Krispy Kreme Doughnuts (KKD) DEF 14A Definitive proxy

DEFINITIVE PROXY STATEMENT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.)

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Filed by a Party other than the Registrant [   ]

Check the appropriate box:
[   ]	Preliminary Proxy Statement
[   ]	Confidential, For Use of the
	Commission Only (as permitted
	by Rule 14a-6(e)(2))
[X]	Definitive Proxy Statement
[   ]	Definitive Additional Materials
[   ]	Soliciting Material Under Rule 14a-12

KRISPY KREME DOUGHNUTS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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May 1, 2014

To Our Shareholders:

    On behalf of the Board of Directors and management of Krispy Kreme Doughnuts, Inc., I invite you to the Annual Meeting of Shareholders to be held on Tuesday, June 17, 2014, at 9:00 a.m., Eastern Time, at the Marriott Hotel, Hearn Grand Ballroom, 425 North Cherry Street, Winston-Salem, North Carolina 27101. We look forward to greeting those shareholders able to attend. At the Annual Meeting we will discuss each item of business described in the enclosed Notice of Annual Meeting of Shareholders and Proxy Statement.

For your convenience, we are pleased to take advantage of the “e-proxy” rules of the Securities and Exchange Commission that allow companies to furnish proxy materials to shareholders via the Internet. On or about May 1, 2014, we began mailing certain shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our Annual Report, via the Internet and, if desired, how to request a paper copy of our proxy materials. Certain shareholders who submitted votes at the 2013 annual meeting of shareholders will continue to receive a paper copy of the Notice of Annual Meeting of Shareholders, Proxy Statement, and Annual Report, which we began mailing on or about May 1, 2014. A copy of the Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report is available athttp://krispykreme.com/annualreport.

It is important that your shares are represented at the Annual Meeting whether or not you plan to attend. Accordingly, we request your cooperation by signing, dating, and mailing the enclosed proxy card, or voting by telephone or electronically through the Internet as soon as possible to ensure your representation at the Annual Meeting. If you do attend the Annual Meeting and wish to vote in person, you may revoke your proxy at that time.

Sincerely,

JAMES H. MORGAN

Chairman of the Board, President

and Chief Executive Officer

KRISPY KREME DOUGHNUTS, INC.
370 Knollwood Street
Winston-Salem, North Carolina 27103
________________________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 17, 2014
________________________________

To the Shareholders of
Krispy Kreme Doughnuts, Inc.:

    Notice is hereby given that the Annual Meeting of Shareholders of Krispy Kreme Doughnuts, Inc. (the “Annual Meeting”) will be held on Tuesday, June 17, 2014, at 9:00 a.m., Eastern Time, at the Marriott Hotel, Hearn Grand Ballroom, 425 North Cherry Street, Winston-Salem, North Carolina 27101, for the following purposes:

1. To elect three Class III directors, whose terms will expire in 2017;

2. To approve, on an advisory basis, the compensation of our named executive officers as disclosed in our 2014 Proxy Statement;

3. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending February 1, 2015; and

4. To consider such other matters as may properly come before the Annual Meeting and any adjournment or postponement thereof.

Only shareholders of record as of April 11, 2014 are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

A Proxy Statement and a proxy solicited by the Board of Directors of Krispy Kreme are enclosed with the paper copies sent to shareholders. Please sign, date, and return the proxy card in the enclosed business reply envelope, or vote by telephone or electronically through the Internet as soon as possible to ensure your representation at the Annual Meeting. If you attend the Annual Meeting and wish to vote in person, you may revoke your proxy at that time. Seating is limited at the Annual Meeting. If you plan to attend, youmust follow the instructions described under “Proxy Solicitation and General Information — Admission to Annual Meeting” in the Proxy Statement.

	BY ORDER OF THE BOARD OF DIRECTORS,
	DARRYL R. MARSCH
	Secretary
May 1, 2014

Proxy Summary

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.

Annual Meeting of Shareholders

•	Time and Date	9:00 a.m., Tuesday, June 17, 2014
•	Place	Marriott Hotel, Hearn Grand Ballroom 425 North Cherry Street Winston-Salem, North Carolina
•	Record Date	April 11, 2014
•	Voting	Shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the proposals.
•	Entry	If you decide to attend the meeting in person, upon your arrival you will need to present valid photo identification and either your admission ticket or proof that you own Krispy Kreme stock. See page 3 for further instructions.

Voting Matters

			Page Reference
		Board Vote	(for more
Agenda Item		Recommendation	detail)
1.	Election of three Class III directors	FOR	17
2.	Advisory vote on the compensation of our Named Executive Officers	FOR	32
3.	Ratification of PricewaterhouseCoopers LLP as our independent
	registered public accounting firm for fiscal 2015	FOR	60

Company Performance Highlights

Below is a summary of the Company’s financial performance in fiscal 2014.(1)

• Revenues increased 5.6% to $460.3 million
   
• Operating income rose 23.4% to $46.6 million
   
• Adjusted net income increased 26.5% to $43.2 million ($0.61 per share)(2)
   
• Net income was $34.3 million ($0.48 per share)(3)
   
• Cash provided by operating activities was $56.9 million

____________________

(1)	Fiscal 2014 included 52 weeks compared to 53 weeks for fiscal 2013.
(2)	Adjusted net income and adjusted earnings per share are non-GAAP financial measures. We provide a reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure in Appendix A to this Proxy Statement.
(3)	Net income includes unusual credits of $10.3 million ($0.14 per share) included in income tax expense; the credits reflect additional tax benefits expected to be realized from the Company’s net operating loss and tax credit carryforwards resulting from an increase in management’s estimate of future annual earnings.

Proxy Summary 1

Fiscal 2014 Governance Highlights

• On November 14, 2013, the Company was recognized by the corporate governance, compliance, and legalcommunity for its 2013 proxy statement disclosure as the recipient of the 2013 award for best proxy statement(small to mid-cap) atCorporate Secretarymagazine’s sixth annual Corporate Governance Awards.
   
• At our annual meeting in June 2013, our shareholders approved an amendment to our articles of incorporationto limit certain transfers of our capital stock to protect the Company from an “ownership change” as definedunder the Internal Revenue Code, which could impair the value of the Company’s federal and state netoperating loss and other carryforwards. The amendment to our articles of incorporation was adopted tocomplement and enhance the Company’s January 2013 tax asset protection plan, which serves the samepurpose as the amendment and contains nearly identical terms protecting the value of the Company’s federaland state net operating loss and other carryforwards. As of February 2, 2014, the Company had federal netoperating loss carryforwards of approximately $174 million, as well as state net operating loss carryforwardsand federal and state tax credits that can be carried forward to future years. The aggregate carrying value ofthese carryforwards was approximately $68 million as of February 2, 2014.

Fiscal 2014 Compensation Highlights

• As a result of the Company’s superior performance against financial targets in fiscal 2014, bonuses were paidout to Named Executive Officers at 151% of the Target Cash Bonus Amount.
   
• At the Company’s 2013 annual shareholder meeting, 96.4% of shares voting voted in support of thecompensation of the Company’s named executive officers as described in the 2013 proxy statement.

Compensation Best Practices

The Compensation Committee regularly reviews executive compensation best practices when reviewing the Company’s compensation policies. The foundation of the Company’s compensation policies is to reward employees, including Named Executive Officers, for achievements that support the mission and strategic objectives of the Company. In recent years, the Compensation Committee has revised the Company’s compensation policies and practices to:

• Institute a compensation recovery policy designed to prevent “detrimental conduct” by any executive officerand certain senior officers;
   
• Institute a stock ownership and equity retention policy with significant stock ownership requirements andretention guidelines until such ownership levels are obtained;
   
• Provide for a “double-trigger” change in control arrangement in equity award agreements;
   
• Institute a fixed term and a “double-trigger” change in control severance payment arrangement in the CEO’semployment agreement;
   
• Eliminate tax gross-ups in executive employment agreements;
   
• Remove the severance trigger in the CEO’s employment agreement if the CEO remains Executive Chairmanof the Board, and if severance is triggered, limit payout formula to the lesser of two years or the remainingterm under the agreement; and
   
• Institute an annual shareholder advisory vote on say on pay.

Proxy Summary 2

2014 NEO Compensation Summary

The total compensation package for fiscal 2014 for each Named Executive Officer is set forth below. This table is not a substitute for the information disclosed in theSummary Compensation Table on page 46. We are asking shareholders to approve, on an advisory basis, the compensation of our Named Executive Officers as disclosed in this Proxy Statement.

		Stock and	Non-Equity
		Option	Incentive Plan	All Other	Total
	Salary	Awards	Compensation	Compensation	Compensation
Name	($)	($)	($)	($)	($)
James H. Morgan
President and Chief
Executive Officer	737,222	1,199,990	1,121,371	27,500	3,086,083
Douglas R. Muir
Executive Vice President
and Chief Financial Officer	376,175	424,988	343,374	7,686	1,152,223
G. Dwayne Chambers
Senior Vice President and
Chief Marketing Officer	297,750	1,467,347	228,010	3,027	1,996,134
M. Bradley Wall
Senior Vice President of
Supply Chain and
Off-Premises Operations	315,750	349,987	240,090	7,680	913,507
Cynthia A. Bay
Senior Vice President —
U.S. Franchises and
Company Stores	315,750	349,987	240,090	7,677	913,504

Primary Components of 2014 Compensation for Executive Officers

Below is a summary of the primary components of executive compensation. Additional detail regarding executive compensation is located in theCompensation Discussion & Analysis section of the Proxy Statement.

			Page Reference
Type	Form	Terms	(for more detail)
Equity	Incentive Stock Options or Restricted Stock Units	Generally received annually and with vesting over a four-year period, subject to continued service	41
Cash	Base Salary	Generally eligible for increase at periodic intervals	38
	Annual Cash Incentive	Earned based on attainment of pre-established financial performance targets	39
Other Employee Benefits	401(k), health coverage, group insurance	Receive the same employee benefits as all employees	43

Proxy Summary 3

2014 Pay Mix

Named Executive Officer (“NEO”) compensation is weighted towards variable compensation through annual and long-term incentives, in which compensation amounts vary based on Company performance, including stock price performance. As the following charts show, over 70% of CEO and NEO compensation is variable with Company performance.

CEO PAY MIX	OTHER NEO PAY MIX

Board Nominees

The following table provides summary information about each director nominee. For more detail on each director nominee, see pages 18-26. The nominees receiving a plurality of the votes cast at the meeting will be elected as Class III directors. Each director nominee serves as a current director and attended at least 75% of all Board meetings (including committee meetings) applicable to such director nominee.

									Other Current
		Director		Experience/		Committees			Public Company
Name	Age	Since	Occupation	Qualification	Independent	AC	CC	NCGC	Boards
C. Stephen Lynn	66	2007	Founder and Managing Partner of RP3, LLC	Leadership Franchising Strategic Planning Business Development	X			X	None
Michael H. Sutton	73	2004	Former Chief Accountant at the SEC	Public Accounting Financial Reporting Risk Management	X	X			None
Lizanne Thomas	56	2004	Partner-in- Charge of the Atlanta office of Jones Day	Securities Regulation Corporate Governance Risk Management	X	X		X	None

____________________
 

AC	Audit Committee
CC	Compensation Committee
NCGC	Nominating and Corporate Governance Committee

Proxy Summary 4

Independent Registered Public Accounting Firm
Although shareholder ratification is not required by law, we are asking shareholders to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal 2015. Below is a summary of fees paid to PricewaterhouseCoopers LLP in fiscal 2014. This information is not a substitute for the information disclosed in theInformation Related to Our Independent Registered Public Accounting Firmsection on page 60.

	FY 2014
Audit Fees	$	1,132,500
Audit-Related Fees		3,500
Tax Fees		5,553
All Other Fees		4,500
Total	$	1,146,053

2015 Annual Meeting Shareholder Proposals

• Shareholder proposals submitted pursuant to SEC Rule 14a-8 must be received by us by January 1, 2015.
   
• Notice of shareholder proposals outside of SEC Rule 14a-8 must be delivered to us during the period that is notless than 40 days nor more than 90 days before Krispy Kreme’s 2015 Annual Meeting of Shareholders.

Proxy Summary 5

TABLE OF CONTENTS

PROXY SOLICITATION AND GENERAL INFORMATION	1
General	1
Record Date and Share Ownership	1
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting
to Be Held on June 17, 2014	1
Voting by Shareholders with Shares Held Directly in Their Names	2
Voting by Shareholders with Shares Held Through a Bank, Brokerage Firm, or Other Nominee	2
Voting of Proxies	2
Revocability of Proxies	2
Admission to Annual Meeting	3
Quorum and Voting Requirements	3
Other Matters to Be Presented	4
Other	4
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS	5
Directors, Nominees, and Executive Officers	5
Beneficial Owners of More Than 5% of Common Stock	7
TAX ASSET PROTECTION PLAN	8
In January 2013 Krispy Kreme Adopted a Tax Asset Protection Plan to Protect
Approximately $206 Million of Valuable Tax Assets	8
In June 2013 Our Shareholders Approved an Amendment to the Articles of
Incorporation Containing Terms Complementary to the Terms of the Tax Asset Protection Plan	8
The Six-Year Term of the Plan Is Designed to Match the Expected Life of the
Tax Assets and to Save the Company Money	9
The Company’s Independent Directors Annually Review the Terms of the Plan to
Ensure That the Plan Continues to be in the Best Interest of the Company and Its Shareholders	9
The Plan Is Not Intended to be a Takeover Defense and the
Board of Directors May Grant Exemptions Under the Plan	9
CORPORATE GOVERNANCE	10
Recognition for Corporate Governance Practices	10
Director Independence	10
Board Leadership Structure	10
Board Risk Oversight	11
Code of Ethics and Business Conduct	12
BOARD OF DIRECTORS	13
Director Attendance at Annual Meeting of Shareholders	13
Communicating with the Board	13
Committees of the Board	13
Selection of Nominees for Election of the Board	15
ELECTION OF DIRECTORS	17
Composition of the Board of Directors	17
Board Nominees for Election at the Annual Meeting	17
DIRECTOR COMPENSATION	27
Narrative to Director Compensation Table	28
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION	29
EXECUTIVE OFFICERS	30
EQUITY COMPENSATION PLAN INFORMATION	31
ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
AS DISCLOSED IN OUR 2014 PROXY STATEMENT	32

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EXECUTIVE COMPENSATION	34
Compensation Discussion and Analysis	34
Compensation Committee Report	45
Risk Analysis of Compensation Plans	45
Summary Compensation Table	46
Fiscal 2014 Grants of Plan-Based Awards	47
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table	48
Outstanding Equity Awards at 2014 Fiscal Year-End	51
Fiscal 2014 Option Exercises and Stock Vested	52
Potential Payments upon Termination and Change in Control	53
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM	60
INFORMATION RELATED TO OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM	60
General	60
Fees	60
Pre-Approval of Audit and Non-Audit Services	61
REPORT OF THE AUDIT COMMITTEE FOR FISCAL YEAR 2014	62
TRANSACTIONS WITH RELATED PERSONS	63
Review, Approval, or Ratification of Transactions with Related Persons	63
Transactions with Related Persons	63
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	63
SHAREHOLDERS’ PROPOSALS FOR 2015 ANNUAL MEETING	63
HOUSEHOLDING	64
OTHER MATTERS	64
APPENDIX A — NON-GAAP RECONCILIATION	A-1
DIRECTIONS TO ANNUAL MEETING	Back Cover

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PROXY STATEMENT
May 1, 2014
For the Annual Meeting of Shareholders
To Be Held on June 17, 2014
________________

PROXY SOLICITATION AND GENERAL INFORMATION

General

    This Proxy Statement is furnished in connection with the solicitation of proxies by Krispy Kreme Doughnuts, Inc. (the “Company” or “Krispy Kreme”) for use at Krispy Kreme’s Annual Meeting of Shareholders to be held on Tuesday, June 17, 2014, at 9:00 a.m., Eastern Time, at the Marriott Hotel, Hearn Grand Ballroom, 425 North Cherry Street, Winston-Salem, North Carolina 27101, including any postponement or adjournment thereof (the “Annual Meeting”), for the purposes set forth in the accompanying notice. On or about May 1, 2014, we began mailing certain shareholders of record a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our Annual Report, via the Internet. Certain shareholders of record who submitted votes at the 2013 annual meeting of shareholders will continue to receive a paper copy of the Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report, which we began mailing on or about May 1, 2014.

Record Date and Share Ownership

Only shareholders of record at the close of business on April 11, 2014 (the “Record Date”) are entitled to notice of, and to vote in person or by proxy at, the Annual Meeting. As of the Record Date, there were 65,148,458 shares of Krispy Kreme common stock outstanding and entitled to vote at the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 17, 2014

Pursuant to rules promulgated by the SEC, we are providing access to our proxy materials over the Internet. On or about May 1, 2014, we first began mailing to shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”). The Notice contains instructions on how to access this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended February 2, 2014 (the “2014 Form 10-K”) and vote online. By furnishing our proxy materials over the Internet, we are lowering the costs and reducing the environmental impact of the Annual Meeting. The Notice of Annual Meeting of Shareholders, Proxy Statement and 2014 Form 10-K are available athttp://krispykreme.com/annualreport.

The Notice also contains instructions on how shareholders can receive a paper copy of our proxy materials, including this Proxy Statement, the 2014 Form 10-K and a form of proxy card. The Notice is not a ballot or other form for voting. Shareholders who receive a paper copy of our proxy materials, including a Proxy Statement, the 2014 Form 10-K and a form of proxy card, may vote by mail by signing, dating and returning the proxy card, by telephone, or via the Internet.

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Voting by Shareholders with Shares Held Directly in Their Names

    Shareholders with shares registered directly in their names in the Company’s stock records maintained by its transfer agent, American Stock Transfer and Trust Company (“AST”), may vote their shares:

• by mailing a signed and dated proxy card in the envelope provided;
   
• by making a toll-free telephone call in the U.S. or Canada to 1-800-690-6903; or
   
• by submitting a proxy through the Internet at the following Web address: www.proxyvote.com.

In addition, ballots will be passed out to any shareholder who wants to vote in person at the Annual Meeting.

Specific instructions to be followed by registered shareholders are set forth on the form of proxy card. Proxies submitted by mail, telephone or Internet as described above must be received by 11:59 p.m., Eastern Time, on June 16, 2014. NOTE: If you vote by telephone or Internet, you do not need to return a proxy card.

Voting by Shareholders with Shares Held Through a Bank, Brokerage Firm, or Other Nominee

Shareholders who hold shares through a bank or brokerage firm should refer to the voting instruction form forwarded by their bank or brokerage firm to see which options are available to them. In addition to voting by mail, a number of banks and brokerage firms participate in a program provided through Broadridge Financial Solutions, Inc. (“Broadridge”) that offers telephone and Internet voting options. Votes submitted by telephone or by using the Internet through Broadridge’s program must be received by 11:59 p.m., Eastern Time, on June 16, 2014.

In addition, ballots will be passed out to any shareholder who wants to vote in person at the Annual Meeting.Should you decide to attend the Annual Meeting and vote your shares in person, you MUST obtain a proxy executed in your favor from your bank or brokerage firm for your ballot to be counted.

Voting of Proxies

All properly executed proxies received in time to be voted at the Annual Meeting will be voted in accordance with the directions specified. Proxies that are executed, but do not contain any specific instructions, will be voted “FOR” the election of all nominees for director specified herein, “FOR” the approval, on an advisory basis, of the compensation of our Named Executive Officers (as defined below) as disclosed in our 2014 Proxy Statement, and “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal 2015.

Revocability of Proxies

If your shares are held directly in your name, you may revoke your proxy and change your vote at any time prior to the voting of the proxy at the Annual Meeting. You may do this by (1) sending written notice of revocation to Krispy Kreme Doughnuts, Inc., 370 Knollwood Street, Winston-Salem, North Carolina 27103, Attention: Secretary, (2) submitting a subsequent proxy by mail, telephone, or Internet with a later date, or (3) voting in person at the Annual Meeting. Attendance at the Annual Meeting will not by itself revoke a proxy.

If your shares are held through a bank, brokerage firm, or other nominee, you may revoke your proxy and change your vote at any time prior to the voting of the proxy at the Annual Meeting. You may do this by sending written notice of revocation to your bank, brokerage firm, or other nominee. Attendance at the Annual Meeting will not by itself revoke a proxy.Should you decide to attend the Annual Meeting and vote your shares in person, you MUST obtain a proxy executed in your favor from your bank, brokerage firm, or other nominee for your ballot to be counted.

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Admission to Annual Meeting

    Only shareholders of record as of the close of business on the Record Date, or their duly appointed proxies, are entitled to attend the Annual Meeting. Each admission ticket will admit the named shareholder and a guest. Seating is limited, so plan on arriving early. All shareholders will be required to present valid picture identification. IF YOU DO NOT HAVE VALID PICTURE IDENTIFICATION AND EITHER AN ADMISSION TICKET OR PROOF THAT YOU OWN KRISPY KREME STOCK, YOU WILL NOT BE ADMITTED TO THE ANNUAL MEETING.

If you are a shareholder with shares registered directly in your name, and you received a proxy card, your admission ticket is attached to the proxy card sent to you. If you plan to attend the Annual Meeting, please separate the ticket and bring it with you to the Annual Meeting. If you are a shareholder with shares registered directly in your name, and you received a Notice, you may request a proxy card and admission ticket be sent to you by following the instructions on the Notice. Alternatively, if you do not bring an admission ticket, you may show proof of ownership as of the Record Date to be admitted to the Annual Meeting. An example of proof of ownership would be an official statement or letter showing you own shares as of the Record Date. If you arrive at the Annual Meeting without an admission ticket, we will admit you ONLY if we are able to verify that you were a Krispy Kreme shareholder as of the Record Date.

If you are a shareholder with shares held through a bank or brokerage firm, your admission ticket is the left side of your voting information form. If you do not bring your admission ticket, you will need proof of ownership as of the Record Date to be admitted to the Annual Meeting. An example of proof of ownership would be a brokerage statement or a letter from your bank or brokerage firm showing you own shares as of the Record Date. If you arrive at the Annual Meeting without an admission ticket, we will admit you ONLY if we are able to verify that you were a Krispy Kreme shareholder as of the Record Date.

Quorum and Voting Requirements

Consistent with state law and our bylaws, the presence, in person or by proxy, of at least a majority of the shares entitled to vote at the Annual Meeting will constitute a quorum for the purpose of voting on a particular matter at the Annual Meeting. Once a share is represented for any purpose at the Annual Meeting, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof unless a new record date is set for the adjournment. Shares held of record by shareholders or their nominees who do not vote by proxy or attend the Annual Meeting in person will not be considered present or represented at the Annual Meeting and will not be counted in determining the presence of a quorum. As discussed below, signed proxies that withhold authority or reflect abstentions or “broker non-votes” will be counted for purposes of determining whether a quorum is present. “Broker non-votes” are proxies received from brokerage firms or other nominees holding shares on behalf of their clients who have not been given specific voting instructions from their clients with respect to non-routine matters. Each outstanding share of our common stock shall be entitled to one vote on each matter submitted to a vote at the Annual Meeting.

With respect to “routine” matters, such as the ratification of the selection of the Company’s independent registered public accounting firm, a bank, brokerage firm, or other nominee has the authority (but is not required) under the rules governing self-regulatory organizations (the “SRO rules”), including the New York Stock Exchange (“NYSE”), to vote its clients’ shares if the clients do not provide instructions. When a bank, brokerage firm, or other nominee votes its clients’ shares on routine matters without receiving voting instructions, these shares are counted both for establishing a quorum to conduct business at the meeting and in determining the number of shares voted FOR, AGAINST or ABSTAINING with respect to such routine matters.

With respect to “non-routine” matters, such as the election of directors and the advisory vote on the compensation of our Named Executive Officers (as defined below), a bank, brokerage firm, or other nominee is not permitted under the SRO rules to vote its clients’ shares if the clients do not provide instructions. The bank, brokerage firm, or other nominee will so note on the voting instruction form, and this constitutes a “broker non-vote.” “Broker non-votes” will be counted for purposes of establishing a quorum to conduct business at the meeting, but not for determining the number of shares voted FOR, AGAINST, ABSTAINING, or WITHHELD FROM with respect to such non-routine matters.

3

    In summary, if you do not vote your proxy, your bank, brokerage firm, or other nominee may either:

• vote your shares on routine matters and cast a “broker non-vote” on non-routine matters; or
   
• leave your shares unvoted altogether.

We encourage you to provide instructions to your bank, brokerage firm, or other nominee by voting your proxy. This action ensures that your shares will be voted in accordance with your wishes at the Annual Meeting.Should you decide to attend the Annual Meeting and vote your shares in person, you MUST obtain a proxy executed in your favor from your bank, brokerage firm, or other nominee for your ballot to be counted.

Assuming the presence of a quorum at the Annual Meeting:

• The election of directors will be determined by a plurality of the votes cast at the Annual Meeting. Thismeans that the three nominees receiving the highest number of “FOR” votes will be elected as Class IIIdirectors. Withheld votes and broker non-votes, if any, are not treated as votes cast, and therefore will haveno effect on the proposal to elect directors.
   
