Document:

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 

 

2

 

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 

 

3

 

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 

 

4

 

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 

 

5

 

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 

 

6

 

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.

 

8

 

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

 

9

 

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 

 

10

 

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.

 

A-9

 

(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 

 

A-10

 

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.

 

A-12

 

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-1Exhibit 10.7

 

NPC INTERNATIONAL, INC.

 

DEFERRED COMPENSATION

AND

RETIREMENT PLAN

 

As Amended and Restated,
Effective January 1, 2005

 

 

Table of
Contents

 

	
  Section 1.
  Establishment

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 2.
  Definitions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 3.
  Eligibility for Participation

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 4.
  Deferral of Compensation and Bonus Compensation

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 5.
  Company Matching Contributions and Company Discretionary Contributions

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 6.
  Elections of Timing and Form of Payment

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 7.
  Investment of Deferral and Vesting Accounts

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 8.
  Vesting

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 9.
  Designation of Beneficiaries

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 10.
  Merger, Consolidation and Sale of Assets

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 11.
  Rights of Participants

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 12.
  Administration

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 13.
  Claims and Appeals

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 14.
  Amendments and Termination

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 15.
  Applicable Laws

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 16.
  409A Compliance

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 17.
  Incompetency

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 18.
  Expenses

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 19.
  Notices

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 20.
  Withholding and Deductions

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 21.
  Invalidity of Provisions

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 22.
  Tax Advantages Not Guaranteed

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 23.
  Return of Company Contributions

  	
   

  	
  25

  

 

i

 

NPC INTERNATIONAL, INC.

DEFERRED
COMPENSATION AND RETIREMENT PLAN

 

Section 1.
Establishment and Amendment

 

NPC INTERNATIONAL, INC. hereby amends and restates in its
entirety, effective January 1, 2005, its deferred compensation and
retirement plan for executives as described herein, which is known as the “NPC
INTERNATIONAL, INC. DEFERRED COMPENSATION AND RETIREMENT PLAN” (the “Plan”).
The Plan is intended to constitute an unfunded plan maintained primarily to
provide deferred compensation to a select group of management or highly
compensated employees.

 

Section 2.
Definitions

 

2.1                               Definitions. Whenever used herein, the following terms
shall have the meanings set forth below:

 

(a)                                  “Acquiring
Person” means any one
person, or more than one person acting as a group. For purposes of this
definition, persons will not be considered to be “acting as a group” solely
because they purchase or own stock or assets of the same corporation at the
same time, or as a result of the same public offering. However, persons will be
considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Company. If a person, including an
entity, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a
corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.

 

(b)                                 “Board” means the Board of Directors of the Company.

 

(c)                                  “Beneficiary” means the persons or entities designated
pursuant to Section 9 who are to receive, upon a Participant’s death, payment
of the amounts credited to the Participant’s Deferral Account and the
Nonforfeitable amounts credited to his Vesting Account as of the date of his
death.

 

(d)                                 “Bonus
Compensation” with
respect to an active Participant or eligible Executive means the active
Participant’s or eligible Executive’s bonus compensation, as determined by
Company, for the period to which his relevant Bonus Compensation Deferral
Election relates.

 

(e)                                  “Bonus
Compensation Deferral Election” means
the election made by an active Participant or eligible Executive, pursuant to Section 4.2,
to defer receipt of a portion of his Bonus Compensation earned by him in the
calendar year to which the election relates.

 

2

 

(f)                                    “Change of
Control” means the
occurrence of a “Change in the Ownership of the Company,” a “Change in
Effective Control of the Company”, or a “Change in the Ownership of a
Substantial Portion of the Company’s Assets” as such terms are further defined below:

 

(1)                                  Change in
the Ownership of the Company. A Change in the Ownership of the Company shall occur if any Acquiring
Person, other than one or more Excluded
Persons (as defined below), acquires ownership of stock of the Company that,
together with stock held by such Acquiring Person, constitutes more than 50% of
the total fair market value or total voting power of the stock of the Company. If an Acquiring Person owns 50% of the total fair
market value or total voting power of the stock of the Company, the acquisition
of additional stock by such Acquiring Person shall not be constitute a Change
in Ownership of the Company. An increase in the percentage of stock owned by
any Acquiring Person, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as an acquisition
of stock for purposes of this paragraph. In addition, this paragraph applies
only when there is a transfer of stock of a corporation (or issuance of stock
of a corporation) and stock in such corporation remains outstanding after the transaction.

 

(2)                                  Change in
Effective Control of the Company. A Change in Effective Control of the Company shall occur if either:

 

(i)                                     any Acquiring Person, other than one or more
Excluded Persons (as defined below), acquires
(or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
Company possessing 35 percent or more of the total voting power of the stock of
the Company, or

 

(ii)                                  A majority of members of the Company’s board
of directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Company’s board of directors prior to the date of the appointment or election.

 

If a person, or more than one person acting as a group (as defined
below) owns 35% of the total fair market value or total voting power of the
stock of the Company, the acquisition of additional stock by such person or
group shall not constitute a change in effective control of the Company.

 

(3)                                  Change in
the Ownership of a Substantial Portion of the Company’s Assets. A Change in the Ownership of a Substantial

 

3

 

Portion of the Company’s assets shall occur if any Acquiring Person,
other than one or more Excluded Persons (as defined below), acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
Gross Fair Market Value equal to or more than 40 percent of the total gross
fair market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions, except for transfers of assets described below. A
transfer of assets by the Company is not treated as a Change in the Ownership
of a Substantial Portion of the Company’s Assets if the assets are transferred
to:

 

(i)                                     a shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to its stock;

 

(ii)                                  an entity, 50 percent or more of the total
value or voting power of which is owned, directly or indirectly, by the
Company;

 

(iii)                               a person, or more than one person acting as a
group, that owns, directly or indirectly, 50 percent or more of the total value
or voting power of all the outstanding stock of the Company; or

 

(iv)                              an entity, at least 50 percent of the total
value or voting power of which is owned, directly or indirectly, by a person
described in subparagraph (iii).

 

Excluded
Persons. For
purposes of this subsection (e), Excluded Persons means Gene Bicknell, his
spouse, any of his lineal descendants, and any entity at least 50% owned by any
of such persons.

 

(g)                                 “Committee” means the Stock Option and Compensation
Committee of the Board.

 

(h)                                 “Company” means NPC International, Inc., a Kansas
corporation, or any successor thereto.

 

(i)                                     “Company
Discretionary Contribution” means
the amount deposited by the Company and credited by the Trustee pursuant to Section 5.2
to the Deferral Account or Vesting Account maintained by the Trustee on behalf
of an active Participant or eligible Executive. Company Discretionary
Contributions may be Class A Contributions or Class B
Contributions. Unless otherwise so designated in writing, all Company
Discretionary Contributions shall be Class A Contributions.

