Document:

Exhibit
10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT — AMENDMENT NO. 3

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT — AMENDMENT NO. 3 (this “Agreement”)
is made and entered into effective June 17, 2010, by and between Granite
City Food & Brewery Ltd. (the “Company”) and Steven J. Wagenheim (“Executive”).

 

RECITALS

 

A.                                   Executive is
employed by the Company pursuant to an employment agreement made and entered
into June 15, 2005, as amended October 5, 2009 (the “Employment
Agreement”).

 

B.                                     Whereas it is
desirable to amend the Employment Agreement to extend the term of Executive’s
employment and to confirm certain severance arrangements in connection
therewith.

 

NOW, THEREFORE, in consideration of the premises, the
parties hereto agree as follows:

 

1.                                       Defined Terms.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Employment Agreement.

 

2.                                       Term of
Agreement.  Article 3
of the Employment Agreement is hereby amended and restated to read as follows:

 

3.01                           Executive’s
employment pursuant to this Agreement shall continue for a term ending on October 6,
2012 (the “Termination Date”).  The term
of the Executive’s employment shall automatically be extended for successive
one year periods unless the Company or Executive elects not to extend
employment by giving written notice to the other not less than sixty (60) days
prior to the Termination Date or the end of any extension periods.  If Executive’s employment continues beyond
the Termination Date after either party has given notice not to extend for an
additional year, such employment shall continue on an at-will basis under the
remaining terms and conditions of this Agreement, as amended hereby, and as the
same may be amended from time to time with the consent of the Company and
Executive, except that Section 4.02 shall be inapplicable and incentive
compensation payable to Executive, if any, shall be only as fixed by the
Company’s Compensation Committee (“Committee”). 
Executive’s base compensation under this Agreement shall continue at Executive’s
current monthly base compensation rate for each month worked and prorated for
any partial month during which employment continues.

 

3.                                       Severance
Benefit.  For avoidance of doubt, if
Executive’s employment is terminated without Cause or by Executive for Good
Reason, Executive shall be entitled to receive the Severance Payment provided
in Section 7.01(a)-(c) and receive his Base Salary through the
Termination Date.  If the Company elects
to not extend Executive’s employment beyond the Termination Date or any
extension thereof and terminates Executive’s employment, such termination shall
be a termination without Cause for the purposes of Section 7.01 and
Executive shall receive his Base Salary as provided in Section 6.05
through the Termination Date.

 

 

4.                                       Remainder of
Employment Agreement to Continue.  Except as provided herein, the remainder of
the Employment Agreement is not affected by the foregoing amendments and shall
continue in full force and effect.

 

IN WITNESS WHEREAS, the parties have executed
this Agreement effective the date first above written.

 

	
   

  	
  GRANITE
  CITY FOOD & BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James G. Gilbertson

  
	
   

  	
   

  	
  James
  G. Gilbertson, Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven J. Wagenheim

  
	
   

  	
   

  	
  Steven
  J. Wagenheim

  

 

2EXHIBIT 10.2

 

EXECUTIVE EMPLOYMENT AGREEMENT — AMENDMENT NO. 3
(Amended)

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT — AMENDMENT NO. 3 (this “Agreement”)
is made and entered into effective June 17, 2010, by and between Granite
City Food & Brewery Ltd. (the “Company”) and James G. Gilbertson (“Executive”).

 

RECITALS

 

A.                                   Executive is
employed by the Company pursuant to an employment agreement made and entered
into November 29, 2007, as amended October 5, 2009 (the “Employment
Agreement”).

 

B.                                     Whereas it is
desirable to amend the Employment Agreement to extend the term of Executive’s
employment and to confirm certain severance arrangements in connection
therewith.

