Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


This
EMPLOYMENT AGREEMENT (the “Agreement”)
is entered into and effective as of the
11th day of
February, 2010 (the “Effective Date”),
between THE CHEESECAKE FACTORY INCORPORATED, a Delaware corporation (the “Company”) and MICHAEL E. JANNINI (the “Executive”).


 


WHEREAS,
on February 11, 2010, the Board of Directors (the “Board”) of the Company appointed Mike Jannini as the President of
the Company;


 


WHEREAS,
on February 11, 2010, the Compensation Committee (the “Compensation Committee”) of the Board
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;


 


WHEREAS,
all capitalized terms used herein shall have the meaning set forth in Section 8
of this Agreement unless otherwise expressly defined herein.


 


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 of the Company. 
In such capacity, the Executive shall have such duties and responsibilities
to the Company and its Affiliates 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 Affiliates.  The Executive shall report directly to the
Chief Executive Officer of the Company. 
While employed by the Company during the Term of this Agreement, without the prior written approval of the
Chief Executive Officer, 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 or as a
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, provided
that the time and attention Executive provides to such organization does not
interfere with Executive’s working time, attention and energies that he
is required to devote to the business and affairs of the Company and Affiliates.  


 

















 


2.             Term.  The initial “Term of this Agreement” shall mean the two-year period commencing
on February 16, 2010 and ending on February 15, 2012.  On such date and on
each subsequent February 15th thereafter,
the Term of this Agreement shall be automatically extended for one additional
calendar year unless, at least ninety (90) days prior to February 15th 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 two-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 Five Hundred
Fifty Thousand Dollars ($550,000), 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, but in no event shall Executive’s
Annual Salary be decreased during the one (1) calendar year period
commencing with the Effective Date.  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 any 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 One Hundred  Thousand
(100,000) non-qualified stock options, which stock options shall vest twenty
percent (20%) each year over a five-year period on the first (1st), second (2nd), third (3rd), fourth (4th), and fifth (5th) anniversary dates of the
grant date, respectively, subject to the Company meeting certain performance
criteria, if any, as described in Executive’s Notice of Grant and Agreement, at
an exercise price equal to fair market value of the Company’s stock on the date
of grant, plus Fifty Thousand (50,000)
restricted shares of the Company’s stock, which restrictions lapse at the rate
of sixty percent (60%) on the 3rd anniversary
of the grant date, and twenty (20%) each on the fourth and fifth (5th) anniversary date of the
grant date, respectively, all in accordance with the terms and conditions of
The Cheesecake Factory Incorporated 2001 Omnibus Stock Incentive Plan (“2001
Stock Plan”), stock retention requirements applicable to certain other
Executive Officers of the Company, and the Notice of Grant and Agreement
granting such equity awards to Executive.


 


Executive
also shall be eligible for consideration for future equity awards, in
accordance with the terms and conditions of The Cheesecake Factory Incorporated
2001 Stock 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 number of awards, vesting
schedule, and other requirements applicable to such awards, if any are granted,
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.  While employed by the Company during the Term
of this Agreement, the Executive shall be entitled to participate equitably with
and upon terms no less favorable than
those applicable to other Executive Officers in any plan of the Company
relating to pension, profit sharing, life insurance, disability income insurance, education, or other retirement or
employee benefits that the Company has adopted or may adopt for the benefit of
its Executive Officers, if any, to the extent eligible thereunder by virtue of
the Executive’s position, tenure and salary. While employed by the Company
during the Term of this Agreement, Executive shall be eligible to participate
in any bonus award program, in accordance with the terms of any such program,
established for Executive Officers. The Compensation Committee shall determine
the amount and timing of awards, if any, under the Company’s bonus plans.