 

4

 

(j)                                     “Company
Matching Contribution” means
the amount deposited by the Company and credited by the Trustee pursuant to Section 5.1
to the Deferral Account or Vesting Account maintained by the Trustee on behalf
of an active Participant or eligible Executive.

 

(k)                                  “Compensation” with respect to an Executive means the
Executive’s taxable wages reportable on Form W-2, less (i) Bonus
Compensation, and (ii) gains from the exercise of stock options granted by
the Company, payable to the Executive during the pay period to which the
relevant Compensation Deferral Election relates.

 

(1)                                  “Compensation
Deferral Election” means
the election made by an active Participant or eligible Executive, pursuant to Section 4.1,
to defer receipt of all or a portion of his Compensation earned in the calendar
year to which the election relates.

 

(m)                               “Deferral
Account” means the account
maintained by the Trustee under the Trust, on behalf of a Participant, to which
the Company deposits and the Trustee credits at the direction of the Company (i) the
Compensation and Bonus Compensation the Participant elects to defer pursuant to
his Compensation Deferral Election and/or Bonus Compensation Deferral Election,
and (ii) the Company Matching Contributions and Company Discretionary
Contributions pursuant to Sections 5.1 and 5.2 which are entirely
Nonforfeitable when made. Although this Plan may refer to a Deferral
Account as “the Participant’s Deferral Account” or as “his Deferral Account,”
the amounts credited to such Deferral Account shall at all times be subject to
the terms and conditions of the agreement and declaration establishing the
Trust, and thus subject to the claims of the Company’s general creditors.

 

(n)                                 “Executive” means an employee of the Company who is:

 

(1)                                  in a select group of management or highly
paid employees;

 

(2)                                  exempt from the minimum wage and maximum hour
requirements of the Fair Labor Standards Act, as described in 29 U.S.C. Section 213(a) and
regulations promulgated thereunder; and

 

(3)                                  a “highly compensated employee” within the
meaning of Internal Revenue Code Section 414(q), or a regional manager, or
both. With respect to a newly hired employee, if the employee’s annualized
projected Compensation and Bonus Compensation for his first calendar year of
employment exceed the limit described in Section 414(q)(B)(i), he shall be
considered a “highly compensated employee” for such first calendar year of
employment, for purposes of this Plan.

 

5

 

(o)                                 “Gross Fair
Market Value” means
the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such assets.

 

(p)                                 “Nonforfeitable” as applied to Company Matching Contributions
and Company Discretionary Contributions (and earnings thereon) deposited by the
Company and credited by the Trustee at the direction of the Company to a
Participant’s Deferral Account or Vesting Account, means the portion of such
deposits and credits to which the Participant or his Beneficiary are “vested”
in accordance with the vesting rules described in Section 8 and the
other terms and conditions of the Plan, subject only to the claims of the
Company’s general creditors as described in the agreement and declaration
establishing the Trust.

 

(q)                                 “Participant” means a person who has amounts currently
deposited and credited to a Deferral Account or Vesting Account, or both,
maintained by the Trustee on his behalf pursuant to the terms of the Plan. An
active Participant is a Participant who is actively employed by the Company as
an Executive and who is actively participating in the Plan.

 

(r)                                    “Trust” means, with regard to (i) Compensation
and/or Bonus Compensation deposited by the Company and credited by the Trustee
on behalf of a Participant pursuant to his Compensation Deferral Election
and/or Bonus Compensation-Deferral Election, as the case may be, and (ii) the
Company Matching Contributions and Company Discretionary Contributions
deposited by the Company and credited by the Trustee pursuant to Sections 5.1
and 5.2 and which are entirely Nonforfeitable when made, the NPC International, Inc.
Deferred Compensation and Retirement Plan Group Trust.

 

With regard to Company Matching Contributions and Company Discretionary
Contributions deposited with and credited by the Trustee on behalf of a
Participant pursuant to Sections 5.1 and 5.2 and which are not entirely
Nonforfeitable when made, the term “Trust” means the individual trust
established to account for such credits solely on behalf of the individual
Participant and his Beneficiaries (but subject to the rights of the Company’s
general creditors, pursuant to the terms and conditions of the agreement and
declaration establishing the trust).

 

(s)                                  “Trustee” means A.G. Edwards Trust Company or the bank
or trust company designated as its successor trustee under the agreement and
declaration establishing the Trust

 

(t)                                    “Vesting
Account” with respect to a
Participant means the account maintained by the Trustee under the Trust, on
behalf of the Participant, to which the Company deposits and the Trustee
credits at the direction of the Company the Company Matching Contributions
and/or Company

 

6

 

Discretionary Contributions (if any) pursuant to Sections 5.1 and 5.2
and which are not entirely Nonforfeitable when made. Although this Plan may refer
to a Vesting Account as “the Participant’s Vesting Account” or as “his Vesting
Account,” the amounts credited to such Vesting Account shall at all times be
subject to the terms and conditions of the agreement and declaration
establishing the Trust, and thus subject to the claims of the Company’s general
creditors.

 

(u)                                 “Vesting Service” with respect to a Participant means the
aggregate total of the Participant’s whole years (and fractional portions of
years) of employment by the Company, its predecessors and successors. The
Committee may designate, from time to time and in its sole discretion,
such other service (either for the Company or otherwise) that shall be
considered Vesting Service with respect to any particular Participant or
eligible Executive.

 

2.2                               Gender and
Number. Except when
otherwise indicated by the context, any masculine terminology used herein shall
also include the feminine gender, and the definition of any term herein in the
singular shall also include the plural.

 

Section 3. Eligibility for
Participation

 

3.1                               Eligibility. An employee of the Company shall be eligible
to participate in the Plan with respect to a calendar year if:

 

(a)                                  He qualifies as an Executive with respect to
such year; and

 

(b)                                 He is not eligible to participate, in such
calendar year, in the Company’s qualified cash or deferred arrangement under Section 40l(k)
of the Internal Revenue Code; and

 

(c)                                  The Committee has selected such Executive to
participate with respect to such year; where the Committee has once selected
the Executive to participate, and such Executive ceases to be eligible with
respect to a year due solely to his eligibility to participate in the Company’s
qualified cash or deferred arrangement for such year, and the Executive
thereafter (for a subsequent year) ceases to be eligible to participate in the
cash or deferred arrangement he shall automatically be eligible to recommence
participation in this Plan without further approval by the Committee, provided
the Executive continues to meet the definition of “Executive” and the Committee
has not affirmatively declared the Executive to be ineligible.

