Document:

Exhibit 10.2 - Third Amendment

THIRD AMENDMENT TO AMENDED AND RESTATED 
CREDIT AGREEMENT AND LIMITED CONSENT
This THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND LIMITED CONSENT (this “Amendment”) is dated as of December 5, 2011, and is made with respect to that certain Amended and Restated Credit Agreement, dated as of June 4, 2010 (as amended prior to the date hereof, the “Credit Agreement”; unless otherwise defined herein, capitalized terms used herein shall have the meanings given to them in the Credit Agreement), by and among NATIONAL BEEF PACKING COMPANY, LLC, a Delaware limited liability company (the “Existing Borrower”), CERTAIN OF ITS SUBSIDIARIES, as Loan Parties, the LENDERS PARTY THERETO (each individually, a “Lender” and collectively, the “Lenders”), and COBANK, ACB, as agent for the Lenders, the Issuers and the Swing Line Lender (in such capacity, the “Agent”).
RECITALS:
WHEREAS, the Existing Borrower, the Lenders and the Agent are parties to the Credit Agreement;
WHEREAS, the Existing Borrower desires to redeem a portion of its outstanding Equity Interests; 
WHEREAS, the Existing Equity Holders have entered into that certain Membership Interest Purchase Agreement, dated as of December 5, 2011 (the “Leucadia Purchase Agreement”), among Leucadia National Corporation, a New York corporation (“Leucadia”), the Existing Borrower and the Existing Equity Holders, pursuant to which, among other things, Leucadia will, on the Third Amendment Effective Date (as defined in Section 5 below), purchase from the Existing Equity Holders not less than 75% of the issued and outstanding membership interests of the Existing Borrower and promptly after such purchase by Leucadia an entity controlled by Timothy M. Klein will purchase membership interests in the Existing Borrower from Leucadia (the “Leucadia Transaction”);
WHEREAS, (i) prior to the consummation of the Leucadia Transaction, the Existing Borrower desires to (a) form a new wholly-owned subsidiary (“PA Newco”), (b) contribute certain assets relating to its business operations in Pennsylvania into PA Newco, and (c) cause PA Newco to become a party to the Credit Agreement as a Borrower, and (ii) after the consummation of the Leucadia Transaction, the Existing Borrower will distribute all of the equity interests of PA Newco to the members of the Existing Borrower; and 
WHEREAS, the Existing Borrower has requested that the Lenders (i) consent to the Leucadia Transaction and agree that no Change of Control shall be triggered as a result of the Leucadia Transaction because of the amendments set forth below, (ii) agree to the addition of PA Newco as a “Borrower” and (iii) agree to amend the Credit Agreement in certain respects as provided herein, and the Lenders are willing to do so subject to the applicable conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and intending to be legally bound, 

and incorporating the above-defined terms herein, the parties hereto agree as follows:
1.Definitions.  Unless otherwise defined herein, terms defined in the Credit Agreement shall have their defined meanings when used herein.
2.Amendments to the Credit Agreement.  Subject to the satisfaction or waiver in writing of each condition precedent set forth in Section 5 of this Amendment, and in reliance on the representations, warranties, covenants and agreements contained herein, the Credit Agreement shall be amended in the manner provided in this Section 2. 
(a)    Cover Page.  The cover page attached to the Credit Agreement is hereby amended by replacing “CERTAIN OF ITS SUBSIDIARIES,” with “NATIONAL BEEF PENNSYLVANIA, LLC, CERTAIN OF THEIR RESPECTIVE SUBSIDIARIES,”.
(b)    Introductory Paragraph.  The introductory paragraph of the Credit Agreement shall be and it hereby is amended in its entirety to read as follows:
THIS AMENDED AND RESTATED CREDIT AGREEMENT (as amended, amended and restated, supplemented, renewed or otherwise modified from time to time, this “Agreement”) is made as of June 4, 2010, by and between NATIONAL BEEF PACKING COMPANY, LLC, a Delaware limited liability company (“National Beef”), NATIONAL BEEF PENNSYLVANIA, LLC, a Delaware limited liability company (“PA Newco” and together with National Beef and their successors as permitted herein, collectively and each individually the “Borrower”), certain of their respective Subsidiaries, as Subsidiary Loan Parties, the lenders from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH and U.S. BANK NATIONAL ASSOCIATION, as Documentation Agents, BANK OF AMERICA, N.A. and BANK OF MONTREAL, as Syndication Agents, and COBANK, ACB, an agricultural credit bank (“CoBank”), as Lead Arranger, Sole Bookrunner, Swing Line Lender and administrative agent for the Lenders, the Issuers and the Swing Line Lender hereunder (in its capacity as administrative agent, together with its successors and assigns in such capacity, the “Agent”).
(c)    Amended Definitions.  The following definitions in Section 1.2 of the Credit Agreement shall be and they hereby are amended in their entirety to read as follows:
“$150 Million Basket” has the meaning set forth in Section 10.10 hereof as in effect immediately prior to the Third Amendment Effective Date.  
“Borrower” has the meaning set forth in the introduction hereof.  References in this Agreement to the Borrower and its Subsidiaries on a consolidated basis or covenants regarding the Borrower that are tested on a consolidated basis, shall always refer to National Beef, PA Newco and their Subsidiaries, taken as a whole.
“Equity Distribution” means any dividend or other distribution (whether in 

