This Stock Purchase Agreement involves
Title: LANCE, INC. 2005 EMPLOYEE STOCK PURCHASE PLAN
Industry: Food Processing Sector: Consumer/Non-Cyclical
2005 EMPLOYEE STOCK PURCHASE PLAN
(Amended and Restated effective January 1, 2007)
1. Establishment of Plan . Lance, Inc. (the “Company”) previously established the Employee Stock Purchase Plan of Lance, Inc. (the “Prior Plan”). The Company established a new plan, to be known as the Lance, Inc. 2005 Employee Stock Purchase Plan (the “Plan”), which superseded and replaced the Prior Plan upon the Plan becoming effective pursuant to Paragraph 25 below. This document constitutes an amendment and restatement of the Plan to reflect (i) a change in the timing of purchases under the Plan and (ii) a change in the Agent under the Plan since the Plan was originally effective.
2. Purpose . The purpose of the Plan is to give employees of the Company and its subsidiaries wishing to do so a means of purchasing stock in the Company through payroll deductions. The Company believes that ownership of stock by employees will foster increased employee interest in the Company’s success, growth and development. The class of stock which is to be purchased under the Plan is the $.83-1/3 par value Common Stock of the Company (the “Stock”).
3. Available Shares . Subject to the provisions of this Paragraph 3, the aggregate number of shares of Stock that may be purchased by Participants under the Plan shall not exceed 300,000 shares. Notwithstanding the foregoing, in the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Internal Revenue Code) or any partial or complete liquidation of the Company, such adjustment shall be made in the number and class of shares of Stock which may be purchased by Participants under the Plan as may be determined to be appropriate and equitable by the Administrative Committee (appointed by the Board of Directors of the Company), in its sole discretion.
4. Eligibility . All regular full-time employees over 18 years of age with l full year of service are eligible to participate in the Plan on a voluntary payroll deduction basis. For purposes of the Plan, “regular full-time employee” means an employee of the Company or its subsidiaries with customary employment for at least 20 hours per week and five months per calendar year. However, when an employee who has become a participant in the Plan subsequently withdraws from the Plan, the employee is ineligible to rejoin the Plan for 24 full weeks from the Withdrawal Date (as defined in Paragraph 16). Notwithstanding any provision herein to the contrary, no employee of the Company who beneficially owns five percent (5%) or more of the Stock shall be eligible to participate in the Plan.
5. Participation . Participation in the Plan is entirely voluntary. An eligible employee may become a participant in the Plan (“Participant”) by completing a Payroll Deduction Authorization Form and submitting it to the Corporate Benefits Department of the Company or the
Human Resources Department of the Company’s subsidiaries at least five business days before the date on which the employee’s pay is to be subject to the first deduction. The employee incurs no fee on becoming a Participant.
6. Employee Contribution . Each Participant shall make a contribution under the Plan each pay period in an amount determined by the Participant ranging from a minimum of $5 per week to a maximum of 10% of the Participant’s base pay for the pay period (or in the case of a commission sales representative, a maximum of 10% of the amount equal to the quotient of the Participant’s total sales commissions for the preceding calendar year divided by the number of pay periods in such year). The contribution for each pay period shall be a multiple of $1. Payroll deduction of contributions shall be made each pay period.
Subject to the above limitations, the Participant may at any time change the amount of his or her payroll deduction by completing in duplicate a Change in Payroll Deduction Form and forwarding it to the Corporate Benefits Department of the Company or the Human Resources Department of the Company’s subsidiaries. This change will be effective for the pay period following the pay period in which the Change in Payroll Deduction Form is received.
7. Employer Contribution . The Company shall make a contribution under the Plan every pay period in an amount equal to 10% of the payroll deductions of a Participant for that pay period; provided, however, that the President and Chief Executive Officer of the Company may establish a Company contribution rate of up to 25% for any Participant as may be selected from time to time by the President and Chief Executive Officer of the Company, provided such Participant is not an officer of the Company, as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934.
