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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

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to § 240.14a-12

El Pollo Loco Holdings, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (check all boxes that apply):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Graphic

EL POLLO LOCO HOLDINGS, INC.

3535 Harbor Boulevard, Suite 100

Costa Mesa, CA 92626

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON May 28, 2024

Dear Stockholders of El Pollo Loco Holdings, Inc.:

The 2024 annual meeting of stockholders of El Pollo Loco Holdings, Inc. (“we,” “us,” “our,” and the “Company”), will be held virtually via audio webcast at www.virtualshareholdermeeting.com/LOCO2024 on Tuesday, May 28, 2024, at 1:00 p.m. Pacific Time to consider and vote on the following proposals:

1.Election of the two director nominees named in the accompanying proxy statement as Class I directors to serve until the 2027 annual meeting of stockholders and until their respective successors are duly elected and qualified;
2.Ratification of the appointment of BDO USA, P.C., as our independent registered public accounting firm for 2024;
3.Approval of an amendment of our Certificate of Incorporation to provide for exculpation of certain officers;
4.Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers;
5.Approval of an amendment to our Equity Incentive Plan, including an increase the number of shares of Common Stock reserved for issuance thereunder; and
6.Transaction of such other business as may properly come before the meeting or any adjournments or postponements thereof.

You will be able to participate online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/LOCO2024. You will also be able to vote electronically at the annual meeting. Details regarding how to participate in the meeting online and the business to be conducted at the annual meeting are more fully described in the accompanying proxy statement.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 28, 2024: This Notice, the proxy statement, and the 2023 Annual Report on Form 10-K are available at www.proxyvote.com.  These materials are also available on our website at http://investor.elpolloloco.com.

Our board of directors has fixed the close of business on April 1, 2024, as the record date for the determination of stockholders entitled to notice of and to vote at the annual meeting. Only stockholders of record will be entitled to notice of and to vote at the meeting or any adjournments or postponements thereof, with each share entitling its owner to one vote on each matter properly presented. A list of stockholders as of the record date may be accessed during the virtual annual meeting at www.virtualshareholdermeeting.com/LOCO2024 by using the control number included with the proxy materials you received for the meeting.

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YOUR VOTE IS IMPORTANT. We hope that you will attend the annual meeting. Whether or not you do, please vote in advance online, by telephone, or by mail.

By Order of the Board of Directors,

/s/ William R. Floyd

William R. Floyd

Chairperson

Costa Mesa, California

April 16, 2024

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EL POLLO LOCO HOLDINGS, INC.

PROXY STATEMENT

TABLE OF CONTENTS

Introduction

2

Questions and Answers About the Proxy Materials and the Annual Meeting

3

Proposal 1: Election of Directors

9

Information Regarding the Board of Directors

10

Proposal 2: Ratification of Independent Registered Public Accounting Firm

13

Audit Committee Report

14

Proposal 3 Amendment Of The Certificate Of Incorporation To Provide For Exculpation Of Certain Officers

15

Proposal 4: Advisory Vote to Approve the Compensation of Named Executive Officers

17

Proposal 5: Approval of our Equity Incentive Plan, As Amended

18

Director Compensation

27

Governance of the Company

28

Board Composition

28

Board Leadership Structure

30

Code of Business Conduct and Ethics

30

Corporate Governance Guidelines

30

Role in Risk Oversight

31

Director Independence

31

Board Committees

32

Audit Committee

33

Compensation Committee

33

Nominating and Corporate Governance Committee

35

Compensation Committee Interlocks and Insider Participation

37

Board Meetings

37

Annual Meeting Attendance

38

Succession Planning

38

Executive Officers

38

Compensation Discussion and Analysis

39

Executive Summary

39

Overall Compensation Philosophy

40

Elements of Executive Compensation

42

Stockholder Advisory (Non-Binding) Vote on Executive Compensation

42

Named Executive Officer Compensation

44

Other Compensation Policies

48

Compensation Committee Report

53

Executive Compensation Tables

54

Security Ownership of Certain Beneficial Owners

62

Equity Compensation Plan Information

64

Certain Relationships and Related Party Transactions

65

Other Matters

69

Appendix A

A-1

Appendix B

B-1

Appendix C

C-1

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INTRODUCTION

This proxy statement provides information for stockholders of El Pollo Loco Holdings, Inc. (“we,” “us,” “our,” and the “Company”), in connection with the solicitation of proxies on behalf of the Company and its board of directors (the “Board”) from holders of the outstanding shares of the Company’s common stock, par value $0.01 per share, for use at the Company’s annual meeting of stockholders to be held at 1:00 p.m. Pacific Time, on Tuesday, May 28, 2024, and at any adjournments or postponements thereof.

At the annual meeting, stockholders will be asked to vote either directly or by proxy on the following matters discussed herein:

1.Election of the two director nominees named in the accompanying proxy statement as Class I directors to serve until the 2027 annual meeting of stockholders and until their respective successors are duly elected and qualified;
2.Ratification of the appointment of BDO USA, P.C., as our independent registered public accounting firm for 2024;
3.Approval of an amendment to our Certificate of Incorporation to provide for exculpation of officers;
4.Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers;
5.Approval of an amendment to our Equity Incentive Plan, including an increase to the number of shares of Common Stock reserved for issuance thereunder; and
6.Transaction of such other business as may properly come before the meeting or any adjournments or postponements thereof.

The Notice of Annual Meeting, this proxy statement, form of proxy, and our 2023 Annual Report on Form 10-K (“Annual Report”) are being distributed to stockholders on or about April 16, 2024. These materials are also available on our website at http://investor.elpolloloco.com.

In accordance with the rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), we have elected to furnish our proxy materials, including this proxy statement and our Annual Report, to stockholders over the internet. Accordingly, we are mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders that did not request paper copies of our proxy materials and Annual Report or are otherwise receiving the proxy materials electronically by email, while brokers, banks and other nominees who hold shares on behalf of beneficial owners will be sending their own similar Notice to the beneficial owners. The Notice contains instructions on how stockholders can access our proxy materials over the internet and vote their shares over the internet, via phone, or by mail. If you receive a Notice, you will not receive printed copies of our proxy materials unless you specifically request them.

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QUESTIONS AND ANSWERS

ABOUT THE PROXY MATERIALS

AND THE ANNUAL MEETING

Although we encourage you to read this proxy statement in its entirety, we include this Q&A section to provide some background information and brief answers to several questions you might have about the annual meeting.

Q:Why are we providing these materials?

A:These materials are provided to you in connection with our annual meeting, which will take place on Tuesday, May 28, 2024 at 1:00 p.m. Pacific Time. Stockholders are invited to participate in the annual meeting and are requested to vote on the proposals described herein.

Q:What proposals will be voted on at the annual meeting?

A:There are five proposals scheduled to be voted on at the annual meeting:

Election of the two director nominees named in this proxy statement as Class I directors to serve until the 2027 annual meeting of stockholders and until their respective successors are duly elected and qualified.
Ratification of the appointment of BDO USA, P.C., as our independent registered public accounting firm for 2024.
Approval of an amendment to our Certificate of Incorporation to provide for exculpation of officers.
Approval, on an advisory (non-binding) basis, of the compensation of our named executive officers.
Approval of an amendment to our Equity Incentive Plan, including an increase to the number of shares of Common Stock reserved for issuance thereunder.

We will also consider any other business that properly comes before the annual meeting or any adjournment or postponement thereof.

Q:How does the Board recommend that I vote?

A:The Board recommends that you vote your shares:

“FOR ALL” the two Class I director nominees to be elected to the Board.
“FOR” the ratification of the appointment of BDO USA, P.C., as our independent registered public accounting firm for 2024.
“FOR” approval of an amendment to our Certificate of Incorporation to provide for exculpation of officers.
“FOR” the compensation of our named executive officers.
“FOR” approval of an amendment to our Equity Incentive Plan.

Q:Can I attend the annual meeting?

A:We will be hosting the annual meeting live via the internet. You will not be able to attend the annual meeting in person. Any stockholder can listen to and participate in the annual meeting live via the internet at www.virtualshareholdermeeting.com/LOCO2024. Our Board annually considers the appropriate format of our

3

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annual meeting. Our virtual annual meeting allows stockholders to submit questions during the 15 minutes before the meeting and during the meeting. After the meeting, we will spend up to 15 minutes answering stockholder questions that comply with the meeting rules of conduct; the rules of conduct will be posted on the virtual meeting web portal. To the extent time doesn’t allow us to answer all of the appropriately submitted questions, we will answer them in writing on our investor relations website, at https://investor.elpolloloco.com, soon after the meeting. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

The annual meeting webcast will begin promptly at 1:00 p.m., Pacific Time. We encourage you to access the annual meeting webcast prior to the start time. Online check-in will begin, and stockholders may begin submitting written questions, at 12:45 p.m., Pacific Time, and you should allow ample time for the check-in procedures.

Q.What do I need in order to be able to participate in the annual meeting?

A:You will need the control number to be able to vote your shares or submit questions during the annual meeting. The control number is included on your Notice or your proxy card or voting instruction form if you received a printed copy of the proxy materials or included in the email to you if you received the proxy materials by email. Instructions on how to connect to the annual meeting and participate via the internet are posted at www.virtualshareholdermeeting.com/LOCO2024. If you do not have your control number, you will be able to access and listen to the annual meeting, but you will not be able to vote your shares or submit questions during the annual meeting.

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting web portal.

Q.Why is the Company holding the annual meeting virtually?

A:We are embracing technology to provide expanded access, improved communication, reduced environmental impact and cost savings for our stockholders and the Company. Hosting a virtual meeting enables increased stockholder attendance and participation since stockholders can participate and ask questions from any location around the world, and it provides us an opportunity to give thoughtful responses. In addition, we intend that the virtual meeting format provide stockholders a similar level of transparency to the traditional in-person meeting format, and we take steps to ensure such an experience. Our stockholders will be afforded the same opportunities to participate at the virtual annual meeting as they would at an in-person annual meeting of stockholders.

Q:What shares can I vote?

A:You may vote all shares of common stock that you owned as of the close of business on the record date, April 1, 2024. You may cast one vote per share of common stock, including shares (i) held directly in your name as the stockholder of record and (ii) held in street name for you as the beneficial owner through a broker, bank, or other nominee. As of the record date, we had 31,183,427 shares of common stock issued and outstanding.

Q:How do I vote?

A:Stockholder of record. As a stockholder of record, you may vote your shares at the annual meeting by visiting www.virtualshareholdermeeting.com/LOCO2024 and using the control number on the Notice or proxy card. You may also vote in advance of the annual meeting by submitting a proxy over the internet or by telephone by following the instructions provided in the Notice. If you received a printed copy of the proxy materials, you may vote your shares by completing, dating and signing the proxy card that was included with this proxy statement and promptly returning it in the pre-addressed, postage paid envelope provided to you, or by submitting a proxy over the internet or by telephone by following the instructions on the proxy card. If you vote by internet or telephone, then you need not return a written proxy card by mail. Even if you plan to attend the annual meeting, we recommend that you vote in advance, in case you change your mind.

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Beneficial owner. If you hold your shares of common stock in street name through a broker, bank or other nominee, your broker, bank or other nominee will allow you to deliver your voting instructions over the internet and may also permit you to vote by telephone. In addition, if you received a printed copy of this proxy statement, you may submit your voting instructions by completing, dating and signing the voting instruction form that was included with this proxy statement and promptly returning it in the pre-addressed, postage paid envelope provided to you. If you vote by internet or telephone, then you need not return a written voting instruction form by mail.

Q:What is the difference between being a stockholder of record and a beneficial owner?

A:As summarized below, there are some differences between being a stockholder of record and a beneficial owner.

Stockholder of record: If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are the stockholder of record with respect to those shares, and these proxy materials are being made available directly to you. As the stockholder of record, you have the right to grant your voting proxy directly to the Company and to vote at the annual meeting.

Beneficial owner: If your shares are held through a broker, bank or other nominee, you are the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you by the organization that holds your shares. As the beneficial owner, you have the right to tell your nominee how to vote, and you are also invited to attend the annual meeting. The broker, bank or other nominee that holds your shares has sent you instructions on how to submit your voting instructions. You may vote by following those instructions and the instructions on the Notice.

Q:What is the deadline for voting my shares if I do not attend the annual meeting?

A:If you are a stockholder of record, your proxy must be received by telephone or the internet by 11:59 p.m. Eastern Time on May 24, 2024, for your shares to be voted at the annual meeting. If you are a stockholder of record and you received a printed set of proxy materials, you also have the option of completing, signing, dating and returning the proxy card enclosed with the proxy materials before the annual meeting in order for your shares to be voted at the meeting. If you are a beneficial owner of shares of our common stock, please comply with the deadlines included in the voting instructions provided by the bank, broker or other nominee that holds your shares.

Q:Can I change my vote or revoke my proxy?

A:Yes. If you are a stockholder of record, you can change your proxy instructions at any time before the vote at the annual meeting, by:

Submitting a new vote online or via telephone (only the latest internet or telephone voting instructions will be followed);
Mailing a written notice of revocation to our Corporate Secretary at our address below;
Signing and returning a new proxy card bearing a later date, which will automatically revoke your earlier submitted proxy; or
Voting electronically during the annual meeting.

