Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is hereby entered into between
Buffalo Wild Wings, Incorporated, a Minnesota corporation (the "Company"), and
Xxxxx X. Xxxxx ("Executive").
PREAMBLE
Executive has been employed as President and Chief Executive Officer of
Buffalo Wild Wings, Inc., since July 25, 1996. The Company desires to continue
to have the benefit of Executive's experience and loyalty, and Executive desires
to provide services on the terms and conditions set forth below. The Executive
is a shareholder of the company and benefits either directly or indirectly from
the infusion of capital by the Investors (as that term is defined in the
Securities Purchase Agreement dated December 1, 1999).
AGREEMENT
1. Definitions.
The following capitalized terms used in this Agreement shall be defined as
follows:
Agreement shall mean this Agreement between the Company and Executive.
Base Salary shall mean the annual base salary payable to Executive pursuant
to Section 4(a) hereof.
Board shall mean the Board of Directors of the Company.
Cause shall mean termination of the Executive's employment with the Company
by the President because of (1) gross misconduct, dishonesty or disloyalty; (2)
willful and material breach of this Agreement by Executive; or (3) conviction or
entry of a plea of guilty or nolo contendere to any felony or to any misdemeanor
involving fraud, misrepresentation or theft.
Code shall mean the Internal Revenue Code of 1986, as amended from time to
time.
Company shall mean Buffalo Wild Wings, Incorporated, a Minnesota
corporation, any subsidiaries thereof, and any Successors or assigns.
Company 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 the Company
either uses or intends to use in the operation, management or franchising of
such restaurants, or any other business either conducted by the Company or that
the Company is contemplating conducting as of the Date of Termination.
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Competitive Business means any business which operates, manages or
franchises other sports-themed grill and bar restaurant businesses or any other
business either conducted by the Company or that the Company is contemplating
conducting as of the Date of Termination.
Confidential Information means any information or compilation of
information that Executive learns or develops during the course of employment
with the Company 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, discoveries, and may relate to such
matters as manufacturing processes, management systems and techniques and sales
and marketing plans and information.
Good Reason shall mean (1) a substantial reduction in the nature or status
of Executive's responsibilities hereunder; (2) a reduction by the Company in the
Base Salary of Executive except to the extent permitted by this Agreement; (3)
failure by the Company to allow Executive to participate to the full extent in
all plans, programs or benefits in accordance with this Agreement; and (4)
relocation of Executive's principal office more than 20 miles from its current
location. Notwithstanding the foregoing, "Good Reason" shall be deemed to occur
only if such event enumerated in (1) through (4) above has not been corrected by
the Company within two weeks of receipt of notice from Executive of the
occurrence of such event, which notice shall specifically describe such event.
Term shall mean the term of Executive's employment under Section 3 hereof.
Permanently Disabled shall mean permanently disabled in accordance with the
disability policy (as defined by the Company's Long-Term Disability Insurance
Plan) of the Company as in effect on the date of this Agreement and as evaluated
by sufficient documentation including doctors' statements, etc. as requested by
the Company.
Person shall mean an individual, partnership, corporation, estate or trust
or other entity.
President shall mean the individual designated as such by the Board of
Directors.
Successor shall mean any entity acquiring substantially all of the assets
of the Company or a corporation into which the Company is merged or with which
it is consolidated.
2. Employment and Duties.
(a) General. The Company hereby agrees to employ Executive as its President
and Chief Executive Officer upon the terms and conditions set forth in this
Agreement and Executive agrees to serve as the President and Chief Executive
Officer of the Company. Executive shall perform the duties and assume the
responsibilities and obligations contemplated by this position and shall perform
such other duties and undertake such other responsibilities and obligations,
consistent with this position, as the Board of Directors shall determine from
time to time.
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(b) Exclusive Services. The Executive shall (i) devote Executive's full
business time and attention and best efforts to the business and affairs of the
Company, (ii) use Executive's best efforts to promote and further the interests
of the Company, (iii) faithfully and diligently perform Executive's
responsibilities and duties hereunder; and (iv) act in a competent and
professional manner which reflects positively upon the Company.
(c) No Other Employment. Throughout the Term, Executive shall not, directly
or indirectly, render services to any other person or organization for which the
Executive receives compensation (excluding volunteer services and reasonable
compensation involved in serving as a director on any board of directors)
without the consent of the President or otherwise engage in activities which
would interfere significantly with the performance of Executive's duties
hereunder.
