Use these links to rapidly review the document
Table of Contents

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Table of Contents

April 17, 2014

Dear Stockholder:

        You are cordially invited to attend The Cheesecake Factory Incorporated ("Company") annual meeting of stockholders on Thursday, May 29, 2014, at 10:00 a.m., Pacific Daylight Time ("Annual Meeting"). The Annual Meeting will be held at the Janet and Ray Scherr Forum Theatre, Thousand Oaks Civic Arts Plaza, 2100 Thousand Oaks Boulevard, Thousand Oaks, California 91362. The matters to be acted upon at the Annual Meeting are described in the attached Notice of Annual Meeting of Stockholders ("Notice") and Proxy Statement.

        Pursuant to rules adopted by the Securities and Exchange Commission ("SEC"), we are providing you access to our proxy materials over the Internet. This method allows us to deliver the proxy materials to you more quickly, lowers our costs and helps to conserve natural resources. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials ("Notice of Availability") to our stockholders who have not asked us to provide proxy materials in printed form. All stockholders receiving the Notice of Availability can request a printed set of proxy materials. All stockholders can access the proxy materials at www.proxyvote.com, irrespective of whether they receive the Notice of Availability or a printed copy of the proxy materials. Instructions on how to access the proxy materials online or request a printed copy may be found in the Notice of Availability and in the attached Proxy Statement. In addition, stockholders may request proxy materials in printed form by mail or electronically by email on an ongoing basis.

         YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy online, by telephone or by mail (see below for instructions) in order to ensure the presence of a quorum. If you attend the Annual Meeting, you will have the right to revoke your proxy and vote your shares in person. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to vote your shares.

Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to Be Held on May 29, 2014:
The Proxy Statement and Annual Report to Stockholders are available at www.proxyvote.com.

Table of Contents

THE CHEESECAKE FACTORY INCORPORATED
26901 Malibu Hills Road
Calabasas Hills, California 91301

PROPOSAL FOUR
Non-Binding Advisory Vote on Executive Compensation

        In accordance with Section 14A of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and as a matter of good corporate governance practices, we are asking our stockholders to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers as disclosed pursuant to the compensation disclosure rules of the SEC (commonly referred to as a "say-on-pay vote"). We intend to present this non-binding, advisory vote on executive compensation to our stockholders on an annual basis. Accordingly, you may vote on the following resolution at the 2014 Annual Meeting:

         " RESOLVED, that the compensation paid to the Company's Named Executive Officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure contained in this Proxy Statement, is hereby APPROVED."

        As described in detail in the Compensation Discussion and Analysis section of this Proxy Statement, our compensation programs are designed to motivate our executives to drive the success of our Company. We believe that our compensation programs play a material role in our ability to achieve strong financial results, even during difficult economic times, and attract, retain and motivate a highly experienced and successful team to manage our Company. Our compensation programs, with a balance of short-term incentives (including performance-based cash bonus awards), long-term incentives (including stock options and restricted stock awards that generally vest over five years) and executive stock ownership guidelines, reward sustained performance that is aligned with long-term stockholder interests. Stockholders are encouraged to read the Compensation Discussion and Analysis , the accompanying compensation tables, and the related narrative disclosure contained in this Proxy Statement for a full description of our executive compensation programs.

        This vote is advisory only and non-binding. The Board and the Compensation Committee, which is comprised solely of independent directors, will consider the outcome of this vote when making future executive compensation decisions to the extent appropriate.

Required Vote

        The approval of the resolution set forth above requires the affirmative vote of a majority of the shares of common stock present in person or by proxy and entitled to vote on the proposal at the Annual Meeting. Abstentions will be included in the number of shares present and entitled to vote on this Proposal 4 and will count as a vote "AGAINST" Proposal 4. Broker non-votes will not be considered as present and entitled to vote on this Proposal 4. Therefore, a broker non-vote will not be counted and will have no effect on this Proposal 4 other than to reduce the number of affirmative votes required to approve this proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL, ON A NON-BINDING, ADVISORY BASIS, OF THE RESOLUTION SET FORTH ABOVE.

17

Table of Contents

         David Overton has served as our Chairman of the Board and Chief Executive Officer since our incorporation in February 1992. He co-founded the Company with his parents, Evelyn and Oscar Overton. Mr. Overton created the Company's namesake restaurant and opened the first The Cheesecake Factory restaurant in 1978 in Beverly Hills, California. He grew The Cheesecake Factory® into an international chain and created two other concepts, Grand Lux Cafe® and RockSugar Pan Asian Kitchen®. Under Mr. Overton's leadership, the Company's revenues reached $1.87 billion in 2013, with The Cheesecake Factory leading the casual dining industry in average annual sales per restaurant of $10.4 million in fiscal 2013. Mr. Overton's professional honors include the International Foodservice Manufacturers Association "Silver Plate Award," recognizing the most outstanding and innovative talent in foodservice operations; the "Executive of the Year Award" from Restaurants & Institutions Magazine; the "MenuMasters Hall of Fame Award" from Nation's Restaurant News, for his outstanding contributions to menu design and foodservice research and development, and the "Entrepreneur of the Year" in the Food Services category for the Los Angeles region by Ernst & Young, for his demonstrated excellence and extraordinary success in innovation, performance and personal commitment to The Cheesecake Factory and the communities our restaurants serve. In 2013, Mr. Overton was honored with the Leadership Roundtable-Industry Leadership Award. Mr. Overton is also one of the founding members and directors of The Cheesecake Factory Oscar and Evelyn Overton Charitable Foundation ("Foundation"), a 501(c)(3) qualified, non-profit charitable organization which raises funds for a variety of worthy causes and provides a means for the Company's staff members to perform charitable work in their communities.

         Alexander L. Cappello is Chairman and Chief Executive Officer of Cappello Global LLC, a global merchant banking firm. He formerly served as Chairman and Chief Executive Officer of Cappello Capital Corp, which conducted business in over 50 countries. Mr. Cappello has 40 years of global experience in corporate management, corporate finance, investment banking and merchant banking. He currently serves as a director of a number of private companies, as well as an advisory board member of the RAND Corporation Center for Middle East Public Policy. In addition, he served as a director for a number of public companies prior to their acquisition or privatization, including Koo Koo Roo, Inc., Cytrx Corp. and Genius Products, Inc.

18

Table of Contents

         Jerome I. Kransdorf has more than 45 years of investment management experience. He currently serves as President of JaK Direct, a division of Muriel Siebert & Co., Inc. From 1997 to 2001, Mr. Kransdorf served as Senior Vice President of J. & W. Seligman & Co. Incorporated, an investment advisory firm. From 1959 to 1997, he was employed in investment and senior management positions at Wertheim & Co. and its successor companies.

         Laurence B. Mindel has 44 years of experience as a restaurant creator, developer and operator and is currently a Managing Partner of Poggio Trattoria, an award-winning Italian restaurant and Copita Tequileria Y Comida, a "modern" Mexican restaurant, both located in Sausalito, California. In 1970, he co-founded Spectrum Foods whose restaurant portfolio included, among others, California-based restaurants Ciao, Prego, MacArthur Park, Guaymas and Harry's Bar. Following the acquisition of Spectrum Foods by Saga Corp. (NYSE) in 1984, Mr. Mindel served as President of Saga's restaurant group where he directed the operations of more than 200 restaurants with combined revenue of over $375 million. When Saga was acquired in 1986, Mr. Mindel founded Il Fornaio, a restaurant and bakery company which became public in 1997 (NASDAQ) and was subsequently taken private in 2001. His professional honors include Nation's Restaurant News "Golden Chain" award, International Foodservice Manufacturers Association "Gold Plate" award, and Food Arts Magazine "Silver Spoon" award and in 1998, he was inducted into the California Restaurant Association's Hall of Fame. In 1985, Mr. Mindel became the first American and the first person of non-Italian descent to be awarded the Caterina de Medici Medal from the Italian government, recognizing excellence in the preservation of Italian heritage outside of Italy.

         David B. Pittaway is Senior Managing Director, Senior Vice President and Secretary of Castle Harlan, Inc., a private equity firm. He has been with Castle Harlan since 1987. Mr. Pittaway also has served as Vice President and Secretary of Branford Castle, Inc., an investment company, since October 1986. From 1987 to 1998, Mr. Pittaway was Vice President, Chief Financial Officer and a director of Branford Chain, Inc., a marine wholesale company, where he is now a director and Vice Chairman. Previously, Mr. Pittaway was Vice President of Strategic Planning and Assistant to the President of Donaldson, Lufkin & Jenrette, Inc., an investment banking firm. Mr. Pittaway is a member of the boards of directors of Bravo Brio Restaurant Group (BRIO) and the Dystrophic Epidermolysis Bullosa Research Association of America. He was formerly a director of Morton's Restaurant Group and McCormick & Schmick's Seafood Restaurants. In addition, he is a director and co-founder of the Armed Forces Reserve Family Assistance Fund.

         Douglas L. Schmick began his restaurant career over 40 years ago and developed several brands, most notably McCormick & Schmick's Fresh Seafood Restaurants. Beginning with Jake's Famous Crawfish restaurant in Portland, Oregon, Mr. Schmick and his partner became leaders and innovators in the affordable, upscale seafood segment and grew the McCormick & Schmick's organization to 96 restaurants nationwide. Mr. Schmick served as Chief Executive Officer and Chairman of the Board for that company from 1974 through 1999 and again from 2007 through 2008. During those years, he guided McCormick & Schmick's through several iterations of ownership, including becoming a publicly-traded company in 2004. He then served as Chairman of the Board until the company's sale in 2012. In 2013, Mr. Schmick joined the Board of Directors of Chuy's Inc., a public company, and Anthony's Coal Fired Pizza, a private group. Mr. Schmick has received many accolades for his work in the restaurant industry, including being named the Ernst & Young Regional Entrepreneur of the Year in 2008.

         Herbert Simon is the Chairman Emeritus of the board of Indianapolis-based Simon Property Group, Inc., a member of the S&P 500 and the largest U.S. publicly-traded real estate company, and has served on its board since 1993. Throughout his career, Mr. Simon has maintained a leadership position within the retail property industry by developing high profile retail facilities, including, but not limited to, The Forum Shops at Caesars, Roosevelt Field, and The Fashion Centre at Pentagon City. Additional diversified business interests beyond real estate include ownership of a National Basketball Association's franchise, the Indiana Pacers. Mr. Simon also served as the former Chairman of the National Basketball

19

Table of Contents

Association's Board of Governors and continues to serve as a member of such board. He is also active in numerous community and civic organizations

        Except as set forth above, each nominee has been engaged in his principal occupation described above during the past five years. There are no family relationships between any of our directors or executive officers as defined under SEC and NASDAQ rules.

Director Independence

        The Board has determined each of the following directors to be an "independent director" as defined under SEC and NASDAQ rules and under the Company's Policies and Procedures Regarding Board of Director Candidates discussed below in the Director Nominations Process section of this Proxy Statement: Alexander L. Cappello; Jerome I. Kransdorf; Laurence B. Mindel; David B. Pittaway; Douglas L. Schmick; and Herbert Simon. In this Proxy Statement, these six directors are referred to individually as an "Independent Director" and collectively as the "Independent Directors."

Board Leadership Structure and Lead Director

        Our Chief Executive Officer, David Overton, also serves as Chairman of our Board. Mr. Overton, who founded the Company along with his parents, Oscar and Evelyn Overton, was the driving force behind the creation and opening of The Cheesecake Factory restaurant concept and has served in a combined role as Chief Executive Officer and Chairman since 1992. We believe this leadership structure enables Mr. Overton to function as the critical link between the Board and the operating organization. It also streamlines communications with and among the Board on key topics such as our strategic objectives and long-term planning.

        In addition to Mr. Overton's leadership on the Board, we determined that the appointment of an independent, lead director ("Lead Director") would be appropriate in order to establish another layer of Board oversight, share certain responsibilities with, and facilitate communication between, our Chairman and our Independent Directors, and continue to follow best practices in corporate governance. To this end, in June 2008, the Board adopted a policy regarding the appointment of a Lead Director—one Independent Director who is selected annually by the Independent Directors. Mr. Kransdorf currently serves as Lead Director.

        The Lead Director presides at executive sessions of the Independent Directors, serves as principal liaison between the Independent Directors and the Chairman of the Board, coordinates the agenda and materials for meetings of the Board, advises the Chairman of the Board concerning scheduling of meetings, makes recommendations to the Chairman of the Board regarding the retention of advisors and consultants who report directly to the Board, makes recommendations to the Board regarding significant corporate governance issues, oversees the Governance Committee's review of our compliance with corporate governance policies adopted by the Board, chairs quarterly meetings of the Independent Directors, and oversees the annual evaluation of the Board and its committees. Our policy regarding the responsibilities of our Lead Director is available on our website. For information on where to access this document, please see the section below entitled Corporate Governance Principles and Guidelines; Corporate Governance Materials Available on Our Website .

Role of Board of Directors in Risk Oversight

        While the Audit Committee of the Board monitors risks related to our financial statements, the Board has determined that oversight of Company-wide risk should remain with the full Board due to the strategic nature of enterprise risk management and the Board's desire to receive feedback from a broad spectrum of disciplines regarding management's plans with respect thereto. The Board meets regularly with our management to review the effectiveness of processes for identifying and managing significant risks. The

20

Table of Contents

Board also reviews with management the strategic objectives that may be affected by identified risks, the level of appropriate risk tolerance, our plans for monitoring, mitigating and controlling risk, the effectiveness of such plans and our disclosure of risk.

        The Board receives information regarding risk management from members of our executive management. Previously, we maintained an Enterprise Risk Management Committee ("ERM") that provided periodic reports to the Board. On August 1, 2013, in order to more efficiently review the Company's risk management programs, the Board disbanded the ERM, and the full Board retained oversight over enterprise risk management matters, including the Company's implementation of a risk oversight framework, and review of the effectiveness of such framework.

