Exhibit 10-I
SANDERSON FARMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement"), dated as of
the day of ________________, ____ (the "Date of Grant"), is delivered by
Sanderson Farms, Inc., and its subsidiaries and affiliates (collectively
referred to as "SFI") to ________________________________________ (the
"Optionee"), who is an executive officer or key employee of SFI.
WHEREAS, the Board of Directors of Sanderson Farms, Inc. (the
"Board") recommended stockholder approval of, the stockholders approved
and the Board adopted the Sanderson Farms, Inc. Stock Option Plan (as
amended and restated to the date hereof, the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock
options by the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) to executive officers and key
employees of SFI to purchase, or to exercise certain rights with respect
to, shares of the Common Stock of SFI, par value $1.00 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) considers the
Optionee to be a person who is eligible for grant of an incentive stock
option under the Plan, and has determined that it would be in the best
interest of SFI to grant the incentive stock option documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Grant of Incentive Stock Option.
(a) Subject to the terms and conditions hereinafter set forth,
SFI, with the approval and at the direction of the Board (or, if
applicable, a committee thereof appointed pursuant to Section 1.02(d) of
the Plan), hereby grants to the Optionee, as of the Date of Grant, an
option to purchase up to _______ shares of Stock at a price of
$__________ per share, which price per share is at or above the present
fair market value. Such option is hereinafter referred to as the
"Incentive Stock Option" and the shares of stock purchasable upon
exercise of the Incentive Stock Option are hereinafter sometimes
referred to as the "Incentive Stock Option Shares." The Incentive Stock
Option is intended by the parties hereto to be, and shall be treated as,
an "incentive stock option," pursuant to and as such term is defined
under Sections 421 and 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
(b) This Incentive Stock Option is granted subject to the
following additional terms and conditions (if none, so indicate):
2. Term and Exercise.
This Incentive Stock Option may be exercised during a period
beginning one year after and ending six years after the date of grant
thereof (the "option term"). Unless a shorter period is provided by the
Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan),
this Incentive Stock Option shall be
exercised in accordance with this section 2. During the first year of
the option term, no more than 25% of the initial total number of shares
covered by the Incentive Stock Option may be exercised and purchased by
the Optionee. During the second year of the option term, no more than
50% of the initial total number of shares covered by the Incentive Stock
Option may be exercised and purchased by the Optionee, such percentage
to include the percentage, by number of shares, purchased in the
previous year of the option term. During the third year of the option
term, no more than 75% of the initial total number of shares covered by
the Incentive Stock Option may be exercised and purchased by the
Optionee, such percentage to include the percentages, by number of
shares, previously purchased in earlier years of the option term on a
cumulative basis. During the fourth year of the option term, 100% of the
initial total number of shares covered by the Incentive Stock Option may
be exercised and purchased by the Optionee, such percentage to include
the percentages, by number of shares, previously purchased in earlier
years of the option term on a cumulative basis. No fractional shares
shall be issued as a result of the exercise of this Incentive Stock
Option. No Incentive Stock Option shall be exercisable after the
expiration of its option term.
3. Termination of Incentive Stock Option.
(a) Except as provided in Sections 3(b), 3(c) and 3(d) of this
Agreement, upon termination of the Optionee's employment, the Incentive
Stock Option, to the extent not previously exercised, shall terminate
immediately upon such termination of employment.
(b) Upon termination of the Optionee's employment by reason of
death of the Optionee, the Incentive Stock Option may be exercised, but
only to the extent exercisable on the date of such death, within one (1)
year from and after the date of the Optionee's death. The Incentive
Stock Option may be exercised by the executor or administrator of the
deceased Optionee's estate or by a person receiving the Incentive Stock
Option by will or under the laws of descent and distribution of the
state in which the Optionee resided.
(c) Upon termination of the Optionee's employment by reason of
permanent and total disability as defined under Section 22(e)(3) of the
Code, the Incentive Stock Option may be exercised, but only to the
extent exercisable on the date of such permanent and total disability,
during the one (1) year period following the date of such termination of
the Optionee's employment.
(d) Upon termination of the Optionee's employment by reason of
retirement or disability other than as defined by Section 3(c) of this
Agreement, the Incentive Stock Option may be exercised, but only to the
extent exercisable on the date of such retirement or disability, during
the three (3) month period following the date of such termination of the
Optionee's employment.
(e) A transfer of the Optionee's employment from one affiliate
of SFI to another shall not be deemed to be a termination of the
Optionee's employment.
(f) Notwithstanding any other provisions set forth herein or in
the Plan, if the Optionee shall (i) commit any act of malfeasance or
wrongdoing affecting SFI, (ii) breach any covenant not to compete or
employment contract with SFI, or (iii) engage in conduct that would
warrant the Optionee's discharge for cause (excluding general
dissatisfaction with the performance of the Optionee's duties, but
including any act of disloyalty or any conduct clearly tending to bring
discredit upon SFI), then any unexercised portion of the Incentive Stock
Option shall immediately terminate and be void.
