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committee concluded that we have the right combination of rewards and incentives to drive company
performance, without encouraging unnecessary or excessive risk taking by our employees. Specifically, the
audit and compensation committees identified the following components of our compensation programs
that mitigate the likelihood of excessive risk taking to meet performance targets: equity incentive
compensation in the form of restricted stock units; long term contracts and a financial buy-in requirement
for restaurant management; a guaranteed base salary within our support center management personnel;
minimums and maximums on profit sharing compensation within our support center management
personnel; robust internal controls; operational focus on top line sales growth; and, a business model
which focuses on a strong balance sheet, relatively low debt, prudent growth, and sustainable long-term

The Board’s oversight roles, including the roles of the audit committee and the compensation
committee, combined with the leadership structure of the Board to include Company management, allow
the Board to effectively administer risk management policies while also effectively and efficiently
addressing Company objectives.

Strategic Planning and Initiatives. The Board also plays an instrumental oversight role in the strategic
planning and initiatives of the Company. As a part of this role, the Board has periodic strategic planning
sessions with management to ensure that the Company and the Board are aligned on the long-term goals
and initiatives of the Company. Additionally, the Board conducts periodic asset management reviews of
the Company’s assets to ensure that the Board and the management of the Company are in agreement on
how the Company is managing its asset portfolio. Finally, the Board provides direct oversight over certain
other strategic initiatives or transactions implemented by the Company, including franchise acquisitions
and the Company’s share repurchase activities.

Sustainability Initiatives. Both the Board and the Company take great pride in our environmental,
social and governance efforts—specifically our sustainability program and our appreciation for and
commitment to our employees and for the community. Our commitment is evident from our long history
of dedication to corporate citizenship and the manner in which we often consider sustainability as part of
our decision-making process. In furtherance of the foregoing, the Board reviews the Company’s
sustainability initiatives as a part of their oversight role of the Company’s business strategy and risk
management. In particular, the Board receives periodic updates, at least annually, of the Company’s
sustainability initiatives from management. Additionally, the Company includes a sustainability update in
the Company’s Annual Report.

Committees of the Board......................................................

The Board has three standing committees:
(i) the audit committee;
(ii) the compensation committee; and
(iii) the nominating and corporate governance committee.
The Board has adopted a written charter for each of these committees, which sets out the functions
and responsibilities of each committee. The charters of these committees are available in their entirety on
the Company’s website, Please note, however, that the information contained on
the website is not incorporated by reference in, nor considered to be a part of, this proxy statement.

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