 


(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 who have been at the Company for a commensurate period of
time as the Executive, 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 pay for reasonable temporary
accommodations in the Calabasas Hills, California area, not to exceed a period
of three months in total, while
Executive seeks permanent housing arrangements. The Company also shall
reimburse Executive for his relocation expenses by making the following
payments to Executive to assist in his relocation from the Washington D.C. area
to the greater Los Angeles Metropolitan area, which amounts shall be Executive’s
sole reimbursement from the Company for relocation: (i)  reimburse up to
two visits from the Washington DC area to the Los Angeles Metropolitan Area,
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 housing in the
greater Los Angeles Metropolitan Area;   (ii) reimburse customary moving expenses
incurred for the packing, shipping and unpacking of household goods from
Washington D.C. to Los Angeles County; and (iii)  make a one time payment to
Executive of Sixty Five Thousand dollars ($65,000), subject to all applicable
taxes and withholdings, payable within two weeks of the Effective Date.  If Executive voluntarily terminates his
employment with the Company within two years
from the Effective Date of this
Agreement, Executive agrees to reimburse the Company in the gross amount equal
to the sum of Sixty Five Thousand Dollars ($65,000), less the amount derived by
multiplying Sixty Five Thousand dollars ($65,000) by a fraction, the numerator
of which is the number of full or
partial calendar months of employment completed with the Company as of
the Date of Termination and the denominator of which is 24 provided, however,
such reimbursement payment shall not be required if Executive terminates
employment as a result of a termination Without Cause by the Company or a
termination by Executive that constitutes a Constructive Termination (both as
defined below).


 


5.             Health Insurance Premiums; Fringe
Benefits.  While
employed by the Company during the Term of this Agreement, Executive and his dependants shall be
entitled to participate and 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 dependants under
the Company’s employee medical insurance policies to the extent provided to other Executive
Officers of the Company and based upon the most comprehensive medical, dental
and vision care insurance plan then 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,  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 and upon terms no less favorable than those upon which 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 Company maintained
liability insurance (in accordance with the coverage, if any, provided by such
insurance), 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.


 


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


 


(d)           “Cause” means the occurrence of any of the following
events: (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 notice of failure to perform from the Company,
which notice specifically identifies the basis for the Company’s belief that
the Executive has not substantially performed the Executive’s duties, provided
however, with respect to only nonmaterial breaches of Executive’s duties, the Executive’s failure to perform such
duties shall not be deemed to be an event of “Cause” unless such failure
continues uncured for thirty (30) days after delivery to Executive of written
notice thereof from the Company, which notice specifically identifies the basis
for the Company’s belief that such failure to perform has occurred, and
Executive’s failure to cure within thirty (30) days thereafter; (ii) incompetence


 

















 


or gross negligence committed by Executive in the discharge of the Executive’s duties; (iii) Executive’s commission of any dishonesty, act of theft, embezzlement, or fraud; (iv) Executive’s breach of
confidentiality in violation of law or
of the Company’s policies and procedures applicable to Executive Officers; (v) 
Executive’s unauthorized disclosure or use of inside or proprietary information, recipes,
processes, customer or employee lists, or
trade secrets of the
Company in violation of law or of the
Company’s policies and procedures applicable to Executive Officers; (vi) Executive’s willful or material violation of any law, rule or
regulation of any governing authority; or (vii) Executive’s willful or
material violation of the Company’s policies and procedures applicable to Executive Officers,
including, without limitation, the Company’s Code of Ethics and Code of Conduct
applicable to Executive Officers (viii) Executive’s intentional conduct
that is injurious to the
reputation, business or assets of the Company; or (ix) except as may be
permitted under Section 15 below, Executive’s solicitation of the Company’s
consultants or-employees to work
for any business other than for the Company or its Affiliates during the Term
of this Agreement without the knowledge and consent of the Chief Executive
Officer of the Company.


 


(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 50% (or 33
1/3% if acquired during a 12 month period) 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,
consolidation, combination,
recapitalization or other reorganization of the Company with any other
corporation (or other entity) (a “Transaction”), other than:


 


(1)           a
Transaction 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 and/or such
surviving entity outstanding immediately after such merger or consolidation;


 


(2)           a
Transaction 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 Transaction 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 Transaction (determined
without taking into account any stockholders properly exercising appraisal or
similar rights) become stockholders by the terms of such Transaction, and the
phrase “directors of the Company (who were directors immediately prior thereto)”
shall include only individuals who were directors of the Company at the
beginning of the 24 consecutive month period preceding the date of such
Transaction.


