Document:

exv10w2

Exhibit 10.2

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of September 15, 2009 (the “Employment Agreement”), by
and between Sanderson Farms, Inc., a Mississippi corporation (the “Company”), and Lampkin
Butts (the “Executive”).

     WHEREAS, the Executive possesses skills, experience and knowledge that are of significant
value to the Company;

     WHEREAS, the Company and the Executive desire to enter into this Employment Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid
consideration the sufficiency of which is acknowledged, the parties hereto agree as follows:

     Section 1. Employment.

     1.1. Term. Subject to Section 3 hereof, the Company agrees to employ the Executive,
and the Executive agrees to be employed by the Company, in each case pursuant to this Employment
Agreement, for a period commencing on the date set forth above and ending on the termination of the
Executive’s employment in accordance with Section 3 hereof (the “Term”).

     1.2. Title; Duties; Place of Performance. During the Term, the Executive shall serve
as President and Chief Operating Officer of the Company and such other positions as an officer or
director of the Company and such Affiliates of the Company as the Executive and the board of
directors of the Company (the “Board”) or an appropriate committee thereof shall mutually
agree from time to time. In such positions, the Executive shall perform such duties, functions and
responsibilities during the Term as directed by the Board and shall operate within the guidelines,
plans or policies as may be established or approved by the Company from time to time. The
Executive’s principal places of employment during the Term shall be Laurel, Mississippi, except for
reasonable travel as required in connection with the business and affairs of the Company.

     1.3. Outside Affairs. During the Term, the Executive shall devote such time,
attention, and diligence to the business and affairs of the Company as are necessary to the
satisfactory performance of his duties to the Company, and shall conform to and comply with the
lawful and reasonable directions and instructions given to him by the Board, consistent with
Paragraph 1.2 hereof. During the Term, the Executive shall use his best efforts to promote and
serve the interests of the Company Notwithstanding this Paragraph, the Executive may during the
Term: (i) engage in charitable and community activities and (ii) manage personal and family
investments and affairs, in each case so long as such activities do not violate the terms of this
Employment Agreement or interfere with the satisfactory performance of his duties hereunder. In
addition, without limiting the generality of the foregoing, during the Term the Executive shall not
serve on the boards of directors of any for-profit entity without the prior consent of the Board or
an appropriate committee thereof.

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     Section 2. Compensation.

     2.1. Salary. As compensation for the performance of the Executive’s services
hereunder, the Company shall pay to the Executive a salary at an initial annual rate of Five
Hundred Seventy-Nine Thousand Nine Hundred Eighty-Four Dollars ($579,984), payable with the same
frequency and on the same basis that the Company normally makes salary payments to other executive
personnel of the Company (the “Base Salary”). The Compensation Committee of the Board (the
“Compensation Committee”) shall review and reassess the Base Salary at least annually and
may elect to change it, subject to Paragraph 3.2 hereof. Any resolution of the Compensation
Committee changing the Base Salary shall automatically amend and be incorporated into this
Employment Agreement.

     2.2. Annual Bonus. The Executive shall be entitled to any cash bonus award payable to
him in accordance with any bonus award program adopted by the Compensation Committee.

     2.3. Benefits. During the Term, the Executive shall be eligible to participate in the
health insurance, retirement and other perquisites and benefits of the Company as in effect from
time to time.

     2.4. Vacation and Sick Pay. The Executive will be entitled to paid vacation and sick
leave during the Term in accordance with the terms and conditions of the Company’s vacation and
sick leave policies as in effect from time to time.

     2.5. Holidays. The Executive shall be entitled to all paid holidays given to the
Company’s executive employees in accordance with Company policy.

     2.6. Business and Entertainment Expenses. The Company shall promptly pay or reimburse
the Executive for all reasonable business out-of-pocket expenses that the Executive incurs during
the Term in performing his duties under this Employment Agreement, upon presentation of
documentation and in accordance with the expense reimbursement policy of the Company in effect from
time to time. With respect to any such payment or reimbursement that would otherwise constitute a
deferral of compensation within the meaning of Section 409A (“Section 409A”) of the
Internal Revenue Code of 1986, as amended (the “Code”), the payment or reimbursement will
be made no later than the 15th day of the third month following the later of the end of
the calendar year or the end of the Company’s fiscal year in which the expense was incurred.

     2.7. Indemnification. To the maximum extent permitted by applicable law and the
Company’s Articles of Incorporation, as amended, and Bylaws, the Company shall indemnify the
Executive for losses or damages incurred by the Executive as a result of all causes of action
arising against him from the Executive’s performance of duties for the benefit of the Company. The
Executive shall be covered under any directors’ and officers’ insurance that the Company maintains
for its directors and other officers in the same manner and on the same basis as the Company’s
directors and other officers.

     2.8. Supplemental Disability Plan. The Executive is hereby designated a “Participant”
pursuant to Section 1.6 of the Sanderson Farms, Inc. Supplemental Disability Plan effective
September 1, 2008.

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     Section 3. Employment Termination.

     3.1. Termination of Employment. The Company may terminate the Executive’s employment
for any reason during the Term, and the Executive may voluntarily terminate his employment for any
reason during the Term, in each case (other than a termination by the Company for Cause) at any
time upon not less than 30 days’ notice to the other party specifying the reason therefor, if
applicable to the termination. Such notice may not be given until any other notice required by
Paragraph 3.2(a) or (b) has been given. The Executive’s employment shall automatically and
immediately terminate upon the Executive’s death. Upon the termination of the Executive’s
employment with the Company for any reason, the Executive shall be entitled to any Base Salary
earned but unpaid through the date of termination, any accrued but unpaid benefits, and any
unreimbursed expenses in accordance with Paragraph 2.6 hereof (collectively, the “Accrued
Amounts”). If the Executive’s employment terminates due to his death, the Company shall pay
the Accrued Amounts to his designated beneficiary (such beneficiary to be designated in writing by
the Executive, or in the absence of a separate written designation, such beneficiary shall be
Executive’s spouse or, if there is no spouse, his estate), and shall also pay to such beneficiary
the Executive’s Base Salary at the rate in effect on the date of his death according to the
Company’s regular payroll schedule from the date of his death until the first anniversary thereof.
Nothing in this Agreement shall entitle the Executive to the Severance Payments and other benefits
provided for in Paragraph 3.2 if his employment terminates due to his death, disability or
retirement.

     3.2. Termination by the Company Other Than For Cause or Poor Performance; Change in
Control; Termination by the Executive for Good Reason. If (i) prior to a Change in Control,
the Executive’s employment is terminated by the Company during the Term other than for Cause or
Poor Performance, (ii) simultaneously with or after a Change in Control, the Executive’s employment
is terminated by the Company other than for Cause, or (iii) the Executive resigns for Good Reason
within 30 days following the deadline set forth in Paragraph 3.2(a)(C) by which the Company must
cure the Resignation Condition (the “Cure Deadline”), then in addition to the Accrued Amounts the
Executive shall be entitled to the following payments and benefits: (a) an amount equal to two
times the Executive’s annual Base Salary in effect at the time of termination, and (b) an amount
equal to two times fifty percent of the maximum bonus opportunity available to the Executive (had
the Executive’s employment not terminated) under any bonus award program in effect for the fiscal
year in which termination occurs (based on the bonus plan (if any) in effect for that year) (the
payments provided for in clauses (a) and (b) are referred to as the “Severance Payments”)
and (c) the continuation, on the same terms as an active employee, of medical benefits the
Executive would otherwise be eligible to receive as an active employee of the Company for
twenty-four (24) months or, if earlier, until such time as the Executive becomes eligible for
substantially similar medical benefits from a subsequent employer. The Severance Payments shall be
payable in a lump sum in immediately available funds as soon as practicable following the
Executive’s termination or resignation, but in any event no later than the 45th day
after the termination of the Executive’s employment. Notwithstanding the preceding sentence, if
payment of the Severance Payments as aforesaid would cause the imposition of an excise tax on all
or any part of the Severance Payments pursuant to Section 409A of the Code, then payment of all or
such part of the Severance

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Payments shall be delayed or advanced to the earliest practicable date that avoids the
imposition of such excise tax. The Company’s obligations to make the Severance Payments and
provide the benefits described in clause (c) above shall be conditioned upon: (i) the Executive’s
continued compliance with his obligations under Section 4 of this Employment Agreement and (ii) the
Executive’s execution, delivery and non-revocation of a valid and enforceable release of claims
arising in connection with the Executive’s employment and termination of employment with the
Company and its Affiliates (the “Release”) substantially in the form attached hereto as
Exhibit A. In the event that the Executive breaches any of the covenants set forth in Section 4 of
this Employment Agreement, the Executive will immediately return to the Company any portion of the
Severance Payments that has been paid to the Executive pursuant to this Section 3 and Executive’s
entitlement to continued medical benefits shall immediately cease.

     For purposes of this Employment Agreement:

     (a) “Good Reason” shall mean (A) one of the following (each, a “Resignation
Condition”) has occurred: (i) a material breach by the Company of any of the covenants in this
Employment Agreement, (ii) any reduction in the Executive’s Base Salary or target bonus
opportunity, other than a reduction that is part of a salary and bonus opportunity reduction
program affecting senior executives of the Company generally, (iii) the relocation of the
Executive’s principal place of employment, without the Executive’s consent, that would increase the
Executive’s one-way commute by more than 40 miles, (iv) assignment of duties or responsibilities
inappropriate for an executive officer, except as a result of the Executive’s Disability or ill
health, or (v) after a Change in Control, the alteration of the Executive’s position in a way that
significantly changes his status, offices, reporting requirements, authority, daily routine or
responsibilities as they existed before the Change in Control, whether or not the Executive’s title
and location remain the same, which results in a material diminution in such position; (B) the
Executive has given the Company written notice of the occurrence of the Resignation Condition
within 30 days after the Resignation Condition occurred; and (C) the Company has not cured the
Resignation Condition by the date that is 30 days after receiving the notice from the Executive
required by clause (B) of this Paragraph.

