**Exhibit 10.1**

**GRANITECITY FOOD & BREWERY LTD.**

**2002Equity Incentive Plan**

**As amended effectiveApril 13, 2007**

**ARTICLE 1**

**DEFINED TERMS**

In addition to the otherdefinitions contained herein, the following definitions shall apply:

1.01*Award*.  The term “Award” shall mean any award orbenefit granted in accordance with the terms of the Plan.  Awards under the Plan may be in the form of(i) Stock Options; (ii) Restricted Stock; and/or (iii) Tax Offset Payments.  In addition, any Award may de designated as a“Performance Award” as described in Section 5. The terms and conditions of the Award shall be set forth in an “AwardAgreement.”

1.02*Board*.  The term “Board” shall mean the Board ofDirectors of the Company.

1.03*Change in Control*.  The term “Change in Control” shall mean:

(a)                                  an acquisitionby any individual, entity or group (within the meaning of Section 13(d)(3) or14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)of 50% or more of either:

(i)                                     the thenoutstanding Stock; or

(ii)                                  the combinedvoting power of the Company’s outstanding voting securities immediately afterthe merger or acquisition entitled to vote generally in the election ofdirectors; provided, however, that the following acquisition shall notconstitute a Change of Control:

(i)                                     any acquisitiondirectly from the Company;

(ii)                                  any acquisitionby the Company or a Subsidiary;

(iii)                               any acquisition by thetrustee or other fiduciary of any employee benefit plan or trust sponsored bythe Company or a Subsidiary; or

(iv)                              any acquisition by anycorporation with respect to which, following such acquisition, more than 50% ofthe Stock or combined voting power of Stock and other voting securities of theCompany is beneficially owned by substantially all of the individuals and entitieswho were beneficial owners of Stock and other voting securities of the Companyimmediately prior to the acquisition in substantially similar proportionsimmediately before and after such acquisition; or

(b)                                 individualswho, as of the Effective Date of this Plan, constitute the Board (the “IncumbentBoard”), cease to constitute at least a majority of the Board.  Individuals nominated by the Incumbent Boardand subsequently elected shall be deemed for this purpose to be members of theIncumbent Board; or

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(c)                                  approval by theshareholders of the Company of a reorganization, merger, consolidation,liquidation, dissolution, sale or statutory exchange of Stock which changes thebeneficial ownership of Stock and other voting securities so that after thecorporate change the immediately previous owners of 50% of Stock and othervoting securities do not own 50% of the Company’s Stock and other votingsecurities either legally or beneficially; or

(d)                                 the sale,transfer or other disposition of all substantially all of the Company’s assets;or

(e)                                  a merger of theCompany with another entity after which the pre-merger shareholders of theCompany own less than 50% of the stock of the surviving corporation.

A “Change in Control” shallnot be deemed to occur with respect to a Participant if the acquisition of a50% or greater interest is by a group that includes the Participant, nor shallit be deemed to occur if at least 50% of the Stock and other voting securitiesowned before the occurrence are beneficially owned subsequent to the occurrenceby a group that includes the Participant.

1.04*Code*.  The term “Code” shall mean the InternalRevenue Code of 1986, as amended.  Areference to any provision of the Code shall include reference to any successorprovision of the Code.

1.05*Committee*.  The term “Committee” shall mean a committeedescribed in Section 10.

1.06*Company*.  The term “Company” shall mean Granite CityFood & Brewery Ltd.

1.07*Covered Shares*.  The term “Covered Shares” shall mean thenumber of shares of Stock that an Eligible Individual may purchase pursuant toan Option.

1.08*Director*.  The term “Director” shall mean a member ofthe Company’s Board.

1.09*Eligible Individual*.  The term “Eligible Individual” shall mean (a)any common law employee, prospective employee, or officer of the Company, (b)members of the Company’s Board, (c) consultants and advisors to the Company,and (d) employees of any Related Company or business partner of theCompany.  All Eligible Individuals mustbe natural persons who provide bona fide services to the Company or a RelatedCompany.  In addition, the servicesprovided to the Company or Related Company must not be in connection with anoffer or sale of securities in a capital raising transaction and must notdirectly or indirectly promote or maintain a market for the Company’sStock.  An Award may be granted to anEligible Individual prior to the date the Eligible Individual performs servicesfor the Company or Related Company, provided that such Award shall not becomevested prior to the date the Eligible Individual first performs such services.

1.10*Exchange Act*.  The term “Exchange Act” shall mean theSecurities Act of 1934, as amended.

1.11*Exercise Price*.  The term “Exercise Price” shall mean theexercise price of each Option granted under Section 4 established by theCommittee and determined by any reasonable method established by the Committeeat the time the Option is granted. Options granted pursuant to Section 4 of the Plan shall not have anExercise Price of less than 100% of the Fair Market Value of the Company’sStock on the date the Option is granted (or, if greater, the par value of ashare of Company Stock).  Notwithstandingthe foregoing, any ISO granted to any shareholder owning 10% or more of theCompany’s Stock must be at an option price of at least 110% of the Fair MarketValue of the Stock on the date the Option is granted.

