EXHIBIT (e)(2)


                         PRODUCT SUPPLY AGREEMENT

       THIS PRODUCT SUPPLY AGREEMENT (the "Agreement") is entered into effective
the 28th day of February,  1997,  by and between THE  SMITHFIELD  HAM & PRODUCTS
COMPANY,  INCORPORATED,  a  Virginia  corporation  (hereinafter  referred  to as
"Smithfield");  and  DOUGHTIE'S  FOODS,  INCORPORATED,  a  Virginia  corporation
(hereinafter referred to as "Doughtie's");

                              W I T N E S S E T H :

          WHEREAS,  pursuant to the Asset Purchase Agreement dated as of January
30, 1997 (the "Purchase  Agreement"),  by and among  Doughtie's and  Smithfield,
Smithfield  has agreed to buy certain of the assets of Doughtie's  Manufacturing
Processing Division (the "Transaction"); and

           WHEREAS,  Smithfield following the Closing of the Purchase Agreement,
will  manufacture  and sell to  Doughtie's  the product  described  on Exhibit A
attached  hereto  (hereinafter  referred  to  individually  and  jointly  as the
"Product") and made a part hereof; and

           WHEREAS, both Smithfield and Doughtie's are unwilling to proceed with
the  Transaction  unless the other party has entered into an  agreement  for the
purchase and sale of the Product; and

           WHEREAS,  the  Purchase  Agreement  provides,  as a condition  to the
obligations  of  the  parties  to  proceed  with  the  Closing  thereunder  that
Smithfield and Doughtie's shall execute and deliver this Agreement;

           NOW,  THEREFORE,  in consideration of the foregoing,  and in order to
induce  Doughtie's  and  Smithfield  to  proceed  with the  Transaction,  and in
consideration of the mutual covenants hereinafter  contained,  and of other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto agree as follows:


    A.   Purchase and Sale of Products.

 Subject to the terms and  conditions of this  Agreement,  Smithfield  agrees to
sell to  Doughtie's,  and Doughtie's  agrees to purchase from  Smithfield at the
Purchase Price (as hereinafter  defined) all of Doughtie's  requirements for the
Product  identified  on  Exhibit A  attached  hereto  and any other (i) fresh or
frozen pork,  beef, or chicken  barbecue,  (ii) fresh or frozen chili, and (iii)
Doughtie's label BBQ sauce, except for certain sales to Multi-Unit Accounts,  as
hereinafter defined).

      It is agreed and  understood  that the term "Product" as used herein is to
be construed to mean the  identical  products  listed on Exhibit A; produced and
manufactured  under the same formulas used by Doughtie's  during its manufacture
of such products,  which  formulas are being sold to Smithfield  pursuant to the
terms of


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the Asset Purchase Agreement.  Doughtie's shall be under no obligation hereunder
to purchase from Smithfield  Products which are produced with different formulas
or recipes.

    B.    Multi-Unit and Large End User Accounts.

    Doughtie's shall not be obligated to purchase Product  hereunder for sale to
any  Multi-Unit  Account  which is  defined  as any  account  with over five (5)
affiliated locations to which Doughtie's sells or will sell Product on a current
basis  and  which  account  requires,  after  the  closing  of the  Transaction,
Doughtie's  to sell such  account  product  other than that  produced or sold by
Smithfield;  (hereinafter  referred to as  "Multi-Unit  Account" or  "Multi-Unit
Accounts").

            1. As a  precondition  to  Doughtie's  ability  to sell  product  of
another vendor to a Multi-Unit  Account under this  Agreement,  Doughtie's  must
provide  Smithfield with a written notice from the Multi-Unit  Account requiring
such competing product.

            2. Ten (10)  business  days  prior  to a sale by  Doughtie's  to any
excluded  Multi-Unit Account hereunder,  Doughtie's shall give Smithfield notice
of its intent to sell  competing  product from another  supplier to such Account
and specify the competing  product to be sold to such  Account.  Upon receipt of
such  notice,  Smithfield  shall  have the  right to call on such  Account  with
Doughtie's  assistance  to try to sell Product  produced by  Smithfield  or then
currently  stocked and offered for sale by Smithfield to such Account instead of
the competing  product being  specified or offered to such Account by Doughtie's
pursuant to its notice to Smithfield.

