Health Care Plan

AMENDMENT NO. 3
TO THE
BROWN & WILLIAMSON TOBACCO CORPORATION
HEALTH CARE PLAN
FOR SALARIED EMPLOYEES


THIS AMENDMENT NO. 3 to the Brown & Williamson Tobacco Corporation Health Care Plan for Salaried Employees (the "Plan"), as amended through March 8, 2004, is made and entered into the 30th day of December, 2004. The provisions of this Amendment shall be effective as of July 30, 2004;


WITNESSETH:


WHEREAS, Reynolds American Inc. ("RAI") maintains the Plan for the benefit of former employees of Brown & Williamson Tobacco Corporation who are employed in "transitional employment" (as such term is defined in the Plan) by RAI or any of its subsidiaries and affiliates designated as participating companies; and


WHEREAS, the RAI Employee Benefits Committee (the "Committee"), by actions taken on December 30, 2004, authorized amendments to the Plan to modify various Plan provisions to reflect the transactions contemplated by the Business Combination (as such term is defined in the Plan) and make other administrative changes to the Plan; and


WHEREAS, such action of the Committee further authorized the members of the Committee to perform any and all acts and execute any and all documents that they may deem necessary to effectuate the Committee's resolutions;


NOW, THEREFORE, the Plan hereby is amended as follows:


1.


The first sentence of the Preamble of the Plan is hereby amended in its entirety to read as follows:


"The Sponsoring Company adopted the Brown & Williamson Tobacco Corporation Comprehensive Health Care Plan and Separate Operations for Salaried Employees (the "Prior Plan"), effective as of July 1, 1988, to provide health care benefits to Eligible Employees of the Brown & Williamson Tobacco Corporation, BATUS, Inc., Brown & Williamson Industries, Inc., and effective as of December 1, 1988, B.A.T. Capital Corporation, and their eligible dependents."


2.


The first sentence of the second paragraph of the Preamble of the Plan is hereby amended in its entirety to read as follows:


Page 1 of 11


"Effective January 1, 1992, the Sponsoring Company amended and restated in its entirety the Prior Plan under the name of the Brown & Williamson Tobacco Corporation Health Care Plan for Salaried Employees (the "Plan") which incorporated into a single plan document all plans providing self-insured health care benefits to salaried employees of the Company and their eligible dependents."


3.


The last two paragraphs of the Preamble of the Plan are hereby amended be deleting the term "Company" and replacing it with the term "Sponsoring Company" each place it appears therein.


4.


The first paragraph of Section 1.45(c) of the Plan is hereby amended in its entirety to read as follows:


"Effective as of the Closing of the Business Combination, the provisions set forth below shall apply."


5.


Section 1.52 of the Plan is hereby amended in its entirety to read as follows:


"1.52 Plan Administrator or Administrator. The terms "Plan Administrator"
or "Administrator" means, for the period from July 30, 2004 to August
17, 2004, the RJR Employee Benefits Committee, and thereafter means
the RAI Employee Benefits Committee, as described in Section 13.01."


6.


Article 1 of the Plan is hereby amended by adding a new Section 1.66A, immediately following Section 1.66, to read as follows:


"1.66A Sponsoring Company. The term "Sponsoring Company" means Reynolds
American Inc." Prior to the Closing, the term "Sponsoring Company"
meant Brown & Williamson Tobacco Corporation."


7.


Section 2.01(b) is amended in its entirety to read as follows:


(b) Except as otherwise provided in Section 2.01, the following
eligibility rules shall apply:


Page 2 of 11


(1) any Eligible Employee who is transferred from a business
operation which, prior to March 1, 1995, was part of The American
Tobacco Company or Golden Belt Manufacturing Company shall
commence participation in the Plan as provided in this Section
2.01 on the later of March 1, 1995 or transfer to employment as
an Eligible Employee; and


(2) former employees of Brown & Williamson Tobacco Corporation (or a
Related Company) who are employed by RAI pursuant to the
"Business Combination" at and after "Closing" (as such terms are
defined in Section 1.08(a)) or individuals who, prior to July 30,
2004, received written job offers from management of Brown &
Williamson Tobacco Corporation for employment in the Brown &
Williamson Federal Credit Union and became employed by RAI on or
after July 30, 2004 ("Credit Union Employees"), in either case
for a "transition period" (as defined in paragraph (3) below),
and who were Participants in the Plan immediately prior to
Closing, or who first become eligible to participate while in
"transitional employment" (as defined in paragraph (3) below)
(taking into account service before and after Closing), shall
continue to be (or, as applicable, shall become) eligible to
participate in the Plan in all respects until the first to occur
of (i) termination of employment for any reason, or (ii)
commencement of "regular employment" with RAI (as defined in
paragraph (3) below).


(3) For purposes of this Plan, the term "regular employment" means
full- or part-time ongoing employment with RAI that is not
classified by RAI as transitional employment. An employee is
considered to be in "transitional employment" if his or her
employment is transferred to RAI in connection with the Business
Combination or he or she is a Credit Union Employee, and the
employee is employed within the B&W Division of RAI for a limited
period of time (a "transition period").


8.


Section 2.01(c) of the Plan is hereby amended by (i) deleting the word "and" at the end of Section 2.01(c)(6), (ii) deleting the "." at the end of Section 2.01(c)(7) and replacing it with a "," and (iii) amending Sections 2.01(c)(8) and (9) in their entirety to read as follows:


(8) except as provided in Section 2.01(b)(2) with respect to Credit
Union Employees, any individual who was not an Employee of the
Company as defined in Section 1.08(a)(2) immediately prior to
Closing, and


(9) salaried Employees who enter into "regular employment" (as
defined in Section 2.01(b)(3)) with RAI at and after Closing,
effective the date such regular employment commences.


9.


Page 3 of 11


Section 2.03(a)(3) of the Plan is hereby amended by adding the phrase "which has not adopted the Plan" immediately following the term "Related Company" where it appears therein.


10.


Section 2.10(a) of the Plan is hereby amended by deleting the term "Company" and replacing it with the term "Plan Administrator" where it appears therein.


11.


Section 12.08 of the Plan is hereby amended in its entirety to read as follows:


"12.08 HIPAA PrivacyRule. Notwithstanding anything in this Plan to the
contrary, the Plan shall be operated in accordance with the Health
Insurance Portability and Accountability Act.


(a) Disclosure of PHI to the Company


(1) The Plan may disclose to the Company "summary health
information," as that term is defined in the Standards for
Privacy of Individually Identifiable Health Information, 45 CFR
Part 160 and Part 164, subparts A and E (the "Privacy Rule"), for
the purpose of allowing the Company to: (i) obtain bids from
insurers for providing health insurance coverage under the Plan;
or (ii) amend or terminate the Plan.


(2) The Plan may disclose to the Company enrollment or disenrollment
information regarding an individual.


(3) The Plan may disclose an individual's protected health
information, as that term is defined in the Privacy Rule ("PHI"),
to the Company if authorized by the individual to make such
disclosure in accordance with the Privacy Rule.


(4) Except as provided in Sections 12.08(a)(1), (2) and (3) above and
subject to the other provisions of this Section 12.08, the Plan
may disclose the PHI of a Participant of the Plan or his or her
Dependent-Participant, if any, to t ...