1.12*Fair Market Value*.  The term “Fair Market Value” of a share ofStock on a given date shall mean the closing price of the share of Stock asreported on the Nasdaq Stock Market on such date, if the share of Stock is thenquoted on the Nasdaq Stock Market or, if the market is closed on that date, theclosing price of the share of Stock on the previous trading day.  If the Stock is not listed on the NasdaqStock Market, Fair Market Value shall be determined in good faith by the Boardor Committee.

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1.13*Incentive Stock Option*.  The term “Incentive Stock Option” or “ISO”shall mean an Option that is intended to satisfy the requirements of Section422(b) of the Code.  ISO grants may beawarded only to employees of the Company.

1.14*Non-Employee Director*.  The term “Non-Employee Director” shall mean a“non-employee director” as defined in Rule 16b-3(b)(3)(i) of the Exchange Act.

1.15*Non-Qualified Stock Option*.  The term “Non-Qualified Stock Option” or “NSO”shall mean an Option that is not intended to satisfy the requirementsapplicable to an “incentive stock option” described in Section 422(b) of theCode.  NSO grants may be awarded to anyEligible Individual.

1.16*Option*.  The term “Option” or “Stock Option” shallmean an ISO or NSO granted pursuant to the Plan.  The grant of an Option entitles the EligibleIndividual to purchase shares of Stock at an Exercise Price established by theCommittee.

1.17*Performance Award*.  The term “Performance Award” shall mean anaward or grant of shares based upon the achievement of performance objectives,as contemplated by Section 5.

1.18*Plan*.  The term “Plan” shall mean this 2002 EquityIncentive Plan.

1.19*Related Company*.  The term “Related Company” shall mean anycorporation other than the Company and any partnership, joint venture or otherentity in which the Company owns, directly or indirectly, at least a 20%beneficial ownership interest.  A RelatedCompany includes a subsidiary of the Company and an unbroken chain ofcorporations beginning with the Company if each of the corporations other thanthe last corporation in the unbroken chain owns 50% or more of the voting stockin one of the other corporations in such chain.

1.20*Stock*.  The term “stock” shall mean shares of commonstock, $0.01 par value, of the Company.

1.21*Stock Option Agreement*.  The term “Stock Option Agreement” or “Agreement”shall mean any written agreement evidencing the terms and conditions of an ISOor NSO granted under the Plan.  TheAgreement shall be subject to the terms and conditions of the Plan.

**ARTICLE 2**PURPOSE

The Granite City Food &Brewery Ltd. 2002 Equity Incentive Plan has been established by Granite CityFood & Brewery Ltd. to (i) attract and retain individuals eligible toparticipate in the Plan; (ii) motivate Eligible Individuals, by means ofappropriate incentives, to achieve long-range goals; (3) provide incentivecompensation opportunities that are competitive with those of other similarcompanies; and (iv) further identify Eligible Individuals’ interests with thoseof the Company’s other shareholders through compensation that is based on theCompany’s common stock; and thereby promote the long-term financial interest ofthe Company and any Related Company, including the growth in value of theCompany’s equity and enhancement of long-term shareholder return.

**ARTICLE 3**PARTICIPATION

Subject to the terms andconditions of the Plan, the Committee may determine and designate, from time totime, Eligible Individuals who will be granted one or more Awards under thePlan at the Exercise Price.  In its solediscretion and without shareholder approval, the Committee may grant to anEligible Individual any Award or Awards permitted under the provisions of thePlan.  Awards may be granted asalternatives to or replacement of Awards outstanding under the Plan, or anyother plan or arrangement of the Company or Related Company

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(includinga plan or arrangement of a business or entity, all or a portion of which isacquired by the Company or a Related Company). Only employees are eligible to be granted Incentive Stock Options.

**ARTICLE 4**STOCK OPTIONS

4.01*General*.  The grant of an Option entitles the EligibleIndividual to purchase shares of Stock at an Exercise Price established by theCommittee.  Any Option awarded toEligible Individuals under this Section 4 may be either NSOs or ISOs, asdetermined in the discretion of the Committee. To the extent that any Stock Option does not qualify as an ISO, it shallconstitute an NSO.

4.02*Option Awards*.  Subject to the following provisions, Optionsawarded under the Plan shall be in such form and shall have such terms as theCommittee may determine and specify in a Stock Option Agreement entered intobetween the Eligible Individual and the Company.

(a)                                  *Exerciseof an Option*.  An Optionshall be exercisable in accordance with such terms and conditions and duringsuch periods as may be established by the Committee.  In no event shall any fraction of a share ofStock be issued upon the exercise of an Option. An Option must be exercised for at least 100 shares of Stock, or suchlesser number of shares of Stock if the remaining portion of an Option is forfewer than 100 shares of Stock.

(b)                                 *ExercisePrice*.  The Exercise Price of anOption granted under this Section 4 shall be established by the Committee orshall be determined by a method established by the Committee at the time theOption is granted, except that the Exercise Price shall not be less than 100%of the Fair Market Value of the Company’s Stock on the date of the Option isgranted (or, if greater, par value of a share of stock).  Notwithstanding the foregoing, any ISOgranted to any shareholder owning 10% or more of the Company’s Stock must be atan option price of at least 110% of the Fair Market Value of the Stock subjectto the Option.

