Document:

Ex-4.30

 

EXHIBIT
4.30

[FORM OF REGISTERED 6.500% SENIOR
SECURED NOTES DUE 2007, 7.875% SENIOR SECURED NOTES DUE 2009,
6.500% SENIOR SECURED NOTES DUE 2010, 7.250% SENIOR SECURED NOTES DUE 2012 AND 7.300% SENIOR
SECURED NOTES DUE 2015]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENTS ARE MADE TO
CEDE & CO. OR TO SUCH ANY OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

REYNOLDS AMERICAN INC.

[6.500% Senior Secured Notes due 2007]

[7.875% Senior Secured Notes due 2009]

[6.500% Senior Secured Notes due 2010]

[7.250% Senior Secured Notes due 2012]

[7.300% Senior Secured Notes due 2015]

	 	 	 
	Certificate No. ____________

	 	$____________
	 

	 	CUSIP No. ____________

     Reynolds American Inc., a North Carolina corporation (the “Company,” which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, promises to
pay to Cede & Co., or its registered assigns, the principal sum of ____________
($____________) on [2007 Notes: June 1, 2007][2009 Notes: May 15, 2009][2010 Notes: July 15,
2010][2012 Notes: June 1, 2012][2015 Notes: July 15, 2015].

	 	 	 
	Interest Payment Dates:

	 	[2007 and 2012 Notes: June 1 and December 1]

[2009 Notes: May 15 and November 15]

[2010 and 2015 Notes: January 15 and July 15]

          , commencing           .
	 
	 	 
	Record Dates:

	 	[2007 and 2012 Notes: May 15 and November 15]

[2009 Notes: May 1 and November 1]

[2010 and 2015 Notes: January 1 and July 1].

 

 

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall have the same effect for all purposes as if set forth at
this place.

     Unless the certificate of authentication hereof has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.

	 	 	 	 	 
	Dated:           , 200_
	 	 	 	 
	 
	 	 	 	 
	 

	 	REYNOLDS AMERICAN INC.,

as Issuer
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 

     Each of the undersigned hereby acknowledges its obligation as a Guarantor under the Indenture.

	 	 	 	 	 
	SANTA FE NATURAL TOBACCO COMPANY, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	LANE, LIMITED, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Registered Note Signature Page

 

 

	 	 	 	 	 
	R.J. REYNOLDS TOBACCO HOLDINGS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	R. J. REYNOLDS GLOBAL PRODUCTS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	RJR PACKAGING, LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	R. J. REYNOLDS TOBACCO COMPANY, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	RJR ACQUISITION CORP., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Registered Note Signature Page

 

 

	 	 	 	 	 
	R. J. REYNOLDS TOBACCO CO., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	FHS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	GMB, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	CONWOOD HOLDINGS, INC., as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	CONWOOD COMPANY, LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Registered Note Signature Page

 

 

	 	 	 	 	 
	CONWOOD SALES CO.,
LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	ROSSWIL LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 
	 	 	 	 
	SCOTT TOBACCO LLC, as Guarantor
	 
	 	 	 	 
	By:	 	 
	 	 	 

[2007][2009][2010][2012][2015] Registered Note Signature Page

 

 

(Trustee’s Certificate of Authentication)

     This is one of the Notes of the series designated herein referred to in the within-mentioned
Indenture.

Dated:           , 200_

	 	 	 	 	 
	THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee
	 
	 	 	 	 
	By:	 	 
	 	 	 
	 	 	Name:

Title:

[2007][2009][2010][2012][2015] Registered Note Signature Page

 

 

[REVERSE OF EXCHANGE NOTE]

[6.500% Senior Secured Notes due 2007]

[7.875% Senior Secured Notes due 2009]

[6.500% Senior Secured Notes due 2010]

[7.250% Senior Secured Notes due 2012]

[7.300% Senior Secured Notes due 2015]

     References herein to the “Notes” mean the [6.500% Senior Secured Notes due 2007][7.875%
Senior Secured Notes due 2009][6.500% Senior Secured Notes due 2010][7.250% Senior Secured Notes
due 2012][7.300% Senior Secured Notes due 2015]. Other capitalized terms used herein shall have
the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