Meeting Attendance

        During fiscal 2013, the Board held fourteen meetings and the Independent Directors held three executive sessions. Meetings include both in-person and telephonic meetings. For information regarding committee composition and number of committee meetings held during fiscal 2013, please see the section below entitled Committees of the Board of Directors . Each of our directors attended at least 75% of the aggregate number of meetings of the Board and the committees on which he served.

        Our policy regarding Board members' attendance at our annual meeting of stockholders and our procedure for annual committee membership and chair assignments are both available on our website in our Corporate Governance Guidelines. For information on where to access this document, please see the section below entitled Corporate Governance Principles and Guidelines; Corporate Governance Materials Available on Our Website . The following Directors were present at the 2013 annual meeting; Alexander Cappello, Jerome Kransdorf, Laurence Mindel, David Pittaway and Douglas Schmick. Mr. Overton and Mr. Simon were not present at the meeting.

        The Board determined that each member of the committees of the Board in service for all of fiscal 2013 met the independence requirements applicable to those committees under SEC and NASDAQ rules. The Governance Committee recommends committee membership and chair assignments to the Board, which the Board considers when making committee membership and committee chair assignments at its

21

Table of Contents

meeting immediately following each annual meeting of stockholders. Changes to committee assignments are also made from time to time during the course of the year, as deemed appropriate by the Board. The role of each committee is described below.

        Audit Committee.     The Audit Committee operates pursuant to a written charter and is primarily responsible for monitoring the quality and integrity of our financial statements and related disclosure, and systems of internal controls regarding risk management, finance and accounting; our compliance with legal and regulatory requirements; our independent auditor's qualifications and independence; and the performance of our internal audit function and independent auditors. The Audit Committee provides an avenue of communication among the independent auditors, management and the Board and issues the report of the Audit Committee required by the SEC to be included in our proxy statement.

        The Audit Committee conducts an annual performance evaluation of its charter, composition, complaint procedures, financial oversight responsibilities and other matters. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our public accounting firm engaged to issue an audit report or perform other audit, review or attest services. The Audit Committee pre-approves the audit work, as well as all non-audit work, to be performed by our external auditors after considering its permissibility under SEC rules and its impact on our auditor's independence. The Audit Committee also reviews material written communications the external auditors may provide to management and discusses any concerns with the auditors and management.

        We adopted a written Code of Ethics for our directors, executive officers and senior financial officers, a copy of which is available on our website. Our Code of Ethics requires prompt reporting of potential conflicts to the Audit Committee.

        Pursuant to its charter, the Audit Committee reviews our policies and procedures relating to conflicts of interest and approves any proposed "related person transaction." For this purpose, "related person transaction" means a transaction required to be disclosed pursuant to Item 404 of Regulation S-K adopted by the SEC. For a discussion of our policies with respect thereto, see Policies Regarding Review, Approval or Ratification of Transaction with Related Persons in this Proxy Statement.

        Our Vice President of Internal Audit reports directly to the Audit Committee and is responsible for conducting comprehensive audits of our internal financial controls and the operational effectiveness of related activities and systems.

        Compensation Committee.     The Compensation Committee operates pursuant to a written charter. The Compensation Committee is responsible for determining the compensation of our Chief Executive Officer and all other executive officers. The Compensation Committee reviews and approves all employment, retention and severance agreements for executive officers and prepares, or causes to be prepared, the Compensation Committee Report in our proxy statement. The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work of any compensation advisor retained by the Committee. The Compensation Committee also makes recommendations to the Board concerning non-employee director compensation.

        The Compensation Committee approves and administers our incentive compensation programs, including our equity and bonus incentive plans. The Compensation Committee makes recommendations to the Board with respect to incentive and equity compensation plan structure and periodically reviews and makes recommendations concerning existing or new executive compensation, performance incentives, employee benefits, stock plans or management perquisites. The Compensation Committee authorizes and approves all grants of equity compensation to our employees under our equity compensation plans. The Compensation Committee conducts an annual evaluation of its charter.

22

Table of Contents

        Corporate Governance and Nominating Committee.     The Corporate Governance and Nominating Committee ("Governance Committee") operates pursuant to a written charter. The Governance Committee is responsible for evaluating issues and developments related to corporate governance and making recommendations to the Board with respect to corporate governance standards, corporate governance proposals from stockholders, the establishment and composition of committees of the Board and potential candidates for nomination as Board members. The Governance Committee is responsible for overseeing and recommending programs and activities for the continuing education of directors. The Governance Committee also identifies potential candidates for nomination or appointment as directors and makes recommendations to the Board concerning nominees to be presented for stockholder approval and to fill any vacancies. The Governance Committee conducts an annual evaluation of its charter.

        Other Committees.     The Board of Directors has the discretion to establish other committees and subcommittees from time to time. No additional committees or subcommittees have been established at this time.

        Committee Charters.     All of our committee charters are available on our website. For information on where to access these documents, please see the section entitled Corporate Governance Principles and Guidelines; Corporate Governance Materials Available on Our Website .

Designation of Audit Committee Financial Experts

        With the assistance of our outside legal counsel, the Board reviewed the applicable legal standards for independence and criteria for determination as to each individual who may be deemed an "audit committee financial expert," as well as responses to annual questionnaires completed by the directors, and has determined that each of David B. Pittaway, Chairman of the Audit Committee, and Audit Committee members Alexander L. Cappello and Douglas L. Schmick is an "audit committee financial expert" as such term is defined in Item 407(d)(5)(ii) of Regulation S-K adopted by the SEC.

Corporate Governance Principles and Guidelines; Corporate Governance Materials Available on Our Website

        Our Board is committed to ethical business practices and believes that good corporate governance is important to ensure that the Company is managed for the long-term benefit of our stockholders. In the spirit of this commitment, the Board has adopted a Summary of Corporate Governance Principles and Guidelines ("Corporate Governance Guidelines") which includes, among other topics, the size and operations of our Board and its committees, independence of directors, selection and responsibilities of our Lead Director, Board membership criteria, service by our Board members on boards of other publicly traded companies, director and executive officer stock ownership guidelines and holding periods, our Board member retirement policy, and our policy on communicating concerns to our Board. In addition, the Corporate Governance Guidelines address certain requirements for continuing education of our directors.

        Our Corporate Governance Guidelines, as well as other corporate governance information listed below, are available on our website at www.thecheesecakefactory.com , by clicking on the link for "Investors" and "Corporate Governance":

•

Bylaws



•

Code of Ethics for Executive Officers, Senior Financial Officers and Directors



•

Code of Ethics and Code of Business Conduct



•

Policy on Lead Director



•

Committee Charters (Audit, Compensation and Corporate Governance and Nominating)

23

Table of Contents

•

Equity Grant Procedures



•

Policy on Reimbursement of Incentive Payments



•

Policies Regarding Board of Director Candidates



•

Succession Planning Policy Statement



•

Director and Executive Officer Stock Ownership Guidelines



•

Director Education Policy

        The contents posted on our website are not incorporated by reference into this Proxy Statement or any of our filings with the Securities and Exchange Commission and may be revised by us (in whole or in part) at any time and from time to time.

Stockholder Communications with the Board of Directors

        Our Corporate Governance Guidelines described above include the policy our Board has adopted for stockholders and employees who wish to communicate any concern directly to the Board. Please refer to Section VI of our Corporate Governance Guidelines for a description of this process.

Director Nominations Process

        The Board adopted a policy and procedure regarding Board candidates ("Nominations Policy"). The purpose of the Nominations Policy is to describe the process by which candidates are selected for possible inclusion in the Board's recommended slate of director nominees. The Governance Committee of the Board administers the Nominations Policy and is responsible for identifying candidates for nomination or appointment to the Board. To fulfill this function, the Governance Committee at least annually reviews the size and composition of the Board and its committees, including the number of directors eligible for election at the annual meeting of stockholders, in accordance with our Certificate of Incorporation and Bylaws. The Governance Committee may solicit recommendations for nominees from other directors, members of management or others. In addition, the Governance Committee will consider recommendations of a stockholder of record who timely complies with these policies and procedures.

        We implemented a majority vote policy which is set forth in our Bylaws such that in order to be considered for nomination by the Board, an individual must agree that, if elected, he or she will submit an irrevocable resignation effective upon (i) the director's failure to receive a majority vote in an uncontested election at which he or she is subject to reelection, and (ii) acceptance of the resignation by the Board.

        Minimum Qualifications.     The Governance Committee established the following minimum qualifications for candidates for nomination to the Board:

•

Each candidate must consent in writing to be named in our proxy statement as a nominee and to serve as a director of the Company if nominated, elected or appointed, and qualified.



•

Each candidate must agree that if elected he or she will submit an irrevocable resignation to our corporate Secretary promptly following his or her election or reelection that will be effective upon (i) such director's failure to receive a "majority vote" for reelection in any "uncontested election" (as those terms are defined in our Bylaws) at which he or she is subject to reelection; and (ii) acceptance of that resignation by the Board in accordance with the Bylaws and any policies and procedures adopted by the Board for such purposes.



•

Each candidate's service as a director must not cause us or any of our subsidiaries to lose, or to be threatened with the loss of, any application for, right to the use of, or entitlement to, any material governmental license, authorization or permit.

24

Table of Contents

•

Each candidate shall be an individual who has demonstrated integrity and ethics in his or her personal and professional life and has established a record of professional accomplishment in his or her chosen field.



•

Each candidate shall be prepared to represent the best interests of all of our stockholders and not just one particular constituency.



•

No candidate or family member (as defined under NASDAQ rules) of a candidate may have any current material personal, financial or professional interest in any company which is determined by the Committee to be a significant competitor of ours.



•

Each candidate must be prepared to participate fully in Board activities, including active membership on at least one Board committee, and not have other personal or professional commitments that would, in the Governance Committee's sole judgment, interfere with or limit his or her ability to do so.



•

Each candidate shall be prepared not to serve as a member of the board of directors of more than two publicly traded companies in addition to ours without prior approval of the majority of the Independent Directors.



•

Each candidate shall not have attained the age of 79 as of the date of appointment or election to the Board(1).

(1)

The Board waived this policy with respect to Herbert Simon when it determined that, because of the unique skill set that Mr. Simon continues to provide to the Board, it is in the best interests of the Company and its stockholders to allow Mr. Simon, who had attained the age of 79 in October 2013, to be considered for election to the Board at the Annual Meeting.

        Criteria for Evaluating Candidates; Diversity.     In evaluating nominations, the Governance Committee will seek to achieve a balance of different capabilities and overall diversity in the areas of personal and professional experiences and backgrounds, financial, managerial and operational knowledge; variety of opinions and perspectives; and other differentiating characteristics with the goal of seeking and selecting candidates who will enhance the Board's ability to adequately perform its responsibilities, increase stockholder value and adhere to good corporate governance practices.

        The Governance Committee will consider the following criteria in evaluating candidates for nomination in light of the size and composition of the Board and its committees:

•

Satisfaction of the minimum qualifications established by the Governance Committee.



•

Education and other training.



•

Relevant personal and professional background, including financial, managerial and operational skills and knowledge and experience in both corporate and non-traditional environments, such as government, academia and non-profit organizations.



•

Whether the candidate is a party to any action or arbitration adverse to us or any of our subsidiaries.



•

Whether the candidate would qualify as an "independent" director as defined by NASDAQ's listing standards.



•

Whether the nomination and election of the candidate would result in less than two-thirds of the Board being "independent directors" as defined by NASDAQ's listing standards.



•

Whether the candidate would qualify as an "audit committee financial expert."

25

Table of Contents

•

Whether the candidate has been involved in any legal proceeding that would be required to be disclosed by us pursuant to Item 401(f) ("Involvement in Certain Legal Proceedings") of Regulation S-K.



•

Whether any business relationships exist, or have existed, that would be required to be disclosed pursuant to Item 404 ("Transactions with Related Persons, Promoters and Certain Control Persons") of Regulation S-K.



•

The candidate's reputation for judgment and honesty.



•

Whether we would be required to disclose any of the relationships described in Item 407(e) of Regulation S-K.



•

The number and identity of any other boards of directors of which the candidate is a member.



•

Other professional and personal commitments that could affect the candidate's ability to serve.



•

Whether the candidate has provided accurate and complete responses to any requests for additional information by the Governance Committee.



•

Other relevant characteristics that would enhance the Board's ability to adequately perform its responsibilities, increase stockholder value, and adhere to good corporate governance practices.



•

Any history of criminal convictions.



•

Whether the candidate has agreed to be interviewed by the Governance Committee, if requested.

        Qualifications of Current Directors and Director Nominees.     As described above, the Governance Committee of the Board evaluates the qualifications of our director nominees prior to each annual meeting of stockholders. As part of this evaluation process, the Governance Committee reviews the current composition of the Board and assesses whether the qualifications of each director continue to meet the Committee's requirements for Board service. The following is a description of the particular experience, qualifications, attributes and skills that led the Governance Committee to recommend, and the Board to nominate, each person listed below as a director of the Company.

         David Overton has served as our Chief Executive Officer and Chairman of the Board since our incorporation in February 1992. When evaluating Mr. Overton's qualifications for continuation of his Board service, the Governance Committee and Board considered Mr. Overton's essential leadership role with us, his unique perspective and understanding of our mission, vision and values, the extent and depth of his knowledge and experience related to us and our concepts, and the importance of Mr. Overton's strategic vision.

         Alexander L. Cappello has served on the Board since 2008. When evaluating Mr. Cappello's qualifications for continuation of his Board service, the Governance Committee and the Board considered Mr. Cappello's extensive executive management and financial background, international business experience, international management and marketing experience, prior service as Lead Director of our Company, service as the Chair of our Compensation Committee and member of our Audit Committee, current status as an "independent director" for purposes of NASDAQ and SEC rules, designation by our Board as an "audit committee financial expert," former service on the boards of other public companies, including another restaurant company, and corporate governance expertise.

