SETTLEMENT AGREEMENT AND RELEASE

Exhibit 10.1

SETTLEMENT AGREEMENT AND RELEASE

THIS SETTLEMENT AGREEMENT AND RELEASE (“Release”) is made and entered into by and between H. P. Green III (hereinafter “Executive”), and Alliance One International, Inc., a Virginia corporation (hereinafter the “Company”).

W I T N E S S E T H

WHEREAS, Executive entered into an Employment Agreement with Dibrell Brothers, Incorporated (“Dibrell”) on or about January 17, 1995 (the “1995 Agreement”); and

WHEREAS, the 1995 Agreement provides for certain benefits upon the termination of Executive’s employment under certain conditions; and

WHEREAS, the Company is offering additional benefits to Executive in exchange for Executive’s execution of a release of claims and agreement not to compete; and

WHEREAS, the Company elected pursuant to Section 3.2 of the 1995 Agreement to terminate Executive’s employment with the Company effective on March 31, 2007 (the “Termination Date”); and

WHEREAS, execution of and adherence to this Release provides Executive with benefits to which Executive is not otherwise entitled under the 1995 Agreement or otherwise, including but not limited to bringing compensation and benefits promised under the 1995 Agreement into compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

NOW, THEREFORE, in consideration of the premises and mutual promises contained in this Release, and other valuable consideration to which Executive is not otherwise entitled, the receipt and sufficiency of which are hereby acknowledged, it is agreed by the parties as follows:

1.

Termination of Employment .  Executive agrees that his employment with the Company ended on the Termination Date, and that Executive will not be employed after the Termination Date as an employee, director, consultant or independent contractor with the Company or any related person or entity that along with the Company would be considered a single employer under Code Section 414(b) or (c).

2.

Consideration .  As a material inducement to and in consideration for Executive entering into this Release, the Company agrees as follows:

a.

The Company shall pay Executive the gross amount of One Hundred Sixty-Five Thousand Three Hundred Eighty-Nine Dollars ($165,389).  This amount shall be paid in a lump sum on October 20, 2007, or within ten (10) business days thereafter.

b.

The Company shall pay Executive a monthly severance payment in the gross amount of Twenty-Three Thousand Three Hundred and Thirty-Three Dollars ($23,333) on the 20 ^th day of each month, or within ten (10) business days thereafter, for twelve (12) months, beginning on November 20, 2007.

c.

The Company shall pay Executive a monthly supplemental retirement benefit in the gross amount of Three Thousand Five Hundred Seventeen Dollars ($3,517) on the 20 ^th day of each month, or within ten (10) business days thereafter, for one hundred eight (108) months, beginning on November 20, 2008.

d.

The Company shall pay Executive a benefit determined in accordance with this paragraph.  The benefit shall be paid on the 20 ^th day of each month, or within ten (10) business days thereafter, beginning on November 20, 2007.  Benefit payments pursuant to this paragraph shall end on the earlier of March 20, 2017, or the 20 ^th day of the month in which the Executive dies.  If for any month the Company’s Medical Plan for Salaried Employees as amended from time to time (the “Medical Plan”) is not subject to Code Section 105(h), or if coverage for Executive and/or his Spouse is being provided under an Individual Policy (as defined in paragraph (f)(5) below), the benefits payable under this paragraph for such month shall be contingent on the Executive’s or his Spouse’s maintaining COBRA or post-COBRA Coverage for such month.  Each month’s payment shall be equal to the Net Premium Amount plus the Gross-up Amount.  For purposes of this paragraph:

1.

Until July 20, 2014, the “Net Premium Amount” shall be equal to the total amount Executive would have to pay for the month to cover himself and his Spouse (or to cover himself only in the event of his Spouse’s death prior to July 20, 2014) for COBRA or post-COBRA Coverage under the Medical Plan, as applicable, less the amount Executive would have been required to pay for such coverage under the Medical Plan had the Executive been a full-time salaried employee of the Company at the time.  For any period after July 20, 2014, and until March 20, 2017, the “Net Premium Amount” shall be equal to the total amount Executive would have to pay for the month to cover his Spouse for post-COBRA Coverage under the Medical Plan, less the amount Executive would have been required to pay to cover a spouse under the Medical Plan had the Executive been a full-time salaried employee of the Company at the time.  However, if coverage is being provided under an Individual Policy (as defined in paragraph (f)(5) below), the “Net Premium Amount” shall be determined as provided above in this clause (1) except that the amount shall be based on the premium actually paid under the Individual Policy less the amount a full-time salaried employee of the Company would pay for coverage under the Medical Plan at that time.

2.

