CHEESECAKE FACTORY INC

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PROPOSAL TWO

Approval and Adoption of the Restated Certificate of Incorporation of The Cheesecake Factory Incorporated to Provide for the Exculpation of Officers as Permitted by the DGCL

The State of Delaware recently amended the DGCL to permit Delaware companies to exculpate their officers, in addition to their directors, for personal liability in certain limited circumstances. In light of this update, we are proposing to amend and restate the current Certificate of Incorporation of The Cheesecake Factory Incorporated (the “Certificate of Incorporation”) to add a provision exculpating certain of the Company’s officers from liability in specific circumstances, as permitted by the DGCL. The DGCL only permits, and our proposed Restated Certificate of Incorporation (as defined below) would only permit, exculpation for direct claims (as opposed to derivative claims made by stockholders on behalf of the corporation) and would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. The rationale for so limiting the scope of liability is to strike a balance between stockholders’ interest in accountability and their interest in the Company being able to attract and retain quality officers to work on its behalf.

Officer exculpation is intended to enable our officers to exercise their business judgment in furtherance of the interests of our stockholders while minimizing the potential for distraction posed by frivolous lawsuits and costs which are often borne by the Company, either directly, through indemnification, or indirectly through higher insurance premiums.

Taking into account the limited claims for which officers’ liability would be exculpated, and the benefits, the Board determined that it is in the best interest of the Company and our stockholders to amend and restate the Certificate of Incorporation as described herein.

Accordingly, we ask our stockholders to vote on the following resolution:

“RESOLVED, that the Company’s stockholders approve the amendment and restatement of the Certificate of Incorporation to add a new Article FOURTEENTH, which shall read in its entirety as follows:

FOURTEENTH: To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, an officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as an officer. No amendment to or repeal of this Article FOURTEENTH shall apply to or have any effect on the liability or alleged liability of an officer of the Corporation for or with respect to any acts or omissions of such officer occurring prior to such amendment or repeal.”

Required Vote. The approval and adoption of the amendment and restatement of the Certificate of Incorporation of The Cheesecake Factory Incorporated to provide for the exculpation of officers as permitted by the DGCL requires the affirmative vote of the majority of the outstanding shares. Abstentions will have the same effect as votes “AGAINST” the proposal. The adoption of the Restated Certificate of Incorporation is not a routine matter under applicable rules. As a result, there may be broker non-votes on Proposal 2. Broker non-votes will have the same effect as votes “AGAINST” the proposal. If approved, these changes to our Certificate of Incorporation will become effective upon the filing of a Restated Certificate of Incorporation, including the new Article FOURTEENTH (the “Restated Certificate of Incorporation”) with the Secretary of State of the State of Delaware, which shall be filed promptly after the Annual Meeting of Stockholders. A copy of the Restated Certificate of Incorporation contemplated by Proposal 2 marked to show changes against our current Certificate of Incorporation is attached hereto as Appendix B.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL AND ADOPTION OF THE RESTATED CERTIFICATE OF INCORPORATION OF THE CHEESECAKE FACTORY INCORPORATED TO PROVIDE FOR THE EXCULPATION OF OFFICERS AS PERMITTED BY THE DGCL.