Exhibit 10.2

LANCE, INC.

2010 Three-Year Performance Incentive Plan for Officers and Key Managers

Purposes and Introduction
 
The 2010 Three-Year Performance Incentive Plan for Officers and Key Managers
provides for Stock Options, Restricted Stock and Performance Awards under the
Lance, Inc. 2007 Key Employee Incentive Plan (the “Incentive Plan”).  Except as
otherwise expressly defined herein, capitalized terms shall be as defined in the
Incentive Plan.
 
The primary purposes of the 2010 Three-Year Performance Incentive Plan for
Officers and Key Managers (the “2010 Plan”) are to:
 
·           Align officers’ and managers’ interests with those of stockholders
by linking a substantial portion of compensation to the price of the Company’s
Common Stock and to the Company’s financial performance based on the performance
measures specified below.
 
·           Provide a way to attract and retain key executives and managers who
are critical to Lance’s future success.
 
·           Provide competitive total compensation for executives and managers
commensurate with Company performance.
 
To achieve the maximum motivational impact, the Plan and the awards
opportunities will be communicated to participants as soon as practical after
the 2010 Plan is approved by the Compensation Committee of the Board of
Directors.
 
Each officer will be assigned a Target Incentive based on market and peer group
data and each other participant will be assigned a Target Incentive, stated as a
percent of base salary.  The Chief Executive Officer is assigned a Target
Incentive based on his Employment Agreement.  Concurrently with the approval of
the 2010 Plan, 25% of the Target Incentive will be awarded in the form of
Nonqualified Stock Options and 25% will be awarded in the form of Restricted
Stock.  The final 50% of the Target Incentive will be in the form of a
Performance Award to be settled in shares of Common Stock after the completion
of the 2010, 2011 and 2012 fiscal years (the “Performance Period”), based on the
attainment of predetermined goals.
 
 
For the 2010 Plan, participants will be eligible to earn the Performance Award
based on the matrix on Exhibit A-1 hereto which incorporates the financial
performance measures on Exhibit A-2 hereto, excluding special items and any
acquisition or divestiture related activity for the first 12 months after the
closing of the acquisition or divestiture, and relative total shareholder return
of the peer companies listed on Exhibit A-3 hereto.  The financial performance
measures and relative total shareholder return are defined as follows:
 
1.  Net Revenue (“Net Revenue”) is defined as the cumulative revenue and other
operating revenue, net of returns, allowances, discounts and other sales
deduction items for the 2010, 2011 and 2012 fiscal years, as audited and
reported in the Company’s Forms 10-K for the 2010, 2011 and 2012 fiscal years.
 
2.  Corporate Earnings Per Share (“Corporate EPS”) is defined as the cumulative
fully diluted earnings per share of the Company for the 2010, 2011 and 2012
fiscal years, as audited and reported in the Company’s Forms 10-K for the 2010,
2011 and 2012 fiscal years.
 
3.  Return on Invested Capital (“ROIC”) is defined as the average of the ROIC
for the 2010, 2011 and 2012 fiscal years, as audited and reported in the
Company’s Forms 10-K for the 2010, 2011 and 2012 fiscal years, calculated as
follows:
 
 Operating Income  x (1 - Tax Rate)
Average Equity + Average Net Debt
 
Operating Income shall be the Company’s actual earnings before interest and
taxes and excluding other income and expense.
 
Tax Rate for ROIC shall be the Company’s actual total effective income tax rate
for each year.
 
Average Net Debt shall be the Company’s average debt less average cash for each
year.
 
4.  Relative Total Shareholder Return (“RTSR”) is defined as the total
shareholder return for Lance relative to a peer group of 24 companies.  Each
peer company, including Lance will be compared to each other and put into four
quadrants ranked from highest total shareholder return to lowest, with the
highest in Quadrant One and the lowest in Quadrant Four.
 
Total Shareholder Return is defined as the return of $100 invested in each stock
at the beginning of the period compared to the value of that $100, with
dividends reinvested, at the end of the measurement period.  The starting number
of shares purchased for each peer company, including Lance, with $100 will be
based on the average weekly stock price for the preceding year (2009).
 
