Document:

exv10w33

 

Exhibit 10.33

SEPARATION AGREEMENT AND RELEASE

     This Separation Agreement and Release (this “Agreement”) is entered into as of January
9, 2008, by and among Andy J. Brewer (the “Executive”) and Pregis Holding I Corporation, a
Delaware corporation (“Pregis I”), and its wholly owned subsidiaries Pregis Holding II
Corporation, a Delaware corporation (“Pregis II”), and Pregis Corporation, a Delaware
corporation (“Pregis III”) (Pregis I, Pregis II and Pregis III, collectively the
“Companies”) (each of the Executive and the Companies, a “Party” and, collectively,
the “Parties”). The Parties acknowledge that the terms and conditions of this Agreement
have been voluntarily agreed to and are intended to be final and binding.

RECITALS

     WHEREAS, the Parties have previously entered into an Employment Agreement, dated as of October
12, 2005 (the “Employment Agreement”);

     WHEREAS, the Executive and the Companies are parties to a Noncompetition Agreement, dated as
of October 12, 2005 (the “Noncompetition Agreement”);

     WHEREAS, on October 12, 2005, April 7, 2006 and February 27, 2007, Pregis I granted to the
Executive options (the “Options”) to purchase an aggregate of 173.33 shares of common
stock, par value $0.01 per share, of Pregis I (the “Common Stock”) pursuant to and in
accordance with the terms of Nonqualified Stock Option Agreements between the Executive and Pregis
I entered into on such dates (the “Option Agreements”);

     WHEREAS, pursuant to and in accordance with the terms of the Subscription Agreement between
Pregis I and the Executive, the Executive purchased twenty (20) shares of Common Stock (the
“Subscription Agreement”);

     WHEREAS, the Executive separated from employment in all capacities with the Companies on
November 19, 2007 (the “Separation Date”); and

     WHEREAS, as a condition precedent and a material inducement for the Companies to provide to
the Executive the Separation Benefits (as defined in Section 1 hereof) and for Pregis I to agree to
the provisions of Section 3 hereof, the Executive has agreed to execute this Agreement and be bound
by the provisions herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
for the monetary and other consideration set forth below, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:

     1. Separation from Employment. The Executive and Companies agree that on the
Separation Date, the Executive resigned from any position or office with or in the Companies or
their subsidiaries or affiliates, which resignations have been accepted as of the Separation Date
by the Companies or their respective subsidiaries or affiliates. The Executive and Companies
understand and agree that from and after the Separation Date the Executive was no longer authorized to incur any expenses, obligations or liabilities on behalf of the Companies or any
of

 

 

their subsidiaries or affiliates. In consideration for acceptance of the terms contained in
this Agreement, the Companies shall (a) pay the Executive his Base Compensation, set at $300,000 as
of the Separation Date, for the period commencing on the Separation Date through March 19, 2008, at
such times and in such amounts as would have been paid in accordance with the Companies’ normal
payroll procedures had the Executive’s employment continued after the Separation Date through March
19, 2008; (b) pay the Executive a prorated amount in respect of the Executive’s 2007 Incentive
Bonus (as defined in the Employment Agreement) based on the actual performance of the Companies
through December 31, 2007 and the number of days in 2007 through the Separation Date, which the
Companies currently expect will be approximately $116,000 (the “2007 Bonus”), payable in
equal monthly installments over a twelve-month period beginning with the first payroll period
ending after April 1, 2008; and (c) continue to provide the Executive with the same medical and
dental benefits provided immediately prior to the Separation Date until March 19, 2008 (the
payments and benefits described in clauses (a), (b) and (c) hereof, the “Separation
Benefits”); provided, however, that the Companies’ obligation to provide the
Separation Benefits shall be conditioned upon (x) the Executive’s continued compliance with his
obligations under the Noncompetition Agreement (as amended hereby) and (y) the Executive’s
continued compliance with his obligations under this Agreement, subject to the provisions of
Paragraph 1(c) of the Noncompetition Agreement.

     2. Noncompetition Agreement.

          (a) The Parties hereby agree that Section 1(a) of the Noncompetition Agreement is amended as
follows: the restrictions described in clause (iii) of Section 1(a) of the Noncompetition
Agreement shall continue until the second anniversary of the Separation Date. The restrictions set
forth in Sections 1(a)(i), (ii) and (iv) of the Noncompetition Agreement shall continue until
November 19, 2008.

