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                                                                   EXHIBIT 10.24








                      DIRECTORS' LONG-TERM INCENTIVE PLAN



                                       OF



                       KRISPY KREME DOUGHNUT CORPORATION


                 *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *


                           Adopted February 10, 1993

                           Effective January 30, 1993


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                               TABLE OF CONTENTS


ARTICLE I
  DEFINITIONS                                                                2

ARTICLE II
  PARTICIPATION                                                              3

ARTICLE III
  DEFERRED COMPENSATION                                                      3
    Section A.  Amount of Deferred Compensation                              3
    Section B.  Election to Defer Compensation                               4

ARTICLE IV
  CREDITING OF PHANTOM SHARE UNITS                                           4
    Section A.  Crediting of Phantom Share Units                             4
    Section B.  Additions to Deferred Amounts                                5
    Section C.  Valuation of Units                                           6

ARTICLE V
  DISTRIBUTION OF BENEFITS                                                   6
    Section A.  Normal Distribution of Benefits                              6
    Section B.  Distribution Upon Death                                      7
    Section C.  Distribution Upon Termination of Directorship                8
    Section D.  Distribution Upon Financial Emergency                        9
    Section E.  Withholding From Distributions                               9

ARTICLE VI
  MISCELLANEOUS                                                             10
    Section A.  Nonassignability                                            10
    Section B.  Sale, Public Offering, Merger or ESOP                       10
    Section C.  Scope of DLTIP                                              13
    Section D.  Vesting                                                     13
    Section E.  Term                                                        13
    Section F.  Administration and Interpretation                           13
    Section G.  Funding of Benefits/General Creditor Status                 15
    Section H.  Governing Law                                               15


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                      DIRECTORS' LONG-TERM INCENTIVE PLAN
                                       OF
                       KRISPY KREME DOUGHNUT CORPORATION


         THIS DIRECTORS' LONG-TERM INCENTIVE PLAN OF KRISPY KREME DOUGHNUT
CORPORATION is adopted this the 10th day of February, 1993, effective as of the
30th day of January, 1993, by Krispy Kreme Doughnut Corporation, a North
Carolina corporation with its principal office and place of business in
Winston-Salem, Forsyth County, North Carolina for the benefit of the
Participants.

                              W I T N E S S E T H:

         WHEREAS, as members of the board of directors of Krispy Kreme, the
Participants receive an annual stipend for their services; and

         WHEREAS, beginning with the Stipend earned during and for the fiscal
year ending January 28, 1994, Krispy Kreme desires to provide Participants with
the opportunity to defer the receipt of all or part of their Stipend, with the
Deferred Amount to be credited on its books in Phantom Share Units in accordance
with the terms of the DLTIP; and

         WHEREAS, Krispy Kreme intends that the DLTIP be considered an unfunded
arrangement maintained to provide deferred compensation benefits to those
directors of Krispy Kreme who receive a stipend for their services as such.

         NOW, THEREFORE, the DIRECTORS' LONG-TERM INCENTIVE PLAN OF KRISPY KREME
DOUGHNUT CORPORATION is hereby adopted to read as follows:


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                                   ARTICLE I

         For the purposes of the DLTIP, the following terms shall have the
meanings shown below:

                                  DEFINITIONS

Account(s):                the account(s) on the books and records of the
                           Company to which are credited each Participant's
                           Deferred Amount, Units, the value of the Units and
                           other adjustments thereto under the DLTIP.

Board:                     the Board of Directors of Krispy Kreme Doughnut
                           Corporation.

Company:                   Krispy Kreme Doughnut Corporation

DLTIP:                     the Directors' Long-Term Incentive Plan of Krispy
                           Kreme Doughnut Corporation.

Deferred Amount:           the amount of any Stipend deferred by a Participant
                           pursuant to Article III of the DLTIP.

Krispy Kreme:              Krispy Kreme Doughnut Corporation

Market Value:              the current market price per share at which the stock
                           is being traded in the event of a public offering of
                           the stock [See Article VI B(2)]


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Participants:              the members of the board of directors of Krispy Kreme
                           who receive a Stipend for their services as such and
                           who may participate in the DLTIP.

Service Year:              the fiscal year.

Stipend:                   the amount of compensation that a Participant
                           receives for his services as a member of the Board of
                           Directors of Krispy Kreme from time to time.

