UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K

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(MARK ONE)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 29, 2002

OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO  _____________

Commission file number 000-31149
California Pizza Kitchen, Inc.(Exact name of Registrant as Specified in its Charter)



|California                                                     | 95-4040623                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

6053 West Century Boulevard, 11th FloorLos Angeles, California    90045-6442

(310) 342-5000(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
                Common Stock, $0.01 par value (title of class)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
[X]       No  [     ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K, or any amendment to
this Form 10-K.     [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
    Yes  
x    No  
 ̈

The aggregate market value of voting stock held by non-affiliates of
the registrant as of June 30, 2002, was approximately $460 million based upon the last
sales price reported for such date on The Nasdaq Stock Market's National
Market. For purposes of this disclosure, shares of Common Stock held by
persons who hold more than 5% of the outstanding shares of Common Stock and
shares held by officers and directors of the registrant, have been excluded
in that such persons may be deemed to be affiliates. This determination is
not necessarily conclusive.

As of March 12, 2003 there were 18,853,436 shares of the registrant's
Common Stock outstanding.



DOCUMENTS INCORPORATED BY REFERENCE

The registrant has incorporated by reference into Part III of this Form 10-K
portions of its proxy statement for the registrant's Annual Meeting of
Stockholders to be held May 7, 2003.









California Pizza Kitchen, Inc.
                        2002 ANNUAL REPORT ON FORM 10-K
                               INDEX



|Part I.   |                                                                                       | Page
|--------- | ------------------------------------------------------------------------------------- | ----
|Item 1.   | Business                                                                              | **  
|Item 2.   | Properties                                                                            | **  
|Item 3.   | Legal Proceedings                                                                     | **  
|Item 4.   | Submission of Matters to a Vote of Security Holders                                   | **  
|Part II.  |                                                                                       |     
|Item 5.   | Market for the Registrant's Common Equity and Related Stockholder Matters             | **  
|Item 6.   | Selected Consolidated Financial Data                                                  | **  
|Item 7.   | Management's Discussion and Analysis of Financial Condition and Results of Operations | **  
|Item 7a.  | Quantitative and Qualitative Disclosures About Market Risks                           | **  
|Item 8.   | Consolidated Financial Statements and Supplementary Data                              | **  
|Item 9.   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  | **  
|Part III. |                                                                                       |     
|Item 10.  | Directors and Executive Officers of the Registrant                                    | **  
|Item 11.  | Executive Compensation                                                                | **  
|Item 12.  | Security Ownership of Certain Beneficial Owners and Management                        | **  
|Item 13.  | Certain Relationships and Related Transactions                                        | **  
|Item 14.  | Controls and Procedures                                                               | **  
|Part IV.  |                                                                                       |     
|Item 15.  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       | **  

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FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements
that involve risks and uncertainties. These statements relate to our future
plans, objectives, expectations and intentions. These statements may be
identified by the use of words such as "expects," "anticipates," "intends,"
"plans" and similar expressions. Our actual results could differ materially from
those discussed in these statements. Factors that could contribute to these
differences include those discussed under "Risk Factors" and elsewhere in this
report. The cautionary statements made in this report should be read as being
applicable to all forward-looking statements wherever they appear in this
report.

ASSUMPTIONS USED IN THIS REPORT

Throughout this report, our fiscal years ended
January 3, 1999, January 2, 2000, December 31, 2000, December 30, 2001 and
December 29, 2002 are referred to as years 1998, 1999, 2000, 2001 and 2002,
respectively. Our fiscal year consists of 52 or 53 weeks and ends on the Sunday
closest to December 31 in each year. Fiscal year 1998 included 53 weeks. All
other years shown are 52 weeks. Our fiscal quarters typically consist of 13
weeks.

PART I



ITEM 1. BUSINESS

Overview and Strategy

California Pizza Kitchen is a leading casual dining
restaurant chain with a particular focus on the premium pizza segment. As of
March 14, 2003, we own, license or franchise 151 restaurants in 26 states, the
District of Columbia and five foreign countries, of which 119 are company-owned
and 32 operate under franchise or license arrangements. During our 18 years of
operating history, we have developed a recognized consumer brand and
demonstrated the appeal of our concept in a wide variety of geographic areas.

Our restaurants, which feature an exhibition style kitchen
centered around an open flame oven, provide a distinctive, casual dining
experience that is family friendly and has broad consumer appeal. Our menu
focuses on imaginative toppings and showcase recipes that capture tastes and
flavors that customers readily identify, but do not typically associate with
pizza, pasta or salads. The menu showcases such dishes as the Original BBQ
Chicken Pizza, the Thai Chicken Pizza, Kung Pao Spaghetti and the Tricolore
Salad. While we do offer traditional menu items, the success of our concept is
due to our ability to interpret food trends on our platform of pizzas, pastas,
salads and appetizers, and to offer items that appeal to a variety of tastes.

Our objective is to extend our leadership position in the
restaurant and premium pizza market by selling innovative, high quality pizzas
and related products and by providing exceptional customer service, thereby
building a high degree of customer loyalty, brand awareness and superior returns
for our shareholders. To reach these objectives, we plan to increase our market
share by expanding our restaurant base in new and existing markets, leverage our
partnerships in non-traditional and retail channels and offer innovative menu
items on our platform of pizzas.

Menu

Our menu committee, which includes our co-founders Rick
Rosenfield and Larry Flax, continuously experiments with food items and flavor
combinations in an attempt to create selections that are innovative and  capture
distinctive tastes. We first applied our innovative approach to creating  and
defining a new category of pizza - the premium pizza. For example, our  signature
creation, the Original BBQ Chicken Pizza, utilizes barbecue sauce  instead of
tomato sauce, and adds toppings of marinated chicken breast, smoked  Gouda and
mozzarella cheeses, sliced red onion and fresh cilantro. Our Thai  Chicken Pizza
is created with a base of spicy peanut-ginger and sesame sauce,  and topped with
marinated chicken breast, mozzarella cheese, roasted peanuts,  green onions, bean
sprouts, julienne carrots and fresh cilantro. Our other  innovative pizzas
include the Carne Asada Pizza, Grilled Garlic Shrimp Pizza,  Jamaican Jerk
Chicken Pizza and Caramelized Pear and Gorgonzola Pizza.

We have broadened our menu beyond pizza to include pastas,
salads, soups, appetizers and desserts, and we strive to bring the same level of
creativity and innovation involved in developing our pizzas to our entire menu.
Among our other signature menu items are Chicken Tequila Fettucine which
captures Southwestern flavors in a rich tequila-lime and jalapeno cream sauce,
our Original BBQ Chicken Chopped Salad which uses both barbecue sauce and
garden-herb ranch dressing, Oriental Chicken Salad with crispy angel hair pasta,
and our hearth-baked Tortilla Spring Roll Appetizers which are sprinkled with
parmesan cheese and baked in our pizza ovens.

Our menu is also designed to satisfy customers who seek
traditional, American-style, tomato sauce-based pizza or authentic, Italian-style
Neapolitan pizza. For the traditionalist, we offer a variety of items such
as the Mushroom, Pepperoni and Sausage Pizza, the Fresh Tomato, Basil and Garlic
Pizza, and the Sweet and Spicy Italian Sausages Pizza which combines sweet
Italian sausage and grilled spicy Italian sausage, a tomato sauce base, roasted
red and yellow peppers and mild onions. Our Neapolitan pizzas are prepared on a
thin, crisp crust and include our Classic Margherita Pizza with imported Italian
tomatoes, fresh mozzarella cheese, fresh basil and parmesan cheese and our
Rustica Pizza made with imported tomatoes, fresh mozzarella cheese, garlic,
crushed chilies, capers and Mediterranean olives. Our menu similarly
accommodates
traditional tastes in pastas and salads, with a variety of tomato sauce-based
pastas and our high quality versions of popular salads, including our Caesar
Salad and Original Chopped Salad.

All of our menu items are prepared to order in our full
service restaurants. This reinforces our customers' confidence in the freshness
and quality of our preparations and allows us to customize any dish to
accommodate specific dietary or taste preferences.

Our menu is continuously evolving to track the increasingly
discriminating and sophisticated palate of the American public. We regularly
review the sales mix of our menu items and replace lower selling items in each
category with new menu items once or twice a year. Because of our ability to
quickly adapt our menu, we believe that we are able to meet our customers'
changing tastes and expectations. Our entrees generally range in price from
$7.79 to $13.99 and our average guest check during 2002 was approximately
$11.50, including alcoholic beverages. We offer a variety of wines by the bottle
or the glass, as well as bottled and tap beers, primarily to complement our menu
offerings.

Operations

Restaurant management. We currently have 18
regional directors and a regional Vice President of Operations who report to our
Vice Presidents of Operations. Each regional director oversees three to eight
restaurants and supervises the general manager for each restaurant within his or
her area of control. The typical full service restaurant management team
consists of a general manager, who oversees the entire operation of the
restaurant, a kitchen manager and two other managers. Additionally, depending
upon the size and sales volume of a restaurant, we may also employ another
kitchen manager or a third manager in the dining area. Most of our full service
restaurants employ approximately 50 to 75 hourly employees, many of whom work
part-time. The general manager of each restaurant is responsible for the day-to-day
operation of that restaurant, including hiring, training and development of
personnel, as well as operating results. The kitchen manager is responsible for
product quality, food costs and kitchen labor costs. Our full service
restaurants are generally open Sunday through Thursday from 11:00 a.m. until
10:00 p.m., and on Friday and Saturday from 11:00 a.m. until 11:00 p.m.

Training. We strive to maintain quality and
consistency in each of our restaurants through the careful training and
supervision of personnel and the establishment of, and adherence to, high
standards relating to personal performance, food and beverage preparation and
maintenance of facilities. We provide all new employees with complete
orientation and training for their positions to ensure they are able to meet our
high standards. Each location has certified trainers who provide classroom and
on-the-job instruction. Employees are certified for their positions by passing a
series of tests and evaluations. New restaurant managers are trained over a ten-week
period at a certified training restaurant. Beginning January 2003, the
Company extended its manager training program by two weeks for a total training
period of 12 weeks. The additional two weeks will be dedicated solely to food,
which is the essence of the California Pizza Kitchen experience. Training also
includes service, kitchen and management responsibilities. An extensive series
of interactive modules and on-line quizzes are used in conjunction with on-the-job
training. Newly trained managers are then assigned to their home restaurant
where they spend one additional training week with their general manager. We
place a high priority on our continuing management development programs in order
to ensure that qualified managers are available for our future openings. In
addition, we have detailed written
operating procedures, standards and controls, food quality assurance systems,
and safety programs. Once a year we hold a general manager conference in which
all of our general managers receive financial information and additional
training on food preparation, hospitality and other relevant topics.

When we open a new restaurant, we provide varying levels of
training to each employee as is necessary to ensure the smooth and efficient
operation of a California Pizza Kitchen restaurant from the first day it opens
to the public. Approximately two weeks prior to opening a new restaurant, our
dedicated training/opening team travels to the location to begin intensive
training of all new employees for that restaurant. Our training teams stay on
site during the first two weeks of operation. We believe this additional
investment in our new restaurants is important since it helps us provide our
customers with a quality dining experience from day one. We also make on-site
training teams available when our franchisees open new restaurants. After a
restaurant has been opened and is operating smoothly, the general manager
supervises the training of new employees.

Recruiting and retention. We seek to hire experienced
general managers and staff. We support our employees by offering competitive
wages, competitive benefits, including a 401(k) plan and salary deferral plan,
both with a discretionary match, medical insurance for all of our employees,
including part-time workers, generous discounts on dining, and an employee stock
purchase plan which allows all employees to participate who have worked for us
for at least a year and who work a minimum of 20 hours per week.

We attempt to motivate and retain our employees by providing
them with opportunities for increased responsibilities and advancement, as well
as performance-based cash incentives tied to sales, profitability and
qualitative measures such as our mystery shoppers, who anonymously evaluate
individual restaurants. Our most successful general managers are eligible for
promotion to senior general manager status and are entitled to receive more
lucrative compensation packages based on various performance criteria. We
believe we also enjoy the recruiting advantage of offering our general managers
restaurants that are easier to manage because they are generally smaller than
those of our competitors, have hours that typically do not extend late into the
night, and generally do not require management of a separate bar business. We
believe these advantages offer our managers an excellent quality of life
compared to many of our competitors.

Customer satisfaction. Customer satisfaction is
critically important to us. To that end, we routinely solicit and analyze our
customers' opinions through periodic surveys of 20,000 to 25,000 randomly
selected guests and we routinely mystery shop our restaurants three to four
times a month. These programs are a vital tool in our quality control efforts,
from both food quality and customer service perspectives.

Marketing

Our marketing strategy focuses on communicating the
California Pizza Kitchen brand through many creative and non-traditional
avenues. As one of the pioneers of premium pizza, we continue to benefit from
national media attention, featuring our co-founders Rick Rosenfield and Larry Flax,
which we  believe provides us with a significant competitive advantage. New store
openings, high profile fundraisers and media events currently serve as the focal
point of our public relations and media efforts. Our openings are often featured
on live local television and radio broadcasts and receive coverage in local
newspapers. We employ a variety of marketing techniques in connection with our  new
restaurant openings, including charitable fund raising events with  invitations to
media personalities and community leaders. In addition, we donate  100% of all
opening day pizza sales to worthwhile local charities. During 2002,  the California
Pizza Kitchen Foundation contributed over $100,000 to charities  across the U.S.

Over the last year, we have appeared on the Today
Show, CNN Moneyline and Forbes Magazine's "Best 200 Small
Companies." We also engage to a limited extent in paid advertising for
individual restaurant locations, including billboards, direct mail and mall
kiosks. Ongoing marketing efforts include local kid's tours with schools and
other children's organizations, concierge parties and on-going publicity
programs. We utilize a variety of printed marketing materials, including
restaurant location brochures, hotel concierge cards, take-out menus and direct
and electronic mailings. In 2002, we spent an aggregate of 1.0% of restaurant
sales on marketing efforts. We expect to continue investing approximately 1.0%
of restaurant sales in marketing efforts in the future.

Our involvement in the community does not end once we have
opened a restaurant. In each of the markets in which we operate, we continuously
engage in a variety of charitable and civic causes and donate food and services
on an on-going basis. We have developed two cookbooks and 100% of the proceeds
from these cookbooks are donated to various children's charities. These
cookbooks are sold at our restaurants, through national bookstore chains and
through on-line retailers.

Expansion strategy and site selection

Our full service restaurants will continue to
represent the majority of our growth in the near term and our expansion strategy
focuses primarily on further penetrating existing markets. As such, we
anticipate over the next several years that 70% to 80% of our new restaurants
will be in existing markets. This clustering approach enables us to increase
brand awareness and improve our operating and marketing efficiencies. For
example, clustering enables us to reduce costs associated with regional
supervision of restaurant operations and provides us with the opportunity to
leverage marketing costs over a greater number of restaurants. We also believe
this approach reduces the risks involved with opening new restaurants given that
we better understand the competitive conditions, consumer tastes, demographics
and discretionary spending patterns in our existing markets. In addition, our
ability to hire qualified employees is enhanced in markets in which we are well
known.