     1. Interest. Reynolds American Inc., a North Carolina corporation (the “Company”),
promises to pay interest on the principal amount of this Note at [6.500%][7.875%][7.250%][7.300%]
per annum from the date provided below until maturity and shall pay the additional interest, if
any, payable pursuant to the Registration Rights Agreement, dated as of June 20, 2006, between the
Company and each of the parties named on the signature pages thereof (“Additional Interest”). The
Company shall pay interest and Additional Interest, if any, semi-annually on [2007 and 2012 Notes:
June 1 and December 1][2009 Notes: May 15 and November 15][2010 and 2015 Notes: January 15 and July
15] of each year, or if any such day is not a Business Day, on the next succeeding Business Day
(each an “Interest Payment Date”). The first Interest Payment Date shall be
                    ,
200_. This Note has been issued in exchange for a like aggregate principal amount of the [6.500%
Senior Secured Notes due 2007][7.875% Senior Secured Notes due 2009][6.500% Senior Secured
Notes due 2010][7.250% Senior Secured Notes due 2012][7.300% Senior Secured Notes due 2015]
issued by the Company which have not been registered under the Securities Act of 1933, as amended
(the “Initial Notes”). The Initial Notes were issued in exchange for a like aggregate principal
amount of the [6.500% Notes due 2007][7.875% Notes due 2009][6.500% Secured Notes due
2010][7.250% Notes due 2012][7.300% Secured Notes due 2015] issued by R.J. Reynolds Tobacco
Holdings, Inc., a Delaware corporation (the “RJR Notes”). Interest on the Notes shall accrue from:
the most recent date on which interest has been paid on the Initial Notes; or, if no interest has
been paid on the Initial Notes, from the most recent date on which interest has been paid on the
RJR Notes; or, if no interest has been paid on the RJR Notes, from the date of issuance of the RJR
Notes; provided that if there is no existing Default in the payment of interest, and if this Note
is authenticated between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date.
Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

     2. Method of Payment. The Company shall pay interest on the Notes (except defaulted
interest) and Additional Interest, if any, to the Persons who are registered Holders of Notes at
the close of business on the [2007 and 2012 Notes: May 15 and November 15][2009 Notes: May 1 and
November 1][2010 and 2015 Notes: January 1 and July 1] immediately preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.13 of the Indenture with respect to defaulted interest. The
Notes shall be payable as to principal, premium and

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Additional Interest, if any, and interest at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the option of the
Company, payment of interest and Additional Interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment by wire transfer of
immediately available funds shall be required with respect to principal of and interest, premium
and Additional Interest on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in
such coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts.

     3. Paying Agent and Registrar. Initially, The Bank of New York Trust Company, N.A.,
the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.

     4. Indenture. The Company issued the Notes under an Indenture dated as of May 31,
2006, as supplemented, among the Company, as issuer, certain direct and indirect subsidiaries of the Company, as
guarantors, and The Bank of New York Trust Company, N.A., as trustee (the “Indenture”). The terms
of the Notes include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended. The Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such terms. To the
extent any provision of this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling.

     5. Optional Redemption. The Company may redeem all or a part of the Notes from time
to time in accordance with Article 5 of the Indenture at a redemption price equal to the greater of
(a) 100% of the principal amount of the Notes and (b) the sum of the present values of the
remaining scheduled payments of principal and interest on the Notes, discounted to the redemption
date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
applicable Treasury Rate plus [2007 Notes: 25][2009 Notes: 37.5][2010 and 2015 Notes: 50][2012
Notes: 30] basis points plus with respect to each of the Notes, accrued and unpaid interest,
including Additional Interest, if any, on the principal amount being redeemed to the date of
redemption.

     “Treasury
Rate” means, with respect to any redemption date, (1) the yield, under the heading
which represents the average for the immediate preceding week, appearing in the most recently
published statistical release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption
“Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue
(if no maturity is within three months before or after the Remaining Life, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue will be determined
and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line
basis, rounding to the nearest month) or (2) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Price for such

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redemption date. The Treasury Rate will be calculated on the third business day preceding the
redemption date.

     “Comparable
Treasury Issue” means the U.S. Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining
term (“Remaining Life”) of the
notes to be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such notes.

     “Independent
Investment Banker” means any of Lehman Brothers Securities Inc., J.P. Morgan
Securities Inc. or Citigroup Global Markets Inc. or, if all such firms are unwilling or unable to
select the Comparable Treasury Issue, an independent investment banking institution of national
standing appointed by the trustee after consultation with the Company.

     “Comparable
Treasury Price” means (1) the average of five Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such quotations.

     “Reference
Treasury Dealer” means (1) Lehman Brothers Securities Inc., J.P. Morgan
Securities Inc. and Citigroup Global Markets Inc. and their respective successors; provided,
however, that if either of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a “Primary Treasury Dealer”), the
Company will substitute for such firm another Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by the
Independent Investment Banker after consultation with the Company.

     “Reference
Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Independent Investment Banker, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.

     6. No Sinking Fund. The Company shall not be required to make sinking fund payments
with respect to the Notes.

     7. Notice of Redemption. Notice of redemption shall be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at
its registered address. Notes in denominations equal to or larger than $2,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.

     8. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in minimum denominations of $2,000 and integral multiples of $1,000. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate

3

 

endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for the unredeemed
portion of any Note being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during
the period between a record date and the corresponding Interest Payment Date.

