Common use of Vesting and Exercise of Option Clause in Contracts

Vesting and Exercise of Option. The Option shall vest and may be exercised by Participant as follows: A. The Option will vest in twenty-five percent (25%) one- quarter third increments on December 31st of each of the first three four full calendar years following the date of the grant of the Option (or in a later year as provided hereinbelow) (a "Vesting Year"), provided, however, the Option will not vest in a particular Vesting year unless: the Company has achieved 100% of the Company's annual corporate plan approved by the Board of Directors for that Vesting year. This calculation will be made based on the methodology established for senior level corporate employees, under the Company's 1996 Management Incentive Plan. In addition, in the event the average closing price of the Company's common stock in the month of December of any Vesting Year ("Average Closing Price") does not exceed the Average Closing Price for the prior year by at least twenty (20%) percent and such an event occurs in two consecutive Vesting years, then the portions of the Option scheduled to vest in the second consecutive year shall not vest and all unvested portions of the Option shall not be eligible to vest during the first four Vesting Years of the Option (except in the event of a Change of Control). Notwithstanding the above and subject to the earlier termination of the Option pursuant to clauses (i), (ii) and (iii) of Section 1 hereof, the Option granted hereunder shall vest, to the extent not previously vested pursuant to this Section 3A, six months prior to the date which is ten (10) years from the date of grant (____________, 199_) and shall remain outstanding until the expiration of the term of the Option as specified herein. B. Any vested portion of the Option eligible to be exercised by Participant and not which has not been previously exercised may be exercised up to the time of expiration of the Option. Notwithstanding the above, and except in the event of a Change of Control or the termination of the Participant without Good Cause (as defined in the Plan), the Option shall not be exercisable until the third anniversary of the grant of the Option. The Option may be exercised only during the thirty (30) day period which begins two (2) full days after the Company issues a quarterly or annual earnings release; provided, however, that the Committee, in its sole discretion, may permit the Option to be exercised in whole or in part at times other than that stated above. The Option may be exercised only in amounts of one hundred (100) shares or whole multiples thereof; provided, however, that this restriction shall not apply to the purchase by Participant of all outstanding vested Shares. In no event shall Participant be entitled to purchase a fractional share. Notwithstanding any provision in this Agreement to the contrary, if the Participant ceases to be an employee of the Company for any reason, the Participant shall have no rights with respect to the portion of the Option that is not then vested and the unvested portion of the Option shall be automatically forfeited. The Option may be exercised only if compliance with all applicable federal and state securities laws can be effected and only by (i) Participant's completion, execution and delivery to the Company of a notice of exercise, and (ii) the payment to the Company of the Exercise Price. Except in the event of the death of a Participant, in which event Participant's estate, executors or administrators, personal or legal representatives or heirs may exercise this Option in accordance with the terms of Subsection 3CB hereof, this the Option or any of the rights thereunder may be exercised by the Participant or permitted transferee only and may not be transferred or assigned in whole or in part, whether voluntarily, involuntarily or by operation of law (including, without limitation the laws of bankruptcy) other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order. C. In the event of the death of a Participant, Participant's estate, executors or administrators, or personal or legal representatives shall be entitled, for a period of six (6) months following the date of Participant's death, to exercise the Option, but only to the extent that Participant was entitled to exercise the Option on the date of such death and subject to the earlier expiration of the Option pursuant to Section 2 hereof.. Any person so desiring to exercise Participant's the Option shall be required, as a condition to the exercise of the Option, to furnish to the Company such documentation as the Company shall deem satisfactory to evidence the authority of such person to exercise the Option on behalf of the Participant's estate. D. Payment of the Exercise Price shall be made in cash and/or upon approval by the Committee by surrender by the Participant of a sufficient number of shares of the Company's sStock (previously acquired by the Participant) valued at the fair market value of such shares. The Committee may, upon such terms and conditions as it deems appropriate, accept the surrender by Participant of Participant's right to exercise the Option, in whole or in part, and authorize a cash payment in consideration therefore. As a condition to the issuance of Company Stock pursuant to this the Option, the Participant authorizes the Company to withhold in accordance with applicable law, from any regular cash compensation payable to Participant, any taxes required to be withheld by the Company under federal, state or local law as a result of Participant's exercise of this Option.