If any peer company ceases to be publicly traded during the Performance Period,
the Russell 2000 Index will be inserted in its place; if a second peer company
ceases to be publicly traded, the S&P 500 Index will be inserted in its place.
 
Base salary shall be the annual rate of base compensation for the 2010 fiscal
year  which is in effect on February 22, 2010; provided that for any award
intended to satisfy the Performance-Based Exception, base salary shall be the
annual rate of base compensation for the fiscal year which is set no later than
March 31 of such fiscal year.
 
Eligibility and Participation
Eligibility in the Plan is limited to Executive Officers and Key Managers in
Salary Grade 18 and above who are key to Lance’s success. The Compensation
Committee will review and approve participants nominated by the President and
Chief Executive Officer.  An employee hired or promoted into an eligible
position during the Performance Period will not participate in the 2010
Plan.  Participation in the 2010 Plan does not guarantee participation in any
subsequent long-term incentive plans but will be reevaluated and determined on
an annual basis.
 
Exhibit A-4 and Exhibit A-5 include the list of 2010 Plan participants approved
by the Compensation Committee on February 22, 2010.
 
Target Incentives and
Performance Measures
Each participant will be assigned a Target Incentive as specified
above.  Participants, other than officers, will be assigned to a Performance
Tier by Salary Grade.
 
Performance Tier                                Performance Tier Description
 
1                      Officer
2                      Non-Officer Vice President
                            3                      Key Managers
 
For the Performance Awards, the 2010-2012 financial performance measures are on
Exhibit A-1 attached hereto.  Percent of payout will be determined according to
the matrix on Exhibit A-2 attached hereto which encompasses RTSR and the
financial performance measures.
 
The performance measures will be communicated to each participant as soon as
practicable after it has been established.  Final Performance Awards will be
calculated after the Compensation Committee has reviewed the Company’s audited
financial statements for 2010, 2011 and 2012 and determined the performance
level achieved.
 
Exhibit A-4 and Exhibit A-5 list the Target Incentives for each participant for
the 2010 Plan as determined by the Compensation Com­mittee.  Target Incentives
will be communicated to each participant as close to the beginning of the year
as practicable, in writing.  Target Incentives, except for Officers, will be
calculated by multiplying each participant’s base salary by the appropriate
Performance Tiers and percentages, as described below.
 
Percentage of Base Salary
Performance Tier                                for 2010 Target Incentives
2                                35-45%
                                3                                15-30%
 
Final Performance Awards will be calculated, paid and granted after the
Compensation Committee has reviewed the Company’s audited financial statements
for 2010, 2011 and 2012 and determined the performance levels achieved.
 
Awards
As further specified on Exhibit B-1 and Exhibit B-2, the Awards under the 2010
Plan shall be as follows:
 
1.  Stock Options.  Each participant shall receive Stock Options equal to 25% in
value of his or her Target Incentive.  The number of Stock Options awarded to
each participant will equal the dollar value of the participant’s Stock Option
Incentive divided by the Black-Scholes value of the Stock Options, with the
result rounded up to the nearest multiple of three shares.
 
The grant date for Stock Options will be the date the awards are approved by the
Compensation Committee and the exercise price will be the Fair Market Value of
the Common Stock, which is the closing price of the Common Stock, on the grant
date.  Each Stock Option will vest in three substantially equal annual
installments beginning one year after the date of grant and the term of each
Stock Option will be ten years.
 
2.  Restricted Stock.  Each participant shall receive Restricted Stock equal to
25% in value of his or her Target Incentive.  The number of shares of Restricted
Stock awarded to each participant will equal the dollar value of the
participant’s Restricted Stock Incentive divided by the closing price of the
Common Stock on the date of award, with the results rounded up to the nearest
multiple of three shares.
 
The award date for Restricted Stock will be the date the awards are approved by
the Compensation Committee and the value shall be the Fair Market Value of the
Common Stock on the award date.  Each award of Restricted Stock will vest in
three substantially equal annual installments beginning one year after the date
of award.
 