4. Exercise of Incentive Stock Option.
(a) During the Option Term, the Optionee may exercise the
Incentive Stock Option with respect to all or any part of the number of
Incentive Stock Option Shares then exercisable hereunder by giving the
Board of SFI (or, if applicable, a committee thereof appointed pursuant
to Section 1.02(d) of the Plan) written notice of intent to exercise
substantially in the form attached hereto as Exhibit A. The notice of
exercise shall specify the number of Incentive Stock Option Shares as to
which the Incentive Stock Option is to be exercised and the date of
exercise thereof, which date shall be at least five days after the
giving of such notice unless an earlier date shall have been mutually
agreed upon.
(b) Full payment (in U.S. dollars) by the Optionee of the option
price for the Incentive Stock Option Shares purchased shall be made on
or before the exercise date specified in the notice of exercise in cash,
or, with the prior written consent of the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan), in
whole or in part through the surrender of previously acquired shares of
Stock at their fair market value on the exercise date.
On the exercise date specified in the Optionee's notice or as soon
thereafter as is reasonably practicable, SFI shall cause to be delivered
to the Optionee, a certificate or certificates for the Incentive Stock
Option Shares then being purchased (out of theretofore unissued Stock or
reacquired or surrendered Stock, as SFI may elect) upon full payment for
such Incentive Stock Option Shares. The obligation of SFI to deliver
Stock shall, however, be subject to the condition that if at any time
the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) shall determine in its discretion that
(i) the listing, registration or qualification of the Incentive Stock
Option or the Incentive Stock Option Shares upon any securities exchange
or under any state or federal law, or (ii) the consent or approval of
any governmental regulatory body, or (iii) an agreement by the Optionee
with respect to the disposition of shares of Common Stock, is necessary
or desirable as a condition of, or in connection with, the Incentive
Stock Option or the issuance or purchase of Stock thereunder, the
Incentive Stock Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any conditions
not acceptable to the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan).
(c) If the Optionee fails to pay for any of the Incentive Stock
Option Shares specified in such notice or fails to accept delivery
thereof, the Optionee's right to purchase such Incentive Stock Option
Shares may be terminated by SFI. The date specified in the Optionee's
notice as the date of exercise shall be deemed to be the date of
exercise of the Incentive Stock Option, provided that payment in full
for the Incentive Stock Option Shares to be purchased upon such exercise
shall have been received by such date.
5. Adjustment of and Changes in Stock of SFI.
In the event of a reorganization, recapitalization, change of
shares, stock split, spinoff, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of
capital stock of SFI, the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) shall make such
adjustment as it deems appropriate in the number and kinds of shares of
Stock subject to the Incentive Stock Option or in the option price;
provided, however, that no such adjustment shall give the Optionee any
additional benefits under the Incentive Stock Option.
6. Fair Market Value.
"Fair market value" as of any date and in respect of any share of
Common Stock means the closing price on such date or on the next
business day, if such date is not a business day, of a share of Common
Stock reflected in the NASDAQ National Market System traded under the
Symbol SAFM, provided that, if shares of Common Stock shall not have
been traded on NASDAQ for more than 10 days immediately preceding such
date or if deemed appropriate by the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan) for
any other reason, the fair market value of shares of Common Stock shall
be as determined by the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) in such other manner
as it may deem appropriate. In no event shall the fair market value of
any share of Common Stock be less than its par value.
7. No Rights as a Stockholder.
Neither the Optionee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of SFI
with respect to any shares of Stock purchasable or issuable upon the
exercise of this Incentive Stock Option, in whole or in part, prior to
the issuance of certificates for shares of Common Stock to said person.
8. Insider Trading Short-Swing Profit Liability Exemption
Requirements.
Notwithstanding
any other provision of this Agreement to the
contrary, the Incentive Stock Option granted under this Agreement shall
be transferrable (i) by the option holder only by will or under the laws
of descent and distribution of the state in which the option holder
resided on the date of his death, and (ii) by the Company pursuant to a
qualified domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act or the Rules thereunder.
9. No Rights of Employment.
Neither the granting of this Incentive Stock Option nor its
exercise shall be construed as granting to the Optionee any right with
respect to continuance of employment with SFI. Except as may otherwise
be limited by a written agreement between SFI and the Optionee, and
acknowledged by the Optionee, the right of SFI to terminate at will the
Optionee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by SFI.