cash, securities or other property) with respect to any membership interest or other equity interest in the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such membership or other equity interest or of any option, warrant or other right to acquire any such membership or other equity interest; provided, that no redemption, conversion or reclassification of any equity interest in connection with the Leucadia Transaction or the Permitted PA Restructuring shall be deemed to be an Equity Distribution for purposes of this Agreement.
“Existing Equity Holders” means, collectively, (a) prior to the consummation of the KleinCos Equity Distribution and the Leucadia Transaction, US Premium Beef, TKK Investments, LLC, TMKCo, LLC and NBPCo Holdings, and (b) from and after the consummation of the Leucadia Transaction and the PA Newco Distribution, with respect to National Beef and PA Newco, respectively, Leucadia and any Subsidiary wholly-owned, directly or indirectly, by Leucadia, TMK Holdings, US Premium Beef and NBPCo Holdings.
“Fiscal Year” means the Borrower’s fiscal year, which shall be the twelve month period ending on the last Saturday in December, 2012 and each year thereafter; references to a Fiscal Year with a number corresponding to any calendar year (e.g., the “Fiscal Year 2012”) refer to the Fiscal Year ending on the last Saturday in December of such calendar year; provided, however, that (a) “Fiscal Year” as it refers to Fiscal Year 2011 or earlier shall mean the twelve month period ending on the last Saturday in August of such year and (b) for purposes of determining compliance with Section 10.6(d) and Section 10.12, during the period from and after the last Saturday in August, 2011 to and including the last Saturday in December, 2011 the amounts permitted with respect to such Section shall be an amount equal to one-third (1/3) of the amount otherwise specified in such Sections.
“Fixed Charge Coverage Ratio” means , as of the end of any fiscal quarter, the ratio of (a) the result of (x) EBITDA during the eight consecutive fiscal quarters then ended, less (y) Net Capital Expenditures during such eight fiscal quarter period, plus (z) the Suppressed Availability Amount as of the last day of the fiscal quarter then ended, to (b) the sum of (i) the aggregate amount of all scheduled payments of principal of and interest on Funded Debt during such eight fiscal quarter period, (ii) Borrower’s consolidated cash income taxes incurred and paid during such eight fiscal quarter period and (iii) Equity Distributions made by Borrower during such eight fiscal quarter period (other than (x) the KleinCos Equity Distribution, (y) Equity Distributions permitted under the $150 Million Basket, and (z) up to $8,000,000 in Equity Distributions made by Borrower pursuant to the terms of the Consent to Sixth Amended and Restated Credit Agreement dated May 27, 2010).
“Funded Debt” means, for any date of determination, the then outstanding principal amount of all of the Borrower’s consolidated interest-bearing Indebtedness 

(including without limitation, capitalized leases) plus the then undrawn amount of all outstanding letters of credit (including without limitation, the LCs); provided, however, that (a) LCs or indemnity obligations issued to support other Indebtedness shall not be included in Funded Debt to the extent that such other Indebtedness is, itself, included in Funded Debt; (b) the Borrower’s membership interests subject to redemption rights shall not be included in Funded Debt; and (c) the Borrower’s obligations under deferred compensation plans shall not be included in Funded Debt. 
“Total Liabilities” means, as of any date of determination, all obligations of Borrower and its consolidated Subsidiaries required by GAAP to be classified as liabilities upon the balance sheet of such persons, including the aggregate amount of all Indebtedness, liabilities (including tax and other proper accruals) and reserves of such persons.  For the avoidance of doubt, the conversion or reclassification of equity interests in connection with the consummation of the Leucadia Transaction (howsoever described) including as a result of the exercise of any put rights shall not be deemed to be part of Total Liabilities for purposes of this Agreement.
(d)    New Definitions.  The following definitions shall be and they hereby are added to Section 1.2 of the Credit Agreement in alphabetical order:
“Fiscal Quarter” or “fiscal quarter” means each three month fiscal period of the Borrower ending on the last Saturday in March, June, September and December of each year.
“KleinCos Equity Distributions” means the Equity Distributions required to be made on the Third Amendment Effective Date as a result of the exercise of certain put rights of TKK Investments, LLC and TMKCo, LLC, each a Missouri limited liability company controlled by Timothy M. Klein, in an aggregate amount not to exceed $80,000,000.
“Leucadia” means Leucadia National Corporation, a New York corporation, and its successors.
“Leucadia Purchase Agreement” means that certain Membership Interest Purchase Agreement, dated as of December 5, 2011, among, inter alios, Leucadia, National Beef and US Premium Beef, as the same may be amended, supplemented or otherwise modified from time to time; provided any such amendment, supplement or modification that would reasonably be expected to be adverse to the interests of the Lenders in any material respect shall have been approved in writing by the Agent in its reasonable discretion.
“Leucadia Transaction” means the transactions contemplated by the Leucadia Purchase Agreement.
“National Beef” has the meaning set forth in the introduction hereof.

