Exhibit 10.3
LANCE, INC.
2007 Three-Year Performance Incentive Plan for Officers

     
Purposes and Introduction
  The 2007 Three-Year Performance Incentive Plan for Officers provides for
Performance Awards under the Lance, Inc. 2007 Key Employee Incentive Plan (the
“Incentive Plan”). Except as otherwise expressly defined herein, capitalized
terms shall be as defined in the Incentive Plan.
 
   
 
  The primary purposes of the 2007 Three-Year Performance Incentive Plan for
Officers (the “2007 Plan”) are to:
 
   
 
  • Align executives’ interests with those of stockholders by linking a
substantial portion of compensation to the Company’s average Return on Capital
Employed (ROCE) over three fiscal years based on the Company’s 2007-2009
Operating Plan.
 
   
 
  • Provide a way to attract and retain key executives and managers who are
critical to Lance’s future success.
 
   
 
  • Provide competitive total compensation for executives and managers
commensurate with Company performance.
 
   
 
  To achieve the maximum motivational impact, performance measures, Plan goals
and the awards that will be received for meeting those goals will be
communicated to participants as soon as practical after the 2007 Plan is
approved by the Compensation Committee of the Board of Directors.
 
   
 
  Each participant will be assigned a Target Incentive, stated as a percent of
base salary. The Target Incentive Awards, or a greater or lesser amount, will be
granted after the end of the three fiscal years, 2007 through 2009 (the
“Performance Period”), based on the attainment of predetermined goals.
 
   
 
  For 2007, participants will be eligible to earn incentive awards based on the
Company’s three-year average ROCE against specific goals as described below.
 
   
 
  • ROCE is calculated for each fiscal year during the Performance Period as
follows:
 
   
 
  (Net Income + Interest Expense) x (1 — Tax Rate)
Average Equity + Average Net Debt

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  Tax Rate for ROCE shall be the Company’s actual total effective income tax
rate.
 
   
 
  Average Net Debt shall be the Company’s average debt less average cash.
 
   
 
  Average amounts for ROCE shall be calculated on a 12-month basis.
 
   
 
  Base salary shall be the annual rate of base compensation for the 2007 fiscal
year which is set no later than April of such fiscal year; provided that for any
award intended to satisfy the Performance-Based Exception, base salary shall be
the annual rate of base compensation for the fiscal year which is set no later
than March 31 of such fiscal year.
 
   
Performance Period
  The period over which performance will be measured is the Company’s three
fiscal years, 2007 through 2009.
 
   
Eligibility and Participation
  Eligibility in the Plan is limited to Executive Officers and managers who are
key to Lance’s success. The Compensation Committee will review and approve
participants nominated by the President and Chief Executive Officer.
Participation in the 2007 Plan does not guarantee participation in any
subsequent long-term incentive plans but will be reevaluated and determined on
an annual basis.
 
   
 
  Attachment A includes the list of 2007 Plan participants approved by the
Compensation Committee on February 8, 2007.
 
   
Target Incentives and Performance Measures
  Each participant will be assigned a Target Incentive expressed as a percentage
of his or her base salary. Participants may be assigned to a Performance Tier by
position, by salary level or based on other factors as determined by the
President and Chief Executive Officer. If the duties of a participant change
significantly during the Performance Period, the President and Chief Executive
Officer, with the approval of the Compensation Committee, may change the Target
Incentive for such participant for the remaining portion of the Performance
Period on a pro rata basis.
 
   
 
  The 2007 through 2009 financial performance measure for the Company as a whole
is shown below. Specific goals and related payouts are also shown below.
 
   

                                              Threshold     Target     Maximum  
 
  Lance, Inc. average ROCE     11.0 %     12.0 %     14.0 %
 
  Award Level Funded     50 %     100 %     400 %

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  Percent of payout will be determined on a straight line basis between
Threshold and Target and between Target and Maximum. There will be no payouts
unless the Threshold performance measure is reached.
 
   
 
  The performance measure will be communicated to each participant as soon as
practicable after it has been established. Final Target Incentive Awards will be
calculated after the Compensation Committee has reviewed the Company’s audited
financial statements for 2007 through 2009 and determined the performance level
achieved.
 
   
 
  The following definitions for the terms Maximum, Target and Threshold should
help set the goals for the Performance Period, as well as evaluate the payouts:
 
   
 
  • Maximum: Excellent; deserves payout above Target
 
   
 
  • Target: Normal or expected performance; deserves Target payout
 
   
 
  • Threshold: Lowest level of performance deserving a payout
 
   
 
  Attachment A lists the Target Incentives for each participant for the 2007
Plan as determined by the Compensation Committee. Target Incentives will be
communicated to each participant as close to the beginning of the year as
practicable, in writing. Target Incentives will be calculated by multiplying
each participant’s base salary by the appropriate Performance Tiers and
percentages, as described below.

