RJ REYNOLDS TOBACCO HOLDINGS INC
FORM OF RESTRICTED STOCK AGREEMENT
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>7
<FILENAME>g77421exv10w5.txt
<DESCRIPTION>FORM OF RESTRICTED STOCK AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.5

                      R.J. REYNOLDS TOBACCO HOLDINGS, INC.
                         1999 LONG TERM INCENTIVE PLAN
                        --------------------------------

                           RESTRICTED STOCK AGREEMENT
                        -------------------------------

                          DATE OF GRANT: JULY 26, 2002

                              W I T N E S S E T H:


         1.       Grant of Restricted Stock. Pursuant to the provisions of the
1999 Long Term Incentive Plan (the "Plan"), R.J. Reynolds Tobacco Holdings,
Inc. (the "Company") on the above date has granted, and this Restricted Stock
Agreement (this "Agreement") evidences the grant to

                    [FIRST_NAME] [LAST_NAME] (THE "GRANTEE")

subject to the terms and conditions which follow and the terms and conditions
of the Plan, of a total of

                              [REST_STOCK] SHARES

of Common Stock of the Company ("Common Stock"). A copy of the Plan is attached
and made a part of this Agreement with the same effect as if set forth in the
Agreement itself. All capitalized terms used in this Agreement below shall have
the meaning set forth in the Plan, unless otherwise indicated.

         2.       Receipt and Delivery of Stock. The Grantee waives receipt from
the Company of a certificate or certificates representing the shares of Common
Stock granted hereunder, registered in the Grantee's name and bearing a legend
evidencing the restrictions imposed on such shares of Common Stock by this
Agreement. The Grantee acknowledges and agrees that the Company shall retain
custody of such certificate or certificates until the restrictions imposed by
Section 3 of this Agreement on the shares of Common Stock granted hereunder
lapse. The Grantee acknowledges and agrees that, alternatively, the shares of
Common Stock granted hereunder may be maintained in book-entry form with
instructions from the Company to the Company's transfer agent that such shares
shall remain restricted until the restrictions imposed by Section 3 of this
Agreement on such shares lapse.

         3.       Restrictions on Transfer of Stock. The shares of Common Stock
granted hereunder may not be sold, tendered, assigned, transferred, pledged or
otherwise encumbered prior to the earliest of:


<PAGE>

                  (a)      the later of July 26, 2005 or the date the Annual
                           Incentive Award Plan ("AIAP") score for 2004 is
                           determined (the "Normal Vesting Date"), for 100% of
                           the shares;

                  (b)      the date of the Grantee's death, for 100% of the
                           shares;

                  (c)      the date of the Grantee's Permanent Disability (as
                           defined in the Company's Long Term Disability Plan),
                           for 100% of the shares;

                  (d)      the date of the Grantee's Retirement (as defined in
                           this Section 3); or

                  (e)      the date of a Change of Control (as defined in the
                           Plan), for 100% of the shares.

         For purposes of this Agreement, the term "Retirement" shall mean
retirement at age 65 or over, or early retirement at age 55 or over with the
approval of the Chief Executive Officer of the Company, which approval
specifically states the number or percentage of shares (rounded to the nearest
whole number of shares) with respect to which the restrictions referred to in
this Section 3 will lapse.

         In the event of the Grantee's involuntary Termination of Employment
without Cause (as such terms are defined in Section 5 of this Agreement), the
restrictions imposed by this Section 3 will lapse with respect to that number
of shares of Common Stock (rounded to the nearest whole number of shares) which
is equal to the product of (i) the total number of shares of Common Stock
granted to the Grantee under this Agreement and (ii) a fraction, the numerator
of which is the number of whole or partial months between the Date of Grant and
date of the Grantee's Termination of Employment, and the denominator of which
is 36.

         At the time the restrictions imposed by this Section 3 shall lapse,
the appropriate number of shares of Common Stock shall be delivered to the
Grantee without a restrictive legend on any Common Stock certificate, or, if
such shares are held in book-entry form, the Company's transfer agent shall be
instructed to remove the restrictions on such shares.

