Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of June 30, 2009
(“Date of this Agreement”), between THE CHEESECAKE FACTORY INCORPORATED (the
“Company”) and DAVID M. OVERTON (the “Employee”).

 

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

 

WHEREAS, the parties desire to enter into this Agreement setting forth the terms
and conditions for the employment relationship of the Employee 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 the Employee hereby agree as follows:

 

1.                                       Employment.  During the Term of this
Agreement, Employee is employed as Chief Executive Officer (“CEO”) of the
Company and, so long as Employee remains CEO and a member of the Board shall be
the Chairman of the Board.  As Chairman of the Board, Employee shall have all
rights and duties set forth in the Company’s Articles of Incorporation and
By-laws and will work in collaboration with the Lead Director of the Board to
establish the agendas for the Board meetings.  As CEO, Employee shall have all
rights and duties set forth in the Company’s Articles of Incorporation and
By-Laws and, subject to the oversight of the Board, shall have general
supervision, direction and control of the business and the officers, employees
and agents of the Company, including development and implementation of the
Company’s strategic plans and policies, short-and long-term growth, operations,
financial and capital expenditure decisions, reporting structure and
organization, budgeting and financial performance, and communications and
relations with investors, other Board members, customers, and other outside
Company business interests.  The Employee shall devote substantially all his
time, attention and energies to the business and affairs of the Company and the
subsidiaries.  The Company acknowledges that the Employee is a member of the
Board and that such membership constitutes an integral part of the Employee’s
duties hereunder.

 

2.                                       Term.  The “Term of this Agreement” or
“Term” shall be for the period beginning the Date of this Agreement and ending
on May 7, 2012.

 

3.                                       Salary.  Subject to the further
provisions of this Agreement, the Company shall pay the Employee a salary at an
initial annualized rate equal to $850,000 effective as of June 30, 2009.  The
Employee’s salary may be increased at such times, if any, and in such amounts as
determined by the Compensation Committee in its discretion.  The Compensation
Committee will review the salary on an annual basis.  Any increase in salary
shall not serve to limit or reduce any other obligation of the Company
hereunder.  Such salary shall be payable by the Company to the Employee not less
frequently than monthly.  Participation in deferred compensation, discretionary
or performance bonus, retirement, stock option and other employee benefit plans
and in fringe benefits shall not reduce the annual rate.

 

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4.                                       Bonus.  While employed by the Company
pursuant to this Agreement, the Employee shall be eligible to be a participant
in the Company’s Performance Incentive Plan (or any modified or replacement plan
providing for bonus incentives to executive officers) (“Incentive Plan”) subject
to the terms, conditions and limitations of such Incentive Plan.  During the
Term of this Agreement Employee also shall be eligible for other discretionary
bonus awards, as determined in the sole discretion of the Compensation
Committee.

 

5.                                       Participation in Employee Benefit
Plans.  While employed by the Company pursuant to this Agreement, the Employee
shall be entitled to participate equitably with other executive officers
commensurate with Employee’s position with the Company, in any plan of the
Company relating to pension, thrift, profit sharing, life insurance, disability
income insurance, medical coverage, education, or other retirement or employee
benefits that the Company has adopted or may adopt for the benefit of its
executive officers, subject to the terms, conditions and limitations of any such
plan.

 

6.                                       Equity Compensation.

 

(a)                                  Grants. On May 7, 2009 (“Date of Grant”),
the Company granted the Employee (x) 50,000 restricted shares of the Company’s
common stock (“Restricted Shares”) and (y) 100,000 non qualified stock options
(“Options”) to purchase shares of the Company’s common stock pursuant to a
Notice and Agreement of Grant of Stock Option and/or Restricted Share Award
(“Equity Agreement”).  The Restricted Shares and the Options are subject to the
terms and conditions of the Company’s 2001 Omnibus Stock Incentive Plan as
restated April 5, 2004, as further amended July 23, 2008 (“Plan”), the Equity
Agreement and the Company’s stock retention requirements applicable to executive
officers.

