XIII. POLITICAL ACTIVITIES AND CONTRIBUTIONS

Federal law and the statutes of many states prohibit the Company from contributing money, services, facilities or anything of value to political candidates or political parties. United States law also prohibits similar contributions to foreign political parties, officials or candidates for political office for the purpose of influencing any act or decision of such political party or candidate or inducing such candidate or political party to use his or its influence with a foreign government or instrumentality in order to assist in obtaining or retaining business. The laws of some states allow the Company to contribute to candidates for state or local elective office or to a campaign committee established to support or oppose a ballot issue.

The Company has established a specific policy and procedure that must be followed before a corporate political contribution can be made. Under these policy and procedure guidelines, approval requests must be originated by the Executive Vice President-External Relations of RAI.

Presently, federal and certain state laws permit corporate funds to be used in the formation and the administration of "political action committees" which can receive voluntary political contributions from eligible employees and their families. All such voluntary contributions received must be accounted for in separate, segregated funds, strictly apart from those of the Company.

No corporate action, direct or indirect, will be allowed that infringes on the right of any employee individually to decide whether, to whom and in what amount, he or she will make personal political contributions. The same is true of voluntary political donations of personal service time, so long as it does not interfere with the duties of your employment by the Company.

Employees who participate in partisan political activities on their own behalf and their own time must not purport to speak or act for the Company.