Exhibit 10.2

Smithfield Foods, Inc.

2008 Incentive Compensation Plan

Performance Share Unit Award

You have been selected to receive a Performance Share Unit Award under the
Smithfield Foods, Inc. 2008 Incentive Compensation Plan (the “Plan”), as
specified below:

 

Participant:  

 

Address:  

 

Number of Performance Share Units Units:  

 

Performance Period:   June 17, 2008 to June 16, 2013 Performance Measure:  
Average Stock Price (as defined below)

THIS AGREEMENT, effective on the date of shareholder approval of the Plan,
represents the grant of Performance Share Units by Smithfield Foods, Inc., a
Virginia corporation (the “Company”), to the Participant named above, pursuant
to the provisions of the Plan. All capitalized terms shall have the meanings in
the Plan. The parties agree as follows:

1. Performance Period. The Performance Period commenced on June 17, 2008 (the
“Grant Date”) and will end on June 16, 2013.

2. Value of Performance Share Units. Each Performance Share Unit shall represent
and have a value equal to one share of Company Stock, subject to adjustment as
provided in Section 16 of the Plan.

3. Performance Share Units and Achievement of Average Stock Price. Subject to
the remaining terms and conditions of this Agreement, the number of Performance
Share Units to be vested under this Award shall be based upon the Company’s
Average Stock Price (as defined below) during each Quarter (as defined below)
during the Performance Period under the table below:

 

Average Stock Price

  

Percentage Vested

$26.00    20% $32.00    20% $38.00    20% $44.00    20% $50.00    20%

The Average Stock Price shall be the volume-weighted average of the closing
price of Company Stock calculated by adding up the closing price of Company
Stock multiplied by the number of shares traded for each day in the Calculation
Period and then dividing by the total shares traded for the Calculation Period.
The Calculation Period is each fifteen (15) consecutive trading days during a
Quarter. A Quarter is each fiscal quarter of the Company or portion of a fiscal
quarter of the Company occurring within the Performance Period.

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If the Average Stock Price during a Quarter exceeds one or more price
thresholds, the percentage of the Performance Share Units to be vested under the
table above will be vested on the next Payment Date. Except as provided in
Section 11(a) below and in the following sentence, the Payment Date shall be the
fifteenth (15th) trading day after the end of each Quarter. Notwithstanding the
foregoing, the Payment Date, if any, with respect to each Quarter ending on or
prior to the first anniversary of the Grant Date shall be the thirtieth
(30th) day following the first anniversary of the Grant Date.

4. Termination Provisions. Except as provided in the next paragraph, the
Participant shall be eligible for vesting and payment of earned Performance
Share Units, as specified in Section 3, only if the Participant’s employment
with the Company continues through the Payment Date.

If the Participant suffers a Disability or dies, or in the event of the
Participant’s Retirement, the requirement that the Participant be employed by
the Company through the Payment Date is waived. In such a case, the Participant
(or in the event of the Participant’s death, the Participant’s beneficiary)
shall be eligible for a pro rata portion of the number of Performance Share
Units vested under Section 3 (determined as of each Payment Date and based on
actual Average Stock Price) equal to his number of full months of employment
during the Performance Period divided by sixty (60). Vesting and payment shall
be made on the relevant Payment Date.

In the event of the termination of the Participant’s employment by the
Participant or the Company for any reason other than the Participant’s
Disability or death during the Performance Period, the Participant shall forfeit
any unvested portion of this Award, with no payment to the Participant. The
Participant’s transfer of employment to the Company or any Related Company from
another Related Company or the Company during the Performance Period shall not
constitute a termination of employment.

5. Dividends. The Participant shall have no right to any dividends which may be
paid with respect to shares of Company Stock until any such shares are delivered
to the Participant on or following a Payment Date.

6. Form and Timing of Payment of Performance Share Units. Payment of the vested
Performance Share Units shall be made in Company Stock. Payment for vested
Performance Share Units shall be made on or as soon as administratively
practicable (but in any event no later than 2  1/2 months) following the Payment
Date.

7. Tax Withholding. The Company shall have the power and the right to deduct or
withhold Company Stock, or require the Participant or beneficiary to remit to
the Company, an amount sufficient to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of this Award.

8. Nontransferability. Performance Share Units may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution.

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9. Administration. This Award and the rights of the Participant hereunder are
subject to all the terms and conditions of the Plan, as the same may be amended
from time to time, as well as to such rules and regulations as the Committee may
adopt for administration of the Plan. It is expressly understood that the
Committee is authorized to administer, construe, and make all determinations
necessary or appropriate to the administration of the Plan and this Award, all
of which shall be binding upon the Participant. Any inconsistency between the
Award and the Plan shall be resolved in favor of the Plan.

