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”).
4.1. 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
2
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
3
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
4
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.
5.1.
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.
5
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.
6
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.
(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-
7
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
8
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.
9
|
|
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.
10
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