Employment Agreement - Buffalo Wild Wings Inc. and Linda G. Traylor
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement") is entered
into effective September 16, 2008 (the "Effective Date") by and between Buffalo
Wild Wings, Inc., a Minnesota corporation (the "Company"), and Linda G. Traylor,
a resident of Minnesota ("Executive").
BACKGROUND
A. Executive is currently employed by the Company as its Senior Vice
President, Human Resources. The Company desires to continue to employ Executive
under the terms and conditions set forth in this Agreement.
B. The Company and Executive are parties to an Employment Agreement dated
October 30, 2006 (the "Prior Agreement"), which the parties desire to amend and
restate in its entirety as set forth in this Agreement. The Company and
Executive are also parties to a Restricted Stock Unit Agreement dated January 1,
2007 (the "RSU Agreement").
C. In October 2004, the American Jobs Creation Act of 2004 (the "Act") was
enacted, Section 885 of which Act added new provisions to the Internal Revenue
Code pertaining to deferred compensation. The Treasury Department has issued
final regulations and guidances regarding the deferred compensation provisions
of the Act, which permit service providers and service recipients a transition
period to modify existing deferred compensation arrangements to bring them into
compliance with the Act.
D. The parties agree that it is in their mutual best interests to modify,
amend and clarify the terms and conditions of the Prior Agreement, as set forth
in this Agreement, with the full intention of complying with the Act so as to
avoid the additional taxes and penalties imposed under the Act.
E. Executive is a key member of the management of the Company and is
expected to devote substantial skill and effort to the affairs of the Company,
and the Company desires to recognize the significant personal contribution that
Executive makes and is expected to continue to make to further the best
interests of the Company and its shareholders.
F. It is desirable and in the best interests of the Company and its
shareholders to continue to obtain the benefits of Executive's services and
attention to the affairs of the Company. It is desirable and in the best
interests of the Company and its shareholders to provide inducement for
Executive (1) to remain in the service of the Company in the event of any
proposed or anticipated change in control of the Company and (2) to remain in
the service of the Company in order to facilitate an orderly transition in the
event of a change in control of the Company.
Page 1
<PAGE>
G. It is desirable and in the best interests of the Company and its
shareholders that Executive be in a position to make judgments and advise the
Company with respect to proposed changes in control of the Company without
regard to the possibility that Executive's employment may be terminated without
compensation in the event of certain changes in control of the Company.
H. In Executive's position, Executive will have access to confidential,
proprietary and trade secret information of the Company. It is desirable and in
the best interests of the Company and its shareholders to protect confidential,
proprietary and trade secret information of the Company, to prevent unfair
competition by former executives of the Company following separation of their
employment with the Company and to secure cooperation from former executives
with respect to matters related to their employment with the Company.
AGREEMENT
In consideration of the foregoing premises and the respective agreements of
the Company and Executive set forth below, the Company and Executive, intending
to be legally bound, agree as follows:
1. TERM. The term of Executive's employment under this Agreement shall
commence on the Effective Date and shall continue in effect until the last day
of the Company's fiscal year 2009, unless earlier terminated in accordance with
Section 9 of this Agreement. Thereafter, unless earlier terminated in accordance
with Section 9 hereof, the term of Executive's employment with the Company shall
be automatically extended for successive one-year periods, each ending on the
last day of the Company's fiscal year, unless either party gives written notice
to the other party at least four (4) months prior to the expiration of such term
that such party elects not to extend the term of this Agreement. The term of
Executive's employment, beginning on the Effective Date of this Agreement,
together with any automatic extensions thereof, shall collectively be the
"Term."
2. POSITION AND DUTIES. During Executive's employment under this Agreement,
Executive will have the following position, duties and responsibilities:
(a) Position with the Company. Executive will serve as Senior Vice
President, Human Resources of the Company, or in such other executive position
of a similar nature, and will perform such duties and responsibilities as the
Chief Executive Officer and President of the Company (the "CEO") may assign
Executive from time to time.