“NB LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of National Beef, dated on or about Third Amendment Effective Date, 2011, as the same may be amended, amended and restated, supplemented, renewed or otherwise modified from time to time in accordance with Section 10.11.
“NBPCo Holdings” means NBPCo Holdings, LLC, a South Dakota limited liability company, and its successors.
“PA LLC Agreement” means the Limited Liability Company Agreement of PA Newco, dated on or about November 29, 2011, as the same may be amended, amended and restated, supplemented, renewed or otherwise modified from time to time in accordance with Section 10.11.
“PA Newco” has the meaning set forth in the introduction hereof.
“PA Newco Distribution” means the distribution by National Beef of the equity interests of PA Newco to the members of National Beef, in each case, in accordance with the terms of the PA Restructure Documents.
“PA Restructure Documents” means, collectively,  the PA LLC Agreement and the related documents executed in connection with the formation of PA Newco and distribution of the equity interests of PA Newco as contemplated by the Leucadia Purchase Agreement.
“Permitted PA Restructuring” means, in connection with the Leucadia Transaction, (a) the formation of PA Newco by National Beef, (b) the contribution by National Beef of certain assets relating to its business operations in Pennsylvania into PA Newco, and (c) the PA Newco Distribution.
“Third Amendment Effective Date” means the date on which all of the conditions to the effectiveness of the Third Amendment To Amended And Restated Credit Agreement and Limited Consent have been satisfied or have otherwise been waived by the Lenders (or at least the required percentage thereof).
“TMK Holdings” means TMK Holdings, LLC, a Missouri limited liability company, and its successors.
(e)    Financial Statements.  Clauses (b) and (c) of Section 9.1 of the Credit Agreement shall be and they hereby are amended and restated in their entirety to read as follows:
(b)    (1) as soon as practicable and in any event within thirty (30) days after the end of the period of four fiscal months ending on the last Saturday in December 2011, combined and consolidated statements of income and retained earnings for such period; a combined and consolidated balance sheet as of the end of such period and copies of statements of cash flow and (2) as soon as practicable and in any event within thirty (30) days after the end of the first fiscal quarter of 

2012 and each fiscal quarter thereafter (i) combined and consolidated statements of income and retained earnings for such fiscal quarter and for the period from the beginning of the then current Fiscal Year to the end of such fiscal quarter, and a combined and consolidated balance sheet as of the end of such fiscal quarter, setting forth, with respect to the first fiscal quarter of 2012 and each fiscal quarter thereafter, in each case in comparative form, figures for the corresponding periods in the preceding Fiscal Year, all in reasonable detail and certified as accurate by the chief financial or other authorized officer, subject to changes resulting from normal year-end adjustments, (ii) copies of statements of cash flow, and (iii) a compliance certificate of the chief financial or other authorized officer of the Borrower in substantially the form attached as Exhibit 9A (the “Compliance Certificate”);
(c)    as soon as practicable and in any event within one hundred twenty (120) days after the end of each Fiscal Year, (i) audited combined and consolidated statements of income, retained earnings and changes in the financial condition for each year, and a combined and consolidated balance sheet for such year, setting forth, with respect to Fiscal Year 2012 and each Fiscal Year thereafter, in each case, in comparative form, corresponding figures as of the end of the preceding Fiscal Year, all in reasonable detail and satisfactory in scope to the Agent and certified to the Borrower by KPMG LLP or such other independent public accountants as are selected by the Borrower and satisfactory to the Agent, whose opinion shall be in scope and substance satisfactory to the Agent, (ii) a true and complete copy of the management letter from KPMG LLP or such other independent public accountants as are selected by the Borrower and satisfactory to the Agent, in connection with such audited financial statements; and (iii) a Compliance Certificate; and
(f)    Consolidations, Mergers or Acquisitions.  Section 10.2 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:
10.2    Consolidations, Mergers or Acquisitions.
None of the Borrower nor any of its Subsidiaries shall recapitalize or consolidate with, merge with, or otherwise acquire all or substantially all of the assets or properties of any other Person, other than the Permitted PA Restructuring; provided, however, that (a) PA Newco and any Subsidiary of the Borrower shall be permitted to consolidate or merge with (i) National Beef, provided that National Beef shall be the continuing or surviving Person or (ii) any one or more other Subsidiaries of the Borrower, provided, that, in the event of a consolidation or merger with a Loan Party, the Loan Party shall be the continuing or surviving Person, and (b) the Borrower may make acquisitions, so long as no Default or Matured Default is then continuing or would occur as a result of such transaction, the Funded Debt to EBITDA Ratio on a pro forma basis after giving effect to such acquisition (based on assumptions and projections acceptable to the Agent) shall not exceed 2.50 to 1.00 and the Borrower shall otherwise be in pro forma compliance (based on assumptions and projections acceptable to the Agent) with the financial covenants 

