Document:

Exhibit 10.16.1

 

Exhibit 10.16.1

FIRST AMENDMENT TO

COMMERCIAL LEASE AGREEMENT

     This First Amendment to Commercial Lease Agreement (this “First Amendment”), dated
April 1, 2008 (“Effective Date”), is entered into by and between CCI-B LANGFIELD I, LLC, a
Delaware limited liability company (“Lessor”), and L. B. FOSTER COMPANY, a Pennsylvania
corporation (“Lessee”).

W I T N E S S E T H:

     WHEREAS, Lessor and Lessee entered into that certain Commercial Lease Agreement (Unimproved
Property) dated March 3, 2008 (the “Lease”), wherein Lessor leased to Lessee approximately
20 acres of land, together with all improvements thereon (the “Existing Premises”) located
in Harris County, Texas, all as more fully described in the Lease; and

     WHEREAS, Lessor and Lessee desire to amend the Lease in accordance with the terms and
conditions set forth below;

     NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lessor and Lessee hereby agree as follows (capitalized terms used herein having the
meanings ascribed to them in the Lease unless specifically defined herein):

	1.	 	TEMPORARY PREMISES. Effective as of the Effective Date, the Premises shall be
expanded to include the East Parcel, plus an additional approximately 3.7 acres out of the
Property (the “Additional Parcel”), as such Additional Parcel is more particularly
described in Section 2 below (the East Parcel and the Additional Parcel, as adjusted, if
adjusted, pursuant to Section 2 and/or Section 3 below, together with a reasonable right of
ingress and egress between and among the East Parcel, the Additional Parcel and the
remainder of the Premises, being herein referred to as the “Temporary Premises”).
The East Parcel and the initial configuration of the Additional Parcel contain an aggregate
of approximately 9 acres of surface area. From and after the Effective Date and through
the end of the Temporary Premises Term (defined below), for all purposes under the Lease,
including without limitation the calculation of Base Rent, the Premises shall be comprised
of the Existing Premises and the Temporary Premises. Notwithstanding anything to the
contrary contained herein or in the Lease, no termination or partial termination with
respect to the Temporary Premises shall result in, or be factored into the calculation of,
any Partial Release Adjustment.

	2.	 	ADDITIONAL PARCEL. The initial location of the Additional Parcel shall be the
portion of the Property upon which a certain portion of the nominal 24” diameter coated
steel pipe is currently stored, plus such additional working area surrounding such pipe as
is necessary in Lessee’s determination, up to a maximum total area of approximately 3.7
acres, as such initial Additional Parcel is depicted for identification purposes only on
Exhibit A attached hereto. In the event that Lessor requires the use of the land
constituting the Additional Parcel, Lessor shall have the right to relocate the Additional
Parcel to a mutually agreeable alternate location, due consideration being given to

 

 

	 	 	Lessee’s operations on the remainder of the Premises, by providing written notice of such
intent to Lessee (the “Relocation Notice”). Promptly upon delivery of the
Relocation Notice, Lessor and Lessee shall cooperate in good faith to determine a mutually
acceptable new location for the Additional Parcel, and the parties shall acknowledge such
agreement in an amendment to the Lease. Lessee shall have a period of 30 days after such
amendment is signed by both parties in which to move Lessee’s property from the existing
Additional Parcel to the new Additional Parcel. Lessee shall have the right, from time to
time, to request that the Additional Parcel (including any new Additional Parcel) be
expanded, in which events Lessor and Lessee shall cooperate in good faith to determine a
mutually acceptable location or locations for expansion of the Additional Parcel. Upon the
mutual agreement of the parties as to such location(s), the parties shall acknowledge such
agreement by signing and delivering each to the other a notice of expansion in substantially
the form of Exhibit B hererto.

	3.	 	TEMPORARY PREMISES TERM. The Term of the Lease with respect to the Temporary
Premises (the “Temporary Premises Term”) shall commence on the Effective Date, and
shall continue for a period of three (3) consecutive months, and thereafter shall renew on
a month-to-month basis unless terminated, or partially terminated, by Lessee on not less
than thirty (30) days’ written notice, such notice to be substantially in the form of
Exhibit B hereto, and by substantially vacating the portion of the Temporary Premises so
terminated on or before the designated termination date.

	4.	 	RATIFICATION. The Lease, as amended by this First Amendment, is hereby
ratified and affirmed and, except as expressly amended hereby, all other items and
provisions of the Lease remain unchanged and continue to be in full force and effect. The
terms of this First Amendment shall control over any conflicts between the terms of the
Lease and the terms of this First Amendment.

	5.	 	CAPTIONS. The captions throughout this First Amendment are inserted as a
matter of convenience only and in no way confine, limit, or describe the scope or intent of
any paragraph of this First Amendment to Lease.

	6.	 	COUNTERPARTS. This First Amendment may be executed in multiple counterparts,
each of which shall be deemed to be an original and all of which together shall constitute
one document. The parties hereto agree that execution of this First Amendment with
delivery accomplished by facsimile copy transmission shall constitute and have the same
effect as the delivery of an executed original.

[Signature Page to Follow]

2

 

     IN WITNESS WHEREOF, this First Amendment is executed to be effective as of the Effective Date.

	 	 	 	 	 
	 	“Lessor”

CCI-B LANGFIELD I, LLC,

a Delaware limited liability company

 	 
	 	By:  	/s/ Tyndale Yaap 	 
	 	Name:  	Tyndale Yaap 	 
	 	Title:  	Managing Director - Industrial 	 
	 

	 	 	 	 	 
	 	“Lessee”

L. B. FOSTER COMPANY,

a Pennsylvania corporation

 	 
	 	By:  	/s/ Stan L. Hasselbusch
 	 
	 	Name:  	Stan L. Hasselbusch 	 
	 	Title:  	President and Chief Executive Officer 	 
	 

 

 

EXHIBIT A

Additional Parcel

 

 

 

 

EXHIBIT B

Form of Notice of Expansion, Termination or Partial Termination of Temporary Premises

[Date]

CCI-B Langfield I, LLC

c/o Capital Commercial Investments, Inc

300 West 6th Street, Suite 1750

Austin, Texas 78701

Attention: Paul D. Agarwal

			
	Re:	 	Commercial Lease Agreement (Unimproved Property), dated March 3, 2008, by and between CCI-B

Langfield I, LLC, as Lessor, and L. B. Foster Company, as Lessee (as amended, the “Lease”),

for certain property located in Harris County, Texas as more particularly described therein;

NOTICE OF [EXPANSION] [PARTIAL] [TERMINATION]

Ladies and Gentlemen:

     The undersigned, as Lessee, hereby notifies you that it has elected to exercise its right,
pursuant to the First Amendment to Commercial Lease Agreement dated as of ___, 2008 (the
“First Amendment”), to [terminate] [partially terminate] [expand] the Temporary Premises as set
forth in this letter. By countersigning this letter in the space provided below, you are
acknowledging your agreement to the terms set forth herein, which shall be and constitute an
amendment to the Lease. All capitalized terms used but not defined herein shall have the meaning
given to such terms in the Lease.

     Alternative 1: [The Lease with respect only to the Temporary Premises is hereby
terminated, such termination to be effective as of ___.]

     Alternative 2: [The Lease with respect to that portion of the Temporary Premises
containing approximately ___acres and described on Schedule 1 hereto (the “Partial Termination
Parcel”) is hereby terminated, such termination to be effective as of ___.]

     Alternative 3: [The Additional Parcel, as such term is defined in the First
Amendment, is hereby expanded to include the approximately ___acres of land described on
Schedule 1 hereto (the “Expansion Parcel”), together with any and all improvements located thereon
and reasonable ingress and egress between such Expansion Parcel and the remainder of the Premises,
such expansion to be effective as of ___.]

     From and after the date immediately set forth above and continuing until the expiration of the
Temporary Premises Term, the surface area of the Premises shall be comprised of a total of ___
acres of land.

 

 

     The Lease, as amended by this letter, is hereby ratified and affirmed and, except as expressly
amended hereby, all other items and provisions of the Lease remain unchanged and continue to be in
full force and effect. The terms of this letter shall control over any conflicts between the terms
of the Lease and the terms of this letter.

     This letter may be executed in multiple counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one document. The parties hereto agree that
execution of this letter with delivery accomplished by facsimile copy transmission shall constitute
and have the same effect as the delivery of an executed original.

	 	 	 	 	 
	 	Sincerely,

L. B. Foster Company

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

Acknowledged and agreed as of this ___day of ___, 20___.

CCI-B Langfield I, LLC

			
	By:	 	 

			
	Name:	 	 

			
	Title:	 	 

 

 

Schedule 1

Description of the [Partial Termination] [Expansion] Parcel

[To Be Attached]EX-10.1

 

EXHIBIT 10.1

 
 The Procter & Gamble Company

Executive Offices

1 Procter & Gamble Plaza, Cincinnati, Ohio 45202-3315

October 10, 2006

	To:	 	 Participants in The Procter & Gamble 2001 Stock and Incentive Compensation Plan

     This document provides a copy of The Procter & Gamble 2001 Stock and Incentive Compensation
Plan followed by important Additional Information. Please save this with your stock option
materials.

Very truly yours,

James J. Johnson

Secretary

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

Rewards of Leadership

 

 

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

(as adjusted for stock split on May 21, 2004 and amended on October 10, 2006)

ARTICLE A — Purpose.

