BJs RESTAURANTS INC (Form: 10-K, Received: 03/15/2005 15:43:22)

CHICAGO PIZZA & BREWERY, INC.

EMPLOYEE:

Jeremiah J. Hennessy, Co-CEO

Louis M. Mucci

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 2, 2005

¨	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 0-21423

BJ’S RESTAURANTS, INC.

(Exact name of registrant as specified in its charter)

California

33-0485615

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

16162 Beach Boulevard

Suite 100

Huntington Beach, California 92647

(714) 848-3747

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

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

Securities registered pursuant to Section 12(g) of the Act:


Title of Each Class		Name of each Exchange on Which Registered
Common Stock, No Par Value		NASDAQ

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 if the filer is an accelerated filer (as defined in Rule 12B-2 of the Act). YES x NO ¨

As of February 18, 2005, 19,812,786 shares of the common stock of the Registrant were outstanding. The aggregate market value of the common stock of the Registrant (“Common Stock”) held by non-affiliates as of the last business day of the second fiscal quarter, June 27, 2004, was $174,228,956, calculated based on the closing price of our common stock as reported by the NASDAQ Stock Market.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the following documents are incorporated by reference into Part III of this Form 10-K: The Registrant’s Proxy Statement for the Annual Meeting of Shareholders.

INDEX


PART I
ITEM 1.	DESCRIPTION OF BUSINESS	1
ITEM 2.	PROPERTIES	6
ITEM 3.	LEGAL PROCEEDINGS	7
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	8

PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS	9
ITEM 6.	SELECTED CONSOLIDATED FINANCIAL DATA	10
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
ITEM 7A.	QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 8.	FINANCIAL STATEMENTS	21
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	21
ITEM 9A.	CONTROLS AND PROCEDURES	21

PART III
ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	23
ITEM 11.	EXECUTIVE COMPENSATION	23
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	23
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	23
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	23

	PART IV
ITEM 15.	EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K	23
SIGNATURES		26
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

BJ’S RESTAURANTS, INC.

PART I

ITEM 1.

DESCRIPTION OF BUSINESS

GENERAL

On August 16, 2004, we changed our Company’s name to BJ’s Restaurants, Inc. (NASDAQ symbol BJRI) from Chicago Pizza & Brewery (NASDAQ symbol CHGO). BJ’s Restaurants, Inc. (the “Company” or “BJ’s”) owns and operates 36 restaurants, at the end of fiscal 2004, located in California, Oregon, Colorado, Arizona, Texas and Nevada. A licensee also operates one licensed restaurant in Lahaina, Maui. Each of our restaurants is operated either as a BJ’s Restaurant & Brewery ^® which includes a brewery within the restaurant, a BJ’s Restaurant & Brewhouse ^® which receive the beer it sells from one of our breweries, or a BJ’s Pizza & Grill ^® which is a smaller format restaurant near either a California beach or college. Our menu features our BJ’s ^® award-winning, signature deep-dish pizza, our own hand-crafted beers as well as a wide selection of appetizers, entrees, pastas, sandwiches, specialty salads and desserts including our unique Pizookie ^® cookie. Our ten BJ’s Restaurant & Brewery restaurants feature in-house brewing facilities where BJ’s hand-crafted beers are produced and sold.

We were incorporated in California on October 1, 1991 to assume the operation of the then existing five BJ’s restaurants. In January 1995, we purchased the BJ’s restaurants and concept from its founders. Since that time, we have completed the (i) expansion of our BJ’s menu to include high-quality sandwiches, pastas, entrees, specialty salads and desserts; (ii) enhancement of our BJ’s concept through a comprehensive logo and identity program, uniforms, an interior design concept and redesigned signage; (iii) addition of our BJ’s microbreweries to the concept to produce our own hand-crafted beers; and (iv) purchase of the Pietro’s Pizza chain in the Northwest in March 1996, accounting for three currently operating BJ’s restaurants in Oregon. As further described elsewhere herein, effective March 15, 2004, we sold our three Pietro’s Pizza restaurants which serve primarily Pietro’s thin-crust pizza in a very casual counter-service environment to employees of those restaurants.

The popularity of our BJ’s concept continues to grow contributing to comparable sales increases of 3.8%, 3.3%, and 3.3% for the fiscal years 2004, 2003, and 2002, respectively. As is customary for the casual dining segment of the restaurant industry, in calculating comparable sales, we include a restaurant in the comparable base once it has been open for eighteen months.

The opening of our first microbrewery in Brea, California in August 1996 marked the beginning of our production of award-winning, hand-crafted, specialty beers which are distributed to all of our restaurants. The breweries have added an exciting dimension to the BJ’s concept which further distinguishes BJ’s from many other restaurant concepts. In 2002, we received the prestigious Large Brew Pub of the Year award at the Great American Beer Festival in Denver, Colorado. This award was followed by Gold medals at the 2004 Great American Beer Festival, California State Fair and the Los Angeles County Fair.

Our fundamental business strategy is to grow through the additional development and expansion of the BJ’s brand. The BJ’s brand represents exceptional food and specialty beers at a great value, in a fun, casual environment. Our current focus is on the development of the larger footprint BJ’s restaurants in high profile locations with favorable demographics. During 2004, we opened a BJ’s Restaurant and Brewery in Laguna Hills, California and BJ’s Restaurant and Brewhouses in Willowbrook and Plano, Texas, Summerlin, Nevada, Fresno, San Bernardino and Folsom California. During 2003, we opened a BJ’s Restaurant and Brewery in Clear Lake, Texas and BJ’s Restaurant and Brewhouses in Addison, Texas, Cerritos, California and San Jose, California. We anticipate opening BJ’s Restaurant & Brewhouses in Moreno Valley, Corona, San Mateo, San Bruno, and Rancho Cucamonga, California, Tucson and Mesa, Arizona, and Sugarland, Texas and a BJ’s Restaurant and Brewery in Roseville, California in 2005 and we are in negotiations for additional sites in California, Arizona, Colorado, Nevada and Texas.

In addition to developing new BJ’s restaurant and brewery operations, we may pursue acquisition opportunities, which may involve conversions of other restaurant concepts and locations to the BJ’s concept. To date, other than the potential locations listed in Item 2, “Properties”, we have no binding commitments to acquire or convert any other locations.

There can be no assurance that future events both within and outside of our control, including construction problems, delays, additional expenses and difficulties encountered in expansion and conversion of restaurants, will not adversely impact our ability to meet our operational or growth objectives or require additional financing, or that such financing will be available.

Our internet address is www.bjsbrewhouse.com . Electronic copies of our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available free of charge by visiting the “Investor Relations” section of www.bjsbrewhouse.com . These reports are posted as soon as reasonably practicable after they are electronically filed with the Securities and Exchange Commission.

RESTAURANT CONCEPT AND MENU

We believe the BJ’s restaurant concept has a strong competitive positioning by offering customers excellent food at moderate prices from a broad menu of over 100 items featuring award-winning pizzas, specialty salads, soups, pastas, sandwiches, entrees and desserts.

Our principal objective in developing BJ’s broad menu is to ensure that all items on the menu maintain and enhance BJ’s reputation for quality. BJ’s offers large portions of high quality food, creating an attractive value proposition for our customers. Because of the relatively low food cost associated with pizza and hand crafted beers, which together represent a significant portion of sales, our restaurants are able to maintain favorable gross profit margins on a significant selection of menu items while providing a superior value to the customer. The estimated average check per restaurant guest at our restaurants was $10.00 to $11.00 during 2004.

BJ’s core product, our deep-dish, Chicago-style pizza, has been highly acclaimed since it was originally developed in 1978. This unique version of Chicago-style pizza is unusually light, with a crispy, flavorful crust. We believe BJ’s lighter crust has a broader appeal than other versions of deep-dish pizza. The pizza is topped with high-quality meats, fresh vegetables fresh mozzarella cheese. BJ’s pizza consistently has been awarded “best pizza” honors by restaurant critics and public opinion polls in Orange County, California, where the BJ’s concept originated.

Our BJ’s restaurants provide a variety of beers for every taste, offering a constantly evolving selection of domestic, imported and micro-brewed beers. BJ’s own hand-crafted beers are the focus of the beer selection and feature six standard beers along with a rotating selection of seasonal specialties. While the BJ’s beers are produced predominantly at breweries located in 10 of our restaurants, they are distributed to, and offered at all of the BJ’s restaurants. We believe that internally produced beer provides a variety of benefits, including:

Improved quality and freshness of the BJ’s brewed beers, which are produced under the constant supervision of our Vice President of Brewing Operations.

The production costs of internally brewed beer can be significantly less than purchased beer. The relatively low production costs and premium pricing often associated with micro-brewed beers has a positive impact on income from operations. Profitability of our breweries are maximized when operating at or near capacity.

In addition, we offer outstanding desserts to our guests, including our BJ’s famous Pizookie, which is freshly baked. This is a hot out-of-the-oven, pan-baked, delicious cookie topped with vanilla bean ice cream.

MARKETING

Our marketing program is focused on community-based promotions and customer referrals. Our philosophy relating to the BJ’s restaurants has been to “spend our marketing dollars on the plate,” or use funds that would typically be allocated to marketing to provide an enhanced food, service and ambiance to our existing guests. We believe this is the best way to protect and enhance our guest visit frequency. Our expenditures on advertising and marketing were less than 1% of sales in both 2004 and 2003.

We focus on the local community and charitable causes, providing food and resources for many worthwhile events, which has benefited us in our relations with our surrounding communities. Our commitment to supporting worthwhile causes is exemplified by our “Cookies for Kids” program, which provides a donation to the Cystic Fibrosis Foundation for each Pizookie sold. Our contributions under the “Cookies for Kids” program were $295,000 and $154,000 in 2004 and 2003, respectively. In addition, we donated preopening sales proceeds of $140,000 related to the seven new restaurant openings in 2004 to the Cystic Fibrosis Foundation and approximately $50,000 to local charities.

OPERATIONS

Our policy is to staff our restaurants with qualified, trained and enthusiastic people, who desire to be an integral part of BJ’s fun, casual atmosphere. Prior experience in the restaurant industry is only one of the qualities management looks for in our staff. Enthusiasm, motivation and the ability to interact well with our customers and correctly execute our concept are the most important qualities for BJ’s management and staff.

Our restaurant management and hourly staff undergo thorough formal training prior to assuming their positions at the restaurants. We have designated certain managers, servers and cooks as “trainers” who are responsible for properly training and monitoring all new staff. In addition, our Director of Training & Development manages and maintains our training processes and its related functions.

We purchase our food products from several wholesale distributors. The majority of our food and operating supplies for our California restaurants are purchased from Jacmar Foodservice Distribution, a related party. See “Related Party Transactions”. Our product specifications are very strict and we insist on using fresh, high-quality ingredients.

COMPETITION

The restaurant industry is highly competitive. A great number of restaurants and other food and beverage service operations compete both directly and indirectly with us in many aspects, including food quality and service, the price-value relationship, beer quality and selection, atmosphere, suitable sites for new restaurants and qualified personnel to operate our restaurants, among other factors. Many competitors who use concepts similar to that of ours have been in business longer than we have, have greater consumer awareness and often have substantially greater capital and human resources.

Because the restaurant industry can be significantly affected by changes in consumer tastes, national, regional or local economic conditions, demographic trends, traffic patterns, weather and the type and number of competing restaurants, any changes in these factors could adversely affect us. In addition, factors such as inflation and increased food, liquor, labor and other employee compensation costs could adversely affect us. We believe, however, that our ability to offer high-quality food at moderate prices with superior service in a distinctive dining environment provides us with substantial competitive advantages.

RELATED PARTY TRANSACTIONS

As of January 2, 2005, Jacmar Companies and their affiliates (collectively referred to herein as “Jacmar”) owned approximately 41.3% of our outstanding common stock. Jacmar, through its specialty wholesale food

distributorship, is our largest supplier of food, beverage and paper products. Jacmar sells products to us at prices comparable to those offered by unrelated third parties. Jacmar supplied us with $19.3 million, $14.6 million and $11.5 million of food, beverage and paper products for fiscal 2004, 2003 and 2002, respectively, and 57.1%, 53.5% and 60.0% of our total costs for these products, respectively. We had trade payables to Jacmar related to these products of $2.2 million and $1.1 million at January 2, 2005 and December 28, 2003, respectively.

GOVERNMENT REGULATIONS

We are subject to various federal, state and local laws, along with rules and regulations that affect our business. Each of our restaurants are subject to licensing and regulation by a number of governmental authorities, which may include alcoholic beverage control, building, land use, health, safety and fire agencies in the state or municipality in which the restaurant is located. Difficulties obtaining or maintaining the required licenses or approvals could delay or prevent the development of a new restaurant in a particular area or could adversely affect the operation of an existing restaurant. We believe, however, that we are in compliance in all material respects with all relevant laws, rules, and regulations. Furthermore, we have never experienced abnormal difficulties or delays in obtaining the licenses or approvals required to open a new restaurant or to continue the operation of our existing restaurants. Additionally, we are not aware of any environmental regulations that have had or that we believe will have a materially adverse effect upon our operations.

Alcoholic beverage control regulations require each of our restaurants to apply to a federal and state authority and, in certain locations, municipal authorities for a license and permit to sell alcoholic beverages on the premises. Typically, licenses must be renewed annually and may be revoked or suspended for cause by such authority at any time. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of our restaurants, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling, and storage and dispensing of alcoholic beverages. We have not encountered any material problems relating to alcoholic beverage licenses or permits to date and we do not expect to encounter any material problems going forward. The failure to receive or retain, or a delay in obtaining, a liquor license in a particular location could adversely affect our ability to obtain such a license elsewhere.

We are subject to “dram-shop” statutes in California and other states in which we operate. Those statutes generally provide a person who has been injured by an intoxicated person the right to recover damages from an establishment that has wrongfully served alcoholic beverages to such person. We carry liquor liability coverage as part of our existing comprehensive general liability insurance which we believe is consistent with coverage carried by other entities in the restaurant industry and will help protect us from possible claims. Even though we carry liquor liability insurance, a judgment against us under a dram-shop statute in excess of our liability coverage could have a materially adverse effect on us.

Various federal and state labor laws, along with rules and regulations, govern our relationship with our employees, including such matters as minimum wage requirements, overtime and working conditions. Significant additional governmental mandates such as an increased minimum wage, an increase in paid leaves of absence, extensions in health benefits or increased tax reporting and payment requirements for employees who receive gratuities, could negatively impact our restaurants.

Our restaurants and breweries are subject to “tied house laws” and the “three tier system” of liquor distribution, both of which were introduced at the federal level after the repeal of Prohibition. These laws prohibit brewers from holding retail licenses and require separate licensing for manufacturers, distributors and retailers. Over the last 25 years, “brewpubs” have been legalized at the state level through the loosening of these laws. However, brewpubs are generally licensed as retailers and do not have the same privileges as a microbrewery, and the restrictions imposed on brewpubs vary from state to state. These restrictions may prevent us from operating both brewpubs and restaurants in some states. We believe that we are currently in compliance with the brewpub regulations in the states where we hold licenses. However, there is some risk that a state’s brewpub regulations or the interpretation of these regulations will change in a way that might impact our current model of manufacturing beer and/or supplying beer to our restaurants in that state.

EMPLOYEES

At February 9, 2005, we employed 3,943 employees at our 36 restaurants. We also employed 60 administrative and field supervisory personnel at our corporate offices. We believe that we maintain favorable relations with our employees, and currently no unions or collective bargaining arrangements exist.

INSURANCE

We maintain workers’ compensation, general liability and property insurance coverage with deductibles and limits that we believe are currently appropriate for our operations. However, there is no assurance that any insurance coverage maintained by us will be adequate or that we will not experience claims in excess of our coverage limits, or that we can continue to obtain and maintain such insurance at all or that our premium costs will not rise to an extent that they adversely affect our ability to economically obtain or maintain such insurance.

TRADEMARKS AND COPYRIGHTS

Our registered trademarks and service marks include, among others, the word mark “BJ’s Chicago Pizzeria”, and our stylized logo, which includes the words “BJ’s Pizza, Grill, Brewery”. In addition, we have registered the word marks “BJ’s Restaurant & Brewery,” “BJ’s Restaurant & Brewhouse” and “BJ’s Pizza & Grill,” for our restaurant services and “BJ’s Tatonka” and “Harvest Hefeweizen” for our proprietary beer and “Pizookie” for our proprietary dessert. We have registered all of our marks with the United States Patents and Trademark Office. We believe that the trademarks, service marks and other proprietary rights have significant value and are important to our brand-building effort and the marketing of our restaurant concepts. However, there are other restaurants using the name BJ’s throughout the United States. We have in the past, and expect to continue to, vigorously protect our proprietary rights. 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.

ITEM 2.

PROPERTIES

RESTAURANT LOCATIONS AND EXPANSION PLANS

The following table sets forth, as of February 18, 2005, data regarding our existing restaurants and potential restaurant locations for 2005 and 2006 that have signed leases or binding letters of intent:


	Year Opened/ Acquired	Square Feet
CALIFORNIA
Huntington Beach	1994	3,430
Balboa	1995	2,600
La Jolla Village	1995	3,000
Laguna Beach	1995	2,150
Belmont Shore	1995	2,910
Westwood Village, Los Angeles	1996	2,450
Brea (Microbrewery)	1996	10,000
Arcadia	1999	7,371
Woodland Hills (Microbrewery)	1999	13,000
La Mesa	1999	7,200
Valencia	1999	7,000
West Covina (Microbrewery)	2000	12,000
Huntington Beach II	2000	8,031
Burbank	2000	11,000
Irvine	2001	7,826
Oxnard (Microbrewery)	2002	10,164
Cupertino	2002	8,300
Westlake Village	2002	8,626
Cerritos	2003	10,848
San Jose	2003	7,315
San Bernardino	2004	7,834
Fresno	2004	8,110
Folsom	2004	7,581
Laguna Hills (Microbrewery)	2004	10,125
Rancho Cucamonga*	2005	8,110
Roseville (Microbrewery)*	2005	9,437
Corona*	2005	6,949
Moreno Valley*	2005	6,949
San Bruno*	2005	8,869
San Mateo*	2005	8,300
Vacaville**	2006	7,459
ARIZONA
Chandler (Microbrewery)	2001	8,800
Mesa*	2005	7,459
Tucson*	2005	7,650
Desert Ridge**	2006	7,650
COLORADO
Boulder (Microbrewery)	1997	5,500
NEVADA
Summerlin	2004	8,113
TEXAS
Lewisville	2002	8,300
Clear Lake (Microbrewery)	2003	10,709
Addison	2003	7,649
Willowbrook	2004	7,289
Plano	2004	8,113
Sugarland*	2005	7,459
HAWAII
Lahaina, Maui (licensed restaurant)	1994	3,430
OREGON
Jantzen Beach (Microbrewery)	1996	7,932
Eugene IV	1996	4,345
Portland (Lloyd Center) (Microbrewery)	1996	4,341

*	Currently expected to open in 2005.

**	Currently expected to open in 2006.

In addition to the above locations, we are evaluating other potential locations in California, Arizona, Colorado, Nevada, and Texas. Our ability to open additional restaurants will depend upon a number of factors, including, but not limited to, the availability of qualified restaurant management staff and other personnel, the cost and availability of suitable locations, regulatory limitations regarding common ownership of breweries and restaurants in certain states, cost effective and timely construction of restaurants (which can be delayed by a variety of controllable and non-controllable factors), and securing of required governmental permits and approvals. There can be no assurance that we will be able to open our planned restaurants in a timely or cost effective manner, if at all.

All of our restaurants are on leased premises and are subject to varying lease-specific arrangements. For example, some of the leases require base rent, subject to regional cost-of-living increases, and other leases include base rent with specified periodic increases. Additionally, many leases require contingent rent based on a percentage of gross sales. In addition, certain of our leases expire in the near future, and contain options to renew. No assurance can be given that leases can be renewed, or, if renewed, that rents will not increase substantially, both of which would adversely affect us. Other leases are subject to renewal at fair market value, which could involve substantial increases. Total lease expense in 2004 was $7.1 million.

With respect to future restaurant sites, we believe the locations of our restaurants are important to our long-term success and we devote significant resources to analyzing prospective sites. Our strategy is to open our restaurants in high-profile locations with strong customer traffic during day, evening and weekend hours. We have developed specific criteria for evaluating prospective sites, including demographic information, visibility and traffic patterns.

Our corporate office is located in a 9,117 square-foot leased facility in Huntington Beach, California. The lease expires on September 30, 2006 and currently provides for $177,000 in annual rent as well as additional charges for taxes and operating expenses. We may seek to expand our leased corporate office space in the future, commensurate with the anticipated growth of our operations.

On June 15, 2003, we closed a BJ’s restaurant in Oregon. The net book value of the restaurant’s assets was included in the reserve for restaurant closures; therefore, no loss was recorded in 2003 as a result of the closing.

In the fourth quarter of 2003, the successor tenant at our restaurant location that was sold in 2002 became delinquent in rent payments. The landlord sought relief under our guarantee of the lease liability. In February 2004, the landlord released us from any additional liability in exchange for a cash payment of $55,000, which was included in our closed restaurant reserve at December 28, 2003.

On January 3, 2005, we closed our Seal Beach pizza & grill restaurant, which was on a monthly lease since February 2004. We recorded a fixed asset write-down of $38,000 in fiscal 2004 related to this closure.

ITEM 3.

LEGAL PROCEEDINGS

Restaurants such as those operated by us are subject to litigation in the ordinary course of business, most of which we expect to be covered by our general liability insurance, subject to certain deductibles and coverage limits. Punitive damages awards and employee unfair practice claims, however, are not covered by our general liability insurance. To date, we have not paid punitive damages with respect to any claims, but there can be no assurance that punitive damages will not be awarded with respect to any future claims, employee unfair practice claims or any other actions. We could be affected by the adverse publicity resulting from allegations, regardless of whether or not such allegations are valid or whether we are determined to be liable. We believe that the final disposition of any such lawsuits and claims will not have a material adverse effect on our financial positions, results of operations or liquidity.

