<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Lance, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Lance, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LANCE, INC. LOGO]
CHARLOTTE, NORTH CAROLINA
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 21, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Lance,
Inc. (the Company) will be held at the principal office of the Company, 8600
South Boulevard, Charlotte, North Carolina, on Friday, April 21, 1995, at 2:00
p.m., Local Time, for the purpose of considering and acting upon the following:
1. The election of seven Directors.
2. Approval of the 1995 Nonqualified Stock Option Plan for
Non-Employee Directors.
3. A proposal to ratify the selection of KPMG Peat Marwick LLP as
independent public accountants for fiscal year 1995.
4. Any and all other matters that may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on February 21,
1995 as the record date for determining the stockholders entitled to notice
of and to vote at the meeting and any adjournment thereof, and only holders of
Common Stock of the Company of record at such date will be entitled to notice
of or to vote at the meeting.
THE BOARD OF DIRECTORS WILL APPRECIATE THE PROMPT RETURN OF THE ENCLOSED
PROXY, DATED AND SIGNED. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE IT
IS EXERCISED AND WILL NOT BE EXERCISED IF YOU ATTEND THE MEETING AND VOTE IN
PERSON.
By Order of the Board of Directors
JAMES W. HELMS, JR.
Secretary and Treasurer
Charlotte, North Carolina
March 20, 1995
<PAGE> 3
LANCE, INC.
P. O. Box 32368, Charlotte, North Carolina 28232
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of proxies to be used at the Annual Meeting of
Stockholders of Lance, Inc. (the Company) to be held at its principal office,
8600 South Boulevard, Charlotte, North Carolina, at 2:00 p.m., Local Time, on
Friday, April 21, 1995. This Proxy Statement and accompanying Proxy are being
sent to the stockholders of the Company on or about March 20, 1995.
Solicitation other than by mail may be made personally and by telephone
by regularly employed officers and employees of the Company who will not be
additionally compensated therefor. The Company will request brokers, dealers,
banks or voting trustees, or their nominees, who hold stock in their names for
others or hold stock for others who have the right to give voting instructions,
to forward proxy material to their principals and request authority for the
execution of the proxy and will reimburse such institutions for their
reasonable expenses in so doing. In addition, the Company has engaged
Corporate Investor Communications, Inc. (CIC) to deliver proxy materials to,
and solicit proxies from, these institutions. CIC will be reimbursed for its
printing costs, postage and freight charges, and other expenses and be paid a
solicitation fee of $5,500. The total cost of soliciting proxies will be borne
by the Company.
Any proxy delivered in the accompanying form may be revoked by the person
executing the proxy at any time before the authority thereby granted is
exercised by written request addressed to Secretary, Lance, Inc., Box 32368,
Charlotte, North Carolina 28232 or by attending the meeting and electing to
vote in person. Proxies received in such form will be voted as therein set
forth at the meeting or any adjournment thereof.
The only matters to be considered at the meeting, so far as known to the
Board of Directors, are the matters set forth in the Notice of Annual Meeting
of Stockholders and routine matters incidental to the conduct of the meeting.
However, if any other matters should come before the meeting or any adjournment
thereof, it is the intention of the persons named in the accompanying form of
proxy, or their substitutes, to vote said proxy in accordance with their
judgment on such matters.
Stockholders present or represented and entitled to vote on a matter at
the meeting or any adjournment thereof will be entitled to one vote on such
matter for each share of the Common Stock of the Company held by them of record
at the close of business on February 21, 1995, which is the record date for
determining the stockholders entitled to notice of and to vote at such meeting
or any adjournment thereof. Voting on all matters, including the election of
Directors, will be by voice vote or by show of hands, unless the holders of at
least 25% of the shares entitled to vote on such matter demand a vote by ballot
prior to the vote. The number of shares of Common Stock of the Company
outstanding on February 21, 1995 was 30,433,407.
<PAGE> 4
PRINCIPAL STOCKHOLDERS AND HOLDINGS OF MANAGEMENT
At February 1, 1995, the only persons known to the Company to be the
beneficial owners of more than 5% of the Common Stock of the Company were as
follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS OF AND NATURE OF COMMON STOCK
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
------------------------------ -------------------- -------------
<S> <C> <C>
NationsBank Corporation 2,500,021 (1) 8.2%
Charlotte, NC 28255
Nan Davis Van Every 1,625,648 (2) 5.3%
6001 Pelican Bay Boulevard
Naples, FL 33963
S. Lance Van Every 1,532,283 (3) 5.0%
2218 Cortelyou Road
Charlotte, NC 28211
- ----------------
</TABLE>
(1) These shares represent shares held by wholly owned banking subsidiaries of
NationsBank Corporation, a bank holding company (NationsBank).
NationsBank had sole voting power with respect to 2,351,838 shares and
shared voting power with respect to 133,933 shares and had sole power to
dispose with respect to 784,862 shares and shared power to dispose with
respect to 817,913 shares. Information with respect to NationsBank is as
of December 31, 1994 and is derived from the Schedule 13G dated February
3, 1995 as amended by Amendment dated March 9, 1995, filed by NationsBank
with the Securities and Exchange Commission. Shares held by the Philip L.
Van Every Foundation, for which NationsBank, N. A. (Carolinas), a wholly
owned subsidiary of NationsBank, is trustee, are not included inasmuch as
voting and disposition of such shares is directed by the Foundation's
Board of Administrators.
