity, interpretation, performance and enforcements of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

 

12. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

13. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

--------------------------------------------------------------------------------

Appendix 12    FORM RRS    9/11/01        

 

PROCTER & GAMBLE

STATEMENT OF CONDITIONS AND RESTRICTIONS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The shares of Common Stock of The Procter & Gamble Company (the “Restricted
Shares”) awarded to you as stated in the accompanying letter have been
transferred to you on the express condition that these Restricted Shares, and
your ownership thereof, are subject to the following conditions and
restrictions:

 

1. Restrictions and Conditions on Shares —

(a) Neither these Restricted Shares nor any of your interest therein may be
sold, exchanged, transferred, pledged, hypothecated, given or otherwise disposed
of by you at any time except as specifically permitted or otherwise required by
the terms of this Statement.

(b) In the event that your employment with Procter & Gamble terminates, except
as the result of your death or disability or your retirement under circumstances
permitted by the terms of a Procter & Gamble retirement plan in which you are
then a participant, you will be deemed to have received on the date of the
termination of your employment a written demand by the Company to sell to the
Company within ten (10) days these Restricted Shares at a price of ten cents
($.10) per share, which price is subject to adjustment as hereinafter provided.
For the purpose of this subparagraph, your employment with Procter & Gamble
shall not be deemed to terminate by reason of your being on leave of absence for
any purpose approved in writing by the Company.

(c) In the event that you shall at any time attempt to sell, exchange, transfer,
pledge, hypothecate, give or otherwise dispose of any of the Restricted Shares,
or any interest therein, in violation of the terms and conditions of this
Statement, you will be required, within ten (10) days after delivery to you of a
written demand by the Company made within ninety (90) days after the occurrence
of such event, to sell to the Company all Restricted Shares then registered in
your name with respect to which the conditions and restrictions set forth in
this Statement are still in effect at a price of ten cents ($.10) per share,
which price is subject to adjustment as hereinafter provided.

(d)(i) The determination as to whether an event has occurred requiring a sale of
Restricted Shares to the Company in accordance with any provision of this
paragraph 1, paragraph 7 following or any other provision of this Statement
shall be made by the Compensation Committee (the “Committee”) in its sole
discretion, and all determinations of the Committee with respect thereto shall
in all respects be conclusive upon you and any persons claiming under or through
you.

(ii) If you shall at any time be required to sell any or all of these Restricted
Shares to the Company pursuant to any provisions of this paragraph 1, paragraph
7 following or any other provision in this Statement, you shall, effective on
the date of the delivery of the Company’s demand to you, cease to have any
rights as a shareholder with respect to the Restricted Shares so required to be
sold, or any interest therein; and, without limitation, you shall cease to be
entitled to receive any future dividends upon such Restricted Shares with record
dates occurring after the date of delivery of such demand; and in the event that
for any reason you shall receive any such dividends upon such Restricted Shares
you will be required to repay the Company an amount equal to such dividends.

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.

--------------------------------------------------------------------------------

(iii) If you shall at any time be required to sell any or all of these
Restricted Shares to the Company pursuant to the provisions of this paragraph 1,
paragraph 7 following or any other provision in this Statement, and if within
thirty (30) days after delivery to you of the Company’s demand you have not
delivered a stock power or other instrument of transfer appropriately executed
in blank, together with any certificates which you may hold representing such
Restricted Shares to the Secretary of the Company at the Executive Offices of
The Procter & Gamble Company, P. O. Box 599, Cincinnati, Ohio 45201, the Company
may thereupon cause to be mailed to you, in the manner and at the address
specified in paragraph 8(b) following, its check payable to your order in the
amount of the purchase price for such shares provided for in this Statement and
direct the Transfer Agent and Registrar of the Company’s Common Stock to make
appropriate entries upon their records showing the cancellation of such
certificates and return the shares represented thereby to the Company.

 

2. Shareholder Rights —

Effective upon the date of award of these Restricted Shares you shall for all
purposes be a holder of record of these Restricted Shares and shall thereafter
have all rights of a common shareholder with respect to such shares (including
the right to vote such shares at any meeting of common shareholders of The
Procter & Gamble Company and the right to receive all dividends paid with
respect to such shares), subject only to the conditions and restrictions imposed
by this Statement. Until such conditions and restrictions have lapsed with
respect to any restricted Shares, any certificate for such shares will bear a
legend to the effect that they were issued or transferred subject to, and may be
sold or otherwise disposed of only in accordance with, the terms of this
Statement.

 

3. Adjustments in Case of Stock Dividends, Stock Splits, etc. —

In the event that, as the result of a stock dividend, stock split,
recapitalization, merger, consolidation, reorganization, or other event, you
shall, as the owner of Restricted Shares, be entitled to new, additional or
different shares or securities: (a) such new, additional or different shares or
securities shall for all purposes be deemed “Restricted Shares,” (b) all of the
terms of this Statement shall be applicable thereto as modified by this
paragraph 3, (c) the purchase price of ten cents ($.10) per share and all of the
computations provided for in this Statement shall, if and to the extent
required, be appropriately adjusted, and (d) any certificates or other
instruments evidencing such new, additional or different shares or securities
shall bear the legend referred to in paragraph 2; provided, however, any
fractional shares and any pre-emptive or other rights or warrants to purchase
securities issued to you as a holder of Restricted Shares in connection with a
public offering will be issued to you free and clear of all conditions and
restrictions imposed by this Statement.