8. The Agent. AST Equity Plan Solutions, Inc., or such other third party administrator as may be selected from time to time by the Company (the “Agent”), shall administer the Plan and receive and hold funds and Stock in the Plan. The Agent, with the consent of the Administrative Committee of the Company, shall have the power and authority to establish such procedures as the Agent deems necessary to effect equitably the provisions and intent of the Plan.
9. Initiation of Participation in the Plan . The employee initiates his or her participation in the Plan by completing the Payroll Deduction Authorization Form and submitting it to the Corporate Benefits Department of the Company or the Human Resources Department of the Company’s subsidiaries at least five business days before the pay day on which the first payroll deduction is to be made. Upon timely receipt of the Payroll Deduction Authorization Form, and until the Participant withdraws from the Plan, the Company shall deduct the authorized deduction from the Participant’s paycheck each pay period and pay this amount to the Agent as soon as administratively practicable after the pay period.
10. Stock Purchases . With the funds then available, the Agent shall purchase shares of Stock on the open market at the then current market price. The Company shall bear the expenses of such purchases. Purchases shall be made as soon as administratively practicable after each pay period, but no later than 30 days after the pay period except as otherwise provided herein, if the following three conditions are met: (a) prior to the date of purchase the Agent shall have received
the employer and employee contributions for such pay period, (b) during such 30-day period , there shall be a trading day for the Stock, and (c) during such 30-day period purchases of the Stock shall be permitted under the Federal Securities laws and all other applicable laws. In the event that these three conditions are not met during the 30 days after the pay period, the Agent shall make purchases on the first day after such 30-day period on which these three conditions are met. The shares purchased by the Agent shall be allocated to the “Stock Position” in each Participant’s Account on a proportionate basis. No fractional shares shall be purchased in the market, but the Stock Position in each Participant’s “Account” shall reflect an allocation of fractional shares up to three decimal places. Shares may be purchased on any securities exchange on which the Stock is traded, in the over-the-counter market or in negotiated transactions; provided, however, that no purchases may be made from the Company or any affiliate of the Company. In making purchases, the Agent may commingle the Participant’s funds with those of other Participants. Neither the Company nor the Agent shall have any liability in connection with the timing of such purchases or the price at which the Stock is purchased.
11. Agent’s Custody of Stock . Stock allocated to a Participant’s Account is fully vested in the Participant, notwithstanding the fact that the Stock may be held in the name of the Plan, the Agent or the Agent’s nominee. Until otherwise notified in writing as provided in Paragraph 12, the Agent will hold the certificates for the shares of Stock held in each Participant’s Account and any cash dividends received by the Agent with respect to such shares will be used to purchase additional Stock for each Participant’s Account.
Any stock dividend or shares issued pursuant to a stock split which are received by the Agent with respect to shares of Stock held in a Participant’s Account shall be credited to the Participant’s Stock Position on a proportionate basis. The Agent shall sell any stock rights or warrants applicable to any Stock held in a Participant’s Stock Account and add the proceeds to the “Cash Position” in the Participant’s Account. If such rights or warrants do not have a market value, the Agent may allow them to expire.
12. Participant’s Rights in the Stock . Stock certificates shall be issued to a Participant for full shares in his or her Account upon written request to the Agent. After the issuance of such certificates, the Participant shall have all rights therein, and neither the Agent nor the Company shall have any responsibility with respect to such certificates or such Stock.
The Agent will not vote shares held for the Participant’s Account. A proxy form will be forwarded to each Participant of record to be voted in his or her own discretion. All other communications from the Company to its stockholders will be forwarded to each Participant of record.
13. Expenses . The Company will bear the expense of administering the Plan and having the Agent purchase shares of the Stock and hold them until certificates are issued to the Participants, including any brokerage commissions and transfer taxes in transferring the Stock from the Plan to the Participants.
If a Participant requests that Stock in his or her Account be sold pursuant to Paragraph 15 or Paragraph 23, the Participant shall bear the expenses which a person would normally pay if he or
she sold shares through a broker. Such expenses, which shall include any broker’s fees, commissions and postage actually incurred, shall be deducted from the Participant’s proceeds from the sale of such shares.
14. Reports to Participants . The Agent shall render a report to each Participant as