 

(b)                                 Consideration for Future Grants.  The
Employee during the Term of this Agreement shall be eligible for future grants
of options to purchase the Company’s common stock, restricted shares, or other
equity incentives under the Company’s equity incentive plans at levels
commensurate with Employee’s position with the Company.  All such grants and the
terms and conditions shall be in the discretion of the Compensation Committee.

 

(c)                                  Prior Grants.  If, on the Date of
Termination (as hereinafter defined in Section 13(d)), any installment of non
qualified stock options to purchase shares of the Company’s common stock granted
to the Employee pursuant to the Plan on or subsequent to December 29, 2004 and
prior to the grant of the Options are not then exercisable and the Employee’s
employment is not terminated for Cause (as hereinafter described in
Section 12(c)), such installment shall become immediately exercisable subject to
expiration as set forth in the Plan or any option agreement.

 

7.                                       Fringe Benefits.  While employed by the
Company pursuant to this Agreement, the Employee shall be entitled to receive
all other fringe benefits, which are now or may be provided to the Company’s
executive officers.  To the extent that the level of any such benefits is based
upon seniority, level of services or compensation levels, the Company shall make
an appropriate and proportionate adjustment to the Employee’s benefits.

 

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8.                                       Vacation. While employed by the Company
pursuant to this Agreement, the Employee shall be entitled to an annual paid
vacation in accordance with the Company’s general administrative policy.

 

9.                                       Business Expenses.  While employed by
the Company pursuant to this Agreement, the Employee shall be entitled to incur
and be reimbursed for all reasonable business expenses.  The Company agrees that
it will reimburse the Employee for all such expenses upon the presentation by
the Employee, 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.  Reimbursement shall be made within a reasonable
period after the Employee’s submission of an itemized account in accordance with
the Company’s established policies; provided, however, to the extent that any
reimbursement of any business expense under this Section 9 or in-kind benefits
provided under this Agreement are deemed to constitute taxable compensation to
the Employee, (a) such amounts shall be reimbursed or provided no later than
December 31 of the year following the year in which the expense was incurred;
(b) such amounts reimbursed or provided in one year shall not affect the
expenses or in-kind benefits eligible for reimbursement or payment in any
subsequent year, and (c) the Employee’s right to such reimbursement or payment
of any such amounts shall not be subject to liquidation or exchange for any
other benefit (“409A Reimbursement Conditions”).

 

10.                                 Code Section 280G.

 

(a)                                  Notwithstanding any other provision of this
Agreement, in the event that Employee becomes entitled to receive or receives
any payments, options, awards or benefits (including, without limitation, the
monetary value of any non-cash benefits and the accelerated vesting of stock
options or restricted stock) under this Agreement or under any other plan,
agreement or arrangement with the Company, from any person whose actions result
in any change described in Code Section 280G(b)(2)(A)(i) (a “Section 280G
Transaction”) or from any person affiliated with the Company or such person
(collectively, the “Payments”) that may separately or in the aggregate
constitute “parachute payments” within the meaning of Code Section 280G and it
is determined that, but for this Section 10(a), any of the Payments will be
subject to any excise tax pursuant to Code Section 4999 or any similar or
successor provision (the “Excise Tax”), the Company shall pay to Employee either
(i) the full amount of the Company Payments (as defined below) or (ii) an amount
equal to the Company Payments (as defined below), reduced by the minimum amount
necessary to prevent any portion of the Payments from being an “excess parachute
payment” (within the meaning of Code Section 280G) (the “Capped Payments”),
whichever of the foregoing amounts results in the receipt by Employee, on an
after-tax basis, of the greatest amount of Payments notwithstanding that all or
some portion of the Payments may be subject to the Excise Tax.  For purposes of
determining whether Employee would receive a greater after-tax benefit from
receipt of the Capped Payments than from receipt of the full amount of the
Payments, (i) there shall be taken into account any Excise Tax and all
applicable federal, state and local taxes required to be paid by Employee in
respect of the receipt of such payments and (ii) such payments shall be deemed
to be subject to federal income taxes at the highest rate of federal income
taxation applicable to individuals that is in effect for the calendar year in
which the benefits are to be paid, and state and local income taxes at the
highest rate of taxation applicable to individuals in the state and locality of

 

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Employee’s residence on the effective date of the Section 280G Transaction, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes (as determined by assuming that such
deduction is subject to the maximum limitation applicable to itemized deductions
under Code Section 68 and any other limitations applicable to the deduction of
state and local income taxes under the Code).