If your shares are held in “street name,” you must contact your broker, bank or other nominee to find out how to change or revoke your voting instructions.

Q:What constitutes a quorum?

A:The holders of a majority of our common stock issued and outstanding as of the record date, present in person (including through online participation) or represented by proxy at the annual meeting and entitled to vote, shall constitute a quorum. Votes withheld, abstentions, and broker non-votes (as described below) are counted as present and entitled to vote for the purpose of determining the presence of a quorum.

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Q:What is a broker non-vote?

A:If you hold your shares of common stock in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may generally vote your shares in its discretion on routine matters. However, a broker cannot vote shares held in street name on non-routine matters unless the broker receives voting instructions from the street name holder. Proposal 2 (ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm for 2024) is considered routine under applicable stock exchange rules, while each of the other proposals to be submitted for a vote of stockholders at the annual meeting is considered non-routine. Accordingly, if you hold your shares of common stock in street name through a brokerage account and you do not submit voting instructions to your broker, your broker may exercise its discretion to vote on Proposal 2 at the annual meeting, but your broker will not be permitted to vote your shares on any of the other proposals at the annual meeting. If your broker exercises this discretion, your shares will be counted as present for determining the presence of a quorum at the annual meeting and will be voted on Proposal 2 in the manner directed by your broker, but your shares will constitute “broker non-votes” on each of the other items at the annual meeting.

Q:What is a proxyholder?

A:We are designating Ira Fils, our Chief Financial Officer, and Anne E. Jollay, our Corporate Secretary, to hold and vote all properly tendered proxies. If you have properly submitted a proxy and indicated how your shares are to be voted on each of the proposals, they will so vote. If you properly submitted a proxy and did not indicate how your shares are to be voted on one or more of the proposals, they will vote as the Board recommends on those proposals. While we do not expect any other business to come up for vote at the annual meeting, if it does, each properly tendered proxy gives the named proxies authority to vote your shares on those matters in their discretion.

Q:What vote is required to approve each proposal and how are votes counted?

A:Proposal 1. The election of directors requires a plurality vote of the shares of common stock present in person or represented at the annual meeting and entitled to vote on the proposal. The two director nominees who receive the largest number of votes cast “for” will be elected as Class I directors. As a result, any shares not voted “for” a particular nominee (whether as a result of stockholder withholding or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election.

Other Items (Proposals 2, 4 and 5). Approval of each of Proposal 2, Proposal 4 and Proposal 5 requires the affirmative vote of a majority of the shares of common stock present in person or represented at the annual meeting and entitled to vote on the proposal. For Proposal 2 (ratification of the appointment of BDO USA, P.C., as our independent registered public accounting firm for 2024), Proposal 4 (advisory approval of the compensation of our named executive officers), and Proposal 5 (ratification and approval of our Equity Incentive Plan), shares voted “abstain” will have the same effect as a vote “against” the proposal; but if you do not vote your shares (or, for shares held in street name, if you do not submit voting instructions and your broker does not or may not vote your shares), this will have no effect on the outcome of the vote. We do not expect any broker non-votes on Proposal 2, and broker non-votes will not be counted in determining the outcome of Proposals 4 and 5.

Proposal 3.  Approval of Proposal 3 (amendment to our Certificate of Incorporation to provide for exculpation of officers) requires the affirmative vote of holders of a majority of the outstanding common stock entitled to vote thereon.  If you do not vote your shares (or, for shares held in street name, if your shares constitute broker non-votes because you do not submit voting instructions or your broker otherwise does not vote your uninstructed shares), or if you “abstain” from voting your shares on Proposal 3, your shares will have the same effect as a vote “against” the proposal.

Q:Who will count the votes at the annual meeting?

A:A representative of Broadridge Financial Solutions, Inc. has been appointed to be the inspector of elections, to count the votes at the meeting, to make a written report thereof, and to certify the result of the vote taken. We will announce preliminary voting results at the meeting and publish final voting results on a Current Report on Form 8-K that we expect to file with the SEC within four (4) business days after the end of the annual meeting.

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Q:Who bears the cost of soliciting votes for the annual meeting?

A:We bear the entire cost of preparing, assembling, printing, mailing, and distributing these proxy materials. The solicitation of proxies or votes may be made in person, by telephone, and by electronic communication by our directors, officers, and employees, who will not receive any additional compensation for these solicitation activities. In addition, we may reimburse brokerages and other entities that represent beneficial owners for their expenses in forwarding solicitation materials to beneficial owners.

Q:How can I nominate a director or propose an action for next year’s annual meeting?

A:If a stockholder wishes to submit a nomination or proposal, which will not be included in the Company’s proxy materials, for consideration at next year’s annual meeting, a written notice of such nomination or proposal must be provided to the Corporate Secretary. In accordance with the advance notice provisions of our bylaws, the written notice must have been delivered to our principal executive office (provided below) no earlier than the close of business on January 28, 2025, and no later than the close of business on February 27, 2025. However, if next year’s annual meeting is not scheduled within 25 days of that anniversary of the 2024 annual meeting (i.e., between May 3, 2025, and June 22, 2025), the notice must be received by the Corporate Secretary no later than the close of business on the 10th day following the date on which notice of the annual meeting was mailed or  of the date of the annual meeting was publicly announced, whichever first occurs.

To be in proper written form, a notice must provide certain information as set forth in our bylaws, which were filed as Exhibit 3.3 within our Annual Report.

In accordance with our bylaws, the foregoing deadline and notice requirements set forth in our bylaws are also intended to apply to and satisfy the deadline and notice requirements set forth in paragraph (b) of Rule 14a-19 under the Exchange Act with respect to notice by a stockholder who intends to solicit proxies in support of director nominees other than the Company’s nominees at next year’s annual meeting.

Q:How can I submit a stockholder proposal for inclusion in the Company’s proxy materials for next year’s annual meeting?

A:For a stockholder proposal (other than a director nomination) to be included in the Company’s proxy materials for consideration at next year’s annual meeting, you must satisfy both substantive and procedural requirements set forth in Exchange Act Rule 14a-8, a federal securities regulation that addresses when a company must include a stockholder’s proposal in its proxy materials, including the proxy statement and proxy card.

For a stockholder proposal to be eligible for inclusion in the Company’s proxy materials for the 2025 annual meeting, it must be received at our corporate address (provided below) by December 17, 2024. However, if the date of our 2025 annual meeting has been changed by more than 30 days from the date of our 2024 annual meeting (i.e., if it is not between April 28, 2025, and June 27, 2025), then the deadline is a reasonable time before we begin to print and send our proxy materials.

Q:Can I recommend director candidates directly to the Nominating and Corporate Governance Committee?

A:Yes, you may recommend director candidates by writing to the Nominating and Corporate Governance Committee of the Board at the mailing or email address below. We will consider any recommended director candidates subject to Board needs and candidate qualifications. We recommend that you include information relevant for the Nominating and Corporate Governance Committee to evaluate your recommendation, including (i) your and your candidate’s names and contact information, (ii) your candidate’s principal occupation or employment, and other biographical information similar to that provided herein for directors and officers, (iii) other information of the sort required to be in a notice of nomination under our bylaws as discussed above, and (iv) a written consent by the candidate to your nomination. Stockholders recommending candidates for consideration by our Nominating and Corporate Governance Committee in connection with the next annual meeting of stockholders should submit their written recommendation no later than January 1 of the year of that meeting.

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Q:Can I communicate with the Board?

A:Yes, any stockholder or other interested party may write to the Board at our address below, on our investor relations website at https://investor.elpolloloco.com/ under “Contact the Board” or via email at legal@elpolloloco.com. Any interested parties desiring to communicate with the Audit Chairperson and other non-management directors may contact such directors by mailing communications to the same address below, but it must be directed to the attention of the Chairperson of the Audit Committee c/o the Corporate Secretary. Communications will be handled in accordance with the procedures explained on our website. The Board has instructed the Corporate Secretary to forward such correspondence to the intended recipients; however, the Board has also instructed the Corporate Secretary, prior to forwarding any correspondence, to review such correspondence and not forward any items deemed to be of a purely commercial or frivolous nature (such as spam) or otherwise obviously inappropriate for the intended recipient’s consideration. In such cases, the Corporate Secretary may forward some of the correspondence elsewhere within our company for review and possible response.

Q:What is your corporate address for notice and Board communication purposes?

A:

El Pollo Loco Holdings, Inc.

Attention: Corporate Secretary

3535 Harbor Boulevard, Suite 100

Costa Mesa, CA 92626

(714) 599-5000

Q:What should I do if my household receives one copy of proxy materials and I need an additional copy?

A:The Company has adopted a procedure called “householding,” which is approved by the SEC and permits the delivery of a single copy of the proxy materials, including the Notice of Annual Meeting of Stockholders, this proxy statement and the Annual Report, to multiple stockholders sharing an address unless we have received contrary instructions from a stockholder. Stockholders who participate in householding will continue to access and receive a separate Notice or proxy card, as applicable. If your household received a single set of proxy materials this year, but you would prefer to receive your own copy, or if you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the proxy materials and you wish to receive only a single copy of each of these documents for your household, please contact Broadridge Householding Department, by calling their toll free number, 1-866-540-7095 or by writing to: Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. In the case of a request for your own copy of the proxy materials, you will be removed from the householding program within 30 days of receipt of your instructions, at which time you will then be sent separate copies of the documents.

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PROPOSAL 1: ELECTION OF DIRECTORS

Our business operates under the direction of our Board, which currently consists of nine directors. Our certificate of incorporation divides our Board into three classes, Classes I, II, and III, with terms expiring in 2024, 2025, and 2026, respectively. Our Board has nominated, and stockholders are being asked to elect, Deborah Gonzalez and Elizabeth Williams as our Class I directors, each for a three-year term expiring at the 2027 annual meeting of stockholders. If elected, the nominees will each hold office until their respective successor is duly elected and qualified or until their earlier death, resignation, or removal.

The terms of Michael G. Maselli and Carol “Lili” Lynton, who each currently serve as Class I directors, will end at the 2024 annual meeting. They will each not be nominees for director and will retire from the Board immediately prior to the 2024 annual meeting. Accordingly, on March 22, 2024, the Board resolved to reduce the size of the Board from nine to seven directors effective immediately prior to the 2024 annual meeting. Mr. Maselli is our former Chairperson and has served on our Board since 2011, providing critical leadership leading up to and following our initial public offering in 2014. Ms. Lynton joined our Board in 2016 as an independent director, enabling our Board to reach majority independence as we seasoned as a public company.  Ms. Lynton has been a committed member of the Compensation Committee during her eight-year tenure on the Board, and has also most recently led the Audit Committee as its Chair. We thank Mr. Maselli and Ms. Lynton for their many years of dedicated service to our company and for their confidence in our Board and new leadership under Ms. Williams and Mr. Floyd as we seek to unlock our brand’s long-term potential.

The two Class I director nominees, Deborah Gonzalez and Elizabeth Williams, have each consented to be named in this proxy statement and to serve as a director if elected. If any nominee of the Board is unable to serve, or for good cause will not serve, as a director at the time of the annual meeting, the persons who are designated as proxies intend to vote, in their discretion, for any other substitute nominees that may be designated and recommended by the Board. As of the date of this proxy statement, the Board has no reason to believe that either of the director nominees named above will be unable to serve, or for good cause will not serve, as a director if elected.

Ms. Gonzalez was previously elected to serve on our Board of Directors by our stockholders. Ms. Williams was appointed to the Board and as the Company’s Chief Executive Officer on March 11, 2024.

You may vote “FOR ALL,” of the nominees, “WITHHOLD” your vote from all of the nominees or “WITHHOLD” your vote from either one of the nominees. The directors are elected by a plurality of the votes cast at the annual meeting. “Plurality” means that the two individuals who receive the largest number of votes “FOR” are elected as Class I directors. As a result, any shares not voted “FOR” a particular nominee (whether as a result of stockholder withholding or a broker non-vote) will not be counted in such nominee’s favor and will have no effect on the outcome of the election.

The Board recommends that you vote “FOR ALL” the Class I director nominees to be elected to the Board.

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INFORMATION REGARDING THE BOARD OF DIRECTORS

Biographies of Director Nominees and Continuing Directors

The following is biographical information about each nominee for election to our Board of Directors at the 2024 annual meeting and each of the other continuing directors, including a description of the experience, qualifications and skills that have led the Board to determine that each director should serve on the Board. The age of each director is as of April 16, 2024.

