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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Employee Retention Agreement

AMENDED AND RESTATED EMPLOYMENT AGREEMENT | Document Parties: NPC INTERNATIONAL INC | NPC Acquisition Holdings, LLC You are currently viewing:
This Employee Retention Agreement involves

NPC INTERNATIONAL INC | NPC Acquisition Holdings, LLC

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Title: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Governing Law: Kansas     Date: 1/5/2009
Law Firm: Shearman Sterling    

AMENDED AND RESTATED EMPLOYMENT AGREEMENT, Parties: npc international inc , npc acquisition holdings  llc
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EXECUTION VERSION

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into by and between NPC International, Inc. (the “Company”), NPC Acquisition Holdings, LLC (“Holdings”) for the limited purposes of Sections 4.3, 10, 12, 15, 18 and 24 only, and Troy D. Cook (“Employee”), and is dated as of December 29, 2008.

W I T N E S S E T H:

WHEREAS, Company recognizes Employee's substantial contribution to its growth and success and desires to assure the continued employment of Employee, and Employee desires to continue such employment, upon the terms set forth in this Agreement; and

WHEREAS, Company, Holdings and Employee did enter into an original Employment Agreement on May 3, 2006 (“Employment Agreement”); and

WHEREAS, the parties now wish to reflect certain amendments to the Employment Agreement through memorialization of an Amended and Restated Employment Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the adequacy and receipt of which is hereby acknowledged, the parties agree as follows:

1.       Effective Date . Company hereby continues the employment of Employee and Employee hereby continues employment with Company for the Term (as defined below) in the position and with the duties and responsibilities set forth in Section 3 below, and upon the other terms and subject to the conditions hereinafter stated. The term “Effective Date” shall be January 1, 2009.

2.      Term . The initial term of this Agreement shall commence on the Effective Date and shall continue until the earlier of (a) the third (3 rd ) anniversary of the Effective Date, or (b) the earlier termination of Employee's employment pursuant to Section 7 of this Agreement (the “Initial Term”). This Agreement shall automatically be renewed for successive two (2) year periods commencing on the expiration of the Initial Term and each second anniversary thereof thereafter (the “Renewal Term”), unless either party provides the other with at least ninety (90) days’ prior written notice of its intent not to so renew; provided, however, that the party receiving such notice may waive the 90-day notice requirement. The term “Term” shall mean the Initial Term together with any Renewal Term(s). The term “Renewal Deadline” shall mean the last day on which notice of non-renewal is permitted to be given under this Agreement but in no event later than September 30 of the applicable year.

 


 

3.

Position, Duties, Responsibilities and Services .

3.1.       Position, Duties and Responsibilities . During the Term, Employee shall serve as Executive Vice President--Finance and Chief Financial Officer of Company, in which capacities Employee shall perform the usual and customary duties, and have the usual and customary authority and status, of those offices, which shall be those normally inherent in such capacities in U.S. publicly-reporting corporations of similar size and character. Employee shall also have such other managerial duties and responsibilities with Company, its subsidiaries or divisions as may be assigned by the Board of Directors of Company (the “Board”) to the extent consistent with the immediately preceding sentence. Employee shall be subject to the supervision and control of the Board.

3.2.       Services to be Provided . During the Term, Employee shall (i) devote substantially all his full working time, attention and energies to the affairs of Company and its subsidiaries and divisions, (ii) use his best efforts to promote its and their best interests, (iii) faithfully and diligently perform his duties and responsibilities hereunder, and (iv) comply with and be bound by Company's operational policies, procedures and practices as are from time to time in effect during the Term. Employee acknowledges that his duties and responsibilities will require substantially all his full-time business efforts and agrees during his employment by Company that he will not engage in any other business activity or have any business pursuits or interests, except activities or pursuits which the Board has determined, in its reasonable judgment, after notice by Employee, do not conflict with the business of Company and its subsidiaries or interfere with the performance by Employee of his duties hereunder; provided, however, that the Excepted Investments and Activities (as defined in Section 9) and the expenditure by Employee of a reasonable amount of time to monitor such investments and participate in such Activities shall be deemed not to conflict with the business of Company and its subsidiaries or to interfere with the performance by Employee of his duties hereunder. This Agreement shall not be construed as preventing Employee from serving as an outside director of any other company or from investing his assets in such form or manner as will not require a material amount of his time, in each case subject to the restrictions contained in Section 9 below; provided, however, that the Excepted Investments and Activities (as defined in Section 9) and the expenditure of a reasonable amount of time by Employee to monitor such investment and participate in such Activities shall be deemed not to be prohibited by this sentence.