Stock:                     the issued and outstanding $10.00 Par Value Common
                           Stock of the Company (as it subsequently may be split
                           or reclassified).

Stock Purchase Agreement:  the Stock Purchase Agreement dated July 1, 1984 by
                           and among Krispy Kreme and its shareholders (as it
                           may be amended from time to time).

Units:                     phantom share units as described in Article IV
                           (sometimes referred to as "Phantom Share Units").

                                   ARTICLE II
                                 PARTICIPATION

         Prior to the beginning of each of the Company's fiscal years for which
the DLTIP is in effect, the Board shall communicate to the Participants their
right to Participate in the DLTIP. Participants for the first fiscal year of the
DLTIP (fiscal year ending January 28, 1994) were notified of their participation
for such year on the date of the adoption of the DLTIP. Such Participants shall
be set forth on Schedules Al through A5 respectively.


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                                  ARTICLE III
                             DEFERRED COMPENSATION

         Section A. Amount of Deferred Compensation. Commencing with the fiscal
year ending January 28, 1994, and continuing through the earlier of the date on
which (1) a Participant's directorship terminates for any reason; (2) the
Participant ceases to be eligible under the terms of the DLTIP; or (3) the DLTIP
ceases to be in effect pursuant to Article VI, Section E, a Participant may
elect to defer all or any portion of any Stipend that the Company may pay to him
or her for each fiscal year. The Participants Deferred Amount shall be credited
to the Participant's Account as of the date or dates any Stipend would, but for
such deferral, be payable to the Participant which, for each Service Year, is
currently payable in one lump sum in advance on or about February 1.

         Section B. Election to Defer Compensation. A Participant may elect to
defer a portion of the Stipend earned during the fiscal year ending January 28,
1994 (until a date not later than the Participant's attainment of age 70) by
filing a written Election of Deferral with the Company within 90 days of the
date the DLTIP is adopted by the Company. A Participants initial Election of
Deferral shall continue in effect pursuant to the terms thereof for Deferred
Amounts for subsequent fiscal years unless and until the Participant files with
the Company a Notice of Discontinuance or a new Election of Deferral specifying
a different amount of, and/or method of payment of, Deferred Amounts. Each
Election of Deferral filed subsequently to the initial Election of Deferral
shall similarly continue in effect until the Participant files a Notice of
Discontinuance or a new Election of Deferral. With respect to fiscal years
beginning January 28, 1994, any new Election of Deferral or Notice of
Discontinuance must be filed at least 15 days prior to the commencement of a
fiscal Year to be effective for the Stipend earned during that fiscal year;
provided however, if Participant is not a director on the first day of a fiscal
year and becomes a director during the fiscal Year, such Election must be filed
within 45 days after he or she becomes a director. Once a Notice of
Discontinuance is filed with the Company, a aid thereafter unless and until he
or she has properly filed a new Election of Deferral.


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         The form of the Election of Deferral and Notice of Discontinuance are
attached hereto as Exhibits 1 and 2 respectively.

                                   ARTICLE IV
                        CREDITING OF PHANTOM SHARE UNITS

         Section A. Crediting of Phantom Share Units. Krispy Kreme shall
establish Accounts on its books for each Participant to record the Deferred
Amount credited to each Participant, as well as any adjustments as provided in
this Article. A separate Account shall be established for each fiscal year in
which a Participant elects to defer a portion of his or her Stipend pursuant to
Article III.

         The time of Crediting of the Deferred Amounts is more Particularly set
forth in Article III Section A. With respect to each fiscal year, the Deferred
Amount credited to a Participant's Account shall be converted into Units by
dividing the Deferred Amount by the value of Krispy Kreme Stock, as described
more particularly as follows: The number of Units credited to the Participant's
Account shall equal the Deferred Amount divided by an amount equal to the
average of the of the value of the Company's Stock under the Stock Purchase
Agreement as of the end of the last five fiscal years (prior to the fiscal year
for which the Deferred Amount was earned), or, if the DLTIP has not been in
existence five years or the Participant has not been a director for five years,
the average of the value of the Company's Stock under the Stock Purchase
Agreement for fiscal years ending after the later of January 29, 1993, or the
initial date of the Participant's directorship and following. For example, for a
Stipend payable for fiscal year ending January 26, 1996, the number of Units
shall equal the Deferred Amount divided by the average of the value of the
Company's Stock under the Stock Purchase Agreement as of the end of the fiscal
years ended January 29, 1993, January 28, 1994 and January 27, 1995. For another
example, for a Stipend payable for the fiscal year ending January 28, 1994, the
number of Units shall equal the Deferred Amount divided by the value of the
Company's Stock under the Stock Purchase Agreement as of the end of the fiscal
year ending January 29, 1993.



