Exhibit 10.37



Name of the Optionee:                    Number of Shares for Which
                                         Option may be Exercised:
Charles M. Harper                                  150,000

Grant Date: December 31, 1995

                        RJR NABISCO HOLDINGS CORP. 
                       1990 LONG TERM INCENTIVE PLAN 
                    NON-QUALIFIED STOCK OPTION AGREEMENT

                                WITNESSETH:

                                 ARTICLE I

                              GRANT OF OPTION 

          SECTION 1.1 Grant of Option.
                      ---------------

          Pursuant to the provisions of the RJR Nabisco Holdings Corp.
1990 Long Term Incentive Plan (the "Plan"), and for good and valuable
consideration, on and as of the date hereof(the "Grant date") RJR Nabisco
Holdings Corp. ("Holdings"), in consideration of Optionee's agreement to
purchase the Purchased Stock set forth in the Employment Agreement dated
May 27, 1993, as amended and restated as of December 5, 1995, by and among
Holdings, RJR Nabisco, Inc. and the Optionee (the "Employment Agreement"),
irrevocably grants (the "Grant") to the Optionee above named the option to
purchase any part or all of an aggregate of the number of shares set forth
on the first page hereof of its Common Stock upon the terms and conditions
set forth in this Agreement and has directed the undersigned officer to
execute this Agreement. A copy of the Plan is incorporated by reference and
made a part of this Agreement with the same effect as if set forth in the
Agreement itself. A copy of the Employment Agreement is incorporated by
reference and made a part of this Agreement with the same effect as if set
forth in the Agreement itself. All capitalized terms used below shall have
the meaning set forth in the Plan or the Employment Agreement, as the case
may be, unless the context requires a different meaning.

          SECTION 1.2 Exercise Price.
                      --------------

          The exercise price of the shares of Common Stock covered by the
Option shall be $30.75 per share without commission or other charge.



<PAGE>



          SECTION 1.3 Consideration to Holdings.
                      -------------------------

          In consideration of the granting of this Option by Holdings, the
Optionee agrees to render faithful and efficient services to the
Corporation, with such duties and responsibilities the Corporation shall
from time to time prescribe, consistent with the terms of the Employment
Agreement. Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue in the employ of the Corporation or shall
interfere with or restrict in any way the rights of the Corporation, which
are hereby expressly reserved, to terminate the employment of the Optionee
at any time for any reason whatsoever, with or without cause, subject to
the terms of the Employment Agreement.

          SECTION 1.4 Adjustments in Option.
                      ---------------------

          a)   In the event of any change in the outstanding Common Stock
by reason of a stock split, spin-off, stock dividend, stock combination or 
reclassification, recapitalization or merger, Change of Control, or similar 
event, the Committee may adjust appropriately the number of Shares subject 
to the Plan and available for or covered by Grants and Share prices related
to outstanding Grants and make such other revisions to outstanding Grants 
as it deems are equitably required.

          b)   In the event of a Change of Control (as defined the Plan)
the Option shall be governed by the terms of the Plan.



                                 ARTICLE II

                            PERIOD OF EXERCISABILITY 

                SECTION 2.1 Commencement of Exercisability. 
                            ------------------------------

              The Option shall become exercisable as follows:

                                           Percentage of Total Shares As
Date Option Becomes Exercisable            to Which Option is Exercisable
-------------------------------            ------------------------------

Grant Date through May 30, 1996                          0%
May 31, 1996 - May 30, 1997                              50%
May 31, 1997 - thereafter                                100%

      (a)  Notwithstanding the foregoing, the Option shall immediately
           become exercisable as to all shares following the termination of
           employment of the Optionee for any reason including Retirement,
           Death or Disability (all as defined in the Employment
           Agreement); provided, however, the Option



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<PAGE>



          shall not become exercisable as to all shares following a
          termination of employment by Holdings for Cause or a termination
          of employment by the Optionee without Good Reason.

     (b)  "Termination of employment" as used herein means termination from
          active employment; it does not mean termination of payment or
          benefits at the end of salary continuation or other form of
          severance or pay in lieu of salary.

          SECTION 2.2 Expiration of Option.
                      --------------------

          The option may not be exercised to any extent by Optionee and
shall expire or terminate after the first to occur to the following events:

     (a)  The fifteenth anniversary of the Grant date; or

     (b)  Immediately upon the Optionee's termination of employment for
          Cause; or

     (c)  If applicable, the date the Option is terminated pursuant to the
          Employment Agreement.



                                ARTICLE III

                            EXERCISE OF OPTION 

                 SECTION 31.1  Person Eligible to Exercise.
                               ---------------------------

          During the lifetime of the Optionee, only the Optionee may
exercise the Option or any portion thereof. After the death of the
Optionee, any exercisable portion of the Option may, prior to the time when
the option becomes unexercisable and expires under Section 2.2, be
exercised by his personal representative or by any person empowered to do
so under the Optionee's will or under the then applicable laws of descent
and distribution.

