Exhibit 10.1
LANCE, INC.
1997 INCENTIVE EQUITY PLAN
(As amended through February 9, 2007)
TABLE OF CONTENTS

             
Section 1.
  Purpose     1    

Section 2.
  Definitions     1    

Section 3.
  Administration     3    

Section 4.
  Duration of and Common Stock Subject to Plan     4    

Section 5.
  Eligibility     4    

Section 6.
  Stock Options     4    

Section 7.
  Stock Appreciation Rights     5    

Section 8.
  Restricted Awards     6    

Section 9.
  Performance Awards     8    

Section 10.
  Other Stock-Based and Combination Awards     9    

Section 11.
  Deferral Elections     9    

Section 12.
  Termination of Employment     10    

Section 13.
  Non-transferability of Awards     10    

Section 14.
  Adjustments Upon Changes in Capitalization, Etc.     10    

Section 15.
  Change in Control     11    

Section 16.
  Amendment and Termination     12    

Section 17.
  Miscellaneous     12  

 

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LANCE, INC.
1997 INCENTIVE EQUITY PLAN
     Section 1. Purpose. The purpose of the Lance, Inc. 1997 Incentive Equity
Plan (the “Plan”) is to attract and retain managerial and other key employees,
and to reward such employees for making major contributions to the success of
Lance, Inc. (the “Company”). The Plan is designed to meet these objectives by
offering performance-based stock and cash incentives and other equity-based
incentive awards, thereby providing such employees a proprietary interest in the
long term growth and performance of the Company.
     Section 2. Definitions. For purposes of the Plan, unless the context
clearly indicates otherwise, the following terms shall have the meanings set
forth below:
     (a) “Award” (collectively, “Awards”) means an award or grant made to a
Participant under Sections 6 through 10, inclusive, of the Plan.
     (b) “Board” means the Board of Directors of the Company.
     (c) “Code” means the Internal Revenue Code of 1986, as in effect from time
to time, or any successor thereto, together with rules, regulations and
interpretations promulgated thereunder.
     (d) “Common Stock” means the $.83 1/3 par value Common Stock of the Company
or any security of the Company issued in substitution, exchange or lieu thereof
pursuant to Section 14 hereof.
     (e) “Company” means Lance, Inc., a North Carolina corporation, and any
subsidiary corporations within the meaning of Section 424(f) of the Code, as
well as any successor corporation or corporations thereto.
     (f) “Compensation Committee” means the committee of the Board constituted
as provided in Section 3 of the Plan.
     (g) “Disability” means the inability, by reason of physical or mental
infirmity or both, of an individual to perform satisfactorily the duties then
assigned to such individual or any other duties the Company is willing to assign
to such individual for which compensation is payable. Disability shall be
determined by the Compensation Committee based upon such evidence as the
Compensation Committee shall deem sufficient and, upon medical evidence, if
available, and, in the discretion of the Compensation Committee, upon
certification of such Disability by an independent qualified physician.

 

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     (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended
and in effect from time to time, or any successor statute.
     (i) “Fair Market Value,” with respect to a share of the Common Stock at a
particular time, shall be that value as determined by the Compensation Committee
which shall be (i) if such Common Stock is listed on a national securities
exchange or traded on the NASDAQ Stock Market, the closing price for sales of
the Common Stock on a national securities exchange or the NASDAQ Stock Market on
which the Common Stock is principally traded on said date, or, if no sales occur
on said date, then on the next preceding date on which there were such sales of
Common Stock, (ii) if the Common Stock shall not be listed on a national
securities exchange or traded on the National Market System, the mean between
the closing bid and asked prices last reported by the National Association of
Securities Dealers, Inc. for the over-the-counter market on said date or, if no
bid and asked prices are reported on said date, then on the next preceding date
on which there were such quotations, or (iii) if at any time quotations for the
Common Stock shall not be reported by the National Association of Securities
Dealers, Inc. for the over-the-counter market and the Common Stock shall not be
listed on any national securities exchange or traded on the NASDAQ Stock Market,
the fair market value determined by the Compensation Committee in such manner as
it may deem reasonable.
     (j) “Incentive Stock Option” means any Stock Option granted pursuant to the
provisions of Section 6 of the Plan that is intended to be and is specifically
designated as an “incentive stock option” within the meaning of Section 422 of
the Code.
     (k) “Non-Qualified Stock Option” means any Stock Option granted pursuant to
the provisions of Section 6 of the Plan that is not an Incentive Stock Option.
     (l) “Participant” means an employee of the Company who is granted an Award
under the Plan.
     (m) “Performance Award” means an Award granted pursuant to the provisions
of Section 9 of the Plan the vesting of which is contingent on performance
attainment.
     (n) “Performance Equity Grant” means an Award of units representing shares
of Common Stock granted pursuant to the provisions of Section 9 of the Plan.
     (o) “Performance Unit Grant” means an Award of monetary units granted
pursuant to the provisions of Section 9 of the Plan.