(2) Nan Davis Van Every had sole power to vote and dispose of all of these
shares except for 651,110 shares held in a trust as to which S. Lance Van
Every had the sole power to vote but as to which Mrs. Van Every had the
sole power to dispose.
(3) Includes 41,680 shares held by S. Lance Van Every as custodian or in trust
for his children and grandchild or held by his children who reside in the
same household. Mr. Van Every had sole power to vote and dispose of all
of these shares except for 651,110 shares held in trust as to which he had
the sole power to vote but as to which Nan Davis Van Every had the sole
power to dispose and except for 52,044 shares held as co-trustee with
NationsBank, N.A. (Carolinas), as to which he had shared power to vote and
dispose.
Based on information available to the Company, the Van Every family,
consisting of the descendants of Salem A. Van Every, Sr., deceased, and their
spouses, owned beneficially on February 1, 1995, approximately 12,600,000
shares of the Common Stock of the Company (approximately 41% of the outstanding
shares). Of such shares, approximately 800,000 shares are held by fiduciaries
having the sole power to vote and dispose. Members of the Van Every family may
own or may have disposed of shares in nominee or other accounts, information as
to the amounts of which may not be available to the Company. There are
approximately 70 Van Every family stockholders, including stockholders who are
minors.
2
<PAGE> 5
The following table sets forth, as of February 1, 1995, information as to
the beneficial ownership of the Company's $.83-1/3 par value Common Stock by
all Directors and Executive Officers of the Company as a group and by the named
Executive Officers who are not also nominees or Directors. Information with
respect to the named Executive Officers, other than G. R. Melvin, and the
nominees and Directors, other than A. F. Sloan and Victoria S. Sutton, is under
Election of Directors below.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
AND NATURE OF COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
------------------------------------ -------------------- -------------
<S> <C> <C>
Directors and executive 3,525,166 (1) 11.5% (2)
officers as a group (18 persons)
G. R. Melvin 27,317 (3) (4)
A. F. Sloan 66,270 (5) (4)
Victoria S. Sutton 1,064 (4)
</TABLE>
_______________
(1) Includes 162,435 shares subject to options held by Executive Officers that
are currently exercisable.
(2) Based on the number of shares outstanding plus options held by Executive
Officers that are currently exercisable.
(3) Includes 12,400 shares subject to exercisable options, 1,800 shares held
by Mr. Melvin's wife and 326 shares held by Mr. Melvin as custodian for
his grandchildren.
(4) Less than 1%.
(5) Includes 3,876 shares held by Mr. Sloan's wife, but does not include
1,409,292 shares held by the Philip L. Van Every Foundation of which Mr.
Sloan is a member of the Board of Administrators.
ELECTION OF DIRECTORS
At the meeting seven Directors will be elected. Of such Directors, five
will be elected to serve, subject to the provisions of the Bylaws, until the
Annual Meeting of Stockholders in 1998 and until their successors are duly
elected and qualified. The sixth and seventh Directors will be elected to
serve, subject to the provisions of the Bylaws, until the Annual Meeting of
Stockholders in 1997 and until their successors are duly elected and qualified.
Directors are elected by a plurality of the votes cast by the holders of the
shares entitled to vote at a meeting at which a quorum is present. Provided a
quorum is present, abstentions and shares not voted are not taken into account
in determining a plurality.
It is the intention of the persons named in the accompanying proxy to
vote all proxies solicited by the Board of Directors FOR all the nominees
indicated below unless authority to vote for the nominees or any individual
nominee is withheld by a stockholder in such stockholder's proxy. If for any
reason any nominee shall not become a candidate for election as a Director at
the meeting, an event not now anticipated, the proxies will be voted for seven
nominees including such substitutes as shall be designated by the Board of
Directors.
3
<PAGE> 6
The first three nominees are listed below, all of whom are currently
members of the Board of Directors. Such nominees were elected to their current
terms, which expire in 1995, at the Annual Meeting of Stockholders held on
April 17, 1992.
<TABLE>
<CAPTION>
SHARES OFPERCENT OF
NAME AND INFORMATION ABOUT COMMON COMMON STOCK
DIRECTOR SINCE (1) AGE NOMINEES AND DIRECTORS STOCK OWNED (2) OUTSTANDING
- ------------------ --- ---------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Thomas B. Horack (3) 48 Executive Vice President of 32,786(4) (5)(6)
1980 the Company since 1995 and 1,409,292(7) 4.6%
Vice President 1986-1995
Alan T. Dickson 63 Chairman of the Board of 39,200(8) (5)
1983 Ruddick Corporation,
Charlotte, NC (Diversified
holding company) since 1994
and President 1968-1994;
Director of Ruddick Cor-
poration, NationsBank
Corporation, Royal Group,
Inc., Sonoco Products
Company and Bassett
Furniture Industries, Inc.
S. Lance Van Every (9) 47 Private investor for more 1,532,283(10) 5.0%
1990 than the past five years
</TABLE>
The fourth and fifth nominees are Nancy Van Every McLaurin and James H.
Hance, Jr. Mrs. McLaurin and Mr. Hance are being nominated for the seats being
vacated by G. R. Melvin and Victoria S. Sutton, who are not standing for
re-election. Mr. Melvin and Ms. Sutton, whose terms expire in 1995, were
elected to their current terms at the Annual Meeting of Stockholders held on
April 17, 1992.