The “Gross-up Amount” shall be determined pursuant to the following formula and expressing the Tax Rate as a decimal.  Provided, however, the Gross-up Amount for the month shall be zero if for such month the Medical Plan is not subject to Code Section 105(h), or coverage for Executive and/or his Spouse is being provided under an Individual Policy (as defined in paragraph (f)(5) below).

3.

The “Tax Rate” shall be equal to (A) the highest marginal income tax rate in effect at the time under Code Section 1(a) (the “Federal Rate”), plus (B) the highest marginal state income tax rate in effect at the time in North Carolina (the “State Rate”), minus (C) the Federal Rate times the State Rate.

4.

“Spouse” shall mean Executive’s spouse as of the Termination Date.  Executive’s spouse as of the Termination Date shall be considered his “Spouse” for purposes of this paragraph and paragraph (f) below notwithstanding any subsequent divorce, separation or remarriage.

Exhibit A attached to this Release and incorporated herein by reference illustrates the calculation of the payments required by this paragraph.

e.

All of Executive’s outstanding stock options and restricted stock awards identified on Exhibit B attached hereto and incorporated herein by reference shall become immediately and fully vested as of the Termination Date, and the shares of restricted stock subject to any such restricted stock awards shall become fully transferable and no longer subject to any restrictions of any kind.  In addition, all stock options identified on Exhibit B shall become immediately exercisable as of the Termination Date and shall remain exercisable until the earlier of (1) March 31, 2009, or (2) the expiration date specified in the award, without regard to whether Executive’s termination of employment would have provided for a shorter exercise period following such termination of employment.  The provisions of this paragraph shall apply to options that are incentive stock options even if such provisions cause some or all of such incentive stock options to cease to qualify as incentive stock options under Code Section 422.

f.

Executive and his eligible dependents shall be entitled to participate in the Medical Plan after the Termination Date as follows:

1.

Executive shall be entitled to participate in the Medical Plan after the Termination Date at the same cost as charged to active employees of the Company through October 31, 2007.  Executive and those of his eligible dependents who are covered under the Medical Plan as of October 31, 2007 shall be eligible for COBRA continuation coverage under the Medical Plan beginning on November 1, 2007.  For purposes of administering the COBRA continuation coverage rights of Executive and his eligible dependents, the Company and Executive agree that the qualifying event shall be deemed to occur on October 31, 2007.  Executive and his eligible dependents who elect COBRA continuation coverage shall pay the full COBRA rates for such coverage.

2.

If Executive exhausts his COBRA continuation coverage under the Medical Plan, he may elect to remain covered under the Medical Plan after his COBRA coverage ends (hereinafter referred to as “Post-COBRA Coverage”) in accordance with this paragraph.  For each month of Post-COBRA Coverage, Executive shall pay to the Company an amount equal to the full cost of such coverage on or before the last day of the preceding month.  The full cost of coverage each month shall be the greater of (i) the Medical Plan’s applicable COBRA rate for the month, or (ii) the actuarial cost determined by an enrolled actuary selected by the Company.  Executive’s Post-COBRA Coverage shall end on the earliest to occur of:

a)

The last day of the month for which Executive has paid the full cost of the Post-COBRA Coverage, in the event Executive fails to make a timely payment for coverage or Executive chooses to discontinue coverage;

b)

The date as of which Executive becomes eligible for coverage under Medicare (or its successor); and

c)

The date of Executive’s death.

3.

If Executive’s Spouse (as defined in paragraph (d) above) exhausts her COBRA continuation coverage under the Medical Plan and Executive elects Post-COBRA Coverage for himself pursuant to the preceding paragraph, Executive may also elect Post-COBRA Coverage for his Spouse.  If Executive elects Post-COBRA Coverage for his Spouse, Executive’s monthly payments for Post-COBRA Coverage shall be increased to reflect the additional cost of covering the Spouse (based on the greater of COBRA rates or the actuarial cost determined by an enrolled actuary selected by the Company).  Post-COBRA Coverage for Executive’s Spouse shall end on the earliest to occur of:

a)

The last day of the month for which Executive or his Spouse has paid the full cost of the Spouse’s Post-COBRA Coverage, in the event Executive fails to make a timely payment either for his coverage or for the Spouse;

b)

The last day of the month in which Executive or his Spouse chooses to discontinue Post-COBRA Coverage for the Spouse;

c)

The date as of which the Spouse becomes eligible for coverage under Medicare (or its successor); and

d)

The date of the Spouse’s death.

Notwithstanding the foregoing, the termination of Executive’s coverage on account of death, attainment of age 65 or Medicare eligibility shall not affect the Spouse’s eligibility for Post-COBRA Coverage.

4.

