Document:

Exhibit 10.6

 

NASH-FINCH COMPANY

PERFORMANCE INCENTIVE PLAN

 

I. PURPOSE

 

 

A.                                   General. In an

effort to maintain a position of leadership in the industry in which Nash-Finch

Company (the “Company”) competes, it is necessary to promote financial

interests of the Company and its Subsidiaries, including its growth, by

attracting and retaining certain highly qualified employees possessing

outstanding ability, motivating such employees by means of performance related

incentives, and providing incentive compensation opportunities which are

competitive with those of major corporations. The Nash-Finch Company

Performance Incentive Plan (the “Plan”) hereinafter described is designed to

assist the Company in attaining these objectives.

 

B.                                     Performance–Based Compensation. With respect to Covered Awards, the Plan is intended to constitute a

qualified performance–based compensation plan under

Section 162(m)(4)(C) of the Code and shall be construed and administered

so as to ensure such compliance.

 

C.                                     Cash Bonus Plan. The Plan

is not intended to be (and shall not be construed and administered as) an

employee benefit plan within the meaning of ERISA. Incentive Awards under this

Plan are intended to be discretionary and shall not constitute a part of an

employee’s regular rate of pay.

 

II. PLAN ADMINISTRATION

 

 

A.                                   Plan Administration. The

Company or its delegate has the authority and responsibility to manage and

control the general administration of the Plan, except as to matters expressly

reserved in this Plan to the Committee of the Board of Directors of the Company

(as applicable, the “Committee”). This Plan is not intended to modify or limit

the powers, duties or responsibilities of either the Board or the Committee as

set forth under the Company’s Restated Certificate of Incorporation, as

amended. Determinations, decisions and actions of the Company or, if

applicable, the Committee, in connection with the construction, interpretation,

administration, or application of the Plan will be final, conclusive, and

binding upon any Participant and any person claiming under or through the

Participant. No employee of an Employer, any member of the Board, any delegate

of the Board, or any member of the Committee will be liable for any

determination, decision, or action made in good faith with respect to the Plan

or any Incentive Award made under the Plan.

 

B.                                     Specific Authority of the Committee. The Committee shall have the sole authority and responsibility to

review annually management’s recommendations for the Selected Performance Objectives

and Selected Performance Factors under the Plan, to select the Selected

Performance Objectives and Selected Performance Factors for an Award Year; and

to otherwise administer Incentive Awards payable to Officers, including under

Covered Awards.

 

C.                                     Non-Assignability. A

Participant’s rights and interests in and to payment of any Incentive Award

under the Plan may not be assigned, transferred, encumbered or pledged other

than by will or the laws of descent and distribution; and are not subject to

attachment, garnishment, execution or other creditor’s processes.

 

D.                                    Amendment or Termination; Term. The Plan may at any time be amended, modified, or terminated, as the

Board in its discretion determines. Such amendment, modification, or

termination of the Plan will not require the consent, ratification, or approval

of any party, including any Participant. The Board or the Committee may amend

the Selected Performance Objectives and/or the Selected Performance Factors as

well as any Incentive Award (including increasing, decreasing or eliminating

any or all Incentive Awards 

 

for an Award Year) prior to the payment of the

Award (or the date payment would have been made but for a Participant’s

election to defer receipt) to the extent it deems appropriate for any reason,

including compliance with applicable securities laws and local laws outside the

U.S. Notwithstanding the foregoing, to the extent the Committee has expressly

designated an Incentive Award as a Covered Award, the Committee will not have

any authority to amend or modify the terms of any Covered Award in any manner

which would impair its deductibility under Section 162(m) of the Code.

 

E.                                      No Contract of Employment. Neither the Plan, nor any Incentive Award, constitutes a contract of

employment, and participation in the Plan will not give any employee the right

to be retained in the service of the Company or any Subsidiary or continue in

any position or at any level of compensation.

 

F.                                      Controlling Law.

Except in connection with other matters of corporate governance and authority

(all of which shall be governed by the laws of the Company’s jurisdiction of

incorporation), the validity, construction, interpretation, administration and

effect of the Plan and any rules, regulations and actions relating to the Plan

will be governed by and construed exclusively in accordance with the laws of

the State of Minnesota, notwithstanding the conflicts of laws principles of any

jurisdictions.

 

G.                                     Compliance with Section 162(m) of the Code. To the extent any provision of the Plan or an Incentive Award or any

action of the Committee or the Company as it relates to a Covered Award may

result in the application of Section 162(m)(1) of the Code to compensation

payable to a Covered Employee, such provision or action shall be deemed null

and void to the extent permitted by law and deemed advisable to the Committee.

 

H.                                    Unfunded, Unsecured Obligation. A Participant’s only interest under the Plan shall be the right to

receive either a cash or Stock or a combination of cash and Stock payment for

an Incentive Award pursuant to the terms of the Incentive Award and the Plan.

No portion of the amount payable to a Participant under this Plan shall be held

by the Company or any Subsidiary in trust or escrow or any other form of asset segregation.

To the extent that a Participant acquires a right to receive a cash or Stock

payment under the Plan, such right shall be no greater than the right of any

unsecured, general creditor of the Company, and no trust in favor of any

Participant will be implied.

 

III. DEFINITIONS

 

 

Unless the context requires otherwise, the following

terms when used with initial capitalization have the following meanings:

 

A.                                   Award Year—The

fiscal year for which Incentive Awards, if any, are calculated under the Plan.

 

B.                                     Board—The

Board of Directors of the Company.

 

C.                                     Code—The

Internal Revenue Code of 1986, as from time to time amended including any

related regulations.

 

D.                                    Committee—the

Compensation Committee of the Board of Directors of the Company, comprised

solely of two or more outside directors meeting the requirements of

Section 162(m) of the Code.

 

E.                                      Company—Nash-Finch

Company.

 

F.                                      Compensation—Compensation

means a Participant’s annual rate of base salary in effect at the time

eligibility for participation for an Award Year is determined (but not later

than 90 days following the beginning of such Award Year), or, if

participation under the Plan commences during the Award Year, at such later

commencement of participation, and without regard to any salary reduction

agreement to make pre-tax elective contributions under any qualified Code

Section 401(k) Plan or Code Section 125 cafeteria plan (including any

HMO premium deductions).

 

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G.                                     Covered Award—An

Incentive Award (i) which will be paid to a Covered Employee,

(ii) which the Committee expressly designates as performance–based

compensation and intends to be fully deductible under Section 162(m) of

the Code, and (iii) which will be paid following the shareholder approval

required by Section 162(m)(4)(C)(ii) of the Code.

