KRISPY KREME DOUGHNUTS,
INC.NONQUALIFIED STOCK OPTION AGREEMENT

THIS
NONQUALIFIED STOCK OPTION AGREEMENT (this Agreement) is made as of
______________ (the Grant Date), by and between Krispy Kreme Doughnuts, Inc., a
North Carolina corporation having its principal office at 370 Knollwood Street,
Winston-Salem, North Carolina 27103 (the Corporation), and ______________ (the
Optionee).

W I T N E S S E T H:

WHEREAS, the
Board of Directors and shareholders of the Corporation have approved the Krispy
Kreme Doughnuts, Inc. 2000 Stock Incentive Plan (the Plan), for the purposes
and subject to the provisions set forth in the Plan;

WHEREAS, pursuant to authority
granted to it in the Plan, the Compensation Committee of the Board of Directors
of the Corporation (the Committee) has, on behalf of the Corporation, granted
to Optionee an option to purchase shares of the Corporations Common Stock, no
par value per share (the Common Stock or the Stock), as set forth below;
and

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

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

1. Summary of
Grant

Number of Shares:Option Exercise
Price:Date of Grant:

2. Grant of
Option

This
Agreement sets forth the terms of a nonqualified option granted to the Optionee
to purchase from the Corporation, during the period specified in Sections 3 and
4 of this Agreement, a total of ______________ shares of Common Stock, at the
purchase price of ______________ per share (the Exercise Price), in accordance
with the terms and conditions stated in this Agreement. The shares of Common
Stock subject to the option granted hereby are referred to below as the
Shares, and the option to purchase such Shares is referred to below as the
Option.

3. Vesting and Exercise of
Option

The Option
shall vest and become exercisable in increments in accordance with the schedule
set forth below, provided that the Option shall vest and become
exercisable with respect to an increment as specified only if the Optionee has
not incurred a Termination of Employment prior to the vesting date with respect
to such increment:

(a) no portion of the Option shall
vest or become exercisable prior to the first anniversary of the Grant
Date;

(b) on the
first anniversary of the Grant Date one fourth of the number of shares in the
Option (as indicated in Section 1) shall vest and become exercisable;

(c) on the
second anniversary of the Grant Date an additional one fourth of the number of
shares in the Option (as indicated in Section 1) shall vest and become
exercisable;

(d) on the
third anniversary of the Grant Date an additional one fourth of the number of
shares in the Option (as indicated in Section 1) shall vest and become
exercisable; and

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(e) on the
fourth anniversary of the Grant Date the remaining one fourth of the number of
shares in the Option (as indicated in Section 1) shall vest and become
exercisable.

Notwithstanding the vesting provisions described above, the Option shall
vest and become exercisable with respect to 100% of the Shares upon the
Optionees Termination of Employment if the Optionees Termination of Employment
is due to his or her Retirement, death or Disability.

The schedule
set forth above is cumulative, so that Shares as to which the Option has become
vested and exercisable pursuant to the provisions above may be purchased
pursuant to exercise of the Option at any date subsequent to vesting but prior
to termination of the Option. The Option may be exercised at any time and from
time to time to purchase up to the number of Shares as to which it is then
vested and exercisable.

The Option
will become vested and exercisable in full upon a Change in Control, provided
that Optionee has not incurred a Termination of Employment prior to the date of
such Change in Control. In the event of a Change in Control, the Board, in its
sole discretion, may send Optionee prior written notice of the effectiveness of
such event and the last day on which Optionee may exercise the Option. In such
event, Optionee may, upon compliance with all of the terms of this Agreement and
the Plan, purchase any or all of the Shares with respect to which the Option is
vested and exercisable on or prior to the last day specified in such notice,
and, to the extent the Option is not exercised, it shall terminate at 5:00 P.M.,
Eastern Standard Time, on the last day specified in such notice. For purposes
hereof, Change in Control shall have the meaning set forth in the Plan, except
in the case of a transaction described in clauses (1) or (3) of paragraph (b) of
such definition, the consummation of such a transaction, rather than the
approval by shareholders of the Corporation of such transaction or agreement to
effect such a transaction, shall constitute a Change in Control.

