Exhibit 10.1

 

 

CHANGE IN CONTROL AGREEMENT

BETWEEN

DONALD JACKSON

AND

PILGRIM’S PRIDE CORPORATION

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TABLE OF CONTENTS

 

             

Page

1.

  CERTAIN DEFINITIONS    1

2.

  EMPLOYMENT PERIOD    2

3.

  TERMS OF EMPLOYMENT    2   (a)    Position and Duties    2   (b)   
Compensation    3

4.

  TERMINATION OF EMPLOYMENT    4   (a)    Death or Disability    4   (b)   
Cause    4   (c)    Good Reason    5   (d)    Notice of Termination    6   (e)
   Date of Termination    6

5.

  OBLIGATIONS OF THE COMPANY UPON TERMINATION    6   (a)    Termination by
Executive for Good Reason; Termination by the Company Other than for Cause or
Disability    6   (b)    Death or Disability    8   (c)    Cause; Other than for
Good Reason    8   (d)    Expiration of Employment Period    8

6.

  NON-EXCLUSIVITY OF RIGHTS    8

7.

  FULL SETTLEMENT; NO MITIGATION    9

8.

  COSTS OF ENFORCEMENT    9

9.

  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY    9

10.

  RESTRICTIONS ON CONDUCT OF EXECUTIVE    11   (a)    General    11   (b)   
Definitions    12   (c)    Restrictive Covenants    13   (d)    Enforcement of
Restrictive Covenants    14

11.

  ARBITRATION    14

12.

  SUCCESSORS    15

13.

  MISCELLANEOUS    15   (a)    Governing Law    15   (b)    Captions    15   (c)
   Amendments    15   (d)    Notices    15

 

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TABLE OF CONTENTS

(continued)

 

             

Page

  (e)    Severability    15   (f)    Withholding    16   (g)    Waivers    16  
(h)    Status Before and After Effective Date    16

 

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CHANGE IN CONTROL AGREEMENT

AGREEMENT by and between Pilgrim’s Pride Corporation, a Delaware corporation
(the “Company”) and Donald Jackson (“Executive”), dated as of September 15,
2009.

The Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control and to encourage
Executive’s full attention and dedication to the Company currently and in the
event of any threatened or pending Change in Control, and to provide Executive
with compensation and benefits arrangements upon a Change in Control which
ensure that the compensation and benefits expectations of Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions.

(a) “Effective Date” shall mean the first date during the Change in Control
Period (as defined in Section l(c) hereof) on which a Change in Control (as
defined in Section 1(b) hereof) occurs. Anything in this Agreement to the
contrary notwithstanding, if Executive’s employment with the Company is
terminated within three months prior to the date on which a Change in Control
occurs, and if it is reasonably demonstrated by Executive that such termination
of employment (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control or (ii) otherwise arose in
connection with or anticipation of a Change in Control and if the Change in
Control is consummated, then for all purposes of this Agreement, the “Effective
Date” shall mean the date immediately prior to the date of such termination of
employment.

(b) “Change in Control” shall mean the occurrence of any of the following
events: (i) a direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation) of all or substantially all the
assets of the Company and its subsidiaries taken as a whole to any “Person” or
“group” (as such terms are used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) (other than a direct or an indirect subsidiary of the
Company) as an entirety or substantially as an entirety in one transaction or
series of transactions; (ii) the consummation of any transaction (including,
without limitation, any merger, consolidation or recapitalization) to which the
Company is a party the result of which is that immediately after such
transaction the stockholders of the Company immediately prior to such
transaction hold less than 50.1% of the total voting power generally entitled to
vote in the election of directors, managers or trustees of the Person surviving
such transaction; (iii) any “Person” or “group” (as such terms are used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) becomes the
ultimate “beneficial owner,” as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, of more than 50% of the total voting power
generally entitled to vote in the election of directors, managers or trustees of
the Company on a fully-diluted basis; (iv) during any period of two consecutive
years, individuals who at the beginning of such period constituted the members
of the Board (together with any new directors whose election by such Board or
whose nomination for election by the stockholders of the Company was approved by
a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of the Board then in office; or (v) the adoption of a
plan for the liquidation or dissolution of the Company.

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(c) “Change in Control Period” shall mean the period commencing on the date
hereof and ending on December 31, 2011; provided, however, that commencing on
December 31, 2010, and on each annual anniversary of such date (such date and
each annual anniversary thereof shall be hereinafter referred to as the “Renewal
Date”), unless previously terminated, the Change in Control Period shall be
automatically extended so as to terminate two years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to Executive that the Change in Control Period shall not be so extended.

