Employee Stock Purchase Plan - California Pizza Kitchen Inc.
CALIFORNIA PIZZA KITCHEN, INC.
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EMPLOYEE STOCK PURCHASE PLAN
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Adopted November 2, 1999
Approved by Stockholders on November 2, 1999
1. PURPOSE.
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(a) The purpose of the California Pizza Kitchen, Inc. Employee Stock
Purchase Plan (the "Plan") is to provide a means by which employees
of California Pizza Kitchen, Inc., a California corporation (the
"Company"), and its Affiliates, as defined in subparagraph l(b),
which are designated as provided in subparagraph 2(b), may be given
an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent corporation
or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees,
and to provide incentives for such persons to exert maximum efforts
for the success of the Company.
(d) The Company intends that the rights to purchase stock of the Company
granted under the Plan be considered options issued under an
"employee stock purchase plan" as that term is defined in Section
423(b) of the Code.
2. ADMINISTRATION.
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(a) The Plan shall be administered by the Board of Directors (the "Board")
of the Company unless and until the Board delegates administration to
a Committee, as provided in subparagraph 2(c). Whether or not the
Board has delegated administration, the Board shall have the final
power to determine all questions of policy and expediency that may
arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the
Company shall be granted and the provisions of each offering of
such rights (which need not be identical).
(ii) To designate from time to time which Affiliates of the Company
shall be
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eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights granted under it,
and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan,
in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to a Committee
composed of not fewer than three members of the Board (the
"Committee"). If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of the
Plan, the powers theretofore possessed by the Board, subject, however,
to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
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(a) Subject to the provisions of paragraph 12 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to rights
granted under the Plan shall not exceed in the aggregate 750,000
shares of the Company's $0.01 par value Class A common stock (the
"Common Stock"). If any right granted under the Plan shall for any
reason terminate without having been exercised, the Common Stock not
purchased under such right shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. GRANT OF RIGHTS, OFFERING.
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(a) The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the
Plan to eligible employees (an "Offering") on a date or dates (the
"Offering Date(s)") selected by the Board or the Committee. Each
Offering shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate.
(b) The provisions of separate Offerings need not be identical, but each
Offering shall include (through incorporation of the provisions of
this Plan by reference in the Offering or otherwise) the substance of
the provisions contained in paragraphs 5
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through 8, inclusive.
5. ELIGIBILITY.
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(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b),
to employees of any Affiliate of the Company. Except as provided in
subparagraph 5(b), an employee of the Company or any Affiliate shall
not be eligible to be granted rights under the Plan, unless, on the
Offering Date, such employee has been in the employ of the Company or
any Affiliate for such continuous period preceding such grant as the
Board or the Committee may require, but in no event shall the required
period of continuous employment be equal to or greater than two years.
In addition, unless otherwise determined by the Board or the Committee
and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights
under the Plan, unless, on the Offering Date, such employee's
customary employment with the Company or such Affiliate is at least 20
hours per week.
(b) The Board or the Committee may provide that, each person who, during
the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in
the Offering which coincides with the day on which such person becomes
an eligible employee or occurs thereafter, receive a right under that
Offering, which right shall thereafter be deemed to be a part of that
Offering. Such right shall have the same characteristics as any
rights originally granted under that Offering, as described herein,
except that:
(c) the date on which such right is granted shall be the "Offering Date"
of such right for all purposes, including determination of the
exercise price of such right, provided, however, that if the fair
market value of the Common Stock on the date on which such right is
granted is less than the fair market value of the Common Stock on the
first business day of the Offering, then, solely for the purpose of
determining the exercise price of such right, the first business day
of the Offering shall be the "Offering Date" for such right;
(i) the Offering Period (as defined below) for such right shall
begin on its Offering Date and end coincident with the end of
such Offering; and
(ii) the Board or the Committee may provide that if such person
first becomes an eligible employee within a specified period of
time before the end of the Offering Period (as defined below)
for such Offering, he or she will not receive any right under
that Offering.
