<PAGE>
                                                                    EXHIBIT 10.2

                         FAMOUS DAVE'S OF AMERICA, INC.

                         1997 EMPLOYEE STOCK OPTION PLAN
                        (as amended through May 22, 2002)

      1. Purpose. The purpose of the 1997 Employee Stock Option Plan (the
"Plan") of Famous Dave's of America, Inc. (the "Company") is to increase
shareholder value and to advance the interests of the Company by attracting,
retaining and motivating employees of the Company by furnishing opportunities to
purchase or receive shares of Common Stock, $.01 par value, of the Company
("Common Stock") pursuant to the Plan.

      2. Administration. The Plan shall be administered by the stock option
committee (the "Committee') of the Board of Directors of the Company. The
Committee shall consist of not less than two directors of the Company and shall
be appointed from time to time by the Board of Directors of the Company. The
Board of Directors of the Company may from time to time appoint members of the
Committee in substitution for, or in addition to, members previously appointed,
and may fill vacancies, however caused, in the Committee. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it shall deem advisable. A majority of the Committee's
members shall constitute a quorum. All action of the Committee shall be taken by
the majority of its members. Any action may be taken by a written instrument
signed by majority of the members and actions so taken shall be fully effective
as if it had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary, shall keep minutes of its meetings and shall
make such rules and regulations for the conduct of its business as it shall deem
advisable. The Committee shall have complete authority to award Incentives under
the Plan, to interpret the Plan, and to make any other determination which it
believes necessary and advisable for the proper administration of the Plan. The
Committee's decisions and matters relating to the Plan shall be final and
conclusive on the Company and its participants.

      3. Eligible Employees. Employees of the Company (excluding officers and
directors of the Company) shall become eligible to receive Incentives under the
Plan when designated by the Committee. Employees may be designated individually
or by groups or categories (for example, by pay grade) as the Committee deems
appropriate. Participation by others and any performance objectives relating to
others may be approved by groups or categories (for example, by pay grade) and
authority to designate participants who are not officers and to set or modify
such targets may be delegated.

      4. Types of Incentives. Incentives under the Plan may be granted in any
one or a combination of the following forms: (a) incentive stock options and
non-statutory stock options (section 6); (b) stock appreciation rights ("SARs')
(section 7); (c) stock awards (section 8); (d) restricted stock (section 8); and
(e) performance shares (section 9).

      5. Shares Subject to the Plan.
<PAGE>
            5.1. Number of Shares. Subject to adjustment as provided in Section
10.6, the number of shares of Common Stock which may be issued under the Plan
shall not exceed 800,000 shares of Common Stock.

            5.2. Cancellation. To the extent that cash in lieu of shares of
Common Stock is delivered upon the exercise of a SAR pursuant to Section 7.4,
the Company shall be deemed, for purposes of applying the limitation on the
number of shares, to have issued the greater of the number of shares of Common
Stock which it was entitled to issue upon such exercise or on the exercise of
any related option. In the event that a stock option or SAR granted hereunder
expires or is terminated or canceled unexercised as to any shares of Common
Stock, such shares may again be issued under the Plan either pursuant to stock
options, SARs or otherwise. In the event that shares of Common Stock are issued
as restricted stock or pursuant to a stock award and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon issuance thereof,
such forfeited and reacquired shares may again be issued under the Plan, either
as restricted stock, pursuant to stock awards or otherwise. The Committee may
also determine to cancel, and agree to the cancellation of, stock options in
order to make a participant eligible for the grant of a stock option at a lower
price than the option to be canceled.

            5.3. Type of Common Stock. Common Stock issued under the Plan in
connection with stock options, SARs, performance shares, restricted stock or
stock awards, may be authorized and unissued shares.

      6. Stock Options. A stock option is a right to purchase shares of Common
Stock from the Company. Each stock option granted by the Committee under this
Plan shall be subject to the following terms and conditions:

            6.1. Price. The option price per share shall be determined by the
Committee, subject to adjustment under Section 10.6.

            6.2. Number. The number of shares of Common Stock subject to the
option shall be determined by the Committee, subject to adjustment as provided
in Section 10.6. The number of shares of Common Stock subject to a stock option
shall be reduced in the same proportion that the holder thereof exercises a SAR
if any SAR is granted in conjunction with or related to the stock option.

