Document:

<PAGE>   1
                                                                    EXHIBIT 10.5

                           PREMIUM STANDARD FARMS INC.

                        SPECIAL EXECUTIVE RETIREMENT PLAN

                            EFFECTIVE JANUARY 1, 2000
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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                        <C>
ARTICLE I - DEFINITIONS......................................................................1

   1.01   ACTUARIAL EQUIVALENT...............................................................1

   1.02   ACTUARIAL VALUE....................................................................1

   1.03   BENEFICIARY........................................................................1

   1.04   BOARD..............................................................................1

   1.05   CHANGE IN CONTROL..................................................................1

   1.06   BOARD..............................................................................1

   1.07   CLAIMANT...........................................................................2

   1.08   CODE...............................................................................2

   1.09   COMMITTEE..........................................................................2

   1.10   COMPANY............................................................................2

   1.11   EARLY RETIREMENT AGE...............................................................2

   1.12   EMPLOYER(S)........................................................................2

   1.13   ERISA..............................................................................3

   1.14   FINAL AVERAGE EARNINGS.............................................................3

   1.15   NORMAL RETIREMENT AGE..............................................................3

   1.16   PARTICIPANT........................................................................3

   1.17   PLAN...............................................................................3

   1.18   PRIMARY BENEFIT....................................................................3

   1.19   RETIREMENT PLAN OFFSET AMOUNT......................................................3

   1.20   SERP BENEFIT.......................................................................3

   1.21   SOCIAL SECURITY OFFSET AMOUNT......................................................3

   SOCIAL SECURITY OFFSET AMOUNT.............................................................3

   1.22   YEARS OF BENEFIT SERVICE...........................................................4

   1.23   YEARS OF VESTING SERVICE...........................................................4

ARTICLE II - ELIGIBILITY.....................................................................4

   2.01   SELECTION BY COMMITTEE.............................................................4

ARTICLE III - VESTING........................................................................4

   3.01   VESTING IN BENEFITS................................................................4

   3.02   CHANGE IN CONTROL..................................................................4
</TABLE>

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<TABLE>
<S>                                                                                         <C>
ARTICLE IV - BENEFITS........................................................................4

   4.01   NORMAL RETIREMENT..................................................................4

   4.02   EARLY RETIREMENT...................................................................4

   4.03   FORM OF BENEFITS...................................................................5

   4.04   COMMITTEE DISCRETION...............................................................5

   4.05   WITHHOLDING AND PAYROLL TAXES......................................................5

   4.06   BENEFITS ON DEATH..................................................................5

   4.07   COMMENCEMENT OF BENEFITS...........................................................6

ARTICLE V - TERMINATION AND AMENDMENT........................................................6

   5.01   TERMINATION........................................................................6

   5.02   AMENDMENT..........................................................................6

ARTICLE VI - OTHER BENEFITS AND AGREEMENT....................................................7

   6.01   COORDINATION WITH OTHER BENEFITS...................................................7

ARTICLE VII - ADMINISTRATION OF THE PLAN.....................................................7

   7.01   COMMITTEE DUTIES...................................................................7

   7.02   AGENTS.............................................................................7

   7.03   BINDING EFFECT OF DECISIONS........................................................7

   7.04   INDEMNITY OF COMMITTEE.............................................................7

   7.05   EMPLOYER INFORMATION...............................................................7

ARTICLE VIII - CLAIMS PROCEDURES.............................................................7

   8.01   PRESENTATION OF CLAIM..............................................................7

   8.02   NOTIFICATION OF DECISION...........................................................8

   8.03   REVIEW OF A DENIED CLAIM...........................................................8

   8.04   DECISION ON REVIEW.................................................................8

   8.05   LEGAL ACTION.......................................................................9

ARTICLE IX - MISCELLANEOUS...................................................................9

   9.01   UNSECURED GENERAL CREDITOR.........................................................9

   9.02   EMPLOYER'S LIABILITY...............................................................9

   9.03   NONASSIGNABILITY...................................................................9

   9.04   NOT A CONTRACT OF EMPLOYMENT.......................................................9

   9.05   FURNISHING INFORMATION.............................................................9
</TABLE>

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<TABLE>
<S>                                                                                         <C>
   9.06   TERMS..............................................................................9

   9.07   CAPTIONS...........................................................................10

   9.08   GOVERNING LAW......................................................................10

   9.09   VALIDITY...........................................................................10

   9.10   NOTICE.............................................................................10

   9.11   SUCCESSORS.........................................................................10

   9.12   SPOUSE'S INTEREST..................................................................10

   9.13   INCOMPETENT........................................................................10

   9.14   COURT ORDER........................................................................10

   9.15   DISTRIBUTION IN THE EVENT OF TAXATION..............................................11
</TABLE>

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<PAGE>   5
                           PREMIUM STANDARD FARMS INC.
                        SPECIAL EXECUTIVE RETIREMENT PLAN

                            EFFECTIVE JANUARY 1, 2000

                                     PURPOSE

        The purpose of this Plan is to provide specified benefits to a select
group of management and highly compensated employees of Premium Standard Farms
Inc., a Delaware corporation, and its subsidiaries, if any, that sponsor this
Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I
of ERISA.

                             ARTICLE I - DEFINITIONS

        1.01 "Actuarial Equivalent" shall mean a benefit of equivalent value, as
calculated by an actuary selected by the Company, computed on the basis of the
following actuarial assumptions:

             Interest: the annual interest rate on 30-year Treasury securities
             as specified by the Secretary of the Treasury or his delegate for
             the month preceding the month in which the Participant's
             distribution commences.

             Mortality: the 1983 Group Annuity Mortality Table using a blend of
             50% of the male table and 50% of the female table.

        1.02 "Actuarial Value" shall mean the lump sum cash value, as calculated
by an actuary selected by the Company, computed on the basis of the following
actuarial assumptions:

             Interest: the annual interest rate on 30-year Treasury securities
             as specified by the Secretary of the Treasury or his delegate for
             the month preceding the month in which the Participant's
             distribution commences.

             Mortality: the 1983 Group Annuity Mortality Table using a blend of
             50% of the male table and 50% of the female table.

        1.03 "Beneficiary" shall mean the surviving spouse of a deceased
Participant.

        1.04 "Board" shall mean the board of directors of the Company.

        1.05 "Change in Control" shall mean the first to occur of any of the
following events, unless such event shall have received prior approval of a
majority vote of the Continuing Directors, as defined below, indicating that
such event shall not constitute a Change in Control:

                (i) Any "person" (as that term is used in Section 13(d) and
        14(d) of the Securities Exchange Act of 1934) (other than the Company,
        any trustee or other fiduciary holding securities under an employee
        benefit plan of the Company or any corporation owned, directly or
        indirectly, by the stockholders of the Company in substantially the same
        proportions as their ownership of the stock of the Company), is or
        becomes the
<PAGE>   6
        "beneficial owner" (as defined in Rule 13(d)(3) under the Securities
        Exchange Act of 1934), directly or indirectly, of securities of the
        Company representing thirty percent (30%) or more of the combined voting
        power of the Company's then outstanding securities.