set forth in Sections 9.16 and 9.18.  For the avoidance of doubt, no conversion or reclassification of the Borrower’s or any of its Subsidiaries’ membership interests in connection with the Leucadia Transaction shall be deemed to be a recapitalization for purposes of this Agreement.
(g)    Indebtedness.  Clause (g) of Section 10.4 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:
(g) in the case of the Borrower, the Borrower’s membership interests subject to redemption rights to the extent classified as debt and obligations arising from the exercise of those redemption rights; 
(h)    Disposition of Property.  Section 10.6 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:
10.6    Disposition of Property.
None of the Borrower nor any of its Subsidiaries shall sell, lease, transfer or otherwise dispose of any of its properties, assets or rights, to any Person, except (a) sales or other dispositions of Inventory or obsolete Equipment in the ordinary course of the Borrower’s or its Subsidiaries’ business (as applicable), (b) as permitted in the Security Agreement, (c) in connection with the Permitted PA Restructuring and (d) sales, transfers, dispositions of assets other than as set forth above of up to $5,000,000 (on a combined basis for the Borrower and its Subsidiaries) during any single Fiscal Year. The Agent hereby covenants that upon the sale or disposition of any asset permitted hereunder it shall release its Lien on such asset.
(i)    Equity Distributions.  Section 10.10 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:
10.10    Equity Distributions.
None of the Borrower nor any of its Subsidiaries shall directly or indirectly, make any Equity Distributions, except that (a) the Borrower may make quarterly distributions to its Members in respect of Borrower’s taxable income, in amounts proportionate to the respective percentage interests of each of such Member so that each such Member shall have received an amount equal to 54% of such Member’s share of the Borrower’s net taxable income for the relevant quarter (subject to any increase in accordance with the terms of the NB LLC Agreement and the PA LLC Agreement, respectively) (the “Permitted Taxable Distribution Amount”), provided that if the aggregate distribution made during any calendar year exceeds the Permitted Taxable Distribution Amount, then the excess distribution for such tax year shall be applied to the permitted distributions for the immediately subsequent quarters, Dollar-for-Dollar, until all such excess has been applied to future permitted distributions, (b) in connection with the consummation of the Leucadia Transaction, the Borrower may make (i) distributions required to complete the Permitted PA 

Restructuring and (ii) the KleinCos Equity Distributions, and (c) the Borrower may make additional Equity Distributions (the “Additional Equity Distributions”), so long as (i) no Default or Matured Default has occurred and is continuing or would be caused thereby, (ii) the Borrower shall be in pro forma compliance (based on assumptions and projections acceptable to the Agent) with the Fixed Charge Coverage Ratio after giving effect to such Equity Distribution and (iii) to the extent such Additional Equity Distributions shall be made with IPO Proceeds, subject to any concurrent mandatory prepayment required to be made pursuant to Section 4.4(b)(ii).
(j)    Right to Cure.  Clause (c) of Section 11.3 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:
(c) only four (4) Equity Cure Issuances may be made during the term of this Agreement, and
(k)    Liabilities Joint and Several.  Section 13.32 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:
13.32    Liabilities Joint and Several.
Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to the Lenders the prompt payment and performance by each other Borrower of, all Liabilities and all agreements under the Financing Documents.  Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and performance and not of collection, that such obligations shall not be discharged until the Liabilities have been paid in full, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Liabilities or Financing Document, or any other document, instrument or agreement to which any Loan Party is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this Section) or any other Financing Document, or any waiver, consent or indulgence of any kind by the Agent or the Lenders with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for the Liabilities or any action, or the absence of any action, by the Agent or any Lender in respect thereof (including the release of any security or guaranty); (d) the insolvency of any Loan Party; (e) any election by any Lender in any bankruptcy proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) the disallowance of any claims of the Agent or any Lender against any Loan Party for the repayment of any Liabilities under Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except the effect of any applicable statute of limitations or the payment in full of the Liabilities.

