UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 23, 2011

 

 

LOGO

Alliance One International, Inc.

(Exact name of Registrant, as specified in its charter)

 

 

 

Virginia   001-13684   54-1746567

(State or other jurisdiction

of incorporation)

 

(Commission

file number)

 

(I.R.S. Employer

Identification No.)

8001 Aerial Center Parkway

Morrisville, North Carolina 27560-8417

(Address of principal executive offices, including zip code)

(919) 379-4300

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On March 25, 2011, Alliance One International, Inc. (the “Company”) entered into a Consulting Agreement (the “Consulting Agreement”) with Meriturn Partners, LLC (“Meriturn”) and Mark Kehaya to provide the terms and conditions for the provision of the services of Mr. Kehaya as a consultant and interim Chief Executive Officer of the Company. The Board of Directors of the Company appointed Mr. Kehaya as interim Chief Executive Officer effective December 14, 2010. Mr. Kehaya is a partner of Meriturn.

The Consulting Agreement provides that it is to be effective as of December 1, 2010 and that Mr. Kehaya’s services as consultant and interim Chief Executive Officer are effective as of December 14, 2010. The Consulting Agreement has a term of 12 months, which term automatically renews for successive three month periods unless any party gives notice in writing 30 days prior to the scheduled expiration. Pursuant to the Consulting Agreement, the Company has agreed to pay Meriturn $45,375 per month for Mr. Kehaya’s services. The Consulting Agreement is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

On March 24, 2011, the Executive Compensation Committee of the Board of Directors of the Company awarded non-qualified stock options to the following officers in the following amounts:

 

Officer

   Number of Stock Options  

Robert A. Sheets

     500,000   

J. Pieter Sikkel

     500,000   

J. Henry Denny

     350,000   

Hampton R. Poole, Jr.

     40,000   

The stock options were awarded under the Amended and Restated Alliance One International, Inc. 2007 Incentive Plan and have an exercise price of $6.00 per share. The closing price on the New York Stock Exchange of the Company’s common stock on the date of these awards was $3.97 per share. The stock options vest and become exercisable with respect to one-fifth of the shares of the common stock subject to the award on each of the first, second, third, fourth and fifth anniversaries of the date of award. The stock options are subject to forfeiture upon certain terminations of employment prior to vesting and are forfeited upon the recipient’s resignation of employment or termination of employment for cause. The stock options expire if unexercised 10 years after the date of the award. The terms and conditions of each award are set forth in non-qualified stock option award agreements, the form of which is filed as Exhibit 10.2 hereto and is incorporated by reference herein.

 

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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

On March 23, 2011, the Board of Directors of the Company approved, effective as of that date, an amendment to the Company’s bylaws to change the size of the Board of Directors from ten to nine. Currently, nine directors serve on the Board of Directors.

 

Item 9.01 Exhibits .

 

Exhibit 3.01    Amended and Restated Bylaws of Alliance One International, Inc.
Exhibit 10.1    Consulting Agreement, effective as of December 1, 2010, among Alliance One International, Inc., Meriturn Partners, LLC and Mark Kehaya
Exhibit 10.2    Amended and Restated Alliance One International, Inc. 2007 Incentive Plan Form of Grant Agreement—Non-Qualified Stock Option Award Agreement

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 28, 2011

 

ALLIANCE ONE INTERNATIONAL, INC.
By:  

/s/ Robert A. Sheets

  Robert A. Sheets
  Executive Vice President – Chief Financial Officer and Chief Administrative Officer

 

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EXHIBIT INDEX

 

Exhibit
Number

  

Exhibit

  3.1

   Amended and Restated Bylaws of Alliance One International, Inc.

10.1

   Consulting Agreement, effective as of December 1, 2010, among Alliance One International, Inc., Meriturn Partners, LLC and Mark Kehaya

10.2

   Amended and Restated Alliance One International, Inc. 2007 Incentive Plan Form of Grant Agreement—Non-Qualified Stock Option Award Agreement

 

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Exhibit 3.1

AMENDED AND RESTATED BYLAWS

OF

ALLIANCE ONE INTERNATIONAL, INC.

(as last amended on March 23, 2011)

ARTICLE I

Capital Shares

Section 1. Certificates . Shares of Alliance One International, Inc. (the “Corporation”) may be certificated or uncertificated. Certificated shares shall be in forms prescribed by the Board of Directors and executed in any manner permitted by law and stating thereon the information required by law. Transfer agents and/or registrars for one or more classes of the stock of the Corporation may be appointed by the Board of Directors and may be required to countersign certificates representing stock of such class or classes. In the event that any officer whose signature or facsimile thereof shall have been used on a stock certificate shall for any reason cease to be an officer of the Corporation, such certificate may nevertheless be issued and delivered as though such person had not ceased to be an officer of the Corporation. Transfer books in which shares shall be transferred shall be kept by the Corporation or by one or more transfer agents appointed by it. A record shall be kept of each share that is issued. Within a reasonable time after the issuance or transfer of uncertificated shares of the Corporation, the Corporation shall send, or cause to be sent, to the holder a written statement that shall include the information required by law to be set forth on certificates for shares of capital stock.

Section 2. Transfer of Shares . Certificated shares of the Corporation shall be transferable or assignable only on the books of the Corporation by the holders in person or by his or her attorney on surrender of the certificate for such shares duly endorsed and, if sought to be transferred by attorney, accompanied by a written power of attorney to have the same transferred on the books of the Corporation. Uncertificated shares shall be transferable or assignable only on the books of the Corporation upon proper instruction from the holder of such shares (in accordance with procedures adopted from time to time by the President or the Secretary). The Corporation shall recognize the exclusive right of the person registered on its books as the owner of shares to receive dividends and to vote as such owner.

Section 3. Lost Destroyed and Mutilated Certificates . After receiving notice from a shareholder of any loss, destruction or mutilation of a share certificate, the Secretary or his nominee may in his discretion cause one or more new certificates or uncertificated shares for the same number of shares in the aggregate to be issued to such shareholder upon the surrender of the mutilated certificate or upon satisfactory proof of such loss or destruction and the deposit of a bond in such form and amount and with such surety as the Secretary or his nominee may require.

Section 4. Record Date . For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than seventy (70) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders or shareholders entitled to receive payment of a dividend, the date on which notices of the meeting are first mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Article I (Section 4) such determination shall apply to any postponement or adjournment thereof unless the Board of Directors fixes a new record date, which it shall do if the meeting is postponed or adjourned to a date more then 120 days after the date fixed for the original meeting.

ARTICLE II

Shareholders

Section 1. Annual Meeting . Subject to the Board of Directors’ ability to postpone a meeting under Virginia law, the annual meeting shall be held on such date and at such time and place as may be fixed by the Board of Directors and stated in the notice of the meeting. The annual meeting shall be held for the purpose of electing directors and for the transaction of only such other business as is properly brought before the meeting in accordance with these bylaws. To be properly brought before an annual meeting of shareholders, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (iii) in the case of an annual meeting of shareholders, properly brought before the meeting by a shareholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice must be given, either by personal delivery or by United States mail, postage prepaid, to, and received by, the Secretary of the Corporation not later than one hundred twenty (120) days before the anniversary of the date of the Corporation’s annual meeting in the immediately preceding year. In no event shall the public announcement of an adjournment or postponement of an annual meeting or the fact that an annual meeting is held before or after the anniversary of the preceding annual meeting commence a new time period for the giving of a shareholder’s notice as described above. A shareholder’s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting (including the specific proposal to be presented) and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the shareholder proposing such business, (iii) the class and number of shares of the Corporation that are beneficially owned by the shareholder, (iv) a representation that the shareholder is a holder of record of shares of capital stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at such meeting to propose such business, (v) any material interest of the shareholder and any other person on whose behalf such

 

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proposal is made, in such business; (vi) a description (including the names of any counterparties) of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the shareholder’s notice by, or on behalf of, the shareholder or any other person on whose behalf the proposal is made, the effect or intent of which is to mitigate loss, manage risk or benefit resulting from share price changes of, or increase or decrease the voting power of the shareholder or any other person on whose behalf the proposal is made with respect to, shares of stock of the Corporation, (vii) a description (including the names of any counterparties) of any agreement, arrangement or understanding with respect to such business between or among the shareholder or any other person on whose behalf the proposal is made and any of its affiliates or associates, and any others acting in concert with any of the foregoing, and (viii) an agreement that the shareholder will notify the Corporation in writing of any changes to the information provided pursuant to clauses (iii), (vi) and (vii) above that are in effect as of the record date for the relevant meeting promptly following the later of the record date or the date notice of the record date is first publicly announced.

