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                                                               EXHIBIT 10.2

                                  EXHIBIT 1.1A

                        FORM OF INVESTOR PLEDGE AGREEMENT

         THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT") is entered into as of
April 10, 2001 among M-FOODS DAIRY HOLDINGS, LLC, a Delaware limited liability
company (the "OBLIGOR") and BANK OF AMERICA, N.A., in its capacity as agent (in
such capacity, the "AGENT") for the lenders from time to time party to the
Credit Agreement described below (the "LENDERS").

                                    RECITALS

         WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "CREDIT AGREEMENT") among Michael Foods, Inc., a Minnesota corporation (the
"Borrower"), M-Foods Holdings, Inc., a Delaware corporation (the "PARENT") and
certain Subsidiaries of the Parent (individually a "GUARANTOR", and collectively
the "GUARANTORS"), the Lenders, the Agent and Bear, Stearns & Co., as
Syndication Agent, the Lenders have agreed to make Loans and issue or
participate in Letters of Credit upon the terms and subject to the conditions
set forth therein; and

         WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Obligor shall
have executed and delivered this Pledge Agreement to the Agent for the ratable
benefit of the Lenders.

         NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1.       DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
For purposes of this Pledge Agreement, the term "Lender" shall include, as of
any date of determination, any Affiliate of any Lender which is party to a
Hedging Agreement with any Credit Party.

         2.       PLEDGE AND GRANT OF SECURITY INTEREST. To secure the prompt
payment and performance in full when due, whether by lapse of time or otherwise,
of the Obligor Obligations (as defined in Section 3 hereof), the Obligor hereby
pledges and assigns to the Agent, for the ratable benefit of the Lenders, and
grants to the Agent, for the ratable benefit of the Lenders, a continuing
security interest in any and all right, title and interest of the Obligor in and
to the following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the "PLEDGED COLLATERAL"):

                  (a)      PLEDGED SHARES. (i) 100% (or, if less, the full
         amount owned by the Obligor) of the issued and outstanding shares of
         Capital Stock of Dairy LLC, and (ii) 100% (or, if less, the full amount
         owned by the Obligor) of the issued and outstanding shares of Capital
         Stock of Dairy TXCT LLC, in each case, together with the certificates

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         (or other agreements or instruments), if any, representing such Capital
         Stock, and all options and other rights, contractual or otherwise, with
         respect thereto (collectively, together with the shares of Capital
         Stock described in Section 2(b) below, the "PLEDGED SHARES"),
         including, but not limited to, the following:

                           (y)      all shares or securities representing a
                  dividend on any of the Pledged Shares, or representing a
                  distribution or return of capital upon or in respect of the
                  Pledged Shares, or resulting from a stock split, revision,
                  reclassification or other exchange therefor, and any
                  subscriptions, warrants, rights or options issued to the
                  holder of, or otherwise in respect of, the Pledged Shares; and

                           (z)      without affecting the obligations of the
                  Obligor under any provision prohibiting such action hereunder
                  or under the Credit Agreement, in the event of any
                  consolidation or merger involving the issuer of any Pledged
                  Shares and in which such issuer is not the surviving
                  corporation, all shares of each class of the Capital Stock of
                  the successor resulting from such consolidation or merger
                  payable to or received by the Obligor as consideration for
                  such merger.

                  (b)      PROCEEDS. All proceeds and products of the foregoing,
         however and whenever acquired and in whatever form.

         Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that the Obligor may from time to time
hereafter deliver additional Capital Stock to the Agent as collateral security
for the Obligor Obligations. Upon delivery to the Agent, such additional Capital
Stock shall be deemed to be part of the Pledged Collateral of the Obligor and
shall be subject to the terms of this Pledge Agreement.

         3.       SECURITY FOR OBLIGOR OBLIGATIONS. The security interest
created hereby in the Pledged Collateral of the Obligor constitutes continuing
collateral security for all of the Credit Party Obligations, now existing or
hereafter arising pursuant to the Credit Documents, owing from the Borrower or
any other Credit Party to any Lender or the Agent, howsoever evidenced, created,
incurred or acquired, whether primary, secondary, direct, contingent, or joint
and several, including, without limitation, all liabilities arising under
Hedging Agreements between any Credit Party and any Lender and all obligations
and liabilities incurred in connection with collecting and enforcing the
foregoing (collectively, the "OBLIGOR OBLIGATIONS").

         4.       DELIVERY OF THE PLEDGED COLLATERAL. The Obligor hereby agrees
that:

                  (a)      The Obligor shall deliver to the Agent (i)
         simultaneously with or prior to the execution and delivery of this
         Pledge Agreement, all certificates representing the Pledged Shares of
         such Obligor and (ii) promptly upon the receipt thereof by or on behalf
         of the Obligor, all other certificates and instruments constituting
         Pledged Collateral of the Obligor. Prior to delivery to the Agent, all
         such certificates and instruments constituting Pledged Collateral of
         the Obligor shall be held in trust by the Obligor for the benefit of
         the Agent pursuant hereto. All such certificates shall be delivered in
         suitable form for

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         transfer by delivery or shall be accompanied by duly executed
         instruments of transfer or assignment in blank, substantially in the
         form provided in EXHIBIT 4(a) attached hereto.

                  (b)      ADDITIONAL SECURITIES. If the Obligor shall receive
         by virtue of its being or having been the owner of any Pledged
         Collateral, any (i) stock certificate, including without limitation,
         any certificate representing a stock dividend or distribution in
         connection with any increase or reduction of capital, reclassification,
         merger, consolidation, sale of assets, combination of equity interests,
         stock splits, spin-off or split-off, promissory notes or other
         instrument; (ii) option or right, whether as an addition to,
         substitution for, or an exchange for, any Pledged Collateral or
         otherwise; (iii) dividends payable in securities; or (iv) distributions
         of securities in connection with a partial or total liquidation,
         dissolution or reduction of capital, capital surplus or paid-in
         surplus, then the Obligor shall receive such stock certificate,
         instrument, option, right or distribution in trust for the benefit of
         the Agent, shall segregate it from the Obligor's other property and
         shall deliver it forthwith to the Agent in the exact form received
         together with any necessary endorsement and/or appropriate stock power
         duly executed in blank, substantially in the form provided in EXHIBIT
         4(a), to be held by the Agent as Pledged Collateral and as further
         collateral security for the Obligor Obligations.

                  (c)      FINANCING STATEMENTS. The Obligor shall execute and
         deliver to the Agent such UCC or other applicable financing statements
         as may be reasonably requested by the Agent in order to perfect and
         protect the security interest created hereby in the Pledged Collateral
         of the Obligor.

         5.       REPRESENTATIONS AND WARRANTIES. The Obligor hereby represents
and warrants to the Agent, for the benefit of the Lenders, that:

                  (a)      AUTHORIZATION OF PLEDGED SHARES. The Pledged Shares
         are duly authorized and validly issued, are fully paid and (to the
         extent such concept is applicable) nonassessable and are not subject to
         the preemptive rights of any Person. All other Capital Stock
         constituting Pledged Collateral will be duly authorized and validly
         issued, fully paid and (to the extent such concept is applicable)
         nonassessable and not subject to the preemptive rights of any Person.

                  (b)      TITLE. The Obligor has good and indefeasible title to
         the Pledged Collateral of the Obligor and will at all times be the
         legal and beneficial owner of such Pledged Collateral free and clear of
         any Lien, other than Permitted Liens. There exists no "adverse claim"
         within the meaning of Section 8-302 of the Uniform Commercial Code as
         in effect in the State of New York as of the date hereof (the "UCC")
         with respect to the Pledged Shares of the Obligor.

                  (c)      EXERCISING OF RIGHTS. Subject to compliance with
         applicable laws affecting the offering and sale of securities, the
         exercise by the Agent of its rights and remedies hereunder will not
         violate any material law or governmental regulation or any material
         contractual restriction binding on or affecting the Obligor or any of
         its property.

