Document:

exv4w1

EXHIBIT 4.1

Execution Copy

 

 

5.375% SENIOR NOTES DUE 2018

THIRD SUPPLEMENTAL INDENTURE

between

BAXTER INTERNATIONAL INC.,

as Issuer

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee

Dated as of May 22, 2008

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE 1

Definitions
	 
	 	 	 	 	 	 
	Section 1.01.

	 	Definition of Terms.
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE 2

The Notes
	 
	 	 	 	 	 	 
	Section 2.01.

	 	Designation.
	 	 	2	 
	Section 2.02.

	 	Principal Amount; Series Treatment.
	 	 	2	 
	Section 2.03.

	 	Maturity.
	 	 	3	 
	Section 2.04.

	 	Interest.
	 	 	3	 
	Section 2.05.

	 	Form of Notes
	 	 	3	 
	Section 2.06.

	 	Transfers Restrictions
	 	 	4	 
	Section 2.07.

	 	Transfers and Exchanges
	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE 3

Redemption Of The Notes
	 
	 	 	 	 	 	 
	Section 3.01.

	 	Optional Redemption by Company
	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE 4

Change of Control
	 
	 	 	 	 	 	 
	Section 4.01.

	 	Offer to Purchase Upon Change of Control Triggering Event
	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE 5

Execution Of The Notes
	 
	 	 	 	 	 	 
	Section 5.01.

	 	Execution; Certificates
	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE 6

Miscellaneous
	 
	 	 	 	 	 	 
	Section 6.01.

	 	Ratification of Indenture.
	 	 	5	 
	Section 6.02.

	 	Trustee Not Responsible for Recitals.
	 	 	6	 
	Section 6.03.

	 	Governing Law.
	 	 	6	 
	Section 6.04.

	 	Separability.
	 	 	6	 
	Section 6.05.

	 	Counterparts.
	 	 	6	 

-i-

 

     THIRD SUPPLEMENTAL INDENTURE, dated as of May 22, 2008 (the “Supplemental Indenture”),
between Baxter International Inc., a Delaware corporation (the “Company”), and The Bank of
New York Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National
Association), as Trustee, under the Indenture, dated as of August 8, 2006 (the
“Indenture”), between the Company and the Trustee.

     WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide for, among
other things, the issuance from time to time of the Company’s debt securities in one or more series
as might be authorized under the Indenture;

     WHEREAS, the Indenture provides that the Company and the Trustee may enter into an indenture
supplemental to the Indenture to establish the form and terms of any series of Securities (as
defined in the Indenture) as provided by Sections 2.01 and 3.01 of the Indenture;

     WHEREAS, the Board of Directors of the Company has duly adopted resolutions authorizing the
Company to issue the Securities provided for in this Supplemental Indenture;

     WHEREAS, the Company desires to enter into this Supplemental Indenture to provide for the
establishment of a series of Securities (as defined in the Indenture) to be known as the 5.375%
Senior Notes due 2018 (the “Notes”), the form, substance, terms, provisions and conditions
of which shall be set forth in the Indenture and this Supplemental Indenture;

     WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental
Indenture and satisfy all requirements necessary to make (i) this Supplemental Indenture a valid
instrument in accordance with its terms and (ii) the Securities provided for hereby, when executed
and delivered by the Company and authenticated by the Trustee, the valid obligations of the
Company.

     NOW THEREFORE, each party agrees as follows for the benefit of the other parties and for the
equal and ratable benefit of the Holders of the Notes:

ARTICLE 1

Definitions

     Section 1.01. Definition of Terms.

     Unless the context otherwise requires:

     (a) a term defined in the Indenture has the same meaning when used in this Supplemental
Indenture unless the definition of such term is amended and supplemented pursuant to this
Supplemental Indenture;

     (b) a term defined anywhere in this Supplemental Indenture has the same meaning throughout;

     (c) the singular includes the plural and vice versa;

1

 

     (d) a reference to a Section or Article is to a Section or Article of this Supplemental
Indenture;

     (e) headings are for convenience of reference only and do not affect interpretation;

     (f) the following terms have the meanings given to them in this Section 1.01(f):

     “Closing Date” means May 22, 2008.

     “Company” shall have the meaning set forth in the first paragraph hereof.

     “Depositary” means the clearing agency registered under the Exchange Act that is
designated to act as the Depositary for the Global Note. The Depository Trust Company shall be the
initial Depositary, until a successor shall have been appointed and become such pursuant to the
applicable provisions of the Indenture, and thereafter, “Depositary” shall mean or include such
successor.

     “Global Note” shall have the meaning set forth in Section 2.05(b).

     “Initial Notes” means (i) all Notes issued on the first date that Notes were
originally issued under this Supplemental Indenture, (ii) any additional Notes issued under
Section 2.02(a) and (iii) any Notes issued in replacement therefor.

     “Notes” shall have the meaning set forth in the recitals above and shall include any
Global Note.

ARTICLE 2

The Notes

     Section 2.01. Designation.

     The Company hereby establishes a series of Securities designated the “5.375% Senior Notes due
2018” for issuance under the Indenture.

