Document:

EXHIBIT 10.4

 

Option:          

 

GRANITE CITY FOOD & BREWERY LTD.

NON-QUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO 2002 EQUITY 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. 2002 Equity Incentive Plan (the “Plan”) adopted by the
Company, which is attached hereto as Exhibit A and incorporated herein by
reference.  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 8 of
the Plan as follows:

 

(a)           Expiration Date.  The
Option shall expire on                          (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 cumulatively as follows:                                                  .

 

(c)           Limitations
on Exercisability.  In the event of
Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Sections 8, 9, and 10 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 Purchase Price.  The
purchase price of the shares as to which the Option may be exercised shall be
paid in full in cash 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
Shares may then be listed.  Assuming such
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 1.3 of the Plan), this Option shall
become fully vested and exercisable unless this Option is assumed by the
surviving corporation or its parent substitutes options with substantially the
same terms for this Option.  The Board
or, where applicable, the Committee shall have the right to cancel 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 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 his Investment Representation Statement in a form
acceptable to the Company.

 

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 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, including
any rule under Part 207 of Title 12 of the Code of Federal Regulations (“Regulation
G”) as promulgated by the Federal Reserve Board.  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.

 

8.             Termination
of Status as an Employee.  In the
event of termination of Optionee’s employment or relationship with the Company,
Optionee may, but only within three months after the date of such termination
(but in no event later than the date of expiration of the term of this Option
as set forth in Section 3 above), exercise this Option to the extent that he was
entitled to exercise it at the date of termination.  To the extent that he was not entitled to
exercise this Option at the date of termination, or if Optionee does not
exercise this Option within the time specified herein, the Option shall
terminate.

 

In the event Optionee
terminates employment voluntarily or is terminated for “cause” (as defined in
Section 8.14 of the Plan), then any unvested option shall terminate
immediately.  If the employment of
Optionee is terminated by the Company or a Related Company for “cause” (as
defined in Section 8.14 of the Plan), then the Committee shall have the right
to cancel any options granted to Optionee under the Plan.

 

9.             Disability
of Optionee.  Notwithstanding the
provisions of Section 8 above, in the event of termination of Optionee’s status
as an employee as a result of his Disability, he may, but only within one year
from the date of termination of employment (but in no event later than the date
of expiration of the term of this Option as set forth in Section 3 above),
exercise his Option to the extent he was entitled to exercise it at the date of
such termination.  To the extent that he

 

2

 

was not entitled to
exercise the Option at the date of termination, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified herein,
the Option shall terminate.

 

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

 

(a)           during
the term of this Option and while an employee of the Company and having been in
continuous employment (as determined by the or the Committee in their sole
discretion) since the date of grant of the Option, the Option may be exercised,
at any time within one (1) year following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 3 above), by Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent Optionee
was entitled to exercise the Option at the date of death; or

 

(b)           within
three months after termination, the Option may be exercised, at any time within
nine (9) months following the date of death (but in no event later than the
date of expiration of the term of this Option as set forth in Section 3 above),
by 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.

 

11.           Non-Transferability
of Option.  Unless approved by the
Committee, this Option may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by him.  The
terms of this Option shall be binding upon the Optionee and his personal
representatives, heirs, successors and assigns.

 

12.           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.

 

3

 

IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed by the officer named below and
Optionee has executed this Agreement, both as of the day and year first above
written.

 

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
  GRANITE CITY FOOD &
  BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

OPTIONEE ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
AGREEMENT, NOR IN THE COMPANY’S 2002 EQUITY INCENTIVE PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN
ANY WAY WITH HIS RIGHT OR THE COMPANY’S RIGHT TO TERMINATE HIS EMPLOYMENT AT
ANY TIME, WITH OR WITHOUT CAUSE.

 

Optionee acknowledges receipt of a copy of the Plan
and certain information related thereto and represents that he 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 the 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.

 

 

	
   

  	
   

  	
   

  
	
  Name

  

 

4EXHIBIT 10.5

 

Option:                   

 

GRANITE CITY FOOD & BREWERY LTD.

INCENTIVE STOCK OPTION AGREEMENT

PURSUANT TO 2002 EQUITY 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. 2002 Equity Incentive Plan (the “Plan”) adopted by the
Company, which is attached hereto as Exhibit A and incorporated herein by
reference.  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
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 8 of
the Plan as follows:

 

(a)           Expiration Date.  The
Option shall expire on                        (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
cumulatively as follows:                                                     .