 

NOW, THEREFORE, in consideration of the premises, the
parties hereto agree as follows:

 

1.             Defined Terms. 
All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Employment Agreement.

 

2.             Term of Agreement.  Article 3 of the Employment Agreement is
hereby amended and restated to read as follows:

 

3.02         Executive’s employment pursuant to this
Agreement shall continue for a term ending on October 6, 2012 (the “Termination
Date”).  The term of the Executive’s
employment shall automatically be extended for successive one year periods
unless the Company or Executive elects not to extend employment by giving
written notice to the other not less than sixty (60) days prior to the
Termination Date or the end of any extension periods.  If Executive’s employment continues beyond
the Termination Date after either party has given notice not to extend for an
additional year, such employment shall continue on an at-will basis under the
remaining terms and conditions of this Agreement, as amended hereby, and as the
same may be amended from time to time with the consent of the Company and
Executive, except that the second paragraph of Section 4.01 shall be
inapplicable and incentive compensation payable to Executive, if any, shall be
only as fixed by the Company’s Compensation Committee (“Committee”).  Executive’s base compensation under this
Agreement shall continue at Executive’s current monthly base compensation rate
for each month worked and prorated for any partial month during which
employment continues.

 

3.             Severance Benefit.  For avoidance of doubt, if Executive’s
employment is terminated without Cause or by Executive for Good Reason,
Executive shall be entitled to receive the Severance Payment provided in Section 7.01(a)-(c) and
receive his Base Salary through the Termination Date.  If the Company elects to not extend Executive’s
employment beyond the Termination Date or any extension thereof and terminates
Executive’s employment, such termination shall be a termination without Cause
for the purposes of Section 7.01 and 

 

 

Executive shall receive his Base Salary as provided
in Section 6.07 through the Termination Date.

 

4.             Remainder of Employment Agreement to Continue.  Except as provided herein, the remainder of
the Employment Agreement is not affected by the foregoing amendments and shall
continue in full force and effect.

 

IN WITNESS WHEREAS, the parties have executed
this Agreement effective the date first above written.

 

	
   

  	
  GRANITE
  CITY FOOD & BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven J. Wagenheim

  
	
   

  	
   

  	
  Steven
  J. Wagenheim, President and

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ James G. Gilbertson

  
	
   

  	
   

  	
  James
  G. Gilbertson

  

 

2EXHIBIT 10.3

 

AMENDED AND RESTATED

EMPLOYMENT AND SEVERANCE AGREEMENT

 

THIS
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective
August 9, 2010, by and between Granite
City Food & Brewery Ltd., a corporation duly organized and
existing under the laws of the State of Minnesota, with a place of business at Suite 101,
5402 Parkdale Drive, Minneapolis, MN 55416 (hereinafter referred to as the “Company”), and Darius H.
Gilanfar, a Texas resident (hereinafter referred to as “Executive”).

 

RECITALS

 

This
Agreement amends and restates in its entirety the Employment and Severance
Agreement by and between the Company and Executive, dated December 2,
2008, including all amendments thereto.

 

1.  EMPLOYMENT, COMPENSATION AND BENEFITS

 

1.01  The Company hereby employs Executive as a
full-time employee on the terms and conditions of this Agreement, and Executive
hereby accepts such employment. 
Executive’s employment pursuant to this Agreement shall continue for a
term ending on October 6, 2012 (the “Termination Date”).  The term of the Executive’s employment shall
automatically be extended for successive one year periods unless the Company or
Executive elects not to extend employment by giving written notice to the other
not less than sixty (60) days prior to the Termination Date or the end of any
extension periods.  If Executive’s
employment continues beyond the Termination Date after either party has given
notice not to extend for an additional year, such employment shall continue on
an at-will basis under the remaining terms and conditions of this Agreement,
and bonus or incentive compensation payable to Executive, if any, shall be only
as fixed by the Company’s Compensation Committee.  Executive’s base compensation under this
Agreement shall continue at Executive’s current monthly base compensation rate
for each month worked and prorated for any partial month during which
employment continues.

 

1.02  Executive shall generally have the authority,
responsibilities, travel obligations, and such other duties as are customarily
performed by a chief operating officer of similar businesses, and shall also
render such additional services and duties as may be reasonably requested of
him from time to time by the Company’s Chief Executive Officer or Board of
Directors.

 

1.03  Executive shall report to the Chief Executive
Officer of the Company and the Board of Directors of the Company or any
committee thereof as the Board shall direct, and shall generally be subject to
direction, orders and advice of said officer and the Board.  The Company retains the discretion to
transfer or reassign Executive to another executive position or to other
executive duties, and any such transfer or reassignment shall not constitute a
breach of this Agreement.

