EXHIBIT 10.1
CALIFORNIA PIZZA KITCHEN
CONFIDENTIAL EMPLOYMENT AGREEMENT
This is an EMPLOYMENT AGREEMENT ("Agreement") between California Pizza Kitchen,
Inc. a Delaware corporation (the "Company"), and Xxxx Sugueti (the "Employee"),
dated this 6th day of November 2006 ("Employment Commencement Date").
W I T N E S S E T H :
WHEREAS, the Company desires to engage Employee to perform services for
the Company, and the Employee desires to perform such services, on the terms and
conditions herein set forth.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Employee as follows:
1. Contract Term. The Company agrees to employ Employee, and Employee
agrees to serve, on the terms and conditions stated herein for a three-year (3)
period commencing on the Employment Commencement Date. The three-year period
during which Employee is employed hereunder is hereinafter referred to as the
"Contract Term." The period of Employee's actual employment is referred to
herein as the "Employment Period." (References to the Employment Period in this
Agreement shall refer to the initial Employment Period and any extended
Employment Period.)
Upon the expiration of the three-year Contract Term, the Contract Term
shall be automatically extended for successive one calendar year periods,
unless, at least 60 days prior to said expiration date, either party has given
written notice to the other that it does not wish to extend the Employment
Period. Employee accepts any such continued employment with the Company on the
terms set forth in this Agreement.
2. Position and Duties. The Employee shall be employed in the business
of the Company and receive the title of Senior Vice President of California
Pizza Kitchen ASAP Operations ("SVP ASAP Operations"). As of the date of this
Agreement, Employee's duties shall include, but will not be limited to, the
responsibilities as outlined in the job description. Notwithstanding the duties
as described in the job description document, Employee agrees that his duties
may be, from time to time, revised or modified by the Company in its discretion.
The Employee agrees to devote substantially all of his business efforts
and time to the Company and use his best efforts to perform faithfully and
efficiently the responsibilities assigned to him hereunder, to the extent
necessary to discharge such responsibilities, except Employee may (i) serve in
any capacity with a professional, community, industry, civic, educational or
charitable organization; (ii) serve as a member of corporate boards of directors
on which Employee currently sits; (iii) with the consent of the Company may sit
on other corporate boards of directors; and (iv) manage his and his family's
personal investments and affairs so long as such activities do not materially
interfere with the discharge of Employee's duties.
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3. Compensation and Benefits.
3.1 Base Salary. As compensation for his services, the Company shall
pay Employee a base annual salary ("Base Salary") of $200,000 which will be paid
in accordance with the payroll practices of the Company. The Base Salary shall
be reviewed by the Company at least once each year and may be increased at any
time, and from time to time, by action of the Company based on Employee's
performance. In addition, Employee shall be eligible to receive additional
variable compensation as identified below herein.
3.2 Annual Bonus. In addition to his Base Salary, the Employee shall
have an opportunity to earn or be awarded, for each fiscal year during the
Employment Period, an annual target performance bonus, in cash ("Annual Bonus")
based on the achievement of certain performance objectives established by the
Company. Each such Annual Bonus shall be payable no later than 60 days
subsequent to the end of the Company's fiscal year prorated to the Employment
Commencement Date. In the event of the termination of this Agreement by the
Company without Cause or by the Employee with Good Reason, or by reason of
Disability, the Employee shall be eligible for the Annual Bonus prorated to the
date of such termination. The terms "Cause," "Good Reason" and "Disability" are
defined in Sections 5 and 6 herein.
For each fiscal year during the Employment Period, Employee shall be eligible to
earn the Annual Bonus up to 45% of his Base Salary, depending on performance. To
the extent such Bonus is earned, it shall be based on the following (which may
be revised, modified, changed or deleted at the sole discretion of the Company).
Different Annual Bonus amounts may be payable for performance results within a
range between a threshold that is less than the specified performance target(s)
and for performance results in excess of the performance target(s).
3.3 Incentive, Retirement and Savings Plan. In addition to the Base
Salary and Annual Bonus, the Employee shall be entitled to participate in all
incentive, retirement and savings plans and programs ("Incentives"), if any, and
as established from time to time by the Company provided Employee meets the
eligibility requirements therefor.
3.4 Benefit Plans. The Employee and/or his spouse, and dependents, as
the case may be, shall be entitled to all benefits under all medical, dental,
vision, disability, Employee life, group life, accidental death and travel
accident insurance plans and programs ("Benefit Plans"), if any, and as
established from time to time by the Company provided the Employee meets the
eligibility requirements therefor.
3.5 Fringe Benefits. The Employee shall be entitled to fringe benefits
("Fringe Benefits"), including, but not limited to, an automobile allowance of
$12,000 per year and other fringe benefits, if any, as established in the sole
discretion of the Company from time to time provided the Employee meets the
eligibility requirements therefor. The Company shall also reimburse Employee for
expenses associated with his automobile in accordance with Company policy.
3.6 Office and Support Staff. The Employee shall be entitled to an
office and to other assistance commensurate with his responsibilities and title
and consistent with the Company's policies.
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3.7 Vacation. The Employee shall be entitled to four weeks of paid
vacation per year. Employee will not accrue further vacation time unless and
until Employee's unused vacation time fall below five weeks of vacation time.
3.8 Business Expenses. The Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred or expended by the Employee
in fulfillment of the Employee's duties hereunder. Employee shall provide
documentation of such expenses in accordance with the procedures established by
the Company. The Company reserves the right to amend said procedures in its sole
discretion.
