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Exhibit 10.1
LANCE, INC.
1999 Annual Corporate Performance Incentive Plan for Officers
Purposes and Introduction
The primary purposes of the 1999 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 1999, 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 1999 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 1999 participants approved by the
Compensation/Stock Option Committee at its February 15, 1999 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 1999 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).
Individual Performance
Each Officer will receive 75% of his or her Incentive Award based on
the Target Incentive Award calculations based on Earnings Per Share.
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.
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Performance Measures and Weightings
The 1999 financial performance measure will be Earnings Per Share.
Specific goals and related payouts are shown below.
1999 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 1999 Annual EPS: $* 50% (if met at minimum)
If minimum is not met, no
payouts will be earned
Target 1999 Annual EPS: $* 100% (if met at target)
Maximum 1999 Annual EPS: $* 150% (if met at maximum)
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Percent of payout will be determined on a straight line basis between
minimum and maximum. There will be no payouts if 1999 Annual EPS is
less than $*.
Extraordinary Performance
For each full $* of Annual EPS in excess of $* Annual EPS, the
percentage of Target Incentive Award payout for each participant will
increase 5%, provided that total payout shall not exceed 200% of
Target Incentive Award. The extraordinary payout of 5% of Target
Incentive Award will be earned only when the full additional $* per
share is earned; extraordinary payouts will be determined on a "stair
step" basis.
The performance measure, 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 1999 and determined the
performance level achieved.
[*Targets not required to be disclosed.]
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Minimum, Target, Maximum and Extraordinary performance levels will be
defined at the beginning of each year for each performance measure.
The following definitions for the terms Extraordinary, Maximum, Target
and Minimum should help Lance set the goals for each year, as well as
evaluate the payouts:
-- Extraordinary: Exceeds excellence; deserves extraordinary
bonus
-- 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
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.
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.
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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.
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 awards omitted for participants as targets not required to be
disclosed.]