     (b) “Cause” means (1) any conviction of, or plea of guilty or nolo contendere to (x)
any felony (except for vehicular-related felonies, other than vehicular manslaughter or vehicular
homicide) or (y) any crime (whether or not a felony) involving dishonesty, fraud, or breach of
fiduciary duty; (2) willful misconduct by the Executive; (3) failure or refusal, other than by
reason of Disability or ill health, to perform faithfully and diligently the usual and customary
duties of his employment; (4) failure or refusal to comply with the reasonable policies, standards
and regulations of the Company which, from time to time, may be established and disseminated; (5) a
material breach by the Executive of any terms related to his employment in any applicable
agreement; or (6) the Executive engaging in any Prohibited Activity (as defined below);
provided that the conduct described in clauses (2) through (5) shall not constitute Cause
unless the Company has provided the Executive with written notice of such conduct and the Executive
has failed to cure such conduct within five business days of receiving such notice. Following a
Change in Control, the duties of the Executive’s employment and policies, standards and regulations
of the Company referred to in Paragraphs 3.2(b)(3) and (4) above shall not be more onerous than
those in place before the Change in Control.

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     (c) As used in this Employment Agreement, conduct is “cured” if, within the applicable time
period, its effect is reversed, to the extent it is capable of being reversed, and the conduct
ceases to continue; provided, however, that conduct shall be deemed to be unable to be
“cured” if such conduct has had or would have, individually or in the aggregate, a material adverse
effect on the Company and its subsidiaries, taken as a whole.

     (d) “Prohibited Activity” means engaging in conduct proscribed by Section 4.

     (e) “Poor Performance” means the failure by the Executive to perform the duties of his office
to the satisfaction of the Board or the Chief Executive Officer of the Company as approved by the
Board. Poor performance shall be exclusively determined by the Board or the Chief Executive
Officer as approved by the Board.

     (f) “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

     (1) The acquisition (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or indirectly controls,
is controlled by, or is under common control with the Company) by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than 50 percent of the then outstanding
shares of common stock of the Company; or

     (2) Approval by the stockholders of the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the assets of the
Company or approval by the Board of the acquisition by the Company of assets of another
corporation (each of the foregoing, a “Business Combination”), in each case, unless,
following such Business Combination, the individuals and entities who were the beneficial
owners, respectively, of the outstanding common stock of the Company immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50 percent of
the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation surviving or resulting from such
Business Combination (or of a corporation which as a result of such transaction controls the
Company or owns all or substantially all of the Company’s assets either directly or through
one or more subsidiaries), in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the common stock of the Company; or

     (3) individuals who, as of the date of this Employment Agreement, constitute the Board
of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director subsequent to such
date whose election, or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result
of an actual or threatened election

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contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

     (4) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

     (g) “Disability” has such meaning as determined by the Board from time to time.

     3.3. Exclusive Remedy. The foregoing payments upon termination of the Executive’s
employment shall constitute the exclusive payments due the Executive upon a termination of his
employment under this Employment Agreement.

     3.4. Resignation from All Positions. Upon the termination of the Executive’s
employment with the Company for any reason, the Executive shall be deemed to have resigned, as of
the date of such termination, from all positions he then holds as an officer, director, employee
and member of the Board (and any committee thereof) and the boards of all of its subsidiaries.

     3.5. Cooperation. Following the termination of the Executive’s employment with the
Company for any reason, the Executive agrees to reasonably cooperate with the Company upon
reasonable request of the Board and to be reasonably available to the Company with respect to
matters arising out of the Executive’s services to the Company and its subsidiaries. The Company
shall reimburse the Executive for expenses reasonably incurred by him in connection with such
matters as agreed by the Executive and the Board.

     3.6. Section 409A. Notwithstanding the foregoing provisions of this Employment
Agreement, if as of the date of termination of the Executive’s employment, he is a “specified
employee” within the meaning of Section 409A of the Code (as determined in accordance with the
methodology established by the Company as in effect on such date of termination), amounts or
benefits that are deferred compensation subject to Section 409A of the Code, as determined in the
reasonable discretion of the Company, that would otherwise be payable or provided during the
six-month period immediately following termination (other than the Accrued Amounts), shall instead
be paid or provided, with interest on any delayed payment at the prime lending rate prevailing at
such time, as published in the Wall Street Journal, on the first business day after the date that
is six months following Executive’s “separation from service” within the meaning of Section 409A of
the Code (or, if earlier, the Executive’s date of death).

     3.7. Golden Parachute Excise Tax Provisions. In the event it is determined that any
payment or benefit (within the meaning of Section 280G(B)(2)) of the Code to the Executive or for
his benefit paid or payable or distributed to or distributable pursuant to the terms of this
Employment Agreement or otherwise in connection with, or arising out of, his employment
(“Termination Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter collectively referred to
as the “Golden Parachute Excise Tax”), then the total Termination Payments shall be reduced to the
extent the payment of such amounts would no longer cause any portion of the Executive’s total
termination benefits to constitute an “excess” parachute payment under

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Section 280G of the Code and by reason of such excess parachute payment the Executive would be subject
to an excise tax under Section 4999(a) of the Code, but only if the Executive (or the Executive’s
tax advisor) determines that the after-tax value of the termination benefits calculated with the
foregoing restriction exceeds that calculated without the foregoing restriction. Except as
otherwise expressly provided herein, all determinations under this Paragraph 3.7 shall be made at
the expense of the Company by a nationally recognized public accounting or consulting firm selected
by the Company and subject to the approval of Executive, which approval shall not be unreasonably
withheld. Such determination shall be binding upon Executive and the Company.

     3.8. Company Withholding. Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the determination of the Executive or his advisor
pursuant to Paragraph 3.7 hereof, a Golden Parachute Excise Tax will be imposed on any Termination
Payment or Payments, the Company shall pay to the applicable government taxing authorities as
Golden Parachute Excise Tax withholding, the amount of the Golden Parachute Excise Tax that the
Company has actually withheld from the Termination Payment or Payments.

     Section 4. Unauthorized Disclosure; Non-Solicitation; Non-Competition; Proprietary
Rights.

     4.1. Definitions. For purposes of this Agreement, the following terms shall have the
meaning ascribed to them:

               (a) “Look Back Period” shall mean the two (2) years preceding the termination of Executive’s
employment by Company, whatever the cause;

               (b) “Restricted Enterprise” shall mean any person or entity engaged, directly or indirectly,
in (or intends or proposes to engage in, or has been organized for the purpose of engaging in) any
aspect of operations substantially similar to those engaged in by the Company during the Look Back
Period. The parties understand, that at the time of signing, the Company is engaged in the
production, processing, marketing and distribution of fresh and frozen chicken and other prepared
chicken items;

               (c) “Restriction Period” shall mean during Executive’s employment (whether during the Term or
thereafter) and for the two (2) years following the termination of Executive’s employment by
Company, whatever the cause;

               (d) “Potential Customer” shall mean a person or business the Executive solicited on behalf of
the Company or its Affiliates or about whom the Executive gained Confidential Information during
the Look Back Period and who has not conclusively decided not to do business with the Company at
the time of enforcement;

               (e) “Affiliate” means the Company’s successors in interest, affiliates (as defined in Rule
12b-2 under Section 12 of the Exchange Act), sister companies or divisions, subsidiaries, parents,
purchasers, or assignees.

     4.2. The Company. The Company will give Executive Confidential Information, as
defined below, and the opportunity to develop goodwill with the Company’s customers. The parties
intend that the protective covenants in this Section 4 to be ancillary to the Company’s

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promises and obligations under this Paragraph 4.2. The parties further intend that Company’s
promises constitute a positive contract and that a court construe Company’s promises and
Executive’s obligations as creating bi-lateral obligations.

     4.3. Unauthorized Disclosure. “Confidential Information,” as defined herein, means
legally-protectable information relating to the affairs of the Company and/or its Affiliates that
is maintained as confidential by the Company, and that is not authorized for disclosure to the
public, including, without limitation; technical information, ideas, know-how, and intellectual
property; business and marketing plans and proposals; research and development; strategies;
customer and supplier lists and information; software; product, pricing and cost information;
promotions; development; financing; expansion plans; business policies and practices of the Company
and its Affiliates; and information about the business affairs of third parties (including, but not
limited to, customers) that such third parties provide to Company in confidence. Confidential
Information includes trade secrets, but a piece of information need not qualify as a trade secret
in order to be protected. The Executive agrees that at all times during the Executive’s employment
with the Company and thereafter, the Executive shall not disclose, communicate, or furnish to any
other person any Confidential Information except for Permitted Disclosures; or use for the
Executive’s or any other person’s account any Confidential Information except for Permitted
Disclosures. Provided, however, that if a time limitation on this restriction is required in order
for it to be enforceable, then this restriction shall be limited to a period of three (3) years
following the termination of Executive’s employment (whatever the cause) for any Confidential
Information that does not qualify as a trade secret. For trade secrets, this restriction shall
extend as long as the information continues to qualify as a trade secret. Upon termination of the
Executive’s employment with the Company, the Executive shall promptly supply to the Company all
property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence,
tapes, disks, cards, surveys, maps, logs, machines, technical data and any other product, material,
data or document which has been produced by, received by or otherwise submitted to the Executive
during or prior to the Executive’s employment with the Company, and any copies thereof in his
possession, custody or control (whether in electronic, “hard” or other format). “Permitted
Disclosure” means the disclosure of Confidential Information that (i) is made with the prior
written consent of the Company, (ii) is required to be disclosed by law or legal process (of which
Executive shall have given as much advance written notice to the Company as is practicable under
the circumstances), or (iii) is made in the course of the Executive’s employment with the Company,
but only to the extent the Executive reasonably deems such disclosure necessary or appropriate to
perform the Executive’s responsibilities on behalf of the Company or otherwise advance the
interests of the Company.

     4.4. Non-Competition. By and in consideration of the Company’s entering into this
Employment Agreement and the payments to be made and benefits to be provided by the Company
hereunder, and in further consideration of the Company’s agreement to provide Confidential
Information and the ability to develop goodwill to the Executive (as set forth in Paragraph 4.2),
the Executive agrees that the Executive shall not during the Restriction Period, anywhere in the
United States, provide services that are the same or substantially similar to those Executive
performed for the Company during the Look Back Period or which will probably or inevitably result
in the use or disclosure of Company’s Confidential Information to any Restricted Enterprise;
provided, that in no event shall ownership of two percent (2%) or less of the outstanding
securities of any class of any issuer whose securities are registered under the

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Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this Paragraph
4.4, so long as the Executive does not have, or exercise, any rights to manage or operate the
business of such issuer other than rights generally held by all stockholders; and provided
further, that the covenant contained in this Paragraph 4.4 shall not apply if the Company
terminates the Executive’s employment for Poor Performance. During the Restriction Period, upon
request of the Company, the Executive shall notify the Company of the Executive’s then-current
employment status.

