8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 29, 2009

SANDERSON FARMS, INC.

(Exact name of registrant as specified in its charter)

Mississippi	1-14977	64-0615843
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

127 Flynt Road Laurel, Mississippi	39443
(Address of principal executive offices)	(Zip Code)

(601) 649-4030

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 5 – Corporate Governance and Management

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

On January 29, 2009, the Compensation Committee of the Registrant’s Board of Directors took the following actions:

(1) The Committee adopted a Bonus Award Program for the Registrant’s salaried employees and accounting trainees effective November 1, 2008. If the Registrant meets net income per share and minimum return on average stockholders’ equity goals for the fiscal year ended October 31, 2009, the program provides for the award of bonuses to eligible participants equal to a percentage of their base salary. The total award a participant can receive has two components: a percentage based on the Registrant’s earnings per share, and a percentage based on the Registrant’s operational performance. A copy of the Bonus Award Program is filed herewith as Exhibit 10 and is incorporated herein by reference.

(2) The Committee ratified the payment of certain miscellaneous items of compensation during fiscal 2008 to the Registrant’s executive officers, as follows:

	Joe F. Sanderson,				D. Michael		James A.
	Jr.,		Lampkin Butts,		Cockrell,		Grimes,
Type	Chairman & CEO		President & COO		Treasurer & CFO		Secretary
Personal Use of Company and Charter Aircraft	$	58,607	$	0	$	0	$	0
Reimbursement of Estimated Income Tax Liability		16,282		82		20		0
Other Travel Related Expenses		991		2,797		0		0
401(k) Plan Matching Contribution		6,973		8,470		9,036		5,079
Life Insurance		233		233		233		233
Total	$	83,086	$	11,582	$	9,289	$	5,312

(3) The Committee adopted changes to its long term equity incentive program, as follows: (a) In the past, the Committee had granted long term incentive awards every other year composed of a combination of performance shares and restricted stock, at a ratio of 75% to 25%, respectively, for the Chief Operating Officer (COO) and the Chief Financial Officer (CFO) and at a ratio of 65% to 35%, respectively, for the Secretary. The Committee decided to change the mix of performance shares and restricted stock for future awards to all program participants to 50%/50%. (b) The Committee changed the length of the performance cycle for future performance share awards from three years to two.

The Committee then approved incentive awards under the Registrant’s Stock Incentive Plan for the COO, CFO and Secretary, incorporating the above changes, as follows:

Name and Title	Performance Shares		Shares of Restricted Stock
Lampkin Butts, President & COO		9,800		9,800
D. Michael Cockrell, Treasurer & CFO		9,800		9,800
James A. Grimes, Secretary		1,450		1,450

The CEO previously indicated to the Compensation Committee and the Board of Directors that he does not intend to accept any additional grants of stock under the Stock Incentive Plan at this time.

The form of Performance Share Agreement relating to the grants of performance shares will be filed with the Registrant’s next 10-Q report and, except for the length of the performance period, as described above, will be substantially similar to the form of agreement that was described in the Registrant’s 8-K report filed on October 31, 2007 (which report is incorporated herein by reference) and filed as Exhibit 10.19 to the Registrant’s Annual Report on Form 10-K for the year ended October 31, 2007. The form of Restricted Stock Agreement relating to the grants of restricted stock will also be filed with the Registrant’s next 10-Q report and will be substantially similar to the form of agreement that was filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on December 2, 2005 (which report is incorporated herein by reference).

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(c) The following exhibit is filed with this Current Report:

Exhibit No.		Description
	10	Sanderson Farms, Inc. Bonus Award Program effective November 1, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SANDERSON FARMS, INC.
(Registrant)

Date: February 4, 2009	By:	/s/ D. Michael Cockrell
		D. Michael Cockrell
		Treasurer and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description
	10	Sanderson Farms, Inc. Bonus Award Program effective November 1, 2008.

EX-10

Exhibit 10

SANDERSON FARMS, INC.

