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EXHIBIT 10.1
LANCE, INC.
2001 ANNUAL PERFORMANCE INCENTIVE PLAN FOR OFFICERS
Purposes and Introduction The primary purposes of the 2001 Annual
Performance Incentive Plan for Officers are
to:
o Motivate behaviors that lead to the
successful achievement of specific
sales, financial and operations
goals that support Lance's stated
business strategy.
o Emphasize link between
participants' performance and
rewards for meeting predetermined,
specific goals.
o Improve the competitiveness of
total cash pay opportunities.
o Help establish performance
orientation at Lance and
communicate to employees that
greater responsibility carries
greater rewards because more pay is
"at risk."
For 2001, participants will be eligible to
earn incentive awards based on Company
performance in Earnings Per Share (EPS),
Lance Co. operating profit, Subsidiary
operating profit and individual performance
objectives.
To achieve the maximum motivational impact,
plan goals and the rewards that will be
received for meeting those goals will be
communicated to participants as soon as
practical after the 2001 Plan is approved by
the Compensation Committee of the Board of
Directors.
Each participant will be assigned a Target
Incentive Award, stated as a percent of Base
Salary. The Target Incentive Award, or a
greater or lesser amount, will be earned at
the end of the plan year based on the
attainment of predetermined goals.
Following year-end, 100% of the awards
earned will be paid to participants in cash.
Plan Year The period over which performance will be
measured is the Company's fiscal year.
Eligibility and Participation Eligibility in the Plan is limited to
Officers of Lance and Presidents of its
Subsidiaries who are key to Lance's success.
The Compensation Committee of the Board of
Directors will review and approve
participants nominated by the President and
CEO.
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Participation in one year does not guarantee
participation in a following year, but
instead will be reevaluated and determined
on an annual basis.
Participants in the Plan may not participate
in any other annual incentive plan (e.g.,
sales incentives, etc.) offered by Lance or
its affiliates. Attachment A includes the
list of 2001 participants approved by the
Compensation Committee at its January 29,
2001 meeting.
Target Incentive Awards Each participant will be assigned a Target
Incentive Award expressed as a percentage of
his or her Base Salary. Participants may be
assigned Target Incentive Awards by position
by salary level or based on other factors as
determined by the President and CEO.
Target Incentive Awards will be reevaluated
at least every other year, if not annually.
If the job duties of a position change
during the year, or Base Salary is increased
significantly, the Target Incentive Award
shall be revised as appropriate.
Attachment A lists the Target Incentive
Award for each participant for the 2001 Plan
Year. These Awards will be reviewed and
adjusted annually by the Compensation
Committee. Target Incentive Awards will be
communicated to each participant as close to
the beginning of the year as practicable, in
writing. Final awards will be calculated by
multiplying each participant's Target
Incentive Award by the appropriate
percentage (based on financial and
individual performance for the year, as
described below).
Individual Performance Each Officer (other than those named in the
last sentence of this paragraph and the
first sentence of the next paragraph) will
receive 75% of his or her Incentive Award
based on Earnings Per Share. The remaining
25% of each Officer's Incentive Award will
be based upon the determination by the
Compensation Committee in its discretion as
to the individual performance of the Officer
in meeting his or her individual goals for
the year. Presidents of Subsidiaries will
receive 10% of his or her Incentive Award
based on Earnings Per Share and 90% of the
Incentive Award will be based on the
operating profit of his or her Subsidiary.
Performance Measures and The 2001 financial performance measure will
Weightings be Earnings Per Share except that for the
Vice President/President of Lance Co. the
financial performance measures will be 10%
Earnings Per Share and 65% Lance Co.
operating profit and for the Vice President
- Sales for Lance Co. the financial
performance measure will be 75% Lance Co.
operating profit. Specific goals and related
payouts are shown below.
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2001 Goals and Related Payouts
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Payout as Percent
Performance Measure Goal of Target Award
-------------------------- --------------------------- ------------------------------
<C
Corporate EPS
Minimum 2001 Annual EPS: $* 50% (if met at minimum)
If minimum is not met, no
payouts will be earned
Target 2001 Annual EPS: $* 100% (if met at target)
Maximum 2001 Annual EPS: $* 200% (if met at maximum)
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Lance Co. Operating Profit
Minimum 2001 Annual Operating 50% (if met at minimum)
Profit: $* million If minimum is not met, no
payouts will be earned
Target 2001 Annual Operating 100% (if met at target)
Profit: $* million
Maximum 2001 Annual Operating 200% (if met at maximum)
Profit: $* million
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Vista Operating Profit
Minimum 2001 Annual Operating 50% (if met at minimum)
Profit: $* million If minimum is not met, no
payouts will be earned
Target 2001 Annual Operating 100% (if met at target)
Profit: $* million
Maximum 2001 Annual Operating 200% (if met at maximum)
Profit: $* million
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Cape Cod Operating Profit
Minimum 2001 Annual Operating 50% (if met at minimum)
Profit: $* million If minimum is not met, no
payouts will be earned
Target 2001 Annual Operating 100% (if met at target)
Profit: $* million
Maximum 2001 Annual Operating 200% (if met at maximum)
Profit: $* million
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Tamming Operating Profit
Minimum 2001 Annual Operating 50% (if met at minimum)
Profit: $* million If minimum is not met, no
payouts will be earned
Target 2001 Annual Operating 100% (if met at target)
Profit: $* million
Maximum 2001 Annual Operating 200% (if met at maximum)
Profit: $* million
[*Targets not required to be disclosed.]