 

H.                                    Covered Employee—An

individual who is a “covered employee” within the meaning of

Section 162(m)(3) of the Code.

 

I.                                         Employer—The

Company and any Subsidiary which, with the approval of the Chief Executive

Officer of the Company, has adopted this Plan.

 

J.                                        ERISA—The

Employee Retirement Income Security Act of 1974, as from time to time amended,

including any related regulations.

 

K.                                    Fair Market Value. The

Fair Market Value of a share of Stock, as of any date (or, if no shares were

traded or quoted on such date, as of the next preceding date on which there was

such a trade or quote), as determined by (a) the mean between the reported

high and low sale prices of the Stock during the regular trading session if the

Stock is listed, admitted to unlisted trading privileges or reported on any

foreign or national securities exchange or on the Nasdaq National Market or an

equivalent foreign market on which sale prices are reported; (b) if the

Stock is not so listed, admitted to unlisted trading privileges or reported,

the closing bid price as reported by the Nasdaq SmallCap Market, OTC Bulletin

Board or the National Quotation Bureau, Inc. or other comparable service;

or (c) if the Stock is not so listed or reported, such price as the

Committee determines in good faith in the exercise of its reasonable

discretion.

 

L.                                      Incentive Award—The

dollar value of an award made to a Participant as determined under the Plan.

 

M.                                 Incentive Opportunity—The

amount, stated as a percentage of a Participant’s Compensation, determined with

respect to an Award Year (or partial Award Year in the case of participation

for a partial year), that will be included in a Participant’s Incentive Award

formula under Paragraph V(A) of the Plan. If a Participant held more than

one eligible position during the Award Year, his or her Incentive Opportunity

will be separately determined based on each corresponding period of

participation. The Incentive Opportunity for Participants who are Officers and

the Incentive Opportunity upon which any Covered Award is based will be

determined solely by the Committee.

 

N.                                    Individual Performance Goal—The performance criteria or objectives established for a Participant

for an Award Year for purposes of assisting the Company or the Committee in

determining whether and to what extent an Incentive Award has been earned by

such Participant for such Award Year.

 

O.                                    Individual Performance Modifier—The numerical modifier (expressed as a percentage) determined for a

Participant with respect to an Award Year, as follows:

 

1.                                       In the case of a Participant who is a Key and Senior Management Employee

other than an Officer, the Individual Performance Modifier shall be determined

by the Company and may be based, in whole or in part, upon an evaluation of the

extent to which such Participant achieved his or her Individual Performance

Goals established for that Award Year.

 

2.                                       In the case of a Participant who is an Officer other than an Officer who

is to receive a Covered Award, the Individual Performance Modifier shall be

determined by the Committee and may be based, in whole or in part, upon an

evaluation of the extent to which such Participant achieved his or her

Individual Performance Goals established for that Award Year.

 

3.                                       In the case of a Participant who is to receive a Covered Award, the

Individual Performance Modifier shall in all cases be 125%, subject to the

Committee’s discretionary authority under Paragraph VIII(C) to reduce the

amount of a Covered Award.

 

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A Participant’s evaluation under Paragraphs

III(O)(l) and III(O)(2) above is wholly discretionary and subjective on the

part of the Company.

 

P.                                      Key and Senior Management Employee—Each Covered Employee, each Officer and each Management Employee who is

designated by the Company as a Key and Senior Management Employee with respect

to the Plan for an Award Year. Designation as a Key and Senior Management

Employee will apply only for the Award Year for which the designation is made.

 

Q.                                    Management Employee—An

individual (i) who is classified by the Employer (without regard to any

retroactive judicial or administrative reclassification of such individual) as

a management employee (on other than a temporary reclassification basis),

(ii) whose employment is for an indefinite period, and (iii) who is

employed in an Employer established job classification not covered by a

collective bargaining agreement.

 

R.                                     Officer—Each

officer of the Company and each senior officer of the Company’s Subsidiaries

designated by the Board.

 

S.                                      Participant—Each

employee of an Employer who is designated as a Participant for an Award Year by

the Company or the Committee, as the case may be.

 

T.                                     Performance Objectives—One or

more objectively determinable measures established at the beginning of an Award

Year, related to: specified levels of, or relating to, customer satisfaction as

measured by a Company sponsored customer survey; employee engagement or

employee relations as measured by a Company sponsored employee survey; employee

safety; employee diversity; financial performance as measured by net sales,

operating income, income before income taxes, net income, net income per share

(basic or diluted), profitability as measured by return ratios (including

return on assets, return on equity, return on investment and return on sales),

cash flows, market share, cost reduction goals, margins (including one or more

of gross, operating and net income margins), stock price, total return to

stockholders, economic value added, working capital and productivity

improvements; retail store performance as determined by independent assessment;

and operational performance as measured by on-time delivery, fill rate,

selector accuracy, cost per case, sales per square foot, sales per labor hour

and other, similar, objective productivity measures. Performance Objectives may

be described in terms of Company, Subsidiary or business unit performance,

either absolute or by relative comparison to other companies or any other external

measure of the selected criteria. Performance Objectives shall be stated in

terms of Threshold, Target and Maximum levels. For other than Covered Awards,

the Company may add other Performance Objectives not specifically listed above.

 

U.                                    Plan—The

Nash-Finch Company Performance Incentive Plan, as evidenced by this written

instrument as may be amended from time to time.

 

V.                                     Selected Performance Factors—The numerical factors (expressed as a percentage) established by the

Company relating to the Plan’s Selected Performance Objectives for the Award

Year and which correspond to the actual achievement of the Threshold, Target

and Maximum Selected Performance Objectives for such Award Year. The Selected

Performance Factors as they relate to Officers and to Covered Awards shall be

established by the Committee. If the actual achievement of the Selected

Performance Objective for an Award Year, as determined by the Company (or by

the Committee in the case of a Covered Award or an Incentive Award to any other

Officer) shortly after the Award Year, is between the Threshold and Target or

Target and Maximum Objectives, the Selected Performance Factor will be the

amount determined by linear interpolation between the two corresponding

Threshold, Target or Maximum Selected Performance Factors.

 

W.                                Selected Performance Objectives—One or more Performance Objectives selected for an Award Year. Subject

to the provisions of Article VIII with respect to a Covered Award, the

Committee shall establish at the beginning of an Award Year the Selected

Performance Objectives, including the Threshold, Target and Maximum levels for

Officers and with respect to any Covered Award.