(d) No employee shall be eligible for the grant of any rights under the
Plan if, immediately after any such rights are granted, such employee
owns stock possessing 5% or more of the total combined voting power or
value of all classes
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of stock of the Company or of any Affiliate. For purposes of this
subparagraph 5(c), the rules of Section 424(d) of the Code shall apply
in determining the stock ownership of any employee, and stock which
such employee may purchase under all outstanding rights and options
shall be treated as stock owned by such employee.
(e) An eligible employee may be granted rights under the Plan only if such
rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by
Section 423(b)(8) of the Code, do not permit such employee's rights to
purchase stock of the Company or any Affiliate to accrue at a rate
which exceeds $25,000 of fair market value of such stock (determined
at the time such rights are granted) for each calendar year in which
such rights are outstanding at any time.
6. RIGHTS, PURCHASE PRICE.
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(a) On each Offering Date, each eligible employee, pursuant to an Offering
made under the Plan, shall be granted the right to purchase up to the
number of shares of Common Stock of the Company purchasable with a
portion of employee's Earnings designated by the Board or the
Committee, not exceeding 15% of such employee's Earnings (as defined
in Section 7(a)), during the period which begins on the Offering Date
(or such later date as the Board or the Committee determines for a
particular Offering) and ends on the date stated in the Offering,
which date shall be no more than 27 months after the Offering Date
(the "Offering Period"). In connection with each Offering made under
this Plan, the Board or the Committee shall specify a maximum number
of shares which may be purchased by any employee as well as a maximum
aggregate number of shares which may be purchased by all eligible
employees pursuant to such Offering. In any event, no employee may
purchase under the Plan in any calendar year more that $25,000 worth
of Common Stock (determined based on the fair market value of the
Common Stock at the time the right to purchase such Common Stock is
granted). In addition, in connection with each Offering which
contains more than one Exercise Date (as defined in the Offering), the
Board or the Committee may specify a maximum aggregate number of
shares which may be purchased by all eligible employees on any given
Exercise Date under the Offering. If the aggregate purchase of shares
upon exercise of rights granted under the Offering would exceed any
such maximum aggregate number, the Board or the Committee shall make a
pro rata allocation of the shares available in as nearly a uniform
manner as shall be practicable and as it shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights granted under
the Plan shall be not less than the lesser of:
(i) an amount equal to 85% of the fair market value of the stock on
the Offering Date; or
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(ii) an amount equal to 85% of the fair market value of the stock on
the Exercise Date.
(c) Each eligible employee shall have the same rights and privileges under
the Plan, except as allowed under Section 423(b)(5) of the Code.
(7) PARTICIPATION, WITHDRAWAL, TERMINATION.
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(a) An eligible employee may become a participant in an Offering by
delivering a participation agreement to the Company within the time
specified in the Offering, in such form as the Company provides. Each
such agreement shall authorize payroll deductions of up to the maximum
percentage specified by the Board or the Committee of such employee's
Earnings during the Offering Period. "Earnings" is defined as the
total compensation paid to an employee, including all salary, wages
(including amounts elected to be deferred by the employee, that would
otherwise have been paid, under any cash or deferred arrangement
established by the Company), overtime pay, commissions, bonuses, and
other remuneration paid directly to the employee, but excluding profit
sharing, the cost of employee benefits paid for by the Company,
education or tuition reimbursements, imputed income arising under any
Company group insurance or benefit program, traveling expenses,
business and moving expense reimbursements, income received in
connection with stock options, contributions made by the Company under
any employee benefit plan, and similar items of compensation. The
payroll deductions made for each participant shall be credited to an
account for such participant under the Plan and shall be deposited
with the general funds of the Company. A participant may reduce
(including to zero), increase or begin such payroll deductions after
the beginning of any Offering Period only as provided for in the
Offering. A participant may make additional payments into his or her
account only if specifically provided for in the Offering and only if
the participant has not had the maximum amount withheld during the
Offering Period.