(b) Performance of Duties and Responsibilities. Executive will serve the
Company faithfully and to the best of Executive's ability and will devote
Executive's full working time, attention, and efforts to the business of the
Company. Executive will report to the CEO or CEO's designee. Executive will
follow and comply with applicable policies and procedures adopted by the Company
from time to time, including without limitation policies relating to business
ethics, conflict of interest, non-discrimination, confidentiality and protection
of trade secrets, and insider trading. Executive will not engage in other
employment or other material business activity, except as approved in writing by
the CEO. Executive hereby represents and confirms that Executive is under no
contractual or legal commitments that would prevent Executive from fulfilling
Executive's duties and responsibilities as set forth in this Agreement.
Page 2
<PAGE>
3. COMPENSATION. During Executive's employment under this Agreement,
Executive will be provided with the following compensation and benefits:
(a) Base Salary. The Company will pay to Executive for services provided
hereunder a base salary paid in accordance with the Company's normal payroll
policies and procedures. The Board of Directors of the Company (or any
authorized committees of the Board, together hereafter the "Board") will review
Executive's performance on an annual basis and determine any adjustments to
Executive's base salary in its sole discretion; provided, however, that any
reduction shall be permitted only if the Company then reduces the base
compensation of all its executive officers generally and shall not exceed the
average percentage reduction for all such executive officers.
(b) Incentive Compensation. Executive will be eligible to participate in
such programs under the Buffalo Wild Wings, Inc. Cash Incentive Plan as
determined by the Board and in accordance with the terms, as may be amended and
in effect from time to time (the "CIP").
(c) Equity. Executive will be eligible to participate in such programs
under the Buffalo Wild Wings, Inc. 2003 Equity Incentive Plan as determined by
the Board and in accordance with the terms of such plan as may be in effect from
time to time.
(d) Employee Benefits. Executive will be entitled to participate in all
employee benefit plans and programs generally available to executive employees
of the Company, to the extent that Executive meets the eligibility requirements
for each individual plan or program. Executive's participation in any plan or
program will be subject to the provisions, rules, and regulations of, or
applicable to, the plan or program. The Company provides no assurance as to the
adoption or continuation of any particular employee benefit plan or program.
(e) Expenses. The Company will reimburse Executive for all reasonable
and necessary out-of-pocket business, travel, and entertainment expenses
incurred by Executive in the performance of Executive's duties and
responsibilities to the Company during the Term. Such reimbursement shall be
subject to the Company's normal policies and procedures for expense
verification, documentation, and reimbursement; provided, however, that
Executive shall submit verification of expenses within 30 days after the date
the expense was incurred, and the Company shall reimburse Executive for such
expenses eligible for reimbursement within 30 days thereafter.
Page 3
<PAGE>
4. AMENDMENT OF RSU AGREEMENT. Simultaneous with the execution of this
Agreement, Executive and the Company will execute an amendment to the RSU
Agreement, in the form attached to this Agreement as Exhibit A.
5. CONFIDENTIAL INFORMATION. Except as authorized in writing by the Board
or as necessary in carrying out Executive's responsibilities for the Company,
Executive will not at any time divulge, furnish, or make accessible to anyone or
use in any way, any confidential, proprietary, or secret knowledge or
information of the Company that Executive has acquired or will acquire about the
Company, whether developed by himself or by others, concerning (i) any trade
secrets, (ii) any confidential, proprietary, or secret recipes, designs,
inventions, discoveries, programs, processes, formulae, plans, devices, or
material (whether or not patented or patentable) directly or indirectly useful
in any aspect of the business of the Company, (iii) any customer or supplier
lists, (iv) any confidential, proprietary, or secret development or research
work, (v) any strategic or other business, marketing, or sales plans, systems or
techniques, (vi) any financial data or plans, or (vii) any other confidential or
proprietary information or secret aspects of the business of the Company.
