Document:

Exhibit 10.1 Lance, Inc. 2005 Long-Term Incentive

 

Exhibit 10.1

LANCE, INC.

2005 Long-Term Incentive Plan for Officers

(As amended through April 26, 2007)

	 	 	 
	Purposes and Introduction

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

	 	•	 	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
Compensation 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 Compensation 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
and Compensation Committees.

	 
	 	 
	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 Compensation 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 Compensation 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	 	 	 	30	%
	 	 	2	 	 	 	45	%
	 	 	3	 	 	 	35	%

	 	 	 
	 

	 	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
	 	$	2.70	 	 	$	2.93	 
	 	 Net Revenues
	 	 	2.6	%	 	 	4.0	%

	 	 	 
	 

	 	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 straight line basis. A $0.01 EPS
increase would increase an award

2

 

	 	 	 
	 

	 	1.6304% and a 0.1% Net Revenues increase would
increase an award 0.8929%. 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
$2.80 would result in an award equal to 53.8% of Target Incentive and achieving
Net Revenues of 3.2% would result in an award equal to 17.9% of Target
Incentive.

	 
	 	 
	 

	 	Final Target Incentive Awards will be calculated and granted after the
Compensation 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
except that the President and Chief Executive Officer will receive cash equal to
100% in value of his award and no restricted stock or 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 closing price 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 Compensation Committee. All awards will be
rounded to the nearest multiple of $100 or two 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.

3

 

	 	 	 
	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 all in
cash.

	 
	 	 
	 

	 	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.

5

 

	 	 	 
	 

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

	 
	 	 
	 

	 	“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 Compensation Committee.

	 
	 	 
	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
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.

6

 

Attachment A

2005 Long-Term Incentive Plan for Officers

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Award	 	Target
	Name	 	Title	 	Percentage	 	Incentive
	 	 	 
	 	 	 	 	 	 	 	 
	David V. Singer	 	President and Chief
	 	 	30	%	 	$	150,000	 
	(Effective May 11, 2005)	 	Executive Officer
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	Rick D. Puckett	 	Executive Vice President,
	 	 	45	%	 	$	157,500	 
	(Effective January 30, 2006)	 	Chief Financial Officer,
	 	 	 	 	 	 	 	 
	 	 	Treasurer and Secretary
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	Glenn A. Patcha	 	Senior Vice
President —
	 	 	*	%	 	$	*	 
	(Effective January 8, 2007)	 	Sales and Marketing
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	Blake W. Thompson	 	Vice
President — Supply
	 	 	45	%	 	$	112,500	 
	(Effective December 19, 2005)	 	Chain

	 	 		 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	H. D. Fields	 	Vice President and
	 	 	*	%	 	$	*	 
	 	 	President, Vista Bakery,
Inc.
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	E. D. Leake	 	Vice President
	 	 	45	%	 	$	83,287	 
	 	 	 — Human Resources
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 
	F. I. Lewis	 	Vice President — Sales
	 	 	45	%	 	$	108,923	 
	 	 	 
	 	 	 	 	 	 	 	 
	M. E. Wicklund	 	Controller and
	 	 	*	%	 	$	*	 
	 	 	Assistant Secretary
	 	 	 	 	 	 	 	 

 

			
	*	 	Amounts are omitted for participants other than the Chief Executive Officer, the Chief Financial
Officer and the other executive officers who were named in the Summary Compensation Table of the
Company’s Proxy Statement for the 2007 Annual Meeting of
Stockholders.Exhibit 10.2 Lance, Inc. 2006 Three-Year Incentive

 

Exhibit 10.2

LANCE, INC.

2006 Three-Year Incentive Plan for Officers

(As amended through April 26, 2007)

	 	 	 
	Purposes and Introduction

	 	The primary purposes of the 2006 Long-Term Incentive Plan for Officers are
to:

	 	•	 	Align executives’ interests with those of stockholders by linking a
substantial portion of compensation to the Company’s average Return on
Capital Employed (ROCE) over three fiscal years based on the Company’s
2006-2008 Operations 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 2006 Plan is
approved by the Compensation 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, 2006
through 2008 (the “Performance Period”), based on the attainment of
predetermined goals.

	 
	 	 
	 

	 	For 2006, participants will be eligible to earn incentive awards based on
the Company’s three-year average ROCE against specific goals as described
below.