     Section 2.02. Principal Amount; Series Treatment.

     (a) The Notes shall be initially limited to an aggregate principal amount of $500,000,000.
The Company may, from time to time, without the consent of the Holders of the outstanding Notes,
issue additional Notes, so that such additional Notes and the outstanding Notes shall be
consolidated together and form a single series of Securities under the Indenture as supplemented by
this Supplemental Indenture. Any increase in the aggregate principal amount of the Notes shall be
evidenced by an Officers’ Certificate to be delivered to the Trustee, without any further action by
the Company.

     (b) Any additional Notes issued under Section 2.02(a) shall have the same terms in all
respects as the corresponding series of Notes, except that interest will accrue on the additional
Notes from the most recent date to which interest has been paid on the Notes of such series (other
than the additional Notes) or if no interest has been paid on the Outstanding Notes of such

2

 

series from the first date that the Outstanding Notes were originally issued under the
Indenture, as supplemented by this Supplemental Indenture.

     (c) For all purposes of the Indenture and this Supplemental Indenture, all Notes, whether
Initial Notes, or additional Notes issued under Section 2.02(a), shall constitute one
series of Securities and shall vote together as one series of Securities.

     (d) The Notes shall be issued in minimum denominations of $2,000 and integral multiples of
$1,000 in excess thereof.

     Section 2.03. Maturity.

     The Notes will become due and payable on June 1, 2018.

     Section 2.04. Interest. The Notes will bear interest at the rate of 5.375% per annum
from May 22, 2008 until the principal thereof becomes due and payable or to the date of redemption
or repurchase (if any) of the Notes, such interest to be payable semi-annually on June 1 and
December 1 of each year, to the Holders of record of the Notes as of the close of business on the
May 15 and November 15 preceding such interest payment dates, commencing, in the case of the
Initial Notes or any additional Notes issued prior to such date, on December 1, 2008.

     Section 2.05. Form of Notes.

     (a) The Notes shall contain the terms set forth in, and shall be substantially in the form of,
Exhibit A hereto. The terms and provisions contained in the form of Notes set forth in
Exhibit A shall constitute, and are hereby expressly made, a part of the Indenture, as
supplemented by this Supplemental Indenture.

     Any of the Notes may have such letters, numbers or other marks of identification and such
notations, legends, endorsements or changes as the Authorized Officers executing the same may
approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of the Indenture, as supplemented by this Supplemental Indenture, or as may be
required by the Depositary or as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any securities exchange or
automated quotation system on which the Notes may be listed, or to conform to usage, or to indicate
any special limitations or restrictions to which any particular Notes are subject.

     (b) So long as the Notes are eligible for book-entry settlement with the Depositary, or unless
otherwise required by law, or otherwise contemplated herein, all of the Notes shall be represented
by one or more Notes in global form registered in the name of the Depositary or the nominee of the
Depositary.

     The Notes shall be issued initially in the form of one or more permanent Global Securities in
registered form, substantially in the form set forth in Exhibit A (the “Global
Note”), registered in the name of the nominee of the Depositary, deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Note may from time to time

3

 

be increased or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, in accordance with the instructions given by the Holder thereof, as
hereinafter provided.

     The transfer and exchange of beneficial interests in any such Global Note shall be effected
through the Depositary in accordance with the Indenture and the applicable procedures of the
Depositary. Except as provided in the Indenture, beneficial owners of a Global Note shall not be
entitled to have certificates registered in their names, will not receive or be entitled to receive
physical delivery of certificates in definitive form and will not be considered Holders of such
Global Note.

     Any Global Note shall represent such of the Outstanding Notes as shall be specified therein
and shall provide that it shall represent the aggregate amount of Outstanding Notes from time to
time endorsed thereon and that the aggregate amount of Outstanding Notes represented thereby may
from time to time be increased or reduced to reflect redemptions, transfers or exchanges permitted
hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the
amount of outstanding Notes represented thereby shall be made by the Trustee in such manner and
upon instructions given by the Holder of such Notes in accordance with the Indenture and this
Supplemental Indenture. Payment of principal of and interest and premium, if any, on any Global
Note shall be made to the Holder of such Note.

     Section 2.06. Transfer Restrictions. The following provisions shall apply only to a
Global Note:

     (i) Each Global Note authenticated under this Supplemental Indenture shall be
registered in the name of the Depositary or a nominee thereof and delivered to such
Depositary or a nominee thereof or Trustee if the Trustee is acting as custodian for the
Depositary or its nominee with respect to such Global Note, and each such Global Note shall
constitute a single Note for all purposes of the Indenture and this Supplemental Indenture.

     (ii) Notwithstanding any other provision in this Supplemental Indenture, no Global Note
may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note
in whole or in part may be registered, in the name of any Person other than the Depositary
or a nominee thereof except as provided in Section 3.05 of the Indenture. Any Note issued
in exchange for a Global Note or any portion thereof shall be a Global Note; provided that
any such Note so issued that is registered in the name of a Person other than the Depositary
or a nominee thereof shall not be a Global Note.

