EX-10.1



 






Exhibit 10.1




LANCE, INC.




2005 Long-Term Incentive Plan for Officers




	 	 	 	 	 
	Purposes and

	 	The primary purposes of the 2005 Long-Term Incentive Plan for Officers are to:
	Introduction
	 	 	 	 
	 
	 	 	 	 
	

	 	•
	 	Align executives’ interests with those of stockholders by linking a
substantial portion of compensation to the Company’s cumulative consolidated
earnings per share (EPS) over three fiscal years and compound annual growth in
the Company’s consolidated net revenues (Net Revenues) over three fiscal years
based on the Company’s 2005-2007 Strategic Plan.
	 
	 	 	 	 
	

	 	•
	 	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, performance measures, Plan goals and
the awards that will be received for meeting those goals will be communicated to
participants as soon as practical after the 2005 Plan is approved by the Stock
Award Committee of the Board of Directors.
	 
	 	 	 	 
	

	 	Each participant will be assigned a Target Incentive, stated as a percent of
Base Salary. The Target Incentive Awards, or a greater or lesser amount, will
be granted after the end of the three fiscal years, 2005 through 2007, based on
the attainment of predetermined goals.
	 
	 	 	 	 
	

	 	Base Salary shall be the annual rate of base compensation for the 2005 fiscal
year which is set no later than April of such fiscal year.
	 
	 	 	 	 
	Plan Years

	 	The period over which performance will be measured is the Company’s three fiscal
years, 2005 through 2007.
	 
	 	 	 	 
	Eligibility and
Participation

	 	Eligibility in the Plan is limited to Executive Officers and managers who are
key to Lance’s success. The Stock Award Committee will review and approve
participants nominated by the President and Chief Executive Officer.
Participation in one year does not guarantee participation in a following year
but will be reevaluated and determined on an annual basis.






 









 






	 	 	 
	 

	 	Attachment A includes the list of 2005 participants approved by the Stock Award
Committee on January 26, 2005.
	 
	 	 
	Target Incentives and
Performance Measures

	 	Each participant will be assigned a Target Incentive expressed as a percentage
of his or her Base Salary. Participants may be assigned to a Performance Tier
by position by salary level or based on other factors as determined by the
President and Chief Executive Officer. If the duties of a participant change
significantly during the Plan Years, the President and Chief Executive Officer,
with the approval of the Stock Award Committee, may change the Target Incentive
for such participant for the remaining portion of the Plan Years.
	 
	 	 
	

	 	Attachment A lists the Target Incentives for each participant for the Plan Years
as determined by the Stock Award Committee. Target Incentives will be
communicated to each participant as close to the beginning of the year as
practicable, in writing. Target Incentives will be calculated by multiplying
each participant’s Base Salary by the appropriate percentages, as described
below.
	 

	 	Target Incentives shall be calculated as follows:






	 	 	 	 	 
	 	 	 	 	Percentage of Base Salary
	 	 	Performance Tier	 	for 2005-2007 Target Incentives
	 
	 	1

2

3
	 	*%

*%

*%






	 	 	 
	 

	 	For 2005-2007, awards will be based 75% on three-year cumulative consolidated
EPS and 25% on three-year compound annual growth in consolidated Net Revenues
since 2004, with each performance measure calculated separately, as follows:






	 	 	 	 	 	 	 
	 	 	 	 	Minimum	 	Target
	 
	 	EPS

Net Revenues
	 	$*0

 *%
	 	$*

 *%






	 	 	 
	 

	 	Minimum EPS performance funds 37.5% of the award and target EPS performance
funds 75% of the award. Minimum Net Revenues performance funds 12.5% of the
award and target Net Revenue funds 25% of the award. Percent of payout will be
determined on a straight line basis between minimum and target and percent of
payout above target is determined on the same

[*Targets not required to be disclosed.]






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	 	straight line basis. A $0.01 EPS increase would increase an award *% and a 0.1%
Net Revenues increase would increase an award *%. Percent of payout will be
rounded to the nearest tenth of a percent. The amount of an award for a
participant shall not exceed four times the Target Incentive for such
participant. There will be no payout unless a minimum performance measure is
reached. For example, achieving EPS of $* would result in an award equal to *%
of Target Incentive and achieving Net Revenues of *% would result in an award
equal to *% of Target Incentive.

[*Targets not required to be disclosed.]
	 
	 	 
	

	 	Final Target Incentive Awards will be calculated and granted after the Stock
Award Committee has reviewed the Company’s audited financial statements for 2005
through 2007 and determined the performance levels achieved.
	 
	 	 
	Awards

	 	Each participant shall receive cash equal to 25% in value of his or her award,
50% in value will be in restricted stock and 25% in value in stock options.
	 
