Exhibit 10.20
 
KRISPY KREME DOUGHNUT CORPORATION
NONQUALIFIED DEFERRED COMPENSATION PLAN
 
EFFECTIVE OCTOBER 1, 2000

 

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TABLE OF CONTENTS

                      Page  
ARTICLE 1
  PURPOSE; EFFECTIVE DATE     1  
ARTICLE 2
  DEFINITIONS     1  
2.1
  “Account”     1  
2.2
  “Beneficiary”     1  
2.3
  “Board”     1  
2.4
  “Change in Control”     1  
2.5
  “Code”     2  
2.6
  “Committee”     2  
2.7
  “Company”     2  
2.8
  “Compensation”     2  
2.9
  “Compensation Payment Date”     2  
2.10
  “Deferral Contributions”     2  
2.11
  “Deferral Period”     2  
2.12
  “Determination Date”     2  
2.13
  “Disability (or Disabled)”     2  
2.14
  “Distribution Election”     2  
2.15
  “Earnings”     2  
2.16
  “Effective Date”     2  
2.17
  “Employee”     2  
2.18
  “ERISA”     2  
2.19
  “Executive Officer”     2  
2.20
  “Investment Index”     3  
2.21
  “Krispy Kreme Stock Index”     3  
2.22
  “Participant”     3  
2.23
  “Participation Election”     3  
2.24
  “Plan”     3  
2.25
  “Plan Year”     3  
2.26
  “Retirement Savings Plan”     3  
2.27
  “Subsidiary”     3  
2.28
  “Termination”     3  
2.29
  “Year of Service”     3  
ARTICLE 3
  PARTICIPATION AND DEFERRALS     3  
3.1
  Eligibility and Participation     3  
ARTICLE 4
  DEFERRAL CONTRIBUTIONS     3  
4.1
  Participation Regarding Deferral Contributions     4  
4.2
  Withholding of Deferral Contributions     4  
4.3
  Form of Deferral     4  
4.4
  Limitations on Deferrals     4  
4.5
  Termination of Employment     4  
4.6
  Continuation of Deferral Amount     5  

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                      Page  
4.7
  Timing of Credits; Tax and Other Withholding     5  
ARTICLE 5
  ACCOUNTS     5  
5.1
  Account     5  
5.2
  Determination of Accounts     5  
5.3
  Selection of Investment Index (Indices)     5  
5.4
  Vesting of Accounts     6  
5.5
  Statement of Accounts     6  
ARTICLE 6
  BENEFIT PAYMENTS     6  
6.1
  Time of Benefit Payments     6  
6.2
  Manner of Benefit Payments     6  
6.3
  Hardship Distribution     6  
6.4
  Withholding; Payroll Taxes     7  
6.5
  Code § 162(m) Restriction     7  
6.6
  Payment to Guardian     7  
ARTICLE 7
  BENEFICIARY DESIGNATION        
7.1
  Beneficiary Designation     7  
ARTICLE 8
  ADMINISTRATION     7  
8.1
  Committee     8  
ARTICLE 9
  AMENDMENT AND TERMINATION OF PLAN     8  
9.1
  Amendment     8  
9.2
  Company’s Right to Terminate     8  
ARTICLE 10
  MISCELLANEOUS     9  
10.1
  Unfunded Plan     9  
10.2
  Unsecured General Creditor     9  
10.3
  Trust Fund     9  
10.4
  Nonassignability     9  
10.5
  Not a Contract of Employment     9  
10.6
  Governing Law     9  
10.7
  Validity     10  
10.8
  Successors     10  
10.9
  Captions     10  
10.10
  Arbitration of Disputes     10  
10.11
  Unclaimed Benefit     10  
10.12
  Discharge of Obligations     10  
10.13
  Limitations on Liability     10  
10.14
  Entire Agreement     10  