Executive and his spouse will each enroll in Medicare Parts A and B when they first become eligible, and they will be solely responsible for paying any applicable premiums or other charges for such coverage.  The Company will reimburse Executive and his spouse for any premiums they pay for Medicare Part D coverage and for coverage under a Medicare supplement policy, provided that Executive and his spouse provide to the Company such evidence of payment as the Company may reasonably request.

5.

If the Company ceases to provide group medical benefits to its salaried employees in the United States or the Company is otherwise unable to provide Executive or his Spouse with coverage under the Medical Plan in accordance with clauses (1) through (3) of this paragraph (f):

a)

The Company shall use its best efforts (consistent with sound business practices) to secure for Executive an individual policy of health insurance providing coverage for Executive and/or his Spouse (the “Individual Policy”) through the end of the respective periods of Post-COBRA Coverage described in clauses (2) and (3) above; and

b)

The Company shall use its best efforts (consistent with sound business practices) to secure coverage under the Individual Policy that is comparable to the coverage previously provided under the Medical Plan.

The Company shall provide ninety (90) days’ advance written notice to Executive before ceasing to provide group medical benefits for salaried employees in the United States, or ceasing to provide Executive or his Spouse with coverage under the Medical Plan in accordance with clauses (1)( through (3) of this paragraph (f).

g.

On or before December 31, 2007, the Company shall pay directly on Executive’s behalf the reasonable attorneys’ fees and related expenses incurred by Executive in connection with review and negotiation of this Release, provided that such fees and expenses are incurred on or before July 31, 2007.  The attorneys’ fees and expenses eligible for reimbursement under this paragraph shall not affect any expenses eligible for reimbursement or in-kind benefits to be provided in any other year.  Executive’s rights under this paragraph are not subject to liquidation or exchange for any other benefit.

h.

If Executive dies before receiving all of the payments due under paragraphs (a) through (c) of this Section, the unpaid amounts shall be payable to his designated beneficiary at the same times and in the same amounts as such payments would have been made had Executive survived.  Executive shall name one or more primary beneficiaries and one or more contingent beneficiaries, who shall be entitled to receive any death benefit payable under paragraphs (a) through (c) of this Section, which beneficiary or beneficiaries shall be subject to change from time to time by notice in writing to the Company.  A beneficiary may be a trust, an individual or Executive’s estate.  If Executive fails to designate a beneficiary, primary or contingent, then and in such event Executive’s surviving spouse shall be deemed to be the designated beneficiary, and if he shall leave no surviving spouse the designated beneficiary shall be Executive’s estate.  If a named beneficiary entitled to receive any payment hereunder is not living or in existence at the death of Executive or dies prior to asserting a written claim for any such death benefit, then and in any such event such death benefit shall be paid to the other primary beneficiary or beneficiaries named by Executive who shall then be living or in existence, if any, otherwise to the contingent beneficiary or beneficiaries named by Executive who shall then be living or in existence, if any.  If there are no primary or contingent beneficiaries then living or in existence, the benefit shall be paid to the surviving spouse of Executive or, if he shall leave no surviving spouse, then to Executive’s estate.  If a named beneficiary is receiving or is entitled to receive payments of any benefit hereunder and dies before receiving all of the payments due, any remaining benefits shall be paid to the other primary beneficiary or beneficiaries named by Executive who shall then be living or in existence, if any, otherwise to the contingent beneficiary or beneficiaries named by Executive who shall then be living or in existence, if any; but if there are no primary or contingent beneficiaries then living or in existence, the balance shall be paid to the estate of the beneficiary who was last receiving the payments.

All payments to Executive will be reduced by FICA and other required withholdings.  Executive warrants that the monies and/or benefits payable under Section 2(e) of this Release are monies and/or benefits to which Executive would not otherwise be entitled absent his execution and non-revocation of this Release.

3.

No Other Entitlements . By executing this Release, Executive does not waive:

a.

Rights through October 31, 2007, to reimbursement of reasonable business expenses, if any, incurred by Executive for the benefit of the Company, in accordance with the general policies of the Company as adopted from time to time.

b.

Rights to indemnification as set forth in Article 18 of the 1995 Agreement.

c.

Rights Executive may have to any bonus Executive has earned under the Company’s Management Incentive Plan for the fiscal year ended March 31, 2007 .   The Company shall pay such bonus, if any, to Executive on or before July 31, 2007.  

d.

Rights Executive may have to any bonus Executive has earned under the Company’s Special Long-Term Incentive Plan for the two-year period ended March 31, 2007.   The Company shall pay such bonus, if any, to Executive on or before July 31, 2007.

e.

Rights Executive may have under the terms of the DIMON Incorporated Split Dollar Insurance Agreement between the Company and Execut