Document:

Ex-10.21

 

EXHIBIT 10.21

EXECUTION COPY

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT (“Employment Agreement”), dated as of June 1, 2007, between Perkins &
Marie Callender’s Inc. (the “Company”), and Charles A. Conine (the “Executive”).

     WHEREAS, the Executive is currently a party to an employment agreement between the Company’s
subsidiary, Marie Callender Pie Shops, Inc., and the Executive, dated as of November 12, 1999 (the
“1999 Employment Agreement”);

     WHEREAS, the Company wishes to assure itself of the management services of the Executive for
the period provided in this Employment Agreement, and the Executive desires to serve in the employ
of the Company for such period, upon the terms and conditions hereinafter provided that this
Employment Agreement shall supersede the 1999 Employment Agreement.

     IT IS THEREFORE AGREED AS FOLLOWS:

     1. Employment, Duties and Acceptance.

          1.1 Employment by the Company. Effective June 1, 2007 (the “Effective Date”), the
Company hereby employs the Executive, for itself and its affiliates, for the Term (as herein
defined), to render exclusive and full-time services in the capacity of Executive Vice President,
Human Resources & Administration of the Company, subject to the direction of the Company’s Chief
Executive Officer and the Board of Directors of TRC Holdings LLC, the indirect parent of the
Company (the “Board of Directors”), in accordance with applicable law and the Company’s corporate
governance policies. The Executive may engage in personal, charitable, professional and investment
activities except to the extent that the Board of Directors reasonably determines that any such
activity conflicts or significantly interferes with the performance of his responsibilities to the
Company under this Employment Agreement.

          1.2 Duties/Authority. The Executive shall have responsibilities commensurate with the
office of Executive Vice President, Human Resources & Administration, subject to the control and
direction of the Chief Executive Officer and Board of Directors in accordance with applicable law
and the Company’s corporate governance policies. The Executive agrees to hold such additional
offices of the Company and its affiliates as may reasonably be assigned to him by the Board of
Directors or the Chief Executive Officer from time to time.

          1.3 Acceptance of Employment by the Executive. The Executive accepts such employment
and shall render the services described above. Subject to election (ii) by the Company’s
stockholders or appointment by the Board of Directors, the Executive may also serve during all or
any part of the Term as a director of the Company, and (ii) by the Company, the Executive may also
serve during all or any part of the Term as an officer or director of any other entity controlled
by or under common control with the Company, in each case without any compensation therefor other
than that specified in this Employment Agreement.

 

 

          1.4 Place of Employment. The Executive’s principal place of employment shall be
Memphis, TN (the “Headquarters”), subject to such reasonable travel as the rendering of the
services hereunder may require, at the direction of the Chief Executive Officer. The Company
acknowledges that the Executive’s performance of his duties requires travel to various locations
and to that extent there is no mandatory minimum number of days he is expected to be present at the
Headquarters. Unless agreed to otherwise in writing by the Executive, the Company shall not change
the Executive’s principal place of employment further than fifty (50) miles from the Headquarters.

     2. Term of Employment. Subject to earlier termination pursuant to Section 4 of this
Employment Agreement, the initial term of Executive’s employment under this Employment Agreement
shall commence on the Effective Date and shall end eighteen (18) months following the Effective
Date (the “Initial Term”); provided that the term shall automatically renew for successive
periods of one year (each such one year period, a “Subsequent Term”) until one of the parties gives
written notice of non-renewal to the other party at least 90 days before the end of the Initial
Term or any Subsequent Term, as applicable, unless sooner terminated as herein provided. For the
purposes of this Employment Agreement, (i) “Term” shall mean the Initial Term, or the Subsequent
Term, as appropriate, and (ii) if a party gives the other party a notice of non-renewal pursuant
hereto, this Employment Agreement shall be deemed to expire at the end of the current Term and no
termination shall be deemed to have occurred for the purpose of Section 4.

     3. Compensation.

          3.1 Salary. As compensation for all services to be rendered pursuant to this
Employment Agreement, the Company (directly or through one or more subsidiaries) shall pay the
Executive during the Term a salary of $244,000 per annum (the “Base Salary”), payable not less
frequently than monthly, less such deductions as shall be required to be withheld by applicable law
and regulations. The Executive’s Base Salary shall be reviewed at least annually by the Board of
Directors and may be increased from time to time, but in no event shall the amount of the
Executive’s Base Salary be decreased from its then existing level.

