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EMPLOYMENT
AGREEMENT 

THIS
EMPLOYMENT AGREEMENT (“Agreement”), dated
effective as of January 26, 2015, is among Krispy Kreme Doughnut Corporation, a
North Carolina corporation (“KKDC”), Krispy Kreme
Doughnuts, Inc., a North Carolina corporation (the “Company” and, together with KKDC, the “Companies”), and G. Price
Cooper, IV (the “Executive”). 

The
parties hereto agree as follows: 

ARTICLE 1


DEFINITIONS


SECTION 1.01. Definitions. For purposes of this Agreement, in addition to other terms defined
herein, the following terms have the meanings set forth below: 

“Base
Salary” has the meaning set forth
in Section 4.01. 

“Board” means the Board of Directors of the Company.


“Cause” shall mean (a) the Executive’s failure or
refusal to perform the Executive’s lawful and proper duties, to the extent
material, hereunder (other than as a result of total or partial incapacity due
to physical or mental illness or a court or governmental order), (b) the
Executive’s conviction of or plea of nolo contendere to any
felony (other than a traffic infraction), (c) an act or acts on the Executive’s
part constituting fraud, theft or embezzlement or that otherwise constitutes a
felony under the laws of the United States or any state thereof which results or
was intended to result directly or indirectly in gain or personal enrichment by
the Executive at the expense of the Companies, or (d) the Executive’s
insubordination to the Companies’ most senior executive officer or willful
violation of any material provision of the code of ethics of the Companies
applicable to the Executive or the Executive’s willful breach of a material term
of the Agreement. In the case of any item described in the previous sentence,
the Executive shall be given written notice of the alleged act or omission
constituting Cause, which notice shall set forth in reasonable detail the reason
or reasons that the Board believes the Executive is to be terminated for Cause,
including any act or omission that is the basis for the decision to terminate
the Executive. In the case of an act or omission described in clause (a) or (d)
of the definition of Cause, (i) if reasonably capable of being cured, the
Executive shall be given thirty (30) days from the date of such notice to effect
a cure of such alleged act or omission constituting “Cause” which, upon such
cure to the reasonable satisfaction of the Board, shall no longer constitute a
basis for Cause, and (ii) the Executive shall be given an opportunity to make a
presentation to the Board (accompanied by counsel or other representative, if
the Executive so desires) at a meeting of the Board held promptly following such
thirty (30)-day cure period if the Board intends to determine that no cure has
occurred. At or following such meeting, the Board shall determine whether or not
to terminate the Executive for “Cause” and shall notify the Executive in writing
of its determination and the effective date of such termination (which date may
be no earlier than the date of the aforementioned Board meeting). For purposes
of this Agreement, no act or failure to act shall be considered “willful” unless
it is done, or omitted to be done, by Executive in bad faith or without a
reasonable belief that Executive’s action or omission was in the best interests
of KKDC or the Company. 







“Change in
Control” means any of the
following events: 

(a) the acquisition by any Person of “beneficial
ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of fifty percent (50%) or more of the combined voting power of the Company’s
then outstanding voting securities; provided, however, that a Change in Control shall not be deemed to occur solely because
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding securities is acquired by (i) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained by the Company or
any of its Subsidiaries, or (ii) any Person, which, immediately prior to such
acquisition, is owned directly or indirectly by the shareholders of the Company
in the same proportion as their ownership of stock in the Company immediately
prior to such acquisition; 

(b) the consummation of (i) a merger or consolidation
involving the Company if the shareholders of the Company, immediately before
such merger or consolidation do not, as a result of such merger or
consolidation, own, directly or indirectly, more than fifty percent (50%) of the
combined voting power of the then outstanding voting securities of the
corporation resulting from such merger or consolidation in substantially the
same proportion as their ownership of the combined voting power of the voting
securities of the Company outstanding immediately before such merger or
consolidation, or (ii) a sale or other disposition of all or substantially all
of the assets of the Company other than to a Person which is owned directly or
indirectly by the shareholders of the Company in the same proportion as their
ownership of stock in the Company; 

(c) a change in the composition of the Board such that
the individuals who, as of the Effective Date, constitute the Board (such Board
shall be hereinafter referred to as the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition, that any
individual who becomes a member of the Board subsequent to the Effective Date
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of those individuals who are members
of the Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such individual
were a member of the Incumbent Board; provided further, however, that any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest, or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board, shall not be so considered as a member of the Incumbent Board; or


(d) the approval by shareholders of the Company of a
complete liquidation or dissolution of the Company; 

provided, however, that, if and to
the extent required under Section 409A of the Code or any regulations and
guidelines promulgated thereunder (collectively, “Section 409A”), an event will be treated as a “Change in
Control” for purposes of this Agreement only if it is also a “change in control
event” (as defined in Treas. Reg. Section 1.409A-3(i)(5)) with respect to the
Company. 

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“Code” means the Internal Revenue Code of 1986, as
amended, and any related regulations or other guidance. 

“Committee” means the Compensation Committee of the Board of
Directors of the Company. 

“Confidential
Information” means information
that is not generally known to the public and that was or is used, developed or
obtained by the Company or its Subsidiaries in connection with the business of
the Company and its Subsidiaries and which constitutes trade secrets or
information which they have attempted to protect, which may include, but is not
limited to, trade “know-how”, customer information, supplier information, cost
and pricing information, marketing and sales techniques, strategies and
programs, computer programs and software and financial information. It shall not
include information (a) required to be disclosed by court or administrative
order; (b) lawfully obtainable from other sources or which is in the public
domain through no fault of the Executive; or (c) the disclosure of which is
consented to in writing by the Company. 

“Date of
Termination” has the meaning set
forth in Section 5.07.

“Effective
Date” has the meaning set forth
in Section 2.01.

“Employment
Period” has the meaning set forth
in Section 2.01.

“Exchange
Act” means the Securities
Exchange Act of 1934, as amended. 

“Good
Reason” shall mean the occurrence
of any of the following without the Executive’s consent: (a) a reduction in the
Executive’s Base Salary or a material reduction in the Executive’s annual target
bonus opportunity (other than a reduction in bonus opportunities that applies to
the executive officers of the Company generally; and for the avoidance of doubt,
a failure to attain performance or other objectives, as determined in the
discretion of the Board and/or Committee, shall not, alone, constitute Good
Reason), (b) the Executive is no longer the most senior financial officer of (i)
the Company or (ii) in the event of a merger, consolidation or other business
combination involving the Company, the successor to the Company’s business or
assets or (iii) if all or substantially all of the voting stock of the Company
is held by another company, such company, (c) the assignment to the Executive of
any duties or responsibilities materially inconsistent with the Executive’s
status under clause (b) of this sentence or his failure at any time to report
directly to the most senior executive officer of the applicable company
described in clause (b), (d) any failure by the Companies to maintain the
Executive’s principal place of employment and the executive offices of the
Companies within 25 miles of the Winston-Salem, North Carolina area, (e) any
material breach by the Companies of this Agreement, or (f) the term of the
Employment Period ending as a result of the Companies giving the Executive
notice of nonextension of the term of this Agreement in accordance with Section
5.01 solely at either the end of the initial term or the end of the first,
second or third one-year extensions of the term under Section 5.01 (but, for the
avoidance of doubt, not at the end of any further extension of the term);
provided, however, that for any of
the foregoing to constitute Good Reason, the Executive must provide written
notification of his intention to resign within sixty (60) days after the
Executive knows or has reason to know of the occurrence of any such event, and
the Companies shall have thirty (30) days (ten (10) days in the case of a
material breach related to payment of any amounts due hereunder) from the date
of receipt of such notice to effect a cure of the condition constituting Good
Reason, and, upon cure thereof by the Companies, such event shall no longer
constitute Good Reason. 

