Exhibit 10.70
AMENDMENT NO. 3
TO THE
BROWN & WILLIAMSON TOBACCO CORPORATION
HEALTH CARE PLAN
FOR SALARIED EMPLOYEES
THIS AMENDMENT NO. 3 to the Brown & Williamson Tobacco Corporation Health
Care Plan for Salaried Employees (the "Plan"), as amended through March 8, 2004,
is made and entered into the 30th day of December, 2004. The provisions of this
Amendment shall be effective as of July 30, 2004;
WITNESSETH:
WHEREAS, Reynolds American Inc. ("RAI") maintains the Plan for the benefit
of former employees of Brown & Williamson Tobacco Corporation who are employed
in "transitional employment" (as such term is defined in the Plan) by RAI or any
of its subsidiaries and affiliates designated as participating companies; and
WHEREAS, the RAI Employee Benefits Committee (the "Committee"), by actions
taken on December 30, 2004, authorized amendments to the Plan to modify various
Plan provisions to reflect the transactions contemplated by the Business
Combination (as such term is defined in the Plan) and make other administrative
changes to the Plan; and
WHEREAS, such action of the Committee further authorized the members of the
Committee to perform any and all acts and execute any and all documents that
they may deem necessary to effectuate the Committee's resolutions;
NOW, THEREFORE, the Plan hereby is amended as follows:
1.
The first sentence of the Preamble of the Plan is hereby amended in its
entirety to read as follows:
"The Sponsoring Company adopted the Brown & Williamson Tobacco Corporation
Comprehensive Health Care Plan and Separate Operations for Salaried Employees
(the "Prior Plan"), effective as of July 1, 1988, to provide health care
benefits to Eligible Employees of the Brown & Williamson Tobacco Corporation,
BATUS, Inc., Brown & Williamson Industries, Inc., and effective as of December
1, 1988, B.A.T. Capital Corporation, and their eligible dependents."
2.
The first sentence of the second paragraph of the Preamble of the Plan is
hereby amended in its entirety to read as follows:
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"Effective January 1, 1992, the Sponsoring Company amended and restated in
its entirety the Prior Plan under the name of the Brown & Williamson Tobacco
Corporation Health Care Plan for Salaried Employees (the "Plan") which
incorporated into a single plan document all plans providing self-insured health
care benefits to salaried employees of the Company and their eligible
dependents."
3.
The last two paragraphs of the Preamble of the Plan are hereby amended be
deleting the term "Company" and replacing it with the term "Sponsoring Company"
each place it appears therein.
4.
The first paragraph of Section 1.45(c) of the Plan is hereby amended in its
entirety to read as follows:
"Effective as of the Closing of the Business Combination, the provisions
set forth below shall apply."
5.
Section 1.52 of the Plan is hereby amended in its entirety to read as
follows:
"1.52 Plan Administrator or Administrator. The terms "Plan Administrator"
or "Administrator" means, for the period from July 30, 2004 to August
17, 2004, the RJR Employee Benefits Committee, and thereafter means
the RAI Employee Benefits Committee, as described in Section 13.01."
6.
Article 1 of the Plan is hereby amended by adding a new Section 1.66A,
immediately following Section 1.66, to read as follows:
"1.66A Sponsoring Company. The term "Sponsoring Company" means Reynolds
American Inc." Prior to the Closing, the term "Sponsoring Company"
meant Brown & Williamson Tobacco Corporation."
7.
