Document:

Exhibit 10.1

 

SiteOne Landscape Supply, Inc.

 

Form of Performance Stock Unit Agreement

 

This Performance Stock
Unit Agreement (this "Agreement") is made and entered into as of _________________________(the "Grant
Date") by and between SiteOne Landscape Supply, Inc., a Delaware corporation (the "Company") and _____________________________
(the "Participant").

 

1.            
Grant
of Performance Share Units. Effective as of the Grant Date, the Company hereby grants to Participant an Award of Performance
Stock Units (“PSUs”) in the amount of ______________________________PSUs (the “Target Award”),
each of which represents the right to receive one share of Company Common Stock (the “Share”) upon vesting of
such PSU, subject to and in accordance with the terms, conditions and restrictions set forth in the SiteOne Landscape Supply, Inc.
2016 Omnibus Equity Incentive Plan (as it may be amended from time to time, the “Plan”) and this Agreement.
The number of PSUs that Participant may earn hereunder shall range between zero to 200% of the Target Award and shall be determined
based on the level of achievement of the performance conditions set forth in Exhibit A attached hereto (the “Performance
Goals”) over the Performance Cycle (as defined in Section 2). In consideration of the receipt of this Award, Participant
agrees to be bound by the covenants set forth in Exhibit B governing Competitive Activity. Capitalized terms not otherwise
defined herein shall have the same meanings as in the Plan.

 

2.          
Performance
Cycle. For purposes of this Agreement, the term "Performance Cycle" shall mean the period commencing
on ______________and ending on_____________.

 

3.            
Performance
Goals.

 

3.1             
The number of PSUs earned by Participant for the Performance Cycle shall be determined at the end of the Performance Cycle
based on the level of achievement of the Performance Goals in accordance with Exhibit A. All determinations of whether Performance
Goals have been achieved, the number of PSUs earned by Participant, and all other matters related to this Section 3.1 shall be
made by the Administrator in its sole discretion.

 

3.2             
As soon as practicable following completion of the Performance Cycle, but no later than May 31, _________________, the Administrator
shall review and certify in writing (a) whether, and to what extent, the Performance Goals for the Performance Cycle have been
achieved, and (b) the number of PSUs earned by Participant, if any, subject to satisfaction of the requirements of Section 4 (the
“Determination Date”). Such certification shall be final, conclusive and binding on Participant, and on all
other persons, to the maximum extent permitted by law.

 

4.             Vesting
of PSUs. The PSUs are subject to forfeiture until they vest. Except as otherwise provided in Sections 5 and 6,
the PSUs shall vest and become nonforfeitable on the last day of the Performance Period, subject to (a) the achievement of
the minimum threshold Performance Goal for payout set forth in Exhibit A, and (b) Participant's continuous employment
(“Continuous Service”) from the Grant Date through the last day of the Performance Period (the
“Vesting Date”). The number of PSUs that vest and become payable under this Agreement shall be determined
by the Administrator based on the level of achievement of the Performance Goals set forth in Exhibit A and shall be
rounded to the nearest whole PSU.

 

     

     

    

 

5.            
Termination
of Continuous Service.

 

5.1             
Except as otherwise provided in Sections 5.2, 5.3, 5.4 and 6, if Participant's Continuous Service terminates for any reason
at any time before the Vesting Date, Participant's unvested PSUs shall be automatically forfeited upon such termination of Continuous
Service and neither the Company nor any Affiliate shall have any further obligations to Participant under this Agreement.

 

5.2             
If Participant’s Continuous Service is terminated by the Company without Cause (provided Participant has not engaged
in any Competitive Activity), Participant shall vest in the number of PSUs that would otherwise have vested (if any) based on actual
performance level at the end of the Performance Cycle, determined by multiplying such number of PSUs by a fraction, the numerator
of which equals the number of completed months that Participant was employed with the Company during the Performance Cycle and
the denominator of which equals 36 months, provided, however, that the payout of such PSUs shall remain subject to
all other terms and conditions of this Agreement, including the payment date described in Section 7 and the opportunity to earn
a greater or lesser number of PSUs (subject to pro-ration as provided in this Section) as provided in Exhibit A.

 

5.3             
If Participant's Continuous Service terminates during the Performance Cycle as a result of Participant's death or Disability,
Participant shall vest on such date in a portion of the Target Award (based on target level performance), determined by multiplying
the Target Award by a fraction, the numerator of which equals the number of completed months that Participant was employed with
the Company during the Performance Cycle and the denominator of which equals 36 months, provided, however, the payout
of such prorated Target Award shall remain subject to all other terms and conditions of this Agreement, including the payment dates
described in Section 7.