<TABLE>
<S> <C> <C> <C> <C>
Nancy Van Every McLaurin 50 Private investor for more 831,552(11) 2.7%
(9) than the past five years
James H. Hance, Jr. 50 Vice Chairman of NationsBank 0(12) (5)
Corporation, Charlotte, NC
since 1993 and Chief
Financial Officer since
1988; Director of Nat-
ionsBank, N.A. (Carolinas),
American City Business Jour-
nals, Inc. and Summit
Properties, Inc.
</TABLE>
The sixth nominee is Richard A. Zimmerman. Mr. Zimmerman is being
nominated to serve until 1997 to fill the vacancy created by the death of
Stephen H. Van Every, Jr. Mr. Zimmerman was elected to the Board of Directors
on January 17, 1995 to serve until the Annual Meeting of Stockholders to be
held April 21, 1995. Mr. Zimmerman is being nominated to serve the remainder
of Mr. Van Every's term which expires in 1997.
<TABLE>
<S> <C> <C> <C> <C>
Richard A. Zimmerman 62 Private investor since 1993; 0(13) (5)
1995 Chairman of the Board of
Hershey Foods Corporation,
Hershey, PA (Candy manu-
facturer) 1985-1993 and
Chief Executive Officer
1984-1993; Director of
Westvaco Corporation and
Eastman Kodak Company
</TABLE>
4
<PAGE> 7
The seventh nominee is Isaiah Tidwell who is being nominated to serve
until 1997 to fill the vacancy created by the resignation of A. F. Sloan,
upon his retirement from the Board, effective April 21, 1995. Mr. Tidwell is
being nominated to serve the remainder of Mr. Sloan's term, which expires in
1997.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAME AND INFORMATION ABOUT COMMON COMMON STOCK
DIRECTOR SINCE (1) AGE NOMINEES AND DIRECTORS STOCK OWNED (2) OUTSTANDING
- ------------------ --- ---------------------- --------------- ------------
<S> <C> <C> <C> <C>
Isaiah Tidwell 50 Southern Regional Executive 0 (5)
of Wachovia Bank of North
Carolina, N.A., Charlotte,
NC since 1993 and Regional
Vice President since 1990
</TABLE>
The six members of the Board of Directors listed below were elected to
their current terms, which expire in 1996, at the Annual Meeting of
Stockholders held on April 16, 1993.
<TABLE>
<S> <C> <C> <C> <C>
J. W. Disher (3) 61 Chairman of the Board of the 43,133(14) (5)(6)
1968 Company since 1991, Chief 1,409,292(7) 4.6%
Executive Officer since 1990
and President 1988-1994;
Director of First Union
National Bank of North
Carolina
William B. Meacham (3) 53 Vice President of the 20,030(15) (5)(6)
1986 Company since 1986 1,409,292(7) 4.6%
Gerald K. Smith (3)(16) 44 Executive Vice President of 31,067(17) (5)(6)
1986 the Company since 1995, Vice
President 1993-1995 and
Assistant Vice President
1981-1993
Robert V. Sisk (9) 59 President of Piedmont 257,670(18) (5)
1990 Engineering Corp., Char-
lotte, NC (Industrial
refrigeration systems) since
1965
R. Gerald Swain (3) 58 Vice President of the 14,747(19) (5)(6)
1992 Company since 1991, As-
sistant Vice President 1989-
1991 and District Sales Man-
ager 1969-1989
Earl D. Leake (3) 43 Vice President of the 13,934(20) (5)(6)
1993 Company since 1995 and
Treasurer and Assistant
Secretary 1988-1995
</TABLE>
The three members of the Board of Directors listed below were elected to
their current terms, which expire in 1997, at the Annual Meeting of
Stockholders held April 15, 1994.
<TABLE>
<S> <C> <C> <C> <C>
Paul A. Stroup, III (3) 43 President of the Company 34,373(21) (5)(6)
1986 since 1994 and Executive 1,409,292(7) 4.6%
Vice President 1989-1994;
President of Midwest Biscuit
Company (Subsidiary of the
Company) 1985-1989;
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
SHARES OFPERCENT OF
NAME AND INFORMATION ABOUT COMMON COMMON STOCK
DIRECTOR SINCE (1) AGE NOMINEES AND DIRECTORS STOCK OWNED (2) OUTSTANDING
- ------------------ --- ---------------------- -------------- ------------------
<S> <C> <C> <C> <C>
William R. Holland 56 Chairman and Chief Executive 1,000 (5)
1993 Officer of United Dominion
Industries Limited,
Charlotte, NC (Manufactur-
ing, engineering and
construction) since 1986;
Director of United Dominion
Industries Limited and Mor-
gan Products Ltd.
Scott C. Lea 63 Private investor since 1992; 1,000 (5)
1994 Chairman of the Board of
Rexham, Inc. (Manufacturer
of packaging and coated and
laminated products) 1989-
1991; President, Chief
Executive Officer and
Director of Rexham 1974-
1989; Director of Speizman
Industries, Inc.
- ----------------
</TABLE>
(1) The information about the Directors was furnished to the Company by the
Directors.
(2) All shares are owned directly and with sole voting and dispositive power
except as otherwise noted. Common Stock ownership information is as of
February 1, 1995.
(3) Member of the Executive Committee.
(4) Includes 23,335 shares subject to exercisable options and 156 shares held
by Mr. Horack as custodian for his children.