3 







“Notice of
Termination” has the meaning set
forth in Section 5.06. 

“Permanent
Disability” means the Executive
becomes permanently disabled within the meaning of the long-term disability plan
of the Companies applicable to the Executive, and the Executive commences to
receive benefits under such plan. 

“Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
an estate, a trust, a joint venture, an unincorporated organization or a
governmental entity or any department, agency or political subdivision thereof.


“Reimbursable
Expenses” has the meaning set
forth in Section 4.04. 

“Securities
Act” means the Securities Act of
1933, as amended. 

“Subsidiary” or “Subsidiaries” means, with
respect to any Person, any corporation, partnership, limited liability company,
association or other business entity of which (a) if a corporation, 50 percent
(50%) or more of the total voting power of shares of stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or combination thereof; or (b) if a partnership, limited
liability company, association or other business entity, 50 percent (50%) or
more of the partnership or other similar ownership interests thereof are at the
time owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes of this
definition, a Person or Persons will be deemed to have a 50 percent (50%) or
more ownership interest in a partnership, limited liability company, association
or other business entity if such Person or Persons are allocated 50 percent
(50%) or more of partnership, limited liability company, association or other
business entity gains or losses or control the managing director or member or
general partner of such partnership, limited liability company, association or
other business entity. 

ARTICLE 2


EMPLOYMENT


SECTION 2.01. Employment. The Companies shall employ the Executive, and the Executive shall accept
employment with the Companies, upon the terms and conditions set forth in this
Agreement for the period beginning on January 26, 2015 (the “Effective Date”) and ending as provided in Section 5.01 (the
“Employment Period”). It is acknowledged that the Executive may
begin service to the Companies prior to the date of this Agreement, with
continued service contingent upon the preparation of this Agreement in a form
mutually acceptable to both the Executive and the Companies. 

4 







ARTICLE 3


POSITION AND
DUTIES 

SECTION 3.01. Position and Duties. During the Employment Period, the Executive shall
serve as Executive Vice President of the Company and, commencing on or about
April 3, 2015 following the filing with the U.S. Securities and Exchange
Commission (the “SEC”) of the Company’s
annual report on Form 10-K for the fiscal year ending February 1, 2015, as Chief
Financial Officer and Treasurer of the Company, in each case reporting directly
to the most senior executive officer, and the Executive shall be the Company’s
most senior financial officer. During the Employment Period, the Executive also
shall serve as Executive Vice President of KKDC and, commencing on or about
April 3, 2015 following the filing with the SEC of the Company’s annual report
on Form 10-K for the fiscal year ending February 1, 2015, as Chief Financial
Officer and Treasurer of KKDC, and the Executive shall be KKDC’s most senior
financial officer. The Executive shall have such responsibilities, powers and
duties as may from time to time be prescribed by the Board or the most senior
executive officer of the Companies; provided that such
responsibilities, powers and duties are substantially consistent with those
customarily assigned to individuals serving in such position at comparable
companies or as may be reasonably required for the proper conduct of the
business of the Companies. During the Employment Period, the Executive shall
devote substantially all of his working time and efforts, which shall be
conducted on a full-time basis, to the business and affairs of the Company and
its Subsidiaries. The Executive shall not directly or indirectly render any
services of a business, commercial or professional nature to any other person or
organization not related to the business of the Company or its Subsidiaries,
whether for compensation or otherwise, without the prior approval of the Board;
provided, however, the Executive may
serve on the board of directors of one for-profit corporation with the prior
approval of the Board, which will not be unreasonably withheld, and the
Executive may serve as a director of not-for-profit organizations or engage in
other charitable, civic or educational activities, so long as the activities
described in this proviso do not interfere with the Executive’s performance of
his duties hereunder or result in any conflict of interest with the Companies.


ARTICLE 4


BASE SALARY
AND BENEFITS 

SECTION 4.01. Base Salary. During the Employment Period, the Executive will
receive base salary from the Companies equal to $400,000 per annum (the “Base
Salary”). The Base Salary will be
payable in accordance with the normal payroll practices of the Companies.
Annually during the Employment Period the Company shall review with the
Executive his job performance and compensation, and if deemed appropriate by the
Board or the Committee, in their discretion, the Executive’s Base Salary may be
increased but not decreased. After any such increase, the term “Base Salary” as
used in this Agreement will thereafter refer to the increased amount.


5 







SECTION 4.02. Bonuses. In addition to Base Salary, the Executive shall be eligible, beginning
with fiscal year 2016, to be considered for an annual bonus, and the Executive’s
annual target bonus shall be equal to 60% of Base Salary. The Committee shall
set targets with respect to and otherwise determine the Executive’s bonus in
accordance with the Company’s then current incentive plans. For fiscal year
2016, the Company hereby agrees to pay Executive 150% of his annual target
bonus. Further, to the extent that the Executive is ineligible to and does not
receive the annual bonus for his current employer’s fiscal year 2014 (the
“FY 2014 Bonus”) to which he would otherwise be entitled from
his current employer but for the fact of his becoming an officer of the Company
and terminating his current employment, the Company shall pay the Executive an
amount equal to such FY 2014 Bonus (without interest). Such FY 2014 Bonus shall
be paid within ninety (90) days of the Effective Date. 

SECTION 4.03. Benefits. During the Employment Period, the Executive shall be entitled to
participate in all employee benefit, perquisite and fringe (if any) benefit
plans and arrangements made available by the Companies to their executives and
key management employees upon the terms and subject to the conditions set forth
in the applicable plan or arrangement. Such benefits shall include medical, life
and disability insurance provided in accordance with the policies of the
Companies. Prior to the Executive becoming eligible to participate in the
Companies’ medical (including prescription drug coverage) and dental plan (the
“Company Health Care
Plan”), if the Executive elects
continuation of coverage under a prior employer’s group health plan pursuant to
Section 4980B of the Code (“COBRA
Coverage”), the Companies shall
reimburse Executive for the cost of such COBRA Coverage. The Companies shall pay
to the Executive an amount equal to the sum of the Executive’s COBRA Coverage
expense, plus the amount necessary to put the Executive in the same after-tax
position (taking into account any and all applicable federal, state, local and
foreign income, employment and excise taxes (including any income and employment
taxes imposed on the payment)) that the Executive would have been in if the
Executive had not paid anything for COBRA Coverage. Such reimbursement shall be
paid to the Executive on or before the 20th day of the month
immediately following the month in which the Executive timely remits
documentation to the Companies of his required premium payment for COBRA
Coverage. The Executive shall be entitled to no less than four weeks of paid
vacation annually during the Employment Period. 

SECTION 4.04. Expenses; Relocation. The Companies shall reimburse the Executive for
all reasonable expenses incurred by him in the course of performing his duties
under this Agreement which are consistent with the Companies’ policies in effect
from time to time with respect to travel, entertainment and other business
expenses (“Reimbursable
Expenses”), subject to the
Companies’ requirements with respect to reporting and documentation of expenses
and the provisions of Section 13.14. The Executive shall reside in the
Winston-Salem, North Carolina community on a full-time basis commencing on or
before the sixth month anniversary of the Effective Date. The Executive shall be
eligible to receive relocation benefits in accordance with the Companies’
relocation policies for executive officers, and, without limiting the foregoing,
the Companies shall reimburse the Executive for all reasonable relocation
expenses incurred by him in relocating his immediate family’s household items to
the Winston-Salem, North Carolina area, subject to compliance with the
Companies’ relocation reimbursement policies for executive officers and the
Companies’ requirements with respect to reporting and documentation of such
expenses. The Company shall further reimburse the Executive for expenses
necessary to maintain his professional licensing (to be fulfilled in a
reasonably cost effective manner) and reasonable professional association
membership fees. 

