Document:

Exhibit 10.6

 

Exhibit 10.6

	 	 	 
	

	 	Alcoa Flexible Packing, LLC

Alcoa Flexible Packaging, LLC

6603 West Broad St.

Richmond, VA 23230

Tel: xxxxxxxx

Fax: (703) 738-1699

1/28/2008

Amendment 4951

R. J. Reynolds Tobacco Company

Attn: Craig Demarest, Senior Director Procurement

401 North Main St.

Winston-Salem, NC 27102-2866

Fax: (336) 741-0974

     Re:     Notice of Appointment of Agent & Request for Consent

Dear Mr. Demarest:

     Subject to the consent of R. J. Reynolds Tobacco Company (“RJRT”), with such consent to be
evidenced by RJRT’s execution of this letter below, Alcoa Flexible Packaging, LLC (“AFP”) shall
nominate and appoint, effective January ___, 2008 and subject to the terms and conditions contained
herein, Dominion Packaging, Inc (“Dominion”) as AFP’s exclusive agent authorized to perform on
behalf of AFP all activities necessary or incident to AFP’s supply of inner frame products to RJRT
under the Supply Agreement by and between RJRT and AFP dated May 2, 2005 (the “RJRT Supply
Agreement”), including, but not limited to: (i) manufacturing and delivering products to RJRT,
(ii) managing and performing AFP’s obligations thereunder and (iii) receiving payments thereunder
on behalf of AFP, in each case with respect to the supply of inner frame products (all such
activities and services to be performed by Dominion hereunder sometimes collectively referred to
herein as the “Agency Services”).

     AFP herein confirms to you that, pursuant to this agency appointment, all acts and omissions
of Dominion in connection with or relating to the performance of the Agency Services shall be
deemed to be the acts and omissions of AFP. Notwithstanding anything to the contrary herein,
Dominion shall not have the authority to modify, assign or terminate the RJRT Supply Agreement or
act as AFP’s agent for any products other than inner frame products. AFP appoints Dominion as its
exclusive agent solely for all purposes related to inner frame products under the RJRT Supply
Agreement. This appointment runs concurrent with the RJRT Supply Agreement. For the avoidance of
doubt, AFP recognizes that it retains responsibility for fulfilling all of AFP’s obligations under
the RJRT Supply Agreement whether such obligations are to be performed by Dominion or AFP, and that
AFP shall be responsible for all acts and omissions of Dominion in connection with Dominion’s
performance under the RJRT Supply Agreement.

     Without limiting the generality of the foregoing, AFP further acknowledges and agrees that (i)
Dominion, in acting as AFP’s agent hereunder, shall be subject to all the obligations and
requirements imposed or arising under the RJRT Supply Agreement with respect to the supply of
inner frame products and to the other Agency Services to be performed, with such obligations
and requirements being the same that would apply to AFP if AFP, rather than Dominion, were

 

 

R.J. Reynolds Tobacco Company

1/23/2008

Page 2

supplying such products and performing such services, (ii) AFP shall, prior to Dominion’s
performance of any Agency Services, provide a copy of the RJRT Supply Agreement to Dominion and
advise Dominion of the foregoing and that Dominion must comply with the obligations and
requirements referred to in preceding clause (i) just as if Dominion were a party to such
agreement, except that, notwithstanding anything herein to the contrary, Dominion shall not be a
third party beneficiary of the RJRT Supply Agreement or this letter, and (iii) AFP shall be
responsible for any breach by Dominion (whether due to negligence, reckless or willful misconduct
or otherwise) in any respect of such obligations and requirements (including, without limitation,
any breach of the confidentiality obligations set forth in Article V of the RJRT Supply Agreement
or any breach of the warranties set forth in Article VI of the RJRT Supply Agreement), with any
such breach by Dominion (a) being subject to AFP’s indemnity obligations as set forth in Article VI
of the RJRT Supply Agreement, and (b) affording RJRT the same rights and remedies available under
the RJRT Supply Agreement or otherwise to the same extent as if such breach were by AFP, rather
than Dominion (including, without limitation, the right afforded RJRT under the RJRT Supply
Agreement to terminate such agreement).

     In light of the foregoing, regarding inner frame products per the RJRT Supply Agreement
(except as otherwise noted herein), you should deal directly with Dominion, unless and until
notified in writing of a change by AFP. Your principal contact at Dominion is Brett Hawkins /
President / 804-536-8557 / hawkinsb@dompkg.com. All such persons, including those subsequently
nominated by our agent, Dominion, are hereby deemed to be authorized to make decisions and give
instructions to you on behalf of AFP.