     9. Persons Deemed Owners. The registered Holder of a Note may be treated as its
owner for all purposes.

     10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities at the time outstanding of all series affected by
such amendment or supplement, voting as a single class, and any existing Default or compliance with
any provision of the Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time outstanding of all series
affected by such Default, voting as a single class. Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes any property or assets; to evidence the succession
of another corporation to the Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of the Company; to add to the
covenants of the Company such further covenants, restrictions, conditions or provisions as its
Board of Directors and the Trustee shall consider to be for the protection or benefit of the
Holders of the Notes, and to make the occurrence, or the occurrence and continuance, of a Default
in any such additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in the Indenture as
therein set forth; provided, that in respect of any such additional covenant, restriction,
condition or provision such amendment or supplement may provide for a particular period of grace
after Default (which period may be shorter or longer than that allowed in the case of other
Defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit
the remedies available to the Trustee upon such an Event of Default or may limit the right of the
Holders of a majority in aggregate principal amount of the Notes to waive such an Event of Default;
to cure any ambiguity or to correct or supplement any provision contained in the Indenture or in
any indenture supplemental thereto which may be defective or inconsistent with any other provision
contained in the Indenture or in any indenture supplemental thereto; or to make such other
provisions in regard to matters or questions arising under the Indenture or under any indenture
supplemental thereto as the Board of Directors may deem necessary or desirable and which shall not
adversely affect the interests of the Holders of the Notes in any material respect; to evidence and
provide for the acceptance of appointment under the Indenture by a successor trustee with respect
to the Notes and to add to or change any of the provisions of the Indenture as shall be necessary
to provide for or facilitate the administration of the trusts thereunder by more than one trustee;
to comply with the requirements of the Trust Indenture Act of 1934,
as amended; and to add additional Guarantors with respect to the
Notes.

     11. Defaults and Remedies. Any of the following events constitutes an “Event of
Default” under the Indenture: (a) default in the payment of any installment of interest upon

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Securities of any series as and when the same shall become due and payable, and continuance of such
default for a period of 30 days; or (b) default in the payment of all or any part of the principal
on Securities of any series as and when the same shall become due and payable either at maturity,
upon any redemption, by declaration or otherwise; or (c) default in the payment of any sinking fund
installment as and when the same shall become due and payable by the terms of Securities of any
series; or (d) default in the performance, or breach, of any covenant or agreement of the Company
or the Guarantors in respect of Securities of any series (other than a covenant or agreement in
respect of such Securities a default in whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such default or breach for a period of 90 days
after there has been given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the outstanding Securities of all series affected
thereby, a written notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a “Notice of Default” hereunder; or (e) a court having jurisdiction in
the premises shall enter a decree or order for relief in respect of the Company or the Guarantors
in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Company or for any substantial part of its property or
ordering the winding up or liquidation of its affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (f) the Company or any Restricted
Subsidiary shall commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the
Company or for any substantial part of its property, or make any general assignment for the benefit
of creditors; or (g) any Guarantee ceases to be in full force and effect (except as contemplated by
the terms of the Indenture), or any Guarantee is declared in a judicial proceeding to be null and
void, or any Guarantor denies or disaffirms in writing its obligations under the terms of the
Indenture or its Guarantee; or (h) at any time as such security is required by the terms of the
Indenture, any Security Document shall cease to be in full force and effect or shall cease to give
the Collateral Agent the liens or any of the material rights, powers and privileges purported to be
created thereby in favor of the Collateral Agent and such default shall continue unremedied for a
period of at least 30 days after written notice to the Company by the Collateral Agent; or (i) any
other Event of Default provided in the supplemental indenture or Board Resolution under which
Securities of any series are issued or in this Note.

     If an Event of Default described in clauses (a), (b), (c), (d) or (i) above (if the Event of
Default under clause (d) or (i) is with respect to less than all series of Securities then
outstanding) occurs and is continuing, then, and in each and every such case, except for any series
of Securities the principal of which shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of the Securities of each such
affected series then outstanding under the Indenture (voting as a single class) by notice in
writing to the Company (and to the Trustee if given by Securityholders), may declare the entire
principal of all Securities of all such affected series, and the interest accrued thereon, if any,
to be due and payable immediately, and upon any such declaration the same shall become immediately
due and payable. If an Event of Default described in clause (d) or (i) (if the Event of Default
under clauses (d) or (i), as the case may be, is with respect to all series of Securities then
outstanding), (e), (f) or (g) occurs and is continuing, then and in each and every such case,

5

 

unless the principal of all the Securities shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities
then outstanding hereunder (treated as one class), by notice in writing to the Company (and to the
Trustee if given by Securityholders), may declare the entire principal of all the Securities then
outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any
such declaration the same shall become immediately due and payable.

     12. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the
Trustee.

     13. No Recourse Against Others. No director, officer, employee, incorporator or
shareholder of the Company or the Trustee, as such, shall have any liability for any obligations of
the Company or the Trustee, respectively, under the Notes or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such a waiver is against
public policy.

     14. Authentication. This Note shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.

     15. Guarantees. This Note will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Subject to the terms of the Indenture, each Guarantor of the
Indenture fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally, to each Holder of the Notes and the Trustee the full and punctual
payment when due, whether at maturity, by acceleration, by redemption, by repurchase, or otherwise,
of the principal of, premium, if any, and interest on the Notes and all other obligations of the
Company under the Indenture, as provided in the Indenture. Reference is made to the Indenture for
a statement of the respective rights, limitations of rights, duties and obligations thereunder of
the Guarantors, the Trustee and the Holders.