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KRISPY KREME DOUGHNUT CORPORATION
NONQUALIFIED DEFERRED COMPENSATION PLAN
ARTICLE 1
PURPOSE; EFFECTIVE DATE
     The purpose of this Nonqualified Deferred Compensation Plan is to enable
the Company’s executives to have the same opportunity to defer compensation as
is available to other employees of the Company under the Retirement Savings
Plan. It is intended that the Plan will aid in attracting and retaining
employees of exceptional ability by providing them with these benefits. The Plan
is a nonqualified deferred compensation plan intended to be an unfunded plan as
described in Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement
Income Security Act of 1974. The Plan shall be effective as of October 1, 2000.
ARTICLE 2
DEFINITIONS
     Whenever used in this document, the following terms shall have the meanings
set forth in this Article unless a contrary or different meaning is expressly
provided:
     2.1 “Account” means the separate account established and maintained for
each Participant which represents his or her interest in the Plan as of any
date, as adjusted for Deferral Contributions, Earnings, distributions, and other
factors that may affect the value of such Account.
     2.2 “Beneficiary” means the person, persons or entity entitled under
Section 7 to receive any Plan benefits payable after a Participant’s death.
     2.3 “Board” means the Board of Directors of the Company.
     2.4 “Change in Control” means the date on which the earlier of the
following Events occurs:
     (a) The acquisition 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,
of more than 30% of the outstanding capital stock of the Company entitled to
vote for the election of directors (“Voting Stock”);
     (b) The merger or consolidation of the Company with one or more
corporations as a result of which the holders of the outstanding Voting Stock of
the Company immediately prior to such a merger or consolidation hold less than
60% of the Voting Stock of the surviving or resulting corporation;
     (c) The transfer of substantially all of the property of the Company other
than to an entity of which the Company owns at least 80% of the Voting Stock; or
     (d) The election to the Board of Directors of the Company of three
directors without the recommendation or approval of the incumbent Board of
Directors of the Company.

 

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     2.5 “Code” means the Internal Revenue Code of 1986, as amended, or any
other provision of law of similar purpose as may at any time be substituted
therefor.
     2.6 “Committee” means the Compensation Committee of the Board or its
designee, pursuant to Section 8.
     2.7 “Company” means Krispy Kreme Doughnut Corporation, a North Carolina
corporation, and any successor thereto which assumes its obligations under this
Plan.
     2.8 “Compensation” means, with respect to a Participant for the period
specified, base salary, plus bonuses paid to the Participant under the Company’s
incentive plans. The amount considered “Compensation” specifically includes any
amounts that would be paid to the Participant, but for a compensation reduction
agreement pursuant to Code Sections 125 or the Retirement Savings Plan.
     2.9 “Compensation Payment Date” means, with respect to a Plan Year and a
Participant, each date during that Plan Year on which Compensation is paid to
that Participant (or would be paid to the Participant, but for an election
pursuant to a Participation Election to have the Compensation otherwise payable
on that date reduced). For example, each date on which a regular payroll check
for a payroll period is given to a Participant is a Compensation Payment Date.
     2.10 “Deferral Contributions” means the compensation deferred by
Participants and allocated to Participants’ Deferral Contributions Account,
pursuant to Section 4.7.
     2.11 “Deferral Period” means the 12 month period ending each December 31;
provided, however, the first “Deferral Period” shall be the shorter period
beginning October 1, 2000, and ending December 31, 2000.
     2.12 “Determination Date” means the last business day of each month.
     2.13 “Disability (or Disabled)” means a disability as determined under the
Company’s long-term disability plan.
     2.14 “Distribution Election” means the election by a Participant regarding
the manner in which his Account will be distributed to him.
     2.15 “Earnings” for each Account means the rate of growth credited or
debited to the Account on each Determination Date in a Plan Year, which shall be
credited or debited at the rates described in the definition of Investment Index
in Section 2.20.
     2.16 “Effective Date” means October 1, 2000.
     2.17 “Employee” means a person classified by the Company as an employee of
the Company or its Subsidiaries, regardless of the person’s classification by
any federal, state or local government, or any of their agencies.
     2.18 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time or any successor statute.
     2.19 “Executive Officer” means an individual named as an executive officer
in the Company’s most recent proxy statement, any individuals assuming such
status since the most recent proxy statement, the Company’s principal financial
officer and the Company’s principal accounting officer.