Name

    

Age

    

Position

William R. Floyd

79

Chairperson and Director

Elizabeth Williams

47

Chief Executive Officer and Director

Douglas J. Babb

72

Director

Samuel N. Borgese

75

Director

Mark Buller

59

Director

Nancy Faginas-Cody

64

Director

Deborah Gonzalez

59

Director

William R. Floyd was elected Chairperson of our Board on April 18, 2023, following Michael Maselli’s resignation as Chairperson on April 18, 2023.  Prior to his election to Chairperson of our Board, Mr. Floyd has been a director on our Board since 2016. From 2012 to 2019, Mr. Floyd was a director of Korn/Ferry International, a major executive recruiting firm and talent consultancy, as well as Pivot Physical Therapy, a regional outpatient physical therapy provider. In addition, he served as a business development corporation board member of Muzinich Capital LLC and a broker–dealer affiliated with Muzinich & Co., Inc., a global institutional asset manager specializing in corporate credit from 2016 to 2019. From October 2017 to September 2020, Mr. Floyd served as Chairman of Busaba Restaurants, a U.K. based Thai restaurant concept for which Muzinich is the principal debt holder. From 2009 to 2012, he was Chairman of the Board of Buffet Holdings, Inc., which, through its subsidiaries, owns and operates a chain of restaurants in the United States. Before his retirement as an executive, from 2007 to 2008, he was Chairman and Chief Executive Officer of Physiotherapy Associates, a leading provider of outpatient physical rehabilitation services. From 2006 to 2007, he was Chairman and Chief Executive Officer of Benchmark Medical, Inc., a predecessor to Physiotherapy Associates. From 2001 to 2006, he was Chairman and Chief Executive Officer of Beverly Enterprises, Inc., a leading provider of eldercare services. From 2000 to 2001, he was President and Chief Operating Officer of Beverly Enterprises, Inc. From 1996 to 1998, he was President and Chief Executive Officer of Choice Hotels International. From 1989 to 1996, he served in various executive positions within PepsiCo Inc.’s restaurant group, including, from 1995 to 1996, as Chief Operating Officer of Taco Bell Corp., and, from 1994 to 1995, as Chief Operating Officer of Kentucky Fried Chicken. Mr. Floyd holds a bachelor's degree from the University of Pennsylvania, and an MBA from the Wharton School of the University of Pennsylvania, where he served as a member of the Board of Overseers of the University of Pennsylvania School of Nursing from 2006-2021. Because of his 30-plus years of experience in marketing, management, and operations, as a director, executive, and senior manager in the service industry, with a particular focus on food service, Mr. Floyd is well-qualified to serve as Chairperson of our Board.

Elizabeth “Liz” Williams has served as our Chief Executive Officer and a member of our Board since March 2024. Prior to joining El Pollo Loco, Ms. Williams was the CEO of Outfox Hospitality, overseeing Foxtrot, a modern café and convenience store. She orchestrated a merger with Dom’s Kitchen and Market during her tenure. Before her time at Outfox, Ms. Williams led Hart House, LLC, and served as CEO of Drybar Holdings, LLC. Her extensive career also includes leadership roles at Taco Bell, where she held positions such as Chief Financial Officer, Vice President of Financial Planning and Analysis, and President of Taco Bell International. Ms. Williams also spent six years at Boston Consulting Group, specializing in Consumer and Retail practice. She holds a bachelor’s degree from the University of Texas and an MBA from Northwestern Kellogg School of Management. Ms. Williams is well-qualified

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to serve on our Board due to her significant experience leading high-growth multi-unit retail, restaurant and service businesses and, as our Chief Executive Officer, she provides a vital link between our Board and management team.

Douglas J. Babb has been a director since 2018. From 2007 to 2014, he was Chief Executive Officer of Cooper Clinic, P.A. (“Cooper”), one of the largest multi-specialty, physician-owned clinics in the Arkansas region. Additionally, from 2010 to 2014, he served as an Adjunct Instructor for the College of Business at the University of Arkansas - Fort Smith.  From 2015 to present, he serves as Managing Director for Babb Strategic Services, L.L.P. (“Babb Strategic”), a consulting and strategic planning services company that he formed in 2006. Prior to forming Babb Strategic, he served as Executive Vice President - Chief Administrative and Legal Officer, and Secretary of Beverly Enterprises, Inc., a leading provider of healthcare services to the elderly in the United States, from 2000 to 2006. Prior to that he served in various senior executive roles at Burlington Northern, Inc., a diversified transportation company and Burlington Northern Santa Fe Corporation, from 1978 to 1999 and as Staff Counsel for the South Carolina Attorney General’s Office from 1977 to 1978. Mr. Babb is Immediate Past Chair of the United States Marshals Museum. During his 5 1/2 years as Chair, the museum experience was fabricated and installed and the museum completed. The 53,000 square foot museum honoring the United States Marshals Service opened to the public on July 1, 2023. Mr. Babb is now a Director on the United States Marshals Museum Foundation Board of Directors. He holds a bachelor's degree from Minnesota State University and a J.D. from the University of South Carolina. Mr. Babb is well-qualified to serve on our Board on account of his extensive experience, in particular the successful turnaround of Beverly Enterprises.

Samuel N. Borgese has been a director since 2011, and served as Chairman of our Board in 2011, while he also served as our Executive Chairman. Since 2022, Mr. Borgese has been President, and Chief Executive Officer of Gather Holdings, LLC, which holds 100% interest in Shari’s Management Corporation and Shari’s Restaurant Group. Since 2017, Mr. Borgese has also served as President, Chief Executive Officer and Director of Shari's Management Corporation and Shari's Restaurant Group, a multilocation family dining company. Since 2011, Mr. Borgese has been Managing Partner of Aceneca, LLC, a restaurant investment and consulting firm focused on creating shared value in the restaurant and other business sectors. From October 2014 to August 2016, he was President and Chief Executive Officer, and a member of the board of directors, of LRI Holdings, Inc., and its affiliates Logan’s Roadhouse, Inc., and Roadhouse Holding Inc., collectively known as Logan’s Roadhouse, a casual dining steakhouse chain. In August 2016, the Logan’s Roadhouse entities and various of their affiliates filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. Mr. Borgese left Logan’s Roadhouse in August 2016, following the declaration of bankruptcy. From 2011 to 2014, he was Chief Executive Officer of Max Brenner International, a global chocolatier. From 2008 to 2011, he was first Interim President and Chief Executive Officer and then permanent President and Chief Executive Officer of CB Holding Corp., the parent of Charlie Brown’s Steakhouse and other chains, which was owned by Trimaran Capital Partners. From 2003 to 2008, he was employed by Catalina Restaurant Group, first as Chief Development Officer and later as President and Chief Executive Officer. Before that, Mr. Borgese was Chief Executive Officer of Bay Logics, Inc., an enterprise software company that supported 300 restaurant, retail, hospitality and general services businesses in the lifecycle management of their real estate assets. Mr. Borgese attended Temple University’s Architecture and Engineering school and holds a Certificate of Director Education from the National Association of Corporate Directors and a Certification of Completion of Harvard Business School Executive Education Program. With more than 30 years of senior executive and other leadership positions with public and private companies in the retail, technology, restaurant and hospitality sectors, Mr. Borgese is well-qualified to serve on our Board.

Mark Buller has been a director since 2015. He was appointed Executive Chairman of Superior Cabinets in July 2018 and from 2013 to 2015, Mr. Buller was the Chairman and Chief Executive Officer of Norcraft Companies, Inc., a leading manufacturer of kitchen and bathroom cabinetry in the United States and Canada. Beginning in 2003, Mr. Buller was the Chief Executive Officer of the predecessor of Norcraft Companies, Inc., Norcraft Companies, L.P., as well as a member of the board of managers for that entity’s general partner, Norcraft GP, L.L.C. Mr. Buller’s executive experience in the home furnishings industry is longstanding. From 1988 to 1996, Mr. Buller served in various management positions at Kitchen Craft Cabinets, a Canadian cabinetry maker. From 1996 to 1999, he served as President of Kitchen Craft. Following the acquisition of Kitchen Craft by Omega Cabinets, Ltd., he continued in that position from 1999 to 2000. In 2000, Mr. Buller was appointed Chief Executive Officer of Omega. He remained in that position until 2002, leaving Omega after it was sold to Fortune Brands, Inc. In sum, Mr. Buller has over 26 years in the home furnishings industry and spent 18 years as a chief executive officer or division president. Mr. Buller is

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well-qualified to serve on our Board due to his extensive leadership, executive, managerial, and business experience, particularly in the salient areas of supply chain logistics, product design, brand management, and consumer trends.

Nancy Faginas-Cody has been a director since December 2021. Ms. Faginas-Cody retired from Walt Disney Company as the Senior Vice President, Information Technology Enterprise Business Systems, a position she held from 2013 to 2020. She previously served as Vice President, Information Technology for Disney Consumer Products, Inc. from 2004 to 2013 and as Director, Information Technology for Disney Stores Worldwide from 1999 to 2004. In her most recent role with Walt Disney Company, she was responsible for the global corporate enterprise business systems. Prior to Walt Disney Company, Ms. Faginas-Cody served in IT leadership roles for retailers such as FEDCO and MacFrugal’s. Ms. Faginas-Cody holds an MBA from the University of California-Irvine and a bachelor’s degree in economics from California State University-Fullerton. With more than 40 years of experience in Information Technology, Ms. Faginas-Cody is well-qualified to serve on our Board.

Deborah Gonzalez has been a director since December 2021. Ms. Gonzalez brings over 30 years of brand marketing experience to our Board. Ms. Gonzalez currently serves as Senior Vice President, Global Marketing & Communications for Concentrix Corporation, a leading global provider of customer experience solutions and technology, a position she has held since 2020. In this role, she oversees all aspects of brand and integrated marketing, digital marketing, communications, and public relations. Previously, Ms. Gonzalez held senior leadership positions in diverse industries, such as Senior Partner for CMO Consulting Group from 2018 to 2020, Chief Brand/Marketing Officer for Massage Envy Franchising from 2014 to 2018 and various senior leadership roles at PetSmart, Inc. from 2002 to 2014, including Vice President, Merchandising Marketing. Ms. Gonzalez holds an MBA from Thunderbird School of Global Management and a bachelor’s degree in business economics from University of San Diego. With Ms. Gonzalez’s specific expertise in building brands and delivering marketing programs that help grow demand and loyalty with a focus on customer experience, she is well-qualified to serve on our Board.

There are no family relationships between any director, executive officer, or person nominated or chosen to become a director or executive officer of the Company, and there are no arrangements or understandings between any director or nominee and any other person pursuant to which such individual was or is selected as a director or nominee.

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PROPOSAL 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board has appointed BDO USA, P.C., as our independent registered public accounting firm for 2024. BDO USA, P.C. has served in this capacity since 2011.

We ask that you ratify this appointment. Rules of the SEC and The Nasdaq Stock Market LLC (“Nasdaq”) require our Audit Committee to engage, retain, and supervise our independent registered public accounting firm. However, while stockholder ratification of the appointment of BDO USA, P.C., as our independent registered public accounting firm is not required by our bylaws or otherwise, we think that stockholder ratification of our independent registered public accounting firm is important to stockholders and is a matter of good corporate governance. If the stockholders fail to ratify the appointment, the Audit Committee may reconsider whether to retain BDO USA, P.C. Even if the appointment is ratified, the Audit Committee, in its discretion, may appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and our stockholders.

We expect that representatives of BDO USA, P.C. will be present at the meeting, that they will have the opportunity to make a statement if they so desire, and that they will be available to respond to appropriate questions.

Pursuant to our Audit Committee’s charter, our Audit Committee is responsible for overseeing our accounting and financial reporting processes, and for overseeing our audits. The Audit Committee is responsible for appointing, retaining, determining the compensation of, evaluating, and terminating our independent registered public accounting firm. The Audit Committee is also responsible for establishing and maintaining guidelines for the retention of our independent registered public accounting firm for any non-audit services and for the fees for those services, and for determining procedures to approve audit and non-audit services in advance. Pursuant to our Audit Committee’s Charter, the Audit Committee shall pre-approve any audit or non-audit services provided to us by our independent registered public accounting firm as required by applicable laws and listing standards. In addition, the Audit Committee may delegate the pre-approval of permissible non-audit services to one or more of its members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.

The Audit Committee pre-approved all audit and permitted non-audit services provided by BDO USA, P.C. during fiscal 2023 and fiscal 2022 in accordance with the foregoing pre-approval policy.

The following table sets forth fees billed by BDO USA, P.C., for the audit of our annual financial statements and other services rendered for the periods presented:

    

Fiscal 2023

    

Fiscal 2022

Audit Fees (1)

$

585,146

$

658,015

Audit-Related Fees (2)

$

21,720

$

20,250

Total

$

606,866

$

678,265

(1)Audits of our annual financial statements, reviews of quarterly financial statements, and services that are normally provided by independent accountants in connection with statutory and regulatory filings or engagements, including reviews of SEC filings and our Franchise Disclosure Document.
(2)Audit-related fees consist of the audit of our 401(k) plan.

You may vote “FOR” or “AGAINST” or “ABSTAIN” on the ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm for 2024. This proposal shall be approved if it receives the affirmative vote of a majority of the shares of common stock present in person or represented at the annual meeting and entitled to vote on this proposal.

The Board recommends that you vote “FOR” the ratification of the appointment of BDO USA, P.C. as our independent registered public accounting firm for 2024.

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AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed our fiscal 2023 audited financial statements with management.

The Audit Committee has discussed with BDO USA, P.C., our independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC.

