Prepared by MERRILL CORPORATION









Exhibit 10.46




 




FRESH CHOICE, INC.




2001

EMPLOYEE STOCK PURCHASE PLAN




1.             ESTABLISHMENT, PURPOSE AND TERM OF PLAN.




1.1           Establishment.  The Fresh Choice, Inc. 2001 Employee Stock

Purchase Plan (the “Plan”) is hereby established

effective as of December 3, 2001 (the “Effective Date”), subject to the

approval by Company stockholders.




1.2           Purpose.  The purpose of the Plan is to advance the

interests of the Company and its stockholders by providing an incentive to

attract, retain and reward Eligible Employees of the Participating Company

Group and by motivating such persons to contribute to the growth and

profitability of the Participating Company Group.  The Plan provides such Eligible Employees with an opportunity to

acquire a proprietary interest in the Company through the purchase of

Stock.  The Company intends that the

Plan qualify as an “employee stock purchase plan” under Section 423 of the

Code (including any amendments or replacements of such section), and the Plan

shall be so construed.




1.3           Term of Plan.  The Plan shall continue in effect until the

earlier of its termination by the Board or the date on which all of the shares

of Stock available for issuance under the Plan have been issued.




2.             DEFINITIONS AND CONSTRUCTION.




2.1           Definitions.  Any term not expressly defined in the Plan

but defined for purposes of Section 423 of the Code shall have the same

definition herein.  Whenever used

herein, the following terms shall have their respective meanings set forth below:




(a)           “Board” means the Board of

Directors of the Company.  If one or

more Committees have been appointed by the Board to administer the Plan,

“Board” also means such Committee(s).




(b)           “Code” means the Internal Revenue

Code of 1986, as amended, and any applicable regulations promulgated

thereunder.




(c)           “Committee” means a committee of

the Board duly appointed to administer the Plan and having such powers as

specified by the Board.  Unless the

powers of the Committee have been specifically limited, the Committee shall

have all of the powers of the Board granted herein, including, without

limitation, the power to amend or terminate the Plan at any time, subject to

the terms of the Plan and any applicable limitations imposed by law.




(d)           “Company” means Fresh Choice,

Inc., a Delaware corporation, or any successor corporation thereto.





(e)           “Compensation” means, with

respect to any Offering Period, base salary and commissions, including any base

salary or commissions deferred under any program or plan established by a

Participating Company, including, without limitation, any plan described in

Section 401(k) or Section 125 of the Code. 

Compensation shall be limited to amounts actually payable in cash

directly to the Participant or deferred by the Participant during the Offering

Period.  Compensation shall not include

overtime, bonuses, annual awards, profit sharing, other incentive payments,

shift premiums, long-term disability, workers’ compensation, moving allowances,

payments pursuant to a severance agreement, termination pay, relocation

payments, sign-on bonuses, expense reimbursements, the cost of employee

benefits paid by a Participating Company, tuition reimbursements, imputed

income arising under any benefit program, contributions made by a Participating

Company under any employee benefit plan, income directly or indirectly received

pursuant to the Plan or any other stock purchase or stock option plan, or any

other compensation not included in base salary and commissions.




(f)            “Eligible

Employee” means an Employee who meets the requirements

set forth in Section 5 for eligibility to participate in the Plan.




(g)           “Employee” means a person treated

as an employee of a Participating Company for purposes of Section 423 of the

Code.  A Participant shall be deemed to

have ceased to be an Employee either upon an actual termination of employment

or upon the corporation employing the Participant ceasing to be a Participating

Company.  For purposes of the Plan, an

individual shall not be deemed to have ceased to be an Employee while on any

military leave, sick leave, or other bona fide leave of absence approved by the

Company of ninety (90) days or less.  If

an individual’s leave of absence exceeds ninety (90) days, the individual shall

be deemed to have ceased to be an Employee on the ninety-first (91st) day of

such leave unless the individual’s right to reemployment with the Participating

Company Group is guaranteed either by statute or by contract.




(h)           “Fair Market

Value” means, as of any date:




(i)            If

the Stock is then listed on a national or regional securities exchange or

market system or is regularly quoted by a recognized securities dealer, the

closing sale price of a share of Stock (or the mean of the closing bid and

asked prices if the Stock is so quoted instead) as quoted on the Nasdaq

National Market, the Nasdaq SmallCap Market or such other national or regional

securities exchange or market system constituting the primary market for the

Stock, or by such recognized securities dealer, as reported in The Wall

Street Journal or such other source as the Company deems reliable.  If the relevant date does not fall on a day

on which the Stock has traded on such securities exchange or market system or

has been quoted by such securities dealer, the date on which the Fair Market

Value is established shall be the last day on which the Stock was so traded or

quoted prior to the relevant date, or such other appropriate day as determined

by the Board, in its discretion.




(ii)           If,

on the relevant date, the Stock is not then listed on a national or regional

securities exchange or market system or regularly quoted by a recognized

securities dealer, the Fair Market Value of a share of Stock shall be as

determined in good faith by the Board.





(i)            “Offering”

means an offering of Stock as provided in Section 6.1.