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     2.20 “Investment Index” means each index selected by a Participant to be
used as an earnings index pursuant to Section 5. The Investment Indices
available to Participants shall be listed in Appendix A. The Committee may
select different Indices from time to time.
     2.21 “Krispy Kreme Stock Index” means the unitized Investment Index based
on the current value of a share of Krispy Kreme Doughnuts, Inc. common stock.
Current value means the closing price, as reported in The Wall Street Journal or
other reliable public source, for that day. If dividends are declared additional
stock units representing dividend shares shall be credited, as if the stock
units were actually shares of Krispy Kreme common stock.
     2.22 “Participant” means a person for whom an Account is maintained.
     2.23 “Participation Election” means the election submitted by a Participant
to the Committee prior to the beginning of a Deferral Period, subject to
Section 3.1(c), specifying the amount of Deferral Contributions for such
Deferral Period. Such election may be submitted in any form permitted by the
Committee, including, but not limited to, submission through an interactive
voice response system, the Internet, electronic mail, or writing.
     2.24 “Plan” means this Nonqualified Deferred Compensation Plan, as amended
from time to time.
     2.25 “Plan Year” means the 12 month period ending each December 31;
provided that the first Plan Year shall run from October 1, 2000, through
December 31, 2000.
     2.26 “Retirement Savings Plan” means the Retirement Savings Plan of Krispy
Kreme Doughnut Corporation, and any successor plan, as it may be amended from
time to time.
     2.27 “Subsidiary” means a subsidiary of the Company, of which the Company
beneficially owns, directly or indirectly, more than 50% of the aggregate voting
power of all outstanding classes and series of stock.
     2.28 “Termination” means leaving employment with the Company prior to
attaining age 65.
     2.29 “Year of Service” means a 12 consecutive month period during which an
Employee is credited with at least 1,000 “hours of service” (as defined in the
KSOP) with the Employer or any related entity. The first Year of Service shall
be measured from the Employee’s date of hire; thereafter Years of Service shall
be calculated based on the Plan Year.
ARTICLE 3
PARTICIPATION AND DEFERRALS
     3.1 Eligibility and Participation.
     (a) Eligibility. Eligibility to participate in the Plan shall be limited to
those Employees who are selected by the Committee and who are management or
highly compensated employees.
     (b) Effective Date of Participation. An eligible Employee shall become a
Participant as of the first day of the month following his completion of a Year
of Service.

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     (c) Part-Year Participation. Employees who become newly eligible to
participate in the Plan may begin their participation in the Plan as of a date
or dates determined under rules to be established by the Committee. A
Participation Election must be submitted to the Committee no later than
prescribed by the Committee. If no Participation Election is submitted prior to
such day, the Employee shall next be eligible to participate beginning January
1st of the next following calendar year.
     (d) Change in Employment Status. If a Participant is no longer a member of
the eligible group of Employees, any current Participation Election shall be
continued to the end of the Deferral Period but no new Participation Election
may be made by such Participant. All account balances shall remain in the Plan
until they are distributed under the terms of Section 6.
ARTICLE 4
DEFERRAL CONTRIBUTIONS
     4.1 Participation Regarding Deferral Contributions. Participants may elect
to make Deferral Contributions with respect to any Deferral Period by submitting
a Participation Election to the Committee by the date selected by the Committee,
which date shall precede the beginning of the Deferral Period. A Participant may
make separate Deferral Elections for base salary and for bonus compensation.
     4.2 Withholding of Deferral Contributions. For each Plan Year, the
Participant’s Deferral Contributions shall be withheld each Compensation Payment
Date in the percentage amount elected in the Participant’s Participation
Election for that Plan Year.
     4.3 Form of Deferral. A Participant may elect a deferral in the
Participation Election as follows:
     (a) A deferral shall be a portion of the Compensation payable by the
Company to the Participant during the Deferral Period.
     (b) The amount(s) to be deferred shall be stated as a percentage, not to
exceed the maximums and not to be less than the minimums described in
Section 4.4.
     4.4 Limitations on Deferrals. The following limitations shall apply to
deferrals:
     (a) Maximum. The Committee shall establish the maximum percentage of
Compensation or the maximum percentages of different types of Compensation that
may be deferred for each Plan Year prior to the beginning of such Plan Year.
     (b) Minimum. The minimum percentage of Compensation (excluding amounts
payable under this Plan) that may be deferred shall be one percent (1%) of base
salary; provided, however, that there shall be no minimum for any deferral of a
distribution from the Retirement Savings Plan.
     (c) Changes in Minimum or Maximum. The Committee may change the minimum or
maximum deferral amounts from time to time by giving written notice to all
Participants. No such change may affect the amount specified in a Participation
Election made prior to the Committee’s action.
     4.5 Termination of Employment. If a Participant terminates employment with
the Company prior to the end of the Deferral Period, the Deferral Period shall
end at the date of termination.

