Ex-10.4



 





Exhibit 10.4




SANDERSON FARMS, INC.




RESTRICTED STOCK AGREEMENT

(Non-Employee Director)




     This RESTRICTED STOCK AGREEMENT (this “Agreement”), made and entered into as of the
           day
of
                                        ,
20           (the “Grant Date”), by and
between                        
                                    
(the “Participant”) and Sanderson Farms, Inc. (together with its subsidiaries and affiliates, the
“Company”), sets forth the terms and conditions of a Restricted Stock Award issued pursuant to the
Sanderson Farms, Inc. and Affiliates Stock Incentive Plan, adopted on February 17, 2005 (the
“Plan”) and this Agreement. Any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan.



     1. Grant and Vesting of Restricted Stock.



     (a) As a reward for past service or in consideration of and as an incentive to the
Participant’s continued service as a non-employee director on the Company’s Board, and for no
additional consideration, the Company hereby grants to the Participant, as of the Grant Date,
                    
shares of the Company’s common stock, par value $1.00 per share (the “Restricted
Stock”), subject to the terms and conditions set forth herein and in the Plan. The Restricted Stock
is subject to forfeiture as provided herein and may not be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of by the Participant, other than by will or by the laws of
descent and distribution of the state in which the Participant resides on the date of his death.
The period during which the Restricted Stock is not vested and is subject to transfer restrictions
is referred to herein as the “Restriction Period.”



     (b) Except as otherwise provided in this Agreement or the Plan, the Restricted Stock shall
vest and no longer be subject to forfeiture or any transfer restrictions hereunder upon the
expiration of the Participant’s current term as a director on the Company’s Board, so long as the
Participant has served as a director continuously through the full term.



     (c) If the Participant separates from service as a director on the Company’s Board by reason
of death or Disability, or if there is a Change of Control, the Restricted Stock that has not
vested shall immediately vest and no longer be subject to forfeiture or any transfer restrictions
hereunder. If the Participant separates from service as a director for any other reason,
voluntarily or involuntarily, prior to the expiration of the Restriction Period, then the
Restricted Stock that has not vested as of the separation date shall immediately be forfeited,
ownership shall be transferred back to the Company and the Restricted Stock shall become authorized
but unissued Shares.



     2. Issuance of Shares.



 









 





     Certificates representing the Restricted Stock shall be registered in the Participant’s name
(or an appropriate book entry shall be made). Certificates, if issued, may, at the Company’s
option, either be held by the Company in escrow until the Restriction Period expires or until the
restrictions thereon otherwise lapse and/or be issued to the Participant and registered in the name
of the Participant, bearing an appropriate restrictive legend that refers to this Agreement and
remaining subject to appropriate stop-transfer orders. The Participant agrees to deliver to the
Board, upon request, one or more stock powers endorsed in blank relating to the Restricted Stock.
If and when the Restricted Stock vests and is no longer subject to forfeiture or transfer
restrictions, unlegended certificates for such Restricted Stock shall be delivered to the
Participant (subject to Section 6 pertaining to the withholding of taxes and Section 14 pertaining
to the Securities Act of 1933, as amended (the “Securities Act”)); provided, however, that the
Board may cause such legend or legends to be placed on any such certificates as it may deem
advisable under Applicable Law.



     3. Rights as a Stockholder.



     Except as otherwise provided in this Agreement or the Plan, during the Restriction Period the
Participant shall have, with respect to the Restricted Stock, all of the rights of a stockholder of
the Company, including the right to vote the Restricted Stock and the right to receive any
dividends or other distributions with respect thereto.



     4. Adjustments.



     If any change in corporate capitalization, such as a stock split, reverse stock split, stock
dividend, or any corporate transaction such as a reorganization, reclassification, merger or
consolidation or separation, including a spin-off of the Company or sale or other disposition by
the Company of all or a portion of its assets, any other change in the Company’s corporate
structure, or any distribution to stockholders (other than a cash dividend) results in the
outstanding Shares, or any securities exchanged therefor or received in their place, being
exchanged for a different number or class of shares or other securities of the Company, or for
shares of stock or other securities of any other corporation, or new, different or additional
shares or other securities of the Company or of any other corporation being received by the holders
of outstanding Shares, then the shares of Restricted Stock granted pursuant to this Agreement shall
be treated in the same manner as other outstanding Shares of the Company.



     5. Validity of Share Issuance.



     The shares of Restricted Stock have been duly authorized by all necessary corporate action of
the Company and are validly issued, fully paid and non-assessable.



     6. Taxes and Withholding.



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     As soon as practicable on or after the date as of which an amount first becomes includible in
the gross income of the Participant for federal income tax purposes with respect to this Award of
Restricted Stock, the Participant shall pay to the Company, or make arrangements satisfactory to
the Company regarding the payment of, or the Company may deduct or withhold from any cash or
property payable to the Participant, an amount equal to all federal, state, local and foreign taxes
that are required by Applicable Law to be withheld with respect to such includible amount.
Notwithstanding anything to the contrary contained herein, the Participant may, if the Company
consents, discharge this withholding obligation by directing the Company to withhold shares of
Restricted Stock having a Fair Market Value on the date that the withholding obligation is incurred
equal to the amount of tax required to be withheld in connection with such vesting, as determined
by the Board.