4. Stock Options
(a) On the date this Agreement is executed, the Company shall grant
Employee options to acquire 30,000 shares of Company Common Stock, pursuant and
subject to the terms and conditions herein and the terms of the Company's 2004
Omnibus Incentive Compensation Plan (attached hereto as Exhibit "A"). Such
option shall be substantially in the form set forth in the Non-Qualified Stock
Option Grant (attached hereto as Exhibit "B").
The exercise price per share of the options shall be the closing price
of the Company Common Stock on the date approved by the Compensation Committee
of the Board of Directors. Options shall vest on each quarterly anniversary
until fully vested and exercisable at the end of the third anniversary of the
grant date at a rate of 8.33% per quarter. The options granted to Employee under
the 2004 Omnibus Incentive Compensation Plan shall be nonstatutory stock options
that are not intended to be incentive stock options under Section 422 of the
Internal Revenue Code.
(b) Each option granted under the terms of the 2004 Omnibus Incentive
Compensation Plan shall be for a term of ten years and shall provide that
(except as otherwise provided in this Agreement: a) in the event Employee's
service with the Company terminates for any reason except termination without
Cause, death, Disability, or Retirement (all as defined in the 2004 Omnibus
Incentive Compensation Plan - Exhibit A) the vested portion of each option will
expire at the close of business at Company headquarters on the date of
termination of Employee's service with the Company; and b) if Employee's service
with the Company terminates due to termination without Cause or Retirement, the
vested portion of each option will expire at the close of business at Company
headquarters on the date two months after the date of the Employee's termination
without Cause or Retirement (all as defined in the 2004 Omnibus Incentive
Compensation Plan - Exhibit A). Additional options may be granted to Employee in
the discretion of the Company. The Company shall grant Employee additional
option awards under the 2004 Omnibus Incentive Compensation Plan each successive
year during the Contract Term beginning in November 2007 in a minimum amount of
options to purchase 10,000 shares of Common Stock. The total options granted
shall not exceed 50,000 shares during the Contract Term, inclusive of the
initial 30,000 Share Option Grant.
(c) For so long as the Company remains a public company, Company shall
use commercially reasonable efforts to: (i) cause the shares of Common Stock
reserved for issuance to Employee pursuant to the Company's 2004 Omnibus
Incentive Compensation Plan to be included in a registration statement on Form
S-8 (the "Registration Statement") relating to the registration under the
Securities Act of 1933 (the "Act") of no less than 3,750,000 shares of the
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Company's Common Stock, issuable pursuant to the Company's 2004 Omnibus
Incentive Compensation Plan; (ii) cause such awards and the shares issuable
pursuant to such awards to be registered or otherwise exempt under the
securities or blue sky laws of California and such other jurisdictions in the
United States as may be applicable; and (iii) to maintain a current prospectus
and to cause such Common Stock to be listed on the principal exchange or
exchanges or qualified for trading on the principal over-the-counter market on
which the Company's Common Stock is then listed or traded, so long as any
Options remain outstanding and have not been exercised or terminated and for a
period of five years after exercise.
5. Termination of Employment by Company. Employee's Employment Period with
the Company shall automatically terminate upon the first event set forth below
in this section.
5.1 For Death. Upon the Employee's Date of Death ("Death").
5.2 For Disability. Upon the date on which the Board shall give
Employee notice of termination on account of a Disability (as hereinafter
defined), which has prevented Employee from satisfactorily and completely
performing his/her duties under this Agreement for a period or periods
aggregating more than one hundred twenty (120) days in any twelve (12)
consecutive months (it being understood that prior to the date of delivery of
such notice, the Company shall compensate Employee as set forth in Section 3
hereof);
For purpose of this Agreement, "Disability" means a disability which,
is determined to be total and permanent by a physician selected by the Company
or the insurers providing disability insurance to the Company and consented to
by the Employee or his legal representative (such consent not to be withheld
unreasonably) to the extent permitted by law. If no such insurance is in force,
or if no such determination has been made, "Disability" shall refer to a
medically determinable physical or mental condition disabling Employee from
substantially performing his duties hereunder.
5.3 For Cause. The Company may terminate the Employee's Employment and
this Agreement for Cause with 30 days notice. For purposes of this Agreement,
"Cause" means (i) an act or acts of dishonesty on the Employee's part which
result in or are intended to result in his substantial personal enrichment at
the expense of the Company; or (ii) violation(s) by the Employee of his
obligations under Article 2 of this Agreement, which violations are willful or
grossly negligent on the Employee's part and which were intended to result in or
have resulted in material injury to the Company, its parent, affiliates or any
divisions managed by the Employee; or (iii) any material breach of this
Agreement by Employee.
5.4 Other Than For Cause. The Company may terminate the Employee's
employment other than for Cause ("Without Cause") upon 60 days notice.
6. Resignation by Employee.
6.1 For Good Reason. The Employee may resign his employment for Good
Reason ("Good Reason") with 30 days notice. For purposes of this Agreement,
"Good Reason" is defined as follows:
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6.1.1 Adverse Change. Without the express written consent of
the Employee, (i) the Company's assignment to the Employee of any duties
inconsistent in any substantial respect with the Employee's position, authority
or responsibilities as contemplated by Article 2 of this Agreement, or (ii) any
other substantial adverse change in such position including titles, authority or
responsibilities, provided that the Company fails to cure any such adverse
change within 30 days of receipt of written notice from the Employee regarding
the adverse change.
6.1.2 Failure to Comply. Any failure by the Company to comply
with any of the provisions of Article 3 of this Agreement, other than an
insubstantial and inadvertent failure remedied by the Company 30 business days
after receipt of notice thereof given by the Employee.