 


(iii)          the stockholders of the
Company approve a plan of complete liquidation or an agreement for the sale, lease, transfer or the disposition of all or
substantially all of the Company’s assets in a single transaction or a series of related transactions during any
twelve (12) consecutive month period; or


 

















 


(iv)          during any period of twelve
(12) 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, subject to Executive
providing the notice described below and the Company’s failure to cure within
the cure period provided below after receipt of such notice, the occurrence of
one or more of the following events without the Executive’s written consent: (i) a material 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) material diminution in Executive’s
title, authority, duties or
responsibilities relative to the Executive’s title, authority duties or responsibilities in effect immediately prior
to such reduction; or (iii) a material
diminution in Executive’s Annual Salary or base compensation including without limit a material diminution
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.  Notwithstanding the foregoing, no
Constructive Termination shall be deemed to have occurred or exist hereunder
unless (a) Executive provides the Company with written notice of the
occurrence of the event or initial existence of the condition constituting same
within sixty (60) days of such occurrence or initial existence of such
condition, (b) the Company fails to remedy such occurrence or existence of
such condition within thirty (30) days after receipt of the foregoing notice
from Executive, and (c) Executive invokes such occurrence or initial
existence of such condition and separates from the Company’s service by reason
thereof within one hundred (100)  days
following such occurrence or initial existence of such condition.


 


(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 Termination shall be the date of death. 
The Company’s receipt of a notification by Executive of a Constructive
Termination shall not be deemed to constitute the Company’s acknowledgement,
agreement or admission that a Constructive Termination has occurred.


 


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


 


(j)            “Executive Officer” means a person
who is an executive vice president, general counsel, chief financial officer,
president, or chief operating officer of the Company, or a President of The
Cheesecake Factory Restaurants, Inc or The Cheesecake Factory Bakery
Incorporated.


 


(k)           “Involuntary Separation” means an
involuntary separation as that term is defined in Regulation Section 1.409A-1(b)(9)(iii).


 

















 


(l)            “Notice of Termination” means a written notice that (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 Executive’s employment under the provision so
indicated; and (iii) specifies the Date of Termination.


 


(m)          “Person” is given the meaning as such term is used in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that unless
this Agreement provides to the contrary, the term shall not include the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company.


 


(n)           “Permanent Disability” shall mean a physical or mental
condition that occurs and persists and which, in the written opinion of a
licensed physician specializing in the
applicable condition and selected by the Board in good faith, has
rendered the Executive unable to perform the Executive’s duties hereunder for a
period of ninety (90) consecutive days or more, or a period of ninety (90)
non-consecutive days in any one
year period commencing on the first day that Executive is unable to perform his
duties hereunder, and, in the written opinion of such physician, the condition
will continue for an indefinite period of not less than an additional ninety
(90) day period, rendering the Executive unable to return to the Executive’s
duties on a full time basis.


 


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


 


(p)           “Section 409A” means Section 409A
of the Code, and the Regulations promulgated thereunder.


 


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


 


(r)            “Specified Employee” means a
specified employee as that term is used in Code Section 409A(a)(2)(B)(i) and
the Regulations thereunder.


 


(s)           “Voluntary Separation with Good Reason” means a
voluntary separation as that term is defined in Regulation Section 1.409A-1(h)(2).


 


9.             Termination of Agreement.


 


(a)           Death or Disability.  This Agreement shall terminate automatically
upon the Executive’s death or upon receipt of a Notice of Termination in the
event that Executive suffers a
Permanent Disability.


 


(b)           Cause.  The Company may terminate this Agreement at
any time concurrently with or after the
occurrence of any event constituting Cause.


 


(c)           Constructive Termination.  The Executive may terminate this Agreement
concurrently with a Constructive Termination.


 


(d)           Without
Cause.  A
termination of Executive’s employment without 
the occurrence of any of the factors constituting a termination for
Cause. The Company may terminate Executive’s employment Without Cause at any
time and the Executive may resign from Executive’s employment without reason.
(e) Notice of Termination.  Any termination of the Executive’s 


 

















 


employment by the Company for Cause or
Without Cause, or any termination of the Executive’s employment by the
Executive for a Constructive
Termination or by resignation,
shall be communicated by Notice of Termination to the other party, given in
accordance with Section 16.  A
Notice of Termination by the Company shall be signed by the Company’s Chief
Executive Officer or any other officer of the Company designated by the Board
of Directors of the Company.  Any termination
due to Permanent Disability shall be by written notice given in accordance with
Section 16.