            6.3. Duration and Time for Exercise. Subject to earlier termination
as provided in Section 10.4, the term of each stock option shall be determined
by the Committee but shall not exceed ten years and one day from the date of
grant. Each stock option shall become exercisable at such time or times during
its term as shall be determined by the Committee at the time of grant. No stock
option may be exercised during the first six months of its term. Except as
provided by the preceding sentence, the Committee may accelerate the
exercisability of any stock option. Subject to the foregoing and with the
approval of the Committee, all or any part of the shares of Common Stock with
respect to which the right to purchase has accrued may be purchased by the
Company at the time of such accrual or at any time or times thereafter during
the term of the option.


                                       2
<PAGE>
            6.4. Manner of Exercise. A stock option may be exercised, in whole
or in part, by giving written notice to the Company, specifying the number of
shares of Common Stock to be purchased and accompanied by the full purchase
price for such shares. The option price shall be payable in United States
dollars upon exercise of the option and may be paid by cash; uncertified or
certified check; bank draft; by delivery of shares of Common Stock in payment of
all or any part of the option price, which shares shall be valued for this
purpose at the Fair Market Value on the date such option is exercised; by
instructing the Company to withhold from the shares of Common Stock issuable
upon exercise of the stock option shares of Common Stock in payment of all or
any part of the option price, which shares shall be valued for this purpose at
the Fair Market Value or in such other manner as may be authorized from time to
time by the Committee. Prior to the issuance of shares of Common Stock upon the
exercise of a stock option, a participant shall have no rights as a shareholder.

            6.5. Incentive Stock Options. Notwithstanding anything in the Plan
to the contrary, the following additional provisions shall apply to the grant of
stock options which are intended to qualify as Incentive Stock Options (as such
term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended):

                  (a) The aggregate Fair Market Value (determined as of the time
the option is granted) of the shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any participant
during any calendar year (under all of the Company's plans) shall not exceed
$100,000.

                  (b) Any Incentive Stock Option certificate authorized under
the Plan shall contain such other provisions as the Committee shall deem
advisable, but shall in all events be consistent with and contain all provisions
required in order to qualify the options as Incentive Stock Options.

                  (c) All Incentive Stock Options must be granted within ten
years from the earlier of the date on which this Plan was adopted by Board of
Directors or the date this Plan was approved by the shareholders.

                  (d) Unless sooner exercised, all Incentive Stock Options shall
expire no later than 10 years after the date of grant.

                  (e) The option price for Incentive Stock Options shall be not
less than the Fair Market Value of the Common Stock subject to the option on the
date of grant.

                  (f) No Incentive Stock Options shall be granted to any
participant who, at the time such option is granted, would own (within the
meaning of Section 422 of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the employer corporation or of
its parent or subsidiary corporation.

      7. Stock Appreciation Rights. A SAR is a right to receive, without payment
to the Company, a number of shares of Common Stock, cash or any combination
thereof, the amount of which is determined pursuant to the formula set forth in
Section 7.4. A SAR may be granted (a)


                                       3
<PAGE>
with respect to any stock option granted under this Plan, either concurrently
with the grant of such stock option or at such later time as determined by the
Committee (as to all or any portion of the shares of Common Stock subject to the
stock option), or (b) alone, without reference to any related stock option. Each
SAR granted by the Committee under this Plan shall be subject to the following
terms and conditions:

            7.1. Number. Each SAR granted to any participant shall relate to
such number of shares of Common Stock as shall be determined by the Committee,
subject to adjustment as provided in Section 10.6. In the case of an SAR granted
with respect to a stock option, the number of shares of Common Stock to which
the SAR pertains shall be reduced in the same proportion that the holder of the
option exercises the related stock option.

            7.2. Duration. Subject to earlier termination as provided in Section
10.4, the term of each SAR shall be determined by the Committee but shall not
exceed ten years and one day from the date of grant. Unless otherwise provided
by the Committee, each SAR shall become exercisable at such time or times, to
such extent and upon such conditions as the stock option, if any, to which it
relates is exercisable. No SAR may be exercised during the first twelve months
of its term. Except as provided in the preceding sentence, the Committee may in
its discretion accelerate the exercisability of any SAR.

            7.3. Exercise. A SAR may be exercised, in whole or in part, by
giving written notice to the Company, specifying the number of SARs which the
holder wishes to exercise. Upon receipt of such written notice, the Company
shall, within 90 days thereafter, deliver to the exercising holder certificates
for the shares of Common Stock or cash or both, as determined by the Committee,
to which the holder is entitled pursuant to Section 7.4.