     The purposes of The Procter & Gamble 2001 Stock and Incentive Compensation Plan (the “Plan”)
are to strengthen the alignment of interests between those employees of The Procter & Gamble
Company (the “Company”) and its subsidiaries who are largely responsible for the success of the
business (the “Participants”) and the Company’s shareholders through ownership behavior and the
increased ownership of shares of the Company’s common stock (the “Common Stock”), and to encourage
the Participants to remain in the employ of the Company and its subsidiaries. This will be
accomplished through the granting of options to purchase shares of Common Stock, the granting of
performance related awards, the payment of a portion of the Participants’ remuneration in shares of
Common Stock, the granting of deferred awards related to the increase in the price of Common Stock,
and the granting of restricted stock units (“RSUs”) or other awards that are related to the price
of Common Stock.

ARTICLE B — Administration.

     1. The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board
of Directors of the Company (the “Board”), or such other committee as may be designated by the
Board. The Committee shall consist of not fewer than three (3) members of the Board who are
“Non-Employee Directors” as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the “1934 Act”), or any successor rule or definition adopted by the Securities and
Exchange Commission, to be appointed by the Board from time to time and to serve at the discretion
of the Board. The Committee may establish such regulations, provisions, and procedures within the
terms of the Plan as, in its opinion, may be advisable for the administration and operation of the
Plan, and may designate the Secretary of the Company or other employees of the Company to assist
the Committee in the administration and operation of the Plan and may grant authority to such
persons to execute documents on behalf of the Committee. The Committee shall report to the Board
on the administration of the Plan not less than once each year.

     2. Subject to the express provisions of the Plan, the Committee shall have authority: to grant
nonstatutory and incentive stock options; to grant stock appreciation rights either freestanding or
in tandem with simultaneously granted stock options; to grant Performance Awards (as defined in
Article J); to award a portion of a Participant’s remuneration in shares of Common Stock subject to
such conditions or restrictions, if any, as the Committee may determine; to award RSUs or other
awards that are related to the price of Common Stock; to determine all the terms and provisions of
the respective stock option, stock appreciation right, stock award, RSU, or other award agreements
including setting the dates when each stock option or stock appreciation right or part thereof may
be exercised and determining the conditions and restrictions, if any, of any shares of Common Stock
acquired through the exercise of any stock option; to provide for special terms for any stock
options, stock appreciation rights, stock awards, RSUs or other awards granted to Participants who
are foreign nationals or who are employed by the Company or any of its subsidiaries outside of the
United States of America in order to fairly accommodate for differences in local law, tax policy or
custom and to approve such supplements to or amendments, restatements or alternative versions of
the Plan as the Committee may consider necessary or appropriate for such purposes (without
affecting the terms of the Plan for any other purpose); and to make all other determinations it
deems necessary or advisable for administering the Plan. In addition, at the time of grant the
Committee shall have the further authority to:

	 	(a)	 	waive the provisions of Article F, Paragraph 1(a);

 

 

	 	(b)	 	waive the provisions of Article F, Paragraph 1(b);
	 
	 	(c)	 	waive the provisions of Article G, Paragraph 4(a), 4(b) and 4(c); and
	 
	 	(d)	 	impose conditions in lieu of those set forth in Article G, Paragraphs 4 through 7,
for nonstatutory stock options, stock appreciation rights, stock awards, RSUs, or
Performance Awards which do not increase or extend the rights of the Participant.

ARTICLE C — Participation.

     The Committee shall select as Participants those employees of the Company and its subsidiaries
who, in the opinion of the Committee, have demonstrated a capacity for contributing in a
substantial manner to the success of such companies.

ARTICLE D — Limitation on Number of Shares Available Under the Plan.

     1. Unless otherwise authorized by the shareholders and subject to Paragraph 2 of this Article
D, the maximum aggregate number of shares available for award under the Plan shall be one hundred
ninety million (190,000,000) shares. Any of the authorized shares may be used for any of the types
of awards described in the Plan, except that no more than fifteen percent (15%) of the authorized
shares may be awarded as restricted or unrestricted stock.

     2. In addition to the shares authorized for award by Paragraph 1 of this Article, the
following shares may be awarded under the Plan:

          (a) shares that were authorized to be awarded under The Procter & Gamble 1992 Stock Plan (the
“1992 Plan”), but that were not awarded under the 1992 Plan;

          (b) shares awarded under the Plan or the 1992 Plan that are subsequently forfeited in
accordance with the Plan or the 1992 Plan, respectively;

          (c) shares tendered by a Participant in payment of all or part of the exercise price of a
stock option awarded under the Plan or the 1992 Plan;

          (d) shares tendered by or withheld from a Participant in satisfaction of withholding tax
obligations with respect to a stock option awarded under the Plan or the 1992 Plan.

ARTICLE E — Shares Subject to Use Under the Plan.

     1. The shares to be delivered by the Company upon exercise of stock options or stock
appreciation rights shall be determined by the Board and may consist, in whole or in part, of
authorized but unissued shares or treasury shares. In the case of redemption of stock appreciation
rights by one of the Company’s subsidiaries, such shares shall be shares acquired by that
subsidiary.

     2. For purposes of the Plan, restricted or unrestricted stock awarded or issued following
redemption of RSUs under the terms of the Plan shall be authorized but unissued shares, treasury
shares, or shares acquired in the open market by the Company or a subsidiary, as determined by the
Board.

 

 

ARTICLE F — Stock Options and Stock Appreciation Rights.

     1. In addition to such other conditions as may be established by the Committee, in
consideration of the granting of stock options or stock appreciation rights under the terms of the
Plan, each Participant agrees as follows:

	 	(a)	 	The right to exercise any stock option or stock appreciation right shall be
conditional upon certification by the Participant at time of exercise that the
Participant intends to remain in the employ of the Company or one of its subsidiaries for
at least one (1) year following the date of the exercise of the stock option or stock
appreciation right (provided that termination of employment due to Retirement or Special
Separation shall not constitute a breach of such certification), and,
	 
	 	(b)	 	In order to better protect the goodwill of the Company and its subsidiaries and to
prevent the disclosure of the Company’s or its subsidiaries’ trade secrets and
confidential information and thereby help insure the long-term success of the business,
the Participant, without prior written consent of the Company, will not engage in any
activity or provide any services, whether as a director, manager, supervisor, employee,
adviser, consultant or otherwise, for a period of three (3) years following the date of
the Participant’s termination of employment with the Company, in connection with the
manufacture, development, advertising, promotion, or sale of any product which is the
same as or similar to or competitive with any products of the Company or its subsidiaries
(including both existing products as well as products known to the Participant, as a
consequence of the Participant’s employment with the Company or one of its subsidiaries,
to be in development):

	 	(1)	 	with respect to which the Participant’s work has been directly
concerned at any time during the two (2) years preceding termination of employment
with the Company or one of its subsidiaries or
	 
	 	(2)	 	with respect to which during that period of time the Participant, as a
consequence of the Participant’s job performance and duties, acquired knowledge of
trade secrets or other confidential information of the Company or its subsidiaries.

	 	 	 	For purposes of this paragraph, it shall be conclusively presumed that Participants have
knowledge of information they were directly exposed to through actual receipt or review
of memos or documents containing such information, or through actual attendance at
meetings at which such information was discussed or disclosed.
	 
	 	(c)	 	The provisions of this Article are not in lieu of, but are in addition to the
continuing obligation of the Participant (which Participant hereby acknowledges) to not
use or disclose the Company’s or its subsidiaries’ trade secrets and confidential
information known to the Participant until any particular trade secret or confidential
information become generally known (through no fault of the Participant), whereupon the
restriction on use and disclosure shall cease as to that item. Information regarding
products in development, in test marketing or being marketed or promoted in a discrete
geographic region, which information the Company or one of its subsidiaries is
considering for broader use, shall not be deemed generally known until such broader use
is actually commercially implemented. As used in this Article, “generally known” means
known throughout the domestic U. S. industry or, in the case of Participants who have job
responsibilities outside of the United States, the appropriate foreign country or
countries’ industry. As used in this Article, “trade secrets and other confidential
information” also includes personnel knowledge about a manager, or managers, of the
Company or its subsidiaries gained in the course of Participant’s

 

 

	 	 	 	employment with the Company or its subsidiaries (including personnel ratings or
rankings, manager or peer evaluations, performance records, special skills or abilities,
compensation, work and development plans, training, nature of specific project and work
assignments, or specialties developed as a result of such assignments) which directly or
indirectly affords the Participant a confidential basis to solicit, encourage, or
participate in soliciting any manager, or managers, of the Company or any subsidiary to
terminate his or her relationship with the Company or that subsidiary.
	 
	 	(d)	 	By acceptance of any offered stock option or stock appreciation rights granted
under the terms of the Plan, the Participant acknowledges that if the Participant were,
without authority, to use or disclose the Company’s or any of its subsidiaries’ trade
secrets or confidential information or threaten to do so, the Company or one of its
subsidiaries would be entitled to injunctive and other appropriate relief to prevent the
Participant from doing so. The Participant acknowledges that the harm caused to the
Company by the breach or anticipated breach of this Article is by its nature irreparable
because, among other things, it is not readily susceptible of proof as to the monetary
harm that would ensue. The Participant consents that any interim or final equitable
relief entered by a court of competent jurisdiction shall, at the request of the Company
or one of its subsidiaries, be entered on consent and enforced by any court having
jurisdiction over the Participant, without prejudice to any rights either party may have
to appeal from the proceedings which resulted in any grant of such relief.
	 