     4.5. Non-Solicitation of Employees. During the Restriction Period, the Executive
shall not, other than on behalf of the Company, solicit or assist any person to solicit for
employment or hire any person who is, or within four months prior to the date of such solicitation
or hire was, a director, officer or employee of the Company or any of its subsidiaries, provided
that this Paragraph 4.5 shall not apply to solicitation of a person who responds to general
advertising.

     4.6. Non-Solicitation of Customers. During the Restriction Period, the Executive
shall not, on behalf of himself or any other person;

     (a) Call upon any of the customers or clients of the Company or its Affiliates or any
Potential Customer for the purpose of soliciting or providing any product or service that competes
or could compete with any product or service provided by the Company or its Affiliates;

     (b) Divert or take away, or attempt to take away any of the customers, clients, business or
patrons of the Company or its Affiliates ; or

     (c) Encourage any of the customers, clients, or patrons of the Company or its Affiliates to
cease doing business with the Company.

     4.7. Extension of Restriction Period. The Restriction Period shall be tolled for any
period during which the Executive is in breach of any of Paragraphs 4.4, 4.5, or 4.6 hereof.

     4.8. Blue Pencil. If any court of competent jurisdiction shall at any time deem the
duration or the geographic scope of any of the provisions of this Section 4 unenforceable, the
other provisions of this Section 4 shall nevertheless stand and the duration and/or geographic
scope set forth herein shall be deemed to be the longest period and/or greatest size permissible by
law under the circumstances, and the parties hereto agree that such court shall reduce the time
period and/or geographic scope to permissible duration and/or size. The parties further authorize
a court of competent jurisdiction to reduce or otherwise modify the scope of activities restrained
by Section 4 should the provisions of this Agreement be deemed overly broad in the scope of
activities restrained by them.

     4.9. Remedies. The Executive agrees that any breach of the terms of this Section 4
would result in irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any
threat of breach, the Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any
and all persons acting for and/or with the Executive, without having to

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prove damages, in addition to any other remedies to which the Company may be entitled at law
or in equity, including, without limitation, the obligation of the Executive to return to the
Company any Severance Payments paid pursuant to Paragraph 3.2. One Thousand Dollars ($1,000.00) is
the agreed amount for the bond to be posted if an injunction is sought by Company to enforce the
restrictions in this Agreement on Executive. The terms of this Paragraph 4.9 shall not prevent the
Company from pursuing any other available remedies for any breach or threatened breach hereof,
including, without limitation, the recovery of damages from the Executive. The Executive and the
Company further agree that the provisions of the covenants contained in this Section 4 are
reasonable and necessary to protect the businesses of the Company and its Affiliates because of the
Executive’s access to Confidential Information and his material participation in the operation of
such businesses.

     4.10. Notice and Early Resolution Conference. During the Restriction Period,
Executive will give Company written notice at least thirty (30) days prior to going to work for a
Restricted Enterprise, will provide Company with a description of the duties and activities of the
new position, and will participate in a mediation or in-person conference if requested to do so by
Company within thirty days of such a request in order to help avoid unnecessary legal disputes.

     4.11. Resolution of Rights Regarding Confidential Information and Goodwill. Executive
has received Confidential Information and/or developed business goodwill with customers through, or
in the course of, past association with Company or an Affiliate. The nature and scope of
restrictions, necessary to protect the parties’ interests related to these past events, is
unresolved. The parties agree that an important purpose of this Agreement is to resolve such
uncertainties and to settle such disputes and provide a set of predictable boundaries upon which
they may rely to avoid future disputes over what jobs or conduct will result in misappropriation of
Confidential Information, conversion of customer goodwill, or similar irreparable harm. To settle
and dispose of any dispute regarding these issues, Executive agrees not to sue or otherwise pursue
a legal action to avoid the agreed-upon restrictions in the Agreement.

     4.12. State-Specific Modifications.

               (a) Georgia. If, notwithstanding the Mississippi choice of law provision, Georgia law
is deemed to apply, then: (1) The Non-Competition Provision in Paragraph 4.4 shall be rewritten as
follows: Executive agrees that during the Restriction Period, Executive shall not, anywhere in the
United States, provide managerial services or serve in a managerial position for any enterprise
devoted to the production, processing, marketing and distribution of fresh and frozen chicken and
other prepared chicken items, other than the Company and its Affiliates; (2) the Non-Solicitation
of Customers provision in Paragraph 4.6 shall be rewritten as follows: Executive agrees that during
the Restriction Period, Executive will not, in any way, directly or indirectly, solicit, divert, or
take away, or attempt to solicit, divert or take away, Company customers that Executive solicited
while he was employed with Company, to sell to such customer any product that Company provides at
the time Executive signs this Agreement; unless an authorized Company officer gives Executive
written permission to do so. The parties agree this restriction is inherently reasonable because
it is limited to the places or locations where the customer is doing business at the time; (3) The
tolling provision in Paragraph

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4.7 shall not apply; (4) the covenant not to sue in Paragraph 4.11 shall not apply; and (5)
the jury trial waiver in Paragraph 7.4(b) shall not apply.

               (b) Louisiana. If, notwithstanding the Mississippi choice of law provision, Louisiana
law is deemed to apply, then the provisions of Paragraphs 4.4 and 4.6 shall be limited within the
state of Louisiana to the parishes identified on Appendix “A”, attached hereto and incorporated
herein for all purposes. Provided, however, that nothing in Agreement may be construed to prohibit
the enforcement of Paragraphs 4.4 and 4.6 in accordance with their terms in states outside of
Louisiana.

               (c) North Carolina. If, notwithstanding the Mississippi choice of law provision,
North Carolina law is deemed to apply, then the jury trial waiver in Paragraph 7.4(b) shall not
apply.

     Section 5. Representation. The Executive represents and warrants that (i) he
is not subject to any contract, arrangement, policy or understanding, or to any statute,
governmental rule or regulation, that in any way limits his ability to enter into and fully perform
his obligations under this Employment Agreement and (ii) he is not otherwise unable to enter into
and fully perform his obligations under this Employment Agreement.

     Section 6. Withholding; Taxes. All amounts paid to the Executive under this
Employment Agreement during or following the Term shall be subject to withholding and other
employment taxes imposed by applicable law. The Executive shall be solely responsible for the
payment of all taxes relating to the payment or provision of any amounts or benefits paid to the
Executive hereunder or otherwise.

     Section 7. Miscellaneous.

     7.1. Amendments and Waivers. This Employment Agreement and any of the provisions
hereof may be amended, waived (either generally or in a particular instance and either
retroactively or prospectively), modified or supplemented, in whole or in part, only by written
agreement signed by the parties hereto; provided, that the observance of any provision of
this Employment Agreement may be waived in writing by the party that will lose the benefit of such
provision as a result of such waiver. The waiver by any party hereto of a breach of any provision
of this Employment Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach, except as otherwise explicitly
provided for in such waiver. Except as otherwise expressly provided herein, no failure on the part
of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy. This
Employment Agreement may be amended from time to time with the consent of the Executive, which
shall not be unreasonably withheld, as may be necessary or appropriate to avoid adverse tax
consequences to the Executive under Section 409A of the Code.

     7.2. Assignment. This Employment Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive, and any purported assignment by

11

 

the Executive in violation hereof shall be null and void. The Agreement will inure to the
benefit of Company’s Affiliates without need of any further authorization or agreement from
Executive. Except as may be expressly provided herein, nothing in this Employment Agreement shall
confer upon any person not a party to this Employment Agreement, or the legal representatives of
such person, any rights or remedies of any nature or kind whatsoever under or by reason of this
Employment Agreement.

     7.3. Notices. Unless otherwise provided herein, all notices, requests, demands,
claims and other communications provided for under the terms of this Employment Agreement shall be
in writing. Any notice, request, demand, claim or other communication hereunder shall be sent by
(i) personal delivery (including receipted courier service) or overnight delivery service, (ii)
facsimile during normal business hours, with confirmation of receipt, to the number indicated,
(iii) reputable commercial overnight delivery service courier or (iv) registered or certified mail,
return receipt requested, postage prepaid and addressed to the intended recipient as set forth
below:

     (a) If to the Executive, to the most recent home address that the Company maintains in its
records for the Executive,

     (b) If to the Company, to:

Sanderson Farms, Inc.

127 Flynt Road

Laurel, Mississippi 39443

Attention: Chief Executive Officer

Facsimile: (601) 426-1461

Telephone: (601) 649-4030

     (c) With a copy to:

Wise Carter Child & Caraway, P.A.

Suite 600, Heritage Building

401 E. Capitol Street

Jackson, Mississippi 39201

Attention: Henry E. Chatham, Jr.

Facsimile: (601) 968-5593

and

Fishman Haygood Phelps

     Walmsley Willis & Swanson, L.L.P.

201 St. Charles Avenue

46th Floor

New Orleans, Louisiana 70170

Attention: Louis Y. Fishman

Facsimile: (504) 310-0255

12

 

     Any party may change its facsimile number or its address to which notices, requests, demands,
claims and other communications hereunder are to be delivered by giving the other parties hereto
notice in the manner then set forth.

     7.4. Governing Law; Forum.

     (a) Governing Law. This Employment Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be governed by, the
laws of the state of Mississippi, without giving effect to the conflicts of law principles thereof.

     (b) Forum. Each of the parties hereto: (i) agrees that the exclusive venue for any
legal action arising from this Agreement shall be the Chancery Court for Jones County, Mississippi
or the United States District Court for the Southern District of Mississippi; (ii) consents to
submit itself to the personal jurisdiction of the courts of the State of Mississippi (the
“Specified Courts”) in the event any dispute arises out of this Employment Agreement; (iii)
agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from such court; (iv) agrees that it will not bring any action relating to this
Employment Agreement or any of the transactions contemplated by this Employment Agreement in any
court other than the Specified Courts; and (v) to the fullest extent permitted by law, consents to
service being made through the notice procedures set forth in Paragraph 7.3. Each party hereto
hereby agrees that, to the fullest extent permitted by law, service of any process, summons, notice
or document by U.S. registered mail to the respective addresses set forth in Paragraph 7.3 shall be
effective service of process for any suit or proceeding in connection with this Employment
Agreement or the transactions contemplated hereby. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS EMPLOYMENT AGREEMENT OR THE ACTIONS
OF THE PARTIES HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

     7.5. Severability. Whenever possible, each provision or portion of any provision of
this Employment Agreement, including those contained in Section 4 hereof, will be interpreted in
such manner as to be effective and valid under applicable law but the invalidity or
unenforceability of any provision or portion of any provision of this Employment Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of this Employment
Agreement in that jurisdiction or the validity or enforceability of this Employment Agreement,
including that provision or portion of any provision, in any other jurisdiction. In addition,
should a court determine that any provision or portion of any provision of this Employment
Agreement, including those contained in Section 4 hereof, is not reasonable or valid, either in
period of time, geographical area, or otherwise, the parties hereto agree that such provision
should be interpreted and enforced to the maximum extent which such court deems reasonable or
valid.

