Exhibit 10.85



             STOCK OPTION PLAN FOR DIRECTORS AND KEY EMPLOYEES 

                                     OF

                RJR NABISCO HOLDINGS CORP. AND SUBSIDIARIES 

            (As Amended and Restated Effective December 5, 1995)



     RJR Nabisco Holdings Corp., a Delaware corporation, hereby adopts this
amendment and restatement of the Stock Option Plan for Directors and Key
Employees of RJR Nabisco Holdings Corp. and Subsidiaries. The purposes of
this Plan are as follows:

          (1)  To further the growth, development and financial success of
Holdings by providing additional incentives to certain of its Directors and
Key Employees who have been or will have or be given responsibility for the
management or administration of Holdings' business affairs by assisting
them to become owners of capital stock of Holdings and thus to benefit
directly from its growth, development and financial success.

          (2)  To enable Holdings to obtain and retain the services of, and
business relationships with, the type of professional, technical and
managerial Employees and Directors considered essential to the long range
success of Holdings by providing and offering them an opportunity to become
owners of capital stock of Holdings under Options.


                                 ARTICLE I

                                DEFINITIONS
                                -----------

Section 1.1 - General
-----------   -------

          Whenever the following terms are used in this Plan they shall
have the meaning specified below unless the context clearly indicates to
the contrary.

Section 1.2 - Affiliated Director
-----------   -------------------

          "Affiliated Director" shall mean a Director who is an employee or
officer of an entity which owns at least 25% of the outstanding Common
Stock, or any affiliate thereof (other than Holdings or any Subsidiary).



<PAGE>



Section 1.3 - Board
-----------   -----

           "Board" shall mean the Board of Directors of Holdings.

Section 1.4 - Code
-----------   ----

          "Code" shall mean the Internal Revenue Code of 1986, as amended.

Section 1.5 - Committee
-----------   ---------

          "Committee" shall mean the Compensation Committee of the Board or
any other committee appointed by the Board pursuant to Section 7.1.

Section 1.6 - Common Stock
-----------   ------------

          "Common Stock" shall mean the Common Stock, par value $0.01 per
share, of Holdings.

Section 1.7 - Director
-----------   --------

          "Director" shall mean a member of the Board.

Section 1.8 - Eligible Director
-----------   -----------------

          "Eligible Director" shall mean a Director who (i) has never been
an employee or officer of Holdings or any Subsidiary and (ii) has never
been an employee or officer of any entity which owns at least 25% of the
outstanding Common Stock, or any affiliate thereof.

Section 1.9 - Employee
-----------   --------

          "Employee" shall mean any employee (as defined in accordance with
the regulations and revenue rulings then applicable under Section 3401(c)
of the Code) of Holdings, or of any corporation which is then a Subsidiary,
whether such employee is so employed at the time this Plan is adopted or
becomes so employed subsequent to the adoption of this Plan or any other
person providing goods or services to Holdings or its subsidiaries, as the
Committee may determine in its discretion.

Section 1.10 - Holdings
------------   --------

          "Holdings" shall mean RJR Nabisco Holdings Corp., a Delaware
Corporation.



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<PAGE>



Section 1.11 - Option
------------   ------

          "Option" shall mean an option granted under the Plan to purchase
Common Stock. Options include only options which are not intended to be
"incentive stock options" under Section 422 of the Code.

Section 1.12 - Option Price
------------   ------------

          "Option Price" shall have the meaning given in Sections 4.2 and
5.2, as appropriate.

Section 1.13 - Optionee
------------   --------

          "Optionee" shall mean an Employee or Director to whom an Option
is granted under the Plan.

Section 1.14 - Plan
------------   ----

          "Plan" shall mean the Stock Option Plan for Directors and Key
Employees of RJR Nabisco Holdings Corp. and Subsidiaries.

Section 1.15 - Secretary
------------   ---------

          "Secretary" shall mean the Secretary of Holdings. 

Section 1.16 - Subsidiary
------------   ----------

          "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with Holdings if each of the corporations, or if
each group of commonly controlled corporations, other than the last
corporation in an unbroken chain then owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.



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<PAGE>



                                 ARTICLE II

                             SHARES SUBJECT TO PLAN
                             ----------------------

Section 2.1 - Shares Subject to Plan
-----------   ----------------------

          The shares of stock subject to Options shall be shares of Common
Stock. The aggregate number of shares of Common Stock which may be issued
upon exercise of Options shall not exceed 30,000,000.

Section 2.2 - Unexercised Options
-----------   -------------------

          If any Option expires or is canceled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration or cancellation may again
be optioned hereunder, subject to the limitations of Section 2.1.

