Document:

Exhibit 10.6

 

Exhibit 10.6

	 	 	 
	STATE OF NORTH CAROLINA
	 	 
	 

	 	AGREEMENT
	COUNTY OF MECKLENBURG
	 	 

     THIS AGREEMENT (this “Agreement”) is entered into as of the Effective Date (defined below) by
and between LANCE, INC., a North Carolina corporation (the “Company”), and L. R. Gragnani, Jr.
(“Gragnani”).

STATEMENT OF PURPOSE

     Gragnani has been employed by the Company for a number of years and currently holds the
position of Vice President — Information Technology/CIO. On November 10, 1997, the Company and
Gragnani entered into an Executive Severance Agreement (the “Severance Agreement”) whereby the
Company agreed to provide Gragnani with certain benefits in the event of a termination of his
employment. In addition, also on November 10, 1997, the Company and Gragnani entered in to a
Compensation and Benefits Assurance Agreement whereby the Company agreed to provide Gragnani with
certain benefits in the event of the termination of his employment under certain specified
circumstances in connection with a Change in Control, as defined in the Compensation and Benefits
Assurance Agreement.

     The parties have agreed to terminate the employment relationship and to resolve all issues
relating to Gragnani’s employment with the Company and the termination of that employment
relationship on the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the Statement of Purpose and the terms and provisions of
this Agreement, the parties hereto mutually agree as follows:

     1. Definitions. As used herein, the following terms shall have the following meanings:

	 	(a)	 	“Affiliate” with reference to the Company means any Person that
directly or indirectly is controlled by, or is under common control with, the
Company, including each subsidiary of the Company. For purposes of this
definition the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
	 
	 	(b)	 	“Person” means any individual, corporation, association,
partnership, business trust, joint stock company, limited liability company,
foundation, trust, estate or other entity or organization of whatever nature.
	 
	 	(c)	 	“Effective Date” with reference to this Agreement means the
eighth (8th) day following the execution of this Agreement, if not a Saturday,
Sunday

 

 

	 	 	 	or legal holiday, and if such day is a Saturday, Sunday or legal holiday,
then the first business day following such eighth (8th) day.

     2. Termination of Employment; Resignation from Offices. The Company does hereby terminate
Gragnani’s employment without cause, with said termination to be effective as of February 14, 2007
(the “Termination Date”); however, beginning on January 24, 2007, Gragnani will be relieved from
the performance of his regular duties and shall only be required to make himself available from
time to time, during normal business hours, as requested by the Company’s Chief Financial Officer
or his designee, to consult with Company officials on matters related to the business of the
Company. As requested by the Company, Gragnani hereby resigns from all offices, committees and
positions he holds with the Company and its Affiliates, including but not limited to the position
of Vice President — Information Technology/CIO, with said resignation to be effective as of the
Termination Date. If requested by the Company, Gragnani will execute any additional resignation
letters, forms or other documents that acknowledge his resignation from such employment, positions,
committees and offices.

     3. Payments by the Company. The Company agrees to pay or provide Gragnani with the following:

	 	(a)	 	Compensation and benefits to which Gragnani is otherwise
entitled as an employee of the Company at Gragnani’s current rate and status
until the Termination Date in accordance with the Company’s generally
applicable policies and procedures (because he will not be required to work
normal business hours during the period from January 24, 2007 through the
Termination Date, Gragnani agrees that salary continuation during that period
shall exhaust Gragnani’s accrued vacation entitlement);
	 
	 	(b)	 	Compensation and benefits to which Gragnani is entitled under
the Severance Agreement in accordance with the terms of the Severance
Agreement. For purposes hereof, the Company acknowledges and agrees that the
termination of Gragnani’s employment shall be considered to have been an
“involuntary Termination of Employment without Cause,” and Gragnani is
entitled to receive all payments and benefits set forth in Paragraph 4 of the
Severance Agreement. The parties agree that Gragnani is entitled to be paid
$264,600 under Paragraph 4(a) of the Severance Agreement and that Gragnani is
entitled to receive under Paragraph 4(c) of the Severance Agreement the greater
of (i) $9,299 or (ii) the actual bonus earned through the Termination Date;
	 
	 	(c)	 	Gragnani has participated in various Company sponsored
incentive plans. As the result of the termination of his employment, he will
forfeit certain unvested benefits under the 2003 Long—Term Incentive Plan for
Officers and the 2004 Long-Term Incentive Plan for Officers and will forfeit
all benefits (because none are vested) under the 2005 Long-Term Incentive Plan
for Officers, the 2006 Five-Year Performance Equity Plan for Officers and
Senior Managers and the 2006 Three-Year Incentive Plan for Officers. As
additional consideration for the execution of this Agreement and in
satisfaction of any claim to the unvested benefits under the 2003