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     4.6 Continuation of Deferral Amount. Once a Participant has submitted a
Participation Election, the elected deferral amount shall remain in effect for
the applicable Deferral Period. The election shall be irrevocable except as
provided in Section 6.3, relating to accelerated distribution.
     4.7 Timing of Credits; Tax and Other Withholding. A Participant’s Deferral
Contributions shall be credited to the Deferral Contributions Account in
accordance with rules established by the Committee and by such deadlines as the
Committee shall establish, in its discretion. Any withholding of taxes or other
amounts, including FICA and Medicare taxes, with respect to Deferral
Contributions that is required by state, federal or local law shall be withheld
from the Participant’s corresponding nondeferred Compensation.
ARTICLE 5
ACCOUNTS
     5.1 Account. For record-keeping purposes only, a Participant’s Deferral
Contributions and Earnings shall be credited to the Participant’s Account. The
Accounts shall be bookkeeping devices utilized for the sole purpose of
determining the benefits payable under the Plan and shall not constitute a
separate fund of assets.
     5.2 Determination of Accounts. Each Participant’s Account as of each
Determination Date shall consist of the balance of the Account as of the
immediately preceding Determination Date, adjusted as follows:
     (a) Deferral Contributions. The Deferral Contributions Account shall be
increased by any Deferral Contributions credited since such Determination Date.
     (b) Distributions. The Account shall be reduced by any benefits distributed
to the Participant since such Determination Date.
     (c) Earnings. The Account shall be increased or decreased by the Earnings
credited on the average daily balance in the Account since such Determination
Date.
     5.3 Selection of Investment Index (Indices).
          (a) Initial Selection. At the time a Participant first elects a
deferral under Section 4.3, the Participant shall also select the Investment
Index or Indices in which the Participant wishes to have the amount of Deferral
Contributions deemed invested. The Participant may select any combination of one
or more of the Investment Indices in one percent (1%) increments, or as further
limited by the Committee. The Participant may elect a different Index or set of
Indices as permitted by the Committee.
          If the initial selection of Investment Indices includes the Krispy
Kreme Stock Index, such selection must comply with the “Statement of Company
Policy — Trades By Company’s Personnel of the Company’s Securities.” In
addition, a Participant who is deemed to be an Executive Officer may only elect
to have his Account deemed invested in the Krispy Kreme Stock Fund Index if such
election is made during a period of time established by the Committee. Such
election of investment in the Krispy Kreme Stock Fund Index shall be effective
at the beginning of the next Plan Year (January 1).
          (b) Subsequent Selections. After a Participant has made an initial
investment election pursuant to Section 5.3(a), the Participant may thereafter
revise his investment election daily; provided, however, that investment
election changes that affect the portion of the Participant’s Account allocated
to the Krispy Kreme Stock Fund Index may only be made during the window
period(s) of each Plan

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Year established by the Committee. Any such election shall be effective at the
beginning of the next Plan Year (January 1).
     5.4 Vesting of Accounts. Each Participant shall be one hundred percent
(100%) vested at all times in the amounts credited to such Participant’s
Account.
     5.5 Statement of Accounts. The Committee shall give to each Participant a
statement showing the balances in the Participant’s Account on a quarterly basis
and at such other times as may be determined by the Committee.
ARTICLE 6
BENEFIT PAYMENTS
     6.1 Time of Benefit Payments. Participant terminates employment with the
Company for any reason, including death or Disability, the Company shall pay to
the Participant (or the Participant’s Beneficiary, in case of death) benefits
equal to the vested portion of the Participant’s Account on the Determination
Date next following the Participant’s termination date.
     6.2 Manner of Benefit Payments. The Participant’s Account shall be paid as
elected in his Distribution Election or as elected pursuant to subsection
(c) below. If the Participant fails to complete a Distribution Election, his
Account shall be paid in the form of a lump sum distribution. The alternative
forms of benefit payment are:
     (a) A lump-sum distribution which is equal to the Account balance.
     (b) Quarterly installments of the Account balance amortized over a period
of up to ten years. Earnings on the unpaid balance shall continue to be credited
to Accounts at the appropriate Investment Index rate. The Account balance shall
be reamortized each year, so that the amount of each installment payment will
depend on the Earnings credited or debited to the Account during the prior year.
     (c) Small Amounts. Notwithstanding the form elected, if the Participant’s
total Account has a value of fifty thousand dollars ($50,000) or less on the
applicable Determination Date, the Company may, in its sole discretion, pay such
benefit in a lump sum.
     (d) Change in Form of Benefits. A Participant may elect to change the form
of benefit payment at any time up to 12 months before the date benefit payments
commence. Any changes made to the form of benefit payment within 12 months of
the date benefit payments commence will not be valid.
     6.3 Hardship Distribution. Notwithstanding any other provision of the Plan,
a Participant shall be entitled to receive, upon written request to the
Committee, a partial or complete distribution of his Account, subject to the
following:
     (a) Penalty. Ten percent (10%) of the requested distribution amount shall
be forfeited and ninety percent (90%) of the requested distribution amount shall
be paid to the Participant.
     (b) Suspension of Participation. A Participant who receives a distribution
under this Section will be prohibited from deferring for the rest of the current
calendar year and for the immediately succeeding calendar year.