Executive acknowledges that the above-described knowledge and information
constitute a unique and valuable asset of the Company and represent a
substantial investment of time and expense 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 will refrain from intentionally committing any acts that
would materially reduce, and shall take reasonable steps to protect, the value
of such knowledge and information to the Company. The foregoing obligations of
confidentiality shall not apply to any knowledge or information that (i) at the
time of Executive's use or disclosure is generally publicly known, other than as
a direct or indirect result of the breach by Executive of this Agreement, (ii)
is independently made available to Executive in good faith by a third party who
has not violated a confidential relationship with the Company, or (iii) is
required to be disclosed by law or legal process. Executive understands and
agrees that Executive's obligations under this Agreement to maintain the
confidentiality of the Company's confidential information are in addition to any
obligations of Executive under applicable statutory or common law.
6. VENTURES. If, during Executive's employment with the Company, Executive
participates in the planning or implementing of any project, program, or venture
involving the Company, all rights in such project, program, or venture belong to
the Company. Except as approved in writing by the Board, Executive will not be
entitled to any interest in any such project, program, or venture or to any
commission, finder's fee, or other compensation in connection therewith.
Executive will have no interest, direct or indirect, in any customer or supplier
that conducts business with the Company. Ownership by Executive, as a passive
investment, of less than one percent of the outstanding shares of capital stock
of any corporation listed on a national securities exchange or publicly traded
in the over-the-counter market shall not constitute a breach of this Section 6.
Page 4
<PAGE>
7. INTELLECTUAL PROPERTY.
(a) Disclosure and Assignment. As of the Effective Date, Executive
hereby transfers and assigns to the Company (or its designee) all right, title,
and interest of Executive in and to every idea, concept, invention, and
improvement (whether patented, patentable or not) conceived or reduced to
practice by Executive whether solely or in collaboration with others while
Executive is employed by the Company, and all copyrighted or copyrightable
matter created by Executive whether solely or in collaboration with others while
Executive is employed by the Company, in each case, that relates to the
Company's business (collectively, "Creations"). Executive shall communicate
promptly and disclose to the Company, in such form as the Company may request,
all information, details, and data pertaining to each Creation. Every
copyrightable Creation, regardless of whether copyright protection is sought or
preserved by the Company, shall be a "work made for hire" as defined in 17
U.S.C. ss. 101, and the Company shall own all rights in and to such matter
throughout the world, without the payment of any royalty or other consideration
to Executive or anyone claiming through Executive.
(b) Trademarks. All right, title, and interest in and to any and all
trademarks, trade names, service marks, and logos adopted, used, or considered
for use by the Company during Executive's employment (whether or not developed
by Executive) to identify the Company's business or other goods or services
(collectively, the "Marks"), together with the goodwill appurtenant thereto, and
all other materials, ideas, or other property conceived, created, developed,
adopted, or improved by Executive solely or jointly during Executive's
employment by the Company and relating to its business shall be owned
exclusively by the Company. Executive shall not have, and will not claim to
have, any right, title, or interest of any kind in or to the Marks or such other
property.
(c) Documentation. Executive shall execute and deliver to the Company
such formal transfers and assignments and such other documents as the Company
may request to permit the Company (or its designee) to file and prosecute such
registration applications and other documents it deems useful to protect or
enforce its rights hereunder. Any patentable invention relating to the Company's
business and disclosed by Executive prior to the first anniversary of the
effective date of Executive's termination of employment shall be deemed to be
governed by the terms of this Section 7 unless proven by Executive to have been
first conceived and made after such termination date.
(d) Non-Applicability. Executive is hereby notified that this Section 7
does not apply to any invention for which no equipment, supplies, facility,
confidential information, or other trade secret information of the Company was
used and which was developed entirely on Executive's own time, unless (1) the
invention relates (a) directly to the business of the Company or (b) to the
Company's actual or demonstrably anticipated research or development, or (2) the
invention results from any work performed by Executive for the Company.