Section 2.01(b) is amended in its entirety to read as follows:
(b) Except as otherwise provided in Section 2.01, the following
eligibility rules shall apply:
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(1) any Eligible Employee who is transferred from a business
operation which, prior to March 1, 1995, was part of The American
Tobacco Company or Golden Belt Manufacturing Company shall
commence participation in the Plan as provided in this Section
2.01 on the later of March 1, 1995 or transfer to employment as
an Eligible Employee; and
(2) former employees of Brown & Williamson Tobacco Corporation (or a
Related Company) who are employed by RAI pursuant to the
"Business Combination" at and after "Closing" (as such terms are
defined in Section 1.08(a)) or individuals who, prior to July 30,
2004, received written job offers from management of Brown &
Williamson Tobacco Corporation for employment in the Brown &
Williamson Federal Credit Union and became employed by RAI on or
after July 30, 2004 ("Credit Union Employees"), in either case
for a "transition period" (as defined in paragraph (3) below),
and who were Participants in the Plan immediately prior to
Closing, or who first become eligible to participate while in
"transitional employment" (as defined in paragraph (3) below)
(taking into account service before and after Closing), shall
continue to be (or, as applicable, shall become) eligible to
participate in the Plan in all respects until the first to occur
of (i) termination of employment for any reason, or (ii)
commencement of "regular employment" with RAI (as defined in
paragraph (3) below).
(3) For purposes of this Plan, the term "regular employment" means
full- or part-time ongoing employment with RAI that is not
classified by RAI as transitional employment. An employee is
considered to be in "transitional employment" if his or her
employment is transferred to RAI in connection with the Business
Combination or he or she is a Credit Union Employee, and the
employee is employed within the B&W Division of RAI for a limited
period of time (a "transition period").
8.
Section 2.01(c) of the Plan is hereby amended by (i) deleting the word
"and" at the end of Section 2.01(c)(6), (ii) deleting the "." at the end of
Section 2.01(c)(7) and replacing it with a "," and (iii) amending Sections
2.01(c)(8) and (9) in their entirety to read as follows:
(8) except as provided in Section 2.01(b)(2) with respect to Credit
Union Employees, any individual who was not an Employee of the
Company as defined in Section 1.08(a)(2) immediately prior to
Closing, and
(9) salaried Employees who enter into "regular employment" (as
defined in Section 2.01(b)(3)) with RAI at and after Closing,
effective the date such regular employment commences.
9.
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Section 2.03(a)(3) of the Plan is hereby amended by adding the phrase
"which has not adopted the Plan" immediately following the term "Related
Company" where it appears therein.
10.
Section 2.10(a) of the Plan is hereby amended by deleting the term
"Company" and replacing it with the term "Plan Administrator" where it appears
therein.
11.
Section 12.08 of the Plan is hereby amended in its entirety to read as
follows:
"12.08 HIPAA PrivacyRule. Notwithstanding anything in this Plan to the
contrary, the Plan shall be operated in accordance with the Health
Insurance Portability and Accountability Act.
(a) Disclosure of PHI to the Company
(1) The Plan may disclose to the Company "summary health
information," as that term is defined in the Standards for
Privacy of Individually Identifiable Health Information, 45 CFR
Part 160 and Part 164, subparts A and E (the "Privacy Rule"), for
the purpose of allowing the Company to: (i) obtain bids from
insurers for providing health insurance coverage under the Plan;
or (ii) amend or terminate the Plan.
(2) The Plan may disclose to the Company enrollment or disenrollment
information regarding an individual.
(3) The Plan may disclose an individual's protected health
information, as that term is defined in the Privacy Rule ("PHI"),
to the Company if authorized by the individual to make such
disclosure in accordance with the Privacy Rule.
(4) Except as provided in Sections 12.08(a)(1), (2) and (3) above and
subject to the other provisions of this Section 12.08, the Plan
may disclose the PHI of a Participant of the Plan or his or her
Dependent-Participant, if any, to the Company only as necessary
to enable the Company to perform "Plan Administration Functions"
on behalf of the Plan.
(5) The term "Plan Administration Functions" shall have the same
meaning ascribed to it by the Privacy Rule and shall include
those activities that meet the Privacy Rule's definition of
"Payment" or "Health Care Operations," including, without
limitation, activities related to claims processing, auditing,
eligibility or coverage decisions, utilization review, billing
and collections, coordination of benefits, claims management,
quality assurance, case management, and benefit design.
Notwithstanding the foregoing, the term "Plan Administration
Functions" shall not include
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any activities related to (i) obtaining bids from health insurers
for the purpose of providing health insurance coverage under the
Plan; (ii) amending or terminating the Plan; or (iii) enrollment
or disenrollment in the Plan.
