Document:

EX-10.6

Exhibit 10.6

AMENDMENT TO SUPPLY AGREEMENT FOR RECONSTITUTED TOBACCO

     THIS AMENDMENT (the “Amendment”) is entered into this 30th day of October, 2008, by
and between R.J. REYNOLDS TOBACCO COMPANY, a North Carolina corporation, with its principal office
at 401 N. Main Street, Winston-Salem, North Carolina (hereinafter “RJRT”), and LORILLARD TOBACCO
COMPANY, a Delaware corporation, with its principal office at 714 Green Valley Road, Greensboro,
North Carolina 27408 (hereinafter “Lorillard”).

W I T N E S S E T H :

     WHEREAS, R.J. Reynolds Global Products, Inc. (“RJRGPI”) and Lorillard entered a Supply
Agreement for Reconstituted Tobacco effective August 20, 2004 (the “Agreement”) with an Initial
Term of five (5) years which commenced January 1, 2005 and ends December 31, 2009;

     WHEREAS, all rights and obligations of RJRGPI under the Agreement were assigned to and assumed
by RJRT on April 1, 2008;

     WHEREAS, RJRT and Lorillard desire to (1) extend the term of the Agreement for a period of
five (5) years beyond expiration of the Initial Term, (2) update the Lorillard Specifications for
Reconstituted Tobacco and (3) modify the prices for Converted Reconstituted Tobacco ordered under
the Agreement during the 2009 Contract Year of the Initial Term and during each subsequent Contract
Year;

     NOW, THEREFORE, the parties hereto agree as follows:

	 	1.	 	Unless specifically stated otherwise herein, the capitalized terms in this
Amendment have the meaning as those same capitalized terms have in the Agreement.

 

			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

	 	2.	 	At the end of the Initial Term, the Agreement will be extended and renewed for an
Additional Term of five (5) years, beginning January 1, 2010 and ending December 31,
2014. There will be no automatic renewals or Rollover Periods beyond expiration of the
Additional Term. By at least eighteen months prior to the end of the Additional Term,
the parties agree to open discussions concerning renewal of the Agreement.
	 
	 	3.	 	The current Lorillard Specifications for Reconstituted Tobacco are set forth in
Appendix “A” attached hereto and made a part hereof. The attached Appendix
“A” replaces and is substituted for the present Appendix “A” of the
Agreement effective immediately.
	 
	 	4.	 	For the 2009 Contract Year of the Initial Term and for each Contract Year of
the Additional Term, pricing for the Converted Reconstituted Tobacco ordered for
delivery is set forth in Appendix “B” attached hereto and made a part hereof.
At the end of the 2009 Contract Year, and at the end of each Contract Year thereafter,
RJRT will calculate and determine an Annual Energy Cost Adjustment, as specified in
Appendix “B”, which will increase or decrease Lorillard’s total financial
obligation to RJRT for Converted Reconstituted Tobacco ordered during the just ended
Contract Year. Current pricing for the 2008 Contract Year is unchanged. The attached
Appendix “B” replaces and is substituted for the present Appendix “B”
of the Agreement for Contract years 2009 and beyond.
	 
	 	5.	 	The parties acknowledge that there is pending in the U.S. Congress legislation
that, if passed, could require significant modification of current tobacco product
manufacturing processes, tobacco product ingredients, and tobacco

 

 

	 	 	 	product design. The parties do not know if, when or what modifications to RJRT’s
Reconstituted Tobacco manufacturing process will be required. The parties agree that if
the pending or similar federal legislation becomes law, they will negotiate in good
faith to determine whether, and or what modified terms, the Agreement and this Amendment
can continue in force and effect.
	 
	 	6.	 	All provisions of the Agreement not inconsistent with this Amendment remain in
full force and effect.

     IN WITNESS WHEREOF, this Amendment has been duly executed by the parties hereto by their duly
authorized representatives as of the date set forth above.

	 	 	 	 	 	 	 
	 	 	R.J. REYNOLDS TOBACCO COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tommy L. Hickman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Tommy L. Hickman	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 

	 	Date:
	 	10-30-08	 	 
	 
	 	 	 	 	 	 
	 	 	LORILLARD TOBACCO COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ronald S. Milstein	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Ronald S. Milstein	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 

	 	Date:
	 	10-29-08	 	 

 

 

APPENDIX A

[***]

 

			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

APPENDIX B

[***]

 

			
	[***]	 	INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.EX-10.7

Exhibit 10.7

FORM OF LORILLARD, INC.

AWARD CERTIFICATE

STOCK APPRECIATION RIGHT

          THIS CERTIFICATE, dated as of the                     day of                                         , evidences the grant of
the Award set forth below by Lorillard, Inc., a Delaware corporation (the “Company”) to
                                         (the “Participant”).

     1. Grant of Award.

          Subject to the provisions of this Certificate and the Lorillard, Inc. 2008 Incentive
Compensation Plan, as adopted, effective as of May 5, 2008 (the “Plan”), the Company hereby grants
to the Participant as of                                         (the “Grant Date”)                     Stock Appreciation Rights having
an Exercise Price of $                     per Stock Appreciation Right (such grant being herein called the
“Award”). Each Stock Appreciation Right represents the right to receive an amount, payable in
shares of Stock as provided in Paragraph 3 below, equal in value to the excess, if any, on the date
of exercise of the Fair Market Value of a share of Stock over the Exercise Price of the Stock
Appreciation Right. The Stock Appreciation Rights granted hereby are Free-Standing Stock
Appreciation Rights and are not granted in conjunction with an Option. Unless earlier terminated
pursuant to the terms of this Certificate, the Award shall expire on                                         . Capitalized
terms not defined herein shall have the meanings set forth in the Plan.