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                  (d)      OBLIGOR'S AUTHORITY. No authorization, approval or
         action by, and no notice or filing with any Governmental Authority or
         with the issuer of any Pledged Stock is required either (i) for the
         pledge made by the Obligor or for the granting of the security interest
         by the Obligor pursuant to this Pledge Agreement or (ii) for the
         exercise by the Agent or the Lenders of their non-judicial foreclosure
         rights and remedies hereunder (except as may be required by laws
         affecting the offering and sale of securities). This Pledge Agreement
         has been duly executed and delivered on behalf of the Obligor. This
         Pledge Agreement constitutes a legal, valid and binding obligation of
         the Obligor enforceable in accordance with its terms, except as
         enforceability may be limited by applicable bankruptcy, fraudulent
         conveyance, insolvency, reorganization, moratorium or similar laws
         affecting the enforcement of creditors' rights generally and by general
         equitable principles (whether enforcement is sought by proceedings in
         equity or at law) and by an implied covenant of good faith and fair
         dealing.

                  (e)      SECURITY INTEREST/PRIORITY. This Pledge Agreement
         creates a valid security interest in favor of the Agent, for the
         ratable benefit of the Lenders, in the Pledged Collateral. The taking
         possession by the Agent of the certificates representing any
         certificated Pledged Shares and all other certificates and instruments
         constituting Pledged Collateral will perfect and establish the first
         priority of the Agent's security interest in such Pledged Shares and,
         when properly perfected by filing or registration, in all other Pledged
         Collateral securing the Obligor Obligations. Except as set forth in
         this Section 5(e), no action is necessary to perfect or otherwise
         protect such security interest.

                  (f)      NO OTHER SHARES. As of the Closing Date, the Obligor
         owns no other Captial Stock of Dairy LLC or Dairy TXCT LLC other than
         as set forth on SCHEDULE 5(f) attached hereto.

                  (g)      PARTNERSHIP AND LIMITED LIABILITY COMPANY INTERESTS.
         Except as previously disclosed to the Agent, none of the Pledged Shares
         (i) is dealt in or traded on a securities exchange or in a securities
         market, (ii) by its terms expressly provides that it is a security
         governed by Article 8 of the UCC, (iii) is an investment company
         security or (iv) is held in a securities account.

                  (h)      ORGANIZATION AND GOOD STANDING. The Obligor (i) is
         duly organized, validly existing and is in good standing under the laws
         of the jurisdiction of its organization, (ii) has the necessary power
         and authority, and the legal right, to own and operate its property and
         to conduct the business in which it is currently engaged and (iii) is
         duly qualified as a foreign entity and in good standing under the laws
         of each jurisdiction where its ownership, lease or operation of
         property or the conduct of its business requires such qualification,
         other than in such jurisdictions where the failure to be so qualified
         and in good standing would not have a Material Adverse Effect.

                  (i)      NO CONFLICTS. Neither the execution and delivery of
         this Pledge Agreement, nor the consummation of the transactions
         contemplated therein, nor performance of and compliance with the terms
         and provisions thereof by the Obligor will (i) violate or conflict with
         any provision of its articles or certificate of formation, operating

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         agreement or other organizational or governing documents, (ii) violate,
         contravene or materially conflict with any material Requirement of Law
         or any other material law, regulation (including, without limitation,
         Regulation U or Regulation X), order, writ, judgment, injunction,
         decree or permit applicable to it, (iii) violate, contravene or
         conflict with contractual provisions of, or cause an event of default
         under, any indenture, loan agreement, mortgage, deed of trust, contract
         or other agreement or instrument to which it is a party or by which it
         may be bound, the violation of which could reasonably be expected to
         have a Material Adverse Effect, or (iv) result in or require the
         creation of any Lien (other than those contemplated in or created in
         connection with the Credit Documents) upon or with respect to its
         properties.

         6.       COVENANTS. The Obligor hereby covenants that, until such time
as this Pledge Agreement has been terminated in accordance with the terms of
Section 14(a), the Obligor shall:

                  (a)      BOOKS AND RECORDS. Mark its books and records (and
         shall cause the issuer of the Pledged Shares of the Obligor to mark its
         books and records) to reflect the security interest granted to the
         Agent, for the ratable benefit of the Lenders, pursuant to this Pledge
         Agreement.

                  (b)      DEFENSE OF TITLE. Warrant and defend title to and
         ownership of the Pledged Collateral of the Obligor at the expense of
         the Borrower against the claims and demands of all other parties
         claiming an interest therein, keep the Pledged Collateral free from all
         Liens, except for Liens of the same type as Permitted Liens, and not
         sell, exchange, transfer, assign, lease or otherwise dispose of Pledged
         Collateral of the Obligor or any interest therein, except as permitted
         under the Credit Agreement and the other Credit Documents.

                  (c)      FURTHER ASSURANCES. Promptly execute and deliver at
         its expense all further instruments and documents and take all further
         action that may be reasonably necessary or that the Agent may
         reasonably request in order to (i) perfect and protect the security
         interest created hereby in the Pledged Collateral of the Obligor
         (including without limitation any and all actions necessary to satisfy
         the Agent that the Agent has obtained a first priority perfected
         security interest in any Pledged Shares); (ii) enable the Agent to
         exercise and enforce its rights and remedies hereunder in respect of
         the Pledged Collateral of the Obligor; and (iii) otherwise effect the
         purposes of this Pledge Agreement.

                  (d)      AMENDMENTS. Not make or consent to any amendment or
         other modification or waiver with respect to any of the Pledged
         Collateral of the Obligor or enter into any agreement or allow to exist
         any restriction with respect to any of the Pledged Collateral of the
         Obligor other than pursuant hereto or as may be permitted under the
         Credit Agreement.

                  (e)      COMPLIANCE WITH SECURITIES LAWS. File all reports and
         other information now or hereafter required to be filed by the Obligor
         with the United States Securities and

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         Exchange Commission and any other state, federal or foreign agency in
         connection with the ownership of the Pledged Collateral of the Obligor.

                  (f)      CERTAIN MONIES TO BE HELD IN TRUST. In the event that
         the Obligor receives (i) any Net Cash Proceeds from an Asset
         Disposition of (A) the Capital Stock of Dairy LLC or Dairy TXCT LLC or
         (B) any of the Property of Dairy LLC or Dairy TXCT LLC which are not
         immediately distributed to a Credit Party or (ii) any Restricted
         Payment from Dairy LLC or Dairy TXCT LLC in violation of the Credit
         Agreement, such Net Cash Proceeds or Restricted Payment, as applicable,
         shall (i) unless a Bankruptcy Event shall have occurred with respect to
         any Consolidated Party, be distributed to the Credit Parties in the
         manner specified in Section 8.7 of the Credit Agreement or (ii) if a
         Bankruptcy Event shall have occurred with respect to any Consolidated
         Party, be held by the Obligor in trust for the benefit of, and shall be
         paid forthwith over and delivered, upon written request, to the Agent,
         for application to the payment of the Credit Party Obligations in
         accordance with the terms of the Credit Agreement.

         7.       ADVANCES BY LENDERS. On failure of the Obligor to perform any
of the covenants and agreements contained herein and upon written notice to the
Obligor, the Agent may, at its sole option and in its sole discretion, perform
the same and in so doing may expend such sums as the Agent may reasonably deem
advisable in the performance thereof, including, without limitation, the payment
of any insurance premiums, the payment of any taxes, a payment to obtain a
release of a Lien or potential Lien (other than Permitted Liens), expenditures
made in defending against any adverse claim and all other expenditures which the
Agent or the Lenders may make for the protection of the security hereof or which
may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Borrower promptly upon timely notice thereof
and demand therefor, shall constitute additional Obligor Obligations and shall
bear interest from the date said amounts are expended at the default rate
specified in SECTION 3.1 of the Credit Agreement for Revolving Loans that are
Base Rate Loans. No such performance of any covenant or agreement by the Agent
or the Lenders on behalf of the Obligor, and no such advance or expenditure
therefor, shall relieve the Obligor of any default under the terms of this
Pledge Agreement. The Agent may make any payment hereby authorized in accordance
with any bill, statement or estimate procured from the appropriate public office
or holder of the claim to be discharged without inquiry into the accuracy of
such bill, statement or estimate or into the validity of any tax assessment,
sale, forfeiture, tax lien, title or claim except to the extent such payment is
being contested in good faith by the Obligor or the Borrower in appropriate
proceedings and against which adequate reserves are being maintained in
accordance with GAAP.