Vesting and Exercise of Option. The (a) No portion of this Option shall vest and may be exercised by Participant as follows: A. The Option will vest until such portion thereof has vested in twenty-five percent (25%) one- quarter third increments on December 31st of each of the first three four full calendar years following the date of the grant of the Option (or in a later year as provided hereinbelow) (a "Vesting Year"), provided, however, the Option will not vest in a particular Vesting year unless: the Company has achieved 100% of the Company's annual corporate plan approved by the Board of Directors for that Vesting yearaccordance with this Section 3. This calculation will be made based on the methodology established for senior level corporate employees, under the Company's 1996 Management Incentive Plan. In addition, in the event the average closing price of the Company's common stock in the month of December of any Vesting Year ("Average Closing Price") does not exceed the Average Closing Price for the prior year by at least twenty (20%) percent and such an event occurs in two consecutive Vesting years, then the portions of the Option scheduled to vest in the second consecutive year shall not vest and all unvested portions of the Option shall not be eligible to vest during the first four Vesting Years of the Option (except in the event of a Change of Control). Notwithstanding the above and subject Subject to the earlier termination of the this Option pursuant to clauses (i), (ii) as herein provided and (iii) of Section 1 hereof, the Option granted hereunder shall vest, subject to the extent not previously vested pursuant terms of the Participant's Individual Agreement, portions of this Option may be exercised from time to this Section 3A, six months prior time and in whole or in part commencing at 12:00 a.m. on the applicable Vesting Date set forth in the table below by delivering written notice to the date which is ten Company at its principal executive office (10currently, located at 10370 Richmond, Suite 990, Houston, Texas 77042) years from addressed to the date attxxxxxx xx xxx Xxxxx Xxxxxxxxx Xxxxxxx: Vesting Date Number of grant (Shares Exercisable ------------ ---------------------------- ______, 200__ ___________ ______, 200__ ___________ ______, 200__ ___________ ______, 200__ ____________ (b) If the Participant incurs a Termination of Employment by reason of death or Disability, 199_this Option may thereafter be exercised, but only to the extent vested and exercisable on the date of such Termination of Employment, for a period of one year from the date of such termination or until the Termination Date, whichever period is shorter. (c) If the Participant incurs a Termination of Employment for Cause, this Option shall thereupon terminate and shall not thereafter be exercisable, even as to the portions thereof that were vested and exercisable on the date of such Termination of Employment. (d) Except as otherwise provided in the Plan and Sections 3(b) and shall remain outstanding until the expiration of the term of the Option as specified herein. B. Any vested portion of the Option eligible to be exercised by Participant and not which has not been previously exercised may be exercised up to the time of expiration of the Option. Notwithstanding the above3(c) hereof, and except in the event of a Change of Control or the termination of if the Participant without Good Cause (as defined in the Plan)undergoes a Termination of Employment, the Option shall not be exercisable until the third anniversary of the grant of the Option. The this Option may be exercised for the lesser of three months from the date of such Termination of Employment or until the Termination Date, but only during to the thirty (30) day period which begins two (2) full days after extent vested and exercisable on the Company issues a quarterly or annual earnings releasedate of such Termination of Employment; provided, however, that if the CommitteeParticipant dies within such period, in its sole discretion, may permit then the portion of this Option that was vested and exercisable as of the date of the Termination of Employment shall continue to be exercisable for a period of one year from the date of such Termination of Employment until the Termination Date, whichever period is shorter. (e) This Option shall terminate automatically and shall not be exercisable following the Termination Date. (f) Except as provided in Paragraph 5, the purchase price of shares as to which this Option is exercised shall be paid in whole full at the time of exercise (a) in cash (including check, bank draft or money order payable to the order of the Company), (b) by delivering to the Company certificates representing shares of Common Stock theretofore owned by the Participant duly endorsed for transfer to the Company, or (c) any combination of cash or of Common Stock. To the extent permitted by applicable law, payment in full or in part at times other than that stated abovemay also be made by a cashless exercise by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds necessary to pay the Option Price, and, if requested by the Company, the amount of any federal, state, local or foreign withholding taxes. The No fraction of a share of Common Stock shall be issued by the Company upon exercise of this Option may be exercised only or accepted by the Company in amounts payment of one hundred (100) shares or whole multiples the purchase price thereof; provided, however, that this restriction shall not apply to the purchase by Participant of all outstanding vested Shares. In no event shall Participant be entitled to purchase a fractional share. Notwithstanding any provision in this Agreement to the contrary, if the Participant ceases to be an employee of the Company for any reasonrather, the Participant shall provide a cash payment for such amount as is necessary to effect the issuance and acceptance of only whole shares of Common Stock. Unless and until a certificate or certificates representing such shares have no rights with respect been issued by the Company to the portion of Participant, the Participant (or the person permitted to exercise this Option that is not then vested and the unvested portion of the Option shall be automatically forfeited. The Option may be exercised only if compliance with all applicable federal and state securities laws can be effected and only by (i) Participant's completion, execution and delivery to the Company of a notice of exercise, and (ii) the payment to the Company of the Exercise Price. Except in the event of the death of a Participant, in which event Participant's estate, executors death) shall not be or administrators, personal or legal representatives or heirs may exercise this Option in accordance with the terms of Subsection 3CB hereof, this the Option or have any of the rights thereunder may be exercised or privileges of a shareholder of the Company with respect to shares of Common Stock acquirable upon exercise of this Option. (g) This Option is not transferable by the Participant or permitted transferee only and may not be transferred or assigned in whole or in part, whether voluntarily, involuntarily or by operation of law (including, without limitation the laws of bankruptcy) other otherwise than by will or the laws of the descent and distribution or pursuant to a qualified domestic relations order. C. In other testamentary distribution, and may be exercised only by the event of Participant or the death of a Participant, Participant's estate, executors or administrators, or personal guardian or legal representatives shall be entitled, for a period of six (6) months following the date of Participant's death, to exercise the Option, but only to the extent that Participant was entitled to exercise the Option on the date of such death and subject to the earlier expiration of the Option pursuant to Section 2 hereof.. Any person so desiring to exercise Participant's the Option shall be required, as a condition to the exercise of the Option, to furnish to the Company such documentation as the Company shall deem satisfactory to evidence the authority of such person to exercise the Option on behalf representative of the Participant's estate. D. Payment of the Exercise Price shall be made in cash and/or upon approval by the Committee by surrender by the Participant of a sufficient number of shares of the Company's sStock (previously acquired by the Participant) valued at the fair market value of such shares. The Committee may, upon such terms and conditions as it deems appropriate, accept the surrender by Participant of Participant's right to exercise the Option, in whole or in part, and authorize a cash payment in consideration therefore. As a condition to the issuance of Company Stock pursuant to this the Option, the Participant authorizes the Company to withhold in accordance with applicable law, from any regular cash compensation payable to Participant, any taxes required to be withheld by the Company under federal, state or local law as a result of Participant's exercise of this Option.

