Document:

Exhibit 10.1

GRANITE
CITY FOOD & BREWERY LTD.

2002
Equity Incentive Plan

As amended effective
April 13, 2007

ARTICLE 1

DEFINED TERMS

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

1.01Award.  The term “Award” shall mean any award or
benefit 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 “Award
Agreement.”

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

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

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

(i)                                     the then
outstanding Stock; or

(ii)                                  the combined
voting power of the Company’s outstanding voting securities immediately after
the merger or acquisition entitled to vote generally in the election of
directors; provided, however, that the following acquisition shall not
constitute a Change of Control:

(i)                                     any acquisition
directly from the Company;

(ii)                                  any acquisition
by the Company or a Subsidiary;

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

(iv)                              any acquisition by any
corporation with respect to which, following such acquisition, more than 50% of
the Stock or combined voting power of Stock and other voting securities of the
Company is beneficially owned by substantially all of the individuals and entities
who were beneficial owners of Stock and other voting securities of the Company
immediately prior to the acquisition in substantially similar proportions
immediately before and after such acquisition; or

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

(c)                                  approval by the
shareholders of the Company of a reorganization, merger, consolidation,
liquidation, dissolution, sale or statutory exchange of Stock which changes the
beneficial ownership of Stock and other voting securities so that after the
corporate change the immediately previous owners of 50% of Stock and other
voting securities do not own 50% of the Company’s Stock and other voting
securities 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 the
Company with another entity after which the pre-merger shareholders of the
Company own less than 50% of the stock of the surviving corporation.

A “Change in Control” shall
not be deemed to occur with respect to a Participant if the acquisition of a
50% or greater interest is by a group that includes the Participant, nor shall
it be deemed to occur if at least 50% of the Stock and other voting securities
owned before the occurrence are beneficially owned subsequent to the occurrence
by a group that includes the Participant.

1.04Code.  The term “Code” shall mean the Internal
Revenue Code of 1986, as amended.  A
reference to any provision of the Code shall include reference to any successor
provision of the Code.

1.05Committee.  The term “Committee” shall mean a committee
described in Section 10.

1.06Company.  The term “Company” shall mean Granite City
Food & Brewery Ltd.

1.07Covered Shares.  The term “Covered Shares” shall mean the
number of shares of Stock that an Eligible Individual may purchase pursuant to
an Option.

1.08Director.  The term “Director” shall mean a member of
the Company’s Board.

1.09Eligible 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 the
Company.  All Eligible Individuals must
be natural persons who provide bona fide services to the Company or a Related
Company.  In addition, the services
provided to the Company or Related Company must not be in connection with an
offer or sale of securities in a capital raising transaction and must not
directly or indirectly promote or maintain a market for the Company’s
Stock.  An Award may be granted to an
Eligible Individual prior to the date the Eligible Individual performs services
for the Company or Related Company, provided that such Award shall not become
vested prior to the date the Eligible Individual first performs such services.

1.10Exchange Act.  The term “Exchange Act” shall mean the
Securities Act of 1934, as amended.

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

1.12Fair Market Value.  The term “Fair Market Value” of a share of
Stock on a given date shall mean the closing price of the share of Stock as
reported on the Nasdaq Stock Market on such date, if the share of Stock is then
quoted on the Nasdaq Stock Market or, if the market is closed on that date, the
closing price of the share of Stock on the previous trading day.  If the Stock is not listed on the Nasdaq
Stock Market, Fair Market Value shall be determined in good faith by the Board
or Committee.

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

1.14Non-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.

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

1.16Option.  The term “Option” or “Stock Option” shall
mean an ISO or NSO granted pursuant to the Plan.  The grant of an Option entitles the Eligible
Individual to purchase shares of Stock at an Exercise Price established by the
Committee.

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

1.18Plan.  The term “Plan” shall mean this 2002 Equity
Incentive Plan.

