Exhibit 10.3 





	 





 


TAX
RECEIVABLE AGREEMENT


 


among


 




WAYNE FARMS, INC.,


 


and


 


THE
PERSONS NAMED HEREIN 


 





 






 


Dated
as of [_________ ___], 2015





 





 





 


	 



  



    	 



    	 



    




 


TABLE
OF CONTENTS


 





	 	 	 	Page
	 	 	 
	ARTICLE I DEFINITIONS	 	2
	 	 	 	 
	Section 1.01	Definitions	 	2
	 	 	 
	ARTICLE II DETERMINATION OF REALIZED TAX BENEFIT	 	10
	 	 	 	 
	Section 2.01	Tax Basis Schedule	 	10
	Section 2.02	Realized Tax Benefit and Realized Tax Detriment	 	10
	Section 2.03	Procedures, Amendments	 	11
	 	 	 
	ARTICLE III TAX BENEFIT PAYMENTS	 	12
	 	 	 	 
	Section 3.01	Payments	 	12
	Section 3.02	No Duplicative Payments	 	13
	 	 	 
	ARTICLE IV TERMINATION	 	13
	 	 	 	 
	Section 4.01	Termination, Early Termination and Breach of Agreement	 	13
	Section 4.02	Early Termination Notice	 	15
	Section 4.03	Payment upon Early Termination	 	15
	 	 	 
	ARTICLE V SUBORDINATION AND LATE PAYMENTS	 	16
	 	 	 	 
	Section 5.01	Subordination	 	16
	Section 5.02	Late Payments by the Corporate Taxpayer	 	16
	 	 	 
	ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION	 	16
	 	 	 	 
	Section 6.01	Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters	 	16
	Section 6.02	Consistency	 	16
	Section 6.03	Cooperation	 	17
	 	 	 
	ARTICLE VII MISCELLANEOUS	 	17
	 	 	 	 
	Section 7.01	Notices	 	17
	Section 7.02	Binding Effect; Benefit; Assignment	 	18
	Section 7.03	Resolution of Disputes	 	19
	Section 7.04	Counterparts	 	20
	Section 7.05	Entire Agreement	 	20
	Section 7.06	Severability	 	20
	Section 7.07	Amendment	 	20
	Section 7.08	Governing Law	 	21
	Section 7.09	Reconciliation	 	21
	Section 7.10	Withholding	 	21



 






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	Section 7.11	Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets	 	22
	Section 7.12	Partnership Agreement	 	22




 






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TAX
RECEIVABLE AGREEMENT 


 


This
TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”), dated
as of [_________ ___], 2015, is hereby entered into by and among Wayne Farms, Inc., a Delaware corporation (the “Corporate
Taxpayer”), Wayne Farms LLC, a Delaware limited liability company (“OpCo”), each of the undersigned
parties hereto identified as a “Member” and each of the successors and assigns thereto.


 


RECITALS


 


WHEREAS,
OpCo is classified as a partnership for U.S. federal income tax purposes;


 


WHEREAS,
the Corporate Taxpayer is classified as an association taxable as a corporation for U.S. federal income tax purposes;


 


WHEREAS,
the Member holds Class B common units in OpCo (the “Class B Common Units”);


 


WHEREAS,
the Corporate Taxpayer used the net proceeds from the transactions described in the registration statement on Form S-1 initially
filed with the Securities and Exchange Commission on March 16, 2015 (Registration No. 333-202797), as amended prior to the date
hereof, including the initial public offering of shares of Class A common stock, $0.00001 par value per share (“Class
A Common Stock”) by the Corporate Taxpayer (the “IPO”), to acquire newly-issued Class A common units
in OpCo (the “Class A Common Units”) directly from OpCo (the “Capital Contribution”), which
proceeds will be used to retire certain indebtedness of OpCo, to make a distribution to the Member, to pay the fees and expenses
from the IPO, and for general corporate purposes;


 


WHEREAS,
under the terms of the Second Amended and Restated Limited Liability Company Agreement of OpCo, dated as of [___] (as amended
from time to time, the “LLC Agreement”) the Member may exchange Class B Common Units, either for shares of
Class A Common Stock, on a one-for-one basis, or cash (based on the market price of the shares of the Class A Common Stock), at
the Corporate Taxpayer’s option.


 


WHEREAS,
OpCo and each of its direct and indirect subsidiaries classified as a partnership for U.S. federal income tax purposes will have
in effect an election under Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”),
for the Taxable Year (as defined below) in which an Exchange (as defined below) occurs, which election is intended to result in
an adjustment to the tax basis of the assets owned by OpCo (solely with respect to the Corporate Taxpayer) at the time of an Exchange
(such time, the “Exchange Date”) by reason of the Exchange and the receipt of
certain payments under this Agreement;


 


WHEREAS,
the income, gain, loss, expense and other Tax (as defined below) items of the Corporate Taxpayer may be affected by the Tax Assets
(as defined below); and


 






    	 



    	 



    




 


WHEREAS,
the parties to this Agreement desire to make certain arrangements with respect to the effect of the Tax Assets on the actual liability
for Taxes of the Corporate Taxpayer.


 


NOW,
THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be
legally bound hereby, the parties hereto agree as follows:


 


Article I



DEFINITIONS


 


Section 1.01 
Definitions.


 


(a) The following terms shall have the following meanings for
the purposes of this Agreement:


 


“Agreed
Rate” means LIBOR plus 100 basis points.


 


“Applicable
Member” means any Member to whom any portion of a Realized Tax Benefit may be Attributable under this Agreement.


 


“Attributable”
means, with respect to any Applicable Member, the portion of any Realized Tax Benefit of the Corporate Taxpayer that is “attributable”
to such Applicable Member, which shall be determined by reference to the Tax Assets giving rise to the Realized Tax Benefit, under
the following principles:


 


(i) 
Any Realized Tax Benefit arising from a deduction to the
Corporate Taxpayer with respect to a Taxable Year for the depreciation, amortization or other similar deductions for recovery
of cost or basis (“Depreciation”) arising in respect of a Basis Adjustment to a Reference Asset resulting from
an Exchange is Attributable to the Applicable Member to the extent that the ratio of all Depreciation for the Taxable Year in
respect of Basis Adjustments resulting from all Exchanges by the Applicable Member bears to the aggregate of all Depreciation
for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by the Applicable Members.


 


(ii) Any Realized Tax Benefit arising from the disposition of
a Reference Asset is Attributable to the Applicable Member to the extent that the ratio of all Basis Adjustments (to the extent
not previously giving rise to Realized Tax Benefits) resulting from all Exchanges by the Applicable Member with respect to such
Reference Asset bears to the aggregate of all Basis Adjustments (to the extent not previously giving rise to Realized Tax Benefits)
with respect to such Reference Asset.


 


(iii) Any Realized Tax Benefit arising from a deduction to the
Corporate Taxpayer with respect to a Taxable Year in respect of Imputed Interest is Attributable to the Applicable Member that
is required to include Imputed Interest in income (without regard to whether such Member is actually subject to tax thereon).