         8.       EVENTS OF DEFAULT. The occurrence of an event which under the
Credit Agreement would constitute an Event of Default shall be an Event of
Default hereunder (an "EVENT OF DEFAULT").

         9.       REMEDIES.

                  (a)      GENERAL REMEDIES. Upon the occurrence of an Event of
         Default and during the continuation thereof, the Agent and the Lenders
         shall have, in respect of the Pledged Collateral of the Obligor, in
         addition to the rights and remedies provided herein,

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         in the Credit Documents, in any Hedging Agreement between any Credit
         Party and any Lender, or by law, the rights and remedies of a secured
         party under the UCC or any other applicable law.

                  (b)      SALE OF PLEDGED COLLATERAL. Upon the occurrence of an
         Event of Default and during the continuation thereof, without limiting
         the generality of this Section and without notice, the Agent may, at
         the direction of the Required Lenders, sell or otherwise dispose of or
         realize upon the Pledged Collateral, or any part thereof, in one or
         more parcels, at public or private sale, at any exchange or broker's
         board or elsewhere, at such price or prices and on such other terms as
         the Agent may deem commercially reasonable, for cash, credit or for
         future delivery or otherwise in accordance with applicable law. To the
         extent permitted by law, any Lender may in such event, bid for the
         purchase of such securities. The Obligor agrees that, to the extent
         notice of sale shall be required by law and has not been waived by the
         Obligor, any requirement of reasonable notice shall be met if notice,
         specifying the place of any public sale or the time after which any
         private sale is to be made, is personally served on or mailed, postage
         prepaid, to the Borrower and the Obligor, in accordance with the notice
         provisions of Section 17 hereof at least 10 days before the time of
         such sale (or such longer period as may be required under applicable
         law). The Agent shall not be obligated to make any sale of Pledged
         Collateral of the Obligor regardless of notice of sale having been
         given. The Agent may adjourn any public or private sale from time to
         time by announcement at the time and place fixed therefor, and such
         sale may, without further notice, be made at the time and place to
         which it was so adjourned.

                  (c)      PRIVATE SALE. Upon the occurrence of an Event of
         Default and during the continuation thereof, the Obligor recognizes
         that the Agent may deem it impracticable to effect a public sale of all
         or any part of the Pledged Shares or any of the securities constituting
         Pledged Collateral and that the Agent may at the direction of the
         Required Lenders, therefore, determine to make one or more private
         sales of any such securities to a restricted group of purchasers who
         will be obligated to agree, among other things, to acquire such
         securities for their own account, for investment and not with a view to
         the distribution or resale thereof. The Obligor acknowledges that any
         such private sale may be at prices and on terms less favorable to the
         seller than the prices and other terms which might have been obtained
         at a public sale and, notwithstanding the foregoing, agrees that such
         private sale shall be deemed to have been made in a commercially
         reasonable manner and that the Agent shall have no obligation to delay
         sale of any such securities for the period of time necessary to permit
         the issuer of such securities to register such securities for public
         sale under the Securities Act of 1933, as amended. The Obligor further
         acknowledges and agrees that any offer to sell such securities which
         has been (i) publicly advertised on a bona fide basis in a newspaper or
         other publication of general circulation in the financial community of
         New York, New York (to the extent that such offer may be advertised
         without prior registration under the Securities Act of 1933), or (ii)
         made privately in the manner described above shall be deemed to involve
         a "public sale" under the UCC, notwithstanding that such sale may not
         constitute a "public offering" under the Securities Act of 1933, and
         the Agent may, in such event, bid for the purchase of such securities.

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                  (d)      RETENTION OF PLEDGED COLLATERAL. In addition to the
         rights and remedies hereunder, upon the occurrence and during the
         continuance of an Event of Default, the Agent may, at the direction of
         the Required Lenders, after providing the notices required by Section
         9-505(2) of the UCC or otherwise complying with the requirements of
         applicable law of the relevant jurisdiction, retain all or any portion
         of the Pledged Collateral in satisfaction of the Obligor Obligations.
         Unless and until the Agent shall have provided such notices, however,
         the Agent shall not be deemed to have retained any Pledged Collateral
         in satisfaction of any Obligor Obligations for any reason.

                  (e)      MANNER OF EXERCISE OF REMEDIES. (i) Notwithstanding
         anything herein to the contrary and to the extent not prohibited by
         applicable law, the Agent shall not foreclose on, sell or pursue any
         remedies in respect of any Capital Stock of Dairy LLC pledged to the
         Agent (all of such Capital Stock, the "Total Pledged Dairy LLC
         Collateral") by the pledgors (collectively, the "Dairy LLC Pledgors")
         under or pursuant to either of the Investor Pledge Agreement and the
         Pledge Agreement (as defined in the Credit Agreement) (collectively,
         the "Pledge Agreements") unless the Agent sells, forecloses on, or
         pursues remedies in respect of all of such Total Pledged Dairy LLC
         Collateral. To the extent not prohibited by applicable law, the Agent
         shall not foreclose on or sell any portion of the Total Pledged Dairy
         LLC Collateral of a particular class owned by a particular Dairy LLC
         Pledgor unless the Agent forecloses on or sells the Total Pledged Dairy
         LLC Collateral of such class (based upon the number of shares owned by
         a particular Dairy LLC Pledgor and the total number of shares of such
         class which are pledged to the Agent) owned by all Dairy LLC Pledgors
         on a pro rata basis.

                  (ii)     Notwithstanding anything herein to the contrary and
         to the extent not prohibited by applicable law, the Agent shall not
         foreclose on, sell or pursue any remedies in respect of any Capital
         Stock of Dairy TXCT LLC pledged to the Agent (all of such Capital
         Stock, the "Total Pledged Dairy TXCT LLC Collateral") by the pledgors
         (collectively, the " Dairy TXCT LLC Pledgors") under or pursuant to
         either of the Pledge Agreements unless the Agent sells, forecloses on,
         or pursues remedies in respect of all of such Total Pledged Dairy TXCT
         LLC Collateral. To the extent not prohibited by applicable law, the
         Agent shall not foreclose on or sell any portion of the Total Pledged
         Dairy TXCT LLC Collateral of a particular class owned by a particular
         Dairy TXCT LLC Pledgor unless the Agent forecloses on or sells the
         Total Pledged Dairy TXCT LLC Collateral of such class (based upon the
         number of shares owned by a particular Dairy TXCT LLC Pledgor and the
         total number of shares of such class which are pledged to the Agent)
         owned by all Dairy TXCT LLC Pledgors on a pro rata basis.

                  (f)      NO DEFICIENCY; LIMITATION ON RECOURSE. EXCEPT AS
         OTHERWISE PROVIDED IN SECTION 6(f), NOTWITHSTANDING ANY OTHER PROVISION
         TO THE CONTRARY CONTAINED IN THIS PLEDGE AGREEMENT OR ELSEWHERE, THE
         AGENT'S AND THE LENDERS' RIGHTS PURSUANT TO THIS PLEDGE AGREEMENT ARE
         LIMITED TO THE PLEDGED COLLATERAL, AND THE AGENT'S AND THE LENDERS'
         SOLE RECOURSE WITH RESPECT TO THE OBLIGOR TO SATISFY THE

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         OBLIGOR OBLIGATIONS SHALL BE TO EXERCISE REMEDIES WITH RESPECT TO THE
         PLEDGED COLLATERAL. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING
         THE OBLIGOR SHALL NOT BE LIABLE FOR ANY DEFICIENCY IF THE PROCEEDS OF
         ANY DISPOSITION OF THE PLEDGED COLLATERAL IS INSUFFICIENT TO SATISFY
         THE OBLIGOR OBLIGATIONS. Except as otherwise provided in Section 6(f),
         the Obligor shall have no personal liability under this Pledge
         Agreement or any other Credit Documents or any other document for the
         Obligor Obligations, and no recourse (except as provided in Section
         6(f) and the first sentence of this paragraph) for the payment of any
         amount due under this Pledge Agreement, for the Obligor Obligations or
         for any claim arising out of this Pledge Agreement or the Credit
         Documents, whether for failure to pay, perform or discharge any
         monetary or non-monetary obligation, breaches of representations,
         warranties or covenants, the occurrence of defaults or otherwise, shall
         be had against (i) the Obligor, (ii) any past, present or future
         equityholder, officer, director or Affiliate (other than Consolidated
         Parties), as such, of (A) the Obligor, or (B) any successor to the
         Obligor, (iii) any direct or indirect parent of the Obligor, (iv) any
         other Subsidiary or Affiliate of any such direct or indirect parent
         (other than Consolidated Parties), or (v) any incorporator, member,
         equityholder, officer or director, as such, of any such parent or other
         Subsidiary or Affiliate (other than Consolidated Parties). Any surplus
         remaining after the full payment and satisfaction of the Obligor
         Obligations shall be returned to the Obligor or to whomsoever a court
         of competent jurisdiction shall determine to be entitled thereto.

