North Carolina-based fastfood chain Krispy Kreme Doughnuts has announced a procedure to accelerate the disclosure of the sale of stock by four executives, a component of the plan recently outlined by President Bush in his effort to restore confidence in business.
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The company also announced its Board of Directors approved an amendment to its Securities Trading Policy to permit its officers, directors and employees subject to Krispy Kreme’s Securities Trading Policy to enter into trading plans that comply with the requirements of the Securities and Exchange Commission’s (SEC) Rule 10b5-1.
Krispy Kreme stated it intends to disclose proposed sales of its common stock by four executive officers on the Investor Relations page of its website within 48 hours of filing Form 144 notices with the SEC. Form 144 notices provide the number of shares of its common stock that the filer intends to sell during the three-month period beginning on the date of the Form 144 filing.
The website posting of proposed sales is an effort to ensure timely disclosure to the public of these executives’ stock transactions. The four members of senior management for whom these filings will be posted are Scott A. Livengood, chairman, president and CEO; John W. Tate, COO; Randy S. Casstevens, CFO; and John N. “Jack” McAleer, vice-chairman and executive VP of concept development. These executives are currently adopting Rule 10b5-1 plans for the current fiscal year on an individual basis and have agreed that all security transactions will be made under the terms of their individual plans.
Rule 10b5-1 allows corporate insiders to establish pre-arranged plans to sell or purchase a specified number or dollar amount of shares of company stock over a predetermined period of time. Insiders may adopt such plans when they are not in possession of material inside information in order to minimise the market effect of stock sales by spreading them out over an extended period of time and to avoid concerns about initiating stock transactions while in possession of material nonpublic information.
Commenting on these announcements, Livengood stated: “The combination of our accelerated reporting of security transactions by executives on our website and adoption of Rule 10b5-1 plans is an effort on the part of Krispy Kreme to constructively participate in the process of building public confidence in corporate America.”