     7.6. Entire Agreement. From and after the date hereof, this Employment Agreement
constitutes the entire agreement between the parties, and supersedes all prior representations,

13

 

agreements and understandings (including any prior course of dealings), both written and oral,
between the parties with respect to the subject matter hereof and thereof.

     7.7. Counterparts. This Employment Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.

     7.8. Binding Effect. This Employment Agreement shall inure to the benefit of, and be
binding on, the successors and assigns of each of the parties, including, without limitation, the
Executive’s heirs and the personal representatives of the Executive’s estate and any successor to
all or substantially all of the business and/or assets of the Company.

     7.9. General Interpretive Principles. The headings of the sections, paragraphs,
subparagraphs, clauses and subclauses of this Employment Agreement are for convenience of reference
only and shall not in any way affect the meaning or interpretation of any of the provisions hereof.
Words of inclusion shall not be construed as terms of limitation herein, so that references to
“include”, “includes” and “including” shall not be limiting and shall be regarded as references to
non-exclusive and non-characterizing illustrations.

     7.10. Mutual Nondisparagement. Executive agrees that following the termination of his
employment, whatever the cause, he will not make any disparaging statements about the Company or
any statements designed to damage the reputation of the Company. The Company agrees that,
following the termination of Executive’s employment, whatever the cause, the Company’s Board of
Directors, executives and upper management will not make any disparaging statements about the
Executive or any statements designed to damage the reputation of the Executive. Notwithstanding
the foregoing, nothing in this Paragraph 7.10 shall prohibit either party from making truthful
statements when required by order of a court or other governmental body having jurisdiction.

     IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as of the date
first written above.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SANDERSON FARMS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Lampkin Butts	 	 	 	By:	 	/s/ Joe F. Sanderson, Jr.	 	 
	 	 	 	 	 	 	 	 	 
	Lampkin Butts

	 	 	 	 	 	Name:
	 	Joe F. Sanderson, Jr.	 	 
	 

	 	 	 	 	 	Title:
	 	Chairman of the Board and Chief Executive Officer	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                   /s/ Phil K. Livingston
 	 
	 	 	Name:  	Phil K. Livingston 	 
	 	 	Title:  	Chairman, Compensation Committee of the Board of
Directors 	 

14

 

	 	 	 	 	 

Exhibit A

WAIVER AND RELEASE OF CLAIMS

	1.	 	General Release. In consideration of the payments and benefits to be made under the
Employment Agreement, dated as of September 15, 2009, to which Sanderson Farms, Inc. (the
“Company”) and Lampkin Butts (the “Executive”) are parties (the
“Employment Agreement”), the Executive, with the intention of binding the Executive
and the Executive’s heirs, executors, administrators and assigns, does hereby release, remise,
acquit and forever discharge the Company and each of its subsidiaries and affiliates (the
“Company Affiliated Group”), their present and former officers, directors, executives,
agents, shareholders, attorneys, employees and employee benefits plans (and the fiduciaries
thereof), and the successors, predecessors and assigns of each of the foregoing (collectively,
the “Company Released Parties”), of and from any and all claims, actions, causes of
action, complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind or
nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or
otherwise and whether now known, unknown, suspected or unsuspected which the Executive,
individually or as a member of a class, now has, owns or holds, or has at any time heretofore
had, owned or held, against any Company Released Party (an “Action”) arising out of or
in connection with the Executive’s service as an employee, officer and/or director to any
member of the Company Affiliated Group (or the predecessors thereof), including (i) the
termination of such service in any such capacity, (ii) for severance or vacation benefits,
unpaid wages, salary or incentive payments, (iii) for breach of contract, wrongful discharge,
impairment of economic opportunity, defamation, intentional infliction of emotional harm or
other tort and (iv) for any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning harassment, discrimination, retaliation
and other unlawful or unfair labor and employment practices), any and all Actions based on the
Employee Retirement Income Security Act of 1974 (“ERISA”), and any and all Actions
arising under the civil rights laws of any federal, state or local jurisdiction, including,
without limitation, Title VII of the Civil Rights Act of 1964 (“Title VII”), the
Americans with Disabilities Act (“ADA”), Sections 503 and 504 of the Rehabilitation
Act, the Family and Medical Leave Act and the Age Discrimination in Employment Act
(“ADEA”), excepting only:

     (a) rights of the Executive under this Waiver and Release of Claims and the Employment
Agreement, including, but not limited to, the Executive’s rights to payments under Section 3
of the Employment Agreement;

     (b) rights of the Executive relating to equity and equity compensatory awards, of
Holdings and/or the Company held by the Executive as of his date of termination;

     (c) the right of the Executive to receive COBRA continuation coverage in accordance
with applicable law and the Employment Agreement;

15

 

     (d) rights to indemnification the Executive may have under the by-laws or certificate
of incorporation of the Company;

     (e) claims for benefits under any health, disability, retirement, deferred
compensation, life insurance or other, similar employee benefit plan or arrangement of the
Company Affiliated Group; and

     (f) claims for the reimbursement of un-reimbursed business expenses incurred prior to
the date of termination pursuant to applicable Company policy.

	2.	 	No Admissions, Complaints or Other Claims. The Executive acknowledges and agrees
that this Waiver and Release of Claims is not to be construed in any way as an admission of
any liability whatsoever by any Company Released Party, any such liability being expressly
denied. The Executive also acknowledges and agrees that he has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any Actions against any
Company Released Party with any governmental agency, court or tribunal.
	 
	3.	 	Application to all Forms of Relief. This Waiver and Release of Claims applies to any
relief no matter how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or suffering,
costs and attorney’s fees and expenses.
	 
	4.	 	Specific Waiver. The Executive specifically acknowledges that his acceptance of the
terms of this Waiver and Release of Claims is, among other things, a specific waiver of any
and all Actions under Title VII, ADEA, ADA and any state or local law or regulation in respect
of discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything herein purport, to be a waiver of any right or Action which by law
the Executive is not permitted to waive.
	 
	5.	 	Voluntariness. The Executive acknowledges and agrees that he is relying solely upon
his own judgment; that the Executive is over eighteen years of age and is legally competent to
sign this Waiver and Release of Claims; that the Executive is signing this Waiver and Release
of Claims of his own free will; that the Executive has read and understood the Waiver and
Release of Claims before signing it; and that the Executive is signing this Waiver and Release
of Claims in exchange for consideration that he believes is satisfactory and adequate. The
Executive also acknowledges and agrees that he has been informed of the right to consult with
legal counsel and has been encouraged to do so.
	 
	6.	 	Complete Agreement/Severability. This Waiver and Release of Claims constitutes the
complete and final agreement between the parties and supersedes and replaces all prior or
contemporaneous agreements, negotiations, or discussions relating to the subject matter of
this Waiver and Release of Claims. All provisions and portions of this Waiver and Release of
Claims are severable. If any provision or portion of this Waiver and Release of Claims or the
application of any provision or portion of the Waiver and Release of Claims shall be
determined to be invalid or unenforceable to any extent or for any reason, all other
provisions and portions of this Waiver and Release of Claims shall remain in full

16

 

	 	 	force and shall continue to be enforceable to the fullest and greatest extent permitted by
law.

	7.	 	Acceptance and Revocability. The Executive acknowledges that he has been given a
period of 21 days within which to consider this Waiver and Release of Claims, unless
applicable law requires a longer period, in which case the Executive shall be advised of such
longer period and such longer period shall apply. The Executive may accept this Waiver and
Release of Claims at any time within this period of time by signing the Waiver and Release of
Claims and returning it to the Company. This Waiver and Release of Claims becomes effective
and enforceable on the eighth calendar day following the date of execution by Executive
(“Effective Date”). The Executive may revoke his acceptance of this Waiver and Release of
Claims at any time within seven calendar days after signing by sending written notice to the
Company. Such notice must be received by the Company within the seven calendar day period in
order to be effective and, if so received, would void this Waiver and Release of Claims for
all purposes. This Waiver and Release of Claims does not waive rights or claims under the
ADEA that may arise after the Effective Date. The Executive acknowledges that the rights and
claims waived in this Waiver and Release of Claims are in exchange for consideration over and
above anything to which Executive is already entitled.
	 
	8.	 	Governing Law. Except for issues or matters as to which federal law is applicable,
this Waiver and Release of Claims shall be governed by and construed and enforced in
accordance with the laws of the state of Mississippi without giving effect to the conflicts of
law principles thereof.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Lampkin Butts 	 
	 	 	 

17

 

APPENDIX “A”

	 	 	 	 	 	 	 
	Acadia

	 	Allen
	 	Ascension
	 	Assumption
	Avoyelles

	 	Beauregard
	 	Bienville
	 	Bossier
	Caddo

	 	Calcasieu
	 	Caldwell
	 	Cameron
	Catahoula

	 	Claiborne
	 	Concordia
	 	De Soto
	East Baton Rouge

	 	East Carroll
	 	East Feliciana
	 	Evangeline
	Franklin

	 	Grant
	 	Iberia
	 	Iberville
	Jackson

	 	Jefferson
	 	Jefferson Davis
	 	Lafayette
	Lafourche

	 	La Salle
	 	Lincoln
	 	Livingston
	Madison

	 	Morehouse
	 	Natchitoches
	 	Orleans
	Ouachita

	 	Plaquemines
	 	Pointe Coupee
	 	Rapides
	Red River

	 	Richland
	 	Sabine
	 	St. Bernard
	St. Charles

	 	St. Helena
	 	St. James	 	 
	St. John the Baptist

	 	St. Landry
	 	St. Martin
	 	St. Mary
	St. Tammany

	 	Tangipahoa
	 	Tensas
	 	Terrebonne
	Union

	 	Vermilion
	 	Vernon
	 	Washington
	Webster

	 	West Baton Rouge
	 	West Carroll
	 	West Feliciana
	Winn
	 	 	 	 	 	 

18exv10w3

Exhibit 10.3

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT, dated as of September 15, 2009 (the “Employment Agreement”), by
and between Sanderson Farms, Inc., a Mississippi corporation (the “Company”), and D.
Michael Cockrell (the “Executive”).