         10.      RIGHTS OF THE AGENT.

                  (a)      POWER OF ATTORNEY. In addition to other powers of
         attorney contained herein, the Obligor hereby designates and appoints
         the Agent, on behalf of the Lenders, and each of its designees or
         agents as attorney-in-fact of the Obligor, irrevocably and with power
         of substitution, with authority to take any or all of the following
         actions upon the occurrence and during the continuance of an Event of
         Default and subject to clause (d) below with respect to voting rights:

                           (i)      to demand, collect, settle, compromise,
                  adjust and give discharges and releases concerning the Pledged
                  Collateral of the Obligor, all as the Agent may reasonably
                  determine;

                           (ii)     to commence and prosecute any actions at any
                  court for the purposes of collecting any of the Pledged
                  Collateral of the Obligor and enforcing any other right in
                  respect thereof;

                           (iii)    to defend, settle or compromise any action
                  or proceeding brought and, in connection therewith, give such
                  discharges or releases as the Agent may deem reasonably
                  appropriate;

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                           (iv)     to pay or discharge taxes, liens, security
                  interests, or other encumbrances levied or placed on or
                  threatened against the Pledged Collateral of the Obligor;

                           (v)      to direct any parties liable for any payment
                  under any of the Pledged Collateral to make payment of any and
                  all monies due and to become due thereunder directly to the
                  Agent or as the Agent shall direct;

                           (vi)     to receive payment of and receipt for any
                  and all monies, claims, and other amounts due and to become
                  due at any time in respect of or arising out of any Pledged
                  Collateral of the Obligor;

                           (vii)    to sign and endorse any drafts, assignments,
                  proxies, stock powers, verifications, notices and other
                  documents relating to the Pledged Collateral of the Obligor;

                           (viii)   execute and deliver all assignments,
                  conveyances, statements, financing statements, renewal
                  financing statements, pledge agreements, affidavits, notices
                  and other agreements, instruments and documents that the Agent
                  may reasonably determine necessary in order to perfect and
                  maintain the security interests and liens granted in this
                  Pledge Agreement and in order to fully consummate all of the
                  transactions contemplated therein;

                           (ix)     to exchange any of the Pledged Collateral of
                  the Obligor or other property upon any merger, consolidation,
                  reorganization, recapitalization or other readjustment of the
                  issuer thereof and, in connection therewith, deposit any of
                  the Pledged Collateral of the Obligor with any committee,
                  depository, transfer agent, registrar or other designated
                  agency upon such terms as the Agent may reasonably determine;

                           (x)      to vote for a shareholder resolution, or to
                  sign an instrument in writing, sanctioning the transfer of any
                  or all of the Pledged Shares of the Obligor into the name of
                  the Agent or one or more of the Lenders or into the name of
                  any transferee to whom the Pledged Shares of the Obligor or
                  any part thereof may be sold pursuant to Section 10 hereof;
                  and

                           (xi)     to do and perform all such other acts and
                  things as the Agent may reasonably deem to be necessary,
                  proper or convenient in connection with the Pledged Collateral
                  of the Obligor.

         This power of attorney is a power coupled with an interest and shall be
         irrevocable until this Pledge Agreement has been terminated in
         accordance with the term of Section 14(a). The Agent shall be under no
         duty to exercise or withhold the exercise of any of the rights, powers,
         privileges and options expressly or implicitly granted to the Agent in
         this Pledge Agreement, and shall not be liable for any failure to do so
         or any delay in doing so. The Agent shall not be liable for any act or
         omission or for any error of judgment or any

                                       10
<PAGE>

         mistake of fact or law in its individual capacity or its capacity as
         attorney-in-fact except acts or omissions resulting from its gross
         negligence, bad faith or willful misconduct. This power of attorney is
         conferred on the Agent solely to protect, preserve and realize upon its
         security interest in Pledged Collateral.

                  (b)      ASSIGNMENT BY THE AGENT. The Agent may from time to
         time assign the Obligor Obligations and the Pledged Collateral to any
         successor Agent appointed in accordance with SECTION 10.7 of the Credit
         Agreement, and the assignee shall be entitled to all of the rights and
         remedies of the Agent under this Pledge Agreement in relation thereto.

                  (c)      THE AGENT'S DUTY OF CARE. Other than the exercise of
         reasonable care to assure the safe custody of the Pledged Collateral
         while being held by the Agent hereunder and the accounting of monies
         actually received hereunder, the Agent shall have no duty or liability
         to preserve rights pertaining thereto, it being understood and agreed
         that Obligor shall be responsible for preservation of all rights in the
         Pledged Collateral of the Obligor, and the Agent shall be relieved of
         all responsibility for Pledged Collateral upon surrendering it or
         tendering the surrender of it to the Obligor. The Agent shall be deemed
         to have exercised reasonable care in the custody and preservation of
         the Pledged Collateral in its possession if such Pledged Collateral is
         accorded treatment substantially equal to that which the Agent accords
         its own property, which shall be no less than the treatment employed by
         a reasonable and prudent agent in the industry, it being understood
         that the Agent shall not have responsibility for (i) ascertaining or
         taking action with respect to calls, conversions, exchanges,
         maturities, tenders or other matters relating to any Pledged
         Collateral, whether or not the Agent has or is deemed to have knowledge
         of such matters; or (ii) taking any necessary steps to preserve rights
         against any parties with respect to any Pledged Collateral.

                  (d)      VOTING RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL.

                           (i)      So long as no Event of Default shall have
                  occurred and be continuing, to the extent permitted by law,
                  the Obligor may exercise any and all voting and other
                  consensual rights pertaining to the Pledged Collateral of the
                  Obligor or any part thereof for any purpose not inconsistent
                  with the terms of this Pledge Agreement or the Credit
                  Agreement; and

                           (ii)     Upon the occurrence and during the
                  continuance of an Event of Default, all rights of the Obligor
                  to exercise the voting and other consensual rights which it
                  would otherwise be entitled to exercise pursuant to paragraph
                  (i) of this Section upon written notice to the Borrower and
                  the Obligor shall cease and all such rights shall thereupon
                  become vested in the Agent which shall then have the sole
                  right to exercise such voting and other consensual rights.

                  (e)      DIVIDEND RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL.

                                       11
<PAGE>

                           (i)      Subject to subclause (ii) below and subject
                  to Section 4(b) hereof, the Obligor may receive and retain any
                  and all dividends (other than stock dividends and other
                  dividends constituting Pledged Collateral which are addressed
                  hereinabove) or interest paid in respect of the Pledged
                  Collateral to the extent they are allowed under the Credit
                  Agreement.

                           (ii)     Upon the occurrence and during the
                  continuance of an Event of Default (but subject to the
                  provisions of the Credit Agreement):

                                    (A)      all rights of the Obligor to
                           receive the dividends and interest payments which it
                           would otherwise be authorized to receive and retain
                           pursuant to paragraph (i) of this Section upon
                           written notice to the Borrower and the Obligor shall
                           cease and all such rights shall thereupon be vested
                           in the Agent which shall then have the sole right to
                           receive and hold as Pledged Collateral such dividends
                           and interest payments; and

                                    (B)      all dividends and interest payments
                           which are received by the Obligor contrary to the
                           provisions of paragraph (A) of this Section shall be
                           received in trust for the benefit of the Agent, shall
                           be segregated from other property or funds of the
                           Obligor, and shall be forthwith paid over to the
                           Agent as Pledged Collateral in the exact form
                           received, to be held by the Agent as Pledged
                           Collateral and as further collateral security for the
                           Obligor Obligations.

