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Sample Business Contracts

Management Deferred Compensation Plan - Buffalo Wild Wings Inc.

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                            BUFFALO WILD WINGS, INC.
                      MANAGEMENT DEFERRED COMPENSATION PLAN


                                   ARTICLE 1.
                                     PURPOSE

     1.1 Deferred Compensation. The purpose of the Buffalo Wild Wings, Inc.
Management Deferred Compensation Plan (the "Plan") is to provide deferred
compensation to certain management employees of Buffalo Wild Wings, Inc.
("BWW"). The Plan is an unfunded deferred compensation arrangement for a select
group of management or highly compensated employees within the meaning of
Sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income
Security Act of 1974 ("ERISA") and 29 C.F.R.ss. 2520.104-23(b)(2). The Plan is
effective May 20, 1999.


                                   ARTICLE 2.
                                 ADMINISTRATION

     2.1 Administration and Delegation of Authority. The Board of Directors of
BWW (the "Board") shall administer the Plan. The Board, in its sole discretion,
may delegate all or some of its powers and duties to the Compensation Committee
of the Board, except for the powers described in Section 6.11 hereof.
(Hereafter, a reference to the Board shall include the Compensation Committee to
the extent of such delegation.) No member of the Board or Compensation Committee
shall participate in any decision concerning the payments to be made to such
member or concerning other matters relating to such member's benefits hereunder.

     2.2 Powers. The Board shall have exclusive authority to determine which
management employees have met the participation requirements of Article 3 and
are eligible to share in the deferred compensation benefits provided by the
Plan, to prescribe the form of any applications or guidelines required by the
provisions of the Plan, to interpret the Plan, to adopt and revise procedures,
rules and regulations relating to the Plan, and to make any other determinations
it believes necessary or advisable for the administration of the Plan. Decisions
and determinations by the Board shall be final and binding on all parties
including, but not limited to, BWW and the shareholders, employees and officers
of BWW, whether or not participating in the Plan.


                                   ARTICLE 3.
                                  PARTICIPATION

     3.1 Participation of Certain Management Employees and Plan Entry. Each
employee who is an executive officer or nonofficer vice president of BWW on May
20, 1999,


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shall participate in the Plan as of such date. Each employee who thereafter
becomes an executive officer or nonofficer vice president shall participate in
the Plan on the effective date of his or her appointment to such position and
shall be eligible to accrue benefits under the Plan until he or she is no longer
in such position.


                                   ARTICLE 4.
                         DEFERRED COMPENSATION BENEFITS

     4.1 Amount and Vesting.

          4.1.1 Establishment of Deferred Compensation Accounts. A deferred
     compensation account ("account") shall be established on the books of BWW
     for each participant upon such participant's entry into the Plan.

          4.1.2 Value of Deferred Compensation Accounts.

               4.1.2.1 Credits. As of the last day of each month, BWW shall
          credit to the account of each participant who is an executive officer
          or nonofficer vice president of BWW on such date an amount equal to
          the percentage, set forth in his or her Acknowledgment of
          Participation, which instrument shall be an integral part of the Plan,
          of such participant's base salary paid during such month. As of the
          last day of each month, BWW shall also credit to the account of each
          participant an amount equal to the product of (i) the balance of such
          account as of the last day of the preceding month and (ii) one-twelfth
          of the prime rate for the week which includes the last day of the
          preceding month, as published in the Money Rates section of The Wall
          Street Journal.

               4.1.2.2 Debits. As of the last day of each month, BWW shall debit
          from a participant's account the amount of distributions made to the
          participant or, in the event of the participant's death, to the
          participant's beneficiary, since the date of the preceding adjustment.
          As of the last day of each month, BWW shall also debit from a
          participant's account an amount, not exceeding the amount credited
          under the first sentence of Section 4.1.2.1 to the extent vested under
          the five-year vesting schedule in Section 4.1.3, which the participant
          has chosen, in an irrevocable, written election filed with BWW prior
          to January 1 of such plan year, to have used to pay the premiums
          during the plan year on a cash-value life insurance policy or policies
          purchased under the Retirement Life Insurance Plan maintained by BWW
          for certain employees and the federal and state tax withholding
          liability with respect to such payment (as determined by BWW). No such
          election may be filed for the 1999 plan year.

