Exhibit 10.6


 


EXECUTION VERSION


 


EMPLOYMENT
AGREEMENT


 


THIS 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 and 18 only, and Troy D. Cook (“Employee”) and is dated as of May 3,
2006.


 


W I T N E S S E T H:


 


WHEREAS, the 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.


 


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.  The Company hereby employs
Employee and Employee hereby continues employment with the Company commencing
immediately following the Closing (as defined in the Stock Purchase Agreement,
by and among the Company, Holdings and the Stockholders of NPC International, Inc.,
dated as of March 3, 2006 (the “Stock Purchase Agreement”)), 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 the same date as the Closing Date (as defined in the Stock
Purchase Agreement).


 


2.                                       Term.  The initial term of this Agreement shall
commence on the Effective Date and shall continue until the earlier of (a) the
second (2nd) anniversary of the Effective Date and (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 one year periods
commencing on the expiration of the Initial Term and each 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 ninety
(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 renewal is permitted to be given under this
Agreement but in no event later than March 31 of the applicable year.


 


3.                                       Position, Duties, Responsibilities and Services.


 


3.1.                              Position, Duties and
Responsibilities.  During the Term,
Employee shall serve as Senior Vice President-Finance and Chief Financial
Officer of the 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 the Company, its subsidiaries
or divisions as may be assigned by the Board of Directors of the 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 the 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 the 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 the 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 the Employee, do not conflict with the business of
the 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 the 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 the
Company and its subsidiaries or to interfere with the performance by the
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 the 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.  The employee’s
principal place of business during the Term shall be within thirty-five (35)
miles of Lenexa, 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 Thousand
dollars ($400,000) per year, payable consistently with the Company’s current
payroll practices.  The 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.  Employee
shall receive annual written notice of the Base Salary that will be applicable
for the immediately succeeding fiscal year at least 30 days in advance of the
Renewal Deadline.


 


4.2.                              Bonus Compensation.  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: at achievement of 95% of the EBITDA
target, an amount equal to 25% of Base Salary; at achievement of 100% of the
EBITDA target, an amount equal to 50% of 


 


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Base Salary and at achievement of 105% or more of the EBITDA target, an
amount equal to 75% of Base Salary.  The
performance targets that must be achieved in order to earn the specified amount
of Bonus Compensation shall be based on the annual budget and approved by the
Board (and subject to the review of and consent by Merrill Lynch Global Private
Equity).  In addition to the Bonus
Compensation, the Board, in its sole and exclusive discretion, may award the
Employee additional bonus compensation in recognition of outstanding
performance.  The Company shall pay the
Bonus Compensation 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 year following the year in which the services in respect of such Bonus
Compensation were rendered.


 


4.3.                              Long-Term Incentive
and Equity Based Awards.  On the
Effective Date, Holdings shall grant Employee six hundred fifty thousand
(650,000) non-time vesting Series A Options to purchase an equivalent
number of common units in Holdings, seven hundred nine thousand (709,000) time
vesting Series A Options to purchase an equivalent number of common units
in Holdings, and one million seven hundred seventy-three thousand (1,773,000) Series B
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, pursuant to his rollover contribution Employee
shall receive membership interests with value of $1,300,000 (the “Management
Interests”).  Such interests and the
interests underlying the options shall be subject to the terms of the Amended
and Restated Limited Liability Company Agreement of the Company, to be entered
into at the Closing, as the same may be amended from time to time in accordance
with its terms; provided, however, that after the Closing, 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 the Company under all benefit programs,
arrangements or perquisites of the Company, including the benefit plans
referenced in Section 7.02(b) of the Stock Purchase Agreement;
provided, however, that it is agreed that the Employee shall not participate in
a plan that is equivalent to the NPC International, Inc. Non-Qualified Executive
Deferred Compensation Plan. 
Notwithstanding the immediately preceding sentence, (a) the
Employee shall receive, throughout the Term, long-term disability insurance as
in effect for the 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.


 


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 the
Company policy in effect immediately prior to the 


 


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Effective Date, but in no event less than four (4) weeks vacation
with pay in any one 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 the Company.


 


5.3.                              Car Allowance.  The Company shall provide a car allowance to
the Employee in the amount of Four Thousand Six Hundred and Two Dollars
($4,602.00) for each year of the Term.


 


6.                                       Expenses.  During the Term, the Company
shall reimburse Employee upon presentation of appropriate vouchers or receipts
and in accordance with the 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
the 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 the 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 the 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, the 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 the 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 consecutive months. 
The term “Qualified Physician” means an impartial physician competent to
diagnose and treat the illness or condition which the Employee is believed to
be suffering, selected by the Company and reasonably acceptable to the 


 


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Employee (or if the Employee is then incapable of acting for himself,
the Employee’s personal representative), who shall have personally examined the
Employee and shall have personally reviewed the employee’s relevant medical
records; provided the Company shall bear the costs of such Qualified Physician’s
services and the Employee agrees to submit to an examination by such Qualified
Physician and to the disclosure of the Employee’s relevant medical records to
such Qualified Physician.


 


7.3.                              Termination of
Employment of Employee by the Company for Cause.  The Company may terminate the Employee’s
employment for Cause (as defined below) upon receipt by the Employee of written
notice specifying the date on which such termination shall become effective and
notifying the Employee of the grounds constituting Cause (“Notice of
Termination for Cause”); provided, however, that Cause shall not
exist unless and until the Company has delivered to the 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, the 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
the 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 the Employee’s
employment, other than by reason of death or Cause, must be preceded by a
Notice of Termination given at least 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 the Employee’s employment.


 


(b)                                 Severance Payments.


 


(1)                                  If this Agreement is
terminated by the Company, other than as a result of death or disability of
Employee or for Cause (“Termination Without Cause”) or the Employee terminates
this Agreement for Good Reason, the Company shall pay Employee a severance
payment in an amount equal to the sum of (i) the Accrued Obligations (as
defined 


 


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below), plus the product of (y) the sum of the lump sum Employee’s Base
Salary and the Bonus Compensation earned by the Employee in respect of the last
year immediately preceding the year of termination, multiplied by (z) two
(2).  Such severance and non-competition
payment shall be payable in twenty four 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, and (iv) any other
amounts due the Employee under any benefit plan or in accordance with
applicable law as of the date on which the termination of employment becomes
effective.