(l)    Waiver of Farm Credit Rights.  The following shall be and it hereby is added to the Credit Agreement as Section 13.36:
13.36    Waiver of Farm Credit Rights.
THE BORROWER ACKNOWLEDGES AND AGREES THAT, TOGETHER WITH ITS LEGAL COUNSEL, IT HAS REVIEWED ALL RIGHTS THAT IT MAY OTHERWISE BE ENTITLED TO WITH RESPECT TO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS UNDER THE SECTIONS OF THE AGRICULTURAL CREDIT ACT OF 1987 DESIGNATED AS 12 U.S.C. SECTIONS 2199 THROUGH 2202E AND THE IMPLEMENTING FARM CREDIT ADMINISTRATION REGULATIONS AS SET FORTH IN 12 C.F.R. SECTIONS 617.7000 THROUGH 617.7630 (INCLUDING THOSE PROVISIONS WHICH AFFORD THE BORROWER CERTAIN RIGHTS AND IMPOSE ON THE AGENT AND LENDERS CERTAIN DUTIES WITH RESPECT TO THE COLLECTION OF ANY AMOUNTS OWING HEREUNDER OR THE FORECLOSURE OF THE SECURITY INTEREST OF THE AGENT ON THE COLLATERAL, OR WHICH REQUIRE THE AGENT OR ANY LENDER TO DISCLOSE TO THE BORROWER THE NATURE OF ANY SUCH RIGHTS OR DUTIES), AND THAT IT KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ANY AND ALL SUCH RIGHTS.  NOTHING CONTAINED IN THIS SECTION NOR THE DELIVERY TO THE BORROWER OF ANY SUMMARY OF ANY RIGHTS UNDER, OR ANY NOTICE PURSUANT TO, THE AGRICULTURAL CREDIT ACT OF 1987 SHALL IN ANY WAY BE DEEMED TO BE, OR BE CONSTRUED TO IN ANY WAY INDICATE, THE DETERMINATION OR AGREEMENT BY THE BORROWER, THE AGENT, ANY LENDER OR ANY VOTING PARTICIPANT THAT THE AGRICULTURAL CREDIT ACT OF 1987, OR ANY RIGHTS THEREUNDER, ARE OR WILL IN FACT BE APPLICABLE TO THE BORROWER, THE CREDIT EXTENSIONS OR THE FINANCING DOCUMENTS.
(m)    Exhibit 9A.  Exhibit 9A attached to the Credit Agreement shall be and it hereby is replaced in its entirety with Exhibit 9A attached to this Amendment.
3.    Limited Consent.  Subject only to the consummation of the Leucadia Transaction and the occurrence of the Third Amendment Effective Date, the Required Lenders hereby consent to the Leucadia Transaction and agree that no Change of Control shall be triggered as a result of the consummation of the Leucadia Transaction because of the amendments set forth herein.  By its signature below, each Loan Party agrees that, except as expressly provided herein, nothing herein shall be construed as (a) a waiver or continuing waiver or amendment of any provision of the Credit Agreement or any other Financing Document or (b) a waiver of any Default or Matured Default now existing or hereafter arising under the Credit Agreement or any other Financing Document.  The consent contained herein is a limited one-time consent, and nothing contained herein shall obligate the Lenders to grant (i) any additional or future consent with respect to any provision of the Credit Agreement or any other Financing Document or (ii) any waiver of any Default or Matured Default now existing or hereafter arising under the Credit Agreement or any other Financing 

Document.
4.    Representations and Warranties; Acknowledgments.  In order to induce the Agent and the Lenders to enter into this Amendment, each Loan Party hereby (a) represents and warrants to the Agent and the Lenders that (i) it has duly authorized, executed and delivered this Amendment, (ii) no consent, approval, exemption, order or authorization of, or a registration or filing with, any Governmental Authority, regulatory body or any other third party is required for the due execution, delivery and performance of this Amendment by such Loan Party, other than such consents, approvals, exemptions, orders or authorizations that have already been obtained, (iii) the representations and warranties of such Loan Party set forth in the Credit Agreement and the other Financing Documents are true and correct in all material respects (unless stated to relate solely to an earlier date, in which case the representations and warranties are true and correct as of such earlier date) and (iv) no Default or Matured Default has occurred and is continuing or exists, (b) acknowledges and agrees that, except as expressly provided herein, the Credit Agreement and each of the other Financing Documents are hereby ratified and confirmed in all respects and shall remain in full force and effect; (c) ratifies and reaffirms its obligations under, and acknowledges, renews and extends its continued liability under, the Credit Agreement and each other Financing Document to which it is a party; and (d) ratifies and reaffirms all of the Liens securing the payment and performance of the Secured Liabilities (as defined in the Security Agreement).
5.    Conditions to Effectiveness.  This Amendment shall be effective on the date (the “Third Amendment Effective Date”) when the following conditions shall have occurred:
(a)    The Agent shall have received each of the following documents, each of which shall be reasonably satisfactory to the Agent in form and substance:
(i)    from each Loan Party and the Required Lenders, executed counterparts of this Amendment, signed on behalf of such party or written evidence satisfactory to the Agent (which may include telecopy transmission of a signed signature page to this Amendment) that such party has signed a counterpart of this Amendment;
(ii)    counterparts to the attached Consent and Acknowledgment of Subsidiary Loan Parties, duly executed by each Subsidiary Loan Party;
(iii)    the Fee Letter, dated as of the date hereof, by and between the Borrower and the Agent; and
(iv)    such other documents as the Agent or any Lender (acting through the Agent) may reasonably request on or before the date falling three (3) days prior to the Third Amendment Effective Date.
(b)    PA Newco shall have delivered each of the following to the Agent, each of which shall be satisfactory to the Agent in form and substance:
(i)    an executed Joinder Agreement whereby PA Newco agrees to become a Borrower and a Grantor for all purposes under the Credit Agreement and the other Financing 

