KRISPY KREME DOUGHNUTS, INC. [FORM OF] NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit
10.1
KRISPY
KREME DOUGHNUTS, INC.
[FORM
OF] NONQUALIFIED STOCK OPTION AGREEMENT
THIS
NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made as of
_______________ (the “Grant Date”), by and between Krispy Kreme Doughnuts, Inc.,
a North Carolina corporation (the “Corporation”), and _______________ (the
“Optionee”).
WHEREAS,
the Committee appointed under the Krispy Kreme Doughnuts, Inc. 2000 Stock
Incentive Plan (the “Committee”) has granted Optionee an option to purchase
shares of the Corporation’s Common Stock, no par value per share (the “Common
Stock” or the “Stock”), pursuant to the Krispy Kreme Doughnuts, Inc. 2000 Stock
Incentive Plan (the “Plan”) (capitalized terms used herein shall have the
meanings set out in the Plan unless otherwise specified in this Agreement),
as
set forth below; and
WHEREAS,
this Agreement evidences the grant of such option.
NOW,
THEREFORE, in consideration of the foregoing, of the mutual promises set forth
below and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
1. Summary
of Grant
Optionee:
Number
of
Shares:
Option
Exercise Price:
Date
of
Grant:
2. Grant
of Option
The
Committee has granted Optionee a nonqualified option to purchase from the
Corporation, during the period specified in Sections 3 and 4 of this Agreement,
a total of _________ shares of Common Stock, at the purchase price of $______
per share (the “Exercise Price”), in accordance with the terms and conditions
stated in this Agreement. The shares of Common Stock subject to the option
granted hereby are referred to below as the “Shares,” and the option to purchase
such Shares is referred to below as the “Option.”
3. Vesting
and Exercise of Option
The
Option
shall vest and become exercisable in accordance with the schedule set forth
below, provided
that the
Option shall vest and become exercisable with respect to an increment as
specified only if the Optionee has not incurred a Termination of Employment
prior to the vesting date:
(a) the
Option
shall vest and become exercisable with respect to 50% of the Shares subject
to
the Option if and when the following conditions are met (i) the second
anniversary
of the Grant Date has occurred, and (ii) following the Grant Date, the
closing price per Share on the principal securities exchange on which the Shares
are then traded has exceeded 120% of the Exercise Price for at least ten (10)
consecutive trading days; and
(b) the
Option
shall vest and become exercisable with respect to the remaining 50% of the
Shares subject to the Option if and when the following conditions are met
(i) the second anniversary of the Grant Date has occurred, and
(ii) following the Grant Date, the closing price per Share on the principal
securities exchange on which the Shares are then traded has exceeded 140% of
the
Exercise Price for at least ten (10) consecutive trading days.
Notwithstanding
the vesting provisions described above, the Option shall vest and become
exercisable with respect to 100% of the Shares upon the Optionee’s Termination
of Employment if the Optionee’s Termination of Employment is due to his or her
Retirement, death or Disability.
The
schedule set forth above is cumulative, so that Shares as to which the Option
has become vested and exercisable pursuant to (a) or (b) above may be purchased
pursuant to exercise of the Option at any subsequent date prior to termination
of the Option. The Option may be exercised at any time and from time to time
to
purchase up to the number of Shares as to which it is then vested and
exercisable.
The
Option
will become vested and exercisable in full upon a Change in Control, provided
that Optionee has not incurred a Termination of Employment prior to the date
of
such Change in Control. In the event of a Change in Control, the Board, in
its
sole discretion, may send Optionee prior written notice of the effectiveness
of
such event and the last day on which Optionee may exercise the Option. In such
event, Optionee may, upon compliance with all of the terms of this Agreement
and
the Plan, purchase any or all of the Shares with respect to which the Option
is
vested and exercisable on or prior to the last day specified in such notice,
and, to the extent the Option is not exercised, it shall terminate at 5:00
P.M.,
Eastern Standard Time, on the last day specified in such notice. For purposes
hereof, Change in Control shall have the meaning set forth in the Plan, except
in the case of a transaction described in clauses (1) or (3) of paragraph (b)
of
such definition, the consummation of such a transaction, rather than the
approval by shareholders of the Corporation of such transaction or agreement
to
effect such a transaction, shall constitute a Change in Control.
4. Termination
of Option
Unless
adjusted by the Committee in its sole discretion, the Option shall remain
exercisable as specified in Section 3 above until 5:00 p.m., Eastern Standard
Time, on the earliest to occur of the dates specified below, upon which date
the
Option shall terminate:
(a) the
date
all of the Shares are purchased pursuant to the terms of this
Agreement;
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(b) upon
the
expiration of 60 days following the Optionee’s Termination of Employment for any
reason other than his or her Retirement, death, Disability, or for
Cause;
(c) upon
the
expiration of 180 days following Optionee’s Termination of Employment on account
of his or her Disability;
(d) upon
the
expiration of 360 days following Optionee’s Termination of Employment on account
of his or her death;
(e) immediately
upon Optionee’s Termination of Employment for Cause, as defined below in Section
21(a);
(f) on
the
last date specified in the notice described in Section 3 above in the event
of a
Change in Control; or
(g) on
the ten
year anniversary of the Grant Date (the “Expiration Date”).
Upon
its
termination, the Option shall have no further force or effect and Optionee
shall
have no further rights under the Option or to any Shares which have not been
purchased pursuant to prior exercise of the Option.
5. Manner
of Exercise of Option
(a) Exercise. The
Option
may be exercised only by (i) Optionee’s completion, execution and delivery to
the Corporation of a notice of exercise and (ii) the payment to the Corporation,
pursuant to the terms of this Agreement, of an amount equal to the Exercise
Price multiplied by the number of Shares being purchased as specified in
Optionee’s notice of exercise (the “Purchase Price”). Optionee’s notice of
exercise shall be given in the manner specified in Section 11 but any exercise
of the Option shall be effective only when the items required by the preceding
sentence are actually received by the Corporation. The notice of exercise may
be
in the form attached to this Agreement. Notwithstanding anything to the contrary
in this Agreement, the Option may be exercised only if compliance with all
applicable federal and state securities laws can be effected, as determined
by
the Committee in its discretion.
(b) Form
of Payment.
Payment
of the Purchase Price may be made (i) by check payable to the order of the
Corporation for an amount in U.S. dollars equal to the Purchase Price of such
Shares; (ii) by delivery or attestation of shares of Stock held by the Optionee
for the requisite period necessary to avoid a charge to the Corporation’s
earnings for financial reporting purposes, as determined by the Committee in
its
discretion, and having an aggregate Fair Market Value equal to the amount of
cash that would otherwise be required to pay the full Purchase Price; (iii)
by
authorizing a third party to sell a portion of the Shares acquired upon exercise
of the Option and remit to the Corporation a sufficient portion of the sales
proceeds to pay the full Purchase Price; or (iv) by combining the above
methods.
To
the
extent that shares of Stock are used in making full or partial payment of the
Purchase Price, each such share will be valued at the Fair Market Value thereof
as of the date of ex-
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ercise.
Any overpayment will be promptly refunded, and any underpayment will be deemed
an exercise of such lesser whole number of shares as the amount paid is
sufficient to purchase.
(c) Issuance
and Delivery of Shares. As
soon as
practicable following receipt of such notice and payment, the Corporation shall
notify the Optionee of any payment or other allocation required under subsection
(d) below. The Corporation shall deliver a certificate or certificates for
the
Shares to the Optionee as soon as practicable after the Optionee has made any
payment and/or allocation required under subsection (d) below. Shares of Stock
issued pursuant to the exercise of this option will be issued only in the name
of Optionee and may not be transferred into the name of any agent of or nominee
for Optionee until such time as Optionee has complied with the terms of this
Agreement.
(d) Withholding
Obligation. Issuance
of Shares upon exercise of the Option shall be subject to the condition that
the
Optionee shall pay to the Corporation, in addition to the Purchase Price, the
minimum amount the Corporation is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign,
to
withhold in connection with such exercise of the Option, if any, as determined
by the Committee in its discretion. In lieu of the payment specified in this
paragraph, the Committee may in its sole discretion permit the Optionee to
satisfy the obligation, in whole or in part, by the methods specified in
subsection (b) above, or by the Corporation retaining sufficient Shares to
satisfy its withholding obligations.
(e) Deferral
of Issuance of Shares. Anything
in this Agreement to the contrary notwithstanding, if, at any time specified
herein for the issuance of Shares to Optionee, any law, or any regulation or
requirement of the Securities and Exchange Commission or other governmental
authority having jurisdiction in the premises shall require either the
Corporation or Optionee to take any action in connection with the Shares then
to
be issued, the issuance of such Shares shall be deferred until such action
shall
have been taken; the Corporation shall be under no obligation to take such
action; and the Corporation shall have no liability whatsoever as a result
of
the non-issuance of such shares, except to refund to Optionee any consideration
tendered in respect of the Purchase Price.
(f) Stop
Transfer Instructions. The
Corporation may impose stop-transfer instructions with respect to any Shares
(or
other securities) subject to any restriction set forth in this Agreement until
the restriction has been satisfied or terminates.
6. Restrictions
on Transfer of Option
(a) Except
as
otherwise provided in subsections (b), (c) and (d) below, the Option may not
be
sold, exchanged, delivered, assigned, bequeathed or gifted, pledged, mortgaged,
hypothecated or otherwise encumbered, transferred or permitted to be
transferred, or otherwise disposed of, whether voluntarily, involuntarily or
by
operation of law (including, without limitation, the laws of bankruptcy,
intestacy, descent and distribution or succession) or on an absolute or
contingent basis. For purposes of this Section, any reference to Optionee shall
(when applicable) be deemed to be and include references to Optionee’s estate,
executors or administrators, personal or legal representatives and transferees
(direct or indirect).
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(b) If
permitted by the Committee, Optionee may transfer this Option to members of
his
or her Immediate Family (as defined below), to one or more trusts for the
benefit of such Immediate Family members, to one or more partnerships where
such
Immediate Family members are the only partners, or to one or more limited
liability companies (or similar entities) where such Immediate Family members
are the only members or beneficial owners of the entity, if (i) the Optionee
does not receive any consideration in any form whatsoever for such transfer,
(ii) such transfer is permitted under applicable tax laws, and (iii) if the
Optionee is an “Insider,” such transfer is permitted under Rule 16b-3 of the
Exchange Act as in effect from time to time. For purposes hereof, “Immediate
Family” means the Optionee and the Optionee’s spouse, children and
grandchildren.
(c) In
the
event of Optionee’s death, the Option may be transferred to any executor,
administrator, personal or legal representative, legatee, heir or distributee
of
the estate of Optionee.
(d) In
the
event of Optionee’s divorce, Optionee may transfer some or all of the Option to
his former spouse incident to Optionee’s divorce from the former
spouse.
(e) As
a
condition precedent to the transfer of the Option, each and every prospective
transferee shall (i) provide or cause to be provided to the Corporation, at
its
request, sufficient evidence of the legal right and authority of such
prospective transferee to have the Option so transferred and (ii) comply with
the provisions of this Agreement. Any Option so transferred pursuant to this
Section shall continue to be subject to the same terms and conditions in the
hands of the transferee as were applicable to said Option immediately prior
to
the transfer thereof, and any reference in this Agreement to the performance
of
services for the Corporation by the Optionee shall continue to refer to the
performance by the transferring Optionee.
7. Share
Ownership Policy
Optionee
agrees that he or she will comply with the Company’s share ownership policy, as
in effect from time to time.
8. Rights
Prior to Exercise
Optionee
shall not be deemed for any purpose to be a shareholder of the Corporation
with
respect to any Shares as to which this Option shall not have been exercised
and
payment made as hereby provided and a stock certificate for such Shares actually
issued to Optionee. No adjustment will be made for dividends or other rights
for
which the record date is prior to the date of such issuance.
9. Employment
of Optionee
Nothing
in
this Agreement shall be construed as constituting a commitment, guarantee,
agreement or understanding of any kind or nature that the Corporation shall
continue to employ Optionee, nor shall this Agreement affect in any way the
right of the Corporation to terminate the employment or other service of
Optionee at any time and for any reason. By Optionee’s execution of this
Agreement, Optionee acknowledges and agrees that Optionee’s employment or other
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service
to
the Corporation is “at will.” No change of Optionee’s duties with respect to the
Corporation shall result in, or be deemed to be, a modification of any of the
terms of this Agreement.
10. Burden
and Benefit
This
Agreement shall be binding upon, and shall inure to the benefit of, the
Corporation and Optionee, and their respective heirs, personal and legal
representatives, successors and permitted assigns.
