This Proxy Statement is furnished to the shareholders of Lancaster Colony Corporation (the “Corporation”) in connection with the solicitation by the Board of Directors of the Corporation (the “Board”) of proxies to be used in voting at the Annual Meeting of Shareholders to be held November 15, 2010,18, 2013, in the Bexley ILilac meeting room at the Embassy Suites Hotel, 2886 AirportThe Hilton Columbus at Easton, 3900 Chagrin Drive, Columbus, Ohio 43219, at 11:0030 a.m., Eastern Standard Time (the “Annual Meeting”). The enclosed proxy card, if completed and forwarded to the Corporation prior to the Annual Meeting, will be voted in accordance with the instructions contained therein. The proposals referred to on the enclosed proxy card are described in this Proxy Statement. This Proxy Statement and enclosed proxy card are first being mailed to shareholders on or about October 15, 2010.

A proxy may be revoked by the person giving it any time before it is exercised. Such revocation, to be effective, must be communicated to the Secretary or Assistant Secretary of the Corporation prior to the Annual Meeting. The presence of a shareholder at the Annual Meeting will not revoke his or her proxy unless specific notice thereof is given to the Secretary or Assistant Secretary of the Corporation.

The Corporation will bear the cost of solicitation of proxies, including any charges and expenses of brokerage firms and others for forwarding solicitation material to the beneficial owners of the Corporation’s shares. Proxies may be solicited by personal interview, mail, telephone and electronic communications through the efforts of officers and regular employees of the Corporation.

The Board has fixed the close of business on September 17, 201020, 2013 as the record date for the determination of shareholders entitled to receive notice and to vote at the Annual Meeting or any adjournments or postponements thereof. At September 17, 2010,20, 2013, the Corporation had outstanding and entitled to vote 27,992,22927,284,284 shares of Common Stock, without par value (“Common Stock”), with each share of Common Stock entitling its holder to one vote. The Corporation has no other class of stock outstanding.

The presence, in person or by proxy, of a majority of the outstanding shares of Common Stock of the Corporation is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Proxies reflecting abstentions and broker non-votes are counted for purposes of determining the presence or absence of a quorum. Broker non-votes occur when brokers, who hold their customers’ shares in street name, sign and submit proxies for those shares but fail to vote those shares on some matters.

If you are the beneficial owner of shares held in “street name” by a broker, bank or other nominee, the broker, bank or nominee, as the record holder of the shares, should have enclosed a voting instruction card for you to use in directing it on how to vote your shares.

The following are the voting requirements for the items of business listed on the Notice of Annual Meeting of Shareholders that are expected to be conducted at the Annual Meeting, along with an explanation of how broker non-votes and abstentions will be treated for purposes of each proposal:

The Board currently consists of nine members and is divided into three classes of three members each. The members of the three classes are elected to serve for staggered terms of three years.

The names and ages of the Corporation’s nominees for director and continuing directors; their principal occupations during the past five years; their specific experiences, qualifications, attributes or skills that qualify them to serve as directors; and certain other information are listed below. Except for Mr. Kenneth L. Cooke, eachEach of the nominees is a director standing for re-election. Mr. Henry M. O’Neill Jr. has reached mandatory retirement age and is not standing for re-election. Mr. Cooke has been nominated by the Board to fill the vacancy that would otherwise be created by Mr. O’Neill’s retirement. Mr. Cooke was selected by the Nominating and Governance Committee and nominated by the Board after an extensive search for a qualified candidate. The Nominating and Governance Committee fielded potential candidates from a variety of sources, including those suggested by other Board members. Mr. Cooke was first identified and recommended by a Board member. Mr. Cooke was selected as a nominee based upon his extensive business background and experience, his cultural fit with the Board, and his ability and willingness to serve as a director of the Corporation. Each nominee has consented to stand for election for a term expiring at the Corporation’s 20132016 Annual Meeting of Shareholders. In the event that any of the nominees becomes unavailable to serve as a director before the Annual Meeting, the Board will designate a new nominee and the persons named as proxies will vote for that substitute nominee.

The Board of Directors recommends a vote “FOR” the election of each of the nominees listed below by executing and returning the enclosed proxy card.