Documents and grants a security interest in favor of the Agent in all Collateral in accordance with the Financing Documents;
(ii)    each UCC financing statement required by the Financing Documents or under law or reasonably requested by the Agent to be filed, registered or recorded in order to create in favor of the Agent a perfected Lien on the personal property Collateral of PA Newco; and
(iii)    an amendment to the Pennsylvania Mortgage to the extent required to reflect the ownership of the real property subject thereto by PA Newco and such other documents in connection therewith as Agent shall require.
(c)    The Agent shall have received a fully executed copy of the Leucadia Purchase Agreement, which shall be, in form and substance, satisfactory to the Agent and the transactions contemplated thereby shall have been consummated in accordance with the terms of the Leucadia Purchase Agreement without waiver or amendment of any term or condition thereof that would reasonably be expected to be adverse to the interests of the Lenders in any material respect without the prior consent of the Agent (such consent not to be unreasonably withheld or delayed).
(d)    PA Newco and each Loan Party shall have delivered to the Agent a secretary’s certificate (or substantively similar document reasonably acceptable to the Agent) which shall include, either directly or by incorporated attachments, (a) certifications as to the incumbency of PA Newco’s or such Loan Party’s officers, together with specimen signatures of those officers who will have the authority to execute documents on behalf of PA Newco or such Loan Party, respectively and (b) true and complete copies of (i) PA Newco’s or such Loan Party’s articles or certificate of incorporation, organization, or formation; (ii) PA Newco’s or such Loan Party’s bylaws, operating agreement, partnership agreement or other organizational documents; (iii) resolutions of the appropriate governing body or board authorizing the transactions contemplated herein and (iv) good standing certificates from the jurisdiction of organization of PA Newco and each Loan Party.
(e)    The Agent shall have received the favorable, written opinion of counsel to the Loan Parties and PA Newco, as well as any relevant local counsel to the Loan Parties, as to PA Newco’s and each of the Loan Parties’ status and the legal and binding effect of the transactions contemplated by this Amendment and any of the other Loan Documents executed in connection herewith.
(f)    The Borrower shall have paid to the Agent for the benefit of each Lender that provides its executed signature page to this Amendment no later than November 14, 2011, an amendment fee equal to 0.10% of such Lender’s Commitment, which shall be fully earned and nonrefundable on the date hereof.
(g)    The representations and warranties of the Loan Parties set forth in Section 4 of this Amendment shall be true and correct in all material respects.
(h)    No Default or Matured Default shall have occurred and be continuing or shall exist.
(i)    The Agent shall have received the amounts separately agreed upon in the Fee Letter described in Section 5(a)(iii) of this Amendment.

(j)    The Borrower shall have paid all reasonable and documented fees and expenses of Agent’s counsel, Fulbright & Jaworski L.L.P., which are then due and owing and for which an invoice shall have been received.
6.    Miscellaneous.
(a)    Reference to Credit Agreement.  Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” or words of like or similar import shall mean and be a reference to the Credit Agreement, as modified and amended by this Amendment.  Each reference to the Credit Agreement in any other Financing Document shall mean and be a reference to the Credit Agreement, as modified and amended by this Amendment.
(b)    Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
(c)    Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the Borrower and its respective successors and assigns, and upon the Agent and the Lenders and their respective successors and assigns.
(d)    Continuing Effect.  Except as expressly amended hereby, the Credit Agreement, as amended by this Amendment, shall continue to be and shall remain in full force and effect in accordance with its terms.  This Amendment shall not constitute an amendment or waiver of any provision of the Credit Agreement not expressly referred to herein and shall not be construed as an amendment, waiver or consent to any action on the part of the Borrower or any other Loan Party that would require an amendment, waiver or consent of the Agent or the Lenders except as expressly stated herein.  This Amendment constitutes a Financing Document.  
(e)    GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS AND DECISIONS OF THE STATE OF COLORADO WITHOUT REGARD TO THE APPLICATION OF CONFLICT OF LAWS PRINCIPLES.
(f)    Counterparts. This Amendment may be signed in counterparts (by facsimile transmission or otherwise) but all of such counterparts together shall constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.
(g)    Incorporation into Credit Agreement. This Amendment shall be incorporated into the Credit Agreement by this reference.
7.    NO ORAL AGREEMENTS.  THIS AMENDMENT AND THE OTHER FINANCING DOCUMENTS EMBODY THE ENTIRE AGREEMENT OF THE PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL 

AGREEMENTS AMONG THE PARTIES.
8.    General Waiver and Release.  IN ADDITION, TO INDUCE THE LENDERS AND THE AGENT TO AGREE TO THE TERMS OF THIS AMENDMENT, EACH LOAN PARTY (BY ITS EXECUTION BELOW) REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS EXECUTION OF THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE CREDIT AGREEMENT, THIS AMENDMENT OR THE OTHER FINANCING DOCUMENTS.  NOTWITHSTANDING THE FOREGOING, IN THE EVENT THERE EXIST ANY SUCH CLAIMS OR OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS, THE BORROWER (BY ITS EXECUTION BELOW) HEREBY:
(A)    FOREVER GENERALLY WAIVES ANY AND ALL CLAIMS, OFFSETS, DEFENSES AND/OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING ON OR PRIOR TO THE DATE OF ITS EXECUTION OF THIS AMENDMENT; AND
(B)    FOREVER RELEASES, ACQUITS AND DISCHARGES THE LENDERS, THE AGENT AND THEIR RELATED PARTIES FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH SUCH LOAN PARTY EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING ON OR PRIOR TO THE DATE HEREOF AND FROM OR IN CONNECTION WITH THE CREDIT AGREEMENT, THIS AMENDMENT AND THE OTHER FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND HEREIN.
[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Amendment as of the day and year first above written.
BORROWER:
NATIONAL BEEF PACKING COMPANY, LLC 

By:  /s/ Jay D. Nielsen____________                   
Name: Jay D. Nielsen 
Title:   Chief Accounting Officer

SUBSIDIARY LOAN PARTIES:
NATIONAL BEEF CALIFORNIA, LP
By:  NATIONAL CARRIERS, INC.,  
        its General Partner

By: /s/ Jay D. Nielsen________________ 
Name: Jay D. Nielsen 
Title:   Chief Financial Officer

NATIONAL CARRIERS, INC.