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     (p) “Plan” means the Lance, Inc. 1997 Incentive Equity Plan as set forth
herein, as the same may be hereafter amended and from time to time in effect.
     (q) “Restricted Award” means an Award granted pursuant to the provisions of
Section 8 of the Plan.
     (r) “Restricted Stock Grant” means an Award of shares of Common Stock
granted pursuant to the provisions of Section 8 of the Plan.
     (s) “Restricted Unit Grant” means an Award of units representing shares of
Common Stock granted pursuant to the provisions of Section 8 of the Plan.
     (t) “Retirement” means the termination of an employee’s employment with the
Company at any time after the last day of the calendar month immediately
preceding the calendar month in which the employee attains the age of 60 years.
     (u) “Stock Appreciation Right” means an Award to benefit from the
appreciation of Common Stock granted pursuant to the provisions of Section 7 of
the Plan.
     (v) “Stock Option” means an Award to purchase shares of Common Stock
granted pursuant to the provisions of Section 6 of the Plan.
     (w) “First Effective Amendment Date” means that date on which the
stockholders of the Company approve the amendment to the Plan to increase the
number of shares of Common Stock reserved for grants of Awards under the Plan by
an additional 1,500,000 shares of Common Stock.
     Section 3. Administration.
     (a) The Plan shall be administered by those members of the Compensation
Committee of the Board who are “nonemployee directors” for purposes of
Rule 16b-3 under the Exchange Act.
     (b) The Compensation Committee is authorized to grant Awards under the
Plan, to construe and interpret the Plan, to promulgate, amend and rescind rules
and regulations relating to the implementation of the Plan, and to make all
other determinations necessary or advisable for the administration of the Plan.
Any determination, decision or action of the Compensation Committee in
connection with the construction, interpretation, administration or application
of the Plan shall be final, conclusive and binding upon all persons
participating in the Plan and any person validly claiming under or through
persons participating in the Plan. The Company shall effect the granting of
Awards under the Plan in accordance with the determinations made by the

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Compensation Committee, by execution of instruments in writing in such form as
are approved by the Compensation Committee.
     Section 4. Duration of and Common Stock Subject to Plan.
     (a) Term. The Plan shall be effective on April 18, 1997, subject to
approval by a plurality of the shares voting on approval of the Plan at the
Annual Meeting of Stockholders held on said date or any adjournment thereof. The
Plan shall terminate on March 31, 2007.
     (b) Shares of Common Stock Subject to Plan. The maximum number of shares of
Common Stock with respect to which Awards may be granted under the Plan, subject
to adjustment as provided in Section 14 of the Plan, shall be 1,500,000 shares
of the total authorized shares of the Common Stock. Beginning on the First
Effective Amendment Date, there is hereby reserved for grants of Awards under
the Plan, subject to adjustment as provided in Section 14 of the Plan, an
additional 1,500,000 shares of Common Stock. For the purpose of computing the
total number of shares of Common Stock available for Awards under the Plan,
there shall be counted against the foregoing limitation the number of shares of
Common Stock subject to issuance upon exercise or settlement of Awards and the
number of shares of Common Stock which equal the value of Restricted Unit Grants
and Performance Equity Grants and other stock-based Awards in each case
determined as of the dates on which such Awards are granted. If any Awards are
forfeited, terminated, settled in cash in lieu of stock, exchanged for other
Awards, or expire unexercised, the shares of Common Stock which were theretofore
subject to such Awards shall again be available for Awards under the Plan to the
extent of such forfeiture, termination, settlement, exchange or expiration.
Further, any shares of Common Stock which are used as full or partial payment to
the Company by a Participant of the purchase price of shares of Common Stock
upon exercise of Stock Options shall again be available for Awards under the
Plan, as shall any shares covered by Stock Appreciation Rights which are not
issued as payment upon exercise. Common Stock which may be issued under the Plan
may be either authorized and unissued shares or issued shares which have been
reacquired by the Company. No fractional shares of Common Stock shall be issued
under the Plan.
     (c) Individual Award Limit. In no event shall a Participant receive an
Award or Awards during any one calendar year covering in the aggregate more than
150,000 shares of Common Stock.
     Section 5. Eligibility. Only managerial and other key employees shall be
eligible to be granted Awards under the Plan. The Compensation Committee shall,
from time to time, (i) determine those managerial and other key employees to
whom Awards shall be granted and the conditions of each such Award or issue and
sale and (ii) grant such Awards. No member of the Compensation Committee while
serving as such shall be eligible to receive any Award hereunder.
     Section 6. Stock Options. Stock Options may be granted under the Plan in
the form of Incentive Stock Options or Non-Qualified Stock Options; and such
Stock Options shall be subject to the following terms and conditions and shall
contain such additional terms and