(c)                                  *Paymentof Option Exercise Price*.  Thepayment of the Exercise Price of an Option granted under this Section 4 shallbe subject to the following:

(i)                                     Subject to thefollowing provisions of this Subsection 4.2(c), the full Exercise Price forshares of Stock purchased upon the exercise of any Option shall be paid at thetime of such exercise or such other time as approved by the Committee.

(ii)                                  Payment of theExercise Price shall be made in such manner as the Committee may provide in theAward, which may include cash (including cash equivalents), tendering of sharesof Stock acceptable to the Committee and either already owned by the EligibleIndividual or subject to Awards hereunder (so-called “cashless” or “immaculate”exercise methods), and any other manner permitted by law and approved by theCommittee, or any combination of the foregoing. If the Company determines that a Stock Option may be exercised usingshares of Restricted Stock, then unless the Committee provides otherwise, theshares received upon the exercise of a Stock Option which are paid for usingRestricted Stock shall be restricted in accordance with the original terms ofthe Restricted Stock Award.  In the caseof any deferred payment arrangement, interest shall be compounded at leastannually and shall be charged at the minimum rate of interest necessary toavoid the treatment as interest, under any applicable provisions of the Code,of any amounts other than amounts stated to be interest under the deferredpayment arrangement.

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(iii)                               An EligibleIndividual may elect to pay the Exercise Price upon the exercise of an Optionby irrevocably authorizing a third party to sell shares of Stock (or asufficient portion of the shares) acquired upon exercise of the Option andremit to the Company a sufficient portion of the sale proceeds to pay theentire Exercise Price and any tax withholding resulting from such exercise.

(d)                                 *Settlementof Option*.  Shares ofStock delivered pursuant to the exercise of an Option shall be subject to suchconditions, restrictions and contingencies as the Committee, in its discretion,may establish in addition to such conditions, restrictions, and contingenciesset forth in the Agreement.

(e)                                  *ReloadOptions*.  The Committee may grant “reload”options, pursuant to the terms and conditions established by the Committee andany applicable requirements of Rule 16b-3 of the Exchange Act (“Rule 16b-3”) orany other applicable law.  The Eligible Individualwould be granted a new Option when the payment of the Exercise Price of apreviously granted Option is made by the delivery of shares of the Company’sStock owned by the Eligible Individual pursuant to Section 4.2(c)(2) hereofand/or when shares of the Company’s Stock are tendered or forfeited as paymentof the amount to be withheld under applicable income tax laws in connectionwith the exercise of an Option.  The newOption would be an Option to purchase the number of shares not exceeding the sumof (i) the number of shares of the Company’s Stock provided as considerationupon the exercise of the previously granted Option to which such “reload”option relates and (ii) the number of shares of the Company’s Stock tendered orforfeited as payment of the amount to be withheld under applicable income taxlaws in connection with the exercise of the Option to which such “reload”option relates.  “Reload” options may begranted with respect to Options granted under this Plan.  Such “reload” options shall have a per shareexercise price equal to the Fair Market Value as of the date of grant of thenew Option.

(f)                                    *Vesting*.  Eligible Individuals shall vest in allOptions in accordance with the terms and conditions of the Agreement enteredinto by and between the Eligible Individual and the Company.  The total number of shares of Stock subjectto an Option may, but need not, vest and therefore become exercisable inperiodic installments that may, but need not, be equal.

(g)                                 *OptionTerm*.  The term of each Option shallbe fixed by the Committee.  In the eventthat the Plan is terminated pursuant to terms and conditions of Section 11, thePlan shall remain in effect as long as any Awards under it are outstanding;provided, however, that, to the extent required by the Code, no ISO may begranted under the Plan on a date that is more than ten years from the date thePlan is adopted or, if earlier, the date the Plan is approved by shareholdersand, further, no ISO may be exercised after the expiration of ten years fromthe date the Award is granted, or, in the case of options granted to 10% orgreater shareholders of the Company, after the expiration of five years fromthe date the option is granted.

(h)                                 *Terminationof Employment*.  Followingthe termination of Eligible Individual’s employment with the Company or aRelated Company, the Option shall be exercisable to the extent determined bythe Committee and specified in the Award Agreement.  The Committee may provide differentpost-termination exercise provisions with respect to termination of employmentfor different reasons.

(i)                                     *IncentiveStock Options*.  ISO grantsmay only be awarded to employees of the Company, a “parent corporation,” or a “subsidiarycorporation” as those terms are defined in Sections 424(e) and 424(f) of theCode.  In order for an employee to beeligible to receive an ISO grant, the employee must be employed by the Company,parent corporation, or

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subsidiary corporation during the period beginningon the date the Option is granted and ending on the day three months prior tothe date such Option is exercised. Notwithstanding the provisions of Section 4.2, no ISO shall (i) have anExercise Price which is less than 100% of the Fair Market Value of the Stock onthe date of the ISO Award, (ii) be exercisable more than ten (10) years afterthe ISO is awarded, or (3) be awarded more than ten (10) years after theEffective Date of this Plan, or, if earlier, the date the Plan was approved bythe shareholders.  No ISO awarded to anemployee who owns more than 10% of the total combined voting power of allclasses of Stock of the Company, its “parent corporation” or any “subsidiarycorporation” shall (i) have an Exercise Price of less than 110% of the FairMarket Value of the Stock on the date of the ISO Award or (ii) be exercisablemore than five (5) years after the date of the ISO Award.  Notwithstanding Section 8.7, no ISO shall betransferable other than by will and the laws of descent and distribution.  To the extent that the aggregate fair marketvalue (determined at the time of grant) of shares of Stock with respect to ISOsare exercisable for the first time by the employee during any calendar year, incombination with shares first exercisable under all other plans of the Companyand any Related Company, exceeds $100,000, such Options shall be treated asNSOs.