 






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(iv)
Any Realized Tax Benefit with respect to a Taxable Year
arising from a Section 704(c) Allocation is Attributable to the Applicable Member to the extent such Section 704(c) Allocation
results in (i) income or gain allocated to the Applicable Member or (ii) deduction or loss allocated to the Corporate Taxpayer
to the extent (A) such income or gain would otherwise have been allocated to the Corporate Taxpayer or (B) such deduction or loss
would otherwise have been allocated to the Applicable Member, in each case if OpCo were not required to make such Section 704(c)
Allocation.


 


(v)
For the avoidance of doubt, in the case of a Basis Adjustment
arising under Section 734(b) of the Code with respect to an Exchange, depreciation, amortization or other similar deductions for
recovery of cost of basis shall constitute Depreciation only to the extent that such depreciation, amortization or other similar
deductions may produce a Realized Tax Benefit (and not to the extent that such depreciation, amortization or other similar deductions
may be for the benefit of a Person other than the Corporate Taxpayer), as reasonably determined by the Corporate Taxpayer.


 


“Basis
Adjustment” means the adjustment to the Non-Stepped Up Tax Basis of a Reference Asset under Sections 732, 755 and 1012
of the Code and the Treasury Regulations promulgated thereunder (in situations where, as a result of one or more Exchanges, OpCo
becomes classified as an entity that is disregarded as separate from its owner for U.S. federal income tax purposes) or under
Sections 734(b), 743(b) and 755 of the Code and the Treasury Regulations promulgated thereunder (in situations where, following
an Exchange, OpCo remains in existence as an entity for U.S. federal income tax purposes) and, in each case, comparable sections
of state and local tax laws, as a result of (i) an Exchange and (ii) certain of the payments made pursuant to this Agreement.
For the avoidance of doubt, the amount of any Basis Adjustment resulting from an Exchange of one or more Common Units shall be
determined without regard to any Pre-Exchange Transfer of such Common Units and as if any such Pre-Exchange Transfer had not occurred.


 


“Beneficial
Owner” of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship
or otherwise, has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or
(ii) investment power, which includes the power to dispose of, or to direct the disposition of, such security.


 


“Board”
means the board of directors of the Corporate Taxpayer.


 


“Book-Tax
Disparity” means, with respect to any Reference Asset, as of the date of the Capital Contribution, the difference between
zero and the Gross Asset Value (as defined in the LLC Agreement) of such Reference Asset for U.S. federal income tax purposes
as of such date.


 


“Business
Day” shall have the meaning ascribed to such term in the LLC Agreement.


 






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“Change
of Control” means the occurrence of any of the following events:


 


(i)any
Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the
Securities and Exchange Act of 1934, or any successor provisions thereto, excluding any Permitted Transferee or any group of Permitted
Transferees of a Member, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporate Taxpayer representing
more than 50% of the combined voting power of the Corporate Taxpayer’s then outstanding voting securities; or


 


(ii)the
following individuals cease for any reason to constitute a majority of the number of directors of the Corporate Taxpayer then
serving: individuals who, on the IPO Date, constitute the Board and any new director whose appointment or election by the Board
or nomination for election by the Corporate Taxpayer’s shareholders was approved or recommended by a vote of at least a
majority of the directors then still in office who either were directors on the IPO Date or whose appointment, election or nomination
for election was previously so approved or recommended by the directors referred to in this clause (ii); or


 


(iii)there
is consummated a merger or consolidation of the Corporate Taxpayer with any other corporation or other entity, and, immediately
after the consummation of such merger or consolidation, either (x) the Board immediately prior to the merger or consolidation
does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company
is a Subsidiary, the ultimate parent thereof, or (y) the voting securities of the Corporate Taxpayer immediately prior to such
merger or consolidation do not continue to represent or are not converted into more than 50% of the combined voting power of the
then outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a
Subsidiary, the ultimate parent thereof; or


 


(iv)the
shareholders of the Corporate Taxpayer approve a plan of complete liquidation or dissolution of the Corporate Taxpayer or there
is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the
Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s assets, other than such sale or other disposition
by the Corporate Taxpayer of all or substantially all of the Corporate Taxpayer’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned or beneficially owned, directly or indirectly, by shareholders
of the Corporate Taxpayer in substantially the same proportions as their ownership of the Corporate Taxpayer immediately prior
to such sale.


 


Notwithstanding
the foregoing, except with respect to clause (ii) and clause (iii)(x) above, a “Change of Control” shall not be deemed
to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which
the record holders of the shares of the Corporate Taxpayer immediately prior to such transaction or series of transactions continue
to have substantially the same proportionate ownership in, and own substantially all of the shares of, an entity which owns all
or substantially all of the assets of the Corporate Taxpayer immediately following such transaction or series of transactions.


 






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“Control”
means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.


 


“Corporate
Taxpayer Return” means the federal and/or state and/or local Tax Return, as applicable, of the Corporate Taxpayer filed
with respect to Taxes of any Taxable Year.


 


“Cumulative
Net Realized Tax Benefit” for a Taxable Year means the cumulative amount of Realized Tax Benefits for all Taxable Years
of the Corporate Taxpayer, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for
the same period. The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most
recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination.


 


“Default
Rate” means LIBOR plus 500 basis points.


 


“Determination”
shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of state and local tax law, as
applicable, or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount
of any liability for Tax and shall also include the acquiescence of the Corporate Taxpayer to the amount of any assessed liability
for Tax.


 


“Early
Termination Date” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.


 


“Early
Termination Rate” means the lesser of (i) 6.5% per annum, compounded annually, and (ii) LIBOR plus 100 basis points.


 


“Exchange”
means an acquisition of Common Units or a purchase of Common Units by OpCo or the Corporate Taxpayer, including by way of an exchange
of stock of the Corporate Taxpayer for Common Units pursuant to the LLC Agreement, in each case occurring on or after the date
of this Agreement.


 


“Governmental
Authority” means the government of any nation, state, territory, city, locality or other political subdivision thereof,
any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government,
including any court, quasi-governmental authority, self-regulatory organization, commission, tribunal, agency or any political
or other subdivision, department, board, bureau, or branch or official of any of the foregoing.


 


“Hypothetical
Tax Liability” means, with respect to any Taxable Year, the liability for Taxes of (i) the Corporate Taxpayer and (ii)
without duplication, OpCo, but only with respect to Taxes imposed on OpCo or its Subsidiaries and allocable to the Corporate Taxpayer
(or to the other members of the consolidated group of which the Corporate Taxpayer is the parent), in each case using the same
methods, elections, conventions and similar practices used on the relevant Corporate Taxpayer Return, but (w) using the Non-Stepped
Up Tax Basis as reflected on the Tax Basis Schedule, including amendments thereto for the Taxable Year, (x) excluding any deduction
attributable to Imputed Interest for the Taxable Year, (y) allocating the Company’s items of income, gain, loss, and deduction
as if Section 704(c) and the principles thereof had not applied to such allocations, and (z) using appropriate conventions for
calculation of state and local Taxes (including, without limitation, calculation of state and local taxable income in the same
manner as federal taxable income, and the use of an assumed combined state and local tax rate of 5 (five) percent), provided that
such conventions are applied in the same manner to compute actual state and local Taxes for purpose of this Agreement.


 



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“Imputed
Interest” shall mean (x) any interest imputed under Section 1272, 1274 or 483 or other provision of the Code and
any similar provision of state and local tax law with respect to the Corporate Taxpayer’s payment obligations under this
Agreement, and (y) the payments, which shall be deductible under Section 707(c) of the Code (and such deduction shall be
allocated solely to the Corporate Taxpayer), made by OpCo under this Agreement in respect of Realized Tax Benefit arising from
Section 704(c) Allocations.


