EXHIBIT 10.3

RELEASE AND SEVERANCE
AGREEMENT

     THIS RELEASE AND SEVERANCE AGREEMENT
(the “Agreement”) is made and entered into this the 23 day of August, 2007 by
and between Jeff Jervik, of c/o 370 Knollwood,
Suite 500, Winston-Salem, NC 27103 (the “Employee”), and Krispy Kreme Doughnut
Corporation, a North Carolina corporation, with its principal place of business
located in Forsyth County, North Carolina (the “Employer”).

     1. Termination. Employee’s employment with the Employer is
hereby terminated, not for misconduct, effective as of August 31, 2007 (“the
Termination of Employment Date”). Employee’s participation in the Employer’s
employee benefits plans and programs shall cease as of the Termination of
Employment Date, except (a) that Employee’s benefits under the Employer’s group
health insurance plan will continue at the Employer’s expense as the premiums
have been or will be provided through the last day of the month in which the
Termination of Employment Date occurs and (b) that Employee’s vested benefits
under any retirement plan remain vested in accordance with the provisions of the
Employer’s retirement plans. Employee will receive, by separate letter, a notice
of his opportunities to continue to participate in the Employer’s health
insurance plan through the provisions of COBRA, and Employee may elect to
continue his health insurance coverage in accordance with the provisions of that
notice and applicable law. Employee’s participation in the various benefit plans
of the Employer shall cease in accordance with the terms of the respective
plans, except as otherwise agreed herein.

     2. Salary. Effective with the paycheck to be delivered to
Employee on August 22, 2007, Employee will be paid all salary and wages for the
period through the Termination of Employment Date. Employee acknowledges that he
does not have any unused vacation for which he has not previously been
paid.

     3. Consideration
for this Agreement. In consideration of Employee’s execution of this
Agreement on or before August 23, 2007, Employer agrees to pay to Employee
severance benefits in the amount of Employee’s current base salary for a period
of six months from and after the Termination of Employment Date, with such
payments totaling in the aggregate One Hundred and Seventy Thousand and 00/100
dollars ($170,000.00) and if, from and after the six month anniversary of the
Termination of Employment Date, Employee has not begun employment with another
employer after conducting diligent efforts to do so, Employer will continue to
pay Employee the amount of his current base salary on a month-by-month basis as
long as he remains unemployed in spite of diligent efforts to find employment
acceptable to him, up to a maximum of an additional six month period after said
six month anniversary (in the aggregate, the “Severance Payment”). Employee
acknowledges that this Severance Payment is in excess of any compensation to
which he would otherwise have been entitled.

     4. Taxes,
Withholding, and Payment Date. The Severance Payment
described in paragraph 2 will be subject to normal withholdings as required or
authorized by state and federal law. Provided that Employee timely executes this
Agreement, Severance Payments will follow the Employers monthly payroll schedule
to Employee at his last known address, or at such other address as provided by
Employee.

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     5. The Employer will not oppose any
application for unemployment compensations benefits which Employee may
make.

     6. In the event that a prospective
employer of employee contacts Employer concerning Employee, Employer will
provide that prospective employer solely with information as the Employee’s
dates of service and title.

     7. In the event that any third party
should make any claim or commence any legal action against Employee for his
conduct as an employee of Employer, Employer shall indemnify Employee for all
costs attorney’s fees and damages incurred by him in defending against that
claim or legal action, to the same extent as it would indemnify any
employee.

     8. Exclusivity of
Consideration. Except as set forth in the preceding paragraphs, neither the
Employer nor any of the Released Parties (defined in paragraph 10) shall have
any obligation to make any further payments to or for the benefit of
Employee.

     9. General Release by
Employer.

     Employer hereby releases and forever
discharges Employee, his past, present and future successors and assigns, of and
from any manner of action, cause of action, in law or in equity, suit, debt,
lien, contract, agreement, promise, liability, claim demand, damage, loss, cost
or expense, of any nature, whatsoever, known or unknown, fixed or contingent,
which Employer now has or may hereafter have against Employee, by reason of any
matter, cause, or thing whatsoever from the beginning of time to the date
Employer signs this Agreement. Notwithstanding the foregoing, the Employer is
not waiving its rights to the consideration referred to in this
Agreement.

