**Exhibit 10.16**

 

TERMINATION OF SEVERANCE AGREEMENT

                   THIS TERMINATION OF SEVERANCE AGREEMENT ("Agreement") is made this 27thday of September, 2000, by and between WLR FOODS, INC., a Virginia corporation (the"Company") and DALE S. LAM ("Mr. Lam"), who agree as follows:

RECITALS:

                   A.    The Company and Mr. Lam entered into a letter agreement datedNovember 2, 1998 ("Severance Agreement") , that provides, among other things,that the Company shall be obligated to pay Mr. Lam certain severance benefits, as setforth therein, in the event of a termination of his employment within thirty-six (36)months after a Change In Control of the Company has occurred.

                   B.     The Company has entered into an Agreement And Plan Of Merger withPilgrim’s Pride Corporation, a Delaware corporation, with such merger to beconsummated on the Effective Date, as defined therein. Such merger, if consummated, willconstitute a Change In Control of the Company as set forth in the Severance Agreement.

                   C.     The parties desire to terminate the Severance Agreement as providedherein.

                   NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of whichis acknowledged, the parties hereto agree as follows:

                   1.     Payment. In consideration for the execution of thisAgreement, the Company agrees to pay Mr. Lam the sum of Four Hundred Forty-Seven Thousand,Seven Hundred Fifty Dollars ($447,750.00), to be paid on the Effective Date by wiretransfer to an account designated in writing by Mr. Lam.

                   2.     Elimination of Severance Payment. In consideration of thepayment made to Mr. Lam by the Company in Section 1 above, the parties agree that theSeverance Agreement will be terminated in its entirety, and Mr. Lam shall resign from allpositions with the Company and its affiliates on the Effective Date.

                   3.     Condition Precedent. Notwithstanding anything to the contraryherein, the terms of this Agreement are expressly contingent upon the consummation of thesale transaction provided for in the Purchase Agreement between the Company andPilgrim’s Pride Corp., as contemplated in such Agreement; in the event suchtransaction is not consummated for any reason on the Effective Date, or the payment ascontemplated in Section 1 is not made as provided herein, all such terms of the SeveranceAgreement as originally set forth in the letter dated November 2, 1998 shall remain infull force and effect.

                   4.     Successors; Binding Agreement. This Agreement shall inure tothe benefit of and be enforceable by Mr. Lam, his personal legal representatives,executors, administrators, successors, heirs, distributees, devisees, and legatees.

                   This Agreement shall be binding on the Company and its successors and assigns.

                   5.     Fees and Expenses. The Company shall reimburse Mr. Lam, on acurrent basis, for all reasonable legal fees and related expenses incurred by him (a) inconnection with contesting or disputing any terms or conditions of this Agreement orincurred by Mr. Lam in attempting to collect payment under this Agreement, or (b) inseeking to obtain or enforce any right or benefit provided by this Agreement, in each caseregardless of whether or not his claim is upheld by a court of competent jurisdiction;provided, however, Mr. Lam shall be required to repay such amounts to the Company to theextent that a court issues a final and non-appealable order setting forth thedetermination taken by Mr. Lam was frivolous or advanced by him in bad faith.

                   6.     Governing Law and Venue. The validity, interpretation,construction and performance of this Agreement shall be governed by the laws of theCommonwealth of Virginia (exclusive of its conflict of laws provision). Venue for anyproceeding related to the performance or interpretation of this Agreement, or in any wayarising out of this Agreement, shall be either the Circuit Court of Rockingham County,Virginia or the United States District Court for the Western District of Virginia,Harrisonburg Division.

                   WITNESS the following signatures and seals; and

                    IN WITNESS WHEREOF, the undersigned has caused this Addendum to be executed on its behalfas thereunto duly authorized.

                                                                               WLR FOODS, INC., a Virginia corporation

                                                                               By: __________________________________

                                                                               Its: __________________________________

 

                                                                              _____________________________________                                                                                                       DaleS. Lam