By:  /s/ Jay D. Nielsen________________ 
Name: Jay D. Nielsen 
Title:   Chief Financial Officer

AGENT:
COBANK, ACB, as Agent

By: /s/ James H. Matzat     
Name: James H. Matzat 
Title: Vice President

LENDER:
COBANK, ACB, as Lender and Swing Line Lender

By: /s/ James H. Matzat     
Name: James H. Matzat 
Title: Vice President

LENDER:
BANK OF AMERICA, N.A.

By:  /s/ Charles W. Hunter     
Name: Charles W. Hunter 
Title:  S.V.P

LENDER:
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH

By: /s/ Robert K. Hughes     
Name: Robert K. Hughes     
Title: Executive Director    

By: /s/ Izumi Fukushima     
Name: Izumi Fukushima     
Title: Executive Director    

LENDER:
U.S. BANK NATIONAL ASSOCIATION

By: /s/ James D. Pegues     
Name: James D. Pegues     
Title: Vice President    

LENDER:
WELLS FARGO BANK, NATIONAL ASSOCIATION

By:  /s/ John R. Carley__________ 
Name:  John R. Carley 
Title: Vice President

LENDER:
UMB BANK, N.A.

By:  /s/ Billy Weiland___________ 
Name: Billy Weiland 
Title: Vice President

LENDER:
AMERICAN AGCREDIT, PCA

By: /s/ Gary Van Schuyver     
Name: Gary Van Schuyver     
Title: Senior Vice President    

CONSENT AND ACKNOWLEDGMENT OF SUBSIDIARY LOAN PARTIES

November __, 2011

The undersigned Subsidiary Loan Parties (a) acknowledge and consent to the execution of the foregoing Third Amendment to Amended and Restated Credit Agreement and Limited Consent (the “Amendment”), (b) confirm that the Guaranty Agreement previously executed by the undersigned Subsidiary Loan Parties, as well as any other Financing Documents, if any, previously executed by the undersigned Subsidiary Loan Parties, apply and shall continue to apply to all Guaranteed Obligations (as defined in the Guaranty Agreement), notwithstanding the execution and delivery of the foregoing Amendment by the Borrower, the Agent and the Required Lenders, and (c) acknowledge that without this consent and confirmation, the Lenders and the Agent would not agree to the modifications of the Credit Agreement which are evidenced by the foregoing Amendment.

[SIGNATURE PAGE FOLLOWS]

SUBSIDIARY LOAN PARTIES:
NATIONAL BEEF CALIFORNIA, LP
By:  NATIONAL CARRIERS, INC.,  
        its General Partner

By:  /s/ Jay D. Nielsen____________                   
Name: Jay D. Nielsen 
Title:   Chief Financial Officer

NATIONAL CARRIERS, INC.

By:  /s/ Jay D. Nielsen____________                   
Name: Jay D. Nielsen 
Title:   Chief Financial Officer

Exhibit 9A
Form of Compliance Certificate 
(period from _________, 20__ to    , 20__)
Pursuant to Section 9.1 of the Amended and Restated Credit Agreement dated as of June 4, 2010 (as the same may be amended, amended and restated, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”) by and among National Beef Packing Company, LLC (the “Borrower”), certain of its subsidiaries, CoBank, ACB, as agent (the “Agent”), and the Persons from time to time party thereto, the undersigned certifies to the Agent and the Lenders as follows:
		
	1.
	The Borrower’s combined and consolidated financial statements, attached hereto, for the period indicated above (the “Financial Statements”), have been prepared in accordance with the requirements of Section 9.1 of the Credit Agreement and have been delivered on or before the date they are due.

		
	2.
	The representations and warranties contained in Article VII of the Credit Agreement, as updated by disclosures in writing to the Agent as permitted therein, are true and correct as of the date hereof as though made on this date.

		
	3.
	The Borrower is in compliance with all of the affirmative and negative covenants set forth in Articles IX and X of the Credit Agreement as of the date hereof.

4.    Specifically, as of the date of the Financial Statements:
		
	a.
	The Borrower shall have a Funded Debt to EBITDA Ratio of not more than 3.25 to 1.00 as at the end of each fiscal quarter.

Borrower’s Funded Debt to EBITDA Ratio for the four consecutive fiscal quarters ending on the date of the Financial Statements was    to 1.00.
In Compliance: Yes ___     No ___

		
	b.
	[The Borrower and its consolidated Subsidiaries shall have Adjusted Net Worth of not less $275,000,000 as at the end of each Fiscal Year.

The Adjusted Net Worth of the Borrower and its consolidated Subsidiaries as the date of the Financial Statements was $___________________.
In Compliance: Yes ___     No ___]

		
	c.
	The Borrower shall have a Fixed Charge Coverage Ratio of at least 1.05 to 1.00 as at the end of each fiscal quarter.