Vesting and Exercise of Option. The Option shall vest and may be exercised by Participant as follows: A. The Option will vest in twenty-five percent (25%a) one- quarter third increments on December 31st of each of the first three four full calendar years following the date of the grant of the Option (or in a later year as provided hereinbelow) (a "Vesting Year"), provided, however, the Option will not vest in a particular Vesting year unless: the Company has achieved 100% of the Company's annual corporate plan approved by the Board of Directors for that Vesting year. This calculation will be made based on the methodology established for senior level corporate employees, under the Company's 1996 Management Incentive Plan. In addition, in the event the average closing price of the Company's common stock in the month of December of any Vesting Year ("Average Closing Price") does not exceed the Average Closing Price for the prior year by at least twenty (20%) percent and such an event occurs in two consecutive Vesting years, then the portions of the Option scheduled to vest in the second consecutive year shall not vest and all unvested portions of the Option shall not be eligible to vest during the first four Vesting Years of the Option (except in the event of a Change of Control). Notwithstanding the above and subject Subject to the earlier termination of the Option pursuant to clauses (i), (ii) Plan and (iii) of Section 1 hereof, the Option granted hereunder shall vest, to the extent not previously vested pursuant to this Section 3A, six months prior to the date which is ten (10) years from the date of grant (____________, 199_) and shall remain outstanding until the expiration of the term of the Option as specified herein. B. Any vested portion of the Option eligible to be exercised by Participant and not which has not been previously exercised may be exercised up to the time of expiration of the Option. Notwithstanding the above, and except in the event of a Change of Control or the termination of the Participant without Good Cause (as defined in the Plan)Agreement, the Option shall not be exercisable until the third anniversary become vested as follows: Number of Shares Commencement Date Expiration Date 10% of Shares 1st Anniversary of Grant Date 10 Years from Grant Date Additional 20% of Shares 2nd Anniversary of Grant Date 10 Years from Grant Date Additional 30% of Shares 3rd Anniversary of Grant Date 10 Years from Grant Date Remaining 40% of Shares 4th Anniversary of Grant Date 10 Years from Grant Date In accordance with Section VII.F.1 of the grant Plan, all vesting of the Option. The Option may be exercised only during Shares shall cease upon the thirty (30) day period which begins two (2) full days after date the Company issues a quarterly or annual earnings release; provided, however, that the Committee, in its sole discretion, may permit the Option to be exercised in whole or in part at times other than that stated above. The Option may be exercised only in amounts of one hundred (100) shares or whole multiples thereof; provided, however, that this restriction shall not apply to the purchase by Participant of all outstanding vested Shares. In no event shall Participant be entitled to purchase a fractional share. Notwithstanding any provision in this Agreement to the contrary, if the Participant Optionee ceases to be an employee of the Company; provided, however, that if the Optionee’s employment is terminated under the circumstances described in Section 1D.(b) of that certain Second Amended and Restated Employment Agreement executed by and between the Company for any reason, the Participant shall have no rights with respect to the portion of the Option that is not then vested and the unvested portion of Optionee dated August 8, 2011 (the “Employment Agreement”) (such a termination to be referred to herein as a “Qualifying Termination”), the Option shall be automatically forfeited. The Option may be exercised only if continue to vest until April 13, 2015 (the “Extended Vesting Period”), subject to the Optionee’s compliance with all applicable federal and state securities laws can be effected and only by the requirements of Section 1D.(d) of the Employment Agreement. (ib) Participant's completionNotwithstanding the vesting schedule set forth in Paragraph 3(a), execution and delivery fifty percent (50%) of the Vested Shares subject to the Company Option (the “Price Restricted Options”) shall only be exercisable if, as of the trading date immediately preceding the applicable exercise date, the closing price of a notice of exercise, and Share is at least one hundred fifteen percent (ii115%) the payment to the Company of the Exercise Price. Except in the event The remaining fifty percent (50%) of the death of a ParticipantVested Shares shall not be subject to such restriction, in which event Participant's estateand the Option may, executors or administratorswith respect to such Vested Shares, personal or legal representatives or heirs may exercise this Option in accordance with be exercised at any time following the date they become Vested Shares, subject to the terms of Subsection 3CB hereof, the Plan and this Agreement. Any exercise of an Option when the Option or any of the rights thereunder may be exercised by the Participant or permitted transferee only and may not be transferred or assigned in whole or in part, whether voluntarily, involuntarily or by operation of law (including, without limitation the laws of bankruptcy) other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order. C. In the event of the death closing price of a Participant, Participant's estate, executors or administrators, or personal or legal representatives shall be entitled, for a period of six Share is at least one hundred fifteen percent (6115%) months following the date of Participant's death, to exercise the Option, but only to the extent that Participant was entitled to exercise the Option on the date of such death and subject to the earlier expiration of the Option pursuant to Section 2 hereof.. Any person so desiring to exercise Participant's the Option shall be required, as a condition to the exercise of the Option, to furnish to the Company such documentation as the Company shall deem satisfactory to evidence the authority of such person to exercise the Option on behalf of the Participant's estate. D. Payment of the Exercise Price on the trading date immediately preceding the applicable exercise date shall be made in cash and/or upon approval by the Committee by surrender by the Participant deemed to be an exercise of a sufficient number Price Restricted Option. Any exercise of an Option when the closing price of a Share is less than one hundred fifteen percent (115%) of the Exercise Price on the trading date immediately preceding the applicable exercise date shall not be deemed to be an exercise of a Price Restricted Option. The terms and conditions of this Section 3(b) shall terminate immediately prior to the occurrence of a Change in Control (as defined below). Further, notwithstanding the terms of Section VII.F.1. of the Plan, following a Qualifying Termination, Vested Shares shall continue to be exercisable until April 13, 2016 (subject to the limitations set forth in this Paragraph 3(b)). (c) Notwithstanding anything to the contrary in this Section 3, one hundred percent (100%) of the Shares which are otherwise unvested Shares shall become Vested Shares upon a Change in Control. The terms of this accelerated vesting right shall continue only for so long as the Optionee continues to be an employee of the Company and with respect to any Change of Control that occurs during the Extended Vesting Period, if applicable. For purposes of this Agreement, a “Change in Control” shall be deemed to occur on the earliest of (i) the purchase or other acquisition of outstanding shares of the Company's sStock ’s capital stock by any entity, person or group of beneficial ownership, as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934 (previously acquired by other than the Participant) valued at the fair market value Company or one of such shares. The Committee may, upon such terms and conditions as it deems appropriate, accept the surrender by Participant of Participant's right to exercise the Optionits subsidiaries or employee benefit plans), in whole one or in partmore transactions, and authorize a cash payment in consideration therefore. As a condition to such that the issuance holder, following such acquisition, thereafter beneficially owns more than 50% of Company Stock pursuant to this the Option, voting power of the Participant authorizes outstanding capital stock of the Company entitled to withhold in accordance with applicable lawvote for the election of directors (“Voting Stock”); (ii) the completion by any entity, from any regular cash compensation payable to Participantperson, any taxes required to be withheld by or group (other than the Company under federal, state or local law one of its subsidiaries or employee benefit plans) of a tender offer or an exchange offer for more than 50% of the outstanding Voting Stock of the Company; and (iii) the effective time of (1) a merger or consolidation of the Company with one or more corporations as a result of Participant's exercise which the holders of this Optionthe outstanding Voting Stock of the Company immediately prior to such merger or consolidation hold less than 50% of the Voting Stock of the surviving or resulting corporation immediately after such merger or consolidation, or (2) a transfer of all or substantially all of the property or assets of the Company other than to an entity of which the Company owns at least 80% of the Voting Stock, or (3) the approval by the stockholders of the Company of a liquidation or dissolution of the Company. For the avoidance of doubt, one or more sales of Voting Stock by the holders of the Company’s Voting Stock in so-called “secondary offerings” shall not constitute a Change in Control. Any Shares which have become vested pursuant to Section 3 shall be referred to herein as “Vested Shares”.