     (iii) Securities issued in exchange for a Global Note or any portion thereof pursuant
to clause (ii) above shall be issued pursuant to Section 3.05 of the Indenture.

     (iv) At such time as all interests in a Global Note have been redeemed, repurchased,
converted, canceled or exchanged for Notes in certificated form, such Global Note shall,
upon receipt thereof, be canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Trustee. At any time prior to such
cancellation, if any interest in a Global Note is redeemed,

4

 

repurchased, converted, canceled or exchanged for Notes in certificated form, the
principal amount of such Global Note shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Trustee, be appropriately reduced, and
an endorsement shall be made on such Global Note, by the Trustee or at the direction of the
Trustee, to reflect such reduction.

     Section 2.07. Transfers and Exchanges. The Notes shall be transferred and exchanged
by the Holders thereof and the Trustee in accordance with the terms and conditions set forth in
Section 3.05 the Indenture.

ARTICLE 3

Redemption Of The Notes

     Section 3.01. Optional Redemption by Company. The Notes may be redeemed at the option
of the Company on the terms and conditions set forth in the form of Note set forth as Exhibit
A.

ARTICLE 4

Change of Control

     Section 4.01. Offer to Purchase Upon Change of Control Triggering Event. Upon the
occurrence of a Change of Control Triggering Event (as defined in the form of Note set forth as
Exhibit A), and unless the Company has exercised its option to redeem the Notes pursuant to
Section 3.01, the Company shall be required to make an offer to each holder of the Notes to
repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of
that holder’s Notes on the terms and conditions set forth in the form of Note set forth as
Exhibit A.

ARTICLE 5

Execution Of The Notes

     Section 5.01. Execution; Certificates. The Notes and any Officers’ Certificate to be
delivered under the Indenture in connection with the authentication and delivery of the Notes shall
be executed and delivered as set forth in the Indenture.

ARTICLE 6

Miscellaneous

     Section 6.01. Ratification of Indenture.

     The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and
confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.

5

 

     Section 6.02. Trustee Not Responsible for Recitals.

     The recitals herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no representation as to
the validity or sufficiency of this Supplemental Indenture.

     Section 6.03. Governing Law.

     This Supplemental Indenture and the Notes shall be governed by and construed in accordance
with the laws of the State of New York, as applied to contracts made and performed within the State
of New York, without regards to principles of conflicts of law.

     Section 6.04. Separability.

     In case any one or more of the provisions contained in this Supplemental Indenture or in the
Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this
Supplemental Indenture or of the Notes, but this Supplemental Indenture and the Notes shall be
construed as if such invalid or illegal or unenforceable provision had never been contained herein
or therein.

     Section 6.05. Counterparts.

     This Supplemental Indenture may be executed in any number of counterparts each of which shall
be an original; but such counterparts shall together constitute but one and the same instrument.

6

 

     IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be
duly executed as of the date first above written.

	 	 	 	 	 
	 	BAXTER INTERNATIONAL INC.

 	 
	 	By:  	/s/ Robert J. Hombach
 	 
	 	 	Name:  	Robert J. Hombach 	 
	 	 	Title:  	Corporate Vice President
and Treasurer 	 
	 
	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee

 	 
	 	By:  	/s/ Janice Ott Rotunno
 	 
	 	 	Name:  	Janice Ott Rotunno 	 
	 	 	Title:  	Vice President 	 
	 

(Signature Page to Supplemental Indenture)

 

 

EXHIBIT A

[FACE OF NOTE]

[Each Global Note shall bear the following legend:]

[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR TO A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

     Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of Cede & Co., or such
other name as requested by an authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]

 

 

CUSIP No. 071813 AY5

ISIN US071813 AY57

BAXTER INTERNATIONAL INC.

5.375% Senior Notes due 2018

			
	No. A-1
	 	$500,000,000

     Baxter International Inc., a Delaware corporation (the “Company”), for value received,
hereby promises to pay to Cede & Co. or registered assigns, at the office or agency of the Company
in the City of New York, the principal sum of FIVE HUNDRED MILLION DOLLARS ($500,000,000) on June
1, 2018, in such coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts, and to pay interest, semiannually on
June 1 and December 1 of each year, commencing on December 1, 2008, on said principal sum at said
office or agency, in like coin or currency, at the rate per annum specified in the title of this
Note, from the June 1 and December 1, as the case may be, next preceding the date of this Note to
which interest has been paid, unless the date hereof is a date to which interest has been paid, in
which case from the date of this Note, or unless no interest has been paid on these Notes, in which
case from May 22, 2008 until payment of said principal sum has been made or duly provided for;
provided, that payment of interest may be made at the option of the Company by check mailed to the
address of the person entitled thereto as such address shall appear on the Security Register or by
wire transfer to an account maintained by the payee with a bank located in the United States.