          3.2 Incentive Bonus. The Executive shall be eligible to receive an annual bonus (the
“Incentive Bonus”) under a plan established by the Company from time to time in the amount
determined by the Board of Directors based upon achievement of performance measures derived from
the annual business plan approved by the Board of Directors and payable on the date such bonuses
are paid to other executives of the Company. The Executive’s target bonus shall be 45% of Base
Salary (the “Target Bonus”). Except as otherwise provided in Section 4, the Incentive Bonus shall
be pro-rated to reflect the percentage of the fiscal year the Executive has performed services for
the Company pursuant to this Employment Agreement.

          3.3 Participation in Employee Benefit Plans. The Executive shall be permitted during
the Term, if and to the extent eligible, to participate in any group life, hospitalization,
accidental death and dismemberment or disability insurance plan, health (Executive Health and Life
Benefit Plan) program, pension plan or similar benefit plan or perquisite program of the Company,
which may be available generally to other senior executives

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and managers of the Company and its subsidiaries on the same terms as such other persons in
accordance with the terms of such plans and programs. The Board of Directors may determine to
offer the Executive participation in other compensation or benefit plans, in its discretion.

          3.4 Expenses. Subject to such written policies, applicable to senior executives
generally, as may from time to time be established by the Board of Directors, the Company shall pay
or reimburse the Executive for all reasonable expenses (including travel expenses) actually
incurred or paid by the Executive during the Term in the performance of the Executive’s services
under this Employment Agreement upon presentation of expense statements or vouchers or such other
supporting information as it may require.

          3.5 Vacation. The Executive shall be entitled to such amount of vacation which is
available generally to other senior executives and managers of the Company and its subsidiaries;
provided, that in no event shall the Executive receive a total number of annual vacation
days less than the number of annual vacation days to which the Executive was entitled immediately
prior to May 3, 2006. The Executive shall be permitted to carry-over a maximum number of accrued
but unused vacation days equal to the greater of (x) three (3) times the number of annual vacation
days for which the Executive is eligible and (y) the maximum number of days permitted pursuant to
the vacation policies of the Company.

          3.6 Insurance. During the Term, the Company shall maintain director’s and officer’s
liability indemnification and insurance coverage for the Executive.

          3.7 Automobile Allowance. The Executive shall be permitted to use a vehicle provided
by the Company and/or receive an automobile allowance from the Company in accordance with the
policies of the Company, provided, however, such Company vehicle or automobile allowance
shall be no less favorable to the Executive than any such benefit received by the Executive prior
to the Effective Date.

     4. Termination.

          4.1 Termination upon Death. If the Executive dies during the Term, this Employment
Agreement shall terminate and the Company shall pay to the Executive (i) all Base Salary and
benefits from the Company and its employee benefit plans earned and accrued as of the date of
termination and (ii) a pro rata amount of his annual Incentive Bonus in accordance with the terms
of the Plan, determined at the end of the fiscal year in which the Executive’s death occurred, and
pro rated through the date of termination.

          4.2 Termination upon Disability. If during the Term the Executive becomes physically
or mentally disabled, whether totally or partially, so that Executive is unable to perform the
essential functions of his employment, with or without reasonable accommodations (as determined, in
good faith, by the Board of Directors) for (i) a period of three (3) consecutive months, or (ii)
for shorter periods aggregating three (3) months during any six (6) month period, the Company may
at any time after the last day of the three (3) consecutive months of disability or the day on
which the shorter periods of disability equal an aggregate of three (3) months, by written notice
to the Executive, terminate the Term of the Executive’s employment hereunder. Nothing in this
Section 4.2 shall be deemed to extend the Term. In the

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event of termination of this Employment Agreement by reason of disability, the Company shall
pay to the Executive (i) the Executive’s Base Salary on the date of termination for the lesser of
four (4) months or the remainder of the Term, payable in accordance with the provisions of Section
3.1 hereof, (ii) all Base Salary and benefits from the Company and its employee benefit plans
earned and accrued as of the date of termination and (iii) a pro rata amount of his annual
Incentive Bonus in accordance with the terms of the Plan, determined at the end of the fiscal year
in which the disability occurred, and pro rated through the date of termination.

          4.3 Termination for Cause or Without Good Reason. The Company may at any time by
written notice to the Executive terminate the Term of the Executive’s employment hereunder for
Cause and the Executive may at any time by written notice to the Company terminate the Term of the
Executive’s employment hereunder without Good Reason and, in either such case, the Executive shall
have no right to receive any compensation or benefit hereunder on and after the effective date of
such notice other than Base Salary and benefits accrued but not paid as of the date of termination.