3.  Performance Awards.  Each participant shall receive a Performance Award
equal to 50% in value of his or her Target Incentive.
 
As a Performance Award, the number of shares of the Company’s Common Stock
awarded will equal the applicable dollar value divided by the closing price for
the Company’s Common Stock on the award date, with the result rounded up to the
nearest multiple of three shares.  Such shares of Common Stock will be fully
vested on the award date.
 
For purposes of the 2010 Plan, the award date for shares of Common Stock as a
Performance Award will be the date established by the Compensation Committee
after completion of the Performance Period and the applicable performance level
has been determined.
 
Form and Timing of
Awards
Awards will be made as soon as practicable after the performance level has been
determined and approved by the Compensation Committee.  All awards will be
rounded to the nearest multiple of three shares.
 
Change In Status
An employee hired or promoted into an eligible position during the Performance
Period will not participate in the 2010 Plan.
 
Certain
Terminations of
Employment
Performance Awards
 
In the event a participant voluntarily terminates employment (other than by
Retirement) or is terminated involuntarily during or after the end of the
Performance Period but before the applicable award date, the participant shall
not receive any Performance Award hereunder.
 
In the event of a participant’s death or Disability before the end of the
Performance Period, any Performance Award will be determined on the date of such
event based on target performance and paid out all in cash as soon as
administratively practicable (but in no event more than 75 days) after the date
of such event.  In the event of a participant’s death or Disability on or after
the end of the Performance Period but before the applicable award date, any
Performance Award will be determined based on actual performance and paid out
all in cash on or about the applicable award date.
 
If the event of a participant’s Retirement during or after the end of the
Performance Period but before the applicable award date, any Performance Award
will be determined based on actual performance and paid out all in cash on or
about the applicable award date.
 
Stock Options
 
In the event a participant voluntarily terminates employment (other than by
Retirement) or is terminated involuntarily or in the event of death, Disability
or Retirement, vesting and the post-termination exercise period for Stock
Options will be as follows:
 
Voluntary termination (other than Retirement):  Stock Options, whether vested or
unvested, cease to be exercisable as of the date of termination.
 
Involuntary termination:  Vested Stock Options will remain exercisable for a
period of 30 days following the date of termination (or, if earlier, the
original expiration date of the option); unvested Stock Options will be
forfeited as of the date of termination.
 
Death:  Stock Options will remain exercisable for a period of one year following
the date of death (or, if earlier, the original expiration date of the option);
unvested Stock Options will become fully vested as of the date of termination.
 
Disability:  Vested Stock Options will remain exercisable through the original
expiration date of the option; unvested Stock Options will become fully vested
as of the date of termination.
 
Retirement:  Vested Stock Options will remain exercisable for a period of three
years following retirement (or, if earlier, the original expiration date of the
option); unvested Stock Options will continue to vest for a period of six months
after Retirement and any remaining unvested Stock Options will be forfeited as
of such date.
 
Restricted Shares
 
In the event a participant voluntarily terminates employment (other than by
Retirement) or is terminated involuntarily or in the event of death, Disability
or Retirement, vesting for Restricted Stock (including any Restricted Stock
granted in connection with a Performance Award following completion of the
Performance Period) will be as follows:
 
Voluntary termination (other than Retirement):  Unvested Restricted Stock will
be forfeited as of the date of termination.
 
Involuntary termination:  Unvested Restricted Stock will be forfeited as of the
date of termination.
 
Death:  Unvested Restricted Stock will become fully vested on the date of such
event.
 
Disability:  Unvested Restricted Stock will become fully vested on the date of
such event.
 
Retirement:  Unvested Restricted Stock will become vested pro rata based on the
number of full months elapsed on the date of such event since the award date and
any remaining unvested Restricted Stock will be forfeited as of such date.
 
“Retirement” is defined under the Incentive Plan to mean the participant’s
termi­nation of employment with the Company either (i) after attainment of age
65 or (ii) after attainment of age 55 with the prior consent of the Compensation
Committee.
 