(d) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(e) “Employment Period” means 24 months, provided, however, that the Employment
Period shall terminate upon Executive’s termination of employment for any
reason.

(f) “Person” shall mean and include any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, entity, party or government (whether national,
federal, state, county, city, municipal, or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof).

2. Employment Period. The Company hereby agrees to continue Executive in its
employ, and Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement, for the period commencing
on the Effective Date and ending on the last day of the Employment Period.

3. Terms of Employment.

(a) Position and Duties.

(i) During the Employment Period, Executive’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 120-day period immediately preceding the Effective Date.

(ii) During the Employment Period, and excluding any periods of vacation and
sick leave to which Executive is entitled, Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to Executive hereunder, to use Executive’s reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the Employment
Period it shall not be a violation of this Agreement for Executive to (A) serve
on corporate, civic or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly interfere
with the performance of Executive’s responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood and agreed
that to the extent that any such activities have been conducted by Executive
prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of Executive’s responsibilities to the Company.

 

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(b) Compensation.

(i) Base Salary. During the Employment Period, Executive shall receive an annual
base salary (“Annual Base Salary”) at a rate at least equal to the rate of base
salary in effect on the date of this Agreement or, if greater, on the Effective
Date, paid or payable (including any base salary which has been earned but
deferred) to Executive by the Company and its affiliated companies. During the
Employment Period, the Annual Base Salary shall be reviewed no more than twelve
months after the last salary increase awarded to Executive prior to the
Effective Date and thereafter at least annually (the date of such review being
referred to herein as the “Annual Review Date”). Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to Executive
under this Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as used in this Agreement shall refer
to Annual Base Salary as so increased. As used in this Agreement, the term
“affiliated companies” shall include any company controlled by, controlling or
under common control with the Company.

(ii) Annual Bonus. In addition to Annual Base Salary, Executive shall be
provided, for each fiscal year ending during the Employment Period, an annual
bonus opportunity at least equal to Executive’s highest bonus opportunity under
the Pilgrim’s Pride Corporation Performance Incentive Plan, FY2009 Performance
Bonus Plan, Short-Term Management Incentive Plan or any comparable bonus
opportunity under any predecessor or successor plans (the “Prior Bonus Plan”),
during the last three fiscal years prior to the Effective Date (annualized in
the event that Executive was not employed by the Company for the whole of such
fiscal year). Each annual bonus payable under this Section 3(b)(ii) shall be
paid at the same time that bonuses were payable under the applicable Prior Bonus
Plan, unless Executive shall elect to defer the receipt of such Annual Bonus
pursuant to an arrangement that satisfies the requirements of Section 409A of
the Code.

(iii) Incentive, Savings and Retirement Plans. During the Employment Period,
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies, but in no event
shall such plans, practices, policies and programs provide Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for Executive under such
plans, practices, policies and programs as in effect at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.

(iv) Welfare Benefit Plans. During the Employment Period, Executive and/or
Executive’s eligible dependents, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated companies.

 

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(v) Expenses. During the Employment Period, Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by Executive
in accordance with the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for Executive at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

(vi) Fringe Benefits. During the Employment Period, Executive shall be entitled
to fringe benefits, including, without limitation, tax and financial planning
services, payment of club dues, and, if applicable, use of an automobile and
payment of related expenses, in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

(vii) Vacation. During the Employment Period, Executive shall be entitled to
paid vacation in accordance with the most favorable plans, policies, programs
and practices of the Company and its affiliated companies as in effect for
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies.

4. Termination of Employment.

(a) Death or Disability. Executive’s employment shall terminate automatically
upon Executive’s death during the Employment Period. If the Company determines
in good faith that the Disability of Executive has occurred during the
Employment Period (pursuant to the definition of Disability set forth below), it
may give to Executive written notice of its intention to terminate Executive’s
employment. In such event, Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such written notice by
Executive (the “Disability Effective Date”), provided that, within the 30 days
after such receipt, Executive shall not have returned to full-time performance
of Executive’s duties. For purposes of this Agreement, “Disability” shall mean
the inability of Executive, as determined by the Board, to perform the
responsibilities and functions of the position held by Executive, with or
without reasonable accommodation, by reason of any medically determined physical
or mental impairment which has lasted (or can reasonably be expected to last)
for a period of not less than one hundred eighty (180) consecutive days. At the
request of Executive or his or her personal representative, the Board’s
determination that the Disability of Executive has occurred shall be certified
by two physicians mutually agreed upon by Executive, or his or her personal
representative, and the Company. Failing such independent certification (if so
requested by Executive), Executive’s termination shall be deemed a termination
by the Company without Cause and not a termination by reason of his or her
Disability.