(j)                                     *EarlyExercise*.  The Optionmay, but need not, include a provision whereby the Eligible Individual mayelect at any time prior to his or her termination of employment with theCompany to exercise the Option as to any part or all of the shares of Stocksubject to the Option prior to the full vesting of the Option.  Any unvested shares of Stock so purchased maybe subject to a repurchase option in favor of the Company or to any otherrestrictions the Committee determines to be appropriate.

**ARTICLE 5**PERFORMANCE AWARDS

The Committee shall have theright to designate Awards as “Performance Awards.”  The Committee may designate whether any Awardbeing granted to any Participant is intended to be “performance-basedcompensation” as that term is used in section 162(m) of the Code.  Any such Awards designated as intended to be “performance-basedcompensation” shall be conditioned on the achievement of one or moreperformance measures, to the extent required by Code section 162(m).  The performance measures that may be used bythe Committee for such Awards shall be based on any one or more of thefollowing criteria, in each case applied to the Company on a consolidated basisor to a business unit, as specified by the Committee in an Award Agreement, andwhich the Committee may use as an absolute measure, as a measure of improvementrelative to prior performance, or as a measure of comparable performancerelative to a peer group of companies: sales, operating profits, operating profits before interest expenses andtaxes, net earnings, earnings per share, return on equity, return on assets,return on invested capital, total shareholder return, cash flow, debt to equityratio, market share, stock price, economic value added, and market valueadded.  The terms and conditions of aPerformance Award shall be set forth in an Award Agreement entered into betweenthe Company and the Eligible Individual, as selected by the Committee.  For Awards under this Section 5 intended tobe “performance-based compensation,” the grant of the Awards and theestablishment of the performance measures shall be made during the periodrequired under Code section 162(m).

**ARTICLE 6**RESTRICTED STOCK

Subject to the followingprovisions, the Committee may grant Awards of Restricted Stock to an EligibleIndividual in such form and on such terms and conditions as the Committee maydetermine and specify in a Restricted Stock Award Agreement entered intobetween the Company and the Eligible Individual:

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(a)                                  The RestrictedStock Award shall specify the number of shares of Restricted Stock to beawarded, the price, if any, to be paid by the Eligible Individual and the dateor dates on which, or the conditions upon the satisfaction of which, theRestricted Stock will vest.  The grantand/or the vesting of Restricted Stock may be conditioned upon the completionof a specified period of service with the Company or a Related Company, uponthe attainment of specified performance objectives or upon such other criteriaas the Committee may determine.

(b)                                 Stockcertificates representing the Restricted Stock awarded to an EligibleIndividual shall be registered in the Eligible Individual’s name, but theCommittee may direct that such certificates be held by the Company or itsdesignee on behalf of the Eligible Individual. Except as may be permitted by the Committee, no share of RestrictedStock may be sold, transferred, assigned, pledged or otherwise encumbered by anEligible Individual until such share has vested in accordance with the terms ofthe Restricted Stock Award.  At the timethe Restricted Stock vests, a certificate for such vested shares shall bedelivered to the Eligible Individual (or his or her designated beneficiary inthe event of death), free from the restrictions imposed thereon except that anyrestrictions under federal or state securities laws shall continue to apply.

(c)                                  The Committeemay provide that the Eligible Individual shall have the right to vote orreceive dividends on Restricted Stock. Unless the Committee provides otherwise, Stock received as a dividendon, or in connection with a stock split of, Restricted Stock shall be subjectto the same restrictions as the Restricted Stock.

(d)                                 Except as maybe provided by the Committee, in the event of an Eligible Individual’stermination of employment or relationship with the Company prior to all of hisor her Restricted Stock becoming vested, or in the event any conditions to thevesting of Restricted Stock have not been satisfied prior to any deadline forthe satisfaction of such conditions as set forth in the Restricted Stock Award,the shares of Restricted Stock which have not vested shall be forfeited, andthe Committee may provide that (i) any purchase price paid by the EligibleIndividual be returned to the Eligible Individual or (ii) a cash payment equalto the Restricted Stock’s fair market value on the date of forfeiture, iflower, be paid to the Eligible Individual.

(e)                                  The Committeemay waive, in whole or in part, any or all of the conditions to receipt of, orrestrictions with respect to, any or all of the Eligible Individual’sRestricted Stock.