We believe that our site-selection strategy is critical to
our success and we devote substantial effort to evaluating each potential site
at the highest levels within our organization. We identify
areas within our target markets that meet our demographic requirements, focusing
on daytime and evening populations, shopping patterns, availability of personnel
and household income levels. We only consider expanding to new markets that meet
our strict demographic criteria. Our site selection criteria are flexible given
that we operate restaurants in regional shopping malls, in-line shopping
centers, retail and entertainment centers, free-standing buildings in commercial
and residential neighborhoods, office buildings and hotels. Our prototype full
service restaurant is approximately 4,800 to 5,200 square feet and has
approximately 150 seats. However, we have the ability to operate a full service
restaurant in less than 4,000 square feet, particularly if we are able to secure
additional patio seating. We believe that the size and flexibility of our
formats provide us with a competitive advantage in securing sites. We have
several long-standing relationships with major mall developers and owners, and
are therefore afforded the opportunity to negotiate multiple location deals.

We also own three California Pizza Kitchen ASAP restaurants
which were opened in 2000. These sites are currently under evaluation.

In 2003, we intend to open a minimum of 22 company-owned,
full service restaurants and have signed leases or letters of intent for all of
these sites.

Unit level economics

For 2002, sales of our 96 full service restaurants
open for the entire fiscal year averaged $2.9 million and generated average
restaurant-level pre-tax cash flow of $571,000 per store. Our prototype full
service restaurant is approximately 4,800 to 5,200 square feet and has
approximately 150 seats. Our average cash investment, net of landlord
contributions, was approximately $1.3 million for the 18 full service
restaurants opened in fiscal 2002, excluding pre-opening costs which averaged
approximately $185,000 per restaurant. We expect that in the future our cash
investment, net of landlord contributions, will average approximately $1.3
million, excluding pre-opening costs, which are anticipated to be approximately
$180,000 to $185,000 per restaurant.

Restaurant franchise and licensing arrangements

As part of our strategy to expand and leverage the
California Pizza Kitchen brand, we introduced and franchised the concept of
'California Pizza Kitchen ASAP' in 1996.  Our ASAP restaurants are designed
specifically for the 'grab and go' customer in non-traditional locations and are
typically 600 to 1,000 square feet in size with a limited menu and common area
seating. In addition to our franchised ASAP concept, we franchise on a limited
basis our full service restaurants. Our largest ASAP franchisee, Host Marriott
Services (hereafter referred to as "HMSHost"), operates 20 California
Pizza Kitchen ASAP restaurants, primarily in airports, throughout the United
States under a development and franchise arrangement. MGM Mirage operates one
full service California Pizza Kitchen restaurant in a
high-profile resort in Las Vegas, Nevada. We also have a franchisee operating
one ASAP restaurant in Thousand Oaks, California and one full service restaurant
in Ventura, California; an international franchisee operating five full service
restaurants with two in Singapore and one each in Malaysia, Indonesia and Hong
Kong; and another international franchisee operating four full service
restaurants in the Philippines. The Hong Kong restaurant opened in February 2003
and is the only international franchise expected to open this year.

Our development agreement with HMSHost grants it limited
exclusive rights to open new ASAP restaurants in airports, travel plazas along
toll-roads and in mall food court locations; however, any location proposed by
HMSHost is subject to approval by us in our sole discretion. If HMSHost
determines not to submit a bid or proposal for a new airport, travel plaza or
mall location or determines not to include us in the proposal or bid, we are
free to bid ourselves or to license another party to operate an ASAP in that
location. Under our agreement, HMSHost may only develop a franchised restaurant
in a mall when it obtains a master concessionaire agreement with the landlord to
provide all food services within the food court or other multiple-concept area.
Once we have agreed to HMSHost development of an ASAP restaurant in an airport
or travel plaza location, we may not license or operate a full service
restaurant ourselves at that location. There is no corresponding prohibition
with respect to mall locations.

We have extended HMSHost's limited exclusive rights for the
development of ASAP restaurants until May 2004. HMSHost pays an initial
franchise fee of $20,000 for each ASAP restaurant at a new location and $10,000
for each additional ASAP restaurant at an existing location, and continuing
royalties at rates of 5% to 5.5% of gross sales. The HMSHost franchise agreement
typically terminates at the same time as a HMSHost concessionaire agreement to
operate at an airport or mall terminates.

Our territorial development agreements with our other
franchisees grant them the exclusive right to an identified territory subject to
meeting development obligations. Our basic franchise agreement with these
franchisees generally requires payment of an initial fee of between $55,000 and
$65,000 for a full service restaurant, as well as continuing royalties at a rate
of 5% to 6% of gross revenue. Most of our franchise agreements contain a ten- or
20-year term.

Agreement with Kraft Pizza Company

We have entered into a strategic alliance with Kraft
Pizza Company (hereafter referred to as "Kraft") to manufacture and
distribute a line of California Pizza Kitchen premium frozen pizzas in the
United States and Canada. Kraft currently makes and distributes frozen versions
of seven of our pizzas: the Five Cheese and Tomato Pizza; Original BBQ Chicken
Pizza; Garlic Chicken Pizza; Rosemary Chicken Potato Pizza; Portobello Mixed
Mushroom Pizza; Sausage, Pepperoni & Mushroom Pizza and Thai Chicken Pizza.
Our frozen pizzas are currently sold in 44% of U.S. markets including Los
Angeles, San Francisco, Chicago, Denver, New York, Boston and Atlanta to name
just a few. We intend to continue to expand our distribution area to include
additional selected markets, with a continued focus on those markets in which
our restaurants are located.

Management information systems

All of our restaurants use computerized management
information systems, which are designed to improve operating efficiencies,
provide corporate management timely access to financial and marketing data, and
reduce restaurant and corporate administrative time and expense. Our restaurant
systems include a point-of-sale system, which facilitates the movement of
customer food and beverage orders from the dining areas to the appropriate menu
item preparation area within the restaurant. The data captured by our restaurant
level systems include restaurant sales, cash and credit card receipts,
quantities of each menu item sold, customer counts and daily labor expense. This
information is generally transmitted to the corporate office daily. Each week,
every restaurant prepares a flash profit and loss statement that is compared to
budget and the prior year.

Our corporate information systems provide management with
operating reports that show restaurant performance comparisons with budget and
prior year results both for the current accounting period and year-to-date.
These systems allow us to closely monitor restaurant sales, cost of sales, labor
expense and other restaurant trends on a daily, weekly and monthly basis. We
believe these systems enable both restaurant and corporate management to
adequately manage the operational and financial performance of our restaurants
as necessary to support our planned expansion.

Purchasing

Our purchasing staff procures all of our food
ingredients, products and supplies. We seek to obtain the highest quality
ingredients, products and supplies from reliable sources at competitive prices.
To that end, we continually research and evaluate various food ingredients,
products and supplies for consistency and compare them to our detailed
specifications. Specific, qualified manufacturers and growers are then inspected
and approved for use. This process is repeated at least once a year. To maximize
our purchasing efficiencies and obtain the lowest possible prices for our
ingredients, products and supplies, while maintaining the highest quality, our
centralized purchasing staff generally negotiates all prices based on one of two
formats: (a) fixed price contracts generally with terms of between one month to
one year; or (b) monthly commodity pricing formulas.

In order to provide the freshest ingredients and products,
and to maximize operating efficiencies between purchase and usage, each
restaurant's kitchen manager determines its daily usage requirements for food
ingredients, products and supplies. The kitchen manager orders accordingly from
approved local vendors and our national master distributor. The kitchen managers
also inspect all deliveries daily to ensure that the items received meet our
quality specifications and negotiated prices. We have competitively priced, high
quality alternative manufacturers, vendors, growers and distributors available
should the need arise.

Employees

As of March 12, 2003, we have approximately 8,400
employees, including approximately 98 employees located at our corporate
headquarters. Our employees are not covered by any
collective bargaining agreement. We consider our employee relations to be very
good.

Competition

The restaurant industry is intensely competitive. We
compete on the basis of the taste, quality and price of food offered, customer
service, ambiance, location and overall dining experience. We believe that our
concept, attractive price-value relationship and quality of food and service
enable us to differentiate ourselves from our competitors. Although we believe
we compete favorably with respect to each of these factors, many of our direct
and indirect competitors are well-established national, regional or local chains
and some have substantially greater financial, marketing, and other resources
than we do. We also compete with many other restaurant and retail establishments
for site locations and restaurant level employees. The packaged food industry is
also intensely competitive.

Trademarks

Our registered trademarks and service marks include,
among others, the word mark "California Pizza Kitchen", "California Pizza
Kitchen ASAP" and our stylized logo set forth on the front and back pages of
this report. We have registered all of our marks with the United States Patent
and Trademark Office. We have registered our most
significant trademarks and service marks in more than 20 foreign countries, in
addition to the Benelux Customs Union and the European Union. In order to
better protect our brand, we have also registered our ownership of the Internet
domain names "www.cpk.com" and "www.californiapizzakitchen.com". We believe that
our trademarks, service marks and other proprietary rights have significant
value and are important to our brand-building efforts and the marketing of our
restaurant concepts. We have vigorously protected our proprietary rights in the
past and expect to continue to do so. We cannot predict, however, whether steps
taken by us to protect our proprietary rights will be adequate to prevent
misappropriation of these rights or the use by others of restaurant features
based upon, or otherwise similar to, our concept. It may be difficult for us to
prevent others from copying elements of our concept and any litigation to
enforce our rights will likely be costly.

Availability of reports

Our internet address is
www.cpk.com. At this internet website we make
available, free of charge, our annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act as
soon as reasonably practicable after we electronically file such materials with,
or furnish them to, the SEC.

Government regulation

Our restaurants are subject to licensing and
regulation by state and local health, sanitation, safety, fire and other
authorities, including licensing and regulation requirements for the sale of
alcoholic beverages and food. To date, we have not experienced an inability to
obtain or maintain any necessary licenses, permits or approvals, including
restaurant, alcoholic beverage and retail licensing. The development and
construction of additional restaurants will also be subject to compliance with
applicable zoning, land use and environmental regulations. We are also subject
to federal regulation and state laws that regulate the offer and sale of
franchises and substantive aspects of a licensor-licensee relationship. Various
federal and state labor laws govern our relationship with our employees and
affect operating costs. These laws include minimum wage requirements, overtime,
unemployment tax rates, workers' compensation rates, citizenship requirements
and sales taxes.

We are subject to federal and state environmental
regulations, but these rules have not had a material effect on our operations.
Various laws concerning the handling, storage, and disposal of hazardous
materials, such as cleaning solvents and the operation of restaurants in
environmentally sensitive locations may impact aspects of our operations. During
fiscal 2002 there were no material capital expenditures for environmental
control facilities and no such expenditures are anticipated.

Our facilities must comply with the applicable requirements
of the Americans with Disabilities Act of 1990 ("ADA") and related state
statutes. The ADA prohibits discrimination on the basis of disability with
respect to public accommodations and employment. Under the ADA and related state
laws, when constructing new restaurants or undertaking significant remodeling of
existing restaurants, we must make the restaurants more readily accessible to
disabled persons. We must also make reasonable accommodations for the employment
of disabled persons.

We have a significant number of hourly restaurant employees
that receive tip income. We have elected to voluntary participate in a Tip Rate
Alternative Commitment ("TRAC") agreement with the Internal Revenue Service. By
complying with the educational and other requirements of the TRAC agreement, we
reduce the likelihood of potential employer-only FICA assessments for unreported
or underreported tips.

Risk Factors

Our growth strategy requires us to open new
restaurants at an accelerated pace.  We may not be able to achieve this planned
expansion.

We are pursuing an accelerated, but disciplined, growth
strategy which to be successful depends on our ability, and the ability of our
franchisees and licensees, to open new restaurants and to operate these new
restaurants on a profitable basis.  The success of our planned expansion will be
dependent upon numerous risk factors, many of which are beyond our control,
including the hiring, training and retention of qualified operating personnel,
especially managers, identification and availability of suitable restaurant
sites, competition for restaurant sites, negotiation of favorable lease terms,
timely development of new restaurants, including the availability of
construction materials and labor, management of construction and development
costs of new restaurants, securing required governmental approvals and permits,
competition in our markets, and general economic conditions.  If any of these
risk factors actually occur, our business, financial condition, operating
results or cash flows could be materially adversely affected.

Our success depends on our ability to locate a sufficient
number of suitable new restaurant sites.

One of our biggest challenges in meeting our growth
objectives will be to secure an adequate supply of suitable new restaurant
sites. We have experienced delays in opening some of our restaurants and may
experience delays in the future. There can be no assurance that we will be able
to find sufficient suitable locations for our planned expansion in any future
period. Delays or failures in opening new restaurants could materially adversely
affect our business, financial condition, operating results or cash flows.

We could face labor shortages, which could slow our
growth.

Our success depends in part upon our ability to attract,
motivate and retain a sufficient number of qualified employees, including
restaurant managers, kitchen staff and servers, necessary to keep pace with our
expansion schedule. Qualified individuals of the requisite caliber and number
needed to fill these positions are in short supply in some areas. Although we
have not experienced any significant problems in recruiting or retaining
employees, any future inability to recruit and retain sufficient individuals may
delay the planned openings of new restaurants. Any such delays or any material
increases in employee turnover rates in existing restaurants could have a
material adverse effect on our business, financial condition, operating results
or cash flows. Additionally, competition for qualified employees could require
us to pay higher wages to attract sufficient employees, which could result in
higher labor costs.

Our expansion into new markets may present increased risks
due to our unfamiliarity with the area.

As part of our expansion strategy we will be opening up
restaurants in markets in which we have no prior operating experience.  These
new markets may have different competitive conditions, consumer tastes and
discretionary spending patterns than our restaurants in our existing markets. In
addition, our new restaurants will typically take several months to reach
budgeted operating
levels due to problems associated with new restaurants, including lack of market
awareness, inability to hire sufficient staff and other factors.  Although we
have attempted to mitigate these factors by paying careful attention to training
and staffing needs, there can be no assurance that we will be successful in
operating new restaurants on a profitable basis.

Our expansion may strain our infrastructure, which could
slow our restaurant development.

We also face the risk that our existing systems and
procedures, restaurant management systems, financial controls, and information
systems will be inadequate to support our planned expansion. We cannot predict
whether we will be able to respond on a timely basis to all of the changing
demands that our planned expansion will impose on management and these systems
and controls. If we fail to continue to improve our information systems and
financial controls or to manage other factors necessary for us to achieve our
expansion objectives, our business, financial condition, operating results or
cash flows could be materially adversely affected.

Our restaurant expansion strategy focuses primarily on
further penetrating existing markets. This strategy can cause sales in some of
our existing restaurants to decline.