(5) Less than 1%.
(6) Based on the number of shares outstanding plus shares subject to options
that are currently exercisable.
(7) Consists of shares held by the Philip L. Van Every Foundation of which
Messrs. Horack, Disher, Meacham, Stroup and A. F. Sloan are members of the
Board of Administrators and NationsBank, N.A. (Carolinas) is trustee.
(8) Consists of 32,000 shares held by The Dickson Foundation, Inc. of which
Mr. Dickson is a member of the Board of Directors and its investment
committee and 7,200 shares held by a trust for which Mr. Dickson, his
brother and NationsBank, N. A. (Carolinas) are co-trustees.
(9) S. Lance Van Every and Nancy Van Every McLaurin are cousins and Mr. Sisk's
wife is their cousin.
(10) Includes 41,680 shares either held by S. Lance Van Every as custodian or
in trust for his children and grandchild or held by his children who
reside in the same household, 651,110 shares held in trust as to which Mr.
Van Every has the sole power to vote but no power to dispose and 52,044
shares held in trust as to which Mr. Van Every has shared power to vote
and dispose.
(11) Includes 18,952 shares held by Mrs. McLaurin or her husband as custodian
for their children.
6
<PAGE> 9
(12) Does not include 2,000 shares acquired by Mr. Hance subsequent to February
1, 1995 and does not include shares held by NationsBank. See Principal
Stockholders and Holdings of Management above.
(13) Does not include 1,500 shares acquired by Mr. Zimmerman subsequent to
February 1, 1995.
(14) Includes 21,000 shares subject to exercisable options and 700 shares held
by Mr. Disher's wife.
(15) Includes 17,200 shares subject to exercisable options and 1,032 shares
held by Mr. Meacham as custodian for his minor child.
(16) Mr. Smith is A. F. Sloan's nephew.
(17) Includes 23,050 shares subject to exercisable options and 500 shares held
by Mr. Smith's wife.
(18) Includes 257,612 shares held by Mr. Sisk's wife.
(19) Includes 11,350 shares subject to exercisable options, 3,099 shares held
jointly with his wife and 47 shares held by Mr. Swain as custodian for his
minor child.
(20) Includes 13,250 shares subject to exercisable options and 74 shares held
by Mr. Leake as custodian for his minor child.
(21) Includes 26,700 shares subject to exercisable options and 589 shares held
by Mr. Stroup's wife.
NationsBank, N.A. (Carolinas) acts as trustee of one of the Company's
Profit Sharing Trusts, for which the Company pays the bank's standard fees and
provides a line of credit to the Company which the Company has not used. Also,
a subsidiary of NationsBank provides securities brokerage services to the
Company for which the Company pays NationsBank's standard fees. Mr. Dickson is
a director of NationsBank and Mr. Hance is the Vice Chairman and Chief
Financial Officer of NationsBank and a director of NationsBank, N.A.
(Carolinas).
First Union National Bank of North Carolina acts as trustee of the other
of the Company's Profit Sharing Trusts and the Company's 401(k) Retirement
Savings Plan, for which the Company pays the bank's standard fees. Mr. Disher
is a director of First Union National Bank of North Carolina.
Subsidiaries of Ruddick Corporation purchase products from the Company in
the ordinary course of business at the Company's standard prices. Mr. Dickson
is the Chairman of the Board and Chief Executive Officer of Ruddick
Corporation.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met seven times during the fiscal year. Each
director attended 75% or more of the total number of meetings of the Board of
Directors and meetings of all Committees on which he or she served.
The Audit Committee is composed of Victoria S. Sutton, Paul A. Stroup,
III, William R. Holland, Scott C. Lea and Richard A. Zimmerman and is
responsible for recommending independent auditors for the Company, reviewing
the Company's financial statements, audit report, internal financial controls
and internal audit procedures and approving services to be performed by the
Company's independent auditors. The Audit Committee met four times during the
fiscal year.
7
<PAGE> 10
The Nominating Committee is composed of A. F. Sloan, J. W. Disher, Paul A.
Stroup, III, Alan T. Dickson, S. Lance Van Every and Robert V. Sisk. Its
functions include the screening and recommendation of candidates for election
to the Board of Directors of the Company. The Committee will consider nominees
recommended by stockholders, which nominations may be made in writing and
directed to A. F. Sloan, Chairman of the Committee. The Nominating Committee
met three times during the fiscal year.
Information with respect to the Compensation/Stock Option Committee is
provided below.
COMPENSATION/STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year, the following served on the Compensation/Stock
Option Committee: W. F. Dowd, Jr., Alan T. Dickson, A. F. Sloan, S. Lance Van
Every, Robert V. Sisk and Stephen H. Van Every, Jr. Mr. Dowd served on the
Committee until his term on the Board of Directors expired on April 15, 1994.
Mr. Dickson was elected to fill the position vacated by Mr. Dowd. Stephen H.
Van Every, Jr. served on the Committee until his death on August 27, 1994. Mr.
Sloan retired as Chairman and Chief Executive Officer of the Company in 1990.
COMPENSATION/STOCK OPTION COMMITTEE REPORT
The Compensation/Stock Option Committee of the Board of Directors of the
Company, whose members are named above, provides overall guidance to the
Company's executive compensation process. The Committee is currently composed
of four members of the Board of Directors. The Committee met twice during the
fiscal year. The Committee's recommendations regarding the salary of the Chief
Executive Officer and the other officers of the Company are subject to approval
by the Board, except for decisions about grants under the Company's Stock
Option Plans, which are made solely by the Committee in order for the grants to
satisfy tax and securities law requirements. The Chief Executive Officer and
the four other highest paid executive officers are collectively referred to as
the named Executive Officers.