In the event that a shareholder attempts to bring business before an annual meeting without complying with the provisions of this Article II (Section 1) or fails to comply with the agreement referenced in clause (viii) of the immediately preceding sentence, such business shall not be transacted at such meeting. The Chairman of the Board of Directors or other officer of the Corporation acting as chairman of the meeting shall have the power and duty (i) to determine whether any proposal to bring business before the meeting was made in accordance with the procedures set forth in this Article II (Section 1) and (ii) if any business is determined not to be proposed in compliance with this Article II (Section 1), to declare that such defective proposal shall be disregarded and that such proposed business shall not be transacted at such meeting. For purposes of these Bylaws, “public announcement” or “publicly announced” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended.

Section 2. Special Meetings . Special meetings of the shareholders may be held at any time and at any place designated in the notice thereof upon call of the Chairman of the Board of Directors, the Chief Executive Officer or a majority of the Board of Directors. At a special meeting no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting.

Section 3. Notice . Except as otherwise required by law, written or printed notice stating the date, time and place, and, in case of a special meeting, the purpose or purposes thereof, shall be given not less than ten (10) nor more than sixty (60) days before any such meeting to each shareholder of record entitled to vote at such meeting. Notice of meetings of the shareholders may be given by the delivery thereof to such shareholder personally or by the mailing thereof to such shareholder, in either such case at his or her address as it appears on the stock transfer books of the Corporation, or in any such other manner as may be permitted by the Virginia Stock Corporation Act, as in effect at the time (the “VSCA”) in compliance with the provisions thereof, including by “electronic transmission” (as defined in the VSCA). Notice given pursuant to this Article II (Section 3) shall be deemed given at the time specified in the VSCA for the particular form of notice used. Meetings may be held without notice if all of the shareholders entitled to vote at the meeting waive such notice, by attendance at the meeting or otherwise, in accordance with law.

 

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Section 4. Quorum; Adjournments . A majority of the votes entitled to be cast by any voting group on any matter, represented in person or by proxy, shall constitute a quorum of such voting group with respect to action on such matter. The Chairman of the Board or any presiding officer acting as chairman of the meeting shall have power to adjourn or postpone any meeting of the shareholders from time to time (i) because of the absence of a quorum at any meeting or any adjournment thereof, or (ii) for any other reason, in any such case without notice other than announcement at the meeting before adjournment or postponement (except as otherwise provided by statute). At such adjourned or postponed meeting any business may be transacted that could have been transacted at the meeting as originally notified.

Section 5. Voting . Except as otherwise specified in the Articles of Incorporation or the VSCA, at all meetings of the shareholders, each holder of an outstanding share may vote in person or by proxy, and shall be entitled to one vote on each matter voted on at such meeting for each share registered in the name of such shareholder on the books of the Corporation on the record date for such meeting. Unless a greater vote is required pursuant to the Articles of Incorporation or the VSCA, if a quorum exists, action on a matter (other than the election of Directors) by a voting group is approved if the votes cast favoring the action exceed the votes cast opposing the action. Unless otherwise provided in the Articles of Incorporation, directors shall be elected by a plurality of votes cast by shares entitled to vote in the election at a meeting at which a quorum is present.

Section 6. Appointment of Proxy . Appointment of a proxy may be accomplished by the shareholder or such shareholder’s duly authorized attorney-in-fact or authorized officer, director, employee or agent signing an appointment form authorizing another person or persons to act for the shareholder as proxy or causing such shareholder’s signature to be affixed to such appointment form by any reasonable means, including, but not limited to, by facsimile signature. Any such appointment form shall bear a date not more than eleven (11) months prior to such meeting, unless such appointment form provides for a longer period. All appointment forms shall be effective when received by the Secretary or other officer or agent of the Corporation authorized to tabulate votes. The President and Chief Executive Officer or the Secretary may approve procedures to enable a shareholder or a shareholder’s duly authorized attorney-in-fact to authorize another person or persons to act for him or her as proxy by transmitting or authorizing the transmission of a telegram, cablegram, internet transmission, telephone transmission or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such transmission must either set forth or be submitted with information from which the inspectors of election can determine that the transmission was authorized by the shareholder or the shareholder’s duly authorized attorney-in-fact. If it is determined that such transmissions are valid, the inspectors shall specify the information upon which they relied. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Article II (Section 6) may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

 

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Section 7. Voting List . The officer or agent having charge of the stock transfer books for shares of the Corporation shall make, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, with the address of and the number of shares held by each. Such list, for a period of ten (10) days prior to such meeting, shall be kept on file at the registered office of the Corporation or at its principal place of business or at the office of its transfer agent or registrar and shall be subject to inspection by any shareholder at any time during usual business hours.

Section 8 Presiding Officer . All meetings of the shareholders shall be presided over by the Chairman of the Board of Directors or, in his absence or at his request, by the Chief Executive Officer, or in the absence of the Chief Executive Officer, the member of Board of Directors appointed by the Board of Directors to serve as lead independent director or any other person appointed by the Board. The presiding officer shall have the power to adjourn the meeting. In case none of the Chairman of the Board of Directors, the President or the member of Board of Directors appointed by the Board of Directors to serve as lead independent director or other Board-appointed presiding officer is present, the meeting shall elect a chairman. The Secretary or, in his absence or at his request, an Assistant Secretary shall act as secretary of such meetings. In case there be present neither the Secretary nor an Assistant Secretary, a secretary may be appointed by the chairman of the meeting.

Section 9. Inspectors . One or more inspectors for any meeting of shareholders shall be appointed by the chairman of such meeting. Inspectors so appointed will open and close the polls, will receive and take charge of proxies and ballots and will decide all questions as to the qualifications of voters, validity of proxies and ballots, and the number of votes properly cast.

ARTICLE III

Directors

Section 1. General Powers . The business and the affairs of the Corporation shall be managed under the direction of the Board of Directors, and, except as expressly provided by law, the Articles of Incorporation or these bylaws, all of the powers of the Corporation shall be vested in such Board of Directors.

Section 2. Number and Election of Directors . The number of directors constituting the Board of Directors shall be nine (9), who shall be divided into three classes, Class I, Class II and Class III, as nearly equal in number as possible. Directors of each class shall be elected by the shareholders to serve for the terms specified in the Articles of Incorporation and, unless sooner removed in accordance with the Articles of Incorporation and applicable law, shall serve until their respective successors are duly elected and qualified. Any vacancy may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, and directors so chosen shall hold office until the next annual meeting of the shareholders. At such annual meeting of the shareholders, the shareholders shall elect a director to fill the vacancy, and the newly elected director shall hold office for a term expiring at the annual meeting of the shareholders at which the term of the class to which he has been elected expires.

