<PAGE> 1
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Filed Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
FOR THE QUARTERLY (THIRTEEN WEEK) PERIOD ENDED COMMISSION FILE NUMBER 0-398
MARCH 25, 2000
LANCE, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-0292920
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
8600 South Boulevard
P.O. Box 32368
Charlotte, North Carolina 28232
(Address of principal executive offices) (Zip Code)
704-554-1421
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----------------- -----------------
The number of shares outstanding of the Registrant's $0.83-1/3 par value
Common Stock, its only outstanding class of Common Stock, as of April 18,
2000, was 28,950,547 shares.
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<PAGE> 2
LANCE, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - March 25, 2000 (Unaudited)
and December 25, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income (Unaudited) - Thirteen Weeks
Ended March 25, 2000 and March 27, 1999 . . . . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Stockholders' Equity and Comprehensive
Income (Unaudited) - Thirteen Weeks Ended March 25, 2000 and March 27, 1999 . . . 5
Condensed Consolidated Statements of Cash Flows (Unaudited) - Thirteen
Weeks Ended March 25, 2000 and March 27, 1999 . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . 12
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
2
<PAGE> 3
LANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 25, 2000 (UNAUDITED) AND DECEMBER 25, 1999
(In thousands, except share data)
<TABLE>
<CAPTION>
March 25, 2000 December 25, 1999
-------------- -----------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,807 $ 13,303
Accounts receivable (less allowance for doubtful accounts) 52,310 49,106
Inventories 23,831 26,244
Deferred income tax benefit 4,748 4,487
Prepaid income taxes -- 888
Prepaid expenses and other 3,180 3,010
--------- ---------
Total current assets 86,876 97,038
Property, plant & equipment, net 178,939 183,782
Goodwill, net 34,942 35,451
Other intangible assets, net 10,824 11,064
Other assets 2,657 3,327
--------- ---------
TOTAL ASSETS $ 314,238 $ 330,662
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 354 $ 354
Accounts payable 11,188 15,597
Accrued income taxes 2,451 --
Accrued liabilities 21,851 23,929
--------- ---------
Total current liabilities 35,844 39,880
--------- ---------
OTHER LIABILITIES AND DEFERRED CREDITS
Long-term debt 67,291 70,852
Deferred income taxes 21,151 21,167
Accrued postretirement health care costs 11,235 11,410
Accrual for insurance claims 3,805 3,808
Supplemental retirement benefits 2,694 2,755
Commitments and contingent liabilities -- --
--------- ---------
Total other liabilities and deferred credits 106,176 109,992
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $0.83 1/3 par value (authorized: 75,000,000
shares; 28,960,322 and 29,950,897 shares outstanding at
March 25, 2000 and December 25, 1999) 24,134 24,959
Preferred stock, $1.00 par value (authorized: 5,000,000 shares;
0 shares outstanding at March 25, 2000 and December 25, 1999) -- --
Additional paid-in capital 1,322 2,552
Unamortized portion of restricted stock awards (629) (799)
Retained earnings 147,423 154,063
Accumulated other comprehensive income (32) 15
--------- ---------
Total stockholders' equity 172,218 180,790
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 314,238 $ 330,662
========= =========
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
3
<PAGE> 4
LANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THIRTEEN WEEKS ENDED MARCH 25, 2000 AND MARCH 27, 1999
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
Thirteen Thirteen
Weeks Ended Weeks Ended
March 25, 2000 March 27, 1999
-------------- --------------
<S> <C> <C>
NET SALES AND OTHER OPERATING REVENUE $ 135,630 $ 120,789
------------ -----------
COST OF SALES AND OPERATING EXPENSES
Cost of sales (Note 3) 64,015 54,024
Selling, marketing and delivery 54,927 51,036
General and administrative 6,071 5,362
Provisions for employees' retirement plans 1,172 1,238
Amortization of goodwill and other intangibles 467 --
------------ -----------
Total costs and expenses 126,652 111,660
------------ -----------
OPERATING PROFIT 8,978 9,129
Interest income (expense), net (1,125) 158
Other income, net 1,319 93
------------ -----------
INCOME BEFORE INCOME TAXES 9,172 9,380
Income taxes 3,428 3,506
------------ -----------
NET INCOME $ 5,744 $ 5,874
============ ===========
EARNINGS PER SHARE
Basic $ 0.20 0.20
Diluted $ 0.20 0.20
Weighted average shares outstanding - basic 29,173,000 29,940,000
Weighted average shares outstanding - diluted 29,197,000 30,030,000
CASH DIVIDENDS PER SHARE $ 0.16 $ 0.24
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
4
<PAGE> 5
LANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE
INCOME (UNAUDITED) FOR THE THIRTEEN WEEKS ENDED MARCH 25, 2000 AND
MARCH 27, 1999
(In thousands, except share data)
<TABLE>
<CAPTION>
Unamortized
Portion of Accumulated
Additional Restricted Other
Common Paid-in Stock Retained Comprehensive
Shares Stock Capital Awards Earnings Income Total
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 26, 1998 29,989,210 $ 24,991 $ 1,981 $ (502) $ 159,524 $ 90 $ 186,084
------------------------------------------------------------------------------------------
Comprehensive income:
Net income -- -- -- -- 5,874 -- 5,874
Net change in unrealized gains on
marketable securities -- -- -- -- -- (90) (90)
-----------
Total comprehensive income -- -- -- -- -- -- 5,784
-----------
Cash dividends paid to stockholders -- -- -- -- (7,134) -- (7,134)
Issuance of restricted stock, net
of cancellations 65,300 54 935 (981) -- -- 8
Stock options exercised 3,487 3 57 -- -- -- 60
Purchases of common stock (100,000) (84) -- -- (1,412) -- (1,496)
------------------------------------------------------------------------------------------
BALANCE, MARCH 27, 1999 29,957,997 $ 24,964 $ 2,973 $(1,483) $ 156,852 $ -- $ 183,306
==========================================================================================
BALANCE, DECEMBER 25, 1999 29,950,897 $ 24,959 $ 2,552 $ (799) $ 154,063 $ 15 $ 180,790
------------------------------------------------------------------------------------------
Comprehensive income:
Net income -- -- -- -- 5,744 -- 5,744
Foreign currency translation
adjustment -- -- -- -- -- (47) (47)
-------------
Total comprehensive income -- -- -- -- -- -- 5,697
-------------
Cash dividends paid to stockholders -- -- -- -- (4,666) -- (4,666)
Cancellations of restricted stock (14,575) (12) (91) 170 -- -- 67
Purchases of common stock (976,000) (813) (1,139) -- (7,718) -- (9,670)
------------------------------------------------------------------------------------------
BALANCE, MARCH 25, 2000 28,960,322 $ 24,134 $ 1,322 $ (629) $ 147,423 $(32) $ 172,218
==========================================================================================
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
5
<PAGE> 6
LANCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THIRTEEN WEEKS ENDED MARCH 25, 2000 AND MARCH 27, 1999
(In thousands)
<TABLE>
<CAPTION>
Thirteen Weeks Thirteen Weeks
Ended Ended
March 25, 2000 March 27, 1999
-------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 5,744 $ 5,874
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 7,262 6,510
Gain on sale of property, net (1,337) (29)
Deferred income taxes (249) 79
Other, net -- 9
Changes in operating assets and liabilities (3,682) (10,218)
-------- --------
Net cash flow provided by operating activities 7,738 2,225
-------- --------
INVESTING ACTIVITIES
Purchases of property and equipment (2,821) (5,276)
Proceeds from sale of property and equipment 2,062 78
Purchases of marketable securities -- (556)
Sales of marketable securities -- 7,733
Maturities of marketable securities -- 1,886
Other, net -- 63
-------- --------
Net cash (used in) provided by investing activities (759) 3,928
-------- --------
FINANCING ACTIVITIES
Dividends paid (4,666) (7,134)
Issuance (purchase) of common stock, net (9,670) (1,436)
Repayments of debt (92) --
Repayments under revolving credit facilities, net (3,000) --
-------- --------
Net cash used in financing activities (17,428) (8,570)
-------- --------
Effect of exchange rate changes on cash (47) --
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (10,496) (2,417)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 13,303 7,856
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,807 $ 5,439
======== ========
SUPPLEMENTAL INFORMATION
Cash paid for income taxes $ 276 $ 226
Cash paid for interest $ 444 $ --
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
6
<PAGE> 7
LANCE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The accompanying unaudited consolidated financial statements of Lance,
Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of the Company, these financial statements
reflect all adjustments (consisting of only normal, recurring accruals)
necessary to present fairly the consolidated financial position of the
Company and its subsidiaries as of March 25, 2000 and December 25, 1999,
and the consolidated statements of income, stockholders' equity and
comprehensive income and cash flows for the thirteen weeks ended March
25, 2000 and March 27, 1999.
2. The consolidated results of operations for the thirteen weeks ended
March 25, 2000 are not necessarily indicative of the results to be
expected for a full year.
3. The Company's primary raw materials include peanuts, peanut butter,
flour and other grain products. To reduce the impact of volatility in
raw material prices, the Company enters into various forward purchase
agreements and certain derivative financial instruments. The Company has
only limited involvement with derivative financial instruments and does
not use them for trading purposes. Amounts payable or receivable under
the agreements, which qualify as hedges, are recognized as deferred
gains or losses and included in other assets or other liabilities. These
deferred amounts are charged or credited to cost of sales as the related
raw materials costs are charged to operations.
4. The Company utilizes the dollar value last-in, first-out (LIFO) method
of determining the cost of substantially all of its inventories. Because
inventory calculations under the LIFO method are based on annual
determinations, the determination of interim LIFO valuations requires
that estimates be made of year-end costs and levels of inventories. The
possibility of variation between estimated year-end costs and levels of
LIFO inventories and the actual year-end amounts may materially affect
the results of operations as finally determined for the full year.
Inventories consist of (in thousands):
<TABLE>
<CAPTION>
March 25, December 25,
2000 1999
--------- -----------
<S> <C> <C>
Finished goods $ 17,323 $ 20,415
Raw materials 4,156 3,962
Supplies, etc 6,825 6,391
-------- --------
Total inventories at FIFO cost 28,304 30,768
Less: Adjustments to reduce FIFO cost to LIFO cost (4,473) (4,524)
-------- --------
Total inventories $ 23,831 $ 26,244
======== ========
</TABLE>
7
<PAGE> 8
5. The following table provides a reconciliation of the denominator used in
computing basic earnings per share to the denominator used in computing
diluted earnings per share for the thirteen weeks ended March 25, 2000
and the thirteen weeks ended March 27, 1999 (there were no reconciling
items for the numerator amounts of basic and diluted earnings per
share):
<TABLE>
<CAPTION>
March 25, 2000 March 27, 1999
-------------- --------------
<S> <C> <C>
Weighted average number of common shares used in
computing basic earnings per share 29,173,000 29,940,000
Effect of dilutive stock options 24,000 90,000
---------- ----------
Weighted average number of common shares and
dilutive potential common stock used in computing
diluted earnings per share 29,197,000 30,030,000
========== ==========
Stock options excluded from the above reconciliation
because they are anti-dilutive 648,000 749,000
========== ==========
</TABLE>
6. During the thirteen weeks ended March 25, 2000, other comprehensive
income consisted of a $47 thousand translation adjustment related to the
translation of the financial statements of foreign subsidiaries.
7. Effective April 2, 1999, the Company acquired Tamming Foods Ltd.
("Tamming"), headquartered in Waterloo, Ontario, Canada. Tamming
manufactures high quality sugar wafer products that are sold under
private label in the United States, Canada and Mexico.
Effective May 24, 1999, the Company acquired Cape Cod Potato Chip
Company Inc. ("Cape Cod"), headquartered in Hyannis, Massachusetts. Cape
Cod manufactures premium, kettle-cooked potato chips and other salty
snacks, which are distributed throughout the U.S., Canada, Spain and
England under the Cape Cod brand.