 

(c)           Limitations
on Exercisability.  In the event of
Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Sections 8, 9, and 10 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 Purchase Price.  The
purchase price of the shares as to which the Option may be exercised shall be
paid in full in cash 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
Shares may then be listed.  Assuming such
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 1.3 of the Plan), this Option shall
become fully vested and exercisable unless this Option is assumed by the
surviving corporation or its parent substitutes options with substantially the
same terms for this Option.  The Board
or, where applicable, the Committee shall have the right to cancel 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 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 his Investment Representation Statement in a form
acceptable to the Company.

 

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 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, including
any rule under Part 207 of Title 12 of the Code of Federal Regulations (“Regulation
G”) as promulgated by the Federal Reserve Board.  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.

 

8.             Termination
of Status as an Employee.  In the
event of termination of Optionee’s employment or relationship with the Company,
Optionee may, but only within three months after the date of such termination
(but in no event later than the date of expiration of the term of this Option
as set forth in Section 3 above), exercise this Option to the extent that he
was entitled to exercise it at the date of termination.  To the extent that he was not entitled to
exercise this Option at the date of termination, or if Optionee does not
exercise this Option within the time specified herein, the Option shall
terminate.

 

In the event Optionee
terminates employment voluntarily or is terminated for “cause” (as defined in
Section 8.14 of the Plan), then any unvested option shall terminate
immediately.  If the employment of
Optionee is terminated by the Company or a Related Company for “cause” (as
defined in Section 8.14 of the Plan), then the Committee shall have the right
to cancel any options granted to Optionee under the Plan.

 

9.             Disability
of Optionee.  Notwithstanding the
provisions of Section 8 above, in the event of termination of Optionee’s status
as an employee as a result of his Disability, he may, but only within one year
from the date of termination of employment (but in no event later than the date
of expiration of the term of this Option as set forth in Section 3 above),
exercise his Option to the extent he was entitled to exercise it at the date of
such termination.  To the extent that he

 

2

 

was not entitled to
exercise the Option at the date of termination, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified herein,
the Option shall terminate.

 

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

 

(a)           during
the term of this Option and while an employee of the Company and having been in
continuous employment (as determined by the or the Committee in their sole
discretion) since the date of grant of the Option, the Option may be exercised,
at any time within one (1) year following the date of death (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 3 above), by Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent Optionee
was entitled to exercise the Option at the date of death; or

 

(b)           within
three months after termination, the Option may be exercised, at any time within
nine (9) months following the date of death (but in no event later than the
date of expiration of the term of this Option as set forth in Section 3 above),
by 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.

 

11.           Non-Transferability
of Option.  Unless approved by the
Committee, this Option may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by him.  The
terms of this Option shall be binding upon the Optionee and his personal
representatives, heirs, successors and assigns.

 

12.           Early
Disposition of Stock.  Optionee
understands that if he disposes of any Shares received under this Option within
two (2) years after the date of this Agreement or within one (1) year after
such Shares were transferred to him, he may be treated for federal income tax
purposes as having received ordinary income at the time of such disposition in
an amount generally measured by the difference between the price paid for the
Shares and the lower of the fair market value of the Shares at the date of the
exercise or the fair market value of the Shares at the date of
disposition.  The amount of such ordinary
income may be measured differently if Optionee is an officer, director or 10%
shareholder of the Company, or if the Shares were subject to a substantial risk
of forfeiture at the time they were transferred to Optionee.  Optionee hereby agrees to notify the
Company in writing within 30 days after the date of any such disposition.  Optionee understands that if he disposes of
such Shares at any time after the expiration of such two-year and one-year
holding periods, any gain on such sale will be taxed as long-term capital gain.

 

13.           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.

 

3

 

IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed by the officer named below and
Optionee has executed this Agreement, both as of the day and year first above
written.

 

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
  GRANITE CITY FOOD &
  BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Steven J.
  Wagenheim

  
	
   

  	
  Chief Executive
  Officer

  

 

OPTIONEE ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
AGREEMENT, NOR IN THE COMPANY’S 2002 EQUITY INCENTIVE PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN
ANY WAY WITH HIS RIGHT OR THE COMPANY’S RIGHT TO TERMINATE HIS EMPLOYMENT AT
ANY TIME, WITH OR WITHOUT CAUSE.

 

Optionee acknowledges receipt of a copy of the Plan
and certain information related thereto and represents that he 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 the 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.

 

	
   

  	
   

  	
   

  
	
  Name

  

 

4

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