3.3.       Location of Services to be Provided . Employee's principal place of business during the Term shall be within thirty-five (35) miles of Overland Park, Kansas (the “Principal Place of Employment”).

 

4.

Compensation .

4.1.       Base Salary . During the Initial Term, Employee shall be paid a base salary (“Base Salary”) at an annual rate of Four Hundred Forty-five Thousand Dollars ($445,000) per year, payable consistently with Company's current payroll practices. The

 

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Base Salary shall be reviewed at least annually by the Board during the Term for an increase based on merit and other relevant factors, and may be increased but not decreased during the Term, other than pursuant to a systematic reduction that is applicable to the entire executive management team. Employee shall receive annual written notice of the Base Salary that will be applicable for the immediately succeeding fiscal year at least thirty (30) days in advance of the Renewal Deadline. Except where expressly provided otherwise, each annual year referenced under Sections 4.1 and 4.2 hereof shall be interpreted to be an annual fiscal year of Company. For purposes of this Agreement, “systematic reduction” shall mean a reduction in salary for all employees within the “management team,” as defined hereafter, that is the same reduction of salary on a proportional basis for the members of the management team. In addition, for purposes of this Agreement, “management team” shall be defined as those members of management whose compensation is reviewed annually, following historical practices, by the Compensation Committee of the Board of Directors.

 

4.2.

Bonus Compensation .

 

 

(a)

Calculation of Bonus Compensation .

(1)       Employee's annual bonus compensation (“Bonus Compensation”) for each year during the Term shall be a maximum of 75% of Base Salary, and shall be payable as follows: (A) at achievement of 95% of the EBITDA target, an amount equal to 25% of Base Salary; (B) at achievement of 100% of the EBITDA target, an amount equal to 50% of Base Salary, and (C) at achievement of 105% or more of the EBITDA target, an amount equal to 75% of Base Salary. For the avoidance of doubt, no Bonus Compensation shall become payable if less than 95% of the EBITDA target for any year during the Term is achieved.

(2)       If the EBITDA achieved for any year during the Term is greater than 100% of the EBITDA target for that year, the Bonus Compensation shall be equal to 50% of Base Salary plus the Adjustment Amount (as defined below), up to a maximum of 75% of Base Salary.

(3)       If the EBITDA achieved for any year during the Term is greater than 95%, but less than 100%, of the EBITDA target for that year, the Bonus Compensation shall be 50% of Base Salary minus the Adjustment Amount.

(4)       The “Adjustment Amount” shall be equal to the product of (x) five, (y) Base Salary and (z) the Achieved Ratio. The “Achieved Ratio” shall be a fraction, the numerator of which is equal to the difference between (i) the amount of achieved EBITDA for the relevant year, and (ii) the EBITDA target for the relevant year, and the denominator of which shall be equal to the amount of the EBITDA target for the relevant year. (To the extent the Achieved Ratio results in a negative number, the

 

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negative shall be ignored, i.e., the Achieved Ratio shall be an absolute amount.)

(5)       For purposes of calculating the foregoing, the EBITDA target and the EBITDA achieved for any given year during the Term shall be rounded to the nearest $0.25 million.

(6)        Bonus Determination . The EBITDA target for the relevant year that must be achieved in order to earn the specified amount of Bonus Compensation shall be based on the annual budget for such year and approved by the Board (and subject to the review of and consent by Merrill Lynch Global Private Equity). The EBITDA target for the relevant year that has been determined by the Board and consented to by Merrill Lynch Global Private Equity shall be furnished to the Employee by March 15 of such year, which target shall remain in effect for the remainder of such year unless otherwise mutually agreed by Employee and the Company. For the avoidance of doubt in determining Bonus Compensation for the relevant year, Employee shall also be furnished, concurrently with the EBITDA target for such year, a chart like that included in the briefing materials for the Board meeting at which the revised EBITDA target for 2008 and this letter agreement were approved, which chart shows, in 0.25% increments, the percentage of Base Salary earned as Bonus Compensation based on the percentage of the EBITDA target for the relevant year that is achieved in such year.

(b)        Board Discretion . In addition to the Bonus Compensation determined pursuant to Section 4.2(a), based on the extent to which the EBITDA target has been achieved, the Board, in its sole and exclusive discretion, may award the Employee additional bonus compensation in recognition of outstanding performance.

