EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) dated as of the 5th day of
December, 2011, is made by and between National Beef Packing Company, LLC, a
Delaware limited liability company (“National Beef”), and Timothy M. Klein
(“Executive”).
WHEREAS, National Beef and Executive are parties to an Employment Agreement
dated August 6, 2003 (as subsequently amended on December 31, 2008 and July 27,
2009 amended, the “Agreement”), and the parties now desire to amend and restate
the Agreement to provide for Executive’s service as Chief Executive Officer and
President of National Beef; and
WHEREAS, National Beef desires to continue to employ Executive and Executive
desires to continue to be employed by National Beef, and National Beef and
Executive desire to terminate the Prior Agreement and supersede it, in its
entirety, with this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1.Employment. Subject to the terms and conditions herein, National Beef will
employ Executive, and Executive will be employed by National Beef, hereunder as
the Chief Executive Officer and President (“CEO”) of National Beef, commencing
upon the consummation of the transactions to occur on or about December 30, 2011
(the “Effective Date”) until and including the earlier of: (a) the last day of
the fiscal year ending on or about December 31, 2016, or such later date as the
parties may agree (the “Expiration Date”); or (b) the date such employment shall
otherwise have been terminated in accordance with Section 4 (the “Termination
Date”) (the period from the original date of the Agreement until the earlier of
the Expiration Date or the Termination Date being sometimes referred to herein
as the “Term”). The occurrence of either the Expiration Date or the Termination
Date and the resulting discontinuation of Executive’s services to National Beef
hereunder shall not affect the rights and obligations of Executive or any of his
affiliates pursuant to the LLC Agreement except as may be otherwise expressly
set forth in this Agreement, or the LLC Agreement.
2.    Location of Employment. Executive’s principal places of employment shall
be at the principal executive offices of National Beef located in Kansas City,
Missouri or at such other location as deemed necessary by National Beef.
3.    Compensation.
a.Annual Salary. Commencing as of the Effective Date, Executive shall be paid by
National Beef a salary at the annual rate of $900,000 for each 12-month period
during the Term, pro-rated for any portion thereof, payable in substantially
equal monthly installments on or before the last day of each monthly period with
respect to each such period, less normal withholdings.
b.    [Reserved]
c.    Annual Bonus. Commencing as of the Effective Date, but measuring from the
period

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beginning on or about August 28, 2011, for each 12 month period beginning on or
about the last Sunday in August and ending on or about the last Saturday in
August of the following year during the Term, Executive shall, if he is employed
by National Beef hereunder as of the last day of such annual period, or as
otherwise described herein, be paid by National Beef an annual incentive bonus
(an “Annual Bonus”) equal to: (a) if National Beef’s earnings before taxes
(“EBT”) for such fiscal year exceeds $20,000,000, two percent (2.0%) of the
amount of such excess, up to EBT of $80,000,000; plus (b) if EBT for such fiscal
year exceeds $80,000,000, one percent (1.0%) of such excess.
Any Annual Bonus accruing with respect to a fiscal year shall be payable, less
normal withholdings, within sixty (60) days following the end of such fiscal
year (the “Annual Bonus Date”); provided, however, if calculation of the Annual
Bonus is not administratively practicable due to events beyond the control of
Executive (or his beneficiary), then payment shall be made during the first
taxable year of Executive in which the calculation of the amount of the payment
is administratively practicable. Prior to the period ending on or about August
30, 2014, the Annual Bonus shall be calculated without any step-up in basis for
the transactions consummated on the Effective Date. Commencing on or about
August 31, 2014, the Annual Bonus shall be calculated using any step-up for
depreciation and amortization for the transactions consummated on the Effective
Date. Except as specified above, each Annual Bonus shall be calculated using
generally accepted accounting principals consistently applied.
d.    Long-Term Incentive Plan.
(i)Executive shall, if he is continuously employed hereunder through the last
day of the fiscal year ending on or about August 28, 2009, or as otherwise
described herein, be paid by National Beef a long-term incentive bonus (“First
Long-Term Bonus”) equal to: (a) if National Beef’s cumulative earnings before
interest and taxes (“EBIT”) during the period from the first day of the fiscal
year beginning on or about August 27, 2006 through the last day of the fiscal
year ending on or about August 28, 2009 exceeds $115,000,000, 3.903% of such
excess, up to cumulative EBIT of $150,000,000; plus (b) if such cumulative EBIT
exceeds $150,000,000, 1.08949% of such excess, up to cumulative EBIT of
$175,000,000; plus (c) if such cumulative EBIT exceeds $175,000,000, .6045% of
such excess. Any First Long-Term Bonus accruing under this Section 3(d)(i) shall
be payable, less normal withholdings, within sixty (60) days following the end
of the fiscal year ending on or about August 28, 2009 (the “First Long-Term
Bonus Date”); provided, however, if calculation of the First Long-Term Bonus is
not administratively practicable due to events beyond the control of Executive
(or his beneficiary), then payment shall be made during the first taxable year
of Executive in which the calculation of the amount of the payment is
administratively practicable.
(ii)    In addition to the First Long-Term Bonus, Executive shall, if he is
continuously employed hereunder through the last day of the fiscal year ending
on or about August 25, 2012 or as otherwise described herein, be paid by
National Beef another long-term incentive bonus (“Second Long-Term Bonus”) equal
to: (a) if National Beef’s cumulative EBIT during the period from the first day
of the fiscal year beginning