The Committee's compensation policies are designed to fairly compensate
the officers of the Company for the effective exercise of their
responsibilities, their management of the business functions for which they are
responsible, the motivation of those officers and employees reporting to them,
their extended period of service to the Company and their dedication and
diligence in carrying out their responsibilities. Virtually all of the
officers' annual compensation consists of a base salary. The salary is
designed to reward the officers for the performance of their responsibilities
and their long-term commitment to the Company. Over the years, virtually all
of the officers of the Company have been employees who have devoted their
entire business careers to the Company. In 1994 and prior years, the Committee
has granted modest increases to the officers based on recommendations from the
Chief Executive Officer who has consulted with other officers of the Company.
From time to time, the Committee has made adjustments to such recommendations.
In 1994, the Board accepted and approved the recommendations of the Committee.
The Committee also takes into account the fact that each of the named Executive
Officers has entered into an Executive Employment Agreement described below
which provides for supplemental retirement benefits and that the Committee
granted stock options to the officers of the Company during 1994 and in prior
years, as described below with respect to the named Executive Officers.
In considering salaries for the 1994 fiscal year, the Committee considered
the Company's overall performance over a period of years. The Committee
considered that the compensation for the Chief Executive Officer and the named
Executive Officers is generally less than that of the officers of companies of
comparable size, revenues and profits operating in the area of the Company's
headquarters in North Carolina. The Committee considered, among other things,
continued increases in the Company's revenues, the lack of growth in the
Company's net income in recent years and increased competitiveness in the snack
foods industry and recommended modest increases in the salaries of the
8
<PAGE> 11
named Executive Officers, excluding the Chief Executive Officer, which averaged
4.9% for 1994 over 1993.
With respect to the Chief Executive Officer, J. W. Disher, the Committee
did not make special note of performance factors with respect to Mr. Disher but
considered the same factors as it considered for all officers of the Company.
Mr. Disher's salary rate was not increased for 1994 over 1993.
The above report is presented by the following members of the
Compensation/Stock Option Committee: Alan T. Dickson, Robert V. Sisk, A. F.
Sloan and S. Lance Van Every.
STOCKHOLDER RETURN PERFORMANCE GRAPH
Included below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's Common Stock against
the cumulative total return of the NASDAQ Stock Market (U.S. Companies) Index
and the Company's Peer Group for the period commencing December 31, 1989 and
ending December 31, 1994 covering the Company's five fiscal years ended
December 29, 1990, December 28, 1991, December 26, 1992, December 25, 1993, and
December 31, 1994.
The Company has selected a Peer Group consisting of the three
publicly-traded companies named below, which are in the snack foods industry.
Virtually all of the Company's direct competitors and peers are privately-held
companies or subsidiaries or divisions of larger publicly-held companies so
that the available members of the Peer Group are limited.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, NASDAQ STOCK MARKET INDEX AND PEER GROUP
This graph assumes that $100 was invested in the Company's Common Stock on
December 31, 1989, in the NASDAQ Stock Market (U.S. Companies) Index and in
the Peer Group, which consists of Golden Enterprises, Inc., Grist Mill Company
and J&J Snack Foods Corp., and that dividends were reinvested.
9
<PAGE> 12
(Graph)
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
The Company 100.000 89.553 98.638 109.572 93.748 92.230
------- ------ ------- ------- ------- ------
NASDAQ Stock Market 100.000 84.315 131.522 156.002 176.425 176.916
------- ------ ------- ------- ------- -------
Peer Group 100.000 68.066 101.043 92.656 119.701 101.116
------- ------ ------- ------- ------- -------
</TABLE>
<PAGE> 13
EXECUTIVE OFFICER COMPENSATION
The table below shows the compensation paid or accrued by the Company, for
the three fiscal years ended December 31, 1994, December 25, 1993 and December
26, 1992, to or for the account of each of the Chief Executive Officer and the
Company's four other highest paid executive officers (collectively, the named
Executive Officers).
SUMMARY COMPENSATION TABLE
<TABLE>
<S> <C> <C>
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------------- ----------------------
NAME AND OTHER ANNUAL SECURITIES ALL OTHER
PRINCIPAL FISCAL COMPENSATION UNDERLYING COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) ($) (1) OPTIONS (#SH) ($) (2)
- ----------- ------ ---------- --------- ------------------ ------------- ------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
J. W. Disher 1994 285,628 0 --- 4,500 18,514
Chairman of the 1993 281,648 0 --- 0 13,620
Board and Chief 1992 273,122 0 --- 6,000 14,760
Executive Officer
Paul A. Stroup, III 1994 186,020 0 --- 4,500 11,034
President 1993 175,620 0 --- 0 10,882
1992 168,255 0 28,628 5,100 11,602
G. R. Melvin 1994 159,024 0 --- 3,000 8,581
Vice President 1993 153,074 0 --- 0 8,678
1992 148,861 0 --- 3,600 9,439
William B. Meacham 1994 142,452 0 --- 3,000 7,646
Vice President 1993 137,608 0 --- 0 7,738
1992 130,326 0 --- 3,600 8,200
Thomas B. Horack 1994 145,482 0 --- 3,000 7,768
Vice President 1993 136,932 0 --- 0 7,671
1992 129,863 0 --- 3,600 8,142
</TABLE>
________________
(1) Other than Mr. Stroup, no named Executive Officer has received personal
benefits during the listed years in excess of 10% of annual salary. The
amount for Mr. Stroup in 1992 represents the incremental cost to the
Company for certain personal benefits, including $25,200 for club
initiation and dues.