 

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Section 3. Nomination of Directors . Subject to the rights of holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, nominations for the election of directors shall be made by the Board of Directors or a committee appointed by the Board of Directors or by any shareholder entitled to vote in the election of directors generally. However, any shareholder entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting only if written notice of such shareholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to, and received by, the Secretary of the Corporation not later than (i) with respect to an election to be held at an annual meeting of shareholders, one hundred twenty (120) days before the anniversary of the date of the Corporation’s annual meeting in the immediately preceding year, and (ii) with respect to an election to be held at a special meeting of shareholders for the election of directors, the close of business on the seventh day following the date on which notice of such meeting is first given to shareholders. In no event shall the public announcement of an adjournment or postponement of an annual meeting or the fact that an annual meeting is held before or after the anniversary of the preceding annual meeting commence a new time period for the giving of a shareholder’s notice as described above. Each notice shall set forth: (i) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) the class and number of shares of the Corporation that are owned by the shareholder and any other person on whose behalf the nomination is made, (iii) a representation that the shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iv) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (v) a description (including the names of any counterparties) of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the shareholder’s notice by, or on behalf of, the shareholder and any other person on whose behalf the nomination is made, the effect or intent of which is to mitigate loss, manage risk or benefit resulting from share price changes of, or increase or decrease the voting power of the shareholder or any other person on whose behalf the nomination is made with respect to, shares of stock of the Corporation, (vi) a description (including the names of any counterparties) of any agreement, arrangement or understanding with respect to such nomination between or among the shareholder or any other person on whose behalf the nomination is made and any of its affiliates or associates, and any others acting in concert with any of the foregoing, (vii) an agreement that the shareholder will notify the Corporation in writing of any changes to the information provided pursuant to clauses (ii), (v) and (vi) above that are in effect as of the record date for the relevant meeting promptly following the later of the record date or the date notice of the record date is first publicly announced, and (viii) such other information regarding each nominee proposed by such shareholder as would be required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required to be disclosed, pursuant to other applicable laws, had the nominee been nominated, or intended to be nominated, by the Board of Directors; and shall include a signed consent of each such nominee to being named in the proxy statement for such meeting as a nominee and to serve as a director of the Corporation if so elected. The Chairman of the Board or other officer of the Corporation acting as chairman of the meeting shall have the power and duty to determine whether such a proposed nomination has been made in compliance with this

 

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Article III (Section 3) and, if any proposed nomination is determined not to comply, or if the shareholder making such nomination fails to comply with the agreement referenced in clause (vii) of the immediately preceding sentence, the nomination shall be disregarded, and such nominee shall not be eligible or stand for election at such meeting.

Section 4. Annual Meeting . Unless otherwise provided by a resolution adopted by the Board of Directors, a regular annual meeting of the Board of Directors shall be held following the adjournment of the annual meeting of the shareholders at such place as the Board of Directors may designate. The regular annual meeting of the Board of Directors shall be held for the election of officers of the Corporation and the transaction of all other business as shall come before the such meeting.

Section 5. Special Meeting . Special meetings of the Board of Directors may be called at any time by the Chairman of the Board of Directors, the Chief Executive Officer or by any two members of the Board of Directors on such date and at such time and place as may be designated in such call, or may be held on any date and at any time and place without notice by the unanimous written consent of all the members or by the presence of all of the members at such meeting.

Section 6. Notice of Meetings . Notice of the time and place of every meeting of the Board of Directors shall be mailed, telephoned or transmitted by any other means of telecommunication by or at the direction of the Secretary or other officer of the Corporation to each director at his last known address not less than twenty-four (24) hours before such meeting, provided that notice need not be given of the annual meeting or of regular meetings held at times and places fixed by resolution of the Board of Directors. Such notice need not describe the purpose of a special meeting. Meetings may be held at any time without notice if all the directors waive such notice, by attendance at the meeting or otherwise, in accordance with law.

Section 7. Quorum: Presence at Meeting . A quorum at any meeting of the Board of Directors shall consist of a majority of the number of directors fixed from time to time in these bylaws. Members of the Board of Directors may participate in any meeting of the Board of Directors by means of a conference telephone or similar communication equipment whereby all persons participating in the meeting may simultaneously hear each other, and participation by such means shall constitute presence in person at such meeting.

Section 8. Voting . If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board of Directors, unless the Articles of Incorporation or these bylaws require the vote of a greater number of directors. A director who is present at a meeting of the Board of Directors or any committee thereof when corporate action is taken is deemed to have assented to the action unless (i) he objects at the beginning of the meeting, or promptly upon his arrival, to holding it or transacting specified business at the meeting, or (ii) he votes against, or abstains from, the action taken.

Section 9. Compensation of Directors . Directors, as such, shall not receive any stated salary for their services, except that, by resolution of the Board of Directors, directors may be paid (i) an amount determined by the Board of Directors for their services as such, (ii) an additional amount determined by the Board of Directors for their services as Chairman of the Board of Directors or Chairman or member of any special or standing committee of the Board of

 

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Directors, and (iii) a fixed sum and expenses for attendance at each regular, adjourned, or special meeting of the Board of Directors or any special or standing committee thereof, which amounts may be paid in cash or other property, including equity awards as may from time to time be authorized under plans approved by the shareholders. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore.

Section 10. Chairman of the Board of Directors . The Board of Directors shall elect from its number at each annual meeting a Chairman of the Board of Directors, who shall preside at all meetings of the shareholders, the Board of Directors and the Executive Committee and shall have such other powers as may be conferred upon him by the Board of Directors. The Board of Directors may also elect from time to time a Vice Chairman of the Board of Directors. Either the Chairman or Vice Chairman also may serve in such capacity as an officer of the Corporation subject to Article V below, with such duties and powers as may be conferred upon him by the board of Directors. Subject to the provisions of the Articles of Incorporation, the Chairman or Vice Chairman of the Board of Directors may withdraw, resign or be removed at any time, and any vacancy occurring therefrom or from any other cause whatever may be filled by a majority of the number of directors fixed by these bylaws.

ARTICLE IV

Executive and Other Committees

Section 1. Creation of Executive Committee . There shall be an Executive Committee of the Board of Directors which shall consist of not less than three (3) directors. Subject to the provisions of the Articles of Incorporation of the Corporation, the members of the Executive Committee shall serve until the Board of Directors designates their successors or until removed. Except as otherwise provided by the Articles of Incorporation or these bylaws, the Executive Committee, when the Board of Directors is not in session, shall have all powers vested in the Board of Directors by law, by the Articles of Incorporation or by these bylaws; provided, that the Executive Committee shall not have the authority to take any action that may not be delegated to a committee under the VSCA. The Executive Committee shall report at the next regular or special meeting of the Board of Directors on action which the Executive Committee has taken since the last regular or special meeting of the Board of Directors.

Section 2. Audit Committee . The Board of Directors, by resolution adopted by a majority of the number of directors fixed in accordance with these bylaws, shall elect an Audit Committee, having the membership, powers and authority set forth in a charter adopted by resolution of the Board. Such charter may be amended from time to time by resolution of the Board.

Section 3. Committee on Executive Compensation . The Board of Directors, by resolution adopted by a majority of the number of directors fixed in accordance with these bylaws, shall elect a Committee on Executive Compensation having the membership, powers and authority set forth in a charter adopted by resolution of the Board. Such charter may be amended from time to time by resolution of the Board.

 

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Section 4. Governance and Nominating Committee . The Board of Directors, by resolution adopted by a majority of the number of directors fixed in accordance with these bylaws, shall elect a Governance and Nominating Committee having the membership, powers and authority set forth in a charter adopted by resolution of the Board. Such charter may be amended from time to time by resolution of the Board.

Section 5. Other Committees . The Board of Directors, by resolution adopted by a majority of the number of directors fixed in accordance with these bylaws, may establish such other standing or special committees of the Board of Directors as it may deem advisable, consisting of two (2) or more directors. The members, terms and authority of such committees shall be in the resolutions enabling the same.

Section 6. Meetings . Regular and special meeting of any committee established pursuant to this Article may be called and held subject to the same requirements with respect to date, time, place and notice as are specified in these bylaws for regular and special meetings of the Board of Directors.

Section 7. Quorum and Manner of Acting . A quorum of the members of any committee serving at the time of any meeting thereof for the transaction of business at such meeting shall consist of a majority of such members. The action of a majority of those members present at a committee meeting at which a quorum is present shall constitute the act of the committee.

Section 8. Term of Office . Members of any committee shall be elected as above provided and shall hold office until their successors are elected by the Board of Directors or until the Board of Directors dissolves such committee.

Section 9. Resignation and Removal . Subject to the Articles of Incorporation, any member of a committee may resign at any time by giving written notice of his intention to do so to the Chairman of the Board, President or the Secretary, or may be removed, with or without cause, at any time by such vote of the Board of Directors as would suffice for his election.

Section 10. Vacancies . Subject to the provisions of the Articles of Incorporation, any vacancy occurring in a committee resulting from any cause whatever may be filled by a majority of the number of directors fixed by the bylaws.

ARTICLE V

Officers

Section 1. Required Officers . The officers of the Corporation shall be a Chief Executive Officer, a President, and a Secretary, together with such other officers, including one or more Executive Vice Presidents, one or more Vice Presidents (whose seniority and titles may be specified by the Board of Directors) and a Treasurer, as may be elected from time to time by the Board of Directors. Any two or more offices may be held by the same person.