     16. Abbreviations. Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (=Uniform Gifts to Minors Act).

     17. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused CUSIP or ISIN
numbers or both numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN numbers or
both numbers in notices to the Holders of the Notes as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as contained in any
notice to the Holders of the Notes and reliance may be placed only on the other identification
numbers placed thereon.

6

 

     18. Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of New York.

     The Company shall furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to:

Reynolds American Inc.

401 North Main Street

Winston-Salem, North Carolina 27101-3818

Facsimile: 336-741-2998

Attention: Treasurer

7Ex-10.32

 

Exhibit 10.32

EQUITY INCENTIVE AWARD PLAN FOR

DIRECTORS OF REYNOLDS AMERICAN INC.

(Amended and Restated Effective September 13, 2006)

     Reynolds American Inc., a North Carolina corporation, hereby adopts this Equity Incentive
Award Plan for Directors of Reynolds American Inc. (amended and restated effective September 13,
2006). The Plan is an amendment, restatement and continuation of the Amended and Restated Equity
Incentive Award Plan for Directors of R.J. Reynolds Tobacco Holdings, Inc. and Subsidiaries. The
purposes of this Plan are as follows:

     (1) To further the growth, development and financial success of the Company by providing
additional incentives to its Directors by assisting them to become owners of capital stock of the
Company and thus to benefit directly from its growth, development and financial success.

     (2) To enable the Company to obtain and retain the services of the type of Directors
considered essential to the long-term success of the Company by providing and offering them an
opportunity to become owners of capital stock of the Company.

ARTICLE I

DEFINITIONS

Section 1.1 — General

     Whenever the following terms are used in this Plan they shall have the meaning specified below
unless the context clearly indicates to the contrary.

Section 1.2 — Affiliate

     “Affiliate” of any person shall mean another person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control with, such first
person.

Section 1.3 — BAT

     “BAT” shall mean, collectively, British American Tobacco, p.l.c., a public limited company
incorporated under the laws of England and Wales, and its Affiliates.

Section 1.4 — Board

     “Board” shall mean the Board of Directors of the Company.

Section 1.5 — Code

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

 

Section 1.6 — Committee

     “Committee” shall mean the Corporate Governance and Nominating Committee of the Board.

Section 1.7 — Common Stock

     “Common Stock” shall mean the common stock, par value $0.0001 per share, of the Company.

Section 1.8 — Company

     “Company” shall mean Reynolds American Inc., a North Carolina corporation.

Section 1.9 — Director

     “Director” shall mean a member of the Board.

Section 1.10 — Eligible Director

     “Eligible Director” shall mean a Director who has never been an employee or officer of the
Company, any Subsidiary, BAT or any of their Affiliates; provided, however, that the Non-Executive
Chairman shall be an Eligible Director.

Section 1.11 —  Grant

     “Grant” shall mean an award made to a Participant pursuant to the Plan.

Section 1.12 — Non-Executive Chairman

     “Non-Executive Chairman” shall mean the Non-Executive Chairman of the Board.

Section 1.13 — Option

     “Option” shall mean an option granted under the Plan to purchase Common Stock.

Section 1.14 — Option Price

     “Option Price” shall have the meaning given in Section 4.2.

Section 1.15 — Optionee

     “Optionee” shall mean a Director to whom an Option is granted under the Plan.

Section 1.16 — Participant

     “Participant” shall mean a Director to whom a Grant has been made.

-2-

 

Section 1.17 — Plan

     “Plan” shall mean the Equity Incentive Award Plan for Directors of Reynolds American Inc.

Section 1.18 — Secretary

     “Secretary” shall mean the Secretary of the Company.

Section 1.19
— Stock Award

     “Stock Award” shall mean the annual award, either in the form of deferred stock units or
shares of Common Stock, made pursuant to Article VI.

Section 1.20 — Subsidiary

     “Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with
the Company if each of the corporations, or if each group of commonly controlled corporations,
other than the last corporation in an unbroken chain then owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

ARTICLE II

SHARES SUBJECT TO PLAN

Section 2.1 — Shares Subject to Plan

     The shares of stock subject to Grant shall be shares of Common Stock. The aggregate number of
shares of Common Stock which are available for Grants under the Plan shall not exceed 1,000,000.
Shares of Common Stock related to Grants that are forfeited, terminated, canceled, expire
unexercised, settled in cash in lieu of stock or in such manner that all or some of the shares of
Common Stock covered by a Grant are not issued to a Participant, shall immediately become available
for Grants.

ARTICLE III

GRANTING OF OPTIONS

Section 3.1 — Eligibility

     Any Eligible Director shall be eligible to be granted Options as set forth in this Article
III.

Section 3.2 — Granting of Options to Directors

     Options may be granted at any time and solely in the discretion of the Committee to each
Eligible Director elected to serve on the Board. Such Options shall be subject to the terms and
conditions set forth in Article IV.