6.1.3 Change of Location. The Company's requiring the Employee
to be based at any office or location more than 30 miles from the location of
the Company's principal office, except for travel reasonably required in the
performance of the Employee's responsibilities.
6.1.4 Good Faith. In the event that the Employee shall in good
faith give a "Notice of Resignation," as hereinafter defined in paragraph 7.1
hereof, for Good Reason and it shall thereafter be determined that Good Reason
did not exist, the employment of the Employee shall, unless the Company and the
Employee shall otherwise mutually agree, be deemed to have terminated at the
date of the giving of such purported Notice of Resignation. In such event, the
Employee shall be deemed to have resigned without Good Reason.
6.2 Voluntary Resignation without Good Reason. Employee may
resign from his Employment at any time voluntarily without Good Reason
with 60 days notice to the Company.
7. Termination - Miscellaneous
7.1 Notice of Termination or Resignation. Any Termination by the
Company for Cause or Without Cause, or Resignation by the Employee for Good
Reason or without Good Reason shall be communicated by Notice of Termination to
the other party hereto given in accordance with paragraph 7 hereof.
For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the termination date is
other than the date of receipt of such notice, specifies the termination date of
this Agreement which date shall be in accordance with the specific termination
provision in this Agreement relied upon.
7.2 Date of Termination or Resignation. For purposes of this Agreement,
the "Date of Termination and/or Resignation" (aka "Date of Termination"
hereinafter) shall mean the date the Employee receives the Notice of
Termination.
Notwithstanding any contrary provision contained in this Agreement, (i)
if the Employee is terminating this Agreement in order to resign Without Good
Reason, the Date of Termination shall not be the date of receipt of such Notice
of Termination but shall be a date specified therein, which date shall be not
less than 60 days after giving such Notice of Termination; (ii) if the
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Employee's employment is terminating due to Disability, the Date of Termination
shall be the Disability Effective Date; (iii) if the Employee's employment
terminates due to the Employee's death, the Date of Termination shall be the
date of death; and (iv) if the Employee's employment is terminated Without
Cause, the Date of Termination shall not be the date of receipt of such Notice
of Termination but shall be a date specified therein, which date shall be not
less than 60 days after giving such Notice of Termination; (v) if the Company
terminates the Employee's employment with Cause, or if Employee resigns with
Good Reason, the date of termination.
8. Obligations upon Termination or Resignation.
8.1 Death. Upon a termination of Employee's employment by the Company
for death or Disability, Employee (or his/her estate, as applicable) shall be
entitled to the following: (i) any unvested option shall become fully vested and
immediately exercisable and any restrictions on restricted stock that was
awarded to Employee by the Company during the Employment Period shall lapse
immediately; and (ii) the exercise period with respect to any stock option shall
continue until the earlier of the last day of the three-year period following
the termination of employment or the expiration date of such option according to
its terms; provided that Employee has not been provided with notice of
termination.
8.2 Termination of Employee With Cause; Resignation Without Good
Reason. If the Company terminates Employee for Cause or Employee resigns without
Good Reason, the Employment Period of this Agreement shall end and this
Agreement shall expire and the Company shall have no further obligation to
Employee except to the extent that Employee is otherwise entitled to any accrued
but unpaid salary, bonus or benefits hereunder and insurance coverage in
accordance with applicable law. Notwithstanding any expiration of the Employment
Period or termination of this Agreement; the provisions set forth in Sections 10
and 11 shall remain in full force and effect after the termination of Employee's
employment hereunder.
Any severance benefits provided under this Section 8 shall be subject
to Employee's execution and delivery, and non-revocation within any applicable
revocation period, of a mutual general release of claims in a form satisfactory
to the Company and Employee; provided, however, that the Company shall not be
required to release Employee from any claims arising out of or resulting from
Employee's willful misconduct, fraud, embezzlement, breach of fiduciary duty, or
breach of Sections 10 and 11 hereof.
Employee shall not be required to seek other employment or otherwise
attempt to mitigate damages to be entitled to any of the termination benefits
provided in this Section 8; provided, however, that the amount of any payment or
benefit provided for in this section shall be reduced by any compensation earned
by Employee as a result of consultancy with or employment by another entity or
individual during the payout period under such Section; and provided further,
however, that any compensation earned by Employee from service as a board member
of the Company or any other entity shall not reduce such payments or benefits.
8.3 Termination Without Cause; Resignation for Good Reason; Disability.
Upon a termination of Employee's employment by the Company other than for
Disability or Cause, or by Employee for Good Reason, Employee (or his/her estate
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in the event he/she dies after his/her termination, as applicable) shall be
entitled to the following: (i) an amount equal to one (1) time Employee's Annual
Base Salary, which amount shall be payable over one year following the date of
termination in accordance with the regular payroll practices of the Company;
(ii) any unvested stock option shall become fully vested and immediately
exercisable and any restrictions on restricted stock that was awarded to
Employee by the Company during the Employment Period shall lapse immediately;
(iii) the exercise period with respect to any stock option shall continue until
the earlier of the last day of the three-year period following the termination
of employment or the expiration date of such option according to its terms; and
(iv) continuation of health insurance benefits consistent with those provided by
the Company to its similar level Employees until the end of the Employment
Period, such period determined without regard to such termination; provided,
however, that the percentage of the cost of such coverage paid by the Company
shall not be less than the percentage of such costs that was paid by the Company
immediately prior to the expiration date of the Agreement.
Notwithstanding any expiration of the Employment Period or termination
of this Agreement; the provisions set forth in Sections 10 and 11 shall remain
in full force and effect after the termination of Employee's employment
hereunder.