• The approval, on an advisory basis, of the compensation of our Named Executive Officers (as defined below)as disclosed in this Proxy Statement requires the votes cast in favor of the proposal to exceed the votes castagainst the proposal. Abstentions and broker non-votes are not treated as votes cast, and therefore will haveno effect on the proposal. Because your vote is advisory, it will not be binding on the Board of Directors orthe Company. However, the Board of Directors and the Compensation Committee will consider the outcomeof the vote when making future compensation decisions for the Company’s executive officers.
   
• The ratification of the appointment of our independent registered public accounting firm requires the votescast in favor of the proposal to exceed the votes cast against the proposal. Abstentions and broker non-votesare not treated as votes cast, and therefore will have no effect on the proposal. Because your vote is advisory,it will not be binding on the Board of Directors or the Company. However, the Board of Directors and theAudit Committee will consider the outcome of the vote when making future decisions regarding the selectionof the Company’s independent registered public accounting firm.

Other Matters to Be Presented

Krispy Kreme knows of no matters to be presented at the Annual Meeting other than those indicated in this Proxy Statement. If any matters not described in this Proxy Statement are properly presented at the Annual Meeting, it is the intention of the persons named in the proxy to vote your shares in accordance with their judgment.

Other

A paper copy of our 2014 Form 10-K will be furnished to each shareholder of record as of the Record Date who requests a copy.Krispy Kreme will furnish any exhibit to our 2014 Form 10-K upon written request and receipt of payment for our reasonable expenses in furnishing such exhibit. Any such request should be directed to Krispy Kreme Doughnuts, Inc., 370 Knollwood Street, Winston-Salem, North Carolina 27103, Attention: Secretary.

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VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS

Directors, Nominees, and Executive Officers

    The following table sets forth the number of shares of Krispy Kreme’s common stock, which is our only class of voting stock, beneficially owned as of April 11, 2014 by each director and nominee for director and each person who (1) at any time during fiscal 2014 was our Chief Executive Officer or Chief Financial Officer or (2) on February 2, 2014, our fiscal year-end, was one of our three most highly compensated executive officers, other than the Chief Executive Officer and the Chief Financial Officer, as well as all directors and executive officers as a group. Beneficial ownership is determined under the rules of the United States Securities and Exchange Commission (the “SEC”). These rules deem common stock (a) subject to options currently exercisable as of, or exercisable within 60 days after, the Record Date, or (b) issuable pursuant to restricted stock units vested as of, or vesting within 60 days after, the Record Date, to be outstanding for purposes of computing the number of shares owned and ownership percentage of the person holding the options or restricted stock units, or of a group of which the person is a member, but they do not deem such stock to be outstanding for purposes of computing the ownership percentage of any other person or group. Unless otherwise indicated by footnote, the owner exercises sole voting and investment power over the shares. As of April 11, 2014, no directors or executive officers hold Krispy Kreme common stock in margin accounts or have Krispy Kreme common stock pledged for a loan or stock purchase.

		Percentage
	Number of Shares	Beneficially
Name of Beneficial Owner	Beneficially Owned	Owned
Cynthia A. Bay(1)	365,750	*
Charles A. Blixt(2)	238,711	*
Lynn Crump-Caine(3)	214,711	*
G. Dwayne Chambers(4)	103,960	*
C. Stephen Lynn(5)	214,741	*
Robert S. McCoy, Jr.(6)	233,918	*
James H. Morgan(7)	1,265,009	1.9	%
Douglas R. Muir(8)	609,067	*
Andrew J. Schindler(9)	226,418	*
Michael H. Sutton(10)	225,918	*
Lizanne Thomas(11)	226,418	*
M. Bradley Wall(12)	595,990	*
Togo D. West, Jr.(13)	215,782	*
All directors and executive officers as a group (16 persons)	5,191,579	8.0	%

____________________
 

*	Less than one percent
(1)	Includes 325,000 shares upon the exercise of currently exercisable stock options.
(2)	Includes (a) 212,995 shares underlying fully vested restricted stock units, and (b) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Mr. Blixt has elected to defer receipt of all shares underlying the restricted stock units, which will be distributed in a single lump sum share distribution following termination of his service on the Board of Directors.
(3)	Consists of (a) 212,995 shares underlying fully vested restricted stock units, and (b) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Ms. Crump-Caine has elected to defer receipt of all shares underlying the restricted stock units, which will be distributed in a single lump sum share distribution following termination of her service on the Board of Directors.
(4)	Includes 76,250 shares issuable upon the exercise of currently exercisable stock options.

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(5)	Consists of (a) 30 shares beneficially owned by Milah Lynn, Mr. Lynn’s spouse, (b) 212,995 shares underlying fully vested restricted stock units, and (c) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Mr. Lynn has elected to defer receipt of the 212,995 shares underlying the fully vested restricted stock units, which will be distributed in a single lump sum share distribution following termination of his service on the Board of Directors. Mr. Lynn has elected not to defer receipt of the 1,716 shares underlying the unvested restricted stock units.
(6)	Consists of (a) 7,500 shares issuable upon the exercise of currently exercisable stock options, (b) 224,702 shares underlying fully vested restricted stock units, and (c) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Mr. McCoy has elected to defer receipt of all shares underlying the restricted stock units, which will be distributed in a single lump sum share distribution following the termination of his service on the Board of Directors.
(7)	Includes (a) 4,000 shares owned beneficially by Margaret O. Morgan, Mr. Morgan’s spouse, (b) 995,000 shares issuable upon the exercise of currently exercisable stock options, (c) 166,198 shares issuable upon the exercise of currently unvested stock options that would vest upon retirement, and (d) 74,664 shares underlying currently unvested restricted stock units that would vest upon retirement.
(8)	Includes (a) 370,483 shares issuable upon the exercise of currently exercisable stock options, (b) 109,019 shares issuable upon the exercise of currently unvested stock options that would vest upon retirement, and (c) 44,419 shares underlying currently unvested restricted stock units that would vest upon retirement.
(9)	Consists of (a) 224,702 shares underlying fully vested restricted stock units, and (b) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Mr. Schindler has elected to defer receipt of all shares underlying the restricted stock units, which will be distributed in a single lump sum share distribution following the termination of his service on the Board of Directors.
(10)	Consists of (a) 224,202 shares underlying fully vested restricted stock units, and (b) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Mr. Sutton has elected to defer receipt of 215,471 shares underlying fully vested restricted stock units, which will be distributed in a single lump sum share distribution following the termination of his service on the Board of Directors. Mr. Sutton has elected not to defer receipt of the 1,716 shares underlying the unvested restricted stock units.
(11)	Consists of (a) 224,702 shares underlying fully vested restricted stock units, and (b) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Ms. Thomas has elected to defer receipt of the 224,702 shares underlying the fully vested restricted stock units, which will be distributed in a single lump sum share distribution following the termination of her service on the Board of Directors. Ms. Thomas has elected not to defer receipt of the 1,716 shares underlying the unvested restricted stock units.
(12)	Includes (a) 558,706 shares issuable upon the exercise of currently exercisable stock options and (b) 450 shares held in a brokerage account in the name of Mr. Wall and his spouse.
(13)	Includes (a) 212,066 shares underlying fully vested restricted stock units and (b) 1,716 shares underlying unvested restricted stock units that will vest within 60 days of the Record Date. Mr. West has elected to defer receipt of the shares underlying 145,613 of fully vested restricted stock units, which will be distributed in a single lump sum share distribution following the termination of his service on the Board of Directors. Mr. West also has elected to defer receipt of the 1,716 shares underlying unvested restricted stock units.

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Beneficial Owners of More Than 5% of Common Stock

    The following table sets forth information about each person or entity known to Krispy Kreme to be the beneficial owner of more than 5% of Krispy Kreme’s outstanding common stock as of April 11, 2014. The ownership for each of the entities listed below is based on a Schedule 13G filed with the SEC. Accordingly, the share ownership reported below is determined under Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

		Percentage
	Number of Shares	Beneficially
Name of Beneficial Owner	Beneficially Owned	Owned(4)
T. Rowe Price Associates, Inc.(1)	10,072,994	15.2%
100 East Pratt Street
Baltimore, MD 21202
The Vanguard Group, Inc.(2)	3,830,063	5.8%
100 Vanguard Blvd.
Malvern, PA 19355
BlackRock, Inc.(3)	3,693,027	5.6%
40 East 52ndStreet
New York, NY 10022

____________________
 

(1)	The information reported is based on a Schedule 13G filed with the SEC on February 7, 2014 reporting sole power of T. Rowe Price Associates, Inc. (“Price Associates”) to vote, or direct the vote of, 1,789,044 shares and sole power to dispose, or direct the disposition of, 10,072,994 shares. These securities are owned by various individual and institutional investors, including T. Rowe Price New Horizons Fund, Inc. (which owns 5,256,950 shares, representing 7.9% of the shares outstanding), to which Price Associates serves as an investment adviser with power to direct and/or sole power to vote the securities. For purposes of the Exchange Act, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities.
(2)	The information reported is based on a Schedule 13G filed with the SEC on February 11, 2014 reporting sole power of The Vanguard Group, Inc. to vote, or direct the vote of, 91,200 shares; sole power to dispose, or direct the disposition of, 3,742,463 shares; and shared power to dispose, or direct the disposition of, 87,600 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 87,600 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 3,600 shares as a result of its serving as investment manager of Australian investment offerings.
(3)	The information reported is based on a Schedule 13G filed with the SEC on January 29, 2014 reporting sole power of BlackRock, Inc. to vote, or direct the vote of, 3,482,122 shares and sole power to dispose, or direct the disposition of, 3,693,027 shares. Various persons have the right to receive, or the power to direct, the receipt of dividends from, the proceeds from the sale of the Company’s common stock. No one person’s interest in the Company’s common stock is more than five percent of the total outstanding common shares.
(4)	Pursuant to SEC rules and regulations, this beneficial ownership table reports beneficial ownership based on Rule 13d-3 of the Exchange Act. Although certain persons or entities may be deemed to own more than 5% of the Company’s common shares under Rule 13d-3 of the Exchange Act, such shares may not be aggregated similarly for purposes of Section 382 of the Internal Revenue Code. See “Tax Asset Protection Plan” below for more information. In September 2013, the Company’s Board of Directors granted an exemption under the Company’s tax asset protection plan to Price Associates because the Price Associates ownership did not threaten the Company’s tax assets under Section 382 of the Internal Revenue Code. The Vanguard share ownership does not implicate the Company’s tax asset protection plan because the Vanguard shares are not aggregated for purposes of Section 382 of the Internal Revenue Code. Similarly, the BlackRock share ownership does not implicate the Company’s tax asset protection plan because the BlackRock shares are not aggregated for purposes the Section 382 of the Internal Revenue Code.

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TAX ASSET PROTECTION PLAN

In January 2013 Krispy Kreme Adopted a Tax Asset Protection Plan to Protect Approximately $206 Million of Valuable Tax Assets

    As of February 3, 2013, the Company had approximately $206 million of federal net operating losses, as well as state operating losses and federal and state tax credits, which can be carried forward to future years, thereby reducing the amount of taxes payable by the Company in subsequent years. These carryforwards had a carrying value of approximately $81 million as of February 3, 2013.

Section 382 of the Internal Revenue Code (the “Code”), limits the Company’s ability to make use of these carryforwards in the event of a significant change in ownership of the Company’s common shares by shareholders owning 5% or more of the Company’s shares. Specifically, a cumulative change of more than 50% of the Company’s shares during any three year period by shareholders owning 5% or more of the Company’s stock would trigger a limitation. Certain Company actions, including share repurchases, would also add to the cumulative ownership change. Because a limitation in the Company’s ability to utilize its tax carryforwards could increase the amount of the Company’s future tax payments or accelerate the timing of such payments, a limitation could have a material adverse effect on the Company’s cash flows and financial position.

Therefore, on January 14, 2013, the Company’s Board of Directors adopted a tax asset protection plan (the “Plan”) to mitigate the risk of losing these valuable carryforwards. The Plan deters persons from acquiring more than 4.99% of the Company’s common shares, which should have the effect of substantially reducing the likelihood of an ownership change and any resulting limitation on the Company’s ability to utilize its carryforwards. Under the Plan, subject to certain exceptions, the acquisition by any person or group of 4.99% or more of the Company’s outstanding shares of common stock makes that person or group an “acquiring person” and could result in significant dilution in the ownership and economic interest of such acquiring person. This potential dilution acts as a strong deterrent against stock acquisitions that may result in an ownership change that could give rise to a limitation on the Company’s ability to utilize the carryforwards.

Under the terms of the Plan, the Board of Directors is granted the discretion to exempt persons from the 4.99% threshold if it were to determine that such ownership is in the best interests of shareholders and not inconsistent with the purpose of the Plan. The Plan will expire if the net operating loss carryforwards are utilized in all material respects or are no longer available in any material respect. Otherwise, the Plan will expire on January 14, 2019.

In June 2013 Our Shareholders Approved an Amendment to the Articles of Incorporation Containing Terms Complementary to the Terms of the Tax Asset Protection Plan

Although the Plan serves as a strong deterrent to discourage persons from acquiring more than 4.99% of the Company’s common shares, impairment of the Company’s carryforwards could occur because the Plan is not an absolute prohibition against transactions that might lead to an ownership change under Section 382 of the Code. Accordingly, after careful consideration, the Board of Directors determined that it was in the best interests of the Company to also amend the Company’s Articles of Incorporation to preserve the benefits of our carryforwards by including transfer restrictions that invalidate transactions whereby a person acquires more than 4.99% of the Company’s common shares.

On March 25, 2013, the Board of Directors declared advisable and approved that amendment to the Company’s Articles of Incorporation, subject to the approval of the Company’s shareholders. The Company’s 2013 proxy statement explained in detail the Company’s carryforwards, Section 382 of the Code, and the Plan. The Board asked shareholders to approve the amendment to the Company’s Articles of Incorporation to complement and enhance the terms of Plan. At the 2013 annual meeting held on June 18, 2013, our shareholders approved the amendment to the Company’s Articles of Incorporation to invalidate transactions whereby a person acquires more than 4.99% of the Company’s common shares. Of the shares voted, more than 60% approved the amendment, voicing their approval of so protecting the Company’s valuable carryforwards.

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    Similar to the Plan and containing complementary terms, the transfer restrictions in the amendment generally restrict any direct or indirect transfer of any of the Company’s capital stock if the effect would be to increase the direct or indirect ownership of any of our capital stock by any person to 4.99% or more (a “five percent shareholder”) or increase the percentage of our capital stock owned directly or indirectly by any person that was a five percent shareholder as of the effective time of the amendment. Also like the Plan, the amendment grants the Board of Directors discretion to exempt persons from the 4.99% threshold if it determines that such ownership is in the best interest of the Company. In addition, like the Plan, the amendment would expire if the carryforwards are utilized in all material respects or are no longer available in any material respect. Otherwise, the amendment will expire on January 14, 2019.

The Six-Year Term of the Plan Is Designed to Match the Expected Life of the Tax Assets and to Save the Company Money

As discussed above, as of February 3, 2013, the Company had approximately $206 million of net operating loss carryforwards that could be carried forward to future years to offset taxable income the Company earns in the future, as well as tax credit carryforwards to offset future taxes payable after the exhaustion of the loss carryforwards. Based on the recent performance of the Company and management’s outlook for the future, the Company believed that these carryforwards would not be exhausted until fiscal 2019 at the earliest. Accordingly, the Plan’s final expiration date is January 14, 2019, assuming the Board of Directors does not determine to terminate the Plan earlier. In selecting a six-year sunset on the plan, an important consideration of the Board of Directors was the efficient use of Company resources. A shorter term for the Plan would not have served the shareholders. If the Plan had a term shorter than six years, the Company would be required to plow the same ground, spending money on the professional fees associated with the implementation of a new tax asset protection plan or the renewal of the current Plan.

The Company’s Independent Directors Annually Review the Terms of the Plan to Ensure That the Plan Continues to be in the Best Interest of the Company and Its Shareholders

Even though the Plan has a six-year term, the terms of the plan provide that the independent directors of the Company will evaluate the Plan annually to determine whether it continues to be in the best interest of the Company’s shareholders. The Company’s independent directors conducted such an annual assessment in January 2014 and determined that the Plan remains in the best interest of the shareholders because it discourages persons from acquiring more than 4.99% of the Company’s common shares, which should have the effect of substantially reducing the likelihood of an ownership change and any resulting limitation on the Company’s ability to utilize its carryforwards. As of February 2, 2014, the Company had approximately $174 million of federal net operating losses, as well as state operating losses and federal and state tax credits, that can be carried forward to future years, thereby reducing the amount of taxes payable by the Company in future years. These carryforwards had a carrying value of approximately $68 million as of February 2, 2014.

The Plan Is Not Intended to be a Takeover Defense and the Board of Directors May Grant Exemptions Under the Plan

As discussed above, under the terms of the Plan, the Board of Directors has the ability to exempt persons from the 4.99% threshold if it determines that such ownership is in the best interest of shareholders and not inconsistent with the purpose of the Plan. Specifically, the Company only desires to avoid an “ownership change” within the meaning of Section 382 of the Code so that the Company can preserve its ability to utilize its valuable carryforwards. If the 4.99% threshold is met under the terms of the Plan, but an “ownership change” is not at risk under the specific regulations of Section 382 of the Code, the Company may grant an exemption under the Plan. The Board intends to make that determination on a case-by-case basis and in the best interests of the shareholders.

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CORPORATE GOVERNANCE

Recognition for Corporate Governance Practices

On November 14, 2013, the corporate governance, compliance, and legal community recognized the Company for its 2013 proxy statement disclosure as the recipient of the 2013 award for best proxy statement (small to mid-cap) atCorporate Secretary magazine’s sixth annual Corporate Governance Awards. This award recognizes the best overall small to mid-cap proxy statement in the country based on the completeness of legal disclosures, the effectiveness of communication elements, readability, and overall layout.

This recognition follows the Company’s award for its governance practices as the recipient of the 2012 governance team of the year award (small cap) atCorporate Secretary magazine’s fifth annual Corporate Governance Awards.

Director Independence

Under our Corporate Governance Guidelines, which are available on our website athttp://krispykreme.com/corporategovernance, a substantial majority of our directors must meet the criteria for “independent” directors set forth in the listing standards of the NYSE. In reaching a determination that a director’s or nominee’s relationship with the Company is not material, and such director or nominee is therefore independent, the Board of Directors has determined that such director or nominee, in addition to satisfying other requirements of the NYSE listing standards relating to independent directors set forth in Section 303A.02 of the NYSE Listed Company Manual, has no direct or indirect material relationship with the Company. In order to assist the Board of Directors in making this determination, the Board of Directors has adopted the following standards, as part of the Company’s Corporate Governance Guidelines, which identify relationships that a director may have with the Company that will not be considered material:

• If a director is an executive officer of another company which does business with Krispy Kreme and theannual revenues derived from that business are less than 1% of either company’s total revenues for the lastfiscal year.
   
  
• If a director is a director, officer or trustee of a charitable organization and Krispy Kreme’s annual charitablecontributions to the organization (exclusive of gift-match payments) are less than 1% of the organization’stotal annual charitable receipts during the last fiscal year of such organization.
   
  
• If a director is a partner of or of counsel to a law firm that performs legal services for Krispy Kreme andpayments made by Krispy Kreme to the firm during a fiscal year are not for legal services performed by thedirector or his immediate family and do not exceed 1% of the firm’s gross revenues for the last fiscal year.

The Board of Directors has determined that each of our current directors and nominees for director, other than Mr. Morgan, who, as discussed below, serves as President and Chief Executive Officer, has no disqualifying material relationship with Krispy Kreme and is an “independent” director under the listing standards of the NYSE and applicable SEC rules. Except as previously described, no other transactions, relationships, or arrangements were considered by the Board in making a determination that each of the foregoing directors is independent.

Board Leadership Structure

The Board of Directors is led by the Chairman, and the Board also has a Lead Independent Director. Krispy Kreme’s bylaws provide that the Board appoints the Chairman to preside at all meetings of the Board of Directors and shareholders and perform such other duties and have such other powers as the Board of Directors may prescribe. Krispy Kreme’s bylaws and Corporate Governance Guidelines each provide that the Chairman may also hold the position of Chief Executive Officer. The Board selects its Chairman and the Company’s Chief Executive Officer in the manner it considers to be in the best interest of the Company. In accordance with Krispy Kreme’s Corporate Governance Guidelines, the Board considers from time to time whether it is in the best interest of the Company to have the same person occupy the offices of Chairman and Chief Executive Officer, using its business judgment after considering all relevant circumstances. Krispy Kreme’s Corporate Governance Guidelines provide that, in

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compliance with the applicable rules of the NYSE, the Company will appoint a Lead Independent Director, who will preside over each session of the non-management directors. The Lead Independent Director also assists the Chairman and the remainder of the Board in assuring effective governance in overseeing the direction and management of Krispy Kreme. The Board believes that the Lead Independent Director serves an important corporate governance function by providing separate leadership for the non-management directors.

James H. Morgan, Chief Executive Officer of Krispy Kreme, has served as Chairman of the Board since 2005, The Board believes that having a unified Chairman and Chief Executive Officer is appropriate and in the best interest of Krispy Kreme and its shareholders at this time. Specifically, combining the Chairman and Chief Executive Officer roles provides the following advantages to Krispy Kreme: (1) the Chief Executive Officer is the director most familiar with Krispy Kreme’s business operations and is therefore in the best position to lead discussions on matters of importance to the Company; (2) combining the Chairman and Chief Executive Officer roles promotes communications between management and the Board; and (3) the combined roles of Chairman and Chief Executive Officer increase the effectiveness and efficiency of the Board without undermining its independence and ability to be effective with respect to its risk-management and oversight responsibilities, both of which are supported by the role of the Lead Independent Director.

Robert S. McCoy, Jr. has served as Lead Independent Director since 2008. Pursuant to Krispy Kreme’s Corporate Governance Guidelines, our non-management directors meet in executive session at each regularly scheduled meeting of the Board of Directors without any members of management being present. Mr. McCoy presides at these meetings of our non-management directors.

Board Risk Oversight

The Board is responsible for overseeing and evaluating the effectiveness of management’s risk-management activities and, where appropriate, actively participates in the Company’s risk management processes. These activities include identifying, assessing, and mitigating internal and external risks, and ensuring compliance with laws and regulations to which the Company is subject. The members of the Board bring to Krispy Kreme significant risk-assessment and risk-management experience, and the Board takes an active role in fulfilling its responsibilities. In addition to exercising its oversight role, the Board actively evaluates risks to the business as part of its deliberation on matters brought to its attention or which otherwise become a subject of the Board’s attention. The Board also exercises oversight to include risk management as an integral part of the Company’s strategic decision making. The Board regularly reviews information regarding the Company’s sources of credit and liquidity, its operations, business plans and reputation, and considers risks associated with these matters, including risks to the successful execution of the Company’s strategic plans. The Board considers the totality of the Company’s risk-management activities and its risk-oversight role in evaluating the appropriateness of the combined role of Chairman and Chief Executive Officer and in selecting the Lead Independent Director.

In addition to the broad risk-oversight functions performed by the Board as a whole, the Board has tasked certain of its committees with responsibility for evaluating risks associated with specific elements of the Company’s business, operations or governance, or with evaluating management’s assessments of these risks. Each committee regularly reports to the full Board, among other things, important risk-management matters considered by that committee.

Audit Committee

The Audit Committee oversees the manner in which management assesses, monitors and manages the Company’s risk exposures, the adequacy of management’s risk-mitigation activities, and the appropriate disclosure of risk factors in the Company’s public filings, including those identified in the Company’s most recent Annual Report on Form 10-K. The Company has written policies, programs and internal controls in place, which facilitate the identification and management of risks. The Company’s Chief Financial Officer, Vice President of Internal Audit, and General Counsel, together with the Company’s executive officers, bear primary responsibility for developing, implementing and maintaining these policies and programs. The Audit Committee’s process for performing its oversight role includes review and assessment of the Company’s written risk-management policies and program. These policies focus on identifying the probability and potential severity of the significant risks to which the Company

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is exposed, the appropriateness of mitigation efforts, the performance and efficacy of those mitigation efforts, and an evaluation of residual risk levels after considering risk-mitigation activities. This year, the Audit Committee has focused particular attention on risks associated with the Company’s selection and implementation of an Enterprise Resource Planning (“ERP”) system for managing the Company’s business. At regularly scheduled meetings, management reports to the Audit Committee on the Company’s risk-management activities. The Audit Committee provides quarterly reports to the Board of Directors on the status of the Company’s ERP system implementation and its risk-management activities.

Compensation Committee

The Compensation Committee is responsible for overseeing the management of risks related to the Company’s compensation policies and practices and for overseeing the evaluation of the Company’s management. The Compensation Committee accomplishes this duty by assessing the risks associated with each of the compensation plans used by the Company, including not only those plans applicable to executive officers, but also plans applicable to other employees. The Compensation Committee also receives advice from Frederic W. Cook & Co., its independent compensation consultant, regarding compensation-based risk issues.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board of Directors and potential conflicts of interest. It also oversees the annual self-evaluation of the Board and its committees.

