EXHIBIT 10.48
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this “Agreement”),
effective as of December 31, 2008 (the “Amended
Effective Date”), is made and entered into this 31
st
day of December,
2008, by and between California Pizza Kitchen, Inc., a Delaware
corporation (the “Company”), and Susan M. Collyns (the
“Executive”). This Agreement amends and restates in its
entirety the Prior Agreement (as defined below).
WHEREAS, Executive and the Company
are currently parties to that certain Employment Agreement, as
executed on April 21, 2005 (the “Prior Agreement”)
and effective as of January 3, 2005 (the “Effective
Date”); and
WHEREAS, Executive and the Company
wish to amend and restate the Prior Agreement on the terms and
conditions set forth in this Agreement to comply with or be exempt
from the application of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”).
NOW, THEREFORE, in consideration of
the premises and the mutual covenants herein contained, and
intending to be legally bound hereby, the parties hereto agree as
follows:
Section 1.
Employment Term . The Company hereby employs Executive and
Executive hereby accepts such employment upon the terms and
conditions set forth herein. The Company shall continue to employ
Executive as Senior Vice President, Finance and Chief Financial
Officer of the Company for the period commencing on the Amended
Effective Date and ending on the earlier of (a) the date of
termination of this Agreement pursuant to the provisions of
Section 4 hereof, or (b) December 31, 2009;
provided, however, that commencing on December 31, 2009, and
on the last day of each of the Company’s fiscal years
thereafter, the Employment Period shall be automatically extended
through the end of the Company’s next succeeding fiscal year
unless, no later than June 30 th of any year, either party shall
have given written notice to the other that it does not wish to
extend the Employment Period of this Agreement (the
“Employment Period”). References herein to the
Employment Period of this Agreement shall refer to both the initial
Employment Period and any such extended Employment Period.
Executive hereby accepts such continued employment by the Company
for the Employment Period on the terms set forth herein.
Section 2. Duties .
During the Employment Period, Executive shall serve as Senior Vice
President, Finance and Chief Financial Officer. The Company may
promote Executive to Executive Vice President, Finance or another
appropriate position during the Employment Period. Executive shall
render such business and professional services in the performance
of her duties consistent with Executive’s position within the
Company as well as such services reasonably assigned to her by the
Co-Chief Executive Officers and/or the Board of Directors of the
Company. Executive shall, at all times, report to the Co-Chief
Executive Officers and/or the Board of Directors of the Company and
no other individuals within the Company, and all information
technology, planning, corporate finance and accounting employees of
the Company shall be responsible to report to Executive or such
other individuals as she designates. Executive’s principal
place of employment shall be the offices provided by the Company
located in Los Angeles, California, but it is understood and
acknowledged that the performance of her
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duties will require Executive to travel outside
Los Angeles. Executive, however, shall not be required, without her
consent, to relocate her principal place of employment more than 25
miles from the current location of the offices provided by the
Company located in Los Angeles.
At all times during the Employment
Period, Executive shall devote her best efforts and abilities to
the performance of her duties on behalf of the Company and to the
promotion of its interests consistent with, and subject to, the
strategies, policies and directions of the Co-Chief Executive
Officers and the Board. Notwithstanding the foregoing, Executive
may be involved in civic and charitable activities, may manage her
personal investments and may serve on the boards of any public or
private companies, trade organizations or professional
associations; provided that prior to agreeing to serve as a member
of the board of directors of any other entity, Executive shall
discuss her intentions to do so with the Board of Directors of the
Company.
The Company may nominate Executive
to serve on the Board of Directors during the Employment Period in
the discretion of the Board’s Nominating and Governance
Committee. If Executive is so nominated and elected, the Company
agrees that thereafter it will use its reasonable best efforts to
cause Executive to continue to be nominated to serve on the Board
of Directors during the remainder of the Employment
Period.