In accordance with our expansion strategy, we intend to
open new restaurants primarily in our existing markets. Since we typically draw
customers from a relatively small radius around each of our restaurants, the
sales performance and customer counts for restaurants near the area in which a
new restaurant opens may decline due to cannibalization of the existing
restaurant's customer base.

Our operations are susceptible to changes in food and
supply costs, which could adversely affect our margins.

Our profitability depends, in part, on our ability to
anticipate and react to changes in food and supply costs. Our centralized
purchasing staff negotiates prices for all of our ingredients and supplies
through either contracts (terms of one month up to one year) or commodity
pricing formulas. Our national master distributor delivers goods at a set, flat
fee per case twice a week to all of our restaurants. Our contract with our
national master distributor, Meadowbrook Meat Company, Inc., expires in June
2004. Furthermore, various factors beyond our control, including adverse weather
conditions and governmental regulations, could also cause our food and supply
costs to increase. We cannot predict whether we will be able to anticipate and
react to changing food and supply costs by adjusting our purchasing practices. A
failure to do so could adversely
affect our operating results or cash flows.

Changes in consumer preferences or discretionary consumer
spending could negatively impact our results.

Our restaurants feature pizzas, pastas, salads and appetizers
in an upscale, family-friendly, casual environment. Our continued success
depends, in part, upon the popularity of these foods and this style of informal
dining. Shifts in consumer preferences away from this cuisine or dining style
could materially adversely affect our future profitability. Also, our success
depends to a significant extent on numerous factors affecting discretionary
consumer spending, including economic conditions, disposable consumer income and
consumer confidence. Adverse changes in these factors could reduce customer
traffic or impose practical limits on pricing, either of which could materially
adversely affect our business, financial condition, operating results or cash
flows. Like other restaurant chains, we can also be materially adversely
affected by negative publicity concerning food quality, illness, injury,
publication of government or industry findings concerning food products served
by us, or other health concerns or operating issues stemming from one restaurant
or a limited number of restaurants.

Forty percent of our U.S. based restaurants are located in
California. As a result, we are highly sensitive to negative occurrences in that
state.

Our franchisees and we, currently operate a total of 57
restaurants in California (49 are company owned and eight are owned by
franchisees), of which 43 are concentrated in the greater Los Angeles and San
Diego metropolitan areas. As a result, we are particularly susceptible to
adverse trends and economic conditions in California, including adverse
consequences stemming from higher energy prices for gas and electricity. In
addition, given our geographic concentration, negative publicity regarding any
of our restaurants in California could have a material adverse effect on our
business and operations, as could other regional occurrences such as local
strikes, earthquakes or other natural disasters.

Rising insurance costs could negatively impact profitability.

The cost of insurance (workers compensation insurance,
general liability insurance, health insurance and directors and officers
liability) have risen significantly in the past year and are expected to
continue to increase in 2003. These increases could have a negative impact on
our profitability if we are not able to negate the effect of such increases by
continuing to improve our operating efficiencies.

Compliance with changing regulation of corporate governance and public
disclosure may result in additional expenses.

Keeping abreast of, and in compliance with, changing laws,
regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and
Nasdaq Stock Market rules, has required an increased amount of management
attention and external resources. We remain committed to maintaining high
standards of corporate governance and public disclosure. As a result, we intend
to invest all
reasonably necessary resources to comply with evolving standards, and this
investment may result in increased general and administrative expenses and a
diversion of management time and attention from revenue-generating activities to
compliance activities.

The restaurant industry is affected by litigation and
publicity concerning food quality, health and other issues, which can cause
customers to avoid our restaurants and result in liabilities.

We are sometimes the subject of complaints or litigation
from customers or employees alleging illness, injury or other food quality,
health or operational concerns.  Adverse publicity resulting from these
allegations may materially adversely affect our restaurants, regardless of
whether the allegations are valid or whether California Pizza Kitchen is liable.
In fact, we are subject to the same risks of adverse publicity resulting from
these sorts of allegations even if the claim  involves one of our franchisees or
licensees.  Further, employee claims against us based on, among other things,
wage discrimination, harassment or wrongful termination may divert our financial
and management resources that would otherwise be used to benefit the future
performance of our operations.  We have been subject to these employee claims
before, and a significant increase in the number of these claims or any increase
in the number of successful claims could materially adversely affect our
business, financial condition, operating results or cash flows.  We also are
subject to some states' "dram shop" statutes.  These statutes
generally provide a person injured by an intoxicated person the right to recover
damages from an establishment that wrongfully served alcoholic beverages to the
intoxicated person.

Future changes in financial accounting standards may cause
adverse unexpected operating results and affect our reported results of
operations.

A change in accounting standards can have a significant
effect on our reported results and may affect our reporting of transactions
completed before the change is effective. As an example, any changes requiring
that we record compensation expense in our consolidated statement of operations
for employee stock options using the fair value method could have a significant
negative effect on our reported results. New pronouncements and varying
interpretations of pronouncements have occurred and may occur in the future.
Changes to existing accounting rules or the questioning of current accounting
practices may adversely affect our reported financial results.



ITEM 2. PROPERTIES

Our corporate headquarters are located in Los
Angeles, California. We occupy this facility under a lease, which was renewed
effective September 1, 2002 and extends until August 2012. We lease the majority
of our restaurant facilities, although we own our restaurants in: Alpharetta,
Georgia; Grapevine, Texas; Scottsdale, Arizona; Schaumburg, Illinois; and one
location in Atlanta, Georgia. The majority of our leases are for ten- or
fifteen-year terms and include options to extend the terms. The majority of our
leases also include both minimum rent and percentage-of-sales rent
provisions.

Current restaurant locations

As of March 14, 2003, we own 119 restaurants in 25
states and the District of Columbia. We franchise or license our concept to
other restaurant operators including: HMSHost Corporation, which operates 20
California Pizza Kitchen ASAP restaurants; MGM Mirage, which operates one full
service restaurant in a Las Vegas casino; a franchisee, which operates one ASAP
and one full service restaurant in California; and two franchisees, which
currently operate a total of nine full service restaurants in Hong Kong,
Indonesia, Malaysia, Singapore and the Philippines.

`Franchised/
                                       Licensed    Franchised
                      Company-Owned  Full service     ASAP
       Region         Restaurants(1)  Restaurants  Restaurants  Total
--------------------- -------------- ------------- ----------- -------
   Domestic
   Alabama...........             1        --           --          1
   Arizona...........             4        --               1       5
   California........            49             1           7      57
   Colorado..........             4        --           --          4
   Conneticut........             1        --           --          1
   Florida...........             7        --               3      10
   Georgia...........             3        --           --          3
   Hawaii............             3        --           --          3
   Illinois(2).......             6        --           --          6
   Indiana...........       --             --               1       1
   Kentucky..........             1        --           --          1
   Maryland..........             3        --           --          3
   Massachusetts.....             4        --           --          4
   Michigan..........             3        --           --          3
   Minnesota.........             1        --               1       2
   Missouri..........             4        --               2       6
   Nevada............             1             1       --          2
   New Jersey........             2        --           --          2
   New York..........             4        --           --          4
   North Carolina....             2        --               2       4
   Ohio..............             2        --           --          2
   Pennsylvania......             1        --           --          1
   Texas.............             7        --           --          7
   Utah..............             1        --               1       2
   Virginia..........             2        --               1       3
   Washington........             2        --           --          2
   Washington, D.C...             1        --               2       3

   International
   Hong Kong.........       --                  1       --          1
   Indonesia.........       --                  1       --          1
   Malaysia..........       --                  1       --          1
   Singapore.........       --                  2       --          2
   Philippines.......       --                  4       --          4
                      -------------- ------------- ----------- -------
     Totals..........           119            11          21     151`

1. All of our company owned restaurants are full service,
except for three ASAP restaurants, which are located in California.
2. Includes one restaurant in the Chicago area in which we
are the general partner and own approximately 70% of the total partnership
interests.



ITEM 3. LEGAL PROCEEDINGS

On February 10, 2003, one of our former servers
filed a class action complaint against us in Orange County Superior Court in
California.  The plaintiff alleges that we failed to give our food servers,
bussers, runners and bartenders rest and meal breaks as required by California
law.  Under the California Labor Code, an employer must pay each employee one
additional hour of pay at the employee's regular rate of compensation for each
work day that the required meal or rest period is not provided. The plaintiff
also alleges that additional penalties are owed as a consequence of our
resulting failure to pay all wages due at the time of termination of employment
and under theories characterizing these alleged breaches as unfair business
practices.  If the plaintiff is able to achieve class certification and prevails
on the merits of the case, we could potentially be liable for significant
amounts. We are still investigating the claims and have not yet responded to the
complaint.  No discovery has taken place and no date has been set for a hearing
on class certification or for trial. We believe that all of our employees were
provided with the opportunity to take all required meal and rest breaks, and as
such we intend to vigorously defend our position.

We are also subject to other private lawsuits, administrative
proceedings and claims that arise in the ordinary course of our business. Such
claims typically involve claims from guests, employees and others related to
operational issues common to the foodservice industry. A number of such claims
may exist at any given time. We could be affected by adverse publicity resulting
from such allegations, regardless of whether or not such allegations are valid
or whether we are determined to be liable. From time to time, we are also
involved in lawsuits with respect to infringements of, or challenges to, our
registered trademarks. We believe that the final disposition of such lawsuits
and claims will not have a material adverse effect on our financial position,
results of operations or liquidity.



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II



ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS

Our common stock is quoted on the Nasdaq National
Market under the symbol "CPKI." The following table sets forth, for the two most
recent fiscal years, the high and low sales prices as reported on the Nasdaq
National market.

`High         Low
                                                             -----------  ----------

   Fiscal 2001:
     First Quarter......................................... $     33.00  $    19.88
     Second Quarter........................................       28.12       18.89
     Third Quarter.........................................       25.20       14.21
     Fourth Quarter........................................       26.10       15.00

   Fiscal 2002:
     First Quarter......................................... $     26.08  $    18.75
     Second Quarter........................................       26.67       21.85
     Third Quarter.........................................       25.32       17.85
     Fourth Quarter........................................       28.03       19.71`

As of March 12, 2003, there were approximately 167 holders of
record of common stock. On March 12, 2003, the last sale price reported on the
Nasdaq National Market for our common stock was $22.29 per share.

Dividend Policy

We currently intend to retain all future earnings for the
operation and expansion of our business and do not anticipate paying cash
dividends on our common stock in the foreseeable future. We have not paid any
cash dividends since 1992 when dividends were paid in connection with PepsiCo,
Inc.'s acquisition of a controlling interest in the Company.

We have a $20.0 million line of credit agreement with Bank of
America, N.A. that expires on June 30, 2004. Our credit agreement with Bank of
America, N.A. currently prohibits us from declaring or paying any dividends or
other distributions on any shares of our capital stock other than dividends
payable solely in shares of capital stock or the stock of our subsidiaries. Any
payment of cash dividends in the future will be at the discretion of our board
of directors and will depend upon our results of operations, earnings, capital
requirements, contractual restrictions contained in our credit agreement with
Bank of America, N.A., or other agreements, and other factors deemed relevant by
our board.



ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial and
operating data for each of the five fiscal years
in the period ended December 29, 2002 are derived from our audited consolidated
financial statements. The audited consolidated financial statements and
accompanying notes for each of the three fiscal years in the period ended
December 29, 2002, and the report of independent auditors on those years, are
included elsewhere in this report. This selected consolidated financial and
operating data should be read in conjunction with the consolidated financial
statements and accompanying notes, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and other financial information
included elsewhere in this report.

Selected Consolidated Financial and Operating Data

(dollars in thousands, except
per share data, operating data and footnotes)

`Fiscal Year
                                                -----------------------------------------------------
                                                  2002       2001       2000       1999       1998
                                                ---------  ---------  ---------  ---------  ---------
Statement of Operations  Data:
Revenues:
 Restaurant sales............................. $ 303,427  $ 246,445  $ 208,322  $ 176,933  $ 165,028
 Franchise and other revenues.................     2,895      2,817      2,482      2,260      2,013
                                                ---------  ---------  ---------  ---------  ---------
   Total revenues.............................   306,322    249,262    210,804    179,193    167,041
Costs and expenses:
 Cost of sales................................    73,756     60,950     51,748     44,740     43,201
 Labor........................................   110,151     88,898     74,341     63,701     58,547
 Direct operating and occupancy...............    60,652     49,344     41,079     35,848     34,171
                                                ---------  ---------  ---------  ---------  ---------
   Total restaurant operating costs...........   244,559    199,192    167,168    144,289    135,919

 General and administrative...................    18,161     15,489     14,349     13,123     13,890
 Depreciation and amortization................    14,971     11,996      9,568      8,234      7,543
 Pre-opening costs............................     3,355      2,867      1,650        763        234
 Loss on impairment of property and
  equipment and restaurant closures...........     2,380         --      1,839        200         85
 Non-recurring  compensation charge(1)........        --         --      1,949         --         --
                                                ---------  ---------  ---------  ---------  ---------
Operating income .............................    22,896     19,718     14,281     12,584      9,370

Other income (expense):
  Bank financing fees.........................        --         --         --       (998)        --
  Interest income ............................       368        632        469        306         56
  Interest expense............................        --        (25)    (1,881)    (3,721)    (4,012)
                                                ---------  ---------  ---------  ---------  ---------
   Total other income (expense)...............       368        607     (1,412)    (4,413)    (3,956)
                                                ---------  ---------  ---------  ---------  ---------
Income before income tax
 benefit (provision)..........................    23,264     20,325     12,869      8,171      5,414
Income tax benefit (provision)(2).............    (7,934)    (7,114)    (4,504)    (2,772)     5,139
                                                ---------  ---------  ---------  ---------  ---------
Net income ...................................    15,330     13,211      8,365      5,399     10,553
Redeemable preferred stock accretion..........        --         --     (3,512)    (5,147)    (4,478)
                                                ---------  ---------  ---------  ---------  ---------
Net income attributable to
 common shareholders(3)....................... $  15,330  $  13,211  $   4,853  $     252  $   6,075
                                                =========  =========  =========  =========  =========

Net income per common share(4):
   Basic...................................... $    0.82  $    0.72  $    0.35       0.02       0.60
   Diluted.................................... $    0.81  $    0.71  $    0.35       0.02       0.58
Shares used in computing net income
 per common share (in thousands)(4):
   Basic......................................    18,585     18,308     13,703     10,800     10,113
   Diluted....................................    18,871     18,611     14,013     11,168     10,528

Selected Operating Data:
System-wide restaurants open at end of year...       149        131        112         96         90
Company-owned restaurants open
 at end of year...............................       117         99         82         70         67
Average weekly company-owned full
 service restaurant sales..................... $  55,712  $  54,438  $  53,809  $  49,490     47,490
Comparable company-owned
 restaurant sales increase(5).................       4.3%       3.3%       7.8%       4.1%       6.1%

                                                                 Fiscal Year End
                                                -----------------------------------------------------
                                                  2002       2001       2000       1999       1998
                                                ---------  ---------  ---------  ---------  ---------
Selected Balance Sheet Data:
Cash and cash equivalents..................... $  31,261  $  19,788  $  12,649  $   5,686  $  14,553
Total assets..................................   168,445    145,335    116,977     94,750     96,155
Total debt, including current portion.........        --         --         47     40,085     45,385
Redeemable preferred stock....................        --         --         --     43,921     38,774
Shareholders' equity (deficiency).............   134,121    114,106     92,318     (9,829)   (10,439)`

(1) Non-recurring compensation charge of $1.9 million in 2000
represents the performance based stock options becoming exerciseable in
accordance with variable plan accounting under Accounting Principles Board
Opinion No. 25. The performance based stock options were granted to Frederick R.
Hipp, our Chief Executive Officer and President.