Any severance benefits provided under this Section 8 shall be subject
to Employee's execution and delivery, and non-revocation within any applicable
revocation period, of a mutual general release of claims in a form satisfactory
to the Company and Employee; provided, however, that the Company shall not be
required to release Employee from any claims arising out of or resulting from
Employee's willful misconduct, fraud, embezzlement, breach of fiduciary duty, or
breach of Sections 10 and 11 hereof.
Employee shall not be required to seek other employment or otherwise
attempt to mitigate damages to be entitled to any of the termination benefits
provided in this Section 8; provided, however, that the amount of any payment or
benefit provided for in this section shall be reduced by any compensation earned
by Employee as a result of consultancy with or employment by another entity or
individual during the payout period under such Section; and provided further,
however, that any compensation earned by Employee from service as a board member
of the Company or any other entity shall not reduce such payments or benefits.
In the event the Company or any member of the Board asserts that
Employee has breached Section 10 or 11 hereof, then the Company shall notify
Employee. Nothing in this Section 8 shall impair the Company's right to seek or
obtain injunctive or other equitable relief at any time in any court having
jurisdiction to enforce the provisions of Section 10 or Section 11 hereof.
Employee's obligations under Section 10 and Section 11 of this
Agreement shall survive any termination of this Agreement. Notwithstanding any
of the foregoing, in the event that Employee were to violate Section 10 or 11,
any benefit or amount payable to Employee pursuant to this Section 8 shall be
forfeited and cancelled immediately upon such violation.
8.4 Termination by Company Other Than for Disability or Cause, Employee
for Good Reason Occurring Within Two Years of Change of Control. Upon a
termination of Employee's employment by the Company other than for Disability or
Cause or by Employee for Good Reason that occurs within two years following a
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Change of Control, Employee (or his/her estate in the event he/she dies after
his/her termination, as applicable) shall be entitled to the following: (i) an
amount equal to one (1) time Employee's Annual Base Salary, which amount shall
be payable over one year following the date of termination in accordance with
the regular payroll practices of the Company; (ii) any unvested stock option
shall become fully vested and immediately exercisable and any restrictions on
restricted stock that was awarded to Employee by the Company during the
Employment Period shall lapse immediately; (iii) the exercise period with
respect to any stock option shall continue until the earlier of the last day of
the three-year period following the termination of employment or the expiration
date of such option according to its terms; and (iv) continuation of health
insurance benefits consistent with those provided by the Company to its similar
level Employees until the end of the Employment Period, such period determined
without regard to such termination; provided, however, that the percentage of
the cost of such coverage paid by the Company shall not be less than the
percentage of such costs that was paid by the Company immediately prior to the
expiration date of the Agreement.
"Change of Control" for the purposes of this Agreement, shall have the
meaning set forth in Exhibit C, hereto.
In the event the Company or any member of the Board asserts that
Employee has breached Section 10 or 11 hereof, then the Company shall notify
Employee. Nothing in this Section 8 shall impair the Company's right to seek or
obtain injunctive or other equitable relief at any time in any court having
jurisdiction to enforce the provisions of Section 10 or Section 11 hereof.
Employee's obligations under Section 10 and Section 11 of this
Agreement shall survive any termination of this Agreement. Notwithstanding any
of the foregoing, in the event that Employee were to violate Section 10 or 11,
any benefit or amount payable to Employee pursuant to this Section 8 shall be
forfeited and cancelled immediately upon such violation.
8.5 Non-Extension of Contract Term. In the event that the Company gives
written notice that it does not wish to extend the Employment Period, Employee
(or his/her estate in the event he/she dies after his/her termination, as
applicable) shall be entitled to the following: (i) an amount equal to one (1)
time Employee's Annual Base Salary, which amount shall be payable over one year
following the date of termination in accordance with the regular payroll
practices of the Company; (ii) any unvested stock option shall become fully
vested and immediately exercisable and any restrictions on restricted stock that
was awarded to Employee by the Company during the Employment Period shall lapse
immediately; (iii) the exercise period with respect to any stock option shall
continue until the earlier of the last day of the three-year period following
the termination of employment or the expiration date of such option according to
its terms; and (iv) continuation of health insurance benefits consistent with
those provided by the Company to its similar level Employees until the end of
the Employment Period, such period determined without regard to such
termination; provided, however, that the percentage of the cost of such coverage
paid by the Company shall not be less than the percentage of such costs that was
paid by the Company immediately prior to the expiration date of the Agreement.
In the event the Company or any member of the Board asserts that
Employee has breached Section 10 or 11 hereof, then the Company shall notify
Employee. Nothing in this Section 8 shall impair the Company's right to seek or
obtain injunctive or other equitable relief at any time in any court having
jurisdiction to enforce the provisions of Section 10 or Section 11 hereof.
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Employee's obligations under Section 10 and Section 11 of this
Agreement shall survive any termination of this Agreement. Notwithstanding any
of the foregoing, in the event that Employee were to violate Section 10 or 11,
any benefit or amount payable to Employee pursuant to this Section 8 shall be
forfeited and cancelled immediately upon such violation.
9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any of its
affiliated companies and for which the Employee may qualify, nor shall anything
herein limit or otherwise affect such rights as the Employee may have under any
stock option or other Agreements with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Employee is otherwise
entitled to receive under any plan or program of the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan or program.