 

4. Lapse of Conditions and Restrictions —

(a) The conditions and restrictions set forth in paragraph 1 above shall lapse
in their entirety on the earliest of

(i) the date your employment with Procter & Gamble terminates as the result of
your death or disability or your retirement under circumstances permitted by the
terms of a Procter & Gamble retirement plan in which you are then a participant,
provided, however, that the Treasurer of The Procter & Gamble Company may agree
to extend the restrictions to a date after retirement to provide for expiration
(a) on a date not later than December 15 of the year of retirement; (b) on
January 15 of the year following retirement; or (c) in five or ten annual
installments beginning on January 15 of the year following retirement, with any
such extension to be agreed to only upon your written request made prior to
January 1 of the year of your retirement and your agreement not to engage in
competitive employment (as defined in Article F(1) of The Procter & Gamble 2001
Stock and Incentive Compensation Plan following retirement until expiration of
the restrictions without first obtaining written permission from the Company; or

(ii) there is a “change in control” (as defined in the Plan) of Procter &
Gamble; or

(iii) the date the Committee, in its sole discretion, accepts in writing your
written request to accelerate the lapse of conditions and restrictions due to
Company approval in writing of your planned retirement under circumstances
permitted by the terms of a Procter & Gamble retirement plan in which you are
then a participant. In no case will the Committee accept your request to
accelerate the lapse of conditions and restrictions prior to October 1 of the
calendar year preceding the calendar year of your approved retirement.

(b) The Committee may accelerate the lapse of conditions and restrictions on all
or any part of the Restricted Shares in the case of hardship which in the sole
judgment of the Committee justifies such action.

--------------------------------------------------------------------------------

(c) When the conditions and restrictions lapse with respect to Restricted Shares
pursuant to this paragraph 4, the Company will deliver to you, or your legal
representative in case of death, promptly after surrender of any certificate(s)
for such Restricted Shares to the Treasurer of The Procter & Gamble Company,
Cincinnati, Ohio 45201, one or more certificates for a like number of shares,
free of any legend.

 

5. Company Right to Terminate Employment and Other Remedies —

Nothing provided herein shall be construed to affect in any way the right or
power of the Company to terminate your employment at any time for any reason
with or without cause, nor to preclude the Company from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part.

 

6. Definitions —

(a) The term “Company” as used in this Statement shall mean the corporation
which awarded the Restricted Shares to you.

(b) The term “Procter & Gamble” as used in this Statement shall include The
Procter & Gamble Company and all corporations, more than 50% of whose capital
stock entitled to vote for the election of directors is owned or controlled,
directly or indirectly, by The Procter & Gamble Company or by any corporation so
controlled by The Procter & Gamble Company, if and as long as such corporations
are so controlled.

 

7. Additional Documents —

a It is the intention of the Company that this transaction shall meet the
requirements of, and result in the application of, the rules prescribed by
Section 83 of the Internal Revenue Code of 1986, as in effect at the date
hereof, and applicable Regulations thereunder. Accordingly, each and every
provision shall be construed and interpreted in such manner as to conform with
such intention and the Company reserves the right to execute and to require you
to execute any further agreements or other instruments which may be effective as
of the date of award of these Restricted Shares, including, but without
limitation, an instrument modifying or correcting any provision hereof, or of
the letter advising you of the award or any action taken hereunder or
contemporaneously herewith, and to take any other action, which may be effective
as of the date of award of these Restricted Shares, that, in the opinion of
counsel for the Company, may be necessary or desirable to carry out such
intention.

(b) If you fail, refuse or neglect to execute and deliver any instrument or
document or to take any action requested by the Company or Committee to be
executed or taken by you pursuant to the provisions of paragraph 7(a) above for
a period of thirty (30) days after the date of such request, the Committee may
require you, within ten (10) days after delivery to you of a written demand by
the Company, to sell to the Company all of the Restricted Shares then registered
in your name with respect to which the conditions and restrictions set forth in
this Statement are still in effect at a price of ten cents ($.10) per share,
which price is subject to adjustment as herein provided.

 

8. Notices —

(a) Any notice to the Company under or pursuant to the conditions and
restrictions of this Statement shall be deemed to have been delivered to the
Company when delivered in person to the Secretary of the Company or when
deposited in the mails, by certified or registered mail, addressed to the
Secretary of the Company at the Executive Offices of The Procter & Gamble
Company, P.O. Box 599, Cincinnati, Ohio 45201, or such other address as the
Company may from time to time designate in writing by notice to you given
pursuant to paragraph 8(b) hereof.

(b) Any notice or demand to you under or pursuant to any provisions of this
Statement shall be deemed to have been delivered to you when delivered to you in
person or when deposited in the mails, by certified or registered mail,
addressed to you at the address on record in the Shareholder Services Department
or such other address as you may from time to time designate in writing by
notice to the Company given pursuant to paragraph 8(a) above.

 

9. The Procter & Gamble 2001 Stock and Incentive Compensation Plan —

The Restricted Shares have been awarded to you pursuant to The Procter & Gamble
2001 Stock and Incentive Compensation Plan adopted and approved by the
shareholders of The Procter & Gamble Company on October 9, 2001, and such shares
and your ownership thereof shall be in all respects subject to the terms of such
Plan, the terms and provisions of which are incorporated herein by reference as
applicable.