     WHEREAS, the Executive possesses skills, experience and knowledge that are of significant
value to the Company;

     WHEREAS, the Company and the Executive desire to enter into this Employment Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid
consideration the sufficiency of which is acknowledged, the parties hereto agree as follows:

     Section 1. Employment.

     1.1. Term. Subject to Section 3 hereof, the Company agrees to employ the Executive,
and the Executive agrees to be employed by the Company, in each case pursuant to this Employment
Agreement, for a period commencing on the date set forth above and ending on the termination of the
Executive’s employment in accordance with Section 3 hereof (the “Term”).

     1.2. Title; Duties; Place of Performance. During the Term, the Executive shall serve
as Treasurer and Chief Financial Officer of the Company and such other positions as an officer or
director of the Company and such Affiliates of the Company as the Executive and the board of
directors of the Company (the “Board”) or an appropriate committee thereof shall mutually
agree from time to time. In such positions, the Executive shall perform such duties, functions and
responsibilities during the Term as directed by the Board and shall operate within the guidelines,
plans or policies as may be established or approved by the Company from time to time. The
Executive’s principal places of employment during the Term shall be Laurel, Mississippi, except for
reasonable travel as required in connection with the business and affairs of the Company.

     1.3. Outside Affairs. During the Term, the Executive shall devote such time,
attention, and diligence to the business and affairs of the Company as are necessary to the
satisfactory performance of his duties to the Company, and shall conform to and comply with the
lawful and reasonable directions and instructions given to him by the Board, consistent with
Paragraph 1.2 hereof. During the Term, the Executive shall use his best efforts to promote and
serve the interests of the Company . Notwithstanding this Paragraph, the Executive may during the
Term: (i) engage in charitable and community activities and (ii) manage personal and family
investments and affairs, in each case so long as such activities do not violate the terms of this
Employment Agreement or interfere with the satisfactory performance of his duties hereunder. In
addition, without limiting the generality of the foregoing, during the Term the Executive shall not
serve on the boards of directors of any for-profit entity without the prior consent of the Board or
an appropriate committee thereof.

1

 

     Section 2. Compensation.

     2.1. Salary. As compensation for the performance of the Executive’s services
hereunder, the Company shall pay to the Executive a salary at an initial annual rate of Four
Hundred Ninety-Six Thousand Nine Hundred Sixty-Seven Dollars ($496,967), payable with the same
frequency and on the same basis that the Company normally makes salary payments to other executive
personnel of the Company (the “Base Salary”). The Compensation Committee of the Board (the
“Compensation Committee”) shall review and reassess the Base Salary at least annually and
may elect to change it, subject to Paragraph 3.2 hereof. Any resolution of the Compensation
Committee changing the Base Salary shall automatically amend and be incorporated into this
Employment Agreement.

     2.2. Annual Bonus. The Executive shall be entitled to any cash bonus award payable to
him in accordance with any bonus award program adopted by the Compensation Committee.

     2.3. Benefits. During the Term, the Executive shall be eligible to participate in the
health insurance, retirement and other perquisites and benefits of the Company as in effect from
time to time.

     2.4. Vacation and Sick Pay. The Executive will be entitled to paid vacation and sick
leave during the Term in accordance with the terms and conditions of the Company’s vacation and
sick leave policies as in effect from time to time.

     2.5. Holidays. The Executive shall be entitled to all paid holidays given to the
Company’s executive employees in accordance with Company policy.

     2.6. Business and Entertainment Expenses. The Company shall promptly pay or reimburse
the Executive for all reasonable business out-of-pocket expenses that the Executive incurs during
the Term in performing his duties under this Employment Agreement, upon presentation of
documentation and in accordance with the expense reimbursement policy of the Company in effect from
time to time. With respect to any such payment or reimbursement that would otherwise constitute a
deferral of compensation within the meaning of Section 409A (“Section 409A”) of the
Internal Revenue Code of 1986, as amended (the “Code”), the payment or reimbursement will
be made no later than the 15th day of the third month following the later of the end of
the calendar year or the end of the Company’s fiscal year in which the expense was incurred.

     2.7. Indemnification. To the maximum extent permitted by applicable law and the
Company’s Articles of Incorporation, as amended, and Bylaws, the Company shall indemnify the
Executive for losses or damages incurred by the Executive as a result of all causes of action
arising against him from the Executive’s performance of duties for the benefit of the Company. The
Executive shall be covered under any directors’ and officers’ insurance that the Company maintains
for its directors and other officers in the same manner and on the same basis as the Company’s
directors and other officers.

     2.8. Supplemental Disability Plan. The Executive is hereby designated a “Participant”
pursuant to Section 1.6 of the Sanderson Farms, Inc. Supplemental Disability Plan effective
September 1, 2008.

2

 

     Section 3. Employment Termination.

     3.1. Termination of Employment. The Company may terminate the Executive’s employment
for any reason during the Term, and the Executive may voluntarily terminate his employment for any
reason during the Term, in each case (other than a termination by the Company for Cause) at any
time upon not less than 30 days’ notice to the other party specifying the reason therefor, if
applicable to the termination. Such notice may not be given until any other notice required by
Paragraph 3.2(a) or (b) has been given. The Executive’s employment shall automatically and
immediately terminate upon the Executive’s death. Upon the termination of the Executive’s
employment with the Company for any reason, the Executive shall be entitled to any Base Salary
earned but unpaid through the date of termination, any accrued but unpaid benefits, and any
unreimbursed expenses in accordance with Paragraph 2.6 hereof (collectively, the “Accrued
Amounts”). If the Executive’s employment terminates due to his death, the Company shall pay
the Accrued Amounts to his designated beneficiary (such beneficiary to be designated in writing by
the Executive, or in the absence of a separate written designation, such beneficiary shall be
Executive’s spouse or, if there is no spouse, his estate), and shall also pay to such beneficiary
the Executive’s Base Salary at the rate in effect on the date of his death according to the
Company’s regular payroll schedule from the date of his death until the first anniversary thereof.
Nothing in this Agreement shall entitle the Executive to the Severance Payments and other benefits
provided for in Paragraph 3.2 if his employment terminates due to his death, disability or
retirement.

     3.2. Termination by the Company Other Than For Cause or Poor Performance; Change in
Control; Termination by the Executive for Good Reason. If (i) prior to a Change in Control,
the Executive’s employment is terminated by the Company during the Term other than for Cause or
Poor Performance, (ii) simultaneously with or after a Change in Control, the Executive’s employment
is terminated by the Company other than for Cause, or (iii) the Executive resigns for Good Reason
within 30 days following the deadline set forth in Paragraph 3.2(a)(C) by which the Company must
cure the Resignation Condition (the “Cure Deadline”), then in addition to the Accrued Amounts the
Executive shall be entitled to the following payments and benefits: (a) an amount equal to two
times the Executive’s annual Base Salary in effect at the time of termination, and (b) an amount
equal to two times fifty percent of the maximum bonus opportunity available to the Executive (had
the Executive’s employment not terminated) under any bonus award program in effect for the fiscal
year in which termination occurs (based on the bonus plan (if any) in effect for that year) (the
payments provided for in clauses (a) and (b) are referred to as the “Severance Payments”)
and (c) the continuation, on the same terms as an active employee, of medical benefits the
Executive would otherwise be eligible to receive as an active employee of the Company for
twenty-four (24) months or, if earlier, until such time as the Executive becomes eligible for
substantially similar medical benefits from a subsequent employer. The Severance Payments shall be
payable in a lump sum in immediately available funds as soon as practicable following the
Executive’s termination or resignation, but in any event no later than the 45th day
after the termination of the Executive’s employment. Notwithstanding the preceding sentence, if
payment of the Severance Payments as aforesaid would cause the imposition of an excise tax on all
or any part of the Severance Payments pursuant to Section 409A of the Code, then payment of all or
such part of the Severance

3

 

Payments shall be delayed or advanced to the earliest practicable date that avoids the
imposition of such excise tax. The Company’s obligations to make the Severance Payments and
provide the benefits described in clause (c) above shall be conditioned upon: (i) the Executive’s
continued compliance with his obligations under Section 4 of this Employment Agreement and (ii) the
Executive’s execution, delivery and non-revocation of a valid and enforceable release of claims
arising in connection with the Executive’s employment and termination of employment with the
Company and its Affiliates (the “Release”) substantially in the form attached hereto as
Exhibit A. In the event that the Executive breaches any of the covenants set forth in Section 4 of
this Employment Agreement, the Executive will immediately return to the Company any portion of the
Severance Payments that has been paid to the Executive pursuant to this Section 3 and Executive’s
entitlement to continued medical benefits shall immediately cease.

     For purposes of this Employment Agreement:

     (a) “Good Reason” shall mean (A) one of the following (each, a “Resignation
Condition”) has occurred: (i) a material breach by the Company of any of the covenants in this
Employment Agreement, (ii) any reduction in the Executive’s Base Salary or target bonus
opportunity, other than a reduction that is part of a salary and bonus opportunity reduction
program affecting senior executives of the Company generally, (iii) the relocation of the
Executive’s principal place of employment, without the Executive’s consent, that would increase the
Executive’s one-way commute by more than 40 miles, (iv) assignment of duties or responsibilities
inappropriate for an executive officer, except as a result of the Executive’s Disability or ill
health, or (v) after a Change in Control, the alteration of the Executive’s position in a way that
significantly changes his status, offices, reporting requirements, authority, daily routine or
responsibilities as they existed before the Change in Control, whether or not the Executive’s title
and location remain the same, which results in a material diminution in such position; (B) the
Executive has given the Company written notice of the occurrence of the Resignation Condition
within 30 days after the Resignation Condition occurred; and (C) the Company has not cured the
Resignation Condition by the date that is 30 days after receiving the notice from the Executive
required by clause (B) of this Paragraph.

