<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)
- --------------------------------------------------------------------------------
(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 19, 1996
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 19, 1996, at 2:00
p.m., Local Time, for the purpose of considering and acting upon the following:
1. The election of three Directors.
2. A proposal to ratify the selection of KPMG Peat Marwick LLP as
independent public accountants for fiscal year 1996.
3. 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 20, 1996
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 22, 1996
<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 19, 1996. This Proxy Statement and accompanying Proxy are being
sent to the stockholders of the Company on or about March 22, 1996.
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 20, 1996, 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 20, 1996 was 30,272,265.
<PAGE> 4
PRINCIPAL STOCKHOLDERS AND HOLDINGS OF MANAGEMENT
At February 1, 1996, 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 3,539,811 (1) 11.7%
Charlotte, NC 28255
Nancy Van Every McLaurin 1,741,274 (2) 5.8%
P. O. Box 21009
Charlotte, NC 28277
Nan Davis Van Every 1,620,109 (3) 5.4%
6001 Pelican Bay Boulevard
Naples, FL 33963
S. Lance Van Every 1,539,177 (4) 5.1%
8913 Winged Bourne
Charlotte, NC 28210
</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 1,249,076 shares and shared voting
power with respect to 130,735 shares and had sole power to dispose with
respect to 1,916,972 shares and shared power to dispose with respect to
813,215 shares. Information with respect to NationsBank is as of December
31, 1995 and is derived from the Schedule 13G dated February 14, 1996 filed
by NationsBank with the Securities and Exchange Commission. Shares held by
the Philip L. Van Every Foundation, for which NationsBank, N. A., 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) Includes 2,500 shares subject to exercisable options, 904,480 shares held
under power of attorney from her mother and 21,694 shares held by Mrs.
McLaurin or her husband as custodian for their children.
(3) 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.
(4) Includes 2,500 shares subject to exercisable options and 46,074 shares held
by S. Lance Van Every either 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., 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, 1996, approximately 12,600,000
shares of the Common Stock of the Company
2
<PAGE> 5
(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.
The following table sets forth, as of February 1, 1996, 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, by Directors
who are not standing for re-election and by the named Executive Officers who
are not also nominees or Directors. Information with respect to the named
Executive Officers, other than Peter M. Duggan, G. R. Melvin and G. K. Smith
and the nominees and Directors, other than E. D. Leake and R. G. Swain who are
not standing for re-election, 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 officers 5,175,613 (1) 17.0% (2)
as a group (16 persons)
Peter M. Duggan 2,023 (3) (4)
E. D. Leake 15,033 (5) (4)
G. R. Melvin 28,278 (6) (4)
G. K. Smith 28,660 (7) (4)
R. G. Swain 14,866 (8) (4)
- ----------------
</TABLE>
(1) Includes 127,350 shares subject to options held by Directors and executive
officers that are currently exercisable. Does not include shares held by
NationsBank, of which James H. Hance, Jr. is Vice Chairman and Chief
Financial Officer, or by Mr. Smith who resigned as an executive officer and
a Director of the Company on January 30, 1996.
(2) Based on the number of shares outstanding plus options held by Directors
and executive officers that are currently exercisable.
(3) Includes 2,000 shares subject to exercisable options.
(4) Less than 1%.
(5) Includes 14,050 shares subject to exercisable options and 78 shares held by
Mr. Leake as custodian for his minor child.
(6) Includes 13,400 shares subject to exercisable options, 1,800 shares held by
Mr. Melvin's wife and 344 shares held by Mr. Melvin as custodian for his
grandchildren.
(7) Includes 19,550 shares subject to exercisable options and 500 shares held
by Mr. Smith's wife.
(8) Includes 10,850 shares subject to exercisable options and 50 shares held by
Mr. Swain as custodian for his minor child.
3
<PAGE> 6
ELECTION OF DIRECTORS
At the meeting three Directors will be elected to serve, subject to the
provisions of the Bylaws, until the Annual Meeting of Stockholders in 1999 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 three nominees
including such substitutes as shall be designated by the Board of Directors.
The first two nominees are listed below, both of whom are currently members
of the Board of Directors. Such nominees were elected to their current terms,
which expire in 1996, at the Annual Meeting of Stockholders held on April 16,
1993.