	 	(e)	 	If any of the provisions contained in this Article F shall for any reason, whether
by application of existing law or law which may develop after the Participant’s
acceptance of an offer of the granting of stock appreciation rights or stock options, be
determined by a court of competent jurisdiction to be overly broad as to scope of
activity, duration, or territory, the Participant agrees to join the Company or any of
its subsidiaries in requesting such court to construe such provision by limiting or
reducing it so as to be enforceable to the extent compatible with then applicable law.
If any one or more of the terms, provisions, covenants, or restrictions of this Article
shall be determined by a court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants, and restrictions
of this Article shall remain in full force and effect and shall in no way be affected,
impaired, or invalidated.

     2. The fact that a Participant has been granted a stock option or a stock appreciation right
under the Plan shall not limit the right of the employer to terminate the Participant’s employment
at any time.

          Because a main purpose of the Plan is to strengthen the alignment of interests between
employees of the Company (including all subsidiaries) and its shareholders to ensure the continued
success of the Company, the Committee is authorized to suspend or terminate any outstanding stock
option or stock appreciation right of a Participant if the Committee determines the Participant has
acted significantly contrary to the best interests of the Company or its subsidiaries. For
purposes of this paragraph, an action taken “significantly contrary to the best interests of the
Company or its subsidiaries” includes without limitation any action taken or threatened by the
Participant that the Committee determines has, or is reasonably likely to have, a significant
adverse impact on the reputation, goodwill, stability, operation, personnel retention and
management, or business of the Company or any subsidiary. This paragraph is in addition to any
remedy the Company or a subsidiary may have at law or in equity, including without limitation
injunctive and other appropriate relief.

     3. The maximum number of shares with respect to which stock options or stock appreciation
rights may be granted to any Participant in any calendar year shall not exceed 2,000,000 shares.

 

 

     4. The aggregate fair market value (determined at the time when the incentive stock option is
exercisable for the first time by a Participant during any calendar year) of the shares for which
any Participant may be granted incentive stock options under the Plan and all other stock option
plans of the Company and its subsidiaries in any calendar year shall not exceed $100,000 (or such
other amount as reflected in the limits imposed by Section 422(d) of the Internal Revenue Code of
1986, as it may be amended from time to time).

     5. If the Committee grants incentive stock options, all such stock options shall contain such
provisions as permit them to qualify as “incentive stock options” within the meaning of Section 422
of the Internal Revenue Code of 1986, as may be amended from time to time.

     6. With respect to stock options granted in tandem with stock appreciation rights, the
exercise of either such stock options or such stock appreciation rights will result in the
simultaneous cancellation of the same number of tandem stock appreciation rights or stock options,
as the case may be.

     7. The exercise price for all stock options and stock appreciation rights shall be established
by the Committee at the time of their grant and shall be not less than one hundred percent (100%)
of the fair market value of the Common Stock on the date of grant.

     8. Unless otherwise authorized by the shareholders of the Company, neither the Board nor the
Committee shall authorize the amendment of any outstanding stock option or stock appreciation right
to reduce the exercise price.

     9. No stock option or stock appreciation right shall be cancelled and replaced with awards
having a lower exercise price without the prior approval of the shareholders of the Company. This
Article F, Paragraph 9 is intended to prohibit the repricing of “underwater” stock options and
stock appreciation rights and shall not be construed to prohibit the adjustments permitted under
Article K of the Plan.

     10. The Committee may require any Participant to accept any stock options or stock
appreciation rights by means of electronic signature.

ARTICLE G — Exercise of Stock Options and Stock Appreciation Rights.

     1. All stock options and stock appreciation rights granted hereunder shall have a maximum life
of no more than ten (10) years from the date of grant.

     2. No stock options or stock appreciation rights shall be exercisable within one (1) year from
their date of grant, except in the case of the death of the Participant.

     3. Unless a transfer has been duly authorized by the Committee pursuant to Article G,
Paragraph 6 of the Plan, during the lifetime of the Participant, stock options and stock
appreciation rights may be exercised only by the Participant personally, or, in the event of the
legal incompetence of the Participant, by the Participant’s duly appointed legal guardian.

     4. In the event that a Participant ceases to be an employee of the Company or any of its
subsidiaries while holding an unexercised stock option or stock appreciation right:

	 	(a)	 	Any unexercisable portions thereof are then void, except in the case of: (1) death
of the Participant; (2) Retirement or Special Separation that occurs more than six months
from the date the options were granted; or (3) any option as to which the Committee has
waived, at the time of grant, the provisions of this Article G, Paragraph 4(a).

 

 

	 	(b)	 	Any exercisable portions thereof are then void, except in the case of: (1) death
of the Participant; (2) Retirement or Special Separation; or (3) any option as to which
the Committee has waived, at the time of grant, the provisions of this Article G,
Paragraph 4(b).
	 
	 	(c)	 	In the case of a Special Separation which occurs prior to October 2, 2007, any
stock option or stock appreciation right must be exercised within the time specified in
the original grant or five (5) years from the date of Special Separation, whichever is
shorter. For a Special Separation which occurs on or after October 2, 2007, any stock
option or stock appreciation right must be exercised within the time specified in the
original grant.

     5. In the case of the death of a Participant, the persons to whom the stock options or stock
appreciation rights have been transferred by will or the laws of descent and distribution shall
have the privilege of exercising remaining stock options, stock appreciation rights or parts
thereof, whether or not exercisable on the date of death of such Participant, at any time prior to
the expiration date of the stock options or stock appreciation rights.

     6. Stock options and stock appreciation rights are not transferable other than by will or by
the laws of descent and distribution. For the purpose of exercising stock options or stock
appreciation rights after the death of the Participant, the duly appointed executors and
administrators of the estate of the deceased Participant shall have the same rights with respect to
the stock options and stock appreciation rights as legatees or distributees would have after
distribution to them from the Participant’s estate. Notwithstanding the foregoing, the Committee
may authorize the transfer of stock options and stock appreciation rights upon such terms and
conditions as the Committee may require. Such transfer shall become effective only upon the
Committee’s complete satisfaction that the proposed transferee has strictly complied with such
terms and conditions, and both the original Participant and the transferee shall be subject to the
same terms and conditions hereunder as the original Participant.

     7. Upon the exercise of stock appreciation rights, the Participant shall be entitled to
receive a redemption differential for each such stock appreciation right which shall be the
difference between the then fair market value of one share of Common Stock and the exercise price
of one stock appreciation right then being exercised. In the case of the redemption of stock
appreciation rights by a subsidiary of the Company not located in the United States, the redemption
differential shall be calculated in United States dollars and converted to the appropriate local
currency on the exercise date. As determined by the Committee, the redemption differential may be
paid in cash, Common Stock to be valued at its fair market value on the date of exercise, any other
mode of payment deemed appropriate by the Committee or any combination thereof.

     8. Time spent on leave of absence shall be considered as employment for the purposes of the
Plan. Leave of absence means any period of time away from work granted to any employee by his or
her employer because of illness, injury, or other reasons satisfactory to the employer.

     9. The Company reserves the right from time to time to suspend the exercise of any stock
option or stock appreciation right where such suspension is deemed by the Company as necessary or
appropriate for corporate purposes. No such suspension shall extend the life of the stock option
or stock appreciation right beyond its expiration date, and in no event will there be a suspension
in the five (5) calendar days immediately preceding the expiration date.

     10. The Committee may require any Participant to exercise any stock options or stock
appreciation rights by means of electronic signature.

ARTICLE H — Payment for Stock Options and Tax Withholding.

 

 

     Upon the exercise of a stock option, payment in full of the exercise price shall be made by
the Participant. As determined by the Committee, the stock option exercise price may be paid by
the Participant either in cash, shares of Common Stock valued at their fair market value on the
date of exercise, a combination thereof, or such other method as determined by the Committee. In
addition to payment of the exercise price, the Committee may authorize the Company to charge a
reasonable administrative fee for the exercise of any stock option. Furthermore, to the extent the
Company is required to withhold federal, state, local or foreign taxes in connection with any
Participant’s stock option exercise, the Committee may require the Participant to make such
arrangements as the Company may deem necessary for the payment of such taxes required to be
withheld (including, without limitation, relinquishment of a portion of such stock options or
relinquishment of a portion of the proceeds received by the Participant in a simultaneous exercise
and sale of stock during a “cashless” exercise). In no event, however, shall the Committee be
permitted to require payment from a Participant in excess of the maximum required tax withholding
rates.

ARTICLE I — Grant of Unrestricted Stock, Restricted Stock or RSUs.

     The Committee may grant Common Stock or RSUs to Participants under the Plan subject to such
conditions or restrictions, if any, as the Committee may determine. To the extent the Company is
required to withhold federal, state, local or foreign taxes in connection with the lapse of
restrictions on any Participant’s shares of Common Stock, the Committee may require the Participant
to make such arrangements as the Company may deem necessary for the payment of such taxes required
to be withheld (including, without limitation, relinquishment of a portion of such shares of Common
Stock). In no event, however, shall the Committee be permitted to require payment from a
Participant in excess of the maximum required tax withholding rates.

ARTICLE J — Performance Related Awards.

     1. The Committee, in its discretion, may establish performance goals for selected Participants
and authorize the granting of cash, stock options, stock appreciation rights, Common Stock, RSUs or
other awards that are related to the price of Common Stock, other property, or any combination
thereof (“Performance Awards”) to such Participants upon achievement of such established
performance goals during a specified time period (the “Performance Period”). The Committee, in its
discretion, shall determine the Participants eligible for Performance Awards, the performance goals
to be achieved during each Performance Period, the amount of any Performance Awards to be paid, and
the method of payment for any Performance Awards. Performance Awards may be granted either alone
or in addition to other grants made under the Plan.

