Document:

Ex-10.1

 

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement (this “Agreement”) is entered into this 11th day of May
2005 (the “Effective Date”), by and between Lance, Inc., a North Carolina corporation (the
“Company”), and David V. Singer (the “Executive”).

Statement of Purpose

     The Company desires to employ the Executive, and the Executive desires to accept employment,
on the terms and conditions set forth in this Agreement, as well as in the Compensation and
Benefits Assurance Agreement and the RSU Agreement, which are also being executed as of the
Effective Date.

     In consideration of the foregoing, the mutual agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
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:

	 	(a)  	“Cause” means:

	 	(i)  	A demonstrably willful and deliberate
act or failure to act by the Executive (other than as a result
of incapacity due to physical or mental illness, but including
a breach of fiduciary duty owed to the Company or its
shareholders) that is committed in bad faith, without
reasonable belief that such action or inaction is in the best
interests of the Company, which causes actual material
financial injury to the Company and which act or inaction is
not remedied within fifteen (15) business days of written
notice from the Board of Directors of the Company (“the
Board”);
	 
	 	(ii)  	The Executive’s commission of a crime
involving moral turpitude, fraud, theft or financial dishonesty
that is materially detrimental to the Company or its good will
or that materially causes harm to the Company’s relationships
with its customers, suppliers or employees;
	 
	 	(iii)  	The Executive’s habitual and
intemperate use of alcohol or illegal drugs (including the
abuse of prescribed medication) to the extent that the same,
after affording the Executive any required reasonable
accommodation, materially interferes with the Executive’s
ability to competently, diligently and substantially perform
the essential duties of his employment;

 

 

	 	   	“Cause” must be determined by the Board in the exercise of good
faith and reasonable judgment, and be evidenced by a written
resolution adopted prior to any termination of the Executive’s
employment specifying the conduct of the Executive giving rise to a
determination of Cause.

	 	(b)  	“Compensation and Benefits Assurance Agreement” means that
certain Compensation and Benefits Assurance Agreement between the Executive and
the Company entered into as of the Effective Date.
	 
	 	(c)  	“Effective Date” means the date of this Agreement.
	 
	 	(d)  	“RSU Agreement” means that certain Restricted Stock Unit Award
Agreement between the Executive and the Company entered into as of the
Effective Date.
	 
	 	(e)  	“Termination Date” means the date of the termination of
Executive’s employment with the Company for any reason.

     2. Employment Term. Subject to the terms and conditions of this Agreement, the Company
hereby employs the Executive, and the Executive hereby accepts employment, commencing on the
Effective Date and ending on the later of the third anniversary of the Effective Date or on the
last day of the Extension Period, unless sooner terminated pursuant to Paragraph 6 hereof (the
“Employment Term”). The Employment Term shall automatically be extended for an additional one-year
period and then again on each succeeding anniversary thereof (“the Extension Period”) unless the
Company or the Executive provides notice in writing to the other party of that party’s intention
not to extend the Employment Term, delivered at least ninety (90) days prior to the end of the
Employment Term.

     3. Position. The Executive will be employed in the position of President and Chief Executive
Officer and will perform such services for the Company and its Affiliates as are customarily
associated with such positions and as may reasonably otherwise be assigned to the Executive from
time to time by the Board (or any authorized committee of the Board). The Executive will devote
his full business time, attention, knowledge and skills to the affairs of the Company and to his
duties hereunder, and will perform such duties diligently and to the best of his ability.
Provided, however, that nothing herein will restrict the Executive’s ability to engage in
charitable, nonprofit, civic, board (provided that without the prior consent of the Board, the
Executive shall not be permitted to serve on the board of more than one public company in addition
to the Board of the Company), consulting or community activities that do not unreasonably interfere
with the discharge of his responsibilities hereunder.

     4. Compensation and Benefits; Withholding. The Company will provide to the Executive the
compensation and benefits set forth on Schedule 1 attached hereto. The Company may
withhold from any amounts payable under this Agreement such federal, state and local taxes required
to be withheld pursuant to any applicable law.

     5. Reimbursement of Expenses. The Company will reimburse the Executive for all reasonable
business expenses incurred by the Executive in connection with the performance of

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his duties hereunder, in accordance with and subject to the Company’s reimbursement policies in
effect from time to time and the Company’s receipt of evidence of such expenses reasonably
satisfactory to the Company.

     6. Termination. This Agreement is subject to termination and the Employment Term will end as
follows:

          (a) Death. Immediately upon the Executive’s death.

          (b) Disability. By the Company effective upon written notice to the Executive in the event of
the Executive’s Disability. As used herein, “Disability” means the inability of the Executive, due
to a mental or physical impairment, to perform the essential functions of his job with or without
reasonable accommodation for a continuous period of more than 90 days or for 90 days in any period
of 180 consecutive days. Prior to furnishing notice of termination for Disability, the Company
shall exercise its best efforts to provide the Executive reasonable accommodation for any such
impairment, as required by the Americans With Disabilities Act, and shall, if requested by the
Executive, exercise its best efforts to assist the Executive in obtaining benefits under any
short-term or long-term disability plan sponsored by the Company and/or its insurers.

          (c) For Cause. By the Company effective upon written notice to the Executive for Cause, as
set forth in Paragraph 1(a) above.

          (d) Without Cause. By the Company effective immediately upon written notice to the Executive
at any time for any reason other than for Cause or the Executive’s Disability (including notice by
the Company of an intention not to extend the Employment Term pursuant to Paragraph 2 hereof).

          (e) Resignation. By the Executive effective upon 30 days written notice to the Company at any
time for any reason.

     7. Effect of Termination.

          (a) Compensation and Benefits Assurance Agreement and RSU Agreement. Contemporaneously
herewith, the Company and the Executive have entered into the Compensation and Benefits Assurance
Agreement which provides certain “Severance Benefits” in connection with a “Qualifying Termination”
of employment following a “Change in Control” (as those terms are defined therein).
Notwithstanding anything to the contrary contained herein, in no event shall any payments or
benefits be made to or provided the Executive under the terms of this Executive Employment
Agreement if Severance Benefits are payable under the Compensation and Benefits Assurance
Agreement. In addition, contemporaneously herewith, the Company and the Executive have entered
into the RSU Agreement. Notwithstanding anything to the contrary contained herein, the effect of
the Executive’s termination of employment on the award of restricted stock units under the RSU
Agreement shall be determined exclusively under the terms and provisions of the RSU Agreement.

          (b) Certain Involuntary Terminations of Employment. If the Executive’s employment
hereunder is terminated by the Company (rather than voluntarily by the Executive)

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prior to a Change in Control for any reason other than Cause, death or Disability (including a
termination by the Company as a result of a notice by the Company of its decision not to extend the

Employment Term as provided by Paragraph 2 hereof) , the Company agrees to pay to or provide
the Executive with the following:

	 	(i)  	A single cash payment in an amount equal to the
Executive’s unpaid Base Salary, accrued vacation pay, unreimbursed
business expenses, and all other items earned by and owed to the
Executive through the Termination Date, to be paid on or as soon as
administratively practicable after the Termination Date.
	 
