Document:

[FORM OF] 
2012 STOCK INCENTIVE PLAN
KRISPY KREME DOUGHNUTS, INC.

INCENTIVE STOCK OPTION
AGREEMENT 

     THIS
INCENTIVE STOCK OPTION AGREEMENT (the “Agreement”) is made as of [_____] (the
“Grant Date”), by and between Krispy Kreme Doughnuts, Inc., a North Carolina
corporation (the “Company”), and [_______] (the “Participant”). 

WITNESSETH: 

     WHEREAS, the Board of Directors and
shareholders of the Company have approved the Krispy Kreme Doughnuts, Inc. 2012
Stock Incentive Plan (the “Plan”), for the purposes of and subject to the
provisions set forth in the Plan; and 

     WHEREAS, pursuant to authority
granted to it in the Plan, the Compensation Committee of the Board of Directors
of the Company (the “Committee”) has, on behalf of the Company, granted to the
Participant an incentive stock option to purchase shares of Common Stock of the
Company, 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
Price: [$_________]
Date of Grant: [__________]
Expiration Date:
[__________] 

2.
Grant of Option 

     This Agreement sets forth the terms
of an incentive stock option (the “Option”) granted to the Participant to
purchase from the Company, during the period specified in Sections 3 and 4 of
this Agreement, a total of [_________] shares of Common Stock
(the “Shares”), at the purchase price of [__________] per share (the “Option
Price”), in accordance with the terms and conditions stated in this Agreement.
To the extent that the Option is designated as an incentive stock option and
such Option or portion thereof does not qualify as an incentive stock option,
the Option or portion thereof shall be treated as a nonqualified stock option.

3.
Vesting and Exercise of
Option 

     (a)
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 Participant has not incurred a Termination
of Employment prior to the vesting date with respect to such
increment:

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

          (ii) on the first anniversary of
the Grant Date, the Option shall vest and become exercisable with respect to 25%
of the number of Shares subject to the Option (as indicated in Section
1);

          (iii) on the second anniversary of
the Grant Date, the Option shall vest and become exercisable with respect to an
additional 25% of the number of Shares subject to the Option (for a total of 50%
of the number of Shares subject to the Option);

          (iv) on the third anniversary of
the Grant Date, the Option shall vest and become exercisable with respect to an
additional 25% of the number of Shares subject to the Option (for a total of 75%
of the number of Shares subject to the Option); and

          (v) on the fourth anniversary of
the Grant Date, the Option shall vest and become exercisable with respect to the
remaining 25% of the number of Shares subject to the Option (for a total of 100%
of the number of Shares subject to the Option). 

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

     (c) In addition, the following provisions shall apply
in the event of a Change in Control:

          (i)
To the extent the successor company does not
assume or substitute for the Option (or the Company is the ultimate parent
corporation and does not continue the Option) on substantially equivalent terms
(as determined by the Committee), the Option will become vested and exercisable
in full upon the effective date of the Change in Control. 

          (ii) Further, in the event that the
Option is substituted, assumed or continued, the Option will become vested and
exercisable in full if the Participant incurs a Termination of Employment within
six months before (in which case vesting shall not occur until the effective
date of the Change in Control) or two years after the effective date of a Change
in Control if such Termination of Employment (A) is by the Company not for Cause
or (B) is by the Participant for Good Reason. In the event that vesting of the
Option is accelerated as a result of a Termination of Employment related to a
Change in Control as provided herein, the Committee or the Board of Directors,
in its discretion, may send the Participant prior written notice of the
effectiveness of such event and the last day on which the Participant may
exercise the Option. In such event, the Participant 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 (unless the Committee or the Board of Directors determines
otherwise) terminate at 5:00 P.M., Winston-Salem, North
Carolina time, on the last day specified in such notice. If no such notice is
given, the Option shall terminate as provided in Section 4(f) herein. For the
purposes herein, (X) “Good Reason” shall have the meaning set forth in Section
21(c) of the Agreement; and (Y) “Company” shall include the successor to the
Company’s business or assets, or if all or substantially all of the voting stock
of the Company is held by another public company, such public company.

2 

     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. 

4.
Termination of
Option 

     Unless adjusted by the Committee in
its sole discretion or as otherwise provided in the Plan, the Option shall
remain exercisable as specified in Section 3 above until 5:00 p.m.,
Winston-Salem, North Carolina 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 three months following the Participant’s
Termination of Employment for any reason other than his or her Retirement,
death, Disability, or for Cause;

     (c)
upon the expiration of 360 days following the
Participant’s Termination of Employment on account of his or her
Disability;

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

     (e)
immediately upon the Participant’s Termination of
Employment for Cause;

     (f)
on the last date specified in the notice
described in Section 3 above in the event of a Termination of Employment by the
Participant for Good Reason or by the Company other than for Cause within six
months before or two years after the effective date of a Change in Control;
provided that, if no such notice is given, the Option shall terminate on the one
year anniversary of the date of the Participant’s Termination of
Employment;

     (g)
on the ten year anniversary of the Grant Date
(the “Expiration Date”); or

     (h)
on the ten year anniversary of the Grant Date in
the event of the Participant’s Termination of Employment on account of
Retirement. 

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

3 

5.
Manner of Exercise of
Option 

     (a) Exercise. The Option may be
exercised only by (i) the Participant’s delivery of a written notice of exercise
to the Company, setting forth the number of Shares with respect to which the
Option is to be exercised and (ii) the payment to the Company, pursuant to the
terms of this Agreement, of an amount equal to the Option Price multiplied by
the number of Shares being purchased as specified in the Participant’s notice of
exercise (the “Purchase Price”). The Participant’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 Company. The notice of exercise shall be in the form attached to
this Agreement or in another form provided by the Company. Notwithstanding
anything to the contrary in this Agreement, the Option may be exercised only if
compliance with Applicable Law 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 Company and the Participant with regard to the
interpretation of such laws. 