     2. Notwithstanding the foregoing, any Performance Awards granted under Article J, Paragraph 1
to any Participant subject to the restrictions set forth in Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”) shall comply with all of the following requirements:

     (a) Each grant shall specify the specific performance objectives (the “Performance
Objectives”) which, if achieved, will result in payment or early payment of the Performance Award.
The Performance Objectives may be described in terms of Company-wide objectives that are related to
the individual Participant or objectives that are related to a subsidiary, division, department,
region, function or business unit of the Company in which the Participant is employed, and may
consist of one or more or any combination of the following criteria: stock price, market share,
sales revenue, cash flow, earnings per share, return on equity, total shareholder return, gross
margin, stock price growth measures, operating total shareholder return, net earnings or net income
(before or after taxes), return on assets or capital, earnings (before or after interest, taxes,
depreciation and/or amortization), operating margin, acquisition integration metrics, economic
value added, and/or costs. The Performance Objectives may be made relative to the performance of
other corporations. The Committee, in its discretion, may change or

 

 

modify these criteria, however, at all times the criterion must be valid performance criterion for
purposes of Section 162(m) of the Code. The Committee may not change the criteria or Performance
Objectives for any Performance Period that has already been approved by the Committee. The
Committee may cancel a Performance Period or replace a Performance Period with a new Performance
Period, provided that any such cancellation or replacement shall not cause the Performance Award to
fail to meet the requirements of Section 162(m) of the Code.

     (b) Each grant shall specify the minimum level of achievement required by the Participant
relative to the Performance Objectives to qualify for a Performance Award. In doing so, the grant
shall establish a formula for determining the percentage of the Performance Award to be awarded if
performance is at or above the minimum level, but falls short of full achievement of the specified
Performance Objectives. Each grant may also establish a formula for determining an additional
award above and beyond the Performance Award to be granted to the Participant if performance is at
or above the specified Performance Objectives. Such additional award shall also be established as
a percentage of the Performance Award. The Committee may decrease a Performance Award as
determined by the Performance Objectives, but in no case may the Committee increase any Performance
Award as determined by the Performance Objectives.

     (c) The maximum Performance Award that may be granted to any Participant for any one-year
Performance Period shall not exceed $20,000,000 or 800,000 shares of Common Stock (the “Annual
Maximum”). The maximum Performance Award that may be granted to any Participant for a Performance
Period greater than one year shall not exceed the Annual Maximum multiplied by the number of full
years in the Performance Period.

ARTICLE K — Adjustments.

     In the event of any future reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, rights offering, share exchange, reclassification,
distribution, spin-off or other change affecting the corporate structure, capitalization or Common
Stock of the Company occuring after the date of approval of the Plan by the Company’s shareholders,
(i) the amount of shares authorized to be issued under the Plan and (ii) the number of shares
and/or the exercise prices covered by outstanding stock options, stock appreciation rights or RSUs
shall be adjusted appropriately and equitably to prevent dilution or enlargement of rights under
the Plan. Following any such change, the term “Common Stock” shall be deemed to refer to such
class of shares or other securities as may be applicable.

ARTICLE L — Additional Provisions and Definitions.

     1. The Board may, at any time, repeal the Plan or may amend it except that no such amendment
may amend this paragraph, increase the total aggregate number of shares subject to the Plan, reduce
the price at which stock options or stock appreciation rights may be granted or exercised, alter
the class of employees eligible to receive stock options, or increase the percentage of shares
authorized to be transferred as restricted or unrestricted stock. Participants and the Company
shall be bound by any such amendments as of their effective dates, but if any outstanding stock
options or stock appreciation rights are materially affected adversely, notice thereof shall be
given to the Participants holding such stock options and stock appreciation rights and such
amendments shall not be applicable without such Participant’s written consent. If the Plan is
repealed in its entirety, all theretofore granted unexercised stock options or stock appreciation
rights shall continue to be exercisable in accordance with their terms and shares subject to
conditions or restrictions granted pursuant to the Plan shall continue to be subject to such
conditions or restrictions.

     2. In the case of a Participant who is an employee of a subsidiary of the Company, performance
under the Plan, including the granting of shares of the Company, may be by the subsidiary. Nothing
in

 

 

the Plan shall affect the right of the Company or any subsidiary to terminate the employment of any
employee with or without cause. None of the Participants, either individually or as a group, and
no beneficiary, transferee or other person claiming under or through any Participant, shall have
any right, title, or interest in any shares of the Company purchased or reserved for the purpose of
the Plan except as to such shares, if any, as shall have been granted or transferred to him or her.
Nothing in the Plan shall preclude the awarding or granting of shares of the Company to employees
under any other plan or arrangement now or hereafter in effect.

     3. “Subsidiary” means any company in which more than fifty percent (50%) of the total combined
voting power of all classes of stock is owned, directly or indirectly, by the Company or, if the
company does not issue stock, more than fifty percent (50%) of the total combined ownership
interest is owned, directly or indirectly, by the Company. In addition, the Board may designate
for participation in the Plan as a “subsidiary,” except for the granting of incentive stock
options, those additional companies affiliated with the Company in which the Company’s direct or
indirect stock ownership is fifty percent (50%) or less of the total combined voting power of all
classes of such company’s stock, or, if the company does not issue stock, the Company’s direct or
indirect ownership is fifty percent (50%) or less of the company’s total combined ownership
interest.

     4. Notwithstanding anything to the contrary in the Plan, stock options and stock appreciation
rights granted hereunder shall vest immediately and any conditions or restrictions on Common Stock
shall lapse upon a “Change in Control.” A “Change in Control” shall mean the occurrence of any of
the following:

	 	(a)	 	An acquisition (other than directly from the Company) of any voting securities of
the Company (the “Voting Securities”) by any “Person” (as the term person is used for
purposes of Section 13(d) or 14(d) of the Exchange Act), immediately after which such
Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of the then outstanding shares or the
combined voting power of the Company’s then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has occurred pursuant to this
Paragraph 4(a), shares or Voting Securities which are acquired in a “Non-Control
Acquisition” (as hereinafter defined) shall not constitute an acquisition which would
cause a Change in Control. A “Non-Control Acquisition” shall mean an acquisition by (i)
an employee benefit plan (or a trust forming a part thereof) maintained by (A) the
Company or (B) any corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or indirectly, by the
Company (for purposes of this definition, a “Related Entity”), (ii) the Company or any
Related Entity, or (iii) any Person in connection with a “Non-Control Transaction” (as
hereinafter defined);
	 
	 	(b)	 	The individuals who, as of July 10, 2001 are members of the Board (the “Incumbent
Board”), cease for any reason to constitute at least half of the members of the Board;
or, following a Merger (as hereinafter defined) which results in a Parent Corporation (as
hereinafter defined), the board of directors of the ultimate Parent Corporation;
provided, however, that if the election, or nomination for election by the Company’s
common stockholders, of any new director was approved by a vote of at least two-thirds of
the Incumbent Board, such new director shall, for purposes of the Plan, be considered as
a member of the Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed office as
a result of either an actual or threatened “Election Contest” (as described in Rule
14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board (a “Proxy Contest”)
including by reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or

 

 

	 	(c)	 	The consummation of:

	 	(i)	 	A merger, consolidation or reorganization with or into the Company or
in which securities of the Company are issued (a “Merger”), unless such Merger is a
“Non-Control Transaction.” A “Non-Control Transaction” shall mean a Merger where:

	 	(A)	 	the stockholders of the Company, immediately before such
Merger own directly or indirectly immediately following such Merger at least
fifty percent (50%) of the combined voting power of the outstanding voting
securities of (x) the corporation resulting from such Merger (the “Surviving
Corporation”) if fifty percent (50%) or more of the combined voting power of
the then outstanding voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by another Person (a “Parent
Corporation”), or (y) if there is one or more Parent Corporations, the
ultimate Parent Corporation;
	 
	 	(B)	 	the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such Merger
constitute at least half of the members of the board of directors of (x) the
Surviving Corporation, if there is no Parent Corporation, or (y) if there is
one or more Parent Corporations, the ultimate Parent Corporation; and
	 
	 	(C)	 	no Person other than (1) the Company, (2) any Related
Entity, (3) any employee benefit plan (or any trust forming a part thereof)
that, immediately prior to such Merger was maintained by the Company or any
Related Entity, or (4) any Person who, immediately prior to such merger,
consolidation or reorganization had Beneficial Ownership of twenty percent
(20%) or more of the then outstanding Voting Securities or shares, has
Beneficial Ownership of twenty percent (20%) or more of the combined voting
power of the outstanding voting securities or common stock of (x) the
Surviving Corporation if there is no Parent Corporation, or (y) if there is
one or more Parent Corporations, the ultimate Parent Corporation;

	 	(ii)	 	A complete liquidation or dissolution of the Company; or
	 
	 	(iii)	 	The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a Related Entity or
under conditions that would constitute a Non-Control Transaction with the
disposition of assets being regarded as a Merger for this purpose or the
distribution to the Company’s stockholders of the stock of a Related Entity or any
other assets).

          Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount
of the then outstanding shares or Voting Securities as a result of the acquisition of shares or
Voting Securities by the Company which, by reducing the number of shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons,
provided that if a Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of shares or Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional
shares or Voting Securities which increases the percentage of the then outstanding shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur.

 

 

     5. The term “Special Separation” shall mean any termination of employment that occurs prior to
the time a Participant is eligible to retire, except a termination for cause or a voluntary
resignation that is not initiated or encouraged by the Company.

     6. The term “Retirement” shall mean: (a) retirement in accordance with the provisions of any
appropriate retirement plan of the Company or any of its subsidiaries; or (b) termination of
employment under the permanent disability provision of any retirement plan of the Company or any of
its subsidiaries.

ARTICLE M — Consent.