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on or about August 29, 2009 through the last date of the fiscal period ending or
about August 25, 2012 exceeds $115,000,000, four percent (4.0%) of such excess,
up to cumulative EBIT of $150,000,000; plus (b) if such cumulative EBIT exceeds
$150,000,000, three-fourths of one percent (0.75%) of such excess. Any Second
Long-Term Bonus accruing under this Section 3 (d)(ii) shall be payable, less
normal withholdings, within sixty (60) days following the end of the fiscal year
ending on or about August 25, 2012 (the “Second Long-Term Bonus Date”);
provided, however, if calculation of the Third Long-Term Bonus is not
administratively practicable due to events beyond the control of Executive (or
his beneficiary), then payment shall be made during the first taxable year of
Executive in which the calculation of the amount of the payment is
administratively practicable.
(iii)    In addition to the First Long-Term Bonus and the Second Long-Term
Bonus, Executive shall, if he is continuously employed hereunder through the
last day of the fiscal period ending on or about August 30, 2014 or as otherwise
described herein, be paid by National Beef another long-term incentive bonus
(“Third Long-Term Bonus”) equal to: (a) if National Beef’s cumulative EBIT
during the period from the first day of the fiscal period beginning on or about
August 26, 2012 through the last day of the fiscal period ending on or about
August 30, 2014 exceeds $76,667,000, four percent (4.0%) of such excess, up to
cumulative EBIT of $100,000,000 plus (b) three-fourths of one percent (.75%) of
the excess over $100,000,000.
Any Third Long-Term Bonus accruing under this Section 3(d)(iii) shall be
payable, less normal withholdings, within sixty (60) days following the end of
the fiscal year ending on or about August 30, 2014 (the “Third Long-Term Bonus
Date”); provided, however, if calculations of the Third Long-Term Bonus is not
administratively practicable due to events beyond the control of the Executive
(or his beneficiary), then payment shall be made during the first taxable year
of Executive in which the calculation of the payment is administratively
practicable.
(iv)    For purposes of calculating the First Long-Term Bonus, the Second
Long-Term Bonus and the Third Long-Term Bonus under this Section 3(d), National
Beef’s EBIT shall be determined by National Beef’s accountants using generally
accepted accounting principles consistently applied without any step-up for
depreciation or amortization in connection with the transaction to occur on or
about December 30, 2011.
(v)    In addition to the First Long-Term Bonus, the Second Long-Term Bonus and
the Third Long-Term Bonus, Executive shall, if he is continuously employed
hereunder through the last day of the fiscal year ending on or about December
31, 2016 or as otherwise described herein, be paid by National Beef another
long-term incentive bonus (“Fourth Long-Term Bonus”) equal to: (a) if National
Beef’s cumulative EBIT during the period from the first day of the fiscal period
beginning on or about August 31, 2014 through the last day of the fiscal period
ending on or about August 27, 2016 exceeds $76,667,000, four percent (4.0%) of
such excess, up to cumulative EBIT of $100,000,000 plus (b) three-fourths of one
percent (.75%) of the excess over