--------------------------------------------------------------------------------

10. Successors and Assigns —

The provisions of this Statement shall be binding upon and inure to the benefit
of

(a) the Company, its successors and assigns, and

(b) you and, to the extent applicable, your legal representative.

 

11. Governing Law —

The validity, interpretation, performance and enforcement of the conditions and
restrictions contained in this Statement and your rights in, to and under the
Restricted Shares shall for all purposes be governed by the laws of the State of
Ohio.

 

12. Additional Information Concerning Common Stock —

The following information which appears on certificates representing shares of
the Common Stock of the Company is provided pursuant to Section 1701.24(F) of
the Ohio Revised Code as pertinent to Restricted Shares awarded or held without
issuance of certificates:

(a) The Procter & Gamble Company is organized under the laws of the State of
Ohio.

(b) The Restricted Shares are fully paid and non-assessable shares of the Common
Stock without par value of the Company.

(c) The name of the person to whom the shares are issued and the number of
shares so issued and made subject to this Statement of Conditions and
Restrictions are set forth in the accompanying letter.

(d) A copy of the express terms of such shares and of all other classes and
series of shares authorized will be mailed to any shareholder without charge
within five (5) days after receipt from such shareholder of a written request
therefor addressed to the Secretary of The Procter & Gamble Company, P.O. Box
599, Cincinnati, Ohio 45201.

--------------------------------------------------------------------------------

Appendix 13    FORM SRS    6/10/03        

 

PROCTER & GAMBLE

STATEMENT OF CONDITIONS AND RESTRICTIONS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The shares of Common Stock of The Procter & Gamble Company (the “Restricted
Shares”) awarded to you as stated in the accompanying letter have been
transferred to you on the express condition that these Restricted Shares, and
your ownership thereof, are subject to the following conditions and
restrictions:

 

1. Restrictions and Conditions on Shares —

(a) Neither these Restricted Shares nor any of your interest therein may be
sold, exchanged, transferred, pledged, hypothecated, given or otherwise disposed
of by you at any time except as specifically permitted or otherwise required by
the terms of this Statement.

(b) In the event that your employment with Procter & Gamble terminates for any
reason except as set forth in Section 4(a)(ii) below prior to the vesting date
shown in the accompanying letter, you will be deemed to have received delivery
on the date of the termination of your employment a written demand by the
Company to sell to the Company within ten (10) days any of these Restricted
Shares where the conditions and restrictions have not lapsed as set forth in
paragraph 4 below at a price of ten cents ($.10) per share, which price is
subject to adjustment as hereinafter provided. For the purpose of this
subparagraph, your employment with Procter & Gamble shall not be deemed to
terminate by reason of your being on leave of absence for any purpose approved
in writing by the Company.

(c) In the event that you shall at any time attempt to sell, exchange, transfer,
pledge, hypothecate, give or otherwise dispose of any of the Restricted Shares,
or any interest therein, in violation of the terms and conditions of this
Statement, you will be required, within ten (10) days after delivery to you of a
written demand by the Company made within ninety (90) days after the occurrence
of such event, to sell to the Company all Restricted Shares then registered in
your name with respect to which the conditions and restrictions set forth in
this Statement are still in effect at a price of ten cents ($.10) per share,
which price is subject to adjustment as hereinafter provided.

(d)(i) The determination as to whether an event has occurred requiring a sale of
Restricted Shares to the Company in accordance with any provision of this
paragraph 1, paragraph 7 following or any other provision of this Statement
shall be made by the Compensation Committee (the “Committee”) in its sole
discretion, and all determinations of the Committee with respect thereto shall
in all respects be conclusive upon you and any persons claiming under or through
you.

(ii) If you shall at any time be required to sell any or all of these Restricted
Shares to the Company pursuant to any provisions of this paragraph 1, paragraph
7 following or any other provision in this Statement, you shall, effective on
the date of the delivery or deemed delivery of the Company’s demand to you,
cease to have any rights as a shareholder with respect to the Restricted Shares
so required to be sold, or any interest therein; and, without limitation, you
shall cease to be entitled to receive any future dividends upon such Restricted
Shares with record dates occurring after the date of delivery of such demand;
and in the event that for any reason you shall receive any such dividends upon
such Restricted Shares you will be required to repay the Company an amount equal
to such dividends.

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.

--------------------------------------------------------------------------------

(iii) If you shall at any time be required to sell any or all of these
Restricted Shares to the Company pursuant to the provisions of this paragraph 1,
paragraph 7 following or any other provision in this Statement, and if within
thirty (30) days after delivery or deemed delivery to you of the Company’s
demand you have not delivered a stock power or other instrument of transfer
appropriately executed in blank, together with any certificates which you may
hold representing such Restricted Shares to the Secretary of the Company at the
Executive Offices of The Procter & Gamble Company, P. O. Box 599, Cincinnati,
Ohio 45201, the Company may thereupon cause to be mailed to you, in the manner
and at the address specified in paragraph 8(b) following, its check payable to
your order in the amount of the purchase price for such shares provided for in
this Statement and direct the Transfer Agent and Registrar of the Company’s
Common Stock to make appropriate entries upon their records showing the
cancellation of such certificates and return the shares represented thereby to
the Company.

