Document:

Exhibit
10.6

 

EXECUTIVE
EMPLOYMENT AGREEMENT – AMENDMENT NO. 2

 

THIS EXECUTIVE EMPLOYMENT
AGREEMENT – AMENDMENT NO. 2 (this “Agreement”) is made
and entered into effective October 5, 2009, by and between Granite City Food
and 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 and pursuant to amendments thereto (the “Employment
Agreement”).  Pursuant to such Employment
Agreement, Executive is currently employed on an at-will basis and subject to
additional provision of the Employment Agreement.

 

B.                                     The Company
proposes to enter into a debt conversion transaction (the “Transaction”) with
DHW Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of
the Company in exchange for the conversion of certain indebtedness, and DHW
will thereupon become the majority shareholder of the Company.

 

C.                                     It is
contemplated that Executive will continue in the employ of the Company
following the Transaction and the Company desires to secure the services of
Executive following the Transaction.

 

D.                                    It is desirable
to amend the Employment Agreement to provide for 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.             Section
3.02 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 one year following the closing of the debt
conversion transaction (the “Transaction”) by and between the Company and DHW
Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of the
Company in exchange for the conversion of certain indebtedness, and DHW will
thereupon become the majority shareholder of the Company (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, it 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 

 

1

 

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.             Article 4 of the Employment Agreement is amended to add Section
4.05 as follows:

 

4.05         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 7 of this Agreement, and base salary
payments provided for under Section 6.07 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 8 or 9 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 4.05
shall survive the termination of this Agreement indefinitely.

 

4.             Article
6 of the Employment Agreement is amended to add Section 6.07 as follows:

 

6.07         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 Section 6.02) or by the Executive with Good Reason as defined in Section
6.04, 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 7.01 as amended; shall not be deemed to be “cash
severance-type benefits” under Section 7.01; and shall not reduce amounts to which
Executive is entitled upon a termination under Section 7.  Notwithstanding the above, if the Executive
terminates employment due to Section 6.04(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.

 

5.             For
clarification purposes, Section 7.01(b) of the Employment Agreement is amended
to read as follows:

 

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(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 (7.01(b)) such termination may occur before, on, or
after the Termination Date and “Good Reason” shall be as defined in Section 6.04,
except that no “Change of Control” need occur.

 

6.             Article
7 of the Employment Agreement is amended to add Section 7.09 as follows:

 

7.09         All severance payments made under this Article 7, including
those paid under Section 7.01, 7.03 and 7.04, 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, and 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 return to the Company all Company
property and copies thereof in any form or media.

 

7.             Bonus or Incentive Compensation.  Executive
acknowledges that he has waived and is not entitled to any bonus payments or
incentive compensation through the Company’s 2009 fiscal year.

 

8.             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 AND BREWERY LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Eugene E. McGowan

  
	
   

  	
   

  	
  Eugene
  E. McGowan, Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James G. Gilbertson

  
	
   

  	
   

  	
  James G. Gilbertson

  

 

3Exhibit 10.7

 

EMPLOYMENT
AND SEVERANCE AGREEMENT – AMENDMENT NO. 2

 

THIS EMPLOYMENT AND SEVERANCE
AGREEMENT – AMENDMENT NO. 2 (this “Agreement”) is made
and entered into effective October 5, 2009, by and between Granite City Food
and Brewery Ltd. (the “Company”) and Darius H. Gilanfar (“Executive”).

 

RECITALS

 

A.                                   Executive is employed by the
Company pursuant to an employment agreement made and entered into December 2,
2008 and pursuant to amendments thereto (the “Employment Agreement”).  Pursuant to such Employment Agreement,
Executive is currently employed on an at-will basis and subject to additional
provision of the Employment Agreement.

 

B.                                     The Company proposes to
enter into a debt conversion transaction (the “Transaction”) with DHW Leasing
L.L.C. (“DHW”) pursuant to which DHW will be issued common stock of the Company
in exchange for the conversion of certain indebtedness, and DHW will thereupon
become the majority shareholder of the Company.

 

C.                                     It is contemplated that
Executive will continue in the employ of the Company following the Transaction
and the Company desires to secure the services of Executive following the
Transaction.

 

D.                                    It is desirable to amend the
Employment Agreement to provide for 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.             Section 1.01
of the Employment Agreement is hereby amended and restated to read as follows:

 

1.01         The
Company agrees to employ Executive as a full-time employee.  Executive’s employment pursuant to this
Agreement shall continue for a term ending one year following the closing of
the debt conversion transaction (the “Transaction”) by and between the Company
and DHW Leasing L.L.C. (“DHW”) pursuant to which DHW will be issued common
stock of the Company in exchange for the conversion of certain indebtedness,
and DHW will thereupon become the majority shareholder of the Company (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 sixy (60) days prior to the
Termination Date or the end of any extension periods.  If Executive’s employment continues beyond
the Termination Date, it shall continue on an at-will basis under the remaining
terms and conditions of this Agreement, as amended hereby, and as 

 

1

 

the same may be amended from time to time
with the consent of the Company and Executive, except that 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.             The
Employment Agreement is hereby amended to add Section 1.09 as follows:

 

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 Section 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 Sections 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.

 

4.             Section 2.04
of the Employment Agreement is hereby amended and restated as follows:

 

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 3.10, 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
as amended; shall not be deemed to be “cash severance-type benefits” under Section 3.01;
and shall not reduce amounts to which Executive is entitled upon a termination
under Section 3  Notwithstanding the
above, if the Executive terminates employment due to Section 3.10(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.

 

5.             Section 3.01
of the Employment Agreement is hereby amended and restated to read as follows:

 

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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 3.10)), 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 the Termination Date
and “Good Reason” shall be as defined in Section 3.10, 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.

 

Nothing in this Subsection
3.01 shall limit the authority of the 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 3.10(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, 

 

3

 

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.

 

6.             The
Employment Agreement is hereby amended to add Section 3.09 as follows:

 

3.09         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.

 

7.             The
Employment Agreement is hereby amended to add Section 3.10 as follows:

 

3.10  “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;

 

(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.

 

4

 

8.             Bonus or Incentive Compensation.  Executive
acknowledges that he has waived and is not entitled to any bonus payments or
incentive compensation through the Company’s 2009 fiscal year.

 

9.             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 AND BREWERY LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven J. Wagenheim

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Darius H. Gilanfar

  
	
   

  	
   

  	
  Darius
  H. Gilanfar

  

 

5

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