          4.4 Termination with Good Reason or without Cause. During the Term, the Executive may
terminate his employment with the Company at any time with Good Reason, and the Company may
terminate the Executive’s employment without Cause, upon 10 (ten) days’ written notice to the other
party hereto. Subject to Section 4.6, the Executive shall have the right to continue to receive
his Base Salary (the “Termination Payments”) and to continue to be a participant in the Company’s
Executive Health and Life Benefit Plan (the “Termination Benefits”), as in effect on the date of
such notice, payable in accordance with the provisions of Sections 3.1 and 3.3 hereof, for the
remainder of the Term; provided, that in the event that the Executive’s participation in
any benefit plans, programs, practices or policies referred to in Section 3.3 is barred by the
terms of such plans, programs, practices or policies due to the termination of the Executive’s
employment with the Company, then the Company shall provide him with benefits substantially similar
to those which he would be entitled to as a participant in such benefit plans, programs, practices
or policies; provided further, that (subject to Section 4.6) the Executive shall
receive such Base Salary and group health benefits for a minimum of twelve months from the
effective date of such notice. In the event the Executive’s employment terminates pursuant to this
Section 4.4, he shall be entitled to receive a pro rata amount of his annual Incentive Bonus in
accordance with the terms of the Plan, determined at the end of the fiscal year in which the
Executive’s employment terminated, and pro rated through the date of termination; provided
further, that if the Executive’s employment is terminated pursuant to this Section 4.4
after a Change in Control has occurred, in the event that any payment or distribution by the
Company to or for the benefit of the Executive (whether pursuant to the terms of this Employment
Agreement or otherwise) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties are
incurred by the Executive due to the miscalculation by an independent auditor with respect to such
excise tax or untimely payment of the Gross-Up Payment (as defined below) by the Company with
respect to such excise tax (such excise tax, together with any interest or penalties thereon
incurred by the Executive due to miscalculation by the independent auditor or untimely payment of
the Gross-Up Payment (as defined below) by the Company, are hereinafter referred to as the “Excise
Tax”), then the Company will pay to the Executive an additional payment (the “Gross-Up Payment”) in
an amount such that after payment by the Executive of all taxes, including, without limitation, any
income taxes and

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Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. The determination of amounts required
to be paid pursuant to the preceding proviso shall be made by an independent auditor selected and
paid by the Company. Such independent auditor shall be a nationally recognized United States
public accounting firm, which may be the independent accounting firm used by the Company to audit
its financial statements unless such accounting firm is serving as the accountant or auditor for
the individual, entity or group effecting the Change in Control.

          4.5 Definitions. For purposes hereof:

     (a) The term “Cause” shall mean: as determined in good faith by the Board of Directors (or
its designee), (i) the Executive’s material breach of any of the Executive’s obligations under this
Employment Agreement; (ii) the Executive’s continued and deliberate neglect of, willful misconduct
in connection with the performance of, or refusal to perform the Executive’s duties, which, in the
case of neglect or failure to perform, has not been cured within thirty (30) days after the
Executive has been provided notice of the same; (iii) the Executive’s engagement in any conduct
which injures the integrity, character, business or reputation of the Company or any of its
subsidiaries or affiliates or which impugns the Executive’s own integrity, character or reputation
so as to cause the Executive to be unfit to act on behalf of the Company; or (iv) the Board of
Director’s good faith determination that the Executive has committed an act or acts constituting a
felony, or other act involving dishonesty, disloyalty or fraud against the Company or any of its
subsidiaries or affiliates.

     (b) The term “Good Reason” shall mean: (i) the assignment to the Executive of duties and
responsibilities not commensurate with his status as the Executive Vice President, Human Resources
& Administration of the Company, (ii) the failure of the Company to provide Base Salary, bonus
opportunity and benefits to the Executive as required herein or (iii) the failure of the Company to
adhere in any substantial manner to any of its other covenants herein, provided that any of
the foregoing continues for a period of 20 days after written notice thereof, specifying the nature
thereof and requesting that it be cured, is given by the Executive to the Company;
provided, that if a Change in Control has occurred the term “Good Reason” shall also mean
(iv) any other action by the Company which results in a diminishment in the Executive’s position,
authority, duties or responsibilities to any substantial degree, (v) any material adverse change in
the Executive’s benefits or perquisites, or (vi) the Company’s requiring the Executive to be based
at any office or location more than 50 miles from that which the Executive is based immediately
prior to the Change in Control. Executive’s election to terminate his employment for Good Reason
shall in no way limit or restrict his remedies at law or equity for a breach of this Employment
Agreement.