 

(b)                                 In the event that Section 10(a) applies and
a reduction is required to be applied to the Company Payments thereunder, the
Company Payments shall be reduced by the Company in its reasonable discretion in
the following order and in a manner that complies with Code Section 409A (as
determined by the Company): (i) reduction of any cash payments otherwise payable
to Employee that are exempt from Code Section 409A; (ii) reduction of any cash
payments otherwise payable to Employee that are subject Code Section 409A on a
pro-rata basis or such other manner that complies with Code Section 409A, as
determined by the Company, (iii) cancellation of accelerated vesting of equity
awards (other than stock options) that are exempt from Code Section 409A;
(iv) cancellation of accelerated vesting of stock options that are exempt from
Code Section 409A; and (v) reduction of any other payments and benefits
otherwise payable to the Employee by the Company on a pro-rata basis or such
other manner that complies with Code Section 409A, as determined by the
Company.  If acceleration of vesting of Employee’s stock options or other equity
awards is to be reduced pursuant to clauses (iii) or (iv) of the immediately
preceding sentence, such acceleration of vesting shall be accomplished by first
canceling such acceleration for the vesting installment that will vest last and
continuing to the extent necessary by canceling such acceleration for the next
vesting installment with the latest vesting.  For purposes of this Section 10,
the term “Company Payments” means any payments, options, awards or benefits
(including, without limitation, the monetary value of any non-cash benefits and
the accelerated vesting of stock options or restricted stock) under this
Agreement or under any other plan, agreement or arrangement with the Company.

 

(c)                                  All calculations and determinations under
this Section 10, including application and interpretation of the Code and
related regulatory, administrative and judicial authorities, shall be made by an
accounting firm selected by the Company and reasonably acceptable to Employee
which is designated as one of the four largest accounting firms in the United
States (the “Accounting Firm”).  All determinations made by the Accounting Firm
under this Section 10 shall be conclusive and binding on both the Company and
Employee, and the Company shall cause the Accounting Firm to provide its
determinations and any supporting calculations with respect to Employee to the
Company and Employee.  The Company shall bear all fees and expenses charged by
the Accounting Firm in connection with its services.  For purposes of making the
calculations and determinations under this Section 10, after taking into account
the information provided by the Company and Employee, the Accounting Firm may
make reasonable, good faith assumptions and approximations concerning the
application of Code Sections 280G and 4999.  The Company and Employee shall
furnish the Accounting Firm with such information and documents as the
Accounting Firm may reasonably request to assist the Accounting Firm in making
calculations and determinations under this Section 10.

 

11.                                 Indemnity.  The Company shall indemnify and
hold the Employee harmless from any cost, expense or liability arising out of or
relating to any acts or decisions made by the Employee on behalf of or in the
course of performing services for the Company to the same

 

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extent the Company indemnifies and holds harmless other executive officers and
directors of the Company and in accordance with the Company’s certificate of
incorporation, bylaws and established policies.  While employed by the Company
pursuant to this Agreement, the Company agrees to seek to maintain director and
officer liability insurance.  The Company agrees to seek to maintain such
insurance for a period of at least 36 months following the Date of Termination
(as hereinafter defined).  In the event that the Company does not maintain a
director and officer liability policy covering former directors and officers
during such 36-month period, the Company agrees to seek to obtain and maintain
“tail” coverage for director and officer liability with respect to former
directors and officers for a period of up to 36 months after the Date of
Termination.  This indemnification provision is in addition to, and does not
supersede any other agreement of indemnification provided by the Company to
Employee.