          4.1.3 Vesting. The value of a participant's account shall be fully
     vested and nonforfeitable on the earliest of the occurrence, while the
     participant is an employee of BWW, of any of the following events: (i) the
     participant's termination of employment due to death, permanent disability,
     or termination of employment at or after age 65, (ii) the termination of


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     the Plan by BWW, (iii) a change of control, and (iv) the insolvency of or
     declaration of bankruptcy by BWW. If a participant terminates employment
     with BWW prior to any of the foregoing events, the value of the
     participant's account, determined as of the date of such termination, shall
     be vested and nonforfeitable in accordance with the following schedule:

              Years of Service                   Vested Percentage
              ----------------                   -----------------
              Fewer than one                            0%
              One but fewer than two                   20%
              Two but fewer than three                 40%
              Three but fewer than four                60%
              Four but fewer than five                 80%
              At least five                           100%

     Notwithstanding the foregoing provisions of this Section 4.1.3, if a
     participant is discharged from employment with BWW for cause, as defined in
     his or her written employment agreement with BWW (or, in the absence of a
     written employment agreement, as defined in Section 5.3), or violates the
     provisions of any written employment agreement with BWW prohibiting
     competition with BWW and its subsidiaries or disclosure of confidential
     information (or, in the absence of a written employment agreement, engages
     in competition or uses or discloses confidential information as defined in
     Sections 5.6 and 5.7, respectively), the value of the participant's account
     shall be vested and nonforfeitable in accordance with the following
     schedule:

              Years of Service                   Vested Percentage
              ----------------                   -----------------
              Fewer than one                            0%
              One but fewer than two                   10%
              Two but fewer than three                 20%
              Three but fewer than four                30%
              Four but fewer than five                 40%
              Five but fewer than six                  50%
              Six but fewer than seven                 60%
              Seven but fewer than eight               70%
              Eight but fewer than nine                80%
              Nine but fewer than ten                  90%
              At least ten                            100%

     The forfeiture of any portion of a participant's account shall not affect
     the value of any other participant's account. The Board shall have sole and
     complete discretion with respect to the application of the provisions of
     this Section 4.1.3 and such exercise of discretion shall be conclusive and
     binding upon participants and all other persons.


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     4.2 Payment.

          4.2.1 General. The value of a participant's vested interest in his or
     her account shall be paid to the participant or, in the event of the
     participant's death prior to the payment of all vested amounts credited to
     the participant's account, to the participant's beneficiary, in five equal
     or nearly equal annual installments commencing on the first day of the
     month following the first anniversary of the participant's termination of
     employment.

          4.2.2 Acceleration or Change in Manner of Payment. Notwithstanding
     Section 4.2.1, the Board, in its sole discretion and after consultation
     with the payee, may accelerate payments or make payments in a different
     manner if it determines that such acceleration or change in the manner of
     payment would be in the best interest of the payee; provided, however, that
     such payment on the first payment date shall not exceed 50% of the vested
     value of the participant's account.

          4.2.3 Hardship. At any time, a participant may request, under
     procedures adopted by the Board from time to time, a lump-sum cash payment
     of the vested value of his or her account, not exceeding $20,000 in any one
     instance or $100,000 in the aggregate, in the event of an unforeseeable
     emergency under circumstances where such payment would be permissible if
     the Plan were subject to Code Section 457(b) and the regulations
     thereunder. The Board shall have complete discretion to determine whether a
     participant has satisfied the conditions for receiving such a payment.

          4.2.4 Limitation on Amount of Payments. Notwithstanding any of the
     provisions of the Plan to the contrary, no amount shall be paid hereunder
     which would cause any payment under the Plan to be nondeductible for
     federal income tax purposes or result in the imposition of an excise tax as
     a consequence of the golden-parachute provisions of Code Section 280G or
     4999, or similar statutory provisions. The Board shall act in good faith
     and take reasonable actions to cause the payment of benefits to satisfy
     conditions that would avoid the application of the foregoing statutory
     provisions without diminishing the benefits paid under the Plan.


                                   ARTICLE 5.
                                   DEFINITIONS

     5.1 Base Salary. "Base salary" means the regular periodic remuneration paid
to a participant for services rendered to BWW during the plan year. With respect
to an employee who becomes a participant during 1999, remuneration paid on and
after May 1, 1999, shall be included. With respect to an employee who becomes a
participant during or after 2000, in the first plan year in which the employee
participates in the Plan, remuneration paid prior to the employee's entry into
the Plan shall be excluded.

     5.2 Beneficiary. "Beneficiary" means the person or entity that a
participant designates to receive payments in the event of the participant's
death. A participant shall


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have the right to revoke or change his or her beneficiary designation at any
time without the consent of the beneficiary. To be effective, such designation,
alteration or revocation shall be in writing, in a form approved by BWW, and
shall be filed with and accepted by the Board. The most recently dated
beneficiary designation form which is validly filed with the Board by a
participant shall revoke all previously dated beneficiary designation forms
filed by such participant. If a participant fails to designate a beneficiary or
if no beneficiary designated by the participant survives the participant, any
amounts remaining shall be paid to the participant's estate.