     Notwithstanding the foregoing, if the date hereof is after the 15th day of May or
November, as the case may be, and before the following June 1 or December 1, as the case may be,
this Note shall bear interest from such June 1 or December 1; provided, that, if
the Company shall default in the payment of interest due on such June 1 or December 1, then this
Note shall bear interest from the next preceding June 1 or December 1, to which interest has been
paid or, if no interest has been paid on these Notes, from May 22, 2008. The interest so payable
on any June 1 or December 1, will, subject to certain exceptions provided in the Indenture referred
to on the reverse hereof, be paid to the person in whose name this Note is registered at the close
of business on the May 15 or November 15, as the case may be, preceding such June 1 or December 1.
Interest on this Note will be calculated on the basis of a 360-day year of twelve 30-day months.

     Reference is made to the further provisions of this Note set forth on the reverse hereof.
Such further provisions shall for all purposes have the same effect as though fully set forth at
this place.

     This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the Indenture referred to on the
reverse hereof.

 

 

     IN WITNESS WHEREOF, Baxter International Inc. has caused this instrument to be duly executed
on the date set forth below.

Dated: May 22, 2008

	 	 	 	 	 
	 	BAXTER INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Robert  J. Hombach 	 
	 	 	Title:  	Corporate Vice President
and Treasurer 	 

 

 

	 	 	 	 	 

(FORM OF CERTIFICATION OF AUTHENTICATION)

CERTIFICATE OF AUTHENTICATION

     This is one of the Securities of the series designated herein issued under the
within-mentioned Indenture.

	 	 	 	 	 
	THE BANK OF NEW YORK TRUST COMPANY, N.A.

     as Trustee

 	 	 
	By:  	 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 

Dated:

 

 

REVERSE OF NOTE

BAXTER INTERNATIONAL INC.

5.375% Senior Notes due 2018

     This Note is one of a duly authorized issue of Securities of the Company of the series
hereinafter specified, all issued or to be issued under and pursuant to an Indenture, dated as of
August 8, 2006, as supplemented by the Third Supplemental Indenture, dated as of May 22, 2008 (both
together herein called the “Indenture”), between the Company and The Bank of New York Trust
Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association), as
trustee (herein called the “Trustee” which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Securities. This Note is one of a series of
Securities of the Company designated as the 5.375% Senior Notes due 2018 (the “Notes”),
initially limited in aggregate principal amount of $500,000,000, subject to the issuance of
additional Notes as provided in the Indenture. Terms used but not defined herein shall have the
respective meanings set forth in the Indenture.

     If any interest payment date, maturity date or redemption date of this Note falls on a day
that is not a Business Day, payment will be made on the next succeeding Business Day, and no
interest will accrue for the period from and after the interest payment date, maturity date or
redemption date, as the case may be, to the next succeeding Business Day. As used in this Note,
the term “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in the City of New York are authorized or obligated by or
pursuant to law, regulation or executive order to close.

     The Indenture contains provisions for the defeasance at any time of the entire indebtedness of
the Notes or certain covenants set forth in the Indenture applicable to the Notes upon compliance
by the Company of certain conditions set forth therein, which provisions apply to this Note.

     This Note is redeemable in whole at any time or in part, from time to time, at the option of
the Company (an “Optional Redemption”), at a make whole redemption price (the “Optional
Redemption Price”) equal to the greater of:

     (i) 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid
interest thereon to the redemption date, and

     (ii) the sum of the present values of the remaining scheduled payments of principal and
interest on the principal amount of the Notes to be redeemed (not including any portion of
the payment of interest accrued as of the date of redemption) discounted to the redemption
date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate plus 25 basis points, plus accrued and unpaid interest thereon to the date
of redemption.

 

 

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal
to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.

     “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having an actual or interpolated maturity comparable to the
remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Notes.

     “Comparable Treasury Price” means, with respect to any redemption date, (1) the
average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all such quotations.

     “Independent Investment Banker” means one of the Reference Treasury Dealers appointed
by the Company.

     “Reference Treasury Dealers” means (1) Goldman, Sachs & Co. and J.P. Morgan Securities
Inc. and their successors; provided, however, that if either of the foregoing shall cease to be a
primary U.S. Government securities dealer (“Primary Treasury Dealer”), the Company shall
substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer,
and (2) at the option of the Company, additional Primary Treasury Dealers selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Company, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. New York
City time on the third Business Day preceding such redemption date.

     Any redemption pursuant to the preceding paragraph will be made at the Optional Redemption
Price upon not less than 30 nor more than 60 days prior notice before the redemption date to the
Holders. If the Notes are only partially redeemed by the Company pursuant to an Optional
Redemption, the Notes will be redeemed by such method as the Trustee shall deem fair and
appropriate and in accordance with the Indenture. In the event of redemption of this Note in part
only, a new Note or Notes of this series for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof. Unless the Company defaults in payment of
the redemption price, on and after the redemption date interest will cease to accrue on the Notes
or portions thereof called for redemption.

     If a Change of Control Triggering Event (as defined below) occurs, unless the Company has
exercised its option to redeem the Notes (as described above), the Company shall be required to
make an offer (the “Change of Control Offer”) to each holder of the Notes to repurchase all
or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s
Notes on the terms set forth below. In the Change of Control Offer, the Company shall be

 

 

required
to offer payment in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus
accrued and unpaid interest, if any, on the Notes repurchased to the date of
repurchase (the “Change of Control Payment”). Within 30 days following any Change of
Control Triggering Event or, at the option of the Company, prior to any Change of Control, but
after public announcement of the transaction that constitutes or may constitute the Change of
Control, a notice shall be mailed to holders of the Notes describing the transaction that
constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the
Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later
than 60 days from the date such notice is mailed (the “Change of Control Payment Date”).
The notice shall, if mailed prior to the date of consummation of the Change of Control, state that
the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or
prior to the Change of Control Payment Date.

     On the Change of Control Payment Date, the Company shall, to the extent lawful:

	 	(1)	 	accept for payment all Notes or portions of Notes properly tendered pursuant to
the Change of Control Offer;
	 
	 	(2)	 	deposit with the paying agent an amount equal to the Change of Control
Payment in respect of all Notes or portions of Notes properly tendered; and
	 
	 	(3)	 	deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officers’ Certificate stating the aggregate principal amount
of Notes or portions of Notes being repurchased.

     The Company shall not be required to make a Change of Control Offer upon the occurrence of a
Change of Control Triggering Event if a third party makes such an offer in the manner, at the times
and otherwise in compliance with the requirements for an offer made by the Company and the third
party repurchases all Notes properly tendered and not withdrawn under its offer. In addition, the
Company shall not repurchase any Notes if there has occurred and is continuing on the Change of
Control Payment Date an Event of Default, other than a default in the payment of the Change of
Control Payment upon a Change of Control Triggering Event.

     The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control Triggering Event. To the extent that the
provisions of any such securities laws or regulations conflict with the Change of Control Offer
provisions of the Notes, the Company shall comply with those securities laws and regulations and
shall not be deemed to have breached its obligations under the Change of Control Offer provisions
of the Notes by virtue of any such conflict.

     For purposes of the Change of Control Offer provisions of the Notes, the following definitions
shall apply:

     “Change of Control” means the occurrence of any of the following: (1) the consummation
of any transaction (including, without limitation, any merger or consolidation) the

 

 

result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange
Act), other than the Company or one of its subsidiaries, becomes the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the
Company’s Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified,
consolidated, exchanged or changed, measured by voting power rather than number of shares; (2) the
direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or substantially all of the
Company’s assets and the assets of its subsidiaries, taken as a whole, to one or more “persons” (as
that term is defined in the Indenture), other than the Company or one of its subsidiaries; (3) the
adoption of a plan relating to the Company’s liquidation or dissolution; or (4) the replacement of
a majority of the Company’s Board of Directors over a two-year period from the directors who
constituted the Company’s Board of Directors at the beginning of such period, and such replacement
directors shall not have been approved by at least a majority of the Company’s Board of Directors
then still in office (either by a specific vote or by approval of a proxy statement in which such
member was named as a nominee for election as a director) who either were members of such Board of
Directors at the beginning of such period or whose election as a member of such Board of Directors
was previously so approved. Notwithstanding the foregoing, a transaction shall not be deemed to be
a Change of Control if (1) the Company becomes a direct or indirect wholly-owned subsidiary of a
holding company and (2)(A) the direct or indirect holders of the Voting Stock of such holding
company immediately following that transaction are substantially the same as the holders of the
Company’s Voting Stock immediately prior to that transaction or (B) immediately following that
transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than
a holding company satisfying the requirements of this sentence) is the beneficial owner, directly
or indirectly, of more than 50% of the Voting Stock of such holding company.

     “Change of Control Triggering Event” means the occurrence of both a Change of Control
and a Rating Event.

     “Investment Grade Rating” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade
credit rating from any replacement Rating Agency or Rating Agencies.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Rating Agencies” means (1) each of Moody’s and S&P, and (2) if either Moody’s or S&P
ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons
outside of the Company’s control, a “nationally recognized statistical rating organization” within
the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company (as
certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s
or S&P, or both of them, as the case may be.

     “Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies
and the Notes are rated below an Investment Grade Rating by each of the Rating Agencies on any day
within the 60-day period (which 60-day period will be extended so long as the rating of
the Notes is under publicly announced consideration for a possible downgrade by any of the
Rating Agencies but no longer than 180 days) after the earlier of (1) the occurrence of a Change

 

 

of
Control and (2) public notice of the Company’s intention to effect a Change of Control;
provided, however, that a Rating Event otherwise arising by virtue of a particular
reduction in rating shall not be deemed to have occurred in respect of a particular Change of
Control (and thus shall not be deemed a Rating Event for purposes of the definition of Change of
Control Triggering Event) if the Rating Agencies making the reduction in rating to which this
definition would otherwise apply do not announce or publicly confirm or inform the Trustee in
writing at the Company’s or its request that the reduction was the result, in whole or in part, of
any event or circumstance comprised of or arising as a result of, or in respect of, the applicable
Change of Control (whether or not the applicable Change of Control has occurred at the time of the
Rating Event).

