2015 Retail plan

2015 Program Objectives Establish competitive marketplace pricing across all VUSE SKUs Manufacturer's Required Maximum Retail Price (MRMRP) Encourage and drive Customer support and advocacy for VUSE Provide adequate space to merchandise and communicate the VUSE proposition Provides the ability to communicate the 4Ps Reward participating retailers with Profitability Enhancement Payments (PEP) based upon their sales of Solos and Cartridges Intended to drive their support by providing an enhanced profit opportunity Provide a reward structure to achieve the desired behaviors Drive cartridges as the end game

General Program Requirements

Base Requirements Retailer will carry and maintain adequate inventory of VUSE Products as requested by RJRT Retailer will merchandise and display VUSE Products in a location that is highly visible to adult tobacco consumers, as determined by RJRT Retailer will accept automatic pre-books from RJRT to correct out-of-stock conditions

Base Requirements, Cont. Retailer shall allow RJRT to place highly visible point of sale materials for VUSE Products. Size, type and position of point of sale material will be determined by RJRT representative Retailer shall train employees with any and all materials provided by RJRT concerning VUSE products Retailer shall rotate VUSE products on a first in first out basis and remove from sale any outdated VUSE products for RJRT inspection and authorization for return to wholesale for credit

Signage Requirements RJRT will be allowed to place a minimum of one piece of VUSE off-set advertising signage within the retail outlet in a highly visible location as determined by RJRT If no competitive off-set signage is present in the outlet, Retailer is not required to have off-set VUSE signage

Space Requirements A B C Space will be defined as 3 configurations Backbar “Featured Space” Merchandising B Traditional Pack – Freestanding Back Counter Display C Kiosk RJRT preferred configuration is to have VUSE Products merchandised in “Featured Space” in the Backbar where adult tobacco consumers are used to looking for their product This space will help to quickly legitimize and add credibility to the VUSE brand “Featured Space” is defined as merchandising space no less than 24” from the bottom shelf of the fixture or 27” from the floor and highly visible from the point of purchase All VUSE Products must be “highly visible” from the point of purchase 7

Space – Backbar Merchandising VUSE Products will occupy highly visible “Featured Space” in the backbar. Space location, size and configuration will be determined by RJRT Space on the backbar may or may not be in the current space occupied by RJRT

Space – traditional pack – freestanding BACK counter display VUSE Products will occupy highly visible space on the back counter. Space location, size and configuration will be determined by RJRT The display is designed to be non-self service and placed on the back counter Display is appropriate for placement where: No backbar merchandising is present VUSE Specific Backbar Counter Display Item #715877

Space - Kiosk/Security Glass VUSE Products will occupy highly visible space on the Kiosk/Security Glass window. Space location, size and configuration will be determined by RJRT This display is designed to be non-self service and placed inside the security window Every effort should be made to place this display in addition to the RJRT cigarette Kiosk contract display requirements

Consumer pricing fairness (cpf) program Provisions CPF will be used to ensure VUSE products are priced competitively in the market Retailer must comply with all provisions of the CPF Program Retailer will maintain prominent and accurate price communication on and off the merchandising set as determined by RJRT Retailer will not engage in deceptive or misleading price communications Retailer will ensure that the price charged to adult tobacco consumers is not greater than communicated prices Retailer will prominently and accurately communicate prices on all VUSE discounted (off-invoice and/or retail discounts) and/or otherwise promoted brand styles Retailer will prominently and accurately communicate all VUSE promotional offers to adult tobacco consumers via temporary pricing communication and/or brand-specific POS as required by RJRT

Consumer pricing fairness CPF Program Provisions, cont. RJRT’s ability to advertise price will be no less than parity with other tobacco companies Retailer will perform price changeovers, and execute all pricing changes at the beginning date of all price promotion timeframes, as determined by RJRT Retailer agrees to provide accurate information to RJRT, if requested by RJRT, concerning a competitive reduction or promotion as well as changes in those competitive reductions or promotions Retailer must pass through to purchasers no less than the full amount of all discounting (if applicable) For all VUSE value added promotions (“VAP”), Retailer must pass through to purchasers no less than the full value of the VUSE price reduction (if applicable)

Consumer pricing fairness, cont. The CPF Program will incorporate a Manufacturer's Required Maximum Retail Price (“MRMRP”) Retailer’s everyday selling price for VUSE products will be no greater than RJRT’s MRMRP for VUSE Products Retailer is always free to lower the prices on VUSE Products Retailers must participate in and comply with the provisions of the CPF Program The National MRMRPs for VUSE Products are as follows: Based on SETs and LETs, exceptions to the national MRMRP are posted on EngageTM…. National MRMRP SOLO $9.99 CARTRIDGES $5.99

Profitability enhancement payments (pep) PEPs will be used to enhance a retailer’s profitability on Solos and Cartridges Retailers that comply with the CPF Program will be eligible to earn PEPs for VUSE Products purchased during the month The rate per carton will be subject to change on a monthly basis and will be communicated on a state by state basis

Profitability enhancement payments, cont. PEPs will be paid on a quarterly basis with a reconciliation to occur at the end of the quarter PEP payments will follow the AIM pay guidelines for determining qualified volume PEP funds may be used at the Retailer’s discretion Reduce product price to consumer Margin enhancement PEP Rates Solo $6.25/CTN* Cartridges $2.50/CTN*

Product availability We must continually ensure that we have all styles of VUSE in each contracted outlet to help drive awareness, trial and ultimately adoption Product availability will be reported in all VUSE contracted outlets against all styles VUSE Cartridges Original VUSE Cartridges Menthol VUSE Cartridges Berry VUSE Cartridges Mint VUSE Cartridges Crema VUSE Cartridges Chai VUSE Solo Original VUSE Solo Menthol

Program compliance Compliance will be monitored in all VUSE contracted outlets via a question in CONNECT For the VUSE Plan, are all contract requirements being met? Program resources are not tied to the answer of the compliance question Answering “No” to the compliance question will not deduct any PEP funds For any outlet that is marked “No” you will be required to fill in the text box describing the non-compliance situation It is very important to be detailed when describing the non-compliance. These notes will be viewable by the RJRT controlling account manager Multiple non-compliance issues in the same outlet/account should call into question whether a contract is appropriate

Connect administration Two documents have been developed to use when signing an outlet/ account to a VUSE contract 1 2015 VUSE Addendum – Effective 11-16-15 2 2014 VUSE Stand-alone Plan – Effective 12-30-13 1 The 2015 VUSE Addendum (contract form 8432) should only be used when an outlet/account has an active RJRT cigarette contract (excluding Metro) This is a one page document that only contains the VUSE specific requirements If at anytime the RJRT cigarette contract is canceled the VUSE Addendum would need to be canceled as well

Connect administration, Cont. 2 The 2014 VUSE Stand-alone Plan (contract form 8406) should only be used when an outlet/account is not currently signed to a RJRT cigarette contract If the outlet is signed to a Metro contract, use this plan This is a six page document that contains the VUSE requirements as well as all of the other contract requirements It is very important when signing a VUSE contract that the appropriate document is chosen in CONNECT based on whether the outlet/account has an active RJRT cigarette contract as explained above