 

Notwithstanding the foregoing, an active Participant or eligible
Executive shall not be eligible to have Company Matching Contributions
deposited and credited to his Vesting Account until the later of (i) the
first pay period beginning after the date on which he is first credited with a
year of service and (ii) the first pay period beginning after the date on
which he commences participation in this Plan. A “year of service” for this
purpose means a 12-consecutive month

 

7

 

period,
beginning on the active Participant’s or eligible Executive’s employment
commencement date or any anniversary of that date, during which he has at least
1,000 hours of service. An “hour of service” for this purpose means an hour
with respect to which an active Participant or eligible Executive is entitled
to payment for the performance of services for the Company, or entitled to
payment even though no services are performed for the Company (e.g., for periods
of paid leave of absence, illness, holiday, layoff, jury duty, etc.). A
Participant who satisfies this requirement, terminates employment, and then
again becomes an eligible Executive on account of reemployment shall be
eligible for Company Matching Contributions upon again becoming an active
Participant.

 

3.2                               Inactive
Participants. If at a
future date an active Participant no longer meets the requirements for
participation in this Plan for reasons other than termination of employment,
the Participant shall become an inactive Participant, retaining all of the
rights accorded Participants by this Plan, except the right to make additional
deferrals of Compensation and/or Bonus Compensation pursuant to Section 4,
and to have additional Company Matching Contributions and/or Company
Discretionary Contributions deposited and credited to his Deferral Account or
Vesting Account. Such an individual shall remain an inactive Participant unless
and until he again becomes an active Participant by again qualifying as an
Executive entitled to participate in this Plan.

 

Amounts deposited and credited to an active Participant’s Vesting
Account which are not considered Nonforfeitable shall be forfeited pursuant to Section 5
at the time the Participant no longer meets the requirements for participation
on account of termination of employment.

 

Section 4. Deferral of
Compensation and Bonus Compensation

 

4.1                               Deferral of
Compensation. At the
times and in the manner specified below, an active Participant or an eligible
Executive may make an irrevocable election in writing to defer all or a
portion of his Compensation until a specified date in the future.

 

(a)                                  Timing and
Nature of Compensation Deferral Election. An active Participant or eligible Executive
described in the preceding paragraph may make a Compensation Deferral
Election, prior to December 31 of any calendar year, to defer receipt of
any percentage of his Compensation, in whole numbers (e.g., 1%, 7%, etc.),
earned during pay periods occurring between January 1 and December 31
of the following calendar year.

 

(b)                                 Elections by
Newly Eligible Executives. Notwithstanding
anything in this Section 4.1 to the contrary, an Executive who first
becomes an eligible Executive during a calendar year may make the election
described in subsection (a) above, as applicable, within 30 days
after the date he first becomes an eligible Executive. Such an election shall
be effective only with respect to Compensation earned after the date of the
election.

 

(c)                                  Uniform Payroll
Deductions. Amounts deferred
pursuant to this Section shall be deducted from the Participant’s
Compensation on a uniform basis

 

8

 

for each pay period during the portion of the calendar year to which
the Compensation Deferral Election relates.

 

(d)                                 Crediting of
Deferred Amounts. As soon
as practicable after Compensation subject to a Compensation Deferral Election
would, but for the provisions of this Plan, be payable to an active Participant
or eligible Executive, the Company shall deposit with the Trustee, and direct
the Trustee to credit to his Deferral Account, the amount of the Compensation
that the active Participant or eligible Executive elected to defer.

 

4.2                               Deferral of
Bonus Compensation. At the
times and in the manner specified below, an active Participant or an eligible
Executive may make an irrevocable election in writing to defer all or a
portion of his Bonus Compensation until a specified date in the future.

 

(a)                                  Timing and
Nature of Bonus Compensation Deferral Election. An Active Participant or eligible Executive
described in the preceding paragraph may make a Bonus Compensation
Deferral Election, prior to December 31 of any calendar year, to defer
receipt of any percentage (up to 90%) of his Bonus Compensation, in whole
numbers (e.g., 1%, 7%, etc.), earned in and payable with respect to the
following calendar year. An active Participant or eligible Executive who elects
to defer more than 90% of his Bonus Compensation shall be deemed to have
elected to defer 90% of his Bonus Compensation.

 

(b)                                 Elections by
Newly Eligible Executives. Notwithstanding
anything in this Section 4.2 to the contrary, when an Executive first
becomes an eligible Executive, he may make the election described in subsection (a) above,
as applicable (to be applied to the Bonus Compensation earned by and payable to
him with respect to the calendar year in which he is first an eligible
Executive), within 30 days after the date he first becomes an eligible
Executive. Such an election shall be effective only with respect to the portion
of the Bonus Compensation earned after the date of the election. The portion of
the Bonus Contribution earned after the date of the election shall be
determined by multiplying x times y, where x is such Participant’s Bonus
Compensation for the calendar year and y is a percentage determined by dividing
the remaining days of the calendar year by the total number of days in the
calendar year.

 

(c)                                  Crediting of
Deferred Amounts. As soon
as practicable after Bonus Compensation that is subject to a Bonus Compensation
Deferral Election would, but for the provisions of this Plan, be payable to an
active Participant or eligible Executive, the Company shall deposit with the
Trustee, and direct the Trustee to credit to his Deferral Account, the amount
of the Bonus Compensation the active Participant or eligible Executive elected
to defer.

 

9

 

Section 5.
Company Matching Contributions and Company Discretionary Contributions

 

5.1                               Company
Matching Contributions. At the
time, or as soon as practicable after, the Company deposits with the Trustee,
and directs the Trustee to credit on behalf of an active Participant or
eligible Executive, the amounts described in Sections 4.1(d) and 4.2(c), the
Company shall deposit with the Trustee a Company Matching Contribution in the
amount determined below, and direct the Trustee to credit such Company Matching
Contribution to such active Participant’s or eligible Executive’s (i) Deferral
Account, if the Company Matching Contribution is entirely Nonforfeitable when
made, or (ii) Vesting Account, if the Company Matching Contribution is not
entirely Nonforfeitable when made. See Section 8 for rules concerning
whether an amount is considered Nonforfeitable.

 

The Company Matching Contribution shall be in an amount equal to the
lesser of:

 

(a)                                  The sum of the deferred Compensation and
deferred Bonus Compensation deposited with and credited by the Trustee on
behalf of the active Participant or eligible Executive for the applicable pay
period; or

 

(b)                                 An amount equal to four percent (4%) of the
sum of the Compensation and Bonus Compensation payable to the active
Participant or eligible Executive for the pay period to which the Compensation
Deferral Election (and/or Bonus Compensation Deferral Election) giving rise to
the deposits and credits described in (a) above relates.

 

EXAMPLE: Participant B is not 100% vested pursuant to
the rules in Section 8. He has on file a Compensation Deferral
Election calling for the deferral of 10 percent of his Compensation, per pay
period, earned between January 1 and December 31, 1999. For the first
pay period in February, 1999, the Company owes Participant B $4,000 in
Compensation. Pursuant to his Deferral Election, the Company deposits $400 with
the Trustee, directs the Trustee to credit the $400 to Participant B’s Deferral
Account, and pays the balance to Participant B (less applicable withholdings).
The Company also deposits with the Trustee, and the Trustee credits to
Participant B’s Vesting Account, a Company Matching Contribution equal to $160,
or four percent of the Compensation payable to Participant B for the applicable
pay period. Note that if Participant B had been 100% vested pursuant to the rules in
Section 8; the Matching Contribution would have been deposited and
credited to his Deferral Account.

 

EXAMPLE; Assume the same facts as above, except that
Participant B also has on file a Bonus Compensation Deferral Election calling
for the deferral of 50 percent of his Bonus Compensation earned in 1999. For
the first pay period in April, the Company owes Participant B $4,000 in
Compensation, and $8,000 in Bonus Compensation as the Participant’s bonus for
the first calendar quarter of 1999. Pursuant to Participant B’s Deferral Elections,
the Company deposits $4,400 ($400 in Compensation plus $4,000 in Bonus
Compensation) with the Trustee, and directs the Trustee to credit this amount
to Participant B’s Deferral Account, and pays the balance to Participant B
(less applicable withholdings).

 

10

 

The Company also deposits $480 (four percent of the
sum of the Compensation and Bonus Compensation payable to Participant B for the
applicable pay period) with the Trustee, and directs the Trustee to credit that
amount to Participant B’s Vesting Account.

 

5.2                               Company
Discretionary Contribution. At
such times and in such amounts as the Company in its sole discretion may decide,
the Company may deposit with the Trustee, and in writing direct the Trustee
to credit, a Company Discretionary Contribution to the Deferral Account or
Vesting Account maintained by the Trustee on behalf of one or more
Participants. The Company Discretionary Contribution shall be deposited and
credited to a Participant’s Deferral Account if the Company Discretionary
Contribution is entirety Nonforfeitable when made, and shall be deposited and
credited to his Vesting Account in other cases.

 

Section 6. Elections of
Timing and Form of Payment

 

6.1                               Electing the
Time of Payment.

 

(a)                                  Compensation
and Bonus Compensation. An
active Participant or eligible Executive shall, in his Compensation Deferral
Election and/or Bonus Compensation Deferral Election (as the case may be),
elect to receive payment of the deferred amount (and earnings thereon):

 

(1)                                  not later than the 15th day of the
third month following the calendar year in which the date of termination of
employment occurs;

 

(2)                                  on a specified deferral ending date at least
two years after the calendar year to which the deferral election applies;

 

(3)                                  the earlier of the dates specified in (1) and
(2) above;

 

(4)                                  the earlier of the date specified in (1) above,
or not later than the 15th day of the third month following the
calendar year in which the date of a Change of Control occurs; or

 

(5)                                  the earlier of (i) the date specified in
(3) above, or (ii) not later than the 15th day of the third month after a Change of
Control.

 

EXAMPLE:
Participant A completes a Compensation Deferral Election on December 1,
1998, for deferral of a portion of his Compensation payable for 1999.
Participant A elects to receive his deferred Compensation on July 1, 2002.
The election is permissible because his deferral ending date is a date certain,
after the second calendar year that follows the 1999 calendar year, which is
the year to which the deferral election relates.

 

Participant B similarly completes a Compensation Deferral Election
form, but elects to receive her deferred Compensation not later than the 15th
day of the third month following the calendar year in which the date of
termination of her employment occurs. The election is permissible.

 

11

 

Participant C similarly completes a Compensation Deferral Election form and;
like Participant A, selects a deferral ending date of July 1, 2002. But
Participant C further elects to receive his deferred Compensation on the
earlier of (i) not later than the 15th day of the third month
following the calendar year in which the date of his termination of employment
occurs, and (ii) the July 1, 2002, deferral ending date. The election
is permissible.

 

Participant D similarly completes a Compensation Deferral Election form and, like Participant A,
selects a deferral ending date of July 1, 2002. But Participant D further
elects to receive his deferred Compensation on the earlier of (i) not
later than the 15th day of the third month following the calendar
year in which the date of his termination of employment occurs, (ii) the July 1,
2002, deferral ending date, or (iii) not later than the 15th
day of the third month after a Change of Control. The election is permissible.

 

(b)                                 Company
Matching Contributions and Discretionary Contributions.

 

(1)                                  Company
Matching Contributions. Any
Company Matching Contribution (and earnings thereon) deposited with the Trustee
and credited on behalf of a Participant on account of his deferral of
Compensation and/or Bonus Compensation shall be paid at the time at which is
paid the deferred Compensation and/or deferred Bonus Compensation to which such
Company Matching Contribution relates.

 

(2)                                  Company
Discretionary Contributions. Prior to a calendar year with respect to which the Company may deposit
with the Trustee, and direct the Trustee to credit, a Company Discretionary Contribution
on behalf of a Participant, an active Participant
or Executive may elect, with respect to any such credit of a Company
Discretionary Contribution, to receive payment thereof (and earnings thereon),
on a date described in subsections (1), (2), (3), (4) or (5) of subsection (a) above.
Such an election will be effective only with respect to a Company Discretionary
Contribution that becomes fixed and determined after the date of such election.
In the event no such election is made, the active Participant or eligible Executive
shall be deemed to have elected to receive payment of such Company
Discretionary Contribution upon termination of employment.

 

Notwithstanding the preceding paragraph, an Executive who first becomes
an eligible Executive during a calendar year may make the election
described in the preceding paragraph within 30 days after the date he first
becomes an eligible Executive.

 

12

 

(3)                                  No Payment of
Forfeitable Amounts. Notwithstanding
anything in this Section 6.1 to the contrary, payment of Company Matching
Contributions or Company Discretionary Contributions deposited with the Trustee
and credited to a Participant’s Vesting Account shall be made to the
Participant or his Beneficiary only to the extent such Contributions (and
earnings thereon) are considered Nonforfeitable at the time such payment is
otherwise due.

 

(c)                                  Exceptions. Notwithstanding anything in subsections (a) or
(b) above, or in any other provision of the Plan, the following additional
rules apply to the time at which amounts are payable by this Plan:

 

(1)                                  Death of
Participant. The
balance of a Participant’s Deferral Account, and the Nonforfeitable balance of
his Vesting Account, shall be paid to the Participant’s Beneficiary payable not
later than the 15th day of the third calendar month after the close
of the calendar year in which the Participant’s death occurred.

 

(2)                                  Disability of
Participant. The
balance of a Participant’s Deferral Account, and the Nonforfeitable balance of
his Vesting Account, shall be paid to the Participant upon the Participant’s
disability (not later than the 15th day of the third calendar month
after the close of the calendar year in which Disability occurred). For this
purpose, “disability” of a Participant shall be deemed to have occurred if the
Participant (a) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (b) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than 3
months under an accident and health plan covering employees of Company. For
purposes of this Plan, it is not necessary that a determination of disability
be made by the Social Security Administration, but a Participant who is
determined to be totally disabled by the Social Security Administration shall
be deemed to have suffered a disability for purposes of this Plan.