10. Amendment of Incentive Stock Option.
The Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) may, without further action by
the stockholders and without the consent of or further consideration
from the Optionee, amend, condition or modify this Incentive Stock
Option in response to changes in securities or other laws or rules,
regulations or regulatory interpretations thereof applicable to the
Incentive Stock Option or to comply with stock exchange rules or
requirements. The Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) may amend this
Incentive Stock Option otherwise with the written consent of the
Optionee.
11. Notice.
Any notice to SFI provided for in this instrument shall be
addressed to it in care of its Secretary at its executive offices at
Post Office Box 988, Laurel, Mississippi 39441, and any notice to the
Optionee shall be addressed to the Optionee at the current address shown
on the payroll records of SFI. Any notice shall be deemed to be duly
given if and when properly addressed and posted by registered or
certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
This Incentive Stock Option is granted pursuant to the terms of
the Plan, which terms are incorporated herein by reference, and the
Incentive Stock Option shall in all respects be interpreted in
accordance with the Plan. The
Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) shall
interpret and construe the Plan and this instrument, and its
interpretations and determinations shall be conclusive and binding on
the parties hereto and any other person claiming an interest hereunder,
with respect to any issue arising hereunder or thereunder.
13. Governing law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in accordance
with the laws of the State of Mississippi, except to the extent
preempted by federal law, which shall to that extent govern.
IN WITNESS WHEREOF, SFI has caused its duly authorized officers to
execute and attest this Incentive Stock Option Agreement, and to apply
the corporate seal hereto, and the Optionee has placed his or her
signature hereon, effective as of the Date of Grant.
SANDERSON FARMS, INC.
ATTEST:
By:
Name:
Title:
ACCEPTED AND AGREED TO:
Optionee
NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
SANDERSON FARMS, INC.
ATTENTION: The Board of Directors
Stock Option Committee
Gentlemen:
Notice is hereby given of the undersigned's intent to exercise the
Incentive Stock Option granted to the undersigned pursuant to the
Incentive Stock Option Agreement dated _______________, ______ entered
into by and between the undersigned and Sanderson Farms, Inc. The
Incentive Stock Option shall be exercised with respect to
________________________ (_____) shares of the common stock, par value
$1.00 per share, of Sanderson Farms, Inc., at the exercise price of
$______________ per share. The date of exercise shall be
_______________, ______ which is five days or more after the date of
this notice.
In connection with the exercise of the Incentive Stock Option, the
undersigned acknowledges that no withholding of income taxes is
required.
Employee/Optionee
Dated: ________________, ______
SANDERSON FARMS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT ("Agreement"), dated as of the
______ day of _______________, ______ (the "Date of Grant"), is delivered by
Sanderson Farms, Inc., and its subsidiaries and affiliates (collectively
referred to as "SFI") to_____________________________________ (the "Optionee"),
who is an executive officer or key employee of SFI.
WHEREAS, the Board of Directors of Sanderson Farms, Inc. (the "Board"),
recommended stockholder approval of, the stockholders approved and the Board
adopted, the Sanderson Farms, Inc. Stock Option Plan (as amended and restated
to the date hereof, the "Plan");
WHEREAS, the Plan provides for the granting of nonstatutory stock options
by the Board (or,if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) to executive officers and key employees of SFI
to purchase, or to exercise certain rights with respect to, shares of the
Common Stock of SFI, par value $1.00 per share (the "Stock"), in accordance
with the terms and provisions thereof; and
WHEREAS, the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) considers the Optionee to be a person
who is eligible for grant of a nonstatutory stock option under the Plan, and has
determined that it would be in the best interest of SFI to grant the
nonstatutory stock option documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Nonstatutory Stock Option.
(a) Subject to the terms and conditions hereinafter set forth, SFI, with
the approval and at the direction of the Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan), hereby grants to
the Optionee, as of the Date of Grant, an option to purchase up to
________ shares of Stock at a price of $___________ per share, which price
per share is at or below the present fair market value. Such option is
hereinafter referred to as the "Nonstatutory Stock Option"
and the shares of stock purchasable upon exercise of the Nonstatutory Stock
Option are hereinafter sometimes referred to as the "Nonstatutory Stock
Option Shares." Notwithstanding any provision herein
to the contrary, the Option is not intended by the parties hereto to be, and
shall not be treated as, an "incentive stock option," pursuant to and as such
term is defined under Sections 421 and 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), but is intended
by the parties hereto to be, and shall be treated as, a "nonstatutory
stock option."