(2) Net income for 1998 was favorably impacted by the
reversal of a $7.6 million deferred tax asset valuation allowance that was
previously provided for in 1997. We eliminated the valuation allowance in 1998
due to our belief that current year activity made realization of this benefit
more likely than not.

(3) Net income attributable to common shareholders for 1998
was favorably impacted by the reversal of a $7.6 million deferred tax asset
valuation allowance. Assuming an effective tax rate of 33.9%, consistent with
fiscal year 1999, net income before redeemable preferred stock accretion would
have been reduced by $6.9 million.

(4) See notes 2 and 9 of notes to audited consolidated
financial statements for an explanation of the method used to calculate the net
income per common share and shares used in computing net income per common
share, basic and diluted.

(5) Company-owned restaurants are included in the computation
of comparable company owned restaurant sales after they have been open 12
months.



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview

As of March 14, 2003, we own and operate 119 casual
dining restaurants under the names "California Pizza Kitchen" and "California
Pizza Kitchen ASAP" in 25 states and the District of Columbia. We also franchise
our concept and currently have 32 additional restaurants, which operate under
franchise or license arrangements. During our 18 years of operating history, we
believe we have developed strong brand awareness and demonstrated the appeal of
our concept in a wide variety of geographic areas. Our concept was, and remains,
to take our customers' favorite food cravings and put them on a pizza - to
figuratively put the world on a pizza.

We opened our first casual dining restaurant in 1985 in
Beverly Hills, California and grew steadily to 25 restaurants by early 1992. Our
concept, with its signature line of innovative, premium pizzas, open-flame ovens
in exhibition-style kitchens and excellent guest service, attracted PepsiCo,
Inc. (hereafter referred to as "PepsiCo") which bought a controlling
interest in our company in May, 1992.

During the approximately five-year period when PepsiCo was
our controlling shareholder, we opened 60 restaurants, 16 of which have
subsequently been closed. We experimented with different locations and different
restaurant sizes, ranging from 3,600 square feet to more than 11,000 square
feet. Our rapid expansion strained our infrastructure, resulted in a variety of
management and operational changes, diverted our attention from the execution of
our concept and led to disappointing operating results and financial
performance, including a decline in comparable restaurant sales in 1996.

At the end of 1996, PepsiCo concluded that it would sell or
otherwise divest all of its restaurant businesses, including California Pizza
Kitchen. In September 1997, we consummated a series of transactions to effect a
merger and leveraged recapitalization through which an investor group led by
Bruckmann, Rosser, Sherrill & Co., L.P. acquired PepsiCo's interest in our
company.

Since the beginning of 1998, we have instituted an
accelerated, but disciplined, growth plan, focusing largely on further
penetrating our existing markets. Between January 1998 and December 2002, we
opened 49 new company-owned, full service restaurants and three ASAP
restaurants. We intend to open a minimum of 22 company-owned, full service
restaurants in 2003. We have signed lease agreements or letters of intent for
all of these restaurants. We anticipate that our new restaurants will require a
cash investment, net of landlord contributions, of approximately $1.3 million
per restaurant. Pre-opening expenses for each of these new restaurants is
expected to average approximately $180,000 to $185,000 per restaurant.
Additionally, our new restaurants experience higher cost of sales, labor and
direct operating and occupancy costs for approximately their first 90 to 120
days of operations in both percentage and dollar terms when compared with our
mature restaurants.  Accordingly, the volume and timing of new restaurant
openings has had, and is expected to continue to have, an impact on pre-opening
expenses, cost of sales, labor and direct operating and occupancy costs until
our restaurant operating base is large enough to mitigate these opening costs
and inefficiencies.

Our revenues are comprised of restaurant sales, franchise
royalties and other income. Our restaurant sales are comprised almost entirely
of food and beverage sales. Our franchise royalties and other revenues consist
primarily of monthly royalty income, initial franchise fees and license fees
from our strategic alliance with Kraft.

Cost of sales is comprised of food, beverage and paper supply
expenses. The components of cost of sales are variable and increase with sales
volume. Labor costs include direct hourly and management wages, bonuses and
taxes and benefits for restaurant employees. Direct operating and occupancy
costs include restaurant supplies, marketing costs, fixed rent, percentage rent,
common area maintenance charges, utilities, real estate taxes, repairs and
maintenance and other related restaurant costs. Direct operating and occupancy
costs generally increase with sales volume but decline as a percentage of
restaurant sales.

General and administrative costs include all corporate and
administrative functions that support existing operations and provide
infrastructure to facilitate our future growth. Components of this category
include management, supervisory and staff salaries and related employee
benefits, travel and relocation costs, information systems, training, corporate
rent and professional and consulting fees. Depreciation and amortization
principally includes depreciation on capital expenditures for restaurants. Pre-opening
costs, which are expensed as incurred, consist of the costs of hiring
and training the initial work force, travel, the cost of food used in training,
marketing costs, the cost of the initial stocking of operating supplies and
other direct costs related to the opening of a new restaurant.

In calculating comparable company-owned restaurant sales, we
include a restaurant in the comparable base once it has been open for 12 months.
As of December 29, 2002, we had 96 full service company-owned restaurants which
met this criterion.

Results of operations

Our operating results for 2002, 2001 and 2000 are
expressed as a percentage of revenues below, except for the components of
restaurant operating costs and expenses, which are expressed as a percentage of
restaurant sales:

`2002        2001        2000
                                            ----------  ----------  ----------
Revenues:
  Restaurant sales........................       99.1 %      98.9 %      98.8 %
  Franchise and other revenues............        0.9         1.1         1.2
                                            ----------  ----------  ----------
    Total revenues........................      100.0       100.0       100.0

Costs and expenses:
  Cost of sales...........................       24.3        24.7        24.8
  Labor...................................       36.3        36.1        35.7
  Direct operating and occupancy..........       20.0        20.0        19.7
                                            ----------  ----------  ----------
    Total restaurant operating costs......       80.6        80.8        80.2
  General and administrative..............        5.9         6.2         6.8
  Depreciation and amortization...........        4.9         4.8         4.5
  Pre-opening costs.......................        1.1         1.2         0.8
  Loss on impairment of property and
   equipment and restaurant closures......        0.8          --         0.9
  Non-recurring  compensation charge......         --          --         0.9
                                            ----------  ----------  ----------
Operating income..........................        7.5         7.9         6.8
                                            ----------  ----------  ----------
Other income (expense) :
  Interest income ........................        0.1         0.3         0.2
  Interest expense........................         --          --        (0.9)
                                            ----------  ----------  ----------
    Total other income (expense)..........        0.1         0.2        (0.7)
                                            ----------  ----------  ----------
Income before income tax provision........        7.6         8.2         6.1
Income tax provision......................       (2.6)       (2.9)       (2.1)
                                            ----------  ----------  ----------
Net income................................        5.0 %       5.3 %       4.0 %
                                            ==========  ==========  ==========`

2002 (52 weeks) compared to 2001 (52 weeks)

Total Revenues. Total revenues increased by
$57.1 million, or 22.9%, to $306.3 million in 2002 from $249.3 million in 2001
due to a $57.0 million increase in restaurant sales and a $78,000 increase in
franchise and other revenues. The increase in restaurant sales was due to $27.0
million in additional sales from a full year of operations for the 16
restaurants that opened in 2001 and the purchase of a franchise restaurant in
June 2001, $21.6 million in sales derived from the 18 restaurants opened in 2002
and $8.4 million from comparable restaurant sales increases of 4.3%. The
increase in comparable restaurant sales was driven by increases in average check
of
approximately 3.9% and an increase in customer counts of approximately 0.4%
compared to 2001. Approximately 2.1% of the increase in average check was due to
price increases with the remainder due to modest shifts in our menu mix. The
increase in franchise and other revenues was due to a $229,000 increase in
royalties from Kraft's distribution of our frozen pizza, a $72,000 decrease in
initial franchise fees and a $79,000 decrease in franchise restaurant
royalties.

Cost of sales. Cost of sales increased by $12.8
million, or 21.0%, to $73.8 million in 2002 from $61.0 million in 2001. Cost of
sales as a percentage of restaurant sales decreased to 24.3% in 2002 from 24.7%
in the prior year. This reduction was primarily a result of increased
operational efficiencies, menu pricing and a favorable commodities market.

Labor. Labor increased by $21.3 million, or 24.0%, to
$110.2 million in 2002 from $88.9 million in 2001. As a percentage of restaurant
sales, labor increased to 36.3% in 2002 from 36.1% in the prior year. The
increase in labor as a percentage of restaurant sales was primarily due to the
20% increase in  medical insurance costs compared with 2001.

Direct operating and occupancy. Direct operating and
occupancy increased by $11.3 million, or 22.9%, to $60.7 million in 2002 from
$49.3 million in 2001. Direct operating and occupancy as a percentage of
restaurant sales remained flat at 20.0% in 2002 compared to the prior year as
higher smallware costs associated with the new November menu and increases in
rent were offset by lower utility and delivery charges and higher net sales
spread over relatively fixed restaurant level operating and occupancy expenses.

General and administrative. General and administrative
expenses increased by $2.7 million, or 17.3%, to $18.2 million in 2002 from
$15.5 million in 2001. General and administrative expenses as a percentage of
total revenues decreased to 5.9% in 2002 from 6.2% in the prior year. The
increase in general and administrative dollar expenses was primarily a result of
higher personnel costs related to new management positions. The decrease in
general and administrative expenses as a percentage of revenues was primarily a
result of the Company's increasing revenue base and the ability to leverage
general and administrative personnel.

Depreciation and amortization. Depreciation and
amortization increased by $3.0 million, or 25.0%, to $15.0 million in 2002 from
$12.0 million in 2001. The increase was primarily due to the 18 new restaurants
opened during 2002 and a full year of depreciation on the 16 restaurants opened
in 2001.

Pre-opening costs. Pre-opening costs increased by
$488,000 to $3.4 million in 2002 from $2.9 million in 2001. The increase was due
to the 18 restaurants that opened in 2002 compared to the
16 restaurants that opened in 2001, and an increase in the average pre-opening
cost due to additional labor charges, higher housing costs and delays associated
with some mall opening dates. We anticipate pre-opening expenses to be
approximately $180,000 to $185,000 per restaurant in 2003.



Interest income (expense).  Interest income, net of
interest expense, decreased by $239,000 to $368,000 in 2002 from interest income
of $607,000 in 2001. The decrease was a result of the reduced interest rates
available from financial institutions for 2002 compared to 2001.

Income tax provision. The income tax provision for
2002 and 2001 was based on annual effective tax rates applied to the income
before income tax provision. The 34.1% tax rate in 2002 and 35.0% tax rate in
2001 comprise the federal and state statutory rates, less any tax credits, based
on the annual estimated effective tax rate for the respective years.

Net income. Net income increased by $2.1 million, or
16.0%, to $15.3 million in 2002 from $13.2 million in 2001. Net income as a
percentage of revenues decreased to 5.0% in 2002 from 5.3% in 2001. The decrease
as a percentage of revenues was due to the $2.4 million impairment charge, in
accordance with SFAS No. 144, for the loss on impairment of property and
equipment and restaurant closure costs for one company owned full service
restaurant and one company owned California Pizza Kitchen ASAP restaurant.

2001 (52 weeks) compared to 2000 (52 weeks)

Total Revenues. Total revenues increased by
$38.5 million, or 18.2%, to $249.3 million in 2001 from $210.8 million in 2000
due to a $38.1 million increase in restaurant sales and a $335,000 increase in
franchise and other revenues. The increase in restaurant sales was due to $12.2
million in additional sales from a full year of operations for the 11
restaurants that opened in 2000, $18.9 million in sales derived from the 16
restaurants opened in 2001 and the purchase of one of our franchise restaurants
in June 2001 and $7.0 million from comparable restaurant sales increases of
3.3%. The increase in comparable restaurant sales was driven by increases in
average check of approximately 3.3% and flat customer counts compared to 2000.
Approximately 2.8% of the increase in average check was due to price increases
with the remainder due to modest shifts in our menu mix. Franchise and other
revenue growth was due to the increase in royalties from Kraft's distribution of
our frozen pizza, a full year of operations from the six new franchise
restaurants that opened in 2000 and the initial franchise fees and royalties
from the two franchise restaurants that opened in 2001.

Cost of sales. Cost of sales increased by $9.3
million, or 17.8%, to $61.0 million in 2001 from $51.7 million in 2000. Cost of
sales as a percentage of restaurant sales decreased to 24.7% in 2001 from 24.8%
in the prior year. This reduction was primarily a result of increased
operational
efficiencies and the price increases taken in the second and the fourth quarter
of 2001.

Labor. Labor increased by $14.6 million, or 19.6%, to
$88.9 million in 2001 from $74.3 million in 2000. Labor as a percentage of
restaurant sales increased to 36.1% in 2001 from 35.7% in the prior year. The
increase in labor as a percentage of restaurant sales was primarily due to
higher hourly labor which increased to 21.7% of restaurant sales in 2001 from
21.4% in the prior year as a result of inefficiencies related to new store
openings and higher management labor as a percentage of sales resulting from the
hiring of additional managers in anticipation of new store openings.

Direct operating and occupancy. Direct operating and
occupancy increased by $8.3 million, or 20.1%, to $49.3 million in 2001 from
$41.1 million in 2000. Direct operating and occupancy as a percentage of
restaurant sales increased to 20.0% in 2001 from 19.7% from the prior year. The
increase was due primarily to higher natural gas and electricity costs and
higher CAM charges for new restaurant openings.

General and administrative. General and administrative
increased by $1.1 million, or 7.9%, to $15.5 million in 2001 from $14.3 million
in 2000. General and administrative as a percentage of total revenue decreased
to 6.2% in 2001 from 6.8% in the prior year. The increase in general and
administrative expenses was primarily a result of higher travel and moving
expenses related to manager relocations for our new restaurants and higher
personnel costs related to new management positions. The decrease in general and
administrative expenses as a percentage of revenues was primarily a result of
the Company's increasing revenue base and its ability to leverage its general
and administrative personnel, coupled with the elimination of our co-founders'
salaries effective October 1, 2000.

Depreciation and amortization. Depreciation and
amortization increased by $2.4 million, or 25.4%, to $12.0 million in 2001 from
$9.6 million in 2000. The increase was primarily due to the 16 new restaurants
opened during 2001 and a full year of depreciation on the 11 restaurants opened
in 2000.