 


“IPO
Date” means the closing date of the IPO.


 


“IRS”
means the U.S. Internal Revenue Service.


 


“LIBOR”
means during any period, an interest rate per annum equal to the one-year LIBOR reported, on the date two days prior to the first
day of such period, on the Telerate Page 3750 (or if such screen shall cease to be publicly available, as reported on Reuters
Screen page “LIBOR01” or by any other publicly available source of such market rate) for London interbank offered
rates for United States dollar deposits for such period.


 


“Non-Stepped
Up Tax Basis” means, (x) with respect to any Reference Asset at any time, the Tax basis that such asset would have had
at such time if no Basis Adjustments had been made and (y) with respect to a Reference Asset that is depreciable for U.S. federal
income tax purposes and that was treated for U.S. federal income tax purposes as contributed to OpCo by a Member other than the
Corporate Taxpayer, treating such Reference Asset as having an adjusted basis of zero at all times.


 


“Payment
Date” means any date on which a payment is required to be made pursuant to this Agreement.


 


“Person”
means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association,
organization, governmental entity or other entity.


 


“Pre-Exchange
Transfer” means any transfer (including upon the death of a Member) or distribution in respect of one or more Common
Units (i) that occurs prior to an Exchange of such Common Units, and (ii) to which Section 743(b) or 734(b) of the Code applies. 


 



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“Realized
Tax Benefit” means, for a Taxable Year, the excess, if any, of the Hypothetical Tax Liability over the actual liability
for Taxes of (i) the Corporate Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes imposed on OpCo and
allocable to the Corporate Taxpayer (or to the other members of the consolidated group of which the Corporate Taxpayer is the
parent) for such Taxable Year.  If all or a portion of the actual liability for such Taxes for the Taxable Year arises as
a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized
Tax Benefit unless and until there has been a Determination.


 


“Realized
Tax Detriment” means, for a Taxable Year, the excess, if any, of the actual liability for Taxes of (i) the Corporate
Taxpayer and (ii) without duplication, OpCo, but only with respect to Taxes imposed on OpCo and allocable to the Corporate Taxpayer
(or to the other members of the consolidated group of which the Corporate Taxpayer is the parent) for such Taxable Year, over
the Hypothetical Tax Liability for such Taxable Year.  If all or a portion of the actual liability for such Taxes for the
Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in
determining the Realized Tax Detriment unless and until there has been a Determination.


 


“Reference
Asset” means an asset that is held by OpCo, or by any of its direct or indirect subsidiaries classified as a partnership
or disregarded entity for purposes of the applicable Tax, (x) at the time of an Exchange or (y) with respect to a Reference
Asset that is depreciable for U.S. federal income tax purposes and that was treated for U.S. federal income tax purposes as contributed
to OpCo by a Member other than the Corporate Taxpayer regardless of whether held by OpCo at the time of an Exchange. A Reference
Asset also includes any asset that is “substituted basis property” under Section 7701(a)(42) of the Code with respect
to a Reference Asset.


 


“Schedule”
means any of the following: (i) a Tax Basis Schedule, (ii) a Tax Benefit Schedule or (iii) the Early Termination Schedule.


 


“Section
704(c) Allocations” means, in accordance with Treasury Regulation Section 1.704-3 and the principles thereof, allocations
of items of taxable income, gain, loss and deduction to take into account any Book-Tax Disparity of any Reference Asset on the
date of the Capital Contribution using the traditional method as described in Treasury Regulation Section 1.704-3(b).


 


“Subsidiaries”
shall have the meaning ascribed to such term in the LLC Agreement.


 


“Tax
Assets” means (i) the Basis Adjustments, (ii) Imputed Interest, and (iii) Section 704(c) Allocations.


 


“Tax
Return” means any return, declaration, report or similar statement required to be filed with respect to Taxes (including
any attached schedules), including, without limitation, any information return, claim for refund, amended return and declaration
of estimated Tax.


 


“Taxable
Year” means a taxable year of the Corporate Taxpayer as defined in Section 441(b) of the Code or comparable section
of state or local tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months
for which a Tax Return is made), ending on or after the IPO Date. 


 



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“Taxes”
means any and all U.S. federal, state and local taxes, assessments or similar charges that are based on or measured with respect
to net income or profits, and any interest related to such Tax.


 


“Taxing
Authority” shall mean any domestic, federal, national, state, county or municipal or other local government, any subdivision,
agency, commission or authority thereof, or any quasi-governmental body exercising any taxing authority or any other authority
exercising Tax regulatory authority.


 


“Treasury
Regulations” means the final, temporary and proposed regulations under the Code promulgated from time to time (including
corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.


 


“Valuation
Assumptions” shall mean, as of an Early Termination Date, the assumptions that (1) in each Taxable Year ending on or
after such Early Termination Date, the Corporate Taxpayer will have taxable income sufficient to fully utilize the deductions
arising from the Tax Assets during such Taxable Year or future Taxable Years (including, for the avoidance of doubt, Tax Assets
that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such
deductions would become available, (2) the U.S. federal income tax rates that will be in effect for each such Taxable Year will
be those specified for each such Taxable Year by the Code and other law as in effect on the Early Termination Date and an assumed
combined state and local tax rate of 5 (five) percent, (3) any loss carryovers generated by deductions arising from Tax Assets
that are available as of such Early Termination Date will be utilized by the Corporate Taxpayer on a pro rata basis from the Early
Termination Date through the scheduled expiration date of such loss carryovers, (4) any non-amortizable assets will be disposed
of on the fifteenth anniversary of the applicable Basis Adjustment; provided, that in the event of a Change of Control,
such non-amortizable assets shall be deemed disposed of at the time of sale of the relevant asset (if earlier than such fifteenth
anniversary), and (5) if, at the Early Termination Date, there are Common Units that have not been Exchanged, then each such Common
Unit shall be deemed to be Exchanged for the Value of the number of shares of Class A Common Stock and the amount of cash that
would be transferred if the Exchange occurred on the Early Termination Date.


 


“Value”
shall have the meaning ascribed to such term in the LLC Agreement.


 


(b)
Each of the following terms is defined in the Section set
forth opposite such term:


 


	Term	 		Section
	Agreement	 	Preamble
	Amended Schedule	 	2.03(b)
	Capital
        Contribution

        Class
        A Common Stock
	 	Recitals

        Recitals

	Class
        A Common Units

        
	 	

        Recitals




 






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	Term	 		Section
	

        Class
        B Common Units
	 	

        Recitals

	Code	 	Recitals
	Corporate Taxpayer	 	Preamble
	Dispute	 	7.03(a)
	Early Termination
    Effective Date	 	4.02
	Early Termination
    Notice	 	4.02
	Early Termination
    Payment	 	4.03(b)
	Early Termination
    Schedule	 	4.02
	e-mail	 	7.01
	Exchange Date	 	Recitals
	Expert	 	7.09
	IPO

        LLC
Agreement

        Material
        Objection Notice
	 	Recitals

        Recitals

        4.02

	Members	 	Preamble
	Net Tax Benefit	 	3.01(b)
	Objection Notice	 	2.03(a)
	OpCo	 	Recitals
	Payment
Deferral Amount

        Reconciliation
        Dispute
	 	3.01(b)

        7.09

	Reconciliation
    Procedures	 	2.03(a)
	Senior Obligations	 	5.01
	Tax
Basis Schedule

        Tax
        Benefit Payment
	 	2.01

        3.01(b)

	Tax Benefit
    Schedule	 	2.02(a)


 


(c)
Other Definitional and Interpretative Provisions. The words
“hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation hereof. References to Articles and Sections are to
Articles and Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include
the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not
they are in fact followed by those words or words of like import. “Writing”, “written” and comparable
terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References
to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated
thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns
of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including,
respectively.


