Exhibit 10.1
SEPARATION AGREEMENT
     This Separation Agreement (hereinafter “Agreement”) is made, entered into
and executed by and between Robert W. Manly, IV (hereinafter “Executive”) and
Premium Standard Farms, Inc., its past or present parents, subsidiaries,
affiliated entities, officers, directors, partners, principals, shareholders,
agents, employees, contractors, attorneys, representatives or assignees
(hereinafter the “Company”).
     Whereas, Executive and the Company executed an Employment Agreement dated
May 10, 2005, which Employment Agreement set for the terms and conditions of
Executive’s employment as President and Chief Operating Officer of the Company.
A true and correct copy of the Employment Agreement is attached hereto as
Exhibit A.
     Whereas, Executive has tendered his voluntary resignation to, and has
terminated his employment with, the Company, and has stated his intention to be
employed by Smithfield Foods, Inc. in the capacity of Executive Vice-President.
     Whereas, Executive acknowledges and agrees that Smithfield Foods, Inc. is a
Competitor of the Company as defined in the Employment Agreement in that it is
engaged in the meat processing or meat production industry.
     Whereas, Executive acknowledges and agrees that his employment with
Smithfield Foods, Inc. will violate and breach Section 8(d) of the Employment
Agreement, which prohibits Executive from taking a Competitive Position (as
defined in the Employment Agreement) with a Competitor.
     In consideration of the promises, agreements and mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Executive and the Company agree as
follows:
     1. Resignation Without Good Cause. Executive acknowledges and agrees that
he has tendered his voluntary resignation, on his own initiative, from his
position as President and Chief Operating Officer of the Company and that he has
terminated his employment with the Company effective July 7, 2006 (hereinafter
the Date of Termination). Executive agrees that his termination of his
employment is “without Good Reason,” as defined in the Employment Agreement.
     2. The Non-disclosure, Non-Solicitation of Customers and NonSolicitation of
Personnel Provisions of the Employment Agreement. Executive agrees that he will
not violate and will at all times and for all purposes abide by the
Non-disclosure, Non-Solicitation of Customers and Non-Solicitation of Personnel
covenants contained in Sections 8(c ), (e) and (f) of the Employment Agreement
while employed by Smithfield Foods, Inc., or for or on behalf of himself or any
other entity, for a period of eighteen months from and after July 7, 2006.

 

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     3. Amendment of Section 8(d) of the Employment Agreement: Executive and the
Company agree that Section 8(d) of the Employment Agreement shall be amended to
provide as follows:
     (d) Non-Competition. The Executive agrees that, while employed with the
Company, the Executive will not, either directly or indirectly, alone or in
conjunction with any other party, take any action in furtherance of or in
conjunction with a Competitive Position with a Competitor of the Company. The
Company and Executive acknowledge that Executive will be employed by a
Competitor of the Company following his voluntary resignation from the Company,
provided, however, that for a period of eighteen months after his Date of
Termination, the Executive will not, either directly or indirectly, alone or in
conjunction with any other party, directly or indirectly, contact, solicit,
divert or appropriate, any hog suppliers or contract hog growers with whom the
Company does or has done business or from whom the Company has actively sought
business.
     4. Other Terms and Conditions of the Employment Agreement. All other terms
and conditions of the Employment Agreement remain unaltered by this Agreement.
     5. Successors and Assigns; Severability. This Agreement shall inure to the
benefit of and be binding upon Executive and the Company and their respective
heirs, successors, trustees, transferees and assigns. If any one or more of the
provisions of this Agreement as applied to any party or any circumstance, shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
then such provision shall be deemed limited to the extent that such court
determines it enforceable, and as so limited, shall remain in full force and
effect. In the event that such court shall determine any such provision, or
portion thereof, wholly invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision shall have never been contained herein.
     6. Governing Law. The laws of the State of Missouri shall govern the
enforcement of this Agreement both as to interpretation and performance without
regard to any conflicts of laws analysis.
     7. Release. Executive releases and forever discharges the Company, each
past or present parent, subsidiary, affiliated entity, officer, director,
partner, principal, shareholder, agent, employee, contractor, attorney,
representative or assignee, from any and all causes of action, claims, demands,
grievances, costs and expenses, whether known or unknown, arising out of or in
any manner related to, Executive’s employment with the Company and his
resignation from the Company, including, but not limited to, claims which could
have been asserted, under federal, state, or local constitution, law,
regulation, ordinance, common law or contract, that in any way relate to
Executive’s employment or termination of employment, wages, employment benefits,
benefit plans, contracts, agreements or promises, express or implied, tort
claims, tortious interference claims or any term or condition of Executive’s
employment. Executive further agrees not to initiate any legal proceeding
relating to any matter released herein. Executive and the Company agree that
nothing in this Section 7, nor in this Agreement, shall

 

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affect Executive’s option to elect a continuation of benefits under the
Consolidated Omnibus Budget Reconciliation Act (COBRA), or his entitlement to
ten (10) days of vacation pay and any unpaid portion of Executive’s Base Salary
through the Date of Termination.
     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound and
to so bind their respective representatives, successors and assigns, set their
hands on the date written immediately below.

             
 
                ROBERT W. MANLY, IV    
 
                /s/ Robert W. Manly, IV              
 
           
 
  Dated:   7/7/06    
 
     
 
   
 
                PREMIUM STANDARD FARMS, INC.    
 
           
 
  By:   /s/ John M. Meyer    
 
     
 
   
 
  Title:   CEO    
 
     
 
   
 
  Dated:   7/7/06