BONUS AWARD PROGRAM

(EXECUTIVE COMMITTEE)

Effective November 1, 2008
Supercedes November 1, 2007

1

SANDERSON FARMS, INC.
Bonus Award Program
Effective Nov. 1, 2008

I. PURPOSE

     The Board of Directors of Sanderson Farms, Inc. has determined that in addition to the Company’s existing competitive and equitable total compensation package, it is desirable to maintain a bonus award program for its salaried employees. The purposes for such a program include:

A.	To encourage excellence and high levels of performance.
B.	To recognize the contributions of the salaried employees to the overall profitability of the Company.
C.	To encourage all employees from every division in the Company to cooperate, share information and work together as a team for the overall benefit of the Company and its shareholders.

II. PARTICIPATION AND MAXIMUM AWARD

     The Executive Committee of Sanderson Farms, Inc. will select and recognize personnel eligible to participate in the bonus award program, and reserves the right to review and change the class of eligible employees at any time. Those now designated include:

A.	Salaried personnel within the corporate structure of Sanderson Farms, Inc., Sanderson Farms, Inc. (Production Division), Sanderson Farms, Inc. (Processing Division) and Sanderson Farms, Inc. (Foods Division).
B.	All salaried management and accounting trainees within the corporate structure.

     The maximum bonus award achievable will vary depending on the employee’s position in the Company.

2

SANDERSON FARMS, INC.
Bonus Award Program

III. ELIGIBILITY

EMPLOYMENT/PARTICIPATION LEVEL

     Except in the case of death, disability or retirement, as set forth below, employees must be employed in a designated position on October 31 of the applicable fiscal year and must have been employed in a designated position for a period of nine months prior to the end of the fiscal year to be eligible to participate in the bonus award program. Base salary for this purpose shall include regular compensation only, and shall not include bonus award payments and any other miscellaneous payments that might be treated as income to the employee.

DEATH, DISABILITY AND RETIREMENT

     If an eligible employee terminates employment with the Company during the fiscal year before October 31 as a result of death, disability or retirement, and had been employed in a designated position for a period of at least nine months, such employee will be eligible to participate in the Bonus Award Program notwithstanding the fact that the employee is not employed on October 31, and the base salary paid to such employee during that portion of the year during which he or she was employed in a designated position will be used to calculate the amount of such employee’s bonus award.

EXTRAORDINARY CIRCUMSTANCES

     Extraordinary circumstances will be subject to review by the Executive Committee.

3

SANDERSON FARMS, INC.
Bonus Award Program

IV. DETERMINATION OF AWARD AND PAYMENT

     Bonus award programs for many corporations focus in some form or another on the real dollar profits earned by the corporation within a given time frame. This method of determining bonuses to be paid to employees recognizes that bonuses should be paid to employees only after a fair and equitable return has been earned for the shareholders who own the company. With this basic philosophy in mind, the Board has determined that no bonuses will be paid under this program unless net return on average stockholders’ equity after consideration is taken for any bonus paid under this program for the year exceeds eight percent (8%). After this minimum threshold is met, the Bonus Award Program will become effective, and bonuses will be paid if the other criteria described in this program are met.

     In recognition of the fact that one of our primary obligations as employees of this Company is to our shareholders, the Board of Directors has determined that net profits made by the consolidated corporations [Sanderson Farms, Inc., Sanderson Farms, Inc. (Production Division), Sanderson Farms, Inc. (Processing Division) and Sanderson Farms, Inc. (Foods Division)] on a per share basis for the period November 1 through October 31 of each year will be the primary basis for bonus awards. The earnings per share for purposes of computing the bonus awards, as set forth herein, shall be computed net of any bonuses awarded and net of any extraordinary, non recurring income items. For all employees of Sanderson Farms other than those management level employees specifically described in this program, this will be the sole basis for determining bonus awards.

     Although the Board has determined that net profits earned for shareholders of the Company should be the primary method of determining the bonuses to be paid to employees, the Board has also recognized that certain management level employees have responsibility for and more direct control over the operating performance and profitability of the Company. In recognition of this fact, the Board has concluded that a certain percentage of such employees’ bonus should be determined by evaluating the operating and profitability performance of the Company relative to its peers and competitors. Therefore, while a portion of such employees’ bonus will be determined by the Company’s earnings per share performance, a portion of such employees’ bonus will also be determined by evaluating the performance of the Company as compared to our peers and competitors by Agri Stats for the poultry division, and certain net income growth targets for managers in the foods division, all as described herein.