 

2. Shareholder Rights —

Effective upon the date of award of these Restricted Shares you shall for all
purposes be a holder of record of these Restricted Shares and shall thereafter
have all rights of a common shareholder with respect to such shares (including
the right to vote such shares at any meeting of common shareholders of The
Procter & Gamble Company and the right to receive all dividends paid with
respect to such shares), subject only to the conditions and restrictions imposed
by this Statement. Until such conditions and restrictions have lapsed with
respect to any restricted Shares, any certificate for such shares will bear a
legend to the effect that they were issued or transferred subject to, and may be
sold or otherwise disposed of only in accordance with, the terms of this
Statement.

 

3. Adjustments in Case of Stock Dividends, Stock Splits, etc. —

In the event that, as the result of a stock dividend, stock split,
recapitalization, merger, consolidation, reorganization, or other event, you
shall, as the owner of Restricted Shares, be entitled to new, additional or
different shares or securities: (a) such new, additional or different shares or
securities shall for all purposes be deemed “Restricted Shares,” (b) all of the
terms of this Statement shall be applicable thereto as modified by this
paragraph 3, (c) the purchase price of ten cents ($.10) per share and all of the
computations provided for in this Statement shall, if and to the extent
required, be appropriately adjusted, and (d) any certificates or other
instruments evidencing such new, additional or different shares or securities
shall bear the legend referred to in paragraph 2; provided, however, any
fractional shares and any pre-emptive or other rights or warrants to purchase
securities issued to you as a holder of Restricted Shares in connection with a
public offering will be issued to you free and clear of all conditions and
restrictions imposed by this Statement.

 

4. Lapse of Conditions and Restrictions —

(a) The conditions and restrictions set forth in paragraph 1 above shall lapse
as follows:

(i) The conditions and restrictions on the Restricted Shares shall lapse on the
dates set forth in the accompanying letter.

(ii) In the event your employment with Procter & Gamble terminates as a result
of your death or permanent disability, the conditions and restrictions on these
Restricted Shares shall lapse in their entirety.

(b) The Committee may accelerate the lapse of conditions and restrictions on all
or any part of the Restricted Shares in the case of hardship which in the sole
judgment of the Committee justifies such action.

(c) When the conditions and restrictions lapse with respect to Restricted Shares
pursuant to this paragraph 4, the Company will deliver to you, or your legal
representative in case of death, promptly after surrender of any certificate(s)
for such Restricted Shares to the Treasurer of The Procter & Gamble Company,
Cincinnati, Ohio 45201, one or more certificates for a like number of shares,
free of any legend.

--------------------------------------------------------------------------------

5. Company Right to Terminate Employment and Other Remedies —

Nothing provided herein shall be construed to affect in any way the right or
power of the Company to terminate your employment at any time for any reason
with or without cause, nor to preclude the Company from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part.

 

6. Definitions —

(a) The term “Company” as used in this Statement shall mean the corporation
which awarded the Restricted Shares to you.

(b) The term “Procter & Gamble” as used in this Statement shall include The
Procter & Gamble Company and all corporations, more than 50% of whose capital
stock entitled to vote for the election of directors is owned or controlled,
directly or indirectly, by The Procter & Gamble Company or by any corporation so
controlled by The Procter & Gamble Company, if and as long as such corporations
are so controlled.

 

7. Additional Documents —

a It is the intention of the Company that this grant of Restricted Shares shall
meet the requirements of, and result in the application of, the rules prescribed
by Section 83 of the Internal Revenue Code of 1986, as in effect at the date
hereof, and applicable Regulations thereunder. Accordingly, each and every
provision shall be construed and interpreted in such manner as to conform with
such intention and the Company reserves the right to execute and to require you
to execute any further agreements or other instruments which may be effective as
of the date of award of these Restricted Shares, including, but without
limitation, an instrument modifying or correcting any provision hereof, or of
the letter advising you of the award or any action taken hereunder or
contemporaneously herewith, and to take any other action, which may be effective
as of the date of award of these Restricted Shares, that, in the opinion of
counsel for the Company, may be necessary or desirable to carry out such
intention.

(b) If you fail, refuse or neglect to execute and deliver any instrument or
document or to take any action requested by the Company or Committee to be
executed or taken by you pursuant to the provisions of paragraph 7(a) above for
a period of thirty (30) days after the date of such request, the Committee may
require you, within ten (10) days after delivery to you of a written demand by
the Company, to sell to the Company all of the Restricted Shares then registered
in your name with respect to which the conditions and restrictions set forth in
this Statement are still in effect at a price of ten cents ($.10) per share,
which price is subject to adjustment as herein provided.

 

8. Notices —

(a) Any notice to the Company under or pursuant to the conditions and
restrictions of this Statement shall be deemed to have been delivered to the
Company when delivered in person to the Secretary of the Company or when
deposited in the mails, by certified or registered mail, addressed to the
Secretary of the Company at the Executive Offices of The Procter & Gamble
Company, P.O. Box 599, Cincinnati, Ohio 45201, or such other address as the
Company may from time to time designate in writing by notice to you given
pursuant to paragraph 8(b) hereof.

(b) Any notice or demand to you under or pursuant to any provisions of this
Statement shall be deemed to have been delivered to you when delivered to you in
person or when deposited in the mails, by certified or registered mail,
addressed to you at the address on record in the Shareholder Services Department
or such other address as you may from time to time designate in writing by
notice to the Company given pursuant to paragraph 8(a) above.

