WINSTON-SALEM, N.C., May 29 /PRNewswire-FirstCall/ -- R.J. Reynolds Tobacco Holdings, Inc. (NYSE: RJR - News) announced today that certain members of its executive management team and that of its R.J. Reynolds Tobacco Company (RJRT) subsidiary have established stock-trading plans under Rule 10b5-1 of the Securities and Exchange Act of 1934.

In October 2000, the Securities and Exchange Commission adopted Rule 10b5-1, which permits individuals who are not in possession of material nonpublic information to establish prearranged plans to buy or sell company stock. The rule allows individuals adopting such plans to sell shares over a specified period of time or at a specific price in the future, regardless of any subsequent material non-public information they receive.

In June 2003, long-term restricted stock grants that were made to some officers of RJR and RJRT will vest. These grants were made in 1999 as part of RJR's ongoing long-term incentive plans. The following officers of RJR and RJRT have elected to enter into 10b5-1 plans in connection with the vesting of these grants:

• RJR Officers:
  
• Andrew J. Schindler, chairman and chief executive officer
  
• Charles A. Blixt, executive vice president and general counsel
  
• RJRT Officers:
  
• Lynn J. Beasley, president and chief operating officer
  
• James V. Maguire, executive vice president
  

In aggregate, a total of approximately 47,500 shares related to these grants are covered by these officers' 10b5-1 plans.

In accordance with company share-ownership guidelines, all officers will hold the equivalent of at least 25 percent of the number of shares granted to them in the form of RJR stock. This will generally equate to 50 percent of the net proceeds after paying taxes. Mr. Schindler has chosen to retain more, selling only those shares necessary to pay taxes due on the stock grants at the time of vesting. For the individuals entering into these plans, approximately half of the value of the vesting stock will be needed to pay taxes.

R.J. Reynolds Tobacco Holdings, Inc. is the parent company of R.J. Reynolds Tobacco Company and Santa Fe Natural Tobacco Company, Inc. R.J. Reynolds Tobacco Company is the second-largest tobacco company in the United States, manufacturing about one of every four cigarettes sold in the United States. Reynolds Tobacco's product line includes four of the nation's 10 best-selling cigarette brands: Camel, Winston, Salem and Doral. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes and other tobacco products, and markets them both nationally and internationally. Copies of RJR's news releases, annual reports, SEC filings and other financial materials are available on the company's website, http://www.RJRHoldings.com.

NEW YORK (Reuters) - Philip Morris USA said on Thursday it will introduce new varieties of its Chesterfield cigarettes in California and Colorado next month, but declined to comment on an analyst report about any plans the cigarette company may have for a new lower-priced brand.

Prudential Securities analyst Rob Campagnino said on Thursday he believes Philip Morris USA, the top U.S. cigarette maker, is considering bringing out a new brand to compete with cigarettes from deep-discount manufacturers.

New York-based Philip Morris USA and other top U.S. cigarette companies are fighting against higher state excise taxes on cigarettes, which are pushing many consumers to switch to less expensive brands.

A spokesman for Philip Morris USA, a unit of Altria Group Inc. (NYSE:MO - News), said the new versions of Chesterfield are premium-blend filtered cigarettes, while other versions of the brand were nonfiltered.

Campagnino said he thinks Philip Morris USA "is giving strong consideration to introducing a new brand" and that he believes the brand "would be priced at a discount to Basic," which is Philip Morris USA's main generic cigarette already on the market.

While there will be an introductory offer of 90 cents off per pack, the new Chesterfields will be sold at a premium price comparable to Philip Morris USA's top-selling Marlboro brand, the spokesman said.

Company Supports Federal Regulation of Cigarettes

NEW YORK--(BUSINESS WIRE)--May 30, 2003-- A study conducted by the Centers for Disease Control found higher levels of tobacco specific nitrosamines (TSNAs) in Marlboro cigarettes sold around the world from 1999-2001 compared to cigarettes manufactured by local companies in other countries. The higher levels of TSNAs found in most domestic cigarettes is a result of the inclusion of U.S. grown tobacco. The study also found that the level of TSNAs in Marlboro is not significantly different from a comparison brand purchased in the United States. As the author of the study told the Washington Post, "It's not just Marlboros, but most American cigarettes that have these considerably higher levels of nitrosamines."

"Philip Morris USA has been actively addressing this issue for a number of years," said Mike Farriss, Vice President, Leaf. "While the study released on Thursday by the CDC was being conducted, the Company was working with farmers to find ways to address this issue which has resulted in the development of technology that significantly reduces the level of TSNAs in American grown tobacco."

In February 2000, Philip Morris USA joined the Flue-Cured Tobacco Cooperative Stabilization Corporation in establishing a $66 million fund by providing a grant of $35 million. This grant gave financial assistance to tobacco growers to return to the use of indirect heating systems with heat exchangers, which has been shown to reduce the occurrence of tobacco specific nitrosamines produced during the curing process. Philip Morris USA requires the use of indirect heating systems with heat exchangers as part of its contract with flue-cured tobacco growers. As a result of these efforts, the TSNA levels in the 2002 flue-cured crop were 80 - 90% lower than crops grown a few years earlier. The cigarettes tested in this study were made with tobacco grown before these improvements in leaf curing.

In addition, Philip Morris USA has been supporting research programs to lower the levels of TSNAs in the burley tobacco crop by improving seed varieties, agricultural practices, harvesting and storage.

As the study notes, "Levels of TSNAs also can vary within batches of flue-cured tobacco. The level of TSNAs in tobacco is affected by the amount of nitrate present during growing and curing. The use of direct-fire burners fueled by propane gas to flue-cure tobaccos began in the late 1960s and early 1970s (Fisher, 2000). These burners exhaust combustion gases directly into the tobacco-curing barn, exposing the curing tobacco to NOx gases that result from incomplete fuel combustion. These gases react with alkaloids in the tobacco to form TSNAs. Tobacco curing operations that do not expose the curing tobacco to exhaust gases (e.g., heat exchange curing methods) eliminate this source of TSNA formation. TSNAs also are found in burley tobacco; researchers believe that those TSNAs result from microbial reduction of nitrate to nitrite and other NOx compounds. Different blending and curing practices most likely are responsible for the variation in TSNA levels reported here."

While the Company has been working to reduce the levels of TSNAs in burley and flue-cured tobacco, it has also been focusing its product development efforts on achieving significant reductions in a number of constituents in cigarette smoke that the public health community has identified as harmful. Philip Morris USA agrees with the study's authors who state that "TSNAs are not the only carcinogens found in cigarette smoke, and reducing their levels alone does not guarantee a less hazardous cigarette. All sources of risk and factors altering risk must be considered in evaluations of the relative risk of cigarette smoke, including the concentration of all of the harmful smoke constituents as well as the potency and biological availability of each component."

"Philip Morris USA is working hard to develop and bring to market cigarettes with significant reductions in a number of harmful smoke constituents," said Farriss. "We are equally committed to the enactment of federal legislation to provide a regulatory scheme that will help manufacturers deliver products with less risk compared to cigarettes currently on the market."

Philip Morris USA continues to believe that enacting federal legislation to provide the Food and Drug Administration with regulatory authority over cigarettes would provide the best framework to help reduce the harm associated with cigarette smoking. The Company will testify in support of such legislation at a Congressional hearing on Tuesday.