Severance Agreement - California Pizza Kitchen Inc. and Frederick R. Hipp
SEVERANCE AGREEMENT
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THIS SEVERANCE AGREEMENT ("Agreement") is made as of March 31, 1998 by
and between California Pizza Kitchen, Inc., a California corporation (the
"Company"), and Frederick R. Hipp, an individual (the "Executive").
WITNESSETH
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A. The Company has retained the Executive to serve as the Company's
President and Chief Executive Officer.
B. The Company and the Executive desire to enter into an agreement
setting forth the consequences of certain methods of terminating the Executive's
employment with the Company.
AGREEMENT
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NOW, THEREFORE, for good and valuable consideration, the receipt of
which is acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Definitions.
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(a) "Base Salary" shall mean the amount of Executive's normal
and customary base salary payable by the Company on each normal and customary
pay interval of the Company, excluding amounts payable as a bonus or for
benefits.
(b) "Cause" shall mean (i) Executive's commission of a felony
or other crime involving moral turpitude; (ii) Executive's willful misconduct
that materially adversely affects Executive's ability to perform Executive's
duties for the Company or materially adversely affects the Company, (iii) the
willful failure of Executive (otherwise than because of Executive's Disability)
to follow the lawful instructions of the Board, after the Executive has received
at least seven days written notice of such instructions, which failure results
in demonstrable material injury to the Company; or (iv) Executive's breach of
his fiduciary duty to the Company for personal profit.
(c) "Change of Control" shall mean (i) any sale or transfer
of stock of the Company which causes Bruckmann, Rosser, Sherrill & Co., L.P.
("BRS") and its affiliates, together with the directors, officers and employees
of BRS and such affiliates, to beneficially own a smaller percentage of the
voting stock of the Company than that owned by any other person or "group" (as
such term is interpreted under Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended) of persons, or (ii) a consolidation, merger,
recapitalization or reorganization involving the Company where a majority of the
voting stock of the surviving or resulting corporation is owned by persons who
were not shareholders of the Company immediately prior to such transaction, or
(iii) the sale of all or substantially all the assets of the Company. The terms
"affiliate" and "beneficially own" in
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the foregoing sentence shall have the definitions for such terms set forth in
Rule 12b-2 and Rule 13d-3, respectively, under the Securities Exchange Act of
1934, as amended.
(d) "Disability" means the inability of the Executive to
perform a major part of the duties to be performed by the Executive as an
employee of the Company immediately prior to the inception of the disability,
because of illness, accident or injury, for a period of 26 consecutive weeks or
for a cumulative period of 30 weeks in any 12 month period.
2. Right to Severance Payments.
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(a) In the event that (i) the Executive's employment with the
Company is terminated by the Company within one year following a Change of
Control, or (ii) the Executive's employment with the Company is terminated by
the Company at any time without Cause, the Company shall continue to pay the
Executive, at the Company's regular payroll intervals, the amount of his Base
Salary in effect on the date of termination for one year following the date of
termination, up to a maximum of $500,000. Any severance pay, if any, expressly
granted under this Section 2, shall be the sole and exclusive compensation,
benefit and remedy due to Executive or his representatives upon any termination
of Executive's employment with the Company for any reason.
(b) Notwithstanding the foregoing, the Company shall have no
obligation to make the payment referred to in Section 2(a) above in the event
the Executive's employment is terminated by the Company or the Executive as a
result of the Executive's death, Disability, retirement, or if Executive's
employment is terminated by the Company for Cause (including following a Change
in Control). In addition, it is understood and agreed that the Company shall
have no obligation to make the payment referred to in Section 2(a) in the event
the Executive's employment with the Company is terminated by Executive.
3. Notices. Except as otherwise provided in this Agreement, any
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notice shall be deemed properly given if in writing and if mailed by registered
or certified mail, postage prepaid with return receipt requested, to the address
of the Executive set forth below, in the case of notices to the Executive, and
to the principal office of the Company at the address set forth below, in the
case of notices to the Company.
If to the Company to:
California Pizza Kitchen, Inc.
Restaurant Support Center
6053 West Century Blvd., 11th Floor
Los Angeles, California 90045
Attention: President
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with required copies to:
Bruckmann, Rosser, Sherrill & Co., L.P.
126 East 56th Street, 29th Floor
New York, New York 10022
Attention: Harold 0. Rosser, II
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Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attn: G. Daniel O'Donnell
If to the Executive, to:
Frederick R. Hipp
321 Dalehurst Avenue
Los Angeles, CA 90024
4. Waiver. No provision of this Agreement may be modified, waived or
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discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and an executive officer of the Company specifically
designated by the Board. No waiver by any party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
5. Assignment. This Agreement shall not be assignable by any party
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hereto, except by the Company to any successor in interest to the Company which
assumes the liabilities of the Company under this Agreement.
6. Entire Agreement. This Agreement contains the entire agreement of
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the parties relating to the subject matter of this Agreement and supersedes any
prior agreement of the parties relating to such subject matter.
7. No Effect on Employment. This Agreement shall not confer upon
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Executive any right to continue in the employment of the Company.
8. Successors, Binding Agreement. This Agreement shall inure to the
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benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees. If the Executive should die while any amount is payable to the
Executive under this Agreement if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
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the terms of this Agreement to the Executive's devisee, legatee or other
designee, or if there is no such designee, to the Executive's estate.
9. Applicable Law. This Agreement shall be governed by and construed
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in accordance with the internal laws (but not the conflict of law principles) of
the State of California.
10. Headings. The headings of the Sections of this Agreement are for
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convenience only and shall not control or affect the meaning or construction or
limit the scope or intent of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CALIFORNIA PIZZA KITCHEN, INC.
By: /s/ Marc Carter
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Name: Marc Carter
Title: Controller/Asst. Controller
/s/ Frederick R. Hipp
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Frederick R. Hipp
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