	 	(ii)  	A single cash payment in an amount equal to the
product of (a) a fraction represented by the number of days that the
Executive was employed during the year in which the Termination Date
occurs divided by 365 and (b) the bonus to which the Executive would
have been entitled under the Company’s Annual Corporate Performance
Incentive Plan for Officers (or any successor plan thereto) had he
remained employed through the end of the plan year in which the
Termination Date occurs, which payment shall be made based upon the
same performance measurement and made at the same time as the payments
are determined and made to the Company’s other executives under the
Company’s Annual Corporate Performance Incentive Plan for Officers (or
any successor plan thereto), if any, for incentive plan year during
which the Termination Date occurs.
	 
	 	(iii)  	An amount equal to the sum of two (2) times
the Executive’s annual Base Salary in effect on the Termination Date
plus two (2) times the Executive’s target bonus under the Company’s
Annual Corporate Performance Incentive Plan for Officers (or any
successor plan thereto) in effect on the Termination Date, said amount
to be divided into equal installments and payable over a term of two
years pursuant to the Company’s normal payroll policies and schedule.
	 
	 	(iv)  	At the exact same cost to the Executive, and at the same coverage
level as in effect as of the Termination Date (subject to changes in
coverage levels applicable to all employees generally), a continuation
of the Executive’s (and the Executive’s eligible dependents’) health
and dental plan coverage for twenty-four (24) months from the
Termination Date. The applicable COBRA health benefit continuation
period shall begin coincident with the beginning of the twenty-four
(24) month benefit continuation period.
	 
	 	   	Provided, however, the provision of these benefits shall be
discontinued prior to the end of the twenty-four (24) month
continuation period to the extent that the Executive becomes covered
under the health and dental plan of a subsequent employer which does
not contain any exclusion or limitation with respect to any
preexisting condition of the Executive or the Executive’s

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	 	   	eligible dependents and provides substantially the same coverage as
the plan sponsored by the Company. For purposes of enforcing this
offset provision, the Executive shall have a duty to inform the
Company if the Executive becomes covered under any such health plan
of a subsequent employer. The Executive shall provide, or cause to
provide, to the Company in writing correct, complete, and timely
information concerning the same.
	 
	 	(v)  	With respect to each outstanding performance
cycle under the Long Term Incentive Plan for Officers as of the
Termination Date, a pro-rata payout based on (i) the actual results for
the performance cycle as determined by the Company for other executives
and (ii) the number of days in the performance cycle preceding the
Termination Date, to be paid at the same time as the payments
are determined and made to the Company’s other executives under such
plan.
	 
	 	(vi)  	All unvested stock options shall become
immediately vested and exercisable. Notwithstanding the
provisions of any stock plan or award agreement to the contrary, as to
any vested stock options held by the Executive as of the Termination
Date (including such options as become vested pursuant to the
provisions hereof), the Executive shall have an exercise period of one
year following the Termination Date, or such greater period as provided
by the applicable stock option plan or award agreement, but in no event
exceeding the original expiration date of the stock options.
	 
	 	(vii)  	To the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive any
other amounts, benefits or perquisites required to be paid or provided
or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company or its
Affiliates through the Termination Date.

          (c) Termination as a result of Death or Disability. If the Executive’s employment is
terminated as a result of death or Disability, the Company agrees to pay to or provide the
Executive and/or his estate with the benefits provided in Sub-Paragraphs 7(b)(i), (ii), (v), (vi)
and (vii) above.

          (d) Termination for Cause. If the Executive’s employment is terminated by the Company
as a result of Cause, the Company agrees to pay to or provide the Executive with the benefits
provided in Sub-Paragraphs 7(b)(i) and (vii) above. As of the Termination Date, all unvested
equity or cash-based long-term incentive awards shall be forfeited, and any vested stock options
shall cease to be exercisable.

          (e) Termination due to resignation. If the Executive’s employment is terminated as a result
of the Executive’s voluntary resignation (including a termination by the Executive as a result
of a notice by the Executive of his decision not to extend this Agreement),

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the Company agrees to pay to and provide the Executive with the benefits provided in Sub-Paragraphs
7(b)(i) and (vii) above. As of the Termination Date, all unvested equity or cash-based long-term
incentive awards shall be forfeited, and any vested stock options shall remain exercisable for such
period as specified in the applicable stock plan or award agreement.

     8. Representations, Warranties and Agreements of the Executive.

          (a) Authority. The Executive represents and warrants to the Company that the Executive is not
obligated or restricted under any agreement (including any non-competition or confidentiality
agreement), judgment, decree, order or other restraint of any kind that could materially impair the
Executive’s ability to perform the duties and obligations required of the Executive hereunder.

          (b) Conduct. The Executive agrees to abide by the Company’s generally applicable rules of
conduct for its executives and to refrain from intentionally or willfully taking any action or
making any statements with the purpose of disparaging the goodwill or reputation of the Company or
its Affiliates.

          (c) Confidential Information.

               (i) The Executive acknowledges that as a result of his employment with the Company the
Executive will receive access to confidential information of the Company and its Affiliates,
including information relating to customers, clients, suppliers, distributors, investors, lenders,
consultants, independent contractors and executives of the Company and its Affiliates; price lists
and pricing policies; financial statements and information; budgets and projections; business
plans; production costs; market research; marketing, sales and distribution strategies;
manufacturing techniques; processes and business methods; technical information; pending projects
and proposals; new business plans and initiatives; research and development projects; inventions,
discoveries, ideas, technologies, trade secrets, know-how, formulae, designs, patterns, marks,
names, improvements, industrial designs, mask works, works of authorship and other intellectual
property; devices; samples; plans, drawings and specifications; photographs and digital images;
computer software and programming; all other confidential information and materials relating to the
businesses of the Company and its Affiliates; and all notes, analyses, compilations, studies,
summaries, reports, manuals, documents and other materials prepared by or for the Company or its
Affiliates containing or based in whole or in part on any of the foregoing (all of the foregoing,
whether communicated in verbal, written, graphic, electronic or any other form, whether or not
conceived, developed or prepared in whole or in part by the Executive and whether received by the
Executive before or after the date hereof, collectively, “Confidential Information”).

               (ii) The Executive acknowledges that the Confidential Information is owned or licensed by the
Company or its Affiliates; is unique, valuable, proprietary and confidential; and derives
independent actual or potential commercial value from not being generally known or available to the
public. The Executive hereby relinquishes, and agrees that he will not at any time claim, any
right, title or interest of any kind in or to any Confidential Information.

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               (iii) The Executive agrees that the Executive will maintain the confidentiality of the
Confidential Information at all times during and after the Executive’s employment with the Company
and will not, at any time, directly or indirectly, use any Confidential Information for his own
benefit or for the benefit of any other Person, reveal or disclose any Confidential Information to
any Person other than authorized representatives of the Company, or remove or aid in the removal
from the Company’s or its Affiliates’ premises of any Confidential Information, except (A) in the
performance of the Executive’s duties in the furtherance of the business of the Company or (B) with
the prior written consent of an authorized officer of the Company. The covenants in this Paragraph
8(c)(iii) will not apply to information that (x) is or becomes available to the general public
through no breach of this Agreement by the Executive or breach by any other Person of a duty of
confidentiality to the Company or its Affiliates or (y) the Executive is required to disclose by
applicable law or court order; provided, however, that the Executive will notify the Company in
writing of such required disclosure as much in advance as practicable in the circumstances and
cooperate with the Company to limit the scope of such disclosure.

