The man who discovered a small coffee shop in 1981 and turned it into a billion dollar company in Waterbury, and himself into a captain of industry, has been removed as chairman of the company. Green Mountain Coffee Roasters, Inc (GMCR) (NASDAQ: GMCR) Tuesday evening announced that its Board of Directors has appointed Michael J Mardy, a director and chair of the Company's Audit and Finance Committee, as interim Chairman of the Board. In addition, state Senator Hinda S Miller, chair of the Company's Corporate Social Responsibility Committee, has been appointed as Chair of the Governance and Nominating Committee, a committee she last chaired in 2010. All appointments were effective immediately.
A release from the company said, "At the direction of the Board of Directors, Mr Robert P Stiller no longer serves as Chairman of the Board and Mr William D Davis no longer serves as Lead Director of the Board, effective immediately. Additionally, Mr Stiller and Mr Davis will no longer serve on any Board committees and will not receive future payment for their service on the Board until the Board determines otherwise. Both will remain members of the Board. The Governance and Nominating Committee will be reviewing appropriate Board and committee structure and composition."
As first reported by Vermont Business Magazine before the markets opened Tuesday morning, Stiller had sold 5 million shares worth $125.5 million because of a margin call forced on him by Deutsche Bank. He also was forced to sell his entire stake (8.06 million shares) in Krispy Kreme Doughnuts for a total of $49.569 million (see below).
The GMCR release went on to say that, "These changes are the result of the actions taken by the Board to address stock sales by Mr Stiller's and Mr Davis' brokerage firm, which sales were inconsistent with the Company's internal trading policies. Specifically, Mr Stiller and Mr Davis had margin call-related stock sales totaling 5.548 million shares, reflected in Form 4 filings filed with the Securities and Exchange Commission today. These forced sales were related to margin loans, which were secured by pledges of Mr Stiller's and Mr Davis' GMCR stock and triggered by recent GMCR stock price activity.
"On Friday, May 4, 2012, as the result of a margin call on pledged GMCR stock, approximately 400,000 shares and on Monday, May 7, 2012 approximately 148,000 shares of GMCR stock were sold from Mr Davis' brokerage account at a time when the trading window in GMCR stock was closed pursuant to the Company's internal trading policy. In addition, during the Company's review of the May 4 trade, it learned that, inconsistent with the Company's policy, Mr Davis had pledged approximately 204,000 new shares to his margin loan after January 1, 2012.
"On Monday, May 7, 2012, as the result of a margin call on pledged GMCR stock, 5 million shares of GMCR stock were sold from Mr Stiller's brokerage account, at a time when the trading window in GMCR stock was closed pursuant to the Company's internal trading policy.
"It should be noted that Mr Stiller's and Mr Davis' pledged positions as of January 1, 2012 were grandfathered by the Board when it amended the Company's internal trading policy in December 2011 to prohibit new pledges after January 1, 2012.
"As of the close of trading on May 7, 2012, Mr. Stiller beneficially owned 8,386,899 million shares of GMCR common stock. If all of Mr. Stiller's shares that are held in margin accounts or pledged as collateral to various financial institutions as security for one or more loans were settled as of May 8, 2012, Mr. Stiller would beneficially own 1,857,031 million shares of GMCR stock. As of the close of trading on May 7, 2012, Mr Davis beneficially owned 436,786 shares of GMCR common stock. If all of Mr. Davis' shares that are held in margin accounts or pledged as collateral to various financial institutions as security for one or more loans were settled as of May 8, 2012, Mr Davis would beneficially own 36,598 shares of GMCR stock.
"The Board has also mandated that Mr Stiller and Mr Davis settle all outstanding margin loans by the end of calendar year 2012.
Company shares, already battered by investor discontent since last fall, took a further beating after a disappointing quarterly report released May 2, losing more than three quarters of its value since peaking last September at over $115 per share. However, shares actually rallied some after the news of a class action suit and Stiller's stock sale. After bottoming out at a 52-week low of $24.03 within hours of the release of the quarterly report, shares climbed Tuesday more than $2 before retreating somewhat in after hours trading. Shares stood at $25.58 just before 8 pm Tuesday. It opened Wednesday at $26. (QUOTE)
The company release issued this statement from the Board:
"Based upon the recent decline in GMCR stock price, Mr Stiller and Mr Davis were both faced with margin calls resulting in sales of their GMCR stock. These forced sales are disappointing and beyond the control of the Company. Once the Board was notified of this trading activity, it moved quickly to investigate and address this matter. The Board determined that it was in the best interest of the Company and its shareholders for Mr Stiller and Mr Davis to relinquish their leadership positions on the Board as well as their committee roles."
