[FORM OF]
KRISPY KREME DOUGHNUTS, INC.
2012 STOCK INCENTIVE PLAN
DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT

     THIS NONQUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) is made as of
[_____] (the “Grant Date”), by and between Krispy Kreme Doughnuts, Inc., a North
Carolina corporation (the “Company”), and [_____], a member of the Board of
Directors of the Company (the “Participant”).

W I T N E S S E T H:

     WHEREAS, the Board of Directors and shareholders of the Company have
approved the Krispy Kreme Doughnuts, Inc. 2012 Stock Incentive Plan, as it may
be amended (the “Plan”), for the purposes and subject to the provisions set
forth in the Plan; and

     WHEREAS, pursuant to authority granted to it in the Plan, the Compensation
Committee of the Board of Directors of the Company (the “Committee”) has, on
behalf of the Company, granted to the Participant a nonqualified stock option to
purchase shares of Common Stock of the Company as set forth below; and

     WHEREAS, this Agreement evidences the grant of such option pursuant to the
Plan.

     NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
set forth below and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:

1. Summary of Grant

Number of Shares: [_____]
Option Price: [$_____]
Date of Grant: [_____]
Expiration Date: [_____]

2. Grant of Option

     This Agreement sets forth the terms of a nonqualified option (the “Option”)
granted to the Participant to purchase from the Company, during the period
specified in Sections 3 and 4 of this Agreement, a total of [_____] shares of
Common Stock (the “Shares”), at the purchase price of [_____] per share (the
“Option Price”), in accordance with the terms and conditions stated in this
Agreement.

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3. Vesting and Exercise of Option

     (a) The Option shall vest and 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 a Director on each such vesting date:

          (i) no portion of the Option shall vest or become exercisable prior to
the date that is three months after the Grant Date;

          (ii) the Option 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 total of 50%
of the 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 number of Shares subject to the Option) on the date that is the first
anniversary of the Grant Date.

     (b) Notwithstanding the vesting provisions described above, the 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, the following provisions shall 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.

          (ii) Further, in the event that the Option is substituted, assumed or
continued, the Option will become vested and 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 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 is accelerated as a result of a
termination of service related to a 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 is vested and
exercisable on or prior to the last day specified in such notice, and, to the
extent the Option is not exercised, it shall (unless the Committee or the Board
of Directors determines otherwise) terminate at 5:00 P.M., Winston-Salem, North
Carolina time, on the last day specified in such notice. If no such notice is
given, the Option shall terminate as provided in Section 4(d) herein.

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     (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 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 at
any time and from time to time to purchase up to the number of Shares as to
which it is then vested and exercisable.

4. Termination of Option

     Unless adjusted by the Committee in its sole discretion, the Option shall
remain exercisable as specified in Section 3 above until 5:00 p.m.,
Winston-Salem, North Carolina time, on the earliest to occur of the dates
specified below, upon which date the Option shall terminate:

     (a) the date all of the Shares are purchased pursuant to the terms of this
Agreement;

     (b) upon the expiration of three years following the Participant’s
termination of service as a Director for any reason other than for Cause;

     (c) immediately upon the Participant’s termination of service as a Director
for Cause;

     (d) on the last date specified in the notice described in Section 3(c)
above in the event that the Participant ceases to serve as a Director (or
director of the surviving entity) within six months before or one year after the
effective date of a Change in Control upon such terms and conditions as are
provided in Section 3(c) herein; provided that, if no such notice is given, the
Option shall terminate on the one year anniversary of the date of the
Participant’s termination of service; or

     (e) on the ten year anniversary of the Grant Date (the “Expiration Date”).

     Notwithstanding the foregoing, the term of the Option shall (unless the
Committee determines otherwise) automatically be extended if exercise at the end
of the original term would violate Applicable Law (including but not limited to
the Company’s Securities Trading Policy), but such extension may not exceed 30
days from the expiration of the period during which exercise is prohibited, and
any such extension must be in accordance with Reg. Section.
1.409A-1(b)(5)(v)(C)(1). Upon its termination, the Option shall have no further
force or effect and the Participant shall have no further rights under the
Option or to any Shares which have not been purchased pursuant to the prior
exercise of the Option.