The Board has standing Audit, Compensation, Nominating and Governance and Executive Committees. In addition, the Board has adopted a Corporate Governance Program that includes Corporate Governance Principles, a Code of Business Ethics and Standards of Conduct. The charters of the Audit, Compensation and Nominating and Governance Committees and the Corporate Governance Principles, Code of Business Ethics and Standards of Conduct are posted on the corporate governance page of the Corporation’s web site atwww.lancastercolony.com.

Director Independence — The Board and the Nominating and Governance Committee have reviewed and evaluated transactions and relationships with Board members to determine the independence of each of the members. The Board does not believe that any of its nonemployee members have relationships with the Corporation that would interfere with the exercise of independent judgment in carrying out his or her responsibilities as a director. The Board and the Nominating and Governance Committee have determined that a majority of the Board’s members are “independent directors,” as that term is defined in the applicable Nasdaq Global Select Market (“Nasdaq”) listing standards. The Board has identified and determined that Ms. Bendapudi and Messrs. Bachmann, Cooke, Fox, Harris, Jennings O’Neill and Sofia are independent directors or director nominees.

Board Attendance — Each member of the Board is expected to make a reasonable effort to attend all meetings of the Board, all applicable committee meetings, and each annual meeting of shareholders. All members of the Board attended the 20092012 Annual Meeting of Shareholders and each of the current members of the Board plus Mr. Cooke is expected to attend the 20102013 Annual Meeting. The Board held a total of five meetings during fiscal

Board Leadership Structure — Mr. John B. Gerlach, Jr., the Corporation’s Chief Executive Officer (“CEO”), currently serves as the Corporation’s Chairman of the Board. The Board believes that the Corporation and its shareholders are best served by retaining the Board’s flexibility to allocate the responsibilities of Chairman of the Board and CEO in any way that is in the best interests of the Corporation at any future point in time. Adopting a policy that restricts the Board’s discretion in selecting the Chairman of the Board (as well as restricting the ability to combine the positions of Chairman and CEO) would deprive the Board of the ability to select the most qualified and appropriate individual to lead the Board as Chairman.

In November 2007, the Board amended its Corporate Governance Principles to provide that the Corporation shall have a Lead Independent Director at any time during which the positions of Chairman of the Board and CEO are held by the same person. At that time, Mr. James Bachmann was appointed Lead Independent Director. Under the amended Corporate Governance Principles, the Lead Independent Director:

Mr. Gerlach, in his capacities as Chairman and CEO, serves as a bridge between the Board and management and provides critical leadership for carrying out the Corporation’s strategic initiatives and confronting its challenges, especially in light of the Corporation’s recent and continuing transition to afood-focused company. In short, the Board believes that a Chairman who is a member of the management team is well situated to oversee and execute the Corporation’s strategy and business plans to maximize shareholder value. The Board believes that Board independence and oversight of management are effectively maintained through the Board’s current composition, committee system and the position of Lead Independent Director.

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Board Role in Risk Oversight — The Board, together with the Audit Committee and the Compensation Committee, are primarily responsible for overseeing the Corporation’s risk management. Management of the Corporation has formed an Enterprise Risk Management Committee or (“ERM Committee,Committee”) consisting of the Chief Financial Officer, Director of Internal Audit, General Counsel, and General Counsel.Director of Risk Management and Employee Benefits. The primary responsibility of the ERM Committee is to promote the development of sound policies, procedures and practices for managing the Corporation’s material risks and to report the results of the ERM Committee’s activities to the Audit Committee. The ERM Committee provides the Audit Committee with reports on a regularperiodic basis, and the full Board is provided an overview of key risks from various members of senior management. In addition, the Compensation Committee oversees risk requiring its expertise, such as those related to incentive compensation programs and policies.

Although the Board and its committees oversee risk management for the Corporation, management is responsible for theday-to-day management and mitigation of the Corporation’s risks. We believe this division of responsibility reflects the appropriate roles of the Board and management in assessing and managing risks.

Director Qualifications — The Nominating and Governance Committee will look for candidates who possess qualifications that meet our strategic needs; possess the highest personal and professional ethics, integrity and values; have an understanding of our business; have diverse experiences in key business, financial and other challenges that are faced by a publicly held retail company; and represent the long-term interest of our shareholders. In particular, the Nominating and Governance Committee will look for candidates with special and diverse experience in areas such as management of public companies or other large organizations; consumer packaged goods, particularly retail food companies; investment banking or the banking industry; accounting and finance; and

Corporate Governance Principles — The Board, on the recommendation of the Nominating and Governance Committee, adopted a set of Corporate Governance Principles in 2005. The Corporate Governance Principles relate to the role, composition, structure and functions of the Board. The Nominating and Governance Committee is responsible for periodically reviewing these Corporate Governance Principles and recommending any changes to the Board.