Section 3. Compensation
. During the Employment Period, as compensation for her services
and covenants hereunder:
(a) The Company shall pay Executive
an annual base salary of Three Hundred Thousand Dollars ($300,000),
prorated for any partial employment year, payable in equal
installments at the Company’s current payroll intervals;
provided, however, that the Compensation Committee, in consultation
with the Co-Chief Executive Officers, may increase such amount
during the Employment Period in its sole and absolute discretion
(the “Base Salary”). Such Base Salary shall be reviewed
annually, and shall be subject to such annual increase, if any, as
determined by the Compensation Committee, in consultation with the
Co-Chief Executive Officers, in its sole discretion.
(b) During the Employment Period,
Executive shall be entitled to an annual target performance based
bonus (the “Annual Bonus”) based on the achievement of
certain performance based objectives established by the
Compensation Committee. Executive’s target Annual Bonus shall
be equal to forty five percent (45%) of her Base Salary;
provided, however, that the Compensation Committee, in consultation
with the Co-Chief Executive Officers, may increase, but not
decrease, the percentage of Executive’s Base Salary
representing her target bonus in its sole and absolute discretion.
The actual Annual Bonus is determined based on achievement of
performance results within a range between a threshold that is less
than the specified performance target or in excess of the specified
performance target. The Annual Bonus will range from a minimum of
30% of Base Salary for attainment of the performance based
threshold amount to a maximum of 200% for exceptional performance
in excess of the performance based target amount. Exhibit A hereto
sets forth the performance targets that if achieved will result in
the payment of the corresponding percentage of Base Salary as
Annual Bonus in calendar year 2005.
(i) The performance targets for 2005
have been previously specified by the Compensation Committee and
shall hereafter be established annually by the Compensation
Committee based on financial performance factors determined by the
Compensation Committee in its sole discretion, but after
consultation with Executive and the Co-Chief Executive
Officers.
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(ii) The Annual Bonus shall be
payable in cash as soon as practicable following delivery of the
audited financial statements for the Company and its subsidiaries
for the year for which the Annual Bonus is payable (the
“Audited Financial Statements”), but in no event later
than the last day of the applicable two and one-half month
“short-term deferral period” with respect to such
annual bonus, within the meaning of Treasury Regulation
Section 1.409A-1(b)(4).
(c) The parties acknowledge that on
April 21, 2005, the Company granted Executive options to
acquire 100,000 shares of Common Stock, pursuant and subject to the
terms and conditions of the Prior Agreement, the Company’s
2004 Omnibus Incentive Compensation Plan, and the Non-Qualified
Stock Option Agreement, a sample which is attached hereto as
Exhibit B, which include but are not limited to the following: The
exercise price per share of the options was based on the closing
price of the Company Common Stock on April 21, 2005. The
options shall be immediately vested and exercisable as to 50% of
the grant on the grant date and thereafter an additional 4.17% of
the original grant shall vest on each quarterly anniversary until
fully vested and exercisable at the end of the third anniversary of
the grant date. The options granted to Executive 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. 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 in the
event Executive’s employment terminates for any reason other
than for Cause or voluntary termination by Executive without Good
Reason, vested options shall continue to be exercisable for at
least three years following the employment termination date, but
not longer than the expiration of the ten-year term after the date
of grant. Additional options may be granted to Executive in the
discretion of the Compensation Committee. The Compensation
Committee shall grant Executive additional awards under the 2004
Omnibus Incentive Compensation Plan each year during the Employment
Period beginning in 2006 in a minimum amount of (i) options to
purchase 30,000 shares of Common Stock, or (ii) with the
consent of Executive, 10,000 shares of restricted stock. It is
anticipated that grants in excess of the foregoing minimum amounts
may be awarded in recognition of superior performance during the
Employment Period.
(d) 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 Executive 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
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.
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(e) Executive shall be entitled to
paid vacation of three weeks annually, which shall increase to four
weeks per annum effective as of the fifth anniversary of
Executive’s hire date. Such vacation shall be taken at such
times as will interfere as little as possible with the performance
of Executive’s duties hereunder. At no time may Executive
accumulate or accrue more than eight weeks of unused vacation time.