     “S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill
Companies, Inc.

     “Voting Stock” means, with respect to any specified “person” (as that term is used in
Section 13(d)(3) of the Exchange Act), as of any date, the capital stock of such person that is at
the time entitled to vote generally in the election of the board of directors of such person.

     The Company’s obligation to make a Change of Control Offer as set forth herein shall be
subject to the covenant defeasance provisions of Section 13.02(c) of the Indenture.

     If an Event of Default, with respect to the Notes shall have occurred and be continuing, the
principal of this Note may be declared due and payable in the manner and with the effect set forth
in the Indenture.

     The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the Holders of not less than a majority in aggregate principal amount of the Notes at the time
Outstanding of each series to be affected to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Notes subject to
the limitations set forth in the Indenture. It is also provided in the Indenture that, with
respect to certain defaults or Events of Default regarding the Securities of any series, the
Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of
such series may on behalf of the Holders of all the Securities of such series waive any such past
default or Event of Default and its consequences. The preceding sentence shall not, however, apply
to a default in the payment of the principal of or premium, if any, or interest on the Notes. Any
such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and owners of this
Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether
or not any notation thereof is made upon this Note or such other Notes.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligations of the Company, which are absolute and unconditional, to
pay the principal of, and any premium and interest on, this Note in the manner and at the
respective times herein provided.

 

 

     The Notes are issuable in registered form without coupons in denominations of $2,000 and any
multiple of $1,000 in excess thereof. In the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge, Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations at the office or agency of
the Trustee in the City of New York.

     There is no sinking fund for the retirement of the Notes.

     Upon due presentment for registration of transfer of this Note at the office or agency of the
Trustee in the City of New York, a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture, without charge except for any tax or other governmental
charge imposed in connection therewith.

     Prior to due presentment for registration of transfer, the Company, the Trustee and any agent
of the Company, or the Trustee may treat the registered Holder hereof as the owner of this Note
(whether or not this Note shall be overdue), for the purpose of receiving payment of the principal
hereof and premium, if any, and subject to the provisions on the face hereof, interest hereon, and
for all other purposes, and neither the Company, nor the Trustee nor any agent of the Company, or
the Trustee shall be affected by any notice to the contrary.

     No recourse under or upon any obligation, covenant or agreement contained in the Indenture or
any indenture supplemental thereto or in any Note, or because of any indebtedness evidenced
thereby, shall be had against any past, present or future stockholder, employee, officer or
director, as such, of the Company, or of any predecessor or successor, either directly or through
the Company, or any predecessor or successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.

     This Note is the senior unsecured and unsubordinated obligation of the Company and will rank
on a parity with all other unsecured and unsubordinated indebtedness of the Company, including any
other Securities issued under the Indenture.

 

 

[FORM OF TRANSFER NOTICE]

     FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s)
unto

Insert Taxpayer Identification No.

 
Please print or typewrite name and address including zip code of assignee

 
the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney
to transfer said Note on the books of

 
the Company with full power of substitution in the premises.

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

 

 

Schedule I

[Include as Schedule I only for a Global Note]

BAXTER INTERNATIONAL INC.

5.375% Senior Notes due 2018

No. ____

	 	 	 	 	 	 	 
	 
	 	 	 	 	Notation Explaining Principal	 	Authorized Signature of
	Date	 	Principal Amount	 	Amount Recorded	 	Trustee or CustodianEx-10.1

Exhibit 10.1

SANDERSON FARMS, INC.

SHARE PURCHASE AGREEMENT

(Management Share Purchase Plan)

(Employee Agreement)

      This SHARE PURCHASE 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”), is hereby
amended and restated in its entirety as follows as of the 26th day of April, 2007, to
set forth the terms and conditions of an Award of Share Purchase Rights granted 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. The term “Fiscal Year” shall mean the fiscal year of the
Company which begins on November 1 of each calendar year and ends on October 31 of the next
calendar year.

1. Rights to Purchase Restricted Stock.

      (a) Base Salary Reduction. The Participant may elect to reduce his base salary by a
specified percentage thereof (not to exceed 15%) and, in lieu of receiving such salary, receive a
number of Shares of the Company, subject to the terms, conditions and restrictions set forth herein
(“Restricted Stock”), equal to the amount of such salary reduction divided by a dollar amount equal
to the Fair Market Value of a Share on the date on which such Restricted Stock is received. In the
first year of the Participant’s eligibility to participate in the Plan, an election to reduce the
Participant’s salary for the period of that initial year of eligibility subsequent to the election
must be made within 30 days after the date that the Participant becomes eligible so to participate
(the “Initial Election Deadline”). An election so made during the initial year of eligibility
(“Initial Salary Election”) shall become irrevocable on the Initial Election Deadline and shall be
effective beginning with the first pay period that ends after the Initial Election Deadline. Any
election to reduce salary otherwise payable in a calendar year after the Participant’s initial year
of eligibility shall be effective beginning with the first pay period that ends after January 1 of
the calendar year next following the calendar year in which such election is made (and shall become
irrevocable on December 31 of the calendar year in which such election is made with respect to the
next calendar year). Any cancellation of, or other change in, any such salary reduction election
shall become effective as of the first pay period ending after January 1 of the calendar year next
following the calendar year in which notice of such cancellation or change is filed (and any such
notice shall become irrevocable on December 31 of the calendar year in which it is filed with
respect to the next calendar year).

