ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
On March 2, 2017, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of The Cheesecake Factory Incorporated (the “Company”) approved the following annual base salaries for the executive officers of the Company whose names and titles are listed below. Such base salaries were effective March 1, 2017.
|
Name
|
|
Title
|
|
Amount
|
|
David Overton
|
|
Chairman of the Board and Chief Executive Officer
|
|
$995,000
|
|
David M. Gordon
|
|
President
|
|
$600,000
|
|
W. Douglas Benn
|
|
Executive Vice President and Chief Financial Officer
|
|
$531,000
|
|
Debby R. Zurzolo
|
|
Executive Vice President, General Counsel and Secretary
|
|
$497,000
|
|
Max S. Byfuglin
|
|
President, The Cheesecake Factory Bakery, Inc.
|
|
$438,000
|
On March 2, 2017, the Compensation Committee also approved grants of options to purchase the Company’s common stock to each of the executive officers of the Company whose names are listed below under the terms of the Company’s stockholder approved 2010 Stock Incentive Plan, dated February 25, 2010, as amended effective May 28, 2015 (the “2010 Stock Incentive Plan”), as follows:
|
Name
|
|
Number of
Shares
Subject to
Stock
Options
|
|
|
David Overton
|
|
73,500
|
|
|
David M. Gordon
|
|
16,650
|
|
|
W. Douglas Benn
|
|
10,350
|
|
|
Debby R. Zurzolo
|
|
7,550
|
|
|
Max S. Byfuglin
|
|
6,775
|
|
These options to purchase the Company’s common stock were granted at an exercise price of $61.59 per share, which was the closing price per share for the Company’s common stock on March 2, 2017, the date of grant, and incrementally vest as to 20% of the shares on each of March 2, 2018, March 2, 2019, March 2, 2020, March 2, 2021 and March 2, 2022.
On March 2, 2017, the Compensation Committee also approved grants of stock units covering the Company’s common stock to each of the executive officers of the Company whose names are listed below under the terms of the 2010 Stock Incentive Plan, as follows:
|
Name
|
|
Number of Stock
Units Awarded at
Target-EPS
Performance
Condition
|
|
Number of Stock Units
Awarded-EBITDA
Performance Condition
|
|
David Overton
|
|
21,700
|
|
21,700
|
|
David M. Gordon
|
|
4,900
|
|
4,900
|
|
W. Douglas Benn
|
|
3,100
|
|
3,100
|
|
Debby R. Zurzolo
|
|
2,275
|
|
2,275
|
|
Max S. Byfuglin
|
|
2,075
|
|
2,075
|
These stock units, each
representing the equivalent of one share
of the Company’s common stock, were granted subject to achievement of a performance condition (“Performance Condition”) based upon either (i) cumulative fully diluted earnings per share (“EPS”) over a three year fiscal period, or (ii) i
ncome from operations, before interest, taxes, depreciation and amortization, less impairments or other accounting related charges (“EBITDA”), both of which Performance Conditions were
approved by stockholders under the 2010 Stock Incentive Plan.
The EBITDA Performance Condition provides that vesting of this award is subject to the Company achieving a
cumulative EBITDA being equal to or greater than a specified dollar amount for fiscal years 2017 and 2018, or being equal to or greater than a specified dollar amount for fiscal years 2017, 2018 and 2019, whichever occurs earlier. If the EBITDA Performance Condition is satisfied
, these stock units are then subject to time-based vesting at the rate of 60% of the shares on March 2, 2020 and 20% of the shares on each of March 2, 2021 and March 2, 2022.
The EPS Performance Condition provides that the vesting of this award is subject to the Company achieving a
cumulative fully diluted EPS over fiscal years 2017, 2018, and 2019 of at least a specified dollar amount, with the formula providing a threshold, target and a maximum
cumulative fully diluted EPS
dollar amount for purposes of determining the number of stock units eligible to vest. If at least 82% and up to 122% (or more) of the EPS Performance Condition is achieved, a number of stock units shall be eligible to vest, the exact number of which will be determined by multiplying a predetermined payout percentage (between 60% to 140%, based upon the level of achievement of the EPS Performance Condition), by the number of stock units granted at the Target amount shown above. Such shares then shall be subject to time based vesting at the rate of 60% of the shares on March 2, 2020 and 20% of the shares on each of March 2, 2021 and March 2, 2022.
These grants were made pursuant to the terms and conditions of a Notice of Grant and Stock Option Agreement and/or Stock Unit Agreement for executive officers previously approved by the Compensation Committee and filed under Form 8-K with the U.S. Securities Exchange Commission on March 4, 2016.