Vesting and Exercise of Option. (a) The Option shall vest and may be exercised by become exercisable in increments 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 Participant is still in service as followsa Director on each such vesting date: A. The Option will vest in twenty-five percent (25%i) one- quarter third increments on December 31st of each of the first three four full calendar years following the date of the grant no portion of the Option shall vest or become exercisable prior to the date that is three months after the Grant Date; (or in a later year as provided hereinbelowii) (a "Vesting Year"), provided, however, the Option will not shall vest and become exercisable with respect to 25% of the number of Shares subject to the Option (as indicated in Section 1) on the date that is three months after the Grant Date; (iii) the Option shall vest and become exercisable with respect to an additional 25% of the number of Shares subject to the Option (for a particular Vesting year unless: total of 50% of the Company has achieved number of Shares subject to the Option) on the date that is six months after the Grant Date; (iv) the Option shall vest and become exercisable with respect to an additional 25% of the number of Shares subject to the Option (for a total of 75% of the number of Shares subject to the Option) on the date that is nine months after the Grant Date; and (v) the Option shall vest and become exercisable with respect to the remaining 25% of the number of Shares subject to the Option (for a total of 100% of the Company's annual corporate plan approved by number of Shares subject to the Board of Directors for that Vesting year. This calculation will be made based Option) on the methodology established for senior level corporate employeesdate that is the first anniversary of the Grant Date. (b) Notwithstanding the vesting provisions described above, under the Company's 1996 Management Incentive Plan. Option shall vest and become exercisable with respect to 100% of the Shares upon the Participant’s termination of service as a Director if the Participant’s termination of service is due to his or her death or Disability. (c) In addition, in the event the average closing price of the Company's common stock in the month of December of any Vesting Year ("Average Closing Price") does not exceed the Average Closing Price for the prior year by at least twenty (20%) percent and such an event occurs in two consecutive Vesting years, then the portions of the Option scheduled to vest in the second consecutive year following provisions shall not vest and all unvested portions of the Option shall not be eligible to vest during the first four Vesting Years of the Option (except apply in the event of a Change in Control: (i) To the extent the successor company does not assume or substitute for the Option (or the Company is the ultimate parent corporation and does not continue the Option) on substantially equivalent terms (as determined by the Committee), the Option will become vested and exercisable in full upon the effective date of the Change in Control). Notwithstanding . (ii) Further, in the above event that the Option is substituted, assumed or continued, the Option will become vested and subject exercisable in full if, within six months before (in which case vesting shall not occur until the effective date of the Change in Control) or one year after the effective date of the Change in Control, the Participant ceases to serve as a Director, or, if the Company is not the surviving Company in the Change in Control event, a member of the board of directors of the surviving entity, in either case, due to the earlier termination Participant’s failure to be nominated to serve as a director of such entity or the Participant’s failure to be elected to serve as a director of such entity, but not due to the Participant’s decision not to continue service on the Board of Directors of the Company or the board of directors of the surviving entity, as the case may be. For the purposes herein, “Company” shall include the successor to the Company’s business or assets, or if all or substantially all of the voting stock of the Company is held by another public company, such public company. In the event that vesting of the Option pursuant is accelerated as a result of a termination of service related to clauses (i), (ii) and (iii) of Section 1 hereofa Change in Control as provided herein, the Committee or the Board of Directors, in its discretion, may send the Participant prior written notice of the effectiveness of such event and the last day on which the Participant may exercise the Option. In such event, the Participant 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 granted hereunder shall vestis vested and exercisable on or prior to the last day specified in such notice, and, to the extent not previously vested pursuant to this Section 3A, six months prior to the date which is ten (10) years from the date of grant (____________, 199_) and shall remain outstanding until the expiration of the term of the Option as specified herein. B. Any vested portion of is not exercised, it shall (unless the Option eligible to be exercised by Participant and not which has not been previously exercised may be exercised up to the time of expiration of the Option. Notwithstanding the above, and except in the event of a Change of Control Committee or the termination Board of Directors determines otherwise) terminate at 5:00 P.M., Winston-Salem, North Carolina time, on the Participant without Good Cause (as defined last day specified in the Plan)such notice. If no such notice is given, the Option shall not terminate as provided in Section 4(d) herein. (d) The schedule set forth above is cumulative, so that Shares as to which the Option has become vested and exercisable pursuant to the provisions above may be exercisable until the third anniversary purchased pursuant to exercise of the grant Option at any date subsequent to vesting but prior to termination of the Option. The Option may be exercised only during the thirty (30) day period which begins two (2) full days after the Company issues a quarterly or annual earnings release; provided, however, that the Committee, in its sole discretion, may permit the Option at any time and from time to be exercised in whole or in part at times other than that stated above. The Option may be exercised only in amounts of one hundred (100) shares or whole multiples thereof; provided, however, that this restriction shall not apply time to purchase up to