Section 2. Election of Officers: Compensation . The officers of the Corporation shall be elected by the Board of Directors and shall hold office until the next annual meeting of the Board of Directors and until their successors are duly elected and qualified; provided, however, that any

 

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officer may be removed and the resulting vacancy filled at any time, with or without cause, by the Board of Directors. The salaries or compensation of all officers of the Corporation shall be fixed by or pursuant to the direction of the Board of Directors.

Section 3. The Chief Executive Officer . The Chief Executive Officer shall be primarily responsible for the implementation of policies of the Board of Directors. He shall have authority over the general management and direction of the business and operations of the Corporation and its divisions, if any, subject only to the ultimate authority of the Board of Directors. Except as otherwise provided in these bylaws, in the absence of the Chairman, the Chief Executive Officer shall preside at all corporate meetings. He may sign and execute in the name of the Corporation share certificates, deeds, mortgages, bonds, contracts or other instruments except in cases where the signing and the execution thereof shall be expressly and exclusively delegated by the Board of Directors or by these bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed. In addition, he shall perform all duties incident to the office of Chief Executive Officer and such other duties as from time to time may be assigned to him by the Board of Directors.

Section 4. President . The President shall perform such duties as shall be required of him by the Chief Executive Officer or Board of Directors. The President may sign and execute in the name of the Corporation share certificates, deeds, mortgages, bonds, contracts or other instruments except where the signing and execution of such documents shall be expressly and exclusively delegated by the Board of Directors, the Chief Executive Officer or by these bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed. During the absence or inability of the Chief Executive Officer to act, the President shall act in the place of the Chief Executive Officer and shall be the Acting Chief Executive officer of the Corporation.

Section 5. Vice Presidents . The Vice Presidents shall perform such duties as shall be required of them by the Chief Executive Officer, the President or the Board of Directors. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments except where the signing and execution of such documents shall be expressly and exclusively delegated by the Board of Directors, the Chief Executive Officer or the President or by these bylaws to some other officer or agent of the Corporation or shall be required by law otherwise to be signed or executed.

Section 6. Secretary . The Secretary shall prepare and maintain custody of the minutes of all meetings of the Board of Directors and shareholders of the Corporation. When requested, he shall also act as secretary of the meetings of the committees of the Board of Directors. He shall see that all notices required to be given by the Corporation are duly given and served; he shall have custody of all deeds, leases, contracts and other important corporate documents; he shall have charge of the books, records and papers of the Corporation relating to its organization and management as a corporation; and he shall in general perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Chief Executive Officer, the President, or the Board of Directors. An Assistant Secretary may exercise any of the functions or perform any of the duties of the Secretary.

Section 7. Treasurer . The Treasurer shall have custody of the moneys and securities of the Corporation, shall sign or countersign such instruments as require his signature and shall perform

 

10

such other duties as may be incident to his office or are properly required of him by the Chief Executive Officer, the President or the Board of Directors. An Assistant Treasurer may exercise any of the functions or perform any of the duties of the Treasurer.

ARTICLE VI

Miscellaneous

Section 1. Voting of Shares . Shares of any corporation which this Corporation shall be entitled to vote may be voted either in person or by proxy, by the Chief Executive Officer, the President or by any other officer expressly authorized by this Corporation’s Board of Directors or Executive Committee, and each such officer is authorized to give this Corporation’s consent in writing to any action of such corporation, and to execute waivers and take all other necessary action on behalf of the Corporation with respect to such shares.

Section 2. Seal . The corporate seal of the Corporation shall consist of a flat-faced circular die, of which there may be any number of counterparts, on which there shall be engraved two concentric circles between which is inscribed the name of the Corporation and in the center the year of its organization and the word “corporate seal”.

Section 3. Control Share Acquisitions . Article 14.1 of Chapter 9 of Title 13.1 of the Code of Virginia (“Control Share Acquisitions”) shall not apply to the Corporation.

Section 4. Amendments to Bylaws . Unless proscribed by the Articles of Incorporation, the Board of Directors of the Corporation shall have the power to adopt and from time to time amend, alter, change or repeal these bylaws with or without the approval of the shareholders of the Corporation, but bylaws so made, amended, altered or changed, may be further altered changed or repealed by the shareholders. The shareholders in adopting or amending a particular bylaw may provide expressly that the Board of Directors may not amend or repeal that bylaw.

 

11

Exhibit 10.1

CONSULTING AGREEMENT

WHEREAS, Alliance One International, Inc. (“AOI”) is in need of consulting services, and in particular is looking to retain a consultant to serve as Consultant and Interim Chief Executive Officer (“Consultant and Interim CEO”); and

WHEREAS, Meriturn Partners is a Company with expertise in assisting companies with restructuring efforts, and Meriturn is willing to provide consulting services to AOI; and

WHEREAS, Mark Kehaya is a partner in Meriturn Partners, LLC, and Kehaya has significant knowledge and experience in AOI’s industry due to his prior employment with AOI’s predecessor, and his long service on AOI’s Board of Directors,

NOW THEREFORE, the parties agree as follows:

 

1. Agreement . This Consulting Agreement (hereinafter the “Agreement”) is entered into as of December 1, 2010 (the “Effective Date”), by and between Alliance One International, Inc., a Virginia corporation (“AOI”), and Meriturn Partners, LLC (“Meriturn”), and to confirm his acceptance of the individual obligations in Sections 2, 10, 11, 12, 13 and 15 and the provisions of Section 21, Mark Kehaya has also executed this Agreement.

 

2. Position and Responsibilities . Meriturn agrees that it shall provide consulting services to AOI as of December 1, 2010 and these services shall include providing a Consultant and Interim CEO and such other temporary staff as it may from time to time require to supplement its consulting functions. The Consultant and Interim CEO shall be Mark Kehaya (“Kehaya”), who shall begin performing services effective December 14, 2010. Meriturn may assign other temporary staff to assist Kehaya in providing consulting services to AOI at no additional cost to AOI, with advance notice to AOI and with AOI’s express agreement to the use of such additional resources. Meriturn and Kehaya shall perform the services assigned to him by AOI’s Board of Directors (the “Board”). Meriturn and Kehaya shall perform and discharge those services consistent with this position or such other positions as may be assigned to him by the Board, to the reasonable satisfaction of the Board. Nothing in this Agreement shall limit the reasonable expansion and/or change in the scope of Meriturn’s services. Kehaya will devote the majority of his professional and business-related time, skills and best efforts to fully perform his duties as Consultant and Interim CEO. AOI understands and agrees that Kehaya will remain as a partner in Meriturn, and that Kehaya may perform limited consulting and other services for Meriturn so long as those services do not interfere with his ability to fully perform his duties as Consultant and Interim CEO for AOI. Meriturn agrees to require Kehaya to comply with all of AOI’s policies, standards and Code of Business Conduct, as they may be modified by AOI from time to time, and to follow the instructions and directives promulgated by the Board.

 

3. Term . The Initial Term of this Agreement will be for a period of twelve months, beginning on the Effective Date. The Initial Term will automatically renew for additional, successive three month periods (each such renewal is a “Renewal Term”) unless either party gives the other notice in writing 30 days prior to the end of the Initial Term or any Renewal Term.

 

4. Compensation . AOI will pay Meriturn the gross amount of Forty Five Thousand Three Hundred Seventy Five Dollars ($45,375) per month for services performed by Meriturn under this Agreement. Payment for each month’s services will be made by the end of that month. Any partial months will be paid on a pro-rata basis.

 

5. Independent Contractor . The parties understand and agree that Meriturn is an independent contractor, and that Kehaya and other temporary staff assigned by Meriturn to assist AOI are not employees of AOI. Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, employment or joint venture relationship between Meriturn, its partners and employees, and AOI.

 

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6. Federal, State and Local Taxes . Because Meriturn’s partners and employees are not employees of AOI, neither federal, state, nor local income tax, nor any other payroll tax of any kind, shall be withheld or paid by AOI on behalf of Meriturn or any of its employees. In accordance with the terms of this Agreement and the understanding of the parties herein, Meriturn’s employees and partners are not employees of AOI and shall not be treated as such with respect to the services performed hereunder for federal or state or local tax purposes.

