Document:

EXHIBIT 10.2

 

Option:          

 

GRANITE CITY FOOD & BREWERY LTD.

STOCK OPTION AGREEMENT

PURSUANT TO 1997 STOCK OPTION PLAN

 

Granite City Food &
Brewery Ltd., a Minnesota corporation (the “Company”), hereby grants to                                   
(the “Optionee”), an option (the “Option”) to purchase a total of                 
shares of Common Stock (the “Shares”), at the price determined as provided
herein, and in all respects subject to the terms, definitions and provisions of
the Granite City Food & Brewery Ltd. 1997 Stock Option Plan (the “Plan”)
adopted by the Company, which is incorporated herein by reference.  Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings herein.

 

1.                                       Nature
of the Option.  This Option is
intended to qualify as an Incentive Stock Option as defined in Section 422
of the Code.

 

2.                                       Exercise
Price.  The exercise price for each
share of Stock is $          .  The Board has determined that this price is
not less than the fair market value per share of the Stock on the date of
grant.

 

3.                                       Exercise
of Option.  This Option shall be
exercisable during its term in accordance with the provisions of Section 8
of the Plan as follows:

 

(i)                                     Right
to Exercise.

 

(a)                                  Subject
to subsections 3(i)(b), (c), (d) and (e) below, this Option shall be
exercisable                                                        .

 

(b)                                 This
Option must be exercised for at least 100 shares, and may not be exercised for
a fraction of a share of Stock.

 

(c)                                  In
the event of Optionee’s death, disability or other termination of employment,
the exercisability of the Option is governed by Sections 7, 8 and 9 below,
subject to the limitations contained in subsections 3(i)(d) and (e).

 

(d)                                 In
no event may this Option be exercised after the date of expiration of the term
of this Option as set forth in Section 11 below.

 

(e)                                  To
the extent that the aggregate fair market value of the Shares with respect to
which Options designated as Incentive Stock Options are exercisable for the
first time by Optionee during any calendar year (under all plans of the
Company) exceeds $100,000, such options shall be treated as Nonstatutory Stock
Options.  For purposes of the preceding
sentence, (i) Options shall be taken into account in the order in which
they were granted, and (ii) the fair market value of the Shares shall be
determined as of the time the Option with respect to such Shares was granted.

 

(ii)                                  Method
of Exercise.  This Option shall be
exercisable by written notice which shall state the election to exercise the
Option, the number of Shares in respect of which the

 

 

Option
is being exercised, and such other representations and agreements as to the
Optionee’s investment intent with respect to such shares of Stock as may be
required by the Company pursuant to the provisions of the Plan.  Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Chief
Executive Officer of the Company.  The
written notice shall be accompanied by payment of the exercise price.  Until certificates for the Shares are issued
to the Optionee, such Optionee shall not have any rights as a shareholder of
the Company.

 

No Shares will be issued
pursuant to the exercise of an Option unless such issuance and such exercise
shall comply with all relevant provisions of law and the requirements of any
stock exchange upon which the Shares may then be listed.  Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on the date
on which the Option is exercised with respect to such Shares.

 

4.                                       Optionee’s
Representations.  In the event the
Shares purchasable pursuant to the exercise of this Option have not been
registered under the Act, at the time this Option is exercised, the Optionee
shall, concurrently with the exercise of all or any portion of this Option,
deliver to the Company his Investment Representation Statement in the form
attached hereto as an exhibit.

 

5.                                       Method
of Payment.  Payment of the exercise
price shall be by (i) cash; (ii) check, bank draft or money order; (iii) if
authorized by the Board, by delivery of shares of Stock (valued at the fair
market value thereof on the date of exercise); or (iv) by delivery of a
combination of cash and Stock.  The Board
may, in order to prevent any possible violation of law, require the payment
price to be paid in cash.

 

6.                                       Restrictions
on Exercise.  This Option may not be
exercised if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including
any rule under Part 207 of Title 12 of the Code of Federal
Regulations (“Regulation G”) as promulgated by the Federal Reserve Board.  As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.

 

7.                                       Termination
of Status as an Employee.  In the
event of Termination, Optionee may, but only within three months after the date
of Termination (but in no event later than the date of expiration of the term
of this Option as set forth in Section 11 below), exercise this Option to
the extent that he was entitled to exercise it at the date of Termination.  To the extent that he was not entitled to
exercise this Option at the date of Termination, or if he does not exercise
this Option within the time specified herein, the Option shall terminate.  “Termination” shall be defined as termination
of Optionee’s employment by the Company provided that such termination is not
for misconduct (as discussed in Section 11.4 of the Plan).

 

In the event Optionee
terminates employment voluntarily or is terminated by the Company for misconduct
(as discussed in Section 11.4 of the Plan), any unvested option shall
terminate immediately.