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Percent of payout will be determined on a
straight line basis between minimum and
maximum. There will be no payouts based on
EPS or operating profit unless the minimum
EPS or operating profit is reached.
The performance measures, specific numerical
goals and the role of individual performance
in determining final payouts will be
communicated to each participant at the
beginning of the year. Final performance
awards will be calculated after the
Committee has reviewed the Company's audited
financial statements for 2001 and determined
the performance level achieved.
Minimum, Target and Maximum levels will be
defined at the beginning of each year for
each performance measure.
The following definitions for the terms
Maximum, Target and Minimum should help
Lance set the goals for each year, as well
as evaluate the payouts:
o Maximum: Excellent; deserves an
above-market bonus
o Target: Normal or expected
performance; deserves market level
bonus
o Minimum: Lowest level of
performance deserving payment above
base salary; deserves below market
bonus
o Below minimum: Deserves no
additional pay beyond base salary
Form and Timing of Final award payments will be made in cash
Payments as soon as practicable after award amounts
are approved by the Compensation Committee
of the Board of Directors. All awards will
be rounded to the nearest $100.
Change In Status In the event that a participant
changes positions during the plan year,
whether due to promotion, demotion or
lateral move, at the discretion of the
President and CEO, awards may be prorated
for the year based on the length of time in
each position.
An employee hired into an eligible position
during the year may participate in the plan
for the balance of the year on a pro rata
basis.
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Certain Terminations of In the event a participant voluntarily
Employment terminates employment or is terminated
involuntarily before the end of the year,
any award will be forfeited. In the event of
death, permanent disability, or normal or
early retirement, the award will be paid on
a pro rata basis after the end of the plan
year. Awards otherwise will be calculated on
the same basis as for other participants,
except that any adjustment for individual
performance will be based on performance
prior to the termination of employment.
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
year-to-date, based on the number of days in
the plan year preceding the Change in
Control. Payouts will be made within 30 days
after the relevant transaction has been
completed.
For this purpose, a Change in Control is
defined as when any person, corporation or
other entity and its affiliates (excluding
members of the Van Every Family and any
trust, custodian or fiduciary for the
benefit of any one or more members of the
Van Every Family) acquires or contracts to
acquire or otherwise controls in excess of
35% of the then outstanding equity
securities of the Company. For the purposes
of this plan, the Van Every Family shall
mean the lineal descendants of Salem A. Van
Every, Sr., whether by blood or adoption,
and their spouses.
Withholding The Company shall withhold from award
payments any Federal, foreign, state, or
local income or other taxes required to be
withheld.
Communications Progress reports should be made to
participants quarterly showing the
year-to-date performance results and the
percentage of target awards that would be
earned if results remain at that level for
the entire year.
Executive Officers Notwithstanding any provisions to the
contrary above, participation, Target
Incentive Awards and prorations for
executive officers, including the President
and CEO, 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
goals and final award determination. The
decisions of the Committee shall be
conclusive and binding on all participants.
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ATTACHMENT A
Name Title Award Target
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P. A. Stroup, III President & CEO *% $*
R. G. Tucker Vice President and *% $*
President, Lance Co.
L. R. Gragnani, Jr. Vice President *% $*
- Information Technology/CIO
E. D. Leake Vice President *% $*
- Human Resources
F. I. Lewis Vice President *% $*
- Sales
B. C. Preslar Vice President *% $*
- Finance/CFO
R. S. Carles Secretary/Counsel *% $*
D. R. Perzinski Treasurer *% $*
M. E. Wicklund Controller and *% $*
Assistant Secretary
H. D. Fields President, Vista Bakery, Inc. *% $*
A. C. Cusano President, Cape Cod Potato *% $*
Chip Company, Inc.
J. D. Blair President, Tamming Foods, Ltd. *% $*
[Target awards omitted for participants as targets not required to be
disclosed.]