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         Credit shall be given to Accounts for fractional Units.

         Section B. Additions to Deferred Amounts. Krispy Kreme will credit all
Units in a Participant's Accounts with additions thereon from and after the
dates Deferred Amounts are credited to a Participant's Accounts. Except as
otherwise specifically provided herein, such additions shall accrue commencing
on the date an Account first has a positive balance and shall continue up to the
date all amounts credited to the Account have been distributed to the
Participant, except as otherwise provided in the DLTIP. Additions shall be
calculated at a rate computed in whole or fractional Units, as more particularly
described below.

         (1)      Each time a dividend is paid on Krispy Kreme's Stock, there
                  shall be credited to each Participant's Accounts an amount
                  equal to the product of the number of Units previously
                  credited to the Accounts, as of the record date of such
                  dividend, times the amount of the dividend per share of Krispy
                  Kreme's Stock. The amount credited to a Participant's Accounts
                  pursuant to the preceding sentence shall then be converted
                  into Units by dividing the amount so credited by the value of
                  Stock in the same manner as set forth in Section A above as if
                  the dividend credit were a Stipend.

         (2)      After the close of each Fiscal Year, Krispy Kreme's certified
                  public accountants shall determine during their regular annual
                  audit of the Company's books the value of Krispy Kreme Stock
                  pursuant to the Stock Purchase Agreement for the most recently
                  ended fiscal year. Based on such determination, the value of
                  the Units in-a each of a Participant's Accounts as of the end
                  of the most recently ended fiscal year shall be recalculated
                  by multiplying the number of Units credited to such
                  Participant's Accounts as of the end of such fiscal year times
                  the value of the Units as determined by the accounting firm.

         (3)      The number of Units in each of a Participant's Accounts shall
                  be adjusted (as though each Unit were a share of Krispy Kreme
                  Stock) to reflect stock dividends



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                  or stock splits of Krispy Kreme Stock or any other adjustment
                  or recapitalization affecting the number of shares of Krispy
                  Kreme Stock outstanding.

         Section C. Valuation of Units. As indicated above,, the number of Units
awarded under the Plan and the value of those Units shall be determined based on
the book value of the Company's Stock, as determined pursuant to the Stock
Purchase Agreement. The Company reserves the right, however, to revise the
method used to determine the value of Units; provided, however, that any change
in the method of valuation must be identical to the method of valuation used for
determining the value of the actual shares of the Company's Stock.

                                   ARTICLE V
                            DISTRIBUTION OF BENEFITS

         Section A. Normal Distribution of Benefits. As part of the Election of
Deferral made pursuant to Article III, a Participant shall make a separate
election regarding how and when Deferred Amounts credited to his or her Account
shall be distributed to him. The Participant may elect one of the following
options:

         (1)      a lump sum payment made no earlier than the fifth anniversary
                  of the crediting of. the Deferred Amount;

         (2)      five consecutive annual installments commencing no earlier
                  than the fifth anniversary of the crediting of the Deferred
                  Amount; and

         (3)      ten consecutive annual installments commencing no earlier than
                  the fifth anniversary of the crediting of the Deferred Amount.

The time of Crediting of the Deferred Amounts is more Particularly set forth in
Article III Section A. With respect to each installment payment, the amount of
such payment shall be determined by dividing the value of the Account by the
number of payments remaining


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(including the installment for which the calculation is being made). At the time
of each installment payment the value of the Account shall be determined by
multiplying the number of Units in the Participant's Account by the value of the
Stock as of the end of the most recently ended fiscal quarter, as determined
under the Stock Purchase Agreement. At the time of such a payment, the number of
Units in the Account shall be reduced by a number equal to the result of
dividing the total number of Units remaining in the Account by the number of
remaining payments (including the installment for which the calculation is being
made).

         Regardless of the method of payment elected by the Participant,
distributions must commence no later than within a reasonable time following the
end of the fiscal year in which a Participant attains age 70.

