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Exhibit 10.2 Premium Standard Farms
Long-Term Incentive Plan (LTIP)
Summary Purpose The senior leadership of PSF wanted to create a total compensation rewards
program that encouraged key executives to stay with the Company over a period
of time and to commit to strategic business objectives designed to give the
Company a competitive edge in the market place while encouraging long-term
growth and profitability. When achieved, PSF would reward key executives in
such a way to ensure our long-term compensation practices are competitive with
long-term plans offered by both public and private companies. Further, the
plan is designed to encourage teamwork among top executives while providing
opportunities to be individually recognized and rewarded for exceptional effort
and performance. Eligibility Senior managers selected by the PSF Compensation Committee are eligible to
participate in the LTIP. Selected participants are charged with the
responsibility of providing superior leadership and accountability for
long-term earnings growth. Performance Period The first LTIP period for the new three year plan begins on April 1, 2003 and
concludes on March 31, 2006. The plan is a rolling three year plan based on
three years of performance. Performance Measurement The LTIP uses Return on Net Assets (RONA) as the singular performance
measurement on the incentive portion during the entire LTIP performance period. RONA as a performance measurement will include both operating and non-operating
earnings (before interest and taxes) and will be determined after accruing for
the cost of this long-term plan (post-accrual earnings).Deferred taxes will
be excluded from the RONA calculation. Participants Percentage All eligible executives are assigned a percentage of base pay that will be paid
if the RONA goals are met. The percentage is usually granted by the CEO at the
beginning of the LTIP period. Once assigned, each participating executive can
compute their individual annual amount by multiplying their percentage by their
annual salary. Participants LTIP Awards All LTIP awards are divided into two sections: Incentive and Discretionary. Incentive The incentive portion of the LTIP is determined at the beginning of the LTIP
period and represents two-thirds of the participants eligible payment. The
incentive portion of the LTIP is awarded based on RONA achievement.




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Discretionary Pool The discretionary portion of the LTIP is determined at the conclusion of the
LTIP period and represents one-third of the participants eligible payment.
The discretionary portion of the LTIP is based on the assessment of the CEO at
the conclusion of the LTIP period and is generally determined by the
participants overall performance during the LTIP period. Since this portion
of the LTIP is completely discretionary, it may be more, less, or the same. Vesting Vesting of a Participants interest is based on continued employment with
Premium Standard Farms:  
    
    One-Third of potential payment vests at end of 1st Year (3/31/04)  
    
    One-Third of potential payment vests at end of 2nd Year (3/31/05)  
    
    One-Third of potential payment vests at end of 3rd Year (3/31/06)  
    
    There is no vesting schedule associated with the Discretionary
portion of the LTIP. All discretionary awards pay out shortly after
the conclusion of the LTIP period provided the participant has
continued employment with the Company. Full vesting rights are accorded executives who leave the Company due to death,
disability or at normal retirement age during the performance period.
Executives that transfer to ContiGroup or another company under PSF Holdings
Inc. will retain a pro-rata interest in the PSF LTIP assuming all other
criteria are met. Special vesting and funding rules apply if the Company is sold or in the event
of an initial public offering (IPO) during the performance period. Should this
occur the PSF Compensation Committee would review the circumstances and
determine the appropriate course of action to take at that time. Payment and New Plan The first available payment under this plan (Plan FY04-FY06) will be following
the completion of fiscal year 2006. Beginning with FY05, a new plan will start
that will mature in FY07 and so on. Payment under Plan FY04-FY06 will be made
following FY06 if Company RONA goals are met. Payments associated with Plan
FY05-FY07 will be made following the completion of FY07. Deferred Compensation LTIP awards received at the conclusion of the LTIP period can be completely or
partially deferred however, the decision to defer compensation must be made at
least by the end of the calendar year preceding the actual award declaration.
The conditions and provisions of this benefit are detailed in the PSF Deferred
Compensation Plan Summary Plan Description. Contact the Vice President of
Human Resources for a copy. Administration The Compensation Committee of the Board of Directors shall approve the
administration of the LTIP. The Compensation Committee shall have the sole
responsibility for the interpretation of all LTIP requirements and the payment
of LTIP benefits. While the Compensation Committee generally expects the
earning expectations and the thresholds to remain in tact during the entire
LTIP period, they do reserve the right to alter or modify the earnings
expectations and RONA thresholds during the LTIP period in the event of
unforeseen and extraordinary events. Additionally, the Compensation Committee
may modify the provisions of the LTIP where there are major capital infusions
or major withdrawal of capital during the LTIP period. The Compensation
Committee also has the right to add and delete participants, subject to
vesting, at their discretion.