     7. Notices.



     Any notice to the Company provided for in this Agreement shall be in writing and shall be
addressed to it in care of its Secretary at its principal executive offices, and any notice to the
Participant shall be addressed to the Participant at the current address shown on the payroll
records of the Company. Any notice shall be deemed to be duly given if and when properly addressed
and posted by registered or certified mail, postage prepaid.



     8. Legal Construction.



     (a) Severability. If any provision of this Agreement is or becomes or is deemed
invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or this
Agreement under any law with respect to which the Plan or this Agreement is intended to qualify, or
would cause compensation deferred under the Plan to be includible in a Plan participant’s gross
income pursuant to Section 409A(a)(1) of the Internal Revenue Code of 1986, as amended, as
determined by the Board, such provision shall be construed or deemed amended to conform to
Applicable Law or, if it cannot be construed or deemed amended without, in the determination of the
Board, materially altering the intent of the Plan or the Agreement, it shall be stricken and the
remainder of this Agreement shall remain in full force and effect.



     (b) Gender and Number. Where the context admits, words in any gender shall include
the other gender, words in the singular shall include the plural and words in the plural shall
include the singular.



     (c) Governing Law. To the extent not preempted by federal law, this Agreement shall
be construed in accordance with and governed by the laws of the State of Mississippi.



     9. Incorporation of Plan.



     This Agreement and the Restricted Stock Award made pursuant hereto are subject to, and this
Agreement hereby incorporates and makes a part hereof, all terms and conditions of the Plan that
are applicable to Agreements and Awards generally and to Restricted Stock Awards in



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particular. The Board has the right to interpret, construe and administer the Plan, this Agreement
and the Restricted Stock Award made pursuant hereto. All acts, determinations and decisions of the
Board made or taken pursuant to grants of authority under the Plan or with respect to any questions
arising in connection with the administration and interpretation of the Plan, including the
severability of any and all of the provisions thereof, shall be in the Board’s sole discretion and
shall be conclusive, final and binding upon all parties, including the Company, its stockholders,
Participants, Eligible Participants and their estates, beneficiaries and successors. The
Participant acknowledges that he has received a copy of the Plan.



     10. No Implied Rights.



     Neither this Agreement nor the issuance of any Restricted Stock shall confer on the
Participant any right with respect to continuance of employment or other service with the Company.
If the Participant is an employee of the Company, then except as may otherwise be limited by a
written agreement between the Company and the Participant, and acknowledged by the Participant, the
right of the Company to terminate at will the Participant’s employment with it at any time (whether
by dismissal, discharge, retirement or otherwise) is specifically reserved by the Company.



     11. Integration.



     This Agreement and the other documents referred to herein, including the Plan, or delivered
pursuant hereto, contain the entire understanding of the parties with respect to their subject
matter. There are no restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those expressly set forth herein
and restrictions imposed by the Securities Act and applicable state securities laws. This
Agreement, including the Plan, supersedes all prior agreements and understandings between the
parties with respect to its subject matter.



     12. Counterparts.



     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but which together constitute one and the same instrument.



     13. Amendments.



     The Board may, at any time, without consent of or receiving further consideration from the
Participant, amend this Agreement and the Restricted Stock Award made pursuant hereto in response
to, or to comply with changes in, Applicable Law. To the extent not inconsistent with the terms of
the Plan, the Board may, at any time, amend this Agreement in a manner that is not unfavorable to
the Participant without the consent of the Participant. The Board may amend this



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Agreement and the Restricted Stock Award made pursuant hereto otherwise with the written consent of
the Participant.



     14. Securities Act.



     (a) The issuance and delivery of the Restricted Stock to the Participant have been registered
under the Securities Act by a Registration Statement on Form S-8 that has been filed with the
Securities and Exchange Commission (“SEC”) and has become effective. The Participant acknowledges
receipt from the Company of its current Prospectus relating to the Restricted Stock.



     (b) If the Participant is an “affiliate” of the Company, which generally means a director,
executive officer or holder of 10% or more of its outstanding shares, at the time certificates
representing Restricted Stock are delivered to the Participant, such certificates shall bear the
following legend, or other similar legend then being generally used by the Company for certificates
held by its affiliates:




“THESE SHARES MUST NOT BE OFFERED FOR SALE, SOLD, ASSIGNED OR TRANSFERRED
EXCEPT IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL FOR THE ISSUER, IS EXEMPT
FROM REGISTRATION THROUGH COMPLIANCE WITH RULE 144 OR WITH ANOTHER EXEMPTION FROM
REGISTRATION.”



     The Company shall remove such legend upon request by the Participant if, at the time of
such request, the shares are eligible for sale under SEC Rule 144(k), or any provision that has
replaced it, in the opinion of the Company’s counsel.



     15. Arbitration.



     Any controversy or claim arising out of or relating to this Restricted Stock Agreement shall
be settled by arbitration administered by the American Arbitration Association under its Commercial
Arbitration Rules and judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.



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     IN WITNESS WHEREOF, the Participant has executed this Agreement on his own behalf, thereby
representing that he has carefully read and understands this Agreement and the Plan as of the day
and year first written above, and the Company has caused this Agreement to be executed in its name
and on its behalf, all as of the day and year first written above.



	 	 	 	 	 	 	 	 	 
	 	 	SANDERSON FARMS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Participant	 	 







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