 


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


 


(i)                                     The
assignment to the Employee of duties inconsistent with those set forth in Section 3.1
(it being acknowledged by the Employee, however, that the hiring of a Chief
Operating Officer by the 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
significant reduction in the Employee’s annual bonus opportunity; and


 


(iv)                              The
Company’s material breach of any material provision of this Agreement; provided, in any case, that the Company
shall have 30 days from the date on which the Company receives Executive’s
Notice of Termination for Good Reason to remedy any occurrence constituting
Good Reason


 


;
provided, however, that if treating any of the foregoing as Good
Reason to terminate employment would cause adverse tax consequences to Employee
under Section 409A of the Internal Revenue Code of 1986, as amended, such
event shall not be considered to constitute Good Reason to terminate
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 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.


 


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 


 


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defined below) pertaining to the business of the Company at any time
during the Term or thereafter, except (i) while employed by the Company,
in the business of and for the benefit of the 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 the Company, or by any
administrative body or legislative body (including a committee thereof) with
jurisdiction to order the Company to divulge, disclose or make accessible such
information.  For purposes of this
Agreement, “Confidential Information” shall mean non-public information
concerning the 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 the Company that, in any case, is not otherwise generally available to the
public and has not been disclosed by the 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 the Company all Confidential Information in his possession.


 


8.2.                              Employee and the 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 the Company.  Accordingly,
Employee agrees that the 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.                                       Non-Competition; Non-Solicitation.


 


9.1.                              Employee agrees that,
during the two (2) years following his termination of employment for any
reason (the “Non-Competition Period”), without the prior written consent of the
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 United States
(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 the Company; and (iii) performance
of services of any kind in any capacity for PHI; provided, however, that the
Employee shall be permitted to make and retain the investments described in Exhibit C
attached 


 


7

















 


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 the Company (and other than on behalf of the 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 the 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
the Company, or discourage such clients or customers from doing business with
the Company.


 


9.3.                              Employee and the 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 the Company. 
Accordingly, Employee agrees that the 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.                                 Indemnification; Legal Fees.  The Company
shall indemnify the Employee to the fullest extent permitted by the laws of the
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. 
The Employee shall also be entitled to such limitations on liability as
are provided in the certificate of incorporation of the Company as in effect on
the date of this Agreement. 
Additionally, the Employee will be entitled to any insurance policies
the 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 the 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, the Company
agrees to advance to the Employee any expenses (including attorneys’ fees)
incurred by the Employee in defending any civil, criminal, administrative or
investigative action, suit or proceeding, to the extent related to the Employee’s
position with the 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 the Employee must agree in writing to repay
such advanced amounts if it is ultimately determined that the 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 the Company with
respect to such action, suit or proceeding under applicable law.


 


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11.                                 Payment Obligations.  The
Company’s obligations to pay the 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 the Company may have against the
Employee or anyone else, except that the Company may cease making any future
severance and non-competition payments under Section 7 in the event that
the Employee violates any of the restrictive covenants of Section 9.  The 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 the Company makes under this Agreement shall be final, and the
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 the
Company’s rights or remedies under law or contract, or in equity.  The 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 the Company’s
obligations to make the payments that this Agreement requires.


 


12.                                 Mutual Nondisparagement.  The
Employee agrees to refrain from making any statements about Holdings, the
Company or their respective officers or directors that would disparage, or
reflect unfavorably upon the image or reputation of Holdings, the Company or
any such officer or director.  Holdings
and the Company agree to refrain from making any statements about the Employee
that would disparage, or reflect unfavorably upon the image or reputation of
the Employee.


 


13.                                 Notices.  All notices and other
communications hereunder shall be in writing and shall be deemed to have been given
if delivered personally or sent by facsimile transmission or overnight
courier.  Any such notice shall be deemed
given when so delivered personally or sent by facsimile transmission (provided
that a confirmation copy is sent by overnight courier) or one day after deposit
with an overnight courier, as follows:


 


To the
Company:


 


NPC
International, Inc.


14400
College Blvd, Suite 201


Lenexa,
Kansas  66215


 


With a
copy to:


 


Merrill
Lynch Global Private Equity


4
World Financial Center FL 23


New
York, New York 10080


Facsimile:  (212) 449-3576


Attention:  Robert F. End


Cassey
Davis; and to


 


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Shearman &
Sterling LLP


599
Lexington Avenue


New
York, NY  10022-6069


Facsimile:  (212)
848-7179


Attention:  John A.
Marzulli Jr., Esq.


Christa A. D’Alimonte, Esq.


 


To
Employee:


 


At the
last address on file with the Company counsel


 


14.                                 Entire Agreement.  This Agreement contains the
entire agreement between the parties hereto with respect to the matters
contemplated herein and supersedes all prior agreements or understandings among
the parties related to such matters.


 


15.                                 Binding Effect.  Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of
Holdings, the Company and their respective successors and assigns and upon
Employee.  “Successors and assigns” shall
mean, in the case of Holdings and the Company, any successor pursuant to a
merger, consolidation, or sale, or other transfer of all or substantially all
of the assets or interests of Holdings or the Company, as applicable.


 


16.                                 No Assignment.  Except as contemplated by Section 14
above, this Agreement shall not be assignable or otherwise transferable by
either party.


 


17.                                 Amendment or Modification; Waiver.  No
provision of this Agreement may be amended or waived unless such amendment or
waiver is authorized by the Compensation Committee of the Board and is agreed
to in writing, signed by Employee and by a duly authorized officer of the
Company, and shall not be binding upon Holdings without its written
consent.  Except as otherwise
specifically provided in this Agreement, no waiver by any party hereto of any
breach by the other party hereto of any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.


 


18.                                 Dispute Resolution.  Any
dispute or controversy arising under or in connection with this Agreement, the
Employee’s employment or termination of employment by the Company or the
Employee’s rights, compensation or benefits under this Agreement or any benefit
plan (a “Dispute”) shall be settled in accordance with the procedures described
in this Section 18.