         Jerome I. Kransdorf  has served on the Board since 1997. When evaluating Mr. Kransdorf's qualifications for continuation of his Board service, the Governance Committee and the Board considered Mr. Kransdorf's more than 45 years of investment management experience, his depth of knowledge and experience specific to us, his current service as Chair of the Governance Committee and member of the Compensation Committee, his prior service on the Audit Committee, and his current status as an "independent director" under NASDAQ and SEC rules.

26

Table of Contents

         Laurence B. Mindel has served on the Board since March 2012. When evaluating Mr. Mindel's qualifications for continuation of his Board service, the Governance Committee and the Board considered Mr. Mindel's 44 years' experience in the restaurant industry, both as a concept creator and an operator, his experience guiding a publicly-traded restaurant company, his current status as an "independent director" under NASDAQ and SEC rules, and his prior service as a member of the Compensation Committee.

         David B. Pittaway  has served on the Board since 2009. When evaluating Mr. Pittaway's qualifications for continuation of his Board service, the Governance Committee and the Board considered his extensive financial and industry experience, including his service on audit committees of other public restaurant companies, his legal background and familiarity with SEC rules and regulations related to public companies, his current status as an "independent director" for purposes of NASDAQ and SEC rules, and his service as a member (and now Chairman) of our Audit Committee and his designation by our Board as an "audit committee financial expert."

         Douglas L. Schmick has served on the Board since August 2012. When evaluating Mr. Schmick's qualifications for continuation of his Board service, the Governance Committee and the Board considered Mr. Schmick's nearly 40 years in the restaurant industry, both as a concept co-creator and operator, his experience guiding a publicly-traded restaurant company, his current status as an "independent director" under NASDAQ and SEC rules, his prior service as a member of the Audit Committee and his designation by our Board as an "audit committee financial expert".

         Herbert Simon has served on the Board since June 2011. When evaluating Mr. Simon's qualifications for continuation of his Board service, the Governance Committee and the Board considered Mr. Simon's considerable domestic and international commercial real estate experience, including his tenure with Simon Property Group, a publicly-held real estate investment trust of which he is Chairman Emeritus and a member of the board of directors, his service as a member of the Compensation Committee, and his current status as an "independent director" under NASDAQ and SEC rules.

        General Nomination Right of All Stockholders.     Stockholders may nominate one or more persons for election as a director of the Company at an annual meeting of stockholders if the stockholder complies with the advance notice, information and consent provisions contained in our Bylaws. Stockholder nominations for the election of directors may only be made by a stockholder of record on both the date of giving notice and on the record date for such meeting by giving timely written notice to our Secretary at our principal offices. Such notice must be received no less than 90 days or more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders. If notice or prior public disclosure of the date of the annual meeting is given or made to the stockholders for a meeting date that is not within 30 days before or after the anniversary of the immediately preceding annual meeting of stockholders, notice by the stockholder will be timely if received not later than the close of business on the tenth day following the day on which such notice was mailed or such public disclosure was made, whichever is first, or no less than 90 days or more than 120 days prior to the annual meeting.

        In the event that we increase the number of directors to be elected and we make no public announcement, at least 100 days prior to the first anniversary of the preceding year's annual meeting, in which we name all of the nominees for director or specify the size of the increased Board of Directors, a stockholder's notice will be considered timely, but only with respect to nominees for any new positions created by the increase, if the notice is delivered to, or mailed and received at, our principal executive offices (addressed to our Secretary) no less than 10 calendar days following the day on which we make the public announcement. In the case of a special meeting of stockholders called for the purpose of electing directors, notice will be timely if the stockholder provides written notice to our Secretary not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public disclosure of the meeting date was made, whichever first occurs, or no less than 90 or more than 120 days prior to the meeting. The stockholder's notice must include all of the information required by our Bylaws. If the stockholder provides a statement that the stockholder intends to deliver a

27

Table of Contents

proxy statement and form of proxy, the nomination may not be brought before the meeting unless the stockholder has delivered a proxy statement and form of proxy to holders of a percentage of our voting shares reasonably believed by the stockholder to be sufficient to elect the nominee or nominees proposed by the stockholder.

        The foregoing summary is not a complete description of the provisions of our Bylaws pertaining to stockholder nominations and proxies. Stockholders may obtain, without charge, a copy of our Bylaws upon written request to our Secretary at our principal executive offices. Our Bylaws are also available on our website. For information on where to access this document, please see the section above entitled Corporate Governance Principles and Guidelines; Corporate Governance Materials Available on Our Website.

        Stockholder Recommendations to the Governance Committee for Nomination of Directors.     Our Bylaws provide that a stockholder of record may also recommend a candidate for consideration by the Governance Committee. Pursuant to our Bylaws, and in order to give the Governance Committee sufficient time to evaluate a recommended candidate, the recommendation must be delivered to, or mailed and received at, our principal executive offices (addressed to the attention of the Secretary) no earlier than one hundred twenty (120) days and not less than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of stockholders. With respect to the 2015 annual meeting of stockholders, recommendations must be received no earlier than January 29, 2015 and no later than February 28, 2015. The stockholder's recommendation must include all of the following:

•

The stockholder's name, address and telephone number.



•

The recommended candidate's name, address and telephone number.



•

The written consent of the recommended candidate to be named in our proxy statement and to serve as a director if nominated, elected or appointed, and qualified to serve.



•

A description of all arrangements or understandings in connection with such recommendation between the stockholder and the recommended candidate or between the stockholder and any other person or persons (including their names).



•

A description of any business, familial or other financial or personal relationship between the stockholder and the recommended candidate.



•

Information regarding the recommended candidate as to each of the criteria identified above for evaluating recommendations.

        Evaluation of Candidates.     The Governance Committee will consider all candidates identified through the process outlined above and will evaluate each of them, including incumbents, based on the same criteria. If, based on the Governance Committee's initial evaluation a candidate continues to be of interest to the Governance Committee, the Chair of the Governance Committee will interview the candidate and communicate his or her evaluation to the other committee members and the Chairman of the Board. Other members of the Governance Committee and senior management will conduct subsequent interviews. Ultimately, background and reference checks will be conducted and the Governance Committee will meet to finalize its list of recommended candidates for consideration by the full Board. If an incumbent is nominated, the interview process may be abbreviated at the discretion of the Chair of the Governance Committee. If the Chair of the Governance Committee is being considered for re-nomination, the other Governance Committee members shall appoint another member of the Governance Committee to head the review process for the Chair's reconsideration.

        Future Revisions to the Nominations Policy.     The Governance Committee's Nominations Policy is intended to provide a flexible set of guidelines for the effective functioning of the director nomination process. The Governance Committee intends to review this policy and procedure at least annually and anticipates that modifications will be necessary from time to time as our needs and circumstances evolve, and to conform with changes in applicable legal or listing standards.

28

Table of Contents

Board of Directors Compensation

        The following table sets forth information regarding the cash compensation arrangements for Independent Directors who served on our Board in fiscal 2013. Any members of the Board who is not an Independent Director does not receive fees for service on the Board or its committees.

Board of Directors Fees		Fiscal 2013
Annual retainer		$	50,000
Cash payment in lieu of equity grant in 2013(1)		$	85,000
Lead Director annual fee		$	15,000
Audit Committee Chair annual fee		$	15,000
Compensation Committee Chair annual fee		$	10,000
Governance Committee Chair annual fee		$	7,500
Enterprise Risk Management Advisory Committee Chair annual fee(2)		$	7,500
Attendance at each in-person or telephonic meeting of the Board of Directors		$	1,500
Attendance at in-person or telephonic committee meetings other than regularly scheduled telephonic meetings of the Compensation Committee(3)		$	1,500
Attendance at regularly scheduled telephonic meetings of the Compensation Committee(3)		$	1,000

(1)

The Board authorized a cash payment of $85,000 (payable in quarterly installments of $21,250 for each fiscal quarter or portion thereof) to each director in lieu of a stock option grant. Rather than offering equity awards to non-employee directors under an equity plan, we have adopted stock ownership guidelines for our directors in order to better align their interests with those of our stockholders.

(2)

Mr. Overton served as Chair of the Enterprise Risk Management Advisory Committee until such Committee's responsibilities were assumed by the full Board in August 2013. He received no fees for acting in such capacity since he is not an Independent Director.

(3)

If more than one meeting (in person or telephonic) occurs on any one day, only one attendance fee is paid for all meetings attended on that day.

        The annual fee, Lead Director fee, committee Chair fees and cash payments in lieu of equity grants are paid quarterly as earned, following the end of each quarter, unless otherwise noted. Board or committee meeting attendance fees are paid monthly, following the end of each month. No fees are paid to Independent Directors with respect to attendance at executive sessions of the Board.

        In order to continue to assure that the interests of our Independent Directors are aligned with the long-term interests of our stockholders, in 2009 we adopted a Non-Employee Director Stock Ownership

29

---

Table of Contents

Policy which requires our non-employee directors to acquire and thereafter maintain ownership of shares of our Company's common stock equal in fair market value to three times their annual cash retainer. For a full description of our stock ownership policy, please see Director and Executive Stock Ownership Guidelines, Holding Periods and Other Requirements below.

        The following table sets forth certain information regarding the compensation earned by each Independent Director who served on our Board in fiscal 2013. Mr. Overton, as an employee of the Company, is not an Independent Director and is not compensated for his services on the Board.

DIRECTOR COMPENSATION FOR FISCAL 2013

Name		Total Fees Earned or Paid in Cash(1)
Alexander L. Cappello		$	180,500
Jerome I. Kransdorf(2)		$	189,750
Laurence B. Mindel		$	166,500
David B. Pittaway		$	177,000
Douglas L. Schmick		$	161,750
Herbert Simon		$	159,250

(1)

Includes $85,000 cash payment in lieu of an equity grant ($21,250 per quarter or portion thereof of Board service in fiscal 2013). See description of Board compensation arrangements for fiscal 2013 set forth above.

(2)

Fees were earned and paid into a nonqualified deferred compensation plan account administered under The Cheesecake Factory Incorporated Executive Savings Plan. See Director Eligibility for Participation in the Executive Savings Plan below.

        As of December 31, 2013, the end of our 2013 fiscal year, the following directors held options exercisable for the number of shares of our common stock shown opposite their names in the table below under our Non-Employee Director Stock Plan, which expired in May, 2007. All outstanding options are fully vested.

Name		Number of Stock Options
Jerome I. Kransdorf			35,014

        Messrs. Cappello, Mindel, Pittaway, Schmick and Simon have not been granted equity in connection with their Board service.

        Director Eligibility for Participation in the Executive Savings Plan.     Members of the Board are eligible to participate in our Executive Savings Plan, a nonqualified deferred contribution plan, by contributing all or a portion of their director fees to this plan. We do not match contributions made by non-employee members of the Board to the Executive Savings Plan. Additional information regarding the Executive Savings Plan appears in the section of this Proxy Statement entitled Nonqualified Deferred Compensation .

        Reimbursement of Expenses and Other Perquisites.     Each Independent Director is entitled to reimbursement for reasonable out-of-pocket expenses incurred in connection with travel to and from, and attendance at, meetings of the Board or its committees and related activities, including director education courses and materials. Independent Directors also receive dining privileges at our restaurants.

30

---

Table of Contents

Indemnification of Officers and Directors

        As permitted by the Delaware General Corporation Law, our Certificate of Incorporation limits the personal liability of our directors for monetary damages for breach of fiduciary duty of care as a director. Liability is not eliminated for (a) any breach of the director's duty of loyalty to us or our stockholders, (b) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) unlawful payment of dividends or stock purchases or redemptions pursuant to Section 174 of the Delaware General Corporation Law, and/or (d) any transaction from which the director derived an improper personal benefit. Our Certificate of Incorporation also provides that we shall indemnify and advance indemnification expenses on behalf of all directors and officers of ours to the fullest extent permitted by Delaware law. Article VIII of our Bylaws also requires us, subject to certain limitations, to indemnify directors and officers and advance expenses. The indemnification and advancement of expenses provisions of Article VIII are not exclusive of any other rights of indemnification of advancement of expenses.

        We also entered into indemnification agreements with all of our directors and Named Executive Officers. Each indemnification agreement requires us to indemnify and hold harmless the director or Named Executive Officer to the fullest extent authorized by the laws of the State of Delaware. Each indemnification agreement also requires us, subject to specific terms and conditions, to advance expenses to the director or officer. Each indemnification agreement also sets forth various procedures and definitions with respect to indemnification and advancement of expenses. We also are obligated to maintain directors' and officers' liability insurance. With specified exceptions, we are not obligated to provide indemnification or advance expenses with respect to actions initiated by the director or officer or to indemnify the director or officer in connection with proceedings by us to enforce non-compete or non-disclosure agreements. To the extent the provisions of the indemnification agreements exceed the indemnification permitted by applicable law, such provisions may be unenforceable or may be limited to the extent they are found by a court of competent jurisdiction to be contrary to public policy.

Director and Executive Officer Stock Ownership Guidelines, Holding Periods and Other Requirements

        Stock Ownership Guidelines for Directors.     The Board adopted stock ownership guidelines for non-employee directors in fiscal 2009 in order to further align the interests of our directors with the long-term interests of our stockholders. The guidelines, as amended, currently provide that, on or before December 31, 2013, all non-employee directors who were members of the Board at the time of adoption of the guidelines (currently, Messrs. Cappello, Kransdorf and Pittaway) are required to acquire (and thereafter maintain ownership of) a minimum number of shares of our common stock with a fair market value equal to three times the annual base cash retainer for non-employee directors ($50,000 as of December 31, 2013). In addition, within three years of their respective appointments, all newly appointed non-employee directors (currently, Messrs. Mindel, Schmick and Simon) are required to acquire (and thereafter maintain ownership of) a minimum number of shares of our common stock with a value equal to three times the annual base cash retainer payable to the non-employee directors. For purposes of this policy, stock ownership includes any shares owned by a director or his or her immediate family members or held by him or her as part of a tax or estate plan in which the director retains beneficial ownership. The value of shares held is calculated once per year, on the first day of the fiscal year. For purposes of determining compliance with the policy, "value" means an assumed per-share value based on the average of the closing price of our common stock on the last day of each of the previous four fiscal quarters. A director is not required to acquire shares of our common stock in accordance with the stock ownership guidelines if the purchase would result in a violation of our Special Trading Policy and Procedures and the addendum thereto. In such a scenario, the director is required to comply with the stock ownership guidelines as soon as reasonably feasible thereafter.