 

1.04  Executive agrees that he will at all times
faithfully, industriously, and to the best of his ability, experience, and
talents, perform all of the duties that may be required of and from 

 

 

him pursuant to the express and implicit terms of
this Agreement, to the reasonable satisfaction of the Company.

 

1.05  During the initial term of employment
hereunder, Executive shall be paid a base salary at Executive’s current annual
rate (“Base Salary”), payable in accordance with the Company’s established pay
periods, reduced by all deductions and withholdings required by law and as
otherwise specified by Executive. 
Executive’s Base Salary shall be reviewed approximately annually and
changes to Base salary may be made upon the approval of the Board of the
company or its Compensation Committee; provided, however, that Executive’s Base
Salary shall not be reduced except in connection with Company compensation
reductions applied to all other senior executives of the Company.  In the event Executive’s employment shall for
any reason terminate during the Term, Executive’s final monthly Base Salary
payment shall be made on a pro-rated basis as of the last day of the month in
which such employment terminated.

 

1.06  During the term of employment, Executive
shall be entitled to participate in employee benefit plans, policies, programs,
perquisites and arrangements, as the same may be provided and amended from time
to time, that are provided generally to similarly situated executive employees
of the Company, to the extent Executive meets the eligibility requirements for
any such plan, policy, program, perquisite or arrangement.

 

1.07  The Company shall reimburse Executive for all
reasonable business expenses incurred by Executive in carrying out Executive’s
duties, services, and responsibilities under this Agreement.  Executive shall comply with generally
applicable policies, practices and procedures of the Company with respect to
reimbursement for, and submission of expense reports, receipts or similar
documentation of, such expenses.

 

1.08  Executive shall be entitled to three weeks of
paid vacation per year, in addition to the Company’s normal holidays.  Vacation time will be scheduled taking into
account the Executive’s duties and obligations at the Company.  Sick leave and all other leaves of absence
will be in accordance with the Company’s stated personnel policies.

 

1.09   Executive agrees that any and all bonuses or
equity compensation awards paid, awarded or vested after September 21,
2009, shall be subject to the Board of Director’s Policy on the Recoupment of
Bonuses and Incentive or Equity Based Compensation Related to Certain Financial
Restatements dated September 21, 2009, and that such policy is hereby
deemed to be incorporated by reference into this Agreement.  Executive further agrees that Company may, to
the extent permitted by applicable law, require the Executive to reimburse the
Company for any and all bonuses or equity compensation awards, severance
payments provided for under Article 3 of this Agreement and base salary payments
provided for under Section 2.04 of this Agreement that are paid, awarded
or vested after September 21, 2009, in the event of a material breach by
Executive of his obligations under Articles 4 or 5 of this Agreement.  In the event Executive fails to make prompt
reimbursement of any such bonuses or equity compensation, severance payments or
base salary payments previously paid, awarded or vested, the Company may, to
the extent permitted by applicable law, deduct the amount required to be
reimbursed from Executive’s compensation otherwise due under this
Agreement.  The obligations contained in
this Section 1.09 shall survive the termination of this Agreement
indefinitely.

 

2

 

2.  TERMINATION OF EMPLOYMENT

 

2.01  The Company may terminate Executive’s
employment by giving Executive written notice if Executive, due to sickness or
injury, is prevented from carrying out his essential job functions for a period
of three (3) months or longer.  In
the event of such termination, Executive shall receive base compensation due
through the date of termination and to a pro-rated bonus due Executive pursuant
to any bonus plan or arrangement established prior to termination, to the
extent earned or performed through the date of termination based upon the
requirements or criteria of such plan or arrangement, as the Board shall in
good faith determine.

 

2.02  Executive’s employment will be deemed
terminated upon the death of the Executive. 
In the event of such termination, Executive shall receive compensation
earned through the date of termination and to a pro-rated bonus due Executive
pursuant to any bonus plan or arrangement established prior to termination, to
the extent earned or performed based upon the requirements or criteria of such
plan or arrangement, as the Board shall in good faith determine.

