Exhibit 10.5

 

STOCK APPRECIATION RIGHTS AGREEMENT

 

Non-transferable

 

GRANT TO

 

--------------------------------------------------------------------------------

(“Grantee”)

 

by Gold Kist Inc. (the “Company”) of

Stock Appreciation Rights with respect to

 

--------------------------------------------------------------------------------

 

shares of its common stock, $0.01 par value (the “SARs”)

 

having a base value of $13.67 per share (the “Base Value”)

 

pursuant to and subject to the provisions of the Gold Kist Inc. 2004 Long-Term
Incentive Plan (the “Plan”) and to the terms and conditions set forth on the
following pages (the “Terms and Conditions”). By accepting the SARs, Grantee
shall be deemed to have agreed to the terms and conditions set forth in this
Certificate and the Plan.

 

Unless vesting is accelerated in accordance with this Certificate or the Plan or
in the discretion of the Committee, the SARs will vest (become exercisable) in
accordance with the following schedule:

 

Continuous Status as a

Participant

after Grant Date

--------------------------------------------------------------------------------

 

Percent of SARs Vested

--------------------------------------------------------------------------------

Less than 3 Years

  0%

3 Years

  50%

4 Years

  100%

 

IN WITNESS WHEREOF, Gold Kist Inc., acting by and through its duly authorized
officers, has caused this Certificate to be executed as of the Grant Date.

 

GOLD KIST INC. By:  

 

--------------------------------------------------------------------------------

Its: Authorized Officer Grant Date: January 24, 2005

 

- 1 -

--------------------------------------------------------------------------------

TERMS AND CONDITIONS

 

1. Grant of SARs. The Company hereby grants to the Grantee named on page 1
hereof, under the Plan and on the terms and on conditions set forth in this
award certificate (this “Certificate”), stock appreciation rights with respect
to the number of Shares indicated on page 1 at the Base Value per Share set
forth on page 1 (the “SARs”). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Plan.

 

2. Base Value and Benefit. The Base Value of each SAR is equal to the Fair
Market Value of a share of Stock as of the Grant Date. Each SAR entitles Grantee
to receive from the Company upon the exercise of the SAR an amount, payable in
shares of Stock, equal to the excess, if any, of (a) the Fair Market Value of
one Share of Stock as of the date of exercise, over (b) the Base Value per
Share. For purposes of computing the number of Shares that Grantee has a right
to acquire by exercise of these SARs, fractional Shares shall be disregarded and
the next lower whole number of Shares shall be used, rounding all fractions
downward.

 

3. Vesting of SARs. The SARs shall vest (become exercisable) in accordance with
the schedule shown on page 1 of this Certificate. Notwithstanding the vesting
schedule, all of the SARs shall become earlier vested and exercisable upon the
first to occur of:

 

(a) Grantee’s death or Disability during his or her Continuous Status as a
Participant;

 

(b) Grantee’s Retirement;

 

(c) Grantee’s termination of employment by the Company without Cause;

 

(d) the occurrence of a Change in Control, but only if so provided in a separate
employment or change in control agreement with Grantee; or

 

(e) termination of Grantee’s employment by the Company without Cause or by
Grantee for Good Reason within two years after the effective date of a Change in
Control.

 

4. Term of SARs and Limitations on Right to Exercise. The term of the SARs is a
period of ten years, expiring at 5:00 p.m., Eastern Time, on the tenth
anniversary of the Grant Date (the “Expiration Date”). To the extent not
previously exercised, the SARs will lapse prior to the Expiration Date upon the
earliest to occur of the following circumstances:

 

(a) Three months after the termination of Grantee’s Continuous Status as a
Participant by reason of Grantee’s resignation.

 

(b) Twelve months after the date of the termination of Grantee’s Continuous
Status as a Participant by reason of Grantee’s Disability or termination by the
Company without Cause.

 

(c) Twelve months after the date of Grantee’s death, if Grantee dies while
employed, or during the three-month period described in subparagraph (a) above
or during the twelve-month period described in subparagraph (b) above and before
the SARs otherwise lapse. Upon Grantee’s death, the SARs may be exercised by
Grantee’s beneficiary designated pursuant to the Plan, or Grantee’s estate if no
beneficiary is designated.

 

(d) 5:00 p.m., Eastern Time, on the date of the termination of Grantee’s
Continuous Status as a Participant if such termination is by the Company for
Cause.

 

(e) 5:00 p.m., Eastern Time, on the Expiration Date in the case of Grantee’s
Retirement.

 

The Committee may, prior to the lapse of the SARs under the circumstances
described in subparagraphs (a), (b), (c) or (d) above, extend the time to
exercise the SARs as determined by the Committee in writing. If Grantee returns
to employment with the Company during the designated post-termination exercise
period, then Grantee shall be restored to the status Grantee held prior to such
termination but (unless vested was accelerated as provided in Paragraph 3) no
vesting credit will be earned for any period Grantee was not in Continuous
Status as a Participant. If Grantee or his or her beneficiary exercises an SAR
after termination of service, the SARs may be exercised only with respect to the
SARs that were otherwise vested on Grantee’s termination of service.