 


18.1.                        First, the parties shall attempt
in good faith to resolve any Dispute promptly by negotiations between the
Employee and executives or directors of the Company or Holdings as the case may
be, who have authority to settle the Dispute (the “Representatives”).  Either party may give the other disputing
party written notice of any Dispute not resolved in the normal course of
business.  Within five days after the
effective date of that notice, the Employee and the Representative shall agree
upon a mutually acceptable time and place to meet and shall meet at that time
and place, and thereafter as often as they reasonably deem necessary, to
exchange relevant information and to attempt to resolve the Dispute.  The first of those meetings 


 


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shall take place within 30 days of the effective date of the disputing
party’s notice.  If the Dispute has not
been resolved within 60 days of the disputing party’s notice, or if the parties
fail to agree on a time and place for an initial meeting within five days of
that notice, either party may initiate mediation and arbitration of the Dispute
as provided hereinafter.  If a negotiator
intends to be accompanied at a meeting by an attorney, the other negotiators
shall be given at least three business days’ notice of that intention and may
also be accompanied by an attorney.  All
negotiations pursuant to this Section 18 shall be treated as compromise
and settlement negotiations for the purposes of applicable rules of
evidence and procedure.


 


18.2.                        Second, if the Dispute is not
resolved through negotiation as provided in Section 18.1, either disputing
party may require the other to submit to non-binding mediation with the
assistance of a neutral, unaffiliated mediator. 
If the parties encounter difficulty in agreeing upon a neutral, they
shall seek the assistance of JAMS in the selection process.


 


18.3.                        Any Dispute that has not been
resolved by the non-binding procedures provided in Sections 18.1 and 18.2
within 90 days of the initiation of the first of the procedures shall be
finally settled by arbitration conducted expeditiously in accordance with the
commercial arbitration rules of JAMS or of such similar organization as
the parties may mutually agree; provided,
that if one party has requested the other to participate in a non-binding
procedure and the other has failed to participate within 30 days of the written
request, the requesting party may initiate arbitration before the expiration of
the period.  The arbitration shall be
conducted by three independent and impartial arbitrators.  The Employee shall appoint one arbitrator,
the Company shall appoint a second arbitrator, and the first two arbitrators
selected shall appoint a third arbitrator. 
The arbitration shall be held in Overland Park, Kansas.  Judgment may be entered on the arbitrator’s
award in any court having jurisdiction. 
The arbitrators shall award the prevailing party in the arbitration its
costs and expenses, including reasonable attorney’s fees, incurred in
connection with the Dispute.


 


18.4.                        Notwithstanding the dispute
resolution provisions of this Section 18, either party may bring an action
in a court of competent jurisdiction in an effort to enforce the provisions of
this Section 18.


 


19.                                 Fees and Expenses.  If either
party institutes any action or proceedings to enforce any rights the party has
under this Agreement, or for damages by reason of any alleged breach of any
provision of this Agreement, or for a declaration of each party’s rights or
obligations hereunder or to set aside any provision hereof, or for any other
judicial remedy, the prevailing party shall be entitled to reimbursement from
the other party for its costs and expenses incurred thereby, including but not
limited to, reasonable attorneys’ fees and disbursements.


 


20.                                 Governing Law.  The validity, interpretation,
construction, performance and enforcement of this Agreement shall be governed
by the internal laws of the State of Kansas.


 


21.                                 Titles.  Titles to the Sections in this
Agreement are intended solely for convenience and no provision of this
Agreement is to be construed by reference to the title of any Section.


 


11

















 


22.                                 Counterparts.  This Agreement may be executed in
one or more counterparts, which together shall constitute one agreement.  It shall not be necessary for each party to
sign each counterpart so long as each party has signed at least one
counterpart.


 


23.                                 Severability.  Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms and provisions of this Agreement in any other jurisdiction.


 


24.                                 Section 409A.  If any
provision of this Agreement would, in the reasonable, good faith judgment of
the Company, result or likely result in the imposition on the Employee or any
other person of any adverse consequences under Section 409A of the
Internal Revenue Code, the Company may reform this Agreement or any provision
hereof, without the Employee’s consent, in the manner that the Company
reasonably and in good faith determines to be necessary or advisable to avoid
the imposition of such penalty tax; provided, however, that any such
reformation shall, to the maximum extent the Company reasonably and in good
faith determines to be possible, retain the economic and tax benefits to the
Employee hereunder while not materially increasing the cost to the Company of
providing such benefits to the Employee.


 


12

















 


IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first set
forth above.


 


 


	
   

  	
  NPC INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James K. Schwartz

  
	
   

  	
   

  	
  Name:

  	
  James K. Schwartz

  
	
   

  	
   

  	
  Title:

  	
  President, Chief Executive Officer and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NPC ACQUISITION HOLDINGS, LLC for the

  limited purposes of Sections 4.3, 10, 12, 15 and 18

  only

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F. End

  
	
   

  	
   

  	
  Name:

  	
  Robert F. End

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Troy D. Cook

  
	
   

  	
   

  	
   

  	
   

  	
  Troy D. Cook

  



 


13

















 


EXHIBIT A


 


NPC
ACQUISITION HOLDINGS, LLC


MANAGEMENT
OPTION PLAN


 


SECTION 1.                            Purpose.  The NPC Acquisition Holdings, LLC Management
Option Plan is intended to provide a means whereby NPC Acquisition Holdings,
LLC, a Delaware limited liability company (the “Company”), may,
through the issuance of matching options on purchased Common Units and the
grant of options (each, an “Option”) with respect to Common
Units to Participants, attract and retain such Participants and motivate them
to exercise their best efforts on behalf of the Company and its Affiliates.  The Plan is intended to allow Participants to
participate in equity value creation and to align the incentives between
Participants and the Company.


 


SECTION 2.                            Definitions.  As used in this Plan, the following terms
shall have the meanings set forth below:


 


(1)                    Affiliate.  With respect to any person or entity, any
other person or entity that directly or indirectly controls, is controlled by
or is under common control with, such first person or entity.  For the purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as applied to any person or entity, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person or entity, whether
through the ownership of voting securities, by contract or otherwise.


 


(2)                    Board.  The Managing Member of the Company, or its
designees.


 


(3)                    Beneficiary.  The individual identified in writing by the
Participant to receive benefits hereunder in the event of the Participant’s
death.  A Participant may at any time
change his beneficiary designation without notice to, or consent of, any
previously designated Beneficiary, by giving prior written notice to the Company,
such notice to be effective on the date it is received by the Company.  In the event a Participant has not designated
a Beneficiary at the time of his death, his estate shall be deemed his
Beneficiary.