The Audit Committee has received the written disclosures and the letter from BDO USA, P.C. required by applicable requirements of the Public Company Accounting Oversight Board regarding BDO USA, P.C.’s communications with the Audit Committee concerning independence, and it has discussed with BDO USA, P.C. the firm’s independence.

Based on these reviews and discussions, the Audit Committee recommended to the Board that our audited financial statements be included in our annual report on Form 10-K for 2023 for filing with the SEC.

Respectfully submitted,

Carol “Lili” Lynton

Samuel N. Borgese

Mark Buller

Nancy Faginas-Cody

The foregoing report of the Audit Committee is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date of this proxy statement and irrespective of any general incorporation language in such filing.

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PROPOSAL 3 AMENDMENT OF OUR CERTIFICATE OF INCORPORATION TO PROVIDE FOR EXCULPATION OF CERTAIN OFFICERS

We are asking our shareholders to vote to approve a proposal to amend our Amended and Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) to provide for exculpation of certain officers of the Company as permitted by recent amendments to Delaware law (the “Exculpation Amendment”).

As part of its review of our corporate governance standards and practices, the Board concluded that adopting the Exculpation Amendment to provide for exculpation of certain officers of the Company would help improve the Company’s flexibility in response to time-sensitive opportunities and challenges, as well as talent retention among top officers, and on January 25, 2024, the Board unanimously adopted a resolution declaring it advisable to approve the Exculpation Amendment. If approved by the shareholders at the annual meeting, the Company would file an Amended and Restated Certificate of Incorporation of the Corporation (the “Amended and Restated Certificate of Incorporation”) containing the Exculpation Amendment, a copy of which is attached as Appendix B to this proxy statement, with the Delaware Secretary of State.

Effective August 1, 2022, Section 102(b)(7) of the General Corporation Law of the State of Delaware (“DGCL”) was amended to authorize corporations to adopt a provision in their certificate of incorporation to eliminate or limit monetary liability of certain corporate officers for breach of the fiduciary duty of care. Previously, the DGCL allowed only exculpation of directors for breach of the fiduciary duty of care. As amended, Section 102(b)(7) of the DGCL authorizes corporations to provide for exculpation of the following officers: (i) the corporation’s president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer, (ii) “named executive officers” identified in the corporation’s SEC filings, and (iii) other individuals who have agreed to be identified as officers of the corporation.

Section 102(b)(7) of the DGCL, as amended, only permits, and the Exculpation Amendment would only permit, the exculpation of certain officers in connection with direct claims brought by shareholders, including class actions, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the Company itself or for derivative claims brought by shareholders in the name of the Company. In addition, as is currently the case with directors under the Certificate of Incorporation, the Exculpation Amendment would not limit the liability of officers for any breach of the duty of loyalty to the Company or its shareholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law and any transaction from which the officer derived an improper personal benefit. Article SIXTH of the Certificate of Incorporation currently provides for the exculpation of directors but does not include a provision that allows for the exculpation of officers.

The Board believes it is important to provide protection from certain liabilities and expenses that may discourage prospective or current officers from accepting or continuing service with corporations. As with directors, officers frequently must make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits, or proceedings seeking to impose liability on the basis of hindsight. This is especially the case in the current litigious environment where shareholder plaintiffs have employed a tactic of bringing certain claims against officers that would otherwise be exculpated if brought against directors to avoid dismissal of such claims. The Exculpation Amendment would align the protections for our officers with those protections currently afforded to our directors.

In addition, the Board believes the Exculpation Amendment would better position the Company to attract top officer candidates. In the absence of this exculpatory protection, qualified officers might be deterred from serving as officers due to exposure to personal liability and the risk that substantial expense will be incurred in defending lawsuits, regardless of merit. Some of our peers have already adopted, and we expect that other peers of ours will adopt, exculpation clauses that limit the personal liability of officers in their certificates of incorporation, and failing to adopt the Exculpation Amendment could impact our ability to recruit and retain exceptional officer candidates who could conclude that the potential exposure to liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Company.

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The Board also took into account the narrow class and type of claims from which such officers would be exculpated from liability pursuant to Section 102(b)(7) of the DGCL, the limited number of our officers that would be impacted, and the benefits the Board believes would accrue to the Company by providing exculpation in accordance with Section 102(b)(7) of the DGCL, including the ability to further enable our officers to best exercise their business judgment in furtherance of shareholders’ interests. Given these considerations, our Board has determined that it is in the best interests of the Company to adopt the proposed Exculpation Amendment.

The proposed Exculpation Amendment, if it is approved by our shareholders and becomes effective, would be in addition to a provision in Article SIXTH of our Certificate of Incorporation, which, as discussed above, currently provides for the exculpation of directors, and would extend the exculpation provision to certain of our officers as permitted by Section 102(b)(7) of the DGCL, as amended.  

Proposed Amendment

The proposed Exculpation Amendment will amend and restate the Certificate of Incorporation to add a new Article SEVENTEENTH as follows:

SEVENTEENTH: No officer shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of any fiduciary duty as an officer of the Corporation, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL. If the DGCL is amended hereafter to authorize the further elimination or limitation of the liability of officers, then the liability of an officer of the Corporation shall be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or modification of this Article SEVENTEENTH shall not adversely affect any right or protection of an officer of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

The affirmative vote of the holders of a majority of the outstanding common stock entitled to vote thereon is required to approve and adopt the proposed Exculpation Amendment. If this proposal to amend the Certificate of Incorporation is approved and adopted by our shareholders, we will file the Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware shortly after the annual meeting that includes the above-described proposed amendment. The Board may, at any time prior to effectiveness, abandon the proposed Exculpation Amendment without further action by the shareholders or the Board (even if the requisite shareholder vote is obtained). If the Exculpation Amendment is not approved by shareholders, the Amended and Restated Certificate of Incorporation will not be filed and no changes to the Certificate of Amendment will be implemented or become effective.

The Board recommends that you vote “FOR” the proposal to amend
the Certificate of Incorporation to provide for the exculpation of certain officers.

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PROPOSAL 4: ADVISORY VOTE TO APPROVE THE COMPENSATION OF NAMED EXECUTIVE OFFICERS

The Board believes that the Company’s long-term success depends in large measure on the talents of its employees. The Company’s compensation system plays a significant role in its ability to attract, retain and motivate the highest quality workforce. The Board believes that the Company’s current compensation program directly links executive compensation to performance, aligning the interests of the Company’s executive officers with those of its stockholders. The Board endorses the Company’s executive compensation program and encourages stockholders to review the Compensation, Discussion and Analysis, tables and other disclosures included under the Section entitled “Compensation Discussion and Analysis” and “Executive Compensation Tables” of this proxy statement.

Section 14A of the Exchange Act requires that the Company periodically submit to the stockholders for an advisory vote a resolution to approve the compensation of its named executive officers (“NEOs”) as described in this proxy statement, commonly referred to as a “say-on-pay” resolution.

The Board recommends that the stockholders vote “FOR” the following resolution:

RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s proxy statement for the 2024 annual meeting pursuant to the compensation disclosure rules of the United States Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosures).”

You may vote “FOR” or “AGAINST” or “ABSTAIN” on the approval, on an advisory (non-binding) basis, of the compensation of our NEOs. This proposal shall be approved if it receives the affirmative vote of a majority of the shares of common stock present in person or represented at the annual meeting and entitled to vote on this proposal. This is a non-binding advisory vote and, therefore, its outcome does not mandate any particular action. However, our Board and our Compensation Committee will carefully consider the outcome of this vote when making future decisions regarding the compensation of our NEOs. We will hold our next advisory vote to approve the compensation of our named executive officers at the 2025 annual meeting of stockholders.

The Board recommends that you vote “FOR” the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers.

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PROPOSAL 5: APPROVAL OF AMENDMENT TO OUR EQUITY INCENTIVE PLAN

General

The Company’s long-term incentive compensation program is implemented under the El Pollo Loco Holdings, Inc. Equity Incentive Plan (the “Equity Incentive Plan”). The Equity Incentive Plan emphasizes achievement of long-term performance and stockholders value creation.

On March 5, 2024, our Board approved amending the Equity Incentive Plan, subject to stockholder approval. At the annual meeting, we are asking our stockholders to approve the following amendments set forth in the amended and restated Equity Incentive Plan:

Increase in Aggregate Share Limit. The Equity Incentive Plan currently limits the aggregate number of shares of the Company’s common stock that may be delivered pursuant to all awards granted under the Equity Incentive Plan to 2,000,000 shares, plus the number of shares of common stock reserved, but unissued under our 2014 Omnibus Equity Incentive Plan (the “Prior Plan”) at the time the Equity Incentive Plan was originally approved. The proposed amendment would increase this limit by an additional 1,250,000 shares so that the new aggregate share limit for the Equity Incentive Plan would be 3,250,000 shares, plus the number of shares of common stock reserved, but unissued under the Prior Plan at the time the Equity Incentive Plan was originally approved. The proposed amendments would also increase the limit on the number of shares that may be delivered pursuant to “incentive stock options” granted under the Equity Incentive Plan by 1,250,000 shares for a new limit of 3,250,000 incentive stock options. For purposes of clarity, any shares that are delivered pursuant to incentive stock options also count against (and are not in addition to) the aggregate Equity Incentive Plan share limit described above.

Extension of Plan Term. The Equity Incentive Plan is currently scheduled to expire on June 8, 2031. The proposed amendments would extend our ability to grant new awards under the Equity Incentive Plan until May 28, 2034.

As of March 31, 2024, a total of 1,292,317 shares of the Company’s common stock were then subject to outstanding awards granted under the Equity Incentive Plan, and only 670,036 shares of the Company’s common stock were then available for new award grants under the Equity Incentive Plan (assuming that all outstanding performance-based awards are paid-out at the maximum performance level). The proposed amendments would increase the reserved shares under the Equity Incentive Plan by 1,250,000 shares. Based solely on the closing price of the Company’s common shares as reported by the NASDAQ Stock Market on March 31, 2024, the maximum aggregate market value of the additional 1,250,000 new shares that could be issued under the Equity Incentive Plan is approximately $12,175,000.

The Company believes that incentives and stock-based awards focus employees on the objective of creating stockholder value and promoting the success of the Company, and that incentive compensation plans like the Equity Incentive Plan are an important attraction, retention and motivation tool for participants in the plan. Our Board believes that the number of shares currently available under the Equity Incentive Plan does not give the Company sufficient authority and flexibility to adequately provide for future incentives. Our Board believes that the additional shares give the Company greater flexibility to structure future incentives and better attract, retain and award key employees.

If stockholders do not approve this proposal, the current share limits under, and the other terms and conditions of, the Equity Incentive Plan will continue in effect.

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Summary Description of the Equity Incentive Plan

The principal terms of the Equity Incentive Plan are summarized below. The following summary is qualified in its entirety by the full text of the Equity Incentive Plan which is set forth in Appendix C hereto.

Types of Awards. The Equity Incentive Plan provides for the issuance of options, share appreciation rights (“SARs”), restricted shares, restricted stock units (“RSUs”), other share-based awards and cash awards to our officers, employees, directors, independent contractors and consultants.

As of March 31, 2024, approximately 47 officers and employees of the Company (including all of the named executive officers) and each of the eight non-employee directors serving on our Board were considered eligible under the Equity Incentive Plan.

Shares Available; Certain Limitations.  The maximum number of shares of common stock reserved and available for issuance under the Equity Incentive Plan is equal to the sum of (i) 3,250,000 shares of common stock and (ii) the number of shares of common stock reserved, but unissued under the Prior Plan upon the original effective date of the Equity Incentive Plan, provided that shares of common stock issued under the Equity Incentive Plan with respect to an Exempt Award will not count against the share limit.  We use the term “Exempt Award” to mean (i) an award granted in the assumption of, or in substitution for, outstanding awards previously granted by another business entity acquired by us or any of our subsidiaries or with which we or any of our subsidiaries merges, (ii) an “employment inducement” award as described in the applicable stock exchange listing manual or (iii) an award that a participant purchases at fair market value. If stockholders approve this proposal, the maximum number of common shares that may be delivered pursuant to awards under the Equity Incentive Plan will be 3,250,000 shares (the “Share Limit”), plus the number of shares of common stock reserved, but unissued, under the Prior Plan upon the original effective date of the Equity Incentive Plan, an increase of 1,250,000 additional shares.

New shares reserved for issuance under the Equity Incentive Plan may be authorized but unissued shares or shares that will have been or may be reacquired by the Company in the open market, in private transactions or otherwise.  Shares of common stock subject to an award under the Equity Incentive Plan that remain unissued upon the cancellation or termination of the award will again become available for grant under the Equity Incentive Plan.  However, shares of common stock that are surrendered by a participant or withheld as payment of the exercise price in connection with any award under the Equity Incentive Plan, as well as any shares of common stock exchanged by a participant or withheld to satisfy tax withholding obligations related to any award, will not be available for subsequent awards under the Equity Incentive Plan. If an award is denominated in shares, but settled in cash, the number of shares of common stock previously subject to the award will again be available for grants under the Equity Incentive Plan.  If an award can only be settled in cash, it will not be counted against the total number of shares of common stock available for grant under the Equity Incentive Plan. However, upon the exercise of any award granted in tandem with any other awards, such related awards will be cancelled as to the number of shares as to which the award is exercised and such number of shares will no longer be available for grant under the Equity Incentive Plan.

