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EXHIBIT 10.8
1996 LANCE ANNUAL INCENTIVE PLAN
The primary purposes of the 1996 Lance Annual Incentive Plan are to:
- Foster within the Company a
discipline of setting goals and
measuring performance against them,
- Emphasize a "pay-for performance"
philosophy and clarify the link
between performance and pay,
- Clearly communicate to all
participants the Company's key goals
and strategies, and the rewards they
will receive when these goals are
achieved,
- Encourage teamwork across
departmental lines by measuring
performance that each participant
can influence but not directly
control,
- Broaden each participant's sense of
ownership of all Lance activities
and results, and
- Improve the competitive
opportunities of Lance's pay program
for executives and middle managers.
For 1996, participants will be eligible to
earn incentive awards based on Company per-
formance in Earnings per Share (EPS).
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 1996 plan is approved by
the Compensation/Stock Option 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 based on Attachment
B, 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.
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Plan Year The period over which performance will be
measured is the Company's fiscal year.
Eligibility and Eligibility in the Plan is limited to
Participation employees who are key to Lance's success.
The Compensation/Stock Option Committee
of the Board of Directors will review and
approve participants nominated by the
President and CEO. 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 1996
participants approved by the
Compensation/Stock Option Committee at its
April 19, 1996 meeting.
Target Incentive Each participant will be assigned a "Target
Awards 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 1996 plan year.
These Awards will be reviewed and adjusted
annually by the Compensation/Stock Option
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 performance for the year,
as described below).
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Performance Measures The 1996 financial performance measure will
and Weightings be Earnings Per Share. Specific goals and
related possible payouts are shown below.
1996 Goals and Related Payouts
-----------------------------------------------------
Payout as Percent
Performance Measure Goal of Target Award
- -------------------------------------------------------------------------------------
Financial: Corporate EPS
Threshold * 50% (if both goals met at threshold)
If neither goal met, or if only one goal
met, no payouts will be earned
Target * 100% (if both goals met at target)
Maximum * 150% (if both goals met at maximum)
- -------------------------------------------------------------------------------------
[*Target level goals not required to be
disclosed.]
The matrix for determining payouts for 1996
is Attachment B, showing all levels of
percent of payout.
The performance measure, specific numerical
goals, and role of individual performance
(when and if applicable) 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
1996 and determined the performance level
achieved.
Threshold, Target and Maximum performance
levels will be defined at the beginning of
each year for each performance measure.
The following definitions for the terms
Maximum, Target and Threshold should help
Lance set the goals for each year, as well as
evaluate the payouts:
- Maximum: Excellent; deserves an
above-market bonus
- Target: "Normal" or expected
performance; deserves market
level bonus
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- Threshold: Lowest level of
performance deserving payment above
base salary; deserves below market
bonus
- Below threshold: Deserves no
additional pay beyond base salary
Form and Timing of Final award payments will be made in cash as
Payments soon as practicable after award amounts are
approved by the Compensation/Stock Option
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.
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
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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/Stock
Option Committee.
Governance The Compensation/Stock Option 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
[Target Incentive Awards omitted for participants as target levels not required
to be disclosed.]
Attachment B
1996 Lance Annual Incentive Plan
1996 Performance Matrix
Percent of Target Award Earned
* 0% 100% 125% 150%
0% 75% 100% 125%
0% 50% 75% 100%
0% 0% 0% 0%
*
_________________________
[*Target levels not required to be disclosed.]
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