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conditions, not inconsistent with the express provisions of the Plan, as the
Compensation Committee shall determine:
     (a) Grant. Stock Options may be granted under the Plan on such terms and
conditions not inconsistent with the provisions of the Plan and in such form as
the Compensation Committee may from time to time approve. Stock Options may be
granted alone, in addition to or in combination with other Awards under the
Plan.
     (b) Stock Option Price. The option exercise price per share of Common Stock
purchasable under a Stock Option shall be determined by the Compensation
Committee at the time of grant, but in no event shall the exercise price of an
Incentive Stock Option be less than 100% of the Fair Market Value of the Common
Stock on the date of the grant of such Incentive Stock Option.
     (c) Option Term. The term of each Stock Option shall be fixed by the
Compensation Committee; except that the term of Incentive Stock Options shall
not exceed 10 years after the date the Incentive Stock Option is granted.
     (d) Exercisability. A Stock Option shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Compensation Committee at the date of grant.
     (e) Method of Exercise. A Stock Option may be exercised, in whole or in
part, by a Participant’s giving written notice of exercise to the Company
specifying the number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price in cash or, if acceptable
to the Compensation Committee in its sole discretion, in shares of Common Stock
already owned by the Participant, or by surrendering outstanding Awards
denominated in stock or stock units.
     (f) Special Rule for Incentive Stock Options. With respect to Incentive
Stock Options granted under the Plan, the aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the number
of shares with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year shall not exceed $100,000
or such other limit as may be required by the Code.
     Section 7. Stock Appreciation Rights. Stock Appreciation Rights may be
granted under the Plan subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the express
terms of the Plan, as the Compensation Committee shall determine:
     (a) Stock Appreciation Rights. A Stock Appreciation Right is an Award
entitling a Participant to receive an amount equal to (or if the Compensation
Committee shall so determine at the time of grant, less than) the

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excess of the Fair Market Value of a share of Common Stock on the date of
exercise over the Fair Market Value of a share of Common Stock on the date of
grant of the Stock Appreciation Right, or such other price as is set by the
Compensation Committee, multiplied by the number of shares of Common Stock with
respect to which the Stock Appreciation Right shall have been exercised.
     (b) Grant. A Stock Appreciation Right may be granted in combination with,
in addition to or completely independent of a Stock Option or any other Award
under the Plan.
     (c) Exercise. A Stock Appreciation Right may be exercised by a Participant
in accordance with procedures established by the Compensation Committee, except
that in no event shall a Stock Appreciation Right be exercisable within the
first six months after the date of grant. The Compensation Committee may also
provide that a Stock Appreciation Right shall be automatically exercised on one
or more specified dates.
     (d) Form of Payment. Payment upon exercise of a Stock Appreciation Right
may be made in cash, in shares of Common Stock, or any combination thereof, as
the Compensation Committee shall determine; provided, however, that any Stock
Appreciation Right exercised upon or subsequent to the occurrence of a Change in
Control (as defined in Section 15) shall be paid in cash.
     Section 8. Restricted Awards. Restricted Awards may be granted under the
Plan in the form of either Restricted Stock Grants or Restricted Unit Grants.
Restricted Awards shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the
express provisions of the Plan, as the Compensation Committee shall determine:
     (a) Restricted Stock Grants. A Restricted Stock Grant is an Award of shares
of Common Stock to a Participant subject to such terms and conditions as the
Compensation Committee deems appropriate, including, without limitation,
restrictions on the sale, assignment, transfer or other disposition of such
shares and the requirement that the Participant forfeit such shares back to the
Company upon termination of employment prior to vesting.
     (b) Restricted Unit Grants. A Restricted Unit Grant is an Award of units to
be paid in cash upon vesting (with each unit having a value equivalent to the
Fair Market Value of one share of Common Stock) granted to a Participant subject
to such terms and conditions as the Compensation Committee deems appropriate,
including, without limitation, the requirement that the Participant forfeit such
units upon termination of employment prior to vesting.
     (c) Grants of Awards. Restricted Awards may be granted under the Plan in
such form and on such terms and conditions as the Compensation Committee may
from time to time approve. Restricted Awards may be granted

