NASDAQ_TXRH_2019

• The Committee reviewed with KPMG LLP the selection and disclosure of the critical audit matters
  set forth in the independent auditor’s report of the Company’s Form 10-K;


• The Committee reviewed the Company’s quarterly earnings press releases prior to issuance;


• The Committee reviewed and discussed the Company’s Audited Financial Statements for the 2019
  fiscal year with management and the independent auditors;


• As mentioned above, the Committee reviewed the Company’s Quarterly and Annual Reports on
  Form 10-Q and Form 10-K prior to filing with the SEC;


• The Committee evaluated the appointment, compensation, retention and oversight of KPMG LLP.
  In connection with such appointment, the Committee evaluated the service level of the incumbent
  independent auditor, which included criteria such as prior year quality of service, industry and
  technical expertise, independence, resource availability, and reasonableness and competitiveness of
  fees, as well as solicited the input of key management employees during its evaluation; and


• Based on the review and discussion referred to above, and in reliance thereon, the Committee
  recommended to the Board that the Audited Financial Statements be included in the Company’s
  Annual Report on Form 10-K for the fiscal year ended December 31, 2019, for filing with the SEC.

All members of the Committee concur in this report.

Gregory N. Moore, Chair

Curtis A. Warfield

James R. Zarley

Related Party Transactions

The Committee’s charter provides that the Committee will review and approve any transactions
between us and any of our executive officers, non-employee directors, and 5% shareholders, or any
members of their immediate families, in which the amount involved exceeds the threshold limits
established by the regulations of the SEC. In reviewing a related-party transaction, the Committee
considers the material terms of the transaction, including whether the terms are generally available to an
unaffiliated third party under similar circumstances. Unless specifically noted, the transactions described
below were entered into before our initial public offering and the subsequent formation of the
Committee.

Grants of Franchise or License Rights

We have licensed or franchised restaurants to companies owned in part by certain Named Executive
Officers. The licensing or franchise fees paid by these companies to us range from 0.0% to 4.0% of
restaurant sales, which is the amount we typically charge to franchisees. We believe that allowing certain
Named Executive Officers with ownership interests in our restaurants that pre-dated our initial public
offering to continue to maintain those ownership interests adds an ongoing benefit to the Company by
making those Named Executive Officers more invested in the overall success of the brand. Ownership of