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Exhibit 10.2
 
STOCK OPTION CASH-OUT AGREEMENT

THIS STOCK OPTION CASH-OUT AGREEMENT (this "Agreement") is made by and between
TURNING POINT BRANDS, INC., a Delaware corporation (the "Company"), and the
undersigned employee who has an outstanding stock option to purchase Company
stock ("Optionee").

Recitals

A.
Optionee has been granted option(s) (the "Option(s)") to purchase shares of
common stock in the Company (the "Shares") pursuant to the terms of the Turning
Point Brands, Inc. 2006 Equity Incentive Plan, as amended (the "2006 Stock
Plan") and a Stock Option Agreement between the Company and Optionee (the
"Option Agreement").

B.
Given that the right to exercise many of the Options granted under the 2006
Stock Plan will reach their term during 2017 and therefore are likely to be
exercised, and given the Company's right under its current Credit Agreement to
expend up to a certain amount for repurchase of shares or option stock, the
Company desires to cash out the Optionee's rights under the Option Agreement, in
lieu of its exercise.

Agreement

NOW, THEREFORE, for good and valuable consideration including the promises
herein, the parties agree as follows:

1.            Termination of Option and Option Agreement. As of the date of this
Agreement, the Company and Optionee agree to cancel the Option Agreement dated
as stated below Optionee's signature on this Agreement, for that number of
Shares and at exercise price(s) per Share, both as stated below Optionee's
signature this Agreement, in exchange for payment equal to the difference
between Fair Market Value for each share underlying such Option, as determined
in accordance with the Plan as of the close of the market on the date before
this Agreement is executed, less the Exercise Price of the Option as stated
below (the "Option Consideration"), and less any taxes or other withholding
required to be withheld from such payment. With respect to the number of shares
underlying the Option set forth below the Optionee’s name, the Option and the
Option Agreement hereby terminate and no longer have any force or effect. Upon
such termination and payment as described herein, the Optionee releases and
discharges the Company and its successors and assigns from any and all
obligations and liabilities under the Option Agreement with respect to that
number of shares underlying the Option set forth below the Optionee’s name, and,
in lieu of such rights, Optionee's rights shall be solely those rights set out
in this Agreement. Except to the extent set forth in the previous sentence, the
Optionee’s Option Agreement remains in full force and effect as amended hereby.

2.            Covenants, Representations and Warranties of the Optionee. The
Optionee covenants, represents and warrants to the Company as follows:

(a)           The Optionee has full authority to exercise or cancel the Options,
free and clear of all liens, charges, encumbrances, conditional sales agreements
or other obligations relating to the Option, and the Option is not subject to
any adverse claim.
 
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(b)           The Optionee has had a reasonable opportunity to ask questions of
and receive information and answers from persons acting on behalf of the Company
concerning the Options, the Option Agreement, and this Agreement as the Optionee
may deem necessary. All such questions have been answered and all such
information has been provided to the full satisfaction of the Optionee.

(c)           No oral or written representations have been made, nor has any
oral or written information been furnished, to the Optionee in connection with
the Options, the Option Agreement, or this Agreement that were in any way
inconsistent with the information provided in the above documents.

3.            Tax Treatment of Termination Payments; Withholding. The Optionee
acknowledges that the payment of the Option Consideration in cash (a) will be
treated for tax purposes as compensation paid to the Optionee if the Optionee
provided services to the Company or its subsidiary as an officer or employee,
(b) will be reduced by all applicable payroll deductions and withholding taxes
required by applicable law, if any, and (c) will be taxed to the Optionee at
ordinary income tax rates whether or not withholding applies.

4.            Further Assurances. The Optionee agrees to execute and deliver,
after the date of this Agreement, without additional consideration, such further
assurances, instruments and documents, and to take such other actions, as the
Company may reasonably request in order to fulfill the intent of this Agreement
and the transactions contemplated hereby.

5.            Miscellaneous. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, superseding any
prior understandings and agreements between the parties. No amendment or
modification of this Agreement shall be binding unless made in a writing duly
executed by the Optionee and the Company. This Agreement shall be binding upon
the parties hereto and their respective heirs, personal representatives,
successors and assigns. This Agreement shall be governed by and construed in
accordance with the laws of the State of Kentucky, excluding any conflicts of
law principle that would apply the law of another jurisdiction.

 7.            Defined Terms. All capitalized words used in this Agreement and
not defined in the Recitals or text of this Agreement shall have the meanings
given in the 2006 Stock Plan.

[signature page follows]
 
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date set forth below.

 
OPTIONEE:
                   
Signature
             
Printed Name: 
             
Date:
     

Date of Option Agreement
No. of option shares cancelled pursuant to this Agreement that have not
previously been exercised or expired/lapsed
Exercise Price per share
   
$1.06

TURNING POINT BRANDS, INC.
       
By
         
Title:
         
Date:
   

 
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