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$100,000,000.
Any Fourth Long-Term Bonus accruing under this Section 3 (d)(v) shall be
payable, less normal withholdings, within sixty (60) days following the end of
the fiscal period ending on or about August 27, 2016 (the “Fourth Long-Term
Bonus Date”); provided, however, if calculation of the Fourth Long-Term Bonus is
not administratively practicable due to events beyond the control of Executive
(or his beneficiary), then payment shall be made during the first taxable year
of Executive in which the calculation of the amount of the payment is
administratively practicable.
(vi)    For purposes of calculating the Fourth Long-Term Bonus under this
Section 3(d), National Beef’s EBIT shall be determined by National Beef’s
accountants using generally accepted accounting principles consistently applied
including any step-up for depreciation or amortization in connection with the
transaction to occur on or about December 30, 2011.
e.    Other Benefits. Executive shall be entitled to paid vacations, personal
and sick days consistent with the policies of National Beef generally applicable
to its management employees, as adopted and amended from time to time by the
Board. Executive shall receive such other compensation as shall be approved by
the Board. Executive shall also be entitled to participate in all benefit plans
which are made available from time to time to management employees of National
Beef, on terms no less favorable than those applicable to any other management
employee (such plans including, without limitation, group medical, life,
disability and accidental death and dismemberment insurance).
f.    Support. During his employment hereunder, National Beef shall, at its
expense, cause to be provided for Executive’s use, office facilities at National
Beef’s principal business locations and such secretarial services Executive may
reasonably require in carrying out his obligations under this Agreement.
g.    Business Expenses. During his employment hereunder, Executive shall also
be reimbursed by National Beef for reasonable business expenses actually
incurred or paid by him, consistent with the policies of National Beef, in
rendering to National Beef the services provided for herein, upon presentation
of expense statements or such other supporting information as National Beef may
customarily and reasonably require of its executives.
4.    Termination.
a.    The employment of Executive hereunder may be terminated by National Beef
on at least thirty (30) days’ prior written notice if the Board reasonably
determines that Executive has become permanently disabled (as hereinafter
defined). Such written notice shall provide reasonable detail regarding the
basis for such determination. Executive shall be deemed to be “permanently
disabled,” as used in this subsection, if Executive has been substantially
unable to discharge his duties and obligations hereunder with or without
reasonable accommodation, by reason of illness, accident or disability for a
period of 180 days in any twelve-month period.
b.    The employment of Executive hereunder shall be automatically terminated on
the

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date of Executive’s death.
c.    National Beef may terminate Executive’s employment hereunder for cause (as
hereinafter defined) by the vote of a majority of the full Board and in
accordance with the LLC Agreement following: (i) notice to Executive of not less
than fifteen (15) days setting forth in detail the nature of such cause; and
(ii) a hearing before the Board at which Executive shall be entitled to
representation by counsel. National Beef shall have “cause” to terminate
Executive, as used in this subsection, only if Executive has: (i) refused or
failed, after reasonable written notice that such refusal or failure would
constitute a default hereunder, to carry out any reasonable and material order
of the Board given to him in writing; (ii) materially and willfully breached the
terms of this Agreement; (iii) demonstrated gross negligence or willful
misconduct in the execution of his material assigned duties where such gross
negligence or willful misconduct has resulted, or would reasonably be expected
to result, in material damage to National Beef; or (iv) been convicted of a
felony (A) constituting fraud, embezzlement or other illegal conduct related to
his employment or (B) which has otherwise resulted, or would reasonably be
expected to result, in material damage to National Beef. With respect to clauses
(ii) and (iii) of the previous sentence, National Beef shall have “cause” to
terminate Executive only if the damage referred to therein or resulting
therefrom is not cured or avoided by Executive within thirty (30) days following
the giving of the notice referred to above.
d.    In addition to the circumstances set forth above in subsections (a), (b)
and (c), National Beef may terminate Executive’s employment for any reason or no
reason and with or without cause upon thirty (30) days’ prior written notice to
Executive.
e.    Executive may terminate his employment hereunder for any reason or no
reason upon thirty (30) days’ prior written notice to National Beef.
f.    Executive may terminate his employment hereunder forthwith at any time for
good reason (as hereinafter defined) upon written notice to National Beef. For
purposes of this subsection, “good reason” shall mean the occurrence of any of
the following (as would reasonably be determined by a president of a company
comparable in size and scope to National Beef): (i) a material reduction or
adverse alteration in the duties, authorities or responsibilities of Executive
as set forth in Section 5 hereof; (ii) removal of Executive from, or any failure
to re-elect Executive to, any titles, offices or positions held by Executive
hereunder; (iii) a reduction by National Beef in Executive’s basic salary or
bonuses herein provided or as the same may be increased from time to time; and
(iv) a material and willful breach by National Beef of any of its obligations to
Executive hereunder.
g.    If Executive’s employment is terminated pursuant to subsection (a) or (b)
above, Executive (or in the case of a termination pursuant to subsection (b)
above, his estate), shall be entitled to, and National Beef’s obligation
hereunder shall be limited to: (i) the payment of the compensation accrued under
Section 3(a) hereof and the payment of other benefits under Section 3(e) hereof,
to the date of such termination plus, until the earlier of the first anniversary
of such termination or the Expiration Date (such earlier date being the “Deemed
Termination Date”), monthly payments of salary pursuant to Section 3(a) and in
the case of disability, all other benefits pursuant to Section 3(e),; (ii) the
payment (A) on or before the Annual Bonus