 


10.           Certain Benefits Upon Termination.


 


(a)           If (i) during the Term
of this Agreement, the Company terminates the Executive’s employment for any
reason other than for Cause (including by reason of death or Permanent
Disability) or (ii) within eighteen (18) months after a Change of Control
that occurs during the Term of this Agreement, the Company terminates the
Executive’s employment (whether or not the Term of this Agreement has ended
without renewal) for any reason other than for Cause, or (iii) the
Executive terminates his employment with the Company because of a Constructive Termination
pursuant to Section 8(g) above (and provided that the Company has
failed to cure the event or existence
of the condition giving rise to a Constructive Termination within the
thirty (30) day cure period provided under Section 8(g)), then the following
shall apply: (I) the Company shall pay the Executive a “Severance Payment” in cash equal to one (1) times the Executive’s Base
Salary (1/2 the Executive’s Base Salary if termination is by reason of death); (II) the
Company shall pay or provide to the Executive all other benefits, as specified
in Section 10(b) below; (III) all installments of options to
purchase shares of the Company’s Common Stock under the 2001 Stock Plan that
are held by Executive and scheduled
to vest within thirty-six (36) months of the Date of Termination shall vest as of the Date of
Termination subject to expiration or termination as set forth in the 2001 Stock
Plan or the Notice and Grant Agreement granting such options to Executive; and (IV) 
provided that the Compensation
Committee certifies in writing that the performance incentive target(s) for
the fiscal year in which the Date of Termination occurs has been achieved, and
all conditions to Executive Officers’ receipt of bonus awards under such plan
(other than the condition of continuing employment) have been satisfied,
including any conditions related to limitations of payment under such plan due
to non-deductibility to the Company under Section 162(m) of the Code,
the Company shall pay the Executive a performance achievement bonus award under
the Company’s Annual Performance Incentive Plan (or any restated or new bonus
award plan that is then in effect for Executive Officers) that is
proportionately adjusted to take into account the period of actual service by
the Executive during the Company’s fiscal year in which the Date of Termination
occurs, if and when such bonus is paid to other Executive Officers of the
Company.


 


(b)           If Section 10(a) above
applies, then the Company shall provide the following additional benefits to Executive:
(i) for a twelve (12) month period after the Date of Termination (the “Continuation Period”), the Company
shall, at its expense, continue on behalf of the Executive and the Executive’s
dependents (and in the event of termination by reason of death, on behalf
of  Executive’s beneficiaries who were
previously dependents), medical, dental, vision care, and hospitalization
benefits (or such comparable alternative benefits determined by the Company, in
its discretion) that (I) were provided to Executive at any time during the
90-day period prior to the Date of Termination, or (II) if termination is
within eighteen (18) months of a Change of Control, were provided to Executive
prior to such Change of Control (provided the level of such benefits shall in no
event be lower than the Executive’s level of benefits on the Date of
Termination).  The Company’s obligation
hereunder with respect to benefits under this Section 10(b) shall be
limited to the extent that the Executive obtains any such benefits pursuant to
the Executive’s subsequent employer’s benefit plans, if any, in which case the
Company may reduce the coverage of any benefits it is required to provide the
Executive under this Section 10(b) so long as the aggregate coverages
and benefits of the combined benefit plans are no less favorable to the
Executive than the coverages and benefits required to be provided hereunder.
This Section 10(b) shall not be interpreted so as to limit any
benefits to which the Executive, the Executive’s 


 

















 


dependents or beneficiaries may be entitled
under any of the Company’s other employee benefit plans, programs or practices
following a termination of employment, including without limitation, retiree
medical and life insurance benefits, except as provided in this Section.  Retiree medical and life insurance benefits
shall be limited by and be designed to either (A) be exempt from Section 409A
by reason of qualification under Regulation Section 1.409A-1(a)(9)(v)(B) and/or
(D) (which shall be aggregated with all other benefits which would qualify
thereunder) or (B) be compliant with the requirements of Regulation Section 1.409A-3(i).


 


(c)           In the event that the
Executive’s employment is terminated for any reason (including without limit by the Company for Cause or by Executive’s
voluntary resignation), the Company shall pay to the Executive:  (i) all accrued but unpaid salary and
amounts due to the Executive as of the Date of Termination, and (ii) all
accrued but unpaid or unused vacation, sick pay or expense reimbursement benefit,
up to the Date of Termination. No other payments or benefits shall be due to Executive
upon a termination for Cause or by Executive’s voluntary resignation (other
than any resignation occurring by reason of a Constructive Termination).