**ARTICLE 7**TAX OFFSET PAYMENTS

The Committee may providefor a Tax Offset Payment to be made by the Company to an Eligible Individualwith respect to one or more Awards granted under the Plan.  The Tax Offset Payment shall be in an amountspecified by the Committee, which shall not exceed the amount necessary to paythe federal, state, local and other taxes payable with respect to theapplicable Award, assuming that the Eligible Individual is taxed at the maximumtax rate applicable to such income.  TheTax Offset Payment shall be paid solely in cash.  No Eligible Individual shall be granted a TaxOffset Payment in any fiscal year with respect to more than the number ofshares of Stock covered by Awards granted to such Eligible Individual in suchfiscal year.  The terms and conditions ofa Tax Offset Payment Award shall be set forth in an Award Agreement enteredinto between the Company and the Eligible Individual.

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**ARTICLE 8**OPERATION AND ADMINISTRATION

8.01*General*.  The operation and administration of thisPlan, including any Awards granted under this Plan, shall be subject to theprovisions of Section 8.

8.02*Effective Date*.  Subject to the approval of the shareholdersof the Company, the Plan shall be effective as of February 27, 2002 (the “EffectiveDate”) provided, however, that to the extent that Awards are granted under thePlan prior to its approval by the shareholders of the Company, the Awards shallbe subject to the approval of the Plan by the shareholders of the Company.  The Plan shall be unlimited in duration and,in the event of Plan termination, shall remain in effect as long as any Awardsunder it are outstanding; provided, however, that, to the extent required bythe Code, no ISO may be granted under the Plan on a date that is more than tenyears from the date the Plan is adopted or, if earlier, the date the Plan isapproved by shareholders and, further, no ISO may be exercised after theexpiration of ten years from the date the Award is granted, or, in the case ofoptions granted to 10% or greater shareholders of the Company, after theexpiration of five years from the date the option is granted.

8.03*Shares Subject to Plan*.  The shares of Stock for which Awards may begranted under this Plan shall be subject to the following:

(a)                                  The shares ofStock with respect to which Awards may be made under the Plan shall be sharescurrently authorized but unissued or currently held or subsequently acquired bythe Company, including shares purchased in the open market or in privatetransactions.

(b)                                 Subject to thefollowing provisions of this Section 8.3, the maximum aggregate number ofshares of Stock that may be issued and sold under the Plan shall be 600,000shares.  The number of shares of Stock soreserved for issuance shall be subject to adjustment pursuant to Sections 8.3(b) and 8.3(d).  The shares of Stock maybe authorized, but unissued, or reacquired Stock.

(c)                                  On January 1stof each year, commencing with year 2003, the aggregate number of shares ofStock that may be awarded under the Plan shall automatically increase by thegreater of (a) 80,000 shares of Stock or (b) 2.0% of the outstanding shares ofStock on such date.

(d)                                 To the extentan Award terminates without having been exercised, or shares awarded areforfeited, such shares shall again be available issue under the Plan.  Shares of Stock surrendered in payment of theExercise Price and shares of Stock which are withheld in order to satisfyfederal, state or local tax liability, shall not count against the maximumaggregate number of shares authorized to be issued pursuant to this Plan, andshall again be available for issuance pursuant to the terms of the Plan.

(e)                                  If the exerciseprice of any stock option granted under the Plan is satisfied by tenderingshares of Stock to the Company (by either actual delivery or by attestation),only the number of shares of Stock issued net of the shares of Stock tenderedshall be deemed delivered for purposes of determining the maximum number ofshares of Stock available for delivery under the Plan.

(f)                                    Options grantedhereunder shall be treated as ISOs under Code Section 422 only to the extentthat the aggregate fair market value (determined at the time of grant) ofShares exercisable for the first time by the Participant during any calendaryear, in combination with shares first exercisable under all other plans of theCompany and its Subsidiaries or affiliates, does not exceed $100,000, with anyoptions or portions of options in excess of such limit (according to the orderin which they were granted) being treated as NQOs.

(g)                                 For Awards thatare intended to be “performance-based compensation” (as that term is used forpurposes of Code section 162(m)), no more than 150,000 shares of Stock may be

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subject to such Awardsgranted to any one individual during any one-calendar-year period.

(h)                                 In the event ofany merger, reorganization, consolidation, sale of substantially all assets,recapitalization, stock dividend, stock split, combination or reverse stocksplit, spin-off, split-up, split-off, distribution of assets or other change incorporate structure affecting the Stock, the Committee or Board of Directorsshall adjust Awards to preserve the benefits or potential benefits of theAwards and to prevent dilution and maintain the proportion and cost of theStock subject to the Awards.  However, nosuch adjustment shall exceed the aggregate value of any outstanding Award priorto such substitution or adjustment. Action by the Committee or Board of Directors may include:  (i) adjustment of the number and kind ofshares which may be delivered under the Plan; (ii) adjustment of the number andkind of shares subject to outstanding Awards; (iii) adjustment of the ExercisePrice of outstanding Awards; and (iv) any other adjustments that the Committeeor Board of Directors determines to be equitable.