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     (c) Payment. The Account balance shall be as of the Determination Date
immediately preceding the date on which the Committee receives the written
request. The Committee shall pay the amount payable under this Section in a lump
sum within 30 days following the receipt of the Participant’s written request.
     (d) Restrictions on Timing of Accelerated Distribution Election. If any
portion of the Participant’s Account is measured by the Krispy Kreme Stock
Index, an election by any Participant to receive an accelerated distribution
pursuant to this Section must be made in conformity with the “Statement of
Company Policy — Trades By Company’s Personnel of the Company’s Securities.” In
addition, a Participant who is deemed to be an Executive Officer and who makes
such a request must do so no earlier than six months after the Participant has
made an election under Section 5.3 to have some or all of his Account measured
by the Krispy Kreme Stock Index.
     6.4 Withholding; Payroll Taxes. The Company shall withhold from payments
hereunder any taxes required to be withheld from such payments under federal,
state or local law. A Beneficiary, however, may elect not to have withholding of
federal income tax pursuant to Section 3405 of the Internal Revenue Code, or any
successor provision thereto.
     6.5 Code § 162(m) Restriction. Notwithstanding any other provision of this
Plan except hardship withdrawals under Section 6.3, if any portion of a payment
in a calendar year would be disallowed as a deduction to the Company because the
Participant is an employee for that calendar year subject to Section 162(m) (the
$1,000,000 limitation on compensation deduction) of the Code, or any successor
provision to such Section, that portion shall instead be paid in the first
following calendar year during which the Participant is not subject to Section
162(m) of the Code or any successor provision, by February 28th of such year.
     6.6 Payment to Guardian. If a distribution is payable to a minor or a
person declared incompetent or to a person incapable of handling the disposition
of property, the Committee may direct payment to the guardian, legal
representative, or person having the care and custody of such minor,
incompetent, or person. The Committee may require proof of incompetency,
minority, incapacity or guardianship, as it may deem appropriate prior to
distribution. The Company may withhold payment under the Plan upon a dispute as
to the proper payee(s) or in any other situation in which the proper payee(s)
may be in question, until the proper payee(s) are finally determined in a court
of law. Distribution of any benefit under the Plan shall completely discharge
the Committee from all liability with respect to such benefit.
ARTICLE 7
BENEFICIARY DESIGNATION
     7.1 Beneficiary Designation. Each Participant shall have the right, at any
time, to designate one or more persons or an entity as Beneficiary (both primary
as well as secondary) to whom benefits under this Plan shall be paid in the
event of a Participant’s death prior to complete distribution of the
Participant’s Account. In the event that no separate Beneficiary designation is
made under this Plan, the Participant’s Beneficiary designation made under the
Retirement Savings Plan shall determine to whom benefits under this Plan shall
be paid in the event of a Participant’s death. If no election is made under
either Plan, then the default provisions of the Retirement Savings Plan shall
determine the payment of benefits.

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ARTICLE 8
ADMINISTRATION
     8.1 Committee.
          (a) The Committee shall administer this Plan.
          (b) The Committee shall be the Compensation Committee of the Board or
such of er committee as may be appointed by the Compensation Committee.
          (c) The Committee shall have the authority to make, amend, interpret,
and enforce all appropriate rules and regulations for the administration of this
Plan and to decide or resolve any and all questions including interpretations of
this Plan, in its sole discretion, as may arise in connection with the Plan.
ARTICLE 9
AMENDMENT AND TERMINATION OF PLAN
     9.1 Amendment.
          (a) The Board may, at any time, amend the Plan in whole or in part by
written instrument, provided that no amendment shall reduce the amount credited
to any Account maintained under the Plan as of the date of the amendment. Any
change in the manner that Earnings are credited to Accounts shall not become
effective before the first day of the Plan Year that follows the adoption of the
amendment, provided, however, that the selection of Investment Indices by the
Committee may be changed at any time as long as Participants are given the
opportunity to change their selection of Investment Indices prior to the time
the Indices are changed.
          (b) Generally, the Company shall amend the Plan by action of the
Board. However, the Committee may approve amendments to the Plan, without prior
approval or subsequent ratification by the Board, if the amendment: (i) does not
significantly change the benefits provided under the Plan (except as required by
a change in applicable law); (ii) does not significantly increase the costs of
the Plan; and (iii) the amendment is intended either to enable the Plan to
remain in compliance with the requirements of the Code, ERISA, or other
applicable law, to facilitate administration of the Plan, or to improve the
operation of the Plan. A duly authorized officer of the Company shall execute
the amendment, evidencing the Company’s adoption of the amendment.
     9.2 Company’s Right to Terminate. The Board may, at any time, partially or
completely, terminate the Plan.
          (a) Partial Termination. The Board may partially terminate the Plan by
instructing the Committee not to accept any additional contributions to the
Plan. If such a partial termination occurs, the Plan shall continue to operate
and be effective with regard to contributions made prior to the effective date
of such partial termination.
          (b) Complete Termination. The Board may completely terminate the Plan
by instructing the Committee not to accept any additional contributions to the
Plan, and by distributing all Accounts under the Plan. If such a complete
termination occurs, the Plan shall cease to operate and the Company shall pay
out to each Participant the balance in his Account. If termination of the Plan
occurs after a Change of Control, payment shall be made in a lump sum; otherwise
payment shall be made in a