 


(d)           In the event that the Executive’s employment is
terminated by reason of the Executive’s death or if the Executive is not a
Specified Employee, the Company shall make all cash payments to which the
Executive is entitled pursuant to Section 10(a)(I) within thirty (30)
days following the Executive’s Separation from Service, provided that the
Company may delay payment in the case of the Executive’s death until the
Executive’s executor or personal representative has been appointed and
qualified pursuant to the laws in effect in the Executive’s jurisdiction of
residence at the time of the Executive’s death. 
If the Executive, as of the date of Separation from Service, is a
Specified Employee under Section 409A, then the Company shall, unless as
otherwise provided in this paragraph, pay to the Executive all amounts due and
owing under section 10(a)(I), five (5) business days following the date
that is six (6) months after the date of Executive’s Separation from
Service, provided that the Executive’s employment is not terminated for
Cause.  If the Executive is a Specified
Employee and it is determined that Section 10(a)(I) provides payment
only in the event of Involuntary Separation or Voluntary Separation with Good
Reason, then the Company shall pay to the Executive within thirty (30) days of
the date of Executive’s Separation from Service such amounts of the separation
pay not to exceed the maximum limit permitted under Regulation Section 1.409-1(b)(9)(iii)A(2).  Any amounts which remain unpaid after paying
all amounts permitted by the dollar limitation under Regulation Section 1.409-1(b)(9)(iii)A(2),
shall be paid five (5) days following the date that is six (6) months
after the Employee’s Separation from Service. 
Notwithstanding the foregoing, but subject to permitted payments under
Regulation Section 1.409-1(b)(9)(iii)A(2), the Company shall pay such cash
payments over a one year period, on a bi-weekly basis commencing when such
payments shall first become payable.


 


The
timing and payment of any performance achievement bonus to which the Executive
is entitled pursuant to Section 10(a)(IV) shall be determined as set
forth in the Company’s Annual Performance Incentive Plan provided further, that in all event such payment shall be made no later
than March 1 of the calendar year following the calendar year in which
such Separation from Service occurs.


 


In each case, any amounts or benefits paid or
provided to Executive under this Section 10 shall be treated as a series
of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii).


 


(e)           In the event that the
Executive’s employment terminates by reason of the Executive’s death, the
applicable Severance Payment and other benefits provided in this Section 10
shall be paid to the Executive’s estate or as the Executive’s executor shall
direct.


 
















 


(f)            Notwithstanding any provision of this
Agreement to the contrary, if Executive is a Specified Employee, Executive
shall not be entitled to any payments or benefits the right to which provides
for a “deferral of compensation” within the meaning of Section 409A,
taking into account all applicable exemptions or exceptions, and whose payment
or provision is triggered by Executive’s termination of employment with the
Company (whether such payments or benefits are provided to Executive under this
Agreement or under any other plan, program or arrangement of the Company),
including as a result of Executive’s Permanent Disability (other than Executive
being “disabled” within the meaning of Section 409A(a)(2)(c) of the
Code), until the earlier of (i) the date which is five (5)business
days following the six-month
anniversary of Executive’s Separation from Service for any reason other than
death or (ii) Executive’s date of death, and such payments or benefits
that, if not for the six-month delay described herein, would be due and payable
prior to such date shall be made or provided to Executive on such date.  The Company shall make the determination as
to whether Executive is a Specified Employee in good faith in accordance with
its general procedures adopted in accordance with Section 409A of the Code
and, at the time of Executive’s Separation from Service, will notify Executive
whether or not he is a Specified Employee.


 


(g)           In
the event the Executive is entitled hereunder to any payments or benefits set
forth in this Section 10, then (i) the
Executive shall have no obligation or duty to seek other or alternate employment or otherwise mitigate the Company’s
damages including its obligation to make any payments or provide any benefits
to Executive as required hereunder and (ii) the Company shall have no
right to reduce or set-off against any amount or benefit payable by the Company
to Executive hereunder including for or by reason of Executive’s receipt or
generation of earnings from any alternate or subsequent employment or other
arrangement or undertaking except as provided under Section 10(b).  The provisions for Severance Payment and other
benefits contained in this Section 10 may be triggered only once during
the term of this Agreement, so that, for example, should the Executive be
terminated because of a Permanent Disability, and should there be a Change of
Control and Constructive Termination thereafter, then the Executive would be
entitled to be paid under this Section 10 only once.  In addition, the Executive shall not be
entitled to receive severance benefits of any kind from any wholly owned
subsidiary or other affiliated entity of the Company if, in connection with the
same event or series of events, the Severance Payment and other benefits
provided for in this Section 10 previously have been paid to Executive.


