CC-241-19 December 18, 2019

To: RAI TMS Contracted Retail and Subjobber customers

SUBJECT: New RAI TMS Retail Returned Goods Procedures

• Effective January 6, 2020, RAI TMS is introducing a new retail returned goods procedure for the following brand styles:

All ALTO 5.0 VUSE ALTO 2.4 All VUSE All VUSE All VUSE All All ASC including PUK and (exc. Menthol) SOLO VIBE product CIRO Product Starter Kit product Product product

• The products listed above are only authorized for return to your supplier if a RAI TMS representative has applied a pink label to each pack identifying the product as “Beyond Stock Rotation Guidelines.” RAI TMS will also supply clear plastic bags for product returns. Below are images of the “Beyond Stock Rotation Guidelines” labels and the clear product return bags.

• If product is no longer saleable (i.e., beyond stock rotation guidelines/out-of-date), RAI TMS representatives will sticker each pack with a return label “Beyond Stock Rotation Guidelines.”

− Direct suppliers will not receive full product value for product that is not stickered at retail. − Product that is in an unopened carton or sleeve may be returned with a sticker on the outside of carton/sleeve. − Repack cartons are not required for retail returns. − Recently introduced products such as VELO, Alto 1.8 and Alto Menthol 2.4 are not authorized for retail returns until one year after the initial introduction.

• Due to the changes in the Wholesale Returned Goods Program, we will have a transition period for direct suppliers beginning December 20, 2019. At this time, direct suppliers should suspend retail returns of the products listed above until January 20, 2020. Retail returns to wholesale on or after January 6, 2020 will require authorization and stickering from RAI TMS personnel, which may not occur until late January depending on material availability. • If RAI TMS initiates a special event (i.e., flavor restriction product return), RAI TMS representatives will sticker each pack with a “Special Event” return label (image below).

If you have questions about the changes outlined above, please contact your RAI TMS representative.

RAI TRADE MARKETING SERVICES COMPANY (a subsidiary of , Inc. that provides marketing agreements, programs, and services on behalf of R.J. Reynolds Company, American Snuff Company, LLC, Santa Fe Natural Tobacco Company, and R.J. Reynolds Vapor Company)