Should Executive accumulate or accrue eight weeks of earned but
unused vacation time, Executive shall cease to earn any further
vacation benefits until such time as Executive’s earned but
unused vacation time falls below eight weeks.
(f) Executive shall be entitled to
paid maternity leave of up to three months (as determined in the
discretion of Executive). Executive shall receive her full Base
Salary and benefits as set forth herein throughout any period of
maternity leave and shall remain eligible to receive the Annual
Bonus set forth in Section 3(b) hereof without any reduction
or modification as a result of taking maternity leave in accordance
with this provision.
(g) Upon presentation of properly
itemized charges together with appropriate documentation, the
Company shall reimburse Executive for all reasonable and necessary
expenses properly incurred by her in the performance of her duties
hereunder, in accordance with the Company’s policies
therefor, as may be in effect from time to time.
(h) The Company shall provide
Executive with an automobile allowance of One Thousand Dollars
($1,000) per month. The Company shall also reimburse Executive for
expenses associated with her automobile in accordance with Company
policy.
(i) The Company shall reimburse
Executive for her membership purchase price or dues (not including
minimums or other usage charges unless such expenses are
reimbursable pursuant to paragraph (g) above) at one country
or dining club of her choice located in the State of California, up
to a maximum rate of $10,000 per year excluding minimums and other
usage charges reimbursed to Executive pursuant to paragraph
(g) above.
(j) Executive shall be allowed to
participate in any present or future medical, health insurance or
other personal fringe benefits plan adopted by the Company for the
general and overall benefit of its full time employees (it being
understood, however, that participation in any such plan is subject
to whatever eligibility requirements are applicable generally to
such plan).
(k) To the extent that the Company
maintains any errors and omissions or other liability insurance
covering officers and directors (“Insurance”),
Executive shall be covered under such policy or policies to the
fullest extent in accordance with the terms thereof. However,
nothing herein shall in any way require the Company to continue to
maintain any Insurance; provided, however, that the Company shall
provide to Executive notice of a modification (including a copy of
such modification) or termination of Insurance.
(l) The Company shall reimburse
Executive for reasonable legal fees and disbursements incurred by
Executive in connection with the negotiation, preparation and
execution of this Agreement.
(m) To the extent that any payments
or reimbursements provided to Executive under this Agreement,
including, without limitation, under Section 3(g), 3(h), 3(i),
3(l), 5(b), 5(c) or 5(e) are deemed to constitute compensation to
Executive, such amounts shall be paid or reimbursed reasonably
promptly, but not later than December 31 of the year following
the year
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in which the expense was incurred. The amount of
any payments or expense reimbursements that constitute compensation
in one year shall not affect the amount of payments or expense
reimbursements constituting compensation that are eligible for
payment or reimbursement in any subsequent year, and
Executive’s right to such payments or reimbursement of any
such expenses shall not be subject to liquidation or exchange for
any other benefit.
Section 4. Early Termination
of Agreement and Other Matters .
(a) It is agreed and understood that
this Agreement (except for Section 6 and 7 hereof) and
Executive’s employment with the Company shall terminate
automatically upon the first to occur of any of the events set
forth in (i) through (v) below:
(i) the date of Executive’s
death;
(ii) the date on which the Board
shall give Executive notice of termination on account of a
Disability (as hereinafter defined), which has prevented Executive
from satisfactorily and completely performing 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 Executive as set forth in
Section 3 hereof and that maternity leave taken by Executive
in accordance with Section 3(f) shall not be counted toward
the foregoing one hundred twenty (120) day period);
(iii) within 30 days following the
date on which the Board or a Co-Chief Executive Officer shall give
Executive notice of termination for Cause (as hereinafter
defined);
(iv) within 30 days following the
date on which the Board or a Co-Chief Executive Officer shall give
Executive notice of termination for any reason other than
Disability or Cause or Executive shall give the Board or a Co-Chief
Executive Officer notice of termination for Good Reason (as
hereinafter defined); or
(v) within 60 days following the
date on which Executive shall give the Board notice of
Executive’s termination for other than for Good
Reason.