(2) For fiscal year 1994, includes amounts contributed by the Company under
the Company's Profit-Sharing Retirement Plan as follows: J. W. Disher
$8,082, P. A. Stroup, III $7,927, G. R. Melvin $8,051, W. B. Meacham
$7,516 and T. B. Horack $7,742 and amounts contributed by the Company
under the Company's Employee Stock Purchase Plan as follows: J. W.
Disher $520, P. A. Stroup, III $1,144 , G. R. Melvin $52 , W. B.
Meacham $130 and T. B. Horack $26 and amounts contributed by the Company
under the Company's Benefit Restoration Plan as follows: J. W. Disher
$9,912, P. A. Stroup, III $1,963 and G. R. Melvin $478.
The named Executive Officers have each executed an Executive Employment
Agreement with the Company. The provisions of all these agreements are
substantially identical. Each agreement provides for the continued full-time
employment of the executive by the Company in the same or another executive
position until retirement (which includes termination after a Change of Control
of the Company, as described below, or termination due to disability) or death,
whereupon the Company will pay the executive or his beneficiary supplemental
retirement or death benefits, subject to certain
10
<PAGE> 14
conditions of forfeiture. The executive, however, may be terminated by the
Company for cause (as defined in the agreement). The maximum amount payable
upon retirement is five times the annual salary being received by the executive
at the time of retirement. Payment is made in thirteen installments each year
over the period between the date of actual retirement and the earlier of (1)
the end of the Company's fiscal year in which the executive reaches the age of
75, or (2) the end of the fiscal year in which the fifteenth anniversary date
of the executive's termination of employment occurs. Lesser amounts are
payable in the event of death. The agreement also provides that as long as the
executive is entitled to payments under the agreement he will not become an
employee, director or consultant to a corporation, partnership or have any
ownership interest therein, which competes with the Company. The executive
loses all rights to payment under the agreement if he voluntarily quits the
Company or is terminated for cause. The agreement also provides for the
executive to provide ongoing services to the Company after his retirement,
generally of a consulting nature. The Company will pay the executive a
reasonable per diem amount and will reimburse him for his costs of providing
such services. The Company has entered into a Trust Agreement with First Union
National Bank of North Carolina to create the Lance, Inc. Key Executive
Employee Benefit Plan Trust (the Trust) which provides that, in the event of a
Change of Control of the Company, the Company will fund the Trust with cash in
an amount sufficient to pay the full amount payable under each Executive
Employment Agreement. A Change of Control for the purposes of the Executive
Employment Agreements and the Trust means the acquisition or contracting for
the acquisition or otherwise controlling in excess of 35% of the voting
securities of the Company by any person excluding voting securities
beneficially owned by members of the Van Every Family which consists of the
descendants of Salem A. Van Every, Sr., deceased, and their spouses.
The table below shows the individual grants to the named Executive
Officers of stock options and tandem stock appreciation rights (SARs) during
the fiscal year ended December 31, 1994.
OPTION/SAR GRANTS IN THE 1994 FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
% OF TOTAL OPTIONS/SARS GRANT DATE
OPTIONS/SARS GRANTED TO EMPLOYEES IN EXERCISE OR BASE EXPIRATION PRESENT
NAME GRANTED (#SH) (1) FISCAL YEAR PRICE ($/SH) DATE VALUE ($)(2)
- ---- ------------------- ----------------------- ---------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
J. W. Disher 4,500 5.2 19.625 April 15, 2004 21,240
P. A. Stroup, III 4,500 5.2 19.625 April 15, 2004 21,240
G. R. Melvin 3,000 3.5 19.625 April 15, 2004 14,160
W. B. Meacham 3,000 3.5 19.625 April 15, 2004 14,160
T. B. Horack 3,000 3.5 19.625 April 15, 2004 14,160
</TABLE>
_______________
(1) The options become exercisable in three equal annual installments
beginning six months after the date of grant, except that Mr. Disher's
options become exercisable in one installment six months after the date
of grant, and each option is granted with a tandem SAR for the same
number of shares and becomes fully exercisable in the event of a change
in control of the Company at any time occurring more than six months
after the date of grant.
(2) Based on the Black-Scholes option pricing model adapted for use in
valuing executive stock options. The estimated values under the model
are based on arbitrary assumptions as follows: options exercised at the
end of the ten-year term, stock price volatility at .207, annual dividend
yield of 4.06% and a risk-free interest rate of 7.12%. No downward
adjustments are made to the resulting grant-date option values to account
for potential forfeitures or non-transferability of the options. The
actual value of the options depends upon the upon the actual performance
of the Company's stock during the applicable period.
11
<PAGE> 15
The table below shows, on an aggregated basis, each exercise of stock
options or tandem SARs during the fiscal year ended December 31, 1994 by each
of the named Executive Officers and the 1994 fiscal year-end value of
unexercised options and SARs.