Code of Ethics and Business Conduct

Krispy Kreme has adopted codes of business conduct and ethics applicable to its directors, officers, and other employees, which are available on our website. Our Code of Business Conduct and Ethics is available athttp://www.krispykreme.com/code_of_ethics.pdf and our Code of Ethics for Chief Executive and Senior Financial Officers is available athttp://www.krispykreme.com/officers_ethics.pdf. Any amendment (other than any technical, administrative, or other non-substantive amendment) to or waiver of a provision of these codes of ethics that applies to any Krispy Kreme director or executive officer will also be disclosed on our website.

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BOARD OF DIRECTORS

The Board of Directors is charged with managing the business and affairs of Krispy Kreme in accordance with North Carolina law. In doing so, directors must exercise their business judgment in good faith in a manner consistent with their duty of loyalty and act in what they reasonably believe to be in the best interest of Krispy Kreme.

During Krispy Kreme’s fiscal year ended February 2, 2014, the Board of Directors held six meetings. During fiscal 2014, all of our current directors attended at least 75% of all meetings (including committee meetings) applicable to such director.

Director Attendance at Annual Meeting of Shareholders

Krispy Kreme’s Corporate Governance Guidelines provide that directors are expected to attend the Annual Meetings of Shareholders. All of our directors attended our 2013 Annual Meeting of Shareholders held on June 18, 2013.

Communicating with the Board

Shareholders and other interested parties may contact any of the Company’s directors, a committee of the Board of Directors, the Company’s non-management directors or the Board of Directors generally, by writing to them in care of Krispy Kreme Doughnuts, Inc., 370 Knollwood Street, Winston-Salem, North Carolina 27103, Attention: Secretary. Correspondence will be forwarded as directed by the writer. The Company may first review, sort, and summarize such communications. Solicitations, junk mail, and frivolous or inappropriate communications will not be forwarded.

All concerns related to accounting, internal accounting controls, or audit matters should be directed in writing to the Chair of the Audit Committee in care of Krispy Kreme Doughnuts, Inc., 370 Knollwood Street, Winston-Salem, North Carolina 27103, Attention: Secretary. These concerns will be handled in accordance with the procedures established by the Audit Committee with respect to such matters.

Committees of the Board

The Board of Directors has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee to which it has assigned certain responsibilities in connection with the management of Krispy Kreme’s affairs. The Board of Directors designates which directors will serve as the members of these committees. The Board of Directors has adopted written charters for each of these committees setting forth the roles and responsibilities of each committee. Our Audit Committee Charter, our Compensation Committee Charter, and our Nominating and Corporate Governance Committee Charter are available under the “Corporate Governance” tab of the Investor Relations section of our website athttp://investor.krispykreme.com.

Audit Committee

The purposes for which the Audit Committee was established include assisting the Board of Directors in monitoring the integrity of our financial statements, compliance with legal and regulatory requirements, the manner in which management assesses, monitors, and manages the Company’s risk exposure and the adequacy of the Company’s risk management activities, the qualifications and independence of our independent registered public accounting firm, and the performance of our internal audit function and independent registered public accounting firm. The Audit Committee also monitors the integrity of the Company’s financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance, and provides an avenue of communication among the Company’s independent registered public accounting firm, management, internal audit department, and the Board of Directors. As part of its responsibilities, the Audit Committee annually appoints Krispy Kreme’s independent registered public accounting firm, oversees its work, and approves all fees and other compensation paid to it. Chair Robert S. McCoy, Jr., Charles A. Blixt, Michael H. Sutton, and Lizanne Thomas are the current members of the Audit Committee. During fiscal 2014, Andrew J. Schindler served on the Audit Committee. Mr. Schindler served on the Audit Committee until February 3, 2014, on which date Ms. Thomas and Mr. Blixt joined the Audit Committee.

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The Board of Directors has determined that each Audit Committee member is “independent” under the listing standards of the NYSE and the applicable rules of the SEC, and financially literate within the meaning of the listing standards of the NYSE, and that Messrs. Blixt, McCoy and Sutton, and Ms. Thomas is each an “audit committee financial expert” under the applicable rules of the SEC (as was Mr. Schindler). The Audit Committee meets the definition of an audit committee as set forth in Section 3(a)(58)(A) of the Exchange Act. The Audit Committee held eleven meetings during fiscal 2014. See “Report of the Audit Committee for Fiscal Year 2014” below.

Compensation Committee

The responsibilities of the Compensation Committee include overseeing the evaluation of executive officers (including the Chief Executive Officer) of the Company, determining the compensation of executive officers of the Company, overseeing the management of risks associated therewith, reviewing and approving performance targets applicable to the annual incentive component of the executive officers’ compensation (including the Chief Executive Officer), and, in consultation with the other non-management directors of the Board, reviewing and approving goals and objectives relevant to the performance evaluation of the Company’s Chief Executive Officer and evaluating the Chief Executive Officer in light of those goals and objectives. The Compensation Committee determines and approves the Chief Executive Officer’s compensation. The Compensation Committee determines awards to all equity-based plan participants, including our executive officers, of stock options, restricted stock, restricted stock units, and other awards pursuant to any of our stock-related plans in effect from time to time. In addition, the Compensation Committee administers our annual incentive compensation plans applicable to our executive officers. The Compensation Committee administers our equity-based plans and makes recommendations to the Board of Directors with respect to actions that are subject to approval of the Board of Directors regarding such plans. The Compensation Committee also reviews and makes recommendations to the Board of Directors with respect to the compensation of directors. The Compensation Committee may form and delegate authority to sub-committees when appropriate. The Compensation Committee monitors the risks associated with the Company’s compensation policies and practices, as contemplated by Item 402(s) of Regulation S-K. Chair Lynn Crump-Caine, Andrew J. Schindler, and Togo D. West, Jr. are the current members of the Compensation Committee. During fiscal 2014, Lizanne Thomas served on the Compensation Committee. Ms. Thomas served on the Compensation Committee until February 3, 2014, on which date Mr. Schindler joined the Compensation Committee.

The Board of Directors has determined that each such member is “independent” under the listing standards of the NYSE, meets the requirements of a “non-employee director” under Rule 16b-3 under the Exchange Act and meets the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The Compensation Committee held seven meetings during fiscal 2014. See “Executive Compensation — Compensation Committee Report.”

Nominating and Corporate Governance Committee

The responsibilities of the Nominating and Corporate Governance Committee include identifying individuals qualified to become members of the Board of Directors consistent with criteria approved by the Board of Directors, recommending to the Board of Directors the director nominees for the next annual meeting of shareholders, recommending to the Board of Directors candidates for filling vacancies or newly created directorships that may occur between annual meetings of shareholders, reviewing the composition and size of the Board of Directors and its committees to ensure proper expertise and diversity, as well as managing the risks associated with director independence and potential conflicts of interest, overseeing the evaluation of the Board of Directors and its committees, and developing and recommending to the Board of Directors the Corporate Governance Guidelines applicable to Krispy Kreme. Chair Lizanne Thomas, Lynn Crump-Caine, C. Stephen Lynn, and Togo D. West, Jr. are the current members of the Nominating and Corporate Governance Committee. The Board of Directors has determined that each such member is “independent” under the listing standards of the NYSE. The Nominating and Corporate Governance Committee held four meetings during fiscal 2014.

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Selection of Nominees for Election of the Board

Nominations Process

The Nominating and Corporate Governance Committee is responsible for identifying and recommending to the Board of Directors nominees for election as directors by our shareholders, as well as candidates to fill any vacancies on the Board of Directors that may occur. The Nominating and Corporate Governance Committee is also responsible for considering any nominees for director properly submitted by shareholders in accordance with the procedures set forth in Krispy Kreme’s bylaws.

Identifying and Evaluating Nominees for Directors

The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Nominating and Corporate Governance Committee regularly assesses the appropriate size of the Board of Directors, and whether any vacancies on the Board of Directors are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the Nominating and Corporate Governance Committee considers potential candidates for director. Candidates may come to the attention of the Nominating and Corporate Governance Committee through current directors, shareholders, director search firms, or other persons. These candidates are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee and may be considered at any point during the year. As described below, the Nominating and Corporate Governance Committee considers properly submitted shareholder nominations of candidates for the Board of Directors. See “Shareholder Nominations” below. The Nominating and Corporate Governance Committee maintains an extensive due diligence process to review potential director candidates and their individual qualifications, and all such candidates, including those submitted by shareholders, will be similarly evaluated by the Nominating and Corporate Governance Committee using the board membership criteria described below. The Nominating and Corporate Governance Committee is responsible for interviewing prospective candidates, keeping the Board informed during the selection process, and approving and recommending final candidates to the Board.

Director Qualifications

Our Corporate Governance Guidelines establish certain qualifications to be considered by the Nominating and Corporate Governance Committee in selecting nominees for director. Our full Board of Directors approves nominees for director. Under our Corporate Governance Guidelines, consideration is given to each individual director’s personal qualities and abilities, the collective skills and aptitudes of all of the directors, taking into account the responsibilities of the Board of Directors, and qualifications imposed by law and regulation. In addition, directors should be persons who have achieved prominence in their respective fields, have experience at a strategy/policy setting level, have high-level managerial experience in a relatively complex organization, or are accustomed to dealing with complex problems. Directors should possess integrity, independence, energy, forthrightness, analytical skills, and commitment to devote the necessary time and attention to the Company’s affairs. In accordance with our Corporate Governance Guidelines, directors cannot serve on more than three other boards of directors of public companies, nor more than two other audit committees of boards of directors of public companies. The Nominating and Corporate Governance Committee works with the Board of Directors to determine the appropriate characteristics, skills, and experiences for the Board as a whole and its individual members with the objective of having a board with diverse backgrounds and experience. In evaluating the suitability of individual Directors, the Nominating and Corporate Governance Committee believes the Board should reflect a variety of opinions, perspectives, personal and professional experiences, and backgrounds, such as, age, gender, race, and ethnicity differences, as well as other differentiating characteristics. In addition, each Director should contribute positively to the existing chemistry and collaborative culture among Board members. Each member of the Board should contribute to the overall Board composition, with the goal of creating a Board that can work collaboratively to guide the success of the Company and represent shareholder interests through the exercise of sound judgment using its diversity of experience. Directors should be willing to challenge and stimulate management and must be able to work as part of a team in an environment

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of trust. Directors should be committed to representing the interests of all shareholders and not to advancing the interests of special interest groups or constituencies of shareholders. The Nominating and Corporate Governance Committee of the Board of Directors is responsible for reviewing the qualifications of directors and may, from time to time, establish additional qualifications for directors as it deems appropriate.

Shareholder Nominations

Our Nominating and Corporate Governance Committee will consider director candidates properly nominated by a Krispy Kreme shareholder entitled to vote at the next election in accordance with the procedures set forth in Krispy Kreme’s bylaws. These procedures generally require that shareholders deliver nominations by written notice to the Secretary at our principal executive office setting forth certain prescribed information about the nominee and the nominating shareholder. These procedures also generally require that the nomination notice be submitted not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting of shareholders for the preceding year. You may contact Krispy Kreme’s Secretary at our principal executive office for a copy of the relevant provisions of our bylaws regarding the requirements for shareholder nomination of director candidates. In evaluating such shareholder nominations, the Nominating and Corporate Governance Committee will take into consideration the director qualifications set forth in “Director Qualifications” above. Krispy Kreme’s bylaws provide that only persons who are nominated in accordance with the procedures set forth in our bylaws are eligible for election as directors at an annual meeting of shareholders.

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ELECTION OF DIRECTORS
(Item Number 1 on the Proxy Card)

Composition of the Board of Directors

Our bylaws provide that the Board of Directors shall consist of not less than nine nor more than 15 directors, with the exact number being set from time to time by the Board of Directors. Our Board of Directors presently consists of nine directors. The Board of Directors is divided into three classes of directors, Class I, Class II, and Class III. The terms of all of our current Class III directors will expire at this Annual Meeting.

Board Nominees for Election at the Annual Meeting

Based on the recommendation of the Nominating and Corporate Governance Committee, our Board of Directors has nominated C. Stephen Lynn, Michael H. Sutton, and Lizanne Thomas for election to the Board of Directors as Class III Directors with terms expiring in 2017.

Each nominee has consented to being named in this Proxy Statement and to serve if elected. If, prior to the Annual Meeting, any nominee should become unable or unwilling to serve, the shares of common stock represented by a properly executed and returned proxy will be voted for such additional person as shall be designated by the Board of Directors.

The Board of Directors recommends a vote “FOR” the nominees for director listed below for election to the Board of Directors.

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Set forth below is information regarding each nominee for director:

Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Nominees
Nominees for Class III Director With Terms Expiring in 2017
C. Stephen Lynn Nashville, TN Director since 2007 Independent Nominating and Corporate Governance Committee	Mr. Lynn, 66, has served since January 2012 as founder and managing partner of RP3, LLC, a consulting and mergers and acquisitions firm focusing on franchising and restaurant chains. From 2009 to August 2012, Mr. Lynn was Chairman of the Board of Directors of BBAC, LLC, an investment partnership that privately held Back Yard Burgers, Inc., a quick service restaurant chain. Mr. Lynn was Chief Executive Officer of Back Yard Burgers, Inc. from 2007 to 2010 and was a Director from 2005 to August 2012. Additionally, Mr. Lynn has served as Chairman of Cummings Incorporated, a fully integrated provider of branding services to national and regional accounts, from 1999 to 2011; Chairman and Chief Executive Officer of Shoney’s, Inc. from 1995 to 1998; and Chairman and Chief Executive Officer of Sonic Corporation from 1983 to 1995. Mr. Lynn began his franchising experience as Director of the Distribution Division at Kentucky Fried Chicken Corporation from 1973 to 1978. Mr. Lynn brings strong leadership, franchising, strategic-planning, and business-development skills to the Krispy Kreme Board through his vast experience in the quick-service and casual/family-dining restaurant segments of the industry. His executive positions at Sonic, Shoney’s, and Back Yard Burgers provide franchising, business-development, and risk-assessment and management skills that are directly applicable to Krispy Kreme’s business. Mr. Lynn has been recognized as an authority in franchising and was the 1993 Chairman of the International Franchise Association (IFA), a membership organization of franchisors, franchisees, and suppliers. He was inducted into the IFA’s Hall of Fame in 1997. Mr. Lynn’s experience as a leader in the franchising community is valuable to Krispy Kreme’s domestic and international franchising and growth strategies. Mr. Lynn is active in, and brings experience from, many community and civic organizations through his service on the Board of Directors of Tennessee Tech University Foundation, and The National Cowboy and Western Heritage Museum. Other Directorships: Mr. Lynn served on the Board of Directors of Back Yard Burgers, Inc. from 2005 to 2012, as Chairman of BBAC, LLC from 2009 to 2012, and as Chairman of Cummings Incorporated from 1999 to 2011.

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Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Nominees
Nominees for Class III Director With Terms Expiring in 2017
Michael H. Sutton Williamsburg, VA Director since 2004 Independent Audit Committee	Mr. Sutton, 73, has served as an independent consultant on accounting and auditing regulation issues since 1999. He served as Chief Accountant at the SEC from 1995 to 1998, with responsibility for formulating SEC policy on financial accounting and reporting by public companies. Prior to that position, Mr. Sutton was a senior partner and National Director, Accounting and Auditing Professional Practice, of Deloitte & Touche LLP. Mr. Sutton’s extensive experience in public accounting, financial reporting, and risk-management, and as Chief Accountant at the SEC, makes him uniquely qualified to contribute greatly to the Company’s financial reporting and disclosure processes and its compliance with legal and regulatory requirements. Mr. Sutton qualifies as an “audit committee financial expert” under SEC guidelines. Other Directorships: Mr. Sutton served on the Board of Directors of Allegheny Energy, Inc., a previously public utility holding company, from 2004 to 2011 when it merged with, and became a subsidiary of, First Energy Corporation. Mr. Sutton also served on the Board of Directors of American International Group, Inc., an insurance and financial services company, from 2005 to 2009.

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Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Nominees
Nominees for Class III Director With Terms Expiring in 2017
Lizanne Thomas Atlanta, GA Director since 2004 Independent Audit Committee Nominating and Corporate Governance Committee (Chair)	Ms. Thomas, 56, serves as the Partner-in-Charge of the Atlanta office of Jones Day, and has been practicing corporate law since 1982. She heads Jones Day’s global corporate governance team. Ms. Thomas regularly advises clients with respect to public and private mergers and acquisitions, corporate finance, corporate and securities compliance, disclosure and fiduciary issues, and executive compensation. Ms. Thomas’ background as a legal adviser to public companies for over 30 years provides the Krispy Kreme Board with extensive securities regulation, corporate governance, and risk-management experience. Her experience in advising companies in the food industry and managing the 150-lawyer Atlanta office of Jones Day gives her valuable experience in managing operations and financial statement profit and loss responsibility. Ms. Thomas has taught corporate governance, including a focus on audit committee responsibilities, in lectures and panel presentations for leading business organizations, companies, and universities throughout the world, which experience makes her qualified to chair the Board’s Nominating and Corporate Governance Committee and serve on the Audit Committee. Ms. Thomas also provides governance, audit and community-service skills and experience gained through her past service as Trustee of Furman University, where she served as the Chair of the Audit Committee, her service as a member of the Board of Trustees of the Georgia Research Alliance, where she served as the Chair of the Audit Committee, and as a member of the Executive Committee of the Board of Directors of the Metro Atlanta Chamber of Commerce. Ms. Thomas is also President of the Jones Day Foundation. Ms. Thomas qualifies as an “audit committee financial expert” under SEC guidelines. Other Directorships: None.

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About the Continuing Directors

     Set forth below is information regarding the continuing directors who are not nominees for election at this Annual Meeting as their current terms do not expire in 2014. Mr. Morgan, Mr. Schindler, and Mr. West are Class I directors, whose terms will expire in 2015, and Mr. Blixt, Ms. Crump-Caine, and Mr. McCoy are Class II directors, whose terms will expire in 2016.

Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Continuing Directors
James H. Morgan Winston-Salem, NC Director Since 2000 Chairman Since 2005 Not Independent	Mr. Morgan, 66, has served as Chairman of the Board of Krispy Kreme since 2005; Chief Executive Officer of Krispy Kreme since 2008; President of Krispy Kreme from 2008 to November 2011 and from April 2012 to present; Vice Chairman of the Board of Krispy Kreme from 2004 to 2005; Chairman of Covenant Capital, LLC, an investment management firm, from 2001 to 2008; Chairman and Chief Executive Officer of Wachovia Securities, Inc. from April to December 1999; and employed by Interstate/Johnson Lane, an investment banking and brokerage firm, from 1990 to 1999 in various capacities, including as Chairman and Chief Executive Officer, and led the transition during the merger of Interstate/Johnson Lane and Wachovia Corporation in 1999. With more than twelve years of service on the Board, Mr. Morgan brings deep institutional knowledge and perspective regarding Krispy Kreme’s strengths, challenges and opportunities. He also brings extensive public company and financial services industry experience to Krispy Kreme’s Board. As Chairman and Chief Executive Officer of Wachovia Securities and Interstate/Johnson Lane, he was indirectly responsible for major financial functions as well as ultimately responsible for enterprise risk-management. These prior leadership and oversight responsibilities are of great value to the Krispy Kreme Board. Mr. Morgan’s lifelong commitment to youth and education through his involvement with numerous civic and charitable organizations provides him with community involvement and leadership expertise. Mr. Morgan’s civic activities include his roles as Trustee of YMCA of Greater Charlotte, Director of Youth Commission International, past President of the Vanderbilt University Alumni Association, and past member of the Vanderbilt University Board of Trust. Other Directorships: Director of Coca-Cola Bottling Co. Consolidated, the nation’s second largest Coca-Cola bottler, since 2008.

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Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Continuing Directors
Andrew J. Schindler Winston-Salem, NC Director since 2006 Independent Compensation Committee	Mr. Schindler, 69, served as Chairman and Chief Executive Officer of R.J. Reynolds Tobacco Holdings, Inc. from 1999 to 2004, and Executive Chairman of Reynolds American Inc., a company formed in 2004 by the merger of R.J. Reynolds Tobacco Holdings and the U.S. operations of British American Tobacco PLC, from 2004 to 2005. In over 31 years with Reynolds, Mr. Schindler held various senior management positions, including Vice President of Personnel, Executive Vice President of Operations and Chief Operating Officer of R.J. Reynolds Tobacco Company and Director of Manufacturing for Nabisco Foods. Mr. Schindler retired from his executive position at Reynolds American Inc. in January 2005. Through his experience as the Chairman and Chief Executive Officer of R.J. Reynolds Tobacco Holdings, which included the negotiation of the merger of R.J. Reynolds and British American Tobacco, Mr. Schindler brings to the Krispy Kreme Board strong leadership, risk-management, marketing, operations, strategic-change, and personnel-development skills. Other Directorships: Director of Hanesbrands Inc., a global consumer goods company, since 2006; Director of ConAgra Inc., a leading packaged food company, since 2007. Mr. Schindler also served on the Board of Directors of Arvin Meritor, Inc., a global automotive supply company, from 2004 to 2008, and Pike Electric Corporation, an energy solutions company, from 2006 to 2007.

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Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Continuing Directors
Togo D. West. Jr. Washington, DC Director since 2000 Independent Compensation Committee Nominating and Corporate Governance Committee	Mr. West, 71, serves as Chairman of the Board of Trustees of Noblis, Inc., a nonprofit science, engineering, and technology company; serves as Chairman of TLI Leadership Group, a firm that provides strategic advice on national security and health policy issues; served as President and Chief Executive Officer of the Joint Center for Political and Economic Studies, a nonprofit research and public policy institution, from 2004 to 2006; served as an attorney with the law firm of Covington & Burling in Washington, D.C., including as of counsel to the firm from 2000 to 2004; served as Secretary of Veterans Affairs and a member of President Clinton’s Cabinet from 1998 to 2000; served as Secretary of the Army from 1993 to 1998; served as Senior Vice President for Government Relations of the Northrop Corporation, an aerospace and defense systems company, from 1990 to 1993; and served as a partner with the law firm of Patterson, Belknap, Webb & Tyler LLP from 1981 to 1990. Mr. West has been General Counsel of the Department of Defense and General Counsel of the Department of the Navy, and has served with the United States Department of Justice. With a career in government service, business, and law, Mr. West brings to the Krispy Kreme Board strong leadership, risk management, oversight, and governance skills. As Secretary of the Army, Mr. West had statutory responsibility for all matters relating to the United States Army, including an annual budget of approximately $60 billion and a work force of approximately one million. As Secretary of Veterans Affairs, Mr. West was responsible for the operation of nationwide programs for healthcare, financial assistance, and burial benefits, with an annual budget of $48 billion and approximately 200,000 employees. Mr. West’s leadership, financial, and management experiences are beneficial to Krispy Kreme as it continues to expand as a domestic and international organization, with personnel, suppliers, and franchisees spread worldwide. With more than thirteen years of service to the Board, Mr. West brings deep institutional knowledge and perspective regarding Krispy Kreme’s strengths, challenges, and opportunities. In addition, Mr. West has extensive community relations experience as a result of his service with Boy Scouts of America, The Atlantic Council, World Affairs Council, Center for the Study of the Presidency and Congress, MedStar Health, and Greater Washington Board of Trade. Other Directorships: Director of Bristol-Myers Squibb Company, a global biopharmaceutical company, since 2008; Director of FuelCell Energy, Inc., a manufacturer of high-efficiency power plants, since 2008. Mr. West also served on the Board of Directors of AbitibiBowater Inc., a paper products company, from 2002 to 2010.

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Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Continuing Directors
Charles A. Blixt Winston-Salem, NC Director Since 2007 Independent Audit Committee	Mr. Blixt, 62, served as Krispy Kreme’s General Counsel on an interim basis from September 2006 until April 2007; Executive Vice President and General Counsel of Reynolds American Inc., a company formed in 2004 by the merger of R.J. Reynolds Tobacco Holdings and the U.S. operations of British American Tobacco PLC, from 2004 to 2006; and Executive Vice President and General Counsel for R.J. Reynolds Tobacco Company from 1995 to 2004. Mr. Blixt’s experience as General Counsel to Krispy Kreme was at a critical period for the Company, and it provided him with a thorough understanding of Krispy Kreme’s business, values, and culture, as well as a deep understanding of the issues and complexities involved in each business unit. Mr. Blixt brings to Krispy Kreme many years of experience as the chief legal officer and a member of the executive management team of Reynolds American and R.J. Reynolds. During that time, he was directly involved with and oversaw significant litigation matters, strategic acquisitions, and the merger of R.J. Reynolds and British American Tobacco. As a result, Mr. Blixt brings executive decision making, analytical, strategic change, and risk-assessment skills to Krispy Kreme, as well as unique insights into the Company’s challenges, opportunities and operations. Additionally, Mr. Blixt brings governance and community service skills and experience to the Board of Directors through his experience as a member of the Board of Trustees of Salem Academy and College and the University of Illinois College of Law. Mr. Blixt qualifies as an “audit committee financial expert” under SEC guidelines. Other Directorships: Director of Targacept, Inc., a clinical-stage biopharmaceutical company, since 2000; and director of Swedish Match AB, a global tobacco company based in Stockholm, Sweden, from 2007 to 2011.