4. Termination of
Option

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

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

(b) upon the
expiration of 90 days following the Optionees Termination of Employment for any
reason other than his or her Retirement, death, Disability, or for
Cause;

(c) upon the
expiration of 180 days following Optionees Termination of Employment on account
of his or her Disability;

(d) upon the
expiration of 360 days following Optionees Termination of Employment on account
of his or her death;

(e) immediately upon Optionees
Termination of Employment for Cause, as defined below in Section
21(a);

(f) on the last date specified in
the notice described in Section 3 above in the event of a Change in Control;
or

(g) on the ten year anniversary of
the Grant Date (the Expiration Date).

Upon its
termination, the Option shall have no further force or effect and Optionee shall
have no further rights under the Option or to any Shares which have not been
purchased pursuant to prior exercise of the Option.

5. Manner of Exercise of
Option

(a)
Exercise. The Option may be exercised only by (i) Optionees completion, execution
and delivery to the Corporation of a notice of exercise and (ii) the payment to
the Corporation, pursuant to the terms of this Agreement, of an amount equal to
the Exercise Price multiplied by the number of Shares being purchased as
specified in Optionees notice of exercise (the Purchase Price). Optionees
notice of exercise shall be given in the manner specified in Section 10 but any
exercise of the Option shall be effective only when the items required by the
preceding sentence are actually received by the Corporation. The notice of
exercise shall be in

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the form attached to this Agreement.
Notwithstanding anything to the contrary in this Agreement, the Option may be
exercised only if compliance with all applicable federal and state securities
laws can be effected, with the Committee being the final arbitrator thereof, in
its sole and absolute discretion, in the event of any dispute between the
Corporation and the Optionee with regard to the interpretation of such
laws.

(b)
Form of Payment. Payment of the Purchase Price may be
made (i) by check payable to the order of the Corporation for an amount in U.S.
dollars equal to the Purchase Price of such Shares; (ii) by authorizing a third
party to sell a portion of the Shares acquired upon exercise of the Option and
remit to the Corporation a sufficient portion of the sales proceeds to pay the
full Purchase Price; or (iii) by combining the above methods.

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

(d)
Withholding Obligation. Issuance of Shares upon
exercise of the Option shall be subject to the condition that the Optionee shall
pay to the Corporation, in addition to the Purchase Price, the minimum amount
the Corporation is required by law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with such exercise of the Option, if any. In lieu of the payment specified in
this paragraph, Optionee may satisfy the obligation, in whole or in part, by the
methods specified in subsection (b) above.

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

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

6. Restrictions on Transfer of
Option

(a) Except
as otherwise provided in subsections (b), (c) and (d) below, the Option may not
be sold, exchanged, delivered, assigned, bequeathed or gifted, pledged,
mortgaged, hypothecated or otherwise encumbered, transferred or permitted to be
transferred, or otherwise disposed of, whether voluntarily, involuntarily or by
operation of law (including, without limitation, the laws of bankruptcy,
intestacy, descent and distribution or succession) or on an absolute or
contingent basis. For purposes of this Section, any reference to Optionee shall
(when applicable) be deemed to be and include references to Optionees estate,
executors or administrators, personal or legal representatives and transferees
(direct or indirect).

(b) If
permitted by the Committee, Optionee may transfer this Option to members of his
or her Immediate Family (as defined below), to one or more trusts for the
benefit of such Immediate Family members, to one or more partnerships where such
Immediate Family members are the only partners, or to one or more limited
liability companies (or similar entities) where such Immediate Family members
are the only members or beneficial owners of the entity, if (i) the Optionee
does not receive any consideration in any form whatsoever for such transfer,
(ii) such transfer is permitted under applicable tax laws, and (iii) if the
Optionee is an Insider, such transfer is permitted under Rule 16b-3 of the
Exchange Act as in effect from time to time. For purposes hereof, Immediate
Family means the Optionee and the Optionees spouse, children and
grandchildren.

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(c) In the
event of Optionees death, the Option may be transferred to any executor,
administrator, personal or legal representative, legatee, heir or distributee of
the estate of Optionee.

(d) In the
event of Optionees divorce, Optionee may transfer some or all of the Option to
his or her former spouse incident to Optionees divorce from the former
spouse.

(e) As a
condition precedent to the transfer of the Option, each and every prospective
transferee shall (i) provide or cause to be provided to the Corporation, at its
request, sufficient evidence of the legal right and authority of such
prospective transferee to have the Option so transferred and (ii) comply with
the provisions of this Agreement. Any Option so transferred pursuant to this
Section shall continue to be subject to the same terms and conditions in the
hands of the transferee as were applicable to said Option immediately prior to
the transfer thereof, and any reference in this Agreement to the performance of
services for the Corporation by the Optionee shall continue to refer to the
performance by the transferring Optionee.

