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EXHIBIT 10.3
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"), sets 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 issued or
allocated to the account of the
Participant. An election in respect of Director
Compensation payable during calendar year
2005 must be made on or before March
18, 2005 ("Initial Election"), and shall
become irrevocable on March 18, 2005.
The Initial Election shall be effective
beginning with the date that Director
Compensation is otherwise payable (each
such date, a "Director Payment Date")
that first occurs after March 18, 2005. Any
election to reduce Director
Compensation otherwise payable in calendar
year 2006 or thereafter 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 for the account of the
Participant in respect of such Director
Compensation reductions on each Director
Payment Date. Fractional shares will be
issued (or allocated) where necessary.
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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 for or there
shall be allocated 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 shall vest and no
longer be subject to forfeiture or
any transfer restrictions hereunder on the
third anniversary of its acquisition
by the Participant, so long as the
Participant has continued to serve as a
member of the Company's Board from such
acquisition date through such third
anniversary.
(c) If the Participant ceases to serve as a member of the
Company's
Board by reason of death or Disability (for
purposes of this Section 3,
"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 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 meeting 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 ceases to serve as a member
of the Company's Board for any other
reason, voluntarily or involuntarily, prior
to the expiration of the Restriction
Period for any shares of Restricted Stock
acquired pursuant to this Agreement by
the Participant, 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
cessation of service shall immediately be
forfeited, ownership shall be
transferred back 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 cessation of service may,
at the Company's option, be
repurchased by the Company at the price
paid by the Participant for such
Restricted Stock (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).
2
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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, may, at the
Company's option, either be held by the
Company in escrow until the applicable
Restriction Period expires or until the
restrictions thereon otherwise lapse
and/or be delivered to the Participant and
registered in the name of the
Participant, bearing an appropriate
restrictive legend that refers to this
Agreement and remaining subject to
appropriate stop-transfer orders. The
Participant agrees to deliver to the Board,
upon request, one or more stock
powers endorsed in blank relating to the
Restricted Stock. If and when shares of
Restricted Stock vest and are no longer
subjec
