Exhibit 10.3

STATE OF NORTH CAROLINA

     

  RESTRICTED STOCK UNIT
COUNTY OF MECKLENBURG
  AWARD AGREEMENT

     THIS RESTRICTED STOCK UNIT AWARD AGREEMENT, entered into this 11th day of
May 2005 (the “Grant Date”), by and between Lance, Inc., a North Carolina
corporation (the “Company”), and David V. Singer (the “Executive”);

STATEMENT OF PURPOSE

     Effective as of the date hereof, the Company is hiring Executive to serve
as the Company’s President and Chief Executive Officer. In order to attract and
retain Executive, the Company is making an award to Executive of a number of
“Restricted Stock Units” in accordance with, and subject to, the terms and
conditions of this Agreement.

     NOW, THEREFORE, in consideration of the Statement of Purpose and of the
mutual covenants and agreements herein set forth and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Executive do hereby agree as follows:

     1. Definitions. As used in this Agreement, unless the context expressly
indicates otherwise, the following terms have the following meanings:

     “Affiliates” shall be as defined in the Compensation and Benefits Assurance
Agreement.

     “Board” shall be as defined in the Compensation and Benefits Assurance
Agreement.

     “Cash-Settled Units” as defined in Section 2 below means the Restricted
Stock Units other than the Stock-Settled Units.

     “Cause” shall be as defined in the Employment Agreement.

     “Change in Control” shall be as defined in the Compensation and Benefits
Assurance Agreement.

     “Common Stock” means the $.83-1/3 par value Common Stock of the Company or
any security of the Company issued in substitution, exchange or lieu thereof
pursuant to Section 6 hereof.

     “Company” as defined in the introduction to this Agreement means Lance,
Inc., a North Carolina corporation, and any successor thereto.

 

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     “Compensation and Benefits Assurance Agreement” means the Compensation and
Benefits Assurance Agreement between the Company and Executive dated as of the
date hereof, as the same may be amended from time to time.

     “Compensation Committee” means the Compensation Committee of the Board.

     “Disability” shall be as defined in the Employment Agreement.

     “Dividend Units” as defined in Section 3(a) below means certain additional
Restricted Stock Units credited in connection with certain dividend equivalent
rights.

     “Employment Agreement” means the Executive Employment Agreement between the
Company and Executive dated as of the date hereof, as the same may be amended
from time to time.

     “Fair Market Value” with respect to a share of the Common Stock at a
particular time, shall be that value as reasonably determined by the
Compensation Committee which shall be (i) if such Common Stock is listed on a
national securities exchange or traded on the NASDAQ Stock Market, Inc., the
mean between the highest price and the lowest price at which the Common Stock
shall have been sold regular way on a national securities exchange or the NASDAQ
Stock Market, Inc. on said date, or, if no sales occur on said date, then on the
next preceding date on which there were such sales of Common Stock, (ii) if the
Common Stock shall not be listed on a national securities exchange or traded on
the NASDAQ Stock Market, Inc., the mean between the bid and asked prices last
reported by the National Association of Securities Dealers, Inc. for the
over-the-counter market on said date or, if no bid and asked prices are reported
on said date, then on the next preceding date on which there were such
quotations, or (iii) if at any time quotations for the Common Stock shall not be
reported by the National Association of Securities Dealers, Inc. for the
over-the-counter market and the Common Stock shall not be listed on any national
securities exchange or traded on the NASDAQ Stock Market, Inc., the fair market
value determined by the Compensation Committee in such manner as it reasonably
determines.

     “Grant Date” as defined in the introduction to this Agreement means the
date hereof.

     “Qualifying Termination” shall be as defined in the Compensation and
Benefits Assurance Agreement.

     “Restricted Stock Unit” means a right to receive one share of Common Stock,
or cash equal to the Fair Market Value of one share of Common Stock, at such
time, and in accordance with such terms and conditions, as set forth in this
Agreement. Restricted Stock Units include Dividend Units.

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     “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as
amended.

     “Stock-Settled Units” as defined in Section 2 below means 150,000 of the
original 300,000 Restricted Stock Units awarded on the Grant Date.

     2. Award of Restricted Stock Units. Effective as of the Grant Date,
Executive is awarded 300,000 Restricted Stock Units. Of the total award, 150,000
Restricted Stock Units shall be deemed a “Restricted Unit Grant” under the
Lance, Inc. 2003 Key Employee Stock Plan, and shall be referred to herein as the
“Stock-Settled Units.” The remainder of the Restricted Stock Units, including
any Dividend Units credited pursuant to Section 3(a) below, shall be referred to
herein as the “Cash-Settled Units.” Notwithstanding any provision herein to the
contrary, the Company in its discretion may at any time re-designate all or any
portion of the Cash-Settled Units as Stock-Settled Units to the extent permitted
under the Lance, Inc. 2003 Key Employee Stock Plan, as amended from time to time
after the date hereof. The Company shall provide written notice to Executive of
any such re-designation within a reasonable period of time prior thereto.