               (iv) At the Termination Date, the Executive will turn over and return to the Company all
Confidential Information in any form (including all copies and reproductions thereof) and all other
property whatsoever of the Company or its Affiliates in or under his possession or control.

          (d) Ownership of Intellectual Property.

               (i) The Executive will immediately and fully disclose in writing to the Company all
inventions, discoveries, ideas, technologies, trade secrets, know-how, formulae, designs, patterns,
marks, names, improvements, industrial designs, mask works, works of authorship and other
intellectual property conceived or developed in whole or in part by the Executive, or in which the
Executive may have aided in its conception or development, while employed by the Company
(collectively, “Intellectual Property”).

               (ii) The Executive does hereby, and will from time to time immediately upon the conception or
development of any Intellectual Property, assign to the Company all of the Executive’s right, title
and interest in and to all such Intellectual Property (whether or not patentable, registrable,
recordable or protectable by copyright and regardless of whether the Company pursues any of the
foregoing). If any Intellectual Property falls within the definition of “work made for hire,” as
such term is defined in 17 U.S.C. § 101, such Intellectual Property will be considered “work made
for hire” and the copyright of such Intellectual Property will be owned solely and exclusively by
the Company. If any Intellectual Property does not fall within such definition of “work made for
hire,” then the Executive’s right, title and interest in and to such Intellectual Property will be
assigned to the Company pursuant to the first sentence of this Paragraph 8(d)(ii). The Executive
will execute and deliver any assignment instruments and do all other things reasonably requested by
the Company (both during and after the Executive’s employment with the Company) in order to more
fully vest in the Company sole and exclusive right, title and interest in and to all Intellectual
Property.

               (iii) The obligations of the Executive under Paragraph 8(d)(ii) shall not apply to a
particular circumstance to the extent such obligations are unenforceable in such circumstance
pursuant to the provisions of Section 66-57.1 of the North Carolina General

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Statutes (as amended from time to time), provided that the obligations of the Executive under
Paragraph 8(d)(ii) shall continue to be binding upon the Executive in all other circumstances. The
Executive will bear the burden of proof in establishing the applicability of such statute to a
particular circumstance.

          (e) Non-Competition and Non-Solicitation.

          (i) As used in this Agreement, the following terms have the meanings given to such terms
below:

               (A) “Affiliate” of a Person means any Person that, directly or indirectly, through one or more
intermediaries or otherwise, controls, is controlled by, or is under common control with such
Person, where “control” means the ability to direct management or policies through the ownership of
voting securities, by contract or otherwise.

               (B) “Business” means (i) the manufacture, distribution and/or sale of snack food products and
(ii) the business(es) in which the Company or its Affiliates are or were actively engaged at the
time of, or during the 12-month period prior to, the Termination Date and which business(es), at
the request of the Executive within a reasonable period following the Termination Date, are
identified by the Company in writing to the Executive.

               (C) “Customer” means any Person who is or was a customer or client of the Company or its
Affiliates (i) at the time of, or during the 12-month period prior to, the Termination Date (ii) at
the time of, or during the 12-month period prior to, the Termination Date and with whom the
Executive had dealings in the course of his employment with the Company.

               (D) “Company Executive” means any Person who is or was an executive of the Company or its
Affiliates at the time of, or during the 12-month period prior to, the Termination Date.

               (E) “Person” means any individual, corporation, limited liability company, partnership,
company, sole proprietorship, joint venture, trust, estate, association, organization, labor union,
governmental body or other entity.

               (F) “Products and Services” means (i) snack food products; and (ii) the products and/or
services actively marketed by the Company or its Affiliates at the time of, or during the 12-month
period prior to, the Termination Date, and which products and/or services, at the request of the
Executive within a reasonable period following the Termination Date, are identified by the Company
in writing to the Executive.

               (G) “Representative” of a Person means (i) a shareholder, director, officer, member, manager,
partner, joint venturer, owner, executive, agent, representative, employee, independent contractor,
consultant, advisor, licensor or licensee of, for, to or with such Person, (ii) an investor in such
Person or a lender (irrespective of whether interest is charged) to such Person or (iii) any Person
acting for, on behalf of or together with such Person.

               (H) “Restricted Period” means the period commencing on the Termination Date and ending on the
second anniversary of such date.

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               (I) “Territory” means: (i) all states in the United States east of the Rocky Mountains, (ii)
any state in the United States in which the Company or its Affiliates does or did business at the
time of, or during the 12-month period prior to, the Termination Date, (iii) the United States of
America, (iv) any province in Canada in which the Company or its Affiliates does or did business at
the time of, or during the 12-month period prior to, the Termination Date, (v) the United Kingdom,
(vi) Ireland, and (vii) any other country in which the Company or its Affiliates does or did
business at the time of, or during the 12-month period prior to, the Termination Date.

          (ii) The Executive agrees not to engage in any activities competitive with the Company or its
Affiliates at any time during the Executive’s employment with the Company, including any activities
similar to those described in Subparagraphs (A) through (F) below, except in furtherance of the
Company’s business. Furthermore, the Executive agrees that, except as otherwise approved in
writing by the Company, during the Restricted Period, the Executive will not, directly or
indirectly:

               (A) engage in the Business in the Territory or market, sell or provide Products and Services
in the Territory;

               (B) solicit any Customer for purposes of marketing, selling or providing Products and Services
to such Customer;

               (C) accept as a customer any Customer for purposes of marketing, selling or providing Products
and Services to such Customer;

               (D) induce or attempt to induce any Company Executive to terminate his or her employment with
the Company or its Affiliates;

               (E) interfere with the business relationship between a Customer, Company Executive or supplier
and the Company or its Affiliates; or

               (F) be or become a Representative of any Person who engages in any of the foregoing activities
(provided, however, that with respect to this Subparagraph (F), the Executive may become employed
by or associated with a Person who sells competitive Products and Services if and only if the
Executive’s job duties and responsibilities involve product and service lines which are not
competitive with the Products and Services of the Company);

provided, however, that the foregoing will not restrict the ability of the Executive to purchase or
otherwise acquire up to one percent of any class of securities of any Person (but without otherwise
participating in the activities of such Person) if such securities have been registered under
Sections 12(b) or 12(g) of the Securities Exchange Act of 1934.