 

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8.                                       Disability
of Optionee.  Notwithstanding the
provisions of Section 7 above, in the event of termination of Optionee’s
status as an employee as a result of his Disability, he may, but only within
one year from the date of termination of employment (but in no event later than
the date of expiration of the term of this Option as set forth in Section 11
below), exercise his Option to the extent he was entitled to exercise it at the
date of such termination.  To the extent
that he was not entitled to exercise the Option at the date of termination, or
if he does not exercise such Option (which he was entitled to exercise) within
the time specified herein, the Option shall terminate.

 

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

 

(i)                                     during
the term of this Option and while an employee of the Company and having been in
continuous employment (as determined by the Board in its sole discretion) since
the date of grant of the Option, the Option may be exercised, at any time
within one (1) year following the date of death (but in no event later
than the date of expiration of the term of this Option as set forth in Section 11
below), by Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was
entitled to exercise the Option at the date of death; or

 

(ii)                                  within
three months after termination, the Option may be exercised, at any time within
nine (9) months following the date of death (but in no event later than
the date of expiration of the term of this Option as set forth in Section 11
below), by Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of termination.

 

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

 

11.                                 Term
of Option.  This Option may not be
exercised after                          ,
        , and may be exercised only in
accordance with the Plan and the terms of this Option.

 

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

 

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13.                                 Plan
Interpretation.  Optionee hereby
agrees to accept as binding, conclusive and final all decisions and
interpretations of the Board and, where applicable, the Committee, upon
questions arising under the Plan.

 

DATE OF GRANT:                          ,
           .

 

	
   

  	
  GRANITE CITY
  FOOD & BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Steven J. Wagenheim

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

OPTIONEE ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S 1997 STOCK OPTION
PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY
RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT
INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY’S RIGHT TO TERMINATE HIS
EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.

 

Optionee acknowledges
receipt of a copy of the Plan and certain information related thereto and
represents that he is familiar with the terms and provisions thereof, and
hereby accepts this Option subject to all of the terms and provisions
thereof.  Optionee has reviewed the Plan
and this Option in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Option and fully understands all provisions
of the Option.  Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under the Plan.  Optionee further agrees to notify the Company
upon any change in the residence address indicated below.

 

	
   

  	
   

  
	
  Optionee
  (signature)

  
	
   

  
	
  Name and address
  of Optionee

  
	
  (type or print):

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  

 

4EXHIBIT 10.3

 

OPTION NO:          

 

GRANITE
CITY FOOD & BREWERY LTD.

STOCK
OPTION AGREEMENT

PURSUANT
TO 1997 DIRECTOR STOCK OPTION PLAN

 

Granite City Food &
Brewery Ltd., a Minnesota corporation (the “Company”), hereby grants to                                
(the “Optionee”), an option to purchase the number of shares of the Company’s
Common Stock, $.01 par value per share (the “Stock”), set forth herein. The
Stock shall be issued at the price determined as provided herein, and shall be
in all respects subject to the terms, definitions and provisions of the Granite
City Food & Brewery Ltd. 1997 Director Stock Option Plan (the “Plan”)
adopted by the Company, which is incorporated herein by reference.  Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings herein.

 

W I T N E S S E T H :

 

1.                                       Grant
of Option.  Pursuant to the
provisions of the Plan and subject to the additional conditions set forth
herein, the Optionee has been automatically granted on the date hereof the
right and option to purchase from the Company all or a part of an aggregate of
15,000 shares of Stock, subject to adjustment as provided in Section 4(d) of
the Plan, at the purchase price of $            
per share (the “Option”).  The Option
does not constitute an incentive stock option within the meaning of Section 422
of the Code.

 

2.                                       Terms
and Conditions.  It is understood and
agreed that the Option evidenced hereby is subject to the following terms and
conditions and to the terms and conditions of the Plan:

 

(a)                                  Expiration
Date.  The Option shall expire five (5) years
after the date hereof.

 

(b)                                 Exercise
of Option.  The Option shall become
exercisable in full on the first anniversary of the grant of the Option,
provided that the Optionee shall have maintained Continuous Service as a
Director throughout such 12-month period. 
The Option shall be exercisable only while the Optionee serves as an
outside director of the Company, and for a period twelve (12) months after
ceasing to be an outside director pursuant to Section 10 of the Plan.  Any exercise shall be accompanied by a
written notice to the Company specifying the number of shares as to which the
Option is being exercised.  Notation of
any partial exercise shall be made by the Company on Schedule I attached
hereto.

 

(c)                                  Payment
of Purchase Price Upon Exercise.  At
the time of any exercise, the purchase price of the shares as to which the
Option is exercised shall be paid in cash to the Company, unless, in accordance
with the provisions of Section 9(b) of the Plan, the Board shall
permit payment of the purchase price in another manner.

