<PAGE>   1
                                                                    Exhibit 10.2


[PREMIUM STANDARD FARMS LOGO]


                             PREMIUM STANDARD FARMS
                           LONG TERM INCENTIVE PROGRAM


                             APRIL 1998 - MARCH 2001
<PAGE>   2
                             PREMIUM STANDARD FARMS
                            LONG TERM INCENTIVE PLAN
                                     SUMMARY


PURPOSE:                Encourage Sustained Growth of Company
                        Provide Key Executives with Capital Accumulation
                         Opportunity
                        Encourage Retention & Commitment of Key PSF Executives

PERFORMANCE MEASURE:    EBITDA

PERFORMANCE PERIOD:     3 Years - 4/1/98 through 3/31/01

PERFORMANCE             Targeted Earnings of $206M
THRESHOLDS:

ELIGIBILITY:            Senior Managers of PSF who are Responsible for the
                              Leadership & Accountability of the Long Term
                              Growth and Earnings of PSF as determined by PSF
                              Compensation Committee

INCENTIVE POOL:         2.6% of Earnings over Incentive Threshold of $103M

DISCRETIONARY AWARDS:   1.3% of Earnings over Discretionary Threshold of $103M

PARTICIPANT AWARDS:     Incentive Pool Award Determined at Plan Inception
                        Discretionary Award Determined at end of Performance
                         Period

VESTING:                50% of Incentive Pool at end of 2nd Year (3/31/00)
                        50% of Incentive Pool at end of 3rd Year (3/31/01)
                        100% of Discretionary Pool at end of Performance Period
                         (3/31/01)

DEFERMENT:              At end of Performance Period (3/31/01)
                        Participants have Option to Defer into Deferred
                         Compensation Plan (TBD)

ADMINISTRATION:         Compensation Committee of PSF shall be Responsible
                              for the Administration & Interpretation of All
                              Plan Provisions
<PAGE>   3
                             PREMIUM STANDARD FARMS
                            LONG TERM INCENTIVE PLAN

<TABLE>
<CAPTION>
<S>                                                     <C>
Targeted Earnings                                       $206,000,000 EBITDA

Accrual Rate-Incentive Pool                                      2.6%
Accrual Rate-Discretionary Pool                                  1.3%

Targeted Pool
      Incentive                                         $  2,660,966
      Discretionary                                     $  1,330,683
                                                        ------------
            Total                                       $  3,991,250


                                                        Incentive Pool/
Thresholds                                              Discretionary Pool

                                                        $     000
Cumulative 3 Years                                      $ 103,000
Annualized                                              $  34,333

</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
POOL ACCRUAL AT 2.0%     INCENTIVE POOL    DISCRETIONARY     TOTAL POOL    MEMO: POOL AS % OF
BASED ON EARNINGS OF:        (000)           POOL (000)        (000)            EARNINGS
---------------------------------------------------------------------------------------------
<S>                      <C>               <C>               <C>           <C>
    $    0M                   $0                $0               $0               0.0%
        25M                    0                 0                0               0.0%
        50M                    0                 0                0               0.0%
        75M                    0                 0                0               0.0%
       103M                    0                 0                0               0.0%
       104M                   26                 13              39               .03%
       125M                   568               284              853               .7%
       150M                  1,214              607             1,821             1.2%
       175M                  1,860              930             2,790             1.6%
       206M                  2,661             1,331            3,991             1.9%
       225M                  3,152             1,576            4,728             2.1%
       250M                  3,798             1,899            5,696             2.3%
       275M                  4,443             2,222            6,665             2.4%
       300M                  5,089             2,545            7,634             2.5%
       325M                  5,735             2,868            8,603             2.6%
       350M                  6,381             3,191            9,571             2.7%
       375M                  7,027             3,514           10,540             2.8%
       400M                  7,673             3,837           11,509             2.9%
</TABLE>


<PAGE>   4
                             PREMIUM STANDARD FARMS
                                PLAN DESCRIPTION


-   The Long Term Incentive Program is proposed for selected Premium Standard
    Farms executives, effective April 1, 1998 through March 31, 2001.