 

5.4             
In the event Participant’s Continuous Service terminates due to Retirement and Participant has not engaged in Competitive
Activity, Participant shall vest in a pro-rated number of PSUs that would otherwise have vested (if any) based on actual performance
level at the end of the Performance Cycle determined based on the following schedule:

 

	Retirement Occurs During	Pro-Ration Factor
	Year 1 of Performance Cycle	33%
	Year 2 of Performance Cycle	67%
	Year 3 of Performance Cycle	100%

 

    	 	2	 

     

    

 

provided, however,
that such PSUs shall remain subject to all other terms and conditions of this Agreement, including the payment date described in
Section 7 and the opportunity to earn a greater or lesser number of PSUs (subject to pro-ration as provided in this Section) as
provided in Exhibit A.

 

As used in this Agreement:
“Retirement” means Participant’s voluntarily resignation (a) at or after attaining the age of 60, (b)
after providing at least 10 years of service to the Company as an Employee (or, if approved by the Administrator, as a Consultant
or Director), and (c) after providing Continuous Service for 6 or more months during the Performance Cycle.

 

6.             Effect
of a Change in Control. In the event of a Change in Control during the Performance Cycle, the PSUs subject to
this Agreement shall convert into one Restricted Stock Unit (the “Conversion Ratio”) and vest at the end
of the Performance Cycle as follows: (a) if the Change in Control occurs prior to the completion of 2-years of the
Performance Cycle, the Conversion Ratio shall be based on PSUs at target level performance, or (b) if the Change in Control
occurs after completion of 2-years of the Performance Cycle, the Conversion Ratio shall be based on PSUs at
performance-to-date level if reasonably measurable or target performance level if performance-to-date level shall not be
reasonably measurable, as determined in the sole discretion of the Administrator. Provided, however, such
Restricted Stock Units shall vest immediately if the (x) the continuing entity fails to provide an Alternative Award at the
time of the Change in Control, or (y) the Company terminates Participant’s employment without Cause or Participant
terminates Participant’s employment for Good Reason within the 12-month period following the Change in Control; provided, further,
that the payout of such Restricted Stock Units shall remain subject to all other terms and conditions of this Agreement,
including the payment date described in Section 7.

 

7.            
Payment
of PSUs. Payment in respect of the PSUs earned for the Performance Cycle shall be made in Shares and shall be issued
to Participant as soon as practicable following the end of the Performance Cycle, but no later than May 31, _____. The Company shall
(a) issue and deliver to Participant the number of Shares equal to the number of vested PSUs, and (b) enter Participant's name
on the books of the Company as the shareholder of record with respect to the Shares delivered to Participant. Notwithstanding anything
herein to the contrary, payment in respect of any PSUs vested as a result of Participant’s death pursuant to Section 5.3
shall be made as soon as practical, but no later than 30 days following the date of Participant’s death.

 

8.            
Transferability.
Subject to any exceptions set forth in this Agreement or the Plan, the PSUs or the rights relating thereto may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by Participant, except by will or the laws of descent
and distribution, and upon any such transfer by will or the laws of descent and distribution, the transferee shall hold such PSUs
subject to all of the terms and conditions that were applicable to Participant immediately prior to such transfer.

 

9.            
Rights
as Shareholder; Dividend Equivalents.

 

9.1             
Participant shall not have any rights of a shareholder with respect to the Shares underlying the PSUs, including, but not
limited to, voting rights and the right to receive or accrue dividends or dividend equivalents.

 

    	 	3	 

     

    

 

9.2             
 Upon and following the vesting of the PSUs and the issuance of Shares, Participant shall be the record owner of such Shares
unless and until such Shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a shareholder
of the Company (including voting and dividend rights).

 

10.          
No
Right to Continued Service. Neither the Plan nor this Agreement shall confer upon Participant any right to be retained
in any position, as a Service Provider. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion
of the Company to terminate Participant's Continuous Service at any time, with or without Cause.

 

11.         
Adjustments.
If any change is made to the outstanding Common Stock or the capital structure of the Company, if required, this Award shall be
adjusted or terminated in any manner as contemplated by Section 4.3 of the Plan.

