Document:

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

3

 

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	 	 

6Exhibit 10.1

 

CHANGE-IN-CONTROL AGREEMENT

     THIS CHANGE-IN-CONTROL AGREEMENT is made and entered into as of the 23rd day of
May, 2007 by and between TSB FINANCIAL CORPORATION (the “Company”), a North Carolina corporation,
and John B. Stedman, Jr. (“Employee”), an individual residing in Charlotte, North Carolina.

Background Statement

     WHEREAS, The Scottish Bank (the “Bank”) is a wholly owned subsidiary of the Company, and
Employee is a valued employee of The Bank.

     WHEREAS, in order to induce Employee to continue employment with the Bank and to enhance
Employee’s job security, the Company desires to provide compensation to Employee in the event
Employee’s employment is terminated following a change-in-control of the Company, as hereinafter
provided.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the compensation
the Company agrees to pay to Employee, Employee’s continued employment with the Bank, and of other
good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee agree as follows:

	 	1.	 	Termination following a Change in Control. If a Change in Control (as
defined in Section 1(iii) hereof) occurs and if, within one year following the Change
in Control, the employment of Employee is terminated (x) by the Company or the Bank
other than for Causes or (y) by Employee for Good Reason, Employee’s compensation
shall continue to be paid, subject to applicable withholdings, by the Company for a
period of 12-months following such termination of employment. In lieu of receiving
payment of Compensation for such 12-month period installments, the Employee may elect,
at any time prior to the earlier to occur of a Change in Control or action by the
Board of Directors of the Company with respect to an event which would, upon
consummation, result in a Change in Control (which election shall be evidence by
notice filed with the Company), to be paid the present value of any such Compensation
in a lump sum within 30 days of termination of the Employee’s employment under
circumstances entitling such Employee to Compensation hereunder. The calculation of
the amount due shall be made by the independent accounting firm then performing the
Company’s independent audit, and such calculation, including by not limited to the
discount factor used to determine present value, shall be conclusive.

	 
	 	 	 	For purposes of this Agreement, the following terms shall have the meanings
indicated:

 

 

	 	(i)	 	Cause. Termination by the Company or the Bank for “Cause”
shall mean (A) termination on account of willful misconduct of a material
nature by the Employee in connection with performance of his duties as an
employee; (B) use of alcohol or narcotics that affects his ability to perform
his duties as an employee; (C) conviction of a felony or serious misdemeanor
involving moral turpitude; (D) embezzlement or theft from the Company or the
Bank; (E) gross inattention to or dereliction of duty; or (F) performance by
the Employee of any other willful acts which Employee knew or reasonably
should have known would be materially detrimental to the Company or the Bank.

	 
	 	(ii)	 	Good Reason. Termination by the Employee for “Good Reason”
shall mean (A) a material reduction in Employee’s position, duties,
responsibilities or status as in effect immediately preceding the Change in
Control, or a change in Employee’s title resulting in a material reduction in
his responsibilities or position with the Company or the Bank as in effect
immediately preceding the Change in Control, in either case without Employee’s
consent; (B) a material reduction in the rate of Employee’s base salary as in
effect immediately preceding the Change in Control, or a material decrease in
the bonus percentage to which Employee was entitled pursuant to any of the
Company’s incentive bonus plans tat the end of the fiscal year immediately
preceding the Change-in-Control, in either case without Employee’s consent;
provided, however, that nothing herein shall be construed to
guarantee the Employee’s bonus award if performance, either by the Company or
Employee, is below target as set forth in any of the Company’s such incentive
bonus plans; or (C) the relocation of Employee, without his consent, to a
location outside a 25 mile radius the Company’s principal location, following
a Change in Control.

	 
	 	(iii)	 	Change in Control. For purposes of the Agreement, “Change
in Control” shall mean (A) the consummation of a merger, consolidation, share
exchange or similar transaction of the Company with any other corporation as a
result of which the holders of the voting capital stock of the Company as a
group would receive less than 50% of the voting capital stock of the surviving
or resulting corporation; (B) the sale or transfer (other than as security for
obligations of the Company) of substantially all the assets of the Company;
(C) in the absence of a prior expression of approval by the Board of
Directors, the acquisition of more than 20% of the Company’s voting capital
stock by any person within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), other than a person,
or group including a person, who beneficially owned, as of the date of this
Agreement, more than 5% of the Company’s securities; (D)

 

 

	 	 	 	during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company’s shareholders, of
each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period; or (E) any other change in control of the Company of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Exchange Act or the acquisition of
control, within the meaning of Section 2(a)(2) of the Bank Holding company
Act of 1956, as amended, or Section 602 of the Change in Bank Control Act
of 1978, of the Company by any person, company or other entity.

	 
	 	(iv)	 	Compensation. Employee’s Compensation shall consist of the
following: (A) Employee’s annual base salary, as paid by the Company or the
Bank, in effect immediately preceding the Change in Control and (B) the
average of any bonus paid by the Company or the Bank to Employee during the
two most recent fiscal year ending prior to such Change in Control pursuant to
any of the Company’s incentive bonus plan.

