Revised December 4, 2007
KRISPY KREME DOUGHNUTS, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
This Code of Business Conduct and Ethics (this “Code”) of Krispy Kreme Doughnuts,
Inc. (“Krispy Kreme” or “we”) covers a wide range of business practices and procedures. It
does not cover every issue that may arise, but it sets out policies to guide all Directors, officers
and other employees of Krispy Kreme and its consolidated subsidiaries. All of the members of
Krispy Kreme’s Board of Directors (“Directors”), officers and other employees must conduct
themselves according to these policies and seek to avoid even the appearance of improper
Directors, officers and other employees must certify their acknowledgment of and
compliance with this Code.
Those persons who violate the policies in this Code will be subject to disciplinary
action, up to and including a discharge from Krispy Kreme and, in some cases, civil
liability and criminal prosecution. If you are in a situation that you believe may violate or
lead to a violation of this Code, or if you become aware of violations or potential violations
of this Code, you must follow the procedures described in the section of this Code entitled
Reporting Any Illegal or Unethical Behavior. We will not tolerate retaliation for reports
made ill good faith.
If you have any questions about this Code, you should direct these questions to your
supervisor or Krispy Kreme’s Legal Department.
2. COMPLIANCE WITH LAWS, RULES AND REGULATIONS
Obeying the law, both in letter and in spirit, is one of the foundations on which our
ethical policies are built. Therefore, all Directors, officers and other employees must respect and
obey all applicable governmental laws, rules and regulations. Such legal compliance includes,
without limitation, compliance with the “insider trading” prohibitions set forth in the Insider
Trading section of this Code, as well as, when applicable, our separate Securities Trading Policy
referenced in the Insider Trading section of this Code, which applies to our Directors, officers
and certain other management personnel. Please consult with Krispy Kreme’s Legal Department
if you have any questions.
3. CONFLICTS OF INTEREST
Krispy Kreme respects the rights of Directors, officers and other employees to manage
their personal affairs and investments and does not wish to intrude upon their personal lives. At
the same time, Directors, officers and other employees must act in the best interests of Krispy
Kreme and avoid situations that present a potential or actual conflict between their interests and
the interests of Krispy Kreme.
A “conflict of interest” exists when a person’s personal interests conflict or interfere in
any way with the interests of Krispy Kreme. A conflict situation can arise when a Director, officer or other employee of Krispy Kreme takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest also arise
when a Director, officer or other employee, or members of his or her family, receive improper
personal benefits as a result of his or her position in or with Krispy Kreme. Loans to, or
guarantees of obligations of Directors, officers and other employees, or their family members,
can also create conflicts of interest. Federal law prohibits loans by Krispy Kreme to its Directors
and executive officers. Loans against retirement savings do not constitute a conflict of interest.
Conflicts of interest are generally prohibited as a matter of Krispy Kreme policy.
Exceptions may only be made after review and approval in accordance with the following
procedures. For employees and officers, other than executive officers, all potential conflicts of
interest must be reported to and approved in writing by the employee’s immediate supervisor or
store/plant manager or, in the case of a non-executive officer, by such officer’s supervising
officer. For Directors and executive officers, all potential conflicts of interest must be reported
to and approved by the Nominating and Corporate Governance Committee of Krispy Kreme’s
Board of Directors (the “Governance Committee”).
Conflicts of interest may not always be clear-cut, so if you have a question, you should
consult your supervisor or Krispy Kreme’s Legal Department.
No Director, officer or other employee shall engage (or shall permit an immediate family
member to engage) in a Related Person Transaction (as defined in our Policy and Procedures
with respect to Related Person Transactions (the “Related Person Transaction Policy”)) unless
such transaction is approved in accordance with the Related Person Transaction Policy.
Examples of Conflicts of Interests
This Code cannot specifically address every potential conflict of interest; therefore, you
are expected to closely evaluate the appropriateness of any transaction or relationship that might
give rise to a conflict of interest. The following are some of the ways in which a conflict of
interest may arise:
Outside or Additional Services and Part-Time Work
It is a conflict of interest for a Krispy Kreme officer or other employee to work
simultaneously for a competitor. Our competitors include Dunkin’ Donuts, Tim Hortons,
Entenmann’s and regionally and locally owned doughnut shops and distributors. It also is a
conflict of interest for a Krispy Kreme officer or other employee (other than a non-management
store level employee) to work simultaneously for a material customer or material supplier.
