SMITHFIELD FOODS, INC.

1997 INCENTIVE BONUS PLAN

 (Applicable to John O. Nielson as President and Chief Operating Officer of the Company)

1. Purpose. Smith field Foods, Inc. hereby establishes an Incentive Bonus Plan (the "Plan") applicable to John O. Nielson, as President and Chief Operating Officer of the Company ("Executive"). The Company intends to provide the Executive with incentive bonuses that are related to and measured by the Company's performance under a program intended to meet the requirements of Code section 162 (m) and regulations thereunder. The Plan was adopted by the Committee and ratified by the Board on May 24, 1996, and is subject to approval of the Company's stockholders. The Plan is effective as of April 29, 1996.

2. Definitions. As used in the Plan, the following terms have the meanings indicated.

(a) "Auditor" means the independent public accounting firm then employed by the Company to prepare the Company's financial statements.

(b) "Beneficiary" means the person or persons designated by the Executive in a writing filed with the Company to receive his Bonus Payment upon his death.

(c) "Board" means the board of directors of the Company.

(d) "Bonus Base" means the consolidated net income of the Company and its subsidiaries prepared in accordance with generally accepted accounting principles before (i) Bonus Payments to Executive, (ii) accounting for minority ownership interests in subsidiaries, (iii) incentive payments due officers based on income approved by the Board, and (iv) applicable federal and state income taxes.

(e) "Bonus Payment" means the amount due the Executive under the Bonus Plan, as computed by the Company, and certified by the Committee.

(f) "Cause" means (i) continued neglect by Executive of his employment duties (as reasonably determined by the Company's Board of Directors) after delivery of written notice thereof to Executive specifying with particularity the duties Executive has neglected, (ii) willful misconduct in connection with the performance of Executive's duties, including by way of example but without limitation, intentional misappropriation of funds or property of the Company or any of its subsidiaries, or securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of the Company or any of its subsidiaries, (iii) conduct by Executive that would result in material injury to the reputation of the Company or any of its subsidiaries (whether publicly known or unknown), including by way of example but without limitation, pleading guilty to or conviction of a felony involving moral turpitude, or (iv) certification by a physician that Executive is unable to regularly perform his duties hereunder by reason of Executive's addiction to alcohol or a controlled substance.

(g) "Code" means the Internal Revenue Code of 1986, as amended, and regulations thereunder.

(h) "Committee" means two or more directors appointed by the Board who are "outside directors" within the meaning of section 162 (m) of the Internal Revenue Code. The Committee may be a duly appointed sub-committee of the Compensation Committee.

(i) "Company" means Smith field Foods, Inc., a Delaware corporation.

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