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Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Continuing Directors
Lynn Crump-Caine Atlanta, Georgia Director since 2007 Independent Compensation Committee (Chair) Nominating and Corporate Governance Committee	Ms. Crump-Caine, 57, has served as Chief Executive Officer of OutsideIn Consulting, an organizational performance and strategy development consulting firm, since 2004; Executive Vice President of Worldwide Operations of McDonald’s Corporation from 2001 to 2004; and Executive Vice President of U.S. Restaurant Operations and Systems of McDonald’s from 1999 to 2001. Ms. Crump-Caine brings to Krispy Kreme extensive experience in the quick-service restaurant industry through her long employment and executive tenure at McDonald’s. As Executive Vice President of Worldwide Operations of McDonald’s, Ms. Crump-Caine directed global operations departments responsible for standards and consistency of operations for restaurants around the world. Her tenure at McDonald’s also included experience with, and responsibility for, global supply chain, restaurant training, real estate development and innovation, worldwide. This experience provides the Krispy Kreme Board with valuable perspective regarding other quick-service restaurant operations, internationally and domestically, and the relevant risks, challenges and opportunities facing Krispy Kreme and the industry as a whole. Other Directorships: Director of G&K Services, Inc., a market leader in branded-identity apparel programs and facility services, since 2008; Director of Advocate Healthcare System, the largest healthcare provider in the State of Illinois with over 200 sites of care, from 2003 to 2013.

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Name, Residence, Length of
Tenure as a Director,
Independence, Committee(s)	Information About the Continuing Directors
Robert S. McCoy, Jr. Ponte Vedra Beach, FL Director Since 2003 Lead Independent Director since 2008 Audit Committee (Chair)	Robert S. McCoy, Jr., 75, retired in 2003 as Vice Chairman of Wachovia Corporation after spending two years co-managing the integration of Wachovia and First Union Corporation subsequent to their 2001 merger. From 1992 to 2001, he served as Vice Chairman and Chief Financial Officer of Wachovia Corporation; and from 1984 to 1992, he served as President and Chief Financial Officer of South Carolina National Corporation, which was acquired by Wachovia in 1992. Prior to that time, he had a 23-year career at Price Waterhouse, including as a partner from 1974 to 1984. Since retiring in 2003, Mr. McCoy has chaired the Audit Committee of two public companies, including Krispy Kreme. Mr. McCoy brings to Krispy Kreme extensive leadership, risk-management, and financial experience gained in his 42-year business career, which included roles as an accountant and as the chief financial officer of two public bank holding companies. His experience in the financial services industry and roles involving integration, risk-management, finance, accounting matters, and preparation of financial statements serve as the basis for Mr. McCoy’s wide range of contributions to Krispy Kreme. Mr. McCoy’s financial and accounting expertise is invaluable in his roles on the Board and as Chairman of Krispy Kreme’s Audit Committee. Mr. McCoy qualifies as an “audit committee financial expert” under SEC guidelines. Other Directorships: Director of MedCath Corporation, a cardiovascular services company, since 2003; and director of Web.com Group, Inc., a provider of website building tools, internet marketing and lead generation solutions, since 2007.

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DIRECTOR COMPENSATION

    The table below summarizes the aggregate amounts of compensation received by our non-management directors during the fiscal year ended February 2, 2014.

Director Compensation

Our non-management directors received the following aggregate amounts of compensation during the fiscal year ended February 2, 2014.

							Change in
							Pension
	Fees						Value and
	Earned					Non-Equity	Nonqualified
	or paid				Option	Incentive Plan	Deferred	All Other
	in Cash		Stock Awards		Awards	Compensation	Compensation	Compensation		Total
Name(1)	($)		($)(2)		($)(3)	($)	Earnings	($)(4)		($)
(a)	(b)		(c)		(d)	(e)	(f)	(g)		(h)
Charles A. Blixt	$	60,000	$	120,000	—	—	—	$	1,200	$	181,200
Lynn Crump-Caine		67,500		120,000	—	—	—		1,200		188,700
C. Stephen Lynn		60,000		120,000	—	—	—		1,200		181,200
Robert S. McCoy, Jr.		95,000		120,000	—	—	—		1,200		216,200
Andrew J. Schindler		60,000		120,000	—	—	—		1,200		181,200
Michael H. Sutton		60,000		120,000	—	—	—		1,200		181,200
Lizanne Thomas		67,500		120,000	—	—	—		1,200		188,700
Togo D. West, Jr.		60,000		120,000	—	—	—		1,200		181,200

____________________
 

(1)	This table does not include director compensation for Mr. Morgan, the Company’s Chief Executive Officer, who receives no compensation for his service as a director and Chairman of the Board of Directors. The compensation received by Mr. Morgan as an employee of Krispy Kreme is shown below; see “Executive Compensation – Summary Compensation Table”.
(2)	Amount represents the grant date fair value of 6,865 restricted stock units granted to each of our non-management directors on January 27, 2014 in consideration of his or her service for fiscal 2015. On January 27, 2013, the Compensation Committee made grants of 9,231 restricted stock units (valued at approximately $120,000 on date of grant) to each of our non-management directors in consideration of his or her service for fiscal 2014. Because the latter grants were made in fiscal 2013, they were included in the Director Compensation Table of our 2013 Proxy Statement, which was filed with the SEC on May 24, 2013. As of February 2, 2014, the non-management directors held the following number of restricted stock units, which in each case do not include the 6,865 units which have not yet vested: Mr. Blixt – 212,995, Ms. Crump-Caine – 212,995, Mr. Lynn – 212,995, Mr. McCoy – 224,702, Mr. Schindler – 224,702, Mr. Sutton – 215,471, Ms. Thomas – 224,702 and Mr. West – 145,613.
(3)	As of February 2, 2014, the following non-management directors held the following number of stock options: Mr. McCoy – 7,500, and Mr. West – 7,500. Mr. West exercised all 7,500 of these stock options on March 24, 2014.
(4)	Represents fees paid at the rate of $300 per quarter for miscellaneous expenses. We also reimburse each director for travel and other expenses incurred to attend meetings of the Board of Directors and its committees, continuing education courses applicable to his or her role as a member of our Board of Directors and its committees, and such other meetings as requested by the Company; such reimbursements are not included in the amounts set forth herein. Travel-related expenses of a director’s spouse are not included in these numbers. From time to time, spouses may be invited to accompany the directors to a Company function at the Company’s expense. During fiscal 2014, spouses of directors were invited to attend the 2013 annual meeting. Travel, meals, and other expenses paid by the Company for the spouses attending the annual meeting averaged approximately $700 per spouse. The spouses of Messrs. Lynn, Sutton, and West accompanied the directors on the Company’s aircraft in connection with their attendance at the 2013 annual meeting.

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Narrative to Director Compensation Table

    Set forth below is a description of the compensation arrangements for our non-management directors.

Fiscal 2014 Compensation

Mr. Robert S. McCoy, Jr., Lead Independent Director, received an annual fee of $85,000. Each other non-management director received an annual fee of $60,000. The Chair of the Audit Committee (Mr. McCoy) received additional annual compensation of $10,000. The Chair of the Nominating and Corporate Governance Committee (Ms. Thomas) and the Chair of the Compensation Committee (Ms. Crump-Caine) each received additional annual compensation of $7,500. In addition to these fees, each director received fees of $300 per quarter for miscellaneous expenses. We also reimburse each director for travel and other expenses incurred to attend meetings of the Board of Directors and its committees and such other meetings as requested by the Company, and continuing education courses applicable to his or her role as a member of our Board of Directors and its committees.

On January 27, 2013, the Compensation Committee made equity grants of 9,231 restricted stock units (valued at approximately $120,000 on date of grant) under our 2012 Stock Incentive Plan (“2012 Plan”), to each of our non-management directors in consideration of his or her service for fiscal 2014. These units vested in four nearly equal quarterly installments on April 27, July 27 and October 27, 2013 and on January 27, 2014. Each non-management director elected to defer receipt of the shares underlying these restricted stock units, with the exception of Mr. Sutton. The deferred shares will be distributed in a single lump sum share distribution following the termination of his or her service on the Board of Directors.

The Company has entered into indemnification agreements with each current director providing (1) advancement by the Company prior to the final disposition of any indemnifiable claim of any and all expenses relating to any indemnifiable claim paid or incurred by the director or which the director determines are reasonably likely to be paid or incurred by the director; (2) reimbursement of any and all expenses paid or incurred by the director or which the director determines are reasonably likely to be paid or incurred by the director in connection with any claim made by the director for (a) indemnification or reimbursement or advance payment of expenses by the Company, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless in each case of whether the director ultimately is determined to be entitled to such indemnification, reimbursement, advancement or insurance recovery, as the case may be; and (3) liability insurance for the duration of the director’s service as a director of the Company.

Fiscal 2015 Compensation

The Compensation Committee reviewed the compensation arrangements for our non-management directors and recommended to the Board of Directors that no changes be made to the compensation package for fiscal 2015, except for an increase of $2,500 in cash fees for the chairperson of each of the Board’s three standing committees, effective February 3, 2014. On January 27, 2014, the Compensation Committee made equity grants of 6,865 restricted stock units (valued at approximately $120,000 on date of grant) under our 2012 Plan, to each of our non-management directors in consideration of his or her service for fiscal 2015. These units will vest in four nearly equal quarterly installments on April 27, July 27 and October 27, 2014, and on January 27, 2015, or earlier upon the director’s death or disability, or the director’s failure to be nominated or elected to serve on the Board of Directors within two years of a change in control of the Company. Each non-management director elected to defer receipt of the shares underlying these restricted stock units, with the exception of Mr. Lynn, Mr. Sutton, and Ms. Thomas. The deferred shares will be distributed in a single lump sum share distribution following the termination of his or her service on the Board of Directors, provided that any units that have not vested prior to his or her termination of service will be forfeited.

Stock Ownership and Equity Retention Policy – Directors

As with our officers, we believe that our directors should be encouraged to own our common stock to further align their interests with those of our shareholders. In order to ensure that the directors maintain this alignment, the Board of Directors has adopted a stock ownership and equity retention policy to which all directors are expected to adhere. Under this policy, each director is expected to own stock valued at 600% of his or her annual cash retainer.

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    To ease the financial burden of achieving this level of stock ownership while ensuring that it will be met over time, it is expected that directors will utilize the grants under our 2012 Plan (or a former plan) to reach the level of stock ownership required by the policy. The policy contains an equity retention provision that generally requires each director, until the 600% ownership level is achieved, to retain not less than 100% of all shares, net of taxes and transaction costs, acquired pursuant to an award granted after the effectiveness of the policy under any Krispy Kreme equity compensation plan or other written compensatory arrangement. As of February 2, 2014, the aggregate value of common stock owned by each director, including, where applicable, the value of vested restricted stock units whose receipt has been deferred by the director until the termination of his or her service as a director, exceeded the ownership guideline.

Securities Trading Policy – Directors

The Company’s securities trading policy prohibits any hedging and any pledging of Krispy Kreme securities by directors. The policy prohibits directors from trading in options of any kind (including but not limited to puts and calls), warrants or other derivative instruments involving Krispy Kreme securities (other than stock options or awards granted under a Krispy Kreme incentive plan). Additionally, the policy prohibits directors from purchasing any financial instrument or contract, including prepaid variable forward contracts, equity swaps, collars, delayed delivery contracts and exchange traded funds, that is designed to hedge or offset any risk of decrease in the market value of Krispy Kreme securities.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The current members of the Compensation Committee are Chair Lynn Crump-Caine, Andrew J. Schindler, and Togo D. West, Jr. During fiscal 2014, Lizanne Thomas served on the Compensation Committee. Ms. Thomas served on the Compensation Committee until February 3, 2014, on which date Mr. Schindler joined the Compensation Committee. Neither Mr. Schindler nor any of the members of the Compensation Committee who served during fiscal 2014 is an officer or employee of the Company or any of its subsidiaries. None of our current executive officers serves as a director of another entity that has an executive officer who serves on our Board.

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EXECUTIVE OFFICERS

    Set forth below is information regarding the executive officers who are not serving or nominated as directors:

Name	Information About the Executive Officers
Cynthia A. Bay	Ms. Bay, 56, has served as Senior Vice President of U.S. Franchises and Company Stores since August 2011. Ms. Bay joined Krispy Kreme in July 2008 as Senior Vice President of Company Store Operations. From 2006 to 2008, Ms. Bay was an independent consultant focused on operations, training, and development. Formerly, she held various management positions within McDonald’s Corporation from 1981 to 2006, where she gained extensive leadership experience in multi-unit operations, training, and franchising. Most recently, Ms. Bay was Vice President of Operations, Training, and Franchising at McDonald’s Corporation from 2003 to 2006.
Daniel L. Beem	Mr. Beem, 45, has served as Senior Vice President and President – International since February 2014. Prior to joining Krispy Kreme, Mr. Beem served as President of Cold Stone Creamery and Kahala Corp. International, where he directed all international and franchise development for Kahala’s 14 brands and more than 3,000 stores worldwide, including over 1,500 Cold Stone Creamery locations in 25 countries. Prior to joining Cold Stone in 2003, he held executive and management positions with Planet Hollywood, T.G.I. Fridays, Gordon Biersch Brewing Company, and NASCAR.
G. Dwayne Chambers	Mr. Chambers, 48, has served as Senior Vice President and Chief Marketing Officer since September 2010. Prior to joining Krispy Kreme, Mr. Chambers was Senior Vice President of Marketing and Brand Development at Luby’s Fuddruckers Restaurants, Inc. from 2009 to 2010. Prior to that, Mr. Chambers was Chief Marketing Officer at Noodles & Company from 2006 to 2009, Vice President of Marketing at Red Robin Gourmet Burgers, Inc. from 2003 to 2006, and Vice President of Marketing at Sonic Corporation from 1999 to 2003. Mr. Chambers’ experience also includes 11 years of advertising agency work at Moroch and Associates where he served as Vice President and directed the McDonald’s account for over 2,000 locations.
Kenneth J. Hudson	Mr. Hudson, 63, has served as Senior Vice President of Human Resources and Organizational Development since February 2005. He joined Krispy Kreme in October 2003 as Vice President of Human Resources. From January 2000 to August 2003, Mr. Hudson was Vice President of Human Resources at Lexington Home Brands. Prior to joining Lexington Home Brands, he had general management experience in operations and human resources in various public and privately-held companies, including Delta Airlines, Thomas Built Buses, Blessings Corporation, and General Electric Company. Through these different company assignments, Mr. Hudson developed expertise in new business startups in Europe and the United States, and domestic and international mergers and acquisitions.
Darryl R. Marsch	Mr. Marsch, 48, has served as Secretary since February 2012 and as Senior Vice President and General Counsel since September 2008. Mr. Marsch joined Krispy Kreme in May 2007 as Vice President and Associate General Counsel. Prior to that, Mr. Marsch was Senior Counsel for R.J. Reynolds Tobacco Company from November 1998 to May 2007. From September 1991 to October 1998, Mr. Marsch was an associate at the law firm of Jones Day in Washington, D.C. In 2013, Krispy Kreme was recognized as a finalist for Best Legal Department byCorporate Counsel magazine.

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Name	Information About the Executive Officers
Douglas R. Muir	Mr. Muir, 60, has served as Executive Vice President and Chief Financial Officer since June 2007. He joined Krispy Kreme as Chief Accounting Officer in June 2005. Mr. Muir had been a consultant to the Company since December 2004. From 1993 to 2004, he held various senior financial management positions with Oakwood Homes Corporation, including Executive Vice President and Chief Financial Officer. Prior to joining Oakwood Homes, Mr. Muir had a 17-year career at Price Waterhouse, including as an audit partner from 1988 to 1993. Mr. Muir is a certified public accountant.
M. Bradley Wall	Mr. Wall, 42, is Senior Vice President of Supply Chain and Off-Premises Operations, a role which he has served since April 2008. He served as Senior Vice President of Supply Chain from February 2007 to April 2008. Prior to that, Mr. Wall served as our Vice President of Manufacturing Operations from July 2005 to February 2007, Vice President of Beverage Operations from February 2004 to July 2005 and Vice President of Business Development from February 2003 to February 2004. Prior to that, he held various management positions in our Business Development Department and Financial Planning and Analysis Department. Mr. Wall joined Krispy Kreme in July 1995 as a systems analyst.

EQUITY COMPENSATION PLAN INFORMATION

    The following table provides information with respect to securities authorized for issuance under all of the Company’s equity compensation plans as of February 2, 2014.

					Number of
					Securities
					Remaining
					Available for
	Number of				Future Issuance
	Securities to be				Under Equity
	Issued Upon		Weighted Average		Compensation
	Exercise of		Exercise Price of		Plans (Excluding
	Outstanding		Outstanding		Securities
	Options, Warrants		Options, Warrants		Reflected in
	and Rights		and Rights		Column (a))
Plan Category	(a)		(b)		(c)
Equity compensation plans approved
by security holders	7,257,105	(1)	$6.27	(2)	5,245,813	(3)
Equity compensation plans not approved
by security holders	—		—		—

____________________
 

(1)

Includes 4,607,022 shares of common stock issuable pursuant to the exercise of outstanding stock options, 975,908 shares of common stock issuable pursuant to restricted stock units granted to employees that have not yet vested, 1,674,175 shares of common stock issuable pursuant to restricted stock units granted to directors that have vested but with respect to which the director has elected to defer issuance of the shares until the completion of the director’s service on the Board of Directors. These awards were granted under the Company’s 2012 Stock Incentive Plan and its predecessor plan, the Company’s 2000 Stock Incentive Plan.

(2)

Computed solely with respect to outstanding stock options.

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(3) Represents 3,245,813 shares of common stock which may be issued pursuant to awards under the 2012 Stock Incentive Plan and 2,000,000 shares of common stock which may be issued pursuant to awards under the Employee Stock Purchase Plan. Under the Employee Stock Purchase Plan, each employee of the Company or any participating subsidiary (other than those whose customary employment was for not more than five months per calendar year) was eligible to participate after the employee completed 12 months of employment, and each participant could elect to purchase shares of Company common stock at the end of quarterly offering periods. The amount of shares that could be purchased was based on the amount of payroll deductions a participant elected to have withheld and applied at the end of the purchase period to the purchase of shares (ranging from 1 to 15% of the participant’s base compensation). The purchase price for the shares was the lesser of the fair market value of the shares on the first day of the purchase period or the last day of the purchase period. Effective October 21, 2005, the Company halted purchases under the Employee Stock Purchase Plan.

ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
AS DISCLOSED IN OUR 2014 PROXY STATEMENT
(Item Number 2 on the Proxy Card)

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, requires us to periodically hold (a) advisory votes to approve the compensation of our Named Executive Officers, as disclosed in our Proxy Statement for such meeting in accordance with the rules of the SEC (the “Say on Pay Vote”), and (b) advisory votes on the frequency of the Say on Pay Vote in the future (the “Frequency Vote”). A Frequency Vote was held at our 2011 annual meeting of shareholders. In light of the shareholder outcome at our 2011 annual meeting of shareholders with respect to the Frequency Vote (and consistent with the Board’s recommendation), we determined to include the Say on Pay Vote in our proxy materials for each annual meeting of shareholders until the next Frequency Vote, which will occur no later than our 2017 annual meeting of shareholders.

Krispy Kreme compensates its executive officers using a pay-for-performance philosophy by rewarding its executive officers for achievements that support the mission and strategic objectives of the Company. The Board of Directors believes the compensation program focuses on measurable, performance-based criteria that drive sustainable growth, integrate actionable strategic and operational goals that are within the control of management, and align the interests of our executive officers with the interests of our shareholders. This approach has allowed Krispy Kreme to attract and retain well-qualified employees over the years.

Shareholders are encouraged to review the section below under “Executive Compensation – Compensation Discussion and Analysis” for more information on Krispy Kreme’s compensation program for its executive officers. Highlights of our executive officer compensation program and policies are as follows:

• We monitor the executive compensation levels of companies of generally similar revenue size that operate inthe food service and manufacturing businesses.
   
• To motivate our executive officers and to align their interests with those of our shareholders, we provideannual incentives designed to reward our executive officers for the attainment of short-term goals, and long-term incentives designed to reward them for increases in shareholder value over time.
   
• We provide executive officers with long-term incentives in the form of stock options or restricted stockunits. The ultimate value of these awards is directly related to the price of the Company’s common stock;therefore, these equity-based awards link compensation with the long-term price performance of our stockand the interests of Krispy Kreme’s shareholders. In addition, equity awards are generally subject to vestingcontingent on continued service, which promotes the retention of highly valued executive officers, includingthe Named Executive Officers.
   
• The 2012 Plan provides that (a) stock options, stock appreciation rights and restricted stock granted toemployees under the 2012 Plan will generally be subject to a minimum vesting period of three years, orone year if the vesting is based on performance criteria other than continued service; (b) underwater stockoptions and stock appreciation rights may not be repriced or exchanged for cash or other options, stockappreciation rights or other equity awards without shareholder approval; and (c) dividends on performance-based awards may only be paid if and to the extent the award is earned.

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• Our current forms of equity award agreements provide that no vesting of awards will occur upon a change incontrol unless awards are not assumed or substituted by the surviving company or, if the award is assumed orsubstituted, a qualifying termination (termination by the participant for good reason or by the Company withoutcause) occurs within two years following (or six months before, but contingent upon) a change in control.
   
• We have adopted a stock ownership and equity retention policy that also closely align executives’ interests withthose of shareholders. Under this policy, our Chief Executive Officer is expected to own stock valued at 600%of his annual base salary, executive officers with the title of Senior Vice President and above are expected toown stock valued at 300% of their respective base salaries (previously 200%), and officers with the title of VicePresident are expected to own stock valued at 100% of their respective base salaries. Until these ownership levelsare achieved, (i) executive officers with the title of Senior Vice President and above are expected to retain 100%,and (ii) officers below the Senior Vice President level are expected to retain 50%, of all shares, net of taxes andtransaction costs, acquired pursuant to an award granted under any Krispy Kreme equity compensation plan.
   
• We maintain a compensation recovery policy, which calls for Krispy Kreme to require reimbursement of all or a portion of any bonus, incentive payment, equity-based award or other compensation or profits received by any executive officer and certain other senior officers following any “detrimental conduct” by such person. In addition, our current equity award agreements provide for forfeiture of awards, shares issued pursuant to awards, and gain from the sale of such shares if a covered participant engages in certain detrimental conduct.
   
• The employment agreements with our executive officers only provide certain benefits in the event a qualifying termination (termination by the executive for good reason or by the Company without cause) occurs within two years following a change in control, also known as a “double-trigger” requirement. The employment agreements do not provide for payment of tax gross-ups on any severance payments that would be made in connection with a change in control and establish a fixed term for our Chief Executive Officer’s agreement. Additionally, our Chief Executive Officer only receives severance payments to the extent he no longerremains Executive Chairman of the Board, and if triggered, the severance payout formula is limited to thelesser of two years or remaining term of the agreement.
   
• The Company’s securities trading policy prohibits any hedging or any pledging of Krispy Kreme securitiesby executive officers. The policy prohibits executive officers from trading in options of any kind (includingbut not limited to puts and calls), warrants or other derivative instruments involving Krispy Kreme securities(other than stock options or awards granted under a Krispy Kreme incentive plan). Additionally, the policyprohibits executive officers from purchasing any financial instrument or contract, including prepaid variableforward contracts, equity swaps, collars, delayed delivery contracts and exchange traded funds, that isdesigned to hedge or offset any risk of decrease in the market value of Krispy Kreme securities.

    We are requesting shareholder approval of the compensation of our Named Executive Officers as disclosed in this Proxy Statement. This Say on Pay Vote gives our shareholders the opportunity to express their views on our executive officers’ compensation. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this Proxy Statement. At the 2013 annual shareholder meeting, 96.4% of shares voting voted in support of the compensation of our Named Executive Officers as described in our 2013 proxy statement.

This is an advisory vote and is non-binding on the Board of Directors and the Compensation Committee. Although non-binding, Krispy Kreme values the opinions of its shareholders, and the Board of Directors and the Compensation Committee will consider the results of this vote when making future decisions regarding executive compensation.

For the reasons stated above, we recommend a vote in favor of the following advisory resolution at our Annual Meeting:

“RESOLVED, that the compensation paid to Krispy Kreme’s Named Executive Officers, as disclosed in the Proxy Statement for our 2014 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, executive officer compensation tables and related narrative discussion, is hereby APPROVED.”

The Board of Directors recommends a vote “FOR” the approval of the compensation of our Named Executive Officers as disclosed in this Proxy Statement.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

    Krispy Kreme is a leading branded specialty retailer and wholesaler of premium quality sweet treats and complementary products, including its signature Original Glazed^® doughnut. The Company has offered the highest quality doughnuts and great tasting coffee since it was founded in 1937. Today, Krispy Kreme shops can be found in more than 800 locations in more than 20 countries around the world.