     10. General Release by
Employee.

     (a) Employee hereby releases and
forever discharges Employer, its past, present and future parents, subsidiaries,
divisions, affiliates, and its and their respective predecessors, successors and
assigns, and each of their past, present and future employees, officers,
directors, agents, insurers, employee welfare benefit plans, employee pension
benefit plans and deferred compensation plans, and their trustees,
administrators and other fiduciaries, and all persons acting by, through, under
or in concert with them, or any of them (the “Released Parties”), of and from
any manner of action, cause of action, in law or in equity, suit, debt, lien,
contract, agreement, promise, liability, claim, demand, damage, loss, cost or
expense, of any nature whatsoever, known or unknown, fixed or contingent
(hereinafter called “Claims”), which Employee now has or may hereafter have
against the Released Parties, or any of them, by reason of any matter, cause, or
thing whatsoever from the beginning of time to the date Employee signs this
Agreement. Employee understands that this release includes, without limitation,
all Claims Employee may have:


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  relating to Employee’s hire, employment,
  remuneration (including salary, bonus, incentive or other compensation, stock
  options, vacation, sick leave,
  health insurance benefits, benefits from any employee stock ownership, stock
  option plans, profit-sharing and/or deferred compensation plan) or termination
  of employment by the Employer;

  
	
  or retaliation under any law alleging
  discrimination (including any Claims under Title VII of the Civil Rights Act
  of 1964, as amended; the Civil Rights Act of 1991; the Civil Rights Act of
  1866, as amended; the Consolidated Omnibus Budget Reconciliation Act; the Age
  Discrimination in Employment Act, as amended; the Employee Retirement Income
  Security Act, as amended; the Americans with Disabilities Act; and other state
  employment discrimination statutes; applicable state wage and hour statutes;
  and/or any other local, state or federal law governing discrimination or
  retaliation in employment and/or the payment of wages or benefits);

  
	
  arising under any contract, express or implied (including, but
  not limited to that certain Employment Agreement, effective the 26th day of October 2005, by and between Employer and
  Employee), tortious conduct, or arising under federal, state or, local
  law.



In giving this release,
Employee forever releases and gives up Employee’s employment rights and employee
status with the Released Parties and each of them. Notwithstanding the
foregoing, the Employee is not waiving Employee’s rights to the payments or
benefits described in paragraph 1-3 above.

     (b) The parties further agree that
this General Release does not affect Employee’s benefits under the Employer’s
group health insurance plan through the Termination of Employment Date and
thereafter under COBRA, and it does not affect Employee’s accrued benefits that
are vested as of the Termination of Employment Date under any retirement plan
sponsored by Employer. The parties also agree that this release does not affect
Employee’s vested stock options, if any, under any applicable stock option
grant, plan, or agreement for Krispy Kreme Doughnuts, Inc. stock, which vested
stock options, if any, shall remain subject to the terms of the applicable stock
option grant, plan or agreement.

     (c) IN ACCORDANCE WITH THE OLDER
WORKERS BENEFIT PROTECTION ACT OF 1990, EMPLOYEE IS AWARE OF THE FOLLOWING WITH
RESPECT TO HIS RELEASE OF ANY CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT (“ADEA”):

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	     	(1)	     	EMPLOYEE HAS
      BEEN ADVISED THAT EMPLOYEE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY
      BEFORE SIGNING THIS AGREEMENT;
		 
		(2)		SOME OF THE
      CONSIDERATION EMPLOYEE IS RECEIVING FOR THIS RELEASE IS IN ADDITION TO
      ANYTHING OF VALUE TO WHICH EMPLOYEE IS OTHERWISE ENTITLED TO
      RECEIVE.
				 


	     	(3)	     	EMPLOYEE HAS BEEN ADVISED THAT
      EMPLOYEE HAS AT LEAST TWENTY-ONE (21) DAYS TO CONSIDER THIS
      AGREEMENT;
		  
		(4)		EMPLOYEE HAS SEVEN (7) DAYS AFTER
      SIGNING THIS AGREEMENT TO REVOKE THIS AGREEMENT, AND THIS AGREEMENT WILL
      NOT BE EFFECTIVE UNTIL THE EIGHTH DAY FOLLOWING EMPLOYEE’S SIGNING THIS
      AGREEMENT.


     (d) Employee represents and warrants
that Employee has not assigned or transferred to any third party any interest in
any Claim which he may have against the Released Parties, or any of them, and
Employee agrees to indemnify and hold the Released Parties, and each of them,
harmless from any liability, claims, demands, damages, costs, expenses, and
attorneys' fees incurred by them, or any of them, as a result of any such
assignment or transfer. It is the intention of the parties that this indemnity
does not require payment as a condition precedent to recovery by the Released
Parties against Employee under this indemnity.

     (e) Employee represents and warrants
that Employee has not asserted, filed or otherwise taken actions to initiate any
Claim in any federal, state or local court, administrative agency, or other
forum.