     Every Participant who receives a stock option, stock appreciation right, RSU, or grant of
shares pursuant to the Plan shall be bound by the terms and provisions of the Plan and of the stock
option, stock appreciation right, RSU, or grant of shares agreement referable thereto, and the
acceptance of any stock option, stock appreciation right, RSU, or grant of shares pursuant to the
Plan shall constitute a binding agreement between the Participant and the Company and its
subsidiaries and any successors in interest to any of them. Every Person who receives a stock
option, stock appreciation right, RSU, or grant of shares from a Participant pursuant to the Plan
shall, in addition to such terms and conditions as the Committee may require upon such grant, be
bound by the terms and provisions of the Plan and of the stock option, stock appreciation right,
RSU, or grant of shares agreement referable thereto, and the acceptance of any stock option, stock
appreciation right, RSU, or grant of shares by such Person shall constitute a binding agreement
between such Person and the Company and its subsidiaries and any successors in interest to any of
them. The Plan shall be governed by and construed in accordance with the laws of the State of
Ohio, United States of America.

ARTICLE N — Purchase of Shares or Stock Options.

     The Committee may authorize any Participant to convert cash compensation otherwise payable to
such Participant into stock options or shares of Common Stock under the Plan upon such terms and
conditions as the Committee, in its discretion, shall determine. Notwithstanding the foregoing, in
any such conversion the shares of Common Stock shall be valued at no less than one hundred percent
(100%) of their fair market value.

ARTICLE O — Duration of Plan.

     The Plan will terminate on July 10, 2011 unless a different termination date is fixed by the
shareholders or by action of the Board of Directors, but no such termination shall affect the prior
rights under the Plan of the Company (or any subsidiary) or of anyone to whom stock options or
stock appreciation rights were granted prior thereto or to whom shares or RSUs have been
transferred prior to such termination.

 

 

ADDITIONAL INFORMATION

	1.	 	Shares Awarded as a Portion of Remuneration

     Any shares of Common Stock of the Company awarded as a portion of a participant’s remuneration
shall be valued at not less than one hundred percent (100%) of the fair market value of the
Company’s Common Stock on the date of the award. These shares may be subject to such conditions or
restrictions as the Committee may determine, including a requirement that the participant remain in
the employ of the Company or one of its subsidiaries for a set period of time, or until retirement.
Failure to abide by any applicable restriction will result in forfeiture of the shares.

	2.	 	U.S. Tax Effects

     Incentive Stock Options

     With regard to tax effects which may accrue to the optionee, counsel advises that if
the optionee has continuously been an employee from the time an option has been granted
until at least three months before it is exercised, under existing law no taxable income
results to the optionee from the exercise of an incentive stock option at the time of
exercise. However, the spread at exercise is an “adjustment” item for alternative minimum
tax purposes.

     Any gain realized on the sale or other disposition of stock acquired on exercise of an
incentive stock option is considered as long-term capital gain for tax purposes if the stock
has been held more than two years after the date the option was granted and more than one
year after the date of exercise of the option. If the stock is disposed of within one year
after exercise, the lesser of any gain on such disposition or the spread at exercise (i.e.,
the excess of the fair market value of the stock on the date of exercise over the option
price) is treated as ordinary income, and any appreciation after the date of exercise is
considered long-term or short-term capital gain to the optionee depending on the holding
period prior to sale. However, the spread at exercise (even if greater than the gain on the
disposition) is treated as ordinary income if the disposition is one on which a loss, if
sustained, is not recognized—e.g., a gift, a “wash” sale or a sale to a related party. The
amount of ordinary income recognized by the optionee is treated as a tax deductible expense
to the Company. No other amount relative to an incentive stock option is a tax deductible
expense to the Company.

     Nonstatutory Stock Options

     With regard to tax effects which may accrue to the optionee, counsel advises that under
existing tax law gain taxable as ordinary income to the optionee is deemed to be realized at
the date of exercise of the option, the gain on each share being the difference between the
market price on the date of exercise and the option price. This amount is treated as a tax
deductible expense to the Company at the time of the exercise of the option. Any
appreciation in the value of the stock after the date of exercise is considered a long-term
or short-term capital gain to the optionee depending on whether or not the stock was held
for the appropriate holding period prior to sale.

     Stock Appreciation Rights

     With regard to tax effects which may accrue to the recipient, counsel advises that
“United States persons,” as defined in the Internal Revenue Code of 1986 (the “I.R.C.”),
must recognize ordinary income as of the date of exercise equal to the amount paid to the
recipient, i.e., the difference between the grant price and the value of the shares on the
date of exercise.

 

 

     Shares Awarded as a Portion of Remuneration

     With regard to tax effects which may accrue to the recipient, counsel advises that
“United States persons” as defined in the Internal Revenue Code of 1986 (the “I.R.C.”), must
recognize ordinary income in the first taxable year in which the recipient’s rights to the
stock are transferable or are not subject to a substantial risk of forfeiture, whichever is
applicable. Recipients who are “United States persons” may also elect to include the income
in their tax returns for the taxable year in which they receive the shares by filing an
election to do so with the appropriate office of the Internal Revenue Service within 30 days
of the date the shares are transferred to them.

     The amount includable in income is the fair market value of the shares as of the day
the shares are transferable or not subject to a substantial risk of forfeiture, whichever is
applicable; if the recipient has elected to include the income in the year in which the
shares are received, the amount of income includable is the fair market value of the shares
at the time of transfer.

     For non-United States persons, the time when income is realized, its measurement and
its taxation, will depend on the laws of the particular countries in which the recipients
are residents and/or citizens at the time of transfer or when the shares are first
transferable and not subject to a substantial risk of forfeiture, as the case may be.
“United States persons” who receive shares awarded as a portion of remuneration may also
have tax consequences with respect to the receipt of shares or the expiration of
restrictions or substantial risk of forfeiture on such shares under the laws of the
particular country other than the United States of which such person is a resident or
citizen.

     Notwithstanding the above advice received by the Company, it is each individual recipient’s
responsibility to check with his or her personal tax adviser as to the tax effects and proper
handling of stock options, stock appreciation rights, restricted stock units and Common Stock
acquired. The above advice relates specifically to the U.S. consequences of stock options, stock
appreciation rights and Common Stock acquired, including the U.S. consequences to “United States
persons” whether or not resident in the U.S. In addition to U.S. tax consequences, for all persons
who are not U.S. residents, the time when income, if any, is realized, the measurement of such
income and its taxation will also depend on the laws of the particular country other than the U.S.
of which such persons are resident and/or citizens at the time of grant or the time of exercise, as
the case may be.

     The Plan is not subject to the qualification requirements of Section 401(a) of the I.R.C.

	3.	 	Employee Retirement Income Security Act of 1974

     The Plan is not subject to the provisions of the Employee Retirement Income Security Act of
1974 (“ERISA”), as amended.

	4.	 	Incorporation of Certain Documents by Reference

     The following documents filed by the Company with the Securities and Exchange Commission (File
No. 1-434) pursuant to the 1934 Act are incorporated into this document by reference:

	 	1.	 	The Company’s Annual Report on Form 10-K for the most recent fiscal year ended
June 30;
	 
	 	2.	 	The Company’s Quarterly Report on Form 10-Q for the most recent quarter(s); and
	 
	 	3.	 	All other documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the 1934 Act after the date of this Prospectus and prior to the filing of a
post-effective

 

 

	 	 	 	amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold.

     The Company will provide without charge to each participant in the Plan, upon oral or written
request, a copy of any or all of these documents other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such documents. In addition, the Company
will provide without charge to such participants a copy of the Company’s most recent annual report
to shareholders, proxy statement, and other communications distributed generally to security
holders of the Company. Requests for such copies should be directed to Mr. Jay A. Ernst, Manager,
Shareholder Services, The Procter & Gamble Company, P.O. Box 5572, Cincinnati, Ohio 45201, (513)
983-3413.

	5.	 	Additional Information

     Additional information about the Plan and its administrators may be obtained from Mr. E.J.
Wunsch, Assistant Secretary, The Procter & Gamble Company, One Procter & Gamble Plaza, Cincinnati,
Ohio 45202, (513) 983-4370.

 

 

Appendix 1

 

[GRANT_DATE]                    [GLOBALID]

[FIRST_NAME] [MIDDLE_NAME] [LAST_NAME]]

Subject: NON-STATUTORY STOCK OPTION SERIES 08-AA

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

	 	 	 
	Grant Value:

	 	$[DELIVERED_GRANT_VALUE]
	Option Price per Share:

	 	$[STOCK_PRCE]
	Number of Shares:

	 	[SHARES]
	Date of Grant:

	 	[GRANT_DATE]
	Expiration of Option:

	 	[EXPIRATION_DATE]
	Option Vest Date:

	 	100% after [VEST_DATE]
	Acceptance Deadline:

	 	[ACCEPTANCE_DATE]

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

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

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

 

 

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

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

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

THE PROCTER & GAMBLE COMPANY

James J. Johnson

Secretary for the Compensation and Leadership

Development Committee

ATTACHMENTS

To Accept Your Stock Option

Read and check each of the boxes below:

	o    	I have read, understand and 
agree to be bound by each of: 	 	the terms of this letter; The Procter & Gamble 2001
Stock and Incentive Compensation Plan; and the
Employee Acknowledgement and Consent Form
(below).