31

---

Table of Contents

        All of our Board members are in compliance with our stock ownership policy as of the first day of our current fiscal year.

        Members of the Board, our officers and staff members are prohibited from trading in any interest or position relating to the future price of our securities, such as a put, call or short sale, or using our stock as collateral for margin loans.

        Stock Ownership Guidelines for Executive Officers.     In fiscal 2010, the Board adopted stock ownership guidelines for certain of our executive officers, including all current Named Executive Officers, in order to align the interests of our key executives with the long-term interests of our stockholders. The ownership guidelines provide that, on or before December 31, 2015, all individuals currently holding the positions with the Company listed below are required to acquire (and thereafter maintain ownership of) a minimum number of shares of the Company's common stock with a value equal to the multiple of such executive's annual base salary (excluding bonus), as follows:

Position with Company		Multiple of Salary
Chief Executive Officer of the Company		6 times annual base salary
President of the Company or of our wholly owned subsidiaries, The Cheesecake Factory Restaurants, Inc. or The Cheesecake Factory Bakery Incorporated		2 times annual base salary
Executive Vice President of the Company		2 times annual base salary

        In addition, within five years of the appointment of any newly appointed officer in the positions designated above (other than a newly-appointed Chief Executive Officer, who has seven years to comply), the newly appointed executive is required to acquire (and thereafter maintain ownership of) shares of our common stock with the value set forth above. For purposes of this policy, stock ownership includes (i) any shares owned by an executive or his or her immediate family members or held by him or her as part of a tax or estate plan in which the executive retains beneficial ownership, and (ii) unvested restricted stock or restricted stock units. The value of shares held is calculated once per year, on the first day of the fiscal year. For purposes of determining compliance with the policy, "value" means an assumed per-share value based on the average of the closing price of our common stock on the last day of each of the previous four fiscal quarters. An executive subject to this policy is not required to acquire shares of our common stock in accordance with the stock ownership guidelines if acquisition at such time would result in a violation of our Special Trading Policy and Procedures and the addendum thereto, in which event the executive is required to comply with the guidelines as soon as reasonably feasible thereafter. Certain hardship exceptions are available at the discretion of the Compensation Committee, but no exceptions have been solicited or granted to date.

        All of our Named Executive Officers subject to our stock ownership policy are in compliance therewith as of the first day of our current fiscal year, in advance of the December 31, 2015 compliance date.

        Members of our Board, our officers and staff members are prohibited from trading in any interest or position relating to the future price of our securities, such as a put, call or short sale, or using our stock as collateral for margin loans.

Policies Regarding Review, Approval or Ratification of Transactions with Related Persons

        In accordance with its charter, our Audit Committee reviews and approves any proposed transactions with a "related person." Any related person transaction will be disclosed in the applicable SEC filing as required by SEC rules. For purposes of these procedures, "related person" and "transaction" have the meanings as defined in Item 404 of Regulation S-K. We had no reportable transactions with related persons required to be disclosed under Item 404 of Regulation S-K since the beginning of fiscal 2013.

32

---

Table of Contents

FORWARD LOOKING STATEMENTS

        This Proxy Statement, including the section entitled Compensation Discussion and Analysis set forth below, contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 (as amended) and Section 21E of the Securities Exchange Act of 1934 (as amended) (the "Acts") . Words or phrases such as "believe," "plan," "will likely result," "expect," "intend," "will continue," "is anticipated," "estimate," "project," "may," "could," "would," "should," and similar expressions are intended to identify forward-looking statements. These statements, and any other statements that are not historical facts, are forward-looking statements and are based on our current expectations and involve risks and uncertainties which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding actions to be taken in the future. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect our business, particularly those set forth in the section on forward-looking statements and in the risk factors in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and in our quarterly reports on Form 10-Q and current reports on Form 8-K, as filed with the SEC.

        Although we believe that the assumptions underlying forward-looking statements are reasonable, any of the assumptions could be incorrect, and there can be no assurance that forward-looking statements will prove to be accurate. Forward-looking statements speak only as of the date on which they are made. Except as may be required by law, we do not undertake any obligation to modify or revise any forward-looking statement to take into account or otherwise reflect subsequent events or circumstances arising after the date that the forward-looking statement was made.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

        This Compensation Discussion and Analysis explains our strategy, design of, and decision-making related to our compensation programs and practices for our principal executive officer, our principal financial officer and our three other most highly compensated executive officers (collectively, "Named Executive Officers"). This Compensation Discussion and Analysis also explains how the compensation of our Named Executive Officers aligns with the interests of our stockholders, and is intended to provide perspective on the compensation information contained in the tables that follow this discussion.

        For fiscal 2013, our Named Executive Officers were:

•

David Overton, Chairman of the Board and Chief Executive Officer;



•

David Gordon, President, The Cheesecake Factory Incorporated(1);



•

Michael E. Jannini, former President, The Cheesecake Factory Incorporated(1);



•

W. Douglas Benn, Executive Vice President and Chief Financial Officer;



•

Debby R. Zurzolo, Executive Vice President, General Counsel and Secretary; and



•

Max S. Byfuglin, President, The Cheesecake Factory Bakery Incorporated.

---

(1)

Mr. Jannini's employment with the Company terminated on February 16, 2013. David M. Gordon was appointed President of the Company effective February 18, 2013.

        While the principal purpose of this Compensation Discussion and Analysis is to review Named Executive Officer compensation, many of the programs discussed apply to other members of senior management who, combined with the Named Executive Officers, are collectively referred to herein as "executives."

33

---

Table of Contents

Business Summary

        As of the Record Date we own and operate 169 The Cheesecake Factory® restaurants, 11 Grand Lux Cafe® restaurants, one RockSugar Pan Asian Kitchen® restaurant and two bakery production facilities. We have the flexibility in our restaurant designs to penetrate a wide variety of markets across varying population densities in both existing and new markets, and we intend to continue developing The Cheesecake Factory restaurants in high-quality, high-profile locations that meet our site standards. In addition to expanding The Cheesecake Factory concept, we seek to selectively pursue other opportunities to leverage the competitive strengths of our restaurant operations, which may include the expansion of our Grand Lux Cafe concept, the potential to expand RockSugar Pan Asian Kitchen and our development or acquisition of new restaurant concepts.

        We also intend to seek opportunities to expand both our restaurant operations and bakery sales internationally. In fiscal 2011, we announced our initial plans for international development through an exclusive licensing agreement with a restaurant and retail operator based in Kuwait to develop The Cheesecake Factory restaurants in the Middle East. As of April 1, 2014, this licensee operated four locations, two in the United Arab Emirates, and one each in Kuwait and the Kingdom of Saudi Arabia and has plans to open additional restaurants in these countries as well as in Lebanon, Qatar and Bahrain. In February 2013, we entered into an exclusive licensing agreement with a restaurant operator based in Mexico to develop The Cheesecake Factory restaurants in Mexico and Chile. This licensee's first restaurant is scheduled to open in fiscal 2014. In August 2013, we opened our first Company-owned and operated restaurant outside of the fifty United States in San Juan, Puerto Rico.

Fiscal 2013 Accomplishments

        We believe that our compensation philosophy and strategies have motivated our executives to achieve strategic and operational objectives that contributed to our strong results for fiscal 2013. A brief summary of some of our fiscal 2013 accomplishments follows:

•

Increased adjusted diluted net income per share by 11.7% from fiscal 2013;



•

Increased our operating income to approximately $160.4 million in fiscal 2013 from approximately $148.2 million in fiscal 2012;



•

Achieved an operating margin of approximately 8.5%, outperforming our selected peer group(1) by approximately 5.7 percentage points (or 570 basis points), and improved our operating margin for fiscal 2013, as compared to fiscal 2012, by approximately 35 basis points;



•

Achieved 16 consecutive quarters of improved comparable restaurant sales through the end of fiscal 2013, including in each quarter of fiscal 2013;



•

Increased our quarterly cash dividend by 17% only one year after initiating it, from $0.12 per share to $0.14 per share beginning in the third quarter of 2013;



•

Met our new restaurant development target with the opening of nine The Cheesecake Factory restaurants in fiscal 2013, including three relocations and our first owned and operated location outside of the 50 United States in San Juan, Puerto;



•

Supported the opening of the fourth The Cheesecake Factory restaurant in the Middle East and approved our first location to open under a licensing agreement in Mexico; and,



•

Continued our high level of guest satisfaction.

---

(1)

See page 49 of this Proxy Statement, under footnotes (3) in Targets for Participants Other than Bakery Division for a discussion as to the peers that comprise this peer group and why they were selected.

34

---

Table of Contents

        The following table provides additional information related to our fiscal 2013 performance as compared to fiscal 2012.

		Fiscal 2013			Fiscal 2012
		(in thousands, except percentage and per share amounts)						Change %
Revenues		$	1,877,910		$	1,809,017			3.8
Comparable restaurant sales(1)			1.0	%		1.9	%		47
Income from operations		$	160,954		$	138,699			16.0
Diluted net income per share		$	2.10		$	1.78			18.0
Adjusted income from operations(2)		$	160,393		$	148,235			8.2
Adjusted diluted net income per share(2)		$	2.10		$	1.88			11.7
Stock price per share as of fiscal year-end		$	48.27		$	32.71			47.6
Adjusted operating margin(2)			8.6	%		8.2	%		4.9

(1)

Comparable restaurant sales includes The Cheesecake Factory and Grand Lux Cafe restaurants but does not include RockSugar Pan Asian Kitchen.

(2)

We calculate the adjusted measures presented above by eliminating the impact of items we do not consider indicative of our ongoing operations from income from operations, net income and diluted net income per share. We believe these non-GAAP measures provide additional information to facilitate the comparison of our past and present financial results. We utilize results that both include and exclude the identified items in evaluating business performance. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. In the future, we may incur expenses or generate income similar to the adjusted items.

        Following is a comparison between fiscal 2013 and fiscal 2012 with respect to a reconciliation of income from operations, net income and diluted net income per share to the corresponding adjusted measures (in thousands, except per share data):

		2013			2012
Net income		$	114,356		$	98,423
After-tax impact from:
Impairment of assets and lease terminations(1)			(337	)		5,722
Proceeds from variable life insurance contract(2)			—			(419	)
Adjusted net income		$	114,019		$	103,726
Diluted net income per share		$	2.10		$	1.78
After-tax impact from:
Impairment of assets and lease terminations			0.01			0.11
Proceeds from variable life insurance contract			—			(0.01	)
Adjusted diluted net income per share(3)		$	2.10		$	1.88

---

(1)

Represents impairment and lease termination expenses and income related to seven The Cheesecake Factory and four Grand Lux Cafe restaurants. The pre-tax amounts associated with these items were ($561) and $9,536 in fiscal years 2013 and 2012, respectively. These amounts were recorded in impairment of assets and lease terminations.

(2)

Represents proceeds realized from a variable life insurance contract used to support our Executive Savings Plan, a non-qualified deferred compensation plan. This item is non-taxable and was recorded in interest and other expense, net.

(3)

Diluted net income per share may not add due to rounding.

35

---

Table of Contents

Overview of Compensation Program

        Compensation Philosophy.     In order to maintain our leadership position in the industry and to continue growing our concepts, both domestically and internationally, we need to attract and retain highly motivated executives who bring experience, innovation and operational excellence to our Company. With this in mind, our compensation philosophy centers on:

•

Attracting and retaining industry-leading executives by paying competitive compensation relative to other companies within the restaurant industry and other industries from which we acquire talent;



•

Driving high performance by connecting compensation to our financial, operating, and strategic goals and results and by appropriately rewarding high performance;



•

Rewarding individual performance and contribution to our success; and



•

Enhancing stock price performance and aligning the interests of our executives with those of our stockholders by tying a substantial portion of our executive compensation to equity incentives and requiring stock ownership for our executive officers and non-employee directors.

36

---

Table of Contents

        Elements of Compensation Program.     During fiscal 2013, our executive compensation and benefits consisted of the components listed in the table below, which provides a brief description of the principal types of compensation, how performance is factored into each type of compensation and the objectives served by each element.

Fiscal 2013 Principal Elements of Executive Compensation

Element		Description		Performance Considerations		Primary Objectives
Base Salary		• Fixed cash payment		• Based on level of responsibility, experience, individual performance, and expected future value / contribution		• Attract and retain talent • Provide competitive compensation • Recognize career experience and individual performance
Performance Incentive Plan		• Performance-based annual cash incentive		• Amount of award tied to level of achievement of objectives and management position, measured as a percentage of Base Salary		• Promote and reward high performance and achievement of Company and divisional annual financial and strategic objectives
Long-Term Stock Incentive Plan ("Stock Plan")		• Stock options • Restricted shares		• Value of pay directly linked with long-term stock price performance • In fiscal 2013, restricted shares granted to our CEO included a stockholder approved performance criteria as a condition for vesting. Beginning in fiscal 2014, a stockholder approved performance criteria as a condition for vesting was added to all Named Executive Officer restricted share grants.		• Align executive interests with stockholder interests • Attract and retain talent • Reward individual performance through amount of awards granted and Company performance through stock price growth.
Retirement and Welfare Benefits		• Medical, dental, vision, life insurance and long-term disability insurance • Non-qualified deferred compensation plan • Defined benefit retirement agreement (for Chief Executive Officer only)		• Not applicable		• Attract and retain talent • Provide competitive compensation • Provide reasonable security to allow executives to perform at their best level
Executive Perquisites		• Company-leased vehicle or car allowance • Executive physical for Senior Vice Presidents and above only • Relocation benefits on a case-by-case basis • Vacation and Sabbatical Leave Program		• Not applicable		• Attract and retain talent • Provide competitive compensation • Promote health and wellbeing of senior executives (executive physical perquisite, Vacation and Sabbatical Leave Program only)

37

---

Table of Contents

        Factors Considered in Making Compensation Decisions.     Our compensation strategy with respect to individual executives is flexible and enables us to appropriately differentiate and reward individuals with different experience and contributions, while taking into account:

•

Company financial and operational performance,



•

The executive's individual performance, experience and qualifications,



•

The scope of the executive's role,



•

The level of total compensation for our other senior executives, and



•

Competitive market data, which helps us evaluate how our executive pay levels compare to others in our industry and within the market in which we compete for talent.