(j)            “Offering

Date” means, for any Offering, the first day of the

Offering Period.




(k)           “Offering Period” means a period

established in accordance with Section 6.




(l)            “Parent

Corporation” means any present or future “parent

corporation” of the Company, as defined in Section 424(e) of the Code.




(m)          “Participant” means an Eligible

Employee who has become a participant in an Offering Period in accordance with

Section 7 and remains a participant in accordance with the Plan.




(n)           “Participating Company” means the

Company or any Parent Corporation or Subsidiary Corporation designated by the

Board as a corporation the Employees of which may, if Eligible Employees,

participate in the Plan.  The Board

shall have the sole and absolute discretion to determine from time to time

which Parent Corporations or Subsidiary Corporations shall be Participating

Companies.




(o)           “Participating Company Group”

means, at any point in time, the Company and all other corporations

collectively which are then Participating Companies.




(p)           “Purchase Date” means, for any

Purchase Period, the last day of such period.




(q)           “Purchase Period” means a period

established in accordance with Section 6.2.




(r)            “Purchase

Price” means the price at which a share of Stock may be

purchased under the Plan, as determined in accordance with Section 9.




(s)           “Purchase Right” means an option

granted to a Participant pursuant to the Plan to purchase such shares of Stock

as provided in Section 8, which the Participant may or may not exercise

during the Offering Period in which such option is outstanding.  Such option arises from the right of a

Participant to withdraw any accumulated payroll deductions of the Participant

not previously applied to the purchase of Stock under the Plan and to terminate

participation in the Plan at any time during an Offering Period.




(t)            “Stock”

means the common stock of the Company, as adjusted from time to time in

accordance with Section 4.2.




(u)           “Subscription Agreement” means a

written agreement in such form as specified by the Company, stating an

Employee’s election to participate in the Plan and authorizing payroll

deductions under the Plan from the Employee’s Compensation.





(v)           “Subscription Date” means the

last business day prior to the Offering Date of an Offering Period or such

earlier date as the Company shall establish.




(w)          “Subsidiary Corporation” means

any present or future “subsidiary corporation” of the Company, as defined in

Section 424(f) of the Code.




2.2           Construction.  Captions and titles contained herein are for

convenience only and shall not affect the meaning or interpretation of any

provision of the Plan.  Except when

otherwise indicated by the context, the singular shall include the plural and

the plural shall include the singular. 

Use of the term “or” is not intended to be exclusive, unless the context

clearly requires otherwise.




3.             ADMINISTRATION.




3.1           Administration by the Board.  The Plan shall be administered by the

Board.  All questions of interpretation

of the Plan, of any form of agreement or other document employed by the Company

in the administration of the Plan, or of any Purchase Right shall be determined

by the Board, and such determinations shall be final, binding and conclusive

upon all persons having an interest in the Plan or the Purchase Right, unless

fraudulent or made in bad faith. 

Subject to the provisions of the Plan, the Board shall determine all of

the relevant terms and conditions of Purchase Rights; provided, however, that

all Participants granted Purchase Rights pursuant to an Offering shall have the

same rights and privileges within the meaning of Section 423(b)(5) of the

Code.  Any and all actions, decisions

and determinations taken or made by the Board in the exercise of its discretion

pursuant to the Plan or any agreement thereunder (other than determining

questions of interpretation pursuant to the second sentence of this

Section 3.1) shall be final, binding and conclusive upon all persons

having an interest therein.  All

expenses incurred in connection with the administration of the Plan shall be

paid by the Company.




3.2           Authority of Officers.  Any officer of the Company shall have the

authority to act on behalf of the Company with respect to any matter, right,

obligation, determination or election that is the responsibility of or that is

allocated to the Company herein, provided that the officer has apparent

authority with respect to such matter, right, obligation, determination or

election.




3.3           Policies and Procedures Established by

the Company.  The Company

may, from time to time, consistent with the Plan and the requirements of

Section 423 of the Code, establish, change or terminate such rules, guidelines,

policies, procedures, limitations, or adjustments as deemed advisable by the

Company, in its discretion, for the proper administration of the Plan,

including, without limitation, (a) a minimum payroll deduction amount

required for participation in an Offering, (b) a limitation on the

frequency or number of changes permitted in the rate of payroll deduction

during an Offering, (c) an exchange ratio applicable to amounts withheld

in a currency other than United States dollars, (d) a payroll deduction

greater than or less than the amount designated by a Participant in order to

adjust for the Company’s delay or mistake in processing a Subscription

Agreement or in otherwise effecting a Participant’s election under the Plan or

as advisable to comply with the requirements of Section 423 of the Code, and

(e) determination of the date and manner by which the Fair Market Value of

a share of Stock is determined for purposes of administration of the Plan.  All such actions by the Company shall be

taken consistent with the requirement under Section 423(b)(5) of the Code

that all Participants granted Purchase Rights pursuant to an Offering shall

have the same rights and privileges within the meaning of such section.