(b) Cause. The Company may terminate Executive’s employment during the
Employment Period for Cause. For purposes of this Agreement, a termination shall
be considered to be for “Cause” if Executive is terminated upon the occurrence
after the Effective Date, as determined by the Board, of any one of the
following specific material acts or failure to act by Executive:

(i) Executive’s conviction in a court of law of, or entry of a guilty plea or
plea of no contest to, a felony charge (regardless of whether subject to
appeal);

(ii) the willful and continued failure of Executive to perform substantially
Executive’s duties (as contemplated by Section 3(a) hereof) with the Company or
any of its affiliated companies (other than any such failure resulting from
incapacity due to physical or mental illness or following Executive’s delivery
of a Notice of Termination for Good Reason);

 

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(iii) any willful act that constitutes, on the part of Executive, fraud,
dishonesty in any material respect, breach of fiduciary duty, misappropriation,
embezzlement or gross misfeasance of duty; or

(iv) willful disregard or continued breach in any material respect of published
Company (or of any of its affiliated companies) policies and procedures, codes
of ethics or business conduct or any material duty or obligation under
Section 10(c) hereof;

provided, however, that in the case of (ii) and (iv) above, such conduct or
omission shall not constitute “Cause” unless the Board, the Chief Executive
Officer or the Company shall have delivered to Executive notice identifying with
specificity (A) the conduct or omission the Board, Chief Executive Officer or
the Company believes constitutes “Cause,” (B) reasonable action that would
remedy such objection, and (C) a reasonable time (not less than 30 days) within
which Executive may take such remedial action, and Executive shall not have
taken such specified remedial action within the specified time.

For purposes of this Section 4(b), no act, or failure to act, on the part of
Executive shall be considered “willful” unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive’s
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. The cessation of employment of
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board (excluding Executive, if Executive is a member of the Board) at a meeting
of the Board called and held for such purpose (after reasonable notice is
provided to Executive and Executive is given an opportunity, together with
counsel for Executive, to be heard before the Board), finding that, in the good
faith opinion of the Board, Executive is guilty of any of the conduct described
in Section 4(b)(i) through (iv), and specifying the particulars thereof in
detail (references in this Section 4(b) to the Board shall refer to any
successor board of directors if the Board is no longer constituted).

(c) Good Reason. Executive’s employment may be terminated by Executive for Good
Reason. For purposes of this Agreement, “Good Reason” shall mean:

(i) the assignment to Executive of any duties inconsistent in any material
respect with Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 3(a) of this Agreement or any other action by the Company which
results in a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice;

(ii) any failure in any material respect by the Company to comply with any of
the provisions of Section 3(b) hereof, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by Executive;

(iii) any purported termination by the Company of Executive’s employment
otherwise than as expressly permitted by this Agreement;

 

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(iv) any failure by the Company to comply with and satisfy Section 12(c) hereof;
or

(v) any other material breach by the Company of any provision of this Agreement.

A termination by Executive shall not constitute termination for Good Reason
unless Executive shall first have delivered to the Company written notice
identifying with specificity the occurrence claimed to give rise to a right to
terminate for Good Reason, and there shall have passed a reasonable time (not
less than 30 days) within which the Company may take action to correct, rescind
or otherwise substantially reverse the event supporting the basis for a
termination for Good Reason as identified by Executive. Executive’s mental or
physical incapacity following the occurrence of an event described in Sections
4(c)(i) through (vi) hereof shall not affect Executive’s ability to terminate
employment for Good Reason.

(d) Notice of Termination. Any termination by the Company or Executive shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 13(d) hereof. For purposes of this Agreement, a “Notice
of Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive’s employment under the provision
so indicated, and (iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date. The
failure by Executive or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company, respectively, hereunder
or preclude Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing Executive’s or the Company’s rights hereunder.

(e) Date of Termination. “Date of Termination” means (i) if Executive’s
employment is terminated by the Company for Cause, or by Executive for Good
Reason, the date of receipt of the Notice of Termination by Executive or the
Company, as applicable, or any later date specified therein within 60 days after
receipt of the Notice of Termination, as the case may be, (ii) if Executive’s
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies Executive of
such termination, and (iii) if Executive’s employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may be. To the extent
amounts or benefits payable under this Agreement that are deferred compensation
subject to Section 409A are payable in connection with Executive’s termination
of employment, the Company and Executive shall take all steps necessary
(including with regard to any post-termination services by Executive) to ensure
that any termination described in this Section 4 constitutes a “separation from
service” within the meaning of Section 409A of the Code, and notwithstanding
anything contained herein to the contrary, the date on which such separation
from service takes place shall be the “Date of Termination.”