The Company continued to improve its operating performance during fiscal 2014. As described in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our 2014 Form 10-K, our fiscal 2014 financial results were strong relative to our fiscal 2013 results. The following table highlights the year-over-year comparison of the two financial metrics that we used in evaluating the Company’s performance for the purpose of determining annual cash incentive awards to Named Executive Officers for fiscal 2014.

Performance Measures	Fiscal Year 2014	Fiscal Year 2013(1)	% Change
Consolidated EBITDA(2)(3)	$69.9 million	$60.9 million	14.8%
Revenue(2)	$460.3 million	$426.8 million	7.8%

____________________
 

(1)	Fiscal 2014 contained 52 weeks while fiscal 2013 (which ended February 3, 2013) contained 53 weeks. To facilitate comparisons, amounts shown for fiscal 2013 are for the 52 weeks ended January 27, 2013.
(2)	As defined below under “Elements of Executive Compensation – Annual Incentives.”
(3)	Amounts shown for Consolidated EBITDA are before provision for cash incentive compensation for employees, including our Named Executive Officers.

In addition, the following table highlights the year-over-year comparison of some other important financial measures that we track in evaluating the Company’s performance. These measures were not used in determining our annual cash incentive awards to Named Executive Officers for fiscal 2014. However, as described in more detail below, Pretax Income will replace Consolidated EBITDA as a financial metric for determining our annual cash incentive awards to Named Executive Officers for fiscal 2015.

Performance Measures	Fiscal Year 2014	Fiscal Year 2013	% Change
Total Shareholder Return(1)	32.9%	69.7%
Pretax Income(2)(3)	$45.1 million	$35.0 million	28.6%

____________________
 

(1)	Computed by dividing the price of the Company’s common stock on the last business day of the fiscal year by the price of the Company’s common stock on the last business day of the preceding fiscal year, and subtracting one from the result.
(2)	Fiscal 2014 contained 52 weeks while fiscal 2013 (which ended February 3, 2013) contained 53 weeks. To facilitate comparisons, the amount shown for fiscal 2013 is for the 52 weeks ended January 27, 2013.
(3)	As defined below under “Elements of Executive Compensation – Annual Incentives.”

Our financial performance along with the individual performance of our executive officers served as key factors in determining compensation for fiscal 2014, including as follows:

• In light of the positioning of Krispy Kreme’s salaries for the Named Executive Officers as compared tosimilarly situated executives in the Company’s peer group of companies, the Compensation Committeedetermined base salaries of the Named Executive Officers should be nominally increased for fiscal 2014. TheCompany’s operating results and performance have improved at rates that outpace increases in compensationto our Named Executive Officers.

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• Consolidated EBITDA and Revenue were the metrics for our Named Executive Officers’ annual cashincentive awards for fiscal 2014. These metrics provide for a balanced approach to measuring annualperformance and tie our Named Executive Officers’ compensation directly to the Company’s cash flowand long-term profitability. The Company’s Consolidated EBITDA and Revenue performance exceededthe target performance level established by our Compensation Committee for fiscal 2014 and, accordingly,bonuses were paid to our Named Executive Officers at 151% of the Target Cash Bonus Amount, as more fullydescribed under “Elements of Executive Compensation – Annual Incentives.”
   
• Long-term incentive compensation in the form of stock options and restricted stock units continues to makeup a substantial portion of the compensation for each of our Named Executive Officers. The ultimate valueof equity awards is directly influenced by the price of the Company’s stock; therefore, these equity-basedawards link compensation with the long-term price performance of our stock and the interests of KrispyKreme’s shareholders. In addition, equity awards are generally subject to vesting contingent on continuedservice, which promotes the retention of highly valued executive officers.

    Krispy Kreme’s executive compensation program in fiscal 2014 was based upon the Company’s compensation governance framework and our overall pay-for-performance philosophy, which are demonstrated by:

• Our compensation recovery policy, which calls for Krispy Kreme to require reimbursement of all or a portionof any bonus, incentive payment, equity-based award or other compensation or profits received by anyexecutive officer and certain other senior officers following certain “detrimental conduct” by such person.
   
• Our stock ownership and equity retention policy to which all officers, including our Named ExecutiveOfficers, are expected to adhere, which require that our officers own specified amounts of Krispy Kremestock. Until the ownership levels are achieved, (i) executive officers with the title of Senior Vice Presidentand above are expected to retain 100%, and (ii) officers below the Senior Vice President level are expected toretain 50%, of all shares, net of taxes and transaction costs, acquired pursuant to an award granted after theeffectiveness of the policy under any Krispy Kreme equity compensation plan.
   
• Our securities trading policy that prohibits our directors, Named Executive Officers, and other executiveofficers from any hedging or pledging of Krispy Kreme securities. Specifically, this policy prohibits thesepersons from entering into puts, calls or other derivative positions with respect to Krispy Kreme securities,and from purchasing any financial instrument or contract, including prepaid variable forward contracts,equity swaps, collars, delayed delivery contracts and exchange traded funds, that is designed to hedge oroffset any risk of decrease in the market value of Krispy Kreme securities.
   
• The Compensation Committee’s consideration of internal pay equity analyses when making compensationdeterminations with regard to the Named Executive Officers.
   
• The Compensation Committee’s consideration of compensation that is potentially available to our NamedExecutive Officers under our compensation programs, as well as the amount of total compensation that ourNamed Executive Officers have previously accumulated under our programs.
   
• Our risk-management program, which includes our Compensation Committee’s oversight of the ongoingevaluation of the relationship between our compensation policies and practices and risk.

The Compensation Committee additionally monitors the results of the annual advisory Say on Pay vote and incorporates such results as one of many factors considered in connection with the discharge of its responsibilities. At the 2013 annual shareholder meeting, 96.4% of shares voting voted in support of the compensation of our Named Executive Officers as described in our 2013 proxy statement. In fiscal 2014, the Compensation Committee considered these results and continued to apply the same principles in determining the amounts and types of executive compensation as the Compensation Committee applied in fiscal 2013.

We encourage you to read this Compensation Discussion and Analysis for a detailed discussion and analysis of our executive compensation program. In the following discussion, we have provided information about the fiscal 2014 compensation of the Named Executive Officers.

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Compensation Philosophy

     Our compensation policy emanates from our philosophy that compensation should reward employees, including our Named Executive Officers, for achievements that support the mission and strategic objectives of Krispy Kreme. This, in turn, will allow us to attract and retain well-qualified employees, including our Named Executive Officers.

     Our compensation program for executive officers, which includes our Named Executive Officers, is designed around three primary components, as highlighted in the table below. The Company considers pay as a whole, and there is no specific pre-established weighting given to any particular component. Our objective is to link executive compensation to our long-term economic performance and to align the interests of our executive officers with the interests of our shareholders. Total direct compensation is comprised of a blend of the three primary components of compensation noted below in an effort to achieve these policies and objectives. The Committee reviews competitive market compensation data but does not target the Named Executive Officers’ compensation to be at any specific percentile of those competitive data. In practice, the total direct compensation opportunity for each of our Named Executive Officers is based on the total compensation for similar executive officers of the peer group of companies described below under “Determining Executive Compensation — Peer Group Review,” internal equity, the executive’s experience, and the executive’s contribution to the Company’s long-term success. As part of the overall compensation package, we also provide our Named Executive Officers with employee benefits consistent with those offered to all employees.

Compensation Element	What the Element Rewards	Purpose and Key Features
Base Salary	Individual performance, level of experience, expected future performance and contributions to Krispy Kreme.	Provides competitive level of fixed compensation determined based upon the range of salaries for similar positions at peer companies and considers the facts and circumstances of each executive officer and each individual position.
Annual Cash Incentive	Achievement of specified financial and operational performance targets (Consolidated EBITDA and Revenue in fiscal 2014).	Based on the annual performance of Krispy Kreme; provides variable pay opportunity for short-term performance. Performance levels (threshold, target, maximum) are established to incentivize our executive officers to achieve or exceed annual financial and/or operational goals.
Long-Term Equity Incentive Awards	Achievement of results that positively affect the performance of Krispy Kreme’s stock; the ultimate value of equity awards is directly related to the price of the Company’s common stock. Vesting requirements promote retention of highly valued executive officers, including the Named Executive Officers.	Provides at-risk variable pay opportunity for long-term performance; focuses executive officers on the creation of long-term shareholder value. Equity incentive awards are generally subject to vesting contingent on continued service. Shares subject to awards also are subject to stock ownership and equity retention guidelines after vesting or exercise. Individual equity incentive awards are intended to tie the interests of executive officers, including Named Executive Officers, directly to the interests of our shareholders.

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Determining Executive Compensation

Peer Group Review

    Among the factors that the Compensation Committee considers in determining executive compensation are the compensation policies and practices of companies with which we compete for talent. The Compensation Committee’s compensation consultant, Frederic W. Cook & Co. (“Frederic Cook”), assists the Compensation Committee in reviewing and reconstituting its peer group of companies. Frederic Cook periodically analyzes the total compensation opportunities being offered by these companies, the compensation vehicles being used by them to deliver compensation and their administrative policies and practices. In addition, Frederic Cook quantifies the aggregate share usage of these companies in connection with their long-term equity grant programs and looks at this information both on a share dilution basis as well as a value basis. Frederic Cook also periodically analyzes competitive pay and practices data contained in surveys published by various other compensation consulting organizations. For fiscal 2014, the Company developed a new peer group of companies (the “Peer Group”) which replaced the previous peer group of companies that the Company identified in 2010.

In March and April 2013, the Compensation Committee reviewed the companies in its 2010 peer group and other similarly sized companies in its industry using three criteria: size (revenue and market capitalization), industry, and business characteristics. In addition, with the assistance of Frederic Cook, the Compensation Committee reviewed those companies that have identified Krispy Kreme as its peer, as well as those companies investor analysts have identified as competitors for investment capital. Due to merger and acquisition activity in recent years, several companies in the 2010 peer group were no longer viable peers for compensation purposes and were excluded. Other companies within the restaurant and packaged foods industries that were similar in size (revenue and market capitalization) and form as Krispy Kreme were determined to be more suitable peers. Based on this review and analysis, the Compensation Committee approved the new Peer Group composed of the following 18 companies to be used in connection with determining the compensation for our executive officers for fiscal 2014:

	Revenue ($M)			Market Cap
	(Trailing Four Quarters			($M)
Company	at Time of Review)			(At Time of Review)			Industry
AFC Enterprises, Inc.		$	179		$	869	Restaurants
B&G Foods, Inc.		$	634		$	1,612	Packaged Foods & Meats
BJ’s Restaurants, Inc.		$	708		$	936	Restaurants
Bravo Brio Restaurant Group, Inc.		$	409		$	311	Restaurants
CEC Entertainment, Inc.		$	803		$	592	Restaurants
Denny’s Corporation		$	488		$	546	Restaurants
DineEquity, Inc.		$	850		$	1,321	Restaurants
Einstein Noah Restaurant Group, Inc.		$	427		$	254	Restaurants
Farmer Bros. Co.		$	497		$	240	Packaged Foods & Meats
Fiesta Restaurant Group, Inc.		$	510		$	628	Restaurants
J&J Snack Foods Corp.		$	850		$	1,445	Packaged Foods & Meats
Jamba, Inc.		$	229		$	235	Restaurants
Papa John’s International, Inc.		$	1,343		$	1,388	Restaurants
Post Holdings, Inc.		$	976		$	1,402	Packaged Foods & Meats
Red Robin Gourmet Burgers, Inc.		$	977		$	640	Restaurants
Ruth’s Hospitality Group, Inc.		$	399		$	339	Restaurants
Sonic Corp.		$	538		$	724	Restaurants
Tootsie Roll Industries, Inc.		$	550		$	1,793	Packaged Foods & Meats
Kreme Kreme		$	436		$	942	Restaurants

The Peer Group will be reviewed periodically by the Compensation Committee in light of the competitive landscape and relative comparability of these companies.

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Compensation Consultant

The Compensation Committee has engaged Frederic Cook as its independent compensation consultant due to its skill sets, strengths, institutional knowledge, professionals, industry knowledge, and resources.

Frederic Cook provides research, market data, survey information, and design expertise in developing compensation programs for executives and equity programs for eligible employees. In addition, Frederic Cook keeps the Compensation Committee apprised of competitive and regulatory activities related to executive compensation practices. Frederic Cook conducted a comprehensive executive compensation review in March 2013. In this review, Frederic Cook prepared summaries analyzing the compensation of the Company’s executives relative to the compensation levels for executives at similar companies. As discussed above, in fiscal 2014 Frederic Cook assisted the Company in identifying the new Peer Group to be used in determining the compensation for our executive officers.

Frederic Cook does not determine or recommend the exact amount or form of executive compensation for any of the Named Executive Officers. All of Frederic Cook’s work is performed at the direction of the Compensation Committee. In connection with its engagement of Frederic Cook, the Compensation Committee conducted a conflict of interest assessment by using the factors applicable to compensation consultants under SEC rules. After reviewing these and other factors, the Compensation Committee determined that Frederic Cook was independent and that its engagement did not present any conflicts of interest.

Management’s Role in Setting Executive Compensation

Although the Compensation Committee establishes the Company’s compensation philosophy and makes the final determinations on all compensation paid to our Named Executive Officers, the Chief Executive Officer and the Senior Vice President of Human Resources and Organizational Development make recommendations (often in consultation with Frederic Cook) regarding annual adjustments to the Named Executive Officers’ salaries and incentive award opportunities, as well as the design of the incentive programs. The Senior Vice President of Human Resources and Organizational Development participates in the recommendation process with respect to himself, but the other Named Executive Officers (including the Chief Executive Officer) do not participate in the recommendation process with respect to themselves.

Elements of Executive Compensation

After consulting with the Chief Executive Officer and the Senior Vice President of Human Resources and Organizational Development, and taking into consideration Krispy Kreme’s financial performance and operational goals, the Compensation Committee elected to retain the basic compensation structure from fiscal 2013 for fiscal 2014, including the mix of short-term and long-term compensation for the Chief Executive Officer and each of the other Named Executive Officers.

Base Salary

We pay base salaries to attract talented executives and to provide a fixed base of cash compensation. Base salaries are determined by the Compensation Committee based on the facts and circumstances relevant to each Named Executive Officer, including the breadth, scope, and complexity of the Named Executive Officer’s role, experience, the executive’s expected future contributions to Krispy Kreme, the Named Executive Officer’s current compensation and individual performance, internal pay equity, and the range of salaries for similar positions at peer companies.

Krispy Kreme believes that a significant portion of a Named Executive Officer’s compensation should be variable, based on the performance of the Company. Accordingly, base salary plays a modest role in the overall total compensation of the Named Executive Officers.

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In its review of base salaries for fiscal 2014, the Compensation Committee considered the Company’s operating results and the positioning of Krispy Kreme’s salaries for the Named Executive Officers as compared to similarly situated executives in the Company’s Peer Group. Based on that review, the Compensation Committee approved base salary increases for the Named Executive Officers. For fiscal 2015, the Compensation Committee conducted a similar review and determined that the base salaries for the Named Executive Officers should be increased effective May 1, 2014. Summarized in the table below are base salaries effective May 1, 2013 and May 1, 2014.

Executive	May 1, 2013 Base Salary	May 1, 2014 Base Salary
James Morgan	$742,630	$765,000
Douglas Muir	$379,000	$390,000
Dwayne Chambers	$302,000	$315,000
Bradley Wall	$318,000	$330,000
Cynthia Bay	$318,000	$330,000

Annual Incentives

The Compensation Committee chooses to provide annual cash incentive opportunities to Krispy Kreme’s Named Executive Officers to drive the achievement of key financial and operating results for the Company and to recognize individuals based on their contributions to those results. Annual incentives are generally only paid when established performance metrics are met, and thus, the amounts payable correspond with Company performance. Krispy Kreme recognizes that short-term results can have a meaningful bearing on long-term increases in shareholder value.

Annual cash incentives for Named Executive Officers are determined under our annual incentive plan. This plan ties the incentive compensation payable to the Named Executive Officers to the attainment of specific, objective performance targets, thereby aligning the interests of management with the interests of our shareholders. These targets, which are selected by the Compensation Committee, are based on performance metrics relevant to our business plans and may include targets based on revenues, Consolidated EBITDA, Pretax Income, cash flow from operations, other company performance metrics and, to reflect the importance of building sustainable growth, other measurements based on progress in achieving our mission and strategic objectives. The targets will not be based, implicitly or explicitly, on meeting or exceeding any earnings guidance, consensus earnings estimates or similar measures. Performance targets are determined on an annual basis and awards are generally payable (in compliance with applicable tax rules regarding deferred compensation) in the first quarter of the fiscal year following the year in which performance is tested.

The amount of cash incentive awards potentially payable to Named Executive Officers is determined based on (1) a target cash bonus amount that is set as a percentage of an individual officer’s salary and (2) how the Company’s actual operating results compare to the specified performance targets.

The Compensation Committee has the authority under the annual incentive plan to adjust any payment amount with respect to the Named Executive Officers. These decisions are subjective and based generally on a review of the circumstances affecting results to determine if any events were unusual or unforeseen. Also, actual payment of any incentive award is pursuant to final approval by, and in the discretion of, the Compensation Committee.

For fiscal 2014, Messrs. Morgan, Muir, Chambers and Wall and Ms. Bay had a targeted cash bonus opportunity equal to 100%, 60%, 50%, 50% and 50%, respectively, of such officer’s annual base salary (the “Target Cash Bonus Amount”); the percentage for Mr. Morgan reflects an amendment and restatement of his employment agreement as of June 30, 2013. See “— Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Employment Agreements” below. Each Named Executive Officer is eligible to receive a specified percentage of his or her Target Cash Bonus Amount based upon the achievement of performance metrics selected by the Compensation Committee. The performance metrics for fiscal 2014, as more fully described below, were the same for each of the Named Executive Officers.

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The Compensation Committee chose Consolidated EBITDA and Revenue as the performance metrics for fiscal 2014, weighted at 80% and 20%, respectively, of a Named Executive Officer’s bonus potential. The Committee believes Consolidated EBITDA is an important metric in assessing the Company’s performance because it is a measure of the Company’s ability to generate cash flow from its operations. The Committee chose Revenue as a performance metric because the Committee believes that growth of the Company’s business is an important element of increasing the Company’s long-term profitability. While the Committee considered generating cash flow to enable the Company to execute its strategic plans to be the primary financial goal for fiscal 2014, the Committee also believed the ability to demonstrate revenue growth in the Company’s businesses was a secondary measure of the Company’s success in implementing its strategic plans. The Consolidated EBITDA metric was derived from our financial statements. The Consolidated EBITDA metric was, with one exception, defined the same way as it is defined in our secured credit facilities: which means, generally, consolidated net income or loss, exclusive of unrealized gains and losses on hedging instruments and amounts accrued with respect to certain interest rate derivatives, gains or losses on the early extinguishment of debt and provisions for payments on guarantees of franchisee obligations, plus the sum of net interest expense, income taxes, depreciation and amortization, and non-cash charges, and minus payments, if any, on guarantees of franchisee obligations in excess of $3 million in any rolling four-quarter period and the sum of non-cash credits; for purposes of the annual incentive plan, Consolidated EBITDA also excludes provisions for bonus payments for corporate employees, including the Named Executive Officers. Revenue was defined as consolidated revenues as reported in the Company’s consolidated financial statements, and performance against the Revenue increase thresholds was to be measured after eliminating the effects of refranchising Company stores and acquisitions of franchise stores. The Compensation Committee assigned three levels of performance for Consolidated EBITDA and for Revenue: threshold, target, and maximum. Upon achievement of the threshold, target, or maximum level with respect to the performance metrics, a Named Executive Officer would be eligible to receive an amount equal to 70%, 100% or 200%, respectively, of 80% of such officer’s Target Cash Bonus Amount (with respect to the Consolidated EBITDA performance metric) and 20% of such officer’s Target Cash Bonus Amount (with respect to the Revenue performance metric). If the threshold level of either performance metric was not met, the Named Executive Officer would not be eligible to receive any portion of his or her Target Cash Bonus Amount with respect to that metric. The Compensation Committee also determined that if actual results fell between threshold and target or between target and maximum, then the bonus paid would be prorated.

Fiscal 2014 Performance Metrics

	Threshold	Target	Maximum	Actual Results
Consolidated EBITDA(1) (80% of bonus potential)	$57.0 million	$65.0 million	$75.0 million	$69.9 million
Revenue(1) (20% of bonus potential)	FY13 plus 3%	FY13 plus 5%	FY13 plus 10%	FY13 plus 9.3%

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(1) As defined above under “Elements of Executive Compensation – Annual Incentives.” Amounts shown for Consolidated EBITDA are before provision for cash incentive compensation for corporate employees, including our Named Executive Officers. The actual percentage increase in Revenue over fiscal 2013 has been computed after eliminating the effects of refranchising Company stores and acquisitions of franchise stores.

Consolidated EBITDA and the growth in Revenue for fiscal 2014 exceeded the target performance levels established by the Compensation Committee. Application of the computational formula adopted by the Compensation Committee for fiscal 2014 to the Company’s actual performance with respect to the Consolidated EBITDA and Revenue performance metrics resulted in a computed bonus equal to 156% of each Named Executive Officer’s Target Cash Bonus Amount. After making this determination and considering other relevant factors, the Compensation Committee determined that bonuses should be paid to the Named Executive Officers in amounts equal to 151% of their respective Target Cash Bonus Amounts. The cash incentive awards earned under the annual incentive plan for fiscal 2014 were $1,121,371, $343,374, $228,010, $240,090 and $240,090 for Messrs. Morgan, Muir, Chambers and Wall and Ms. Bay, respectively.

For fiscal 2015, the Compensation Committee decided to use Pretax Income as an earnings performance metric in place of the Consolidated EBITDA metric. The Compensation Committee believes that as the Company has transitioned from turnaround status to growth company status, that Pretax Income is a more relevant earnings metric because it measures earnings more comprehensively than does Consolidated EBITDA. Pretax Income means

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income before income taxes as shown in our consolidated statement of income, before provisions for bonus payments for corporate employees, including the Named Executive Officers. Revenue again was defined as consolidated revenues as reported in the Company’s consolidated financial statements, with performance against the Revenue increase thresholds to be measured after eliminating the effects of refranchising Company stores and acquisitions of franchise stores. The Compensation Committee again chose Revenue as a performance metric for fiscal 2015. The Compensation Committee assigned three levels of performance for Pretax Income and for Revenue: threshold, target, and maximum. Upon achievement of the threshold, target, or maximum level with respect to the performance metrics, a Named Executive Officer would be eligible to receive an amount equal to 70%, 100% or 200%, respectively, of 80% of such officer’s Target Cash Bonus Amount (with respect to the Pretax Income performance metric) and 20% of such officer’s Target Cash Bonus Amount (with respect to the Revenue performance metric). The Compensation Committee determined, in setting the Pretax Income metric, that the thresholds were before provision for bonus payments for corporate employees, including the Named Executive Officers, and determined that growth in Revenue over fiscal 2014 would be measured after eliminating the effects of refranchising Company stores and acquisitions of franchise stores. If the threshold level of either performance metric was not met, the Named Executive Officer would not be eligible to receive any portion of his or her Target Cash Bonus Amount with respect to that metric. The Compensation Committee also determined that if actual results fall between threshold and target or between target and maximum, then the bonus paid will be prorated.

Fiscal 2015 Performance Metrics

	Threshold	Target	Maximum
Pretax Income(1) (80% of bonus potential)	$52.6 million	$55.2 million	$63.2 million
Revenue(1) (20% of bonus potential)	FY14 plus 3%	FY14 plus 5%	FY14 plus 9%

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(1) As defined above under “Elements of Executive Compensation – Annual Incentives.” Amounts shown for Pretax Income are before provision for cash incentive compensation for corporate employees, including our Named Executive Officers.

Long-Term Equity Incentive Awards

We provide long-term equity incentive awards to our executive officers, including the Named Executive Officers, as part of their total direct compensation to tie the interests of these individuals directly to the interests of our shareholders. The Compensation Committee also believes that long-term equity incentive compensation is an important tool in attracting and retaining key members of executive management.

In fiscal 2014, we made long-term equity incentive grants under our 2012 Plan. The 2012 Plan allows for equity-based awards to selected participants, including the Named Executive Officers, as determined by the Compensation Committee. Awards that may be granted by the Compensation Committee to the Named Executive Officers include stock options, restricted stock, restricted stock units, stock awards, performance unit awards, and stock appreciation rights. Grants are subject to participant award limitations imposed under the 2012 Plan (or a predecessor plan). All of the equity awards granted to the Company’s executive officers in fiscal 2009 through fiscal 2012 were in the form of stock options. In order to provide a degree of balance in the types of awards granted, in fiscal 2013 the Compensation Committee granted equity awards to executive officers in the form of restricted stock units. For fiscal 2014, the Compensation Committee adopted a balanced approach and granted executive officers both stock options and restricted stock units.