     (c) The term “Change in Control” shall mean: (i) the sale of all or substantially all of the
business and/or assets of the Company to a person or entity that is not a subsidiary or other
affiliate of the Company or Castle Harlan Inc. (“CHI”), (ii) the merger or consolidation or other
reorganization of the Company with or into one or more entities that are not subsidiaries or other
affiliates of the Company or CHI, which results in less than 50% of the outstanding equity
interests of the surviving or resulting entity immediately after the reorganization being owned,
directly or indirectly, by the holders (or affiliates of the holders) of

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equity interests of the Company, immediately before such reorganization and (iii) approval by
the stockholders of the Company of the dissolution or liquidation of the Company.

          4.6 Mitigation of Damages.

     (a) Subject to the Executive’s obligations set forth in Section 5 of this Agreement, that
survive the termination of the Executive’s employment, the Executive shall be obligated to use his
reasonable best efforts to mitigate the Executive’s entitlement to Termination Payments and
Termination Benefits under this Employment Agreement by pursuing “Replacement Employment” after
termination of his employment hereunder. For the purposes hereof, “Replacement Employment” shall
mean a similar or better position with a company at a location no more than 50 miles from the
Headquarters, provided that the base salary, or base salary and target bonus, for such position is
equal to or greater than the Executive’s Base Salary under this Employment Agreement (as increased
pursuant to Section 3.1) at the time of his termination of employment with the Company.

     (b) If Executive receives (or accrues) compensation for his services while he is entitled to
receive the Termination Payments and the Termination Benefits, the Termination Payments shall be
reduced by the amount of the compensation so received (or accrued), and the payment of the
Termination Benefits shall cease to the extent the Executive becomes eligible to receive similar
benefits from a new employer or third party. Executive shall immediately notify the Company in
writing of any employment obtained by the Executive during the period that the Executive is
entitled to receive Termination Payments or Termination Benefits, which notice shall contain the
amount of income the Executive will receive and the time of receipt. The Executive shall also give
immediate notice to the Company of any changes in such employment or income.

     5. Covenants.

          5.1 Non-Solicitation or Hire. During the Term and for a period of two years following
the termination of the Executive’s employment for any reason, the Executive shall not directly or
indirectly (a) solicit or attempt to solicit or induce, directly or indirectly, any party who is a
customer or client of the Company or its subsidiaries, or who was a customer or client of the
Company or its subsidiaries at any time during the twelve (12) month period immediately prior to
the date the Executive’s employment terminates, for the purpose of marketing, selling or providing
to any such party any services or products offered by or available from the Company or any of its
subsidiaries; (b) interfere with or attempt to interfere with any business relationships (whether
formed during, or after the Term) of the Company or any of its subsidiaries with their suppliers;
(c) solicit, or attempt to solicit or induce, directly or indirectly, any employee of the Company
or its subsidiaries or any person, who was an employee of the Company or its subsidiaries during
the twelve (12) month period immediately prior to the date the Executive’s employment hereunder
terminates, to terminate such employee’s employment relationship with the Company or its
subsidiaries in order to enter into a similar relationship with the Executive, or any other person
or entity; or (d) hire any employee of the Company or its subsidiaries or any person, who was an
employee of the Company or any of its subsidiaries during the twelve (12) month period immediately
prior to the date the Executive’s employment hereunder terminates.

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          5.2 Non-Competition. While the Executive is employed and for a period following the
termination of the Executive’s employment equal to the Non-Competition Restricted Period (as
defined below), the Executive shall not, whether individually as a director, manager, member,
stockholder, partner, owner, employee, consultant or agent of any business, or in any other
capacity, other than on behalf of the Company, organize, establish, own, operate, manage, control,
engage in, participate in, invest in, permit his name to be used by, act as a consultant or advisor
to, render services for (alone or in association with any person, firm, corporation or business
organization), or otherwise assist any person or entity that engages in or owns, invests in,
operates, manages or controls any venture or enterprise which engages or proposes to engage in any
business conducted by the Company or its subsidiaries (x) on the date of the Executive’s
termination of employment (including, without limitation, any business which the Company or its
subsidiaries has specific plans to conduct in the future and as to which the Executive is aware) or
(y) within twelve (12) months prior to the Executive’s termination of employment with the Company,
in each case, in the geographic locations where the Company or its subsidiaries engage or propose
to engage in such business (the “Competitive Business”). Notwithstanding the foregoing, the
Executive may, directly or indirectly own, solely as an investment, securities of any firm,
partnership, joint venture, association, corporation or other business organization, entity or
enterprise engaged in the business of the Company which are publicly traded on a national or
regional stock exchange or on the over-the-counter market if the Executive is not a controlling
person of, or a member of a group which controls, such entity and does not directly or indirectly
own 5% or more of any class of securities of such entity. Should any provision of this Section 5.2
conflict with the provisions of any other written agreement between the Company and the Executive,
this Section 5.2 shall govern.