Any shares of common stock repurchased with the proceeds of any option exercise price shall not be available for awards under the Equity Incentive Plan. No non-employee director of the Company will be granted awards during any calendar year that, when aggregated with such non-employee director’s cash fees for that calendar year, exceed $500,000 in total value, with cash-based awards and cash fees measured for this purpose at their value upon payment and any equity-based awards measured for this purpose at their grant date fair value as determined for the Company’s financial reporting purposes.  In addition, any awards granted under the Equity Incentive Plan (other than awards representing a maximum of 5% of the shares reserved for issuance under the Equity Incentive Plan) will be granted subject to a minimum vesting period of at least 12 months, subject to acceleration in connection with a change in control, as discussed below.

The current limit on the number of shares that may be issued pursuant to the exercise of incentive stock options is 1,820,477. If stockholders approve this proposal, the incentive stock option limit will increase to 3,070,477.

Administration. The Equity Incentive Plan will be administered by our Board, or if our Board does not administer the Equity Incentive Plan, a committee of our Board that complies with the applicable requirements of

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Section 16 of the Exchange Act and any other applicable legal or stock exchange listing requirements (each of our Board or such committee, the “plan administrator”). The plan administrator may interpret the Equity Incentive Plan and may prescribe, amend and rescind rules and make all other determinations necessary or desirable for the administration of the Equity Incentive Plan.

The Equity Incentive Plan permits the plan administrator to select the eligible recipients who will receive awards, to determine the terms and conditions of those awards, including but not limited to the exercise price or other purchase price of an award, the number of shares of common stock or cash or other property subject to an award, the term of an award and the vesting schedule applicable to an award, and to amend the terms and conditions of outstanding awards.

No Repricing. In no case (except due to an adjustment to reflect a stock split or other event referred to under “Equitable Adjustments” below, or any repricing that may be approved by stockholders) will the Administrator (1) amend an outstanding stock option or stock appreciation right to reduce the exercise price or base price of the award, (2) cancel, exchange, or surrender an outstanding stock option or stock appreciation right in exchange for cash or other awards for the purpose of repricing the award, or (3) cancel, exchange, or surrender an outstanding stock option or stock appreciation right in exchange for an option or stock appreciation right with an exercise or base price that is less than the exercise or base price of the original award.

Restricted Shares and RSUs. Restricted shares and RSUs may be granted under the Equity Incentive Plan. The plan administrator will determine the purchase price, vesting schedule and performance goals, if any, applicable to the grant of restricted shares and RSUs. Unless otherwise determined by the plan administrator, if the restrictions, performance goals or other conditions determined by the plan administrator are not satisfied, the restricted shares and RSUs will be forfeited. Subject to the provisions of the Equity Incentive Plan and the applicable individual award agreement, the plan administrator has the sole discretion to provide for the lapse of restrictions in installments or the acceleration or waiver of restrictions (in whole or part) under certain circumstances, including the attainment of certain performance goals, a participant’s termination of employment or service or a participant’s death or disability. The rights of restricted share and RSU holders upon a termination of employment or service will be set forth in individual award agreements.

Unless the applicable award agreement provides otherwise, participants with restricted shares will generally have all of the rights of a stockholder during the restricted period, including the right to receive dividends declared with respect to such shares; provided, however, that dividends declared during the restricted period with respect to an award will only become payable if (and to the extent) that the underlying restricted shares vest. During the restricted period, participants with RSUs will generally not have any rights of a stockholder, but will be credited with dividend equivalent rights, unless the applicable individual award agreement provides otherwise. Any dividend equivalent rights will only become payable if (and to the extent) that the underlying RSUs vest.

Options. We may issue non-qualified stock options and incentive stock options (“ISOs”) (within the meaning of Section 422 of the Code) under the Equity Incentive Plan. The terms and conditions of any options granted to a participant will be set forth in an award agreement and, subject to the provisions in the Equity Incentive Plan, will be determined by the plan administrator. The exercise price of any option granted under our Equity Incentive Plan must be at least equal to the fair market value of our common stock on the date the option is granted (110% of fair market value in the case of ISOs granted to ten percent stockholders). The maximum term of an option granted under our Equity Incentive Plan is ten years (five years in the case of ISOs granted to ten percent stockholders). The amount of incentive stock options that become exercisable for the first time in a particular year cannot exceed a value of $100,000 per participant, determined using the fair market value of the shares on the date of grant.

Subject to our Equity Incentive Plan, the plan administrator will determine the vesting and other terms and conditions of options granted under our Equity Incentive Plan and the plan administrator will have the authority to accelerate the vesting of any option in its sole discretion. Treatment of an option upon termination of employment of a participant will be provided for by the plan administrator in the applicable award agreement.

Share Appreciation Rights. SARs may be granted under the Equity Incentive Plan either alone or in conjunction with all or part of any option granted under the Equity Incentive Plan. A free-standing SAR granted under

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the Equity Incentive Plan entitles its holder to receive, at the time of exercise, an amount per share up to the excess of the fair market value (at the date of exercise) of a share of common stock over the exercise price of the free-standing SAR multiplied by the number of shares in respect of which the SAR is being exercised. A SAR granted in conjunction with all or part of an option under the Equity Incentive Plan entitles its holder to receive, at the time of exercise of the SAR and surrender of the related option, an amount per share up to the excess of the fair market value (at the date of exercise) of a share of common stock over the exercise price of the related option multiplied by the number of shares in respect of which the SAR is being exercised.  Each SAR will be granted with an exercise price that is not less than 100% of the fair market value of the related shares of common stock on the date of grant. Treatment of a SAR upon termination of employment of a participant will be provided for by the plan administrator in the applicable award agreement. The maximum term of all SARs granted under the Equity Incentive Plan will be determined by the plan administrator, but may not exceed ten years.  The plan administrator may determine to settle the exercise of an SAR in shares of common stock, cash, or any combination thereof.

Each free-standing SAR will vest and become exercisable (including in the event of the SAR holder’s termination of employment or service) at such time and subject to such terms and conditions as determined by the plan administrator in the applicable individual free-standing SAR agreement.  SARs granted in conjunction with all or part of an option will be exercisable at such times and subject to all of the terms and conditions applicable to the related option.

Other Share-Based Awards.  Other share-based awards, valued in whole or in part by reference to, or otherwise based on, shares of common stock (including dividend equivalents) may be granted under the Equity Incentive Plan. The plan administrator will determine the terms and conditions of such other share-based awards, including the number of shares of common stock to be granted pursuant to such other share-based awards, the manner in which such other share-based awards will be settled (e.g., in shares of common stock, cash or other property), and the conditions to the vesting and payment of such other share-based awards (including the achievement of performance goals).  The rights of participants granted other share-based awards upon the termination of employment with or service to us will be set forth in the award agreement.  Any dividend or dividend-equivalent award issued under the Equity Incentive Plan will be subject to the same restrictions and conditions as apply to the underlying award.

Cash Awards.  Bonuses that are payable solely in cash may also be granted under the Equity Incentive Plan and may be granted contingent upon the achievement of performance goals. The rights of participants granted cash awards upon the termination of employment with or service to us will be set forth in the applicable award agreement.

Equitable Adjustments.  In the event of a merger, amalgamation, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase, reorganization, special or extraordinary dividend or other extraordinary distribution (whether in the form of common shares, cash or other property), combination, exchange of shares, or other change in corporate structure affecting our common stock, an equitable substitution or proportionate adjustment shall be made in (i) the aggregate number and kind of securities reserved for issuance under the Equity Incentive Plan, (ii) the kind and number of securities subject to, and the exercise price of, any outstanding options and SARs granted under the Equity Incentive Plan, (iii) the kind, number and purchase price of shares of common stock, or the amount of cash or amount or type of property, subject to outstanding restricted shares, RSUs and other share-based awards granted under the Equity Incentive Plan and (iv) the terms and conditions of any outstanding awards (including any applicable performance targets).  Equitable substitutions or adjustments other than those listed above may also be made as determined by the plan administrator.  In addition, the plan administrator may terminate all outstanding awards for the payment of cash or in-kind consideration having an aggregate fair market value equal to the excess of the fair market value of the shares of common stock, cash or other property covered by such awards over the aggregate exercise price, if any, of such awards, but if the exercise price of any outstanding award is equal to or greater than the fair market value of the shares of common stock, cash or other property covered by such award, our Board may cancel the award without the payment of any consideration to the participant.  With respect to awards subject to foreign laws, adjustments will be made in compliance with applicable requirements.  Except to the extent determined by the plan administrator, adjustments to incentive stock options will be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code.

Change in Control and Qualifying Termination.  Unless otherwise determined by the plan administrator and evidenced in an award agreement, in the event that (i) a “change in control” (as defined below) occurs and (ii) a

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participant’s employment or service is terminated by us or any of our successors or affiliates without cause or by the participant for good reason (if applicable) within 12 months following the change in control, then (a) any unvested or unexercisable portion of any award carrying a right to exercise will become fully vested and exercisable, and (b) the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to any award will lapse and such unvested awards will be deemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved at target performance levels.

In connection with a “change in control,” the Administrator may provide, in its sole discretion, but subject in all events to the requirements of Section 409A of the Code, for the cancellation of any outstanding award granted under the Equity Incentive Plan in exchange for payment in cash or other property having an aggregate fair market value equal to the fair market value of the shares, cash or other property covered by such Award, reduced by the aggregate exercise price or purchase price thereof, if any; provided, however, that if the exercise price or purchase price of any outstanding award is equal to or greater than the fair market value of the shares of the common stock, cash or other property covered by such award, the Administrator may cancel such award without the payment of any consideration to the participant.

Definition of Change in Control. For purposes of the Equity Incentive Plan, a “change in control” will mean, in summary, the first to occur of the following events: (i) a person or entity becomes the beneficial owner of more than 50% of our voting power; (ii) an unapproved change in the majority membership of our Board; (iii) a merger or consolidation of us or any of our subsidiaries, other than (A) a merger or consolidation that results in our voting securities continuing to represent 50% or more of the combined voting power of the surviving entity or its parent and our Board immediately prior to the merger or consolidation continuing to represent at least a majority of the board of directors of the surviving entity or its parent or (B) a merger or consolidation effected to implement a recapitalization in which no person is or becomes the owner of our voting securities representing more than 50% of our combined voting power; or (iv) stockholder approval of a plan of complete liquidation or dissolution of us or the consummation of an agreement for the sale or disposition of substantially all of our assets, other than a sale or disposition to an entity, more than 50% of the combined voting power of which is owned by our stockholders in substantially the same proportions as their ownership of us immediately prior to such sale or a sale or disposition to an entity controlled by our Board.  However, a change in control will not be deemed to have occurred as a result of any transaction or series of integrated transactions following which our stockholders, immediately prior thereto, hold immediately afterward the same proportionate equity interests in the entity that owns all or substantially all of our assets.

Tax Withholding. Each participant will be required to make arrangements satisfactory to the plan administrator regarding payment of up to the maximum statutory tax rates in the participant’s applicable jurisdiction with respect to any award granted under the Equity Incentive Plan, as determined by the Company.  We have the right, to the extent permitted by applicable law, to deduct any such taxes from any payment of any kind otherwise due to the participant.  With the approval of the plan administrator, the participant may satisfy the foregoing requirement by either electing to have us withhold from delivery of shares of common stock, cash or other property, as applicable, or by delivering already owned unrestricted shares of common stock, in each case, having a value not exceeding the applicable taxes to be withheld and applied to the tax obligations.  We may also use any other method of obtaining the necessary payment or proceeds, as permitted by applicable law, to satisfy our withholding obligation with respect to any award.

Amendment and Termination of the Equity Incentive Plan. The Equity Incentive Plan provides our Board with authority to amend, alter or terminate the Equity Incentive Plan, but no such action may impair the rights of any participant with respect to outstanding awards without the participant’s consent. The plan administrator may amend an award, prospectively or retroactively, but no such amendment may materially impair the rights of any participant without the participant’s consent.  Stockholder approval of any such action will be obtained if required to comply with applicable law.

Equity Incentive Plan Term. The Equity Incentive Plan will terminate on June 8, 2031 (although awards granted before that time will remain outstanding in accordance with their terms). If stockholders approve this proposal, the Equity Incentive Plan will be extended and will terminate on May 28, 2034.

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Clawback.  The awards granted under the Equity Incentive Plan are subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of awards or any shares of Common Stock or other cash or property received with respect to the awards (including any value received from a disposition of the shares acquired upon payment of the awards).

Indemnification. To the extent allowable pursuant to applicable law, each member of our Board and the plan administrator and any officer or other employee to whom authority to administer any component of the Equity Incentive Plan is delegated shall be indemnified and held harmless by the Company from any loss or expense that may be reasonably incurred by such member in connection with any claim, action or proceeding in which he or she may be involved by reason of any action or failure to act pursuant to the Equity Incentive Plan and against all amounts paid by him or her in satisfaction of judgment in such claim, action or proceeding against him or her, provided, however, that he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.