<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>
J. W. Disher (3) 62 Chairman of the Board of the Company since 24,685 (4) (6)(7)
1968 1991, Chief Executive Officer 1990-1995 and 1,409,292 (5) 4.7%
President 1988-1994; Director of First Union
National Bank of North Carolina
Robert V. Sisk (3)(8) 60 President of Piedmont Engineering Corp., 255,170 (9) (6)
1990 Charlotte, NC (Industrial refrigeration sys-
tems) since 1965
</TABLE>
The third nominee is Gary E. Costley who is being nominated for the seat
vacated by G. K. Smith. Mr. Smith, who resigned as a Director on January 30,
1996, was elected to his current term at the Annual Meeting of Stockholders
held on April 16, 1993.
<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>
Gary E. Costley 52 Dean of Babcock Graduate School of 0 (6)
Management of Wake Forest University since
1995; Executive Vice President of Kellogg
Company, Battle Creek, MI (Cereals) 1985-
1994; Director of Phamacopia Inc., Bush
Brothers Inc. and Miller Foundation, Inc.
</TABLE>
4
<PAGE> 7
The five 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 except Isaiah Tidwell and Richard A.
Zimmerman who were elected at the Annual Meeting of Stockholders held April 21,
1995.
<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>
Paul A. Stroup, III (3) 44 Chief Executive Officer of the Company since 35,249 (10) (6)(7)
1986 1995, President since 1994 and Executive 1,409,292 (5) 4.7%
Vice President 1989-1994
William R. Holland (3) 57 Chairman and Chief Executive Officer of 3,500 (11) (6)
1993 United Dominion Industries Limited,
Charlotte, NC (Diversified manufacturing
company) since 1986; Director of United
Dominion Industries Limited and Morgan
Products Ltd.
Scott C. Lea (3) 64 Private Investor since 1992; Chairman of the 3,500 (11) (6)
1994 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.
Richard A. Zimmerman 63 Private investor since 1993; Chairman of the 4,000 (11) (6)
1995 Board of Hershey Foods Corporation, Hershey,
PA (Candy manufacturer) 1985-1993 and Chief
Executive Officer 1984-1993; Director of
Westvaco Corporation and Eastman Kodak
Company
Isaiah Tidwell 51 Southern/Western Regional Executive of 3,000 (11) (6)
1995 Wachovia Bank of North Carolina, N.A.,
Charlotte, NC since 1995, Southern Regional
Executive 1993-1995 and Regional Vice Presi-
dent since 1990
</TABLE>
The five members of the Board of Directors listed below were elected to
their current terms, which expire in 1998, at the Annual Meeting of
Stockholders held on April 21, 1995.
<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>
Thomas B. Horack 49 Executive Vice President of the Company 32,024 (12) (6)(7)
1980 since 1995 and Vice President 1986-1995 1,409,292 (5) 4.7%
</TABLE>
5
<PAGE> 8
<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>
Alan T. Dickson (3) 64 Chairman of the Board of Ruddick 41,700 (13) (6)
1983 Corporation, Charlotte, NC (Diversified
holding company) since 1994 and President
1968-1994; Director of Ruddick Corporation,
NationsBank Corporation, Sonoco Products
Company and Bassett Furniture Industries,
Inc.
S. Lance Van Every (8) 48 Private investor for more than the past five 1,539,177 (14) 5.1%
1990 years
Nancy Van Every McLaurin (8) 51 Private investor for more than the past five 1,741,274 (15) 5.8%
1995 years
James H. Hance, Jr. 51 Vice Chairman of NationsBank Corporation, 4,500 (16) (6)
1995 Charlotte, NC since 1993 and Chief Financial
Officer since 1988; Director of Caraustar
Industries, Inc., Family Dollar Stores, Inc.,
NationsBank, N.A. and Summit Properties, 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, 1996.
(3) Member of the Executive Committee.
(4) Includes 2,500 shares subject to exercisable options and 700 shares held
by Mr. Disher's wife.
(5) Consists of shares held by the Philip L. Van Every Foundation of which
Messrs. Horack, Disher and Stroup are members of the Board of
Administrators and NationsBank, N.A. is trustee.