 

7. Fringe Benefits . Because Meriturn is engaged as an independent contractor, its employees and partners are not eligible for, nor entitled to, and shall not participate in, any of AOI’s pension, health or other fringe benefit plans. Because Meriturn is engaged as an independent contractor, AOI will not provide workers’ compensation insurance for Meriturn’s employees and partners. Meriturn shall provide AOI with evidence of workers’ compensation coverage for its workers as required by law.

 

8. Insurance . Meriturn shall maintain insurance of the types and in the amounts typically maintained by businesses of the same type as that of Meriturn.

 

9. Termination of Engagement . The Initial Term or any Renewal Term may be terminated as provided in this Section.

 

  9.1 Termination by AOI for Cause. AOI may terminate Meriturn’s engagement immediately for any of the following causes and reasons: (A) any violation of this Agreement, (B) Meriturn or Kehaya is convicted of or enters a plea of nolo contendere to a felony or misdemeanor involving moral turpitude; (C) Kehaya’s substance abuse which the Board determines in good faith adversely affects his ability to perform his duties; (D) Meriturn or Kehaya engages in conduct that constitutes gross neglect or gross misconduct in carrying out its/his duties under this Agreement, resulting in material harm to the financial condition or reputation of AOI; (E) Meriturn or Kehaya engages in any act of dishonesty or theft, fraud, embezzlement, or unauthorized use of the property of AOI; (F) Meriturn or Kehaya usurps or diverts any business opportunity of AOI for personal benefit; (G) Meriturn or Kehaya refuses to comply with lawful directives of the Board; or (H) Meriturn or Kehaya violates AOI’s rules, policies, or Code of Business Conduct, or otherwise demonstrates unacceptable or disruptive behavior which AOI determines in good faith adversely affects its/his ability to perform its/his duties or results in material harm to the financial condition or reputation of AOI. AOI may also terminate Meriturn’s engagement due to Kehaya’s failure to perform his duties in a satisfactory matter, as determined by AOI in good faith, provided however that AOI shall first have given Meriturn written notice of the failure or refusal to perform duties in a satisfactory manner and a 30 day period to cure before termination of the engagement. A termination by AOI under this Section 9.1 is referred to hereinafter as a termination for “Cause.” A termination for Cause shall be effective immediately or at such other time as AOI may determine.

 

  9.2 Death. Meriturn’s engagement shall terminate immediately in the event of Kehaya’s death.

 

  9.3 Notice. Either party may terminate this Agreement and end Meriturn’s engagement at any time upon thirty (30) days written notice.

 

  9.4 Payments Due Upon Termination of Engagement. In the event Meriturn’s engagement with AOI is terminated, Meriturn shall be entitled to the pro-rata portion of the payment specified in Section 4 which has been earned prior to the termination date, and shall not be entitled to any other payment pursuant to this Agreement.

 

10.

Return Of Property . Immediately upon the termination of Meriturn’s engagement for whatever reason or during the engagement whenever requested by AOI, Meriturn and Kehaya will return to AOI all of AOI’s

 

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property in Meriturn’s or Kehaya’s possession or control, including, but not limited to, all documents, keys, office supplies, and computer and office equipment. Meriturn further acknowledges that as a result of Meriturn’s engagement with AOI, Meriturn and/or Kehaya may come into the possession and control of tangible Confidential Information, as that term is defined in this Agreement, belonging to AOI, including, but not limited to proprietary documents, files, plans, computer programs and records, or other proprietary material. Immediately upon the termination of Meriturn’s engagement for whatever reason or during such engagement whenever requested by AOI, Meriturn and Kehaya shall return to AOI, and shall not retain, any and all such Confidential Information and any copies or other recordings of such materials in whatever form.

 

11. Non-Competition . Meriturn and Kehaya acknowledge and agree that AOI is a leading independent leaf tobacco merchant which selects, purchases, processes, packs, stores and ships leaf tobacco. Meriturn and Kehaya acknowledge and agree that AOI is a global company, has employees and offices in many countries, conducts business and provides services throughout the world, and is actively engaged in further developing its global operations and reach. Meriturn and Kehaya further acknowledge and agree that Meriturn and Kehaya are responsible for and directly involved in developing goodwill and business relationships for the benefit of AOI; Meriturn and Kehaya are responsible for the operation and development of AOI’s business in North Carolina, the United States, and many locations and countries in the world where AOI actively engages in business or actively seeks business; Meriturn and Kehaya have knowledge of AOI’s most proprietary and valuable Confidential Information, and have been and will be compensated for the development, and supervising the development, of the same; and that Meriturn and Kehaya have unique insight into and knowledge of the skills, talents and capabilities of AOI’s key employees. Meriturn and Kehaya further acknowledge and agree that the covenants contained in Sections 10, 11, 12, 13 and 15 of this Agreement are reasonable and necessary to protect the legitimate business interests of AOI, in view of, among other things, the short duration of the restrictions, the narrow scope of the restrictions, and AOI’s interests in protecting its goodwill, valuable Confidential Information, trade secrets, and its business relationships with customers throughout the world. Kehaya agrees that his professional activities are broad based and include involvement in industries other than leaf tobacco and his background and capabilities will allow him to seek and accept employment acceptable to him without violation of the restrictions contained in this Agreement. Meriturn and Kehaya acknowledge and agree that this Agreement, including the compensation that both Meriturn and Kehaya will obtain by virtue of this Agreement, constitutes sufficient consideration for the promises set forth in Sections 10, 11, 12, 13 and 15 of this Agreement. Meriturn agrees that its business is broad based and focused on industries other than leaf tobacco, and it will be able to carry on its business without violation of the restrictions contained in this Agreement.

 

  11.1 Meriturn and Kehaya covenant and agree that during the Restricted Period, and within the Restricted Territory (as defined below), neither of them will solicit or accept any Competitive Business from, or engage in any Competitive Business with, any Customer or Prospective Customer of AOI, whether for Kehaya’s or Meriturn’s own account and personal benefit or as an employee, contractor, owner, or Meriturn of a third party or other person or entity. This restriction shall apply only to those Customers and Prospective Customers of AOI with which Kehaya or any AOI employee directly reporting to Kehaya has had business contacts or dealings, or about which Kehaya or any AOI employee directly reporting to him has had knowledge of Confidential Information, or about which Kehaya or any AOI employee directly reporting to him has had knowledge of AOI’s products or services provided or proposed to be provided to or for the Customer or Prospective Customer.

 

  11.2 Meriturn and Kehaya covenant and agree that during the Restricted Period and within the Restricted Territory (as defined below), neither of them will compete with AOI by engaging in any capacity in the ownership, management, supervision, operation or control of a business that competes with AOI or conducts Competitive Business, or by working or providing services for a business that competes with AOI or offers or conducts Competitive Business in any capacity in which Meriturn or Kehaya would be assisting directly in conducting Competitive Business.

 

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  11.3 For the purposes of the covenants in Section 11 and 12 of this Agreement, the following definitions shall apply:

 

  11.3.1 “Restricted Period” shall mean shall mean the duration of Meriturn’s engagement by AOI and the twelve (12) month period immediately following the termination of Meriturn’s engagement with AOI by either party at any time for any reason.

 

  11.3.2 “Restricted “Territory” means the geographic areas and locations where AOI and its affiliates carry on or transact their business, AOI and its affiliates sell or market their products or services, and AOI or its affiliates’ customers are located, including without limitation (A) the world, (B) Africa, Asia, Europe, North America and South America, (C) each of the countries in Africa, Asia, Europe, North America and South America, respectively, as if listed individually herein, (D) Brazil, (E) the United States of America, (F) each of the states of the United States of America as if listed individually herein, (G) the State of North Carolina, (H) the Commonwealth of Virginia, (I) each county within the State of North Carolina as if listed individually herein, (J) each county within the Commonwealth of Virginia as if listed individually herein, (K) the territory within a 100 mile radius of AOI’s office in Morrisville, North Carolina, and (L) the territory within a 100 mile radius of each other office of AOI or any affiliate (whether now existing or hereafter established) as if listed individually herein.

