Exhibit 10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (the “
Agreement ”) is entered into this 6 th
day of September, 2007, between THE CHEESECAKE FACTORY
INCORPORATED, a Delaware corporation (the “ Company
”) and Russell Bendel (the “ Executive
”).
WHEREAS, on August
14, 2007 the Compensation Committee (the “ Compensation
Committee ”) of the Board of Directors (the “
Board ”) of the Company approved and authorized the
entry into this Agreement with the Executive; and
WHEREAS, the
parties desire to enter into this Agreement setting forth the terms
and conditions for the employment relationship between the
Executive and 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 the Executive hereby agree as follows:
1.
Employment . The Executive is employed as the
President and Chief Operations Officer of the Cheesecake Factory
Restaurants Inc., a wholly owned subsidiary of the Company.
In such capacity, the Executive shall have such duties and
responsibilities to the Company and its subsidiaries as may be
designated to the Executive by the Board from time to time and as
are not inconsistent with the Executive’s position. The
Executive shall devote substantially all the Executive’s
working time, attention and energies to the business and affairs of
the Company and the Company’s subsidiaries. The
Executive shall report directly to the Chief Executive Officer of
the Company. While employed by the Company during the Term of
this Agreement, the Executive shall not serve as the member of the
board of directors of any other for-profit corporation or as the
manager of any limited liability company. Without the prior
written approval of the Chief Executive Officer, the Executive
shall not serve as the member of the board of directors or trustees
of any non-profit or charitable organization; provided, however,
such restriction shall not apply to The Cheesecake Factory Oscar
and Evelyn Overton Foundation or the California Restaurant
Association.
2.
Term . The initial “ Term of this
Agreement ” shall mean the period commencing on the date
hereof and ending on September 6, 2010. On such date, and on
each subsequent September 6 th
thereafter, the Term of this Agreement shall be automatically
extended for one additional calendar year unless, at least ninety
(90) days prior to September 6 th of
each year during the Term of this Agreement, either the Company or
the Executive shall give notice not to extend this Agreement.
Unless otherwise terminated earlier in accordance with
Section 9, “The Term of this Agreement” shall mean, for
purposes of this Agreement, such initial three-year term and
subsequent extensions, if any.
3.
Benefits . During the Term of this Agreement,
Executive shall be eligible for the following compensation and
benefits:
(a)
Annual Salary . Subject to the further provisions of this
Agreement, the Company shall pay the Executive during the Term of
this Agreement a base salary at an annual rate during the Term
equal to $450,000, with such salary to be adjusted at such times,
if any, and in such amounts as determined by the Compensation
Committee (“ Annual Salary ”), provided,
however , the Executive’s Annual Salary shall not be
decreased without the Executive’s prior written consent
unless the annual salaries of all other Executive Officers are
proportionately decreased. Any increase in salary shall not
serve to limit or reduce any other benefit or obligation of the
Company hereunder. The Company shall pay such salary to the
Executive, in equal installments, not less frequently than monthly
in accordance with the Company’s standard payroll practices
for employees who are Executive Officers of the Company. The
Executive’s participation in deferred compensation,
discretionary and/or performance bonus, retirement, stock option
and/or other employee benefit plans and in fringe benefits shall
not reduce the Executive’s Annual Salary.
(b)
Equity Grant. Subject to the approval by the Compensation
Committee of the Company’s Board of Directors
(“Compensation Committee”), the Executive shall be
granted an initial grant of 100,000 non-qualified stock options,
which vest twenty percent (20%) each year over a five-year period
on the first (1 st
), second (2 nd
), third (3 rd
), fourth (4 th
), and fifth (5
th
) anniversary dates of the grant
date, respectively, subject to the Company meeting certain earnings
goals, as described in Executive’s award agreement, at an
exercise price equal to fair market value of the Company’s
stock on the date of grant, plus 35,000 restricted shares of
the Company’s stock, which restrictions lapse at the rate of
sixty percent (60%) on the 3 rd
anniversary of the grant
date, and twenty percent (20%) on each of the fourth (4
th
) and fifth (5 th
) anniversary dates of the grant
date, respectively, all in accordance with the terms and conditions
of The Cheesecake Factory Incorporated 2001 Omnibus Stock Incentive
Plan.