6 







SECTION 4.05. Restricted Stock Units. The Company shall grant to the Executive
restricted stock units (the “Restricted Stock Units”)
for such number of shares of the Company’s common stock as may be determined
based on an aggregate award fair value of $1,500,000, as calculated on or as
close in time as practicable to the grant date. The grant date for the
Restricted Stock Units shall be determined by the Committee and shall occur on
or as soon as practicable after February 3, 2015. The Restricted Stock Units
shall vest, provided that the Executive’s employment continues through the
applicable vesting dates, in four equal annual installments, beginning on
January 27, 2016 and continuing on each of the following three year
anniversaries of such date (except as otherwise provided herein). The Restricted
Stock Units (including the distribution of any shares of the Company’s common
stock issuable pursuant thereto) shall be subject to the terms of the Krispy
Kreme Doughnuts, Inc. 2012 Stock Incentive Plan, as it may be amended, or its
successor plan (the “Stock
Plan”), and a Restricted Stock
Unit Agreement in a form acceptable to the Committee, which shall include the
terms provided herein. For the avoidance of doubt, the Restricted Stock Units
granted pursuant to this Section 4.05 shall fully vest upon: the Executive’s
death or disability (as set forth in the Restricted Stock Unit Agreement), the
Executive’s termination for Good Reason or without Cause (as set forth in
Section 5.03 of this Agreement), or the Executive’s termination for Good Reason
or without Cause following a Change in Control (as set forth in Section 5.09 of
this Agreement). 

SECTION 4.06. Other Equity Awards. On or prior to the date of the Company’s first
award of annual equity awards to executive officers occurring after the
Effective Date, and subject to the Executive’s continued employment through the
grant date, the Company shall grant to the Executive an initial annual equity
award comprised of restricted stock units (the “Initial Annual Equity Award”) with an
aggregate fair value of $500,000, as determined on or as close in time as
practicable to the grant date. The Initial Annual Equity Award will vest,
provided that the Executive’s employment continues through the applicable
vesting dates, in four equal installments over a four-year period. The Initial
Annual Equity Award shall be subject to the terms of the Stock Plan and form of
Restricted Stock Unit Agreement in form acceptable to the Committee. The
Executive agrees and acknowledges that the future grant of equity awards (other
than the grant of the Restricted Stock Units described in Section 4.05 and the
Initial Annual Equity Award described herein), if any, and the terms of any such
equity awards shall be subject to the discretion of the Committee and the Stock
Plan and applicable award agreement(s). 

SECTION 4.07. Compliance with Compensation and Equity
Policies. The Executive agrees to
comply with the Company’s Stock Ownership and Equity Retention Policy and
Compensation Recovery Policy, each as in effect from time to time, with respect
to annual or long-term incentive or other compensation, as applicable, including
the compensation provided pursuant to this Agreement. The terms of the Company’s
Stock Ownership and Equity Retention Policy and Compensation Recovery Policy,
each as in effect from time to time, are hereby incorporated by reference into
this Agreement. 

7 







ARTICLE 5


TERM AND
TERMINATION 

SECTION 5.01. Term. The Employment Period will terminate on the third anniversary of the
Effective Date (unless sooner terminated as hereinafter provided);
provided, however, that the
Employment Period will be automatically extended for successive one-year periods
following the original term ending on the third anniversary of the Effective
Date, until either the Companies, on the one hand, or the Executive, on the
other hand, at least one hundred eighty (180) days prior to the expiration of
the original term or any extended term, shall give written notice to the other
of their intention not to so extend the Employment Period. 

SECTION 5.02. Termination Due to Death or Permanent Disability. If
the Employment Period shall be terminated due to death or Permanent Disability
of the Executive, the Executive (or his estate or legal representative) shall be
entitled solely to the following: (a) Base Salary and accrued unused vacation
through the Date of Termination (paid on the Companies’ normal payroll date);
and (b) medical benefits as provided in Section 5.05 below. The Executive’s
entitlements under any other benefit plan or program shall be as determined
thereunder. In addition, promptly following any such termination, the Executive
(or his estate or legal representative) shall be reimbursed for all Reimbursable
Expenses incurred by the Executive prior to such termination in accordance with
Section 4.04 and Section 13.14 herein. 

SECTION 5.03. Termination for Good Reason or Without
Cause. Except as otherwise set
forth in Section 5.09 below, if the Employment Period shall be terminated (a) by
the Executive for Good Reason, or (b) by the Companies not for Cause, provided
the Executive has executed, on or before the date that is fifty (50) days
following the date of his termination of employment, an irrevocable (except to
the extent required by law to be revocable) general release of claims in the
form attached hereto as Exhibit A, and does not revoke such release prior to the
end of the seven (7) day statutory revocation period, the Executive shall be
entitled solely to the following: (i) Base Salary and accrued unused vacation
through the Date of Termination, paid on the Companies’ normal payroll payment
date; (ii) an amount equal to one times the Base Salary, provided that, the
Executive shall be entitled to any unpaid amounts only if the Executive has not
breached and does not breach the provisions of Sections 6.01, 7.01, 8.01 or
Article 9 below; (iii) a bonus for the year of termination of employment equal
to the Executive’s actual annual bonus for such year pro rated for the number of
full months during the bonus year prior to such termination of employment, to be
paid, subject to Section 13.14 below (including but not limited to any delay in
payment due to application of the Delay Period), seventy-five (75) days after
the end of the fiscal year during which the bonus was eligible to be earned;
(iv) notwithstanding anything to the contrary in any equity award agreement, the
Restricted Stock Units granted under Section 4.05 herein shall fully vest and
the Restricted Stock Units shall be settled immediately (provided that all other
equity awards granted to the Executive pursuant to Section 4.06 or otherwise
shall instead be subject to the terms of the Stock Plan and applicable award
agreement(s)); and (v) medical benefits as provided in Section 5.05 below. The
Executive’s entitlements under any other benefit plan or program shall be as
determined thereunder, except that duplicative severance benefits shall not be
payable under any other plan or program. Amounts described in clause (ii) above
will be paid, subject to Section 13.14 below, in twelve (12) equal installments,
the first two (2) of which shall be paid on the date that is two (2) months
following the Date of Termination and the next ten (10) of which will be paid in
ten (10) equal monthly installments commencing on the date that is three (3)
months following the Date of Termination and continuing on each of the next nine
(9) monthly anniversaries of the Date of Termination. In addition, promptly
following any such termination, the Executive shall be reimbursed for all
Reimbursable Expenses incurred by the Executive prior to such termination in
accordance with Section 4.04 and Section 13.14 herein. For the purposes of this
Agreement, the actual annual bonus shall be determined by the Committee. In
addition, the provisions of clause (iv), above, shall apply to any involuntary
termination of Executive’s employment by the Company without Cause or voluntary
termination by Executive for Good Reason occurring on or after the expiration of
the Employment Period under Section 5.01 following any Company notice to
Executive that the Employment Period will not be automatically so extended (and
for the avoidance of doubt, this sentence and related provisions of this
Agreement shall survive any such expiration of the Employment Period).