     3. Dividend Equivalents; No Voting Rights.

          (a) Dividend Equivalents. If a cash dividend is paid with respect to
the Common Stock, Executive shall be credited as of the applicable dividend
payment date with an additional number of whole and fractional Restricted Stock
Units (the “Dividend Units”) equal to (A) the total cash dividend Executive
would have received had the Restricted Stock Units (and any previously credited
Dividend Units with respect thereto) been actual shares of Common Stock divided
by (B) the Fair Market Value of a share of Common Stock as of the applicable
dividend payment date. All Dividend Units shall be become part of the aggregate
Restricted Stock Units award hereunder when credited to Executive, and therefore
shall be subject to all of the terms and conditions of this Agreement, including
without limitation the vesting and payment provisions set forth in Sections 4
and 5 below.

          (b) No Voting Rights. Executive shall have no voting rights with
respect to the Restricted Stock Units.

     4. Vesting.

          (a) General. Subject to the provisions of subparagraph (b) below, the
Restricted Stock Units shall become fully (100%) vested on May 11, 2010 (i.e.,
the fifth anniversary of the Grant Date) if Executive remains employed with the
Company and its Affiliates through that date.

          (b) Termination of Employment Prior To Vesting. If Executive’s
employment with the Company and its Affiliates terminates prior to the above
vesting date, then the Restricted Stock Units shall become vested or be
forfeited as follows:

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  (i)   Death or Disability. The Restricted Stock Units shall become fully
(100%) vested if Executive’s employment with the Company and its Affiliates
terminates due to Executive’s death or Disability.     (ii)   Termination by the
Company Without Cause. The Restricted Stock Units shall become vested pursuant
to the following schedule if Executive’s employment with the Company and its
Affiliates is terminated by the Company without Cause (including a termination
by the Company as a result of a notice by the Company of its decision not to
extend the Employment Agreement):

                    If termination of employment by the           Company
without Cause occurs...     The vested percentage is...    
Prior to the 1st anniversary of the Grant Date
      16.67 %    
On or after the 1st anniversary of the Grant Date but prior to the 2nd
anniversary of the Grant Date
      33.33 %    
On or after the 2nd anniversary of the Grant Date but prior to the 3rd
anniversary of the Grant Date
      50.00 %    
On or after the 3rd anniversary of the Grant Date but prior to the 4th
anniversary of the Grant Date
      66.67 %    
On or after the 4th anniversary of the Grant Date but prior to the 5th
anniversary of the Grant Date
      83.33 %    
On or after the 5th anniversary of the Grant Date
      100.00 %    

      To the extent the Restricted Stock Units are not vested as of the date of
such termination of employment, the unvested Restricted Stock Units shall
automatically be forfeited as of such date. The applicable vested percentage
above shall be applied separately to the portion of the award constituting the
Stock-Settled Units and the portion of the award constituting the Cash-Settled
Units.     (iii)   Termination by the Company With Cause. The Restricted Stock
Units shall be forfeited in their entirety if Executive’s employment with the
Company and its Affiliates is terminated by the Company with Cause. Forfeiture
shall occur automatically as of the date of such termination of employment.    
(iv)   Resignation by Executive. The Restricted Stock Units shall be forfeited
in their entirety if Executive resigns from employment with the Company and its
Affiliates (including a termination by the Executive as a result of a notice by
the Executive of his decision

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      not to extend the Employment Agreement). Forfeiture shall occur
automatically as of the date of such termination of employment.     (v)  
Qualifying Termination. Notwithstanding any provision herein to the contrary, in
the event of a Qualifying Termination following a Change in Control, the
Restricted Stock Units shall become fully (100%) vested as of the date of such
Qualifying Termination.

     5. Payment of Restricted Stock Units.

          (a) Time of Payment. If Executive remains employed with the Company
and its Affiliates until the fifth anniversary of the Grant Date, then the
Restricted Stock Units shall be payable as soon as administratively practicable
on or after the fifth anniversary of the Grant Date. If Executive’s employment
with the Company and its Affiliates terminates prior to the fifth anniversary of
the Grant Date, then the Restricted Stock Units, to the extent vested, shall be
payable as soon as administratively practicable on or after the date of
Executive’s termination of employment (subject, to the extent applicable, any
requirement under Section 409A, to delay payment for six months after
termination of employment). Notwithstanding the foregoing, Executive and the
Company, through action of the Compensation Committee, may mutually determine a
deferred payment of any vested Restricted Stock Units in accordance with a
written deferral election executed by Executive and the Company within 30 days
after the date hereof that is otherwise consistent with the requirements of
Section 409A.