        All of the factors set forth above are considered by the Compensation Committee in a subjective manner, without any specific formula.

Pay for Performance

        We believe in driving high performance by tying compensation to our financial, operating, and strategic goals and results, and by providing appropriate rewards. The Compensation Committee considers our competitive environment and historical financial performance when establishing performance targets for the next fiscal year. The Compensation Committee adjusts base salary and performance incentive compensation to reward executives when our financial and strategic objectives are accomplished and to withhold or limit salary increases and disapprove or reduce performance incentive compensation when we fail to fully accomplish our goals and drive results.

        Consistent with our belief in pay for performance, we design our executive compensation program, and particularly the compensation of our Chief Executive Officer, to reflect Company performance and our stock performance over time. Based on our performance in fiscal year 2013 as outlined above, Mr. Overton received 81.25% of his target bonus. (See Fiscal 2013 Performance Objective Achievement , below.) In fiscal 2012, we exceeded the performance criteria, and Mr. Overton received 110% of his target bonus. In fiscal year 2011 similar to fiscal 2013, we did not meet all of the performance criteria and, as a result, Mr. Overton received 80% of his target bonus. With respect to long-term incentives (now targeted for fiscal 2014 at approximately 65% for our Chief Executive Officer's total target compensation), the potential gains that could be realized from option exercises and restricted share vesting are directly impacted by our continued ability to drive even better financial performance in the future resulting in increased share price.

        In fiscal 2013, restricted shares granted to our Chief Executive Officer included stockholder approved performance criteria as a condition for vesting. Beginning in fiscal 2014, a stockholder approved performance criteria was added to all Named Executive Officer restricted share grants as a condition for vesting restricted shares.

        The Compensation Committee seeks to establish compensation packages that reward high performance. We look at different analytical assessments, including an alignment methodology performed by Farient Advisors, LLC, the Compensation Committee's independent compensation consultant ("Farient Advisors"). The Compensation Committee requested that Farient Advisors assess the relationship between our executive compensation and long-term performance. In addition to conducting quantitative analyses commonly relied upon by independent proxy governance organizations to test the alignment of our Chief Executive Officer's pay and performance, Farient used its pay for performance alignment model to test the alignment of our Chief Executive Officer's average annualized Performance-Adjusted Compensation ("PAC") (including salary, actual bonus, and the performance-adjusted value of long-term incentives) and performance, as indicated by Total Stockholder Return ("TSR"), defined as stock price appreciation plus dividends, as if those dividends had been reinvested in the Company's stock, over time. In doing so, Farient

38

---

Table of Contents

Advisors compared our Chief Executive Officer's average annualized PAC over successive three-year rolling periods (beginning with the there-year period from January 1, 2002 to December 31, 2004 and ending with the there-year period from January 1, 2011 to December 31, 2013) to our compound annual TSR for the same 3-year rolling periods and tested the results against the companies in our peer group identified in upcoming section "Market Positioning, Comparison Group for Fiscal 2013" (modified to exclude Bloomin' Brands as there was limited public history and Chipotle Mexican Grill due to being an outlier in pay).

        As indicated by the chart below, Farient Advisors' analysis of the Company's pay for performance shows that our Chief Executive Officer pay has historically been and continues to be strongly aligned with the Company's performance and stockholders' interests. This is indicated by the fact that our Chief Executive Officer's annualized PAC has trended with the Company's performance. Specifically, when our TSR is higher, our Chief Executive Officer's PAC is higher, and conversely, when our TSR is lower, our Chief Executive Officer's PAC is lower. In addition, Farient's analysis indicated that our Chief Executive Officer's average annual PAC, considering the Company's size and the performance we delivered, has been and continues to be reasonable. Farient Advisors considers PAC to be reasonable for companies that generally pay Chief Executive Officers, on a performance-adjusted basis, below the upper boundary of a competitive pay range that Farient Advisors deems to be acceptable based on a company's size, peer group pay practices, and performance.

        Additionally, Farient Advisors concluded that we achieved aligned CEO compensation through:

•

Our consistent use of equity;



•

Our goal-setting in a competitive performance context;



•

Our longer vesting on options and restricted stock;



•

Clawback policy; and



•

Our Chief Executive Officer's significant stock ownership (8.3%) (as reported in April 19, 2013 proxy)

---

(1)

Peer group excludes data for Bloomin' Brands Inc. (limited public history) and Chipotle Mexican Grill Inc. (outlier)

39

---

Table of Contents

        Pay Mix.     Our Compensation Committee seeks to maintain an emphasis on performance-based pay. A significant portion of our executives' compensation is at risk through short- and long-term incentive programs. We do not use specific percentages to allocate between cash and non-cash compensation and short-term versus long-term compensation; however, we believe a significant portion of our executives' pay should be performance-based. Mr. Overton has a proportionately greater percentage of performance-based compensation as compared to other Named Executive Officers because we believe he has a greater ability to influence the long-term performance of the Company.

        The following charts show each element of our compensation as a percentage of the target total compensation for our Chief Executive Officer and other Named Executive Officers, for fiscal years 2013, 2012 and 2011.

CEO Target Pay
Other NEO Target Pay

        The percentage of our performance-based pay remains a significant portion of total compensation for our Chief Executive Officer and our other named executives, which aligns our executive compensation programs with the interests of our stockholders. This alignment is strengthened further by:

•

Longer equity vesting periods than comparable companies in our industry (i.e., generally five years for stock options and restricted stock, versus three to four years for comparable companies);



•

Stock ownership policies for our Chief Executive Officer and other Named Executive Officers who, along with the members of our Board, as of the Record Date own (or have rights to acquire within 60 days of the Record Date for this Annual Meeting), in the aggregate, approximately 9.3% of our common stock; and

40

---

Table of Contents

•

A "clawback" policy requiring executives to pay back any bonus deemed appropriate by the Audit Committee if we are required by law or applicable accounting or auditing standards to restate our financial statements to correct an accounting error as a result of material noncompliance with financial reporting requirements, and the bonus was directly based on results disclosed in those financial statements (see Clawback Policy in the Other Considerations section of this Compensation Discussion and Analysis ).

2013 "Say on Pay" Advisory Vote on Executive Compensation

        The Company provided stockholders a "say on pay" advisory vote on its executive compensation at the Company's 2013 annual meeting of stockholders. The stockholders approved, by a vote of approximately 98% of shares represented in person or by proxy (not counting broker non-votes), the compensation program and policies and the compensation paid to the Company's Named Executive Officers as presented in the proxy statement for the 2013 annual meeting of stockholders. In light of the favorable "say on pay" vote, the Compensation Committee did not materially adjust the Company's compensation programs and strategies, other than to adopt a value-based equity grant approach. The Company intends to provide stockholders with a "say on pay" advisory vote on an annual basis.

Oversight of Executive Compensation

        Compensation Committee.     The Compensation Committee of our Board determines our Named Executive Officers' base salary, performance incentive awards, equity compensation plans, and other compensation related matters, and is supported in that process by an independent compensation consultant (see below) and members of senior management, including our Senior Vice President of Human Resources and Vice President of Compensation and Benefits. The Compensation Committee regularly evaluates our compensation programs to ensure they support our business objectives, which include (i) continued quality restaurant growth that generates acceptable returns, (ii) sustainability of our brands and brand expansion as appropriate, (iii) profitability, (iv) operational excellence, and (v) the creation of long-term value for our stockholders. The Compensation Committee operates according to a written charter that is available on our website at www.thecheesecakefactory.com , by clicking on "Investors" and "Corporate Governance."

        Role of Outside Consultants.     Since fiscal 2008, the Compensation Committee has engaged Farient Advisors to provide detailed evaluation and recommendations regarding our executive and Board compensation programs and to advise the Compensation Committee with respect to structuring our compensation plans to achieve our business objectives. Farient Advisors conducts research as directed by the Compensation Committee, and supports the Compensation Committee in the design of executive and Board compensation. Although Farient Advisors works with management, including our Chief Executive Officer, to develop programs that support our business objectives while carrying out its duties for the Compensation Committee, Farient Advisors is retained by and reports directly to the Compensation Committee and does not provide any other services to the Company other than those for which it has been retained by the Compensation Committee.

        Role of Chief Executive Officer in Compensation Decisions.     Our Chief Executive Officer provides the Compensation Committee with his assessment of the performance of each Named Executive Officer (other than himself) and his perspective on the factors described above under Factors Considered in Making Compensation Decisions when developing his recommendations for each Named Executive Officer's compensation (again, other than his own), including salary adjustments, long and short-term incentive compensation, discretionary bonuses, and compensation adjustments in conjunction with promotions. The Compensation Committee discusses our Chief Executive Officer's recommendations, consults with Farient Advisors, and then approves or modifies the recommendations in collaboration with the Chief Executive Officer.

41

---

Table of Contents

        Compensation of our Chief Executive Officer.     Our Chief Executive Officer's compensation is determined solely by the Compensation Committee, which approves the terms of his employment agreement and subsequently adjusts his base salary, long and short-term performance incentive compensation and other benefits from year to year. Please see the section entitled Employment Agreements in this Proxy Statement for a summary of the material terms of Mr. Overton's employment agreement. The Compensation Committee solicits our Chief Executive Officer's perspective on his own compensation, but makes determinations regarding his compensation independently and without him or other Named Executive Officers present. The Compensation Committee reviews Mr. Overton's annual cash and long and short-term performance incentive compensation at approximately the same time and following the same process as compensation levels are reviewed for all other Named Executive Officers, as further described in this Compensation Discussion and Analysis.

Market Positioning

        Our Compensation Committee, in collaboration with our Chief Executive Officer and Senior Vice President of Human Resources, reviews market data related to pay practices among comparable companies, but does not target specific market positioning of pay when determining compensation for individual Named Executive Officers. Rather, the Compensation Committee uses comparative market data as one of several factors when making individual compensation decisions.

        As part of its compensation review process for fiscal 2013, the Compensation Committee reviewed an analysis prepared by Farient Advisors of market pay practices for positions similar to the positions of our Named Executive Officers and other key executives, adjusted to take into account differences, if any, between the scope of our Named Executives Officers' responsibilities compared to their counterparts in positions with similar titles in comparable companies. This analysis used pay comparisons from (i) comparable companies in the restaurant and hotel industry (see below) as compiled from their proxy disclosures and other SEC filings, and (ii) two recognized market survey sources, the Mercer Executive Survey and the Chain Restaurant Compensation Association (CRCA) Survey. For the Chief Executive Officer and the Chief Financial Officer, size-adjusted data from the comparable companies listed below was weighted at 50% and the surveys were weighted at 25% each for purposes of determining market pay positions in such analysis. For the other Named Executive Officers, there was not enough representation for other positions in the proxy data, so the surveys were weighted at 50% each in such analysis.

        Comparison Group for Fiscal 2013.     The Compensation Committee reviewed the composition of our executive compensation peer group to ascertain whether the group of companies we use as part of our compensation analyses adequately represented those companies that are similar to us in size and complexity of operations and with whom we compete for executive talent. The companies against which we compared ourselves for Named Executive Officers' and other key executives' compensation decisions made for fiscal 2013 were comprised of the following companies that (i) had revenue between $500 million and $4 billion (approximately 0.3 times to 2.5 times our revenue, with the exception of Darden

42

---

Table of Contents

Restaurants), and (ii) in the aggregate, had an overall median revenue of $1.3 billion, which was below our revenue of $1.8 billion:

BJ's Restaurants		Chipotle Mexican Grill		Red Robin Gourmet Burgers
Bloomin' Brands Inc.		Darden Restaurants*		Ruby Tuesday
Bob Evans Farms		Denny's		Texas Roadhouse
Brinker International		DineEquity		Wyndham Worldwide Corp.
Buffalo Wild Wings		Hyatt Hotels Corp.
Cracker Barrel Group		Panera Bread Company

*

Included in our comparison group because of its importance as an industry leader in casual dining, even though its revenues are greater than the $4 billion upper range limit.

        Due to the size differences among these companies and us, Farient Advisors used regression analyses to size-adjust the results and corroborated the findings with data from our survey sources.

        While this comparison group provides the Compensation Committee with an important general frame of reference, the Compensation Committee does not target our Named Executive Officers' compensation at any specific percentile or within a specific range of the comparison group's pay levels. Based upon its review of the size-adjusted competitive market data for the companies set forth above and the Company's stock price assumptions applicable during the period in which compensation levels were being reviewed, the Compensation Committee determined that the appropriate total direct compensation (which includes base salary, short-term incentive bonus, and long-term incentives) for fiscal 2013 for our Chief Executive Officer would be positioned at approximately the 60th percentile and that of our other Named Executive Officers as a group would be positioned at approximately the 50th percentile compared to our comparable executive compensation peer group companies.