	 	 
	

	 	To determine the number of shares of the Company’s Common Stock issued pursuant
to each stock option and each restricted stock grant, the value of each option
is calculated using the Black-Scholes model of the Company’s compensation
adviser in January 2008 after the end of the Plan Years, subject to certain
adjustments, and each restricted stock grant using the average of the high and
low for the Company’s Common Stock on the date of grant.
	 
	 	 
	

	 	Restricted stock will vest as to 50% on the date of grant and the balance one
year after the date of grant.
	 
	 	 
	

	 	Stock options will be nonqualified, will vest on the date of grant, will have an
exercise price equal to the price used for restricted stock grants and will be
exercisable for five years after the date of grant.
	 
	 	 
	Form and Timing of
Awards

	 	Awards will be made as soon as practicable after performance measures are
calculated and approved by the Stock Award Committee. All awards will be
rounded to the nearest multiple of $100 or 50 shares, as the case may be.
	 
	 	 
	Change In Status

	 	An employee hired into an eligible position during the Plan Years may
participate in the plan for the balance of the Plan Years on a pro rata basis.






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	Certain
Terminations of
Employment

	 	In the event a participant voluntarily terminates employment, or is terminated
involuntarily before the end of the Plan Years, any award will be forfeited. In
the event of death, permanent disability, or normal or early retirement, any
award will be paid on a pro rata basis after the end of the Plan Years.
	 
	 	 
	

	 	In the event a participant voluntarily terminates employment, any award which
has not vested will terminate and be forfeited. In the event a participant is
terminated involuntarily, any award which has not vested will terminate and be
forfeited except that stock options which have vested prior to involuntary
termination may be exercised within 30 days of termination. In the event of
death, stock options shall become fully vested and may be exercised within one
year of death. In the event of permanent disability, stock options shall become
fully vested and remain exercisable in accordance with the terms of the award.
In the event of normal retirement, stock options which have or will vest within
six months of normal retirement will vest and become exercisable in accordance
with the terms of the award and may be exercised within three years of normal
retirement. In the event of death, disability or normal retirement, restricted
stock awards which are not vested will be vested pro rata based on the number of
full months elapsed since the date of the award. In the event of early
retirement, restricted stock awards which are not vested will be vested pro rata
based on the number of full months elapsed since the date of the award. In all
other cases, awards which have not vested upon termination of employment will
terminate and be forfeited.
	 
	 	 
	Change In Control

	 	In the event of a Change in Control, pro rata payouts will be made at the
greater of (1) Target or (2) actual results for the three fiscal years-to-date,
based on the number of days in the Plan Years preceding the Change in Control.
Payouts will be made within 30 days after the relevant transaction has been
completed.
	 
	 	 
	

	 	Also, in the event of a Change in Control, the vesting of restricted stock will
be accelerated to fully vest upon the effective date of a Change in Control.
	 
	 	 
	

	 	“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






4









 






	 	 	 
	

	 	(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 (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; or
	 
	 	 
	

	 	(iii) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for 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
	 
	 	 
	

	 	(iv) The stockholders of the Company approve 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 with
respect to a Participant if that Participant is part of a purchasing group which
consummates the Change in Control transaction. A Participant shall be deemed
“part of a purchasing group” for purposes of the preceding sentence if the
Participant 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.
	 
	 	 
	

	 	“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.
	 
	 	 
	

	 	“Board” means the Board of Directors of the Company.






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	 	“Director” means a member of the Board.
	 
	 	 
	

	 	“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 or (iii) a
trust, estate, custodian and other fiduciary or similar account for an
individual described in clause (i) or (ii) of this Paragraph.
	 
	 	 
	

	 	“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 the Company.
	 
	 	 
	

	 	“Participant” means an employee of the Company who is granted an Award under
this Plan.
	 
	 	 
	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 Stock Award Committee.
	 
	 	 
	Governance

	 	The Stock Award 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 and final award
determination. The Committee retains the discretion to adjust any award due to
extraordinary events such as acquisitions, dispositions, required accounting
adjustments or similar events; anomalies affecting the calculations under a
performance measure or where fairness to participants or the Company require an
adjustment. The decisions of the Committee shall be conclusive and binding on
all participants.






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Attachment A




	 	 	 	 	 	 	 
	 	 	 	 	Award	 	Target
	Name	 	Title	 	Percentage	 	Incentive
	 

	P. A. Stroup, III

	 	President and Chief
Executive Officer
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	H. D. Fields

	 	Vice President and
President, Vista
Bakery, Inc.
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	B. C. Preslar

	 	Vice President
- Finance and Chief
Financial Officer
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	L. R. Gragnani, Jr.

	 	Vice President - Information Technology/CIO
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	E. D. Leake

	 	Vice President - Human Resources
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	F. I. Lewis

	 	Vice President - Sales
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	D. R. Perzinski

	 	Treasurer
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	M. E. Wicklund

	 	Controller and
Assistant Secretary
	 	*%
	 	$*






[*Award targets omitted for participants as targets not required to be disclosed.]