Exhibit 10.6

REYNOLDS AMERICAN INC

[                    , 200  ]

[Name]
[Street]
[City, State, Zip]

Re: Special Severance Benefits and Change of Control Protections

          As consideration for your entering into the Non-Competition,
Non-Disclosure of Confidential Information and Commitment to Provide Assistance
Agreement, attached hereto as Exhibit A and made a part of this document, you
will be eligible for special severance and certain change of control protections
from Reynolds American Inc. (the “Company”), the terms and conditions of which
are set forth below.

1.      Special Severance Benefits.

  (a)          If, during the course of your employment with the Company or any
of its affiliates, your employment is involuntarily terminated for any reason
other than Cause (as defined in the Company’s Long Term Incentive Plan (the
“LTIP”)) you will receive two (2) years’ pay (defined as base pay and target
bonus at the time of the termination of your employment), payable over three
(3) years, and full employee benefits coverage for three (3) years, and if you
participate in an executive supplemental payment plan at the time of your
termination of employment, coverage under the executive supplemental payment
plan according to its terms and conditions for three (3) years. These special
severance benefits replace any compensation or benefits under the Reynolds
American Salary and Benefits Continuation Program (“SBC”). It is intended that
you will not receive any less pay or benefits than provided under the SBC
obligation; provided, however, that any payment under this Section 1(a) is
conditioned upon your execution of the release described in Section 3(a). In the
event that you do not execute the release described in Section 3(a), you will
not be entitled to any benefits under this agreement and will be entitled only
to those benefits provided under the SBC obligation.     (b)          For
purposes of this agreement, your employment shall be deemed to have been
terminated for “Cause” if the termination of employment results from your: (i)
criminal conduct; (ii) deliberate and continual refusal to perform employment
duties on substantially a full time basis; (iii) deliberate and continual
refusal to act in accordance with any specific lawful instructions of an
authorized officer or employee more senior than you or a majority of the Board
of Directors of the Company; or (iv) deliberate misconduct which could be
materially damaging to the Company or any of its business operations without a
reasonable good faith belief by you that such conduct was in the best interests
of the Company. A termination of employment shall not be deemed for Cause
hereunder unless the senior human resources executive of the Company shall
confirm that any such termination of employment is for Cause. Any voluntary
termination of employment by you in anticipation of an involuntary termination
of employment for Cause shall be deemed to be a termination of employment for
Cause.     (c)          Notwithstanding any provision to the contrary contained
herein, in the event that you are deemed to be a “Key Employee” of the Company
(as defined below), to the extent required under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated
thereunder, payment of your severance benefits will not commence before the date
which is at least six (6) months after the date of your separation from service
with the Company or any of its affiliates (or, if earlier, the date of your
death). Any cash payment delayed under this Section 1(c) will accrue interest
during the period the payment is delayed equal to the average prime rate of
JPMorgan Chase & Co. for the six-month period.

 

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  (d)          For purposes of this agreement, a “Key Employee” means an
employee of the Company who is a key employee within the meaning of Section 409A
of the Code and the regulations promulgated thereunder.     (e)  
       Involuntary termination of your employment without Cause will be deemed
to have occurred if you voluntarily terminate your employment after the
occurrence of one (1) or more of the following events:

  (i)          the total amount of your base salary and targeted awards under
the LTIP and the Company’s Annual Incentive Award Plan (the “AIAP”), or
successor plans, is at any time reduced by more than twenty percent (20%)
without your consent; provided, however, that nothing herein will be construed
to guarantee your target award if performance is below target;     (ii)  
       your responsibilities are substantially reduced in importance without
your consent; or     (iii)          you are at any time required as a condition
of continued employment to become based at any office or location more than the
minimum number of miles required by the Internal Revenue Service for you to
claim a moving expense deduction, from your then current place of employment
without your consent, except for travel reasonably required in the performance
of your responsibilities.         Unless you provide written notification of
your non-consent to any of the events described in (i), (ii) or (iii) above
within ninety (90) days after the occurrence of any such event, you will be
deemed to have consented to the occurrence of such event or events and no deemed
involuntary termination will occur. If you provide written notice of your
non-consent to any of the events described in (i), (ii) or (iii) above within
ninety (90) days after the occurrence of any such events, your employment by the
Company or any of its affiliates will be deemed to have been involuntarily
terminated ninety (90) days after receipt of such written notice by the Company
or any of its affiliates.

  (f)          For the purpose of calculating benefits under the Company’s
non-qualified defined benefit pension plans, you will be deemed to be paid
throughout the three-year special severance pay period at a rate equal to your
base pay and target bonus immediately prior to the involuntary termination of
your employment. For purposes of life insurance and disability, benefits will be
based on your base pay in effect immediately prior to the involuntary
termination of your employment.

