SCHEDULE 14A
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ x ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X ] Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
Name of Registrant as Specified in Its Charter:
The Cheesecake Factory Incorporated
Name of Person(s) Filing Proxy Statement:
Culinary Workers Union, Local 226
Payment of Filing Fee (check the appropriate box)
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i)(1), or 14a-6(j)(2).
[Culinary Workers Local 226
1630 S. Commerce St.
Las Vegas NV]
Dear Fellow Cheesecake Factory Shareholder:
We are writing you to urge you to vote FOR our six shareholder
proposals seeking reform of The Cheesecake Factory's stock option
and corporate governance policies. The proposals will be voted
on by shareholders at The Cheesecake Factory's May 13, 2003
annual meeting. The proposals are 2 through 7 on the Company's
white proxy card, and 2 through 7 on our blue card. We urge you
to vote FOR our proposals on both proxy cards.
ISS and New York State Common Are Supporting Our Proposals
Institutional Shareholder Services (ISS) - the leading provider
of proxy voting and corporate governance services - and the New
York State Common Retirement Fund - which oversees $114 billion
in state retirement assets - have announced that they will
support the Culinary Union's shareholder proposals. The New York
State Common Retirement owns approximately 900,000 shares of The
Cheesecake Factory, or approximately 1.8% of the outstanding
shares of the company. Below are summaries of the proposals and
recommendations of ISS and the New York State Common Retirement
Fund:
Proposals
on Culinary
Management New York State
Proxy Card Common
Retirement Fund ISS ISS Comments
1. Elect
Directors WITHHOLD "We recommend
shareholders
WITHHOLD votes
from [the
directors] for
implementing a
dead-hand poison
pill."
2. Submit FOR FOR "ISS believes that
Option Plan all stock-based
to a Vote incentive plans
should be put to a
shareholder vote."
3. Expense
Stock Options FOR FOR "We believe that
Stock options should
be expensed along
with other forms of
compensation."
4. Submit
Poison Pill
to Vote FOR FOR "We agree with the
proponent that the
current pill should
be redeemed and any
new pill be put to a
shareholder vote."
5. Declassify
the Board FOR FOR "The ability to
elect directors is
the single most
important use of
the shareholder
franchise, and all
directors should
be accountable on
an annual basis."
6. Separate
Chairman
and CEO FOR FOR "The company has not
designated a lead
director, has not
established
governance
guidelines,
has not established
a committee of
outside directors to
annually review the
CEO's performance,
nor are the
committee
chairpersons
nominated by
independent
directors. Absent an
offsetting
governance
structure,
we believe
that a company
of this size
should be able to
find two qualified
people willing to
serve in the
separate positions
of chairman and
CEO."
7. Remove
Supermajority
Vote Requirement FOR FOR Supermajority vote
requirements
generally serve to
lock in provisions
that are harmful to
shareholders.
Requiring approval
by more than a
simple majority of
voting shares may
entrench management
by preventing
action that may
benefit
shareholders."
REASONS TO SUPPORT OUR PROPOSALS:
* In our view Cheesecake Factory has awarded an excessive amount
of stock options to managers at the company, leading to
significant shareholder dilution. From 1995 through 2002 more
than 7.6 million stock options have been exercised by managers
-- or over 15% of the outstanding shares in 2002. There is the
potential of an additional 17% of the company's shares being
introduced into the market through the exercise of stock options,
further diluting shareholders.
* We feel Cheesecake Factory has been able to award such a large
number of stock options because the company doesn't account for
the cost of the options in the income statement, and because the
company has not subjected its largest stock option plan to a
shareholder vote. By voting for our two proposals recommending
that the Company begin expensing stock options and subject all
stock option plans to shareholder approval, shareholders will
have a better understanding of the costs of the Cheesecake
Factory's stock option plan, and the ability to approve all stock
option plans that dilute shareholders.
* We believe the Cheesecake Factory board of directors has
elected to insulate and entrench themselves behind an array of
anti-takeover devices that restrict shareholder rights. By
voting for our corporate governance proposals, Cheesecake
shareholders can send a strong message that it is time for the
company to modernize its corporate governance. If the recent
corporate scandals are any guide, good corporate governance is
vital to protecting shareholder value.
The Culinary Workers Union and affiliated benefit plans own
approximately 30,000 shares of The Cheesecake Factory. If you
have any questions, please call 702-387-7005.