          (b) The Noncompetition Agreement shall otherwise remain unchanged and in full force and
effect.

     3. Repurchase of Common Stock.

          (a) Pregis I and the Executive agree that Pregis I is hereby purchasing from the Executive for
cash twenty (20) shares of Common Stock for an aggregate purchase price of $400,000, representing
full and adequate consideration for such shares (the “Repurchase Payment”), payable as
follows:

               (i) 50% of the Repurchase Payment shall be paid within thirty (30) days from the date that the
Executive submits the share certificate(s) representing the twenty (20) shares of Common Stock to
the Company; and

               (ii) 50% of the Repurchase Payment shall be paid within thirty (30) days following the second
anniversary of the Separation Date; provided, however, that the payment described
in this clause (ii) is conditioned on (x) the Executive’s continued compliance with his obligations
under the Noncompetition Agreement (as amended hereby) and (y) the Executive’s continued compliance with his obligations under this Agreement, subject to the
provisions of Paragraph 1(c) of the Noncompetition Agreement.

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          (b) In the event of any conflict between or among the provisions of this Agreement and the
Subscription Agreement, such conflict shall be resolved in each and every instance in favor of the
provisions of this Agreement.

     4. Options. Pregis I and the Executive agree that all of the Options granted to the
Executive pursuant to the Option Agreements are hereby canceled in their entirety. In the event of
any conflict between or among the provisions of this Agreement and the Option Agreements, such
conflict shall be resolved in each and every instance in favor of the provisions of this Agreement.

     5. Release of Claims by the Executive.

          (a) In consideration of the Companies entering into this Agreement, the sufficiency of which
the Executive acknowledges, the Executive, with the intention of binding himself and his heirs,
executors, administrators and assigns, does hereby release, remise, acquit and forever discharge
the Companies and their subsidiaries and affiliates (the “Company Affiliated Group”), their
present and former officers, directors, executives, shareholders, agents, attorneys, employees and
employee benefit plans (and the fiduciaries thereof) and the successors, predecessors and assigns
of each of the foregoing (collectively, the “Company Released Parties”) of and from any and
all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums
of money, accounts, financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known or unknown, suspected or unsuspected, which the
Executive, individually or as a member of a class, now has, owns or holds, or has at any time
heretofore had, owned or held, arising on or prior to the date hereof, against any Company Released
Party in any capacity, including, without limitation, any and all claims (i) in respect of the
shares of Common Stock repurchased by Pregis I pursuant to Section 3 hereof, (ii) in respect of the
Options canceled pursuant to Section 4 hereof, (iii) arising out of or in any way connected with
the Executive’s service to any member of the Company Affiliated Group (or the predecessors thereof)
in any capacity, or the termination of such service in any such capacity, (iv) for severance or
vacation benefits, unpaid wages, salary or incentive payments, (v) for breach of contract, wrongful
discharge, impairment of economic opportunity, defamation, intentional infliction of emotional harm
or other tort, (vi) for any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning unlawful and unfair labor and employment
practices) and (vii) for employment discrimination under any applicable federal, state or local
statute, provision, order or regulation, and including, without limitation, any claim under Title
VII of the Civil Rights Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair
Labor Standards Act, the Americans with Disabilities Act (the “ADA”), the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Age Discrimination in
Employment Act (the “ADEA”) and any similar or analogous state statute (including the
Illinois Human Rights Act), excepting only:

               (i) rights of the Executive under this Agreement;

               (ii) the right of the Executive to receive COBRA continuation coverage in accordance with
applicable law;

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               (iii) claims for accrued and unpaid benefits under any health, disability, retirement or other
similar employee benefit plan (within the meaning of Section 3(3) of ERISA) of the Company
Affiliated Group; and

               (iv) rights to indemnification the Executive has under the by-laws or certificate of
incorporation of any member of the Company Affiliated Group or otherwise through or from the
Companies, including under any policy of insurance providing indemnification or coverage.

          (b) The Executive acknowledges and agrees that the release of claims set forth in this Section
5 is not to be construed in any way as an admission of any liability whatsoever by any Company
Released Party, any such liability being expressly denied.