                                ARTICLE III

                            GRANTING OF OPTIONS
                            -------------------

Section 3.1 - Eligibility
-----------   -----------

          Any Eligible Director, Affiliated Director, or key Employee of
Holdings or of any Subsidiary shall be eligible to be granted Options as
set forth in this Article III.

Section 3.2 - Granting of Options to Directors
-----------   --------------------------------

     (a)  Each Eligible Director who is elected to serve on the Board on or
after March 1, 1994 shall be granted an Option to purchase an aggregate
6,000 shares of Common Stock. Such Option shall be granted only once to
each Eligible Director as soon as practicable following the Director's
initial election to serve on the Board and shall be subject to the terms
and conditions set forth in Article IV.

     (b)  In addition to Options granted pursuant to Section 3.2(a), each
Eligible Director and each Affiliated Director shall receive an annual
grant of an Option to purchase the number of shares of Common Stock
determined pursuant to the following formula (rounded up to the next
multiple of 100):

                15,000  
               ---------
               (A x .37)



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<PAGE>



Where "A" equals the final closing price of Common Stock (as reported on the
New York Stock Exchange consolidated tape) on the date of grant, and the
factor ".37" is derived from the growth model projection for the value of
Common Stock.

     Such Option shall be granted annually on the date of such Director's
election or re-election to serve on the Board; provided, however, that the
grant for 1994 shall be made on October 4, 1994.

     All Options granted pursuant to this Section 3.21(b) shall be subject
to the terms and conditions set forth in Article IV.

Section 3.3 - Granting of Options to Employees
-----------   --------------------------------

          The Committee shall from time to time, in its absolute discretion:

          (i)  Determine which Employees are key Employees and select from
     among the key Employees (including those to whom Options have been
     previously granted under the Plan) such of them as in its opinion
     shall be granted Options; and

         (ii)  Determine the number of shares to be subject to such Options
     granted to such selected key Employees; and

        (iii)  Determine the terms and conditions of such Options,
     consistent with the Plan; and

         (iv)  Establish such conditions as to the manner of exercise of
     such Options as it may deem necessary, including but not limited to
     requiring Optionees to enter into agreements regarding transferability
     and other restrictions with respect to shares issuable upon exercise
     of such Options.

                                 ARTICLE IV

                         TERMS OF OPTIONS FOR DIRECTORS
                         ------------------------------

Section 4.1 - Formula Plan
-----------   ------------

          With respect to Options granted to Eligible Directors and
Affiliated Directors, the Plan is intended to qualify as a nondiscretionary
formula plan, within the meaning of Rule 16b-3 (and any other applicable
rule) promulgated by the Securities and Exchange Commission under Section
16(b) of



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<PAGE>



the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
such rule or its equivalent or successor is then in effect ("Rule 16b-3").
The terms of such Options shall be consistent with the terms of this
Article IV. To the extent that any provision of the Plan is not consistent
with the "formula plan" requirements of Rule 16b-3, then such provision
shall not apply to Options granted to Eligible Directors or Affiliated
Directors. The grant of such Options may be evidenced by a Stock Option
Agreement, which shall be executed by the Optionee and an authorized
officer of Holdings and which shall incorporate the terms and conditions of
this Article IV.

Section 4.2 - Option Price
-----------   ------------

          The exercise price of each share of Common Stock subject to an
Option granted pursuant to Section 3.2 shall be the final closing price of
Common Stock (as reported on the New York Stock Exchange consolidated tape)
on the date of grant.

Section 4.3 - Commencement of Exercisability
-----------   ------------------------------

          Options granted pursuant to Section 3.2(a) shall not be
exercisable prior to six months after the date of grant, and thereafter
shall be exercisable in full, subject to applicable securities
regulations. Options granted pursuant to Section 3.2(b) shall be
exercisable in three installments. The first installment shall be
exercisable on the first anniversary of the date of grant for 33% of the
number of shares of Common Stock subject to the Option. Thereafter, on each
subsequent anniversary of the date of grant, an installment shall become
exercisable for 33% and 34%, respectively, of the number of shares subject
to the Option until the Option has become fully exercisable. To the extent
that any of the above installments is not exercised when it becomes
exercisable, it shall not expire, but shall continue to be exercisable at
any time thereafter until the Option shall terminate, expire or be
surrendered. An exercise shall before whole shares only.

Section 4.4 - Expiration of Option
-----------   --------------------

          The Option shall expire and may not be exercised to any extent
after the expiration of ten years from the date the Option was granted.