5. Obligations of the Company upon Termination.

(a) Termination by Executive for Good Reason; Termination by the Company Other
than for Cause or Disability. If, during the Employment Period, the Company
terminates Executive’s employment other than for Cause or Disability, or
Executive terminates his or her employment for Good Reason during the 270-day
period following the occurrence of an event giving rise to Good Reason:

(i) the Company shall pay to Executive in a lump sum in cash within 30 days
after the Date of Termination the aggregate of the following amounts:

 

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A. the sum of (1) Executive’s Annual Base Salary through the Date of Termination
to the extent not theretofore paid, (2) Executive’s annual bonus for the fiscal
year immediately preceding the fiscal year in which the Date of Termination
occurs, if such bonus has not been paid as of the Date of Termination, (3) any
accrued vacation pay to the extent not theretofore paid (the sum of the amounts
described in clauses (1), (2) and (3) shall be hereinafter referred to as the
“Accrued Obligations”) and (4) the product of (x) Executive’s target annual
incentive bonus for the fiscal year in which the Date of Termination occurs or
if none, the target annual incentive bonus for the year in which the Change in
Control occurred or if none, the target annual incentive bonus used for an
equivalent position in the next preceding year in which an annual incentive
bonus was awarded (“Target Annual Bonus”) and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 (the “Pro Rata Bonus”);
provided, however, that, notwithstanding the foregoing, if Executive has made an
irrevocable election under any deferred compensation arrangement subject to
Section 409A of the Code to defer any portion of the annual bonus described in
clause (2) above, then for all purposes of this Section 5, such deferral
election, and the terms of the applicable arrangement shall apply to the same
portion of the amount described in such clause (2), and such portion shall not
be considered as part of the “Accrued Obligations” but shall instead be an
“Other Accrued Benefit” (as defined below); and

B. an amount equal to 300% times the sum of Executive’s Annual Base Salary and
Target Annual Bonus; and

(ii) Notwithstanding anything to the contrary in any applicable award agreement,
(A) all of Executive’s outstanding stock options and other equity awards in the
nature of rights that may be exercised shall become fully vested and
exercisable, (B) all time-based vesting restrictions on Executive’s outstanding
equity awards shall lapse, and (C) the target payout opportunities attainable
under all of Executive’s outstanding performance-based equity awards shall be
deemed to have been fully earned as of the Date of Termination based upon an
assumed achievement of all relevant performance goals at the “target” level and
there shall be a prorata payout to Executive or his or her estate within 30 days
following the Date of Termination based upon the length of time within the
performance period that has elapsed prior to the Date of Termination. To the
extent necessary, this Agreement is hereby deemed an amendment of any such
outstanding equity award.

(iii) Provided Executive timely elects coverage, the Company shall pay for the
premiums to maintain group coverage for Executive and his or her dependents
under the continuation coverage provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) for eighteen (18) months after the Date of
Termination, or until Executive becomes eligible for group insurance benefits
from another employer (including self-employment), whichever occurs first.
Executive understands that Executive has an obligation to inform the Company if
Executive receives group coverage from another employer and that Executive may
not increase the number of designated dependants if any, during this period of
Company-paid coverage unless Executive does so at Executive’s own expense. The
period of such Company-paid COBRA coverage shall be considered part of
Executive’s COBRA coverage entitlement period, and may, for tax purposes, be
considered income to Executive; and

(iv) to the extent not theretofore paid or provided, the Company shall timely
pay or provide to Executive any Other Accrued Benefits (as defined in Section 6
hereof).

Notwithstanding the foregoing provisions of this Section 5(a), in the event that
as of the Date of Termination Executive 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 the Date of Termination)
(a “Specified Employee”), amounts or benefits that are deferred compensation
subject to

 

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Section 409A, as determined in the sole discretion of the Company, that would
otherwise be payable or provided under Sections 5(a)(i) or (ii) during the
six-month period immediately following the Date of Termination (other than the
Accrued Obligations and Other Accrued Benefits) 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.