          (c) The release of claims set forth in this Section 5 applies to any relief no matter how
called, including, without limitation, wages, back pay, front pay, compensatory damages, liquidated
damages, punitive damages, damages for pain or suffering, costs and attorneys’ fees and expenses,
but shall expressly exclude claims based on this Agreement.

          (d) The Executive specifically acknowledges that his acceptance of the terms of the release of
claims set forth in this Section 5 is, among other things, a specific waiver of his rights, claims
and causes of action under Title VII, the ADEA, the ADA and any state or local law or regulation in
respect of discrimination of any kind; provided, however, that nothing herein shall
be deemed, nor does anything contained herein purport, to be a waiver of any right or claim or
cause of action which by law the Executive is not permitted to waive.

          (e) As to rights, claims and causes of action arising under the ADEA, the Executive
acknowledges that he has been given but not utilized a period of twenty-one (21) days to consider
whether to execute this Agreement. If the Executive accepts the terms hereof and executes this
Agreement, he may thereafter, for a period of seven (7) days following (and not including) the date
of execution, revoke this Agreement as it relates to the release of claims arising under the ADEA.
If no such revocation occurs, this Agreement shall become irrevocable in its entirety, and binding
and enforceable against the Executive, on the day next following the day on which the foregoing
seven-day period has elapsed. If such a revocation occurs, this Agreement shall be of no force or
effect.

          (f) The Executive acknowledges and agrees that he has not, with respect to any transaction or
state of facts existing prior to the date hereof, filed any complaints, charges or lawsuits against
any Company Released Party with any governmental agency, court or tribunal.

          (g) The Executive acknowledges that he has been advised to seek, and has had the opportunity
to seek, the advice and assistance of an attorney with regard to the release of claims set forth in
this Section 5 and has been given a sufficient period within which to consider the release of
claims set forth in this Section 5.

          (h) The Executive acknowledges that the release of claims set forth in this Section 5 relates
only to claims which exist as of the date of this Agreement.

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          (i) The Executive acknowledges that the Separation Benefits he is receiving in connection with
the release of claims set forth in this Section 5 are in addition to anything of value to which the
Executive is entitled from the Companies and their affiliates.

          (j) The directors and officers of the Companies acknowledge that, as of the date of this
Agreement, they are not aware of any actual or threatened claim or cause of action arising from or
in any respect relating to the Employment Agreement or the Executive’s employment by the Companies,
or the conclusion thereof. The Companies acknowledge that on the date of this Agreement they are
not aware of any actual or threatened claim or course of action from or in any respect relating to
the Executive’s actions prior to the Separation Date. Nothing contained in this Section 5(j) shall
be deemed to constitute a waiver of any legal rights of the Company Released Parties.

     6. Non-disparagement. From and after the Separation Date, the Executive shall not
make or publish any disparaging statements (whether written or oral) regarding any member of the
Company Affiliated Group or the affiliates, directors, officers or executives of any of them.

     7. Acknowledgement. The Companies acknowledge and agree that the Executive’s
employment was not terminated for Cause (as defined in the Employment Agreement) and that, from and
after the Separation Date, the Companies shall not make any statement or take any position that the
Executive was terminated for Cause.

     8. 409A. The Companies hereby represent to the Executive that the Separation Benefits
and the Repurchase Payment will not subject the Executive to the tax imposed under Section 409A of
the Internal Revenue Code of 1986, as amended, and the regulations and guidance issued thereunder,
and the Companies agree to indemnify the Executive in connection therewith. The Company will
defend, hold harmless and indemnify the Executive on a fully grossed-up after tax basis from and
against any and all claims, losses, liabilities, obligations, damages, interest, penalties,
impositions, assessments, demands, judgments, settlements, costs and expenses (including reasonable
attorneys’, accountants’ and experts’ fees and expenses) (collectively, “Damages”) with respect to
any tax liability of the Executive resulting from any damages that would be imposed under Section
409A, and will promptly, but in no event later than five business days after receipt of any
reasonable notice from the Executive to the Company of any claim for damages, pay to the Executive
in cash the amount of damages set forth in such notice.

     9. Good Reference. No officer or director of the Company will make any disparaging
statements about Executive. The Company shall provide a telephonic reference in accordance with
the attached Exhibit A.

     10. Return of Company Property. The Executive shall return to the Companies any and
all documents, files, credit cards and other property of any kind belonging to the Companies not
later than the date hereof.

