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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: AUGUST 19, 1998
(DATE OF EARLIEST EVENT REPORTED)
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THE CHEESECAKE FACTORY INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-20574 51-0340466
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
26950 AGOURA ROAD, CALABASAS HILLS, CALIFORNIA 91301
(Address of principal executive offices)
(818) 871-3000
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On August 4, 1998, the Board of Directors of The Cheesecake Factory
Incorporated (the "CORPORATION") declared a dividend distribution of one
preferred share purchase right (a "RIGHT") for each outstanding share of Common
Stock, par value $.01 per share (the "COMMON SHARES"), of the Corporation. The
dividend is payable to the stockholders of record on August 19, 1998 (the
"RECORD DATE"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to Common Shares issued after the Distribution Date. Except as set forth below,
each Right, when it becomes exercisable, entitles the registered holder to
purchase from the Corporation one one-hundredth of a share of Series A Junior
Participating Cumulative Preferred Stock, $.01 par value (the "PREFERRED
SHARES"), of the Corporation at a price of $110 per one one-hundredth of a
Preferred Share (the "PURCHASE PRICE"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "RIGHTS
AGREEMENT") between the Corporation and U.S. Stock Transfer Corporation, as
Rights Agent (the "RIGHTS AGENT"), dated as of August 4, 1998.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earliest
to occur of (i) a person or group of affiliated or associated persons having
acquired beneficial ownership of 15% (20% if such Person was a Beneficial Owner
of 10% or more on August 4, 1998) or more of the outstanding Common Shares
(except pursuant to a Permitted Offer, as hereinafter defined); or (ii) 10 days
(or such later date as the Board may determine) following the commencement of,
or announcement of an intention to make a tender offer or exchange offer the
consummation of which would result in a person or group becoming an Acquiring
Person (as hereinafter defined) (the earliest of such dates being called the
"DISTRIBUTION DATE"). A person or group whose acquisition of Common Shares
causes a Distribution Date pursuant to clause (i) above is an "ACQUIRING
PERSON." The date that a person or group becomes an Acquiring Person is the
"SHARES ACQUISITION DATE."
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights) new Common
Share certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("RIGHT CERTIFICATES") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date (and
to each initial record holder of certain
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Common Shares issued after the Distribution Date), and such separate Right
Certificates alone will evidence the Rights.
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE and will expire
at the close of business on August 4, 2008, unless earlier redeemed by the
Corporation as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer which is for all outstanding Common Shares at a
price and on terms which a majority of certain members of the Board of Directors
determines to be adequate and in the best interests of the Corporation, its
stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "PERMITTED OFFER")), each holder of a
Right will thereafter have the right (the "FLIP-IN RIGHT") to receive upon
exercise the number of Common Shares or of one one-hundredths of a share of
Preferred Shares (or, in certain circumstances, other securities of the
Corporation) having a value (immediately prior to such triggering event) equal
to two times the exercise price of the Right. Notwithstanding the foregoing,
following the occurrence of the event described above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
will be null and void.
In the event that, at any time following the Shares Acquisition Date, (i)
the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, in either case
with or to an Acquiring Person or any affiliate or associate or any other person
in which such Acquiring Person, affiliate or associate has an interest or any
person acting on behalf of or in concert with such Acquiring Person, affiliate
or associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right (the "FLIP-OVER RIGHT") to receive, upon exercise, common shares of the
acquiring company having a value equal to two times the exercise price of the
Right. The holder of a Right will continue to have the Flip-Over Right whether
or not such holder exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding
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regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $2.50 per share ($10.00 per annum) but, if
greater, will be entitled to an aggregate dividend per share of 100 times the
dividend declared per Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to a preferential liquidation equal to the
greater of (i) $11,000 per share ($110 per one one-hundredth of a share), plus
an amount equal to accrued and unpaid dividends thereon, whether or not
declared, to the date of such payment, or (ii) an aggregate amount per share
equal to 100 times the aggregate amount to be distributed per share to holders
of Common Stock. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-hundredth or integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Corporation, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") which redemption shall be
effective upon the action of the Board of Directors. Additionally, following
the Shares Acquisition Date, the Corporation may redeem the then outstanding
Rights in whole, but not in part, at the Redemption Price, PROVIDED that such
redemption is in connection with a merger or other business combination
transaction or series of transactions involving the Corporation in which all
holders of Common Shares are treated alike but not involving an Acquiring Person
or its affiliates or associates.
All of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Corporation prior to the Distribution Date. After the
Distribution Date,
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the provisions of the Rights Agreement may be amended by the Board in order to
cure any ambiguity, defect or inconsistency, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders of the Corporation, stockholders may,
depending upon the circumstances, recognize taxable income should the Rights
become exercisable or upon the occurrence of certain events thereafter.
ITEM 7. EXHIBITS
1. Form of Rights Agreement (the "Rights Agreement") dated as of August
4, 1998 between The Cheesecake Factory Incorporated and U.S. Stock
Transfer Corporation which includes, as Exhibit A thereto, the form of
Certificate of Designation specifying the terms of the Preferred
Stock, Exhibit B thereto, the form of Rights Certificate, and Exhibit
C thereto, the Summary of Rights to Purchase Preferred Shares
(incorporated by reference to the Company's Registration Statement on
Form 8-A filed and dated August 18, 1998 with the Commission.)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
Dated: August 19, 1998 The Cheesecake Factory Incorporated
By: /s/ GERALD W. DEITCHLE
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Gerald W. Deitchle
Chief Financial Officer
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