3. Term of Employment.
(a) Commencement. The term of this Agreement shall be effective as of
December 1, 1999, and may not be terminated except as expressly provided herein.
(b) Term. Unless extended by mutual consent or as provided in Section 3(c)
below, this Agreement shall terminate on the first (1st) anniversary of the
Effective Date (such one-year period being hereinafter referred to as the
"Term").
(c) Automatic Extension. Following the initial expiration date of the Term,
this Agreement shall be deemed extended from year to year ("Extension Year")
unless, no later than three (3) months prior to the end of the Term (or any
Extension Year), the Company or the Executive shall have notified the other
party in writing that the Company or the Executive does not elect to extend the
Term (or any Extension Year) past its then expiration date, or if the
Executive's employment is terminated for whatever reason.
4. Compensation and Other Benefits. Subject to the provisions of this Agreement,
the Company shall pay and provide the following compensation and other benefits
to Executive during the Term as compensation for services rendered hereunder.
(a) Base Salary. The Company shall pay to Executive a Base Salary per
annum, payable in accordance with the Company's standard payroll practices. The
Company shall be entitled to deduct or withhold all taxes and charges which the
Company may be required to deduct or withhold therefrom. The Base Salary will be
reviewed not less than annually by the Board and may be increased or reduced;
provided, however, that any reduction shall be permitted only if the Company
then reduces the base compensation of its executive employees generally and
shall not exceed the average percentage reduction for all such executive
employees.
(b) Other Plans. The Executive shall be entitled to participate in
additional Company stock option plans or other equity plans or programs, if any,
in which employees of the Company are eligible to participate generally as may
be determined by the Board of Directors.
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(c) Executive Benefit Plans. At all times during the Term, Executive shall,
unless prohibited by the Code or other applicable law, be eligible to
participate in pension and welfare plans and programs of the Company for
employees, currently existing or subsequently adopted, including the following:
(i) all qualified benefit plans and programs (e.g. defined
contribution, supplemental retirement and Section 401(k) plans,
long-term disability and life insurance plans and programs);
(ii) all hospitalization and medical plans and programs;
(iii) all retirement plans and programs (with the exception of the
Company's retirement life insurance plan); and
(iv) all deferred compensation programs.
5. Termination of Employment for Cause; Resignation; and Termination Caused by
Death or Permanent Disability.
(a) Compensation and Benefits. If Executive's employment is terminated by
the Company for Cause, if Executive resigns from employment hereunder, or if
Executive's employment is terminated as a result of death or Permanent
Disability, then Executive shall not be eligible to receive any compensation or
benefits, or to participate in any plans or programs under Section 4 hereof with
respect to future periods after the date of such termination or resignation
except for the right to receive benefits under any plan or program, to the
extent vested, in accordance with the terms of such plan or program and except
for benefits provided in accordance with customary practices of the Company at
Executive's expense (e.g., hospitalization and medical insurance).
(b) Date of Termination. The date of termination of Executive's employment
by the Company under this Section 5 shall be effective immediately after written
notice of termination, on the date of Executive's death, or on the date
Executive becomes Permanently Disabled. The date of resignation by Executive
under this Section 5 shall be one (1) month after receipt by the Company of
written notice of resignation, unless the Company agrees to a lesser period.
6. Termination of Employment Without Cause; Resignation for Good Reason; and
Failure to Extend Employment Agreement.
(a) Compensation and Benefits. If Executive's employment is terminated by
the Company without Cause, if Executive resigns for Good Reason, or if the
Company fails to extend this Agreement, Executive shall be entitled to receive
from the Company an amount equal to one year of Executive's Base Salary, payable
during the twelve months following the date of termination in accordance with
the Company's standard payroll practices. The Company shall be entitled to
deduct or withhold all taxes and charges which the Company may be required to
deduct or withhold therefrom.
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(b) Date of Termination. The date of termination of Executive's employment
by the Company under this Section 6 shall be one (1) month after receipt by
Executive of written notice of termination, written notice of resignation based
on Good Reason, or three (3) months after receipt by Executive of written notice
that the Company will not extend this Agreement.
7. Confidential Information. Executive agrees not to directly or indirectly use
or disclose Confidential Information for the benefit of anyone other than the
Company, either during or after employment, for as long as the information
retains the characteristics of Confidential Information described in Section 1
above.
