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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 22, 2004
THE CHEESECAKE FACTORY INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-20574 51-0340466
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
26950 Agoura Road
Calabasas Hills, California 91301
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(818) 871-3000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14.d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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SECTION 1 -- OTHER EVENTS
ITEM 1.01 OTHER EVENTS
On December 22, 2004, the Compensation Committee of the Company's Board of
Directors approved an employment agreement with its Chief Executive Officer and
Chairman of the Board, David M. Overton. This agreement replaces a prior
agreement with the Company that had expired.
Pursuant to Item 1.01 of Form 8-K, the following is a brief description of
the terms and conditions of the agreement that may be considered material to the
Company. The description is not a complete description of all the terms and
conditions of the agreement and is qualified in its entirety by reference to the
agreement, which the Company will file as an exhibit to the Company's next
periodic report under the Securities and Exchange Act of 1934, as amended.
The agreement has an initial term of five fiscal years and will be extended
automatically for one additional year on each anniversary date (beginning on the
fifth anniversary date) unless either party gives notice not to extend. Under
the agreement, the Company will pay Mr. Overton an initial salary at the annual
rate of $550,000 per year. This rate shall be increased by $82,000 in the second
year and $50,000 each year thereafter. While employed by the Company, Mr.
Overton will be eligible to participate in the Company's Annual Performance
Incentive Plan and equitably with other executive officers in any Company plan
relating to pension, thrift, profit sharing, life insurance, medical coverage,
education or other retirement or employee benefits. He will also be entitled to
receive all other fringe benefits that are provided to the Company's executive
officers. Mr. Overton will be eligible to receive future stock option grants and
the Company has agreed to grant options to purchase not less than 100,000 shares
of the Company's common stock during each 12-month period during the term of the
agreement beginning after the first 12 months of the agreement. If on the later
of the termination of his full-time employment or consulting services any
installment of options is not then exercisable and Mr. Overton has not been
terminated for "cause" (as defined in the agreement), the installment shall
become immediately exercisable subject to expiration or termination as set forth
in the option plan or agreement. While employed by the Company, Mr. Overton will
be entitled to disability income insurance coverage in an amount made available
to the Company's other executive officers, with all premiums paid by the
Company. The Company has also agreed to seek to maintain director and officer
liability insurance while he is employed and to maintain that insurance for a
period of at least 36 months following his date of termination. If Mr. Overton's
employment is terminated for any reason (other than "cause" or his voluntary
resignation other than for a "good reason" (as defined in the agreement)), he or
his estate will be entitled to receive a lump sum payment equal to three times
his base salary. If, during the first 18 months after a "change in control" (as
defined in the agreement) of the Company, Mr. Overton voluntarily gives notice
of termination of his employment for any reason or non-renewal or he otherwise
terminates employment (other than due to death or permanent disability) or is
terminated by the Company without cause, he will be entitled to receive a lump
sum payment equal to the greater of $2 million or three times his base salary,
and the Company will also pay for certain health and life insurance benefits for
Mr. Overton and his dependents for an additional 36 months. In the event that
any payment or benefit paid or payable to Mr. Overton under the agreement is
subject to any excise tax in connection with the "excess parachute payment"
provisions of the Internal Revenue Code, Mr. Overton is entitled to receive an
additional "gross-up" payment from the Company such that the after-tax proceeds
of the payment to Mr. Overton will be sufficient to pay any such excise tax in
full. If Mr. Overton's full-time employment by the Company is terminated for any
reason, except by reason of death, permanent disability, cause or voluntary
resignation of Mr. Overton (and the provisions relating to change in control are
not applicable), he may elect to provide consulting services to the Company for
a period of up to 120 months. If he elects to provide consulting services, he
will be obligated to provide not less than 60 hours of services per month and
shall paid at an annual rate equal to 70% of his base salary for the period
immediately prior to the termination of his employment. While providing
consulting services, Mr. Overton and his dependents will be entitled to
participate in the Company's life, medical and dental insurance benefits that
the Company has adopted for its executive officers. If he and his dependents are
not eligible under the terms of such coverage, the Company will seek to obtain
substantially similar individual coverage. Mr. Overton will also be entitled to
an annual founder's retirement benefit during his lifetime and ceasing upon his
death equal to 20% of his base salary (in effect immediately prior to
termination) for the first ten years after termination of his full time
employment and 40% of his base salary (in effect immediately prior to
termination) for each year after the first ten years until his death. This
benefit shall not be payable if Mr. Overton's employment is terminated for cause
or he materially violates any of his duties of confidentiality, non-competition
or non-solicitation set forth in the agreement. Payment of this retirement
benefit commences after the termination of his full-time employment.
The founder's benefit is an unfunded, unsecured promise to pay benefits in
the future, and Mr. Overton shall have no right or interest in any specific
assets of the Company by virtue of this obligation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 22, 2004 THE CHEESECAKE FACTORY INCORPORATED
By: /s/ MICHAEL J. DIXON
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Michael J. Dixon
Senior Vice President and Chief
Financial Officer
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