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Date for the fiscal year in which such termination occurs, of the Annual Bonus
payable pursuant to Section 3(c) for such fiscal year and (B) on or before the
Annual Bonus Date for the fiscal year in which the Deemed Termination Date
occurs, of a pro-rated amount (based on the number of days in such fiscal year)
through the Deemed Termination Date of the Annual Bonus that would have accrued
if Executive had remained employed hereunder through the last day of such fiscal
year, in each case less normal withholdings; and (iii) the payment, on or before
the First Long-Term Bonus Date (if not already paid), the Second Long-Term Bonus
Date (if not already paid), the Third Long-Term Bonus Date (if not already paid)
and the Fourth Long-Term Bonus Date, of a pro-rated amount (based on the number
of days in the period applicable to such bonus) through the Deemed Termination
Date of the amount of the First Long-Term Bonus (if not already paid), the
Second Long-Term Bonus (if not already paid), the Third Long-Term Bonus (if not
already paid) and the Fourth Long-Term Bonus that would have accrued if
Executive had remained employed hereunder for the term applicable to such First
Long-Term Bonus, Second Long-Term Bonus, Third Long-Term Bonus and/or the Fourth
Long-Term Bonus, in each case less normal withholdings.
h.    If Executive’s employment is terminated by National Beef pursuant to
subsection (c) above, or if Executive terminates his employment pursuant to
subsection (e) above, National Beef’s obligation hereunder shall be limited to
the payment of the compensation accrued under Section 3(a) hereof to the date of
such termination.
i.    If Executive’s employment is terminated pursuant to subsection (d) or (f)
above, Executive shall be entitled to, and National Beef’s obligation hereunder
shall be limited to: (i) the payment of the compensation accrued under Section
3(a) hereof to the date of such termination plus continued monthly payment of
salary under Section 3(a), and continuation of benefits under Section 3(e)
(subject to any necessary consent of insurers, where applicable and excluding
participation in any retirement plans), in each case through the Expiration
Date; and (ii) the payment, on or before the Annual Bonus Date for the fiscal
year in which such termination occurs and each fiscal year thereafter through
the Expiration Date, of the Annual Bonus that would have accrued for such fiscal
year if Executive had remained employed hereunder through the last day of such
fiscal year, less normal withholdings; and (iii) the payment, on or before the
First Long-Term Bonus Date (if not already paid), the Second Long-Term Bonus
Date (if not already paid) and the Third Long-Term Bonus Date, of the amount of
First Long-Term Bonus (if not already paid), the Second Long-Term Bonus (if not
already paid) and the Third Long-Term Bonus (if not already paid) and/or the
Fourth Long-Term Bonus, that would have accrued if Executive had remained
employed hereunder through the Expiration Date, less normal withholdings. If
consent of the applicable insurers is not received within 30 days, then an
amount in cash sufficient for Executive to obtain comparable coverage will be
paid to Executive in equal monthly payments through the Expiration Date. If
comparable coverage cannot be obtained, National Beef’s obligation shall be
limited to two times the amount of the applicable premium paid by National Beef
per employee under the applicable program. In the event of a termination
pursuant to subsection (d), National Beef’s failure to provide notice or
requiring that the Executive cease performing duties shall not cause any
additional damages beyond those provided in this subsection (i).
5.    Responsibilities and Authority. In his capacity as CEO of National Beef,
Executive

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shall report to the Board and shall have such responsibilities and authority to
ensure effective management of National Beef as determined by the Board in
accordance with the LLC Agreement. Executive shall have the authority to
implement the business plan of National Beef as approved by the Board, and shall
consult with the Board on all major decisions regarding such business plan. The
Board shall not act through other agents without the knowledge of Executive. In
addition to the foregoing and those responsibilities and authorities normally
associated with the position of chief executive officer in a business similar in
size and scope to that of National Beef, Executive’s responsibilities and
authorities shall include, without limitation, the following:
a.    Responsibility for and authority over day-to-day business operations,
including the selection and dismissal of all employees, including those in key
positions except as noted below.
b.    Responsibility and authority: (i) to develop and implement the business
plan of National Beef as well as capital plans, compensation plans and strategic
plans, subject to approval of the Board; (ii) to authorize any expenditure by
National Beef that is reasonably necessary to enable National Beef to conduct
its business and affairs, provided that any such expenditure (other than
expenditures contemplated by any annual or interim budget, plan or program
already approved by the Board) shall not exceed $1,000,000 without the approval
of the Board; (iii) to implement acquisitions, disposals or sales of properties
or assets of National Beef (whether effected by merger, sale of assets, lease or
equity exchange or otherwise) (A) in the ordinary course of business, (B) as may
be contemplated by any annual or interim budget, plan or program already
approved by the Board, or (C) in a transaction involving less than $1,000,000.
c.    Responsibility and authority to develop an executive management succession
plan for key positions.
d.    Responsibility and authority to implement an effective organizational
structure, provided that the decisions regarding the selection and dismissal of
the Chief Financial Officer as well as the President and Chief Operating Officer
shall be subject to the approval of the Board.
e.    Responsibility and authority to negotiate the Cattle Purchase Agreements
(as defined in the LLC Agreement) and related pricing grids, with USPB, on
behalf of National Beef subject to Board approval before execution of any such
agreement and subject to the provisions of the LLC Agreement.
f.    Responsibility and authority to hire and terminate the general counsel
(not special counsel for the Board), of National Beef subject to the Board’s
authority to terminate such general counsel.
Except as otherwise provided herein, Executive shall observe and carry into
effect all directions and resolutions of the Board, shall have authority to take
any and all actions on behalf of National Beef granted by the Board, and except
to the extent otherwise required by the Delaware Limited Liability Company Act,
as amended from time to time, may execute all