The acquisitions described above were accounted for using the purchase
method of accounting for business combinations as of the date of the
acquisitions. The aggregate purchase price of the acquisitions was $53.6
million, which includes the costs of acquisition. The terms of the
Tamming acquisition also provide for additional consideration to be paid
if Tamming's earnings exceed certain targeted levels through the year
2002. The maximum amount of remaining contingent consideration is
Canadian dollars $15.6 million (U.S. $10.6 million at March 25, 2000).
The additional consideration is payable in cash in 2004 and will result
in additional goodwill if earned. The Company has not recorded this
liability as of March 25, 2000 as the outcome of the contingency is not
determinable beyond a reasonable doubt.
8
<PAGE> 9
LANCE, INC AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED MARCH 25, 2000 COMPARED TO THIRTEEN WEEKS ENDED MARCH 27,
1999
<TABLE>
<CAPTION>
Thirteen weeks ended
March 25, March 27,
($ In Thousands) 2000 1999 Difference
------------------------ ---------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 135,630 100.0% $120,789 100.0% 14,841 12.3%
Cost of sales 64,015 47.2% 54,024 44.7% (9,991) (18.5%)
--------- ------- -------- ------- ------- -------
Gross margin 71,615 52.8% 66,765 55.3% 4,850 7.3%
--------- ------- -------- ------- ------- -------
Selling, marketing, and delivery expenses 54,927 40.5% 51,036 42.3% (3,891) (7.6%)
General and administrative expenses 6,071 4.5% 5,362 4.4% (709) (13.2%)
Provision for employees' retirement plans 1,172 0.9% 1,238 1.0% 66 5.3%
Amortization of goodwill and intangibles 467 0.3% -- -- (467) N/A
--------- ------- -------- ------- ------- -------
Total operating expenses 62,637 46.2% 57,636 47.7% (5,001) (8.7%)
--------- ------- -------- ------- ------- -------
Operating profit 8,978 6.6% 9,129 7.6% (151) (1.7%)
Other income, net 1,319 0.9% 93 0.1% 1,226 1,318.3%
Interest income (expense), net (1,125) (0.8%) 158 0.1% (1,283) (812.0%)
Income taxes 3,428 2.5% 3,506 2.9% 78 2.2%
--------- ------- -------- ------- ------- -------
Net income 5,744 4.2% $ 5,874 4.9% (130) (2.2%)
========= ======= ======== ======= ======= =======
</TABLE>
Revenues increased $14.8 million, or 12.3%, due primarily to the acquisitions of
Tamming and Cape Cod in the second quarter of 1999. Revenues in pre-acquisition
business increased approximately 1% with growth in private label sales.
Gross margin as a percent of revenues for the quarter decreased by 2.5
percentage points from 1999 to 52.8% due to the lower gross margins of the
recently acquired businesses. Gross margin as a percent of revenues from the
pre-acquisition business was unchanged from the prior year at 55.3% .
The $3.9 million increase in selling, marketing and delivery costs were a result
of the addition of the acquired businesses as well as severance costs related to
organizational realignment. General and administrative expenses increased $0.7
million due primarily to the addition of the acquired businesses. Amortization
of goodwill and intangibles results from the recent acquisitions of Tamming and
Cape Cod. The provision for profit sharing retirement plan was $0.1 million
lower than prior year due to the profitability-based formula for these
contributions.
Other income includes gains and losses on dispositions of fixed assets and
marketable securities. The $1.2 million increase in other income was due to a
gain on the disposition of property, net of other asset related losses. Net
interest expense amounted to $1.1 million in 2000 compared to $0.2 million of
net interest income in 1999 due to reductions in cash and marketable securities
and indebtedness incurred to fund capital expenditures and acquisitions.
The effective income tax rate remained consistent from 1999 at 37.4%.
LIQUIDITY AND CAPITAL RESOURCES
Traditionally, the Company met its liquidity needs for capital expenditures,
cash dividends and stock repurchases through cash from operations and
investments. In addition, the Company has historically maintained relatively
high liquidity and no outstanding debt. During the second quarter of 1999, the
Company changed its capital structure by liquidating its marketable securities
and incurring indebtedness available under new credit agreements, primarily to
fund the acquisitions of Tamming and Cape Cod.
9
<PAGE> 10
LANCE, INC AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Cash flow from operations for the thirteen weeks ended March 25, 2000 totaled
$7.7 million. Working capital (other than cash and marketable securities)
increased to $48.2 million from $43.9 million at December 25, 1999, due to
timing differences in the various components of working capital.
Cash used in investing activities for the thirteen weeks ended March 25, 2000
totaled $0.8 million. Purchases of property totaled $2.8 million with the
largest expenditures being plant equipment and sales displays. Proceeds from the
sale of property and equipment totaled $2.1 million. During the thirteen weeks
ended March 27, 1999, the Company liquidated its investments in marketable
securities providing approximately $9.0 million of cash to be used for property
purchases and the second quarter acquisitions.
Cash flow provided by financing activities for the thirteen weeks ended March
25, 2000 totaled $17.4 million. Cash dividends of $0.16 per share for the first
quarter amounted to $4.7 million, as compared to a $0.24 per share dividend in
1999. On January 14, 2000, the Board of Directors authorized the repurchase of
1.5 million shares. During the first quarter, the Company repurchased 976,000
shares for $9.7 million.
As of March 25, 2000, cash and cash equivalents totaled $2.8 million and total
debt outstanding was $67.6 million. Additional amounts available for borrowings
under all credit facilities are $25.9 million. The Company has met all financial
covenants contained in the financing agreements. Available cash, cash from
operations and available credit under the credit facilities are expected to be
sufficient to meet normal operating requirements for the foreseeable future.
MARKET RISK
The principal market risks to which the Company is exposed that may adversely
impact results of operations and financial position are changes in certain raw
material prices, interest rates and foreign exchange rates. The Company has no
market risk sensitive instruments held for trading purposes.
Raw materials used by the Company are exposed to the impact of changing
commodity prices, particularly the price of wheat used for flour. Accordingly,
the Company enters into commodity future and option contracts to manage
fluctuations in prices of anticipated purchases of certain raw materials. The
Company's Board-approved policy is to use such commodity derivative financial
instruments only to the extent necessary to manage these exposures. The Company
does not use these financial instruments for trading purposes.
Since the Company uses commodity price-sensitive instruments to hedge a certain
portion of its existing and anticipated transactions, any loss in value for
these instruments generally would be offset by increases in the value for the
hedged transactions. At March 25, 2000, the Company had no open positions on
futures contracts .
The Company's long-term debt obligations incur interest at floating rates, based
on changes in U.S. Dollar LIBOR and Canadian Dollar LIBOR. Therefore, the
Company has an exposure to changes in these interest rates. On July 22, 1999,
the Board of Directors authorized interest rate exchange agreements to more
effectively manage the effects of changing interest rates. However, no such
agreements have been entered into. At March 25, 2000, the Company's long term
debt totaled $67.6 million, with interest rates ranging from 6.05% to 7.51%,
with a weighted average interest rate of 6.34%. A 10% increase in U.S. LIBOR and
Canadian LIBOR would have increased interest expense for the thirteen weeks
ended March 25, 2000 by $0.1 million.
10
<PAGE> 11
LANCE, INC AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Through the operations of Tamming, the Company has an exposure to foreign
exchange rate fluctuations, primarily between the U.S. and Canadian dollars.
Foreign exchange rate fluctuations have limited impact on the earnings of the
Company as a majority of the sales of Tamming are denominated in U.S. dollars.
The indebtedness used to finance the acquisition of Tamming is denominated in
Canadian dollars and serves as an effective hedge of the net asset investment in
Tamming. A 10% devaluation of the Canadian dollar would result in an immaterial
change in the Company's net asset investment in Tamming.
FORWARD-LOOKING STATEMENTS
This discussion contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results could
differ materially from those forward-looking statements. Factors that may cause
actual results to differ materially include price competition, industry
consolidation, raw material costs, effectiveness of sales and marketing
activities and operation of a leveraged business, as described in Exhibit 99.1
to this Form 10-Q.
11
<PAGE> 12
LANCE, INC AND SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The principal market risks to which the Company is exposed that may adversely
impact results of operations and financial position include changes in certain
raw material prices, interest rates and foreign exchange rates. Quantitative and
qualitative disclosures about these market risks are included under "Market
Risks" in Item 2 above, Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Bylaws of Lance, Inc., as amended through January
11, 2000
10.1 Lance, Inc. 2000 Annual Corporate Performance
Incentive Plan for Officers
10.2 Agreement dated March 6, 2000 between Lance, Inc.
and Dominic J. Sidari
10.3 Agreement dated March 6, 2000 between Lance, Inc.
and Gregory M. Venner
27 Financial Data Schedule (Filed in electronic format
only. Pursuant to Rule 402 of Regulation S-T, this
schedule shall not be deemed filed for purposes of
Section 11 of the Securities Act of 1933 or Section
18 of the Securities Exchange Act of 1934)
99.1 Cautionary Statement under Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the thirteen weeks
ended March 25, 2000.
Items 1 through 5 are not applicable and have been omitted.
12
<PAGE> 13
LANCE, INC AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.
LANCE, INC.
By: /s/ B. Clyde Preslar
------------------------------
B. Clyde Preslar
Vice President and Principal
Financial Officer
Dated: April 24, 2000
13
<PAGE> 1
EXHIBIT 3.1
BYLAWS
OF
LANCE, INC.
(As Amended Through Directors Meeting Held January 11, 2000)
ARTICLE I - OFFICES
Section 1.1 PRINCIPAL OFFICE. The principal office of the Corporation
shall be located at 8600 South Boulevard, Charlotte, Mecklenburg County, North
Carolina.
Section 1.2 REGISTERED OFFICE. The registered office of the Corporation
required by law to be maintained in the State of North Carolina shall be
identical with the principal office.
Section 1.3 OTHER OFFICES. The Corporation may have offices at such
other places, either within or without the State of North Carolina as the Board
of Directors may from time to time determine, or as the affairs of the
Corporation may require.
ARTICLE II - MEETINGS OF SHAREHOLDERS
Section 2.1 PLACE OF MEETINGS. All meetings of shareholders shall be
held at the principal office of the Corporation, or at such other place, either
within or without the State of North Carolina, as shall be designated by the
Board of Directors.
Section 2.2 ANNUAL MEETINGS. The annual meeting of the shareholders
shall be held each year in April at such date and time as shall be designated by
the Board of Directors of the Corporation for the purpose of electing directors
of the Corporation and for the transaction of such other business as may be
properly brought before the meeting.
Section 2.3 SUBSTITUTE ANNUAL MEETINGS. If the annual meeting shall not
be held on the day designated by these Bylaws, a substitute annual meeting may
be called in accordance with the provisions of Section 2.4. A meeting so called
shall be designated and treated for all purposes as the annual meeting.
Section 2.4 SPECIAL MEETINGS. Special meetings of the shareholders may
be called at any time by the President or by the Board of Directors of the
Corporation.
Section 2.5 NOTICE OF MEETINGS. Written or printed notice stating the
time and place of the meeting shall be delivered not less than 10 nor more than
60 days before the date thereof, either personally or by mail, at the direction
of the President, the Board of Directors, or other person calling the meeting,
to each shareholder of record entitled to vote at such meeting.
In the case of a special meeting, the notice of meeting shall specifically state
the purpose or purposes for which the meeting is called. In the case of an
annual meeting, the notice of meeting
<PAGE> 2
need not specifically state the purpose or purposes thereof or the business to
be transacted thereat unless such statement is expressly required by the
provisions of these Bylaws or by applicable law.
If a meeting is adjourned for more than 120 days after the date fixed for the
original meeting, or if a new record date is fixed for the adjourned meeting, or
if the date, time and place for the adjourned meeting is not announced prior to
adjournment, then notice of the adjourned meeting shall be given as in the case
of an original meeting; otherwise, it is not necessary to give any notice of the
adjourned meeting other than by announcement at the meeting at which the
adjournment is taken.
A shareholder's attendance at a meeting constitutes a waiver by such shareholder
of (a) objection to lack of notice or defective notice of the meeting, unless
the shareholder at the beginning of the meeting objects to holding the meeting
or transacting business at the meeting, and (b) objection to consideration of a
particular matter at the meeting that is not within the purpose or purposes
described in the notice of the meeting, unless the shareholder objects to
considering the matter before it is voted upon.