Officers may take on additional part-time work with organizations that are not our material
customers, material suppliers, or competitors; and non-management store level employees may
take on additional part-time work with any of our customers or suppliers as well as with
organizations that are not our customers, suppliers, or competitors. While such work in itself
does not constitute a conflict of interest, such work must not interfere with your job or the
interests of Krispy Kreme. Upon acceptance of such additional work that does not constitute a
conflict of interest, the employee must notify the employee’s supervisor or, in the case of an
executive officer, the Chief Executive Officer. When in doubt as to whether a conflict exists, you should discuss the nature of the additional work with your supervisor or Krispy Kreme’s Legal Department prior to accepting any additional employment.
Prior to accepting any additional employment that may constitute a conflict of interest,
the officer or other employee must get prior written approval in accordance with the procedures
described in Section 13.
In addition, no Director, officer or other employee shall accept compensation for services
performed for Krispy Kreme from any source other than Krispy Kreme.
Direct Reporting to Spouse, Partner or Immediate Family
The potential for conflict of interest clearly exists if your immediate family member (i.e.,
spouse, sibling, child, or parent) or someone with whom you have a romantic relationship also
works at Krispy Kreme and is in a direct reporting relationship to you. Directors, officers and
other employees should not directly supervise, report to, or be in a position to influence the
hiring, work assignments or evaluations of an immediate family member or someone with whom
they have a romantic relationship.
Relationships with a Competing Business and Certain Other Entities
Engaging with a competing business while employed with Krispy Kreme is a conflict of
interest. For that reason, you may not, without prior approval engage in the following activities
with a competing business, an entity that has a material financial relationship with Krispy Kreme
or an entity with interests which are adverse to or conflict with, in a material respect, the interests
of Krispy Kreme:
||serve as a Director, officer or key personnel;
||own more than 10% of the stock or other equity interest; or
||provide directly consulting, advisory or other services.
The determination of whether a “material financial relationship” exists or whether an
interest is adverse to (or in conflict with) the interests of Krispy Kreme in a material respect will
be made on a case-by-case basis.
Gifts and Entertainment
The receipt or giving of gifts or favors may be seen as an improper inducement to grant
some concession in return to the donor. Krispy Kreme wants its customers, collaborators,
vendors and suppliers to understand that their business relationship with Krispy Kreme is based
totally on their respective competitive abilities to meet our business needs.
The purpose of business entertainment and gifts in a commercial setting is to create good
will and sound working relationships, not to gain unfair advantages. No gift or entertainment
should ever be offered, given, provided or accepted by any Krispy Kreme Director, officer or
other employee, or any of their family members, unless it (a) is other than cash, (b) is consistent with customary business practices, ( c) is not excessive in value, (d) cannot be construed as a bribe or payoff and ( e) does not violate any laws or regulations. Expenses paid in connection
with a continuing education event, an industry or professional forum or other event where
participation is beneficial to Krispy Kreme are permitted. These rules apply at all times and do
not change during traditional gift-giving seasons. If you have any question about whether a gift
or proposed gift fits within these criteria, you should discuss the matter with Krispy Kreme’s
4. INSIDER TRADING
The federal securities laws prohibit the purchase or sale of securities by a person, in
breach of a fiduciary duty or other relationship of trust or confidence, while he or she is in
possession of material non-public information relating to those securities. The federal securities
laws also prohibit persons in possession of material non-public information from disclosing it to
(i.e., “tipping”) any person who might trade in the relevant securities while in possession of the
information. Even if those to whom you disclose such inforn1ation do not trade while aware of
the material non-public inforn1ation, you can be responsible for the trades of persons who
received material non-public information directly or indirectly from you. These laws apply to
all Directors and all levels of our employees and their families, not just management and
It is our policy that Directors, officers and other employees may not, while aware of any
material nonpublic information about Krispy Kreme, engage in any transaction involving a
purchase or sale of our securities, disclose such information to other persons or enter into any
other transaction to take advantage of that information. To use material non-public information
for personal financial benefit or to “tip” others who might make an investment decision on the
basis of this information is not only unethical but also illegal.
Information is “material” if its disclosure to the public would affect a reasonable
investor’s decision to purchase or sell the securities. Information concerning Krispy Kreme’s
sales, earnings, business prospects, potential dividends, significant acquisitions or mergers,
securities transactions and major litigation are typical examples of “material” information.
They are not, however, the only items which could constitute “material” information.
Information is “non-public” if it is not generally available to the ordinary investor in the
marketplace. Any information which is not available to the ordinary investor and which
could reasonably be expected to affect that investor’s trading decision is material nonpublic
information. The term “securities” not only includes our common stock but also
includes stock options, restricted stock and restricted stock units and any other securities that we
may issue from time to time and any other securities that relate to or derive their value from our
securities whether or not issued by us.
Violations of the securities laws are taken very seriously. Violations can be prosecuted
even when the amount involved is small or when the “tipper” made no profit at all. Government
agencies regularly monitor trading activities. Violations can result in serious criminal and civil
penalties against the individuals involved.
Our Directors, officers and certain other management personnel and their families are
also subject to the separate Krispy Kreme Securities Trading Policy, the provisions of which
supplement and are in addition to this Code. The Krispy Kreme Securities Trading Policy is
available from the Chief Financial Officer, Legal Department, or on Krispy Kreme’s Intranet.
If you have any question or concerns about your responsibilities under the insider trading
laws, contact a member of our Securities Trading Policy Committee (which consists of our Chief
Financial Officer, General Counsel and Associate General Counsel).
5. CORPORATE OPPORTUNITIES
Directors, officers and other employees are prohibited from (a) taking for themselves
personally opportunities that are discovered through the use of Krispy Kreme’s property,
information or position; (b) using Krispy Kreme’s property, inforn1ation, or position for
improper personal gain; and (c) competing with Krispy Kreme directly or indirectly. Directors,
officers and other employees owe a duty to Krispy Kreme to advance its legitimate business
interests when the opportunity to do so arises.
6. COMPETITION AND FAIR DEALING
Krispy Kreme seeks to outperform our competitors fairly and honestly and seeks
competitive advantages through superior performance, never through unethical or illegal
business practices. Stealing other companies’ proprietary Information, possessing trade secret
information that was obtained without the owner’s consent, or inducing such disclosures by past
or present employees of other companies is prohibited. Our Directors, officers and other
employees should endeavor to respect the rights of and deal fairly with Krispy Kreme’s
customers, suppliers, competitors and employees. No Director, officer or other employee should
take unfair advantage of anyone through manipulation, concealment, abuse of privileged
information, misrepresentation of material facts, or any other intentional unfair dealing practice.
7. EQUAL EMPLOYMENT OPPORTUNITY POLICIES
Krispy Kreme’s policies are designed to ensure that all employees are treated fairly and
with respect, and that employees treat others with the same respect. It is Krispy Kreme’s policy
to prohibit unlawful discrimination on the basis of race, color, religion, sex, pregnancy, age,
national origin, disability, veteran status, sexual orientation, marital status or any other factor
prohibited by law. This policy applies to all personnel actions, including recruiting, hiring,
promotions, compensation, benefits, transfers, layoffs, and tern1ination.
Krispy Kreme is committed to providing a work environment that is free from all forms
of discrimination and conduct that can be considered harassing, coercive, or disruptive, including
sexual harassment. Actions, words, jokes, comments, signs, epithets, slurs, pictures, posters, email
jokes, faxes, pranks, intimidation, physical contact or violence based on an individual’s sex,
race, color, national origin, age, religion, disability, sexual orientation, marital status, pregnancy,
veteran status, or any other legally protected factor will not be tolerated and are prohibited by
this policy. Harassment may include conduct which is not directed at a particular individual, but
which occurs in his or her presence. Inappropriate material transmitted electronically by e-mail
or the Internet also constitutes prohibited harassment and will not be tolerated by Krispy Kreme.
