EXHIBIT
10.3
AMENDED AND
RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this
“Agreement”), made effective as of December 31, 2008,
by and between HENRY C. BABB, JR. (hereinafter
“Executive”), and ALLIANCE ONE INTERNATIONAL,
INC. , a Virginia corporation with principal offices in
Morrisville, North Carolina (hereinafter
“Company”).
R E C I T A L
S:
The
Company (as successor in interest to Standard Commercial
Corporation) and the Executive are parties to that certain
Employment Agreement dated January 1, 1998 (the “Original
Agreement”). The Company and the Executive have
concluded that the Original Agreement should be amended in
accordance with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”).
Accordingly, the Company and the Executive desire to amend
and restate the Original Agreement as set forth herein.
NOW,
THEREFORE , in
consideration of the mutual covenants and obligations herein and
the compensation the Company agrees herein to pay the Executive,
and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the
Executive agree as follows:
Section One -
Employment of Executive/Duties
A.
The
Company hereby employs the Executive and the Executive agrees to be
employed by the Company in the capacity of Senior Vice President
– Chief Legal Officer and Secretary, subject to the terms and
conditions set forth herein. The Executive will report to the
Company’s President and Chief Executive Officer
(“CEO”).
B.
The
Executive shall be responsible for keeping the corporate records
and providing legal counsel to the Company, through the CEO and
Board of Directors (“Board”). The Executive is
responsible for all legal matters of the Company and will be
responsible for coordinating the work of the Company’s
external counsel. This position is responsible for keeping the
official records of the Company, including the minutes of all Board
meetings, and is responsible for maintaining all compliance, SEC
and other regulatory filings.
C.
The
Executive shall devote his time, skill, attention and best efforts
to the business of the Company. Such time of the Executive shall be
devoted as shall be reasonably required to promote and protect the
best interest of the Company. The Executive may serve as a director
of or consultant to other corporations only to the extent that such
duties are known to and approved by the CEO. The Executive
shall not be restricted in making personal investments unless they
are prohibited under this Agreement or otherwise, or that may
detract from the time and attention devoted to the business of the
Company.
D.
The
Executive shall not be required to relocate his residence during
the term of this Agreement. The Executive agrees that he will be
required from time to time to travel on behalf of Company to meet
with customers, attorneys, accountants or conduct such other
business activity necessary to the conduct of the Company’s
business or that of its affiliates and subsidiaries.
Section Two -
Compensation
A.
The
Company shall pay the Executive an Annual Base Salary at the rate
of Three Hundred Thousand Dollars ($300,000) per year (the
“Annual Base Salary”), payable in equal monthly
installments unless the Company sets a different periodic basis for
payment of salaries, less deductions authorized by law. The Company
shall review the Executive’s salary annually.
B.
The
Executive shall be entitled to participate in the fringe benefit
programs which the Company may establish and modify from time to
time for the benefit of all its executive and management employees,
including, but not limited to, health insurance, disability
insurance, qualified stock option plans, non-qualified stock option
plans, qualified retirement plans, non-qualified retirement plans,
life insurance plans and executive incentive compensation plans,
provided that benefits shall not be duplicated for any specific
benefit afforded the Executive under the terms of this Agreement.
As of December 31, 2008, the Executive is a participant in
the programs listed on Exhibit A attached
hereto.
Section Three -
Vacation and Sick Leave
During the term
of his employment hereunder, the Executive shall be entitled to and
receive as an additional benefit at least four (4) weeks of
personal time off each fiscal year under and in accordance with the
Company’s Compensated Leave Policy (the “PTO
Policy”), during which time his compensation shall be paid in
full. Such personal time off shall be taken by the Executive at
such times as may be reasonably mutually agreed upon by the
Executive and the Company. If and to the extent the
provisions of the PTO Policy so provide, unused personal time off
existing at the time the Executive separates from service with the
Company shall be paid to him in cash in the month following his
separation at his then current Annual Base Salary.
Section Four -
Restrictive Covenants and Confidentiality of Customer Lists and
Trade Secrets
A.