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

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

1.21Stock Option Agreement.  The term “Stock Option Agreement” or “Agreement”
shall mean any written agreement evidencing the terms and conditions of an ISO
or NSO granted under the Plan.  The
Agreement 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 City
Food & Brewery Ltd. to (i) attract and retain individuals eligible to
participate in the Plan; (ii) motivate Eligible Individuals, by means of
appropriate incentives, to achieve long-range goals; (3) provide incentive
compensation opportunities that are competitive with those of other similar
companies; and (iv) further identify Eligible Individuals’ interests with those
of the Company’s other shareholders through compensation that is based on the
Company’s common stock; and thereby promote the long-term financial interest of
the Company and any Related Company, including the growth in value of the
Company’s equity and enhancement of long-term shareholder return.

ARTICLE 3

PARTICIPATION

Subject to the terms and
conditions of the Plan, the Committee may determine and designate, from time to
time, Eligible Individuals who will be granted one or more Awards under the
Plan at the Exercise Price.  In its sole
discretion and without shareholder approval, the Committee may grant to an
Eligible Individual any Award or Awards permitted under the provisions of the
Plan.  Awards may be granted as
alternatives to or replacement of Awards outstanding under the Plan, or any
other plan or arrangement of the Company or Related Company

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

ARTICLE 4

STOCK OPTIONS

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

4.02Option Awards.  Subject to the following provisions, Options
awarded under the Plan shall be in such form and shall have such terms as the
Committee may determine and specify in a Stock Option Agreement entered into
between the Eligible Individual and the Company.

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

(b)                                 Exercise
Price.  The Exercise Price of an
Option granted under this Section 4 shall be established by the Committee or
shall be determined by a method established by the Committee at the time the
Option 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 is
granted (or, if greater, par value of a share of stock).  Notwithstanding the foregoing, any ISO
granted to any shareholder owning 10% or more of the Company’s Stock must be at
an option price of at least 110% of the Fair Market Value of the Stock subject
to the Option.

(c)                                  Payment
of Option Exercise Price.  The
payment of the Exercise Price of an Option granted under this Section 4 shall
be subject to the following:

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

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

(iii)                               An Eligible
Individual may elect to pay the Exercise Price upon the exercise of an Option
by irrevocably authorizing a third party to sell shares of Stock (or a
sufficient portion of the shares) acquired upon exercise of the Option and
remit to the Company a sufficient portion of the sale proceeds to pay the
entire Exercise Price and any tax withholding resulting from such exercise.

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

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

(f)                                    Vesting.  Eligible Individuals shall vest in all
Options in accordance with the terms and conditions of the Agreement entered
into by and between the Eligible Individual and the Company.  The total number of shares of Stock subject
to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal.

(g)                                 Option
Term.  The term of each Option shall
be fixed by the Committee.  In the event
that the Plan is terminated pursuant to terms and conditions of Section 11, the
Plan 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 be
granted under the Plan on a date that is more than ten years from the date the
Plan is adopted or, if earlier, the date the Plan is approved by shareholders
and, further, no ISO may be exercised after the expiration of ten years from
the date the Award is granted, or, in the case of options granted to 10% or
greater shareholders of the Company, after the expiration of five years from
the date the option is granted.

(h)                                 Termination
of Employment.  Following
the termination of Eligible Individual’s employment with the Company or a
Related Company, the Option shall be exercisable to the extent determined by
the Committee and specified in the Award Agreement.  The Committee may provide different
post-termination exercise provisions with respect to termination of employment
for different reasons.

(i)                                     Incentive
Stock Options.  ISO grants
may only be awarded to employees of the Company, a “parent corporation,” or a “subsidiary
corporation” as those terms are defined in Sections 424(e) and 424(f) of the
Code.  In order for an employee to be
eligible to receive an ISO grant, the employee must be employed by the Company,
parent corporation, or

subsidiary corporation during the period beginning
on the date the Option is granted and ending on the day three months prior to
the date such Option is exercised. 
Notwithstanding the provisions of Section 4.2, no ISO shall (i) have an
Exercise Price which is less than 100% of the Fair Market Value of the Stock on
the date of the ISO Award, (ii) be exercisable more than ten (10) years after
the ISO is awarded, or (3) be awarded more than ten (10) years after the
Effective Date of this Plan, or, if earlier, the date the Plan was approved by
the shareholders.  No ISO awarded to an
employee who owns more than 10% of the total combined voting power of all
classes of Stock of the Company, its “parent corporation” or any “subsidiary
corporation” shall (i) have an Exercise Price of less than 110% of the Fair
Market Value of the Stock on the date of the ISO Award or (ii) be exercisable
more than five (5) years after the date of the ISO Award.  Notwithstanding Section 8.7, no ISO shall be
transferable other than by will and the laws of descent and distribution.  To the extent that the aggregate fair market
value (determined at the time of grant) of shares of Stock with respect to ISOs
are exercisable for the first time by the employee during any calendar year, in
combination with shares first exercisable under all other plans of the Company
and any Related Company, exceeds $100,000, such Options shall be treated as
NSOs.

