ALLIANCE ONE INTERNATIONAL, INC. SUPPLEMENTAL RETIREMENT ACCOUNT PLAN

Exhibit 10.6

ALLIANCE ONE INTERNATIONAL, INC.

SUPPLEMENTAL RETIREMENT ACCOUNT PLAN

Amended and Restated Effective January 1, 2009

ALLIANCE ONE INTERNATIONAL, INC. (the “Company”) established the ALLIANCE ONE INTERNATIONAL, INC. SUPPLEMENTAL RETIREMENT ACCOUNT PLAN (the “Plan”) effective April 1, 2007.  Prior to January 1, 2009, the Plan has been administered in good faith compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and guidance issued thereunder, including but not limited to Internal Revenue Service Notices 2005-1, 2006-79, 2007-78 and 2007-86 and proposed and final regulations published under Section 409A of the Code.  The Plan as amended and restated herein is generally effective as of January 1, 2009, and is intended to satisfy the requirements of Section 409A(a)(2), (3) and (4) of the Code.

Section 1
Purpose of the Plan

The Plan is a non-qualified supplemental retirement plan established to provide deferred compensation for a select group of management or highly compensated employees of the Company and certain of its affiliates.  The Plan is intended to be an unfunded plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended and the Internal Revenue Code of 1986, as amended.

Section 2
Definitions

2.1

“Accounting Firm” shall mean the accounting or consulting firm designated by the Administrator.

2.2

“Accrued Benefit” shall mean the balance credited to the Participant’s Supplemental Account as of the Benefit Settlement Date or the most recent Adjustment Date, following adjustment to such Account as of such Benefit Settlement Date or Adjustment Date as provided in Section 3.

2.3

“Adjustment Date” shall mean the last day of each Plan Year.

2.4

“Adjustment Rate” shall mean, for each Plan Year, the lesser of (a) the Moody’s Rate in effect as of the first business day of the Plan Year, or (b) the Applicable Federal Rate in effect for the first month of the Plan Year.

2.5

“Administrator” shall mean an administrative committee composed of the Company’s Senior Vice President – Human Resources and Vice President – Compensation and Benefits, provided that no member of such committee shall take part in any discretionary administrative decision with respect to such member’s benefits under the Plan.  The Administrator shall be the named fiduciary with respect to this Plan.  Notwithstanding the foregoing, the Compensation Committee in its discretion may remove or replace any member of the administrative committee, or name a different committee or an individual to serve as Administrator hereunder.  

2.6

“Affiliate” shall mean any related person or entity that along with the Company would be considered a single employer under Code Section 414(b) or (c), provided that in applying such rules the existence of a controlled group of corporations or of a group of trades or businesses under common control shall be based on a threshold of 50% instead of 80%.  A person or entity shall be considered an Affiliate only during the time it would be considered a single employer with the Company under such provisions.

2.7

“Applicable Federal Rate” shall mean 120% of the applicable federal long-term rate for annual compounding prescribed by the Secretary of the Treasury from time to time pursuant to Code Section 1274(d).

2.8

“Beneficiary” shall mean the person, persons, entity or entities designated or determined pursuant to the provisions of Section 5.5.

2.9

“Benefit Settlement Date” shall mean the date as of which a Participant’s Supplemental Account is valued for purposes of determining payments pursuant to Section 5.1 or 5.2.

2.10

“Capped Parachute Payments” shall mean the largest amount of Parachute Payments that may be paid to the Participant without liability under Code Section 4999.

2.11

“Change in Control” shall mean that (i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than 30% of the aggregate voting power of all classes of the Company’s voting securities on a fully diluted basis, after giving effect to the conversion of all outstanding warrants, options and other securities of the Company convertible into or exercisable for voting securities of the Company (whether or not such securities are then exercisable); (ii) the shareholders of the Company approve (A) a plan of merger, consolidation or share exchange between the Company and an entity other than a direct or indirect wholly-owned subsidiary of the Company or (B) a proposal with respect to the sale, lease, exchange or other disposal of all, or substantially all, of the Company’s property; or (iii) during any period of two consecutive years (which period may be deemed to begin prior to the date of this agreement), individuals who at the beginning of such period constituted the Company’s Board of Directors, together with any new members of the Board of Directors whose election by the Board of Directors or whose nomination for election by the shareholders of the Company was approved by a majority of the members of the Board of Directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors.

2.12

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

2.13

“Company” shall mean Alliance One International, Inc.

2.14

“Compensation” shall mean the base salary and annual bonus (without reduction for amounts withheld for taxes, contributions to benefit plans, or other required or voluntary deductions) actually paid by the Company and its Affiliates to the Participant during the Plan Year.  “Compensation” shall not include extra pay (for temporary foreign service or otherwise), commissions, severance pay, long-term bonuses based on performance over a period greater than one year, or any other form of remuneration that is not characterized by the Company or Affiliate as base salary or annual bonus.

