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Investor Relations Contact: | |
Anita Booe – 336-703-6902 | |
FOR IMMEDIATE RELEASE | ABooe@KrispyKreme.com |
Media Relations Contact: | |
Brian K. Little – 336-726-8825 | |
Blittle@KrispyKreme.com |
Krispy Kreme Doughnuts, Inc. Adopts
Shareholder Protection Rights Agreement
WINSTON-SALEM, N.C., Jan.
14 – Krispy Kreme
Doughnuts, Inc. (NYSE: KKD) today announced that its Board of Directors has
adopted a Shareholder Protection Rights Agreement to replace the Company's
existing Rights Plan, which will expire on January 18, 2010.
"The new
Rights Plan was adopted to deter abusive takeover tactics, but it was not
adopted in response to any specific effort to acquire control of the Company.
The Company's current market capitalization makes the Company and its
shareholders especially vulnerable to a creeping acquisition of control whereby
a person can acquire a substantial percentage of the Company's outstanding stock
prior to making any public disclosure regarding its control intent and without
paying a control premium. Krispy Kreme believes the new Rights Plan, like the
existing Rights Plan, will provide the Board of Directors with negotiating
leverage if a third party offers to acquire the Company at a price that would
not provide shareholders with the full value of their investment. The issuance
of the rights has no dilutive effect, will not affect reported earnings per
share and is not taxable to Krispy Kreme or its shareholders," said Jim Morgan,
Chairman of the Board of Directors and Chief Executive Officer of the Company.
In
connection with the adoption of the new Rights Plan, the Company's Board of
Directors declared a dividend of one right on each outstanding share of the
Company's common stock. The dividend will be paid on January 19, 2010 to
shareholders of record on January 18, 2010. The rights will trade with, and be
represented by, the existing common stock and no further action by shareholders
is necessary unless and until a triggering event occurs and the rights become
exercisable. Should the rights become exercisable, the Company will notify
shareholders.
The
mechanics of the new Rights Plan are similar to the existing Rights Plan. In
general terms, and as in the existing Rights Plan, the rights that will be
issued under the new Rights Plan are not exercisable until such time as a person
or group becomes the beneficial owner of 15 percent or more of the Company's
common stock immediately following the expiration of the existing Rights Plan.
The rights may cause substantial dilution to a person or group that acquires 15%
or more of the Company's common stock unless the rights are first redeemed by
the Board of Directors. Unlike the existing Rights Plan (which had a ten-year
term), the new Rights Plan only has a three-year term.
A letter
to shareholders regarding the Rights Plan and a summary of certain terms of the
Rights Agreement will be mailed to shareholders on or about January 19, 2010.
About Krispy Kreme
Krispy Kreme is a leading branded retailer and wholesaler of high-quality doughnuts and packaged sweets, including its Original Glazed® doughnut. Headquartered in Winston-Salem, North Carolina, the Company has offered the highest-quality doughnuts and great-tasting coffee since it was founded in 1937. Today, Krispy Kreme can be found in over 560 locations in 18 countries around the world. Visit us at www.KrispyKreme.com.
Krispy Kreme is a leading branded retailer and wholesaler of high-quality doughnuts and packaged sweets, including its Original Glazed® doughnut. Headquartered in Winston-Salem, North Carolina, the Company has offered the highest-quality doughnuts and great-tasting coffee since it was founded in 1937. Today, Krispy Kreme can be found in over 560 locations in 18 countries around the world. Visit us at www.KrispyKreme.com.
Information contained in this press release, other than historical
information, should be considered forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on management’s beliefs, assumptions and expectations of
our future economic performance, considering the information currently available
to management. These statements are not statements of historical fact.
Forward-looking statements involve risks and uncertainties that may cause our
actual results, performance or financial condition to differ materially from the
expectations of future results, performance or financial condition we express or
imply in any forward-looking statements. The words “believe,” “may,” “could,”
“will,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,”
“seek,” “strive” or similar words, or the negative of these words, identify
forward-looking statements. Factors that could contribute to these differences
include, but are not limited to: the quality of Company and franchise store
operations; our ability, and our dependence on the ability of our franchisees,
to execute on our and their business plans; our relationships with our
franchisees; our ability to implement our international growth strategy; our
ability to implement our new domestic operating model; currency, economic,
political and other risks associated with our international operations; the
price and availability of raw materials needed to produce doughnut mixes and
other ingredients; compliance with government regulations relating to food
products and franchising; our relationships with off-premises customers; our
ability to protect our trademarks and trade secrets; risks associated with our
high levels of indebtedness; restrictions on our operations and compliance with
covenants contained in our secured credit facilities; changes in customer
preferences and perceptions; and risks associated with competition. These and
other risks and uncertainties, which are described in more detail in the
Company’s most recent Annual Report on Form 10-K and other reports and
statements filed with the United States Securities and Exchange Commission, are
difficult to predict, contain uncertainties that may materially affect actual
results and may be beyond the Company’s control, and could cause actual results
and developments to be materially different from those expressed or implied by
any of these forward-looking statements. New factors emerge from time to time,
and it is not possible for management to predict all such factors or to assess
the impact of each such factor on the Company. Any forward-looking statement
speaks only as of the date on which such statement is made, and the Company does
not undertake any obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is
made.
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