Employees v Krispy Kreme Doughnuts, Inc.
Krispy Kreme Announces Proposed Settlement Resolving ERISA Class Action
Krispy Kreme Doughnuts, Inc. (NYSE: KKD) announced that a proposed settlement has been reached resolving an ERISA class action filed on March 3, 2005 in North Carolina against the Company and individual defendants including certain members of its Board of Directors, officers and employees. The Company and the individual defendants deny any and all wrongdoing and would not pay any money in the settlement.
The lawsuit alleges that the Company and the individual defendants breached duties with respect to the management and administration of the Krispy Kreme Doughnut Corporation Retirement Savings Plan (the "401(k) Plan") and the Krispy Kreme Profit Sharing Stock Ownership Plan (the "KSOP") (collectively the "Plans").
If the settlement is finalized, it will impact members of a settlement class consisting of the Plans' participants from January 1, 2003 through May 12, 2006. If the settlement is finalized, in addition to the cash payment by the Company's insurer, the Company will amend the Plans to cause the merger of the KSOP into the 401(k) Plan. Several contingent events must be satisfied before the settlement becomes final, including preliminary and final approval by the United States District Court where the matter is pending.
It is anticipated that if the United States District Court gives final approval to the proposed settlement, this matter will be resolved by the end of calendar 2007.
The lawsuit includes any employee that participated in the Krispy Kreme Doughnut Corporation Retirement Savings Plan (the "401(k) Plan") and the Krispy Kreme Profit Sharing Stock Ownership Plan (the "KSOP") from January 1, 2003 through May 12, 2006.