Pre-opening costs. Pre-opening costs increased by $1.2
million to $2.9 million in 2001 from $1.7 million in 2000. The increase was due
to the 16 restaurants that opened in 2001 compared to the 11 restaurants that
opened in 2000, as well as pre-opening costs incurred related to restaurants
that we plan to open in the first quarter of 2002.

Loss on impairment of property and equipment and
restaurant closures. The $1.8 million loss on impairment of property and
equipment for 2000 relates to the write-down of one restaurant in accordance
with Statement of Financial Accounting Standard (SFAS) No. 144.

Non-recurring compensation charge. The non-recurring
compensation charge of $1.9 million in 2000 represents performance-based stock
options granted to Frederick R. Hipp, our Chief
Executive Officer and President. Upon closing of the initial public offering,
these options became exerciseable triggering a variable plan accounting charge
in accordance with Accounting Principles Board Opinion (APB) No. 25.

Interest income (expense).  Interest income, net of
interest expense, increased by $2.0 million to $607,000 in 2001 from interest
expense of $1.4 million for 2000. The increase was a result of the interest
earned on the cash balances since the repayment of our term note and the pay-down of
the revolving line of credit on August 7, 2000 from the proceeds of our
initial public offering.

Income tax provision. The income tax provision for
2001 and 2000 was based on annual effective tax rates applied to the income
before income tax provision. The 35.0% tax rate in 2001 and 2000  comprises the
federal and state statutory rates based on the annual estimated effective tax
rate for the respective years.

Net income. Net income increased by $4.8 million, or
57.9%, to $13.2 million in 2001 from $8.4 million in 2000. Net income as a
percentage of revenues increased to 5.3% in 2001 from 4.0% in 2000. The increase
was due to the elimination of interest expense in favor of interest income in
2001 and by the $1.8 million write down of one restaurant in 2000 in accordance
with SFAS No. 121 and the $1.9 million non-recurring compensation charge for
performance-based stock options in accordance with APB No. 25.

Potential fluctuations in quarterly results and seasonality

Our quarterly operating results may fluctuate
significantly as a result of a variety of factors, including the timing of new
restaurant openings and related expenses, profitability of new restaurants,
increases or decreases in comparable restaurant sales, general economic
conditions, consumer confidence in the economy, changes in consumer preferences,
competitive factors, changes in food costs, changes in labor costs, war and
weather conditions. In the past we have experienced significant variability in
pre-opening costs from quarter to quarter. These fluctuations are primarily a
function of the timing of restaurant openings. We typically incur the most
significant portion of pre-opening costs associated with a given restaurant
within the one month immediately preceding, and the month of, opening a new
restaurant. In addition, our experience to date has been that labor and direct
operating and occupancy costs associated with a newly opened restaurant during
the first three to four months of operation are often materially greater than
what will be expected after that time, both in aggregate dollars and as a
percentage of restaurant sales. Accordingly, the number and timing of new
restaurant openings in any quarter has had, and is expected to continue to have,
a significant impact on quarterly pre-opening costs and labor and direct
operating and occupancy costs. As a result of our plans to open new restaurants
at an accelerated pace, we anticipate that we will experience significantly
increased pre-opening costs, labor and direct operating and occupancy costs in
2003.

Our business is also subject to seasonal fluctuations.
Historically, sales in most of our restaurants have been higher during the
summer months and winter holiday season. As a result, we expect our highest
earnings to occur in those periods. As a result of all of these factors, results
for any one-quarter are not necessarily indicative of the results to be expected
for any other quarter or for any year.

Liquidity and capital resources

In recent years we have funded our capital
requirements primarily through cash flow from operations and proceeds from the
initial public offering of our stock.  In 2002, net cash flow provided by
operating activities was $41.2 million compared to $32.7 million in 2001 and
$21.2 million in 2000.  Net cash flow provided by operating activities exceeded
net income for 2002 due to the effects of depreciation and amortization, loss on
impairment of property and equipment and restaurant closures, change in deferred
tax asset and the net changes in operating assets and liabilities.  The net
change in operating assets and liabilities in 2002 was primarily due to a
decrease in trade receivables due to the collection of landlord contributions
and an increase in accounts payable, accrued and other liabilities.  In both
2001 and 2000, net cash flow provided by operating activities exceeded the net
income due to the effects of depreciation and amortization, loss on impairment
of property and equipment and restaurant closures, a non-recurring compensation
charge in 2000 and changes in working capital.

We use cash to fund the development and construction of new
restaurants and remodel our existing restaurants. Net cash used in investing
activities in 2002 was $33.5 million, of which $26.5 million was spent on new
restaurants and $7.0 million was spent on remodels and capitalized maintenance.
We opened 18 new restaurants in 2002 compared to 16 in 2001. Net cash used in
investing activities for 2001 was $32.8 million, of which $24.8 million was
spent on new restaurants opened in 2001 and $6.0 million was spent on remodels.
Net cash used in investing activities for 2000 was $22.3 million, of which
approximately $17.2 million was spent on 11 new restaurants opened in 2000 and
$5.1 million was spent on remodels. We expect to open a minimum of 22 full
service restaurants in 2003 and anticipate these planned future restaurants will
require, on average, a total cash investment per restaurant, after landlord
contributions, of approximately $1.3 million. Additionally, we anticipate pre-opening
costs on average to be approximately $180,000 to $185,000, however, any
unexpected delays in construction, labor shortages or other factors could result
in higher than anticipated pre-opening costs.

Net cash provided by financing activities was $3.7 million in
2002. Financing activities in 2002 consisted of employee common stock option
exercises and purchases under our employee stock purchase plan. Net cash
provided by financing activities in 2001 was $7.2 million, compared to $7.9
million in 2000. Financing activities in 2001 consisted primarily of $4.3
million from the sale of securities, net of underwriting fees and expenses
associated with our follow-on offering; and $2.9 million from employee common
stock option exercises and purchases under our employee stock purchase plan.
Financing activities in 2000 consisted primarily of $72.0 million from the sale
of securities, net of underwriting fees and expenses, offset by debt payments of
$40.0 million and cash payments of $23.7 million to our preferred shareholders
upon conversion of their preferred stock into common stock. As of December 29,
2002 we have a $20.0 million revolving line of credit, of which nothing is
currently outstanding. The line of credit expires on June 30, 2004 and bears
interest at either the bank base rate minus 0.75% or LIBOR plus 1.0%.
Availability under the credit facility is reduced by outstanding letters of
credit, which totaled $1.6 million as of December 29, 2002. In addition, the
credit facility includes financial and non-financial covenants, with which the
Company was in full compliance as of December 29, 2002 and as of the date of
this report.

Our capital requirements, including costs related to opening
additional restaurants, have been and will continue to be significant. Our
future cash requirements and the adequacy of available funds will depend on many
factors, including the pace of expansion, real estate markets, site locations
and the nature of the arrangements negotiated with landlords. We believe that
our current cash balances, together with anticipated cash flows from operations
and funds anticipated to be available from our credit facility, will be
sufficient to satisfy our working capital and capital expenditure requirements
on a short-term and long-term basis. Changes in our operating plans,
acceleration of our expansion plans, lower than anticipated sales, increased
expenses or other events may cause us to seek additional financing sooner than
anticipated. Additional financing may not be available on acceptable terms, or
at all. Failure to obtain additional financing as needed could have a material
adverse effect on our business and results of operations.



Contractual Commitments

The following schedule summarizes our contractual
commitments as of December 29, 2002 (in thousands):

`Fiscal year ending:
     2003.................................... $  17,721
     2004....................................    17,845
     2005....................................    17,913
     2006....................................    17,659
     2007....................................    17,236
     Thereafter..............................    70,081
                                               ---------
                                              $ 158,455
                                               =========`

Related Party Transactions

On March 6, 2003, the Company invested $2.0 million
for a 25.0% stake in LA Food Show, Inc., an upscale family casual dining
concept. The concept was created by the Company's co-founders, Larry S. Flax and
Richard L. Rosenfield, who currently serve on the Company's board as Co-Chairmen.
Larry S. Flax and Richard L. Rosenfield own the remaining 75% of
equity in LA Food Show, Inc. Under the terms of the agreement the Company
reserves the right of first negotiation for the 75.0% of outstanding equity it
does not currently own. The Company has not made any commitments or guarantees
on behalf of LA Food Show, Inc., and does not expect to do so.

In connection with our initial public offering, our Chief
Executive Officer exercised options to purchase 110,696 shares of common stock.
Under the agreement granting these options, we were required to pay an amount
equal to 20% of the gain recognized by our Chief Executive Officer for federal
income tax purposes, which was $325,000.  In addition, we loaned our Chief
Executive Officer $586,000 which is equal to the difference between the cash
payment and the total income tax liability he incurred as a result of this
exercise. The full recourse promissory note was paid in
full, including accrued interest, upon maturation in August 2002.

On August 24, 2001, we loaned one of our officers $65,000.
The loan is supported by a full recourse promissory note, which bears interest
at 7.5% per annum. As of December 29, 2002, the amount outstanding on this loan
totaled $32,000 and is included in other assets.The full
recourse promissory note was paid in full, including accrued interest, upon
maturation in February 2003.

One of our directors, Rick J. Caruso, also serves as
President of CAH Restaurants of California, LLC. We have entered into franchise
and development agreements with CAH Restaurants of California, LLC pursuant to
which it currently operates two California Pizza Kitchen restaurants.  CAH
Restaurants of California, LLC pays franchise and royalty fees to us under these
agreements. We recorded an aggregate of $260,000, $204,000 and $131,000 in such
fees during the years ended 2002, 2001 and 2000, respectively.

Critical Accounting Policies

Critical accounting policies are those that we
believe are most important to portraying our financial condition and results of
operations and also require the greatest amount of subjective or complex
judgments by management. Judgments or uncertainties regarding the application of
these policies may result in materially different amounts being reported under
different conditions or using different assumptions. We consider the following
policies to be the most critical in understanding the judgments that are
involved in preparing our consolidated financial statements.

Property and Equipment

Property and equipment is recorded at cost.
Property and equipment is depreciated over the assets' estimated useful lives
using the straight-line method. Leasehold improvements are amortized using the
straight-line method over the estimated useful life of the asset or the term of
the related lease, whichever is shorter. The lives for furniture, fixtures, and
equipment are ten years. The lives for buildings and leasehold improvements are
the shorter of 20 years or the term of the related operating lease.

Income Taxes

The Company utilizes the liability method of accounting
for income taxes as set forth in Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes". Under the liability
method, deferred taxes are determined based on the difference between the
financial statement and the tax basis of assets and liabilities using enacted
tax rates in effect in the years in which the differences are expected to
reverse. Recognition of deferred tax assets is limited to amounts considered by
management to be more likely than not of realization in future periods.

Restaurant and Franchise Revenues

Revenues from the operation of company owned
restaurants are recognized when sales occur. All fees from franchised operations
are included in revenue as earned. Royalty fees are based on franchised
restaurants' revenues and are recorded by the Company in the period the related
franchised restaurants' revenues are earned.

Pre-opening Costs

The Company follows Statement of Position (SOP) 98-5,
"Reporting on the Costs of Start-up Activities," which was issued by the
Accounting Standards Executive Committee and provides guidance on the financial
reporting of the start-up costs and organization costs. The SOP requires costs
of start-up activities and organization costs to be expensed as incurred.

Stock-based Compensation

Statement of Financial Accounting Standards (SFAS) No.
123, "Accounting for Stock-Based Compensation," encourages but does
not require a fair value based method of accounting for employee stock options
or similar equity instruments. SFAS No. 123 allows an entity to elect to
continue to measure compensation costs under Accounting Principles Board Opinion
(APB) No. 25, "Accounting for Stock Issued to Employees," but requires
pro forma disclosure of net earnings as if the fair value based method of
accounting had been applied.

The Company elected to follow APB No. 25, and related
Interpretations in accounting for our employee stock options because the
alternative fair value accounting provided for under SFAS No. 123, "Accounting
for Stock Based Compensation," requires use of option valuation models that were
not developed for use in valuing employee stock options. Under APB No. 25,
because the exercise price of our employee stock options equals or exceeds the
fair value of the underlying stock on the date of grant, no compensation expense
is recognized.

New Accounting Standards

The Financial Accounting Standards Board ("FASB")
recently issued several Statements of Financial Accounting Standards ("SFAS").
The statements relevant to our line of business and the impact on us are as
follows:

In June 2001, the FASB issued SFAS No. 141, "Business
Combinations", and No. 142, "Goodwill and Other Intangible
Assets", effective for fiscal years beginning after December 15, 2001.
Statement 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001.  Under SFAS No. 142,
goodwill (and intangible assets deemed to have indefinite lives) will no longer
be amortized but will be subject to annual impairment tests.  Other intangible
assets will continue to be amortized over their useful lives.  As of December
29, 2002, we wrote off all intangible balances of goodwill, which resulted in
amortization expense of $174,000.

In August 2001, the FASB issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets,"
which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, "Accounting
for the Impairment or Disposal of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" and the accounting and reporting provisions of Accounting
Principles Board (APB) Opinion No. 30, "Reporting the Results of
Operations" for a disposal of a segment of a business. SFAS No. 144 is
effective for fiscal years beginning after December 15, 2001, with earlier
application encouraged. We adopted SFAS No. 144 as of December 31,
2001. In accordance with SFAS No. 144 we recorded a $2.4 million expense
associated with impairment charges and anticipated closure costs for one
company-owned full service restaurant and one company-owned ASAP restaurant.

In June 2002, the Financial Accounting Standards Board issued
SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." SFAS No. 146 supersedes Emerging Issues Task Force ("EITF") No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (Including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 requires a liability for costs associated with an
exit or disposal activity to be recognized when the liability is incurred. SFAS
No. 146 is effective for exit or disposal activities that are initiated after
December 31, 2002. We do not expect the
adoption of this statement to have an impact on the consolidated results of
operations or financial position.

In December 2002, the FASB issued SFAS No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure." SFAS
No. 148 amends FASB Statement No. 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition to SFAS No. 123's
fair value method of accounting for stock-based employee compensation. SFAS No.
148 also amends the disclosure provisions of SFAS No. 123 and APB Opinion No.
28, "Interim Financial Reporting," to require disclosure in the summary of
significant accounting policies of the effects of an entity's accounting policy
with respect to stock-based employee compensation on reported net income and
earnings per share in annual and interim financial statements. While SFAS No.
148 does not amend SFAS No. 123 to require companies to account for employee
stock options using the fair value method, the disclosure provisions of SFAS No.
148 are applicable to all companies with stock-based employee compensation,
regardless of whether they account for that compensation using the fair value
method of SFAS No. 123 or the intrinsic value method of APB Opinion No. 25. As
allowed by SFAS No. 123, we have elected to continue to utilize the accounting
method prescribed by APB Opinion No. 25 and have adopted the disclosure
requirements of SFAS No. 148.