     The audited annual financial statements, on a consolidated basis, of Sanderson Farms, Inc. will be the measuring tool for the net return to shareholders portion of the bonus award program. The annual bonus award will be paid to participants in the bonus award program after the outside auditors have completed their annual audit of the corporations, which is usually approximately two (2) months after the end of the fiscal year.

     The Company’s performance relative to its peers and competitors as reported by Agri Stats will be used to evaluate and determine bonuses paid to those employees whose bonuses are determined in part by such performance. The appropriate measuring tool as set forth in this Bonus Award Program as reported by Agri Stats for the twelve (12) month period ending on October 31 each year will be used to determine if a bonus has been earned by such employees.

4

SANDERSON FARMS, INC.
Bonus Award Program

     V. OBJECTIVES AND FORMULAS FOR DETERMINATION OF THE BONUS AWARD

     A. All salaried employees

     All salaried employees will receive a bonus if the net income per share objectives set forth below are met, and if the minimum return on average stockholders equity for the year is earned. Net income shall be computed net of any bonuses awarded and net of any extraordinary, non recurring income items not related to the fiscal year’s operations. The annual audited financial statements, on a consolidated basis, of Sanderson Farms, Inc., will be the measuring tool for this portion of the Bonus Award Program. The annual bonus award will be paid to participants after the outside auditors have completed their annual audit of the consolidated corporation.

     The earnings per share objectives and the respective percentage of employees’ bonus dependent upon EPS earned for the fiscal year (November 1 thru October 31) are as follows:

RANK	PER SHARE RETURN*	PERCENTAGE OF AWARD
Best (1st)	$4.31	100.0%
2nd	$4.26	95.0%
3rd	$4.20	90.0%
4th	$4.15	85.0%
5th	$4.09	80.0%
6th	$4.03	75.0%
7th	$3.98	70.0%
8th	$3.92	65.0%
9th	$3.87	60.0%
10th	$3.81	55.0%
11th	$3.76	50.0%
12th	$3.70	45.0%
13th	$3.65	40.0%
14th	$3.59	35.0%
15th	$3.53	30.0%
16th	$3.48	25.0%
17th	$3.42	20.0%
18th	$3.37	15.0%
19th	$3.31	10.0%
20th	$3.26	5.0%

* Net of bonus and net of extraordinary, non recurring income items not related to the fiscal year’s operations. The per share return targets were calculated using 20,269,408 diluted shares. Adjustments to these targets will be made to reflect changes in the number of shares outstanding resulting from any merger, consolidation, reorganization, re-capitalization, re-incorporation, stock-splits, stock dividend, stock repurchase, or other changes in the corporate structure of the Company. Furthermore, the target per share return numbers were calculated based on a target net return on projected sales. The Company reserves the right to adjust these targets in the event of a substantial fluctuation in sales pounds or dollars during the year.

5

The following formula will be utilized to determine the exact dollar amount of a participant’s bonus award dependent upon EPS performance.

A	=	Gross Award
S	=	Base Salary (excluding bonus award payments and other items of miscellaneous income) of the Participant during that portion of the year in which he or she was employed in a designated position.
P	=	Percentage of award earned based on above schedule
M	=	Percent of salary eligible to be earned as a bonus based on EPS performance.
	FORMULA
		S X P X M = A

6

SANDERSON FARMS, INC.
Bonus Award Program

     As with any awards made under this Bonus Award Program, no bonus will be paid unless total net income return (after bonus) on average stockholders’ equity for the year exceeds eight percent (8%). Net return on average stockholders’ equity will be computed by taking the average of beginning and ending stockholders’ equity for the applicable year, and dividing that number into net income for the year.