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2.          Change of Control. In the event of a Change of Control of the
Company (as such Change of Control is defined in the LTIP), or any successor
plan, the following will occur:

  (a)          The Company will hold you harmless from any golden parachute tax
imposed by any federal, state or local taxing authority as a result of any
payments made by the Company or any of its affiliates. In the event that it is
determined that any payment or distribution by the Company or any of its
affiliates to or for you (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then you will be
entitled to receive from the Company or any of its affiliates an additional
payment (an “Excise Tax Adjustment Payment”) in an amount such that after
payment by you of all applicable federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed upon the Excise Tax
Adjustment Payment, you retain an amount of the Excise Tax Adjustment Payment
equal to the Excise Tax imposed upon the Payments. You agree to cooperate fully
with the Company and its affiliates in any protester appeal by the Company or
any of its affiliates in the event of the imposition of any golden parachute
tax.     (b)          If your employment is terminated without Cause following
such Change of Control, the Company or any of its affiliates will pay to you as
incurred all legal and accounting fees and expenses incurred by you as a result
of such termination (including all such fees and expenses, if any, in seeking to
obtain or enforce any right or benefit provided by any compensation-related
plan, agreement or arrangement of the Company or any of its affiliates), unless
your claim is found by an arbitral tribunal of competent jurisdiction to have
been frivolous.     (c)          During the 24-month period following a Change
of Control, you will be entitled to terminate your employment for Good Reason
and receive the severance benefits set forth in Section 1 of this agreement as
if you had been involuntarily terminated by the Company or any of its affiliates
without Cause.     (d)          For purposes of this agreement, “Good Reason”
means, without your express written consent, any of the following events
occurring after a Change of Control:

  (i)          a material reduction in your duties, a material diminution in
your position or a material adverse change in your reporting relationship from
those in effect immediately prior to the Change of Control;     (ii)          a
reduction in your pay grade or bonus opportunity as in effect immediately prior
to the Change of Control or as the same may thereafter be increased from time to
time during the term of this agreement;

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  (iii)          the failure to continue in effect any compensation plan in
which you participate at the time of the Change of Control, including but not
limited to the LTIP and AIAP, or any substitute plans adopted prior to the
Change of Control, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan providing you with substantially similar
benefits) has been made with respect to such plan in connection with the Change
of Control, or the failure to continue your participation therein on
substantially the same basis, both in terms of the amount of benefits provided
and the level of your participation relative to other participants, as existed
at the time of the Change of Control;     (iv)          the taking of any action
which would directly or indirectly materially reduce any of the benefits to be
provided to you under the retirement or savings plans of the Company or any of
its affiliates (unless such reduction is required by law) or deprive you of any
material fringe benefit enjoyed by you at the time of the Change of Control, or
the failure to provide you with the number of paid vacation days to which you
are entitled on the basis of your employer’s practice with respect to you as in
effect at the time of the Change of Control;     (v)          any material
breach by the Company or its affiliates of any provision of this agreement or
any other of your contractual arrangements with the Company or its affiliates;
or     (vi)          requiring you to be become based at any office or location
more than the minimum number of miles required by the Code for you to claim a
moving expense deduction, from the office or location at which you were based
immediately prior to such Change of Control, except for travel reasonably
required in the performance of your responsibilities.

3.      Miscellaneous.

  (a)          In further consideration for these special severance and change
of control benefits, and should an involuntary termination of your employment
ever occur, the Company will expect your cooperation in transitioning your
responsibilities, and, prior to the payment of any benefits under this
agreement, you will execute a letter containing a release of claims and a
reaffirmation of your Non-Competition, Non-Disclosure of Confidential
Information and Commitment to Provide Assistance Agreement each in a form
reasonably satisfactory to the Company with all period for revocation expired.  
  (b)          You acknowledge and agree that nothing contained in this
agreement obligates the Company or any one of its affiliates (i) to employ you
for any specific term or (ii) to grant you any short-term or long-term incentive
awards under the plans and programs of the Company or any of its affiliates.    
(c)          This agreement is intended to comply with Section 409A of the Code
and will be construed and interpreted in accordance with such intent. This
agreement

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      may be amended from time to time by the Company to effect required
compliance under Section 409A of the Code as additional guidance is issued.    
(d)          Except as provided in Section 3(c), this agreement may not be
modified, amended or waived in any manner other than by an instrument in writing
signed by you and the Company.     (e)          This agreement shall be
governed, controlled and determined in accordance with the applicable provisions
of federal law and, to the extent not preempted by federal law, the laws of the
State of North Carolina, without regard to the conflicts of law rules of such
state.

          Please indicate your acceptance of the terms of this agreement by
signing this agreement below and returning it to the Company. A copy will be
provided to you.

     

  REYNOLDS AMERICAN INC.
 
   

  By:                                                             
 
   

  Its:                                                             

Accepted and agreed to as of this                    day

of                                         , 200  

                                                                                

[Employee]

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Exhibit A

Non-Competition,
Non-Disclosure of Confidential Information,
And
Commitment to Provide Assistance Agreement

I, [Name], acknowledging the special severance benefits and certain change of
control protections made available to me as consideration for entering into this
Non-Competition, Non-Disclosure of Confidential Information and Commitment to
Provide Assistance Agreement, 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 (collectively, the “Companies”), except (a) while employed
by any of the Companies in the businesses of and for the benefit of the
Companies or (b) 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).     •  
       During the period commencing on the first date of my employment with any
one (1) of the Companies and ending three (3) years after the date of the
termination of my employment for any reason from any of the Companies, 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; 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 termination of my
employment, offer employment to any person who was, at the time of the
termination 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 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

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      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.

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  •   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 equity, obtain an
injunction against me from any court having jurisdiction over the matter,
restraining any further violation of this agreement by me.

Accepted and agreed to:

     
 
   
Employee Name
  Date

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