7. Rights Prior to
Exercise

Optionee
shall not be deemed for any purpose to be a shareholder of the Corporation with
respect to any Shares as to which this Option shall not have been exercised and
payment made as hereby provided and a stock certificate for such Shares actually
issued to Optionee. No adjustment will be made for dividends or other rights for
which the record date is prior to the date of such issuance.

8. Employment of
Optionee

Nothing in
this Agreement shall be construed as constituting a commitment, guarantee,
agreement or understanding of any kind or nature that the Corporation, any
Subsidiary or affiliate shall continue to employ Optionee, nor shall this
Agreement affect in any way the right of the Corporation, any Subsidiary or
affiliate to terminate the employment or other service of Optionee at any time
and for any reason. By Optionees execution of this Agreement, Optionee
acknowledges and agrees that Optionees employment or other service to the
Corporation, any Subsidiary or affiliate is at will. No change of Optionees
duties with respect to the Corporation, any Subsidiary or affiliate shall result
in, or be deemed to be, a modification of any of the terms of this Agreement.
Optionee acknowledges and agrees that the award and acceptance of the Options
pursuant to this Agreement does not entitle Optionee to future grants under the
Plan or any other plan.

9. Burden and
Benefit

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

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

10. Notices

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

11. Specific
Performance

Strict
compliance by Optionee shall be required with each and every provision of this
Agreement. The parties hereto agree that the Shares are unique, that Optionees
failure to perform the obligations provided by this Agreement will result in
irreparable damage to the Corporation and that specific performance of
Optionees obligations may be obtained by suit in equity.

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12. Entire
Agreement

The parties
hereto agree that this Agreement sets forth all of the promises, agreements,
conditions, understandings, warranties, and representations between the parties
with respect to the Option and Shares and that there are no promises,
agreements, conditions, understandings, warranties, or representations, oral or
written, express or implied between the parties with respect to the Option and
Shares other than as set forth in this Agreement and in the Plan. Any
modifications or any waiver of any provision contained in this Agreement shall
not be valid unless made in writing and signed by the person or persons sought
to be bound by such waiver or modifications.

13. Severability

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

14. Waiver

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

15. Terms and Conditions of
Plan

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

16. Authority of
Committee

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

17. Covenants and Representations of
Optionee

Optionee represents, warrants,
covenants and agrees with the Corporation as follows:

(a) Optionee
has not relied upon the Corporation with respect to any tax consequences related
to the grant or exercise of this Option, or the disposition of Shares purchased
pursuant to its exercise. Optionee acknowledges that, as a result of the grant
and/or exercise of the Option, Optionee may incur a substantial tax liability.
Optionee assumes full responsibility for all such consequences and the filing of
all tax returns and elections Optionee may be required or find desirable to file
in connection therewith.

(b) Optionee
will not distribute or resell any Shares (or other securities) issuable upon
exercise of the Option granted hereby in violation of law. Optionee shall comply
with all provisions of the Corporations Securities Trading Policy and the
Corporations Stock Ownership Guidelines, each as in effect from time to
time.

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

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18. Limitation of
Liability

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

19. Governing Law

This
Agreement shall be governed by, construed and enforced in accordance with the
laws of the State of North Carolina, without giving effect to the conflict of
laws provisions thereof.

20. Definitions

(a)
Retirement shall mean the Optionees Termination of Employment at a time when for an
Optionee, the sum of the Optionees age and years of employment with the
Corporation, its Subsidiaries and affiliates equals or exceeds 65.

(b)
Termination of Employment means the discontinuance of the Optionees service
relationship with the Corporation, its Subsidiaries and affiliates, including
but not limited to service as an Optionee of the Corporation, its Subsidiaries
and affiliates, as a non-Optionee member of the board of directors of the
Corporation, or as a consultant or advisor to the Corporation, its Subsidiaries
and affiliates. Except to the extent provided otherwise in an Agreement or
determined otherwise by the Committee, a Termination of Employment shall not be
deemed to have occurred if the capacity in which the Optionee provides service
to the Corporation changes (for example, a change from consultant status to
Optionee status or vice versa) or if the Optionee transfers among the various
entities constituting the Corporation and its Subsidiaries and affiliates, so
long as there is no interruption in the provision of service by the Optionee to
the Corporation and its Subsidiaries and affiliates. The determination of
whether an Optionee has incurred a Termination of Employment shall be made by
the Committee in its discretion. An Optionee shall not be deemed to have
incurred a Termination of Employment if the Optionee is on military leave, sick
leave, or other bona fide leave of absence approved by the Corporation of 180
days or fewer (or any longer period during which the Optionee is guaranteed
reemployment by statute or contract.) In the event an Optionees leave of
absence exceeds this period, he or she will be deemed to have incurred a
Termination of Employment on the day following the expiration date of such
period.

