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EXHIBIT
10.3
RELEASE AND
SEVERANCE AGREEMENT
THIS RELEASE AND
SEVERANCE AGREEMENT (the “Agreement”) is made and
entered into this the 23 day of August, 2007 by and between Jeff
Jervik, of c/o 370 Knollwood, Suite 500, Winston-Salem, NC 27103
(the “Employee”), and Krispy Kreme Doughnut
Corporation, a North Carolina corporation, with its principal place
of business located in Forsyth County, North Carolina (the
“Employer”).
1. Termination . Employee’s employment with
the Employer is hereby terminated, not for misconduct, effective as
of August 31, 2007 (“the Termination of Employment
Date”). Employee’s participation in the
Employer’s employee benefits plans and programs shall cease
as of the Termination of Employment Date, except (a) that
Employee’s benefits under the Employer’s group health
insurance plan will continue at the Employer’s expense as the
premiums have been or will be provided through the last day of the
month in which the Termination of Employment Date occurs and (b)
that Employee’s vested benefits under any retirement plan
remain vested in accordance with the provisions of the
Employer’s retirement plans. Employee will receive, by
separate letter, a notice of his opportunities to continue to
participate in the Employer’s health insurance plan through
the provisions of COBRA, and Employee may elect to continue his
health insurance coverage in accordance with the provisions of that
notice and applicable law. Employee’s participation in the
various benefit plans of the Employer shall cease in accordance
with the terms of the respective plans, except as otherwise agreed
herein.
2. Salary . Effective with the paycheck to be
delivered to Employee on August 22, 2007, Employee will be paid all
salary and wages for the period through the Termination of
Employment Date. Employee acknowledges that he does not have any
unused vacation for which he has not previously been
paid.
3. Consideration for this Agreement . In
consideration of Employee’s execution of this Agreement on or
before August 23, 2007, Employer agrees to pay to Employee
severance benefits in the amount of Employee’s current base
salary for a period of six months from and after the Termination of
Employment Date, with such payments totaling in the aggregate One
Hundred and Seventy Thousand and 00/100 dollars ($170,000.00) and
if, from and after the six month anniversary of the Termination of
Employment Date, Employee has not begun employment with another
employer after conducting diligent efforts to do so, Employer will
continue to pay Employee the amount of his current base salary on a
month-by-month basis as long as he remains unemployed in spite of
diligent efforts to find employment acceptable to him, up to a
maximum of an additional six month period after said six month
anniversary (in the aggregate, the “Severance
Payment”). Employee acknowledges that this Severance Payment
is in excess of any compensation to which he would otherwise have
been entitled.
4. Taxes, Withholding, and Payment Date . The Severance Payment described in paragraph 2 will be
subject to normal withholdings as required or authorized by state
and federal law. Provided that Employee timely executes this
Agreement, Severance Payments will follow the Employers monthly
payroll schedule to Employee at his last known address, or at such
other address as provided by Employee.
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5. The
Employer will not oppose any application for unemployment
compensations benefits which Employee may make.
6. In the
event that a prospective employer of employee contacts Employer
concerning Employee, Employer will provide that prospective
employer solely with information as the Employee’s dates of
service and title.
7. In the
event that any third party should make any claim or commence any
legal action against Employee for his conduct as an employee of
Employer, Employer shall indemnify Employee for all costs
attorney’s fees and damages incurred by him in defending
against that claim or legal action, to the same extent as it would
indemnify any employee.
8.
Exclusivity of Consideration . Except as set forth in the
preceding paragraphs, neither the Employer nor any of the Released
Parties (defined in paragraph 10) shall have any obligation to make
any further payments to or for the benefit of
Employee.
9.
General Release by Employer .
Employer
hereby releases and forever discharges Employee, his past, present
and future successors and assigns, of and from any manner of
action, cause of action, in law or in equity, suit, debt, lien,
contract, agreement, promise, liability, claim demand, damage,
loss, cost or expense, of any nature, whatsoever, known or unknown,
fixed or contingent, which Employer now has or may hereafter have
against Employee, by reason of any matter, cause, or thing
whatsoever from the beginning of time to the date Employer signs
this Agreement. Notwithstanding the foregoing, the Employer is not
waiving its rights to the consideration referred to in this
Agreement.
10.
General Release by Employee .
(a)
Employee hereby releases and forever discharges Employer, its past,
present and future parents, subsidiaries, divisions, affiliates,
and its and their respective predecessors, successors and assigns,
and each of their past, present and future employees, officers,
directors, agents, insurers, employee welfare benefit plans,
employee pension benefit plans and deferred compensation plans, and
their trustees, administrators and other fiduciaries, and all
persons acting by, through, under or in concert with them, or any
of them (the “Released Parties”), of and from any
manner of action, cause of action, in law or in equity, suit, debt,
lien, contract, agreement, promise, liability, claim, demand,
damage, loss, cost or expense, of any nature whatsoever, known or
unknown, fixed or contingent (hereinafter called
“Claims”), which Employee now has or may hereafter have
against the Released Parties, or any of them, by reason of any
matter, cause, or thing whatsoever from the beginning of time to
the date Employee signs this Agreement. Employee understands that
this release includes, without limitation, all Claims Employee may
have:
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relating to
Employee’s hire, employment, remuneration (including salary,
bonus, incentive or other compensation, stock options,
vacation, sick
leave, health insurance benefits, benefits from any employee stock
ownership, stock option plans, profit-sharing and/or deferred
compensation plan) or termination of employment by the
Employer;
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or retaliation under any law
alleging discrimination (including any Claims under Title VII of
the Civil Rights Act of 1964, as amended; the Civil Rights Act of
1991; the Civil Rights Act of 1866, as amended; the Consolidated
Omnibus Budget Reconciliation Act; the Age Discrimination in
Employment Act, as amended; the Employee Retirement Income Security
Act, as amended; the Americans with Disabilities Act; and other
state employment discrimination statutes; applicable state wage and
hour statutes; and/or any other local, state or federal law
governing discrimination or retaliation in employment and/or the
payment of wages or benefits);
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arising under any contract, express or implied
(including, but not limited to that certain Employment Agreement,
effective the 26 th day of
October 2005, by and between Employer and Employee), tortious
conduct, or arising under federal, state or, local law.
In
giving this release, Employee forever releases and gives up
Employee’s employment rights and employee status with the
Released Parties and each of them. Notwithstanding the foregoing,
the Employee is not waiving Employee’s rights to the payments
or benefits described in paragraph 1-3 above.
(b) The
parties further agree that this General Release does not affect
Employee’s benefits under the Employer’s group health
insurance plan through the Termination of Employment Date and
thereafter under COBRA, and it does not affect Employee’s
accrued benefits that are vested as of the Termination of
Employment Date under any retirement plan sponsored by Employer.
The parties also agree that this release does not affect
Employee’s vested stock options, if any, under any applicable
stock option grant, plan, or agreement for Krispy Kreme Doughnuts,
Inc. stock, which vested stock options, if any, shall remain
subject to the terms of the applicable stock option grant, plan or
agreement.
(c) IN ACCORDANCE WITH
THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, EMPLOYEE IS AWARE
OF THE FOLLOWING WITH RESPECT TO HIS RELEASE OF ANY CLAIMS UNDER
THE AGE DISCRIMINATION IN EM
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