3.4           Indemnification.  In addition to such other rights of

indemnification as they may have as members of the Board or officers or

employees of the Participating Company Group, members of the Board and any

officers or employees of the Participating Company Group to whom authority to

act for the Board or the Company is delegated shall be indemnified by the

Company against all reasonable expenses, including attorneys’ fees, actually

and necessarily incurred in connection with the defense of any action, suit or

proceeding, or in connection with any appeal therein, to which they or any of

them may be a party by reason of any action taken or failure to act under or in

connection with the Plan, or any right granted hereunder, and against all

amounts paid by them in settlement thereof (provided such settlement is

approved by independent legal counsel selected by the Company) or paid by them

in satisfaction of a judgment in any such action, suit or proceeding, except in

relation to matters as to which it shall be adjudged in such action, suit or

proceeding that such person is liable for gross negligence, bad faith or

intentional misconduct in duties; provided, however, that within sixty (60)

days after the institution of such action, suit or proceeding, such person

shall offer to the Company, in writing, the opportunity at its own expense to

handle and defend the same.




4.             SHARES SUBJECT TO PLAN.




4.1           Maximum Number of Shares Issuable.  Subject to adjustment as provided in Section

4.2, the maximum aggregate number of shares of Stock that may be issued under

the Plan shall be two hundred ninety thousand (290,000), and shall consist of

authorized but unissued or reacquired shares of Stock, or any combination

thereof.  If an outstanding Purchase

Right for any reason expires or is terminated or canceled, the shares of Stock

allocable to the unexercised portion of that Purchase Right shall again be

available for issuance under the Plan.




4.2           Adjustments for Changes in Capital

Structure.  In the event of

any stock dividend, stock split, reverse stock split, recapitalization,

combination, reclassification or similar change in the capital structure of the

Company, or in the event of any merger (including a merger effected for the

purpose of changing the Company’s domicile), sale of assets or other

reorganization in which the Company is a party, appropriate adjustments shall

be made in the number and class of shares subject to the Plan and each Purchase

Right, and in the Purchase Price.  If a

majority of the shares of the same class as the shares subject to outstanding

Purchase Rights are exchanged for, converted into, or otherwise become (whether

or not pursuant to an Ownership Change Event) shares of another corporation

(the “New Shares”),

the Board may unilaterally amend the outstanding Purchase Rights to provide

that such Purchase Rights are exercisable for New Shares.  In the event of any such amendment, the

number of shares subject to, and the Purchase Price of, the outstanding

Purchase Rights shall be adjusted in a fair and equitable manner, as determined

by the Board, in its discretion. 

Notwithstanding the foregoing, any fractional share resulting from an

adjustment pursuant to this Section 4.2 shall be rounded down to the nearest

whole number, and in no event may the Purchase Price be decreased to an amount

less than the par value, if any, of the stock subject to the Purchase

Right.  The adjustments determined by

the Board pursuant to this Section 4.2 shall be final, binding and conclusive.





5.             ELIGIBILITY.




5.1           Employees Eligible to Participate.  Each Employee of a Participating

Company who has been employed by a Participating Company for at least six (6)

consecutive months is eligible to participate in the Plan and shall be deemed

an Eligible Employee.




5.2           Exclusion of Certain Stockholders.  Notwithstanding any provision of the Plan to

the contrary, no Employee shall be treated as an Eligible Employee and granted

a Purchase Right under the Plan if, immediately after such grant, the Employee

would own or hold options to purchase stock of the Company or of any Parent

Corporation or Subsidiary Corporation possessing five percent (5%) or more of

the total combined voting power or value of all classes of stock of such

corporation, as determined in accordance with Section 423(b)(3) of the

Code.  For purposes of this Section 5.2,

the attribution rules of Section 424(d) of the Code shall apply in determining

the stock ownership of such Employee.




5.3           Determination by Company.  The Company shall determine in good faith

and in the exercise of its discretion whether an individual has become or has

ceased to be an Employee or an Eligible Employee and the effective date of such

individual’s attainment or termination of such status, as the case may be.  For purposes of an individual’s

participation in or other rights, if any, under the Plan as of the time of the

Company’s determination, all such determinations by the Company shall be final,

binding and conclusive, notwithstanding that the Company or any court of law or

governmental agency subsequently makes a contrary determination.




6.             OFFERINGS.




6.1           Offering Periods.  The Plan shall be implemented on and after

the Effective Date by sequential and overlapping Offerings of approximately

twelve (12) months duration or such other duration as the Board shall determine

(an “Offering

Period”); provided, however, that the first Offering

Period shall commence on the Effective Date and end on or about

November 29, 2002.  Subsequent

Offering Periods shall commence on or about June 1 and December 1 of

each year and end on or about the last days of the next May and November,

respectively, occurring thereafter. 

Notwithstanding the foregoing, the Board may establish a different duration

for one or more Offering Periods or different commencing or ending dates for

such Offering Periods; provided, however, that no Offering Period may have a

duration exceeding twenty-seven (27) months. 

If the first or last day of an Offering Period is not a day on which the

national securities exchanges or Nasdaq Stock Market are open for trading, the

Company shall specify the trading day that will be deemed the first or last

day, as the case may be, of the Offering Period.




