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

Exhibit 10.6

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.

(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.

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: