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Sample Business Contracts

Early Retirement Agreement - Lance Inc. and Pater M. Duggan

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STATE OF NORTH CAROLINA
                                                      EARLY RETIREMENT AGREEMENT
COUNTY OF MECKLENBURG

         THIS EARLY RETIREMENT AGREEMENT (this "Agreement") is entered into as
of June 10, 1998 by and between LANCE, INC., a North Carolina corporation (the
"Company"), and PETER M. DUGGAN ("Duggan").

                              STATEMENT OF PURPOSE

         Duggan has been employed by the Company since July 18, 1994. On
November 11, 1997, the Company and Duggan entered into an Executive Severance
Agreement (the "Severance Agreement"), whereby the Company provided Duggan with
certain benefits. Duggan currently holds the title of Senior Vice President of
the Company.

         Duggan has decided to retire from his position with the Company. The
Company and Duggan have entered into negotiations with a view toward resolving
all issues relating to Duggan's employment with the Company and his retirement
from that employment.

         As a result of these negotiations, Duggan and the Company have agreed
that Duggan will retire and that Duggan and the Company will terminate their
relationship on the terms and conditions set forth in this Agreement.

         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 are not
expressly defined herein but are defined in the Severance Agreement have the
respective meanings given those terms in the Severance Agreement. In addition,
as used herein, the following terms shall have the following meanings:

         (a)      "Affiliate" with reference to the Company means any Person
                  that directly or indirectly is controlled by, or is under
                  common control with, the Company. For purposes of this
                  definition the term "control" means the possession, directly
                  or indirectly, of the power to direct or cause the direction
                  of the management and policies of a Person, whether through
                  ownership of voting securities, by contract or otherwise.

         (b)      "Person" means any individual, corporation, association,
                  partnership, business trust, joint stock company, limited
                  liability company, foundation, trust, estate or other entity
                  or organization of whatever nature.


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         (c)      "Effective Date" with reference to this Agreement means the
                  eighth (8th) day following the execution of this Agreement, if
                  not a Saturday, Sunday or legal holiday, and if such day is a
                  Saturday, Sunday or legal holiday, then the first business day
                  following such eighth (8th) day.

         2. RESIGNATION. Duggan hereby retires from employment and resigns from
all offices, committees and positions he holds with the Company and its
Affiliates, including but not limited to, Senior Vice President of the Company,
with said resignation to be effective as of June 10, 1998. Duggan will remain on
the payroll through June 26, 1998 and will be considered during such period as
being on vacation, and in such connection will have no duties or
responsibilities except to consult from time to time with Company officials
regarding the transfer of his responsibilities to others. If requested by the
Company, Duggan will execute any additional resignation letters, forms or other
documents which acknowledge his resignation from such employment, positions,
committees and offices.

         3. PAYMENTS BY THE COMPANY AND DEFERRAL. The Company agrees to pay or
provide Duggan with the following:

         (a)      Compensation and benefits to which Duggan is otherwise
                  entitled as an employee of the Company at Duggan's current
                  rate and status through June 26, 1998, in accordance with the
                  Company's generally applicable policies and procedures;

         (b)      Compensation and benefits to which Duggan is otherwise
                  entitled under the Severance Agreement in accordance with the
                  terms of the Severance Agreement. For purposes hereof, the
                  Company acknowledges and agrees that Duggan shall be
                  considered to have been involuntarily terminated Without
                  Cause, and shall be due all payments and benefits set forth in
                  paragraph 4 of the Severance Agreement;

         (c)      Possession of the Company automobile used by Duggan in
                  connection with his employment together with conveyance of
                  title to said automobile promptly following the Effective Date
                  of this Agreement;

         (d)      Health benefits for Duggan until December 31, 2000 or his
                  earlier death under the HMO coverage option under the
                  Company's group medical plan. During this period, Duggan will
                  be required to pay those amounts the Company's employees are
                  customarily required to pay from time to time for such
                  coverage and will be entitled to obtain at his expense
                  optional family/dependent medical coverage under the Company's
                  group medical plan. After December 31, 2000, the Company will
                  provide to Duggan, at such expense to Duggan as shall then be
                  required of the Company's retired executives, health benefits
                  as a "retiree" under such program, if any, as may then be
                  available to the Company's retired executives and/or their
                  dependents;



