On November 27, 2007, Cal-Maine Foods, Inc. announced the Company’s Board of Directors approved the adoption of a variable dividend policy to replace the Company’s fixed dividend policy which had been in place since 1998 and paid dividends at the rate of $0.05 per year, payable at $0.0125 per quarter. 

Effective with the third quarter of fiscal 2008, which ends on March 1, 2008, Cal-Maine will pay a dividend to shareholders of its Common Stock and Class A Common Stock on a quarterly basis for each quarter for which the Company reports net income computed in accordance with generally accepted accounting principles in an amount equal to one-third (1/3) of such quarterly income.  Dividends shall be paid to shareholders of record as of the sixtieth (60^th) day following the last day of such quarter and payable on the fifteenth (15^th) day following the record date. Following a quarter for which the Company does not report net income, the Company shall not pay a dividend for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the last quarter for which a dividend was paid.

Management and Board of Directors of Cal-Maine believe the variable dividend policy will more accurately reflect the results of our operations while recognizing and allowing for the cyclicality of the egg industry.