     2. Exercisability of the Award.

          The Award shall become vested and exercisable with respect to one-quarter (1/4) of the Stock
Appreciation Rights granted hereby on                                         and as to an additional one-quarter (1/4) of
such shares on each of the next three anniversaries of that date, subject to the prior termination
of the Award.

     3. Method of Exercise of the Award.

(a) An Award may be exercised at any time after the Grant Date with respect to those Stock
Appreciation Rights vested and before the expiration of the Award Term. To exercise an Award, the
Participant shall give written notice to the Company stating the number of shares with respect to
which the Award is being exercised.

(b) Upon the exercise of a Stock Appreciation Right, the Participant shall be entitled to receive
an amount equal to the product of (i) the excess of the Fair Market Value of one (1) share of Stock
on the date of exercise over the Exercise Price of the applicable Stock Appreciation Right,
multiplied by (ii) the number of shares of Stock in respect of which the Stock Appreciation Right
has been exercised. Except as otherwise determined by the Committee on not less than thirty (30)
days’ prior written notice to the Participant, the payment shall be made in

 

 

shares of Stock based upon the Fair Market Value on the date of exercise. Fractional shares shall
be settled by payment in cash based upon the Fair Market Value on such date.

     4. Award Term.

         Except as otherwise determined by the Committee after the date of this Certificate, the Award
Term shall end on the earliest of (1) the date on which the Award has been exercised in full, (2)
the date on which the Participant experiences a Termination for Cause or a voluntary Termination,
(3) the one-year anniversary of the date on which the Participant experiences a Termination due to
death or Disability, (4) the three-year anniversary of the date on which the Participant
experiences a Termination due to the Participant’s Retirement, and (5) the 90th day after the
Participant experiences a Termination for any other reason; provided, that in no event may
the Award Term extend beyond                                         . Upon the occurrence of a Termination of Participant
for any reason, the Award Term shall thereupon end with respect to any portion of the Award that is
unvested as of the date of such Termination and such unvested portion shall be forfeited
immediately.

     5. Nontransferability of the Award.

         The Award is not transferable except (i) as designated by the Participant by will or by the
laws of descent and distribution or (ii) as otherwise expressly permitted by the Committee
including, if so permitted, pursuant to a transfer to such Participant’s immediate family, whether
directly or indirectly or by means of a trust or partnership or otherwise. If any rights
exercisable by the Participant or benefits deliverable to the Participant under this Certificate
have not been exercised or delivered, at the time of the Participant’s death, such rights shall be
exercisable by the Designated Beneficiary, and such benefits shall be delivered to the Designated
Beneficiary, in accordance with the provisions of this Certificate and the Plan.

     6. Effect of Change in Control.

          In the event of a Change of Control (as defined in the Plan), the Award if not previously
exercisable and vested shall become fully exercisable and vested.

     7. Taxes and Withholdings.

          No later than the date of exercise of the Award granted hereunder, the Participant shall pay
to the Company or make arrangements satisfactory to the Committee regarding payment of any federal,
state or local taxes of any kind required by law to be withheld upon the exercise of such Award and
the Company shall, to the extent permitted or required by law, have the right to deduct from any
payment of any kind otherwise due to the Participant, federal, state and local taxes of any kind
required by law to be withheld upon the exercise of the Award granted hereunder, as provided in
Section 6.8 of the Plan. In this regard the Participant may elect to pay any tax withholding upon
the exercise of an Award by irrevocably authorizing a third party to sell shares of Stock (or a
sufficient portion of the shares) acquired upon exercise of the Award and remit to the Company a
sufficient portion of the sale proceeds to pay such tax withholding.

 

 

     8. Notices.

         All notices and other communications under this Certificate shall be in writing and shall be
given by hand delivery to the other party or by confirmed fax or overnight courier, or by postage
paid first class mail, addressed as follows:

          If to the Participant:

	 	 	 	 	 
	 

	 	  

	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

          If to the Company:

Lorillard, Inc.

714 Green Valley Road

Greensboro, NC 27408

Attention: Corporate Secretary

Facsimile: (336) 335-7707

or to such other address or facsimile number as any party shall have furnished to the other in
writing in accordance with this Paragraph 8. Notice and communications shall be effective when
actually received by the addressee.

     9. Effect of Certificate.

         Except as otherwise provided hereunder, this Certificate shall be binding upon and shall inure
to the benefit of any successor or successors of the Company, and to any transferee or successor of
the Participant pursuant to Paragraph 5.

     10. Conflicts and Interpretation.

          The Award is subject to the provisions of the Plan, which are hereby incorporated by
reference. In the event of any conflict between this Certificate and the Plan, the Plan shall
control. In the event of any ambiguity in this Certificate, any term which is not defined in this
Certificate, or any matters as to which this Certificate is silent, the Plan shall govern
including, without limitation, the provisions thereof pursuant to which the Committee has the
power, among others, to (i) interpret the Plan, (ii) prescribe, amend and rescind rules and
regulations relating to the Plan and (iii) make all other determinations deemed necessary or
advisable for the administration of the Plan.

     11. Headings.

          The headings of paragraphs herein are included solely for convenience of reference and shall
not affect the meaning or interpretation of any of the provisions of this Certificate.

 

 

     12. Amendment.

          This Certificate may not be modified, amended or waived except by an instrument in writing
signed by the Company. The waiver by either party of compliance with any provision of this
Certificate shall not operate or be construed as a waiver of any other provision of this
Certificate, or of any subsequent breach by such party of a provision of this Certificate.

          IN WITNESS WHEREOF, as of the date first above written, the Company has caused this
Certificate to be executed on its behalf by a duly authorized officer.

	 	 	 	 	 
	 	LORILLARD, INC.

 	 
	 	By:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]