Page 5
<PAGE>
8. NONCOMPETITION AND NONSOLICITATION COVENANTS.
(a) Agreement Not to Compete. During Executive's employment with the
Company and for a period of twelve (12) consecutive months from and after the
termination of Executive's employment, whether such termination is with or
without Cause, is at the instance of Executive or the Company or occurs before
or after expiration of the Term, Executive will not, directly or indirectly, in
any manner or capacity, including without limitation as a proprietor, principal,
agent, partner, officer, director, investor, stockholder, employee, member of
any association, consultant, or otherwise, engage or participate in any
Competitive Business. "Competitive Business" means any person, entity or
business operation (other than the Company) that operates, manages or
franchises, in the United States (i) a sports-themed restaurant that operates,
manages or franchises two or more restaurants, markets the public viewing of
sports and has alcohol sales of 20% or more, (ii) a restaurant that operates,
manages or franchises two or more restaurants and features chicken wings that
account for 10% or more of food sales, or (iii) any other business concept being
operated by or under consideration by the Company as of the date of the
Executive's employment termination. Ownership by Executive, as a passive
investment, of less than one percent of the outstanding shares of capital stock
of any corporation listed on a national securities exchange or publicly traded
in the over-the-counter market shall not constitute a breach of this Section
8(a).
(b) Agreement Not to Hire. During Executive's employment with the
Company and for a period of twelve (12) consecutive months from and after the
termination of Executive's employment, whether such termination is with or
without Cause, is at the instance of Executive or the Company or occurs before
or after expiration of the Term, Executive will not, directly or indirectly, in
any manner or capacity, including without limitation as a proprietor, principal,
agent, partner, officer, director, investor, stockholder, employee, member of
any association, consultant, or otherwise, hire, engage, or solicit any person
who is then an employee of the Company at a director level or above, or who was
such an employee of the Company at any time during the six-month period
immediately preceding Executive's termination of employment.
(c) Agreement Not to Solicit. During Executive's employment with the
Company and for a period of twelve (12) consecutive months from and after the
termination of Executive's employment, whether such termination is with or
without Cause, is at the instance of Executive or the Company or occurs before
or after expiration of the Term, Executive will not, directly or indirectly, in
any manner or capacity including without limitation as a proprietor, principal,
agent, partner, officer, director, stockholder, employee, member of any
association, consultant, or otherwise, solicit, request, advise, or induce any
current or potential customer, supplier, vendor, franchisee or other business
contact of the Company to cancel, curtail, or otherwise change its relationship
adversely to the Company, or interfere in any manner with the relationship
between the Company and any of its customers, suppliers, vendors, franchisees or
other business contacts.
Page 6
<PAGE>
(d) Modification. If the duration of, the scope of, or any business
activity covered by, any provision of this Section 8 exceeds that which is valid
and enforceable under applicable law, such provision will be construed to cover
only that duration, scope, or activity that is determined to be valid and
enforceable. Executive hereby acknowledges that this Section 8 will be construed
so that its provisions are valid and enforceable to the maximum extent, not
exceeding its express terms, possible under applicable law.
(e) No Adequate Remedy at Law. Executive hereby acknowledges that the
provisions of this Section 8 are reasonable and necessary to protect the
legitimate interests of the Company and that any violation of this Section 8 by
Executive will cause substantial and irreparable harm to the Company to such an
extent that monetary damages alone would be an inadequate remedy therefor.
Accordingly, in the event of any actual or threatened breach of any such
provisions, the Company will, in addition to any other remedies it may have, be
entitled to injunctive and other equitable relief to enforce such provisions,
and such relief may be granted without the necessity of proving actual monetary
damages.
9. TERMINATION OF EMPLOYMENT.
(a) The Executive's employment with the Company under this Agreement
will terminate upon:
(i) Expiration of the Term following notice of non-renewal pursuant to
Section 1 of this Agreement;
(ii) The Company providing written notice to Executive of the
termination of Executive's employment, effective as of the date stated in
such notice;
(iii) The Company's receipt of Executive's written resignation from
the Company, effective not earlier than 30 days after delivery of such
written notice of resignation, provided that the Board may waive such
notice or relieve Executive of Executive's duties during such notice
period;
(iv) Executive's Disability; or
(v) Executive's death.
(b) The date upon which Executive's termination of employment with the
Company is effective is the "Termination Date." For purposes of Section 10 of
this Agreement only, the Termination Date shall mean the date on which a
"separation from service" has occurred for purposes of Section 409A of the
Internal Revenue Code and the regulations and guidance thereunder (the "Code").