 


(h)           In
the event that the Executive’s employment is terminated for any reason, the
Company shall reimburse the Executive promptly for all business expenses
incurred prior to the Date of Termination upon the presentation by the
Executive 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.


 


(i)            The
rights of the Executive under this Section 10 shall not be exclusive of
any other rights to which the Executive may be entitled under any bonus,
retirement or employee benefit plan of the Company.


 


11.           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 entity succeeding to all
or substantially all of the business and assets of the Company (a “Successor Buyer”).


 


(b)           The
Company shall require any Successor
Buyer (whether direct or indirect, by purchase, merger, consolidation or
otherwise) 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.  No such assumption shall release the Company
of its obligations hereunder; it being
intended that the Company shall remain liable for all its obligations hereunder
after the assumption by such Successor Buyer.  As used in this Agreement, “Company” shall mean the Company as
herein before defined and any Successor
Buyer which assumes this Agreement by contract, operation of law, or
otherwise.


 


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


 


12.           Confidential Information. 
During the Term of this Agreement and thereafter, the Executive shall
not, except as may be required to perform the Executive’s 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 Executive in the
course of the Executive’s 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 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 the
Executive’s employment, the Executive will promptly deliver to the Company all
documents (and all copies thereof) containing any Confidential Information.


 


13.           Non-competition. 
Executive agrees that during his employment with the Company,  Executive 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 Executive, either individually
or as a member of a “group,” as such terms are used in Rule 13d of the
Exchange Act, of not more than one (1%) of the voting stock of any publicly
held corporation shall not constitute a
violation by Executive of this Section 13 of this Agreement.  It is further expressly agreed that the
Company will or would suffer irreparable injury if the Executive 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 Executive further consents and
stipulates to the entry of such injunctive relief in such a court prohibiting
the Executive from competing with the Company or any subsidiary or Affiliate of the Company in violation
of this Agreement.  For purposes of clarification, the provisions
and restrictions contained in this Section 13 shall not apply to Executive
from and after the termination of Executive’s employment with the Company for
any reason.


 


14.           Right to Company Materials. 
The 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 the Executive, shall be and shall remain the
property of the Company.  Upon the
termination of the Executive’s employment 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.


 


15.           Anti-solicitation. 
The Executive promises and agrees that during the Term of this
Agreement, and for a period of twenty-four (24) months thereafter, he will not
solicit   or attempt to solicit 


 

















 


employees, customers, franchisees, landlords, or suppliers of the
Company or any of its present or future subsidiaries or Affiliates, either directly or indirectly, to divert their
business away from the Company 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; provided, that
Executive’s use of any form of public advertisements or marketing media or
utilization of any professional personnel or placement services after
termination of his employment with the Company shall not constitute Executive’s
violation of this Section 15 of this Agreement so long as such
advertisements, marketing media or utilization of any professional personnel or
placement services do not request, target or specify that the Company’s or any
of its present or future subsidiaries’ or Affiliates’ employees, customers,
franchisees, landlords or suppliers are being sought.


 


16.           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

  
	
   

  	
   

  	
  Attention: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Same address as above.

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
   

  
	
  Executive:

  	
   

  	
  Michael
  E. Jannini

  
	
   

  	
   

  	
  c/o
  The Cheesecake Factory Incorporated

  
	
   

  	
   

  	
  26901 Malibu Hills Road

  Calabasas Hills, California 91301

  



 


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


 


18.           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.


 


19.           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.


 


20.           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.


