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:
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.
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;
(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-
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 regulat
