(e) “Cause” means the occurrence of any one or more of the following: (i) A demonstrably willful and deliberate act or failure toact by Executive (other than as a result of incapacity due to physicalor mental illness) which is committed in bad faith, without reasonablebelief that such action or inaction is in the best interests of theCompany, which causes actual material financial injury to the Companyand which act or inaction is not remedied within fifteen (15) businessdays of written notice from the Company; or  (ii) The Executive’s conviction for committing an act offraud, embezzlement, theft, or any other act constituting a felonyinvolving moral turpitude or causing material harm, financial orotherwise, to the Company.“Cause” must be determined by the Board in the exercise of good faith and reasonable judgment.     (f) “Change in Control” means, and shall be deemed to have occurred upon, the first tooccur of any of the following events: (i) Any Outside Person becomes the Beneficial Owner,directly or indirectly, of securities of the Company representingtwenty-five percent (25%) or more of the combined voting power of theCompany’s then outstanding securities; or  (ii) During any period of two (2) consecutive years (notincluding any period prior to the date hereof), individuals who at thebeginning of such period constitute the Board of Directors of theCompany (and any new Director, whose nomination for election by theCompany’s stockholders was approved by a vote of at least two-thirds(2/3) of the Directors then in office who either were Directors at thebeginning of the period or whose nomination for election was soapproved) cease for any reason to constitute a majority of the membersof the Board of Directors of the Company; or  (iii) The stockholders of the Company approve: (i) a plan ofcomplete liquidation of the Company; or (ii) an agreement for the saleor disposition of all or substantially all of the Company’s assetsother than a sale or disposition of all or substantially all of theCompany’s assets to an entity at least sixty percent (60%) of thecombined voting power of the voting securities of which are owned bythe stockholders of the Company in substantially the same proportionsas their ownership of the Company immediately prior to such sale ordisposition; or
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 (iv) The stockholders of the Company approve a merger,consolidation, or reorganization of the Company with or involving anyother corporation, other than a merger, consolidation, orreorganization that would result in the voting securities of theCompany outstanding immediately prior thereto continuing to represent(either by remaining outstanding or by being converted into votingsecurities of the surviving entity) or any parent thereof at leastsixty percent (60%) of the combined voting power of the votingsecurities of the Company (or such surviving entity) outstandingimmediately after such merger, consolidation, or reorganization.However, in no event shall a “Change in Control” be deemed to have occurred if Executive is part ofa purchasing group which consummates the Change in Control transaction. Executive shall be deemed“part of a purchasing group” for purposes of the preceding sentence if Executive is an equityparticipant in the acquiring company or group or surviving entity (the “Purchaser”) except forownership of less than one percent (1%) of the equity of the Purchaser.     (g) “Code” means the Internal Revenue Code of 1986, as amended.     (h) “Company” means Lance, Inc., a North Carolina corporation, and such term includesany or all of its Affiliates.     (i) “Effective Date” means the date of the Prior Agreement.     (j) “Excess Parachute Payment” means “excess parachute payment” within the meaning ofSection 280G of the Code.     (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time totime, or any successor act thereto.     (l) “Excise Tax” means the tax imposed on Excess Parachute Payments pursuant toSection 280G and Section 4999 of the Code.     (m) “Good Reason” means the occurrence of any one or more of the following, withoutExecutive’s prior express written consent, within the thirty-six (36) calendar months immediatelyfollowing a Change in Control: (i) The assignment of Executive to duties inconsistent withExecutive’s authorities, duties, responsibilities, and status as anofficer of the Company, or a reduction or alteration in the nature orstatus of Executive’s authorities, duties or responsibilities fromthose in effect as of one hundred eighty (180) calendar days prior tothe Change in Control, other than an insubstantial and inadvertent actthat is remedied by the Company promptly after receipt of noticethereof given by Executive;
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 (ii) The Company’s requiring Executive to be based at alocation in excess of fifty (50) miles from the location of Executive’sprincipal job location or office immediately prior to the Change inControl, except for required travel on the Company’s business to anextent consistent with Executive’s then present business travelobligations;  (iii) A reduction by the Company of Executive’s Base Salaryin effect on the date hereof, or as the same shall be increased fromtime to time;  (iv) The failure of the Company to keep in effect any of theCompany’s compensation, health and welfare benefits, or perquisiteprograms under which Executive receives value, as such programs existimmediately prior to the Change in Control; provided, however, thereplacement of an existing program with a new program will bepermissible (and not grounds for a Good Reason termination if done forall employees generally and the value to be delivered to Executiveunder the new program is at least as great as the value delivered toExecutive under the existing program); or  (v) Any breach by the Company of its obligations underParagraph 6 herein or any failure of a successor company to assume andagree to perform the Company’s entire obligations under this Agreementas required by Paragraph 6 herein.“Good Reason” shall be determined by Executive in the exercise of good faith and reasonablejudgment. Executive’s right to terminate employment for Good Reason shall not be affectedby Executive’s incapacity due to physical or mental illness. Executive’s continuedemployment shall not constitute consent to, or a waiver of rights with respect to, anycircumstance constituting Good Reason herein, and any such consent or waiver must be inwriting and signed by Executive.     (n) “Member of the Van Every Family” means (i) a lineal descendant of Salem A. VanEvery, Sr., including adopted persons as well as persons related by blood, (ii) a spouse of anindividual described in clause (i) of this Paragraph 1(n) or (iii) a trust, estate, custodian andother fiduciary or similar account for an individual described in clause (i) or (ii) of thisParagraph 1(n).     (o) “Outside Person” means any Person other than (i) a Member of the Van Every Family,(ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Companyor (iii) a corporation owned directly or indirectly by the stockholders of the Company insubstantially the same proportions as their ownership of stock of the Company.