               (ii) During any period of two consecutive years (not including
        any period prior to the Effective Date of this Plan), individuals
        ("Existing Directors") who at the beginning of such period constitute
        the Board of Directors, and any new board member (an "Approved
        Director") (other than a board member designated by a person who has
        entered into an agreement with the Company to effect a transaction
        described in paragraph (i), (iii) or (iv) of this Section 1.05) whose
        election by the Board of Directors or nomination for election by the
        Company's shareholders was approved by a vote of at least two-thirds
        (2/3) of the board members then still in office who either were board
        members at the beginning of the period or whose election or nomination
        for election previously was so approved (Existing Directors together
        with Approved Directors constituting "Continuing Directors"), cease for
        any reason to constitute at least a majority of the Board of Directors;
        or

               (iii) The stockholders of the Company approve a merger or
        consolidation of the Company with any other person, other than (a) a
        merger or consolidation which would result in the voting securities of
        the Company outstanding immediately prior thereto continuing to
        represent (either by remaining outstanding or by being converted into
        voting securities for the surviving entity) more than fifty percent
        (50%) of the combined voting power of the voting securities of the
        Company or such surviving entity outstanding immediately after such
        merger or consolidation, or (b) a merger in which no "person" (as
        defined in Section 1.05(i)) acquires more than thirty percent (30%) of
        the combined voting power of the Company's then outstanding securities;
        or

               (iv) The stockholders of the Company approve a plan of complete
        liquidation of the Company or an agreement for the sale or disposition
        by the Company of all or substantially all of the Company's assets (or
        any transaction having a similar effect).

        1.06 "Board" shall mean the board of directors of the Company.

        1.07 "Claimant" shall have the meaning set forth in Section 8.1.

        1.08 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

        1.09 "Committee" shall mean the Compensation Committee of the Board.

        1.10 "Company" shall mean Premium Standard Farms Inc., a Delaware
corporation.

        1.11 "Early Retirement Age" shall mean age 55 with five years of Vesting
Service.

        1.12 "Employer(s)" shall mean the Company and any subsidiaries of the
Company that have been selected by the Board to participate in the Plan.

                                       2
<PAGE>   7
        1.13 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

        1.14 "Final Average Earnings" shall mean the average of the
Participant's final three full calendar years' base salary, including any
amounts deferred to a qualified or nonqualified retirement plan or contributed
by the Participant to a cafeteria plan.

        1.15 "Normal Retirement Age" shall mean age 62.

        1.16 "Participant" shall mean any employee who is selected to
participate in the Plan by the Board and listed on Exhibit A as amended hereto
from time to time. The Board shall have the sole and exclusive authority to
select and delete Participants and to determine each Participant's Primary
Benefit.

        1.17 "Plan" shall mean this Special Executive Retirement Plan.

        1.18 "Primary Benefit" shall mean a monthly benefit equal to 1/12th of:

                (i) the percentage of Final Average Earnings times Years of
        Benefit Service set forth opposite the Participant's name on Exhibit A.

        The Maximum Primary Benefit shall be a monthly benefit equal to 1/12th
of 66.7% of Final Average Earnings.

        1.19 "Retirement Plan Offset Amount" shall mean the increase in benefit
actually paid to or on behalf of a Participant because of such Participant's
service with an Employer under any defined benefit retirement plans of the
Company or ContiGroup Companies, Inc. or its affiliates, including the Actuarial
Equivalent of any benefit not paid as a monthly annuity. A Participant's
Retirement Plan Offset Amount shall include any distributions (other than
distributions of salary deferrals) previously made to the Participant.

        1.20 "SERP Benefit" shall mean the benefit payable to a Participant
determined under Section 4.01.

        1.21 "Social Security Offset Amount" shall mean one-half (1/2) of a
Participant's anticipated monthly social security benefit payable beginning at
the earliest age permitted (currently 62), multiplied by a fraction, the
numerator of which shall be the Participant's Years of Benefits Service and the
denominator of which is the Participant's years of service for purposes of
calculating his social security benefit, subject to the following rules:

               (i) If a Participant elects to commence benefits under this Plan
        prior to age 62, his Social Security Offset Amount shall be reduced by
        6% by each full year by which the date on which he commences benefits
        precedes the date on which he attains Normal Retirement Age.

               (ii) If a Participant elects to commence benefits under this Plan
        at any age in a lump sum, his Social Security Offset Amount shall be
        one-half (1/2) the Actuarial Value of his expected social security
        benefits, including any benefits previously paid assuming

                                       3
<PAGE>   8
        that his benefits commenced at the earliest age permitted (currently,
        age 62) and were not thereafter adjusted for cost of living adjustments.

               (iii) If a Participant elects to commence benefits under this
        Plan in an annuity form at or following the time he has commenced
        receipt of social security benefits, his Social Security Offset Amount
        shall be one-half (1/2) the actual monthly benefit received at that time
        and shall not be adjusted thereafter for cost of living adjustments or
        the subsequent death of the Participant.

                (iv) If a surviving spouse is entitled to a benefit pursuant to
        Section 4.06, the Social Security Offset Amount shall be computed as
        though the Participant was still living at age 62.

        1.22 "Years of Benefit Service" shall mean full years of employment with
the Company.

        1.23 "Years of Vesting Service" shall mean full years of employment with
the Company, excluding for this purpose years of employment prior to January 1,
2000.

ARTICLE II - ELIGIBILITY

        2.01 SELECTION BY COMMITTEE. Participation in the Plan shall be limited
to a select group of management and highly compensated employees of the
Employers. From that group, the Committee shall select, in its sole discretion,
employees to participate in the Plan.

ARTICLE III -  VESTING

        3.01 VESTING IN BENEFITS. Each Participant shall be 100% vested in his
SERP Benefit upon the completion of five (5) Years of Vesting Service.

        3.02 CHANGE IN CONTROL. Notwithstanding Section 3.01 or any other
provision in this Plan that could be interpreted to the contrary, in the event
of a Change in Control, a Participant's SERP Benefit shall immediately become
100% vested (if it is not already vested in accordance with Section 3.01 above).

                              ARTICLE IV - BENEFITS

        4.01 NORMAL RETIREMENT. A Participant who has completed five (5) Years
of Vesting Service and who has terminated employment with the Company shall be
entitled to receive a SERP Benefit at Normal Retirement Age. The SERP Benefit
payable to a Participant at Normal Retirement Age shall be an annuity for the
life of the Participant equal to his Primary Benefit minus the sum of (i) his
Retirement Plan Offset Amount and (ii) his Social Security Offset Amount.

        4.02 EARLY RETIREMENT. A Participant who attains Early Retirement Age
and who has terminated employment shall be entitled to retire and receive a
reduced SERP Benefit equal to his SERP Benefit reduced by one half of one
percent (.5%) for each month by which the date on which he commences benefits
precedes the date on which he attains his Normal Retirement Age.

                                       4
<PAGE>   9
        4.03 FORM OF BENEFITS. Payments of vested SERP Benefits shall be made in
the form and at the time elected by the Participant. The Participant shall make
an election as to the form and timing of payments no later than 60 days prior to
the end of the second calendar year preceding his retirement or other
termination of employment on forms and in accordance with procedures announced
from time to time by the Committee. Such election may be revoked or amended any
time prior to the last date for making an election according to the preceding
sentence. The forms of benefit available under the Plan shall be:

                (i) lump sum, which shall be the Actuarial Value of the SERP
        Benefit;

               (ii) joint and 50% survivor annuity, which shall be a monthly
        income payable for the lifetime of the Participant and continuing
        thereafter in an amount one-half as large to the Participant's surviving
        spouse for the lifetime of such spouse and shall be the Actuarial
        Equivalent of the SERP Benefit;

               (iii) joint and 100% survivor annuity, which shall be a monthly
        income payable for the lifetime of the Participant and continuing
        thereafter in an equal amount to the Participant's surviving spouse for
        the lifetime of such spouse and shall be the Actuarial Equivalent of the
        SERP Benefit; and

                (iv) an annuity for the life of the Participant only.