 

12.                                 Certain Terms Defined.  For purposes of this
Agreement:

 

(a)                                  The Employee shall be deemed to incur a
“Permanent Disability” if a physical or mental condition occurs and persists
which, in the written opinion of a licensed physician selected by the
Compensation Committee in good faith, has rendered the Employee unable to
perform the Employee’s duties hereunder for a period of 90 days or more and, in
the written opinion of such physician, the condition will continue for an
indefinite period of not less than an additional 90-day period, rendering the
Employee unable to return to the Employee’s duties.  To the extent the
Employee’s Permanent Disability results in any payment hereunder subject to the
requirements of Section 409A(a) of the Code, such payment shall be further
conditioned on the Employee’s Permanent Disability also constituting a
“disability” within the meaning of Regulations Section 1.409A-3(i)(4).

 

(b)                                 “Beneficial Owner” shall have the meaning
given to such term in the Exchange Act and the rules and regulations thereunder.

 

(c)                                  “Cause” means termination upon:  (1) the
willful failure by the Employee to substantially perform his duties with the
Company (other than any such failure resulting from his incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to him by the Board, which demand specifically identifies the
manner in which the Board believes that he has not substantially performed his
duties; (2) the Employee’s willful misconduct that is demonstrably and
materially injurious to the Company, monetarily or otherwise; or (3) the
Employee’s commission of such acts of dishonesty, fraud, misrepresentation or
other acts of moral turpitude as would prevent the effective performance of his
duties.  No act, or failure to act, on the Employee’s part shall be deemed
“willful” unless done, or omitted to be done, by him in bad faith and done or
omitted to be done without the reasonable belief that his action or omission was
in the best interest of the Company.  Notwithstanding the foregoing, the
Employee shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to him a copy of a resolution duly adopted by
the affirmative vote of a majority of the members of the Board at a meeting of
such members (after reasonable notice to him and an opportunity for him,
together with his counsel, to be heard before such members of the Board),
finding that he has engaged in the conduct set forth above in this
subsection (c) and specifying the particulars thereof in detail.

 

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(d)                                 A “Good Reason” shall mean any of the
following:  (i) a reduction of the Employee’s salary as in effect on the date
hereof or as increased pursuant to Section 3; (ii) a relocation of the Company’s
principal executive offices to a location that is more than 50 miles from the
location of the Company’s offices specified in Section 22 of this Agreement that
was not recommended by the Employee to the Board; or (iii) any material breach
by the Company of this Agreement.

 

(e)                                  “Code” means the Internal Revenue Code of
1986, as amended.

 

(f)                                    “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

(g)                                 “Regulations” means the official Treasury
Department interpretation of the Internal Revenue Code.

 

(h)                                 “Separation from Service” means a separation
from service as that term is used in Code Section 409A(a)(2)(i) and the
Regulations thereunder.

 

13.                                 Termination.

 

(a)                                  Death or Disability.  This Agreement shall
terminate automatically upon the Employee’s death or Permanent Disability.

 

(b)                                 Cause.  The Company may terminate the
Employee for Cause.

 

(c)                                  Notice of Termination.  Any termination of
the Employee’s employment by the Company for Cause or by the Employee for Good
Reason shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 22.  In the event of the Employee’s termination
of employment for Good Reason, the Employee shall provide the Notice of
Termination no later than 90 days following the initial existence of the
condition or occurrence of the event purported to constitute Good Reason, and
such Notice of Termination shall specify a Date of Termination that is no
earlier than 30 days after the date of such Notice of Termination.  Any
termination by the Company due to Permanent Disability shall be communicated by
giving written notice of its intention to terminate the Employee’s employment,
and his employment shall terminate after receipt of such notice (“Disability
Effective Date”).  For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon; (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated; and (iii) specifies the Date of
Termination (defined below).

 

(d)                                 Date of Termination.  “Date of Termination”
means the date the Notice of Termination is given (as set forth in Section 22
below) or any later date specified therein (but not more than 60 days after the
giving of the Notice of Termination), as the case may be; provided that (i) if
the Employee’s employment is terminated by the Company for Cause, the Date of
Termination is the date on which the Company gives notice to the Employee of
such termination; (ii) if the Employee’s employment is terminated due to
Permanent Disability, the Date of Termination is the Disability Effective Date;
and (iii) if the Employee’s employment is terminated due to the Employee’s
death, the Date of Termination shall be the date of death.