 

12.          
Tax
Liability and Withholding.

 

12.1           
Participant shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation
paid to Participant pursuant to the Plan, the amount of any required withholding taxes in respect of the PSUs and to take all such
other action as the Administrator deems necessary to satisfy all obligations for the payment of such withholding taxes. Notwithstanding
the preceding sentence, unless previously satisfied, the Company shall retain a number of Shares issued in respect of the vested
PSU that have an aggregate Fair Market Value as of the Settlement Date equal to the amount of such taxes required to be withheld;
provided that the number of such Shares retained shall not be in excess of the maximum amount required to satisfy the statutory
withholding tax obligations. The number of Shares to be issued in respect of PSUs shall thereupon be reduced by the number of Shares
so retained. The method of withholding set forth in the immediately preceding sentence shall not be available if withholding in
this manner would violate any financing instrument of the Company or any of the Subsidiaries or result in material adverse accounting
treatment for the Company as determined by the Administrator in its sole discretion.

 

12.2           
Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other
tax-related withholding ("Tax-Related Items"), the ultimate liability for all Tax-Related Items is and remains
Participant's sole responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related
Items in connection with this Award, vesting or settlement of the PSUs or the subsequent sale of any Shares, and (b) does not commit
to structure the PSUs to reduce or eliminate Participant's liability for Tax-Related Items.

 

13.         
Compliance
with Law. The issuance and transfer of Shares in connection with the PSUs shall be subject to compliance by the Company
and Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any
stock exchange on which the Shares may be listed. No Shares of Common Stock shall be issued or transferred unless and until any
then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction
of the Company and its counsel.

 

    	 	4	 

     

    

 

14.         
Authorization to Share Personal Data. Participant authorizes the Company or any Affiliate of the Company that
has or lawfully obtains personal data relating to Participant to divulge or transfer such personal data to the Company or to a
third party, in each case in any jurisdiction, if and to the extent reasonably appropriate in connection with this Agreement or
the administration of the Plan.

 

15.         
PSUs
Subject to Plan. This Agreement is subject to the Plan. The terms and provisions of the Plan as it may be amended from
time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein
and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

 

16.         
Successors
and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this
Agreement will be binding upon Participant and Participant's beneficiaries, executors, administrators and the person(s) to whom
the PSUs may be transferred by will or the laws of descent or distribution.

 

17.         
Severability.
The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability
of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and
enforceable to the extent permitted by law.

 

18.         
Discretionary
Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in
its discretion. The grant of the PSUs in this Agreement does not create any contractual right or other right to receive any PSUs
or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification,
or termination of the Plan shall not constitute a change or impairment of the terms and conditions of Participant's employment
with the Company.

 

19.         
Amendment.
The Administrator has the right to amend, alter, suspend, discontinue or cancel the PSUs, prospectively or retroactively; provided,
however, that, no such amendment shall adversely affect Participant's material rights under this Agreement without Participant's
consent.

 

20.         
Section
409A. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed
and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A
of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under
this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by Participant on account of non-compliance with Section 409A of the
Code.

 

    	 	5	 

     

    

 

21.         
No
Impact on Other Benefits. The value of Participant's PSUs is not part of Participant’s normal or expected compensation
for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

 

22.          
Acknowledgments.
Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. Participant has read and understands the terms
and provisions thereof and accepts this Award subject to all of the terms and conditions of the Plan and this Agreement, including,
but not limited to, the covenants set forth in Exhibit B governing Competitive Activity. Participant acknowledges that there
may be adverse tax consequences upon the vesting or settlement of the PSUs or disposition of the underlying Shares and that Participant
has been advised to consult a tax advisor prior to such vesting, settlement or disposition.

 

23.          
Interpretation. The Administrator shall have full power and discretion to construe and interpret the Plan (and any
rules and regulations issued thereunder) and this Award. Any determination or interpretation by the Administrator under or pursuant
to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

 

24.          
Waiver of Jury Trial. The Company and Participant each hereby waives, to the fullest extent permitted by applicable
law, any right the Company or Participant may have to a trial by jury in respect of any suit, action or proceeding arising out
of this Agreement or any transaction contemplated hereby. The Company and Participant each (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (b) acknowledges that each party has been induced to enter into the Agreement
by, among other things, the mutual waivers and certifications in this section.

 

25.          
Acceptance of Agreement. Participant has indicated Participant’s consent and acknowledgement of the terms of
this Agreement pursuant to the instructions provided to Participant by or on behalf of the Company. Participant acknowledges receipt
of the Plan, represents to the Company that Participant has read and understood this Agreement and the Plan, and, as an express
condition to the grant of the PSUs under this Agreement, agrees to be bound by the terms of both this Agreement (including, but
not limited to, the covenants set forth in Exhibit B governing Competitive Activity) and the Plan. Participant and the Company
each agrees and acknowledges that the use of electronic media (including, without limitation, a clickthrough button or checkbox
on a website of the Company or a third-party administrator) to indicate Participant’s confirmation, consent, signature, agreement
and delivery of this Agreement and the PSUs is legally valid and has the same legal force and effect as if Participant and the
Company signed and executed this Agreement in paper form. The same use of electronic media may be used for any amendment or waiver
of any provision of this Agreement.