        If the Participant has elected a joint and survivor annuity and has no
        spouse at the time benefits become payable, the election shall be void
        and the benefits shall be paid as an annuity for the life of the
        Participant only. Should the spouse die after benefits have become
        payable, no survivor annuity shall be paid to any subsequent spouse of
        the Participant.

        4.04 COMMITTEE DISCRETION. The Committee, in its sole discretion and
consistent with its established procedures and rules, may consider other forms
of vested SERP Benefit payments, or the timing of vested SERP Benefit payments,
as it deems necessary and prudent under the circumstances.

        4.05 WITHHOLDING AND PAYROLL TAXES. The Employer, to the extent required
by applicable law, shall withhold from any and all benefits made under this
Article 4, all federal, state and local income, employment and other taxes
required to be withheld by the Employer in connection with the benefits
hereunder, in amounts to be determined in the sole discretion of the Employer.

        4.06 BENEFITS ON DEATH. If a Participant dies prior to commencing
benefits under this Plan and is married on the date of his death, a spousal
death benefit shall be payable under this Plan. The spousal death benefit under
this Plan shall be equal to an annuity based on 50% of the Participant's SERP
Benefit, commencing immediately but no earlier than the date that the
Participant would have attained age 55, and reduced by one-half of one percent
(.5%) for each month by which the date benefits commence precedes the date that
the Participant would have attained age 62. Any spousal death benefits payable
under this Plan shall be paid in the form of an annuity for the spouse's single
life. If a Participant has no surviving spouse, the benefits remaining under the
Plan shall be forfeited.

                                       5
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        4.07 COMMENCEMENT OF BENEFITS. Payment of a benefit to a Participant may
not begin earlier than the later of:

                (i) the Participant's Early Retirement Age, or

                (ii) The Participant's termination of employment.

                      ARTICLE V - TERMINATION AND AMENDMENT

        5.01 TERMINATION. The Company reserves the right to terminate the Plan
at any time by the action of the Board. The termination of the Plan shall not
adversely affect any Participant or his or her Beneficiary who has become
entitled to the payment of any benefits under the Plan as of the date of
termination, provided, however, that the Employer shall have the right to
accelerate payments by paying the Actuarial Value of such payments. For all
other Participants, upon the termination of the Plan, the Employer shall have
the right to pay the Actuarial Value of a Participant's vested SERP Benefit in a
lump sum.

        5.02 AMENDMENT. The Company may, at any time, amend or modify the Plan
in whole or in part by the action of its Board; provided, however, that no
amendment or modification shall be effective to decrease or restrict a
Participant's then vested SERP Benefit. The amendment or modification of the
Plan shall not affect any Participant or his or her Beneficiary who has become
entitled to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that the Employer shall have the
right to accelerate installment payments by paying the Actuarial Value of such
payments in a lump sum or the Actuarial Equivalent in some other accelerated
form of payment.

                                       6
<PAGE>   11
                    ARTICLE VI - OTHER BENEFITS AND AGREEMENT

        6.01 COORDINATION WITH OTHER BENEFITS. Except as provided herein and
except as otherwise expressly provided under any other plan or program for
employees of the Employers, the benefits provided under this Plan to a
Participant are in addition to the benefits available to such Participant under
any other such plan or program. The Plan shall supplement and shall not
supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided.

                    ARTICLE VII - ADMINISTRATION OF THE PLAN

        7.01 COMMITTEE DUTIES. This Plan shall be administered by the Committee,
or such committee or individual as the Board shall appoint. Members of the
Committee may be Participants under this Plan. The Committee shall also have the
discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this Plan and (ii)
decide or resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan.

        7.02 AGENTS. In the administration of this Plan, the Committee may
employ agents and delegate to them such administrative duties as it sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel who may be counsel to any Employer.

        7.03 BINDING EFFECT OF DECISIONS. The decision or action of the
Committee with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.

        7.04 INDEMNITY OF COMMITTEE. All Employers shall indemnify and hold
harmless the members of the Committee against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to this Plan, except in the case of willful misconduct by the Committee
or any of its members.

        7.05 EMPLOYER INFORMATION. To enable the Committee to perform its
functions, each Employer shall supply full and timely information to the
Committee on all matters relating to the compensation of its Participants, the
date and circumstances of the retirement, disability, death or termination of
employment of its Participants, and such other pertinent information as the
Committee may reasonably require.

                        ARTICLE VIII - CLAIMS PROCEDURES

        8.01 PRESENTATION OF CLAIM. Any Participant or Beneficiary (such
Participant or Beneficiary being referred to below as a "Claimant") may deliver
to the Committee a written claim for a determination with respect to the amounts
distributable to such Claimant from the Plan. If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within 60
days after such notice was received by the Claimant. The claim must state with
particularity the determination desired by the Claimant. All other claims must
be made

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<PAGE>   12
within 180 days of the date on which the event that caused the claim to arise
occurred. The claim must state with particularity the determination desired by
the Claimant.

        8.02 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim within 90 days (unless special circumstances require additional time), and
shall notify the Claimant in writing:

                (i) that the Claimant's requested determination has been made,
        and that the claim has been allowed in full; or

               (ii) that the Committee has reached a conclusion contrary, in
        whole or in part, to the Claimant's requested determination, and such
        notice must set forth in a manner calculated to be understood by the
        Claimant;

                        (1) the specific reason(s) for the denial of the claim,
                or any part of it;

                        (2) specific reference(s) to pertinent provisions of the
                Plan upon which such denial was based;

                        (3) a description of any additional material or
                information necessary for the Claimant to perfect the claim, and
                an explanation of why such material or information is necessary;
                and

                        (4) an explanation of the claim review procedure set
                forth in Section 8.03 below.

        8.03 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice
from the Committee that a claim has been denied, in whole or in part, a Claimant
(or the Claimant's duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim. Thereafter, but not
later than 30 days after the review procedure began, the Claimant (or the
Claimant's duly authorized representative):

                (i) may review pertinent documents;

                (ii) may submit written comments or other documents; and/or

                (iii) may request a hearing, which the Committee, in its sole
        discretion, may grant.

        8.04 DECISION ON REVIEW. The Committee shall render its decision on
review promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other special
circumstances require additional time, in which case the Committee's decision
must be rendered within 120 days after such date. Such decision must be written
in a manner calculated to be understood by the Claimant, and it must contain:

                (i) specific reasons for the decision;

                                       8
<PAGE>   13
                (ii) specific reference(s) to the pertinent Plan provisions upon
        which the decision was based; and

                (iii) such other matters as the Committee deems relevant.

        8.05 LEGAL ACTION. A Claimant's compliance with the foregoing provisions
of this Article 8 is a mandatory prerequisite to a Claimant's right to commence
any legal action with respect to any claim for benefits under this Plan.

                           ARTICLE IX - MISCELLANEOUS

        9.01 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries
successors and assigns shall have no legal or equitable rights, interests or
claims in any property or assets of an Employer. Any and all of an Employer's
assets shall be, and remain, the general, unpledged, unrestricted assets of the
Employer. An Employer's obligation under the Plan shall be merely that of an
unfunded and unsecured promise to pay money in the future.

        9.02 EMPLOYER'S LIABILITY. An Employer's liability for the payment of
benefits shall be defined only by the Plan. An Employer shall have no obligation
to a Participant under the Plan except as expressly provided in the Plan.

        9.03 NONASSIGNABILITY. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt, the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be, unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.

        9.04 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any Employer
and the Participant. Such employment is hereby acknowledged to be an "at will"
employment relationship that can be terminated at any time for any reason, with
or without cause, unless expressly provided in a written employment agreement.
Nothing in this Plan shall be deemed to give a Participant the right to be
retained in the service of any Employer or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.