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lump sum, unless the Committee determines otherwise. Earnings at an interest
rate determined by the Board shall be credited on any unpaid balance in each
Account.
ARTICLE 10
MISCELLANEOUS
     10.1 Unfunded Plan. This Plan is an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of “management or
highly compensated employees” within the meaning of Sections 201, 301 and 401 of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and
therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA.
Accordingly, the Board may terminate the Plan and make no further benefit
payments or remove certain employees as Participants if it is determined by the
United States Department of Labor, a court of competent jurisdiction, or an
opinion of counsel that the Plan constitutes an employee pension benefit plan
within the meaning of Section 3(2) of ERISA (as currently in effect or hereafter
amended) which is not so exempt.
     10.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors, and assigns shall have no secured legal or equitable rights,
interest or claims in any property or assets of the Company, nor shall they be
Beneficiaries of, or have any rights, claims or interests in any property or
asset which may be acquired by the Company. Except as provided in Section 10.3,
assets of the Company shall not be held under any trust for the benefit of
Participants, their Beneficiaries, heirs, successors or assigns, or held in any
way as collateral security for the fulfilling of the obligations of the Company
under this Plan. Any and all of the Company’s assets and policies shall be, and
remain, the general, unpledged, unrestricted assets of the Company. The
Company’s obligation under the Plan shall be that of an unfunded and unsecured
promise to pay money in the future.
     10.3 Trust Fund. At its sole discretion, the Company may establish one or
more trusts, with such trustees as the Committee may approve, for the purpose of
providing for the payment of benefits owed under the Plan. Although such a trust
may be irrevocable, its assets shall be held for payment of all the Company’s
general creditors in the event of insolvency. To the extent any benefits
provided under the Plan are paid from any such trust, the Company shall have no
further obligation to pay them. If not paid from any trust, such benefits shall
remain the obligation of the Company. Notwithstanding the existence of such a
trust, it is intended that the Plan be unfunded for tax purposes and for
purposes of Title I of ERISA.
     10.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and
nontransferable. Except as may otherwise be required by law or order of a court
of competent jurisdiction, no part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other
person, nor be transferable by operation of law in the event of a Participant’s
or any other person’s bankruptcy or insolvency.
     10.5 Not a Contract of Employment. This Plan shall not constitute a
contract of employment between the Company and the Participant. Nothing in this
Plan shall give a Participant the right to be retained in the service of the
Company or to interfere with the right of the Company to discipline or discharge
a Participant at any time.
     10.6 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of North Carolina, except as
preempted by federal law.

-9-

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     10.7 Validity. In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.
     10.8 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Company, its Subsidiaries, and their successors and assigns. The
term successors as used herein shall include any corporate or other business
entity, which shall, whether by merger, consolidation, purchase or otherwise
acquire all or substantially all of the business and assets of the Company, and
successors of any such corporation or other business entity.
     10.9 Captions. The captions of the articles, Sections, and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
     10.10 Arbitration of Disputes. Any controversy or claim arising out of, or
in any way relating to this Plan shall be settled by arbitration in the city of
Winston-Salem, North Carolina, in accordance with the rules then in force of the
American Arbitration Association.
     10.11 Unclaimed Benefit. Each Participant shall keep the Company informed
of his current address and the current address of his spouse. The Company shall
not be obligated to search for the whereabouts of any person. If the location of
a Participant is not made known to the Company within three years after the date
on which payment of the Participant’s benefit under the Plan may first be made,
payment may be made as though the Participant had died at the end of the
three-year period. If, within one additional year after such three-year period
has elapsed, or, within three years after the actual death of a Participant, the
Company is unable to locate any surviving spouse of the Participant, then the
Company shall have no further obligation to pay any benefit hereunder to such
Participant or surviving spouse or any other person and such benefit shall be
irrevocably forfeited.
     10.12 Discharge of Obligations. Any payment made under this Plan in good
faith by the Company shall completely discharge the Company of any liability to
any other individual who asserts a claim to such payment.
     10.13 Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, neither the Company nor any individual acting as an
employee or agent of the Company shall be liable to any Participant, former
Participant, surviving spouse or any other person for any claim, loss, liability
or expense incurred in connection with the Plan.
     10.14 Entire Agreement. This Plan document represents the entire agreement
between the Company and any Participant in this Plan. This agreement supersedes
any and all prior agreements between the Company and any Participant, whether
such agreement or agreements were written or oral. Any amendment or modification
to the terms of this Plan must be in writing and signed by an authorized officer
of the Company. No Participation Election shall in any way amend, modify, alter
or revise this Plan. In the event the terms of the Participation Election
conflict with the terms of the Plan, the terms of the Plan shall be controlling.