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

To Reject Your Stock Option

Read and check the box below:

 

 

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

Employee Acknowledgement and Consent Form

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

Data Privacy

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

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

Nature of Grant

By completing this form and accepting the grant of the stock options or RSUs evidenced hereby, I
acknowledge that: i) the Plans are established voluntarily by The Procter & Gamble Company, it is
discretionary in nature and it may be amended, suspended or terminated at any time; ii) the grant
of options or RSUs under the Plans is voluntary and occasional and does not create any contractual
or other right to receive future grants of options or RSUs, or benefits in lieu of options or RSUs,
even if options or RSUs have been granted repeatedly in the past; iii) all decisions with respect
to future grants of options or RSUs, if any, will be at the sole discretion of P&G; iv) my
participation in the Plans is voluntary; v) the option or RSU is an extraordinary item and not part
of normal or expected compensation or salary for any purposes including, but not limited to,
calculating any termination, severance, resignation, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments; vi) in the event that my
employer is not P&G, the grant of options or RSUs will not be interpreted to form an employment
relationship with P&G; and furthermore, the grant of options or RSUs will not be interpreted to
form an employment contract with my Employer; vii) the future value of the shares purchased under
the Plans is unknown and cannot be predicted with certainty, may increase or decrease in value,
even below the exercise price and, if the underlying shares do not increase in value, the
option will have no value; iix) my participation in the Plans shall not create a right to further
employment with my

 

 

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

Responsibility for Taxes

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

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

 

 

			
	Appendix 2
	 	Form RTD

[INSERT DATE]

[INSERT NAME]

Subject:     Award of Restricted Stock Units

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

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]

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

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

	 	 	 	 	 
	 	THE PROCTER & GAMBLE COMPANY

James J. Johnson, Secretary

For the Compensation Committee

 	 

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

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

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	Date

	 	Signature
	 	P&G E-mail Address

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

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

1. Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

2. Transfer and Restrictions.

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

 

 

immediate forfeiture to the Company, and cancellation, of the Restricted Stock Unit
(including all rights to Dividend Equivalents).

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

(c) At any time at least one calendar year prior to the Original Settlement Date, you and the
Company may agree to postpone the date on which you are entitled to receive one share of
Common Stock for each Restricted Stock Unit you hold, according to the deferral terms in
place at the time, and provided the new date (the “Agreed Settlement Date”) is at least five
years from the Original Settlement Date. During the Post-Forfeiture Period, if you leave
your employment with Procter & Gamble for any reason other than: (i) Disability; (ii)
Special Separation; or (iii) retirement in accordance with the provisions of any appropriate
retirement plan of Procter & Gamble, your Original Settlement Date or Agreed Settlement Date,
as applicable, will automatically and immediately become, without any further action by you
or the Company, the date of your termination of employment. In the event of your Disability
or Special Separation during the Post-Forfeiture period, unless otherwise agreed to in
writing by the Company, your Original Settlement Date or Agreed Settlement Date, as
applicable, will automatically and immediately become, without any further action by you or
the Company, the date of your Disability or Special Separation, as applicable. In the event
of your retirement in accordance with the provisions of any appropriate retirement plan of
Procter & Gamble during the Post-Forfeiture Period, you will retain your Restricted Stock
Units subject to the Plan and these Terms and Conditions.

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

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

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

 

 

3. Confidentiality and Non-Competition

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

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

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

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

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

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

 

 

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

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

4. Dividend Equivalents.

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

5. Voting and Other Shareholder Rights.

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

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

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

7. Tax Withholding.

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

 

 

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

8. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

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

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

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

 

 

10. Data Privacy.

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

11. Notices.

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

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

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

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

12. Successors and Assigns.

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

 

 

13. Governing Law.

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

14. The Plan.

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

15. Effect of These Terms and Conditions.

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

 

 

					
	 	 	 	 	 
	Appendix 3
	 	 	 	Form RTD-A                    

                    [INSERT DATE]

[INSERT NAME]

	Subject: Award of Restricted Stock Units

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

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]

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

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

	 	 	 	 	 
	 	THE PROCTER & GAMBLE COMPANY

 	 
	 	
 	 
	 	James J. Johnson, Secretary 	 
	 	For the Compensation Committee 	 
	 

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

					
	 	 	 	 	 
	 	 	 	 	 
	 

Date
	 	 

Signature
	 	 

P&G E-mail Address

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

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

1. Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

2. Transfer and Restrictions.

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

 

 

immediate forfeiture to the Company, and cancellation, of the Restricted Stock Unit
(including all rights to Dividend Equivalents).

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

(c) At any time at least one calendar year prior to the Original Settlement Date, you and
the Company may agree to postpone the date on which you are entitled to receive one share
of Common Stock for each Restricted Stock Unit you hold, according to the deferral terms in
place at the time, and provided the new date (the “Agreed Settlement Date”) is at least
five years from the Original Settlement Date. During the Post-Forfeiture Period, if you
leave your employment with Procter & Gamble for any reason other than: (i) Disability;
(ii) Special Separation; or (iii) retirement in accordance with the provisions of any
appropriate retirement plan of Procter & Gamble, your Original Settlement Date or Agreed
Settlement Date, as applicable, will automatically and immediately become, without any
further action by you or the Company, the date of your termination of employment. In the
event of your Disability or Special Separation during the Post-Forfeiture period, unless
otherwise agreed to in writing by the Company, your Original Settlement Date or Agreed
Settlement Date, as applicable, will automatically and immediately become, without any
further action by you or the Company, the date of your Disability or Special Separation, as
applicable. In the event of your retirement in accordance with the provisions of
any appropriate retirement plan of Procter & Gamble during the Post-Forfeiture Period, you
will retain your Restricted Stock Units subject to the Plan and these Terms and Conditions.

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

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

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

 

 

3. Confidentiality and Non-Competition

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

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

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

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

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

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

 

 

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

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

4. Dividend Equivalents.

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

5. Voting and Other Shareholder Rights.

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

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

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

7. Tax Withholding.

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

 

 

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

8. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

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

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

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

 

 

10. Data Privacy.

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

11. Notices.

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

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	The Procter & Gamble Company
	 	 
	 

	 	ATTN: Corporate Secretary’s Office	 	 
	 

	 	P.O. Box 599	 	 
	 

	 	Cincinnati, OH 45201	 	 

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

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

12. Successors and Assigns.

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

 

 

13. Governing Law.

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

14. The Plan.

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

15. Effect of These Terms and Conditions.

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

 

 

	 	 	 	 	 
	Appendix 4
	 	 	 	Form RTN   
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	[INSERT DATE]	 	 

[INSERT NAME]

Subject:   Award of Restricted Stock Units

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

	 	 	 	 	 
	 
	 	Grant Date:	 	[INSERT DATE OF GRANT]
	 
	 	Forfeiture Date:	 	[INSERT DATE FORFEITURE ENDS]
	 
	 	Original Settlement Date:	 	[INSERT DATE RSUs BECOME SHARES]
	 
	 	Number of Restricted Stock Units:	 	[INSERT NUMBER GRANTED]

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

	 	 	 	 	 
	 
	 	 	 	THE PROCTER & GAMBLE COMPANY
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	James J. Johnson, Secretary
	 
	 	 	 	For the Compensation Committee

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

	 	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Date
	 	Signature	 	P&G E-mail Address

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

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

1. Definitions.

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

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

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

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

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

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

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

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

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

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

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

2. Transfer and Restrictions.

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

 

 

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

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

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

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

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

3. Confidentiality and Non-Competition

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

 

 

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

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

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

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

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

(d) If any of the provisions contained in Sections 3(a) through (c) are for any reason,
whether by application of existing law or law which may develop after your acceptance of an
award of Restricted Stock Units, determined by a court of competent jurisdiction to be
overly broad as to scope of activity, duration, or territory, then by accepting an award of
Restricted Stock Units you agree to join Procter & Gamble in requesting such court to
construe such provision by limiting or reducing it so as to be enforceable to the extent
compatible with then-applicable law. If any one or more of the provisions contained in

 

 

Section 3(a) through (c) are determined by a court of competent jurisdiction to be invalid,
void or unenforceable, then the remainder of the provisions will remain in full force and
effect and will not be affected, impaired or invalidated in any way.

4. Dividend Equivalents.

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

5. Voting and Other Shareholder Rights.

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

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

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

7. Tax Withholding.

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

8. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

 

 

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

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

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

10. Data Privacy.

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

 

 

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

11. Notices.

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

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

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

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

12. Successors and Assigns.

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

13. Governing Law.

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

14. The Plan.

     All Restricted Stock Units awarded to you have been awarded under the Plan. Certain
provisions of the Plan may have been repeated or emphasized in these Terms and Conditions;

 

 

however, all terms of the Plan apply to you and your Restricted Stock Units whether or not they
have been called out in these Terms and Conditions.

15. Effect of These Terms and Conditions.

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

 

 

			
	Appendix 5
	 	Form RTN2

[INSERT DATE]

[INSERT NAME]

Subject: Award of Restricted Stock Units

This is to advise you that The Procter & Gamble Company, an Ohio corporation, is awarding you with
Restricted Stock Units, on the dates and in the amounts listed below, pursuant to The Procter &
Gamble 2001 Stock and Incentive Compensation Plan, and subject to the attached Statement of Terms
and Conditions Form RTN2.

	 	 	 
	Grant Date:

	 	[INSERT DATE OF GRANT]
	Forfeiture Date:

	 	[INSERT DATE FORFEITURE ENDS]
	Original Settlement Date:

	 	[INSERT DATE RSUs BECOME SHARES]
	Number of Restricted Stock Units:

	 	[INSERT NUMBER GRANTED]

Paragraph 3(a) of Statement of Terms and Conditions Form RTN2 [is/is not] waived.

