CONTRACTOR SERVICES AGREEMENT
Exhibit
10.1
THIS
CONTRACTOR SERVICES AGREEMENT is made and entered into effective the
11th
day of
September, 2006, by and between KRISPY
KREME DOUGHNUTS, INC. and KRISPY KREME DOUGHNUT CORPORATION,
each a
North Carolina corporation with a principal place of business in Forsyth County,
North Carolina (together, “Krispy Kreme”) and Xxxxxxx
X. Xxxxx,
a
citizen and resident of North Carolina (“Contractor”).
In
consideration of the mutual covenants and promises contained herein, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1.
Krispy
Kreme agrees to retain Contractor and Contractor agrees to be retained by Krispy
Kreme to perform the following services (together, “Contractor Services”): to
perform and supervise legal services needed by or otherwise appropriate for
Krispy Kreme and its affiliates and subsidiaries. In performing such services,
Contractor acknowledges that he is an independent contractor, that Contractor
is
responsible for the means and methods used in performing these Contractor
Services under this Agreement, that Contractor is responsible for determining
his own schedule as long as Contractor nevertheless fully and properly performs
the Contractor Services, and that Contractor is not an employee or partner
of
Krispy Kreme; accordingly, Contractor and Krispy Kreme agree that Krispy Kreme
will not withhold any income or employment taxes from any compensation paid
to
Contractor and that Krispy Kreme will not consider Contractor to be an employee
for purposes of any employee benefit plans or payment of any premiums for
workers’ compensation benefits or unemployment benefits. Contractor shall use
his best efforts to perform the Contractor Services as needed and when requested
by Krispy Kreme. Krispy Kreme shall not be obligated to provide Contractor
with
any particular number of hours of work. Contractor agrees to use his best
efforts to provide the Contractor Services, and to be available for meetings
to
provide advice and information with respect to his work. Furthermore, on
request, Contractor shall make one or more reports and presentations to the
executives and/or one or more employees of Krispy Kreme to present the results
of his work.
2. (a)
Within
five (5) business days of the full execution of this Agreement, Krispy Kreme
shall pay Contractor thirty-thousand dollars ($30,000).
(b)
In
addition to such payment, during the term of this Agreement, Krispy Kreme hereby
agrees to pay Contractor at the monthly rate of $27,750.00. Contractor shall
be
paid by check on the fourth Wednesday of each month during the term of this
Agreement, and on the first Wednesday following the termination of this
Agreement for any partial month during which Contractor has performed Contractor
Services for which he has not been paid. Payments provided for in this paragraph
shall be prorated for any partial month during the term of this Agreement by
multiplying $27,750.00 times a fraction, the numerator of which shall be the
number of days during such partial month that the term of this Agreement was
in
effect and the denominator of which shall be 30. Unless previously agreed to
in
writing, Krispy Kreme shall not be responsible for any expenses incurred by
Contractor in connection with Contractor’s services hereunder. Notwithstanding
the foregoing, Krispy Kreme agrees that it will reimburse Contractor for
reasonable
and customary travel expenses incurred by Contractor consistent with Krispy
Kreme’s travel policy (as such policy may be amended from time to time) in
connection with Contractor’s services to Krispy Kreme, provided appropriate
documentation is submitted regarding the expenses incurred. Payment for these
expenses shall be made by check and shall be paid monthly to Contractor within
thirty (30) days following submission of appropriate documentation, and such
payment shall not be reduced by any withholdings.
(c)
As
soon as
practicable after the full execution of this Agreement, Krispy Kreme Doughnuts,
Inc. (“KKDI”) shall grant to Contractor 6,000 restricted shares of KKDI’s common
stock (the “Restricted Stock”). Thereafter, during the term of this Agreement,
KKDI shall grant to Contractor 6,000 shares of Restricted Stock every three
months, beginning three months from the date of the initial grant of Restricted
Stock. Notwithstanding
the foregoing, in the event that the Compensation Committee of the Board of
Directors of KKDI determines that stock grants may not be made on one or more
of
the dates set forth above consistent with applicable law, the grant of the
Restricted Stock shall be deferred until the date, if any, that the Compensation
Committee determines that it may make such grants consistent with applicable
law. The Restricted Stock will vest on their respective grant dates. The
Restricted Stock will be registered as soon as practicable on Form S-8 under
the
Securities Act of 1933, as amended. Contractor agrees that, without the prior
written consent of the Board of Directors of KKDI, he will not sell or otherwise
transfer any of the Restricted Stock received under this paragraph or the
economic benefit thereof prior to the first anniversary of the later to occur
of
(i) the termination of this Agreement and (ii) the termination of any period
during which Contractor may be an employee of Krispy Kreme if such period of
employment begins within thirty (30) days of the termination of this Agreement;
provided, however, that this Agreement shall not prevent Contractor from selling
a number of such shares required to fund his tax liability resulting from the
vesting of the Restricted Stock as long as such sale is made in compliance
with
Krispy Kreme’s Securities Trading Policy in effect at the time of any such sale
and in compliance with applicable laws. Contractor agrees to the appropriate
legends and transfer restrictions on the Restricted Stock in order to reflect
the provisions of this paragraph.
3.
Contractor
hereby agrees that all of the Contractor Services shall be performed by
Contractor pursuant to and in accordance with all applicable federal, state
and
local laws, rules and regulations.
4.