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alone, in addition to or in combination with other Awards under the Plan.
Subject to the terms of the Plan, the Compensation Committee shall determine the
number of Restricted Awards to be granted to a Participant and the Compensation
Committee may impose different terms and conditions on any particular Restricted
Award made to any Participant. Each Participant receiving a Restricted Stock
Grant shall be issued a stock certificate in respect of such shares of Common
Stock. Such certificate shall be registered in the name of such Participant,
shall be accompanied by a stock power duly executed by such Participant, and
shall bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Award; which certificate evidencing such shares
shall be held in custody by the Company until the restrictions thereon shall
have lapsed.
     (d) Restriction Period. Restricted Awards shall provide that in order for a
Participant’s rights to vest in such Awards, the Participant must remain in the
employment of the Company, subject to relief for specified reasons, for a period
of time commencing on the date of the Award and ending on such later date or
dates as the Compensation Committee may designate at the time of the Award
(“Restriction Period”). During the Restriction Period, a Participant may not
sell, assign, transfer, pledge, encumber or otherwise dispose of shares of
Common Stock received under a Restricted Stock Grant. The Compensation
Committee, in its sole discretion, may provide for the lapse of restrictions in
installments during the Restriction Period. Upon expiration of the applicable
Restriction Period (or lapse of restrictions during the Restriction Period where
the restrictions lapse in installments), the Participant shall be entitled to
receive his or her Restricted Award or portion thereof, as the case may be.
     (e) Payment of Awards. A Participant shall be entitled to receive payment
for a Restricted Unit Grant (or portion thereof) upon expiration of the
applicable Restriction Period. Payment in settlement of a Restricted Unit Grant
shall be made as soon as practicable following the expiration of the Restriction
Period in cash, in shares of Common Stock equal to the number of units granted
under the Restricted Unit Grant with respect to which such payment is made, or
in any combination thereof, as the Compensation Committee in its sole discretion
shall determine. The Compensation Committee may also, in its discretion, permit
a Participant to elect to receive, in lieu of shares of unrestricted stock at
the conclusion of a Restriction Period, a cash payment equal to the Fair Market
Value of the Restricted Stock vesting on the date the restrictions expire.
     (f) Rights as a Stockholder. A Participant shall have, with respect to the
shares of Common Stock received under a Restricted Stock Grant, all of the
rights of a Stockholder of the Company, including the right to vote the shares,
and the right to receive any cash dividends. Stock dividends issued with respect
to the shares covered by a Restricted Stock Grant shall be treated as additional
shares under the Restricted Stock Grant and shall be subject to the same
restrictions and

