<PAGE>
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
received. In the first year of the
Participant's eligibility to participate in
the Plan, an election to reduce the
Participant's salary 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 ("Initial Salary Election")
shall become irrevocable on the Initial
Election Deadline and shall be effective
beginning with the first pay period
that ends after the Initial Election
Deadline. Any election to reduce salary
otherwise payable in a calendar year after
the Participant's initial year of
eligibility 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
previously purchased by the Company, in
respect of such salary reductions on the
last business day in each calendar
<PAGE>
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 purchased)
where necessary.
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 received. 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 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.
2
<PAGE>
(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 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 meaning 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 bonu