The following paragraphs describe certain legal actions recently settled or pending:

Labor Related Matters

On March 10, 2003, a former employee of ours, on behalf of himself and other employees and former employees of ours similarly situated and working in California, filed a class action complaint in the Superior Court of California for the County of Orange against us. The complaint alleges that we violated provisions of the California Labor Code covering meal and rest beaks for employees, along with associated acts of unfair competition and seeks payment of wages for all meal and rest breaks allegedly denied to our California employees for the period from October 1, 2000 to the present. We have reached an agreement with the class counsel to settle the meal and rest break class action case pending in California, and the settlement has been approved by the court. The amount of the settlement was developed from mediation, which was concluded in December of 2003. Accordingly, we recorded $950,000 in other expense during the fourth quarter of 2003 to reflect this liability at December 28, 2003. The amount of the settlement was reduced to $900,000 based upon subsequent court determination and the $50,000 reversal was reflected in the second quarter ended June 27, 2004. On January 3, 2005, the settlement was paid in full.

On February 5, 2004, another former employee of ours, on behalf of herself, and all others similarly situated, filed a class action complaint in Los Angeles County Superior Court, alleging causes of action for: (1) failure to pay reporting time minimum pay; (2) failure to allow meal breaks; (3) failure to allow rest breaks; (4) waiting time penalties; (5) civil penalties; (6) reimbursement for fraud and deceit; (7) punitive damages for fraud and deceit; and (8) disgorgement of illicit profits. On June 28, 2004, the Plaintiff stipulated to dismiss her second, third, fourth, and fifth causes of action. During September 2004, the Plaintiff stipulated to arbitration of the action. No further court action has been taken since that date. The outcome of this matter cannot be ascertained at this time.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our Board of Directors unanimously approved and recommended that the shareholders vote to approve the increase in the number of directors to a range of 7 to 13 directors. Our shareholders holding a majority of the voting power of the Company approved the Proposal pursuant to a written consent dated September 27, 2004.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

On October 8, 1996, our Common Stock became listed on the NASDAQ Small Cap Market (“NASDAQ”) (Symbols CHGO) in connection with our Initial Public Offering. On July 23, 2002, our Common Stock was approved for a NASDAQ National Market listing. On August 16, 2004, we formerly changed our name to BJ’s Restaurants, Inc. (Symbol: BJRI).

On February 1, 2005, the closing price of our Common Stock was $15.50 per share. The table below shows our high and low common stock sales prices as reported by NASDAQ. The sales prices represent inter-dealer quotations without adjustments for retail mark-ups, mark-downs or commissions.


	Common Stock
	High		Low
Fiscal year ended January 2, 2005
First Quarter	$	15.32	$	11.99
Second Quarter	$	15.92	$	12.95
Third Quarter	$	15.87	$	13.25
Fourth Quarter	$	17.20	$	13.73
Fiscal year ended December 28, 2003
First Quarter	$	7.21	$	5.53
Second Quarter	$	10.13	$	7.02
Third Quarter	$	12.74	$	10.00
Fourth Quarter	$	15.21	$	11.75

As of February 1, 2005 we had 117 shareholders of record.

DIVIDEND POLICY

We have not paid any dividends since our inception and have currently not allocated any funds for the payment of dividends. Rather, it is our current policy to retain earnings, if any, for expansion of our operations, remodeling of existing restaurants and other general corporate purposes. We have no plans to pay any cash dividends in the foreseeable future. Should we decide to pay dividends in the future, such payments would be at the discretion of the Board of Directors.

ITEM 6.

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data should be read in conjunction with the consolidated financial statements and related notes thereto as well as with the discussion below.


	Fiscal Year ⁽⁴⁾
	2004			2003			2002			2001			2000
	(in thousands, except per share data)
Consolidated statements of income data:
Revenues	$	129,049		$	102,959		$	75,705		$	64,683		$	52,346
Costs and expenses:
Cost of sales		33,819			27,281			19,241			17,415			14,456
Labor and benefits		46,330			36,828			28,057			23,196			18,772
Occupancy		9,435			7,889			5,970			4,963			4,160
Operating expenses		14,181			11,780			8,361			6,843			5,520
General and administrative		10,790			8,522			7,782			5,056			3,922
Depreciation and amortization		5,249			3,928			2,714			2,117			2,002
Restaurant opening expense		2,918			1,467			1,717			734			943
Gain on sale of Pietro’s restaurants		(1,658	)		—			—			—			—
Restaurant closing expense (recovery) ⁽¹⁾		20			(25	)		(8	)		(799	)		1,517

Total costs and expenses		121,084			97,670			73,834			59,525			51,292
Income from operations		7,965			5,289			1,871			5,158			1,054
Other income (expense):
Interest income (expense), net		421			376			262			(345	)		(549	)
Other income (expense), net ⁽²⁾		165			(228	)		414			168			(38	)

Total other income (expense)		586			148			676			(177	)		(587	)
Income before taxes		8,551			5,437			2,547			4,981			467
Income tax (expense) benefit ⁽³⁾		(2,286	)		(1,844	)		(880	)		(1,804	)		1,477

Net income	$	6,265		$	3,593		$	1,667		$	3,177		$	1,944

Net income per share:
Basic	$	0.32		$	0.18		$	0.10		$	0.33		$	0.25

Diluted	$	0.30		$	0.18		$	0.09		$	0.30		$	0.25

Weighted average shares outstanding:
Basic		19,498			19,422			17,273			9,515			7,658

Diluted		20,570			20,482			18,775			10,419			7,770

Consolidated balance sheets data (end of period):
Cash and cash equivalents	$	3,766		$	4,899		$	28,440		$	8,903		$	1,405
Investments		15,775			22,041			3,681			—			—
Total assets		100,866			83,705			77,849			40,255			29,992
Total long-term debt (including current portion)		—			153			561			4,345			6,059
Minority interest		—			—			—			—			263
Shareholders’ equity		78,780			71,051			66,616			28,095			15,043

(1)

Fiscal 2000 includes a $1.4 million charge related to costs associated with the expected closing of four restaurants in 2001. Fiscal 2001 represents a gain of $799,000 resulting from the sale of three Oregon restaurants in 2001 and the closure of an additional Oregon restaurant in early 2002 on terms more favorable than anticipated.

(2)	Fiscal 2001 includes a net gain of $119,000 from the sale of the Lahaina partnership interest. Fiscal 2002 includes increased lottery earnings from our Pietro’s Pizza locations and license fee income from our interest in the BJ’s Lahaina, Maui, Hawaii location.

Fiscal 2003 includes a $950,000 charge related to our meals & rest period settlement, partially offset by a $250,000 benefit related to other settlement proceeds.

(3)	Fiscal 2004 and 2000 include a $298,000 and $1.7 million benefit for the elimination of the net deferred tax asset valuation allowances, respectively.

(4)	Fiscal 2004 consists of 53 weeks. All other fiscal years consist of 52 weeks.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Form 10-K. Except for the historical information contained herein, the discussion in this Form 10-K contains certain forward-looking statements that involve known and unknown risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-K. Our actual results could differ materially from those discussed in forward-looking statements. Factors that could cause or contribute to such differences include, without limitation, those factors discussed herein: (i) our ability to manage an increasing number of new restaurant openings, (ii) construction delays, (iii) labor shortages, (iv) minimum wage increases (v) food quality and health concerns, (vi) factors that impact California, where 25 of our current 36 restaurants are located, (vii) restaurant and brewery industry competition, (viii) impact of certain brewery business considerations, including without limitation, dependence upon suppliers and related hazards, (ix) consumer trends, (x) potential uninsured losses and liabilities, (xi) fluctuating commodity costs including food and energy, (xii) trademark and servicemark risks, (xiii) government regulations, (xiv) licensing costs, and (xv) other general economic and regulatory conditions and requirements.

GENERAL

We own and operate 36 restaurants, at the end of fiscal 2004, located in California, Oregon, Colorado, Arizona, Texas and Nevada and receive fees from one licensed restaurant in Lahaina, Maui. Each of our restaurants are operated either as a BJ’s Restaurant & Brewery, a BJ’s Restaurant & Brewhouse, or a BJ’s Pizza & Grill restaurant. Our menu features our award-winning, signature deep-dish pizza, our own handcrafted beers as well as a wide selection of appetizers, entrees, pastas, sandwiches, specialty salads and desserts. We have ten BJ’s Restaurant & Brewery restaurants that feature in-house brewing facilities where our handcrafted beers are produced.

In calculating our comparable restaurant revenues, we include a restaurant in the comparable base once it has been opened for eighteen periods.

RESULTS OF OPERATIONS

The following table sets forth, for the years indicated, our Consolidated Statements of Income expressed as percentages of total revenues.


	Fiscal Year
	2004		2003		2002		2001		2000
Consolidated statements of income data:
Revenues	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Costs and expenses:
Cost of sales	26.2		26.5		25.4		26.9		27.6
Labor and benefits	35.9		35.8		37.1		35.9		35.9
Occupancy	7.3		7.7		7.9		7.7		7.9
Operating expenses	11.0		11.4		11.0		10.6		10.5
General and administrative	8.4		8.3		10.3		7.8		7.5
Depreciation and amortization	4.1		3.8		3.6		3.3		3.8
Restaurant opening expense	2.3		1.4		2.3		1.1		1.8
Gain on sale of Pietro’s restaurants	(1.3	)	—		—		—		—
Restaurant closing expense (recovery)	—		—		—		(1.2	)	2.9

Total costs and expenses	93.9		94.9		97.6		92.1		97.9
Income from operations	6.1		5.1		2.4		7.9		2.1
Other income (expense):
Interest income (expense), net	0.3		0.4		0.3		(0.5	)	(1.0	)
Other income (expense), net	0.1		(0.2	)	0.5		0.3		(0.1	)

Total other income (expense)	0.4		0.2		0.8		(0.2	)	(1.1	)
Income before taxes	6.5		5.3		3.2		7.7		1.0
Income tax (expense) benefit	(1.8	)	(1.8	)	(1.2	)	(2.8	)	2.8

Net income	4.7	%	3.5	%	2.0	%	4.9	%	3.8	%

FISCAL YEAR 2004 (53 WEEKS) COMPARED TO FISCAL YEAR 2003 (52 WEEKS)

Revenues. Total revenues for 2004 increased to $129.0 million from $103.0 million in 2003, an increase of $26.0 million or 25.2%. The increase is primarily the result of:

•

The opening of the following new locations provided additional revenues of $23.3 million in 2004 when compared with 2003:


Location	Concept	Opening Date
Cerritos, California	Restaurant & Brewhouse	July 2003
San Jose, California	Restaurant & Brewhouse	October 2003
Willowbrook, Texas	Restaurant & Brewhouse	January 2004
Laguna Hills, California	Restaurant & Brewery	June 2004
Summerlin, Nevada	Restaurant & Brewhouse	June 2004
Fresno, California	Restaurant & Brewhouse	July 2004
San Bernardino, California	Restaurant & Brewhouse	September 2004
Folsom, California	Restaurant & Brewhouse	October 2004
Plano, Texas	Restaurant & Brewhouse	December 2004

•

An increase in our same restaurants’ revenues for the comparable 53 week period of $3.3 million or 3.8%. This increase is primarily due to (1) an increase in customer counts, (2) a menu price increase of approximately 1.5% effective during May 2003, and an additional increase of approximately 2% effective during November 2003 and (3) a soda and beer price increase of 0.5% effective during May and October 2004, respectively.

•

The above-mentioned increases were partially offset by approximately $2.4 million of revenues related to the revenue of our three Pietro’s restaurants on March 15, 2004.

•

Fiscal 2004 consisted of 53 weeks compared to 52 weeks for fiscal 2003. After adjusting for $3.3 million of restaurant revenues contributed by the additional operating week, restaurant revenues would have increased by 22.0% to $22.7 million for fiscal 2004 on a 52-week basis.

Cost of Sales. Cost of food, beverages and paper for our restaurants increased to $33.8 million during the 53 weeks ended January 2, 2005 from $27.3 million during the 52 week period of 2003, an increase of $6.5 million or 23.8%. As a percentage of revenues, cost of sales decreased to 26.2% for the current 53 week period from 26.5% for the prior-year 52 week period. This decrease is a result of increased menu prices and our continuing efforts to monitor costs, especially in our Texas market where we have reduced our purchase prices through improved vendor pricing due to increased volumes and new restaurants. We provide our customers a large variety of menu items which are not dependent on a single group of commodities. During 2004, commodity prices for meat increased while dairy products decreased in comparison to 2003. We continue to work with our vendors to control food costs; however, there can be no assurance that future supplies and costs for commodities used in our restaurants will not fluctuate due to weather and other market conditions.

Labor and Benefits. Labor and benefit costs for our restaurants increased to $46.3 million during the 53 weeks ended January 2, 2005 from $36.8 million during the 52 week period of 2003, an increase of $9.5 million or 25.8%. This increase was substantially due to the 25.2% increase in total revenues for 2004. As a percentage of revenues, labor and benefit costs increased to 35.9% for the current 53 week period from 35.8% for the prior-year 52 week period. This slight increase is primarily due to the fact that new restaurants run higher labor for the first 90 days after opening and we have 2 restaurants as of January 2, 2005, which has not yet met the 90 day threshold as compared to one restaurant in 2003.

Occupancy. Occupancy costs increased to $9.4 million during the 53 weeks ended January 2, 2005 from $7.9 million during the 52 week period of 2003, an increase of $1.5 million or 19.0%. The increase reflects the seven additional restaurants we opened during 2004, the 25.2% increase in total revenues for 2004, partially offset by the sale of our 3 Pietro’s restaurants on March 15, 2004. As a percentage of revenues, occupancy costs decreased to 7.3% in 2004 from 7.7% in 2003. This decrease is primarily due to the fact that five out of the eleven restaurants opened the last two years were ground leases with monthly lease payments below our historical rent levels.

Operating Expenses. Operating expenses increased to $14.2 million during the 53 weeks ended January 2, 2005 from $11.8 million during the 52 week period of 2003, an increase of $2.4 million or 20.3%. As a percentage of revenues, operating expenses decreased to 11.0% for the current 53 week period from 11.4% for the prior-year 52 week period. This decrease is a result of increased menu prices, increased same restaurant revenues of 3.8% and continued expense containment initiatives.

General and Administrative Expenses. General and administrative expenses increased to $10.8 million during the 53 weeks ended January 2, 2005 from $8.5 million during the 52 week period of 2003, an increase of $2.3 million or 27.1%. As a percentage of revenues, general and administrative expenses increased to 8.4% for the current 53 week period from 8.3% for the prior-year 52 week period. This increase is primarily the result of (1) increased bonus payments as we obtained our budgeted plan for fiscal 2004, (2) severance payments of $498,000 to three corporate employees and (3) $381,000 related to Sarbanes Oxley compliance costs.

Depreciation and Amortization. Depreciation and amortization increased to $5.2 million during the 53 weeks ended January 2, 2005 from $3.9 million during the 52 week period of 2003, an increase of $1.3 million or 33.3%. The increase was primarily due to our acquisition of restaurant equipment, furniture, leasehold improvements and brewery equipment totaling $20.7 million for the seven restaurants opened in 2004 and $11.7 million for the four restaurants opened in 2003, coupled with three restaurants opened over the last year that had ground leases resulting in higher leasehold improvement costs. In addition, restaurant opening costs were incurred in both years for restaurant openings which were in progress.

Restaurant Opening Expense . Restaurant opening expense increased to $2.9 million during the 53 weeks ended January 2, 2005 from $1.5 million during the 52 week period of 2003, an increase of $1.4 million. This increase is primarily due to opening costs related to seven restaurant openings in 2004 when compared to four restaurant openings in 2003. In addition, we incurred restaurant opening expense in both years for restaurants which were in progress of opening. Our opening costs will fluctuate from period to period, depending upon, but not limited to, the number of restaurant openings, the size and concept of the restaurants being opened and the complexity of the staff hiring and training process. Furthermore, approximately $499,000 of the increase is related to the correction of our holiday rent accounting.

Interest Income, Net. Net interest income, increased to $421,000 during the 53 weeks ended January 2, 2005 from $376,000 during the 52 week period of 2003, an increase of $45,000. This increase is primarily due to the repayment of our related party debt and other long term debt at the beginning of 2004.

Other Income, Net. Net other income increased to $165,000 during the 53 weeks ended January 2, 2005 from a net expense of ($228,000) in the 52 week period of 2003, an increase of $393,000. The increase was primarily due to (1) the $950,000 charge related to our meal & rest periods settlement in 2003 offset by the $250,000 received in connection with another settlement, (2) decreased license fee income from our interest in the BJ’s Lahaina, Maui, Hawaii restaurant and (3) the sale of our Pietro’s restaurants in 2004 which generated gaming income.

Income Tax Expense. Income tax expense increased to $2.3 million during the 53 weeks ended January 2, 2005 from $1.8 million during the comparable 52 week period of 2003, an increase of $500,000. The increase was primarily due to increased income before taxes of $3.1 million offset by the reduction of our tax reserve and valuation allowance of $503,000. Our effective income tax rate for the 53 weeks ended January 2, 2005 was 26.7% compared to 33.9% for the comparable 52 week period of 2003. Our effective rate decreased due to additional utilization of FICA tip credits, and the reduction of our tax reserve and valuation allowance.

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

Revenues. Total revenues for 2003 increased to $103.0 million from $75.7 million in 2002, an increase of $27.3 million or 36.1%. The increase is primarily the result of:

•

The opening of the following new locations provided additional revenues of $26.2 million in 2003 when compared with 2002:


Location	Concept	Opening Date
Westlake, California	Restaurant & Brewhouse	August 2002
Oxnard, California	Restaurant & Brewery	September 2002
Lewisville, Texas	Restaurant & Brewhouse	November 2002
Cupertino, California	Restaurant & Brewhouse	December 2002
Clear Lake, Texas	Restaurant & Brewery	January 2003
Addison, Texas	Restaurant & Brewhouse	May 2003
Cerritos, California	Restaurant & Brewhouse	July 2003
San Jose, California	Restaurant & Brewhouse	October 2003

•

An increase in our same restaurants revenues for the comparable year of $2.2 million or 3.2%. This increase is primarily due to an increase in customer counts, a menu price increase of approximately 1.5% effective during May 2003, an additional increase of approximately 2% effective during November 2003 and the fact that the year ended January 2, 2005 had one additional day of revenues.

•

The above-mentioned increases were partially offset by $893,000 of revenues related to the closure of our Pietro’s Eugene, Oregon restaurant on February 28, 2002, Pietro’s Portland, Oregon restaurant (Lombard Street) on December 31, 2002, and our BJ’s Portland, Oregon restaurant (Stark Street) on June 15, 2003.

Cost of Sales. Cost of food, beverages and paper for our restaurants increased to $27.3 million in 2003 from $19.2 million in 2002, an increase of $8.1 million or 42.2%. As a percentage of revenues, cost of sales increased to 26.5% in 2003 from 25.4% in 2002. This increase is a result of the following: (i) conducting business in new markets where we have a higher cost of sales mix and higher per unit purchase costs and (ii) an increase in selected commodity costs primarily cheese and beef.

Labor and Benefits. Labor and benefits costs for our restaurants increased to $36.8 million in 2003 from $28.1 million in 2002, an increase of $8.7 million or 31.0%. As a percentage of revenues, labor and benefits costs decreased to 35.8% in 2003 from 37.1% in 2002. This decrease was primarily a result of management directed productivity improvements at the restaurant level and the presence of more restaurants in tip credit states. In tip credit states, which include Texas, Arizona and Colorado, we are permitted to reduce hourly labor rates up to approximately $4.00 per hour.

Occupancy. Occupancy costs increased to $7.9 million in 2003 from $6.0 million in 2002, an increase of $1.9 million or 31.7%. The increase reflects the four additional restaurants we opened in August, September, November and December 2002 and the four additional restaurants we opened in January, May, July and October 2003, partially offset by the closure of our Pietro’s Portland, Oregon restaurant (Lombard Street) in December 2002 and our BJ’s Portland, Oregon restaurant (Stark Street) in June 2003. As a percentage of revenues, occupancy costs decreased to 7.7% in 2003 from 7.9% in 2002. This decrease was primarily due to the fact that four out of the eight restaurants opened during 2003 had ground leases with monthly lease payments below our historical rent levels.

Operating Expenses. Operating expenses increased to $11.8 million in 2003 from $8.4 million in 2002, an increase of $3.4 million or 40.5%. As a percentage of revenues, operating expenses increased to 11.4% in 2003 from 11.0% in 2002. The increase was primarily due to the following: (i) increased utility costs, (ii) increased repair and maintenance costs related to restaurants open for a number of years, (iii) increased supply costs related to the implementation of a management driven labor productivity program, and (iv) increased marketing costs related to new markets and the continuing promotion of existing markets. Operating expenses include restaurant-level operating costs, the major components of which include marketing, repairs and maintenance, insurance, supplies, credit cards, and utilities.

General and Administrative Expenses. General and administrative expenses increased to $8.5 million in 2003 from $7.8 million in 2002, an increase of $700,000 or 9.0%. As a percentage of revenues, general and administrative expenses decreased to 8.3% in 2003 from 10.3% in 2002. This decrease was primarily due to a 36.1% increase in revenues versus an increase of 9.0% in general and administrative costs as the 2002 expenditures for infrastructure were spread across higher sales volumes.

Depreciation and Amortization. Depreciation and amortization increased to $3.9 million in 2003 from $2.7 million in 2002, an increase of $1.2 million or 44.4%. The increase was primarily due to our acquisition of restaurant equipment, furniture, leasehold improvements and brewery equipment totaling $11.7 million and $12.0 million for the four restaurants opened in 2003 and the four restaurants opened in 2002, respectively, coupled with four restaurants opened over the last year that had ground leases resulting in higher leasehold improvement costs.