(j)                                     Early
Exercise.  The Option
may, but need not, include a provision whereby the Eligible Individual may
elect at any time prior to his or her termination of employment with the
Company to exercise the Option as to any part or all of the shares of Stock
subject to the Option prior to the full vesting of the Option.  Any unvested shares of Stock so purchased may
be subject to a repurchase option in favor of the Company or to any other
restrictions the Committee determines to be appropriate.

ARTICLE 5

PERFORMANCE AWARDS

The Committee shall have the
right to designate Awards as “Performance Awards.”  The Committee may designate whether any Award
being granted to any Participant is intended to be “performance-based
compensation” as that term is used in section 162(m) of the Code.  Any such Awards designated as intended to be “performance-based
compensation” shall be conditioned on the achievement of one or more
performance measures, to the extent required by Code section 162(m).  The performance measures that may be used by
the Committee for such Awards shall be based on any one or more of the
following criteria, in each case applied to the Company on a consolidated basis
or to a business unit, as specified by the Committee in an Award Agreement, and
which the Committee may use as an absolute measure, as a measure of improvement
relative to prior performance, or as a measure of comparable performance
relative to a peer group of companies: 
sales, operating profits, operating profits before interest expenses and
taxes, net earnings, earnings per share, return on equity, return on assets,
return on invested capital, total shareholder return, cash flow, debt to equity
ratio, market share, stock price, economic value added, and market value
added.  The terms and conditions of a
Performance Award shall be set forth in an Award Agreement entered into between
the Company and the Eligible Individual, as selected by the Committee.  For Awards under this Section 5 intended to
be “performance-based compensation,” the grant of the Awards and the
establishment of the performance measures shall be made during the period
required under Code section 162(m).

ARTICLE 6

RESTRICTED STOCK

Subject to the following
provisions, the Committee may grant Awards of Restricted Stock to an Eligible
Individual in such form and on such terms and conditions as the Committee may
determine and specify in a Restricted Stock Award Agreement entered into
between the Company and the Eligible Individual:

(a)                                  The Restricted
Stock Award shall specify the number of shares of Restricted Stock to be
awarded, the price, if any, to be paid by the Eligible Individual and the date
or dates on which, or the conditions upon the satisfaction of which, the
Restricted Stock will vest.  The grant
and/or the vesting of Restricted Stock may be conditioned upon the completion
of a specified period of service with the Company or a Related Company, upon
the attainment of specified performance objectives or upon such other criteria
as the Committee may determine.

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

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

(d)                                 Except as may
be provided by the Committee, in the event of an Eligible Individual’s
termination of employment or relationship with the Company prior to all of his
or her Restricted Stock becoming vested, or in the event any conditions to the
vesting of Restricted Stock have not been satisfied prior to any deadline for
the satisfaction of such conditions as set forth in the Restricted Stock Award,
the shares of Restricted Stock which have not vested shall be forfeited, and
the Committee may provide that (i) any purchase price paid by the Eligible
Individual be returned to the Eligible Individual or (ii) a cash payment equal
to the Restricted Stock’s fair market value on the date of forfeiture, if
lower, be paid to the Eligible Individual.

(e)                                  The Committee
may waive, in whole or in part, any or all of the conditions to receipt of, or
restrictions with respect to, any or all of the Eligible Individual’s
Restricted Stock.