     For the purposes of this Employment Agreement, the term Non-Competition Restricted Period
shall mean (x) the period the Executive is entitled to receive payments or benefits pursuant to
Section 4.4 hereof, if the Executive’s employment terminates without Cause or if the Executive
terminates his employment for Good Reason and (y) a period of one year if the executive’s
employment hereunder terminates for any other reason.

          5.3 Confidentiality. Executive agrees that:

     (a) Except to the extent (i) authorized by the express prior consent of the Board of
Directors, (ii) required by law or any legal process or (iii) desirable in performing the
Executive’s duties under this Employment Agreement, the Executive will not, directly or indirectly,
at any time during the Term, or at any time subsequent to the termination of the Executive’s
employment hereunder, disseminate, disclose or divulge, to any person, firm, corporation,
association or other business entity, Confidential Information of the Company. In the event of a
breach or threatened breach by the Executive of this Section 5.2, the Company shall be entitled to
injunctive relief as well as other applicable remedies at law or in equity available to the Company
against the Executive or others. For purposes hereof, “Confidential Information of the Company”
shall mean any and all information about the Company or any affiliates of the Company, or relating
to the Company’s or its affiliates’ trade secrets, recipes, operating plans, financial performance,
intentions with respect to expansions (including with respect to real estate), in each case
disclosed to the Executive or known by the Executive as a consequence of or through the Executive’s
relationship with the Company, if such information is not publicly available (other than through a
breach by the Executive of this Section 5.2).

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     (b) All computer software, business cards, telephone lists, client lists, prospective client
lists, price lists, contract forms, catalogs, books, records, files, recipes, operating plans, and
know-how acquired while the Executive is employed by or otherwise affiliated with the Company are
acknowledged to be the property of the Company and shall not be duplicated, removed from the
Company’s possession or premises or made use of other than in pursuit of the business of the
Company or as may otherwise be required by law or any legal process, or as is necessary in
connection with any adversarial proceeding against the Company and, upon termination of the Term
for any reason, the Executive shall deliver to the Company, without further demands, all copies
thereof which are then in the Executive’s possession or under his control.

          5.4 Remedies; Specific Performance. The parties acknowledge and agree that the
Executive’s breach or threatened or attempted breach of any of the covenants or restrictions set
forth in this Section 5 will result in irreparable and continuing damage to the Company and its
subsidiaries for which there may be no adequate remedy at law and that the Company shall be
entitled to equitable relief, including but not limited to, specific performance and injunctive
relief as remedies for any such breach or threatened or attempted breach. The Executive also
agrees that such remedies shall be in addition to any and all remedies, including damages,
available to the Company against the Executive for such breaches or threatened or attempted
breaches. The non-prevailing party shall pay the reasonable legal costs of the prevailing party in
any such action pursuant to this Section 5.4. In addition, without limiting the Company’s and its
subsidiaries’ remedies for any breach by the Executive of any covenants or restrictions set forth
in this Section 5, in the event of such breach, (i) the Executive shall not be entitled to any
payments set forth in Section 4 hereof, except as required by law, and (ii) the Company will have
no obligation to pay any of the amounts that remain payable by the Company under Section 4.

     6. Other Provisions.

          6.1 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, telecopied, or sent by certified,
registered, or express mail, postage prepaid, to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice, and shall be deemed given when
so delivered personally, telecopied or if mailed, two days after the date of mailing, as follows:

     (i) if to the Company, to:

Perkins & Marie Callender’s Inc.

6075 Poplar Avenue, Suite 800

Memphis, TN 38119

With copies to:

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Castle Harlan Partners IV, L.P.

150 East 58th Street

New York, New York 10155

Attention: David B. Pittaway

Telephone: (212) 317-6440

Fax: (212) 207-8042

and

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Robert Goldstein, Esq.

Telephone: (212) 756-2000

Fax: (212) 593-5955

	 	(ii)	 	if to the Executive, to the Executive’s home address reflected
in the Company’s records.

     Notwithstanding the foregoing, the Company may designate an alternate address to receive
notices under this Agreement by providing notice to the Executive in accordance with this Section
6.1.

          6.2 Indemnification. The Company shall indemnify the Executive and hold him harmless,
to the maximum extent permitted by applicable law, from and against all loss, damage, liability,
costs, charges and expenses, including reasonable attorney’s fees and costs, incurred or sustained
by him in connection with any action, suit or proceeding to which the Executive may be made a party
by reason of his being, from and after the date hereof, an officer or director of the Company or of
any subsidiary or affiliate of the Company.