 

(3)                                  Unforeseeable
Emergency. Upon application by
the Participant, distributions from a Participant’s Deferral Account, and the
Nonforfeitable balance of his Vesting Account, may be paid to the
Participant in the event of an Unforeseeable Emergency.

 

An Unforeseeable Emergency will be deemed to have occurred if the
payment of benefits is for or on account of a severe financial hardship of the
service provider or beneficiary resulting from:

 

13

 

(i)                                     an illness or accident of the service
provider or beneficiary, the service provider’s or beneficiary’s spouse, or the
service provider’s or beneficiary’s dependent (as defined in section 152(a));

 

(ii)                                  loss of the service provider’s or beneficiary’s
property due to casualty (including the need to rebuild a home following damage
to a home not otherwise covered by insurance, for example, not as a result of a
natural disaster);

 

(iii)                               the imminent foreclosure of or eviction from
the service provider’s or beneficiary’s primary residence;

 

(iv)                              the need to pay for the funeral expenses of a
spouse or a dependent; or

 

(v)                                 other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the service
provider or beneficiary.

 

Whether a service provider or beneficiary is faced with an
unforeseeable emergency permitting a distribution under this paragraph is to be
determined based on the relevant facts and circumstances of each case, but, in
any case, a distribution on account of unforeseeable emergency may not be
made to the extent that such emergency is or may be relieved through
reimbursement or compensation from insurance or otherwise, by liquidation of
the service provider’s assets, to the extent the liquidation of such assets
would not cause severe financial hardship, or by cessation of deferrals under
the arrangement. The payment made pursuant to this subsection shall not
exceed the amount the Committee, in its complete discretion, determines is
necessary to satisfy the great financial hardship or unforeseeable emergency.
In addition, the purchase of a home and the payment of college tuition are not
unforeseeable emergencies.

 

(d)                                 Final Payment
from Trust. The final payment
from the Trust to a Participant or Beneficiary may be adjusted to account
for prior overpayments or underpayments attributable to estimates of earnings
allocable to prior distributions of deferred Compensation, deferred Bonus
Compensation, Company Matching Contributions, and/or Company Discretionary
Contributions.

 

6.2                               Electing the Form of
Payment.

 

(a)                                  Compensation
and Bonus Compensation. Each
active Participant or eligible Executive shall, in his Compensation and Bonus
Compensation Deferral Elections, elect the form in which the Plan shall
pay his deferred

 

14

 

Compensation and Bonus Compensation (and earnings thereon). Such
election of the form of payment shall apply to that Compensation Deferral
Election and/or Bonus Compensation Deferral Election (as the case may be)
and earnings thereon. Such an active Participant or eligible Executive may elect
that such amounts be paid:

 

(1)                                  in a single lump sum;

 

(2)                                  in five substantially equal annual
installments, adjusted annually for earnings on the unpaid balance (payable not
later than the 15th day of the third calendar month after the close
of each calendar year); or

 

(3)                                  in ten substantially equal annual
installments, adjusted annually for earnings on the unpaid balance (payable not
later than the 15th day of the third calendar month after the close
of each calendar year).

 

In the event no such
election is made, such amounts shall be paid in a lump sum.

 

(b)                                 Company
Matching Contributions and Discretionary Contributions.

 

(1)                                  Company
Matching Contributions. Any
Company Matching Contribution (and earnings thereon) deposited with the Trustee
and credited on behalf of a Participant on account of his deferral of Compensation
and/or Bonus Compensation shall be paid in the form in which is paid the deferred Compensation
and/or deferred Bonus Compensation to which such Company Matching Contribution
relates.

 

(2)                                  Company Discretionary
Contributions. Each
active Participant or eligible Executive shall, in the annual deferral election concerning Company
Discretionary Contributions that the Company may make on his behalf, elect
the form in which the Plan shall pay any Company Discretionary
Contribution (and earnings thereon) made with respect to the year to which the
election relates. The active Participant or eligible Executive may elect
that such amounts be paid in any of the forms described in subsections (1), (2) or
(3) in subsection (a) above. In the event no such election is made, such amounts shall
be paid in a lump sum.

 

(c)                                  Subsequent
Changes in Form of Payment. Subject to limitations stated in the next sentence, a Participant may during
2006 change his election as to the form and timing of payment of deferred
Compensation, Bonus Compensation and/or a Company Discretionary Contribution
(and earnings thereon). Notwithstanding the foregoing an election that is not
an initial election but is made between January 1, 2006 and December 31,
2006 shall not be effective for benefits payable in 2006. Installment

 

15

 

payments shall be treated as a series of payments for purposes of
the subsequent payment election rules of Code Section 409A. After December 31,
2006, upon application to the Committee, and with the approval in its sole
discretion of the Committee, a Participant may make a subsequent election
to receive payment of deferred Compensation, Bonus Compensation and/or a
Company Discretionary Contribution (and earnings thereon) in any of the forms
described in paragraphs (1), (2) or (3) of subsection (a) above,
notwithstanding the initial election as to form as reflected in the
pertinent deferral election form(s), provided that the following conditions are
met:

 

(1)                                  such election may not take effect until
at least 12 months after the date on which the election is made;

 

(2)                                  the payments that are subject to such
election (excluding payments upon death, disability, unforeseeable emergency or
change of control) must be delayed at least 5 years from the date the payments
would have otherwise been made; and

 

(3)                                  in the case of a distribution upon a
specified date or age, such election is made at least 12 months prior to the
date the payment is scheduled to be paid (or in the case of installment
payments, 12 months prior to the date the first amount was scheduled to be
paid).

 

(d)                                 Exceptions. Notwithstanding anything in subsections (a), (b) or
(c) above, or any other provision of the Plan, the following additional rules apply
to the form in which amounts are payable by this Plan:

 

(1)                                  Death of
Participant. Subject
to the requirements of subsections (a) and (c) of this section, a
Participant may designate, in his Beneficiary designation on file with the
Committee, the form in which payments on account of his death should be
made to his Beneficiary. In the event the Participant fails to designate a form of
death benefits, death benefits shall be paid in a single lump sum.

 

(2)                                  Disability of Participant. Subject to the requirements of subsections (a) and
(c) of this section, a Participant may elect the form in which
payments made pursuant to subsection 6.1(c)(2) shall be made. If the
Participant fails to timely make such election, payment shall be made in a
single lump sum.

 

(3)                                  Unforeseeable
Emergency. Payments made
pursuant to subsection 6.1(c)(3) shall be made in a single lump sum.

 

Section 7. Investment of Deferral and Vesting Accounts

 

The Deferral Account and Vesting Account maintained by the Trustee on
behalf of a Participant shall be credited with earnings (and losses) resulting
from investment by the Trustee.