(6) Less than 1%.
(7) Based on the number of shares outstanding plus shares subject to options
that are currently exercisable.
(8) S. Lance Van Every and Nancy Van Every McLaurin are cousins and Mr. Sisk's
wife is their cousin.
(9) Includes 2,500 shares subject to exercisable options and 252,612 shares
held by Mr. Sisk's wife.
(10) Includes 26,100 shares subject to exercisable options and 589 shares held
by Mr. Stroup's wife.
(11) Includes 2,500 shares subject to exercisable options.
6
<PAGE> 9
(12) Includes 22,100 shares subject to exercisable options and 160 shares held
by Mr. Horack as custodian for his children.
(13) Includes 2,500 shares subject to exercisable options, 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. are
co-trustees.
(14) Includes either 2,500 shares subject to exercisable options, 46,074 shares
held by S. Lance Van Every either 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.
(15) Includes 2,500 shares subject to exercisable options, 904,480 shares held
under power of attorney from her mother and 21,694 shares held by Mrs.
McLaurin or her husband as custodian for their children.
(16) Includes 2,500 shares subject to exercisable options and does not include
shares held by NationsBank. See Principal Stockholders and Holdings of
Management above.
NationsBank, N.A. 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.
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, except Mr.
Zimmerman and Mr. Hance who attended 71% and 57% of such meetings,
respectively.
The Audit Committee is composed of Robert V. Sisk, T. B. Horack, Scott C.
Lea, William R. Holland, James H. Hance, Jr., Isaiah Tidwell and Nancy Van
Every McLaurin 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.
The Nominating Committee is composed of 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
7
<PAGE> 10
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 J. W. Disher, Chairman of the Committee. The
Nominating Committee met one time 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: Alan T. Dickson, J. W. Disher, James H. Hance, Jr., Robert
V. Sisk, S. Lance Van Every and Richard A. Zimmerman. Mr. Disher, who retired
as Chief Executive Officer in April 1995, was appointed to the
Compensation/Stock Option Committee after his retirement.
COMPENSATION/STOCK OPTION COMMITTEE REPORT
The Compensation/Stock Option Committee of the Board of Directors of the
Company, whose members are named below, provides overall guidance to the
Company's executive compensation process. The Committee is currently composed
of five 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. Those who served during the fiscal
year as 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 1995 and prior years, the Committee has
granted 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
1995, 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, except for Mr. Duggan, 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 in
prior years. The Committee did not grant any stock options to the named
Executive Officers during 1995. Mr. Disher, however, was granted options to
purchase 2,500 shares after his retirement under the 1995 Nonqualified Stock
Option Plan for Non-Employee Directors as described below.
In considering salaries for the 1995 fiscal year, the Committee considered
the Company's overall performance over a period of years. The Committee
considered that the compensation for those serving as 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, significant increases in
responsibility assumed by Messrs. Horack, Smith and Duggan associated with
their promotions and recommended
8
<PAGE> 11
increases in the salary rates of the named Executive Officers, excluding those
serving as the Chief Executive Officer, which aggregated $98,800 and averaged
17.5% for 1995 over 1994.
With respect to those serving as the Chief Executive Officer during the
1995, Mr. Disher and Mr. Stroup, the Committee did not make special note of
performance factors with respect to Mr. Disher or Mr. Stroup but considered the
same factors as it considered for all officers of the Company. Mr. Disher's
salary rate was increased 8.8% for 1995 over 1994 for the portion of the year
he served as Chief Executive Officer. Mr. Stroup's salary rate was increased
13.8% for 1995 over 1994 as he assumed additional responsibilities as Chief
Executive Officer.
The above report is presented by the following members of the
Compensation/Stock Option Committee: Alan T. Dickson, J. W. Disher, James H.
Hance, Jr., S. Lance Van Every and Richard A. Zimmerman.
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 $12,000
plus $600 for each Board meeting attended and $450 for each Committee meeting
attended, except the fee for a Committee meeting held on the same day as a
Board meeting is $300. Mr. Disher received $5,000 to serve as Chairman of the
Board after his retirement as Chief Executive Officer. Non-employee Directors
who serve as a Committee Chairman receive an additional $1,500 per year.