(b) Death or Disability. If Executive’s employment is terminated by reason of
Executive’s death or Disability during the Employment Period, this Agreement
shall terminate without further obligations to Executive or Executive’s legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Accrued Benefits.
Accrued Obligations shall be paid to Executive or Executive’s estate or
beneficiaries, as applicable, in a lump sum in cash within 30 days of the Date
of Termination. With respect to the provision of Other Accrued Benefits, the
term Other Accrued Benefits as used in this Section 5(b) shall include, without
limitation, and Executive or Executive’s estate and/or beneficiaries shall be
entitled to receive, benefits under such plans, programs, practices and policies
relating to death or disability benefits, if any, as are applicable to Executive
on the Date of Termination.

(c) Cause; Other than for Good Reason. If Executive’s employment shall be
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to Executive other than the obligation to
pay to Executive the Accrued Obligations and any Other Accrued Benefits, in each
case to the extent theretofore unpaid. If Executive voluntarily terminates
employment during the Employment Period, excluding a resignation for Good
Reason, this Agreement shall terminate without further obligations to Executive,
other than the obligation to pay to Executive the Accrued Obligations and any
Other Accrued Benefits, in each case to the extent theretofore unpaid.

(d) Expiration of Employment Period. If Executive’s employment shall be
terminated after the normal expiration of the Employment Period, this Agreement
shall terminate without further obligations to Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Accrued
Benefits.

6. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any employee benefit plan,
program, policy or practice provided by the Company or its affiliated companies
and for which Executive may qualify, except as specifically provided herein.
Amounts that are vested benefits or which Executive is otherwise entitled to
receive under any plan, policy, practice or program of the Company or any of its
affiliated companies at or subsequent to the Date of Termination (“Other Accrued
Benefits”) shall be payable in accordance with such plan, policy, practice or
program except as explicitly modified by this Agreement. Notwithstanding
anything to the contrary in the foregoing or in this Agreement, if Executive
receives payments and benefits pursuant to Section 5(a) hereof, Executive shall
not be entitled to any severance pay or benefits under any severance plan,
program or policy of the Company and its affiliated companies, unless otherwise
specifically provided therein in a specific reference to this Agreement,
provided, however, that nothing in this sentence or in any other provision of
this Agreement shall be construed to reduce or limit any severance payment or
other benefit to Executive under the employment agreement entered into with
Executive dated January 27, 2009. Notwithstanding anything to the contrary in
such employment agreement, Executive may exchange, transfer or dispose of any
shares of common stock of the Company held by him in connection with any merger,
share exchange, conversion, recapitalization, reorganization, business
combination or other extraordinary transaction involving the Company or any of
its securities by operation of law or pursuant its certificate of incorporation,
including without limitation any exchange of shares for shares or other
securities of the reorganized Company in connection with its emergence from
Chapter 11 or any exchange or conversion of shares of the Company into
securities of another company

 

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pursuant to the terms of the Company’s plan of reorganization under Chapter 11
or any agreement, instrument or right issued or adopted in connection with such
plan of reorganization, or to the extent approved by the Board of Directors of
the Company.

7. Full Settlement; No Mitigation. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not Executive obtains other employment.

8. Costs of Enforcement. The Company shall reimburse Executive, on a current
basis, for all reasonable legal fees and related expenses incurred by Executive
in connection with this Agreement, including, without limitation, all such fees
and expenses, if any, incurred (i) by Executive in contesting or disputing any
termination of Executive’s employment, or (ii) Executive’s seeking to obtain or
enforce any right or benefit provided by this Agreement, in each case,
regardless of whether or not Executive’s claim is upheld by an arbitral panel or
a court of competent jurisdiction; provided, however, Executive shall be
required to repay to the Company any such amounts to the extent that an arbitral
panel or a court issues a final and non-appealable order, judgment, decree or
award setting forth the determination that the position taken by Executive was
frivolous or advanced by Executive in bad faith. In addition, Executive shall be
entitled to be paid all reasonable legal fees and expenses, if any, incurred in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit hereunder. All
such payments shall be made within five business days after delivery of
Executive’s respective written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may require.

9. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise, but determined without regard to any additional payments required
under this Section 9) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the Code or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then Executive shall be entitled to receive an additional payment
(a “Gross-Up Payment”) in an amount such that after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

Notwithstanding the foregoing provisions of this Section 9(a), with respect to
each Executive (other than the CEO), if the Parachute Value (as defined below)
of all Payments does not exceed 110% of such Executive’s Safe Harbor Amount (as
defined below), then the Company shall, at its option, not pay Executive a
Gross-Up Payment, and the Payments due under this Agreement shall be reduced so
that the Parachute Value of all Payments, in the aggregate, equals the Safe
Harbor Amount; provided, that if even after all Payments due under this
Agreement are reduced to zero, the Parachute Value of all Payments would still
exceed the Safe Harbor Amount, then no reduction of any Payments shall be made
and the Gross-Up Payment shall be made. The reduction of the Payments due
hereunder, if applicable, shall be made by first reducing the Payments under
Section 5(a)(i)(B), unless an alternative method of reduction is elected by
Executive, and in any event shall be made in such a manner as to

 

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maximize the economic present value of all Payments actually made to Executive,
determined by the Accounting Firm (as defined in Section 9(b) below) as of the
date of the Change in Control for purposes of Section 280G of the Code using the
discount rate required by Section 280G(d)(4) of the Code. For purposes of this
Section 9, the “Parachute Value” of a Payment means the present value as of the
date of the Change in Control for purposes of Section 280G of the Code of the
portion of such Payment that constitutes a “parachute payment” under
Section 280G(b)(2) of the Code, as determined by the Accounting Firm for
purposes of determining whether and to what extent the Excise Tax will apply to
such Payment. For purposes of this Section 9, Executive’s “Safe Harbor Amount”
means one dollar less than three times Executive’s “base amount” within the
meaning of Section 280G(b)(3) of the Code.

(b) Subject to the provisions of Section 9(c) hereof, all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be used in arriving at such determination, shall be made in accordance with
the principles of Section 280G of the Code by a certified public accounting firm
as may be designated by the Company (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and Executive within 15
business days of the receipt of notice from Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to Executive within five days of the
receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of Executive.

(c) Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than thirty days after Executive is informed in writing of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which it
gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:

(i) give the Company any information reasonably requested by the Company
relating to such claim,

(ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order effectively to contest
such claim, and

 

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(iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions to
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance, and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by Executive of an amount advanced by the Company
pursuant to Section 9(c) hereof, Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company’s
complying with the requirements of Section 9(c) hereof) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 9(c) hereof, a
determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

10. Restrictions on Conduct of Executive.

(a) General. Executive and the Company understand and agree that the purpose of
the provisions of this Section 10 is to protect legitimate business interests of
the Company, as more fully described below, and is not intended to impair or
infringe upon Executive’s right to work, earn a living, or acquire and possess
property from the fruits of his or her labor. Executive hereby acknowledges that
Executive has received good and valuable consideration for the post-employment
restrictions set forth in this Section 10 in the form of the compensation and
benefits provided for herein. Executive hereby further acknowledges that the
post-employment restrictions set forth in this Section 10 are reasonable and
that they do not, and will not, unduly impair his or her ability to earn a
living after the termination of this Agreement

Therefore, Executive shall be subject to the restrictions set forth in this
Section 10.

 

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(b) Definitions. The following capitalized terms used in this Section 10 shall
have the meanings assigned to them below, which definitions shall apply to both
the singular and the plural forms of such terms:

“Competitive Position” means any employment or consulting arrangement with a
Competitor in which Executive will use or is likely to use any Confidential
Information or Trade Secrets, or in which Executive has duties for such
Competitor that are the same or similar to those services actually performed by
Executive for the Company.

“Competitor” means the business units of the following entities engaged in
poultry production (including without limitation broiler production, processing,
sales and marketing): Tyson Foods, Inc.; Perdue Farms, Inc.; Wayne Farms LLC;
Sanderson Farms, Inc. and each successor and assign of such business units that
is engaged in such poultry production to the extent such successor or assign is
among the five largest producers in the poultry industry measured by the volume
of poultry production.

“Confidential Information” means all information regarding the Company, its
activities, business or clients that is the subject of reasonable efforts by the
Company to maintain its confidentiality and that is not generally disclosed by
practice or authority to persons not employed by the Company, but that does not
rise to the level of a Trade Secret. “Confidential Information” shall include,
but is not limited to, financial plans and data concerning the Company or any of
its affiliated companies; management planning information; business plans;
operational methods; market studies; marketing plans or strategies; product
development techniques or plans; customer lists; customer files, data and
financial information, details of customer contracts; current and anticipated
customer requirements; identifying and other information pertaining to business
referral sources; past, current and planned research and development; business
acquisition plans; and new personnel acquisition plans. “Confidential
Information” shall not include information that has become generally available
to the public by the act of one who has the right to disclose such information
without violating any right or privilege of the Company. This definition shall
not limit any definition of “confidential information” or any equivalent term
under state or federal law.