10. Proprietary Information of the Company.
10.1 At no time during or after Employee's employment with the Company
will Employee (i) use Confidential Information (as defined below in Section
10.3) for any purpose other than during such employment as directed by the
Company or (ii) disclose Confidential Information to any person or entity other
than the Company or persons or entities to whom disclosure has been authorized
by the Company in writing (except that Employee may disclose such information to
the minimum extent necessary to comply with governmental or judicial process, so
long as Employee promptly notifies the Company of such pending disclosure and
consults with the Company concerning the advisability of seeking a protective
order or other means of preserving the confidentiality of the Confidential
Information).
10.2 During the Term, Employee shall promptly communicate to Company
all ideas, discoveries and inventions which relate to the Company and which are
or may be useful to the Company. Employee acknowledges that all such ideas,
discoveries, inventions, and improvements, which relate to the Company and which
are made, conceived, or reduced to practice by his/her or jointly with others
and every item of knowledge relating to the Company's business interests
(including potential business interests) gained by his/her during the course of
his/her employment hereunder are the property of the Company and Employee hereby
irrevocably assigns all such ideas, discoveries, inventions, improvements, and
knowledge to the Company for its sole use and benefit, without additional
compensation. Employee further agrees to cooperate fully with Company to perfect
Company's interest and title to all such ideas, discoveries, inventions and
improvements. Notwithstanding the foregoing, pursuant to California Labor Code
section 2870, Employee shall not be required to assign to the Company any
inventions that Employee developed entirely on his/her own time without use of
the Company's equipment, supplies, facilities or trade secret information unless
they either (i) relate at the time of conception or reduction to practice of the
invention to the Company's business or demonstrably anticipated research and
development or (ii) result from work performed by Employee for the Company.
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10.3 As used herein, "Confidential Information" means all information
of a technical or business nature relating to the Company, including without
limitation trade secrets, recipes, inventions, drawings, file data,
documentation, diagrams, specifications, know-how, processes, formulas, models,
test results, marketing techniques and materials, marketing and development
plans, price lists, pricing policies, business plans, information relating to
customer or supplier identities, characteristics and agreements, financial
information and projections, flow charts, software in various stages of
development, source codes, object codes, research and development procedures and
employee files and information; provided, however, that "Confidential
Information" shall not include any information that has become public knowledge
through no fault of Employee. Employee also agrees not to disclose any
confidential or proprietary information that the Company obtains from a third
party and which the Company treats as confidential or proprietary or designates
as confidential, whether or not such information is owned or developed by the
Company. All Confidential Information, regardless of form, is the exclusive
property of the Company.
11. Non-Compete; Non-Solicit.
11.1 Employee agrees that during the Employment Period, Employee shall
not directly or indirectly, either individually or as an investor, owner,
partner, agent, employee, independent contractor, consultant or otherwise,
engage in any restaurant or other retail business, including but not limited to
any business that sells pizza or other menu items offered by the Company or any
subsidiary of the Company.
11.2 Employee agrees that while he is employed by the Company, and for
so long as Employee receives any payments pursuant to Section 8 above, he will
not, directly or indirectly, solicit for employment or attempt to solicit for
employment any person who was an employee, officer or director of the Company at
any time during the 12 months preceding the date that Employee's employment with
the Company is terminated.
11.3 As the violation by Employee of the provisions of Section 10 or
this Section 11 would cause irreparable injury to the Company due to among other
things his knowledge of trade secrets and proprietary information or rights, and
there is no adequate remedy at law for such violation, the Company shall have
the right in addition to any other remedies available, at law or in equity, to
seek to enjoin Employee in a court of equity from violating such provisions.
Employee hereby waives any and all defenses he may have on the ground of lack of
jurisdiction, forum non conveniens, or competence of the court to grant an
injunction or other equitable relief, or otherwise and Employee further agrees
to waive any requirement for a bond or undertaking. The existence of this right
shall not preclude any other rights and remedies at law or in equity which the
Company may have.
12. Assignment
12.1 Assignment by Employee. This Agreement is personal to the Employee
and without the prior written consent of the Company shall not be assignable by
the Employee otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Employee's legal representatives.
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12.2 Assignment by Company. Notwithstanding anything in this Agreement,
Employee agrees that this Agreement may be assigned by the Company.
12.3 Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether directly or indirectly, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance
satisfactory to the Employee, expressly to assume and agree to perform this
Agreement in same manner and to the same extent as the Company would be required
to perform if no such succession had taken place.
13. Miscellaneous.
13.1 Modifications. This Agreement sets forth the entire understanding
and agreement between the Employee and the Company with respect to the subject
matter hereof, and may be modified only by a written instrument duly executed by
the Employee and the Company. This Agreement supersedes and replaces any and all
prior agreements and understandings concerning Employee's employment with the
Company entered into prior to the date hereof.
13.2 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without reference to
principles of conflict of laws. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the Employee and the Company
or their respective successors. A civil action in connection with this Agreement
whether or not based on a tort or otherwise, shall be filed in the County of Los
Angeles.
13.3 Notice. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employee to:
Xxxx Sugueti
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Confirm: (000) 000-0000
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If to the Company, to:
Xxxxx Xxxxxxx
c/o California Pizza Kitchen, Inc.
0000 Xxxx Xxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Confirm: (000) 000-0000
with copies to:
Xxxxxxx & Xxxxxxxxxx LLP
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
Confirm: (000) 000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressees.
13.4 Equitable Relief. Since a breach of the provisions of this
Agreement could not adequately be compensated by money damages, the Company
shall be entitled, in addition to any other right and remedy available to it, to
an injunction restraining such breach or a threatened breach, and in either case
no bond or other security shall be required in connection therewith, and
Employee hereby consents to the issuance of such injunction.
