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EXHIBIT 10.4
SANDERSON FARMS, INC.
SHARE PURCHASE AGREEMENT
(MANAGEMENT SHARE PURCHASE PLAN)
(EMPLOYEE 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.
(a) Base Salary Reduction. The Participant may elect to reduce his
base
salary by a specified percentage thereof
(not to exceed 15%) and, in lieu of
receiving such salary, 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 salary 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 for salary
paid during calendar year 2005 must be made
on or before March 18, 2005
("Initial Salary Election"), and shall
become irrevocable on March 18, 2005. The
Initial Salary Election shall be effective
beginning with the first pay period
that ends after March 18, 2005. Any
election to reduce salary otherwise payable
in calendar year 2006 or thereafter shall
be effective beginning with the first
pay period that ends 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
salary reduction election shall become
effective as of the first pay period
ending 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 salary reduction hereunder shall apply ratably to the
Participant's salary for each pay period
covered by such election. Restricted
Stock shall be issued for the account of
the Participant, or allocated to the
account of the Participant from Shares
purchased for the account of the
Participant, in respect of such salary
reductions on the last business day in
each calendar quarter ending March 31, June
30, September 30 and December 31
(each such date, a "Quarterly Allocation
Date"). The number of shares of
Restricted Stock issued or allocated to the
Participant on each Quarterly
Allocation Date shall be based upon the
aggregate salary reduction for pay
periods ending since the next preceding
Quarterly Allocation Date and the Fair
Market Value of a Share on such later
Quarterly Allocation Date. Fractional
shares will be issued (or allocated) where
necessary.
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If a
Participant who has elected salary reductions hereunder shall
terminate employment before shares of
Restricted Stock are issued or allocated
in respect of all such salary reductions,
any salary reduction amounts in
respect of which Restricted Stock has not
been granted by the date of
Participant's termination of employment
shall be returned to Participant
promptly in cash, subject to compliance
with the requirements of Sections
409A(a)(2) and (3) of the Code.
(b) Bonus
Reduction. The Participant may also elect to reduce his annual
bonus compensation, if any, by a specified
percentage thereof (not to exceed
75%) and, in lieu of receiving such bonus,
receive a number of shares of
Restricted Stock equal to the amount of
such bonus 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 for the bonus payable with respect
to the Fiscal Year ending October
31, 2005 and for the bonus payable with
respect to any subsequent Fiscal Year
must be made on or before April 30 of that
Fiscal Year (or if such day is not a
business day, then on or before the next
preceding business day) and shall
become irrevocable on that date with
respect to that Fiscal Year. Any
cancellation of, or other change in, any
such bonus reduction election shall
become effective with respect to the Fiscal
Year in which notice of such
cancellation or change is filed if it is
filed on or before April 30 of that
Fiscal Year (or, if such day is not a
business day, then on or before the next
preceding business day); otherwise, it
shall become effective with respect to
the Fiscal Year next following the Fiscal
Year in which it is filed.
Restricted Stock shall be issued or allocated to the account of
the
Participant in respect of any such bonus
reduction on the date that such bonus
is otherwise payable.
If a Participant who has elected a bonus reduction hereunder
shall
terminate employment before shares of
Restricted Stock are issued or allocated
in respect of such bonus reduction, such
election shall be deemed canceled and
any bonus compensation due to the
Participant shall be paid in cash, subject to
compliance with the requirements of
Sections 409A(a)(2) and (3) of the Code.
2. Company
Matching Contribution.
For each four shares of Restricted Stock acquired by the
Participant
pursuant to Section 1 above, whether in
respect of base salary or bonus
reductions, the Company shall
simultaneously issue to, 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
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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 remained continuously
employed by the Company from such
acquisition date through such third
anniversary.
(c) In the event of (i) the Participant's termination of
employment
with the Company 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"), (ii) his termination of
employment with the Company on or after
his attainment of eligibility for
retirement (as determined by the Board from
time to time), or (iii) 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), 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; provided that
in the case of a Participant who is a
"specified employee" within the meaning of
Section 409A(a)(2)(B) of the Code, such
Restricted Stock shall not vest before
the date which is six months after the date
of the Participant's separation from
service (or, if earlier, the date of his
death). If the Participant's employment
with the Company is terminated 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 employment termination
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 salary or bonus reductions that
has not vested as of the date of the
employment termination may, at