      Any salary reduction hereunder shall apply ratably to the Participant’s salary for each pay
period covered by such election. Restricted Stock shall be issued for the account of the
Participant, or allocated to the account of the Participant from Shares previously purchased by the
Company, in respect of such salary reductions on the last business day in each calendar quarter
ending March 31, June 30, September 30 and December 31 (each such date, a “Quarterly Allocation
Date”). The number of shares of Restricted Stock issued or allocated to the Participant on each
Quarterly Allocation Date shall be based upon the aggregate salary reduction for pay periods ending
since the next preceding Quarterly Allocation Date and the Fair Market Value of a Share on such
later Quarterly Allocation Date. Fractional shares will be issued (or purchased) where necessary.

      If a Participant who has elected salary reductions hereunder shall terminate employment before
shares of Restricted Stock are issued or allocated in respect of all such salary reductions, any
salary reduction amounts in respect of which Restricted Stock has not been granted by the date of
Participant’s termination of employment shall be returned to Participant promptly in cash, subject
to compliance with the requirements of Sections 409A(a)(2) and (3) of the Code.

      (b) Bonus Reduction. The Participant may also elect to reduce his annual bonus
compensation, if any, by a specified percentage thereof (not to exceed 75%) and, in lieu of
receiving such bonus, receive a number of shares of Restricted Stock equal to the amount of such
bonus reduction divided by a dollar amount equal to the Fair Market Value of a Share on the date on
which such Restricted Stock is received. An election for the bonus payable with respect to the
Fiscal Year ending October 31, 2005 and for the bonus payable with respect to any subsequent Fiscal
Year must be made on or before April 30 of that Fiscal Year (or if such day is not a business day,
then on or before the next preceding business day) and shall become irrevocable on that date with
respect to that Fiscal Year. Any cancellation of, or other change in, any such bonus reduction
election shall become effective with respect to the Fiscal Year in which notice of such
cancellation or change is filed if it is filed on or before April 30 of that Fiscal Year (or, if
such day is not a business day, then on or before the next preceding business day); otherwise, it
shall become effective with respect to the Fiscal Year next following the Fiscal Year in which it
is filed.

1

 

      Restricted Stock shall be issued or allocated to the account of the Participant in respect of
any such bonus reduction on the date that such bonus is otherwise payable.

      If a Participant who has elected a bonus reduction hereunder shall terminate employment before
shares of Restricted Stock are issued or allocated in respect of such bonus reduction, such
election shall be deemed canceled and any bonus compensation due to the Participant shall be paid
in cash, subject to compliance with the requirements of Sections 409A(a)(2) and (3) of the Code.

2. Company Matching Contribution.

      For each four shares of Restricted Stock acquired by the Participant pursuant to Section 1
above, whether in respect of base salary or bonus reductions, the Company shall simultaneously
issue or allocate to the account of the Participant, for no additional consideration, one
additional share of Restricted Stock (the “Company Match”), including fractional shares where
necessary.

3. Terms of Restricted Stock.

      (a) The Restricted Stock is subject to forfeiture as provided herein and, during the
Restriction Period defined below, 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, each share of Restricted Stock
shall vest and no longer be subject to forfeiture or any transfer restrictions hereunder on the
third anniversary of its acquisition by the Participant, so long as the Participant has remained
continuously employed by the Company from such acquisition date through such third anniversary.

      (c) In the event of (i) the Participant’s termination of employment with the Company by reason
of death or Disability (for purposes of this Section 3, “Disability” shall have the meaning set
forth in Section 409A(a)(2)(C) of the Code at any time such definition is more restrictive than the
Plan definition of “Disability”), (ii) his termination of employment with the Company on or after
his attainment of eligibility for retirement (as determined by the Board from time to time), or
(iii) a Change in Control (provided that such Change in Control also constitutes a “change in
ownership or effective control” of the Company within the meaning of Section 409A(a)(2)(A)(v) of
the Code), any portion of the Restricted Stock that has not vested shall immediately vest and no
longer be subject to forfeiture or any transfer restrictions hereunder; provided that in the case
of a Participant who is a “specified employee” within the meaning of Section 409A(a)(2)(B) of the
Code, such Restricted Stock shall not vest before the date which is six months after the date of
the Participant’s separation from service (or, if earlier, the date of his death). If the
Participant’s employment with the Company is terminated for any other reason, voluntarily or
involuntarily, prior to the expiration of the Restriction Period for any shares of Restricted Stock
acquired pursuant to this Agreement by the Participant, then (X) any portion of the Restricted
Stock acquired by the Participant pursuant to the Company Match that has not vested as of the date
of employment termination shall immediately be forfeited, ownership shall be transferred back to
the Company (and any dividends or other distributions with respect thereto paid to the Participant
shall be returned to the Company) and the Restricted Stock shall become authorized but unissued
Shares, and (Y) any portion of the Restricted Stock acquired by the Participant in respect of
salary or bonus reductions that has not vested as of the date of the employment termination may, at
the Company’s option, be repurchased by the Company at the price paid by the Participant for such
Restricted Stock, less the amount of dividends received by the Participant (and the Company may pay
such purchase price in whole or in part by cancellation of any indebtedness owed by the Participant
to the Company). Any such Restricted Stock not so repurchased by the Company will vest on the
third anniversary of its acquisition by the Participant.

