KRISPY KREME DOUGHNUTS, INC. NONQUALIFIED STOCK OPTION AGREEMENT

Exhibit 10.41

KRISPY KREME DOUGHNUTS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT

      THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made as of [   ] (the “Grant Date”), by and between Krispy Kreme Doughnuts, Inc., a North Carolina corporation (the “Corporation”), and [   ] (the “Optionee”).

      WHEREAS, the Committee appointed under the Krispy Kreme Doughnuts, Inc. 2000 Stock Incentive Plan (the “Committee”) granted Optionee an option to purchase shares of the Corporation’s Common Stock, no par value per share (the “Common Stock” or the “Stock”), pursuant to the Krispy Kreme Doughnuts, Inc. 2000 Stock Incentive Plan (the “Plan”) (capitalized terms used herein shall have the meanings set out in the Plan unless otherwise specified in this Agreement); and

      WHEREAS, this Agreement evidences the grant of such option.

      NOW, THEREFORE, in consideration of the foregoing, of the mutual promises set forth below and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1. Summary of Grant

2. Grant of Option

      The Committee granted Optionee a nonqualified option to purchase from the Corporation, during the period specified in Sections 3 and 4 of this Agreement, a total of [   ] shares of Common Stock, at the purchase price of [   ] per share (the “Exercise Price”), in accordance with the terms and conditions stated in this Agreement. The shares of Common Stock subject to the option granted hereby are referred to below as the “Shares,” and the option to purchase such Shares is referred to below as the “Option.”

3. Vesting and Exercise of Option

      The Option shall vest and become exercisable in increments in accordance with the four-year schedule set forth below measured from the Grant Date, provided that the Option shall vest and become exercisable with respect to an increment as specified only if the Option has not terminated pursuant to Section 4 with respect to such increment:

      (a) no portion of the Option shall vest or become exercisable until the first anniversary of the Grant Date [   ];

      (b) on [   ], the Option shall vest and become exercisable with respect to 25% of the Shares;

      (c) on [   ], the Option shall vest and become exercisable with respect to an additional 25% of the Shares;

      (d) on [   ], the Option shall vest and become exercisable with respect to an additional 25% of the Shares; and

      (e) on [   ], the Option shall vest and become exercisable with respect to an additional 25% of the Shares; and

      (f) notwithstanding the vesting provisions described above, the option shall vest and become exercisable with respect to 100% of the Shares if the Optionee’s Termination of Employment is on account of Retirement, death, or Disability.

      The schedule set forth above is cumulative, so that Shares as to which the Option has become vested and exercisable on and after a date indicated by the schedule may be purchased pursuant to exercise of the Option at any subsequent date prior to termination of the Option. The Option may be exercised at any time and from time to time to purchase up to the number of Shares as to which it is then vested and exercisable.

      Also notwithstanding the foregoing, the Option shall vest and become exercisable, to the extent not already vested and exercisable, upon a Corporate Reorganization, provided that Optionee has not incurred a Termination of Employment prior to the date of such Corporate Reorganization. In the event of a Corporate Reorganization, the Corporation shall send Optionee prior written notice of the effectiveness of such event and the last day on which Optionee may exercise the Option. Optionee may, upon compliance with all of the terms of this Agreement and the Plan, purchase any or all of the Shares with respect to which the Option is vested and exercisable on or prior to the last day specified in such notice, and, to the extent the Option is not exercised, it shall terminate at 5:00 P.M., Eastern Standard Time, on the last day specified in such notice.

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4. Termination of Option

      Unless adjusted by the Committee in its sole discretion, the Option shall remain exercisable as specified in Section 3 above until 5:00 p.m., Eastern Standard Time, on the earliest to occur of the dates specified below, upon which date the Option shall terminate:

      (a) the date all of the Shares are purchased pursuant to the terms of this Agreement;

      (b) upon the expiration of 60 days following the Optionee’s Termination of Employment for any reason other than Retirement, death, Disability, or Cause;

      (c) upon the expiration of 180 days following Optionee’s Termination of Employment on account of Disability;

      (d) upon the expiration of 360 days following Optionee’s Termination of Employment on account of death;

      (e) immediately upon Optionee’s Termination of Employment for Cause, as defined below in Section 23(a);

      (f) immediately upon the Optionee engaging in Detrimental Activity, as defined below in Section 23(c);

      (g) on the last date specified in the notice described in Section 3 above in the event of a Corporate Reorganization; or

      (h) on the ten year anniversary of the Grant Date (the “Expiration Date”).

      If a Optionee’s Termination of Employment is on account of Retirement, the Termination of Employment shall not cause the Option to terminate.

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

5. Manner of Exercise of Option

      (a) Exercise . The Option may be exercised only by (i) Optionee’s completion, execution and delivery to the Corporation of a notice of exercise and (ii) the payment to the Corporation, pursuant to the terms of this Agreement, of an amount equal to the Exercise Price multiplied by the number of Shares being purchased as specified in Optionee’s notice of exercise (the “Purchase Price”). Optionee’s notice of exercise shall be given in the manner specified in Section 13 but any exercise of the Option shall be effective only when the items required by the preceding sentence are actually received by the Corporation. The notice of exercise may be in the form attached to this Agreement. Notwithstanding anything to the contrary in this Agreement, the Option may he exercised only if compliance with all applicable federal and state securities laws can be effected.

      (b) Form of Payment. Payment of the Purchase Price may be made (i) by check payable to the order of the Corporation for an amount in U.S. dollars equal to the Purchase Price of such Shares; (ii) by delivery or attestation of shares of Stock held by the Optionee for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes, as determined by the Committee in its discretion, and having an aggregate Fair Market Value equal to the amount of cash that would otherwise be required to pay the full Purchase Price; (iii) by authorizing a third party to sell a portion of the Shares acquired upon exercise of the Option and remit to the Corporation a sufficient portion of the sales proceeds to pay the full Purchase Price; or (iv) by combining the above methods.

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      To the extent that shares of Stock are used in making full or partial payment of the Purchase Price, each such share will be valued at the Fair Market Value thereof as of the date of exercise. Any overpayment will be promptly refunded, and any underpayment will be deemed an exercise of such lesser whole number of shares as the amount paid is sufficient to purchase.

      (c) Issuance and Delivery of Shares. As soon as practicable following receipt of such notice and payment, the Corporation shall notify the Optionee of any payment or other allocation required under subsection (d) below. The Corporation shall deliver a certificate or certificates for the Shares to the Optionee as soon as practicable after the Optionee has made any payment and/or allocation required under subsection (d) below and executed and delivered any letter agreement as may be required under subsection (a) above. Shares of Stock issued pursuant to the exercise of this option will be issued only in the name of Optionee and may not be transferred into the name of any agent of or nominee for Optionee until such time as Optionee has complied with the terms of this Agreement. Notwithstanding anything to the contrary in this Agreement, the Option may be exercised only if compliance with all applicable federal and state securities laws can be effected, as determined by the Committee in its discretion.

      (d) Withholding Obligation. Issuance of shares upon exercise of the Option shall be subject to the condition that the Optionee shall pay to the Corporation, in addition to the Purchase Price, the amount the Corporation is required by law or regulation of any governmental authority, whether federal, state or local, domestic or foreign, to withhold in connection with such exercise of the Option, if any, as determined by the Committee in its discretion. In lieu of the payment specified in this paragraph, the Committee may in its sole discretion permit the Optionee to satisfy the obligation, in whole or in part, by the methods specified in subsection (b) above, or by the Corporation retaining sufficient shares to satisfy its withholding obligations.

      (e) Deferral of Issuance of Shares. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the issue of shares to Optionee, any law, or any regulation or requirement of the Securities and Exchange Commission or other governmental authority having jurisdiction in the premises shall require either the Corporation or Optionee to take any action in connection with the shares then to be issued, the issue of such shares shall be deferred until such action shall have been taken; the Corporation shall be under no obligation to take such action; and the Corporation shall have no liability whatsoever as a result of the non-issuance of such shares, except to refund to Optionee any consideration tendered in respect of the Purchase Price.

      (f) Stop Transfer Instructions. The Corporation may impose stop-transfer instructions with respect to any Shares (or other securities) subject to any restriction set forth in this Agreement until the restriction has been satisfied or terminates.

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6. Reload Rights

      The Option is granted with reload rights which entitle the Optionee to receive a new Option (a “Reload Option”) on the Optionee’s exercise of the Option by delivery or attestation of shares of Common Stock in payment of the Purchase Price on the terms set forth in this Section ^, 6.

      (a) Conditions to the Grant of Reload Options. No Reload Option shall be granted on the exercise of the Option unless:

      (i) a sufficient number of shares remain authorized and not issued or subject to purchase under outstanding Options granted under the Plan;

      (ii) the Optionee is an Employee on the relevant exercise date of the Option;

      (iii) the exercise of the Option is for the purchase of a number of shares of Common Stock at least equal to the lesser of (a) 25% of the total number of shares subject to purchase under the Option or (b) 100% of the shares with respect to which the Option is then exercisable;

      (iv) the Grant Date of the Reload Option would be at least one year before the expiration date of the Option; and

      (v) the per share Fair Market Value of the Common Stock on the relevant exercise date is greater than or equal to the Exercise Price of the Option.

      (b) Number of Shares Subject to Purchase; Grant Date. Each Reload Option shall entitle the Optionee to purchase a number of shares equal to the sum of

      (i) the number of shares used to pay the Purchase Price of the Option pursuant to Section 5(b) on the Exercise Date and;

      (ii) the number of shares delivered or withheld in payment of the tax withholding amount pursuant to Section 5(d).

      (c) Exercise Price. Each Reload Option shall have an Exercise Price equal to the Fair Market Value of one share of Common Stock on the Grant Date of the Reload Option.

      (d) Expiration Date. Each Reload Option shall have the same Expiration Date as the Option.

      (e) No Reload Rights. No Reload Option shall have reload rights.

      (f) Rate of Exercisability. Each Reload Option shall become exercisable in full on the first anniversary of the Grant Date of the Reload Option.

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      (g) Forfeiture on Disposition of Shares Acquired in Exercise of Option. Each Reload Option shall be forfeited if the Optionee disposes of any of the shares issued on exercise of the Option before the date six months after the Exercise Date to any person other than the Corporation in the payment of payroll taxes on exercise of the Option.

      (h) Other Terms and Conditions. Except to the extent in conflict with the terms set forth in this Section 6, all other terms for Options granted under the Plan shall apply to each Reload Option.

7. Forfeiture of Option Gain an