 

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X.                                    Stock—Shares

of common stock of the Company, par value $1.66 2'3 per share.

 

Y.                                     Subsidiary—Any

entity, corporate or otherwise, in which the Company, directly or indirectly,

owns or controls a greater than 50% interest.

 

IV. PARTICIPATION

 

 

A.                                   Participants.

Participants will be determined annually by the Company or the Committee from

among the Key and Senior Management Employees who, in the judgment of the

Company or the Committee, as the case may be, have contributed, are

contributing or are expected to contribute to the creation of value for the

Company and its stockholders. Designation as a Participant will apply only for

the Award Year for which the designation is made and may include a partial

year.

 

B.                                     Termination of Employment. In order to be entitled to receive an Incentive Award for an Award

Year, a Participant must be actively employed or on an approved leave of

absence as of the last day of the Award Year; however, the Company (or the

Committee, if applicable) may in its sole discretion pay an Incentive Award to

a Participant who has terminated employment.

 

V. COMPUTATION OF INCENTIVE AWARDS

 

 

A.                                   Formula. Subject

to Paragraph B, a Participant’s Incentive Award for an Award Year will be

an amount equal to the product of the following:

 

(a)                                  The Participant’s Incentive Opportunity;

 

(b)                                 The Participant’s Compensation;

 

(c)                                  The sum of the Selected Performance Factors for the Award Year; and

 

(d)                                 The Participant’s Individual Performance Modifier.

 

B.                                     Covered Awards. A

Covered Award shall be the greater of the Incentive Award determined under

Paragraph A or an Award determined solely on the basis of one or more

financial Performance Objectives as established by the Committee prior to the

Award Year (or at such later date as may be permissible under Code

Section 162(m)), subject to the Committee’s discretionary authority under

Paragraph VIII(C) to reduce the amount of a Covered Award.

 

C.                                     Classification Changes. Appropriate adjustments and computations, including computations for a

partial Award Year, may be made to reflect changes in a Participant’s job

classification, Individual Performance Modifier, or Selected Performance

Factors during an Award Year. Subject to the provisions of Article VIII

with respect to Covered Awards, the Committee shall determine all such

adjustments and computations relating to Incentive Awards for Officers.

 

VI. PAYMENT OF INCENTIVE AWARDS

 

 

A.                                   Cash Payment. Subject

to a Participant’s right to elect payment in shares of Stock pursuant to

Paragraph B below, payment of Incentive Awards will be made in cash as

soon as practicable following the end of the Award Year, without interest.

 

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B.                                     Election to Receive Payment in Stock; Matching

Restricted Stock Award. A Participant may, by

written notice given to the Committee prior to the payment of an Incentive

Award, elect to receive payment of all or any portion of the Incentive Award in

the form of a number of shares of Stock having an equal value, as determined by

the Fair Market Value of the shares of Stock on the date the Committee approves

payment of Incentive Awards. To the extent that a Participant elects to receive

payment in the form of shares of Stock, the Participant will be granted

additional, restricted shares of Stock, equal to 15% of the number of shares

elected to be received in lieu of cash payment of the Incentive Award. All such

shares of Stock will be granted under the Company’s 2000 Stock Incentive Plan,

as amended. The restricted shares will vest in full on the date two years

following the date the Committee approves the payment of the Incentive Award,

provided that the Participant has retained beneficial ownership of the

unrestricted shares, and will otherwise be subject to the terms and conditions

of the 2000 Stock Incentive Plan.

 

VII. WITHHOLDING TAXES

 

 

Notwithstanding any of the foregoing provisions

hereof, an Employer shall withhold from any payment to be made hereunder such

amounts as it reasonably determines it may be required to withhold under any

applicable federal, state or other law, and transmit such withheld amounts to

the appropriate authorities. If cash payments under this Plan are not available

to meet the withholding requirement, the Participant shall make available

sufficient funds to meet the requirements of such withholding, and the Employer

shall be entitled and authorized to take such steps as it may deem advisable,

including but not limited to, withholding out of any funds or property due or

to become due to the Participant, in order to have such funds made available to

the Employer.

 

VIII. SPECIAL RULES FOR COVERED AWARDS

 

 

Notwithstanding any other provision of this Plan

to the contrary, the following provisions shall control with respect to any

Covered Award:

 

A.                                   Preestablished Incentive Opportunity and Performance

Objectives. The Selected Performance

Factors, Selected Performance Objectives and Incentive Opportunity upon which a

Covered Award is based or subject shall be established by the Committee in

writing not later than 90 days after the commencement of the Award Year

(or period of service as the case may be), provided that the outcome is

substantially uncertain at the time the Committee actually establishes such

factors and the objectives upon which they are based (or at such earlier time

as may be required or such later time as may be permissible under Section 162(m)

of the Code). The Committee shall not make Covered Awards based on Selected

Performance Objectives not specifically provided under this Plan if it

determines that use of such Performance Objectives would cause a Covered Award

to not be deductible under Code Section 162(m).

 

B.                                     Certification of Performance Objectives. Prior to the payment of a Covered Award, the Committee shall determine

and certify in writing whether and to what extent the Selected Performance

Objectives referred to in Paragraph A have been satisfied.

 

C.                                     Discretionary Reduction of Covered Award. Notwithstanding the foregoing, the Committee may, in its sole

discretion, reduce a Covered Award otherwise determined pursuant to the Plan.

 

D.                                    Limited Adjustments of Selected Performance

Objectives. In the event of (i) any

reorganization, merger, consolidation, recapitalization, liquidation,

reclassification, stock dividend, stock split, combination of shares, rights

offering, extraordinary dividend or divestiture (including a spin-off) or any

other change in corporate structure or shares; (ii) any purchase,

acquisition, sale, disposition or write-down of a significant amount of assets

or a significant business; (iii) any change in accounting principles or

practices, tax laws or other such laws or provisions affecting reported

results; (iv) any uninsured catastrophic losses or extraordinary

non-recurring items as described in Accounting Principles Board Opinion

No. 30 or in management’s discussion and analysis of financial performance

appearing in the Company’s annual report to stockholders for the applicable

year; or (v) any other similar change, in 

 

