SNYDERS-LANCE, INC. (NASDAQ:LNCE) Files An 8-K Results of Operations and Financial Condition
Item2.02
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Results of Operations and Financial Condition. |
On April17, 2017, Snyders-Lance Inc. (the
Company) issued a press release with respect to its preliminary
financial results for the first quarter ended April1, 2017. A
copy of the press release is being furnished as Exhibit 99.1
attached hereto and is incorporated herein by reference. The
Company also held a conference call and live webcast on April17,
2017 to discuss its preliminary financial results, which may be
accessed via replay telephone or web-based replay as described in
the press release. The press release contains forward-looking
statements regarding the Company and includes cautionary
statements identifying important factors that could cause actual
results to differ materially.
The exhibits
attached hereto also present measures not derived in accordance
with generally accepted accounting principles (GAAP). The Company
believes these non-GAAP financial measures provide useful
information to investors as the measures emphasize core
on-going
operations and are helpful in comparing past and present
operating results. The Company uses these measures to evaluate
past performance and prospects for future performance. The
presentation of non-GAAP financial measures by
the Company should not be considered in isolation or as a
substitute for the Companys financial results prepared in
accordance with GAAP.
The information furnished
under this Item 2.02 shall not be deemed filed for purposes of
Section18 of the Securities Exchange Act of 1934, as amended, nor
shall it or Exhibit 99.1 be deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in a
filing.
Item5.02 Departureof
Directors or Certain Officers; Election of Directors; Appointment
of Certain Officers; Compensatory Arrangements of Certain
Officers.
Effective as of April11, 2017
(the Effective Date), Carl E. Lee, Jr. retired from his positions
as President and Chief Executive Officer and a member of the
Board of Directors of the Company, as well as from his positions
as an officer and/or director of each of the Companys
subsidiaries.
Brian J. Driscoll, age 58 and
a member of the Companys Board of Directors since February 2016,
has assumed the responsibilities of interim Chief Executive
Officer effective as of April11, 2017.Mr.Driscoll previously
served as President and Chief Executive Officer of Diamond Foods,
Inc. (Diamond) and was a member of the Diamond board of directors
from May 2012 until the Company acquired Diamond in February
2016. Prior to joining Diamond, from June 2010 to March 2012,
Mr.Driscoll was Chief Executive Officer of Hostess Brands, which
filed for Chapter 11 bankruptcy protection in January 2012. From
2002 to June 2010, he held senior management positions at Kraft
Foods, Inc., including as President, Sales, Customer Service and
Logistics, Kraft North America from 2007 to June 2010.
Mr.Driscoll joined Kraft Foods, Inc. as a result of Krafts
acquisition of Nabisco, where he worked from 1995 to 2002, first
as President of Sales and Integrated Logistics and later as the
Senior Vice President, Biscuit Sales and Customer Service.
Mr.Driscoll holds a B.S. degree from St. Johns
University.
In connection with
Mr.Driscolls appointment as interim Chief Executive Officer, he
entered into an offer letter with the Company on April11, 2017
(Driscoll Agreement) to which he was named interim Chief
Executive Officer. Under the terms of the Driscoll Agreement,
Mr.Driscoll will be paid $75,000 per month and is eligible for
the Companys 2017 Annual Performance Incentive Plan for Officers
and Key Managers with a target bonus of $890,000, prorated for
each day of fiscal year 2017 that he is employed as interim Chief
Executive Officer. Additionally, to the extent other bonus
programs are made available to the senior executive team,
Mr.Driscoll will also be eligible for the maximum bonus
percentage opportunity consistent with the other senior executive
team members and the criteria for such bonus opportunities will
also be consistent with the criteria for such other senior
executive team members. Mr.Driscoll will also remain a member of
the Companys Board of Directors and will continue to be treated
as in-service for
purposes of vesting and exercisability of his outstanding equity
awards; however, he will not receive any additional compensation
as a non-employee director while he is employed by the
Company.