        9.05 FURNISHING INFORMATION. A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested in
order to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Committee may deem necessary.

        9.06 TERMS. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases where they
would so apply; and wherever any words are used herein in the singular or in the
plural, they shall be construed as

                                       9
<PAGE>   14
though they were used in the plural or the singular, as the case may be, in all
cases where they would so apply.

        9.07 CAPTIONS. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.

        9.08 GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall
be construed and interpreted according to the internal laws of the State of
Missouri without regard to its conflict of laws principles.

        9.09 VALIDITY. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts thereof, but this Plan shall be construed and enforced as if
such illegal and invalid provision had never been inserted herein.

        9.10 NOTICE. Any notice or filing required or permitted to be given to
the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

        Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.

        Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the participant.

        9.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns and the
Participant and the Participant's Beneficiary.

        9.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse's will, nor shall such interest
pass under the laws of intestate succession.

        9.13 INCOMPETENT. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person's property,
the Committee may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person. The Committee may require proof of minority, incompetency,
incapacity or guardianship, as it may deem appropriate prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the
Participant and the Participant's Beneficiary, as the case may be, and shall be
a complete discharge of any liability under the Plan for such payment amount.

        9.14 COURT ORDER. The Committee is authorized to make any payments
directed by court order in any action in which the Plan or Committee has been
named as a party.

                                       10
<PAGE>   15
        9.15 DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason, all or
any portion of a Participant's benefit under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Committee for a
distribution of that portion of his or her benefit that has become taxable. Upon
the approval of such a petition a Participant's Employer shall distribute to the
Participant immediately available funds in an amount equal to the taxable
portion of his or her benefit (which amount shall not exceed a Participant's
unpaid vested benefit under the Plan). If the petition is approved, the tax
liability distribution shall be made within 90 days of the date when the
Participant's petition is approved. Such a distribution shall affect and reduce
the benefits to be paid under this Plan.

        IN WITNESS WHEREOF, Premium Standard Farms Inc. has signed this Plan
document as of January 1, 2001.
                                            "COMPANY'

                                            PREMIUM STANDARD FARMS INC.

                                            By: /s/
                                                --------------------------------
                                            Title:
                                                   -----------------------------

                                       11
<PAGE>   16
                                                                       Exhibit A

                          PREMIUM STANDARD FARMS, INC.

                                SERP PARTICIPANTS

<TABLE>
<CAPTION>
       Name                                Position                       Percent
       ----                                --------                       -------
<S>                             <C>                                       <C>
John Meyer                      CEO                                          4%
Robert Manly                    President                                    4%
Stephen Lightstone              CFO                                          4%
Michael Townsley                Sr. VP Sales and Marketing                   2%
David James                     VP MO & NC Farm Operations                   2%
Don Killingsworth               VP Industrial Procurement                    2%
Dennis Rippe                    VP Controller, Corp. Asst. Secretary         2%
Daniel Harris                   VP Information Technology                    2%
David Klein                     VP Human Resources                           2%
Calvin Held                     VP Milan Plant Processing Operations         2%
David Townsend                  VP Environmental Affairs                     2%
Charles Arnot                   VP Communications and Public Affairs         2%
Collette Schultz-Kaster         VP Food Safety and Technical Services        2%
Jere Null                       VP Lundy Plant Processing Operations         2%
</TABLE><PAGE>   1
                                                                 Exhibit 10.6(a)

                             PREMIUM STANDARD FARMS

                           DEFERRED COMPENSATION PLAN

<PAGE>   2
                                TABLE OF CONTENTS

SECTION 1.  ESTABLISHMENT................................................    1

SECTION 2.  DEFINITIONS..................................................    1

SECTION 3.  ELIGIBILITY FOR PARTICIPATION................................    3

SECTION 4.  DEFERRAL OF LTIP COMPENSATION................................    4

SECTION 5.  ELECTIONS OF TIMING AND FORM OF PAYMENT......................    4

SECTION 6.  INVESTMENT OF DEFERRAL AND VESTING ACCOUNTS..................    8

SECTION 7.  DESIGNATION OF BENEFICIARIES.................................    9

SECTION 8.  MERGER, CONSOLIDATION AND SALE OF ASSETS......................   9

SECTION 9.  RIGHTS OF PARTICIPANTS.......................................   10

SECTION 10. ADMINISTRATION..............................................    10

SECTION 11. CLAIMS AND APPEALS..........................................    10

SECTION 12. AMENDMENTS AND TERMINATION..................................    11

SECTION 13. APPLICABLE LAWS.............................................    12

SECTION 14. INCOMPETENCY................................................    12

SECTION 15. EXPENSES....................................................    12

SECTION 16. NOTICES.....................................................    12

SECTION 17.  WITHHOLDING AND DEDUCTIONS..................................   12

SECTION 18.  INVALIDITY OF PROVISIONS....................................   13

SECTION 19.  TAX ADVANTAGES NOT GUARANTEED...............................   13

SECTION 20.  RETURN OF COMPANY CONTRIBUTIONS.............................   13

<PAGE>   3
                             PREMIUM STANDARD FARMS
                           DEFERRED COMPENSATION PLAN

                            SECTION 1. ESTABLISHMENT

         PREMIUM STANDARD FARMS hereby establishes, effective as of January 1,
2001, a deferred compensation and retirement plan for executives as described
herein, which shall be known as the "PREMIUM STANDARD FARMS DEFERRED
COMPENSATION PLAN" (hereinafter called the "Plan"). The Plan is intended to
constitute an unfunded plan maintained primarily to provide deferred
compensation to a select group or management or highly compensated employees.

                             SECTION 2. DEFINITIONS

         2.1 DEFINITIONS. Whenever used herein, the following terms shall have
the meanings set forth below:

         (a)      The term "BOARD" means the Board of Directors of the Company.

         (b)      The term "BENEFICIARY" means the persons or entities
                  designated pursuant to Section 7 who are to receive, upon a
                  Participant's death, payment of the amounts credited to the
                  Participant's Deferral Account as of the date of his death.

         (c)      The term "CHANGE OF CONTROL" occurs where:

                  (1)      any "person" (as that term is used in Sections 13(d)
                           and 14(d) of the Securities Exchange Act of 1934)
                           other than: (i) the Company, (ii) any trustee or
                           other fiduciary holding securities under an employee
                           benefit plan of the Company, or (iii) any corporation
                           owned, directly or indirectly, by the stockholders of
                           the Company in substantially the same proportions as
                           their ownership of stock of the Company, is or
                           becomes the "beneficial owner" (as defined in
                           Securities Exchange Commission Rule 13(d)(3)),
                           directly or indirectly, of securities of the Company
                           representing thirty percent (30%) or more of the
                           combined voting power of the Company's then
                           outstanding securities; or

                  (2)      during any period of two consecutive years (not
                           including any period prior to the Effective Date of
                           this Plan), individuals who at the beginning of such
                           period constitute the Board of Directors ("existing
                           directors"), and any new board member ("approved
                           director") (other than a board member designated by a
                           person who has entered into an agreement with the
                           Company to effect a transaction described in
                           subsection (1), (2) or (3) of this subsection (c)
                           whose election by the Board of Directors or
                           nomination for election by the Company's shareholders
                           was approved by a vote of at least two-thirds (2/3)
                           of the board

                                       1
<PAGE>   4
                           members then still in office who either were board
                           members at the beginning of the period or whose
                           election or nomination for election previously was so
                           approved (existing directors together with approved
                           directors constituting "continuing directors"), cease
                           for any reason to constitute at least a majority of
                           the Board of Directors; or

                  (3)      the stockholders of the Company approve a merger or
                           consolidation of the Company with any other person,
                           other than (i) a merger or consolidation which would
                           result in the voting securities of the Company
                           outstanding immediately prior thereto continuing to
                           represent (either by remaining outstanding or by
                           being converted into voting securities for the
                           surviving entity) more than fifty percent (50%) of
                           the combined voting power of the voting securities of
                           the Company or such surviving entity outstanding
                           immediately after such merger or consolidation, or
                           (ii) a merger in which no "person" (as defined in
                           subsection (1)) acquires more than thirty percent
                           (30% of the combined voting power of the Company's
                           then outstanding securities.