     (f) Employee shall not commence or
join in any lawsuit or administrative proceeding asserting any Claim released
hereunder, or in any manner seek or accept any relief from any Released Party
with respect to any Claim released hereunder.

     11. Unfair Competition. While
employed by Employer, Employee acknowledges that Employee was provided with
access to confidential and secret knowledge or information of the Employer and
with access to the Employer’s business methods and plans, was provided with
access to the Employer’s customers and employees, and was provided with
specialized training by Employer. To protect the Employer’s legitimate rights in
its confidential and secret knowledge or information, business methods and
plans, customers and customer relationships, employees and employee
relationships, and specialized training, Employee covenants that for twelve (12)
months following termination of Employee’s employment, Employee shall
not:

	          	(a)	     	solicit the Employer’s customers
      for the purpose of providing services similar to or competitive with those
      offered by Employer;
		(b)		encourage or induce any customer
      to reduce its business or relationship with the Employer;
		(c)		solicit any employee of the
      Employer on behalf of any other potential employer; or
		(d)		encourage or induce any employee
      of Employer to terminate his or her employment with the
  Employer.


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     12.
Confidentiality.

     (a) Except as permitted or directed
by the Employer, Employee shall not divulge, furnish or make accessible to
anyone or use directly to the detriment of the Employer in any way any
confidential or secret knowledge or information of the Employer which Employee
has acquired or become acquainted with during the term of his employment by the
Employer or any time thereafter, whether developed by himself or by others,
concerning any trade secrets, confidential financial information, confidential
or secret plans, or materials (whether or not patented or patentable) directly
or indirectly useful in any aspect of the business of the Employer, any
confidential information or secret aspects of the business of the Employer.
Employee acknowledges that the above-described knowledge or information
constitutes a unique and valuable asset of the Employer and represents a
substantial investment of time and expense by the Employer, and that any
disclosure or other use contrary to the provisions of this paragraph 12 of such
knowledge would be wrongful and would cause irreparable harm to the Employer.
The foregoing obligations of confidentiality shall not apply to any knowledge or
information which is now published or which subsequently becomes generally
publicly known or generally known in the trade other than as a direct or
indirect result of the breach of this Agreement by Employee.

     (b) The parties shall not disclose
the terms of this Agreement unless required to do so by law or applicable
regulation of governmental authority or pursuant to order of a court of
competent jurisdiction or as may be necessary to enforce this Agreement;
provided, however, Employee may disclose such terms in confidence to Employee’s
immediate family, attorneys and accountants and financial advisors on a need to
know basis provided that such persons also agree to this pledge of
confidentiality, and the Employer may disclose such terms in confidence to its
management personnel, directors, attorneys and accountants who have a legitimate
need to know. Employee may disclose the provisions pf paragraphs 11 and 12
hereof to his prospective, current or future employers.

     13 Non-Disparagement Covenant. Employee shall not make any
statement, publicly or privately, disparaging any of the Released Parties or
their business practices.

     14. Cooperation
Covenant. Employee agrees to cooperate fully, upon the reasonable
request of the Employer, and at times and places which are reasonably convenient
to Employee, in assisting the Employer with (i) investigating, prosecuting or
defending any claim or (ii) responding to or preparing for any government audit,
investigation or inquiry that, in either case, relates in any manner to
Employee’s employment with the Employer. Employee understands that such
cooperation includes being available to work with the Employer to investigate
and prepare for claims and to testify. The Employer will reimburse Employee for
reasonable out-of-pocket expenses Employee may incur in connection with such
cooperation.

     15. Breach of
Covenants. Employee agrees that the Employer will be irreparably
harmed by any violation or threatened violation of any of the provisions of
Paragraphs 11, 12, 13, or 14 hereof if such provisions are not specifically
enforced and that damages will not constitute an adequate remedy. Therefore,
Employee agrees that Employer shall be entitled to an appropriate and necessary
injunction restraining any violation of paragraphs 11, 12, 13, or 14 by Employee
(without any bond or other security being required), or any other appropriate
decree of specific performance. Such remedies shall not be exclusive and shall
be in addition to any other remedy to which such Employer may be entitled in law
or in equity.

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     12. Waiver of
Breach. A waiver by Employee or the Employer of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party, nor shall it operate as a general
waiver.

     13. Return of Property. Employee hereby
represents and warrants that Employee has returned to the Employer all Employer
property in Employee’s possession, custody or control, including without
limitation, any copies, summaries, analyses or other reproductions of the
Employer’s confidential business information, and that Employee has not
transferred to any other person any Employer property, including the Employer’s
confidential business information.