Page 7
<PAGE>
10. PAYMENTS UPON INVOLUNTARY TERMINATION WITHOUT CAUSE OR RESIGNATION FOR
GOOD REASON. If Executive's employment with the Company is terminated (i)
involuntarily at the initiative of the Company without Cause (including
termination upon expiration of the Term following notice of non-renewal by the
Company pursuant to Section 1) or (ii) on the initiative of Executive for Good
Reason such that Executive's Termination Date occurs within six months after the
first occurrence of a condition giving rise to Good Reason (as described in
Section 14(d)(i) - (iv) below), then, unless such Termination Date occurs upon
or within one year following a Change in Control, in addition to such base
salary and any incentive compensation for the last completed fiscal year that
has been earned but not paid to Executive as of the Termination Date, the
Company shall provide to Executive the severance payments and benefits set forth
in Sections 10(a), (b), (c) and (d) below, subject to the conditions in Section
12:
(a) Base Salary Continuation. The Company shall pay to Executive an
amount equal to six months of Executive's base salary in effect as of the
Termination Date, but not to exceed a maximum amount under this Section 10(a) of
two times the lesser of:
(i) The Code ss. 401(a)(17) compensation limit for the year in which
the Termination Date occurs; or
(ii) Executive's annualized compensation based upon the annual rate of
pay for services to the Company for the calendar year prior to the calendar
year in which the Termination Date occurs (adjusted for any increase during
that year that was expected to continue indefinitely if Executive had not
separated from service).
Subject to Section 12, such salary continuation shall be paid to Executive in
accordance with the Company's regular payroll schedule, at the regular base
salary payroll rate in effect as of the Termination Date, commencing on the
first regular payroll date of the Company that occurs following the Termination
Date and continuing for six months. The Company and Executive intend the
payments under this Section 10(a) to be a "separation pay plan due to
involuntary separation from service" under Treas. Reg. ss. 1.409A-1(b)(9)(iii).
(b) Supplemental Salary Continuation. The Company shall pay to Executive
an additional amount equal to (i) if Executive has been employed continuously
with the Company as of the Termination Date for less than five years, six months
of Executive's base salary in effect as of the Termination Date, or (ii) if
Executive has been employed continuously with the Company as of the Termination
Date for five years or more, twelve months of Executive's base salary in effect
as of the Termination Date. Subject to Section 12, such supplemental salary
continuation shall be paid to Executive in accordance with the Company's regular
payroll schedule, at the regular base salary payroll rate in effect as of the
Termination Date, commencing on the first regular payroll date of the Company
that occurs following the completion of all payments under Section 10(a) and
continuing for six months (or twelve months as applicable if Executive has been
employed continuously for five years or more). The Company and Executive intend
the payments under this section 10(b) to be deferred compensation payable in
compliance with the requirements of Section 409A of the Code.
Page 8
<PAGE>
(c) Incentive Pay. If the Termination Date is any day other than the
last day of the plan year under the CIP, the Company shall pay to Executive an
amount equal to a prorated portion of the award that would have been payable to
Executive under the CIP for such plan year based on actual performance towards
objectives, prorated based on the number of days of the plan year occurring
through the Termination Date divided by 365. Any individual performance
objectives applicable to Executive for the fiscal year shall be deemed to have
been met at a level resulting in payout of 50% of the award amount allocated to
such individual objectives. The payment shall be paid to Executive at the same
time and in the same manner as CIP awards are paid to other executives of the
Company pursuant to the CIP, but not later than 2 1/2 months following the end
of the fiscal year in which the Termination Date occurs, provided that Executive
has satisfied the conditions set forth in Section 12. Any separation pay that
may become payable pursuant to this Section 10(c) is intended to be a short-term
deferral not subject to the requirements of Section 409A of the Code.
(d) Medical Benefits. If Executive (and/or Executive's covered
dependents) is eligible for and properly elects to continue group medical
insurance coverage, as in place immediately prior to the Termination Date, and
if Executive continues to pay the employee portion of such medical coverage, the
Company will pay or reimburse the employer portion of such coverage until the
earlier of (i) (A) if Executive has been employed continuously with the Company
as of the Termination Date for less than five years, twelve months after the
Termination Date, or (B) if Executive has been employed continuously with the
Company as of the Termination Date for five years or more, eighteen months after
the Termination Date, or (ii) the date Executive (and Executive's covered
dependents) are no longer eligible for medical continuation coverage under
COBRA.