     (b) “Cause” means (1) any conviction of, or plea of guilty or nolo contendere to (x)
any felony (except for vehicular-related felonies, other than vehicular manslaughter or vehicular
homicide) or (y) any crime (whether or not a felony) involving dishonesty, fraud, or breach of
fiduciary duty; (2) willful misconduct by the Executive; (3) failure or refusal, other than by
reason of Disability or ill health, to perform faithfully and diligently the usual and customary
duties of his employment; (4) failure or refusal to comply with the reasonable policies, standards
and regulations of the Company which, from time to time, may be established and disseminated; (5) a
material breach by the Executive of any terms related to his employment in any applicable
agreement; or (6) the Executive engaging in any Prohibited Activity (as defined below);
provided that the conduct described in clauses (2) through (5) shall not constitute Cause
unless the Company has provided the Executive with written notice of such conduct and the Executive
has failed to cure such conduct within five business days of receiving such notice. Following a
Change in Control, the duties of the Executive’s employment and policies, standards and regulations
of the Company referred to in Paragraphs 3.2(b)(3) and (4) above shall not be more onerous than
those in place before the Change in Control.

4

 

     (c) As used in this Employment Agreement, conduct is “cured” if, within the applicable time
period, its effect is reversed, to the extent it is capable of being reversed, and the conduct
ceases to continue; provided, however, that conduct shall be deemed to be unable to be
“cured” if such conduct has had or would have, individually or in the aggregate, a material adverse
effect on the Company and its subsidiaries, taken as a whole.

     (d) “Prohibited Activity” means engaging in conduct proscribed by Section 4.

     (e) “Poor Performance” means the failure by the Executive to perform the duties of his office
to the satisfaction of the Board or the Chief Executive Officer of the Company as approved by the
Board. Poor performance shall be exclusively determined by the Board or the Chief Executive
Officer as approved by the Board.

     (f) “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

     (1) The acquisition (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or indirectly controls,
is controlled by, or is under common control with the Company) by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than 50 percent of the then outstanding
shares of common stock of the Company; or

     (2) Approval by the stockholders of the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the assets of the
Company or approval by the Board of the acquisition by the Company of assets of another
corporation (each of the foregoing, a “Business Combination”), in each case, unless,
following such Business Combination, the individuals and entities who were the beneficial
owners, respectively, of the outstanding common stock of the Company immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50 percent of
the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation surviving or resulting from such
Business Combination (or of a corporation which as a result of such transaction controls the
Company or owns all or substantially all of the Company’s assets either directly or through
one or more subsidiaries), in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the common stock of the Company; or

     (3) individuals who, as of the date of this Employment Agreement, constitute the Board
of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director subsequent to such
date whose election, or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result
of an actual or threatened election

5

 

contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

     (4) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

     (g) “Disability” has such meaning as determined by the Board from time to time.

     3.3. Exclusive Remedy. The foregoing payments upon termination of the Executive’s
employment shall constitute the exclusive payments due the Executive upon a termination of his
employment under this Employment Agreement.

     3.4. Resignation from All Positions. Upon the termination of the Executive’s
employment with the Company for any reason, the Executive shall be deemed to have resigned, as of
the date of such termination, from all positions he then holds as an officer, director, employee
and member of the Board (and any committee thereof) and the boards of all of its subsidiaries.

     3.5. Cooperation. Following the termination of the Executive’s employment with the
Company for any reason, the Executive agrees to reasonably cooperate with the Company upon
reasonable request of the Board and to be reasonably available to the Company with respect to
matters arising out of the Executive’s services to the Company and its subsidiaries. The Company
shall reimburse the Executive for expenses reasonably incurred by him in connection with such
matters as agreed by the Executive and the Board.

     3.6. Section 409A. Notwithstanding the foregoing provisions of this Employment
Agreement, if as of the date of termination of the Executive’s employment, he is a “specified
employee” within the meaning of Section 409A of the Code (as determined in accordance with the
methodology established by the Company as in effect on such date of termination), amounts or
benefits that are deferred compensation subject to Section 409A of the Code, as determined in the
reasonable discretion of the Company, that would otherwise be payable or provided during the
six-month period immediately following termination (other than the Accrued Amounts), shall instead
be paid or provided, with interest on any delayed payment at the prime lending rate prevailing at
such time, as published in the Wall Street Journal, on the first business day after the date that
is six months following Executive’s “separation from service” within the meaning of Section 409A of
the Code (or, if earlier, the Executive’s date of death).

     3.7. Golden Parachute Excise Tax Provisions. In the event it is determined that any
payment or benefit (within the meaning of Section 280G(B)(2)) of the Code to the Executive or for
his benefit paid or payable or distributed to or distributable pursuant to the terms of this
Employment Agreement or otherwise in connection with, or arising out of, his employment
(“Termination Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter collectively referred to
as the “Golden Parachute Excise Tax”), then the total Termination Payments shall be reduced to the
extent the payment of such amounts would no longer cause any portion of the Executive’s total
termination benefits to constitute an “excess” parachute payment under

6

 

Section 280G of the Code and by reason of such excess parachute payment the Executive would be subject
to an excise tax under Section 4999(a) of the Code, but only if the Executive (or the Executive’s
tax advisor) determines that the after-tax value of the termination benefits calculated with the
foregoing restriction exceeds that calculated without the foregoing restriction. Except as
otherwise expressly provided herein, all determinations under this Paragraph 3.7 shall be made at
the expense of the Company by a nationally recognized public accounting or consulting firm selected
by the Company and subject to the approval of Executive, which approval shall not be unreasonably
withheld. Such determination shall be binding upon Executive and the Company.

     3.8. Company Withholding. Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the determination of the Executive or his advisor
pursuant to Paragraph 3.7 hereof, a Golden Parachute Excise Tax will be imposed on any Termination
Payment or Payments, the Company shall pay to the applicable government taxing authorities as
Golden Parachute Excise Tax withholding, the amount of the Golden Parachute Excise Tax that the
Company has actually withheld from the Termination Payment or Payments.

     Section 4. Unauthorized Disclosure; Non-Solicitation; Non-Competition; Proprietary
Rights.

     4.1. Definitions. For purposes of this Agreement, the following terms shall have the
meaning ascribed to them:

               (a) “Look Back Period” shall mean the two (2) years preceding the termination of Executive’s
employment by Company, whatever the cause;

               (b) “Restricted Enterprise” shall mean any person or entity engaged, directly or indirectly,
in (or intends or proposes to engage in, or has been organized for the purpose of engaging in) any
aspect of operations substantially similar to those engaged in by the Company during the Look Back
Period. The parties understand, that at the time of signing, the Company is engaged in the
production, processing, marketing and distribution of fresh and frozen chicken and other prepared
chicken items;

               (c) “Restriction Period” shall mean during Executive’s employment (whether during the Term or
thereafter) and for the two (2) years following the termination of Executive’s employment by
Company, whatever the cause;

               (d) “Potential Customer” shall mean a person or business the Executive solicited on behalf of
the Company or its Affiliates or about whom the Executive gained Confidential Information during
the Look Back Period and who has not conclusively decided not to do business with the Company at
the time of enforcement;

               (e) “Affiliate” means the Company’s successors in interest, affiliates (as defined in Rule
12b-2 under Section 12 of the Exchange Act), sister companies or divisions, subsidiaries, parents,
purchasers, or assignees.

     4.2. The Company. The Company will give Executive Confidential Information, as defined
below, and the opportunity to develop goodwill with the Company’s customers. The parties intend
that the protective covenants in this Section 4 to be ancillary to the Company’s

7

 

promises and obligations under this Paragraph 4.2. The parties further intend that Company’s
promises constitute a positive contract and that a court construe Company’s promises and
Executive’s obligations as creating bi-lateral obligations.

     4.3. Unauthorized Disclosure. “Confidential Information,” as defined herein, means
legally-protectable information relating to the affairs of the Company and/or its Affiliates that
is maintained as confidential by the Company, and that is not authorized for disclosure to the
public, including, without limitation; technical information, ideas, know-how and intellectual
property; business and marketing plans and proposals; research and development; strategies;
customer and supplier lists and information; software; product, pricing and cost information;
promotions; development; financing; expansion plans; business policies and practices of the Company
and its Affiliates ; and information about the business affairs of third parties (including, but
not limited to, customers) that such third parties provided to Company in confidence. Confidential
Information includes trade secrets, but a piece of information need not qualify as a trade secret
in order to be protected. The Executive agrees that at all times during the Executive’s employment
with the Company and thereafter, the Executive shall not disclose, communicate, or furnish to any
other person any Confidential Information except for Permitted Disclosures; or use for the
Executive’s or any other person’s account any Confidential Information except for Permitted
Disclosures. Provided, however, that if a time limitation on this restriction is required in order
for it to be enforceable, then this restriction shall be limited to a period of three (3) years
following the termination of Executive’s employment (whatever the cause) for any Confidential
Information that does not qualify as a trade secret. For trade secrets, this restriction shall
extend as long as the information continues to qualify as a trade secret. Upon termination of the
Executive’s employment with the Company, the Executive shall promptly supply to the Company all
property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence,
tapes, disks, cards, surveys, maps, logs, machines, technical data and any other product, material,
data or document which has been produced by, received by or otherwise submitted to the Executive
during or prior to the Executive’s employment with the Company, and any copies thereof in his
possession, custody or control (whether in electronic, “hard” or other format). “Permitted
Disclosure” means the disclosure of Confidential Information that (i) is made with the prior
written consent of the Company, (ii) is required to be disclosed by law or legal process (of which
Executive shall have given as much advance written notice to the Company as is practicable under
the circumstances), or (iii) is made in the course of the Executive’s employment with the Company,
but only to the extent the Executive reasonably deems such disclosure necessary or appropriate to
perform the Executive’s responsibilities on behalf of the Company or otherwise advance the
interests of the Company.

     4.4. Non-Competition. By and in consideration of the Company’s entering into this
Employment Agreement and the payments to be made and benefits to be provided by the Company
hereunder, and in further consideration of the Company’s agreement to provide Confidential
Information and the ability to develop goodwill to the Executive (as set forth in Paragraph 4.2),
the Executive agrees that the Executive shall not, during the Restriction Period, anywhere in the
United States, provide services that are the same or substantially similar to those Executive
performed for the Company during the Look Back Period or which will probably or inevitably result
in the use or disclosure of Company’s Confidential Information to any Restricted Enterprise;
provided, that in no event shall ownership of two percent (2%) or less of the outstanding
securities of any class of any issuer whose securities are registered under the

8

 

Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this Paragraph
4.4, so long as the Executive does not have, or exercise, any rights to manage or operate the
business of such issuer other than rights generally held by all stockholders; and provided
further, that the covenant contained in this Paragraph 4.4 shall not apply if the Company
terminates the Executive’s employment for Poor Performance. During the Restriction Period, upon
request of the Company, the Executive shall notify the Company of the Executive’s then-current
employment status.