ARTICLE 7

TAX OFFSET PAYMENTS

The Committee may provide
for a Tax Offset Payment to be made by the Company to an Eligible Individual
with respect to one or more Awards granted under the Plan.  The Tax Offset Payment shall be in an amount
specified by the Committee, which shall not exceed the amount necessary to pay
the federal, state, local and other taxes payable with respect to the
applicable Award, assuming that the Eligible Individual is taxed at the maximum
tax rate applicable to such income.  The
Tax Offset Payment shall be paid solely in cash.  No Eligible Individual shall be granted a Tax
Offset Payment in any fiscal year with respect to more than the number of
shares of Stock covered by Awards granted to such Eligible Individual in such
fiscal year.  The terms and conditions of
a Tax Offset Payment Award shall be set forth in an Award Agreement entered
into between the Company and the Eligible Individual.

ARTICLE 8

OPERATION AND ADMINISTRATION

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

8.02Effective Date.  Subject to the approval of the shareholders
of the Company, the Plan shall be effective as of February 27, 2002 (the “Effective
Date”) provided, however, that to the extent that Awards are granted under the
Plan prior to its approval by the shareholders of the Company, the Awards shall
be 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 Awards
under it are outstanding; provided, however, that, to the extent required by
the Code, no ISO may be granted under the Plan on a date that is more than ten
years from the date the Plan is adopted or, if earlier, the date the Plan is
approved by shareholders and, further, no ISO may be exercised after the
expiration of ten years from the date the Award is granted, or, in the case of
options granted to 10% or greater shareholders of the Company, after the
expiration of five years from the date the option is granted.

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

(a)                                  The shares of
Stock with respect to which Awards may be made under the Plan shall be shares
currently authorized but unissued or currently held or subsequently acquired by
the Company, including shares purchased in the open market or in private
transactions.

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

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

(d)                                 To the extent
an Award terminates without having been exercised, or shares awarded are
forfeited, such shares shall again be available issue under the Plan.  Shares of Stock surrendered in payment of the
Exercise Price and shares of Stock which are withheld in order to satisfy
federal, state or local tax liability, shall not count against the maximum
aggregate number of shares authorized to be issued pursuant to this Plan, and
shall again be available for issuance pursuant to the terms of the Plan.

(e)                                  If the exercise
price of any stock option granted under the Plan is satisfied by tendering
shares 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 tendered
shall be deemed delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.

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

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

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

(h)                                 In the event of
any merger, reorganization, consolidation, sale of substantially all assets,
recapitalization, stock dividend, stock split, combination or reverse stock
split, spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Stock, the Committee or Board of Directors
shall adjust Awards to preserve the benefits or potential benefits of the
Awards and to prevent dilution and maintain the proportion and cost of the
Stock subject to the Awards.  However, no
such adjustment shall exceed the aggregate value of any outstanding Award prior
to such substitution or adjustment. 
Action by the Committee or Board of Directors may include:  (i) adjustment of the number and kind of
shares which may be delivered under the Plan; (ii) adjustment of the number and
kind of shares subject to outstanding Awards; (iii) adjustment of the Exercise
Price of outstanding Awards; and (iv) any other adjustments that the Committee
or Board of Directors determines to be equitable.

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

(a)                                  If at any time
the Committee determines that the issuance of Stock under the Plan is or may be
unlawful under the laws of any applicable jurisdiction (including, without
limitation, the requirements of the Securities Act of 1933), or the applicable
requirements of any securities exchange or similar entity, the right to
exercise any Stock Option or receive any Restricted Stock shall be suspended
until the Committee determines that such issuance is lawful.  The Company shall have no obligation to
effect any registration of qualification of the Stock under federal or state
laws.

(b)                                 Any person
exercising a Stock Option or receiving Restricted Stock shall make such
representations (including representations to the effect that such person will
not dispose of the Stock so acquired in violation of federal and state
securities laws) and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company to issue the Stock in
compliance with applicable federal and state securities laws.  The Committee may refuse to permit the
exercise of a Stock Option or issuance of Restricted Stock until such
representations and information have been provided.

(c)                                  The Company may
place an appropriate legend evidencing any transfer restrictions on all shares
of Stock issued under the Plan and may issue stop transfer instructions in
respect thereof.

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

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

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

arrangement
of the Company or a Subsidiary (including a plan or arrangement of a business
or entity, all or a portion of which is acquired by the Company or a
Subsidiary).  Subject to the overall
limitation on the number of shares of Stock that may be delivered under the
Plan, the Committee may use available shares of Stock as the form of payment
for compensation, grants or rights earned or due under any other compensation
plans or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.