-   The new program will encourage the long-term growth of Premium Standard
    Farms.

    -   The performance focus in the new plan relates to the performance
        executives can best influence and control; i.e., the Executive's
        long-term reward opportunity is exclusively based on the earnings growth
        of the Company.

    -   The size of the long-term reward opportunity has been designed to be
        competitive with long-term plans offered by both public and private
        companies.

    -   The Plan has been designed to maximize business teamwork ("I only win if
        my business wins") while still providing an opportunity for strong
        individual efforts to be recognized and specifically rewarded.

    -   Finally, the Plan has been designed to require long-term executive
        commitment as a condition to receiving the substantial long-term
        opportunity the Plan offers.


-   The Performance Thresholds in the Plan have been designed so that:

    -   Some benefits can be earned for performing above a relatively low
        threshold (generally one half of expected performance).

    -   Market competitive rewards, however, will not be available unless
        reasonably expected performance objectives are achieved over the course
        of the long-term performance period.

    -   Superior benefits can be earned by exceeding the performance
        expectations.


-   The chart at the beginning of this booklet illustrates the new long-term
    model for Premium Standard Farms.

    -   The Incentive Pool rewards the management team as a whole for exceeding
        their earnings threshold over the performance period.

    -   The Discretionary Pool is a supplemental pool designed to reward
        individual members of the management team based upon their individual
        performance during the performance period.
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                      PURPOSE OF THE NEW LONG TERM PROGRAM


-   Provide key executives a capital accumulation opportunity.


-   Provide market competitive long-term incentive rewards for attaining
    performance objectives, i.e., the long-term earnings growth of the Company.


-   Encourage the retention and commitment of key executives.


               WHO IS ELIGIBLE TO PARTICIPATE IN THE NEW PROGRAM?


-   The senior management charged with the leadership and accountability for
    long-term earnings growth. Executives will be selected for participation in
    the program by the Premium Standard Farms Compensation Committee.


                   PERFORMANCE MEASURE AND PERFORMANCE PERIOD


-   The Long Term Incentive Plan will use one performance measure "EBITDA" and
    will have a three-year performance period (FY 1998-2001).


-   "EBITDA" as a performance measure will consist of the cumulative performance
    period earnings for the Company as a whole.

    -   The use of a multi-year cumulative measure will moderate the impact of
        volatile earnings over the course of the cycles of our business.

-   "EBITDA" as a performance measure will include both operating and
    non-operating earnings (before tax depreciation and amortization) and will
    be determined after accruing for the cost of this long-term plan
    (post-accrual earnings).
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                FUNDING THE LT BONUS POOLS/PERFORMANCE OBJECTIVES


-   Average Annual Earnings (EBITDA) Expectation


    -   The Premium Standard Farms Compensation Committee established a
        reasonable Average Annual EBITDA Expectation for the succeeding 3 years.

    -   The objective was to establish an expectation for the Company that was
        reasonably assessed at a 75% chance to attain based upon presently
        available resources.


-   Incentive Pool Earnings Threshold

    -   The Incentive Pool Threshold is set generally at 1/2 of the EBITDA
        Expectation.


-   Discretionary Pool Earnings Threshold

    -   The Discretionary Pool Threshold is set generally at 1/2 of the EBITDA
        Expectation.


                FUNDING THE LT BONUS POOLS/PERFORMANCE OBJECTIVES

-   Long Term Profit-Sharing PercentAGE

    -   This percentage has been determined at a level that will yield a market
        competitive long-term incentive fund for the eligible executives
        assuming earnings expectations are attained, and will provide
        substantial pay leverage for exceeding or falling short of that
        expectation.


-   Modifying the Earnings Expectation and Thresholds during the Performance
    Period

    -   Generally, the Earnings Expectation and Thresholds are expected to
        remain in place for the full performance period without modification.

    -   However, modifications will be made where there are major capital
        changes:

            -   A major capital infusion will generally result in an increase in
                the Earnings Expectation and Thresholds.