THE PROCTER & GAMBLE COMPANY

James J. Johnson, Secretary

For the Compensation Committee

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

					
	 	 	 	 	 
	 	 	 	 	 
	 

Date
	 	 

 Signature
	 	 

P&G E-mail Address

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

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

1. Definitions.

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

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

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

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

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

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

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

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

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

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

2. Transfer and Restrictions.

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

(b) During the Forfeiture Period, your Restricted Stock Units will be forfeited and
cancelled if you leave your employment with Procter & Gamble for any reason, except due to:
(i) your Disability; or (ii) in certain circumstances, your Special Separation. In

 

 

the event of your Disability during the Forfeiture Period, unless otherwise agreed to in
writing by the Company, your Original Settlement Date will automatically and immediately
become, without any further action by you or the Company, the date of your Disability. In
the event of your Special Separation during the Forfeiture Period, your Restricted Stock
Units will be forfeited and cancelled unless otherwise agreed to in writing by the Company.

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

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

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

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

3. Confidentiality and Non-Competition

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

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

(ii) with respect to which, during the two (2) years preceding the termination of
your employment with Procter & Gamble, you, as a consequence of your job

 

 

performance and duties, acquired knowledge of trade secrets or other confidential
information of Procter & Gamble.

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

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

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

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

 

 

4. Voting and Other Shareholder Rights.

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

5. Adjustments in Case of Stock Splits, Etc.

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

6. Tax Withholding.

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

7. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

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

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

(b) By accepting a Restricted Stock Unit, you acknowledge that: (i) the Plan is established
voluntarily by The Procter & Gamble Company, is discretionary in nature,

 

 

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

9. Data Privacy.

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

10. Notices.

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

 

 

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

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

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

11. Successors and Assigns.

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

12. Governing Law.

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

13. The Plan.

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

14. Effect of These Terms and Conditions.

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

 

 

	 	 	 	 	 
	Appendix 6

	 	 
	 	Form OPN
	 
	 	 	 	 
	 

	 	[INSERT DATE]
	 	 

[INSERT NAME]

Subject: Award of Restricted Stock Units

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

	 	 	 	 
	 	Grant Date:

	 	[INSERT DATE OF GRANT]
	 	Original Settlement Date:

	 	[INSERT DATE RSUs BECOME SHARES]
	 	Number of Restricted Stock Units:

	 	[INSERT NUMBER GRANTED]

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

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

	 	 	 	 	 
	 	THE PROCTER & GAMBLE COMPANY

James J. Johnson, Secretary

For the Compensation Committee

 	 

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

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	Date

	 	Signature
	 	P&G E-mail Address
	 	 

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

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

	1.	 	Definitions.

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

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

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

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

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

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

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

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

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

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

	2.	 	Transfer and Restrictions.

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

(b) At any time at least one calendar year prior to the Original Settlement Date, you and
the Company may agree to postpone the date on which you are entitled to receive

 

 

one share of Common Stock for each Restricted Stock Unit you hold, according to the deferral
terms in place at the time, and provided the new date (the “Agreed Settlement Date”) is at
least five years from the Original Settlement Date. During the Settlement Period, if you
leave your employment with Procter & Gamble for any reason other than: (i) Disability; (ii)
Special Separation; or (iii) retirement in accordance with the provisions of any appropriate
retirement plan of Procter & Gamble, your Original Settlement Date or Agreed Settlement
Date, as applicable, will automatically and immediately become, without any further action
by you or the Company, the date of your termination of employment. In the event of your
Disability or Special Separation during the Settlement Period, unless otherwise agreed to in
writing by the Company, your Original Settlement Date or Agreed Settlement Date, as
applicable, will automatically and immediately become, without any further action by you or
the Company, the date of your Disability or Special Separation, as applicable. In the event
of your retirement in accordance with the provisions of any appropriate retirement plan of
Procter & Gamble during the Settlement Period, you will retain your Restricted Stock Units
subject to the Plan and these Terms and Conditions.

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

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

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

	3.	 	Confidentiality and Non-Competition

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

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

(ii) with respect to which, during the two (2) years preceding the termination of
your employment with Procter & Gamble, you, as a consequence of your job

 

 

performance and duties, acquired knowledge of trade secrets or other confidential
information of Procter & Gamble.

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

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

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

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

 

 

4. Dividend Equivalents.

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

5. Voting and Other Shareholder Rights.

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

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

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

7. Tax Withholding.

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

8. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

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

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

 

 

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

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

10. Data Privacy.

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

 

 

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

11. Notices.

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

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

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

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

12. Successors and Assigns.

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

13. Governing Law.

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

14. The Plan.

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

 

 

15. Effect of These Terms and Conditions.

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

 

 

					
	Appendix 7
	 	 	 	Form KM

[INSERT DATE]

[INSERT NAME]

	 	 	 
	Subject:

	 	Award of Restricted Stock Units

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

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]
	 
	 	 	 	 
	 

	 	 	 	THE PROCTER & GAMBLE COMPANY
	 
	 	 	 	 
	 

	 	 	 	James J. Johnson, Secretary
	 

	 	 	 	For the Compensation Committee

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

	 	 	 	 	 
	 

	 	 
	 	 
	 

	 	 
	 	 
	Date

	 	Signature
	 	P&G E-mail Address

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR KEY MANAGER RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

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

1. Definitions.

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

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

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

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

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

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

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

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

2. Transfer and Restrictions.

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

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

 

 

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

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

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

3. Confidentiality and Non-Competition

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

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

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

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

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

 

 

confidential information” also includes personnel knowledge about a manager, or managers, of
Procter & Gamble or its subsidiaries gained in the course of your employment with Procter &
Gamble or its subsidiaries (including personnel ratings or rankings, manager or peer
evaluations, performance records, special skills or abilities, compensation, work and
development plans, training, nature of specific project and work assignments, or specialties
developed as a result of such assignments) which directly or indirectly affords you a
confidential basis to solicit, encourage, or participate in soliciting any manager, or
managers, of Procter & Gamble or any subsidiary to terminate his or her relationship with
Procter & Gamble or that subsidiary.

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

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

4. Voting and Other Shareholder Rights.

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

5. Adjustments in Case of Stock Splits, Etc.

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

6. Tax Withholding.

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

 

 

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

7. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

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

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

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

9. Data Privacy.

 

 

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

10. Notices.

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

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

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

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

11. Successors and Assigns.

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

12. Governing Law.

 

 

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

13. The Plan.

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

14. Effect of These Terms and Conditions.

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

 

 

			
	Appendix 8
	 	Form KMG

     [INSERT DATE]

[INSERT NAME]

			
	Subject:	 	Award of Restricted Stock Units

This is to advise you that The Procter & Gamble Company, an Ohio corporation, is awarding you with
Restricted Stock Units, on the dates and in the amounts listed below, pursuant to The Gillette
Company 2004 Long-Term Incentive Plan, and subject to the attached Statement of Terms and
Conditions Form KMG.

	 	 	 
	Grant Date:

	 	[INSERT DATE OF GRANT]
	Forfeiture Date:

	 	[INSERT DATE FORFEITURE ENDS]
	Original Settlement Date:

	 	[INSERT DATE RSUs BECOME SHARES]
	Number of Restricted Stock Units:

	 	[INSERT NUMBER GRANTED]
	 
	 	 
	 

	 	THE PROCTER & GAMBLE COMPANY
	 
	 	 
	 

	 	James J. Johnson, Secretary
For the Compensation Committee

	o	 	I hereby accept the Award of Restricted Stock Units set forth above in accordance
with and subject to the terms of The Gillette Company 2004 Long-Term Incentive Plan
and the attached Statement of Terms and Conditions for Restricted Stock Units, with
which I am familiar. I agree that the Award of Restricted Stock Units, The Gillette
Company 2004 Long-Term Incentive Plan, and the attached Statement of Terms and
Conditions for Restricted Stock Units together constitute an agreement between the
Company and me in accordance with the terms thereof and hereof, and I further agree
that any legal action related to this Award of Restricted Stock Units may be brought
in any federal or state court located in Hamilton County, Ohio, USA, and I hereby
accept the jurisdiction of these courts and consent to service of process from said
courts solely for legal actions related to this Award of Restricted Stock Units.
	 
	o	 	I hereby reject the Award of Restricted Stock Units set forth above.

	 	 	 	 	 
	 

	 	 
	 	 
	Date

	 	Signature
	 	P&G E-mail Address

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR KEY MANAGER RESTRICTED STOCK UNITS

THE GILLETTE COMPANY 2004 LONG-TERM INCENTIVE PLAN

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

1. Definitions.

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

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

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

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

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

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

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

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

2. Transfer and Restrictions.

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

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

 

 

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

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

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

3. Confidentiality and Non-Competition

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

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

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

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

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

 

 

confidential
information” also includes personnel knowledge about a manager, or managers, of Procter &
Gamble or its subsidiaries gained in the course of your employment with Procter & Gamble or
its subsidiaries (including personnel ratings or rankings, manager or peer evaluations,
performance records, special skills or abilities, compensation, work and development plans,
training, nature of specific project and work assignments, or specialties developed as a
result of such assignments) which directly or indirectly affords you a confidential basis to
solicit, encourage, or participate in soliciting any manager, or managers, of Procter &
Gamble or any subsidiary to terminate his or her relationship with Procter & Gamble or that
subsidiary.