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

8.08Payments.  Awards may be settled in any of the methods
described in Section 4.2(c).  Any Award
settlement, including payment deferrals, may be subject to such conditions,
restrictions and contingencies as the Committee shall determine.  The Committee may permit or require the
deferral of any Award payment, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting of
interest, or dividend equivalents, including converting such credits into
deferred Stock equivalents.  Each Related
Company shall be liable for payment of cash due under the Plan with respect to
any Eligible Individual to the extent that such benefits are attributable to
the services rendered for that Related Company by the Eligible Individual.  Any disputes relating to liability of a
Related Company for cash payments shall be resolved by the Committee.

8.09Transferability.  Except as otherwise provided by the
Committee, Awards under the Plan may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by
beneficiary 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 conditions
regarding transferability as the Committee deems appropriate.

8.10Form and Time of Elections.  Unless otherwise specified herein, each
election required or permitted to be made by any Eligible Individual or other
person entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall require.

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

8.12Action by Company or Subsidiary.  Any action required or permitted to be taken
by the Company or any Subsidiary shall be by resolution of its Board, or by
action 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 extent
prohibited by applicable law or applicable rules of any stock exchange) by a
duly authorized officer of such company.

8.13Limitation of Implied Rights.

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

set aside in anticipation of a liability under the
Plan.  An Eligible Individual shall have
only a contractual right to the Stock or amounts, if any, payable under the
Plan, unsecured by any assets of the Company or any Related Company, and
nothing contained in the Plan shall constitute a guarantee that the assets of
the Company or any Related Company shall be sufficient to pay any benefits to
any Eligible Individual.

(b)                                 This Plan does
not constitute a contract of employment, and selection as a Eligible Individual
will not give the Eligible Individual the right to be retained in the employ of
the Company or any Related Company, nor any right or claim to any future grants
or to any benefit under the Plan, unless such right or claim has specifically
accrued under the terms of the Plan. 
Except as otherwise provided in the Plan, no Award under the Plan shall
confer upon an Eligible Individual any rights of a shareholder of the Company
prior to the date on which the Eligible Individual fulfills all conditions for
receipt of such rights.

8.14Termination for Cause.  If the employment of an Eligible Individual
is terminated by the Company or a Related Company for “cause,” then the
Committee shall have the right to cancel any Options granted to the Eligible
Individual under the Plan.  The term “cause”
shall mean (1) the Eligible Individual’s violation of any provision of any
non-competition agreement or confidentiality agreement with the Company; (2) an
illegal or negligent action by the Eligible Individual that materially and
adversely affects the Company; (3) the Eligible Individual’s failure or refusal
to perform his/her duties (except when prevented by reason of illness or
disability); or (4) conviction of the Eligible Individual of a felony involving
moral turpitude.

8.15Evidence.  Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.

ARTICLE 9

CHANGE IN CONTROL

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

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

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

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

ARTICLE 10

COMMITTEE

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

10.02Powers of Committee.  The Committee shall have the following
authority with respect to Awards under the Plan:  to grant Awards; to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan as it
shall deem advisable; to interpret the terms and provisions of the Plan and any
Award granted under the Plan; and to otherwise supervise the administration of
the Plan.  In particular, and without
limiting its authority and powers, the Committee shall have the authority:

(a)                                  to determine
whether and to what extent any Award or combination of Awards will be granted
hereunder;

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

(c)                                  to determine
the number of shares of Stock to be covered by each Award granted hereunder
subject to the limitations contained herein;

(d)                                 to determine
the terms and conditions of any Award granted hereunder, including, but not
limited to, any vesting or other restrictions based on such performance
objectives and such other factors as the Committee may establish, and to
determine whether the performance objectives and other terms and conditions of
the Award are satisfied;

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

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

(g)                                 to amend the
terms of any Award, prospectively or retroactively; provided, however, that no
amendment shall impair the rights of the Eligible Individual without his or her
written consent; and

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

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

thereof
will vest in accordance with the Plan, notwithstanding any provisions in an
Award Agreement stating the time at which the Award may first be exercised or
the time during which the Award will vest.