“Determination Date” means the Date of Termination or any earlier date (during
the Employment Period) of an alleged breach of the Restrictive Covenants by
Executive.

“Person” means any individual or any corporation, partnership, joint venture,
limited liability company, association or other entity or enterprise.

“Principal or Representative” means a principal, owner, partner; stockholder,
joint venturer, investor, member, trustee, director, officer, manager, employee,
agent, representative or consultant.

“Protected Employees” means employees of the Company who were employed by the
Company or its affiliated companies at any time within six months prior to the
Determination Date, other than those who were discharged by the Company or such
affiliated employer without cause.

“Restricted Period” means 24 months, from the Date of Termination; provided,
however, that the Restricted Period shall end with respect to the covenants in
clauses (ii) and (iii) of Section 10(c) on the 60th day after the Date of
Termination in the event the Company breaches its obligation, if any, to make
any payment required under Section 5(a)(i).

 

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“Restricted Territory” means the States of Alabama, Arkansas, Florida, Georgia,
Kentucky, Louisiana, Maryland, North Carolina, South Carolina, Tennessee, Texas,
Virginia and West Virginia and Mexico.

“Restrictive Covenants” means the restrictive covenants contained in
Section 10(c) hereof.

“Third Party Information” means confidential or proprietary information subject
to a duty on the part of the Company or its affiliated companies to maintain the
confidentiality of such information and to use it only for certain limited
purposes.

“Trade Secret” means all information, without regard to form, including, but not
limited to, technical or nontechnical data, a formula, a pattern, a compilation,
a program, a device, a method, a technique, a drawing, a process, financial
data, financial plans, product plans, distribution lists or a list of actual or
potential customers, advertisers or suppliers which is not commonly known by or
available to the public and which information: (A) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (B) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Without limiting the
foregoing, Trade Secret means any item of confidential information that
constitutes a “trade secret(s)” under the common law or statutory law of any of
the States of Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana,
Maryland, North Carolina, South Carolina, Tennessee, Texas, Virginia and West
Virginia and Mexico.

(c) Restrictive Covenants.

(i) Restriction on Disclosure and Use of Confidential Information and Trade
Secrets. Executive understands and agrees that the Confidential Information and
Trade Secrets constitute valuable assets of the Company and its affiliated
companies, and may not be converted to Executive’s own use. Accordingly,
Executive hereby agrees that Executive shall not, directly or indirectly, at any
time during the Restricted Period reveal, divulge, or disclose to any Person not
expressly authorized by the Company any Confidential Information, and Executive
shall not, directly or indirectly; at any time, during the Restricted Period use
or make use of any Confidential Information in connection with any business
activity other than that of the Company. Throughout the term of this Agreement
and at all times after the date that this Agreement terminates for any reason,
Executive shall not directly or indirectly transmit or disclose any Trade Secret
of the Company to any Person, and shall not make use of any such Trade Secret,
directly or indirectly, for himself or herself or for others, without the prior
written consent of the Company. The parties acknowledge and agree that this
Agreement is not intended to, and does not, alter either the Company’s rights or
Executive’s obligations under any state or federal statutory or common law
regarding trade secrets and unfair trade practices.

Anything herein to the contrary notwithstanding, Executive shall not be
restricted from disclosing or using Confidential Information or any Trade Secret
that is required to be disclosed by law, court order or other legal process;
provided, however, that in the event disclosure is required by law, Executive
shall provide the Company with prompt notice of such requirement so that the
Company may seek an appropriate protective order prior to any such required
disclosure by Executive.

(ii) Nonsolicitation of Protected Employees. Executive understands and agrees
that the relationship between the Company and each of its Protected Employees
constitutes a valuable asset of the Company and may not be converted to
Executive’s own use. Accordingly, Executive hereby agrees that during the
Restricted Period, Executive shall not, directly or indirectly, on Executive’s
own behalf or as a Principal or Representative of any Person or otherwise
solicit or induce any Protected Employee to terminate his or her employment
relationship with the Company or any of its affiliated companies or to enter
into employment with any other Person.

 

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(iii) Noncompetition with the Company. In consideration of the compensation and
benefits being paid and to be paid by the Company to Executive hereunder,
Executive hereby agrees that, during the Restricted Period, Executive will not,
without prior written consent of the Company, directly or indirectly, seek or
obtain a Competitive Position in the Restricted Territory. Executive
acknowledges that in the performance of his or her duties for the Company he or
she is charged with operating on the Company’s behalf throughout the Restricted
Territory and he or she hereby acknowledges, therefore, that the Restricted
Territory is reasonable.