AGGREGATED OPTION/SAR EXERCISES IN THE 1994 FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END (#) AT FY-END ($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#SH) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------------- ------------------ ------------------- ------------------------
<S> <C> <C> <C> <C>
J. W. Disher 6,000 25,872 21,000/0 0/0
P. A. Stroup, III 0 0 26,700/3,000 10,515/0
G. R. Melvin 0 0 12,400/3,000 0/0
W. B. Meacham 0 0 17,200/2,000 897/0
T. B. Horack 2,265 15,995 23,335/2,000 10,946/0
</TABLE>
DIRECTOR COMPENSATION
Directors who are employees of the Company or its subsidiaries receive no
additional compensation for serving as directors. Directors who are not
employees of the Company or its subsidiaries receive an annual fee of $10,000
plus $500 for each Board meeting attended and $500 for each Committee meeting
attended, except the fee for a Committee meeting held on the same day as a
Board meeting is $250.
APPROVAL OF 1995 NONQUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On February 21, 1995, the Board of Directors adopted the 1995
Nonqualified Stock Option Plan for Non-Employee Directors, subject to approval
by the stockholders at the 1995 Annual Meeting. The 1995 Director Plan is
intended to provide Directors who are not employees of the Company with a sense
of proprietorship and personal involvement in the development and financial
success of the Company and to encourage such Directors to remain with and to
devote their best efforts to the Company.
The Board of Directors has reserved 100,000 shares of Common Stock
(approximately 0.3% of the shares of Common Stock outstanding as of February
21, 1995) for issuance upon exercise of the options granted under the 1995
Director Plan. This number, as well as the number of shares issuable upon
exercise of an option, is subject to adjustment in the event of stock dividends
and splits, recapitalizations and similar transactions.
The 1995 Director Plan is administered by the Board of Directors.
However, no discretion concerning decisions regarding the 1995 Director Plan
will be afforded to a person who is not a "disinterested person" as defined in
the rules and regulations under Section 16 of the Exchange Act. In the event
the Board of Directors is precluded from exercising such discretion, it may
delegate its authority to exercise such discretion to a person or committee of
persons, each of whom is a "disinterested person."
The only persons eligible to receive options under the 1995 Director Plan
are Directors of the Company who are not regular employees of the Company on
the date of grant of the option. Under the 1995 Director Plan, each Director
who is eligible to receive options under the Plan will automatically be granted
an option to purchase 2,500 shares of Common Stock on the first May 1 after
approval of the 1995 Director Plan by the stockholders or election to the Board
of Directors and an option to purchase 1,000 shares of Common Stock on each May
1 thereafter, each subject to
12
<PAGE> 16
adjustment in the event of stock dividends and splits, recapitalizations and
similar transactions. If there are not sufficient shares reserved for such
grants, the eligible Directors will receive an option for a pro rata number of
the remaining shares reserved for grant. There currently are six Directors,
including Messrs. Dickson, Van Every and Zimmerman, nominees for election as
Directors, that would be eligible to participate under the 1995 Director Plan.
If elected by the stockholders to the Board of Directors, Mrs. McLaurin and
Messrs. Hance and Tidwell, nominees for election as Directors, would also be
eligible to participate under the 1995 Director Plan.
The exercise price of options granted under the 1995 Director Plan will
be the fair market value of the Common Stock on the date of grant. The fair
market value of a share of Common Stock of the Company (calculated as the
average of the high and low sales prices) on February 21, 1995 was $17.125.
An option granted under the 1995 Director Plan is not exercisable unless
the optionee remains available to serve as a Director of the Company until the
first anniversary of the date of grant, except that the initial option shall be
exercisable after six months. On or after such first anniversary or six
months, as the case may be, any or all of such option may be exercised until
the expiration or termination of the option. Upon the exercise of an option or
portion thereof, the exercise price must be paid in full in cash.
Options granted under the 1995 Director Plan are not transferable except
by will or intestacy. An optionee's rights under all outstanding options will
terminate three months after his or her termination as a Director, unless the
termination is because of death or disability, in which case the options will
be exercisable for one year after such termination. Subject to earlier
termination as previously discussed, all options granted under the 1995
Director Plan shall expire ten years from the date of grant.
The Board of Directors may terminate, suspend or amend the 1995 Director
Plan at any time except no termination, suspension or amendment can adversely
affect the rights of an optionee as to any outstanding option(s) without the
optionee's consent unless the amendment is necessary to preserve or provide
exemptions from the applicability of Section 16(b) of the Exchange Act to the
grant, lapse, disposition, cancellation or exercise of options. In addition,
no amendment regarding the determination of the optionees, the date of grant,
the number of options granted to an optionee and the requirement that no
discretion concerning decisions regarding the 1995 Director Plan be afforded to
a person who is not a "disinterested person" may be made more than once every
six months unless the amendment is necessary to comply with changes in the Code
or the rules and regulations under the Code.
For federal income tax purposes, the optionee will realize no taxable
income when the option is granted. Upon the exercise of an option granted
under the 1995 Director Plan, the amount by which the fair market value of the
shares purchased pursuant to such exercise exceeds the option price will be
treated as compensation income received by the optionee. The amount of
compensation income recognized by the optionee is deductible by the Company in
the year the income is recognized. Upon the subsequent disposition of shares
received upon the exercise of an option, generally any amount realized in
excess of the optionee's basis will be taxed as a capital gain and any amount
realized which is less than the optionee's basis will be treated as a capital
loss.