 

*                 *                 *

 

    	 	6	 

     

    

 

SiteOne
Landscape Supply, Inc.

 

Form
of Performance Stock Unit Agreement

 

exhibit
a

PERFORMANCE
GOALS

 

PSUs
shall be earned based on 3-year relative EBTA growth and absolute ROIC. The Company’s EBTA shall be measured relative to
the Peers plus the BICs. Relative performance shall be measured using the 12 most recent quarters reported as of the end
of the Performance Cycle (as reported after all Form 10-K Annual Reports have been filed by the Peers reporting theirs results
for such period). Absolute ROIC performance shall be measured over the Performance Cycle. Actual PSUs earned, if any, shall range
from 0% to 200% of the Target Award based upon performance relative the Performance Goals. One hundred percent (100%) of the Company’s
EBTA growth shall be measured relative to the Peers plus BIC. The 3-year average ROIC shall modify (plus/minus 20%) the
PSUs earned for EBTA growth for performance above or below the range set forth in this Exhibit. Performance within the target range
for ROIC set forth in this Exhibit shall have zero impact on PSUs earned for EBTA growth. Earned PSUs on EBTA growth shall be capped
at 100% of the Target Award if absolute EBTA growth is negative. The ROIC modifier shall not result in a payout which exceeds 200%
of the Target Award. 

 

For
purposes of this Award, the following terms shall have the following meanings:

 

“BICs”
shall mean the five best-in-class distributors set forth in Schedule 1 to this Exhibit. 

 

“EBTA”
shall mean the generally accepted accounting principles (GAAP) pre-tax income plus amortization.

 

“Peers”
shall mean the 17 benchmarking peers set forth in Schedule 1 to this Exhibit. 

 

“ROIC”
shall mean the annual percentage return on invested capital calculated as follows:

 

ROIC
= (Annual EBITA) / (Average Net Assets for the year)

 

EBITA
= earnings before interest, taxes and amortization

 

Net
Assets = Shareholder Equity + Net Debt (Net Debt = Debt + Capital Leases – Cash)

 

Average
is the average for the 4-reporting quarter that fiscal year.

 

		·	Annual ROIC shall be independently calculated
for each of the three years during the Performance Cycle.

 

		·	Three annual ROIC values shall then be
averaged to calculate average ROIC over the Performance Cycle to determine if the modifier shall have an impact.

 

    	 	7	 

     

    

 

“Performance
goals” shall mean: 

 

	Perf. Level	Relative EBTA Growth	% Target Award	Perf. Level	Avg. ROIC	Modifier to PSUs Earned based on Relative EBTA Growth*
	Maximum	>=75th percentile	200%	Above Target	[>Y%]	+20%
	Target	50th percentile	100%	Target	[X%-Y%]	0%
	Threshold	25th percentile	50%	Below Target	[<X%]	-20%
	<Threshold	<25th percentile	0%	 	 	 

 

		·	Payout on EBTA growth performance capped at 100% of target if Company’s absolute EBTA growth is negative.

		·	Payout for performance between levels noted above shall be determined using straight-line interpolation.

		·	Total payout shall be capped at 200% of target.

 

Footnotes (for EBTA calculations):

		1.	Source: Standard & Poor's Capital IQ or other third-party financial database

		2.	Growth rates calculated as a 3-year cumulative compound annual growth rate (CAGR) such that growing the base year by the CAGR
for each of the three years results in the sum of 3-year cumulative performance (i.e., all three years are included, not just the
base and ending year)

		3.	Cumulative negative actual performance off of a positive base year shown as -100%

		4.	Peer or BIC companies that do not have 4-years of data or growth is not calculable due to a negative base year, shall be excluded
from the percentile calculations.

  

*                 *                  *

 

    	 	8	 

     

    

 

SiteOne Landscape Supply, Inc. 

Form of Performance Stock Unit Agreement

 

EXHIBIT A

PERFORMANCE GOALS

SCHEDULE 1

PEERS AND BIC

 

 

Advanced Drainage Systems, Inc.

Applied Industrial Technologies, Inc.

Beacon Roofing Supply, Inc.

BMC Stock Holdings, Inc.

Central Garden & Pet Company

DXP Enterprises, Inc.

Eagle Materials Inc.

Fastenal Company*

GMS Inc.

H&E Equipment Services, Inc.

HD Supply Holdings, Inc.*

Installed Building Products, Inc.

Kaman Corporation

MSC Industrial Direct Co., Inc.

