Exhibit 10.2
Wilson L. Craft
FAMOUS DAVE’S OF AMERICA, INC.
RESTRICTED STOCK UNIT AGREEMENT
     This Restricted Stock Unit Agreement (this “Agreement”), made effective as
of March 21, 2008, is by and between Famous Dave’s of America, Inc., a Minnesota
corporation (the “Company”), and Wilson L. Craft (“Employee”).
BACKGROUND
     A. Employee has been hired to serve as an employee of the Company (which
for purposes of this Agreement shall also include the Company’s direct and
indirect wholly-owned subsidiaries) or the Company desires to induce Employee to
continue to serve the Company as an employee.
     B. The Company has adopted the 2005 Stock Incentive Plan (the “Plan”)
pursuant to which shares of common stock of the Company (“Shares”) have been
reserved for issuance under the Plan. Any capitalized terms used, but not
defined, in this Agreement are defined in the Plan.
     C. Pursuant to the Plan, as amended in 2008, the Company is willing to
grant to Employee certain restricted stock units that may result in the issuance
to Employee of a certain number of Shares, if his rights to those units and
Shares become vested as provided below, at the applicable time specified in this
Agreement.
     D. The terms of this Agreement are intended to comply with the requirements
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
Code Section 409A and the Treasury Regulations issued thereunder are referred to
in this Agreement as “Section 409A.”
AGREEMENT
     Now, Therefore, the parties hereto agree as follows:
     1. Grant of Units. Subject to Section 11 below, the Company hereby grants
to Employee One Hundred Thousand (100,000) restricted stock units (the “Award
Units”), each of which represents the right to receive one Share from the
Company, plus any Added Units credited to Employee pursuant to the last
paragraph of this Section 1, subject to the terms and provisions of this
Agreement and the Plan.
     “Unit Account” means an account established and maintained by the Company,
solely for accounting purposes, to record of the number of Award Units and any
Added Units (collectively, “Units”) credited to Employee by the Company under
this Agreement.
     As long as any Units remain credited to the Unit Account, the Company shall
credit to the Unit Account, on each date that the Company pays a cash dividend
to holders of Shares generally, an additional number of Units (“Added Units”)
equal to the total number of whole Units previously credited to the Unit Account
under this Agreement, multiplied by the dollar amount of the cash dividend per
Share paid by the Company on that date, and divided by the Fair Market Value (as
defined in the Plan) of one Share on that date. Any fractional Added Unit
resulting from such calculation shall be included in the Added Units.
     2. Vesting and Forfeiture of Units. The total of all Units credited to the
Unit Account from time to time shall become vested ratably over a period of
three (3) years in equal annual installments, beginning on

 

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the third anniversary of the date of this Agreement and continuing on each
subsequent anniversary of that date until all of the Units have become vested or
forfeited, as set forth in the following schedule:

                 
Anniversary
  Vested Percentage   Forfeited Percentage
 
               
Before third anniversary
    0 %     100 %
 
               
After third Anniversary, but
before fourth anniversary
  33 and 1/3%   66 and 2/3%
 
               
After fourth anniversary, but
before fifth anniversary
  66 and 2/3%   33 and 1/3%
 
               
After fifth anniversary
    100 %   None

     Notwithstanding the foregoing vesting schedule, 100% of the then unvested
Units credited to the Unit Account shall become vested upon a “Change of
Control” as defined in Employee’s written employment agreement with the Company.
     Upon Employee’s termination of employment with the Company (for any reason
or no reason, and regardless of whether such termination is voluntary or
involuntary on the part of Employee), Employee shall forfeit the percentage of
all Units that have been credited to the Unit Account but are not then vested.
     3. Form and Timing of Payment. Upon the earlier to occur of:
     (a) [not applicable], or
     (b) date of Employee’s termination of employment with the Company (for any
reason or no reason, and regardless of whether such termination is voluntary or
involuntary on the part of Employee)
     (as applicable, the “Distribution Event”); the Company shall register on
the books of the Company and cause the transfer agent and registrar of its
Shares to issue one or more certificates in Employee’s name evidencing a number
of Shares equal to the number of vested Units then credited to the Unit Account,
subject to any tax withholding required under Section 7 and rounded up to the
nearest whole Share; and those Shares shall be delivered to Employee as soon as
administratively practicable following the occurrence of the Distribution Event
(but no later than the end of the year in which the Distribution Event occurs).
Any Units that are not vested as of the date of the Distribution Event shall be
automatically forfeited. If Employee dies before the delivery of any Shares to
which Employee is entitled under this Agreement, the Shares shall be delivered
to the Beneficiary or Beneficiaries designated under Section 9. Whenever the
Company shall become obligated to issue Shares in respect of a Unit subject to
this Agreement, all rights of Employee with respect to such Unit, other than the
right to such issuance, shall terminate and be of no further force or effect and
such Unit shall be cancelled.
     Except as specifically permitted under Section 409A, neither the Company
(or the Board of Directors) nor Employee (or any Beneficiary) shall have the
right to have any of the Shares delivered before the time they are otherwise
scheduled to be delivered under this Agreement.
     4. Section 409A Compliance; Six Month Payment Delay if Employee is a
Specified Employee. Notwithstanding anything to the contrary herein, a
termination of employment must be a “separation from

 