Restaurant Opening Expense. Restaurant opening expense decreased to $1.5 million in 2003 from $1.7 million in 2002, a decrease of $200,000. The overall decrease was primarily due to management directed programs to enhance expense control and reduce new employee hiring costs. Additionally, 2003 includes costs of $177,000 related to our Willowbrook, Texas restaurant that opened in January 2004, but were offset by $112,000 of costs incurred in 2002 related to our Clear Lake, Texas restaurant that opened in January 2003.

Restaurant Closing (Recovery) Expense. During 2003, our restaurant closure reserve was reduced by $56,000, of which $31,000 was utilized for property, equipment and lease payments in connection with the

closure of our Stark and Lombard restaurants in Oregon. The remaining balance of $25,000 was recorded as a reduction in our restaurant closure expense primarily due to more favorable lease settlements than we anticipated. At January 2, 2005, the balance of our reserve, which included $55,000 in current liabilities and $74,000 in long-term liabilities, was for the lease liability related to our Lombard restaurant and the remaining lease liability related to our McMinnville restaurant that was sold in 2001.

Interest Income (Expense), Net. Net interest income (expense) increased to $376,000 in 2003 from $262,000 in 2002, an increase of $114,000. During 2002, approximately 7.3 million redeemable warrants and approximately 188,000 stock options were exercised, providing approximately $36.3 million in cash proceeds to us, net of approximately $229,000 of related costs. The overall increase in interest income, net is primarily due to a decrease in interest expense related to the payoff of our term loan in April 2002 with an outstanding balance of $3.1 million offset by the decrease in interest income primarily due to (i) less cash to invest after the opening of our four new restaurants over the past year and (ii) decreased interest rates.

Other (Expense) Income, Net. Net other (expense) income decreased to ($228,000) in 2003 from $414,000 in 2002, a decrease of $642,000. The decrease was primarily due to the $950,000 charge related to our meals & rest periods settlement, offset by the $250,000 received in connection with another settlement and increased gaming income at our Pietro’s Pizza locations.

Income Tax Expense. Income tax expense increased to $1.8 million in 2003 from $880,000 in 2002, an increase of $920,000 or 104.5%. The increase was primarily due to increased income before taxes of $2.9 million. Additionally, our effective tax rate decreased from 34.6% in 2002 to 33.9% in 2003 as a result of higher utilization of our FICA credits.

LIQUIDITY AND CAPITAL RESOURCES

Our capital requirements are principally related to restaurant growth plans. Similar to many restaurant chains, we utilize operating lease arrangements for substantially all of our restaurant locations. We believe that our operating lease arrangements continue to provide appropriate leverage for our capital structure in a financially efficient manner. However, we are not limited to the use of lease arrangements as our only method of opening new restaurants. While our operating lease obligations are not required to be reflected as indebtedness on our consolidated balance sheet, the minimum rents and related fixed asset obligations under our lease agreements must be satisfied by cash flows from our ongoing operations. Accordingly, our lease arrangements reduce, to some extent, our capacity to utilize funded indebtedness in our capital structure. We also require capital resources to maintain our existing base of restaurants and to further expand and strengthen the capabilities of our corporate and information technology infrastructures. Our requirement for working capital is not significant, since our restaurant guests pay for their food and beverage purchases in cash or credit cards, at the time of the sale, thus we are able to sell many of our inventory items before we have to pay our suppliers of such items.

Our cash flows from operating activities, as detailed in the consolidated statements of cash flows, provided $16.4 million of net cash during the 53 weeks ended January 2, 2005, a $7.5 million increase from the $8.9 million generated during the 52 week period of 2003. The increase in cash from operating activities for the 53 weeks ended January 2, 2005, in comparison to 52 weeks ended December 28, 2003, is primarily due to the timing of payments to vendors included in accounts payable, increased prepaids and other assets due to the timing of rent payments and increased net income, partially offset by the gain on sale of Pietro’s restaurants.

Total capital expenditures for the acquisition of our restaurant and brewery equipment and leasehold improvements to construct new restaurants were $24.2 million for the 53 weeks ended January 2, 2005. These expenditures were primarily related to the development of our new restaurants during the year in Willowbrook, Texas, Summerlin, Nevada, Laguna Hills, Fresno, San Bernardino, and Folsom, California and Plano, Texas and the construction of our Rancho Cucamonga, Moreno Valley, Roseville, San Bruno, and Corona California and our Mesa and Tucson, Arizona locations. In addition, for the 53 weeks ended January 2, 2005, total capital expenditures related to the maintenance of existing restaurants were $1.5 million.

We have signed leases for, and plan to open restaurants in Sugarland, Texas, Roseville, Moreno Valley, Corona, Rancho Cucamonga, San Bruno, and San Mateo California and Tucson and Mesa Arizona in 2005.

In recent years, we have funded our capital requirements primarily through cash flows from operations and proceeds received from the exercise of redeemable warrants during 2002. Our capital requirements related to opening additional restaurants will continue to be significant. We anticipate total capital expenditures between $25 million and $27 million in 2005 with the majority of expenditures associated with the new restaurant openings previously stated. Other capital expenditures are expected to be consistent with prior year trends and will be primarily directed toward capital maintenance associated with existing restaurants. We expect to fund all capital requirements for fiscal 2005 using operating cash flows, our cash on hand and investments. 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 flow and our cash and investments balances together with anticipated cash flows from operations and expected landlord construction contributions should be sufficient to satisfy our working capital and capital expenditure requirements through fiscal 2006.

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. The Company has initiated discussions with various financial institutions and bankers to consider alternative methods to obtain capital or debt financing, as needed. 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 future growth plans, business and results of operations.

SALE OF PIETRO’S RESTAURANTS

In February 2004, we executed an agreement to sell our three Pietro’s restaurants effective on March 15, 2004, resulting in a $1.7 million pre-tax gain. The buyers, formerly employees, purchased the restaurant assets and related trademarks for the Pietro’s brand. The $2.2 million sales price includes cash proceeds of $1.3 million and two notes receivable from the buyers totaling $950,000, with terms of five and ten years. The ten-year note is in the amount of $700,000, bears interest at prime plus one percent with a minimum interest rate of 5% and a maximum interest rate of 7% and requires fixed monthly payments of principal and interest over the ten-year term. The five-year note is in the amount of $250,000, bears interest at prime plus one percent and requires fixed monthly payments of principal and interest over the five-year term. Our notes are subordinated to the buyer’s SBA loan. Principal payments to the Company on both notes were prohibited for the first six months by the buyer’s SBA loan.

For these three Pietro’s restaurants sold, sales were $644,000 and $767,000 and pre-tax income was $111,000 and $154,000 for the thirteen weeks ended March 28, 2004 and March 30, 2003, respectively. The net book value of the assets sold as of March 28, 2004 was $500,000.

OFF-BALANCE SHEET ARRANGEMENTS

As part of our on-going business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities (“VIEs”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow limited purposes. As of January 2, 2005, we are not involved in any unconsolidated VIE transactions.

IMPACT OF INFLATION

The impact of inflation on food, labor, energy and occupancy costs can significantly affect our operations. Many of our employees are paid hourly rates related to Federal and State minimum wage laws. Minimum wages have been increased numerous times and remain subject to future increases.

While we have been able to react to inflation and other changes in our costs of key operating expenses by gradually increasing prices for our menu items, combined with reduced purchasing costs, and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future. Competitive conditions could limit our menu pricing flexibility. We cannot guarantee that all future cost increases can be offset by increased menu prices or that increased menu prices will be fully absorbed by our restaurant guests without any resulting changes in their visit frequencies or purchasing patterns. Many of the leases for our restaurants provide for contingent rent obligations based on a percentage of sales. As a result, rent expense will absorb a proportionate share of any menu price increases in our restaurants. There can be no assurance that we will continue to generate increases in comparable restaurant sales in amounts sufficient to offset inflationary or other cost pressures.

SEASONALITY AND ADVERSE WEATHER

Our results of operations have historically been impacted by seasonality, which directly impacts tourism at our coastal California locations. The summer months (June through August) have traditionally been higher volume periods than other periods of the year. Quarterly results have been and will continue to be significantly impacted by the timing of new restaurant openings and their associated restaurant opening costs. As a result of these and other factors, our financial results for any given quarter may not be indicative of the results that may be achieved for a full fiscal year.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies require the greatest amount of subjective or complex judgments by management and are important to portraying our financial condition and results of operations. 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

We record all property and equipment at cost. Property and equipment accounting requires estimates of the useful lives for the assets for depreciation purposes and selection of depreciation methods. We believe the useful lives reflect the actual economic life of the underlying assets. We have elected to use the straight-line method of depreciation over the estimated useful life of an asset or the primary lease term of the respective lease, whichever is shorter. Renewals and betterments that materially extend the useful life of an asset are capitalized while maintenance and repair costs are charged to operations as incurred. Judgment is often required in the decision to distinguish between an asset which qualifies for capitalization versus an expenditure which is for maintenance and repairs.

We review property and equipment (which includes leasehold improvements) and intangible assets with finite lives for impairment when events or circumstances indicate these assets might be impaired. We test impairment using historical cash flows and other relevant facts and circumstances as the primary basis for our estimates of future cash flows. The analysis is performed at the restaurant level for indicators of impairment. If impairment indicators were identified, then assets would be recorded at fair value. This process requires the use of estimates and assumptions, which are subject to a high degree of judgment. If these assumptions change in the future, we may be required to record impairment charges for these assets. As of January 2, 2005, no impairment indicators have been identified.

Self Insurance Liability

We are self-insured for a portion of our employee workers’ compensation program. We maintain coverage with a third party insurer to limit our total exposure for this program. The accrued liability associated with this

program is based on our estimate of the ultimate costs to settle known claims as well as claims incurred but not yet reported to us (“IBNR claims”) as of the balance sheet date. Our estimated liability is not discounted and is based on information provided by our insurance broker and insurer, combined with our judgments regarding a number of assumptions and factors, including the frequency and severity of claims, our claims development history, case jurisdiction, related legislation, and our claims settlement practice. Significant judgment is required to estimate IBNR claims as parties have yet to assert such claims. If actual claims trends, including the severity or frequency of claims, differ from our estimates, our financial results could be significantly impacted.

Income Taxes

We provide for income taxes based on our estimate of federal and state tax liabilities. Our estimates include, but are not limited to, effective state and local income tax rates, allowable tax credits for items such as FICA taxes paid on reported tip income and estimates related to depreciation expense allowable for tax purposes. We usually file our income tax returns several months after our fiscal year-end. We file our tax returns with the advice and compilation of tax consultants. All tax returns are subject to audit by federal and state governments, usually years after the returns are filed, and could be subject to differing interpretation of the tax laws.

Deferred tax accounting requires that we evaluate net deferred tax assets to determine if these assets will more likely than not be realized in the foreseeable future. This test requires projection of our taxable income into future years to determine if there will be taxable income sufficient to realize the tax assets (future tax deductions and FICA tax credit carryforwards). The preparation of the projections requires considerable judgment and is subject to change to reflect future events and changes in the tax laws.

Leases

We lease all of our restaurant locations. We account for our leases under the provisions of FASB Statement No. 13, Accounting for Leases (SFAS 13) and subsequent amendments, which require that our leases be evaluated and classified as operating or capital leases for financial reporting purposes. All of our restaurant leases are classified as operating leases pursuant to the requirements of SFAS 13. We disburse cash for leasehold improvements and furniture fixtures and equipment to build out and equip our leased premises. We may also expend cash for permanent improvements that we make to leased premises that generally are reimbursed to us by our landlords as construction contributions (also known as tenant improvement allowances) pursuant to agreed-upon terms in our leases. Landlord construction contributions can take the form of up-front cash, full or partial credits against minimum or percentage rents otherwise payable by us, or a combination thereof.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation . Statement 123(R) supersedes APB No. 25, and amends FASB Statement No. 95, Statement of Cash Flows . Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.

As permitted by Statement 123, we currently account for share-based payments to employees using APB No. 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)’s fair value method will have a significant impact on our result of operations, although it will have no impact on our overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments

granted in the future. However, had we adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share above. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. While we cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash flows recognized in prior periods for such excess tax deductions were $479,000, $366,000 and $250,000 in fiscal 2004, 2003 and 2002, respectively.

Statement 123(R) must be adopted no later than the first interim or annual period beginning after June 15, 2005, irrespective of the entity’s fiscal year. Early adoption will be permitted in periods in which financial statements have not yet been issued. We expect to adopt Statement 123(R) on July 4, 2005, which is the first day of our fiscal third quarter of 2005.

CONTRACTUAL OBLIGATIONS

The following table summarizes our future estimated cash payments under existing contractual obligations as of January 2, 2005, including estimated cash payments due by period (in thousands).


	Payments Due by Period
Contractual Obligations	Total		Less Than 1 Year		2-3 Years		4-5 Years		After 5 Years
Operating Leases ⁽¹⁾	$	63,102	$	5,635	$	10,623	$	9,571	$	37,273

Total	$	63,102	$	5,635	$	10,623	$	9,571	$	37,273

(1)	For more detailed description of our operating leases, refer to note 5 in the accompanying Consolidated Financial Statements.

Additionally, we have entered into lease agreements related to the construction of future restaurants with commencement dates subsequent to January 2, 2005. Our aggregate future commitment relating to these leases is $15.7 million.

ITEM 7A.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risk exposures are related to cash and cash equivalents and investments. We invest our excess cash in highly liquid short-term investments with maturities of less than twelve 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. For the 53 weeks ended January 2, 2005, the average interest rate earned on cash and cash equivalents and investments was approximately 1.6%.

We purchase food and other commodities for use in our operations, based upon market prices established with our suppliers. Many of the commodities purchased by us can be subject to volatility due to market supply and demand factors outside of our control. To manage this risk in part, we attempt to enter into fixed price purchase commitments, with terms typically up to one year, for many of our commodity requirements. Dairy costs can also fluctuate due to government regulation. We believe that substantially all of our food and supplies are available from several sources, which helps to diversify our overall commodity cost risk. We also believe that we have the ability to increase certain menu prices, or vary certain menu items offered, in response to food commodity price increases. Some of our commodity purchase arrangements may contain contractual features that limit the price paid by establishing certain price floors or caps. The Company does not use financial instruments to hedge commodity prices, since our purchase arrangements with suppliers, to the extent that we can enter into such arrangements, help control the ultimate cost that we pay.

ITEM 8.

FINANCIAL STATEMENTS

See the Index to Financial Statements attached hereto.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, including our Co-Chairman, Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our disclosure controls and procedures, as such terms are defined under rules 13a-15 and 15d-15 promulgated under Securities Exchange Act 1934, as amended. Based on this assessment, our management concluded that our disclosure controls and procedures were effective as of the end period covered by this annual report.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2004 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2004.

Management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2004 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included elsewhere herein.

Changes in Internal Control over Financial Reporting

There has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that BJ’s Restaurants, Inc. maintained effective internal control over financial reporting as of January 2, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). BJ’s Restaurants, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that BJ’s Restaurants, Inc. maintained effective internal control over financial reporting as of January 2, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, BJ’s Restaurants, Inc. maintained, in all material respects, effective internal control over financial reporting as of January 2, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of BJ’s Restaurants, Inc. as of January 2, 2005 and December 28, 2003, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three fiscal years in the period ended January 2, 2005 of BJ’s Restaurants, Inc. and our report dated March 10, 2005 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Irvine, California

March 10, 2005

PART III

ITEM 10.

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item is incorporated herein by reference to the information contained in the Proxy Statement relating to the Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission no later than 120 days after the close of the year ended January 2, 2005.

ITEM 11.

EXECUTIVE COMPENSATION

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)	(1) CONSOLIDATED FINANCIAL STATEMENTS

The following documents are contained in Part II, Item 8 of this Annual Report on Form 10-K:


Report of Independent Registered Public Accounting Firm.		F-1
Consolidated Balance Sheets at January 2, 2005 and December 28, 2003.		F-2
Consolidated Statements of Income for each of the three fiscal years in the period ended January 2, 2005.		F-3
Consolidated Statements of Shareholders’ Equity for each of the three fiscal years in the period ended January 2, 2005.		F-4
Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended January 2, 2005.		F-5
Notes to the Consolidated Financial Statements.		F-6

(2)

FINANCIAL STATEMENT SCHEDULES

All schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.

(3)

EXHIBITS


Exhibit Number		Description

2.1		Asset Purchase Agreement by and between the Company and Roman Systems, Inc. incorporated by reference to Exhibit 2.2 of the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on June 28, 1996, as amended by the Company’s Registration Statement on Form SB-2/A filed with the Commission on August 1, 1996 and the Company’s Registration Statement on Form SB-2A filed with the Commission on August 22, 1996 (File No. 3335182-LA) (as amended, the “Registration Statement”).

2.2		Secured Promissory Note by and between the Company and Roman Systems, Inc. filed as Exhibit 2.3 of the Registration Statement.

3.1		Amended and Restated Articles of Incorporation of the Company, as amended, incorporated by reference to Exhibit 1 of the Registration Statement.

3.2		Bylaws of the Company, incorporated by reference to Exhibit 3.2 of the Registration Statement.

3.3		Certificate of amendment of Articles of Incorporation as adopted on August 2, 2004 for the purposes of changing the name of the Corporation from Chicago Pizza & Brewery, Inc. to BJ’s Restaurants, Inc.

3.4		Amendment to Bylaws of the Company as adopted on November 4, 2004 for the purpose of increasing the range of directors on our Board of Directors to a minimum of 7 directors and a maximum of 13 directors

4.1		Specimen Common Stock Certificate of the Company, incorporated by reference to Exhibit 4.1 of the Registration Statement.

4.2		Warrant Agreement, incorporated by reference to Exhibit 4.2 of the Registration Statement

4.3		Specimen Common Stock Purchase Warrant, incorporated by reference to Exhibit 4.3 of the Registration Statement.

4.4		Form of Representative’s Warrant, incorporated by reference to Exhibit 4.4 of the Registration Statement.

10.3		Form of Indemnification Agreement with Officers and Directors, incorporated by reference to Exhibit 10.6 of the Registration Statement.

10.4		BJ’s Restaurants, Inc. Amended and Restated Stock Option Plan.

10.9		Employment Agreement dated January 1, 2001 between the Company and P.A. Motenko, employed as Co-Chief Executive Officer and Co-Chairman of the Board of Directors, incorporated by reference to Exhibit 10.9 of the 2000 Annual Report.

10.10		Employment Agreement dated January 1, 2001 between the Company and J.J. Hennessy, employed as Co-Chief Executive Officer and Co-Chairman of the Board of Directors, incorporated by reference to Exhibit 10.10 of the 2000 Annual Report.

10.12		Stock Purchase Agreement by and between the Company, The Jacmar Companies and William H. Tilley dated February 22, 2001, incorporated by reference to Exhibit 10.12 of the 2000 Annual Report.

10.13		Facilitation Agreement between BJ Chicago LLC (“LLC”) and BJ’s Restaurants, Inc. dated December 20, 2000 in furtherance of the Stock Purchase Agreement between LLC and ASSI, Inc, incorporated by reference to Exhibit 10.13 of the 2000 Annual Report.


Exhibit Number		Description

10.15		Option Agreement dated December 20, 2000 between the Company and Paul A. Motenko to purchase shares of the Company’s common stock, incorporated by reference to Exhibit 10.15 of the 2000 Annual Report.

10.16		Option Agreement dated December 20, 2000 between the Company and Jeremiah J. Hennessy to purchase shares of the Company’s common stock, incorporated by reference to Exhibit 10.16 of the 2000 Annual Report.

10.25		Employment Agreement dated March 20, 2002 between the Company and Michael A. Nahkunst, employed as Chief Operating Officer, incorporated by reference to Exhibit 10.25 of the 2002 Annual Report.

10.27		Employment Agreement dated March 15, 2004 between the Company and Louis M. Mucci, employed as Chief Financial Officer, incorporated by reference to Exhibit 10.27 of the 2004 Annual Report.

10.28		Employment Agreement dated January 12, 2005 between the Company and Gerald (Jerry) W. Deitchle, employed as Chief Executive Officer, incorporated by reference to Exhibit 10.28 of the 2004 Annual Report.

21		List of Subsidiaries, incorporated by reference to Exhibit 21.1 of the Registration Statement.

23.1		Consent of Independent Registered Public Accounting Firm

(b)		Form 8-K filed on October 5, 2004 announcing third quarter revenues and comparable restaurant sales. Form 8-K filed on November 23, 2004 announcing Gerald W. (Jerry) Deitchle’s appointment to the Board of Directors. Form 8-K filed on January 13, 2005, announcing fourth quarter revenues and comparable restaurant sales. Form 8-K filed on January 19, 2005, announcing that Gerald W. (Jerry) Deitchle has been named President and CEO of the Company.

31		Section 302 Certifications of Co-Chairman of the Board, Chief Executive Officer and Chief Financial Officer.

32		Section 906 Certification of Co-Chairman of the Board, Chief Executive Officer and Chief Financial Officer.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.


BJ’ S R ESTAURANTS , I NC .