2.15

“Compensation Committee” shall mean the Executive Compensation Committee of the Company’s Board of Directors.

2.16

“Competes” shall mean that the Participant, either directly or indirectly, either as principal, agent, employee, employer, owner, stockholder (owning more than 5% of the value of a corporation’s outstanding stock), partner, contractor, consultant or in any other individual or representative capacity, engages in the business of a tobacco dealer, importer or exporter or any other business in which the Company or an Affiliate is engaged at such time. If any provision of the preceding sentence or Section 4.3(a) is ever deemed to exceed the time, geographic area, or activity limitations permitted by applicable law, the Company and Participant (by virtue of his participation in the Plan), agree that such provisions must be and are reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and expressly authorize a court having jurisdiction to reform the provisions to the maximum time, geographic area and activity limitations permitted by applicable law.

2.17

“Control Change Date” shall mean the date on which all of the events necessary for a Change in Control have occurred.

2.18

“Disability” shall mean a disability that would entitle the Participant to collect benefits under the Company’s group long-term disability program, as determined by the Administrator and disregarding any exclusion period.  The insurance carrier’s determination of disability shall not be binding on the Administrator with respect to this Plan.

2.19

“Employee” shall mean a common-law employee of the Company or an Affiliate, as determined from the payroll records of the Company and its Affiliates.

2.20

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

2.21

“ Excess Parachute Payment Amount” shall mean the excess of the total amount of Parachute Payments over the amount of Capped Parachute Payments.

2.22

“Five Years of Service” shall mean sixty (60) months of active service as an Employee of the Company and its Affiliates, whether or not consecutive.  An Employee shall receive credit for one (1) month of active service for each calendar month in which he performs substantial services for the Company or an Affiliate, as determined by the Administrator.

2.23

“Moody’s Rate” shall mean the Moody’s Aa Corporate Bond Yield Average for maturities 20 years and above, as determined from time to time.

2.24

“Net After-Tax Amount” shall mean the amount of any Parachute Payments or Capped Parachute Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Participant as in effect on the date of the first payment under this Plan after the event giving rise to the Parachute Payments. The determination of the Net After-Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Parachute Payments, as applicable, in effect for the year in which the determination is made.

2.25

“Parachute Payment” shall mean a payment that is described in Code Section 280G(b)(2) (without regard to whether the aggregate present value of such payments exceeds the limit prescribed by Code Section 280G(b)(2)(A)(ii)). The amount of any Parachute Payment shall be determined in accordance with Code Section 280G and the regulations promulgated thereunder.

2.26

“Participant” shall mean a member of a select group of management or highly compensated employees of the Company and its Affiliates who is designated by the Compensation Committee as a Participant in this Plan.

2.27

“Plan” shall mean the Alliance One International, Inc. Supplemental Retirement Account Plan as set forth herein and as it may be amended from time to time.

2.28

“Plan Year” shall mean each twelve-month period ending on March 31.

2.29

“Retirement” shall mean a Participant’s voluntary Separation from Service after attaining age fifty-five (55) and completion of Ten Years of Service.

2.30

“Separation from Service” shall mean the Participant’s “separation from service” with the Company and its Affiliates within the meaning of Code Section 409A(a)(2)(A)(i) and applicable regulations and other guidance thereunder.  A Separation from Service shall not have occurred so long as the Participant continues to provide more than insignificant services as an employee, consultant or other service provider to the Company or any Affiliate.

2.31

“Spouse” or “Surviving Spouse” shall mean, except as otherwise provided in this Plan, the legally married spouse or surviving spouse of the Participant.

2.32

“Supplemental Account” shall mean the separate bookkeeping account maintained for the purpose of tracking the Participant’s Accrued Benefit.  The opening balance of each Participant’s Supplemental Account as of April 1, 2007 shall be $0.00.

2.33

“Ten Years of Service” shall mean one hundred twenty (120) months of active service as an Employee of the Company and its Affiliates, whether or not consecutive.  An Employee shall receive credit for one (1) month of active service for each calendar month in which he performs substantial services for the Company or an Affiliate, as determined by the Administrator.

Section 3
Supplemental Account

3.1

Establishment of Account .  The Administrator shall establish a notional account, entitled the “Supplemental Account”, on behalf of each Participant.  Each Participant’s Supplemental Account shall be credited with notional Company pay credits pursuant to the provisions of Section 3.2 and notional interest credits pursuant to the provisions of Section 3.3.

3.2

Company Pay Credits .