Stiller granted an interview with Forbes, in which he says he was caught off-guard by the sudden plunge of the stock, which lost half its value in a matter of hourse. He also lashed out at his bank and short-selling investors. In the interview, Stiller maintains that GMCR is still in good shape despite the recent tumult. (FORBES STORY)
Forward-Looking Statements
Certain statements contained herein are not based on historical fact and are "forward-looking statements" within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "feel," "forecast," "intend," "may," "plan," "potential," "project," "should," "would," and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those stated here. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the difficulty in forecasting sales and production levels, the degree to which there are changes in consumer sentiment in this difficult economic environment, the Company's success in efficiently expanding operations and capacity to meet growth, the Company's success in efficiently and effectively integrating the Company's acquisitions, the ability to maximize or successfully assert our intellectual property rights, the Company's success in introducing and producing new product offerings, the Company's dependence on external capital, including the Company's credit facility, competition and other business conditions in the coffee industry and food industry in general, fluctuations in availability and cost of high-quality green coffee, any other increases in costs including fuel, the Company's ability to continue to grow and build profits in the At Home and Away from Home businesses, the Company's ability to attract and retain senior management, the continued availability of a consistent supply of parts for our brewers, and the brewers themselves, the Company experiencing product liability, product recall and higher than anticipated rates of warranty expense or sales returns associated with a product quality or safety issue, the extent to which the data security of the Company's websites may be compromised, the impact of the loss of major customers for the Company or reduction in the volume of purchases by major customers, delays in the timing of adding new locations with existing customers, the Company's level of success in continuing to attract new customers, sales mix variances, weather and special or unusual events, the impact of the inquiry initiated by the SEC and any related litigation or additional governmental investigative or enforcement proceedings, as well as other risks described more fully in the Company's Annual Report on Form 10-K for fiscal year 2011 and other filings with the SEC. Forward-looking statements reflect management's analysis as of the date of this release. The Company does not undertake to revise these statements to reflect subsequent developments, other than in its regular, quarterly earnings releases.
WATERBURY, Vt.--(BUSINESS WIRE)--5.8.2012
SEC Form 4
FORM 4
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
OMB APPROVAL
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hours per response:
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X
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue.SeeInstruction 1(b).
1. Name and Address of Reporting Person*
STILLER ROBERT P
(Last)
(First)
(Middle)
C/O SUNRISE MANAGEMENT SERVICES, LLC
PO BOX 2263
(Street)
SO. BURLINGTON
VT
05407
(City)
(State)
(Zip)
2. Issuer NameandTicker or Trading Symbol
KRISPY KREME DOUGHNUTS INC[KKD]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director
X
10% Owner
Officer (give title below)
Other (specify below)
3. Date of Earliest Transaction (Month/Day/Year)
05/07/2012
4. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
X
Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)
2. Transaction Date (Month/Day/Year)
2A. Deemed Execution Date, if any (Month/Day/Year)
3. Transaction Code (Instr. 8)
4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)
5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)
6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)
7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code
V
Amount
(A) or (D)
Price
Common Stock
05/07/2012
S
1,400,000
D
$6.15
6,660,000
D
Common Stock
05/07/2012
S
6,660,000
D
$6.15
0
D
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)
2. Conversion or Exercise Price of Derivative Security
3. Transaction Date (Month/Day/Year)
3A. Deemed Execution Date, if any (Month/Day/Year)
4. Transaction Code (Instr. 8)
5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)
6. Date Exercisable and Expiration Date (Month/Day/Year)
7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)
8. Price of Derivative Security (Instr. 5)
9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)
10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)
11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code
V
(A)
(D)
Date Exercisable
Expiration Date
Title
Amount or Number of Shares
Explanation of Responses:
Remarks:
/s/ Robert P. Stiller
05/09/2012
** Signature of Reporting Person
Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person,seeInstruction 4 (b)(v).
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