         Section B. Distribution Upon Death. If a Participant dies prior to the
distribution of all amounts credited to his or her Accounts, the value of his or
her Accounts shall be recalculated by multiplying the number of Units then
credited to each of his or her Accounts by the value of the Stock, as determined
under the Stock Purchase Agreement, as of the most recently ended fiscal quarter
preceding his or her death. Upon the death of a Participant, there shall be no
further credits (or debits) to his or her Accounts on account of dividends or
increases (or decreases) in the value of Krispy Kreme Stock. Notwithstanding the
provisions of a Participant's Election of Deferral made pursuant to Article III,
the amounts credited to his or her Accounts after such recalculation shall be
distributed to the Participant's designated beneficiary in a lump sum at a time
determined by the Company in its sole discretion, but no later than one year
after the date of the Participant's death.

         Notwithstanding the preceding paragraph, the Company may in its sole
discretion distribute the amounts credited to a Participant's Accounts in
installment payments over a period not to exceed five years, the amount of such
installment payments to be calculated in accordance with Article V, Section A
above. Simple interest shall be credited annually to the Participant's Accounts
from the date of death until the date installment payments are completed at the
prime rate of the Company's primary bank.


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         The portion of any Stipend awarded after a Participants death which the
Participant had elected to defer under the DLTIP shall be paid in a lump sum at
the time that the Stipend would have been paid had the Election of Deferral not
been made. See Article III Section A.

         Each Participant may designate a person or persons, including a
corporation, unincorporated association or trust, as the beneficiary of his or
her Accounts under the DLTIP. Such designation must be in writing, signed by the
Participant and delivered to the Company prior to his or her death. A
Participant may from time to time revoke or change any such beneficiary
designation. Such revocation or change must have been made in writing, signed by
the Participant and delivered to the Company prior to his or her death. The
designation of beneficiary last delivered to Krispy Kreme according to its
records shall control.

         If there is no unrevoked designation on file with the Company at the
time of a participant's death or if the Participant's designated beneficiary
shall have predeceased the Participant or ceased to exist prior to the
Participant's death, the Participant's Accounts shall be distributed to his or
her estate.

         The form of a Beneficiary Designation is attached hereto as Exhibit 3.

         Section C. Distribution Upon Termination of Directorship. Upon
termination of a Participant' s directorship for any reason other than death,
the value of his or her Accounts shall be recalculated by multiplying the number
of Units credited to his or her Accounts by the value of the Stock as of the end
of the most recently ended fiscal quarter, as determined under the Stock
Purchase Agreement. Thereafter, there shall be no further credits (or debits) to
his or her Accounts on account of dividends or increases (or decreases) in the
value of Krispy Kreme Stock. Regardless of the provisions of a Participant's
Election of Deferral made pursuant to Article III, the amounts credited to his
or her Accounts pursuant to such recalculation shall be distributed to him or
her in a lump sum cash payment at a time determined by the Company in its sole
discretion, but no later than six months after the termination of the
Participant's directorship.


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         Notwithstanding the preceding paragraph, the Company may in its sole
discretion distribute the amounts credited to a Participant's Accounts in
installment payments over a period not to exceed five years, the amount of such
installment payments to be calculated in accordance with Article V., Section A
above. Simple interest shall be credited annually to the Participant's Accounts
from the time his or her directorship terminates until the date installment
payments are completed at the prime rate of the Company's primary bank. There
shall be no dividend credits or other increases in the value of a Participant's
Accounts following his or her termination of directorship.

         Section D. Distribution Upon Financial Emergency. If a Participant
establishes, to the satisfaction of the Company, that he or she is confronted by
a severe financial. hardship, the Company, in its sole discretion, may alter the
timing or manner of payment of Deferred Amounts in the manner and subject to the
conditions set forth hereafter:

         (1)      A severe financial hardship will be deemed to exist only if it
                  arises out of an emergency caused by circumstances or events
                  which are beyond the control of the Participant. A severe
                  financial hardship will be deemed to have occurred in the
                  event of the Participant's impending bankruptcy, serious
                  illness of the Participant or a dependent of the Participant,
                  or such other circumstances or events as may be determined by
                  the Company to affect severely the financial affairs of the
                  Participant or his or her immediate family.

         (2)      In the event that the Company determines that the Participant
                  is confronted by a severe financial hardship, the Company may
                  provide that all or a portion of the amounts previously
                  deferred by the Participant may be paid immediately in a lump
                  sum cash payment, or provide that all or a portion of the
                  installments payable over a period of time may be paid
                  immediately in a lump sum cash payment, or provide such other
                  payment schedule as the Company deems appropriate under the
                  circumstances.