Section 2.6 RECORD DATE. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or in order to make a determination of shareholders for any
other proper purpose, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such record date in any
case to be not more than 70 days immediately preceding the date of the meeting
or the date on which the particular action, requiring such determination of
shareholders, is to be taken.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, the close of business on the
day before the date on which notice of the meeting is first mailed to
shareholders shall be the record date for such determination of shareholders.
A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date for the adjourned meeting, which it
must do if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting.
Section 2.7 SHAREHOLDERS' LIST. Not later than two business days after
the date notice of a meeting of shareholders is first given, the Secretary or
other officer or person having charge of the stock transfer books of the
Corporation shall prepare an alphabetical list of the shareholders entitled to
notice of such meeting, with the address of and number of shares held by each
shareholder, which list shall be kept on file at the principal office of the
Corporation (or such other place in the city where the meeting is to be held as
may be identified in the notice of the meeting) for the period commencing two
business days after notice of the meeting is first given and continuing through
such meeting, and which list shall be available for inspection by any
shareholder, or his or her agent or attorney, upon his or her demand, at any
time during regular business hours. This list shall also be produced and kept
open at the time and place of the meeting and shall be subject to inspection by
any shareholder, or his or her agent or attorney, during the whole time of the
meeting and any adjournment thereof.
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Section 2.8 QUORUM. The holders of shares entitled to a majority of
votes entitled to be cast (as described in Section 2.10), present in person or
represented by proxy, shall constitute a quorum at all meetings of shareholders
for purposes of acting on any matter for which action by the shareholders is
required. If there is no quorum at the opening of a meeting of shareholders,
such meeting may be adjourned from time to time by the vote of a majority of the
shares voting on the motion to adjourn; and, at any adjourned meeting at which a
quorum is present, any business may be transacted which might have been
transacted at the original meeting.
Once a share is represented for any purpose at a meeting, it is deemed present
for quorum purposes for the remainder of the meeting and for any adjournment
thereof unless a new record date is or must be set for that adjourned meeting.
Section 2.9 ORGANIZATION. Each meeting of shareholders shall be
presided over by the President, or, in the absence or at the request of the
President, by such other officer as the President or the Board of Directors may
designate, or in their absence and in the absence of such designation, by any
person selected to preside by plurality vote of the shares represented and
entitled to vote at the meeting. The Secretary, or in the absence or at the
request of the Secretary, any person designated by the person presiding at the
meeting, shall act as secretary of the meeting.
Section 2.10 VOTING OF SHARES. Except as otherwise provided in the
Articles of Incorporation, each outstanding share having the right to vote on a
matter or matters submitted to a vote at a meeting of shareholders shall be
entitled to one vote on each such matter. A shareholder may vote in person or by
proxy.
Except in the election of directors (as provided in Section 3.4), if a quorum
exists, action on a matter by the shareholders entitled to vote on the matter is
approved by such shareholders if the votes cast favoring the action exceed the
votes cast opposing the action, unless a greater number of affirmative votes is
required by law or the Articles of Incorporation or a Bylaw adopted by the
shareholders.
Voting on all matters including the election of directors shall be by voice vote
or by a show of hands unless, as to any matter, the holders of shares entitled
to at least 25% of the votes of shares represented at the meeting and entitled
to vote on that matter shall demand, prior to the voting on such matter, a
ballot vote on such matter.
Section 2.11 ACTION WITHOUT MEETING. Any action required or permitted
to be taken at a meeting of the shareholders may be taken without a meeting if
one or more written consents, setting forth the action so taken, shall be signed
by all of the persons who would be entitled to vote upon such action at a
meeting, whether before or after the action so taken, and delivered to the
Corporation to be included in the corporate minute book or filed with the
corporate records. Such consent has the same effect as a meeting vote and may be
described as such in any document.
Section 2.12 VOTING INSPECTORS. The Board of Directors in advance of
any meeting of shareholders may appoint one or three voting inspectors to act at
any such meeting or adjournment thereof, and in the absence of such appointment,
the officer or person acting as chairman of the meeting may, and shall if so
requested by any shareholder or proxy holder, make such appointment. Any
vacancy, whether from refusal to act or otherwise, may be filled by appointment
of the
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chairman of the meeting. If there are three inspectors, the decision or
certificate of any two shall be effective as the act of all.
The voting inspectors shall determine the number of shares outstanding, the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the authenticity, validity and effect of proxies, receive votes,
ballots, assents or consents, hear and determine all challenges and questions in
any way arising in connection with the vote, count and tabulate all votes,
assents and consents, determine and announce the result, and do such acts as may
be proper to conduct the election or vote with fairness to all shareholders. On
request, the inspectors shall make a report in writing of any challenge,
question or matter determined by them and make and execute a certificate of any
fact found by them.
The certificate of the inspectors shall be prima facie evidence of the facts
stated therein and of the vote as certified by them, unless overruled by a vote
of a majority of the shares represented at the meeting exclusive of the shares
as to which there is a controversy.
ARTICLE III - DIRECTORS
Section 3.1 GENERAL POWERS. The business and affairs of the Corporation
shall be managed by the Board of Directors or by such Executive Committee or
other committees of the Board as the Board may establish pursuant to these
Bylaws.
Section 3.2 NUMBER, TERM AND QUALIFICATIONS. The number of directors of
the Corporation shall not be less than 12 nor more than 16, the exact number of
authorized directors (in this Section sometimes referred to as the entire Board)
to be determined from time to time by resolution adopted by a majority of the
entire Board, and such exact number shall be 16 until otherwise determined by
resolution adopted by a majority of the entire Board. In the event that the
number of authorized directors is increased by such a resolution, the vacancy or
vacancies so resulting shall be filled by the shareholders. Any such vacancy or
vacancies not filled by the shareholders may be filled by a vote of a majority
of the directors then in office. A decrease in the number of authorized
directors shall not of itself remove any director prior to the expiration of his
term of office. The directors shall be divided into three classes, each class to
be as nearly equal in number as possible, to serve for terms of three years and
until their successors shall be elected and shall qualify. In the event of any
increase in the authorized number of directors, the additional directors shall
be so classified that all classes of directors shall be increased equally, as
nearly as possible, and, in the event of any decrease in the authorized number
of directors, all classes of directors shall be decreased equally, as nearly as
possible. In the event of the death, resignation, retirement, removal or
disqualification of a director during the director's elected term of office, the
successor shall be elected to serve only until the next meeting of shareholders
at which directors are elected. Directors need not be residents of the State of
North Carolina or shareholders of the Corporation.
Section 3.3 ELECTION OF DIRECTORS. Except as provided in Section 3.6,
directors shall be elected at the annual meeting of shareholders.
Section 3.4 VOTING FOR DIRECTORS. Directors shall be elected by a
plurality of the votes cast by the shares entitled to vote in the election of
directors at a meeting at which a quorum is present.
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Except as provided in the Articles of Incorporation or required by applicable
law, shareholders have no right to cumulate their votes for directors.
Section 3.5 REMOVAL. Directors may be removed from office with or
without cause by a vote of shareholders holding at least seventy-five percent
(75%) of the shares entitled to vote at an election of directors. However,
unless the entire Board is removed, an individual director may not be removed if
the number of shares voting against the removal would be sufficient to elect a
director if such shares were voted cumulatively at an annual election, provided
the right to cumulative voting exists under Section 4 above (Section 3.4). If
any directors are so removed, new directors may be elected at the same meeting.
Section 3.6 VACANCIES. A vacancy occurring in the Board of Directors,
including positions not filled by the shareholders or those resulting from an
increase in the number of directors, may be filled by a majority of the
remaining directors, though less than a quorum, or by the sole remaining
director. The shareholders may elect a director at any time to fill any vacancy
not filled by the directors.
Section 3.7 OFFICERS OF MEETINGS. There may be a Chairman of the Board
of Directors elected by the directors from their number at any meeting of the
Board. The Chairman of the Board shall serve for a term of one year or until his
successor is elected. The Chairman of the Board may be removed by the vote of a
majority of the number of directors then in office. The Chairman of the Board
shall preside at all meetings of the Board of Directors and perform such other
duties as may be prescribed by the Board. If a Chairman of the Board is not
elected, then the President, if present, shall preside at all meetings of the
Board of Directors. In the President's absence, the next officer in due order
who may be present shall preside. For the purpose of this Article III, the due
order of presiding shall be as follows: Chairman of the Board, President,
Executive Vice-President, Vice-President, Secretary and Treasurer. The Secretary
of the Corporation, or in his absence, an Assistant Secretary, shall keep a
record of the proceedings of all directors' meetings.
Section 3.8 COMMITTEES. The Board of Directors, by resolution adopted
by a majority of the number of directors then in office, may designate and
appoint from among its members one or more Committees, each consisting of two or
more directors, who shall serve as members of such Committee at the pleasure of
the Board of Directors. Each such Committee, to the extent provided in such
resolution, shall have and may exercise all of the authority of the Board of
Directors in the management of the Corporation, except that no such Committee
shall have authority to: (a) authorize dividends or other distributions not
permitted by applicable law to be authorized by a Committee; (b) approve or
propose to shareholders action that applicable law requires to be approved by
shareholders; (c) fill vacancies on the Board of Directors or on any Committee;
(d) amend the Articles of Incorporation; (e) adopt, amend or repeal bylaws; (f)
approve a plan of merger not requiring shareholder approval; (g) authorize or
approve reacquisition of shares, except according to a formula or method
prescribed by the Board of Directors; (h) authorize or approve the issuance or
sale or contract for sale of shares, or determine the designation and relative
rights, preferences and limitations of a class or series of shares (except that
the Board of Directors may authorize a Committee or a senior executive officer
to do so within limits specifically prescribed by the Board of Directors); or
(i) amend or repeal any resolution of the Board of Directors that by its terms
provides that it is not so amendable or repealable. Nothing herein shall
preclude the Board of
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Directors from establishing and appointing any committee, whether of directors
or otherwise, not having or exercising the authority of the Board of Directors.
Section 3.9 DIRECTORS EMERITUS. The Board of Directors may elect one or
more Directors Emeritus by a majority vote of the entire Board. The position of
Director Emeritus shall be an honorary position limited to persons who have
previously served as members of the Board of Directors. Each Director Emeritus
shall serve for a term extending until the next Annual Meeting of Directors and
may be re-elected for as many successive terms as the Board of Directors
determines. A Director Emeritus shall not be considered a member of the Board of
Directors for any purpose, shall not be considered in determining the presence
of a quorum and shall not be entitled to vote.
ARTICLE IV - MEETINGS OF DIRECTORS
Section 4.1 REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held immediately after, and at the same place as, the annual
meeting of shareholders. In addition, the Board of Directors may provide, by
resolution, the time and place, either within or without the State of North
Carolina, for the holding of additional regular meetings.
Section 4.2 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board, the
President or any five directors of the Corporation. Such meetings may be held
either within or without the State of North Carolina.
Section 4.3 NOTICE OF MEETINGS. Regular meetings of the Board of
Directors may be held without notice.
The person or persons calling a special meeting of the Board of Directors shall
give notice of the meeting to the directors by any usual means of communication.
If such notice is given to a director in writing by mail, it shall be mailed,
correctly addressed to such director with postage prepaid, no later than six
days prior to the date of the meeting. If such notice is given to a director in
writing otherwise than by mail, it shall be given so that it is received by such
director no later than two days prior to the meeting. If such notice is given
orally to a director, it shall be communicated orally to such director no later
than two days prior to the meeting. Delivery or completion of transmission of
written notice to the address of a director shall be deemed receipt by such
director, and any such written notice given to a director by mail that is not
timely mailed shall nevertheless be valid and effective if so received by such
director no later than two days prior to the date of the meeting.
A director's attendance at or participation in a meeting shall constitute a
waiver by such director of notice of such meeting, unless the director at the
beginning of the meeting (or promptly upon his or her arrival) objects to
holding the meeting or to the transaction of business at the meeting and does
not thereafter vote for or assent to action taken at the meeting.
