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                                                                    Exhibit 10.9

            SECOND AMENDMENT TO THE PBGC-RJR NABISCO HOLDINGS CORP.-
      R.J. REYNOLDS TOBACCO COMPANY AGREEMENT EFFECTIVE AS OF MAY 20, 1999

         THIS SECOND AMENDMENT to the Agreement by and among the Pension Benefit
Guaranty Corporation, RJR Nabisco Holdings Corp. and R.J. Reynolds Tobacco
Company is made and entered into by and between the Pension Benefit Guaranty
Corporation, R.J. Reynolds Tobacco Holdings, Inc., and R.J. Reynolds Tobacco
Company, and is effective as of January 7, 2002.

                                  DECLARATIONS
                                  ------------

Effective May 20, 1999, the Pension Benefit Guaranty Corporation ("PBGC"), RJR
Nabisco Holdings Corp. and R.J. Reynolds Tobacco Company ("Company") entered
into an Agreement ("First Agreement"); and

Effective June 14, 1999, PBGC, R.J. Reynolds Tobacco Holdings, Inc. ("RJR") and
Company executed an Amendment to the Agreement ("Amendment") substituting RJR
for Company as the party that is obligated to meet all of the obligations of the
First Agreement (the First Agreement as modified by the Amendment is hereinafter
referred to as the "Agreement"); and

Under section III of the Agreement, as amended, RJR is required to make certain
contributions to the R.J. Reynolds Retirement Plan (the "Plan"); RJR is current
to date on all contributions required under the Agreement; and

RJR now wishes to prepay all future contributions required under the Agreement;
PBGC and RJR have agreed that this prepayment amount shall be at least $183
million; and

Under section VI of the Agreement, RJR must provide an irrevocable Letter of
Credit to the PBGC; and

Under section IX(f) of the Agreement, RJR must provide PBGC's Corporate Finance
and Negotiations Department with advance written notice of any material
refinancing of debt or material change in debt amortization schedule; and

NOW THEREFORE, RJR, Company, and PBGC agree to the following:

1.       Section III of the Agreement is replaced in its entirety with the
         following:

         III.      Required Contributions to the Plan:
                   ----------------------------------

         On or before January 7, 2002 RJR shall make a $183 million cash
contribution to the Plan, subject to any limitations contained herein, including
but not limited to Section IV. For the Plan Years ending December 31, 2001 and
December 31, 2002, the "Required Contributions" to the Plan shall be $116
million ( $58 million for Plan Year 2001, ending December 31,2001 and $58

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million for Plan Year 2002, ending December 31, 2002) plus the normal cost as
used for Code ss. 412(b)(2)(A) for each of these Plan Years . The $183 million
cash contribution is expected to exceed the Required Contributions for Plan
Years 2001 and 2002. If the $183 million cash contribution is less than the
Required Contributions, RJR will make an additional cash contribution in the
amount of the deficiency on or before June 1, 2003. As further described in
Section V of this Agreement, to the extent that the Required Contributions
exceeds the minimum funding contributions required under Code ss. 412, it shall
be carried as a credit balance for the duration of the Agreement. If the $183
million cash contribution exceeds the Required Contributions for Plan Years 2001
and 2002, the excess shall not be considered when determining the Required
Credit Balance and the Plan's actuary will reconcile annually, the resulting
discrepancy between the Plan's actual credit balance and the Required Credit
Balance.

2.       Section V of the Agreement shall be replaced in its entirety with the
following:

         V.       Required Credit Balance
                  -----------------------

                  RJR shall maintain the Required Credit Balance for the term of
         this Agreement. For each Plan Year after 2000, the Required Credit
         Balance shall be

         (1)      The Plan's credit balance in its Funding Standard Account as
                  of the end of the prior Plan Year (the credit balance as of
                  the end of the 2000 Plan Year was $404,950,851; and

         (2)      The Required Contributions under Section III of this Agreement
                  to the extent that making the Required Contributions produces
                  a credit balance; and

         (3)      Interest at the Funding Standard Account Rate to the end of
                  the Plan Year for all amounts under subsections (1)-(2) above.

3.       Section VI of the Agreement is replaced in its entirety with the
following:

         VI.      Return of Letter of Credit
                  --------------------------

                  Upon receipt by PBGC of written confirmation from RJR that the
         cash contribution of $183 million has been deposited in the Plan's
         trust account in accordance with Section III of the Agreement, PBGC
         shall return to RJR the Letter of Credit which PBGC retains as
         beneficiary.

4.       Section VII of the Agreement is deleted in its entirety. All subsequent
sections of the Agreement shall be renumbered to conform with this change.