     (b)
Form of Payment. Payment of the Purchase Price may be made by (i) cash or cash
equivalent; (ii) authorizing a third party to sell a portion of the Shares
acquired upon exercise of the Option and remit to the Company a sufficient
portion of the sales proceeds to pay the full Purchase Price (that is, a
broker-assisted “cashless exercise”); (iii) unless prohibited by the Committee,
by tendering previously acquired Shares having an aggregate Fair Market Value at
the time of exercise equal to the Option Price or portion thereof, (iv) unless
prohibited by the Committee, by withholding Shares subject to the Option having
an aggregate Fair Market Value at the time of exercise equal to the Option Price
or portion thereof, or (v) combining the above methods. 

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

     (d)
Taxes and Withholding. 

          (i) The Participant shall be
responsible for all federal, state, local, and foreign income taxes payable with
respect to the Option and the exercise thereof. The Participant acknowledges
that he or she may incur substantial tax liability arising out of the exercise
of the Option and that the Company has no responsibility to take or refrain from
taking any actions in order to achieve a certain tax result for the Participant.

          (ii) The Company shall have the
power and right to deduct or withhold, or require the Participant to remit to
the Company in cash, an amount sufficient to satisfy federal, state, local, and
foreign taxes (including but not limited to the Participant’s FICA obligation),
if any, required by law to be withheld with respect to
any taxable event arising in connection with the Option. In lieu of the payment
specified in this paragraph, the Participant may satisfy the obligation, in
whole or in part, by the methods specified in subsection (b)(i) and (ii) above.
In addition, unless the Committee determines otherwise and subject to such
conditions as may be established by the Committee, the Participant may elect to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares with a Fair Market Value equal to (but not in excess of) the
minimum statutory tax required to be withheld. The right to satisfy this
obligation by cashless exercise or the withholding of Shares may be withdrawn by
the approval of the Committee.

4 

     (e) Delay In Issuance of Shares. Anything in this Agreement to the contrary notwithstanding, if, at any
time specified herein for the issuance of Shares to the Participant, 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 Company or the Participant 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 Company shall be under no obligation to take
such action; and the Company shall have no liability whatsoever as a result of
the non-issuance of such Shares, except to refund to the Participant any
consideration tendered in respect of the Purchase Price. 

     (f)
Stop Transfer Instructions.
The Company 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.
Nontransferability 

     To the extent that the Option is
designated as an incentive stock option, the Option shall not be transferable
(including by sale, assignment, pledge, or hypothecation) other than by will or
the laws of intestate succession, or, in the Committee’s discretion, as may
otherwise be permitted in accordance with Treas. Reg. Section 1.421-1(b)(2) or
Treas. Reg. Section 1.421-2(c) or any successor provisions thereto. To the
extent that the Option is treated as a nonqualified stock option, the Option
shall not be transferable (including by sale, assignment, pledge, or
hypothecation) other than by will or the laws of intestate succession, except
for transfers without consideration if and to the extent permitted by the
Committee in a manner consistent with the registration provisions of the
Securities Act. Except as may be permitted by the preceding sentences, the
Option shall be exercisable during the Participant’s lifetime only by the
Participant or his or her guardian or legal representative. The designation of a
beneficiary in accordance with the Plan does not constitute a
transfer. 

7.
No Rights as a
Shareholder 

     The Participant shall not have any
rights as a shareholder with respect to the Shares subject to his or her Option
until the issuance of such Shares to the Participant pursuant to the exercise of
the Option.

5 

8.
No Right to Employment or Future Grants;
Compliance with Applicable Law

     (a) Nothing
in this Agreement shall be construed as constituting a commitment, guarantee,
agreement, or understanding of any kind or nature that the Company, any
Subsidiary, or other Affiliate shall continue to employ the Participant, nor
shall this Agreement affect in any way the right of the Company, any Subsidiary,
or other Affiliate to terminate the employment or other service of the
Participant at any time and for any reason. By the Participant’s execution of
this Agreement, the Participant acknowledges and agrees that the Participant’s
employment or other service to the Company, any Subsidiary, or other Affiliate
is “at will.” The Participant acknowledges and agrees that the award and
acceptance of the Option pursuant to this Agreement does not entitle the
Participant to future grants under the Plan or any other plan. 

     (b)
The Company may impose such restrictions on the
Option, the Shares, and any other benefits underlying the Option as it may deem
advisable, including, without limitation, restrictions under the federal
securities laws, the requirements of any securities exchange or similar
organization, and any blue sky, state, or foreign securities laws applicable to
such securities. The Company shall not be obligated to issue, deliver, or
transfer Shares, make any other distribution of benefits under the Plan, or take
any other action, unless such delivery, distribution, or action is in compliance
with Applicable Law (including but not limited to the requirements of the
Securities Act). The Company will be under no obligation to register the Shares
or other securities with the Securities and Exchange Commission or to effect
compliance with the exemption, registration, qualification, or listing
requirements of any state or foreign securities laws or securities exchange or
similar organization, and the Company will have no liability for any inability
or failure to do so. The Company may cause a restrictive legend or legends to be
placed on any certificate issued pursuant to the Option hereunder in such form
as may be prescribed from time to time by Applicable Law or as may be advised by
legal counsel. 

9.
Successors and
Assigns 

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

     (b)
This Agreement shall be binding upon and inure to
the benefit of the Participant and his or her legal representative and any
person to whom the Option may be transferred by will, the applicable laws of
intestate succession, 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 Company, to its principal executive offices to the attention of
the Chief Financial Officer, and, in the case of the Participant, to the
Participant’s address as shown on the Company’s records. 

6 

11.
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 the 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 the Shares other than as set forth in this Agreement
and in the Plan. 

