exv10w1



 











EXHIBIT
10.1




EMPLOYMENT AGREEMENT




     This Agreement (the “Agreement”) is made as of February 25, 2005 by and between FAMOUS DAVE’S
OF AMERICA, INC., a Minnesota corporation (the “Company”), and DAVID GORONKIN (the “Executive”).



W I T N E S S E T H




     WHEREAS, the Company desires to employ Executive in accordance with the terms and conditions
stated in this Agreement;



     WHEREAS, Executive desires to accept that employment pursuant to the terms and conditions of
this Agreement; and



     WHEREAS, the Company and Executive have previously entered into an employment agreement dated
as of July 25, 2003 which the parties desire to terminate and simultaneously enter into this
Agreement.



     NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the parties
hereto agree as follows:



     I. EMPLOYMENT



     1.1 Employment as Chief Executive Officer. The Company hereby employs Executive as Chief
Executive Officer and Executive accepts such employment pursuant to the terms of this Agreement.
Executive shall report to and take direction from the Chairman of the Board of Directors (the
“Board”) and the Board. All other employees of the Company will report, directly or indirectly, to
Executive. Executive will perform those duties which are usual and customary for a Chief Executive
Officer of a restaurant enterprise. Executive shall be employed at the Company’s corporate offices.
He shall perform his duties in a manner reasonably expected of a Chief Executive Officer of a
restaurant company and as directed by the Board and its Chairman.



     1.2 Term. Unless terminated by Executive or the Company pursuant to Article III hereof,
Executive’s employment pursuant to this Employment Agreement shall be for an initial term of one
(1) year commencing on January 1, 2005. The term of this Agreement shall automatically be extended
for successive periods of one (1) year each.



     II. COMPENSATION, BENEFITS AND PERQUISITES



     2.1 Base Salary. During the initial term and effectiveness of this Agreement, the Company
shall pay Executive an annualized base salary (“Base Salary”) at the annual rate of Four Hundred
Seventy-two Thousand Five Hundred Dollars ($472,500). The Base Salary shall



 









 







be payable in equal installments in the time and manner that other employees of the Company
are compensated. For purposes of determining Executive’s Base Salary during any renewal term, the
Board or a compensation committee thereof (the “Compensation Committee”) will review Executive’s
Base Salary at least annually and may, in its sole discretion, increase (but not decrease) it to
reflect performance, appropriate industry guideline data or other factors.



     2.2 Bonus. Executive may receive a performance-based bonus (the “Incentive Bonus”) of up to
seventy-five percent (75%) of Base Salary (prorated for any partial year), the amount of which, if
any, will be determined and paid at the sole discretion of the Compensation Committee at the end of
each fiscal year of service based upon Executive’s satisfaction of certain criteria mutually agreed
upon by Executive and the Board, including without limitation, the accomplishment by the Company of
certain expectations regarding the Company’s budget, restaurant and franchise development and
performance, and management retention. The Compensation Committee and Executive will review and, if
mutually agreed, revise the criteria for the Incentive Bonus at least annually.



     2.3 Vacation. Executive shall be entitled to four (4) weeks’ paid vacation, or such greater
amount of time as determined by the Board or Compensation Committee.



     2.4 Employee Benefits. Throughout the term of this Agreement, Executive shall be entitled to
the usual and customary benefits and perquisites which the Company generally provides to its other
senior executives under its applicable plans and policies (including, without limitation, health,
medical, dental, vision and disability insurance coverage and retirement benefits). If the Company
adopts a benefit plan, Executive shall be entitled to the benefits which the Company provides to
its other executives under such plan. Executive shall pay any contributions which are generally
required of executives to receive any such benefits. The Company also agrees to pay for an annual
physical health examination at the Mayo Clinic in Rochester.



     2.5 Life Insurance. The Company agrees to purchase and provide Executive with $1 million of
term life insurance with beneficiaries of Executive’s choice. Executive agrees that the Company
shall have the right to obtain life insurance on executive’s life, at its expense and with the
Company as the sole beneficiary thereof. Executive shall cooperate in a reasonable manner with the
Company or such affiliate in obtaining such life insurance, including signing all necessary
consents, applications or other related forms and taking any required medical examinations. To the
extent that any such life insurance policy permits, upon Executive ceasing to be employed by the
Company, the Company shall assign any such policy to Executive or his designee if so requested by
Executive (net of any cash value). Executive represents that for purposes of obtaining such life
insurance, to his knowledge, he is in good health and eligible to be insured on a non-rated basis,
generally consistent with other healthy individuals of his age.



