SANDERSON FARMS, INC. (NASDAQ:SAFM) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

Credit Agreement

On April28, 2017, Sanderson Farms, Inc. (the Registrant) entered
into a Credit Agreement (the Credit Agreement) with BMO Harris
Bank, N.A., as agent and letter of credit issuer; BMO Harris
Financing, Inc.; AgFirst Farm Credit Bank; Farm Credit Bank of
Texas; Farm Credit Services of America, PCA; Regions Bank; Bank
of the West; 1^st Farm
Credit Services, PCA; AgStar Financial Services, PCA; Farm Credit
Mid-America, PCA; United FCS, PCA d/b/a FCS Commercial Finance
Group; Northwest Farm Credit Services, PCA; GreenStone Farm
Credit Services, ACA; U.S. Bank National Association; American
AgCredit, PCA; Trustmark National Bank; Farm Credit West, PCA;
and BankPlus.

The Credit Agreement provides for a $900.0million unsecured
revolving credit facility on a committed basis with a five year
maturity. Subject to the terms of the Credit Agreement, the
Registrant may, on one or more occasions, elect to increase the
commitments under the credit facility or obtain term loans (in
each case in an amount no less than $25.0 million), provided that
any increase, together with the aggregate amount of any term
loans issued, may not exceed $1,050.0 million. The Credit
Agreement has a maturity date of April28, 2022.

The Registrant will pay interest, at its option, at a variable
base or Eurodollar rate as determined under the Credit Agreement.
The Registrant is also obligated to pay an applicable margin over
the base rate or Eurodollar rate, as well as a letter of credit
participation fee and a commitment fee payable on the amount of
the average daily unused portion of the commitment, each
according to its leverage ratio. If there is an event of default,
loans outstanding will bear an additional 2.0% rate of interest.
The Registrant must also pay a fronting fee of 0.125% of the face
amount of each standby letter of credit issued, as well as usual
and customary administrative fees.

Up to $30.0 million of the new credit facility is available for
the issuance of standby and commercial letters of credit in the
ordinary course of business. The agent has also established a
$10.0 million swing line facility that will permit funding of
small or late day draws that reduce available credit under the
facility, with the credit risk allocated ratably among the
lenders. Swing line loans bear interest at the base rate plus the
applicable margin or the rate offered by the swing line lender in
its discretion. The Credit Agreement contains restrictive
covenants, which include maintaining a minimum tangible net worth
of $850.0 million, subject to quarterly increases based in part
on the Registrants quarterly consolidated net income; a maximum
leverage ratio of 50%; and a limitation on capital expenditures
of $100.0 million during its fiscal year ending October31, 2017
and increasing by $5.0 million during each fiscal year thereafter
to and including fiscal year 2022, plus up to a $15.0 million
carryover into the fiscal year ending October31, 2017 for unspent
amounts during the fiscal year ended October31, 2016, and up to a
$20.0 million carryover into the immediately following fiscal
year for unspent amounts during any fiscal year ending on or
after October31, 2017 (with special limits to allow for an
addition to the Jackson, Mississippi complex in the amount of
$15.0 million, construction of a complex in Tyler, Texas in the
amount of $200.5 million, construction of one additional
potential further processing complex in the amount of $60.0
million, construction of a second additional potential complex in
the amount of $210.0 million, and up to $70.0 million for the
purchase of up to three new aircraft before October31, 2020). The
Registrant has a one-time right to increase the maximum leverage
ratio by 5% in connection with the construction of either of the
three new poultry complexes for the four fiscal quarters
beginning on the first day of the fiscal quarter in which the
Registrant gives notice of its intent to exercise this right.

The facility also contains customary provisions relating to
acceleration of the Registrants payment obligations in an event
of default, which include non-payment of interest, principal or
fees; covenant defaults, subject to grace periods for certain
covenants; inaccurate representations or warranties in any
material respect; commencement of insolvency or bankruptcy
proceedings by or against the Registrant; a change in control;
the entry of certain judgments against the Registrant and
cross-defaults on other agreements evidencing indebtedness. The
Registrants obligations under the Credit Agreement are jointly
and severally guaranteed by its wholly-owned subsidiaries under a
Guaranty Agreement dated April28, 2017.

Copies of the Credit Agreement and the Guaranty Agreement are
filed as Exhibits 10.1 and 10.2, respectively, to this report and
are incorporated herein by reference. The descriptions above are
summaries of the Credit Agreement and Guaranty Agreement and are
qualified in their entirety by the complete text of those
agreements.