               (f) Reasonableness of Restrictions. The Executive agrees that the covenants in this Paragraph
8 are reasonable given the real and potential competition encountered (and reasonably expected to
be encountered) by the Company and its Affiliates and the substantial knowledge and goodwill the
Executive will acquire with respect to the business of the Company and its Affiliates as a result
of his employment with the Company. Notwithstanding the

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foregoing, in the event that any provision of this Paragraph 8 is determined by a court to be
invalid or unenforceable, such court may, and is hereby authorized to, reduce or limit the terms of
such provision to allow it to be enforced. Without limiting the foregoing, in the event that the
absence of a time limitation in Paragraph 8(c) is determined by a court to be unreasonable, such
court may, and is hereby authorized to, impose the maximum limitation as it deems reasonable.

          (g) Injunctive Relief; Expenses. The Executive acknowledges that the Company and its
Affiliates may suffer irreparable harm in the event that the Executive breaches any of the
Executive’s obligations under this Paragraph 8 and that monetary damages may be inadequate to
compensate the Company and its Affiliates for such breach. Accordingly, the Executive agrees that,
in the event of a breach by the Executive of any of the Executive’s obligations under this
Paragraph 8, the Company will be entitled to obtain from any court of competent jurisdiction
preliminary and permanent injunctive relief in order to prevent or to restrain any such breach.

          9. Miscellaneous.

          (a) Further Assurances. The Executive agrees to furnish upon request to the Company such
further information, to execute and deliver to the Company such other documents, and to do such
other acts and things, all as the Company may reasonably request at any time for the purpose of
carrying out the intent of this Agreement.

          (b) Litigation Support. During the Employment Term and for a period of twenty-four months
following the Termination Date, if the Company is evaluating, pursuing, contesting or defending any
proceeding, charge, complaint, claim, demand, notice, action, suit, litigation, hearing, audit,
investigation, arbitration or mediation, in each case whether initiated by or against the Company
(collectively, “Proceeding”), the Executive will reasonably cooperate with the Company and its
counsel in the evaluation, pursuit, contest or defense of the Proceeding and provide such testimony
and access to books and records as may be reasonably necessary in connection therewith. The Company
agrees reasonably to accommodate the Executive’s schedule and to reimburse the Executive for the
Executive’s out-of-pocket expenses or actual lost wages or compensation related to such
cooperation. These provisions will not apply if the Proceeding arises out of circumstances that
would or are alleged to give rise to Cause.

          (c) Entire Agreement. This Agreement and the Compensation and Benefits Assurance Agreement
and RSU Agreement together constitute the entire agreement between the parties with respect to the
subject matter hereof and thereof and supersede all prior agreements (whether written or oral and
whether express or implied) between the parties to the extent related to such subject matter.

          (d) Successors and Assigns. This Agreement will be binding upon and inure to the benefit of
the parties and their respective successors, permitted assigns and, in the case of the Executive,
personal representatives. The Executive may not assign, delegate or otherwise transfer any of the
Executive’s rights, interests or obligations in this Agreement without the prior written approval
of the Company.

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          (e) Counterparts. This Agreement may be executed in one or more counterparts, each of which
will be deemed an original but all of which together will constitute one and the same agreement.

          (f) Notices. Any notice pursuant to this Agreement must be in writing and will be deemed
effectively given to the other party on the earliest of the date (i) three business days after such
notice is sent by registered U.S. mail, return receipt requested, (ii) one business day after
receipt of confirmation if such notice is sent by facsimile, (iii) one business day after delivery
of such notice into the custody and control of an overnight courier service for next day delivery,
(iv) one business day after delivery of such notice in person and (v) such notice is received by
that party; in each case to the appropriate address below (or to such other address as a party may
designate by notice to the other party):

	 	 	 	 	 
	

	 	If to the Executive:
	 	If to the Company:
	 
	 	 	 	 
	

	 	David V. Singer
	 	Lance, Inc.
	

	 	3401 Royden Pl.
	 	P.O. Box 32368
	

	 	Charlotte, NC 28226
	 	8600 South Boulevard
	

	 	 	 	Charlotte, NC 28232
	

	 	 	 	Fax: (704) 554-5562
	

	 	Phone: (704) 542-8989
	 	Phone:(704) 554-1421
	

	 	 	 	Attn: Vice President—Finance

A “business day” for purposes of this Paragraph means any day that is not a Saturday, Sunday or any
other day on which banks are required or authorized by law to be closed in Charlotte, North
Carolina.

          (g) Amendments and Waivers. No amendment of any provision of this Agreement will be valid
unless the amendment is in writing and signed by the Company and the Executive. No waiver of any
provision of this Agreement will be valid unless the waiver is in writing and signed by the waiving
party. The failure of a party at any time to require performance of any provision of this
Agreement will not affect such party’s rights at a later time to enforce such provision. No waiver
by a party of any breach of this Agreement will be deemed to extend to any other breach hereunder
or affect in any way any rights arising by virtue of any other breach.

          (h) Severability. Each provision of this Agreement is severable from every other provision of
this Agreement. Any provision of this Agreement that is determined by any court of competent
jurisdiction to be invalid or unenforceable will not affect the validity or enforceability of any
other provision hereof or the invalid or unenforceable provision in any other situation or in any
other jurisdiction. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.

          (i) Construction. The Paragraph headings in this Agreement are inserted for convenience only
and are not intended to affect the interpretation of this Agreement. Any reference in this
Agreement to any Paragraph refers to the corresponding Paragraph of this Agreement. Any reference
in this Agreement to any Schedule refers to the corresponding

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Schedule attached to this Agreement and all such Schedules are incorporated herein by reference.
The word “including” in this Agreement means “including without limitation.” This Agreement will
be construed as if drafted jointly by the Company and the Executive and no presumption or burden of
proof will arise favoring or disfavoring the Company or the Executive by virtue of the authorship
of any provision in this Agreement. All words in this Agreement will be construed to be of such
gender or number as the circumstances require.

          (j) Survival. The terms of Paragraphs 5, 6, 7, 8 and 9 will survive the expiration or
termination of this Agreement for any reason.

          (k) Remedies Cumulative. The rights and remedies of the parties under this Agreement are
cumulative (not alternative) and in addition to all other rights and remedies available to such
parties at law, in equity, by contract or otherwise.

          (l) Governing Law. This Agreement will be governed by the laws of the State of North Carolina
without giving effect to any choice or conflict of law principles of any jurisdiction.

          (m) Jurisdiction; Venue. Each party (i) consents to the personal jurisdiction of any state or
federal court located in Charlotte, North Carolina (and any corresponding appellate court) in any
proceeding arising out of or relating to this Agreement or the Executive’s employment by the
Company, (ii) waives any venue or inconvenient forum defense to any proceeding maintained in such
courts and (iii) except as otherwise provided in this Agreement, agrees not to bring any proceeding
arising out of or relating to this Agreement or the Executive’s employment by the Company in any
other court.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first written above.