(d) Enforcement of Restrictive Covenants.

(i) Rights and Remedies Upon Breach. In the event Executive breaches, or
threatens to commit a breach of any of the provisions of the Restrictive
Covenants, the Company shall have the right and remedy to enjoin, preliminarily
and permanently, Executive from violating or threatening to violate the
Restrictive Covenants and to have the Restrictive Covenants specifically
enforced by any court or tribunal of competent jurisdiction, it being agreed
that any breach or threatened breach of the Restrictive Covenants would cause
irreparable injury to the Company and that money damages would not provide an
adequate remedy to the Company. Such right and remedy shall be independent of
any others and severally enforceable, and shall be in addition to and not in
lieu of, any other rights and remedies available to the Company at law or in
equity.

(ii) Severability of Covenants. Executive acknowledges and agrees that the
Restrictive Covenants are reasonable and valid in time and scope and in all
other respects. The covenants set forth in this Agreement shall be considered
and construed as separate and independent covenants. Should any part or
provision of any covenant be held invalid, void or unenforceable, such
invalidity, voidness or unenforceability shall not render invalid, void or
unenforceable any other part or provision of this Agreement. If any portion of
the foregoing provisions is found to be invalid or unenforceable because its
duration, the territory, the definition of activities or the definition of
information covered is considered to be invalid or unreasonable in scope, the
invalid or unreasonable term shall be redefined, or a new enforceable term
provided, such that the intent of the Company and Executive in agreeing to the
provisions of this Agreement will not be impaired and the provision in question
shall be enforceable to the fullest extent of the applicable laws.

11. Arbitration. Any claim or dispute arising under or relating to this
Agreement or the breach, termination, or validity of any term of this Agreement
shall be subject to arbitration, and prior to commencing any court action, the
parties agree that they shall arbitrate all controversies; provided, however,
that nothing in this Section 11 shall prohibit the Company from exercising its
right under Section 10 hereof to pursue injunctive remedies with respect to a
breach or threatened breach of the Restrictive Covenants. The arbitration shall
be conducted in Dallas, Texas, in accordance with the Employment Dispute Rules
of the American Arbitration Association and the Federal Arbitration Act, 9
U.S.C. §l, et. seq. The arbitrator(s) shall be authorized to award both
liquidated and actual damages, in addition to injunctive relief, but no punitive
damages. The arbitrator(s) may also award attorneys’ fees and costs, without
regard to any restriction on the amount of such award under Texas or other
applicable law. Such an award shall be binding and conclusive upon the parties
hereto, subject to 9 U.S.C. §10. Each party shall have the right to have the
award made the judgment of a court of competent jurisdiction. Any fees and
related expenses associated with the cost of arbitration will be borne by the
Company.

 

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12. Successors.

(a) This Agreement is personal to Executive and without the prior written
consent of the Company shall not be assignable by Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Executive’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

 

13. Miscellaneous.

(a) Governing Law. This Agreement, and all controversies arising thereunder or
related thereto, shall be governed by and construed in accordance with the laws
of the State of Texas, without regard to principles of conflict of laws that
would apply any other law.

(b) Captions. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.

(c) Amendments. This Agreement may not be amended or modified otherwise than by
a written agreement executed by the parties hereto or their respective
successors and legal representatives.

(d) Notices. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to Executive:    Donald Jackson If to the Company:    Pilgrim’s Pride
Corporation    4845 US Highway 271 North    Pittsburg, TX 75686    Attention:
Chief Executive Officer

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

(e) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

 

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(f) Withholding. The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

(g) Waivers. Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right Executive or the Company may have hereunder, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

(h) Status Before and After Effective Date. Executive and the Company
acknowledge that, except as may otherwise be provided under any other written
agreement between Executive and the Company, the employment of Executive by the
Company is “at will” and, subject to Section 1(a) hereof, Executive’s employment
and/or this Agreement may be terminated by either Executive or the Company at
any time prior to the Effective Date, in which case Executive shall have no
further rights under this Agreement. From and after the Effective Date, other
than with respect to the agreements and plans referenced herein, this Agreement
shall supersede any other agreement between the parties with respect to the
subject matter hereof.

 

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IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.

 

/s/ Donald Jackson

Donald Jackson PILGRIM’S PRIDE CORPORATION By:  

/s/ Richard A. Cogdill

  Richard A. Cogdill   Chief Financial Officer

 

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