Exhibit 10.1


PIERRE
HOLDING CORP.


9990
Princeton Road


Cincinnati, OH 45246


 


October 29, 2007


 


Mr. Robert C. Naylor


4655 Princeton Road


Hamilton,
OH 45011-8056


Re:       Termination
of your employment with Pierre Holding Corp., a Delaware corporation (“Employer”)
and Pierre Foods, Inc., a North Carolina corporation (“Pierre”) and the
Term pursuant to that certain Employment Agreement, dated as of May 11, 2004
(the “Employment Agreement”), by and between Mr. Robert C. Naylor (“you”),
and Employer.


Dear
Robert:


Effective today, this letter
agreement (this “Agreement”) sets forth our agreement regarding the
terms of the termination of your employment with Employer and Pierre (your “Employment”).
You and Employer shall be referred to herein as the “Parties.” Capitalized
terms used but not defined in this Agreement shall have the meanings given them
in the Employment Agreement.


By executing this Agreement
in the space provided below, you agree with Employer and its Subsidiaries
(including Pierre) (together, the “Pierre Entities”), and by its
signature below Employer (on its own behalf and on behalf of the other Pierre
Entities) agrees with you, as follows:


1.             Termination of Your Employment
and the Term.


Your Employment and the term
under the Employment Agreement are hereby terminated effective as of October
31, 2007 (which date shall be the “Termination Date” under the
Employment Agreement). The termination of your Employment, shall be deemed a
termination by the Company without Cause. In connection with the termination of
your Employment and the Term, you hereby agree to execute a copy of the General
Release attached as Exhibit A to this Agreement (the “Release”).
Effective as of October 31, 2007, you resign all of your positions as an
officer and employee of all Pierre Entities, including your position as Senior
Vice President of Sales and Marketing of all Pierre Entities.


2.             Severance Payment; etc.


The severance terms of your
separation are governed by Section 2.3(e) of the Employment Agreement (for a
termination by the Company without Cause ) as more specifically set forth in
this Agreement. Accordingly, you will receive the following severance benefits
on the terms and conditions set forth herein, including the execution of the
Release and only for so long as you have not revoked or violated the terms of
the Release or breached the provisions of Article IV of your Employment
Agreement. (1) your annual base salary of $292,311.76 as in effect on the date
hereof on Employer’s regular salary payment dates for a period of twelve (12)
months following the Termination Date (the “Severance Period”), (2) if
and only if annual 


 


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bonuses
are paid to senior executives of Employer for fiscal year ending on or around
February 28, 2008 based upon achievement of Employer performance targets in
Employer’s bonus plan for senior executives, a prorated portion (from March 4,
2007 through the Termination Date) of any annual bonus you would have received
for fiscal year ending on or around February 28, 2008 (and any such prorated
bonus shall be paid on or prior to May 15, 2008), (3) continuation during the
Severance Period of coverage under the Pierre Entities’ Senior Executive Life
Insurance Program, Group Medical and Dental and Flex Plan welfare benefits in
accordance with the Employer’s policies during the Severance Period, (4)
$12,658.20 in lieu of coverage under the Pierre Entities’ Company-paid Life and
Long Term Disability Insurance policies (which policies require that
participants be “actively at work”), such amount to be paid on the Termination
Date, (5) $109,090.80 in lieu of coverage under the Pierre Entities’ Senior
Executive Life Insurance Program, such amount to be paid in 26 installments of
$4,195.80 on Employer’s regular salary payment dates during the Severance
Period; and (6) $12,929.17 payment in full for your accrued but unused 2.2
weeks of vacation days in accordance with Employer policy, such amount to be
paid on the Termination Date. Furthermore, in consideration for signing this
Agreement and the Release, Employer agrees to provide you with the following
additional benefits (which you acknowledge are special severance payments to
which you would not be entitled but for your execution of this Agreement and
the Release): (a) full ownership and title to a certain 2004 Haulmark Trailer,
(vin # 16HPB1426H120703) located at your home; and (b) full ownership and title
to that certain 2006 Cadillac Escalade truck (vin # 3GYRK62N16G128404). The
transfer of title to the trailer and the Cadillac Escalade will be effective as
of October 31, 2007, it being understood that such transfer will be completed
as promptly as practical thereafter. The foregoing benefits shall only be
provided to you so long as you have not revoked or violated the terms of the
Release. In the event of your death, any unpaid balance of the foregoing
benefits shall be paid or delivered to your estate. All benefits provided
hereunder shall be subject to applicable tax withholding.