(b) This Nonstatutory Stock Option is granted subject to the
following additional terms and conditions (if none, so indicate):
2. Term and Exercise.
This Nonstatutory Stock Option may be exercised during a period beginning
one year after and ending six years after the date of grant thereof (the
"option term"). Unless a shorter period is provided
by the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan), this Nonstatutory Stock Option shall be exercised
in accordance with this section 2. During the first year
of the option term, no more than 25% of the initial total number of shares
covered by the Nonstatutory Stock Option may be exercised and purchased by the
Optionee. During the second year of the option term, no more than 50% of the
initial total number of shares covered by the Nonstatutory Stock Option
may be exercised and purchased by the Optionee, such percentage to include the
percentage, by number of shares, purchased in the previous year of the option
term. During the third year of the option term, no more than 75% of the initial
total number of shares covered by the Nonstatutory Stock Option may be
exercised and purchased by the Optionee, such percentage to include the
percentages, by number of shares, previously purchased in earlier years of
the option term on a cumulative basis. During the fourth year of the option
term, 100% of the initial total number of shares covered by the Nonstatutory
Stock Option may be exercised and purchased by the Optionee, such percentage to
include the percentages, by number of shares, previously purchased in earlier
years of the option term on a cumulative basis. No fractional shares shall be
issued as a result of the exercise of this Nonstatutory Stock Option. No
Nonstatutory Stock Option shall be exercisable after the expiration of its
option term.
3. Termination of Nonstatutory Stock Option.
(a) Except as provided in Sections 3(b) and 3(c) of this Agreement,
upon termination of the Optionee's employment, the Nonstatutory Stock Option,
to the extent not previously exercised, shall terminate immediately upon such
termination of employment.
(b) Upon termination of the Optionee's employment by reason of death of
the Optionee, the Nonstatutory Stock Option may be exercised, but only to the
extent exercisable on the date of such death, within one (1) year from and
after the date of the Optionee's death. The Nonstatutory Stock Option may be
exercised by the executor or administrator of the deceased Optionee's estate
or by a person receiving the Nonstatutory Stock Option by will or under the
laws of descent and distribution of the state in which the Optionee resided.
(c) Upon termination of the Optionee's employment by reason of
retirement or disability (as defined by the
Board (or, if applicable, a committee thereof appointed pursuant to Section
1.02(d) ofthe Plan), the Nonstatutory Stock Option may be exercised, but only
to the extent exercisable on the date of such retirement or disability,
during the three (3) month period following the date of such termination of
the Optionee's employment.
(d) A transfer of the Optionee's employment from one affiliate of SFI to
another shall not be deemed to be a termination of the Optionee's employment.
(e) Notwithstanding any other provisions set forth herein or in the Plan,
if the Optionee shall (i) commit any act of malfeasance or wrongdoing affecting
SFI, (ii) breach any covenant not to compete or employment contract with SFI,
or (iii) engage in conduct that would warrant the Optionee's discharge for
cause (excluding general dissatisfaction with the performance of the Optionee's
duties, but including any act of disloyalty or any conduct clearly tending to
bring discredit upon SFI), then any unexercised portion of the Nonstatutory
Stock Option shall immediately terminate and be void.
4. Exercise of Nonstatutory Stock Option.
(a) During the Option Term, the Optionee may exercise the Nonstatutory
Stock Option with respect to all or any part of the number of Nonstatutory
Stock Option Shares then exercisable hereunder by giving the Board of SFI (or,
if applicable, a committee thereof appointed pursuant to Section 1.02(d) of the
Plan) written notice of intent to exercise substantially in the form attached
hereto as Exhibit A. The notice of exercise shall specify the number of
Nonstatutory Stock Option Shares as to which the Nonstatutory Stock Option is
to be exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier date shall
have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Optionee of the option price
for the Nonstatutory Stock Option Shares purchased shall be made on or before
the exercise date specified in the notice of exercise in cash, or, with the
prior written consent of the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan), in whole or in part
through the surrender of previously acquired shares of Stock at their fair
market value on the exercise date.
On the exercise date specified in the Optionee's notice or as soon
thereafter as is reasonably practicable, SFI shall cause to be delivered to the
Optionee, a certificate or certificates for the Nonstatutory Stock Option
Shares then being purchased (out of theretofore unissued Stock or reacquired
or surrendered Stock, as SFI may elect) upon full payment for such Nonstatutory
Stock Option Shares. The obligation of SFI to deliver Stock shall, however, be
subject to the condition that if at any time the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan) shall
determine in its discretion that (i) the listing, registration or
qualification of the Nonstatutory Stock Option or the Nonstatutory Stock Option
Shares upon any securities exchange or under any state or federal law, or
(ii) the consent or approval of any governmental regulatory body or (iii) an
agreement by the Optionee with respect to the disposition of shares of Common
Stock, is necessary or desirable as a condition of, or in connection with, the
Option or the issuance or purchase of Stock thereunder, the Nonstatutory Stock
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Board
(or, if applicable, a committee thereof appointed pursuant to Section 1.02(d)
of the Plan).