Code of Business Ethics and Standards of Conduct — The Corporation has adopted a Code of Business Ethics and Standards of Conduct that inform the Corporation’s directors and employees of their legal and ethical obligations to the Corporation and set a high standard of business conduct. The Code of Business Ethics and Standards of Conduct apply to all employees and, where applicable, to directors of the Corporation. The Corporation intends to satisfy the disclosure requirement under Item 5.05 ofForm 8-K regarding any amendment to, or waiver from, any provision (including the standards listed under Item 406(b) ofRegulation S-K) of the Code of Business Ethics that applies to the Corporation’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on the Corporation’s web site, the address of which iswww.lancastercolony.com.

Shareholder Communication with the Board — Any of the directors may be contacted by writing to them at: Board of Directors,c/o Corporate Secretary’s Office, Lancaster Colony Corporation, 37 West Broad Street, Columbus, Ohio 43215. The independent directors have requested that the Secretary of the Corporation act as their agent in processing any communications received. All communications that relate to matters that are within the scope of responsibilities of the Board and its committees will be forwarded to the independent directors. Communications relating to matters within the responsibility of one of the committees of the Board will be forwarded to the Chairperson of the appropriate committee. Communications relating to ordinary business matters are not within the scope of the Board’s responsibility and will be forwarded to the appropriate officer at the Corporation. Solicitations, advertising materials and frivolous or inappropriate communications will not be forwarded.

Audit Committee — The Board has established an audit committee (the “Audit Committee”) in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, that currently consists of Messrs. Bachmann, Cooke, Harris Jennings and Sofia.Jennings. Mr. Bachmann serves as Chairperson of the Audit Committee. ItThe Board has been determined by the Board that each member of the Audit Committee meets the applicable Nasdaq independence requirements and that Mr. Bachmann, is anthe Chairperson of the Audit Committee, “financial expert,and Mr. Cooke, a member of the Audit Committee, are “audit committee financial experts,” as defined in Item 407(d)(5) ofRegulation S-K, dueS-K. With respect to hisits assessment of whether Messrs. Bachmann and Cooke are “audit committee financial experts,” the Board considered, among other things, Messrs. Bachmann and Cooke’s business experience and background described previously within this Proxy Statement. The Audit Committee operates pursuant to a charter that was approved by the Board in 2004 and amended in 2007 and 2010. The duties of the Audit Committee include the responsibility of reviewing financial information (both external and internal) about the Corporation and its subsidiaries so as to assure (i) that the overall audit coverage of the Corporation and its subsidiaries is satisfactory and appropriate to protect the shareholders from undue risks and (ii) that an adequate system of internal financial control has been designed and implemented throughout the Corporation and is being effectively maintained. Additionally, the Audit Committee has sole authority and direct responsibility with respect to the appointment, compensation, retention and oversight of the Corporation’s independent registered public accounting firm, or independent auditor. Also, as part of its duties, the Audit Committee has adopted procedures for receiving and acting on complaints received by the Corporation regarding accounting, internal accounting controls and auditing issues. Such complaints should be sent to the attention of the Corporate Secretary’s Office, Lancaster Colony Corporation, 37 West Broad Street, Columbus, Ohio 43215. The Audit Committee held four meetings during fiscal 2010.

Compensation Committee — The Board has established a compensation committee (the “Compensation Committee”) that currently consists of Messrs. Fox, Jennings and O’Neill.Sofia and Ms. Bendapudi. Mr. Jennings serves as Chairperson of the Compensation Committee. It has been determined by the Board that each member of the Compensation Committee meets Nasdaq independence requirements. The Compensation Committee operates pursuant to a charter that was

Nominating and Governance Committee — The Board has established a nominating and governance committee (the “Nominating and Governance Committee”) that currently consists of Messrs. Fox, O’NeillHarris and Sofia and Ms. Bendapudi. Mr. Sofia serves as Chairperson of the Nominating and Governance Committee. It has been determined by the Board that each member of the Nominating and Governance Committee meets Nasdaq

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independence requirements. The Nominating and Governance Committee operates pursuant to a charter that was approved by the Board in 2004 and amended in 2005 and 2010. The duties of the Nominating and Governance Committee include identification and nominations to the Board of candidates for election as directors of the Corporation and the development and review of a set of Corporate Governance Principles. As part of its assigned duties, the Nominating and Governance Committee has reviewed the Corporate Governance Principles and found them to be acceptable in scope and application and has so reported to the Board. The Nominating and Governance Committee held three meetings during fiscal 2010.