     In order for Dominion to successfully perform the Agency Services, Dominion will need access
to RJRT’s Confidential Information, as defined in the RJRT Supply Agreement. AFP therefore desires
to disclose to Dominion any and all of RJRT’s Confidential Information, but only to the extent
strictly necessary for Dominion to perform as AFP’s agent as provided hereunder (it being
acknowledged and agreed by AFP that the disclosure of such information shall be subject to the
confidentiality provisions of Article V of the RJRT Supply Agreement).

     Please indicate your consent to the foregoing terms of this letter by signing this letter
agreement in the space indicated below, and returning it to Andy Starr by January ___, 2008 as
follows:

Andy Starr

Alcoa Flexible Packaging, LLC

8960 Championship Drive

Davison, MI 48423

Fax: 866-699-1239

     Except as otherwise expressly provided herein, the RJRT Supply Agreement remains unmodified
and in full force and effect.

 

 

R.J. Reynolds Tobacco Company

1/23/2008

Page 3

     Please contact Andy Starr should you have any questions concerning the above. Thank you for
your co-operation and timely attention to this matter.

	 	 	 	 	 
	 

	 	Yours very truly,
	 
	 	 	 	 
	 

	 	Alcoa Flexible Packaging, LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Andrew M. Starr
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Andrew Starr
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	Director — Sales & Marketing
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	CONSENT ACKNOWLEDGED:
	 
	 	 	 	 
	 

	 	R. J. Reynolds Tobacco Company
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy G. Martin
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Timothy G. Martin
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	SVP — Supply Chain Management
	 

	 	 	 	 

	 	 	 
	cc:
	 	 
	 

	 	R. J. Reynolds Tobacco Company, 401 North Main St., Winston-Salem, NC 27102-2866,

Fax: (336) 741-2998, Attn: General CounselExhibit 10.10

 

Exhibit 10.10

Performance Unit

One-Year Vest

REYNOLDS AMERICAN INC.

LONG-TERM INCENTIVE PLAN

 

PERFORMANCE UNIT AGREEMENT

 

DATE OF GRANT: February 5, 2008

W I T N E S S E T H:

     1. Grant. Pursuant to the provisions of the Long-Term Incentive Plan
(collectively, the “Plan”), Reynolds American Inc. (the “Company”) on the above date has granted to

«FirstName» «LastName» (the “Grantee”),

subject to the terms and conditions which follow and the terms and conditions of the Plan, a target
of

«Number» Performance Units.

A copy of the Plan has been provided to the Grantee and made a part of this Agreement with the same
effect as if set forth in the Agreement itself. All capitalized terms used in this Agreement shall
have the meaning set forth in the Plan, unless otherwise indicated.

     2. Valuation of Performance Units. (a) Each Performance Unit shall have
an initial value of $1,000 (the “Initial Grant Value”). The Compensation Committee of the Company’s Board of
Directors (the “Compensation Committee”) shall value each Performance Unit at the end of 2008 using
the performance measures set forth in the grid attached as Exhibit A, but the Compensation
Committee shall have the discretion to reduce the resulting valuation (the “Payment Value”). The
Grantee agrees that the Performance Units granted hereunder are in lieu of an award under the
Company’s Annual Incentive Award Plan for 2008.

     (b) Pursuant to Section 3(a) of the Plan and Section 11(a) hereof, the Compensation Committee
shall, in determining whether actual results have met the Goals, exclude the effect, or otherwise
make equitable adjustments in recognition, of such of the following as are set forth in Exhibit
A on the Date of Grant: charges for restructuring or asset impairment, acquisitions,
divestitures, discontinued operations, pension gains and/or losses, extraordinary items, unusual or
non-recurring items and changes in applicable laws (including, without limitation, tax laws and
changes in generally accepted accounting principles). To the extent that the Compensation
Committee determines that a change in the business, operations, corporate structure or capital
structure of the Company, or the manner in which it conducts its business, or other events or
circumstances render the performance measures unsuitable, the Compensation Committee may in its
discretion modify such

1

 

performance measures or the related minimum acceptable level or levels of achievement, in whole or
in part, as the Compensation Committee deems appropriate and equitable, except in the case when
such action would result in the loss of the otherwise available exemption of the Performance Units
under Section 162(m) of the Code. In such case, the Compensation Committee will not make any
modification of the performance measures or the minimum acceptable level or levels of achievement
with respect to the Performance Units granted hereunder.