(c) If the Optionee fails to pay for any of the Nonstatutory Stock
Option Shares specified in such notice or fails to accept delivery thereof,
the Optionee's right to purchase such Nonstatutory Stock Option Shares may be
terminated by SFI. The date specified in the Optionee's notice as the date
of exercise shall be deemed to be the date of exercise of the Option,
provided that payment in full for the Nonstatutory Stock Option Shares to be
purchased upon such exercise shall have been received by such date.
5. Adjustment of and Changes in Stock of SFI.
In the event of a reorganization, recapitalization, change of shares,
stock split, spinoff, stock dividend, reclassification, subdivision or
combination of shares, merger, consolidation, rights offering, or
any other change in the corporate structure or shares of capital stock of
SFI, the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) shall make such adjustment as it deems
appropriate in the number and kinds of shares of Stock subject to the
Nonstatutory Stock Option or in the option price; provided, however, that
no such adjustment shall give the Optionee any additional benefits under the
Nonstatutory Stock Option.
6. Fair Market Value.
"Fair market value" as of any date and in respect of any share of Common
Stock means the closing price on such date or on the next business day, if
such date is not a business day, of a share of Common Stock reflected in the
NASDAQ National Market System traded under the Symbol SAFM, provided that, if
shares of Common Stock shall not have been traded on NASDAQ for more than 10
days immediately preceding such date or if deemed appropriate by the Board
(or, if applicable, a committee thereof appointed pursuant to Section 1.02(d)
of the Plan) for any other reason, the fair market value of shares of Common
Stock shall be as determined by the Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) in such other
manner as it may deem appropriate. In no event shall the fair market value of
any share of Common Stock be less than its par value.
7. No Rights as a Stockholder.
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights and privileges of, a stockholder of SFI with respect to
any shares of Stock purchasable or issuable upon the exercise of this
Nonstatutory Stock Option, in whole or in part, prior to the issuance of
certificates for shares of Common Stock to said person.
8. Insider Trading Short-Swing Profit Liability Exemption Requirements.
Notwithstanding any other provision of this Agreement to the contrary,
the Nonstatutory Stock Option granted under this Agreement shall be
transferrable (i) by the option holder only by will or under the laws of
descent and distribution of the state in which the option holder resided on
the date of his death or (ii) by the Company pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act or the Rules thereunder [except that it may
be transferred to members of the Optionee s immediate family or to trusts for
their benefit or partnerships in which such members hold the entire
partnership interest].
9. No Rights of Employment.
Neither the granting of this Nonstatutory Stock Option nor its exercise
shall be construed as granting to the Optionee any right with respect to
continuance of employment with SFI. Except as may otherwise be limited by a
written agreement between SFI and the Optionee, and acknowledged by the
Optionee, the right of SFI to terminate at will the Optionee's employment with
it at any time (whether by dismissal, discharge, retirement or otherwise) is
specifically reserved by SFI.
10. Amendment of Nonstatutory Stock Option.
The Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) may, without further action by the stockholders
and without the consent of or further consideration from the Optionee, amend,
condition or modify this Nonstatutory Stock Option in response to changes
in securities or other laws or rules, regulations or regulatory
interpretations thereof applicable to the Nonstatutory Stock Option or to
comply with stock exchange rules or requirements. The Board (or, if applicable,
a committee thereof appointed pursuant to Section 1.02(d) of the Plan) may
amend this Nonstatutory Stock Option otherwise with the written consent of the
Optionee.
11. Notice.
Any notice to SFI provided for in this instrument shall be addressed to
it in care of its Secretary at its executive offices at Post Office Box 988,
Laurel, Mississippi 39441, and any notice to the Optionee shall be addressed
to the Optionee at the current address shown on the payroll records of
SFI. Any notice shall be deemed to be duly given if and when properly
addressed and posted by registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
This Nonstatutory Stock Option is granted pursuant to the terms of the
Plan, which terms are incorporated herein by reference, and the Nonstatutory
Stock Option shall in all respects be interpreted in accordance with the
Plan. The Board (or, if applicable, a committee thereof appointed pursuant
to Section 1.02(d) of the Plan) shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall be
conclusive and binding on the parties hereto and any other person claiming
an interest hereunder, with respect to any issue arising hereunder or
thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the laws
of the State of Mississippi, except to the extent preempted by federal law,
which shall to that extent govern.
IN WITNESS WHEREOF, SFI has caused its duly authorized officers to
execute and attest this Nonstatutory Stock Option Agreement, and to apply the
corporate seal hereto, and the Optionee has placed his or her signature
hereon, effective as of the Date of Grant.
SANDERSON FARMS, INC.
ATTEST:
By:
Name:
Title:
ACCEPTED AND AGREED TO:
Optionee
NOTICE OF EXERCISE OF NONSTATUTORY STOCK OPTION
SANDERSON FARMS, INC.
