EXHIBIT 10.2


 


THE CHEESECAKE FACTORY INCORPORATED


 


ANNUAL MANAGEMENT PERFORMANCE INCENTIVE PLAN


 


I.                   STATEMENT
OF PURPOSE


 


The purposes of this discretionary annual bonus Plan
are to:


 


a)             challenge
selected employees who are not Covered Employees (“Eligible Participants”) to
make decisions and to take actions to advance the Company to meet its goals;


 


b)             retain and
motivate Eligible Participants;


 


c)              focus
management’s attention on setting and achieving clearly defined and attainable
corporate and business unit performance objectives; and


 


d)             provide
incentive compensation that is based on performance.


 


II.              DEFINITIONS


 


The
following terms, when used herein, shall have the meanings indicated in this Section unless
different meanings are clearly required by the context of the Plan.


 


2.1                            Award: “Award” means
any discretionary bonus, award, or other compensation granted to a Participant
under the terms of this Plan.


 


2.2                            Base
Salary: “Base Salary” means the aggregate annualized base salary of a
Participant received (or to be received) from the Company and all of its
subsidiaries with respect to a Fiscal Year exclusive of any commissions or
other actual or imputed income from any Company-provided benefits or
perquisites, other bonuses or incentive awards by the Company and calculated
prior to any reductions for salary deferrals pursuant to any deferred
compensation plan or contributions qualifying under Section 401(k) of
the Code.


 


2.3                            Board: “Board” means
the Board of Directors of the Company.


 


2.4                            Code: “Code” means
the Internal Revenue Code of 1986, as amended.


 


2.5                            Committee: “Committee”
means a committee of one or more Board members selected by the Board or by the
Board’s Compensation Committee.  If no
such committee is affirmatively selected then the Board’s Compensation
Committee shall serve as the Committee. 
To the extent permitted under the Company’s corporate governance
policies and charters, the Committee may delegate limited administrative
authority under this Plan to authorized Company officers.


 


2.6                            Company: “Company”
means The Cheesecake Factory Incorporated, a Delaware corporation, and any
related or successor organization that adopts this Plan.


 


2.7                            Covered
Employee: “Covered Employee” means an individual whose
compensation is subject to the limitations based on the dollar amount set forth
in Code Section 162(m)(l).


 


2.8                            Disability: “Disability”
means, except as may otherwise be provided in a Participant employment
agreement or applicable Award agreement (and in such case the employment
agreement or Award agreement shall govern as to the definition of Disability),
that the Participant is classified as disabled under a long-term disability
policy of the Company or, if no such policy applies, the Participant is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.


 













 


2.9                            Effective
Date: “Effective Date” means December 31, 2010


 


2.10                     Employee: “Employee”
means a common law employee of the Company or of any subsidiary or affiliate of
the Company.


 


2.11                     Fiscal
Year: “Fiscal Year” means the annual fiscal accounting period adopted by
the Company for tax purposes.


 


2.12                     Participant: “Participant”
means any Employee who has been selected by the Committee to become a
Participant in the Plan under Section III hereof.


 


2.13                     Performance
Achievement Bonus: “Performance Achievement Bonus” means, subject to
the terms and conditions set forth in the Plan, a discretionary bonus amount
that is equal to a stated percentage of a Participant’s Base Salary (or equal
to some other amount determined by the Committee) which may be awarded as an
Award to a Participant as a result of achievement of the Performance Incentive
Target(s) established for the Participant by the Committee as set forth in
Section 4.1.