     4.5. Non-Solicitation of Employees. During the Restriction Period, the Executive
shall not, other than on behalf of the Company, solicit or assist any person to solicit for
employment or hire any person who is, or within four months prior to the date of such solicitation
or hire was, a director, officer or employee of the Company or any of its subsidiaries, provided
that this Paragraph 4.5 shall not apply to solicitation of a person who responds to general
advertising.

     4.6. Non-Solicitation of Customers. During the Restriction Period, the Executive
shall not, on behalf of himself or any other person;

     (a) Call upon any of the customers or clients of the Company or its Affiliates or any
Potential Customer for the purpose of soliciting or providing any product or service that competes
or could compete with any product or service provided by the Company or its Affiliates,

     (b) Divert or take away, or attempt to take away any of the customers, clients, or patrons of
the Company or its Affiliates; or

     (c) Encourage any of the customers, clients, or patrons of the Company or its Affiliates to
cease doing business with the Company.

     4.7. Extension of Restriction Period. The Restriction Period shall be tolled for any
period during which the Executive is in breach of any of Paragraphs 4.4, 4.5, or 4.6 hereof.

     4.8. Blue Pencil. If any court of competent jurisdiction shall at any time deem the
duration or the geographic scope of any of the provisions of this Section 4 unenforceable, the
other provisions of this Section 4 shall nevertheless stand and the duration and/or geographic
scope set forth herein shall be deemed to be the longest period and/or greatest size permissible by
law under the circumstances, and the parties hereto agree that such court shall reduce the time
period and/or geographic scope to permissible duration and/or size. The parties further authorize
a court of competent jurisdiction to reduce or otherwise modify the scope of activities restrained
by Section 4 should the provisions of this Agreement be deemed overly broad in the scope of
activities restrained by them.

     4.9. Remedies. The Executive agrees that any breach of the terms of this Section 4
would result in irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any
threat of breach, the Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any
and all persons acting for and/or with the Executive, without having to

9

 

prove damages, in addition to any other remedies to which the Company may be entitled at law
or in equity, including, without limitation, the obligation of the Executive to return to the
Company any Severance Payments paid pursuant to Paragraph 3.2. One Thousand Dollars ($1,000.00) is
the agreed amount for the bond to be posted if an injunction is sought by Company to enforce the
restrictions in this Agreement on Executive. The terms of this Paragraph 4.9 shall not prevent the
Company from pursuing any other available remedies for any breach or threatened breach hereof,
including, without limitation, the recovery of damages from the Executive. The Executive and the
Company further agree that the provisions of the covenants contained in this Section 4 are
reasonable and necessary to protect the businesses of the Company and its Affiliates because of the
Executive’s access to Confidential Information and his material participation in the operation of
such businesses.

     4.10. Notice and Early Resolution Conference. During the Restriction Period,
Executive will give Company written notice at least thirty (30) days prior to going to work for a
Restricted Enterprise, will provide Company with a description of the duties and activities of the
new position, and will participate in a mediation or in-person conference if requested to do so by
Company within thirty days of such a request in order to help avoid unnecessary legal disputes.

     4.11. Resolution of Rights Regarding Confidential Information and Goodwill.
Executive has received Confidential Information and/or developed business goodwill with customers
through, or in the course of, past association with Company or an Affiliate. The nature and scope
of restrictions, necessary to protect the parties’ interests related to these past events, is
unresolved. The parties agree that an important purpose of this Agreement is to resolve such
uncertainties and to settle such disputes and provide a set of predictable boundaries upon which
they may rely to avoid future disputes over what jobs or conduct will result in misappropriation of
Confidential Information, conversion of customer goodwill, or similar irreparable harm. To settle
and dispose of any dispute regarding these issues, Executive agrees not to sue or otherwise pursue
a legal action to avoid the agreed-upon restrictions in the Agreement.

     4.12. State-Specific Modifications.

               (a) Georgia. If, notwithstanding the Mississippi choice of law provision, Georgia law
is deemed to apply, then: (1) The Non-Competition Provision in Paragraph 4.4 shall be rewritten as
follows: Executive agrees that during the Restriction Period, Executive shall not, anywhere in the
United States, provide managerial services or serve in a managerial position for any enterprise
devoted to the production, processing, marketing and distribution of fresh and frozen chicken and
other prepared chicken items, other than the Company and its Affiliates; (2) the Non-Solicitation
of Customers provision in Paragraph 4.6 shall be rewritten as follows: Executive agrees that during
the Restriction Period, Executive will not, in any way, directly or indirectly, solicit, divert, or
take away, or attempt to solicit, divert or take away, Company customers that Executive solicited
while he was employed with Company, to sell to such customer any product that Company provides at
the time Executive signs this Agreement; unless an authorized Company officer gives Executive
written permission to do so. The parties agree this restriction is inherently reasonable because
it is limited to the places or locations where the customer is doing business at the time; (3) The
tolling provision in

10

 

Paragraph 4.7 shall not apply; (4) the covenant not to sue in Paragraph 4.11 shall not apply;
and (5) the jury trial waiver in Paragraph 7.4(b) shall not apply.

               (b) Louisiana. If, notwithstanding the Mississippi choice of law provision, Louisiana
law is deemed to apply, then the provisions of Paragraphs 4.4 and 4.6 shall be limited within the
state of Louisiana to the parishes identified on Appendix “A”, attached hereto and incorporated
herein for all purposes. Provided, however, that nothing in Agreement may be construed to prohibit
the enforcement of Paragraphs 4.4 and 4.6 in accordance with their terms in states outside of
Louisiana.

               (c) North Carolina. If, notwithstanding the Mississippi choice of law provision,
North Carolina law is deemed to apply, then the jury trial waiver in Paragraph 7.4(b) shall not
apply.

     Section 5. Representation. The Executive represents and warrants that (i) he
is not subject to any contract, arrangement, policy or understanding, or to any statute,
governmental rule or regulation, that in any way limits his ability to enter into and fully perform
his obligations under this Employment Agreement and (ii) he is not otherwise unable to enter into
and fully perform his obligations under this Employment Agreement.

     Section 6. Withholding; Taxes. All amounts paid to the Executive under this
Employment Agreement during or following the Term shall be subject to withholding and other
employment taxes imposed by applicable law. The Executive shall be solely responsible for the
payment of all taxes relating to the payment or provision of any amounts or benefits paid to the
Executive hereunder or otherwise.

     Section 7. Miscellaneous.

     7.1. Amendments and Waivers. This Employment Agreement and any of the provisions
hereof may be amended, waived (either generally or in a particular instance and either
retroactively or prospectively), modified or supplemented, in whole or in part, only by written
agreement signed by the parties hereto; provided, that the observance of any provision of
this Employment Agreement may be waived in writing by the party that will lose the benefit of such
provision as a result of such waiver. The waiver by any party hereto of a breach of any provision
of this Employment Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach, except as otherwise explicitly
provided for in such waiver. Except as otherwise expressly provided herein, no failure on the part
of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy. This
Employment Agreement may be amended from time to time with the consent of the Executive, which
shall not be unreasonably withheld, as may be necessary or appropriate to avoid adverse tax
consequences to the Executive under Section 409A of the Code.

     7.2. Assignment. This Employment Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive, and any purported assignment by

11

 

the Executive in violation hereof shall be null and void. The Agreement will inure to the
benefit of Company’s Affiliates without need of any further authorization or agreement from
Executive. Except as may be expressly provided herein, nothing in this Employment Agreement shall
confer upon any person not a party to this Employment Agreement, or the legal representatives of
such person, any rights or remedies of any nature or kind whatsoever under or by reason of this
Employment Agreement.

     7.3. Notices. Unless otherwise provided herein, all notices, requests, demands,
claims and other communications provided for under the terms of this Employment Agreement shall be
in writing. Any notice, request, demand, claim or other communication hereunder shall be sent by
(i) personal delivery (including receipted courier service) or overnight delivery service, (ii)
facsimile during normal business hours, with confirmation of receipt, to the number indicated,
(iii) reputable commercial overnight delivery service courier or (iv) registered or certified mail,
return receipt requested, postage prepaid and addressed to the intended recipient as set forth
below:

     (a) If to the Executive, to the most recent home address that the Company maintains in its
records for the Executive,

     (b) If to the Company, to:

Sanderson Farms, Inc.

127 Flynt Road

Laurel, Mississippi 39443

Attention: Chief Executive Officer

Facsimile: (601) 426-1461

Telephone: (601) 649-4030

     (c) With a copy to:

Wise Carter Child & Caraway, P.A.

Suite 600, Heritage Building

401 E. Capitol Street

Jackson, Mississippi 39201

Attention: Henry E. Chatham, Jr.

Facsimile: (601) 968-5593

and

Fishman Haygood Phelps

     Walmsley Willis & Swanson, L.L.P.

201 St. Charles Avenue

46th Floor

New Orleans, Louisiana 70170

Attention: Louis Y. Fishman

Facsimile: (504) 310-0255

12

 

     Any party may change its facsimile number or its address to which notices, requests, demands,
claims and other communications hereunder are to be delivered by giving the other parties hereto
notice in the manner then set forth.

     7.4. Governing Law; Forum.

     (a) Governing Law. This Employment Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be governed by, the
laws of the state of Mississippi, without giving effect to the conflicts of law principles thereof.

     (b) Forum. Each of the parties hereto: (i) agrees that the exclusive venue for any
legal action arising from this Agreement shall be the Chancery Court for Jones County, Mississippi
or the United States District Court for the Southern District of Mississippi; (ii) consents to
submit itself to the personal jurisdiction of the courts of the State of Mississippi (the
“Specified Courts”) in the event any dispute arises out of this Employment Agreement; (iii)
agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from such court; (iv) agrees that it will not bring any action relating to this
Employment Agreement or any of the transactions contemplated by this Employment Agreement in any
court other than the Specified Courts; and (v) to the fullest extent permitted by law, consents to
service being made through the notice procedures set forth in Paragraph 7.3. Each party hereto
hereby agrees that, to the fullest extent permitted by law, service of any process, summons, notice
or document by U.S. registered mail to the respective addresses set forth in Paragraph 7.3 shall be
effective service of process for any suit or proceeding in connection with this Employment
Agreement or the transactions contemplated hereby. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS EMPLOYMENT AGREEMENT OR THE ACTIONS
OF THE PARTIES HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.