ATTENTION: The Board of Directors
Stock Option Committee
Gentlemen:
Notice is hereby given of the undersigned's intent to exercise the
Nonstatutory Stock Option granted to the undersigned pursuant to the
Nonstatutory Stock Option Agreement dated _______________, ______, entered
into by and between the undersigned and Sanderson Farms, Inc. The
Nonstatutory Stock Option shall be exercised with respect to
__________________ (______) shares of the common stock, par value $1.00 per
share, of Sanderson Farms, Inc., at the exercise price of $__________ per
share. The date of exercise shall be _______________, ______, which is five
days or more after the date of this notice.
In connection with the exercise of the Nonstatutory Stock Option, the
undersigned authorizes SFI to withhold all appropriate federal and state
income and payroll taxes where cash is paid. Where only stock is transferred,
the undersigned will remit to SFI an amount in cash equal to the appropriate
federal and state income and payroll taxes upon being advised of the amount.
Alternatively, SFI may reduce the number of shares distributed by an amount or
number equal in value to the withholding amount.
Employee/Optionee
Dated: ,
SANDERSON FARMS, INC.
ALTERNATE STOCK APPRECIATION RIGHTS AGREEMENT
THIS ALTERNATE STOCK APPRECIATION RIGHTS AGREEMENT ( Agreement ), dated
as of the ______ day of _______________ , _____ (the Date of Grant ), is
delivered by Sanderson Farms, Inc., and its subsidiaries and affiliates
(collectively referred to as "SFI") to ______________________________________
(the Optionee ), who is an executive officer or key employee of SFI.
WHEREAS, the Board of Directors of Sanderson Farms, Inc. (the Board ),
recommended stockholder approval of, the stockholders approved and the Board
adopted, the Sanderson Farms, Inc. Stock Option Plan (as amended and restated
to the date hereof, the Plan );
WHEREAS, the Plan provides for the granting of alternate stock
appreciation rights by the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) to
executive officers and key employees of SFI to receive the appreciation
in value of shares of the Common Stock of SFI, par value of $1.00 per share
(the "Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) considers the Optionee to be a person
who is eligible for a grant of an alternate stock appreciation right under the
Plan, and has determined that it would be in the best interest of SFI to
grant the alternate stock appreciation right documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Alternate Stock Appreciation Right.
(a) Subject to the terms and conditions hereinafter set forth, SFI, with
the approval and at the direction of the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan),
hereby grants to the Optionee, as of the Date of Grant, an alternate stock
appreciation right related to a certain __________ Stock Option granted
pursuant to a certain __________ Stock Option Agreement dated _______________,
_____. The shares of stock purchasable upon exercise of the related
__________ Stock Option are hereinafter referred to as "Option Shares."
Notwithstanding any provision herein to the contrary, the Alternate Stock
Appreciation Right is not intended by the parties hereto to be, and shall
not be treated as, an "incentive stock option," pursuant to and as such term is
defined under Sections 421 and 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
(b) This Alternate Stock Appreciation Right is granted subject to the
following additional terms and conditions (if none, so indicate):
2. Exercise of Alternate Stock Appreciation Right.
The Optionee may, in lieu of the exercise of the ____________ Stock
Option or portion thereof to which this Alternate Stock Appreciation Right
relates, exercise this Alternate Stock Appreciation Right or portion
hereof with respect to all or part of the option shares then exercisable and
shall be entitled to receive from SFI the appreciated value of the option
shares. The appreciated value of the option shares shall be equal to 100% of
the amount, if any, by which the fair market value of a share of Common
Stock on the date this Alternate Stock Appreciation Right is exercised exceeds
the fair market value of a share of Common Stock on the date the option, to
which this Alternate Stock Appreciation Right was awarded as an alternate, was
granted. This Alternate Stock Appreciation Right shall be exercisable only
to the extent that, and subject to the same conditions as, the option to which
it relates is exercisable and only when the fair market value of a share of
Common Stock on the exercise date exceeds the exercise price of the option to
which this Alternate Stock Appreciation Right relates. The Optionee may
exercise this Alternate Stock Appreciation Right by giving the Secretary of
SFI written notice of intent to exercise substantially in the form attached
hereto as Exhibit A. The notice of exercise shall specify the number of Option
Shares as to which this Alternate Stock Appreciation Right is to be
exercised and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier date shall
have been mutually agreed upon. Payment of the appreciated value of
the Option Shares may be made in cash or in Common Stock or a combination of
both, provided that no fractional share of Common Stock shall be issued as a
result of the exercise of this Alternate Stock Appreciation Right. The exercise
of this Alternate Stock Appreciation Right or portion hereof shall
cancel the related option on an equal number of shares of Common Stock under
the __________ Stock Option to which this Alternate Stock Appreciation Right
relates.