Non-employee Directors are also eligible to receive stock options under the
Company's 1995 Nonqualified Stock Option Plan for Non-Employee Directors under
which each current non-employee director was granted an option to purchase
2,500 shares of Common Stock on May 1, 1995 and will be granted an option to
purchase 1,000 shares of Common Stock on May 1, 1996 at an option price equal
to the fair market value of the Common Stock on such date. Upon election as a
director at the Annual Meeting, Mr. Costley will be granted an option to
purchase 2,500 shares of the Common Stock on May 1, 1996 at an option price
equal to the fair market value of the Common Stock on such date.
9
<PAGE> 12
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 29, 1990 and
ending December 30, 1995 covering the Company's five fiscal years ended
December 28, 1991, December 26, 1992, December 25, 1993, December 31, 1994 and
December 30, 1995.
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
[GRAPH]
<TABLE>
<CAPTION>
THE COMPANY NASDAQ STOCK MARKET PEER GROUP
----------- ------------------- ----------
<S> <C> <C> <C>
1990 100.000 100.000 100.000
1991 109.935 154.954 148.845
1992 122.120 183.855 136.490
1993 104.484 209.157 176.329
1994 102.793 209.685 148.942
1995 98.799 296.302 149.835
</TABLE>
This graph assumes that $100 was invested in the Company's Common Stock on
December 29, 1990, in the NASDAQ Stock Market (U.S. Companies) Index and in the
Peer Group, which consists of Golden Enterprises, Inc., Grist Mill Company and
J&J Snack Foods Corp., and that dividends were reinvested.
10
<PAGE> 13
EXECUTIVE OFFICER COMPENSATION
The table below shows the compensation paid or accrued by the Company, for
the three fiscal years ended December 30, 1995, December 31, 1994 and December
25, 1993 to or for the account of each of those persons who served during the
1995 fiscal year as the Chief Executive Officer and the Company's four other
highest paid executive officers (collectively, the named Executive Officers).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------------- ----------------------
Name and Other Annual Securities All Other
Principal Fiscal Compensation Underlying Compensation
Position Year Salary ($) Bonus ($) ($) (1) Options (#Sh) ($) (2)
- ---------- ----- ---------- --------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
J. W. Disher (3) 1995 120,116 0 -- 2,500 96,191
Chairman of the 1994 285,628 0 -- 4,500 18,514
Board and Chief 1993 281,648 0 -- 0 13,620
Executive Officer
Paul A. Stroup, III (3) 1995 214,933 0 -- 0 9,852
President and 1994 186,020 0 -- 4,500 11,034
Chief Executive Officer 1993 175,620 0 -- 0 10,882
Thomas B. Horack 1995 179,104 0 -- 0 7,099
Executive Vice President 1994 145,482 0 -- 3,000 7,768
1993 136,932 0 -- 0 7,671
G. K. Smith (4) 1995 161,179 0 -- 0 6,393
Executive Vice President 1994 129,786 0 -- 3,000 6,777
1993 119,518 0 -- 0 6,654
Peter M. Duggan (5) 1995 156,181 0 -- 0 35
Senior Vice President 1994 123,071 0 62,892 3,000 0
G. R. Melvin 1995 168,368 0 -- 0 6,726
Vice President 1994 159,024 0 -- 3,000 8,581
1993 153,074 0 -- 0 8,678
</TABLE>
________________
(1) Other than Mr. Duggan, no named Executive Officer has received personal
benefits during the listed years in excess of 10% of annual salary. The
amount for Mr. Duggan in 1994 was for moving expenses in connection with
his employment by the Company.
(2) For fiscal year 1995, includes amounts contributed by the Company under
the Company's Profit-Sharing Retirement Plan as follows: Mr. Disher
$3,855, Mr. Stroup $6,124, Mr. Horack $6,163, Mr. Smith $6,132 and Mr.
Melvin $6,219 and amounts contributed by the Company under the Company's
Employee Stock Purchase Plan as follows: Mr. Disher $200, Mr. Stroup
$1,352, Mr. Horack $26, Mr. Duggan $35, Mr. Smith $104 and Mr. Melvin $52
and amounts contributed by the Company under the Company's Benefit
Restoration Plan as follows: Mr. Stroup $2,376, Mr. Horack $910, Mr.