8 







SECTION 5.04. Termination for Cause or Other Than Good
Reason. If the Employment Period
shall be terminated (a) by the Companies for Cause, or (b) as a result of the
Executive’s resignation or leaving of his employment other than for Good Reason,
the Executive shall be entitled to receive solely Base Salary and accrued unused
vacation through the Date of Termination (paid on the Companies’ normal payroll
date) and reimbursement of all Reimbursable Expenses incurred by the Executive
prior to such termination (in accordance with Section 4.04 and Section 13.14
herein). The Executive’s rights under the benefit plans and programs shall be as
determined thereunder. A voluntary resignation by the Executive shall not be
deemed to be a breach of this Agreement. 

SECTION 5.05. Benefits. If the Employment Period is terminated as a result of a termination of
employment as specified in Section 5.02, 5.03 or 5.09, the Executive and his
covered dependents shall be entitled to continue to participate in the Company
Health Care Plan for up to eighteen (18) months following the date his
employment is terminated (the “Continuation Coverage Period”). The Executive shall pay the entire premium charged for the coverage
of the Executive and his covered dependents under the Company Health Care Plan.
The premium required for the continuation coverage provided pursuant to this
Section 5.05 shall be equal to the premium required by the continuation of
coverage requirements of Section 4980B of the Code and Part 6 of Title I of the
Employee Retirement Income Security Act of 1974, as amended (“COBRA”), for such continuation coverage. During the Continuation Coverage
Period, the Company shall reimburse the Executive for the difference between the
monthly premium amount actually paid by the Executive pursuant to this Section
5.05 and the monthly premium amount paid by active employees for the same level
of coverage under the Company Health Care Plan. Such reimbursement shall be paid
to the Executive on or before the 20th day of the month immediately following
the month in which the Executive timely remits the required premium payment. The
right to reimbursement and the coverage provided pursuant to this Section 5.05
shall terminate prior to the end of the Continuation Coverage Period if the
Executive is eligible to receive benefits under another employer-provided or
group plan (which plan may be the plan of his new employer or his spouse’s
employer) substantially comparable to the benefits provided by the Company
Health Care Plan. Furthermore, in the event of the Executive’s Permanent
Disability, insurance benefits will continue under the Companies’ long term
disability plan in accordance with its terms. 

SECTION 5.06. Notice of Termination. Any termination by the Companies for Permanent
Disability or Cause or without Cause or by the Executive with or without Good
Reason shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision indicated. 

9 







SECTION 5.07. Date of Termination. “Date of Termination” shall
mean (a) if the Employment Period is terminated as a result of a Permanent
Disability, five (5) days after a Notice of Termination is given, (b) if the
Employment Period is terminated as a result of his death, on the date of his
death, (c) if the Employment Period terminates due to expiration of the term of
this Agreement, the date the term expires, and (d) if the Employment Period is
terminated for any other reason, the later of the date of the Notice of
Termination and the end of any applicable correction period. 

SECTION 5.08. No Duty to Mitigate. The Executive shall have no duty to seek new
employment or other duty to mitigate following a termination of employment as
described in this Article 5, and no compensation or benefits described in this
Article 5 shall be subject to reduction or offset on account of any subsequent
compensation, other than as provided in Section 5.05. 

SECTION 5.09. Termination for Good Reason or Without Cause
Following a Change in Control. If
the Employment Period shall be terminated within two years after a Change in
Control (a) by the Executive for Good Reason or (b) by the Companies not for
Cause, then the Executive’s compensation and benefits upon termination shall be
governed by this Section 5.09 instead of the provisions of Section 5.03 above,
and, provided the Executive has executed, on or before the date that is fifty
(50) days following the date of his termination of employment, an irrevocable
(except to the extent required by law to be revocable) general release of claims
in the form attached hereto as Exhibit A, and does not revoke such release prior
to the end of the seven (7) day statutory revocation period, the Executive shall
be entitled solely to the following: (i) Base Salary and accrued unused vacation
through the Date of Termination, paid on the Companies’ normal payroll payment
date; (ii) an amount equal to two times the sum of his Base Salary and his
target annual bonus for the year of termination, provided that, the Executive
shall be entitled to any unpaid amounts only if the Executive has not breached
and does not breach the provisions of Sections 6.01, 7.01 or 8.01 or Article 9
below; (iii) a bonus for the year of termination of employment equal to the
Executive’s target annual bonus for such year pro rated for the number of full
months during the bonus year prior to such termination of employment; (iv)
notwithstanding anything to the contrary in any equity award agreement, the
Restricted Stock Units granted under Section 4.05 herein shall fully vest and
the Restricted Stock Units shall be settled immediately (provided that (A) all
other equity awards granted to the Executive pursuant to Section 4.06 or
otherwise shall instead be subject to the terms of the Stock Plan and applicable
award agreement(s), and (B) with respect to the Restricted Stock Units granted
under Section 4.05 herein, such equity awards shall be subject to the terms of
the Stock Plan and applicable award agreement if the benefits provided pursuant
to such instruments in the event of a Change in Control are more favorable to
the Executive);and (v) medical benefits as provided in Section 5.05. The
Executive’s entitlements under any other benefit plan or program shall be as
determined thereunder, except that duplicative severance benefits shall not be
payable under any other plan or program. In addition, promptly following any
such termination, the Executive shall be reimbursed for all Reimbursable
Expenses incurred by the Executive prior to such termination (in accordance with
Section 13.14). The amounts due under clauses (ii) and (iii) of this Section
5.09 shall be paid, subject to Section 13.14 below, sixty (60) days following
such termination of employment. In addition, the provisions of clause (iv),
above, shall apply to any involuntary termination of Executive’s employment by
the Company without Cause or voluntary termination by Executive for Good Reason
occurring on or after expiration of the Employment Period under Section 5.01
following any Company notice to Executive that the Employment Period will not be
automatically so extended (and for the avoidance of doubt, this sentence and
related provisions of this Agreement shall survive any such expiration of the
Employment Period). 

10 







SECTION 5.10. Separation From Service. Notwithstanding any provision of this Agreement to
the contrary, for purposes of Section 5.03 and Section 5.09, the Executive will
be deemed to have terminated his employment on the date of his “separation from
service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the
Companies, the Employment Period will be deemed to have ended on the date of his
“separation from service” with the Companies, and the Date of Termination will
be deemed to be the date of his “separation from service” with the Companies if
and to the extent required under Section 409A. Further, to the extent required
under Section 409A, references to “termination of employment” or words of
similar import shall be deemed to refer to, and shall be defined in accordance
with, a “separation from service” as defined under Section 409A. 

ARTICLE 6


CONFIDENTIAL
INFORMATION 

SECTION 6.01. Nondisclosure and Nonuse of Confidential
Information; Nondisparagement.
The Executive will not disclose or use at any time during or after the
Employment Period any Confidential Information of which the Executive is or
becomes aware, whether or not such information is developed by him, except to
the extent he reasonably believes that such disclosure or use is directly
related to and appropriate in connection with the Executive’s performance of
duties assigned to the Executive pursuant to this Agreement. Under all
circumstances and at all times, the Executive will take all appropriate steps to
safeguard Confidential Information in his possession and to protect it against
disclosure, misuse, espionage, loss and theft. The Executive also agrees to
execute and comply with such other confidentiality agreements or provisions as
required of executive officers of the Company. The Executive further agrees
that, during the Employment Period and thereafter, the Executive shall not make
any disparaging remarks, or any remarks that could reasonably be construed as
disparaging, regarding the Companies, or its or their officers, directors,
employees, shareholders, representatives, agents, businesses or practices.