 


(4)                    Cause.  Means: (i) Participant’s misappropriation
of funds, embezzlement or fraud in the performance of his duties, (ii) the
continued failure or refusal of Participant (following written notice thereof)
to carry out in any material respect any reasonable request of the Board for
the provision of services, (iii) the material breach of any material
provision of any employment agreement or of any NPC International 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 Participant of, a felony.


 


(5)                    Code.  The U.S. Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.


 


(6)                    Committee.  The Compensation Committee of the Board, or
if none, the Board.


 

















 


(7)                    Common Units.  Have the meaning
ascribed to such term in the LLC Agreement, or any other securities into which
such interests shall thereafter be changed by reason of a recapitalization,
merger, consolidation, equity split, combination, exchange of interests or the
like.


 


(8)                    Change in Control.  The first of any of the following events to
occur after the Effective Date:


 


(i)                                     any independent
third party (which shall exclude any Affiliates of the Company) (x) by
merger or otherwise is or becomes the direct beneficial owner of more than 50%
of the combined voting power of the then-outstanding securities of the Company,
NPC International or any other entity all or substantially all of whose assets
consist of all the outstanding equity interests of the Company or NPC
International, or (y) has the right to appoint a majority of the members of the
Board, in each case other than by a merger or other transaction in which the
unitholders of the Company immediately prior to the merger own a majority of the
equity interests of the surviving entity or its parent; or


 


(ii)                                  the Company or NPC
International adopts a plan of complete liquidation (other than a liquidation
into any Company Affiliate) of the Company or NPC International or consummates
the sale or disposition by the Company or NPC International of all or
substantially all of the Company’s assets to an independent third party.


 


(9)                    Disability.  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 the Participant
would be unable to resume devoting substantially his full normal working time
to his employment for a period of at least six consecutive months.


 


(10)              Effective Date.  Means the Closing Date as defined in the
Stock Purchase Agreement.


 


(11)              Eligible Employees.  The
individuals selected by unanimous approval of the Committee in its sole
discretion.


 


(12)              Equity Securities.  Has the meaning ascribed to such term in Rule 405
promulgated under the Securities Act of 1933, as amended (the “Securities
Act”), as in effect on the date hereof, and in any event includes any
common stock, any limited partnership interest, any limited liability company
interest and any other interest or security having the attendant right to vote
for directors or similar representatives.


 


(13)              Executive Management.  Means any of the following officers of the
NPC International:  the chief executive
officer, the chief operating officer, the chief financial officer, the vice
president of human resources, and the vice president of marketing.


 


(14)              Fair Value Price.  The price per Common Unit as of the date of
determination, determined by the Committee pursuant to a formula based upon NPC
International’s consolidated earnings from continuing operations before
interest, taxes and 


 


A-2

















 


depreciation or amortization for the four full fiscal quarters ending
immediately preceding the date of determination multiplied by 6.0, less funded
net debt, plus proceeds from the exercise of options, divided by the Fully
Diluted Outstanding.  Adjustments to the
Fair Value Price may be made, in the sole discretion of the Committee, to account
for a full year effect of acquisitions and divestitures, and for other
extraordinary gains or losses.


 


(15)              Franchise Agreements.  Means any location, territory or other
franchise agreement pursuant to which the Franchisor has granted the Company or
any Subsidiary of the Company the right to own and/or operate restaurants.


 


(16)              Franchisor.  Means Pizza Hut, Inc. or its Affiliates.


 


(17)              Fully Diluted Outstanding.  Means the total number of Common Units in the
Company, including Common Units underlying Options granted under the Plan,
calculated on a fully diluted basis.


 


(18)              Good Reason.  The occurrence, without the Participant’s
prior written consent, of any one or more of the following:


 


(i)                                     The
assignment to the Participant of duties inconsistent with those set forth in
any applicable employment agreement then in effect;


 


(ii)                                  In
the case of any member of Executive Management, the relocation of the principal
place of employment to a location more than 35 miles from the current principal
place of employment;


 


(iii)                               A
significant reduction in the Participant’s annual bonus opportunity; and


 


(iv)                              NPC
International’s material breach of any material provision of any employment
agreement with Participant; 


 


provided, in any
case, that NPC International shall have 30 days from the date on which it
receives Participant’s notice of termination for Good Reason to remedy any
occurrence constituting Good Reason; provided  further, however,
that in no circumstances shall an event constitute Good Reason if it would
create an inappropriate acceleration of payment that could give rise to adverse
tax consequences to a Participant under Section 409A of the Code.


 


(19)              LLC Agreement.  Means the Amended and Restated Limited
Liability Company Agreement of the Company, to be entered into at the Closing,
as the same may be amended from time to time in accordance with its terms; provided,
however, that the LLC Agreement may only be amended in accordance with Section 15.12
of the LLC Agreement.


 


(20)              NPC Holdings Equity Investment.  The amount of the aggregate equity investment
in the Company at the Closing, including, without limitation, the Hawk-Eye
Roll-Over Amount as defined in the Stock Purchase Agreement.


 


A-3

















 


(21)              NPC International.  NPC International, Inc., a Kansas
corporation, and its successors.


 


(22)              Original Purchase Price.  Means $1 per Common Unit.


 


(23)              Participant.  Each Eligible Employee who is granted an
Option pursuant to the Plan.


 


(24)              Plan.  This NPC Acquisition Holdings, LLC Management
Option Plan, as amended from time to time.


 


(25)              Qualified Physician.  An impartial physician competent to diagnose
and treat the illness or condition which the Participant is believed to be
suffering, selected by NPC International and reasonably acceptable to the Participant
(or if the Participant is then incapable of acting for himself, the Participant’s
personal representative), who shall have personally examined the Participant
and shall have personally reviewed the Participant’s relevant medical records;
provided, however, that NPC International shall bear the costs of such
Qualified Physician’s services and the Participant agrees to submit to an
examination by such Qualified Physician and to the disclosure of the
Participant’s relevant medical records to such Qualified Physician.


 


(26)              Retirement.  Means the voluntary termination of service by
a Participant at or after age 60.


 


(27)              Stock Purchase Agreement.  The Stock Purchase Agreement, dated as of March 3,
2006, by and among the Stockholders of NPC International, the Company and NPC
International.