Section 4.4 QUORUM. A majority of the directors fixed by these Bylaws
shall constitute a quorum for the transaction of business at any meeting of the
Board of Directors.
Section 4.5 MANNER OF ACTING. Except as otherwise provided in these
Bylaws or required by applicable law, the affirmative vote of a majority of the
directors present at a meeting of the
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Board of Directors shall be the act of the Board of Directors, if a quorum is
present when the vote is taken.
Section 4.6 ORGANIZATION. Each meeting of the Board of Directors shall
be presided over by the Chairman of the Board (if there shall be a person
holding such office), or, in the absence or at the request of the Chairman of
the Board, by the President, and in their absence or at their request, by any
person selected to preside by vote of a majority of the directors present. The
Secretary, or in the absence or at the request of the Secretary, any person
designated by the person presiding at the meeting, shall act as secretary of the
meeting.
Section 4.7 ACTION WITHOUT MEETING. Action required or permitted to be
taken by the Board of Directors or a Committee at a meeting may be taken without
a meeting if one or more written consents describing the action taken are signed
by each of the directors or members of the Committee, as the case may be,
whether before or after the action so taken, and filed with corporate records or
the minutes of the proceedings of the Board or Committee. Action so taken is
effective when the last director or Committee member signs such consent, unless
the consent specifies a different effective date. Such consent has the effect of
a meeting vote and may be described as such in any document.
Section 4.8 CONFERENCE TELEPHONE MEETINGS. Any one or more directors or
members of a Committee may participate in a meeting of the Board of Directors or
a Committee by means of a conference telephone or similar communications device
which allows all persons participating in the meeting to hear each other, and
such participation in a meeting shall be deemed presence in person at such
meeting.
ARTICLE V - OFFICERS
Section 5.1 GENERAL. The officers of the Corporation shall consist of a
Chief Executive Officer (who shall be either the Chairman of the Board or the
President, as provided in these Bylaws), a President, a Secretary and a
Treasurer, and may also include a Chairman of the Board, a Chief Operating
Officer, and such Vice Presidents, Assistant Secretaries, Assistant Treasurers
and other officers as may be appointed by the Board of Directors or otherwise
provided in these Bylaws. Any two or more offices may be simultaneously held by
the same person, but no person may act in more than one capacity where action of
two or more officers is required. The title of any officer may include any
additional designation descriptive of such officer's duties as the Board of
Directors may prescribe.
Section 5.2 APPOINTMENT AND TERM. The officers of the Corporation shall
be appointed from time to time by the Board of Directors; provided, that the
Board of Directors may authorize a duly appointed officer to appoint one or more
other officers or assistant officers, other than appointment of the Chief
Executive Officer, the Chairman of the Board, the President or the Chief
Operating Officer. Each officer shall serve as such at the pleasure of the Board
of Directors.
Section 5.3 REMOVAL. Any officer may be removed by the Board of
Directors at any time with or without cause; but such removal shall not itself
affect the contract rights, if any, of the person so removed.
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Section 5.4 COMPENSATION. The compensation of all officers of the
Corporation shall be fixed by, or in the manner prescribed by, the Board of
Directors.
Section 5.5 CHIEF EXECUTIVE OFFICER. If there is a Chairman of the
Board and the Board of Directors designates the Chairman of the Board as the
Chief Executive Officer, then the Chairman of the Board shall be the Chief
Executive Officer of the Corporation. Otherwise, the President shall be the
Chief Executive Officer of the Corporation. Subject to the direction and control
of the Board of Directors, the Chief Executive Officer shall supervise and
control the management of the Corporation and shall have such duties and
authority as are normally incident to the position of chief executive officer of
a corporation and such other duties and authority as may be prescribed from time
to time by the Board of Directors or as are provided for elsewhere in these
Bylaws. The title of the Chairman of the Board or President, as the case may be,
serving as the Chief Executive Officer may, but need not, also refer to his or
her position as Chief Executive Officer.
Section 5.6 CHAIRMAN OF THE BOARD. The Board of Directors may, but need
not, appoint from among its members an officer designated as the Chairman of the
Board. If there is appointed a Chairman of the Board and such Chairman of the
Board is also designated by the Board of Directors to be the Chief Executive
Officer, then the Chairman of the Board shall have all of the duties and
authority of the Chief Executive Officer and shall also, when present, preside
over meetings of the Board of Directors. If there is a Chairman of the Board but
such Chairman of the Board is not also designated as the Chief Executive
Officer, then the Chairman of the Board shall, when present, preside over
meetings of the Board of Directors and shall have such other duties and
authority as may be prescribed from time to time by the Board of Directors or as
are provided for elsewhere in these Bylaws.
Section 5.7 CHIEF OPERATING OFFICER. If there is appointed a Chairman
of the Board who is also the Chief Executive Officer, then the President shall
be the Chief Operating Officer. If the President is the Chief Executive Officer,
then the President shall also serve as the Chief Operating Officer unless the
Board of Directors shall designate some other officer of the Corporation as the
Chief Operating Officer. Subject to the direction and control of the Chief
Executive Officer and the Board of Directors, the Chief Operating Officer shall
supervise and control the operations of the Corporation, shall have such duties
and authority as are normally incident to the position of chief operating
officer of a corporation and such other duties as may be prescribed from time to
time by the Chief Executive Officer or the Board of Directors, and, in the
absence or disability of the Chief Executive Officer, shall have the authority
and perform the duties of the Chief Executive Officer. The title of the
President or other officer serving as the Chief Operating Officer may, but need
not, also refer to his or her position as Chief Operating Officer.
Section 5.8 PRESIDENT. Unless there is appointed a Chairman of the
Board who is also designated the Chief Executive Officer, the President shall be
the Chief Executive Officer of the Corporation and shall have all of the duties
and authority of that office. If the President is not the Chief Executive
Officer, then the President shall be the Chief Operating Officer and shall have
all of the duties and authority of that office. If the President shall be the
Chief Executive Officer and no other officer shall have been designated by the
Board of Directors as the Chief Operating Officer, then the President shall also
have all of the duties and authority of the Chief Operating Officer. The
President shall also have such other duties and authority as may be prescribed
from time to time by the Board of Directors.
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Section 5.9 VICE PRESIDENT. The Vice President, and if there be more
than one, the Executive Vice President or other Vice President designated by the
Board of Directors, shall, in the absence or disability of the President, have
the authority and perform the duties of said office (including the duties and
authority of the President as either Chief Executive Officer or Chief Operating
Officer or both, if the President serves as such). In addition, each Vice
President shall perform such other duties and have such other powers as are
normally incident to the office of Vice President or as shall be prescribed by
the Chief Executive Officer, the Chief Operating Officer or the Board of
Directors.
Section 5.10 SECRETARY. The Secretary shall have the responsibility and
authority to maintain and authenticate the records of the Corporation; shall
keep, or cause to be kept, accurate records of the acts and proceedings of all
meetings of shareholders, directors and Committees; shall give, or cause to be
given, all notices required by law and by these Bylaws; shall have general
charge of the corporate books and records and of the corporate seal, and shall
affix the corporate seal to any lawfully executed instrument requiring it; shall
have general charge of the stock transfer books of the Corporation and shall
keep, or cause to be kept, all records of shareholders as are required by
applicable law or these Bylaws; shall sign such instruments as may require the
signature of the Secretary; and, in general, shall perform all duties incident
to the office of Secretary and such other duties as may be assigned to him or
her from time to time by the Chief Executive Officer, the Chief Operating
Officer, or the Board of Directors.
Section 5.11 TREASURER. The Treasurer shall have custody of all funds
and securities belonging to the Corporation and shall receive, deposit or
disburse the same under the direction of the Board of Directors; shall keep, or
cause to be kept, full and accurate accounts of the finances of the Corporation
in books especially provided for that purpose, and shall generally have charge
over the Corporation's accounting and financial records; shall cause a true
statement of its assets and liabilities as of the close of each fiscal year, and
of the results of its operations and of cash flows for such fiscal year, all in
reasonable detail, including particulars as to convertible securities then
outstanding, to be made as soon as practicable after the end of such fiscal
year. The Treasurer shall also prepare and file, or cause to be prepared and
filed, all reports and returns required by Federal, State or local law and shall
generally perform all other duties incident to the office of Treasurer and such
other duties as may be assigned to him or her from time to time by the Chief
Executive Officer, the Chief Operating Officer or the Board of Directors.
Section 5.12 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretaries and Assistant Treasurers, if any, shall, in the absence or
disability of the Secretary or the Treasurer, respectively, have all the powers
and perform all of the duties of those offices, and they shall in general
perform such other duties as shall be assigned to them by the Secretary or the
Treasurer, respectively, or by the Chief Executive Officer, the Chief Operating
Officer or the Board of Directors.
Section 5.13 BONDS. The Board of Directors may by resolution require
any and all officers, agents and employees of the Corporation to give bond to
the Corporation, with sufficient sureties, conditioned on the faithful
performance of the duties of their respective offices or positions, and to
comply with such other conditions as may from time to time be required by the
Board of Directors.
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ARTICLE VI - CONTRACTS, LOANS AND DEPOSITS
Section 6.1 CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument on behalf of the Corporation, and such authority may be general
or confined to specific instances.
Section 6.2 LOANS. No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 6.3 CHECKS AND DRAFTS. All checks, drafts and other orders for
the payment of money issued in the name of the Corporation shall be signed by
such officer or officers, agent or agents of the Corporation and in such manner
as shall from time to time be determined by resolution of the Board of
Directors.
Section 6.4 DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such depositories as the Board of Directors shall direct.
ARTICLE VII - CERTIFICATES OF STOCK AND THEIR TRANSFER
Section 7.1 CERTIFICATES FOR SHARES. Every shareholder of the
Corporation shall be entitled to a certificate or certificates for the fully
paid shares owned by him, which certificates shall be consecutively numbered or
otherwise identified, and shall be in such form as the Board of Directors shall
determine. Each certificate shall be signed by the President, Executive
Vice-President or Vice-President and by the Secretary, Assistant Secretary,
Treasurer, or Assistant Treasurer, either manually or in facsimile, and shall be
sealed with the seal of the Corporation or a facsimile thereof. The signatures
of any such officers upon a certificate may be in facsimile or may be engraved
or printed if the certificate is countersigned by a transfer agent other than
the Corporation itself or an employee of the Corporation. In case any officer
who has signed or whose facsimile or other signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer at the date of its issue.
Section 7.2 TRANSFER OF SHARES. Transfer of shares represented by
certificates shall be made on the stock transfer books of the Corporation only
upon the surrender of the certificates for the shares sought to be transferred
by the record holder thereof or by his or her duly authorized agent, transferee
or legal representative, or as otherwise provided by applicable law. All
certificates surrendered for transfer shall be canceled before new certificates
for the transferred shares shall be issued.
Section 7.3 LOST CERTIFICATES. The Board of Directors may authorize the
issuance of a new share certificate in place of a certificate claimed to have
been lost, destroyed or wrongfully taken, upon receipt of an affidavit of such
fact from the person claiming the loss or destruction. When authorizing such
issuance of a new certificate, the Board may require the claimant to give the
Corporation a bond in such sum and with such sureties as it may direct to
indemnify the Corporation against loss from any claim with respect to the
certificate claimed to have been lost,
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destroyed or wrongfully taken; or the Board may, by resolution reciting that the
circumstances justify such action, authorize the issuance of the new certificate
without requiring such a bond with respect to a certificate claimed to have been
lost or destroyed. Any such authorization by the Board of Directors may be
general or confined to specific instances. Nothing herein shall require the
Board of Directors to authorize the issuance of any such replacement certificate
under any circumstances in which the Corporation is not required to issue such
certificate, this provision being permissive and not mandatory.