6.2           Purchase Periods.  Each Offering Period shall consist of two

(2) consecutive purchase periods of approximately six (6) months duration, or

such other number or duration as the Board shall determine (individually, a “Purchase

Period”).  A

Purchase Period commencing on or about December 1 shall end on or about

the next May 31.  A Purchase Period

commencing on or about June 1 shall end on or about the next

November 30.  Notwithstanding the

foregoing, the Board may establish a different duration for one or more

Purchase Periods or different commencing or ending dates for such Purchase Periods.  If the first or last day of a Purchase

Period is not a day on which the national securities exchanges or Nasdaq Stock

Market are open for trading, the Company shall specify the trading day that

will be deemed the first or last day, as the case may be, of the Purchase

Period.





7.             PARTICIPATION IN THE PLAN.




7.1           Initial Participation.  An Eligible Employee may become a

Participant in an Offering Period by delivering a properly completed

Subscription Agreement to the office designated by the Company not later than

the close of business for such office on the Subscription Date established by

the Company for that Offering Period. 

An Eligible Employee who does not deliver a properly completed

Subscription Agreement to the Company’s designated office on or before the

Subscription Date for an Offering Period shall not participate in the Plan for

that Offering Period or for any subsequent Offering Period unless the Eligible

Employee subsequently delivers a properly completed Subscription Agreement to

the appropriate office of the Company on or before the Subscription Date for

such subsequent Offering Period.  An

Employee who becomes an Eligible Employee after the Offering Date of an

Offering Period shall not be eligible to participate in that Offering Period but

may participate in any subsequent Offering Period provided the Employee is

still an Eligible Employee as of the Offering Date of such subsequent Offering

Period.




7.2           Continued Participation.  A Participant shall automatically

participate in the next Offering Period commencing immediately after the final

Purchase Date of each Offering Period in which the Participant participates

provided that the Participant remains an Eligible Employee on the Offering Date

of the new Offering Period and has not either (a) withdrawn from the Plan

pursuant to Section 12.1 or (b) terminated employment as provided in

Section 13.  A Participant who may

automatically participate in a subsequent Offering Period, as provided in this

Section, is not required to deliver any additional Subscription Agreement for

the subsequent Offering Period in order to continue participation in the

Plan.  However, a Participant may

deliver a new Subscription Agreement for a subsequent Offering Period in accordance

with the procedures set forth in Section 7.1 if the Participant desires to

change any of the elections contained in the Participant’s then effective

Subscription Agreement.




8.             RIGHT TO PURCHASE SHARES.




8.1           Grant of Purchase Right.  Except as set forth below, on the Offering

Date of each Offering Period, each Participant in that Offering Period shall be

granted automatically a Purchase Right consisting of an option to purchase the

lesser of (a) that number of whole shares of Stock determined by dividing

Twenty-Five Thousand Dollars ($25,000) by the Fair Market Value of a share of

Stock on such Offering Date or (b) seven thousand five hundred (7,500)

shares of Stock.  No Purchase Right

shall be granted on an Offering Date to any person who is not, on such Offering

Date, an Eligible Employee.




8.2           Pro Rata Adjustment of Purchase Right.  Notwithstanding the provisions of Section

8.1, if the Board establishes an Offering Period of any duration other than

twelve months, then (a) the dollar amount in Section 8.1 shall be determined by

multiplying $2,083.33 by the number of months (rounded to the nearest whole

month) in the Offering Period and rounding to the nearest whole dollar, and (b)

the share amount in Section 8.1 shall be determined by multiplying 625 shares

by the number of months (rounded to the nearest whole month) in the Offering

Period and rounding to the nearest whole share.







8.3           Calendar Year Purchase Limitation.  Notwithstanding any provision of the Plan to

the contrary, no Participant shall be granted a Purchase Right which permits

his or her right to purchase shares of Stock under the Plan to accrue at a rate

which, when aggregated with such Participant’s rights to purchase shares under

all other employee stock purchase plans of a Participating Company intended to

meet the requirements of Section 423 of the Code, exceeds Twenty-Five Thousand

Dollars ($25,000) in Fair Market Value (or such other limit, if any, as may be

imposed by the Code) for each calendar year in which such Purchase Right is

outstanding at any time.  For purposes

of the preceding sentence, the Fair Market Value of shares purchased during a

given Offering Period shall be determined as of the Offering Date for such

Offering Period.  The limitation

described in this Section shall be applied in conformance with applicable regulations

under Section 423(b)(8) of the Code.




9.             PURCHASE PRICE.




The Purchase Price at which each share of Stock may be

acquired in an Offering Period upon the exercise of all or any portion of a

Purchase Right shall be established by the Board; provided, however, that the

Purchase Price on each Purchase Date shall not be less than eighty–five

percent (85%) of the lesser of (a) the Fair Market Value of a share of

Stock on the Offering Date of the Offering Period or (b) the Fair Market

Value of a share of Stock on the Purchase Date.  Unless otherwise provided by the Board prior to the commencement

of an Offering Period, the Purchase Price on each Purchase Date during that

Offering Period shall be eighty–five percent (85%) of the lesser of

(a) the Fair Market Value of a share of Stock on the Offering Date of the

Offering Period, or (b) the Fair Market Value of a share of Stock on the

Purchase Date.