ARTICLE 7


INTELLECTUAL
PROPERTY 

SECTION 7.01. Ownership of Intellectual
Property. In the event that the
Executive as part of his activities on behalf of the Companies generates,
authors or contributes to any invention, design, new development, device,
product, method of process (whether or not patentable or reduced to practice or
comprising Confidential Information), any copyrightable work (whether or not
comprising Confidential Information) or any other form of Confidential
Information relating directly or indirectly to the business of the Company or
its Subsidiaries as now or hereafter conducted (collectively, “Intellectual Property”), the Executive acknowledges that such
Intellectual Property is the sole and exclusive property of the Company and its
Subsidiaries and hereby assigns all right, title and interest in and to such
Intellectual Property to the Company or its designated Subsidiary. Any
copyrightable work prepared in whole or in part by the Executive during the
Employment Period will be deemed “a work made for hire” under Section 201(b) of
the Copyright Act of 1976, as amended, and the Company or its designated
Subsidiary will own all of the rights comprised in the copyright therein. The
Executive will promptly and fully disclose all Intellectual Property and will
cooperate with the Companies to protect their interests in and rights to such
Intellectual Property (including providing reasonable assistance in securing
patent protection and copyright registrations and executing all documents as
reasonably requested by the Companies, whether such requests occur prior to or
after termination of the Executive’s employment hereunder). 

11 








ARTICLE 8


DELIVERY OF
MATERIALS UPON TERMINATION OF EMPLOYMENT 

SECTION 8.01. Delivery of Materials upon Termination of
Employment. As requested by the
Companies from time to time, and upon the termination of the Executive’s
employment with the Companies for any reason, the Executive will promptly
deliver to the Companies all property of the Company or its Subsidiaries,
including, without limitation, all copies and embodiments, in whatever form or
medium, of all Confidential Information in the Executive’s possession or within
his control (including, but not limited to, written records, notes, photographs,
manuals, notebooks, documentation, program listings, flow charts, magnetic
media, disks, diskettes, tapes and all other materials containing any
Confidential Information) irrespective of the location or form of such material
and, if requested by the Companies, will provide the Companies with written
confirmation that to the best of his knowledge all such materials have been
delivered to the Companies or destroyed. 

ARTICLE 9


NON-COMPETITION AND NONSOLICITATION 

SECTION 9.01. Noncompetition. The Executive acknowledges that, during his
employment with the Companies, he will become familiar with trade secrets and
other Confidential Information concerning the Company and its Subsidiaries and
his services will be of special, unique and extraordinary value to the
Companies. In addition, the Executive hereby agrees that at any time during the
Noncompetition Period (as defined below), he will not directly or indirectly
own, manage, control, participate in, consult with, become employed by or
otherwise render services in an executive or senior management capacity to, or
as a director of, to any business listed on Exhibit B hereto in the Territory.
During the Noncompetition Period, the Company shall have the right to, in good
faith and upon ninety (90) day advance written notice, add other entities which
are in substantial competition with the Companies to the list of businesses on
Exhibit B, subject to the consent of the Executive which shall not be
unreasonably withheld. It shall not be considered a violation of this Section
9.01 for the Executive to be a passive owner of not more than 2% of the
outstanding stock of any class of any corporation which is publicly traded, so
long as the Executive has no active participation in the business of such
corporation. 


12 







SECTION 9.02. Nonsolicitation. The Executive hereby agrees that (a) during the
Nonsolicitation Period (as defined below), the Executive will not, directly or
indirectly through another Person, induce or
attempt to induce any employee of the Company or its Subsidiaries to leave the
employ of the Company or its Subsidiaries, or in any way interfere with the
relationship between the Company or its Subsidiaries and any person employed by
them at any time during such Nonsolicitation Period, and (b) during the
Nonsolicitation Period, the Executive will not induce or attempt to induce any
customer, supplier, client or other business relation of the Company or its
Subsidiaries to cease doing business with or reduce the volume of business done
with the Company or its Subsidiaries. 

SECTION 9.03. Definitions. It is agreed
that the “Territory,” for purposes
of this Article 9, shall mean: 

(a) The entire United States and any other country
where the Company or any of its Subsidiaries, joint venturers, franchisees or
affiliates has operated a retail facility at which the Companies’ products have
been sold at any time in the one-year period ending on the last day of the
Executive’s employment with the Companies; 

(b) In the event that the preceding clause shall be
determined by judicial action to define too broad a territory to be enforceable,
then “Territory” shall mean the entire United States; 

(c) In the event that the preceding clauses shall be
determined by judicial action to define too broad a territory to be enforceable,
then “Territory” shall mean the states in the United States where the Company or
any of its Subsidiaries, joint venturers, franchisees or affiliates has operated
a retail facility at which the Companies’ products have been sold at any time in
the one-year period ending on the last day of Executive’s employment with the
Companies; 

(d) In the event that the preceding clauses shall be
determined by judicial action to define too broad a territory to be enforceable,
then “Territory” shall mean the area that includes all of the areas that are
within a 50-mile radius of any retail store location in the United States at
which the Companies’ products have been sold at any time in the one-year period
ending on the last day of the Executive’s employment with the Companies; and


(e) In the event that the preceding clauses shall be
determined by judicial action to define too broad a territory to be enforceable,
then “Territory” shall mean the entire state of North Carolina. 

It is also agreed that
“Noncompetition
Period,” for purposes hereof,
shall mean: 

(a) The Employment Period and a period ending one year
after the Date of Termination; and 

(b) In the event that the preceding clause shall be
determined by judicial action to define too long a period to be enforceable,
“Noncompetition Period” shall mean the Employment Period and a period ending six
months after the Date of Termination. 



13 








It is also agreed that
“Nonsolicitation
Period,” for purposes hereof,
shall mean: 



(a) The Employment Period and a period ending two
years after the Date of Termination; 

(b) In the event that the preceding clause shall be
determined by judicial action to define too long a period to be enforceable,
“Nonsolicitation Period” shall mean the Employment Period and a period ending
eighteen months after the Date of Termination; 

(c) In the event that the preceding clauses shall be
determined by judicial action to define too long a period to be enforceable,
“Nonsolicitation Period” shall mean the Employment Period and a period ending
one year after the Date of Termination; and 

(d) In the event that the preceding clauses shall be
determined by judicial action to define too long a period to be enforceable,
“Nonsolicitation Period” shall mean the Employment Period and a period ending
six months after the Date of Termination. 

ARTICLE 10


EQUITABLE
RELIEF 

SECTION 10.01. Equitable Relief. The Executive acknowledges that (a) the covenants
contained herein are reasonable, (b) the Executive’s services are unique, and
(c) a breach or threatened breach by him of any of his covenants and agreements
with the Companies contained in Sections 6.01, 7.01, 8.01 or Article 9 could
cause irreparable harm to the Companies for which they would have no adequate
remedy at law. Accordingly, and in addition to any remedies which the Companies
may have at law, in the event of an actual or threatened breach by the Executive
of his covenants and agreements contained in Sections 6.01, 7.01, 8.01 or
Article 9, the Companies shall have the absolute right to apply to any court of
competent jurisdiction for such injunctive or other equitable relief, without
the necessity to post bond, as such court may deem necessary or appropriate in
the circumstances. Further, in the event that any provision contained in
Sections 6.01, 7.01, 8.01 or Article 9 shall be declared by a court of competent
jurisdiction to be overbroad as written, the Executive specifically agrees that
the court should modify such provision in order to make it enforceable, and that
the court should view each such provision as severable and enforce those
severable provisions deemed reasonable by such court. 

