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Executive Severance Agreement - Lance Inc. and Earl D. Leake

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STATE OF NORTH CAROLINA                                           EXECUTIVE
                                                             SEVERANCE AGREEMENT
COUNTY OF MECKLENBURG


         THIS AGREEMENT, entered into this 7th day of November, 1997, by and
between Lance, Inc., a North Carolina corporation, hereinafter referred to as
the "Company", and Earl D. Leake, hereinafter referred to as "Executive";

                              STATEMENT OF PURPOSE

         On February 21, 1995, the Company and Executive entered into an
Executive Employment Agreement (the "Employment 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 Vice President of Human Resources and holds various other positions
with the Company and its Affiliates.

         The Board of Directors of the Company has recently authorized a program
(the "New Severance Program") designed to provide certain executives of the
Company with severance benefits upon the termination of their employment with
the Company and its Affiliates under certain circumstances following a Change in
Control of the Company. Certain of the benefits provided Executive under the
Employment Agreement would be duplicative of the benefits offered under the New
Severance Program. Moreover, the benefits which would be provided Executive
under the Employment Agreement in the event of Executive's involuntary
termination of employment without Cause prior to a Change in Control are not
clear.

         Therefore, the Company and Executive have decided that it is desirable
and in their respective best interests that the Employment Agreement be
terminated and in lieu thereof that Executive and the Company enter into (i) a
Compensation and Benefits Assurance Agreement pursuant to the New Severance
Program and (ii) this Agreement which 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.

         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:

<PAGE>   2

                  (a)      "Cause" means:

                           (i)      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
                                    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

                           (ii)     A material and willful breach of Executive's
                                    fiduciary duties to the Company and its
                                    stockholders; or

                           (iii)    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

                           (iv)     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

                           (v)      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.

                  (b)      "Compensation and Benefits Assurance Agreement" means
                           that certain Compensation and Benefits Assurance
                           Agreement between Executive and the Company entered
                           into on the date hereof.

                  (c)      "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.

                  (d)      "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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<PAGE>   3

                  (e)      "Payment Period" means the time beginning with the
                           Period following the Period in which Executive's
                           Retirement 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
                           Retirement or (ii) the last day of the Company's
                           fiscal year during which occurs the seventy-fifth
                           anniversary of Executive's birth.

                  (f)      "Period" means the Company's accounting period as
                           hereinafter described. In accordance with the
                           provisions of ss.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.

                  (g)      "Retire" and "Retirement" mean any Termination of
                           Employment (including on account of death or
                           Disability) on or after the Retirement Date.

                  (h)      "Retirement Date" means the earlier of:

                           (i)      the last day of the Company's fiscal year
                                    during which Executive attains the age of
                                    sixty (60) years (i.e., December 31, 2011);

                           (ii)     the date of Executive's death while employed
                                    by the Company; or

                           (iii)    the date of Executive's Termination of
                                    Employment by reason of Executive's
                                    Disability.

                  (i)      "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.

                  (j)      "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,



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                           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.

                  (k)      "Termination Date" means the date of Executive's
                           Termination of Employment.

                  (l)      "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 Wall Street Journal for the date of
                           Executive's Termination of Employment, using the
                           dividends paid during the twelve month period
                           immediately prior to the date of Executive's
                           Termination of Employment and using a stock price
                           volatility factor as reflected in the Company's most
                           recent proxy statement.

         2. TERMINATION OF EMPLOYMENT AGREEMENT. The Employment Agreement is
hereby terminated and neither the Company nor Executive have any further
obligations thereunder.

         3. RETIREMENT.

                  (a) RETIREMENT BENEFITS PAYMENT. Subject to Paragraph 3(d),
                  following Executive's Retirement the Company agrees to pay
                  Executive in each Period during the Payment Period retirement
                  benefits in an amount to be determined as hereinafter provided
                  in this Paragraph 3(a). The amount payable to Executive in
                  each Period during the Payment Period under this Paragraph
                  3(a) shall be determined as follows:

                           (i)      determine the product obtained by
                                    multiplying Executive's Current Annual
                                    Salary by five (5), and

                           (ii)     divide said product so obtained by the
                                    number of full Periods during the Payment
                                    Period.

                  Said retirement benefit payments shall be made at the end of
                  each Period. In the event that Executive dies after Retirement
                  and prior to the end of the Payment Period, retirement benefit
                  payments under this Paragraph 3(a) shall terminate with the
                  payment for the Period in which death occurs. Payments under
                  this Paragraph 3(a) are on account of Executive's retirement.