6

 

each case with respect to the Company or any other

entity whose performance is relevant to the achievement of any Selected

Performance Objective included in a Covered Award, the Committee (or, if the

Company is not the surviving corporation in any such transaction, a committee

of the board of directors of the surviving corporation consisting solely of two

or more “outside directors” within the meaning of

Section 162(m)(4)(C)(i) of the Code) may, without the consent of any

affected Participant, amend or modify the terms of any outstanding Award that

includes any Selected Performance Objectives based in whole or in part on the

financial performance of the Company (or any Subsidiary or division thereof) or

such other entity so as equitably to reflect such event, such that the criteria

for evaluating such financial performance of the Company or such other entity

(and the achievement of the corresponding Selected Performance Objectives) will

be substantially the same (as determined by the Committee or such committee of

the board of directors of the surviving corporation) following such event as prior

to such event; provided, however, that any such change to any outstanding

Covered Award pursuant to this Paragraph D must be made in such a manner

that it is independently determinable by a hypothetical third party having

knowledge of the relevant facts, and the Committee shall take no action

pursuant to this Paragraph D which would constitute an impermissible

exercise of discretion within the meaning of Section 162(m) of the Code,

or would otherwise cause the Covered Award to not be deductible under Section 162(m)

of the Code.

 

E.                                      Changes Affecting Timing. No change shall be made to accelerate the payment of a Covered Award

unless the amount of the Covered Award is discounted to reasonably reflect the

time value of money. Further, no change shall be made to defer the payment of a

Covered Award unless an increase in the amount paid with respect to such award

is based on a reasonable rate of interest or on the actual returns on one or

more predetermined actual investments (whether or not assets associated with

the amount originally owed are actually invested therein).

 

F.                                      Maximum Amount. The

maximum amount of any Covered Award including the 15% restricted Stock match

under Paragraph VI(B) payable to any Covered Employee with respect to an

Award Year, determined as of the time the Covered Award is paid, shall not

exceed $3,000,000.

 

 

7Exhibit 10.12

	

EXHIBIT 10.12

EMPLOYMENT
AGREEMENT

     This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into this 23rd day of May, 2002,
between THE CHEESECAKE FACTORY RESTAURANTS, INC., a California corporation (the
“Company”) and MICHAEL BERRY (the “Employee”). 

     WHEREAS,
the parties desire to enter into this Agreement setting forth the terms and conditions
for the employment relationship of the Employee with the Company. 

     NOW,
THEREFORE, in consideration of the promises and mutual covenants and agreements herein
contained and intending to be legally bound hereby, the Company and the Employee hereby
agree as follows: 

     1.
Certain Terms Defined. For purposes of this Agreement: 

               1.1
“Permanently Disabled” means a physical or mental condition that occurs and
persists which, in the written opinion of a licensed physician (a specialist in the
field) selected by the Board in good faith, has rendered Employee unable to perform
Employee’s duties hereunder for a period of ninety (90) days or more and, in the
written opinion of such physician, the condition will continue for an indefinite period
of not less than an additional ninety (90) day period, rendering the Employee unable to
return to Employee’s duties.  

               1.2
“Affiliate” shall have the meaning given such term in the Exchange Act. 

               1.3
“Base Salary” means, as of the date of determination or Date of Termination, the
base salary of Employee then in effect pursuant to Section 4.  

               1.4
“Beneficial Owner” shall have the meaning given to such term in the Exchange Act. 

               1.5
“Board” shall mean the Board of Directors of the Company. 

               1.6
“Cause” means: (1) the willful failure by the Employee to substantially perform
his duties for the Company (other than any such failure resulting from his incapacity due
to physical or mental illness), after a written demand for substantial performance is
delivered to him by the Board, which demand specifically identifies the manner in which
the Board believes that he has not substantially performed his duties; (2) the Employee’s
willful misconduct that is demonstrably and materially injurious to the Company, CFI, or
its Affiliates, monetarily or otherwise; (3) Employee’s willful failure to
comply with written policies of CFI and the Company, including the CFI Code of Ethics and
Code of Conduct and securities trading policies, (4) willful breach of Section 13
hereof, or (5) the Employee’s commission of such acts of dishonesty, fraud,
misrepresentation or other acts of moral turpitude as would prevent the effective
performance of his duties. No act, or failure to act, on the Employee’s part shall
be deemed “willful” unless done, or omitted to be done, by him not in good faith
and without the reasonable belief that his action or omission was in the best interest of
the Company.  

               1.7
“Change of Control” means the occurrence of any of the following: 

               
          (a) any Person (other than
Employee) or that Person’s Affiliate is or becomes the Beneficial Owner,
directly or indirectly, of securities of CFI representing 30% or more of the
combined voting power of CFI’s then outstanding voting securities
(“Voting Securities”); or 

      1

	

               
          (b) the stockholders of CFI
approve a merger or consolidation of CFI with any other corporation (or other
entity), other than: 

               
               (i) a
merger or consolidation which would result in the Voting Securities of CFI outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 80% of the
combined voting power of the Voting Securities of CFI or such surviving entity
outstanding immediately after such merger or consolidation;  

               
               (ii) a
merger or consolidation effected to implement a recapitalization of CFI (or similar
transaction) in which no Person acquires more than 20% of the combined voting power of CFI’s
then outstanding Voting Securities; or  

               
               (iii)
a merger or consolidation which would result in the directors of CFI (who were directors
immediately prior thereto) continuing to constitute at least 50% of all directors of the
surviving entity after such merger or consolidation. In this paragraph (iii), “surviving
entity” shall mean only an entity in which all CFI’s stockholders immediately
before such merger or consolidation (determined without taking into account any
stockholders properly exercising appraisal or similar rights) become stockholders by the
terms of such merger or consolidation, and the phrase “directors of CFI (who were
directors immediately prior thereto)” shall include only individuals who were
directors of CFI at the beginning of the 24 consecutive month period preceding the date
of such merger or consolidation; or  

               
          (c)
the stockholders of CFI approve a plan of complete liquidation or an agreement for the
sale or disposition of all or substantially all of CFI’s assets; or 

               
          (d)
during any period of 24 consecutive months, individuals, who at the beginning of such
period constitute the Board of Directors of CFI, and any new director whose election by
the Board of Directors of CFI, or whose nomination for election by CFI’s
stockholders, was approved by a vote of at least one-half (1⁄2) of the directors
then in office (other than in connection with a contested election), cease for any reason
to constitute at least a majority of the Board of Directors of CFI.  

               1.8 “CFI” means The Cheesecake
Factory Incorporated, a Delaware corporation. 

               1.9 “Code” means the Internal
Revenue Code of 1986, as amended. 

               1.10 “Committee” means the
Compensation Committee of the CFI Board of Directors. 