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	/s/ David V. Singer
 	 
	 	David V. Singer 	 
	 	 	 
	 
	 	COMPANY:

Lance, Inc

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

12

 

	 	 	 	 	 

Exhibit 10.1

Schedule 1

Compensation and Benefits Summary

	 	 	 
	Name of Executive:

	 	David V. Singer
	 
	 	 
	Social Security No.:

	 	[Social security number not required to be disclosed]
	 
	 	 
	Address:

	 	3401 Royden Pl.

Charlotte, NC 28226
	 
	 	 
	Telephone Number:

	 	(704) 542-8989
	 
	 	 
	Position:

	 	President and Chief Executive Officer

     The compensation and benefits to be provided by the Company to the Executive pursuant to the
foregoing Employment Agreement are as follows:

     1. Base Salary. During the Employment Term, the Company will pay to the Executive a base
salary at an annual rate of Five Hundred Thousand Dollars ($500,000) payable in equal installments
in accordance with the Company’s customary payroll practices as in effect from time to time. Such
Base Salary will be reviewed at least annually by the Board and may be increased in the sole
discretion of the Board. Such Base Salary (including any increased salary authorized by the
Board) may not be decreased during the Employment Term.

     2. Other Compensation and Benefits. During the Employment Term, the Executive will be
entitled to the following additional compensation and benefits:

	 	(A)  	Annual bonus compensation
	 
	 	•  	2005 annual bonus award. The bonus amount shall be determined by the
Compensation Committee of the Board based on a review of the Executive’s performance
during 2005; provided, however, that the bonus amount awarded for 2005 shall not be
less than 100% of the Executive’s actual Base Salary paid during 2005. This amount
will be paid no later than the date such amounts are paid to other executives who
participate in such bonus plan.
	 
	 	•  	Annual bonus opportunity following 2005. The Executive shall participate in
the Company’s Annual Corporate Performance Incentive Plan for each year during the
Employment Term beginning after December 31, 2005. The Executive’s target annual bonus
opportunity under such plan shall equal 100% of the Executive’s annual Base Salary.

 

 

	 	(B)  	Annual long-term incentive compensation
	 
	 	•  	New Hire RSU Award. The Executive is being granted an award of 300,000
Restricted Stock Units effective as of the Effective Date pursuant to the RSU Agreement
between the Company and the Executive.
	 
	 	•  	2005 long-term incentive award. In addition to amounts that may become
payable under Paragraph 2(A) above, the Executive shall be awarded a target incentive
under the Company’s 2005 Long-Term Incentive Plan for Officers (for the performance
cycle covering the three fiscal years 2005 through 2007) in the amount of $150,000
times a fraction, the numerator of which is the number of days in the 2005-2007
performance cycle from and after the Effective Date and the denominator of which is the
total number of days in the 2005-2007 performance cycle. The actual award shall be
determined under the provisions of the plan and, notwithstanding any provision of the
plan to the contrary, shall be payable in cash at the time such payments are made to
other executives who participate in such plan.
	 
	 	•  	Annual long-term incentive opportunity following 2005. The Executive shall
have a total annual long-term incentive opportunity for each year during the Employment
Term beginning after 2005 equal to 120% of the Executive’s Base Salary for the year
(“the Guaranteed LTIP Amount”) , provided as follows:

	 	—  	75% of the Guaranteed LTIP Amount shall be delivered through a grant of
stock options under the Company’s 2003 Key Employee Stock Plan (or any successor
plan). The number of stock options shall equal (a) 75% of the Guaranteed LTIP
Amount divided by (b) the per share Black-Scholes value of the stock options
determined by the Company as of a date within a reasonable period of time prior to
the grant date. The stock options shall be granted with an exercise price equal to
the fair market value of the Company’s common stock on the grant date and shall
vest in three equal annual installments beginning on the first anniversary of the
grant date. All other terms and provisions of the stock options shall be
consistent with the terms and provisions of the applicable stock option plan,
except to the extent otherwise provided in this Agreement or the Compensation and
Benefits Assurance Agreement.
	 
	 	—  	The remaining 25% of the Guaranteed LTIP Amount shall be a target award
for the performance cycle under the Company’s Long-Term Incentive Plan for Officers
beginning in the applicable year. The actual award shall be determined under the
provisions of the plan based on performance during the applicable performance cycle
(and resulting in an actual award ranging from 0% to 400% of the target award) and,
notwithstanding any provision of the plan to the contrary, shall be payable in cash
at the time such payments are made to other executives who participate in such
plan.

	 	(C)  	Other Benefits
	 
	 	•  	Automobile. The Company will furnish the Executive the use of an automobile
subject to applicable Company policies and practice and will reimburse the Executive
for normal gasoline and maintenance charges, subject to proper allocation of personal
use for income tax purposes.
	 
	 	•  	Club Dues. The Company will pay to the Executive an amount equal to the
cost of the Executive’s membership in a country club that is located in the Charlotte,
North Carolina area (exclusive of charges for personal items) and to be designated

14

 

	 	   	by the Executive on the Effective Date. Periodically but no less frequently than
annually, the Company shall also pay to the Executive an additional payment (a
“Gross-up Payment”) in an amount such that after payment by the Executive of all
federal and state income and payroll taxes on the Gross-up Payment, the Executive
retains an after-tax amount of the Gross-up Payment sufficient to meet the federal
and state income and payroll tax liabilities imposed upon any payments for club
membership made hereunder.
	 
	 	•  	General Benefits. The Executive will be entitled to such other health and
welfare benefits (including vacation benefits), and to participate in such pension,
profit- sharing and other qualified and non-qualified retirement plans, and any other
perquisites or benefits that are and have been generally made available to similarly
situated executives of the Company from time to time. Except as specifically provided
herein, the Executive shall not be entitled to any other fringe benefits or
perquisites.

(D) Modification of Plans

The Company shall be fully entitled to make changes to its incentive, compensation and
benefit plans, but such changes and amendments will not materially impair the economic value
to the compensation and benefits provided to the Executive under this Agreement, including
the schedule attached thereto.

15Ex-10.2

 

Exhibit 10.2

STATE OF NORTH CAROLINA

	 	 	 
	

	 	COMPENSATION AND BENEFITS
	COUNTY OF MECKLENBURG

	 	ASSURANCE AGREEMENT

     THIS COMPENSATION AND BENEFITS ASSURANCE AGREEMENT, entered into this 11th day of May 2005, by
and between Lance, Inc., a North Carolina corporation (the “Company”) and David V. Singer (the
“Executive”);

STATEMENT OF PURPOSE

     Contemporaneously with the execution of this Agreement, Executive is being employed pursuant
to an Executive Employment Agreement (the “Executive Employment Agreement”) as a key employee of
the Company. Executive is expected to contribute materially to the successful operation of the
Company’s business and will render valuable services to the Company. Moreover, as a result of his
former service on the Board of Directors of the Company and of his new employment with the Company,
Executive possesses or will possess intimate knowledge of the Company, its history, operating
methods, manufacturing and distribution systems, personnel and products. Therefore, it is
important to the continued success of the Company that the Company continue to have the benefit of
Executive’s advice, counsel and services, and for such reasons the Company desires to provide
Executive with the benefits set forth in this Compensation and Benefits Assurance Agreement.

     NOW, THEREFORE, in consideration of the Statement of Purpose and of the mutual covenants and
agreements herein set forth and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive do hereby agree as follows:

     1. Definitions. As used in this Compensation and Benefits Assurance Agreement, unless
the context expressly indicates otherwise, the following terms have the following meanings:

     (a) “Affiliates” of an entity means any and all corporations and other business
entities which, directly or indirectly, control, are controlled by, or are under common control
with such entity.

