Document:

EX-10.1

 

EXHIBIT
(10-1)

RELATED
CORRESPONDENCE AND TERMS AND CONDITIONS

[GRANT_DATE]            [GLOBALID]

[FIRST_NAME] [MIDDLE_NAME] [LAST_NAME]]

Subject: NON-STATUTORY STOCK OPTION SERIES 07-AA

In recognition of your contributions to the future success of the business, the Company
hereby grants you an option to purchase, 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 and the Exercise Instructions in place as may be revised
from time to time, 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:
	 	[EXPIRATION DATE]
	 

	 	Option Vest Date:
	 	[VEST DATE]
	 

	 	Acceptance Deadline:
	 	[ACCEPTANCE DEADLINE]

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.

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
	 
	 	 
	 

	 	James J. Johnson
	 
	 	 
	 

	 	Secretary for the Compensation and Leadership

Development Committee

ATTACHMENTS

To Accept Your Stock Option

Read and check each of the boxes below:

	 	 	 	 	 
	o

	 	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).
	 
	 	 	 	 
	o	 	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:

	 	 	 
	o

	 	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.

 

 

Employee Acknowledgement and Consent Form

I understand that I am eligible to receive a grant of stock options under The Procter & Gamble 2001
Stock and Incentive Compensation Plan (the “Plan”).

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 Plan.

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 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 Plan (“Data”). I 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 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 Plan, 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. I understand that Data will be
held only as long as is necessary to implement, administer and manage my participation in the Plan.
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 Plan. 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 option evidenced hereby, I acknowledge
that: i) the Plan is 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
under the Plan is voluntary and occasional and does not create any contractual or other right to
receive future grants of options, or benefits in lieu of options, even if options have been granted
repeatedly in the past; iii) all decisions with respect to future grants of options, if any, will
be at the sole discretion of P&G; iv) my participation in the Plan is voluntary; v) the option 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 will not be
interpreted to form an employment relationship with P&G; and furthermore, the grant of options will
not be interpreted to form an employment contract with my Employer; vii) the future value of the
shares purchased under the Plan 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 option will have no value; iix) my participation in the Plan 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 the diminution
in value of the option 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 grant,
including the grant, vesting or exercise of the option, the subsequent sale of shares acquired
pursuant to such exercise 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 to reduce or eliminate my liability for Tax-Related Items.

Prior to exercise of the option, 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 Plan 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.

 

 

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.

 

 

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.

 

 

\

Form OPN

[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 OPN.

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]

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

As you will see from the Statement of Terms and Conditions Form OPN, 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
	 
	 	 
	 

	 	James J. Johnson, Secretary
	 

	 	For the Compensation Committee

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

	 	 	 	 	 
	 
	 	 
	 	 
	Date
	 	Signature
	 	P&G E-mail Address

 

 

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.

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) 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. During the Settlement
Period, if you leave your employment with Procter & Gamble for any reason other than: (i)
Disability; (ii) Special Separation; or (iii) retirement in accordance with the provisions
of any appropriate retirement plan of Procter & Gamble, your Original Settlement Date or
Agreed Settlement Date, as applicable, will automatically and immediately become, without
any further action by you or the Company, the date of your termination of employment. In
the event of your Disability or Special Separation during the Settlement Period, unless
otherwise agreed to in writing by the Company, your Original Settlement Date or Agreed
Settlement Date, as applicable, will automatically and immediately become, without any
further action by you or the Company, the date of your Disability or Special Separation, as
applicable. In the event of your retirement in accordance with the provisions of any
appropriate retirement plan of Procter & Gamble during the Settlement Period, you will
retain your Restricted Stock Units subject to the Plan and these Terms and Conditions.

(c) Upon your death or the occurrence of a Change in Control at any time while you hold
Restricted Stock Units and/or Dividend Equivalents, your Original Settlement Date or Agreed
Settlement Date, as applicable, will automatically and immediately become, without any
further action by you or the Company, the date of your death or of the Change in Control, as
applicable.

(d) 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.

(e) 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.

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.

 

 

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.

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 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 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.

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.

 

 

Form RTD

[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.

