Employment Agreement - Cheesecake Factory Inc. and Linda Candioty
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into this 15th
day of January, 1998, between THE CHEESECAKE FACTORY INCORPORATED (the
"Company") and LINDA CANDIOTY (the "Employee").
WHEREAS, the Board of Directors of the Company (the "Board") 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 of 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. The Employee is employed as an Executive Vice
President of the Company from the date of this Agreement until such
employment is terminated in accordance with Section 9. The Employee shall
have such duties and responsibilities as may be designated to her by the
Board from time to time. Employee shall report directly to the Chief
Executive Officer of the Company. Employee shall devote substantially all her
time, attention and energies to the business and affairs of the Company and
its subsidiaries.
2. SALARY. The Company shall pay the Employee a salary at an annual
rate of $210,000, with such salary to be increased at such times, if any, and
in such amounts as determined by the Board ("Base Salary"). Such salary
shall be payable by the Company to the Employee in substantially equal
installments not less frequently than bi-weekly. Participation in deferred
compensation, discretionary bonus, retirement, stock option and other
employee benefit plans and in fringe benefits shall not reduce the salary
payable to the Employee under this Section 2.
3. PARTICIPATION IN BONUS, RETIREMENT AND EMPLOYEE BENEFIT PLANS. The
Employee shall be entitled to participate equitably with other officers to
the extent of her position, tenure and salary in any plan of the Company
relating to options, bonuses, stock purchases, pension, thrift, profit
sharing, life insurance, disability insurance, medical coverage, education,
severance or so called "golden parachute" payments, or other retirement or
employee benefits that the Company has adopted or may adopt for the benefit
of its officers.
4. FRINGE BENEFITS. The Employee shall be entitled to receive all
other fringe benefits which now or may be provided to the Company's executive
officers.
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5. AUTOMOBILE. The Company shall provide the Employee, at her option,
a non-accountable car allowance of $1000 per month, or participation in the
Company's car leasing plan.
6. VACATION. The Employee shall be entitled to an annual paid
vacation in accordance with the Company's general administrative policy.
7. BUSINESS EXPENSES. During such time as the Employee is rendering
services hereunder, the Employee shall be entitled to incur and be reimbursed
for all reasonable business expenses, including but not limited to mobile
telephone charges. 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 not to
exceed thirty days after the Employee's submission of an itemized account.
8. 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 extent the Company
indemnifies and holds harmless other officers and directors of the Company
and in accordance with the Company's established policies. The Company
agrees to maintain Directors and Officers Liability Insurance if such
insurance shall be available at rates and on terms reasonably acceptable to
the Board.
9. TERMINATION.
(a) DEATH. This Agreement shall terminate upon the Employee's
death. Employee's estate shall be entitled to any unpaid pro rata salary
earned prior to such death and a lump sum payment of the pro rata portion of
Employee's Incentive Plan award for the fiscal year, if any, when paid to all
other participants.
(b) DISABILITY. If, as a result of the Employee's incapacity due
to physical or mental illness, she shall have been absent from the full-time
performance of substantially all of her material duties with the Company for
90 consecutive days or 180 days within any 12-month period, her employment
may be terminated by the Company for "Disability." Termination shall occur
30 days after a notice of a written termination is delivered to Employee by
the Company. Employee shall be entitled to any unpaid pro rata salary earned
prior to such "Disability" and a lump sum payment of the pro rata portion of
Employee's Incentive Plan award for the fiscal year, if any, when paid to all
other participants, and all benefits and rights provided under any applicable
stock option plan and disability plan. The Company will pay Employee's COBRA
payments for the maximum term for Employee and her dependents.
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(c) CAUSE. Subject to the notice provisions set forth below, the
Company may terminate the Employee's employment for "Cause" at any time.
"Cause" shall mean termination upon: (1) the willful failure by the Employee
to substantially perform her duties with the Company for a reasonable period
of time (other than any such failure resulting from her incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to her by the Board, which demand specifically
identifies the manner in which the Board believes that she has not
substantially performed her 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 her duties. For purposes of this subsection
(c), no act, or failure to act, on the Employee's part shall be deemed
"willful" unless done, or omitted to be done, by her not in good faith and
without the reasonable belief that her 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 her 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 finding that she has engaged in the conduct set forth above in
this subsection (c) and specifying the particulars thereof in detail.