The Nominating and Governance Committee uses different sources to identify Board candidates, including the Corporation’s executive officers and current members of the Board. The Nominating and Governance Committee also considers the nomination of director candidates recommended by shareholders in conformance with the tests and standards outlined in the Nominating and Governance Committee’s charter and the Corporation’s Amended and Restated Code of Regulations. The Nominating and Governance Committee uses the same manner and process for evaluating every candidate for Board membership, regardless of the original source of the candidate’s nomination. The Nominating and Governance Committee generally considers the subject of diversity as described above under “Corporate Governance — Director Qualifications.” Recommendations to the Nominating and Governance Committee from shareholders regarding candidates must be delivered to the Corporation’s Corporate Secretary no later than June 30 of the year in which such shareholder proposes that the recommended candidate stand for election. Section 2.03 of the Corporation’s Code of Regulations authorizes director nominations to be made by shareholders if the conditions specified therein are met, including the giving of advance notice and the furnishing of certain personal background information and a written statement from the proposed candidate agreeing to be identified in the proxy statementProxy Statement as a nominee and, if elected, to serve as a director. The Nominating and Governance Committee currently has not set specific, minimum qualifications or criteria for nominees that it proposes for Board membership, but evaluates the entirety of each candidate’s credentials. The Nominating and Governance Committee believes, however, that the Corporation will be best served if its directors bring to the Board a variety of experience and backgrounds and, among other things, demonstrated integrity, executive leadership and financial, marketing or business knowledge and experience.

Executive Committee — The Board has established an executive committee (the “Executive Committee”) that currently consists of Messrs. Gerlach, Fox and Bachmann. No particular director serves as Chairperson of the

To the Corporation’s knowledge, based solely on its review of copies of forms filed with the Securities and Exchange Commission (“SEC”), all filing requirements applicable to the officers, directors and beneficial owners of more than 10% of the outstanding Common Stock under Section 16(a) of the Securities Exchange Act of 1934, as amended, were complied with during the fiscal year ended June 30, 2010.

The following shareholders have beneficial ownership, directly or indirectly, of more than five percent of the outstanding Common Stock as of September 17, 2010:

In this section, we discuss the principles underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these policies and decisions. We provide qualitative information regarding the manner and context in which compensation is awarded to and earned by our executive officers to give perspective to the data we present in the compensation tables below, as well as the narratives that follow the tables.

During 2010,2013, we continued our shift away from our historical diversity of operations, instead choosing to follow a more food-focused strategy that we believe will best enhance long-term shareholder value. The strategy involves growing our existing specialty food businesses, both organically and through acquisitions, while continuing to manage our remaining glassware and candles business, which we periodically reassess for strategic fit and contribution. Overall, the strategy has resulted in the Specialty Foods segment providing 87% of our consolidated sales, with the balance provided by our Glassware & Candles segment.

During fiscal 2013, we achieved the following financial outcomes:

As a result of these financial outcomes, our ongoing shareholders experienced a total shareholder return of 19.5% during fiscal 2013, reflecting a combination of share price gains and reinvested dividends.

Based primarily on the financial performance results noted above, we continued with this shift,provided the following pay outcomes to our outlooknamed executive officers (Messrs. Gerlach, Boylan and Rosa) for fiscal 2013:

In addition, the named executive officers each have significant equity positions and shared in the overall gains experienced by shareholders in fiscal 2013. Our Compensation Committee believes the above pay outcomes were appropriate in the context of the financial and shareholder return performances described above.

Executive Compensation Program Philosophy and Objectives

Our executive compensation objective has remainedbeen to reward our named executive officers (identified in our 20102013 Summary Compensation Table below)Table) for their efforts in helping usto achieve market or above-market financial results, particularly within our Specialty Foods operations, and for helping us take important steps to meet our long-term strategic goals and increaselong-term shareholder value. As a result, our basic executive compensation philosophy remains tofocused on “pay for performance.”