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other terms and conditions that apply to shares under the Restricted Stock Grant
with respect to which such dividends are issued.
     Section 9. Performance Awards. Performance Awards may be granted under the
Plan in the form of either Performance Equity Grants or Performance Unit Grants.
Performance Awards may be subject to the following terms and conditions and may
contain such additional terms and conditions, not inconsistent with the express
provisions of the Plan, as the Compensation Committee shall determine:
     (a) Performance Equity Grants. A Performance Equity Grant is an Award of
units (with each unit equivalent in value to one share of Common Stock as it
varies throughout the term of the designated performance period) to a
Participant and may be subject to such terms and conditions as the Compensation
Committee deems appropriate, including, without limitation, the requirement that
the Participant forfeit such units or a portion of such units in the event
certain performance criteria are not met within a designated period of time.
     (b) Performance Unit Grants. A Performance Unit Grant is an Award of units
to be paid in cash upon vesting (with each unit representing such monetary
amount as designated by the Compensation Committee) to a Participant subject to
such terms and conditions as the Compensation Committee deems appropriate,
including, without limitation, the requirement that the Participant forfeit such
units or a portion of such units in the event certain performance criteria are
not met within a designated period of time.
     (c) Grants of Awards. Performance Awards may be granted under the Plan in
such form as the Compensation Committee may from time to time approve.
Performance Awards may be granted alone, in addition to or in combination with
other Awards under the Plan. Subject to the terms of the Plan, the Compensation
Committee shall determine the number of Performance Awards to be granted to a
Participant and the Compensation Committee may impose different terms and
conditions on any particular Performance Award made to any Participant.
     (d) Performance Goals and Performance Periods. Performance Awards shall
provide that in order for a Participant’s rights to vest in such Awards the
Company or the Participant, or a combination thereof, must achieve certain
performance goals (“Performance Goals”) over a designated performance period
(“Performance Period”). The Performance Goals and Performance Period shall be
established by the Compensation Committee, in its sole discretion. The
Compensation Committee shall establish Performance Goals for each Performance
Period before, or as soon as practicable after, the commencement of the
Performance Period. The Compensation Committee may also establish a schedule or
formula for such Performance Period setting forth the portion of the Performance
Award which will be earned or forfeited based on the degree of achievement of
the Performance Goals actually achieved or exceeded. In setting

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Performance Goals, the Compensation Committee may use such measures of
performance as it deems appropriate.
     (e) Payment of Awards. In the case of a Performance Equity Grant, the
Participant shall be entitled to receive payment for each unit earned in an
amount equal to the Fair Market Value of a share of Common Stock on the date on
which the Compensation Committee determines the number of units earned by the
Participant. In the case of a Performance Unit Grant, the Participant shall be
entitled to receive payment for each unit earned in an amount equal to the
dollar value of each unit times the number of units earned. Payment in
settlement of a Performance Award shall be made as soon as practicable following
the conclusion of the respective Performance Period in cash, in shares of Common
Stock, or in any combination thereof, as the Compensation Committee in its sole
discretion shall determine.
     Section 10. Other Stock-Based and Combination Awards.
     (a) The Compensation Committee may grant other Awards under the Plan
pursuant to which Common Stock is or may in the future be acquired, or Awards
denominated in stock units, including ones valued using measures other than
market value. Such other stock-based Awards may be granted either alone, in
addition to or in combination with any other type of Award granted under the
Plan.
     (b) The Compensation Committee may also grant Awards under the Plan in
combination with other Awards or in exchange of Awards, or in combination with
or as alternatives to grants or rights under any other employee plan of the
Company, including the plan of any acquired entity.
     (c) Subject to the provisions of the Plan, the Compensation Committee shall
have authority to determine the individuals to whom and the time or times at
which such Awards shall be made, the number of shares of Common Stock to be
granted or covered pursuant to such Awards, and any and all other conditions
and/or terms of the Awards.
     Section 11. Deferral Elections. The Compensation Committee may permit a
Participant to elect to defer his or her receipt of the payment of cash or the
delivery of shares of Common Stock that would otherwise be due to such
Participant by virtue of the exercise or earn out of an Award made under the
Plan. If any such election is permitted, the Compensation Committee may
establish rules and procedures for such payment deferrals, including the
possible (a) payment or crediting of reasonable interest on such deferred
amounts credited in cash, and (b) the payment or crediting dividend equivalents
in respect of deferrals credited in units of Common Stock.
     Section 12. Termination of Employment. The terms and conditions under which
an Award may be exercised after a Participant’s termination of employment shall
be determined by the Compensation Committee.