            7.4. Payment. Subject to the right of the Committee to deliver cash
in lieu of shares of Common Stock, the number of shares of Common Stock which
shall be issuable upon the exercise of a SAR shall be determined by dividing:

                  (a) the number of shares of Common Stock as to which the SAR
is exercised multiplied by the amount of the appreciation in such shares (for
this purpose, the "appreciation" shall be the amount by which the Fair Market
Value of the shares of Common Stock subject to the SAR on the exercise date
exceeds (1) in the case of a SAR related to a stock option, the purchase price
of the shares of Common Stock under the stock option or (2) in the case of a SAR
granted alone, without reference to a related stock option, an amount which
shall be determined by the Committee at the time of grant, subject to adjustment
under Section 10.6); by (b) the Fair Market Value of a share of Common Stock on
the exercise date.

            In lieu of issuing shares of Common Stock upon the exercise of a
SAR, the Committee may elect to pay the holder of the SAR cash equal to the Fair
Market Value on the exercise date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock shall be issued upon
the exercise of a SAR; instead, the holder of the SAR shall be entitled to
receive a cash adjustment equal to the same fraction of the Fair Market Value of
a share of Common Stock on the exercise date or to purchase the portion
necessary to make a whole share at its Fair Market Value on the date of
exercise.


                                       4
<PAGE>
      8. Stock Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock, without
other payment therefor, as additional compensation for services to the Company.
A share of restricted stock consists of shares of Common Stock which are sold or
transferred by the Company to a participant at a price determined by the
Committee (which price shall be at least equal to the minimum price required by
applicable law for the issuance of a share of Common Stock) and subject to
restrictions on their sale or other transfer by the participant. The transfer of
Common Stock pursuant to stock awards and the transfer and sale of restricted
stock shall be subject to the following terms and conditions:

            8.1. Number of Shares. The number of shares to be transferred or
sold by the Company to a participant pursuant to a stock award or as restricted
stock shall be determined by the Committee.

            8.2. Sale Price. The Committee shall determine the price, if any, at
which shares of restricted stock shall be sold to a participant, which may vary
from time to time and among participants and which may be below the Fair Market
Value of such shares of Common Stock at the date of sale.

            8.3. Restrictions. All shares of restricted stock transferred or
sold hereunder shall be subject to such restrictions as the Committee may
determine, including, without limitation any or all of the following:

                  (a) a prohibition against the sale, transfer, pledge or other
encumbrance of the shares of restricted stock, such prohibition to lapse at such
time or times as the Committee shall determine (whether in annual or more
frequent installments, at the time of the death, disability or retirement of the
holder of such shares, or otherwise);

                  (b) a requirement that the holder of shares of restricted
stock forfeit, or (in the case of shares sold to a participant) resell back to
the Company at his cost, all or a part of such shares in the event of
termination of his employment during any period in which such shares are subject
to restrictions;

                  (c) such other conditions or restrictions as the Committee may
deem advisable.

            8.4. Escrow. In order to enforce the restrictions imposed by the
Committee pursuant to Section 8.3, the participant receiving restricted stock
shall enter into an agreement with the Company setting forth the conditions of
the grant. Shares of restricted stock shall be registered in the name of the
participant and deposited, together with a stock power endorsed in blank, with
the Company. Each such certificate shall bear a legend in substantially the
following form:

            The transferability of this certificate and the shares of Common
            Stock represented by it are subject to the terms and conditions
            (including conditions of forfeiture) contained in the 1997


                                       5
<PAGE>
            Employee Stock Option Plan of Famous Dave's of America, Inc. (the
            "Company"), and an agreement entered into between the registered
            owner and the Company. A copy of the Plan and the agreement is on
            file in the office of the secretary of the Company.

            8.5. End of Restrictions. Subject to Section 10.5, at the end of any
time period during which the shares of restricted stock are subject to
forfeiture and restrictions on transfer, such shares will be delivered free of
all restrictions to the participant or to the participant's legal
representative, beneficiary or heir.

            8.6. Shareholder. Subject to the terms and conditions of the Plan,
each participant receiving restricted stock shall have all the rights of a
shareholder with respect to shares of stock during any period in which such
shares are subject to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares. Dividends paid in cash or property
other than Common Stock with respect to shares of restricted stock shall be paid
to the participant currently.

      9. Performance Shares. A performance share consists of an award which
shall be paid in shares of Common Stock, as described below. The grant of
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:

            9.1. Performance Objectives. Each performance share will be subject
to performance objectives for the Company or one of its operating units to be
achieved by the end of a specified period. The number of performance shares
granted shall be determined by the Committee and may be subject to such terms
and conditions, as the Committee shall determine. If the performance objectives
are achieved, each participant will be paid in shares of Common Stock or cash.
If such objectives are not met, each grant of performance shares may provide for
lesser payments in accordance with formulas established in the award.