12.
Amendment of
Agreement 

     This Agreement may be modified,
amended, suspended, or terminated, and any terms or conditions may be waived,
but only by a written instrument executed by the parties hereto and otherwise in
accordance with the Plan. Notwithstanding the foregoing, the Committee shall
have unilateral authority to amend the Agreement (without the Participant’s
consent) to the extent necessary to comply with Applicable Law or changes to
Applicable Law (including but in no way limited to Code Section 409A, Code
Section 422, and federal securities laws).

13.
Severability 

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

15.
Plan Controls 

     This Agreement and the Option 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, unless the Committee
determines otherwise.

16.
Agreement to be Bound by
Plan 

     The Participant acknowledges that
the Participant fully understands his or her rights under the Plan, and that the
Participant agrees to be bound by all terms and conditions of the Plan. The
Participant acknowledges that the Participant has received a copy of the Plan
prospectus.

7 

17.
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. 

18.
Covenants and Representations of
Participant 

     The Participant represents,
warrants, covenants, and agrees with the Company as follows: 

     (a)
The Participant has not relied upon the Company
with respect to any tax consequences related to the Option or the Shares. The
Participant assumes full responsibility for all such tax consequences and the
filing of all tax returns and elections the Participant may be required or find
desirable to file in connection therewith.

     (b)
The Participant will not distribute or resell any
Shares (or other securities) issuable upon exercise of the Option granted hereby
in violation of Applicable Law. The Participant shall comply with all provisions
of the Company’s Securities Trading Policy, as in effect from time to time.

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

     (d)
As a condition to receiving this award, the
Participant agrees to abide by the Company’s Equity Retention Policy,
Compensation Recovery Policy, and Stock Ownership Guidelines and/or other
similar policies, each as in effect from time to time and to the extent
applicable to the Participant. In addition, the Participant shall be subject to
such compensation recovery, recoupment, forfeiture, or other similar provisions
as may apply to the Participant under Applicable Law.

19.
Limitation of
Liability 

     The liability of the Company under
this Agreement and in the award of the Option 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
Participant or any others with respect to any loss, cost, or expense which the
Participant or any others may incur in connection with or arising out of any
transaction involving the Option or the Shares. 

20.
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 principles of conflicts of laws, and in
accordance with applicable federal laws. 

8 

21.
Definitions 

     (a) “Retirement” shall mean the Participant’s Termination of Employment at a
time when the sum of the Participant’s age and years of employment with the
Company, its Subsidiaries, or other Affiliates equals or exceeds 65, provided
that the Participant shall have attained a minimum age of 55. 

     (b)
“Termination
of Employment” means the discontinuance
of the Participant’s service relationship with the Company, its Subsidiaries, or
another Affiliate, including but not limited to service as an employee of the
Company, its Subsidiaries, or another Affiliate, as a non-employee member of the
Board of Directors of the Company, or as a consultant or advisor to the Company,
its Subsidiaries, or another Affiliate. 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 Participant transfers
among the various entities constituting the Company and its Subsidiaries, so
long as there is no interruption in the provision of service by the Participant
to the Company and its Subsidiaries. The Participant shall not be deemed to have
incurred a Termination of Employment if the Participant is on military leave,
sick leave, or other bona fide leave of absence approved by the Company of 180
days or fewer (or any longer period during which the Participant is guaranteed
reemployment by statute or contract). In the event the Participant’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, unless determined otherwise by the Committee. 

     (c)
“Good
Reason” shall have the meaning assigned
such term in the employment agreement, if any, between the Participant and the
Company, a Subsidiary, or an Affiliate, provided, however that if there is no
such employment agreement in which such term is defined, “Good Reason” shall
mean any of the following acts by the Company, a Subsidiary, or an Affiliate
within the six-month period before or the two-year period after the effective date of a
Change in Control, without the consent of the Participant (in each case, other
than an isolated, insubstantial, and inadvertent action not taken in bad faith
and which is remedied by the Company, a Subsidiary, or an Affiliate promptly
after receipt of notice thereof given by the Participant): (i) the assignment to
the Participant of duties or responsibilities materially inconsistent with, or a
material diminution in, the Participant’s position, authority, duties, or
responsibilities as in effect on the date of the Change in Control, (ii) a
material reduction in the Participant’s base salary as in effect on the date of
the Change in Control, (iii) except with regard to international employees, the
relocation, without consent, of the Participant’s principal place of employment
more than 25 miles from the location at which the Participant was stationed
immediately prior to the Change in Control, or (iv) any material breach of any
employment agreement between the Participant and the Company, a Subsidiary, or
an Affiliate; provided that any event described in clauses (i) through (iv)
above shall constitute Good Reason only if the Company fails to rescind or cure
such event within 30 days after receipt from the Participant of written notice
of the event which constitutes Good Reason; and provided, further, that Good
Reason shall cease to exist for an event or condition described in clauses (i)
through (iv) above on the 60th day following the latter of its occurrence or the
Participant’s knowledge thereof, unless the Participant has given the Company
written notice thereof prior to such date. 

9 

22. [Forfeiture in the Event of Competition
and/or Solicitation or other Detrimental Acts]1

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

     (a)
The Participant expressly agrees and covenants
that during the Restricted Period (as defined below), the Participant shall not,
without the prior written consent of the Company, 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 Participant 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 the Participant 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 Company or its
Affiliates to cease doing business with the Company or its Affiliates if such
cessation could reasonably be expected to result in material harm to the
Company;

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

          (iv) violate the Company’s
Securities Trading Policy.