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bonds, notes, debentures, instruments and documents providing for the
acquisition, mortgage or disposition of property and other instruments and
agreements for and in the name of National Beef to the extent that such
authority is granted by the Board herein or otherwise.
6.    Covenant Not to Compete. Executive acknowledges that during his employment
with National Beef he, at the expense of National Beef, has been and will be
specially trained in the business of National Beef, has established and will
continue to establish favorable relations with the customers, clients and
accounts of National Beef and will have access to certain confidential and
proprietary information of National Beef, all of which having economic
significance to National Beef. Therefore, in consideration of this Agreement and
the training and relations incident to Executive’s employment and to further
protect the confidential and proprietary information of National Beef, Executive
agrees that during his employment by National Beef hereunder during the Term and
for a period of two (2) years thereafter, he will not, directly or indirectly,
without the prior written consent of National Beef:
a.    own, have any interest in, or act as an officer, director, partner,
member, manager, principal, employee, agent, representative, consultant or
independent contractor of, or in any way assist in, any business located or
doing business in the United States of America or in Mexico that is engaged, or
hereafter may become engaged, in slaughtering, processing, marketing or
fabricating meat or boxed meat or which is otherwise engaged in competition in
any manner with any other business engaged in by National Beef, or any
subsidiary of National Beef, at any time during the term of Executive’s
employment hereunder;
b.    directly or indirectly contact or solicit any of the Company’s customers
or end users, or prospective customers or end users, with whom he had direct or
indirect contact or solicited on behalf of the Company in the two (2) years
prior to his termination, for the purpose of selling or soliciting products or
services that are in competition with the products or services of the Company;
c.    directly or indirectly contact or solicit any employees of the Company
with whom he worked or had contact for the purpose of causing, inviting, or
encouraging any such employee to alter or terminate his or her employment or
business relationship with the Company (other than as contemplated by Section 5
hereof during his employment by National Beef);
d.    For purposes of this section, solicit means:
(i)    Any comments, conduct or activity that would influence a customer’s
decision to continue doing business with company, regardless of who initiates
contact; or
(ii)    Any comments, conduct or activity that would influence an employee’s
decision to resign his employment with Company or accept employment with
Employee’s new company, regardless of who initiates contact.
If a final judicial determination is made that any of the provisions of this
Section is an unenforceable restriction against Executive, the provisions of
this Section shall be rendered void only to the extent that such judicial
determination finds such provisions unenforceable, and such

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unenforceable provisions shall automatically be reconstituted and become a part
of this Section, effective as of the date first written above, to the maximum
extent in favor of National Beef that is lawfully enforceable. The obligations
of Executive and the rights of National Beef under this Section shall survive
the termination of this Agreement.
7.    Specific Performance. Recognizing that the restrictions, covenants and
assurances contained in Section 6 hereof are reasonable and necessary in order
to protect the legitimate business interests of National Beef, that any breach
or threatened breach of any such restriction, covenant or assurance (a “Breach”)
will result in substantial and irreparable damage to National Beef, and that the
remedies at law for any Breach will be inadequate, National Beef shall be
authorized and entitled to bring a claim in either the federal or state courts
sitting in Delaware: (a) preliminary and permanent injunctive relief, including,
without limitation, mandatory injunctive relief requiring compliance with such
restrictions, covenants and assurances or enjoining and restraining Executive,
and each and every person, firm or company acting in concert or participation
with him, from the continuation of any Breach; (b) an equitable accounting of
all profits or benefits arising out of any Breach; and (c) direct, incidental
and consequential damages to National Beef arising from any Breach, including,
without limitation, costs and reasonable attorney’s fees sustained by National
Beef by reason of the Breach: the foregoing rights and remedies being cumulative
and in addition to such other rights and remedies which may be available to
National Beef at law or in equity.
8.    Indemnification. National Beef agrees, to the fullest extent permitted by
the Delaware Limited Liability Company Act and other applicable law, to
indemnify Executive against any and all claims, losses, damages or costs related
in any way to Executive’s employment with National Beef or to his service as an
officer or member of the Board or as a fiduciary or trustee of any benefit plan
maintained by National Beef or any of its subsidiaries. National Beef will pay
all attorney fees and other expenses relating in any way to this indemnification
agreement and shall advance any such fees and other expenses at the request of
Executive, and all payments hereunder will be fully grossed up for any tax
liabilities. This indemnification agreement will continue and survive following
the termination of all of Executive’s services, in any capacity, to National
Beef, until the expiration of all applicable statutes of limitation. National
Beef will carry a directors’ and officers’ liability insurance policy throughout
the period during which the foregoing indemnification agreement survives, with
terms reasonably acceptable to Executive, but Executive’s right to indemnity
hereunder shall not be limited by, or to the coverage of, such insurance policy.
The foregoing rights shall also not be exclusive of any other indemnification
rights arising under the LLC Agreement or other agreement or resolution or other
decision of the members or Board of National Beef and shall inure to the benefit
of the heirs and legal representatives of Executive. Notwithstanding the
foregoing, any such indemnification of Executive shall be limited to
circumstances or to events where (a) either (i) the Executive, at the time of
the action or inaction in question, determined in good faith that his course of
conduct was in, or not opposed to, the best interests of the Company, or (ii) in
the case of inaction by the Executive, the Executive did not intend his inaction
to be harmful or opposed to the best interests of the Company, and (b) the
Executive’s conduct did not constitute fraud or willful misconduct by the
Executive.
9.    Executive’s Representation. Executive represents and warrants to National
Beef that