          SECTION 3.2 Partial Exercise.
                              --------

          Any exercisable portion of the option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time
prior to the time when the Option or portion thereof becomes unexercisable
and expires under Section 2.2; provided, however, that any partial exercise
shall be for whole shares only.



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<PAGE>



          SECTION 3.3 Manner of Exercise.
                      ------------------

          The Option, or any exercisable portion thereof, may be exercised
solely by delivering to the Corporate Secretary of Holdings (the
"Secretary") or his office all of the following prior to the time when the
Option or such portion becomes unexercisable under Section 2.2:

     (a)  Notice in writing signed by the Optionee or the other person then
          entitled to exercise the Option or portion thereof, stating that
          the Option or portion thereof is thereby exercised, such notice
          complying with all applicable rules established by the Committee;

     (b)  Full payment by;

          (i)  tender to Holdings of cash for the full purchase price of the
               shares with respect to which such Option or portion thereof is
               exercised;
     
         (ii)  The unsecured, demand borrowing by Optionee from Holdings on an
               open account maintained solely for this purpose in the amount of
               the full exercise price together with the instruction from
               Optionee to sell the shares exercised on the open market through
               a duly registered broker-dealer with which Holdings makes an
               arrangement for the sale of such shares under the Plan. This
               method is known as the "broker-dealer exercise method" and is
               subject to the terms and conditions set forth herein, in the Plan
               and in guidelines established by the Committee. The option shall
               be deemed to be exercised simultaneously with the sale of the
               shares by the broker-dealer. If the shares purchased upon the
               exercise of an Option or a portion thereof cannot be sold for a
               price equal to or greater than the full exercise price plus
               direct costs of the sales, then there is no exercise of the
               Option. Election of this method authorizes Holdings to deliver
               shares to the broker-dealer and authorizes the broker-dealer to
               sell said shares on the open market. The broker-dealer will remit
               proceeds of the sale to Holdings which will remit net proceeds of
               the sale to Holdings which will remit net proceeds to Optionee
               after repayment of the borrowing, deduction of costs, if any, and
               withholding of taxes. Optionee's borrowing from Holdings on an
               open account shall be a personal obligation of Optionee which
               shall bear interest at the published Applicable Federal Rate
               (AFR) for short-term loans and shall be payable upon demand by
               Holdings. Such borrowing may be authorized by telephone or other
               telecommunications acceptable to Holdings. Upon such borrowing
               and the exercise of the Option or portion thereof, title to the
               shares shall pass to the Optionee whose election hereunder shall
               constitute instruction to Holdings to register the shares in the
               name of the broker-dealer or its nominee. Holdings reserves the
               right to discontinue this broker-dealer exercise method at



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<PAGE>



          any time for any reason whatsoever. Optionee agrees that if this
          broker-dealer exercise method under this Paragraph 3.3 (b)(ii)
          hereof is used, Optionee promises unconditionally to pay Holdings
          the full balance in his open account at any time upon demand.
          Optionee also agrees to pay interest on the account balance at
          the AFR for short-term loans from and after demand.

     (c)  Full payment to Holdings of all amounts which, under federal,
state or local law, it is required to withhold upon exercise of the
Option; and

     (d)  In the event the Option or portion thereof shall be exercised
pursuant to Section 3.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option.

     (e)  This Option shall not be exercisable prior to six months after
the Date of Grant.


          SECTION 3.4 Conditions of Issuance of Stock Certificates.
                      --------------------------------------------

          The shares of Common Stock deliverable upon the exercise of the
Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by
Holdings. Such shares shall be duly and validly issued, fully paid and
nonassessable. Holdings shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the exercise
of the Option or portion thereof prior to fulfillment of all of the
following conditions:

     (a)  The admission of such shares to listing on all stock exchanges on
which such class of Common Stock is then listed; and

     (b)  The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental
regulatory body, which the Committee shall deem necessary; and

     (c)  The obtaining of approval or other clearance from any state of
federal governmental agency which the Committee shall determine to be
necessary; and

     (d)  The payment to Holdings of all amounts which, under federal,
state or local law, it is required to withhold upon exercise of the Option;
and

     (e)  The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.



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<PAGE>



          SECTION 3.5 Rights as Stockholder.
                      ---------------------

          The holder of the Option shall not be, nor have any of the rights
or privileges of, a stockholder of Holdings in respect of any shares
purchasable upon the exercise of the Option or any portion thereof unless
and until certificates representing such shares shall have been issued by
Holdings to such holder.


                                 ARTICLE IV

                               MISCELLANEOUS 

          SECTION 4.1 Administration.
                      --------------

     The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Optionee, Holdings and all other interested persons, subject to the terms
of the Employment Agreement. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith
with respect to the Plan or this Agreement. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan and this Agreement.

          SECTION 4.2 Option Not Transferable.
                      -----------------------

          Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or obligations of the
Optionee or his successors in interest or shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or
any other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other
legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided,
however, that this Section 4.2 shall not prevent transfers by will or by,
the applicable laws of descent and distribution.