10. Specific Restrictions Upon Shares. The Participant hereby agrees with the
Company as follows:

 

  (a) The Participant shall acquire the shares of Company Stock issuable with
respect to the Performance Share Units granted hereunder for investment purposes
only and not with a view to resale or other distribution thereof to the public
in violation of the Securities Act of 1933, as amended (the “1933 Act”), and
shall not dispose of any such Stock in transactions which, in the opinion of
counsel to the Company, violate the 1933 Act, or the rules and regulations
thereunder, or any applicable state securities or “blue sky” laws;

 

  (b) If any shares of Company Stock acquired with respect to the Performance
Share Units shall be registered under the 1933 Act, no public offering
(otherwise than on a national securities exchange, as defined in the Exchange
Act) of any such Stock shall be made by the Participant under such circumstances
that he or she (or such other person) may be deemed an underwriter, as defined
in the 1933 Act; and

 

  (c) The Company shall have the authority to endorse upon the certificate or
certificates representing the Shares acquired hereunder such legends referring
to the foregoing restrictions.

11. Miscellaneous.

 

  (a) Change of Control. In the event of a Qualifying Change of Control, all
unvested Performance Share Units granted under this Award shall be fully vested
and payment for vested Performance Share Units shall be made immediately. The
date of a Qualifying Change of Control shall be considered a Payment Date for
purposes of this Agreement.

 

  (b) Adjustments to Shares. Subject to Plan Section 16, in the event of any
merger, reorganization, recapitalization, stock dividend, stock split,
extraordinary distribution with respect to the Stock or other change in
corporate structure affecting the Stock, the Committee or Board if Directors of
the Company may make such substitution or adjustments in the aggregate number
and kind of shares of Company Stock subject to this Performance Share Unit Award
as it may determine, in its sole discretion, to prevent dilution or enlargement
of rights.

 

  (c)

Notices. Any written notice required or permitted under this Award shall be
deemed given when delivered personally, as appropriate, either to the
Participant or to the Executive Compensation Department of the Company, or when
deposited in a United States Post Office as registered mail, postage prepaid,
addressed, as appropriate, either to the Participant at his or her address set
forth above or such other address as he or she may designate in

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writing to the Company, or to the Attention: Corporate Secretary., at its
headquarters office or such other address as the Company may designate in
writing to the Participant.

 

  (d) Failure To Enforce Not a Waiver. The failure of the Company to enforce at
any time any provision of this Award shall in no way be construed to be a waiver
of such provision or of any other provision hereof.

 

  (e) Governing Law. All questions concerning the construction, validity and
interpretation of this Award shall be governed by and construed according to the
internal law, and not the law of conflicts, of the Commonwealth of Virginia,
except that questions concerning the relative rights of the Company and the
Participant with respect to Shares, shall be governed by the corporate law of
the Commonwealth of Virginia.

 

  (f) Provisions of Plan. The Performance Share Units provided for herein are
granted pursuant to the Plan, and said Performance Share Units are in all
respects governed by the Plan and subject to all of the terms and provisions
thereof, whether such terms and provisions are incorporated in this Award solely
by reference or expressly cited herein. If there is any inconsistency between
the terms of this Award and the terms of the Plan, the Plan’s terms shall
completely supersede and replace the conflicting terms of this Award.

 

  (g) Code section 162(m). It is intended that payments pursuant to this Award
to a Participant who is a “covered officer” within the meaning of section 162(m)
of the Internal Revenue Code constitute “qualified performance-based
compensation” within the meaning of section 1.162.27(e) of the Income Tax
Regulations. To the maximum extent possible, this Award and the Plan shall be so
interpreted and construed. No amounts in excess of the number of Performance
Share Units earned under Section 3 of this Award shall be paid to the
Participant.

 

  (h) Section 16 Compliance. If the Participant is subject to Section 16 of the
Exchange Act, except in the case of death or disability, at least six months
must elapse from the date of acquisition of the Performance Share Units granted
hereunder to the date of the Participant’s disposition of such Performance Share
Units or the underlying shares of Stock.

 

  (i) Shareholder Approval. The effectiveness of this Award is subject to, and
contingent upon, the approval of the Plan by the shareholders of the Company.
Unless and until such approval has been obtained, this Award shall be of no
force or effect and shall create no legally binding right or obligation on the
part of either the Company or the Participant.

[ SIGNATURE PAGE FOLLOWS ]

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IN WITNESS WHEREOF, the Company has executed this Award in duplicate on this
         days of             , 2008.

 

SMITHFIELD FOODS, INC.

By:

 

 

The undersigned hereby accepts, and agrees to, all terms and provisions of the
forgoing Award.