            3.  Under no  condition,  during  the term of this  Agreement  shall
Doughtie's  "general  list" for sale  Product of any other  vendor  (other  than
Smithfield).  For purposes of this  Agreement  "general  list" means  Doughtie's
cannot offer a general  product  line other than the Product sold by  Smithfield
hereunder.

            4. Attached  hereto and made a part hereof as Exhibit B is a list of
each customer to which Doughtie's currently sells a competing product,  together
with a list of the  vender  and  brand  name of the  competing  product  sold by
Doughtie's  to each  such  customer.  There  shall be no  restriction  hereunder
against  Doughtie's  ability to continue to sell the listed competing product to
the applicable customer(s) set forth on Exhibit B.

     C.    Smithfield's Audit of Multi-Unit Accounts.

 Smithfield  shall have the right to audit  Doughtie's  records  to confirm  the
existence of any Multi-Units that Doughtie's represents to be an exception under
the terms of Sections A and B above,  and in the event such audit reveals that a
customer  does not fall within the  exceptions  of Sections A and B above,  then
Doughtie's shall bear the cost of such audit and shall  immediately  cease sales
to such Account of Product other than those purchased or sold by Smithfield.  If
the audit  reveals  that the  customer  is a properly  designated  Multi-Unit  ,
Smithfield  shall bear the cost of such audit,  including all costs  incurred by
Doughtie's in accommodating such audit.






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         D.  Purchase Price.

      Smithfield  shall  sell  to  Doughtie's  Product  at  a  price  reasonably
comparable  and of the same  quality to  competitors  pricing of same Product as
others  buying in  comparable  volumes  and shall offer to  Doughtie's  the same
rebate,  growth, or marketing  programs offered for the same Product except that
Smithfield  may  price  Product  at  special  rates  lower  than  those  sold to
Doughtie's  in the case of bids or  proposals  made  directly by  Smithfield  to
school or governmental  entities and for unique pricing  opportunities for major
end users (excluding other distributors).

            1.  Doughtie's  shall have upon three days notice to Smithfield  the
right to audit  Smithfield's  records to confirm the "Purchase Price" compliance
with the  provisions of this Section D. In the event such audit reveals that the
invoice  price for an item of Product  from  Smithfield  to  Doughtie's,  over a
six-month rolling period, exceeds the price for the same item of Product sold by
Smithfield to other distribution  customers of Smithfield,  buying in comparable
volumes,  then Smithfield shall promptly pay to Doughtie's any  "over-charge" so
determined. If the audit reveals that Smithfield has complied with the "Purchase
Price"  provisions  of this  Agreement,  Doughtie's  shall bear the cost of such
audit including all costs incurred by Smithfield in accommodating such audit.


       E.  Term.

    The term of this  Agreement  shall be Five (5) years  commencing on the date
hereof and terminating February 28, 2002.

       F.  Orders.

      Products  must be  ordered  from  Smithfield  not less than seven (7) days
prior to delivery  date.  Smithfield  may accept,  in its discretion any Product
ordered for delivery in less than seven (7) days.


       G.  Quality.

      Smithfield  warrants  that  the  quality  of  the  Product  sold  will  be
reasonably equal to the standards of quality existing at the time of the Closing
of the Transaction.

       H.   Customer Complaints.

      In the event  Doughtie's  loses fifty percent (50%) of the tonnage  volume
for all  Doughtie's  customers  for a category  item of Product  purchased  from
Smithfield from the volume figures set forth on Exhibit C attached hereto,  as a
result of quality  complaints only,  Doughtie's shall give Smithfield sixty (60)
days  written  notice of such loss of  business  and the  nature of the  qualtiy
complaint  and will work with  Smithfield  during such 60-day  period to cure or
correct any quality  problem  existing with such Product  item(s).  In the event
Doughtie's  customers  cannot be satisfied as to the quality of the Product item
within sixty (60) days from the receipt by Smithfield of notice from Doughtie's,
then  Doughtie's  shall have the  option to carry  other  competitive  brands to
satisfy its customer needs with respect to such Product items(s).

      I.   Payments.

            1. Smithfield shall render its invoices  covering  shipments as soon
as practicable after each shipment. Terms of payment are net ten (10) days after


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date of invoice and other terms set forth on Smithfield's  standard  invoice,  a
copy of which is attached hereto as Exhibit D and made a part hereof.