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<PAGE>   3

         (e)      Duggan has vested interests under Company sponsored 401(k),
                  Employee Stock Purchase and Incentive Equity plans. Duggan's
                  vested interest in these plans shall be paid when and as
                  provided in, and otherwise subject to, the terms, provisions
                  and conditions of said plans, and nothing in this Agreement
                  shall modify or override the terms, provisions or conditions,
                  except that the Company shall request the Compensation/Stock
                  Option Committee of the Board of Directors of the Company to
                  amend Duggan's nonqualified stock option agreements to provide
                  that vested shares may be exercised for three years after June
                  26, 1998 and to amend Duggan's performance restricted stock
                  award agreements to provide that the awards be prorated
                  monthly;

         (f)      As of June 2, 1998, Duggan has a balance of $14,675 in the
                  Company sponsored Profit Sharing Retirement Plan, $640 in the
                  Company sponsored 401(k) Plan and a balance of $7,582 in the
                  Company sponsored Benefit Restoration Plan. None of these
                  balances are vested; however, as an additional severance
                  benefit, the Company will pay Duggan an amount equal to those
                  unvested balances, plus an amount equal to the income taxes
                  payable by Duggan on such amount, provided, that the Company
                  shall not be obligated to pay these amounts to Duggan until
                  December 31, 1998 and provided further, to the extent that
                  amendments to the Profit Sharing Retirement Plan, 401(k) Plan
                  or the Benefit Restoration Plan permit vesting and immediate
                  payment of such balances prior to December 31, 1998 for
                  Duggan, the Company shall not be obligated to make such
                  payments;

         (g)      The Company will provide Duggan, at no expense to him,
                  outplacement services for a period of up to twelve months
                  beginning in 1998 at a cost not to exceed $30,000;

         (h)      Duggan hereby elects to defer until January 31, 1999 $200,000
                  of the compensation payable pursuant to Section 3(b) hereof
                  and the Company agrees to pay such deferred amount to Duggan
                  no earlier than January 4, 1999 and no later than January 31,
                  1999, plus interest at 6% on such amount from June 26, 1998
                  until paid;

         (i)      Duggan hereby elects to defer until December 31, 2000 $25,000
                  of the compensation payable pursuant to Section 3(b) hereof
                  and the Company agrees to pay such deferred amount to Duggan
                  no earlier than December 15, 2000 and no later than December
                  31, 2000, plus interest at 6% on such amount from June 26,
                  1998 until paid;

         (j)      In consideration for the non-competition agreements of Duggan
                  contained in Section 7 hereof, the sum of $90,544. No
                  withholdings for income or employment taxes shall be made from
                  the amount paid pursuant to this Section 3(j).



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<PAGE>   4

         4. TERMINATION OF THE COMPENSATION AND BENEFITS ASSURANCE AGREEMENT AND
ALL OTHER BENEFITS NOT SPECIFIED IN THIS AGREEMENT. On November 11, 1997, Duggan
and the Company entered into a Compensation and Benefits Assurance Agreement
which was intended to provide Duggan with certain compensation and benefits in
the event of the termination of his employment under certain specified
circumstances in connection with a Change in Control, as defined in the
Compensation and Benefits Assurance Agreement. It is agreed that this Agreement
is not being entered into in connection with a Change in Control, that Duggan is
not entitled to receive any compensation or benefits under the Compensation and
Benefits Assurance Agreement, that the Compensation and Benefits Assurance
Agreement is hereby terminated and that neither party has any further rights and
obligations thereunder. The Company and Duggan acknowledge and agree that all
other benefits and perquisites related to or resulting from Duggan's employment
and positions with the Company and its Affiliates, which are not described and
provided for in this Agreement, terminate on the Effective Date, and that the
Company has no further obligations with respect thereto.

         5. CONFIDENTIAL INFORMATION AND COMPANY PROPERTY. Duggan acknowledges
that by reason of Duggan's employment by the Company, Duggan has had access to
certain Company "Trade Secrets" (as defined in the North Carolina Trade Secrets
Protection Act, N.C.G.S. ss.66-152) and confidential product formulations
(collectively "Confidential Information"). Duggan agrees that he shall not
directly or indirectly use, reveal, disclose or remove from the Company's
premises Confidential Information or material containing Confidential
Information, without the prior written consent of the Company. In addition,
Duggan agrees that he will turn over and return to the Company no later than
June 26, 1998 all property whatsoever of the Company now in his possession
(including keys and credit cards).

         6. EMPLOYMENT TAXES AND WITHHOLDINGS. Duggan acknowledges and agrees
that the Company shall withhold from the payments and benefits described in this
Agreement all taxes, including income and employment taxes, required to be so
deducted or withheld under applicable law.

         7. NON-COMPETITION. Duggan agrees that in consideration of the payment
by the Company under Section 3(j) hereof, he will not during the period June 27,
1998 through December 26, 1999, become employed by, perform services for or
consult with the following corporations, their subsidiaries or affiliates which
are involved in the manufacture or sale of sandwich crackers, or their
successors or assigns: Frito Lay, Tom's, Nabisco, Keebler and Austin.