 






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Article II



DETERMINATION OF REALIZED TAX BENEFIT


 


Section 2.01
Tax Basis Schedule. Within 120 calendar days after the
filing of the U.S. federal income tax return of the Corporate Taxpayer for each relevant Taxable Year, the Corporate Taxpayer
shall deliver to each relevant Member a schedule (the “Tax
Basis Schedule”) that shows, in reasonable detail necessary to perform the calculations required by this Agreement,
including with respect to each applicable party, (i) the Non-Stepped Up Tax Basis of the Reference Assets as of each applicable
Exchange Date, (ii) the Basis Adjustments with respect to the Reference Assets as a result of the Exchanges effected in such Taxable
Year, calculated (x) in the aggregate, (y) solely with respect to Exchanges by such Member and (z) in the case of a Basis Adjustment
under Section 734(b) of the Code solely with respect to the amount that is available to the Corporate Taxpayer in such Taxable
Year, (iii) allocations of OpCo’s items of income, gain, loss and depreciation that would be made using the Non-Stepped
Up Basis of the Reference Assets, (iv) the Section 704(c) Allocations, (v) the period (or periods) over which the Reference Assets
are amortizable and/or depreciable, (vi) the period (or periods) over which each Basis Adjustment is amortizable and/or depreciable,
(vii) Imputed Interest defined each of clause (x) and clause (y) of the definition of that term, and (viii)
the Payment Deferral Amount.


 


Section 2.02 Realized Tax Benefit and Realized Tax Detriment.


 


(a) Tax Benefit Schedule. Within 120 calendar days after
the filing of the U.S. federal income tax return of the Corporate Taxpayer for any Taxable Year in which there is a Realized Tax
Benefit or Realized Tax Detriment a portion of which is Attributable to a Member, the Corporate Taxpayer shall provide to such
Member a schedule showing, in reasonable detail and, at the request of such Member, including, with respect to each separate Exchange
(if applicable), the calculation of the Realized Tax Benefit or Realized Tax Detriment and the portion Attributable to such Member
for such Taxable Year (a “Tax Benefit Schedule”).
The Tax Benefit Schedule will become final as provided in Section 2.03(a) and may be amended as provided in Section 2.03(b) (subject
to the procedures set forth in Section 2.03(b)). 


 


(b) Applicable Principles. The Realized Tax Benefit
or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual liability for Taxes
of the Corporate Taxpayer for such Taxable Year attributable to the Tax Assets, determined using a “with and without”
methodology. For the avoidance of doubt, the actual liability for Taxes will take into account the deduction of the portion of
the Tax Benefit Payments that must be accounted for as interest under the Code based upon the characterization of Tax Benefit
Payments as additional consideration payable by the Corporate Taxpayer for the Common Units acquired in an Exchange. Carryovers
or carrybacks of any Tax item attributable to the Tax Assets shall be considered to be subject to the rules of the Code and the
Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing
the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item
includes a portion that is attributable to the Tax Assets and another portion that is not, such portions shall be considered to
be used in accordance with the “with and without” methodology. The parties agree that (i) all Tax Benefit Payments
attributable to the Basis Adjustments (other than amounts accounted for as Imputed Interest) will (A) be treated as subsequent
upward purchase price adjustments that give rise to further Basis Adjustments to Reference Assets for the Corporate Taxpayer and
(B) have the effect of creating additional Basis Adjustments to Reference Assets for the Corporate Taxpayer in the year of payment,
and (ii) as a result, such additional Basis Adjustments will be incorporated into the then-current year calculation and into future
year calculations, as appropriate. The parties further agree that, for the avoidance of doubt, amounts accounted for as Imputed
Interest may give rise to additional Tax Benefit Payments in the then-current and/or future years.


 






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Section 2.03 Procedures,
Amendments.


 


(a) Procedure. Every time the Corporate Taxpayer delivers
to a Member an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.03(b)
and any Early Termination Schedule or amended Early Termination Schedule, the Corporate Taxpayer shall also (x) deliver to such
Member schedules, valuation reports (if any), and work papers, as determined by the Corporate Taxpayer or requested by such Member,
providing reasonable detail regarding the preparation of the Schedule and (y) allow such Member reasonable access at no cost to
the appropriate representatives at the Corporate Taxpayer, as determined by the Corporate Taxpayer or requested by such Member,
in connection with a review of such Schedule. Without limiting the application of the preceding sentence, each time the Corporate
Taxpayer delivers to a Member a Tax Benefit Schedule, in addition to the Tax Benefit Schedule duly completed, the Corporate Taxpayer
shall deliver to such Member the Corporate Taxpayer Return, the reasonably detailed calculation by the Corporate Taxpayer of the
Hypothetical Tax Liability, the reasonably detailed calculation by the Corporate Taxpayer of the actual Tax liability, as well
as any other work papers as determined by the Corporate Taxpayer or requested by such Member. An applicable Schedule or amendment
thereto shall become final and binding on all parties 30 calendar days from the first date on which the Member has received the
applicable Schedule or amendment thereto unless such Member (i) within 30 calendar days after receiving an applicable Schedule
or amendment thereto, provides the Corporate Taxpayer with notice of a material objection to such Schedule (“Objection
Notice”) made in good faith or (ii) provides a written waiver of such right of any Objection Notice within the period
described in clause (i) above, in which case such Schedule or amendment thereto becomes binding on the date the waiver is received
by the Corporate Taxpayer. If the parties, for any reason, are unable to successfully resolve the issues raised in the Objection
Notice within 30 calendar days after receipt by the Corporate Taxpayer of an Objection Notice, the Corporate Taxpayer and the
applicable Member shall employ the reconciliation procedures as described in Section 7.09 (the “Reconciliation
Procedures”).


 


(b) Amended Schedule. The applicable Schedule for any
Taxable Year may be amended from time to time by the Corporate Taxpayer (i) in connection with a Determination affecting such
Schedule, (ii) to correct inaccuracies in the Schedule identified as a result of the receipt of additional factual information
relating to a Taxable Year after the date the Schedule was provided to the applicable Member, (iii) to comply with the Expert’s
determination under the Reconciliation Procedures, (iv) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment
for such Taxable Year attributable to a carryback or carryforward of a loss or other tax item to such Taxable Year, (v) to reflect
a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed
for such Taxable Year, or (vi) to adjust the Tax Basis Schedule to take into account payments made pursuant to this Agreement
(any such Schedule, an “Amended Schedule”).
The Corporate Taxpayer shall provide an Amended Schedule to each Member within 30 calendar days of the occurrence of an event
referenced in clauses (i) through (vi) of the preceding sentence.