     5.3 Cause. "Cause" means termination of a participant's employment with BWW
by the Board because of (1) gross misconduct, dishonesty or disloyalty; or (2)
conviction of or entry of a plea of guilty or nolo contendere to any felony or
to any misdemeanor involving fraud, misrepresentation or theft.

     5.4 Change of Control. "Change of control" means (i) the sale, lease,
exchange or other transfer, directly or indirectly, of all or substantially all
of the assets of BWW, in one transaction or in a series of related transactions,
to any person or entity; (ii) the approval by the shareholders of BWW of any
plan or proposal for the liquidation or dissolution of BWW; or (iii) a merger or
consolidation to which BWW is a party if the shareholders of BWW, immediately
after the effective date of such merger or consolidation, have less than 50% of
the combined voting power of the surviving corporation's then outstanding
securities ordinarily having the right to vote at elections of directors.

     5.5 Code. "Code" means the Internal Revenue Code of 1986, as amended.

     5.6 Competition. "Competition" means that during a participant's employment
with BWW and continuing until the one-year anniversary of termination or
cessation of the participant's employment with BWW, the participant, alone or in
any capacity with another legal entity:

          5.6.1 Directly or indirectly, owns any interest in, controls, is
     employed by or associated with, or renders services to, any person, entity,
     or subsidiary, subdivision, division or joint venture of such entity in
     connection with the operation, management or franchising of a competitive
     business in any geographic area in which BWW or any of its subsidiaries
     actively operates a BWW business or intends to actively operate a BWW
     business;

          5.6.2 Directly or indirectly, solicits any of BWW's or its
     subsidiaries' present or future employees for the purpose of hiring them or
     inducing them to leave their employment with BWW or its subsidiaries; or

          5.6.3 Directly or indirectly, solicits, attempts to solicit,
     interferes, or attempts to interfere with BWW's or any of its subsidiaries'
     relationship with its customers or potential customers, on behalf of the
     participant or any other person or entity engaged in the operation,
     management or franchising of a competitive business.


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     For these purposes, "BWW business" means the operation, management and
franchising of sports-themed grill and bar restaurants, including but not
limited to food production and development, sports-themed grill and bar
restaurant and franchise marketing, management operations, and any confidential
information BWW or its subsidiaries either uses or intends to use in the
operation, management or franchising of such restaurants; and "competitive
business" means any business which operates, manages or franchises other
sports-themed grill and bar restaurant businesses substantially similar to the
type of sports-themed grill and bar restaurants operated by BWW or its
subsidiaries.

     5.7 Confidential Information. "Confidential information" means any
information or compilation of information that a participant learns or develops
during the course of employment with BWW or its subsidiaries that derives
independent economic value from not being generally known, or readily
ascertainable by proper means, by other persons who can obtain economic value
from its disclosure or use. It includes but is not limited to trade secrets,
inventions and discoveries, and may relate to such matters as manufacturing
processes, management systems and techniques, and sales and marketing plans and
information.

     5.8 Participant. "Participant" means an employee who has satisfied the
conditions for participating in the Plan pursuant to Section 3.1.

     5.9 Permanent Disability. "Permanent disability" means a participant is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.

     5.10 Plan Year. The "plan year" is January 1 through December 31 of each
year.

     5.11 Years of Service. "Years of service" means the number of anniversaries
of a participant's date of employment with BWW on which the participant has been
an employee of BWW, predecessor of BWW, or subsidiary of BWW that have occurred
as of the date as of which the participant's vested percentage is being
determined.


                                   ARTICLE 6.
                            MISCELLANEOUS PROVISIONS

     6.1 Nontransferability. No participant or any beneficiary shall have any
right to assign, encumber or otherwise anticipate the right to receive payment
hereunder, and the benefits under the Plan shall not be subject to garnishment,
attachment or any other legal process by the creditors of any participant or
beneficiary hereunder.


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     6.2 Liability of BWW. BWW shall have no liability in connection with the
Plan except to pay any nonforfeitable benefits in accordance with the terms of
the Plan. BWW has made no representations to any participant with respect to the
tax implications of any transactions contemplated by the Plan. Each participant
shall obtain his or her own counsel to advise the participant with respect to
the tax effect of the Plan.

     6.3 Binding Effect. The Plan shall be binding upon the participants and BWW
and their heirs, executors and assigns. BWW shall not be a party to any merger,
consolidation or reorganization unless and until its obligations under the Plan
shall be expressly assumed by its successor or successors.