Smith $157 and Mr. Melvin $455. Also includes $69,586 paid to Mr. Disher
during 1995 pursuant to his Executive Employment Agreement upon retirement
and $22,550 for serving as a director and Chairman of the Board and
attending Board and Committee meetings following his retirement as Chief
Executive Officer in April 1995.
(3) Mr. Disher served as Chief Executive Officer from 1991 until April 1995.
Mr. Stroup has been the Company's Chief Executive Officer since April
1995.
(4) Mr. Smith resigned as an officer and Director of the Company on January
30, 1996.
(5) Mr. Duggan was first elected an executive officer in July 1994.
11
<PAGE> 14
The named Executive Officers, except Mr. Duggan, have each executed an
Executive Employment Agreement with the Company. Mr. Smith's Executive
Employment Agreement was terminated in connection with his resignation as an
officer and Director of 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 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 during the fiscal year ended December 30, 1995.
OPTION GRANTS IN THE 1995 FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-----------------
Potential Realizable
Value at Assumed
% of Total Options/ Annual Rates of Stock
SARs Price Appreciation
Options/SARs Granted to Employees in Exercise or Base Expiration for Option Term
Name Granted (#Sh) Fiscal Year Price ($/Sh) Date 5%($) 10%($)
- ---- ------------- ----------- ------------ ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
J. W. Disher 2,500 (1) (1) $ 17.50 April 30, $27,514 $69,726
2005
- ---------------
</TABLE>
(1) Options for 2,500 shares each were granted to Mr. Disher and nine other
directors under the Lance, Inc. 1995 Nonqualified Stock Option Plan for
Non-Employee Directors on May 1, 1995, which became exercisable six months
after the date of grant. No options were granted to employees during the
1995 fiscal year.
12
<PAGE> 15
The table below shows, on an aggregated basis, each exercise of stock
options or tandem SARs during the fiscal year ended December 30, 1995 by each
of the named Executive Officers and the 1995 fiscal year-end value of
unexercised options and SARs.
AGGREGATED OPTION/SAR EXERCISES IN THE 1995 FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#Sh) Value Realized ($) Unexercisable Unexercisable
- ---- ----------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C>
J. W. Disher 0 0 2,500/0 0/0
P. A. Stroup, III 525 10,369 26,100/1,500 0/0
T. B. Horack 446 8,251 22,100/1,000 0/0
G. K. Smith 1,024 19,725 19,500/1,000 0/0
P. M. Duggan 0 0 2,000/1,000 0/0
G. R. Melvin 0 0 13,400/1,000 0/0
</TABLE>
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 1996 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 1996
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 1997
Annual Meeting of Stockholders, currently scheduled for April 18, 1997, must be
received by the Company no later than November 22, 1996, in order for the
proposal to be included in the proxy statement and form of proxy for the 1997
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
13
<PAGE> 16
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 30,
1995, all Section 16(a) filing requirements applicable to its executive
officers, Directors and greater than 10% beneficial owners were complied with,
except that Nancy Van Every McLaurin failed to include in her Form 3, which was
timely filed in connection with her election to the Board of Directors, shares
held under power of attorney from her mother.
ANNUAL REPORT TO SECURITIES AND EXCHANGE COMMISSION
UPON THE WRITTEN REQUEST OF ANY PERSON WHO AT FEBRUARY 20, 1996 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 30, 1995, 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> 17
APPENDIX A
[LOGO] LANCE, INC. PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING TO BE HELD APRIL 19, 1996
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 19, 1996, 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
PROPOSAL 2. The Board of Directors recommends voting FOR on each item.
1. ELECTION OF DIRECTORS: Nominees are J. W. Disher, Robert V. Sisk and Gary
E. Costley.
[ ] 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. RATIFICATION OF SELECTION OF KPMG PEAT MARWICK LLP AS AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued from other side)
3. 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: ________________________________________, 1996.
______________________________________________________
______________________________________________________
______________________________________________________
(When signing as attorney, executor, administrator,
trustee, guardian, etc., give title as such. If joint
account, each joint owner should sign.)