Change In Control
In the event of a Change in Control, (i) unvested Stock Options and unvested
Restricted Stock will vest as provided in the Incentive Plan and (ii) for
outstanding Performance Awards pro rata payouts will be made all in cash at the
greater of (1) Target Incentive or (2) actual results through the closing date
with such proration based on the number of days in the Performance Period
preceding the closing of the Change in Control transaction.  Payouts will be
made within 30 days after the relevant transaction has been closed.
 
Withholding
The Company shall withhold from awards any Federal, foreign, state or local
income or other taxes required to be withheld.
 
Communications
Progress reports should be made to participants annually, showing performance
results.
 
Executive Officers
Notwithstanding any provisions to the contrary above, participation, awards  and
prorations for Executive Officers, including the President and Chief Executive
Officer, shall be approved by the Compensation Committee.
 
Stockholder
Approval
The 2010 Plan and the awards hereunder are made pursuant to the Incentive Plan,
which was approved by the Company’s stockholders at the Annual Meeting of
Stockholders held on April 26, 2007.
 
Governance
The Compensation Committee of the Board of Directors of Lance, Inc. is
ultimately responsible for the administration and governance of the
Plan.  Actions requiring Committee approval include final determination of plan
eligibility and participation, identification of performance measures and goals,
final award components and determination and amendments to the Plan.  For
purposes of the Plan, acquisition performance will be excluded for the first
twelve months after the acquisition and included in the results thereafter.  The
Committee may adjust any award due to extraordinary events such as acquisitions,
dispositions, required accounting adjustments or similar events, all as
specified in Section 11(d) of the Incentive Plan; provided, however, that the
Committee shall at all times be required to exercise this discretionary power in
a manner, and subject to such limitations, as will permit all payments under the
Plan to “covered employees,” as defined in Section 162(m) of the Internal
Revenue Code, to continue to qualify as “performance-based compensation” for
purposes of Section 162(m) of the Code.  In addition, under the Incentive Plan,
the Committee retains the discretion to reduce any award amount from the amount
otherwise determined under the applicable formula.  Subject to the foregoing,
the decisions of the Committee shall be conclusive and binding on all
participants.

 
 

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Exhibit A-1
Matrix

 

 
RELATIVE SHAREHOLDER RETURN QUADRANT
 
Attainment
Quartile 4
Quartile 3
Quartile 2
Quartile 1
FINANCIAL
PARAMETER
PERFORMANCE
Maximum
75%
100%
175%
250%
Target
50%
75%
100%
150%
Threshold
25%
50%
75%
100%
Below Threshold
0%
25%
50%
75%

 
 

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Exhibit A-2
Performance Measures

   
2010 Three Year Plan
     
Weighting
   
Threshold
@50%
   
Target
@100%
   
Maximum
@200%
 
Net Revenue
     Cumulative for 2010 - 2012
    50 %   $ 2,860     $ 3,044     $ 3,328                                    
EPS
     Cumulative for 2010 - 2012
    30 %   $ 3.97     $ 4.80     $ 5.79                                    
ROIC
      Average for 2010 - 2012
    20 %     9.0 %     12.0 %     15.0 %                                  

Notes:
 
  1    Acquisitions and divestitures are excluded for the first twelve months
post close

 

 
 