(c)        Timing of Payment . The Company shall pay the Bonus Compensation and any payment to be made pursuant to Section 4.2(b) to Employee within thirty (30) days of the completion by the Company's certified public accountants of their audit of the Company's financial statements for the applicable fiscal year or, if the employment of Employee shall have been terminated for any reason prior to such date, in accordance with Section 7 below; but in no event later than March 15 of the calendar year following the completion of the fiscal year in which the services in respect of such Bonus Compensation were rendered.

4.3.       Long-Term Incentive and Equity Based Awards . As of the original effective date of the Employment Agreement, Holdings granted Employee nine hundred seventy-five thousand (975,000) non-time vesting Series A Options to purchase an equivalent number of common units in Holdings, one million sixty-four thousand (1,064,000) time vesting Series A Options to purchase an equivalent number of common units in Holdings, and two million six hundred fifty-nine thousand (2,659,000) Series B

 

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Options to purchase an equivalent number of common units in Holdings, which options have terms substantially similar to those set forth in the Holdings Management Investment and Option Plan, attached hereto as Exhibit A.

4.4.       Management Interests . In accordance with the provisions of Section 6.11 of the Stock Purchase Agreement, by and among Company, Holdings, and the stockholders of NPC International, Inc. dated as of March 3, 2006 (the “Stock Purchase Agreement”), pursuant to his rollover contribution Employee received membership interests with value of $1,300,000 (the “Management Interests”). Such interests and the interests underlying the options are subject to the terms of the Amended and Restated Limited Liability Company Agreement of Company, as the same may be amended from time to time in accordance with its terms; provided, however, that no such amendment shall be made to the LLC Agreement that will have a disproportionate impact on the management interestholders.

 

5.

Employee Benefits .

5.1.       Benefit Plans . During the Term, Employee shall be entitled to participate in and receive benefits generally made available from time to time to senior executive officers of Company under all benefit programs, arrangements or perquisites of Company, including the benefit plans referenced in Section 7.02(b) of the Stock Purchase Agreement; provided, however, that it is agreed that Employee shall not participate in the NPC International, Inc. Non-Qualified Executive Deferred Compensation Plan. Notwithstanding the immediately preceding sentence, (a) Employee shall continue to receive, throughout the Term, short- and long-term disability insurance as in effect for Employee immediately prior to the Effective Date, and (b) Employee shall be entitled to receive perquisites that are no less favorable than those described in Exhibit B attached hereto throughout the Term. In addition, Company shall pay or reimburse (as the case may be) the premiums for, life insurance in the amount of Two Million Dollars ($2,000,000), payable to Employee and Employee’s heirs upon death.

5.2.       Vacation . During the Term, Employee shall be entitled to receive vacation, pay for accrued vacation not taken, and carryover to subsequent years of vacation not taken, in each case, in accordance with Company policy in effect immediately prior to the Effective Date, but in no event less than four (4) weeks vacation with pay in any one (1) calendar year (pro-rated as necessary for partial calendar years during the Term). Such vacation may be taken, in Employee's discretion, at such time or times as are not inconsistent with the reasonable business needs of Company.

5.3.       Car Allowance . Company shall provide a car allowance to Employee in the amount of Four Thousand Six Hundred Two Dollars ($4,602) for each year of the Term.

 

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6.          Expenses . During the Term, Company shall reimburse Employee upon presentation of appropriate vouchers or receipts and in accordance with Company's expense reimbursement policies for senior executive officers, for all reasonable travel and entertainment expenses incurred by Employee in connection with the performance of his duties under this Agreement.

 

7.

Consequences of Termination of Employment .

7.1.       Death . In the event of the death of Employee during the Term, Employee's employment hereunder shall be terminated as of the date of his death and Employee's designated beneficiary, or, in the absence of such designation, the estate or other legal representative of Employee (collectively, the “Estate”) shall be paid (a) Employee's unpaid Base Salary through the month in which the death occurs, (b) any unpaid Bonus Compensation for any fiscal year which has ended as of the date of death, (c) the Pro Rata Bonus amount for the fiscal year in which the date of death occurs, and (d) any accrued vacation pay for vacation that has not yet been taken as of the date of death. The term “Pro Rata Bonus Amount” means the actual Bonus Compensation for the year in which Employee's employment terminates based on the actual performance for such year and determined at the time that such bonuses would otherwise be paid, times a fraction, (i) the numerator of which is the number of days in such year through and including the date in which Employee's employment terminates, and (ii) the denominator of which is 365. The Estate shall be entitled to all other death benefits in accordance with the terms of Company's benefit plans.