 


(28)              Subsidiary.  A Subsidiary of any person shall mean any
entity of which:


 


(i)                                     if a corporation,
a majority of the total voting power of shares of stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time of determination owned
or controlled, directly or indirectly, collectively or individually, by such
person or by one or more Subsidiaries of such person; and


 


(ii)                                  if a partnership,
association, limited liability company or other entity, (A) the general
partner or similar managing entity and (B) a majority of the partnership,
membership or other similar ownership interest thereof is at the time of
determination beneficially owned or controlled, directly or indirectly,
collectively or individually, by such person or by one or more Subsidiaries of
such person.  For purposes of the Plan, the Company and its Subsidiaries shall be
deemed to own a majority ownership interest in any partnership, association,
limited liability company or other entity if the Company or its Subsidiaries
shall control the general partner or managing member or managing director of
any such entity.


 


SECTION 3.                            Administration.  The Plan shall be administered by the
Committee.  The Committee shall have full authority, subject to the terms of the
Plan, to select the Eligible 


 


A-4

















 


Employees to be granted
Options under the Plan, to grant Options on behalf of the Company (including
any re-issuances of Options as contemplated by Section 5), and to set the
date of grant and the other terms and conditions of such Options.  The Committee may correct any defect, supply
any omission and reconcile any inconsistency in this Plan and in any Option
granted hereunder in the manner and to the extent it shall deem desirable.  The Committee also shall have the authority
to establish such rules and regulations, not inconsistent with the
provisions of the Plan, for the proper administration of the Plan, and to
amend, modify or rescind any such rules and regulations, and to make such
determinations and interpretations under, or in connection with, the Plan, as
it deems necessary or advisable.  All
such rules, regulations, determinations and interpretations shall be final,
binding and conclusive upon all persons having an interest in the Plan.  Notwithstanding anything to the contrary in
this Plan, the discretion and authority of the Committee shall be subject to
such degree of oversight of the Board as it deems appropriate.  Furthermore, notwithstanding anything to the
contrary in this Plan, the determination by the Committee on any matter
relating to the selection of Eligible Employees or Participants, the grant of
Options or the terms and conditions of Options shall be made by the approval of
the Committee.


 


Subject to compliance with the express provisions hereof, the
Board and the Committee may act in their absolute discretion in matters within
their authority related to this Plan.  In
making any determination or in taking or not taking any action under this Plan,
the Committee or the Board, as the case may be, may obtain and may rely upon
the advice of experts, including employees of and professional advisors to the
Company.  The Committee may delegate
ministerial, non-discretionary functions to individuals who are officers or
employees of the Company.


 


No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option granted under it.


 


SECTION 4.                            Eligibility.  Eligible Employees shall be eligible to
receive Options under the Plan.  Eligible
Employees who have been granted an Option under the Plan shall be referred to
as “Participants.”  More than one Option may be granted to a
Participant under the Plan.


 


SECTION 5.                            Number of Common Units Authorized.  Options may be granted under the Plan with
respect to a maximum number of 8% of the Common Units as of the Effective Date
(the “Plan Limit”); provided that such
Plan Limit shall be subject to adjustment as hereinafter provided in Section 12.  Series A Options will represent
approximately 3% of the Common Units, consisting of matching Options as to 1%
of the Common Units which shall vest immediately upon issuance (the “Non-Time
Vesting Series A Options”) and Options as to 2% of the Common Units which
are subject to the time vesting provisions of Section 8(d)(1)(A) (“Time
Vesting Series A Options”).  A
Non-Time Vesting Series A Option shall be awarded in respect of every two
Common Units purchased by a Participant. 
Series B Options will represent the remaining 5% of the Common
Units comprising the Plan Limit.  (The
Non-Time Vesting Series A Options and the Time Vesting Series A
Options are sometimes collectively referred to herein as the “Series A
Options”).  If any Option granted under
the Plan expires, is cancelled, forfeited or otherwise terminates for any
reason whatsoever without having been exercised in full, the Common Units
subject to the unexercised portion of such Option shall continue to be
available for the granting of Options under the Plan as fully as if such Common
Units had never been subject to an Option.


 


A-5

















 


SECTION 6.                            Granting
of Options.  From time to time until
the expiration or earlier suspension or discontinuance of the Plan pursuant to Section 13,
the Committee may, on behalf of the Company, grant to Eligible Employees under
the Plan such Options as it determines are warranted, subject to the limitations
of the Plan.  The granting of an Option
under the Plan shall not be deemed either to entitle the Participant to, or to
disqualify the Participant from, any participation in any other grant of
Options under the Plan.


 


SECTION 7.                            Other Agreements.  Options granted under the Plan shall be
evidenced by written documents (“Option
Agreements”).  No Option grant
shall be enforceable against the Company until the Participant shall have
executed, and agreed to be bound by, such Option Agreements.  Upon exercise of any Option, the Participant
will be required to execute, and agree to be bound by the LLC Agreement.  The Option Agreement and the LLC Agreement
shall contain a covenant that provides that by accepting an Option and
acquiring the underlying Common Units, the Participant agrees to comply with
all of the obligations required of a holder of any direct or indirect beneficial or legal
ownership interest in the Company under the terms of the Franchise Agreements.


 


SECTION 8.                            Terms
and Conditions of Options.  Options
granted under the Plan shall include expressly or by reference the following
terms and conditions, as well as such other terms and conditions as the
Committee shall deem desirable:


 


(a)                                  Number
of Common Units.  The Option
Agreement shall contain a statement of the number of Common Units to which the
Option pertains, with a number of the Options designated as Non-Time Vesting Series A
Options, Time Vesting Series A Options and Series B Options.


 


(b)                                 Exercise
Price.  The exercise price per Option
(the “Exercise Price”) for grants
made at or about the time of Closing shall be (i) in the case of Series A
Options, the price determined by dividing the NPC Holdings Equity Investment by
the number of outstanding common units (without regard to options) as of
immediately following the Closing (as defined in the Stock Purchase Agreement),
and (ii) in the case of Series B Options, two times the Exercise
Price of the Series A Options. 
Thereafter, the Exercise Price shall be established in the Committee’s sole
discretion.  Notwithstanding any of the
foregoing, in no event shall the Exercise Price be less than the “fair market
value” of the underlying Common Units, as determined in accordance with Section 409A
of the Code and any other applicable law, regulation or accounting rule.


