Reynolds Executives Get Slock Plans

Source from:  Winston-Salem Journal  09/04/2014

Reynolds American Inc. said Tuesday that eight executives, though not top executive Susan Cameron, have established stock-trading plans as allowed by federal securities regulations.

Those plans enable individuals who are not in possession of material, nonpublic information to establish prearranged plans to buy or sell shares over a specified period or at a specific price in the future.
 
Reynolds essentially is informing investors and analysts that the awarding and selling of these shares likely is going to take place and could affect the company's share price. Investors and analysts pay close attention to the stock trading activities of top executives as a gauge for determining how much confidence the executives have in the company's current or future performances.

The sale is permitted by rule 10b5-l of the Securities and Exchange Act of 1934.

Reynolds made a similar announcement in November 2011 for 10 executives, which included then-top executive Daniel Delen.

Executives who filed plans to sell common shares received under its long-term incentive program are: Thomas Adams, chief financial officer; Lisa Caldwell, chief human resources officer; Robert Dunham, chief communications officer; Martin Holton III, general counsel; McDara Folan, III, deputy general counsel and secretary; Frederick Smothers, chief accounting officer; Andrew Gilchrist, R.J. Reynolds Tobacco Co. president and chief commercial officer; and Jeffery Gentry, Reynolds Tobacco chief scientific officer.

The final number of shares provided will be determined by the performance of Reynolds and its operating companies on certain pre-established performance measures for 2012-14. The aggregate number of shares to be sold is not expected to exceed 150,000 — up 10,000 shares from the 2011 announcement.

The timing of the announcement comes after Reynolds and Lorillard Inc. were asked last week for additional information by the Federal Trade Commission regarding Reynolds' $27.4 billion offer for its Greensboro rival.

The companies said the separate requests also concern their plan to sell to Imperial Tobacco Group Pic four traditional cigarette brands (Kool, Salem and Winston from Reynolds and Maverick from Lorillard), as well as Lorillard's blu eCigs electronic cigarette brand.

The request is part of the FTC's antitrust review that began shortly after the companies announced their proposed transaction July 15. The companies said the request "is a normal part of the regulatory review process."

Rumors of a potential deal began circulating m early March. Both companies' share prices have surged since, with Reynolds having a 52-week share price of $46.35 to $63.39. It opened trading today at $58.47.

The shares would be paid to the executives in March in settlement of the performance shares granted to them in March 2012.

In the November 2011 announcement, those shares were paid to the executives in March 2012 in settlement of the performance shares granted to them in March 2009.

Executives of Reynolds and its operating companies are subject to share ownership guidelines.

They are required to retain 50 percent of the after-tax shares earned under Reynolds' long-term incentive program, assuming taxes of 50 percent. The sale of shares would be conducted in compliance with those guidelines. Enditem