13.5 Relationship of Parties. Except for authority granted to Employee
by the Company in order to enable Employee to fulfill the obligations set forth
in this Agreement, nothing contained in this Agreement shall authorize, empower,
or constitute Employee the agent of the Company in any manner; authorize or
empower Employee to assume or create any obligation or responsibility
whatsoever, express or implied, on behalf of or in the name of the Company.
13.6 Waiver. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or any breach of any other provision of this Agreement.
The failure of a party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be a waiver or deprive the party of
the right hereunder to insist upon strict adherence to that term or any other
term of this Agreement. Any waiver must be in writing and signed by the waving
party.
13.7 Severability. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
12
13.8 Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
13.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.10 Dispute Resolution. If any dispute under this Agreement is not
settled or resolved within thirty (30) days after the receipt by each party of
written notice of dispute, the matter shall be submitted to binding arbitration,
such arbitration to be conducted in the State of California and, unless
otherwise agreed, such arbitration will be conducted in accordance with the
rules and procedures of the American Arbitration Association. The arbitrator, in
its final decision, shall determine which party or parties shall bear the costs
of the arbitration, including attorneys fees and expenses.
13.11 Deductions and Other Tax Matters. Anything to the contrary herein
notwithstanding, the Company shall, and is hereby authorized to, withhold or
deduct from any amounts payable by the Company to Employee any foreign, federal,
state or municipal taxes, social security contributions or other amounts
required to be withheld by law, and to report and remit such amounts to the
proper authorities. Anything to the contrary herein notwithstanding, all
benefits or payments provided by the Company to Employee that would be deemed to
constitute "deferred compensation" under Section 409A of the Internal Revenue
Code of 1986, as amended (the "Code") are intended to comply with Section 409A
and, in the event that any such benefit or payment is deemed to not comply with
Section 409A, the Company and Employee agree to renegotiate in good faith any
such benefit or payment so that either (i) Section 409A would not apply or (ii)
compliance with Section 409A would be achieved.
14. Interpretation. If any provisions of this Agreement is challenged as,
or concluded to be, ambiguous the normal rule of construction that any
ambiguities are to be resolved against the drafting party shall not be used
interpreting this Agreement.
13
IN WITNESS WHEREOF, the Employee has hereunto set his hand and pursuant
to the authorization from its Vice President of Human Resources, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxx Sugueti November 22, 2006
----------------------------------- ------------------------
Employee Date
ATTEST:
/s/ Xxxxx Xxxxxxx November 27, 2006
----------------------------------- ------------------------
Officer Date
/s/ Xxxxx Xxxxxxx
-----------------------------------
(Print)
14
EXHIBIT A
CALIFORNIA PIZZA KITCHEN, INC.
2004 OMNIBUS INCENTIVE COMPENSATION PLAN (THE "PLAN")
STOCK OPTION AGREEMENT
SECTION 1. KIND OF OPTION.
This Option is intended to be either an incentive stock option intended
to meet the requirements of section 422 of the Internal Revenue Code (an "ISO")
or a non-statutory option (an "NSO"), which is not intended to meet the
requirements of an ISO, as indicated in the Notice of Stock Option Grant. Even
if this Option is designated as an ISO, it shall be deemed to be an NSO to the
extent required by the $100,000 annual limitation under Section 422(d) of the
Code.
SECTION 2. VESTING.
Subject to the terms and conditions of the Plan and this Stock Option
Agreement (the "Agreement"), your Option will be exercisable with respect to the
Shares that have become vested in accordance with the schedule set forth in the
Notice of Stock Option Grant (the "Notice"). Except as otherwise provided in the
Notice, after your Service terminates for any reason, vesting of your Shares
immediately stops and your Option expires immediately as to the number of Shares
that are not vested as of your Service termination date.
SECTION 3. TERM.
Your Option will expire in any event at the close of business at
Company headquarters ten years after the Date of Grant; provided, however, that
if your Option is an ISO it will expire five years after the Date of Grant if
you are a more than ten-percent stockholder of the Company (the "Expiration
Date"). Also, your Option will expire earlier if your Service terminates, as
described herein.
SECTION 4. REGULAR TERMINATION.
(a) Except as otherwise provided in the Notice, if your Service
terminates for any reason except termination without Cause,
death, Disability, or Retirement (as such capitalized terms
are defined below), the vested portion of your Option will
expire at the close of business at Company headquarters on the
date of termination of your Service.
(b) Except as otherwise provided in the Notice, if your Service
terminates due to termination without Cause or Retirement, the
vested portion of your Option will expire at the close of
business at Company headquarters on the date two months after
the date of your termination without Cause or Retirement.
CALIFORNIA PIZZA KITCHEN, INC.
STOCK OPTION AGREEMENT
A-1
(c) If your Option is an ISO and you exercise it more than three
months after termination of your Service as an Employee for
any reason other than death or total and permanent disability
as defined under section 22(e)(3) of the Code, your Option
will cease to be eligible for ISO tax treatment.
(d) Your Option will cease to be eligible for ISO tax treatment if
you exercise it more than three months after the 90th day of a
bona fide leave of absence approved by the Company, unless
your right to reemployment after your leave was guaranteed by
statute or contract.
(e) Solely for purposes of your Option, "Cause", "Retirement" and
"Disability" are defined as follows.
(1) "Cause" has the definition set forth in your
employment agreement with the Company, or, if you do
not have an employment agreement, includes, without
limitation: (i) your commission of a felony or other
crime involving moral turpitude; (ii) your negligence
or willful misconduct in connection with the
performance of your duties for the Company; (iii)
your willful failure to follow the lawful
instructions of your supervisor; and (iv) a breach of
your fiduciary duty to the Company for personal
profit or otherwise.