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]

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

As you will see from the Statement of Terms and Conditions Form RTD, 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
	 
	 	 
	 

	 	James J. Johnson, Secretary
	 

	 	For the Compensation Committee

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

	 	 	 	 	 
	 

	 	 
	 	 
	Date

	 	Signature
	 	P&G E-mail Address

 

 

 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.

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; or (iii) in certain circumstances, your Special Separation. In the event
of your Disability during the Forfeiture Period, unless otherwise agreed to in writing by
the Company, your Original Settlement Date will automatically and immediately become,
without any further action by you or the Company, the date of your 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. During the Post-Forfeiture Period, if you leave
your employment with Procter & Gamble for any reason other than: (i) Disability; (ii)
Special Separation; or (iii) retirement in accordance with the provisions of any appropriate
retirement plan of Procter & Gamble, your Original Settlement Date or Agreed Settlement
Date, as applicable, will automatically and immediately become, without any further action
by you or the Company, the date of your termination of employment. In the event of your
Disability or Special Separation during the Post-Forfeiture period, unless otherwise agreed
to in writing by the Company, your Original Settlement Date or Agreed Settlement Date, as
applicable, will automatically and immediately become, without any further action by you or
the Company, the date of your Disability or Special Separation, as applicable. In the event
of your retirement in accordance with the provisions of any appropriate retirement plan of
Procter & Gamble during the Post-Forfeiture Period, you will retain your Restricted Stock
Units subject to the Plan and these Terms and Conditions.

(d) Upon your death or the occurrence of a Change in Control at any time while you hold
Restricted Stock Units and/or Dividend Equivalents, your Original Settlement Date or Agreed
Settlement Date, as applicable, will automatically and immediately become, without any
further action by you or the Company, the date of your death or of the Change in Control, as
applicable.

(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.

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.

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,

 

 

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.

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 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.

 

 

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.

 

 

Form RTD-A

[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-A.

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]

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

As you will see from the Statement of Terms and Conditions Form RTD-A, 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
	 
	 	 
	 

	 	James J. Johnson, Secretary
	 

	 	For the Compensation Committee

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

	 	 	 	 	 
	 
	 	 
	 	 
	Date
	 	Signature
	 	P&G E-mail Address

 

 

 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.

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, or

(ii) in certain circumstances, your Special Separation. In the event of your Disability
during the Forfeiture Period, unless otherwise agreed to in writing by the Company, your
Original Settlement Date will automatically and immediately become, without any further
action by you or the Company, the date of your 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. During the Post-Forfeiture Period, if you leave
your employment with Procter & Gamble for any reason other than: (i) Disability; (ii)
Special Separation; or (iii) retirement in accordance with the provisions of any appropriate
retirement plan of Procter & Gamble, your Original Settlement Date or Agreed Settlement
Date, as applicable, will automatically and immediately become, without any further action
by you or the Company, the date of your termination of employment. In the event of your
Disability or Special Separation during the Post-Forfeiture period, unless otherwise agreed
to in writing by the Company, your Original Settlement Date or Agreed Settlement Date, as
applicable, will automatically and immediately become, without any further action by you or
the Company, the date of your Disability or Special Separation, as applicable. In the event
of your retirement in accordance with the provisions of any appropriate retirement plan of
Procter & Gamble during the Post-Forfeiture Period, you will retain your Restricted Stock
Units subject to the Plan and these Terms and Conditions.

(d) Upon your death or the occurrence of a Change in Control at any time while you hold
Restricted Stock Units and/or Dividend Equivalents, your Original Settlement Date or Agreed
Settlement Date, as applicable, will automatically and immediately become, without any
further action by you or the Company, the date of your death or of the Change in Control, as
applicable.

(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.

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.

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,

 

 

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.

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 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.

 

 

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.

 

 

Form RTN

[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 RTN.

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]

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

	 	 	 
	 

	 	THE PROCTER & GAMBLE COMPANY
	 
	 	 
	 

	 	James J. Johnson, Secretary
	 

	 	For the Compensation Committee

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

	 	 	 	 	 
	 
	 	 
	 	 
	Date
	 	Signature
	 	P&G E-mail Address

 

 

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.

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).