 

5. Exercise of SAR. The SARs shall be exercised by written notice directed to
the Secretary of the Company or his or her designee at the address and in the
form specified by the Secretary from time to time. If the person exercising a
SAR is not Grantee, such person shall also deliver with the notice of exercise
appropriate proof of his or her right to exercise the SAR.

 

6. Beneficiary Designation. Grantee may, in the manner determined by the Board,
designate a beneficiary to exercise the rights of Grantee hereunder and to
receive any distribution with respect to the SARs upon Grantee’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any
rights hereunder is subject to all terms and conditions of this Certificate and

 

- 2 -

--------------------------------------------------------------------------------

the Plan, and to any additional restrictions deemed necessary or appropriate by
the Board. If no beneficiary has been designated or survives Grantee, the SARs
may be exercised by the legal representative of Grantee’s estate, and payment
shall be made to Grantee’s estate. Subject to the foregoing, a beneficiary
designation may be changed or revoked by Grantee at any time provided the change
or revocation is filed with the Company.

 

7. Changes in Capital Structure. The provisions of the Plan shall apply in the
case of a change in the capital structure of the Company. Without limiting the
foregoing, in the event of a subdivision of the outstanding Stock (stock-split),
a declaration of a dividend payable in Stock, or a combination or consolidation
of the outstanding Stock into a lesser number of shares, the SARs and the Base
Value shall automatically be adjusted proportionately.

 

8. Withholding. The Company or any employer Affiliate has the authority and the
right to deduct or withhold, or require Grantee to remit to the employer, an
amount sufficient to satisfy federal, state, and local taxes (including
Grantee’s FICA obligation) required by law to be withheld with respect to any
taxable event arising as a result of the exercise of the SARs. The withholding
requirement may be satisfied, in whole or in part, at the election of the
Secretary, by withholding from the SAR Shares having a Fair Market Value on the
date of withholding equal to the minimum amount (and not any greater amount)
required to be withheld for tax purposes, all in accordance with such procedures
as the Secretary establishes.

 

9. Limitation of Rights. The SARs do not confer to Grantee or Grantee’s
beneficiary designated pursuant to Paragraph 6 any rights of a stockholder of
the Company unless and until Shares are in fact issued to such person in
connection with the exercise of the SARs. Nothing in this Certificate shall
interfere with or limit in any way the right of the Company or any Affiliate to
terminate Grantee’s service at any time, nor confer upon Grantee any right to
continue in the service of the Company or any Affiliate.

 

10. Restrictions on Transfer and Pledge. No right or interest of Grantee in the
SARs may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or an Affiliate, or shall be subject to any lien,
obligation, or liability of Grantee to any other party other than the Company or
an Affiliate. The SARs are not assignable or transferable by Grantee other than
by will or the laws of descent and distribution or pursuant to a domestic
relations order that would satisfy Section 414(p)(1)(A) of the Code if such
Section applied to an SAR under the Plan; provided, however, that the Committee
may (but need not) permit other transfers where the Committee concludes that
such transferability is appropriate and desirable, taking into account any
factors deemed relevant, including without limitation, state or federal tax or
securities laws. The SARs may be exercised during the lifetime of Grantee only
by Grantee or any permitted transferee.

 

11. Restrictions on Issuance of Shares. If at any time the Committee shall
determine in its discretion, that registration, listing or qualification of the
Shares covered by the SARs upon any Exchange or under any foreign, federal, or
local law or practice, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition to the exercise of the SARs, the
SARs may not be exercised in whole or in part unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.

 

12. Plan Controls. The terms contained in the Plan are incorporated into and
made a part of this Certificate and this Certificate shall be governed by and
construed in accordance with the Plan. In the event of any actual or alleged
conflict between the provisions of the Plan and the provisions of this
Certificate, the provisions of the Plan shall be controlling and determinative.

 

13. Severability. If any one or more of the provisions contained in this
Certificate is invalid, illegal or unenforceable, the other provisions of this
Certificate will be construed and enforced as if the invalid, illegal or
unenforceable provision had never been included.

 

14. Notice. Notices and communications under this Certificate must be in writing
and either personally delivered or sent by registered or certified United States
mail, return receipt requested, postage prepaid. Notices to the Company must be
addressed to Gold Kist Inc., 244 Perimeter Center Parkway, NE, Atlanta, Georgia,
20246; Attn: Secretary, or any other address designated by the Company in a
written notice to Grantee. Notices to Grantee will be directed to the address of
Grantee then currently on file with the Company, or at any other address given
by Grantee in a written notice to the Company.

 

- 3 -