On the 30th day after his
appointment, Mr.Driscoll will also be granted equity awards
(collectively, the Equity Award) comprised of (i)a restricted
stock award with a fair market value of $300,000 and (ii)an
option
award with a Black Scholes
value of $300,000 with an exercise price equal to the closing
price of the Companys stock on the grant date. The Equity Award
shall be subject to the following terms and conditions: (x)the
Equity Award shall vest and become fully exercisable at the end
of the sixth month period following the grant date subject to
Mr.Driscolls continued employment as the interim Chief Executive
Officer, (y)upon a Change of Control of the Company or in the
event that Mr.Driscolls employment is terminated due to death,
disability, or by the Company without Cause or by Mr.Driscoll for
Good Reason (as such defined terms are defined in the applicable
award agreements), the Equity Award will vest and become
exercisable in full and will remain exercisable so long as
Mr.Driscoll remains a director and for no less than three months
thereafter; and (z)the Equity Award will be subject to the terms
and conditions of the 2016 Key Employee Incentive Plan and such
award agreements as provided by the Compensation Committee of the
Company. Additionally, Mr.Driscoll shall (A)have access to the
Company-owned apartment in Charlotte, NC or receive a monthly
housing stipend of $2,500, less required tax withholdings, (B)be
reimbursed for his reasonable travel expenses from his home to
Charlotte, NC and be eligible for reimbursement of his reasonable
travel and business expenses in accordance with the terms of the
Companys expense reimbursement policy, (C)be reimbursed for his
legal fees in connection with the Driscoll Agreement not to
exceed $5,000, (D) be provided coverage under the Companys
director and officer liability insurance policy at the Companys
sole expense and indemnification fullest extent permitted by the
Companys organizational documents and applicable law, and (E)be
entitled to participate in the Companys employee benefit plans,
including health, dental, disability, life and 401(k) in
accordance with the terms and conditions thereof. The Driscoll
Agreement will automatically terminate six months from the
Effective Date unless both parties agree to extend
it.
In connection with his
departure, Mr.Lee and the Company entered into a Retirement
Agreement and General Release dated April11, 2017 (the Lee
Agreement).Mr.Lee has the right, exercisable on or before April
24, 2017, to revoke the Lee Agreement.The Lee Agreement will
become effective on April 25, 2017 if Mr.Lee has not previously
revoked it.
to the terms of the Lee
Agreement, Mr.Lee will receive the payments and other benefits to
which he would have otherwise been entitled had his employment
been terminated without cause under the Executive Severance
Agreement, dated January25, 2012, between Mr.Lee and the Company,
as subsequently amended by the Amendment to Executive Severance
Agreement dated December12, 2016 (collectively, the Executive
Severance Agreement).As a result, Mr.Lee received a payment
representing his unpaid base salary, unused vacation pay,
unreimbursed business expenses and all other items earned by and
owed to Mr.Lee through the Effective
Date.
Additionally, in accordance
with the terms of the Lee Agreement, Mr.Lee will also receive or
be entitled to (i)a total payment of $3,560,000, which is his
base salary and target bonus multiplied by two and is payable in
24 monthly installments, commencing on or about the 60th day following the Effective
Date; (ii)be eligible for the Companys 2017 Annual Performance
Incentive Plan for Officers and Key Managers, subject to actual
performance and paid when paid to other plan participants and
prorated for the number of days employed in fiscal 2017, which
was 101 days out of 365 days; (iii)be eligible for a prorated
portion of his outstanding performance equity awards, subject to
the satisfaction of the performance goals and paid when active
employees are paid for the same performance awards; (iv)be
eligible for awards, if any, owed to the (A) 2015 long term
incentive plan annual grant with a three year performance period
payable in 2018 when other active eligible employees are paid,
(B) 2016 long term incentive plan annual grant with a three year
performance period payable in 2019 when other active eligible
employees are paid and (C) 2017 long term incentive plan annual
grant with a three year performance period payable in 2020 when
other active eligible employees are paid; (v)exercise his
outstanding vested options for a period of one year following the
Effective Date (or the original expiration date, if earlier),
while outstanding unvested equity awards will not be accelerated
and will be forfeited and cancelled, except for the 302,867
options he received to the Executive Retention Agreement dated
May13, 2016, which shall continue to vest in accordance with the
current vesting schedule (vesting on May13, 2019), except for the
continuous employment requirement, and shall be exercisable for a
period of one year following the vesting date,
(vi)indemnification from any claims asserted against Mr.Lee
arising out of his prior performance of his duties with the
Company and its affiliates to the same extent as the Company
indemnifies the Companys retired officers or directors; (vii)one
year of outplacement assistance, not to exceed a value of
$89,0000; and (viii)reimbursement of applicable health plan
reimbursements for up to three years, subject to the limitations
set forth in the Executive Severance
Agreement.