Executive also shall be eligible for
consideration for future equity awards, in accordance with
the terms and conditions of The Cheesecake Factory Incorporated
2001 Omnibus Stock Incentive Plan, as such plan may be modified or
amended from time to time, or such other or additional equity
programs as may be established by the Company from time to time for
its Executive Officers. The Compensation Committee shall determine
the amount and timing of such awards, if any, under the
Company’s equity compensation plans.
(c)
Automobile. The option to participate in the Company’s
leased car program (currently a BMW-7 series automobile with
insurance coverage) or, in lieu of participating in the leased car
program, the right to receive an automobile allowance in the amount
of one thousand two hundred dollars ($1200.00) per month, in
accordance with the Company’s policies and procedures for the
leased car program and subject to all applicable taxes and
withholdings.
(d)
Participation in Bonus, Retirement and Employee Benefit
Plans .
(i)
While employed by the Company during the Term of this Agreement,
the Executive shall be entitled to participate equitably with other
Executive Officers in any plan of the Company relating to pension,
profit sharing, life insurance, education, or other retirement or
employee benefits that the Company has adopted or may adopt for the
benefit of its Executive Officers, to the extent eligible
thereunder by virtue of the Executive’s position, tenure and
salary, including without limitation, The Cheesecake Factory
Incorporated Executive Savings Plan and The Cheesecake Factory
Incorporated Amended and Restated Annual Performance Incentive
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Plan. The
Compensation Committee shall determine the amount and timing of
awards, if any, under the Company’s bonus plans. In the event
any Executive retirement or employee benefit provides for a receipt
of compensation in a year subsequent to the year in which it was no
longer subject to a substantial risk of forfeiture, that benefit
shall not be given to the Executive unless that benefit is either
exempt from Section 409A or compliant with Section 409A.
(ii)
For fiscal year 2007 only, Executive shall receive a prorated share
of additional compensation based upon his length of employment with
the Company during fiscal year 2007, in an amount equal to
forty-two percent (42%) of his Annual Salary for fiscal 2007
multiplied by a fraction, the numerator of which is the number of
days Executive is employed by the Company in fiscal year 2007 and
the denominator of which is 365 (“2007 Additional
Compensation”). The 2007 Additional Compensation shall be
made to Executive in lieu of Executive’s participation in The
Cheesecake Factory Incorporated Amended and Restated Annual
Performance Incentive Plan for Fiscal 2007 and shall be due and
payable to Executive on January 15, 2008 provided that Executive is
employed by the Company through and including the last day of the
Company’s 2007 fiscal year.
(e)
Paid Vacation . While employed by the Company during the
Term of this Agreement, the Executive shall be entitled to an
annual paid vacation in accordance with the Company’s general
administrative policy but in no event less than the greater of the
amount of paid vacation time provided to other Executive Officers,
or three weeks per year.
4.