U.S. Federal Income Tax Consequences of Awards under the Equity Incentive Plan

The U.S. federal income tax consequences of the Equity Incentive Plan under current federal law, which is subject to change, are summarized in the following discussion of the general tax principles applicable to the Equity Incentive Plan.  This summary is not intended to be exhaustive and, among other considerations, does not describe the deferred compensation provisions of Section 409A of the U.S. Internal Revenue Code to the extent an award is subject to and does not satisfy those rules, nor does it describe state, local, or international tax consequences.

With respect to nonqualified stock options, the company is generally entitled to deduct and the participant recognizes taxable income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise.  With respect to incentive stock options, the company is generally not entitled to a deduction nor does the participant recognize income at the time of exercise, although the participant may be subject to the U.S. federal alternative minimum tax.

The current federal income tax consequences of other awards authorized under the Equity Incentive Plan generally follow certain basic patterns: nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid (if any) only at the time the restrictions lapse (unless the recipient elects to accelerate recognition as of the date of grant); bonuses, stock appreciation rights, cash and stock-based performance awards, dividend equivalents, stock units, and other types of awards are generally subject to tax at the time of payment; and compensation otherwise effectively deferred is taxed when paid.  In each of the foregoing cases, the company will generally have a corresponding deduction at the time the participant recognizes income.

If an award is accelerated under the Equity Incentive Plan in connection with a “change in control” (as this term is used under the U.S. Internal Revenue Code), the Company may not be permitted to deduct the portion of the compensation attributable to the acceleration (“parachute payments”) if it exceeds certain threshold limits under the U.S. Internal Revenue Code (and certain related excise taxes may be triggered). Furthermore, under Section 162(m) of the Code, the aggregate compensation in excess of $1,000,000 payable to current or former named executive officers (including amounts attributable to equity-based and other incentive awards) may not be deductible by the Company in certain circumstances.

Specific Benefits under the Equity Incentive Plan

The Company has not approved any awards that are conditioned upon stockholder approval of the amendment to the Equity Incentive Plan. The Company is not currently considering any other specific award grants under the Equity Incentive Plan. If the proposed amendments to the Equity Incentive Plan had been in existence in fiscal 2023, the Company expects that its award grants for fiscal 2023 would not have been substantially different from those actually made in that year under the Equity Incentive Plan.  For information regarding stock-based awards granted to our named executive officers during fiscal 2023, see the material under the heading “Elements of Executive Compensation” below.

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The following paragraphs include additional information to help you assess the potential dilutive impact of the Company’s equity awards and the Equity Incentive Plan.

“Overhang” refers to the number of shares of the Company’s common stock that are subject to outstanding awards or remain available for new award grants. The following table shows the total number of shares of the Company’s common stock that were subject to outstanding restricted stock and restricted stock unit awards granted under the Equity Incentive Plan and Prior Plan, that were subject to outstanding stock options granted under the Equity Incentive Plan and Prior Plan, and that were then available for new award grants under the Equity Incentive Plan as of December 31, 2023 and as of March 31, 2024. (In this proposal, the number of shares of the Company’s common stock subject to restricted stock and restricted stock unit awards granted during any particular period or outstanding on any particular date is presented based on the actual number of shares of the Company’s common stock covered by those awards. For awards subject to performance-based vesting requirements, the number of shares presented is based on the maximum level of performance.)

As of December 31, 2023

As of March 31, 2024 [

Shares subject to outstanding restricted stock and restricted stock unit awards (excluding performance-based vesting awards)

537,461

500,152

Shares subject to outstanding performance-based vesting restricted stock and restricted stock unit awards

Shares subject to outstanding stock options (excluding performance-based vesting options)

843,320

792,165

Shares subject to outstanding performance-based vesting options

Shares available for new award grants

610,098

670,036

Other than the Equity Incentive Plan and the Prior Plan, we do not have any other compensatory plans or arrangements in place under which shares of the Company’s common stock are eligible to be awarded or under which there are outstanding awards with respect to shares of the Company’s common stock. No new awards may be granted under the Prior Plan.

The weighted-average number of shares of the Company’s common stock issued and outstanding in each of the last three fiscal years was 35,973,892 shares issued and outstanding in 2021; 36,350,579 shares issued and outstanding in 2022; and 34,253,542 shares issued and outstanding in 2023. The number of shares of the Company’s common stock issued and outstanding as of December 31, 2023 and March 31, 2024 was 31,353,223 and 31,183,427 shares, respectively.

“Burn rate” refers to the number of shares that are subject to awards that we grant over a particular period of time. The total number of shares of the Company’s common stock subject to awards that the Company granted under the Equity Incentive Plan and Prior Plan in each of the last three fiscal years, and to date (as of March 31, 2024) for 2024, are as follows:

478,913 shares in 2021 (which was 1.3% of the weighted-average number of shares of the Company’s common stock issued and outstanding in 2021), of which 222,741 shares were subject to

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restricted stock and restricted stock unit awards (excluding performance-based vesting awards) and 256,172 shares were subject to stock options (excluding performance-based vesting options);
729,568 shares in 2022 (which was 2.0% of the weighted-average number of shares of the Company’s common stock issued and outstanding in 2022), of which 356,610 shares were subject to restricted stock and restricted stock unit awards (excluding performance-based vesting awards), and 372,958 shares were subject to stock options (excluding performance-based vesting options);
1,016,425 shares in 2023 (which was 3.0% of the weighted-average number of shares of the Company’s common stock issued and outstanding in 2023), of which 454,081 shares were subject to restricted stock and restricted stock unit awards (excluding performance-based vesting awards) and 562,344 were subject to stock options (excluding performance-based vesting options).

Thus, the total number of shares of the Company’s common stock subject to awards granted under the Equity Incentive Plan and Prior Plan per year over the last three fiscal years (2021, 2022 and 2023) has been, on average, 2.1% of the weighted-average number of shares of the Company’s common stock issued and outstanding for the corresponding year. Performance-based vesting awards have been included above in the year in which the award was granted.

The total number of shares of our common stock that were subject to awards granted under the Equity Incentive Plan that terminated or expired, and thus became available for new award grants under the Equity Incentive Plan, in each of the last three fiscal years, and to date (as of March 31, 2024) in 2024, are as follows: 397,310 in 2021, 202,926 in 2022, 839,108 in 2023, and 59,938 in 2024. Shares subject to Equity Incentive Plan awards that terminated or expired and became available for new award grants under the Equity Incentive Plan have been included when information is presented in this Equity Incentive Plan proposal on the number of shares available for new award grants under the Equity Incentive Plan.

Our Compensation Committee anticipates that the 1,250,000 additional shares requested for the Equity Incentive Plan (together with the shares available for new award grants under the Equity Incentive Plan on the annual meeting date and assuming usual levels of shares becoming available for new awards as a result of forfeitures of outstanding awards) will provide the Company with flexibility to continue to grant equity awards under the Equity Incentive Plan through approximately the end of 2026 (reserving sufficient shares to cover potential payment of performance-based awards at maximum payment levels). However, this is only an estimate, in the Company’s judgment, based on current circumstances. The total number of shares that are subject to the Company’s award grants in any one year or from year-to-year may change based on a number of variables, including, without limitation, the value of the Company’s common stock (since higher stock prices generally require that fewer shares be issued to produce awards of the same grant date fair value), changes in competitors’ compensation practices or changes in compensation practices in the market generally, changes in the number of employees, changes in the number of directors and officers, whether and the extent to which vesting conditions applicable to equity-based awards are satisfied, acquisition activity and the need to grant awards to new employees in connection with acquisitions, the need to attract, retain and incentivize key talent, the type of awards the Company grants, and how the Company chooses to balance total compensation between cash and equity-based awards.

The closing market price for a share of the Company’s common stock as of March 31, 2024 was $9.74 per share. The Company used the closing market price for a share as of March 28, 2024 due to the stock marker being closed from March 29th through March 31st.

Aggregate Equity Awards Previously Granted Under the Equity Incentive Plan

As of March 31, 2024, awards covering 4,891,732 shares of the Company’s common stock had been granted under the Equity Incentive Plan. (This number of shares includes shares subject to awards that expired or terminated without having been exercised and paid and became available for new award grants under the Equity Incentive Plan.) The following table shows information regarding the distribution of all awards among the persons

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and groups identified below, option exercises and restricted stock unit or other stock awards vesting prior to that date, and option and unvested restricted stock unit or other stock award holdings as of that date.

Option Awards

Stock Awards

    

    

    

    

    

    

Number

Number

Number

of

of

of

Number of

Number of

Shares/

Shares/

Shares/Units

Shares

Shares

Units

Units

Outstanding

Subject to

Acquired

Number of Shares Underlying Options

Subject

Vested

and Unvested

Past Option

On

as of March 31, 2024

to Past

as of

as of

Grants

Exercise

Exercisable

Unexercisable

Awards

March 31, 2024

March 31, 2024

Named Executive Officers:

    

    

    

    

    

    

    

    

    

Maria Hollandsworth
President and Chief Operating Officer

28,802

28,802

41,934

4,496

37,438

Ira Fils
Chief Financial Officer

95,876

95,876

99,392

13,369

86,023

Laurance Roberts
Former Chief Executive Officer

244,809

152,846

265,270

129,126

Total for All Current Executive Officers as a Group (3 persons)

369,487

152,846

124,678

406,596

146,991

123,461

Michael G. Maselli

44,772

25,790

18,982

Samuel N. Borgese

47,635

32,765

14,870

Mark Buller

44,302

29,432

14,870

William R. Floyd

 

47,389

 

27,000

 

20,389

 

Dean C. Kehler

 

24,448

 

14,869

 

 

Carol ("Lili") Lynton

 

41,870

 

27,000

 

14,870

 

Deborah Gonzalez

15,627

1,897

13,730

Nancy Faginas-Cody

15,627

1,897

13,730

Douglass Babb

34,382

19,512

14,870

John M. Roth

 

36,974

 

22,104

 

 

Total for all Current Non-Executive Directors as a Group (10 persons):

 

 

 

353,026

 

202,266

 

126,311

 

Each other person who has received 5% or more of the options, warrants or rights under the Equity Incentive Plan

 

 

 

 

 

All employees, including all current officers who are not executive officers or directors, as a group

625,277

 

222,566

 

292,075

 

409,326

154,193

 

250,931

 

Total

994,764

 

375,412

 

416,753

 

1,168,948

503,450

 

500,703

 

Vote Required for Approval of the Amendments to the Equity Incentive Plan

Our Board believes that adoption of the amendments to the Equity Incentive Plan will promote the interests of the Company and its stockholders and will help the Company and its subsidiaries continue to be able to attract, retain and reward persons important to our success.

All members of our Board and all of the Company’s executive officers are eligible for awards under the Equity Incentive Plan and thus have a personal interest in the approval of the Equity Incentive Plan.

You may vote “FOR” or “AGAINST” or “ABSTAIN” on the approval of the amendments to the Equity Incentive Plan. This proposal shall be approved if it receives the affirmative vote of a majority of the shares of common stock present in person or represented at the annual meeting and entitled to vote on this proposal.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE EQUITY INCENTIVE PLAN AS DESCRIBED ABOVE AND SET FORTH IN APPENDIX C HERETO.

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DIRECTOR COMPENSATION

All non-employee directors received both restricted shares and cash compensation. Any directors who are also our employees do not receive compensation for their service as directors. The following table provides compensation information for fiscal 2023 for each of our non-employee directors.

    

Fees Earned 

    

    

or Paid in 

Stock 

Cash

Awards 

Total

Name

($)

($) (1) (2)

($)

William R. Floyd (3)

$

100,605

$

140,000

$

240,605

Douglas J. Babb

$

71,986

$

90,000

$

161,986

Samuel N. Borgese

$

70,632

$

90,000

$

160,632

Mark Buller

$

72,349

$

90,000

$

162,349

Nancy Faginas-Cody

$

71,868

$

90,000

$

161,868

Deborah Gonzalez

$

65,000

$

90,000

$

155,000

Dean C. Kehler (4)

$

15,000

$

$

15,000

Carol ("Lili") Lynton

$

75,302

$

90,000

$

165,302

Michael G. Maselli (3)

$

75,659

$

90,000

$

165,659

John M. Roth (5)

$

48,750

$

90,000

$

138,750

(1)Represents the grant date fair value of restricted shares granted in 2023, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). Please see Note 11 to our consolidated financial statements in our Annual Report for assumptions made in the valuation of the equity awards.
(2)As of December 27, 2023, MMs/Mme. Maselli, Babb, Borgese, Buller, Floyd, Lynton, Gonzalez and Faginas-Cody had 18,982, 14,870, 14,870, 14,870, 20,389, 14,870, 13,730 and 13,730 unvested restricted shares in the aggregate outstanding, respectively.
(3)Mr. Floyd was elected Chairperson of our Board on April 18, 2023, following Mr. Maselli’s resignation as Chairperson on the same date.
(4)Mr. Kehler resigned from the Board on March 27, 2023, and did not hold any unvested equity awards as of December 27, 2023.
(5)Mr. Roth resigned from the Board on August 16, 2023, and did not hold any unvested equity awards as of December 27, 2023.