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     (p) “Person” has the meaning ascribed to said term in Section 3(a)(9) of the ExchangeAct as modified and used in Sections 13(d) and 14(d) of the Exchange Act, including a “group” asdefined in Section 13(d) of the Exchange Act.     (q) “Qualifying Termination” has the meaning ascribed to said term in Paragraph 4(b)hereof.     (r) “Severance Benefits” has the meaning ascribed to said term in Paragraph 4(c)hereof.     (s) “Termination of Employment” means any termination of employment (as defined inSection 409A of the Code and the Company’s administrative policies, if any) with either the Companyor any successor to the Company that acquires all or substantially all of the business and/orassets of the Company (whether direct or indirect, by purchase, merger, consolidation orotherwise); provided, however, no termination of employment shall be deemed to have occurred byreason of such an acquisition unless there is either (i) a termination of employment with both theCompany and such successor or (ii) a termination of employment with the Company and no successiveemployment by such successor.     2. **Term of Agreement**.     (a) The term of this Agreement will commence on the Effective Date and shall continue ineffect until the third anniversary of the Effective Date (the “Initial Term”).     (b) The Initial Term of this Agreement automatically shall be extended for one additional yearat the end of the Initial Term, and then again after each one (1) year period thereafter (each suchone (1) year period following the Initial Term being hereinafter referred to as a “SuccessivePeriod”). However, subject to Paragraph 2(c) herein either party may terminate this Agreementeffective at the end of the Initial Term or at the end of any Successive Period thereafter (the“Expiration Date”) by giving the other party written notice of such termination and intent not torenew, delivered at least one (1) year prior to the Expiration Date. If such notice is properlydelivered by either party, this Agreement, along with all corresponding rights, duties andcovenants, shall automatically expire on the Expiration Date.     (c) Notwithstanding the foregoing, in the event that a Change in Control occurs during theInitial Term or any Successive Period, upon the effective date of such Change in Control the termof this Agreement shall automatically and irrevocably be renewed and extended for a period ofthirty-six (36) full calendar months from the effective date of such Change in Control (the “Changein Control Renewal Period”), and this Agreement shall automatically terminate upon the expirationof the Change in Control Renewal Period. Further, this Agreement shall be assigned to, and shallbe assumed by, the successor to the Company in such Change in Control as further provided inParagraph 6 herein.     3. **Employment**. The Company shall employ Executive to perform such tasks as the Company shallspecify from time to time. Executive agrees to devote his full time during customary businesshours and his best efforts to the business and affairs of the Company.