ARTICLE 11


EXECUTIVE
REPRESENTATION AND INDEMNIFICATION 

SECTION 11.01. Executive Representation. The Executive hereby represents and warrants to
the Companies that (a) the execution, delivery and performance of this Agreement
by the Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Executive is a party or by which he is bound, (b) the Executive is not
a party to or bound by any employment agreement, noncompetition agreement or
confidentiality agreement with any other Person, and (c) upon the execution and
delivery of this Agreement by the Companies, this Agreement will be the valid
and binding obligation of the Executive, enforceable in accordance with its
terms. Notwithstanding Section 11.02 below, in the event that any action is
brought against the Executive involving any breach of any employment
agreement, noncompetition agreement or confidentiality agreement with any other
Person, the Executive shall bear his own costs incurred in defending such
action, including but not limited to court fees, arbitration costs, mediation
costs, attorneys’ fees and disbursements. 


14 










SECTION 11.02. General Indemnification. The Companies, jointly and severally, agree that
if the Executive is made a party, or is threatened to be made a party, to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (each, a “Proceeding”), by reason of
the fact that he is or was a director, officer or employee of the Company or any
of its Subsidiaries or is or was serving at the request of the Company or any of
its Subsidiaries as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Executive’s alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Executive shall
be indemnified and held harmless by the Companies to the fullest extent
permitted or authorized by applicable law and their bylaws, against all cost,
expense, liability and loss (including, without limitation, advancement of
attorneys’ and other fees and expenses) reasonably incurred or suffered by the
Executive in connection therewith. The Company agrees to use its best efforts to
maintain a directors’ and officers’ liability insurance policy covering the
Executive during the Employment Period and for at least four years thereafter to
the extent available on commercially reasonable terms. 

ARTICLE 12


LIMITATION ON
CERTAIN PAYMENTS CONTINGENT ON CHANGE IN CONTROL 

SECTION 12.01. Limitation on Certain Payments Contingent on
Change in Control. 

(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that (i) any payment,
award, benefit or distribution (or any acceleration of any payment, award,
benefit or distribution) by the Companies (or any of their affiliated entities)
or any entity which effectuates a Change in Control (or any of its affiliated
entities) to or for the benefit of the Executive (whether pursuant to the terms
of this Agreement or otherwise) (the “Payments”) would be
subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), and (ii) the reduction of the amounts payable
to the Executive under this Agreement to the maximum amount that could be paid
to the Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”) would provide the Executive with a greater
after-tax amount than if such amounts were not reduced, then the amounts payable
to the Executive under this Agreement shall be reduced (but not below zero) to
the Safe Harbor Cap. Unless the Companies and the Executive agree otherwise, the
reduction of the amounts payable hereunder, if applicable, shall be made to the
extent necessary in the following order: (i) first, any such Payments that became fully vested prior to the Change in
Control and that pursuant to paragraph (b) of Treas. Reg. § 1.280G-1, Q/A 24,
are treated as contingent compensation payments solely by reason of the
acceleration of their originally scheduled dates of payment will be reduced, by
cancellation of the acceleration of their vesting; (ii) second, any severance payments or benefits, performance-based cash or equity
incentive awards, or other contingent compensation payments the full amounts of
which are treated as contingent on the Change in Control pursuant to paragraph (a) of Treas. Reg. §
1.280G-1, Q/A 24, will be reduced; and (iii) third, any cash or equity incentive awards, or nonqualified deferred
compensation amounts, that vest solely based on the Executive’s continued
service with the Companies, and that pursuant to paragraph (c) of Treas. Reg. §
1.280G-1, Q/A 24, are treated as contingent on the Change in Control because
they become vested as a result of the Change in Control, will be reduced, first
by cancellation of any acceleration of their originally scheduled dates of
payment (if payment with respect to such items is not treated as automatically
occurring upon the vesting of such items for purposes of Section 280G of the
Code) and then, if necessary, by canceling the acceleration of their vesting. In
each case, the amounts of the contingent compensation payments will be reduced
in the inverse order of their originally scheduled dates of payment or vesting,
as applicable, and will be so reduced only to the extent necessary to achieve
the required reduction. For purposes of reducing the Payments to the Safe Harbor
Cap, only amounts payable under this Agreement (and no other Payments) shall be
reduced. If the reduction of the amounts payable hereunder would not result in a
greater after-tax result to the Executive, no amounts payable under this
Agreement shall be reduced pursuant to this provision. 



15 











(b) All determinations required to be made under this
Section 12.01 shall be made by the public accounting firm that is retained by
the Companies as of the date immediately prior to the Change in Control (the
“Accounting Firm”), which shall provide detailed supporting
calculations both to the Companies and the Executive within fifteen (15)
business days of the receipt of notice from the Companies or the Executive that
there has been a Payment, or such earlier time as is requested by the Companies.
Notwithstanding the foregoing, in the event (i) the Board shall determine prior
to the Change in Control that the Accounting Firm is precluded from performing
such services under applicable auditor independence rules or (ii) the Audit
Committee of the Board determines that it does not want the Accounting Firm to
perform such services because of auditor independence concerns or (iii) the
Accounting Firm is serving as accountant or auditor for the person(s) effecting
the Change in Control, the Board shall appoint another nationally recognized
public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees, costs and expenses (including, but not limited to, the costs of retaining
experts) of the Accounting Firm shall be borne by the Companies. If payments are
reduced to the Safe Harbor Cap or the Accounting Firm determines that no Excise
Tax is payable by the Executive without a reduction in payments, the Accounting
Firm shall provide a written opinion to the Executive to such effect, that the
Executive is not required to report any Excise Tax on the
Executive’s federal income tax return, and that the failure to
report the Excise Tax, if any, on the Executive’s applicable federal income tax
return will not result in the imposition of a negligence or similar penalty. The
determination by the Accounting Firm shall be binding upon the Companies and the
Executive (except as provided in Section 12.01(c) below). 



(c) If it is established pursuant to a final
determination of a court or an Internal Revenue Service (the “IRS”) proceeding, which has been finally and conclusively resolved, that
Payments have been made to, or provided for the benefit of, the Executive by the
Companies, which are in excess of the limitations provided in this Section 12.01
(referred to hereinafter as an “Excess Payment”), the
Executive shall repay the Excess Payment to the Companies on demand, together
with interest on the Excess Payment at the applicable federal rate (as defined
in Section 1274(d) of the Code) from the date of the Executive’s receipt of such
Excess Payment until the date of such repayment. As a result of the uncertainty
in the application of Section 4999 of the Code at
the time of the determination, it is possible that Payments which will not have
been made by the Companies should have been made (an “Underpayment”), consistent with the calculations required to
be made under this Section 12.01. In the event that it is determined (i) by the
Accounting Firm, the Companies (which shall include the position taken by the
Companies, or together with their consolidated group, on their federal income
tax returns) or the IRS or (ii) pursuant to a determination by a court, that an
Underpayment has occurred, the Companies shall pay an amount equal to such
Underpayment to the Executive within ten (10) days of such determination
together with interest on such amount at the applicable federal rate from the
date such amount would have been paid to the Executive until the date of
payment. The Executive shall cooperate, to the extent the
Executive’s expenses are reimbursed by the Companies, with any
reasonable requests by the Companies in connection with any contests or disputes
with the IRS in connection with the Excise Tax or the determination of the
Excess Payment. Notwithstanding the foregoing, in the event that amounts payable
under this Agreement were reduced pursuant to Section 12.01(a) and the value of
stock options is subsequently re-determined by the Accounting Firm within the
context of Treasury Regulation §1.280G-1 Q/A 33 that reduces the value of the
Payments attributable to such options, the Companies shall promptly pay to the
Executive any amounts payable under this Agreement that were not previously paid
solely as a result of Section 12.01(a), subject to the Safe Harbor Cap.