  



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Article III



TAX BENEFIT PAYMENTS


 


Section 3.01 Payments.


 


(a) Within five (5) Business Days after all of the Tax Benefit
Schedules with respect to a Taxable Year are delivered to a Member pursuant to this Agreement, (i) the Corporate Taxpayer shall
pay to each Member for such Taxable Year the portion of the Tax Benefit Payment in the amount determined pursuant to Section 3.01(b)
that is attributable to an Exchange or Imputed Interest described in clause (x) of the definition of “Imputed Interest,”
and (ii) the Corporate Taxpayer shall pay or cause to be paid in the manner set forth in Section 4.8 of the LLC Agreement to each
Member for such Taxable Year the portion of the Tax Benefit Payment in the amount determined pursuant to Section 3.01(b) that
is attributable to Section 704(c) Allocations or Imputed Interest described in clause (y) of the definition of “Imputed
Interest.”  Each such Tax Benefit Payment to a Member shall be made by wire transfer of immediately available funds
to the bank account previously designated by such Member to the Corporate Taxpayer or as otherwise agreed by the Corporate Taxpayer
and such Member.  For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments,
including federal estimated income tax payments. Notwithstanding anything herein to the contrary, a Member may elect by written
notice to the Corporate Taxpayer in connection with the applicable Exchange that in no event shall the aggregate Tax Benefit Payments
in respect of such Exchange (other than amounts accounted for as interest under the Code) exceed 50% of the amount equal to the
sum of (A) the cash, excluding any Tax Benefit Payments, and (B) the Value of the Class A Shares, received by such Member on such
Exchange.


 


(b) A “Tax
Benefit Payment” in respect of a Member, means an amount, not less than zero, equal to the sum of the amount of the
Net Tax Benefit Attributable to such Member and the related Payment Deferral Amount.  For the avoidance of doubt, for Tax
purposes, the Payment Deferral Amount shall not be treated as interest for U.S. federal income tax purposes but instead shall
be treated as additional consideration for the acquisition of Common Units in Exchanges or additional payments referred to in
clause (y) of the definition of “Imputed Interest,” unless otherwise required by law. Subject to Section 3.03(a),
the “Net Tax Benefit” for a Taxable
Year shall be an amount equal to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of such Taxable
Year over the total amount of Tax Benefit Payments previously made under this Section 3.01 (excluding payments attributable to
Payment Deferral Amounts); provided, for the avoidance of doubt, that such Member shall not be required to return any portion
of any previously made Tax Benefit Payment. The “Payment
Deferral Amount” shall equal the interest that would be due on the amount of the Net Tax Benefit Attributable to such
Member calculated at the Agreed Rate from the due date (without extensions) for filing the Corporate Taxpayer Return with respect
to Taxes for such Taxable Year until the Payment Date of the applicable Tax Benefit Payment if the amount of such Net Tax Benefit
Attributable to such Member were treated as indebtedness for U.S. federal income tax purposes. Notwithstanding the foregoing,
unless the Member elects to receive the lump-sum payment pursuant to the following sentence, for each Taxable Year ending on or
after the date of a Change of Control, all Tax Benefit Payments, whether paid with respect to the Common Units that were Exchanged
(i) prior to the date of such Change of Control or (ii) on or after the date of such Change of Control, shall be calculated by
utilizing Valuation Assumptions (1) and (3), substituting in each case the terms “the closing date of a Change of Control”
for an “Early Termination Date.” In connection with any Change of Control (other than a Change of Control caused solely
by the electing Member), at the election of a Member, all obligations hereunder with respect to such Member shall be accelerated,
and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such election and
shall include, but not be limited to, (1) the Early Termination Payment to such Member calculated as if an Early Termination Notice
had been delivered on the date of such election, (2) any Tax Benefit Payment agreed to by the Corporate Taxpayer and such Member
as due and payable but unpaid as of the date of such Member’s election, and (3) any Tax Benefit Payment due for the Taxable
Year ending with or including the date of such Member’s election; provided, that procedures similar to the procedures
of Section 4.02 shall apply with respect to the determination of the amount payable by the Corporate Taxpayer pursuant to this
sentence.


 






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Section 3.02 No Duplicative Payments. It is intended that the provisions of this Agreement will not result in duplicative
payment of any amount (including interest) required under this Agreement.  The provisions of this Agreement shall be construed
in the appropriate manner to ensure such intentions are realized.


 


Article IV



TERMINATION


 


Section 4.01 Termination, Early Termination and Breach of Agreement.


 


(a) Unless terminated earlier pursuant to Section 4.01(b) or
Section 4.01(c), this Agreement will terminate when there is no further potential for a Tax Benefit Payment pursuant to this Agreement.


 


(b) The Corporate Taxpayer may terminate this Agreement with
respect to all amounts payable to the Members and with respect to all of the Common Units held (or previously held and exchanged)
by all Members at any time by paying to each Member the Early Termination Payment in respect of such Member; provided,
however, that this Agreement shall only terminate pursuant to this Section 4.01(b) upon the receipt of the Early Termination
Payment by all Members; and provided, further, that the Corporate Taxpayer may withdraw any notice to execute its
termination rights under this Section 4.01(b) prior to the time at which any Early Termination Payment has been paid.  Upon
payment of the Early Termination Payment by the Corporate Taxpayer in accordance with this Section 4.01(b), neither the Members
nor the Corporate Taxpayer shall have any further payment obligations under this Agreement, other than for any (1) Tax Benefit
Payment agreed to by the Corporate Taxpayer and a Member as due and payable but unpaid as of the Early Termination Notice and
(2) Tax Benefit Payment due for the Taxable Year ending with or including the date of the Early Termination Notice (except to
the extent that the amount described in clause (2) is included in the Early Termination Payment).  If an Exchange occurs
after the Corporate Taxpayer makes the Early Termination Payment pursuant to this Section 4.01(b), the Corporate Taxpayer shall
have no obligations under this Agreement with respect to such Exchange. If the Corporate Taxpayer terminates, or proposes to terminate,
this Agreement by making, or proposing to make (or cause to be made), the Early Termination Payment to the Members, then each
Member that is a party to this Agreement may elect to cause the Corporate Taxpayer to make an Early Termination Payment to such
Member under this Agreement; provided that the procedures of this Article IV shall apply to such Early Termination Payment as
if the Corporate Taxpayer had delivered an Early Termination Notice to such electing Members; provided further that a Member may
elect to receive an Early Termination Payment pursuant to this sentence notwithstanding the fact that not all Members under this
Agreement elect to receive such a payment.