11. PAYMENT TIMING FOLLOWING CHANGE IN CONTROL. If Executive's employment
with the Company is terminated (i) involuntarily at the initiative of the
Company without Cause (including termination upon expiration of the Term
following notice of non-renewal by the Company pursuant to Section 1) or (ii) on
the initiative of Executive for Good Reason such that Executive's Termination
Date occurs within six months after the first occurrence of a condition giving
rise to Good Reason (as described in Section 14(d)(i) - (iv) below), and if such
Termination Date occurs upon or within one year following a Change in Control,
then, in addition to such base salary and any incentive compensation for the
last completed fiscal year that has been earned but not paid to Executive as of
the Termination Date, the Company shall provide to Executive the severance
payments and benefits set forth in Sections 10(a), (b), (c) and (d) above,
subject to the conditions in Section 12, except that the salary continuation
payments set forth in Sections 10(a) and (b) shall be paid to Executive in a
single lump sum as soon as administratively feasible following the Termination
Date, but in no event more than 2 1/2 months following the Termination Date. Any
such lump sum payment pursuant to this Section 11 is intended to be a short-term
deferral not subject to the requirements of Section 409A of the Code.
Page 9
<PAGE>
12. CONDITIONS. Notwithstanding anything above to the contrary, the Company
will not be obligated to make any payments to Executive under Section 10 or
Section 11 hereof unless: Executive has signed a release of claims in favor of
the Company and its affiliates and related entities, and their directors,
officers, insurers, employees and agents, in a form prescribed by the Company
(but such release will not require Executive to release any rights under any
qualified employee benefit plan of the Company in which Executive is a
participant or any rights to indemnification as an employee, officer, or
director of the Company); all applicable rescission periods provided by law for
releases of claims shall have expired and Executive shall have signed and not
rescinded the release of claims; and Executive is in material compliance with
the terms of this Agreement as of the dates of such payments.
13. OTHER TERMINATION. If Executive's employment with the Company is
terminated:
(a) by reason of Executive's abandonment of Executive's employment or
resignation for any reason other than Good Reason;
(b) by reason of termination of Executive's employment by the Company
for Cause;
(c) upon death or Disability; or
(d) upon or following expiration of the Term following notice of
non-renewal by Executive pursuant to Section 1,
then the Company will pay to Executive, or Executive's beneficiary or
Executive's estate, as the case may be, such base salary that has been earned
but not paid to Executive as of the Termination Date, payable pursuant to the
Company's normal payroll practices and procedures, and such incentive
compensation that has been earned as of the Termination Date, payable as
provided in the applicable plans or programs.
14. DEFINITIONS.
(a) Cause. "Cause" hereunder means:
(i) Executive's commission of any act constituting a felony, or
Executive's conviction or guilty or no contest plea to any criminal
misdemeanor involving fraud, misrepresentation or theft;
(ii) gross misconduct or any act of fraud, disloyalty or dishonesty by
Executive related to or connected with Executive's employment by the
Company or otherwise likely to cause material harm to the Company or its
reputation;
Page 10
<PAGE>
(iii) a material violation by Executive of the Company's policies or
codes of conduct; or
(iv) the willful or material breach of this Agreement by Executive.
(b) Change in Control. "Change in Control" hereunder shall mean any
change in effective control or ownership of the Company that (i) constitutes a
Change in Control as such term is defined under the Buffalo Wild Wings, Inc.
2003 Equity Incentive Plan, as in effect from time to time, and (ii) constitutes
a change in ownership or effective control, or a change in the ownership of a
substantial portion of the assets, of the Company under Code Section 409A.
(c) Disability. "Disability" hereunder means any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than six months, where such
impairment causes the Executive to be unable to perform the duties of
Executive's position of employment or any substantially similar position of
employment.