By:		/s/ P AUL A. M OTENKO
		Paul A. Motenko, Co-Chairman of the Board, Vice President and Secretary

March 10, 2005

Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


	Signature	Capacity	Date

By:	/s/ P AUL A. M OTENKO Paul A. Motenko	Co-Chairman of the Board of Directors, Vice President and Secretary	March 10, 2005

By:	/s/ J EREMIAH J. H ENNESSY Jeremiah J. Hennessy	Co-Chairman of the Board of Directors	March 10, 2005

By:	/s/ G ERALD W. D EITCHLE Gerald W. Deitchle	Chief Executive Officer, President and Director	March 10, 2005

By:	/s/ L OUIS M. M UCCI Louis M. Mucci	Chief Financial Officer and Director	March 10, 2005

By:	/s/ P ETER A. B ASSI Peter A. Bassi	Director	March 10, 2005

By:	/s/ L ARRY D. B OUTS Larry D. Bouts	Director	March 10, 2005

By:	/s/ S HANN M. B RASSFIELD Shann M. Brassfield	Director	March 10, 2005

By:	/s/ J AMES A. D AL P OZZO James A. Dal Pozzo	Director	March 10, 2005

By:	/s/ J OHN F. G RUNDHOFER John F. Grundhofer	Director	March 10, 2005

By:	/s/ J. R OGER K ING J. Roger King	Director	March 10, 2005

BJ’S RESTAURANTS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


		Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets at January 2, 2005 and December 28, 2003		F-2
Consolidated Statements of Income for Each of the Three Fiscal Years in the Period Ended January 2, 2005		F-3
Consolidated Statements of Shareholders’ Equity for Each of the Three Fiscal Years in the Period Ended January 2, 2005		F-4
Consolidated Statements of Cash Flows for Each of the Three Fiscal Years in the Period Ended January 2, 2005		F-5
Notes to Consolidated Financial Statements		F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

BJ’s Restaurants, Inc.

We have audited the accompanying consolidated balance sheets of BJ’s Restaurants, Inc. as of January 2, 2005 and December 28, 2003, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three fiscal years in the period ended January 2, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of BJ’s Restaurants, Inc. at January 2, 2005 and December 28, 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 2, 2005, in conformity with United States generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of BJ’s Restaurants, Inc. internal control over financial reporting as of January 2, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 10, 2005, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Irvine, California

March 10, 2005

F-1

BJ’S RESTAURANTS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)


	January 2, 2005		December 28, 2003
ASSETS
Current assets:
Cash and cash equivalents	$	3,766	$	4,899
Investments		15,775		22,041
Accounts and other receivables		2,299		1,869
Inventories		1,294		959
Prepaids and other current assets		3,364		1,164
Deferred taxes		1,822		1,175

Total current assets		28,320		32,107
Property and equipment, net		66,489		46,306
Goodwill		4,673		4,762
Notes receivable		925		—
Other assets, net		459		530

Total assets	$	100,866	$	83,705

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,196	$	2,798
Accrued expenses		12,406		8,533
Current portion of reserve for restaurant closures		—		55
Current portion of notes payable to related parties		—		151

Total current liabilities		18,602		11,537
Deferred income taxes		1,742		143
Reserve for restaurant closures		54		74
Other liabilities		1,688		900

Total liabilities		22,086		12,654
Commitments and contingencies (Note 5)
Shareholders’ equity:
Preferred stock, 5,000 shares authorized, none issued or outstanding		—		—
Common stock, no par value, 60,000 shares authorized and 19,813 and 19,649 shares issued and outstanding as of January 2, 2005 and December 28, 2003, respectively		63,380		62,513
Capital surplus		2,706		2,109
Retained earnings		12,694		6,429

Total shareholders’ equity		78,780		71,051

Total liabilities and shareholders’ equity	$	100,866	$	83,705

The accompanying notes are an integral part of these consolidated financial statements.

F-2

BJ’S RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)


	Fiscal Year
	2004			2003			2002
Revenues	$	129,049		$	102,959		$	75,705
Costs and expenses:
Cost of sales (Note 12)		33,819			27,281			19,241
Labor and benefits		46,330			36,828			28,057
Occupancy		9,435			7,889			5,970
Operating expenses		14,181			11,780			8,361
General and administrative		10,810			8,497			7,774
Depreciation and amortization		5,249			3,928			2,714
Restaurant opening expense		2,918			1,467			1,717
Gain from sale of Pietro’s restaurants		(1,658	)		—			—

Total costs and expenses		121,084			97,670			73,834

Income from operations		7,965			5,289			1,871

Other income:
Interest income, net		421			376			262
Other income (expense), net		165			(228	)		414

Total other income		586			148			676

Income before income taxes		8,551			5,437			2,547
Income tax expense		(2,286	)		(1,844	)		(880	)

Net income	$	6,265		$	3,593		$	1,667

Net income per share:
Basic	$	0.32		$	0.18		$	0.10

Diluted	$	0.30		$	0.18		$	0.09

Weighted average number of shares outstanding:
Basic		19,498			19,422			17,273

Diluted		20,570			20,482			18,775

The accompanying notes are an integral part of these consolidated financial statements.

F-3

BJ’S RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)


	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Note Receivable from Officer			Total
	Shares	Amount		Capital Surplus		Retained Earnings					Note Receivable from Officer			Total
Balance, December 31, 2001	11,768	$	25,807	$	1,383	$	1,169	$	(114	)	$	(150	)	$	28,095
Exercise of stock options, net	188		556		—		—		—			—			556
Exercise of common stock warrants, net	7,349		35,722		—		—		—			—			35,722
Collection of notes receivable	—		—		—		—		—			150			150
Tax benefit from stock option exercises	—		—		312		—		—			—			312
Net unrealized gain on interest rate swap	—		—		—		—		114			—			114
Net income	—		—		—		1,667		—			—			1,667

Comprehensive income															1,781

Balance, December 29, 2002	19,305		62,085		1,695		2,836		—			—			66,616
Exercise of stock options, net	344		428		—		—		—			—			428
Tax benefit from stock option exercises	—		—		414		—		—			—			414
Net income	—		—		—		3,593		—			—			3,593

Balance, December 28, 2003	19,649		62,513		2,109		6,429		—			—			71,051
Exercise of stock options, net	164		867		—		—		—			—			867
Tax benefit from stock option exercises	—		—		597		—		—			—			597
Net income	—		—		—		6,265		—			—			6,265

Balance, January 2, 2005	19,813	$	63,380	$	2,706	$	12,694	$	—		$	—		$	78,780

The accompanying notes are an integral part of these consolidated financial statements.

F-4

BJ’S RESTAURANTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Fiscal Year
	2004			2003			2002
Cash flows from operating activities:
Net income	$	6,265		$	3,593		$	1,667
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,249			3,928			2,714
Deferred income taxes		952			(478	)		284
Tax benefit from stock options exercised		597			414			312
Gain on sale of Pietro’s restaurants		(1,658	)		—			—
Changes in assets and liabilities:
Accounts and other receivables		(436	)		(573	)		(1,158	)
Notes receivable		25			—			—
Inventories		(335	)		(179	)		(111	)
Prepaids and other current assets		(2,200	)		158			(196	)
Other assets, net		18			20			(205	)
Accounts payable		3,398			(2,072	)		2,383
Accrued expenses		3,758			3,824			1,034
Reserve for restaurant closures		(75	)		—			(8	)
Other liabilities		(103	)		7			(127	)
Landlord contribution for tenant improvements		938			250			27

Net cash provided by operating activities		16,393			8,892			6,616

Cash flows from investing activities:
Purchases of property and equipment		(25,758	)		(14,093	)		(16,042	)
Purchases of investments		(25,035	)		(37,781	)		(3,681	)
Proceeds from investments sold		31,301			19,421
Proceeds from sale of Pietro’s restaurants		1,250			—			—

Net cash used in investing activities		(18,242	)		(32,453	)		(19,723	)

Cash flows from financing activities:
Proceeds from issuance of common stock in connection with warrants exercised		—			—			35,722
Payments on long-term debt		—			(9	)		(3,343	)
Proceeds from exercise of stock options		867			428			556
Payments on notes payable to related parties		(151	)		(399	)		(441	)
Proceeds from note receivable from officer		—			—			150

Net cash provided by financing activities		716			20			32,644

Net (decrease) increase in cash and cash equivalents		(1,133	)		(23,541	)		19,537
Cash and cash equivalents, beginning of year		4,899			28,440			8,903

Cash and cash equivalents, end of year	$	3,766		$	4,899		$	28,440

The accompanying notes are an integral part of these consolidated financial statements.

F-5

BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company and Summary of Significant Accounting Policies

Description of Business

BJ’s Restaurants, Inc. (the “Company” or “BJ’s”) was incorporated in California on October 1, 1991. The Company owns and operates 36 restaurants, at the end of fiscal 2004, located in California, Oregon, Colorado, Arizona, Texas and Nevada and licenses one licensed restaurant in Lahaina, Maui. Each of the restaurants is operated as either a BJ’s Restaurant & Brewery, BJ’s Restaurant & Brewhouse, or BJ’s Pizza & Grill. During 2004, the Company opened seven restaurants: BJ’s Restaurant and Breweries in Laguna Hills, California; and BJ’s Restaurant and Brewhouses in Willowbrook and Plano, Texas, Summerlin, Nevada; Fresno, San Bernardino and Folsom California.

As further described elsewhere herein, effective March 15, 2004, the Company sold its remaining three Pietro’s Pizza restaurants and related trademarks to employees of those restaurants, and effective January 3, 2005, the Company closed its Seal Beach pizza & grill restaurant. The Seal Beach restaurant’s lease had expired in February 2004; thereafter it was on a monthly lease.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of BJ’s Restaurants, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions for the reporting period and as of the financial statement date. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Certain reclassifications have been made to prior years’ financial statements to conform to the current year presentation.

Effective July 1, 2002, the Company changed its fiscal year-end from December 31 to the Sunday closest to December 31. The Company’s fiscal year ended January 2, 2005 includes 53 weeks whereby fiscal years ended December 28, 2003 and December 29, 2002 each included 52 weeks. For the purposes of the accompanying consolidated financial statements, the fiscal years ended January 2, 2005, December 28, 2003 and December 29, 2002 are referred to as the fiscal years 2004, 2003 and 2002, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments, money market funds and certificates of deposit with an original maturity of three months or less when purchased. Cash and cash equivalents are stated at cost, which approximates fair market value.

Investments

All investments are classified as held-to-maturity and are reported at amortized cost and realized gains and losses are reflected in earnings.

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Investments consist of the following (in thousands):


	January 2, 2005		December 28, 2003
U.S. and government agency securities	$	204	$	964
International corporate bonds		1,007		—
U.S. corporate notes and bonds		14,564		21,077

Total Investments	$	15,775	$	22,041

Average maturity for the Company’s total investment portfolio as of the end of fiscal year 2004 and 2003 was 3 months and 9 months, respectively.

Inventories

Inventories are comprised primarily of food and beverage products and are stated at the lower of cost (first-in, first-out) or market.

Property and Equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives. Leasehold improvements are amortized over the estimated useful life of an asset or the primary lease term of the respective lease including exercised options, whichever is shorter. Renewals and betterments that materially extend the life of an asset are capitalized while maintenance and repair costs are expensed as incurred. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation and amortization accounts are relieved, and any gain or loss is included in earnings.

Depreciation and amortization are recorded using the straight-line method over the following estimated useful lives:


Furniture and fixtures		7 years
Equipment		5-10 years
Leasehold improvements	the shorter of the useful life or the lease term

Intangible Assets

Management performs impairment testing annually and more frequently if factors and circumstances indicate an impairment may have occurred. Intangible assets with finite lives will continue to be amortized over their estimated useful lives. Management has performed its impairment testing and believes that no impairments exist as of January 2, 2005.

Included in other assets are trademarks and covenants not to compete. Trademarks are amortized over 10 years and covenants not to compete are amortized over periods ranging from 3 to 5 years.

Long-Lived Assets

Management reviews the Company’s long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Management believes that no impairment of the carrying value of the Company’s long-lived assets existed at January 2, 2005 or December 28, 2003.

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revenue Recognition

Revenues from food and beverage sales at restaurants are recognized when payment is tendered at the point of sale. Revenues from the sale of gift cards are deferred and recognized upon redemption. Deferred gift card revenue at January 2, 2005 was $1.2 million and included in accrued expenses on the accompanying balance sheets.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense for fiscal 2004, 2003, and 2002 was approximately $1.1 million, $701,000, and $561,000, respectively.

Income Taxes

The Company utilizes the liability method of accounting for income taxes as set forth in Statement of Financial Accounting Standard (SFAS) No. 109 Accounting for Income Taxes .

Deferred income taxes are recognized based on the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.

Restaurant Opening Expense

Restaurant payroll, supplies and other expenses incurred prior to the opening of a new restaurant are expensed as incurred.

Restaurant Closing (Recovery)

The Company accounts for restaurant closing expense by estimating the costs required to close a restaurant, including its remaining obligation under lease commitments, net of amounts estimated to be received from sub-leasing the restaurant or settling the future commitment with the landlord. All of these computations require estimates, which are subject to change in market conditions. As of January 2, 2005 and December 28, 2003, the Company had a reserve for restaurant closures of $54,000 and $129,000, respectively, which covers the anticipated losses of one restaurant location in Oregon.

No additional restaurant closings are planned as of January 2, 2005; however, long-term changes in real estate markets and local restaurant markets may cause the Company to identify additional restaurants in future years for closure.

Operating Leases

The Company leases restaurants and corporate office space under operating leases. Most lease agreements contain rent holidays and rent escalation clauses and some lease agreements contain tenant improvement allowances. For purposes of recognizing incentives, and minimum rental expenses on a straight-line basis over the terms of the leases, the Company uses the date of initial possession to begin amortization, which is generally when the Company takes possession of the property in order to commence construction of its’ restaurant.

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Previously, the Company began amortizing incentives and minimum rent expenses as of the lease commencement date as defined in its’ lease agreements. The cumulative pre-tax adjustment recorded during fiscal 2004 to correct this error increased preopening expense by $499,000. Of this cumulative amount, the pretax adjustment amount applicable to fiscal 2004 results was $224,000 (or $137,000 after tax), or slightly less than $0.01 per diluted share, The pretax adjustment amount applicable to fiscal years 2003 and prior was $275,000 (or $168,000 after tax), or approximately $0.01 per diluted share.

For tenant improvement allowances and rent holidays, the Company records a deferred rent liability in “Accrued expenses” on the consolidated balance sheets and amortizes the deferred rent over the terms of the leases as reductions to rent expense on the consolidated statements of earnings. Prior to the opening of the restaurant, the Company records the rent expense to “Restaurant Opening Expenses”.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, investments, accounts receivable, and current liabilities approximate fair values due to the short-term maturity of these instruments.

Net Income Per Share

Basic net income per share is computed by dividing the net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the potential dilution that could occur if stock options and warrants issued by the Company to sell common stock at set prices were exercised. The financial statements present basic and diluted net income per share. Common share equivalents included in the diluted computation represent shares issuable upon assumed exercises of outstanding stock options and warrants using the treasury stock method.

The following table presents a reconciliation of basic and diluted earnings per share (EPS) computations and the number of dilutive securities (stock options and warrants) that were included in the dilutive EPS computation (in thousands).


	Fiscal Year
	2004		2003		2002
Numerator:
Net income for basic and diluted earnings per share	$	6,265	$	3,593	$	1,667

Denominator:
Weighted-average shares outstanding—basic		19,498		19,422		17,273
Effect of dilutive common stock options		1,072		1,060		876
Effect of dilutive warrants		—		—		626

Weighted-average shares outstanding—diluted		20,570		20,482		18,775

At January 2, 2005, December 28, 2003 and December 29, 2002 there were approximately 87,000, 190,000, and 242,000 stock options outstanding, respectively, whereby the exercise price exceeded the average common stock market value. The effects of the shares which would be issued upon the exercise of these options and warrants have been excluded from the calculation of diluted earnings per share because they are anti-dilutive.

Stock-based Compensation

The Company accounts for its employee stock options under the intrinsic value method. The exercise price of employee stock options equals the market price of the underlying stock on the date of the grant as such no compensation expense is recorded. The Company has adopted the disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123).

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Had compensation cost for the Company’s options granted been determined based on the fair value of the option at the grant date for the 1996 Stock Option Plan awards in fiscal 2004, 2003, and 2002, consistent with the provisions of SFAS 123, the Company’s net income and net income per share would have been decreased to the pro forma amounts indicated below for the last three fiscal years (in thousands):


	Fiscal Year
	2004			2003			2002
Net income, as reported	$	6,265		$	3,593		$	1,667
Less: Stock-based employee compensation expense, net of related tax effects		(479	)		(366	)		(250	)

Net income, pro forma	$	5,786		$	3,227		$	1,417

Net income per share, as reported:
Basic	$	0.32		$	0.18		$	0.10
Diluted	$	0.30		$	0.18		$	0.09
Net income per share, pro forma:
Basic	$	0.30		$	0.17		$	0.08
Diluted	$	0.28		$	0.16		$	0.08

The fair value of each option grant issued is estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: (a) no dividend yield on the Company’s stock, (b) expected volatility of the Company’s stock ranging from 38.0% to 42.8%, (c) a risk-free interest rate ranging from 2.74% to 3.95% and (d) expected option life of five years. The fair value of options granted during 2004, 2003 and 2002 were $5.48, $4.68 and $3.10 respectively.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to a concentration of credit risk principally consist of cash and cash equivalents and investments. The Company maintains its cash accounts at various banking institutions. At times, cash and cash equivalent balances may be in excess of the FDIC insurance limit.

Recent Accounting Pronouncements

As permitted by Statement 123, the Company currently accounts for share-based payments to employees using APB No.25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of Statement 123(R)’s fair value method will have a significant impact on the Company’s result of operations, although it will have no impact on its overall financial position. The impact of adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had the Company adopted Statement 123(R) in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and earnings per share above. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. While the Company cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), the amount of operating cash flows recognized in prior periods for such excess tax deductions were $479,000, $366,000 and $250,000 in fiscal 2004, 2003 and 2002, respectively.

Statement 123(R) must be adopted no later than the first interim or annual period beginning after June 15, 2005, irrespective of the entity’s fiscal year. Early adoption will be permitted in periods in which financial statements have not yet been issued. The Company expect to adopt Statement 123(R) on July 4, 2005, which is the first day of our fiscal third quarter of 2005.

2. Property and Equipment

Property and equipment consisted of the following (in thousands):


	January 2, 2005			December 28, 2003
Furniture and fixtures	$	5,968		$	3,781
Equipment		20,343			15,914
Leasehold improvements		51,602			36,451

		77,913			56,146
Less accumulated depreciation and amortization		(18,126	)		(13,277	)

		59,787			42,869
Construction in progress		6,702			3,437

	$	66,489		$	46,306

3. Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	January 2, 2005		December 28, 2003
Accrued rent	$	1,988	$	1,151
Payroll related		4,120		2,713
Meal & rest period settlement		900		950
Workers compensation		1,339		722
Deferred revenue from gift cards		1,191		724
Sales taxes		1,083		646
Income tax payable		—		401
Other		1,785		1,226

	$	12,406	$	8,533

4. Debt

Related Party Debt

The Company’s related party debt of $151,000 as of December 28, 2003, consisted of a note payable with a fixed imputed interest rate of 7% and was paid in full in April 2004.

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5. Commitments and Contingencies

Leases

The Company leases its restaurant and office facilities under noncancelable operating leases with remaining terms ranging from approximately 1 to 20 years with renewal options ranging from 5 to 20 years. Rent expense for fiscal 2004, 2003, and 2002 was $7.1 million, $6.1 million, and $4.8 million, respectively.

The Company has certain operating leases, which contain fixed escalation clauses. Rent expense for these leases has been calculated on the straight-line basis over the term of the leases, resulting in deferred rent of approximately $994,000 and $693,000 at January 2, 2005 and December 28, 2003, respectively. The deferred rent will be amortized to rent expense over the life of the leases.

A number of the leases also provide for contingent rentals based on a percentage of sales above a specified minimum. Total contingent rentals, included in rent expense, above the minimum, for fiscal 2004, 2003, and 2002 were approximately $1.7 million, $1.4 million, and $1.1 million, respectively.

Future minimum annual rental payments under noncancelable operating leases are as follows (in thousands):


2005	$	5,635
2006		5,428
2007		5,195
2008		4,994
2009		4,577
Thereafter		37,273

	$	63,102

Additionally, the Company has entered into lease agreements related to the construction of future restaurants with commencement dates subsequent to January 2, 2005. Our aggregate future commitment relating to these leases is $15.7 million.

Legal Proceedings

Restaurants such as those operated by the Company are subject to litigation in the ordinary course of business, most of which the Company expects to be covered by its general liability insurance, subject to certain deductibles and coverage limits. Punitive damages awards and employee unfair practice claims, however, are not covered by the Company’s general liability insurance. To date, the Company has not paid punitive damages with respect to any claims, but there can be no assurance that punitive damages will not be awarded with respect to any future claims, employee unfair practice claims or any other actions. The Company could be affected by the adverse publicity resulting from allegations, regardless of whether or not such allegations are valid or whether we are determined to be liable. The Company believes that the final disposition of any such lawsuits and claims will not have a material adverse effect on its financial positions, results of operations or liquidity.

The following paragraphs describe certain legal actions recently settled or pending:

Labor Related Matters

On March 10, 2003, a former employee of the Company, on behalf of himself and other employees and former employees of ours similarly situated and working in California, filed a class action complaint in the Superior Court of California for the County of Orange against the Company. The complaint alleges that the

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Company violated provisions of the California Labor Code covering meal and rest beaks for employees, along with associated acts of unfair competition and seeks payment of wages for all meal and rest breaks allegedly denied to the Company’s California employees for the period from October 1, 2000 to the present. The Company has reached an agreement with the class counsel to settle the meal and rest break class action case pending in California, and the settlement has been approved by the court. The amount of the settlement was developed from mediation, which was concluded in December of 2003. Accordingly, the Company recorded $950,000 in other expense during the fourth quarter of 2003 to reflect this liability at December 28, 2003. The amount of the settlement was reduced to $900,000 based upon subsequent court determination and the $50,000 reversal was reflected in the second quarter ended June 27, 2004. On January 3, 2005, the settlement was paid in full.