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Executive’s employment with the Company, however, may be terminated by either Executive or theCompany at any time, with or without Cause, upon notice by the party wishing to terminate suchemployment to the other party, and nothing in this Agreement shall give Executive any right to beretained in the employ of the Company or, upon dismissal, any rights except as expressly otherwiseprovided herein.     4. **Change in Control Severance Benefits**.     (a) The Company shall pay Executive the Severance Benefits described in Paragraph 4(c) hereinif during the Initial Term or any Successive Period a Change in Control occurs and if within thethirty-six (36) calendar months immediately following such Change in Control, Executive incurs aQualifying Termination. The Severance Benefits described in Subparagraphs (4)(c)(i) through (iv)herein shall be paid to Executive in cash in a single lump sum as soon as practicable followingExecutive’s Qualifying Termination, but in no event later than thirty (30) calendar days after suchdate. Notwithstanding the foregoing, however, Severance Benefits which become due pursuant toParagraphs 4(b)(iv) and 6(a) herein shall be paid immediately.     (b) The occurrence of any one or more of the following events (a “Qualifying Termination”)within the thirty-six (36) calendar months immediately following a Change in Control of the Companywhich occurred during the Term or any Successive Period shall entitle Executive to receive theSeverance Benefits: (i) Executive’s involuntary Termination of Employmentwithout Cause;  (ii) Executive’s voluntary Termination of Employment forGood Reason;  (iii) Executive’s voluntary Termination of Employment, withor without Good Reason, during the thirteenth (13th) calendar monthfollowing the month during which the Change in Control occurs; or  (iv) The Company, or any successor company, commits amaterial breach of any of the provisions of this Agreement.A Qualifying Termination shall not include Executive’s Termination of Employment within thirty-six(36) calendar months following a Change in Control by reason of death, disability [as such term isdefined under the Company’s governing disability plan (or any successor plan thereto)], Executive’svoluntary Termination of Employment without Good Reason except as otherwise expressly provided inParagraph 4(b)(iii) above, or Executive’s involuntary Termination of Employment for Cause.Moreover, a Termination of Employment which occurs before a Change in Control or later thanthirty-six (36) months following a Change in Control shall not constitute a Qualifying Termination.
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     (c) The “Severance Benefits” provided for in Paragraphs 4(a) and (b) herein are as follows: (i) A lump-sum cash amount equal to the Executive’s unpaidBase Salary , accrued vacation pay, unreimbursed business expenses, andall other items earned by and owed to the Executive through andincluding the date of Executive’s Qualifying Termination. Such paymentshall constitute full satisfaction for these amounts owed to Executive.  (ii) A lump-sum cash amount equal to the sum of (A) three(3) multiplied by the Executive’s Base Salary in effect upon the dateof the Qualifying Termination or, if greater, by Executive’s BaseSalary in effect immediately prior to the occurrence of the Change inControl plus (B) three (3) multiplied by the greater of (I) Executive’sannual bonus actually earned by Executive (whether or not deferred)during the bonus plan year which ended immediately prior to theQualifying Termination or (II) Executive’s then-current target bonusopportunity (stated in terms of a percentage of Base Salary)established under the Company’s Annual Corporate Performance IncentivePlan for Officers (or any successor plan thereto), if any, for theincentive plan year in which the date of Executive’s QualifyingTermination occurs.  (iii) A lump-sum cash amount equal to the greater of (A) theExecutive’s then-current target bonus opportunity (stated in terms of apercentage of Base Salary) established under the Company’s AnnualCorporate Performance Incentive Plan for Officers (or any successorplan thereto), if any, for the incentive plan year in which the date ofExecutive’s Qualifying Termination occurs, adjusted on a pro rata basisbased on the number of days Executive was actually employed during suchincentive plan year (but in no event shall such target bonus be lessthan that in effect for the period immediately prior to the occurrenceof the Change in Control); or (B) the actual bonus earned through thedate of the Qualifying Termination under the Company’s Annual CorporatePerformance Incentive Plan for Officers (or any successor planthereto), if any, based on the then-current level of goal achievement.Such payment shall constitute full satisfaction for these amounts owedto Executive.  (iv) A lump-sum cash amount equal to the product determinedby multiplying (A) the sum of the amounts payable under Subparagraphs4(c) (i), (ii) and (iii) herein by (B) the highest percentage ofExecutive’s compensation (eligible for such contributions) contributedto the Executive’s account under the