 

2.03  Any other provision of this Agreement
notwithstanding, the Company may terminate Executive’s employment upon written
notice if the termination is based on any of the following events that
constitute Cause for the purposes of this Agreement:

 

(a)                                  any conviction
or nolo contendere plea by Executive to a felony, gross misdemeanor or
misdemeanor involving moral turpitude, or any public conduct by Executive that
has or can reasonably be expected to have a detrimental effect on the Company
and the image of its management;

 

(b)                                 any act of
material misconduct, willful and gross negligence, willful violation of federal
or state securities laws, or material breach of duty with respect to the
Company, including, but not limited to, embezzlement, fraud, dishonesty,
nonpayment of an obligation owed to the Company, or material breach of a
fiduciary duty to the Company which results in harm or loss to the Company;

 

(c)                                  any material
breach of any material provision of this Agreement or of the Company’s
announced or written rules, codes or polices; provided, however, that such
breach shall not constitute Cause if Executive cures or remedies such breach
within thirty (30) days after written notice to Executive, without material
harm or loss to the Company, unless (i) such breach is part of a pattern
of chronic breaches of the same, which may be evidenced by reports or warning
letters given by the Company to Executive; or (ii) such breach is of a
nature that it is deemed by the Board not to be curable, including situations
where the Board determines that harm or loss to the Company has already
occurred or can reasonably be expected to occur and cannot be eliminated or
remedied by such cure;

 

(d)                                 any act of
insubordination by Executive; provided, however, an act of insubordination by
Executive shall not constitute Cause if Executive cures or remedies such
insubordination within thirty (30) days after written notice to Executive,
without material harm or loss to the Company, unless (i) such
insubordination is a part of a pattern of chronic insubordination, which may be

 

3

 

evidenced by reports or
warning letters given by the Company to Executive; or (ii) such
insubordination is of a nature that it is deemed by the Board not to be
curable, including situations where the Board determines that harm or loss to
the Company has already occurred or can reasonably be expected to occur and
cannot be eliminated or remedied by such cure; or

 

(e)                                  any
unauthorized disclosure of any Company trade secret or confidential
information, or conduct constituting unfair competition with respect to the
Company, including inducing a party to breach a contract with the Company.

 

In
the event of such termination, and not withstanding any contrary provision
otherwise stated, Executive shall receive only his base salary earned through
the date of termination.

 

2.04  In the event the employment of Executive is
terminated prior to the Termination Date by the Company without Cause (and
other than as outlined in Sections 2.01 and 2.02) or by the Executive with Good
Reason as defined in Section 3.09, the Company will pay Executive the
remainder of Executive’s Base Salary due through the Termination Date.  Such payments will be made on a monthly basis
commencing with the first month following the Executive’s termination.  Such payments shall be in addition to any
payment which shall be due Executive pursuant to Section 3.01; shall not
be deemed to be “cash severance-type benefits” under Section 3.04; and
shall not reduce amounts to which Executive is entitled upon a termination
under Article 3.  Notwithstanding
the above, if the Executive terminates employment due to Section 3.09(d),
payment shall be delayed for six (6) months and the delayed payments will
be paid in a lump sum without interest the first month following such six month
delay.

 

3.  SEVERANCE BENEFIT

 

3.01  The Company, its successors or assigns, will
pay Executive as severance pay a lump sum (the “Severance Payment”) amount
equal to twelve (12) months of the Executive’s monthly Base Salary for
full-time employment at the time of Executive’s termination:

 

(a)           if
(i) there has been a Change of Control of the Company (as defined in Section 3.02),
and (ii) Executive is an active and full-time employee at the time of the
Change of Control, and (iii) within twelve (12) months following the date
of the Change of Control, Executive’s employment is involuntarily terminated
for any reason (including Good Reason (as definition Section 3.09)), other
than for Cause or death or disability. 
If prior to a Change of Control (a) Executive’s employment is
involuntarily terminated by the Company without Cause or (b) Executive
terminates his employment for Good Reason, and such termination for Good Reason
(x) occurred at the request of a person who indicated an intention, or
taken steps reasonably calculated, to effect a Change of Control or (y) otherwise
occurred in connection with, or in anticipation of, a Change of Control which
actually occurs, then the termination of Executive’s employment shall be deemed
to have occurred immediately following a Change of Control; or