 

9. The Procter & Gamble 2001 Stock and Incentive Compensation Plan —

The Restricted Shares have been awarded to you pursuant to The Procter & Gamble
2001 Stock and Incentive Compensation Plan adopted and approved by the
shareholders of The Procter & Gamble Company on October 9, 2001, and such shares
and your ownership thereof shall be in all respects subject to the terms of such
Plan, the terms and provisions of which are incorporated herein by reference as
applicable.

--------------------------------------------------------------------------------

10. Successors and Assigns —

The provisions of this Statement shall be binding upon and inure to the benefit
of

(a) the Company, its successors and assigns, and

(b) you and, to the extent applicable, your legal representative.

 

11. Governing Law —

The validity, interpretation, performance and enforcement of the conditions and
restrictions contained in this Statement and your rights in, to and under the
Restricted Shares shall for all purposes be governed by the laws of the State of
Ohio.

 

12. Additional Information Concerning Common Stock —

The following information which appears on certificates representing shares of
the Common Stock of the Company is provided pursuant to Section 1701.24(F) of
the Ohio Revised Code as pertinent to Restricted Shares awarded or held without
issuance of certificates:

(a) The Procter & Gamble Company is organized under the laws of the State of
Ohio.

(b) The Restricted Shares are fully paid and non-assessable shares of the Common
Stock without par value of the Company.

(c) The name of the person to whom the shares are issued and the number of
shares so issued and made subject to this Statement of Conditions and
Restrictions are set forth in the accompanying letter.

(d) A copy of the express terms of such shares and of all other classes and
series of shares authorized will be mailed to any shareholder without charge
within five (5) days after receipt from such shareholder of a written request
therefor addressed to the Secretary of The Procter & Gamble Company, P.O. Box
599, Cincinnati, Ohio 45201.

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Form RTD—C

[INSERT DATE]

[INSERT NAME]

Subject: Award of Restricted Stock Units

This is to advise you that The Procter & Gamble Company, an Ohio corporation, is
awarding you with Restricted Stock Units, on the dates and in the amounts listed
below, pursuant to The Procter & Gamble 2001 Stock and Incentive Compensation
Plan, and subject to the attached Statement of Terms and Conditions Form RTD—C.

 

Grant Date:

   [INSERT DATE OF GRANT]

Forfeiture Date:

   [Date of Retirement eligibility]

Original Settlement Date:

   [One year after Separation from Service]

Number of Restricted Stock Units:

   [INSERT NUMBER GRANTED]

Paragraph 3(a) of Statement of Terms and Conditions Form RTD—C [is/is not]
waived.

As you will see from the Statement of Terms and Conditions Form RTD—C, under
certain circumstances you may agree with The Procter & Gamble Company to delay
the settlement of your Restricted Stock Units beyond the Original Settlement
Date. You may want to consult your personal tax advisor before making a decision
about this matter.

 

THE PROCTER & GAMBLE COMPANY

 

 

Steven W. Jemison, Secretary

For the Compensation Committee

I hereby accept the Award of Restricted Stock Units set forth above in
accordance with and subject to the terms of The Procter & Gamble 2001 Stock and
Incentive Compensation Plan and the attached Statement of Terms and Conditions
for Restricted Stock Units, with which I am familiar. I agree that the Award of
Restricted Stock Units, The Procter & Gamble 2001 Stock and Incentive
Compensation Plan, and the attached Statement of Terms and Conditions for
Restricted Stock Units together constitute an agreement between the Company and
me in accordance with the terms thereof and hereof, and I further agree that any
legal action related to this Award of Restricted Stock Units may be brought in
any federal or state court located in Hamilton County, Ohio, USA, and I hereby
accept the jurisdiction of these courts and consent to service of process from
said courts solely for legal actions related to this Award of Restricted Stock
Units.

I hereby reject the Award of Restricted Stock Units set forth above.

 

 

Date   Signature   P&G E-mail Address

 

 

12-31-08

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Form RTD—C

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

The Restricted Stock Units awarded to you as set forth in the letter you
received from the Company (your “Award Letter”), and your ownership thereof, are
subject to the following terms and conditions.

1. Definitions.

For purposes of this Statement of Terms and Conditions for Restricted Stock
Units (“Terms and Conditions”), all capitalized terms not defined in these Terms
and Conditions will have the meanings described in The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”), and the following terms will
have the following meanings.

(a) “Agreed Settlement Date” has the meaning described in Section 2(c);

(b) “Data” has the meaning described in Section 10;

(c) “Disability” means termination of employment under the permanent disability
provision of any retirement plan of Procter & Gamble;

(d) “Dividend Equivalents” has the meaning described in Section 4;

(e) “Forfeiture Date” is the date identified as such in your Award Letter;

(f) “Forfeiture Period” means the period from the Grant Date until the
Forfeiture Date.

(g) “Grant Date” means the date a Restricted Stock Unit was awarded to you, as
identified in your Award Letter;

(h) “Original Settlement Date” is the date identified as such in your Award
Letter, as adjusted, if applicable, by Section 2;

(i) “Post-Forfeiture Period” means the period from the Forfeiture Date until the
later of the Original Settlement Date or the Agreed Settlement Date;

(j) “Procter & Gamble” means the Company and/or its Subsidiaries;

(k) “Restricted Stock Unit” means an unfunded, unsecured promise by the Company,
in accordance with these Terms and Conditions and the provisions of the Plan, to
issue to you one share of Common Stock on the later of the Original Settlement
Date or the Agreed Settlement Date.