     (b)
The Participant expressly agrees and covenants
that the Participant will not, without the prior written consent of the Company,
directly or indirectly, disclose or use at any time before or after the
Participant’s Termination of Employment any Confidential Information (as defined
below) of which the Participant is or becomes aware, whether or not such
information is developed by the Participant, except to the extent such
disclosure or use is directly related to and appropriate in connection with the
Participant’s performance of duties assigned to the Participant by the Company
or its Affiliates. Under all circumstances and at all times, the Participant
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 the Participant
has violated any provisions of this Section 22 or that the Participant’s
employment has been terminated for Cause, then the Participant agrees and
covenants that:

          (i) The Participant shall
automatically forfeit any rights the Participant may have with respect to the
Option or underlying Shares as of the date of such determination; and

____________________

1 Section 22 is only
included in the Incentive Stock Option Agreement for persons holding the title
of Senior Vice President or above of the Company or of Krispy Kreme Doughnut
Corporation, its wholly-owned subsidiary. 

10 

          (ii) if the Participant has exercised all or any part of the Option within the
twelve-month period immediately preceding a violation of this Section 22 or
termination of the Participant’s employment for Cause, upon the Company’s
demand, the Participant shall immediately deliver to the Company (A) any Shares
acquired upon exercise of the Option, if the Participant still owns the Shares
(at which time the Company will deliver to the Participant an amount equal to
the Purchase Price for such Shares), or (B) if the Participant no longer owns
the Shares, an amount equal to the Gain realized by the Participant upon such
exercise. For the purposes herein, “Gain” shall be equal to the disposition
price per Share of any Shares sold or disposed of, multiplied by the number of
Shares sold or disposed of, minus the Purchase Price paid for the Shares, and
less any taxes paid which are not refundable or for which the Participant does
not otherwise receive a tax credit or other form of reimbursement. 

     (d) Definitions. For purposes of this
Section 22, 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 Company or its Affiliates in connection with the business of the
Company 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 Participant; or (C) the disclosure of which is consented to in
writing by the Company. 

          (iii) “Restricted
Period” means the period during which the
Participant is employed by the Company or an Affiliate and twelve months
following the date that the Participant ceases to be employed by the Company or
an Affiliate for any reason whatsoever. 

          (iv) “Territory” means: 

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

11 

     (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 Company’s products have
been sold at any time in the one-year period ending on the last day of the
Participant’s employment with the Company or its Affiliates; and

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

     (e)
The Company may require the Participant, in
connection with the exercise of the Option, to certify in a manner acceptable to
the Company that the Participant has not violated the terms of this Section 22
and may decline to give effect to such exercise if the Participant fails so to
certify. If the Participant is required to repay any Gain to the Company
pursuant to this Section 22, the Participant shall pay such amount in such
manner and on such terms and conditions as the Company may require, and the
Company shall be entitled to withhold or set-off against any other amount owed
to the Participant by the Company or any of its Affiliates (other than any
amount owed to the Participant under any retirement plan intended to be
qualified under Code Section 401(a)) up to any amount sufficient to satisfy any
unpaid obligation of the Participant under this Section 22. 

     (f)
The Participant acknowledges and agrees that the
period, scope, and geographic areas of restriction imposed upon the Participant
by the provisions of Section 22 are fair and reasonable and are reasonably
required for the protection of the Company. In the event that any part of this
Agreement, including, without limitation, Section 22, is held to be
unenforceable or invalid, the remaining parts of Section 22 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 22 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)
The Participant acknowledges that breach by the
Participant of this Agreement would cause irreparable harm to the Company and
that, in the event of such breach, the Company 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 the
Participant’s obligations hereunder. 

12 

23.
[Confidentiality]2

     The
Participant agrees to maintain the existence and terms of this Agreement,
including the number of Shares in the Option granted hereunder, as confidential,
and neither the Participant nor any person acting on his or her behalf shall
disclose the terms of this Agreement to any third party, other than to the
Participant’s attorney, accountant, members of the Participant’s immediate
family, or as required by Applicable Law. In certain instances, the Company may
be required by securities regulations or other laws to disclose information
about the Option and even the full content of this Agreement. In the event the
Participant breaches the terms of this confidentiality provision, the Option
granted hereunder shall be immediately forfeited.

24.
Limitation on Incentive Stock
Options.

     In no event shall there first become
exercisable by the Participant in any one calendar year incentive stock options
granted by the Company or any Parent or Subsidiary with respect to shares having
an aggregate Fair Market Value (determined at the time an incentive stock option
is granted) greater than $100,000. To the extent that any incentive stock option
is first exercisable by the Participant in excess of such limitation, the excess
shall be considered a nonqualified stock option. 

25.
Notice of Disposition.

     To the extent that the Option is
designated as an incentive stock option, if shares of Common Stock acquired upon
exercise of the Option are disposed of within two years following the date of
grant or one year following the transfer of such shares to the Participant upon
exercise, the Participant shall, promptly following such disposition, notify the
Company in writing of the date and terms of such disposition and provide such
other information regarding the disposition as the Committee may reasonably
require. 

[Signature Page to
Follow]

 

 

____________________

2 Section 23 is not included
in the Incentive Stock Option Agreement for Executive Officers/Section 16
reporting persons of the Company. 

13 

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

	
      KRISPY KREME DOUGHNUTS, INC.
      

	 
	By:	 

	Title:	 

	PARTICIPANT
      

	 
	Signature:	 

	Printed Name:	 

14 

Exhibit A 

The following businesses, together with
their affiliated companies, are the “Competitive Businesses” for purposes of
this Agreement: 

Dunkin Brands Inc.
Tim Hortons,
Inc.
George Weston Limited
Interstate
Bakeries Corporation
Flowers Foods, Inc.
McKee Foods Inc.
Starbucks
Dewey’s Bakery
Salem Baking
Company
Dawn Food Products, Inc.
CSM Bakery Products 

Or any other business that derives more
than fifty percent (50%) of its revenues from the sale of doughnuts or baked
goods. 

The Company reserves the right to
modify or amend this Exhibit A at any time and from time to time. 

15 

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.
Winston-Salem, North Carolina time on date of exercise. 