 

16

 

Participants
may request that amounts deposited and credited to their respective
Deferral Accounts and/or Vesting Accounts be invested in particular
investments, chosen from a set of options established by the Committee. The
Participants’ requests shall not be binding, however, and the Committee, in its
sole discretion, may elect to:

 

(a)                                  instruct the Trustee to decline to honor
Participant’s requests,

 

(b)                                 direct the Trustee to invest amounts
deposited and credited to Deferral Accounts and/or Vesting Accounts in another
manner, or

 

(c)                                  permit the Trustee to invest amounts
deposited and credited to Deferral Accounts and/or Vesting Accounts in the
manner the Trustee considers most appropriate.

 

Section 8. Vesting

 

8.1                               Deferral
Account. Deferred
Compensation, Bonus Compensation, Company Matching Contributions and Company
Discretionary Contributions (and earnings thereon) deposited and credited to an
active Participant’s or eligible Executive’s Deferral Account shall at all
times be considered entirely Nonforfeitable (that is, 100% vested).

 

(a)                                  Deferred
Compensation and Bonus Compensation. In no event shall a Participant’s Deferred
Compensation or Bonus Compensation be deposited and credited other than to his
Deferral Account.

 

(b)                                 Company
Matching Contributions. Company
Matching Contributions shall be deposited and credited to an active Participant’s
or eligible Executive’s Deferral Account only if at the time such Company
Matching Contributions are made (i) the active Participant or eligible
Executive is 100% vested pursuant to the vesting schedule set forth in Section 8.2(a) below,
and the Committee has not elected to apply additional vesting requirements to
such Company Matching Contributions (as described below), or (ii) the
active Participant or eligible Executive is not 100% vested pursuant to the
vesting schedule set forth in Section 8.2(a) below, but the
Committee has elected to treat such Company Matching Contributions as entirely
Nonforfeitable when made, in which event such accelerated vesting of the
Company Matching Contributions shall be described by the Committee in writing, and
such writing shall thereafter be considered a part of this Plan.

 

(c)                                  Company
Discretionary Contributions. Class A
Company Discretionary Contributions shall be deposited and credited to an
active Participant’s or eligible Executive’s Deferral Account only if at the
time such Company Matching Contributions are made the active Participant or
eligible Executive is 100% vested pursuant to the vesting schedule set
forth In Section 8.2(a) below.

 

17

 

Class B Company Discretionary Contributions shall be deposited and
credited to an active Participant’s or eligible Executive’s Deferral Account
only if at the time such Company Discretionary Contributions are made the
Committee has elected to treat such Company Discretionary Contributions as
entirely Nonforfeitable when made, in which event such accelerated vesting of
the Company Discretionary Contributions shall be described by the Committee in
writing, and such writing shall thereafter be considered a part of this Plan.

 

8.2                               Vesting
Account. Company Matching
Contributions and Company Discretionary Contributions (and earnings thereon)
not deposited and credited to an active Participant’s or eligible Executive’s
Deferral Account shall be deposited and credited to his Vesting Account. Such
amounts shall be considered Nonforfeitable (i.e., “vested”) according to the rules set
forth below.

 

(a)                                  Company
Matching Contributions. Company
Matching Contributions (and earnings thereon) deposited and credited to a
Participant’s Vesting Account shall be considered Nonforfeitable (that is, the
Participant shall be considered “vested” in such amounts) according to the
following vesting schedule:

 

	
  Years
  of Vesting Service

  	
   

  	
  Nonforfeitable Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fewer than 1

  	
   

  	
  0

  	
  %

  
	
  At least 1 but fewer
  than 2

  	
   

  	
  25

  	
  %

  
	
  At least 2 but fewer
  than 3

  	
   

  	
  50

  	
  %

  
	
  At least 3 but fewer
  than 4

  	
   

  	
  75

  	
  %

  
	
  4 or more

  	
   

  	
  100

  	
  %

  

 

Notwithstanding the foregoing, the Committee reserves the discretion to
apply, with respect to one or more Participants, and/or with respect to such
Matching Contributions as the Committee shall designate, a different vesting schedule (“discretionary
vesting schedule”) which the Committee shall articulate in writing and which
shall thereafter be considered part of this Plan.

 

(b)                                 Company Discretionary
Contributions. Class A
Company Discretionary Contributions (and earnings thereon) deposited and
credited to a Participant’s Vesting Account shall be considered Nonforfeitable
according the schedule described in (a) above (without regard to the
last paragraph thereof).

 

Class B Company Discretionary Contributions (and earnings thereon)
deposited and credited to a Participant’s Vesting Account shall be considered
Nonforfeitable at the time and in the manner prescribed by the Committee in the
writing designating such Contributions as Class B

 

18

 

Contributions. Such writing shall thereafter be considered part of
this Plan.

 

(c)                                  Termination
Prior to Vesting. In the
event a Participant terminates employment (by death, total and permanent
disability, retirement or otherwise) prior to the date on which the Company
Matching Contributions and/or Company Discretionary Contributions (and earnings
thereon) deposited and credited to his Vesting Account are considered Nonforfeitable,
such forfeitable Contributions shall thereafter be considered forfeited by the
Participant and, to the extent permitted by the agreement and declaration
establishing the Trust, shall immediately revert to the Employer. A Participant
shall not be deemed to have terminated his employment, notwithstanding his
failure to perform services for the Company, to the extent he remains on
the Company’s rolls during a period of authorized paid or unpaid leave of
absence.

 

(d)                                 Payment of
Forfeitable Contributions. In
the event amounts deposited and credited to an active Participant’s Vesting
Account would, but for this subsection, be payable to him prior to the date on
which such Contributions are considered Nonforfeitable pursuant to subsections (a) or
(b) above, payment of such Contributions shall be deferred until the date
on which such Contributions are considered Nonforfeitable due to additional
Vesting Service accrued by the active Participant. Payment shall be made not
later than the 15th day of the third calendar month after the close
of each calendar year in which such Contributions become Nonforfeitable.

 

In the event the Participant’s employment is terminated (by death,
total and permanent disability, retirement or otherwise) prior to the date on
which such Contributions (and earnings thereon) are considered as
Nonforfeitable, such Contributions shall thereafter be considered forfeited by
the Participant and, to the extent permitted by the agreement and declaration
establishing the Trust, shall immediately revert to the Employer. A Participant
shall not be deemed to have terminated his employment, notwithstanding his
failure to perform services for the Company, to the extent he remains on
the Company’s rolls during a period of authorized paid or unpaid leave of
absence.

 

8.3                               Vesting
Determinations. The
Committee’s determination concerning the extent to-which a Participant or
eligible Executive is considered “vested,” and the extent to which the Company
Matching Contributions and/or Company Discretionary Contributions (and earnings
thereon) deposited and credited to a Participants Vesting Account are
considered Nonforfeitable shall be final and binding on all Participants and
their Beneficiaries, as described in Section 12.