Inflation

The primary inflationary factors affecting our
operations are food and labor costs. A large number of our restaurant personnel
are paid at rates based on the applicable minimum wage, and increases in the
minimum wage directly affect our labor costs. Many of our leases require us to
pay taxes, maintenance, repairs, insurance and utilities, all of which are
generally subject to inflationary increases. We believe inflation has not had a
material impact on our results of operations in recent years.

ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Our market risk exposures are related to our cash
and cash equivalents. As of December 29, 2002 we invested our excess cash in
highly liquid investments with maturities of less than three months as of the
date of purchase. These investments are not held for trading or other
speculative purposes. Changes in interest rates affect the investment income we
earn on our investments and therefore, impact our cash flows and results of
operations.

In addition, we have a $20.0 million line of credit agreement
with Bank of America, N.A. that expires on June 30, 2004. Interest on the line
of credit is calculated on either the bank base rate minus 0.75% or LIBOR plus
1.0%. Currently, there is no outstanding balance under this agreement. Should we
draw on this line in the future, changes in interest rates would affect the
interest expense on these loans and therefore, impact our cash flows and results
of operations.

Many of the food products purchased by us are affected by
changes in weather, production, availability, seasonality and other factors
outside our control. In an effort to control some of this risk, we have entered
into some fixed price purchase commitments with terms of no more than a year. In
addition, we believe that almost all of our food and supplies are available from
several sources, which helps to control food commodity risks.



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements required to be filed hereunder
are set forth on pages 38 through 55 of this report.



None.

PART III



ITEMS 10, 11, 12 AND 13:

The information required by Items 10, 11, 12 and 13 is hereby
incorporated by reference from the Registrant's definitive proxy statement for
the Annual Meeting of Stockholders to be held on May 7, 2003 which will be filed
with the Commission within 120 days after the close of the Company's fiscal
year.



ITEM 14. CONTROLS AND PROCEDURES

(a) Under the supervision and with the participation
of our management, including our principal executive officer and principal
financial officer, we conducted an evaluation of our disclosure controls and
procedures, as such term is defined under Rule 13a-14(c) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), within 90 days
of the filing
date of this report. Based on their evaluation, our principal executive officer
and principal financial officer concluded that our disclosure controls and
procedures are effective.

(b) There have been no significant changes (including
corrective actions with regard to significant deficiencies or material
weaknesses) in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of the evaluation
referenced in paragraph (a) above.

PART IV



ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON

FORM 8-K

1. The following documents are filed as a part of this Report:

(a) The Consolidated Financial Statements required to be filed hereunder are
listed in the Index to Consolidated Financial Statements on page 36 of this
report.

(b) The Registrant did not file any reports on Form 8-K during the last
quarter of its fiscal year ended December 29, 2002.

(c) The Exhibits required to be filed hereunder are listed in the exhibit
index included herein at page 56 and are incorporated by reference into this
Form 10-K.



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                               | Page
|---------------------------------------------------------------------------------------------------------------------------------------------- | ----
|Report of Independent Auditors                                                                                                                 | 37  
|Consolidated Financial Statements:                                                                                                             |     
|Consolidated Balance Sheets at December
29, 2002 and December 30, 2001                                                                         | 38  
|Consolidated Statements of Income for the Years Ended
December 29, 2002,
              December 30, 2001 and  December 31, 2000                | 39  
|Consolidated Statements of Shareholders' Equity for the
Years 
              Ended December 29, 2002, December 30, 2001 and  December
31, 2000 | 40  
|Consolidated Statements of  Cash Flows for the Years
Ended
              December 29, 2002, December 30, 2001 and  December 31,
2000           | 41  
|Notes to Consolidated Financial Statements                                                                                                     | 43  

2. Schedules to Financial Statements:

All financial statement schedules have been omitted because they are either
inapplicable or the information required is provided in the Company's Consolidated Financial
Statements and Notes thereto, included in Part II, Item 8 of this Annual Report on Form 10-K.

---



REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders of
California Pizza Kitchen, Inc.

We have audited the accompanying consolidated balance sheets
of California Pizza Kitchen, Inc. and Subsidiaries (the "Company") as of
December 29, 2002 and December 30, 2001, and the related consolidated statements
of income, shareholders' equity and cash flows for each of the three fiscal
years in the period ended December 29, 2002. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of California Pizza Kitchen, Inc. and Subsidiaries at December 29, 2002
and December 30, 2001 and the consolidated results of their operations and their
cash flows for each of the three fiscal years in the period ended December 29,
2002 in conformity with accounting principles generally accepted in the United
States.

/s/ Ernst & Young LLP

Long Beach, California
    January 24, 2003

---

CALIFORNIA PIZZA KITCHEN, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

            December 29, 2002 and December 30, 2001
(in thousands, except for share data)

`2002       2001
                                                                                ---------  ---------
                                    Assets
Current assets:
  Cash and cash equivalents................................................... $  31,261  $  19,788
  Accounts receivable.........................................................     2,933      4,741
  Inventories.................................................................     2,466      1,777
  Prepaid expenses and other current assets...................................     1,216        877
                                                                                ---------  ---------
Total current assets..........................................................    37,876     27,183
Property and equipment, net...................................................   126,356    109,530
Deferred taxes, net...........................................................     2,404      6,241
Other assets..................................................................     1,809      2,381
                                                                                ---------  ---------
Total assets.................................................................. $ 168,445  $ 145,335
                                                                                =========  =========
                     Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable............................................................ $   3,858  $   3,246
  Accrued compensation and benefits...........................................    10,955      9,117
  Accrued rent................................................................     6,952      5,870
  Other accrued liabilities...................................................     8,105      6,959
  Accrued income tax .........................................................     1,444      3,460
                                                                                ---------  ---------
Total current liabilities.....................................................    31,314     28,652
Commitments and Contingencies.................................................
Other liabilities.............................................................     3,010      2,577
Shareholders' equity:
  Common Stock--$0.01 par value, 80,000,000 shares authorized,
   18,743,439 and 18,425,343 shares issued and outstanding
   at December 29, 2002 and December 30, 2001, respectively...................       187        184
  Additional paid-in capital..................................................   211,306    206,624
  Accumulated deficit.........................................................   (77,372)   (92,702)
                                                                                ---------  ---------
Total shareholders' equity ...................................................   134,121    114,106
                                                                                ---------  ---------
Total liabilities and shareholders' equity ................................... $ 168,445  $ 145,335
                                                                                =========  =========`

See accompanying notes.

---

CALIFORNIA PIZZA KITCHEN, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

       Years ended December 29, 2002, December 30, 2001 and December 31, 2000
(in thousands, except for per share data)

`2002        2001        2000
                                            ----------  ----------  ----------
Revenues:
  Restaurant sales........................ $  303,427  $  246,445  $  208,322
  Franchise and other revenues............      2,895       2,817       2,482
                                            ----------  ----------  ----------
    Total revenues........................    306,322     249,262     210,804

Costs and expenses:
  Cost of sales...........................     73,756      60,950      51,748
  Labor...................................    110,151      88,898      74,341
  Direct operating and occupancy..........     60,652      49,344      41,079
                                            ----------  ----------  ----------
    Total restaurant operating costs......    244,559     199,192     167,168
  General and administrative..............     18,161      15,489      14,349
  Depreciation and amortization...........     14,971      11,996       9,568
  Pre-opening costs.......................      3,355       2,867       1,650
  Loss on impairment of property and
   equipment and restaurant closures......      2,380          --       1,839
  Non-recurring  compensation charge......         --          --       1,949
                                            ----------  ----------  ----------
Operating income..........................     22,896      19,718      14,281
                                            ----------  ----------  ----------
Other income (expense) :
  Interest income ........................        368         632         469
  Interest expense........................         --         (25)     (1,881)
                                            ----------  ----------  ----------
    Total other income (expense)..........        368         607      (1,412)
                                            ----------  ----------  ----------

Income before income tax provision........     23,264      20,325      12,869
Income tax provision......................     (7,934)     (7,114)     (4,504)
                                            ----------  ----------  ----------
Net income................................     15,330      13,211       8,365
Redeemable preferred stock accretion......         --          --      (3,512)
                                            ----------  ----------  ----------
Net income attributable to common
 shareholders............................. $   15,330  $   13,211  $    4,853
                                            ==========  ==========  ==========
Net income per common share:
  Basic................................... $     0.82  $     0.72  $     0.35
                                            ==========  ==========  ==========
  Diluted................................. $     0.81  $     0.71  $     0.35
                                            ==========  ==========  ==========
Shares used in calculating net income per
 common share:
  Basic...................................     18,585      18,308      13,703
                                            ==========  ==========  ==========
  Diluted.................................     18,871      18,611      14,013
                                            ==========  ==========  ==========`

See accompanying notes.

---

CALIFORNIA PIZZA KITCHEN, INC. AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
(in thousands, except for per share data)

`Common Stock     Additional
                                          --------------------   Paid-in    Accumulated
                                            Shares     Amount    Capital     Deficit    Total
                                          -----------  -------  ----------  ---------  --------
Balances at January 2, 2000.............. 10,896,570  $   109  $  104,340  $(114,278) $  (9,829)
 Exercise of employee stock
  options................................    111,583        1          49         --         50
 Issuance of common stock, net
  of issuance costs of $7,594............  5,300,000       53      71,853         --     71,906
 Conversion of preferred stock
  into common stock......................  1,580,938       16      23,698         --     23,714
 Compensation expense from stock
  option exercise, net...................         --       --       1,624         --      1,624
 Preferred stock accretion...............         --       --      (3,512)        --     (3,512)
 Net income..............................         --       --          --      8,365      8,365
                                          -----------  -------  ----------  ---------  --------
Balances at December 31, 2000............ 17,889,091      179     198,052   (105,913)    92,318
 Exercise of employee stock
  options................................    206,871        2       1,104         --      1,106
 Shares redeemed upon exercise of
  employee stock option..................     (9,160)      --          --         --         --
 Issuance of common stock, net
  of issuance costs of $844..............    200,000        2       4,339         --      4,341
 Issuance of common stock, under
  employee stock purchase plan...........    138,541        1       1,774         --      1,775
 Tax benefit from employee stock option
 exercises and employee stock purchase
  plan disqualifying dispositions........         --       --       1,355         --      1,355
 Net income..............................         --       --          --     13,211     13,211
                                          -----------  -------  ----------  ---------  --------
Balances at December 30, 2001............ 18,425,343      184     206,624    (92,702)   114,106
 Exercise of employee stock
  options................................    189,493        2       2,022         --      2,024
 Issuance of common stock, under
  employee stock purchase plan...........    128,603        1       1,701         --      1,702
 Tax benefit from employee stock option
 exercises and employee stock purchase
  plan disqualifying dispositions........         --       --         959         --        959
 Net income..............................         --       --          --     15,330     15,330
                                          -----------  -------  ----------  ---------  --------
Balances at December 29, 2002............ 18,743,439  $   187  $  211,306  $ (77,372) $ 134,121
                                          ===========  =======  ==========  =========  ========`

See accompanying notes.

---

CALIFORNIA PIZZA KITCHEN, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

       Years ended December 30, 2001, December 31, 2000 and January 2, 2000
(in thousands)

`2002      2001      2000
                                                           --------  --------  --------
Operating activities:
Net income............................................... $ 15,330  $ 13,211  $  8,365
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Depreciation and amortization..........................   14,971    11,996     9,568
  Minority interest in limited partnerships..............       --        --        38
Loss on impairment of property and
   equipment and restaurant closures.....................    2,380        --     1,839
  Non-recurring compensation charge......................       --        --     1,949
  Change in deferred tax asset...........................    3,837      (288)   (1,199)
  Changes in operating assets and liabilities:
    Accounts receivable..................................    1,808    (1,246)   (2,003)

    Inventories..........................................     (689)     (168)     (388)
    Prepaid expenses and other assets....................      233     1,243      (795)
    Accounts payable.....................................      612      (227)     (204)
    Accrued liabilities..................................    1,733     8,144     2,962
    Other liabilities....................................    1,029        54     1,108
                                                           --------  --------  --------
Net cash provided by operating activities................   41,244    32,719    21,240
                                                           --------  --------  --------
Investing activities:
Capital expenditures.....................................  (33,497)  (32,755)  (22,323)
                                                           --------  --------  --------
Net cash used in investing activities....................  (33,497)  (32,755)  (22,323)
                                                           --------  --------  --------
Financing activities:
Payments on long-term debt...............................       --       (47)  (40,038)
Net proceeds from issuance of common stock...............    3,726     7,222    71,956
Payment and variable accounting charge for stock options.       --        --      (325)
Redemption of preferred stock............................       --        --   (23,719)
                                                           --------  --------  --------
Net cash provided by financing activities................    3,726     7,175     7,874
                                                           --------  --------  --------
Net increase in cash and cash
 equivalents.............................................   11,473     7,139     6,791
Cash and cash equivalents at beginning of year...........   19,788    12,649     5,686
Cash from consolidation of investment
   in limited partnership................................       --        --       172
                                                           --------  --------  --------
Cash and cash equivalents at end of year................. $ 31,261  $ 19,788  $ 12,649
                                                           ========  ========  ========
Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Interest............................................. $     --  $     25  $  2,037
    Income taxes......................................... $  5,088  $  3,737  $  4,673`

CALIFORNIA PIZZA KITCHEN, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years ended December 29, 2002, December 30, 2001 and

(in thousands except
for share data)

Supplemental disclosure of non-cash financing activities:

During the fiscal year ended December 30, 2001, one
of the Company's officers exercised options to purchase 14,375 shares of common
stock with an aggregate exercise price of $214 by exchanging 9,160 shares
previously owned.

During the fiscal year ended December 31, 2000, the Company
began consolidating its limited partnership restaurant.  Assets and liabilities
acquired upon consolidation, excluding cash, were $35 and $102,
respectively.

On August 7, 2000, the Company redeemed all outstanding
shares of preferred stock at its liquidation value of $47,433 for a right to
receive cash of $23,719 and 1,580,938 shares of common stock.



See accompanying notes.

---

CALIFORNIA PIZZA KITCHEN, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          Years ended December 29, 2002, December 30, 2001 and
December 31, 2000
               (in thousands, except for share and per share data)

1. Description of Business

Nature of Business

As of December 29, 2002, California Pizza Kitchen,
Inc. and its wholly owned subsidiaries (the "Company") owns, operates, licenses
or franchises 149 restaurants under the names California Pizza Kitchen and
California Pizza Kitchen ASAP in 26 states and the District of Columbia, and
four foreign countries, of which 117 are company-owned and 32 operate under
franchise or license arrangements.

The Company manages its operations by restaurant. The Company
has aggregated its operations to one reportable segment.