(b) Use and Disclosure of PHI by the Company
(1) The Company may use and/or disclose the PHI that it receives from
the Plan pursuant to Section 12.08(a)(4) to the extent necessary
to perform Plan Administration Functions or as required by law.
The following Employees of the Company assist with Plan
Administration Functions, and in connection with those job
responsibilities, may use and/or disclose PHI that is received
from the Plan:
(A) The designated Privacy Official and Privacy Contact;
(B) Employees who work in the Company's human resources
department and have responsibility for the Plan;
(C) Employees who work in the Company's benefits department and
have responsibility for the Plan;
(D) Employees who work in the Company's legal department and
have responsibility for the Plan;
(E) Employees who work in the Company's finance department and
have responsibility for the Plan, including auditing and
plan accounting functions; and
(F) Employees who work in the Company's payroll department and
have responsibility for payroll deductions relating to the
Plan.
(c) Plan Sponsor Certification
(1) The Plan may disclose an individual's PHI to the Company pursuant
to Section 12.08(a)(4) only upon receipt of a certification from
the Company that the Plan has been amended consistent with the
Privacy Rule, as reflected in this Section, and that the Company
will comply with the provisions of this Section, including the
provisions of Section 12.08(c)(2) below.
(2) If the Plan discloses an individual's PHI to the Company pursuant
to Section 12.08(a)(4), the Company agrees and certifies as
follows:
(A) The Company will not use or disclose such PHI other than as
permitted by the Plan or as required by law.
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(B) The Company will ensure that any agents to whom it provides
such PHI agree to the same restrictions and conditions
applicable to the Company with respect to the PHI.
(C) The Company will not use or disclose such PHI for
employment-related actions and decisions or in connection
with any other employee benefit plan sponsored by the
Company.
(D) The Company will report to the Plan any known use or
disclosure of such PHI which is inconsistent with the
permitted uses or disclosures of the PHI.
(E) To the extent such PHI is part of a "Designated Record Set"
("DRS"), as that term is defined by the Privacy Rule, the
Company will allow the individual that is the subject of the
PHI to access and copy the PHI in accordance with the
Privacy Rule.
(F) To the extent such PHI is part of a DRS, the Company will
make such PHI available for amendment or will incorporate
any amendments to the PHI in accordance with the Privacy
Rule.
(G) The Company will make available such information as is
required to allow the Plan to provide an accounting of
disclosures of PHI to an individual in accordance with the
Privacy Rule.
(H) The Company will make its internal practices, books and
records relating to the use and disclosure of PHI received
from the Plan available to the Secretary of the Department
of Health and Human Services as necessary for the Secretary
to determine the Plan's compliance with the Privacy Rule.
(I) If feasible, the Company will return or destroy all PHI
received from the Plan once it is no longer needed for the
purpose for which the disclosure was made, and if the return
or destruction of the PHI is not feasible, the Company will
limit the future use and disclosure of such information to
those purposes which make the return or destruction of the
information infeasible.
(J) The Company will provide for adequate separation between the
Plan and Company, in the manner described in the Privacy
Rule and this Section.
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(d) Non-Compliance. If any of the individuals identified in Section
12.08(c) fails to comply with the provisions of this Section, he or
she will be subject to the Plan's HIPAA Privacy Policies and
Procedures regarding sanctions for violating the Privacy Rule.
(e) HIPAA Privacy Rule Controls over Conflicting Provisions. If there is
any conflict between the provisions of this Section 12.08 and the
remaining provisions of the Plan, the provisions of this Section 12.08
will control."
12.
Article 12 of the Plan is hereby amended by adding a new Section 12.09 to
the end thereof to read as follows:
"12.09 Adoption/Withdrawal of Participating Companies.