               1.11 “Employment Period” has the
meaning set forth in Section 2. 

               1.12 “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 

               1.13 “Person” is
given the meaning as such term is used in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that unless this Agreement provides to the
contrary, the term shall not include CFI, any trustee or other fiduciary holding
securities under an employee benefit plan of CFI, or any corporation owned,
directly or indirectly, by the stockholders of CFI in substantially the same
proportions as their ownership of stock of CFI. 

           2.
        Employment. The Company shall employ Employee during the Employment
        Period (as defined below) as its President and Chief Operating Officer.
        During the Employment Period, Employee shall perform the duties properly
        assigned to him hereunder, shall devote substantially all of his time
        and attention and effort to the affairs of the Company and shall use his
        reasonable best efforts to promote the interests of the Company, including
        without limitation the performance of all of the duties customarily performed
        by a President and Chief Operating Officer. Employee shall report directly
        to the Chief Executive Officer of the Company. Employee shall provide
        information to the CFI Board as it shall request from time to time. The
        Employee will not engage in any outside business activity (as distinguished
        from personal investment activity and affairs), including, but not limited
        to, activity as a consultant, director, agent, partner, officer, or employee,
        or provide business services of any nature directly or indirectly to any
        other corporation or other business enterprise; provided, however,
        such restriction shall not apply to The Cheesecake Factory Oscar and Evelyn
        Overton Foundation or any other non-profit corporation; and provided,however,
        further, Employee shall be entitled to remain in his current position
        on the board of directors of the corporation described on Schedule 1.
        Notwithstanding the forgoing, Employee may not, in the aggregate, devote
        more than eight business days per calendar year in the performance of
        duties for any enterprise other than the Company. 

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     3. Employment
Period. Subject to the termination provisions hereinafter provided, the “initial
term” of Employee’s employment under this Agreement shall begin on June 17,
2002 and end on June 17, 2005 (“Base Term”); provided, however,
that on the such termination date, and on each subsequent anniversary of such termination
date thereafter, the term of this Agreement shall automatically be extended for one
additional year (each such year a “Rollover Year”) unless, not later than 90 days
prior to termination of the Base Term or a Rollover Year, as applicable, the Company or
the Employee shall give notice not to extend this Agreement. In the event of a Change of
Control occurring at any time after twenty-three (23) months following the date of this
Agreement and prior to the termination of the Base Term or a Rollover Year, as
applicable, the term shall automatically be extended to that date which is thirteen (13)
months after the date of such Change of Control. “Employment Period” shall mean,
for purposes of this Agreement, both the “Base Term” and any subsequent Rollover
Year.  

     4. Salary.
The Company shall pay Employee in accordance with its normal payroll practices (including
all required payroll deductions for taxes) but not less frequently than monthly, an
annual salary at a rate of $350,000. The Company may at any time grant a discretionary
bonus to the Employee based on goals and objectives to be agreed upon from time to time.
Participation in deferred compensation, discretionary bonus, retirement, stock option and
other employee benefit plans and in fringe benefits shall not reduce the Base Salary.  

     5.
Participation in Stock Option, Bonus, Retirement and Employee Benefit Plans. 

               5.1 Stock Option
Plan. Employee shall be eligible to participate in The Cheesecake Factory
Incorporated 2001 Stock Option Plan (“Stock Option Plan”). As an
inducement to Employee to enter into this Agreement, the Committee shall grant
Employee, effective on the date of grant designated in the Notice of Grant
provided to be delivered to Employee concurrently herewith, options under the
Stock Option Plan to purchase 200,000 shares of the common stock of CFI, which
options shall vest 20% on the first anniversary of the grant date set forth on
the Notice of Grant and then 20% each anniversary thereafter, provided however,
that such vesting shall be further subjected to the terms of the Stock Option
Plan and Stock Option Agreement accompanying the grant of such options. It being
understood that the terms of the Stock Option Agreement and Notice of Grant
shall not materially differ from the most recent form of such agreement issued
to senior executive officers of CFI. Commencing with the 2003 fiscal year,
Employee shall be granted additional options as the Committee may determine and
in accordance with the terms of the Stock Option Plan, and on such other terms
as generally provided to senior officers in positions commensurate with
Employee’s position at the Company. 

               5.2 Year 2002
Performance Incentive Bonus Plan. Employee shall participate in The
Cheesecake Factory Incorporated Year 2002 Performance Incentive Bonus Plan
providing for a potential bonus of 50% of Base Salary for the 2002 fiscal year
(prorated based upon the date of this Agreement), subject to the terms,
conditions and performance requirements set forth in the plan. Commencing with
the 2003 fiscal year the Employee shall participate in the annual Performance
Incentive Plan, upon the same terms as other senior officers in positions
commensurate with Employee’s position at the Company. 

               5.3 The Cheesecake
Factory Incorporated Executive Savings Plan. Employee shall be eligible to
participate in The Cheesecake Factory Incorporated Executive Savings Plan in
accordance with the terms of the plan and on the same basis as senior officers
in positions commensurate with Employee’s position at the Company. 

      
                     5.4
        Other Plans. The Employee shall be entitled to participate in any
        other plans relating to bonuses, stock options, stock purchases, pension,
        thrift, profit sharing, life insurance, medical coverage, education, or
        other retirement or employee benefits adopted or which may be adopted
        for the benefit of its senior officers in positions commensurate with
        Employee’s position at the Company from and after the date of this
        Agreement, on the same terms and conditions as senior officers in positions
        commensurate with Employee’s position at the Company. 

      3

	

     6.
Additional Stock Grant. 

               6.1 As a further inducement
to enter into this Agreement, the Committee shall grant Employee, effective on
the date of grant designated in the Notice of Grant delivered to Employee
concurrently herewith, options under the Stock Option Plan to purchase 10,000
shares of the common stock of CFI, which options shall vest 100% on that date
which is six (6) months from the date of this Agreement, provided however, that
such vesting shall be further subjected to the terms of the Stock Option Plan
and Stock Option Agreement accompanying the grant of such options. It being
understood that the terms of the Stock Option Agreement and Notice of Grant
shall not materially differ from the most recent form of such agreement issued
to senior executive officers of CFI. 

     7.
Other Benefits 

               7.1 Welfare
Benefits. During the Employment Period, Employee and/or his family, as the
case may be, shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and programs provided
by the Company (including medical, prescription, dental, disability, salary
continuance, employee life, group life, dependent life, accidental death and
travel accident insurance plans and programs) applicable to senior officers in
positions commensurate with Employee’s position at the Company. 