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   Lance, Inc. Profit-Sharing Retirement Plan and Trust (the“Retirement Plan”) during the three (3) consecutive plan years endedimmediately prior to the Qualifying Termination. The source ofpayment of this sum shall be the general assets of the Companyunless the payment of such amounts is otherwise permissible from theRetirement Plan without violating any governmental regulations orstatutes including, but not limited to, ERISA discrimination testingrequirements.  (v) At the exact same cost to Executive, and at the samecoverage level as in effect as of the date of Executive’s QualifyingTermination (subject to changes in coverage levels applicable to allemployees generally), a continuation of the Executive’s (andExecutive’s eligible dependents’) health insurance coverage forthirty-six (36) months from the date of the Qualifying Termination.The applicable COBRA health insurance benefit continuation period shallbegin coincident with the beginning of this thirty-six (36) monthbenefit continuation period. Commencing with the end of theExecutive’s COBRA period and until the end of the thirty-six (36) monthbenefit continuation period, the Executive will recognize taxableincome equal to the difference between the premium that the Executiveactually pays and the premium that would be paid by a similarlysituated COBRA participant.    Provided, however, the provision of these health insurance benefitsshall be discontinued prior to the end of the thirty-six (36) monthcontinuation period to the extent that Executive becomes coveredunder the health insurance coverage of a subsequent employer whichdoes not contain any exclusion or limitation with respect to anypreexisting condition of Executive or Executive’s eligibledependents. For purposes of enforcing this offset provision,Executive shall have a duty to inform the Company if Executivebecomes covered under any such health insurance of a subsequentemployer. Executive shall provide, or cause to provide, to theCompany in writing correct, complete, and timely informationconcerning the same.  (vi) At no expense to Executive, standard outplacementservices for Executive from a nationally recognized outplacement firmof Executive’s selection, for a period of up to two (2) years from thedate of Executive’s Qualifying Termination. However, such servicesshall be at the Company’s expense to a maximum amount not to exceedtwenty percent (20%) of the Executive’s Base Salary as of the date ofExecutive’s Qualifying Termination**.**In no event shall reimbursementfor eligible outplacement expenses be made to
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   the Executive later than the end of the third calendar yearfollowing the year of the Executive’s Termination of Employment.  (vii) For the purposes of calculating Severance Benefits,Executive’s employment bonus of $           shall not be considered anannual or target bonus.     5. **Excise Tax Payment**.     (a) Following a Qualifying Termination, if any portion of the Severance Benefits or any otherpayment or benefits under any agreement with or plan of the Company, including but not limited tostock options and other long-term incentives, (hereinafter referred to in the aggregate as “TotalPayments”) will be subject to the Excise Tax, the Company shall pay to Executive, in cash, anadditional amount (the “Gross-Up Payment”) sufficient to cover the full cost of all Excise Taxesand Executive’s federal, state and local income and employment taxes on this additional payment sothat the net amount retained by Executive, after the payment of all Excise Taxes on the TotalPayments and all federal, state and local income and employment taxes and Excise Taxes on theGross-Up Payment, shall be equal to the Total Payments. The Total Payments, however, shall besubject to any federal, state and local income and employment taxes thereon. For this purpose,Executive shall be deemed to be in the highest marginal rate of federal, state and local taxes.The Gross-Up Payment shall be made at the same time as the Severance Benefits described inSubparagraphs 4(c)(i) through (iv) herein are due.     (b) In the event the Internal Revenue Service subsequently adjusts the Excise Tax computationmade pursuant to Paragraph 5(a) above, the Company shall pay Executive an additional Gross-UpPayment in the full amount necessary to make Executive whole on an after-tax basis (less anyamounts received by Executive that Executive would not have received had the computations initiallybeen computed as subsequently adjusted), including the amount of any underpaid Excise Tax, and anyrelated interest and/or penalties due to the Internal Revenue Service. However, in no event shallany Gross-Up Payments to Executive be made later than the end of the calendar year following thecalendar year in which Executive remits the Excise Taxes.     6. **Assignment of This Agreement or Benefits Hereunder**.     (a) **Successors**. The Company will require any successor (whether via a Change in Control,direct or indirect, by purchase, merger, consolidation, or otherwise) of the Company to expresslyassume and agree to perform the obligations under this Agreement in the same manner and to the sameextent that the Company would be required to perform it if no such succession had taken place.Failure of the Company to obtain such assumption and agreement prior to the effectiveness of anysuch succession shall, as of the date immediately preceding the date of a Change in Control,automatically provide Executive with Good Reason to collect, immediately, full benefits hereunderas a Qualifying Termination.     (b) **Assignment by Executive**. This Agreement shall inure to the benefit of and be enforceableby Executive’s personal or legal representatives, executors, administrators, successors, heirs,distributees, devisees, and legatees. If an Executive should die while any
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amount is still payable to Executive hereunder had the Executive continued to live, all suchamounts, unless otherwise provided herein, shall be paid in accordance with the terms of thisCompensation and Assurance Benefits Agreement to Executive’s estate. Executive’s rights hereundershall not otherwise be assignable.     7. **Notices**. Any notice required to be delivered to the Company by Executive hereunder shallbe properly delivered to the Company when personally delivered to (including by a reputableovernight courier), or actually received through the U.S. mail, postage prepaid, by:Lance, Inc.