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<PAGE>



                                 ARTICLE V

                        TERMS OF OPTIONS FOR KEY EMPLOYEES
                        ----------------------------------

Section 5.1 - Option Agreement
-----------   ----------------

          Options granted to key Employees shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of Holdings and which shall contain the terms and
conditions of this Article V and such other terms and conditions as the
Committee shall determine, consistent with the Plan.

Section 5.2 - Option Price
-----------   ------------

          (a)  The price per share of the Common Stock subject to each
Option granted pursuant to this Article V shall be set by the Committee.
The price per share may be less than the fair market value of such shares
on the date such Option is granted; provided that in no event shall the
price per share be less than fifty (50%) percent of the fair market value
of such shares on the date such Option is granted.

          (b)  For the purpose of Section 5.2(a), the fair market value of
a share of Common Stock on the date the Option is granted shall be the fair
market value established by the Committee acting in good faith.

Section 5.3 - Commencement of Exercisability
-----------   ------------------------------

          Subject to the provisions of Section 8.2, Options granted
pursuant to this Article V shall become exercisable at such times and in
such installments (which may be cumulative) as the Committee shall provide
in the terms of each individual Option; provided, however, that by a
resolution adopted after an Option is granted the Committee may, on such
terms and conditions as it may determine to be appropriate and subject to
Section 8.2, accelerate the time at which such Option or any portion
thereof may be exercised.

Section 5.4 - Expiration of Options
-----------   ---------------------

          (a)   No Option may be exercised to any extent by anyone after, 
and every Option shall expire no later than, the expiration of ten (10) 
years and one (1) day from the date the Option was granted.



                                     7

<PAGE>



          (b)   Subject to the provisions of Section 5.4(a), the Committee
shall provide, in the terms of each individual Option, when such Option
expires and becomes unexercisable.

Section 5.5 - No Right to Continue in Employment
-----------   ----------------------------------

          Nothing in this Plan or in any Stock Option Agreement hereunder
(i) shall confer upon any Optionee who is an Employee any right to continue
in the employ of Holdings or any of its Subsidiaries or (ii) shall
interfere with or restrict in any way the rights of Holdings and its
Subsidiaries, which are hereby expressly reserved, to terminate the
employment of any Optionee at any time for any reason whatsoever, with or
without good cause.

Section 5.6 - Adjustments
-----------   -----------

          (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 in paragraph
5.6(c) hereof):

               (i)  Stock options granted pursuant to Section 5 hereof
     shall become fully vested and exercisable; provided; however, that the
     Committee may elect to make a cash payment to Participants in
     cancellation of such options in such amount as the Committee in its
     sole discretion shall determine, which amount shall not be less than
     the product of (x) and (y), where (x) is the excess of the Fair Market
     Value of Common Stock on the date of exercise over the exercise price,
     and (y) is the number of Shares subject to the stock options being
     cancelled; and further provided that no stock option grant shall be
     exercised less than 6 months after the date it is granted.

               (ii) The Committee shall have authority to revise the terms
     of any such Grant or any other Grant as it, in its discretion, deems
     appropriate; provided; however, that the Committee may not make
     revisions that are adverse to the Participant without the
     Participant's consent unless such revision is provided for or
     contemplated in the terms of the Grant.



                                     8

<PAGE>



          (c)  For purposes of the Plan, a "Change of Control" shall mean
the first to occur of the following events or such later date as the
Corporation may specify from time to time:

               (i)  an individual, corporation, parmership, group,
     associate or other entity or "person", as such term is defined in
     Section 14(d) of the Securities Exchange Act of 1934 (the "Exchange
     Act"), other than Holdings or any employee benefit plans sponsored by
     Holdings or the Company, is or becomes the "beneficial owner' (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
     of 30% or more of the combined voting power of Holdings' outstanding
     securities ordinarily having the right to vote at elections of
     directors.

              (ii)  individuals who constitute the Holdings Board on
     October 11, 1995 (the "Incumbent Board") cease for any reason to
     constitute at least a majority thereof, provided that any person
     becoming a director subsequent to such date whose election, or
     nomination for election by Holdings' shareholders, was approved by a
     vote of at least three-quarters of the directors comprising the
     Incumbent Board (either by a specific vote or by approval of the proxy
     statement of Holdings in which such person is named as a nominee of
     Holdings for director), but excluding for this purpose any such
     individual whose initial assumption of office occurs as a result of
     either an actual or threatened election contest (as such terms are
     used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
     Act) or other actual or threatened solicitation of proxies or consents
     by or on behalf of an individual, corporation, partnership, group,
     associate or other entity or "person" other than the Holdings Board,
     shall be, for purposes of this paragraph (ii), considered as though
     such person were a member of the Incumbent Board;