     For all employees other than those specifically set forth below, the percent of salary eligible to be earned as a bonus based on EPS performance (“M” in the above formula) is 25%. The management level employees set forth below shall be eligible to earn a bonus based on EPS performance equal to the percent of their salary as set forth below (“M” in the above formula):

CEO	75	%
CFO,	50	%
COO/President	50	%
Dir.-Sales	35	%
Dir.-Production	35	%
Dir.-Processing	35	%

          B. Executive Committee

     Bonus awards under this Bonus Award Program for the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and President, Director of Marketing, Director of Production, Director of Processing, Director of Development, the Controller, the Director of Administration, the Director of Technical Services, the Director of Sales, Director of OD and Corporate Communications and the Chief Financial Analyst will be granted based on a combination of earnings per share performance and general corporate performance as measured against the Company’s peers and competitors as reported by Agri Stats. For purposes of calculating bonuses awarded and paid to individuals in these positions based on operating performance, the corporate Agri Stats measure will be as reported in Agri Stats’ “bottom line analysis, per head” report, net of bonus. Awards made to these individuals based on the operating performance factor will be as follows:

7

	Percentage of Salary			Corporate Agri Stats
	Eligible to be Earned as			Bottom Line
	Bonus on Operating			Report (per head)
	Performance Factors			(Percentage of Award Earned)
TARGET				TOP 3 PLACES
CEO		75	%		100	%
CFO, COO,		50	%		100	%
Dir. Sales, Dir. Proc.		35	%		100	%
Dir.Prod.		35	%		100	%
Controller, Dir. Admn.		25	%		100	%
Dir.Tech Svcs.		25	%		100	%
Dir. Devlop., Chief Analyst		25	%		100	%
Dir. OD/Comm.		25	%		100	%
HIGH AVERAGE				PLACES FOUR AND FIVE
CEO		75	%		66 2/3	%
CFO, COO		50	%		66 2/3	%
Dir.-Sales,		35	%		66 2/3	%
Dir.-Prod., Dir.-Proc.		35	%		66 2/3	%
Controller, Dir.-Admin.,		25	%		66 2/3	%
Dir-Tech Svcs.		25	%		66 2/3	%
Dir. Develop.,Chief Analyst		25	%		66 2/3	%
Dir. OD/Comm.		25	%		66 2/3	%
LOW AVERAGE				PLACES SIX AND SEVEN
CEO		75	%		33 1/3	%
CFO, COO		50	%		33 1/3	%
Dir.-Sales,		35	%		33 1/3	%
Dir.-Prod., Dir.-Proc.,		35	%		33 1/3	%
Controller, Dir.-Admin,		25	%		33 1/3	%
Dir-Tech Svcs.		25	%		33 1/3	%
Dir. Develop.,Chief Analyst		25	%		33 1/3	%
Dir. OD/Comm.		25	%		33 1/3	%

          In the event of significant changes in the number of participants in any Agri Stats report, the Executive Committee may alter the places in each award category to reflect the changes in the number of participants.

          The following formula will be utilized for all employees whose bonus is to be determined in part by factors other than EPS performance to determine that portion of the award dependent upon such factors:

A	=	Gross Award
S	=	Base Salary (excluding bonus award payments and other items of miscellaneous income) of the Participant during that portion of the year in which he or she was employed in a designated position.
P	=	Percentage of award earned based on performance factor
M	=	Percentage of salary eligible to be earned and paid as a bonus on performance factor.
FORMULA
		S X P X M = A

8

SANDERSON FARMS, INC.
Bonus Award Program

VI. PARAMETERS

     This bonus award program has been designed to encourage teamwork and cooperation among all of the divisions of Sanderson Farms, and to ensure that Sanderson Farms is consistently among the leaders in profitability in the broiler and prepared foods industry. The program is also designed to pay a bonus to employees only after the Company has returned to its shareholders a fair and equitable return.

     1. In the event of extraordinary operating conditions that were unforeseen when setting the objectives and percentages in this bonus award program, such circumstances will be considered by the Executive Committee of Sanderson Farms, Inc. in making awards.

     2. In the event of possible reporting errors affecting the ranking, such circumstances will be considered by the Executive Committee of Sanderson Farms, Inc. in making awards.

     3. In the event changes in laws or accounting procedures affect the ranking, such circumstances will be considered by the Executive Committee of Sanderson Farms, Inc. in making awards.

     4. The per share return targets were calculated using 20,269,408 diluted shares. Adjustments to these targets will be made to reflect changes in the number of shares outstanding resulting from any merger, consolidation, reorganization, re-capitalization, re-incorporation, stock-splits, stock dividend, stock repurchase, or other changes in the corporate structure of the Company. Furthermore, the target per share return numbers were calculated based on a target net return on projected sales. The Company reserves the right to adjust these targets in the event of a substantial fluctuation in sales pounds or dollars during the year.

9