 

 

(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; or
(ii) in certain circumstances, your Special Separation. In the event of your Disability
during the Forfeiture Period, unless otherwise agreed to in writing by the Company, your
Original Settlement Date will automatically and immediately become, without any further
action by you or the Company, the date of your 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) During the Post-Forfeiture Period, if you leave your employment with Procter & Gamble
for any reason other than: (i) Disability; (ii) Special Separation; or (iii) retirement in
accordance with the provisions of any appropriate retirement plan of Procter & Gamble, your
Original Settlement Date will automatically and immediately become, without any further
action by you or the Company, the date of your termination of employment. In the event of
your Disability or Special Separation during the Post-Forfeiture Period, unless otherwise
agreed to in writing by the Company, your Original Settlement Date will automatically and
immediately become, without any further action by you or the Company, the date of your
Disability or Special Separation, as applicable. In the event of your retirement in
accordance with the provisions of any appropriate retirement plan of Procter & Gamble during
the Post-Forfeiture Period, you will retain your Restricted Stock Units subject to the Plan
and these Terms and Conditions.

(d) Upon your death or the occurrence of a Change in Control 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 of the Change in Control, as applicable.

(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

(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.

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.

 

 

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

 

 

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.

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.EX-10.10

 

EXHIBIT
(10-10)

Short Term Achievement Reward Program

The Short Term Achievement Reward (“STAR”) Program is The Procter & Gamble Company’s (the “Company”
or “P&G”) annual incentive program designed to support outstanding business results of the Company
and its subsidiaries. Awards are made pursuant to the authority delegated by the Board of
Directors to the Compensation & Leadership Development Committee (the “Committee”) for awarding
additional remuneration and the 2001 Stock and Incentive Compensation Plan and/or the 2004 Gillette
Long Term Incentive Plan.

I. ELIGIBILITY

Eligibility is based on job level and the requirement of working at least four weeks during the
fiscal year. STAR participants who do not work a full schedule (leaves of absence, disability, and
less-than-full time schedules) in the fiscal year in which the award is payable may have awards
pro-rated.

II. CALCULATION

The individual STAR Award Calculation is: (STAR Target) x (Business Unit Performance Factor) x
(Corporate Adjustment Factor) x (Gillette Factor)

	•	 	The STAR Target for each participant is calculated as: (Base Salary) x (STAR Target
percent)

Base Salary as of the end of June is used to calculate the STAR award. If a participant’s
level changes, the highest band level and salary during the fiscal year is used to
determine the STAR Target.

The STAR Target Percent is dependent on job level in the organization and will fall between
8% and 170%.

	 	 	 	 	 
	Job Band	 	STAR Target as % of Base
	Band 3
	 	 	8	%
	Band 4 - Associate Director
	 	 	15	%
	Band 5 - Director
	 	 	25	%
	Band 6 - Vice President
	 	 	45	%
	Band 7 - President
	 	 	70	%
	Band 7 - Group Presidents and Function Heads
	 	 	75	%
	Band 8 – Vice Chair
	 	 	90	%
	Band 9 – President GBU’s, COO, CFO
	 	 	115	%
	Band 10 - CEO
	 	 	170	%

An individual’s STAR target may vary from the Job Band target identified above in certain
limited circumstances, including but not limited to, organizationally driven band reductions or
certain corporate actions that result in specific employment obligations.

	•	 	The Business Unit Performance Factor is assigned to each STAR business unit as a measure of
success for the fiscal year. The factors range from 53% to 167% with the target at 100%. A
STAR Committee, comprised of a small number of senior executives (who do not determine their
own awards), conducts a retrospective assessment of the performance of each business unit
according to one or more of the following measures and makes a recommendation to the
Compensation & Leadership Development

 

 

	 	 	Committee: Operating Total Shareholder Return, Key Competitor Comparison, After Tax Profit,
Operating Cash Flow, Value Share, Volume, Net Outside Sales, Value Contribution, Organization
Head Self Assessment, and Cross Organization Assessment. There may also be other factors
significantly affecting unit results positively or negatively.