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     Section 13. Non-transferability of Awards. No Award under the Plan, and no
rights or interests therein, shall be assignable or transferable by a
Participant except by will or the laws of descent and distribution. During the
lifetime of a Participant, Stock Options and Stock Appreciation Rights are
exercisable only by, and payments in settlement of Awards will be payable only
to, the Participant or his or her legal representative.
     Section 14. Adjustments Upon Changes in Capitalization, Etc.
     (a) The existence of the Plan and the Awards granted hereunder shall not
affect or restrict in any way the right or power of the Board or the
Stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, other debentures, preferred or prior preference stocks, the
dissolution or liquidation of the Company or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding.
     (b) In the event that a dividend shall be declared upon the Common Stock
payable in shares of Common Stock, the number of shares of Common Stock then
subject to any Award and the number of shares reserved for issuance pursuant to
the Plan but not yet covered by an Award shall be adjusted by adding to each
such share the number of shares which would be distributable thereon if such
share had been outstanding on the date fixed for determining the Stockholders
entitled to receive such stock dividend. In the event that the outstanding
shares of Common Stock shall be changed into or exchanged for a different number
or kind of shares of stock or other securities of the Company or of another
corporation, or changed into or exchanged for cash or property or the right to
receive cash or property (but not including any dividend payable in cash or
property other than a liquidating distribution), whether through reorganization,
recapitalization, stock split-up, combination of shares, merger or
consolidation, then there shall be substituted for each share of Common Stock
subject to any Award and for each share of Common Stock reserved for issuance
pursuant to the Plan but not yet covered by an Award, the number and kind of
shares of stock or other securities or cash or property or right to receive cash
or property into which each outstanding share of Common Stock shall be so
changed or for which each such share shall be exchanged. In the event there
shall be any change other than as specified above in this Section 14, in the
number or kind of outstanding shares of Common Stock or of any stock or other
securities into which such Common Stock shall have been changed or for which it
shall have been exchanged, then if the Compensation Committee shall in its sole
discretion determine that such change equitably requires an adjustment in the
number or kind of shares theretofore reserved for issuance pursuant to the Plan
but not yet covered by an Award and of the shares then subject to an Award or
Awards, such adjustment shall be made by the Compensation Committee and shall be
effective and binding for all purposes of the Plan and each agreement entered
into with a Participant under the Plan. In the case of any such substitution or
adjustment as provided for in this Section 14, the Award price for each share
covered thereby prior to such substitution or adjustment will be the Award price
for all shares of stock or other securities or cash or property or right to
receive cash or property which shall have been substituted for such share or to
which such share shall have been adjusted pursuant to this Section 14. No
adjustment or substitution provided for in this Section 14 shall require the
Company in any agreement with a Participant to issue a fractional share and the
total substitution

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or adjustment with respect to each agreement with a Participant shall be limited
accordingly. In the event that the number of shares of Common Stock subject to
an Award is adjusted pursuant to the provisions of this Section 14, then any
Stock Appreciation Rights related to such Award shall be appropriately and
equitably adjusted.
     (c) In the event of (i) a dissolution or liquidation of the Company, (ii) a
sale of all or substantially all of the Company’s assets, (iii) a merger or
consolidation involving the Company in which the Company is not the surviving
corporation or (iv) a merger or consolidation involving the Company in which the
Company is the surviving corporation but the holders of shares of the Company’s
Common Stock receive securities of another corporation and/or other property,
including cash, the Compensation Committee shall, in its absolute discretion,
have the power to cancel, effective immediately prior to the occurrence of such
event, each Stock Option and each Stock Appreciation Right outstanding
immediately prior to such event (whether or not then exercisable) and, in
consideration of such cancellation, the Company will pay to the Participant an
amount in cash for each share of Common Stock subject to such Stock Option or
Stock Appreciation Right equal to the excess of (A) the value as determined by
the Compensation Committee, in its absolute discretion, of the property
(including cash) received by the holder of one share of Common Stock as a result
of such event over (B) the exercise price of such Stock Option or Stock
Appreciation Right; or provide for the exchange of each Stock Option and Stock
Appreciation Right outstanding immediately prior to such event (whether or not
then exercisable) for an option on or stock appreciation right with respect to,
as appropriate, some or all of the property which a holder of the number of
shares of Common Stock subject to such Stock Option or Stock Appreciation Right
would have received in such transaction and, incident thereto, make an equitable
adjustment as determined by the Compensation Committee, in its absolute
discretion, in the exercise price of the option or stock appreciation right, or
the number of shares or amount of property subject to the option or stock
appreciation right or, if appropriate, provide for a cash payment to the
Participant to whom such Stock Option or Stock Appreciation Right was granted in
partial consideration for the exchange of the Stock Option or Stock Appreciation
Right.
     Section 15. Change in Control.
     (a) Except as may otherwise be provided in an award agreement, incentive
plan, award guidelines or other instrument adopted under this Plan, in the event
of a Change in Control (as defined below) of the Company, (i) all Stock Options
or Stock Appreciation Rights then outstanding shall become fully exercisable as
of the date of the Change in Control, whether or not then exercisable, (ii) all
restrictions and conditions of all Restricted Stock Grants and Restricted Unit
Grants then outstanding shall be deemed satisfied as of the date of the Change
in Control, and (iii) all Performance Equity Grants and Performance Unit Grants
shall be deemed to have been fully earned as of the date of the Change in
Control.
     (b) “Change in Control” means the acquisition or contracting to acquire or
otherwise control beneficial ownership of in excess of thirty-five percent (35%)
of the then outstanding voting securities of the Company by any person,
corporation or other entity and its “affiliates” (as defined in Rule 13d-5(b)(1)
promulgated under the Exchange Act, as amended from time to time) excluding,
however, for purposes of determining such ownership (but not the number of