        Comparison Group for Fiscal 2014.     In the last quarter of fiscal 2013, the Compensation Committee again reviewed the composition of our executive compensation peer group for compensation decisions to be made for fiscal 2014, and added Ignite Restaurant Group. The resulting group of companies similar to us in size and complexity of operations and against which we compete for executive talent is comprised of the following companies that (i) have annual revenue between $500 million and $4.5 billion (approximately 0.3 times to 2.3 times our revenue, with the exception of Darden Restaurants), and (ii) in the aggregate, have an overall median revenue of $1.7 billion, which is slightly below our revenue of $1.9 billion:

BJ's Restaurants		Chipotle Mexican Grill		Panera Bread Company
Bloomin' Brands Inc.		Darden Restaurants**		Red Robin Gourmet Burgers
Bob Evans Farms		Denny's		Ruby Tuesday
Brinker International		DineEquity		Texas Roadhouse
Buffalo Wild Wings		Hyatt Hotels Corp.		Wyndham Worldwide Corp.
Cracker Barrel Group		Ignite Restaurant Group*

*

New to our comparison group for fiscal 2014. Added because they met the criteria set out above and are expected to meet revenue requirements this fiscal year.

**

Included in our comparison group because of its importance as an industry leader in casual dining, even though its revenues are greater than the $4 billion upper range limit.

        The Committee reviewed the competitive pay data presented by Farient Advisors and agreed that an increase in compensation would be appropriate, considering each executive's individual performance and the favorable performance of the Company overall. These increases (described in greater detail below)

43

---

Table of Contents

position Named Executive Officers' total direct compensation at between the 50 ^th  and 75 ^th  percentile of the market. For the Chief Executive Officer in particular, the Committee determined that an approximate 4% increase in total target direct compensation (based on an assumed stock price of $47.00) would be appropriate in consideration of his highly effective leadership of the Company, Company performance overall in fiscal 2013, and his current pay positioning at approximately the 75 ^th  percentile of the market.

Principal Elements of Compensation

Base Salary

        In accordance with our compensation objectives, salaries for our Named Executive Officers are determined by the Compensation Committee and administered to reflect the individual officer's career experience, contribution and performance, as well as the value of the position relative to the marketplace. During its annual review of base salaries, the Compensation Committee has historically considered each Named Executive Officer's performance during the prior year and the recommendations of our Chief Executive Officer (except with respect to his own compensation), as well as market data provided by Farient Advisors, as discussed above.

        Without using any particular formula or assigning a specific weight to any factor, the Compensation Committee also considers:

•

Our overall performance, including our performance as compared to certain performance objectives established under our short-term performance incentive plan for the applicable fiscal year,



•

The share value of our common stock at the end of the applicable fiscal year compared to the end of the prior fiscal year,



•

The role each Named Executive Officer played and his or her contributions in driving our overall performance, and



•

As a general point of reference, market position of our Named Executive Officers' compensation as discussed above (see Market Positioning ).

44

---

Table of Contents

        The following chart shows the annualized base salaries for our Named Executive Officers for fiscal years 2012 through 2014 and their respective increases, which the Compensation Committee determined were reasonable and appropriate based on individual and Company performance.

FISCAL 2012-2014 ANNUALIZED BASE SALARIES*

		Fiscal 2014						Fiscal 2013						Fiscal 2012
Name and Principal Position		$			% Increase			$			% Increase			$
David Overton Chairman of the Board and Chief Executive Officer		$	995,000			0.5	%	$	990,000			3.1	%	$	960,000
David Gordon** President		$	525,000			5.0	%	$	500,000			17.6	%	$	425,000
W. Douglas Benn Executive Vice President and Chief Financial Officer		$	485,000			4.0	%	$	466,000			4.0	%	$	448,000
Debby R. Zurzolo Executive Vice President, General Counsel and Secretary		$	452,500			4.0	%	$	435,000			4.1	%	$	418,000
Max S. Byfuglin President, The Cheesecake Factory Bakery Incorporated		$	400,000			3.0	%	$	388,000			4.0	%	$	373,000

*

Salaries for fiscal 2014 and 2013 were effective in March of each year. Salaries for fiscal 2012 were effective in January 2012.

**

Mr. David Gordon was appointed President of the Company effective February 18, 2013.

Annual Cash Incentive Compensation

        Annual cash incentive compensation for our executive officers is based on our performance against specific objectives, such as earnings per share, sales growth, consolidated income from operations, guest satisfaction, product development, net operating profit, cash flow, and/or market share and revenues, among others.

        Each executive is assigned a minimum threshold target and maximum bonus opportunity as a percentage of base salary, and he or she may earn a bonus based on the level of achievement of performance objectives within that range. At the beginning of each fiscal year, the Compensation Committee establishes both the performance objectives and the formula for computing the performance bonus if the performance objectives are achieved at each range. Performance bonuses are payable in the first quarter of the following fiscal year, after the Compensation Committee verifies performance relative to the pre-established objectives and certifies to what extent, if any, bonuses were earned within the range between and including the minimum and the maximum bonus opportunity.

        The Compensation Committee retains negative discretion with respect to payment of performance bonuses under the Company's Incentive Plan and may not award performance-based bonuses under our Incentive Plan that are higher than the ranges established under the Incentive Plan for the applicable fiscal year. In addition, under the terms of our Incentive Plan, the amount of any individual performance bonus in any fiscal year may not exceed $2.5 million.

        Fiscal 2013 Performance Incentive Plan Design:     For fiscal 2013, the Compensation Committee established the following minimum, threshold, target and maximum bonus opportunities by position for

45

---

Table of Contents

executives under our Incentive Plan. Actual payouts depend upon performance results with ranges as follows:

		Incentive Bonus as % of Salary
Name		Minimum			Threshold(1)			Target(2)			Maximum(3)
Chief Executive Officer			0	%		18.75	%		100	%		175	%
President			0	%		14.1	%		75	%		131.3	%
Executive Vice President			0	%		12.2	%		65	%		113.8	%
Subsidiary President			0	%		12.2	%		65	%		113.8	%

(1)

The threshold award assumes the achievement of 85% of the Company-wide operating income target.

(2)

The target award assumes the achievement of 100% of the Company-wide operating income target and 100% of certain strategic objectives.

(3)

The maximum award assumes achievement of 115% or more of the Company-wide operating income target and 100% of certain strategic objectives. The bonus may not exceed $2.5 million for any individual in any fiscal year.

        Under the Incentive Plan for 2013, the Compensation Committee established (1) a Company-wide operating income objective with respect to 75% of the potential award (except for our bakery executives, whose plan is described below) and (2) a threshold operating income objective plus certain strategic objectives with respect to 25% of the potential award, in order to better balance the rewards for near-term financial performance with the rewards for long-term strategic growth. The minimum threshold at which awards may be payable requires achievement of 85% of the financial performance incentive target.

        The Compensation Committee also established a similar structure for the Incentive Plan for 2013 for our bakery division, which plan included additional operating income and strategic objectives applicable to the bakery division, as follows:

•

50% of the potential award based solely upon bakery division operating income objectives (up to 200% of target),



•

25% based on Company-wide operating income objective (up to 200% of target), and



•

25% based on bakery division strategic objectives (up to 100% of target) once a minimum Company-wide operating income threshold has been met

46

---

Table of Contents

        For fiscal 2013, the Compensation Committee approved the following potential payout schedules for both the Company as a whole and our bakery division:

Fiscal 2013 Company Bonus Schedule (excludes Bakery):

		Company Operating Income Achievement (75% weight)		Award Payout %				Company Strategic Initiative Achievement (25% weight)		Award Payout %
		115%		200% (max)				100%		100% (max)
		101%-114%		+ approx. 6.7% of award for 1% additional achievement(1)				50%		50%
		100%		100% (target)				0%		0%
		86%-99%		+5% of award for 1% Additional achievement(2)
		85%		25% (threshold)
		<85%		0%

(1)

For example, 101% achievement would pay out at approximately 107%; 102% achievement would pay out at approximately 113%, up to a maximum of 200% at 115% achievement.

(2)

For example, 86% achievement would pay out at 30%; 87% achievement would pay out at 35%, etc.

Fiscal 2013 Bakery Bonus Schedule:

Bakery Operating Income Achievement (50% weight)		Award Payout %				Company Operating Income Achievement (25% weight)		Award Payout %				Bakery Strategic Initiatives Achievement (25%)		Award Payout %
115%		200% (max)				115%		200% (max)				100%		100% (max)
101%-114%		+ approx. 6.7% of award for 1% additional achievement(1)				101%-114%		+ approx. 6.7% of award for 1% additional achievement(1)				50%		50%
100%		100% (target)				100%		100% (target)				0%		0%
86%-99%		+5% of award for 1% additional achievement(2)				86%-99%		+5% of award for 1% additional achievement(2)
85%		25% (threshold)				85%		25% (threshold)
<85%		0%				<85%		0%

(1)

For example, 101% achievement would pay out at approximately 107%; 102% achievement would pay out at approximately 113%, up to a maximum of 200% at 115% achievement.

(2)

For example, 86% achievement would pay out at 30%; 87% achievement would pay out at 35%, etc.

        Fiscal 2013 Performance Objectives.     At the time the Compensation Committee was considering financial and strategic performance objectives for fiscal 2013, industry experts, such as Technomic, Nation's Restaurant News and the National Restaurant Association, forecast low growth in guest traffic given

47

---

Table of Contents

ongoing macroeconomic conditions, including high unemployment levels and low consumer confidence levels. In addition, industry experts predicted that the environment for casual dining operators would be impacted by cost inflation (i.e., commodity costs, payroll costs and costs to comply with government regulations), upcoming health care reform regulations and general economic uncertainty. Additional factors considered by the Compensation Committee included:

•

The appropriate rate of growth of our operating income;



•

The role of operating margin as a primary driver of value creation within the restaurant industry, due in part to the low overall sales growth, and use of a peer group relative measure to appropriately account for commodity cost movements, macro or industry-wide cycles;



•

The importance of continuing international expansion and operational excellence with our licensed partner in the Middle East and expanding international growth to other regions; and



•

The need to enhance staff engagement scores which would have a direct correlation to guest satisfaction.

        Additionally, the Compensation Committee considered factors that were important to the continued growth and success of our bakery division, including:

•

Appropriate growth of our bakery division's operating income;



•

Improving profitability of external business which showcases and leverages our brands;



•

Revitalizing our distributor sales approach and generating intended improvement in the performance of our Dream Factory business within this segment; and



•

Achieving international growth plans.

        Taking all of these factors into account, the Compensation Committee set the following performance objectives under the Incentive Plan for fiscal 2013, which the Compensation Committee believed were appropriate, reasonably difficult to achieve and, if achieved, would be likely to deliver significant value to the Company and our stockholders:

Targets for Participants Other than Bakery Division:

Weight		Financial Performance Target
75%		Consolidated operating income of $167.1 million(1)
25%		Additional strategic objectives, including:
		• Minimum consolidated operating income threshold of $130 million for any strategic objectives to pay out(2)
		• Fiscal 2013 operating margin greater than average of a peer group selected by our Compensation Committee(3)
		• Continue international expansion and improve operational excellence with our licensed partner in the Middle East, measured against milestones
		• Enhance restaurant staff engagement scores by a specific percentage and achieve additional operational milestones

---

(1)

If achieved, would equal a 12% increase over fiscal 2012 consolidated operating income of $149 million.

(2)

Approximately 87% of fiscal 2012 actual consolidated operating income and approximately 78% of 2013 consolidated operating income target.

48

---

Table of Contents

(3)

The peer group against which the Compensation Committee compared us for fiscal 2013 was comprised of the following restaurant companies: Bloomin' Brands (BLMN); Darden Restaurants (DRI); Bravo Brio Restaurant Group (BBRG); BJs Restaurants (BJRI); Ruby Tuesday (RT); and Ignite Restaurant Group (IRG) . In order to remain in the peer group for fiscal 2013, each company had to remain publicly traded with units that are at least 75% company-operated. The potential peer group is evaluated by the Compensation Committee on an annual basis. First, all publicly traded, full service restaurants are reviewed as the potential candidates; Next, the group was further segmented into casual dining (including bar and grill) and upscale casual dining, but excluding companies with revenue of less than $250 million; Finally, the Compensation Committee focused on company owned concepts (in which less than 25% of the store units are franchised). The Compensation Committee believes the peer group identified above was the most representative competitive set for which data is regularly available and is a sufficiently large sample. For fiscal 2013 the Compensation Committee added Bloomin' Brands and Ignite Restaurant Group and eliminated O'Charley's, P.F. Chang's China Bistro and McCormick & Schmick's, all of which went private in 2012 and for which publicly available financial information was not available for the entire 2013 fiscal year.

Targets for Bakery Division Participants (including Mr. Byfuglin):

Weight		Performance Target
50%		Bakery division operating income of $11.3 million(1)
25%		Company consolidated operating income target of $167.1 million
25%		Additional strategic objectives, including:
		• Minimum Company consolidated operating income threshold of $130 million for any bakery strategic objectives to pay out
		• Improve profitability of external business by a specific percentage
		• Revitalize distributor sales approach, measured against milestones, and
		• Achieve international growth plan, measured against milestones

---

(1)

If achieved equals a 5% increase over fiscal 2012 bakery operating income of $10.5 million.

        The performance measures for fiscal 2013 were similar in nature to those for fiscal 2012 in that they included an operating income target and additional strategic initiatives as qualified by a minimum operating income target, both Company-wide and for our bakery division. The operating income target was selected from a stockholder-approved list of performance incentive targets under our Incentive Plan intended to qualify for deductibility by us under Section 162(m) of the Internal Revenue Code. However, due to the complexities of Section 162(m) and technical requirements related thereto that may change from time to time, we can provide no assurance regarding deductibility under Section 162(m).

49

---

Table of Contents

        Fiscal 2013 Performance Objective Achievement:     In February 2014, the Compensation Committee reviewed our performance against the Company's performance objectives for fiscal 2013 and certified that we achieved the following results:

		Target		Actual		Performance vs. target
Operating Income Target (75% of award)(1):
Fiscal 2013 consolidated operating income		$167.1 million		$160.4 million			95%
Strategic Initiatives (25% of award)(2):
Threshold operating income		$130 million		$160.4 million			100%(2)
Fiscal 2013 operating margin greater than an average of a peer group selected by our Compensation Committee(3)		>2.8%		>5.7%(4)			Achieved
Continue our international expansion and improve our operational excellence with our licensed partner in the Middle East, measured against milestones		Achieve milestones		Measured against milestones			Achieved
Enhance restaurant staff engagement scores by a specific percentage and achieve additional operational milestones		Achieve milestones		Measured against milestones			Achieved

---

(1)

Achievement of the consolidated operating income objective is measured only after accruals for performance achievement awards have been made.