                  (4)      The stockholders of the Company approve a plan of
                           complete liquidation of the Company or an agreement
                           for the sale or disposition by the Company of all or
                           substantially all of the Company's assets (or any
                           transaction having a similar effect).

         (d)      The term "COMMITTEE" means the Compensation Committee of, and
                  appointed by, the Board.

         (e)      The term "COMPANY" means PREMIUM STANDARD FARMS Inc., a
                  Delaware corporation, and any successor thereto that agrees to
                  assume the liabilities associated with this Plan, as described
                  in Section 8.

         (f)      The term "DEFERRAL ACCOUNT" means the account maintained by
                  the Trustee under the Trust, on behalf of a Participant, to
                  which the Company deposits and the Trustee credits at the
                  direction of the Company the LTIP Compensation the Participant
                  elects to defer pursuant to his LTIP Compensation Deferral
                  Election. Although this Plan may refer to a Deferral Account
                  as "the Participant's Deferral Account" or as "his Deferral
                  Account," the amounts credited to such Deferral Account shall
                  at all times be subject to the terms and conditions of the
                  agreement and declaration establishing the Trust, and thus
                  subject to the claims of the Company's general creditors.

         (g)      The term "EXECUTIVE" means an employee of the Company who is:

                  (1)      in a select group of management or highly paid
                           employees;

                                       2
<PAGE>   5
                  (2)      exempt from the minimum wage and maximum hour
                           requirements of the Fair Labor Standards Act, as
                           described in 29 U.S.C. Section 213(a) and regulations
                           promulgated thereunder; and

                  (3)      a "highly compensated employee" within the meaning of
                           Internal Revenue Code Section 414(q). With respect to
                           a newly hired employee, if the employee's annualized
                           projected Compensation for his first calendar year of
                           employment exceed the limit described in Section
                           414(q)(1)(B)(i), he shall be considered a "highly
                           compensated employee" for such first calendar year of
                           employment, for purposes of this Plan.

         (h)      The term "LTIP COMPENSATION" with respect to an active
                  Participant or eligible Executive means the active
                  Participant's or eligible Executive's Long Term Incentive Plan
                  compensation, as determined by Company, for the period to
                  which his relevant LTIP Compensation Deferral Election
                  relates.

         (i)      The term "LTIP COMPENSATION DEFERRAL ELECTION" means the
                  election made by an active Participant or eligible Executive,
                  pursuant to Section 4.1 to defer receipt of all or a portion
                  of his LTIP Compensation which becomes fixed and determined
                  (after the date of the Deferral Election) and payable to him
                  in the calendar year to which the election relates.

         (j)      The term "PARTICIPANT" means a person who has amounts
                  currently deposited and credited to a Deferral Account,
                  maintained by the Trustee on his behalf pursuant to the terms
                  of the Plan. An active Participant is a Participant who is
                  actively employed by the Company as an Executive and who is
                  actively participating in the Plan.

         (k)      The term "TRUST" means, with regard to LTIP Compensation
                  deposited by the Company and credited by the Trustee on behalf
                  of a Participant pursuant to his LTIP Compensation Deferral
                  Election, the PREMIUM STANDARD FARMS DEFERRED COMPENSATION
                  PLAN GROUP TRUST.

         (l)      The term "TRUSTEE" means A.G. Edwards Trust Company or the
                  bank or trust company designated as its successor trustee
                  under the agreement and declaration establishing the Trust.

         2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
any masculine terminology used herein shall also include the feminine gender,
and the definition of any term herein in the singular shall also include the
plural.

                    SECTION 3. ELIGIBILITY FOR PARTICIPATION

         3.1 ELIGIBILITY. An employee of the Company shall be eligible to
participate in the Plan with respect to a calendar year if:

                                       3
<PAGE>   6
                  (a)      He qualifies as an Executive with respect to such
                           year; and

                  (b)      The Committee has selected such Executive to
                           participate with respect to such year.

         The initial Participants in the Plan are listed on the attached
Schedule A. The Committee may add additional Participants or remove existing
Participants from time to time by written action.

         3.2 INACTIVE PARTICIPANTS. If at a future date an active Participant no
longer meets the requirements for participation in this Plan for reasons other
than termination of employment, the Participant shall become an inactive
Participant, retaining all of the rights accorded Participants by this Plan,
except the right to make additional deferrals of LTIP Compensation pursuant to
Section 4. Such an individual shall remain an inactive Participant unless and
until he again becomes an active Participant by again qualifying as an Executive
entitled to participate in this Plan.

                    SECTION 4. DEFERRAL OF LTIP COMPENSATION

         4.1 DEFERRAL OF LTIP COMPENSATION. At the times and in the manner
specified below, an active Participant or an eligible Executive may make an
irrevocable election in writing to defer all or a portion of his LTIP
Compensation until a specified date in the future.

                  (a)      TIMING AND NATURE OF LTIP COMPENSATION DEFERRAL
                           ELECTION. An active Participant or eligible Executive
                           described in the preceding paragraph may make a LTIP
                           Compensation Deferral Election, prior to December 31
                           of any calendar year, to defer receipt of any
                           percentage in whole numbers (e.g., 1%, 7%, etc.) of
                           his LTIP Compensation which is not then fixed or
                           determined but which is expected to be fixed and
                           determined, and paid, in the following calendar year.

                  (b)      ELECTIONS BY NEWLY ELIGIBLE EXECUTIVES.
                           Notwithstanding anything in this Section 4.1 to the
                           contrary, when an Executive first becomes an eligible
                           Executive, he may make the election described in
                           subsection (a) above, as applicable (to be applied to
                           the LTIP Compensation, if any, earned by and payable
                           to him with respect to the calendar year in which he
                           is first an eligible Executive), within 30 days after
                           the date he first becomes an eligible Executive,
                           provided that at the time the election is made the
                           amount of the LTIP Compensation payable to him with
                           respect to such calendar year has not been fixed and
                           determined.

                  (c)      CREDITING OF DEFERRED AMOUNTS. As soon as practicable
                           after LTIP Compensation subject to a LTIP
                           Compensation Deferral Election would, but for the
                           provisions of this Plan, be payable to an active
                           Participant or eligible Executive, the Company shall
                           deposit with the Trustee, and direct the Trustee to
                           credit to his Deferral Account, the amount of the
                           LTIP Compensation the active Participant or eligible
                           Executive elected to defer.

                                       4
<PAGE>   7
               SECTION 5. ELECTIONS OF TIMING AND FORM OF PAYMENT

         5.1      ELECTING THE TIME OF PAYMENT.

                  (a)      GENERAL RULE. An active Participant or eligible
                           Executive shall, in his LTIP Compensation Deferral
                           Election, elect to commence receipt of payment of the
                           deferred amount (and earnings thereon):

                           (1)      30 days after termination of employment;

                           (2)      on a specified deferral ending date which is
                                    at least two years after the calendar year
                                    in which the LTIP Compensation would have
                                    been paid but for the deferral election;

                           (3)      the earlier of the dates specified in (1)
                                    and (2) above;

                           (4)      the earlier of the date specified in (1)
                                    above, or the date 30 days after a Change of
                                    Control; or

                           (5)      the earlier of (i) the date specified in (3)
                                    above, or (ii) the date 30 days after a
                                    Change of Control.