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ARTICLE IV

TERMS OF OPTIONS FOR DIRECTORS

Section 4.1 — Option Agreement

     A grant of Options to Eligible Directors shall be evidenced by a Stock Option Agreement, which
shall be executed by the Optionee and an authorized officer of the Company and which shall
incorporate the terms and conditions of this Article IV and such other terms and conditions as the
Committee shall determine, consistent with the Plan.

Section 4.2 — Option Price

     The exercise price of each share of Common Stock subject to an Option granted pursuant to
Section 3.2 shall be the final closing price of a share of Common Stock (as reported on the New
York Stock Exchange consolidated tape) on the date of grant.

Section 4.3 — Commencement of Exercisability

     Options granted pursuant to Section 3.2 shall not be exercisable prior to six (6) months after
the date of grant, and thereafter shall be exercisable in full, subject to applicable securities
regulations.

Section 4.4 — Expiration of Option

     The Option shall expire and may not be exercised to any extent after the expiration of ten
(10) years from the date the Option was granted.

ARTICLE V

EXERCISE OF OPTIONS

Section 5.1 — Persons Eligible to Exercise

     During the lifetime of the Optionee, only he or his guardian may exercise an Option granted to
him, or any portion thereof. After the death of the Optionee, any exercisable portion of an Option
may, prior to the time when such portion becomes unexercisable under Section 4.4, be exercised by
his personal representative or by any person empowered to do so under the deceased Optionee’s will
or under the then applicable laws of descent and distribution.

Section 5.2 — Partial Exercise

     At any time and from time to time prior to the time when any exercisable Option or exercisable
portion thereof expires or becomes unexercisable under Section 4.4, such Option or portion thereof
may be exercised in whole or in part; provided, however, that the Company shall not
be required to issue fractional shares.

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Section 5.3 — Manner of Exercise

     An exercisable Option, or any exercisable portion thereof, may be exercised solely by
delivering to the Secretary or his office all of the following prior to the time when such Option
or such portion becomes unexercisable:

     (a) Notice in writing signed by the Optionee or other person then entitled to exercise such
Option or portion thereof, stating that such Option or portion thereof is exercised;

     (b) Full payment of the Option Price shall be made in cash, by check or a combination thereof,
for the shares of Common Stock with respect to which such Option or portion thereof is thereby
exercised, together with payment of any federal income or other tax required to be withheld by the
Company with respect to such shares of Common Stock, in accordance with the terms of the Plan and
of any applicable guidelines of the Committee in effect at the time. The requirement of payment
will be deemed satisfied if the Participant has made arrangements satisfactory to the Company with
a duly registered broker-dealer that is a member of the National Association of Securities Dealers,
Inc. to sell on the date of exercise a sufficient number of shares of Common Stock being purchased
so that the net proceeds of the sale transaction will at least equal the full exercise price and
pursuant to which the broker-dealer undertakes to deliver the full exercise price to the Company
not later than the later of (i) the settlement date of the sale transaction and (ii) the date on
which the Company delivers to the broker-dealer the shares of Common Stock being purchased pursuant
to the exercise of such Option. This method is known as the “broker-dealer exercise method” and is
subject to the terms and conditions set forth herein, in the Option grant agreement and in
guidelines established by the Committee;

     (c) Such representations and documents as the Committee reasonably deems necessary or
advisable to effect compliance with all applicable provisions of the Securities Act of 1933, as
amended and any other federal, state or foreign securities laws or regulations. The Committee may,
in its absolute discretion, also take whatever additional actions it deems appropriate to effect
such compliance, including, without limitation, placing legends on share certificates and issuing
stop-transfer orders to transfer agents and registrars; and

     (d) In the event that the Option or portion thereof shall be exercised pursuant to Section 5.1
by any person or persons other than the Optionee, appropriate proof of the right of such person or
persons to exercise the Option or portion thereof.

Section 5.4 — Rights as Stockholders

     The holders of Options shall not be, nor have any of the rights or privileges of, stockholders
of the Company in respect of any shares of Common Stock purchasable upon the exercise of any part
of an Option unless and until certificates representing such shares of Common Stock have been
issued by the Company to such holders.

Section 5.5 — Transfer Restrictions

     The Committee, in its absolute discretion, may impose such restrictions on the transferability
of the shares of Common Stock purchasable upon the exercise of an Option as it

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deems appropriate, and any such restriction shall be set forth in the respective Stock Option
Agreement and may be referred to on the certificates evidencing such shares of Common Stock.

ARTICLE VI

STOCK AWARDS

Section 6.1 — Granting of Initial Stock Award to Directors

     (a) Each Eligible Director who is elected to serve on the Board shall receive an initial Stock
Award as of the date of such Director’s initial election to serve on the Board (an “Initial Stock
Award”). Such Initial Stock Award shall be granted only once to each Eligible Director as soon as
practicable following the Director’s initial election to serve on the Board and shall be subject to
the terms and conditions set forth in this Article VI. Notwithstanding this Section 6.1(a), in the
event of the appointment of an existing Director who is or was an employee of the Company to the
position of Non-Executive Chairman and such Director has not yet received an Initial Stock Award,
the Non-Executive Chairman shall receive an Initial Stock Award upon his or her appointment to the
position of Non-Executive Chairman.