 

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14.                                 Certain Benefits Upon Termination.

 

(a)                                  If the Employee’s employment with the
Company is terminated for any reason other than for Cause, death or Permanent
Disability or if Employee voluntarily resigns his employment with the Company
for a Good Reason, then the Company following the Date of Termination and for
the Term of this Agreement (“Continuation Period”) (i) shall continue payment of
Employee’s then existing Salary on the same schedule as corresponds to the
regular Company payroll dates in effect on the Employee’s Date of Termination
(with such payment to be treated as a separate payment for purposes of
Section 409A of the Code); (ii) shall at the Company’s expense, continue to
provide Employee with a car at the comparable level provided to Employee prior
to the Date of Termination; (iii) shall pay Employee a performance achievement
bonus under the Company’s Incentive Plan that is proportionately adjusted to
take into account the period of actual service of the Employee during the
Company’s fiscal year in which the Employee’s employment is terminated, provided
that the Compensation Committee certifies in writing that the performance
incentive target for that fiscal year has been achieved and such payment is not
inconsistent with Section 162(m) of the Code and the Regulations thereunder; and
(iv) shall at its expense continue on behalf of the Employee and his dependents
and beneficiaries, the life insurance, disability, medical, dental and
hospitalization benefits provided (x) to the Employee at any time during the
90-day period prior to the Date of Termination or (y) to other similarly
situated employees who continue in the employ of the Company during the
Continuation Period.  The coverage and benefits (including deductibles and
costs) provided in this Section 14(a) during the Continuation Period shall be no
less favorable to the Employee and his dependents and beneficiaries than the
most favorable of such coverages and benefits during any of the periods referred
to in clauses (x) and (y) above.  The Company’s obligations hereunder with
respect to the foregoing benefits shall be limited to the extent that the
Employee obtains any such benefits pursuant to a subsequent employer’s benefit
plans, in which case the Company may reduce the coverage of any benefits it is
required to provide the Employee hereunder so long as the aggregate coverages
and benefits of the combined benefit plans is no less favorable to the Employee
than the coverages and benefits required to be provided hereunder.  This
Section 14(a) shall not be interpreted so as to limit any benefits to which the
Employee, his dependents or beneficiaries may be entitled under any of the
Company’s employee benefit plans, programs or practices following the Employee’s
termination of employment.  During the period of the Continuation Period in
which the Employee and his dependents and beneficiaries are eligible to receive
continued benefits under the Company’s group plans in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Company shall pay the portion of the Employee’s premium payments necessary
to satisfy the requirements of this Section 14(a) with respect to medical,
dental and hospitalization benefits.  With respect to any period during the
Continuation Period in which the Employee or his dependants and beneficiaries
cease to be eligible for COBRA coverage, and with respect to life insurance and
disability benefits for the remainder of the Term for which the Company cannot
make direct premium payments for such benefits in accordance with the
requirements of Section 409A or otherwise, the Employee (or his dependants and
beneficiaries, as applicable) shall pay to the Company, insofar as permitted by
such benefit plans, on an after-tax basis, an amount equal to the full premium
cost of medical, dental, hospitalization, life insurance and disability benefits
coverage.  Within 30 days of such payment, subject to the 409A Reimbursement
Conditions, the Company shall pay to the Employee (or his dependents and

 

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beneficiaries, as applicable) in cash (less required withholding) an amount
equal to full premium cost of medical, dental, hospitalization, life insurance
and disability benefits coverage.

 

(b)                                 In the event Section 14(a) is applicable to
a termination of Employee’s employment, then (i) in addition to the payments
provided therein, the Company shall pay all accrued but unpaid salary, and bonus
and amounts due under the Company’s Incentive Plan or any other bonus or
incentive plan then in effect in accordance with the terms and conditions of
such plans, and all accrued but unpaid or unused vacation, sick pay and expense
reimbursement benefit, and (ii) all other benefits shall vest (unless a plan
specifically provides vesting standards in which event the plan’s terms and
conditions shall govern vesting).