3.             Certain Other Agreements of the
Parties.


(a)           You agree that, notwithstanding anything in the Employment
Agreement to the contrary, after the Termination Date you shall not be entitled
to the following benefits: health club membership with trainer, use of an
automobile or payment of associated expenses, country club membership and dues,
Hunting Club membership and dues and an annual physical exam, or to any other
welfare benefits of the Company (or any other payments or benefits in lieu
thereof), except as expressly provided in Section 2 and Sections 3
of this Agreement. Employer agrees not to challenge or contest your right to
receive unemployment compensation after the end of the Severance Period, if you
choose to seek those benefits. Employer agrees to provide a factual job
reference letter setting forth your dates of employment, principal duties, and
rate of pay in effect on the Termination Date.


(b)           You
are entitled to all benefits earned through and including the Termination Date
pursuant to the terms of (1) retirement plans maintained by the Pierre Entities
which are qualified under Section 401(a) of the Internal Revenue Code and in
which you are a participant and (2) the Pierre Foods, Inc. Deferred
Compensation Plan.


 


4.             Representations
and Warranties.


You hereby represent that
this Agreement has been duly executed and delivered by you and constitutes a
valid and binding obligation of you, enforceable in accordance with its terms,
and each of the other agreements and instruments contemplated hereby to which
you are a party, when executed and delivered by you in accordance with the
terms hereof and 


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thereof,
shall each constitute a valid and binding obligation of you, enforceable in
accordance with its respective terms. By signing this Agreement you acknowledge
that you have carefully read and fully understand its contents. This Agreement
amends and modifies your Employment Agreement as follows: Articles I, II and
III of the Employment Agreement shall terminate and be of no further force and
effect as of October 31, 2007, whereas Articles IV and V of such Employment
Agreement (and any defined terms used therein) shall otherwise remain in full
force and effect in accordance with its terms).


5.             Cooperation.


You further agree to
reasonably cooperate with and assist the Pierre Entities and their respective
successors and assigns, at such time or times as may be reasonably requested,
in the investigation and handling of any actual or threatened court action,
arbitration or administrative proceeding involving any action that arose during
your employment (including but not limited to testifying or providing
information). Employer agrees to compensate you at a rate of $150 per hour for
the time you spend in such activities, subject to a maximum of $1,200 per day,
and will reimburse you for reasonable travel expenses (including lodging and meals)
upon submission of receipts.


6.             Confidentiality of this
Agreement.


The contents of this
Agreement, including but not limited to its financial terms, are strictly
confidential. By signing this Agreement you agree and represent that you will
maintain the confidential nature of this Agreement, except (a) to legal
counsel, tax and financial planners, and immediate family who agree to keep it
confidential; (b) as otherwise required by law, in which case you shall notify
Employer in writing in advance of disclosure; and (c) as necessary to enforce
this Agreement.


Employer agrees that it will
keep the contents of this Agreement confidential, except Employer may make
disclosures (a) to the officers and directors of any Pierre Entity as necessary
or appropriate, and to its outside counsel and auditors; (b) as otherwise
required by law; and (c) as necessary to enforce this Agreement.


7.             No Transfer or Assignment.


You agree that no interest
or right you have, or any of your beneficiaries has, to receive payments or
benefits under this Agreement shall be subject in any manner to sale, transfer,
assignment, pledge, attachment, garnishment, or other alienation or encumbrance
of any kind, except as required by law, nor may any such interest or right to
receive payment or benefits be taken, voluntarily or involuntarily, by any
third party for the satisfaction of the obligations or debts of, or other
claims against you or any of your beneficiaries, including for alimony, except
to the extent required by law.


