**Exhibit 10.3**

 

AMENDMENT TO EMPLOYMENT AGREEMENT FOR

TIMOTHY M. KLEIN

 

            ThisAmendment is entered into this 31st day of December 2008, by andbetween National Beef Packing Company, LLC, a Delaware limited liabilitycompany (“National Beef”) and Timothy M. Klein (“Executive”).

 

            WHEREAS,National Beef and Executive are parties to an Employment Agreement dated August6, 2003 (the “Agreement”), and the parties now desire to amend the Agreement tocomply with Section 409A of the Internal Revenue Code and the regulationsissued thereunder;

 

            NOW,THEREFORE, for good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, National Beef and Executive agree that theAgreement is amended as follows:

 

            A.        Thesecond paragraph of Section 3(c) is amended to read as follows:

 

Any Annual Bonus accruing with respect to a fiscalyear shall be payable, less normal withholdings, within sixty (60) daysfollowing the end of such fiscal year (the “Annual Bonus Date”); provided,however, if calculation of the Annual Bonus is not administratively practicabledue to events beyond the control of Executive (or his beneficiary), thenpayment shall be made during the first taxable year of Executive in which thecalculation of the amount of the payment is administratively practicable.

 

            B.         Thelast sentence of Section 3(d)(ii) is amended to read as follows:

 

Any Second Long-Term Bonus accruing under this Section3(d)(ii) shall be payable, less normal withholdings, within sixty (60) daysfollowing the end of the fiscal year ending on or about August 29, 2009 (the“Second Long-Term Bonus Date”); provided, however, if calculation of the SecondLong-Term Bonus is not administratively practicable due to events beyond thecontrol of Executive (or his beneficiary), then payment shall be made duringthe first taxable year of Executive in which the calculation of the amount ofthe payment is administratively practicable.

 

            C.         Thelast sentence of Section 3(d)(iii) is amended to read as follows:

 

Any Third Long-Term Bonus accruing under this Section3(d)(iii) shall be payable, less normal withholdings, within sixty (60) daysfollowing the end of the fiscal year ending on or about August 29, 2011 (the“Third Long-Term Bonus Date”); provided, however, if calculation of the ThirdLong-Term Bonus is not administratively practicable due to events beyond thecontrol of Executive (or his beneficiary), then payment shall be made duringthe first taxable year of Executive in which the calculation of the amount ofthe payment is administratively practicable.

 

            D.        Anew Section 22 is added to read as follows:

 

22.        Compliance with Section 409A of theInternal Revenue Code.  

 

a.         The parties intend that the payments andbenefits under this Agreement shall comply with or be exempt from Section 409Aof the Internal Revenue Code of 1986, as amended, and the regulations andguidance promulgated thereunder (collectively “Code Section 409A”) and,accordingly, the Agreement shall be interpreted and administered in conformitywith such intent to the maximum extent permitted.  

 

 

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b.         A termination of employment shall not bedeemed to have occurred for purposes of any provision of the Agreementproviding for the payment of any amounts or benefits upon or following atermination of employment unless such termination is also a “separation fromservice” within the meaning of Code Section 409A and, for purposes of any suchprovision of the Agreement, references to a “termination,” “termination ofemployment” or like terms shall mean “separation from service” within themeaning of Code Section 409A.  

 

c.         Unless the Agreement provides a specifiedand objectively determinable payment schedule to the contrary, to the extentthat any payment of base salary or other compensation is to be paid for aspecified continuing period of time beyond the date of the Executive’sseparation from service in accordance with National Beef’s payroll practices(or other similar term), the payments of such base salary or other compensationshall be made on a monthly basis.  

 

d.         Notwithstanding any other payment scheduleprovided in the Agreement to the contrary, if the Executive is identified onthe date of his separation from service as a “specified employee” within themeaning of that term under Code Section 409A(a)(2)(B), then the following shallapply:

 

(i)         With regard to any paymentthat constitutes nonqualified deferred compensation subject to Code Section409A and payable on account of a “separation from service,” such payment shallbe made on the date which is the earlier of (A) the expiration of the six monthperiod 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 extentrequired under Code Section 409A.  Upon the expiration of the Delay Period, allpayments delayed pursuant to this paragraph (whether they would have otherwisebeen 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 dueunder the Agreement shall be paid or provided in accordance with the normalpayment dates specified for them therein.

 

(ii)        To the extent that anybenefits to be provided during the Delay Period constitute nonqualifieddeferred compensation subject to Code Section 409A and are provided on accountof a “separation from service,” the Executive shall pay the cost of suchbenefits during the Delay Period, and National Beef shall reimburse theExecutive for that portion of the costs that would otherwise have been paid byNational Beef during the Delay Period upon expiration of the Delay Period, andany remaining benefits shall be reimbursed or provided by National Beef inaccordance with the procedures specified therein.

 

e.         For all expenses, in-kind benefits, or otherreimbursements under the Agreement that constitute nonqualified deferredcompensation subject to Code Section 409A, each of the following shall apply:

 

(i)         All expenses or otherreimbursements shall be made on or prior to the last day of the taxable yearfollowing the taxable year in which such expenses were incurred by theExecutive, 

 

 

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(ii)        Any right to reimbursement orin kind benefits shall not be subject to liquidation or exchange for anotherbenefit, and

 

(iii)       No such reimbursement,expenses eligible for reimbursement, or in-kind benefits provided in anytaxable 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 theAgreement to the contrary, in no event shall any payment under the Agreementthat constitutes nonqualified deferred compensation subject to Code Section409A be subject to offset unless otherwise permitted by Code Section 409A.

 

            INWITNESS WHEREOF, the parties have executed this Amendment as of the day andyear first written above. 

 

| National Beef Packing Company, LLC                                                                                                                                                                                                                                                                                    |
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| By:       /s/ Steven D. Hunt                                                                                                           |
| Title:     Chairman                                              |
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| Timothy M. Klein                                                                                                                                                                                                                                                                                                      |
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|           /s/Timothy M. Klein                                                                                                          |

 

 

 

 

 

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