8. Return of Documents and Property. All documents and tangible items provided
to Executive by the Company, or possessed by or created by Executive for use in
connection with Executive's employment, are the property of the Company and
shall be promptly returned to the Company on termination of employment together
with all copies, recordings, abstracts, notes or reproductions of any kind made
from or about the documents and tangible items or the information they contain.
9. Noncompetition. In consideration of Executive's rights under this Agreement,
including without limitation Section 6 hereof, Executive agrees that, from and
after the Effective Date and continuing until the one-year anniversary of
termination or cessation of Executive's employment with the Company, Executive
will not, individually or in any capacity with another legal entity:
(i) directly or indirectly, own any interest in, control, be employed
by or associated with, or render services to, any person, entity,
or subsidiary, subdivision, division, or joint venture of such
entity in connection with a Competitive Business within fifteen
(15) miles of any Company Business or within fifteen (15) miles
of any location in which the Company intends to actively operate
a Company Business (excepting passive holdings for investment
purposes of not more than one percent (1%) of the securities of
any company);
(ii) directly or indirectly, solicit any of the Company's present or
future employees for the purpose of hiring them or inducing them
to leave their employment with the Company;
(iii) directly or indirectly, solicit, attempt to solicit, interfere,
or attempt to interfere with the Company's relationship with its
customers or potential customers, suppliers, or franchisees on
behalf of Executive or any other person or entity engaged in the
of a Competitive Business.
10. Breach of the Noncompetition or Confidentiality Provisions of this
Agreement. In addition to any other relief or remedies afforded by law or in
equity, if Executive breaches Sections 8 or 10 of this Agreement, Executive
agrees that the Company shall be entitled, as a matter of right, to injunctive
relief in any court of competent jurisdiction plus reasonable attorneys' fees
for securing such relief. Executive recognizes and hereby admits that
irreparable damage will result to the Company if he violates or threatens to
violate the terms of Sections 8 or
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10 of this Agreement. This Section 11 shall not preclude the granting of any
other appropriate relief including, without limitation, money damages against
Executive for breach of Sections 8 or 10 of this Agreement.
11. Effect of Other Obligations. It is intended that the obligation of the
parties to perform the terms of this Agreement is unconditional and does not
depend on the performance or non-performance of any terms, duties or obligations
not specifically recited in this Agreement.
12. Binding Agreement. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto, any Successor to or assigns of the Company, and
Executive's heirs and the personal representative of Executive's estate.
13. Severability. If the final determination of a court of competent
jurisdiction declares, after the expiration of the time within which judicial
review (if permitted) of such determination may be perfected, that any term or
provision hereof is invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term
or provision shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
14. Amendment; Waiver. This Agreement may not be modified, amended or waived in
any manner except by an instrument in writing signed by both parties hereto. The
waiver by either party of compliance with any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any other provision
of this Agreement, or of any subsequent breach by such party of a provision of
this Agreement.
15. Governing Law. All matters affecting this Agreement, including the validity
thereof, are to be governed by, interpreted and construed in accordance with the
laws of the State of Minnesota.
16. Notices. Any notice hereunder by either party to the other shall be given in
writing by personal delivery or certified mail, return receipt requested. If
addressed to Executive, the notice shall be delivered or mailed to Executive at
the address specified under Executive's signature hereto, or if addressed to the
Company, the notice shall be delivered or mailed to the Company at its executive
offices to the attention of the Board of Directors of the Company. A notice
shall be deemed given, if by personal delivery, on the date of such delivery or,
if by certified mail, on the date shown on the applicable return receipt.
17. Supersedes Previous Agreements. This Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements and writings with respect
to the subject matter hereof, all such other negotiations, commitments,
agreements and writings will have no further force or effect, and the parties to
any such other negotiation, commitment, agreement or writing will have no
further rights or obligations thereunder.
18. Headings; Construction. The headings of Sections and paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement. This Agreement
shall be construed without regard to any
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presumption or other rule requiring construction hereof against the party
causing this Agreement to be drafted.
19. Benefit. Nothing in this Agreement, express or implied, is intended to
confer on any person other than the parties hereto or their respective
successors or assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its Chairman of the Board pursuant to the authority of its Board, and Executive
has executed this Agreement, effective as of December 1, 1999.
EXECUTIVE:
Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
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Signature
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Address
THE COMPANY:
BUFFALO WILD WINGS,
INCORPORATED
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Chairman of the Board
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