8.             No Admissions.


This Agreement shall not be
construed as an admission of any wrongdoing either by you, your attorneys, any
of the Pierre Entities, or any of their respective affiliates, successors,
assigns, insurers or attorneys, or any of their respective directors, officers,
agents and employees.


9.             Assignment.


This Agreement shall be
binding upon and inure to the benefit of the Parties named herein and their
respective affiliates, subsidiaries, successors and permitted assigns. No 


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Party
may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other Party; provided,
however, that Employer may assign, without prior written consent, any or
all of their rights and interests hereunder to any of the Pierre Entities or
their respective affiliates and the Parties hereby acknowledge and agree that
this Agreement, including, but not limited to, the Release, shall be
enforceable by, and binding upon, any such affiliates following such assignment.


10.           Counterparts.


This Agreement may be
executed in counterparts all of which together shall constitute one and the
same Agreement.


11.           Governing Law.


This Agreement shall be
interpreted in accordance with the laws of the State of Delaware. Whenever
possible, each provision of this Agreement shall be interpreted in a manner as
to be effective and valid under applicable law, but if any provision shall be
held to be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating or affecting the remainder of such provision or any of the
remaining provisions of this Agreement.


[signature page follows]


 


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Please indicate your
agreement with the above by signing this Agreement and returning it to Employer
at your earliest convenience.


	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PIERRE HOLDING CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/Norbert E.
  Woodhams

  
	
   

  	
  Name: 

  	
  Norbert E. Woodhams

  
	
   

  	
  Its: 

  	
  Chief Executive Officer

  
					



 


 


	
  Acknowledged and agreed to
  on

  	
   

  
	
  this 29 day of October,
  2007:

  	
   

  
	
   

  	
   

  
	
   /s/ Robert C.
  Naylor

  	
   

  
	
  Robert C. Naylor

  	
   

  
	
   

  	
   

  
	
  PIERRE FOODS, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/Norbert E.
  Woodhams

  	
   

  
	
  Name: 

  	
  Norbert E. Woodhams

  
	
  Its: 

  	
  Chief Executive Officer

  
				



 


 


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EXHIBIT A


GENERAL RELEASE


I,
Robert C. Naylor, in consideration of and subject to the performance by Pierre
Holding Corp., a Delaware corporation (together with its subsidiaries
(including Pierre Foods, Inc., a North Carolina corporation, collectively, the “Company”),
of its obligations under the Employment Agreement, dated as of May 11, 2004
(the “Employment Agreement”), as modified under that certain letter
agreement dated as of October 22, 2007 (the “Separation Agreement”, and
together with the Employment Agreement, the “Agreement”), do hereby
release and forever discharge as of the date hereof the Company and its
affiliates and all present and former directors, officers, agents,
representatives, employees, successors and assigns of the Company and its
affiliates and the Company’s direct or indirect owners (collectively, the “Released
Parties”) to the extent provided below.


1.             I understand that any payments or
benefits paid or granted to me under the Agreement represent, in part,
consideration for signing this General Release and are not salary, wages or
benefits to which I was already entitled. I understand and agree that I will
not receive the payments and benefits specified in the Agreement unless I
execute this General Release and do not revoke this General Release within the
time period permitted hereafter or breach this General Release. I also
acknowledge and represent that I have received all payments and benefits that I
am entitled to receive (as of the date hereof) by virtue of my employment by
the Company; it being understood that this acknowledgement does not apply to
the payments payable to me after the date hereof under the Separation
Agreement.