(l) “Separation from Service” shall have the meaning provided under Section 409A
of the Code and regulations thereto.

 

12-31-08

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Form RTD—C

 

2. Transfer and Restrictions.

(a) Except as set forth in Section 3 herein, neither Restricted Stock Units nor
your interest in them may be sold, exchanged, transferred, pledged,
hypothecated, given or otherwise disposed of by you at any time, except by will
or by the laws of descent and distribution. Any attempted transfer of a
Restricted Stock Unit, whether voluntary or involuntary on your part, will
result in the immediate forfeiture to the Company, and cancellation, of the
Restricted Stock Unit (including all rights to Dividend Equivalents).

(b) During the Forfeiture Period, your Restricted Stock Units (including all
rights to receive Dividend Equivalents) will be forfeited and cancelled if you
leave your employment with Procter & Gamble for any reason, except due to:
(i) your Disability; (ii) death; or (iii) in certain circumstances, your Special
Separation. In the event of your death or Disability during the Forfeiture
Period, your Forfeiture Date will automatically and immediately become, without
any further action by you or the Company, the date of your death or Disability.
In the event of your Special Separation during the Forfeiture Period, your
Restricted Stock Units will be forfeited and cancelled unless otherwise agreed
to in writing by the Company.

(c) At any time at least one calendar year prior to the Original Settlement
Date, you and the Company may agree to postpone the date on which you are
entitled to receive one share of Common Stock for each Restricted Stock Unit you
hold, according to the deferral terms in place at the time, and provided the new
date (the “Agreed Settlement Date”) is at least five years from the Original
Settlement Date.

(d) Upon your death or upon your Disability that satisfies the definition of
“disability” under Internal Revenue Code Section 409A (“Section 409A”) at any
time while you hold Restricted Stock Units and/or Dividend Equivalents, your
Original Settlement Date (or Agreed Settlement Date, if applicable) will
automatically and immediately become, without any further action by you or the
Company, the date of your death or Disability, as applicable.

(e) Upon the occurrence of a Change in Control, the Forfeiture Date (if any)
shall become the date the Change in Control occurred. If the Change in Control
occurrence meets the definitional requirements of a change in control as defined
under Section 409A, your Original Settlement Date (or Agreed Settlement Date, if
applicable) will become the date the change in Control occurred, and the award
will be settled in accordance with the terms of the Plan. If the Change in
Control does not meet the Section 409A requirements, your Original Settlement
Date (or Agreed Settlement Date, if applicable) will not be changed.

(f) From time to time, the Company and/or the Committee may establish procedures
with which you must comply in order to accept an award of Restricted Stock
Units, to agree to an Agreed Settlement Date, or to settle your Restricted Stock
Units, including requiring you to do so by means of electronic signature, or
charging you an administrative fee for doing so.

(g) Once your Restricted Stock Units have been settled by delivery to you of an
equivalent number of shares of Common Stock, or you have exercised the
conversion right described in Section 3 below, the Restricted Stock Units will
have no further value, force or effect and you will cease to receive Dividend
Equivalents associated with the Restricted Stock Units.

 

12-31-08

--------------------------------------------------------------------------------

Form RTD—C

 

3. Conversion to Deferred Compensation Plan

(a) You are entitled to convert all or a portion of the Restricted Stock Units
awarded to you as set forth in the letter and Dividend Equivalents into a
contribution to The Procter & Gamble Deferred Compensation Plan (the “Deferred
Compensation Plan”) once you reach age 50. Any such conversions must be
completed during one of the Company’s open window periods for executives and are
subject to the Company’s Insider Trading Policy and any other restrictions in
place at the time of conversion (claw-back provisions, share ownership
requirements, etc.).

(b) The value of any contribution to the Deferred Compensation Plan resulting
from the conversion of Restricted Stock Units and Dividend Equivalents shall be
determined by multiplying the number of Restricted Stock Units to be converted
by the closing price of the Company’s common stock on the New York Stock
Exchange on the date of conversion.

(c) Contributions to the Deferred Compensation Plan resulting from the
conversion of Restricted Stock Units will be placed into a notional account and
administered in accordance with the terms and conditions set forth in that plan,
as amended.

4. Confidentiality and Non-Competition

(a) In order to better protect the goodwill of Procter & Gamble and to prevent
the disclosure of Procter & Gamble’s trade secrets and confidential information,
and thereby help ensure the long-term success of Procter & Gamble’s business, in
consideration of your being awarded Restricted Stock Units, you (without prior
written consent of Procter & Gamble), will not engage in any activity or provide
any services, whether as a director, manager, supervisor, employee, advisor,
consultant or otherwise, for a period of three (3) years following the date your
employment with Procter & Gamble is terminated in connection with the
manufacture, development, advertising, promotion, or sale of any product which
is the same as or similar to or competitive with any products of Procter &
Gamble (including both existing products as well as products known to you, as a
consequence of your employment with Procter & Gamble, to be in development):

(i) with respect to which your work has been directly concerned at any time
during the two (2) years preceding the termination of your employment with
Procter & Gamble; or

(ii) with respect to which, during the two (2) years preceding the termination
of your employment with Procter & Gamble, you, as a consequence of your job
performance and duties, acquired knowledge of trade secrets or other
confidential information of Procter & Gamble.

For purposes of this Section 3(a), it will be conclusively presumed that you
have knowledge of information you were directly exposed to through actual
receipt or review of memoranda or documents containing such information, or
through attendance at meetings at which such information was discussed or
disclosed.