            9.2. Not Shareholder. The grant of performance shares to a
participant shall not create any rights in such participant as a shareholder of
the Company, until the payment of shares of Common Stock with respect to an
award.

            9.3. No Adjustments. No adjustment shall be made in performance
shares granted on account of cash dividends which may be paid or other rights
which may be issued to the holders of Common Stock prior to the end of any
period for which performance objectives were established.

            9.4. Expiration of Performance Share. If any participant's
employment with the Company is terminated for any reason other than normal
retirement, death or disability prior to the achievement of the participant's
stated performance objectives, all the participants rights on the performance
shares shall expire and terminate unless otherwise determined by the Committee.
In the event of termination of employment by reason of death, disability, or
normal


                                       6
<PAGE>
retirement, the Committee, in its own discretion may determine what portions, if
any, of the performance shares should be paid to the participant.

      10. General.

            10.1. Effective Date. The Plan will become effective on June 24,
1997.

            10.2. Duration. The Plan shall remain in effect until all Incentives
granted under the Plan have either been satisfied by the issuance of shares of
Common Stock or the payment of cash or been terminated under the terms of the
Plan and all restrictions imposed on shares of Common Stock in connection with
their issuance under the Plan have lapsed. No Incentives may be granted under
the Plan after the tenth anniversary of the date the Plan is approved by the
shareholders of the Company.

            10.3. Non-transferability of Incentives. No stock option, SAR,
restricted stock or performance award may be transferred, pledged or assigned by
the holder thereof (except, in the event of the holder's death, by will or the
laws of descent and distribution to the limited extent provided in the Plan or
in the Incentive) and the Company shall not be required to recognize any
attempted assignment of such rights by any participant. During a participant's
lifetime, an Incentive may be exercised only by him or by his guardian or legal
representative.

            10.4. Effect of Termination of Employment or Death. In the event
that a participant ceases to be an employee of the Company for any reason,
including death, any Incentives may be exercised or shall expire at such times
as may be determined by the Committee.

            10.5. Additional Condition. Notwithstanding anything in this Plan to
the contrary: (a) the Company may, if it shall determine it necessary or
desirable for any reason, at the time of award of any Incentive or the issuance
of any shares of Common Stock pursuant to any Incentive, require the recipient
of the Incentive, as a condition to the receipt thereof or to the receipt of
shares of Common Stock issued pursuant thereto, to deliver to the Company a
written representation of present intention to acquire the Incentive or the
shares of Common Stock issued pursuant thereto for his own account for
investment and not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of any Incentive or the
shares of Common Stock issuable pursuant thereto is necessary on any securities
exchange or under any federal or state securities or blue sky law, or that the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the award of any Incentive,
the issuance of shares of Common Stock pursuant thereto, or the removal of any
restrictions imposed on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restrictions shall not be
removed, as the case may be, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.

            10.6. Adjustment. In the event of any merger, consolidation or
reorganization of the Company with any other corporation or corporations, there
shall be substituted for each of the shares of Common Stock then subject to the
Plan, including shares subject to restrictions,


                                       7
<PAGE>
options, or achievement of performance share objectives, the number and kind of
shares of stock or other securities to which the holders of the shares of Common
Stock will be entitled pursuant to the transaction. In the event of any
recapitalization, stock dividend, stock split, combination of shares or other
change in the Common Stock, the number of shares of Common Stock then subject to
the Plan, including shares subject to restrictions, options or achievements of
performance shares, shall be adjusted in proportion to the change in outstanding
shares of Common Stock. In the event of any such adjustments, the purchase price
of any option, the performance objectives of any Incentive, and the shares of
Common Stock issuable pursuant to any Incentive shall be adjusted as and to the
extent appropriate, in the discretion of the Committee, to provide participants
with the same relative rights before and after such adjustment.

            10.7. Incentive Plans and Agreements. Except in the case of stock
awards or cash awards, the terms of each Incentive shall be stated in a plan or
agreement approved by the Committee. The Committee may also determine to enter
into agreements with holders of options to reclassify or convert certain
outstanding options, within the terms of the Plan, as Incentive Stock Options or
as non-statutory stock options and in order to eliminate SARs with respect to
all or part of such options and any other previously issued options.

            10.8. Withholding.

                  (a) The Company shall have the right to withhold from any
payments made under the Plan or to collect as a condition of payment, any taxes
required by law to be withheld. At any time when a participant is required to
pay to the Company an amount required to be withheld under applicable income tax
laws in connection with a distribution of Common Stock or upon exercise of an
option or SAR, the participant may satisfy this obligation in whole or in part
by electing (the "Election") to have the Company withhold from the distribution
shares of Common Stock having a value up to the amount required to be withheld.
The value of the shares to be withheld shall be based on the Fair Market Value
of the Common Stock on the date that the amount of tax to be withheld shall be
determined ("Tax Date").