 

  11.3.3 “Competitive Business” shall mean soliciting, pursuing, obtaining, making or performing a contract or agreement for the purchase or funding of products or services that are the same as, substantially similar to, or otherwise competitive with AOI’s products or services, which contract or agreement would (i) replace, substitute for, take the place of, supersede, supplement, eliminate, reduce, diminish, alter, compete against or adversely affect in any way an existing or prospective contract or agreement between AOI and any of its Customers or Prospective Customers, and/or (ii) provide for the purchase or funding of new products or services that are the same as, substantially similar to, or otherwise competitive with AOI’s products or services.

 

  11.3.4 “Customer” of AOI shall mean any person, government agency, company or other entity or organization that has purchased AOI’s products or services, or contracted or agreed with AOI for the purchase of AOI’s products or services, within the twelve (12) month period preceding Meriturn’s or Kehaya’s breach or attempted breach of any of the covenants in Sections 11 and 12 of this Agreement with respect to said Customer.

 

  11.3.5 “Prospective Customer” of AOI shall mean any person, government agency, company or other entity or organization with which AOI had substantive discussions, or to which AOI made a presentation or submitted a quote or proposal, concerning the purchase of AOI’s products or services within the twelve (12) month preceding Meriturn’s or Kehaya’s breach or attempted breach of any of the covenants contained in Sections 11 and 12 of this Agreement with respect to said Prospective Customer.

 

  11.3.6 “AOI,” including all references to “AOI” in each of the above definitions, shall include its subsidiaries and affiliates.

 

  11.4 Nothing in this Agreement shall be construed to prevent Meriturn or Kehaya from, or require AOI’s consent to: (i) investing personal assets in businesses that do not compete with AOI, or (ii) purchasing securities in any corporation whose securities are listed on a national securities exchange or regularly traded in the over-the-counter market, provided that neither Meriturn nor Kehaya owns, directly or indirectly, in excess of one percent (1%) of the outstanding stock of any class of any such corporation engaged in a business competitive with that of AOI.

 

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12. Covenants Against Solicitation .

 

  12.1 Meriturn and Kehaya covenant and agree that during the Restricted Period, and within the Restricted Territory, neither Meriturn nor Kehaya will (i) either individually or for or through any third party or other person or entity, induce, advise, request, solicit, influence or attempt to induce, advise, request, solicit or influence any Customer or Prospective Customer of AOI to cease, limit, reduce, avoid or adversely alter its purchasing of AOI’s products or services, or its contracting or agreeing with AOI for purchase of AOI’s products or services, or (ii) divert from AOI, or take any action detrimental to, the existing and prospective business or contractual relationships between AOI and any of its Customers or Prospective Customers.

 

  12.2 Meriturn and Kehaya covenant and agree that during the Restricted Period, Meriturn and Kehaya will not, whether for Meriturn’s or Kehaya’s own account or for the account of a third party or other person or entity, hire, employ, solicit, endeavor to entice away from AOI, or otherwise interfere with the relationship of AOI with, any employee or contractor who is employed by or under contract with AOI or who was employed by or under contract with AOI during the twelve (12) month period preceding the breach or attempted breach of this restriction.

 

13. Confidentiality . Except as necessary for the purpose of performing Meriturn’s obligations under this Agreement or pursuant to written authorization from AOI, or as required by law, Meriturn and Kehaya shall hold in confidence and shall not: (a) directly or indirectly reveal, report, publish, disclose or transfer Confidential Information to any person or entity; (b) use any Confidential Information for any purpose other than for the benefit of AOI; or (c) assist any person or entity other than AOI to secure any benefit from the Confidential Information.

 

  13.1 “Confidential Information” shall mean any confidential or proprietary information of AOI or its affiliates that has been disclosed or revealed to Meriturn or Kehaya or has been obtained, developed, or known by Meriturn or Kehaya in connection with, as a consequence of, or through the performance of, Meriturn’s services for AOI, including but not limited to know-how, trade secrets, software, disks, plans, designs, processes, formulas, manufacturing techniques, discoveries, inventions and ideas, product specifications, machinery, drawings, photographs, equipment, devices, tools and apparatus, sales and marketing data and plans, pricing and cost information, contract and proposal information, customer and supplier information, hiring and personnel information, financial information, and any other technical or business information which AOI or its affiliates have disclosed or revealed to Meriturn or Kehaya, or which have been obtained, developed, or known by Meriturn or Kehaya, as a consequence of, or through the performance of, Meriturn’s services for AOI, or in connection with Meriturn’s services or any other activities for AOI.

 

  13.2 Meriturn and Kehaya agree that prior to responding to any valid subpoena, court order or other legal process which would require disclosure of Confidential Information encompassed by this paragraph, he or it shall promptly give AOI prior written notice of the subpoena, court order or other legal process in order to afford AOI an opportunity to challenge the subpoena, court order or other legal process.

 

  13.3 Meriturn and Kehaya understand and agree that Meriturn’s and Kehaya’s obligations with respect to Confidential Information are continuing obligations and that any breach of these obligations may result in immediate termination of the engagement. Meriturn’s and Kehaya’s obligations under this Section 13 shall survive the termination of Meriturn’s engagement for any reason for a period of five (5) years after such termination with respect to Confidential Information that does not rise to the level of trade secrets under applicable law and for so long as such Confidential Information is a trade secret under applicable law (or for the maximum duration provided under such law) to the extent such Confidential Information rises to the level of a trade secret under applicable law.

 

14.

Indemnification . Subject to the requirements of this Section, AOI shall indemnify and hold Meriturn and Kehaya harmless from and against any judgments, fines, interest, charges, penalties or amounts paid in settlement, plus reasonable expenses (including reasonable attorneys’ fees), as a result of any civil

 

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liability, offense, action or proceeding arising, incurred, made or threatened to be made, by reason of Kehaya acting within the course and scope of his authority as Consultant and Interim CEO or by reason of any temporary staff assigned by Meriturn to provide consulting services acting within the course and scope of their authority to the fullest extent permitted by AOI’s Articles of Incorporation and applicable law. However, AOI will have no obligation to indemnify and hold Meriturn or Kehaya harmless pursuant to this Section unless (i) Meriturn and Kehaya promptly notify AOI’s Chief Legal Officer of any claim for which indemnity is sought, and (ii) AOI is afforded at its election the opportunity to defend such claim on Kehaya’s or Meriturn’s behalf.

 

15. Inventions, Ideas, And Other Intellectual Developments . Meriturn and Kehaya agree to disclose promptly to AOI, or as directed by AOI, all discoveries, improvements, inventions, works of authorship and other intellectual property conceived or made by Meriturn or Kehaya alone or with others during the engagement hereunder which result from or relate to any services provided by Meriturn or Kehaya to AOI (collectively, “Inventions”). Meriturn and Kehaya acknowledge and agree that all rights, including all patent, copyright, trademark, trade secret and other intellectual property rights with respect to Inventions that (i) were created using property, equipment, supplies, facilities or Confidential Information of AOI; or (ii) were created during the hours for which Meriturn is to be or was compensated by AOI; or (iii) originated with the business of AOI or its actual or demonstrably anticipated research and development; or (iv) result, in whole or in part, from work performed by Meriturn or Kehaya for AOI (collectively “AOI Inventions”) (in each case, whether or not disclosed to AOI) shall belong to AOI, or its assigns. Meriturn and Kehaya hereby assign to AOI any rights it or he may have or acquire in AOI Inventions, including without limitation (a) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any AOI Invention and (b) all rights in any continued prosecution applications or requests for continued examination of counterparts thereof and all continuations, divisions and continuations-in-parts thereof, and all supplementary protection certificates, extensions, reissues, re-examinations and patents issuing therefrom in the U.S. and non-U.S. jurisdictions relating to such AOI Inventions. Meriturn and Kehaya acknowledge that copyrightable works prepared by Meriturn and/or Kehaya within the scope of this Agreement are “works made for hire” under the Copyright Act and that AOI will be considered the author of these works. Neither Meriturn nor Kehaya shall knowingly infringe on any third party’s intellectual property rights in the performance of Meriturn’s services hereunder.