         4.       Forfeiture of Stock; Grant of Additional Stock. (a) For the
shares of Common Stock granted hereunder to vest, the Company must pay to its
stockholders a dividend of at least $0.95 per share in each fiscal quarter
during the period commencing on the Date of Grant and ending on December 31,
2004 (the "Threshold Requirement"), unless the Company's Board of Directors
specifically approves the nonforfeiture of such shares upon the declaration of
a quarterly dividend of less than $0.95 per share. In the event the Company
fails to pay to its stockholders a dividend of at least $0.95 per


                                       2
<PAGE>

share in any fiscal quarter during the period from the Date of Grant and ending
on December 31, 2004, and the Company's Board of Directors does not approve the
nonforfeiture of the shares of Common Stock granted hereunder, the Grantee
shall forfeit all right, title and interest in and to the shares of Common
Stock still subject to the restrictions set forth in Section 3 of this
Agreement and to any dividends to be paid thereafter on such shares.

         (b) On the Normal Vesting Date, if the Threshold Requirement is met or
otherwise waived by the Company's Board of Directors, the original number of
shares of Common Stock granted to the Grantee under this Agreement and still
subject to the restrictions set forth in Section 3 of this Agreement (the
"Original Number"), shall be multiplied by the average of the total weighted
AIAP scores for the financial and market share components of the AIAP for each
of 2002, 2003 and 2004 resulting in a "Revised Number." If the Revised Number
is greater than the Original Number, the Company shall issue an additional
number of shares of Common Stock to the Grantee equal to the difference between
the Revised Number and the Original Number (rounded to the nearest whole number
of shares) as soon as practicable after the Normal Vesting Date. If the Revised
Number is less than the Original Number, the Grantee immediately shall forfeit
all right, title and interest in and to that number of shares of Common Stock
equal to the difference between the Original Number and the Revised Number
(rounded to the nearest whole number of shares) and to any dividends to be paid
thereafter on such shares.

         (c) Upon the Grantee's voluntary Termination of Employment or
Termination of Employment for Cause (as such terms are defined in Section 5 of
this Agreement), the Grantee shall forfeit all right, title and interest in and
to the shares of Common Stock still subject to the restrictions set forth in
Section 3 of this Agreement and to any dividends to be paid thereafter on such
shares.

         (d) Any shares of Common Stock granted hereunder and subsequently
forfeited shall revert to the Company and shall not become transferable by the
Grantee or anyone claiming through the Grantee. The Compensation Committee of
the Company's Board of Directors (the "Compensation Committee") or its agent
shall act promptly to record forfeitures pursuant to this Section 4 on the
stock transfer books of the Company.

         5.       Termination of Employment. (a) For purposes of this Agreement,
the term "Termination of Employment" shall mean termination from active
employment with the Company or a subsidiary of the Company; it does not mean
the termination of pay and benefits at the end of a period of salary
continuation (or other form of severance pay or pay in lieu of salary).

         (b) For purposes of this Agreement, if the Grantee has an employment
or severance agreement, employment shall be deemed to have been terminated for
"Cause" only as such term is defined in the employment or severance agreement.
For purposes of this Agreement, if the Grantee does not have an employment or
severance agreement


                                       3
<PAGE>

that defines the term "Cause," the Grantee's employment shall be deemed to have
been terminated for "Cause" if the Termination of Employment results from the
Grantee's: (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 the Grantee;
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 the
Grantee 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 the Grantee in anticipation of an involuntary Termination of Employment for
Cause shall be deemed to be a Termination of Employment for Cause.

         6.       Dividends. If the Grantee is a stockholder of record on any
applicable record date, the Grantee shall receive any dividends on the shares
of Common Stock granted hereunder when paid regardless of whether the
restrictions imposed by Section 3 of this Agreement have lapsed.

         7.       Voting. If the Grantee is a stockholder of record on any
applicable record date, the Grantee shall have the right to vote the shares of
Common Stock granted hereunder regardless of whether the restrictions imposed
by Section 3 of this Agreement have lapsed.