ARTICLE VIII - RECORDS AND REPORTS
Section 8.1 GENERAL. The Corporation shall keep all records and submit
and file all reports and filings as are required by applicable law. Unless the
Board of Directors otherwise directs, the Treasurer shall be responsible for
keeping, or causing to be kept, all financial and accounting records of the
Corporation and for submitting or filing, or causing to be submitted or filed,
all reports and filings of a financial or accounting nature, and the Secretary
shall be responsible for keeping, or causing to be kept, all other records and
for submitting or filing, or causing to be submitted or filed, all other reports
and filings.
The Corporation shall keep as permanent records minutes of all meetings of its
incorporators, shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and a record
of all actions taken by Committees of the Board of Directors. The Corporation
shall maintain appropriate accounting records. The Corporation or its agent
shall maintain a record of its shareholders, in a form that permits preparation
of a list of the names and addresses of all shareholders, in alphabetical order
by class of shares showing the number and class of shares held by each. The
Corporation shall maintain its records in written form or in another form
capable of conversion into written form within a reasonable time.
Section 8.2 RECORDS AT PRINCIPAL OFFICE. The Corporation shall keep a
copy of the following records at the Corporation's principal office: (a) its
Articles or restated Articles of Incorporation and all amendments to them
currently in effect; (b) its Bylaws or restated Bylaws and all amendments to
them currently in effect; (c) resolutions adopted by the Board of Directors
creating one or more classes or series of shares, and fixing their relative
rights, preferences, and limitations, if shares issued pursuant to those
resolutions are outstanding; (d) the minutes of all shareholders' meetings, and
records of all action taken by shareholders without a meeting, for the past
three years; (e) all written communications to shareholders generally within the
past three years and the financial statements required by law to be made
available to the shareholders for the past three years; (f) a list of the names
and business addresses of its current directors and officers; and (g) its most
recent annual report delivered to the North Carolina Secretary of State pursuant
to the North Carolina Business Corporation Act.
Section 8.3 FINANCIAL STATEMENTS. The Corporation shall make available
to its shareholders annual financial statements, which may be consolidated or
combined statements of the Corporation and one or more of its subsidiaries, as
appropriate, that include a balance sheet as of the end of the fiscal year, an
income statement for that year, and a statement of cash flows for the year
unless that information appears elsewhere in the financial statements. If
financial statements are prepared for the Corporation on the basis of generally
accepted accounting principles, the annual financial statements shall also be
prepared on that basis.
11
<PAGE> 12
If the annual financial statements are reported upon by a public accountant,
such accountant's report shall accompany them. If not, the statements shall be
accompanied by a statement of the President or the Treasurer or other person
responsible for the Corporation's accounting records: (a) stating his or her
reasonable belief whether the statements were prepared on the basis of generally
accepted accounting principles and, if not, describing the basis of preparation;
and (b) describing any respects in which the statements were not prepared on a
basis of accounting consistent with the statements prepared for the preceding
year.
The Corporation shall mail the annual financial statements, or a written notice
of their availability, to each shareholder within 120 days after the close of
each fiscal year; provided that the failure of the Corporation to comply with
this requirement shall not constitute the basis for any claim of damages by any
shareholder unless such failure was in bad faith. Thereafter, on written request
from a shareholder who was not mailed the statements, the Corporation shall mail
such shareholder the latest financial statements.
Section 8.4 ANNUAL REPORT. The Corporation shall prepare and deliver to
the North Carolina Secretary of State for filing each year the annual report
required by the North Carolina Business Corporation Act. Such annual report
shall be filed each year within 60 days after the end of the month of December,
or at such other time as is then required by applicable law. The Corporation
may, and when required by law shall, file all necessary or appropriate
corrections and amendments to such annual report, and shall promptly file an
amendment to its annual report to reflect any change in the location of the
principal office of the Corporation.
ARTICLE IX - GENERAL PROVISIONS
Section 9.1 DIVIDENDS. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law and the Articles of
Incorporation of the Corporation. The Board of Directors may fix in advance a
record date for determining the shareholders entitled to a dividend. If such
record date is not fixed by the Board of Directors, the date the Board of
Directors authorizes such dividend shall be the record date.
Section 9.2 SEAL. The corporate seal of the Corporation shall consist
of two concentric circles between which is the name of the Corporation, "LANCE,
INC." at the top and "NORTH CAROLINA" at the bottom, and in the center of which
is inscribed "SEAL" at the top and "1926" at the bottom. The seal may be used by
causing it or a facsimile thereof to be impressed, affixed, stamped or
reproduced by any means. Any officer of the Corporation authorized to execute or
attest a document on behalf of the Corporation may affix or reproduce on such
document, as and for the corporate seal of the Corporation, a seal in any other
form sufficient to evidence that it is intended by such officer to represent the
corporate seal of the Corporation, in which case such seal shall be as effective
as the corporate seal in the form herein prescribed.
Section 9.3 NOTICE AND WAIVER OF NOTICE. Except as otherwise provided
in the Articles of Incorporation or these Bylaws, any notice permitted or
required to be given pursuant to these Bylaws may be given in any manner
permitted by applicable law and with the effect therein provided. Without
limiting the generality of the forgoing, written notice by the Corporation to a
12
<PAGE> 13
shareholder is effective when deposited in the United States mail with postage
thereon prepaid and correctly addressed to the shareholder's address shown in
the Corporation's current record of shareholders.
Whenever any notice is required to be given to any shareholder or director under
applicable law or under the provisions of the Articles of Incorporation or
Bylaws, a waiver thereof in writing signed by the person or persons entitled to
such notice and included in the minutes or filed with the corporate records,
whether done before or after the time stated in the notice, shall be equivalent
to the giving of such notice.
Section 9.4 FISCAL YEAR. Unless otherwise ordered by the Board of
Directors, the fiscal year of the Corporation shall end on the last Saturday in
each calendar year.
Section 9.5 INDEMNIFICATION. Any person who at any time serves or has
served as a director of the Corporation shall have a right to be indemnified by
the Corporation to the fullest extent permitted by law against (a) litigation
expenses, including reasonable attorneys fees, actually and necessarily incurred
by him in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, whether
formal or informal, and whether or not brought by or on behalf of the
Corporation, arising out of his status as such director, or his status as an
officer, employee or agent of the Corporation, or his service, at the request of
the Corporation, as a director, officer, partner, trustee, employee or agent of
any other corporation, partnership, joint venture, trust or other enterprise or
as a trustee or administrator under an employee benefit plan, or his activities
in any of the foregoing capacities, and (b) reasonable payments made by him in
satisfaction of any judgment, money decree, fine (including any excise tax
assessed with respect to an employee benefit plan), penalty or settlement for
which he may have become liable in any such action, suit or proceeding.
The Board of Directors of the Corporation shall take all such action as may be
necessary and appropriate to authorize the Corporation to pay the
indemnification required by this Bylaw, including without limitation, to the
extent needed, making a good faith evaluation of the manner in which the
claimant for indemnity acted and of the reasonable amount of indemnity due him
and giving notice to, and obtaining approval by, the shareholders of the
Corporation.
Expenses incurred by a director in defending an action, suit or proceeding may
be paid by the Corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
director to pay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation against such expenses.
Any person who at any time after the adoption of this Bylaw serves or has served
in any of the aforesaid capacities for or on behalf of the Corporation shall be
deemed to be doing or to have done so in reliance upon, and as consideration
for, the right of indemnification provided herein, and any modification or
repeal of these provisions for indemnification shall be prospective only and
shall not affect any rights or obligations existing at the time of such
modification or repeal. Such right shall inure to the benefit of the legal
representatives of any such person and shall not be exclusive of any other
rights to which such person may be entitled apart from the provisions of this
Bylaw and shall not be limited by the provisions for indemnification in Sections
55-8-51 through 55-8-56 of the North Carolina Business Corporation Act or any
successor statutory provisions.
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<PAGE> 14
Any person who is entitled to indemnification by the Corporation hereunder shall
also be entitled to reimbursement of reasonable costs, expenses and attorneys
fees incurred in obtaining such indemnification.
Section 9.6 NORTH CAROLINA SHAREHOLDER PROTECTION ACT. The provisions
of Article 9 of Chapter 55 of the General Statutes of North Carolina, entitled
"The North Carolina Shareholder Protection Act," shall not apply to the
Corporation.
Section 9.7 CONSTRUCTION. All references in these Bylaws to
"shareholder" or "shareholders" refer to the person or persons in whose names
shares are registered in the records of the Corporation, except to the extent
that a beneficial owner of shares that are registered in the name of a nominee
is recognized by the Corporation as a "shareholder" in accordance with a
procedure therefor that the Corporation may, but need not, establish pursuant to
applicable law. All personal pronouns used in these Bylaws shall include persons
of any gender. All terms used herein and not specifically defined herein but
defined in the North Carolina Business Corporation Act shall have the same
meanings herein as given under the North Carolina Business Corporation Act,
unless the context otherwise requires.
Section 9.8 AMENDMENTS. Except as otherwise provided herein, these
Bylaws may be amended or repealed and new bylaws may be adopted by the
affirmative vote of a majority of the directors then holding office at any
regular or special meeting of the Board of Directors.
Sections 2 and 5 of Article III (Sections 3.2 and 3.5) of these Bylaws have been
adopted by the shareholders of this Corporation and may not be amended, repealed
or annulled except by a vote of the shareholders holding at least seventy-five
percent (75%) of the shares of the Corporation entitled to vote.
Amended: March 9, 1979
January 13, 1987
February 17, 1987
July 14, 1987
January 16, 1990
April 20, 1990
October 9, 1990
April 16, 1993
April 21, 1995
January 11, 2000
14
<PAGE> 1
EXHIBIT 10.1
LANCE, INC.
2000 ANNUAL CORPORATE PERFORMANCE INCENTIVE PLAN FOR OFFICERS
Purposes and The primary purposes of the 2000 Annual Corporate
Introduction Performance Incentive Plan for Officers are to:
o Motivate behaviors that lead to the
successful achievement of specific financial
and operations goals that support Lance's
stated business strategy.
o Emphasize link between participants'
performance and rewards for meeting
predetermined, specific goals.
o Improve the competitiveness of total cash
pay opportunities.
o Help establish performance orientation at
Lance and communicate to employees that
greater responsibility carries greater
rewards because more pay is "at risk."
For 2000, participants will be eligible to earn
incentive awards based on Company performance in
Earnings Per Share (EPS) and Lance Co. operating
profit.
To achieve the maximum motivational impact, plan
goals and the rewards that will be received for
meeting those goals will be communicated to
participants as soon as practical after the 2000 Plan
is approved by the Compensation/Stock Option
Committee of the Board of Directors.
Each participant will be assigned a Target Incentive
Award, stated as a percent of Base Salary. The Target
Incentive Award, or a greater or lesser amount, will
be earned at the end of the plan year based on the
attainment of predetermined goals.
Following year-end, 100% of the awards earned will be
paid to participants in cash.
Plan Year The period over which performance will be measured is
the Company's fiscal year.
<PAGE> 2
Eligibility and Eligibility in the Plan is limited to Officers who
Participation are key to Lance's success. The Compensation/Stock
Option Committee of the Board of Directors will
review and approve participants nominated by the
President and CEO. Participation in one year does not
guarantee participation in a following year, but
instead will be reevaluated and determined on an
annual basis.
Participants in the Plan may not participate in any
other annual incentive plan (e.g., sales incentives,
etc.) offered by Lance or its affiliates.
Attachment A includes the list of 2000 participants
approved by the Compensation/Stock Option Committee
at its January 10, 2000 meeting.
Target Incentive Awards Each participant will be assigned a Target Incentive
Award expressed as a percentage of his or her Base
Salary. Participants may be assigned Target Incentive
Awards by position by salary level or based on other
factors as determined by the President and CEO.
Target Incentive Awards will be reevaluated at least
every other year, if not annually. If the job duties
of a position change during the year, or Base Salary
is increased significantly, the Target Incentive
Award shall be revised as appropriate.
Attachment A lists the Target Incentive Award for
each participant for the 2000 Plan Year. These Awards
will be reviewed and adjusted annually by the
Compensation/Stock Option Committee. Target Incentive
Awards will be communicated to each participant as
close to the beginning of the year as practicable, in
writing. Final awards will be calculated by
multiplying each participant's Target Incentive Award
by the appropriate percentage (based on financial
performance for the year, as described below).