               7.2 Fringe Benefits.
During the Employment Period, Employee shall be entitled to all fringe benefits
that are from time to time available to senior officers in positions
commensurate with Employee’s position at the Company. 

               7.3 Vacation. During
the Employment Period, Employee shall be entitled to paid vacation time in
accordance with the plans, practices, policies, and programs applicable to
senior officers in positions commensurate with Employee’s position at the
Company, but in no event shall such vacation time be less than three (3) weeks
per calendar year. 

               7.4 Business
Expenses. During the Employment Period, the Employee shall be entitled to
incur and be reimbursed for all reasonable business expenses, including but not
limited to cellular telephone and travel (including business and first class
airline accommodations), in accordance with the CFI’s business
expense reimbursement policies and procedures. The Company agrees that it will
reimburse the Employee for all such expenses upon the presentation by the
Employee, from time to time, of an itemized account of such expenditures setting
forth the date, the purposes for which incurred, and the amounts thereof,
together with such receipts showing payments in conformity with the
Company’s established policies. Reimbursement shall be made in accordance
with normal practices after submission of an itemized account. 

               7.5 Automobile.
During the Employment Period, Employee shall have the option to participate in
the Company’s leased car program (providing for a 740i1 BMW) or receive an
automobile allowance in the amount of $1,000.00 per month. 

     8. Relocation
Expenses. The Company shall reimburse Employee for his relocation expenses as
follows: (a) expenses incurred for the packing, shipping and unpacking of all household
goods and one luxury automobile, (b) payment of all customary closing costs (but not
including the payment of any interest for money borrowed) in connection with the sale of
Employee’s condominium located in Manhattan, New York, including reasonable attorney
fees and 6% real estate brokerage fee (approximately $91,000), (c) payment of all
the real estate cost (but not including the payment of any interest or points for money
borrowed) associated with Employee’s purchase of a home in the Los Angeles,
California metropolitan area (approximately $19,000 or 2% of the purchase price), (d)
payment of temporary housing costs not to exceed an agreed upon amount for an agreed upon
duration, and (e) such amount as is necessary to reimburse Employee for the Federal and
state taxes payable by Employee for the amounts paid pursuant to clauses (a) through (d)
of this Section 8 (assuming an aggregate tax rate of 45%).  

      4

	

     9. Indemnity.
The CFI shall indemnify, defend and hold the Employee harmless from any cost, expense or
liability arising out of or relating to any acts or decisions made by the Employee on
behalf of or in the course of performing services for the Company to the same extent CFI
indemnifies, defends and holds harmless other senior officers of the Company and in
accordance with the CFI’s established policies. CFI agrees to maintain Directors and
Officers Liability Insurance to provide coverage for officers the Company.  

     10.
Termination. 

               
          (a)
Death or Permanent Disability. This Agreement shall terminate upon the Employee’s death
or Permanent Disability. 

               
          (b)
Cause. The Company may terminate Employee for Cause, at any time. 

               
          (c) Change of
Control. Employee may terminate this Agreement for any reason or no reason
during the 30 day period commencing 12 months after a Change in Control. 

               
          (d) Notice of
Termination. Any termination of the Employee’s employment by the
Company for Cause, or without cause, or as permitted in Section 10 (c)
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 14. Any termination by the Company due to Permanent
Disability also shall be communicated by giving to Employee a Notice of
Termination. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon; (ii) except in the event of a termination without
cause or pursuant to Section 10(c), sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Employee’s employment under the provision so indicated; and (iii) specifies
the Date of Termination (defined below). 

               
          (e) Date of
Termination. “Date of Termination” means the date specified in the
Notice of Termination; provided that if the Employee’s employment is
terminated due to the Employee’s death, the Date of Termination shall be
the date of death. 

     11.
Certain Benefits Upon Termination. 

               
          (a) If Employee’s
employment terminates by reason of death, or Permanent Disability, the Company
shall pay to Employee an amount equal to the sum of (i) Employee’s
accrued but unpaid Base Salary up to the Date of Termination, and (ii) if,
as, and when payable under such plan(s), an amount equal to Employee’s
bonus under any bonus plan then in effect for the then current fiscal year, to
the extent the Employee would have qualified for said bonus as of the Date of
Termination, on a pro rata basis as of the Date of Termination. 

               
          (b) If the Company
terminates Employee for Cause, the Company shall pay to Employee an amount equal
to the Employee’s accrued but unpaid Base Salary up to the Date of
Termination. 

               
          (c) If the Company
terminates the Employee without cause, or if Employee terminates his employment
pursuant to Section 10 (c), the Company shall pay the Employee the sum of
(i) Employee’s accrued but unpaid Base Salary up to the Date of
Termination, (ii) ) if, as, and when payable under such plan(s), and
amount equal to Employee’s bonus(es) under any bonus(es) plan(s) then in
effect for then current fiscal year, to the extent the Employee would have
qualified for said bonus as of the Date of Termination, on a pro rata basis as
of the Date of Termination, and (iii) an amount equal to one times
Employee’s annual Base Salary. 

               
          (d) Notwithstanding any
provision of this Section 11 to the contrary, in the event of a termination
of employment due to death or Permanent Disability, twenty percent (20%) of the
number of shares subject to unvested options granted under the Stock Option Plan
or any other option plan of the Company or CFI (effective on the date hereof or
in the future) on the Date of Termination shall vest and become exercisable, if
applicable, in accordance with the terms of such plans and the option agreements
pursuant to which the options were issued. 

      5

	

               
          (e) Notwithstanding any
provision of this Section 11 to the contrary, in the event of a termination
by the Company without Cause, twenty percent (20%) of shares subject to unvested
options granted under the Stock Option Plan or any other option plan of the
Company or CFI (effective on the date hereof or in the future) on the Date of
Termination shall vest and become exercisable, if applicable, in accordance with
the terms of such plans and the option agreements pursuant to which the options
were issued; provided, however, if during the Base Term, Employee is terminated
without Cause and, within nine months thereafter, a Change in Control shall
occur, one hundred percent (100%) of shares subject to unvested options granted
under the Stock Option Plan or any other option plan of the Company or CFI
(effective on the date hereof or in the future) on the Date of Termination shall
vest and become exercisable in accordance with the terms of such plans and the
option agreements pursuant to which the options were issued. 

