EXHIBIT 10.49
CALIFORNIA PIZZA
KITCHEN
AMENDED AND
RESTATED
CONFIDENTIAL EMPLOYMENT
AGREEMENT
This is an
amended and restated EMPLOYMENT AGREEMENT (“Agreement”)
between California Pizza Kitchen, Inc. a Delaware corporation (the
“Company”), and Rudy Sugueti (the
“Employee”), dated this 31 st day of December 2008. This
Agreement amends and restates in its entirety that certain
Employment Agreement between Employee and Company, as executed and
effective as of November 6, 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.
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
for which the Annual Bonus is payable, and 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). 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 Annual 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.
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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.
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.
To the extent that any payments or
reimbursements provided to Employee under this Agreement,
including, without limitation under Section 3.5 or 3.8, are
deemed to constitute compensation to Employee, such amounts shall
be paid or reimbursed reasonably promptly, but not later than
December 31 of the year following the year 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 Employee’s right to
such payments or reimbursement of any such expenses shall not be
subject to liquidation or exchange for any other
benefit.
4. Stock Options
.
(a) The parties acknowledge that on
November 6, 2006, the Company granted 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 of 1986, as amended (the
“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
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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
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
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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:
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 such assignment or
substantial adverse change results in a material diminution in
Employee’s duties, authority or responsibilities, provided
further that the Company fails to cure any such assignment or
adverse change within 30 days of receipt of written notice from the
Employee regarding the assignment or adverse change (which notice
shall be provided by Employee to the Company within 90 days
following the initial occurrence of such event).
6.1.2. Failure to
Comply. Any failure by
the Company to comply with any of the provisions of Article 3 of
this Agreement resulting in a material breach of this Agreement,
other than an insubstantial and inadvertent failure or such
material breach remedied by the Company 30 business days after
receipt of notice thereof given by the Employee (which notice shall
be provided by Employee to the Company within 90 days following the
initial occurrence of such event).
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.
Employee’s resignation for
Good Reason as a result of any of the foregoing events must occur
within 2 years of the initial occurrence of any such
event.
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.
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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
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 or
Disability. Subject to
Section 8.6 below, in the event of Employee’s death or
“separation from service” from the Company (within the
meaning of Section 409A(a)(2)(A)(i) of the Code, and Treasury
Regulation Section 1.409A-1(h)) (a “Separation from
Service”) by reason of a termination of Employee’s
employment by the Company on account of 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
Employee’s Separation from Service (the “Separation
Date”) 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
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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.
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. Subject to Section 8.6 below, if Employee
incurs a Separation from Service by reason of a termination of
Employee’s employment either (A) by the Company other
than for Disability or Cause, or (B) by Employee for Good
Reason, Employee (or his/her estate in the event he/she dies after
his/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 one (1) time
Employee’s Annual Base Salary; (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 Separation Date 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 8.3 shall be subject to Employee’s
execution and delivery within 21 days (or, to the extent required
by applicable law, 45 days) after the Separation Date, and
non-revocation within 7 days thereafter, 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 8.3; 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.
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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 8.3 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 8.3 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 Following a Change of Control
. Subject to Section 8.6 below,
if a Change of Control (as defined below) occurs and Employee
incurs a Separation from Service by reason of a termination of
Employee’s employment either (A) by the Company other
than for Disability or Cause, or (B) by Employee for Good
Reason, in each case within 2 years following the effective date of
a 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) a lump sum cash payment within
60 days after the Separation Date in an amount equal to one
(1) time Employee’s Annual Base Salary; (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 Separation Date 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 8.4 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 8.4 shall be forfeited and cancelled
immediately upon such violation.
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8.5 Non-Extension of Contract
Term . Subject to Article
8.6 below, i