 


21.           Alternative Dispute Resolution.  The Company and Executive agree that any
dispute that arises out of or relates to Executive’s employment with the
Company, including any dispute that he may have with any present or former
officer, director, employee, agent, attorney or insurer of the Company, shall
be submitted exclusively to binding arbitration for a final decision.  The arbitration shall be conducted by one
arbitrator in Los Angeles, California. 
The parties shall meet and confer in good faith to select an arbitrator,
who shall be a retired judge of the Superior Court of the state of California
or any 


 

















 


federal district court located within the state of California, and shall
have at least ten (10) years of experience as a judge of said
court(s).  The arbitrator shall determine
in his or her discretion which arbitration rules and procedures shall
apply throughout the arbitration, provided that such rules comply with
applicable law.  The Company shall pay
the fees and costs of arbitration to the extent required under California
law.  Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.  Notwithstanding the foregoing, such
arbitration shall be conducted in accordance with the following procedures:


 


(a)           Procedures:  The
arbitrator shall allow such discovery as authorized by the California Code of
Civil Procedure or Federal Rules of Civil Procedure, as determined by the
arbitrator.  The arbitrator shall resolve
the dispute as expeditiously as practicable, and shall give the parties written
notice of the decision, with the reasons therefore set out, and shall have
thirty (30) days thereafter to reconsider and modify such decision if any party
so requests within thirty (30) days after the decision.


 


(b)           Authority:  The
arbitrator shall have authority to award relief under legal or equitable
principals, including interim or preliminary relief.  The prevailing party shall be awarded its reasonable
attorneys fees and costs.


 


(c)           Entry of Judgment:  Judgment
upon the award rendered by the arbitrator may be entered in any court having in
person and subject matter jurisdiction. 
Company and Executive hereby submit of the federal and state courts in
Los Angeles, California, for the purpose of confirming any such award and
entering judgment thereon.


 


22.           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
Executive and such other Company
officer as may be specifically designated by the Board or the Compensation
Committee.  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 is 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 shall be deemed also to refer to any successor provisions to
such sections.  Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law.  In the
event that the Company shall not pay when due any amounts required to be paid
to the Executive, such unpaid amounts shall accrue interest from the due date
at the lesser of the prime commercial lending rate announced by Bank of America
N.A. in effect from time to time during the period of nonpayment or the maximum
rate allowed by law.


 


23.           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 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.  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.


 


Notwithstanding the
other provisions of this Agreement, with respect to any right to a payment or
benefit hereunder (or portion thereof) that does not otherwise provide for a “deferral
of compensation” as defined in Section 409A, it is the intent of the
parties that such payment or benefit will 


 

















 


not so provide.  In the event either party
reasonably determines, based upon the
advice of counsel, that any item payable by the Company to the Executive
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 Section 409A, or to qualify as exempt from Section 409A or to cause any amount to
be subject to interest or penalties under 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 promptly and reasonably consult with
each other (and their legal counsel) and shall negotiate in good faith
the terms and conditions of an amendment to this Agreement to (i) avoid the inclusion of such
item in a tax year before the Executive’s actual receipt of such item of income, (ii) maintain the original intent of
the applicable provisions without violating the provisions of Section 409A
or increasing the costs to the Company of providing the applicable benefit or
payment, and (iii) to avoid the imposition of any tax, interest or other
penalties under Section 409A of the Code upon Executive or the Company.  Provided, however, nothing in this Section 23
shall be construed or interpreted to require the Company to increase any
amounts payable to the Executive pursuant to this Agreement or to consent to
any amendment that would materially and adversely change the Company’s
financial accounting or tax treatment of the payments to the Executive 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 Executive’s Separation from Service and (b) the
payment date or commencement date specified in this Agreement for such item.


 


24.           Survival.  The
provisions of this Agreement that may be reasonably interpreted as surviving
expiration or termination of this Agreement, including Sections 7, 10, 12, 14,
15 and 21 shall continue in effect after expiration or termination of this
Agreement.  No termination of this
Agreement by either party shall result in a termination of any vested stock
options, except in accordance with the terms and conditions of the applicable
stock option agreement.


 


25.           Construction.  The Company and the Executive agree that the terms
and conditions of this Agreement are the result of lengthy, intensive arms’
length negotiations between them and that this Agreement shall not be construed
or resolved, whether under any rule of construction or otherwise, in
favor of or against either of them by reason of the extent to which either of
them or his or its counsel participated in the drafting of this Agreement.


 


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


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  THE CHEESECAKE FACTORY INCORPORATED,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Overton

  
	
   

  	
   

  	
  David Overton, President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  

  
	
   

  	
   

  	
  Name: Michael E. Jannini

  
	
   

  	
   

  	
  Title: President, The Cheesecake Factory Incorporated