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                                                                   EXHIBIT 10.12

                                                                [Execution Copy]

                               MICHAEL FOODS, INC.

                                  SEVERANCE AND
                              DEFERRED COMPENSATION
                                    AGREEMENT

        AGREEMENT, made effective April 10, 2001, by and among Michael Foods,
Inc., a Minnesota corporation (the "Company"), Bradley Cook ("Employee") and,
for purposes of Section 4 hereof, M-Foods Holdings, Inc., a Delaware corporation
("Holdings").

                             Preliminary Statements:

1.  The Company considers the establishment and maintenance of a sound and vital
    management team essential to protecting and enhancing its best interest and
    the best interests of the Company's shareholders.

2.  In this connection, the Company recognizes that the possibility of a change
    in control of the Company exists and that such possibility and the
    uncertainty and questions which it may raise among management personnel, may
    result in the departure or distraction of such personnel to the detriment of
    the Company and the Company's shareholders.

3.  Accordingly, the Company has adopted a Severance Plan for Eligible Employees
    of Michael Foods, Inc. and its subsidiaries, as amended (the "Plan"), and
    the Board of Directors of the Company ("Board") has directed management of
    the Company to implement such Plan.

4.  In addition, the Company recognizes the Employee's substantial contribution
    to the growth and success of the Company and for this reason has decided to
    make certain changes in the Employee's compensation arrangements, which the
    Board has determined will reinforce and encourage the continued attention
    and dedication to the Company of the Employee as a member of the Company's
    senior management in the best interests of the Company and its shareholders.

NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and in order to induce Employee to remain in the Company's
employ, the parties hereto hereby agree as follows:

1.  PARTICIPATION IN PLAN. Employee is hereby designated a "Key Employee" for
    purposes of the Plan and is eligible for the severance benefits provided
    therein. Such benefits shall be in lieu of any further salary payments to
    Employee for periods subsequent to termination of employment, to the extent
    Employee becomes eligible for such severance payments by reason of
    termination of employment.


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2.  TERM. This Agreement shall commence on the date hereof and shall continue in
    effect until the Plan has been terminated. From and after the date hereof,
    this Agreement shall supersede any other agreement between the parties
    hereto with respect to the subject matter hereof.

3.  PLAN. This Agreement hereby incorporates by reference the terms and
    conditions of the Plan which shall be binding upon Employee.

4.  DEFERRAL OF CERTAIN COMPENSATION. In connection with the Employee's
    agreement to cancel all of his options to acquire Company Common Stock
    pursuant to the terms of that certain Option Cancellation Agreement, dated
    as of the date hereof, by and between the Employee and the Company, the
    Company shall (a) pay to Employee an amount equal to $103,920 (the
    "Cancellation Payment") and (b) rollover an amount equal to $384,000 (the
    "Deferred Amount") to an unfunded, unsecured nonqualified deferred
    compensation arrangement established for this purpose (the "Deferred
    Account"). Each of the Employee, the Company and Holdings agrees that
    Holdings, through an intercompany transfer, shall assume all obligations
    associated with the Deferred Amount. The Cancellation Payment shall be paid
    by the Company to the Employee on the Effective Date, or as soon as
    reasonably practicable thereafter.

    With respect to the Deferred Account, the Deferred Amount shall be deemed to
    be invested (i.e., an actual investment will not be made), as of the
    Effective Date, in (A) 3,840 Class A Units (the "Investors A Units") of
    M-Foods Investors, LLC, a Delaware limited liability company ("Investors")
    and (B) 3,840 Class A Units (the "Dairy A Units") of M-Foods Dairy Holdings,
    LLC, a Delaware limited liability company ("Dairy Holdings"). Holdings shall
    credit Employee's Deferred Account with certain of the distributions that
    would be received by the Deferred Account if such Deferred Account were
    actually invested in the manner set forth in the preceding sentence in
    Investors A Units and Dairy A Units, the extent of such crediting to be in
    accordance with the calculations set forth in the following two paragraphs.
    All amounts in the Employee's Deferred Account shall be subject to the
    claims of the creditors of Holdings.

    With respect to the Investors A Units, Holdings shall credit Employee's
    Deferred Account with any distributions made in respect of such Investors A
    Units pursuant to or in accordance with Sections 4.4(a)(i) and 4.4(a)(ii) of
    the Investors' Amended and Restated Limited Liability Company Agreement,
    dated April 10, 2001 (the "Investors LLC Agreement"). In the event Investors
    distributes non-cash property to holders of Investors A Units pursuant to
    Sections 4.4(a)(i) or 4.4(a)(ii) of the Investors LLC Agreement, Holdings
    shall credit Employee's Deferred Account in an amount equal to the fair
    market value of such property, as determined by the Management Committee of
    Investors. Employee's Deferred Account shall not be credited with any
    distributions made in respect of Investors A Units pursuant to or in
    accordance with any subsections of Section 4.4 of the Investors LLC
    Agreement other than Sections 4.4(a)(i) and 4.4(a)(ii) thereof. In the event
    that Investors A Units are sold by one or more holders of Investors A Units
    to a buyer unrelated on the date hereof to the holders of Investors A Units,
    Holdings shall credit Employee's Deferred Account with an amount equal to
    the result of (x) the percentage of outstanding Investors A Units being
    purchased by an unrelated buyer (including, for purposes of this percentage
    calculation, the number of Investors A Units deemed held by the Deferred
    Account and any other unfunded, unsecured nonqualified deferred compensation