          6.3 Entire Agreement. This Employment Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior agreements, written
or oral, with respect thereto, including, without limitation, the 1999 Employment Agreement.

          6.4 Waivers and Amendments. This Employment Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only
by a written instrument signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any
right, power or privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. Notwithstanding anything herein to the contrary, the Company
may amend this Employment Agreement at any time, retroactively or otherwise, without the
Executive’s consent, if necessary or desirable to comply with Section 409A of the Code, and
regulations and other guidance of general applicability that are issued thereunder.

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          6.5 Governing Law. This Employment Agreement shall be governed by and construed and
enforced in accordance with and subject to, the laws of the State of New York applicable to
agreements made and to be performed entirely within such state.

          6.6 Arbitration. Except for disputes arising out of an alleged violation of the
covenants set forth in Section 5 of this Employment Agreement, any dispute or controversy arising
under or in connection with this Employment Agreement shall be resolved by binding arbitration,
which shall be held in New York, New York in accordance with the following procedure:

     (a) The Executive shall appoint an employment arbitrator from the pool of arbitrators
registered as employment arbitrators with the American Arbitration Association (“Employment
Arbitrator”) and the Company shall appoint an Employment Arbitrator and the Executive’s appointed
Employment Arbitrator and the Company’s appointed Employment Arbitrator shall mutually agree upon a
single Employment Arbitrator.

     (b) The arbitration hearing shall be held within 15 days (or as soon thereafter as possible)
after the picking of the arbitrator. No continuance of said hearing shall be allowed without the
mutual consent of the Executive and the Company. Absence from or nonparticipation at the hearing by
either party shall not prevent the issuance of an award. Hearing procedures which will expedite
the hearing may be ordered at the arbitrator’s discretion, and the arbitrator may close the hearing
in his or her sole discretion when he or she decides he or she has heard sufficient evidence to
satisfy issuance of an award.

     (c) The arbitrator’s award shall be rendered as expeditiously as possible. The award of the
arbitrator shall be final and binding upon the parties. The award may be enforced in any
appropriate court as soon as possible after its rendition. If an action is brought to confirm the
award, both the Company and the Executive agree that no appeal shall be taken by either party from
any decision rendered in such action.

     (d) The prevailing party in any arbitration between the Company and the Executive with respect
to this Employment Agreement shall be entitled to an award of the fee of the arbitrator borne by
such party and all necessary expenses of the hearing borne by such party (including all attorneys’
fees and disbursements incurred by such party in pursuing such claim), including stenographic
reporter, if employed.

     (e) The Company shall reimburse the Executive for the Executive’s reasonable out of pocket
costs and expenses incurred in connection with traveling to New York, New York to conduct such
arbitration proceeding, upon presentation of such supporting documentation as the Company may
require.

          6.7 Assignment. This Employment Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive or the Company except with the other party’s prior
written consent.

          6.8 Counterparts. This Employment Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

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          6.9 Headings. The headings in this Employment Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Employment Agreement.

          6.10 Severability. If any term, provision, covenant or restriction of this Employment
Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign,
federal, state, county or local government or any other governmental, regulatory or administrative
agency or authority to be invalid, void, unenforceable or against public policy for any reason, the
remainder of the terms, provisions, covenants and restrictions of this Employment Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated.

     IN WITNESS WHEREOF, the parties have executed this Employment Agreement the date first above
written.

	 	 	 	 	 
	 	PERKINS & MARIE CALLENDER’S INC.

 	 
	 	By:  	/s/ Joseph
F. Trungale	 
	 	 	Name:  	Joseph F. Trungale	 
	 	 	Title:  	President, Chief Executive Officer	 
	 

	 	 	 	 	 
	 	 	 
	 	/s/
 Charles A. Conine	 
	 	Charles A. Conine 	 
	 	 	 
	 

11ex10_1.htm

     

    Exhibit
      10.1

    AMENDMENT
      NO. 1 TO CREDIT AGREEMENT, dated as of June 21, 2007 (this “Amendment
      Agreement”), among KRISPY KREME DOUGHNUT CORPORATION, a North Carolina
      corporation (the “Borrower”), KRISPY KREME DOUGHNUTS, INC., a North
      Carolina corporation (the “Parent Guarantor”), the SUBSIDIARY GUARANTORS
      (as defined in the Credit Agreement referred to below) signatory hereto and
      the
      LENDERS (as defined in the Credit Agreement referred to below) signatory
      hereto.