                  (f)      RELEASE OF PLEDGED COLLATERAL. The Agent may release
         any of the Pledged Collateral from this Pledge Agreement or may
         substitute any of the Pledged Collateral for other Pledged Collateral
         without altering, varying or diminishing in any way the force, effect,
         lien, pledge or security interest of this Pledge Agreement as to any
         Pledged Collateral not expressly released or substituted.

         11.      RIGHTS OF REQUIRED LENDERS. To the extent (i) the Agent has
refused to exercise any of its rights hereunder at the direction of the Required
Lenders or (ii) the Agent has resigned or has been removed pursuant to Section
10.7 of the Credit Agreement and no successor Agent has been appointed, all
rights of the Agent hereunder may be exercised by the Required Lenders.

         12.      APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Obligor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Obligor Obligations in the order set forth in SECTION 3.15(b)
of the Credit Agreement, and the Obligor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
the Agent shall have the continuing and exclusive right to apply and reapply any
and all such payments and proceeds in the Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.

                                       12
<PAGE>

         13.      EXPENSES. The Borrower agrees to promptly pay upon demand any
and all reasonable documented costs and expenses of the Agent or the Lenders as
necessary to protect the Pledged Collateral or to exercise any rights or
remedies under this Pledge Agreement or with respect to any Pledged Collateral,
subject to the same terms and conditions applicable to Credit Parties under
SECTION 11.5 of the Credit Agreement.

         14.      CONTINUING AGREEMENT.

                  (a)      This Pledge Agreement shall be a continuing agreement
         in every respect and shall remain in full force and effect until the
         earlier of (i) such time as the Credit Party Obligations are Fully
         Satisfied or (ii) such time as all of Net Cash Proceeds from the sales
         of the Capital Stock of Dairy LLC and Dairy TXCT LLC to one or more
         Persons who are not Affiliates of the Borrower pursuant to Permitted
         Asset Dispositions have been irrevocably delivered to the Credit
         Parties. At such time, this Pledge Agreement and the liens and security
         interests created hereunder shall automatically terminate and the Agent
         and the Lenders shall, at the expense of the Obligor, redeliver all
         Pledged Shares to the Obligor and shall execute and deliver all UCC
         termination statements and/or other documents reasonably requested by
         the Obligor evidencing such termination. Any other releases of Pledged
         Collateral prior to the termination of this Pledge Agreement shall be
         made pursuant to Section 8.5 of the Credit Agreement. Notwithstanding
         the foregoing all indemnities provided hereunder shall survive
         termination of this Pledge Agreement.

                  (b)      This Pledge Agreement shall continue to be effective
         or be automatically reinstated, as the case may be, if at any time
         payment, in whole or in part, of any of the Obligor Obligations is
         rescinded or must otherwise be restored or returned by the Agent or any
         Lender as a preference, fraudulent conveyance or otherwise under any
         bankruptcy, insolvency or similar law, all as though such payment had
         not been made; PROVIDED that in the event payment of all or any part of
         the Obligor Obligations is rescinded or must be restored or returned,
         all reasonable costs and expenses (including without limitation any
         reasonable legal fees and disbursements) incurred by the Agent in
         defending and enforcing such reinstatement shall be deemed to be
         included as a part of the Obligor Obligations.

         15.      AMENDMENTS; WAIVERS; MODIFICATIONS. This Pledge Agreement and
the provisions hereof may not be amended, waived, modified, changed, discharged
or terminated unless such amendment, waiver, modification, change, discharge or
termination is in writing entered into, or approved in writing, by the Agent and
the Obligor.

         16.      SUCCESSORS IN INTEREST. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon the
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the Agent
and the Lenders and their successors and permitted assigns; PROVIDED, HOWEVER,
that the Obligor may not assign its rights or delegate its duties hereunder
without the prior written consent of each Lender or the Required Lenders, as
required by the Credit Agreement.

                                       13
<PAGE>

         17.      NOTICES. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (a) when delivered, (b) when transmitted via telecopy (or other
facsimile device) to the number set out below, (c) the Business Day following
the day on which the same has been delivered prepaid (or pursuant to an invoice
arrangement) to a reputable national overnight air courier service, or (d) the
third Business Day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective parties at the
address, in the case of the Obligor, set forth below, and, in the case of the
Agent, set forth on SECTION 11.1 of the Credit Agreement, or at such other
address as such party may specify by written notice to the other parties hereto:

         if to the Obligor:

                  Vestar Capital Partners
                  1225 Seventeenth Street
                  Suite 1660
                  Denver, CO  80202
                  Attn: Chris Henderson, Managing Director
                  Telephone:  (303) 294-1822
                  Telecopy:  (303) 292-6639

                  and

                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, Illinois  60601
                  Attn:  Steve Ritchie
                  Telephone:  (312) 861-2210
                  Telecopy:    (312) 861-2200.

         18.      COUNTERPARTS. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.

         19.      HEADINGS. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.

                                       14
<PAGE>

         20.      GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

                  (a)      THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
         OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
         INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
         legal action or proceeding with respect to this Pledge Agreement may be
         brought in the courts of the State of New York in New York County, or
         of the United States for the Southern District of New York, and, by
         execution and delivery of this Pledge Agreement, the Obligor hereby
         irrevocably accepts for itself and in respect of its property,
         generally and unconditionally, the jurisdiction of such courts. Each
         Obligor further irrevocably consents to the service of process out of
         any of the aforementioned courts in any such action or proceeding by
         the mailing of copies thereof by registered or certified mail, postage
         prepaid, to it at the address for notices pursuant to Section 17
         hereof, such service to become effective 30 days after such mailing.
         Nothing herein shall affect the right of the Agent to serve process in
         any other manner permitted by law or to commence legal proceedings or
         to otherwise proceed against the Obligor in any other jurisdiction.

                  (b)      The Obligor hereby irrevocably waives any objection
         which it may now or hereafter have to the laying of venue of any of the
         aforesaid actions or proceedings arising out of or in connection with
         this Pledge Agreement brought in the courts referred to in subsection
         (a) hereof and hereby further irrevocably waives and agrees not to
         plead or claim in any such court that any such action or proceeding
         brought in any such court has been brought in an inconvenient forum.

         21.      WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         22.      SEVERABILITY. If any provision of any of the Pledge Agreement
is determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

         23.      ENTIRETY. This Pledge Agreement represents the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any.

         24.      SURVIVAL. All representations and warranties of the Obligor
hereunder shall survive the execution and delivery of this Pledge Agreement.

         25.      OTHER SECURITY. To the extent that any of the Obligor
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, real and other personal property
owned by the Obligor), or by a guarantee, endorsement or property of any other
Person, then the Agent and the Lenders shall have the right to proceed

                                       15
<PAGE>

against such other property, guarantee or endorsement upon the occurrence and
during the continuance of any Event of Default, and the Agent and the Lenders
have the right, in their sole discretion, to determine which rights, security,
liens, security interests or remedies the Agent and the Lenders shall at any
time pursue, relinquish, subordinate, modify or take with respect thereto,
without in any way modifying or affecting any of them or any of the Agent's and
the Lenders' rights or the Obligor Obligations under this Pledge Agreement,
under any other of the Credit Documents or under any Hedging Agreement between
any Credit Party and any Lender.

                  [remainder of page intentionally left blank]

                                       16
<PAGE>

         Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.

OBLIGOR:                            M-FOODS DAIRY HOLDINGS, LLC

                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Title:
                                          --------------------------------------

Acknowledged and consented to as of the date first above written.

M-FOODS DAIRY, LLC

By:
   -----------------------------------------
Name:    John D. Reedy
Title:   V.P. - Finance and C.F.O.

M-FOODS DAIRY TXCT, LLC

By:
   -----------------------------------------
Name:    John D. Reedy
Title:   V.P. - Finance and C.F.O.