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    arrangements similarly established to be deemed to hold Investors A Units)
    multiplied by (y) the number of Investors A Units deemed held in the
    Deferred Account multiplied by (z) the lesser of (i) the amount of cash or
    fair market value of any property, as determined by the Management Committee
    of Investors, received by holders of Investors A Units in exchange for an
    Investors A Unit and (ii) the sum of the Unreturned Capital and Unpaid
    Preferred Return (as such terms are defined in the Investors LLC Agreement)
    of an Investors A Unit (assuming such Investors A Unit was issued on the
    Closing Date, as such term is defined in the Employee's Management Stock
    Purchase and Unit Subscription Agreement, dated as of the date hereof, by
    and between the Employee and Investors (the "Management Stock Purchase and
    Unit Subscription Agreement")); it being understood and agreed that any
    distribution made pursuant to this sentence shall, with respect to future
    distributions, reduce the number of Investors A Units deemed held by the
    Deferred Account by the percentage described in subclause (x) of this
    sentence.

    With respect to the Dairy A Units, Holdings shall credit Employee's Deferred
    Account with any distributions made in respect of such Dairy A Units
    pursuant to or in accordance with Sections 4.4(a)(ii) and 4.4(a)(iii) of the
    Limited Liability Company Agreement of Dairy Holdings, dated April 10, 2001
    (the "Dairy Holdings LLC Agreement"). In the event Dairy Holdings
    distributes non-cash property to holders of Dairy A Units pursuant to
    Sections 4.4(a)(ii) or 4.4(a)(iii) of the Dairy Holdings LLC Agreement,
    Holdings shall credit Employee's Deferred Account in an amount equal to the
    fair market value of such property, as determined by the Management
    Committee of Dairy Holdings. Employee's Deferred Account shall not be
    credited with any distributions made in respect of Dairy A Units pursuant to
    or in accordance with any subsections of Section 4.4 of the Dairy Holdings
    LLC Agreement other than Sections 4.4(a)(ii) and 4.4(a)(iii) thereof. In the
    event that Dairy A Units are sold by one or more holders of Dairy A Units to
    a buyer unrelated on the date hereof to the holders of Dairy A Units,
    Holdings shall credit Employee's Deferred Account with an amount equal to
    the result of (x) the percentage of outstanding Dairy A Units being
    purchased by an unrelated buyer (including, for purposes of this percentage
    calculation, the number of Dairy A Units deemed held by the Deferred Account
    and any other unfunded, unsecured nonqualified deferred compensation
    arrangements similarly established to be deemed to hold Dairy A Units)
    multiplied by (y) the number of Dairy A Units deemed held in the Deferred
    Account multiplied by (z) the lesser of (i) the amount of cash or fair
    market value of any property, as determined by the Management Committee of
    Dairy Holdings, received by holders of Dairy A Units in exchange for a Dairy
    A Unit and (ii) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Dairy Unit Subscription Agreement, dated as of
    the date hereof, between Dairy Holdings and the Employee (the "Dairy Unit
    Subscription Agreement")); it being understood and agreed that any
    distribution made pursuant to this sentence shall, with respect to future
    distributions, reduce the number of Dairy A Units deemed held by the
    Deferred Account by the percentage described in subclause (x) of this
    sentence.

    Employee shall receive from Holdings distributions from his Deferred
    Account, in the amount indicated, upon the occurrence of the following
    events: (i) upon a Change in Control, Employee shall receive a total
    distribution of the amount then deemed held in the Deferred Account; (ii)