     III. TERMINATION OF EXECUTIVE’S EMPLOYMENT



     3.1 Termination of Employment.



 









 






     (a) Executive’s employment under this Agreement may be terminated by Executive at any
time for any reason. This Agreement shall terminate in its entirety immediately upon the
death of Executive.




     (b) Executive’s employment under this Agreement may be terminated by the Company at any
time for any reason; provided, however, that if (i) Executive’s employment is terminated by
the Company at any time during the term of this Agreement for a reason other than for death,
disability (pursuant to Section 3.3), or “Cause” as defined in Section 3.2, or (ii)
Executive resigns for “Good Reason” as defined in Section 3.2, Executive shall continue to
receive as a severance payment (the “Severance Payment”), his Base Salary (and continuation
of health, dental, life and vision benefits (“Insurance Benefits”) for a period of twelve
(12) months following such termination or resignation, and shall not receive any additional
compensation or bonuses; provided however, that if Executive obtains other employment during
such twelve (12) months, the Insurance Benefits will cease and the Company shall receive a
dollar-for-dollar credit against its severance obligation hereunder with respect to
compensation and benefits received by Executive in his new employment.




     (c) If, during the term of this Agreement, Executive’s employment with the Company is
terminated by the Company for any reason, or no reason, within six (6) months following a
“Change of Control” of the Company, Executive shall continue to receive his Base Salary and
Insurance Benefits for a period of twelve (12) months following such termination; provided
however, that if Executive obtains other employment during such twelve (12) months, the
Insurance Benefits will cease and the Company shall receive a dollar-for-dollar credit
against its severance obligation hereunder with respect to compensation and benefits
received by Executive in his new employment.




     (d) Any termination shall be effective as of the date specified by the party initiating
the termination in a written notice delivered to the other party, which date shall not be
earlier than the date such notice is delivered to the other party. Except as expressly
provided to the contrary in this section or applicable law, Executive’s rights to pay and
benefits shall cease on the date his employment under this Agreement terminates.



     3.2 Definitions. For purposes of this Article III:




     (a) “Cause” shall mean only the following: (i) the failure by Executive to perform his
duties under this Agreement (excluding nonperformance resulting from Executive’s disability)
which failure is not cured within 30 days after written notice from the Chairman of the
Board specifying the act of nonperformance ; (ii) any drunkenness or use of drugs that
interferes with the performance of Executive’s obligations under this Agreement, and
continues for more than ten (10) days after a written notice to Executive; provided;
however, that the Company shall have the right to prevent Executive from performing his
duties hereunder and from entering the offices of the Company during any such period; (iii)
Executive’s indictment for or conviction of (including entering a guilty plea or plea of no
contest to) a felony or any crime involving moral turpitude, fraud,



 









 





dishonesty or theft; (iv) any material dishonesty of Executive involving or affecting
the Company, or any willful misappropriation of the funds or property of the Company; (v)
any willful or intentional act of Executive having the effect or reasonably likely to have
the effect of injuring the reputation, business or business relationships of the Company in
a material way; (vi) any willful or intentional breach by Executive of a fiduciary duty to
the Company; (vii) any material breach (not covered by any of the above clauses) of any
material term, provision or condition of this Agreement, if such breach is not cured (to the
extent curable) with ten (10) days after written notice thereof is received by Executive
from the Chairman of the Board.




     (b) “Good Reason” shall mean only the following: (i) Executive has been demoted; or
(ii) Executive has incurred a substantial reduction in his authority or responsibility.




     (c) “Change of Control” shall mean the occurrence of any of the following events: (i)
any person or group of persons becomes the beneficial owner of thirty-five percent (35%) or
more of any equity security of the Company entitled to vote for the election of directors;
(ii) a majority of the members of the board of directors of the Company is replaced within
the period of less than two (2) years by directors not nominated and approved by the board
of directors; or (iii) the stockholders of the Company approve an agreement to sell or
otherwise dispose of all or substantially all of the Company’s assets (including a plan of
liquidation) or to merge or consolidate with or into another corporation except for a merger
whereby the stockholders of the Company prior to the merger own more than 50% of the equity
securities entitled to vote for the election of directors of the surviving corporation
immediately following the merger.