     11. Notices. Any notice required or desired to be delivered hereunder shall be in
writing and shall be delivered personally, by courier service, or by certified mail, return receipt
requested, and shall be effective when actually delivered to the Party to whom such notice shall

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be directed and shall be addressed as follows (or to such other address as the Party entitled to
notice shall hereafter designate in accordance with the terms hereof):

	 	 	 	 	 
	 

	 	If to the Companies:
	 	With a copy to:
	 
	 	 	 	 
	 

	 	c/o AEA Investors LLC
	 	Fried, Frank, Harris, Shriver & Jacobson LLP
	 

	 	Park Avenue Tower
	 	One New York Plaza
	 

	 	65 East 55th Street
	 	New York, NY 10004
	 

	 	New York, NY 10022
	 	Attn: Howard Adler, Esq.
	 

	 	Attn: Sanford Krieger	 	 
	 
	 	 	 	 
	 

	 	If to the Executive:
	 	With a copy to:
	 
	 	 	 	 
	 

	 	Andy J. Brewer
	 	Bellows and Bellows, P.C.
	 

	 	1405 Scott Avenue
	 	209 S. LaSalle Street, Suite 800
	 

	 	Winnetka, IL 60093
	 	Chicago, Illinois 60604
	 

	 	 	 	Attn: Laurel Bellows

     12. Withholding. Notwithstanding anything in this agreement to the contrary, the
Companies shall have the right to deduct from any amount payable under this Agreement any taxes or
other amounts required by applicable law to be withheld.

     13. Complete Agreement. This Agreement and the Noncompetition Agreement (as modified
hereby) constitute the complete agreement of the Parties with respect to the subject matter hereof
and shall supersede all agreements between the Parties to the extent they relate in any way to the
employment, termination of employment, compensation and executive benefits of the Executive.

     14. Severability. Each provision hereof and portion thereof is severable, and if one
or more provisions hereof or portions thereof are declared invalid, the remaining provisions and
portions thereof shall nevertheless remain in full force and effect. If any provision of this
Agreement or portion thereof is so broad, in scope or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

     15. No Waiver. The failure to enforce at any time any of the provisions of this
Agreement or to require at any time performance by another party of any of the provisions hereof
shall in no way be construed to be a waiver of such provisions or to affect the validity of this
Agreement, or any part hereof, or the right of any Party thereafter to enforce each and every such
provision in accordance with the terms of this Agreement.

     16. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. The Parties represent that each signatory to this Agreement on his, its or
their behalf is authorized to make the promises and commitments herein.

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     17. Successors. This Agreement shall be binding upon any and all successors and
assigns of the Executive and the Companies, including their present, former and future parents,
subsidiaries, affiliates, divisions, predecessors, successors and assigns and their respective
present, former and future officers, directors, shareholder, partners, joint venturers, insurers,
benefit plans, plan fiduciaries and plan administrators, employees, agents and representatives..
The Company will require any successor to, or purchaser or acquirer of (in each case, whether
direct or indirect, by purchase, merger, consolidation, reorganization or otherwise), all or
substantially all of the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required
to perform it if no such succession, purchase or acquisition had taken place.

     18. Third-Party Beneficiary. Each of the Company Released Parties shall be a
third-party beneficiary with respect to Section 5 and shall be entitled to enforce the provisions
thereof.

     19. Governing Law. Except for issues or matters as to which federal law is
applicable, this Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of New York without giving effect to the conflicts of law principles thereof.

     20. Headings. The captions and headings contained in this Agreement are for
convenience only and shall not be construed as a part of the Agreement.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first
above written.

	 	 	 	 	 
	 	COMPANIES:

PREGIS HOLDING I CORPORATION

 	 
	 	By:  	/s/ D. Keith LaVanway
 	 
	 	 	Name:  	D. Keith LaVanway 	 
	 	 	Title:  	CFO 	 
	 
	 	PREGIS HOLDING II CORPORATION

 	 
	 	By:  	/s/ D. Keith LaVanway
 	 
	 	 	Name:  	D. Keith LaVanway 	 
	 	 	Title:  	CFO 	 
	 
	 	PREGIS CORPORATION

 	 
	 	By:  	/s/ D. Keith LaVanway
 	 
	 	 	Name:  	D. Keith LaVanway 	 
	 	 	Title:  	CFO 	 
	 
	 	EXECUTIVE:

 	 
	 	/s/ Andy J. Brewer
 	 
	 	Andy J. Brewerexv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Agreement (the “Agreement”) is made as of March 21, 2008, by and between FAMOUS DAVE’S OF
AMERICA, INC., a Minnesota corporation (the “Company”), and Wilson L. Craft (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; and

     WHEREAS, Executive desires to accept that employment pursuant to the terms and conditions of
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 Agreement shall be for an initial term of one (1) year
commencing on April 21, 2008. The term of this Agreement shall automatically be extended for
successive periods of one (1) year each.