	 	2.	 	Additional Benefits. Upon termination of Employee’s employment entitling
Employee to Compensation set forth in Section 1 hereof, the Company shall maintain in
full force and effect for the continued benefit of Employee for such 12-month period
health insurance (including coverage for Employee’s dependents to the extent dependent
coverage is provided by the Company for its employees generally) under such plans and
programs in which Employee was entitled to participate immediately prior to the date
of such termination of employment, provided that Employee’s continued participation is
possible under the general terms and provisions of such plans and programs. In the
event that Employee’s participation in any such plan or program is barred, the Company
shall arrange to provide Employee with health insurance benefits for such 12-month
period substantially similar to those which Employee would otherwise have been
entitled to receive under such plans and programs from which his continued
participation is barred. However, in no event will Employee receive from the Company
the health insurance contemplated by this Section 2 if Employee received comparable
insurance from any other source.

	 
	 	3.	 	Limit on Payments. It is the intention of the Company and Employee that no
portion of the payment made under this Agreement, or payments to or for Employee under
any other agreement or plan, be deemed to be an excess parachute payment as defined in
Section 280G of the Internal Revenue Coded of 1986, as amended (the “Code”) or any
successor provision. The Company and Employee agree that the present value of any
payment hereunder and any other payment to or for the benefit of

 

 

	 	 	 	Employee in the nature of compensation, receipt of which is contingent or a Change
in Control of the Company, and to which Section 280G of the Code or any successor
provision thereto applies, shall not exceed an amount equal to one dollar less than
the maximum amount that Employee may receive without becoming subject to the tax
imposed by Section 4999 of the Code or any successor provision or which the Company
may pay without loss of deduction under Section 280G of the Code or any successor
provisions. Present value for purposes of this Agreement shall be calculated in
accordance with Section 1274(b)(2) of the Code or any successor provision. In the
event that the provisions of Section 280G and 4999 of the Code or any successor
provisions are repealed without succession, this Section 3 shall be of no further
force or effect.

	 
	 	4.	 	Effect of Agreement. Nothing contained in this Agreement shall confer upon
Employee any rights to continued employment by the Company or the Bank or shall
interfere in any way with the right of the Company or the Bank to terminate his
employment at any time for any reason. The provisions of this Agreement shall not
affect in any way the right or power of the company to change its business structure
or to effect a merger, consolidation, share exchange or similar transaction, or to
dissolve or liquidate, or sell or transfer all or part of its business or assets.

	 
	 	5.	 	Source of Payment. All payments provided for under this Agreement shall be
paid in cash from he general funds of the Company, and no special or separate fund
shall be established, and no other segregation of assets shall be made to assure
payment, except as provided to the contrary in funded benefits plans. Employee shall
have no right, title or interest whatsoever in or to any investments that the Company
may make to aid the Company in meeting its obligations hereunder. Nothing contained
herein, and no action taken pursuant to the provisions hereof, shall create or be
construed to create a trust of any kind or a fiduciary relationship between the
Company and Employee or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be no greater
than the right of an unsecured creditor of the Company.

	 
	 	6.	 	General Provisions.

	 
	 	(i)	 	Binding Effect. This Agreement shall be binding upon, and inure to the
benefit of, Employee and the Company and their respective permitted successors and
assigns. Neither this Agreement nor any right or interest hereunder shall be
assignable by Employee, his beneficiaries, or legal representatives without the
Company’s prior written consent. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, share exchange or otherwise)
to all or substantially all of the business and/or assets of the Company, by agreement
in form and substance satisfactory to Employee, to expressly

 

 

	 	 	 	assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and shall
entitle Employee to compensation from the Company in the same amount and on the
same terms as he would be entitled to hereunder if he terminated his employment for
Good Reason, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed he date Employee’s
employment was terminated. As used in the Agreement, “Company” shall mean that
company as defined herein and any successor to its business and/or assets as
aforesaid that executes and delivers the agreement provided for in the Section 6(i)
or that otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law.

	 
	 	(ii)	 	Entire Agreement and Amendment. This Agreement replaces any and all previous
agreements, representations and understandings relating to the same or similar subject
matter which the Employee and the Company may have entered into with the Company in
connection with Employee’s employment by the Bank. This Agreement may not be modified
or amended except by an instrument in writing signed by the parties hereto.

	 
	 	(iii)	 	Headings and Gender. The headings of paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

	 
	 	(iv)	 	Governing Law. This agreement has been executed and delivered in the State of
North Carolina, and its validity, interpretation, performance and enforcement shall be
governed by the laws of such state.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day
and year first above stated.

	 	 	 	 	 
	 	TSB FINANCIAL CORPORATION

 	 
	 	By:  	/s/ James H. Barnhardt, Jr.
 	 
	 	 	Chairman 	 
	 	 	 	 
	 
	 	EMPLOYEE:

 	 
	 	/s/ John B. Stedman, Jr

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