SECTION I 

	NAME (please print):	SOCIAL SECURITY NO.:
	 	 
	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):	     	I elect to pay my taxes on this
      transaction (check one):
	 
	o	Broker assisted Cashless Exercise		o  	Sell shares to cover taxes (Broker assisted
					Cashless Exercise)
	 
	o  	Cash Purchase by Check (payable to		o	Check (payable to Krispy Kreme Doughnuts,
  Inc.)
		Krispy Kreme Doughnuts, Inc.)	 	 	
				o	Share withholding
	o	Share delivery			
	 
	o	Share withholding			

	Signature	     	Date of
  Exercise

Return KRISPY KREME DOUGHNUTS,
INC.
form to:
            ATTN:
Chief Financial
Officer
            370
Knollwood
Street
            Winston-Salem,
NC
27103
            Phone:
336-725-2981 

16[FORM OF]
KRISPY KREME DOUGHNUTS, INC.
2012 STOCK INCENTIVE
PLAN
RESTRICTED STOCK AWARD AGREEMENT

     THIS AGREEMENT
(the “Agreement”) is made as of [_______________], by and between
Krispy Kreme Doughnuts, Inc., a North Carolina corporation (the “Company”), and
[___________________] (the “Participant”). 

W I T N E S S E T H: 

    
WHEREAS, the Board of Directors and shareholders of the Company have
approved the Krispy Kreme Doughnuts, Inc. 2012 Stock Incentive Plan, as it may
be amended (the “Plan”), for the purposes and subject to the provisions set
forth in the Plan; and

    
WHEREAS, the Plan provides for the grant of restricted stock awards;
and

    
WHEREAS, pursuant to authority granted to it in the Plan, the
Compensation Committee of the Board of Directors of the Company (the
“Committee”) has, on behalf of the Company, granted to the Participant
restricted shares of Common Stock of the Company, as set forth below;
and

    
WHEREAS, this Agreement evidences the grant of a restricted stock award
under 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. 
Award of Restricted Stock 

    
This Agreement sets forth the terms of an award (the “Award”) to the
Participant of [________] restricted shares of the Company’s Common Stock (the
“Restricted Stock”), subject to, and in accordance with, the restrictions,
terms, and conditions set forth in the Plan and this Agreement. The grant date
of this Award of Restricted Stock is [______________] (the “Grant Date”).

1

2. Vesting of Award; Forfeiture 

    
If the Participant remains employed by the
Company, the Participant shall become vested in the Restricted Stock in
[____________] equal installments beginning on [____________], and continuing on the
next [____________] anniversaries of the Grant Date (each such date shall be a “Vesting
Date”), all as set forth below: 

			Cumulative
      Number
			of
	Date		Shares
      Vested
	[              
      ]		[              
      ]
	[              
      ]		[              
      ]
	[              
      ]		[              
      ]

     On each Vesting
Date, the Participant shall own the vested shares of Restricted Stock free and
clear of all forfeiture restrictions imposed by this Agreement (other than those
imposed under Section 15(d) and Section 22). The Company shall deliver a
certificate(s) (or other evidence of ownership, such as book entry) for the
vested shares of Restricted Stock to the Participant as soon as practical after
each Vesting Date. For purposes of this Agreement, employment with a Subsidiary
or other Affiliate of the Company shall be considered employment with the
Company. The Award and any related unvested Restricted Stock shall be
automatically forfeited upon the Participant’s Termination of Employment for any
reason (whether by the Company or the Participant and whether voluntary or
involuntary) other than a Termination of Employment due to the Participant’s
death, Retirement, or Disability or in the event of a Termination of Employment
due to a Change in Control under the circumstances provided in Section 6 herein.
In the event (a) of a Termination of Employment of the Participant due to his or
her death, Retirement, or Disability, or (b) the Participant incurs a
Termination of Employment by the Company not for Cause or by the Participant for
Good Reason within six months before or two years after a Change in Control as
provided in Section 6 herein, the Restricted Stock will become immediately
vested in full. 

3. Rights as a
Shareholder 

    
Except as otherwise provided in this Agreement or the Plan, the
Participant shall have the rights of a shareholder of the Company with respect
to the shares of Restricted Stock, including the right to vote such shares,
except that (a) any dividends declared and paid by the Company on shares of
Restricted Stock shall be paid in the form of Restricted Stock (with such
Restricted Stock, in the case of cash dividends, having a Fair Market Value on
the dividend payment date equal to the amount of the cash dividend), and (b) any
shares of Restricted Stock representing such dividends will vest, if at all, at
the same time as the shares of Restricted Stock in respect of which they are
issued and shall otherwise have terms identical to the terms of such Restricted
Stock. 

4. Certificates 

    
The Restricted Stock granted hereunder may be evidenced in such manner as
the Committee shall determine, including, but not limited to, tracking through
book entry. If certificates representing Restricted Stock are registered in the
name of the Participant, the Committee may require that such certificates bear
an appropriate legend (the “Restrictive Legend”) referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, that the
Company retain physical possession of the certificates, and that the Participant
deliver a stock power to the Company (or similar instrument), endorsed in blank,
relating to the Restricted Stock. Upon the vesting of the Restricted Stock
pursuant to the terms hereof and the satisfaction of any withholding tax
liability pursuant to Section 7 hereof, the certificates evidencing such vested shares of Common Stock, not bearing
the Restrictive Legend, shall be delivered to the Participant or other evidence
of vesting of shares of Common Stock shall be provided to the Participant, such
as tracking through book entry. 

2

5. Nontransferability

     Unless the
Committee determines otherwise, no grant of, nor any right or interest of the
Participant in or to, the Award may be assigned, encumbered, or transferred
except, in the event of the death of the Participant, by will or the laws of
intestate succession. 

6. Change in
Control 

    
Notwithstanding the other provisions of the Agreement, the following
provisions shall apply in the event of a Change in Control:

    
(a) To the
extent the successor company does not assume or substitute for the Award (or the
Company is the ultimate parent corporation and does not continue the Award) on
substantially equivalent terms (as determined by the Committee), the Award will
become vested in full upon the effective date of the Change in Control.