  



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(c) In the event that the Corporate Taxpayer breaches any of
its material obligations under this Agreement, whether as a result of failure to make any payment when due, failure to honor any
other material obligation required hereunder or by operation of law as a result of the rejection of this Agreement in a case commenced
under the Bankruptcy Code or otherwise, and does not cure such breach within ninety (90) days of receipt of notice of such breach,
then all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice
had been delivered on the date of such breach and shall include, but not be limited to, (1) the Early Termination Payment calculated
as if an Early Termination Notice had been delivered on the date of a breach, (2) any Tax Benefit Payment agreed to by the Corporate
Taxpayer and any Members as due and payable but unpaid as of the date of a breach, and (3) any Tax Benefit Payment due for the
Taxable Year ending with or including the date of a breach; provided that procedures similar to the procedures of Section 4.02
shall apply with respect to the determination of the amount payable by the Corporate Taxpayer pursuant to this sentence. 
Notwithstanding the foregoing, in the event that the Corporate Taxpayer breaches this Agreement, the Members shall be entitled
to elect to receive the amounts set forth in clauses (1), (2) and (3) above or to seek specific performance of the terms hereof. 
The parties agree that the failure to make any payment due pursuant to this Agreement within three months of the date such payment
is due shall be deemed to be a breach of a material obligation under this Agreement for all purposes of this Agreement, and that
it will not be considered to be a breach of a material obligation under this Agreement to make a payment due pursuant to this
Agreement within three months of the date such payment is due. Except to the extent that the Corporate Taxpayer has received distributions
from OpCo, the Corporate Taxpayer shall not be required to make any payment pursuant to this Agreement. Notwithstanding anything
in this Agreement to the contrary, it shall not be a breach of this Agreement if the Corporate Taxpayer fails to make any payment
due pursuant to this Agreement when due to the extent the Corporate Taxpayer has insufficient funds to make such payment; provided
that the interest provisions of Section 5.02 shall apply to such late payment (unless the Corporate Taxpayer does not have
sufficient cash to make such payment as a result of limitations imposed by credit agreements to which the Corporate Taxpayer or
its Subsidiaries, as applicable, is a party, in which case Section 5.02 shall apply, but the Default Rate shall be replaced by
the Agreed Rate); provided, further, that the Corporate Taxpayer shall promptly (and in any event, within two (2)
Business Days), pay all such unpaid payments, together with accrued and unpaid interest thereon, immediately following such time
that the Corporate Taxpayer has, and to the extent the Corporate Taxpayer has, sufficient funds to make such payment, and the
failure of the Corporate Taxpayer to do so shall constitute a breach of this Agreement. For the avoidance of doubt, all cash and
cash equivalents used or to be used to pay dividends by, or repurchase equity securities of, the Corporate Taxpayer shall be deemed
to be funds sufficient and available to pay such unpaid payments, together with any accrued and unpaid interest thereon.


 






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(d) The undersigned hereby acknowledge and agree that the timing,
amounts and aggregate value of Tax Benefit Payments pursuant to this Agreement are not reasonably ascertainable.


 


Section 4.02 Early Termination Notice. If the Corporate Taxpayer chooses to exercise its right of early termination under
Section 4.01(b) above, the Corporate Taxpayer shall deliver to each Member notice of such intention to exercise such right (“Early
Termination Notice”) and a schedule (the “Early Termination Schedule”)
specifying the Corporate Taxpayer’s intention to exercise such right and showing in reasonable detail the calculation of
the Early Termination Payment for such Member. The Early Termination Schedule shall become final and binding on such Member thirty
(30) calendar days from the first date on which such Member has received such Schedule or amendment thereto unless such Member
(i) within thirty (30) calendar days after receiving the Early Termination Schedule, provides the Corporate Taxpayer with notice
of a material objection to such Schedule made in good faith (“Material Objection
Notice”) or (ii) provides a written waiver of such right of a Material Objection Notice within the period described
in clause (i) above, in which case such Schedule becomes binding on the date the waiver is received by the Corporate Taxpayer
(such thirty (30) calendar day date as modified, if at all, by clauses (i) or (ii), the “Early
Termination Effective Date”). If the Corporate Taxpayer and such Member, for any reason, are unable to successfully
resolve the issues raised in such notice within thirty (30) calendar days after receipt by the Corporate Taxpayer of the Material
Objection Notice, the Corporate Taxpayer and such Member shall employ the Reconciliation Procedures. 


 


Section 4.03 Payment upon Early Termination.


 


(a) Within three (3) Business Days after the Early Termination
Effective Date, the Corporate Taxpayer shall pay to each Member an amount equal to the Early Termination Payment in respect of
such Member. Such payment shall be made by wire transfer of immediately available funds to a bank account or accounts designated
by such Member or as otherwise agreed by the Corporate Taxpayer and such Member. For
the avoidance of doubt, the portion of any Early Termination Payment to be made by the Corporate Taxpayer shall be determined
in the same manner as such determination is made with respect to Tax Benefit Payments pursuant to Section 3.01(a).


 


(b)  “Early
Termination Payment” in respect of a Member shall equal the present value, discounted at the Early Termination Rate
as of the Early Termination Effective Date, of all Tax Benefit Payments in respect of such Member that would be required to be
paid by the Corporate Taxpayer beginning from the Early Termination Date and assuming that the Valuation Assumptions are applied. 


  



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Article V

SUBORDINATION AND LATE PAYMENTS


 


Section 5.01 Subordination. Notwithstanding any other provision
of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by the Corporate Taxpayer
to any Member under this Agreement shall rank subordinate and junior in right of payment to any principal, interest or other amounts
due and payable in respect of any obligations in respect of indebtedness for borrowed money of the Corporate Taxpayer or its Subsidiaries,
as applicable (“Senior
Obligations”) and shall rank pari passu with all current or future unsecured obligations of the Corporate Taxpayer that
are not Senior Obligations. 


 


Section 5.02 Late Payments by the Corporate Taxpayer. The amount of all or any portion of any Tax Benefit Payment or Early
Termination Payment not made to the applicable Member when due under the terms of this Agreement shall be payable together with
any interest thereon, computed at the Default Rate and commencing from the date on which such Tax Benefit Payment or Early Termination
Payment was due and payable. The Corporate Taxpayer shall promptly (and in any event, within two (2) Business Days), pay all unpaid
Tax Benefit Payments and Early Termination Payments, together with accrued and unpaid interest thereon, immediately following
such time that it has, and to the extent that it has, sufficient funds to make such payment. For the avoidance of doubt, all cash
and cash equivalents used or to be used to pay dividends by, or repurchase equity securities of, the Corporate Taxpayer shall
be deemed to be funds sufficient and available to pay unpaid Tax Benefit Payments and Early Termination Payments, together with
any accrued and unpaid interest thereon.


 


Article VI

NO DISPUTES; CONSISTENCY; COOPERATION


 


Section 6.01 Participation in the Corporate Taxpayer’s and OpCo’s Tax Matters. Except as otherwise provided
herein, the Corporate Taxpayer shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporate
Taxpayer and OpCo, including the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue
pertaining to Taxes. Notwithstanding the foregoing, the Corporate Taxpayer shall notify a Member of, and keep such Member reasonably
informed with respect to, the portion of any audit of the Corporate Taxpayer and OpCo by a Taxing Authority the outcome of which
is reasonably expected to affect the rights and obligations of such Member under this Agreement, and shall provide to such Member
reasonable opportunity to provide information and other input to the Corporate Taxpayer, OpCo and their respective advisors concerning
the conduct of any such portion of such audit; provided, however, that the Corporate Taxpayer and OpCo shall not
be required to take any action that is inconsistent with any provision of the LLC Agreement.


 


Section 6.02 Consistency. 


 


(a)
The Corporate Taxpayer, OpCo and the Members agree to report and cause to be reported for all purposes, including federal,
state and local Tax purposes and financial reporting purposes, all Tax-related items (including the Tax Assets and each Tax Benefit
Payment) in a manner consistent with that specified by the Corporate Taxpayer in any Schedule required to be provided by or on
behalf of the Corporate Taxpayer under this Agreement unless otherwise required by law. Any dispute as to required Tax or financial
reporting shall be subject to Section 7.09.