2. Summary of Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements
include the accounts of California Pizza Kitchen, Inc. and its wholly owned
subsidiaries. In addition, the Company was a general partner in a limited
partnership which was formed to operate a restaurant in Chicago. In January
2000, the Company acquired a majority interest in its remaining limited
partnership restaurant.  As such, beginning January 3, 2000, the Company
consolidated the financial statements of the limited partnership with its own
financial statements.  Prior to fiscal 2000, the Company accounted for its
ownership in the limited partnership (which are not material) under the equity
method of accounting.  All significant intercompany balances and transactions
have been eliminated.

Fiscal Year End

The Company's fiscal year ends on the Sunday closest
to December 31. The Company's fiscal years ended December 29, 2002, December 30,
2001 and December 31, 2000, each covered 52 weeks. For purposes of the
accompanying consolidated financial statements, the years ended December 29,
2002, December 30, 2001 and December 31, 2000 may be referred to as the fiscal
years 2002, 2001 and 2000, respectively.

Use of Estimates

The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could differ
from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments
with maturities of three months or less when purchased to be cash equivalents.
The Company places its cash deposits with highly qualified financial
institutions. As of December 29, 2002 the Company did not have any investments
with maturities greater than three months.

Accounts Receivable

The Company negotiates reimbursements from landlords for the
construction of new restaurants.  These reimbursements reduce the capitalized
costs of new restaurants.  Included in accounts receivable are contractual
amounts due from landlords related to new restaurant construction costs. As of
December 29, 2002 and December 30, 2001, the Company has recorded receivables
related to construction improvement allowances of $2,148 and $3,619,
respectively, and has reduced property and equipment by these amounts
accordingly.

Inventories

Inventories consist of food and beverage, uniforms
and supplies. Inventories are stated at the lower of cost (first-in, first-out
method) or market.

Property and Equipment

Property and equipment is recorded at cost.
Property and equipment is depreciated over the assets' estimated useful lives
using the straight-line method. Leasehold improvements are amortized using the
straight-line method over the estimated useful life of the asset or the term of
the related lease, whichever is shorter. The lives for furniture, fixtures, and
equipment are ten years. The lives for buildings and leasehold improvements are
the shorter of 20 years or the term of the related operating lease.

Liquor License

Transferable liquor licenses, included in other long-term
assets, which have a market value are carried at the lower of cost or market and
are not amortized.

Gift Certificates

The Company sells gift certificates and recognizes
deferred revenue, included in other accrued
liabilities, for gift certificates outstanding until the gift certificates are
redeemed.

Income Taxes

The Company utilizes the liability method of accounting for
income taxes as set forth in Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes". Under the liability method,
deferred taxes are determined based on the difference between the financial
statement and the tax basis of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse.
Recognition of deferred tax assets is limited to amounts considered by
management to be more likely than not of realization in future periods.

Restaurant and Franchise Revenues

Revenues from the operation of company-owned
restaurants are recognized when sales occur. All fees from franchised operations
are included in revenue as earned. Royalty fees are based on franchised
restaurants' revenues and are recorded by the Company in the period the related
franchised restaurants' revenues are earned.

Advertising Costs

The Company expenses advertising costs as incurred.
Advertising expenses totaled $2,670 in fiscal 2002, $2,433 in fiscal 2001 and
$2,226 in fiscal 2000.

Operating Leases

The Company accounts for operating leases on a straight-line
basis in accordance with SFAS No. 13, "Accounting for Operating
Leases". The Company leases restaurant and office facilities that have
terms expiring between 2003 and 2022. The restaurant facilities primarily have
renewal clauses of ten to 20 years exercisable at the option of the Company with
rent escalation clauses stipulating specific rent increases, some of which are
based on the consumer price index. Certain of these leases require the payment
of contingent rentals based on a percentage of gross revenues, as defined.

Pre-opening Costs

The Company follows Statement of Position (SOP) 98-5,
"Reporting on the Costs of Start-up Activities," which was issued by the
Accounting Standards Executive Committee and provides guidance on the financial
reporting of the start-up costs and organization costs. The SOP requires costs
of start-up activities and organization costs to be expensed as incurred.

Earnings Per Share

The Company calculates net income per share in
accordance with SFAS No. 128, "Earnings Per Share".  Basic Earnings Per
Share (EPS) is computed by dividing net income or loss attributable to common
shareholders by the weighted average of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue
common stock (convertible preferred stock, warrants to purchase common stock and
common stock options using the treasury stock method) were exercised or
converted into common stock. Potential common shares in the diluted EPS
computation are excluded where their effect would be antidilutive.

Fair Value of Financial Instruments

The fair values of the Company's cash and cash
equivalents, trade accounts receivable, accounts payable and all other current
liabilities approximate their carrying values because of the short maturities of
these instruments.

Concentrations of Credit Risk

Financial instruments that potentially subject the
Company to concentrations of credit risk consist primarily of cash and cash
equivalents. The Company places its cash and cash equivalents with high quality
financial institutions. At times, balances in the Company's cash accounts may
exceed the Federal Deposit Insurance Corporation (FDIC) limit.

The Company maintains a food distribution contract with its
sole national master distributor, Meadowbrook Meat Company, Inc. which
potentially subjects the Company to a concentration of business risk.  This
contract expires July 2, 2004.  Management of the Company believes it will be
able to negotiate a similarly priced contract with either its current sole
master distributor or another distributor.

Recent Accounting Pronouncements

The Financial Accounting Standards Board ("FASB")
recently issued several Statements of Financial Accounting Standards ("SFAS").
The statements relevant to our line of business and their impact on the Company
are as follows:

In June 2001, the FASB issued SFAS No. 141, "Business
Combinations", and No. 142, "Goodwill and Other Intangible
Assets", effective for fiscal years beginning after December 15, 2001.
Statement 141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001.  Under SFAS No. 142,
goodwill (and intangible assets deemed to have indefinite lives) will no longer
be amortized but will be subject to annual impairment tests.  Other intangible
assets will continue to be amortized over their useful lives.  As of December
29, 2002, the Company wrote off all intangible balances of goodwill, which
resulted in amortization expense of $174,000.

In August 2001, the FASB issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets,"
which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, "Accounting
for the Impairment or Disposal of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting provisions of Accounting
Principles Board (APB) Opinion No. 30, "Reporting the Results of
Operations" for a disposal of a segment of a business. SFAS No. 144 is
effective for fiscal years beginning after December 15, 2001, with earlier
application encouraged. The Company adopted SFAS No. 144 as of
December 31, 2001. In accordance with SFAS No. 144 the company recorded a
$2.4 million expense associated with impairment charges and anticipated closure
costs for one company-owned full service restaurant and one company-owned ASAP
restaurant.

In June 2002, the Financial Accounting Standards Board issued
SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." SFAS No. 146 supersedes Emerging Issues Task Force ("EITF") No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (Including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 requires a liability for costs associated with an
exit or disposal activity to be recognized when the liability is incurred. SFAS
No. 146 is effective for exit or disposal activities that are initiated after
December 31, 2002. The Company does not expect the
adoption of this statement to have an impact on its consolidated results of
operations or financial position.



3. Property and Equipment

Property and equipment consist of the following at
December 29, 2002 and December 30, 2001:

`2002        2001
                                                    ----------  ----------
   Land........................................... $    5,786  $    5,786
   Buildings......................................      9,506       9,231
   Furniture, fixtures and equipment..............     80,095      66,751
   Leasehold improvements.........................    116,274      97,354
   Construction-in-progress.......................      4,897       3,939
                                                    ----------  ----------
                                                      216,558     183,061
   Less accumulated depreciation and amortization.     90,202      73,531
                                                    ----------  ----------
                                                   $  126,356  $  109,530
                                                    ==========  ==========`

On an annual basis the Company reviews the carrying value of
long-lived assets in accordance with SFAS No. 144, "Accounting for Impairment
and Disposal of Long-Lived Assets," on a restaurant by restaurant basis. In
accordance with SFAS No. 144, the Company recognizes the impairment of certain
property and equipment by reducing the carrying value of the assets to the
estimated fair value based on discounted cash flows of each under-performing
restaurant. The Company increased accumulated depreciation and amortization and
recorded a loss on impairment of property and equipment in 2002 in the amount of
$2,380. There was no loss recorded in 2001.

4. Long-term Debt

On December 15, 2000, the Company replaced its prior
credit agreement with a $20.0 million revolving line of credit with Bank of
America, N.A., of which zero is outstanding as of December 29, 2002.  The credit
line bears interest at either the bank base rate minus 0.75% or LIBOR plus 1.0%
and expires on June 30, 2004.  The terms of the credit line include financial
covenants which the Company was in compliance with as of December 29, 2002.

The credit agreement provides for the issuance of letters of
credit, which reduce the availability under the revolving line. Letters of
credit outstanding in connection with various insurance programs totaled $1,570
and $1,470 at December 29, 2002 and December 30, 2001, respectively.

5. Income Taxes

The details of the provision for income taxes for
the years 2002, 2001 and 2000 are set forth below:

`2002        2001         2000
                                                 ----------  -----------  ----------
   Current:
     Federal................................... $   (2,747) $    (6,280) $   (4,775)
     State.....................................     (1,350)      (1,122)       (829)
                                                 ----------  -----------  ----------
                                                    (4,097)      (7,402)     (5,604)
                                                 ----------  -----------  ----------
   Deferred:
     Federal...................................     (3,612)         264         997
     State.....................................       (225)          24         103
                                                 ----------  -----------  ----------
                                                    (3,837)         288       1,100
                                                 ----------  -----------  ----------
                                                $   (7,934) $    (7,114) $   (4,504)
                                                 ==========  ===========  ==========`

The income tax provision differs from the federal statutory
rate because of the effect of the following items for the fiscal years 2002,
2001 and 2000:

`2002        2001         2000
                                                 ----------  -----------  ----------
   Statutory rate..............................      (35.0)%      (35.0)%     (35.0)%
   State income taxes, net of federal benefit..       (4.0)        (3.6)       (4.2)
   General business and tip tax credit.........        8.0          8.4         7.2
   Other.......................................       (3.1)        (4.8)       (3.0)
                                                 ----------  -----------  ----------
                                                     (34.1)%      (35.0)%     (35.0)%
                                                 ==========  ===========  ==========`

Deferred income taxes reflect the net tax effects of
temporary differences between the carrying value of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's net deferred tax asset at December 29,
2002 and December 30, 2001 consist of the following:

`2002         2001
                                                             -----------  ----------
   Deferred tax assets:
     Asset impairment reserves............................. $     4,055  $      710
     Insurance reserves....................................         352         241
     Vacation reserves.....................................         688         559
     Other accruals........................................         806       1,624
     Tax credits...........................................         381         315
     Accrued rent..........................................         359         376
     Book depreciation (under)/over tax depreciation.......      (4,793)      1,924
     Partnership basis.....................................         556         492

                                                             -----------  ----------
       Net deferred tax asset.............................. $     2,404  $    6,241
                                                             ===========  ==========`

6. Preferred Stock

Prior to the closing of the initial public offering
in August 2000, the Company had 10,151,771 shares of Series A 12 1/2% Cumulative
Compounding Preferred Stock issued and outstanding and 10,151,771 shares of
Series B 13 1/2% Cumulative Compounding Preferred Stock issued and outstanding.
The Series A Preferred Stock was entitled to receive cash dividends of $0.2387
per share per annum and all dividends were cumulative, whether or not declared,
and payable annually in arrears. Unpaid dividends accrued interest at 14.5%
annually. The Series B Preferred Stock was entitled to receive cash dividends of
$0.1983 per share per annum and all dividends were cumulative, whether or not
declared, and payable annually in arrears. Unpaid dividends accrued interest at
15.5% annually. The accretion on the Preferred Stock related to the unpaid
dividends can be seen in the consolidated statement of shareholders' equity as a
reduction of additional paid-in capital and an increase in the preferred stock
book value.

Upon closing of the Company's initial public offering in
August 2000, all shares of Series A 12 1/2% Cumulative Compounding Preferred
Stock and Series B 13 1/2% Cumulative Compounding Preferred Stock plus the
accrued but unpaid dividends were automatically converted into a right to
receive cash of $23,719 and 1,580,938 shares of common stock.  Upon conversion
of the preferred stock, all other rights previously assigned ceased.

7. Shareholders' Equity

The Company completed its initial public offering in
August 2000. The offering resulted in the issuance of 5,300,000 shares of common
stock at $15.00 per share, resulting in net proceeds to the Company of
approximately $72.0 million. Upon consummation of the offering, all shares of
Series A 12 1/2% cumulative compounding preferred stock and Series B 13 1/2%
cumulative compounding preferred stock were automatically converted into a right
to receive $23.7 million in cash and 1,580,938 shares of common stock.
Additionally, upon completion of the Company's
initial public offering, options to purchase 111,583 shares of common stock were
exercised.

On January 15, 2002 and July 17, 2002, employees purchased
67,537 and 61,066 shares of common stock from the Company under the Company's
employee stock purchase plan.  The net proceeds to the Company were $890 and
$812, respectively.

On January 15, 2001 and July 16, 2001, employees purchased
69,873 and 68,668 shares of common stock from the Company under the Company's
employee stock purchase plan.  The net proceeds to the Company were $891 and
$884, respectively.

On February 13, 2001, the Company completed a follow-on
offering for 4,400,000 shares of common stock, of which 200,000 shares were sold
by the Company and 4,200,000 shares were sold by selling shareholders.  The
shares were sold at a price of $25.94 per share, resulting in net proceeds to
the Company of approximately $4.3 million.

8. Common Stock Option Plans

In 1998, the Company adopted the 1998 Stock Based
Incentive Compensation Plan ("1998 Plan"). The 1998 Plan allows for the Company
to reward, retain and attract valued employees, directors and independent
contractors. In fiscal 2001, the Company increased the amount of shares reserved
under the 1998 Plan for future awards from 2,500,000 shares to 3,500,000 shares.
Options under the 1998 Plan may be either nonqualified options or incentive
stock options. Nonqualified options may be granted at prices determined by the
Company's Board of Directors. Incentive stock options may be granted at not less
than 100% of fair value on the date of grant for employees owning 10% or less of
the Company's stock and at not less than 110% for employees owning more than 10%
of the Company's stock. The terms governing the exercise of options and direct
stock bonuses are determined by the Company's Board of Directors.