(a) Any Related Company may, with the consent of the Plan Administrator,
adopt the Plan and thereby become a participating Company hereunder by
executing an instrument evidencing such adoption and filing a copy
thereof with the Plan Administrator. By this adoption of the Plan,
participating Companies (other than the Sponsoring Company) shall be
deemed to consent to actions taken by the Sponsoring Company in
entering into any arrangements for the purpose of providing benefits
under the Plan, and to authorize the Sponsoring Company and/or the
Plan Administrator on behalf of the participating Company to take any
actions within the authority of the Sponsoring Company under the terms
of the Plan.
(b) Notwithstanding the foregoing, in the case of any participating
Company that adopts the Plan and thereafter (i) ceases to exist or
(ii) withdraws or is eliminated from the Plan, it shall not thereafter
be considered a participating Company thereunder and the Employees of
such participating Company shall no longer be eligible to participate
in the Plan. Any participating Company (other than the Sponsoring
Company) which adopts the Plan may elect separately to withdraw from
the Plan and such withdrawal shall constitute a termination of the
Plan as to it; provided, however, that such terminating participating
Company shall continue to be a participating Company for the purposes
hereof as to Participants and Dependent-Participants to whom it owes
obligations hereunder, unless the Sponsoring Company or the Plan
Administrator directs otherwise.
(c) Effective as of the Closing, R.J. Reynolds Tobacco Company is the only
Related Company that has adopted the Plan and become a participating
Company hereunder."
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13.
Article 13 of the Plan is hereby amended in its entirety to read as
follows:
"ARTICLE 13
Plan Administration
13.01 Plan Administrator. The Plan Administrator shall administer the Plan
and shall be the "named fiduciary" for the Plan. Nothing herein shall
restrict the Sponsoring Company's right to remove a Plan Administrator
at any time. The Plan Administrator shall be responsible for the
day-to-day administration of the Plan; provided that the Plan
Administrator may delegate its administrative duties to one or more
Benefits Administration Committees or Claims Administrators as set
forth in Section 13.04 below. The Sponsoring Company's sole
responsibility with respect to the administration of the Plan is to
appoint or remove the Plan Administrator.
13.02 Duties and Powers of the Plan Administrator. The Plan Administrator
shall have the following duties, responsibilities and authority with
respect to the administration of the Plan:
(a) Complete discretionary authority to construe and interpret the Plan
including, without limitation, determining an Employee's eligibility
to participate in and receive benefits under the Plan, correcting any
defect, supplying and omitting and reconciling any inconsistency;
(b) To prescribe procedures to be followed by Eligible Employees and
Participants in making elections, filing claims, and any other
administrative procedure necessary to properly administer the Plan.
Notwithstanding any other provision of the Plan, the Plan
Administrator and any Claims Administrator may prospectively revise
their rules and procedures whenever they deem it appropriate, even if
this causes inconsistency with prior decisions or results;
(c) To prepare and distribute information explaining the Plan to Eligible
Employees and Participants;
(d) To receive from the Company, the Eligible Employees and Participants
such information as may be necessary or desirable for the proper
administration of the Plan;
(e) To employ such persons, including, but not limited to, actuaries,
accountants, and counsel, as it deems appropriate, to perform such
duties as may from time to time be required either by administrative
convenience or necessity or under ERISA or under the Code and to
render advice upon request with regard to any matters arising under
the Plan;
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(f) To prepare and file any reports or returns with respect to the Plan
required under applicable law;
(g) To take all other steps deemed necessary or appropriate to properly
administer the Plan in accordance with its terms and the requirements
of applicable law; and
(h) To act in accordance with all applicable laws governing applicable
fiduciary standards.
13.03 Rules and Decisions. The Plan Administrator shall decide any matter,
and may adopt any rule or procedure, regarding eligibility, benefits,
claims, or any other issue arising under the Plan that it deems
necessary, desirable or appropriate in the administration of the Plan,
including factual determinations. All rules and decisions of the Plan
Administrator shall be uniformly and consistently applied to all
Eligible Employees and Participants in similar circumstances and shall
be conclusive and binding on all persons having an interest in the
Plan. When making any decision or determination, the Plan
Administrator or its delegate shall be entitled to rely upon, without
further inquiry, such information as may be furnished to it by an
Eligible Employee or Participant, the Company, legal counsel, or the
administrator of another plan.