               
          (f) Notwithstanding any
provision of this Section 11, in the event Employee terminates employment
under Section 10 (c), one hundred percent (100%) of shares subject to unvested
options granted under the Stock Option Plan or any other option plan of the
Company or CFI (effective on the date hereof or in the future) on the Date of
Termination shall vest and become exercisable in accordance with the terms of
such plans and the option agreements pursuant to which the options were issued. 

               
          (g) In addition to the
payments, provided therein, the Company shall pay all accrued but unpaid or
unused vacation and sick pay. In the event the Company terminates the Employee
without cause, or if the Employee terminates his employment pursuant to
Section 10(c), Company shall maintain Employee’s health insurance
benefits then provided for a one year period following the Date of Termination
or the expiration of the Employment Period, whichever is earlier. 

               
          (h) In the event that
Employee’s employment terminates by reason of Employee’s death, all
benefits provided in this Section 11 shall be paid to Employee’s estate or
as Employee’s executor shall direct, but payment may be deferred until
Employee’s executor or personal representative has been appointed and
qualified pursuant to the laws in effect in Employee’s jurisdiction of
residence at the time of Employee’s death. 

               
          (i) Company shall make all
cash payments to which Employee is entitled hereunder within thirty (30) days
following the Date of Termination of Employee’s employment or earlier, if
required by applicable law except for bonus payments, which shall be due and
payable if, as and when payable by the Company to other officers covered by such
plan. 

               
          (j) The provisions
contained in this Section 11 may be triggered only once during the term of
this Agreement by the first event to occur, so that, for example, should
Employee be terminated because of a Permanent Disability and should there
thereafter be a Change of Control, then Employee would be entitled to be paid
only under Section 11(a) and not under Section 11(c) as well. 

               
          (k)
Excise Tax Payments: 

               
               (i) In
the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the
Code, to the Employee or for his benefit paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise in connection with, or arising out
of, his employment with the Company or a change in ownership or effective control of CFI
or of a substantial portion of its assets (a “Payment” or “Payments”),
would be subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), then the Employee will be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment
by the Employee of all taxes (including any interest or penalties, other than interest
and penalties imposed by reason of the Employee’s failure to file timely a tax
return or pay taxes shown due on his return, imposed with respect to such taxes and the
Excise Tax), including any Excise Tax imposed upon the Gross-Up Payment, the Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.  

      6

	

               
               (ii)
An initial determination as to whether a Gross-Up Payment is required pursuant to this
Agreement and the amount of such Gross-Up Payment shall be made at the Company’s
expense by an accounting firm selected by the Company and reasonably acceptable to the
Employee which is designated as one of the four largest accounting firms in the United
States (the “Accounting Firm”). The Accounting Firm shall provide its
determination (the “Determination”), together with detailed supporting
calculations and documentation to the Company and the Employee within five days of the
Termination Date if applicable, or such other time as requested by the Company or by the
Employee (provided the Employee reasonably believes that any of the Payments may be
subject to the Excise Tax) and if the Accounting Firm determines that no Excise Tax is
payable by the Employee with respect to a Payment or Payments, it shall furnish the
Employee with an opinion reasonably acceptable to the Employee that no Excise Tax will be
imposed with respect to any such Payment or Payments. Within ten days of the delivery of
the Determination to the Employee, the Employee shall have the right to dispute the
Determination (the “Dispute”). The Gross-Up Payment, if any, as determined
pursuant to this Section 12(i)(ii) shall be paid by the Company to the Employee within
five days of the receipt of the Accounting Firm’s determination. The existence of
the Dispute shall not in any way affect the Employee’s right to receive the Gross-Up
Payment in accordance with the Determination. Upon the final resolution of a Dispute, the
Company shall promptly pay to the Employee any additional amount required by such
resolution. If there is no Dispute, the Determination shall be binding, final and
conclusive upon the Company and the Employee.  

     12.
Assignment. 

               
          (a) This Agreement is
personal to each of the parties hereto. No party may assign or delegate any
rights or obligations hereunder without first obtaining the written consent of
the other party hereto, except that this Agreement shall be binding upon and
inure to the benefit of any successor corporation to the Company. 

               
          (b) The Company, or CFI, as
applicable, shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. 

               
          (c) This Agreement shall
inure to the benefit of and be enforceable by the Employee and his personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. 

      
           13.    
                  
        (a) Confidential Information. During the Employment Period and
        thereafter, the Employee shall not, except as may be required to perform
        his duties hereunder or as required by applicable law, disclose to others
        for use, whether directly or indirectly, any Confidential Information
        regarding the Company. “Confidential Information” shall mean
        information about the Company, CFI, their respective subsidiaries and
        Affiliates, and their respective customers that is not available to the
        general public and that was learned by the Employee in the course of his
        employment by the Company, including (without limitation) any data, formulae,
        information, proprietary knowledge, trade secrets and client and customer
        lists and all papers, resumes, records and the documents containing such
        Confidential Information. The Employee acknowledges that such Confidential
        Information is specialized, unique in nature and of great value to the
        Company and CFI, and that such information gives the Company and CFI a
        competitive advantage. Upon the termination of his employment, the Employee
        will promptly deliver to the Company all documents (and all copies thereof)
        containing any Confidential Information. 

               
          (b) Noncompetition.
The Employee agrees that during the Employment Period of this Agreement, he will
not, directly or indirectly, without the prior written consent of the Company,
provide consultative service with or without pay, own, manage, operate, join,
control, participate in, or be connected as a stockholder, partner, or otherwise
with any business, individual, partner, firm, corporation, or other entity which
is then in competition with the Company or any present Affiliate of the Company;
provided, however, that the “beneficial ownership” by the Employee,
either individually or as a member of a “group,” as such terms are
used in Rule 13d of the Exchange Act, of not more than 3% of the voting stock of
any publicly held corporation shall not be a violation of this Agreement. It is
further expressly agreed that the Company will or would suffer irreparable
injury if the Employee were to compete with the Company or any subsidiary or
Affiliate of the Company in violation of this Agreement and that the Company
would by reason of such competition be entitled to injunctive relief in a court
of appropriate jurisdiction, and the Employee further consents and stipulates to
the entry of such injunctive relief in such a court prohibiting the Employee
from competing with the Company or any subsidiary or Affiliate of the Company in
violation of this Agreement. 

      7

	

               
          (c) Right to Company
Materials. The Employee agrees that all styles, designs, recipes, lists,
materials, books, files, reports, correspondence, records, and other documents
(“Company Material”) used, prepared, or made available to the
Employee, shall be and shall remain the property of the Company. Upon the
termination of his employment or the expiration of this Agreement, all Company
Materials shall be returned immediately to the Company, and Employee shall not
make or retain any copies thereof. 