Shares subject to option under the Plans were as follows:

`Weighted
                                                                  Average
                                                                  Exercise
                                                      Shares       Price
                                                    -----------  ----------
   Outstanding at January 2, 2000..................    673,157  $     4.78
   Granted.........................................    503,500       14.83
   Exercised.......................................   (111,583)       0.45
   Canceled........................................    (18,452)       6.46
                                                    -----------
   Outstanding at December 31, 2000................  1,046,622       10.05
   Granted.........................................    606,000       21.46
   Exercised.......................................   (206,871)       6.37
   Canceled........................................   (200,262)      14.86
                                                    -----------
   Outstanding at December 30, 2001................  1,245,489       15.43
   Granted.........................................    583,000       20.64
   Exercised.......................................   (189,493)      10.68
   Canceled........................................    (22,231)      19.68
                                                    -----------
   Outstanding at December 29, 2002................  1,616,765  $    17.81
                                                    ===========`

The following table summarizes information regarding options
outstanding and options exercisable at December 29, 2002:

`Weighted                 Number
                                 Average    Weighted  Exercisable   Weighted
                      Number    Remaining    Average     as of       Average
     Range of           of     Contractual  Exercise  December 29,  Exercise
  Exercise Prices     Shares      Life        Price       2002        Price
------------------- ---------- -----------  --------- ------------  ---------
$2.50..............    61,246        5.64  $    2.50       61,246  $    2.50
 6.54 -- 9.26......   145,458        6.79       8.55       86,641       8.61
 15.00.............   368,436        5.15      15.00      252,208      15.00
 19.65 -- 19.96....   558,975        9.01      19.89       66,352      19.87
 22.00 -- 23.51....   482,650        8.43      22.28      124,150      22.04
                    ----------                        ------------
                    1,616,765        7.63  $   17.81      590,597  $   14.79
                    ==========                        ============`

Options available for future grant totaled 657,278 and
1,218,403 shares at December 29, 2002 and December 30, 2001, respectively.

On August 2, 2000 in connection with the Company's initial
public offering, options to purchase 110,696 shares of common stock were
exercised.  These options required the Company to reimburse 20% of the taxable
gain incurred upon exercise to the employee.  As a result, the Company incurred
a variable plan accounting charge of $1,949 in accordance with APB No. 25,
"Accounting for Stock Issued to Employees", representing the difference between
the fair value of the stock at the time of exercise and the option strike price
plus the 20% tax reimbursement.

We have adopted the "disclosure only" provisions of SFAS No.
123 and will continue to use the intrinsic value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees." Accordingly, no compensation expense as been recognized
for our stock option plans. Had compensation expense for our stock option plans
been determined based on the fair value at the grant date for awards in fiscal
2002, 2001 and 2000 consistent with the provisions of SFAS No. 123, our after-tax net
income and after-tax net income per share would have been reduced to the
pro forma amounts indicated below (in thousands, except net income per
share):

`2002       2001      2000
                                                 ---------  --------  --------
Net income as reported......................... $  15,330  $ 13,211  $  4,853
Deduct:
  Total stock-based employee compensation
   expense determined under fair value methods
   for all awards, net of related tax effects..     2,166     1,245       335
                                                 ---------  --------  --------
Pro forma net income........................... $  13,164  $ 11,966  $  4,518
                                                 =========  ========  ========
Net income per share:
  Basic, as reported........................... $    0.82  $   0.72  $   0.35

  Basic, pro forma............................. $    0.71  $   0.65  $   0.33

  Diluted, as reported......................... $    0.81  $   0.71  $   0.35

  Diluted, pro forma........................... $    0.70  $   0.64  $   0.32

Weighted average shares used in computation:
  Basic........................................    18,585    18,308    13,703
  Diluted......................................    18,871    18,611    14,013`

The fair value of these options was estimated at the date of grant using a
Black-Scholes option-pricing model with the following assumptions for the fiscal
years ended 2002, 2001 and 2000.

`2002       2001      2000
                                                 ---------  --------  --------

   Risk free interest rate.....................      2.53 %    5.00 %    5.20 %
   Expected lives (in years)...................      5.00      5.00      5.00
   Dividend yield..............................        -- %      -- %      -- %
   Expected volatility.........................      0.42 %    0.35 %    0.35 %`

The impact of applying SFAS No. 123, as amended by SFAS No.
148, in this pro forma disclosure is not necessarily indicative of the effect on
income in the future. SFAS No. 123, as amended by SFAS No. 148, does not apply
to awards granted prior to 1995. The Company anticipates making additional
stock-based compensation awards in the future.

9. Net Income Per Common Share

Reconciliation of basic and diluted net income per
common share in accordance with SFAS No. 128 for the fiscal years ended December
29, 2002, December 30, 2001 and December 31, 2000  is as follows:

`2002       2001      2000
                                                 ---------  --------  --------
Numerator for basic and diluted net income
 per share attributable to common
 shareholders..................................    15,330    13,211     4,853
                                                 =========  ========  ========
Denominator (in thousands):
  Denominator for basic net income per
   common share--weighted average shares.......    18,585    18,308    13,703
  Employee stock options.......................       286       303       310
                                                 ---------  --------  --------
  Denominator for diluted net income per
   common share--weighted average shares.......    18,871    18,611    14,013
                                                 =========  ========  ========`

There were no shares considered antidilutive for the purposes
of this computation.

10. Commitments and Contingencies

Commitments

The Company leases certain restaurant facilities and its
corporate headquarters under noncancelable operating leases with terms ranging
from five to 20 years. The restaurant leases generally require payment of
contingent rents based on a percentage of sales and require payment of various
expenses incidental to the use of property. Rent expense on all operating
leases approximated $18,257 for fiscal 2002, $14,888 for fiscal 2001 and $12,234
for fiscal 2000,  including contingent rental expense of $1,348, $1,255 and $924
for the fiscal years 2002, 2001 and 2000, respectively. Most leases contain
renewal options and may be subject to periodic adjustments for inflation and
scheduled escalations.

The aggregate future minimum annual lease payments under
noncancelable operating leases for the fiscal years succeeding December 29, 2002
are as follows:

`Fiscal year ending:
     2003...................................... $  17,721
     2004......................................    17,845
     2005......................................    17,913
     2006......................................    17,659
     2007......................................    17,236
     Thereafter................................    70,081
                                                 ---------
                                                $ 158,455
                                                 =========`

Contingencies

Occasionally, the Company is a defendant in litigation arising in the
ordinary course of our business, including claims resulting from 'slip and fall' accidents,
employment-related claims and claims from guests or employees alleging illness, injury or other
food quality, health or operational concerns. To date, none of these types of litigation, all
of which are covered by insurance, has had a material effect on the Company and, as of the date
of this report, the Company is not a party to any material litigation.

11. Employee Benefit Plans

In January 1994, the Company established a defined
contribution plan for certain qualified employees as defined. Participants may
contribute from 1% to 15% of pretax compensation, subject to certain limitation.
The plan provides for certain discretionary contributions by the Company.

The Company has also established an Executive Retirement
Savings Plan (the "ERSP"). The ERSP is a nonqualified deferred compensation plan
for our highly compensated employees as defined in the ERSP and who are
otherwise ineligible for participation in our 401(k) plans. The ERSP allows
participating employees to defer up to 100% of the receipt of their base
compensation and their eligible bonuses. The plan provides for certain
discretionary contributions by the Company. Employee deferrals and Company
discretionary matches are deposited into a "rabbi" trust established by the
Company.

The Company recorded contribution expenses of $282, $131 and
$216 for fiscal 2002, 2001 and 2000, respectively for both the defined
contribution plan and ERSP.  The contributions are made subsequent to each
fiscal year end.

In November 1999, the Company adopted an employee stock
purchase plan (Purchase Plan) under Section 423 of the Internal Revenue Code of
1986 which became effective with the initial public offering in August 2000 and
reserved 375,000 shares for issuance thereunder.  The Purchase Plan allows
eligible employees to purchase common stock at a discount, but only through
payroll deductions, during concurrent 24 month offering periods.  Each offering
period will be divided into four consecutive six-month purchase periods.  The
price at which the stock is purchased under the Purchase Plan is equal to 85% of
the lower of the fair market value of the common stock on the first day of the
offering period and the fair market value of the common stock on the last day of
the purchase period.

On January 15, 2002 and July 17, 2002, employees purchased
67,537 and 61,066 shares of common stock from the Company under the Company's
employee stock purchase plan.  The net proceeds to the Company were $890 and
$812, respectively.

12. Related Party Transactions

In connection with the Company's initial public
offering, the Company's Chief Executive Officer exercised options to purchase
110,696 shares of common stock.  Under the agreement granting these options, the
Company was required to pay an amount equal to 20% of the gain recognized by the
Chief Executive Officer for federal income tax purposes, which was $325.  In
addition, the Company loaned its Chief Executive Officer $586, which is equal to
the difference between the cash payment and the total income tax liability he
incurred as a result of this exercise.  The full recourse promissory note was
paid in full, including accrued interest upon maturation in August 2002.

On August 24, 2001, the Company loaned one of its officers
$65. The loan is supported by a full recourse promissory note, which bears
interest at 7.5% per annum. As of December 29, 2002, the amount outstanding on
this loan totaled $32 and was included in other assets.

13. Quarterly Financial Data (Unaudited)

Summarized unaudited quarterly financial data (in
thousands, except net income per share).

`Quarter Ended:                              Mar 31, 2002  June 30, 2002  Sept 29, 2002  Dec 29, 2002
                                            ------------  -------------  -------------  -------------

   Total revenues......................... $     70,216  $      75,626  $      78,944  $      81,536
   Operating income....................... $      5,666  $       6,595  $       4,445  $       6,190
   Net income............................. $      3,736  $       4,344  $       3,005  $       4,245
   Diluted net income per share........... $       0.20  $        0.23  $        0.16  $        0.22


Quarter Ended:                              Apr 1, 2001   July 1, 2001   Sept 30, 2001  Dec 30, 2001
                                            ------------  -------------  -------------  -------------

   Total revenues......................... $     57,027  $      60,329  $      64,271  $      67,635
   Operating income....................... $      4,873  $       4,946  $       5,056  $       4,843
   Net income............................. $      3,308  $       3,325  $       3,368  $       3,210
   Diluted net income per share........... $       0.18  $        0.18  $        0.18  $        0.17`

14. Subsequent Events (Unaudited)

On March 6, 2003, the Company invested $2.0 million for a
25.0% stake in LA Food Show, Inc., an upscale family casual dining concept. The
concept was created by the Company's co-founders, Larry S. Flax and Richard L.
Rosenfield, who currently serve on the Company's board as Co-Chairmen. Larry S.
Flax and Richard L. Rosenfield own the remaining 75% of equity in LA Food Show,
Inc. Under the terms of the agreement the Company reserves the right of first
negotiation for the 75.0% of outstanding equity it does not currently own. The
Company has not made any commitments or guarantees on behalf of LA Food Show,
Inc., and does not expect to do so.

On February 10, 2003, one of our former servers filed a class
action complaint against us in Orange County Superior Court in California.  The
plaintiff alleges that we failed to give our food servers, bussers, runners and
bartenders rest and meal breaks as required by California law.  Under the
California Labor Code, an employer must pay each employee one additional hour of
pay at the employee's regular rate of compensation for each work day that the
required meal or rest period is not provided. The plaintiff also alleges that
additional penalties are owed as a consequence of our resulting failure to pay
all wages due at the time of termination of employment and under theories
characterizing these alleged breaches as unfair business practices.  If the
plaintiff is able to achieve class certification and prevails on the merits of
the case, we could potentially be liable for significant amounts. We are still
investigating the claims and have not yet responded to the complaint.  No
discovery has taken place and no date has been set for a hearing on class
certification or for trial. We believe that all of our employees were provided
with the opportunity to take all required meal and rest breaks, and as such we
intend to vigorously defend our position.

On January 15, 2003, employees purchased 29,576 shares of
common stock from the Company under the Company's employee stock purchase plan.
The net proceeds to the Company were
approximately $578.

---

EXHIBIT INDEX



|Exhibit Number | Description                                                                                                                                                                                                                          
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1(B)         | Amended and Restated Articles of Incorporation, and
amendments thereto                                                                                                                                                               
|3.2(A)         | Amended and Restated Bylaws                                                                                                                                                                                                          
|4.1(A)         | Specimen Common Stock Certificate                                                                                                                                                                                                    
|4.2(A)         | Registration Rights Agreement dated September 30, 1997                                                                                                                                                                               
|10.1(A)        | Memorandum of Understanding Regarding Form of Agreement
between Host Marriott Services and California Pizza Kitchen, Inc. dated May 12,
1998                                                                                         
|10.2(A)        | Third Amended and Restated Employment Agreement of Richard L.
Rosenfield dated July 6, 2000                                                                                                                                          
|10.3(A)        | Third Amended and Restated Employment Agreement of Larry S.
Flax dated July 6, 2000                                                                                                                                                  
|10.4(A)        | Severance Agreement between Frederick R. Hipp and California
Pizza Kitchen, Inc. dated March 31, 1998                                                                                                                                
|10.5(A)        | Severance Agreement between Tom N. Jenneman and California
Pizza Kitchen, Inc. dated November [sic], 1999                                                                                                                            
|10.6(A)        | California Pizza Kitchen, Inc. Employee Stock Purchase Plan
adopted on November 2, 1999, as amended on June 23, 2000                                                                                                                 
|10.7(A)        | California Pizza Kitchen, Inc. 1998 Stock-Based Incentive
Compensation Plan adopted February 5, 1998, as amended on July 21, 1998 and
November 2, 1999 and forms of stock option agreement thereunder                                
|10.8(A)        | California Pizza Kitchen, Inc. Non-Qualified Stock Option
Agreements between California Pizza Kitchen, Inc. and Frederick R. Hipp dated
March 31, 1998                                                                               
|10.9(B)        | Credit Agreement by and between California Pizza Kitchen,
Inc. and Bank of America, N.A., dated December 15, 2000                                                                                                                    
|10.10(B)       | Master Subsidiary Guaranty issued from Bank of America, N.A.
by CPK Management Company and California Pizza Kitchen of Illinois, Inc. dated
December 15, 2000                                                                        
|10.11(C)       | Third and Fourth Amendments to California Pizza Kitchen, Inc.
1998 Stock-Based Incentive Compensation Plan dated as of July 28, 2000 and May
1, 2001                                                                                 
|10.12          | Shareholders' Agreement among LA Food Show, Inc., Richard L.
Rosenfield and Larry S. Flax , as trustee of the Larry S. Flax Revocable Trust
dated June 18, 2002 and California Pizza Kitchen, Inc., dated March 6, 2003              
|10.13          | Subscription Agreement among Richard L. Rosenfield, Larry S.
Flax, as trustee of the Larry S. Flax Revocable Trust dated June 18, 2002 and
California Pizza Kitchen, Inc., dated March 6, 2003                                       
|10.14          | Certificate Of Determination of the Series A 8% Convertible
Preferred Stock of LA Food Show, Inc. filed with the California Secretary of
State on March 4, 2003                                                                      
|10.15          | Amendment No. 1 to Shareholders' Agreement among LA Food
Show, Inc., Richard L. Rosenfield, Larry S. Flax as trustee of the Larry S. Flax
Revoable Trust dated June 18, 2002 and California Pizza Kitchen, Inc., dated
March 11, 2003
|23.1           | Consent of Ernst & Young LLP                                                                                                                                                                                                         
|99.1           | Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Frederick R.
Hipp                                                                                         
|99.2           | Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Gregory S. Levin                                                                                          

1. Incorporated by reference to the Registrant's
Registration Statement on Form S-1 (Registration 333-37778).
2. Incorporated by reference to the Registrant's
Registration Statement on Form S-1 (Registration 333-53088).
3. Incorporated by reference from the Registrant's Form 10-Q
for the quarterly period ended April 1, 2001.