                  Percentage of Base Salary     Performance Tier   for 2007-2009
Target Incentives     1
2
3   30%
25%
20%

     
 
  Final awards will be calculated, paid and granted after the Compensation
Committee has reviewed the Company’s audited financial statements for 2007
through 2009 and determined the performance levels achieved.
 
   
Awards
  Each participant shall receive cash equal to 50% in value of his or her award
and 50% in value will be in shares of Common Stock, except that the President
and Chief Executive Officer will receive cash equal to 100% in value of his
award and no shares of Common Stock.

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  The number of shares of the Company’s Common Stock granted will equal the
applicable dollar value divided by the closing price for the Company’s Common
Stock on the date of grant. The shares of Common Stock will be fully vested on
the date of grant.
 
   
 
  For purposes of the 2007 Plan, the date of grant of shares of Common Stock
will be the date established by the Compensation Committee after the applicable
performance level has been determined.
 
   
Form and Timing of Awards
  Awards will be made as soon as practicable after performance measures are
calculated and approved by the Compensation Committee. All awards will be
rounded to the nearest multiple of $100 or up to the next whole share, as the
case may be.
 
   
Change In Status
  An employee hired into an eligible position during the Performance Period may
participate in the 2007 Plan for the balance of the Performance Period on a pro
rata basis.
 
   
Certain Terminations of Employment
  In the event a participant voluntarily terminates employment (other than
Retirement) or is terminated involuntarily before the end of the Performance
Period, the participant shall not receive any award hereunder. In the event of
death, Disability or Retirement before the end of the Performance Period, any
award will be determined after the end of the Performance Period based on actual
performance and paid out on a pro rata basis all in cash.
 
   
 
  If the participant’s employment terminates after the end of the Performance
Period but before the applicable grant date, then the participant will receive
the award based on the performance results and paid out all in cash.
 
   
Change In Control
  In the event of a Change in Control, pro rata payouts will be made all in cash
at the greater of (1) Target Incentive or (2) actual results for the completed
fiscal years preceding the Change in Control, with such pro ration based on the
number of days in the Performance Period preceding the Change in Control.
Payouts will be made within 30 days after the relevant transaction has been
completed.
 
   
Withholding
  The Company shall withhold from awards any Federal, foreign, state or local
income or other taxes required to be withheld.
 
   
Communications
  Progress reports should be made to participants annually, showing performance
results.

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Executive Officers
  Notwithstanding any provisions to the contrary above, participation, awards
and prorations for Executive Officers, including the President and Chief
Executive Officer, shall be approved by the Compensation Committee.
 
   
Stockholder
Approval
  The 2007 Plan and the awards hereunder are made pursuant to the Incentive
Plan, which is subject to approval by the Company’s stockholders at the Annual
Meeting of Stockholders to be held on April 26, 2007. Any award made under the
2007 Plan before the Incentive Plan is approved by the Company’s stockholders is
conditioned upon such approval and will be null and void if the Incentive Plan
is not so approved.
 
   
Governance
  The Compensation 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 measures and goals,
final award components and determination and amendments to the Plan. The
Committee shall adjust any award due to extraordinary events such as
acquisitions, dispositions, required accounting adjustments or similar events,
all as specified in Section 11(d) of the Incentive Plan. The decisions of the
Committee shall be conclusive and binding on all participants.

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Attachment A
2007 Three-Year Performance Incentive Plan for Officers

                                      Award   Target Name   Title   Percentage  
Incentive
 
                       
David V. Singer
  President and Chief Executive Officer     30 %   $ 165,000  
 
                       
R. D. Puckett
  Executive Vice President, Chief Financial Officer and Secretary     25 %   $
91,875  
 
                       
Glenn A. Patcha
  Senior Vice President — Sales and Marketing     * %   $ *  
 
                       
E. D. Leake
  Vice President — Human Resources     25 %   $ 56,250  
 
                       
F. I. Lewis
  Vice President — Sales     25 %   $ 66,300  
 
                       
B. W. Thompson
  Vice President — Supply Chain     25 %   $ 68,750  
 
                       
M. E. Wicklund
  Controller and Assistant Secretary     * %   $ *  

*   Amounts are omitted for participants other than the Chief Executive Officer,
the Chief Financial Officer and the executive officers who were named in the
Summary Compensation Table of the Company’s Proxy Statement for the 2007 Annual
Meeting of Stockholders.