16 












ARTICLE 13


MISCELLANEOUS


SECTION 13.01. Binding Arbitration. The parties agree that, except as provided in
Articles 9 and 10 above, any disputes under this Agreement shall be settled
exclusively by arbitration conducted in Winston-Salem, North Carolina. Except to
the extent inconsistent with this Agreement, such arbitration shall be conducted
in accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association then in effect at the time of the
arbitration and otherwise in accordance with principles which would be applied
by a court of law or equity. The arbitrator shall be acceptable to both the
Companies and the Executive. If the parties cannot agree on an acceptable
arbitrator, the dispute shall be decided by a panel of three arbitrators, one
appointed by each of the parties and the third appointed by the other two
arbitrators or if the two arbitrators do not agree, appointed by the American
Arbitration Association. The costs of arbitration incurred by the Executive (or
his beneficiaries) will be borne by the Companies (including, without
limitation, reasonable attorneys’ fees and other reasonable charges of counsel)
(a) if the arbitration occurs prior to a Change in Control, if the Executive
prevails on a majority of the material issues in the dispute, and (b) if the
arbitration occurs after a Change in Control, if the Executive prevails on at
least one material issue in the dispute. Judgment upon the final award rendered
by such arbitrator(s) may be entered in any court having jurisdiction thereof.


Following the final determination of the dispute in which, based on the
outcome of the dispute, the Executive is, in accordance with this Section 13.01,
entitled to have his costs borne by the Companies, the Companies shall pay all
such reasonable costs within ten (10) days following written demand therefor
(supported by documentation of such costs) by the Executive, and the Executive
shall make such written demand within sixty (60) days following the final
determination of the dispute; provided, however, that such payment shall be made no later than on or prior to the end of the
calendar year following the calendar year in which the costs are incurred.
Notwithstanding the foregoing, in the event a final determination of the dispute
has not been made by December 20 of the year following the calendar year in
which the costs are incurred, the Companies shall, within ten (10) days after
such December 20, reimburse such reasonable costs (supported by documentation of
such costs) incurred in the prior taxable year; provided, however, that the Executive shall return such amounts to
the Companies within ten (10) business days following the final determination if
(i) in the case of an arbitration prior to a Change in Control, the Executive
does not prevail on a majority of the material issues in the dispute, or (ii) in
the case of an arbitration after a Change in Control, the Executive does not
prevail on at least one material issue in the dispute. The amount of any costs
eligible for payment under this Section 13.01 during a calendar year will not
affect the amount of any costs eligible for payment under this Section 13.01 in
any other taxable year. 


17 










SECTION 13.02. Consent to Amendments; No Waivers. The provisions of this Agreement may be amended
or waived only by a written agreement executed and delivered by the Companies
and the Executive. Notwithstanding the foregoing, the Companies shall have
unilateral authority to amend this Agreement (without Executive consent) to the
extent necessary to comply with applicable laws, rules or regulations (including
but not limited to Section 409A) or changes to applicable laws, rules or
regulations. No other course of dealing between the parties to this Agreement or
any delay in exercising any rights hereunder will operate as a waiver of any
rights of any such parties. 

SECTION 13.03. Successors and Assigns. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors, assigns, heirs, executors and estates
of the parties hereto whether so expressed or not, provided that the Executive
may not assign his rights or delegate his obligations under this Agreement
without the written consent of the Companies (other than to his estate or heirs)
and the Company may assign this Agreement only to a successor to all or
substantially all of the assets of the Company. 

SECTION 13.04. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement. 

SECTION 13.05. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all of which counterparts taken together will
constitute one and the same agreement. 

SECTION 13.06. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.






18 








SECTION 13.07. Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and
will be deemed to have been given when delivered personally to the recipient,
two (2) business days after the date when sent to the recipient by reputable
express courier service (charges prepaid) or four (4) business days after the date when mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications will be sent to the Executive and to
the Companies at the addresses set forth below. 


	             
      	If
      to the Executive:	To
      the last address delivered to the Companies
			by
      the Executive in the manner set forth herein.
		 
		If
      to the Companies:          	Krispy Kreme Doughnuts, Inc.
			Krispy Kreme Doughnut Corporation
			Suite 500
			370
      Knollwood Street
			Winston-Salem, NC 27103
			Attn: Senior Vice President-Human
Resources



or to such other address or to
the attention of such other person as the recipient party has specified by prior
written notice to the sending party. 

SECTION 13.08. Withholding. The Companies may withhold from any amounts
payable under this Agreement such federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.


SECTION 13.09. No Third-Party Beneficiary. This Agreement will not confer any rights or
remedies upon any person other than the Companies, the Executive and their
respective heirs, executors, successors and assigns. 

SECTION 13.10. Entire Agreement. This Agreement (including any other documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof. 

SECTION 13.11. Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party. Any
reference to any federal, state, local or foreign statute or law will be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. 

SECTION 13.12. Survival. Sections 6.01, 7.01, 8.01 and Articles 1, 5, 9, 10, 11, 12 and 13 will
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period, and the Agreement
shall otherwise remain in full force to the extent necessary to enforce any
rights and obligations arising hereunder during the Employment Period.


SECTION 13.13. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL
LAW OF NORTH CAROLINA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.


19 







SECTION 13.14. Section 409A.It is intended that this Agreement will comply
with Section 409A, to the extent the Agreement is subject thereto, and the
Agreement shall be interpreted on a basis consistent with such intent. If an
amendment of this Agreement is necessary in order for it to comply with Section
409A, the parties hereto will negotiate in good faith to amend the Agreement in
a manner that preserves the original intent of the parties to the extent
reasonably possible. Notwithstanding any provision to the contrary in this
Agreement, if the Executive is deemed on the date of his “separation from
service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) to be a
“specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)),
then with regard to any payment that is required to be delayed pursuant to
Section 409A(a)(2)(B) of the Code, the portion, if any, of such payment so
required to be delayed shall not be made prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of his “separation
from service”, or (ii) the date of his death (the “Delay Period”). Upon the expiration of the Delay Period, all
payments delayed pursuant to this Section shall be paid to the Executive in a
lump sum, and any remaining payments shall be made as provided in the Agreement
and in a manner in accordance with Section 409A. The Companies shall not have
any obligation to indemnify or otherwise protect the Executive from any
obligation to pay any taxes pursuant to Section 409A. In the event that this
Agreement or any compensation payable hereunder shall be deemed not to comply
with (or be exempt from) Section 409A, then neither the Companies, the Board,
the Board of Directors of KKDC, nor its or their designees or agents, shall be
liable to the Executive or other persons for actions, decisions or
determinations made in good faith. 

With
respect to any reimbursement or in-kind benefit arrangements of the Companies
and their subsidiaries that constitute deferred compensation for purposes of
Section 409A, except as otherwise permitted by Section 409A, the following
conditions shall be applicable: (a) the amount eligible for reimbursement, or
in-kind benefits provided, under any such arrangement in one calendar year may
not affect the amount eligible for reimbursement, or in-kind benefits to be
provided, under such arrangement in any other calendar year (except that the
health and dental plans may impose a limit on the amount that may be reimbursed
or paid), (b) any reimbursement must be made on or before the last day of the
calendar year following the calendar year in which the expense was incurred, and
(c) the right to reimbursement or in-kind benefits is not subject to liquidation
or exchange for another benefit. Whenever a payment under this Agreement
specifies a payment period with reference to a number of days (e.g., “payment
shall be made within thirty (30) days after termination of employment”), the
actual date of payment within the specified period shall be within the sole
discretion of the Companies. Whenever payments under this Agreement are to be
made in installments, each such installment shall be deemed to be a separate
payment for purposes of Section 409A. Any reimbursement by the Company pursuant
to Section 12.01(c) herein shall be made to the Executive not later than the end
of the Executive’s taxable year following the taxable year in which he remits
the related taxes. 