                           In addition, upon application made to the Committee
                           not later than the last day of the calendar year that
                           ends at least two years prior to the beginning of the
                           calendar year in which such amounts first become
                           payable, and with the approval in its sole discretion
                           of the Committee, a Participant may elect to receive
                           payment of deferred LTIP Compensation (and earnings
                           thereon) at one of the times reflected in (1) through
                           (5) above, notwithstanding the initial election as to
                           the time of payment reflected in the pertinent LTIP
                           Compensation Deferral Election; provided however,
                           that the change in election as to the timing of the
                           payment must provide for payment at a later time than
                           the time for payment elected in the initial LTIP
                           Compensation Deferral Election.

                           EXAMPLE: Participant A completes a LTIP Compensation
                           Deferral Election on December 31, 2000, for deferral
                           of a portion of his LTIP Compensation payable in 2001
                           which has not been fixed or determined as of the date
                           of the election. Participant A elects to receive his
                           deferred LTIP Compensation on July 1, 2005. The
                           election is permissible because his deferral ending
                           date is a date certain that is more than two years
                           after the 2001 calendar year, which is the year in
                           which the LTIP Compensation would have been paid but
                           for the deferral election.

                           Participant B similarly completes a LTIP Compensation
                           Deferral Election form, but elects to receive her
                           deferred Compensation 30 days after termination of
                           her employment. The election is permissible.

                                       5
<PAGE>   8
                           Participant C similarly completes a LTIP Compensation
                           Deferral Election form and, like Participant A,
                           selects a deferral ending date of July 1, 2004. But
                           Participant C further elects to receive his deferred
                           LTIP Compensation on the earlier of (i) 30 days after
                           his termination of employment, and (ii) the July 1,
                           2004, deferral ending date. The election is
                           permissible.

                           Participant D similarly completes a LTIP Compensation
                           Deferral Election form and, like Participant A,
                           selects a deferral ending date of July 1, 2004. But
                           Participant D further elects to receive his deferred
                           LTIP Compensation on the earlier of (i) 30 days after
                           his termination of employment, (ii) the July 1, 2004,
                           deferral ending date, or (iii) 30 days after a Change
                           of Control. The election is permissible.

                  (b)      EXCEPTIONS. Notwithstanding anything in subsection
                           (a) above, or in any other provision of the Plan, the
                           following additional rules apply to the time at which
                           amounts are payable by this Plan:

                           (1)      DEATH OF PARTICIPANT. The balance of a
                                    Participant's Deferral Account shall be paid
                                    to the Participant's Beneficiary as soon as
                                    practicable after the Participant's death.

                           (2)      DISABILITY OF PARTICIPANT. The balance of a
                                    Participant's Deferral Account shall be paid
                                    to the Participant upon the Participant's
                                    total and permanent disability. For this
                                    purpose, a "total and permanent disability"
                                    is a physical or mental condition that
                                    entitles the Participant to Social Security
                                    disability benefits. Payment shall be made
                                    to the Participant as soon as practicable
                                    after the Participant files with the
                                    Committee proof of his disability
                                    determination by the Social Security
                                    Administration.

                           (3)      HARDSHIP. In the event of an unforeseen
                                    financial hardship or financial emergency
                                    occurring in the personal affairs of the
                                    Participant, the Committee, upon application
                                    by the Participant, may accelerate the
                                    payment of all or a portion of the balance
                                    of his Deferral Account.

                                    A great financial hardship or unforeseen
                                    emergency will be deemed to have occurred if
                                    the payment of benefits is for or on account
                                    of:

                                    (i)      unemployment of the Participant, or
                                             employment at a salary fifty
                                             percent (50%) or less than the sum
                                             of his prior Compensation and LTIP
                                             Compensation with the Company,

                                    (ii)     expenses for medical care
                                             previously incurred by the
                                             Participant, his spouse, or any of
                                             his other dependents,

                                       6
<PAGE>   9
                                    (iii)    costs directly related to the
                                             Participant's purchase of his
                                             principal residence (excluding
                                             mortgage payments),

                                    (iv)     bankruptcy of the Participant,

                                    (v)      payment of tuition, related
                                             educational fees, and room and
                                             board expenses, for the next 12
                                             months of post-secondary education
                                             for the Participant, his spouse, or
                                             other dependents,

                                    (vi)     payments necessary to prevent the
                                             eviction of the Participant from
                                             his principal residence or the
                                             foreclosure on the mortgage on that
                                             residence, or

                                    (vii)    other events of a similar
                                             magnitude.

                                    The accelerated payment made pursuant to
                                    this subsection shall not exceed the amount
                                    the Committee, in its complete discretion,
                                    determines is necessary to satisfy the great
                                    financial hardship or unforeseen emergency.

                           (4)      ACCELERATION OF PAYMENT DATE SUBJECT TO
                                    SUBSTANTIAL RESTRICTION. The Committee, upon
                                    application by the Participant, may
                                    accelerate the payment of up to ninety-five
                                    percent (95%) of the balance of the
                                    Participant's Deferral Account, subject to a
                                    forfeiture by the Participant of a portion
                                    of his Deferral Account. The amount of the
                                    forfeiture shall be equal to five percent
                                    (5%) of the amount of the payment
                                    accelerated by the Committee.

                           (5)      TERMINATION OF THE PLAN AND TRUST. All
                                    amounts credited to Participants' respective
                                    Deferral Accounts shall be payable
                                    immediately upon termination of the Plan and
                                    Trust as described in Section 12.2.

                  (d)      FINAL PAYMENT FROM TRUST. The final payment from the
                           Trust to a Participant or Beneficiary may be adjusted
                           to account for prior overpayments or underpayments
                           attributable to estimates of earnings allocable to
                           prior distributions of deferred LTIP Compensation.

         5.2      ELECTING THE FORM OF PAYMENT.

                  (a)      GENERAL RULE. Each active Participant or eligible
                           Executive shall, in his LTIP Compensation Deferral
                           Elections, elect the form in which the Plan shall pay
                           his deferred LTIP Compensation (and earnings
                           thereon). Such an active Participant or eligible
                           Executive may elect that such amounts be paid:

                           (1)      in a single lump sum; or

                                       7
<PAGE>   10
                           (2)      in ten substantially equal annual
                                    installments, adjusted annually for earnings
                                    on the unpaid balance.

                           In addition, upon application to the Committee not
                           later than the last day of the calendar year that
                           ends at least two years prior to the beginning of the
                           calendar year in which such amounts first become
                           payable, and with the approval in its sole discretion
                           of the Committee, a Participant may elect to receive
                           payment of deferred LTIP Compensation (and earnings
                           thereon) in any of the forms listed above,
                           notwithstanding the initial election as to form as
                           reflected in the pertinent LTIP Compensation Deferral
                           Election.

                  (b)      EXCEPTIONS. Notwithstanding anything in subsection
                           (a) above, or any other provision of the Plan, the
                           following additional rules apply to the form in which
                           amounts are payable by this Plan:

                           (1)      DEATH OF PARTICIPANT. A Participant may
                                    designate, in his Beneficiary designation on
                                    file with the Committee, the form in which
                                    payments on account of his death should be
                                    made to his Beneficiary. The Participant may
                                    elect to have such payments made in any of
                                    the forms described in subsections (1) or
                                    (2) of subsection (a) above. In the event
                                    the Participant fails to designate a form of
                                    death benefits, death benefits shall be paid
                                    in a single lump sum.