On February 5, 2004, another former employee of the Company, on behalf of herself, and all others similarly situated, filed a class action complaint in Los Angeles County Superior Court, alleging causes of action for: (1) failure to pay reporting time minimum pay; (2) failure to allow meal breaks; (3) failure to allow rest breaks; (4) waiting time penalties; (5) civil penalties; (6) reimbursement for fraud and deceit; (7) punitive damages for fraud and deceit; and (8) disgorgement of illicit profits. On June 28, 2004, the Plaintiff stipulated to dismiss her second, third, fourth, and fifth causes of action. During September 2004, the Plaintiff stipulated to arbitration of the action. No further court action has been taken since that date. The outcome of this matter cannot be ascertained at this time.

Letters of Credit

The Company has irrevocable standby letters of credit outstanding as required under the Company’s workers’ compensation policy that total $1.4 million as of January 2, 2005. All three of the letters of credit expire on October 31, 2005. At January 2, 2005, there were no drawdowns of funds under these letters of credit.

6. Shareholders’ Equity

Preferred Stock

The Company is authorized to issue five million shares in one or more series of preferred stock and to determine the rights, preferences, privileges and restrictions to be granted to, or imposed upon, any such series, including the voting rights, redemption provisions (including sinking fund provisions), dividend rights, dividend rates, liquidation rates, liquidation preferences, conversion rights and the description and number of shares constituting any wholly unissued series of preferred stock. No shares of preferred stock were issued or outstanding at January 2, 2005 or December 28, 2003. The Company currently has no plans to issue shares of preferred stock.

Common Stock

Shareholders of the Company’s outstanding common stock are entitled to receive dividends if and when declared by the Board of Directors. Shareholders are entitled to one vote for each share of common stock held of record. Pursuant to the requirements of California law, shareholders are entitled to accumulate votes in connection with the election of directors.

Capital Surplus

The Company issued Redeemable Warrants with the Company’s initial public offering on October 15, 1996. At December 29, 2002, the Company had approximately 7.9 million Redeemable Warrants outstanding. Each redeemable warrant entitled the holder thereof to purchase, previously, one share of Common Stock at a price of 110% of the initial public offering price per share ($5.50), subject to adjustment in accordance with the anti-dilution

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

and other provisions referred to below. The private placements of 4.0 million shares of common stock to Jacmar in 2001 triggered the anti-dilution provision of the warrant agreement, resulting in an adjustment of the exercise price of the warrants to $4.89 per share. All of the Redeemable Warrants were exercised or expired on April 8, 2002.

During 2002, approximately 7.3 million redeemable warrants and approximately 188,000 stock options were exercised providing approximately $36.3 million in cash proceeds to the Company, net of approximately $229,000 of related costs.

The Company had approximately 180,000 representative’s warrants outstanding with an exercise price of $4.82 per share (after adjustment for anti-dilution) expiring on October 8, 2002. On October 8, 2002, an authorized officer of The Boston Group, L.P., the registered holder of the warrants, presented an exercise of all the warrants using the cashless method of exercise provided for in the warrants. Following the date of exercise of the warrants, the Company received notice that a trustee for the bankruptcy estate of the sole authorized officer of The Boston Group, L.P., had assumed all authority from the authorized officer. The Company requested that the trustee provide a court order for delivery of the share certificates representing the warrants exercised. Pursuant to a court order dated May 1, 2003, the Company issued 65,238 shares to the purchaser of the rights to the warrants in a foreclosure sale.

7. Income Taxes

The provision for income tax consists of the following for the last three fiscal years (in thousands):


	Fiscal Year
	2004		2003			2002
Current:
Federal	$	747	$	1,867		$	419
State		587		455			177

		1,334		2,322			596
Deferred:
Federal		900		(478	)		271
State		52		—			13

		952		(478	)		284

Provision for income taxes	$	2,286	$	1,844		$	880

The provision for income taxes differs from the amount that would result from applying the federal statutory rate as follows for the last three fiscal years:


	Fiscal Year
	2004		2003		2002
Income tax at statutory rates	34.0	%	34.0	%	34.0	%
Non-deductible expenses	0.2		0.2		0.1
State income taxes, net of federal benefit	4.9		5.5		5.7
Change in valuation allowance	(3.5	)	—		—
Income tax credits	(5.5	)	(7.1	)	(7.0	)
Reduction of estimated tax liabilities	(2.4	)	—		—
Other, net	(1.0	)	1.3		1.8

	26.7	%	33.9	%	34.6	%

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of the deferred income tax asset (liability) consist of the following (in thousands):


	January 2, 2005			December 28, 2003
Property and equipment	$	(1,959	)	$	(394	)
Goodwill		(1,036	)		(920	)
Accrued expense and other liabilities		1,919			1,489
Income tax credits		1,817			1,399
Other		(661	)		(244	)

		80			1,330
Valuation allowance		—			(298	)

Net deferred income taxes	$	80		$	1,032

During fiscal 2004, the Company determined that the federal income tax credits carryforward will be utilized based on increased earnings, future projections and the fiscal 2003 tax returns filed. As such, the Company eliminated the valuation allowance in the fourth quarter of fiscal 2004 by reducing the tax provision.

At January 2, 2005, the Company has federal income tax credit carryforwards of approximately $1.8 million, consisting primarily of the credit for FICA taxes paid on reported employee tip income. The FICA tax credits will begin to expire in 2021.

The Company has deferred tax assets that are subject to periodic recoverability assessments. The Company believes that it is more likely than not that the net deferred tax asset will be realized. Accordingly, no valuation allowance was recorded at January 2, 2005.

During fiscal 2001, the Company’s determined that utilization of federal income tax credit carryforwards may be subject to an annual limitation against taxable income in the current and future periods. This annual limitation could limit the utilization of primarily tip credit carryforwards due to the computations required under the alternative minimum tax calculation. As a result of the annual limitation, a portion of these credit carryforwards were estimated to expire before ultimately becoming available to reduce future income tax liabilities. Accordingly, in fiscal 2001, the Company provided a valuation allowance of approximately $298,000 against a portion of the credit carryforwards due to the uncertainties surrounding their realization.

8. Supplemental Cash Flow Information

Supplemental cash flow items consisted of the following for the last three fiscal years (in thousands):


	Fiscal Year
	2004		2003		2002
Cash paid for:
Interest	$	2	$	21	$	264
Income taxes	$	2,876	$	1,220	$	711

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9. 1996 Stock Option Plan

The Company adopted the 1996 Stock Option Plan as of August 7, 1996 which provided for the granting of options to purchase up to 600,000 shares of common stock. The Plan was amended on September 28, 1999 and June 19, 2003, increasing the total number of shares under the plan to 2.2 million. The 1996 Stock Option Plan provides for the options issued to be either incentive stock options or non-statutory stock options as defined under Section 422A of the Internal Revenue Code. The exercise price of the shares under the option shall be equal to or exceed 100% of the fair market value of the shares at the date of option grant. The 1996 Stock Option Plan expires on June 19, 2013 unless terminated earlier. The options generally vest over a three to five-year period. Stock options granted pursuant to employment agreements with two of the Company’s officers provided for the grant of options to purchase up to 661,000 shares of common stock.


	Options Outstanding				Options Exercisable
	Shares (in thousands)		Weighted Average Exercise Price		Shares (in thousands)	Weighted Average Exercise Price
Outstanding options at December 31, 2001	1,575		$	3.04	1,229	$	2.90
Granted	445			6.87
Exercised	(188	)		3.04
Forfeited	(20	)		4.17

Outstanding options at December 29, 2002	1,812			3.96	1,209		2.90
Granted	258			10.39
Exercised	(334	)		3.73
Forfeited	(10	)		8.35

Outstanding options at December 28, 2003	1,726			4.95	1,078		3.09
Granted	297			13.58
Exercised	(164	)		5.28
Forfeited	(64	)		7.64

Outstanding options at January 2, 2005	1,795		$	6.25	1,109	$	3.55

Information relating to significant option groups outstanding at January 2, 2005 are as follows (shares in thousands):


	Options Outstanding				Options Exercisable
Range of Exercise Prices	Amount Outstanding as of January 2, 2005	Weighted Average Remaining Life (Yr.)	Weighted Average Exercise Price		Amount Exercisable as of January 2, 2005	Weighted Average Exercise Price
$14.03 - $15.09	137	9.62	$	14.56	—	$	—
$12.59 - $13.57	102	9.20	$	13.12	—	$	—
$10.00 - $11.99	260	8.64	$	11.18	42	$	10.98
$8.31 - $9.20	95	7.72	$	8.70	32	$	8.78
$6.98 - $7.51	108	7.34	$	7.31	72	$	7.22
$4.55 - $5.76	164	7.07	$	5.12	34	$	4.57
$1.55 - $3.65	929	5.63	$	2.72	929	$	2.72

$1.55 - $15.09	1,795	6.92	$	6.25	1,109	$	3.55

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BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. Employee Benefit Plan

The Company maintains a voluntary, contributory 401(k) plan for all eligible employees. Employees may elect to contribute up to 15% of their earnings, up to a maximum of $13,000, to the plan each year. Employee contributions are matched by the Company at a rate of 33% for the first $6,000 of deferred income. Contributions by the Company were approximately $76,000, $61,000 and $61,000 in fiscal 2004, 2003 and 2002, respectively.

11. Restaurant Closing Expense

On December 31, 2002, the Company sold its Pietro’s restaurant in Portland, Oregon. This sale yielded no gain after recording a reserve of $23,000 for the Company’s guarantee of the lease liability, which extends through a portion of 2005.

In the fourth quarter of 2003, the successor tenant at a restaurant location that was sold in 2002 became delinquent in rent payments. The landlord sought relief under the Company’s guaranty of the lease liability. In February 2004, the landlord released the Company from any additional liability in exchange for a cash payment of approximately $55,000.

At December 28, 2003, the balance of the Company’s restaurant closing reserve, which included $55,000 in current liabilities and $74,000 in long-term liabilities, was for the lease liability related to the Company’s Oregon restaurant and the remaining lease liability related to the Company’s restaurant that was sold in 2001.

In February 2004, the Company executed an agreement to sell its three Pietro’s restaurants effective on March 15, 2004, resulting in a $1.7 million pre-tax gain. The buyers, formerly employees, purchased the restaurant assets and related trademarks for the Pietro’s brand. The $2.2 million sales price includes cash proceeds of $1.3 million and two notes receivable from the buyers totaling $950,000, with terms of five and ten years. The ten-year note is in the amount of $700,000, bears interest at prime plus one percent with a minimum interest rate of 5% and a maximum interest rate of 7% and requires fixed monthly payments of principal and interest over the ten-year term. The five-year note is in the amount of $250,000, bears interest at prime plus one percent and requires fixed monthly payments of principal and interest over the five-year term. Our notes are subordinated to the buyer’s SBA loan. Principal payments to the Company on both notes were prohibited for the fist six months by the buyer’s SBA loan.

During 2004, the Company’s restaurant closure reserve was reduced by $75,000, of which $55,000 was utilized to pay the landlord in connection with the release of lease liability mentioned above. Additionally, $18,000 was recorded as a reduction in restaurant closure expense primarily due to more favorable lease settlements than anticipated. At January 2, 2005, the balance of the Company’s reserve was for the remaining lease liability related to the Company’s restaurant that was sold in 2001.

On January 3, 2005, the Company closed its Seal Beach pizza & grill restaurant which was on a monthly lease since February 2004. The Company recorded a fixed asset write-down of $38,000 related to this closure.

12. Related Party Transactions

As of January 2, 2005, Jacmar Companies and their affiliates (collectively referred to herein as “Jacmar”) owned approximately 41.3% of the Company’s outstanding common stock.

F-17

BJ’S RESTAURANTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Jacmar, through its specialty wholesale food distributorship, is the Company’s largest supplier of food, beverage and paper products. Jacmar sells products to the Company at prices comparable to those offered by unrelated third parties. Jacmar supplied the Company with approximately $19.3 million, $14.6 million and $11.5 million of food, beverage and paper products for the 2004, 2003 and 2002 fiscal years, respectively, respectively 57.1%, 53.5% and 60.0% of our total costs for these products. The Company had trade payables related to these products of approximately $2.2 million and $1.1 million at fiscal year 2004 and 2003, respectively.

13. Selected Consolidated Quarterly Financial Data (Unaudited)

Summarized unaudited consolidated quarterly financial data for the Company is as follows (in thousands, except per share data):


	March 28, 2004		June 27, 2004		September 26, 2004		January 2, 2005
Total revenues	$	28,977	$	29,315	$	32,867	$	37,890
Income from operations	$	3,410	$	1,935	$	1,600	$	1,020
Net income	$	2,376	$	1,403	$	1,203	$	1,283
Diluted net income per share	$	0.12	$	0.07	$	0.06	$	0.06

	March 30, 2003		June 29, 2003		September 28, 2003		December 28, 2003
Total revenues	$	23,795	$	25,412	$	26,744	$	27,008
Income from operations	$	1,013	$	1,444	$	1,306	$	1,526
Net income	$	828	$	1,078	$	968	$	719
Diluted net income per share	$	0.04	$	0.05	$	0.05	$	0.03

Diluted net income pre share calculations for each quarter are based on the weighted average diluted shares outstanding for that quarter and may not total to the full year amount.

14. Subsequent Events

On March 10, 2005, the Company completed a $42.6 million (less approximately $2.2 million in commissions) private placement of common stock with three large institutional investors. The transaction involved the sale of 2.75 million shares of common stock at a purchase price of $15.50 per share. The Company intends to use the net proceeds from the placement to fund its restaurant expansion plan and for other general corporate purposes.

F-18

EXHIBIT 3.3


		ENDORSED - FILED
		In the office of the Secretary of State
		of the State of California

		AUG ^– 3 2004

		KEVIN SHELLEY
		Secretary of State

CERTIFICATE OF AMENDMENT OF

ARTICLES OF INCORPORATION

CHICAGO PIZZA & BREWERY, INC.

Jeremiah T. Hennessy and Paul A. Motenko certify that:

1.	They are the President and Secretary, respectively of Chicago Pizza & Brewery, Inc., a California corporation.

2.	Article I of the Articles of Incorporation of this corporation is amended to read as follows:

“I

The name of this corporation is: BJ’s Restaurants, Inc.”

3.	The foregoing amendment has been approved by the Board of Directors of said corporation.

The foregoing amendment of articles of incorporation has been duly approved by the required vote of shareholders in accordance with Section 902 of the Corporations Code. The total number of outstanding shares of corporation is 19,461,953. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50%.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

Executed at Huntington Beach, California, on August 2, 2004.

/ S / J EREMIAH T. H ENNESSY

Jeremiah T. Hennessy, President

/ S / P AUL A. M OTENKO

Paul A. Motenko, Secretary

[OFFICE OF THE SECRETARY OF STATE]

EXHIBIT 3.4

AMENDMENT TO BYLAWS

BJ’s RESTAURANTS, INC.

a California corporation

Article III, Section 2 of the Bylaws of BJ’s RESTAURANTS, INC. is hereby amended to read as follows:

“ Section 2 . Number and Qualification of Directors. The number of directors of the corporation shall not be less than seven (7) nor more than thirteen (13). The exact number of directors shall be ten (10) until changed, within the limits specified above, by a resolution amending this Section 2, duly adopted by the board of directors or by the shareholders. The indefinite number of directors may be changed, or a definite number fixed without provision for an indefinite number, by a duly adopted amendment to the articles of incorporation or by an amendment to this bylaw duly adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote; provided, however, that an amendment reducing the number or the minimum number of directors to a number less than five (5) cannot be adopted if the votes cast against its adoption at a meeting of the shareholders, or the shares not consenting in the case of action by written consent, are equal to more than sixteen and two-thirds percent (16 ² / 3 %) of the outstanding shares entitled to vote. No amendment may change the stated maximum number of authorized directors to a number greater than two (2) times the stated minimum number of directors minus one (1).”

This amendment was approved by the Board of Directors by resolution at a meeting held August 31, 2004, and by written consent of a majority of shareholders of the Company as of September 27, 2004. This amendment became effective 20 days after mailing of an information statement to the shareholders of the Company on November 4, 2004.

IN WITNESS WHEREOF, BJ’s Restaurants, Inc. has caused this amendment the Bylaws to be executed as of November 4, 2004 by its duly authorized officer.


BJ’s R ESTAURANTS , I NC .

By		/ S / P AUL A. M OTENKO
		Paul A. Motenko, Chairman of the Board, Co-Chief Executive Officer, Vice President and Secretary

EXHIBIT 10.4

BJ’S RESTAURANTS, INC.

1996 STOCK OPTION PLAN

TABLE OF CONTENTS


		Page

1.	Purpose	1

2.	Incentive and Non-Qualified Stock Options	1

3.	Definitions	1

	3.1 Board	1

	3.2 Code	1

	3.3 Common Stock	1

	3.4 Company	1

	3.5 Consultant	1

	3.6 Disabled or Disability	1

	3.7 Fair Market Value	2

	3.8 Incentive Stock Option	2

	3.9 Non-Qualified Stock Option	2

	3.10 Optionee	2

	3.11 Plan	2

	3.12 Plan Administrator	2

	3.13 Stock Option or Option	2

4.	Administration	2

	4.1 Administration by Board	2

	4.2 Administration by Committee	3

5.	Eligibility	4

6.	Shares Subject to Options	4

7.	Terms and Conditions of Options	4

	7.1 Number of Shares Subject to Option	4

	7.2 Option Price	4

	7.3 Notice and Payment	4

	7.4 Term of Option	5

	7.5 Exercise of Option	6

	7.6 No Transfer of Option	6

	7.7 Limit on Incentive Stock Options	6

TABLE OF CONTENTS

(CONTINUED)


		Page

	7.8 Restriction on Issuance of Shares	6

	7.9 Investment Representation	7

	7.10 Rights as a Shareholder or Employee	7

	7.11 No Fractional Shares	7

	7.12 Exercisability in the Event of Death	7

	7.13 Recapitalization or Reorganization of Company	7

	7.14 Modification, Extension, and Renewal of Options	8

	7.15 Other Provisions	8

	7.16 Non-Employee Directors	8

8.	Termination or Amendment of the Plan	10

9.	Indemnification	10

10.	Effective Date and Term of Plan	10

BJ’S RESTAURANTS, INC.

AMENDED AND RESTATED

1996 STOCK OPTION PLAN

1. Purpose . The purpose of this Amended and Restated 1996 Stock Option Plan (“Plan”) is to further the growth and development of BJ’s Restaurants, Inc. (“Company”) by providing, through ownership of stock of the Company, an incentive to directors, officers, outside consultants and other key employees who are in a position to contribute materially to the prosperity of the Company, to increase such persons’ interests in the Company’s welfare, to encourage them to continue their services to the Company or its subsidiaries, and to attract individuals of outstanding ability to render services to and enter the employment of the Company or its subsidiaries. This Plan became effective on the Effective Date (as provided in Section 10) and was amended and restated as of September , 2004 to reflect (a) the change in the name of the Company from Chicago Pizza & Brewery, Inc. to BJ’s Restaurants, Inc., effective as of August , 2004; (b) amendments to Section 7.5 and 7.16(a) of the Plan adopted by the Board of Directors as of September , 2004; and (c) the cumulative changes made pursuant to the following prior amendments: (1) Amendment No. One, adopted July 21, 1999, restating Sections 6 and 10 of the Plan; (2) Amendment No. Two, adopted September , 2001, restating Sections 7.5, 7.6, 7.16(b) and 7.16(c) and adding Section 17.17; and (3) Amendment No. 3, adopted July , 2002, restating Section 7.16(a). This Plan shall apply to options granted on or after the Effective Date. This Plan replaces in its entirety the Chicago Pizza Stock 1996 Stock Option Plan, as amended by the Amendments referred to herein.

2. Incentive and Non-Qualified Stock Options . Two types of Stock Options (referred to herein as “Options” without distinction between such two types) may be granted under the Plan: Options intended to qualify as Incentive Stock Options under Section 422 of the Code and Non-Qualified Stock Options not specifically authorized or qualified for favorable income tax treatment by the Code.

3. Definitions . The following definitions are applicable to the Plan:

3.1 Board . The Board of Directors of the Company.

3.2 Code . The Internal Revenue Code of 1986, as amended from time to time.

3.3 Common Stock . The shares of Common Stock of the Company.

3.4 Company . BJ’s Restaurants, Inc., a California corporation.

3.5 Consultant . An individual or entity that renders professional services to the Company as an independent contractor and is not an employee or under the direct supervision and control of the Company.

3.6 Disabled or Disability . For the purposes of Section 7.4, a disability of the type defined in Section 22(e)(3) of the Code. The determination of whether an individual is Disabled or has a Disability is determined under procedures established by the Plan Administrator for purposes of the Plan.

3.7 Fair Market Value . For purposes of the Plan, the “fair market value” per share of Common Stock of the Company at any date shall be (a) if the Common Stock is listed on an established stock exchange or exchanges or the Nasdaq National Market, the closing price per share on the last trading day immediately preceding such date on the principal exchange on which it is traded or as reported by Nasdaq, or (b) if the Common Stock is not then listed on an exchange or the Nasdaq National Market, but is quoted on the Nasdaq Small Cap Market, the Nasdaq electronic bulletin board or the National Quotation Bureau pink sheets, the average of the closing bid and asked prices per share for the Common Stock as quoted by Nasdaq or the National Quotation Bureau, as the case may be, on last trading day immediately preceding such date, or (c) if the Common Stock is not then listed on an exchange or the Nasdaq National Market, or quoted by Nasdaq or the National Quotation Bureau, an amount determined in good faith by the Plan Administrator. Notwithstanding the foregoing, the “fair market value” per share of common stock subject to any Option that is granted under this Plan on the date the Company’s initial public offering is declared effective by the Securities and Exchange Commission shall be the “Price to Public” specified in the final Prospectus distributed in connection with the public offering of the Company Common Stock.

3.8 Incentive Stock Option . Any Stock Option intended to be and designated as an “incentive stock option” within the meaning of Section 422 of the Code.

