EXHIBIT 4.11
SANDERSON FARMS, INC.
FORM OF
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):
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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. The Board (or, if applicable,
a committee thereof appointed pursuant to Section 1.02(d) of the Plan) may
require the Optionee to certify that he has not engaged in any of the conduct
described in the first sentence of Section 3(f) or Section 4(g). 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, or
except as otherwise determined by the Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan), this Alternate Stock
Appreciation Right, to the extent not previously exercised, shall terminate upon
the termination of the Optionee's employment or the appointment or transfer of
the Optionee to a position within SFI that does not qualify for participation in
the Plan.
(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
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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, within three (3)
months from and after 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.
(f) Notwithstanding any other provisions set forth herein or in the
Plan, if during the period that the Optionee is employed by SFI or during the
two year period following the Optionee's voluntary termination of employment or
his termination by SFI 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) the Optionee shall, without
the prior written consent of the Board, directly or indirectly, as employee,
agent, consultant, stockholder, director, co-partner or in any other individual
or representative capacity, own, operate, manage, control, engage in, invest in
or participate in any manner in, act as a consultant or advisor to, render
services for, or otherwise assist any person or entity that directly or
indirectly engages in, the business of producing, marketing, distributing or
selling poultry products anywhere that SFI is then doing business, then: (i) any
unexercised portion of the Alternate Stock Appreciation Right shall immediately
terminate and be void; and (ii) the Optionee shall be required, and hereby
agrees, upon thirty (30) days' written notice from SFI, to return to SFI in
immediately available funds the difference between the exercise price and the
fair market value on the date of exercise of the exercised portion of the
Alternate Stock Appreciation Right. The provisions of this Section 3(f) shall
not apply, however, to the passive investment by the Optionee in publicly traded
common equity of any entity that is engaged in the business of producing,
marketing, distributing or selling poultry products so long as such investment
does not exceed two percent of the outstanding common equity or such entity.
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The determination of whether the Optionee has voluntarily terminated
his employment, has been terminated for cause or has engaged in any conduct
described in the first sentence of the preceding paragraph shall be determined
by the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) in good faith and in its sole discretion, and any
such determinations by such body shall be final and binding on the Optionee.
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, this Alternate Stock Appreciation Right, to the extent not previously
exercised, shall terminate immediately upon termination of the Optionee's
employment or the appointment or transfer of the Optionee to a position within
SFI that does not qualify for participation in the Plan.
(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, within one (1)
year from and after 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, within
three (3) months from and after 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 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
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tending to bring discredit upon SFI), then any unexercised portion of the
Alternate Stock Appreciation Right shall immediately terminate and be void.
(g) Notwithstanding any other provisions set forth herein or in the
Plan, if during the period that the Optionee is employed by SFI or during the
two year period following the Optionee's voluntary termination of employment or
his termination by SFI 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) the Optionee shall, without
the prior written consent of the Board, directly or indirectly, as employee,
agent, consultant, stockholder, director, co-partner or in any other individual
or representative capacity, own, operate, manage, control, engage in, invest in
or participate in any manner in, act as a consultant or advisor to, render
services for, or otherwise assist any person or entity that directly or
indirectly engages in, the business of producing, marketing, distributing or
selling poultry products anywhere that SFI is then doing business, then: (i) any
unexercised portion of the Alternate Stock Appreciation Right shall immediately
terminate and be void; and (ii) the Optionee shall be required, and hereby
agrees, upon thirty (30) days' written notice from SFI, to return to SFI in
immediately available funds the difference between the exercise price and the
fair market value on the date of exercise of the exercised portion of the
Alternate Stock Appreciation Right. The provisions of this Section 4(g) shall
not apply, however, to the passive investment by the Optionee in publicly traded
common equity of any entity that is engaged in the business of producing,
marketing, distributing or selling poultry products so long as such investment
does not exceed two percent of the outstanding common equity or such entity.
The determination of whether the Optionee has voluntarily terminated
his employment, has been terminated for cause or has engaged in any conduct
described in the first sentence of the preceding paragraph shall be determined
by the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) in good faith and in its sole discretion, and any
such determinations by such body shall be final and binding on the Optionee.
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.
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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.
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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.
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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:
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Name:
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Title:
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ACCEPTED AND AGREED TO:
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Optionee
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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.
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Employee/Optionee
Dated: .
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Exhibit A
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