Class Action Lawsuit Filed On Behalf of R.J. Reynolds Employees Who Suffered Losses in Their 401k Plans From RJR's Sale of Nabisco Stock in January 2000.

Business Editors/Legal Writers

WINSTON-SALEM, N.C.--(BUSINESS WIRE)--May 23, 2002

A class action filed on behalf of over 1000 employees of R.J. Reynolds Tobacco Company charges that RJR breached its duties as fiduciary of its 401 (k) retirement plan under the Employee Retirement Income Security Act ("ERISA") by selling at a loss stock held in Nabisco foods in January 2000, although market analysts recommended holding the stock at that time. The case, entitled Richard G. Tatum v. The R.J. Reynolds Tobacco Company, et al., was filed in federal court in Greensboro, North Carolina.

According to plaintiff's attorney, Robert M. Elliot of Elliot Pishko Morgan, PA, Winston-Salem, North Carolina, "The fiduciaries of the 401(k) benefit plan should not have sold the stock of Nabisco Group Holdings and Nabisco Holdings Corporation at a time when the stock value was at a low, and analysts were advising that the stock should be bought or held, but not sold. By selling the Nabisco stock when they did, RJR allegedly failed to take advantage of the projected rise in value which was to result from the spinoff."

"Under ERISA, fiduciaries of employee pension plans must discharge their duties prudently and solely in the interest of the plan participants and beneficiaries," said Jeffrey Lewis of Sigman, Lewis & Feinberg, P.C., of Oakland, California, also representing the plaintiff. "As alleged in the complaint, this was a serious breach of fiduciary duty because the interest of the employees was considered not at all in the decision to sell the Nabisco stock."

Bill Lann Lee of the national law firm Lieff, Cabraser Heimann & Bernstein, LLP, another of plaintiff's lawyers, observed that: "The plan fiduciaries allegedly acted imprudently because they failed to consider the outlook for Nabisco stocks in January 2000; they simply barreled ahead and sold all Nabisco stock held by the plan based on a decision made months earlier. As predicted, following the sell-off, the Nabisco stocks increased in value dramatically."

The suit was filed by Richard G. Tatum, a plan participant, and names as defendants R.J. Reynolds Tobacco Holdings, Inc., and the committees charged with administering the R.J. Reynolds Tobacco Company Capital Investment Plan, in addition to the R.J. Reynolds Tobacco Co.

Participants in R.J. Reynolds' 401(k) retirement plan who were affected and members of the public who wish to learn more about the case may visit www.lchb.com/rjrlawsuit.htm.

Source/Contact:

Robert M. Elliot

Elliot Pishko Morgan, PA

426 Old Salem Road

Winston-Salem, NC 27101

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Bill L. Lee

Lieff, Cabraser, Heimann & Bernstein, LLP

275 Battery Street, 30th Floor

San Francisco, CA 94111

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Fax: [phone]

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