(b) At any time during a Offering Period a participant may terminate his
or her payroll deductions under the Plan and withdraw from the
Offering by delivering to the Company a notice of withdrawal in such
form as the Company provides. Such withdrawal may be elected at any
time prior to the end of the Offering Period except as provided by the
Board or the Committee in the Offering. Upon such withdrawal from the
Offering by a participant, the Company shall distribute to such
participant all of his or her accumulated payroll deductions (reduced
to the extent, if any, such deductions have been used to acquire stock
for the participant) under the Offering, without interest, and such
participant's interest in that Offering shall be automatically
terminated. A participant's withdrawal from an Offering will have no
effect upon such participant's eligibility to participate in any other
Offerings under the Plan but such participant will be required to
deliver a new participation agreement in order to participate in
subsequent Offerings under the Plan.
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(c) Rights granted pursuant to any Offering under the Plan shall terminate
immediately upon cessation of any participating employee's employment
with the Company or an Affiliate, for any reason, and the Company
shall distribute to such terminated employee all of his or her
accumulated payroll deductions (reduced to the extent, if any, such
deductions have been used to acquire stock for the terminated
employee), under the Offering, without interest.
(d) Rights granted under the Plan shall not be transferable, and shall be
exercisable only by the person to whom such rights are granted.
8. EXERCISE.
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(a) On each exercise date, as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions
and other additional payments specifically provided for in the
Offering (without any increase for interest) will be applied to the
purchase of whole shares of stock of the Company, up to the maximum
number of shares permitted pursuant to the terms of the Plan and the
applicable Offering, at the purchase price specified in the Offering.
No fractional shares shall be issued upon the exercise of rights
granted under the Plan. The amount, if any, of accumulated payroll
deductions remaining in each participant's account after the purchase
of shares which is less than the amount required to purchase one share
of stock on the final Exercise Date of an Offering shall be held in
each such participant's account for the purchase of shares under the
next Offering under the Plan, unless such participant withdraws from
such next Offering, as provided in subparagraph 7(b), or is no longer
eligible to be granted rights under the Plan, as provided in paragraph
5, in which case such amount shall be distributed to the participant
after said final Exercise Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent unless
the Plan (including rights granted thereunder) is covered by an
effective registration statement pursuant to the Securities Act of
1933, as amended (the "Securities Act"). If on an Exercise Date of
any Offering hereunder the Plan is not so registered, no rights
granted under the Plan or any Offering shall be exercised on said
Exercise Date and the Exercise Date shall be delayed until the Plan is
subject to such an effective registration statement, except that the
Exercise Date shall not be delayed more than two months and the
Exercise Date shall in no event be more than 27 months from the
Offering Date. If on the Exercise Date of any Offering hereunder, as
delayed to the maximum extent permissible, the Plan is not registered,
no rights granted under the Plan or any Offering shall be exercised
and all payroll deductions accumulated during the Offering Period
(reduced to the extent, if any, such deductions have been used to
acquire stock) shall be distributed to the participants, without
interest.
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9. COVENANTS OF THE COMPANY.
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(a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock
required to satisfy such rights.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the rights
granted under the Plan. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon
exercise of such rights unless and until such authority is obtained.
10. USE OF PROCEEDS FROM STOCK.
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Proceeds from the sale of stock pursuant to rights granted under the Plan
shall constitute general funds of the Company.
11. RIGHTS AS A STOCKHOLDER.
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A participant shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to rights
granted under the Plan unless and until certificates representing such
shares shall have been issued or such shares have been credited to an
account held by a bank, broker or other nominee of the participant.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
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(a) If any change is made in the stock subject to the Plan, or subject to
any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property
other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or
otherwise), the Plan and outstanding rights will be appropriately
adjusted in the class(es) and maximum number of shares subject to the
Plan and the class(es) and number of shares and price per share of
stock subject to outstanding rights.
