Exhibit
10.4
Alliance One International,
Inc.
2007 Incentive
Plan
Form of Grant
Agreement
PERFORMANCE SHARE
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
Performance Shares to eligible employees designated by the
Committee. The Committee has determined that Performance Shares
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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Award of
Performance Shares .
The Company grants
Performance Shares to the Participant as of the Date of Award
specified above for the performance period beginning on
and ending on
(the “Performance Period”), subject to the restrictions
set forth herein. Unless otherwise provided herein, Performance
Shares shall not be earned until the end of the Performance
Period.
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3.
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Performance Criteria . The grant of Performance Shares in
Section 2 above is a target grant. The Participant may earn
all or a portion of the Performance Shares 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; the term
“Performance Target” means EPS of $
for the Performance Period. The term “Performance Shares
Earned at Target” means
Performance Shares.
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a.
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Basic
Formula . Subject to the
remaining provisions of this Section 3, the number of
Performance Shares earned by the Participant shall be determined by
the Committee as a percentage of Performance Shares Earned 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 earn any of the Performance
Shares 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 Performance Shares the
Participant has earned pursuant to this Section 3.
Notwithstanding any provision of this Agreement to the contrary,
the Committee in its discretion may decrease the number of
Performance Shares that would otherwise be deemed earned by the
Participant pursuant to this Section in recognition of other
performance factors that the Committee deems relevant. Performance
Shares that are not certified by the Committee as earned 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
Performance Shares. 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 4(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 Performance
Shares earned hereunder based on other factors pursuant to
paragraph 3(b), the Performance Shares earned by the Participant at
the end of the Performance Period pursuant to paragraph 3(a) (if
any) shall be prorated (rounded up to the nearest whole Performance
Share) 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 Performance
Shares that are not earned 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 Performance Shares.
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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 Performance
Shares earned pursuant to this clause (iv) will be deemed to
have been earned 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 Performance
Shares earned based on other factors pursuant to paragraph 3(b),
the Performance Shares earned by the Participant shall be equal to
a pro rated portion of the number of Performance Shares that would
be earned 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 share. Any
Performance Shares that are not earned 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 Performance
Shares earned pursuant to this clause (v) will be deemed to
have been earned 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 Performance
Shares earned based on other factors pursuant to paragraph 3(b),
the Performance Shares earned by the Participant shall be equal to
a pro rated portion of the number of Performance Shares that would
be earned 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 of his death to the total number
of days in the Pro-Ration Period, and rounded up to the nearest
whole share. Any remaining Performance Shares 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 Performance Shares will be deemed to
be earned.
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4.
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Terms,
Conditions and Restrictions .
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a.
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Settlement . As soon as practicable after the Committee
certifies the number of Performance Shares earned by the
Participant pursuant to Section 3, but in any event no later
than December 31 in the calendar year in which the Performance
Shares are earned, the Company will issue to the Participant (or
his estate, if the Participant is deceased) one whole share of
Common Stock for each whole Performance Share earned, plus one
additional whole share of Common Stock for any fractional
Performance Share earned. Notwithstanding the foregoing, if the
Performance Shares are earned pursuant to paragraph 3(c) or 3(d) at
any time in October, November or December, the deadline for issuing
shares shall be March 15 in the calendar year immediately
following the calendar year in which the Performance Shares are
earned.
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b.
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Holding
Period and Transfer Restrictions . Except as provided in paragraph 4(d), Common
Stock issued to the Participant pursuant to paragraph 4(a) (the
“Limited Shares”) shall be fully vested and
nonforfeitable on the date of
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