Borrower’s Fixed Charge Coverage Ratio for the eight consecutive fiscal quarters ending on the date of the Financial Statements was    to 1.00.
In Compliance: Yes ___     No ___

		
	d.
	The rate at which interest accrues in respect of the Line of Credit Loans, Swing Line Loans, Term Loans, LC Fees and Non-Use Fees, as the case may be, is determined in accordance with a Financial Performance Level (as described in the Credit Agreement), which, in turn, is determined by the Borrower’s Funded Debt to EBITDA Ratio, as set forth below:

	
						
	Financial Performance Level:
	Funded Debt to EBITDA Ratio:
	Base Rate Advance Line of Credit Loans, Swing Line Loans and Term Loans:
	LIBOR Rate Line of Credit Loans and Term Loans:
	LC Fee:
	Non-Use Fee:

	Level I
	Less than or equal to 1.50: 1.00
	0.75%
	1.75%
	1.75%
	0.25%

	Level II
	Greater than 1.50:1.00 and less than 2.50:1.00
	1.00%
	2.00%
	2.00%
	0.38%

	Level III
	Greater than or equal to 2.50:1.00
	1.50%
	2.50%
	2.50%
	0.50%

As of the date of the Financial Statements, Borrower’s Funded Debt to EBITDA Ratio was     and the Financial Performance Level was _____.
		
	e
	The Suppressed Availability Amount for the fiscal quarter ending on the date of the Financial Statements was $________.

5.  All adjustments and calculations related to the amounts set forth in each of 4.a. through 4.e above are attached hereto.

Dated:  _________, 20__
National Beef Packing Company, LLC 
 
 
By:______________________________ 
Its:______________________________

Schedule 4.a..  Funded Debt to EBITDA Ratio

1.  Funded Debt
a.  Outstanding Principal Amount of Interest-    $______ 
Bearing Indebtedness (including Capital Leases) 
b.  Undrawn Amount of Outstanding Letters of    $______ 
Credit (including the LCs)
=======    
c.  Subtotal (Lines a and b)    $______

Minus:
d.  LCs or Indemnity Obligations Issued to    $______ 
Support other Indebtedness
e.  the Borrower’s membership interests subject to     $______ 
Redemption Rights
f.  Obligations under Deferred Compensation Plans     $______
=======    
g.  Subtotal (Lines d through f)    $______

h.  Funded Debt (Line c – Line g)    $______

2.  EBITDA
a.  Net Income    $______

Plus:
b.  Income Taxes    $______
c.  Interest Expense    $______
d.  Depreciation Expense    $______
e.  Amortization Expense    $______
f.  Other Non-Cash Expenses or Charges    $______
=======    
g.  Subtotal (Lines b through f)    $______

Minus:
h.  Non-Operating Gains    $______
i.  Non-Operating Losses    $______
=======    
j.  Subtotal (Lines h and i)    $______
=======    
k.  EBITDA (Line a + Line g - Line j)    $______

Funded Debt to EBITDA Ratio (Line 1h over Line 2k)     _____ to 1.00

Schedule 4.b.  Adjusted Net Worth

a.  Book Value of all Assets    $______
b.  Total Liabilities    $______
=======    
c.  Net Worth (Line a - Line b)    $______

d.  Negative Impact Occurring as a Result of     $______ 
Making Equity Distributions in accordance  
with the $150 Million Basket

Adjusted Net Worth (Line c - Line d)    $______

Schedule 4.c.  Fixed Charge Coverage Ratio

1.  EBITDA
a.  Net Income    $______

Plus:
b.  Income Taxes    $______
c.  Interest Expense    $______
d.  Depreciation Expense    $______
e.  Amortization Expense    $______
f.  Other Non-Cash Expenses or Charges    $______
=======    
g.  Subtotal (Lines b through f)    $______

Minus:
h.  Non-Operating Gains    $______
i.  Non-Operating Losses    $______
=======    
j.  Subtotal (Lines g and h)    $______
=======    
k.  EBITDA (Line a + Line g - Line j)    $______
Minus:
l.  Net Capital Expenditures     $______
m.  Numerator (Line k – Line l)    $______

2.  Fixed Charges
a.  Scheduled Payments of Principal and Interest 
on Funded Debt     $______
b. Cash Income Taxes Incurred and Paid    $______
c.  Equity Distributions (other than the KleinCos Equity Distribution,
Equity Distributions under the $150 Million Basket, and up to
$8 Million in Equity Distributions made in May 2010)    $______ 

=======    
d.  Fixed Charges (Lines a + b +c)    $______ 

3.  Suppressed Availability
		
	a.  Borrowing Base as of the last day of the fiscal quarter  
ended __________, 20__
	$______

		
	b.  Line of Credit Commitments as of the last day of the fiscal quarter  
ended __________, 20__
	$______

c.  Result of Line a – Line b    $______
d.  Greater of $0 and Line c    $______

e.  Suppressed Availability Amount (Lesser of Line 3d and $30,0000,000)    $_______

Fixed Charge Coverage Ratio ((Sum of Line 1m + Line 3e) over Line 2d)     _____ to 1.00Exhibit 10.3 - Employee Agreement

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 

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 

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 

$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 

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 

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 

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 

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 

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 

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.

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:

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 

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 

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.

(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]

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

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