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	 	 	 	Long-Term Incentive Plan for Officers (the stock options and restricted
stock which would have become vested in April of 2007) and in satisfaction
of all of his rights (whether vested or unvested) under all of the
2004, 2005 and 2006 incentive plans referenced above, the Company agrees to
pay Gragnani the sum of $128,500;
	 
	 	(d)	 	Gragnani has participated in various other Company sponsored
benefit plans including the Compensation Deferral and Benefit Restoration Plan,
Profit-Sharing and 401(k) Retirement Savings Plan, the Employee Stock Purchase
Plan and other Long-Term Incentive Plans. All of Gragnani’s vested interests
in any benefit plan in which he had vested interests as of the Termination Date
(except the 2004 Long-Term Incentive Plan for Officers referenced in Paragraph
3(c) above) shall be paid when and as provided in, and otherwise subject to,
the terms, provisions and conditions of the applicable plans, and nothing in
this Agreement shall modify or override the terms, provisions or conditions of
those plans;
	 
	 	(e)	 	In the event that Gragnani elects to continue his medical
insurance coverage under COBRA, the Company will pay the COBRA premium (except
for the amount of the group insurance premium that the Company’s employees must
customarily contribute from time to time for similar coverage, until the
earlier of (i) February 13, 2008 or (ii) the date Gragnani becomes eligible for
medical insurance coverage under a successor employer’s plan;
	 
	 	(f)	 	The Company will provide Gragnani with 90 days of outplacement
services through a vendor to be identified and paid by the Company. The
outplacement will begin on a date chosen by Gragnani no later than ninety (90)
days from the Effective Date;
	 
	 	(g)	 	The Company will sell Gragnani the automobile used by him in
connection with his employment for $20,000 which represents a discount off the
retail value of such vehicle.

     4. Termination of Compensation and Benefits Assurance Agreement and all Other Benefits Not
Specified in this Agreement. It is agreed that this Agreement is not being entered into in
connection with a Change in Control, that Gragnani is not entitled to receive any compensation or
benefits under the Compensation and Benefits Assurance Agreement, that the Compensation and
Benefits Assurance Agreement is hereby terminated and that neither party has any further rights and
obligations thereunder. The Company and Gragnani acknowledge and agree that all other benefits and
perquisites related to or resulting from Gragnani’s employment and positions with the Company and
its Affiliates, which are not described and provided for in this Agreement, terminate on the
Termination Date, and that the Company has no further obligations with respect thereto.

     5. Confidential Information and Company Property. Gragnani acknowledges that by reason of
Gragnani’s employment by the Company, Gragnani has had access to certain Company “Trade Secrets”
(as defined in the North Carolina Trade Secrets Protection Act,

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N.C.G.S. §66-152) and confidential Company information relating to the business of the Company
(collectively “Confidential Information”). Gragnani agrees that he shall not directly or
indirectly use, reveal, disclose or remove from the Company’s premises Confidential Information or
material containing Confidential Information, without the prior written consent of the Company. In
addition, Gragnani represents that he has returned to the Company all property of the Company which
was in his possession.

     6. Employment Taxes and Withholdings. Gragnani acknowledges and agrees that the Company shall
withhold from the payments and benefits described in this Agreement all taxes, including income and
employment taxes, required to be so deducted or withheld under applicable law.

     7. Confidentiality of this Agreement; Employment Reference. Gragnani shall not at any time,
directly or indirectly, discuss with or disclose to anyone (other than to members of his immediate
family, his attorneys, his tax advisors and the appropriate taxing authorities or as otherwise
required by law, hereinafter “Qualified Persons”) the terms of this Agreement, including the
amounts payable hereunder. If any person asks about the above matters, he will simply say that all
issues relating to his employment have been resolved. Gragnani further agrees that he will refrain
from making derogatory comments about the Company or its agents or Affiliates. The Company agrees
that the Company and its officers and managers will likewise refrain from making derogatory
comments about Gragnani. The Company further agrees that if any person makes inquiry concerning
Gragnani, the Company will advise such person only as to the dates of Gragnani’s employment with
the Company and the positions held.