Contractor
hereby warrants and covenants that any concepts or documents presented to Krispy
Kreme with respect to or in any way related to this Agreement and/or the
Contractor Services will have been lawfully developed by Contractor and do
not
constitute the trade secrets or copyright material of any other party and do
not
infringe on the intellectual property rights of any other party. For the
compensation described in this Agreement, Contractor hereby agrees that all
documents, programs, materials and work generated by Contractor during the
term
of this Agreement or in any way connected with the Contractor Services shall
be
the property of Krispy Kreme, and Contractor agrees that all designs, drawings,
and copies made, generated or created by Contractor in any form or manner
pursuant to this Agreement in connection with Contractor Services shall become,
upon creation, the sole and exclusive property of Krispy Kreme as a “Work
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Made
for
Hire” as such term is used and defined in the Copyright Act of 1976, and
Contractor agrees that any such copyrightable material is and shall become
upon
creation, without payment of any further consideration other than that stated
in
this Agreement, the sole and exclusive property of Krispy Kreme. Contractor
further agrees that all items listed in this paragraph 4 shall constitute
Confidential Information which shall be subject to the provisions of paragraph
5, below.
5.
Contractor
acknowledges and agrees that all ideas, plans, specifications, business
information, financial information, business methodologies, business plans,
product information, formulations, processing procedures, quality standards,
trade secrets, designs, apparatus, production methods and techniques, know-how,
trademarks, trade dress, packaging, component parts and all other information
and materials supplied by Krispy Kreme to Contractor, or learned or observed
by
Contractor from Krispy Kreme or its agents during Contractor’s performance under
this Agreement, or developed by Contractor and/or Krispy Kreme in connection
with Contractor’s performance under this Agreement (collectively the
“Confidential Information”) will be maintained in strict confidence by
Contractor, and Contractor will not disclose, release, reveal, convey or
disseminate any such Confidential Information to any third party, without Krispy
Kreme’s express prior written consent. Contractor will not make any copies or
furnish to any third party any of the Confidential Information, without Krispy
Kreme’s express prior written consent except as required to be disclosed by
lawful subpoena or court order (and in such event, only after providing written
notice to Krispy Kreme’s legal counsel that disclosure is legally required with
adequate time remaining for Krispy Kreme to obtain a protective order).
Contractor shall not use the Confidential Information for any purpose other
than
Contractor’s performance of his obligations under this Agreement for the benefit
of Krispy Kreme. Contractor agrees that he will take all reasonable steps to
assist in protecting the Confidential Information from improper disclosure.
Promptly upon Krispy Kreme’s request, Contractor will return to Krispy Kreme all
originals and all existing copies of any documents, computer data or other
tangible material containing any of the Confidential Information in Contractor’s
or his agents’ possession or control. The confidentiality agreements and
obligations contained in this paragraph shall survive the termination of this
Agreement.
6.
This
Agreement shall commence on September 11, 2006. Either party shall have the
right to terminate this Agreement at any time and for any reason with thirty
(30) days prior written notice. The responsibilities of both parties to this
Agreement shall continue during the notice period. Upon the termination of
this
Agreement for any reason, Contractor shall promptly deliver to Krispy Kreme
all
copies in whatever form existing (whether written, computerized or otherwise)
of
any and all Confidential Information or documents of Krispy Kreme regarding
any
pending project as well as any documents developed by or received by Contractor
in connection with the Contractor Services, including, but not limited to,
the
information and items set forth in paragraphs 4 and 5, above. The termination
of
this Agreement for any reason shall not affect any obligations of either party
which have arisen prior to such termination and the provisions of paragraphs
4
and 5, above, shall survive the termination of this Agreement.
7.
Krispy
Kreme shall cause Contractor to be named on Krispy Kreme’s Directors and
Officers liability insurance policy as the same is in effect from time to time.
Krispy Kreme also
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agrees
to
indemnify and hold harmless Contractor to the same extent it indemnifies and
holds harmless its officers under the terms of its Articles and Bylaws in effect
from time to time.
8.
The
parties agree that this Agreement and the relationship between the parties
and
any dispute regarding same shall be governed by and construed in accordance
with
the laws of the State of North Carolina without regard to the conflict of laws
rules thereof.
9.
Neither
Krispy Kreme nor Contractor may assign this Agreement or any rights hereunder
to
any other party without the prior written consent of the other.
10.
This
Agreement represents the entire agreement between the parties with respect
to
the matters addressed herein and supersedes all prior negotiations,
representations or agreements, either written or oral. This Agreement may be
amended only by a written document signed by both Krispy Kreme and Contractor.
If any portion or provision in this Agreement is found to be void or
unenforceable in any jurisdiction, the remainder of this Agreement (without
the
void or unenforceable portion) shall be enforceable in such
jurisdiction.
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IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be executed as of the date written
above.
KRISPY
KREME DOUGHNUTS, INC.
|
By:
/s/
Xxxxx X. Xxxxxxxx
|
Name:
Xxxxx X. Xxxxxxxx
|
Title:
President and Chief Executive Officer
|
KRISPY
KREME DOUGHNUT CORPORATION
|
By:
/s/
Xxxxx X. Xxxxxxxx
|
Name:
Xxxxx X. Xxxxxxxx
|
Title:
President and Chief Executive Officer
|
CONTRACTOR
|
/s/
Xxxxxxx X. Xxxxx
|
Xxxxxxx
X. Xxxxx
|
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