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AMENDED AND RESTATED
EXECUTIVE
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COUNTY OF MECKLENBURG
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SEVERANCE AGREEMENT
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THIS AMENDED
AND RESTATED EXECUTIVE SEVERANCE AGREEMENT , entered into as of
April 24, 2008, by and between Lance, Inc., a North Carolina
corporation, hereinafter referred to as the “Company”,
and Earl D. Leake, hereinafter referred to as
“Executive”;
On
November 7, 1997, the Company and Executive entered into an
Executive Severance Agreement (the “Prior Agreement”)
pursuant to which the Company continued Executive’s
employment as Treasurer and Assistant Secretary of the Company and
provided Executive with certain benefits under the Lance, Inc. Key
Executive Employee Benefit Plan. Executive currently holds the
title of Senior Vice President of Human Resources and holds various
other positions with the Company and its Affiliates. The Prior
Agreement provides Executive certain benefits in the event of
Executive’s termination of employment under certain
circumstances prior to a Change in Control and in the event of
Executive’s Retirement. The Executive and the Company
previously amended the Prior Agreement by Amendments dated
July 26, 2001 and October 21, 2004 to (i) modify the
methodology for determining the “current value” of the
retirement benefits payable under the Executive Severance Agreement
and (ii) provide for the funding of a “grantor”
trust related to the retirement benefits payable under the
Executive Severance Agreement in certain circumstances following a
“Change in Control.”
The Executive and
the Company now desire to amend and restate the Prior Agreement, as
previously amended, for purposes of compliance with Internal
Revenue Code Section 409A and the final regulations issued
thereunder.
NOW,
THEREFORE , in consideration of the Statement of Purpose and
the terms and provisions of this Agreement, the parties hereto
mutually agree as follows:
1.
Definitions . Capitalized terms used in this
Agreement that (i) are not expressly defined herein and
(ii) are defined in the Compensation and Benefits Assurance
Agreement shall have the respective meanings given to those terms
in the Compensation and Benefits Assurance Agreement. In addition,
as used herein, the following terms shall have the following
meanings:
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(i)
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Executive’s failure to devote
his best efforts and substantially full time during normal business
hours to the discharge of the duties and responsibilities
of
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Executive’s position reasonably assigned
to him, other than during reasonable periods of vacation and other
reasonable leaves of absence commensurate with Executive’s
position and length of service; or
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(ii)
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A material and willful breach of
Executive’s fiduciary duties to the Company and its
stockholders; or
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(iii)
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In connection with the discharge of
Executive’s duties with the Company, one or more material
acts of fraud or dishonesty or gross abuse of authority;
or
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(iv)
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Executive’s commission of any
willful act involving moral turpitude which materially and
adversely affects (A) the name and good will of the Company or
(B) the Company’s relationship with its employees,
customers or suppliers; or
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(v)
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Executive’s habitual and
intemperate use of alcohol or drugs to the extent that the same
materially interferes with Executive’s ability to
competently, diligently and substantially perform the duties of his
employment.
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(b)
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“ Compensation and
Benefits Assurance Agreement ” means that certain
Compensation and Benefits Assurance Agreement between Executive and
the Company entered into on November 7, 1997, as
amended.
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(c)
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“ Current Annual
Salary ” means the amount of Base Salary actually paid to
Executive during the 52-week year immediately prior to his
Termination of Employment.
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(d)
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“ Disability ”
means the inability, by reason of physical or mental infirmity or
both, of an apparently permanent nature of Executive to perform
satisfactorily the duties then assigned to him or the duties of any
other executive position to which the Board is willing to assign
him; Disability must be determined by the Board and shall be based
upon certification of such Disability by an independent qualified
physician or other credible medical evidence, if
available.
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(e)
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“ Payment Period
” means the time beginning with the Period following the
Period in which Executive’s Termination of Employment occurs
and ending upon the earlier of (i) the end of the Period
during which occurs the fifteenth anniversary of the date of
Executive’s Termination of Employment or (ii) the last
day of the Company’s fiscal year during which occurs the
seventy-fifth anniversary of Executive’s birth.