20 








SECTION 13.15. Representations of the Companies. The Companies represent and warrant that (a) the
execution, delivery and performance of this Agreement by the Companies has been
fully and validly authorized by all necessary corporate action, (b) the
officer(s) signing this Agreement on behalf of the Companies is duly authorized
to do so, (c) the execution, delivery and performance of this Agreement does not
violate any applicable law, regulation, order, judgment or decree or any
agreement, plan or corporate governance document to which the Companies are a
party or by which they are bound, and (d) upon execution and delivery of this
Agreement by the parties hereto, it will be a valid and binding
obligation of the Companies enforceable against the Companies and their
successors and assigns in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally. 

[remainder of
page left intentionally blank] 

21 







IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written. 

		KRISPY KREME DOUGHNUTS, INC.
			 
			 
		By:     	/s/ Tony
  Thompson
			Tony
      Thompson
	 		Chief Executive Officer
			 
			 
		KRISPY KREME DOUGHNUT CORPORATION
			 
			 
		By:	/s/ Cathleen D.
      Allred
			Cathleen D. Allred
			Senior Vice
      President Human Resources
			and
      Organizational Development
			 
			 
		EXECUTIVE
			 
			 
		/s/ G. Price Cooper, IV 
		G. Price Cooper, IV



22 







Exhibit
A 

MUTUAL
RELEASE 

This
mutual release (this “Release”) is entered into
as of this ____ day of ______, _____ (the “Release Date”) among Krispy Kreme Doughnut Corporation, a
North Carolina corporation (“KKDC”), Krispy Kreme Doughnuts, Inc., a North Carolina
corporation (the “Company” and, together
with KKDC, the “Companies”) and G. Price
Cooper, IV (the “Executive”). 

1. Reference is hereby made to the employment
agreement dated as of [_________], 2015 (the
“Employment
Agreement”) by the parties hereto
setting forth the agreements among the parties regarding the termination of the
employment relationship between the Executive and the Companies. Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Employment Agreement. 

2. The Executive, for himself, his spouse, heirs,
executors, administrators, successors and assigns, hereby releases and
discharges the Companies and its respective direct and indirect parents and
subsidiaries, and other affiliated companies, and each of their respective past
and present officers, directors, agents and employees, from any and all actions,
causes of action, claims, demands, grievances and complaints, known and unknown,
which the Executive or his spouse, heirs, executors, administrators, successors
or assigns ever had or may have at any time through the Release Date. The
Executive acknowledges and agrees that this Release is intended to and does
cover, but is not limited to, (i) any claim of employment discrimination of any
kind whether based on a federal, state or local statute or court decision,
including the Age Discrimination in Employment Act with appropriate notice and
rescission periods observed; (ii) any claim, whether statutory, common law or
otherwise, arising out of the terms or conditions of the Executive’s employment
at the Companies and/or the Executive’s separation from the Companies;
enumeration of specific rights, claims and causes of action being released shall
not be construed to limit the general scope of this Release. It is the intent of
the parties that by this Release the Executive is giving up all rights, claims
and causes of action occurring prior to the Release Date, whether or not any
damage or injury therefrom has yet occurred. The Executive accepts the risk of
loss with respect to both undiscovered claims and with respect to claims for any
harm hereafter suffered arising out of conduct, statements, performance or
decisions occurring before the Release Date. 

It
is understood that the Executive has been advised to consult with an attorney
prior to executing this Release; that he in fact has consulted a knowledgeable,
competent attorney regarding this Release; that he may, before executing this
Release, consider this Release for a period of twenty-one (21) calendar days;
and that the consideration he receives for this Release is in addition to
amounts to which he was already entitled. If the Executive is signing this
Release prior to the expiration of such twenty-one (21)-day period, the
Executive is waiving his right to review the Release for such full twenty-one
(21)-day period prior to signing it. It is further understood that the Executive
may revoke this Release within seven calendar days from the date of execution
hereof. If the Executive revokes this Release within such seven (7)-day period,
no severance benefit will be payable to him under the Employment Agreement and
he shall return to the Company any such payment received prior to that date.








3. The Companies hereby release and discharge the
Executive, his spouse, heirs, executors, administrators, successors and assigns,
from any and all actions, causes of actions, claims, demands, grievances and
complaints, known and unknown, which the Companies ever had or may have at any
time through the Release Date. The Companies acknowledge and agree that this
Release is intended to and does cover, but is not limited to, (i) any claim,
whether statutory, common law or otherwise, arising out of the terms or
conditions of the Executive’s employment at the Companies and/or the Executive’s
separation from the Companies, and (ii) any claim for attorneys’ fees, costs,
disbursements or other like expenses. The enumeration of specific rights, claims
and causes of action being released shall not be construed to limit the general
scope of this Release. It is the intent of the parties that by this Release the
Companies are giving up all of their respective rights, claims and causes of
action occurring prior to the Release Date, whether or not any damage or injury
therefrom has yet occurred. The Companies accept the risk of loss with respect
to both undiscovered claims and with respect to claims for any harm hereafter
suffered arising out of conduct, statements, performance or decisions occurring
before the Release Date. 

4. This Release shall in no event (i) apply to any
claim by either the Executive or the Companies arising from any breach by the
other party of its obligations under the Employment Agreement occurring on or
after the Release Date, (ii) waive the Executive’s claim with respect to
compensation or benefits earned or accrued prior to the Release Date to the
extent such claim survives termination of the Executive’s employment under the
terms of the Employment Agreement, (iii) waive the Executive’s right to
indemnification under the charters and by-laws of the Companies, or (iv) waive
the Executive’s rights as a shareholder. 

5. This Mutual Release shall be effective as of the
Release Date and only if executed by both parties. 

6. All questions concerning the construction,
validity and interpretation of this Mutual Release will be governed by the
internal law of North Carolina, without regard to principles of conflict of
laws. 

2 







IN
WITNESS WHEREOF, each party hereto, intending to be legally bound, has executed
this Mutual Release on the date indicated above. 

		KRISPY KREME DOUGHNUTS, INC.
		  
		 
		By:     	 
			Tony
      Thompson
			Chief Executive Officer
	 	  
		 
		KRISPY KREME DOUGHNUT CORPORATION
		 
		 
		 
		By:	 
			Cathleen D. Allred
			Senior Vice President Human Resources
			and
      Organizational Development
		 
		 
		EXECUTIVE
		 
		 
		 
			 
			G.
      Price Cooper, IV



3 







Exhibit
B 

The
following businesses, together with their Subsidiaries, Affiliates and
successors in interest, are the businesses for purposes of Section 9.01 hereof:


	                    
      	Dunkin Brands Inc.
		Tim
      Hortons, Inc.
		George Weston Limited
		Flowers Foods, Inc.
		McKee Foods Corporation
		Starbucks
		Dewey’s Bakery
		Salem Baking Company
	 	Dawn
      Food Products, Inc.
		CSM
      Baking Products
		Bimbo Bakeries USA, Inc.
		Hostess Brands, LLC
		Panera Bread Company
		Sysco Corp



And
any other business that derives more than fifty percent (50%) of its revenues
from the indirect or direct sale of coffee, doughnuts and/or bakery or sweet
goods.