    
(b) Further, in the event that the Award is substituted, assumed, or
continued, the Award will become vested in full if the Participant incurs a
Termination of Employment within six months before (in which case vesting shall
not occur until the effective date of the Change in Control) or two years after
the effective date of a Change in Control if such Termination of Employment (i)
is by the Company not for Cause or (ii) is by the Participant for Good Reason.
For the purposes herein, (A) “Good Reason” shall have the meaning set forth in
Section 21(c) of the Agreement; and (B) “Company” shall include the successor to
the Company’s business or assets, or if all or substantially all of the voting
stock of the Company is held by another public company, such public
company. 

7. Taxes and
Withholding 

    
(a) The
Participant shall be responsible for all federal, state, local, and foreign
income taxes payable with respect to the Award. The Participant acknowledges
that he or she may incur substantial tax liability as a result of the grant or
vesting of the Award and that the Company has no responsibility to take or
refrain from taking any actions in order to achieve a certain tax result for the
Participant. 

    
(b) The
Company shall have the right to retain and withhold from any vesting of
Restricted Stock the minimum amount of taxes (including but not limited to the
Participant’s FICA obligation), if any, required by any government to be
withheld or otherwise deducted and paid with respect to such vesting. At its
discretion, the Company may require the Participant to immediately pay the
Company in cash or reimburse the Company for any such taxes required to be
withheld and may withhold any distribution in whole or in part until the Company
is so paid or reimbursed. In lieu thereof, the Company shall have the right to
withhold from any other cash amounts due to the Participant an amount equal to
such taxes required to be withheld or withhold and cancel (in whole or in part)
a number of shares of Restricted Stock having a market value equal to the amount
of such taxes. In addition, unless the Committee determines otherwise and subject to such conditions as may be
established by the Committee, the Participant may elect to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares with a Fair Market Value equal to the minimum statutory tax required to
be withheld. The right to withhold shares of Common Stock with a Fair Market
Value equal to (but not in excess of) the minimum statutory tax required to be
withheld to satisfy the withholding requirement may be withdrawn by the approval
of the Committee.

3

8. Amendment of
Agreement 

     This Agreement
may be modified, amended, suspended, or terminated, and any terms or conditions
may be waived, but only by a written instrument executed by the parties hereto
and otherwise in accordance with the Plan. Notwithstanding the foregoing, the
Committee shall have unilateral authority to amend the Agreement (without the
Participant’s consent) to the extent necessary to comply with Applicable Law or
changes to Applicable Law (including but in no way limited to Code Section 409A
and federal securities laws). 

9. Severability 

    
The provisions of this 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. 

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 Company, to its principal
executive offices to the attention of the Chief Financial Officer, and, in the
case of the Participant, to the Participant’s address as shown on the Company’s
records. 

11. Successors and
Assigns 

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

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

12. Agreement to be Bound by
Plan 

    
The Participant hereby acknowledges that the Participant fully
understands his or her rights under the Plan, and that the Participant agrees to
be bound by all the terms and provisions of the Plan. The Participant
acknowledges that the Participant has received a copy of the Plan prospectus.

4

13. Plan
Controls 

     This Agreement
and the Award 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, unless the
Committee determines otherwise. 

14. No Right to Employment or
Future Grants; Compliance with Applicable Law 

    
(a) Nothing
in this Agreement shall be construed as constituting a commitment, guarantee,
agreement, or understanding of any kind or nature that the Company, any
Subsidiary, or any Affiliate shall continue to employ the Participant, nor shall
this Agreement affect in any way the right of the Company, any Subsidiary, or
any Affiliate to terminate the employment or other service of the Participant at
any time and for any reason. By the Participant’s execution of this Agreement,
the Participant reaffirms and acknowledges and agrees that the Participant’s
employment or other service to the Company, any Subsidiary, or any Affiliate is
“at will.” The Participant acknowledges and agrees that the award and acceptance
of Restricted Stock pursuant to this Agreement does not entitle the Participant
to future grants under the Plan or any other plan. 

    
(b) The
Company may impose such restrictions on the Award, the shares of Common Stock
subject to the Award, and any other benefits underlying the Award as it may deem
advisable, including without limitation restrictions under the federal
securities laws, the requirements of any securities exchange or similar
organization, and any blue sky, state, or foreign securities laws applicable to
such securities. The Company shall not be obligated to issue, deliver, or
transfer shares of Common Stock, make any other distribution of benefits under
the Plan, or take any other action, unless such delivery, distribution, or
action is in compliance with Applicable Law (including but not limited to the
requirements of the Securities Act). The Company will be under no obligation to
register the shares of Common Stock or other securities with the Securities and
Exchange Commission or to effect compliance with the exemption, registration,
qualification, or listing requirements of any state or foreign securities laws,
or any securities exchange or similar organization, and the Company will have no
liability for any inability or failure to do so. The Company may cause a
restrictive legend or legends to be placed on any certificate issued pursuant to
the Award in such form as may be prescribed from time to time by Applicable Law
or as may be advised by legal counsel.

15. Covenants and Representations
of Participant 

    
The Participant represents, warrants, covenants, and agrees with the
Company as follows:

    
(a) The
Participant has not relied upon the Company with respect to any tax consequences
related to the Award or the shares of Common Stock subject thereto. The
Participant assumes full responsibility for all such tax consequences and the
filing of all tax returns and elections the Participant may be required or find
desirable to file in connection therewith. 

5

     (b) The Participant will not
distribute or resell any shares of Common Stock subject to the Award (or other
securities) issuable upon lapse of the restrictions hereunder in violation of
Applicable Law. The Participant shall comply with all provisions of the
Company’s Securities Trading Policy, as in effect from time to time.