            2. In case Smithfield shall have any reasonable doubt at any time as
to Doughtie's financial  responsibility,  Smithfield may decline to make further
shipments hereunder except upon payment in cash at the time of delivery.

            3. All payments  shall be made at  Smithfield's  principal  place of
business  or the  place  specified  for  payment  on the  applicable  Smithfield
invoice.


      J.   Parties Cooperations.

            Doughtie's  agrees that its distribution  division will maintain the
same selling  practices and  procedures,  and customer  service  relating to the
Products to the extent practical during the term of this Agreement.  The parties
hereto  agree to  cooperate  with  each  other to market  and sell the  Products
through Seller's distribution business.


      K.    Force Majeure.

            1.  In the  event  of an  Act of  God,  explosion,  accident,  fire,
drought,  flood,  earthquake,  tornado,  hurricane,  strike,  labor disturbance,
insurrection,  riot,  war,  act of a  public  enemy,  the  acts or  orders  of a
governmental unit, freight embargo,  transportation,  power,  utility,  labor or
material  shortage,  delay in transportation or default of supplier or any other
cause beyond Smithfield's  reasonable control,  interfering with the production,
supply, transportation,  or consumption of the Product or with the supply of raw
materials or utilities used in connection  therewith (a "Force Majeure  Event"),
the  obligation  of  Smithfield  to supply  Product  hereunder  shall be held in
abeyance  for the  duration  of the  Force  Majeure  Event  and the term of this
Agreement shall be extended for a period equal thereto. If a Force Majeure Event
results in or may reasonably be expected to result in an inability of Smithfield
to ship  Product  for more than  seven (7) days past  their  scheduled  shipping
dates,  then  Doughtie's  may  purchase  the  Product  covered  by any orders so
affected by the Force Majeure Event from other  suppliers.  SMITHFIELD SHALL NOT
BE LIABLE FOR ANY DAMAGES, DIRECT OR CONSEQUENTIAL,  ARISING OUT OF ANY DELAY IN
DELIVERY OR FAILURE TO DELIVER ANY OF THE PRODUCT  SOLD  HEREUNDER IF SUCH DELAY
OR FAILURE TO DELIVER IS DUE TO A FORCE MAJEURE EVENT.

            2. Any  suspension  or reduction of deliveries of Product under this
Agreement due to the  occurrence of any Force Majeure Event shall not invalidate
or be a basis for  termination  of this  Agreement,  and,  upon the  removal  or
termination  of the  Force  Majeure  Event  during  the term of this  Agreement,
delivery shall be made and taken,  as the case may be, on the specified terms in
effect immediately prior to such suspension or reduction.

            3.  If in  consequence  of any  Force  Majeure  Event,  Smithfield's
production is partially curtailed,  Smithfield may allocate its available supply
of Product among its then present customers on such basis as Smithfield may deem
fair and practical, and in making such allocation,  Smithfield shall, as near as
practicable,  limit its  reduction of  shipments  to such  customers to the same
percentage in each case.




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            4. The  provisions of this Paragraph I shall not be available to any
party  hereto  which  shall  fail to use  reasonable  diligence  to  remedy  the
situation  and to remove  the Force  Majeure  Event  affecting  its  performance
hereunder with all reasonable  dispatch.  The requirement that any Force Majeure
Event be remedied with all reasonable  dispatch shall not require the settlement
of strikes or labor  controversies  by acceding  to the demands of the  opposing
party or parties.


      L.    Assignment.

      This  Agreement  shall be  binding  upon and inure to the  benefit  of the
successors  of the parties  hereto but shall not be  assignable  by either party
without  the  written  consent of the other party  except in  connection  with a
merger  of such  party or the sale of  substantially  all of the  assets of such
party.


      M.    Notices.

      All  notices,  requests  or  other  communications  hereunder  shall be in
writing, addressed to Doughtie's or Smithfield, at the following addresses:

            (i)      If to Doughtie's:

                  Mr.  Vernon Mules, Chairman
                  Doughtie's Foods, Inc.
                  P.O. Box 7229
                  115 Chautauqua Avenue
                  Portsmouth, VA   23707

                  Telephone (757) 399-6007

                  with copy to:

                  William R. Waddell, Esquire
                  McGuire, Woods, Battle and Boothe, L.L.P.
                  World Trade Center - Suite 9000
                  101 West Main Street
                  Norfolk, VA    23510-1655

                  Telephone:    (757)  640-3700
                  Telecopier:   (757)  640-3701

            (ii)      If to Smithfield:

                  Mr. Peter D. Pruden, III, President
                  The Smithfield Ham & Products Company, Incorporated
                  P. O. Box 487
                  Smithfield, VA   23464

                  Telephone:   (757) 357-2121
                  Telecopier: (757) 357-5407

                  with copy to:

                  Bernard C. Baldwin, III, Esquire
                  Edmunds & Williams, P.C.