     (b) “Base Salary” means, at any time, the then regular annual rate of pay which
Executive is receiving as annual salary, excluding amounts (i) designated by the Company as payment
toward reimbursement of expenses or (ii) received under incentive or other bonus plans, regardless
of whether or not the amounts are deferred.

     (c) “Beneficial Owner” has the meaning ascribed to such term in Section 13(d) of the
Exchange Act and Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

 

     (d) “Board” means the Board of Directors of the Company or any committee of the Board
to which the Board has delegated, either specifically or generally, the duties and authority of the
Board for the particular action or determination required or permitted to be made by the Board.

     (e) “Cause” means the occurrence of any one or more of the following:

	 	(i)  	A demonstrably willful and deliberate act or failure
to act by Executive (other than as a result of incapacity due to
physical or mental illness) which is committed in bad faith, without
reasonable belief that such action or inaction is in the best
interests of the Company, which causes actual material financial
injury to the Company and which act or inaction is not remedied
within fifteen (15) business days of written notice from the Company;
or
	 
	 	(ii)  	Executive’s conviction for committing an act of
fraud, embezzlement, theft, or any other act constituting a felony or
involving moral turpitude or causing material harm, financial or
otherwise, to the Company.

“Cause” must be determined by the Board in the exercise of good faith and reasonable judgment and
be evidenced by a written resolution adopted prior to any termination of Executive specifying the
conduct of Executive giving rise to a determination of Cause.

     (f) “Change in Control” means, and shall be deemed to have occurred upon, the first to
occur of any of the following events:

	 	(i)  	Any Outside Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting power of the
Company’s then outstanding securities; or
	 
	 	(ii)  	During any period of two (2) consecutive years (not
including any period prior to the date hereof), individuals who at
the beginning of such period constitute the Board of Directors of the
Company (and any new Director, whose nomination for election by the
Company’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
the beginning of the period or whose nomination for election was so
approved) cease for any reason to constitute a majority of the
members of the Board of Directors of the Company; or

2

 

	 	(iii)  	The stockholders of the Company approve a plan of
complete liquidation of the Company; or
	 
	 	(iv)  	The consummation of the sale or disposition of all
or substantially all of the Company’s assets other than a sale or
disposition of all or substantially all of the Company’s assets to an
entity at least sixty percent (60%) of the combined voting power of
the voting securities of which are owned by the stockholders of the
Company in substantially the same proportions as their ownership of
the Company immediately prior to such sale or disposition; or
	 
	 	(v)  	The consummation of a merger, consolidation, or
reorganization of the Company with or involving any other
corporation, other than a merger, consolidation, or reorganization
that would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity) or any parent thereof at least sixty percent
(60%) of the combined voting power of the voting securities of the
Company (or such surviving entity) outstanding immediately after such
merger, consolidation, or reorganization.

However, in no event shall a “Change in Control” be deemed to have occurred if Executive is part of
a 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 equity
participant in the acquiring company or group or surviving entity (the “Purchaser”) except for
ownership 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 includes
any or all of its Affiliates.

     (i) “Effective Date” means the date of this Compensation and Benefits Assurance
Agreement.

     (j) “Excess Parachute Payment” means “excess parachute payment” within the meaning of
Section 280G of the Code.

     (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any successor act thereto.

3

 

     (l) “Excise Tax” means the tax imposed on Excess Parachute Payments pursuant to
Section 280G and Section 4999 of the Code or any successor provision.

     (m) “Good Reason” means the occurrence of any one or more of the following, without
Executive’s prior express written consent, within the thirty-six (36) calendar months immediately
following a Change in Control:

	 	(i)  	As determined in the reasonable, good faith judgment
of Executive, the assignment to Executive of any duties inconsistent
with Executive’s authorities, duties, responsibilities, and status as
Chief Executive Officer of the Company, or a reduction or alteration
in the nature or status of any of Executive’s authorities, duties or
responsibilities (including those as a director of the Company) from
those in effect or practice as of one hundred eighty (180) calendar
days prior to the Change in Control, other than an insubstantial and
inadvertent act that is remedied by the Company promptly after
receipt of notice thereof given by Executive;
	 
	 	(ii)  	The Company’s requiring Executive to be based at a
location in excess of fifty (50) miles from the location of
Executive’s principal job location or office immediately prior to the
Change in Control, except for required travel on the Company’s
business to an extent consistent with Executive’s then present
business travel obligations;
	 
	 	(iii)  	A reduction by the Company of Executive’s Base
Salary in effect on the date hereof, or as the same shall be
increased from time to time;
	 
	 	(iv)  	The failure of the Company to keep in effect any of
the Company’s compensation, incentive, health and welfare benefits,
or perquisite programs under which Executive receives value, as such
programs exist immediately prior to the Change in Control; provided,
however, the replacement of an existing program with a new program
will be permissible (and not grounds for a Good Reason termination)
if done for all employees generally and the value to be delivered to
Executive under the new program is at least as great as the value
delivered to Executive under the existing program; or
	 
	 	(v)  	Any breach by the Company of its obligations under
Paragraph 6 herein or any failure of a successor company to assume
and agree to perform the Company’s entire obligations under this
Compensation and Benefits

4

 

	 	   	Assurance Agreement as required by Paragraph 6 herein, or under
the Executive Employment Agreement or the Restricted Stock Unit
Award Agreement.

“Good Reason” shall be determined by Executive in the exercise of good faith and
reasonable judgment. Executive’s continued employment shall not constitute consent to, or
a waiver of rights with respect to, any circumstance constituting Good Reason herein, and
any such consent or waiver must be in writing and signed by Executive.

     (n) “Member of the Van Every Family” means (i) a lineal descendant of Salem A. Van
Every, Sr., including adopted persons as well as persons related by blood, (ii) a spouse of an
individual described in clause (i) of this Paragraph 1(n) or (iii) a trust, estate, custodian and
other fiduciary or similar account for an individual described in clause (i) or (ii) of this
Paragraph 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 Company
or (iii) a corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

     (p) “Person” has the meaning ascribed to said term in Section 3(a)(9) of the Exchange
Act as modified and used in Sections 13(d) and 14(d) of the Exchange Act, including a “group” as
defined 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 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.

     2. Term of Agreement.

     (a) The term of this Compensation and Benefits Assurance Agreement will commence on the
Effective Date and shall continue for so long as Executive is employed with the Company under the
terms of the Executive Employment Agreement.

5

 

     (b) Notwithstanding the foregoing, in the event that a Change in Control occurs during the
Employment Term (as defined in the Executive Employment Agreement), upon the effective date of such
Change in Control the term of this Compensation and Benefits Assurance Agreement shall
automatically and irrevocably be renewed and extended for a period of thirty-six (36) full calendar
months from the closing date of the transaction giving rise to such Change in Control (the “Change
in Control Renewal Period”), and this Compensation and Benefits Assurance Agreement shall
automatically terminate upon the expiration of the Change in Control Renewal Period. Further, this
Compensation and Benefits Assurance Agreement shall be assigned to, and shall be assumed by, the
successor to the Company in such Change in Control as further provided in Paragraph 6 herein.