 

19

 

Section 9. Designation of
Beneficiaries

 

9.1                               General Rule. A Participant may designate a
Beneficiary or Beneficiaries who are to receive upon his death the payments
that otherwise would have been paid to him. Subject to the requirements of
Section 6.2, such
Beneficiary designation may include an election concerning the form in
which death benefits are to be paid by the Plan to the Beneficiary or
Beneficiaries. All designations shall be in writing and shall be effective only
if and when delivered to the Committee or its designee during the lifetime of
the Participant.

 

9.2                               Special Rule for
Married Participants. Notwithstanding
Section 9.1, the spouse of a married Participant shall be deemed to be the
Participant’s sole primary Beneficiary, unless the Participant designates a primary
Beneficiary other than his spouse and the spouse consents to such designation
in writing, on a form the Committee or its designee shall provide, and the
spouse’s signature is notarized.

 

9.3                               Changing Beneficiary
Designations. Subject
to Section 9.2, a Participant may from time to time during his
lifetime, change his Beneficiary or Beneficiaries by a written instrument
delivered to the Committee or its designee. The term “Beneficiary” may include
a trust, so long as the trust survives the Participant’s death.

 

9.4                               Failure to
Designate a Beneficiary. In the
event that a Participant is not survived by a Beneficiary, or if for any reason
a Beneficiary designation shall be ineffective in whole or in part, the distribution
that otherwise would have been paid to such Participant shall be paid to his
estate, and in such event the term “Beneficiary” shall include his estate.

 

Section 10. Merger,
Consolidation and Sale of Assets

 

10.1                        Merger. In the event the Company desires to
consolidate with, merge into, or transfer all or substantially all of its
assets to another entity (hereinafter referred to as a “Successor Employer”),
the Company and such Successor Employer may agree that the Successor
Employer shall assume the Company’s obligations under this Plan in whole or in
part. In no event shall such merger, consolidation or transfer extinguish the
Company’s or the Successor Employer’s obligations to Participants and their
Beneficiaries under this Plan.

 

10.2                        Acquisition by
Another Employer. In the
event the Company is sold to another corporation or other party(ies) (“New
Company”), the Company may agree with such New Company that the New
Company shall assume the obligations under this Plan in whole or in part. In no
event shall such sale extinguish the Company’s or New Company’s obligations to
Participants and their Beneficiaries under this Plan.

 

Section 11. Rights of
Participants

 

Notwithstanding the depositing and crediting of amounts to the Deferral
Account and/or Vesting Account maintained by the Trustee on behalf at a
Participant, the right of the Participant, or his Beneficiary, to receive a
distribution under this Plan shall be an unsecured claim against the general
assets of the Company. Participants and Beneficiaries shall have the status of
general unsecured creditors of the Company. This Plan constitutes a mere
promise by the Company to make benefit payments in the future.

 

20

 

The Deferral Account or Vesting Account maintained by the Trustee on
behalf of a Participant may not in any way be encumbered or assigned by a
Participant or his Beneficiary.

 

Nothing in this Plan shall give any Participant the right to be
retained as an Executive or an employee of the Company, affect the right of the
Company to remove any Executive or employee, or give any Executive or employee
(or his Beneficiary) the right to receive a particular amount of Compensation,
Bonus Compensation or Company Discretionary Contribution from the Company.

 

Section 12. Administration

 

12.1                        Administrative
Committee. The Committee shall
administer the Plan. The Committee may appoint an administrative committee
(the “Administrative Committee”) to assist it in the administration of the
Plan. The Administrative Committee may act on behalf of the Committee with
respect to all matters concerning the Plan, except for those matters the
Committee specifically reserves, in this Plan or otherwise, for its own action.
The initial members of the Administrative Committee shall be Troy D. Cook and
James K. Schwartz. The Board or the Committee may remove, replace, or
appoint members of the Administrative Committee at any time.

 

12.2                        Powers of
Administrative Committee. The
Committee shall have the power to interpret the Plan and to determine all
questions that arise under it. Such power includes, for example, the
discretionary authority necessary to determine eligibility for benefits and to
construe the terms of the Plan. All payments of benefits under the Plan shall
be made by the Company or by the Trustee in accordance with the terms of this
Plan and the agreement and declaration establishing the Trust. The decision of
the compensation committee upon all matters within the scope of its authority
shall be final and binding on all parties, shall be subject to the most
deferential standard on review, and shall not be affected by any actual or
alleged conflict of interest. No member of the Committee or the Administrative
Committee may act, in his capacity as a member of the Committee or
Administrative Committee, with respect to a matter concerning his eligibility
or benefits under the Plan.

 

Section 13. Claims and
Appeals

 

13.1                        Claims for
Benefits; Initial Processing. Claims
for benefits under the Plan normally will be approved or denied by the
Committee within 90 calendar days after they are received by the Committee or
its designee. If an extension of time is required to process the claim, the
extension will not exceed 90 calendar days, and the claimant shall be provided
notice of any extension. The notice shall explain the reason for the extension
and when a decision will be made. Claims not resolved prior to the end of the
extension may be deemed denied.

 

13.2                        Claim Denial. If a claim for benefits is denied (or deemed
denied), the Committee or its designee shall provide the claimant with written
notice reflecting the reasons for the denial, with a specific reference to the
Plan provisions upon which the decision was based. The notice shall also
reflect any additional information that may be necessary for the claimant’s
claim to be approved.

 

21

 

13.3                        Appealing a
Denied Claim. A
claimant may appeal the denial of a claim by writing the Committee and
stating that he wishes to appeal. In order to be considered, the appeal must be
received by the Committee or its designee no more than 90 calendar days after
notice of the denial is provided (or, if no notice is provided, then after the
earliest date on which the claimant is entitled to deem the claim denied).

 

13.4                        Processing
Appeals. If a claimant
appeals a denial of a claim, the Board shall review the claim and any
additional information furnished by the claimant. The Board shall decide the
appeal within 60 calendar days after it is received, but in unusual
circumstances may delay resolution of the appeal for an additional 60
calendar days. The claimant shall be notified of any delay within 60 calendar
days after the appeal is received by the Committee or its designee. After the
appeal is decided, the Board shall notify the claimant in writing of its
decision, and explain how the appeal was decided and what Plan provisions were
relied upon.

 

Section 14.
Amendments and Termination

 

14.1                        Amendment. The Company in its absolute discretion, without
notice, may at any time and from time to time, modify or amend, in whole
or in part, any or all of the provisions of the Plan. No such modification or
amendment may, without the consent of a Participant (or his Beneficiary in the
case of his death) reduce the right of a Participant (or his Beneficiary, as
the case may be) to the payment of any amount deposited and credited to
his Deferral Account and any Nonforfeitable amount deposited and credited to
his Vesting Account under the Plan as of the date of such modification or
amendment. Any modification or amendment of the vesting schedule described
in Section 8.2 shall not apply to any amounts deposited and credited to a
Participant’s Vesting Account as of the date of such modification or amendment,
unless the Participant otherwise consents in writing.