     (b) Except as provided in Section 6.1(c) below, the Initial Stock Award shall be made in the
form of deferred stock units, as described in Section 6.4. Each Eligible Director shall receive an
Initial Stock Award of 3,500 deferred stock units.

     (c) Notwithstanding the foregoing, commencing with the Initial Stock Award for 2004, an
Eligible Director may elect to receive the Initial Stock Award in the form of 3,500 shares of
Common Stock. The election to receive shares of Common Stock must be made in writing within thirty
(30) days after the date a Director becomes a Director. An election to receive shares of Common
Stock shall be irrevocable by the Director.

Section 6.2 — Granting of Annual Stock Awards

     (a) Each Eligible Director shall receive an annual Stock Award as of the date of the Company’s
annual meeting of stockholders or the one (1) year anniversary of the preceding year’s annual
meeting of stockholders, if no meeting has been scheduled for such subsequent year, provided that
the Director serves on the Board immediately following such date (an “Annual Stock Award”). The
Annual Stock Award for 2005 shall be made as of July 30, 2005 or, if later, the date of the
Director’s election or re-election to serve on the Board.

     (b) Except as provided in Section 6.2(c) below, the Annual Stock Award shall be made in the
form of deferred stock units, as described in Section 6.4. Each Eligible Director, other than the
Non-Executive Chairman, shall receive an Annual Stock Award of 2,000 deferred stock units. The
Non-Executive Chairman shall receive an Annual Stock Award of 4,000 deferred stock units.

     (c) Notwithstanding the foregoing, commencing with the Annual Stock Award for 2005, an
Eligible Director or the Non-Executive Chairman may elect to receive the Annual Stock Award in the
form of 2,000 or 4,000 shares of Common Stock, respectively. The election to receive shares of
Common Stock must be made in writing by December 31 of the year preceding the year during which the
Annual Stock Award would otherwise be granted or, if later, within

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thirty (30) days after the date a Director becomes a Director. An election to receive shares
of Common Stock shall be irrevocable by the Director and shall be effective only for the year
immediately following the date on which it was filed.

Section 6.3 — Grant of Quarterly Stock Awards

     (a) Each Eligible Director shall receive a quarterly Stock Award on the last day of each
calendar quarter, provided that the Director has served on the Board at any time during such
calendar quarter (a “Quarterly Stock Award”).

     (b) The Quarterly Stock Award shall be made in the form of deferred stock units, as described
in Section 6.4. The number of deferred stock units to be credited to each Eligible Director’s
account, other than the Non-Executive Chairman’s account, on the last day of each calendar quarter
shall be determined pursuant to the following formula: $10,000 divided by the average of the
closing price of a share of Common Stock (as reported on the New York Stock Exchange (“NYSE”)
consolidated tape for each business day during the last month of such calendar quarter). The
number of deferred stock units to be credited to the Non-Executive Chairman’s account on the last
day of each calendar quarter shall be determined pursuant to the following formula: $20,000
divided by the average of the closing price of a share of Common Stock (as reported on the NYSE
consolidated tape for each business day during the last month of such calendar quarter). In the
event an Eligible Director has served on the Board or in the position of Non-Executive Chairman for
less than an entire quarter, the number of deferred stock units to be credited to his or her
account on the last day of such quarter shall be prorated based on the actual number of days of his
or her service on the Board during the quarter.

Section 6.4 — Deferred Stock Units

     Each deferred stock unit shall be equal in value to one (1) share of Common Stock. As of the
date any dividend is paid to shareholders of Common Stock, the Director shall be credited with
additional deferred stock units equal to the number of shares of Common Stock (including fractions
of a share) that could have been purchased at the closing price of Common Stock on such date with
the dividend paid on the number of shares of Common Stock to which the Director’s deferred stock
units are then equivalent. In case of dividends paid in property, the dividend shall be deemed to
be the fair market value of the property at the time of distribution of the dividend, as determined
by the Committee.

Section 6.5 — Distribution of Deferred Stock Units

     (a) For all Grants made under this Plan prior to December 31, 2004, the distribution of a
Participant’s deferred stock units will be made as follows:

     (i) Unless as otherwise elected in Section 6.5(a)(ii), payment of a Participant’s
deferred stock units shall be made in one (1) lump sum as soon as practicable following the
end of the year in which the Participant ceases to be a Director.

     (ii) At the election of the Participant made in writing and delivered to the Committee
at any time on or before December 1 of the year of termination of the Participant’s service
as a Director, distribution of all of his or her deferred stock units,

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commencing as soon as practicable following the end of the year in which the
Participant ceases to be a Director, shall be made in any number of annual installments not
exceeding ten (10). Any such election, unless made irrevocable by its terms, may be changed
by written notice to the Committee at any time prior to December 1 of the year of a
Participant’s termination of service as a Director.