the purchase by Participant number of all outstanding vested Shares. In no event shall Participant be entitled Shares as to purchase a fractional share. Notwithstanding any provision in this Agreement to the contrary, if the Participant ceases to be an employee of the Company for any reason, the Participant shall have no rights with respect to the portion of the Option that which it is not then vested and the unvested portion of the Option shall be automatically forfeited. The Option may be exercised only if compliance with all applicable federal and state securities laws can be effected and only by (i) Participant's completion, execution and delivery to the Company of a notice of exercise, and (ii) the payment to the Company of the Exercise Price. Except in the event of the death of a Participant, in which event Participant's estate, executors or administrators, personal or legal representatives or heirs may exercise this Option in accordance with the terms of Subsection 3CB hereof, this the Option or any of the rights thereunder may be exercised by the Participant or permitted transferee only and may not be transferred or assigned in whole or in part, whether voluntarily, involuntarily or by operation of law (including, without limitation the laws of bankruptcy) other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations orderexercisable. C. In the event of the death of a Participant, Participant's estate, executors or administrators, or personal or legal representatives shall be entitled, for a period of six (6) months following the date of Participant's death, to exercise the Option, but only to the extent that Participant was entitled to exercise the Option on the date of such death and subject to the earlier expiration of the Option pursuant to Section 2 hereof.. Any person so desiring to exercise Participant's the Option shall be required, as a condition to the exercise of the Option, to furnish to the Company such documentation as the Company shall deem satisfactory to evidence the authority of such person to exercise the Option on behalf of the Participant's estate. D. Payment of the Exercise Price shall be made in cash and/or upon approval by the Committee by surrender by the Participant of a sufficient number of shares of the Company's sStock (previously acquired by the Participant) valued at the fair market value of such shares. The Committee may, upon such terms and conditions as it deems appropriate, accept the surrender by Participant of Participant's right to exercise the Option, in whole or in part, and authorize a cash payment in consideration therefore. As a condition to the issuance of Company Stock pursuant to this the Option, the Participant authorizes the Company to withhold in accordance with applicable law, from any regular cash compensation payable to Participant, any taxes required to be withheld by the Company under federal, state or local law as a result of Participant's exercise of this Option.

Vesting and Exercise of Option. The Option shall vest and may be exercised by Participant as follows: A. The Option will vest in twenty-five percent (25%a) one- quarter third increments on December 31st of each of the first three four full calendar years following the date of the grant of the Option (or in a later year as provided hereinbelow) (a "Vesting Year"), provided, however, the Option will not vest in a particular Vesting year unless: the Company has achieved 100% of the Company's annual corporate plan approved by the Board of Directors for that Vesting year. This calculation will be made based on the methodology established for senior level corporate employees, under the Company's 1996 Management Incentive Plan. In addition, in the event the average closing price of the Company's common stock in the month of December of any Vesting Year ("Average Closing Price") does not exceed the Average Closing Price for the prior year by at least twenty (20%) percent and such an event occurs in two consecutive Vesting years, then the portions of the Option scheduled to vest in the second consecutive year shall not vest and all unvested portions of the Option shall not be eligible to vest during the first four Vesting Years of the Option (except in the event of a Change of Control). Notwithstanding the above and subject Subject to the earlier termination of the Option pursuant to clauses (i), (ii) Plan and (iii) of Section 1 hereof, the Option granted hereunder shall vest, to the extent not previously vested pursuant to this Section 3A, six months prior to the date which is ten (10) years from the date of grant (____________, 199_) and shall remain outstanding until the expiration of the term of the Option as specified herein. B. Any vested portion of the Option eligible to be exercised by Participant and not which has not been previously exercised may be exercised up to the time of expiration of the Option. Notwithstanding the above, and except in the event of a Change of Control or the termination of the Participant without Good Cause (as defined in the Plan)Agreement, the Option shall not be exercisable until the third anniversary become vested as follows: Number of Shares Commencement Date Expiration Date 10% of Shares 1st Anniversary of Grant Date 10 Years from Grant Date Additional 20% of Shares 2nd Anniversary of Grant Date 10 Years from Grant Date Additional 30% of Shares 3rd Anniversary of Grant Date 10 Years from Grant Date Remaining 40% of Shares 4th Anniversary of Grant Date 10 Years from Grant Date In accordance with Section VII.F.1 of the grant Plan, all vesting of the Option. The Option may be exercised only during Shares shall cease upon the thirty (30) day period which begins two (2) full days after date the Company issues a quarterly or annual earnings release; provided, however, that the Committee, in its sole discretion, may permit the Option to be exercised in whole or in part at times other than that stated above. The Option may be exercised only in amounts of one hundred (100) shares or whole multiples thereof; provided, however, that this restriction shall not apply to the purchase by Participant of all outstanding vested Shares. In no event shall Participant be entitled to purchase a fractional share. Notwithstanding any provision in this Agreement to the contrary, if the Participant Optionee ceases to be an employee of the Company; provided, however, that if the Optionee’s employment is terminated under the circumstances described in Section 1D.