            -   A major withdrawal of capital from the Company (e.g., a sale of
                a business segment without reinvesting the sales proceeds in
                Premium Standard Farms will generally result in a decrease in
                the Earnings Expectation and Thresholds.
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            -   The Compensation Committee of the Board of Directors reserves
                the right to modify either the earnings expectation or
                thresholds in the event of an unforeseen and extraordinary
                event.

                                 INCENTIVE POOL


-   Each eligible executive is granted a percentage of the Incentive Pool.

    -   This percentage interest is generally granted at the beginning of the
        performance period.

    -   Some percentage interests were reserved for subsequent grants to newly
        eligible executives (e.g., newly hired or promoted executives).

    -   Percentage interest of the original pool participants may be reduced if
        pool reserves are insufficient for subsequent grants to newly eligible
        executives. Such reduced percentage interest, however, will not reduce
        the original participant's bonus opportunity because corresponding
        positive adjustments will be made to the pool's LT Profit-Sharing
        Percentage.


-   The Value of an Incentive Pool equals:

    -   Actual Earnings for the performance period

            IN EXCESS OF

    -   Incentive Pool Earnings Threshold

            MULTIPLIED BY

    -   LT Profit-Sharing Percentage


-   The Value of an eligible Executive's Incentive Pool Interest equals:

    -   The Incentive Pool Value as determined above

            MULTIPLIED BY

    -   The Executive's percentage interest in the Incentive Pool


                               DISCRETIONARY POOL

-   The Program will have a pool to fund discretionary, performance based,
    individual bonus amounts.
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    -   Unlike the Incentive Pool, executives do not receive a percentage
        interest in the Discretionary Pool at the beginning of the period.
        Allocation of this pool will be made after FY2001 on a discretionary
        basis taking into account individual performance during the period.


-   The Value of the Discretionary Pool equals:

    -   Actual Earnings for the Performance Period

            IN EXCESS OF

    -   Discretionary Pool Earnings Threshold

            MULTIPLIED BY

    -   LT Profit-Sharing Percentage


-   The Value of an Executive's interest in the Discretionary Pool equals:

    -   A portion of the Discretionary Pool value based upon an assessment by
        the CEO and Compensation Committee of an Executive's individual
        performance during the performance period.

    -   An executive might receive the same percentage interest in the
        Discretionary Pool as he has in the Incentive Pool, or he might receive
        more, less, or none. The allocation is totally at the discretion of the
        CEO and Compensation Committee.


                     VESTING AND CASH-OUT OF INCENTIVE POOL

-   The payout of an Executive's interest in an Incentive Pool will be fully
    distributed in cash shortly after the end of the performance period
    (FY2001).


-   Vesting of an Executive's Incentive Pool interest is based on continued
    employment with Premium Standard Farms:

    -   50% of Incentive Pool at end of 2nd Year (3/31/00)

    -   50% of Incentive Pool at end of 3rd Year (3/31/01)

    -   100% of Discretionary Pool at end of Performance Period (3/31/01)
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-   Full vesting rights are accorded executives who leave the Company due to
    death, disability or at normal retirement age during the performance period.

    -   Transfers to Continental Grain Company during the performance period:

        -   Retention of a pro-rata interest in the Premium Standard Farms Pool

        -   Grant of a pro-rata interest in the new business unit's Pool


-   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.*


                   VESTING AND CASH-OUT OF DISCRETIONARY POOL

-   An Executive's interest in the Discretionary Pool is determined after the
    end of the performance period.


-   Payout of an Executive's interest in the Discretionary Pool, if any, will
    occur the same date as Incentive Pool payout.


-   Vesting of an Executive's Discretionary Pool interest is based on current
    active employment with the Company on the payout date.


-   Full vesting rights are accorded an executive who leaves the Company during
    the performance period due to death, disability or at normal retirement age.


-   Special vesting and funding rules apply if the Company is sold or in the
    event of an IPO during the performance period.*


                   ADMINISTRATION OF LONG TERM INCENTIVE PLANS

-   The Compensation Committee of the Board of Directors shall approve the
    administration of the Long Term Incentive Plan.

    -   The Committee shall have sole responsibility for the interpretation of
        all plan requirements and the payment of plan benefits.



* To be determined by the Premium Standard Farms Compensation Committee