EX-10.32






Exhibit 10.32




REYNOLDS AMERICAN INC.

EQUITY INCENTIVE AWARD PLAN FOR DIRECTORS OF

REYNOLDS AMERICAN INC.




DEFERRED STOCK UNIT AGREEMENT





 







DATE OF GRANT: ___________________________




W I T N E S S E T H:




     1. Grant. Pursuant to the provisions of the Equity Incentive Award Plan For Directors
of Reynolds American Inc. (the “Plan”) Reynolds American Inc. (the “Company”) on the above date has
granted to



__________________________ (the “Grantee”),



subject to the terms and conditions which follow and the terms and conditions of the Plan, a Grant
of




__________ Deferred Stock Units.



A copy of the Plan has been provided to the Grantee and is made a part of this Agreement with the
same effect as if set forth in the Agreement itself. All capitalized terms used below shall have
the meaning set forth in the Plan, unless the context requires a different meaning.




     2. Value of Deferred Stock Units. Each Deferred Stock Unit shall be equal in value to
one share of Common Stock.



     3. Dividends. As of the date any dividend is paid to shareholders of Common Stock,
the Grantee shall be credited with additional Deferred Stock Units equal to the number of shares of
Common Stock (including fractions of a share) that could have been purchased at the closing price
of Common Stock on such date with the dividend paid on the number of shares of Common Stock to
which the Grantee’s Deferred Stock Units are then equivalent. In case of dividends paid in
property, the dividend shall be deemed to be the fair market value of the property at the time of
distribution of the dividend, as determined by the Committee.



     4. Payment of Deferred Stock Units.




	 	(a)	 	Payment of the Grantee’s Deferred Stock Units shall be made either in a lump
sum or in the number of annual installments (not exceeding 10) according to the
election made by the Grantee on the initial election form provided by the Company to
the





 









 






	 	 	 	Grantee in December 2006. Such election is not irrevocable; provided,
however, that any subsequent election that changes the timing or form of the
Grantee’s previous distribution election must comply with Section 409A of the Code.

	 
	 	(b)	 	Distribution of the Grantee’s Deferred Stock Units shall be made in cash or
stock. If distribution is made in cash, the amount of distribution shall be determined
by multiplying the number of Deferred Stock Units attributable to the installment by
the average of the closing price in Common Stock on each business day in the month of
December immediately prior to the year in which the installment is to be paid.

	 
	 	(c)	 	In the event the Grantee has elected to receive distribution of his or her
Deferred Stock Units in more than one installment, the amount of each installment shall
be determined by multiplying the remaining number of Deferred Stock Units by a
fraction, the numerator of which is one, and the denominator of which is the number of
installments yet to be paid.






     5. Transferability. Other than as specially provided in the Plan with regard to the
death of the Grantee, this Agreement and any benefit provided or accruing hereunder shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge; and any attempt to do so shall be void. No such benefit shall, prior to receipt thereof
by the Grantee, be in any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Grantee.



     6. Consideration to the Company. In consideration of the Grant by the Company, the
Grantee agrees to render faithful and efficient services to the Company, with such duties and
responsibilities as the Company shall from time to time prescribe. Nothing in this Agreement or in
the Plan shall confer upon the Grantee any right to continue in the service of the Company as a
director or in any other capacity or shall interfere with or restrict in any way the rights of the
Company and its shareholders, which are hereby expressly reserved, in connection with the removal
of the Grantee from the Board of Directors of the Company at any time for any reason whatsoever,
with or without cause, subject to applicable law and the Company’s articles of incorporation and
bylaws.



     7. Application of Laws. The Grant and the obligations of the Company hereunder shall
be subject to all applicable laws, rules and regulations and to such approvals of any governmental
agencies as may be required. This Agreement is intended to comply with Section 409A of the Code
and shall be construed and interpreted in accordance with such intent.



     8. Taxes. Any taxes required by federal, state, or local laws to be withheld by the
Company on the grant or payment of Deferred Stock Units shall be paid to the Company before payment
of the Deferred Stock Units is made to the Grantee.



     9. Notices. Any notices required to be given hereunder to the Company shall be
addressed to the Corporate Secretary, Reynolds American Inc., P. O. Box 2990, 401 North Main
Street, Winston-Salem, NC 27102-2990, and any notice required to be given hereunder to the Grantee
shall be sent to the Grantee’s address as shown on the records of the Company.



 









 





     10. Administration and Interpretation. In consideration of the Grant, the Grantee
specifically agrees that the Committee shall have the exclusive power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation and application of
the Plan and Agreement as are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretation and determinations made by the Committee shall be final,
conclusive, and binding upon the Grantee, the Company and all other interested persons. No member
of the Committee shall be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or the Agreement. The Committee may delegate its interpretive
authority to an officer or officers of the Company.



     11. Other Provisions.




	 	(a)	 	Titles are provided herein for convenience only and are not to serve as a basis
for interpretation of the Agreement.

	 
	 	(b)	 	This Agreement may be amended only by a writing executed by the parties hereto
which specifically states that it is amending this Agreement.

	 
	 	(c)	 	THE LAWS OF THE STATE OF NORTH CAROLINA SHALL GOVERN THE INTERPRETATION,
VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT, REGARDLESS OF THE LAW THAT
MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF LAWS.






     IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Grantee have executed
this agreement as of the Date of Grant first above written.



	 	 	 	 	 	 	 
	 

	 	 	 	 	 	REYNOLDS AMERICAN INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Authorized Signatory
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Grantee
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Grantee’s Taxpayer Identification Number:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Grantee’s Home Address: