SECOND
AMENDMENT TO
EMPLOYMENT
AGREEMENT
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
(“Second Amendment”) dated as of December 15, 2008
(“Amendment Effective Date”) among Krispy Kreme
Doughnut Corporation, a North Carolina Corporation
(“KKDC”), Krispy Kreme Doughnuts, Inc., a North
Carolina Corporation (the “Company” and together with
KKDC, the “Companies”) and Douglas R. Muir (the
“Executive”).
WHEREAS, the Companies and the Executive are
parties to an Employment Agreement dated as of April 23, 2007 and
an Amendment to the Employment Agreement dated November 8, 2007
(together, the “Agreement”);
WHEREAS, the Companies and the Executive wish to
amend the Agreement as set forth herein in order to comply with
Section 409A of the Internal Revenue Code of 1986, as
amended;
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, the Companies and the Executive hereby
agree as follows:
1. The definition of
“Change in Control” in Section 1.01 of the Agreement is
amended by adding the following sentence to the end
thereof:
“
provided , however , that an event will be treated as
a “Change in Control” for purposes of this Agreement
only if it is also a “change in control event” (as
defined in Treas. Reg. Section 1.409A-3(i)(5)) with respect to the
Company.”
2. Section 5.03 is
amended to read in its entirety as follows:
“
Termination for Good Reason or Without Cause. Except as
otherwise set forth in Section 5.09 below, if the Employment Period
shall be terminated (a) by the Executive for Good Reason, or (b) by
the Companies not for Cause, provided the Executive has executed,
on or before the date that is fifty (50) days following the date of
his termination of employment, an irrevocable (except to the extent
required by law to be revocable) general release of claims in the
form attached hereto as Exhibit A, and does not revoke such release
prior to the end of the seven day statutory revocation period, the
Executive shall be entitled solely to the following: (i) Base
Salary through the Date of Termination, paid on the
Companies’ normal payroll payment date; (ii) an amount equal
to one times the Base Salary, provided that, the Executive shall be
entitled to any unpaid amounts only if the Executive has not
breached and does not breach the provisions
of Sections 6.01, 7.01, 8.01 or 9 below; (iii) a
bonus for the year of termination of employment equal to the
Executive’s target annual bonus for such year pro rated for
the number of full months during the bonus year prior to such
termination of employment, to be paid, subject to Section 13.14
below, 60 days following such termination of employment; and (iv)
medical benefits as provided in Section 5.05 below. The
Executive’s entitlements under any other benefit plan or
program shall be as determined thereunder, except that duplicative
severance benefits shall not be payable under any other plan or
program.
Amounts
described in clause (ii) above will be paid, subject to Section
13.14 below, in twelve (12) equal installments, the first two (2)
of which shall be paid on the date that is two (2) months following
the Date of Termination and the next ten (10) of which will be paid
in ten (10) equal monthly installments commencing on the date that
is three (3) months following the Date of Termination and
continuing on each of the next nine (9) monthly anniversaries of
the Date of Termination. In addition, promptly following
any such termination, the Executive shall be reimbursed for all
Reimbursable Expenses incurred by the Executive prior to such
termination. Notwithstanding the above provisions of this Section
5.03, if Executive’s employment with the Companies is
terminated by the Companies not for Cause prior to December 31,
2008, then the amount otherwise payable under clause (ii) above
shall be two times the Base Salary (not one times Base Salary),
payable not in twelve (12) installments but in 24 installments, the
first two (2) of which shall be paid on the date that is two (2)
months following the Date of Termination and the next 22 of which
will be paid in 22 equal monthly installments commencing on the
date that is three (3) months following the Date of Termination and
continuing on each of the next 21 monthly anniversaries of the Date
of Termination, provided that, the Executive shall be entitled to
any unpaid amounts only if the Executive has not breached and does
not breach the provisions of Sections 6.01, 7.01, 8.01 or 9
below.”
3. Section 5.07 is
amended to read in its entirety as follows:
“Date
of Termination. “
Date of Termination ” shall mean (a) if the Employment
Period is terminated as a result of a Permanent Disability, five
days after a Notice of Termination is given, (b) if the Employment
Period is terminated as a result of his death, on the date of his
death, (c) if the Employment Period terminates due to expiration of
the term of this Agreement, the date the term expires, and (d) if
the Employment Period is terminated for any other reason, the later
of the date of the Notice of Termination and the end of any
applicable correction period.”
4. Section 5.09 of
the Agreement shall be amended to read in its entirety as
follows:
“Termination for Good Reason or Without
Cause Following a Change in Control. If the Employment Period shall be
terminated within two years after a Change in Control (a) by the
Executive for Good Reason, or (b) by the Companies not for Cause,
then Executive’s compensation and benefits upon termination
shall be governed by this Section 5.09 instead of the provisions of
Section 5.03 above, and, provided the Executive has executed, on or
before the date that is fifty (50) days following the date of his
termination of employment, an irrevocable (except to the extent
required by law to be revocable) general release of claims in the
form attached hereto as Exhibit A, and does not revoke such release
prior to the end of the seven day statutory revocation period, the
Executive shall be entitled solely to the following: (i) Base
Salary through the Date of Termination, paid on the
Companies’ normal payroll payment date; (ii) an amount equal
to two times the sum of his Base Salary and his target annual bonus
for the year of termination, provided that, the Executive shall be
entitled to any unpaid amounts only if the Executive has not
breached and does not breach the provisions of Sections 6.01, 7.01,
8.01 or 9
