Exhibit
10.3
Alliance One International,
Inc.
2007 Incentive
Plan
Form of Grant
Agreement
PERFORMANCE-BASED RESTRICTED
STOCK UNIT AWARD
THIS AGREEMENT, made effective as of
the
day of
,
(the “Date of Award”), between Alliance One
International, Inc., a Virginia corporation (the
“Company”), and
(“Participant”), is made pursuant and subject to the
provisions of the Company’s 2007 Incentive Plan (the
“Plan”), a copy of which has been made available to the
Participant.
RECITAL:
The Plan provides for the grant of
Stock Unit Awards to eligible employees designated by the
Committee. The Committee has determined that performance-based
Stock Unit 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:
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1.
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Defined
Terms . Capitalized
terms used but not defined in this Agreement shall have the meaning
set forth for those terms in the Plan.
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2.
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Performance-Based Stock Unit
Award . The Company
grants
Stock Units to the Participant as of the Date of Award specified
above, subject to the restrictions and vesting requirements set
forth in this Agreement (the “Restricted Stock
Units”).
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3.
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Performance Criteria . Vesting of the Restricted Stock Units will
depend on the Company’s performance for the performance
period beginning on
and ending on
(the “Performance Period”). Unless otherwise provided
herein, no Restricted Stock Units will vest until the end of the
Performance Period. The Participant may vest in all or a portion of
the Restricted Stock Units if the Company’s Earnings Per
Share (“EPS”) for the Performance Period equals or
exceeds $
(the “Performance Threshold”), and the Participant
otherwise satisfies the requirements of this Agreement. For
purposes of this Agreement, the term “Earnings Per
Share” or “EPS” means fully diluted earnings per
share from continuing operations, as reported in the
Company’s audited financial statements; and the term
“Performance Target” means EPS of $
for the Performance Period. The term “Restricted Stock Units
Vested at Target” means
Restricted Stock Units.
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a.
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Basic
Formula . Subject to the
remaining provisions of this Section 3, the number of
Restricted Stock Units that will become vested shall be determined
by the Committee as a percentage of Restricted Stock Units that
Vest at Target, according to the following table:
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[INSERT TABLE]
Except as provided in paragraphs
3(c) and 3(d), the Participant will not vest in any of the
Restricted Stock Units if EPS for the Performance Period is less
than the Performance Threshold.
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b.
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Certification; Subjective Factors
. As soon as practicable after the
end of the Performance Period (or, if clause (iv) or
(v) of paragraph 3(c) applies, as soon as practicable after
termination of the Participant’s active employment or death),
the Committee shall certify the number of Restricted Stock Units
that will be deemed vested pursuant to this Section 3.
Notwithstanding any provision of this Agreement to the contrary,
the Committee in its discretion may decrease the number of
Restricted Stock Units that would otherwise be deemed vested
pursuant to this Section in recognition of other performance
factors that the Committee deems relevant. Restricted Stock Units
that are not certified by the Committee as vested will be forfeited
as of the last day of the Performance Period (or, if clause
(iv) or (v) of paragraph 3(c) applies, on the date of
termination of the Participant’s active employment or
death).
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c.
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Termination
of Employment Before Last Day of Performance Period
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i.
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Involuntary
Termination for Cause .
Upon the involuntary termination of the Participant from the employ
of the Company and its Affiliates for Cause prior to the last day
of the Performance Period, the Participant shall forfeit all
Restricted Stock Units hereunder. For purposes of this Agreement,
the Participant’s termination will be deemed to be an
involuntary termination for “Cause” only if the
Committee determines that the Participant engaged in a Prohibited
Activity (as defined in paragraph 5(d)) prior to such
termination.
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ii.
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Retirement
or Involuntary Termination Without Cause . Upon the Participant’s Retirement, or
the involuntary termination of the Participant from the employ of
the Company and its Affiliates without Cause, in either case prior
to the last day of the Performance Period:
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(1)
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The Performance
Threshold and Performance Period will remain unchanged;
but
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(2)
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Subject to the
Committee’s discretion to decrease the number of Restricted
Stock Units that vest hereunder based on other factors pursuant to
paragraph 3(b), the Restricted Stock Units that will become vested
at the end of the Performance Period pursuant to paragraph 3(a) (if
any) shall be prorated (rounded up to the nearest whole unit) based
on the ratio of the number of days during the two year period
beginning April 1, 2008, and ending March 31, 2010 (the
“Pro-Ration Period”) that the Participant remained in
the continuous employ of the Company or one of its Affiliates
through the date of such Retirement or involuntary termination, to
the total number of days in the Pro-Ration Period. Any Restricted
Stock Units that do not vest in accordance with this clause
(ii) shall be forfeited.