This policy prohibits any form of harassment of employees by managers, supervisors or
coworkers, both in the workplace and off the premises, including at social activities conducted or
sponsored by Krispy Kreme. Similarly, Krispy Kreme will not tolerate harassment, including
sexual harassment, by its employees of non-employees with whom Krispy Kreme employees
have a business, service, or professional relationship.
If an employee believes that he or she has been subjected to discrimination or harassment
of any type, the employee should promptly notify his or her supervisor, the Human Resources
Department or Krispy Kreme’s Legal Department. Any supervisor who becomes aware of
possible discrimination or harassment must immediately advise Krispy Kreme’s General Counsel
or Senior Vice President - Human Resources. All reports of discrimination, harassment or
retaliation will be investigated promptly and confidentially, to the extent possible.
8. RECORD-KEEPING AND QUESTIONABLE ACCOUNTING OR AUDITING MATTERS
Krispy Kreme requires honest and accurate recording and reporting of information in
order to make responsible business decisions and provide an accurate account of our
performance. It is a violation of law and Krispy Kreme policy for any Krispy Kreme employee
to attempt to improperly influence or mislead any accountant engaged in preparing our audit.
We are committed to full compliance with all requirements applicable to our public disclosures.
We require that our financial statements and other reports fairly present the financial condition,
results of operations and cash flow of Krispy Kreme and that Krispy Kreme comply in all
respects with applicable law, governmental rules and regulations, including generally accepted
accounting principles and applicable rules of the U.S. Securities and Exchange Commission and
other market and banking regulators.
All of Krispy Kreme’s books, records, accounts and financial statements must be
maintained in reasonable detail, must appropriately reflect Krispy Kreme’s transactions and must
conform both to applicable legal and accounting requirements and to Krispy Kreme’s system of
internal controls. Unrecorded or “off the books” funds or assets should not be maintained under
any circumstances. The accurate and timely reporting of our financial results and financial
condition requires that all financial information be recorded promptly and accurately, and that
our systems for recording and reporting that information function properly and be subject to
regular and thorough evaluations. This policy also applies to all operating reports or records
prepared for internal or external purposes, such as quality control reports, or sales projections.
All employees are responsible to report to Krispy Kreme any questionable accounting,
internal accounting controls or auditing matters that may come to their attention, and may report
concerns regarding these matters, without fear of retaliation of any kind, on a confidential,
anonymous basis, by following the procedures as set forth in Section 14 for reporting violations.
Records should be retained or destroyed according to Krispy Kreme’s record retention
policies. In the event of litigation or governmental investigation, please consult our General
Many employees regularly incur business expenses, which must be documented and
recorded accurately in accordance with Krispy Kreme’s Employee Reimbursement Policy (the
“Reimbursement Policy”). If you are not sure whether a certain expense is appropriately
permitted, ask your supervisor. Please refer to the Reimbursement Policy for more information.
Directors, officers and other employees of Krispy Kreme must maintain the
confidentiality of confidential Information entrusted to them by Krispy Kreme except when
disclosure is either expressly authorized by Krispy Kreme or required by law. Confidential
information includes all non-public information, including information that might be of use to
competitors, or harmful to Krispy Kreme, if disclosed. It also includes confidential information
that suppliers and customers have entrusted to us. Krispy Kreme expects that each Director,
officer and other employee will preserve Krispy Kreme’s confidential information even after his
or her employment or relationship with Krispy Kreme ends. In some cases, disclosure of
confidential inforn1ation, even after termination of employment or other relationship, may result
in civil liability to the individual. All Directors, officers and other employees must, upon
termination of employment or relationship with Krispy Kreme, return all confidential
inforn1ation to Krispy Kreme, including originals and copies, whether in electronic or hard copy.
No Krispy Kreme Director, officer or other employee may provide non-public corporate
Information to persons outside Krispy Kreme, including the media, unless authorized to do so by
the Chief Financial Officer or General Counsel. In all cases, employees must refer media
inquiries to our Director of Corporate Communications. Only designated Krispy Kreme
spokespersons may provide comments to the media.
Before publishing, making speeches or giving interviews that may reflect on Krispy
Kreme, Directors, officers and other employees must notify our Director of Corporate
10. PROTECTION AND PROPER USE OF KRISPY KREME ASSETS
All Directors, officers and other employees should endeavor to protect Krispy Kreme’s
assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on
Krispy Kreme’s profitability. All of our assets should be used for legitimate business purposes
only. Any suspected incident of fraud or theft should be immediately reported for investigation.
Our equipment should not be used for non-Krispy Kreme business, though incidental personal
use may be permitted.
The obligation of Directors, officers and other employees to protect Krispy Kreme’s
assets includes its proprietary information. Proprietary information includes intellectual property
such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and
other strategic plans, engineering and manufacturing ideas, designs, databases, records, salary
information and any unpublished financial data and reports. Unauthorized use or distribution of
this information violates Krispy Kreme policy. It could also be illegal and result in civil or even
criminal penalties. Directors, officers and other employees who have access to proprietary and
confidential Information are obligated to safeguard it from unauthorized access in accordance with Krispy Kreme’s policy on confidential Information (see the Confidentiality section of this Code).
Officers and other employees should also refer to the Krispy Kreme Employee Manual for additional policies and procedures with respect to protection and proper use of our assets.
11. USE OF NETWORKS, E-MAIL AND INTERNET SERVICES
Krispy Kreme provides to its Directors, officers and certain other employees access to
computers, computer networks, e-mail systems and Internet services that are provided solely to
help such person do their work. Incidental and occasional personal use is permitted, so long as
such use does not interfere with Krispy Kreme’s needs and operations, is not for personal gain or
for any other improper purpose, and does not otherwise violate this Code.
All information that is stored on or has passed through Krispy Kreme’s servers or other
equipment, including but not limited to all e-mails, voicemails, records of Internet access, and
documents created on any Krispy Kreme computer, is the exclusive property of Krispy Kreme.
Directors, officers and other employees have no right or expectation of privacy with regard to
their use of Krispy Kreme’s electronic resources or with regard to information that is stored on
Krispy Kreme servers, that is received, created, sent, or accessed by the user, or to which the user
is given access.
Krispy Kreme, in its sole discretion, may at any time without notice inspect and monitor
the use of any and all electronic resources, including e-mail messages and Internet use. Krispy
Kreme may review deleted e-mail messages and the Websites accessed. The encryption,
labeling of an e-mail or document as private, deletion of an e-mail or document or any other such
action does not diminish Krispy Kreme’s rights or ability to monitor this activity. Directors,
officers and other employees are advised that Krispy Kreme backs up the network and that
messages deleted from one PC are not necessarily deleted from the network and back-up files.
Due to the potential for security breaches, Directors, officers and other employees must
not download software from the Internet to Krispy Kreme’s Information system, unless prior
written approval has been obtained from our Vice President - Information Systems or his or her
designee. Likewise, Directors, officers and other employees must exercise extreme caution in
downloading and executing any files attached to e-mail. If an attachment is not clearly business-related
and/or expected from a known source, it should not be opened or executed and should be
immediately forwarded to Krispy Kreme’s Information Systems Department.
Directors, officers and employees may use software only in accordance with its licensing
agreement, and without the authorization of Krispy Kreme, users may not (1) install any software
on Krispy Kreme-owned computer equipment, (2) install Krispy Kreme-owned software on any
non-Krispy Kreme-owned computer equipment or (3) provide copies of Krispy Kreme-owned or
licensed software to anyone.
12. PAYMENTS TO GOVERNMENT PERSONNEL
The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or
indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any jurisdiction.
In addition, the United States Government has a number of laws and regulations
regarding business gratuities that may be accepted by United States Government personnel. The
promise, offer or delivery to an official or employee of the United States Government of a gift,
favor or other gratuity in violation of these rules not only violates Krispy Kreme policy but could
also be a criminal offense. State and local governments, as well as foreign governments, may
have similar rules. Krispy Kreme’s General Counsel can provide guidance to you in this area
regarding specific issues.