  



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(b)
The parties agree that, for Tax purposes, the portion of any Tax Benefit Payment described in clause (y) of the definition
of “Imputed Interest” shall be treated as having been (i) first, distributed to the Corporate Taxpayer pursuant to
the LLC Agreement, (ii) second, contributed by the Corporate Taxpayer to OpCo as a capital contribution, and (iii) third, paid
by OpCo to the Applicable Member as a guaranteed payment within the meaning of Section 707(c) of the Code (the deduction for which
shall be allocated solely to the Corporate Taxpayer, unless otherwise required by law).


 


(c)Notwithstanding
anything to the contrary in this Agreement, the Company shall be permitted to adopt simplifying conventions with respect to any
calculation under this Agreement.




 


Section 6.03 Cooperation. Each of the Corporate Taxpayer, OpCo and each Member shall (a) furnish to the other party in
a timely manner such information, documents and other materials as the other party may reasonably request for purposes of making
any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending
any audit, examination or controversy with any Taxing Authority, (b) make itself available to the other party and its representatives
to provide explanations of documents and materials and such other information as the other party or its representatives may reasonably
request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any
such matter, and the Corporate Taxpayer shall reimburse the applicable Member for any reasonable third-party costs and expenses
incurred pursuant to this Section 6.03.


 


Article VII

MISCELLANEOUS


 


Section 7.01       
Notices. All notices, requests and other communications to any party hereunder shall be in writing (including
facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt
of such e-mail is requested and received) and shall be given to such party as set forth below, or pursuant to such other instructions
as may be designated in writing by the party to receive such notice:


 











	 	If
to the Corporate Taxpayer, to: 
	 	 	 
	 	Wayne
Farms, Inc.

4110 Continental Drive

Oakwood, GA 30566



	 	Telephone:	(770) 538-2127
	 	Facsimile:     	(770) 538-2164
	 	Attention:	General Counsel









 






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	 	with a copy (which shall not constitute notice to the Corporate Taxpayer) to:
	 	 	 
	 	Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064




	 	Telephone:	(212) 373-3000
	 	Facsimile:	(212) 757-3990
	 	Attention:	Richard J. Bronstein
	 	 	Steven J. Williams



   


	 	If
to OpCo, to: 
	 	 	 
	 	Wayne
Farms LLC

4110 Continental Drive

Oakwood, GA 30566



	 	Telephone:   	(770) 538-2127
	 	Facsimile:	(770) 538-2164
	 	Attention:	General Counsel



  





	 	with a copy (which shall not constitute notice to OpCo) to:
	 	 	 
	 	Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064


	 	Telephone:	(212) 373-3000
	 	Facsimile:	(212)
757-3990
	 	Attention:	Richard J. Bronstein

Steven J. Williams



 





If
to the applicable Member, to the address, facsimile number or e-mail address specified for such party on the Member Schedule to
the LLC Agreement.


 


All
such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received
prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed
to have been received on the next succeeding Business Day in the place of receipt.


 


Section 7.02 Binding Effect; Benefit; Assignment.


 


(a) The provisions of this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective successors and assigns. No provision of this Agreement
is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties
hereto and their respective successors and assigns. The Corporate Taxpayer and OpCo, as applicable, shall require and cause any
direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Corporate Taxpayer or OpCo, as applicable, by written agreement, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporate Taxpayer or OpCo, as applicable, would be required to perform
if no such succession had taken place.


 






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(b) A Member may assign any of its rights under this Agreement to any Person as long as such transferee has executed
and delivered, or, in connection with such transfer, executes and delivers, a joinder to this Agreement, in form of Exhibit A,
agreeing to become a “Member” for all purposes of this Agreement, except as otherwise provided in such joinder; provided,
that a Member’s rights under this Agreement shall be assignable by such Member under the procedure in this Section 7.02(b)
regardless of whether such Member continues to hold any interests in OpCo or the Corporate Taxpayer or has fully transferred any
such interests.


 


Section 7.03 Resolution of Disputes.


 


(a) Except for Reconciliation Disputes subject to Section 7.09, any and all disputes which cannot be settled amicably, including
any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation,
performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision)
(each a “Dispute”) shall be finally settled by arbitration conducted by a single arbitrator in Delaware in
accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the Dispute
fail to agree on the selection of an arbitrator within ten (10) days of the receipt of the request for arbitration, the International
Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer admitted to the practice of law in the State
of Delaware and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably
possible during any arbitration proceedings. 


 


(b) Notwithstanding
the provisions of paragraph (a), the Corporate Taxpayer and OpCo, as applicable, may bring an action or special proceeding in
any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief
in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Member
(i) expressly consents to the application of paragraph (c) of this Section 7.03 to any such action or proceeding, (ii) agrees
that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate
and that remedies at law would be inadequate, and (iii) irrevocably appoints the Corporate Taxpayer as agent of such Member for
service of process in connection with any such action or proceeding and agrees that service of process upon such agent, who shall
promptly advise such Member of any such service of process, shall be deemed in every respect effective service of process upon
such Member in any such action or proceeding.


  



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(c)  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE CHANCERY COURT OF THE STATE OF DELAWARE OR, IF SUCH COURT
DECLINES JURISDICTION, THE COURTS OF THE STATE OF DELAWARE SITTING IN WILMINGTON, DELAWARE, AND OF THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF DELAWARE SITTING IN WILMINGTON, DELAWARE, AND ANY APPELLATE COURT FROM ANY THEREOF, FOR THE PURPOSE
OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 7.03, OR ANY JUDICIAL PROCEEDING ANCILLARY
TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial
proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in
aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the fora designated by this paragraph (c)
have a reasonable relation to this Agreement, and to the parties’ relationship with one another.


 


(d) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter
may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court
referred to in the preceding paragraph of this Section 7.03 and such parties agree not to plead or claim the same.


 


Section 7.04 Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument. Until and unless each party has received
a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or
obligation hereunder (whether by virtue of any other oral or written agreement or other communication).


 


Section 7.05 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the
subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter of this Agreement. Except to the extent provided in Section 3.03,
nothing in this Agreement shall create any third-party beneficiary rights in favor of any Person or other party hereto.


 


Section 7.06 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse
to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby
are consummated as originally contemplated to the fullest extent possible.


 


Section 7.07 Amendment.
No provision of this Agreement may be amended unless such amendment is approved in writing by the Corporate Taxpayer and by Persons
who would be entitled to receive at least two-thirds of the Early Termination Payments payable to all Persons entitled to Early
Termination Payments under this Agreement if the Corporate Taxpayer had exercised its right of early termination on the date of
the most recent Exchange prior to such amendment (excluding, for purposes of this sentence, all payments made to any Persons pursuant
to this Agreement since the date of such most recent Exchange); provided, that no such amendment shall be effective if
such amendment will have a disproportionate effect on the payments certain Persons will or may receive under this Agreement unless
all such Persons disproportionately affected consent in writing to such amendment. No provision of this Agreement may be waived
unless such waiver is in writing and signed by the party against whom the waiver is to be effective.