3. Termination of Alternate Stock Appreciation Right Related to Nonstatutory
Stock Option.
(a) Except as provided in Sections 3(b) and 3(c) of this Agreement, upon
termination of the Optionee's employment, this Alternate Stock Appreciation
Right, to the extent not previously exercised, shall terminate immediately
upon such termination of employment.
(b) Upon termination of the Optionee's employment by reason of death of
the Optionee, this Alternate Stock Appreciation Right may be exercised, but
only to the extent exercisable on the date of such death, within one (1) year
from and after the date of the Optionee's death. This Alternate Stock
Appreciation Right may be exercised by the executor or administrator of the
deceased Optionee's estate or by a person receiving this Alternate Stock
Appreciation Right by will or under the laws of descent and distribution of
the state in which the Optionee resided.
(c) Upon termination of the Optionee's employment by reason of
retirement or disability (as defined by the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan),
this Alternate Stock Appreciation Right may be exercised, but only to the
extent exercisable on the date of such retirement or disability, during the
three (3) month period following the date of such termination of the
Optionee's employment.
(d) A transfer of the Optionee's employment from one affiliate of SFI to
another shall not be deemed to be a termination of the Optionee's employment.
(e) Notwithstanding any other provisions set forth herein or in the Plan,
if the Optionee shall (i) commit any act of malfeasance or wrongdoing affecting
SFI, (ii) breach any covenant not to compete or employment contract with SFI,
or (iii) engage in conduct that would warrant the Optionee's
discharge for cause (excluding general dissatisfaction with the performance of
the Optionee's duties, but including any act of disloyalty or any conduct
clearly tending to bring discredit upon SFI), then any unexercised portion of
the Alternate Stock Appreciation Right shall immediately terminate and be void.
4. Termination of Alternate Stock Appreciation Right Related to Incentive
Stock Option.
(a) Except as provided in Sections 4(b), 4(c) and 4(d) of this Agreement,
upon termination of the Optionee's employment, this Alternate Stock
Appreciation Right, to the extent not previously exercised, shall terminate
immediately upon such termination of employment.
(b) Upon termination of the Optionee's employment by reason of death of
the Optionee, this Alternate Stock Appreciation Right may be exercised, but
only to the extent exercisable on the date of such death, within one (1) year
from and after the date of the Optionee's death. This Alternate Stock
Appreciation Right may be exercised by the executor or administrator of the
deceased Optionee's estate or by a person receiving the Alternate Stock
Appreciation Right by will or under the laws of descent and distribution of
the state in which the Optionee resided.
(c) Upon termination of the Optionee's employment by reason of permanent
and total disability as defined under Section 22(e)(3) of the Code, this
Alternate Stock Appreciation Right may be exercised, but only to the extent
exercisable on the date of such permanent and total disability, during
the one (1) year period following the date of such termination of the
Optionee's employment.
(d) Upon termination of the Optionee's employment by reason of retirement
or disability, other than disability defined by Section 4(c) of this Agreement,
this Alternate Stock Appreciation Right may be exercised, but only to the
extent exercisable on the date of such retirement or disability, during the
three (3) month period following the date of such termination of the
Optionee's employment.
(e) A transfer of the Optionee's employment from one affiliate to
another of SFI shall not be deemed to be a termination of the Optionee's
employment.
(f) Notwithstanding any other provision set forth herein or in the Plan,
if the Optionee shall (i) commit any act of malfeasance or wrong-doing
affecting SFI, (ii) breach any covenant not to compete or employment contract
with SFI, or (iii) engage in conduct that would warrant the Optionee's
discharge for cause (excluding general dissatisfaction with the performance
of the Optionee's duties, but including any act of disloyalty or any conduct
clearly tending to bring discredit upon SFI), then any unexercised portion of
the Alternate Stock Appreciation Right shall immediately terminate and be void.
5. Adjustment of and Changes in Stock of SFI.
In the event of a reorganization, recapitalization, change of shares,
stock split, spinoff, stock dividend, reclassification, subdivision or
combination of shares, merger, consolidation, rights offering, or
any other change in the corporate structure or shares of capital stock
of SFI, the Board (or, if applicable, a committee thereof appointed pursuant
to Section 1.02(d) of the Plan) shall make such adjustment as it
deems appropriate in the number and kinds of shares of Stock subject to the
Alternate Stock Appreciation Right; provided, however, that no such
adjustment shall give the Optionee any additional benefits under the
Alternate Stock Appreciation Right.