(b) of that certain Second Amended and Restated Employment Agreement executed by and between the Company for any reason, the Participant shall have no rights with respect to the portion of the Option that is not then vested and the unvested portion of Optionee dated August 8, 2011 (the “Employment Agreement”) (such a termination to be referred to herein as a “Qualifying Termination”), the Option shall continue to vest until April 13, 2016 (the “Extended Vesting Period”) at which time it will be automatically forfeited. The Option may be exercised only if fully vested, subject to the Optionee’s compliance with all applicable federal and state securities laws can be effected and only by the requirements of Section 1D.(d) of the Employment Agreement. (ib) Participant's completionNotwithstanding the vesting schedule set forth in Paragraph 3(a), execution and delivery fifty percent (50%) of the Vested Shares subject to the Company Option (the “Price Restricted Options”) shall only be exercisable if, as of the trading date immediately preceding the applicable exercise date, the closing price of a notice of exercise, and Share is at least one hundred fifteen percent (ii115%) the payment to the Company of the Exercise Price. Except in the event The remaining fifty percent (50%) of the death of a ParticipantVested Shares shall not be subject to such restriction, in which event Participant's estateand the Option may, executors or administratorswith respect to such Vested Shares, personal or legal representatives or heirs may exercise this Option in accordance with be exercised at any time following the date they become Vested Shares, subject to the terms of Subsection 3CB hereof, the Plan and this Agreement. Any exercise of an Option when the Option or any of the rights thereunder may be exercised by the Participant or permitted transferee only and may not be transferred or assigned in whole or in part, whether voluntarily, involuntarily or by operation of law (including, without limitation the laws of bankruptcy) other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order. C. In the event of the death closing price of a Participant, Participant's estate, executors or administrators, or personal or legal representatives shall be entitled, for a period of six Share is at least one hundred fifteen percent (6115%) months following the date of Participant's death, to exercise the Option, but only to the extent that Participant was entitled to exercise the Option on the date of such death and subject to the earlier expiration of the Option pursuant to Section 2 hereof.. Any person so desiring to exercise Participant's the Option shall be required, as a condition to the exercise of the Option, to furnish to the Company such documentation as the Company shall deem satisfactory to evidence the authority of such person to exercise the Option on behalf of the Participant's estate. D. Payment of the Exercise Price on the trading date immediately preceding the applicable exercise date shall be made in cash and/or upon approval by the Committee by surrender by the Participant deemed to be an exercise of a sufficient number Price Restricted Option. Any exercise of an Option when the closing price of a Share is less than one hundred fifteen percent (115%) of the Exercise Price on the trading date immediately preceding the applicable exercise date shall not be deemed to be an exercise of a Price Restricted Option. The terms and conditions of this Section 3(b) shall terminate immediately prior to the occurrence of a Change in Control (as defined below). Further, notwithstanding the terms of Section VII.F.1. of the Plan, following a Qualifying Termination, Vested Shares shall continue to be exercisable until April 13, 2018 (subject to the limitations set forth in this Paragraph 3(b)). (c) Notwithstanding anything to the contrary in this Section 3, one hundred percent (100%) of the Shares which are otherwise unvested Shares shall become Vested Shares upon a Change in Control. The terms of this accelerated vesting right shall continue only for so long as the Optionee continues to be an employee of the Company and with respect to any Change of Control that occurs during the Extended Vesting Period, if applicable. For purposes of this Agreement, a “Change in Control” shall be deemed to occur on the earliest of (i) the purchase or other acquisition of outstanding shares of the Company's sStock ’s capital stock by any entity, person or group of beneficial ownership, as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934 (previously acquired by other than the Participant) valued at the fair market value Company or one of such shares. The Committee may, upon such terms and conditions as it deems appropriate, accept the surrender by Participant of Participant's right to exercise the Optionits subsidiaries or employee benefit plans), in whole one or in partmore transactions, and authorize a cash payment in consideration therefore. As a condition to such that the issuance holder, following such acquisition, thereafter beneficially owns more than 50% of Company Stock pursuant to this the Option, voting power of the Participant authorizes outstanding capital stock of the Company entitled to withhold in accordance with applicable lawvote for the election of directors (“Voting Stock”); (ii) the completion by any entity, from any regular cash compensation payable to Participantperson, any taxes required to be withheld by or group (other than the Company under federal, state or local law one of its subsidiaries or employee benefit plans) of a tender offer or an exchange offer for more than 50% of the outstanding Voting Stock of the Company; and (iii) the effective time of (1) a merger or consolidation of the Company with one or more corporations as a result of Participant's exercise which the holders of this Optionthe outstanding Voting Stock of the Company immediately prior to such merger or consolidation hold less than 50% of the Voting Stock of the surviving or resulting corporation immediately after such merger or consolidation, or (2) a transfer of all or substantially all of the property or assets of the Company other than to an entity of which the Company owns at least 80% of the Voting Stock, or (3) the approval by the stockholders of the Company of a liquidation or dissolution of the Company. For the avoidance of doubt, one or more sales of Voting Stock by the holders of the Company’s Voting Stock in so-called “secondary offerings” shall not constitute a Change in Control. Any Shares which have become vested pursuant to Section 3 shall be referred to herein as “Vested Shares”.