2
<PAGE> 3
Individual Performance Each Officer (other than those named in the last
sentence of this paragraph and the first sentence of
the next paragraph) will receive 90% of his or her
Incentive Award based on the Target Incentive Award
calculations based on Earnings Per Share. The
remaining 10% of each Officer's Incentive Award will
be based upon the determination by the
Compensation/Stock Option Committee in its discretion
as to the individual performance of the Officer in
meeting his or her individual goals for the year. For
the Controller, the Treasurer and the Secretary, up
to 25% of the Incentive Award may be based on
individual performance. There will be no individual
performance incentives for the officers named in the
first sentence of the next paragraph.
Performance Measures The 2000 financial performance measure will be
and Weightings Earnings Per Share except that for the Vice
President/President of Lance Co. the financial
performance measures will be 25% Earnings Per Share
and 75% Lance Co. operating profit and for the Vice
President - Sales, the Vice President - Marketing and
the Assistant Vice President/Vice President of
Financial Services for Lance Co. the financial
performance measures will be 10% Earnings Per Share
and 90% Lance Co. operating profit. Specific goals
and related payouts are shown below.
<TABLE>
<CAPTION>
2000 Goals and Related Payouts
--------------------------------------------------------
Payout as Percent
Performance Measure Goal of Target Award
- -----------------------------------------------------------------------------------
<S> <C> <C>
Corporate EPS
Minimum 2000 Annual EPS: $* 50% (if met at minimum)
If minimum is not met, no
payouts will be earned
Target 2000 Annual EPS: $* 100% (if met at target)
Maximum 2000 Annual EPS: $* 200% (if met at maximum)
Lance Co. Operating Profit
Minimum 2000 Annual Operating 50% (if met at minimum)
Profit: $* million If minimum is not met, no
payouts will be earned
Target 2000 Annual Operating 100% (if met at target)
Profit: $* million
Maximum 2000 Annual Operating 200% (if met at maximum)
Profit: $* million
- -----------------------------------------------------------------------------------
</TABLE>
[*Targets not required to be disclosed.]
3
<PAGE> 4
Percent of payout will be determined on a straight
line basis between minimum and maximum. There will be
no payouts based on Earnings Per Share if 2000 Annual
EPS is less than $* and there will be no payouts
based on Lance Co. operating profit if Lance Co.
operating profit is less than $* million.
The performance measures, specific numerical goals
and the role of individual performance in determining
final payouts will be communicated to each
participant at the beginning of the year. Final
performance awards will be calculated after the
Committee has reviewed the Company's audited
financial statements for 2000 and determined the
performance level achieved.
Minimum, Target and Maximum levels will be defined at
the beginning of each year for each performance
measure.
The following definitions for the terms Maximum,
Target and Minimum should help Lance set the goals
for each year, as well as evaluate the payouts:
o Maximum: Excellent; deserves an above-market
bonus
o Target: Normal or expected performance;
deserves market level bonus
o Minimum: Lowest level of performance
deserving payment above base salary;
deserves below market bonus
o Below minimum: Deserves no additional pay
beyond base salary
Form and Timing of Final award payments will be made in cash as soon as
Payments practicable after award amounts are approved by the
Compensation/Stock Option Committee of the Board of
Directors. All awards will be rounded to the nearest
$100.
Change In Status In the event that a participant changes positions
during the plan year, whether due to promotion,
demotion or lateral move, at the discretion of the
President and CEO, awards may be prorated for the
year based on the length of time in each position.
An employee hired into an eligible position during
the year may participate in the plan for the balance
of the year on a pro rata basis.
4
<PAGE> 5
Certain Terminations In the event a participant voluntarily terminates
of Employment employment or is terminated involuntarily before the
end of the year, any award will be forfeited. In the
event of death, permanent disability, or normal or
early retirement, the award will be paid on a pro
rata basis after the end of the plan year. Awards
otherwise will be calculated on the same basis as for
other participants, except that any adjustment for
individual performance will be based on performance
prior to the termination of employment.
Change In Control In the event of a Change in Control, pro rata payouts
will be made at the greater of (1) Target or (2)
actual results for the year-to-date, based on the
number of days in the plan year preceding the Change
in Control. Payouts will be made within 30 days after
the relevant transaction has been completed.
For this purpose, a Change in Control is defined as
when any person, corporation or other entity and its
affiliates (excluding members of the Van Every Family
and any trust, custodian or fiduciary for the benefit
of any one or more members of the Van Every Family)
acquires or contracts to acquire or otherwise
controls in excess of 35% of the then outstanding
equity securities of the Company. For the purposes of
this plan, the Van Every Family shall mean the lineal
descendants of Salem A. Van Every, Sr., whether by
blood or adoption, and their spouses.
Withholding The Company shall withhold from award payments any
Federal, foreign, state, or local income or other
taxes required to be withheld.
Communications Progress reports should be made to participants
quarterly showing the year-to-date performance
results and the percentage of target awards that
would be earned if results remain at that level for
the entire year.
Executive Officers Notwithstanding any provisions to the contrary above,
participation, Target Incentive Awards and prorations
for executive officers, including the President and
CEO, shall be approved by the Compensation/Stock
Option Committee.
Governance The Compensation/Stock Option Committee of the Board
of Directors of Lance, Inc. is ultimately responsible
for the administration and governance of the Plan.
Actions requiring Committee approval include final
determination of plan eligibility and participation,
identification of performance goals and final award
determination. The decisions of the Committee shall
be conclusive and binding on all participants.
5
<PAGE> 6
ATTACHMENT A
Name Title Award Target
---- ----- ----- ------
P. A. Stroup, III President & CEO *% $*
R. G. Tucker Vice President and *% $*
President, Lance Co.
L. R. Gragnani, Jr. Vice President *% $*
- Information Technology/CIO
E. D. Leake Vice President *% $*
- Human Resources
B. C. Preslar Vice President *% $*
- Finance/CFO
D. J. Sidari Vice President *% $*
- Sales
G. W. Venner Vice President *% $*
- Marketing
J. C. Melton Assistant Vice President *% $*
D. R. Perzinski Treasurer *% $*
M. E. Wicklund Controller and *% $*
Assistant Secretary
R. S. Carles Secretary/Counsel *% $*
[*Target awards omitted for participants as targets not required to be
disclosed.]
<PAGE> 1
EXHIBIT 10.2
STATE OF NORTH CAROLINA
AGREEMENT
COUNTY OF MECKLENBURG
THIS AGREEMENT (this "Agreement") is entered into as of March 6, 2000
by and between LANCE, INC., a North Carolina corporation (the "Company"), and
DOMINIC J. SIDARI ("Sidari").
STATEMENT OF PURPOSE
Sidari has been employed by the Company since April 20, 1998. On May
29, 1998, the Company and Sidari entered into an Executive Severance Agreement
(the "Severance Agreement"), whereby the Company provided Sidari with certain
benefits. Sidari currently holds the title of Vice President of Sales.
The Company has decided to permanently eliminate the job Sidari is
performing for the Company. The Company and Sidari have entered into
negotiations with a view toward resolving all issues relating to Sidari's
employment with the Company and the termination of that employment.
As a result of these negotiations, Sidari and the Company have agreed
that Sidari and the Company will terminate their relationship on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the Statement of Purpose and the
terms and provisions of this Agreement, the parties hereto mutually agree as
follows:
1. DEFINITIONS. Capitalized terms used in this Agreement that are not
expressly defined herein but are defined in the Severance Agreement have the
respective meanings given those terms in the Severance Agreement. In addition,
as used herein, the following terms shall have the following meanings:
(a) "Affiliate" with reference to the Company means any
Person that directly or indirectly is controlled by,
or is under common control with, the Company. For
purposes of this definition the term "control" means
the possession, directly or indirectly, of the power
to direct or cause the direction of the management
and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
(b) "Person" means any individual, corporation,
association, partnership, business trust, joint stock
company, limited liability company, foundation,
trust, estate or other entity or organization of
whatever nature.
(c) "Effective Date" with reference to this Agreement
means the eighth (8th) day following the execution of
this Agreement, if not a Saturday, Sunday
<PAGE> 2
or legal holiday, and if such day is a Saturday,
Sunday or legal holiday, then the first business day
following such eighth (8th) day.
2. TERMINATION OF EMPLOYMENT; RESIGNATION FROM OFFICES. As the result
of the permanent elimination of his job, the Company does hereby terminate
Sidari's employment and as requested by the Company, Sidari hereby resigns from
all offices, committees and positions he holds with the Company and its
Affiliates, including but not limited to, Vice President of Sales of the
Company, with said termination and resignation to be effective as of March 27,
2000. Sidari will remain on the payroll through March 27, 2000 and will be
considered during the period March 6, 2000 to March 27, 2000 as being on
vacation, and in such connection will have no duties or responsibilities except
to consult from time to time with Company officials regarding the transfer of
his responsibilities to others. If requested by the Company, Sidari will execute
any additional resignation letters, forms or other documents which acknowledge
his resignation from such employment, positions, committees and offices.
3. PAYMENTS BY THE COMPANY. The Company agrees to pay or provide Sidari
with the following:
(a) Compensation and benefits to which Sidari is
otherwise entitled as an employee of the Company at
Sidari's current rate and status through March 27,
2000, in accordance with the Company's generally
applicable policies and procedures (payment for the
period March 6, 2000 through March 27, 2000 shall be
treated as vacation pay and shall exhaust Sidari's
accrued vacation entitlement);
(b) Compensation and benefits to which Sidari is
otherwise entitled under the Severance Agreement in
accordance with the terms of the Severance Agreement.
For purposes hereof, the Company acknowledges and
agrees that Sidari shall be considered to have been
involuntarily terminated Without Cause, and shall be
due all payments and benefits set forth in paragraph
4 of the Severance Agreement. The parties agree that
Sidari is entitled to be paid $248,659 under
Paragraph 4(a) of the Severance Agreement, that the
payments described in Paragraph 3(a) in this
Agreement satisfy the obligations described in
Paragraph 4(b) of the Severance Agreement and that
Sidari is entitled to receive under Paragraph 4(c) of
the Severance Agreement the greater of (i) $22,482 or
(ii) the actual bonus earned through the Termination
Date. While it is not obligated to make any payment
under Paragraph 4(c) of the Severance Agreement at
this time, the Company agrees to pay Sidari $22,482
within thirty (30) days after the Effective Date. If
a larger amount is determined to be due under
Paragraph 4(c) of the Severance Agreement, the
Company will pay the difference between the amount
paid and the amount due at the same time as payments
are made to the Company's other employees under the
Company's Annual Corporate Performance Incentive Plan
for Officers.
2
<PAGE> 3
(c) Possession of the Company automobile used by Sidari
in connection with his employment together with
conveyance of title to said automobile promptly
following the Effective Date of this Agreement;
(d) Health benefits for Sidari under the Company's group
medical plan until the earlier of (a) the date Sidari
becomes eligible for coverage under another
employer's plan, (b) his death or (c) March 27, 2001.
During this period, Sidari will be required to pay
those amounts the Company's employees are customarily
required to pay from time to time for such coverage
and will be entitled to obtain at his expense
optional family/dependent medical coverage under the
Company's group medical plan. After March 27, 2001,
Sidari may continue his coverage to the extent (if
any) and in the manner provided by the "COBRA"
provisions of federal law.
(e) Sidari has participated in various Company sponsored
benefit plans including the Profit-Sharing
Retirement, 401-(k), Employee Stock Purchase and
Incentive Equity plans. Sidari's vested interest in
these plans shall be paid when and as provided in,
and otherwise subject to, the terms, provisions and
conditions of said plans, and nothing in this
Agreement shall modify or override the terms,
provisions or conditions of those plans.
(f) The Company will provide Sidari, at no expense to
him, outplacement services through Manchester
Services or another provider selected by the Company
for a period of up to six months (or longer in the
Company's sole discretion) at a cost not to exceed
$12,500.
(g) In consideration for the non-competition portion of
this agreement in Section 7, Lance agrees to pay
Sidari the sum of $25,575. No withholdings for income
or employment taxes shall be made from the amount
paid pursuant to this Section 3(g).