     (b) For all Grants made under this Plan after December 31, 2004, the distribution of a
Participant’s deferred stock units will be made as follows:

     (i) According to the election by each Participant on an annual election form provided
by the Company to the Participant in December of the year preceding the grant of any award
under this Plan in the next Plan year, payment of a Participant’s deferred stock units will
be made either in a lump sum or in any number of annual installments not exceeding ten (10),
both upon a date or dates certain or commencing in the January following the termination of
service as a Director.

     (ii) Elections pursuant to Section 6.5(b)(i) are not irrevocable; provided,
however, any subsequent election that changes the timing or form of a Participant’s
previous distribution election must comply with Section 409A of the Code, including
requirements that such election (A) may not be effective until twelve (12) months after the
date the election is made, (B) any subsequent elections relating to payments scheduled for a
particular date or dates must be made at lease twelve (12) months prior to the date of the
first scheduled payment, and (C) all subsequent elections for distributions, other than
those triggered by disability, death or an unforeseeable emergency, must delay distribution
by at least five (5) years from the original distribution date.

     (c) Distribution of a Participant’s deferred stock units received in connection with such
Participant’s Quarterly Stock Awards shall be made only in cash. Distribution of a Participant’s
deferred stock units received in connection with such Participant’s Initial Stock Award and Annual
Stock Awards shall be made in cash or stock, at the election of the Participant made in writing and
delivered to the Committee at any time on or before December 1 of the year of termination of the
Participant’s service as a Director. If distribution is made in cash, the amount of distribution
shall be determined by multiplying the number of deferred stock units attributable to the
installment by the average of the closing price in Common Stock on each business day in the month
of December immediately prior to the year in which the installment is to be paid. If distribution
is made in stock, any fractional shares of stock shall be paid in cash equal to the value of the
fractional share multiplied by the closing price of the Common Stock on the last business day
immediately preceding the date of distribution.

Section 6.6 — Installment Amount

     In the event a Participant has elected to receive distribution of his or her deferred stock
units in more than one (1) installment, the amount of each installment shall be determined by
multiplying the current number of deferred stock units by a fraction, the numerator of which is one
(1), and the denominator of which is the number of installments yet to be paid.

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Section 6.7 — Distribution upon Death

     In the event of the death of a Participant, whether before or after ceasing to serve as a
Director, any deferred stock units to which he or she was entitled, shall be converted to cash and
distributed in a lump sum to such person or persons or the survivors thereof, including
corporations, unincorporated associations or trusts, as the Participant may have designated. All
such designations shall be made in writing signed by the Participant and delivered to the
Committee. A Participant may from time to time revoke or change any such designation by written
notice to the Committee. If there is no unrevoked designation on file with the Committee at the
time of the Participant’s death, or if the person or persons designated therein shall have all
predeceased the Participant or otherwise ceased to exist, such distributions shall be made in
accordance with the Participant’s will or in the absence of a will, to the administrator of the
Participant’s estate. Any distribution under this Section 6.7 shall be made as soon as practicable
following the end of the fiscal quarter in which the Committee is notified of the Participant’s
death. In this case, a Participant’s deferred stock units shall be converted to cash by
multiplying the number of whole and fractional shares of Common Stock to which the Participant’s
deferred stock units are equivalent by the average of the closing price of Common Stock on each
business day during the last month of the calendar quarter prior to the date of death.

Section 6.8 — Withholding Taxes

     The Company shall deduct from all distributions under the Plan any taxes required to be
withheld by federal, state, or local governments.

Section 6.9 — Terms and Conditions

     All Stock Awards shall be subject to the terms and conditions of this Article VI and such
other terms and conditions as the Committee shall determine, consistent with the Plan.

ARTICLE VII

ADMINISTRATION

Section 7.1 — Plan Administrator

     The Plan shall be administered by the Committee.

Section 7.2
— Duties and Powers of Committee

     It shall be the duty of the Committee to conduct the general administration of the Plan in
accordance with its provisions. The Committee shall have the power to interpret the Plan and the
Grants and to adopt such rules for the administration, interpretation, and application of the Plan
as are consistent therewith and to interpret, amend or revoke any such rules. Any such
interpretations and rules shall be consistent with the basic purpose of the Plan to make Grants.
In its absolute discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan. The Committee may act either by vote at a
telephonic or other meeting or by unanimous written consent in lieu of a meeting.

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Section 7.3 — Compensation; Professional Assistance; Good Faith Actions

     Members of the Committee shall not receive compensation for their services as members in
connection with the administration of the Plan, but all expenses and liabilities they incur in
connection with the administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee,
the Company, the Directors and the officers of the Company shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding upon all
Participants, the Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good faith with respect
to the Plan or the Grants, and all members of the Committee shall be fully protected by the Company
with respect to any such action, determination or interpretation.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

Section 8.1 — Amendment, Suspension or Termination of the Plan

     The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Board. Except as expressly permitted by the terms of the
Plan, neither the amendment, suspension nor termination of the Plan shall, without the consent of
the Participant alter or impair any rights or obligations under any Grant theretofore granted. No
Grant may be made during any period of suspension nor after termination of the Plan.