     3. Vesting. (a) The Performance Units shall fully vest on December 31,
2008.

     (b) Notwithstanding anything in Section 3(a) to the contrary, in the event of (i) the
Grantee’s death, (ii) the Grantee’s Permanent Disability (as defined in the Company’s Long Term
Disability Plan), (iii) the Grantee’s Retirement (as defined below) or (iv) the Grantee’s
involuntary Termination of Employment without Cause (as such terms are defined in Section 5 of this
Agreement), the number of Performance Units which shall vest shall be equal to the product of (i)
the original number of Performance Units granted to the Grantee under this Agreement and (ii) a
fraction, the numerator of which shall be the number of whole or partial months between January 1,
2008, and the date of the Grantee’s Termination of Employment, and the denominator of which shall
be 12. For purposes of this Agreement, the term “Retirement” shall mean the Grantee’s voluntary
Termination of Employment (as such term is defined in Section 5 of this Agreement) on or after his
or her 65th birthday, on or after his or her 55th birthday with 10 or more
years of service, or on or after his or her 50th birthday with 20 or more years of
service with the Company or a subsidiary of the Company.

     (c) Upon the Grantee’s voluntary Termination of Employment or Termination of Employment for
Cause (as such terms are defined in Section 5 of this Agreement) prior to the end of December 31,
2008, all of the Grantee’s Performance Units shall be cancelled.

     (d) Notwithstanding anything to the contrary contained in this Section 3 or in any other
Section of this Agreement, if the Grantee has a written employment or severance agreement with the
Company or one of its subsidiaries, and such other agreement contains provisions relating to the
vesting by the Grantee in the Performance Units or the right of the Grantee to receive the Payment
Value (including, without limitation, vesting provisions upon the termination of employment of the
Grantee), and such provisions are different than the comparable provisions of this Agreement, then
the provisions of such other agreement shall govern and control.

     4. Payment. (a) Payment of Performance Units shall be made only in Cash.

     (b) Payment of Performance Units vesting on December 31, 2008, shall be made in the
amount of the Payment Value as soon as practicable following the close of the Company books at the
end of 2008, and in any event no later than March 15, 2009.

     (c) In the event of the Grantee’s death or Permanent Disability, the Payment Value of each
vested Performance Unit shall be equal to the Initial Grant Value. Payment of such vested
Performance Units shall be made as soon as practicable following the Grantee’s death or Permanent
Disability, as the case may be.

     (d) In the event of the Grantee’s Retirement or involuntary Termination of Employment without
Cause, the Payment Value of each vested Performance Unit shall be

2

 

determined in accordance with Section 2 of this Agreement. Payment of such vested Performance
Units shall be made as soon as practicable following the close of the Company books at the end of
2008, and in any event no later than March 15, 2009.

     (e) In the event of the death of a Grantee, any payment to which such Grantee is entitled
under the Plan shall be made to the beneficiary designated by the Grantee to receive the proceeds
of any noncontributory group life insurance coverage provided for the Grantee by the Company or a
subsidiary of the Company (“Group Life Insurance Coverage”). If the Grantee has not designated
such beneficiary, or desires to designate a different beneficiary, the Grantee may file with the
Company a written designation of a beneficiary under the Plan, which designation may be changed or
revoked only by the Grantee, in writing. If no designation of beneficiary has been made by a
Grantee under the Group Life Insurance Coverage or filed with the Company under the Plan,
distribution upon such Grantee’s death shall be made in accordance with the provisions of the Group
Life Insurance Coverage. If a Grantee is no longer an employee of the Company at the time of
death, no longer has any Group Life Insurance Coverage and has not filed a designation of
beneficiary with the Company under the Plan, distribution upon such Grantee’s death shall be made
to the Grantee’s estate.

     5. Termination of Employment. (a) For purposes of this Agreement, the
term “Termination of Employment” shall mean termination from active employment with the Company or a
subsidiary of the Company; it does not mean the termination of pay and benefits at the end of a
period of salary continuation (or other form of severance pay or pay in lieu of salary).