     7.5. Severability. Whenever possible, each provision or portion of any provision of
this Employment Agreement, including those contained in Section 4 hereof, will be interpreted in
such manner as to be effective and valid under applicable law but the invalidity or
unenforceability of any provision or portion of any provision of this Employment Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of this Employment
Agreement in that jurisdiction or the validity or enforceability of this Employment Agreement,
including that provision or portion of any provision, in any other jurisdiction. In addition,
should a court determine that any provision or portion of any provision of this Employment
Agreement, including those contained in Section 4 hereof, is not reasonable or valid, either in
period of time, geographical area, or otherwise, the parties hereto agree that such provision
should be interpreted and enforced to the maximum extent which such court deems reasonable or
valid.

     7.6. Entire Agreement. From and after the date hereof, this Employment Agreement
constitutes the entire agreement between the parties, and supersedes all prior representations,

13

 

agreements and understandings (including any prior course of dealings), both written and oral,
between the parties with respect to the subject matter hereof and thereof.

     7.7. Counterparts. This Employment Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.

     7.8. Binding Effect. This Employment Agreement shall inure to the benefit of, and be
binding on, the successors and assigns of each of the parties, including, without limitation, the
Executive’s heirs and the personal representatives of the Executive’s estate and any successor to
all or substantially all of the business and/or assets of the Company.

     7.9. General Interpretive Principles. The headings of the sections, paragraphs,
subparagraphs, clauses and subclauses of this Employment Agreement are for convenience of reference
only and shall not in any way affect the meaning or interpretation of any of the provisions hereof.
Words of inclusion shall not be construed as terms of limitation herein, so that references to
“include”, “includes” and “including” shall not be limiting and shall be regarded as references to
non-exclusive and non-characterizing illustrations.

     7.10. Mutual Nondisparagement. Executive agrees that following the termination of his
employment, whatever the cause, he will not make any disparaging statements about the Company or
any statements designed to damage the reputation of the Company. The Company agrees that,
following the termination of Executive’s employment, whatever the cause, the Company’s Board of
Directors, executives and upper management will not make any disparaging statements about the
Executive or any statements designed to damage the reputation of the Executive. Notwithstanding
the foregoing, nothing in this Paragraph 7.10 shall prohibit either party from making truthful
statements when required by order of a court or other governmental body having jurisdiction.

     IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as of the date
first written above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SANDERSON FARMS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ D. Michael Cockrell	 	 	 	By:	 	/s/ Joe F. Sanderson, Jr.	 	 
	 	 	 	 	 	 	 	 	 
	D. Michael Cockrell

	 	 	 	 	 	Name:
	 	Joe F. Sanderson, Jr.	 	 
	 

	 	 	 	 	 	Title:
	 	Chairman of the Board and Chief Executive
Officer	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                             /s/ Phil K. Livingston
 	 
	 	 	Name:  	Phil K. Livingston 	 
	 	 	Title:  	Chairman, Compensation Committee of the
Board of Directors 	 

14

 

Exhibit A

WAIVER AND RELEASE OF CLAIMS

	1.	 	General Release. In consideration of the payments and benefits to be made under the
Employment Agreement, dated as of September 15, 2009, to which Sanderson Farms, Inc. (the
“Company”) and D. Michael Cockrell (the “Executive”) are parties (the
“Employment Agreement”), the Executive, with the intention of binding the Executive
and the Executive’s heirs, executors, administrators and assigns, does hereby release, remise,
acquit and forever discharge the Company and each of its subsidiaries and affiliates (the
“Company Affiliated Group”), their present and former officers, directors, executives,
agents, shareholders, attorneys, employees and employee benefits plans (and the fiduciaries
thereof), and the successors, predecessors and assigns of each of the foregoing (collectively,
the “Company Released Parties”), of and from any and all claims, actions, causes of
action, complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind or
nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or
otherwise and whether now known, unknown, suspected or unsuspected which the Executive,
individually or as a member of a class, now has, owns or holds, or has at any time heretofore
had, owned or held, against any Company Released Party (an “Action”) arising out of or
in connection with the Executive’s service as an employee, officer and/or director to any
member of the Company Affiliated Group (or the predecessors thereof), including (i) the
termination of such service in any such capacity, (ii) for severance or vacation benefits,
unpaid wages, salary or incentive payments, (iii) for breach of contract, wrongful discharge,
impairment of economic opportunity, defamation, intentional infliction of emotional harm or
other tort and (iv) for any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning harassment, discrimination, retaliation
and other unlawful or unfair labor and employment practices), any and all Actions based on the
Employee Retirement Income Security Act of 1974 (“ERISA”), and any and all Actions
arising under the civil rights laws of any federal, state or local jurisdiction, including,
without limitation, Title VII of the Civil Rights Act of 1964 (“Title VII”), the
Americans with Disabilities Act (“ADA”), Sections 503 and 504 of the Rehabilitation
Act, the Family and Medical Leave Act and the Age Discrimination in Employment Act
(“ADEA”), excepting only:

     (a) rights of the Executive under this Waiver and Release of Claims and the Employment
Agreement, including, but not limited to, the Executive’s rights to payments under Section 3
of the Employment Agreement;

     (b) rights of the Executive relating to equity and equity compensatory awards, of
Holdings and/or the Company held by the Executive as of his date of termination;

     (c) the right of the Executive to receive COBRA continuation coverage in accordance
with applicable law and the Employment Agreement;

15

 

     (d) rights to indemnification the Executive may have under the by-laws or certificate
of incorporation of the Company;

     (e) claims for benefits under any health, disability, retirement, deferred
compensation, life insurance or other, similar employee benefit plan or arrangement of the
Company Affiliated Group; and

     (f) claims for the reimbursement of un-reimbursed business expenses incurred prior to
the date of termination pursuant to applicable Company policy.

	2.	 	No Admissions, Complaints or Other Claims. The Executive acknowledges and agrees
that this Waiver and Release of Claims is not to be construed in any way as an admission of
any liability whatsoever by any Company Released Party, any such liability being expressly
denied. The Executive also acknowledges and agrees that he has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any Actions against any
Company Released Party with any governmental agency, court or tribunal.

	3.	 	Application to all Forms of Relief. This Waiver and Release of Claims applies to any
relief no matter how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or suffering,
costs and attorney’s fees and expenses.

	4.	 	Specific Waiver. The Executive specifically acknowledges that his acceptance of the
terms of this Waiver and Release of Claims is, among other things, a specific waiver of any
and all Actions under Title VII, ADEA, ADA and any state or local law or regulation in respect
of discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything herein purport, to be a waiver of any right or Action which by law
the Executive is not permitted to waive.

	5.	 	Voluntariness. The Executive acknowledges and agrees that he is relying solely upon
his own judgment; that the Executive is over eighteen years of age and is legally competent to
sign this Waiver and Release of Claims; that the Executive is signing this Waiver and Release
of Claims of his own free will; that the Executive has read and understood the Waiver and
Release of Claims before signing it; and that the Executive is signing this Waiver and Release
of Claims in exchange for consideration that he believes is satisfactory and adequate. The
Executive also acknowledges and agrees that he has been informed of the right to consult with
legal counsel and has been encouraged to do so.

	6.	 	Complete Agreement/Severability. This Waiver and Release of Claims constitutes the
complete and final agreement between the parties and supersedes and replaces all prior or
contemporaneous agreements, negotiations, or discussions relating to the subject matter of
this Waiver and Release of Claims. All provisions and portions of this Waiver and Release of
Claims are severable. If any provision or portion of this Waiver and Release of Claims or the
application of any provision or portion of the Waiver and Release of Claims shall be
determined to be invalid or unenforceable to any extent or for any reason, all other
provisions and portions of this Waiver and Release of Claims shall remain in full

16

 

	 	 	force and shall continue to be enforceable to the fullest and greatest extent permitted by
law.

	7.	 	Acceptance and Revocability. The Executive acknowledges that he has been given a
period of 21 days within which to consider this Waiver and Release of Claims, unless
applicable law requires a longer period, in which case the Executive shall be advised of such
longer period and such longer period shall apply. The Executive may accept this Waiver and
Release of Claims at any time within this period of time by signing the Waiver and Release of
Claims and returning it to the Company. This Waiver and Release of Claims becomes effective
and enforceable on the eighth calendar day following the date of execution by Executive
(“Effective Date”). The Executive may revoke his acceptance of this Waiver and Release of
Claims at any time within seven calendar days after signing by sending written notice to the
Company. Such notice must be received by the Company within the seven calendar day period in
order to be effective and, if so received, would void this Waiver and Release of Claims for
all purposes. This Waiver and Release of Claims does not waive rights or claims under the
ADEA that may arise after the Effective Date. The Executive acknowledges that the rights and
claims waived in this Waiver and Release of Claims are in exchange for consideration over and
above anything to which Executive is already entitled.

	8.	 	Governing Law. Except for issues or matters as to which federal law is applicable,
this Waiver and Release of Claims shall be governed by and construed and enforced in
accordance with the laws of the state of Mississippi without giving effect to the conflicts of
law principles thereof.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	D. Michael Cockrell 	 
	 	 	 

17

 

APPENDIX “A”

	 	 	 	 	 	 	 
	Acadia

	 	Allen
	 	Ascension
	 	Assumption
	Avoyelles

	 	Beauregard
	 	Bienville
	 	Bossier
	Caddo

	 	Calcasieu
	 	Caldwell
	 	Cameron
	Catahoula

	 	Claiborne
	 	Concordia
	 	De Soto
	East Baton Rouge

	 	East Carroll
	 	East Feliciana
	 	Evangeline
	Franklin

	 	Grant
	 	Iberia
	 	Iberville
	Jackson

	 	Jefferson
	 	Jefferson Davis
	 	Lafayette
	Lafourche

	 	La Salle
	 	Lincoln
	 	Livingston
	Madison

	 	Morehouse
	 	Natchitoches
	 	Orleans
	Ouachita

	 	Plaquemines
	 	Pointe Coupee
	 	Rapides
	Red River

	 	Richland
	 	Sabine
	 	St. Bernard
	St. Charles

	 	St. Helena
	 	St. James	 	 
	St. John the Baptist

	 	St. Landry
	 	St. Martin
	 	St. Mary
	St. Tammany

	 	Tangipahoa
	 	Tensas
	 	Terrebonne
	Union

	 	Vermilion
	 	Vernon
	 	Washington
	Webster

	 	West Baton Rouge
	 	West Carroll
	 	West Feliciana
	Winn
	 	 	 	 	 	 

18

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