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5. Manner of Exercise of Option

     (a) Exercise. The Option may be exercised only by (i) the Participant’s
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised, (ii) the
payment to the Company, pursuant to the terms of this Agreement, of an amount
equal to the Option Price multiplied by the number of Shares being purchased as
specified in the Participant’s notice of exercise (the “Purchase Price”). The
Participant’s notice of exercise shall be given in the manner specified in
Section 10 but any exercise of the Option shall be effective only when the items
required by the preceding sentence are actually received by the Company. The
notice of exercise shall be in the form attached to this Agreement or in another
form provided by the Company. Notwithstanding anything to the contrary in this
Agreement, the Option may be exercised only if compliance with Applicable Law
can be effected, with the Committee being the final arbitrator thereof, in its
sole and absolute discretion, in the event of any dispute between the Company
and the Participant with regard to the interpretation of such laws.

     (b) Form of Payment. Payment of the Purchase Price may be made by (i) cash
or cash equivalent; (ii) authorizing a third party to sell a portion of the
Shares acquired upon exercise of the Option and remit to the Company a
sufficient portion of the sales proceeds to pay the full Purchase Price (that
is, a broker-assisted cashless exercise); (iii) unless prohibited by the
Committee, by tendering previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the Option Price or portion
thereof, (iv) unless prohibited by the Committee, by withholding Shares subject
to the Option having an aggregate Fair Market Value at the time of exercise
equal to the Option Price or portion thereof, or (v) combining the above
methods.

     (c) Issuance and Delivery of Shares. As soon as practicable following
receipt of such notice of exercise and payment, the Company shall notify the
Participant of any payment required under subsection (d) below. The Company
shall deliver a certificate or certificates for the Shares to the Participant
(or provide other evidence of ownership of the Shares, such as tracking through
book entry) as soon as practicable after the Participant has made any payment
required under subsection (d) below. Shares issued pursuant to the exercise of
the Option will be issued only in the name of the Participant and may not be
transferred into the name of any agent of or nominee for the Participant until
such time as the Participant has complied with the terms of this Agreement.

     (d) Taxes and Withholding.

          (i) The Participant shall be responsible for all federal, state,
local, and foreign income taxes payable with respect to the Option and the
exercise thereof. The Participant acknowledges that he or she may incur
substantial tax liability arising out of the exercise of the Option and that the
Company has no responsibility to take or refrain from taking any actions in
order to achieve a certain tax result for the Participant.

          (ii) The Company shall have the power and right to deduct or withhold,
or require the Participant to remit to the Company in cash, an amount sufficient
to satisfy federal, state, local, and foreign taxes (including but not limited
to the Participant’s FICA obligation), if any, required by law to be withheld
with respect to any taxable event arising in connection with the Option. In lieu
of the payment specified in this paragraph, the Participant may satisfy the
obligation, in whole or in part, by the methods specified in subsection (b)(i)
and (ii) above. In addition, unless the Committee determines otherwise and
subject to such conditions as may be established by the Committee, the
Participant may elect to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares with a Fair Market Value equal to
(but not in excess of) the minimum statutory tax required to be withheld. The
right to satisfy this obligation by cashless exercise or the withholding of
Shares may be withdrawn by the approval of the Committee.

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     (e) Delay In Issuance of Shares. Anything in this Agreement to the contrary
notwithstanding, if, at any time specified herein for the issuance of Shares to
the Participant, any law, or any regulation or requirement of the Securities and
Exchange Commission or other governmental authority having jurisdiction over
such matter, shall require either the Company or the Participant to take any
action in connection with the Shares then to be issued, the issuance of such
Shares shall be deferred until such action shall have been taken; the Company
shall be under no obligation to take such action; and the Company shall have no
liability whatsoever as a result of the non-issuance of such Shares, except to
refund to the Participant any consideration tendered in respect of the Purchase
Price.

     (f) Stop Transfer Instructions. The Company may impose stop-transfer
instructions with respect to any Shares (or other securities) subject to any
restriction set forth in this Agreement until the restriction has been satisfied
or terminates.