21. Forfeiture in the Event of
Competition and/or Solicitation or other Detrimental Acts

In return for granting the Option to
Optionee, Optionee agrees to the following restrictions:

(a) Optionee
expressly agrees and covenants that during the Restricted Period (as defined
below), Optionee shall not, without the prior written consent of the
Corporation, directly or indirectly:

(i) own, manage, control,
participate in, consult with, become employed by or otherwise render services to
any Competitive Business (as defined below) in the Territory (as defined below),
except that it shall not be considered a violation of this clause for the
Optionee to be a passive owner of not more than two percent of the outstanding
stock of any class of any corporation which is publicly traded, so long as
Optionee has no active participation in the business of such
corporation;

(ii) induce or attempt to induce any
customer, supplier, client or other business relation of the Corporation or its
affiliates to cease doing business with the Corporation or its affiliates if
such cessation could reasonably be expected to result in material harm to the
Corporation;

(iii) induce or attempt to induce
any Optionee of the Corporation or its affiliates to leave the employ of the
Corporation or its affiliates, or in any way interfere with the relationship
between the Corporation or its affiliates and any person employed by them;
or

(iv) violate the Corporations
Securities Trading Policy.

(b) Optionee
expressly agrees and covenants that Optionee will not, without the prior written
consent of the Corporation, directly or indirectly, disclose or use at any time
before or after Optionees Termination of Employment any Confidential
Information (as defined below) of which Optionee is or becomes aware,
whether

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or not such information is developed by
Optionee, except to the extent such disclosure or use is directly related to and
appropriate in connection with Optionees performance of duties assigned to
Optionee by the Corporation or its affiliates. Under all circumstances and at
all times, Optionee will take all appropriate steps to safeguard Confidential
Information in his or her possession and to protect it against disclosure,
misuse, espionage, loss and theft.

(c) If the
Committee determines that Optionee has violated any provisions of this Section
21 or that Optionees employment has been terminated for Cause, then Optionee
agrees and covenants that:

(i) Optionee shall automatically
forfeit any rights Optionee may have with respect to the Option as of the date
of such determination; and

(ii) if Optionee has exercised all
or any part of the Option within the twelve-month period immediately preceding a
violation of this Section 21 or termination of Optionees employment for Cause,
upon the Corporations demand, Optionee shall immediately deliver to the
Corporation an amount equal to the gain realized by Optionee upon such exercise
(the excess of the aggregate Fair Market Value, on the date of exercise, of the
Common Stock received upon exercise over the aggregate exercise price of the
Option with respect to such Common Stock, then less any taxes paid which are not
refundable or for which the Optionee does not otherwise receive a tax credit or
other form of reimbursement).

(d) Definitions. For purposes
of this Section 21, the following definitions shall apply:

(i) Competitive Business means any
business listed on Exhibit A hereto.

(ii) Confidential
Information means information that is
not generally known to the public and that was or is used, developed or obtained
by the Corporation or its affiliates in connection with the business of the
Corporation or its affiliates 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 Optionee; or (c) the disclosure of which is consented to in writing
by the Corporation.

(iii) Restricted
Period means the period during which
Optionee is employed by the Corporation or an affiliate and twelve months
following the date that Optionee ceases to be employed by the Corporation or an
affiliate for any reason whatsoever.

(iv) Territory means:

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

(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 Corporation or any of its Subsidiaries, joint venturers, franchisees
or affiliates has operated a retail facility at which the Corporations products
have been sold at any time in the one-year period ending on the last day of
Optionees employment with Corporation or its affiliates;

(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 Corporations products have been sold at any time in
the one-year period ending on the last day of Optionees employment with the
Corporation or its affiliates; and

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(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.