10.           ACCUMULATION OF PURCHASE PRICE THROUGH PAYROLL

DEDUCTION.




Shares of Stock acquired pursuant to the exercise of

all or any portion of a Purchase Right may be paid for only by means of payroll

deductions from the Participant’s Compensation accumulated during the Offering

Period for which such Purchase Right was granted, subject to the following:




10.1         Amount of Payroll Deductions.  Except as otherwise provided herein, the

amount to be deducted under the Plan from a Participant’s Compensation on each

payday during an Offering Period shall be determined by the Participant’s

Subscription Agreement.  The

Subscription Agreement shall set forth the percentage of the Participant’s

Compensation to be deducted on each payday during an Offering Period in whole

percentages of not less than one percent (1%) (except as a result of an

election pursuant to Section 10.3 to stop payroll deductions effective

following the first payday during an Offering) or more than ten percent

(10%).  The Board may change the

foregoing limits on payroll deductions effective as of any Offering Date.





10.2         Commencement of Payroll Deductions.  Payroll deductions shall commence on the

first payday following the Offering Date and shall continue to the end of the

Offering Period unless sooner altered or terminated as provided herein.




10.3         Election to Change or Stop Payroll

Deductions.  During an

Offering Period, a Participant may elect to increase or decrease the rate of or

to stop deductions from his or her Compensation by delivering to the Company’s

designated office an amended Subscription Agreement authorizing such change on

or before the Change Notice Date, as defined below.  A Participant who elects, effective following the first payday of

an Offering Period, to decrease the rate of his or her payroll deductions to

zero percent (0%) shall nevertheless remain a Participant in the current

Offering Period unless such Participant withdraws from the Plan as provided in

Section 12.1.  The “Change Notice Date” shall be the

day immediately prior to the beginning of the first pay period for which such

election is to be effective, unless a different date is established by the

Company and announced to the Participants.




10.4         Administrative Suspension of Payroll

Deductions.  The Company may,

in its sole discretion, suspend a Participant’s payroll deductions under the

Plan as the Company deems advisable to avoid accumulating payroll deductions in

excess of the amount that could reasonably be anticipated to purchase the

maximum number of shares of Stock permitted (a) under the Participant’s

Purchase Right or (b) during a calendar year under the limit set forth in

Section 8.3.  Payroll deductions shall

be resumed at the rate specified in the Participant’s then effective

Subscription Agreement at the beginning, respectively, of (a) the next Offering

Period the first Purchase Date of which falls in the following calendar year,

provided that the individual is a Participant in such Offering Period or (b)

the next Purchase Period the Purchase Date of which falls in the following

calendar year, unless the Participant has either withdrawn from the Plan as

provided in Section 12.1 or has ceased to be an Eligible Employee.




10.5         Participant Accounts.  Individual bookkeeping accounts shall be

maintained for each Participant.  All

payroll deductions from a Participant’s Compensation shall be credited to such

Participant’s Plan account and shall be deposited with the general funds of the

Company.  All payroll deductions

received or held by the Company may be used by the Company for any corporate

purpose.




10.6         No Interest Paid.  Interest shall not be paid on sums deducted

from a Participant’s Compensation pursuant to the Plan.




10.7         Voluntary Withdrawal from Plan Account.  A Participant may withdraw all or any

portion of the payroll deductions credited to his or her Plan account and not

previously applied toward the purchase of Stock by delivering to the Company’s

designated office a written notice on a form provided by the Company for such

purpose.  A Participant who withdraws

the entire remaining balance credited to his or her Plan account shall be deemed

to have withdrawn from the Plan in accordance with Section 12.1.  Amounts withdrawn shall be returned to the

Participant as soon as practicable after the Company’s receipt of the notice of

withdrawal and may not be applied to the purchase of shares in any Offering

under the Plan.  The Company may from

time to time establish or change limitations on the frequency of withdrawals

permitted under this Section, establish a minimum dollar amount that must be

retained in the Participant’s Plan account, or terminate the withdrawal right

provided by this Section.





11.           PURCHASE OF SHARES.




11.1         Exercise of Purchase Right.  On each Purchase Date of an Offering Period,

each Participant who has not withdrawn from the Plan and whose participation in

the Offering has not otherwise terminated before such Purchase Date shall

automatically acquire pursuant to the exercise of the Participant’s Purchase

Right the number of whole shares of Stock determined by dividing (a) the total

amount of the Participant’s payroll deductions accumulated in the Participant’s

Plan account during the Offering Period and not previously applied toward the

purchase of Stock by (b) the Purchase Price. 

However, in no event shall the number of shares purchased by the

Participant during an Offering Period exceed the number of shares subject to

the Participant’s Purchase Right.  No

shares of Stock shall be purchased on a Purchase Date on behalf of a

Participant whose participation in the Offering or the Plan has terminated

before such Purchase Date.




11.2         Pro Rata Allocation of Shares.  If the number of shares of Stock which might

be purchased by all Participants in the Plan on a Purchase Date exceeds the

number of shares of Stock available in the Plan as provided in Section 4.1, the

Company shall make a pro rata allocation of the remaining shares in as uniform

a manner as practicable and as the Company determines to be equitable.  Any fractional share resulting from such pro

rata allocation to any Participant shall be disregarded.