     1.3 Directorship. The Company shall appoint Executive as a member of the Board effective upon
the commencement date of Executive’s employment and shall use its commercially reasonable efforts
to cause Executive to be elected as a member of the Board throughout Executive’s term of employment
hereunder, including without limitation nominating Executive for election as a director at each
shareholders meeting during such term at which Executive’s term as a director would otherwise
expire. Executive agrees to accept election, and to serve as director of the Company during the
term of his employment hereunder without any compensation therefor other than as specified in this
Agreement.

 

 

     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 Twenty-five Thousand Dollars ($425,000). 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. The Company shall pay Executive a guaranteed bonus (the “Guaranteed Bonus”) equal
to Seventy-five percent (75%) of Base Salary, prorated for the portion of the Company’s 2008 fiscal
year during which Executive is employed by the Company. The Guaranteed Bonus shall be paid not
later than March 15, 2009, provided that Executive is employed hereunder at the end of such fiscal
year. Thereafter during the term of this Agreement, Executive shall be eligible to receive a
performance-based bonus (the “Incentive Bonus”) of up to Seventy-five percent (75%) of Base Salary,
the amount of which, if any, will be determined and paid based upon satisfaction of criteria
determined by the Compensation Committee, which criteria is currently based upon achievement of
annual Company earnings per share targets that are established at or prior to the commencement of
each fiscal year. To the extent earned, the Incentive Bonus shall be paid not later than the
15th day of the third month after the end of the calendar year in which the Incentive
Bonus is determined. The Compensation Committee may, in its sole discretion, review and revise the
criteria for determining the amount of the Incentive Bonus in future years in conjunction with its
annual review of Company’s executive compensation policies.

     2.3 Annual Long-Term Incentive Compensation. Commencing for the Company’s 2008 fiscal year,
and during the term of this Agreement, Executive shall be entitled to participate in the Company’s
annual long-term compensation plan(s), with the level of Executive’s participation being determined
based upon One Hundred percent (100%) of Base Salary. The long-term compensation plan adopted by
the Company for its 2008 fiscal year is the 2008-2010 Performance Share Program. The Compensation
Committee may, in its sole discretion, review and revise the form of future annual long-term
incentive compensation awards and the criteria for determining the how such awards are earned in
conjunction with its annual review of Company’s executive compensation policies.

     2.4 Restricted Stock Units; Conditional Grant.

     (a) As additional compensation for the services to be rendered by Executive pursuant to
this Agreement, the Company shall grant Executive an award of One Hundred Thousand (100,000)
restricted stock units of the Company (the “Restricted Stock Units”), which grant shall be
effective as of the commencement date of Executive’s employment hereunder. The Restricted
Stock Units shall be governed by the terms of the Company’s 2005 Stock Incentive Plan, as
the same may be amended from time to time (the “2005 Plan”), shall vest in three annual
installments, in amounts as

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nearly equal as possible, on the three, four and five-year anniversaries of the grant
date, and shall vest in its entirety upon a “Change of Control” as defined in Section 3.2.
To the extent then vested, the Restricted Stock Units shall be distributed in the form of
common stock of the Company on the applicable distribution date set forth in a restricted
stock unit agreement, the form of which is attached hereto as Exhibit 10.2 (the “RSU
Agreement”).

     (b) As of the date of this Agreement, the Board has approved amendments to the 2005
Plan that include, among other things, expanding the type of incentives that may be granted
thereunder to include restricted stock units (the “Plan Amendment”). The Company shall
submit a proposal (the “Plan Proposal”) to the Company’s shareholders at its 2008 annual
shareholders meeting (the “Annual Meeting”) to approve the Plan Amendment and the Board
shall recommend that shareholders vote in favor of the Plan Amendment. Executive
acknowledges that the grant of the Restricted Stock Units pursuant to Section 2.4(a) is
subject in all respects to receipt of shareholder approval for the Plan Proposal at the
Annual Meeting or any adjournment thereof.