-10-

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     IN WITNESS WHEREOF, the authorized officers of the Company have signed this
document to be effective upon the Effective Date.

                              KRISPY KREME DOUGHNUT CORPORATION
 
               
 
               
 
          By:    
 
             
 
 
          Its:    
 
             
 
 
               
 
                ATTEST:            
 
               
 
               
By:
               
 
 
 
           
Its:
               
 
 
 
           

-11-

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APPENDIX A
BB&T US Treasury Money Market
BB&T Short US Government Bond Fund
BB&T Intermediate US Government Bond Fund
MFS Total Return Fund AIM Balanced Fund
MFS Value Fund
AIM Premier Equity Fund
Vanguard 500 Index Fund
AIM Constellation Fund
BB&T Mid-Cap Value Fund
Fidelity Advisor Mid-Cap Fund
Royce Total Return Fund
Oppenheimer Main Street Small-Cap Fund
AIM International Growth Fund
Krispy Kreme Stock Fund

 

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FIRST AMENDMENT TO THE
KRISPY KREME DOUGHNUT CORPORATION
NONQUALIFIED DEFERRED COMPENSATION PLAN
     This First Amendment to the Krispy Kreme Doughnut Corporation Nonqualified
Deferred Compensation Plan (the “Plan”) is made this 29th day of November, 2001,
by Krispy Kreme Doughnut Corporation, and effective February 1, 2001, unless
otherwise indicated.
W I T N E S S E T H:
     WHEREAS, Krispy Kreme Doughnut Corporation (the “Corporation”) has amended
the Retirement Savings Plan of Krispy Kreme Doughnut Corporation (the
“Retirement Savings Plan”) to enable employees to begin participating in the
Retirement Savings Plan after completing three months of employment; and
     WHEREAS, the Corporation desires to amend the Plan to be consistent with
the revised terms of the Retirement Savings Plan; and
     WHEREAS, the Corporation is authorized to amend the Plan by Section 9.1 of
the Plan.
     NOW, THEREFORE, BE IT RESOLVED: that Section 3.1(b) of the Plan shall be
amended by adding the following sentence:
Effective January 1, 2002, an eligible Employee shall become a Participant as of
the first day of the month following his completion of three months of
employment.
     IN WITNESS WHEREOF, the Corporation has caused this First Amendment to be
executed by the proper officers and its corporate seal hereto affixed as the day
and year first written above.

                              KRISPY KREME DOUGHNUT CORPORATION
 
               
 
               
 
          By:    
 
             
 
 
          Its:    
 
             
 
 
               
 
                ATTEST:            
 
               
 
               
By:
               
 
 
 
           
Its:
               
 
 
 
           

 

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SECOND AMENDMENT TO THE
KRISPY KREME DOUGHNUT CORPORATION
NONQUALIFIED DEFERRED COMPENSATION PLAN
     This Second Amendment to the Krispy Kreme Doughnut Corporation Nonqualified
Deferred Compensation Plan (the “Plan”) is made this 11th day of April 2003, by
Krispy Kreme Doughnut Corporation, and effective February 1, 2003, unless
otherwise indicated.
W I T N E S S E T H:
     WHEREAS, Krispy Kreme Doughnut Corporation (the “Corporation”) has
terminated the Retirement Income Plan for Key Employees of Krispy Kreme Doughnut
Corporation (the “SERP”); and
     WHEREAS, the SERP provides that vested participants will be entitled to
receive benefits upon the later of their termination of employment or attainment
of age 65; and
     WHEREAS, the Corporation wishes to allow SERP participants to be credited
with an amount under the Plan that is the actuarial equivalent of their SERP
benefit, in lieu of receiving benefits from the SERP; and
     WHEREAS, the Corporation is authorized to amend the Plan.
     NOW, THEREFORE, BE IT RESOLVED: that a new Section 4.8 shall be added to
the Plan to read as follows:
     4.8 Deferral of SERP Benefit. In addition to the regular Deferral
Contributions described in this Article IV, a Participant may elect to defer
benefits payable to him under the provisions of the Retirement Income Plan for
Key Employees of Krispy Kreme Doughnut Corporation in accordance with the rules
established by the Committee, in its discretion. Any amounts deferred pursuant
to this Section 4.8 shall be treated as additions to the Participant’s Deferral
Contributions Account for all purposes under the Plan.
     IN WITNESS WHEREOF, the Corporation has caused this Second Amendment to be
executed by the proper officer as the day and year first written above.