 

(b)           if
the employment of Executive is terminated by the Company without Cause at any
time, or the Executive terminates his employment for “Good Reason” at any
time.  For the purposes of this Section (3.01(b))
such termination may occur before, on, or after 

 

4

 

the Termination Date and “Good Reason” shall be as
defined in Section 3.09, except that no “Change of Control” need occur; or

 

(c)           if
(i) a Change in Control (as defined in Section 3.02) occurred prior
to Executive commencing his employment with the Company, and (ii) at the
time of the Change in Control Executive had accepted employment with the
Company as indicated by his execution of this Agreement and as a result he was
no longer employed by his previous employer, and (iii) the Company decided
to not commence Executive’s employment as a result of the Change in Control.

 

For
avoidance of doubt, if Executive’s employment is terminated without Cause or by
Executive for Good Reason, Executive shall be entitled to receive (i) the
Severance Payment pursuant to Section 3.01 and (ii) his Base Salary
through the Termination Date.  If the
Company elects to not extend Executive’s employment beyond the Termination Date
or any extension thereof and terminates Executive’s employment, such
termination shall be a termination without Cause for the purposes of Section 3.01(b) and
Executive shall receive, without duplication, his Base Salary through the
Termination Date as provided in Section 2.04.

 

Nothing
in this Section 3.01 shall limit the authority of the Compensation
Committee or Board to terminate Executive’s employment in accordance with Section 2.03.  Payment of the Severance Payment pursuant to Section 3.01,
less customary withholdings, shall be made in one lump sum within thirty (30)
days of the Executive’s termination or resignation; however, such payments will
be delayed for six (6) months if the Executive terminates employment due
to Section 3.09(d).  In addition,
the Severance Payment shall be reduced by the amount of cash severance-type
benefits to which Executive may be entitled pursuant to any other cash
severance plan, agreement, policy or program of the Company or any of its
subsidiaries; including any payment for post-employment restrictions, provided,
however, that if the amount of cash severance benefits payable under such other
severance plan, agreement, policy or program is greater than the Severance
Payment payable pursuant to this Agreement, Executive will be entitled to
receive the amounts payable under such other plan, agreement, policy or program
which exceeds the Severance Payment. 
Without limiting other payments which would not constitute “cash
severance-type benefits” hereunder, any cash settlement of stock options,
accelerated vesting of stock options and retirement, pension and other similar
benefits shall not constitute “cash severance-type benefits” for purposes of
this Section 3.01.

 

3.02  For the purposes of this Agreement, “Change
in Control” shall mean any one of the following:

 

(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:

 

(1)           the then outstanding Stock; or

 

(2)           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:

 

5

 

(i)            any acquisition directly from the Company;

 

(ii)           any acquisition by the Company or Subsidiary;

 

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

 

(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, during any twelve (12) month period, constitute the Board (the “Incumbent
Board”), cease to constitute a majority of the Board.  Individuals nominated or whose nominations
are approved by the Incumbent Board and subsequently elected shall be deemed
for this purpose to be members of the Incumbent Board;

 

(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;

 

(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 Executive if
the merger, sale, transfer or an acquisition of a 50% or greater interest is to
or by a group that includes the Executive, 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 Executive.

 

3.03  Notwithstanding any other provision of this
Agreement to the contrary, the parties to this Agreement intend that this
Agreement shall satisfy the applicable requirements, if any, of Section 409A
of the Code (“Section 409A”) in a manner that will preclude the imposition
of the penalties described in Section 409A.  The parties agree that the Agreement shall be
deemed modified as may become necessary (as determined by the Company in its
discretion) to satisfy the requirements described above.

 

6

 

3.04  In addition to the Severance Payment payable
pursuant to Section 3.01, the Company will pay Executive a pro-rated bonus
due Executive pursuant to any bonus plan or arrangement in which Executive
participates at the time of termination of his employment.  Such bonus shall be reduced by the amount of
cash severance benefits to which Executive may be entitled pursuant to any
other cash severance plan, agreement, policy or program of the Company or any
of its subsidiaries. Without limiting other payments which would not constitute
“cash severance-type benefits” hereunder, any cash settlement of stock options,
accelerated vesting of stock options and retirement, pension and other similar
benefits shall not constitute “cash severance-benefits” for purposes of this Section 3.04.