	 
	 	 
	 

	 	•       ROCE is calculated for each fiscal year during the Performance
Period as follows:
	 
	 	 
	 

	 	(Net Income + Interest
Expense) x (1 - Tax Rate)
	 

	 	 
	 

	 	Average Equity + Average Net Debt

 

 

	 	 	 
	 

	 	Tax Rate for ROCE shall be the Company’s actual total effective income tax
rate.

	 
	 	 
	 

	 	Average Net
Debt shall be the Company’s average debt less average cash.

	 
	 	 
	 

	 	Average
amounts for ROCE shall be calculated on a 12-month basis.

	 
	 	 
	 

	 	Base Salary shall be the annual rate of base compensation for the 2006
fiscal year which is set no later than April of such fiscal
year.

	 
	 	 
	Performance Period

	 	The period over which performance will be measured is the Company’s three
fiscal years, 2006 through 2008.

	 
	 	 
	Eligibility and Participation

	 	Eligibility in the Plan is limited to Executive Officers and managers who
are key to Lance’s success. The Compensation Committee will review and
approve participants nominated by the President and Chief Executive
Officer. Participation in the 2006 Plan does not guarantee participation
in any subsequent long-term incentive plans, but will be reevaluated and
determined on an annual basis.

	 
	 	 
	 

	 	Attachment A includes the list of 2006 Plan participants approved by the
Compensation Committee.

	 
	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 Performance Period, the
President and Chief Executive Officer, with the approval of the
Compensation Committee, may change the Target Incentive for such
participant for the remaining portion of the Performance Period on a pro
rata basis.

	 
	 

	 	The 2006 through 2008 financial performance measure for the Company as a
whole is shown below. Specific goals and related payouts are also shown
below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Threshold	 	Target	 	Maximum
	 	 Lance, Inc. average ROCE
	 	 	9.5	%	 	 	10.5	%	 	 	12.5	%
	 	 Award Level Funded
	 	 	50	%	 	 	100	%	 	 	400	%

	 	 	 
	 

	 	Percent of payout will be determined on a straight line basis between
Threshold and Target and between Target and Maximum. There will be no
payouts unless the Threshold performance

2

 

	 	 	 
	 

	 	measure is reached.
	 
	 	 
	 

	 	The performance measure will be communicated to each participant as soon as
practicable after it has been established. Final Target Incentive Awards
will be calculated after the Compensation Committee has reviewed the
Company’s audited financial statements for 2006 through 2008 and determined
the performance level achieved.

	 
	 	 
	 

	 	The following definitions for the terms Maximum, Target and Threshold
should help set the goals for the Performance Period, as well as evaluate
the payouts:

	 	•	 	Maximum: Excellent; deserves payout above Target
	 
	 	•	 	Target: Normal or expected performance; deserves Target payout
	 
	 	•	 	Threshold: Lowest level of performance deserving a payout

	 	 	 
	 

	 	Attachment A lists the Target Incentives for each participant for the Plan
Years 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 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 2006-2008 Target Incentives
	 	 	1	 	 	 	30	%
	 	 	2	 	 	 	45	%
	 	 	3	 	 	 	35	%

	 	 	 
	 

	 	Final Target Incentive Awards will
be calculated and granted after the Compensation Committee has reviewed the Company’s audited financial
statements for 2006 through 2008 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, except that the President and Chief Executive Officer will receive
cash equal to 100% in value of his award and no restricted stock or stock
options.

3

 

	 	 	 
	 

	 	The number of shares of the Company’s Common Stock with respect to each
stock option granted pursuant to the 2006 Plan will equal the applicable
dollar value divided by the value of a stock option calculated using the
Black-Scholes or other option valuation model used by the Company as of the
date of grant for financial accounting purposes. Stock options will (i) be
nonqualified, (ii) vest on the date of grant, (iii) have an exercise price
equal to the closing price for the Company’s Common Stock on the date of
grant and (iv) be exercisable for five years after the date of grant,
subject to the provisions below regarding termination of
employment.

	 
	 	 
	 

	 	The number of shares of the Company’s Common Stock with respect to each
restricted stock grant pursuant to the 2006 Plan will equal the applicable
dollar value divided by the closing price for the Company’s Common Stock on
the date of grant. Restricted stock will vest as to 50% of the shares on
the date of grant and the balance one year after the date of grant, subject
to the provisions below regarding termination of employment.