    
(c) The
agreements, representations, warranties, and covenants made by the Participant
herein with respect to the Award shall also extend and apply to all of the
shares issued to the Participant from time to time upon the lapse of the
restrictions. Acceptance by the Participant of any certificate representing
shares (or other evidence of beneficial ownership) shall constitute a
confirmation by the Participant that all such agreements, representations,
warranties, and covenants made herein continue to be true and correct at that
time. 

    
(d) As a
condition to receiving this Award, the Participant agrees that he or she shall
abide by all provisions of the Company’s Equity Retention Policy, Compensation
Recovery Policy, and Stock Ownership Guidelines and/or other similar policies,
each as in effect from time to time and to the extent applicable to the
Participant. In addition, the Participant shall be subject to such compensation
recovery, recoupment, forfeiture, or other similar provisions as may apply to
the Participant under Applicable Law. 

16. 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 principles of conflicts of laws, thereof, and in accordance with
applicable federal laws. 

17. Waiver 

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

18. Limitation of
Liability 

    
The liability of the Company under this Agreement and in the Award 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 Participant or any others with respect to any loss, cost, or expense
which the Participant or others may incur in connection with or arising out of
any transaction involving the Award or the shares of Common Stock subject
thereto. 

19. 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 Award 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 Award other than as set forth in this Agreement and in the
Plan.

6

20. 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. 

21. Definitions 

    
(a) “Retirement” shall mean the
Participant’s Termination of Employment at a time when the sum of the
Participant’s age and years of employment with the Company, its Subsidiaries, or
other Affiliates equals or exceeds 65, provided that the Participant shall have
attained a minimum age of 55. 

    
(b) “Termination of Employment” means
the discontinuance of the Participant’s service relationship with the Company,
its Subsidiaries, or another Affiliate, including but not limited to service as
an employee of the Company, its Subsidiaries, or another Affiliate, as a
non-employee member of the Board of Directors of the Company, or as a consultant
or advisor to the Company, its Subsidiaries, or another Affiliate. 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 Participant transfers among the various entities constituting the Company
and its Subsidiaries, so long as there is no interruption in the provision of
service by the Participant to the Company and its Subsidiaries. The
determination of whether the Participant has incurred a Termination of
Employment shall be made by the Committee in its discretion. The Participant
shall not be deemed to have incurred a Termination of Employment if the
Participant is on military leave, sick leave, or other bona fide leave of
absence approved by the Company of 180 days or fewer (or any longer period
during which the Participant is guaranteed reemployment by statute or contract).
In the event the Participant’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, unless determined otherwise by the
Committee. 

    
(c) “Good Reason” shall have the
meaning assigned to such term in the employment agreement, if any, between the
Participant and the Company, a Subsidiary, or an Affiliate, provided, however
that if there is no such employment agreement in which such term is defined,
“Good Reason” shall mean any of the following acts by the Company, a Subsidiary,
or an Affiliate within the six month period before or two-year period after the
effective date of a Change in Control, without the consent of the Participant
(in each case, other than an isolated, insubstantial, and inadvertent action not
taken in bad faith and which is remedied by the Company, a Subsidiary, or an
Affiliate promptly after receipt of notice thereof given by the Participant):
(i) the assignment to the Participant of duties or responsibilities materially
inconsistent with, or a material diminution in, the Participant’s position,
authority, duties, or responsibilities as in effect on the date of the Change in
Control, (ii) a material reduction in the Participant’s base salary as in effect
on the date of the Change in Control, (iii) except with regard to international
employees, the relocation, without consent, of the Participant’s principal place
of employment more than 25 miles from the location at which the Participant was
stationed immediately prior to the Change in Control, or (iv) any material
breach of any employment agreement between the Participant and the Company, a
Subsidiary, or an Affiliate; provided that any event described in clauses (i) through
(iv) above shall constitute Good Reason only if the Company fails to rescind or
cure such event within 30 days after receipt from the Participant of written
notice of the event which constitutes Good Reason; and provided, further, that
Good Reason shall cease to exist for an event or condition described in clauses
(i) through (iv) above on the 60th day following the latter of its occurrence or
the Participant’s knowledge thereof, unless the Participant has given the
Company written notice thereof prior to such date. 

7

22. [Forfeiture in the Event of
Competition and/or Solicitation or other Detrimental Acts]1

     In return for
granting the Restricted Stock to the Participant, the Participant agrees to the
following restrictions. 

    
(a) The
Participant expressly agrees and covenants that during the Restricted Period (as
defined below), the Participant shall not, without the prior written consent of
the Company, 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 Participant 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 the Participant 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 Company or its Affiliates to cease doing business with the Company or its
Affiliates if such cessation could reasonably be expected to result in material
harm to the Company;

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

         
(iv) violate the Company’s Securities Trading Policy.

    
(b) The
Participant expressly agrees and covenants that the Participant will not,
without the prior written consent of the Company, directly or indirectly,
disclose or use at any time before or after the Participant’s Termination of
Employment any Confidential Information (as defined below) of which the
Participant is or becomes aware, whether or not such information is developed by
the Participant, except to the extent such disclosure or use is directly related
to and appropriate in connection with the Participant’s performance of duties
assigned to the Participant by the Company or its Affiliates. Under all
circumstances and at all times, the Participant 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.

____________________

1 Section 22 is only included
in the Restricted Stock Award Agreement for persons holding the title of Senior
Vice President or above of the Company or of Krispy Kreme Doughnut Corporation,
its wholly-owned subsidiary. 