     3. Employment. The Company shall employ Executive under an Executive Employment
Agreement (which is to be executed contemporaneously with this Compensation and Benefits Assurance
Agreement) to perform such tasks as the Company shall specify from time to time. Nothing in this
Compensation and Benefits Assurance Agreement shall give Executive any right to be retained in the
employ of the Company or, upon dismissal, any rights except as expressly otherwise provided herein.

     4. Change in Control Severance Benefits.

     (a) The Company shall pay Executive the Severance Benefits described in Paragraph 4(c) herein
if during Executive’s employment a Change in Control occurs and if within the thirty-six (36)
calendar months immediately following such Change in Control, Executive experiences a Qualifying
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 following Executive’s
Qualifying Termination, but in no event later than thirty (30) calendar days after such date.
Notwithstanding the foregoing, however, Severance Benefits which become due pursuant to Paragraphs
4(b)(iii) 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 Company
that occurs during the term of this Agreement shall entitle Executive to receive the Severance
Benefits:

	 	(i)  	Executive’s involuntary Termination of Employment
without Cause;
	 
	 	(ii)  	Executive’s voluntary Termination of Employment for
Good Reason; or
	 
	 	(iii)  	The Company, or any successor company, commits a
material breach of any of the provisions of this Compensation and
Benefits Assurance Agreement.

6

 

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 is
defined under the Executive Employment Agreement (or any successor agreement thereto)], Executive’s
voluntary Termination of Employment without Good Reason except as otherwise expressly provided in
Paragraph 4(b)(iii) above, or Executive’s involuntary Termination of Employment for Cause. Except
as provided in the last sentence of this subparagraph (b), a Termination of Employment which occurs
before a Change in Control or later than thirty-six (36) months following a Change in Control shall
not constitute a Qualifying Termination. Notwithstanding anything herein to the contrary, a
Qualifying Termination shall be deemed to have occurred upon the occurrence of a Change in Control
if (x) Executive’s Termination of Employment occurs prior to the date of a Change in Control but
after the date an agreement is entered into by the Company, the consummation of which would result
in a Change in Control, (y) such Change in Control is in fact consummated within 12 months after
the date such agreement is entered into and (z) the Termination of Employment would otherwise be
under the circumstances described in clause (i), (ii) or (iii) above; provided, however, that in
the event Executive receives any severance or similar benefits pursuant to any other agreement or
arrangement between Executive and the Company prior to the consummation of the Change in Control,
such severance or similar benefits actually received by Executive shall be offset from any amount
otherwise payable to Executive hereunder following the Change in Control.

     (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
unpaid Base Salary, accrued vacation pay, unreimbursed business
expenses, and all other items earned by and owed to Executive through
and including the date of Executive’s Qualifying Termination. Such
payment shall 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 Executive’s Base Salary in effect upon the date of
the Qualifying Termination or, if greater, by Executive’s Base Salary
in effect immediately prior to the occurrence of the Change in
Control plus (B) three (3) multiplied by the greater of (I)
Executive’s annual bonus actually earned by Executive (whether or not
deferred) during the bonus plan year which ended immediately prior to
the Qualifying Termination or (II) 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 date of Executive’s
Qualifying Termination occurs.

7

 

	 	(iii)  	A lump-sum cash amount equal to the greater of (A)
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 date
of Executive’s Qualifying Termination occurs, adjusted on a pro rata
basis based on the number of days Executive was actually employed
during such incentive plan year (but in no event shall such target
bonus be less than that in effect for the period immediately prior to
the occurrence of the Change in Control); or (B) the actual bonus
earned through the date of the Qualifying Termination 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. Such payment shall constitute full
satisfaction for these amounts owed to Executive.
	 
	 	(iv)  	A lump-sum cash amount equal to the product
determined by multiplying (A) the sum of the amounts payable under
Subparagraphs 4(c) (i), (ii) and (iii) herein by (B) the highest
percentage of Executive’s compensation (eligible for such
contributions) contributed to Executive’s account under the Lance,
Inc. Profit-Sharing Retirement Plan and Trust (the “Retirement Plan”)
during the three (3) consecutive plan years ended immediately prior
to the Qualifying Termination. The source of payment of this sum
shall be the general assets of the Company unless the payment of such
amounts is otherwise permissible from the Retirement Plan without
violating any governmental regulations or statutes including, but not
limited to, ERISA discrimination testing requirements.
	 
	 	(v)  	At the exact same cost to Executive, and at the same
coverage level as in effect as of the date of Executive’s Qualifying
Termination (subject to changes in coverage levels applicable to all
employees generally), a continuation of Executive’s (and Executive’s
eligible dependents’) health and dental plan benefits for thirty-six
(36) months from the date of the Qualifying Termination. The
applicable COBRA health and dental benefit continuation period shall
begin coincident with the beginning of this thirty-six (36) month
benefit continuation period.

8

 

	 	   	Provided, however, the provision of these health and medical
benefits shall be discontinued prior to the end of the thirty-six
(36) month continuation period to the extent that Executive
becomes covered under the health insurance coverage of a
subsequent employer which does not contain any exclusion or
limitation with respect to any preexisting condition of Executive
or Executive’s eligible dependents and provides substantially the
same coverage as the plan sponsored by the Company. For purposes
of enforcing this offset provision, Executive shall have a duty
to inform the Company if Executive becomes covered under any such
health plan of a subsequent employer. Executive shall provide,
or cause to provide, to the Company in writing correct, complete,
and timely information concerning the same.
	 
	 	(vi)  	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 one (1) year from the
date of Executive’s Qualifying Termination. However, such services
shall be at the Company’s expense to a maximum amount not to exceed
ten percent (10%) of Executive’s Base Salary as of the date of
Executive’s Qualifying Termination.
	 
	 	(vii)  	Notwithstanding the provisions of any stock plan or
award agreement to the contrary, all stock options held by Executive
shall vest upon a Qualifying Termination and, with respect to all
such vested stock options then held by Executive, Executive shall
have a post-termination exercise period of one year following the
Qualifying Termination, or such greater period as provided by the
applicable stock plan or award agreement, but in no event exceeding
the original expiration date of the stock options.

     5. Excise Tax Payment 

     (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any payment or distribution by the Company to or for the
benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional payments required
under this Section 5) (a “Payment” or “Payments”) would be subject to the excise tax imposed by
Section 4999 of the Code (or any successor provision) or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that

9

 

after payment by Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 5(a), if it shall be determined that
Executive is entitled to a Gross-Up Payment, but that the Payments do not exceed by more than
$100,000 the greatest amount (the “Reduced Amount”) that could be paid to Executive such that the
receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made
to Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

     (b) Subject to the provisions of Section 5(c), all determinations required to be made under
this Section 5, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by KPMG, LLP or such other certified public accounting firm reasonably acceptable to the
Company as may be designated by Executive (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business days of the
receipt of notice from Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this Section 5, shall be paid by the
Company to Executive within five days of the later of (i) the due date for the payment of any
Excise Tax or (ii) the receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by
the Company should have been made (“Underpayment”), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant to Section 5(c) and
Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Executive.