The Company intends to register the shares issuable pursuant to the 1995
Director Plan under the Securities Act of 1933.
No options granted under the 1995 Director Plan may be exercised unless
and until the 1995 Director Plan is approved by the holders of a plurality of
the shares of Common Stock voting on the proposal at the Annual Meeting of
Stockholders when a quorum is present. Abstentions and shares not voted are
not counted in determining a plurality. If such approval is not obtained the
1995 Director
13
<PAGE> 17
Plan shall be void. The Board of Directors recommends a vote FOR approval of
the 1995 Director Plan and proxies solicited by the Board of Directors will be
so voted unless stockholders specify otherwise.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected KPMG Peat Marwick LLP as independent
public accountants to audit the financial statements of the Company and its
subsidiaries for the 1995 fiscal year. This selection is being presented to
the stockholders for their ratification or rejection at this Annual Meeting.
KPMG Peat Marwick LLP served as the Company's independent certified
public accountants to audit the financial statements of the Company and its
subsidiaries beginning with the 1991 fiscal year. Representatives of KPMG Peat
Marwick LLP are expected to be present at the Annual Meeting of Stockholders
and will have an opportunity to make a statement if they desire to do so. The
representatives of KPMG Peat Marwick LLP are expected to be available to
respond to appropriate questions.
The Board of Directors recommends a vote FOR the ratification of the
selection of KPMG Peat Marwick LLP as independent public accountants to audit
the financial statements of the Company and its subsidiaries for the 1995
fiscal year, and proxies solicited by the Board of Directors will be so voted
unless stockholders specify a different choice.
If the stockholders do not ratify the selection of KPMG Peat Marwick LLP,
the selection of independent public accountants will be reconsidered by the
Board of Directors.
STOCKHOLDER PROPOSALS
Any proposal that a stockholder intends to present for action at the 1996
Annual Meeting of Stockholders, currently scheduled for April 19, 1996, must be
received by the Company no later than November 18, 1995, in order for the
proposal to be included in the proxy statement and form of proxy for the 1996
Annual Meeting of Stockholders. The proposal should be sent to Secretary,
Lance, Inc., Box 32368, Charlotte, North Carolina 28232.
COMPLIANCE WITH SECTION 16(a) OF SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and Executive Officers and persons who own more than 10% of
the Company's Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of the Common
Stock. Officers, Directors and greater than 10% stockholders are required to
furnish the Company with copies of all such reports they file. To the
Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 1994, all Section 16(a)
filing requirements applicable to its Executive Officers, Directors and greater
than 10% beneficial owners were complied with, except that Scott C. Lea did not
file a Form 3 report of his holdings of Lance Common Stock within ten days of
his election to the Board of Directors on April 15, 1994.
ANNUAL REPORT TO SECURITIES AND EXCHANGE COMMISSION
UPON THE WRITTEN REQUEST OF ANY PERSON WHO AT FEBRUARY 21, 1995 WAS A
RECORD OR BENEFICIAL STOCKHOLDER OF THE COMPANY, THE COMPANY WILL PROVIDE
WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994, INCLUDING
THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES. THE COMPANY'S
ANNUAL REPORT TO STOCKHOLDERS HAS BEEN MAILED WITH THIS PROXY STATEMENT TO EACH
STOCKHOLDER. REQUESTS FOR COPIES OF THE ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION SHOULD BE ADDRESSED TO SECRETARY, LANCE, INC., BOX 32368,
CHARLOTTE, NORTH CAROLINA 28232.
14
<PAGE> 18
[LOGO] LANCE, INC. APPENDIX A
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING TO BE HELD APRIL 21, 1995
The undersigned hereby appoints J. W. Disher and Paul A. Stroup, III, and
each or either of them, proxies, with full power of substitution, with the
powers the undersigned would possess if personally present, to vote, as
designated below, all shares of the $.83-1/3 par value Common Stock of the
undersigned in Lance, Inc. at the Annual Meeting of Stockholders to be held on
April 21, 1995, and at any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED HEREIN AND, UNLESS OTHERWISE
DIRECTED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS AND FOR
PROPOSALS 2 AND 3. The Board of Directors recommends voting FOR on each item.
1. ELECTION OF DIRECTORS: Nominees are Thomas B. Horack, Alan T. Dickson,
S. Lance Van Every, Nancy Van Every McLaurin, James H. Hance, Jr.,
Richard A. Zimmerman and Isaiah Tidwell.
/ / FOR all listed nominees (except do not vote for the
nominee(s) whose name(s) I have written below)
/ / WITHHOLD AUTHORITY to vote for the listed nominees
2. APPROVAL OF THE 1995 NONQUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE
DIRECTORS
/ / FOR / / AGAINST / / ABSTAIN
3. RATIFICATION OF SELECTION OF KPMG PEAT MARWICK LLP AS AUDITORS
/ / FOR / / AGAINST / / ABSTAIN
(Continued from other side)
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of Notice of Annual Meeting and accompanying Proxy Statement is
hereby acknowledged.
PLEASE DATE AND SIGN EXACTLY AS PRINTED BELOW AND RETURN PROMPTLY IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
Dated:________________________, 1995.
_____________________________________
_____________________________________
_____________________________________
<PAGE> 19
(When signing as attorney, executor, administrator,
trustee, guardian, etc., give title as such. If
joint account, each joint owner should sign.)