Vesting and Exercise of Option. The Option shall vest and may be exercised by Participant as follows: A. The Option will vest in twenty-five percent (25%) one- quarter third increments fully exercisable on December 31st of each of the first three four full calendar years following the date of the grant of the Option (or in a later year as provided hereinbelow) (a "Vesting Year"), [ONE YEAR FOLLOWING GRANT DATE]; provided, however, that if prior to [ONE YEAR FOLLOWING GRANT DATE] the Option will not vest in Grantee ceases to be a particular Vesting year unless: the Company has achieved 100% member of the Company's annual corporate plan approved by the Board of Directors for that Vesting year. This calculation will be made based on the methodology established for senior level corporate employees, under the Company's 1996 Management Incentive Plan. In addition, in the event the average closing price of the Company's common stock in Company (the month of December of “Board”) for any Vesting Year ("Average Closing Price") does not exceed reason other than for cause, the Average Closing Price for the prior year by at least twenty (20%) percent and such an event occurs in two consecutive Vesting years, then the portions of the Option scheduled to vest in the second consecutive year shall not vest and all unvested portions vesting of the Option shall not be eligible accelerate so that the Option becomes immediately exercisable with respect to vest during the first four Vesting Years one twelfth (1/12) of the Shares underlying the Option for each full month that has elapsed between the Grant Date and the date the Grantee ceases to be a member of the Board. Grantee may elect at any time while a member of the Board to exercise in full the Shares subject to this Option prior to the vesting of the Option. Any such shares purchased prior to their vesting: (except i) shall vest in accordance with the vesting schedule otherwise applicable to the Option; and (ii) shall be subject to a repurchase right in favor of the Company in the event of a Change termination of Controlservice as set forth in Section 8 of the Plan (a “Termination Event”). Notwithstanding The repurchase right of the above Company shall be for any unvested shares and subject shall be at a price equal to the earlier termination lesser of (x) the exercise price of such shares, or (y) the Fair Market Value of such shares on the date of repurchase, which right must be exercised by the Company within 90 days of the Termination Event; provided that if the Company does not exercise such repurchase right within such 90-day period, the Option shall become fully and immediately vested. The option price of the shares of Common Stock issuable upon the exercise of the Option pursuant to clauses shall be paid: (i)) in full in cash at the time of the exercise, (ii) and (iii) with the consent of Section 1 hereofthe Committee, in whole or in part in common stock held by the Option granted hereunder shall vest, to the extent not previously vested pursuant to this Section 3A, Holder for at least six months prior to the date which is ten (10) years from the date of grant (____________, 199_) and shall remain outstanding until the expiration of the term of the Option as specified herein. B. Any vested portion of the Option eligible to be exercised by Participant and not which has not been previously exercised may be exercised up to the time of expiration of the Option. Notwithstanding the above, and except in the event of a Change of Control or the termination of the Participant without Good Cause valued at Fair Market Value (as defined in the Plan)) on the date of exercise, or (iii) if approved by the Option shall not be exercisable until Committee in its discretion, by assigning to the third anniversary Company a sufficient amount of the grant proceeds from the sale of shares of Common Stock to be acquired pursuant to such exercise and instructing the broker or selling agent to pay that amount to the Company, which amount shall be paid in cash to the Company on the date such shares of Common Stock are issued to the Grantee. With the consent of the Option. The Committee, payment upon the exercise of this Option may be exercised only during the thirty (30) day period which begins two (2) full days after the Company issues a quarterly or annual earnings release; provided, however, that the Committee, in its sole discretion, may permit the Option to be exercised made in whole or in part at times other than by Restricted Stock that stated above. The Option may be exercised only in amounts of one hundred (100) shares or whole multiples thereof; provided, however, that this restriction shall not apply to the purchase by Participant of all outstanding vested Shares. In no event shall Participant be entitled to purchase a fractional share. Notwithstanding any provision in this Agreement to the contrary, if the Participant ceases to be an employee of the Company for any reason, the Participant shall have no rights with respect to the portion of the Option that is not then vested and the unvested portion of the Option shall be automatically forfeited. The Option may be exercised only if compliance with all applicable federal and state securities laws can be effected and only by (i) Participant's completion, execution and delivery to the Company of a notice of exercise, and (ii) the payment to the Company of the Exercise Price. Except in the event of the death of a Participant, in which event Participant's estate, executors or administrators, personal or legal representatives or heirs may exercise this Option in accordance with the terms of Subsection 3CB hereof, this the Option or any of the rights thereunder may be exercised has been held by the Participant or permitted transferee only and may not be transferred or assigned in whole or in part, whether voluntarily, involuntarily or by operation of law Grantee for at least six months (including, without limitation the laws of bankruptcy) other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order. C. In the event of the death of a Participant, Participant's estate, executors or administrators, or personal or legal representatives shall be entitled, for a period of six (6) months following the date of Participant's death, to exercise the Option, but only to the extent that Participant was entitled to exercise the Option based on the date of such death and subject to the earlier expiration of the Option pursuant to Section 2 hereof.. Any person so desiring to exercise Participant's the Option shall be required, as a condition to the exercise of the Option, to furnish to the Company such documentation as the Company shall deem satisfactory to evidence the authority of such person to exercise the Option on behalf of the Participant's estate. D. Payment of the Exercise Price shall be made in cash and/or upon approval by the Committee by surrender by the Participant of a sufficient number of shares of the Company's sStock (previously acquired by the Participant) valued at the fair market value of the Restricted Stock on the date the Option is exercised, as determined by the Committee). In such shares. The Committee maycase, upon such terms and conditions as it deems appropriate, accept the surrender by Participant of Participant's right Common Stock to exercise which the Option, in whole or in part, and authorize a cash payment in consideration therefore. As a condition Option relates shall be subject to the issuance of Company same forfeiture restrictions originally imposed on the Restricted Stock pursuant to this the Option, the Participant authorizes the Company to withhold in accordance with applicable law, from any regular cash compensation payable to Participant, any taxes required to be withheld by the Company under federal, state or local law as a result of Participant's exercise of this Optionexchanged therefor.