 

3.05  All severance payments made under this
Agreement, including those paid under Article 2, shall be conditioned upon
the Executive’s signing and not rescinding a separation agreement and release
in a form acceptable to the Company, which agreement shall include, at a
minimum a full and general release of all claims to the greatest extent allowed
by applicable law, a covenant not to sue, an agreement to be reasonably
available for consultation and assistance to the Company during any period in
which severance is paid, and an agreement to promptly return to the Company all
Company property.

 

3.06  Notwithstanding any other provision of this
Agreement, the Company and Executive intend that any payments, benefits or
other provisions applicable to this Agreement comply with the payout and other
limitations and restrictions imposed under Section 409A, as clarified or
modified by guidance from the U.S. Department of Treasury or the Internal
Revenue Service — in each case if and to the extent Section 409A is
otherwise applicable to this Agreement and such compliance is necessary to
avoid the penalties otherwise imposed under Section 409A.  In this connection, the Company and Executive
agree that the payments, benefits and other provisions applicable to this
Agreement, and the terms of any deferral and other rights regarding this
Agreement, shall be deemed modified if and to the extent necessary to comply
with the payout and other limitations and restrictions imposed under Section 409A,
as clarified or supplemented by guidance from the U.S. Department of Treasury
or the Internal Revenue Service, in each case if and to the extent Section 409A
is otherwise applicable to this Agreement and such compliance is necessary to
avoid the penalties otherwise imposed under Section 409A.

 

3.07  The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes required
by applicable law to be withheld by the Company.

 

3.08  If the Company is obligated to pay the
severance payment provided in Section 3.01, and if Executive timely elects
to continue his group health and dental insurance coverage pursuant to applicable
COBRA/continuation law and the terms of the respective benefit plans, the
Company shall pay on Executive’s behalf the premiums for such coverage for the
lesser of twelve (12) months or such time as Executive’s COBRA/continuation
rights expire; and cause the immediate vesting of any unvested stock options
then held by Executive.

 

3.09  “Good Reason” will be deemed to have occurred
if, after a Change in Control:

 

(a)           the
Company, its successors or assigns, assigns Executive position, principal
duties, responsibilities, or status materially contrary to that provided in
Sections 1.02 or 1.03 above;

 

7

 

(b)           the
Company, its successors or assigns, relocates Executive to a location that is
more than fifty (50) miles from the Company’s current headquarters in
Minnesota;

 

(c)           the
Company, its successors or assigns, materially reduces Executive’s base salary
contrary to the provisions of Section 1.05 hereof or fails to pay
Executive any material compensation or fringe benefits to which the Executive
is entitled within ten (10) business days of the due date; or

 

(d)           a
successor company fails or refuses to assume the Company’s obligations under
this Agreement;

 

(e)           the
Company, its successors or assigns, breaches any of its material obligations
under this Agreement and does not correct any such breach within thirty (30)
days of receiving notice thereof from Executive.

 

If
Executive intends to terminate this Agreement for Good Reason:  (i) he must give the Company written
notice of the facts or events giving rise to Good Reason at least sixty (60)
days prior to such termination, and such notice must be given within ninety
(90) days following the facts or event alleged to give rise to Good Reason; and
(ii) such grounds for Good Reason must continue and not be remedied for a
period of thirty (30) days or more following the Company’s receipt of such
notice.  The failure to give such notice
shall be deemed a waiver of the right to terminate this Agreement for Good
Reason based on such fact or event.

 

3.10  The provisions of this Article 3 will be
deemed to survive the termination of this Agreement for the purposes of
satisfying the obligations of the Company and Executive hereunder.