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<PAGE>   5

                  (b) DEATH BENEFIT PAYMENTS. In the event of Executive's
                  Retirement by reason of his death or in the event of
                  Executive's death after his Retirement but prior to the end of
                  the Payment Period, subject to Paragraph 3(d), the Company
                  agrees to pay to the beneficiary designated by Executive [or
                  to Executive's estate in the event (i) he has not designated a
                  beneficiary, or (ii) the beneficiary designated by Executive
                  fails to survive him] in each Period during the remainder of
                  the Payment Period, a death benefit in an amount equal to
                  seventy-five percent (75%) of the retirement benefit amount
                  otherwise payable in each Period to Executive under Paragraph
                  3(a) above. Said 75% of the amount otherwise payable in each
                  period under Paragraph 3(a) is the total amount payable by the
                  Company under this Agreement to such beneficiary. If
                  Executive's Retirement is by reason of his death, then the
                  "retirement benefit amount otherwise payable in each period to
                  Executive under Paragraph 3(a) above" shall be the retirement
                  benefit amount which Executive would have received if he had
                  otherwise Retired and commenced receiving retirement benefits
                  on his date of death. The payments under this Paragraph 3(b)
                  shall begin with the Period following the Period in which
                  death occurs and shall end with the expiration of the Payment
                  Period. Said death benefit payments shall be made at the end
                  of each Period.

                  (c) DESIGNATION OF BENEFICIARY. Executive may designate a
                  beneficiary to receive payments payable hereunder after his
                  death by filing with the Company a beneficiary designation on
                  a form approved by the Company, bearing the name, address and
                  relationship of the beneficiary, which beneficiary designation
                  form shall be acknowledged by Executive before a Notary Public
                  or other officer authorized to administer oaths, and shall be
                  in such other form and shall contain such other information as
                  shall be satisfactory to the Company. The beneficiary may be
                  changed by Executive at any time by filing a new beneficiary
                  designation form with the Company, said new beneficiary
                  designation form to comply with the provisions of this
                  Paragraph 3(c). If Executive shall not be survived by the
                  beneficiary designated in accordance with the provisions
                  herein set forth, then upon Executive's death, any and all
                  payments provided for herein shall be made to Executive's
                  estate. If Executive shall be survived by the beneficiary
                  designated as provided herein, and such beneficiary shall die
                  prior to receiving all amounts payable hereunder to such
                  deceased beneficiary if such beneficiary had lived, then all
                  remaining amounts that would have been paid to such deceased
                  beneficiary if living shall be paid to the estate of such
                  deceased beneficiary.

                  (d) LUMP SUM PAYMENTS. Notwithstanding the foregoing, in lieu
                  of the periodic payments provided for in Paragraphs 3(a) and
                  3(b) above, Executive or his beneficiary or estate, as the
                  case may be, may elect prior to the time such payments are to
                  commence to have the present value of such payments made in a
                  single cash payment within thirty (30) days of the date such
                  payments would otherwise commence, said present value to be
                  determined



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<PAGE>   6

                  using the interest rate equal to the yield on the 10-year
                  United States Treasury Bond on the date payments would
                  otherwise commence and, in the case of payments under
                  Paragraph 3(a), without any discount for mortality. In any
                  case where payments hereunder are to be made to an estate
                  (either the estate of Executive or the estate of a deceased
                  beneficiary), the Company may elect in lieu of making the
                  periodic payments provided in Paragraph 3(b) to have the
                  present value of such payments made in a single cash payment
                  within thirty (30) days of the date such payments would
                  otherwise commence, said present value to be determined in the
                  same manner as provided above.

         4. TERMINATION OF EMPLOYMENT AFTER A CHANGE IN CONTROL AND PRIOR TO
RETIREMENT.

                  (a) COMPENSATION AND BENEFITS ASSURANCE AGREEMENT.
                  Contemporaneously herewith, the Company and Executive have
                  entered into the Compensation and Benefits Assurance
                  Agreement. In no event shall any payments or benefits be made
                  to or provided Executive under the terms of this Agreement
                  upon Executive's Termination of Employment after a Change in
                  Control and prior to Executive's Retirement Date except for
                  the benefit expressly provided for in Paragraph 4(b).

                  (b) PRE-RETIREMENT PAYMENT. In the event of Executive's
                  Termination of Employment, whether voluntary or involuntary,
                  with or without Cause, after a Change in Control but prior to
                  Executive's Retirement Date, the Company agrees to pay
                  Executive a single lump sum cash payment within thirty (30)
                  days after the Termination Date in an amount equal to the
                  "current value" [computed as hereinafter provided in this
                  Paragraph 4(b)] of the per period amount of the retirement
                  benefits to which Executive would have been entitled to under
                  Paragraph 3 of this Agreement determined as if Executive's
                  Retirement had occurred on the Termination Date. The "current
                  value" of such per period amount of such retirement benefits
                  shall be the present value on the Termination Date of such
                  retirement benefits based on the following assumptions:

                           (i)      Payment of such per period amount of such
                                    retirement benefits would commence with the
                                    Period following the last day of the
                                    Company's fiscal year during which the
                                    Executive would attain the age of sixty (60)
                                    years (i.e., December 31, 2011) and the
                                    Payment Period would continue through the
                                    end of the Period during which occurs
                                    December 31, 2026;

                           (ii)     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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<PAGE>   7

                           (iii)    Such present value shall be determined
                                    without any discount for mortality.