     (b) For purposes of this Agreement, if the Grantee has an employment or severance agreement,
employment shall be deemed to have been terminated for “Cause” only as such term is defined in the
employment or severance agreement. For purposes of this Agreement, if the Grantee does not have an
employment or severance agreement that defines the term “Cause,” the Grantee’s employment shall be
deemed to have been terminated for “Cause” if the Termination of Employment results from the
Grantee’s: (i) criminal conduct; (ii) deliberate and continual refusal to perform employment
duties on substantially a full time basis; (iii) deliberate and continual refusal to act in
accordance with any specific lawful instructions of an authorized officer or employee more senior
than the Grantee or a majority of the Board of Directors of the Company; or (iv) deliberate
misconduct which could be materially damaging to the Company or any of its business operations
without a reasonable good faith belief by the Grantee that such conduct was in the best interests
of the Company. A Termination of Employment shall not be deemed for Cause hereunder unless the
chief human resources officer of the Company shall confirm that any such Termination of Employment
is for Cause; provided, however, that the chief executive officer of the Company
shall be required to confirm that a Termination of Employment of the chief human resources officer
of the Company is for Cause. Any voluntary Termination of Employment by the Grantee in
anticipation of an involuntary Termination of Employment for Cause shall be deemed to be a
Termination of Employment for Cause.

     6. Transferability. Other than as specifically provided in this Agreement
with regard to the death of the Grantee, this Agreement and any benefit provided or accruing hereunder
shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or change; and any attempt to do so shall be void. No such benefit shall, prior to
receipt thereof by the Grantee, be in any manner liable for or subject to the debts, contracts,
liabilities, engagements or torts of the Grantee.

3

 

     7. No Right to Employment. Neither the execution and delivery of this
Agreement nor the granting of the Performance Units evidenced by this Agreement shall constitute
any agreement or understanding, express or implied, on the part of the Company or its subsidiaries
to employ the Grantee for any specific period or in any specific capacity or shall prevent the
Company or its subsidiaries from terminating the Grantee’s employment at any time with or without
Cause.

     8. Application of Laws. The granting of Performance Units under this
Agreement shall be subject to all applicable laws, rules and regulations and to such approvals of
any governmental agencies as may be required.

     9. Notices. Any notices required to be given hereunder to the Company
shall be addressed to The Secretary, Reynolds American Inc., Post Office Box 2990, Winston-Salem, NC
27102-2990, and any notice required to be given hereunder to the Grantee shall be sent to the
Grantee’s address as shown on the records of the Company.

     10. Taxes. Any taxes required by federal, state or local laws to be
withheld by the Company in respect of the grant of Performance Units or payment of the Payment Value hereunder
shall be paid to the Company by the Grantee by the time such taxes are required to be paid or
deposited by the Company. The Grantee hereby authorizes the necessary withholding by the Company
to satisfy such tax withholding obligations prior to delivery of the Payment Value.

     11. Administration and Interpretation. (a) In consideration of the grant
of Performance Units hereunder, the Grantee specifically agrees that the Compensation Committee shall
have the exclusive power to interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan and Agreement as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all interpretation and
determinations made by the Compensation Committee shall be final, conclusive, and binding upon the
Grantee, the Company and all other interested persons. No member of the Compensation Committee
shall be personally liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Agreement. The Compensation Committee may delegate its interpretive
authority to an officer or officers of the Company.

     (b) This Agreement is intended to comply with Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), and shall be construed and interpreted in accordance with such
intent.

     12. Amendment. This Agreement is subject to the Plan, of which a copy has been
provided to the Grantee. The Board of Directors may amend the Plan and the Compensation Committee
may amend this Agreement at any time and in any way, except that, other than for adjustments under
Section 11(b) hereof and as otherwise provided by the Plan, any amendment of the Plan or this
Agreement that would impair the Grantee’s rights under this Agreement may not be made without the
Grantee’s written consent.

4

 

     13. GOVERNING LAW. THE LAWS OF THE STATE OF NORTH CAROLINA
SHALL GOVERN THE INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT,
REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF LAWS.

     IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Grantee have executed
this Agreement as of the Date of Grant first above written.

	 	 	 	 	 
	 

	 	REYNOLDS AMERICAN INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lisa J. Caldwell
	 

	 	 	 	 
	 

	 	 	 	Authorized Signature
	 
	 	 	 	 
	 
	 	 	 	 
	Grantee Signature
	 	 	 	 
	 
	 	 	 	 
	Grantee’s Taxpayer Identification Number:
	 	 	 	 
	 
	 	 	 	 
	 	 
	 
	 	 	 	 
	Grantee’s Home Address:
	 	 	 	 
	 
	 	 	 	 
	 	 
	 
	 	 	 	 
	 	 
	 
	 	 	 	 
	 	 

5

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