Relocation . Executive’s offices shall be at the
corporate headquarters of the Company, currently located in
Calabasas Hills, California, and Executive shall, when not
traveling on Company business, work at such corporate offices. The
Company shall reimburse Executive for his reasonable relocation
expenses and/or make the following payments to Executive to assist
in his relocation from Orange County to the greater Los Angeles
Metropolitan area: (i) reimburse reasonable temporary housing costs
in the Calabasas Hills, California area for a one or two-bedroom,
furnished apartment, not to exceed a period of three months from
the date of employment; (ii) reimburse up to three visits,
including meals, rental car or mileage and gas for
Executive’s personal car, and accommodations, in accordance
with the Company’s policies for travel reimbursement, for
Executive and his spouse to search for permanent housing in the
greater Los Angeles Metropolitan Area; (iii) reimburse customary
expenses incurred for the packing, shipping and unpacking of all
household goods from Orange County to Los Angeles County;
(iv) make a one time payment of thirty-five thousand dollars
($35,000), subject to normal and customary withholdings, payable
within two weeks of Executive’s first day of employment; and
(v) if Executive permanently relocates his primary residence to the
greater Los Angeles Metropolitan area during the first two years of
the Term of this Agreement, (A) reimburse real estate
commissions (not to exceed six percent (6%) of sales price), in
connection with the sale of Executive’s current home located
in Orange County, and (B) reimburse actual customary closing
costs (excluding required repairs, payment of interest for money
borrowed, prepayment penalties, and loan fees), in connection with
the sale of Executive’s current home located in Orange
County, plus an amount equal to the following taxes which are
assessed with respect to such closing costs: 25% Federal
Supplemental Tax, applicable State Supplemental Taxes, if any, and
7.65% Social Security and Medicare, less (C) thirty-five thousand
dollars ($35,000) previously paid to Executive under Section 4(iv)
above. If Executive voluntarily terminates his employment
with the Company, other than because of a Constructive Termination,
or is terminated for Cause, within a two year period from the
effective date of this Agreement,
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Executive agrees to
reimburse the Company for the costs and expenses incurred by the
Company under this Section 4 (iii), (iv) and (v)
(“Reimbursables”) on a prorata basis, such
reimbursement to be equal to the total Reimbursables, less the
amount derived by multiplying the total Reimburseables by a
fraction, the numerator of which is the number of months of
employment completed with the Company as of the Date of Termination
and the denominator of which is 24.
5.
Health Insurance Premiums; Fringe Benefits . While
employed by the Company during the Term of this Agreement, the
Company shall pay a portion of Executive’s premium for
medical, dental and vision care insurance with respect to the
Executive and the Executive’s immediate family members under
the Company’s employee medical insurance policies to the
extant provided to other Executive Officers of the Company and
based upon the most comprehensive medical, dental and vision care
insurance plan offered to the Company’s Executive
Officers. In addition and while employed by the Company
during the Term of this Agreement, the Executive shall be entitled
to receive all other fringe benefits that are now or may be
hereafter provided to the Company’s other Executive
Officers. The Company shall appropriately adjust such fringe
benefits to the extent that the level or amount of any fringe
benefit is based upon seniority, compensation levels, or geographic
location.
6.
Business Expenses . While employed by the Company
during the Term of this Agreement, the Executive shall be entitled
to incur and be reimbursed for all reasonable business
expenses. The Company shall reimburse the Executive for all
these expenses provided the Executive provides, from time to time,
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 and procedures.
7.
Indemnity . To the fullest extent permitted by the
General Corporation Law of the State of Delaware as the same exists
or may hereafter be amended, the Company shall indemnify and hold
the Executive harmless from any cost, expense or liability arising
out of or relating to any acts or decisions made by the Executive
on behalf of or in the course of performing services for the
Company to the same extent the Company indemnifies and holds
harmless other Executive Officers and in accordance with the
Company’s established policies. The indemnification
provided by this Section 7 shall not be deemed exclusive of any
other rights to which the Executive may be entitled under the
Company’s certificate of incorporation, any bylaw, agreement,
contract, vote of the stockholders or disinterested directors or
pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise.
8.
Certain Terms Defined . For purposes of this
Agreement:
(a)
“ Affiliate ” shall mean a person that directly,
or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with the person
specified.
(b)
“Base Salary ” means, as of any date of
termination of employment, the highest Annual Salary of the
Executive in any of the last three fiscal years preceding such date
of termination of employment.
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(c)
“ Beneficial Owner ” shall have the meaning
given to such term in the Exchange Act and the rules and
regulations thereunder.
(d)
“Cause” means a termination of employment
upon: (i) the failure by the Executive to perform the
Executive’s duties with the Company (other than any such
failure resulting from the Executive’s incapacity due to
physical or mental illness), after there has been delivered to the
Executive a written demand for performance from the Company which
demand specifically identifies the basis for the Company’s
belief that the Executive has not substantially performed the
Executive’s duties; (ii) dishonesty, incompetence or
gross negligence in the discharge of the Executive’s duties;
(iii) theft, embezzlement, fraud, breach of confidentiality, or
unauthorized disclosure or use of inside information, recipes,
processes, customer or employee lists, trade secrets, or other
Company proprietary information; (iv) willful material violation of
any law, rule or regulation of any governing authority or of the
Company’s policies and procedures, including, without
limitation, the Company’s Code of Ethics and Code of Conduct
applicable to the Executive; (v) material breach of any agreement
with the Company; (vi) intentional conduct that is injurious to the
reputation, business or assets of the Company; or (vii)
solicitation of the Company’s agents or staff members to work
for any other business entity.
