Exhibit 10.1
December 5, 2007
Ms. Dianne M. Neal
505 Boxthorne Court
Winston-Salem, NC 27106
Dear Dianne:
Although you have resigned as Executive Vice President and Chief Financial
Officer of Reynolds American, Inc. effective January 1, 2008, it is important
that you remain an employee of RAI for a transition period following your
resignation to assist your successor and otherwise aid in a smooth transition of
your responsibilities. As a result, this letter will confirm our agreement.
In consideration and exchange for the following:

  1.   You hereby agree to remain actively employed with RAI through and until
March 31, 2008;     2.   You agree to assist your successor and otherwise aid in
a smooth transition continuing to satisfactorily carry out your duties and
responsibilities as long as you are employed;     3.   You agree to abide by all
company policies and procedures including the provisions set forth in the RAI
Code of Conduct; and     4.   You agree to execute on your last day of
employment a Non-Competition, Non-Disclosure of Confidential Information,
Commitment to Provide Assistance and General Release Agreement. (A copy of which
is attached).

The Company agrees to the following provided that you meet the obligations set
forth above:

  1.   You will continue to receive through your employment termination date
(irrespective of when such date occurs) the same salary payments and other
benefits which you currently receive or to which you are otherwise entitled,
except in no event shall your resignation from RAI entitle you to any severance
or similar payments;     2.   You will receive payment of a retention bonus in
the amount of $180,000 by April 14, 2008;     3.   Your resignation shall be
treated as a retirement effective March 31, 2008 solely for the purposes of
determining your rights in and to the awards previously made to you pursuant to
the Reynolds American, Inc. Long-Term Incentive Plan (Amended and Restated
effective May 11, 2007) (the

 

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      “LTIP”), with all other terms and conditions of the LTIP and the
individual grant agreements relating to such outstanding awards remaining in
effect and applicable to such awards; and     4.   An exception will be made for
payment of the Performance Units associated with the 2007 LTIP award. Instead of
following the payment terms of the grant agreement, payment will be accelerated
and paid by April 14, 2008 for the number of Performance Units that vest
pro-rata according to the terms of item 3. The value of each vested unit will be
one dollar ($1).

By your signature below, you acknowledge and agree to the terms and conditions
of this letter agreement.
Sincerely,
/s/ Ann A. Johnston
Ann A. Johnston
Executive Vice President, Human Resources
Reynolds American, Inc.
Acknowledged and accepted this      5th      day of      December     , 2007
/s/ Dianne M. Neal
Dianne M. Neal

 

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Non-Competition, Non-Disclosure of Confidential Information,
Commitment to Provide Assistance and General Release Agreement
I, Dianne M. Neal, acknowledging a Retention Bonus in the amount of $180,000 and
other payments made to me as consideration for entering into this
Non-Competition, Non-Disclosure of Confidential Information, Commitment to
Provide Assistance Agreement and General Release, do hereby agree to each of the
following:

  •   I will not, without the prior written consent of Reynolds American Inc.
(“RAI”), use, divulge, disclose or make accessible to any other person, firm,
partnership or corporation or other entity any confidential information
pertaining to the businesses of RAI, R. J. Reynolds Tobacco Company, and/or any
of their affiliates (individually, a “Company and collectively, the
“Companies”), except when required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory authority over the
businesses of the Companies, or by any administrative body or legislative body
(including a committee thereof) with jurisdiction to order me to divulge,
disclose or make accessible such information. For purposes of this agreement,
“Confidential Information” shall mean non-public information concerning any of
the Companies’ data, strategic business plans, product development data (or
other proprietary product data), customer lists, marketing plans and other
proprietary information, except for specific items which have become publicly
available information (other than such items which I know have become publicly
available through a breach of fiduciary duty or any confidentiality agreement).
    •   I covenant and agree that:

  (a)   I will not directly or indirectly (whether as owner, partner,
consultant, employee, or otherwise), engage in any of the “Major Businesses” (as
defined below) in which any of the Companies are engaged, in the geographic area
of the U.S. and other country in which the Companies operate as of the day I
execute this agreement, for a period of eighteen (18) months following my last
day of employment; and     (b)   I will not, on my own behalf or on behalf of
any person, firm or company, directly or indirectly for a period of twelve
(12) months following the last day of my employment, offer employment to any
person who was, at the time of my last day of my employment, employed by any of
the Companies.