(d) Good Reason. "Good Reason" hereunder means any of the following
conditions arising without the consent of Executive, provided that Executive has
first given written notice to the Company of the existence of the condition
within 90 days of its first occurrence, and the Company has failed to remedy the
condition within 30 days thereafter:
(i) a material diminution in the Executive's base salary (other than a
reduction permitted by Section 3(a) above in the case of a general
reduction for all executive officers);
(ii) a material diminution in the Executive's authority, duties, or
responsibilities;
(iii) relocation of Executive's principal office more than 50 miles
from its current location; or
(iv) any other action or inaction that constitutes a material breach
by the Company of any terms or conditions of this Agreement, which breach
has not been caused by Executive.
Page 11
<PAGE>
15. OTHER POST-TERMINATION OBLIGATIONS.
(a) Other Obligations. In the event of termination of Executive's
employment, the sole obligation of the Company under this Agreement will be its
obligation to make the payments called for by Sections 10, 11 or 13 hereof, as
the case may be, and the Company will have no other obligation to Executive or
to Executive's beneficiary or Executive's estate, except as otherwise provided
by law or by the terms of any employee benefit plans or programs, or of any
incentive compensation or stock ownership plans, then maintained by the Company
in which Executive participates.
(b) Immediately upon termination of Executive's employment with the
Company for any reason, Executive will resign all positions then held as a
director or officer of the Company and of any subsidiary, parent or affiliated
entity of the Company.
(c) Upon termination of Executive's employment with the Company,
Executive shall promptly deliver to the Company any and all Company records and
any and all Company property in Executive's possession or under Executive's
control, including without limitation manuals, books, blank forms, documents,
letters, memoranda, notes, notebooks, reports, printouts, computer disks, flash
drives or other digital storage media, source codes, data, tables or
calculations and all copies thereof, documents that in whole or in part contain
any trade secrets or confidential, proprietary or other secret information of
the Company and all copies thereof, and keys, access cards, access codes,
passwords, credit cards, personal computers, handheld personal computers or
other digital devices, telephones and other electronic equipment belonging to
the Company.
(d) Following termination of Executive's employment with the Company for
any reason, Executive will, upon reasonable request of the Company or its
designee, cooperate with the Company in connection with the transition of
Executive's duties and responsibilities for the Company; consult with the
Company regarding business matters that Executive was directly and substantially
involved with while employed by the Company; and be reasonably available, with
or without subpoena, to be interviewed, review documents or things, give
depositions, testify, or engage in other reasonable activities in connection
with any litigation or investigation, with respect to matters that Executive
then has or may have knowledge of by virtue of Executive's employment by or
service to the Company or any related entity.
(e) Executive will not malign, defame or disparage the reputation,
character, image, products or services of the Company, or the reputation or
character of the Company's directors, officers, employees or agents. Officers or
Directors of the Company shall not make any public statement that disparages or
defames Executive's reputation or character. Nothing in this Section 15(e) shall
be construed to limit or restrict Executive or the Company from taking any
action that such party in good faith reasonably believes is necessary to fulfill
such party's fiduciary obligations to the Company, from making any statement
internal to the Company's operations for legitimate business reasons, or from
providing truthful information in connection with any legal proceeding,
government investigation or other legal matter.
Page 12
<PAGE>
16. MISCELLANEOUS.
(a) Tax Withholding. The Company may withhold from any amounts payable
under this Agreement such federal, state and local income and employment taxes
as the Company shall determine are required to be withheld pursuant to any
applicable law or regulation. The Company makes no assurances to Executive as to
the tax treatment of any payments hereunder and, except with respect to tax
amounts withheld by the Company, Executive will be responsible for payment and
remittance of all taxes due with respect to compensation received or imputed
under this Agreement.
(b) Section 409A. This Agreement and the payments hereunder are intended
to be exempt from or to satisfy the requirements of Section 409A(a)(2), (3) and
(4) of the Internal Revenue Code of 1986, as amended, including current and
future guidance and regulations interpreting such provisions, and should be
interpreted accordingly.
(c) Governing Law. All matters relating to the interpretation,
construction, application, validity, and enforcement of this Agreement will be
governed by the laws of the State of Minnesota without giving effect to any
choice or conflict of law provision or rule, whether of the State of Minnesota
or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota.