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For us, a “pay for performance” philosophy means providing marketcompetitive compensation packagesoutcomes when performance meets our expectations, but also realizing that results above or below our expectations may result in above-market or below-market compensation packages.outcomes. To further this philosophy, we have designed our executive compensation program to achieve the following objectives:

We believe that our executive compensation program should promote long-term shareholder value and should not be overly influenced by the short-term performance of our stock, but should instead promote long-term shareholder value.stock. Our named executive officers are already individually focused on promoting long-term shareholder value because they are each significantly invested insignificant shareholders of our Common Stock. Our experience, however, has been that utilizing salary, annual cash incentive awards and long-term equity-based awards, as the primary elements of our executive compensation program, isare the best way to continuevehicles to align our executives’ compensation interests with our goal of promoting long-term shareholder value. We also understand that our executive compensation program providesprograms provide a starting point, or baseline of comparison, for the compensation that we pay to our other employees. For this reason, we believe our executive compensation program should strike an appropriate balance among rewards, incentives and expectations.

While these broad concepts generally govern our executive compensation program, we also take into account specific factors particular to each executive officer when making individual compensation decisions, which we describe in detail below. These factors consist ofinclude the executive’s range of responsibilities and related performance measures and other individual factors affecting each executive’s performance. We also engage in a general “double-check”“double-check” of our executive compensation levels against amounts paid to executive officers with similar responsibilities in similarly situated companies, but we do not specifically benchmark compensation against percentiles or ranges of compensation provided by such companies.

The Compensation Committee reviews and determines the compensation for our named executive officers. The compensation that we paid our named executive officers for fiscal years 2008, 2009 and 2010year 2013 is disclosed in detail in the tables and narratives below under the heading “Executive Compensation.” Our Compensation Committee is also responsible for, among other things, structuring and administering the compensation programs and plans in which our named executive officers participate.

During fiscal year 2010, management engaged and retained, with the approval of2013, the Compensation Committee retained the services of an independent executive compensation consultant, Pearl Meyer & Partners, which we refer

We implemented the changes to our peer group recommendedfor fiscal year 2013 based upon information and recommendations provided by PM&P, as described&P. Our fiscal 2013 revenues were near the median of the chosen peer companies, while our market capitalization was at the 83rd percentile of the group. The criteria used to develop the peer group included comparisons to companies in similar industries, primarily the packaged foods and meats and personal products industrial classifications, and which were also of a similar size to our 2009 Proxy Statement.company, specifically with annual revenues between 50% and 200% of our annual revenues and market capitalizations generally between 20% and 500% of ours. To more accurately reflect those criteria, we added three companies (Calavo Growers Inc., Prestige Brands Holdings Inc. and The WhiteWave Foods Co.) and dropped three companies (Central Garden & Pet Company, Diamond Foods Inc. (market capitalizations were too small) and Sanderson Farms Inc. (revenues were too large)) from the peer group used in 2012. Our peer group for 2010 remains unchanged from the peer group identified in our 2009 Proxy Statement, and2013 consists of the following companies:

Generally, our Compensation Committee establishes salaries for the current fiscal year and annual cash incentive award payouts for the prior fiscal year at its regularly scheduled August meeting. Historically, at this meeting, our Compensation Committee first reviews the elements of each named executive officer’s total compensation during the previous fiscal year. Our Chief Executive Officer then makes compensation recommendations to our Compensation Committee with respect to the executive officersmembers of senior management who report to him, but those

Our Compensation Committee may accept or make adjustments to the recommendations it receives in establishing the final compensation for each of the named executive officers. In general, when setting each component of compensation for our named executive officers, our Compensation Committee considers the following performance factors:

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We granted new equity incentive awards in February 2008, 2009 and 2010,2013, and we discuss these grants in more detail below. DueWe do not award equity compensation to Mr. Gerlach due to his already significant equity interest in our Corporation, we generally do not award equity compensation to Mr. Gerlach.

With the exception of our Chief Executive Officer, as discussed in more detail below, we believe the total cash compensation paid to our named executive officers (the combination of salary and annual cash incentives) for fiscal 20102013 was in line with the median compensation paid for executives holding similar positions in our peer group based on the Compensation Committee’s general understanding of current compensation practices in our competitive market.