     (c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten business days after
Executive receives written notification of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive shall:

          (i) give the Company any information reasonably requested by the Company relating to
such claim;

10

 

          (ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time; provided, however, that the Company’s
selection of one or more attorneys to provide legal representation with respect to such
claim shall be subject to Executive’s prior written approval;

          (iii) cooperate with the Company in good faith in order to contest such claim
effectively; and

          (iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this Section 5(c), the
Company shall control all proceedings taken in connection with such contest, and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option, either
pay the tax claimed to the appropriate taxing authority on behalf of Executive and direct Executive
to sue for a refund or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine; provided,
however, that, if the Company pays such claim and directs Executive to sue for a refund, the
Company shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with respect to such
payment or with respect to any imputed income in connection with such payment; and provided,
further, that any extension of the statute of limitations relating to payment of taxes for the
taxable year of Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of the contest shall
be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and
Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

     (d) If, after payment by the Company of an amount on Executive’s behalf pursuant to Section
5(c), Executive becomes entitled to receive any refund with respect to such claim, Executive shall
(subject to the Company’s complying with the requirements of Section 5(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after payment by the Company of an amount on Executive’s behalf pursuant
to Section 5(c), a determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such determination, then the

11

 

amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required
to be paid.

     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
expressly assume and agree to perform the obligations under this Compensation and Benefits
Assurance Agreement in the same manner and to the same extent 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 any such 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 hereunder as a Qualifying Termination.

     (b) Assignment by Executive. This Compensation and Benefits Assurance Agreement shall
inure to the benefit of and be enforceable by Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and legatees. If an
Executive should die while any amount is still payable to Executive hereunder had Executive
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Compensation and Assurance Benefits Agreement to Executive’s estate.
Executive’s rights hereunder shall not otherwise be assignable.

     7. Notices. Any notice required to be delivered to the Company by Executive hereunder
shall be properly delivered to the Company when personally delivered to (including by a reputable
overnight courier), or actually received through the U.S. mail, postage prepaid, by:

	 	 	 
	

	 	Lance, Inc.
	

	 	P. O. Box 32368
	

	 	8600 South Boulevard
	

	 	Charlotte, NC 28232
	 
	 	 
	

	 	Attn: Vice President—Finance

     Any notice required to be delivered to Executive by the Company hereunder shall be properly
delivered to Executive when personally delivered to (including by a reputable overnight courier),
or actually received through the U.S. mail, postage prepaid, by, Executive at his last known
address as reflected on the books and records of the Company.

     8. Contractual Rights to Benefits. This Compensation and Benefits Assurance Agreement
establishes in Executive a right to the benefits to which Executive is entitled hereunder.
However, except as expressly stated herein, nothing herein contained shall require or be deemed to
require, or prohibit or be deemed to prohibit, the

12

 

Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder. This Compensation and
Benefits Assurance Agreement is intended to be an unfunded general asset promise for a select,
highly compensated member of the Company’s management and, therefore, is intended to be exempt from
the substantive provisions of the Employee Retirement Income Security Act of 1974, as amended.

     9. Legal Fees and Expenses. The Company shall pay all legal fees, costs of
litigation, prejudgment interest, and other 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 Compensation and Assurance Benefits Agreement or under any other agreement with or plan
of the Company which would provide Executive with benefits or payments following a Qualifying
Termination (collectively “Termination Benefit Arrangements”), or as a result of the Company’s (or
any third party’s) contesting the validity, enforceability, or interpretation of this Compensation
and Benefits Assurance Agreement or any Termination Benefits Arrangement, or as a result of any
conflict between the parties pertaining to this Compensation and Benefits Assurance Agreement or
any Termination Benefits Arrangement.

     10. Exclusivity of Benefits. Unless specifically provided herein, neither the
provisions of this Compensation and Benefits Assurance Agreement nor the benefits provided
hereunder shall reduce any amounts otherwise payable, or in any way diminish Executive’s rights as
an employee of the Company, whether existing now or hereafter, under any compensation and/or
benefit plans, programs, policies, or practices provided by the Company, for which Executive may
qualify. Vested benefits or other amounts which Executive is otherwise entitled to receive under
any plan, policy, practice, or program of the Company (i.e., including, but not limited to, vested
benefits under the Company’s qualified employee benefit plans), at or subsequent to the date of
Executive’s Qualifying Termination shall be payable in accordance with such plan, policy, practice,
or program except as expressly modified by this Compensation and Benefits Assurance Agreement.

     11. Includable Compensation. Severance Benefits provided hereunder shall not be
considered “includable compensation” for purposes of determining Executive’s benefits under any
other plan or program of the Company unless otherwise provided by such other plan or program.

     12. 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 Compensation and Benefits Assurance 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, other than as provided in Subparagraph 4(c)(v) herein.

     13. Entire Agreement. This Compensation and Benefits Assurance Agreement represents
the entire agreement between the parties with respect to the subject matter hereof, and supersedes
all prior discussions, negotiations, and agreements

13

 

concerning the subject matter hereof, including, but not limited to, any prior severance agreement
made between Executive and the Company, other than (i) the Executive Employment Agreement and (ii)
the Executive Severance Agreement between Executive and the Company entered into on the date
hereof.

     14. Tax Withholding. The Company shall withhold from any amounts payable under this
Compensation and Benefits Assurance Agreement all federal, state, city, or other taxes as legally
required to be withheld.

     15. Waiver of Rights. Except as otherwise provided herein, Executive’s acceptance of
Severance Benefits, the Gross-Up Payment (if applicable) and any other payments required hereunder
shall be deemed to be a waiver of all rights and claims of Executive against the Company pertaining
to any matters arising under this Compensation and Benefits Assurance Agreement.

     16. Severability. In the event any provision of this Compensation and Benefits
Assurance Agreement shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of this Compensation and Benefits Assurance Agreement, and
this Compensation and Benefits Assurance Agreement shall be construed and enforced as if the
illegal or invalid provision had not been included.

     17. Applicable Law. To the extent not preempted by the laws of the United States, the
laws of the State of North Carolina shall be the controlling law in all matters relating to this
Compensation and Benefits Assurance Agreement.

     18. Execution. This Compensation and Benefits Assurance Agreement is hereby executed
in duplicate originals, one of which is being retained by each of the parties hereto.

     IN WITNESS WHEREOF, Lance, Inc. has caused this Compensation and Benefits Assurance Agreement
to be signed by its duly authorized officers, and Executive has hereunto set his hand, all as of
the day and year first above written.

	 	 	 	 	 	 	 
	 	 	“Company”	 	 
	 
	 	 	 	 	 	 
	 	 	Lance, Inc.	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Earl D. Leake	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Earl D. Leake	 	 
	

	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	“Executive”	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ David V. Singer	 	 
	 	 	 	 	 
	 	 	David V. Singer	 	 

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