     3.3 Disability. If Executive has become disabled such that he cannot perform the essential
functions of his job with or without reasonable accommodation, and the disability has continued for
a period of more than 90 days, the Board may, in its discretion, terminate his employment under
this Agreement. Upon any such termination for disability, Executive shall be entitled to such
disability, medical, life insurance, and other benefits as may be provided generally for disabled
employees of the Company during the period he remains disabled.



     3.4 Notice. Executive must provide the Company with at least 30 days’ written notice if
Executive desires to terminate his employment under this Agreement.



     IV. CONFIDENTIALITY



     4.1 Prohibitions Against Use. Executive acknowledges and agrees that during the term of this
Agreement he will have access to various trade secrets and confidential business information
(“Confidential Information”) of the Company. Executive agrees that he shall use such Confidential
Information solely in connection with his obligations under this Agreement and shall maintain in
strictest confidence and shall not disclose any such Confidential Information, directly or
indirectly or use such information in any other way during the term of this Agreement or following
the termination thereof. Executive further agrees to take all reasonable steps necessary to
preserve and protect the Confidential Information. The provisions



 









 







of this Section shall not apply to information which (i) was in possession of an Executive
prior to receipt from the Company, or (ii) is or becomes generally available to the public other
than as a result of a disclosure by the Company, its directors, officers, employees, agents or
advisors, or (iii) becomes available to Executive from a third party having the right to make such
disclosure.



     4.2 Remedies. Executive acknowledges that the Company’s remedy at law for any breach or
threatened breach by Executive of Section 4.1 will be inadequate. Therefore, the Company shall be
entitled to injunctive and other equitable relief restraining Executive from violating those
requirements, in addition to any other remedies that may be available to the Company under this
Agreement or applicable law.



     V. NON-COMPETITION



     5.1 Agreement Not to Compete. Executive agrees that, on or before the date which is two (2)
years after the date Executive’s employment under this Agreement terminates, he will not, unless he
receives the prior approval of the Board, directly or indirectly engage in any of the following
actions:




     (a) Own an interest in (except as provided below), manage, operate, join, control, lend
money or render financial or other assistance to, or participate in or be connected with, as
an officer, employee, partner, stockholder, consultant or otherwise, any entity whose
primary business is the retail sale of barbequed food. However, nothing in this subsection
(a) shall preclude Executive from holding (i) less than one percent of the outstanding
capital stock of any corporation required to file periodic reports with the Securities and
Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the securities of which are listed on any securities exchange, quoted on the
National Association of Securities Dealers Automated Quotation System or traded in the
over-the-counter market, or (ii) holding an interest in the restaurant concepts which
Executive was involved with in the last year preceding the date of this Agreement.




     (b) Intentionally solicit, endeavor to entice away from the Company, or otherwise
interfere with the relationship of the Company, any person who is employed by or otherwise
engaged to perform services for the Company (including, but not limited to, any independent
sales representatives or organizations), whether for Executive’s own account or for the
account of any other individual, partnership, firm, corporation or other business
organization.



If the scope of the restrictions in this section are determined by a court of competent
jurisdiction to be too broad to permit enforcement of such restrictions to their full extent, then
such restrictions shall be construed or rewritten (blue-lined) so as to be enforceable to the
maximum extent permitted by law, and Executive hereby consents, to the extent he may lawfully do
so, to the judicial modification of the scope of such restrictions in any proceeding brought to
enforce them.



 









 








     5.2 Remedies. Executive acknowledges that the Company’s remedy at law for any breach or
threatened breach by Executive of Section 5.1 will be inadequate. Therefore, the Company shall be
entitled to injunctive and other equitable relief restraining Executive from violating those
requirements, in addition to any other remedies that may be available to the Company under this
Agreement or applicable law.



     VI. INTELLECTUAL PROPERTY



     In consideration of the Company’s employment of Executive hereunder, Executive acknowledges
that any and all patents, licenses, copyrights, trade names, trademarks, assumed names, service
marks, promotional/marketing/advertising campaigns, designs, logos, slogans, computer software and
other intellectual property developed, conceived or created by Executive in the course of his
employment by the Company, either individually or in collaboration with others, and whether or not
during normal working hours or on the premises of the Company (collectively, “Developments”) shall
be, as between the Company and Executive, the sole and absolute property of the Company and
Executive agrees that he will at the Company’s request and cost take whatever action is necessary
to secure the rights thereto by patent, copyright, assignment or otherwise to the Company.
Executive agrees to make full and prompt disclosure to the Company of all such Developments arising
during the term of this Agreement.