 


(c)                                  Term.  Subject to earlier termination as provided
below, the term of each Option shall be ten years from the date of grant (the “Grant Date”).  The Grant Date of each Option shall be as
soon as practicable following the Closing for the initial grants, and otherwise
as determined by the Committee.


 


(d)                                 Vesting
of Options.


 


(1)                                  General
Rule.  Except for the Non-Time
Vesting Series A Options or as otherwise expressly provided herein, the
vesting of Options requires continued employment or service through each
applicable vesting date as a condition to the vesting 


 


A-6

















 


of the applicable installment of the Option and the
rights and benefits thereunder. 
Employment or service for only a portion of a vesting period, even if a
substantial portion, will not entitle the Participant to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or services as set forth in the
Plan.  Subject to the terms and
conditions of the Plan, Options other than Non-Time Vesting Series A
Options shall vest in accordance with the following schedule:


 


(A)                              Time
Vesting Series A Options shall vest over a five year period, as to 20% of
the Common Units annually on each anniversary of the Closing, subject to the
Participant’s continued service and shall accelerate on the occurrence of a
Change in Control; and


 


(B)                                Series B
Options shall vest only upon the occurrence of a Change in Control on or
prior to the expiration of the Option. 
Notwithstanding the foregoing, with respect to any Option that is
subject to Section 409A of the Code and payment or settlement of the
Option is to be accelerated in connection with the Change in Control, no Change
in Control will be deemed to have occurred for purposes of the Plan and any
Option Agreement unless such event(s) also constitutes a “change in the
ownership”, “change in the effective control” or a “change in the ownership of
a substantial portion of the assets” of the Company or NPC International, as
applicable, as defined under Section 409A of the Code.


 


(2)                                  Forfeiture
upon Termination for Cause.  If a
Participant’s employment by or service with the Company (and its Subsidiaries)
is terminated for Cause, both the vested and the non-vested portion of his or
her Option shall terminate on the date of such termination of employment or
service.


 


(e)                                  Post-Termination
Exercise Period.  If a Participant’s
employment by or service with the Company (and its Subsidiaries) is terminated
for any reason other than for Cause at any time prior to the date on which his
or her Option is fully vested, the non-vested portion of such Option shall
terminate on the date of such termination of employment or service.  The vested portion of the Option, to the
extent not exercised within the 90-day period following the date of such
termination shall terminate at the close of business on the last day of such 90-day
period.


 


(f)                                    Method
of Exercising Option; Payment Amount. 
An Option, to the extent vested and exercisable, may be exercised, in
whole or in part, from time to time until the expiration or termination of the
Option, by giving written notice of exercise (the “Exercise Notice”) to the Company at its principal office,
which notice shall specify the number of Options subject to the Exercise
Notice, and tendering payment of the Exercise
Price.  The Committee shall determine the
various methods by which the Exercise Price may be paid and the form of
payment, which at the Participant’s election shall be either cash or Common
Units, and the methods by which Common Units shall be delivered or deemed to be delivered to Participants.


 


A-7

















 


(g)                                 Non-Transferability.  No Option shall be assignable or transferable
by the Participant, and during the lifetime of the Participant, the Option
shall be exercisable only by him or her or by his or her guardian or legal
representative.


 


(h)                                 Resale
Restrictions.  Common Units acquired
upon exercise of Options have not been, and will not be, registered under the
Securities Act, or under any state securities laws.  Such Common Units may not be resold in the
United States unless so registered or pursuant to an applicable exemption from
registration.  In addition,
such Common Units may not be sold or otherwise transferred
except in accordance with any transfer and ownership restrictions contained in
the LLC Agreement, the Franchise Agreements and any other policies between the
Company or any of its Affiliates and the Franchisor, and such Common
Units shall bear any restrictive legends required by the
LLC Agreement and such Franchise Agreements.


 


(i)                                     Rights
as a Holder.  A Participant shall
have no rights as a holder with respect to any Common Units covered by his or
her Option until the Participant becomes a holder of such common units.  Except as provided in Section 12, no
adjustment shall be made for dividends or other rights as a holder with respect
to such Common Units.


 


SECTION 9.                            Mandatory
Calls.  Upon the occurrence of a Call
Event (as defined in the LLC Agreement), the Company shall require the
Participant to sell all, but not less than all, and the Company shall purchase
all, but not less than all, of the Participant’s then-vested Options in an
amount equal to the product of (A) the difference between (i) the
lower of (x) the Original Purchase Price and (y) the Fair Value Price as of the
date of termination, and (ii) the Exercise Price, times (B) the
number of Common Units covered by such Options; provided, however,
that upon the occurrence of a Call Event due to the Participant’s death,
Disability, Retirement, termination of the employment of a Participant without
Cause or resignation with Good Reason, the price paid for the then-vested
Options shall be an amount equal to the product of (A) the difference
between (i) the greater of the Original Purchase Price and the Fair Value
Price as of the date of death, Disability, Retirement, termination without
Cause or resignation with Good Reason and (ii) the Exercise Price, times (B) the
number of Common Units covered by such Options.


 


SECTION 10.                     Compliance
with Legal Requirements and  Debt Instruments.


 


(a)                                  Legal
Requirements.  The grant of Options
and any payment in respect of Common Units and the other obligations of the
Company under this Plan shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any regulatory or
governmental agency, including, without limitation, rules and regulations
of the Securities and Exchange Commission or the applicable rules and
regulations of any securities exchange or inter-deal quotation system on which
securities of the Company are listed or traded as may be required.  Common Units shall not be issued unless the
exercise of such Option and the issuance and delivery of such Common Units
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act, and the rules and regulations
promulgated thereunder, and all applicable state securities laws.  The Board, in its sole discretion, may
postpone the issuance or delivery of any securities as the Board may consider
appropriate and may require a Participant to make such representations and
furnish such information as it may 


 


A-8

















 


consider
appropriate in connection with the issuance or delivery of any such securities
in compliance with applicable laws, rules and regulations.


