XXVI. CODE OF CONDUCT VIOLATIONS

1. Employees should immediately report any violation of the Code. Failure to do so can have serious consequences for the employees and the Company.
   
   
2. Reports of violations should be made by employees to their supervisors or, if circumstances make this inappropriate, to the General Counsel of RAI or his designee.
   
   
3. Management has the responsibility of promptly and thoroughly investigating all reports.
   
   
4. After a violation is investigated, appropriate action will be taken. Management has the right to determine what disciplinary action will be taken for a violation, ranging from an oral reprimand to termination. All proposed disciplinary action is subject to review by senior management.
   
   
5. Employees should be aware that in addition to any disciplinary action taken by the Company, violations of some Code provisions may require restitution and may lead to civil or criminal action against individual employees and any corporation involved.
   
   
6. Management has the responsibility of taking remedial steps to correct any operating procedures that may have contributed to violations of the Code.