Vesting and Exercise of Option. (a) The Option shall vest and may be exercised by become exercisable in increments 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 Participant as followshas not incurred a Termination of Employment prior to the vesting date with respect to such increment: A. The Option will vest in twenty-five percent (25%i) one- quarter third increments on December 31st of each of the first three four full calendar years following the date of the grant no portion of the Option shall vest or become exercisable prior to the first anniversary of the Grant Date; (or in a later year as provided hereinbelowii) (a "Vesting Year"), provided, howeveron the first anniversary of the Grant Date, the Option will not shall vest and become exercisable with respect to 25% of the number of Shares subject to the Option (as indicated in Section 1); (iii) on the second anniversary of the Grant Date, the Option shall vest and become exercisable with respect to an additional 25% of the number of Shares subject to the Option (for a particular Vesting year unless: total of 50% of the Company has achieved number of Shares subject to the Option); (iv) on the third anniversary of the Grant Date, the Option shall vest and become exercisable with respect to an additional 25% of the number of Shares subject to the Option (for a total of 75% of the number of Shares subject to the Option); and (v) on the fourth anniversary of the Grant Date, the Option shall vest and become exercisable with respect to the remaining 25% of the number of Shares subject to the Option (for a total of 100% of the Company's annual corporate plan approved by number of Shares subject to the Board Option). (b) Notwithstanding the vesting provisions described above, the Option shall vest and become exercisable with respect to 100% of Directors for the Shares upon the Participant’s Termination of Employment if the Participant’s Termination of Employment is due to his or her Retirement, death or Disability or as may otherwise be provided pursuant to the terms of that Vesting year. This calculation will be made based on the methodology established for senior level corporate employeescertain Employment Agreement dated as of May 13, under 2014 between the Company's 1996 Management Incentive Plan. , Krispy Kreme Doughnut Corporation and the Participant (the “Employment Agreement”), the terms of which Employment Agreement are hereby incorporated by reference and made a part of this Agreement. (c) In addition, in the event the average closing price of the Company's common stock in the month of December of any Vesting Year ("Average Closing Price") does not exceed the Average Closing Price for the prior year by at least twenty (20%) percent and such an event occurs in two consecutive Vesting years, then the portions of the Option scheduled to vest in the second consecutive year following provisions shall not vest and all unvested portions of the Option shall not be eligible to vest during the first four Vesting Years of the Option (except apply in the event of a Change of Control). Notwithstanding the above and subject in Control (except to the earlier termination extent otherwise provided in the Employment Agreement): (i) To the extent the successor company does not assume or substitute for the Option (or the Company is the ultimate parent corporation and does not continue the Option) on substantially equivalent terms (as determined by the Committee), the Option will become vested and exercisable in full upon the effective date of the Change in Control. (ii) Further, in the event that the Option is substituted, assumed or continued, the Option will become vested and exercisable in full if the Participant incurs a Termination of Employment within six months before (in which case vesting shall not occur until the effective date of the Change in Control) or two years after the effective date of a Change in Control if such Termination of Employment (A) is by the Company not for Cause or (B) is by the Participant for Good Reason. In the event that vesting of the Option pursuant is accelerated as a result of a Termination of Employment related to clauses (i), (ii) and (iii) of Section 1 hereofa Change in Control as provided herein, the Committee or the Board of Directors, in its discretion, may send the Participant prior written notice of the effectiveness of such event and the last day on which the Participant may exercise the Option. In such event, the Participant 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 granted hereunder shall vestis vested and exercisable on or prior to the last day specified in such notice, and, to the extent not previously vested pursuant to this Section 3A, six months prior to the date which is ten (10) years from the date of grant (____________, 199_) and shall remain outstanding until the expiration of the term of the Option as specified herein. B. Any vested portion of is not exercised, it shall (unless the Option eligible to be exercised by Participant and not which has not been previously exercised may be exercised up to the time of expiration of the Option. Notwithstanding the above, and except in the event of a Change of Control Committee or the termination Board of Directors determines otherwise) terminate at 5:00 P.M., Winston-Salem, North Carolina time, on the Participant without Good Cause (as defined last day specified in the Plan)such notice. If no such notice is given, the Option shall not be exercisable until terminate as provided in Section 4(f) herein. For the third anniversary purposes herein, (X) “Good Reason” shall have the meaning set forth in Section 21(c) of the grant Agreement; and (Y) “Company” shall include the successor to the Company’s business or assets, or if all or substantially all of the voting stock of the Company is held by another public company, such public company. The schedule set forth above is cumulative, so that Shares as to which the Option has become vested and exercisable pursuant to the provisions above may be purchased pursuant to exercise of the Option at any date subsequent to vesting but prior to termination of the Option. The Option may be exercised only during the thirty (30) day period which begins two (2) full days after the Company issues a quarterly or annual earnings release; provided, however, that the Committee, in its sole discretion, may permit the Option at any time and from time to be exercised in whole or in part at times other than that stated above. The Option may be exercised only in amounts of one hundred (100) shares or whole multiples thereof; provided, however, that this restriction shall not apply time to purchase up to the purchase by Participant number of all outstanding vested Shares. In no event shall Participant be entitled Shares as to purchase a fractional share. Notwithstanding any provision in this Agreement to the contrary, if the Participant ceases to be an employee of the Company for any reason, the Participant shall have no rights with respect to the portion of the Option that which it is not then vested and the unvested portion of the Option shall be automatically forfeited. The Option may be exercised only if compliance with all applicable federal and state securities laws can be effected and only by (i) Participant's completion, execution and delivery to the Company of a notice of exercise, and (ii) the payment to the Company of the Exercise Price. Except in the event of the death of a Participant, in which event Participant's estate, executors or administrators, personal or legal representatives or heirs may exercise this Option in accordance with the terms of Subsection 3CB hereof, this the Option or any of the rights thereunder may be exercised by the Participant or permitted transferee only and may not be transferred or assigned in whole or in part, whether voluntarily, involuntarily or by operation of law (including, without limitation the laws of bankruptcy) other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations orderexercisable. C. In the event of the death of a Participant, Participant's estate, executors or administrators, or personal or legal representatives shall be entitled, for a period of six (6) months following the date of Participant's death, to exercise the Option, but only to the extent that Participant was entitled to exercise the Option on the date of such death and subject to the earlier expiration of the Option pursuant to Section 2 hereof.. Any person so desiring to exercise Participant's the Option shall be required, as a condition to the exercise of the Option, to furnish to the Company such documentation as the Company shall deem satisfactory to evidence the authority of such person to exercise the Option on behalf of the Participant's estate. D. Payment of the Exercise Price shall be made in cash and/or upon approval by the Committee by surrender by the Participant of a sufficient number of shares of the Company's sStock (previously acquired by the Participant) valued at the fair market value of such shares. The Committee may, upon such terms and conditions as it deems appropriate, accept the surrender by Participant of Participant's right to exercise the Option, in whole or in part, and authorize a cash payment in consideration therefore. As a condition to the issuance of Company Stock pursuant to this the Option, the Participant authorizes the Company to withhold in accordance with applicable law, from any regular cash compensation payable to Participant, any taxes required to be withheld by the Company under federal, state or local law as a result of Participant's exercise of this Option.