The
Executive agrees that during the term of his employment and
permanently following termination of such employment for any reason
whatsoever, he will not disclose to any person, firm, association,
partnership, entity or corporation, other than in discharge of his
duties hereunder or pursuant to order of court, any governmental
agency, or at request of Company, any information the disclosure of
which is adverse to the business of the Company, including such
information related to: (1) the business operations or internal
structure of the Company; (2) the customers of the Company, (3) the
financial condition of the Company; and (4) other information
including but not limited to trade secrets, technical data, sales
figures and forecasts, marketing analysis and studies, customer and
price lists, including any and all of the foregoing confidential
information of any affiliates or subsidiaries of Company. All
papers and records of every kind, including all memoranda, lists,
tapes, notes, sketches, designs, plans, data and other documents,
whether made by the Executive or not, relating to the business and
affairs of the Company, its successors, affiliates and
subsidiaries, or to any business or field of investigation of the
Company which shall at any time come into possession or control of
the Executive, shall be surrendered to the Company, at the
Company’s expense, upon written request received while either
Executive is in the employ of the Company or after such employment
shall have ceased.
Section Five -
Change of Control
Should there be a
change in control of the Company either through a sale of its stock
or through a sale of its assets and the acquirer of control does
not prior to or upon completion of the sale offer the Executive
employment acceptable to him, the Executive may separate from
service with the Company following completion of the sale.
The Executive shall continue to receive his regular Annual
Base Salary through the end of the month of his separation from
service. In addition, in the first calendar month immediately
following such separation the Company shall pay to the Executive an
amount equal to two (2) years’ salary based on
Executive’s Annual Base Salary in effect at the time of
separation. Such payment will be reported as wages subject to
FICA, income tax and other required withholdings. If all or
any part of the amount payable pursuant to this Section is delayed
pursuant to Section 7(D), such amount shall bear interest until
paid at an annual rate of 5%.
Section Six -
Separation from Service
A.
The
Company may at any time terminate this Agreement and
Executive’s employment for cause. For this purpose
“cause” is defined to mean that the Executive has (i)
been guilty of serious neglect or misconduct in carrying out his
responsibilities and obligations hereunder, or (ii) failed or
refused faithfully and diligently to perform the customary duties
of his employment or failed to adhere to the provisions of this
Agreement; or (iii) failed or refused to comply with reasonable
policies, rules and regulations established from time to time by
the Company’s Board, any duly authorized committee thereof or
the CEO, or (iv) has violated the provisions of Section 4 hereof.
B.
The
Company may at any time on thirty (30) days written advance notice
terminate this Agreement and Executive’s employment other
than for cause, in which event:
1.
The
Executive shall continue to receive his regular base salary through
the end of the month of his separation from service.
2.
The
Company shall be obligated to pay to the Executive, as severance
pay, twenty-four (24) monthly payments commencing in the month
immediately following the date of his separation from service (the
“Separation Date”). Each monthly payment shall be
equal to one-twelfth of the Executive’s Annual Base Salary in
effect on the Separation Date. Payments to be made under this
paragraph are hereby designated and shall at all times be treated
as a series of separate payments and not a single payment pursuant
to Treasury Regulation § 1.409A-2(b)(2)(iii). To the
maximum extent permitted under Code Section 409A, the severance
payments described in this paragraph are intended to qualify as a
combination of short-term deferrals meeting the requirements of
Treas. Reg. § 1.409A-1(b)(4), and involuntary severance
payments meeting the limits of Treas. Reg. §
1.409A-1(b)(9)(iii), and this paragraph shall be construed in
accordance with such intent.
3.
The
Executive shall be entitled to the special health care benefits
described in this Section 6(B)(3).
(a)
The
Executive shall be entitled to participate (treating the Executive
as an “active employee” of the Company for this
purpose) in the Company’s Medical Plan for Salaried
Employees, as the same may be amended from time to time (the
“Company Medical Plan”) during the period commencing
immediately after participation would otherwise cease on account of
the Executive’s separation from service in the absence of
this Agreement (and without regard to the continuation of coverage
requirements of Section 4980B of the Code and Part 6 of Title I of
the Employee Retirement Income Security Act of 1974, as amended
(“COBRA”)), and ending on the earliest of (i) the last
day of the month that includes the second anniversary of the
Executive’s Separation Date; (ii) the date of
Executive’s death; or (iii) the last day of the month in
which the Executive becomes eligible for Medicare. The
coverage required to be provided to the Executive pursuant to this
Section 6(B)(3)(a) shall be referred to herein as the
“Extended Coverage” and the period during which the
Extended Coverage is provided shall be referred to herein as the
“Medical Plan Coverage Period.” The Company,
consistent with sound business practices, shall use its best
efforts to provide the Executive with the Extended Coverage under
the Company Medical Plan during the Medical Plan Coverage Period,
including, if necessary, amending the applicable provisions of the
Company Medical Plan and negotiating the addition of any
nec
