I. COMPLIANCE — EACH EMPLOYEE’S RESPONSIBILITY

Each director, officer and employee of Reynolds American Inc. ("RAI") and its subsidiaries (herein referred to collectively as the "Company") are expected to comply with the Company's Code of Conduct and underlying policies and procedures. (The term "employee," as used throughout the Code, is intended to refer to each director, officer and employee of the Company, unless the context indicates otherwise.) The Code of Conduct provides guidance to employees regarding their basic ethical and legal responsibilities. Although it is not possible to anticipate or to provide for every situation that may arise, the Code should be useful as a guide in assuring that the conduct of Company employees is beyond reproach. The Code may be supplemented from time to time by specific guidelines, policies or procedures adopted by RAI or its subsidiaries.

Compliance with applicable laws is a critical element of our Code of Conduct. All employees should understand those laws that apply to them in the performance of their jobs and ensure that Company operations with which they are involved are conducted in conformity with those laws. Violation of these laws can seriously damage the Company's reputation, subject the Company to liability and even subject individual employees to personal liability. Each employee is responsible for any illegal, unethical or fraudulent activity in which he or she participates, even if such participation is pursuant to instructions by a supervisor. Every employee has the responsibility to discuss such instructions with the person giving them. No executive or manager has the authority to require or approve any action that is contrary to any laws or regulations or the policies contained in this Code. Questions concerning any legal responsibility should be referred to the General Counsel of RAI or his designee.

All employees benefit from an atmosphere of good ethical conduct. Employees who are aware of suspected misconduct, illegal activities, fraud, abuse of Company assets or violation of the Code are responsible for immediately reporting such matters to their management, their Human Resources representative, or the General Counsel of RAI or his designee. There will be no retribution against any employee for making such a report in good faith, and every effort will be made to protect the identity of the reporting individual. Violations of the Code may also be reported using EthicsLine, which is staffed by trained professionals who are available by telephone (1-800-500-0333) or facsimile (1-800-500-0993) 24 hours a day, and if desired, information may be reported anonymously. The Company expects employees to fully cooperate in any investigation of business conduct that may violate the Code of Conduct.

When in doubt regarding ethical and legal responsibilities related to the conduct of Company business, employees have the responsibility to seek clarification from their management or, if necessary, from their Human Resources representative, the General Counsel of RAI or his designee. Violations of the Company's Code of Conduct, including failures to report violations, are grounds for disciplinary action up to and including discharge, as well as possible legal prosecution.