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neither the execution nor delivery of this Agreement, nor the performance of
Executive’s obligations hereunder will conflict with, or result in a breach of,
any term, condition, or provision of, or constitute a default under, any
obligation, contract, agreement, covenant or instrument to which Executive is a
party or under which Executive is bound, including without limitation, the
breach by Executive of a fiduciary duty to any former employer.
10.    Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal substantive law (but not the conflict
of law principles) of the State of Delaware.
11.    Costs of Enforcement. Subject to the provisions of Section 19 hereof, if
either party brings any legal action against the other to enforce its rights
under this Agreement, the prevailing party in such dispute shall be entitled to
recover from the other party all fees, costs and expenses of enforcing its
rights under this Agreement including, without limitation, the reasonable fees
and expenses of attorneys, accountants and expert witnesses, which shall
include, without limitation, all fees, costs and expenses of appeals.
12.    Entire Agreement. This Agreement, together with the Deferred Equity
Incentive Compensation Agreement, shall constitute the whole agreement of the
parties hereto in reference to any employment of Executive by National Beef and
in reference to any of the matters or things herein provided for or hereinabove
discussed or mentioned in reference to such employment, and all prior
agreements, promises, representations and understandings relative thereto are
hereby superseded. Without limiting the generality of the foregoing, this
Agreement, together with the Deferred Equity Incentive Compensation Agreement,
shall supersede and replace any and all existing employment agreements or
arrangements which Executive may have with National Beef or its predecessor in
interest, including, without limitation, the Prior Agreement.
13.    Assignability.
a.    In the event that National Beef shall merge or consolidate with any other
partnership, limited liability company, corporation, or business entity, or all
or substantially all of National Beef’s business or assets shall be transferred
in any manner to any other partnership, limited liability company, corporation
or business entity, then this Agreement shall automatically be assigned to the
surviving entity of such merger or consolidation or the purchaser of assets, who
shall thereupon succeed to, and be subject to, all rights, interests, duties and
obligations of, and shall thereafter be deemed for
all purposes hereof to be, National Beef hereunder.
b.    This Agreement is personal in nature and none of the parties hereto shall,
without the written consent of the other parties hereto, assign or transfer this
Agreement or any rights or obligations hereunder, except by operation of law or
pursuant to the terms of Section 13(a).
c.    Nothing expressed or implied herein is intended or shall be construed to
confer upon or give to any person, other than the parties hereto, any right,
remedy or claim under or by reason of this Agreement or of any term, covenant or
condition hereof.

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14.    Amendments; Waivers. This Agreement may be amended, modified, superseded,
canceled, renewed or extended and the terms or covenants hereof may be waived
only by written instrument executed by the parties hereto or, in the case of a
waiver, by the party waiving compliance. The failure of any party at any time or
times to require performance of any provisions hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by any party of the
breach of any term or provision contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.
15.    Notice. All notices, requests and other communications hereunder shall be
in writing and: (i) if given by telegram or telex, shall be deemed to have been
validly served, given or delivered when sent; (ii) if given by personal
delivery, shall be deemed to have been validly served, given or delivered upon
actual delivery; (iii) if sent by overnight courier service, shall be deemed to
have been validly served, given or delivered on the next business day after
delivery to such overnight courier service; (iv) if mailed, shall be deemed to
have been validly served, given or delivered three business days after deposit
in the United States mail, as registered or certified mail, with proper postage
prepaid and, in the case of (iii) or (iv) hereof, addressed to the party or
parties to be notified, at the following addresses (or such other address(es) as
a party may designate for itself by like notice); and (v) if sent by facsimile,
shall be deemed to have been validly served, given or delivered upon receipt of
facsimile confirmation;
If to National Beef:
National Beef Packing Company, LLC
c/o U.S. Premium Beef, Ltd.
12200 North Ambassador Drive
Kansas City, Missouri 64163
Attention: Steven D. Hunt
Fax: (816) 713-8810
With a copy to:
DLA Piper LLP (US)
203 North LaSalle Street
Suite 1900
Chicago, Illinois 60601
Attention: Richard W. Ashley III
Fax: (312) 368-7230
If to Executive:
Timothy M. Klein
2100 Winding Woods Drive
Liberty, Missouri 64068
Fax: (816) 713-8852
With a copy to:

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Ropes & Gray LLP
One International Place
Boston, MA 02110-2624
Attention: C. Todd Boes
Fax: (617) 951-7050
16.    Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
17.    Survivability. The rights and obligations of the parties to this
Agreement under Sections 4, 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20,
21 and all provisions of this Agreement necessary for the enforcement of those
rights and obligations, shall survive the termination of this Agreement.
18.    Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall be
deemed one Agreement.
19.    Dispute Resolution.
a.    To the fullest extent permitted by law, and subject to the provisions of
Section 4(c) and Section 7 hereof, the parties agree in the event of any alleged
breach hereof to submit the dispute for resolution by “mini-trial,” unless
either party believes that such procedure is inappropriate for the matter in
controversy. Such mini-trial shall be conducted in accordance with the Center
for Public Resources (CPR) Mini-Trial Agreement for Business Disputes before a
panel consisting of a person with full decision-making authority designated by
each party and a neutral advisor selected jointly by the parties. Limited
discovery shall be permitted as agreed by the parties. The mini-trial shall be
conducted in Kansas City, Missouri at an agreed time, place and date. Arguments
may be presented by counsel or others as each party deems appropriate. Each
party shall have no more than three hours (which may be extended by mutual
agreement) to present exhibits, testimonies, summaries of testimony and
argument. No recording of the proceeding shall be permitted. Executive may have
present and consult with other advisors as deemed appropriate. Such proceeding
shall be confidential and, unless a mutually agreeable settlement is reached, no
portion of the proceeding shall be used for any purpose in any subsequent
proceeding. If a mutually agreeable settlement is reached, the panel shall
prepare or cause to be prepared a written settlement agreement setting forth the
terms and conditions of the settlement which shall be executed by each party and
shall be enforceable by and binding upon each party. In the event a mutually
agreeable settlement is not reached through use of the mini-trial proceeding,
either party may initiate arbitration as provided in subsection (b) below. The
neutral advisor shall be disqualified as a witness, consultant or expert in any
subsequent proceeding.
b.    Subject to the provisions of Section 4(c) and Section 7 hereof, m the
event either party has determined that the mini-trial procedure is not
appropriate or if no mutually agreeable

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settlement is reached through use of the mini-trial procedure, the dispute shall
be resolved by binding arbitration in Kansas City, Missouri in accordance with
the rules of the Uniform Arbitration Act. Such arbitration shall be initiated by
either party by notifying the other party in the same manner as a summons or by
registered mail return receipt requested and requesting a panel of five
arbitrators from the American Arbitration Association. Alternate strikes shall
be made to the panel commencing with the party requesting the arbitration until
one name remains. Such individual shall be the arbitrator for the controversy.
The party requesting the arbitration shall notify the arbitrator in the same
manner as a summons or by registered mail return receipt requested who shall
hold a hearing (s) within sixty (60) days of the notice. To the fullest extent
permitted by law, reasonable discovery, including depositions, shall be
permitted. Discovery issues shall be decided by the arbitrator. Post-hearing
briefs shall be permitted. The arbitrator shall render a decision within twenty
(20) days after the conclusion of the hearing(s). Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. All fees for such arbitration will be divided equally among the
participating parties.
20.    Confidentiality.
a.    Executive acknowledges that he will obtain certain confidential
information and trade secrets (“Confidential Information”) about National Beef
during his employment, that this information was obtained by National Beef at
great expense and the information is zealously guarded by National Beef from
unauthorized disclosure. In recognition of the foregoing, the Executive will not
at any time during his employment or following his termination of employment for
any reason, disclose, use or make otherwise available to any third party any
Confidential Information relating to National Beef’s business, including, but
not limited to: its products, business methods and techniques; trade secrets,
data, specifications, developments, and research activity; marketing and sales
strategies, information and techniques; long and short term plans; business
policies; current and prospective customer lists, contacts and information;
financial, personnel and information system information; and any other
information concerning the business of National Beef, except for disclosure
necessary in the course of the Executive’s duties. Confidential Information
shall not include information that: (i) at the time of disclosure or thereafter
is (x) in the public domain or becomes generally known to the public through no
fault of Executive or (y) not treated as confidential by National Beef; (ii) was
available to the Executive on a non-confidential basis from a source other than
National Beef, provided that such source was not known by the Executive to be
bound by a confidentiality agreement with National Beef; (iii) is known to
Executive prior to receipt thereof from National Beef (or any predecessor of
National Beef); or (iv) the Executive is legally compelled to disclose. This
confidentiality provision is intended by the parties to be enforceable
regardless of whether the protected information legally constitutes “trade
secrets.”
b.    Executive agrees that, upon termination of his employment with National
Beef, whether voluntary or involuntary, he will promptly deliver to National
Beef (and will not keep in his possession or deliver to anyone other than
National Beef) all Confidential Information in his possession, including,
without limitation, all records, data, notes, reports, proposals, lists,
correspondence, business plans, and other documents or property pertaining to
the Confidential Information and all reproductions and extracts thereof.
Executive acknowledges and agrees that