(2)

Payable only if consolidated operating income is at least $130 million. Maximum payout for strategic objectives is 100% of target.

(3)

Operating Margin Compared to Average for Defined Peer Group: The peer group against which we compared ourselves for fiscal 2013 was comprised of the following restaurant companies: Bloomin' Brands; Darden Restaurants; Bravo Brio Restaurant Group; BJs Restaurants; Ruby Tuesday; and Ignite Restaurant Group. In order to remain in the peer group for fiscal 2013, each company must be publicly traded with units that are at least 75% company-operated. See page 49 of this Proxy Statement, under footnotes (3) in Targets for Participants Other than Bakery Division for a discussion as to which peers comprise this peer group and why they were selected.

(4)

Achieved fiscal 2013 operating margin 5.7% greater than defined peer group.

50

---

Table of Contents

        The Committee then reviewed our bakery division's performance against its performance incentive objectives established for fiscal 2013 under the Incentive Plan and determined that the following results were achieved:

		Target		Actual		Performance vs. target
Bakery Operating Income Target (50% of award):
Fiscal 2013 bakery division operating income		$11.3 million		$9.7 million			86%
Company's Consolidated Operating Income (25% of award)(1):
Fiscal 2013 consolidated operating income		$167.1 million		$160.4 million			95%
Additional strategic objectives (25% of award)(2):
Threshold consolidated operating income		$130 million		$160.4 million			100%(2)
Improve profitability of external business by a specific percentage		+0.6%		(5.2%)			Not Achieved
Revitalize distributor sales approach, measured against milestones		Against Milestones		Measured against milestones			Partially Achieved
Achieve international growth plan, measured against milestones		Against milestones		Measured against milestones			Partially Achieved

---

(1)

Achievement of the operating income objective is measured only after accruals for performance achievement awards have been made.

(2)

Payable only if operating income is at least $130 million. Maximum payout for strategic objectives is at 100% of target. The Compensation Committee determined that our bakery division achieved 25% of its strategic objectives for fiscal 2013 (see table below for calculation).

        The following payout percentages as a percentage of target opportunity were then calculated based on the payout schedules approved by the Compensation Committee as set forth above:

Company:

Component		% Attained			% Payout			Weighted			Actual Payout as % of Target
Consolidated Operating Income			95	%		75	%		75	%		56.2	%
Strategic Objectives			100	%		100	%		25	%		25.0	%
Total Award												81.2	%

Bakery Division:

Component		% Attained			% Payout			Weighted			Actual Payout as % of Target
Bakery Operating Income			86	%		30	%		50	%		15.0	%
Consolidated Operating Income			95	%		75	%		25	%		18.7	%
Strategic Objectives			25	%		25	%		25	%		6.3	%
Total Award												40.0	%

51

---

Table of Contents

        As a result of the Company's fiscal 2013 performance, our Named Executive Officers received Performance Incentive Awards under our fiscal 2013 performance incentive program, as follows:

Name		Target Performance Incentive as % of Salary			Actual Payout as % of Target			Actual Payout as % of Salary*			2013 Performance Incentive Award
David Overton			100	%		81.2	%		81.2	%	$	800,157
David Gordon			73.7	%		81.2	%		59.9	%	$	293,607
W. Douglas Benn			65	%		81.2	%		52.8	%	$	244,461
Debby R. Zurzolo			65	%		81.2	%		52.8	%	$	228,181
Max S. Byfuglin			65	%		40.0	%		26.0	%	$	100,130

---

*

Refer to Summary Compensation Table .

        Fiscal 2014 Performance Incentive Plan Design.     In late fiscal 2013 and early fiscal 2014, the Compensation Committee, with the assistance of Farient Advisors, reviewed the design of our performance incentive program for fiscal 2014 under the Incentive Plan and made no changes from the plan design for fiscal 2013 with respect to the potential payout schedules for fiscal 2014 for both the Company as a whole and our bakery division. Please see page 47 of this Compensation Discussion and Analysis for applicable payout schedules.

        Performance Incentive Targets as a Percentage of Base Salary for Fiscal 2014.     As part of its competitive analysis of executive pay positioning and the design of the performance incentive plan for fiscal 2014, the Compensation Committee reviewed performance targets as a percentage of base salary for each of the executive officers. The only change made from fiscal 2013 was for our Chief Executive Officer, whose target was increased to 110%.

        Fiscal 2014 Performance Objectives.     At the time the Compensation Committee was considering financial and strategic performance objectives for fiscal 2014, industry experts, such as Technomic, were forecasting low traffic growth for 2014, similar to 2013, given ongoing macroeconomic conditions, including continuing higher unemployment levels and lower consumer confidence levels than historical levels. In addition, industry experts predicted that the environment for casual dining operators would be impacted by cost inflation (i.e., specific commodity pressures affecting the Company include increased costs of shrimp and salmon and government regulations such as minimum wage increases) and general economic uncertainty. Given these concerns, any of which could adversely impact stockholder value, the Compensation Committee decided to continue to select operating income as the most heavily weighted performance target. Operating income is a key driver of stockholder value in that it (i) affects not only earnings per share but also overall cash flow from operations, (ii) supports return on invested capital percentage, and (iii) is a key driver of a publicly traded restaurant company's stock multiple.

        Additional factors considered by management and the Compensation Committee included:

•

The appropriate rate of growth of our operating income,



•

The role of operating margin as a primary driver of value creation within the restaurant industry, due in part to the low overall sales growth, and use of a peer group relative measure to appropriately account for commodity cost movements, macro or industry-wide cycles,



•

The importance of continuing international expansion and operational excellence with our licensed partner in the Middle East, and



•

The importance of the establishment of a strategic sustainability program and department.

52

---

Table of Contents

        Additionally, the Compensation Committee considered factors that were important to the continued growth and success of our bakery division, including:

•

Appropriate growth of our bakery division's operating income,



•

Improving profitability of external business which showcases and leverages our brands



•

Improving talent and engagement in the bakery, and



•

Supporting international growth plans.

        Taking all of these factors into account, the Compensation Committee set the following performance objectives for fiscal 2014, which the Committee believed were appropriate, reasonably difficult to achieve and, if achieved, would be likely to deliver significant value to the Company and our stockholders:

Targets for Participants Other than Bakery Division:

Weight		Performance Target
75%		Consolidated operating income target
25%		Additional strategic objectives, including(1)
		• Fiscal 2014 operating margin greater than the average of a peer group selected by our Compensation Committee(2)
		• Continue our international expansion including specific milestones for Latin America, Asia, and Canada.
		• Developing a strategic sustainability department, developing a strategic roadmap, and additional operational milestones.

---

(1)

Assumes a minimum consolidated operating income threshold for any strategic objectives to pay out.

(2)

The peer group for fiscal 2014 is comprised of the following restaurant companies: Bloomin' Brands; Darden Restaurants; BJs Restaurants; Ruby Tuesday; Bravo Brio Restaurant Group; and Ignite Restaurant Group. In order to remain in the peer group for fiscal 2014, each company must be publicly traded with units that are at least 75% company-operated. The peer group remains unchanged from the peer group used for fiscal 2013.

Targets for Bakery Division Participants (including Mr. Byfuglin):

Weight		Performance Target
50%		Bakery division operating income target
25%		Consolidated operating income target
25%		Additional strategic objectives, including(1):
		Improve talent and engagement across the bakery with additional operational milestones
		• Improve profitability of external business by a specific percentage
		• Support international growth and expansion, measured against milestones

---

(1)

Assumes a minimum consolidated operating income threshold for any strategic objectives to pay out.

        The performance targets for fiscal 2014 are similar in nature to those for fiscal 2013 in that they include an operating income target and additional strategic initiatives as qualified by a minimum operating income target, both Company-wide and for our bakery division. The performance targets were selected

53

---

Table of Contents

from a stockholder-approved list of performance incentive targets under our Incentive Plan intended to qualify for deductibility by us under Section 162(m) of the Internal Revenue Code. However, due to the complexities of Section 162(m) and technical requirements related thereto that may change from time to time, we can provide no assurance regarding deductibility under Section 162(m).

Equity-Based Compensation

        We believe that equity-based compensation should be a significant component of total executive compensation to align executive compensation to our long-term performance and to encourage executives to make value-enhancing decisions for the benefit of our stockholders. Each of our Named Executive Officers is eligible to receive equity compensation, which currently consists of a combination of stock options and restricted stock, to encourage a focus on long-term stockholder value and to foster long-term retention.

        The Compensation Committee believes that stock options are an appropriate equity vehicle for a portion of long-term equity compensation for our executives because they provide value only if our stock price increases over time, which aligns our executives' interests with those of our stockholders. The Compensation Committee also grants restricted shares not only to align our executives' interests with those of our stockholders with respect to increases in stock value, but also to enhance executive retention since the executive will receive some economic value even if our stock price remains flat or declines (provided that the executive remains with the Company for a minimum period of time, generally starting at three years). In addition to these objectives, the combined use of stock options and restricted shares reduces our total share usage versus granting only stock options. Because we approach equity compensation grants by considering the overall value of the grant (as opposed to a focus on the number of stock options or restricted shares granted), as our stock price increases, we anticipate using fewer shares while still delivering equivalent value to our executives. In fiscal 2013, restricted shares granted to our Chief Executive Officer included shareholder approved performance criteria as a condition for vesting. Beginning in fiscal 2014, a stockholder approved performance criteria was added to all Named Executive Officers' restricted share grants. The Compensation Committee believes the inclusion of shareholder approved performance criteria as a condition of vesting restricted share grants appropriately balances the need for executive retention and the desire to align Named Executive Officers' compensation with achievement of performance requirements.

        The Compensation Committee is responsible for approving equity grants to all staff members, including Named Executive Officers and other executives, and, in doing so, considers past grants, corporate and individual performance, the valuation of grants, and recommendations of our Chief Executive Officer. The Compensation Committee also consults with Farient Advisors concerning equity awards for Named Executive Officers. The Compensation Committee has not established formal guidelines or performance criteria for the size of individual equity grants for our Named Executive Officers. However, the Compensation Committee considers total direct compensation market data in making such decisions. See Marketing Positioning above.

        We also have an equity incentive program for our restaurant general managers, executive kitchen managers, area directors and area kitchen operation managers. Grants under this program provided for stock options in the past and now provide for restricted stock units ("RSUs"). The RSUs vest at the end of an initial five-year period commencing upon entry into the respective position. Additional grants of RSUs typically are given every five years thereafter, vesting over a three- to five-year period, while the individual continues to serve in our management program. We believe that making these awards at the restaurant management level encourages our managers to think and act as business owners, assists in long-term retention of restaurant management, and aligns our managers' interests with those of our stockholders.

        The Compensation Committee approves all equity-based compensation at scheduled meetings, the dates of which are established in advance. The exercise price of stock options is the closing price of our

54

---

Table of Contents

stock on the grant date, which is also used to calculate the grant date fair value of shares of restricted stock and restricted stock units. We do not time our release of material non-public information for the purpose of affecting the value of our executives' compensation, nor do we time our grants of equity-based compensation to take advantage of material non-public information. Our equity grant procedures are posted in the Corporate Governance section of our Investor Relations page under Equity Grant Procedures on our corporate website. The contents of our website are not incorporated by reference into this document. While our equity plan allows awards to be made on a more frequent basis, our Compensation Committee generally has made grants to our corporate executives, including our Named Executive Officers, on an annual basis, except in the case of newly hired executives, mid-year promotions or other extraordinary events. We believe that making awards on an annual basis enables the Compensation Committee to evaluate individual and corporate performance over a reasonable period of time and to adjust the size and terms of the equity grants accordingly.

        Equity Grants in 2013.     Following its historical practices and as part of its annual review of executive compensation, in March 2013, the Compensation Committee approved grants of stock options and restricted shares as set forth below to our Named Executive Officers in recognition of their performance during fiscal 2012 and expected future contributions and to target competitive compensation levels appropriate to the executive's tenure in his or her role:

Name		Number of Stock Options			Number of Restricted Shares
David Overton			175,000			45,000
David Gordon			25,000			9,000
W. Douglas Benn			18,000			7,000
Debby R. Zurzolo			16,000			6,000
Max S. Byfuglin			14,500			6,000

        The stock options were granted at an exercise price of $35.62 per share, the fair market value of our common stock on the date of grant. The options vest at a rate of 20% per year over five years, expire in eight years and may accelerate upon a change in control of the Company, as defined in the 2010 Stock Plan, subject to the terms of each executive's employment agreement with the Company. The restrictions on the restricted shares lapse at a rate of 60% on the third anniversary of the grant date and 20% on each of the fourth and fifth anniversaries of the grant date, and such restrictions also lapse upon a change in control as defined in the 2010 Stock Plan, subject to the terms of each executive's employment agreement with the Company.

        Restricted shares of the Company's common stock granted to Mr. Overton in fiscal 2013 were subject to achievement of a performance condition approved by stockholders under the 2010 Stock Plan, which condition provides that vesting of the award is subject to the Company's fully diluted earnings per share being equal to or greater than (i) a combined, cumulative target for 2013 and 2014, or (ii) a combined, cumulative target for 2013, 2014 and 2015, whichever occurs earlier. If the performance condition is satisfied, the grants are then subject to time-based vesting at the rate of 60% of the shares on March 7, 2016 and 20% of the shares on each of March 7, 2017 and March 7, 2018.