 

(c)                                  To the extent delayed commencement of any
portion of the benefits to which the Employee is entitled under this Section 14
is required in order to avoid a prohibited distribution under
Section 409A(a)(2)(B)(i) of the Code, such portion of the Employee’s termination
benefits shall not be provided to the Employee prior to the earlier of (i) the
expiration of the six-month period measured from the date of the Employee’s
Separation from Service or (ii) the date of the Employee’s death, and if any
such benefit payments are suspended pursuant to clause (i), the full amount of
such payments shall be paid in a lump sum on the day immediately following the
expiration of such six-month period.

 

(d)                                 In the event the Employee is entitled
hereunder to any payments or benefits set forth in Section 14(a), the Employee
shall have no obligation to notify Company of employment subsequent to the
Employee’s termination or to offset (except to the extent required by
Section 14(a)) the Company’s obligation by payments due to such employment and
shall have no duty to mitigate.

 

15.                                 Emeritus Period.  Following Separation from
Service and continuing during his lifetime (“Emeritus Period”), Employee shall
have the title of “Founder” of the Company.  If Employee was not terminated for
Cause, Employee shall also have the title of “Chairman Emeritus” during the
Emeritus Period.  During the Emeritus Period, the Employee shall receive no
monetary compensation unless otherwise agreed to by the Company and the
Employee, but the Company, provided that Employee was not terminated for Cause,
shall insofar as feasible provide to Employee, for a period of up to 10 years,
an office in the Company’s executive suite and the assistance of a secretary;
provided, however that if Employee is in “competition” with the Company during
any time period that Employee is being provided such office and/or the
assistance of a secretary (competition shall be defined herein as engaging in
any conduct which violates Sections 20(a), (b), or (d) or in the event such
section(s) are not then effective, would violate such section(s) if such
section(s) were then effective), the Company may in its discretion terminate the
provision of an office and/or the assistance of a secretary.  It is anticipated
that during any period that Employee is being provided with an office and/or the
assistance of a secretary that Employee shall, at his discretion, promote the
brand, business and reputation of the Company.  In no event shall any such
services provided by Employee during the period that he is provided with an
office and/or the assistance of a secretary equal or exceed 20% of the average
level of bona fide services performed by the Employee during the preceding 36
month period.  If the Employee was not terminated for Cause, the Employee shall
also have unlimited dining privileges at all restaurant concepts of the Company
during the Emeritus Period.

 

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16.                                 Founder’s Retirement Benefit.

 

(a)                                  In addition to all amounts otherwise
payable under this Agreement, the Company shall pay the Employee, during his
lifetime or in the event of his death the Employee’s designated beneficiary or
his estate if no beneficiary is designated, a retirement benefit in the annual
amount of six hundred and fifty thousand dollars ($650,000) for a period of ten
(10) years (“Founder’s Retirement Benefit”) payable in equal monthly
installments.

 

(b)                                 Payment of the Founder’s Retirement Benefit
shall commence on the first regular Company payroll date occurring at the later
of the end of the Term of this Agreement or at least six (6) months and one day
after Separation from Service.  The Founder’s Retirement Benefit shall be
payable from the general, unrestricted assets of the Company, and the Employee
shall be an unsecured general creditor of the Company.  The Company’s
obligations hereunder are an unfunded, unsecured promise to pay benefits in the
future, and the Employee shall have no right or interest in any specific assets
of the Company by virtue of this obligation.  No trust shall be construed to
have been created by this Section 16, nor shall any fiduciary relationship be
construed to exist between the Company and the Employee.  If the Company, in its
sole discretion, elects to fund its obligations to pay the Founder’s Retirement
Benefit through the purchase of one or more insurance policies, the Employee
shall have no rights in such policy or policies, or the proceeds thereof.  The
Company shall be the sole owner and beneficiary of said policy or policies, and
shall hold all incidents of ownership.  The Founder’s Retirement Benefit is
nontransferable, and the Employee shall not assign, transfer, or otherwise
encumber any payments made hereunder except for a properly executed written
beneficiary designation.  Any attempt to transfer or assign benefits shall be
null and void, and shall terminate the Company’s obligations under this
Agreement.  The Company shall have the right to deduct and pay over from all
Founder’s Retirement Benefit payments hereunder any federal, state, local or
employment taxes which it deems are required by law to be withheld with respect
to such payments.