8

     (c) If the Committee determines
that the Participant has violated any provisions of this Section 22 or that the
Participant’s employment has been terminated for Cause, then the Participant
agrees and covenants that:

         
(i) the
Participant shall automatically forfeit any rights the Participant may have with
respect to the Award or the underlying shares of Common Stock as of the date of
such determination; and

         
(ii) if the
Participant has received a distribution of all or any part of the shares of
Common Stock subject to the Award within the twelve-month period immediately
preceding a violation of this Section 22 or termination of the Participant’s
employment for Cause, upon the Company’s demand, the Participant shall
immediately deliver to the Company (A) the shares of Common Stock subject to the
Award which have been distributed during such period (without the payment by the
Company of any consideration for such shares), if the Participant still owns
such shares, or (B) if the Participant no longer owns such shares, an amount
equal to the Gain realized by the Participant with respect to the shares of
Common Stock subject to the Award. For the purposes herein, “Gain” shall be
equal to the disposition price per share of any shares of Common Stock received
pursuant to the Award which shares were sold or disposed of, multiplied by the
number of such shares sold or disposed of, and less any taxes paid which are not
refundable or for which the Participant does not otherwise receive a tax credit
or other form of reimbursement. 

    
(d) Definitions. For purposes of this
Section 22, 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 Company or its Affiliates in connection with the
business of the Company 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 the Participant; or (C) the disclosure of which is
consented to in writing by the Company. 

         
(iii) “Restricted Period” means the
period during which the Participant is employed by the Company or an Affiliate
and twelve months following the date that the Participant ceases to be employed
by the Company or an Affiliate for any reason whatsoever. 

         
(iv) “Territory” means: 

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

9

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

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

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

    
(e) The
Company may require the Participant, in connection with the distribution of the
shares of Common Stock subject to the Award, to certify in a manner acceptable
to the Company that the Participant has not violated the terms of this Section
22 and may decline to distribute such shares if the Participant fails so to
certify. If the Participant is required to repay any amount to the Company
pursuant to this Section 22, the Participant shall pay such amount in such
manner and on such terms and conditions as the Company may require, and the
Company shall be entitled to withhold or set-off against any other amount owed
to the Participant by the Company or any of its Affiliates (other than any
amount owed to the Participant under any retirement plan intended to be
qualified under Code Section 401(a)) up to any amount sufficient to satisfy any
unpaid obligation of the Participant under this Section 22. 

    
(f) The
Participant acknowledges and agrees that the period, scope, and geographic areas
of restriction imposed upon the Participant by the provisions of Section 22 are
fair and reasonable and are reasonably required for the protection of the
Company. In the event that any part of this Agreement, including, without
limitation, Section 22, is held to be unenforceable or invalid, the remaining
parts of Section 22 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 22 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) The
Participant acknowledges that breach by the Participant of this Agreement would
cause irreparable harm to the Company and that, in the event of such breach, the
Company 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 the Participant’s obligations
hereunder.

10

23. Code Section
409A 

     If and to the
extent that Code Section 409A is deemed to apply to the Award, it is intended
that this Agreement and the Award shall, to the extent practicable, be construed
in accordance therewith. Notwithstanding any provision to the contrary in this
Agreement, if the Participant is deemed on the date of his or her “separation
from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the
Company to be a “specified employee” (within the meaning of Treas. Reg. Section
1.409A-1(i)), then with regard to any payment that is considered deferred
compensation under Code Section 409A payable on account of a “separation from
service” that is required to be delayed pursuant to Code Section 409A(a)(2)(B)
of the Code (after taking into account any applicable exceptions to such
requirement), such payment shall be made on the date that is the earlier of (i)
the expiration of the six-month period measured from the date of the
Participant’s “separation from service” (with such payments to be made during
the seventh month following the “separation from service”) or, if earlier, (ii)
the date of the Participant’s death, or as otherwise permitted under Code
Section 409A (the “Delay Period”). Upon the expiration of the Delay Period, all
payments delayed pursuant to this Section 24 shall be paid to the Participant in
a lump sum. Notwithstanding any provision of this Agreement to the contrary, for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment constituting
deferred compensation for purposes of Code Section 409A, references to the
Participant’s “termination of employment” (and corollary terms) with the Company
shall be construed to refer to the Participant’s “separation from service”
(within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. In
the event that the Award, this Agreement, or the Plan is deemed not to comply
with Code Section 409A, then neither the Company, the Board of Directors, the
Committee, nor its designees or agents will be responsible to the Participant or
any person for actions, decisions, or determinations made in good faith.

24. [Confidentiality] 2

    
The Participant agrees to maintain the existence and terms of this
Agreement, including the number of shares of Restricted Stock granted hereunder,
as confidential, and neither the Participant nor any person acting on his or her
behalf shall disclose the terms of this Agreement to any third party, other than
to the Participant’s attorney, accountant, members of the Participant’s
immediate family, or as required by Applicable Law. In certain instances, the
Company may be required by securities regulations or other Applicable Law to
disclose information about this Award and even the full content of this
Agreement. In the event the Participant breaches the terms of this
confidentiality provision, unvested shares of Common Stock underlying the Award
granted hereunder shall be immediately forfeited. 

[Signature Page to
Follow]

____________________

2 Section 24 is not included in
the Restricted Stock Agreement for Executive Officers/Section 16 reporting
persons of the Company. 

11

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

		KRISPY KREME DOUGHNUTS,
  INC.
		 
		By:	 	
		Title:  	 	
		 
	 	PARTICIPANT
		 
		Signature:	
		Printed Name:  	

12

Exhibit A 

The following businesses, together with
their affiliated companies, are the “Competitive Businesses” for purposes of
this Agreement: 

Dunkin Brands Inc.
Tim Hortons,
Inc.
George Weston Limited
Interstate Bakeries Corporation
Flowers
Foods, Inc.
McKee Foods
Inc.
Starbucks
Dewey’s Bakery
Salem Baking Company
Dawn Food
Products, Inc.
CSM Bakery Products 

Or any other business that derives more
than fifty percent (50%) of its revenues from the sale of doughnuts or baked
goods. 

The Company reserves the right to modify
or amend this Exhibit A at any time and from time to time.

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