     

    PRELIMINARY
      STATEMENTS

     

    WHEREAS,
      the Borrower is party to a Credit Agreement, dated as of February 16, 2007
      (the
“Credit Agreement”), among the Borrower, the Parent Guarantor, the
      Subsidiary Guarantors, the Lenders, and Credit Suisse, Cayman Islands Branch,
      as
      Administrative Agent, Collateral Agent, Issuing Lender, and Swingline
      Lender.

     

    WHEREAS,
      the Borrower has requested that the Required Lenders agree to amend and waive
      certain provisions of the Credit Agreement, and the Required Lenders have
      agreed, subject to the terms and conditions hereinafter set forth to such
      amendments and waivers.

     

    Accordingly,
      in consideration of the premises and for other good and valuable consideration,
      the sufficiency and receipt of all of which are hereby acknowledged, the parties
      hereto hereby agree as follows:

     

    SECTION 1.  Defined
      Terms.  Capitalized terms used but not defined herein shall be
      used herein as defined in the Credit Agreement.

     

    SECTION 2.  Amendment.  As
      of the Amendment Effective Date, the definition of “Consolidated Interest
      Expense” in Section 1.01 of the Credit Agreement is hereby amended to include
      the following at the end thereof:

     

    “For
      the
      purpose of determining the Consolidated Interest Coverage Ratio for any Test
      Period that includes February 16, 2007, Consolidated Interest Expense shall
      be
      deemed to be equal to the Consolidated Interest Expense for the period from
      February 16, 2007 through the end of such Test Period, with such amount
      annualized for a full Fiscal Year.”

    

    SECTION 3.  Waivers.  As
      of the Amendment Effective Date, each of the Lenders that is a party hereto
      hereby waives any Default that shall occur, or shall have occurred, and be
      continuing as a result of the Borrower’s failure to comply with the requirements
      of Section 7.09(b) of the Credit Agreement solely with respect to any portion
      of
      the 12-month period ending April 29, 2007, and any breach of any representation
      or warranty made or deemed made by Borrower with respect to such compliance
      solely with respect to any portion of such period.

     

    SECTION 4.  Representations
      and Warranties.  The Borrower hereby represents and warrants to
      the undersigned Lenders that, after giving effect to the amendments and waivers
      herein, (a) the representations and warranties of the Borrower and the Parent
      Guarantor set forth in the Credit Agreement, and of each Obligor in each of
      the
      other Loan Documents to which it is a party, is true and correct in all material
      respects on and as of the date hereof (except to the extent that any such
      representation or warranty expressly relates to an earlier date), with each
      reference therein to the Credit Agreement being deemed for purposes hereof
      to be
      a reference to the Credit Agreement as modified hereby and (b) no Default has
      occurred and is continuing.

     

    SECTION 5.  Conditions
      to Effectiveness.  The amendment set forth in Section 2
      hereof

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    and
      the
      waiver set forth in Section 3 hereof shall become effective when, and only
      when,
      and as of the date (the “Amendment Effective Date”) on
      which:

     

    (a)
      the
      Administrative Agent shall have received counterparts of this Amendment
      Agreement executed by the Borrower, each of the Guarantors, and the Required
      Lenders; and

     

    (b) the
      Administrative Agent shall have received payment of all accrued fees and
      expenses of the Administrative Agent (including the reasonable and accrued
      fees
      of counsel to the Administrative Agent invoiced on or prior to the date
      hereof).

     

    
      	
               

            	
              SECTION 6.  Reference
                to and Effect on the Financing
                Documents.

            

    

     

    (a)           On
      and after the Amendment Effective Date, each reference in the Credit Agreement
      to “this Agreement”, “hereunder”, “hereof” or words of like import referring to
      the Credit Agreement, and each reference in the other Loan Documents to “the
      Credit Agreement”, “thereunder”, “thereof”, or words of like import referring to
      the Credit Agreement shall mean and be a reference to the Credit Agreement
      as
      modified hereby.

     

    (b)           The
      Credit Agreement and each of the other Loan Documents, as specifically modified
      by this Amendment Agreement, are and shall continue to be in full force and
      effect and are hereby in all respects ratified and confirmed.

     

    (c)           The
      execution, delivery and effectiveness of this Amendment Agreement shall not,
      except as expressly provided herein, operate as a waiver of any right, power
      or
      remedy of the Credit Agreement or the other Loan Documents, nor constitute
      a
      waiver of any provision of the Credit Agreement or the other Loan
      Documents.