(a)

As of the last day of each Plan Year, the Administrator shall credit to the Supplemental Account of each Participant who is actively employed by the Company or an Affiliate on such last day a notional Company pay credit equal to a percentage of the Participant’s Compensation for the Plan Year, as follows:

(b)

If a Participant’s pay credit percentage is not specified in the preceding paragraph, the Compensation Committee in its discretion shall set the pay credit percentage at the time the Participant joins the Plan.  The Compensation Committee shall also have the power to change such Participant’s pay credit percentage from time to time in its discretion, provided that no such change shall be effective for any Plan Year prior to the date of the Compensation Committee’s decision to make the change.

(c)

The provisions of Section 3.2(a) requiring a Participant to be actively employed by the Company or an Affiliate on the last day of the Plan Year in order to receive a Company pay credit shall not apply to a Participant who dies or who Separates from Service on account of Retirement or Disability during the Plan Year.  The Administrator shall credit the Company pay credit to such Participant’s Supplemental Account as of the earlier of the last day of such Plan Year or the Participant’s Benefit Settlement Date.

3.3

Interest Credits .

(a)

The Administrator shall credit each Participant’s Supplemental Account as of each Adjustment Date with a notional interest credit equal to the balance of Participant’s Supplemental Account as of the first day of the Plan Year multiplied by the Adjustment Rate for the Plan Year.

(b)

If a Participant’s Benefit Settlement Date is not an Adjustment Date, the Administrator shall credit such Participant’s Supplemental Account as of his Benefit Settlement Date with a notional interest credit equal to the balance of Participant’s Supplemental Account as of the first day of the Plan Year multiplied by the pro-rated Adjustment Rate.  The pro-rated Adjustment Rate shall be equal to the Adjustment Rate for the Plan Year times a fraction, the numerator of which is the number of months in the Plan Year prior to the Benefit Settlement Date (including the month containing the Benefit Settlement Date), and the denominator of which is twelve (12).

(c)

No interest credits shall be credited to the Participant’s Supplemental Account after the Participant’s Benefit Settlement Date.

Section 4
Vesting

4.1

Vesting Events .  Subject to Section 4.3, a Participant shall be fully vested in his Accrued Benefit under this Plan upon the first to occur of the following dates while the Participant remains actively employed by the Company or an Affiliate:

(a)

The date of his death;

(b)

The date of his Separation from Service on account of Disability;

(c)

The date the Company terminates the Plan; or

(d)

Subject to Sections 4.3(b) and 11.1, the occurrence of a Change in Control.

4.2

Vesting Schedule .  Prior to the date of full vesting pursuant to Section 4.1 above, and subject to Section 4.3, a Participant shall become 100% vested in his Accrued Benefit upon completion of Five Years of Service.

4.3

Forfeiture Events .

(a)

A Participant shall cease to be a Participant on, and no benefits shall be payable under the Plan to a Participant or the Participant’s Surviving Spouse or other Beneficiary after, the date that Participant engages in conduct that Competes with the Corporation or an Affiliate. The provisions of this paragraph shall not apply on or after a Control Change Date.

(b)

In the event that the Participant’s employment with the Company or an Affiliate is terminated for cause, all rights of the Participant and any Beneficiary or other person claiming under or through him hereunder shall be forfeited and no further payments hereunder (pursuant to Section 5 or otherwise) shall be made to the Participant or any Beneficiary or other person claiming under or through him.  For purposes of this paragraph, Participant’s termination of employment will be deemed to have been “for cause” if the Compensation Committee determines that the Participant’s employment was terminated in whole or in part by reason of (i) one or more violations of the Company’s Code of Conduct (as in effect from time to time) or (ii) one or more violations of law (other than misdemeanor traffic violations) that injure or damage the business reputation or prospects of the Company or an Affiliate.

Section 5
Payment of Benefits

5.1

Payment of Benefits Following Separation from Service .  If the Participant is or becomes vested in his Accrued Benefit upon his Separation from Service (including but not limited to Separation from Service on account of Disability), benefits shall be payable to the Participant in accordance with this Section 5.1.

(a)

For purposes of this Section 5.1, the Participant’s Benefit Settlement Date shall be the last day of the sixth full calendar month following the Participant’s Separation from Service.

(b)

The Company shall pay the Participant’s benefits in one hundred twenty (120) equal monthly installments of principal and interest commencing in the month immediately following the Benefit Settlement Date and continuing for one hundred nineteen (119) consecutive months thereafter.  The monthly installment amount shall be computed as follows:

(i)

The balance of the Participant’s Supplemental Account as of the Benefit Settlement Date shall be treated as the principal amount due to the Participant under this Section 5.1.  The principal amount due shall accrue interest until fully