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(f)
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“ Period ” means
the Company’s accounting period as hereinafter described. In
accordance with the provisions of §441(f) of the Internal
Revenue Code of 1986, as amended, the Company uses a fiscal year
varying from 52 to 53 weeks ending on the last Saturday in
December in each year, which fiscal year consists of 13 accounting
periods of 4 weeks each, except that in a year consisting of
53 weeks, the last accounting period consists of 5 weeks.
In the event that the Company changes its fiscal year for income
tax purposes, the Company shall have the right to alter and adjust
payment dates under Paragraph 3 of this Agreement to coincide
with its then existing accounting period, provided, however, that
under no circumstances shall the Company have the right to adjust
such payment dates hereunder to dates more than 31 days
apart.
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(g)
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“ Retire ” and
“ Retirement ” mean any Termination of
Employment (including on account of death or Disability) on or
after the Retirement Date.
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(h)
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“ Retirement Benefit
” means a lump sum amount equal to the “current
value” of a stream of periodic payments payable to Executive
in each Period during the Payment Period, such periodic payments
determined as follows:
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(i)
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multiplying Executive’s
Current Annual Salary by five (5), and
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(ii)
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divide said product so obtained by
the number of full Periods during the Payment Period.
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The “current value” of such stream
of periodic payments shall be the present value on the Termination
Date of such payments based on the following
assumptions:
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(i)
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Such stream of payments would
commence with the Period following the Period in which the
Termination Date occurred and would continue through the end of the
Payment Period;
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(ii)
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Such present value shall be
determined by using the interest rate equal to the yield on the
10-year United States Treasury Bond on the Termination Date;
and
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(iii)
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Such present value shall be
determined without any discount for mortality.
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Notwithstanding the forgoing, in the case of
Executive’s Termination of Employment by reason of his death,
the amount of the Retirement Benefit shall be seventy-five (75%) of
the amount determined above.
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(i)
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“ Retirement Date
” means the earlier of:
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(i)
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the last day of the Company’s
fiscal year during which Executive attains the age of sixty
(60) years (i.e., December 31, 2011);
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(ii)
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the date of Executive’s death
while employed by the Company; or
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(iii)
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the date of Executive’s
Termination of Employment by reason of Executive’s
Disability.
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(j)
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“ Severance Multiple
” means the lesser of (i) two and one half (2
1
/ 2 ) or (ii) the quotient obtained
by dividing (A) the number of full months between
Executive’s Termination of Employment and the last day of the
Company’s fiscal year during which Executive will attain the
age of sixty (60) years (i.e., December 31, 2011) by
(B) 12.
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(k)
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“ Stock Options
” means Executive’s options to purchase shares of the
Company’s common stock pursuant to options granted to
Executive by the Company prior to Executive’s Termination of
Employment, which options are otherwise vested in Executive on the
date of his Termination of Employment and remain unexercised upon
the expiration of such options in accordance with their terms upon
or subsequent to Executive’s Termination of
Employment.
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(l)
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“ Termination Date
” means the date of Executive’s Termination of
Employment.
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(m)
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“ Termination of
Employment ” means any termination of employment (as
defined in Section 409A of the Code and the
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Company’s administrative policies, if any)
with either the Company or any successor to the Company that
acquires all or substantially all of the business and/or assets of
the Company (whether direct or indirect, by purchase, merger,
consolidation or otherwise); provided, however, no termination of
employment shall be deemed to have occurred by reason of such an
acquisition unless there is either (i) a termination of
employment with both the Company and such successor or (ii) a
termination of employment with the Company and no successive
employment by such successor.
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(n)
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“ Value ” with
reference to Executive’s Stock Options means the estimated
present value of the Stock Options determined on the basis of a
“Black-Scholes” valuation calculation using the price
of the shares of the Company’s common stock and comparable
U.S. Treasury Strip Rates with a term equivalent to the remaining
term of the respective Stock Options as reported in the
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