         5. INVOLUNTARY TERMINATION OF EMPLOYMENT PRIOR TO A CHANGE IN CONTROL
OR EXECUTIVE'S RETIREMENT DATE. In the event of Executive's involuntary
Termination of Employment without Cause prior to the earlier of a Change in
Control or Executive's Retirement Date, the Company agrees to pay to or provide
Executive with the following:

                  (a)      A single cash payment in an amount equal to the
                           Severance Multiple multiplied by the sum of (i) the
                           highest Base Salary paid to Executive during his
                           employment by the Company plus (ii) the Executive's
                           then-current target bonus opportunity (stated in
                           terms of a percentage of Base Salary) established
                           under the Company's Annual Corporate Performance
                           Incentive Plan for Officers (or any successor plan
                           thereto), if any, in effect on the Termination Date,
                           which payment shall be made within thirty (30) days
                           after the Termination Date.

                  (b)      Payment of retirement benefits and death benefits,
                           computed in accordance with Paragraph 3 of this
                           Agreement as if Executive's Retirement had occurred
                           on the Termination Date, which such payments shall be
                           made in accordance with the provisions of Paragraph 3
                           as if Executive's Retirement had occurred on the
                           Termination Date.

                  (c)      A single cash payment in an amount equal to
                           Executive's unpaid Base Salary, accrued vacation pay,
                           unreimbursed business expenses, and all other items
                           earned by and owed to Executive through the
                           Termination Date.

                  (d)      A single cash payment in an amount equal to the
                           greater of (i) the Executive's then-current target
                           bonus opportunity (stated in terms of a percentage of
                           Base Salary) established under the Company's Annual
                           Corporate Performance Incentive Plan for Officers (or
                           any successor plan thereto), if any, for the
                           incentive plan year in which the Termination Date
                           occurs, adjusted on a pro-rata basis based on the
                           number of days Executive was actually employed during
                           such incentive plan year or (ii) the actual bonus
                           earned through the Termination Date under the
                           Company's Annual Corporate Performance Incentive Plan
                           for Officers (or any successor plan thereto), if any,
                           based on the then-current level of goal achievement;
                           which payment shall be made at the same time as the
                           payments are made to the Company's other employees
                           under the Company's Annual Corporate Performance
                           Incentive Plan for Officers (or any successor plan
                           thereto), if any, for the incentive plan year during
                           which the Termination Date occurs.

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<PAGE>   8

                  (e)      Conveyance of possession and title to the
                           Company-owned automobile, if any, used by Executive
                           in connection with his employment immediately prior
                           to the Termination Date within thirty (30) days after
                           such Termination Date.

                  (f)      A single cash payment of the Value of the Stock
                           Options, which payment shall be paid within ten (10)
                           days following the expiration of such Stock Options.

                  (g)      Medical Insurance coverage for Executive until
                           Executive reaches the age of sixty (60) (July 24,
                           2011) or his earlier death under such terms and
                           conditions as are most closely comparable to the
                           "Plan B" or HMO coverage option provided Executive
                           under the Company's Group Medical Benefits Plan on
                           the Termination Date and as shall be thereafter
                           customarily provided by the Company to the Company's
                           executives from time to time during such period.
                           During this period, Executive shall be entitled to
                           obtain at Executive's expense such optional
                           coverages, such as dental coverage and
                           family/dependent medical coverage, under the
                           Company's Group Medical Benefits Plan as are
                           available for the Company's employees generally.
                           After age sixty (60) Executive may elect to obtain at
                           Executive's expense coverage as a "retiree" under
                           such Group Medical Benefits Plan, if any, as may be
                           then available to the Company's retired executives.

                  (h)      Life Insurance, accidental death and dismemberment
                           insurance and disability insurance for Executive
                           until Executive reaches age sixty (60) (July 24,
                           2011) or his earlier death under such terms and
                           conditions that are reasonably comparable to the
                           coverages provided Executive under the Company's
                           plans for such insurance on the Termination Date and
                           as shall be thereafter customarily provided by the
                           Company to Company's executives from time to time
                           during such period.

                  (i)      Indemnification of Executive from any claims asserted
                           against Executive arising out of the prior
                           performance of Executive's duties with the Company or
                           its Affiliates to the same extent as the Company
                           indemnifies retired officers or directors of the
                           Company.