2.             Except as provided in Paragraph
4 below and except for the provisions of my Agreement which expressly
survive the termination of my employment with the Company, I knowingly and
voluntarily (for myself, my heirs, executors, administrators and assigns)
release and forever discharge the Company and the other Released Parties from
any and all claims, suits, controversies, actions, causes of action,
cross-claims, counter-claims, demands, debts, compensatory damages, liquidated
damages, punitive or exemplary damages, other damages, claims for costs and
attorneys’ fees, or liabilities of any nature whatsoever in law and in equity,
both past and present (through the date this General Release becomes effective
and enforceable) and whether known or unknown, suspected, or claimed against
the Company or any of the Released Parties which I, my spouse, or any of my
heirs, executors, administrators or assigns, may have, which arise out of or
are connected with my employment with, or my separation or termination from,
the Company (including, but not limited to, any allegation, claim or violation,
arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
amended (including the Older Workers Benefit Protection Act); the Equal Pay Act
..of 1963, as amended; the Americans with Disabilities Act of 1990; the Family
and Medical Leave Act of 1993; the Worker Adjustment Retraining and
Notification Act; the Employee Retirement Income Security Act of 1974; any
applicable Executive Order Programs; the Fair Labor Standards Act; or their
state or local counterparts; or under any other federal, state or local civil
or human rights law, or under any other local, state, or federal law,
regulation or ordinance; or under any public policy, contract or tort, or under
common law; or arising under any policies, practices or procedures of the
Company; or any claim for wrongful discharge, breach of contract, infliction of
emotional distress, defamation; or any claim for costs, fees, or other
expenses, including attorneys’ fees incurred in these matters) (all of the
foregoing collectively referred to herein as the “Claims”); provided, however, that, notwithstanding the foregoing, it
is agreed and understood that such release does not include any Claim arising
prior to the date hereof arising from (i) any indemnification obligations owing
from the Company or any of its affiliates to me by virtue of my 


 


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position
as an officer, director or employee of the Company or any of its affiliates,
(ii) any salary earned and accrued since the date of the Company’s last salary
payment to me prior to the date hereof, (iii) amounts owing to me in accordance
with Company policy for vacation pay earned and accrued prior to the date
hereof, (iv) amounts owing to me in accordance with Company policy under the
Company’s group medical, disability or life plans, (v) amounts owing to me in
accordance with Company policy under the Company’s 401(k) plan(s), (vi) amounts
owing to me pursuant to Section 4980B of the Internal Revenue Code (COBRA),
(vii) any expense reimbursement amounts owing to me in accordance with Company
policy from the Company or any Released Party accruing prior to the date hereof
or (viii) amounts owing to me under the Pierre Foods, Inc. Deferred
Compensation Plan in accordance with its terms (including with respect to the
timing of payment of such amounts).


3.             I represent that I have made no
assignment or transfer of any right, claim, demand, cause of action, or other
matter covered by Paragraph 2 above.


4.             I agree that this General Release
does not waive or release any rights or claims that I may have under the Age
Discrimination in Employment Act of 1967 which arise after the date I execute
this General Release. I acknowledge and agree that my separation from
employment with the Company in compliance with the terms of the Agreement shall
not serve as the basis for any claim or action (including, without limitation,
any claim, under the Age Discrimination in Employment Act of 1967).


5.             I agree that I am waiving all
rights to sue or obtain equitable, remedial or punitive relief from any or all
Released Parties of any kind whatsoever, including, without limitation,
reinstatement, back pay, front pay, attorney’s fees and any form of injunctive
relief. Notwithstanding the above, I further acknowledge that I am not waiving
and am not being required to waive any right that cannot be waived under law,
including the right to file an administrative charge or participate in an
administrative investigation or proceeding; provided, however,
that I disclaim and waive any right to share or participate in any monetary
award resulting from the prosecution of such charge or investigation or
proceeding.


6.             In signing this General Release, I
acknowledge and intend that it shall be effective as a bar to each and every
one of the Claims hereinabove mentioned or implied. I expressly consent that
this General Release shall be given full force and effect according to each and
all of its express terms and provisions, including those relating to unknown
and unsuspected Claims (notwithstanding any state statute that expressly limits
the effectiveness of a general release of unknown, unsuspected and
unanticipated Claims), if any, as well as those relating to any other Claims
hereinabove mentioned or implied. I acknowledge and agree that this waiver is
an essential and material term of this General Release and that without such
waiver the Company would not have agreed to the terms of the Agreement. I
further agree that in the event I should bring a Claim seeking damages against
the Company, or in the event I should seek to recover against the Company in
any Claim brought by a governmental agency on my behalf, this General Release
shall serve as a complete defense to such Claims to the maximum extent
permitted by law. I further agree that I am not aware of any pending charge or
complaint of the type described in Paragraph 2 as of the execution of
this General Release.