8.04*Securities Laws Restrictions*.  Issuance of shares of Stock or other amountsunder the Plan shall be subject to the following:

(a)                                  If at any timethe Committee determines that the issuance of Stock under the Plan is or may beunlawful under the laws of any applicable jurisdiction (including, withoutlimitation, the requirements of the Securities Act of 1933), or the applicablerequirements of any securities exchange or similar entity, the right toexercise any Stock Option or receive any Restricted Stock shall be suspendeduntil the Committee determines that such issuance is lawful.  The Company shall have no obligation toeffect any registration of qualification of the Stock under federal or statelaws.

(b)                                 Any personexercising a Stock Option or receiving Restricted Stock shall make suchrepresentations (including representations to the effect that such person willnot dispose of the Stock so acquired in violation of federal and statesecurities laws) and furnish such information as may, in the opinion of counselfor the Company, be appropriate to permit the Company to issue the Stock incompliance with applicable federal and state securities laws.  The Committee may refuse to permit theexercise of a Stock Option or issuance of Restricted Stock until suchrepresentations and information have been provided.

(c)                                  The Company mayplace an appropriate legend evidencing any transfer restrictions on all sharesof Stock issued under the Plan and may issue stop transfer instructions inrespect thereof.

(d)                                 To the extentthat the Plan provides for issuance of stock certificates to reflect theissuance of shares of Stock, the issuance may be effected on a non-certificatedbasis, to the extent not prohibited by applicable law or the applicable rulesof any stock exchange.

8.05*Tax Withholding*.  All distributions under the Plan are subjectto withholding of all applicable taxes, and the Committee may condition thedelivery of any shares or other benefits under the Plan on satisfaction of theapplicable withholding obligations.  TheCommittee, in its discretion, and subject to such requirements as the Committeemay impose prior to the occurrence of such withholding, may permit suchwithholding obligations to be satisfied through cash payment by theParticipant, through the surrender of shares of Stock which the Participantalready owns, or through the surrender of shares of Stock to which theParticipant is otherwise entitled under the Plan.

8.06*Use of Shares*.  In the discretion of the Committee, aParticipant may be granted any Award permitted under the provisions of thePlan, and more than one Award may be granted to a Participant.  Awards may be granted as alternatives to orreplacement of awards granted or outstanding under the Plan, or any other planor

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arrangementof the Company or a Subsidiary (including a plan or arrangement of a businessor entity, all or a portion of which is acquired by the Company or aSubsidiary).  Subject to the overalllimitation on the number of shares of Stock that may be delivered under thePlan, the Committee may use available shares of Stock as the form of paymentfor compensation, grants or rights earned or due under any other compensationplans or arrangements of the Company or a Subsidiary, including the plans andarrangements of the Company or a Subsidiary assumed in business combinations.

8.07*Dividends and Dividend Equivalents*.  An Award may provide the Participant with theright to receive dividend payments or dividend equivalent payments with respectto Stock subject to the Award (both before and after the Stock subject to theAward is earned, vested, or acquired), which payments may be either madecurrently or credited to an account for the Participant, and may be settled incash or Stock as determined by the Committee. Any such settlements, and any such crediting of dividends or dividendequivalents or reinvestment in shares of Stock, may be subject to suchconditions, restrictions and contingencies as the Committee shall establish,including the reinvestment of such credited amounts in Stock equivalents.

8.08*Payments*.  Awards may be settled in any of the methodsdescribed in Section 4.2(c).  Any Awardsettlement, including payment deferrals, may be subject to such conditions,restrictions and contingencies as the Committee shall determine.  The Committee may permit or require thedeferral of any Award payment, subject to such rules and procedures as it mayestablish, which may include provisions for the payment or crediting ofinterest, or dividend equivalents, including converting such credits intodeferred Stock equivalents.  Each RelatedCompany shall be liable for payment of cash due under the Plan with respect toany Eligible Individual to the extent that such benefits are attributable tothe services rendered for that Related Company by the Eligible Individual.  Any disputes relating to liability of aRelated Company for cash payments shall be resolved by the Committee.

8.09*Transferability*.  Except as otherwise provided by theCommittee, Awards under the Plan may not be sold, pledged, assigned,hypothecated, transferred, or disposed of in any manner other than bybeneficiary designation, will or by the laws of descent and distribution.  If the Committee makes an Award transferable,the Award Agreement shall set forth such additional terms and conditionsregarding transferability as the Committee deems appropriate.

8.10*Form and Time of Elections*.  Unless otherwise specified herein, eachelection required or permitted to be made by any Eligible Individual or otherperson entitled to benefits under the Plan, and any permitted modification, orrevocation thereof, shall be in writing filed with the Committee at such times,in such form, and subject to such restrictions and limitations, notinconsistent with the terms of the Plan, as the Committee shall require.

8.11*Agreement With Company*.  Any Award under the Plan shall be subject tosuch terms and conditions, not inconsistent with the Plan, as the Committeeshall, in its sole discretion, prescribe. The terms and conditions of any Award shall be reflected in an AwardAgreement.  A copy of the Award Agreementshall be provided to the Eligible Individual, and the Committee may, but neednot require, the Eligible Individual to sign the Award Agreement.

8.12*Action by Company or Subsidiary*.  Any action required or permitted to be takenby the Company or any Subsidiary shall be by resolution of its Board, or byaction of one or more members of the Board (including a committee of the Board)who are duly authorized to act for the Board, or (except to the extentprohibited by applicable law or applicable rules of any stock exchange) by aduly authorized officer of such company.