Pool Corporation

Summit Materials, Inc.

The Scotts Miracle-Gro Company

TopBuild Corp.

Univar Inc.*

W.W. Grainger, Inc.*

Watsco, Inc.

WESCO International, Inc.*

______________________________________________________________________________

 

*BICs.

 

    	 	9	 

     

    

 

SiteOne
Landscape Supply, Inc.

 

Form
of Performance Stock Unit Agreement

 

exhibit
B

RESTRICTIVE
COVENANTS

 

All
section references in this Exhibit B shall refer to the designated section(s) of this Exhibit B. 

 

Section
1     Confidential Information. Except as otherwise provided in Section 5, Participant agrees not to disclose, divulge,
publish, communicate, publicize, disseminate or otherwise reveal, either directly or indirectly, any Confidential Information to
any person, natural or legal, except in the performance of Participant’s duties during Participant’s employment by
the Company. The term “Confidential Information” means all information in any form relating to the past, present
or future business affairs, including without limitation: all business plans and marketing strategies; information concerning existing
and prospective markets, suppliers and customers; financial information; information concerning the development of new products
and services; and technical and non-technical data related to software programs, design, specifications, compilations, inventions,
improvements, patent applications, studies, research, methods, devices, prototypes, processes, procedures and techniques. Such
Confidential Information includes all such information of the Company or a person not a party to this Agreement whose information
the Company has in its possession under obligations of confidentiality, which is disclosed by the Company to Participant or which
is produced or developed while Participant is an employee or director of the Company. “Confidential Information” shall
also include trade secrets (as defined under applicable law) as well as information that does not rise to the level of a trade
secret and includes information that has been entrusted to the Company by a third party under an obligation of confidentiality.
The term “Confidential Information” shall not include any information of the Company which (i) becomes publicly known
through no wrongful act of Participant, (ii) is received from a person not a party to this Agreement who is free to disclose it
to Participant, or (iii) is lawfully required to be disclosed to any governmental agency or is otherwise required to be disclosed
by law, subpoena or court order but only to the extent of such requirement, provided that before making such disclosure Participant
shall give the Company an adequate opportunity to interpose an objection or take action to assure confidential handling of such
information.

 

Section
2     Return of Company Property. Participant acknowledges that all tangible items containing any confidential or proprietary
information or trade secrets, including without limitation memoranda, photographs, records, reports, manuals, drawings, blueprints,
prototypes, notes, documents, drawings, specifications, software, media and other materials, including any copies thereof (including
electronically recorded copies), are the exclusive property of the Company and its Subsidiaries, and Participant shall deliver
to the Company all such material in Participant’s possession or control upon the Company’s request and in any event
upon the termination of Participant’s employment with the Company. Participant shall also return any keys, equipment, identification
or credit cards, or other property belonging to the Company or its Subsidiaries upon termination of Participant’s employment
or the Company’s request.

 

    	 	10	 

     

    

 

Section
3      Non-competition and Non-solicitation.

 

3.1          
Participant agrees that during Participant’s employment with the Company, and for the 1-year period following the
date on which Participant’s employment with the Company terminates for any reason, Participant will not directly or indirectly,
as an employee, owner, officer, director, manager, operator, or controlling person (including indirectly through a debt or equity
investment), provide a Competing Business anywhere in the Territory services of the type provided by Participant to the Company
within 2 years of the termination of Participant’s employment with the Company. The term “Competing Business”
means the sale or distribution of landscaping or irrigation products or supplies. The term “Territory” means
the United States, Canada or any other region within which Participant had substantial responsibilities while employed by the Company.
For the avoidance of doubt, if Participant is a senior officer of the Company, the restriction contained herein shall relate to
all of the businesses of the Company and its Subsidiaries.

 

3.2         
Participant agrees that during Participant’s employment with the Company, and for the 2-year period thereafter, Participant
will not, directly or indirectly, on Participant’s own behalf or on behalf of another, or in assistance or aid of another:
(i) solicit, recruit, aid or induce any employee of the Company or its Subsidiaries to leave his or her employment with the Company
or its Subsidiaries in order to accept employment with or render services to another person or entity unaffiliated with the Company
or its Subsidiaries, or (ii) solicit, aid, or induce any customer of the Company or its Subsidiaries, with whom Participant had
contact during the 2-year period prior to the date of termination of Participant’s employment with the Company, to purchase
goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other person
or entity in identifying or soliciting any such customer, or (iii) otherwise interfere with the relationship of the Company or
any of its Subsidiaries with any of its employees, customers, agents, representatives or suppliers with whom Participant had contact
during the 2-year period prior to the date of termination of Participant’s employment with the Company.