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

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

4. Voting and Other Shareholder Rights.

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

5. Adjustments in Case of Stock Splits, Etc.

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

6. Tax Withholding.

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

 

 

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

7. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

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

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

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

9. Data Privacy.

 

 

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

10. Notices.

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

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

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

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

11. Successors and Assigns.

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

 

 

12. Governing Law.

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

13. The Plan.

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

14. Effect of These Terms and Conditions.

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

 

 

			
	Appendix 9
	 	Form KMW

[INSERT DATE]

[INSERT NAME]

Subject: Award of Restricted Stock Units

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

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]
	 
	 	 	 	 
	 

	 	 	 	THE PROCTER & GAMBLE COMPANY
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	James J. Johnson, Secretary
	 

	 	 	 	For the Compensation Committee

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

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	Date

	 	Signature
	 	P&G E-mail Address

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR KEY MANAGER RESTRICTED STOCK UNITS

THE PROCTER & GAMBLE 2001 STOCK AND INCENTIVE COMPENSATION PLAN

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

1. Definitions.

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

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

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

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

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

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

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

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

2. Transfer and Restrictions.

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

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

 

 

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

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

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

3. Confidentiality and Non-Competition

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

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

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

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

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

 

 

managers, of Procter & Gamble or its subsidiaries gained in the course of your employment
with Procter & Gamble or its subsidiaries (including personnel ratings or rankings, manager
or peer evaluations, performance records, special skills or abilities, compensation, work
and development plans, training, nature of specific project and work assignments, or
specialties developed as a result of such assignments) which directly or indirectly affords
you a confidential basis to solicit, encourage, or participate in soliciting any manager, or
managers, of Procter & Gamble or any subsidiary to terminate his or her relationship with
Procter & Gamble or that subsidiary.

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

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

4. Voting and Other Shareholder Rights.

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

5. Adjustments in Case of Stock Splits, Etc.

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

6. Tax Withholding.

     To the extent Procter & Gamble is required to withhold federal, state, local or foreign taxes
in connection with your Restricted Stock Units, the Committee may require you to make such
arrangements as Procter & Gamble may deem appropriate for the payment of such taxes required to be
withheld, including without limitation, relinquishment of some of the shares of Common Stock that
would otherwise be given to you. However, regardless of any action taken by Procter & Gamble with
respect to any income tax, social insurance, payroll tax, or other tax,

 

 

by accepting a Restricted Stock Unit, you acknowledge that the ultimate liability for any such tax
owed by you is and remains your responsibility, and that Procter & Gamble makes no representations
about the tax treatment of your Restricted Stock Units, and does not commit to structure any aspect
of the Restricted Stock Units to reduce or eliminate your tax liability.

7. Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

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

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

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

9. Data Privacy.

 

 

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

10. Notices.

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

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

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

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

11. Successors and Assigns.

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

12. Governing Law.

 

 

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

13. The Plan.

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

14. Effect of These Terms and Conditions.

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

 

 

			
	Appendix 10
	 	BOD

[INSERT DATE]

[INSERT NAME]

Subject: Award of Restricted Stock Units

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

	 	 	 	 	 
	 

	 	Grant Date:
	 	[INSERT DATE OF GRANT]
	 

	 	Forfeiture Date:
	 	[INSERT DATE FORFEITURE ENDS]
	 

	 	Original Settlement Date:
	 	[INSERT DATE RSUs BECOME SHARES]
	 

	 	Number of Restricted Stock Units:
	 	[INSERT NUMBER GRANTED]

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

THE PROCTER & GAMBLE COMPANY

James J. Johnson, Secretary

For the Compensation Committee

 

 

THE PROCTER & GAMBLE COMPANY

STATEMENT OF TERMS AND CONDITIONS FOR RESTRICTED STOCK UNITS

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

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

	1.	 	Definitions.

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

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

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

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

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

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

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

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

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

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

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

	2.	 	Transfer and Restrictions.

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

 

 

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

(c) At any time at least one calendar year prior to the Original Settlement Date, you and
the Company may agree to postpone the date on which you are entitled to receive one share of
Common Stock for each Restricted Stock Unit you hold until January 15th of any
later year (the “Agreed Settlement Date”). During the Post-Forfeiture Period, you will
retain your Restricted Stock Units subject to the Plan and these Terms and Conditions if you
leave your position as a Director for any reason, except due to your disability. In the
event of your disability during the Post-Forfeiture Period, unless otherwise agreed to in
writing by the Company, your Original Settlement Date or Agreed Settlement Date, as
applicable, shall automatically and immediately become, without any further action by you or
the Company, the date of your disability.

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

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

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

	3.	 	Dividend Equivalents.

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

 

 

including forfeiture and settlement terms, except that if there is a fractional number of
Dividend Equivalent Restricted Stock Units on the date they are to be settled, you will receive one
share of Common Stock for the fractional Dividend Equivalent Restricted Stock Units.

	4.	 	Voting and Other Shareholder Rights.

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

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

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

	6.	 	Tax Withholding.

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

	7.	 	Suspension Periods and Termination.

     The Company reserves the right from time to time to temporarily suspend your right to settle
your Restricted Stock Units for shares of Common Stock where such suspension is deemed by the
Company as necessary or appropriate.

	8.	 	Data Privacy.

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

 

 

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

	9.	 	Notices.

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

The Procter & Gamble Company

ATTN: Corporate Secretary’s Office

P.O. Box 599

Cincinnati, OH 45201

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

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

	10.	 	Successors and Assigns.

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

	11.	 	Governing Law.

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

	12.	 	The Plan.

     All Restricted Stock Units awarded to you have been awarded under the Plan. Certain
provisions of the Plan may have been repeated or emphasized in these Terms and Conditions;

 

 

however, all terms of the Plan apply to you and your Restricted Stock Units whether or not they
have been called out in these Terms and Conditions.

	13.	 	Effect of These Terms and Conditions.

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

 

 

Appendix 11

Payment Preference Materials for Key Manager Awards

[DATE]

[NAME]

Subject : Payment Form Elections for STAR, BGP and Key Manager Awards

Your choices for the awards are:

February [YEAR] Key Manager Long-Term Incentive Award

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

September [YEAR] STAR Award 

	 	•	 	Cash
	 
	 	•	 	Stock Options
	 
	 	•	 	Restricted Stock Units (for BGP participants only)— no forfeiture
provision
	 
	 	•	 	Deferred Compensation (for BGP participants only)

September [YEAR] BGP Award

	 	•	 	Three-Year Restricted Stock Units (50% of award required in this form)
	 
	 	•	 	Cash, Restricted Stock Units — no forfeiture provision, or Deferred
Compensation (50% of award subject to this election)

Attached you will find an election form to be returned to [NAME]. Please note Form A now includes
the Senior Executive Officer Recoupment Policy.

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

While your selection will be given consideration, it is not binding on the Company until approved
by the Compensation and Leadership Development Committee of the Board of Directors. IF YOU MISS THE
[DATE] DEADLINE, CURRENT LAWS REQUIRED US TO DEFAULT YOUR AWARDS. The Key Manager Stock Option
grant will default to 100% stock options; the STAR award will default to 100% cash; and the BGP
award will default to 50% 3-year RSUs and 50% cash.

GLOBAL EXECUTIVE COMPENSATION

 

 

Payment Preference Materials for Key Manager Awards

[YEAR] EXECUTIVE COMPENSATION AWARD FORM PREFERENCES

	 	•	 	You must be an active employee as of [DATE] to receive any non-cash award
	 
	 	•	 	All elections are irrevocable after [DATE]

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

	 	 	 	 	 	 	 
	Stock Options
	 	 	—	%	 	 
	Restricted Stock Units (RSUs)
	 	 	—
(maximum of 50%)	%	 	Shares will deliver 100% in [YEARS] years ([DATE], [YEAR]).  Key
Manager RSUs have no dividend equivalents and no deferral past 5 years.
	Total
	 	 	100	%	 	 

[YEAR] STAR Award Payable [DATE] [YEAR]

	 	 	 	 	 	 	 
	Cash
	 	 	—	%	 	 
	Stock Options
	 	 	—	%	 	 
	Restricted Stock Units (RSUs)
	 	 	—	%	 	________ (Select year you want
	 
	 	 	 	 	 	shares delivered, e.g. [YEAR],
	 
	 	 	 	 	 	or one year after retirement.)
	Deferred Compensation
	 	 	—	%	 	 
	Total
	 	 	100	%	 	 

[YEAR] BGP Award Payable [DATE] [YEAR] (Complete for remaining 50%)

	 	 	 	 	 	 	 
	3-Year Restricted Stock Units (RSUs)
(If you leave the Company within 3 years of grant for reasons other
than retirement, you forfeit these units.)
	 	 	50
(required)	%	 	_________ (Select year you want shares delivered, e.g. [three years
after grant date, any year later than three years after grant date,
or one year after retirement]
	Restricted Stock Units (RSUs)
	 	 	—	%	 	_________ (Select year you want shares delivered, e.g., [YEAR], or
one year after retirement)
	Cash
	 	 	—	%	 	 
	Deferred Compensation
	 	 	—	%	 	 
	Total
	 	 	100	%	 	 

PLEASE NOTE: Any election by you to delay the settlement date of your RSUs does not in any way
alter or amend the terms of The Procter & Gamble Stock and Incentive Compensation Plan and/or the
Statement of Terms and Conditions for Restricted Stock Units pursuant to which the subject RSUs
were granted.

Your signature below indicates your agreement that any awards granted or paid pursuant to the STAR
and/or BGP programs will be subject to the terms of the Senior Executive Officer Recoupment Policy.
This Policy provides that in the event of a significant restatement of financial results, if
compensation paid pursuant to STAR and/or BGP would have been lower based on restated results, the
Compensation and Leadership Development Committee may seek to recoup from the senior executive
officers some or all of the compensation paid pursuant to STAR and/or BGP. A copy of the policy is
available from [NAME].

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Signature)
	 	 
	 	 	 	(Date)

Return form to [NAME].

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