     14. Assignment
of Intellectual Property. Employee hereby assigns to Employer
irrevocably, the entire right, title, interest and ownership, and all subsidiary
and derivative rights of every kind and character, in and to any and all
Intellectual Property Made by Employee (alone or with one or more others) that
(a) was Made in the course of, or within the scope of, (i) services provided to
or requested by Employer, or (ii) Employee’s employment with the Employer, or
(b) relates in any way to the business of Employer (hereinafter, collectively,
“Assigned Intellectual Property”). The Employee agrees that all Assigned
Intellectual Property under this paragraph shall belong to and be the absolute
property of the Employer or such other entity as the Employer may designate, and
that this assignment relates to all Intellectual Property Made by Employee
during the course of his employment with the Employer. “Made” means without limitation “discovered, invented,
conceived, authored, written, derived, designed, reduced to practice,
constructed, used, created, drafted, disclosed, registered, obtained, described,
built, filed, or improved, directly or indirectly, in whole or in part.”
“Intellectual Property” means without limitation “any and all inventions,
discoveries, designs, patent applications, patents, trademarks (and good will
associated therewith), copyrights, works, trade secrets, and
know-how.”

     15. Enforcement
of Agreement. If any party to this Agreement brings an action to
enforce his, her or its rights hereunder, the prevailing party shall be entitled
to recover his, her, or its costs and expenses, including court costs and
attorneys’ fees, if any, incurred in connection with such suit to the extent
permitted by applicable law.

     16. Construction
of Agreement. This Agreement shall be construed as a whole in
accordance with its fair meaning and in accordance with the laws of the State of
North Carolina, without regard to choice of law principles. The language of this
Agreement shall not be construed for or against any particular party. The
headings used herein are for reference only and shall not affect the
construction of this Agreement.

     17. Severability; Enforceability. If any provision of this
Agreement, or the application thereof to any person, place, or circumstance,
shall be held to be invalid, unenforceable, or void by the final determination
of a court of competent jurisdiction and all appeals there from shall have
failed or the time for such appeals shall have expired, such clause or provision
shall be deemed eliminated from this Agreement but the remaining provisions
shall nevertheless be given full force and effect. In the event this Agreement
or any portion hereof is more restrictive than permitted by the law of the
jurisdiction in which enforcement is sought, this Agreement or such portion
shall be limited in that jurisdiction only, and shall be enforced in that
jurisdiction as so limited to the maximum extent permitted by the law of that
jurisdiction.

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     18. Entire Agreement. This
Agreement sets forth the entire agreement between the parties with respect to
the termination of Employee’s continued employment with the Employer and the
Employer’s obligations to Employee prior to such time, as well as following the
termination of said employment; and supersedes all other prior plans, policies,
agreements and arrangements between the parties or which have covered Employee
during his period of employment with the Employer, except as otherwise provided
herein.

     19. Amendment to Agreement.
Any Amendment to this Agreement must be in a writing signed by duly authorized
representatives of the parties hereto and stating the intent of the parties to
amend this Agreement.

     20. Assumption of Risk. The
parties hereto fully understand that if any fact with respect to any matter
covered by this Agreement is found hereafter to be other than, or different
from, the facts now believed to be true, they expressly accept and assume the
risk of such possible difference in fact and agree that the release provisions
hereof shall be and remain effective notwithstanding any such difference in
fact.

     IN WITNESS WHEREOF, the parties
hereto have executed this Agreement on the dates indicated below, effective as
of the Effective Date specified above.

KRISPY KREME DOUGHNUT
CORPORATION

	By: 	  	/s/ Kenneth
      Hudson 
			 
	Title: 		SVP Human
      Resources 
			 
	Date: 		August 23,
      2007 



YOU ARE HEREBY ADVISED BY
KRISPY KREME DOUGHNUT CORPORATION TO CONSULT WITH AN ATTORNEY BEFORE SIGNING
THIS GENERAL RELEASE AND SEVERANCE AGREEMENT. PLEASE READ THIS DOCUMENT
CAREFULLY BEFORE SIGNING IT. THIS IS A LEGAL DOCUMENT AND SIGNING IT WILL HAVE
LEGAL CONSEQUENCES.

UPON SIGNING THIS
AGREEMENT, RETURN IT TO KRISPY KREME DOUGHNUT CORPORATION HUMAN RESOURCES
DEPARTMENT. IF YOU CHOOSE TO REVOKE IT, YOU MUST NOTIFY THE HUMAN RESOURCES
DEPARTMENT IN WRITING WITHIN SEVEN (7) DAYS AFTER SIGNING IT.

	EMPLOYEE: 	  	/s/ Jeff
      Jervik 
	  		JEFF
      JERVIK 



Date: August 23,
2007

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