     8. Release of the Company. Gragnani, on behalf of himself and his heirs, personal
representatives, successors and assigns, hereby releases and forever discharges the Company and its
Affiliates, and each and every one of their respective present and former shareholders, directors,
officers, employees and agents, and each of their respective successors and assigns, from and
against any and all claims, demands, actions, causes of action, damages, costs and expenses,
including without limitation all “Employment-Related Claims,” which Gragnani now has or may have by
reason of any thing occurring, done or omitted to be done prior to the Effective Date of this
Agreement; provided, however, this release shall not apply to any claims that
Gragnani may have for the payments or benefits expressly provided for Gragnani or otherwise
specifically referred to in this Agreement. For purposes of this Agreement, “Employment-Related
Claims” means all rights and claims Gragnani has or may have:

	 	(i)	 	related to his employment by or status as an employee of the
Company or any of its Affiliates or the termination of that employment or
status or to any employment practices and policies of the Company, or its
Affiliates;
	 
	 	(ii)	 	related to any of the incentive plans referenced in Paragraph
3(c) above; and
	 
	 	(iii)	 	under the federal Age Discrimination in Employment Act of
1967, as amended (“ADEA”).

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     9. Special ADEA Waiver Acknowledgements. GRAGNANI ACKNOWLEDGES AND AGREES THAT HE HAS READ
THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS, INCLUDING RIGHTS AND CLAIMS ARISING UNDER THE FEDERAL AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, AS AMENDED (“ADEA”). GRAGNANI FURTHER ACKNOWLEDGES AND AGREES THAT:

	 	(a)	 	THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE ANY RIGHTS
OR CLAIMS THAT MAY ARISE AFTER THE EFFECTIVE DATE OF THIS AGREEMENT;
	 
	 	(b)	 	HE IS ENTERING INTO THIS AGREEMENT AND RELEASING, WAIVING AND
DISCHARGING RIGHTS OR CLAIMS ONLY IN EXCHANGE FOR CONSIDERATION THAT HE IS NOT
ALREADY ENTITLED TO RECEIVE;
	 
	 	(c)	 	HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT, TO
CONSULT WITH AN ATTORNEY BEFORE EXECUTING THIS AGREEMENT;
	 
	 	(d)	 	HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS AGREEMENT,
THAT HE HAS UP TO TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT
AND TO DELIVER (OR CAUSE TO BE DELIVERED) THIS AGREEMENT TO EARL D. LEAKE, VICE
PRESIDENT OF HUMAN RESOURCES, AND THAT IF HE EXECUTES THIS AGREEMENT PRIOR TO
THE EXPIRATION OF THE TWENTY-ONE (21) DAY PERIOD, THEN HE EXPRESSLY WAIVES HIS
RIGHTS WITH RESPECT TO THE REMAINING TIME, AND THAT THE AGREEMENT WILL BECOME
EFFECTIVE THE EIGHTH DAY AFTER HE SIGNS IT AS REFERENCED IN PARAGRAPH 9(e)
BELOW; AND
	 
	 	(e)	 	HE IS AWARE THAT HE MAY REVOKE THIS AGREEMENT AT ANY TIME
WITHIN SEVEN (7) DAYS AFTER THE DAY HE SIGNS THIS AGREEMENT AND THAT THIS
AGREEMENT WILL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EIGHTH DAY AFTER
THE DATE THIS AGREEMENT IS SIGNED, ON WHICH DAY, THE EFFECTIVE DATE, THIS
AGREEMENT WILL AUTOMATICALLY BECOME EFFECTIVE UNLESS PREVIOUSLY REVOKED WITHIN
THAT SEVEN-DAY PERIOD. HE IS ALSO AWARE THAT TO AFFECT A REVOCATION, HE MAY,
WITHIN THE SEVEN-DAY PERIOD DELIVER (OR CAUSE TO BE DELIVERED) TO EARL D.
LEAKE, VICE PRESIDENT OF HUMAN RESOURCES, NOTICE OF HIS REVOCATION OF THIS
AGREEMENT NO LATER THAN 5:00 P.M. EASTERN TIME ON THE SEVENTH (7TH) DAY
FOLLOWING HIS EXECUTION OF THIS AGREEMENT.

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

     11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
Company, its successors and assigns. This Agreement shall be binding upon and inure to the benefit
of Gragnani, his heirs, executors and administrators.

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

     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized
officer on the execution date indicated below, and Gragnani has hereunto set his hand and seal on
the execution date indicated below.

	 	 	 	 	 
	 

	 	LANCE, INC.
	 
	 	 	 	 
	 

	 	By
	 	s/ Earl D. Leake
	 

	 	 	 	 
	 

	 	 	 	Earl D. Leake

Vice President of Human Resources
	 
	 	 	 	 
	 

	 	Execution Date: 1/24/07
	 
	 	 	 	 
	 

	 	s/ Louis R. Gragnani, Jr.
	 