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5.       Subparagraph (f) of Section IX of the Agreement, as renumbered Section
VIII(f) under this Second Amendment, is modified to read as follows
(subparagraphs (a) through (e), and (g) through (j) remain unchanged):

         VIII.    Notice Requirements
                  -------------------

                                      * * *

         (f)      Written notice thirty (30) days prior to any material
                  refinancing of private debt or material change in any private
                  debt amortization schedule, except that RJR is not required to
                  notify PBGC of borrowings and timely repayments under a
                  revolving credit facility. However, RJR shall notify PBGC of
                  any material change in RJR's debt amortization schedules if
                  such change is due to violation(s) of the terms of RJR's
                  credit facility. This notice provision is not intended to
                  require RJR to provide PBGC with notice of public debt
                  security transactions that RJR must report to the United
                  States Securities and Exchange Commission. However, PBGC
                  reserves the right to contact RJR with questions about any
                  public debt securities transactions.

6.       A subparagraph (k) is added to Section IX of the Agreement, as
renumbered Section VIII under this Second Amendment, to read as follows:

         VIII.    Notice Requirements
                  -------------------

                                      * * *

         (k)      A copy, within ten (10) business days after filing the Form
                  5500, of the Plan actuary's annual reconciliation of any
                  discrepancy between the Plan's actual credit balance and the
                  Required Credit Balance.

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7.       Except as the Agreement is modified by this Second Amendment, the
Agreement remains unchanged and in full force and effect, and the parties hereby
ratify and affirm the Agreement as modified hereby.

IN WITNESS WHEREOF, the parties have signed and agreed as of the date first
written above.

                             PENSION BENEFIT GUARANTY CORPORATION

Date: 1/08/02                By: /s/ Andrea Schneider
                                 -----------------------------------------------
                                 Andrea Schneider, Chief Negotiator and Director
                                 Corporate Finance and Negotiations Department

                             R.J. REYNOLDS TOBACCO HOLDINGS, INC.

Date: 1/08/02                By: /s/ McDara P. Folan, III
                                 -----------------------------------------------
                                 Name: McDara P. Folan, III
                                 Title: VP, Deputy General Counsel and Secretary

                             R.J. REYNOLDS TOBACCO COMPANY

Date: 1/08/02                By: /s/ Lynn L. Lane
                                 -----------------------------------------------
                                 Name: Lynn L. Lane
                                 Title: SVP & Treasurer

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                                                                   Exhibit 10.26
Board of Directors Resolutions
Adopted 12-05-01

                   AMENDMENTS TO 1999 LONG-TERM INCENTIVE PLAN
                   -------------------------------------------

         RESOLVED, that Section 3(b) of the R.J. Reynolds Tobacco Holdings, Inc.
1999 Long-Term Incentive Plan (the "1999 LTIP"), hereby is amended by deleting
current Section 3(b) of the 1999 LTIP in its entirety and replacing it with the
following language:

                  "The Committee may delegate its duties under the Plan to the
         Chief Executive Officer, to other senior officers of the Corporation,
         or to the Chairman of the Board of Directors, acting as a committee
         established by the Committee, subject to such conditions and
         limitations as the Committee shall prescribe; provided, however, that
         only the Committee may designate and make Grants to Participants who
         are subject to Section 16 of the Exchange Act."

         FURTHER RESOLVED, that Section 12 of the 1999 LTIP hereby is renumbered
Section 13, and that the 1999 LTIP shall be amended by adding the following
language as Section 12:

                  " 12.    Distribution upon Death

                  In the event of the death of a Participant, any distribution
         to which such Participant is entitled under the Plan shall be made to
         the beneficiary designated by the Participant to receive the proceeds
         of any noncontributory group life insurance coverage provided for the
         Participant by the Corporation or a subsidiary of the Corporation
         ("Group Life Insurance Coverage"). If the Participant has not
         designated such beneficiary, or desires to designate a different
         beneficiary, the Participant may file with the Corporation a written
         designation of a beneficiary under the Plan, which designation may be
         changed or revoted only by the Participant, in writing. If no
         designation of beneficiary has been made by a Participant under the
         Group Life Insurance Coverage or filed with the Corporation under the
         Plan, distribution upon such Participant's death shall be made in
         accordance with the provisions of the Group Life Insurance Coverage. If
         a Participant is no longer an employee of the Corporation at the time
         of death, no longer has any Group Life Insurance Coverage and has not
         filed a designation of beneficiary with the Corporation under the Plan,
         distribution upon such Participant's death shall be made to the
         Participant's estate."

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         FURTHER RESOLVED, that the officers of the Corporation and their
designees, and each of them, hereby are authorized to do and perform any and all
acts and to execute and deliver any and all plan documents, amendments,
agreements or other instruments as they may deem necessary or advisable to
effectuate the foregoing resolution, including, without limitation, conforming
amendments to existing grants under the 1999 LTIP with conflicting distribution
upon death provisions, and any actions taken by the officers of the Corporation
and their designees, or any of them, in furtherance of the foregoing resolutions
hereby are approved, ratified and confirmed in all respects.

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