	 
	 	 
	 

	 	For purposes of the 2006 Plan, the date of grant of stock options and
restricted stock will be the date established by the Compensation Committee
after the applicable performance level has been determined.

	 
	 	 
	Form and Timing of
Awards

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

	 
	 	 
	Change In Status

	 	An employee hired into an eligible position during the Performance Period
may participate in the 2006 Plan for the balance of the Performance Period
on a pro rata basis.

	 
	 	 
	Certain
Terminations of
Employment

	 	In the event a participant voluntarily terminates employment (other than
retirement) or is terminated involuntarily before the end of the
Performance Period, the participant shall not receive any award hereunder.
In the event of death, permanent disability or retirement before the end of
the Performance Period, any award will be determined after the end of the
Performance Period based on actual performance and paid out on a pro rata
basis all in cash.

	 
	 

	 	In the event a participant terminates employment after receiving stock
options or restricted stock pursuant to the 2006 Plan, the post-termination
exercise period for stock options and the vesting of

4

 

	 	 	 
	 

	 	restricted stock will
be as follows:

Voluntary termination (other than retirement): (i) stock options cease to
be exercisable as of the date of termination; and (ii) unvested restricted
stock is forfeited as of the date of termination.

Involuntary termination: (i) 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); and (ii) unvested restricted stock
is forfeited as of the date of termination.

Death: (i) 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); and (ii) unvested restricted stock becomes vested pro rata
based on number of full months completed since the date of
grant.

Permanent disability: (i) stock options will remain exercisable through the
original expiration date of the option; and (ii) unvested restricted stock
becomes vested pro rata based on number of full months completed since the
date of grant.

Retirement: (i) stock options will remain exercisable for a period of three
years following retirement (or, if earlier, the original expiration date of
the option); and (ii) unvested restricted stock becomes vested pro rata
based on number of full months completed since the date of
grant.

	 	 	 
	 

	 	For purposes hereof, “retirement” means 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, pro rata payouts will be made all in
cash at the greater of (1) Target Incentive or (2) actual results for the
completed fiscal years preceding the Change in Control, with such pro
ration based on the number of days in the Performance Period 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.

5

 

	 	 	 
	 

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

	 
	 	 
	 

	 	(i) Any Outside Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing twenty-five percent
(25%) or more of the combined voting power of the Company’s then
outstanding securities; or

	 
	 	 
	 

	 	(ii) During any period of two (2) consecutive years (not including any
period prior to the date hereof), individuals who at the beginning of such
period constitute the Board (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

6

 

	 	 	 
	 

	 	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.

	 
	 	 
	 

	 	“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 Compensation
Committee.

	 
	 	 
	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.
The Committee retains

7

 

	 	 	 
	 

	 	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.

8

 

Attachment A

2006 Three-Year Incentive Plan for Officers

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Award	 	Target
	Name	 	Title	 	Percentage	 	Incentive
	 
	 	 	 	 	 	 	 	 	 	 
	David V. Singer
	 	President and Chief	 	 	30	%	 	$	150,000	 
	 
	 	Executive Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	H. D. Fields
	 	Vice President and	 	 	*	%	 	$	*	 
	 
	 	President, Vista	 	 	 	 	 	 	 	 
	 
	 	Bakery, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	R. D. Puckett
	 	Executive Vice President,	 	 	45	%	 	$	157,500	 
	 
	 	Chief Financial Officer	 	 	 	 	 	 	 	 
	 
	 	and Secretary	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Glenn A. Patcha
	 	Senior Vice President —	 	 	*	%	 	$	*	 
	(Effective January 8, 2007)
	 	    Sales and Marketing	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	E. D. Leake
	 	Vice President	 	 	45	%	 	$	90,000	 
	 
	 	— Human Resources	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	F. I. Lewis
	 	Vice President — Sales	 	 	45	%	 	$	114,750	 
	 
	 	 	 	 	 	 	 	 	 	 
	B. W. Thompson
	 	Vice President —	 	 	45	%	 	$	112,500	 
	 
	 	Supply Chain	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	M. E. Wicklund
	 	Controller and	 	 	*	%	 	$	*	 
	 
	 	Assistant Secretary	 	 	 	 	 	 	 	 

 

			
	*	 	Amounts are omitted for participants other than the Chief Executive Officer, the Chief
Financial Officer and the other executive officers who were named in the Summary Compensation
Table of the Company’s Proxy Statement for the 2007 Annual
Meeting of Stockholders.

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