(2) "Retirement" means retirement from full-time
employment by the Company in accordance with the
normal retirement policies of the Company.
(3) "Disability" means your inability to perform a major
part of the duties to be performed by you as an
employee of the Company immediately prior to the
inception of the disability, because of illness,
accident or injury, for a period of twenty-six
consecutive weeks or for a cumulative period of
thirty weeks in any twelve month period.
SECTION 5. DEATH.
Except as otherwise provided in the Notice, if you die while in Service
with the Company, the vested portion of your Option will expire at the close of
business at Company headquarters on the date three months after the date of your
death. During that three month period, your estate, legatees or heirs may
exercise that portion of your Option that was vested on the date of your death.
Notwithstanding the foregoing, the Option may not be exercised after the
Expiration Date determined under Section 3 above.
SECTION 6. DISABILITY.
Except as otherwise provided in the Notice, if your Service terminates
because of a Disability, the vested portion of your Option will expire at the
close of business at Company headquarters on the date two months after your
termination date. During that two month period, you may exercise that portion of
your Option that was vested on the date of your Disability.
CALIFORNIA PIZZA KITCHEN, INC.
STOCK OPTION AGREEMENT
A-2
SECTION 7. EXERCISING YOUR OPTION.
To exercise your Option, you must provide notice according to such
procedures as may be prescribed by the Company. Your exercise will be effective
when appropriate notice together with full payment is received by the Company.
If someone else wants to exercise your Option after your death, that person must
prove to the Company's satisfaction that he or she is entitled to do so.
SECTION 8. PAYMENT FORMS.
When you exercise your Option, you must include payment of the Exercise
Price for the Shares you are purchasing in cash or cash equivalents.
Alternatively, you may pay all or part of the Exercise Price by surrendering, or
attesting to ownership of, Shares already owned by you, unless such action would
cause the Company to recognize any (or additional) compensation expense with
respect to the Option for financial reporting purposes. Such Shares shall be
surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date of Option exercise. To the extent that a
public market for the Shares exists and to the extent permitted by applicable
law, in each case as determined by the Company, you also may exercise your
Option by delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker to sell Shares and to deliver all or part of
the sale proceeds to the Company in payment of the aggregate Exercise Price and,
if requested, applicable withholding taxes. The Company will provide the forms
necessary to make such a cashless exercise. Payment also may be made all or in
part by delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker or lender to pledge Shares as a security for a
loan, and to deliver all or part of the loan proceeds to the Company in payment
of the aggregate Exercise Price and, if requested, applicable withholding taxes.
Notwithstanding the foregoing, payment may not be made in any form that is
unlawful, as determined by the Company in its sole discretion. The Board may
permit such other payment forms as it deems appropriate, subject to applicable
laws, regulations and rules.
SECTION 9. NO DUTY TO TRANSFER IN VIOLATION OF THIS AGREEMENT
The Company will not be required (a) to transfer on its books any
shares of Common Stock of the Company which have been sold or transferred in
violation of any of the provisions set forth in this Agreement or (b) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares have been so transferred.
SECTION 10. TAX WITHHOLDING AND REPORTING.
(a) You will not be allowed to exercise this Option unless you
pay, or make acceptable arrangements to pay, any taxes
required to be withheld as a result of the Option exercise or
the sale of Shares acquired upon exercise of this Option. You
hereby authorize withholding from payroll or any other payment
due you from the Company or your employer to satisfy any such
withholding tax obligation.
CALIFORNIA PIZZA KITCHEN, INC.
STOCK OPTION AGREEMENT
A-3
(b) If you sell or otherwise dispose of any of the Shares acquired
pursuant to an ISO on or before the later of (i) two years
after the grant date, or (ii) one year after the exercise
date, you shall immediately notify the Company in writing of
such disposition.
SECTION 11. RESALE RESTRICTIONS/MARKET STAND-OFF.
You agree that in connection with any underwritten public offering by
the Company of its equity securities pursuant to an effective registration
statement filed under the U.S. Securities Act of 1933, as amended, you will not,
without the prior written consent of the Company, directly or indirectly, sell,
make any short sale of, contract to sell, transfer the economic risk of
ownership in, loan, hypothecate, pledge, grant any option for the purchase of,
or otherwise dispose of or transfer for value or agree to engage in any of the
foregoing transactions with respect to any equity securities of the Company for
such period of time after the effective date of such registration statement as
may be requested by the Company. Such period of time will not exceed one hundred
eighty (180) days; provided, however, that in the event the Company requests
that the one hundred eighty (180) day period be extended or modified pursuant to
then-applicable law, rules, regulations or trading policies, the restrictions
imposed during the one hundred eighty (180) day period will continue to apply to
the extent necessary to comply with such law, rules, regulations or trading
policies. You agree to execute and deliver such other agreements as may be
reasonably requested by the Company which are consistent with the foregoing or
which are necessary to give further effect thereto. To enforce the provisions of
this Section, the Company may impose stop-transfer instructions with respect to
the Common Stock until the end of the applicable stand-off period.
SECTION 12. TRANSFER OF OPTION.
Prior to your death, only you may exercise this Option. This Option and
the rights and privileges conferred hereby cannot be sold, pledged or otherwise
transferred (whether by operation of law or otherwise) and shall not be subject
to sale under execution, attachment, levy or similar process. For instance, you
may not sell this Option or use it as security for a loan, except in accordance
with Section 8 hereof. If you attempt to do any of these things, this Option
will immediately become invalid. You may, however, dispose of this Option in
your will. Regardless of any marital property settlement agreement, the Company
is not obligated to honor an Exercise Notice from your spouse or former spouse,
nor is the Company obligated to recognize such individual's interest in your
Option in any other way.