(d) Jurisdiction and Venue. Executive and the Company consent to
jurisdiction of the courts of the State of Minnesota and/or the United States
District Court, District of Minnesota, for the purpose of resolving all issues
of law, equity, or fact arising out of or in connection with this Agreement. Any
action involving claims of a breach of this Agreement must be brought in such
courts. Each party consents to personal jurisdiction over such party in the
state and/or federal courts of Minnesota and hereby waives any defense of lack
of personal jurisdiction. Venue, for the purpose of all such suits, will be in
Hennepin County, State of Minnesota.
(e) Waiver of Jury Trial. To the extent permitted by law, Executive and
the Company waive any and all rights to a jury trial with respect to any dispute
arising out of or relating to this Agreement.
(f) Entire Agreement. This Agreement contains the entire agreement of
the parties relating to Executive's employment with the Company and supersedes
all prior agreements and understandings with respect to such subject matter,
including without limitation the Prior Agreement, and the parties hereto have
made no agreements, representations, or warranties relating to the subject
matter of this Agreement that are not set forth herein. The RSU Agreement
remains in full force and effect as amended.
Page 13
<PAGE>
(g) No Violation of Other Agreements. Executive hereby represents and
agrees that neither (i) Executive's entering into this Agreement nor (ii)
Executive's carrying out the provisions of this Agreement, will violate any
other agreement (oral, written, or other) to which Executive is a party or by
which Executive is bound.
(h) Assignment. This Agreement shall not be assignable, in whole or in
party, by either party without the written consent of the other party, except
that the Company may, without the consent of Executive, assign or delegate all
or any portion of its rights and obligations under this Agreement to any
corporation or other business entity (i) with which the Company may merge or
consolidate, (ii) to which the Company may sell or transfer all or substantially
all of its assets or capital stock, or (iii) of which 50% or more of the capital
stock or the voting control is owned, directly or indirectly, by the Company or
which is under common ownership or control with the Company. Any such current or
future successor, parent, affiliate or other joint venture partner to which any
right or obligation has been assigned or delegated shall be deemed to be the
"Company" for purposes of such rights or obligations of this Agreement.
(i) Amendments. No amendment or modification of this Agreement will be
effective unless made in writing and signed by the parties hereto.
(j) Counterparts. This Agreement may be executed by facsimile signature
and in any number of counterparts, and such counterparts executed and delivered,
each as an original, will constitute but one and the same instrument.
(k) Severability. Subject to Section 8(d) hereof, to the extent that any
portion of any provision of this Agreement is held invalid or unenforceable, it
will be considered deleted herefrom and the remainder of such provision and of
this Agreement will be unaffected and will continue in full force and effect.
(l) Survival. The provisions of this Agreement that by their terms or
implication extend beyond the Term, including without limitation Sections 5, 7,
8, 15, and 16 of this Agreement, shall survive the termination or expiration of
the Term and termination of Executive's employment with the Company for any
reason.
(m) Captions and Headings. The captions and paragraph headings used in
this Agreement are for convenience of reference only and will not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
(n) Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
(i) delivered personally; (ii) sent by facsimile or other similar electronic
device with confirmation; (iii) delivered by reliable overnight courier; or (iv)
three business days after being sent by registered or certified mail, postage
prepaid, and in the case of (iii) and (iv) addressed as follows:
Page 14
<PAGE>
If to the Company: Buffalo Wild Wings, Inc.
5500 Wayzata Boulevard, Suite 1600
Minneapolis, MN 55416
Fax: (952) 593-9787
Attention: Chief Executive Officer and President
Copy to: EVP, General Counsel and Secretary
If to Executive: Latest address of Executive in the formal records of
the Company
Executive and the Company have executed this Agreement effective as of the
date set forth in the first paragraph.
BUFFALO WILD WINGS, INC.
By: /s/ Sally J. Smith
------------------------------------------------
Sally J. Smith
Its: President and Chief Executive Officer
/s/ Linda G. Traylor
---------------------------------------------------
Linda G. Traylor
Page 15