7.2.       Permanent Disability . In the event Employee become subject to a Permanent Disability, as determined in good faith by the Compensation Committee of the Board, Company shall have the right to terminate his employment by giving Employee thirty (30) days' prior written notice. If Employee's employment hereunder is so terminated, Employee shall be paid, in addition to payments under any disability insurance policy in effect, (a) Employee's unpaid Base Salary through the month in which such termination occurs, (b) Bonus Compensation on the same basis as is set forth in Section 7.1 above, and (c) any accrued vacation pay for vacation that has not yet been taken as of the date on which termination of employment becomes effective. The term “Permanent Disability” means the existence of an illness or incapacity (either physical or mental) which, in the reasonable opinion of a Qualified Physician, is likely to be of such character or severity that Employee would be unable to resume devoting substantially his full normal working time as required herein to his employment hereunder for a period of at least six (6) consecutive months. The term “Qualified Physician” means an impartial physician competent to diagnose and treat the illness or condition which Employee is believed to be suffering, selected by Company and reasonably acceptable to Employee (or if Employee is then incapable of acting for himself, Employee's personal representative), who shall have personally examined Employee and shall have personally reviewed Employee's relevant medical records; provided Company shall bear the costs of such Qualified Physician's services and Employee agrees to submit to an examination by such Qualified Physician and to the disclosure of Employee's relevant medical records to such Qualified Physician.

 

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7.3.       Termination of Employment of Employee by Company for Cause . Company may terminate Employee's employment for Cause (as defined below) upon receipt by Employee of written notice specifying the date on which such termination shall become effective and notifying Employee of the grounds constituting Cause (“Notice of Termination for Cause”); provided, however , that Cause shall not exist unless and until Company has delivered to Employee a copy of a resolution that the Board adopts at a meeting of the Board finding that in the good faith opinion of the Board, Employee was guilty of the conduct constituting Cause. In the event Employee is terminated for Cause, Employee shall be paid (a) his unpaid Base Salary through the date of termination, (b) any unpaid Bonus Compensation for any fiscal year that has ended prior to the year in which such termination occurs, (c) any accrued vacation pay for vacation that has not yet been taken as of the date on which termination of employment becomes effective, and (d) any other benefits to which he is entitled by any other benefit plan and by applicable law. The term “Cause” as used herein, shall mean (i) Employee's misappropriation of funds, embezzlement or fraud in the performance of his duties hereunder, (ii) the continued failure or refusal of Employee (following written notice thereof) to carry out in any material respect any reasonable request of the Board for the provision of services hereunder, (iii) the material breach of any material provision of this Agreement or of any Company policy regarding acts of moral turpitude, dishonesty, theft or unethical business conduct, or (iv) the entering of a plea of guilty or nolo contendere to, or the conviction of Employee of, a felony.

 

7.4.

Termination of Employment Other than for Cause, Death or Disability .

(a)        Termination . This Agreement may be terminated (i) by Company (for reasons in addition to termination pursuant to Sections 7.1, 7.2 or 7.3 above) at any time and for any reason, (ii) by Employee at any time for Good Reason (as defined below) and for any other reason, or (iii) upon the expiration of the Term, provided that any termination of Employee's employment, other than by reason of death or Cause, must be preceded by a Notice of Termination given at least thirty (30) calendar days in advance of the effective date of termination and which shall specify the effective date of termination, the specific termination provision in this Agreement relied upon as the basis for termination and describing in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee's employment.

 

(b)

Severance Payments .

(1)       If this Agreement is terminated by Company, other than as a result of death or disability of Employee or for Cause (“Termination Without Cause”), or Employee terminates this Agreement for Good Reason, Company shall pay Employee a severance payment in an amount equal to the sum of the Accrued Obligations (as defined below), plus the product of the sum of the lump sum Employee's Base Salary and the Bonus Compensation earned by Employee in respect of the last year immediately preceding the year of termination, multiplied by two (2). Such severance and non-competition payment shall be payable in twenty-

 

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four (24) equal monthly installments commencing as of the first payroll date in the month following the month in which the termination occurs.