Fiscal Year 2014 Equity Grants

In fiscal 2014, we awarded stock options and restricted stock units to our executive officers, including our Named Executive Officers, because such awards are inherently performance-based in that the value of awards ultimately is determined by the price of the Company’s stock. In addition, these awards provide long-term compensation to our Named Executive Officers in the form of equity, which, in tandem with prior stock awards, and our stock ownership

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and equity retention policy, builds a culture of ownership among our executives and focuses our executive officers, including our Named Executive Officers, on the creation of shareholder value. Finally, such awards can be a strong executive retention tool, as they are generally subject to vesting contingent on continued service.

Considering each Named Executive Officer’s position, competitive market, and internal equity, on January 30, 2014, the Compensation Committee granted the Named Executive officers the following awards:

Executive	Stock Options	Restricted Stock Units
James Morgan	53,698	34,344
Douglas Muir	19,018	12,163
Dwayne Chambers	115,661	10,017
Bradley Wall	15,661	10,017
Cynthia Bay	15,661	10,017

The Compensation Committee made a special award of 100,000 stock options to Mr. Chambers to reflect Mr. Chambers’ significant contributions to the Company’s performance, strategic plan, and global expansion since he joined the Company in September 2010. The Compensation Committee believes that these grants provide our Named Executive Officers with a meaningful equity stake in the Company and increasingly align the interests of the executive officers with those of the shareholders. All of these grants are shown below under “— Grants of Plan-Based Awards.”

The vesting of equity awards is generally contingent on continued service. However, vesting of awards is accelerated upon a termination of employment due to death, disability or retirement, or, in the event of a change in control, if the awards are not assumed or substituted by the surviving company or a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control. See “—Potential Payments upon Termination and Change in Control” below. Among other things, the 2012 Plan provides that employee restricted stock units will generally be subject to a minimum vesting period of three years or a minimum of one year if vesting is based on criteria other than continued service. In particular, the restricted stock units awarded to our Named Executive Officers in fiscal 2014 vest in four substantially equal annual installments beginning approximately one year following the date of the grant so long as the executive officer’s employment continues through the applicable vesting date, unless acceleration occurs due to a termination of employment or change in control event as described above.

The restricted stock units and stock options granted to the Named Executive Officers are subject to forfeiture in accordance with the terms of the grant agreements if the executive terminates employment before the award vests or the executive engages in certain events of competition and/or solicitation or other detrimental acts (described in the grant agreements to include engaging in competitive business activities, inducing customers or suppliers to cease doing business with the Company, interfering with the relationship between the Company and its employees, violating the Company’s securities trading policy, and similar activities), or if the executive violates confidentiality provisions, or is terminated for cause. In addition, if the executive has vested in any award within the twelve-month period immediately prior to engaging in certain events of competition and/or solicitation or other detrimental acts, violating confidentiality provisions or being terminated for cause, the executive must, upon request of the Company, return to the Company any common stock received upon vesting of the award or any proceeds realized by the executive in connection with the sale of the vested shares.

Grant Dates of Long-Term Equity Incentive Awards

In most instances, the Compensation Committee establishes the grant date of an award to be the date the Committee meets and makes its determination (i.e., the award action date). The grant date of each award is fixed by the Compensation Committee on the award action date, and in some instances, for specific purposes, differs from the award action date, as discussed below.

Occasionally, an equity award occurs in close proximity to a scheduled publication by the Company of its financial results. In such event, it has generally been the Compensation Committee’s practice to establish the grant and pricing date of awards to be a date following such publication. The Company’s Securities Trading Policy provides

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that officers may not buy or sell common shares until the fourth business day following the release of quarterly or year-end financial information, with the date of the release counting as the first business day. The Compensation Committee typically establishes award grant dates that follow the earnings publication date by the same or a similar period. The foregoing practice has generally been applied in instances in which the price of the Company’s common stock has an effect on the size or terms of the award (for example, in the case of stock options).

It also has been the Compensation Committee’s practice to establish the grant and pricing date of awards issued pursuant to employment agreements to be the effective date of such agreements, which in some instances has been a date after the date on which the Compensation Committee approved the employment agreement and the related award.

The Compensation Committee occasionally establishes the vesting date of certain awards to be a date different than an annual anniversary of the grant date for purposes of administrative convenience (for example, to cause the vesting date of current awards to be the same as the vesting date of prior awards).

Benefits

We provide access to various employee benefit plans to our executive officers, including the Named Executive Officers, as part of their total direct compensation. Benefits for the Named Executive Officers are determined by the same criteria applicable to all salaried Krispy Kreme employees. The Compensation Committee believes that these benefits help Krispy Kreme to be competitive in attracting and retaining key employees.

Our Named Executive Officers are eligible to participate in our tax-qualified 401(k) savings plan (the “401(k) Plan”), to which employees may contribute from 1% to 100% of their compensation (salary and bonus) to the plan on a tax deferred basis, subject to statutory limitations. Among other things, such limitations limit “compensation” for this purpose to approximately $255,000 annually. We also have a nonqualified deferred compensation plan (the “401(k) Mirror Plan”) designed to enable “highly compensated employees” (as defined by federal income tax laws and regulations) whose contributions to the 401(k) Plan are limited by certain statutory limitations to have the same opportunity to defer compensation as is available to other employees of Krispy Kreme under the qualified 401(k) Plan. Employees can contribute from 1% to 15% of their base compensation and from 1% to 100% of their bonus under the 401(k) Mirror Plan, in each case, reduced by amounts contributed to the 401(k) Plan. In addition, employees can contribute to the 401(k) Mirror Plan up to 100% of the excess distributions they receive from the 401(k) Plan. We match 50% of the first 6% of compensation contributed by each employee to the 401(k) Plan.

Named Executive Officers also participate in our regular employee benefit programs, including group medical and dental coverage, group life insurance, and group long-term disability insurance. Our Named Executive Officers are eligible to participate in these programs on the same basis as our other salaried employees.

The Company has entered into indemnification agreements with each current Named Executive Officer providing, among other things (1) advancement by the Company prior to the final disposition of any indemnifiable claim of any and all expenses relating to any indemnifiable claim paid or incurred by the executive officer or which the executive officer determines are reasonably likely to be paid or incurred by the executive officer, (2) reimbursement of any and all expenses paid or incurred by the executive officer or which the executive officer determines are reasonably likely to be paid or incurred by the executive officer in connection with any claim made by the executive officer for (a) indemnification or reimbursement or advance payment of expenses by the Company, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless in each case of whether the executive officer ultimately is determined to be entitled to such indemnification, reimbursement, advancement or insurance recovery, as the case may be; and (3) liability insurance for the duration of the executive officer’s service as an officer of the Company and thereafter so long as the executive officer is subject to any pending or possible indemnifiable claim. These agreements assure the executive officer of indemnification and advancement of expenses to the fullest extent permitted by North Carolina law and our articles of incorporation and bylaws, and of continued coverage under our directors’ and officers’ liability insurance policies. The Board of Directors believes that such indemnification agreements serve as an important tool to attract and retain key executive officers, including the Named Executive Officers.

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Krispy Kreme provides Mr. Morgan with an executive allowance at the rate of $2,500 per month ($2,000 per month prior to July 2013). Mr. Morgan’s executive allowance is in lieu of perquisites and other personal benefits typically afforded to Chief Executive Officers at other public companies, such as company-provided cars, annual physical examinations, and financial planning services. The Compensation Committee feels that the provision of an executive allowance permits the Company to attract and retain key talent in the Chief Executive Officer position while at the same time controlling costs.

Severance/Change in Control

We do not maintain any severance or change in control plans. However, pursuant to the terms of certain employment agreements, stock option agreements, restricted stock agreements and restricted stock unit agreements, executive officers, including the Named Executive Officers, are eligible to receive severance and other benefits in the case of certain termination events and in the case of a change in control. See “Executive Compensation — Potential Payments upon Termination and Change in Control” below.

Stock Ownership and Equity Retention Policy

We believe that officers should be encouraged to own our common stock to further align their interests with those of our shareholders. In order to ensure that the officers maintain this alignment, the Board of Directors has adopted a stock ownership and equity retention policy to which all officers, including our Named Executive Officers, are expected to adhere. This policy establishes the stock ownership levels expected of the Company’s directors and officers in an effort to promote a culture of significant stock ownership by officers and directors and to further focus on shareholder returns and sustainable growth. The current guidelines for stock ownership by the Company’s officers are as follows:

CEO – stock valued at 600% of base salary

Senior Vice President and above – stock valued at 300% of base salary (previously 200%)

Vice President – stock valued at 100% of base salary

It is expected that officers will utilize the grants under our 2012 Plan (or a predecessor plan) to reach the level of stock ownership required by the guidelines. In this regard, until the levels of ownership outlined above are achieved, (i) executive officers with the title of Senior Vice President and above are expected to retain 100%, and (ii) officers below the Senior Vice President level are expected to retain 50%, of the net shares received as a result of the exercise of stock options or the vesting of restricted stock or restricted stock units received under the Company’s 2012 Plan (or a predecessor plan).

Securities Trading Policy

The Company’s securities trading policy prohibits any hedging and pledging of Krispy Kreme securities by executive officers. The policy prohibits executive officers from entering into puts, calls or other derivative positions with respect to Krispy Kreme securities, and from purchasing any financial instrument or contract, including prepaid variable forward contracts, equity swaps, collars, delayed delivery contracts and exchange traded funds, that is designed to hedge or offset any risk of decrease in the market value of Krispy Kreme securities.

Compensation Recovery Policy

In fiscal 2010, the Board of Directors adopted a compensation recovery policy that generally provides that Krispy Kreme may require reimbursement of all or a portion of any bonus, incentive payment, equity-based award or other compensation received by any executive officer and certain other senior officers within 36 months following any (a) gross negligence or willful misconduct pertaining to financial reporting requirements that resulted in an accounting restatement, (b) gross negligence or willful misconduct pertaining to Krispy Kreme’s business that resulted in a material negative revision of a financial or operating measure used to measure compensation or (c) fraud, theft, misappropriation, embezzlement or dishonesty to the material detriment of Krispy Kreme (collectively, “Detrimental Conduct”) on the part of the executive officer or senior officer. Detrimental Conduct also includes such

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officer’s willful or grossly negligent oversight of a person who reports directly to such officer and who engages in detrimental conduct as defined above. The policy also provides that Krispy Kreme may require any officer subject to the policy to remit to Krispy Kreme any profits realized from the sale of Krispy Kreme’s securities within 36 months following Detrimental Conduct by such officer.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (which is set forth above) with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Lynn Crump-Caine, Chair

Andrew J. Schindler

Togo D. West, Jr.

Risk Analysis of Compensation Plans

Certain senior executive officers and the Compensation Committee’s independent compensation consultant, Frederic Cook, prepared in fiscal 2012 for the Compensation Committee’s review a risk assessment of our compensation programs and policies to determine if the programs’ provisions and operations were reasonably likely to have a material adverse effect on the Company.

This risk assessment included two work streams – one focused on reviewing areas of enterprise risk and the other focused on identifying compensation design risk. The enterprise risk work stream examined the types and magnitudes of risks the business areas present to the Company. The compensation design work stream examined the potential risks in the design of our incentive compensation arrangements. As part of this assessment, together with our advisers, the Compensation Committee analyzed: (a) the mix of fixed and variable compensation, (b) the mix of short- and long-term compensation, (c) performance metrics and weightings, (d) pay leverage and caps, (e) payment timing, (f) the overall level of discretion, (g) award size and vesting schedules, (h) our stock ownership and equity retention policy, and (i) our compensation recovery policy. Finally, the Compensation Committee evaluated on a combined basis the results of the enterprise and compensation risk assessments, on a business area by business area basis.

In summary, the Company’s compensation policies and practices are designed to encourage Krispy Kreme employees, including its executive officers, to remain focused on both the short-term and long-term goals of the Company, while at the same time discouraging employees from taking unnecessary and excessive risks that could ultimately threaten the value of the Company. Similarly, our annual incentives are designed to encourage our employees to achieve certain financial and operating results. However, they are generally only paid when established performance metrics are met, and are intended to discourage employees from taking unnecessary risks. The most common element of compensation awarded to Krispy Kreme employees is base salary, which does not encourage unnecessary risk taking behavior as it is a fixed amount. Additionally, the Company’s executive officers are subject to the stock ownership and equity retention policy, a securities trading policy, and a compensation recovery policy, all of which are designed to reduce the risks inherent in incentive compensation.

The Compensation Committee has reviewed the Company’s current compensation policies and practices, and believes that, in light of their overall structure, the risks arising from such compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

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Summary Compensation Table

Set forth below is summary compensation information for our Named Executive Officers.

							Change in
							Pension
							Value and
						Non-Equity	Nonqualified
				Stock	Option	Incentive Plan	Deferred	All Other
		Salary	Bonus	Awards(1)	Awards	Compensation	Compensation	Compensation
Name and Principal Position	Year	($)	($)	($)	($)(1)	($)(2)	earnings ($)	($)(3)	Total ($)
James H. Morgan	2014	$737,222	$—	$599,990	$600,000	$1,121,371	$—	$27,500	$3,086,083
President and Chief	2013	715,750	—	698,880	—	857,990	—	24,000	2,296,620
Executive Officer	2012	700,000	—	—	698,880	852,600	—	24,000	2,275,480
Douglas R. Muir	2014	$376,175	$—	$212,488	$212,500	$343,374	$—	$7,686	$1,152,223
Executive Vice	2013	365,025	—	559,104	—	375,054	—	9,019	1,308,202
President and Chief	2012	357,000	—	—	559,104	372,708	—	5,858	1,294,670
Financial Officer
G. Dwayne Chambers	2014	$297,750	$—	$174,997	$1,292,350	$228,010	$—	$3,027	$1,996,134
Senior Vice	2013	282,500	—	465,920	—	242,250	—	—	990,670
President and Chief	2012	275,000	—	—	465,920	239,250	—	38,375	1,018,445
Marketing Officer
M. Bradley Wall	2014	$315,750	$—	$174,997	$174,990	$240,090	$—	$7,680	$913,507
Senior Vice President of	2013	306,750	—	465,920	—	262,650	—	7,523	1,042,843
Supply Chain and	2012	285,000	—	—	465,920	248,022	—	6,713	1,005,655
Off-Premises
Operations
Cynthia A. Bay	2014	$315,750	$—	$174,997	$174,990	$240,090	$—	$7,677	$913,504
Senior Vice President —	2013	306,750	—	465,920	—	262,650	—	7,523	1,042,843
U.S. Franchises and	2012	275,000	—	—	465,920	239,370	—	6,775	987,065
Company Stores

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(1)	Amounts represent the aggregate grant date fair value of equity awards, determined in accordance with Accounting Standards Codification 718 (“ASC 718”). For a discussion of the assumptions used in determining such amounts, see Note 15 to our consolidated financial statements in our 2014 Form 10-K.
(2)	Represents cash incentive compensation earned under our annual incentive plan.
(3)	Includes our contributions to the executive’s account in our 401(k) Plan and 401(k) Mirror Plan, as applicable, and each personal benefit received by the Named Executive Officer during the fiscal year where the total of all personal benefits received by the Named Executive Officer exceeded $10,000 during such year.
	Other compensation for Mr. Morgan in fiscal 2014 consists of $27,500 of cash “executive allowance” paid at the rate of $2,000 per month for the months of February – June 2013 and $2,500 per month for the months of July 2013 – January 2014. Other compensation for Messrs. Muir, Chambers, and Wall and Ms. Bay in fiscal 2014 of $7,686, $3,027, $7,680 and $7,683, respectively, represents the Company’s matching contributions to the 401(k) Plan.
	Other compensation for Mr. Morgan in fiscal 2013 and 2012 consists of cash “executive allowance” paid at the rate of $2,000 per month. Other compensation for Mr. Chambers in fiscal 2012 represents reimbursement of relocation expenses.

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Fiscal 2014 Grants of Plan-Based Awards

The following table shows information about plan-based awards granted during fiscal 2014 to the Named Executive Officers.

					All Other
					Stock	All Other
					Awards:	Option
					Number	Awards:	Exercise	Grant Date
		Estimated Future Payouts Under			of Shares	Number of	or Base	Fair Value
		Non-Equity Incentive Plan			of Stock	Securities	Price of	of Stock
		Awards(1)			or	Underlying	Option	and Option
	Grant	Threshold	Target	Maximum	Units(2)	Options	Awards	Awards(3)
Name	Date	($)	($)	($)	(#)	(#)	($/Sh)	($)
James H. Morgan		$519,841	$742,630	$1,485,260
	1/30/14				34,344(4)	53,698(5)	$17.47	$1,199,990
Douglas R. Muir		$159,180	$227,400	$454,800
	1/30/14				12,163(4)	19,018(5)	$17.47	$424,988
G. Dwayne Chambers		$105,700	$151,000	$302,000
	1/30/14					100,000(5)	$17.47	$1,117,360
	1/30/14				10,017(4)	15,661(5)	$17.47	$349,987
M. Bradley Wall		$111,300	$159,000	$318,000
	1/30/14				10,017(4)	15,661(5)	$17.47	$349,987
Cynthia A. Bay		$111,300	$159,000	$318,000
	1/30/14				10,017(4)	15,661(5)	$17.47	$349,987

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(1)	These columns show the potential value of the payout for each Named Executive Officer under the annual incentive plan if the threshold, target, or maximum goals were satisfied with respect to the performance measures set by the Compensation Committee for fiscal 2014 based on the Named Executive Officer’s specified Target Cash Bonus Amount. Based on actual performance in fiscal 2014, the cash incentive awards earned under the annual incentive plan were $1,121,371, $343,374, $228,010, $240,090 and $240,090 for Messrs. Morgan, Muir, Chambers and Wall and Ms. Bay, respectively. The business measurements, performance goals, and salary percentage targets for determining these payouts are described under “Executive Compensation — Compensation Discussion and Analysis — Elements of Executive Compensation — Annual Incentives — Fiscal 2014 Performance Metrics” above.
(2)	Represents awards of restricted stock units.
(3)	This column shows the aggregate grant date fair value of equity awards granted in fiscal 2014 determined in accordance with ASC 718. For a discussion of the assumptions used in determining such amounts, see Note 15 to our consolidated financial statements in our 2014 Form 10-K.
(4)	The restricted stock units will vest, provided that the executive’s employment continues through the applicable vesting date, in four substantially equal installments on January 27, 2015, January 27, 2016, January 27, 2017, and January 27, 2018. Vesting of restricted stock units may accelerate upon the occurrence of certain events, such as termination of employment due to death, disability or retirement or, in the event of a change in control, the restricted stock units are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) the change in control; see “Executive Compensation — Potential Payment upon Termination and Change in Control — Restricted Stock Unit Agreements.”

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(5) The stock options will vest, provided that the executive’s employment continues through the applicable vesting date, in four substantially equal installments on January 30, 2015, January 30, 2016, January 30, 2017 and January 30, 2018. Vesting of stock options may accelerate upon the occurrence of certain events, such as termination of employment due to death, disability or retirement or, in the event of a change in control, the stock options are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) the change in control; see “Executive Compensation — Potential Payment upon Termination and Change in Control — Restricted Stock Unit Agreements.”

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Employment Agreements

    We have employment agreements with each of our Named Executive Officers. The terms of the employment agreements with our executive officers are designed to be consistent with our overall compensation philosophy.

James H. Morgan

Effective June 30, 2013, we entered into an employment agreement with Mr. Morgan pursuant to which he serves as our President and Chief Executive Officer. The agreement will terminate on June 30, 2016 unless sooner terminated in accordance with its terms. The employment agreement provides that Mr. Morgan shall continue to serve as Chairman of the Board of Directors of the Company for as long as the Board desires. During the term of the employment agreement, Mr. Morgan is to receive a minimum annual salary of $765,000 (as adjusted subsequent to the date of the agreement pursuant to its terms) and is eligible to receive an annual bonus under our incentive plans, with his annual target bonus set at 100% of his base salary (70% prior to June 30, 2013). The employment agreement provides that Mr. Morgan will receive an executive allowance of $2,500 per month ($2,000 prior to July 2013). Mr. Morgan does not receive additional compensation for his service as a member of the Board of Directors.

Douglas R. Muir

We have entered into an employment agreement with Mr. Muir pursuant to which he serves as our Executive Vice President, Chief Financial Officer and Treasurer. The employment agreement will automatically be extended for successive one-year periods each June 5 unless any party elects not to extend. Under the terms of the employment agreement, Mr. Muir is to receive a minimum annual salary of $390,000 (as adjusted subsequent to the date of the agreement pursuant to its terms) and is eligible to receive an annual bonus under our incentive plans, with his annual target bonus set at 60% of his base salary.

G. Dwayne Chambers

We have entered into an employment agreement with Mr. Chambers pursuant to which he serves as our Senior Vice President and Chief Marketing Officer. The employment agreement will be automatically extended for successive one-year periods each September 20 unless any party elects not to extend. Under the terms of the employment agreement, Mr. Chambers is to receive a minimum annual salary of $315,000 (as adjusted subsequent to the date of the agreement pursuant to its terms) and is eligible to receive an annual bonus under our incentive plans, with his annual target bonus set at 50% of his base salary.

M. Bradley Wall

We have entered into an employment agreement with Mr. Wall pursuant to which he serves as our Senior Vice President – Supply Chain and Off-Premises Operations. The employment agreement will automatically be extended for successive one-year periods each November 7 unless either party elects not to extend. Under the terms of the employment agreement, Mr. Wall is to receive a minimum annual salary of $330,000 (as adjusted subsequent to the date of the agreement pursuant to its terms) and is eligible to receive an annual bonus under our incentive plans, with his annual target bonus set at 50% of his base salary.

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Cynthia A. Bay

    We have entered into an employment agreement with Ms. Bay pursuant to which she serves as our Senior Vice President – U.S. Franchises and Company Stores. The employment agreement will automatically be extended for successive one-year periods each September 14 unless either party elects not to extend. Under the terms of the employment agreement, Ms. Bay is to receive a minimum annual salary of $330,000 (as adjusted subsequent to the date of the agreement pursuant to its terms) and is eligible to receive an annual bonus under our incentive plans, with her annual target bonus set at 50% of her base salary.

Common Terms

The employment agreements entitle these Named Executive Officers to participate in all employee benefit and fringe benefit plans and arrangements made available to our executives and key management employees upon the terms and subject to the conditions set forth in the applicable plan or arrangement.

If any Named Executive Officer resigns or terminates his or her employment without “good reason” (as defined below) or his or her employment agreement is terminated by Krispy Kreme for “cause” (as defined below), the officer will be entitled to receive the base salary through the date of termination and reimbursement of reimbursable expenses incurred to that date. Voluntary resignation is not a breach of the employment agreement.

If the employment agreement is terminated by us without cause or by a Named Executive Officer for good reason, such Named Executive Officer generally is entitled to the following:

• An amount equal to his or her current annual base salary through the termination date;
   
• With respect to Mr. Morgan, an amount equal to the lesser of (1) two times his base salary plus two times hisaverage annual cash bonus paid (if any) by the Company for the three most recently completed fiscal yearsprior to the fiscal year during which his employment is terminated, or (2) the aggregate amount of his unpaidbase salary and bonus for the remainder of the term of the employment period following his terminationof employment. In the event of (A) a qualifying termination on or within two years following a “changein control” (as defined below) or (B) Mr. Morgan’s termination of employment due to loss of director orchief executive officer status on or within two years following a change in control of the Company or theCompany’s shares ceasing to be publicly traded, he will be entitled to an amount equal to two times his basesalary plus two times his average annual cash bonus paid (if any) by the Company for the three most recentlycompleted fiscal years prior to the fiscal year during which his employment is terminated.
   
• With respect to each other Named Executive Officer, an amount equal to one times his or her base salary forthe year of termination, or in the event of termination of employment within two years following a changein control (1) by such Named Executive Officer for good reason or (2) by the Company without cause, anamount equal to two times his or her base salary plus two times his or her target annual bonus for the yearof termination.
   
• For all Named Executive Officers, an amount, payable within 60 days following the date of termination,equal to a bonus for the year of termination calculated as a pro-rated target annual bonus for the number ofmonths during the bonus year prior to the date of termination; and
   
• Medical benefits for up to 18 months after the date of termination.

In addition, in the event of a change in control, Mr. Morgan’s stock options and restricted stock units will become fully vested, provided that accelerated vesting of the stock options will not occur if Mr. Morgan continues as chief executive officer of the surviving entity (and such entity is a publicly traded entity) and either Krispy Kreme’s stock remains outstanding or replacement equity awards are granted by the surviving entity so long as the terms of the employment agreement are expressly assumed by the surviving entity.

The employment agreements define “cause” to mean, generally: (1) failure or refusal by the Named Executive Officer to perform his or her lawful and proper duties; (2) conviction of or plea of nolo contendere to any felony; (3) acts constituting fraud, theft, or embezzlement or that otherwise constitute a felony which results or was intended

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to result in gain or personal enrichment at the expense of Krispy Kreme; (4) other than with respect to Mr. Morgan, insubordination to Krispy Kreme’s most senior executive officer; or (5) willful violation of any material provision of the code of ethics of Krispy Kreme.

The employment agreements define “good reason” to mean, generally, the occurrence of any of the following without the Named Executive Officer’s consent: (1) the failure of Krispy Kreme to pay any material amount of compensation due under such employment agreement; (2) the applicable Named Executive Officer is no longer the most senior officer in his or her respective area of expertise (except that, in the case of Mr. Morgan, it shall not constitute an event of “good reason” if Mr. Morgan no longer serves as Chief Executive Officer but serves as executive chairman of the board of the Company or, in the event of a merger, consolidation or other business combination involving the Company, 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 Company, such company); (3) a change in duties or responsibilities materially inconsistent with the status as the most senior officer in the Named Executive Officer’s area of expertise; (4) certain relocations; (5) any material breach by Krispy Kreme of the employment agreement; or (6) other than with respect to Mr. Morgan, the giving by Krispy Kreme of a notice of non-extension of the term of the employment agreement at either the end of the initial term or the end of the first, second, or third one-year extensions. In addition, the failure of Mr. Morgan to be appointed or elected (or reelected) to the Board of Directors, or his removal from the Board of Directors other than for “cause” or permanent disability or death is also considered “good reason” under Mr. Morgan’s employment agreement.

The employment agreements define “change in control” to mean, generally: (1) the acquisition by any person of 50% or more of our outstanding voting stock; (2) the consummation of a merger or consolidation involving Krispy Kreme if the shareholders of Krispy Kreme immediately before such merger or consolidation do not, as a result of such merger or consolidation, own, directly or indirectly, more than 50% of the outstanding voting stock of the surviving company in substantially the same proportion as their ownership of voting stock of Krispy Kreme immediately before such merger or consolidation; (3) a sale or other disposition of all or substantially all of the assets of Krispy Kreme; (4) a change in the majority composition of the Board not approved by a majority of the directors in office before the change; or (5) approval by our shareholders of a complete liquidation or dissolution of Krispy Kreme, provided that each of the employment agreements provide that if and to the extent required under Section 409A of the Code, an event will be treated as a change in control for purposes of the Employment Agreement only if it is also a “change in control event” (as defined in Treas. Reg. Section 1.409A-3(i)(5)) with respect to Krispy Kreme.

If the employment of a Named Executive Officer is terminated by reason of death or permanent disability, he or she will be entitled to the following: (1) his or her base salary and expenses incurred through the date of termination; and (2) medical benefits for up to 18 months after the date of termination. In addition, in the event of a Named Executive Officer’s permanent disability, insurance benefits will continue under Krispy Kreme’s long-term disability plan in accordance with its terms.

For a detailed discussion of severance and other benefits payable to Named Executive Officers in the case of certain termination events and in the case of a change in control, see “— Potential Payments upon Termination and Change in Control” below.

The employment agreements provide that each Named Executive Officer is subject to a non-compete provision during the term of his or her employment and for a period of one year following the date of termination and is subject to a non-solicitation provision during the term of his or her employment and for a period of two years following the date of termination. If the employment of a Named Executive Officer is terminated for good reason or without cause, the Named Executive Officer is entitled to any amounts payable, as described above, only if the Named Executive Officer has not breached and does not breach the non-compete and non-solicitation provisions in the employment agreement.

The employment agreements also require each Named Executive Officer to comply with the Company’s stock ownership and equity retention policy and compensation recovery policy.

For a discussion and analysis of Krispy Kreme’s compensation program, including each element of compensation provided to the Named Executive Officers for fiscal 2013, please refer to the “Executive Compensation — Compensation Discussion and Analysis” section above.

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Outstanding Equity Awards at 2014 Fiscal Year-End

    The following table provides information with respect to the common stock that may be issued upon the exercise of options and other awards under our existing equity compensation plans as of February 2, 2014.

										Equity	Equity
										Incentive	Incentive
										Plan	Plan
										Awards:	Awards:
			Equity							Number	Market
			Incentive							of	or Payout
			Plan					Market		Unearned	Value of
			Awards:				Number	Value of		Shares,	Unearned
	Number of	Number of	Number of				of Shares	Shares		Units or	Shares,
	Securities	Securities	Securities				or Units	or Units		Other	Units or
	Underlying	Underlying	Underlying	Option			of Stock	of Stock		Rights	Other
	Unexercised	Unexercised	Unexercised	Exercise			That	That		That	Rights
	Options	Options	Unearned	Price per		Option	Have Not	Have Not		Have Not	That Have
	(#)	(#)	Options	Share		Expiration	Vested	Vested(1)		Vested	Not Vested
Name	Exercisable	Unexercisable	(#)	($)		Date	(#)	($)		(#)	($)
James H. Morgan	—	53,698(2)	—	$	17.47	1/30/24	—		—	—	—
	—	—	—		—	—	34,344(3)	$	592,434	—	—
	—	—	—		—	—	40,320(4)		695,520	—	—
	75,000	75,000(5)	—		7.03	1/25/22	—		—	—	—
	112,500	37,500(6)	—		6.39	1/30/21	—		—	—	—
	150,000	—	—		2.65	1/25/20	—		—	—	—
	150,000	—	—		1.40	1/29/19	—		—	—	—
	500,000	—	—		2.89	2/27/18	—		—	—	—
	7,500	—	—		15.36	8/25/14	—		—	—	—
Douglas R. Muir	—	19,018(2)	—	$	17.47	1/30/24	—		—	—	—
	—	—	—		—	—	12,163(3)	$	209,812	—	—
	—	—			—	—	32,256(4)		556,416	—	—
	60,000	60,000(5)	—		7.03	1/25/22	—		—	—	—
	90,000	30,000(6)	—		6.39	1/30/21	—		—	—	—
	30,000	—	—		2.65	1/25/20	—		—	—	—
	30,000	—	—		3.08	4/14/18	—		—	—	—
	40,483	—	—		3.41	9/11/17	—		—	—	—
	120,000	—	—		9.71	11/2/16	—		—	—	—
G. Dwayne Chambers	—	15,661(2)	—	$	17.47	1/30/24	—		—	—	—
	—	100,000(2)	—		17.47	1/30/24	—		—	—	—
	—	—	—		—	—	10,017(3)	$	172,793	—	—
	—	—	—		—	—	26,880(4)		463,680	—	—
	50,000	50,000(5)	—		7.03	1/25/22	—		—	—	—
	26,250	8,750(6)	—		6.39	1/30/21	—		—	—	—
							6,250(7)		107,813
M. Bradley Wall	—	15,661(2)	—	$	17.47	1/30/24	—		—	—	—
	—	—	—		—	—	10,017(3)	$	172,793	—	—
	—	—	—		—	—	26,880(4)		463,680	—	—
	50,000	50,000(5)	—		7.03	1/25/22	—		—	—	—
	75,000	25,000(6)	—		6.39	1/30/21	—		—	—	—
	100,000	—	—		2.65	1/25/20	—		—	—	—
	100,000	—	—		1.40	1/29/19	—		—	—	—
	100,000	—	—		3.08	4/14/18	—		—	—	—
	53,706	—	—		3.41	9/11/17	—		—	—	—
	80,000	—	—		12.52	2/5/17	—		—	—	—
Cynthia A. Bay	—	15,661(2)	—	$	17.47	1/30/24	—		—	—	—
	—	—	—		—	—	10,017(3)	$	172,793	—	—
	—	—	—		—	—	26,880(4)		463,680	—	—
	50,000	50,000(5)	—		7.03	1/25/22	—		—	—	—
	75,000	25,000(6)	—		6.39	1/30/21	—		—	—	—
	100,000	—	—		2.65	1/25/20	—		—	—	—
	100,000	—	—		1.40	1/29/19	—		—	—	—

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____________________
 

(1)	Based on the closing price of our common stock on January 31, 2014 (the last business day of fiscal 2014).
(2)	These stock options vest, provided that the executive’s employment continues through the applicable vesting dates, in substantially equal installments on January 30, 2015, January 30, 2016, January 30, 2017 and January 30, 2018. Vesting of stock options may accelerate upon the occurrence of certain events; see “Executive Compensation — Potential Payments upon Termination and Change in Control — Stock Option Agreements.”
(3)	These restricted stock units vest, provided that the executive’s employment continues through the applicable vesting dates, in substantially equal installments on January 27, 2015, January 27, 2016, January 27, 2017 and January 27, 2018. Vesting of restricted stock units may accelerate upon the occurrence of certain events; see “Executive Compensation — Potential Payments upon Termination and Change in Control — Restricted Stock Unit Agreements.”
(4)	These restricted stock units vest, provided that the executive’s employment continues through the applicable vesting dates, in equal installments on January 27, 2015, January 27, 2016 and January 27, 2017. Vesting of restricted stock units may accelerate upon the occurrence of certain events; see “Executive Compensation — Potential Payments upon Termination and Change in Control — Restricted Stock Unit Agreements.”
(5)	These stock options vest, provided that the executive’s employment continues through the applicable vesting dates, in equal installments on January 25, 2015 and January 25, 2016. Vesting of stock options may accelerate upon the occurrence of certain events; see “Executive Compensation — Potential Payments upon Termination and Change in Control — Stock Option Agreements.”
(6)	These stock options vest on January 30, 2015, provided that the executive’s employment continues through that date. Vesting of stock options may accelerate upon the occurrence of certain events; see “Executive Compensation — Potential Payments upon Termination and Change in Control — Stock Option Agreements.”
(7)	These restricted stock units vest on September 11, 2014, provided that the executive’s employment continues through that date. Vesting of restricted stock units may accelerate upon the occurrence of certain events; see “Executive Compensation — Potential Payments upon Termination and Change in Control — Restricted Stock Unit Agreements.”

Fiscal 2014 Option Exercises and Stock Vested

    The following table provides information with respect to the number and value of shares acquired by our Named Executive Officers during fiscal 2014 from the exercise of vested stock options and the vesting of restricted stock. The value realized on the exercise of options is equal to the market price of one share of the Company’s common stock at the time of exercise minus the exercise price of the options, multiplied by the number of shares acquired on exercise of the options. The value realized on the vesting of stock awards is equal to the closing market price of one share of the Company’s common stock on the date of vesting, multiplied by the number of shares acquired upon vesting.

	Option Awards			Stock Awards
	Number of			Number of
	Shares			Shares
	Acquired	Value Realized		Acquired	Value Realized
	on Exercise	on Exercise		on Vesting	on Vesting
Name	(#)	($)		(#)	($)(1)
James H. Morgan	—		—	13,440	$234,931
Douglas R. Muir	120,000	$	1,458,636(2)	10,752	$187,945
G. Dwayne Chambers	—		—	15,210	$277,121
M. Bradley Wall	6,000		$31,088(3)	8,960	$156,621
Cynthia A. Bay	—		—	15,210	$285,683

____________________
 

(1)	Reflects the value of restricted stock units which vested on January 27, 2014.
(2)	Mr. Muir exercised all 120,000 of these options on April 4, 2013. 60,000 of these options had an exercise price of $1.40 and 60,000 of these options had an exercise price of $2.65.
(3)	Mr. Wall exercised all 6,000 of these options on January 10, 2014. These 6,000 options had an exercise price of $14.04.

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Potential Payments upon Termination and Change in Control

    We do not maintain any severance or change in control plans. However, pursuant to the terms of certain employment agreements, stock option agreements, restricted stock agreements, and restricted stock unit agreements, our executive officers, including our Named Executive Officers, are eligible to receive severance and other benefits in the case of certain termination events and in the case of a change in control. For a detailed description of the employment agreements for our Named Executive Officers, see “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Employment Agreements.”

    The discussion and tables below (as well as the discussion of the employment agreements above) reflect the estimated amount of additional compensation and benefits that would be paid or accrued to each of the Named Executive Officers in the event of all applicable hypothetical scenarios, including:

• a “change in control”, with or without a corresponding termination of employment;
   
• termination by us without “cause”;
   
• termination by the executive for “good reason”;
   
• voluntary termination;
   
• “retirement”;
   
• “disability”; and
   
• death.

The terms “cause,” “change in control,” “disability,” “good reason,” and “retirement” are defined in each respective stock plan or form of award agreement, and these definitions vary slightly depending on the date of the award and the award type. Amounts are not included for compensation and benefits to which an executive would be entitled if the specified event had not occurred.

Restricted Stock Unit Agreements

Each of the restricted stock unit agreements governing restricted stock unit grants made to the Named Executive Officers in fiscal 2013 and fiscal 2014 provide that all of such unvested restricted stock units shall be automatically forfeited upon termination of the applicable executive’s employment, provided that all unvested restricted stock units shall vest upon (1) termination of employment due to death, disability or retirement, (2) a change in control if the successor company does not assume or substitute for the award on substantially equivalent terms, or (3) if the award is substituted, assumed, or continued during a change in control, termination of employment by the Company not for cause or by the executive for good reason within two years after the effective date of (or six months before, but contingent upon) a change in control of Krispy Kreme. The restricted stock unit agreements governing the restricted stock unit grants made to Ms. Bay in fiscal 2010 and to Mr. Chambers in fiscal 2011 provide that all of such unvested restricted stock shall be automatically forfeited upon termination of employment, provided that all unvested restricted stock shall vest upon (1) termination of employment due to death, disability or retirement or (2) a change in control of Krispy Kreme.

Stock Option Agreements

Each of the stock option agreements governing stock option grants made to the Named Executive Officers in fiscal 2014 provide that such stock options shall vest and become exercisable upon (1) termination of employment due to retirement, death, or disability or (2) a change in control if the successor company does not assume or substitute for the award on substantially equivalent terms, or (3) if the award is substituted, assumed, or continued during a change in control, termination of employment by the Company not for cause or by the executive for good reason within two years after the effective date of (or six months before, but contingent upon) a change in control of Krispy Kreme.

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    In the event any of the above accelerated vesting events are triggered, the options will remain exercisable until (1) in the case of termination on account of disability, 360 days after termination, (2) in the case of termination on account of death, 360 days after termination, (3) in the case of retirement, the ten-year anniversary of the grant date, and (4) in the case of termination of employment by the Company not for cause or by the executive for good reason within two years after the effective date of (or six months before, but contingent upon) a change in control, the earlier of the date specified in a notice by the Board of Directors or Compensation Committee, if any, and one year after termination. In the case of termination for any reason other than retirement, death, disability, or cause, vested options remain exercisable for three months following the date of termination.

Fiscal 2011 – Fiscal 2012 Stock Option Grants

In 2011, the Compensation Committee adopted a form of incentive stock option agreement and approved amendments to the form of nonqualified stock option agreement, respectively, to provide that upon a Named Executive Officer’s termination of employment with the Company not for cause or by the Named Executive Officer for good reason within two years after a change in control, his or her options will become vested and exercisable in full (a “double-trigger” requirement). The previous form of nonqualified stock option agreement provided that a Named Executive Officer’s stock options became vested and exercisable in full in the event of only a change in control (a “single-trigger” requirement). Stock options granted in fiscal 2011 and fiscal 2012 shall vest and become exercisable upon (1) termination of employment due to retirement, death, or disability or (2) upon a Named Executive Officer’s termination of employment with the Company not for cause or by the Named Executive Officer for good reason within two years after a change in control of Krispy Kreme. In the event of a change in control, the Board of Directors, in its sole discretion, may give prior written notice of such event to the executive and set a termination date for the exercise of such options. In the event of termination for cause, all options of the executive are terminated.

In the event any of the above accelerated vesting events are triggered, the options will remain exercisable until (1) in the case of termination on account of disability, 180 days after termination, (2) in the case of termination on account of death, 360 days after termination, (3) in the case of retirement, the ten-year anniversary of the grant date, and (4) in the case of a Named Executive Officer’s termination of employment with the Company not for cause or by the Named Executive Officer for good reason within two years after a change in control, the earlier of the date specified in a notice by the Board of Directors, if any, and the then-current expiration date.

In the case of termination for any reason other than retirement, death, disability, or cause, vested options remain exercisable for 90 days following the date of termination (without any acceleration of vesting).

Fiscal 2007 – Fiscal 2010 Stock Option Grants

Each of the stock option agreements governing stock option grants made to the Named Executive Officers in fiscal 2007, fiscal 2008, fiscal 2009, and fiscal 2010 provide that all of such options shall vest and become exercisable upon (1) termination of employment due to retirement, death, or disability or (2) a change in control of Krispy Kreme. In the event of a change in control, the Board of Directors, in its sole discretion, may give prior written notice of such event to the executive and set a termination date for the exercise of such options. In the event of termination for cause, all options of the executive are terminated.

In the event any of the above accelerated vesting events are triggered, the options would remain exercisable until (1) in the case of termination on account of disability, 180 days after termination, (2) in the case of termination on account of death, 360 days after termination, (3) in the case of retirement, the ten-year anniversary of the grant date, and (4) in the case of a change in control, the earlier of the date specified in a notice by the Board of Directors, if any, and the then-current expiration date.

In the case of termination for any reason other than retirement, death, disability, or cause, vested options remain exercisable for 90 days (or 60 days with respect to the stock option agreements governing stock option grants made in fiscal 2007) following the date of termination (without any acceleration of vesting).

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Pre-Fiscal 2007 Stock Option Grants

    Mr. Morgan (in his capacity as a non-employee member of the Board of Directors) and Mr. Wall received stock option grants prior to fiscal 2007. Treatment of these options upon termination or a change in control is generally the same as the treatment of the options granted in fiscal years 2007 – 2011, except that the relevant stock option agreements define change in control (referred to in the agreements as “Corporate Reorganization”) to mean, generally: (1) any person or group purchases 50% or more of our outstanding common stock pursuant to a tender or exchange offer or otherwise becomes the owner of 50% or more of our outstanding common stock; (2) the merger or consolidation of Krispy Kreme if, as a result of which, the holders of outstanding stock of Krispy Kreme immediately prior to such merger or consolidation hold less than 50% of the stock of the surviving company; (3) the sale or other disposition of all or substantially all of the assets of Krispy Kreme; (4) the liquidation of Krispy Kreme; or (5) a change in the majority composition of the Board not approved by two-thirds of the directors in office before the change during any 24-month period during the existence of the option agreement.

Termination Scenario Summary Tables

The amounts shown in the tables below assume that the noted triggering event occurred on February 2, 2014, the last day of fiscal 2014. Therefore, such amounts reflect the additional payments or benefits each Named Executive Officer would be entitled to receive pursuant to his employment agreement, as such existed on February 2, 2014. As of February 2, 2014, Mr. Morgan and Mr. Muir were the only Named Executive Officers who were retirement eligible. Other relevant assumptions and explanations are provided in the footnotes following the tables. The amounts shown reflect only the additional payments or benefits that a Named Executive Officer would have received upon the occurrence of the respective triggering events listed below; they do not include the value of payments or benefits that would have been earned, or any amounts associated with equity awards that would have vested absent the triggering event. The tables below do not take into account any value received by us as a result of the Named Executive Officers’ covenants not to compete.

James H. Morgan

		Termination without
	Termination without	cause or termination	Change
	cause or termination	by executive for good	in control
	by executive for	reason following a	regardless of		Death or
	good reason	change in control	termination(1)	Retirement(2)	disability
Compensation:
Severance pay(3)	$4,243,558	$4,243,558	$—	$—	$—
Vesting of unvested restricted
stock(4)	1,287,954	1,287,954	1,287,954	1,287,954	1,287,954
Vesting of unvested stock
options(5)	1,173,750	1,173,750	1,173,750	1,173,750	1,173,750
Benefits:
Health and dental
insurance(6)	25	25	—	—	25
Total	$6,705,287	$6,705,287	$2,461,704	$2,461,704	$2,461,729

____________________
 

(1)

Applicable only if, following the change in control, either (a) Mr. Morgan is not the chief executive officer of the surviving entity or (b) the equity awards are not assumed or substituted by the surviving company.

(2)

Mr. Morgan is currently “retirement eligible” under the terms of his stock option and restricted stock agreements, having achieved the required age and years of service to the Company, and thus, upon termination of employment by reason of “retirement,” the unvested restricted stock and stock options awarded pursuant to award agreements containing retirement eligibility provisions will immediately vest.

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(3)	In the case of termination without cause or termination by executive for good reason, Mr. Morgan is entitled to the lesser of (a) two times the sum of Mr. Morgan’s base salary and Mr. Morgan’s average annual cash bonus for the three most recently completed fiscal years prior to the fiscal year in which his employment is terminated, or (b) the aggregate amount of Mr. Morgan’s unpaid base salary and bonus (based on the average annual cash bonus for the three most recently completed fiscal years) for the remainder of Mr. Morgan’s current employment period (ending June 30, 2016). Accordingly, the amount in the table reflects two times the sum of Mr. Morgan’s base salary and Mr. Morgan’s average annual cash bonus for the three most recently completed fiscal years. This amount is to be paid in 12 equal installments, the first two of which are to be paid two months following the date of termination and the next ten of which will be paid in ten equal monthly installments commencing three months following the date of termination. Mr. Morgan also is entitled to receive his actual annual bonus amount, based on 100% of base salary, pro-rated based as of the termination date and to be paid 60 days following the date of termination. In the case of termination without cause or termination by executive for good reason within two years following a change in control, Mr. Morgan is entitled to receive two times the sum of Mr. Morgan’s base salary and Mr. Morgan’s average annual cash bonus (the remaining contract value is not applicable for such scenario) in addition to his actual annual bonus amount, based on 100% of base salary, pro-rated based as of the termination date and to be paid within 60 days of termination.
(4)	Represents the intrinsic value as of February 2, 2014 of unvested restricted stock awards. Because Mr. Morgan is currently “retirement eligible” under the terms of his restricted stock agreements, having achieved the required age and years of service to the Company, any termination of employment will result in the vesting of any unvested restricted stock awards.
(5)	Represents the intrinsic value as of February 2, 2014 of unvested stock options. Because Mr. Morgan is currently “retirement eligible” under the terms of his stock option agreements, having achieved the required age and years of service to the Company, any termination of employment will result in the vesting of any unvested stock options.
(6)	Represents 18 months of continued health insurance coverage, computed as the excess of our current COBRA premium for such coverage over Mr. Morgan’s current contribution to the health plan providing benefits to our employees. These benefits would be payable over such 18 months.

Douglas R. Muir

		Termination without
	Termination without	cause or termination	Change
	cause or termination	by executive for good	in control
	by executive for	reason following a	regardless of		Death or
	good reason	change in control	termination	Retirement(1)	disability
Compensation:
Severance pay(2)	$606,400	$1,440,200	$—	$—	$—
Vesting of unvested restricted
stock(3)	766,228	766,228	766,228	766,228	766,228
Vesting of unvested stock
options(4)	939,000	939,000	939,000	939,000	939,000
Benefits:
Health and dental
insurance(5)	18,082	18,082	—	—	18,082
Total	$2,329,710	$3,163,510	$1,705,228	$1,705,228	$1,723,310

____________________
 

(1) Mr. Muir is currently “retirement eligible” under the terms of his stock option and restricted stock agreements, having achieved the required age and years of service to the Company, and thus, upon termination of employment by reason of “retirement,” the unvested restricted stock and stock options awarded pursuant to award agreements containing retirement eligibility provisions will immediately vest.

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(2)	In the case of termination without cause or termination by executive for good reason, represents Mr. Muir’s base salary, to be paid in 12 equal installments, the first two of which are to be paid two months following the date of termination and the next ten of which will be paid in ten equal monthly installments commencing three months following the date of termination, plus a pro-rated annual bonus equal to 60% of base salary, to be paid 60 days following the date of termination. In the case of termination without cause or termination by executive for good reason within two years following a change in control, represents two times Mr. Muir’s base salary, plus two times the target annual bonus equal to 60% of base salary, plus a pro-rated annual bonus equal to 60% of base salary, to be paid 60 days following the date of termination.
(3)	Represents the intrinsic value as of February 2, 2014 of unvested restricted stock awards. Because Mr. Muir is currently “retirement eligible” under the terms of his restricted stock agreements, having achieved the required age and years of service to the Company, any termination of employment will result in the vesting of any unvested restricted stock awards. The grant agreements provide no vesting will occur upon a change in control unless the awards are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(4)	Represents the intrinsic value as of February 2, 2014 of unvested stock options. Because Mr. Muir is currently “retirement eligible” under the terms of his stock option agreements, having achieved the required age and years of service to the Company, any termination of employment will result in the vesting of any unvested stock options. The 2011 and 2012 grant agreements provide no vesting will occur upon a change in control unless a qualifying termination occurs within two years following a change in control. The 2014 grant agreement provides no vesting will occur upon a change in control unless the options are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(5)	Represents 18 months of continued health insurance coverage, computed as the excess of our current COBRA premium for such coverage over Mr. Muir’s current contribution to the health plan providing benefits to our employees. These benefits would be payable over such 18 months.