     VII. MISCELLANEOUS



     7.1 Amendment. This Agreement may be amended only in writing, signed by both parties.



     7.2 Entire Agreement. This Agreement contains the entire understanding of the parties with
regard to all matters contained herein. There are no other agreements, conditions or
representations, oral or written, expressed or implied, with regard thereto. This Agreement
supersedes any prior agreements relating to the employment of Executive by the Company, including
without limitation that certain Employment Agreement dated July 25, 2003, which shall be deemed
terminated and null and void effective January 1, 2005.



     7.3 Assignment. This Agreement shall be binding upon, and shall inure to the benefit of, the

parties and their respective successors, assigns, heirs and personal representatives and any entity
with which the Company may merge or consolidate or to which the Company may sell substantially all
of its assets, provided that this Agreement may not be assigned by Executive.



     7.4 Notices. Unless otherwise provided herein, any notice, request, instruction or other
document to be given hereunder by any party to any other party shall be in writing and shall be
deemed to have been given (a) upon personal delivery, if delivered by hand, (b) three days after
the date of deposit in the mails, postage prepaid, if mailed by certified or registered mail, or
(c) the next business day if sent by facsimile transmission (if receipt is electronically
confirmed) or by a prepaid overnight courier service, and in each case at the respective addresses
or numbers set forth below or such other address or number as such party may have fixed by notice:



 









 




If to the Company, to:


Famous Dave’s of America, Inc.

8091 Wallace Road

Eden Prairie, MN 55344

Attention: Chairman of the Board


With a copy to:


William M. Mower, Esq.

Maslon Edelman Borman & Brand, LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402-4140


If to Executive, to:


David Goronkin

18844 Bearpath Trail

Eden Prairie, Minnesota 55437



or to such other addresses as either party may designate in writing to the other party from time to
time.



     7.5 Waiver of Breach. Any 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.



     7.6 Severability. If any one or more of the provisions (or portions thereof) of this Agreement
shall for any reason be held by a final determination of a court of competent jurisdiction to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions (or portions of the provisions) of this Agreement, and the
invalid, illegal or unenforceable provisions shall be deemed replaced by a provision that is valid,
legal and enforceable and that comes closest to expressing the intention of the parties hereto.



     7.7 Governing Law. This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Minnesota, without giving effect to conflict of law principles.



     7.8 Arbitration. Any controversy or claim arising out of or relating to this Agreement or the
breach of this Agreement shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and a judgment upon the award rendered
by the arbitrator(s) may be entered in any court having jurisdiction. The arbitration award shall
be subject to review only in the manner provided in the Uniform



 









 







Arbitration Act as adopted in Chapter 572, Minnesota Statutes, as the Act is amended at the
time of submission of the issue to arbitration. The arbitrator(s) shall have the authority to award
the prevailing party its costs and reasonable attorney’s fees which shall be paid by the
non-prevailing party. In the event the parties hereto agree that it is necessary to litigate any
dispute hereunder in a court, the non-prevailing party shall pay the prevailing party its costs and
reasonable attorney’s fees.



     7.9 No Conflict. Executive represents and warrants that he is not subject to any agreement,
instrument, order, judgment or decree of any kind, or any other restrictive agreement of any
character, which would prevent him from entering into this Agreement or which would be breached by
Executive upon his performance of his duties pursuant to this Agreement.



     7.10 Counterparts. This Agreement may be executed in counterparts, but each of these
counterparts shall, for all purposes, be deemed to be an original, but both counterparts shall
together constitute one and the same instrument.



     IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.



	 	 	 
	

	 	FAMOUS DAVE’S OF AMERICA, INC.:
	 
	 	 
	

	 	By: /s/ K. Jeffrey Dahlberg
	

	 	 
	

	 	Name: K. Jeffrey Dahlberg
	

	 	Title: Chairman
	 
	 	 
	

	 	/s/ David Goronkin
	

	 	 
	

	 	DAVID GORONKIN