Acknowledged and agreed to as of the date first above written.

MICHAEL FOODS, INC.

By:
   -----------------------------------------
Name:    John D. Reedy
Title:   E.V.P.,  C.F.O. and Treasurer

                                       17
<PAGE>

Accepted and agreed to as of the date first above written.

BANK OF AMERICA, N.A., as Agent

By:
   -----------------------------------------
Name:
     ---------------------------------------
Title:
      --------------------------------------

                                       18
<PAGE>

                                  EXHIBIT 4(a)

                                       to

                            Investor Pledge Agreement

                           dated as of April 10, 2001

                        in favor of Bank of America, N.A.

                                    as Agent

                             IRREVOCABLE STOCK POWER

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to

the following shares of Capital Stock of ____________________, a _____________
corporation:

                 NO. OF SHARES                     CERTIFICATE NO.
                 -------------                     ---------------

and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such Capital Stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.

                                   ---------------------------------------

                                   By:
                                      ------------------------------------
                                   Name:
                                        ----------------------------------
                                   Title:
                                         ---------------------------------

                                       19
<PAGE>

                                  SCHEDULE 5(f)

                                       to

                            Investor Pledge Agreement

                           dated as of April 10, 2001

                        in favor of Bank of America, N.A.

                                    as Agent

                                  PLEDGED STOCK

                               NUMBER OF      CERTIFICATE        PERCENTAGE
ISSUER                           SHARES          NUMBER          OWNERSHIP
------                           ------          ------          ---------

M-Foods Dairy, LLC

M-Foods Dairy TXCT, LLC

                                       20<PAGE>
                                                                    Exhibit 10.5

                                                                [Execution Copy]

                              EMPLOYMENT AGREEMENT

            AGREEMENT, dated as of the 10th day of April, 2001, by and among
Michael Foods, Inc., a Minnesota corporation having its principal executive
offices in Minneapolis, Minnesota (the "Company"), Gregg A. Ostrander (the
"Executive"), and for the purposes of Section 6 hereof, M-Foods Holdings, Inc.,
a Delaware corporation and controlling entity of the Company ("Holdings").

            WHEREAS, Executive currently serves as a senior executive officer of
the Company;

            WHEREAS, the Company recognizes the Executive's substantial
contribution to the growth and success of the Company, desires to provide for
the continued employment of the Executive and to make certain changes in the
Executive's employment arrangements with the Company, which the Board has
determined will reinforce and encourage the continued attention and dedication
to the Company of the Executive as a member of the Company's senior management
in the best interests of the Company and its shareholders;

            WHEREAS, the Executive is willing to continue to serve the Company
on the terms and conditions set forth below;

            NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

            1. Employment Period. Subject to the terms and conditions of this
Agreement, including Section 3, the Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue in the employ of the
Company, for the period commencing on the date hereof (the "Effective Date") and
ending on the second anniversary of such Effective Date (the "Employment
Period"), provided, however, that commencing on the first anniversary of the
Effective Date and each subsequent anniversary thereafter, the Employment Period
shall automatically be extended for one additional year.

            2. Terms of Employment.

                  (a) Position and Duties.

                        (i) During the Employment Period, the Executive shall
      serve as Chairman of the Board of Directors, President and Chief Executive
      Officer of the Company with the appropriate authority, duties and
      responsibilities attendant to such positions. Executive shall also serve,
      at the request of the Company, as a Director of the Company and each of
      its subsidiaries.

                        (ii) During the Employment Period, and excluding any
      periods of vacation and sick leave to which the Executive is entitled, the
      Executive agrees to devote substantially all of his attention and time
      during his normal business hours to the business
<PAGE>

      and affairs of the Company and, to the extent necessary to discharge the
      responsibilities assigned to the Executive hereunder, to use the
      Executive's reasonable best efforts to perform faithfully and efficiently
      such responsibilities.

                  (b) Compensation.

                        (i) Annual Base Salary. Effective immediately, and
      during the Employment Period, the Executive shall receive an annual base
      salary ("Annual Base Salary") of at least $595,000, the competitiveness of
      which shall be periodically reviewed and adjusted in accordance with
      Company policy. Any increase in Annual Base Salary shall not serve to
      limit or reduce any other obligation to the Executive under this
      Agreement. Annual Base Salary shall not be reduced after any such increase
      and the term Annual Base Salary as utilized in this Agreement shall refer
      to Annual Base Salary as so increased.

                        (ii) Annual Bonus. During the Employment Period, the
      Executive shall participate in such bonus arrangements as may be approved
      by the Compensation Committee of the Board (the "Compensation Committee")
      (the aggregate of all payments made under such bonus arrangements being
      herein referred to as the "Annual Bonus"). Executive's aggregate bonus
      opportunity will be no less than 100% of Annual Base Salary and the
      "Target Bonus" will be no less than 62.5% of Annual Base Salary or greater
      as determined by the Compensation Committee. The Annual Bonus shall be
      paid within two and one-half months of the end of the fiscal year of the
      Company to which it relates. If a Change in Control occurs, the Executive
      shall be paid at least the Target Bonus for the year in which such Change
      in Control occurs and in each subsequent year of continuing employment
      until the end of the Employment Period.

                        (iii) Long-Term Incentive Plans. The Executive shall
      participate in long-term incentive plans including all stock option plans
      and other long-term incentive plans the Company may adopt from time to
      time on a basis no less favorable than that provided to any other
      executive officer of the Company.

                        (iv) Other Employee Benefit Plans. During the Employment
      Period, except as otherwise expressly provided herein, the Executive shall
      be entitled to participate in all compensation, incentive, employee
      benefit, welfare and other plans, practices, policies and programs and
      fringe benefits on a basis no less favorable than that provided to any
      other executive officer of the Company.

            3. Termination of Employment.

                  (a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written

                                       -2-
<PAGE>

notice in accordance with Section 11(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean a determination by the Company in its sole discretion
that Executive is unable to perform his job responsibilities as a result of
chronic illness, physical, mental or any other disability for a period of six
months or more.

                  (b) With or Without Cause. The Company may terminate the
Executive's employment during the Employment Period with or without Cause. For
purposes of this Agreement, "Cause" shall mean:

                        (i) the continued failure of the Executive to perform
      substantially the Executive's duties with the Company or one of its
      affiliates (other than any such failure resulting from incapacity due to
      physical or mental illness), after a written demand for substantial
      performance is delivered to the Executive by the Board which specifically
      identifies the manner in which the Board believes that the Executive has
      not substantially performed the Executive's duties, or

                        (ii) the willful engaging by the Executive in illegal
      conduct or gross misconduct which is materially and demonstrably injurious
      to the Company, or

                        (iii) conviction of a felony or guilty or nolo
      contendere plea by the Executive with respect thereto.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer
(while the Executive does not serve as such) or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than 75% of the
entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i),
(ii) or (iii) above, and specifying the particulars thereof in detail.

                                       -3-
<PAGE>

                  (c) Good Reason. The Executive's employment may be terminated
by the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean in the absence of a written consent of the Executive:

                        (i) the assignment to the Executive of any duties
      inconsistent with the Executive's title and position (including status,
      offices and reporting requirements), authority, duties or responsibilities
      as contemplated by Section 2(a)(i) of this Agreement, or any other action
      by the Company which results in a diminution in such position, authority,
      duties or responsibilities, excluding for this purpose an isolated,
      insubstantial and inadvertent action not taken in bad faith and which is
      remedied by the Company promptly after receipt of notice thereof given by
      the Executive; provided that it is specifically understood that within six
      months of a Change in Control the Company shall have the flexibility to
      appoint the Executive to a reporting relationship different from that
      which existed prior to the Change in Control, to make an immaterial change
      in Executive's duties, or to change the Executive's title provided that
      Executive shall not have a stature less than that of a Divisional
      President, and it is understood that equivalent positions may have
      different titles;