8.13*Limitation of Implied Rights*.

(a)                                  Neither anEligible Individual nor any other person shall, by reason of participation inthe Plan, acquire any right in or title to any assets, funds or property of theCompany or any Related Company whatsoever, including, without limitation, anyspecific funds, assets, or other property which the Company or any RelatedCompany, in its sole discretion, may

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set aside in anticipation of a liability under thePlan.  An Eligible Individual shall haveonly a contractual right to the Stock or amounts, if any, payable under thePlan, unsecured by any assets of the Company or any Related Company, andnothing contained in the Plan shall constitute a guarantee that the assets ofthe Company or any Related Company shall be sufficient to pay any benefits toany Eligible Individual.

(b)                                 This Plan doesnot constitute a contract of employment, and selection as a Eligible Individualwill not give the Eligible Individual the right to be retained in the employ ofthe Company or any Related Company, nor any right or claim to any future grantsor to any benefit under the Plan, unless such right or claim has specificallyaccrued under the terms of the Plan. Except as otherwise provided in the Plan, no Award under the Plan shallconfer upon an Eligible Individual any rights of a shareholder of the Companyprior to the date on which the Eligible Individual fulfills all conditions forreceipt of such rights.

8.14*Termination for Cause*.  If the employment of an Eligible Individualis terminated by the Company or a Related Company for “cause,” then theCommittee shall have the right to cancel any Options granted to the EligibleIndividual under the Plan.  The term “cause”shall mean (1) the Eligible Individual’s violation of any provision of anynon-competition agreement or confidentiality agreement with the Company; (2) anillegal or negligent action by the Eligible Individual that materially andadversely affects the Company; (3) the Eligible Individual’s failure or refusalto perform his/her duties (except when prevented by reason of illness ordisability); or (4) conviction of the Eligible Individual of a felony involvingmoral turpitude.

8.15*Evidence*.  Evidence required of anyone under the Planmay be by certificate, affidavit, document or other information which theperson acting on it considers pertinent and reliable, and signed, made orpresented by the proper party or parties.

**ARTICLE 9**CHANGE IN CONTROL

Inthe event of a Change in Control, if specifically documented in either aspecial form of Award Agreement at the time of grant or amendment to anexisting Award Agreement, in each case on an individual-by-individual basis:

(a)                                  all or aportion (as determined by the Committee) of outstanding Stock Options awardedto such individual under the Plan shall become fully exercisable and vested;and

(b)                                 therestrictions applicable to all or a portion (as determined by the Committee) ofany outstanding Restricted Stock awards under the Plan held by an EligibleIndividual shall lapse and such shares shall be deemed fully vested.

Notwithstandingthe foregoing, no acceleration of vesting or termination of restrictions onRestricted Stock shall occur if (a) all Awards are assumed by a survivingcorporation or its parent or (b) the surviving corporation or its parentsubstitutes Awards with substantially the same terms for such Awards.  The Committee shall have the right to cancelAwards in the event of a Change in Control, provided that in exchange for suchcancellation, the Eligible Individual shall receive a cash payment equal to theChange in Control consideration less the exercise price of the Awards.

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**ARTICLE 10**COMMITTEE

10.01*Administration*.  The Plan shall be administered by theCompensation Committee of the Board or such other committee of Directors as theBoard shall designate, which shall consist of not less than two Non-EmployeeDirectors.  The members of the Committeeshall be Non-Employee Directors and shall serve at the pleasure of theBoard.  To the extent that the Boarddetermines it to be desirable to qualify Awards granted hereunder as “performance-basedcompensation” within the meaning of Section 162(m) of the Code, the Plan shallbe administered by a Committee of two or more “outside directors” within themeaning of Section 162(m) of the Code. To the extent that the Board determines it to be desirable to qualifyAwards as exempt under Rule 16b-3, the Award transactions contemplatedhereunder shall be structured to satisfy the requirements for exemption underRule 16b-3.  All determinations made bythe Committee pursuant to the provisions of the Plan shall be final and bindingon all persons, including the Company and Eligible Individuals.  The Board may administer the Plan or exerciseany or all of the administration duties of the Committee at any time when aCommittee meeting the requirements of this Section has not been appointed, andthe Board may exempt Awards pursuant to Rule 16b-3(d)(1) of the Exchange Act.

10.02*Powers of Committee*.  The Committee shall have the followingauthority with respect to Awards under the Plan:  to grant Awards; to adopt, alter and repealsuch administrative rules, guidelines and practices governing the Plan as itshall deem advisable; to interpret the terms and provisions of the Plan and anyAward granted under the Plan; and to otherwise supervise the administration ofthe Plan.  In particular, and withoutlimiting its authority and powers, the Committee shall have the authority:

(a)                                  to determinewhether and to what extent any Award or combination of Awards will be grantedhereunder;

(b)                                 to select theEligible Individuals to whom Awards will be granted;

(c)                                  to determinethe number of shares of Stock to be covered by each Award granted hereundersubject to the limitations contained herein;

