SOX Subcommittee

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This charter has been adopted by the Disclosure Committee (the "Disclosure Committee") of Reynolds American Inc. ("RAI") to govern the operation of the Disclosure Committee's sub-committee, the Sarbanes-Oxley Section 404 Steering Committee (the "SOX Committee").

Statement of Purpose

The responsibilities of the Disclosure Committee include, among other things, assisting RAI's Chief Executive Officer and Chief Financial Officer (such officers, the "Senior Officers") in meeting their obligations, under the Sarbanes-Oxley Act of 2002 ("SOX"), to establish and maintain internal controls over financial reporting. The Disclosure Committee has determined that it can provide such assistance more efficiently by delegating to a sub-committee primary responsibility for such matters. As a sub-committee of the Disclosure Committee, the SOX Committee shall report to, and be subject to the oversight of, the Disclosure Committee and shall have such duties as are more specifically set forth below

Responsibilities

In addition to any other responsibilities which the Disclosure Committee may from time to time grant to it, the SOX Committee shall have the responsibility to:

1. Ensure that all necessary procedures are established and followed so that (a) management's report on internal controls over financial reporting can be prepared in accordance with Section 404 of SOX and included in each of RAI's Annual Reports on Form 10-K (such report, the "Internal Control Report") and (b) RAI may make the quarterly disclosures, required under Item 307(c) of Regulation S-K, regarding any changes in internal controls over financial reporting;


2. Without limiting the generality of the foregoing, ensure that RAI develops and maintains proper and adequate documentation of internal controls over financial reporting;


3. Oversee and review the work of RAI's SOX management team, which team has been charged with (a) coordinating the design, development, implementation and testing of internal controls over financial reporting, (b) interfacing with RAI's internal and external auditors regarding RAI's compliance with SOX and (c) where appropriate, providing assistance to remediate control deficiencies;


4. Receive and evaluate periodic reports from the SOX management team regarding the status of such team's efforts relating to RAI's compliance with SOX including, without limitation, reports regarding any exceptions arising from the testing of internal controls over financial reporting;


5. Review, evaluate and approve the annual scoping and planning document used by the SOX management team in connection with the evaluation and testing of the effectiveness of RAI's internal controls over financial reporting, which scoping and planning document shall include, among other things, (a) the determination of the internal control framework to be used in evaluating the effectiveness of RAI's internal controls over financial reporting, (b) the appropriate materiality standards to be applied in determining whether a significant deficiency or a material weakness in internal controls over financial reporting exists, (c) the criteria to identify significant business units for evaluation and (d) the criteria to identify significant controls at the applicable business units.  Once the SOX Committee has approved the annual scoping and planning document, no modifications may be made to such document without the further approval of the SOX Committee;


6. Prepare, and submit to the Disclosure Committee for approval, a draft of the Internal Control Report;


7. Monitor and analyze rules and guidance issued by, and developments occurring at, the Securities and Exchange Commission and the Public Company Accounting Oversight Board relating to establishing and maintaining internal controls over financial reporting;


8. Report, as requested by the Disclosure Committee, on the activities of, and significant issues arising before, the SOX Committee; and


9. Take such other action as the SOX Committee may, in its discretion, determine is necessary and appropriate to assist the Senior Officers in meeting their obligations under SOX relating to internal controls over financial reporting including, without limitation, the obligation to provide the certifications under Sections 302 and 906 of SOX.

Organization

The membership of the SOX Committee shall consist of: RAI's Chief Accounting Officer; Secretary, General Auditor, Treasurer and most senior tax officer; the most senior finance officer from each of RAI's reportable operating segments; and such other representatives from appropriate departments or functions within RAI and its subsidiaries, as selected by the Disclosure Committee from time to time in its discretion.  Such members may be replaced, or new members added, at any time and from time to time by the Disclosure Committee. 

The SOX Committee shall meet as frequently as circumstances require, and as the members deem necessary and appropriate, to carry out the responsibilities described above.  A Chairperson and Secretary shall be elected by the membership of the SOX Committee.  Meetings may be called at any time by the Chairperson or the Secretary.  The Chairperson, or his or her designee, shall preside over meetings of the SOX Committee.  The Secretary shall prepare agendas for, and minutes of, the meetings of the SOX Committee.

Amendment

This Charter may only be amended or modified with the approval of the Disclosure Committee.

Adopted: July 31, 2006
Last Revised: January 7, 2008

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