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Exhibit 10
LANCE, INC.
1998 Annual Corporate Performance Incentive Plan for Officers
Purposes and Introduction
The primary purposes of the 1998 Annual Corporate Performance Incentive
Plan for Officers are to:
-- Motivate behaviors that lead to the successful achievement of
specific financial and operations goals that support Lance's
stated business strategy.
-- Emphasize link between participants' performance and rewards
for meeting predetermined, specific goals.
-- Improve the competitiveness of total cash pay opportunities.
-- Help establish performance orientation at Lance and
communicate to employees that greater responsibility carries
greater rewards because more pay is "at risk."
For 1998, participants will be eligible to earn incentive awards based
on Company performance 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 1998 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, 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.
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Eligibility and Participation
Eligibility in the Plan is limited to Officers 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 1998 participants approved by the
Compensation/Stock Option Committee at its February 12, 1998 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 1998 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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Individual Performance
Each Officer will receive 75% of his or her Incentive Award based on
the Target Incentive Award calculations including Earnings Per Share and the
Profitable Revenue Growth Multiplier. The remaining 25% of each Officer's
Incentive Award will be placed in a pool for all of the Officers with the amount
to be received by each Officer based upon the determination by the
Compensation/Stock Option Committee in its discretion as to the individual
performance of the Officer in meeting his or her individual goals for the year.
Thus, each Officer could receive none, a portion or all of the pool composed of
25% of the Incentive Awards of each Officer, based on individual performance.
Performance Measures and Weightings
The 1998 financial performance measure will be Earnings Per Share, plus
a Profitable Revenue Growth Multiplier. Specific goals and related payouts are
shown below.
1998 Goals and Related Payouts
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Payout as Percent
Performance Measure Goal of Target Award
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Financial: Corporate EPS
Minimum 1998 Annual EPS: 50% (if met at minimum)
*
If minimum is not met, no
payouts will be earned
Target 1998 Annual EPS: 100% (if met at target)
*
Maximum 1998 Annual EPS: 150% (if met at maximum)
*
- --------------------------------------------------------------------------------
Percent of payout will be determined on a straight line basis between
minimum and maximum. There will be no payouts if 1998 Annual EPS is less than
$*.
The performance measure, specific numerical goals, and 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 1998 and determined the performance level achieved.
[*Target levels not required to be disclosed.]
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Minimum, 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 Minimum
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
-- Minimum: Lowest level of performance deserving payment above
base salary; deserves below market bonus
-- Below minimum: Deserves no additional pay beyond base salary
Profitable Revenue Growth Multiplier
For 1998, there will be a Profitable Revenue Growth Multiplier which
will increase the amount of Incentive Awards for exceeding the 1998 Incentive
Plan revenue growth with Revenues at or above planned operating profit margin as
follows:
Revenue in excess of Profitable Revenue
1998 Incentive Plan Growth Multiplier
------------------- -----------------
*% 120%
*% 115%
*% 110%
*% 105%
*% 100%
Revenues are defined as net sales plus vending income.
Form and Timing of Payments
Final award payments will be made in cash as 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.
[*Target levels not required to be disclosed.]
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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 Employment
In the event a participant voluntarily 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/Stock Option Committee.
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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.]