 


(b)                                 Credit
Agreement Limitations.  The Company may delay any cash payment with
respect to all or a portion of any Option or Common Unit that could cause or be
reasonably likely to cause, a default or an event of default of the Company
under any guarantee or other agreement under which the Company, or any of its
Affiliates has borrowed money or guaranteed any such loan, or if such cash
payment would constitute or is reasonably likely to constitute a breach, or
result in a default or an event of default of the Company under such agreement,
until such time as the payment can be
made without such breach or default.  In
such event, the Company shall issue a promissory note to the Participant in an
amount equal to the obligation.


 


(c)                                  Franchise Agreement Requirements.  The grant of Options and any payment in
respect of Common Units and the other
obligations of the Company under this Plan shall be subject to the obligations
of the Company under the Franchise Agreements. 
Common Units shall not be issued unless the exercise of
such Option and the issuance and delivery of such Common Units pursuant thereto shall comply with all relevant provisions of the
Franchise Agreements and any other policies of the Franchisor with respect to
transfer or ownership of Common Units.  The Board, in its sole discretion, may
postpone the settlement of any Option as the Board may consider appropriate and
may require a Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of any such securities in compliance with the Franchise Agreements.


 


(d)                                 No Disadvantage to Management Unitholders.  This
Section 10 of the Plan shall be administered by the Committee in a manner
that does not disadvantage the management unitholders disproportionately to the
other unitholders.


 


SECTION 11.                     Tax
Withholding.  The obligation of the
Company to deliver any Common Units shall be subject to all applicable federal,
state, local and foreign tax withholding requirements.  If the exercise of any Option is subject to
the withholding requirements of applicable federal, state, local or foreign tax
laws, the Committee, in its discretion (and subject to such withholding rules as
shall be adopted by the Committee), may permit the Participant (or the
Participant’s personal representative or Beneficiary, as the case may be) to
pay or provide for payment in cash, or by delivery of Common Units owned by the
Participant, the amount of any taxes that the Company determines it may be
required to withhold with respect to such exercise.


 


SECTION 12.                     Capital Adjustments.


 


(a)                                  Dilution
and other Adjustments.  In the event
the outstanding Common Units shall be changed due to a reclassification,
recapitalization, merger, dividend, equity split or any other transaction, the
Plan Limit and the number of Common Units and the Exercise Price under
outstanding Options shall be proportionately adjusted to reflect such event,
and the Board shall make such adjustments as it deems appropriate and equitable
in the number and kind of securities subject to the Option, and as to any other
matters which relate to Options and that are affected by the events referred to
above.  Such adjustments shall be final,
conclusive and binding for all purposes.


 


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(b)                                 Effect
of Reorganization.  In the event that
(i) the Company is merged or consolidated with another entity, (ii) all
or substantially all the assets of the Company are acquired by another
corporation, person or entity, or (iii) the Company is reorganized,
dissolved or liquidated (each such event in (i), (ii) or (iii) being
hereinafter referred to as a “Reorganization Event”), then the Committee
may in its sole discretion, subject to any other provisions of the Plan
applicable to such Reorganization Event, make upon consummation of such
Reorganization Event any or all of the adjustments described in Section 12(a) as
are necessary or advisable in the sole discretion of the Committee to provide
the Participant with an economic benefit that is not materially different from
that to which he would have been entitled had such event not occurred (as
determined by the Committee in its sole discretion).


 


(c)                                  Certain
Other Adjustments.  On a Change in
Control, a Reorganization Event or any other similar transaction that the
Committee in its sole discretion determines is subject to this Section 12(c),
the Committee may in its sole discretion convert outstanding Options into (i) shares
of common stock or other equity securities or equity-related interests
(including options or phantom units) of the Company or another entity that is a
party to (or an Affiliate of such party) such transaction or (ii) cash or
cash equivalents, provided that any such conversion provides the Participant
with an economic benefit that is not materially different from that to which he
would have been entitled had such conversion not occurred (as determined by the
Committee in its sole discretion).


 


(d)                                 Certain
Adjustments to Performance Goals. 
The Committee may in its sole discretion, adjust any performance goals
to reflect any material and non-recurring non-operational items that are beyond
the control of NPC International’s management.


 


SECTION 13.                     Amendment or Discontinuance of the Plan.  The Board may, at any time, terminate,
discontinue, amend, modify or suspend the Plan in whole or in part.  No Options may be granted during any
suspension of this Plan or after termination of this Plan, but the Committee
shall retain jurisdiction as to Options then outstanding in accordance with the
terms of this Plan.  Notwithstanding the
foregoing, no such termination, suspension, modification, discontinuance or
amendment shall materially impair the rights of any holder of an outstanding
Option without the consent of such holder; provided, however, that the Board or Committee shall have broad
authority to amend the Plan or any Option granted under the Plan without the
consent of the holder thereof to the extent necessary or desirable to comply
with, or take into account changes in, applicable tax laws, securities laws,
accounting rules, employment laws and other applicable laws, rules and
regulations.


 


SECTION 14.                     Rights.  Neither the adoption of the Plan nor any
action of the Board or the Committee shall be deemed to give any individual any
right to be granted an Option, or any other right hereunder.  Nothing
contained in this Plan (or in any other documents under this Plan or in any
Option) shall confer upon any Participant any right to continue in the employ
or other service of the Company or any Subsidiary of the Company, constitute
any contract or agreement of employment or other service or affect a
Participant’s status as an employee at will, nor shall interfere in any way
with the right of the Company or any Subsidiary to change a person’s
compensation or other benefits, or to retire a Participant at any time pursuant
to its retirement rules or otherwise to terminate his or her employment or
service at any time for any reason whatsoever. 
Nothing in this Section 14, however, is intended to adversely
affect any express 


 


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independent right of such
person under a separate employment or service contract, other than an Option
Agreement.


 


SECTION 15.                     Indemnification of Board and Committee.  Without limiting any other rights of
indemnification which they may have from the Company and any of its Affiliates,
the members of the Board and the members of the Committee shall be indemnified
by the Company against all costs and expenses reasonably incurred by them in
connection with any claim, action, suit, or proceeding to which they or any of
them may be a party by reason of any action taken or failure to act under, or
in connection with, the Plan, or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit, or proceeding, except a
judgment based upon a finding of willful misconduct or recklessness on their
part.  Upon the making or institution of
any such claim, action, suit, or proceeding, the Board or Committee member
shall notify the Company in writing, giving the Company an opportunity, at its
own expense, to handle and defend the same before such Board or Committee
member undertakes to handle it on his or her own behalf.