        Equity Grants in 2014.     Following its historical practices and as part of its annual review of executive compensation, in March 2014, the Compensation Committee approved grants of stock options and restricted shares as set forth below to our Named Executive Officers in recognition of their performance

55

---

Table of Contents

during fiscal 2013 and expected future contributions, and to target competitive compensation levels appropriate to the executive's tenure in his or her role:

Name		Number of Stock Options			Number of Restricted Shares
David Overton			145,000			37,000
David Gordon			25,000			8,000
W. Douglas Benn			15,000			5,500
Debby R. Zurzolo			14,000			4,500
Max S. Byfuglin			13,000			4,000

        The stock options were granted at an exercise price of $48.19 per share, the fair market value of our common stock on the date of grant. The options vest at a rate of 20% per year over five years, expire in eight years, and accelerate upon a change in control of the Company, as defined in the 2010 Stock Plan, subject to the terms of each executive's employment agreement with the Company. Restricted shares of the Company's common stock were granted subject to achievement of a performance condition approved by stockholders under the 2010 Stock Plan, which condition provides that vesting of the award is subject to the Company's fully diluted earnings per share being equal to or greater than (i) a combined, cumulative target for 2014 and 2015, or (ii) a combined, cumulative target for 2014, 2015 and 2016, whichever occurs earlier. If the performance condition is satisfied, the grants are then subject to time-based vesting at the rate of 60% of the shares on March 6, 2017 and 20% of the shares on each of March 6, 2018 and March 6, 2019.

Retirement Plans

        Nonqualified Deferred Compensation.     In fiscal 1999, we established The Cheesecake Factory Executive Savings Plan ("Executive Savings Plan"), a nonqualified, deferred compensation plan, in order to provide a tax-deferred savings vehicle for our "highly compensated" executives (as defined in the Executive Savings Plan), as well as our non-employee directors. Over 550 staff members including our Named Executive Officers, other executives, restaurant general managers and executive kitchen managers, and all our non-employee directors, are eligible to participate in the Executive Savings Plan. At the end of fiscal 2013, all of our Named Executive Officers, approximately 320 other staff members and one non-employee director maintained account balances in the Executive Savings Plan. Additional information regarding this plan appears in this Proxy Statement in the section entitled Nonqualified Deferred Compensation .

        The Executive Savings Plan permits us to match a portion of participants' contributions with Company contributions, on a pre-tax basis, to participants (other than non-employee directors). Since inception, we made a partial matching contribution to the Executive Savings Plan, except during the period of May 6, 2009 through October 1, 2011, when the Company match was suspended. We currently match twenty five-percent of the first four percent of salary or bonus deferred.

        Pension Benefits.     We do not maintain a pension plan for executives or staff members. However, in order to continue to retain Mr. Overton's services as our Chief Executive Officer and in recognition of his unique contributions as our founder, the Compensation Committee agreed to include a "Founder's Retirement Benefit" as part of Mr. Overton's employment agreement (which was effective June 30, 2009, as amended) pursuant to which Mr. Overton is entitled to the annual amount of $650,000 for a period of ten years following his separation from service for any reason, payable in equal monthly installments, as further described in the employment agreement. The Founder's Retirement Benefit replaces an earlier benefit provided under Mr. Overton's 2004 employment agreement and is payable to Mr. Overton during his lifetime or to his designated beneficiary in the event of his death. Our obligation with respect to the

56

---

Table of Contents

Founder's Retirement Benefit is unfunded and unsecured, and is payable from our general, unrestricted assets. For additional information concerning Mr. Overton's employment agreement, see the section in this Proxy Statement entitled Employment Agreements, which also describes amounts payable upon termination of employment or change in control.

Other Benefits and Perquisites

        All of our executives are eligible to participate in our broad-based benefit programs, which include medical, dental, vision, life insurance and long-term disability programs, as well as paid vacation. We provide group term life insurance to our executives, including each of our Named Executive Officers, as well as all other salaried staff members, at the lesser of one times base salary or $750,000. The life insurance benefit is reduced to 65% of base salary at age 65 and 50% of base salary at age 70, with a limit of $750,000. The IRS requires that the portion of the value of such a policy exceeding $50,000 be deemed imputed income to the staff member and provides a formula by which the imputed income is calculated.

        We also provide limited perquisites to our executives, including Named Executive Officers, that vary based on the executive's level. The perquisites include:

•

The choice of a company-leased vehicle or automobile allowance.   This program is also offered to certain other executives, including Restaurant General Managers, Area Directors of Operations, Area Kitchen Operations Managers, and selected additional management positions. Each individual participating in our leased car program is assigned imputed income, according to IRS regulations, for his or her personal use of the automobile or is provided with an automobile allowance. The type of vehicle and amount of allowance varies with the executive's level in the Company.



•

A company-paid executive physical every two years.   This program is offered to staff members at the level of Senior Vice President and above.



•

Relocation expenses.   Relocation expenses are reimbursed in accordance with the terms of any employment agreement or as determined on a case-by-case basis.



•

Sabbatical Leave Pilot Program.   Beginning in 2015 we will pilot a new Sabbatical Leave program, which will be available to active, full-time, salaried corporate staff members. Eligible staff members, including all of our executives, may request a sabbatical, not to exceed three weeks in duration, only after five years of service and each five years' thereafter.

        We believe that these perquisites enhance our ability to attract and retain high-quality talent at a modest cost relative to the benefit we receive from providing these perquisites. The amounts we paid related to perquisites provided to our Named Executive Officers in fiscal 2013 are disclosed in the section entitled Summary Compensation Table and the accompanying footnotes in this Proxy Statement.

Termination of Employment or a Change in Control

        The Compensation Committee believes that a change in control transaction would create uncertainty regarding the continued employment of our executives. This is because many change in control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage our executives to remain employed with us during an important time when their continued employment in connection with or following a transaction is often uncertain, and to help keep our executives focused on our business rather than on their personal financial security, we believe that providing certain of our executives with severance benefits upon certain terminations of employment following an actual or potential change of control transaction is in the best interests of our Company and our stockholders.

57

---

Table of Contents

        The severance benefits following a change in control provided for our Named Executive Officers were determined by the Compensation Committee based on its judgment of prevailing market practices at the time we entered into each employment agreement. At present, we have employment agreements with all of our Named Executive Officers which detail their eligibility for payments under various termination scenarios following an actual or potential change in control transaction. Mr. Overton's latest employment agreement, effective June 30, 2009, as amended, eliminated specific change-of-control provisions and provided for certain payments to him in the event of his separation from service for any reason other than for cause, as discussed in his employment agreement. For detailed information concerning the agreements for our Named Executive Officers, see the section entitled Potential Payments upon Termination or Change of Control in this Proxy Statement. In addition, certain equity grants made to Named Executive Officers provide for vesting of stock options and elimination of restrictions on restricted shares upon a change in control, as defined in the applicable plan under which the equity was granted, subject to the terms and conditions of each executive's employment agreement.

Other Considerations

        Impact of Accounting and Tax Treatments on Compensation.     Accounting and tax considerations play an important role in the design of our executive compensation program. Accounting rules, such as Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, require us to expense the estimated fair market value of our stock based compensation, which reduces the amount of our reported profits. The Compensation Committee considers the amount of this expense and the financial impact to us in determining the amount of equity compensation awards.

        In addition, Section 162(m) of the Internal Revenue Code and the regulations promulgated thereunder limit the allowable Company deduction for compensation paid or accrued to no more than $1 million per year currently, subject to specified exceptions, with respect to (i) any employee, who as of the close of the taxable year either is the principal executive officer of the employer, or is serving as the acting principal executive officer; and (ii) any employee who was a "Covered Employee" as defined under the Code. Certain compensation is exempt from this deduction limitation, including certain performance-based compensation, if it is paid under a plan, the material performance terms of which are approved by stockholders at least once every five years, and the plan is administered by a committee of independent directors. We believe that performance achievement bonuses payable for fiscal 2013 under our Incentive Plan and performance-based equity awards issued under the 2010 Stock Plan may qualify for deductibility under Section 162(m) under such exception.

        In light of Section 162(m), the Compensation Committee may modify, where reasonably necessary, our executive compensation program to maximize the tax deductibility of compensation paid to Covered Employees. At the same time, the Compensation Committee also believes that the overall performance of our executives cannot in all cases be reduced to a fixed formula and that the prudent use of discretion in determining the form and amount of compensation is in our best interests and those of our stockholders. Under some circumstances, the Compensation Committee's use of discretion in determining appropriate amounts and components of compensation may result in compensation that may not be fully deductible to us under Section 162(m). In fiscal 2013, all compensation paid by the Company to Covered Employees, other than equity awards subject to time-based vesting, was intended to qualify for deductibility by us under Section 162(m). For fiscal 2014, all Named Executive Officer's restricted stock grants are intended to qualify for deductibility by us under Section 162(m). Certain restricted stock awards made in prior years may not qualify for deductibility due to the increase in our stock price on the date the restrictions lapse. Due to the complexities of Section 162(m) and technical requirements related thereto that may change from time to time, we can provide no assurance regarding deductibility of such compensation under Section 162(m).

        In addition, Section 409A limits flexibility with respect to the time and form of payment of deferred compensation. If a payment or award is subject to Section 409A but does not meet the requirements that

58

---

Table of Contents

exempt such amounts from taxation under such section, the recipient is subject to (i) income tax at the time the payment or award is not subject to a substantial risk of forfeiture, (ii) an additional 20% federal tax at that time, (iii) an additional tax equal to the amount of interest (at the underpayment rate under the Code plus one percentage point) on the underpayment that would have occurred had the award been includible in the recipient's income when first deferred, or if later, when not subject to a substantial risk of forfeiture and (iv) possible additional state taxes. We have made modifications to our plans and arrangements such that payments or awards under those arrangements either are intended not to constitute "deferred compensation" for Section 409A purposes (and will thereby be exempt from the requirements of Section 409A) or, if they constitute "deferred compensation," are intended to comply with the Section 409A statutory provisions and final regulations.

        Risk Considerations.     The Compensation Committee reviews the Company's employee compensation policies and practices, including those for non-executive officers, on an annual basis to assess how those policies and practices may affect risk taking by employees. During its review in fiscal 2013, the Compensation Committee determined that the Company's compensation programs are appropriately weighted toward long-term incentives and include policies designed to deter undue risk taking by individuals. These policies include the Clawback Policy, stock retention and ownership policies, and policies against short sales and hedging, as discussed below.

        Clawback Policy.     In fiscal 2008, we adopted a policy ("Clawback Policy") that requires certain of our executives to agree in writing to repay all or a portion of any bonus, to the extent permitted by law and deemed appropriate by the Audit Committee, when we are required by applicable law or applicable accounting or auditing principles to restate our financial statements to correct an accounting error in any interim or annual financial statement filed with the SEC as a result of material noncompliance with applicable financial reporting requirements, and the bonus was directly based on those financial statements. The Board has determined that executives in the following positions are subject to this policy:

•

Chief Executive Officer



•

President



•

Chief Financial Officer



•

President, The Cheesecake Factory Bakery Incorporated



•

Executive Vice President, General Counsel and Secretary



•

Senior Vice President of Finance and Corporate Controller



•

Vice President, Internal Audit

        The Board believes that executives who are responsible for material noncompliance with applicable financial reporting requirements resulting in accounting errors leading to financial statement restatements should not benefit monetarily from such noncompliance. This Clawback Policy was adopted to permit the Audit Committee of our Board to use appropriate discretion to recapture monetary awards of bonus compensation paid to executives in the designated positions who may bear responsibility for such noncompliance. In determining the portion of any bonus required to be repaid, the Audit Committee may take into account those matters it deems appropriate in its sole discretion, including whether the executive engaged in any fraud, negligence or misconduct that contributed to the need for the restatement and the amount of the bonus, if any, that would have been awarded to the executive had the financial results been properly reported. In addition, the Company may dismiss the executive, authorize legal action, or take other actions to enforce the executive's agreement as the Audit Committee may deem appropriate and advisable in view of all of the circumstances at that time. We believe that our Clawback Policy diminishes the likelihood that our executives will take actions that could result in material excessive risk to us. Our 2010 Stock Plan provides specifically that awards made under such plan may be subject to recoupment in

59

---

Table of Contents

connection with our Clawback Policy. In addition, our 2010 Incentive Plan specifically subjects bonuses awarded under such plan to the Clawback Policy.

        In fiscal 2013, we had no financial statement corrections requiring restatements and the Audit Committee has not needed to consider taking any action under the Clawback Policy since we implemented it in fiscal 2008. A copy of this policy is available in the Corporate Governance section of the Investors Relations page on our corporate website.

        Stock Ownership Requirements.     We have stock ownership requirements for our Named Executive Officers and other executives based upon their position in the Company, requiring such executives to own a specified value of our common stock based upon a multiple of their respective base salaries. See Director and Executive Officer Stock Ownership Guidelines, Holding Periods and Other Requirements in this Proxy Statement for the material terms of our stock ownership and retention policies. We believe that stock ownership requirements further align our executives' interests with those of our stockholders. In addition to our stock ownership requirements, certain option grants awarded to executive officers after June 4, 2008 and prior to August 2, 2012 contain a holdback provision such that 33% of the net shares acquired upon exercise of the stock option (net of the tax impact that the exercise has on the individual) must be held for at least nine months following the date of exercise. In light of the adoption of our executive stock ownership requirements, we eliminated the holdback requirement for option grants made to executive officers on or after August 2, 2012.

        Policy Regarding Hedging and Use of Shares as Collateral.     We have a policy prohibiting any member of the Board, any officer and/or staff member from trading in any interest or position relating to the future price of our securities, such as a put, call or short sale, or using our stock as collateral for margin loans. The Board believes it is inappropriate for our employees or directors to take personal financial positions that may inadvertently or, in some cases overtly, influence their deliberations or decisions concerning the best and proper course of action for us to take or bring into question the propriety of any deliberations or decisions made with respect to us. By prohibiting these types of speculative trading in or encumbering our stock, the Board seeks to discourage those types of behaviors.