(b) For purposes of this Agreement,
“Cause” shall mean that Executive: (i) has been
convicted of, or pleads guilty or nolo contendere to any act of
embezzlement or fraud against the Company, its parent or any of its
subsidiaries or to any felony; (ii) has committed any willful,
intentional, purposeful, grossly negligent or malicious act that
constitutes misconduct and has the effect of materially injuring
the business or reputation of the Company, its parent or any of its
affiliates and any divisions Executive may manage; or
(iii) has materially breached this Agreement; provided,
however, that in the event that the Board determines to terminate
Executive’s employment for Cause, such termination shall only
become effective if the Board shall first provide Executive written
notice detailing such Cause, and if such act or omission is
susceptible to cure, Executive shall be provided a 30 day period to
cure such act or omission.
(c) For the purposes of this
Agreement, “Disability” shall mean that Executive is
determined to be substantially disabled by the insurance company
providing group long-term disability insurance for the
Company’s employees, which determination would entitle
Executive
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to disability benefit payments thereunder. If no
such insurance is then in force or if no such determination has
been made, “Disability” shall refer to a medically
determinable physical or mental condition disabling Executive from
substantially performing her duties hereunder. Notwithstanding the
foregoing, however, maternity leave taken by Executive in
accordance with Section 3(f) shall not be deemed to be a
“Disability” for purposes of this Agreement. If such
determination is disputed, then the Company and Executive shall
each select a physician licensed to practice medicine in the State
of California who shall, in turn, jointly select a third physician
licensed to practice medicine in the State of California, who shall
make a binding determination of disability. The Company shall bear
the costs of obtaining such determination.
(d) For purposes of this Agreement,
“Good Reason” shall mean without Executive’s
consent (i) a material diminution in the duties, authority or
responsibilities of Executive or a material breach of this
Agreement by the Company, provided that the Board fails to cure
such material reduction or breach within 30 days of receipt of a
written notice from Executive of such material reduction or breach
(which notice shall be provided by Executive to the Company within
90 days following the initial occurrence of such event) or
(ii) requiring Executive to relocate her principal place of
employment to a location that is more than twenty-five
(25) miles from the location of the Company’s principal
office in the Los Angeles area as of the Amended Effective Date.
Executive’s “separation from service” from the
Company (within the meaning of Section 409A(a)(2)(A)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”),
and Treasury Regulation Section 1.409A-1(h)) (a
“Separation from Service”) as a result of any of the
foregoing events must occur within 2 years of the initial
occurrence of any such event.
Section 5. Compensation in
Event of Termination; Survival .
(a) Except as otherwise provided
below in this Section 5, upon termination of Executive’s
employment for any reason, the Employment Period of this Agreement
shall end and this Agreement shall expire and the Company shall
have no further obligation to Executive except to the extent that
Executive is otherwise entitled to any accrued but unpaid salary,
bonus or benefits hereunder and insurance coverage in accordance
with applicable law. Notwithstanding the expiration of the
Employment Period or termination of this Agreement; the provisions
set forth in Section 6, 7 and 8 shall remain in full force and
effect after the termination of Executive’s employment
hereunder. Executive 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 5; provided,
however, that the amount of any payment or benefit provided for in
Section 5(b) shall be reduced by any compensation earned by
Executive as a result of consultancy with or employment by another
entity or individual during the one-year payout period under such
Section; and provided further, however, that any compensation
earned by Executive from service as a board member of the Company
or any other entity shall not reduce such payments or benefits. All
severance benefits provided under this Section 5 shall be
subject to Executive’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
Executive; provided, however, that the Company shall not be
required to release Executive from any claims arising out of or
resulting from Executive’s willful misconduct, fraud,
embezzlement, breach of fiduciary duty, or breach of Section 6
or 7 hereof.