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                  801 Main Street (24504)
                  P. O. Box 958   (24505)
                  Lynchburg, VA

                  Telephone:   (804) 846-9000
                  Telecopier: (804) 846-0337


The  address of either  party may be changed by giving  notice in writing at any
time to the other party.  Any notice to be given under this  Agreement  shall be
deemed  duly  given if (i)  delivered  personally,  (ii)  sent by  telecopy  and
acknowledged by recipient, (iii) delivered by overnight express, or (iv) sent by
United Stated registered or certified mail, postage prepaid.  Any notice that is
delivered  personally,  or sent by telecopy or  overnight  express in the manner
provided  herein shall be deemed to have been duly given to the party to whom it
is directed upon actual  receipt (and, in the case of telecopy  acknowledgement)
by such party.  Any notice that is addressed  and mailed in the manner  provided
herein shall be  conclusively  presumed to have been given to the party to which
it is addressed at the closed of business,  local time of the recipient,  on the
third day after it is so placed in the mail.


       N.    Termination.

            1. Except as otherwise  provided in the paragraph dealing with Force
Majeure Event, in the event either of the parties hereto fails to perform in any
material  respect  any of the  terms  or  conditions  of  this  Agreement  to be
performed  by such party,  and such  failure  continues  for a period of 30 days
after written  notice by the other party to the  non-performing  of such failure
and of a demand for performance, then this Agreement shall, at the option of the
injured party, terminate.

            2.  In  the  event  of  any  voluntary  or  involuntary  bankruptcy,
receivership, insolvency or reorganization proceedings involving either party or
its property,  or the assignment of all, or substantially  all, of the assets of
either party for the benefit of creditors,  or a receiver is appointed for it or
any  substantial  part of its  property,  the  other  party  may  terminate  its
obligations  hereunder by giving written notice of such termination  which shall
become effective upon the giving of such notice.

            3. The parties'  right of  termination  shall be in addition to, and
not in lieu of, any other  rights or  remedies  available  to the  non-breaching
party.

            4.  The  parties  hereto  acknowledge  that  damages  may  not  be a
sufficient remedy in the event of the breach of this Agreement and, as a result,
agree that an injured  party may have as a remedy  against the other party,  the
specific performance of the provisions of this Agreement.


       O.   Non-Waiver.

      The failure of either  party to insist in any one or more  instances  upon
strict  performance  of any of the  provisions  of  this  Agreement  or to  take
advantage of any of its rights  hereunder  shall not be construed as a waiver of
any such provisions or the relinquishment of any such rights, but the same shall
continue and remain in


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full force and effect.

       P.   Entire Agreement.

      This  Agreement sets forth the entire  agreement  between the parties with
respect to the subject matter hereof,  and the parties shall not be bound by any
representations  or  agreements  which  are  not  expressly  set  forth  in this
Agreement.

       Q.   Amendments.

         No modification, amendment or waiver of any provision of this Agreement
shall be effective unless in writing signed by an authorized  officer of each of
the parties hereto.

       R.   Counterparts.

         This  Agreement  may be executed in one or more  counterparts,  each of
which  shall  for all  purposes  be deemed  to be an  original  and all of which
together shall constitute one and the same instrument.

       S.   Captions.

      The  captions  of  the  various  paragraphs  of  this  Agreement  are  for
convenience  of reference  only and shall not affect the  interpretation  of the
provisions hereof.

       T.   Governing Law.

      This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Virginia (other than its choice of law principles).


       IN WITNESS  WHEREOF,  the parties  have caused this  Agreement to be duly
executed by the respective officers as of the date first written above.


                                    SMITHFIELD HAM & PRODUCTS COMPANY,
                                     INCORPORATED

                                    By: Peter D. Pruden, III
                                           (signature)

                                           President


                                    DOUGHTIE'S FOODS, INC.

                                    By: Marion S. Whitfield, Jr.
                                            (signature)

                                        Senior Vice President