3.9 Non-Qualified Stock Option . Any Stock Option that is not an Incentive Stock Option.

3.10 Optionee . The recipient of a Stock Option.

3.11 Plan . This BJ’s Restaurants, Inc. 1996 Stock Option Plan, as amended from time to time.

3.12 Plan Administrator . The Board or the Committee designated pursuant to Section 4 to administer, construe and interpret the terms of the Plan.

3.13 Stock Option or Option . Any option to purchase shares of Common Stock granted pursuant to Section 7.

4. Administration .

4.1 Administration by Board . Subject to Section 4.2 hereof, the Plan Administrator shall be the Board of Directors of the Company (the “Board”) during such periods of time as all members of the Board are both “disinterested persons” as defined in Rule 16b-3(c)(2)(i) promulgated by the Securities and Exchange Commission (a “disinterested person”) and “outside directors” as defined in Prop. Treas. Regs. §1.162-27(e)(3) (“outside directors”). Anything to the contrary notwithstanding, the requirement that all members of the Board be disinterested persons and outside directors shall not apply for any period of time prior to the date the Company’s Common Stock becomes registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended and, effective on and after August 15, 1996, the requirement that all members of the Board be disinterested persons shall not apply. Subject to the provisions of the Plan, the Plan

Administrator shall have authority to construe and interpret the Plan, to promulgate, amend, and rescind rules and regulations relating to its administration, from time to time to select from among the eligible employees and non-employee consultants (as determined pursuant to Section 5) of the Company and its subsidiaries those employees and consultants to whom Stock Options will be granted, to determine the timing and manner of the grant of the Options, to determine the exercise price, the number of shares covered by and all of the terms of the Stock Options, to determine the duration and purpose of leaves of absence which may be granted to Stock Option holders without constituting termination of their employment for purposes of the Plan, and to make all of the determinations necessary or advisable for administration of the Plan. Prior to August 15, 1996, the Board shall have no discretion with respect to the selection of non-employee directors to receive options under the Plan, the number of shares of stock subject to any such options, or the purchase price thereof. The interpretation and construction by the Plan Administrator of any provision of the Plan, or of any agreement issued and executed under the Plan, shall be final and binding upon all parties. No member of the Board shall be liable for any action or determination undertaken or made in good faith with respect to the Plan or any agreement executed pursuant to the Plan.

4.2 Administration by Committee . The Board may, in its sole discretion, delegate any or all of its duties as Plan Administrator and, subject to the provisions of Section 4.1 of the Plan, at any time the Board includes any person who is not a disinterested person and an outside director, the Board shall delegate all of its duties as Plan Administrator during such period of time to the Stock Option and Retirement Plans Committee (the “Committee”) of not fewer than two (2) members of the Board, all of the members of which Committee shall be persons who, in the opinion of counsel to the Company, are disinterested persons and outside directors, to be appointed by and serve at the pleasure of the Board. Effective on and after August 15, 1996, the requirement that Committee members be disinterested persons shall not apply and all of the members of the Committee shall be persons who, in the opinion of counsel to the Company, are outside directors and “non-employee directors” within the meaning of Rule 16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission. From time to time, the Board may increase or decrease (to not less than two members) the size of the Committee, and add additional members to, or remove members from, the Committee. The Committee shall act pursuant to a majority vote, or the written consent of a majority of its members, and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the provisions of the Plan and the directions of the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may deem advisable. No member of the Committee shall be liable for any action or determination undertaken or made in good faith with respect to the Plan or any agreement executed pursuant to the Plan.

5. Eligibility . Any employee or director (including any officer or director who is an employee) of the Company or any of its subsidiaries shall be eligible to receive an Option under the Plan; provided, however, that no person who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its parent or subsidiary corporations shall be eligible to receive an Incentive Stock Option under the Plan unless at the time such Incentive Stock Option is granted the Option price (determined in the manner provided in Section 7.2) is at least 110% of the fair market value of the shares subject to the Option and such Option by its terms is not exercisable after the expiration of five years from the date such Option is granted. An employee may receive more than one Option under the Plan. Non-Employee Directors shall be eligible to receive Non-Qualified Stock Options pursuant to the terms and conditions of Section 7.16. In addition, Non-Qualified Stock Options may be granted to Consultants who are selected by the Plan Administrator.

6. Shares Subject to Options . The stock available for grant of Options under the Plan shall be shares of the Company’s authorized but unissued, or reacquired, Common Stock. The aggregate number of shares which may be issued pursuant to exercise of Options granted under the Plan, as amended, shall not exceed 1,200,000 shares of Common Stock (subject to adjustment as provided in Section 7.13), including shares previously issued under the Plan. The maximum number of shares for which an Option may be granted to any Optionee during any calendar year shall not exceed 500,000 shares. In the event that any outstanding Option under the Plan for any reason expires or is terminated, the shares of Common Stock allocable to the unexercised portion of the Option shall again be available for Options under the Plan as if no Option had been granted with respect to such shares.

7. Terms and Conditions of Options . Options granted under the Plan shall be evidenced by agreements (which need not be identical) in such form and containing such provisions which are consistent with the Plan as the Plan Administrator shall from time to time approve. Such agreements may incorporate all or any of the terms hereof by reference and shall comply with and be subject to the following terms and conditions:

7.1 Number of Shares Subject to Option . Each Option agreement shall specify the number of shares subject to the Option.

7.2 Option Price . The purchase price for the shares subject to any Option shall be determined by the Plan Administrator at the time of grant, but shall not be less than 85% of Fair Market Value per share. Anything to the contrary notwithstanding, the purchase price for the shares subject to any Incentive Stock Option shall not be less than 100% of the Fair Market Value of the shares of Common Stock of the Company on the date the Stock Option is granted. In the case of any Option granted to an employee who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its parent or subsidiary corporations, the Option price shall not be less than 110% of the fair market value per share of the Common Stock of the Company on the date the Option is granted. For purposes of determining the stock ownership of an employee, the attribution rules of Code Section 424(d) shall apply.

7.3 Notice and Payment . Any exercisable portion of a Stock Option may be exercised only by:

(a) delivery of a written notice to the Company, prior to the time when such Stock Option becomes unexercisable under Section 7.4, stating the number of shares being purchased and complying with all applicable rules established by the Plan Administrator;

(b) payment in full of the exercise price of such Option by, as applicable, delivery of (i) cash or check for an amount equal to the aggregate Stock Option exercise price for the number of shares being purchased, (ii) in the discretion of the Plan Administrator, upon such terms as the Plan Administrator shall approve, a copy of instructions to a broker directing such broker to sell the Common Stock for which such Option is exercised, and to remit to the Company the aggregate exercise price of such Stock Option (a “cashless exercise”), or (iii) in the discretion of the Plan Administrator, upon such terms as the Plan Administrator shall approve, shares of the Company’s Common Stock owned by the Optionee, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the aggregate purchase price of the shares with respect to which such Stock Option or portion is thereby exercised (a “stock-for-stock exercise”);

(c) payment of the amount of tax required to be withheld (if any) by the Company or any parent or subsidiary corporation as a result of the exercise of a Stock Option. At the discretion of the Plan Administrator, upon such terms as the Plan Administrator shall approve, the Optionee may pay all or a portion of the tax withholding by (i) cash or check payable to the Company, (ii) cashless exercise, (iii) stock-for-stock exercise, or (iv) a combination of one or more of the foregoing payment methods; and

(d) delivery of a written notice to the Company requesting that the Company direct the transfer agent to issue to the Optionee (or to his designee) a certificate for the number of shares of Common Stock for which the Option was exercised or, in the case of a cashless exercise, for any shares that were not sold in the cashless exercise.

Notwithstanding the foregoing, the Company, in its sole discretion, may extend and maintain, or arrange for the extension and maintenance of, credit to any Optionee to finance the Optionee’s purchase of shares pursuant to exercise of any Stock Option, on such terms as may be approved by the Plan Administrator, subject to applicable regulations of the Federal Reserve Board and any other laws or regulations in effect at the time such credit is extended.

7.4 Term of Option . No Option shall be exercisable after the expiration of the earliest of (a) ten years after the date the Option is granted, (b) three months after the date the Optionee’s employment with the Company and its subsidiaries terminates, or a Non-Employee Director or Consultant ceases to provide services to the Company, if such termination or cessation is for any reason other than Disability or death, (c) one year after the date the Optionee’s employment with the Company and its subsidiaries terminates, or a Non-Employee Director or Consultant ceases to provide services to the Company, if such termination or cessation is a result of death or Disability; provided, however, that the Option agreement for any Option may provide for shorter periods in each of the foregoing instances. In the case of an Incentive Stock Option granted to an employee

who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its parent or subsidiary corporations, the term set forth in (a), above, shall not be more than five years after the date the Option is granted.

7.5 Exercise of Option . No Option shall be exercisable during the lifetime of an Optionee by any person other than the Optionee or (for periods prior to August 15, 1996) in the event the Company’s Common Stock becomes registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, at any time prior to six months from the date the Option is granted. Subject to the foregoing, the Plan Administrator shall have the power to set the time or times within which each Option shall be exercisable. Unless otherwise provided by the Plan Administrator, each Option granted under the Plan shall become exercisable on a cumulative basis as to one-third (1/3) of the total number of shares covered thereby on or after the two year anniversary date of the date the Option is granted and an additional one-third (1/3) of such total number of shares on or after the f each consecutive anniversary date thereafter until the Option has become exercisable as to all of such total number of shares. To the extent that an Optionee has the right to exercise an Option and purchase shares pursuant thereto, the Option may be exercised from time to time by written notice to the Company, stating the number of shares being purchased and accompanied by payment in full of the exercise price for such shares.

7.6 No Transfer of Option . No Option shall be transferable by an Optionee otherwise than by will, by the laws of descent and distribution, by instrument to an inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor (settlor), or by gift to “immediate family” as that term is defined in Title 17, Section 240.16a-1(e) of the Code of Federal Regulations.

7.7 Limit on Incentive Stock Options . The aggregate fair market value (determined at the time the Option is granted) of the stock with respect to which Incentive Stock Options granted after 1986 are exercisable for the first time by an Optionee during any calendar year (under all Incentive Stock Option plans of the Company and its subsidiaries) shall not exceed $100,000. To the extent that the aggregate Fair Market Value (determined at the time of the Stock Option is granted) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year (under all Incentive Stock Option plans of the Company and any parent or subsidiary corporations) exceeds $100,000, such Stock Options shall be treated as Non-Qualified Stock Options. The determination of which Stock Options shall be treated as Non-Qualified Stock Options shall be made by taking Stock Options into account in the order in which they were granted.

7.8 Restriction on Issuance of Shares . The issuance of Options and shares shall be subject to compliance with all of the applicable requirements of law with respect to the issuance and sale of securities, including, without limitation, any required qualification under the California Corporate Securities Law of 1968, as amended, or other state securities laws. If an Optionee acquires shares of Common Stock pursuant to the exercise of an Option, the Plan Administrator, in its sole discretion, may require as a condition of issuance of shares covered by the Option that the shares of Common Stock

shall be subject to restrictions on transfer. The Company may place a legend on the certificates evidencing the shares, reflecting the fact that they are subject to restrictions on transfer pursuant to the terms of this Section. In addition, the Optionee may be required to execute a buy-sell agreement in favor of the Company or its designee with respect to all or any of the shares so acquired. In such event, the terms of such agreement shall apply to such shares.

7.9 Investment Representation . Any Optionee may be required, as a condition of issuance of shares covered by his or her Option, to represent that the shares to be acquired pursuant to exercise of the Option will be acquired for investment and without a view to distribution thereof; and in such case, the Company may place a legend on the certificate evidencing the shares reflecting the fact that they were acquired for investment and cannot be sold or transferred unless registered under the Securities Act of 1933, as amended, or unless counsel for the Company is satisfied that the circumstances of the proposed transfer do not require such registration.

7.10 Rights as a Shareholder or Employee . An Optionee or transferee of an Option shall have no right as a stockholder of the Company with respect to any shares covered by any Option until the date of the issuance of a share certificate for such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether cash, securities, or other property) or distributions or other rights for which the record date is prior to the date such share certificate is issued, except as provided in Section 7.13. Nothing in the Plan or in any Option agreement shall confer upon any employee any right to continue in the employ of the Company or any of its subsidiaries or interfere in any way with any right of the Company or any subsidiary to terminate the Optionee’s employment at any time.

7.11 No Fractional Shares . In no event shall the Company be required to issue fractional shares upon the exercise of an Option.

7.12 Exercisability in the Event of Death . In the event of the death of the Optionee, any Option or unexercised portion thereof granted to the Optionee, to the extent exercisable by him or her on the date of death, may be exercised by the Optionee’s personal representatives, heirs, or legatees subject to the provisions of Section 7.4 hereof.

7.13 Recapitalization or Reorganization of Company . Except as otherwise provided herein, appropriate and proportionate adjustments shall be made in the number and class of shares subject to the Plan and to the Option rights granted under the Plan, and the exercise price of such Option rights, in the event that the number of shares of Common Stock of the Company are increased or decreased as a result of a stock dividend (but only on Common Stock), stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, separation, or like change in the corporate or capital structure of the Company. In the event there shall be any other change in the number or kind of the outstanding shares of Common Stock of the Company, or any stock or other securities into which such common stock shall have been changed, or for which it shall have been exchanged, whether by reason of a complete liquidation of the Company or a merger, reorganization, or consolidation of the Company with any other corporation in which the

Company is not the surviving corporation or the Company becomes a wholly-owned subsidiary of another corporation, then if the Plan Administrator shall, in its sole discretion, determine that such change equitably requires an adjustment to shares of Common Stock currently subject to Options under the Plan, or to prices or terms of outstanding Options, such adjustment shall be made in accordance with such determination.

To the extent that the foregoing adjustments relate to stock or securities of the Company, such adjustments shall be made by the Plan Administrator, the determination of which in that respect shall be final, binding, and conclusive. No right to purchase fractional shares shall result from any adjustment of Options pursuant to this Section. In case of any such adjustment, the shares subject to the option shall be rounded down to the nearest whole share. Notice of any adjustment shall be given by the Company to each Optionee whose Options shall have been so adjusted and such adjustment (whether or not notice is given) shall be effective and binding for all purposes of the Plan.

In the event of a complete liquidation of the Company or a merger, reorganization, or consolidation of the Company with any other corporation in which the Company is not the surviving corporation or the Company becomes a wholly-owned subsidiary of another corporation, any unexercised Options theretofore granted under the Plan shall be deemed cancelled unless the surviving corporation in any such merger, reorganization, or consolidation elects to assume the Options under the Plan or to issue substitute Options in place thereof; provided, however, that, notwithstanding the foregoing, if such Options would be cancelled in accordance with the foregoing, the Optionee shall have the right, exercisable during a ten-day period ending on the fifth day prior to such liquidation, merger, or consolidation, to exercise such Option in whole or in part without regard to any installment exercise provisions in the Option agreement.

7.14 Modification, Extension, and Renewal of Options . Subject to the terms and conditions and within the limitations of the Plan, the Plan Administrator may modify, extend, or renew outstanding Options granted under the Plan and accept the surrender of outstanding Options (to the extent not theretofore exercised). The Plan Administrator shall not, however, without the approval of the Board, modify any outstanding Incentive Stock Option in any manner which would cause the Option not to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code. Notwithstanding the foregoing, no modification of an Option shall, without the consent of the Optionee, alter or impair any rights of the Optionee under the Option.

7.15 Other Provisions . ach Option may contain such other terms, provisions, and conditions not inconsistent with the Plan as may be determined by the Plan Administrator.

7.16 Non-Employee Directors . Notwithstanding anything to the contrary contained herein, each Eligible Director of the Company shall receive Stock Options as set forth in this Section 7.16 without the requirement of any action by the Plan Administrator, and Eligible Directors shall only participate in the Plan to the extent specified in this Section 7.16.

(a) Each Director of the Company shall be an Eligible Director who automatically receives Options under this Plan, only if such Director (i) is not then an employee of the Company or any of its subsidiaries (a “Non-Employee Director”), and (ii) does not then, directly or indirectly, beneficially own more than one percent (1%) of any class of the outstanding stock of the Company. Only Eligible Directors may receive Options under this Section 7.16 of the Plan. A Director of the Company shall not be deemed to be an employee of the Company or any of its subsidiaries solely by reason of the existence of an agreement between such Director and the Company or any subsidiary thereof pursuant to which the Director provides services as a consultant to the Company or its subsidiaries on a regular or occasional basis for compensation.

(b) A person who becomes an Eligible Director shall automatically receive as an initial grant, on the date that the person becomes an Eligible Director, a Non-Qualified Stock Option valued at $30,000 on the date of grant based on the Black-Scholes method of option valuation, and an additional annual grant on January 15 of each year of a Non-Qualified Stock Option valued at $30,000 as of the date of grant based on the Black-Scholes method of option valuation. A director will not receive an additional annual grant on the first annual meeting at which occurs his or her election to the Board by the shareholders, unless such meeting is at least 270 days after the date of the initial grant.

(c) Each Non-Qualified Stock Option granted under Section 7.16(a) and (b) above shall become exercisable as to one-third (1/3) of the total number of shares covered thereby on or after the first anniversary date of the grant of such Option, and an additional one-third (1/3) of such total number of shares on or after each consecutive anniversary date thereafter until the Option has become exercisable as to all of such total number of shares.

(d) Each Non-Qualified Stock Option granted under this Section 7.16 shall expire upon the earliest of the following events:

(1) Ten (10) years from the date the Option was granted;

(2) The termination of the Plan;

(3) Three (3) months after the date on which the person ceases to be any of a Director, Consultant or employee of the Company and its subsidiaries, except that if the cessation of services was caused by the person’s death or Disability, the expiration of one (1) year after the cessation of such services.

(e) The exercise price of the Non-Qualified Stock Options granted under this Section 7.16 shall be one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of the grant.

8. Termination or Amendment of the Plan . The Board may at any time terminate or amend the Plan; provided that, without approval of the holders of a majority of the shares of Common Stock of the Company represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute a majority of the required quorum) or by the written consent of a majority of the outstanding shares of Common Stock, there shall be, except by operation of the provisions of Section 7.13, no increase in the total number of shares covered by the Plan, no change in the class of persons eligible to receive Options granted under the Plan, no reduction in the exercise price of Options granted under the Plan, and no extension of the latest date upon which Options may be exercised; and provided further that, without the consent of the Optionee, no amendment may adversely affect any then outstanding Option or any unexercised portion thereof.

9. Indemnification . In addition to such other rights of indemnification as they may have as members of the Plan Administrator, the members of the Plan Administrator administering the Plan shall be indemnified by the Company against reasonable expense, including attorney’s 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 Option granted thereunder, 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 action, suit, or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit, or proceeding that such member is liable for negligence or misconduct in the performance of his duties, provided that within 60 days after institution of any such action, suit, or proceeding, the member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same.

10. Effective Date and Term of Plan . This amended Plan shall become effective (the “Effective Date”) on September , 2004. Unless sooner terminated by the Board in its sole discretion, the Plan will expire on May 31, 2009.

IN WITNESS WHEREOF, the Company by its duly authorized officer, has caused this Plan to be executed at Huntington Beach, California, this day of September , 2004.

BJ’S RESTAURANTS, INC.



By:
		Paul Motenko Co-Chief Executive Officer

Exhibit 10.27

EMPLOYMENT AGREEMENT

This Employment Agreement (the “ Agreement ”) by and between Chicago Pizza & Brewery, Inc. , a California corporation (the “ Company ”), and Louis M. Mucci (“ Employee ”) is hereby entered into effective as of March 15, 2004 (“ the Effective Date ”).

1. Employment and Duties .

(a)

The Company hereby employs Employee as the Chief Financial Officer of the Company. In such capacity, Employee shall have the responsibilities, duties and authority customarily appertaining to such office and such other duties as may be reasonably assigned to Employee by the President and/or the Board of Directors of the Company from time to time and which are consistent with such position and not inconsistent with the provisions of this Agreement. Employee hereby accepts this employment upon the terms and conditions herein contained and, subject to paragraph 2(d), agrees to devote all of Employee’s attention and efforts to the performance of Employee’s duties, and to promote and further the business and interests of the Company.

(b)

Employee shall faithfully adhere to, execute and fulfill all policies established by the Company.

(c)

Employee shall not, during the term of employment hereunder, engage in any other business activity pursued for gain, profit or other pecuniary advantage without giving written notice thereof to the Company’s Co-Chief Executive Officer. However, the Company agrees that the Employee is a part-time business consultant and is assisting certain shareholders and others with business advice and locating funding for such businesses including several small restaurant chains (e.g. Saddle Ranch, Wing Nuts and Mary’s Pizza Shack). Employee does agree to not accept other restaurant chains as clients unless he advises the Company and is given approval by the Company’s Co-Chief Executive Officer. The foregoing limitation shall not be construed as prohibiting Employee from making personal passive investments.

(d)

Employee will remain on the Company’s Board of Directors, but as an employee, will not receive any compensation for such duties. However, as a Board member, Mr. Mucci will receive stock options in the same amount as awarded to other members of the Board.

(e)

The Company and Employee have agreed that the Employee work week will normally only include a four (4) day work week. However, if the work requires additional time above the four (4) day a week work schedule, the Employee and Company will reconsider the Employee’s compensation base.

2. Compensation . For all services rendered by Employee, the Company shall compensate Employee as follows:

(a)

Base Salary . The base salary payable to Employee during the term shall be $185,000 per year, payable in accordance with the Company’s payroll procedures for its employees, but not less frequently than bi-weekly. All compensation shall be payable in accordance with the Company’s payroll procedures for its employees and subject to federal, state and/or local withholding requirements. Employee’s performance may be evaluated on an annual basis, at which time Employee’s salary may be adjusted to reflect his performance.

(b)

Merit Bonus . Employee will receive a merit bonus in recognition of his services during his first year of employment with the Company in the amount of $25,000, subject to federal, state and/or local withholding requirements. Such amount shall be paid at the end of the Company’s final year end 2004. In all subsequent years, Employee will be eligible for a merit bonus solely in the discretion of the Company. The amount of such bonus, if any, shall be determined based on a variety of factors, which may include Employee’s job performance, the Company’s financial performance, and such other factors as the Company shall determine in its sole discretion.

