UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

__________________________________________

 )

In the Matter of )

 )

)

REYNOLDS AMERICAN INC. , ) File No. 141-0168

 a corporation, )

)

and )

)

LORILLARD, INC. )

 a corporation. )

__________________________________________)

AGREEMENT CONTAINING CONSENT ORDER

The Federal Trade Commission (“Commission”), having initiated an investigation of the 

proposed acquisition of Lorillard, Inc. (“Lorillard”), by Reynolds American Inc. (“Reynolds”)

(“Proposed Respondents”), and it now appearing that Proposed Respondents are willing to enter 

into this Agreement Containing Consent Order (“Consent Agreement”) to divest certain assets 

and providing for other relief:

IT IS HEREBY AGREED by and between Proposed Respondents, by their duly 

authorized officers and attorneys, and counsel for the Commission that:

1. Proposed Respondent Reynolds American Inc., is a corporation organized, existing, and 

doing business under, and by virtue of, the laws of North Carolina, with its office and 

principal place of business at 401 Main Street, Winston-Salem, NC 27101. 

2. Proposed Respondent Lorillard, Inc., is a corporation organized, existing, and doing 

business under, and by virtue of, the laws of the state of Delaware, with its principal 

place of business located at 714 Green Valley Road, Greensboro, NC 27401.

3. Proposed Respondents admit all the jurisdictional facts set forth in the Complaint. 

4. Proposed Respondents waive:

a. Any further procedural steps;

b. The requirement that the Commission’s Decision and Order, attached hereto and 

made a part hereof, contains statements of findings of fact and conclusions of law;
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c. All rights to seek judicial review or otherwise to challenge or contest the validity 

of the Decision and Order entered pursuant to this Consent Agreement; and

d. Any claim under the Equal Access to Justice Act. 

5. Thirty (30) days after this Consent Agreement is signed by the Proposed Respondents, 

the Proposed Respondents shall submit their initial compliance report, pursuant to 

Section 2.33 of the Commission Rules, 16 C.F.R. § 2.33, and thereafter, shall submit 

compliance reports every thirty (30) days until the Decision and Order becomes final, at 

which time the reporting obligations contained in the Decision and Order (other than the 

requirement to submit an initial report pursuant to this Consent Agreement) shall control. 

Each compliance report shall set forth in detail the manner in which each Proposed 

Respondent has complied, is complying, and will comply with the Consent Agreement, 

and the Decision and Order. Each Proposed Respondent shall provide sufficient 

information and documentation to enable the Commission to determine independently 

that the Proposed Respondent is in compliance with the Consent Agreement and the 

Decision and Order.

6. Each compliance report shall be either verified by a notarized signature or self-verified in 

a manner set forth in 28 U.S.C. § 1746. Section 2.41(a) of the Commission’s Rules of 

Practice requires that an original and two copies of all compliance reports be filed with 

the Commission. Each Proposed Respondent shall file an original report and one copy 

with the Secretary of the Commission, and shall send at least one copy directly to the 

Bureau of Competition’s Compliance Division.

7. This Consent Agreement, and any compliance reports filed pursuant to this Consent 

Agreement, shall not become part of the public record of the proceeding unless and until 

the Consent Agreement is accepted by the Commission. If this Consent Agreement is 

accepted by the Commission, it will be placed on the public record for a period of thirty 

(30) days and information in respect thereto publicly released. The Commission 

thereafter may either withdraw its acceptance of this Consent Agreement and so notify 

the Proposed Respondents, in which event the Commission will take such action as it 

may consider appropriate, or issue and serve its Decision and Order, in disposition of the 

proceeding.

8. This Consent Agreement is for settlement purposes only and does not constitute an 

admission by Proposed Respondents that the law has been violated as alleged in the draft 

of Complaint, or that the facts as alleged in the draft Complaint, other than jurisdictional 

facts, are true.

9. This Consent Agreement contemplates that, if it is accepted by the Commission, the 

Commission may make information public with respect thereto. If such acceptance is not 

subsequently withdrawn by the Commission pursuant to the provisions of Commission 

Rule 2.34, 16 C.F.R. § 2.34, the Commission may, without further notice to Proposed 
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Respondents, issue the attached Decision and Order containing an order to divest and 

providing for other relief in the disposition of the proceeding.

10. When final, the Decision and Order shall have the same force and effect and may be 

altered, modified, or set aside in the same manner and within the same time as provided 

by statute for other orders. The Decision and Order shall become final upon service. 

Delivery of the Decision and Order to the Proposed Respondents by any means provided 

in Commission Rule 4.4(a), 16 C.F.R. § 4.4(a), including, without limitation, delivery to 

an office within the United States of the counsel for the Proposed Respondents identified 

on this Consent Agreement, shall constitute service. Proposed Respondents waive any 

rights they may have to any other manner of service. Proposed Respondents also waive

any right they may otherwise have to service of any appendices attached or incorporated 

by reference into the Decision and Order, if Proposed Respondents are already in 

possession of copies of such appendices, and agree that they are bound to comply with 

and will comply with the Decision and Order to the same extent as if they had been 

served with copies of such appendices.

11. The Complaint may be used in construing the terms of the Decision and Order, and no 

agreement, understanding, representation, or interpretation not contained in the Decision 

and Order, or the Consent Agreement may be used to vary or contradict the terms of the 

Decision and Order.

12. By signing this Consent Agreement, Proposed Respondents represent and warrant that 

they can accomplish the full relief contemplated by the attached Decision and Order 

(including effectuating the required divestitures, as well as any necessary assignments or 

transfers) and that all parents, subsidiaries, affiliates, and successors necessary to 

effectuate the full relief contemplated by this Consent Agreement are parties to this 

Consent Agreement or within the control of parties to this Consent Agreement.

13. Proposed Respondents agree that they shall interpret the Imperial Divestiture Agreement, 

as that term is used in the Decision and Order, in a manner that is fully consistent with all 

of the relevant provisions and remedial purposes of the Decision and Order.

14. Proposed Respondents have read the draft of Complaint, and the Decision and Order. 

Proposed Respondents understand that once the Decision and Order has been issued, each 

Proposed Respondent will be required to file one or more compliance reports showing 

that it has fully complied with the Decision and Order.
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15. The Proposed Respondents agree to comply with the applicable terms of the proposed 

Decision and Order from the date the Proposed Respondents sign this Consent 

Agreement. Proposed Respondents further understand that they may be liable for civil 

penalties in the amount provided by law for each violation of the Decision and Order

after it becomes final.

REYNOLDS AMERICAN, INC. FEDERAL TRADE COMMISSION

__________________________ ________________________

By: Susan M. Cameron Robert S. Tovsky

Chairman, President and Attorney

Chief Executive Officer Bureau of Competition

 Reynolds American Inc.

Dated: ___________________ Approved:

_________________________ _________________________

By: Joe Sims James E. Rhilinger

Jones Day Deputy Assistant Director

Counsel for Reynolds American Inc. Bureau of Competition

Dated: __________________

 

__________________________

Stephen Weissman

LORILLARD, INC. Deputy Director

Bureau of Competition

________________________ __________________________

By: Murray S. Kessler Deborah L. Feinstein

Chairman, President, and Director

Chief Executive Officer Bureau of Competition

Lorillard, Inc.

Dated: __________________ Dated: ____________________

________________________

By: Matthew J. Reilly

Simpson Thacher

Counsel for Lorillard, Inc.

Dated: __________________