Certain Relationships

From time to time, certain of the lenders under the Credit
Agreement (and Prior Credit Agreement (as defined below)) and
their related entities have engaged, and may in the future
engage, in commercial, investment banking and financial services
transactions with the Registrant in the ordinary course of their
business. They have received, and expect to receive, customary
compensation and expense reimbursement for these commercial and
investment banking transactions. In addition, one of the
Registrants directors, Toni D. Cooley, is a director of Trustmark
National Bank and its parent company, Trustmark Corporation.

Also on April28, 2017, upon entering into the Credit Agreement
described above, the Registrant terminated its Credit Agreement
(the Prior Credit Agreement), dated as of April24, 2015, with BMO
Harris Bank, N.A., as agent and letter of credit issuer and BMO
Harris Financing, Inc.; Regions Bank; AgFirst Farm Credit Bank;
U.S. Bank National Association; Farm Credit Services of America,
PCA; Farm Credit Bank of Texas; Trustmark National Bank; Bank of
the West; Farm Credit Mid-America, PCA; United FCS, PCA d/b/a FCS
Commercial Finance Group; GreenStone Farm Credit Services,
ACA/FLCA; Farm Credit West, PCA; AgStar Financial Services, PCA;
1st Farm Credit Services, PCA; Northwest Farm Credit Services,
PCA; American AgCredit, PCA and BankPlus. The Prior Credit
Agreement, which was described in the Registrants Current Report
on Form 8-K filed on April29, 2015 (which description is
incorporated in this Item1.02 by reference) provided for a
$750.0million unsecured revolving credit facility. The Registrant
did not incur any early termination penalties in connection with
the termination of the Prior Credit Agreement. The Prior Credit
Agreement provided for interest to be paid, at the Registrants
option, at a variable base or Eurodollar rate as determined under
the Prior Credit Agreement. The Registrant was also obligated to
pay an applicable margin over the base rate or Eurodollar rate,
as well as a letter of credit participation fee and a commitment
fee payable on the amount of the average daily unused portion of
the commitment, each according to its leverage ratio. If there
was an event of default, loans outstanding would have borne an
additional 2.0% rate of interest. The Registrant was also
obligated to pay a fronting fee of 0.125% of the face amount of
each standby letter of credit issued, as well as usual and
customary administrative fees. Up to $25.0 million of the credit
facility under the Prior Credit Agreement was available for the
issuance of standby and commercial letters of credit in the
ordinary course of business. The agent had also established a
$10.0 million swing line facility that permitted funding of small
or late day draws that reduced available credit under the
facility, with the credit risk allocated ratably among the
lenders. The information provided in Item1.01 of this report
regarding relationships with certain of the lenders is
incorporated by reference in this Item1.02.

Section2 Financial Information

Item2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information provided in Item1.01 of this report is
incorporated by reference into this Item2.03.

Section7 Regulation FD

On April28, 2017, the Registrant issued a press release regarding
the matters referenced above. A copy of the press release is
furnished herewith as Exhibit 99.1.

In accordance with General Instruction B.2, the information
contained in this Item7.01 and the attached Exhibit 99.1 is being
furnished to the U.S. Securities and Exchange Commission and
shall not be deemed filed for the purposes of Section18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject
to the liabilities under such section. Furthermore, such
information shall not be deemed to be incorporated by reference
in any filing under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, unless
specifically identified as being incorporated therein by
reference.

Section9 Financial Statements and Exhibits

(d)The following exhibits are furnished with this Current Report:

About SANDERSON FARMS, INC. (NASDAQ:SAFM)

Sanderson Farms, Inc. is a poultry processing company. The Company is engaged in the production, processing, marketing and distribution of fresh and frozen chicken, and also preparation, processing, marketing and distribution of processed and minimally prepared chicken. It sells ice pack, chill pack, bulk pack and frozen chicken, in whole, cut-up and boneless form, under the Sanderson Farms brand name to retailers, distributors, casual dining operators, customers reselling frozen chicken into export markets. The Company, through its subsidiaries, Sanderson Farms, Inc. (Production Division) and Sanderson Farms, Inc. (Processing Division), conducts its chicken operations. Sanderson Farms, Inc. (Production Division) is engaged in the production of chickens to the broiler-stage. Sanderson Farms, Inc. (Foods Division) is engaged in the processing, sale and distribution of chickens. The Company, through Sanderson Farms, Inc. (Foods Division), conducts its prepared chicken business.

SANDERSON FARMS, INC. (NASDAQ:SAFM) Recent Trading Information

SANDERSON FARMS, INC. (NASDAQ:SAFM) closed its last trading session up +0.14 at 114.99 with 333,017 shares trading hands.