7.             I agree that neither this General
Release, nor the furnishing of the consideration for this General Release,
shall be deemed or construed at any time to be an admission by the Company, any
Released Party or myself of any improper or unlawful conduct.


8.             I agree that I will forfeit all
amounts payable by the Company pursuant to the Agreement if I challenge the
validity of this General Release. I also agree that if I violate this General
Release by suing the Company or the other Released Parties, I will pay all
costs and expenses of defending against the suit incurred by the Released
Parties, including reasonable 


 


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attorneys’
fees, and return all payments received by me pursuant to the Agreement; provided,
however, in the event I initiate a claim under the Age Discrimination in
Employment Act of 1967, as amended, such return of payments shall not be
required unless and until I successfully invalidate this General Release.


9.             I agree that this General Release
is confidential and agree not to disclose any information regarding the terms
of this General Release, except to my immediate family and any tax, legal or
other counsel I have consulted regarding the meaning or effect hereof or as
required by law, and I will instruct each of the foregoing not to disclose the
same to anyone.


10.           Any non-disclosure provision in this
General Release does not prohibit or restrict me (or my attorney) from
responding to any inquiry about this General Release or its underlying facts
and circumstances by the Securities and Exchange Commission (SEC), the National
Association of Securities Dealers, Inc. (NASD), any other self-regulatory
organization or governmental entity.


11.           I agree that I continue to be bound
by the cooperation covenant in Section 5 of the Separation Agreement.


12.           I agree not to disparage the Company,
its past and present investors, officers, directors or employees or its
affiliates and to keep all confidential and proprietary information about the
past or present business affairs of the Company and its affiliates confidential
unless a prior written release from the Company is obtained. I further agree
that as of October 31, 2007 I will have returned to the Company any and all
property, tangible or intangible, relating to its business, which I possessed
or had control over at any time (including, but not limited to,
company-provided credit cards, building or office access cards, keys, computer
equipment, manuals, files, documents, records, software, customer data base and
other data) and that I shall not retain any copies, compilations, extracts,
excerpts, summaries or other notes of any such manuals, files, documents,
records, software, customer data base or other data.


13.           Notwithstanding anything in this General
Release to the contrary, this General Release shall not relinquish, diminish,
or in any way affect any rights or claims arising out of any breach by the
Company or by any Released Party of the Agreement after the date hereof.


14.           Whenever possible, each provision of
this General Release shall be interpreted in, such manner as to be effective
and valid under applicable law, but if any provision of this General Release is
held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.


BY
SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:


(i)            I HAVE READ IT CAREFULLY;


(ii)                                  I UNDERSTAND
ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT
NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967,
AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL
PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;


(iii)          I VOLUNTARILY CONSENT TO EVERYTHING IN
IT;


 


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(iv)                              I HAVE BEEN
ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR,
AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;


(v)                                 I HAVE ENTERED
INTO THIS GENERAL RELEASE FREELY AND WITHOUT COERCION AND I HAVE BEEN GIVEN ALL
TIME PERIODS REQUIRED BY LAW TO CONSIDER THIS AGREEMENT,  INCLUDING BUT NOT LIMITED TO THE 21-DAY
PERIOD REQUIRED BY THE AGE DISCRIMINATION IN EMPLOYMENT ACT. I UNDERSTAND THAT
I MAY EXECUTE THIS AGREEMENT LESS THAN 21 DAYS FROM MY RECEIPT FROM THE
COMPANY, BUT AGREE THAT SUCH EXECUTION WILL REPRESENT MY KNOWING WAIVER OF SUCH
21-DAY CONSIDERATION PERIOD;


(vi)                              I UNDERSTAND
THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND
THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED;


(vii)                           I HAVE SIGNED
THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY
COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND


(viii)                        I AGREE THAT
THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR
MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMPANY AND BY ME.


 


	
  DATE:  

  	
  October 30, 2007

  	
   

  	
   /s/  Robert
  C. Naylor

  
	
   

  	
   

  	
   

  	
       Robert
  C. Naylor

  



 


 


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