                           (2)      DISABILITY OF PARTICIPANT. Upon application
                                    to the Committee at least 60 days prior to
                                    the calendar year in which such amounts
                                    first become payable, and with the approval
                                    of the Committee in its sole discretion, a
                                    Participant may elect to receive payments
                                    made pursuant to subsection 5.1(b)(2) in any
                                    of the forms described in subsections (1) or
                                    (2) of subsection (a) above. If the
                                    Participant fails to timely make an election
                                    concerning the form of payment, payment
                                    shall be made in a single lump sum.

                           (3)      HARDSHIP AND ACCELERATED PAYMENTS. Payments
                                    made pursuant to subsection 5.1(b)(3) or (4)
                                    shall be made in a single lump sum.

                           (4)      TERMINATION OF THE PLAN AND TRUST. Upon
                                    termination of the Plan and Trust, a
                                    Participant's Deferral Account shall be paid
                                    in a single lump sum, irrespective of any
                                    elections made pursuant to subsection
                                    5.2(a). See also Section 12.2.

                  SECTION  6. INVESTMENT OF DEFERRAL AND VESTING ACCOUNTS

         The Deferral Account maintained by the Trustee on behalf of a
Participant shall be credited with earnings (and losses) resulting from
investment by the Trustee. Participants may request that amounts deposited and
credited to their respective Deferral Accounts be invested in particular
investments, chosen from a set of options established by the Committee. The

                                       8
<PAGE>   11
Participants' requests shall not be binding, however, and the Committee, in its
sole discretion, may elect to:

                  (a)      instruct the Trustee to decline to honor
                           Participant's requests,

                  (b)      direct the Trustee to invest amounts deposited and
                           credited to Deferral Accounts in another manner, or

                  (c)      permit the Trustee to invest amounts deposited and
                           credited to Deferral Accounts in the manner the
                           Trustee considers most appropriate or, where the
                           Committee provides such guidelines, in accordance
                           with general investment guidelines established by the
                           Committee and communicated in writing to the Trustee.

                     SECTION 7. DESIGNATION OF BENEFICIARIES

         7.1 GENERAL RULE. A Participant may designate a Beneficiary or
Beneficiaries who are to receive upon his death the payments that otherwise
would have been paid to him. Such Beneficiary designation may include an
election concerning the form in which death benefits are to be paid by the Plan
to the Beneficiary or Beneficiaries. All designations shall be in writing and
shall be effective only if and when delivered to the Committee or its designee
during the lifetime of the Participant.

         7.2 SPECIAL RULE FOR MARRIED PARTICIPANTS. Notwithstanding Section 7.1,
the spouse of a married Participant shall be deemed to be the Participant's sole
primary Beneficiary. The Participant may designate a primary Beneficiary other
than his spouse only if the spouse consents in writing, on a form the Committee
or its designee shall provide, and the spouse's signature is notarized. Spousal
consent is not required if the Participant is legally separated or cannot locate
his spouse.

         7.3 CHANGING BENEFICIARY DESIGNATIONS. Subject to Section 7.2, a
Participant may, from time to time during his lifetime, change his Beneficiary
or Beneficiaries by a written instrument delivered to the Committee or its
designee. The term "Beneficiary" may include a trust, so long as the trust
survives the Participant's death. A Participant's designation of his spouse as a
Primary Beneficiary shall automatically lapse upon his divorce or legal
separation from the spouse.

         7.4 FAILURE TO DESIGNATE A BENEFICIARY. In the event that a Participant
is not survived by a Beneficiary, or if for any reason a Beneficiary designation
shall be ineffective in whole or in part, the distribution that otherwise would
have been paid to such Participant shall be paid to his estate, and in such
event the term "Beneficiary" shall include his estate.

               SECTION 8. MERGER, CONSOLIDATION AND SALE OF ASSETS

         8.1 MERGER. In the event the Company consolidates with, merges into, or
transfers all or substantially all of its assets to another entity (hereinafter
referred to as a "Successor Employer"), the Company and such Successor Employer
may agree that the Successor Employer shall assume the Company's obligations
under this Plan in whole or in part. In no event shall such merger,
consolidation or transfer extinguish the Company's or the Successor Employer's
obligations to Participants and their Beneficiaries under this Plan. In the
event the Successor Employer elects to terminate the Plan and Trust, all amounts
credited to Participants'

                                       9
<PAGE>   12
respective Deferral Accounts shall be paid to the Participants or their
Beneficiaries in a single sum as soon as practicable.

         8.2 ACQUISITION BY ANOTHER EMPLOYER. In the event the Company is sold
to another corporation or other party(ies) ("New Company"), the Company may
agree with such New Company that the New Company shall assume the obligations
under this Plan in whole or in part. In no event shall such sale extinguish the
Company's or New Company's obligations to Participants and their Beneficiaries
under this Plan. In the event the New Company elects to terminate the Plan and
Trust, all amounts credited to Participants' respective Deferral Accounts shall
be paid to the Participants or their Beneficiaries in a single sum as soon as
practicable.

                        SECTION 9. RIGHTS OF PARTICIPANTS

         Notwithstanding the depositing and crediting of amounts to the Deferral
Account maintained by the Trustee on behalf of a Participant, the right of the
Participant, or his Beneficiary, to receive a distribution under this Plan shall
be an unsecured claim against the general assets of the Company. Participants
and Beneficiaries shall have the status of general unsecured creditors of the
Company. This Plan constitutes a mere promise by the Company to make benefit
payments in the future.

         The Deferral Account maintained by the Trustee on behalf of a
Participant may not in any way be encumbered or assigned by a Participant or his
Beneficiary.

         Nothing in this Plan shall give any Participant the right to be
retained as an Executive or an employee of the Company, affect the right of the
Company to remove any Executive or employee, or give any Executive or employee
(or his Beneficiary) the right to receive a particular amount of LTIP
Compensation from the Company.

                           SECTION 10. ADMINISTRATION

         10.1 ADMINISTRATIVE COMMITTEE. The Committee shall administer the Plan.
The Committee may appoint an administrative committee (the "Administrative
Committee") to assist it in the administration of the Plan. The Administrative
Committee may act on behalf of the Committee with respect to all matters
concerning the Plan, except for those matters the Committee specifically
reserves, in this Plan or otherwise, for its own action. The Board or the
Committee may remove, replace, or appoint members of the Administrative
Committee at any time.

         10.2 POWERS OF ADMINISTRATIVE COMMITTEE. The Committee shall have the
power to interpret the Plan and to determine all questions that arise under it.
Such power includes, for example, the administrative discretion necessary to
determine whether an individual meets the Plan's written eligibility
requirements, and to interpret any other term contained in this document. All
payments of benefits under the Plan shall be made by the Company or by the
Trustee in accordance with the terms of this Plan and the agreement and
declaration establishing the Trust. The decision of the Committee upon all
matters within the scope of its authority shall be final and binding on all
parties, shall be subject to the most deferential standard on review, and shall
not be affected by any actual or alleged conflict of interest. No member of the
Committee or the Administrative Committee may act, in his capacity as a member
of the Committee or

                                       10
<PAGE>   13
Administrative Committee, with respect to a matter concerning his eligibility or
benefits under the Plan.

                         SECTION 11. CLAIMS AND APPEALS

         11.1 CLAIMS FOR BENEFITS; INITIAL PROCESSING. Claims for benefits under
the Plan normally will be approved or denied by the Committee within 30 calendar
days after they are received by the Committee or its designee. If an extension
of time is required to process the claim, the extension will not exceed 30
calendar days, and the claimant shall be provided notice of any extension. The
notice shall explain the reason for the extension and when a decision will be
made. Claims not resolved prior to the end of the extension may be deemed
denied.