(b) The provisions of Section 3(a) are not in lieu of, but are in addition to
your continuing obligation (which you acknowledge by accepting an award of
Restricted Stock Units) to not use or disclose Procter & Gamble’s trade secrets
or confidential information known to you until any particular trade secret or
confidential information becomes generally known (through no fault of yours). As
used in this Section 3(b), “generally known” means known throughout the domestic
United States industry or, if you have job responsibilities partially or
entirely outside of the United States, the appropriate domestic United States
and/or appropriate foreign country or countries’ industry(ies). Information
regarding products in development, in test marketing, or being marketed or
promoted in

 

12-31-08

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Form RTD—C

 

a discrete geographic region, which information Procter & Gamble is considering
for broader use, will not be deemed to be “generally known” until such broader
use is actually commercially implemented. As used in this Section, “trade
secrets or other confidential information” also includes personnel knowledge
about a manager, or managers, of Procter & Gamble or its subsidiaries gained in
the course of your employment with Procter & Gamble or its subsidiaries
(including personnel ratings or rankings, manager or peer evaluations,
performance records, special skills or abilities, compensation, work and
development plans, training, nature of specific project and work assignments, or
specialties developed as a result of such assignments) which directly or
indirectly affords you a confidential basis to solicit, encourage, or
participate in soliciting any manager, or managers, of Procter & Gamble or any
subsidiary to terminate his or her relationship with Procter & Gamble or that
subsidiary.

(c) By accepting an award of Restricted Stock Units, you agree that, if you
were, without authority, to use or disclose Procter & Gamble’s trade secrets or
confidential information or threaten to do so, Procter & Gamble would be
entitled to injunctive and other appropriate relief to prevent you from doing
so. You further agree that the harm caused to Procter & Gamble by the breach or
anticipated breach of this Section 3(c) is, by its nature, irreparable because,
among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. You agree that any interim or final equitable relief
entered by a court of competent jurisdiction will, at the request of Procter &
Gamble, be entered on consent and enforced by any court having jurisdiction over
you, without prejudice to any rights you or Procter & Gamble may have to appeal
from the proceedings which resulted in any grant of such relief.

(d) If any of the provisions contained in Sections 3(a) through (c) are for any
reason, whether by application of existing law or law which may develop after
your acceptance of an award of Restricted Stock Units, determined by a court of
competent jurisdiction to be overly broad as to scope of activity, duration, or
territory, then by accepting an award of Restricted Stock Units you agree to
join Procter & Gamble in requesting such court to construe such provision by
limiting or reducing it so as to be enforceable to the extent compatible with
then-applicable law. If any one or more of the provisions contained in
Section 3(a) through (c) are determined by a court of competent jurisdiction to
be invalid, void or unenforceable, then the remainder of the provisions will
remain in full force and effect and will not be affected, impaired or
invalidated in any way.

5. Dividend Equivalents.

As a holder of Restricted Stock Units, during the period from the Grant Date
until the Original Settlement Date or the Agreed Settlement Date, whichever is
later, each time a cash dividend or other cash distribution is paid with respect
to Common Stock, you will receive additional Restricted Stock Units (“Dividend
Equivalents”). The number of such additional Restricted Stock Units will be
determined as follows: multiply the number of Restricted Stock Units currently
held by the per share amount of the cash dividend or other cash distribution on
the Common Stock, and then divide the result by the price of the Common Stock on
the date of the dividend or distribution. These Dividend Equivalent Restricted
Stock Units will be subject to the same terms and conditions as the original
Restricted Stock Units that gave rise to them, including forfeiture and
settlement terms, except that if there is a fractional number of Dividend
Equivalent Restricted Stock Units on the date they are to be settled, you will
receive one share of Common Stock for the fractional Dividend Equivalent
Restricted Stock Units.

 

12-31-08

--------------------------------------------------------------------------------

Form RTD—C

 

6. Voting and Other Shareholder Rights.

A Restricted Stock Unit is not a share of Common Stock, and thus you are not
entitled to any voting, dividend or other rights as a shareholder of the Company
with respect to the Restricted Stock Units you hold.

7. Adjustments in Case of Stock Dividends, Stock Splits, Etc.

In the event of a future reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering, share
exchange, reclassification, distribution, spin-off, or other change affecting
the corporate structure, capitalization or Common Stock, the number of
Restricted Stock Units you hold will be adjusted appropriately and equitably to
prevent dilution or enlargement of your rights.

8. Tax Withholding.

To the extent Procter & Gamble is required to withhold federal, state, local or
foreign taxes in connection with your Restricted Stock Units or Dividend
Equivalents, the Committee may require you to make such arrangements as
Procter & Gamble may deem appropriate for the payment of such taxes required to
be withheld, including without limitation, relinquishment of some of the shares
of Common Stock that would otherwise be given to you. However, regardless of any
action taken by Procter & Gamble with respect to any income tax, social
insurance, payroll tax, or other tax, by accepting a Restricted Stock Unit or
Dividend Equivalent, you acknowledge that the ultimate liability for any such
tax owed by you is and remains your responsibility, and that Procter & Gamble
makes no representations about the tax treatment of your Restricted Stock Units
or Dividend Equivalents, and does not commit to structure any aspect of the
Restricted Stock Units or Dividend Equivalents to reduce or eliminate your tax
liability.