13.04 Delegation and Allocation of Responsibility of the Plan
Administrator.
(a) The Plan Administrator, in its discretion, may delegate its
administrative duties and responsibilities to one or more Benefits
Administration Committees each consisting of three or more persons,
who shall be appointed by and serve at the pleasure of the Plan
Administrator and one or more of whom may also be members of the RAI
Employee Benefits Committee. Vacancies in the Benefits Administration
Committees shall be filled by the Plan Administrator but the Benefits
Administration Committees may act, notwithstanding any vacancies, so
long as there are at least two members of such Committee. The members
of a Benefits Administration Committee shall serve without
compensation for their services as such, but shall be reimbursed by
the Sponsoring Company for all necessary expenses incurred in the
discharge of their duties.
(b) Subject to restrictions imposed by the Plan Administrator, a Benefits
Administration Committee's powers shall include the following powers:
(1) to interpret provisions of the Plan with respect to eligibility,
service, and determination of benefits,
(2) to recommend and implement coverage level and Participant
contribution amount changes for the Plan,
(3) to authorize the payment of routine expenses of the Plan,
(4) to prepare and/or approve the filing of required governmental
reports,
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(5) to review medical child support orders to determine compliance
with the qualified medical child support order rules of ERISA
section 609(a)(2),
(6) to maintain Plan records, and
(7) to prepare Employee announcements, forms and procedures.
A Benefits Administration Committee, at its discretion, may delegate
ministerial and clerical duties to assistants, including Employees in
a Company's Employee Benefits department. A Benefits Administration
Committee, at its discretion, may identify and retain Claims
Administrators with respect to various benefits under the Plan. The
designation of a Claims Administrator under the Plan shall constitute
an express grant to the Claims Administrator of discretionary
authority to determine eligibility for Plan benefits, based on
information provided by the Company, Participants and Providers,
including determinations of Medical Necessity, determinations pursuant
to Pre-Admission and Continued Stay Reviews, and other
predeterminations, precertifications and preapprovals required under
the Plan.
13.05 Indemnity. To the extent not insured against by any insurance
company pursuant to the provisions of any applicable insurance policy,
the Sponsoring Company shall indemnify and hold harmless the Plan
Administrator, the members of any Benefits Administration Committee
and their assistants from any and all claims, demands, lawsuits, or
proceedings in connection with the Plan, including the expenses of
defense, provided, that such indemnification shall not apply to any
person for such person's act of willful misconduct or as otherwise
prohibited by law.
13.06 Fiduciary Duties and Responsibilities. Each Plan fiduciary will
discharge his or its duties with respect to the Plan solely in the
interest of the Participants; for the exclusive purpose of providing
benefits to such individuals and defraying reasonable expenses of
administering the Plan; and in accordance with the terms of the Plan.
Each fiduciary, in carrying out such duties, will act with the care,
skill, prudence and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with such
matters would use in exercising such authority. A fiduciary may serve
in more than one fiduciary capacity. Unless liability is otherwise
provided under Section 405 of ERISA, a named fiduciary will not be
liable for any act or omission of any other party to the extent that
(a) such responsibility was properly allocated to such other party as
a named fiduciary, or (b) such other party has been properly
designated to carry out such responsibility pursuant to the procedures
set forth above."
14.
Article 14 of the Plan is hereby amended by deleting the term "Company" and
replacing it with the term "Sponsoring Company" where it appears therein.
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15.
The second sentence of Section 15.01 of the Plan is hereby amended in its
entirety to read as follows"
"The Company (other than the Sponsoring Company) may also make payment of
the benefits provided for its Employees who are Participants in the Plan from
its general assets."
16.
Section A1.03 of Exhibit A to the Plan is hereby amended by deleting the
term "Company" and replacing it with "Sponsoring Company" each place it appears
therein.
IN WITNESS WHEREOF, the undersigned member of the Committee has executed
this Amendment No. 3 as of the day and year first written above.
RAI Employee Benefits Committee
By: /s/ McDara P. Folan, III
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