(c)

Stock Options . On the date that Mr. Mucci shall first become an employee of the Company the Employee shall receive options to purchase 12,000 shares of the Company’s Common Stock at an exercise price equal to the market closing price on the grant date. Such options will vest to Employee’s benefit in accordance with the option policies of the Company. The vesting period will continue as long as the Employee is a Board member and/or employee of the Company. The employee will be considered for annual merit stock option awards as determined by the Co-CEO’s.

(d)

Executive Perquisites and Benefits . Employee shall be entitled to receive additional benefits and compensation from the Company in such form and to such extent as specified below:

(i)

Employee shall be entitled to participate in all fringe benefits and perquisites offered by the Company to its similarly situated executives, which include medical, dental and 401K employee benefit plans provided to the employees of the Company in general, subject to the regular eligibility requirements for each such benefit plan or program. However, Employee presently has his own medical insurance provided as a retired PricewaterhouseCoopers’ Partner. As such, he will continue with such insurance. For this excluded benefit, the Company agrees to allow Employee reimbursable local hotel expenses on a weekly basis.

(ii)

Employee shall be entitled to a paid four week vacation annually and sick leave in accordance and in parity with the employee vacation policies of the Company for similarly situated executives.

(iii)

Employee will receive an annual vehicle allowance of $8,000, paid in monthly installments of $666.67.

(e) Separation Upon Change of Control. In the event that Employee’s employment with the Company is terminated as a result of a Change in Control, as that term is defined in Paragraph 20 of this Agreement, Employee will be entitled to receive severance in an amount the equivalent of eighteen months’ base salary. In addition, all unvested stock options previously granted by the Company to Employee/Board member will become immediately exercisable upon the date of Employee’s termination as a result of a Change in Control.

3. Term of Employment . The employment by the Company of Mr. Mucci pursuant hereto shall commence as of March 15, 2004 and shall terminate September 15, 2005. The Employee and the Company agree that Mr. Mucci’s employment with the Company subsequent to September 15, 2005 is at-will, and can be terminated by either party at any time, with or without notice.

4. Return of Company Records . All memoranda, files, client contracts, records, electronic media, business plans, financial statements, manuals, lists and other property delivered to or compiled by Employee by or on behalf of the Company, its representatives, or agents which pertain to the business of the Company shall be and remain the property of the Company, as the case may be, and be subject at all times to the Company’s discretion and control. Likewise, all correspondence, reports, records, charts, marketing data, advertising materials and other similar data pertaining to the business, activities or future plans of the Company which are collected by Employee shall be

delivered promptly to the Company upon request by the Company upon termination of Employee’s employment and Employee shall not retain any copies of the same.

5. Ownership of Intellectual Property/Assignment of Rights . Employee acknowledges that the company’s obligations to Employee are exclusively contractual in nature. Employee shall disclose promptly to the Company any and all conceptions, ideas, designs, plans, know-how, process, improvements and other discoveries, whether capable of being patented or copy written, or not, which during the period of employment hereunder are (i) conceived or made by Employee, solely or jointly with another, (ii) directly related to the Business or activities of the Company, and (iii) Employee conceives as a result of his employment by the company, including any predecessor (collectively, the “ Intellectual Property”).

The Company shall be the sole owner of all fruits and proceeds of Employee’s services hereunder, including, but not limited to, all ideas, concepts, formats, suggestions, developments, arrangements, designs, packages, programs, promotions and other Intellectual Property which Employee may create in connection with and during the term of this Agreement, free and clear of any claims by Employee (or any third party claims) of any kind or character whatsoever (other than Employee’s right to compensation hereunder). Employee shall, at the request of the Company, execute such assignments, certificates or other instruments, consistent herewith and after review and comment, as the Company may deem necessary to evidence, establish, maintain, perfect, protect, enforce or defend its right, title and interest in or to any such properties. Employee hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Employee shall also render to the Company, at the Company’s expense, reasonable assistance in the perfection, enforcement and defense of any Intellectual Property.

6. Trade Secrets . All memoranda, notes, records and others documents made or compiled by Employee, or made available to Employee during the term of this Agreement or subsequently during any at will employment period concerning the business of the Company or its affiliates shall be the Company’s property and shall be delivered to the Company on the termination of this Agreement or at any other time on request. Employee understands and agrees that in the course of employment with the Company, Employee may obtain access to and/or acquire Confidential Information ( as defined below), all of which information Employee understands and agrees would be extremely damaging to the Company if disclosed to a competitor or made available to any other person or corporation.

As used herein the term “Competitor” includes, but is not limited to, any corporation, firm or business engaged in a business similar to that of the Company, Employee understands and agrees that such information is divulged to Employee in confidence and Employee understands and agrees that, at all times, Employee shall keep in confidence and will not disclose or communicate Confidential Information on Employee’s own behalf, or on behalf of any Competitor, if such information is not otherwise publicly available, unless disclosure is made pursuant to written approval by

the company or is required to obtain professional advice, e.g. financial or legal, or is required by law or legal process or as required to enforce the terms of this Agreement which shall only be disclosed under Protective Order. In view of the nature of Employee’s employment and information which Employee may receive during the course of Employee’s employment, Employee likewise agrees that the Company would be irreparably harmed by any violation of this Paragraph and that, therefore, the Company shall be entitled to seek provisional relief from an appropriate forum prohibiting Employee from any violation or threatened violation of this Paragraph.

7. Confidentiality .

(a) Employee acknowledges and agrees that all Confidential Information (as defined below) of the Company is confidential and a valuable, special and unique asset of the Company that gives the Company an advantage over its actual and potential, current and future competitors. Employee further acknowledges and agrees that Employee owes the Company a fiduciary duty of confidentiality and a duty of loyalty and shall use good faith efforts to preserve and protect all Confidential Information from unauthorized disclosure or unauthorized use; that certain Confidential Information may constitute “trade secrets” under applicable state and federal laws; and that unauthorized disclosures or unauthorized use of the Confidential Information may irreparably injure the Company.

(b) As used in this Agreement, the term “Confidential Information shall mean any information or material known to or used by or for the Company (whether or not owned or developed by the Company and whether or not developed by Employee) that is known by Employee not to be generally known to persons in the restaurant, pizzeria, or micro-brewery business. Confidential Information includes, but is not limited to, the following: all trade secrets of the Company; all information that the Company has marked as confidential or has otherwise described to Employee ( either in writing or orally) as confidential; all non-public information concerning the Company’s services, products, customers, research, prices, discounts, costs, marketing plans, marketing techniques, market studies, test data, vendor, referral sources, and contracts; all of the Company’s business records and plans; all of the Company’s personnel files; details of employment relationships between the Company and its personnel; all financial information of or concerning the Company; all information relating to the Company’s computer system software, application software, software and systems methodology, hardware platforms, technical information, inventions, computer programs and listings, source codes, object codes, copyrights and other intellectual property; all technical specifications; any proprietary information belonging to the Company; all computer hardware or software manuals; all training or instruction manuals; and all data, computer system passwords and user codes.

For purposes hereof, Confidential Information shall not include such information which (i) becomes or is already known to the public through no fault of Employee; or (ii) the disclosure of which (A) is required by law ( including regulations and rulings) or the order of any competent governmental authority or legal process, or

(B) Employee reasonably believes is required in connection with the defense of a lawsuit against Employee, provided that in either case, prior to disclosing any information, employee shall provide prior written notice thereof to the Company and provide the Company with the opportunity to contest such disclosure, or (C) if Company provides written authorization allowing Employee such disclosure.

(c) Unless the Company is in breach of its obligations (and such breach continues unabated for any cure period), then both during the term of Employee’s employment and after the termination of Employee’s employment for any reason (including wrongful termination), Employee shall hold all Confidential Information in confidence, and shall not use any Confidential Information except for the benefit of the Company, in accordance with the duties assigned to Employee. Employee shall not, at any time (either during or after the term of Employee’s employment), disclose any Confidential Information to any person or entity (except other employees of the Company who have a need to know the information in connection with the performance of their employment duties, and who have been informed of the confidential nature of the Confidential Information and have agreed to keep it confidential), or copy, reproduce, modify, transmit, including electronic transmission, decompile or reverse engineer any Confidential Information, or remove any Confidential Information from the Company’s premises, without the prior written consent of the Board, or instruct any other person to do so. Employee shall take reasonable precautions to protect the physical security of all documents and other material containing Confidential Information (regardless of the medium on which the Confidential Information is stored). This Agreement applies to all Confidential Information, whether now known or which later becomes known to Employee during the term.

(d) Upon the termination of Employee’s employment with the Company for any reason, and upon written request of the Company at any other time, Employee shall promptly surrender and deliver to the Company all documents and other written material of any nature containing or pertaining to any Confidential Information and shall not retain any such document or other material. Within ten days of any such written request, Employee shall certify to the Company in writing that all such materials have been returned.

(e) During Employee’s term of employment, Employee agrees not to undertake planning for or organization of any business activity competitive with the Company’s business or combine or join with other Employees, employees or representatives of the Company’s business for the purpose of organizing any such competitive business activity.

8. Confidential Agreement . Employee also acknowledges that (a) the terms and conditions set forth in this Agreement are to be treated by the parties hereto as extremely confidential, and (b) that the disclosure of any of the terms could result in substantial, irreparable economic harm to the Company. Therefore, Employee agrees that in the event of any disclosure of any of the terms of this Agreement to persons other than the Company’s officers, accountants, and key management or Employee’s legal counsel,

and/or personal financial advisor, the Company shall be entitled to seek provisional injunctive relief in an appropriate forum prohibiting Employee from any violation or threatened violation of this Paragraph.

9. Assignment: Binding Effect . Employee understands that Company’s decision to employ Employee was made based upon Employee’s personal qualifications, experience and skills. Employee agrees, therefore, that assignment of all or any portion of Employee’s performance under this Agreement is prohibited. Subject to the preceding sentences and the express provisions of Paragraph 20 below, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Company, its successors, heirs, legal representatives and assigns.

10. Release . Notwithstanding anything in this Agreement to- the contrary, Employee shall not be entitled to receive any severance payments pursuant to paragraph 2(d) of this Agreement unless Employee has executed (and not revoked) a general release of all claims Employee may have against the Company and its affiliates in a form of such release reasonably acceptable to the Company, the terms of which shall be negotiated in good faith and consistent herewith.

11. Notice . For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or when mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other addresses as either party may have furnished to the other in writing in accordance herewith, exception that notice of a change of address shall be effective only upon actual receipt:

Company: Chicago Pizza & Brewery, Inc.

16162 Beach Boulevard

Suite 100

Huntington Beach, CA 92647

Attention: President

Employee: Louis M. Mucci

348 Oxford Dr.

Arcadia, CA 91007

12. Arbitration . Except as provided herein, any controversy or claim arising out of or relating in any way to this Agreement or the breach thereof, or Employee’s employment and any statutory claims including all claims of employment discrimination shall be subject to private and confidential arbitration in the City of Los Angeles in accordance with the laws of the State of California. This provision will not apply provisional remedies as in connection with claims under Paragraphs 6 or 8, or as otherwise provided herein.

(a) The arbitration shall be conducted in a procedurally fair manner by a mutually agreed upon neutral arbitrator selected in accordance with the National Rules for the Resolution of Employment Disputes (“Rules”) of the American Arbitration Association or if none can be mutually agreed upon, then by one arbitrator appointed pursuant to the Rules;

(b) The arbitration shall be conducted confidentially in accordance with the Rules;

(d) Each party shall have the right to conduct discovery including (3) three depositions, requests for production of documents and such other discovery as permitted under the Rules or ordered by the arbitrator;

(e) The statute of limitations or any cause of action shall be that prescribed by law;

(f) The arbitrator shall have the authority to award any damages authorized by law for the claims presented including punitive damages and shall have the authority to award reasonable attorneys fees to the prevailing party;

(g) The decision of the arbitrator shall be final and binding on all parties and shall be the exclusive remedy of the parties; and the award shall be in writing in accordance with the Rules, and shall be subject to judicial enforcement in accordance with California law.

13. Complete Integrated Agreement . All prior employment contracts and agreements between the parties are merged in this Agreement. The Company also maintains an employee handbook which also describes the terms and conditions of employment. This Agreement shall govern to the extent any terms contained in the employee handbook are inconsistent. This Agreement constitutes the entire Agreement between the Company and Employee. Further, while Employee’s compensation, including salary and Executive perquisites and benefits may change from time to time without a written modification of this Agreement, neither the provisions of this Agreement concerning at-will employment (Paragraph 3), nor any other provision of this Agreement, may-be modified, altered, amended or changed except by in writing signed by Employee and a duly authorized agent of the Company.

14. Governing Law . Both Employee and the Company acknowledge, understand and agree that the Company is engaged in transactions involving interstate commerce and that this Agreement and any arbitration hereunder shall in all respects be construed according to federal law as well as the laws of the State of California, without regard to its conflicts of law provisions.

15. Amendment . This Agreement can be modified or rescinded only in writing expressly referring to this Agreement and signed by all of the parties to this Agreement.

16. Invalidity of Provisions . Every provision of this Agreement is intended to be severable. In the event that any term or provision hereof is declared by a court of competent jurisdiction to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable, then to the extent possible all other provisions shall nonetheless remain in full force and effect.

17. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instruments.

18. Waiver . No consent or waiver, expressed or implied, by either party to or of any breach or default by the other in the performance by the other of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other party of the same or any other obligations of such party hereunder. Failure- on the part of either party to complain of any act or failure to act of any of the other party, or to declare the other party in default, irrespective of how long such failure continues, shall not constitute a waiver of such party of its rights hereunder.

19. Survival of Representations . The covenants of Employee set forth herein shall survive the termination of this Agreement.

20. Company Right of Assignment . In the event of the-merger or consolidation of the Company with any other corporation or corporations, the sale by the Company of a major portion of its assets or of its business and good will, or any other corporate reorganization involving a change in voting control of the Company (“Change of Control”), this Agreement may be assigned and transferred to such successor in interest as an asset of the Company upon such assignee assuming the Company’s obligations hereunder in writing, in which event Employee agrees to continue to perform Employee’s duties and obligations according to the terms hereof, to or for such assignee or transferee of this Agreement. Employee shall not have any-right to assign, delegate or transfer any duty or obligation to be performed by Employee hereunder to any third party, nor to assign or transfer the right, if any, to receive payments hereunder.

21. Captions . The captions or headings at the beginning of each paragraph hereof are for the convenience of the parties only and are not a part of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective for all purposes as of the Effective Date.

Exhibit 10.28

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into this day of January, 2005 between BJ’S RESTAURANTS, INC., a California corporation (the “Company”) and GERALD W. DEITCHLE (the “Executive”).

WHEREAS, the Board of Directors of the Company (the “Board”) has approved and authorized the entry into this Agreement with Executive; and

WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions for the employment relationship of Executive with the Company.

NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements herein contained and intending to be legally bound hereby, the Company and Executive hereby agree as follows;

1. Term . Subject to the termination provisions of Section 11 below, the term of this Agreement shall be five calendar years (“Term”), commencing January , 2005 (the “Commencement Date”) and ending December 31, 2009 (“Termination Date”). This agreement shall automatically be extended for additional one year terms beyond the Termination Date (the “Extended Termination Date”) or the then current Extended Termination Date unless at least 30 calendar days prior to the Termination Date or the then current Extended Termination Date, Executive or the Company shall have given notice that he or it does not wish to extend the Agreement.

2. Employment . Executive shall be employed as and hold the title of Chief Executive Officer and President of the Company from the Commencement Date until such employment is terminated in accordance with this Agreement. Executive, in his capacity as President and Chief Executive Officer will have the full range of executive duties and responsibilities that are customary for public company CEO positions. All Company officers shall report to and take direction from Executive. Executive shall have supervision and control over, and responsibility for, the affairs of the Company and shall have such other powers and duties as may be from time to time assigned to him by the Board of Directors of the Company (the “Board”). Executive shall report directly to the Office of the Chairman. Department heads of the Company will report to Executive. Executive shall devote substantially all of his time, attention and energies to the business and affairs of the Company; provided, however, the Company acknowledges that Executive is an investor and director in the entities listed on Schedule “A” attached hereto, as described therein and may continue in such capacities only so long as such activities do not unreasonably or materially interfere with the performance of his duties under this Agreement. The Company and the Board shall take all reasonable action within their control to cause Executive to continue to be appointed or elected to the Board during the term of this Agreement.

3. Salary . The Company shall pay Executive an annual salary at an initial annual rate of $300,000.00 less applicable deductions (the “Base Salary”). Such Base Salary will be reviewed by the Board annually. The Base Salary shall be payable by the Company to Executive in substantially equal installments not less frequently than semi-monthly (two times

per month). At the end of each full year of this Agreement, the Base Salary shall be increased by a percentage not less than the percentage increase in the Consumer Price Index during the preceding year, provided, that the increase set forth in this sentence shall never be zero or less. For purposes of this Agreement, the “Consumer Price Index” as of any particular date means the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles/Anaheim/ Riverside CMSA, all items, in respect of the month immediately preceding such particular date, published by the U.S. Department of Labor, Bureau of Labor Statistics, or if such index is no longer published, the U.S. Department of Labor’s most comprehensive official index then in use that most nearly corresponds to the index named above. Participation in deferred compensation, discretionary bonus, retirement, stock option and other Executive benefit plans and in fringe benefits shall not reduce the Base Salary; provided, however, that voluntary deferrals or contributions to such plans shall reduce the current cash compensation paid to Executive but shall not reduce the Base Salary hereunder.

4. Bonus . Executive shall be eligible for a cash bonus (“Bonus”) if the Company realizes certain earnings before interest, amortization, depreciation and income taxes (“EBITDA”) in fiscal year 2005. This additional compensation shall be computed on an annual basis and earned at the close of the Company’s fiscal year 2005 and shall be paid to Executive within ten days of completion of the Company’s annual audit of its consolidated financial statements for fiscal year 2005. The amount and award of such bonus shall be based upon the following schedule:


EBITDA Attainment		Cash Bonus
From $ 16,000,000 to $17,999,999		$125,000
$ 18,000,000 or more		$150,000

“EBITDA” for any year shall mean the consolidated net income (or net loss) of the Company and its subsidiaries for such year, plus any interest expense, income taxes, depreciation, amortization, and extraordinary expenses or losses deducted in determining the same and minus any interest income or extraordinary income included in determining the same, all computed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the audited consolidated financial statements of the Company and its subsidiaries. If the Company makes a significant acquisition or disposition of assets or business operations during 2005, or if the Company adopts any new accounting principles or pronouncements, or restates its financial results in any manner during fiscal year 2005 that impacts the EBITDA attainment levels initially set forth in this Agreement, the EBITDA attainment levels herein shall be appropriately adjusted in a manner the Board determines in good faith to be fair and equitable to Executive. Additional bonuses for fiscal year 2005 and all bonuses thereafter shall be determined by the Board in its sole discretion, but the parties intend that Executive’s annual cash bonus opportunity shall be commensurate with that offered to CEOs of similarly situated public restaurant companies.

5. Participation in Stock Options, Health Insurance, Retirement and Executive Benefit Plans; Moving Expenses.

5.1 Executive shall participate in stock options as follows:

(a) Executive shall receive from the Company on the Commencement Date options to purchase 275,000 shares of the Company’s Common Stock (the “Initial Options”) in accordance with the Company’s 1996 Stock Option Plan (the “Plan”). The exercise price of the Initial Options shall be equal to the per share price of the Company’s Common Stock at the close of trading on the NASDAQ on the last trading day prior to any public announcement of Executive’s execution of this Agreement (assumed to be on the Commencement Date of Executive’s employment or the date of execution of this Agreement, if the Company deems it advisable). Except as provided herein, the terms of the Initial Options shall be as provided in the Plan and in the Company’s standard form Incentive Option Agreement; provided, further, that the Initial Options shall be incentive stock options to the maximum extent permitted under the Company’s Plan and applicable provisions of the Internal Revenue Code. Any portion of the Initial Options that do not qualify as incentive stock options shall be treated as non-qualified stock options. Unless vesting is otherwise accelerated under this Agreement following a Change of Control, 100,000 of the Initial Options shall vest immediately, 87,500 shall vest on the second yearly anniversary of the Commencement Date, and the remainder shall vest on the third yearly anniversary of the Commencement Date.

(b) Executive shall also be eligible for subsequent options during the term of this Agreement as determined by the Board under the Plan. The parties intend that the award of such option, when considered with the other compensation provided to Executive and the financial performance of the Company under Executive’s management, shall be commensurate with that offered to CEOs of similarly situated public restaurant companies.

(i) the acquisition, directly or indirectly, by any “person” or “group” (as those terms are defined in Sections 3(a)(9), 13(d), and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules thereunder) of “beneficial ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in the election of directors (“voting securities”) of the Company that represent 50% or more of the combined voting power of the Company’s then outstanding voting securities, other than:

a. an acquisition by a trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company, or

b. an acquisition of voting securities by the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the stock of the Company, or

c. an acquisition of voting securities pursuant to a transaction described in clause (iii) below that would not be a Change in Control under clause (iii);

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; or

(iii) the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets or (z) the acquisition of assets or stock of another entity, in each case, other than a transaction:

a. which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at more than 50% of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

b. after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause b. as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

5.2 Executive and his spouse shall be entitled to participate in the Company’s health insurance program effective as of the Commencement Date and the Company shall pay all premiums for said insurance for Executive and his spouse under the applicable plans. If Executive is not immediately eligible for participation due to the eligibility restrictions under such program, the Company will reimburse Executive for any COBRA premiums for him and his spouse until such time as they become eligible.