 

4.  NONDISCLOSURE AND INVENTIONS

 

4.01  Except as permitted or directed by the
Company or as may be required in the proper discharge of Executive’s employment
hereunder, Executive shall not, during the Term of employment or at any time
thereafter, divulge, furnish or make accessible to anyone or use in any way any
confidential, trade secret or proprietary information of the Company, including
without limitation, whether or not reduced to writing, customer lists, customer
files or information, pricing information, expansion information, recipes, formulas,
planning and financial information, contracts, sales and marketing information,
business strategy or opportunities for new or developing business, which
Executive has prepared, acquired or become acquainted with during his
employment by the Company.  Executive
acknowledges that the above-described knowledge or information is the property
of the Company that constitutes a unique and valuable asset and represents a
substantial investment by the Company, and that any disclosure or other use of
such knowledge or information, other than for the sole benefit of the Company,
would be wrongful and would cause irreparable harm to the Company.  Executive agrees to at all times maintain the
confidentiality of such knowledge or information, to refrain from any acts or
omissions that would reduce its value to the Company, and to take and comply
with reasonable security measures to prevent any accidental or intentional
disclosure or misappropriation.  Upon
termination of Executive’s employment for any reason, Executive shall promptly
return to the Company all such confidential, trade secret and proprietary
information, including all copies thereof, then in Executive’s possession,
control or influence, whether 

 

8

 

prepared by Executive or others.

 

4.02  The foregoing obligations of confidentiality
shall not apply to any knowledge or information the entirety of which is now
published or subsequently becomes generally publicly known, other than as a
direct or indirect result of the breach of this Agreement by Executive or a
breach of a confidentiality obligation owed to the Company by any third party.

 

4.03  Executive acknowledges that new and valuable
proprietary concepts, recipes, methods, processes, discoveries, trade secrets
(as defined in the Minnesota Uniform Trade Secrets Act), improvements,
adaptations, or ideas (herein individually and collectively referred to as “Inventions”)
may be developed, originated, authorized, conceived, invented, or made by
Executive, either alone or jointly with others, in the course of Executive’s
employment by the Company.  All such
Inventions shall be the exclusive property of the Company, whether or not
patentable or copyrightable, and whether or not shown or described in writing
or reduced to practice.

 

NOTICE:  The Company hereby notifies Executive that
the foregoing does not apply to Inventions or ideas for which no equipment,
supplies, facility, or trade secret information of the Company was used and
that was developed entirely on Executive’s own time, and (1) which does
not relate (a) directly to the business of the Company and (b) to the
Company’s actual or demonstrably anticipated research or development, or (2) which
does not result from any work performed by Executive for the Company.

 

4.04  In the event of a breach or threatened breach
by Executive of the provisions of this Article 4, the Company shall be
entitled to an injunction restraining Executive from directly or indirectly
disclosing, disseminating, lecturing upon, publishing or using such
confidential, trade secret or proprietary information (whether in whole or in
part) and restraining Executive from rendering any services or participating
with any person, firm, corporation, association or other entity to whom such
knowledge or information (whether in whole or in part) has been disclosed,
without the posting of a bond or other security.  Nothing herein shall be construed as
prohibiting the Company from pursuing any other equitable or legal remedies
available to it for such breach or threatened breach, including the recovery of
damages from Executive.  Executive agrees
that the Company shall be entitled to recover its costs of litigation, expenses
and attorney fees incurred in enforcing this Agreement.

 

4.05  The Executive understands and agrees that any
violation of this Article 4 while employed by the Company may result in
immediate disciplinary action by the Company, including termination of
employment pursuant to Section 2.03 hereof.

 

4.06  The provisions of this Article 4 shall
survive termination of this Agreement indefinitely.

 

5.  NON-COMPETITION AND NON-RECRUITMENT

 

5.01  The Company and Executive recognize and agree
that: (i) Executive has received, and will in the future receive,
substantial amounts of highly confidential and proprietary information
concerning the Company, its business, customers, Executives and vendors; (ii) as
a consequence of using or associating himself with the Company’s name,
goodwill, and reputation, 

 

9

 

Executive will develop personal and professional
relationships with the Company’s current and prospective customers, clients and
vendors; and (iii) provision for non-competition and non-recruitment
obligations by Executive is critical to the Company’s continued economic
well-being and protection of the Company’s confidential and proprietary
business information.  In light of these
considerations, this Article 5 sets forth the terms and conditions of
Executive’s obligations of non-competition and non-recruitment during the Term
of and subsequent to the termination of this Agreement and/or Executive’s
employment for any reason.