G. Dwayne Chambers

		Termination without
	Termination without	cause or termination	Change
	cause or termination	by executive for good	in control
	by executive for	reason following a	regardless of	Death or
	good reason	change in control	termination	disability
Compensation:
Severance pay(1)	$453,000	$1,057,000	$—	$—
Vesting of unvested restricted stock(2)	—	744,286	744,286	744,286
Vesting of unvested stock options(3)	—	606,025	606,025	606,025
Benefits:
Health and dental insurance(4)	19,351	19,351	—	19,351
Total	$472,351	$2,426,662	$1,350,311	$1,369,662

____________________
 

(1) In the case of termination without cause or termination by executive for good reason, represents Mr. Chambers’ base salary, to be paid in 12 equal installments, the first two of which are to be paid two months following the date of termination and the next ten of which will be paid in ten equal monthly installments commencing three months following the date of termination, plus a pro-rated annual bonus equal to 50% of base salary, to be paid 60 days following the date of termination. In the case of termination without cause or termination by executive for good reason within two years following a change in control, represents two times Mr. Chambers’ base salary, plus two times the target annual bonus equal to 50% of base salary, plus a pro-rated annual bonus equal to 50% of base salary, to be paid 60 days following the date of termination.

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(2)	Represents the intrinsic value as of February 2, 2014 of unvested restricted stock awards. The 2013 and 2014 grant agreements provide no vesting will occur upon a change in control unless the awards are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(3)	Represents the intrinsic value as of February 2, 2014 of unvested stock options. The 2011 and 2012 grant agreements provide no vesting will occur upon a change in control unless a qualifying termination occurs within two years following a change in control. The 2014 grant agreement provides no vesting will occur upon a change in control unless the options are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(4)	Represents 18 months of continued health insurance coverage, computed as the excess of our current COBRA premium for such coverage over Mr. Chambers’ current contribution to the health plan providing benefits to our employees. These benefits would be payable over such 18 months.

M. Bradley Wall

		Termination without
	Termination without	cause or termination	Change
	cause or termination	by executive for good	in control
	by executive for	reason following a	regardless of	Death or
	good reason	change in control	termination	disability
Compensation:
Severance pay(1)	$477,000	$1,113,000	$—	$—
Vesting of unvested restricted stock(2)	—	636,473	636,473	636,473
Vesting of unvested stock options(3)	—	782,500	782,500	782,500
Benefits:
Health and dental insurance(4)	19,346	19,346	—	19,346
Total	$496,346	$2,551,319	$1,418,973	$1,438,319

____________________

(1)	In the case of termination without cause or termination by executive for good reason, represents Mr. Wall’s base salary, to be paid in 12 equal installments, the first two of which are to be paid two months following the date of termination and the next ten of which will be paid in ten equal monthly installments commencing three months following the date of termination, plus a pro-rated annual bonus equal to 50% of base salary, to be paid 60 days following the date of termination. In the case of termination without cause or termination by executive for good reason within two years following a change in control, represents two times Mr. Wall’s base salary, plus two times the target annual bonus equal to 50% of base salary, plus a pro-rated annual bonus equal to 50% of base salary, to be paid 60 days following the date of termination.
(2)	Represents the intrinsic value as of February 2, 2014 of unvested restricted stock awards. The grant agreements provide no vesting will occur upon a change in control unless the awards are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(3)	Represents the intrinsic value as of February 2, 2014 of unvested stock options. The 2011 and 2012 grant agreements provide no vesting will occur upon a change in control unless a qualifying termination occurs within two years following a change in control. The 2014 grant agreement provides no vesting will occur upon a change in control unless the options are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(4)	Represents 18 months of continued health insurance coverage, computed as the excess of our current COBRA premium for such coverage over Mr. Wall’s current contribution to the health plan providing benefits to our employees. These benefits would be payable over such 18 months.

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Cynthia A. Bay

		Termination without
	Termination without	cause or termination	Change
	cause or termination	by executive for good	in control
	by executive for	reason following a	regardless of	Death or
	good reason	change in control	termination	disability
Compensation:
Severance pay(1)	$477,000	$1,113,000	$—	$—
Vesting of unvested restricted stock(2)	—	636,473	636,473	636,473
Vesting of unvested stock options(3)	—	782,500	782,500	782,500
Benefits:
Health and dental insurance(4)	6,782	6,782	—	6,782
Total	$483,782	$2,538,755	$1,418,973	$1,425,755

____________________

(1)	In the case of termination without cause or termination by executive for good reason, represents Ms. Bay’s base salary, to be paid in 12 equal monthly installments, commencing on the first month anniversary of the date of termination, plus a pro-rated annual bonus equal to 50% of base salary, to be paid 60 days following the date of termination. In the case of termination without cause or termination by executive for good reason within two years following a change in control, represents two times Ms. Bay’s base salary, plus two times the target annual bonus equal to 50% of base salary, plus a pro - rated annual bonus equal to 50% of base salary, to be paid 60 days following the date of termination.
(2)	Represents the intrinsic value as of February 2, 2014 of unvested restricted stock awards. The grant agreements provide no vesting will occur upon a change in control unless the awards are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(3)	Represents the intrinsic value as of February 2, 2014 of unvested stock options. The 2011 and 2012 grant agreements provide no vesting will occur upon a change in control unless a qualifying termination occurs within two years following a change in control. The 2014 grant agreement provides no vesting will occur upon a change in control unless the options are not assumed or substituted by the surviving company or, if assumed or substituted, a qualifying termination occurs within two years following (or six months before, but contingent upon) a change in control.
(4)	Represents 18 months of continued health insurance coverage, computed as the excess of our current COBRA premium for such coverage over Ms. Bay’s current contribution to the health plan providing benefits to our employees. These benefits would be payable over such 18 months.

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RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
(Item Number 3 on the Proxy Card)

    The Audit Committee appointed PricewaterhouseCoopers LLP as Krispy Kreme’s independent registered public accounting firm to audit Krispy Kreme’s financial statements for its fiscal year ending February 1, 2015. PricewaterhouseCoopers LLP has served as independent registered public accounting firm to Krispy Kreme since 1992. Prior to the appointment of PricewaterhouseCoopers LLP as Krispy Kreme’s independent registered public accounting firm for fiscal 2015, the Audit Committee had a series of discussions with PricewaterhouseCoopers LLP regarding the accounting firm’s preliminary audit plan, scope, staffing, the firm’s internal quality-control procedures and the accounting firm’s independence. Based on these discussions and related reports, the Audit Committee considered the accounting firm’s qualifications, performance and independence, and decided to appoint PricewaterhouseCoopers LLP as Krispy Kreme’s independent registered public accounting firm to audit Krispy Kreme’s financial statements for its fiscal year ending February 1, 2015. While ratification by the shareholders of this appointment is not required by law, our articles of incorporation or bylaws, our Board believes that such ratification is desirable. If shareholders do not ratify the decision of the Audit Committee to reappoint PricewaterhouseCoopers LLP as Krispy Kreme’s independent registered public accounting firm for fiscal 2015, the Audit Committee will take the action of the shareholders into account in selecting an independent registered public accounting firm for fiscal 2016.

The Board of Directors recommends a vote “FOR” ratification of PricewaterhouseCoopers LLP as independent registered public accounting firm to Krispy Kreme for fiscal 2015.

INFORMATION RELATED TO OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

General

PricewaterhouseCoopers LLP served as the Company’s independent registered public accounting firm for fiscal 2013 and fiscal 2014. Representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting for purposes of answering appropriate questions, and such representatives will have an opportunity to make a statement at the Annual Meeting if they so desire.

Fees

The following table sets forth the aggregate fees billed by PricewaterhouseCoopers LLP to the Company in each of the last two fiscal years for audit and non-audit services. The nature of the services provided in each such category is described following the table.

	2014		2013
Audit Fees	$	1,132,500	$	1,209,500
Audit-Related Fees		3,500		3,200
Tax Fees		5,553		—
All Other Fees		4,500		4,500
Total	$	1,146,053	$	1,217,200

Audit Fees — Consists of aggregate fees for professional services rendered for the audits of the annual financial statements of Krispy Kreme and reviews of financial statements included in the Company’s Forms 10-Q.

Audit-Related Fees — Consists of aggregate fees for accounting consultations.

Tax Fees — Consists of aggregate fees for tax advice.

All Other Fees — Consists of aggregate fees for accounting research tools.

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Pre-Approval of Audit and Non-Audit Services

    The Audit Committee is responsible for pre-approving all audit and permitted non-audit services provided to the Company by its independent registered public accounting firm. To help fulfill this responsibility, the Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy. Under the policy, all audit and non-audit services must be pre-approved by the Audit Committee either (1) before the commencement of each service on a case-by-case basis, called “specific pre-approval,” or (2) by the description in sufficient detail in exhibits to the policy of particular services which the Audit Committee has generally approved, without the need for case-by-case consideration, called “general pre-approval.” Unless a particular service has received general pre-approval, it must receive the specific pre-approval of the Audit Committee or one of its members to whom the Audit Committee has delegated specific pre-approval authority. The policy describes the audit and audit-related services, if any, which have received general pre-approval. These general pre-approvals allow the Company to engage the independent registered public accounting firm for the enumerated services for individual engagements up to the fee limits described in the policy. The Audit Committee periodically reviews the services that have received general pre-approval and the associated fee ranges. The policy does not delegate to management the Audit Committee’s responsibility to pre-approve services performed by the independent registered public accounting firm. All of the audit, audit-related, tax, and all other services for fiscal 2013 and fiscal 2014 were pre-approved by the Audit Committee.

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REPORT OF THE AUDIT COMMITTEE FOR FISCAL YEAR 2014

    The Audit Committee assists the Board of Directors in its oversight of the integrity of Krispy Kreme’s financial statements, compliance with legal and regulatory requirements, the manner in which management assesses, monitors, and manages the Company’s risk exposure and the adequacy of the Company’s risk-management activities, the qualifications and independence of the independent registered public accounting firm, and the performance of the independent registered public accounting firm and the internal audit function. Management is responsible for Krispy Kreme’s financial statements, internal controls, and the financial reporting process. Krispy Kreme’s independent registered public accounting firm is responsible for expressing an opinion that the consolidated financial statements present fairly, in all material respects, the financial position, results of operations and cash flows based on an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board. In conjunction with the specific activities performed by the Audit Committee in its oversight role:

1.	The Audit Committee has reviewed and discussed the audited financial statements, as of and for the year ended February 2, 2014, with management of Krispy Kreme.
2.	The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed as required by Public Company Accounting Oversight Board Auditing Standard No. 16,Communications with Audit Committees.
3.	The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm such firm’s independence.

Based on the review and discussions referred to in paragraphs one through three above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the 2014 Form 10-K for filing with the SEC.

Robert S. McCoy, Jr., Chair

Charles A. Blixt

Michael H. Sutton

Lizanne Thomas

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TRANSACTIONS WITH RELATED PERSONS

Review, Approval, or Ratification of Transactions with Related Persons

    Our Audit Committee has adopted a written Policy and Procedures with respect to related person transactions (the “Policy”), which is available on our web site athttp://krispykreme.com/corporategovernance. The Policy provides that any proposed related person transaction must be submitted to the Audit Committee for consideration. In determining whether or not to approve the transaction, the Policy provides that the Audit Committee shall consider all of the relevant facts and circumstances available to the Audit Committee, including (if applicable), but not limited to: the benefits to the Company; the impact on a director’s independence, if applicable; the availability of other sources for comparable products or services; the terms of the transaction; and the terms available to unrelated third parties or to employees generally. The Policy provides that the Audit Committee shall approve only those related person transactions that are in, or are not inconsistent with, the best interests of Krispy Kreme and its shareholders, as the Audit Committee determines in good faith. The Policy provides that all material related person transactions are to be disclosed to the full Board of Directors.

For purposes of the Policy, a “related person transaction” is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which Krispy Kreme (including any of its subsidiaries) was, is, or will be a participant and the amount involved exceeds $120,000, and in which any related person had, has, or will have a direct or indirect material interest.

For purposes of the Policy, a “related person” means:

(1)	any person who is, or at any time since the beginning of our last fiscal year was, a director or executive officer or a nominee to become a director of Krispy Kreme;
(2)	any person who is known to be the beneficial owner of more than 5% of any class of our voting securities; or
(3)	any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director, executive officer, nominee, or more than 5% beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee, or more than 5% beneficial owner.

Transactions with Related Persons

There were no reportable transactions with related persons in fiscal 2014.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file initial reports of beneficial ownership and changes in such ownership with the SEC. Such officers, directors, and shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of such forms furnished to us and written representations from our executive officers and directors, all persons subject to the reporting requirements of Section 16(a) filed the required reports on a timely basis during fiscal 2014.

SHAREHOLDERS’ PROPOSALS FOR 2015 ANNUAL MEETING

Shareholders may present proposals for action at a future meeting only if they comply with the requirements of the proxy rules established by the SEC and our bylaws.

The 2015 Annual Meeting of Shareholders is tentatively scheduled to be held on June 24, 2015. Shareholder proposals that are intended to be included in our Proxy Statement and proxy relating to the 2015 Annual Meeting of Shareholders must be received by us no later than January 1, 2015 to be considered for inclusion.

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    If a shareholder intends to submit a nomination for director for our 2015 Annual Meeting of Shareholders that is not to be included in Krispy Kreme’s Proxy Statement and proxy relating to the 2015 Annual Meeting of Shareholders, the shareholder must give us notice in accordance with the requirements set forth in Krispy Kreme’s bylaws during the period from February 17, 2015 to March 19, 2015, the period that is not less than 90 days nor more than 120 days prior to the first anniversary date of Krispy Kreme’s 2014 Annual Meeting of Shareholders. Krispy Kreme’s bylaws require that certain information with respect to the nomination and the shareholder making the nomination be set forth in the notice.

If the date of the 2015 Annual Meeting of Shareholders is not scheduled within a period commencing 30 days before the first anniversary date of Krispy Kreme’s 2014 Annual Meeting of Shareholders and ending 60 days after such anniversary date, shareholders will be advised of such change and of the new dates for submission of nominations for directors.

If a shareholder intends to submit a proposal for our 2015 Annual Meeting of Shareholders that is not to be included in Krispy Kreme’s Proxy Statement and proxy relating to the 2015 Annual Meeting of Shareholders, the shareholder generally must give us notice in accordance with the requirements set forth in Krispy Kreme’s bylaws during the period that is not less than 40 days nor more than 90 days before Krispy Kreme’s 2015 Annual Meeting of Shareholders. Krispy Kreme’s bylaws require that certain information with respect to the proposal and the shareholder making the proposal be set forth in the notice.

To obtain a copy of the relevant bylaw provision or to submit a proposal, a shareholder must submit such request or proposal in writing to: Krispy Kreme Doughnuts, Inc., 370 Knollwood Street, Winston-Salem, North Carolina 27103, Attention: Secretary.

HOUSEHOLDING

Krispy Kreme has previously adopted a procedure approved by the SEC called “householding.” Under this procedure, multiple registered shareholders who share the same last name and address and do not participate in electronic delivery will receive only one copy of the annual proxy materials unless they notify us that they wish to continue receiving multiple copies. We have undertaken householding to reduce our printing costs and postage fees.

If you are a registered shareholder (your shares are held directly in your name) and you wish to opt out of householding so that you and other members of your household receive multiple copies of the proxy materials at the same address, you may do so by calling our Investor Relations Department at (336) 726-8917 or by notifying us in writing at: Krispy Kreme Doughnuts, Inc., 370 Knollwood Street, Winston-Salem, North Carolina 27103, Attention: Secretary. Your notice must be received by us at least 30 days before the mailing of proxy materials, which we expect to be mailed in April or May of each year. You also may request additional copies of the proxy materials by notifying us in writing at the same address.

If you share an address with another registered shareholder and currently are receiving multiple copies of the proxy materials, you may request householding by notifying us at the above-referenced address.

OTHER MATTERS

All of the expenses involved in soliciting proxies for the Annual Meeting will be paid by Krispy Kreme. We may reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for expenses reasonably incurred by them in sending proxy materials to beneficial owners of our common stock. The solicitation of proxies will be conducted primarily by mail, but may include telephone, email, or oral communications by directors, officers, or regular employees of Krispy Kreme, acting without special compensation. In addition, Krispy Kreme has engaged Innisfree M&A Incorporated to act as its proxy solicitor and has agreed to pay it approximately $12,500 plus reasonable fees and expenses for such services.

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    Whether or not you plan on attending the Annual Meeting, please fill in, date, sign, and mail a proxy card, or vote by telephone or electronically through the Internet as soon as possible. If you attend the Annual Meeting and wish to vote in person, you may revoke your proxy at that time. Seating is limited at the Annual Meeting. If you plan to attend, you MUST follow the instructions described above under “Proxy Solicitation and General Information — Admission to Annual Meeting.”

BY ORDER OF THE BOARD OF

DIRECTORS,

DARRYL R. MARSCH
Secretary

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Appendix A

NON-GAAP FINANCIAL INFORMATION

Reconciliation of Adjusted Net Income to Net Income

    The Company has net deferred income tax assets of approximately $107 million as of February 2, 2014, of which approximately $58 million relates to federal and state net operating loss carryovers. The Company’s federal net operating loss carryovers total approximately $174 million.

The Company has reported cumulative pretax income of over $120 million since the beginning of fiscal 2010, and the Company also has generated significant taxable income during this period. However, because of the Company’s utilization of its federal and state net operating loss carryovers and other deferred tax assets, the Company’s cash payments for income taxes have been relatively insignificant during this period. As a result, the provision for income tax expense has substantially exceeded cash payments for income taxes. Until such time as the Company’s net operating loss carryovers are exhausted or expire, GAAP income tax expense is expected to continue to substantially exceed the amount of cash income taxes payable by the Company.

The Company’s fiscal year ends on the Sunday closest to January 31, which periodically results in a 53-week year. Fiscal 2013 contained 53 weeks, while fiscal 2014 contained 52 weeks.

In the second quarter of fiscal 2014, the Company recorded a charge of $1.0 million related to the refinancing of its secured credit facilities, consisting principally of the writeoff of deferred financing costs related to the Company’s term loan, which was retired in full, and the termination of an interest rate hedge related to the term loan. Charges of this nature are not expected to recur on a regular basis.

The following non-GAAP financial information and related reconciliation to GAAP measures are provided to assist the reader in understanding the effects of the above facts and transactions on the Company’s results of operations. In addition, the non-GAAP financial information is intended to illustrate the material difference between the Company’s income tax expense and income taxes currently payable. These non-GAAP performance measures are consistent with other measurements made by management in the operation of the business which do not consider income taxes except to the extent to which those taxes currently are payable, for example, capital allocation decisions and incentive compensation measurements that are made on a pretax basis.

Reconciliation of Consolidated Adjusted Net Income to Consolidated Net Income

	Year Ended
	February 2,	February 3,
	2014	2013
Net income, as reported	$34,256	$20,779
Loss on retirement of debt	967	—
Provision for deferred income taxes	8,014	13,413
Adjusted net income	43,237	34,192
Earnings for the 53rd week	—	(1,273	)
Adjusted net income – 52 week basis	$43,237	$32,919
Adjusted earnings per common share:
52 week basis:
Basic	$0.64	$0.49
Diluted	$0.61	$0.47
Weighted average shares outstanding:
Basic	67,261	67,624
Diluted	71,054	69,896

A-1

DIRECTIONS TO ANNUAL MEETING
KRISPY KREME DOUGHNUTS, INC.
Annual Meeting of Shareholders
Tuesday, June 17, 2014, 9:00 A.M.
Marriott Hotel
Hearn Grand Ballroom
425 North Cherry Street
Winston-Salem, North Carolina 27101

Reminder: Please bring your admission ticket to the Annual Meeting of Shareholders or proof of ownership and valid picture identification. (See instructions described above under Proxy Solicitation and General Information — Admission to Annual Meeting.) Each admission ticket will admit the named shareholder and a guest. Seating is limited at the Annual Meeting so please plan on arriving early. IF YOU DO NOT HAVE VALID PICTURE IDENTIFICATION AND EITHER AN ADMISSION TICKET OR PROOF THAT YOU OWN KRISPY KREME STOCK, YOU WILL NOT BE ADMITTED INTO THE ANNUAL MEETING.

Driving directions to the Marriott:

From the East: Take Business I-40 West toward Downtown Winston-Salem. Take Exit 5C (Cherry Street/Convention Center). Turn right onto South Cherry Street and go 0.34 miles. The Hotel will be on your right.

From the West: Take Business I-40 East toward Downtown Winston-Salem. Take Exit 5C (Cherry Street/Convention Center). Turn left onto High Street at the top of the exit. Turn left onto South Cherry Street and go 0.46 miles. The Hotel will be on your right.

Parking Information:

There is a city-owned parking deck across the street from the Hotel. Self-parking is $1.00/hour and valet parking is $15.00.

KRISPY KREME DOUGHNUTS, INC.
370 KNOLLWOOD STREET
WINSTON-SALEM, NC 27103

VOTE BY TELEPHONE OR INTERNET
QUICK * * * EASY * * * IMMEDIATE
  

Your telephone or Internet vote authorizes the named proxies to vote the shares in the same manner as if you marked, signed and returned your proxy card.

VOTE BY PHONE: Call Toll-Free on a Touch-Telephone 1-800-690-6903. There is NO CHARGE to you for this call. Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 16, 2014. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY INTERNET: The web address is www.proxyvote.com. Use the Internet to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 16, 2014. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

VOTE BY MAIL:Mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to Krispy Kreme Doughnuts, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

VIEW PROXY STATEMENTS AND ANNUAL REPORTS ON THE INTERNET: If you agree to view future Proxy Statements and Annual Reports of the Company on the Internet instead of receiving paper copies in the mail, as described in the accompanying Proxy Statement (to the extent the Company makes such option available), please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.

IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL PROXY CARD.
THANK YOU FOR VOTING.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:	M74558-P51354	KEEP THIS PORTION FOR YOUR RECORDS
		DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

KRISPY KREME DOUGHNUTS, INC.
	The Board of Directors recommends you vote FOR the Directors listed in Proposal 1.
	Vote on Directors
	1.	ELECTION OF CLASS III DIRECTORS
		Nominees:
		01)	C. Stephen Lynn
		02)	Michael H. Sutton
		03)	Lizanne Thomas

For All	Withhold All	For All Except	To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
o	o	o

The Board of Directors recommends you vote FOR Proposals 2 and 3.		For	Against	Abstain
Vote on Other Matters
2.	Advisory approval of the compensation of our named executive officers as disclosed in our 2014 Proxy Statement.	o	o	o
3.	The ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for its fiscal year ending February 1, 2015.	o	o	o
This proxy is solicited on behalf of the Board of Directors.
The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder(s).If no direction is made, this proxy will be voted FOR items 1, 2 and 3.
If any other matters properly come before the Annual Meeting, or any adjournment or postponement thereof, or if cumulative voting is required, the persons named in this proxy are authorized to vote in their discretion in accordance with their best judgment.

For address changes and/or comments, please check this box and write them on the back where indicated. o

(NOTE:Please sign exactly as your name(s) appear(s) hereon. All holders must sign. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation, please sign in full corporate name, by authorized officer. If a partnership, please sign in partnership name by authorized person.)

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting, Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.

KRISPY KREME DOUGHNUTS, INC.
Annual Meeting of Shareholders
Tuesday, June 17, 2014, 9:00 A.M.
Marriott Hotel
Hearn Grand Ballroom
425 North Cherry Street
Winston-Salem, North Carolina 27101

ADMISSION TICKET

       Only shareholders of record as of the close of business on April 11, 2014, or their duly appointed proxies, are entitled to attend the Annual Meeting.

       Each Admission Ticket will admit the named shareholder and a guest. Seating is limited at the Annual Meeting, so please plan on arriving early. All shareholders will be required to present valid picture identification. IF YOU DO NOT HAVE VALID PICTURE IDENTIFICATION AND EITHER AN ADMISSION TICKET OR PROOF OF OWNERSHIP, YOU WILL NOT BE ADMITTED INTO THE ANNUAL MEETING.

       When you arrive at the Annual Meeting site, please fill in your complete name in the space provided below and submit this Ticket to one of the attendants at the registration desk. This Ticket is not transferable.

Shareholder Name:  _________________________________________

ê   IF YOU PLAN TO ATTEND THE MEETING, DETACH ADMISSION TICKET HERE   ê

M74559-P51354      

Krispy Kreme Doughnuts, Inc.
370 Knollwood Street
Winston-Salem, North Carolina 27103
Attention: Secretary

      The undersigned hereby appoints James H. Morgan and Douglas R. Muir, or either of them, as proxies of the undersigned to vote the common stock of the undersigned at the Annual Meeting of Shareholders of Krispy Kreme Doughnuts, Inc. (the "Company") to be held on June 17, 2014, and at any adjournment or postponement thereof.

     The Board of Directors recommends a vote "FOR": (1) the election of the directors named in this proxy and accompanying Proxy Statement, (2) the advisory approval of the compensation of the Company's named executive officers as disclosed in the accompanying Proxy Statement, and (3) the ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for its fiscal year ending February 1, 2015; and unless instructions to the contrary are indicated in the space provided, this proxy will be so voted.

Address Changes/Comments:

(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

Continued and to be signed on reverse side