               (iii)  the approval by the shareholders of Holdings of a
     plan or agreement providing (1) for a merger or consolidation of
     Holdings other than with a wholly-owned subsidiary and other than a
     merger or consolidation that would result in the voting securities of
     Holdings outstanding immediately prior thereto continuing to represent
     (either by remaining outstanding or by being converted into voting
     securities of the surviving entity) more than 50% of the combined
     voting power of the voting securities of Holdings or such surviving
     entity outstanding immediately after such merger or consolidation, or
     (2) for a sale, exchange or other disposition of all or substantially
     all of the assets of Holdings. If any of the events enumerated in this
     paragraph (iii) occur, the Holdings Board shall determine the
     effective date of the Change of Control resulting therefrom for
     purposes of the Program.



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<PAGE>



                                 ARTICLE VI


                            EXERCISE OF OPTIONS 
                            -------------------



Section 6.1 - Persons Eligible to Exercise
-----------   ----------------------------

          During the lifetime of the Optionee, only he or his guardian may
exercise an Option granted to him, or any portion thereof. After the death
of the Optionee, any exercisable portion of an Option may, prior to the
time when such portion becomes unexercisable under Section 4.4, 5.4 or 5.6,
be exercised by his personal representative or by any person empowered to
do so under the deceased Optionee's will or under the then applicable laws
of descent and distribution.

Section 6.2 - Partial Exercise
-----------   ----------------

          At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof expires or becomes
unexercisable under Section 4.4, 5.4, or 5.6, such Option or portion
thereof may be exercised in whole or in part; provided, however, that
Holdings shall not be required to issue fractional shares. With respect to
Options granted to key Employees, the Committee may, in the Stock Option
Agreement, require any partial exercise to be with respect to a specified
minimum number of shares.

Section 6.3 - Manner of Exercise
-----------   ------------------

          An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivering to the Secretary or his office all of the
following prior to the time when such Option or such portion becomes
unexercisable:

          (a)  Notice in writing signed by the Optionee or other person
     then entitled to exercise such Option or portion thereof, stating that
     such Option or portion thereof is exercised;

          (b)  Full payment of the Option Price (in cash, by check or by a
     combination thereof) for the shares with respect to which such Option
     or portion thereof is thereby exercised, together with payment or
     arrangement for payment of any federal income or other tax required to
     be withheld by Holdings with respect to such shares;

          (c)  Such representations and documents as the Committee
     reasonably deems necessary or advisable to effect compliance with all



                                     10

<PAGE>



     applicable provisions of the Securities Act of 1933, as amended and
     any other federal, state or foreign securities laws or regulations.
     The Committee may, in its absolute discretion, also take whatever
     additional actions it deems appropriate to effect such compliance,
     including, without limitation, placing legends on share certificates
     and issuing stop-transfer orders to transfer agents and registrars;
     and

          (d) In the event that the Option or portion thereof shall be
     exercised pursuant to Section 6.1 by any person or persons other than
     the Optionee, appropriate proof of the right of such person or persons
     to exercise the Option or portion thereof.

Section 6.4 - Rights as Stockholders
-----------   ----------------------

          The holders of Options shall not be, nor have any of the rights
or privileges of, stockholders of Holdings in respect of any shares
purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by Holdings to such
holders.

Section 6.5 - Transfer Restrictions
-----------   ---------------------

          The Committee, in its absolute discretion, may impose such
restrictions on the transferability of the shares purchasable upon the
exercise of an Option as it deems appropriate, and any such restriction
shall be set forth in the respective Stock Option Agreement and may be
referred to on the certificates evidencing such shares.

                                ARTICLE VII

                              ADMINISTRATION 
                              ---------------

Section 7.1 - Compensation Committee
-----------   ----------------------

          The Plan shall be administered by the Compensation Committee of
the Board. In its absolute discretion, the Board may appoint a different
committee comprised of two or more Directors to administer all or a portion
of the Plan. To the extent required to avoid liability under Section 16 of
the Exchange Act, no person shall be eligible to serve on the Committee
unless he is then a "disinterested person" within the meaning of Rule 16b-
3. Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee shall be filled by the
Board.