                  (b) Each Election must be made prior to the Tax Date. The
Committee may disapprove of any Election, may suspend or terminate the right to
make Elections, or may provide with respect to any Incentive that the right to
make Elections shall not apply to such Incentive. An Election is irrevocable.

            10.9. No Continued Employment or Right to Corporate Assets. No
participant under the Plan shall have any right, because of his or her
participation, to continue in the employ of the Company for any period of time
or to any right to continue his or her present or any other rate of
compensation. Nothing contained in the Plan shall be construed as giving an
employee, the employee's beneficiaries or any other person any equity or
interests of any kind in the assets of the Company or creating a trust of any
kind or a fiduciary relationship of any kind between the Company and any such
person.

            10.10. Deferral Permitted. Payment of cash or distribution of any
shares of Common Stock to which a participant is entitled under any Incentive
shall be made as provided in the


                                       8
<PAGE>
Incentive. Payment may be deferred at the option of the participant if provided
in the Incentive.

            10.11. Amendment of the Plan. The Board may amend or discontinue the
Plan at any time. However, no such amendment or discontinuance shall, subject to
adjustment under Section 10.6, (a) change or impair, without the consent of the
recipient, an Incentive previously granted, (b) increase the maximum number of
shares of Common Stock which may be issued to all participants under the Plan,
(c) change or expand the types of Incentives that may be granted under the Plan,
(d) change the class of persons eligible to receive Incentives under the Plan,
or (e) materially increase the benefits accruing to participants under the Plan.

            10.12 Immediate Acceleration of Incentives. Notwithstanding any
provision in this Plan or in any Incentive to the contrary, (a) the restriction
on all shares of restricted stock award shall lapse immediately, (b) all
outstanding options and SARs will become exercisable immediately, and (c) all
performance shares shall be deemed to be met and payment made immediately. If
any of the following events occur unless otherwise determined by the Board of
Directors and a majority of the Continuing Directors (as defined below):

                  (1) any person or group of persons becomes the beneficial
owner of 30% or more of any equity security of the Company entitled to vote for
the election of directors;

                  (2) a majority of the members of the Board of Directors of the
Company is replaced within the period of less than two years by directors not
nominated and approved by the Board of Directors; or

                  (3) the shareholders of the Company approve an agreement to
merge or consolidate with or into another corporation or an agreement to sell or
otherwise dispose of all or substantially all of the Company's assets (including
a plan of liquidation).

            For purposes of this Section 10.12, beneficial ownership by a person
or group of persons shall be determined in accordance with Regulation 13D (or
any similar successor regulation) promulgated by the Securities and Exchange
Commission pursuant to the 1934 Act. Beneficial ownership of more than 30% of an
equity security may be established by any reasonable method, but shall be
presumed conclusively as to any person who files a Schedule 13D report with the
Securities and Exchange Commission reporting such ownership. If the restrictions
and forfeitability periods are eliminated by reason of provision (1), the
limitations of this Plan shall not become applicable again should the person
cease to own 30% or more of any equity security of the Company.

            For purposes of this Section 10.12, "Continuing Directors" are
directors (a) who were in office prior to the time of any of provisions (1), (2)
or (3) occurred or any person publicly announced an intention to acquire 20% or
more of any equity security of the Company, (b) directors in office for a period
of more than two years, and (c) directors nominated and approved by the
Continuing Directors.

            10.13. Definition of Fair Market Value. For purposes of this Plan,
the "Fair Market Value" of a share of Common Stock at a specified date shall,
unless otherwise expressly


                                       9
<PAGE>
provided in this Plan, be the amount which the Committee determines in good
faith to be 100% of the fair market value of such a share as of the date in
question; provided, however, that notwithstanding the foregoing, if such shares
are listed on a U.S. securities exchange or are quoted on the NASDAQ National
Market System or NASDAQ Small-Cap Stock Market ("NASDAQ"), then Fair Market
Value shall be determined by reference to the last sale price of a share of
Common Stock on such U.S. securities exchange or NASDAQ on the applicable date.
If such U.S. securities exchange or NASDAQ is closed for trading on such date,
or if the Common Stock does not trade on such date, then the last sale price
used shall be the one on the date the Common Stock last traded on such U.S.
securities exchange or NASDAQ.


                                       10