The term “Accrued Obligations” means the sum of (i) Base Salary that is accrued but unpaid as of the date on which the termination of employment becomes effective; (ii) any unpaid Bonus Compensation for any fiscal year which has ended prior to the year in which the date of such termination occurs, (iii) any accrued vacation pay for vacation that has not yet been taken as of the date on which the termination of employment becomes effective, (iv) any other amounts due Employee under any benefit plan or in accordance with applicable law as of the date on which the termination of employment becomes effective, and (v) the Pro Rata Bonus Amount for the fiscal year in which the date of termination occurs.

The term “Good Reason” means the occurrence, without Employee's prior written consent, of any one or more of the following:

(i)          The assignment to Employee of duties inconsistent with those set forth in Section 3.1 (it being acknowledged by Employee, however, that the hiring of a Chief Operating Officer by Company should not give rise to Good Reason hereunder);

(ii)          The relocation of the principal place of employment to a location more than 35 miles from the current Principal Place of Employment;

(iii)          A reduction of twenty percent (20%) or more in Employee's annual bonus opportunity, other than pursuant to a systematic reduction that is applicable to the entire executive management team; and

(iv)          Company's material breach of any material provision of this Agreement; or

(v)          Any reduction whatsoever in Employee’s Base Salary, other than pursuant to a systematic reduction that is applicable to the entire executive management team;

provided, that Company shall have thirty (30) days from the date on which Company receives Employee’s notice of termination for Good Reason to remedy any occurrence constituting Good Reason listed in subparts (i) through (vi) and Employee immediately, after Company’s failure to remedy such occurrence, terminates employment.

(2)       If Employee terminates his employment voluntarily prior to the expiration of the Term, Employee shall be paid (a) his unpaid Base Salary, through the end of the month in which the voluntary termination

 

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occurs, (b) any unpaid Bonus Compensation for any fiscal year which has ended prior to the year in which the date of such termination occurs, and (c) any other benefits to which he is entitled under this Agreement and by applicable law.

(3)       For purposes of this Section 7.4(b), “terminates employment” shall mean Company and Employee anticipate that no further services will be performed after a certain date, or that the level of bona fide services Employee would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or as an independent contractor) over the immediately preceding a thirty-six (36) month period.

 

8.

Confidential Information .

8.1.      Employee agrees not to use, disclose or make accessible to any other person, firm, partnership, corporation or any other entity any Confidential Information (as defined below) pertaining to the business of Company at any time during the Term or thereafter, except (i) while employed by Company, in the business of and for the benefit of Company, or (ii) when required to do so by a court of competent jurisdiction, by any governmental agency having supervisory authority over the business of Company, or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order Company to divulge, disclose or make accessible such information. For purposes of this Agreement, “Confidential Information” shall mean non-public information concerning Company's financial data, statistical data, strategic business plans, product development (or other proprietary product data), customer and supplier lists, customer and supplier information, information relating to governmental relations, discoveries, practices, processes, methods, trade secrets, marketing plans and other non-public, proprietary and confidential information of Company that, in any case, is not otherwise generally available to the public and has not been disclosed by Company to others not subject to confidentiality agreements. In the event Employee's employment is terminated hereunder for any reason, he immediately shall return to Company all Confidential Information in his possession.

8.2.      Employee and Company agree that the covenant regarding Confidential Information contained in this Section 8 is a reasonable covenant under the circumstances, and further agree that if, in the opinion of any court of competent jurisdiction, such covenant is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this covenant as to the court shall appear not reasonable and to enforce the remainder of the covenant as so amended. Employee agrees that any breach of the covenant contained in this Section 8 would irreparably injure Company. Accordingly, Employee agrees that Company, in addition to pursuing any other remedies it may have in law or in equity, may obtain an injunction against Employee from any court having jurisdiction over the matter, restraining any further violation of this Section 8.

 

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9.

Non-Competition; Non-Solicitation .

