EXHIBIT 10.3

 

OPTION NO:          

 

GRANITE CITY FOOD & BREWERY LTD.

STOCK OPTION AGREEMENT

PURSUANT TO 1997 DIRECTOR STOCK OPTION PLAN

 

Granite City Food & Brewery Ltd., a Minnesota corporation (the “Company”),
hereby grants to                                 (the “Optionee”), an option to
purchase the number of shares of the Company’s Common Stock, $.01 par value per
share (the “Stock”), set forth herein. The Stock shall be issued at the price
determined as provided herein, and shall be in all respects subject to the
terms, definitions and provisions of the Granite City Food & Brewery Ltd. 1997
Director Stock Option Plan (the “Plan”) adopted by the Company, which is
incorporated herein by reference.  Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings herein.

 

W I T N E S S E T H :

 

1.                                       Grant of Option.  Pursuant to the
provisions of the Plan and subject to the additional conditions set forth
herein, the Optionee has been automatically granted on the date hereof the right
and option to purchase from the Company all or a part of an aggregate of 15,000
shares of Stock, subject to adjustment as provided in Section 4(d) of the Plan,
at the purchase price of $             per share (the “Option”).  The Option
does not constitute an incentive stock option within the meaning of Section 422
of the Code.

 

2.                                       Terms and Conditions.  It is understood
and agreed that the Option evidenced hereby is subject to the following terms
and conditions and to the terms and conditions of the Plan:

 

(a)                                  Expiration Date.  The Option shall expire
five (5) years after the date hereof.

 

(b)                                 Exercise of Option.  The Option shall become
exercisable in full on the first anniversary of the grant of the Option,
provided that the Optionee shall have maintained Continuous Service as a
Director throughout such 12-month period.  The Option shall be exercisable only
while the Optionee serves as an outside director of the Company, and for a
period twelve (12) months after ceasing to be an outside director pursuant to
Section 10 of the Plan.  Any exercise shall be accompanied by a written notice
to the Company specifying the number of shares as to which the Option is being
exercised.  Notation of any partial exercise shall be made by the Company on
Schedule I attached hereto.

 

(c)                                  Payment of Purchase Price Upon Exercise. 
At the time of any exercise, the purchase price of the shares as to which the
Option is exercised shall be paid in cash to the Company, unless, in accordance
with the provisions of Section 9(b) of the Plan, the Board shall permit payment
of the purchase price in another manner.

 

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(d)                                 Exercise Upon Death or Termination of Status
as a Director.

 

(i)                                     Termination of Status as a Director.  If
the Optionee ceases to serve as a director, 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.

 

(ii)                                  Death of Optionee.  In the event of the
death of the Optionee occurring:

 

(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 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)                                within thirty (30) days after the termination
of Continuous Service as a director, the Option may be exercised, at any time
within six (6) 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 had accrued at
the date of termination of Continuous Service as a director.

 

(e)                                  Non-Transferability of Options.  The 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.

 

(f)                                    Adjustments Upon Changes in
Capitalization.  The number of shares of Common Stock covered by the Option and
the per share exercise price of the Option shall be proportionately adjusted for
any increase or decrease in the number of issued and outstanding shares of
Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive. 
Except as expressly provided herein or in the Plan, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, or options or rights to purchase shares of Common Stock of any
class shall affect, and no adjustment by reason

 

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thereof shall be made with respect to, the number or price of shares of Common
Stock subject to the Option.

 

(g)                                 No Rights as Shareholder.  The Optionee
shall have no rights as a shareholder with respect to any shares of Common Stock
subject to this Option prior to the date of issuance to him of a certificate or
certificates for such shares.

 

(h)                                 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.

 

(i)                                     Compliance with Law and Regulations. 
This Option and the obligation of the Company to sell and deliver shares of its
Common Stock hereunder shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required.  The Company shall not be required to
issue or deliver any certificates for shares of Common Stock prior to
(i) compliance with the regulations of the NASD or any stock exchange on which
the Common Stock may then be listed and (ii) the completion of any registration
or qualification of such shares under any federal or state law, or any rule or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.  Moreover, this Option may
not be exercised if its exercise or the receipt of shares of Common Stock
pursuant hereto would be contrary to applicable law.

 

3.                                       Investment Representation.  As a
condition to the exercise of the Option, the Company may require the person
exercising the Option to represent and warrant at the time of exercise that the
shares of Common Stock are being purchased only for investment and without any
present intention to sell or distribute such shares, if, in the opinion of
counsel for the Company, such a representation is required by any relevant
provisions of law.  The shares of Common Stock issued pursuant to the Option may
be issued with appropriate legends on the stock certificates representing the
shares, and the Company may place stop transfer orders with respect to such
shares.

 

4.                                       Optionee Bound by Plan.  The Optionee
hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions thereof.

 

5.                                       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 at the address set
forth below; subject to the right of either party to designate at any time
hereunder in writing some other address.

 

6.                                       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 its
Chief Executive Officer and the Optionee has executed this Agreement, both as of
the day and year set forth below.

 

DATE OF GRANT:                               ,        

 

 

GRANITE CITY FOOD & BREWERY LTD.

 

 

 

 

 

By:

 

 

 

 

Steven J. Wagenheim

 

 

Chief Executive Officer

 

 

Optionee (signature):

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I-1

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