 

5.02  Unless the obligation is waived or limited by
the Company as set forth herein, Executive agrees that during the term of
Executive’s employment pursuant to this Agreement and for a period of twelve
(12) months following termination of Executive’s employment for any reason,
Executive will not directly or indirectly: (a) solicit or do competitive
business with any person or entity that is or was a customer or vendor of the
Company within the twelve (12) months prior to the date of termination; or (b) engage
within the U.S. markets in which the Company engages in business at the time of
termination, in any business activity in competition with the casual dining
restaurant business as conducted by the company at the time of Executive’s
termination.  At its sole option, the
Company may, by express written notice to Executive, waive or limit the time
and/or geographic area in which Executive cannot engage in competitive activity
or the scope of such competitive activity.

 

5.03  During the period of employment, and for a
period of twelve (12) months following termination of Executive’s employment
for any reason, Executive will not directly, or indirectly on behalf of any
other person, engage in the recruitment or hiring of any of the Company’s
employees.

 

5.04  Executive agrees that breach by him of the
provisions of this Article 5 will cause the Company irreparable harm that
is not fully remedied by monetary damages. 
In the event of a breach or threatened breach by Executive of the
provisions of this Article 5, the Company shall be entitled to an
injunction restraining Executive from directly or indirectly competing or
recruiting as prohibited herein, without posting a bond or other security and,
if the Company is successful in establishing a breach of this Agreement, its
reasonable attorneys’ fees and costs.. 
Nothing herein shall be construed as prohibiting the Company from pursuing
any other equitable or legal remedies available to it for such breach or
threatened breach, including the recovery of damages from Executive.  Executive agrees that the Company shall be
entitled to recover its costs of litigation, expenses and attorney fees
incurred in enforcing this Agreement.

 

5.05  The obligations contained in this Article 5
shall survive the termination of this Agreement indefinitely.

 

6.  MISCELLANEOUS

 

6.01  Governing Law.  This Agreement and the employment
relationship between the Company and Executive shall be governed and construed
according to the laws of the State of Minnesota without regard to conflicts of
law provisions.

 

6.02  Successors.  This Agreement is personal to Executive and
Executive may not assign or transfer any part of his rights or duties
hereunder, or any compensation due to him hereunder, 

 

10

 

to any other person or entity.  This Agreement may be assigned by the Company
to any successor to the Company or any purchaser of its assets.

 

6.03  Waiver.  The waiver by the Company of the breach or
nonperformance of any provision of this Agreement by Executive will not operate
or be construed as a waiver of any future breach or nonperformance under any
such provision of this Agreement or any similar agreement with any other
Executive.

 

6.04  Modification.  This Agreement supersedes, revokes and
replaces any and all prior oral or written understandings, if any, between the
parties relating to the subject matter of this Agreement.  The parties agree that this Agreement: (a) is
the entire understanding and agreement between the parties; and (b) is the
complete and exclusive statement of the terms and conditions thereof, and there
are no other written or oral agreements in regard to the subject matter of this
Agreement.  This Agreement shall not be
changed or modified except by a written document signed by the parties hereto.

 

6.05  Severability and Blue Penciling.  To the extent that any provision of this
Agreement shall be determined to be invalid or unenforceable as written, the
validity and enforceability of the remainder of such provision and of this
Agreement shall be unaffected.  If any
particular provision of this Agreement shall be adjudicated to be invalid or
unenforceable, the Company and Executive specifically authorize the tribunal
making such determination to edit the invalid or unenforceable provision to
allow this Agreement, and the provisions thereof, to be valid and enforceable
to the fullest extent allowed by law or public policy.

 

IN
WITNESS WHEREOF the following parties have executed the above instrument the
day and year first above written.

 

	
   

  	
  GRANITE
  CITY FOOD & BREWERY LTD

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Steven J. Wagenheim

  
	
   

  	
   

  	
  Steven
  J. Wagenheim, Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By
  

  	
  /s/Darius
  H. Gilanfar

  
	
   

  	
   

  	
  Darius
  H. Gilanfar

  

 

11

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