 

17.                                 Fees and Expenses.  The Company shall pay
all reasonable legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by the Employee as they become due as a result of
(a) the Employee’s termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or
employment), or (b) the Employee seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company under which the Employee is or may be entitled to
receive benefits.  In the event the Company is the prevailing party in any such
proceeding, except for fees and costs of arbitration and any type of costs that
are unique to arbitration, the Company shall be awarded the legal fees and
related expenses it has incurred on behalf of Employee pursuant to this
Section 17.

 

18.                                 No Set Off, Interest.  Except as provided
herein, the Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including without limitation any set-off,
counterclaim, recoupment, defense or other right which the Company may have
against the Employee or others.  All amounts provided herein shall include, in
each case, interest, compounded quarterly, on the total unpaid amount determined
to be payable under this Agreement, such interest to be calculated on the basis
of the prime commercial lending rate

 

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announced by Bank of America National Trust and Savings Association in effect
from time to time during the period of such nonpayment.

 

19.                                 Assignment.

 

(a)                                  This Agreement is personal to each of the
parties hereto.  No party may assign or delegate any rights or obligations
hereunder without first obtaining the written consent of the other party hereto,
except that this Agreement shall be binding upon and inure to the benefit of any
successor corporation to the Company.

 

(b)                                 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 this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.  As used in this Agreement, “Company” shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes this Agreement by operation of law, or otherwise.

 

(c)                                  This Agreement shall inure to the benefit
of and be enforceable by the Employee and his personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

 

20.                                 (a)                                 
Confidential Information.  During the Term of this Agreement and thereafter, the
Employee shall not, except as may be required to perform his duties hereunder or
as required by applicable law, 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 and that was learned by the Employee in the course of his
employment by the Company, including (without limitation) any data, formulae,
information, proprietary knowledge, trade secrets and client and customer lists
and all papers, resumes, records and the documents containing such Confidential
Information.  The Employee 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, the Employee will promptly deliver to the Company all documents
(and all copies thereof) containing any Confidential Information.

 

(b)                                 Noncompetition.  The Employee agrees that
during the Term of this Agreement and for a period of two (2) years thereafter
(to the fullest extent permitted under applicable law), he will not, directly or
indirectly, without the prior written consent of the Company, provide
consultative service with or without pay, 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;
provided, however, that the “beneficial ownership” by the Employee, either
individually or as a member of a “group,” as such terms are used in Regulation
13D of the Exchange Act, of not more than 1% of the voting stock of any publicly
held corporation shall not be a violation of this Agreement.  Notwithstanding
the foregoing, Employee, subject to prior written consent by the Board, which
consent shall not be

 

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unreasonably withheld, may be a member of the board of directors of one or more
other restaurant companies provided that such other company or companies is/are
not a significant or direct competitor of the Company and provided further that
Employee’s acceptance of any other directorship position while a director of the
Company is not in violation of applicable laws or the Company’s policies or
procedures concerning the board of director positions.  It is further expressly
agreed that the Company will or would suffer irreparable injury if the Employee
were to compete with the Company or any subsidiary or affiliate of the Company
in violation of this Agreement and that the Company would by reason of such
competition be entitled to injunctive relief in a court of appropriate
jurisdiction, and the Employee further consents and stipulates to the entry of
such injunctive relief in such a court prohibiting the Employee from competing
with the Company or any subsidiary or affiliate of the Company in violation of
this Agreement.

 

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

 

(d)                                 Antisolicitation.  The Employee promises and
agrees that during the Term of this Agreement, and for a period of two years
thereafter, he will not influence or attempt to influence customers,
franchisees, landlords, or suppliers of the Company or any of its subsidiaries
or affiliates, either directly or indirectly, to divert their business to 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.