4. TERMINATION OF THE COMPENSATION AND BENEFITS ASSURANCE AGREEMENT AND
ALL OTHER BENEFITS NOT SPECIFIED IN THIS AGREEMENT. On May 29, 1998, Sidari and
the Company entered into a Compensation and Benefits Assurance Agreement which
was intended to provide Sidari with certain compensation and benefits in the
event of the termination of his employment under certain specified circumstances
in connection with a Change in Control, as defined in the Compensation and
Benefits Assurance Agreement. It is agreed that this Agreement is not being
entered into in connection with a Change in Control, that Sidari is not entitled
to receive any compensation or benefits under the Compensation and Benefits
Assurance Agreement, that the Compensation and Benefits Assurance Agreement is
hereby terminated and that neither party has any further rights and obligations
thereunder. The Company and Sidari acknowledge and agree that all other benefits
and perquisites related to or resulting from Sidari's employment and positions
with the Company and its Affiliates, which are not described and
3
<PAGE> 4
provided for in this Agreement, terminate on the Effective Date, and that the
Company has no further obligations with respect thereto.
5. CONFIDENTIAL INFORMATION AND COMPANY PROPERTY. Sidari acknowledges
that by reason of Sidari's employment by the Company, Sidari has had access to
certain Company "Trade Secrets" (as defined in the North Carolina Trade Secrets
Protection Act, N.C.G.S. ss.66-152) and confidential product formulations
(collectively "Confidential Information"). Sidari agrees that he shall not
directly or indirectly use, reveal, disclose or remove from the Company's
premises Confidential Information or material containing Confidential
Information, without the prior written consent of the Company. In addition,
Sidari agrees that he will turn over and return to the Company no later than
March 27, 2000 all property whatsoever of the Company now in his possession
(including keys and credit cards).
6. EMPLOYMENT TAXES AND WITHHOLDINGS. Sidari acknowledges and agrees
that the Company shall withhold from the payments and benefits described in this
Agreement all taxes, including income and employment taxes, required to be so
deducted or withheld under applicable law.
7. NON-COMPETITION. Sidari agrees that in consideration of the payments
and benefits described in Paragraphs 3(c), (d) and (f) and the accelerated
payment of amounts under Paragraph 4(c) of the Severance Agreement, he will not
during the period March 27, 2000 through September 27, 2000, become employed by,
perform services for or consult with the following corporations, their
subsidiaries or affiliates which are involved in the manufacture or sale of
sandwich crackers, or their successors or assigns: Frito Lay, Nabisco and
Keebler.
8. RELEASE OF THE COMPANY. Sidari, on behalf of himself and his heirs,
personal representatives, successors and assigns, hereby releases and forever
discharges the Company and its Affiliates, and each and every one of their
respective present and former shareholders, directors, officers, employees and
agents, and each of their respective successors and assigns, from and against
any and all claims, demands, actions, causes of action, damages, costs and
expenses, including without limitation all "Employment-Related Claims," which
Sidari now has or may have by reason of any thing occurring, done or omitted to
be done to the date of this Agreement; provided, however, this release shall not
apply to any claims which Sidari may have for the payments or benefits expressly
provided for Sidari or otherwise specifically referred to in this Agreement. For
purposes of this Agreement, "Employment-Related Claims" means all rights and
claims Sidari has or may have:
(i) related to his employment by or status as an employee
of the Company or any of its Affiliates or the
termination of that employment or status or to any
employment practices and policies of the Company, or
its Affiliates; or
(ii) under the federal Age Discrimination in Employment
Act of 1967, as amended ("ADEA").
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<PAGE> 5
9. SPECIAL ADEA WAIVER ACKNOWLEDGEMENTS. SIDARI ACKNOWLEDGES AND AGREES
THAT HE HAS READ THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS AGREEMENT CONTAINS
A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING RIGHTS AND CLAIMS
ARISING UNDER THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS
AMENDED ("ADEA"). SIDARI FURTHER ACKNOWLEDGES AND AGREES THAT:
(a) THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE
ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE DATE OF
THIS AGREEMENT;
(b) HE IS ENTERING INTO THIS AGREEMENT AND RELEASING,
WAIVING AND DISCHARGING RIGHTS OR CLAIMS ONLY IN
EXCHANGE FOR CONSIDERATION WHICH HE IS NOT ALREADY
ENTITLED TO RECEIVE;
(c) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, TO CONSULT WITH AN ATTORNEY BEFORE
EXECUTING THIS AGREEMENT;
(d) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, THAT HE HAS UP TO TWENTY-ONE DAYS (21)
DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT AND THAT
IF HE EXECUTES THIS AGREEMENT PRIOR TO THE EXPIRATION
OF THE TWENTY-ONE (21) DAY PERIOD, THEN HE EXPRESSLY
WAIVES HIS RIGHTS WITH RESPECT TO THE REMAINING TIME
AND THAT THE AGREEMENT WILL BECOME EFFECTIVE
FOLLOWING THE EXPIRATION OF THE SEVEN (7) DAY PERIOD
REFERRED TO IN PARAGRAPH 9 (e) BELOW; AND
(e) HE IS AWARE THAT THIS AGREEMENT WILL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL SEVEN (7) DAYS
FOLLOWING HIS EXECUTION OF THIS AGREEMENT AND THAT HE
MAY REVOKE THIS AGREEMENT AT ANY TIME DURING SUCH
PERIOD BY DELIVERING (OR CAUSING TO BE DELIVERED) TO
THE PRINCIPAL OFFICE OF THE COMPANY NOTICE OF HIS
REVOCATION OF THIS AGREEMENT NO LATER THAN 5:00 P.M.
EASTERN TIME ON THE SEVENTH (7TH) FULL DAY FOLLOWING
HIS EXECUTION OF THIS AGREEMENT.
10. CONFIDENTIALITY OF THIS AGREEMENT; EMPLOYMENT REFERENCE. Sidari
shall not at any time, directly or indirectly, discuss with or disclose to
anyone (other than to members of his immediate family, his attorney, his tax
advisors and the appropriate taxing authorities or as otherwise required by law,
hereinafter "Qualified Persons") the terms of this Agreement, including the
amounts payable hereunder. Sidari further agrees that he shall not discuss with
anyone other than Qualified Persons the circumstances surrounding the
termination of his
5
<PAGE> 6
employment. If any person asks Sidari about the above matters, he will simply
say that he resigned from the Company and all issues relating to his employment
have been resolved. Sidari further agrees that for a period of five years from
the Effective Date, he will refrain from making derogatory comments about the
Company or its agents or affiliates to the Company's customers, suppliers or
employees. The Company agrees that for a period of five years from the Effective
Date, the Company and its officers will likewise refrain from making derogatory
comments about Sidari to the Company's customers, suppliers or employees. The
Company further agrees that if any person makes inquiry concerning Sidari, the
Company will advise such person only as to the dates of Sidari's employment with
the Company, the positions held and that he voluntarily resigned from the
Company.
11. APPLICABLE LAW. This Agreement is made and executed with the
intention that the construction, interpretation and validity hereof shall be
determined in accordance with and governed by the laws of the State of North
Carolina.
12. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns. This Agreement shall be
binding upon and inure to the benefit of Sidari, his heirs, executors and
administrators.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes and
cancels all prior or contemporaneous oral or written agreements and
understandings between them with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed,
and Sidari has hereunto set his hand and seal, all as of the day and year first
above written.
LANCE, INC.
[CORPORATE SEAL]
ATTEST: By s/ E. D. Leake
-------------------------------------
s/ Robert S. Carles Vice President
- ------------------------------------ ---------------------------------------
Secretary Title
s/ Dominic J. Sidari [SEAL]
---------------------------------
Dominic J. Sidari
6
<PAGE> 1
EXHIBIT 10.3
STATE OF NORTH CAROLINA
AGREEMENT
COUNTY OF MECKLENBURG
THIS AGREEMENT (this "Agreement") is entered into as of March 6, 2000
by and between LANCE, INC., a North Carolina corporation (the "Company"), and
GREGORY M. VENNER ("Venner").
STATEMENT OF PURPOSE
Venner has been employed by the Company since February 26, 1997. On
November 7, 1997, the Company and Venner entered into an Executive Severance
Agreement (the "Severance Agreement"), whereby the Company provided Venner with
certain benefits. Venner currently holds the title of Vice President of
Marketing.
The Company has decided to permanently eliminate the job Venner is
performing for the Company. The Company and Venner have entered into
negotiations with a view toward resolving all issues relating to Venner's
employment with the Company and the termination of that employment.
As a result of these negotiations, Venner and the Company have agreed
that Venner and the Company will terminate their relationship on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the Statement of Purpose and the
terms and provisions of this Agreement, the parties hereto mutually agree as
follows:
1. DEFINITIONS. Capitalized terms used in this Agreement that are not
expressly defined herein but are defined in the Severance Agreement have the
respective meanings given those terms in the Severance Agreement. In addition,
as used herein, the following terms shall have the following meanings:
(a) "Affiliate" with reference to the Company means any
Person that directly or indirectly is controlled by,
or is under common control with, the Company. For
purposes of this definition the term "control" means
the possession, directly or indirectly, of the power
to direct or cause the direction of the management
and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
(b) "Person" means any individual, corporation,
association, partnership, business trust, joint stock
company, limited liability company, foundation,
trust, estate or other entity or organization of
whatever nature.
(c) "Effective Date" with reference to this Agreement
means the eighth (8th) day following the execution of
this Agreement, if not a Saturday, Sunday
<PAGE> 2
or legal holiday, and if such day is a Saturday,
Sunday or legal holiday, then the first business day
following such eighth (8th) day.
2. TERMINATION OF EMPLOYMENT; RESIGNATION FROM OFFICES. As the result
of the permanent elimination of his job, the Company does hereby terminate
Venner's employment and as requested by the Company, Venner hereby resigns from
all offices, committees and positions he holds with the Company and its
Affiliates, including but not limited to, Vice President of Marketing of the
Company, with said termination and resignation to be effective as of March 27,
2000. Venner will remain on the payroll through March 27, 2000 and will be
considered during the period March 6, 2000 to March 27, 2000 as being on
vacation, and in such connection will have no duties or responsibilities except
to consult from time to time with Company officials regarding the transfer of
his responsibilities to others. If requested by the Company, Venner will execute
any additional resignation letters, forms or other documents which acknowledge
his resignation from such employment, positions, committees and offices.
3. PAYMENTS BY THE COMPANY. The Company agrees to pay or provide Venner
with the following:
(a) Compensation and benefits to which Venner is
otherwise entitled as an employee of the Company at
Venner's current rate and status through March 27,
2000, in accordance with the Company's generally
applicable policies and procedures (payment for the
period March 6, 2000 through March 27, 2000 shall be
treated as vacation pay and shall exhaust Venner's
accrued vacation entitlement);
(b) Compensation and benefits to which Venner is
otherwise entitled under the Severance Agreement in
accordance with the terms of the Severance Agreement.
For purposes hereof, the Company acknowledges and
agrees that Venner shall be considered to have been
involuntarily terminated Without Cause, and shall be
due all payments and benefits set forth in paragraph
4 of the Severance Agreement. The parties agree that
Venner is entitled to be paid $256,680 under
Paragraph 4(a) of the Severance Agreement, that the
payments described in Paragraph 3(a) in this
Agreement satisfy the obligations described in
Paragraph 4(b) of the Severance Agreement and that
Venner is entitled to receive under Paragraph 4(c) of
the Severance Agreement the greater of (i) $23,207 or
(ii) the actual bonus earned through the Termination
Date. While it is not obligated to make any payment
under Paragraph 4(c) of the Severance Agreement at
this time, the Company agrees to pay Venner $23,207
within thirty (30) days after the Effective Date. If
a larger amount is determined to be due under
Paragraph 4(c) of the Severance Agreement, the
Company will pay the difference between the amount
paid and the amount due at the same time as payments
are made to the Company's other employees under the
Company's Annual Corporate Performance Incentive Plan
for Officers.