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         (3)      In no event shall any distribution made by the Company under
                  this Subsection be in excess of the amount necessary to
                  alleviate the Participant's severe financial hardship.

         (4)      The Company's decision in passing on the severe financial
                  hardship of the . Participant, and the manner in which, if at
                  all, the payment of deferred amounts shall be altered or
                  modified shall be final, conclusive, and not subject to
                  appeal.

         (5)      For purposes of this Subsection, the term "Participant" shall
                  include the Participant, his or her designated beneficiary or
                  beneficiaries, his or her estate, or any other person claiming
                  through the Participant under this Plan as the case may be.

         Section E. Withholding From Distributions. When Krispy Kreme
distributes amounts credited to the Account of a Participant, Krispy Kreme has
the right to deduct therefrom (1) necessary amounts to provide for withholding
of required federal and state income taxes, F.I.C.A. tax, and other taxes, if
any, due on the payment; and (2),any amounts the Participant may owe the
Company. If a distribution is to be made in a form other than cash pursuant to
Article VI, Section B(3), a Participant may direct Krispy Kreme to satisfy its
withholding obligation either by reducing the amount of the distribution or in
any other manner satisfactory to the Company.

                                   ARTICLE VI
                                 MISCELLANEOUS

         Section A. Nonassignability. The payments provided for in this DLTIP to
the Participant or to his or her designated beneficiary are personal to him or
her. Neither the Participant nor his or her designated beneficiary shall have
any power or right to transfer, assign, anticipate, hypothecate or otherwise
encumber any part or all of the amounts payable hereunder.


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Such amounts shall not be subject to seizure by any creditor of any Participant
or beneficiary, by a proceeding at law or in equity, nor transferable by
operation of law in the event of the bankruptcy, insolvency or death of the
Participant or his or her designated beneficiary. Any such attempted assignment
or transfer shall be void and shall terminate the Participant's rights under the
Plan.

         Section B.  Sale, Public Offering, Merger or ESOP.

         (1)      Except as provided in Article VI Section B (3) below, if the
                  majority of the Stock of the Company is sold for cash, whether
                  pursuant to a sale of Stock, tender offer or merger, the value
                  of the Units in a Participant's Accounts shall be revalued as
                  of the effective date of such transaction by multiplying the
                  number of Units in each Account as of the day prior to the
                  effective date of such transaction by the consideration paid
                  in such transaction per share of Stock. The balance of each
                  Participants Accounts after such recalculation (less the
                  required withholding, if any) shall be distributed in full in
                  a lump sum to the Participants within sixty (60) days
                  thereafter.

         (2)      If there is a public offering of the Stock of Krispy Kreme,
                  there shall be no immediate change in the valuation of a
                  Participant's Accounts. On the first anniversary date of the
                  public offering, however, a Participant's Accounts shall be
                  revalued by multiplying the number of Units in the
                  Participants Accounts as of the date of the public offering
                  times the sum of (a) the value of each Unit immediately prior
                  to the public offering, plus (b) one-third of the difference
                  between the Market Value at such anniversary immediately prior
                  to the public offering. On the second anniversary date of the
                  public offering, a Participant's Accounts shall be revalued by
                  multiplying the number of Units in the Participant's Accounts
                  as of the public offering date times the sum of (a) the value
                  of each Unit immediately prior to the public offering, plus
                  (b) two-thirds of the difference between the Market Value at
                  such anniversary and the value of a Unit immediately prior to
                  the


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                  public offering. On the third anniversary date of the public
                  offering, a Participant's Accounts shall be revalued by
                  multiplying the number of Units in the Participant's Accounts
                  as of the public offering date times the Market Value at such
                  anniversary. Thereafter, the value of the Participant's
                  Accounts shall be at all times be determined by multiplying
                  the number of Units in the Accounts by the Market Value of the
                  Stock.

                  Notwithstanding the above, the valuation of all Units paid out
                  on account of (a) the cessation of the Participants
                  directorship; or (b) death shall be determined by multiplying
                  the number of Units for which payment is made by the Market
                  Value as of the date of distribution.