 

Section
4      Remedies.

 

4.1         
The Company and Participant agree that the provisions of this Exhibit B do not impose an undue hardship on Participant
and are not injurious to the public; that these provisions are necessary to protect the business of the Company and its Subsidiaries;
that the nature of Participant’s responsibilities with the Company provide and/or will provide Participant with access to
Confidential Information that is valuable to the Company and its Subsidiaries; that the Company would not grant this Award to Participant
if Participant did not agree to the provisions of this Exhibit B; that the provisions of this Exhibit B are reasonable
in terms of length of time and scope; and that adequate consideration supports the provisions of this Exhibit B. In the
event that a court determines that any provision of this Exhibit B is unreasonably broad or extensive, Participant agrees
that such court should narrow such provision to the extent necessary to make it reasonable and enforce the provisions as narrowed.
The Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive
relief, equitable relief and compensatory damages for any breach of Participant’s obligations under this Exhibit B.

 

    	 	11	 

     

    

 

4.2          
Without limiting the generality of the remedies available to the Company pursuant to Section 4.1, if Participant, except
with the prior written consent of the Company, materially breaches the restrictive covenants contained in this Exhibit B,
Participant shall forfeit any then-outstanding PSUs (whether vested or unvested); shall forfeit any Shares acquired on settlement
of the PSUs and then owned by Participant; and shall pay to the Company in cash any net after-tax gain Participant realized in
cash in connection with the sale of any Shares acquired on settlement of the PSUs). These rights of forfeiture and recoupment are
in addition to any other remedies the Company may have against Participant for Participant’s breach of the restrictive covenants
contained in this Exhibit B. Participant’s obligations under this Exhibit B shall be cumulative (but not operate
to extend the length of any such obligations) of any similar obligations Participant has under the Plan, the Agreement or any other
agreement with the Company or any Affiliate.

 

Section
5      Protected Rights

 

5.1           Notwithstanding
any other provision of this Agreement, nothing contained in this Agreement limits Participant’s ability to file a charge
or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and
Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission
(collectively, “Government Agencies”), or prevents Participant from providing truthful information in response
to a lawfully issued subpoena or court order. Further, this Agreement does not limit Participant’s ability to communicate
with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government
Agency, including providing documents or other information, without notice to the Company.

 

5.2           Participant
is hereby notified that under the Defend Trade Secrets Act: (i) no individual will be held criminally or civilly liable under
federal or state trade secret law for disclosure of a trade secret (as defined in the Economic Espionage Act) that is: (A) made
in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and made solely
for the purpose of reporting or investigating a suspected violation of law; or (B) made in a complaint or other document filed
in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and (ii) an individual who pursues
a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney
of the individual and use the trade secret information in the court proceeding, if the individual files any document containing
the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

 

*                  *                  *

 

    	 	12Exhibit

EXHIBIT 10.1
PHILIP MORRIS INTERNATIONAL INC.
2017 PERFORMANCE INCENTIVE PLAN 

RESTRICTED STOCK UNIT AGREEMENT
FOR PHILIP MORRIS INTERNATIONAL INC. COMMON STOCK
 (February 7, 2019)

PHILIP MORRIS INTERNATIONAL INC. (the “Company”), a Virginia corporation, hereby grants to the employee identified in the Award Statement (the “Employee”) under the Philip Morris International Inc. 2017 Performance Incentive Plan (the “Plan”), a Restricted Stock Unit Award (the “Award”) dated February 7, 2019 (the “Award Date”) with respect to the number of shares of the Common Stock of the Company (the “Common Stock”) set forth in the Award Statement (the “RSUs”), all in accordance with and subject to the following terms and conditions:

1.    Normal Vesting.  Subject to Section 2 of this Agreement below, the RSUs shall become fully vested on the Vesting Date set forth in the Award Statement (the “Vesting Date”), provided that the Employee remains an employee of the PMI Group during the entire period commencing on the Award Date and ending on the Vesting Date, and provided further that the Employee has complied with all applicable provisions of HSR. 

2.    Termination of Employment Before Vesting Date.  (a) In the event of the termination of the Employee’s employment with the PMI Group prior to the Vesting Date due to (i) death, Disability or (ii) Normal Retirement, or (iii) early retirement or termination of employment (other than for cause), in either case by mutual agreement and after the Employee has attained age 58, then the RSUs shall become fully vested on the date of death, Disability, Normal Retirement, or such early retirement or termination of employment or the date specified in such mutual agreement. 

