Restricted Share Plan

Our Restricted Share Plan (RSP) was introduced in 2020, designed to reward senior employees’ continuing contribution to our overall company success.

Here’s how it works

The RSP is a conditional share award, granting you the right to receive a number of shares in British American Tobacco provided you still work with us at the end of a three year vesting period.

You will be notified by Computershare when you can log in to your account to find the number of shares you have been conditionally awarded.

At the end of the three year vesting period the award of shares will be transferred to you. You will then be able to keep, sell or transfer your shares.

If BAT cannot operate a share scheme in your country you will be granted phantom shares that payout in cash.

We grant the award twice each year

MARCH

Main Award

 This is when we’ll grant the majority of the awards

SEPTEMBER

Interim Award

 Mostly for new joiners and people recently promoted from a non-eligible grade

Am I eligible?

You’re eligible for the RSP as long as you’re a full-time or part-time permanent employee of British American Tobacco at Grade 37 or above. Different eligibility rules apply to RAI employees. If in doubt, please consult your HRBP.

If you join the company (or you’re promoted from Grade 36 to Grade 37) after 1 January, you’ll receive a pro-rated award based on your new salary and the number of days you’ve been in your new role.

Don’t worry, you can still participate in the RSP if you are on international assignment, but the plan may work differently in different countries (you may receive a phantom award that pays out in cash instead of shares).

How we calculate your award

We calculate the level of your award as a percentage of your base salary, so the level of your award depends on your pay grade on 1 January in the year of your award (or on the date you joined/were promoted if that was after 1 January).

If you’re unsure of the RSP award percentage applicable to your pay grade, please consult your HRBP.

How many conditional shares could I receive?

*The award share price is the average BAT share price (derived from the LSE, JSE or NYSE as appropriate), over the three dealing days immediately preceding the award grant date.

Dividends

When your award vests you may also receive an additional cash payment. This will be equivalent to the value of any dividends you would have received on your net shares during the vesting period. Dividend equivalents will be a one-time payment paid to you via payroll after the vesting date.

When will I receive my shares?

You’ll receive your shares at the end of the three year vesting period, subject to any country specific regulations. It’s worth noting that if your award is granted at the interim award date in September, it will still vest at the same time as awards granted in March of that year.

Here’s an example:

Will I have to pay tax?

Depending on which country you’re in there will probably be some tax to pay when your shares vest.

In some cases BAT will be required to withhold taxes from your share income when your award vests. In other cases it’s your responsibility to declare and pay any taxes due via your personal tax return. Remember you may also have to pay some capital gains tax.

If you’re in any doubt about the tax consequences of receiving your share award we recommend you speak to an independent tax adviser.

Share income are subject to Tax Equalisation, please refer to the Global Mobility Tax Policy for further information. If you are on international assignment with BAT, you will receive appropriate tax filing support from our appointed tax services provider.

What happens if I leave the company?

If you stop working for British American Tobacco, what happens to your RSP award will depend on the reason your employment ended.

If you leave British AmericanTobacco due to:

Disability, ill-health or injury (as evidenced to the satisfaction of the Board)

A sale, transfer or winding up of the business

Your award will be pro-rated based on the number of days you were employed by BAT during the vesting period starting from the grant date. The prorated award will operate on a “wait and see” basis and vesting will occur at the normal time. In exceptional cases vesting may be accelerated to the point of departure to comply with local tax regulations.

If you leave for any other reason (including retirement, redundancy, resignation or dismissal):

Your unvested RSP award will lapse unless the Board of Directors decides otherwise.