          (b) Form of Payment. Subject to any deferral election pursuant to
Section 5(a) above, as of the applicable payment date, of the vested Restricted
Stock Units then payable: (i) Stock-Settled Units shall be payable by delivery
of one share of Common Stock for each such Stock-Settled Unit and
(ii) Cash-Settled Units shall be payable in cash based on the Fair Market Value
of the Common Stock as of the applicable date. The shares of Common Stock to be
delivered in payment of vested Stock-Settled Units shall be deemed issued
pursuant to the Lance, Inc. 2003 Key Employee Stock Plan (and shall therefore
count against the shares otherwise available under such plan). In connection
with a payment to be made as soon as administratively practicable after the
fifth anniversary of the Grant Date pursuant to the first sentence of Section
3(a) above, the percentage of the award then payable shall be applied separately
to the portion of the award constituting the Stock-Settled Units and the portion
of the award constituting the Cash-Settled Units.

          (c) Compliance With Securities Laws. The shares of Common Stock shall
be delivered to Executive, pursuant to subparagraphs 5(a) and 5(b) above, unless
counsel for the Company reasonably determines that such issuance will violate
applicable federal or state securities laws and the Company has taken all
reasonable steps necessary to avoid any such violation. The Company agrees to
use commercially reasonable efforts to ensure that such shares are issued to
Executive on a timely basis as provided herein. The certificates for shares of
Common Stock delivered under this Agreement may be subject to such stop-transfer
orders and other restrictions as the Compensation Committee may reasonably
determine are required under the rules, regulations, and other

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requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law. The Compensation Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such restrictions.

     6. Adjustments Upon Changes in Capitalization.

          (a) No Limitation on Company Rights. The existence of the Agreement
shall not affect or restrict in any way the right or power of the Board or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, other debentures, preferred or prior preference stocks, the
dissolution or liquidation of the Company or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding.

          (b) Adjustments. In the event that a dividend shall be declared upon
the Common Stock payable in shares of Common Stock, the number of Restricted
Stock Units shall be adjusted by adding to the award a number of Restricted
Stock Units equal to the number of shares which would have been distributable
thereon if the Restricted Stock Units had been outstanding shares of Common
Stock on the date fixed for determining the stockholders entitled to receive
such stock dividend. In the event that the outstanding shares of Common Stock
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or of another corporation, or changed
into or exchanged for cash or property or the right to receive cash or property
(but not including any dividend payable in cash or property other than a
liquidating distribution), whether through reorganization, recapitalization,
stock split-up, combination of shares, merger or consolidation, then each
Restricted Stock Unit shall be adjusted to become a right to receive the number
and kind of shares of stock or other securities or cash or property or right to
receive cash or property into which each outstanding share of Common Stock shall
be so changed or for which each such share shall be exchanged. In the event
there shall be any change other than as specified above in this Section 6, in
the number or kind of outstanding shares of Common Stock or of any stock or
other securities into which such Common Stock shall have been changed or for
which it shall have been exchanged, then if the Compensation Committee shall in
its reasonable discretion determine that such change equitably requires an
adjustment in the Restricted Stock Units, such adjustment shall be made by the
Compensation Committee in a manner consistent with adjustments made by the
Compensation Committee under the Lance, Inc. 2003 Key Employee Stock Plan with
respect to such transaction.

     7. Assignment of This Agreement or Benefits Hereunder.

          (a) Successors. The Company will require any successor (whether via a
Change in Control, direct or indirect, by purchase, merger, consolidation, or
otherwise) of the Company to expressly assume and agree to perform the
obligations under this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place.

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          (b) Assignment by Executive. This Agreement shall inure to the benefit
of and be enforceable by Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If Executive should die while any amount is still payable to Executive
hereunder had the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Executive’s estate. Executive’s rights hereunder shall not
otherwise be assignable. In that regard, no part of any amounts granted or
payable hereunder shall, prior to actual payment, (i) be subject to seizure,
attachment, garnishment or sequestration for the payment of debts, judgments,
alimony or separate maintenance owed by Executive or any other person, (ii) be
transferable by operation of law in the event of Executive’s or any person’s
bankruptcy or insolvency or (iii) be transferable to a spouse as a result of a
property settlement or otherwise.