 


2.14                     Performance
Incentive Target: “Performance Incentive Target” means one or more
objective performance targets established for a Participant for a Fiscal Year
which may be described in terms of Company-wide objectives and/or objectives
that are related to the performance of the individual Participant or the
Company or any Company parent, subsidiary, affiliate, division, department or
function within the Company or entity in which the Participant is employed, and
such targets may be applied either individually, alternatively or in any
combination, and measured either annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established target, to
previous years’ results or to a designated comparison group, in each case as
specified by the Committee.  Any
Performance Incentive Target applicable to Awards may include without
limitation one or more of the following target objectives:  (i) return on equity, (ii) earnings
per share, (iii) net income, (iv) earnings per share growth, (v) return
on invested capital, (vi) return on assets, (vii) economic value
added, (viii) earnings before interest and taxes (EBIT), (ix) revenue
growth, (x) gross margin return on inventory investment, (xi) fair
market value or price of the Company’s shares (including, but not limited to,
growth measures and total stockholder return), (xii) operating profit, (xiii) consolidated
income from operations, (xiv) cash flow (including, but not limited to,
cash flow from operations and free cash flow), (xv) cash flow return on
investments (which equals net cash flow divided by total capital), (xvi) internal
rate of return, (xvii) net present value, (xviii) costs or expenses, (xix) market
share, (xx) guest satisfaction, (xxi) corporate transactions
including without limitation mergers, acquisitions, dispositions and/or joint
ventures, (xxii) product development, (xxiii) capital expenditures, (xxiv) earnings
before interest, taxes, depreciation and amortization (EBITDA), and/or (xxv) revenues.


 


2.15                     Plan: “Plan” means
The Cheesecake Factory Incorporated Annual Management Performance Incentive
Plan, as described herein, and all subsequent amendments thereto.


 


2.16                     Regulations: “Regulations”
means the Income Tax Regulations promulgated under the Code, as such
regulations may be amended, and other formal guidance issued by the Internal
Revenue Service.


 


2.17                     Separation
from Service: “Separation from Service” means a “separation from
service” as defined under Code Section 409A and the Regulations.


 


III.         PARTICIPATION


 


3.1                            Eligibility: Each Fiscal
Year, the Committee, in its sole discretion but subject to the next sentence
herein, shall affirmatively designate those Employees who shall be eligible to
receive an Award under the Plan for that Fiscal Year, which designation may be
made by reference to the Employees position within the Company.  Eligible Participants may not include
Employees of the Company (or Company subsidiary) who are Covered Employees with
respect to such Fiscal Year.


 


3.2                            Participation: Each eligible
Employee shall become a Participant in the Plan as of the date designated by
the Committee in its discretion.


 


IV.          INCENTIVE
AWARDS


 


4.1                            Performance
Achievement Bonus: The Committee shall establish the specific
Performance Incentive Target for a Participant for a Fiscal Year which must be
achieved in order to earn a Performance Achievement Bonus (or designated
portion thereof) and any applicable formula for computing the Performance
Achievement Bonus (or designated portion thereof) if such Performance Incentive
Target is achieved.  All Performance
Achievement Bonus amounts shall be determined by the Committee.  Notwithstanding achievement or failure to
achieve the Performance Incentive Targets, the Committee shall at all times
have 


 













 


reserved for itself the discretionary ability to
adjust (or eliminate) at any time and for any reason the amount of a
Performance Achievement Bonus for any or all Participants unless the Committee
has expressly relinquished such rights in writing.


 


4.2                            Committee
Certification: The Committee shall determine whether the
Performance Incentive Target is achieved, and, if so, the Committee shall
certify prior to the payment of any Performance Achievement Bonus (or
designated portion thereof) for such Fiscal Year, the degree to which a
Performance Achievement Bonus will be paid with respect to each Participant.


 


4.3                            Modification
of Performance Incentive Target and Formula: After the Committee has
established and approved the Performance Incentive Target(s) which must be
achieved in order for the Performance Achievement Bonus (or designated portion
thereof) to be earned and the formula for computing the Performance Achievement
Bonus (or designated portion thereof), with respect to a Fiscal Year, the
Committee may nevertheless at any time modify such Performance Incentive Target(s) or
formula for computing the Performance Achievement Bonus with respect to such
Fiscal Year in its sole discretion, including, without limitation, for the
reasons provided in Section 5.4 below.