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See Exhibit A attached to this
Agreement for an example of how the provisions of this clause
(ii) apply.
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iii.
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Voluntary
Termination . Upon the
voluntary termination, for any reason other than Retirement or
Disability, of the Participant from the employ of the Company and
its Affiliates prior to the last day of the Performance Period, the
Participant shall forfeit all Restricted Stock Units
hereunder.
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iv.
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Disability . Upon the termination of the
Participant’s active employment with the Company and its
Affiliates prior to the last day of the Performance Period and on
account of Participant’s Disability:
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(1)
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The provisions
of paragraph 3(a) shall not apply;
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(2)
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Any Restricted
Stock Units that become vested pursuant to this clause
(iv) will be deemed to have vested on the date the
Participant’s active employment terminated on account of
Disability; and
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(3)
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Subject to the
Committee’s discretion to decrease the number of Restricted
Stock Units that vest hereunder based on other factors pursuant to
paragraph 3(b), the number of Restricted Stock Units that vest
shall be equal to a pro rated portion of the number of Restricted
Stock Units that would become vested at the end of the Performance
Period if EPS for the Performance Period equaled the Performance
Target, based on the ratio of the number of days during the
Pro-Ration Period that the Participant remained in the continuous
employ of the Company or one of its Affiliates through the date his
active employment terminated on account of Disability to the total
number of days in the Pro-Ration Period, and rounded up to the
nearest whole unit. Any Restricted Stock Units that do not vest in
accordance with this clause (iv) shall be
forfeited.
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See Exhibit A attached to this
Agreement for an example of how the provisions of this clause
(iv) apply.
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v.
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Death . Upon termination of Participant’s
employment with the Company and its Affiliates on account of his
death prior to the last day of the Performance Period:
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(1)
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The provisions
of paragraph 3(a) shall not apply;
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(2)
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Any Restricted
Stock Units that become vested pursuant to this clause
(v) will be deemed to have vested on the Participant’s
date of death; and
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(3)
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Subject to the
Committee’s discretion to decrease the number of Restricted
Stock Units that vest hereunder based on other factors pursuant to
paragraph 3(b), the number of Restricted Stock Units that vest
shall be equal to a pro rated portion of the number of Restricted
Stock Units that would become vested at the end of the Performance
Period if EPS for the Performance Period equaled the Performance
Target, based on the ratio of the number of days during the
Pro-Ration Period that the Participant remained in the continuous
employ of the Company through the date of his death to the total
number of days in the Pro-Ration Period, and rounded up to the
nearest whole unit. Any Restricted Stock Units that do not vest in
accordance with this clause (v) shall be forfeited.
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See Exhibit A attached to this
Agreement for an example of how the provisions of this clause
(v) apply.
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d.
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Change in
Control Before Last Day of Performance Period
. In the event of a Change in
Control of the Company prior to the last day of the Performance
Period and prior to the termination of the Participant’s
employment as described in clause (i), (iii), (iv) or
(v) of paragraph 3(c), the provisions of Article X of the Plan
shall apply, and the Committee shall determine whether and to what
extent the Participant’s Restricted Stock Units will be
deemed to be vested.
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4.
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Terms,
Conditions and Restrictions .
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a.
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Settlement
. If the Participant vests in some
or all of the Restricted Stock Units pursuant to Section 3,
the vested Restricted Stock Units shall be automatically redeemed
by the
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Company in accordance with this
Section. As soon as practicable after the Restricted Stock Units
vest, but in any event no later than December 31 in the
calendar year in which the Restricted Stock Units vest, the Company
will issue to the Participant (or his estate, if the Participant is
deceased) one whole share of Common Stock for each vested, whole
Restricted Stock Unit, plus one additional whole share of Common
Stock for any vested, fractional Restricted Stock Unit.
Notwithstanding the foregoing, if the Restricted Stock Units become
vested pursuant to clause (iv) or (v) of paragraph 3(c)
at any time in October, November or December, the deadline for
issuing shares shall be March 15 in the calendar year
immediately following the calend
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