                  If (a) a Participant is scheduled to receive a distribution
                  from the Plan after the date of the public offering but prior
                  to the date on which all Units credited under the Plan are
                  first valued based solely on the Market Value of the Company's
                  Stock (third anniversary of public offering) pursuant to an
                  Election of Deferral made pursuant to Article III, and (b) the
                  Participant is a director of the Company on the date of the
                  public offering, the Participant may elect to defer the
                  payment of all amounts scheduled to be distributed to him or
                  her -until the third anniversary date of the public offering.
                  Any amounts so deferred shall be distributed upon the
                  occurrence of the third anniversary date of the public
                  offering revalued by multiplying the number of Units in the
                  Participant's Accounts times the Market Value as of the date
                  of distribution.

                  Notwithstanding any of the above, the Board shall have
                  discretion to accelerate the date upon which the value of a
                  Participant's Accounts is based on the publicly traded price
                  of the Company's Stock.

                  At all times following a public offering, the Participant's
                  Accounts shall continue to be credited with dividends pursuant
                  to the terms of the DLTIP. The DLTIP


<PAGE>   16

                  shall be amended following a public offering to provide for a
                  method of awarding Units based on a market valuation of the
                  Stock, as opposed to the valuation method in effect prior to
                  the public offering.

         (3)      In the event of a merger or similar transaction in which any
                  securities of the acquiring entity (or an affiliate thereof)
                  are to be issued to shareholders of Krispy Kreme in exchange
                  for their Stock, then

                  (a)      the Units in each of a Participant's Accounts shall
                           be revalued prior to the record date for such merger
                           or other transaction by multiplying the number of
                           Units therein times tae value of the Stock under the
                           Stock Purchase Agreement as of the end of the most
                           recently ended fiscal quarter, and

                  (b)      the Units shall be converted into Stock on the basis
                           of one share of Stock for one Unit so that the
                           Participant shall be shareholder of record for such
                           transaction and have the right to receive securities
                           or other consideration in such transaction in the
                           same fashion as other shareholders of Krispy Kreme.
                           Certificates for Stock shall be issued in the name of
                           the Participant. Fractional Units shall not be issued
                           and the value thereof shall be paid to the
                           Participant in cash.

                  (c)      Thereafter, the successor entity to Krispy Kreme
                           shall at its discretion (1) terminate the DLTIP and
                           immediately pay out all Accounts hereunder; (2)
                           freeze the DLTIP so that no additional Deferred
                           Amounts are credited to any Participant, but the
                           remaining provisions of the DLTIP remain in effect;
                           or (3) continue the DLTIP in all respects. If the
                           successor entity elects to freeze or continue the
                           DLTIP, each Participant shall have the right to
                           request and receive a distribution of his or her
                           Accounts by so electing prior to the date oil which
                           the events described in this Section



<PAGE>   17

                           B(3) occur. The amount of any such distribution shall
                           be computed in accordance with subsections (a) and
                           (b) of this Section.

         (4)      If Krispy Kreme establishes an Employee Stock Ownership Plan
                  ("ESOP"), the valuation of all Units under the DLTIP for all
                  purposes after the adoption of tae. ESOP shall be made using
                  the appraised value of the Stock under the ESOP.

         Section C. Scope of DLTIP. This DLTIP describes only the deferral of
Stipend payments to be main to a Participant and the eventual payment thereof.
It is not intended to and does not relate to any other benefits to which a
Participant may be entitled. Nothing in this DLTIP shall be deemed to constitute
a contract on behalf of Krispy Kreme to retain a Participant for a definite
length of time, as a director, or at a definite rate of compensation, and
agreements by the parties as to those matters, if any, shall be covered by other
contracts or arrangements.

         Section D. Vesting. A Participant shall always be fully vested in all
Deferred Amounts, dividends and other amounts credited to his or her Accounts.

         Section E. Term. The DLTIP shall be applicable to the Stipends for
fiscal years beginning with the fiscal year ending January 28, 1994; provided,
however, that the Board may terminate the DLTIP at any time. If the DLTIP is
terminated,, all amounts credited to a Participant's Accounts under Article IV
shall be paid at the time and in the manner designated by the Participant or
otherwise provided hereunder. In such event, the provisions of Article IV
including, but not limited to, Article IV, Section B(l) (with respect to
dividends) and Article IV, Section B(2) (with respect to the recalculation of
the value of the Units) shall continue to apply to all amounts credited to each
Account until paid.