 

  15.1 Meriturn and Kehaya further agree, both during and after the term of this Agreement, as to all such AOI Inventions to assist AOI in every proper way (at AOI’s expense) to obtain and from time to time enforce patents, copyrights or other rights on said AOI Inventions in any and all countries, and to that end Meriturn and Kehaya will execute all documents for use in applying for and obtaining such patents and copyrights thereon and enforcing same, as AOI may desire, together with any assignments thereof to AOI or persons designated by it. Meriturn and Kehaya’s obligation to assist AOI in obtaining and enforcing patents, copyrights or other rights for such AOI Inventions in any and all counties shall continue beyond the termination of Meriturn’s engagement, but AOI shall compensate Meriturn or Kehaya at a reasonable rate after such termination for time actually spent by Meriturn or Kehaya at AOI’s request on such assistance, unless such time is necessitated by a breach by Meriturn or Kehaya of any of his or its obligations hereunder. In the event that AOI is unable for any reason whatsoever to secure Meriturn or Kehaya’s signature to any lawful and necessary document required to apply for or execute any patent, copyright or other applications with respect to such AOI Inventions and improvements (including renewals, extensions, continuations, divisions or continuations in part thereof), Meriturn and Kehaya hereby irrevocably designate and appoint AOI and its duly authorized officers and agents, as Meriturn’s and Kehaya’s agents and attorneys-in-fact to act for and in Meriturn’s and Kehaya’s behalf and instead of Meriturn and/or Kehaya, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by Meriturn and/or Kehaya. In the event that AOI executes any document as attorney-in-fact on behalf of Meriturn and/or Kehaya, AOI will take reasonable steps to notify Meriturn and/or Kehaya of such execution as soon as possible after such execution. Meriturn and Kehaya each further expressly acknowledge and agree that the foregoing power of attorney is coupled with an interest and is therefore irrevocable.

 

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  15.2 To the extent that Meriturn and/or Kehaya has any right of attribution and/or integrity in or to any specific portion of the AOI Inventions under the laws of the United States of America (including, but not limited to, Section 106A of the Copyright Act) or any foreign country, Meriturn and Kehaya hereby waive: (i) any right to prevent the distortion, mutilation, modification or destruction of the applicable AOI Invention, and (ii) any right to require that Meriturn’s or Kehaya’s name be used in association with that specific portion of the AOI Invention or with any work based thereon. The waiver specified by this Section 15.2 shall be for the benefit of AOI and shall survive the expiration or termination of Meriturn’s engagement with AOI or this Agreement for any reason.

 

16. Notices . Any notice hereunder shall be given in writing by personal delivery or by facsimile transmission or by nationally recognized air courier, charges prepaid. Any notice to Meriturn or Kehaya or to AOI shall be sent to the address indicated as follows:

 

If to AOI:    Alliance One International, Inc.
   P.O. Box 2009
   8001 Aerial Center Parkway
   Morrisville, NC 27560
   Attention: Robert Sheets
If to Meriturn:    Meriturn Partners, LLC
   3364 Washington Street
   San Francisco, CA 94118
   Attn: Lee Hansen
If to Kehaya:    Mark W. Kehaya
   2805 Lakeview Drive
   Raleigh, NC 29609

Each party may designate by notice any other address to which notices shall be sent. A notice shall be deemed given at the time of personal delivery, when sent by facsimile transmission, or at the time of confirmed delivery by a nationally recognized air courier.

 

17. Entire Agreement; Amendment . This Agreement contains the entire agreement of the parties, and supersedes any prior written or oral agreements between the parties with respect to the subject matter hereof. This Agreement may be modified or amended, if the amendment is made in writing and is signed by AOI and Meriturn; and if Kehaya is to be bound by a modification or amendment to Sections 10, 11, 12, 13 or 15, is also signed by Kehaya.

 

18. Severability; Waiver . If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited. The waiver by any party of compliance with any provision of this Agreement by another party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

 

19. Survivorship . The respective rights and obligations of AOI, Meriturn and Kehaya hereunder shall survive any termination of Meriturn’s engagement to the extent necessary to the intended preservation of such rights and obligations.

 

20. Assignment; Binding Effect . Neither Kehaya nor Meriturn may assign or transfer their rights or delegate their duties, responsibilities, or obligations under this Agreement to any person, firm, or corporation without the prior written consent of AOI. This Agreement and all of AOI’s rights and obligations hereunder may be assigned, delegated or transferred by AOI to any affiliate or subsidiary of AOI or to any business entity which at any time by merger, consolidation or otherwise acquires all or substantially all of the assets of AOI or to which AOI transfers all or substantially all of its assets. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto, and any successors to or assigns of AOI.

 

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21. Governing Law . This Agreement shall be governed and construed in accordance with the laws of the State of North Carolina. The parties hereto hereby agree that the appropriate and convenient forum and venue for any disputes between any of the parties hereto arising out of this Agreement shall be the courts in North Carolina and each of the parties hereto hereby submits to the personal jurisdiction of any such court. The foregoing shall not limit the rights of any party to obtain execution of judgment in any other jurisdiction.

 

22. Headings; Counterparts . The headings of the sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute a single document.

IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date and year first above written.

 

ALLIANCE ONE INTERNATIONAL, INC.     MERITURN PARTNERS, LLC
By:  

/s/ William S. Sheridan

    By:  

/s/ Lee C. Hansen

       William S. Sheridan            Managing Member
Title:   Member, Executive Committee of the Board of Directors      
MARK KEHAYA      

/s/ Mark Kehaya

     

 

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Exhibit 10.2

This document constitutes part of a prospectus covering securities that have been registered

under the Securities Act of 1933.

Amended and Restated

Alliance One International, Inc.

2007 Incentive Plan

Form of Grant Agreement

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

This Non-Qualified Stock Option Award Agreement (this “Agreement”), effective as of the      day of              , 20      (the “Date of Award”), between Alliance One International, Inc., a Virginia corporation (the “Company”), and                      (the “Participant”) is made pursuant and subject to the provisions of the Amended and Restated Alliance One International, Inc. 2007 Incentive Plan (the “Plan”), a copy of which has been made available to the Participant.

RECITAL:

The Plan provides for the grant of Non-Qualified Stock Option Awards to eligible employees designated by the Committee. The Committee has determined that Non-Qualified Stock Option Awards will encourage eligible employees to contribute to the profits and growth of the Company and its Affiliates, and that the Participant can be expected to make such a contribution.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1. Defined Terms . Capitalized terms used but not defined in this Agreement shall have the meaning set forth for those terms in the Plan.

 

2. Non-Qualified Stock Option Award . Pursuant to the terms of the Plan, the Company on the Date of Award grants the Participant, subject to the terms and conditions of the Plan and subject further to the terms and conditions set forth herein, the right and option to purchase from the Company all or any part of an aggregate of                      shares of Common Stock of the Company (the “Option”).

 

3. Terms and Conditions .

 

  a. Vesting. Except as otherwise provided in Section 3(b) hereof, the Participant’s interest in the Option shall vest and become exercisable with respect to one-fifth of the shares of Common Stock subject to this option on each of the first, second, third, fourth and fifth anniversaries of the Date of Award.

 

  b. Effect of Termination of Employment. Notwithstanding anything to the contrary herein, all of the Participant’s unvested Options shall be forfeited upon termination of the Participant from the employ of the Company and its Affiliates for any reason other than Retirement. If employment is terminated due to Retirement, the Participant’s interest in the option shall continue to vest as provided in Section 3(a) hereof. Once the option becomes exercisable in accordance with Section 3(a) hereof, it shall be exercisable until the termination of the Participant’s rights hereunder pursuant to paragraphs 4, 5, 6, 7 or 8 or until the Expiration Date.

  c. Initial Value. The Initial Value of the Option (per share of Common Stock covered by the Option) is $              (the “Option Price”). The Fair Market Value of a share of Common Stock on the Date of Award is              .

 

  d.

Term. The term of the Option shall expire and the Option shall no longer be exercisable on              , the tenth (10 th ) anniversary of the Date of Award (the “Expiration Date”).