Section 8.2 — Effect of Plan Upon Other Options and Compensation Plans

     Nothing in this Plan shall be construed to limit the right of the Company or any of its
Subsidiaries (a) to establish any other forms of incentives or compensation for Directors of the
Company or any of its Subsidiaries or (b) to grant or assume options other than under this Plan in
connection with any proper corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease, merger, consolidation
or otherwise, of the business, stock or assets of any corporation, firm, association or other
entity.

Section 8.3 — Adjustments

     (a) In the event of any change in the outstanding Common Stock by reason of a stock split,
spin-off, stock dividend, stock combination or reclassification, recapitalization or merger, change
of control, or similar event, the Committee shall (i) adjust appropriately the number of shares of
Common Stock subject to the Plan and available for or covered by Grants, the number of deferred
stock units or shares of Common Stock constituting Initial Stock Awards and Annual Stock Awards in
Section 6.1 and 6.2 hereof and share prices related to outstanding Grants and (ii) make such other
revisions to outstanding Grants as it deems are equitably required. Any such adjustment made by
the Committee shall be final and binding upon all Participants, the Company and all other
interested persons.

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     (b) In the event of a Change of Control (as defined in paragraph 8.3(c) hereof):

     (i) Options granted pursuant to Article III hereof shall become fully vested and
exercisable; provided, however, that the Committee may elect to make a cash
payment to Participants in cancellation of such Options in such amount as the Committee in
its sole discretion shall determine, which amount shall not be less than the product of (x)
and (y), where (x) is the excess of the fair market value of Common Stock on the date of
exercise over the exercise price, and (y) is the number of shares of Common Stock subject to
the Options being canceled.

     (ii) Subject to Section 8.4, deferred stock units granted pursuant to Article VI hereof
shall be distributed to Participants in a single lump sum.

     (c) For purposes of the Plan, a “Change of Control” shall mean the first to occur of the
following events:

     (i) an individual, corporation, partnership, group, associate or other entity or
“person”, as such term is defined in Section 14(d) of the Securities Exchange Act of 1934
(the “Exchange Act”), other than the Company or any employee benefit plans sponsored by the
Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of thirty percent (30%) or more of the combined voting power
of the Company’s outstanding securities ordinarily having the right to vote at elections of
directors; provided, however, that the acquisition of Company securities by
BAT pursuant to the Business Combination Agreement, dated as of October 27, 2003, between
R.J. Reynolds Tobacco Holdings, Inc. (“RJR”) and Brown & Williamson Tobacco Corporation
(“B&W”), as thereafter amended (the “BCA”) or as expressly permitted by the Governance
Agreement, dated as of July 30, 2004, among British American Tobacco, p.l.c., B&W and the
Company (the “Governance Agreement”), shall not be considered a Change of Control for
purposes of this subsection (i).

     (ii) individuals who constitute the Board (or who have been designated as directors in
accordance with Section 1.09 of the BCA) on July 30, 2004 (the “Incumbent Board”) cease for
any reason to constitute at least a majority thereof, provided that any person becoming a
director subsequent to such date whose election, or nomination for election by the Company’s
shareholders, was (1) approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee of the Company for
director) or (2) made in accordance with Section 2.01 of the Governance Agreement, but
excluding for this purpose any such individual whose initial assumption of office occurs as
a result of either an actual or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of an individual, corporation,
partnership, group, associate or other entity or “person” other than the Board, shall be,
for purposes of this paragraph (ii), considered as though such person were a member of the
Incumbent Board;

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     (iii) the approval by the shareholders of the Company of a plan or agreement providing
(1) for a merger or consolidation of the Company other than with a wholly-owned Subsidiary
and other than a merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than
fifty percent (50%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or consolidation, or (2) for
a sale, exchange or other disposition of all or substantially all of the assets of the
Company, other than any such transaction where the transferee of all or substantially all of
the assets of the Company is a wholly owned subsidiary or an entity more than fifty percent
(50%) of the combined voting power of the voting securities of which is represented by
voting securities of the Company outstanding immediately prior to the transaction (either
remaining outstanding or by being converted into voting securities of the transferee
entity). If any of the events enumerated in this paragraph (iii) occur, the Board shall
determine the effective date of the Change of Control resulting therefrom for purposes of
the Plan or the Grants hereunder.

Section 8.4 — Compliance with Section 409A of the Code

     The Plan is intended to comply with Section 409A of the Code and shall be construed and
interpreted in accordance with such intent.

Section 8.5 — Titles

     Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.

Section 8.6 — Pronouns

     The masculine pronoun shall include the feminine and neutral and the singular shall include
the plural, where the context so indicates.

Section 8.7 — Governing Law

     All questions arising in respect of the Plan, including those pertaining to its validity,
interpretation and administration, shall be governed, controlled and determined in accordance with
the applicable provisions of federal law and, to the extent not preempted by federal law, the laws
of the State of North Carolina.

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