         8.       No Right to Employment. The execution and delivery of this
Agreement and the granting of shares of Common Stock hereunder shall not
constitute or be evidence of any agreement or understanding, express or
implied, on the part of the Company or its subsidiaries to employ the Grantee
for any specific period or in any particular capacity and shall not prevent the
Company or its subsidiaries from terminating the Grantee's employment at any
time with or without Cause.

         9.       Registration. The shares of Common Stock granted hereunder may
be offered and sold by the Grantee only if such shares are registered for
resale under the Securities Act of 1933 (the "1933 Act"), as amended, or if an
exemption from registration under such Act is available. The Company has no
obligation to effect such registration. By executing this Agreement, the
Grantee (a) agrees not to offer or sell the shares of Common Stock granted
hereunder unless and until such shares are registered for resale under the 1933
Act or an exemption from registration is available, (b) represents that the
Grantee accepts such shares of Common Stock for his own account for investment
and not with a view to, or for sale in connection with, the distribution of any
part thereof and (c) agrees that the Grantee or the Grantee's beneficiary, on
request, will be obligated to repeat these representations in writing prior to
any future delivery of such shares of Common Stock.

         10.      Change in Common Stock or Corporate Structure. In the event of
any stock


                                       4
<PAGE>

split, spin-off, stock dividend, extraordinary cash dividend, stock combination
or reclassification, recapitalization or merger, change in control, or similar
event, the Compensation Committee shall make an appropriate adjustment to the
number or kind of shares or other consideration covered by this Agreement and
to the level of dividends required under Section 4(a) of this Agreement, and
such other revisions to this Agreement as it deems are equitably required. Any
adjustment or revision made by the Compensation Committee shall be final and
binding on the Grantee, the Company and all other interested persons; provided,
however, that the Compensation Committee may not make any such adjustments or
revisions that are adverse to the Grantee without the Grantee's written
consent.

         11.      Application of Laws. The granting of shares of Common Stock
hereunder shall be subject to all applicable laws, rules and regulations and to
such approvals of any governmental agencies as may be required.

         12.      Taxes. Any taxes required by federal, state or local laws to
be withheld by the Company on the Date of Grant or the delivery of unrestricted
shares of Common Stock hereunder shall be paid to the Company by the Grantee by
the time such taxes are required to be paid or deposited by the Company. The
Grantee hereby authorizes the conversion to cash by the Company of a sufficient
number of shares of Common Stock to satisfy the withholding prior to the
delivery of unrestricted shares of Common Stock.

         13.      Notices. Any notices required to be given hereunder to the
Company shall be addressed to The Secretary, R.J. Reynolds Tobacco Holdings,
Inc., Post Office Box 2866, Winston-Salem, NC 27102-2866, and any notice
required to be given hereunder to the Grantee shall be sent to the Grantee's
address as shown on the records of the Company.

         14.      Administration and Interpretation. In consideration of the
grant, the Grantee specifically agrees that the Compensation Committee shall
have the exclusive power to interpret the Plan and this Agreement and to adopt
such rules for the administration, interpretation and application of the Plan
and Agreement as are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations made by the
Compensation Committee shall be final, conclusive, and binding upon the
Grantee, the Company and all other interested persons. No member of the
Compensation Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or the Agreement.
The Compensation Committee may delegate its interpretive authority to an
officer or officers of the Company.

         15.      Amendment. This Agreement is subject to the Plan, a copy of
which is attached. The Board of Directors may amend the Plan and the
Compensation Committee may amend this Agreement at any time and in any way,
except that any amendment of the Plan or this Agreement that would impair the
Grantee's rights under this Agreement may not be made without the Grantee's
written consent.


                                       5
<PAGE>

         16.      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.

         IN WITNESS WHEREOF, the Company, by its duly authorized officer, and
the Grantee have executed this agreement as of the Date of Grant first above
written.

                                      R.J. REYNOLDS TOBACCO HOLDINGS, INC.


                                      By:
                                         ------------------------------------
                                                 Authorized Signatory


------------------------
Grantee

Grantee's Taxpayer Identification Number:

------------------------

Grantee's Home Address:

------------------------

------------------------

------------------------

                                       6

</TEXT>
</DOCUMENT>