     (c) In the event the Plan Proposal is not approved by the Company’s shareholders at the
Annual Meeting or any adjournment thereof: (i) the grant of Restricted Stock Units shall
become null and void and the RSU Agreement shall have no further force or effect; and (ii)
effective as of the date of the Annual Meeting, the Company shall grant Executive an award
of One Hundred Thousand (100,000) shares of restricted common stock of the Company
(“Restricted Stock”), which grant shall be in lieu of the Restricted Stock Units and shall
be made as of the date the Annual Meeting is finally adjourned. If applicable, the grant of
Restricted Stock shall be governed by the 2005 Plan and shall contain transfer and
forfeiture restrictions that shall lapse, if at all, in three annual installments, in
amounts as nearly equal as possible, on the three, four and five-year anniversaries of the
commencement date of Executive’s employment under this Agreement. In connection with such
grant, Executive shall enter into a Restricted Stock Agreement with the Company, which shall
incorporate the foregoing vesting schedule and other terms and conditions customarily
included in a restricted stock agreement.

     2.5 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.

     2.6 Employee Benefits. Throughout the term of this Agreement, Executive shall be entitled to
the usual and customary benefits and perquisites that the Company generally provides to its other
senior executives under its applicable plans and policies (including, without limitation, the
Company’s comprehensive medical and dental plans, Non-Qualified Deferred Compensation Plan and
Executive Elective Deferred Stock Unit Plan). 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. Notwithstanding the foregoing: (a) any reimbursement of expenses incurred or the
provision of in-kind benefits (including those under Section 2.7 below) during any taxable year
shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided in any
other taxable year (except to the extent

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provided under any medical plan for aggregate caps on lifetime or other benefits); (b) the
reimbursement of an eligible expense shall be made on or before the last day of Executive’s taxable
year following the taxable year in which the expense was incurred; and (c) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another
benefit.

     2.7 Relocation Expenses. Executive will be entitled to receive a six month housing allowance
and will be reimbursed, on up to three separate occasions, for travel and lodging expenses incurred
by Executive and his immediate family in connection with Executive’s relocation, all in accordance
with the Company’s relocation/moving policies. In addition, the Company will reimburse Executive
for the full amount of customary real estate brokerage commissions incurred in connection with a
sale of his current Atlanta residence during the first three years of Executive’s employment
hereunder, provided that Executive remains a continuing employee of the Company at the time of such
sale.

     III. TERMINATION OF EXECUTIVE’S EMPLOYMENT

     3.1 Termination of Employment.

     (a) Executive’s employment under this Agreement may be terminated by Executive or the
Company at any time and for any reason or no reason. Executive’s employment under this
Agreement shall terminate immediately upon the death of Executive.

     (b) If (i) Executive’s employment is terminated by the Company for a reason other than
a disability (pursuant to Section 3.3) not attributable to Executive’s employment hereunder,
or “Cause” as defined in Section 3.2, (ii) Executive resigns for “Good Reason” as defined in
Section 3.2, or (iii) Executive dies while performing the duties of his employment
hereunder, then Executive shall, subject subsection 3.1(f) below, continue to receive as a
severance payment, his Base Salary (the “Severance Payment”) and shall continue to receive
benefits under the Company’s comprehensive medical and dental plans to which Executive was
entitled at the time of termination or resignation (the “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 Payment obligations hereunder
in an amount equal to the 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 (other than for “Cause”), or no reason, within
twelve (12) months following a “Change of Control” of the Company, Executive shall, subject
to subsection 3.1(f), continue to receive the Severance Payment and the Insurance Benefits
for a period of twelve (12) months following such termination and shall also be entitled to
receive the full amount of the Guaranteed Bonus (upon a Change of Control prior to the end
of the Company’s 2008 fiscal year) or Incentive

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Bonus (upon a Change of Control following the end of the Company’s 2008 fiscal year)
for the year in which Change of Control occurs; 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 Payment obligations
hereunder with respect to compensation and benefits received by Executive in his new
employment.

     (d) Any employment 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.

