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Name and title: R. Frank Murphy, executive vice president, general counsel and secretary age: 55 organization: Krispy Kreme Doughnuts Inc. is famous for its hot “original glazed” yeast-doughnuts. There are also more than 20 other varieties among the 7.5 million doughnuts that the company produces each day. It’s one of the more notable growth companies in America today. The doughnut maker’s stock price is up more than 500% since its April 2000 initial public offering, making it one of the best-performing stocks of the past three years. Krispy Kreme’s place in American culture was confirmed in 1997 when its Ring King Junior doughnut-making machine was displayed in the Smithsonian’s National Museum of American History in Washington. Nearly two-thirds of Krispy Kreme’s 278 U.S. and Canadian stores are franchises. The rest are company-owned. The Winston-Salem, N.C.-based company employs 4,300 people and had revenue of $491.5 million in the fiscal year that ended in February. longstanding relationship: Murphy spent 20 years as outside counsel to Krispy Kreme before becoming general counsel in April 2002. The company had been without a GC since the early 1990s. Management decided it needed someone in-house to oversee legal matters for the rapidly expanding public company. Murphy left his law firm of 30 years, Atlanta-based Kilpatrick Stockton and its predecessors (where he had worked in the Winston-Salem offices), to join Krispy Kreme. “Instead of being called in for just special projects and sometimes late in the game on other matters, I’m now able to be involved from the outset, including strategic planning,” he said. post-enron: Amid the Enron scandal, Krispy Kreme announced a series of corporate governance reforms to shore up investor confidence following press reports in February 2002 that called a particular lease that the company used to finance a new $35 million doughnut-mixing plant an accounting gimmick. CEO Scott Livengood insisted that Krispy Kreme had done nothing illegal or inappropriate by using a so-called synthetic lease, which allows a company to control real estate and equipment without being required to list it as an asset on its balance sheet. But he said the company would refinance the plant with traditional bank financing to avoid any misperceptions. Murphy, still outside counsel at the time, attended the board meeting where the decision was made. Krispy Kreme completed its governance reforms in April. The final step was the restructuring of its board so that a majority of the members are now independent of its management. Murphy changed the corporate bylaws accordingly and provided the governance committee with information about the nominees as well as other details. One of the two new board members is former White House chief of staff Erskine Bowles, who lost the North Carolina Senate race to Elizabeth Dole last fall. legal department: Murphy oversees a legal department with one other lawyer and one paralegal. Senior attorney Stephen Johnson works mainly on real estate matters, including property leases, new store locations, store expansions and environmental compliance. He also handles legal issues related to the daily operations of Krispy Kreme stores, such as shipment of equipment, personal injury litigation, agreements related to the licensing of recipes and formulas for developing new products. Murphy declined to say what his department’s budget is, only noting that it’s in the millions. “We are more interested in good value and getting things done efficiently than we are in saving money on an absolute basis because it could impede our growth,” he said. his role: Murphy divides his time among acquisitions and market expansions, corporate-governance issues and relations with Krispy Kreme’s 21 franchisees, who include baseball legend Hank Aaron. He also works with the company’s chief executive, financial and operating officers on implementing its strategy. For instance, he set up two Swiss subsidiaries for the company’s expansion into foreign markets beyond Canada. As corporate secretary, he also attends all board meetings, helps set the meeting agenda and maintains corporate records. empire building: Krispy Kreme has opened 58 new stores in the short time Murphy has been there and plans to open 77 more this year. Nearly all are opened by existing franchisees, sometimes requiring amendments to existing franchise agreements. Murphy makes sure the legal documentation to implement the deals is in place. He also advised the company’s executive vice president for worldwide development on setting up joint ventures in Australia and England to open the first Krispy Kreme stores in those countries later this year or early next year. He’s currently advising the executive vice president on negotiations over potential joint ventures in Mexico, Japan, South Korea and Spain. major acquisition: Murphy oversaw the legal work on Krispy Kreme’s biggest acquisition, its $39 million purchase of Montana Mills Bread Co. Inc., a chain of upscale bread stores, which closed in April. Krispy Kreme financed the acquisition by issuing 1.2 million shares of stock to Montana Mills shareholders. Murphy worked on the stock-registration statements with the company’s finance department and lawyers from New York’s Cahill Gordon & Reindel. Now he is integrating Montana Mills’ employee-benefit plans into Krispy Kreme’s. litigation: The overwhelming majority of claims against the company involve customer and employee injuries, which are handled by its risk management department and are usually resolved without litigation. The most expensive lawsuit in Krispy Kreme’s history is coming to a close. Kevin Boylan and Bruce Newberg sued the company for breach of contract in March 2000 after Krispy Kreme awarded development and franchise rights for Northern California to another group, according to Krispy Kreme’s Securities and Exchange Commission filing. Krispy Kreme officials said it had been in talks with the plaintiffs but never reached an agreement. On Feb. 7, an arbitration panel awarded the plaintiffs $7,925,000 in an interim decision. A final decision is expected soon. Murphy said he can’t discuss the case because of a confidentiality agreement. He did describe his role, saying he oversaw outside counsel Kilpatrick Stockton, attended the hearings, coordinated evidence and helped prepare witnesses. outside counsel: Kilpatrick Stockton remains the company’s primary outside counsel. It handles intellectual property issues, store expansions, joint ventures and employment matters. Washington’s Covington & Burling works on the company’s international expansion. And Cahill Gordon handles most of the securities work. route to the top: Murphy graduated from Davidson College in 1969 and from Vanderbilt University School of Law in 1972. He started as a corporate attorney at Petree Stockton, a 15-lawyer firm in his hometown of Winston-Salem. In 1997, Petree Stockton merged with Atlanta-based Kilpatrick & Cody, becoming Kilpatrick Stockton. Murphy remained in the Winston-Salem office and was the firm’s deputy managing partner from 1997 to 2000. Livengood, the Krispy Kreme CEO, offered him the general counsel position two years later. In his new position, Murphy said, he eats several doughnuts a week “in the name of market research.” The hot “original glazed” is his favorite. family: Murphy and his wife, Mary Jo, have three grown children. Mary Elizabeth Geiger, 30, is a lawyer in Glenwood Springs, Colo.; Will, 28, is an art director at an Atlanta design firm; and Jay, 25, is a musician and recording engineer in Chapel Hill, N.C. last book read: King of Torts, by John Grisham. -Susan Mandel

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