         Section F. Administration and Interpretation. A Committee appointed by
the Board of Directors (the "Committee") shall administer the Plan in all
respects. The Committee has absolute and complete discretion to interpret the
terms of the Plan, to determine each



<PAGE>   18

Participant's eligibility for benefits under the Plan, and to determine the
amount of benefits due under the Plan.

         (1)      Claims. A person who believes that he or she is being denied a
                  benefit to which he or she is entitled under the Plan
                  (hereinafter referred to as "Claimant") may file a written
                  request for such benefit with the Committee,, setting forth
                  his or her claim. The request must be addressed to the
                  Committee at the Company's principal place of business.

         (2)      Claim Decision. Upon receipt of a claim, the Committee shall
                  advise the claimant that a reply will be forthcoming within 90
                  days and shall in fact, deliver such reply within such period.
                  The Committee may, however, extend the reply period for an
                  additional 90 days for reasonable cause.

                  If the claim is denied in whole or in part, the Committee
                  shall adopt a written opinion, using language calculated to be
                  understood by the Claimant, setting forth:

                  (a)      The specific reason or reasons for such denial;

                  (b)      The specific reference to pertinent Provisions of
                           this Plan on which such denial is based;

                  (c)      A description of any additional material or
                           information necessary for the Claimant to perfect his
                           or her claim and an explanation why such material or
                           such information is necessary;

                  (d)      Appropriate information as to the steps to be taken
                           if the Claimant wishes to submit the claim for
                           review; and


<PAGE>   19

                  (e)      The time limits for requesting a review under
                           subsection c. and for review under subsection d.
                           hereof

         (3)      Request for Review. Within 60 days after the receipt by the
                  Claimant of the written opinion described above, the Claimant
                  may request in writing that the Company review the
                  determination of the Committee. Such request must be addressed
                  to the Company, at its then principal place of business. The
                  Claimant or his or her duly authorized representative may, but
                  need not, review the pertinent documents and submit issues and
                  comments in writing for consideration by the Company. If the
                  Claimant does not request a review of the Committee's
                  determination by the Company within such 60 day period, he or
                  she shall be barred and estopped from challenging the
                  Committee's determination.

         (4)      Review of Decision. Within 60 days after the Company's receipt
                  of a request for review, it will review the Committee's
                  determination. After considering all materials presented by
                  the Claimant, the Company will render a written opinion,
                  written in a manner calculated to be understood by the
                  Claimant, setting forth the specific reasons for the decision
                  and containing specific references to the pertinent provisions
                  of this Plan on which the decision is based. If special
                  circumstances require that the 60 day time period be extended,
                  the Company will so notify the Claimant and will render the
                  decision as soon as possible, but no later than 120 days after
                  receipt of the request for review.

         Section G. Funding of Benefits/General Creditor Status. The amounts
credited to each Participant's accounts shall not be held in any trust or
separate fund that would cause the Plan to be considered "funded" for purposes
of ERISA. Such amounts shall not be secured by any specific assets of the
Company nor shall any specific assets of Krispy Kreme be designated as allocated
to the satisfaction of its obligations to any Participant hereunder. Each
Participant's


<PAGE>   20

right to receive payment for amounts credited to his or her Accounts shall be
those of a general creditor of the Company.

         Section H. Governing Law. This DLTIP shall be construed in accordance
with and governed by the laws of the State of North Carolina.

         IN WITNESS WHEREOF, the Company has cause the DLTIP to be executed in
its name and behalf by its duly authorized representative as of the date written
above.

                                    KRISPY KREME DOUGHNUT CORPORATION

                                    By:  /s/ Scott A. Livengood
                                         Scott A. Livengood, President

ATTEST:

/s/  John L. Barber
John L. Barber, Assistant Secretary


<PAGE>   21

                                  Schedule Al
                                  Participants
                      Fiscal Year Ending January 28, 1994





Name:



         Robert J. Simmons

         Steven D. Smith


Note:    Elbert N. Herring is a participant in the Employees Long Term Incentive
         Plan



<PAGE>   22

                                  Schedule A2
                                  Participants
                      Fiscal Year Ending January 27, 1995


<PAGE>   23

                                  Schedule A3
                                  Participants
                      Fiscal Year Ending January 26, 1996

<PAGE>   24

                                  Schedule A4
                                  Participants
                       Fiscal Year Ending January 31,1997

<PAGE>   25

                                  Schedule A5
                                  Participants
                      Fiscal Year Ending January 30, 1998

<PAGE>   26

                                   EXHIBIT 1
                              ELECTION OF DEFERRAL
                                     UNDER
                      DIRECTORS' LONG-TERM INCENTIVE PLAN
                                       OF
                       KRISPY KREME DOUGHNUT CORPORATION

                      ____________________________________


I hereby make the following elections under the Long-Term Incentive Plan with
respect to my Stipend commencing with the Stipend for the fiscal year ending
January ___,199__. I understand that such elections shall remain in effect
unless and until a new Election of Deferral or Notice of Discontinuance is
properly filed. Any new Election of Deferral or Notice of Discontinuance shall
have no effect on amounts previously deferred under the Plan.