Director Compensation Policy

Each non-employee director except for Mr. Floyd, as Chairperson of the Board in 2023, received an annual grant of 9,934 restricted shares, calculated by dividing $90,000 by the closing price of our stock on May 9, 2023. Mr. Floyd, as Chairperson of the Board in 2023, received 15,453 restricted shares, calculated by dividing $140,000 by the closing price of our stock on May 9, 2023. These grants vest in full on the first anniversary of the grant date and accelerate and fully vest upon a termination of the director’s service by the Company without “cause” or due to the director’s death or “disability.”

In addition, each of our non-employee directors except the Chairperson of the Board, received an annual cash retainer fee of $60,000 in 2023, which was paid quarterly. Mr. Floyd, as Chairperson of the Board in 2023, received an annual cash retainer fee of $100,605 in 2023, which was also paid quarterly.

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Also, we provided the following annual fees for non-employee directors for committee service, which were paid quarterly:

Audit Committee chairperson: $15,000
Compensation Committee chairperson: $12,500
Nominating and Corporate Governance Committee chairperson $10,000
All other committee members: $5,000

Stock Ownership Guidelines Applicable to our Non-Employee Directors

Our Board has adopted Stock Ownership Guidelines that require each of our non-employee directors to own shares of our common stock equal in value to five times the annual Board cash retainer. Shares subject to stock options and unvested stock or stock unit awards subject to performance-based vesting are not considered owned for purposes of these guidelines. The non-employee directors are required to be in compliance with the required ownership level within five years from the date such person first becomes subject to the guidelines. Each of the non-employee directors is currently in compliance with the required ownership levels or is within the five-year transition period.

GOVERNANCE OF THE COMPANY

Board Composition

Our certificate of incorporation provides that the number of directors on our Board is to be fixed exclusively pursuant to Board resolution. The exact size of our Board shall be determined from time to time by the Board. Our Board currently consists of nine directors.

Our Board is divided into three classes as set forth below, with each director serving a three-year term and with one class to be elected at each year’s annual meeting of stockholders.

Name

    

Class

    

Term Expires

Michael G. Maselli (1)

I

2024

Deborah Gonzalez

I

2024

Carol (“Lili”) Lynton (1)

I

2024

Elizabeth Williams (2)

I

2024

William R. Floyd

II

2025

Douglas J. Babb

II

2025

Nancy Faginas-Cody

II

2025

Samuel N. Borgese

III

2026

Mark Buller

III

2026

(1)The terms of directors Mr. Maselli and Ms. Lynton will end at the 2024 annual meeting. They will each not be nominees for director and will retire from the Board immediately prior to the 2024 annual meeting.
(2)To provide for director classes that consist, as nearly as may be possible, of one-third of the total number of directors constituting the Board of Directors (i.e., seven at and immediately after the annual meeting), Ms. Williams was appointed to the Board as a Class I director in March 2024 and has been nominated for election as a Class I director at the 2024 annual meeting.

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On March 27, 2023, Dean C. Kehler, a member of our Board since 2005, resigned as a director of the Board. Mr. Kehler’s resignation was in connection with the distribution on March 28, 2023, by Trimaran Pollo Partners L.L.C. (“LLC”) and certain of LLC’s affiliates (collectively, the “Trimaran Group”) of substantially all of the shares of the Company’s common stock held by the Trimaran Group to their respective investors, members and limited partners (the “Distribution”) and planned liquidation of the Trimaran Group. Mr. Kehler is the managing member of Trimaran Capital, L.L.C., which is the managing member of LLC.  On April 21, 2023, the Board resolved to reduce the size of the Board from eleven to ten directors.

On August 16, 2023, John M. Roth resigned as a director of the Board. Mr. Roth was a member of our Board since 2007 and his resignation was in connection with the Company’s previously-announced repurchase of shares of the Company’s common stock from certain affiliates of Freeman Spogli & Co. (“Freeman Spogli”). Mr. Roth is a general partner and the chief executive officer of Freeman Spogli. In connection with Mr. Roth’s resignation, the Board reduced the size of the Board to nine directors.

Effective as of November 3, 2023, Laurance Roberts resigned from his position as Chief Executive Officer and President and as a member of the Board.

We are a party to a stockholders’ agreement with the LLC, whose members are investment funds managed by affiliates of Trimaran Capital Partners (with its predecessors and affiliates and certain funds managed by it, collectively, “Trimaran Capital”) and Freeman Spogli, certain members of our management, and other third-party investors (“Stockholders’ Agreement”). The Stockholders’ Agreement provides certain rights to LLC, including registration rights for common stock owned by LLC. The limited liability company operating agreement of LLC also provided rights to Trimaran Capital and Freeman Spogli, including certain registration rights. See “Certain Relationships and Related Party Transactions – Stockholders Agreement” for additional information. Thus, pursuant to the Stockholders Agreement, the Company filed a registration statement on Form S-3 (File No. 333-269807) (the “Registration Statement”), which was declared effective on March 1, 2023. The Registration Statement registered the resale of up to 16,818,465 shares of the Company’s common stock by the selling stockholders named therein, including LLC, and pursuant to which LLC could sell any of the shares that it continued to hold following the Distribution. As disclosed in the Registration Statement, certain of the selling stockholders named in the Registration Statement were permitted to distribute their shares to their limited partners, general partners, stockholders or others and any subsequent sales were at the new holder’s discretion. The shares distributed in the Distribution are generally freely tradable by the recipients under the Securities Act, following the completion of the Distribution.

On March 28, 2023, Trimaran Group distributed substantially all of the shares of the Company’s common stock held by the Trimaran Group to their respective investors, members and limited partners.

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Board Diversity Matrix

We are committed to creating a diverse and inclusive culture and have furthered these efforts by focusing on increasing diversity, both within our management team as well as on the Board of Directors.

Total Number of Directors

as of April 16, 2024 (1)

7

Female

Male

Part I: Gender Identity

Directors

3

4

Part II: Demographic Background

Hispanic or Latinx

2

0

White

1

4

(1)  Excludes Mr. Maselli and Ms. Lynton, who are not standing for re-election to the Board at the 2024 annual meeting and will retire from the Board immediately prior to the 2024 annual meeting.

Board Leadership Structure

Separate individuals serve as our Chairperson and our Chief Executive Officer. Ms. Williams currently serves as our Chief Executive Officer and Mr. Floyd currently serves as the Chairperson of the Board. We do not have a policy requiring the separation of these positions. Rather, as our corporate governance guidelines explain, the Board is free to choose its Chairperson in any way that it deems best for the Company at any given point in time. Under the circumstances, the Board has determined that having an independent director serve as non-executive Chairperson continues to be in the best interests of our shareholders at this time.  In addition, we currently believe that this separation is appropriate in order to avoid a conflict of interest regarding CEO compensation, to have increased independent oversight of the Board regarding management’s strategic direction and results, and to provide a greater role for non-management director participation than would be the case if the Chairperson and Chief Executive Officer positions were combined.

After serving as Chairperson of our Board for more than eleven years, Mr. Maselli resigned as Chairperson on April 18, 2023 in order to facilitate a transition in Board leadership. On April 18, 2023, the Board elected Mr. Floyd as Chairperson.  Because Mr. Floyd is an independent director, the Board determined that a Lead Independent Director was no longer required.

Code of Business Conduct and Ethics

The Board has adopted a code of business conduct and ethics that applies to our directors, executive officers, and employees, available at http://investor.elpolloloco.com/corporate-governance. We expect that any amendments to the code, or any waivers thereto granted to a director or executive officer requiring disclosure under applicable SEC or Nasdaq rules, will be posted on our website.

Corporate Governance Guidelines

The Board has adopted corporate governance guidelines to assist it in the exercise of its fiduciary duties and responsibilities to us and to promote the effective functioning of the Board and its committees. Our corporate governance guidelines cover, among other topics:

director independence and qualification requirements;
board leadership and executive sessions;
limitations on other board and committee service;
director responsibilities;
director compensation;

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director orientation and continuing education;
board and committee resources, including access to officers and employees;
succession planning; and
board and committee self-evaluations.

Our corporate governance guidelines are available on our website, at http://investor.elpolloloco.com/corporate-governance. We expect that any amendments to the guidelines will be disclosed on our website.

Role in Risk Oversight

The Board oversees a company-wide approach to risk management that is carried out by management, which is designed to enhance stockholder value, support the achievement of strategic objectives and improve long-term organizational performance. The Board determines the appropriate risk levels for the Company generally, assesses the specific risks faced by the Company, and reviews the steps taken by management to manage those risks. The Board’s involvement in setting the Company’s business strategy facilitates these assessments and reviews, culminating in the development of a strategy that reflects both the Board’s and management’s consensus as to appropriate levels of risk and the appropriate measures to manage those risks. Pursuant to this structure, risk is assessed throughout the enterprise, focusing on risks arising out of various aspects of the Company’s strategy and the implementation of that strategy, including financial, legal/compliance, operational/strategic, health and safety, and compensation risks. The Board considers and makes determinations on any action warranted with respect to such risks, which include short-, intermediate- and long-term risks, as well as both existing risks and emerging risks. The Board’s oversight standards apply regardless of the immediacy of the risk assessed. The Board also considers risk when evaluating proposed transactions and other matters presented to the Board, including acquisitions and financial matters. Any director may propose a meeting agenda item related to risk or any other topic for consideration and discussion by the Board.

While the Board maintains ultimate oversight responsibility for the risk management process, its committees oversee risk in specific areas. Our Audit Committee oversees management of risks involving accounting and financial reporting, including internal controls and disclosure controls and procedures. In addition, the Audit Committee oversees the Company’s compliance program with respect to legal and regulatory requirements, including the Company’s codes of conduct and policies and procedures for monitoring compliance. The Audit Committee also receives regular reports on the Company’s cybersecurity compliance and risk management practices. The Audit Committee regularly discusses disclosure controls and procedures, and the resulting assessments and determinations regarding disclosure of risks, with management and with the Board as part of its risk oversight function.

The Compensation Committee periodically reviews compensation practices and policies to determine whether they encourage excessive risk taking, including an annual review of management’s assessment of the risk associated with the Company’s compensation programs covering its employees, including executives. The Compensation Committee also has responsibilities regarding risk related to succession planning. Our Nominating and Corporate Governance Committee oversees management of risks associated with corporate governance and conflicts of interest. At the Board’s instruction, management regularly reports on applicable risks to the Board or to a relevant committee, with additional review or reporting on risks conducted as needed or as requested by the Board and by its committees.

Our Board believes that the process it has established to administer the Board’s risk oversight function would be effective under a variety of leadership frameworks and, therefore, does not have a material effect on our choice of the Board’s leadership structure described above under “Board Leadership Structure.”

Director Independence

Under the applicable listing requirements and rules of Nasdaq, independent directors must comprise a majority of our Board, subject to certain specified exceptions. In addition, applicable Nasdaq rules require that, subject to specified exceptions, each member of our Audit, Compensation and Nominating and Corporate Governance Committees must be independent within the meaning of applicable Nasdaq rules. Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. The Board has reviewed the independence of

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our directors under the applicable rules of Nasdaq. Based on this review, the Board determined that each of Messrs. Babb, Borgese, Buller, Floyd, and Mss. Lynton, Faginas-Cody and Gonzalez are independent under the applicable listing standards of Nasdaq. The Board also previously determined that each of Messrs. Kehler and Roth were independent directors during the periods of their respective service on our Board (until March 2023 and August 2023, respectively). In making these determinations, our Board considered its relationship and other related transactions with each of these non-employee directors and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock held by each non-employee director. Ms. Williams is not an independent director due to serving as our Chief Executive Officer, Mr. Maselli is not an independent director due to his role as Managing Director of a fund affiliated with Freeman Spogli, formerly our largest shareholder, and Mr. Roberts is not an independent director due to serving as our President and Chief Executive Officer.

As required under applicable Nasdaq rules, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. Our independent directors held executive sessions four times in 2023 in conjunction with our Board meetings.

Board Committees

Our Board has established standing committees in connection with the discharge of its responsibilities. These committees include an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. All Audit, Compensation, and Nominating and Corporate Governance Committee members are independent, under applicable Nasdaq listing standards. Our Board has adopted written charters for each of these committees, current copies of which are available at http://investor.elpolloloco.com/corporate-governance. Our Board may establish other committees as it deems necessary or appropriate from time to time.

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The composition of each of our three standing committees is set forth below:

Audit Committee

Compensation Committee

Nominating and Corporate Governance Committee

Douglas J. Babb

C

X

Samuel N. Borgese

X

X

Mark Buller

X

X

Nancy Faginas-Cody

X

C

Deborah Gonzalez

X

Carol Lynton

C

X

Meetings in 2023:

5

7

4

C = Chairperson

Audit Committee

The functions of the Audit Committee, among other things, include:

reviewing our financial statements, including any significant financial items and changes in accounting policies, with our senior management and our independent registered public accounting firm;
reviewing our financial risk and control procedures, our compliance and Environmental, Social and Governance (“ESG”) programs, and significant tax, legal, and regulatory matters;
reviewing and discussing with management, external auditors and other appropriate professionals the adequacy and effectiveness of the Company’s data privacy and cybersecurity programs;
appointing and determining the compensation for our independent registered public accounting firm;
reviewing the procedures established for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, and auditing matters;
reviewing the adequacy and effectiveness of our data privacy and cybersecurity programs; and
reviewing and overseeing our independent registered public accounting firm.