                        (ii) any failure by the Company to comply with any of
      the provisions of Section 2(b) of this Agreement or the failure by the
      Company to increase such base salary each year after a Change in Control
      by an amount which at least equals on a percentage basis, the mean average
      percentage increase in base salary for all employees similarly situated
      during the two (2) full calendar years immediately preceding a Change in
      Control, other than an isolated, insubstantial and inadvertent failure not
      occurring in bad faith and which is remedied by the Company promptly after
      receipt of notice thereof given by the Executive;

                        (iii) the failure of the Company upon a Change in
      Control to (A) continue in effect any employee benefit plan, compensation
      plan, welfare benefit plan or material fringe benefit plan in which
      Executive is participating immediately prior to such Change in Control or
      the taking of any action by the Company which would adversely affect
      Executive's participation in or reduce Executive's benefits under any such
      plan, unless Executive is permitted to participate in other plans
      providing Executive with substantially equivalent benefits, or (B) provide
      Executive with paid vacation in accordance with the most favorable past
      practice of the Company as in effect for Executive immediately prior to
      such Change in Control;

                        (iv) any purported termination by the Company of the
      Executive's employment otherwise than as expressly permitted by this
      Agreement for Cause, death or Disability;

                        (v) any failure by the Company to comply with and
      satisfy Section 10(c) of this Agreement;

                                       -4-
<PAGE>

                        (vi) any requirement that the Executive (A) be based
      anywhere more than fifty (50) miles from the office where the Executive is
      currently located or (B) travel on Company business to an extent
      substantially greater than the Executive's current travel obligations; or

                        (vii) any failure of the Executive to be elected to, or
      to remain a member of, the Company's Board of Directors; provided,
      however, that after a Change in Control, failure of the Executive to be
      nominated to the Board of Directors of a successor that is a publicly
      traded company shall not constitute Good Reason.

                  (d) Notice of Termination. Any termination by the Company or
by the Executive shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 11(b) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.

                  (e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company other than for
Disability, the date of receipt of the Notice of Termination or any later date
specified therein within 30 days of such notice, (ii) if the Executive's
employment is terminated by reason of death or Disability, the date of death of
the Executive or the Disability Effective Date, as the case may be, and (iii) if
the Executive's employment is terminated by the Executive, thirty days after the
giving of such notice by the Executive provided that the Company may elect to
place the Executive on paid leave for all or any part of such 30-day period.

                  (f) Change in Control. "Change in Control" means the
consummation of a transaction, whether in a single transaction or in a series of
related transactions that are consummated contemporaneously (or consummated
pursuant to contemporaneous agreements), with any other party or parties on an
arm's-length basis, pursuant to which (a) such party or parties, directly or
indirectly, acquire (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) more than
50% of the voting stock of the Company, (b) such party or parties, directly or
indirectly, acquire assets constituting all or substantially all of the assets
of the Company and its subsidiaries on a consolidated basis, or (c) prior to an
initial public offering of the Company Common Stock pursuant to an offering
registered under the 1933 Act, Vestar Capital Partners IV, L.P. a Delaware
limited partnership and its affiliates cease

                                       -5-
<PAGE>

to have the ability to elect, directly or indirectly, a majority of the Board of
Directors of the Company.

            4. Obligations of the Company upon Termination.

                  (a) Death or Disability. If, during the Employment Period, the
Executive's employment shall terminate on account of death or Disability:

                        (i) the Company shall pay to the Executive or his estate
      or beneficiaries in a lump sum in cash within 30 days after the Date of
      Termination the sum of (x) the Executive's Annual Base Salary through the
      Date of Termination to the extent not theretofore paid, and (y) the
      product of (1) the Target Bonus and (2) a fraction, the numerator of which
      is the number of whole and partial months in the fiscal year in which the
      Date of Termination occurs through the Date of Termination and the
      denominator of which is 12, to the extent not theretofore paid (the sum of
      the amounts described in clauses (x) and (y) shall be hereinafter referred
      to as the "Accrued Obligations");

                        (ii) to the extent not theretofore paid or provided, the
      Company shall timely pay or provide to the Executive or his estate or
      beneficiaries any other amounts or benefits required to be paid or
      provided or which the Executive is eligible to receive under any plan,
      program, policy or practice of or contract or agreement with the Company
      and its affiliated companies through the Date of Termination (such other
      amounts and benefits shall be hereinafter referred to as the "Other
      Benefits"); and

                        (iii) the Company shall pay to the Executive or his
      estate or beneficiaries in a lump sum in cash within 30 days after the
      Date of Termination an amount equal to the product of (x) three (3) and
      (y) the sum of the Executive's current Annual Base Salary and Target
      Bonus.

                  (b) By the Company for Cause; By the Executive Other than for
Good Reason. If the Executive's employment is terminated for Cause or the
Executive terminates his employment without Good Reason during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (i) his Annual Base
Salary through the Date of Termination to the extent theretofore unpaid and (ii)
the Other Benefits.

                  (c) By the Company Other than for Cause, Death or Disability;
By the Executive for Good Reason. If, during the Employment Period, the
Executive's employment is terminated by the Executive for Good Reason or by the
Company other than for Cause and other than on account of death or Disability:

                        (i) the Company shall pay to the Executive in a lump sum
      in cash within 30 days after the Date of Termination the sum of:

                                       -6-
<PAGE>

                              (A) the Accrued Obligations; and

                              (B) the amount equal to the product of (x) three
            (3) and (y) the sum of the Executive's current Annual Base Salary
            and Target Bonus;

                        (ii) the Company shall provide the Executive with the
      Other Benefits; and

                        (iii) for a period of three (3) years following
      Executive's Date of Termination the Company shall continue to provide
      medical, dental and life insurance benefits to the Executive, his spouse
      and children under age 25 on the same basis, including without limitation
      employee contributions, as such benefits are then currently provided to
      the Executive ("Welfare Benefits"); provided that the provision of such
      Welfare Benefits shall cease in the event Executive becomes eligible to
      receive comparable benefits from another employer (either because he
      becomes employed by, or becomes an independent contractor with respect to
      such employer).

            5. Noncompetition and Nonsolicitation. Executive acknowledges that
in the course of his employment with the Company he will become familiar with
the Company's and its subsidiaries' trade secrets and other confidential
information concerning the Company and such subsidiaries and that his services
will be of special, unique and extraordinary value to the Company and its
subsidiaries. Therefore, Executive agrees that:

                  (a) Noncompetition. During the period commencing on the
Effective Date and ending on the second anniversary of the date Executive's
employment with the Company terminates (such period the "Restricted Period"),
Executive shall not, for himself or on behalf of any other person, firm,
partnership, corporation, or other entity, engage, directly or indirectly, as an
executive, agent, representative, consultant, partner, shareholder or holder of
any other financial interest, in any business that competes with the Company in
the business of the production, distribution or sales of eggs or egg products (a
"Competing Business"), it being understood and agreed that Executive shall not
be in violation of this restriction where Executive is employed by a person,
firm, partnership, corporation, or other entity engaged in a variety of
activities, including the Competing Business, so long as Executive is not
engaged in or responsible for the Competing Business of such entity. Nothing
herein shall prohibit Executive from being a passive owner of not more than 2%
of the outstanding publicly traded stock of any class of a Competing Business so
long as Executive has no active participation in the business of such entity,
except to the extent permitted above. Executive acknowledges that this
Agreement, and specifically, this Section 5, does not preclude Executive from
earning a livelihood, nor does it unreasonably impose limitations on Executive's
ability to earn a living. In addition, Executive agrees and acknowledges that
the potential harm to the Company of its non-enforcement outweighs any harm to
Executive of its enforcement by injunction or otherwise.

                                       -7-
<PAGE>

                  (b) Nonsolicitation. During the Restricted Period, Executive
shall not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Company or its subsidiaries to leave the employ of
the Company or its subsidiaries, or in any way interfere with the relationship
between the Company or any of its subsidiaries and any employee thereof, (ii)
knowingly hire any person who was an employee of the Company or any of its
subsidiaries within 180 days prior to the time such employee was hired by
Executive, (iii) induce or attempt to induce any customer, supplier, licensee or
other business relation of the Company or any of its subsidiaries to cease doing
business with the Company or its subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary or (iv) directly or indirectly acquire or
attempt to acquire an interest in any business relating to the business of the
Company or any of its subsidiaries and with which the Company or any of its
subsidiaries has entertained discussions or has requested and received
information relating to the acquisition of such business by the Company or its
subsidiaries in the one-year period immediately preceding Executive's
termination of employment with the Company.

