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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;In February&amp;#160;2010, the board of directors of RAI approved a grant to key employees of RAI and
   its subsidiaries of 990,083 nonvested restricted stock units under the Omnibus Plan, effective
   March&amp;#160;1, 2010. The restricted stock units generally will vest on March&amp;#160;1, 2013. Upon settlement,
   each grantee will receive a number of shares of RAI&amp;#8217;s common stock equal to the product of the
   number of vested units and a percentage from 0%-150% based on the average RAI annual incentive
   award plan score over the three-year period ending December&amp;#160;31, 2012.
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   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;As an equity-based grant, compensation expense relating to the 2010 Omnibus Plan grant will
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   price of RAI common stock on the date of grant, or $53.24. Dividends paid on shares of RAI common
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   date. If RAI fails to pay its shareholders cumulative dividends of at least $10.80 per share for
   the three-year performance period ending December&amp;#160;31, 2012, then each award will be reduced by an
   amount equal to three times the percentage of the dividend underpayment, up to a maximum reduction
   of 50%.
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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