     6.4 Payment in Case of Incompetency. If, in the judgment of the Board based
upon facts and information readily available to it, any person entitled to
receive a payment hereunder is incapable for any reason of personally receiving
and giving a valid receipt for the payment of a benefit, the Board may cause
such payment or any part thereof to be made to the duly appointed guardian or
legal representative of such person, or to any person or institution
contributing to or providing for the care and maintenance of such person,
provided that no prior claim for said payment has been made by a duly appointed
guardian or legal representative of such person. The Board shall not be required
to see to the proper application of any such payment made in accordance with the
provisions hereof, and any such payment shall constitute payment for the account
of such person and a full discharge of any liability or obligation of BWW.

     6.5 Withholding. BWW shall have the right to deduct from all amounts
payable by BWW to a participant any state or federal taxes required by law to be
withheld with respect to amounts credited to or payable from the participant's
account.

     6.6 No Additional Rights. No employee or other person shall have any claim
or right to receive benefits under or otherwise participate in the Plan, except
as provided in the Plan. Neither the Plan nor any action taken hereunder shall
be construed as giving any employee any right to be retained in the employ of
BWW, interfere with the right of BWW to discharge any employee at any time, give
BWW the right to require an employee to remain in its employ, or interfere with
an employee's right to terminate employment at any time. Neither the Plan nor
any action taken under the Plan shall be construed as changing an employee's
employment relationship with BWW.

     6.7 Plan Shall be Unfunded. The Plan shall at all times be entirely
unfunded, no action shall be taken at any time which would have the effect of
segregating assets of BWW for payment of any benefit hereunder, and no
participant or other person shall have any interest in any particular assets of
BWW by reason of the right to receive a benefit hereunder. Any participant or
other person shall have only the rights of a general unsecured creditor of BWW
with respect to any rights hereunder.


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     6.8 Compliance with Applicable Laws. The parties intend that the Plan
comply with the applicable provisions of the Code and the regulations
thereunder, with the applicable provisions of ERISA, as amended, and the
regulations thereunder, and with any provisions of the Securities Exchange Act
of 1934, as amended, that may be applicable. If, at a later date, these
provisions are construed in such a way as to make the Plan null and void, the
Plan shall be given effect in a manner that shall best carry out the parties'
purposes and intentions.

     6.9 Notices. Any notice, election or form to be delivered pursuant to the
Plan shall be given in writing and delivered, personally or by first-class mail,
postage prepaid, to BWW, participants, or any other person, as the case may be,
at their last known address.

     6.10 Headings. Headings and titles at the beginning of articles and
sections are for convenience of reference, shall not be considered a part of the
Plan, and shall not influence its construction.

     6.11 Amendment and Termination. The Board, and only the Board, may alter,
amend or terminate the Plan at any time; provided, however, that no amendment to
or termination of the Plan may alter, impair or reduce the value of any
participant's vested account prior to the effective date of such amendment or
termination without the written consent of any affected participant.

     6.12 Governing Law. The provisions of the Plan shall be construed and
enforced according to the laws of the State of Minnesota to the extent that such
laws are not preempted by any applicable federal law.


     Buffalo Wild Wings, Inc. has caused this Plan to be executed by its duly
authorized officer as of this 19th day of November, 1999. BUFFALO WILD WINGS,
INC.


                                       By /s/ Sally J. Smith
                                          --------------------------------------
                                          Its President
                                              ----------------------------------


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                               AMENDMENT NO. 1 TO
                            BUFFALO WILD WINGS, INC.
                      MANAGEMENT DEFERRED COMPENSATION PLAN

     The Buffalo Wild Wings, Inc. Management Deferred Compensation Plan (the
"Plan") was adopted effective May 20, 1999. The Board of Directors desires to
amend the Plan, pursuant to Section 6.11 thereof, to expand the group of
officers entitled to benefits under the Plan and to provide enhanced benefits
for certain participants.

     The Plan is hereby amended, effective January 1, 2002, as follows:

     1. Section 3.1 is amended in part by revising the second sentence thereof
to read as follows:

     "Each employee who thereafter becomes an executive officer or nonofficer
     vice president and each employee who becomes a nonofficer senior vice
     president on or after January 1, 2002, shall participate in the Plan on the
     effective date of his or her appointment or, in the case of a nonofficer
     senior vice president, effective on the later of his or her appointment to
     such position and January 1, 2002, and shall be eligible to accrue benefits
     under the Plan until he or she is no longer in such position."

     2. Section 4.1.2.1 is amended in part by replacing the phrase "executive
officer or nonofficer vice president" with the phrase "executive officer,
nonofficer vice president or, effective January 1, 2002, nonofficer senior vice
president."

     Except as amended herein, all provisions of the Plan shall remain in full
force and effect.

     Buffalo Wild Wings, Inc. has caused this Amendment to be executed by its
duly authorized officer as of this May day of 23, 2002.


                                       BUFFALO WILD WINGS, INC.

                                       By
                                          --------------------------------------
                                          Its
                                              ----------------------------------



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