(b)    Subject to the provisions of section 6(a) of the Plan, if the Employee’s employment with the PMI Group is terminated prior to the Vesting Date in circumstances not specified in items (i), (ii) or (iii) of the preceding paragraph, the Employee shall forfeit all rights to the RSUs.  Notwithstanding the foregoing and except as provided in section 6(a) of the Plan, upon the termination of an Employee’s employment with the PMI Group, the Compensation Committee may, in its sole discretion, vest some or all of the RSUs.

(c)    If within the period of 12 months prior to the date of termination of employment, the Employee was an Executive Officer (as designated by the Board of Directors of the Company within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended) and the termination of employment of such Employee is due to a  reason other than death or Disability,  any shares of Common Stock that are received by such Employee as a result of accelerated vesting provisions of Section 2(a) or (b), shall be automatically subject to a holding period that expires 12 consecutive months from the date of termination of employment.

3.    Voting and Dividend Rights; Withholding Tax on Dividend Equivalents.  The Employee does not have the right to vote the RSUs or receive dividends prior to the date, if any, such RSUs are paid to the Employee in the form of Common Stock pursuant to the terms hereof.  However, unless otherwise determined by the Compensation Committee, the Employee shall receive cash amounts (less applicable withholding taxes) equal to the dividends paid from the date the Award is granted through the date of payment under Section 7 of this Agreement 

with respect to shares of Common Stock issuable with respect to the Award, as such dividends are paid.

4.    Transfer Restrictions.  This Award and the RSUs are non-transferable and may not be transferred, assigned, hypothecated, pledged or otherwise encumbered and shall not be subject to execution, attachment or similar process.  Upon any attempt to effect any such disposition, or upon the levy of any such process, the Award shall immediately become null and void and the RSUs shall be forfeited.  These restrictions shall not apply, however, to any payments received pursuant to Section 7 of this Agreement below. In addition, shares of Common Stock subject to the holding period described in Section 2 (c) of this Agreement may not be transferred, assigned, hypothecated, pledged or otherwise encumbered for the duration of the applicable holding period.

5.    Withholding Taxes on Common Stock upon Vesting.  With respect to Common Stock issuable upon vesting, the Company is authorized to satisfy the actual statutory withholding taxes, or hypothetical withholding tax amounts if applicable, arising from this Award by (a) deducting the number of shares of Common Stock payable under the RSUs having an aggregate value equal to the amount of withholding taxes due from the total number of shares of Common Stock payable under the RSUs becoming subject to current taxation or (b) the remittance of the required amounts from any proceeds realized upon the open-market sale of the Common Stock received in payment of vested RSUs by the Employee.  Shares of Common Stock payable under the RSUs deducted from this Award in satisfaction of tax withholding shall be valued at the Fair Market Value of the Common Stock on the date as of which the amount giving rise to the withholding requirement first became includible in the gross income of the Employee under applicable tax laws. If the Employee is on an international assignment, the Company will calculate the amount of hypothetical tax which will be imposed on the Employee’s RSUs, in accordance with the Company’s guidelines in force at the time the withholding obligation arises.

6.    Death of Employee.  If any of the RSUs shall vest upon the death of the Employee, any Common Stock received in payment of the vested RSUs shall be registered in the name of the estate of the Employee.

7.      Settlement of RSUs.  Each RSU granted pursuant to this Award represents an unfunded and unsecured promise of the Company, subject to the vesting and other terms of this Agreement, to issue to the Employee one share of the Common Stock.  Except as otherwise expressly provided in the Award Statement and subject to the terms of this Agreement, such issuance shall be made to the Employee (or, in the event of his or her death to the Employee’s estate as provided above) as soon as reasonably practicable following the vesting of the RSU pursuant to Section 1 or 2 of this Agreement (and, if the Employee is subject to US Federal income tax, in no event later than March 15 of the calendar year following such Employee’s separation from service, except as otherwise provided in Section 8 below), provided, however, that if the Company determines that settlement in the form of Common Stock is impractical or impermissible under the laws of the Employee’s country of residence, the RSUs will be settled in the form of cash, and provided further that any applicable waiting period under HSR has expired or been terminated.