 

 

(d)                                 Exercise
Upon Death or Termination of Status as a Director.

 

(i)                                     Termination of
Status as a Director.  If the
Optionee ceases to serve as a director, the Optionee may, but only within
twelve (12) months after the date the Optionee ceases to be an outside director
of the Company, exercise his Option to the extent the Optionee was entitled to
exercise it at the date of such termination. 
To the extent that the Optionee was not entitled to exercise the Option
at the date of such termination, or if the Optionee does not exercise such
Option within the time specified herein, the Option shall terminate.

 

(ii)                                  Death of Optionee.  In the event of the death of the Optionee
occurring:

 

(A)                              during the term of the
Option, and provided that the Optionee was at the time of death a director of
the Company and had been in Continuous Service as a director since the date of
grant of the Option, the Option may be exercised, at any time within twelve
(12) months following the date of death, by the Optionee’s estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that would have accrued had the
Optionee continued living and remained in Continuous Service a director for
twelve (12) months after the date of death; or

 

(B)                                within thirty (30) days
after the termination of Continuous Service as a director, the Option may be
exercised, at any time within six (6) months following the date of death,
by the Optionee’s estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent of the right to
exercise that had accrued at the date of termination of Continuous Service as a
director.

 

(e)                                  Non-Transferability
of Options.  The Option may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order and may be exercised, during
the lifetime of the Optionee, only by the Optionee.

 

(f)                                    Adjustments
Upon Changes in Capitalization.  The
number of shares of Common Stock covered by the Option and the per share
exercise price of the Option shall be proportionately adjusted for any increase
or decrease in the number of issued and outstanding shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. 
Except as expressly provided herein or in the Plan, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, or options or rights to purchase shares of Common Stock
of any class shall affect, and no adjustment by reason

 

2

 

thereof shall be
made with respect to, the number or price of shares of Common Stock subject to
the Option.

 

(g)                                 No
Rights as Shareholder.  The Optionee
shall have no rights as a shareholder with respect to any shares of Common
Stock subject to this Option prior to the date of issuance to him of a
certificate or certificates for such shares.

 

(h)                                 No
Right to Continued Status as a Director. 
The Option shall not confer upon the Optionee any right with respect to
continued status as a director of the Company, nor shall it interfere in any
way with the right of the Company or its shareholders to terminate his status
as a director of the Company at any time.

 

(i)                                     Compliance
with Law and Regulations.  This
Option and the obligation of the Company to sell and deliver shares of its
Common Stock hereunder shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. 
The Company shall not be required to issue or deliver any certificates
for shares of Common Stock prior to (i) compliance with the regulations of
the NASD or any stock exchange on which the Common Stock may then be listed and
(ii) the completion of any registration or qualification of such shares
under any federal or state law, or any rule or regulation of any
government body which the Company shall, in its sole discretion, determine to
be necessary or advisable.  Moreover,
this Option may not be exercised if its exercise or the receipt of shares of Common
Stock pursuant hereto would be contrary to applicable law.

 

3.                                       Investment
Representation.  As a condition to
the exercise of the Option, the Company may require the person exercising the
Option to represent and warrant at the time of exercise that the shares of Common
Stock are being purchased only for investment and without any present intention
to sell or distribute such shares, if, in the opinion of counsel for the
Company, such a representation is required by any relevant provisions of law.  The shares of Common Stock issued pursuant to
the Option may be issued with appropriate legends on the stock certificates
representing the shares, and the Company may place stop transfer orders with
respect to such shares.

 

4.                                       Optionee
Bound by Plan.  The Optionee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof.

 

5.                                       Notices.  Any notice hereunder to the Company shall be
addressed to it at its principal executive offices; and any notice hereunder to
the Optionee shall be addressed to him at the address set forth below; subject
to the right of either party to designate at any time hereunder in writing some
other address.

 

6.                                       Counterparts.  This Agreement may be executed in two
counterparts each of which shall constitute one and the same instrument.

 

3

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
Chief Executive Officer and the Optionee has executed this Agreement, both as
of the day and year set forth below.

 

DATE OF GRANT:                               ,
       

 

	
   

  	
  GRANITE CITY
  FOOD & BREWERY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Steven J. Wagenheim

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  
	
   

  
	
  Optionee
  (signature):

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  Name and address
  of Optionee:

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
					

 

4

 

SCHEDULE I - NOTATIONS AS TO PARTIAL EXERCISE

 

	
  Date of Exercise

  	
   

  	
  Number of

  Purchased

  Shares

  	
   

  	
  Balance of

  Shares on

  Option

  	
   

  	
  Authorized

  Signature

  	
   

  	
  Notation Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

I-1

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