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service” as defined in Section 409A to be deemed a Distribution Event under
Section 3. In addition, if Employee is a “specified employee” (as determined
under Section 409A), as of the date of Employee’s Separation from Service, no
Shares may be delivered to Employee by the Company under Section 3 before a date
that is at least six (6) months after the date of Employee’s Separation from
Service (or, if earlier, the date of Employee’s death).
     The Company shall apply the same “specified employee” definition for this
Agreement and all other non-qualified deferred compensation arrangements
(including without limitation employment agreements with separation pay or other
deferred compensation provisions) of the Company (and all employers included
with the Company as a single employer for this purpose pursuant to Section 409A)
that are governed by Section 409A and in which Employee and any others who would
become a “specified employee” due to such definition are participating.
     5. Copy of the Plan. By the execution of this Agreement, Employee
acknowledges receipt of a copy of the Plan, the terms of which are hereby
incorporated herein by reference and made a part hereof by reference as if set
forth in full.
     6. Continuation of Employment. Nothing contained in this Agreement shall be
deemed to grant Employee any right to continue in the employ of the Company for
any period of time or to any right to continue his or her present or any other
rate of compensation, nor shall this Agreement be construed as giving Employee,
Employee’s beneficiaries or any other person any equity or interests of any kind
in the assets of the Company or creating a trust of any kind or a fiduciary
relationship of any kind between the Company and any such person.
     7. Withholding of Tax. To the extent that the receipt of the Shares or the
lapse of any restrictions thereon results in income to Employee for federal or
state income tax purposes, Employee shall deliver to the Company at the time of
such receipt or lapse, as the case may be, such amount of money as the Company
may require to meet its withholding obligation under applicable tax laws or
regulations, and, if Employee fails to do so, the Company is authorized to
withhold from any cash or stock remuneration then or thereafter payable to
Employee any tax required to be withheld by reason of such resulting
compensation income.
     8. Designation of Beneficiary. Employee may designate one or more
“Beneficiaries” to receive all or any portion of the Shares that Employee may
become entitled to receive under Section 3, by giving the Company a signed
written notice of such designation on a form the Company may provide. Employee
may revoke or modify each such designation at any time by a further written
designation. Any such Beneficiary designation made by Employee shall be
automatically revoked if the Beneficiary dies before the death of Employee or,
if the Beneficiary is Employee’s spouse, if Employee’s marriage to that spouse
is dissolved while they are both alive. If no Beneficiary designation remains in
effect when Employee dies, the Beneficiary shall be the spouse of Employee, or
if no spouse of Employee is then living, the Beneficiary shall be Employee’s
estate or other legal representative.
     9. No Assignment of Units or Rights to Shares. Neither Employee nor any
Beneficiary shall have any right to assign, pledge or otherwise transfer any
Units or any right to receive Shares under this Agreement, except to the limited
extent permitted under the Plan. No creditor of Employee (or of any Beneficiary)
shall have any right to garnish or otherwise attach any Units or any right to
receive Shares under this Agreement. In the event of any attempted assignment,
pledge or other transfer, or attempted garnishment or attachment by a creditor,
the Company shall have no further liability under this Agreement.
     10. Shareholder Approval of Amendment to the Plan. This grant of Award
Units is being made pursuant to the Plan and is governed by the terms of this
Agreement and the terms of the Plan. The Company’s

 

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Board of Directors has approved amendments to the Plan that include, without
limitation, expanding the type of incentives that may be granted under the Plan
to include restricted stock units (the “Plan Amendment”). The Company intends to
submit a proposal (the “Proposal”) to its shareholders at its 2008 annual
shareholders meeting (the “Annual Meeting”) to approve the Plan Amendment.
Notwithstanding any provision to the contrary contained in this Agreement, the
Company’s grant of the Awards Units hereunder is subject in all respects to
receipt of shareholder approval for the Proposal at the Annual Meeting or any
adjournment thereof. In the event the Proposal is not approved by the Company’s
shareholders at the Annual Meeting or any adjournment thereof, the grant of
Award Units pursuant to this Agreement shall be null and void and this Agreement
shall have no further force or effect.
     11. General.
     (a) This Agreement may be amended only by a written agreement executed by
the Company and Employee.
     (b) This Agreement and the Plan embody the entire agreement made between
the parties hereto with respect to matters covered herein; and this Agreement
shall not be modified except by a writing signed by the parties, except as
otherwise provided in the Plan.
     (c) Nothing herein expressed or implied is intended or shall be construed
as conferring upon or giving to any person, firm, or corporation other than the
parties hereto, any rights or benefits under or by reason of this Agreement.
     (d) Each party hereto agrees to execute such further documents as may be
necessary or desirable to effect the purposes of this Agreement.
     (e) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same agreement.
     (f) This Agreement, in its interpretation and effect, shall be governed by
the laws of the State of Minnesota applicable to contracts executed and to be
performed therein.
Signature page follows

 

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     In Witness Whereof, the parties have executed this Restricted Unit
Agreement to be effective as of the date first set forth above.

            EMPLOYEE:
      /s/ Wilson L. Craft       Wilson L. Craft           

            FAMOUS DAVE’S OF AMERICA, INC:
      By:   /s/ K. Jeffrey Dahlberg         K. Jeffrey Dahlberg, Chairman of the
Board