     8. Notices. Any notice required to be delivered to the Company by Executive
hereunder shall be properly delivered to the Company when personally delivered
to (including by a reputable overnight courier), or actually received through
the U.S. mail, postage prepaid, by:

     

  Lance, Inc.

  P. O. Box 32368

  8600 South Boulevard

  Charlotte, NC 28232
 
   

  Attn: Vice President — Finance

     Any notice required to be delivered to Executive by the Company hereunder
shall be properly delivered to Executive when personally delivered to (including
by a reputable overnight courier), or actually received through the U.S. mail,
postage prepaid, by, Executive at his last known address as reflected on the
books and records of the Company.

     9. Contractual Rights to Benefits. This Agreement establishes in Executive
a right to the benefits to which Executive is entitled hereunder. However,
except as expressly stated herein, nothing herein contained shall require or be
deemed to require, or prohibit or be deemed to prohibit, the Company to
segregate, earmark or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder. This
Agreement is intended to be an unfunded general asset promise for a select,
highly compensated member of the Company’s management and, therefore, is
intended to be exempt from the substantive provisions of the Employee Retirement
Income Security Act of 1974, as amended.

     10. Entire Agreement. This Agreement represents the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all prior discussions, negotiations, and agreements concerning the subject
matter hereof. This Agreement may only be amended by a written instrument signed
by both parties.

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     11. Tax Matters.

          (a) Executive’s Responsibility for Taxes. Regardless of any action the
Company takes with respect to any or all income tax, payroll tax or other
tax-related withholding (“Tax-Related Items”), Executive acknowledges that the
ultimate liability for all Tax-Related Items owed by Executive is and remains
Executive’s responsibility and that the Company (i) makes no representations or
undertakings regarding the treatment of any Tax-Related Items in connection with
any aspect of the grant of Restricted Stock Units, including the grant and
vesting the Restricted Stock Units, the subsequent sale of shares of Common
Stock acquired upon the vesting of the Restricted Stock Units and the receipt of
any dividends; and (ii) does not commit to structure the terms of the grant or
any aspect of the Restricted Stock Units to reduce or eliminate Executive’s
liability for Tax-Related Items.

          (b) Tax Withholding. In the event the Company reasonably determines
that it must withhold any Tax-Related Items as a result of the award hereunder,
Executive agrees as a condition of the grant of the Restricted Stock Units to
make arrangements reasonably satisfactory to the Company to enable it to satisfy
all withholding requirements, including, but not limited to, withholding any
applicable Tax-Related Items from the payment of the Restricted Stock Units. If
Executive does not make such arrangements, Executive authorizes the Company to
fulfill its withholding obligations by all legal means, including, but not
limited to: withholding Tax-Related Items from Executive’s wages, salary or
other cash compensation; withholding Tax-Related Items from the cash proceeds,
if any, received upon sale of any shares received in payment for the Restricted
Stock Units; and at the time of payment, withholding shares of Common Stock
sufficient to meet minimum withholding obligations for Tax-Related Items. The
Company may refuse to issue and deliver shares of Common Stock in payment of any
vested Restricted Stock Units if Executive fails to comply with his withholding
obligations hereunder.

          (c) Compliance With Section 409A. To the extent applicable, this
Agreement is intended to comply with the requirements of Section 409A.
Notwithstanding any provision of this Agreement to the contrary, this Agreement
shall be interpreted, operated and administered consistent with this intent.

     12. Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of this Agreement, and this Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included.

     13. Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the State of North Carolina shall be the controlling law in
all matters relating to this Agreement. Each party (i) consents to the personal
jurisdiction of any state or federal court located in Charlotte, North Carolina
(and any corresponding appellate court) in any proceeding arising out of or
relating to this Agreement or the Executive’s employment by the Company,
(ii) waives any venue or inconvenient forum defense to any proceeding maintained
in such courts and (iii) except as otherwise

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provided in this Agreement, agrees not to bring any proceeding arising out of or
relating to this Agreement or the Executive’s employment by the Company in any
other court.

     14. Execution. This Agreement is hereby executed in duplicate originals,
one of which is being retained by each of the parties hereto.

     IN WITNESS WHEREOF, Lance, Inc. has caused this Agreement to be signed by
its duly authorized officer, and Executive has hereunto set his hand, all as of
the day and year first above written.

                  “Company”    
 
                Lance, Inc.    
 
           

  By   /s/ Earl D. Leake    

           

      Earl D. Leake    

      Vice President    
 
                “Executive”    
 
                /s/ David V. Singer                   David V. Singer    

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