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shares outstanding) voting securities beneficially owned by members of the Van
Every Family and any trust, custodian or fiduciary account for the benefit of
any one or more members of the Van Every Family. Van Every Family means the
lineal descendants of Salem A. Van Every, Sr. (whether by blood or adoption) and
their spouses.
     Section 16. Amendment and Termination. Without further approval of the
Stockholders, the Board may at any time terminate the Plan, or may amend it from
time to time in such respects as the Board may deem advisable, except that the
Board may not, without approval of the Stockholders, make any amendment which
would (i) require Stockholder approval for Incentive Stock Options granted or to
be granted under the Plan to qualify as incentive stock options within the
meaning of Section 422 of the Code or (ii) require Stockholder approval under
applicable law or the rules of any national securities exchange upon which the
Common Stock is listed at the time such amendment is proposed.
     Section 17. Miscellaneous.
     (a) Tax Withholding. The Company shall have the right to deduct from any
settlement, including the delivery or vesting of shares, made under the Plan any
federal, state or local taxes of any kind required by law to be withheld with
respect to such payments or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
If Common Stock is used to satisfy tax withholding, such stock shall be valued
based on the Fair Market Value when the tax withholding is required to be made.
     (b) No Right To Employment. Neither the adoption of the Plan nor the
granting of any Award hereunder shall confer upon any employee of the Company
any right to continued employment with the Company, nor shall it interfere in
any way with the right of the Company to terminate the employment of any of its
employees at any time, with or without cause.
     (c) Unfunded Plan. The Plan shall be unfunded and the Company shall not be
required to segregate any assets that may at any time be represented by Awards
under the Plan. Any liability of the Company to any person with respect to any
Award under the Plan shall be based solely upon any contractual obligations that
may be effected pursuant to the Plan. No such obligation of the Company shall be
deemed to be secured by any pledge of, or other encumbrance on, any property of
the Company.
     (d) Payments to Trust. The Compensation Committee is authorized to cause to
be established a trust agreement or several trust agreements whereunder the
Company may make payments of amounts due or to become due to Participants in the
Plan.
     (e) Engaging in Competition With Company. In the event a Participant’s
employment with the Company is terminated for any reason whatsoever, and within
18 months after the date thereof such Participant accepts employment with any
competitor of, or otherwise engages in competition with, the Company, the
Compensation Committee, in its sole discretion, may require such Participant to
return to the Company the economic value of any Award which is realized or
obtained (measured at the date of exercise, vesting or payment) by such
Participant

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at any time during the period beginning on that date which is six months prior
to the date of such Participant’s termination of employment with the Company.
     (f) Securities Law Restrictions. No shares of Common Stock shall be issued
under the Plan unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable Federal and state securities
laws. Certificates for shares of Common Stock delivered under the Plan may be
subject to such stop-transfer orders and other restrictions as the Compensation
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law. The Compensation Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions.
     (g) Award Agreement. Each Participant receiving an Award under the Plan
shall enter into an agreement with the Company in a form specified by the
Compensation Committee agreeing to the terms and conditions of the Award and
such related matters as the Compensation Committee shall, in its sole
discretion, determine.
     (h) Costs of Plan. The costs and expenses of administering the Plan shall
be borne by the Company.
     (i) Governing Law. The Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of North
Carolina.

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