         8. RELEASE OF THE COMPANY. Duggan, on behalf of himself and his heirs,
personal representatives, successors and assigns, hereby releases and forever
discharges the Company and its Affiliates, and each and every one of their
respective present and former shareholders, directors, officers, employees and
agents, and each of their respective successors and assigns, from and against
any and all claims, demands, actions, causes of action, damages, costs and
expenses, including without limitation all "Employment-Related Claims," which
Duggan now has or may have by reason of any thing occurring, done or omitted to
be done to the date of this Agreement; provided, however, this release shall not
apply to (i) any claims which Duggan may



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have for the payments or benefits expressly provided for Duggan or otherwise
specifically referred to in this Agreement; or (ii) the Company's obligation to
defend and indemnify Duggan in accordance with the provisions of the Company's
Bylaws and Restated Articles of Incorporation. For purposes of this Agreement,
"Employment-Related Claims" means all rights and claims Duggan has or may have:

         (i)      related to his employment by or status as an employee of the
                  Company or any of its Affiliates or the termination of that
                  employment or status or to any employment practices and
                  policies of the Company, or its Affiliates; or

         (ii)     under the federal Age Discrimination in Employment Act of
                  1967, as amended ("ADEA").

         9. SPECIAL ADEA WAIVER ACKNOWLEDGEMENTS. DUGGAN ACKNOWLEDGES AND AGREES
THAT HE HAS READ THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS AGREEMENT CONTAINS
A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING RIGHTS AND CLAIMS
ARISING UNDER THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS
AMENDED ("ADEA"). DUGGAN FURTHER ACKNOWLEDGES AND AGREES THAT:

         (a)      THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE ANY RIGHTS
                  OR CLAIMS THAT MAY ARISE AFTER THE DATE OF THIS AGREEMENT;

         (b)      HE IS ENTERING INTO THIS AGREEMENT AND RELEASING, WAIVING AND
                  DISCHARGING RIGHTS OR CLAIMS ONLY IN EXCHANGE FOR
                  CONSIDERATION WHICH HE IS NOT ALREADY ENTITLED TO RECEIVE;

         (c)      HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT,
                  TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS AGREEMENT
                  AND IS EXECUTING THIS AGREEMENT WITH THE ADVICE OF COUNSEL;

         (d)      HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT,
                  THAT HE HAS UP TO TWENTY-ONE DAYS (21) DAYS WITHIN WHICH TO
                  CONSIDER THIS AGREEMENT AND THAT IF HE EXECUTES THIS AGREEMENT
                  PRIOR TO THE EXPIRATION OF THE TWENTY-ONE (21) DAY PERIOD,
                  THEN HE EXPRESSLY WAIVES HIS RIGHTS WITH RESPECT TO THE
                  REMAINING TIME AND THAT THE AGREEMENT WILL BECOME EFFECTIVE
                  FOLLOWING THE EXPIRATION OF THE SEVEN (7) DAY PERIOD REFERRED
                  TO IN PARAGRAPH 8 (e) BELOW; AND



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<PAGE>   6

         (e)      HE IS AWARE THAT THIS AGREEMENT WILL NOT BECOME EFFECTIVE OR
                  ENFORCEABLE UNTIL SEVEN (7) DAYS FOLLOWING HIS EXECUTION OF
                  THIS AGREEMENT AND THAT HE MAY REVOKE THIS AGREEMENT AT ANY
                  TIME DURING SUCH PERIOD BY DELIVERING (OR CAUSING TO BE
                  DELIVERED) TO THE PRINCIPAL OFFICE OF THE COMPANY NOTICE OF
                  HIS REVOCATION OF THIS AGREEMENT NO LATER THAN 5:00 P.M.
                  EASTERN TIME ON THE SEVENTH (7TH) FULL DAY FOLLOWING HIS
                  EXECUTION OF THIS AGREEMENT.

         10. CONFIDENTIALITY OF THIS AGREEMENT; EMPLOYMENT REFERENCE. Duggan
shall not at any time, directly or indirectly, discuss with or disclose to
anyone (other than to members of his immediate family, his attorney, his tax
advisors and the appropriate taxing authorities or as otherwise required by law,
hereinafter "Qualified Persons") the terms of this Agreement, including the
amounts payable hereunder. Duggan further agrees that he shall not discuss with
anyone other than Qualified Persons the circumstances surrounding the
termination of his employment. If any person asks Duggan about the above
matters, he will simply say that he retired from the Company and all issues
relating to his employment have been resolved. Duggan further agrees that for a
period of five years from the Effective Date, he will refrain from making
derogatory comments about the Company or its agents or affiliates to the
Company's customers, suppliers or employees. The Company agrees that for a
period of five years from the Effective Date, the Company and its officers will
likewise refrain from making derogatory comments about Duggan to the Company's
customers, suppliers or employees. The Company further agrees that if any person
makes inquiry concerning Duggan, the Company will advise such person only as to
the dates of Duggan's employment with the Company, the positions held and that
he voluntarily retired from the Company.