2
<PAGE> 3
(c) Possession of the Company automobile used by Venner
in connection with his employment together with
conveyance of title to said automobile promptly
following the Effective Date of this Agreement;
(d) Health benefits for Venner under the Company's group
medical plan until the earlier of (a) the date Venner
becomes eligible for coverage under another
employer's plan, (b) his death or (c) March 27, 2001.
During this period, Venner will be required to pay
those amounts the Company's employees are customarily
required to pay from time to time for such coverage
and will be entitled to obtain at his expense
optional family/dependent medical coverage under the
Company's group medical plan. After March 27, 2001,
Venner may continue his coverage to the extent (if
any) and in the manner provided by the "COBRA"
provisions of federal law.
(e) Venner has participated in various Company sponsored
benefit plans including the Profit-Sharing
Retirement, 401-(k), Employee Stock Purchase and
Incentive Equity plans. Venner's vested interest in
these plans shall be paid when and as provided in,
and otherwise subject to, the terms, provisions and
conditions of said plans, and nothing in this
Agreement shall modify or override the terms,
provisions or conditions of those plans.
(f) The Company will provide Venner, at no expense to
him, outplacement services through Manchester
Services or another provider selected by the Company
for a period of up to six months (or longer in the
Company's sole discretion) at a cost not to exceed
$12,500.
(g) In consideration for the non-competition portion of
this agreement, in Section 7, Lance agrees to pay
Venner the sum of $49,575. No with-holdings for
income or employment taxes shall be made from the
amount paid pursuant to this section 3(g).
4. TERMINATION OF THE COMPENSATION AND BENEFITS ASSURANCE AGREEMENT AND
ALL OTHER BENEFITS NOT SPECIFIED IN THIS AGREEMENT. On November 7, 1997, Venner
and the Company entered into a Compensation and Benefits Assurance Agreement
which was intended to provide Venner with certain compensation and benefits in
the event of the termination of his employment under certain specified
circumstances in connection with a Change in Control, as defined in the
Compensation and Benefits Assurance Agreement. It is agreed that this Agreement
is not being entered into in connection with a Change in Control, that Venner is
not entitled to receive any compensation or benefits under the Compensation and
Benefits Assurance Agreement, that the Compensation and Benefits Assurance
Agreement is hereby terminated and that neither party has any further rights and
obligations thereunder. The Company and Venner acknowledge and agree that all
other benefits and perquisites related to or resulting from Venner's employment
and positions with the Company and its Affiliates, which are not
3
<PAGE> 4
described and provided for in this Agreement, terminate on the Effective Date,
and that the Company has no further obligations with respect thereto.
5. CONFIDENTIAL INFORMATION AND COMPANY PROPERTY. Venner acknowledges
that by reason of Venner's employment by the Company, Venner has had access to
certain Company "Trade Secrets" (as defined in the North Carolina Trade Secrets
Protection Act, N.C.G.S. ss.66-152) and confidential product formulations
(collectively "Confidential Information"). Venner agrees that he shall not
directly or indirectly use, reveal, disclose or remove from the Company's
premises Confidential Information or material containing Confidential
Information, without the prior written consent of the Company. In addition,
Venner agrees that he will turn over and return to the Company no later than
March 27, 2000 all property whatsoever of the Company now in his possession
(including keys and credit cards).
6. EMPLOYMENT TAXES AND WITHHOLDINGS. Venner acknowledges and agrees
that the Company shall withhold from the payments and benefits described in this
Agreement all taxes, including income and employment taxes, required to be so
deducted or withheld under applicable law.
7. NON-COMPETITION. Venner agrees that in consideration of the payments
and benefits described in Paragraphs 3(c), (d) and (f) and the accelerated
payment of amounts due under Paragraph 4(c) of the Severance Agreement, he will
not during the period March 27, 2000 through September 27, 2000, become employed
by, perform services for or consult with the following corporations, their
subsidiaries or affiliates which are involved in the manufacture or sale of
sandwich crackers, or their successors or assigns: Frito Lay, Nabisco and
Keebler.
8. RELEASE OF THE COMPANY. Venner, on behalf of himself and his heirs,
personal representatives, successors and assigns, hereby releases and forever
discharges the Company and its Affiliates, and each and every one of their
respective present and former shareholders, directors, officers, employees and
agents, and each of their respective successors and assigns, from and against
any and all claims, demands, actions, causes of action, damages, costs and
expenses, including without limitation all "Employment-Related Claims," which
Venner now has or may have by reason of any thing occurring, done or omitted to
be done to the date of this Agreement; provided, however, this release shall not
apply to any claims which Venner may have for the payments or benefits expressly
provided for Venner or otherwise specifically referred to in this Agreement. For
purposes of this Agreement, "Employment-Related Claims" means all rights and
claims Venner has or may have:
(i) related to his employment by or status as an employee
of the Company or any of its Affiliates or the
termination of that employment or status or to any
employment practices and policies of the Company, or
its Affiliates; or
(ii) under the federal Age Discrimination in Employment
Act of 1967, as amended ("ADEA").
4
<PAGE> 5
9. SPECIAL ADEA WAIVER ACKNOWLEDGEMENTS. VENNER ACKNOWLEDGES AND AGREES
THAT HE HAS READ THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS AGREEMENT CONTAINS
A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING RIGHTS AND CLAIMS
ARISING UNDER THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS
AMENDED ("ADEA"). VENNER FURTHER ACKNOWLEDGES AND AGREES THAT:
(a) THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE
ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE DATE OF
THIS AGREEMENT;
(b) HE IS ENTERING INTO THIS AGREEMENT AND RELEASING,
WAIVING AND DISCHARGING RIGHTS OR CLAIMS ONLY IN
EXCHANGE FOR CONSIDERATION WHICH HE IS NOT ALREADY
ENTITLED TO RECEIVE;
(c) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, TO CONSULT WITH AN ATTORNEY BEFORE
EXECUTING THIS AGREEMENT;
(d) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, THAT HE HAS UP TO TWENTY-ONE DAYS (21)
DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT AND THAT
IF HE EXECUTES THIS AGREEMENT PRIOR TO THE EXPIRATION
OF THE TWENTY-ONE (21) DAY PERIOD, THEN HE EXPRESSLY
WAIVES HIS RIGHTS WITH RESPECT TO THE REMAINING TIME
AND THAT THE AGREEMENT WILL BECOME EFFECTIVE
FOLLOWING THE EXPIRATION OF THE SEVEN (7) DAY PERIOD
REFERRED TO IN PARAGRAPH 9 (e) BELOW; AND
(e) HE IS AWARE THAT THIS AGREEMENT WILL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL SEVEN (7) DAYS
FOLLOWING HIS EXECUTION OF THIS AGREEMENT AND THAT HE
MAY REVOKE THIS AGREEMENT AT ANY TIME DURING SUCH
PERIOD BY DELIVERING (OR CAUSING TO BE DELIVERED) TO
THE PRINCIPAL OFFICE OF THE COMPANY NOTICE OF HIS
REVOCATION OF THIS AGREEMENT NO LATER THAN 5:00 P.M.
EASTERN TIME ON THE SEVENTH (7TH) FULL DAY FOLLOWING
HIS EXECUTION OF THIS AGREEMENT.
10. CONFIDENTIALITY OF THIS AGREEMENT; EMPLOYMENT REFERENCE. Venner
shall not at any time, directly or indirectly, discuss with or disclose to
anyone (other than to members of his immediate family, his attorney, his tax
advisors and the appropriate taxing authorities or as otherwise required by law,
hereinafter "Qualified Persons") the terms of this Agreement, including the
amounts payable hereunder. Venner further agrees that he shall not discuss with
anyone other than Qualified Persons the circumstances surrounding the
termination of his
5
<PAGE> 6
employment. If any person asks Venner about the above matters, he will simply
say that he resigned from the Company and all issues relating to his employment
have been resolved. Venner further agrees that for a period of five years from
the Effective Date, he will refrain from making derogatory comments about the
Company or its agents or affiliates to the Company's customers, suppliers or
employees. The Company agrees that for a period of five years from the Effective
Date, the Company and its officers will likewise refrain from making derogatory
comments about Venner to the Company's customers, suppliers or employees. The
Company further agrees that if any person makes inquiry concerning Venner, the
Company will advise such person only as to the dates of Venner's employment with
the Company, the positions held and that he voluntarily resigned from the
Company.
11. APPLICABLE LAW. This Agreement is made and executed with the
intention that the construction, interpretation and validity hereof shall be
determined in accordance with and governed by the laws of the State of North
Carolina.
12. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns. This Agreement shall be
binding upon and inure to the benefit of Venner, his heirs, executors and
administrators.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes and
cancels all prior or contemporaneous oral or written agreements and
understandings between them with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed,
and Venner has hereunto set his hand and seal, all as of the day and year first
above written.
LANCE, INC.
[CORPORATE SEAL]
ATTEST: By s/ E. D. Leake
-------------------------------------
s/ Robert S. Carles Vice President
- ------------------------------------ ---------------------------------------
Secretary Title
s/ Gregory M. Venner [SEAL]
---------------------------------
Gregory M. Venner
6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF LANCE, INC. FOR THE THIRTEEN WEEKS ENDED MARCH 25, 2000
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-2000
<PERIOD-START> DEC-26-1999
<PERIOD-END> MAR-25-2000
<CASH> 2,807
<SECURITIES> 0
<RECEIVABLES> 54,942
<ALLOWANCES> (2,632)
<INVENTORY> 23,831
<CURRENT-ASSETS> 86,876
<PP&E> 396,372
<DEPRECIATION> (217,433)
<TOTAL-ASSETS> 314,238
<CURRENT-LIABILITIES> 35,844
<BONDS> 0
0
0
<COMMON> 24,134
<OTHER-SE> 148,084
<TOTAL-LIABILITY-AND-EQUITY> 314,238
<SALES> 135,630
<TOTAL-REVENUES> 135,630
<CGS> 64,015
<TOTAL-COSTS> 126,652
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,157
<INCOME-PRETAX> 9,172
<INCOME-TAX> 3,428
<INCOME-CONTINUING> 5,744
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,744
<EPS-BASIC> 0.20
<EPS-DILUTED> 0.20
</TABLE>
<PAGE> 1
EXHIBIT 99.1
CAUTIONARY STATEMENT UNDER SAFE HARBOR PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Lance, Inc. (the Company), from time to time, makes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements, which may be written or oral, reflect expectations of
management of the Company at the time such statements are made. The Company is
filing this cautionary statement to identify certain important factors that
could cause the Company's actual results to differ materially from those in any
forward-looking statements made by or on behalf of the Company.
PRICE COMPETITION AND CONSOLIDATION
The sales of most of the Company's products are subject to intense
competition primarily through discounting and other price cutting techniques by
competitors, many of whom are significantly larger and have greater resources
than the Company. In addition, there is a continuing consolidation by the major
companies in the snack food industry which could increase competition.
RAW MATERIALS
The Company's cost of sales can be adversely impacted by changes in the
cost of raw materials, principally flour, peanuts and peanut butter. While the
Company obtains substantial commitments for the future delivery of certain of
its raw materials and engages in limited hedging to reduce the price risk of
these raw materials, continuing long-term increases in the costs of raw
materials could adversely impact the Company's cost of sales.
SALES GROWTH
The Company's plans for profitable sales growth depend upon the ability
of the Company to develop and execute effective marketing and sales strategies
for its products. Efforts to generate profitable sales growth have resulted in
increases in selling, marketing and delivery costs. There is no assurance that
these investments in sales, marketing and delivery efforts will generate
profitable sales growth.
LEVERAGED BUSINESS
Until April 1999, the Company had funded its needs for capital
expenditures, cash dividends and stock repurchases through cash from operations
and investments. As a result of acquisitions and continuing capital expenditure
requirements, future liquidity needs will be funded through operations and,
possibly, increased borrowings. The effects of a leveraged business could have
an adverse impact upon the Company's financial condition and results of
operations.
There are other important factors not described above that could also
cause actual results to differ materially from those in any forward-looking
statement made by or on behalf of the Company.
