II. YOUTH SMOKING

One of the core principles of the Company relating to youth smoking is our belief that the decision to smoke is one that should be made only by adults. Therefore, as employees, we must never do anything to encourage smoking by anyone and, in particular, we are, and must be, particularly vigilant in avoiding doing anything to encourage smoking by youth. As a Company, we do not want youth to smoke and, most assuredly, we do not want them to smoke any of the brands of RAI's operating subsidiaries. Indeed, the Master Settlement Agreement ("MSA") obligates the Company to do what we have been doing for many years: find ways to reduce smoking by youth. The Company is committed to pursuing this goal and its achievement, and each employee must share this commitment.

Additionally, there are Company policies and guidelines, consistent with the MSA, which relate to specific activities of RAI's operating subsidiaries, such as lobbying, marketing and sales activities. If you have questions regarding these guidelines and policies, you should consult with your manager, the General Counsel of RAI or his designee.

You may contact the General Counsel of RAI, or his designee, or EthicsLine if you have any concerns or any ideas relating to the Company's on-going efforts to reduce youth smoking.