     (e) Except as provided in subsection 3.1(f) below, all Severance Payments due pursuant
to this Article III shall be made at the times and in the manner that Executive’s Base
Salary, Guaranteed Bonus or Incentive Bonus would have been paid but for the termination of
Executive’s employment and shall otherwise comply with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated
thereunder (“Section 409A”), and all Insurance Benefits shall be provided at the same time
and under the same conditions as such Insurance Benefits would have been provided but for
the termination of Executive’s employment.

     (f) If, as of the date Executive’s employment is terminated: (a) the Company’s common
stock is publicly traded (as determined under Section 409A), (b) Executive is a “specified
employee” (as determined under Section 409A), and (c) any portion of the amounts payable
under subsections 3.1(b) or (c) above would exceed the sum of the applicable limited
separation pay exclusions as determined pursuant to Section 409A, then payment of the excess
amount shall be delayed until the first regular payroll date of the Company following the
six month anniversary of the date of Executive’s employment termination (or, if earlier, the
date of his death), and shall include a lump sum equal to the aggregate amounts that
Executive would have received had payment of this excess amount commenced following the date
of Executive’s employment termination as provided in subsection 3.1(b) or (c), with interest
at the “prime rate” as published in The Wall Street Journal. If Executive continues
to perform any services for the Company (as an employee or otherwise) after the date of
Executive’s employment termination, such six month period shall be measured from the date of
Executive’s “separation from service” as defined pursuant to Section 409A.

     (g) If Executive is then serving as a member of the Board, Executive shall be deemed to
have resigned as a member of the Board upon termination of Executive’s employment for any
reason, such resignation to be effective as of the date of such termination.

     3.2 Definitions. For purposes of this Article III:

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     (a) “Cause” shall mean only the following: (i) 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; (ii)
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;
(iii) any material dishonesty of Executive involving or affecting the Company, or any
willful misappropriation of the funds or property of the Company; (iv) 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; (v) any willful or intentional breach by Executive of a fiduciary duty to the Company;
and (vi) 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;
provided, however, that in either event: (a) Executive has provided written notice to the
Chairman of the Board of the existence of the event giving rise to termination for Good
Reason within a period not to exceed ninety (90) days following its initial occurrence; (b)
the Company has failed to cure such event within a period of (30) days following the
Chairman of the Board’s receipt of such notice from Executive; and (c) Executive terminates
his employment with the Company within a limited period of time not to exceed thirty (30)
days following the expiration of the Company’s cure period under subsection (b) above.

     (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 fifty percent
(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 ninety (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

6

 

generally for disabled employees of the Company during the period he remains disabled. All
benefits provided under this Section 3.3 shall comply with the requirements of Sections 3.2(f)
above and Section 409A.

     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 (1%) 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

7

 

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 Key Man Insurance. If reasonably requested by the Company, Executive shall cooperate and
take such actions as are reasonable and necessary to assist the Company in obtaining key man life
insurance on Executive for the benefit of the Company.

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

8

 

     7.3 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.

     7.4 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.

     7.5 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 (3) 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.

                      12701 Whitewater Drive, Suite 200

                      Minnetonka, MN 55343

                      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:

                      Wilson L. Craft

                      9885 Nature Mille Road

                      Alpharetta, GA 30022

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

     7.6 Survival. The provisions of Article IV, V and VI shall survive any termination of this
Agreement.

9

 

     7.7 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.

     7.8 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.

     7.9 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.

     7.10 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 attorneys’ 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 attorneys’ fees.

     7.11 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.

     7.12 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.

     7.13 Compliance with Section 409A. To the extent any provision of this Agreement may be
deemed to provide a benefit to Executive that is treated as non-qualified deferred compensation
pursuant to Section 409A, such provision shall be interpreted in a manner that qualifies for any
applicable exemption from compliance with Section 409 or, if such interpretation would cause any
reduction of benefit(s), such provision shall be interpreted (if reasonably possible) in a manner
that complies with Section 409A and does not cause any such reduction.

Signature Page Follows

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	FAMOUS DAVE’S OF AMERICA, INC.

 	 
	 	By:  	/s/ K. Jeffrey Dahlberg
 	 
	 	 	Name:  	K. Jeffrey Dahlberg 	 
	 	 	Title:  	Chairman 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                   /s/ Wilson L. Craft
 	 
	 	Wilson L. Craft 	 
	 	 	 
	 

Signature Page to Wilson Craft Employment Agreement

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