11.3         Delivery of Certificates.  As soon as practicable after each Purchase

Date, the Company shall arrange the delivery to each Participant of a

certificate representing the shares acquired by the Participant on such

Purchase Date; provided that the Company may deliver such shares to a broker

designated by the Company that will hold such shares for the benefit of the

Participant.  Shares to be delivered to

a Participant under the Plan shall be registered in the name of the

Participant, or, if requested by the Participant, in the name of the

Participant and his or her spouse, or, if applicable, in the names of the heirs

of the Participant.




11.4         Return of Cash Balance.  Any cash balance remaining in a

Participant’s Plan account following any Purchase Date shall be refunded to the

Participant as soon as practicable after such Purchase Date.  However, if the cash balance to be returned

to a Participant pursuant to the preceding sentence is less than the amount

that would have been necessary to purchase an additional whole share of Stock

on such Purchase Date, the Company may retain the cash balance in the

Participant’s Plan account to be applied toward the purchase of shares of Stock

in the subsequent Purchase Period or Offering Period, as the case may be.




11.5         Tax Withholding.  At the time a Participant’s Purchase Right

is exercised, in whole or in part, or at the time a Participant disposes of

some or all of the shares of Stock he or she acquires under the Plan, the

Participant shall make adequate provision for the federal, state, local and

foreign tax withholding obligations, if any, of the Participating Company Group

which arise upon exercise of the Purchase Right or upon such disposition of

shares, respectively.  The Participating

Company Group may, but shall not be obligated to, withhold from the

Participant’s compensation the amount necessary to meet such withholding

obligations.





11.6         Expiration of Purchase Right.  Any portion of a Participant’s Purchase

Right remaining unexercised after the end of the Offering Period to which the

Purchase Right relates shall expire immediately upon the end of the Offering

Period.




11.7         Provision of Reports and Stockholder

Information to Participants. 

Each Participant who has exercised all or part of his or her Purchase

Right shall receive, as soon as practicable after the Purchase Date, a report

of such Participant’s Plan account setting forth the total payroll deductions

accumulated prior to such exercise, the number of shares of Stock purchased,

the Purchase Price for such shares, the date of purchase and the cash balance,

if any, remaining immediately after such purchase that is to be refunded or

retained in the Participant’s Plan account pursuant to Section 11.4.  The report required by this Section may be

delivered in such form and by such means, including by electronic transmission,

as the Company may determine.  In

addition, each Participant shall be provided information concerning the Company

equivalent to that information provided generally to the Company’s common

stockholders.




12.           WITHDRAWAL FROM PLAN OR OFFERING.




12.1         Voluntary Withdrawal from the Plan.  A Participant may withdraw from the Plan by

signing and delivering to the Company’s designated office a written notice of

withdrawal on a form provided by the Company for this purpose.  Such withdrawal may be elected at any time prior

to the end of an Offering Period; provided, however, that if a Participant

withdraws from the Plan after a Purchase Date, the withdrawal shall not affect

shares of Stock acquired by the Participant on such Purchase Date.  A Participant who voluntarily withdraws from

the Plan is prohibited from resuming participation in the Plan in the same

Offering from which he or she withdrew, but may participate in any subsequent

Offering by again satisfying the requirements of Sections 5 and 7.1.  The Company may impose, from time to time, a

requirement that the notice of withdrawal from the Plan be on file with the

Company’s designated office for a reasonable period prior to the effectiveness

of the Participant’s withdrawal.




12.2         Automatic Withdrawal from an Offering.  If the Fair Market Value of a

share of Stock on a Purchase Date other than the final Purchase Date of an

Offering is less than the Fair Market Value of a share of Stock on the Offering

Date of the Offering, then every Participant automatically shall be (a)

withdrawn from such Offering after the acquisition of shares of Stock on the

Purchase Date and (b) enrolled in the new Offering commencing immediately

following such Purchase Date.  A

Participant may elect not to be automatically withdrawn from an from an

Offering pursuant to this Section 12.2 by delivering to the Company’s

designated office not later than the close of business on the Purchase Date a

written notice indicating such election.




12.3         Return of Payroll Deductions.  Upon a Participant’s voluntary withdrawal

from the Plan pursuant to Section 12.1 or automatic withdrawal from an Offering

pursuant to Section 12.2, the Participant’s accumulated payroll deductions

which have not been applied toward the purchase of shares of Stock (except, in

the case of an automatic withdrawal pursuant to Section 12.2, for an amount

necessary to purchase an additional whole share of Stock as provided in Section

11.4) shall be refunded to the Participant as soon as practicable after the

withdrawal, without the payment of any interest, and the Participant’s interest

in the Plan or the Offering, as applicable, shall terminate.  Such accumulated payroll deductions to be

refunded in accordance with this Section may not be applied to any other

Offering under the Plan.