The Lee Agreement contains a
general release by Mr.Lee of all claims against the Company and
its affiliates and a reaffirmation of Mr.Lees obligations under
the Executive Severance Agreement, including,
without
limitation, Mr.Lees covenant
not to compete and not to solicit the Companys customers or
employees, and his confidentiality obligations.Mr.Lee has also
agreed to cooperate with the Company for the indefinite future in
connection with management transition, licensing issues, pending
and potential disputes and other matters relating to the Companys
corporate or professional
liabilities.
The descriptions of the
Driscoll Agreement and Lee Agreement set forth above are
qualified in their entirety by reference to the actual terms of
the Driscoll Agreement and Lee Agreement, which are filed as
Exhibits 10.1 and 10.2, respectively, to this Current Report on
Form 8-K and are incorporated by reference
herein.
On April 17, 2017, the Company
issued a press release regarding Mr. Lees departure from the
Company and Mr. Driscolls assumption of the responsibilities of
interim Chief Executive Officer. A copy of the press release is
attached hereto as Exhibit 99.1. The Company also held a
conference call and live webcast on April 17, 2017 to discuss the
changes to management, which may be accessed via reply telephone
or web-based replay, as described in the press
release.
| Item9.01 | Financial Statements and Exhibits. |
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Exhibit Number |
Description of Exhibit |
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| 10.1 |
Offer Letter, dated April11, 2017, by and between Snyders-Lance, Inc. and Brian J. Driscoll |
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| 10.2 |
Retirement Agreement and General Release, dated April 11, 2017, by and between Snyders-Lance, Inc. and CarlE.Lee, Jr. |
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| 99.1 |
Press Release issued by Snyders-Lance, dated April17, 2017, with respect to CEO Transition and Preliminary First Quarter 2017 Results |
About SNYDER’S-LANCE, INC. (NASDAQ:LNCE)
Snyder’s-Lance, Inc. is a snack food company. The Company is engaged in the manufacturing, distribution, marketing and sale of snack food products. Its products include pretzels, sandwich crackers, kettle cooked chips, pretzel crackers, cookies, potato chips, tortilla chips, restaurant style crackers, popcorn, nuts and other salty snacks. It owns various names for use with its Branded products, including Snyder’s of Hanover; Lance; Cape Cod; Snack Factory Pretzel Crisps; Pop Secret; Emerald; Kettle Brand; KETTLE Chips, and Late July (collectively, Core brands). Its brands also include Metcalfe’s skinny; Tom’s; Archway; Jays; Stella D’oro; Eatsmart Snacks; Krunchers!, and O-Ke-Doke (collectively, Allied brands), as well as a range of other marks and designs. Its products are packaged in various single-serve, multi-pack, family-size and party-size configurations. It distributes snack food products throughout the United States using its direct-store-delivery distribution network. SNYDER’S-LANCE, INC. (NASDAQ:LNCE) Recent Trading Information
SNYDER’S-LANCE, INC. (NASDAQ:LNCE) closed its last trading session down -6.16 at 33.76 with 807,155 shares trading hands.