(b) Subject to Section 5(i)
below, if Executive incurs a Separation from Service by reason of
the Company providing Executive with written notice that it does
not wish to extend
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the Employment Period, Executive (or her estate
in the event she dies after her termination, as applicable) shall
be entitled to the following: (i) a lump sum cash payment
within 60 days after the date of Executive’s Separation from
Service (the “Separation Date”) in an amount equal to
the sum of Executive’s Base Salary plus her Target Bonus in
effect as of such date; (ii) any unvested options shall become
fully vested and immediately exercisable and any restrictions on
restricted stock that was awarded to Executive 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 (x) the last day of the
three-year period following the Separation Date or
(y) expiration date of such option according to its terms; and
(iv) continuation for one year following termination of
employment of health insurance benefits consistent with those
provided by the Company to its senior Executives; 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 and, upon the expiration of such Company paid
continuation period, Executive shall be entitled to elect, at her
own expense, COBRA continuation coverage for the remainder of the
COBRA group health coverage period provided under applicable
law.
(c) Subject to Section 5(i)
below, if Executive incurs a Separation from Service by reason of a
termination of Executive’s employment either by the Company
without Cause or by Executive for Good Reason, Executive (or her
estate in the event she dies after her termination, as applicable)
shall be entitled to the following: (i) a lump sum cash
payment within 60 days after the Separation Date in an amount equal
to two (2) times the sum of Executive’s Base Salary plus
her Target Bonus in effect as of such date; (ii) any unvested
option shall become fully vested and immediately exercisable and
any restrictions on restricted stock that was awarded to Executive
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 (x) the last
day of the three-year period following the Separation Date or
(y) 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 senior Executives during
the period commencing on the Separation Date and ending on the
later of (A) the date that is 12 months after the Separation
Date and (B) the last day of the Employment Period as
determined without regard to Executive’s Separation from
Service.
(d) In the event of
Executive’s death or, subject to Section 5(i) below, if
Executive incurs a Separation from Service by reason of
Executive’s Disability, Executive (or 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 Executive 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
(x) the last day of the three-year period following the
Separation Date or (y) the expiration date of such option
according to its terms; provided that Executive has not been
provided with notice referred to in Section 4(a)(iii)
above.
(e) Subject to Section 5(i)
below, if a Change of Control (as defined below) occurs and
Executive incurs a Separation from Service by reason of a
termination of employment either by the Company without Cause or by
Executive for Good Reason, in each case within 2 years following
the effective date of a Change of Control, Executive (or her estate
in the event she dies after her termination, as applicable) shall
be entitled to the following: (i) a lump sum cash
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payment within 60 days after the Separation Date
in an amount equal to two (2) times the sum of
Executive’s Base Salary and Target Bonus in effect as of such
date; (ii) any unvested option shall become fully vested and
immediately exercisable and any restrictions on restricted stock
that was awarded to Executive 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
(x) the last day of the three-year period following the
Separation Date or (y) 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 senior Executives for a period of two years following 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 addition, if any
of the payments or benefits received or to be received by Executive
in connection with this Section 5(e) will be subject to any
excise tax imposed under Section 4999 of the Code resulting
from application of Section 280G of the Code, the Company
shall pay to Executive an additional amount (the “Gross-Up
Payment”) such that the net amount retained by Executive,
after deduction of such excise tax, would be the same as the amount
Executive would have retained had such excise tax not been
incurred. Any Gross-Up Payment or any payment of any income or
other taxes to be paid by the Company under this Section 5(e)
shall be made no later than the end of Executive’s taxable
year next following Executive’s taxable year in which
Executive remits the related taxes.
(f) “Change of Control”
for the purposes of this Agreement, shall have the meaning set
forth in Exhibit C, hereto.
(g) In the event the Company or any
member of the Board asserts that Executive has breached
Section 6 or 7 hereof, then the Company or such Director shall
notify Executive thereof with, in the case of notification by a
Director, a copy thereof being delivered to the Company. Nothing in
this Section 5(g) 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 6 or Section 7 hereof.
(h) Executive’s obligations
under Section 6 and Section 7 of this Agreement shall
survive any termination of this Agreement. Notwithstanding any of
the foregoing, in the event that Executive were to violate
Section 6 or 7, any benefit or amount payable to