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

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

10.05Non-Liability of Board and
Committee.  No member of the
Board or the Committee, nor any officer or employee of the Company acting on
behalf of the Board or the Committee, shall be personally liable for any
action, 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 of
the Company acting on their behalf shall, to the extent permitted by law, be
fully 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, in
the absence of written consent to the change by the affected Eligible
Individual (or, if the Eligible Individual is not then living, the affected
beneficiary), adversely affect the rights of any Eligible Individual or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; provided that adjustments made pursuant to
Subsection 8.3(d) shall not be subject to the foregoing limitations of this
Section 11.  An amendment shall be
subject to approval by the Company’s shareholders only to the extent required
by applicable laws, regulations or rules.

ARTICLE 12

GENERAL PROVISIONS

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

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

12.03Headings.  The headings of the sections and subsections
of this Plan are intended for the convenience of the parties only and shall in
no way be held to explain, modify, construe, limit, amplify or aid in the interpretation
of the provisions hereof.

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

Committee,
and will be effective only when filed by the Eligible Individual in writing
with the Committee during his or her lifetime. 
In the absence of any such designation, benefits outstanding at the
Eligible Individual’s death shall be paid or transferred to his or her
estate.  There shall be no third party
beneficiaries of or to this Plan.  Any
beneficiary of the Eligible Individual shall have only a claim to such benefits
as may be determined to be payable hereunder, if any, and shall not, under any
circumstances other than the right to claim such benefits, be deemed a third
party beneficiary of or to this Plan.

12.05Repurchase Option.  The terms of any repurchase option shall be
specified in the Award Agreement.

12.06Governing Law.  The Plan, and all agreements hereunder, shall
be construed in accordance with and governed by the laws of the State of
Minnesota, except to the extent preempted by federal law, without regard to the
principles of comity or the conflicts of law provisions of any jurisdiction.Exhibit
10.1  

FIRST AMENDMENT TO THE

EXECUTIVE EMPLOYMENT AGREEMENT

Between Steven
C. Cooper  and Labor Ready, Inc.

WHEREAS, Steven C.
Cooper (“Executive”) and Labor Ready, Inc. (“Labor Ready” or “Company”) entered
into an Executive Employment Agreement effective as of May 17, 2006 (“Agreement”);
and

WHEREAS, the
Agreement superseded and replaced prior employment agreements between the
Executive and Company dated January 9, 2001 (“2001 Employment Agreement”) and
March 23, 2005 (“2005 Employment Agreement”); and

WHEREAS, Executive
and Company would like to amend the Agreement, the 2001 Employment Agreement
and the 2005 Employment Agreement to conform them to the requirements of
Section 409A of the Internal Revenue Code, as amended.

NOW, THEREFORE,
effective May 17, 2006 for the Agreement, March 23, 2005 for the 2005
Employment Agreement, and January 1, 2005 for the 2001 Employment Agreement, the
following paragraph is added to the end of such agreements to read as follows:

REQUIRED SIX-MONTH DELAY IN
SEVERANCE PAYMENTS.

Notwithstanding anything in this Agreement to the contrary, if at the
time of the Executive’s termination of employment the Executive is considered a
“specified employee” subject to the required six-month delay in benefit
payments under Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986,
as amended (“Code”), then any separation payments that would otherwise have
been paid within the first six (6) months after the Executive’s termination of
employment shall instead be paid in a single lump sum on (or within 15 days
after) the six-month anniversary of such termination of employment.  Any remaining severance payments shall be
made monthly after such six-month anniversary. 
For purposes of this Agreement, the Executive will be considered to have
terminated employment when the Executive has incurred a “separation from
service” for purposes of Code Section 409A(a)(2)(A)(i).

	
  LABOR READY, INC.

  	
   

  	
  EXECUTIVE

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  By:

  	
  /s/ James E.
  Defebaugh

  	
   

  	
  By:

  	
  /s/ Steven C. Cooper

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
  Name:

  	
  James E.
  Defebaugh

  	
   

  	
  Date Executed:

  	
   December 31,
  2006

  	 

	
   

  	
   

  
	
  Title:

  	
  Executive Vice President and General Counsel

  	
   

  
	
   

  	
   

  	 

	
  Date Executed:

  	
  December 31, 2006

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