      (d) If the Board determines in good faith that the Participant has engaged in any Detrimental
Activity during the period that the Participant is employed by the Company or during the two-year
period following the Participant’s voluntary termination of employment or his termination by the
Company for Cause, then (X) any portion of the Restricted Stock acquired by the Participant
pursuant to the Company Match that has not vested as of the date of the Board’s determination shall
immediately be forfeited, ownership shall be transferred back to the Company (and any dividends or
other distributions with respect thereto paid to the Participant shall be returned to the Company)
and the Restricted Stock shall become authorized but unissued Shares, and (Y) any portion of the
Restricted Stock acquired by the Participant in respect of salary or bonus reductions that has not
vested as of the date of the Board’s determination may, at the Company’s option, be repurchased by
the Company at the price paid by the Participant for such Restricted Stock less the amount of
dividends received by the Participant (and the Company may pay such purchase price in whole or in
part by cancellation of any indebtedness owed by the Participant to the Company). If, at the time
of such determination, shares of Restricted Stock acquired by the Participant pursuant to the
Company Match have already vested, the Participant shall repay to the Company the Fair Market Value
of such Shares as of the date(s) that they were issued or allocated to the Participant (and any
dividends or other distributions with respect thereto paid to the Participant shall be returned to
the Company).

2

 

4. Registration of Shares.

      Certificates representing the number of shares of Restricted Stock purchased from time to time
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 applicable Restriction Period expires or until the restrictions thereon otherwise lapse
and/or be delivered 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 shares of Restricted
Stock vest and are no longer subject to forfeiture or transfer restrictions, unlegended
certificates for such Restricted Stock shall be delivered to the Participant (subject to Section 8
pertaining to the withholding of taxes and Section 16 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.

      If the Company elects to hold certificates in escrow, then it shall deliver to the Participant
not less often than every six months a statement of the aggregate number of shares of Restricted
Stock held for his account and the applicable acquisition dates and purchase prices of shares of
Restricted Stock acquired by the Participant since the last such statement.

5. Rights as a Stockholder.

      Except as otherwise provided in this Agreement or the Plan, during the Restriction Period
applicable to any Restricted Stock, 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.

6. 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 therefore 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 acquired pursuant to this Agreement
shall be treated in the same manner as other outstanding Shares of the Company.

7. Validity of Share Issuance.

      Upon the issuance or Restricted Stock pursuant to the terms of this Agreement, such shares of
Restricted Stock will be duly authorized by all necessary corporate action of the Company and will
be validly issued, fully paid and non-assessable.

8. Taxes and Withholding.

      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 the acquisition
of Restricted Stock pursuant to this Agreement, 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

3

 

9. 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.

10. Legal Construction.

      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
base salary or bonus reductions under this Agreement to be includible in a Plan participant’s gross
income pursuant to Section 409A(a)(1) of the Code, as determined by the Board, such provision shall
be construed or deemed amended to conform to Applicable Law and to qualify the Plan, this Agreement
and the income pursuant hereto for the desired benefits of the laws with which they are intended to
qualify 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.

      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.

      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.

11. Incorporation of Plan.

      This Agreement , the Share Purchase Rights awarded pursuant hereto and the Restricted Stock
acquired 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 Share Purchase Rights in particular. The Board has the right to interpret, construe and
administer the Plan, this Agreement and the Share Purchase Rights awarded and the Restricted Stock
acquired 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.

12. No Implied Rights.

      Neither this Agreement nor the award of Share Purchase Rights nor the acquisition of any
Restricted Stock shall confer on the Participant any right with respect to continuance of
employment or other service with the Company. 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.

13. 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.

14. 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.

4

 

15. Amendments; Termination.

      The Board may, at any time, without consent of or receiving further consideration from the
Participant, amend this Agreement and the Restricted Stock acquired 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 Agreement and the
Restricted Stock acquired pursuant hereto otherwise with the written consent of the Participant.

      The Company may suspend or terminate this Agreement at any time, provided that no such
suspension or termination may adversely affect the Participant’s rights with respect to any
Restricted Stock previously acquired pursuant to this Agreement, unless his written consent is
obtained.

16. Securities Act.

      (a) The issuance and delivery of the Share Purchase Rights 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 Prospectus dated July 27, 2005, relating to the Plan.

      (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.

17. Arbitration.

      Any controversy or claim arising out of or relating to this Share Purchase 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.

      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

 	 
	 	 	 
	 	 	 
	 	 	 

5

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