 


SECTION 16.                     Termination of Plan.  Unless earlier terminated pursuant to Section 13,
the Plan and all authority granted hereunder shall terminate absolutely at
12:00 midnight on                ,
2016, and no Options hereunder shall be granted thereafter, but previously
granted Options shall remain outstanding in accordance with their applicable
terms and conditions and the terms and conditions of the Plan.


 


SECTION 17.                     Governing Law; Severability.  The laws of the state of Delaware shall
govern the operation of, and the rights of Participants under, the Plan, the
Option Agreements and any Options granted thereunder.  If a court of competent jurisdiction holds any
provision invalid and unenforceable, the remaining provisions of this Plan
shall continue in effect.


 


SECTION 18.                     Section 409A
of the Code.  Notwithstanding any
contrary provision in the Plan or an Option Agreement, if any provision of the
Plan or an Option Agreement contravenes any regulations or guidance promulgated
under Section 409A of the Code or could cause an Option to be subject to
the interest and penalties under Section 409A of the Code, such provision
of the Plan or any Option Agreement may be modified by the Company without
consent of the Participant to maintain, to the maximum extent practicable, the
original intent of the applicable provision without violating the provisions of
Section 409A of the Code.  Moreover,
any discretionary authority that the Board or Committee may have pursuant to
the Plan shall not be applicable to an Option that is subject to Section 409A
of the Code, to the extent such discretionary authority will contravene Section 409A
of the Code or the regulations or guidance promulgated thereunder.


 


SECTION 19.                     No Corporate Action Restriction.  The existence of this Plan, the Option
Agreements and the Options granted hereunder shall not limit, affect or
restrict in any way the right or power of the Board or the members of the
Company to make or authorize: (a) any adjustment, recapitalization,
reorganization or other change in the capital structure or business of the
Company or any Affiliate, (b) any merger, amalgamation, consolidation or
change in the ownership of the Company or any Affiliate, (c) any issue of
bonds, debentures, capital, preferred or prior preference securities ahead of
or affecting the equity securities (or the 


 


A-11

















 


rights thereof) of the Company or any Affiliate, (d) any
dissolution or liquidation of the Company or any Affiliate, (e) any sale
or transfer of all or any part of the assets or business or securities of the
Company or any Affiliate, or (f) any other corporate act or proceeding by
the Company or any Affiliate.  No
Participant, Beneficiary or any other person shall have any claim under any
Option or Option Agreement against any member of the Board or the Committee, or
the Company or any employees, officers or agents of the Company or any
Affiliate, as a result of any such action.


 


SECTION 20.                     Other Company Benefit and
Compensation Programs. 
Payments and other benefits received by a Participant under an Option
granted pursuant to this Plan shall not be deemed a part of a Participant’s
compensation for purposes of the determination of benefits under any other
employee welfare or retirement benefit plans or other arrangements, if any,
provided by the Company or any Affiliate, except as may be required under such
plans or by law.  Options under this Plan
may be made in addition to, in combination with, as alternatives to or in
payment of grants, awards or commitments under any other plans or arrangements
of the Company or its Affiliates.


 


SECTION 21.                     Plan Not Funded; Transferability.
 No
Participant, Beneficiary or other person shall have any right, title or
interest in any fund or in any specific asset of the Company by reason of any
Option.  Neither the provisions of this
Plan (or of any related documents), nor the creation or adoption of this Plan,
nor any action taken pursuant to the provisions of this Plan shall create, or
be construed to create, a trust or escrow of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary or other
person.  To the extent that a Participant,
Beneficiary or other person acquires a right to receive payment pursuant to any
Option hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Company. 
At the time of payment to Participants, all Common Units so paid shall
be validly issued.


 


SECTION 22.                     Headings.  Headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of this Plan or any
provision thereof.


 


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EXHIBIT B


 


Description of Perquisites for Term


 


1.                                       Use of the Company airplane for up
to 20 hours per year which is acknowledged to constitute compensation
reportable in Form W-2.


 


2.                                       A matching gift on a
dollar-for-dollar basis of up to $10,000 annually made to organizations
qualifying under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended.


 


3.                                       A complete bi-annual medical
examination at the Cooper Clinic in Dallas, Texas and associated travel
expenses.


 


4.                                       The other perquisites made available
to the Employee by the Company as of the Effective Date that have been
disclosed to the Purchaser (as defined in the Stock Purchase Agreement)), which
are the same as those provided to rank and file employees.


 


5.                                       Tax, financial planning and legal
services in an aggregate amount not to exceed $7,500 for each year during the
Term.


 


B-1

















 


EXHIBIT C


 


Excepted Investments and Activities


 


A.                                   Investments, Monitoring Thereof and Related Activities:


 


1.                                       Oread
Holdings LLC (manager of NPC Capital Partners)


 


(a)                                  NPC
Capital Partners LLC, provided further that in no event shall NPC Capital
Partners LLC invest in any business or entity that is engaged in any activity
prohibited in Section 9.1 of the Employment Agreement to which this Exhibit C
forms a part.


 


(i)                                     Tuck-away
Shawnee (a multi-family housing complex in Shawnee, Kansas)


 


(ii)                                  Hutton
Farms (a multi-family housing complex in Lawrence, Kansas)


 


(iii)                               Hutton
Farms West (a new housing development in Lawrence, Kansas)


 


(iv)                              Wasatch
Valley Pizza, LLC (Pizza Hut franchise in Salt Lake City), to the extent of the
investment as of the date hereof ONLY, with any further investment therein
being prohibited.


 


(v)                                 Nexus
Medical (a medical device company in Lenexa, Kansas)


 


(b)                                 Oread
Capital Partners LLC (75% owner of Hawk-Eye Pizza LLC)


 


B.                                     Board Memberships:


 


Various Boards of organizations associated with the
University of Kansas


 


Future memberships on Boards, or committee of Boards,
of for-profit and not-for-profit entities that are not competitors of the
Company and do not require a material amount of Employee’s working time, in
each case after consulting with the Company and seeking its consent to serve in
that capacity, which consent shall not be unreasonably withheld.


 


C-1