8.    Special Payment Provisions.  Notwithstanding anything in this Agreement to the contrary, if the Employee is subject to US Federal income tax on any part of the payment of the RSUs, and will become eligible for Normal Retirement (a) for RSUs with a Vesting Date between January 1 and March 15, before the calendar year preceding the Vesting Date and (b) for RSUs with a Vesting Date after March 15, before the calendar year in which such Vesting 

Date occurs, then the RSUs shall be subject to the following provisions of this Section 8.  If the Employee is a “specified employee” within the meaning of Code section 409A, any payment of RSUs under Section 7 of this Agreement above that is on account of his separation from service and is scheduled to be paid within six months after such separation from service shall accrue without interest and shall be paid as soon as reasonably practicable after the first day of the seventh month, or thirteenth month in situations described in Section 2(c) of this Agreement if applicable, beginning after the date of the Employee’s separation from service or, if earlier, as soon as reasonably practicable following the Employee’s death. During such delayed distribution period, the Employee shall continue to receive cash amounts equal to dividends on Common Stock pursuant to Section 3 of this Agreement, and such amounts shall be paid to the Employee as such dividends are paid.  In the event of a “Change in Control” under section 6(b) of the Plan that is not also a “change in control event” with the meaning of Treas. Reg. §1.409A-3(i)(5)(i), the RSUs shall vest as set forth in section 6(a) of the Plan, but shall not be paid upon such Change in Control as provided by section 6(a) of the Plan, and shall instead be paid at the time the RSUs would otherwise be paid pursuant to this Agreement.  References to termination of employment and separation from service shall be interpreted to mean a separation from service, within the meaning of Code section 409A, with the Company and all of its affiliates treated as a single employer under Code section 409A.  This Agreement shall be construed in a manner consistent with Code section 409A.

9.    Board Authorization in the Event of Restatement.  Notwithstanding anything in this Agreement to the contrary, if the Board of Directors of the Company or an appropriate Committee of the Board determines that, as a result of fraud, misconduct, a restatement of the Company’s financial statements, or a significant write-off not in the ordinary course affecting the Company’s financial statements, an Employee has received more compensation in connection with this Award than would have been paid absent the fraud, misconduct, write-off or incorrect financial statement, the Board or Committee, in its discretion, shall take such action with respect to this Award as it deems necessary or appropriate to address the events that gave rise to the fraud, misconduct, write-off or restatement and to prevent its recurrence.  Such action may include, to the extent permitted by applicable law, causing the partial or full cancellation of this Award and, with respect to RSUs that have vested, requiring the Employee to repay to the Company the partial or full Fair Market Value of the Award determined at the time of vesting.  The Employee agrees by accepting this Award that the Board or Committee may make such a cancellation, impose such a repayment obligation, or take other necessary or appropriate action in such circumstances.

10.    Other Terms and Definitions.  The terms and provisions of the Plan (a copy of which will be furnished to the Employee upon written request to the Office of the Secretary, Philip Morris International Inc., 120 Park Avenue, New York, New York 10017) are incorporated herein by reference.  To the extent any provision of this Award is inconsistent or in conflict with any term or provision of the Plan, the Plan shall govern. Capitalized terms not otherwise defined herein have the meaning set forth in the Plan.

For purposes of this Agreement, (a) the term “Disability” means permanent and total disability as determined under procedures established by the Company for purposes of the Plan, and (b) the term “Normal Retirement” means retirement from active employment under a pension plan of any member of the PMI Group or under an employment contract with any member of the PMI Group on or after the date specified as the normal retirement age in the pension plan or employment contract, if any, under which the Employee is at that time accruing pension benefits for his or her current service (or, in the absence of a specified  normal retirement age, the age at which pension benefits under such plan or contract become payable without reduction for early commencement and without any requirement of a particular period

of prior service).  In any case in which (i) the meaning of “Normal Retirement” is uncertain under the definition contained in the prior sentence or (ii) a termination of employment at or after age 65 would not otherwise constitute “Normal Retirement,” an Employee’s termination of employment shall be treated as a “Normal Retirement” under such circumstances as the Compensation Committee, in its sole discretion, deems equivalent to retirement.  “PMI Group” means the Company and each of its subsidiaries and affiliates.  Generally, for purposes of this Agreement, (x) a “subsidiary” includes only any company in which the Company, directly or indirectly, has a beneficial ownership interest of greater than 50 percent and (y) an “affiliate” includes only any company that (A) has a beneficial ownership interest, directly or indirectly, in the Company of greater than 50 percent or (B) is under common control with the Company through a parent company that, directly or indirectly, has a beneficial ownership interest of greater than 50 percent in both the Company and the affiliate.  “Compensation Committee” means the Compensation and Leadership Development Committee of the Board of Directors of the Company.  “HSR” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.  “Code section 409A” means section 409A of the Internal Revenue Code and the regulations thereunder.

IN WITNESS WHEREOF, this Restricted Stock Unit Agreement has been duly executed as of February 7, 2019.

PHILIP MORRIS INTERNATIONAL INC.
	
		
	

	

/s/ JERRY WHITSON
Jerry Whitson
Deputy General Counsel and Corporate Secretary
Philip Morris International Inc.

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