5.3 In addition to the foregoing, Executive shall be entitled to participate with other similarly situated executive officers of the Company based on position, tenure and salary in any plan of the Company relating to stock purchases, pension, thrift, profit sharing, life insurance, disability insurance, education, or other retirement or Executive benefits that the Company has adopted or may hereafter adopt for the benefit of its executive officers.

5.4 Executive shall receive a net lump sum of $20,000 (net of any required withholding) upon the Commencement Date of his employment with the Company as a nonaccountable moving allowance.

5.5 The Company shall pay all unreimbursed out-of-pocket costs associated with an annual physical examination of Executive, such amount not to exceed $3,000 per year.

5.6 Executive shall be reimbursed for his reasonable legal fees incurred in connection with negotiating and drafting this agreement up to a maximum of $10,000.

5.7 Executive agrees that the Company may apply for and take out in its own name and at its own expense such “key person” life insurance upon the life of Executive as the Company may deem necessary or advisable to protect its interests; provided, however, that (i) such insurance coverage does not otherwise diminish or restrict Executive’s eligibility for and/or participation level in any benefit plan or arrangement described in Sections 5.2 and 5.3 above, (ii) such coverage does not otherwise diminish any other economic benefit to which Executive is entitled pursuant to the terms of this Agreement, and (iii) no taxable income is attributed to Executive as a result of such coverage. Executive agrees to reasonably assist and reasonably cooperate with the Company in procuring such insurance, including (without limitation) submitting to medical examinations for purposes of obtaining and/or maintaining such insurance. Employee agrees that he shall have no right, title or interest in and to such insurance.

6. Automobile . The Company shall provide Executive a car allowance of $1,000.00 per month, payable on the Commencement Date and on the 1st day of each calendar month thereafter. In addition, the Company shall reimburse Executive for reasonable actual expenses incurred (including, without limitation, gas, scheduled and unscheduled maintenance and repairs, insurance, registration fees and taxes) in operating the vehicle used for business purposes subject to the provisions of paragraph 8. The Company, with Executive’s consent, may substitute a company-provided leased vehicle in lieu of the car allowance, provided such leased vehicle is reasonable and appropriate for Executive’s use in his capacity as President and CEO of the Company.

7. Vacation . Executive shall be entitled to three (3) weeks annual paid vacation in accordance with the Company’s policy, in addition to holidays and other paid time off (excluding vacation) provided to similarly situated executive officers of the Company. The maximum amount of accrued vacation to which Executive may be entitled at any time is six (6) weeks.

8. Business Expenses . During such time as Executive is rendering services hereunder, Executive shall be entitled to incur and be reimbursed by the Company for all reasonable business expenses, including but not limited to mobile telephone and text messaging charges. The Company agrees that it will reimburse Executive for all such expenses upon the presentation by Executive, on a monthly basis, of an itemized account of such expenditures setting forth the date, the purposes for which incurred, and the amounts thereof, together with such receipts showing payments in conformity with the Company’s established policies. Reimbursement for approved expenses shall be made within a reasonable period not to exceed 30 days after the approval of Executive’s an itemized account.

9. Representations and Warranties . Executive hereby represents and warrants as follows to the Company as a material inducement for the Company to enter into this Agreement:

9.1 Neither Executive nor any prior employer of Executive or entity with respect to of Executive has served as a director, officer, manager or greater than 5% beneficial owner was permanently denied a liquor license solely and directly as a result of Executive’s record. Executive has never applied for or been listed on any brewing or gambling license by any person or entity with respect to which Executive has served as a director, officer, manager or greater than 5% beneficial owner (other than licenses, if any, applied for by the Company prior to the Commencement that listed Executive as a director of the Company).

9.2 To the knowledge of Executive, other than confidentiality agreements with former employers relating to the disclosure or use of proprietary information of such former employers and non-solicitation covenants with former employers having a scope substantially similar to those contained in Section 13.4 of this Agreement, Executive is not subject to any agreements with prior employers that would have a material adverse impact on the Company’s operations or materially interfere with Executive’s performance of his obligations hereunder.

10. Indemnity . The Company shall to the extent permitted and required by law, indemnify and hold Executive harmless from costs, expense or liability arising out of or relating to any acts or decisions made by Executive in the course of his employment to the same extent the Company indemnifies and holds harmless other officers and directors of the Company in accordance with the Company’s established policies. This indemnity shall include, without limitation, advancing Executive attorneys fees to the fullest extent permitted by applicable law. The Company agrees to continuously maintain Directors and Officers Liability Insurance with reasonable limits of coverage and to include Executive within said coverage while Executive is employed by the Company and for at least thirty-six (36) months after the termination of Executive’s employment by the Company.

11. Termination . Executive’s employment with the Company may be terminated for the reasons set forth below. At the request of the Board, Executive agrees to resign from his position as a director of the Company within 24 hours after his termination.

11.1 Death . This Agreement shall terminate upon Executive’s death. The Company shall pay Executive’s estate (i) on the date it would have been payable to Executive any unpaid Base Salary and accrued vacation earned prior to the date of Executive’s death, (ii) within 30 days of the conclusion of the quarter following Executive’s death, any unpaid Bonus prorated to the date of Executive’s death, and (iii) any unpaid reimbursements due Executive for expenses incurred by Executive prior to Executive’s death, upon receipt from Executive’s personal representative of receipts therefore. Any Initial Options and subsequent options that have not vested as of the date of Executive’s death shall terminate on the date of Executive’s death, but all vested but unexercised Initial Options and subsequent options will be exercisable by Executive’s heirs in accordance with the Plan.

11.2 Disability . If, as a result of Executive’s incapacity due to physical or mental illness, he shall have been absent from the full time performance of substantially all of his material duties with the Company for 90 consecutive days or 180 days total within any 12-month

period, his employment may be terminated by the Company or by Executive for “Disability.” Termination shall occur 30 days after a notice of a written termination is delivered to Executive by the Company or by Executive to the Company (the “Effective Date of Termination”). The Company shall pay Executive (i) any unpaid Base Salary and accrued vacation earned prior to the date of Executive’s Effective Date of Termination, (ii) within 30 days of the end of the quarter following Executive’s Effective Date of Termination, any unpaid Bonus prorated to Executive’s last day of actual employment, (iii) any unpaid reimbursements due Executive for expenses incurred by Executive prior to Executive’s Effective Date of Termination, pursuant to paragraph 8, and (iv) if Executive is not covered by any other comprehensive insurance that provides a comparable level of benefits, the Company will pay Executive an amount equivalent to Executive’s COBRA payments up to 18 months following the Effective Date of Termination or the maximum term allowable by then applicable law for coverage of Executive and his eligible dependents. Any Initial Options and subsequent options that have not vested as of Executive’s Effective Date of Termination shall terminate on the date of Executive’s Effective Date of Termination for Disability, but all vested but unexercised Initial Options and subsequent options will be exercisable by Executive’s in accordance with the Plan.

11.3 Cause . The Company may terminate Executive’s employment hereunder for Cause. For purposes of this Agreement, “Cause” means

(i) an act or acts of dishonesty undertaken by Executive and intended to result in material personal gain or enrichment of Executive or others at the expense of the Company;

(ii) gross misconduct that is willful or deliberate on Executive’s part and that, in either event, is materially injurious to the Company;

(iii) the conviction of Executive of a felony; or

(iv) the material breach of any terms and conditions of this Agreement by Executive, which breach has not been cured by Executive within 30 days after written notice thereof to Executive from the Company.

The cessation of employment by Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution, duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board (not including Executive) at a meeting of the Board called and held for such purpose (after reasonable notice to Executive and an opportunity for him, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, one or more causes for termination exist under this Section 11.3, and specifying the particulars thereof in detail. Any dispute as to whether Cause to dismiss Executive exists, shall be resolved by arbitration conducted in Orange County, California in accordance with the rules of the American Arbitration Association and by a single arbitrator reasonably acceptable to Executive and the Company. In the event of termination for Cause, Executive will be entitled to such Base Salary, accrued vacation pay, pro rated bonus and benefits as have accrued under this Agreement through the date of termination which accrued amounts shall be payable on the Effective Date of Termination, to exercise vested stock options in accordance with the terms of the Plan and to extend his insurance coverage at

his own expense for up to 18 months following the Effective Date of Termination or the maximum term allowable by then applicable law for coverage of Executive and his eligible dependents, but will not be entitled to any other salary, benefits, bonuses or other compensation after such date.

11.4 Without Cause . This Agreement may also be terminated by the Company at any time by the delivery to Executive of a written notice of termination. Upon such termination, Executive shall be entitled to receive the following (collectively, the “Severance Benefits”), (1) on the Effective Date of Termination, Executive will be paid such Base Salary, vacation, prorated bonus and other benefits as have been earned under this Agreement through the date of termination and, if Executive is not covered by any other comprehensive insurance, the Company will pay Executive an amount equivalent to Executive’s COBRA payments up to 18 months following the Effective Date of Termination or the maximum term allowable by then applicable law for coverage of Executive and his eligible dependents, (2) Executive will also be paid a lump sum severance equal to the greater of (i) one year’s then current Base Salary, or (ii) fifty percent (50%) of the Base Salary that would be due to Executive (including annual increases) between the date of termination of employment and the later of the Termination Date or any Extended Termination Date, (3) in the event of a termination without Cause during the eighteen month (18) month period following a Change of Control, any Initial Options and subsequent options and any replacement options in any successor entity that were obtained by Executive in exchange for the Initial Options or subsequent options that have not vested as of Executive’s Effective Date of Termination (“Unvested Options”) shall vest on the date of Executive’s Effective Date of Termination, (4) in the event Executive is living and a Change of Control occurs within twelve (12) months following any termination by the Company without Cause, Executive shall be entitled to receive, simultaneously with completion of any Change in Control transaction, a cash payment equal to the amount, if any, by which the aggregate fair market value (determined as of the Effective Date of Termination in accordance with the Plan) of the shares subject to any Unvested Options exceeds the aggregate exercise price of Unvested Options measured as of the Effective Date of Termination, (5) as a condition to receipt of the consideration described in clauses (2) and, if applicable, (3) and (4) above, the Company and Executive shall execute the General Release attached hereto as Schedule B.

11.5 By Executive . Executive may terminate this Agreement upon 30 days written notice to the Company.

(a) In the event Executive terminates this Agreement for “Good Reason,” Executive shall be entitled to receive the Severance Benefits. As used herein, “Good Reason” shall mean:

(i) any removal of Executive from, or any failure to nominate or re-elect Executive to, his current office and/or the Board, except in connection with termination of Executive’s employment for death, disability or Cause; provided, however, that any removal of Executive from, or any failure to re-elect Executive to his current office and/or the Board (except in connection with termination of Executive’s employment for disability) shall not diminish or reduce the obligations of the Company to Executive under this Agreement;

(ii) the failure of the Company to obtain the assumption of this Agreement by any successor to the Company, as provided in this Agreement;

(iii) in the event of a Change in Control:

a. (1) any reduction in Executive’s then-current Base Salary or any material reduction in Executive’s comprehensive benefit package (other than changes, if any, required by group insurance carriers applicable to all persons covered under such plans or changes required under applicable law), (2) the assignment to Executive of duties that represent or constitute a material adverse change in Executive’s position, duties, responsibilities and status with the Company immediately prior to a Change in Control, or (3) a material adverse change in Executive’s reporting responsibilities, titles, offices, or any removal of Executive from, or any failure to re-elect Executive to, any of such positions; except in connection with the termination of Executive’s employment for Cause, upon the disability or death of Executive, or upon the voluntary termination by Executive ;

b. the relocation of Executive’s place of employment from the location at which Executive was principally employed immediately prior to the date of the Change in Control to a location more than 50 miles from such location; or

c. the failure of any successor to the Company to assume and agree to perform the Company’s obligations under this Agreement; or

(iv) the material breach of any terms and conditions of this Agreement by the Company, which breach has not been cured by the Company within thirty (30) days after written notice thereof to the Company from Executive.

Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason hereunder.

If it shall be determined that any payment or distribution by the Company to or for the benefit of Executive hereunder (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereafter collectively referred to as the “Excise Tax”), then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after Executive is informed in writing of such claim.

(b) In the event Executive terminates this Agreement other than for Disability or Good Reason, the Company shall pay Executive (i) on the date it would

have been payable to Executive, any unpaid Base Salary and accrued vacation pay earned prior to the date of Executive’s termination, and (ii) any unpaid reimbursements due Executive for expenses incurred by Executive prior to the date of Executive’s termination, pursuant to Section 8 and Executive shall have the right to exercise any vested stock options in accordance with the terms of the Plan and to extend his insurance coverage at his own expense for up to 18 months following the Effective Date of Termination or the maximum term allowable by then applicable law for coverage of Executive and his eligible dependents.

12. Assignment .

12.1 This Agreement may not be assigned by Executive.

12.2 This Agreement may be assigned by the Company provided that the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform under this Agreement in the same manner and to the same extent that the Company would be required to perform as if no such succession had taken place.

13. Covenants .

13.1 Confidential Information. During the term of this Agreement and thereafter, Executive shall not, except as may be required to perform his duties hereunder or as required by applicable law or court order, disclose to others for use, whether directly or indirectly, any Confidential Information regarding the Company. “Confidential Information” shall mean information about the Company, its subsidiaries and affiliates, and their respective clients and customers that is not available to the general public or that does not otherwise become available to the general public, and that was learned by Executive in the course of his employment by the Company, including, without limitation, any data, formulae, recipes, methods, information, proprietary knowledge, trade secrets and client and customer lists and all papers, resumes, records and other documents containing such Confidential Information. Executive acknowledges that such Confidential Information is specialized, unique in nature and of great value to the Company, and that such information gives the Company a competitive advantage. Upon the termination of his employment, Executive will promptly deliver to the Company all documents, maintained in any format, including electronic or print, (and all copies thereof) in his possession containing any Confidential Information.

13.2 Noncompetition . Except as otherwise provided herein, Executive agrees that during the term of this Agreement he will not, directly or indirectly, without the prior written consent of the Company, provide consulting services with or without pay, or own, manage, operate, join, control, participate in, or be connected as a stockholder, partner, or otherwise with any business, individual, partner, firm, corporation, or other entity which is then in competition with the Company or any present affiliate of the Company in the industry of owning or operating full-menu table service casual dining restaurants; provided, however, that the “beneficial ownership” by Executive, either individually or as a member of a “group,” as such terms are used in Rule 13d of the General Rules and Regulations under the Securities Exchange Act of 1934 (“Exchange Act”), of not more than 5 % of the voting stock of any corporation shall not be

a violation of this Agreement. Notwithstanding the foregoing, Executive shall be permitted to maintain the ownership interests and directorship described on Exhibit “A” attached hereto so long as they do not interfere with the performance of his duties and do not constitute competitive activities.

13.3 Right to Company Materials . Executive agrees that all styles, designs, recipes, lists, materials, books, files, reports, correspondence, records, and other documents (“Company Material”) used, prepared, or made available to Executive, shall be and shall remain the property of the Company. Upon the termination of his employment and/or the expiration of this Agreement, all Company Materials shall be returned immediately to the Company, and Executive shall not make or retain any copies thereof.

13.4 Non-solicitation . Executive understands and agrees that in the course of employment with the Company, Executive will obtain access to and/or acquire Company trade secrets, including Confidential Information, which are solely the property of the Company. Therefore, to protect such trade secrets, Executive promises and agrees that during the term of this Agreement, and for a period of two years thereafter, he will not solicit or assist or instruct others in soliciting any employees, customers, franchisees, landlords, or suppliers of the Company or any of its present or future subsidiaries or affiliates, to divert their employment or business to or with any individual, partnership, firm, corporation or other entity then in competition with the business of the Company, or any subsidiary or affiliate of the Company. The Company acknowledges in this regard that its customers, landlords and suppliers do have existing relationships and likely will have future relationships with the Company’s direct and indirect competitors in the restaurant industry in the ordinary course of their activities.

13.5 Non-disparagement . Except for statements of fact, internal Company communications relating to the performance of the Company, disclosures required under applicable law or in connection with any legal proceedings with respect to which Executive is a party or witness, Executive will not make any disparaging remarks regarding the Company at any time during or after the termination of his employment with the Company. Except for statements of fact, internal communications relating to the performance of Executive, and disclosures required under applicable law or in connection with any legal proceedings with respect to which the Company is a party or witness, the Company will not make any disparaging remarks regarding Executive at any time during or after the termination of his employment with the Company.

14. Notice . For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or when mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other addresses as either party may have furnished to the other in writing in accordance herewith, exception that notice of a change of address shall be effective only upon actual receipt:


Company:		BJ’s Restaurants, Inc.
		16162 Beach Boulevard
		Suite 100
		Huntington Beach, CA 92647

Attention: Paul Motenko and Jerry Hennessy


Executive:		Gerald W. Deitchle

15. Amendments or Additions . No amendment or additions to this Agreement shall be binding unless in writing and signed by both parties hereto.

16. Section Headings . The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

17. Severability . The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

18. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both of which together will constitute one and the same instrument.

19. Arbitration . Except as provided herein, any controversy or claim arising out of or relating in any way to this Agreement or the breach thereof, or Executive’s employment and any statutory claims including all claims of employment discrimination shall be subject to private and confidential arbitration in Orange County, California in accordance with the laws of the State of California. The arbitration shall be conducted in a procedurally fair manner by a mutually agreed upon neutral arbitrator selected in accordance with the National Rules for the Resolution of Employment Disputes (“Rules”) of the American Arbitration Association or if none can be mutually agreed upon, then by one arbitrator appointed pursuant to the Rules. The arbitration shall be conducted confidentially in accordance with the Rules. The arbitration fees shall be paid by the Company. Each party shall have the right to conduct discovery including depositions, requests for production of documents and such other discovery as permitted under the Rules or ordered by the arbitrator. The statute of limitations or any cause of action shall be that prescribed by law. The arbitrator shall have the authority to award any damages authorized by law for the claims presented including punitive damages and shall have the authority to award reasonable attorneys fees to the prevailing party in accordance with applicable law. The decision of the arbitrator shall be final and binding on all parties and shall be the exclusive remedy of the parties. The award shall be in writing in accordance with the Rules, and shall be subject to judicial enforcement in accordance with California law. Notwithstanding anything to the contrary contained in this Section 19, nothing herein shall prevent or restrict the Company or Executive from seeking provisional injunctive relief from any forum having competent jurisdiction over the parties.

20. Miscellaneous . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California without regard to its conflicts of law principles. All references to sections of the Exchange Act shall be deemed also to refer to any successor provisions to such sections.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement on the date first indicated above.


BJ’S RESTAURANTS, INC.

By:
		PAUL A. MOTENKO Co-Chief Executive Officer

EXECUTIVE:


		GERALD W. DEITCHLE

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-82008), and the Registration Statement (Form S-8 No. 333-63362) pertaining to the BJ’s Restaurants, Inc. 1996 Stock Option Plan; Option Agreement with Paul A. Motenko of BJ’s Restaurants, Inc.; and Option Agreement with Jeremiah J. Hennessy of BJ’s Restaurants, Inc. of our reports dated March 10, 2005, with respect to the consolidated financial statements of BJ’s Restaurants, Inc., BJ’s Restaurants, Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of BJ’s Restaurants, Inc. included in the Annual Report (Form 10-K) for the year ended January 2, 2005.

/s/ E RNST & Y OUNG LLP

Irvine, California

March 10, 2005

EXHIBIT 31

BJ’S RESTAURANTS, INC.

Certification of Co-Chairman of the Board of Directors

I, Paul A. Motenko, Co-Chairman of the Board of Directors, Vice President and Secretary, certify that:

1.	I have reviewed this annual report on Form 10-K for the fiscal year ended January 2, 2005 of BJ’s Restaurants, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2005

/s/ P AUL A. M OTENKO

Paul A. Motenko

Co-Chairman of the Board of Directors,

Vice President and Secretary

BJ’S RESTAURANTS, INC.

Certification of Co-Chairman of the Board of Directors

I, Jeremiah J. Hennessy, Co-Chairman of the Board of Directors certify that:

1.	I have reviewed this annual report on Form 10-K for the fiscal year ended January 2, 2005 of BJ’s Restaurants, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2005

/s/ J EREMIAH J. H ENNESSY

Jeremiah J. Hennessy

Co-Chairman of the Board of Directors

BJ’S RESTAURANTS, INC.

Certification of Chief Executive Officer

I, Gerald W. Deitchle, Chief Executive Officer certify that:

1.	I have reviewed this annual report on Form 10-K for the fiscal year ended January 2, 2005 of BJ’s Restaurants, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2005

/s/ G ERALD W. D EITCHLE

Gerald W. Deitchle

Chief Executive Officer, President and

Director

BJ’S RESTAURANTS, INC.

Certification of Chief Financial Officer

I, Louis M. Mucci, Chief Financial Officer certify that:

1.	I have reviewed this annual report on Form 10-K for the fiscal year ended January 2, 2005 of BJ’s Restaurants, Inc. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2005

/s/ L OUIS M. M UCCI

Louis M. Mucci

Chief Financial Officer and Director

EXHIBIT 32

BJ’S RESTAURANTS, INC.

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Paul A. Motenko and Jeremiah J. Hennessy, Co-Chairman of the Board of Directors, Gerald W. Deitchle, Chief Executive Officer and Louis M. Mucci, Chief Financial Officer of the Company, certify to their knowledge:

(1) The Annual Report on Form 10-K of the Company for the year ended January 2, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

In Witness Whereof, each of the undersigned has signed this Certification as of this March 10, 2005.

/s/ P AUL A. M OTENKO

/s/ J EREMIAH J. H ENNESSY

/s/ G ERALD W. D EITCHLE

/s/ L OUIS M. M UCCI

Paul A. Motenko

Co-Chairman of the Board of Directors,

Vice President and Secretary

Jeremiah J. Hennessy

Co-Chairman of the Board

of Directors

Gerald W. Deitchle

Chief Executive Officer, President and Director

Louis M. Mucci

Chief Financial Officer

and Director