                  (j)      Payment of Executive's vested interest under the
                           Company sponsored qualified profit sharing and 401(k)
                           Plans 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 and conditions of such
                           Plans.

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<PAGE>   9

                  (k)      At no expense to Executive, standard outplacement
                           services for Executive from a nationally recognized
                           outplacement firm of Executive's selection, for a
                           period of up to two (2) years from the Termination
                           Date. However, such services shall be at the
                           Company's expense to a maximum amount not to exceed
                           twenty percent (20%) of the Executive's Base Salary
                           as of the Termination Date.

         6. OTHER TERMINATION OF EMPLOYMENT. Except as otherwise expressly
provided to the contrary in the Compensation and Benefits Assurance Agreement
and in Paragraph 4 of this Agreement, Executive shall not be entitled to any
payments or benefits upon his Termination of Employment in the following events:

                  (a)      Executive's voluntary Termination of Employment prior
                           to his Retirement Date, or

                  (b)      Executive's involuntary Termination of Employment for
                           Cause prior to his Retirement Date, or

                  (c)      Executive's Termination of Employment, whether
                           voluntary or involuntary, with or without Cause,
                           prior to his Retirement Date and following a Change
                           in Control.

         7. MITIGATION. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement, nor shall the amount
of any payment hereunder be reduced by any compensation earned by Executive as a
result of employment by another employer.

         8. ADEA WAIVER. Executive understands that the severance benefits
provided in Paragraph 5 will decline as Executive approaches the age of sixty
(60) years and will be eliminated at the end of the Company's fiscal year during
which Executive attains the age of sixty (60) years. Moreover, the Compensation
and Benefits Assurance Agreement may be terminated by the Company at the end of
the Company's fiscal year during which Executive attains the age of sixty (60)
years. If such reduction and/or elimination of benefits is construed to violate
the Age Discrimination in Employment Act of 1967, as amended, Executive does
hereby release and waive any claim he may have by reason of such violation.
Executive acknowledges that this Agreement and the Compensation and Benefits
Agreement provide new consideration which he was not previously entitled to
receive, that he has consulted an attorney before executing the agreements, and
that he has been given up to twenty-one (21) days within which to consider the
agreements. This Agreement will not become effective or enforceable until seven
(7) days following Executive's execution of this Agreement, and Executive may
revoke this Agreement at any time during such seven-day period by delivering (or
causing to be delivered) to the principal office of the Company a notice of his
revocation of this Agreement. The execution of the Compensation and Benefits
Assurance Agreement is in part consideration for and an integral part of this
Agreement, and



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therefore, any such revocation of this Agreement will also constitute a
revocation and cancellation of the Compensation and Benefits Assurance
Agreement.

         9. LEGAL FEES AND EXPENSES. The Company shall pay all legal fees, costs
of litigation, prejudgment interest, and other expenses ("Legal Expenses") which
are incurred in good faith by Executive as a result of the Company's refusal to
provide the benefits to which Executive becomes entitled under this Agreement,
or as a result of the Company's (or any third party's) contesting the validity,
enforceability, or interpretation of this Agreement, or as a result of any
conflict between the parties pertaining to this Agreement; provided, however, in
no event shall the Company be required to pay any such expenses if it is finally
determined that Executive's Termination of Employment was for Cause.

         10. 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.

         11. 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 Executive, his heirs, executors and
administrators.

         12. 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.

         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 Executive has hereunto set his hand and seal, all as of the day and year
first above written.


                                            Lance, Inc.
[CORPORATE SEAL]

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

                                            /s/ Earl D. Leake             [SEAL]
                                            ------------------------------
                                            Earl D. Leake



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STATE OF NORTH CAROLINA

COUNTY OF MECKLENBURG

         I, Carolyn H. Martin, a Notary Public for said County and State, do
hereby certify that Earl D. Leake personally appeared before me this day and
acknowledged the due execution of the foregoing instrument.

         WITNESS my hand and notarial seal, this 7th day of November, 1997.


                                                  /s/ Carolyn H. Martin
                                                  ------------------------------
                                                       Notary Public


[NOTARIAL SEAL]

My Commission Expires:

    December 22, 2001
------------------------

STATE OF NORTH CAROLINA

COUNTY OF MECKLENBURG

         This 7th day of November, 1997, personally came before me Paul A.
Stroup, III, who, being by me duly sworn, says that he is President of Lance,
Inc., that the seal affixed to the foregoing instrument in writing is the
corporate seal of said Corporation, and that said writing was signed and sealed
by him, in behalf of said Corporation, by its authority duly given. And the said
Paul A. Stroup, III acknowledged the said writing to be the act and deed of said
Corporation.

                                                  /s/ Myrna Chromzck
                                                  ------------------------------
                                                       Notary Public



[NOTARIAL SEAL]

My Commission Expires:

   March 19, 1999
-------------------

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