     

    SECTION 7.  Affirmation
      of Guarantors.  Each Guarantor signatory hereto hereby consents to
      the amendments to the Credit Agreement effected hereby, and hereby confirms
      and
      agrees that, notwithstanding the effectiveness of the amendment set forth in
      Section 2 hereof, the obligations of such Guarantor contained in
      Article III of the Credit Agreement or in any other Loan Documents to which
      it is a party are, and shall remain, in full force and effect and are hereby
      ratified and confirmed in all respects, except that, on and after the
      effectiveness of such amendments, each reference in Article III of the
      Credit Agreement and in each of the other Loan Documents to “the Credit
      Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a
      reference to the Credit Agreement as modified by this Amendment
      Agreement.

     

    SECTION 8.  GOVERNING
      LAW.  THIS AMENDMENT AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
      WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

     

    SECTION 9.  Execution
      in Counterparts.  This Amendment Agreement may be executed by one
      or more of the parties to this Amendment Agreement on any number of separate
      counterparts, and all of said counterparts taken together shall be deemed to
      constitute one and the same instrument.  Delivery of an executed
      counterpart of a signature page to this Amendment Agreement by telecopier shall
      be effective as delivery of a manually executed counterpart of this Amendment
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to
      be
      duly executed and delivered by their respective proper and duly authorized
      officers as of the day and year first above written.

     

    
      	
              KRISPY
                KREME DOUGHNUT CORPORATION

            
	 
	
              By:
                /s/ Douglas R. Muir

            
	
                    
                Name: Douglas R. Muir

            
	
                   
                 Title: Chief Financial Officer

            
	 
	
              GUARANTORS:

            
	
              KRISPY
                KREME DOUGHNUTS, INC.

            
	 
	
              GOLDEN
                GATE DOUGHNUTS, LLC

            
	 
	
                  By:  KRISPY
                KREME
                DOUGHNUT CORPORATION,

                      as
                authorized Manager

            
	 
	
              PANHANDLE
                DOUGHNUTS, LLC

            
	 
	
                  By: 
                    KRISPY KREME MANAGEMENT I, LLC,

                      an
                authorized Manager

            
	 
	
                  By:      KRISPY
                KREME MANAGEMENT II, LLC,

                      an
                authorized Manager

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

            
	
                      as
                authorized Member of Krispy Kreme Management I,

                      LLC
                and
                Krispy Kreme Management II, LLC

            
	 
	
              NORTH
                TEXAS DOUGHNUTS, L.P.

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

                      its
                General Partner

            
	 
	
              KK
                CANADA HOLDINGS, INC.

            
	 
	
              KRISPY
                KREME MANAGEMENT I, LLC

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

            
	
                      as
                authorized Member

            
	 
	
              KRISPY
                KREME MANAGEMENT II, LLC

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

            
	
                      as
                authorized Member

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    

    
      	
              KRISPY
                KREME MANAGEMENT III, LLC

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

            
	
                      as
                authorized Member

            
	 
	
              SOUTHERN
                DOUGHNUTS, LLC

            
	 
	
                  By:      KRISPY
                KREME MANAGEMENT I, LLC,

                      as
                authorized Manager

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

            
	
                      as
                authorized Member

            
	 
	
              SOUTHWEST
                DOUGHNUTS, LLC

            
	 
	
                  By:      KRISPY
                KREME MANAGEMENT I, LLC,

                      as
                authorized Manager

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

            
	
                      as
                authorized Member

            
	 
	
              NORTHEAST
                DOUGHNUTS, LLC

            
	 
	
                  By:      KRISPY
                KREME MANAGEMENT I, LLC,

                      as
                authorized Manager

            
	 
	
                  By:      KRISPY
                KREME DOUGHNUT CORPORATION,

            
	
                      as
                authorized Member

            
	 
	 
	
              By:  /s/
                Douglas R. Muir

            
	
                      Name:
                Douglas R. Muir

            
	
                      Title:
                Authorized Officer

            
	 
	 
	
              KRISPY
                KREME MOBILE STORE COMPANY

            
	 
	
              KRISPY
                KREME BRAND FUND CORPORATION

            
	 
	
              By:  /s/
                Stanley L. Parker

            
	
                      Name:
                Stanley L. Parker

            
	
                      Title:
                President

            
	 

    

     

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    

    
      	
              KRISPY
                KREME CANADA, INC.

            
	 
	
              By:  /s/
                Charles W. Bruton, III

            
	
                      Name:
                Charles W. Bruton, III

            
	
                      Title:
                President

            
	 
	
              HD
                CAPITAL CORPORATION

            
	 
	
              HDN
                DEVELOPMENT CORPORATION

            
	 
	
              By:  /s/
                Amy O. Stroud

            
	
                      Name:
                Amy O. Stroud

            
	
                      Title:
                Vice President

            

    

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              LENDER

            
	 
	 
	
              Consent
                of Required Lenders Received

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