SEC Form 4 · accession 0001209191-15-053249

LORILLARD, LLC · LO

Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗

Reporting owner

Murray S Kessler

Officer — Chairman, President and CEO · Director

Period of report

Jun 12, 2015

Accepted (ET)

Jun 15, 2015 · 4:14 pm EDT

Rule 10b5-1 plan

unknown — predates the checkbox

Issuer CIK

0001424847

Table I — non-derivative securities

Security	Date	Code	Shares	Price	A/D	Owned after	D/I	Nature of ownership
Common Stock	Jun 12, 2015	F	155,937	$71.40	D	266,947	D
Common Stock^F3	Jun 12, 2015	D	266,947	—	D	0	D

Table II — derivative securities

Security	Conv. / exercise price	Date	Code	Shares	A/D	Exercisable	Expires	Underlying	Underlying shares	D/I
Stock Options^F4,F5	$27.12	Jun 12, 2015	D	34,257	D	Sep 13, 2011	Sep 13, 2020	Common Stock	34,257	D
Stock Options^F4,F5	$27.353	Jun 12, 2015	D	34,257	D	Sep 13, 2011	Sep 13, 2020	Common Stock	34,257	D
Stock Options^F4,F6	$26.40	Jun 12, 2015	D	133,740	D	Feb 17, 2012	Feb 17, 2021	Common Stock	133,740	D
Stock Options^F4,F5	$31.67	Jun 12, 2015	D	34,257	D	Sep 13, 2011	Sep 13, 2020	Common Stock	34,257	D
Stock Options^F4,F6	$36.29	Jun 12, 2015	D	133,734	D	Feb 17, 2012	Feb 17, 2021	Common Stock	133,734	D
Stock Options^F4,F5	$36.29	Jun 12, 2015	D	34,257	D	Sep 13, 2011	Sep 13, 2020	Common Stock	34,257	D
Stock Options^F4,F6	$36.90	Jun 12, 2015	D	133,734	D	Feb 17, 2012	Feb 17, 2021	Common Stock	133,734	D
Stock Options^F4,F6	$38.00	Jun 12, 2015	D	133,734	D	Feb 17, 2012	Feb 17, 2021	Common Stock	133,734	D

Explanation of responses

F1On June 12, 2015, pursuant to the terms of the Agreement and Plan of Merger, dated as of July 15, 2014 (the "Merger Agreement"), by and among Lorillard, Inc., a Delaware corporation ("Lorillard"), Reynolds American Inc., a North Carolina corporation ("RAI"), and Lantern Acquisition Co., a Delaware corporation and wholly owned subsidiary of RAI ("Merger Sub"), Merger Sub merged with and into Lorillard with Lorillard surviving as a wholly owned subsidiary of RAI (the "Merger").
F2Represents the restricted shares withheld by Lorillard to satisfy the reporting person's tax liability resulting from the accelerated vesting of restricted stock awards held by the reporting person at the effective time of the Merger.
F3Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of Lorillard common stock beneficially owned by the reporting person was automatically canceled and converted into the right to receive (i) $50.50 in cash (the "Cash Consideration") and (ii) 0.2909 of a share of RAI common stock (the "Stock Consideration").
F4Pursuant to the terms of the Merger Agreement, each outstanding option to purchase Lorillard common stock beneficially owned by the reporting person was canceled in exchange for the right to receive a cash payment equal to the number of shares of Lorillard common stock subject to the option multiplied by the excess of the Equity Award Consideration over the applicable exercise price per share of the option. Pursuant to the Merger Agreement, for purposes of this calculation, "Equity Award Consideration" means the sum of the Cash Consideration and an amount equal to the product of (i) the Stock Consideration and (ii) the volume weighted average per share price of RAI common stock on the New York Stock Exchange (as reported by Bloomberg L.P.) for the five consecutive trading days ending on the third business day prior to the effective time of the Merger ($72.2977 per share).
F5The stock options vested in four equal annual installments beginning on September 13, 2011.
F6The stock options vest in four equal annual installments beginning on February 17, 2012.