6. Fair Market Value.
"Fair market value" as of any date and in respect of any share of Common
Stock means the closing price on such date or on the next business day, if
such date is not a business day, of a share of Common Stock reflected in the
NASDAQ National Market System traded under the Symbol SAFM, provided that, if
shares of Common Stock shall not have been traded on NASDAQ for more than 10
days immediately preceding such date or if deemed appropriate by the Board
(or, if applicable, a committee thereof appointed pursuant to Section 1.02(d)
of the Plan) for any other reason, the fair market value of shares of Common
Stock shall be as determined by the Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) in such other
manner as it may deem appropriate. In no event shall the fair market value of
any share of Common Stock be less than its par value.
7. No Rights as a Stockholder.
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights and privileges of, a stockholder of SFI with respect to
any shares of Stock related to the exercise of the Alternate Stock
Appreciation Right, in whole or in part, prior to the issuance of certificates
for shares of Common Stock to said person.
8. Insider Trading Short-Swing Profit Liability Exemption Requirements.
Notwithstanding any other provision of this Agreement to the contrary,
the Alternate Stock Appreciation Right granted under this Agreement shall be
transferrable (i) by the option holder only by will or under the laws of
descent and distribution of the state in which the option holder resided on
the date of his death or (ii) by the Company pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act or the Rules thereunder [, except
that, if the Alternate Stock Appreciation Right granted hereby relates to
a Nonstatutory Stock Option, it may be transferred to members of the
Optionee s immediate family or to trusts for their benefit or
partnerships in which such members hold the entire partnership interest].
9. No Rights of Employment.
Neither the granting of this Alternate Stock Appreciation Right nor its
exercise shall be construed as granting to the Optionee any right with respect
to continuance of employment with SFI. Except as may otherwise be limited by a
written agreement between SFI and the Optionee, and acknowledged by the
Optionee, the right of SFI to terminate at will the Optionee's employment
with it at any time (whether by dismissal, discharge, retirement or otherwise)
is specifically reserved by SFI.
10. Amendment of Alternate Stock Appreciation Right.
The Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) may, without further action by the stockholders
and without the consent of or further consideration from the Optionee, amend,
condition or modify this Alternate Stock Appreciation Right in response to
changes in securities or other laws or rules, regulations or regulatory
interpretations thereof applicable to the Alternate Stock Appreciation Right
or to comply with stock exchange rules or requirements. The Board (or,
if applicable, a committee thereof appointed pursuant to Section 1.02(d) of
the Plan) may amend this Alternate Stock Appreciation Right otherwise with the
written consent of the Optionee.
11. Notice.
Any notice to SFI provided for in this instrument shall be addressed to
it in care of its Secretary at its executive offices at Post Office Box 988,
Laurel, Mississippi 39441, and any notice to the Optionee shall be
addressed to the Optionee at the current address shown on the payroll records
of SFI. Any notice shall be deemed to be duly given if and when properly
addressed and posted by registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
This Alternate Stock Appreciation Right is granted pursuant to the terms
of the Plan, which terms are incorporated herein by reference, and the
Alternate Stock Appreciation Right shall in all respects be interpreted
in accordance with the Plan. The Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) shall interpret and
construe the Plan and this instrument, and its interpretations and
determinations shall be conclusive and binding on the parties hereto and
any other person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. Governing law.
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the laws of
the State of Mississippi, except to the extent preempted by federal law,
which shall to that extent govern.
IN WITNESS WHEREOF, SFI has caused its duly authorized officers to
execute and attest this Alternate Stock Appreciation Right Agreement, and to
apply the corporate seal hereto, and the Optionee has placed his or her
signature hereon, effective as of the Date of Grant.
SANDERSON FARMS, INC.
ATTEST:
By:
Name:
Title:
ACCEPTED AND AGREED TO:
Optionee
NOTICE OF EXERCISE OF ALTERNATE STOCK APPRECIATION RIGHT
SANDERSON FARMS, INC.
ATTENTION: The Board of Directors
Stock Option Committee
Gentlemen:
Notice is hereby given of the undersigned's intent to exercise the
Alternate Stock Appreciation Right granted to the undersigned pursuant to
the Alternate Stock Appreciation Rights Agreement dated
________________, _____ , entered into by and between the undersigned
and Sanderson Farms, Inc. The Alternate Stock Appreciation Right shall be
exercised with respect to ______________ (______) shares of the Common Stock,
$1.00 par value, of Sanderson Farms, Inc. The date of exercise shall be
_______________, ____, which is five days or more after the date of this
notice.
In connection with the exercise of the Alternate Stock Appreciation
Right, the undersigned authorizes SFI to withhold all appropriate federal and
state income and payroll taxes where cash is paid. Where only stock is
transferred, the undersigned will remit to SFI an amount in cash equal to the
appropriate federal and state income and payroll taxes upon being advised
of the amount. Alternatively, SFI may reduce the number of shares distributed
by an amount or number equal in value to the withholding amount.
Employee/Optionee
Dated: _______________. _____