Exhibit 10.3

 

Option:                           

 

NON-QUALIFIED DIRECTOR STOCK OPTION AGREEMENT

PURSUANT TO GRANITE CITY FOOD & BREWERY LTD.

LONG-TERM INCENTIVE PLAN

 

Granite City Food & Brewery Ltd., a Minnesota corporation (the “Company”),
hereby grants to                                (the “Optionee”), an option (the
“Option”) to purchase an aggregate of            shares of Stock (the “Shares”),
at the price set forth below, and in all respects subject to the terms,
definitions and provisions of the Granite City Food & Brewery Ltd. Long-Term
Incentive Plan (the “Plan”) adopted by the Company, which is attached hereto and
incorporated herein by reference [LTIP to be attached].  Unless otherwise
defined herein, the terms used herein shall have the meanings assigned to them
in the Plan.

 

1.                                      Nature of the Option.  This Option is
not intended to qualify as an Incentive Stock Option as defined in Section 422
of the Code.

 

2.                                      Exercise Price.  The exercise price for
each share of Stock is $        .

 

3.                                      Exercise of Option.  This Option shall
be exercisable during its term in accordance with the provisions of Section 6 of
the Plan and as follows:

 

(a)                                 Expiration Date.  The Option shall expire on
the tenth anniversary of the Date of Grant (the “Expiration Date”).  In no event
may this Option be exercised after the Expiration Date.

 

(b)                                 Exercisability.  Subject to the remaining
terms of this Agreement and the Plan, the Option shall be exercisable and deemed
vested in full on the first anniversary of Date of Grant.

 

(c)                                  Limitations on Exercisability.  The Option
shall be exercisable only while the Optionee serves as an outside director of
the Company or, in the event of Optionee’s death or termination of service as a
director, the exercisability of the Option is governed by Sections 8 and 9
below, subject to the limitations contained in subsections 3(d), (e) and (f).

 

(d)                                 Written Notice of Exercise.  Any exercise
shall be accompanied by a written notice to the Company specifying the number of
shares of Stock as to which the Option is being exercised.  Notation of any
partial exercise shall be made by the Company on Schedule I hereto.

 

(e)                                  Payment of Exercise Price.  The exercise
price of the shares of Stock as to which the Option is being exercised shall be
paid in full at the time of exercise.

 

(f)                                   Compliance with Laws and Regulations.  No
Shares will be issued pursuant to the exercise of an Option unless such issuance
and such exercise shall comply with all relevant provisions of law and the
requirements of any stock exchange or automated quotation system upon which the
Stock may then be listed.  Assuming such

 

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compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.

 

4.                                      Change in Control.  Upon the occurrence
of a “Change in Control” (as defined in Section 2(h) of the Plan), this Option
shall become fully vested and exercisable unless this Option is assumed by the
surviving corporation or its parent, or the surviving corporation or its parent
substitutes options with substantially the same terms as this Option.  If a
Change in Control occurs and either this Option is not assumed by a surviving
corporation or its parent, or the surviving corporation or its parent does not
substitute awards with the same terms as this Option, the Committee, shall also
have the right to cancel some or all of the unexercised portion of this Option
in the event of a Change in Control, provided that in exchange for such
cancellation, the Optionee will receive a cash payment equal to the Change in
Control consideration less the exercise price set forth in Section 2 above.

 

5.                                      Optionee’s Representations.  In the
event the Shares purchasable pursuant to the exercise of this Option have not
been registered under the Securities Act, at the time this Option is exercised,
the Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company an investment representation statement in a form
acceptable to the Company.  As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation. Optionee
acknowledges that the certificate representing the Shares issued pursuant to
this Option may be issued with appropriate legends, and the Company may place
stop transfer orders with respect to such Shares.

 

6.                                      Method of Payment.  Payment of the
exercise price shall be by (i) cash; (ii) check, bank draft or money order;
(iii) if authorized by the Board or the Committee, by delivery of shares of
Stock (valued at the fair market value thereof on the date of exercise); or
(iv) by delivery of a combination of cash and Stock.  The Board or the Committee
may, in order to prevent any possible violation of law, require the payment
price to be paid in cash.

 

7.                                      Restrictions on Exercise.  This Option
may not be exercised if the issuance of such Shares upon such exercise or the
method of payment of consideration for such Shares would constitute a violation
of any applicable federal or state securities or other law or regulation.

 

8.                                      Termination of Status as a Director.  If
the Optionee ceases to serve as a director for reasons other than due to death,
the Optionee may, but only within twelve (12) months after the date the Optionee
ceases to be an outside director of the Company, exercise his Option to the
extent the Optionee was entitled to exercise it at the date of such
termination.  To the extent that the Optionee was not entitled to exercise the
Option at the date of such termination, or if the Optionee does not exercise
such Option within the time specified herein, the Option shall terminate.

 

9.                                      Death of Optionee.  In the event of the
death of the Optionee:

 

(a)                                 during the term of the Option, and provided
that the Optionee was at the time of death a director of the Company and had
been in continuous service as a director

 

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since the date of grant of the Option, the Option may be exercised, at any time
within twelve (12) months following the date of death, by the Optionee’s estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that would have
accrued had the Optionee continued living and remained in continuous service a
director for twelve (12) months after the date of death; or

 

(b)                                 after the termination of continuous service
as a director, the Option may be exercised by the Optionee’s estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that had accrued at the date of
termination of continuous service as a director and only during the period the
Option was exercisable by Optionee had death not occurred.

 

10.                               Non-Transferability of Option.  This Option
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in
any manner other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order and may be exercised, during
the lifetime of the Optionee, only by the Optionee.  The terms of this Option
shall be binding upon Optionee and his or her personal representative, heirs,
successors and assigns.

 

11.                               No Rights as Shareholder.  Optionee shall have
no rights as a shareholder with respect to any Shares subject to this Option
prior to the date the Optionee becomes the registered owner of such Shares.

 

12.                               No Right to Continued Status as a Director. 
The Option shall not confer upon the Optionee any right with respect to
continued status as a director of the Company, nor shall it interfere in any way
with the right of the Company or its shareholders to terminate his status as a
director of the Company at any time.

 

13.                               Notices.  Any notice hereunder to the Company
shall be addressed to it at its principal executive offices; and any notice
hereunder to the Optionee shall be addressed to him or her at the address set
forth below; subject to the right of either party to designate at any time
hereunder in writing some other address.

 

14.                               Plan Interpretation.  Optionee hereby agrees
to accept as binding, conclusive and final all decisions and interpretations of
the Board and, where applicable, the Committee, upon questions arising under the
Plan.  In the event of any question or inconsistency between this Agreement and
the Plan, the terms and conditions of the Plan shall govern.

 

15.                               Counterparts.  This Agreement may be executed
in two counterparts each of which shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by the
Chief Executive Officer and the Optionee has executed this Agreement, both
effective as of the day and year set forth below.

 

Date of Grant:                                    

 

 

 

 

GRANITE CITY FOOD & BREWERY LTD.

 

 

 

 

 

By:

 

 

 

Robert J. Doran

 

 

Chief Executive Officer

 

Optionee acknowledges receipt of a copy of the Plan and certain information
related thereto and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all of the terms
and provisions thereof.  Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of this Option. 
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board and, where applicable, the Committee, upon any
questions arising under the Plan.  Optionee further agrees to notify the Company
upon any change in the residence address indicated below.

 

Optionee (signature)

 

 

 

 

 

[Optionee]

 

 

 

Name and address of Optionee:

 

                                                 

                                                 

 

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SCHEDULE I — NOTATIONS AS TO PARTIAL EXERCISE

 

Date of Exercise

 

Number of
Purchased Shares

 

Balance of
Shares on Option

 

Authorized
Signature

 

Notation Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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