(e) The
Corporation may require Optionee, in connection with the exercise of the Option,
to certify in a manner acceptable to the Corporation that Optionee has not
violated the terms of this Section 21 and may decline to give effect to such
exercise if Optionee fails so to certify. If Optionee is required to repay any
Option gain to the Corporation pursuant to this Section 21, Optionee shall pay
such amount in such manner and on such terms and conditions as the Corporation
may require, and the Corporation shall be entitled to withhold or set-off
against any other amount owed to Optionee by the Corporation or any of its
affiliates (other than any amount owed to Optionee under any retirement plan
intended to be qualified under Section 401(a) of the Code) up to any amount
sufficient to satisfy any unpaid obligation of Optionee under this Section
21.

(f) Optionee
acknowledges and agrees that the period, scope and geographic areas of
restriction imposed upon Optionee by the provisions of Section 21 are fair and
reasonable and are reasonably required for the protection of the Corporation. In
the event that any part of this Agreement, including, without limitation,
Section 21, is held to be unenforceable or invalid, the remaining parts of
Section 21 and this Agreement shall nevertheless continue to be valid and
enforceable as though the invalid portions were not a part of this Agreement. If
any one of the provisions in this Section 21 is held to be excessively broad as
to period, scope and geographic areas, any such provision shall be construed by
limiting it to the extent necessary to be enforceable under applicable
law.

(g) Optionee
acknowledges that breach by Optionee of this Agreement would cause irreparable
harm to the Corporation and that, in the event of such breach, the Corporation
shall have, in addition to monetary damages and other remedies at law, the right
to an injunction, specific performance and other equitable relief to prevent
violations of your obligations hereunder.

(h) If the
Corporation is required to prepare an accounting restatement due to the material
noncompliance of the Corporation as a result of misconduct pertaining to any
financial reporting requirement under the securities laws (Misconduct), and
such Misconduct is the result of actions taken by either the Chief Executive
Officer and/or the Chief Financial Officer, then such of the Chief Executive
Officer and/or the Chief Financial Officer as have committed such Misconduct as
determined by the Committee shall reimburse the Corporation for (1) any bonus or
other incentive-based or equity-based compensation received by either or both of
them, as applicable, from the Corporation during the 12-month period following
the first public issuance or filing with the Securities and Exchange Commission
(whichever first occurs) of the financial document embodying the financial
reporting requirement that gives rise to the restatement; and (2) any profits
realized by either or both of them, as applicable, from the sale of securities
of the Corporation during that 12-month period.

22. Holding Period After Resignation
or Termination

In return
for granting the Option to Optionee, Optionee agrees that in the event of
Optionees Termination of Employment in a manner that would otherwise permit
Optionee to exercise Optionees Options after leaving employment by the
Corporation, Optionee will nevertheless delay making any transactions in the
Corporations stock until such time as the Corporation has filed its next
succeeding quarterly (10-Q) or annual (10-K) financial filing, as applicable,
with the U. S. Securities and Exchange Commission.

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

| | KRISPY KREME DOUGHNUTS,
      INC.
| | ----------------------------------
| |                                   
| |                                   
| | By:                               
| | Title:                            
| |                                   
| |                                   
| | OPTIONEE                          
| |                                   
| |                                   
| | Signature:                        
| | Printed
    Name:                 



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STOCK OPTION EXERCISE
FORM

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

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

SECTION II: I wish to exercise the
following options:

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

|SECTION
III                                     |                                     |                                             |  | SECTION
  IV                       
|----------------------------------------------- | ----------------------------------- | ------------------------------------------- |  | -----------------------------------
|                                                |                                     |                                             |  |                                    
|I elect to pay for my shares
      (check one): |                                     |                                             |  | (check one):                       
|                                                |                                     |                                            
|£                                               |                                     | Broker assisted Cashless Exercise
      for |  | £                                  
|                                                | Cash                                |                                             |  | Cash/Stock)                        
|                                                |                                     |                                            
|£                                               |                                     | Cash Purchase by Check (payable
      to    |  | £                                  
|                                                | Krispy Kreme Doughnuts,
      Inc.) |                                             |  | (required for Cash
      Purchases)

|          |  |                       
|--------- |  | ----------------------
|Signature |  | Date of
      Exercise

|Return         | KRISPY KREME
      DOUGHNUT        
|-------------- | -----------------------------------
|form
      to: | CORPORATION                        
|               | ATTN: Chief
      Financial Officer
|               | P.O. Box
      83                  
|               | Winston-Salem,
      NC 27102      
|               | Phone:
    336-725-2981            

10

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