(d)                                 to determinethe terms and conditions of any Award granted hereunder, including, but notlimited to, any vesting or other restrictions based on such performanceobjectives and such other factors as the Committee may establish, and todetermine whether the performance objectives and other terms and conditions ofthe Award are satisfied;

(e)                                  to determinethe treatment of Awards upon the Eligible Individual’s retirement, disability,death, termination for cause or other termination of employment or service;

(f)                                    to determinethat amounts equal to the amount of any dividends declared with respect to thenumber of shares covered by an Award (i) will be paid to the EligibleIndividual currently or (ii) will be deferred and deemed to be reinvested or(3) will otherwise be credited to the Eligible Individual or that the EligibleIndividual has no rights with respect to such dividends;

(g)                                 to amend theterms of any Award, prospectively or retroactively; provided, however, that noamendment shall impair the rights of the Eligible Individual without his or herwritten consent; and

(h)                                 to substitutenew Stock Options for previously granted Stock Options, or for options grantedunder other plans or agreements, in each case including previously grantedoptions having higher option prices.

Determinationsby the Committee under the Plan relating to the form, amount, and terms andconditions of Awards need not be uniform, and may be made selectively amongEligible Individuals who receive Awards under the Plan, whether or not suchEligible Individuals are similarly situated. The Committee shall have the power to accelerate the time at which anAward may first be exercised or the time during which an Award or any part

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thereofwill vest in accordance with the Plan, notwithstanding any provisions in anAward Agreement stating the time at which the Award may first be exercised orthe time during which the Award will vest.

10.03*Delegation by Committee*.  Except to the extent prohibited by applicablelaw or the applicable rules of a stock exchange, the Committee may allocate allor any portion of its responsibilities and powers to any one or more of itsmembers and may delegate all or any part of its responsibilities and powers toany person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at anytime.

10.04*Information to be Furnished toCommittee*.  The Company andany Related Company shall furnish the Committee with such data and informationas it determines may be required for it to discharge its duties.  The records of the Company and any RelatedCompany as to an Eligible Individual’s employment, termination of employment,leave of absence, reemployment and compensation shall be conclusive on allpersons unless determined to be incorrect. Eligible Individuals and other persons entitled to benefits under thePlan must furnish the Committee such evidence, data or information as theCommittee considers desirable to carry out the terms of the Plan.

10.05*Non-Liability of Board andCommittee*.  No member of theBoard or the Committee, nor any officer or employee of the Company acting onbehalf of the Board or the Committee, shall be personally liable for anyaction, determination or interpretation taken or made with respect to the Plan,and all members of the Board or the Committee and all officers or employees ofthe Company acting on their behalf shall, to the extent permitted by law, befully indemnified and protected by the Company with respect to any such action,determination or interpretation.

**ARTICLE 11**AMENDMENT AND TERMINATION

The Board may, at any time,amend or terminate the Plan, provided that no amendment or termination may, inthe absence of written consent to the change by the affected EligibleIndividual (or, if the Eligible Individual is not then living, the affectedbeneficiary), adversely affect the rights of any Eligible Individual orbeneficiary under any Award granted under the Plan prior to the date suchamendment is adopted by the Board; provided that adjustments made pursuant toSubsection 8.3(d) shall not be subject to the foregoing limitations of thisSection 11.  An amendment shall besubject to approval by the Company’s shareholders only to the extent requiredby applicable laws, regulations or rules.

**ARTICLE 12**GENERAL PROVISIONS

12.01*Award Agreements*.  No Eligible Individual will have rights underan Award granted to such Eligible Individual unless and until an AwardAgreement has been duly executed on behalf of the Company and the EligibleIndividual.

12.02*No Limit on Other Compensation Arrangements*.  Nothing contained in the Plan shall preventthe Company or any Related Company from adopting or continuing in effect otheror additional compensation arrangements, and such arrangements may be eithergenerally applicable or applicable only in specific cases.

12.03*Headings*.  The headings of the sections and subsectionsof this Plan are intended for the convenience of the parties only and shall inno way be held to explain, modify, construe, limit, amplify or aid in the interpretationof the provisions hereof.

12.04*Beneficiaries*.  An Eligible Individual may, from time totime, name any beneficiary or beneficiaries (who may be named contingently orsuccessively) to whom any benefit under the Plan may be paid or transferred incase of death.  Each designation willrevoke all prior designations, shall be in a form prescribed by the

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Committee,and will be effective only when filed by the Eligible Individual in writingwith the Committee during his or her lifetime. In the absence of any such designation, benefits outstanding at theEligible Individual’s death shall be paid or transferred to his or herestate.  There shall be no third partybeneficiaries of or to this Plan.  Anybeneficiary of the Eligible Individual shall have only a claim to such benefitsas may be determined to be payable hereunder, if any, and shall not, under anycircumstances other than the right to claim such benefits, be deemed a thirdparty beneficiary of or to this Plan.

12.05*Repurchase Option*.  The terms of any repurchase option shall bespecified in the Award Agreement.

12.06*Governing Law*.  The Plan, and all agreements hereunder, shallbe construed in accordance with and governed by the laws of the State ofMinnesota, except to the extent preempted by federal law, without regard to theprinciples of comity or the conflicts of law provisions of any jurisdiction.

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