13.           TERMINATION OF EMPLOYMENT OR ELIGIBILITY.




Upon a Participant’s ceasing, prior to a Purchase

Date, to be an Employee of the Participating Company Group for any reason,

including retirement, disability or death, or upon the failure of a Participant

to remain an Eligible Employee, the Participant’s participation in the Plan

shall terminate immediately.  In such

event, the Participant’s accumulated payroll deductions which have not been

applied toward the purchase of shares shall, as soon as practicable, be returned

to the Participant or, in the case of the Participant’s death, to the

Participant’s beneficiary designated in accordance with Section 20, if

any, or legal representative, and all of the Participant’s rights under the

Plan shall terminate.  Interest shall

not be paid on sums returned pursuant to this Section 13.  A Participant whose participation has been

so terminated may again become eligible to participate in the Plan by

satisfying the requirements of Sections 5 and 7.1.




14.           CHANGE IN CONTROL.




14.1         Definitions.




(a)           An “Ownership

Change Event” shall be deemed to have occurred if any of

the following occurs with respect to the Company: (i) the direct or

indirect sale or exchange in a single or series of related transactions by the

stockholders of the Company of more than fifty percent (50%) of the voting

stock of the Company; (ii) a merger or consolidation in which the Company

is a party; (iii) the sale, exchange, or transfer of all or substantially

all of the assets of the Company; or (iv) a liquidation or dissolution of

the Company.




(b)           A “Change in

Control” shall mean an Ownership Change Event or a series

of related Ownership Change Events (collectively, the “Transaction”) wherein the

stockholders of the Company immediately before the Transaction do not retain

immediately after the Transaction, in substantially the same proportions as

their ownership of shares of the Company’s voting stock immediately before the

Transaction, direct or indirect beneficial ownership of more than fifty percent

(50%) of the total combined voting power of the outstanding voting securities

of the Company or, in the case of a Transaction described in

Section 14.1(a)(iii), the corporation or other business entity to which

the assets of the Company were transferred (the “Transferee”), as the case may

be.  For purposes of the preceding

sentence, indirect beneficial ownership shall include, without limitation, an

interest resulting from ownership of the voting securities of one or more

corporations or other business entities which own the Company or the

Transferee, as the case may be, either directly or through one or more

subsidiary corporations or other business entities.  The Board shall have the right to determine whether multiple sales

or exchanges of the voting securities of the Company or multiple Ownership

Change Events are related, and its determination shall be final, binding and

conclusive.





14.2         Effect of Change in Control on Purchase

Rights.  In the event of a

Change in Control, the surviving, continuing, successor, or purchasing

corporation or other business entity or parent thereof, as the case may be (the

“Acquiring

Corporation”), may, without the consent of any

Participant, assume the Company’s rights and obligations under the Plan.  If the Acquiring Corporation elects not to

assume the Company’s rights and obligations under the Plan, the Purchase Date

of the then current Purchase Period shall be accelerated to a date before the

date of the Change in Control specified by the Board, but the number of shares

of Stock subject to outstanding Purchase Rights shall not be adjusted.  All Purchase Rights which are neither

assumed by the Acquiring Corporation in connection with the Change in Control

nor exercised as of the date of the Change in Control shall terminate and cease

to be outstanding effective as of the date of the Change in Control.




15.           NONTRANSFERABILITY OF PURCHASE RIGHTS.




Neither payroll deductions credited to a Participant’s

Plan account nor a Participant’s Purchase Right may be assigned, transferred,

pledged or otherwise disposed of in any manner other than as provided by the

Plan or by will or the laws of descent and distribution.  (A beneficiary designation pursuant to

Section 20 shall not be treated as a disposition for this purpose.)  Any such attempted assignment, transfer,

pledge or other disposition shall be without effect, except that the Company

may treat such act as an election to withdraw from the Plan as provided in

Section 12.1.  A Purchase Right shall be

exercisable during the lifetime of the Participant only by the Participant.




16.           COMPLIANCE WITH SECURITIES LAW.




The issuance of shares under the Plan shall be subject

to compliance with all applicable requirements of federal, state and foreign

law with respect to such securities.  A

Purchase Right may not be exercised if the issuance of shares upon such

exercise would constitute a violation of any applicable federal, state or

foreign securities laws or other law or regulations or the requirements of any

securities exchange or market system upon which the Stock may then be

listed.  In addition, no Purchase Right

may be exercised unless (a) a registration statement under the Securities

Act of 1933, as amended, shall at the time of exercise of the Purchase Right be

in effect with respect to the shares issuable upon exercise of the Purchase

Right, or (b) in the opinion of legal counsel to the Company, the shares

issuable upon exercise of the Purchase Right may be issued in accordance with

the terms of an applicable exemption from the registration requirements of said

Act.  The inability of the Company to

obtain from any regulatory body having jurisdiction the authority, if any,

deemed by the Company’s legal counsel to be necessary to the lawful issuance

and sale of any shares under the Plan shall relieve the Company of any

liability in respect of the failure to issue or sell such shares as to which

such requisite authority shall not have been obtained.  As a condition to the exercise of a Purchase

Right, the Company may require the Participant to satisfy any qualifications

that may be necessary or appropriate, to evidence compliance with any

applicable law or regulation, and to make any representation or warranty with

respect thereto as may be requested by the Company.