         11.2 CLAIM DENIAL. If a claim for benefits is denied (or deemed
denied), the Committee or its designee shall provide the claimant with written
notice reflecting the reasons for the denial, with a specific reference to the
Plan provisions upon which the decision was based. The notice shall also reflect
any additional information that may be necessary for the claimants claim to be
approved.

         11.3 APPEALING A DENIED CLAIM. A claimant may appeal the denial of a
claim by writing the Committee and stating that he wishes to appeal. In order to
be considered, the appeal must be received by the Committee or its designee no
more than 30 calendar days after notice of the denial is provided (or, if no
notice is provided, then after the earliest date on which the claimant is
entitled to deem the claim denied).

         11.4 PROCESSING APPEALS. If a claimant appeals a denial of a claim, the
Board shall review the claim and any additional information furnished by the
claimant. The Board shall decide the appeal within 30 calendar days after it is
received, but in unusual circumstances may delay resolution of the appeal for an
additional 30 calendar days. The claimant shall be notified of any delay within
30 calendar days after the appeal is received by the Committee or its designee.
After the appeal is decided, the Board shall notify the claimant in writing of
its decision, and explain how the appeal was decided and what Plan provisions
were relied upon.

                     SECTION 12. AMENDMENTS AND TERMINATION

         12.1 AMENDMENT. The Company in its absolute discretion, without notice,
may at any time and from time to time, modify or amend, in whole or in part, any
or all of the provisions of the Plan. No such modification or amendment may,
without the consent of a Participant (or his Beneficiary in the case of his
death) reduce the right of a Participant (or his Beneficiary, as the case may
be) to the payment of any amount deposited and credited to his Deferral Account
under the Plan as of the date of such modification or amendment.

         12.2 SUSPENSION AND TERMINATION. The Company in its absolute
discretion, without notice, at any time may suspend or terminate the Plan. In
addition, the Committee may suspend or terminate an active Participant's further
participation in the Plan at any time. Other than earnings on a Participant's
Deferral Account credited under Section 6, no additional LTIP Compensation may
be deferred by any Participant following suspension or termination of the Plan,
or to such an Account of an inactive Participant following termination of his or
her participation in the Plan. Upon termination of a Participant's participation
in the Plan, distribution

                                       11
<PAGE>   14
of a Participant's Plan benefit shall be made in the manner and at the time
described under the Plan's normal provisions.

         Upon suspension of the Plan, distribution of a Participant's Plan
benefit shall be made in the manner and at the time described under the Plan's
provisions, and the Trust shall not terminate until all monies on deposit
thereunder are either paid to Participants and their Beneficiaries, or returned
to the Employer, as provided for under the agreement and declaration
establishing the Trust.

         In the event the Company, a Successor Employer described in Section
8.1, or a New Employer described in Section 8.2 elects to terminate the Plan,
all amounts then on deposit with and credited to Participants' respective
Deferral Accounts shall, notwithstanding anything herein to the contrary, be
paid as soon as practicable to the Participants (or their Beneficiaries, as the
case may be) in a lump sum.

                           SECTION 13. APPLICABLE LAWS

         The Plan shall be construed, administered, and governed in all respects
under and by the laws of the State of Missouri, to the extent federal law does
not apply.

                            SECTION 14. INCOMPETENCY

         Every person receiving or claiming payments under this Plan shall be
conclusively presumed to be mentally competent until the date on which the
Committee or its designee receives written notice, in a form and manner
acceptable to the Committee, that such person is incompetent and that a
guardian, conservator, or other person legally vested with the care of his
estate has been appointed. In the event a guardian or conservator of the estate
of any person receiving or claiming payments under this Plan shall be appointed
by a court of competent jurisdiction, benefit payments may be made to such
guardian or conservator, provided that proper proof of appointment and
continuing qualification are furnished in a form and manner acceptable to the
Committee or its designee. Any such payment so made shall be a complete
discharge of any liability therefor.

                              SECTION 15. EXPENSES

         Costs of administration of the Plan and Trust, and all taxes imposed on
the Plan or Trust shall be paid by the Company. Participants' Deferral Accounts
shall not be reduced for these amounts.

                              SECTION 16. NOTICES

         Any notice or election required or permitted to be given hereunder
shall be in writing, in the form prescribed by the Committee, and shall be
deemed to be filed with the Committee:

         (a)      On the date it is personally delivered to the Committee (or
                  its designee), or

                                       12
<PAGE>   15
         (b)      Five business days after it is sent by registered or certified
                  mail, addressed to the Committee (or its designee) at the
                  Company's address.

                     SECTION 17. WITHHOLDING AND DEDUCTIONS

         All payments made under the Plan by the Company or the Trustee to any
Participant or Beneficiary, shall be subject to applicable withholding and to
such other deductions that are required by applicable law, and to the delivery
to the Committee (or its designee) or the Trustee of any documents, applications
or other information deemed necessary by the Committee or the Trustee, in their
sole discretion, as a condition precedent to payment.

                      SECTION 18. INVALIDITY OF PROVISIONS

         If any provision of the Plan is held or found to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provision had not been included. Similarly, in the event any provision of the
Plan is held or found to be ineffective or unenforceable with respect to
allowing for the deferral of income taxation as intended by the Plan, such
provision shall be severed from the provisions of the Plan that are so effective
or enforceable, and such latter provisions shall be considered to constitute a
separate arrangement.

                        19. TAX ADVANTAGES NOT GUARANTEED

         Neither the Company, the Committee, the Administrative Committee, nor
any other person guarantees that any particular Participant or Beneficiary will
achieve the tax advantages contemplated by this Plan, and neither the Company,
the Committee, the Administrative Committee or any other person indemnifies or
holds harmless a Participant or Beneficiary with respect to liability, whether
or not unintended or unforeseen, for income taxes, excise taxes, interest and/or
penalties, or any other liability, arising from or incurred in connection with
this Plan.

         In the event any benefits payable hereunder to a Participant or
Beneficiary are subjected to taxation prior to the date such benefits are
payable under the terms of the Plan, the payment of such benefits shall be
accelerated so that, to the extent practicable, the Participant or Beneficiary
receives such benefits in the taxable year in which such amounts are subjected
to taxation.

                       20. RETURN OF COMPANY CONTRIBUTIONS

         Nothing in this Plan nor the agreement and declaration establishing the
Trust shall be construed to prevent the return to the Company of amounts
contributed to the Trust by the Company due to a mistake of fact or law,
including (but not limited to) erroneous calculations or erroneous
determinations of eligibility.

                                       13
<PAGE>   16
         IN WITNESS WHEREOF, the Company hereby adopts this PREMIUM STANDARD
FARMS DEFERRED COMPENSATION PLAN this 29th day of December, 2000.

                                      PREMIUM STANDARD FARMS

                                      BY:    /s/ David Klein
                                             __________________________________

                                     TITLE:  Vice President, Human Resources
                                             __________________________________
ATTEST:

/s/ John Meyer
____________________________

                                       14
<PAGE>   17
                                   APPENDIX A

Initial eligible Executives are:

             JOHN MEYER
             STEVE LIGHTSTONE
             ROBERT MANLEY
             CHARLIE ARNOT
             DAVE KLEIN
             MIKE TOWNSLEY
             JERRY SCHULTE
             DAVID JAMES
             MARK WARREN
             CINDY BRABANDER
             DON KILLINGSWORTH
             CALVIN HELD
             DENNIS RIPPE
             DAVE TOWNSEND
             DAN HARRIS
             COLLETTE SCHULTZ-KASTER
             MARK TRULL

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