Employee shall be entitled to any unpaid pro rata salary earned prior to
termination under this paragraph (c).
(d) WITHOUT CAUSE. This Agreement and the Employee may be
terminated for any reason without cause by the Company at any time. In such
case, the Employee shall be entitled to (i) any unpaid pro rata salary earned
up to the date of termination, (ii) immediate vesting of any options granted
to Employee under its stock option plans, (iii) a lump-sum payment of the pro
rata portion of Employee's Incentive Plan award for the fiscal year, if any,
when awards are paid to all other plan participants, and (iv) any amounts
accrued and unpaid under any plan or benefit of which Employee is a
participant.
(e) BY EMPLOYEE. Employee may terminate this Agreement upon 60
days written notice to the Company and shall be entitled to any unpaid pro
rata salary earned up to the date of termination. In case of a "change in
control" Employee may terminate this Agreement at any time within 180 days by
written notice after such "change in control" and Employee shall be entitled
to any unpaid pro rata salary earned up to the date of termination plus a
lump-sum payment in an amount equal to two year's base salary then in effect.
"Change of Control" shall mean (i) any reorganization, merger or
consolidation of the Company with one or more corporations where the Company
is the surviving corporation and the stockholders of the Company immediately
prior to such transaction do not own at least 80% of the Company's Common
Stock immediately after such transaction, (ii) any reorganization, merger or
consolidation of the Company with one or more corporations where the Company
is not the surviving corporation, (iii) a sale of substantially all of the
Company's assets, or (iv) a sale of 80% or more of the then outstanding
shares of Common Stock of the Company.
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(f) NOTICE AND DATE OF TERMINATION. Any termination of the
Employee's employment by the Company or by the Employee shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Section 12. "Notice of Termination" shall mean a notice that indicates the
specific termination provision in this Agreement relied upon and sets forth
in reasonable detail the facts and circumstances claimed to provide a basis
for the termination of the Employee's employment under the provision so
indicated. Unless otherwise provided Employee's employment is terminated upon
the date set forth in the Notice of Termination. For purposes of this
Agreement, the term of this Agreement shall end on the effective date of
Employee's termination as provided in the foregoing notice or, if no
effective date is provided, the date such notice is received by Employee.
10. 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 as 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 her personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
11. CONFIDENTIAL INFORMATION.
(a) During the term of this Agreement and thereafter, the Employee
shall not, except as may be required to perform her 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 her 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 her employment, the
Employee will
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promptly deliver to the Company all documents (and all copies thereof)
containing any Confidential Information.
(b) NONCOMPETITION. Except as otherwise provided herein, the
Employee agrees that during the term of this Agreement she will not, directly
or indirectly, without the prior written consent of the Company, provide
consulting 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
Rule 13d of the General Rules and Regulations under the Securities Exchange
Act of 1934 ("Exchange Act"), of not more than 1% of the voting stock of any
corporation shall not be a violation of this Agreement. 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 Material") used,
prepared, or made available to the Employee, shall be and shall remain the
property of the Company. Upon the termination of her employment or the
expiration of this Agreement, all Company Materials shall be returned
immediately to the Company, and 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,
she will not influence or attempt to influence 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 employment or business to or with 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.
12. 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
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in accordance herewith, except that notice of a change of address shall be
effective only upon actual receipt:
Company: The Cheesecake Factory Incorporated
26950 Agoura Road
Calabasas Hills, California 91301
with a copy to: the Secretary of the Company;
Employee: Linda J. Candioty
3696 Dixie Canyon Ave.
Sherman Oaks CA 91423
13. AMENDMENTS OR ADDITIONS. No amendment or additions to this
Agreement shall be binding unless in writing and signed by both parties
hereto.
14. 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.
15. 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.
16. 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.
17. 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; provided, however, that the Employee shall be entitled
to seek specific performance of her right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under
or in connection with this Agreement.
18. 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
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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 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. Sections 11 and 17
shall survive the expiration of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement on the date first indicated above.
THE CHEESECAKE FACTORY INCORPORATED
By: /s/
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DAVID OVERTON
Chief Executive Officer
EMPLOYEE:
/s/
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Linda J. Candioty