          SECTION 4.3 Shares to Be Reserved; Other Covenants.
                      --------------------------------------

          .1  Holdings shall at all times during the term of the Option
reserve and keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement; and

          .2  Holdings shall take all actions necessary to satisfy the
conditions set forth in clauses (a), (b) and (c) of Section 3.4 hereof so
that such conditions shall remain satisfied so long as any of the Options
remain outstanding.



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<PAGE>



          SECTION 4.4 Notices.
                      -------

          Any notice to be given under the terms of this Agreement to
Holdings shall be addressed to Holdings in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
appearing beneath his signature on the final page of this Agreement. By a
notice given pursuant to this Section 4.4, either party may hereafter
designate different address for notices to be given to him. Any notice
which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed Holdings of his status and address
by written notice under this Section 4.4. Any notice shall have been deemed
duly given when enclosed in a properly sealed envelope addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.

          SECTION 4.5 Termination for Cause.
                      ---------------------

          For purposes of this Agreement, an Optionee's employment shall be
deemed to have been terminated for "Cause" only as such term is defined in
the Employment Agreement.

          SECTION 4.6 Titles.
                      ------

          Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.

          SECTION 4.7 Applicability of Plan and the Employment Agreement.
                      --------------------------------------------------

          The Option and the shares of Common Stock issued to the Optionee
upon exercise of this Option shall be subject to all of the terms and
provisions of the Plan and the Employment Agreement, to the extent
applicable to this Option and such shares. In the event of any conflict
between the Plan, this Agreement and/or the Employment Agreement, the terms
of the Employment Agreement shall control. Notwithstanding anything to the
contrary contained herein, this Agreement shall be null and void and of no
effect unless the Optionee has purchased the Purchased Stock pursuant to
the Employment Agreement, unless such purchase is not consummated for
reasons beyond the control of Optionee.

          SECTION 4.8 Amendment.
                      ---------

          This Agreement may be amended only by a writing executed by the
parties hereto which specifically states that it is amending this
Agreement.



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<PAGE>



          SECTION 4.9 Pronouns.
                      --------

          The masculine pronoun shall include the feminine and neuter, and
the singular the plural, where the context so indicates.

          SECTION 4.10 GOVERNING LAW.
                       -------------

          THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE INTERPRETATION,
VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT REGARDLESS OF 
THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF LAWS.


          SECTION 4.11 Jurisdiction.
                       ------------

          Any suit, action or proceeding against the Optionee with respect
to this Agreement, or any judgment entered by any court in respect of any
thereof, may be brought in any court of competent jurisdiction in the State
of Delaware or New York, as Holdings may elect in its sole discretion, and
the Optionee hereby submits to the non-exclusive jurisdiction of such
courts for the purpose of any such suit, action, proceeding or judgment. By
the execution and delivery of this Agreement, the Optionee appoints The
Prentice-Hall Corporation at its office at 15 Columbus Circle, New York, NY
10023-7773 as his agent upon which process may be served in any such suit,
action or proceeding. Service of process upon such agent, together with
notice of such service given to the Optionee in the manner provided in
section 4.4. hereof, shall be deemed in every respect effective service of
process upon him in any suit, action or proceeding. Nothing herein shall in
any way be deemed to limit the ability of Holdings to serve any such writs,
process or summonses in any other manner permitted by applicable law or to
obtain jurisdiction over the Optionee, in such other manner permitted by
applicable law or to obtain jurisdiction over the Optionee, in such other
jurisdictions, and in such manner, as may be permitted by applicable law.
The Optionee hereby irrevocably waives any objections which he may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of Delaware or New York, and hereby
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum.
Holdings hereby submits to the jurisdiction of such courts for the purpose
of any such suit, action or proceeding.

          SECTION 4.12 Taxes.
                       -----

          Any taxes required by federal, state, or local laws to be
withheld by the Company (i) on exercise by the Optionee of the Option for
Common Stock, or (ii) at the time an election, if any, is made by the
Optionee pursuant to Section 83(b) of the Internal Revenue Code, as
amended, shall be paid to the Company before delivery of the Common Stock
is made to the Optionee. When the Option is exercised under the broker-
dealer



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<PAGE>



exercise method, the full amount of any taxes required to be withheld by
the Company on exercise of stock options shall be deducted by the Company
from the proceeds.

          SECTION 4.13 Signatures.
                       ----------

          This Agreement may be executed by Holdings by manual or facsimile
signature of any duly authorized officer of Holdings.

          SECTION 4.14 Counterparts.
                       ------------

          This Agreement may be executed in two or more counterparts.






          IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto.

                                   RJR NABISCO HOLDINGS, CORP.


                                   By /s/                       
                                      --------------------------


/s/ Charles M. Harper    
-------------------------
    Charles M. Harper


Optionee's Taxpayer Identification Number: 



     ###-##-####          
--------------------------



Optionee's Address:

Suite 1500
One Central Park Plaza 
Omaha, Nebraska 68102

Dated: December 31, 1995




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