11. Notices
Any
and
all notices under this Agreement shall be in writing, and sent by hand delivery
or by certified or registered mail (return receipt requested and first-class
postage prepaid), in the case of the Corporation, to its principal executive
offices to the attention of the Chief Financial Officer, and, in the case of
Optionee, to Optionee’s address as shown on the Corporation’s
records.
12. Specific
Performance
Strict
compliance by Optionee shall be required with each and every provision of this
Agreement. The parties hereto agree that the Shares are unique, that Optionee’s
failure to perform the obligations provided by this Agreement will result in
irreparable damage to the Corporation and that specific performance of
Optionee’s obligations may be obtained by suit in equity.
13. Entire
Agreement
The
parties hereto agree that this Agreement sets forth all of the promises,
agreements, conditions, understandings, warranties, and representations between
the parties with respect to the Option and Shares and that there are no
promises, agreements, conditions, understandings, warranties, or
representations, oral or written, express or implied between the parties with
respect to the Option and Shares other than as set forth in this Agreement.
Any
modifications or any waiver of any provision contained in this Agreement shall
not be valid unless made in writing and signed by the person or persons sought
to be bound by such waiver or modifications.
14. Severability
The
provisions of the Agreement are severable and if any one or more provisions
are
determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provision to the extent
enforceable in any jurisdiction, shall nevertheless be binding and
enforceable.
15. Waiver
The
waiver
by the Corporation of a breach of any provision of this Agreement by the
Optionee shall not operate or be construed as a waiver of any subsequent breach
by the Optionee.
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16. Terms
and Conditions of Plan
The
terms
and conditions included in the Plan, the receipt of a copy of which Optionee
hereby acknowledges by execution of this Agreement, are incorporated by
reference herein, and to the extent that any conflict may exist between any
term
or provision of this Agreement and any term or provision of the Plan, such
term
or provision of the Plan shall control.
17. Authority
of Committee
All
determinations made by the Committee with respect to the interpretation,
construction and application of any provision of this Agreement shall be final,
conclusive and binding on the parties.
18. Covenants
and Representations of Optionee
Optionee
represents, warrants, covenants and agrees with the Corporation as
follows:
(a) Optionee
has not relied upon the Corporation with respect to any tax consequences related
to the grant or exercise of this Option, or the disposition of Shares purchased
pursuant to its exercise. Optionee acknowledges that, as a result of the grant
and/or exercise of the Option, Optionee may incur a substantial tax liability.
Optionee assumes full responsibility for all such consequences and the filing
of
all tax returns and elections Optionee may be required or find desirable to
file
in connection therewith. In the event the Corporation is required by applicable
law to collect any withholding, payroll or similar taxes by reason of the grant
or any exercise of the Option, Optionee agrees that the Corporation may withhold
such taxes from any monetary amounts otherwise payable by the Corporation to
Optionee and that, if such amounts are insufficient to cover the taxes required
to be collected by the Corporation, Optionee will pay to the Corporation such
additional amounts as are required.
(b) Optionee
will not distribute or resell any Shares (or other securities) issuable upon
exercise of the Option granted hereby in violation of the Act. Optionee shall
comply with all provisions of the Corporation’s Securities Trading
Policy.
(c) The
agreements, representations, warranties and covenants made by Optionee herein
with respect to the Option shall also extend to and apply to all of the Shares
issued to Optionee from time to time pursuant to exercise of the Option.
Acceptance by Optionee of any certificate representing Shares shall constitute
a
confirmation by Optionee that all such agreements, representations, warranties
and covenants made herein shall be true and correct at that time.
19. Limitation
of Liability
The
liability of the Corporation, the Committee, and their officers, employees
and
agents, under this Agreement and in the award of the Shares hereunder is limited
to the obligations set forth with respect to such award, and nothing herein
contained shall be interpreted as imposing any liability in favor of the
Optionee with respect to any loss, cost or expense which such
recipi-
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ent
may
incur in connection with or arising out of any transaction involving the Shares
that is subject to the provisions of this Agreement.
20. Governing
Law
This
Agreement shall be construed and enforced in accordance with the laws of the
State of North Carolina, without giving effect to the conflict of laws
provisions thereof.
21. Definitions
(a) “Cause”
shall be
limited to the following events: (i) drug abuse by Optionee; (ii) alcohol abuse
by Optionee if it interferes with the efficient conduct of business by Optionee;
(iii) theft, embezzlement or other similar act by Optionee of any tangible
or
intangible asset of the Corporation or any customer or supplier of the
Corporation; (iv) commission of any other criminal act by Optionee (whether
or
not Optionee is prosecuted and convicted) if such act causes or is likely to
cause damage to the business of the Corporation; (v) a material breach by
Optionee of any written agreement between the Corporation and Optionee, or
any
written policy of the Corporation known by and applicable to all its employees,
but a mere mistake in business judgment shall not constitute “Cause” unless it
is a part of a continuing pattern of bad judgment that has caused actual damage
to the Corporation or its business, and (vi) willful failure by Optionee to
follow the instructions of the Board or an officer or other supervisory employee
of the Corporation duly authorized by the Board, the Bylaws of the Corporation
or an officer of the Corporation authorized to give instructions to Optionee,
to
the extent such instructions are reasonably related to the business of the
Corporation, are given in good faith to promote the interest of the Corporation,
would not require Optionee to commit any illegal act and are not given to
provide the Corporation with cause for terminating Optionee.
(b) “Retirement”
shall
mean the Optionee’s Termination of Employment at a time when for an employee,
the sum of the Optionee’s age and years of employment with the Corporation
equals or exceeds 65.
(c) “Termination
of Employment”
means the
discontinuance of the Optionee’s service relationship with the Corporation,
including but not limited to service as an employee of the Corporation, as
a
non-employee member of the board of directors of the Corporation, or as a
consultant or advisor to the Corporation. Except to the extent provided
otherwise in an Agreement or determined otherwise by the Committee, a
Termination of Employment shall not be deemed to have occurred if the capacity
in which the Optionee provides service to the Corporation changes (for example,
a change from consultant status to Employee status) or if the Optionee transfers
among the various entities constituting the Corporation, so long as there is
no
interruption in the provision of service by the Optionee to the Corporation.
The
determination of whether a Optionee has incurred a Termination of Employment
shall be made by the Committee in its discretion. A Optionee shall not be deemed
to have incurred a Termination of Employment if the Optionee is on military
leave, sick leave, or other bona fide leave of absence approved by the
Corporation of 90 days or fewer (or any longer period during which the Optionee
is guaranteed reemployment by statute or contract.) In the event a Optionee
’s
leave of absence exceeds this period, he will be deemed to have incurred a
Termination of Employment on the day following the expiration date of such
period.
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IN
WITNESS
WHEREOF, the Corporation and Optionee have executed this Agreement hereto as
of
the day and year first above written.
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KRISPY
KREME DOUGHNUTS, INC.
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By:
______________________________________
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Print
Name: _______________________________
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Title:
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Optionee
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STOCK
OPTION EXERCISE FORM
This
form
must be completed and returned to Krispy Kreme’s Chief Financial Officer on or
before 1:00 p.m. Eastern Standard Time on date of exercise.
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NAME
(please print)
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SOCIAL
SECURITY NO.
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SECTION
I
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HOME
ADDRESS:
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WORK
ADDRESS:
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HOME
TELEPHONE:
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WORK
TELEPHONE:
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SECTION
II: I wish to exercise the following options:
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A
GRANT
DATE
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B
NUMBER
OF OPTIONS
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C
EXERCISE
PRICE
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D
TOTAL
PURCHASE PRICE:
(COLUMN
B x COLUMN C)
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TOTAL
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SECTION
III
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SECTION
IV
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I
elect to pay for my shares (check one):
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I
elect to pay my taxes on this transaction (check one):
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____
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Broker
assisted Cashless Exercise for Cash
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____
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Sell
shares to cover taxes (Cashless Exercise for Cash/Stock)
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___
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Broker
assisted Cashless Exercise for Stock
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____
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Check
(payable to Krispy Kreme Doughnuts, Inc.) (required for Cash
Purchases)
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___
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Cash
Purchase by Check (payable to
Krispy
Kreme Doughnuts, Inc.)
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____
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Deduction
from shares I receive from this transaction (Stock Swap)
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____
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Stock
Swap using value of previously
owned
shares
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| ___________________________________________ | ____________________________________________ |
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Signature
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Date
of Exercise
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Return
form to:
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KRISPY
KREME DOUGHNUT CORPORATION
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ATTN:
Chief Financial Officer
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X.X.
Xxx 00
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Xxxxxxx-Xxxxx,
XX 00000
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Phone:
000-000-0000
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