 

  e. Manner of Exercise. The Option may be exercised during its term only to the extent it has vested. The Option shall be exercised by transmittal of written notice (which may be done by email or via the plan administrator’s website). along with payment of the Option Price from Participant to the Company’s plan administrator, whose contact details are provided under separate cover, which shall state the number of shares of Common Stock covered by the Option that are being exercised. The Option may be exercised in whole or in part. The Option may only be exercised as to a whole number of shares of Common Stock covered by the Option. Upon any exercise of the Option, the balance of the shares of Common Stock covered by the Option shall be reduced by the number of shares of Common stock included in such exercise. No fractional share of Common Stock shall be deliverable upon the exercise of an Option, and, in lieu thereof, the Company shall make a cash payment to Participant based on the Fair market value on the Date of Exercise.

The option price shall be payable to the Company in whole or in part (i) in cash or (ii) by surrendering shares of Common Stock to the Company or (iii) by authorizing a Company-approved third party to sell the shares (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire purchase price and any tax withholding resulting from such exercise. In the event of payment pursuant to clause (iii), the Company may instruct the broker to deposit the entire sale proceeds into a Company owned account for further distribution to the Participant, net of the entire purchase price and any tax withholding resulting from such exercise.

 

  f. Withholding. The number of shares of Common Stock or cash to be delivered to Participant upon exercise of the Option shall be reduced by the number of shares having a Fair Market Value on the Date of Exercise equal to all taxes (including, without limitation, federal, state, local or foreign income or payroll taxes), if any, required by law to be withheld in connection with the exercise of the Option.

 

  g. Non-transferability. The Option may not be transferred, in whole or in part, except (i) by will or the applicable laws of descent and distribution or (ii) with the prior written approval of the Committee, to Participant’s children, grandchildren or spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners.

 

  h. Misconduct. The Committee shall have the authority to cancel, rescind, cause the forfeiture of or otherwise limit or restrict the Option awarded under this Agreement if the Committee determines that Participant has (i) violated the Company’s Code of Conduct (as in effect from time to time); (ii) violated any law (other than misdemeanor traffic violations) and thereby injured or damaged the business reputation or prospects of the Company or an Affiliate; or (iii) engaged in intentional misconduct that caused, or materially contributed to, the need for a substantial restatement (voluntary or required) of the Company’s financial statements filed with the Securities and Exchange Commission (the foregoing enumerated items being hereinafter referred to, individually or collectively, as a “Prohibited Activity”).

 

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Furthermore, in the event the Committee in its discretion determines that the Participant has engaged in a Prohibited Activity at any time prior to the later of six months after the settlement of any portion of the Option, the Committee may rescind any such settlement hereunder, provided the Committee takes such action within two years after the occurrence of the Prohibited Activity. Upon such rescission, the Company at its sole option, may require the Participant to (a) deliver and convey to the Company the shares of Common Stock issued in settlement of the Option awarded hereunder; (b) in the case any such shares of Common Stock have been sold in a market transaction to an unrelated party by Participant, pay to the Company an amount equal to the proceeds from the sale of such shares; (c) in the case any such shares of Common Stock have otherwise been disposed of by Participant, pay to the Company an amount in cash equal to the product of the number of such shares multiplied by the Fair Market Value on the date the Committee determined that the Participant has engaged in the Prohibited Activity pursuant to paragraph 3(i) hereof; (d) pay to the Company an amount of cash equal to the amount of cash paid by the Company in settlement of any Option in lieu of a fractional share. The Company shall be entitled to set-off any such amount owed to the Company against any amount or benefit owed to Participant by the Company, and Participant shall forfeit the amount or benefit applied to set-off such amount owed to the Company. Further, if the Company commences an action against Participant (by way of claim or counterclaim and including declaratory claims), in which it is preliminarily or finally determined that Participant engaged in a Prohibited Activity, Participant shall reimburse the Company for all costs and fees incurred in such action, including but not limited to, the Company’s reasonable attorneys’ fees.

 

4. Exercise after Retirement or Disability . If the Participant’s employment is terminated by Retirement or Disability, the Option, to the extent exercisable, may be exercised at any time prior to the Expiration Date.

 

5. Exercise in the Event of Death . If the Participant’s employment is terminated by death, the Option, to the extent then exercisable, may be exercised at any time during the first year following the date of death, but in no event after the Expiration Date.

 

6. Exercise in the Event of Resignation or Termination for Cause . If the Participant’s employment is terminated by resignation or for cause, the Option will thereupon terminate.

 

7. Exercise in the Event of Other Termination . If the Participant’s employment is terminated for a reason other than those referred to in Sections 4 through 6 above, the Option, to the extent then exercisable, may be exercised prior to the Expiration Date or within one year following the date of termination of employment, whichever is the shorter period.

 

8. Exercise in the Event of Death Following Termination . If the Participant’s employment is terminated for a reason other than those referred to in Sections 4 through 6 above and the Participant dies during the period that the Participant is entitled to exercise the Option, the Option held by the Participant at the date of death may, notwithstanding Section 7 above, be exercised during the year following the date of the Participant’s death, but in no event after the Expiration Date.

 

9. Shareholder Rights . The Participant will have no voting, dividend or other shareholder rights with respect to shares of Common Stock covered by the Option until issuance of shares of Common Stock upon exercise. With respect to Common Stock issued to Participant upon the exercise of the Option, Participant will be treated as a shareholder and shall have applicable voting, dividend and other shareholder rights beginning on the actual date of issue.

 

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10. No Right to Employment . The Plan and this Agreement will not confer upon the Participant any right with respect to the continuance of employment or other service with the Company or any Affiliate and will not interfere in any way with any right that the Company or any Affiliate would otherwise have to terminate any employment or other service of the Participant at any time. For purposes of this Agreement, the continuous employ of the Participant with the Company or an Affiliate shall not be deemed interrupted, and the Participant shall not be deemed to have ceased to be an employee of the Company or any Affiliate by reason of (a) the transfer of his or her employment among the Company and its Affiliates or (b) an approved leave of absence.

 

11. Not Part of Regular Compensation . The Participant agrees and acknowledges that the Options and any benefits that may be earned with respect thereto are not and shall not be treated as part of the Participant’s regular compensation for any purpose.

 

12. Relation to Other Benefits . Except as specifically provided, any economic or other benefit to the Participant under this Agreement or the Plan will not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or any Affiliate and will not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or an Affiliate.

 

13. Retirement . For purposes of this Agreement, “Retirement” means the Participant’s early, normal or delayed retirement under the primary pension plan sponsored by the Company or an Affiliate in which the Participant is eligible to participate. The determination of the appropriate pension plan for the purpose of the foregoing definition shall be made by the Committee, and its determination shall be conclusive.

 

14. Disability . For purposes of this Agreement, “Disability” means that the Participant has ceased active employment with the Company and its Affiliates on account of a permanent and total disability as defined in Section 22(e)(3) of the Code.

 

15 . For Cause . For purposes of this Agreement, termination “for cause” means the termination of the Participant’s employment by the Company in connection with any Prohibited Activity of the Participant or as a result of the Participant’s serious neglect or misconduct in carrying out employment responsibilities and obligations or failure or refusal to faithfully and diligently to perform the customary duties of employment or failure or refusal to comply with reasonable policies, rules and regulations established from time to time by the Company’s Board of Directors, any duly authorized committee thereof or the Company’s Chief Executive Officer.

 

16. Change in Capital Structure . The terms of this Agreement are subject to adjustment by the Committee in accordance with Article XII of the Plan, subject to the limitations imposed by Article XI of the Plan.

 

17. Governing Law . This Agreement shall be governed by the laws of the Commonwealth of Virginia.

 

18. Conflicts . In the event of any conflict between the provisions of the Plan as in effect on the Date of Award and the provisions of this Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Date of Award.

 

19. Participant Bound by Plan . Participant hereby acknowledges that a copy of the Plan has been made available to the Participant and Participant agrees to be bound by all the terms and provisions thereof.

 

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20. Binding Effect . Subject to the limitations stated herein and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and the successors of the Company.

 

21. Severability . If any provision of this Agreement should for any reason be declared invalid or unenforceable by a court of competent jurisdiction, then this Agreement and the grant of Performance-based Stock Units hereunder shall be deemed invalid and unenforceable in its entirety due to failure of consideration.

 

22. Committee Discretion . The Committee shall have all of the powers granted under the Plan, including but not limited to the powers granted under Article III of the Plan and the authority and discretion to interpret the provisions of this Agreement and to make any decisions or take any actions necessary or advisable for the administration of this Agreement.

 

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