 

21.                                 Deferred Compensation.  The parties agree
that all provisions of this Agreement are intended to meet, and to operate in
accordance with, in all material respects, the requirements of paragraphs (2),
(3), and (4) of Section 409A(a) of the Code, and any guidance from the
Department of Treasury or Internal Revenue Service thereunder, including any and
all specifically referenced Regulation Sections contained in the Agreement, but
only to the extent any compensation or benefits provided hereunder are not
excepted or excluded from such requirements pursuant to the short-term deferral
exception described in Regulations Section 1.409A-1(b)(4), the involuntary
separation pay plan exception described in Regulations
Section 1.409A-1(b)(9)(iii), or otherwise.  Where ambiguity or uncertainty
exists, this Agreement shall be interpreted in a manner which would qualify any
compensation payable hereunder to satisfy the requirements for exception to or
exclusion from Section 409A and the taxes imposed thereunder.

 

In the event either party reasonably determines any item payable by the Company
to the Employee pursuant to this Agreement that is not subject to a substantial
risk of forfeiture would not meet, or is reasonably likely not to meet, the
requirements of paragraphs (2), (3) and (4) of Section 409A, or to qualify as
excepted or excluded from Section 409A, such party shall notify the other in
writing.  Any such notice shall specify in reasonable detail the basis and
reasons for such party’s determination.  The parties agree to negotiate in good
faith the terms and conditions of an amendment to this Agreement and to avoid
the inclusion of such item in a tax year before the Employee’s actual receipt of
such item of income.  Provided, however, nothing in this

 

11

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Section 21 shall be construed or interpreted to require the Company to increase
any amounts payable to the Employee pursuant to this Agreement or to sent to any
amendment that would materially and adversely change the Company’s financial,
accounting or tax treatment of the payments to the Employee under this
Agreement.  Any item payable under this Agreement that the Company reasonably
determines is subject to Section 409A(a)(2)(B)(i) of the Code, shall not be paid
or commence payment before the later of (a) six months after the date of the
Employee’s Separation from Service and (b) the payment date or commencement date
specified in this Agreement for such item.

 

22.                                 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 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, except that notice of a change of address shall be
effective only upon actual receipt:

 

Company:

The Cheesecake Factory Incorporated

 

26901 Malibu Hills Road

 

Calabasas Hills, California 91301

 

 

With a copy to:

The Secretary of the Company

 

 

Employee:

David M. Overton

 

26901 Malibu Hills Road

 

Calabasas Hills, California 91301

 

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

 

24.                                 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.

 

25.                                 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.

 

26.                                 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.

 

27.                                 Arbitration.  Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration, conducted before a panel of three arbitrators in Los Angeles,
California, in accordance with the rules of the American Arbitration Association
then in effect.  Judgment may be entered on the arbitrator’s award in any court
having jurisdiction.

 

12

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28.                                 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 the Employee 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 or the Code and any rules or regulations thereunder
shall be deemed also to refer to any successor provisions to such sections.  All
references to the Compensation Committee shall be deemed also to refer to any
committee of the Board however designated that performs similar functions.

 

Any payments provided for hereunder shall be paid net of any applicable
withholding required under federal, state or local law.  The provisions of this
Agreement that may be reasonably interpreted as surviving termination of this
Agreement, including Sections 11, 12, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 27,
shall continue in effect after termination and/or expiration of this Agreement.

 

[Remaining of page intentionally left blank]
[Next page is the signature page]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement on
the date indicated next to their signatures below.

 

 

 

COMPANY:

 

 

 

 

 

THE CHEESECAKE FACTORY INCORPORATED,

 

 

a Delaware corporation

 

 

 

 

 

 

July 14, 2009

 

By:

/s/ Debby Zurzolo

Dated

 

 

DEBBY ZURZOLO,

 

 

 

Executive Vice President, Secretary and General Counsel

 

 

 

 

 

 

July 13, 2009

 

EMPLOYEE:

Dated

 

 

 

 

 

 

 

/s/ David Overton

 

 

DAVID OVERTON

 

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