We have established executive compensation objectives that are primarily focused on helping us create long-term shareholder value. We believe that we can best achieve all of our executive compensation program objectives by offering competitive short-term cash compensation combined with appropriate long-term equity-based compensation tied to our operating results and our achievement of incremental shareholder value. To this end, the primary elements of our executive compensation program are salary, annual cash incentive awards and long-term equity-based incentive awards, which are each described in detail below. Generally, we look at our named executive officers’ compensation arrangements in total when establishing salaries, annual cash and long-term equity incentive awards.

Salaries.    We provide our named executive officers with annual salaries both to attract and retain the executives and to provide them with a steady source of annual cash-based income. For each named executive officer, salary represents a non-“at risk”risk-free cash component of compensation.compensation component. We establish our salaries at levels designed to reward our named executive officers for their overall level of expertise, responsibilities, experience and other factors unique to each individual executive officer, as determined by our Compensation Committee. However, our general policy is that salaries for our named executive officers should not exceed median salaries for executive officers with similar responsibilities within our peer group.

For fiscal year 2010,2013, the amount of each named executive officer’s salary increase, expressed as a percentage of such officer’s fiscal year 20092012 salary, was as follows: Mr. Gerlach, 3.64%3.00%; Mr. Boylan, 3.57%3.00% and Mr. Rosa, 5.26%3.00%. Salaries earned by our named executive officers for 2008, 20092011, 2012 and 20102013 appear below in the “Salary”

The Compensation Committee determined to increase Mr. Gerlach’s salary for fiscal year 20102013 based upon his lengthy experience with the Corporation and the Board’s continued satisfaction with his performance.performance, especially in light of pay levels for chief executive officers at peer companies. The Compensation Committee determined to increase Mr. Boylan’s salary for 20102013 after considering Mr. Boylan’s lengthy experience handling financial matters for us and his in-depth knowledge of our business, and the Compensation Committee’s and Mr. Gerlach’s satisfaction with Mr. Boylan’s job performance as Chief Financial Officer during 2009.2012. The Compensation Committee determined to increase Mr. Rosa’s salary for 20102013 due to the Compensation Committee’s ongoing desire to ensure retention of Mr. Rosa’s services within our Specialty Foods operations during our continuing shift to a more food-focused company.operations. The Compensation Committee also considered Mr. Rosa’s lengthy experience as President of our Specialty Foods Segment and his specific knowledge of our Specialty Foods operations and strategic plan and the Compensation Committee’s and Mr. Gerlach’s satisfaction with Mr. Rosa’s job performance during 2009.

The Compensation Committee used its judgment in choosing to increase salaries for Messrs. Gerlach, Boylan and Rosa for 20102013 by their respective amounts after taking into consideration Mr. Gerlach’s

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recommendations, each executive’s annual salary increases in prior years and the amount that our Compensation Committee understandsunderstood to represent average salary increases among companies in our peer group over the past few years for officers holding similar positions.

Annual Cash Incentive Awards.    We also provide our named executive officers with annual cash incentive awards designed to motivate them to help us achieve our annual financial goals. The annual cash incentive award represents a performance-based, variable and “at-risk” cash component of compensation for each named executive officer. Under this program, our two named executive officers other than our Chief Executive OfficerMessrs. Boylan and Rosa were each grantedprovided the opportunity to earn an annual cash incentive payment for fiscal 20102013 based on our achievement of certain financial objectives. We granted this award to Mr. Rosa based on his responsibility for supervising the operations of our Specialty Foods segment and to Mr. Boylan based on his responsibilities as Chief Financial Officer.

Our Chief Executive Officer, Mr. Gerlach, does not participate in our annual cash incentive program. For fiscal 2010,2013, however, the Compensation Committee awarded Mr. Gerlach a discretionary bonus of $300,000$295,000 at the same time that bonusesincentives were approved for our other named executive officers. Although the Compensation Committee has not previously awarded a bonus to Mr. Gerlach, theThe Compensation Committee granted a discretionary award this year to demonstrate the Board’s high satisfaction with Mr. Gerlach’s continued excellent performance as our Chief Executive Officer. Mr. Gerlach’s total annual compensation remains well below the median of our peer group. Our Compensation Committee and Mr. Gerlach consider this result acceptable given his significant ownership interest and the resulting low probability of his leaving the Corporation.