	 	 
	 

	 	L. R. Gragnani, Jr.
	 
	 	 	 	 
	 

	 	Execution Date: 1/31/07

6Exhibit 10.7

 

Exhibit 10.7

	 	 	 
	

	 	Lance, Inc.

P.O. Box 32368

Charlotte, NC 28232-2368

Phone: 704/554-1421

December 21, 2006

Mr. Glenn A. Patcha

31311 Avenida Terramar

San Juan Capistrano, CA 92675

Dear Glenn:

After the series of interviews with our executive management team, we feel you can be a real asset
to Lance, Inc. Also, Lance will afford you the opportunity to continue your growth and
development. I feel it’s a good match and we would like for you to come on board as our Senior
Vice President of Sales and Marketing. To that end, you will find our offer outlined below.

Compensation:

	 	•	 	Base pay — $330,000 annually
	 
	 	•	 	Participation in the Corporate Annual Incentive Plan with a target incentive
potential of 50% of your annual base salary. If goals are exceeded, there’s an
opportunity to earn one times annual salary.
	 
	 	•	 	Guaranteed Incentive — for fiscal year 2007, a guarantee of 25% of salary paid in
2007.
	 
	 	•	 	Signing Bonus — $20,000 payable within the first month of employment.
	 
	 	•	 	Long-Term Incentive Plan (LTIP)
	 
	 	 	 	Currently the Long-Term Incentive Plans are as follows:

	 	A.	 	Three year plan with new plan rolled out each year.

	 	—	 	Target value will be 45% of base pay with payout potential to be
greater if targeted goals are exceeded.
	 
	 	—	 	Measure is Return on Capital Employed (ROCE)

	 	B.	 	A Five-Year LTIP funded with restricted stock.

	 	—	 	Your opportunity is 48,000 shares, which represents four (4) years of
participation

 

 

Mr. Glenn A. Patcha

Page 2

December 21, 2006

	 	—	 	Measure is stock appreciation vs. Russell 2000 Index
	 
	 	—	 	Time horizon is 5 years (2006 — 2010).

Benefits and Perquisites

	 	•	 	Auto allowance — $1,200.00 per month, subject to applicable withholdings.
	 
	 	•	 	Four (4) weeks vacation.
	 
	 	•	 	Equity

	 	—	 	20,000 restricted grant shares with three (3) year cliff vesting.
	 
	 	—	 	25,000 stock options at market price, based on closing price
on first day of employment. (Vest 25% per year over four (4) years.)

Other Benefits

	 	•	 	Executive Severance Agreement which provides one (1) year base pay, plus target
incentive of Annual Incentive Plan for termination without cause. Medical benefits
would continue during the severance period, provided no other employer coverage is
available and provided the former employee pays the employee cost for the coverage.
	 
	 	•	 	Employee Health Plan includes medical, dental, life and AD&D.
	 
	 	•	 	Profit Sharing and Retirement Plan after one year eligibility.
	 
	 	•	 	401(k) Plan.
	 
	 	•	 	Change in Control (CIC) Benefit — we are reviewing our policy, but will provide
CIC benefits that are reasonable.
	 
	 	•	 	Employee Stock Purchase Plan.
	 
	 	•	 	Employee Assistance Program.

 

 

Mr. Glenn A. Patcha

Page 3

December 21, 2006

Relocation

	 	•	 	Will relocate family and household goods to Charlotte, North Carolina area, per the
company’s relocation program. Temporary living arrangements are available if needed.

Glenn, it’s an exciting time at Lance and we feel you can help us reach our goal of becoming a high
performance organization.

You will be a member of our executive management team, which we presently call the Senior Team.

Thanks for your consideration and interest in the House of Lance. Please contact me for any
questions regarding this offer.

This offer is contingent on the successful completion of a drug test screen and favorable
employment related references.

Also, in accordance with the Board of Directors Governance Principles and Bylaws of Lance, this
letter, your election as an officer, the fixing of your compensation and the grant of stock options
and restricted stock is not binding or effective until action and approval by the Board of
Directors of Lance and its Compensation Committee.

Acceptance may be communicated by signing below with date and forwarding a copy to my attention.

	 	 	 
	 

	 	Sincerely,
	 
	 	 
	 

	 	/s/ Earl D. Leake
	 
	 	 
	 

	 	E. D. Leake

Vice President — Human Resources
	 
	 	 
	ACCEPTED:
	 	 
	 
	 	 
	/s/ Glenn A. Patcha

	 	1/29/2007
	 

	 	 
	Glenn A. Patcha

	 	Date

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