13. INTERPRETATIONS OR WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS
Any interpretation or waiver of this Code for our non-executive officer employees may
be made only by our Chief Executive Officer, Chief Financial Officer or Vice President -
Any interpretation or waiver of this Code for our Directors or executive officers may be
made only by the independent Directors of the Board of Directors or the Governance Committee
and will be promptly disclosed, if required by law or the rules of the New York Stock Exchange.
14. REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR
Directors, officers and other employees should promote ethical behavior and: (a)
encourage employees to talk to supervisors, managers and other appropriate personnel when in
doubt about the best course of action in a particular situation; (b) encourage employees to report
violations of laws, rules, regulations or this Code to appropriate personnel; and (c) inform
employees that Krispy Kreme will not allow retaliation for reports made in good faith.
If you believe that actions have taken place, may be taking place or may be about to take
place that violate or would violate this Code, you must bring the matter to the attention of Krispy
Kreme. You may report violations or potential violations of this Code to your supervisor or
store/plant manager and discuss with your supervisor or store/plant manager any questions you
may have about the best course of action in a particular situation. Any supervisor or store/plant
manager who receives a report of a violation or potential violation of this Code must report it
immediately to Krispy Kreme’s General Counselor Vice President - Internal Audit.
In addition, you may report violations or potential violations of this Code by any of the
||In writing either by internal mail or U.S. mail addressed to Krispy Kreme’s General
Counsel, P. O. Box 83, Winston-Salem, NC 27102.
||By contacting Krispy Kreme’s Vice President - Internal Audit.
||By contacting Krispy Kreme’s Senior Vice President - Human Resources.
||By calling Krispy Kreme’s Hotline at 1-877-888-0002.
Violations involving executive officers, senior financial officers or Directors must be
reported to the Governance Committee of the Board of Directors.
We would prefer you identify yourself to facilitate our investigation of any report.
However, you may choose to remain anonymous. We will use reasonable efforts to protect the
identity of any person who reports potential misconduct and any retaliation for reports of
misconduct by others made in good faith will not be tolerated. Indeed, any Directors, officers or
other employees who engage in retaliation are subject to discipline, up to and including
termination, and in appropriate cases, civil and/or criminal liability. We will also use reasonable
efforts to protect the identity of the person about or against whom an allegation is brought, unless
and until it is determined that a violation has occurred. Any person involved in any investigation
in any capacity of a possible misconduct must not discuss or disclose any information to anyone
outside of the investigation unless required by law or when seeking his or her own legal advice,
and is expected to cooperate fully in any investigation.
Any use of these reporting procedures in bad faith or in a false or frivolous manner will
be considered a violation of this Code. Further, you should not use Krispy Kreme’s Hotline for
personal grievances that do not involve this Code.
Directors, officers and other employees are expected to cooperate fully in Krispy
Kreme’s investigation of complaints. No Director, officer or other employee will be subject to,
and it is Krispy Kreme’s policy to strictly prohibit, any form of discipline or retaliation for
reporting incidents of discrimination or harassment, cooperating in an investigation, or pursuing
any claim of discrimination or harassment. Any Director, officer or other employee who is
found to have engaged in discrimination, unlawful harassment or retaliation will be subject to
discipline, up to and including termination.
Any person who takes any action whatsoever in retaliation against any employee
who has in good faith raised any question or concern about compliance with this Code will
be subject to serious sanctions, which may include termination.
15. DOING WHAT’S RIGHT
We create a stronger and better place to work when we come together as one company,
with one ethical culture and one set of standards. We are responsible for our own actions, and
we are responsible to each other. Ethical decision making is about choices. But ethical choices
are not always obvious. When faced with a choice like this, it might be helpful to ask and
answer the following questions:
||Is the health or safety of anyone endangered by my action or inaction?
||Will my action or inaction violate any Federal, state, or local law, rule, or regulation
or any company policies or procedures?
||Would I feel proud if the full details of my action or inaction were disclosed to my
fellow employees, friends, family and/or the public?
||Would the most ethical person I know do it?
||How would I feel if I were on the receiving end of the decision?
This Code does not create any contractual rights of any kind between Krispy Kreme
and its Directors, officers or other employees. In addition, it does not modify any
employment relationships, whether at will or governed by a contract.
Krispy Kreme reserves the rights to amend or alter this Code at any time and for