QUALIFIED LEGAL COMPLIANCE COMMITTEE CHARTER
2003 Committee Charter : RJR
Designation The Audit Committee of the Board of Directors of R.J. Reynolds Tobacco Holdings, Inc. ("RJR") hereby is designated by the Board of Directors as a "qualified legal compliance committee" within the meaning of 17 CFR Part 205.
(a) Receipt, Retention and Consideration of Reports. The QLCC shall adopt written procedures for the confidential receipt, retention and consideration of any report of evidence of a material violation under Part 205 or any report under RJR's Professional Conduct Policy of a possible violation of law (a "report").
(A) inform the General Counsel of RJR, as the chief legal officer ("CLO"), and the chief executive officer of RJR ("CEO") of such report, unless such notification would be futile; and
(B) determine whether an investigation is necessary regarding any report of evidence of a material violation by RJR, its subsidiaries or any of their officers, directors, employees or agents.
(2) If the QLCC determines an investigation is necessary or appropriate, the QLCC shall:
(C) retain such expert personnel as the Committee deems necessary.
(c) Making Recommendations for Adoption of Appropriate Response. At the conclusion of any such investigation, the QLCC shall:
(1) recommend that RJR implement an appropriate response to the evidence of a material violation, which appropriate response may include:
(A) a finding that no material violation has occurred, is ongoing or is about to occur;
(C) the retention or direction of an attorney to review the reported evidence of a material violation and, after such review, either (i) RJR has substantially implemented any remedial recommendations made by such attorney after a reasonable investigation and evaluation of the reported evidence or (ii) the attorney advises RJR that such attorney may, consistent with his or her professional obligations, assert a colorable defense on behalf of RJR, its subsidiaries or their officers, directors, employees or agents, in any investigation or judicial or administrative proceeding relating to the reported evidence of a material violation; and
(2) inform the CLO, the CEO and the Board of Directors of the results of any such investigation initiated by the QLCC and the appropriate remedial measures to be adopted.
(d) Authority to Notify the SEC. The QLCC may take all other appropriate action, including the authority to notify the Securities and Exchange Commission, if RJR fails in any material respect to implement an appropriate response that the QLCC has recommended for adoption by RJR.
(e) Reporting to the Board of Directors. The QLCC shall report periodically to the Board of Directors. This report will include a review of the report(s) received, the investigations conducted, conclusions reached and responses recommended by the QLCC and any other matters that the QLCC deems appropriate or is requested to be included by the Board of Directors.
The QLCC is authorized (without seeking Board approval) to retain outside attorneys and other expert personnel to assist the QLCC as it deems necessary. The QLCC is authorized to obtain appropriate funding, as determined by the QLCC, for payment of compensation to such attorneys and other expert personnel and for ordinary administrative expenses of the QLCC that are necessary or appropriate for carrying out its duties.