(e)
A “ Change of Control ” occurs if:
(i)
any Person (other than the Executive) or that Person’s
Affiliate is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 33 1/3% or
more of the combined voting power of the Company’s then
outstanding voting securities (“ Voting Securities
”); or
(ii)
the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation (or other entity), other
than:
(1)
a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity)
more than 50% of the combined voting power of the Voting Securities
of the Company or such surviving entity outstanding immediately
after such merger or consolidation;
(2)
a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no Person acquires
more than 50% of the combined voting power of the Company’s
then outstanding Voting Securities; or
(3)
a merger or consolidation that would result in the directors of the
Company (who were directors immediately prior thereto) continuing
to constitute at least 50% of all directors of the surviving entity
after such merger or consolidation.
In this
subparagraph (ii), “surviving entity” shall mean only
an entity in which all the Company’s stockholders immediately
before such merger or consolidation (determined without taking into
account any stockholders properly exercising appraisal or similar
rights) become stockholders by the terms of such merger or
consolidation, and the phrase “directors of the Company (who
were directors immediately prior thereto)” shall include only
individuals who
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were directors of
the Company at the beginning of the 24 consecutive month period
preceding the date of such merger or consolidation.
(iii)
the stockholders of the Company approve a plan of complete
liquidation or an agreement for the sale or disposition of all or
substantially all of the Company’s assets; or
(iv)
during any period of 24 consecutive months, individuals, who at the
beginning of such period constitute the Board of Directors of the
Company, and any new director whose election by the Board of
Directors, or whose nomination for election by the Company’s
stockholders, was approved by a vote of at least one-half (1/2) of
the directors then in office (other than in connection with a
contested election), cease for any reason to constitute at least a
majority of the Board of Directors.
(f)
“ Code ” means the Internal Revenue Code of
1986, as amended.
(g)
“ Constructive Termination ” means the
occurrence of one or more of the following events without the
Executive’s written consent: (i), a relocation of the
Executive’s principal business office to a location which is
in excess of a forty-five (45) mile-radius from the
Executive’s principal business office in the Company’s
corporate headquarters in Calabasas Hills, California; or (ii) the
significant reduction of the Executive’s title, duties or
responsibilities relative to the Executive’s title, duties or
responsibilities in effect immediately prior to such reduction; or
(iii) a decrease in the Executive’s Annual Salary or a
decrease and/or discontinuation of any benefit plan or program, or
level of participation in any such plan or program, from the
current plans, programs or levels currently applicable to Executive
Officers, which decrease or discontinuation does not apply to all
Executive Officers, or a failure to include the Executive in any
new benefit plan or program offered to other Executive Officers; or
(iv) the failure of the Company to honor any of the material
provisions of this Agreement after receipt of written notice of
such failure from Executive and opportunity to remedy such failure
within thirty (30) days of receipt of such notice.
(h)
“ Date of Termination ” means the date of actual
receipt of a Notice of Termination given under Section 16 below or
any later date specified therein (but not more than fifteen (15)
days after the giving of the Notice of Termination), as the case
may be; provided that (i) if the Executive’s employment is
terminated by the Company for any reason other than because of the
Executive’s death or as a result of the Executive becoming
Permanently Disabled, the Date of Termination is the date on which
the Company gives notice to the Executive of such termination or
the Executive gives notice to the Company that a Constructive
Termination has occurred; (ii) if the Executive’s employment
is terminated due to Permanent Disability, the Date of Termination
is the date of actual receipt of a Notice of Termination; and (iii)
if the Executive’s employment is terminated due to the
Executive’s death, the Date of Terminatio