                              KRISPY KREME DOUGHNUT CORPORATION
 
               
 
               
 
          By:    
 
             
 
 
          Its:    
 
             
 
 
               
 
                ATTEST:            
 
               
 
               
By:
               
 
 
 
           
Its:
               
 
 
 
           

 

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UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS
OF KRISPY KREME DOUGHNUT CORPORATION
TO ACTION WITHOUT MEETING
     The undersigned, being all the directors of Krispy Kreme Doughnut
Corporation (the “Corporation”), do hereby take the following actions and make
the following resolutions by signing their written consent hereto:
     WHEREAS, the Corporation is the sponsor of the Krispy Kreme Doughnut
Corporation Nonqualified Deferred Compensation Plan (the “Plan”);
     WHEREAS, the Corporation has terminated the Retirement Income Plan for Key
Employees of Krispy Kreme Doughnut Corporation (the “SERP”);
     WHEREAS, the Corporation believes that it is appropriate to amend the Plan
to permit SERP participants to defer their SERP benefits under the Plan; and
     WHEREAS, the Plan provides that the Corporation may amend the Plan.
     NOW, THEREFORE, BE IT RESOLVED: that the Corporation hereby adopts the
Second Amendment to the Plan; and further
     RESOLVED: that the officers of the Corporation are authorized and directed
to take all actions necessary to effectuate the amendment of the Plan and the
deferral of SERP benefits by Plan participants.
     This action is taken effective April 1, 2003.

         
 
 
 
Randy S. Casstevens    
 
       
 
       
 
 
 
Frank Murphy    
 
       
 
       
 
 
 
John W. Tate    

 

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CONSENT TO ACTION WITHOUT MEETING
OF THE COMPENSATION COMMITTEE OF
KRISPY KREME DOUGHNUTS, INC.
     The undersigned, being all of the members of the Compensation Committee of
Krispy Kreme Doughnuts, Inc. (the “Committee”), do hereby consent to and adopt
the following resolutions by written consent in lieu of a meeting, and hereby
direct that these resolutions be filed with the minutes of the proceedings of
the Committee.
     WHEREAS, participation in the Krispy Kreme Doughnut Corporation
Nonqualified Deferred Compensation Plan (the “401(k) Mirror Plan”) has
previously been limited to employees at the vice president level and above; and
     WHEREAS, the 401(k) Minor Plan provides that the Committee shall designate
employees who may participate in the Plan from the total group of employees who
are management or highly compensated employees; and
     WHEREAS, the Committee has determined that it is appropriate to allow all
participants who are considered to be “highly compensated employees” by the
Internal Revenue Service to participate in the 401(k) Mirror Plan on a limited
basis; and
     WHEREAS, the Committee is responsible for the administration of the Plan.
     NOW, THEREFORE, BE IT RESOLVED, that effective January 1, 2004, all
employees who are determined to be “highly compensated employees” for purposes
of the ADP test performed under the Krispy Kreme Doughnut Corporation Retirement
Savings Plan shall be eligible to participate in the Krispy Kreme Doughnut
Corporation Nonqualified Deferred Compensation Plan for the limited purpose of
being eligible to make Deferral Contributions under the 401(k) Mirror Plan with
respect to amounts refunded to the employee from the Retirement Savings Plan as
a result of the ADP test; and further
     RESOLVED: that the Plan shall be administered in accordance with the
foregoing resolution with respect to compensation earned in 2004 and subsequent
years, until such time as the Committee acts to revise bow the 401(k) Mirror
Plan is administered; and further
     RESOLVED, that the members of the Committee and officers of the Company are
hereby authorized and directed to take such actions as they may deem necessary,
desirable or proper to effect these resolutions.

         
 
 
 
James H. Morgan, Chairman    
 
       
 
       
 
 
 
Robert L. Strickland    
 
       
 
       
 
 
 
Dr. Su Hua Newton