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Exhibit A-3
Peer Companies

 
Cap Size
 
Ticker
   
2006 Avg Weekly Price
   
2009 Avg Weekly Price
   
3 Yr Investment of $100 is worth
   
2009 Quartile Rank
 
American Italian Pasta Company
Mid
 
AIPC
    $ 7.31     $ 29.76     $ 475.76       1  
Diamond Foods
Mid
 
DMND
    $ 16.97     $ 27.91     $ 209.22       1  
Green Mountain
Mid
 
GMCR
    $ 11.14     $ 60.52     $ 202.25       1  
Church & Dwight
Mid
 
CHD
    $ 37.57     $ 54.85     $ 160.89       1  
TreeHouse Foods
Mid
 
THS
    $ 25.15     $ 31.35     $ 154.50       1  
Smuckers
Mid
 
SJM
    $ 44.38     $ 47.78     $ 139.13       1  
Ralcorp
Mid
 
RAH
    $ 43.91     $ 58.75     $ 136.00       2  
General Mills
Large
 
GIS
    $ 52.34     $ 58.73     $ 134.35       2  
Lance
Mid
 
LNCE
    $ 21.79     $ 23.26     $ 120.71       2  
J&J Snacks
Mid
 
JJSF
    $ 33.36     $ 38.12     $ 119.77       2  
Lancaster Colony Group
Mid
 
LANC
    $ 41.50     $ 45.14     $ 119.71       2  
Kellogg
Large
  K   $ 47.35     $ 45.86     $ 112.36       2  
Hormel Foods
Mid
 
HRL
    $ 35.60     $ 34.55     $ 107.35       3  
Heinz
Large
 
HNZ
    $ 40.56     $ 37.48     $ 105.43       3  
DelMonte Foods
Mid
 
DLM
    $ 11.04     $ 9.20     $ 102.31       3  
ConAgra
Large
 
CAG
    $ 22.91     $ 19.30     $ 99.72       3  
Campbells
Large
 
CPB
    $ 34.90     $ 30.17     $ 96.86       3  
Flowers
Mid
 
FLO
    $ 27.68     $ 23.22     $ 85.85       3  
Kraft
Large
 
KFT
    $ 32.18     $ 26.02     $ 84.46       4  
Sara Lee
Large
 
SLE
    $ 17.12     $ 10.12     $ 71.15       4  
Hershey Co
Large
 
HSY
    $ 53.12     $ 36.75     $ 67.37       4  
Alberto Culver
Mid
 
ACV
    $ 43.67     $ 25.22     $ 67.07       4  
Hain Celestial
Mid
 
HAIN
    $ 25.69     $ 16.52     $ 66.18       4  
Hansen Natural
Mid
 
HANS
    $ 84.60     $ 35.04     $ 45.39       4  

 

 
 

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Exhibit A-4
2010 Three-Year Performance Incentive Plan for Officers

Name
Title
 
Target Incentive
           
David V. Singer
President and Chief Executive Officer
  $ 1,600,000  
Rick D. Puckett
Executive Vice President, Chief Financial Officer, Secretary and Treasurer
  $ 475,000  
Glenn A. Patcha
Senior Vice President – Sales and Marketing
  $ 420,000  
Blake W. Thompson
Senior Vice President – Supply Chain
  $ 350,000  
Kevin A. Henry
Senior Vice President and Chief Human Resources Officer
  $ **  
Margaret E. Wicklund
Vice President, Controller and Assistant Secretary
  $ **  

___________________
**
Amounts are omitted for participants other than the Chief Executive Officer,
Chief Financial Officer and other executive officers who were named in the
Summary Compensation Table of the Company’s Proxy Statement for the 2010 Annual
Meeting of Stockholders.

 
 

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Exhibit B-1
2010 Three-Year Performance Incentive Plan for Officers

 
 
Name
 

Stock Option  Incentive
   
Nonqualified
Stock
Options
   
Restricted
 Stock
 Awards
   
Restricted
 Stock  Shares
   
Performance
 Award Opportunity
                                 
David V. Singer
 
  $ 400,000       85,287     $ 400,000       18,198     $ 800,000  
Rick D. Puckett
  $ 118,750       25,320     $ 118,750       5,403     $ 237,500                
                           
Glenn A. Patcha
  $ 105,000       22,389     $ 105,000       4,776     $ 210,000                
                           
Blake W. Thompson
  $ 87,500       18,657     $ 87,500       3,981     $ 175,000                  
                         
Kevin A. Henry
  $   **     **     $   **     **     $   **                                    
     
Margaret E. Wicklund
  $   **     **     $   **     **     $   **

___________________
**
Amounts are omitted for participants other than the Chief Executive Officer,
Chief Financial Officer and other executive officers who were named in the
Summary Compensation Table of the Company’s Proxy Statement for the 2010 Annual
Meeting of Stockholders.