Exhibit 10.2
SANDERSON FARMS, INC.
SHARE PURCHASE AGREEMENT
(Management Share Purchase Plan)
(Non-Employee Director Agreement)
This SHARE PURCHASE AGREEMENT (this
“Agreement”), made and entered into as of the
day of
, 20 (the “Grant
Date”), by and between
(the “Participant”) and Sanderson Farms, Inc. (together
with its subsidiaries and affiliates, the “Company”),
to set forth the terms and conditions of an Award of Share Purchase
Rights granted pursuant to the Sanderson Farms, Inc. and Affiliates
Stock Incentive Plan, adopted on February 17, 2005 (the
“Plan”) and this Agreement. Any capitalized term used
but not defined herein shall have the meaning ascribed to such term
in the Plan. The term “Fiscal Year” shall mean the
fiscal year of the Company which begins on November 1 of each
calendar year and ends on October 31 of the next calendar
year.
1.
Rights to Purchase Restricted Stock.
The
Participant may elect to reduce the annual retainer and meeting
fees otherwise payable to him in respect of his services as a
member of the Board of the Company (“Director
Compensation”) by a specified percentage (up to
100 percent) and, in lieu of receiving such specified
percentage of Director Compensation, receive a number of Shares of
the Company, subject to the terms, conditions and restrictions set
forth herein (“Restricted Stock”), equal to the amount
of such reduction divided by a dollar amount equal to the Fair
Market Value of a Share on the date on which such Restricted Stock
is received. In the first year of the Participant’s
eligibility to participate in the Plan, an election in respect of
Director Compensation otherwise payable for the period of that
initial year of eligibility subsequent to the election must be made
within 30 days after the date that the Participant becomes
eligible so to participate (the “Initial Election
Deadline”). An election so made during the initial year of
eligibility shall become irrevocable on the Initial Election
Deadline and shall be effective beginning with the date that
Director Compensation is otherwise payable (each such date, a
“Director Payment Date”) that first occurs after the
Initial Election Deadline. Any election to reduce Director
Compensation otherwise payable in a calendar year after the
Participant’s initial year of eligibility shall be effective
beginning with the first Director Payment Date occurring on or
after January 1 of the calendar year next following the calendar
year in which such election is made (and shall become irrevocable
on December 31 of the calendar year in which such election is
made with respect to the next calendar year). Any cancellation of,
or other change in, any such Director Compensation reduction
election shall become effective as of the first Director Payment
Date occurring on or after January 1 of the calendar year next
following the calendar year in which notice of such cancellation or
change is filed (and any such notice shall become irrevocable on
December 31 of the calendar year in which it is filed with
respect to the next calendar year).
Any
Director Compensation reduction hereunder shall apply ratably to
the Participant’s Director Compensation otherwise payable on
each Director Payment Date covered by such election. Restricted
Stock shall be issued or purchased by the Company for the account
of the
Participant in respect of such Director Compensation reductions on
each Director Payment Date. Fractional shares will be issued (or
purchased) where necessary.
2. Company Matching
Contribution.
For each four shares of Restricted
Stock acquired by the Participant pursuant to Section 1 above,
the Company shall simultaneously issue or allocate to the account
of the Participant, for no additional consideration, one additional
share of Restricted Stock (the “Company Match”),
including fractional shares where necessary.
3. Terms of Restricted
Stock.
(a) The Restricted Stock is
subject to forfeiture as provided herein and, during the
Restriction Period defined below, may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of by the
Participant, other than by will or by the laws of descent and
distribution of the state in which the Participant resides on the
date of his death. The period during which the Restricted Stock is
not vested and is subject to transfer restrictions is referred to
herein as the “Restriction Period.”
(b) Except as otherwise provided
in this Agreement or the Plan, each share of Restricted Stock
acquired hereunder shall vest and no longer be subject to
forfeiture or any transfer restrictions hereunder on the third
anniversary of its acquisition date, so long as the Participant has
continued to serve as a member of the Company’s Board from
the acquisition date through such third anniversary.
(c) If the Participant separates
from service (within the meaning of Section 409A(a)(2)(A)(i)
of the Internal Revenue Code of 1986, as amended (the
“Code”)) as a member of the Company’s Board
either by reason of death or Disability (“Disability”
shall have the meaning set forth in Section 409A(a)(2)(C) of the
Code at any time such definition is more restrictive than the Plan
definition of “Disability”), or at the expiration of
his or her term as a director, or if there is a Change in Control
(provided that such Change in Control also constitutes a
“change in ownership or effective control” of the
Company within the meaning of Section 409A(a)(2)(A)(v) of the
Code), then any portion of the Restricted Stock that has not vested
shall immediately vest and no longer be subject to forfeiture or
any transfer restrictions hereunder. If the Participant separates
from service as a member of the Company’s Board for any other
reason, voluntarily or involuntarily, prior to the expiration of
his or her most recent term, then (X) any portion of the
Restricted Stock acquired by the Participant pursuant to the
Company Match that has not vested as of the date of separation from
service shall immediately be forfeited, ownership shall be
transferred back to the Company (and any dividends or other
distributions with respect thereto paid to the Participant shall be
returned to the Company) and the Restricted Stock shall become
authorized but unissued Shares, and (Y) any portion of the
Restricted Stock acquired by the Participant in respect of Director
Compensation reductions that has not vested as of the date of
separation from service may, at the Company’s option, be
repurchased by the Company at the price paid by the Participant for
such Restricted Stock,less the amount of dividends received
by
2
the
Participant (and the Company may pay such purchase price in whole
or in part by cancellation of any indebtedness owed by the
Participant to the Company). Any such Restricted Stock not so
repurchased by the Company will vest on the third anniversary of
its acquisition by the Participant.
4 . Registration of
Shares.
Certificates representing the number
of shares of Restricted Stock purchased from time to time shall be
registered in the Participant’s name (or an appropriate book
entry shall be made). Certificates, if issued, m