(b) In the event of:
(i) a dissolution or liquidation of the Company;
(ii) a merger or consolidation in which the Company is not the
surviving corporation;
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(iii) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock
outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form
of securities, cash or otherwise; or
(iv) any other capital reorganization in which more than 50% of the
shares of the Company entitled to vote are exchanged, then, as
determined by the Board in its sole discretion (A) any
surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (B) such
rights may continue in full force and effect, or (C)
participants' accumulated payroll deductions may be used to
purchase Common Stock immediately prior to the transaction
described above and the participants' rights under the ongoing
Offering terminated.
13. AMENDMENT OF THE PLAN.
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(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments
upon changes in stock, no amendment shall be effective unless approved
by the stockholders of the Company within 12 months before or after
the adoption of the amendment, where the amendment will:
(b) Increase the number of shares reserved for rights under the Plan;
(i) Modify the provisions as to eligibility for participation in
the Plan (to the extent such modification requires stockholder
approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code or to
comply with the requirements of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended ("Rule
16b-3")); or
(ii) Modify the Plan in any other way if such modification requires
stockholder approval in order for the Plan to obtain employee
stock purchase plan treatment under Section 423 of the Code or
to comply with the requirements of Rule 16b-3.
(iii) It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to
provide eligible employees with the maximum benefits provided
or to be provided under the provisions of the Code and the
regulations promulgated thereunder relating to employee stock
purchase plans and/or to bring the Plan and/or rights granted
under it into compliance therewith.
(c) Rights and obligations under any rights granted before amendment of
the Plan shall not be altered or impaired by any amendment of the
Plan, except with the
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consent of the person to whom such rights were granted or except as
necessary to comply with any laws or governmental regulation.
14. TERMINATION OR SUSPENSION OF THE PLAN.
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(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate 10 years from the date the
Plan is adopted by the Board or approved by the stockholders of the
Company, whichever is earlier. No rights may be granted under the
Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the Plan is in
effect shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom such rights
were granted or except as necessary to comply with any laws or
governmental regulation.
15. EFFECTIVE DATE OF PLAN.
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The Plan shall become effective as determined by the Board, but no rights
granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company.
16. LIMITATION ON RIGHTS.
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The Plan is strictly a voluntary undertaking on the part of the Company and
shall not constitute a contract between the Employer and any person, or
consideration for, or an inducement or condition of, the employment of a
person. Nothing contained in the Plan shall give any person the right to
be retained in the service of the Company or to interfere with or restrict
the right of the Company, which is hereby expressly reserved, to discharge
any person at any time, with or without cause. Except as otherwise
required by law, inclusion under the Plan will not give any person any
right or claim to any benefit hereunder except to the extent such right has
specifically become fixed under the terms of the Plan.
17. GOVERNING LAW.
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The Plan shall be interpreted, administered and enforced in accordance with
the laws of the State of California.
18. TITLES.
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Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
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19. REFERENCES.
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Unless the context clearly indicates to the contrary, a reference to a Plan
provision, statute, regulation or document shall be construed as referring
to any subsequently enacted, adopted or executed counterpart.
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Amendments to Employee Stock Purchase Plan
The following new subsection 7(e) is hereby added:
(e) After any Exercise Date, the Board or the Committee may
direct the Company to return to an employee any payroll deductions
(without interest thereon) that may not be used to purchase Common Stock
during the calendar year as the result of the limit imposed by Section
5(d) hereof.
The following new sentence is hereby added to the end of Section 8(a):
Any other monies that remain in a participant's account after
the final Exercise Date of an Offering shall be returned to the
participant without interest, unless the participant has elected at
least 15 days before the final Exercise Date to have those monies held
in the participant's account for the purchase of shares in the next
Offering.