9.1.      Employee agrees that, during the two (2) years following only his termination of employment for any reason (the “Non-Competition Period”), without the prior written consent of Company: (i) he shall not, in any capacity whatsoever, either directly or indirectly, individually or as a member of any business organization, (a) engage in the production or sale at retail of any pizza, or pasta, or any Italian food item similar to any Italian food item now or in the future approved by PHI (as defined in the Stock Purchase Agreement) or its Affiliates for use in the Pizza Hut System (as defined in the Stock Purchase Agreement) in the states within the United States in which Company has then-existing locations (the “ Territory ”), or (b) have any employment or own an interest, manage, operate, join, control, lend money to or render financial or other assistance to or participate in or be connected with, as an officer, employee, partner, stockholder, consultant or otherwise, any person engaged in the production or sale of such products in the Territory, provided, however , that, for the purposes of this Section 9.1, ownership of securities having no more than one percent of the voting power of any competitor which is listed on any national securities exchange shall not be deemed to be in violation of this Section 9.1 as long as the Person owning such securities has no other connection or relationship with such competitor; (ii) he shall not, on behalf of any competing entity, directly or indirectly, interfere with relationships with any suppliers or customers of Company; and (iii) he shall not perform services of any kind in any capacity for PHI; provided, however, that Employee shall be permitted to make and retain the investments described in Exhibit C attached hereto to the extent provided therein and to engage in the monitoring and other activities described in such Exhibit (collectively, “Excepted Investments and Activities”).

9.2.      During the Non-Competition Period, Employee agrees that, without the prior written consent of Company (and other than on behalf of Company), Employee shall not, on his own behalf or on behalf of any person or entity, directly or indirectly (a) hire or solicit the employment of any employee who has been employed by Company at any time during the six (6) month period immediately preceding the date of such hire or solicitation, or (b) solicit the suppliers or customers of Company, or discourage such clients or customers from doing business with Company.

9.3.      Employee and Company agree that the covenants of non-competition and non-solicitation contained in this Section 9 are reasonable covenants under the circumstances, and further agree that if, in the opinion of any court of competent jurisdiction such covenants are not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of these covenants as to the court shall appear not reasonable and to enforce the remainder of these covenants as so amended. Employee agrees that any breach of the covenants contained in this Section 9 would irreparably injure Company. Accordingly, Employee agrees that Company, in addition to pursuing any other remedies it may have in law or in equity, may obtain an injunction against Employee from any court having jurisdiction over the matter, restraining any further violation of this Section 9.

 

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10.        Indemnification; Legal Fees . Company shall indemnify Employee to the fullest extent permitted by the laws of Company's state of incorporation in effect at that time. If Employee provides services on behalf of Holdings, Holdings shall indemnify Employee to the fullest extent permitted under Delaware law in effect at the time. Employee shall also be entitled to such limitations on liability as are provided in the certificate of incorporation of Company as in effect on the date of this Agreement. Additionally, Employee will be entitled to any insurance policies Company may elect to maintain generally for the benefit of its officers and directors against all damages, liabilities, costs, charges and expenses incurred in connection with any action, suit or proceeding to which he may be made a party by reason of being a director or officer of Company or providing services on behalf of Holdings (“D&O Policy”); provided, however, that the scope and amount of insurance coverage under the D&O Policy shall be either the same as or no less favorable than the directors and officers liability insurance provided for the directors and officers of Holdings. To the extent permissible without penalty under the Sarbanes-Oxley Act of 2002 and any other applicable law, Company agrees to advance to Employee any expenses (including attorneys' fees) incurred by Employee in defending any civil, criminal, administrative or investigative action, suit or proceeding, to the extent related to Employee's position with Company (as described in Section 3) or providing services on behalf of Holdings, prior to the final disposition of such action, suit or proceeding; provided, that Employee must agree in writing to repay such advanced amounts if it is ultimately determined that Employee was found guilty of a criminal act, the defense of which with respect to which the advancement was made, or not entitled to indemnification from Company with respect to such action, suit or proceeding under applicable law.

11.        Withholding: No Mitigation . Company's obligations to pay Employee the compensation and make the arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstance, including any set off, counterclaim, recoupment, defense or other right that Company may have against Employee or anyone else, except that Company may cease making any future severance and non-competition payments under Section 7 in the event that Employee violates any of the restrictive covenants of Section 9. Company shall have the right to withhold all applicable federal, state or local taxes on any amount paid or payable under this Agreement. Each and every payment that Company makes under this Agreement shall be final, and Company will not seek to recover all or any part of any payment from Employee or from whosoever may be entitled to the payment, for any reason whatsoever; provided, however, that the foregoing shall not be construed to limit Company's rights or remedies under law or contract, or in equity. Employee shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Agreement, and except as otherwise provided herein, the obtaining of any such other employment shall in no event affect Company's obligations to make the payments that this Agreement requires.

12.        Mutual Nondisparagement . Employee agrees to refrain from making any statements about Holdings, Company or their respective officers or directors t


 
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