17.           RIGHTS AS A STOCKHOLDER AND EMPLOYEE.




A Participant shall have no rights as a stockholder by

virtue of the Participant’s participation in the Plan until the date of the

issuance of a certificate for the shares purchased pursuant to the exercise of

the Participant’s Purchase Right (as evidenced by the appropriate entry on the

books of the Company or of a duly authorized transfer agent of the

Company).  No adjustment shall be made

for dividends, distributions or other rights for which the record date is prior

to the date such certificate is issued, except as provided in Section 4.2.  Nothing herein shall confer upon a

Participant any right to continue in the employ of the Participating Company

Group or interfere in any way with any right of the Participating Company Group

to terminate the Participant’s employment at any time.





18.           LEGENDS.




The Company may at any time place legends or other

identifying symbols referencing any applicable federal, state or foreign

securities law restrictions or any provision convenient in the administration

of the Plan on some or all of the certificates representing shares of Stock

issued under the Plan.  The Participant

shall, at the request of the Company, promptly present to the Company any and

all certificates representing shares acquired pursuant to a Purchase Right in

the possession of the Participant in order to carry out the provisions of this

Section.  Unless otherwise specified by

the Company, legends placed on such certificates may include but shall not be

limited to the following:




“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED

BY THE CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER

AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL

REVENUE CODE OF 1986, AS AMENDED.  THE

TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION

IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF.  THE REGISTERED HOLDER SHALL HOLD ALL SHARES

PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME

OF ANY NOMINEE).”




19.           NOTIFICATION OF DISPOSITION OF SHARES.




The Company may require the Participant to give the

Company prompt notice of any disposition of shares acquired by exercise of a

Purchase Right.  The Company may require

that until such time as a Participant disposes of shares acquired upon exercise

of a Purchase Right, the Participant shall hold all such shares in the

Participant’s name (or, if elected by the Participant, in the name of the

Participant and his or her spouse but not in the name of any nominee) until the

later of two years after the date of grant of such Purchase Right or one year

after the date of exercise of such Purchase Right..  The Company may direct that the certificates evidencing shares

acquired by exercise of a Purchase Right refer to such requirement to give

prompt notice of disposition.




20.           DESIGNATION OF BENEFICIARY.




20.1         Designation Procedure.  A Participant may file a written designation

of a beneficiary who is to receive (a) shares and cash, if any, from the

Participant’s Plan account if the Participant dies subsequent to a Purchase

Date but prior to delivery to the Participant of such shares and cash or (b)

cash, if any, from the Participant’s Plan account if the Participant dies prior

to the exercise of the Participant’s Purchase Right.  If a married Participant designates a beneficiary other than the

Participant’s spouse, the effectiveness of such designation shall be subject to

the consent of the Participant’s spouse. 

A Participant may change his or her beneficiary designation at any time

by written notice to the Company.





20.2         Absence of Beneficiary Designation.  If a Participant dies without an effective

designation pursuant to Section 20.1 of a beneficiary who is living at the time

of the Participant’s death, the Company shall deliver any shares or cash

credited to the Participant’s Plan account to the Participant’s legal

representative.




21.           NOTICES.




All notices or other communications by a Participant

to the Company under or in connection with the Plan shall be deemed to have

been duly given when received in the form specified by the Company at the

location, or by the person, designated by the Company for the receipt thereof.




22.           AMENDMENT OR TERMINATION OF THE PLAN.




The Board may at any time amend or terminate the Plan,

except that (a) no such amendment or termination shall affect Purchase

Rights previously granted under the Plan unless expressly provided by the Board

and (b) no such amendment or termination may adversely affect a Purchase

Right previously granted under the Plan without the consent of the Participant,

except to the extent permitted by the Plan or as may be necessary to qualify

the Plan as an employee stock purchase plan pursuant to Section 423 of the

Code or to comply with any applicable law, regulation or rule.  In addition, an amendment to the Plan must

be approved by the stockholders of the Company within twelve (12) months of the

adoption of such amendment if such amendment would authorize the sale of more

shares than are then authorized for issuance under the Plan or would change the

definition of the corporations that may be designated by the Board as

Participating Companies.




IN WITNESS WHEREOF, the undersigned Secretary of the

Company certifies that the foregoing Fresh Choice, Inc. 2001 Employee Stock

Purchase Plan was duly adopted by the Board of Directors of the Company on

February 21, 2001.




 




 




 




	

   


  	

  /S/ Joan M. Miller


  
	

   


  	

  Secretary


  





 




 











 




PLAN

HISTORY




	

  February 21, 2001


  	

   


  	

  Board of Fresh Choice,

  Inc., a Delaware corporation, adopts Plan, with an initial reserve of 290,000

  shares.


  
	

   


  	

   


  	

   


  
	

  May 24, 2001


  	

   


  	

  Stockholders of Fresh

  Choice, Inc. approve the Plan.


  
	

   


  	

   


  	

   


  
	

  December 3, 2001


  	

   


  	

  Effective Date (i.e.,

  date on which initial Offering Period commenced).