9. Suspension Periods and Termination.

The Company reserves the right from time to time to temporarily suspend your
right to settle your Restricted Stock Units for shares of Common Stock where
such suspension is deemed by the Company as necessary or appropriate and to the
extent such action does not result in immediate taxation and penalties under
Section 409A.

10. Procter & Gamble Right to Terminate Employment and Other Remedies.

(a) Nothing in these Terms and Conditions, or the fact that you have been
awarded Restricted Stock Units, affects in any way the right or power of
Procter & Gamble to terminate your employment at any time for any reason, with
or without cause, or precludes Procter & Gamble from taking any action or
enforcing any remedy available to it with respect to any action or conduct on
your part. Without limiting the previous sentence, the Committee may, for
example, suspend or terminate any outstanding Restricted Stock Units for actions
taken by you if the Committee determines that you have acted significantly
contrary to the best interests of Procter & Gamble or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best
interests of Procter & Gamble or its subsidiaries” includes without limitation
any action taken or threatened by you that the Committee determines has, or is
reasonably likely to have, a significant adverse impact on the reputation,
goodwill, stability, operation, personnel retention and management, or business
of Procter & Gamble or any subsidiary. This paragraph is in addition to any
remedy Procter & Gamble or a subsidiary may have at law or in equity, including
without limitation injunctive and other appropriate relief.

 

12-31-08

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Form RTD—C

 

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is
established voluntarily by The Procter & Gamble Company, is discretionary in
nature, and may be amended, suspended or terminated at any time; (ii) the award
of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units,
or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units
have been awarded repeatedly in the past; (iii) all decisions with respect to
future Restricted Stock Unit awards, if any, will be at the sole discretion of
the Company; (iv) your participation in the Plan is voluntary; (v) Restricted
Stock Units are an extraordinary item and not part of normal or expected
compensation or salary for any purpose, including without limitation calculating
any termination, severance, resignation, redundancy, or end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments; (vi) in the event that your employer is not the Company, the award of
Restricted Stock Units will not be interpreted to form an employment
relationship with the Company; and, furthermore, the award of Restricted Stock
Units will not be interpreted to form an employment contract with any Procter &
Gamble entity; (vii) the future value of Common Stock is unknown and cannot be
predicted with certainty; and (viii) no claim or entitlement to compensation or
damages arises from termination or forfeiture of Restricted Stock Units, or
diminution in value of Restricted Stock Units or Common Stock received in
settlement thereof, and you irrevocably release Procter & Gamble from any such
claim that may arise.

11. Data Privacy.

By accepting a Restricted Stock Unit, you explicitly and unambiguously consent
to the collection, use and transfer, in electronic or other form, of your
personal data as described in this document by and among, as applicable, any
Procter & Gamble entity or third party for the purpose of implementing,
administering and managing your participation in the Plan. You understand that
Procter & Gamble holds certain personal information about you, including without
limitation your name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in a Procter & Gamble entity, details
of all options, Restricted Stock Units, or any other entitlement to shares of
stock awarded, canceled, exercised, vested, unvested or outstanding in your
favor, for the purpose of implementing, administering and managing the Plan
(“Data”). You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that
these recipients may be located in your country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than
your country. You understand that you may request a list with the names and
addresses of any potential recipients of Data by contacting your local human
resources representative. You authorize the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data to any broker or other third party
with whom you may elect to deposit any shares of Common Stock in connection with
the settlement of your Restricted Stock Units. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data, or refuse or withdraw the consents contained
in this paragraph, in any case without cost, by contacting in writing your local
human resources representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

 

12-31-08

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Form RTD—C

 

12. Notices.

(a) Any notice to Procter & Gamble that is required or appropriate with respect
to Restricted Stock Units held by you must be in writing and addressed to:

 

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

or such other address as Procter & Gamble may from time to time provide to you
in writing.

(b) Any notice to you that is required or appropriate with respect to Restricted
Stock Units held or to be awarded to you will be provided to you in written or
electronic form at any physical or electronic mail address for you that is on
file with Procter & Gamble.

13. Successors and Assigns.

These Terms and Conditions are binding on, and inure to the benefit of, (a) The
Procter & Gamble Company and its successors and assigns; and (b) you and, if
applicable, the representative of your estate.

14. Governing Law.

The validity, interpretation, performance and enforcement of these Terms and
Conditions, the Plan and your Restricted Stock Units will be governed by the
laws of the State of Ohio, U.S.A. without giving effect to any other
jurisdiction’s conflicts of law principles. With respect to any dispute
concerning these Terms and Conditions, the Plan and your Restricted Stock Units,
you consent to the exclusive jurisdiction of the federal or state courts located
in Hamilton County, Ohio, U.S.A.

15. The Plan.

All Restricted Stock Units awarded to you have been awarded under the Plan.
Certain provisions of the Plan may have been repeated or emphasized in these
Terms and Conditions; however, all terms of the Plan apply to you and your
Restricted Stock Units whether or not they have been called out in these Terms
and Conditions.

 

16. Effect of These Terms and Conditions.

These Terms and Conditions and the terms of the Plan, which are incorporated
herein by reference, describe the contractual rights awarded to you in the form
of Restricted Stock Units, and the obligations imposed on you in connection with
those rights. No right exists with respect to Restricted Stock Units except as
described in these Terms and Conditions and the Plan.

 

12-31-08