 


4.4                            Form and
Timing of Bonus: Each Performance Achievement Bonus shall be
payable to the Participant in cash and such payment date shall occur following
the end of the applicable Fiscal Year, as soon as administratively
feasible.  Payment of any Participant’s
Performance Achievement Bonus is conditioned upon such Participant remaining an
Employee in good standing through the date of payment.


 


V.               ADMINISTRATION


 


5.1                            Administration
by the Committee: The Plan shall be administered by the
Committee.  The Committee has the
authority to interpret the Plan, the terms of any document relating to any
Award and may adopt such rules and regulations for carrying out the terms
and purposes of the Plan and may take such other actions in the administration
of the Plan as it deems advisable.  The
interpretation and construction by the Committee of any provision of the Plan,
any document evidencing an Award, and any rule or regulation or decision
or determination adopted by the Committee shall be final and binding on all
persons and shall be afforded the maximum deference provided by applicable
law.  The Committee may, as a condition
of an Award, require that a Participant execute and deliver to the Company
applicable documents or agreements evidencing such Award.  To the maximum extent permitted by applicable
law, each member of the Committee, and of the Board, and any persons (including
without limitation employees and officers) who are delegated by the Board or
Committee to perform administrative functions in connection with this Plan,
shall be indemnified and held harmless by the Company against and from (i) any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan or
any Award agreement and (ii) from any and all amounts paid by him or her
in settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she
undertakes  to handle and defend it on
his or her own behalf.  The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.


 


5.2                            Pro-Rata
Awards: The Committee shall have the authority to grant a Performance
Achievement Bonus that is proportionately or otherwise adjusted based on and
consistent with the Performance Incentive Targets to take into account the
period of actual service of a Participant that became eligible to join the Plan
after the beginning of the Fiscal Year.


 


5.3                            Unforeseen
Circumstances or Change in Control: In the event of a
Participant’s Separation from Service by reason of death, Disability, normal
retirement, early retirement with the consent of the Company or leave of
absence approved by the Company, or in the event of hardship or other special
circumstances of a Participant, or in the event of a change in control of the
Company, or for any other reason, the Committee may in its sole discretion take
any action that it deems to be equitable under the circumstances or in the best
interests of the Company.


 


5.4                            Adjustments: The Committee
may adjust the evaluation of performance under a Performance Incentive Target(s) to
remove the effects of certain events including without limitation the
following:


 


i)                                            asset
write-downs or discontinued operations,


 


ii)                                         litigation or
claim judgments or settlements,


 













 


iii)                                      material
changes in or provisions under tax law, accounting principles or other such
laws or provisions affecting reported results,


 


iv)                                     reorganizations
or restructuring programs or divestitures or acquisitions, and/or


 


v)                                        extraordinary
non-recurring items as described in applicable accounting principles and/or
items of gain, loss or expense determined to be extraordinary or unusual in
nature or infrequent in occurrence.


 


5.5                                Amendment or
Termination of Plan: The Plan may be amended or terminated in whole or in part
by the Board in its sole discretion, and any such action may include reducing
or eliminating any future payments under this Plan notwithstanding any prior
achievement of Performance Incentive Targets.


 


VI.          MISCELLANEOUS


 


6.1                            Assignability: No
Participant shall have the right to pledge, assign or otherwise dispose of any
unpaid portion of any Award.


 


6.2                            Expenses: Except as
otherwise provided under the provisions of the Plan, all costs and expenses in
connection with the administration of the Plan shall be paid by the Company.


 


6.3                            Gender: The masculine
pronoun wherever used includes the feminine pronoun.


 


6.4                            Governing
Laws: The Plan shall be construed, administered and enforced according to
the laws of the United States and the laws of the State of Delaware to the
extent the latter are not preempted by the former.


 


6.5                            No
Guarantee of Employment: Nothing in this Plan shall be construed as
giving any Employee an agreement or understanding, express or implied, that the
Company or any subsidiary shall continue to employ any individual, whether or
not a Participant in the Plan.