Our Chief Executive Officer retains discretionary authority to modify the financial targets and raise or lower the computed incentive payment by up to 5% for Mr. Boylan and up to 20% for Mr. Rosa based on his qualitative assessment of the executive’s overall development during the course of the fiscal year. With respect to Mr. Rosa, however, the discretionary adjustment range is being adjusted for future years as discussed below. Our Compensation Committee also retains authority to make further adjustments to the computed annual cash incentive payments. An annual cash incentive payment, if earned, is made in the fiscal year following the year in which it is earned. Annual cash incentive payments earned by our named executive officers for fiscal years 2008, 2009 and 2010year 2013 appear below in the “Bonus”and/or “Non-Equity Incentive Plan Compensation” columns of our 20102013 Summary Compensation Table.

For fiscal year 2010,2013, Mr. Rosa received the opportunity to earn a cash incentive payment equal to 0.35%, rounded to the nearest hundred, of our Specialty Foods segment’s value-added income for fiscal year 2010.2013. Our Compensation Committee first established 0.35% of Specialty Foods’ value-added income as the annual incentive opportunity for Mr. Rosa in 2004, and we have continued to view this as a fair annual incentive opportunity from year to year since 2004. We define value-added income as the amount by which the fiscal year operating income of our Specialty Foods segment exceeds a target level of income. We determine the applicable target level of income by multiplying the segment’s pre-tax cost of capital by the segment’s average net assets (defined as including accounts receivable; inventory; prepaid expenses; property, plant and equipment; other assets; goodwill; current

Mr. Boylan’s fiscal year 20102013 award represented the opportunity to earn a cash incentive payment equal to 0.45%, rounded to the nearest hundred, of our consolidated value-added income for fiscal year 2010.2013. For purposes of Mr. Boylan’s award opportunity, we define value-added income as the amount by which fiscal year consolidated operating income exceeds a target level of income. We determine the applicable target level of income by multiplying consolidated pre-tax cost of capital by consolidated average net assets (defined as including accounts receivable; inventory; prepaid expenses; property, plant and equipment; other assets; goodwill; current liabilities; deferred taxes and other non-current liabilities). We then calculate value-added income by subtracting target income from operating income. For our consolidated operations in fiscal year 2010,2013, average net assets equaled approximately $374$380 million, pre-tax cost of capital was approximately 18.75%, target income equaled approximately $70.1$71.3 million, and operating income exceeded target income by approximately $104$90.6 million. We utilized consolidated operating income and average net assets as the performance metrics for Mr. Boylan’s award because we believe use of these metrics was the best way to incentivizemotivate him to employ our consolidated net assets efficiently.

Under the foregoing formula, Mr. Boylan’s cash incentive calculation for fiscal 20102013 was $468,400 (compared to the $572,000 he earned under the formula used for fiscal year 2009). The significant decrease in Mr. Boylan’s cash incentive compared to fiscal 2009 was not due to a drop in fiscal performance. As mentioned above, we achieved record operating and net income in 2010. The decrease in Mr. Boylan’s cash incentive related to the adjustment made last year in Mr. Boylan’s cash incentive formula. In fiscal 2008 and 2009, Mr. Boylan’s calculated annual cash incentives were significantly lower and significantly higher, respectively, than the median for our peer group and also significantly different from Mr. Rosa’s annual cash incentive. In both previous years, the Compensation Committee used discretion to adjust Mr. Boylan’s bonus payout for the year and also adjusted Mr. Boylan’s annual cash incentive formula in an effort to bring future calculated amounts closer to the Compensation Committee’s expectations. Thus, for fiscal year 2010, Mr. Boylan’s cash incentive payment was decreased to 0.45% of consolidated value-added income from the 2009 level of 1.0% of consolidated value-added income.

Long-Term Equity-Based Incentive Awards.    Until 2008, we used stock options as the primary vehicle for providing our named executive officers with long-term incentives for their effortsBeginning in helping to create long-term shareholder value. We have also considered stock options as a retention tool for executive talent. Both of these factors have helped our Compensation Committee determine in past years the type of award and the number of underlying shares that it granted in connection with an equity incentive award.

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