 

14.2                        Suspension and
Termination. The
Company in its absolute discretion, without notice, at any time may suspend
or terminate the Plan. In addition, the Committee may suspend or terminate
an active Participant’s further participation in the Plan at any time. Other
than earnings on a Participant’s Deferral Account or Vesting Account credited
under Section 7, no additional Compensation or Bonus Compensation may be
deferred, and no additional Company Matching Contributions or Company
Discretionary Contributions shall be deposited or credited to the Deferral
Account and/or Vesting Account of any Participant following suspension or
termination of the Plan, or to such Accounts of an inactive Participant
following termination of his or her participation in the Plan. Upon termination
of a Participant’s participation in the Plan, distribution of a Participant’s
Plan benefit shall be made in the manner and at the time described under the
Plan’s normal provisions.

 

Upon suspension of the Plan, distribution of a Participant’s Plan
benefit shall be made in the manner and at the time described under the Plan’s
provisions, and the Trust shall not terminate until all monies on deposit
thereunder are either paid to Participants and their Beneficiaries, or returned
to the Employer, as provided for under the agreement and declaration
establishing the Trust. Upon suspension of the Plan, a Participant whose
Vesting Account balance includes amounts that are not Nonforfeitable under Section 8
hereof, shall continue to be credited with vesting service, for purposes of Section 8,
for and on account of his service with the Company after suspension of the
Plan.

 

22

 

In the event the Company elects
to terminate the Plan, all forfeitable amounts then on deposit with and
credited to Participants’ Vesting Accounts shall be deemed Nonforfeitable and,
notwithstanding anything herein to the contrary, all Plan benefits shall be
paid in a lump sum not later than the 15th day of the third calendar
month after the close of each calendar year in which termination of the Plan
occurred. The Company represents and warrants that in the event the Company
elects to terminate the Plan, the Company shall comply with applicable
requirements under Code Section 409A and regulations issued thereunder
with respect to termination of the Plan.

 

Section 15. Applicable Laws

 

The Plan shall be construed, administered, and governed in all respects
under and by the laws of the State of Kansas, to the extent federal law does
not apply.

 

Section 16. 409A Compliance

 

In the event that any provision of this Plan shall be determined to
contravene Code Section 409A, the regulations promulgated thereunder,
regulatory interpretations or announcements with respect to Section 409A,
any such provision shall be void and have no effect and may be amended by
the Company without the consent of the Participant, for the purpose of Section 409A
compliance. Moreover, this Plan shall be interpreted at all times in such a
manner that the terms and provisions of the Plan comply with Code Section 409A,
the regulations promulgated thereunder, and regulatory interpretations or
announcements with respect to Section 409A. The Company shall have the
authority to void any Participant election hereunder if necessary to maintain
the Plan in compliance with Code Section 409A.

 

Section 17. Incompetency

 

Every person receiving or claiming payments under this Plan shall be
conclusively presumed to be mentally competent until the date on which the
Committee or its designee receives written notice, in a form and manner
acceptable to the Committee, that such person is incompetent and that a
guardian, conservator, or other person, legally vested with the care of his estate
has been appointed. In the event a guardian or conservator or the estate of any
person receiving or claiming payments under this Plan shall be appointed by a
court of competent jurisdiction, benefit payments may be made to such
guardian or conservator, provided that proper proof of appointment and
continuing qualification are furnished in a form and manner acceptable to
the Committee or its designee. Any such payment so made shall be a complete
discharge of any liability therefor.

 

Section 18. Expenses

 

Costs of administration of the Plan and all taxes imposed on the Plan
or Trust shall be paid by the Company. Participants’ Deferral Accounts or
Vesting Accounts shall not be reduced for these amounts. Notwithstanding the
foregoing, Participants’ Deferral Accounts and Vesting Accounts shall bear the
expense of any and all transaction costs and fees associated with the
investment of their Accounts and any per capita Trustee’s fee. The aggregate
total of any Trustee’s fees based on the aggregate value of assets in the Trust
(both the Group Trust and Individual Trusts) may be apportioned among the
Accounts of Participants on a pro rata (in the

 

23

 

proportion
that a Participant’s Account balances bear to the Account balances of other
Participants) or per capita basis, in the discretion of the Committee.

 

Section 19. Notices

 

Any notice or election required or permitted to be given hereunder
shall be in writing. Participant elections shall be in the form prescribed
by the Committee, and shall be deemed to be filed with the Committee:

 

(a)                                  On the date it is personally delivered to the
Committee (or its designee), or

 

(b)                                 Five business days after it is sent by
registered or certified mail, addressed to the Committee (or its designee) at
the Company’s address.

 

Section 20. Withholding and
Deductions

 

All payments made under the
Plan by the Company or the Trustee to any Participant or Beneficiary, shall be
subject to applicable withholding and to such other deductions that are
required by applicable law, and to the delivery to the Committee (or its
designee) or the Trustee of any documents, applications or other information
deemed necessary by the Committee or the Trustee, in their sole-discretion, as
a condition precedent to payment.

 

Section 21. Invalidity of
Provisions

 

If any provision of the Plan is held or found to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provision had not been included. Similarly, in the event any provision of the
Plan is held or found to be ineffective or unenforceable with respect to
allowing for the deferral of income taxation as intended by the Plan, such
provision shall be severed from the provisions of the Plan that are so
effective or enforceable, and such latter provisions shall be considered to
constitute a separate arrangement.

 

Section 22. Tax Advantages
Not Guaranteed

 

Neither the Company, the Committee, the Administrative Committee, nor
any other person guarantees that any particular Participant or Beneficiary will
achieve the tax advantages contemplated by this Plan, and neither the Company,
the Committee, the Administrative Committee or any other person indemnifies or
holds harmless a Participant or Beneficiary with respect to liability, whether
or not unintended or unforeseen, for income taxes, excise taxes, interest
and/or penalties, or any other liability, arising from or incurred in
connection with this Plan.

 

In the event any benefits payable hereunder to a Participant or
Beneficiary are subjected to taxation prior to the date such benefits are
payable under the terms of the Plan, the payment of such benefits shall be
accelerated so that, to the extent practicable, the Participant or Beneficiary
receives such benefits in the taxable year in which such amounts are subjected
to taxation.

 

24

 

Section 23. Return of
Company Contributions

 

Nothing in this Plan nor the agreement and declaration establishing the
Trust shall be construed to prevent the return to the Company of amounts
contributed to the Trust by the Company due to a mistake of fact or law,
including (but not limited to) erroneous calculations or erroneous determinations
of eligibility.

 

IN WITNESS WHEREOF, the Company hereby adopts this amendment and
restatement of the NPC International, Inc. Deferred Compensation and
Retirement Plan this 27th day of April, 2006.

 

	
   

  	
  NPC INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Troy D. Cook

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  SR VP

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  [ILLEGIBLE]

  	
   

  	
   

  	
   

  
						

 

25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]