  



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Section 7.08 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware, without regard to the conflicts of law rules of such State that would result in the application of the laws of any
other State.


 


Section 7.09 Reconciliation. In the event that the Corporate Taxpayer and a Member are unable to resolve a disagreement
with respect to the matters governed by Sections 2.03, 3.01(b), 4.02 and 6.02 within the relevant period designated in this Agreement
(“Reconciliation Dispute”), the Reconciliation Dispute shall be submitted
for determination to a nationally recognized expert (the “Expert”) in the particular
area of disagreement mutually acceptable to both parties. The Expert shall be a partner or principal in a nationally recognized
accounting or law firm, and unless the Corporate Taxpayer and such Member agree otherwise, the Expert shall not, and the firm
that employs the Expert shall not, have any material relationship with the Corporate Taxpayer or such Member or other actual or
potential conflict of interest. If the parties are unable to agree on an Expert within fifteen (15) calendar days of receipt by
the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by the International Chamber of
Commerce Centre for Expertise. The Expert shall resolve any matter relating to the Tax Basis Schedule or an amendment thereto
or the Early Termination Schedule or an amendment thereto within thirty (30) calendar days and shall resolve any matter relating
to a Tax Benefit Schedule or an amendment thereto within fifteen (15) calendar days or as soon thereafter as is reasonably practicable,
in each case after the matter has been submitted to the Expert for resolution.  Notwithstanding the preceding sentence, if
the matter is not resolved before any payment that is the subject of a disagreement would be due (in the absence of such disagreement)
or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be paid on the date prescribed
by this Agreement and such Tax Return may be filed as prepared by the Corporate Taxpayer, subject to adjustment or amendment upon
resolution.  The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne by
the Corporate Taxpayer, except as provided in the next sentence.  The Corporate Taxpayer and such Member shall bear their
own costs and expenses of such proceeding, unless (i) the Expert substantially adopts such Member’s position, in which case
the Corporate Taxpayer shall reimburse such Member for any reasonable out-of-pocket costs and expenses in such proceeding, or
(ii) the Expert substantially adopts the Corporate Taxpayer’s position, in which case such Member shall reimburse the Corporate
Taxpayer for any reasonable out-of-pocket costs and expenses in such proceeding.  Any dispute as to whether a dispute is
a Reconciliation Dispute within the meaning of this Section 7.09 shall be decided by the Expert.  The Expert shall finally
determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.09 shall be binding on the
Corporate Taxpayer and such Member and may be entered and enforced in any court having jurisdiction. 


 






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Section 7.10 Withholding. The Corporate Taxpayer shall be entitled to deduct and withhold from any payment payable pursuant
to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code
or any provision of state, local or foreign tax law. To the extent that amounts are so withheld and paid over to the appropriate
Taxing Authority by the Corporate Taxpayer, such withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the applicable Member.


 


Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of Corporate Assets. 


 


(a) If the Corporate Taxpayer is or becomes a member of an
affiliated or consolidated group of corporations that files a consolidated income tax return pursuant to Sections 1501 et seq.
of the Code or any corresponding provisions of state or local law, then: (i) the provisions of this Agreement shall be applied
with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments and other applicable items hereunder
shall be computed with reference to the consolidated taxable income of the group as a whole.


 


(b) If any entity that is obligated to make a Tax Benefit Payment
or Early Termination Payment hereunder transfers one or more assets to a corporation (or a Person classified as a corporation
for U.S. federal income tax purposes) with which such entity does not file a consolidated tax return pursuant to Section 1501
of the Code, such entity, for purposes of calculating the amount of any Tax Benefit Payment or Early Termination Payment (e.g.,
calculating the gross income of the entity and determining the Realized Tax Benefit of such entity) due hereunder, shall be treated
as having disposed of such asset in a fully taxable transaction on the date of such contribution.  The consideration deemed
to be received by such entity shall be equal to the fair market value of the contributed asset. For purposes of this Section 7.11,
a transfer of a partnership interest shall be treated as a transfer of the transferring partner’s share of each of the assets
and liabilities of that partnership.


 


Section 7.12 Partnership Agreement. This Agreement shall be treated as part of the partnership agreement of OpCo as described
in Section 761(c) of the Code, and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.


 


[Remainder
of Page Intentionally Left Blank]


 






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IN
WITNESS WHEREOF, the Corporate Taxpayer, OpCo, and each Member set forth below have duly executed this Agreement as of the date
first written above.  


	 	 	 	 
	 	CORPORATE TAXPAYER:	 
	 	 	 
	 	WAYNE FARMS, INC.	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	 	 
	 	WAYNE FARMS LLC	 
	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 






 


Signature
Page to Tax Receivable Agreement


 






    	 



    	 



    




 


	 	 	 	 
	 	MEMBERS:	 
	 	 	 
	 	WAYNE
FARMS HOLDINGS LLC	 
	 	 	 	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 



 


Signature
Page to Tax Receivable Agreement


 






    	  



    	 



    

 


Exhibit
A


Form
of Joinder


 


This
JOINDER (this “Joinder”) to the Tax Receivable Agreement (as defined below), dated as of ____________, by and
among Wayne Farms, Inc., a Delaware corporation (the “Corporate Taxpayer”), and ______________ (“Permitted
Transferee”).


 


WHEREAS,
on ____________, Permitted Transferee acquired (the “Acquisition”) [___ Common Units][the right to receive
any and all payments that may become due and payable under the Tax Receivable Agreement with respect to ___ Common Units that
were previously Exchanged and are described in greater detail in Annex A to this Joinder] (collectively, “Interests”
and, together with all other interests hereinafter acquired by the Permitted Transferee from Transferor, the “Acquired
Interests”) from ______________ (“Transferor”); and


 


WHEREAS,
Transferor, in connection with the Acquisition, has required Permitted Transferee to execute and deliver this Joinder pursuant
to Section 7.02(b) of the Tax Receivable Agreement, dated as of [_________ ___], 2015, by and among the Corporate Taxpayer and
each Member (as defined therein) (the “Tax Receivable Agreement”).


 


NOW,
THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be
legally bound hereby, the parties hereto agree as follows:


 


Section
1.01Definitions. To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall
have the respective meanings set forth in the Tax Receivable Agreement.


 


Section
1.02Joinder. Permitted Transferee hereby acknowledges and agrees to become a “Member” (as defined in the
Tax Receivable Agreement) for all purposes of the Tax Receivable Agreement. Permitted Transferee hereby acknowledges the terms
of Section 7.02(b) of the Tax Receivable Agreement and agrees to be bound by Section 7.12 of the Tax Receivable Agreement.


 


Section
1.03Notice. Any notice, request, consent, claim, demand, approval, waiver or other communication hereunder to Permitted
Transferee shall be delivered or sent to Permitted Transferee at the address set forth on the signature page hereto in accordance
with Section 7.01 of the Tax Receivable Agreement.


 


Section
1.04Governing Law. This Joinder shall be governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflicts of law rules of such State that would result in the application of the laws of any other State.


 





 



    	 



    	 



    




IN
WITNESS WHEREOF, this Joinder has been duly executed and delivered by Permitted Transferee as of the date first above written.


 


	 	 	 	 
	 	[PERMITTED
TRANSFEREE]	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	Address
for notices: