exv10w3






EXHIBIT 10.3




Professional Veterinary Products, Ltd.

Supplemental Executive Retirement Plan



The Professional Veterinary Products, Ltd. Supplemental Executive Retirement Plan (the “Plan”),
established January 1, 2003, and as amended and restated effective January 1, 2006, by Professional
Veterinary Products, Ltd. (the “Company”), to provide supplemental retirement benefits to key
employees of the Company, is hereby further amended and restated effective January 1, 2009.




Section 1. Definitions



The following terms shall have the meanings set forth below:




     1.1 “Actuarial Equivalent” means the equality in value of the aggregate amount of benefit
payments expected to be received under different forms or at different times computed on the basis
of the mortality assumptions of the 94 GAM and an interest rate equal to eight percent (8%) per
annum. The calculation of any actuarial equivalent benefit amount required by the Plan shall be
made under the foregoing assumptions by the actuary appointed by the Committee, and such
calculation shall be final and conclusive.



     1.2 “Board” means the Board of Directors of the Company.



     1.3 “Change in Control” means a qualifying change in the ownership of the Company’s capital
stock or its assets, whether by reason of purchase, merger or otherwise, as follows:




	 	(a)	 	In the case of a change in ownership involving the Company’s
capital stock, the acquisition by a person, or more than one person acting as
a group as defined in Income Tax Regulation § 1.409A-3(i)(5)(v)(B), of capital
stock of the Company that, together with the stock held at that time by such
person or group, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the capital stock of the Company;
provided, however, the acquisition of additional capital stock
by any one person, or more than one person acting as a group, who is
considered as owning more than fifty percent (50%) of the total fair market
value or total voting power of the Company, shall not constitute or result in
a qualifying change in ownership of the Company’s capital stock as described
in this Section 1.3(a); provided, further, an increase in the
percentage of capital stock owned by any one person, or persons acting as a
group as a result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of capital stock for




 









 






	 	 	 	purposes of this Section 1.3(a). A transaction involving the transfer of
the Company’s capital stock shall be treated as resulting in a qualifying
change in ownership under this Section 1.3(a) only if, after the transfer
of stock, stock in the Company remains outstanding after the transaction.
	 
	 	(b)	 	In the case of a change in ownership involving the Company’s
assets, the acquisition of assets of the Company within a 12 month period
ending on the date of the most recent asset acquisition, by a person, or more
than one person acting as a group as defined in Income Tax Regulation §
1.409A-3(i)(5)(v)(B), that have a total gross fair market value equal to
eighty percent (80%) or more of the total fair market value of all of the
assets of the Company, as determined without regard to any liabilities
associated with the assets being acquired or the total assets of the Company;
provided, however, a sale or transfer of Company assets to:
(1) a shareholder of the Company in exchange for its stock; (2) an entity,
fifty percent (50%) or more of the total value or voting power of which is
owned, directly or indirectly by the Company; (3) any person, or more than one
person acting as a group, that owns, directly or indirectly, fifty percent
(50%) or more of the total value or voting power of the outstanding capital
stock of the Company; or (4) an entity, at least fifty percent (50%) of the
total value or voting power of which is owned, directly or indirectly, by a
person described in the preceding clause (3), shall not constitute or result
in a qualifying change in ownership of the assets of the Company as described
in this Section 1.3(b).





     1.4 “Committee” means the Executive Committee of the Board.



     1.5 “Monthly Benefit” means a benefit payable each month to a Participant or the Participant’s
designated beneficiary as determined under the provisions of this Plan.



     1.6 “Monthly Pay” means the monthly average of the Participant’s base salary that is paid by
the Company for the final consecutive 36-month period of employment with the Company. Bonuses or
incentive compensation, fringe benefits, deferred compensation, welfare plan benefits and noncash
remuneration shall not be considered as part of the Participant’s base salary for this purpose.
Any salary reduction contributions by the Participant to a Section 401(k) plan or Section 125 plan
maintained by the Company shall be included in the Participant’s base salary.



     1.7 “Normal Retirement Date” means the Social Security Full Retirement Age.



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     1.8 “Participant” means a highly compensated or management employee designated by the Board as
being eligible to participate in the Plan. References herein to the “CEO-Participant” shall mean
and only include the Participant who served as the Chief Executive Officer of the Company on
January 1, 2006.



     1.9 “Permanent Disability” or “Permanently Disabled” shall be any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve months. A Participant shall be deemed to be
Permanently Disabled if determined to be totally disabled by the Social Security Administration and
entitled to receive disability benefits under the federal Social Security Act.



     1.10 “Plan” means this Supplemental Executive Retirement Plan as amended from time to time.



     1.11 “Plan Year” means the calendar year.



     1.12 “Separation from Service” or “Separate from Service” means the death, retirement or other
termination of the Participant’s employment with the Company and any affiliate of the Company;
provided, however, an employment relationship with the Company is not terminated
when the Participant is on military leave, sick leave or an approved leave of absence if the period
of such leave does not exceed six (6) months or, if longer, the period that the Participant retains
a right to reemployment with the Company under applicable law or any employment contract. For this
purpose, a Participant shall be deemed to have a Separation from Service on the date that the level
of services the Participant would perform after such date would permanently decrease to a level
that is less than fifty percent (50%) of the average level of bona fide services performed by the
Participant for the Company during the immediately preceding thirty-six (36) month period.



     1.13 “Years of Service” means the 12-consecutive month period commencing on the Participant’s
employment commencement date with the Company and each 12-month anniversary thereof in which the
Participant remains in continuous service as an employee of the Company. Continuous service as an
employee of the Company shall not be considered interrupted in the case of sick leave, military
leave or any other leave of absence approved by the Board provided such leave does not exceed
ninety (90) days unless employment upon the expiration of such leave is guaranteed by contract or
statute.



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Section 2. Participation



The Board of Directors shall designate from time to time the key employees who shall be added as
Participants in this Plan. Participation of a designated key employee shall be effective on the
January 1 or other date determined by the Board of Directors following such designation.




Section 3. Administration



The Committee shall administer the Plan and shall have all discretionary authority as may be
necessary or appropriate to administer the Plan.




     3.1 Actions of Committee. The Committee shall act by a majority of its members at the time in
office, and such action may be taken either by a vote at a meeting or in writing without a meeting.
The Committee shall authorize any one or more of its members to execute any document or documents
on behalf of the Committee. The Committee, by written instrument signed by it, may designate other
persons to carry out any of its duties and responsibilities. However, the duties and
responsibilities of such position shall be carried out only by appropriate officers and employees
of the Company.



     3.2 Authority of Committee. The Committee shall exercise such discretionary authority and
responsibility as it deems appropriate in order to administer the Plan and to comply with the
Internal Revenue Code and other applicable laws, including any documents and notifications required
to be given to Participants and beneficiaries.




	 	(a)	 	The Committee shall, in carrying out the Committee’s
administration hereunder, have absolute discretion, and any decision by the
Committee shall be final and bind all parties to the Plan. The Committee’s
discretionary duties and powers shall include, but not be limited to the
following:






	 	i.	 	To construe and interpret the Plan, decide
all questions of eligibility and determine the amount, manner and
time of payment of any benefits hereunder;
	 
	 	ii.	 	To prescribe procedures to be followed by
Participants or beneficiaries filing applications for benefits and to
establish claims procedures for the Plan;




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	 	iii.	 	To prepare and distribute information
explaining the Plan;
	 
	 	iv.	 	To receive from the Participants such
information as shall be necessary for the proper administration of
the Plan;
	 
	 	v.	 	To receive, review and keep on file (as it
deems convenient or proper) reports of the financial condition, and
of the receipts and disbursements; and
	 
	 	vi.	 	To appoint advisors, claims administrators
and legal counsel, to render advice with regard to any responsibility
of the Committee under the Plan or to assist in the administration of
the Plan.





     3.3 Adoption of Rules. The Committee may adopt such rules as it deems necessary, desirable or
appropriate in the administration of the Plan, including the establishment and administration of
the Plan’s claims procedures.



Section 4. Benefits




     4.1 Retirement Benefit. For each Participant other than the CEO-Participant, upon Separation
from Service at or after the Participant’s Normal Retirement Date, the Participant shall receive a
Monthly Benefit commencing on the first day of the month following the Participant’s Normal
Retirement Date and payable for life, with a period of 10 years certain, equal to 35% of the
Participant’s Monthly Pay. For the CEO-Participant, upon Separation from Service at or after his
Normal Retirement Date, the CEO-Participant shall receive a Monthly Benefit commencing on the first
day of the month following the CEO-Participant’s Normal Retirement Date and payable for life, with
a period of 15 years certain, equal to 60% of his Monthly Pay If a Participant continues
employment and does not Separate from Service until after the Participant’s Normal Retirement Date:
a) the provisions of Section 4.3 herein shall apply and b) the period of 10 years certain (15
years certain in the case of the CEO-Participant) shall be reduced by the number of years which
Participant works for the Company after his Normal Retirement Date. Thus, for example purposes
only, if a Participant other than the CEO-Participant works 4 years after the Normal Retirement
Date, the Monthly Benefit calculated according to Section 4.3 shall commence on the first day of
the month following Participant’s actual retirement date and payable for life, with a period of 6
years certain. If the Participant has less than 10 Years of Service upon his Separation from
Service at or after the Participant’s Normal Retirement Date, the Monthly Benefit will be reduced
by 10% for each Year of Service less than 10.



     4.2 Separation from Service Prior to Normal Retirement Date. A Participant who Separates from
Service at age 55 or later with at least 15 Years



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of Service, but prior to the Participant’s Normal Retirement Date, shall receive an Early
Retirement Benefit. The Early Retirement Benefit shall be a Monthly Benefit commencing on the
first day of the month following the Participant’s Separation from Service and payable for life,
with a period of 10 years certain, equal to 35% of the Participant’s Monthly Pay multiplied by a
fraction, the numerator of which shall be the actual Years of Service (including fractional years)
with the Company and denominator of which shall be the number of Years of Service (including
fractional years) that the Participant would have completed had he remained in continuous
employment with the Company through the Participant’s Normal Retirement Date; provided,
however, the Early Retirement Benefit of the CEO-Participant shall be a Monthly Benefit
payable for life, with a period of 15 years certain, equal to 60% of the CEO-Participant’s Monthly
Pay multiplied by a fraction, the numerator of which shall be the actual Years of Service
(including fractional years) with the Company and denominator of which shall be the number of Years
of Service (including fractional years) that the CEO-Participant would have completed had he
remained in continuous employment with the Company through his Normal Retirement Date. The Monthly
Benefit payable as the Early Retirement Benefit will be further reduced to reflect the early
payment of the benefit prior to the Normal Retirement Date so that the monthly payment is the
Actuarial Equivalent of the monthly payment that would be paid at the Participant’s Normal
Retirement Date.


Except as provided in Sections 4.4 or 4.5, a Participant who Separates from Service before
attaining age 55 and completing 15 Years of Service shall not be entitled to any benefits under
this Plan.




     4.3 Separation from Service After Normal Retirement Date. In the event a Participant
Separates from Service after the Participant’s Normal Retirement Date, the Participant’s Monthly
Benefit shall be actuarially increased to the Actuarial Equivalent of the Monthly Benefit
commencing on the Participant’s Normal Retirement Date.



     4.4 Disability Benefits. A Participant who becomes Permanently Disabled prior to his
Separation from Service and has at least 5 Years of Service with the Company (“Disabled
Participant”), shall receive a Monthly Benefit commencing on the first day of the month following
the Participant’s Normal Retirement Date and payable for life, with a period of 10 years certain,
equal to 35% of the Participant’s Monthly Pay, as determined on the date of the Participant’s
Permanent Disability, multiplied by a fraction, the numerator of which shall be the Participant’s
actual Years of Service (including fractional years) with the Company at the date of the Permanent
Disability and the denominator of which shall be the number of Years of Service (including
fractional years) that the Participant would have completed had he remained in continuous
employment with the Company through the Participant’s Normal Retirement Date; provided,
however, the disability benefit for the CEO-Participant shall be a Monthly Benefit
commencing on the first day of the month following the



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CEO-Participant’s Normal Retirement Date and payable for life, with a period of 15 years
certain, equal to 60% of the CEO-Participant’s Monthly Pay, as determined on the date of the
CEO-Participant’s Permanent Disability, multiplied by a fraction, the numerator of which shall be
the CEO-Participant’s actual Years of Service (including fractional years) with the Company at the
date of the Permanent Disability and the denominator of which shall be the number of Years of
Service (including fractional years) that the CEO-Participant would have completed had he remained
in continuous employment with the Company through the CEO-Participant’s Normal Retirement Date. If
a Participant continues in employment with the Company after the Participant’s Normal Retirement
Date and becomes Permanently Disabled after the Normal Retirement Date but before his Separation
from Service, the Monthly Benefit shall begin the first day of the month following the date
Participant became Permanently Disabled, and the period of 10 years certain (15 years certain in
the case of the CEO-Participant) shall be reduced by the number of years which Participant worked
for the Company beyond the Normal Retirement Date until he/she became Permanently Disabled. Thus,
for example purposes only, if a Participant (other than the CEO-Participant) becomes Permanently
Disabled while fully employed 3 years after his Normal Retirement Date, he shall receive a Monthly
Benefit beginning the first day of the month following the date he became Permanently Disabled and
payable for life, with a period of 7 years certain.



     4.5 Benefit Following a Change In Control. If a Participant’s Separation from Service (for
reasons other than death, Permanent Disability, or Normal or Early Retirement) occurs within two
(2) years following a Change in Control, the Company shall pay to the Participant in a single
lump-sum payment within 75 days of such termination, an amount equal to the Actuarial Equivalent
value of the Monthly Benefit that would have been paid at the Participant’s Normal Retirement Date,
using the Participant’s Monthly Pay at the time of termination, multiplied by a fraction, the
numerator of which shall be the actual Years of Service (including fractional years) with the
Company and the denominator of which shall be the number of Years of Service (including fractional
years) that the Participant would have completed had he remained in continuous employment with the
Company through the Participant’s Normal Retirement Date.



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     4.6 Survivor Benefit.




	 	(a)	 	In the event a Participant dies while receiving benefits
under the Plan and prior to receiving 120 monthly payments (180 monthly
payments in the case of the CEO-Participant), the Monthly Benefit shall be
continued to the Participant’s named beneficiary for the balance of the 120
months (180 months in the case of the CEO-Participant) remaining to be paid at
the time of the Participant’s death; provided, however, the 120 month term
certain period (180 months in the case of the CEO-Participant) shall be
reduced as provided in Section 4.1 if the Participant did not Separate from
Service before his Normal Retirement Date.
	 
	 	(b)	 	If a Participant dies while employed by the Company and prior
to the commencement of the payment of benefits under the Plan, the
Participant’s named beneficiary shall receive a Monthly Benefit equal to 35%
of the Participant’s Monthly Pay; provided, however, if the deceased
Participant is the CEO-Participant, the Monthly Benefit payable to such
CEO-Participant’s named beneficiary shall be equal to 60% of the
CEO-Participant’s Monthly Pay. The Monthly Benefit shall commence within 75
days of the Participant’s death and be payable for 120 months (180 months in
the case of the CEO-Participant); provided, however, the 120 month term
certain period (180 months in the case of the CEO-Participant) shall be
reduced as provided in Section 4.1 if the Participant’s death should occur
before his Normal Retirement Date.
	 
	 	(c)	 	The Participant may designate a beneficiary or beneficiaries
to receive any benefits payable under this Plan after the death of the
Participant. Such designation, to be effective, shall be in writing, signed
by the Participant and delivered to the Committee before the Participant’s
death. If a Participant fails to name a beneficiary, or if all named
beneficiaries predecease the Participant, then the Participant’s named
beneficiary shall be deemed to be the person or persons surviving Participant
in the first of the following classes in which there is a survivor, share and
share alike:






	 	(i)	 	The surviving spouse;
	 
	 	(ii)	 	The Participant’s children, except that if
any of the children predecease the Participant but leave issue
surviving, then such issue shall take by right of




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	 	 	 	representation the share their parent would have taken if living;
	 
	 	(iii)	 	The personal representative (executor or
administrator) of the Participant’s estate.






	 	(d)	 	If the Participant’s beneficiary should die after the
Participant but before the complete distribution of the death benefit that
such beneficiary is entitled pursuant to the Plan, the balance of such benefit
shall be paid to any contingent beneficiary designated by the Participant in
the beneficiary designation on file with the Committee or, in the absence of
the designation of a contingent beneficiary, to the estate of the primary
beneficiary.





     4.7 Payment of Benefits. Except as provided in Section 4.5, payment of benefits shall be in
equal monthly installments commencing on the first day of the month following the date of payment
specified by the Plan. If a Participant does not satisfy the conditions of this Section 4, no
benefit shall be payable on the Participant’s account.



     4.8 Tax Withholding. The benefit payments under this Plan shall be subject to all tax payment
and withholding requirements of federal, state and local laws, and the Company shall withhold from
any benefit payment and remit to the proper governmental agency, all income, FICA or other taxes
that are required to be withheld.



Section 5. Funding


This Plan shall be unfunded, except as specifically provided herein. The Participants in this Plan
shall be no more than general, unsecured creditors of the Company with regard to the benefits
payable pursuant to this Plan. The Company may establish a trust to provide the benefits under
this Plan. Such trust shall be subject to all of the provisions of this Plan and shall be the
property of the Company, until distributed, and subject to the Company’s general, unsecured
creditors and judgment creditors. Such trust shall not be deemed to be collateral security for
fulfilling any obligation of the Company to the Participants. The Company may also purchase
insurance to fund the benefits provided by the Plan. Such insurance shall be held by and be an
asset of the Company (or a trust described herein) and the Participant shall have no rights with
respect to such insurance.




Section 6. Claims Procedure



A Participant or Beneficiary who has not received benefits under the Plan that such claimant
believes should be paid shall make a claim for such benefits in


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accordance with the procedures of this Section. Upon receipt of a claim, the Committee shall
respond within ninety (90) days after receiving the claim. The Committee may extend the reply
period for an additional ninety (90) days for reasonable cause.



Any Participant or Beneficiary whose claim for benefits under the Plan has been denied by the
Committee shall receive a written notice setting forth the specific reasons for such denial, a
specific reference to Plan provisions on which such denial is based, 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, an explanation of the Plan’s claims
review procedure and the time limits applicable to such procedure, and a statement of the
claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income
Security Act of 1974 (‘ERISA’). Thereafter, upon the filing of a written request by such person no
later than sixty (60) days after receipt of the written notification of denial, any decision
resulting in a denial of a claim may be appealed to the Committee for a full review. In
conjunction with the appeal, a claimant or his duly authorized representative may review pertinent
documents and may submit written comments, documents, records and other information relating to the
claimant’s claim. The Committee will also provide to the claimant, upon request and free of
charge, reasonable access to, and copies of all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the claim for benefits.



A decision shall be made by the Committee not later than sixty (60) days after the Plan’s receipt
of a request for review unless the Committee notifies the claimant, in writing, of special
circumstances requiring an additional amount of time for making the decision, but not to exceed
sixty (60) additional days. The notice of any extension shall set forth the special circumstances
and the date by which the Committee expects to render its decision. The decision by the Committee
on review shall be in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific references to the pertinent Plan
provisions on which the decision is based. The decision shall also include a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claims for benefits and a statement of the claimant’s right to bring
a civil action under Section 502(a) of ERISA.




Section 7. Miscellaneous



     7.1 Nonalienation of Benefits. No benefit payable under this Plan shall be subject at any
time and in any manner, to alienation, sale, transfer, assignment, pledge or encumbrance of any
kind. No benefit provided by this Plan 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


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Participant or any other person, nor be transferable by operation of law in the event of the
Participant’s or any other person’s bankruptcy or insolvency.




     7.2 Amendment and Termination.



     (a) Amendment. The Board of the Company may at any time amend the Plan in whole or
in part; provided, however, that no amendment shall adversely affect the right of a
Participant or a Participant’s named beneficiary to a Monthly Benefit to which a Participant was or
would have been entitled if the Participant’s employment was terminated immediately prior to the
Plan amendment or termination; provided, further, that no amendment shall change or
accelerate the payment date(s) for a Monthly Benefit except as may be permitted under Section
409A of the Internal Revenue Code and the Income Tax Regulations and Treasury guidance promulgated
thereunder. The Plan may be amended at any time as may be necessary or appropriate to reform the
provisions of the Plan to comply with the applicable requirements of Section 409A of the Internal
Revenue Code or the Income Tax Regulations and Treasury guidance thereunder to prevent the Plan
Benefit from being includable in any Participant’s gross income before being paid pursuant to the
Plan or otherwise subject to additional taxes and interest penalties under Section 409A of the
Internal Revenue Code.



     (b) Termination of Plan. The Board of the Company may at any time terminate the Plan
in its discretion provided that such termination is not made by the Board proximate to a downturn
in the financial health of the Company. The Board of the Company may also terminate the Plan upon
the occurrence of an event which permits a termination of the Plan under Section 409A of the
Internal Revenue Code and the Income Tax Regulations promulgated thereunder, provided all
conditions and requirements under said Section 409A and the Income Tax Regulations for such
termination are satisfied, including the termination and liquidation of other nonqualified deferred
compensation arrangements maintained by the Company as may be required by the Income Tax
Regulations for such termination. Upon any such termination, all Participants under the Plan shall
be paid an amount equal to the Actuarial Equivalent value of the Monthly Benefit that would have
been paid at the Participant’s Normal Retirement Date, using the Participant’s Monthly Pay at the
time of termination, multiplied by a fraction, the numerator of which shall be the actual Years of
Service (including fractional years) with the Company and the denominator of which shall be the
number of Years of Service (including fractional years) that the Participant would have completed
had he remained in continuous employment with the Company through the Participant’s Normal
Retirement Date. Such amount shall be paid in a single lump sum payment within such period of time
as may be required under Section 409A of the Internal Revenue Code and the Treasury Regulations
thereto.



     7.3 Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed
to constitute a contract of employment between the Company and any Participant, and nothing in this
Plan shall be deemed to give a



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Participant the right to be retained in the service of the Company or to interfere with the right
of the Company to discipline or discharge the Participant at any time.



     7.4 Participation in Other Plans. Nothing contained in this Plan shall be construed to alter,
abridge, or in any manner affect the rights and privileges of a Participant to participate in and
be covered by any other retirement or welfare benefit plan which the Company now or hereafter
sponsors: provided, however, in no event shall any amounts deferred under the Plan
be considered as compensation for purposes of determining benefits under the Company’s other
employee benefit plans unless the terms of such Plan expressly include such deferrals or benefits
as compensation.



     7.5 Incompetent Payee. In the event that it shall be found upon evidence satisfactory to the
Committee that any Participant or beneficiary to whom a benefit is payable under this Plan is
unable to care for his or her affairs because of illness or accident, any payment due (unless prior
claim therefor shall have been made by a duly authorized guardian or other legal representative)
may be paid, upon appropriate indemnification of the Company and the Committee, to the spouse or
other person deemed by the Committee to have incurred expense for such Participant or beneficiary.
Any such payment shall be a payment for the account of the Participant or beneficiary and shall be
a complete discharge of any liability of the Company therefor.



     7.6 Applicable Law. The Plan and all rights hereunder shall be governed by the laws of
Nebraska.



	 	 	 	 	 
	 	Professional Veterinary Products, Ltd.

 	 
	 	By:  	/s/ Steve Price
 	 
	 	 	President 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/ Tom Latta, D.V.M.
 	 
	 	 	Secretary 	 
	 	 	 	 



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