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                                                                   Exhibit 10.53






October 25, 1999

Mr. Andrew J. Schindler

                  Re:  Change of Control
                       -----------------

Dear Andy:

         In addition to your other contractual arrangements with R.J. Reynolds
Tobacco Holdings, Inc. (the "Company") and its affiliates, in the event of a
Change of Control of the Company (as such Change of Control is defined in the
Company's 1999 Long Term Incentive Plan) (the "1999 LTIP"), the following shall
occur:

         1.       The Company shall hold you harmless from any golden parachute
                  tax imposed by any federal, state or local taxing authority as
                  a result of any of the payments made from the Company. In the
                  event that it is determined that any payment or distribution
                  by the Company to or for you (a "Payment") would be subject to
                  the excise tax imposed by Section 4999 of the Internal Revenue
                  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 shall be entitled to receive from the
                  Company an additional payment ("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 in any protester appeal by the Company
                  in the event of the imposition of golden parachute tax.

         2.       If you are terminated without Cause (as defined in your Tandem
                  Restricted Stock/Stock Option Agreements issued under the 1999
                  LTIP) following such Change of Control, the Company shall 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) unless your claim is found by an arbitral tribunal of
                  competent jurisdiction to have been frivolous.

         3.       During the 24-month period following a Change of Control, you
                  shall be entitled to terminate your employment for Good Reason
                  and receive the severance arrangements under your contractual
                  arrangements with the Company as if you had been terminated by
                  the Company without Cause. For purposes of this Agreement,
                  "Good Reason" shall mean, without your express written
                  consent, any of the following occurring following a Change of
                  Control:


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                           A. 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;

                           B. 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;

                           C. 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 Company's 1999 LTIP
                  and the Company's Annual Incentive Award Plan (the "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;

                           D. the taking of any action which would directly or
                  indirectly materially reduce any of the benefits to be
                  provided under the retirement or savings plans of the Company
                  (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 the Company's practice with respect to you as in
                  effect at the time of the Change of Control;

                           E. any purported termination of your employment which
                  is not effected pursuant to a written notice of termination
                  given to you not less than thirty (30) or more than sixty (60)
                  days prior to the date of termination; provided further that
                  for purposes of this Agreement, no such purported termination
                  shall be effective;

                           F. 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

                           G. requiring you to be based at any office or
                  location more than 35 miles 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.

         4.       In consideration of this Agreement, you and the Company agree
                  that this Agreement supersedes and replaces in its entirety
                  the Agreement between you and RJR Nabisco Holdings Corp. and
                  RJR Nabisco, Inc. dated December 5, 1995.


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         Please indicate your acceptance of the terms of this Agreement by
signing this letter below and returning it to Bob Gordon. A copy will be
provided to you.


                                  R.J. REYNOLDS TOBACCO HOLDINGS, INC.


                                  By: /s/ Robert R. Gordon, Jr.
                                      ------------------------------------------
                                      Robert R. Gordon, Jr.
                                      Executive Vice President - Human Resources



Agreed as of this ___ day
of October, 1999.

     /s/ Andrew J. Schindler
-------------------------------------
         Andrew J. Schindler