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    upon the tenth anniversary of the date hereof, Employee shall receive a
    total distribution of the amount then deemed held in the Deferred Account;
    (iii) upon the purchase by Investors of any of Employee's Class B Units
    pursuant to Section 7.2 of the Employee's Management Stock Purchase and Unit
    Subscription Agreement, Employee shall receive a distribution from the
    Deferred Account equal to the result of (x) the percentage of Employee's
    Class B Units being purchased by Investors multiplied by (y) the number of
    Investors A Units deemed held in the Deferred Account multiplied by (z) the
    lesser of (A) the fair market value of an Investors A Unit, as determined by
    the Management Committee of Investors and (B) the sum of the Unreturned
    Capital and Unpaid Preferred Return (as such terms are defined in the
    Investors LLC Agreement) of an Investors A Unit (assuming such Investors A
    Unit was issued on the Closing Date, as such term is defined in the
    Employee's Management Stock Purchase and Unit Subscription Agreement); it
    being understood and agreed that any distribution made pursuant to clause
    (iii) of this sentence shall, with respect to future distributions, reduce
    the number of Investors A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iii); and (iv) upon
    the purchase by Dairy Holdings of any of Employee's Class B Units pursuant
    to Section 7.2 of the Employee's Dairy Unit Subscription Agreement, Employee
    shall receive a distribution from the Deferred Account equal to the result
    of (x) the percentage of Employee's Class B Units being purchased by Dairy
    Holdings multiplied by (y) the number of Dairy A Units deemed held in the
    Deferred Account multiplied by (z) the lesser of (A) the fair market value
    of a Diary A Unit, as determined by the Management Committee of Dairy
    Holdings and (B) the sum of the Unreturned Capital and Unpaid Preferred
    Return (as such terms are defined in the Dairy Holdings LLC Agreement) of a
    Dairy A Unit (assuming such Dairy A Unit was issued on the Closing Date, as
    such term is defined in the Employee's Dairy Unit Subscription Agreement);
    it being understood and agreed that any distribution made pursuant to clause
    (iv) of this sentence shall, with respect to future distributions, reduce
    the number of Dairy A Units deemed held by the Deferred Account by the
    percentage described in subclause (x) of such clause (iv). The form of
    payment made with respect to any of the foregoing distributions shall be a
    cash payment except that (1) in the event of a Change in Control in which
    the consideration effecting such Change in Control is non-cash
    consideration, such distribution may be made in the form of such non-cash
    consideration, the fair market value of which shall be determined by the
    Management Committee of Investors, and (2) in the event of a distribution of
    the type described in clause (iii) or (iv) above, if, with respect to
    Holdings, any of the Cash Deferral Conditions (as such term is defined in
    the Employee's Management Stock Purchase and Unit Subscription Agreement)
    exists, the portion of the cash payment so affected may be made by the
    delivery of Holdings' unfunded and unsecured promise to pay Employee the
    portion of the cash payment so affected in cash, together with interest, at
    the first date on which the Cash Deferral Conditions no longer exist. The
    interest on such delayed cash payment will accrue annually at the "prime
    rate" published by The Wall Street Journal on the date Holdings delivers its
    unfunded and unsecured promise.

5.  BINDING AGREEMENT. This Agreement shall inure to the benefit of and be
    enforceable by the Employee's personal or legal representatives, executors,
    administrators, successors, heirs, distributes, devisees and legatees. If
    the Employee should die while any amounts would still be payable to the
    Employee hereunder if the Employee had continued to live, all such amounts,
    unless otherwise provided herein, shall be paid in accordance with the terms
    of this Agreement


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    to the Employee's devisee, legatee, or other designee or, if there be no
    such designee, to the Employee's estate.

6.  NOTICE. For the purpose of this Agreement, notices and all other
    communications provided for herein shall be in writing and shall be deemed
    to have been duly given when personally delivered, telecopied (with
    confirmation of receipt), one day after deposit with a reputable overnight
    delivery service (charges prepaid) and three days after deposit in the U.S.
    Mail (postage prepaid and return receipt requested) to, if to the Company,
    the address then-provided by the Company as its corporate headquarters and,
    if to the Employee, the address shown on the unit register of Investors.

7.  EMPLOYEE AT WILL. Nothing in this Agreement or in the Plan shall be
    construed as to make the Employee anything other than an Employee at Will of
    the Company. The Company may terminate the Employee's employment with or
    without cause, however defined, either before or after a Change in Control
    as defined in the Plan.

8.  MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
    discharged unless such waiver, modification or discharge is agreed to in
    writing and signed by the Employee and such officer as may be authorized by
    the Board. No waiver by either party hereto, at any time of any breach by
    the other party hereto of or compliance with any condition or provision of
    this Agreement to be performed by such other party, shall be deemed a waiver
    of similar or dissimilar provisions or conditions at the same, or at any
    prior or subsequent, time. No agreements or representations, oral or
    otherwise, express or implied, with respect to the subject matter hereof
    have been made by either party which are not set forth expressly in this
    Agreement. It is intended that the benefits payable hereunder shall be
    considered paid to the Employee for the Employee's past services to the
    Company and continuing services from the date hereof.

9.  VALIDITY. The invalidity or unenforceability of any provisions of this
    Agreement shall not affect the validity or enforceability of any other
    provisions of this Agreement, which shall remain in full force and effect.
    The validity of this Agreement and the interpretation thereof shall be
    governed by and construed in accordance with the laws of the State of
    Minnesota.


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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first written above.

                                       MICHAEL FOODS, INC.


                                       By:    /s/ John D. Reedy
                                          ------------------------------------
                                       Its:       Executive Vice President
                                           ------------------------------------


                                       M-FOODS HOLDINGS, INC.


                                       By:    /s/ John D. Reedy
                                          ------------------------------------
                                       Its:       Chief Financial Officer
                                           ------------------------------------
                                              /s/ Bradley Cook
                                           ------------------------------------
                                                        Bradley Cook