	•	 	The Corporate Adjustment Factor measures the total Company success and ranges from 80% to
130%, with a 100% target. The same Corporate Adjustment Factor is applied to all STAR award
calculations. It is determined by a matrix that measures P&G’s market total shareholder
return (“TSR”) ranking for the fiscal year relative to a competitive peer group and diluted
earnings per share (“EPS”) growth for the fiscal year.

The Committee may add additional factors with clear performance metrics (such as the Gillette
factor described below) for supporting business needs.

	•	 	The Gillette Factor is derived from a review and recommendation by the STAR Committee based
on the results of the success of the Gillette integration. The factor ranges from 80% to 130%
with 100% as the target. The same Gillette Factor will apply to all STAR award calculations.
It will be determined by assessing performance during the fiscal year on various metrics
including: sustaining the overall health of both the P&G and Gillette businesses during this
period (based on market share and earnings progress); achieving sales, research and
administrative budget and synergy objectives; meeting enrollment targets; and staying within
integration cost and restructuring estimates. The Gillette Factor was applied starting with
the results of fiscal year 2005/06 and will remain a factor as long as applicable.

The STAR Committee makes recommendations to the Compensation & Leadership Development Committee
regarding the performance factor percentages to be applied to all STAR awards (except those for the
STAR Committee). The final award amounts for the principal officers are approved by the
Compensation & Leadership Development Committee. Pursuant to a delegation from that Committee,
awards for other employees are approved by the Chief Executive. STAR Awards for members of the Star
Committee are determined exclusively by the Committee without any recommendation from the STAR
Committee.

III. TIMING AND FORM

STAR awards are determined after the close of the fiscal year and are paid on or about September
15. The award form choices and relevant considerations are explained in payment preference
materials generally in the form of Appendix 1. Participants receive written notice of
their award detailing the calculation, generally in the form of Appendix 2. The grant
letters are generally in the form of Appendix 3.

Generally, STAR awards are paid in cash. However, before the end of the calendar year preceding the
year of the award date, participants on record can choose their upcoming award in forms other than
cash, such as stock options, local deferral programs in some countries, or restricted stock units
or deferred compensation, (for participants also in the Business Growth Program), depending on
local regulations. To pay a STAR award in stock options, the Company compares current cash value
to stock option value with a conversion factor that is reviewed annually. Any STAR award paid in
stock options, restricted stock units or other equity shall be awarded pursuant to this program and
the terms and conditions of the 2001 Stock and Incentive Compensation Plan, the 2004 Gillette Long
Term Incentive Plan or any successor stock plan approved in accordance with applicable listing
standards, as they may be revised from time to time.

 

 

IV. SEPARATION FROM THE COMPANY

	•	 	Retirement, Death or Special Separation with a Separation Package:
If participant worked at least 4 weeks, award is pro-rated based
on the number of weeks worked in the fiscal year for which the
award is payable, divided by 52.

	•	 	Voluntary Resignation or Termination for cause: Separating
employees must be active as of June 30 (the close of the fiscal
year for which the award is payable) to receive an award.

Eligible participants who have left the Company will receive a cash payment (equity such as stock
options and RSUs can be issued to active employees only) on the same timing as STAR awards or as
soon thereafter as possible.

V. CHANGE IN CONTROL

Notwithstanding the foregoing, if there is a Change in Control in any fiscal year, STAR awards will
be calculated in accordance with Section II above, but each factor will be calculated for the
period from the beginning of the fiscal year in which a Change in Control occurred up to and
including the date of such Change in Control (“CIC Period”). “Change in Control” shall have the
same meaning as defined in the 2001 Stock and Incentive Compensation Plan.

VI. GENERAL TERMS AND CONDITIONS

While any STAR award amount received by one individual for any year shall be considered as earned
remuneration in addition to salary paid, it shall be understood that this plan does not give to any
officer or employee any contract rights, express or implied, against any Company for any STAR award
or for compensation in addition to the salary paid to him or her, or any right to question the
action of the Board of Directors or the Committee.

Each award to the Chief Executive, Vice-Chairs, Group Presidents, Presidents, Global Function Heads
and Senior Vice Presidents and equivalents, made pursuant to this plan, is subject to the Senior
Executive Recoupment Policy adopted by the Committee in December 2006.

This program document may be amended at any time by the Committee.

2/13/07

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