6. Nontransferability

     The Option shall not be transferable (including by sale, assignment,
pledge, or hypothecation) other than by will or the laws of intestate
succession, except for transfers without consideration if and to the extent
permitted by the Committee in a manner consistent with the registration
provisions of the Securities Act. Except as may be permitted by the preceding
sentence, the Option shall be exercisable during the Participant’s lifetime only
by the Participant or by his or her guardian or legal representative. The
designation of a beneficiary in accordance with the Plan does not constitute a
transfer.

7. No Rights as a Shareholder

     The Participant shall not have any rights as a shareholder with respect to
the Shares subject to his or her Option until the issuance of such Shares to the
Participant pursuant to the exercise of the Option.

8. No Right to Service or Future Grants; Compliance with Applicable Law

     (a) Nothing in this Agreement shall be construed as constituting a
commitment, guarantee, agreement, or understanding of any kind or nature that
the Company shall continue the services of the Participant as a Director nor
shall this Agreement affect in any way the right of the Company’s shareholders
to terminate the services of the Participant at any time and for any reason. The
Participant acknowledges and agrees that the award and acceptance of the Option
pursuant to this Agreement does not entitle the Participant to future grants
under the Plan or any other plan.

     (b) The Company may impose such restrictions on the Option, the Shares, and
any other benefits underlying the Option hereunder as it may deem advisable,
including, without limitation, restrictions under the federal securities laws,
the requirements of any securities exchange or similar organization, and any
blue sky, state, or foreign securities laws applicable to such securities. The
Company shall not be obligated to issue, deliver, or transfer Shares, make any
other distribution of benefits under the Plan, or take any other action, unless
such delivery, distribution, or action is in compliance with Applicable Law
(including but not limited to the requirements of the Securities Act). The
Company will be under no obligation to register Shares or other securities with
the Securities and Exchange Commission or to effect compliance with the
exemption, registration, qualification, or listing requirements of any state or
foreign securities laws, or securities exchange or similar organization, and the
Company will have no liability for any inability or failure to do so. The
Company may cause a restrictive legend or legends to be placed on any
certificate issued pursuant to the Option hereunder in such form as may be
prescribed from time to time by Applicable Law or as may be advised by legal
counsel.

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9. Successors and Assigns

     (a) This Agreement shall be binding upon and inure to the benefit of any
assignee or successor in interest to the Company, whether by merger,
consolidation, or the sale of all or substantially all of the Company’s assets.

     (b) This Agreement shall be binding upon and inure to the benefit of the
Participant and his or her legal representative and any person to whom the
Option may be transferred by will, the applicable laws of intestate succession,
or otherwise in accordance with the terms of the Plan.

10. Notices

     Any and all notices under this Agreement shall be in writing, and sent by
hand delivery or by certified or registered mail (return receipt requested and
first-class postage prepaid), in the case of the Company, to its principal
executive offices to the attention of the Chief Financial Officer, and, in the
case of the Participant, to the Participant’s address as shown on the Company’s
records.

11. Entire Agreement

     The parties hereto agree that this Agreement sets forth all of the
promises, agreements, conditions, understandings, warranties, and
representations between the parties with respect to the Option and the Shares
and that there are no promises, agreements, conditions, understandings,
warranties, or representations, oral or written, express or implied between the
parties with respect to the Option and the Shares other than as set forth in
this Agreement and in the Plan.

12. Amendment of Agreement

     This Agreement may be modified, amended, suspended, or terminated, and any
terms or conditions may be waived, but only by a written instrument executed by
the parties hereto and otherwise in accordance with the Plan. Notwithstanding
the foregoing, the Committee shall have unilateral authority to amend the
Agreement (without the Participant’s consent) to the extent necessary to comply
with Applicable Law or changes to Applicable Law (including but in no way
limited to Code Section 409A and federal securities laws).

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13. Severability

     The provisions of this Agreement are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable, in whole or
in part, the remaining provisions, and any partially unenforceable provision to
the extent enforceable in any jurisdiction, shall nevertheless be binding and
enforceable.

14. Waiver

     The waiver by the Company of a breach of any provision of this Agreement by
the Participant shall not operate or be construed as a waiver of any subsequent
breach by the Participant.

15. Plan Controls

     This Agreement and the Option are subject in all respects to the terms and
conditions of the Plan (which are incorporated herein by reference), and the
Participant agrees to be bound by the terms and conditions of the Plan. Except
as otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the same definitions as set forth in the Plan. To the
extent that any conflict may exist between any term or provision of this
Agreement and any term or provision of the Plan, such term or provision of the
Plan shall control, unless the Committee determines otherwise.