 


6.6                            No
Right to Award: Unless otherwise expressly set forth in any
employment agreement signed by the Company and a Participant, a Participant
shall not have any right to any Award hereunder until such Award has been paid
to such Participant and participation in the Plan in one Fiscal Year does not
connote any right to become a Participant in the Plan in any future Fiscal
Year.


 


6.7                            Payment
of Taxes: The Company shall have the right to withhold from
any payment to a Participant under this Plan, in cash, all federal, state, city
or other taxes as shall be required pursuant to any statute or governmental
regulations or ruling.  In connection
with such withholding, the Company may make any arrangement consistent with
this Plan, as it may deem appropriate. 
The Company and its Employees (or members of the Board or Committee)
shall not be liable to a Participant or other persons as to any unexpected or
adverse tax consequence or any tax consequence expected, but not realized, by
any Participant or other person due to the grant, receipt, exercise or
settlement of any Award granted hereunder.


 


6.8                            Section Headings: The headings
of this Plan have been inserted for convenience of reference only and are to be
ignored in any construction of the provisions hereof.


 


6.9                            Severability: In the event
any provision of this Plan shall be considered illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining provisions
of this Plan, but shall be fully severable, and the Plan shall be construed and
enforced as if said illegal or invalid provisions had never been inserted
therein.


 


6.10                     Term of
Plan: This Plan shall remain in effect from the Effective Date until
terminated or amended by the Board.


 


6.11                     Code Section 409A: Notwithstanding
anything in the Plan to the contrary, the Plan and Awards granted hereunder are
not intended to be nonqualified deferred compensation and therefore are
intended to be exempt from the requirements of Code Section 409A and shall
be interpreted in a manner consistent with such intention.  However, notwithstanding such intention, if
upon a Participant’s Separation from Service, such Participant is then a “specified
employee” (as defined in Code Section 409A), then solely to the extent
necessary to comply with Code Section 409A and avoid the imposition of
taxes under Code Section 409A, the Company shall defer payment of “nonqualified
deferred compensation” subject to Code Section 409A payable as a result of
and within six (6) months following such Separation from Service under
this Plan until the earlier of (i) the first business 


 













 


day of the seventh month following
Participant’s Separation from Service, or (ii) ten (10) days after
the Company receives written confirmation of Participant’s death.  Any such delayed payments shall be made
without interest.


 


6.12                     Non-Exclusive: The adoption
of this Plan by the Board (i) does not create any limitation on the power
of the Committee or the Board to adopt other cash or equity-based compensation
programs outside of this Plan and (ii) shall not be construed as creating
any limitations on the power of the Board of or the Committee to adopt such
other incentive arrangements as either may deem desirable, including, without
limitation, cash or equity-based compensation arrangements, either tied to
performance or otherwise, and any such other arrangements as may be either
generally applicable or applicable only in specific cases.


 


6.13                     Clawback
Policy: The Committee may (i) cause the cancellation of any Award, (ii) require
reimbursement of any Award by a Participant and (iii) effect any other
right of recoupment of equity or other compensation provided under this Plan or
otherwise in accordance with Company policies and/or applicable law (each, a “Clawback
Policy”), in each case with respect to the Clawback Policy that was in effect
as of the date of grant for a particular Award. 
In addition, the Committee may require that a Participant repay to the
Company certain previously paid compensation, whether provided under this Plan
or an Award Agreement or otherwise, in accordance with the Clawback Policy.


 


VII.                          EXECUTION
OF PLAN


 


IN
WITNESS WHEREOF, the Company has hereunder caused its name to be signed by its
duly authorized officers this ____ day of September, 2010.


 


	
   

  	
  THE
  CHEESECAKE FACTORY INCORPORATED, 

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  David
  Overton

  Chairman of the Board, 

  Chief
  Executive Officer and President