                  (c) Enforcement. The parties to this Agreement hereby agree
and stipulate that (i) the restrictions contained in this Agreement are
reasonable and necessary in order to protect the Company's and its subsidiaries'
legitimate business interests and (ii) in the event of any breach or violation
of this Agreement or of any provision hereof by Executive, the Company and its
subsidiaries will have no adequate remedy at law and will suffer irreparable
loss and damage thereby. The parties hereby further agree and stipulate that in
the event of any such breach or violation, either threatened or actual, the
Company's and its subsidiaries' rights shall include, in addition to any and all
other rights available to the Company and its subsidiaries at law or in equity,
the right to seek and obtain any and all injunctive relief or restraining orders
available to it in courts of proper jurisdiction, so as to prohibit, bar, and
restrain any and all such breaches or violations by Executive. The prevailing
party to any legal action, arbitration or other proceeding commenced in
connection with enforcing any provision of this Section 5, including without
limitation, obtaining the injunctive relief provided by this Section 5 shall be
entitled to recover all court costs, reasonable attorneys' fees, and related
expenses incurred by such party. Executive further agrees that no bond need be
filed in connection with any request by the Company and its subsidiaries for a
temporary restraining order or for temporary or preliminary injunctive relief.

                  (d) Additional Acknowledgments. Executive acknowledges that
the provisions of this Section 5 are in consideration of: (i) employment with
the Company, (ii) the issuance by M-Foods Investors, LLC, a Delaware corporation
and affiliate of the Company ("Investors"), to Executive of Investors' Class B
Units (the "Class B Units") and Investors' Class C Units pursuant to the terms
of that certain Management Stock Purchase and Unit Subscription Agreement, dated
as of the date hereof, by and between Investors and Executive (the "Management
Stock Purchase and Unit Subscription Agreement"), and (iii) additional good and
valuable consideration as set forth in this Agreement. In addition, Executive
acknowledges (i) that the business of the Company and its subsidiaries is
national in scope and without geographical limitation and (ii) notwithstanding
the state of incorporation or principal office of the Company or any of its
subsidiaries, or any of their respective executives or employees (including the
Executive), it is

                                       -8-
<PAGE>

expected that the Company will have business activities and have valuable
business relationships within its industry throughout the United States.
Executive acknowledges that he has carefully read this Agreement and has given
careful consideration to the restraints imposed upon Executive by this
Agreement, and is in full accord as to their necessity for the reasonable and
proper protection of confidential and proprietary information of the Company and
its subsidiaries now existing or to be developed in the future. Executive
expressly acknowledges and agrees that each and every restraint imposed by this
Agreement is reasonable with respect to subject matter, time period and
geographical area.

            6. Deferral of Certain Compensation. In connection with the
Executive'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 Executive and the Company, the Company
shall (a) pay to Executive an amount equal to $602,659 (the "Cancellation
Payment") and (b) rollover an amount equal to $4,032,000 (the "Deferred Amount")
to an unfunded, unsecured nonqualified deferred compensation arrangement
established for this purpose (the "Deferred Account"). Each of the Executive,
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 Executive 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) 40,320 Class A Units of Investors (the "Investors A
Units") and (B) 40,320 Class A Units (the "Dairy A Units") of M-Foods Dairy
Holdings, LLC, a Delaware limited liability company ("Dairy Holdings"). Holdings
shall credit Executive'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
Executive's Deferred Account shall be subject to the claims of the creditors of
Holdings.

      With respect to the Investors A Units, Holdings shall credit Executive'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 Executive's
Deferred Account in an amount equal to the fair market value of such property,
as determined by the Management Committee of Investors. Executive'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 Executive's Deferred Account with an
amount equal to the result of (x) the percentage of outstanding Investors A
Units

                                       -9-
<PAGE>

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 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 Executive's 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 Executive'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
Executive's Deferred Account in an amount equal to the fair market value of such
property, as determined by the Management Committee of Dairy Holdings.
Executive'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 Executive'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 Executive (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.

      Executive 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,

                                      -10-
<PAGE>

Executive shall receive a total distribution of the amount then deemed held in
the Deferred Account; (ii) upon the tenth anniversary of the date hereof,
Executive shall receive a total distribution of the amount then deemed held in
the Deferred Account; (iii) upon the purchase by Investors of any of Executive's
Class B Units pursuant to Section 7.2 of the Executive's Management Stock
Purchase and Unit Subscription Agreement, Executive shall receive a distribution
from the Deferred Account equal to the result of (x) the percentage of
Executive'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 Executive'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 Executive's Class B Units pursuant to Section 7.2 of the Executive's
Dairy Unit Subscription Agreement, Executive shall receive a distribution from
the Deferred Account equal to the result of (x) the percentage of Executive'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 Executive'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 Executive'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 Executive 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.

            7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall

                                      -11-
<PAGE>

anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice, program, contract or agreement except as explicitly
modified by this Agreement; provided that the Executive shall not be eligible
for severance benefits under any other program or policy of the Company.

            8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) pursued or defended against in
good faith by the Executive regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.

            9. Certain Additional Payments by the Company.

      Notwithstanding anything in this Agreement to the contrary, this Section 9
shall be limited in its application solely to the change in ownership that will
occur as a result of the consummation of the transactions set forth in that
certain Agreement and Plan of Merger, dated December 21, 2000, by and among the
Company, Holdings, and Protein Acquisition Corp:

                  (a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an

                                      -12-
<PAGE>

amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. For purposes of this Agreement, the term "Reduced Amount" shall mean
the greatest amount that could be paid to the Executive such that the receipt of
Payments would not give rise to any Excise Tax. Notwithstanding the foregoing
provisions of this Section 9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not exceed 120% of the
Reduced Amount, then no Gross-Up Payment shall be made to the Executive and the
Payments, in the aggregate, shall be reduced to the Reduced Amount.

                  (b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company's independent auditors or such other certified public accounting
firm reasonably acceptable to the Executive as may be designated by the Company
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 9, shall be paid by the Company to the Executive not later than the
due date for the payment of any Excise Tax. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                  (c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

                        (i) give the Company any information reasonably
      requested by the Company relating to such claim,

                        (ii) take such action in connection with contesting such
      claim as the Company shall reasonably request in writing from time to
      time, including, without

                                      -13-
<PAGE>

      limitation, accepting legal representation with respect to such claim by
      an attorney reasonably selected by the Company,

                        (iii) cooperate with the Company in good faith in order
      to effectively contest such claim, and

                        (iv) permit the Company to participate in any
      proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                  (d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

                                      -14-
<PAGE>

            10. Successors.

                  (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

                  (b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

                  (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.

            11. Miscellaneous.

                  (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

                  (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

                  If to the Executive:

                  Gregg A. Ostrander
                  21520 Fairview Street
                  Greenwood, Minnesota 55331

                                      -15-
<PAGE>

                  If to the Company:

                  Michael Foods, Inc.
                  324 Park National Bank Building
                  5353 Wayzata Boulevard
                  Minneapolis, Minnesota 55416
                  Telecopy Number: (612) 546-3711
                  Attention:  Secretary

                  with a copy to:

                  Vestar Capital Partners IV, L.P.
                  245 Park Avenue
                  41st Floor
                  New York, NY 10167
                  Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                  (c) Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement 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 will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

                  (d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

                  (e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including; without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 3(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

                  (f) From and after the Effective Date this Agreement shall
supersede any other employment agreement between the parties with respect to the
subject matter hereof.

                                      -16-
<PAGE>

                  (g) Subject to the provisions of Section 3(d), there shall be
no limitation on the ability of the Company to terminate the Executive at any
time with or without Cause.

                                * * * * * * * * *

                                      -17-
<PAGE>

            IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.

                                          _____________________________
                                          Gregg A. Ostrander

                                          MICHAEL FOODS, INC.

                                          By:___________________________

                                          Title:________________________

                                          M-FOODS HOLDINGS, INC.

                                          By:___________________________

                                          Title:________________________

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