16. Agreement to be Bound by Plan

     The Participant acknowledges that the Participant fully understands his or
her rights under the Plan, and that the Participant agrees to be bound by all
terms and conditions of the Plan. The Participant acknowledges that the
Participant has received a copy of the Plan prospectus.

17. Authority of Committee

     All determinations made by the Committee with respect to the
interpretation, construction, and application of any provision of this Agreement
shall be final, conclusive, and binding on the parties.

18. Covenants and Representations of the Participant

     The Participant represents, warrants, covenants, and agrees with the
Company as follows:

     (a) The Participant has not relied upon the Company with respect to any tax
consequences related to the Option or the Shares. The Participant assumes full
responsibility for all such consequences and the filing of all tax returns and
elections the Participant may be required or find desirable to file in
connection therewith.

     (b) The Participant will not distribute or resell any Shares (or other
securities) issuable upon exercise of the Option granted hereby in violation of
Applicable Law. The Participant shall comply with all provisions of the
Company’s Securities Trading Policy, as in effect from time to time.

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     (c) The agreements, representations, warranties, and covenants made by the
Participant herein with respect to the Option shall also extend and apply to all
of the Shares issued to the Participant from time to time pursuant to exercise
of the Option. Acceptance by the Participant of any certificate representing the
Shares (or other evidence of beneficial ownership) shall constitute a
confirmation by the Participant that all such agreements, representations,
warranties, and covenants made herein continue to be true and correct at that
time.

     (d) As a condition to receiving this award, the Participant agrees to abide
by the Company’s Equity Retention Policy, Compensation Recovery Policy, and
Stock Ownership Guidelines and/or other similar policies, each as in effect from
time to time and to the extent applicable to the Participant from time to time.
In addition, the Participant shall be subject to such compensation recovery,
recoupment, forfeiture, or other similar provisions as may apply to the
Participant under Applicable Law.

19. Limitation of Liability

     The liability of the Company under this Agreement and in the award of the
Option hereunder is limited to the obligations set forth herein with respect to
such award, and nothing herein contained shall be interpreted as imposing any
liability in favor of the Participant or any others with respect to any loss,
cost, or expense which the Participant or any others may incur in connection
with or arising out of any transaction involving the Option or the Shares.

20. Governing Law

     This Agreement shall be governed by, construed and enforced in accordance
with the laws of the State of North Carolina, without giving effect to the
principles of conflicts of laws, and in accordance with applicable federal laws.

 

[Signature Page to Follow]

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     IN WITNESS WHEREOF, the Company and the Participant have executed this
Agreement hereto as of the day and year first above written.

KRISPY KREME DOUGHNUTS, INC.     By:   Title:  

    PARTICIPANT     Signature: Printed Name:

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STOCK OPTION EXERCISE FORM

This form must be completed and returned to Krispy Kreme’s Chief Financial
Officer on or before 1:00 p.m. Eastern Standard Time on date of exercise.

SECTION I         NAME (please print): SOCIAL SECURITY NO.:   HOME ADDRESS: WORK
ADDRESS:     HOME TELEPHONE: WORK TELEPHONE:

SECTION II: I wish to exercise the following options:

A B C D NUMBER OF EXERCISE TOTAL PURCHASE PRICE: GRANT DATE OPTIONS PRICE
(COLUMN B x COLUMN C)             TOTAL

SECTION III       SECTION IV I elect to pay for my shares (check one): I elect
to pay my taxes on this transaction (check one):   o  Broker assisted Cashless
Exercise o  Sell shares to cover taxes (Broker assisted   Cashless Exercise)   o
Cash Purchase by Check (payable to   o Check (payable to Krispy Kreme Doughnuts,
Inc.) Krispy Kreme Doughnuts, Inc.)   o Share withholding o Share delivery   o
Share withholding

  Signature                   Date of Exercise

Return       KRISPY KREME DOUGHNUTS, INC. form to ATTN: Chief Financial Officer
  370 Knollwood Street Winston-Salem, NC 27103 Phone: 336-725-2981

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