SECTION 13. RETENTION RIGHTS.
This Agreement does not give you the right to be retained by the
Company in any capacity. The Company reserves the right to terminate your
Service at any time and for any reason without thereby incurring any liability
to you.
SECTION 14. STOCKHOLDER RIGHTS.
Neither you nor your estate or heirs have any rights as a stockholder
of the Company until a certificate for the Shares acquired upon exercise of this
Option has been issued. Once a certificate for the Shares acquired upon exercise
CALIFORNIA PIZZA KITCHEN, INC.
STOCK OPTION AGREEMENT
A-4
of this Option has been issued, you will have all the rights and privileges of a
stockholder of the Company with respect to the Common Stock. No adjustments are
made for dividends or other rights if the applicable record date occurs before
your stock certificate is issued, except as described in the Plan.
SECTION 15. ADJUSTMENTS.
In the event of a stock split, a stock dividend or a similar change in
the Company's Stock, the number of Shares covered by this Option and the
Exercise Price per share may be adjusted pursuant to the Plan. Your Option shall
be subject to the terms of the agreement of merger, liquidation or
reorganization in the event the Company is subject to such corporate activity as
set forth in the Plan.
SECTION 16. APPLICABLE LAW AND TAX DISCLAIMER.
This Agreement will be interpreted and enforced under the laws of the
State of Delaware (without regard to their choice of law provisions). You agree
that you are responsible for consulting your own tax advisor as to the tax
consequences associated with your Option. The tax rules governing options are
complex, change frequently and depend on the individual taxpayer's situation.
Although the Company will make available to you general tax information about
stock options, you agree that the Company shall not be held liable or
responsible for making such information available to you and any tax or
financial consequences that you may incur in connection with your Option.
SECTION 17. THE PLAN AND OTHER AGREEMENTS.
The text of the Plan is incorporated in this Agreement by reference.
Certain capitalized terms used in this Agreement are defined in the Plan. The
Notice, this Agreement, including its attachments, and the Plan constitute the
entire understanding between you and the Company regarding this Option. Any
prior agreements, commitments or negotiations concerning this Option are
superseded.
CALIFORNIA PIZZA KITCHEN, INC.
STOCK OPTION AGREEMENT
A-5
EXHIBIT B
CALIFORNIA PIZZA KITCHEN, INC.
2004 OMNIBUS INCENTIVE COMPENSATION PLAN
NOTICE OF STOCK OPTION GRANT
California Pizza Kitchen, Inc. (the "Company") hereby grants you the
following Option to purchase shares of its common stock ("Shares"). The terms
and conditions of this Option are set forth in the Stock Option Agreement and
the CALIFORNIA PIZZA KITCHEN, INC. 2004 OMNIBUS INCENTIVE COMPENSATION PLAN (the
"Plan"), both of which are attached to and made a part of this document.
Date of Grant: [Date of Grant]
Name of Optionee: [Name of Optionee]
Number of Option Shares: [Number of Shares]
Exercise Price per Share: $[Exercise Price] (The Exercise
Price per Share shall not be less than one
hundred percent (100%) of the Fair Market Value.
If Optionee is a more than ten-percent
stockholder, the Exercise Price per Share of an
ISO shall be at least one hundred ten percent
(110%) of Fair Market Value.)
Vesting Start Date: [Vesting Start Date]
Type of Option: [Type of Grant: NSO/ISO]
Vesting Schedule: [Vesting Schedule]
Rights upon Termination: [Vesting/Termination Schedule]
By signing this document, you acknowledge receipt of a copy of the
Plan, and agree that (a) you have carefully read, fully understand and agree to
all of the terms and conditions described in the attached Stock Option
Agreement, and the Plan document; and (b) you understand and agree that this
Stock Option Agreement, including its cover sheet and attachments, constitutes
the entire understanding between you and the Company regarding this Option, and
that any prior agreements, commitments or negotiations concerning this Option
are replaced and superseded.
[NAME OF OPTIONEE] CALIFORNIA PIZZA KITCHEN, INC.
By:
--------------------------------------------- ---------------------------
Its:
---------------------------
CALIFORNIA PIZZA KITCHEN, INC.
NOTICE OF STOCK OPTION GRANT
B-1
EXHIBIT C
DEFINITIONS
1. "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
2. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.
3. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
4. "Change in Control" shall be deemed to have occurred if the event
set forth in any one of the following paragraphs shall have occurred:
(a) any Person (as defined in Exhibit "C" herein) is or
becomes the Beneficial Owner (as defined in Exhibit "C" herein), directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its affiliates) representing 30% or more of the combined voting power
of the Company's then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause (A)
of paragraph (c) below; or
(b) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals who,
on the Effective Date, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company's
shareholders was approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was previously
so approved or recommended; or
(c) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation, other than (A) a merger or consolidation which results in the
directors of the Company immediately prior to such merger or consolidation
continuing to constitute at least a majority of the board of directors of the
Company, the surviving entity or any parent thereof or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
CALIFORNIA PIZZA KITCHEN, INC.
DEFINITIONS
C-1
securities Beneficially Owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 30% or more of the combined
voting power of the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 70% of the
combined voting power of the voting securities of which are owned by
shareholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to have occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
5. "ASAP" shall mean California Pizza Kitchen's "ASAP" entity and/or
concept.
CALIFORNIA PIZZA KITCHEN, INC.
DEFINITIONS
C-2