 

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  (c)   For purposes of this agreement, “Major Businesses” means the major
business segments of any of the Companies dealing in the manufacture, sale or
marketing of tobacco and smoking products or products deemed to be in
competition with smoking products, including but not limited to those developed,
marketed or intended to be used as part of smoking cessation programs, or as
tobacco or smoking substitutes.

  •   I and the Companies agree that this covenant not to compete is a
reasonable covenant under the circumstances, and further agree that if in the
opinion of any court of competent jurisdiction, such restraint is not reasonable
in any respect, such court shall have the right, power and authority to excise
or modify such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the covenant as so
amended.     •   I agree that:

  (a)   I will personally provide reasonable assistance and cooperation to the
Companies in activities related to the prosecution or defense of any pending or
future lawsuits or claims involving any of the Companies.     (b)   I will
promptly notify RAI if I receive any requests from anyone other than an employee
or agent of one of the Companies for information regarding any of the Companies
which could reasonably be construed as being proprietary, non-public or
confidential or if I become aware of any potential claim or proposed litigation
against any of the Companies.     (c)   I will refrain from providing any
information related to any claim or potential litigation against any of the
Companies to any non-Company representatives without RAI’s written permission or
being required to provide information pursuant to legal process.     (d)   If
required by law to provide sworn testimony regarding any matter related to any
of the Companies, I will consult with and have legal counsel designated by RAI
present for such testimony. RAI will be responsible for the costs

 

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      of such designated counsel, and I will bear no cost for same.     (e)   If
I am required by law to provide sworn testimony regarding any matter related to
any of the Companies, and if I require legal counsel to represent and protect my
interests (in addition to RAI’s designated legal counsel provided for under
subparagraph (d) herein), RAI will reimburse me for any legal expenses
(including, but not limited to, the costs of any attorney reasonably acceptable
to me and RAI, which acceptance by RAI shall not be unreasonably withheld) and
other out-of-pocket expenses I may incur in relation to such testimony.     (f)
  I will cooperate with the Companies’ attorneys to assist in their efforts,
especially on matters I have been privy to, holding all privileged
attorney-client matters in strictest confidence unless ordered to do otherwise
by a court of competent jurisdiction or a committee of the Congress of the
United States or of a state legislature. I understand that I will be reimbursed
for travel, food, lodging or similar out-of-pocket expense incurred at the
request of any of the Companies in discharging any of my obligations under this
agreement.     (g)   Nothing in sentences a-f of the above paragraph is intended
to apply to governmental or judicial investigations, including but not limited
to an investigation by any agency or department of the federal or state
government, any hearing before a committee of the Congress of the United States
or of a state legislature, any investigation or proceeding by or of a special
prosecutor, or any proceeding brought before a grand jury; provided, however,
RAI will reimburse me for legal expenses including, but not limited to, the cost
of any attorney reasonably acceptable to RAI and other out-of-pocket expenses if
I am compelled to appear in a governmental or judicial investigation.

  •   I agree that any breach of the covenants contained in this agreement would
irreparably injure the Companies. Accordingly, the Companies may, in addition to
pursuing any other remedies that they may have in law or in

 