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all such materials are the sole property of National Beef and that he will
certify to National Beef at the time of his termination that he has complied
with this obligation.
21.    Offset. National Beef shall not offset any amounts owing on the
compensation payable pursuant to Section 3(a) hereof, Quarterly Bonus, the
Annual Bonus, the First Long-Term Bonus, the Second Long-Term Bonus or the Third
Long-Term Bonus, absent a final judicial determination of a monetary damage
award payable by Executive to National Beef.
22.    Compliance with Section 409A of the Internal Revenue Code.
a.    The parties intend that the payments and benefits under this Agreement
shall comply with or be exempt from Section 409A of the Internal Revenue Code of
1986, as amended, and the regulations and guidance promulgated thereunder
(collectively “Code Section 409A”) and, accordingly, the Agreement shall be
interpreted and administered in conformity with such intent to the maximum
extent permitted.
b.    A termination of employment shall not be deemed to have occurred for
purposes of any provision of the Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of the Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service” within the meaning of Code Section 409A.
c.    Unless the Agreement provides a specified and objectively determinable
payment schedule to the contrary, to the extent that any payment of base salary
or other compensation is to be paid for a specified continuing period of time
beyond the date of the Executive’s separation from service in accordance with
National Beef’s payroll practices (or other similar term), the payments of such
base salary or other compensation shall be made on a monthly basis.
d.    Notwithstanding any other payment schedule provided in the Agreement to
the contrary, if the Executive is identified on the date of his separation from
service as a “specified employee” within the meaning of that term under Code
Section 409A(a)(2)(B), then the following shall apply:
(i)    With regard to any payment that constitutes nonqualified deferred
compensation subject to Code Section 409A and payable on account of a
“separation from service,” such payment shall be made on the date which is the
earlier of (A) the expiration of the six month period measured from the date of
the Executive’s “separation from service” and (B) the date of the Executive’s
death (the “Delay Period”) to the extent required under Code Section 409A. Upon
the expiration of the Delay Period, all payments delayed pursuant to this
paragraph (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid to the Executive in a
lump sum, and all remaining payments due under the Agreement shall be paid or
provided in accordance with the normal payment dates specified for them therein.

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(i)    To the extent that any benefits to be provided during the Delay Period
constitute nonqualified deferred compensation subject to Code Section 409A and
are provided on account of a “separation from service,” the Executive shall pay
the cost of such benefits during the Delay Period, and National Beef shall
reimburse the Executive for that portion of the costs that would otherwise have
been paid by National Beef during the Delay Period upon expiration of the Delay
Period, and any remaining benefits shall be reimbursed or provided by National
Beef in accordance with the procedures specified therein.
e.    For all expenses, in-kind benefits, or other reimbursements under the
Agreement that constitute nonqualified deferred compensation subject to Code
Section 409A, each of the following shall apply:
(i)    All expenses or other reimbursements shall be made on or prior to the
last day of the taxable year following the taxable year in which such expenses
were incurred by the Executive,
(ii)    Any right to reimbursement or in kind benefits shall not be subject to
liquidation or exchange for another benefit, and
(iii)    No such reimbursement, expenses eligible for reimbursement, or in-kind
benefits provided in any taxable year shall in any way affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year.
f.    Notwithstanding any other provision of the Agreement to the contrary, in
no event shall any payment under the Agreement that constitutes nonqualified
deferred compensation subject to Code Section 409A be subject to offset unless
otherwise permitted by Code Section 409A.
[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement date first
above written.
“Executive”
/s/ Timothy M. Klein    
Timothy M. Klein

“National Beef”
National Beef Packing Company, LLC
By: /s/ Bret G. Wilson____________
Its: Vice President and General Counsel