               
          (d)
Antisolicitation. The Employee promises and agrees that during the
Employment Period of this Agreement, and for a period of two (2) years
thereafter, he will not influence or attempt to influence customers,
franchisees, landlords, or suppliers of the Company or any of its present or
future subsidiaries or Affiliates, either directly or indirectly, to divert
their business to any individual, partnership, firm, corporation or other entity
then in competition with the business of the Company, or any subsidiary or
Affiliate of the Company. 

     14. Notice.
For the purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given when
delivered directly to and accepted or rejected by the Person or certified or registered
mail, return receipt requested, postage prepaid, addressed to the respective addresses
set forth below, or to such other addresses as either party may have furnished to the
other in writing in accordance herewith, except that notice of a change of address shall
be effective only upon actual receipt:  

		
	 	Company:	 	Chief Executive Officer

The Cheesecake Factory Restaurants, Inc.

                                    The Cheesecake Factory Restaurants, Inc.

                                    26950 Agoura Road

                                    Calabasas Hills, California  91301	 
	 
	 	with copy to:	 	General Counsel of  CFI at the address above;	 
	 
	 	Employee:	 	
Michael Berry

c/o Jay Vogel, Esq.

Law Offices of Jay Vogel

1414 North Harper Avenue, Suite #6 

West Hollywood, CA 90046	 

	

     15.
Amendments or Additions. No amendment or additions to this Agreement shall be binding
unless in writing and signed by the parties hereto. 

     16.
Section Headings. The section headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the interpretation of
this Agreement. 

     17.
Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. 

     18.
Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but which together will constitute one and the same instrument. 

     19. GOVERNING
LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING
PROVISION OR RULE (WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED.
IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF CALIFORNIA WILL CONTROL
THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S
CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION
WOULD ORDINARILY APPLY.  

      8

	

     20. VENUE;
WAIVE OF JURY TRIAL. IN THE EVENT OF ANY ACTION OR PROCEEDING BETWEEN THE EMPLOYEE
AND THE COMPANY OR ITS SUBSIDIARIES REGARDING THIS AGREEMENT OR THE PLAN, THE PARTIES
AGREE TO SUBMIT THE JURISDICTION OF THE STATE OR FEDERAL COURTS WITHIN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA AND AGREE THAT VENUE IN SUCH COURTS IS ACCEPTABLE TO THE
PARTICIPANT AND THE COMPANY BOTH PARTIES AND WAIVE THEIR RIGHTS TO CLAIM FORUM NON
CONVENIENS. PARTICIPANT AND THE COMPANY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY.  

     21.
Resolution of Disputes. 

               
          (a) Arbitration. Any
dispute, controversy or claim arising out of or relating to this Agreement shall
be settled by binding arbitration held in Los Angeles, California, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect, except as specifically otherwise provided in this Section 21.
This Section 21 shall be construed and enforced in accordance with the Federal
Arbitration Act, notwithstanding any other choice of law provision in this
Agreement. Notwithstanding the foregoing, any party hereto may, in its
discretion, apply to a court of competent jurisdiction for equitable relief.
Such an application shall not be deemed a waiver of the right to compel
arbitration pursuant to this Section 21. 

               
          (b) Arbitrator. The panel to be
appointed shall consist of one neutral arbitrator selected by the Company, and acceptable
to the Employee. 

               
          (c) Procedures. The
arbitrator shall allow such discovery as the arbitrator determines appropriate
under the circumstances and shall resolve the dispute as expeditiously as
practicable, and if reasonably practicable, within one hundred twenty (120) days
after the selection of the arbitrator. The arbitrator shall give the parties
written notice of the decision, with the reasons therefor set out, and shall
have thirty (30) days thereafter to reconsider and modify such decision if any
party so requests within ten (10) days after the decision. 

               
          (d) Authority. The
arbitrator shall have authority to award relief under legal or equitable
principles, including interim or preliminary relief, and to allocate
responsibility for the costs of the arbitration and to award recovery of
attorneys’ fees and expenses in such manner as is determined to be
appropriate by the arbitrator. 

               
          (e) Entry of
Judgment. Judgment upon the award rendered by the arbitrator may be entered
in any court having in personam and subject matter jurisdiction. Company and
Employee hereby submit to the in personam jurisdiction of the Federal and State
courts in Los Angeles, California, for the purpose of confirming any such award
and entering judgment thereon. 

               
          (f) Confidentiality.
All proceedings under this Section 21, and all evidence given or discovered
pursuant hereto, shall be maintained in confidence by all parties and by the
arbitrators. 

               
          (g) Continued
Performance. The fact that the dispute resolution procedures specified in
this Section 21 shall have been or may be invoked shall not excuse any party
from performing its obligations under this Agreement and during the pendency of
any such procedure all parties shall continue to perform their respective
obligations in good faith. 

               
          (h) Tolling. All
applicable statutes of limitation shall be tolled while the procedures specified
in this Section 21 are pending. The parties will take such action, if any,
required to effectuate such tolling. 

     22.
Attorneys’ Fees. In the event of any action or proceeding to interpret or enforce
this Agreement, the prevailing party in such action shall be entitled to receive
reimbursement of reasonable attorneys’ fees and costs incurred from the other party. 

     23. Miscellaneous.
No waiver by any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations, oral or
otherwise, expressed or implied, with respect to the subject matter hereof have been made
by any party which are not expressly set forth in this Agreement. All references to
sections of the Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections.  

       9

	

     Any
payments provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. Sections 9, 11, 13, 18, 19, 20, 21 and 22 shall
survive the expiration of this Agreement. 

     IN
WITNESS WHEREOF, each of the parties hereto has executed this Agreement on the date first
indicated above. 

			THE CHEESECAKE FACTORY RESTAURANTS, INC.

By: /s/ DAVID OVERTON
       ——————————————

			Name:   David Overton
Title:   
 Chief Executive Officer

			EMPLOYEE: 

/s/ MICHAEL BERRY
——————————————

MICHAEL BERRY  

As to Provisions obligating The
Cheesecake Factory Incorporated: 

			THE CHEESECAKE FACTORY INCORPORATED

By: /s/ DAVID OVERTON
       ——————————————

			Name:   David Overton
Title:   
 Chief Executive Officer

	

      10

	

SCHEDULE 1

CORANTHIAN
COLLEGE

	
      
      11

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