I.       Deferred Compensation Election

         I elect to defer ____% of my Stipend under the Directors' Long-Term
         Incentive Plan in excess of $__________, to be paid out as follows:

         [ ] Lump sum payable on _________________ of the _______ year
             following Stipend is credited to my Account*;

         [ ] Five consecutive annual installments commencing ______*; or

         [ ] Ten consecutive annual installments commencing ______*.

No payment shall be made earlier than the fifth anniversary of the crediting of
the portion of the Stipend so deferred to my Account; PROVIDED, HOWEVER,
distributions must commence no later than within a reasonable time following the
end of the fiscal year in which a Participant attains age 70.

*The Stipend so deferred is credited to my Account at the time the Stipend would
have been paid to me had it not been deferred which, for each Service Year, is
currently payable in one lump sum in advance on or shortly before the annual
meeting of shareholders on which such Service Year begins.

II.      Lump Sum Cash Payment

         I elect to receive ______________% or $____________ of my Stipend
         commencing with the Stipend for the fiscal year ending January ____,
         199__ in cash, to be paid in one lump sum payment at the normal time
         for the payment of the Stipend.

         PARTICIPANT

         _______________________(SEAL)        __________________
                                                     Date

Receipt by Krispy Kreme Doughnut Corporation Acknowledged

By: ____________________________              __________________
                                                     Date


<PAGE>   27

                                   EXHIBIT 2

                            NOTICE OF DISCONTINUANCE
                                       OF
                              ELECTION OF DEFERRAL
                                     UNDER
                      DIRECTORS' LONG-TERM INCENTIVE PLAN
                                       OF
                       KRISPY KREME DOUGHNUT CORPORATION

                      ____________________________________


I do hereby revoke my Election of Deferral dated __________, 199___. I
understand that 100 % of any Stipend paid to me for fiscal years beginning after
this revocation shall be paid to me in cash at the normal time for payment of
the Stipend under the Company's directors compensation policy.

This the ____ day of _________________, 199___.


                                             PARTICIPANT


                                             ___________________________________


Receipt on behalf of Krispy Kreme Doughnut Corporation acknowledged


By _____________________________
Title __________________________


Dated _______ day of ________________, 199____


<PAGE>   28

                                   EXHIBIT 3

                            BENEFICIARY DESIGNATION
                                     UNDER
                      DIRECTORS' LONG-TERM INCENTIVE PLAN
                                       OF
                       KRISPY KREME DOUGHNUT CORPORATION

                      ____________________________________



If I die prior to receiving all of amounts credited to my Accounts under the
Directors' Long-Term Incentive Plan and any future amendments or restatements
thereof or successor plans thereto (the "DLTIP"), I hereby designate the
following primary beneficiary as recipient of such benefits:

                                                              Relation to
         Name                       Address                   Participant
         ----                       -------                   -----------

________________________   _________________________   _________________________

________________________   _________________________   _________________________

In the event the above-named primary beneficiary fails to survive me or
otherwise ceases to exist prior to the date of my death, I hereby designate the
following contingent beneficiary as recipient of such benefits:

                                                              Relation to
         Name                       Address                   Participant
         ----                       -------                   -----------

________________________   _________________________   _________________________

________________________   _________________________   _________________________



I do hereby revoke all previous beneficiary designations made under the DLTIP
and I understand that the above designations are revocable by me at any time
prior to my death. This Beneficiary Designation is not valid until delivered to
and acknowledged by Krispy Kreme Doughnut Corporation.



___________________________________         ______________________________(SEAL)
Date                                        Participant

WITNESSED BY:

___________________________________

Receipt by Krispy Kreme Doughnut Corporation Acknowledged

By: _______________________________
Dated: _____ day of _______________, 19__.