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      equity, obtain an injunction against me from any court having jurisdiction
over the matter, restraining any further violation of this agreement by me.    
•   IN CONSIDERATION AND IN EXCHANGE OF THE RETENTION BONUS AND OTHER PAYMENTS,
I VOLUNTARILY, KNOWINGLY AND WILLINGLY RELEASE AND FOREVER DISCHARGE THE COMPANY
(REYNOLDS AMERICAN, INC.), ITS SUBSIDIARIES AND AFFILIATES, TOGETHER WITH THEIR
RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS, AND EACH OF
THEIR PREDECESSORS, SUCCESSORS AND ASSIGNS, FROM ANY AND ALL CHARGES,
COMPLAINTS, CLAIMS, PROMISES, AGREEMENTS, CONTROVERSIES, CAUSES OF ACTION AND
DEMANDS OF ANY NATURE WHATSOEVER THAT I OR MY EXECUTORS, ADMINISTRATORS,
SUCCESSORS OR ASSIGNS EVER HAD, NOW HAVE OR HEREAFTER CAN, SHALL OR MAY HAVE
AGAINST THEM BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER HAVING ACCRUED
AND/OR ARISING AT THE TIME I SIGN THIS AGREEMENT. I FURTHER AGREE THAT I WILL
NOT SEEK OR BE ENTITLED TO ANY AWARD OF EQUITABLE OR MONETARY RELIEF IN ANY
PROCEEDING OF ANY NATURE BROUGHT ON MY BEHALF ARISING OUT OF ANY OF THE MATTERS
RELEASED BY THIS PARAGRAPH. THIS RELEASE INCLUDES, BUT IS NOT LIMITED TO ANY
RIGHTS OR CLAIMS RELATING IN ANY WAY TO MY EMPLOYMENT RELATIONSHIP WITH THE
COMPANY, RESIGNATION OR THE TERMINATION THEREOF, OR UNDER ANY STATUTE, INCLUDING
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, AS AMENDED, THE AMERICANS WITH DISABILITIES ACT,
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, (“ERISA”) OR ANY
OTHER FEDERAL, STATE OR LOCAL LAW, INCLUDING BUT NOT LIMITED TO, ANY SUCH LAW
DEALING WITH DISCRIMINATION BASED ON SEX, RACE, COLOR, NATIONAL ORIGIN,
RELIGION, DISABILITY, VETERAN STATUS OR AGE.     •   I ALSO AGREE THAT THIS
GENERAL RELEASE INCLUDES CLAIMS BASED ON THEORIES OF CONTRACT, WHETHER ACTUAL OR
IMPLIED, TORT, PUBLIC POLICY, WHETHER BASED IN COMMON LAW OR OTHERWISE. I
UNDERSTAND THAT THIS GENERAL RELEASE COVERS ALL CLAIMS THAT HAVE ACCRUED OR
ARISEN BY THE TIME I EXECUTE THIS GENERAL RELEASE, INCLUDING BOTH THOSE CLAIMS
THAT I KNOW ABOUT AND THOSE THAT I MAY NOT KNOW ABOUT.

 

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  •   WITH RESPECT TO ANY CHARGES OR COMPLAINTS THAT HAVE BEEN FILED OR MAY BE
FILED CONCERNING EVENTS OR ACTIONS RELATED TO MY EMPLOYMENT, RESIGNATION OR
TERMINATION OF EMPLOYMENT, I WAIVE AND RELEASE ANY RIGHT TO RECOVER IN ANY
LAWSUIT OR PROCEEDING BROUGHT BY ANY PERSON, ENTITY OR ADMINISTRATIVE AGENCY ON
MY BEHALF OR WHICH INCLUDES ME IN A CLASS.     •   By signing this Agreement, I
represent that I have not commenced any proceeding against the Company in any
forum (administrative or judicial) concerning my employment and my decision to
resign.     •   The Company advised me to consult with an attorney of my
choosing prior to signing this Agreement. I understand that I have the right and
have been given the opportunity to review this Agreement, specifically the
release provisions, with an attorney. I have entered into and signed this
Agreement freely, knowingly and voluntarily on my own behalf, and also on the
behalf of any heirs, agents, representatives, successors, or assigns.     •   I
acknowledge I have had at least twenty-one (21) days to consider the terms of
this Agreement and that after I sign this agreement I have a period of seven (7)
consecutive calendar days to revoke this agreement, and after such seven
(7) days it becomes final.     •   This Agreement shall be construed,
interpreted and governed in accordance with the laws of the State of North
Carolina and the United States of America without reference to rules relating to
conflicts of law. All provisions and portions of this Agreement are severable.
If any provision or portion of this Agreement or the application of any
provision or portion of this Agreement to any person, to any circumstance, or to
any claims is determined to be invalid or unenforceable to any extent for any
reason, the remaining provisions and portions of this Agreement shall be
unaffected and shall continue to be enforceable to the fullest extent permitted
by law.

Accepted, understood and agreed:

       

 
   
Dianne M. Neal
  Date