         11. APPLICABLE LAW. This Agreement is made and executed with the
intention that the construction, interpretation and validity hereof shall be
determined in accordance with and governed by the laws of the State of North
Carolina.

         12. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns. This Agreement shall be
binding upon and inure to the benefit of Duggan, his heirs, executors and
administrators.

         13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes and
cancels all prior or contemporaneous oral or written agreements and
understandings between them with respect to the subject matter hereof.



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         IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed,
and Duggan has hereunto set his hand and seal, all as of the day and year first
above written.

                                   LANCE, INC.

[CORPORATE SEAL]

ATTEST:                            By    s/ Paul A. Stroup, III
                                         ---------------------------------------
                                         President
s/ Robert S. Carles
----------------------------
Secretary

                                         s/ Peter M. Duggan               [SEAL]
                                         ---------------------------------
                                         Peter M. Duggan



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<PAGE>   8

                               AMENDMENT AGREEMENT


         THIS AMENDMENT AGREEMENT (the "Agreement") is entered into as of June
26, 1998 by and between LANCE, INC., a North Carolina corporation (the
"Company"), and PETER M. DUGGAN ("Duggan").

                              STATEMENT OF PURPOSE

         The Company through its Compensation/Stock Option Committee has
heretofore granted to Duggan certain nonqualified stock options and performance
restricted stock awards. Pursuant to Early Retirement Agreement dated as of June
10, 1998 Duggan has retired from the Company. The Committee has authorized
amendments to certain Nonqualified Stock Option Agreements and Performance
Restricted Stock Award Agreements between the Company and Duggan on the terms
and conditions contained herein.

         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.       AMENDMENT OF NONQUALIFIED STOCK OPTION AGREEMENTS.

                  (a)      The Nonqualified Stock Option Agreement dated April
                           19, 1996 between the Company and Duggan is hereby
                           amended to provide that the vested option to purchase
                           6,350 shares of the Common Stock of the Company may
                           be exercised by Duggan at any time prior to three
                           years from the date hereof, through June 25, 2001.

                  (b)      The Nonqualified Stock Option Agreement dated April
                           18, 1997 between the Company and Duggan is hereby
                           amended to provide that the vested option to purchase
                           2,512 shares of the Common Stock of the Company may
                           be exercised by Duggan at any time prior to three
                           years from the date hereof, through June 25, 2001.

         2.       AMENDMENT OF PERFORMANCE RESTRICTED STOCK AWARD AGREEMENTS.

                  (a)      The Performance Restricted Stock Award Agreement
                           dated April 18, 1997 between the Company and Duggan
                           is hereby amended to provide that the Shares are
                           vested pro rata based on the number of full months
                           from the date of award through the date hereof to the
                           date three years after the award date which results
                           in the vesting of 603 shares of Common Stock of the
                           Company which shares shall be issued to Duggan
                           without restriction. The balance of the Shares shall
                           be forfeited.

                  (b)      The Performance Restricted Stock Award Agreement
                           dated April 16, 1998 between the Company and Duggan
                           is hereby amended to provide that the Shares are
                           vested pro rata based on the number of full months
                           from the



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                           date of award through the date hereof to the date
                           three years after the award date which results in the
                           vesting of 78 shares of Common Stock of the Company
                           which shares shall be issued to Duggan without
                           restriction. The balance of the Shares shall be
                           forfeited.

         3. MISCELLANEOUS. Except as expressly modified herein the above
described Nonqualified Stock Option Agreements and Performance Restricted Stock
Award Agreements shall remain in full force and effect. This Agreement shall be
governed by and construed in accordance with the laws of the State of North
Carolina. This Agreement shall be binding upon and inure to the benefit of the
Company, its successors and assigns. This Agreement shall be binding upon and
inure to the benefit of Duggan, his heirs, executors and administrators.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officer and Duggan has hereunto set his hand and seal,
all as of the day and year first above written.

                                   LANCE, INC.



                                   By     s/ Earl D. Leake
                                       -----------------------------------------
                                          Vice President



                                          s/ Peter M. Duggan              [SEAL]
                                   ---------------------------------------
                                   Peter M. Duggan




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