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<PAGE>



Section 7.2 - Duties and Powers of Committee
-----------   ------------------------------

          It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt
such rules for the administration, interpretation, and application of the
Plan as are consistent therewith and to interpret, amend or revoke any such
rules. Any such interpretations and rules shall be consistent with the
basic purpose of the Plan to grant Options, including Incentive Stock
Options and, with respect to Options granted to Eligible Directors or
Affiliated Directors, shall be consistent with the designation of this Plan
as a nondiscretionary formula plan within the meaning of Rule 16b-3. 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. The
Committee may act either by vote at a telephonic or other meeting or by a
memorandum or other written instrument signed by a majority of the
Committee.

Section 7.3 - Compensation; Professional Assistance; Good Faith Actions
-----------   ---------------------------------------------------------

          Members of the Committee shall not receive compensation for their
services as members but all expenses and liabilities they incur in
connection with the administration of the Plan shall be borne by Holdings.
The Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, Holdings and the Officers and
Directors of Holdings shall be entitled to rely upon the advice, opinions
or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith
shall be final and binding upon all Optionees, Holdings and all other
interested persons. 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 the Options, and all members of the Committee shall
be fully protected by Holdings with respect to any such action,
determination or interpretation.

                                ARTICLE VIII

                         MISCELLANEOUS PROVISIONS 
                         ------------------------

Section 8.1 - Options Not Transferable
-----------   ------------------------

          No Option or interest or right therein 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 or by judgment, levy, attachment,
garnishment or any other legal or equitable



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<PAGE>



proceeding (including bankruptcy), and any attempted disposition thereof
shall be null and void and of no effect; provided, however, that nothing in
this Section 8.1 shall prevent transfers by will or by the applicable laws
of descent and distribution. Notwithstanding the foregoing, the Committee,
in its absolute discretion, may direct that a Stock Option Agreement
provide that Options granted thereunder may be transferred to a "family
member" of the Optionee or to a trust for the benefit of such family
member. For purposes of the preceding sentence, "family member" with
respect to an Optionee shall include the Optionee's parents, siblings,
children or grandchildren.

Section 8.2 - Amendment, Suspension or Termination of the Plan
-----------   ------------------------------------------------

          (a)  The Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the
Board. However, without approval of Holdings' stockholders given within 12
months before or after the action by the Board or the Committee, no action
of the Committee or the Board may, except as provided in Section 8.3,
increase any limit imposed in Section 2.1 on the maximum number of shares
which may be issued upon exercise of Options, reduce the minimum option
price requirements in Section 4.2 or 5.2(a) or extend the limit imposed in
this Section 8.2 on the period during which Options may be granted. Except
as expressly permitted by the terms of the Plan, neither the amendment,
suspension nor termination of the Plan shall, without the consent of the
holder of the Option, alter or impair any rights or obligations under any
Option theretofore granted. No Option may be granted during any period of
suspension nor after termination of the Plan, and in no event may any
Option be granted under this Plan after the expiration of ten years from
the date the Plan is adopted or the date the stockholders of Holdings
approve this Plan, if earlier.

          (b)  Notwithstanding anything in Section 8.2(a) to the contrary,
in no event may the provisions of Section 3.2 or Article IV be amended more
frequently than once in six months, except as necessary to comport with
changes to the Code, the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder.

Section 8.3 - Adjustments in Outstanding Options
-----------   ----------------------------------

          In the event that the outstanding shares of Common Stock subject
to Options are, from time to time, changed into or exchanged for a
different number or kind of shares of Holdings or other securities of
Holdings by reason of a merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend, combination of shares, or
otherwise, the Committee shall make an appropriate and equitable adjustment
in the aggregate number of shares which may



                                     13

<PAGE>



be issued pursuant to Section 2.1 hereof and the number and kind of shares
or other consideration as to which all outstanding Options, or portions
thereof then unexercised, shall be exercisable. Any such adjustment made by
the Committee shall be final and binding upon all Optionees, Holdings and
all other interested persons.

Section 8.4 - Effect of Plan Upon Other Options and Compensation Plans
-----------   --------------------------------------------------------

          Nothing in this Plan shall be construed to limit the right of
Holdings or any of its Subsidiaries (a) to establish any other forms of
incentives or compensation for employees of Holdings or any of its
Subsidiaries or (b) to grant or assume options otherwise than under this
Plan in connection with any proper corporate purpose, including, but not by
way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of
the business, stock or assets of any corporation, firm or association.

Section 8.5 - Titles
-----------   ------

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

Section 8.6 - Pronouns
-----------   --------

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

          I hereby certify that this amendment and restatement of the Plan
was duly adopted by the Board of Directors of RJR Nabisco Holdings Corp. on
December 5, 1995.

          Executed as of this 5th day of December, 1995.


                                                                   
                             -----------------------------------
                                           Secretary


Corporate Seal



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