The Sweet Smell of Success Fees

Krispy Kreme will issue Kroll Zolfo Cooper a warrant for 1.2 million shares for its services.
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Krispy Kreme

(KKD)

signed off on the terms of a "success fee" the company will pay Kroll Zolfo Cooper for the management services the firm is planning to provide the troubled breakfast sweets peddler.

The Winston-Salem, N.C., company will issue Kroll a warrant to buy 1.2 million Krispy Kreme shares at an exercise price of $7.75 a share. The doughnut seller said the number of shares that will be issued and the exercise price are subject to adjustments, according to certain provisions of the agreement.

The warrant will become exercisable on Jan. 29, 2006, or 30 days following the public announcement of the appointment of a new chief executive, whichever is later. Those terms won't apply if the company terminates the pact with cause or Kroll ends the agreement without good reason, in which case the warrant would be forfeited.

Kroll Zolfo Cooper provides services such as turnaround consulting, crisis management, and forensic and litigation assistance. The firm is part of

Marsh & McLennan

(MMC) - Get Report

.

Krispy Kreme said the warrant will expire Jan. 31, 2013. The former Wall Street highflier, which roared out of the Southeast with its signature hot, glazed doughnuts and went public in 2000, becoming a national craze along the way, now faces a number of government investigations of its accounting and practices.

The company said earlier this year it would restate some past numbers, and it replaced former CEO Scott Livengood with interim chief and turnaround specialist Stephen Cooper.

Shares of Krispy Kreme were gaining 33 cents, or 4.6%, to $7.54.