On April 21, 2023, our Board elected Ms. Lynton as Chairperson of the Audit Committee after Mr. Floyd resigned as Chairperson of the Audit Committee in order to serve as Chairperson of the Board. The Board has determined that Ms. Lynton qualifies as an “Audit Committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K. The Board intends to confirm the designation of a new Audit Committee financial expert as of the date of the annual meeting as a result of Ms. Lynton’s departure.

Additionally, our Board has determined that each of Messrs. Borgese and Buller and Ms. Faginas-Cody and Lynton qualifies as independent as independence for Audit Committee members is defined under Nasdaq listing standards, and under Rule 10A-3 of the Exchange Act.

Compensation Committee

The functions of the Compensation Committee, among other things, include:

overseeing and reviewing the Company’s overall compensation policies, plans and programs, and assessing whether the Company’s compensation philosophy establishes appropriate incentives for management and employees;

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reviewing and approving at least annually the goals and objectives relevant to the compensation of certain of our key executives, evaluating the performance of these executives in light of those goals and objectives, and determining the compensation of these executives based on that evaluation;
reviewing and approving director compensation for service on the Board and Committees;
approving the terms and grant of equity awards;
reviewing and approving overall compensation programs;
reviewing and recommending to the Board employment and severance arrangements for executive officers, including employment agreements and change-in-control provisions, plans or agreements;
administering our incentive compensation and equity-based plans;
overseeing human capital programs, including those which promote employee development and retention and focus on workforce diversity and inclusion;
overseeing the assessment of risks related to the Company’s compensation policies and programs; and
annually reviewing an assessment of any potential conflicts of interest raised by the work of any compensation consultants.

In order to comply with certain SEC requirements, the committee (or a subcommittee thereof) must consist of at least two directors that qualify as “non-employee directors” for the purposes of Rule 16b-3 under the Exchange Act. The Board has determined that each of Messrs. Babb, Borgese and Buller, and Ms. Lynton qualifies as a “non-employee director” and as “independent” as such term for Compensation Committee members is defined under Nasdaq listing standards.

Human Capital Oversight

In overseeing our human capital programs, the committee works with management to foster a work environment that includes and embraces a diversity of backgrounds and perspectives. The Company has focused on increasing diversity and has made great progress towards this goal, including within its leadership team and operational management. For example, as of the end of fiscal year 2023, approximately:

63% of our General Managers, Area Leaders, and Regional Directors identify as female and 94% identify as Non-White or Hispanic/Latino;
58% of our Support Center employees who are at or above director level identify as female and 39% identify as Non-White or Hispanic/Latino; and
60% of our executive team identifies as female and 20% identifies as Non-White or Hispanic/Latino.

Management regularly reports to the committee regarding team member development, health and wellness benefits and programs, special incentives and recognition programs, 401(k) plans, flexible work schedules, and any other programs designed to meet the needs of our team members and their families. Management also regularly reviews with the committee retention and engagement of team members.

Executive and Director Compensation

Our processes and procedures for considering and determining executive and director compensation begin with the compensation guidelines in our corporate governance guidelines, which are developed and reviewed by the Nominating and Corporate Governance Committee and approved by the Board. These guidelines state that directors who are also Company officers are not to receive additional compensation for director service, and that compensation for non-employee directors should be competitive and encourage stock ownership through payment of a portion of compensation in the form of stock, options, or similar securities. Our guidelines also task the Compensation Committee with periodically reviewing the level and form of director compensation, including compared to companies of similar size, industry, and complexity, with changes to director compensation to be proposed to the full Board for consideration. Moreover, regarding delegation of authority, under its charter, the committee may form subcommittees for any purpose that the committee deems appropriate and may delegate to such subcommittees such power and authority as the committee deems appropriate; provided, however, that the committee shall not delegate to a

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subcommittee any power or authority required by any law, regulation, or listing standard to be exercised by the committee as a whole.

In particular, the committee may delegate the approval of award grants and other transactions and responsibilities regarding the administration of compensatory programs to a subcommittee consisting solely of members of the committee who are “non-employee directors” for the purposes of Rule 16b-3 under the Exchange Act.

In addition, the committee may delegate to one or more of our officers the authority to make grants and awards of stock rights or options to any non-section 16 officer of the Company under such of our incentive-compensation or other equity-based plans as the committee deems appropriate and in accordance with the terms of such plans.

Engagement of Consultants and Advisors

Under its charter, our committee may conduct or authorize investigations into or studies of matters within its scope of responsibilities and may retain or obtain the advice of a compensation consultant, legal counsel, or other advisor in its sole discretion. The committee is directly responsible for the appointment, compensation, and oversight of the work of any compensation consultant, legal counsel, or other advisor that it retains. The Company bears all expenses. The committee may select, or receive advice from, a compensation consultant, legal counsel, or other advisor to the committee, other than in-house legal counsel, only after conducting an assessment of, and determining, the advisor’s independence, including whether the advisor’s work has raised any questions of independence or conflicts of interest, taking into consideration the Exchange Act, the factors set forth in the rules of the Nasdaq, and any other factors that the committee deems relevant.

In 2023, the committee engaged Semler Brossy Consulting Group, LLC (the “compensation consultant”), to advise the committee on an ongoing basis as an independent compensation consultant. The compensation consultant reports directly to the committee. While conducting assignments, the compensation consultant interacts with our management when appropriate. Specifically, our Chief People Officer and Chief Legal Officer, worked with the compensation consultant to provide information regarding the Company and its executive compensation policies and practices. In addition, the compensation consultant may seek feedback from the committee chairperson and other Board members regarding its work before presenting study results or recommendations to the committee. The compensation consultant may be invited to attend committee meetings. The committee determines when to hire, terminate, or replace the compensation consultant, and the projects to be performed by the compensation consultant. In 2023, as in prior years, the committee requested the compensation consultant to assist in review of Board compensation and executive compensation review and benchmarking against the Company’s peers. Except as described in this paragraph, the compensation consultant did not perform any other services to the Company or its management during fiscal 2023.

After review and consultation with the compensation consultant, the committee determined that there was no conflict of interest resulting from retaining the consultant in fiscal 2023. The committee is retaining the compensation consultant to advise the committee on certain compensation matters in 2024, but under its charter the committee has the discretion to retain, or not to retain, compensation consultants and other advisors in its sole discretion.

Nominating and Corporate Governance Committee

The functions of the Nominating and Corporate Governance Committee for identifying and evaluating nominees for director, among other things, include:

identifying, recruiting, and, if appropriate, interviewing candidates to fill positions on the Board, including persons suggested by stockholders or others;
reviewing the backgrounds and qualifications of individuals being considered as director candidates;
reviewing and recommending to the Board the director nominees for election by the stockholders or appointment by the Board, as the case may be, pursuant to our bylaws;

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reviewing the suitability for continued service as a director of each director when his or her term expires and when he or she has a change in status, including, but not limited to, an employment change, and to recommend whether or not the director should be re-nominated;
recommending director nominees and Board members for committee membership;
reviewing our corporate governance guidelines;
reviewing and assessing sustainability, environmental and social responsibility policies and goals as part of our ESG program; and
overseeing the evaluation of the Board and its committees.

As discussed above in the Q&A, the committee will consider director candidates recommended by stockholders. The committee does not have any specific requirements for candidates and nominees, but is tasked by its charter to consider:

Experience,
Skills,
Expertise,
Diversity,
Personal and professional integrity,
Character,
Business judgment,
Time availability in light of other commitments,
Dedication,
Conflicts of interest, and
Such other relevant factors as the committee considers appropriate in the context of the needs of the Board.

As a practical matter, the committee seeks candidates who contribute complimentary and relevant strengths, including diverse perspectives, diverse personal backgrounds, and diverse professional backgrounds encompassing retail, real estate, management, operations, finance, accounting, marketing, and law.

Similarly, under its corporate governance guidelines, the Board in evaluating nominees may apply all criteria it deems appropriate, including:

Whether a nominee has the experience, knowledge and skills necessary to make a meaningful contribution to the Board’s oversight of the Company’s business and affairs,
A nominee’s reputation for honesty and ethical conduct in his or her personal and professional activities,
A candidate’s time availability in light of other commitments,
Years of experience,
Potential conflicts of interest,
Material relationships with the Company,
Independence from the Company and its management, and
A diversity of backgrounds and experiences.

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As indicated, diversity in its many forms is important to the committee and to the Board in director selection as part of the holistic process of candidate and nominee evaluation. The committee’s responsibilities under its charter include (i) reviewing annually with the Board the composition of the Board as a whole and recommending, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise, and diversity required for the Board as a whole, and (ii) annually evaluating the committee’s performance. Similarly, the Board is tasked under its corporate governance guidelines with conducting annual self-assessments of the performance of the Board and of each of its committees, the results of which will be discussed with the full Board and with each committee, including reviews of any areas where Board members or management believe that the Board can better contribute to the Company. The Board will use the results to determine the characteristics and skills required of prospective Board members and for committee assignments. Therefore, at both the committee and at the Board level, feedback mechanisms help assessment of diversity, recruitment, and other policies.

ESG Governance & Leadership

El Pollo Loco recognizes that our employees and our communities are our greatest assets and have focused resources into building platforms to support them.  In 2004, we created El Pollo Loco Charities, a non-profit charity, to support the communities surrounding our restaurants. Since that time, El Pollo Loco Charities, together with the Company, have provided over 15,000 meals per year to underprivileged families, through organizations like Food on Foot, Habitat for Humanity, Children’s Institute, and Court Appointed Special Advocates.  Over the years we have increased our community outreach through initiatives such as food donation programs and community outreach and various revitalization programs, including painting murals across Southern California, supporting local schools and supporting programs that provide job opportunities, among other initiatives.   In 2022, we launched our first Round Up for Charity campaign benefiting Feeding America. El Pollo Loco Charities committed to match the first 100,000 customer round ups in our effort to reach our goal of raising $400,000 for the charity. These efforts were continued the following year by raising $474,032.  In 2023, El Pollo Loco launched the Familia Fund, a charitable fund from which team members experiencing financial hardships from unexpected personal crisis, can apply for grants. 

ESG oversight is conducted from the highest levels of our organization. Our Board of Directors oversees our ESG and sustainability strategy, initiatives, and policies, including management’s assessment of these strategies, initiatives and policies, with assistance of our Nominating and Corporate Governance Committee, Audit Committee and Compensation Committee in their relative areas of expertise. At the management level, ESG oversight is provided by our Chief Executive Officer and our ESG Steering Committee. The ESG Steering Committee is made up of company employees with experience in relevant disciplines across our organization such as human resources, supply chain, quality assurance and legal.

Compensation Committee Interlocks and Insider Participation

During 2023, Compensation Committee members included Douglas J. Babb, Samuel N. Borgese, Mark Buller, and Carol (“Lili”) Lynton. None of these individuals during that year or otherwise formerly was our officer or employee or had any relationship requiring disclosure under Item 404 of Regulation S-K. None of our executive officers serves or has served as a member of the board of directors, compensation committee, or other board committee performing equivalent functions, of any entity that has one or more executive officers serving as one of our directors or on our Compensation Committee.

Board Meetings

The Board held 16 meetings or special meetings in 2023. Each incumbent director attended at least 75% of the aggregate of the total number of board and committee meetings held in 2023 while that director served on the board and on those committees.

This behavior is in accordance with our corporate governance guidelines, which state that directors are expected to spend the time and effort necessary to properly discharge their responsibilities, by regularly attending Board and committee meetings, and by reviewing, prior to meetings, material distributed in advance for those meetings.

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Annual Meeting Attendance

Pursuant to our corporate governance guidelines, directors are expected to attend our annual meeting of stockholders, and a director who is unable to attend, which it is understood will occur on occasion, is expected to notify our Chairperson. In 2023, all directors then on the Board attended our annual meeting.

Succession Planning

The Board, led by the Compensation Committee, plans for Chief Executive Officer succession. To assist the Board and the Compensation Committee, the Chief Executive Officer provides to the Compensation Committee an annual assessment of each officer’s performance and discusses his or her ability to succeed the Chief Executive Officer or another senior officer, which assessments are used for succession planning purposes. In addition, the Chief Executive Officer and Chief Legal and People Officer prepare and maintain a short-term succession plan delineating temporary delegations of authority in the event that one or more senior officers unexpectedly become unavailable or incapacitated. This short-term succession plan is approved by the Board and effective in an emergency unless and until the Board takes other action.

EXECUTIVE OFFICERS

Executive Officers

In addition to Elizabeth Williams, our Chief Executive Officer, whose biography is included under the heading “Director Biographies,” our other executive officers as of April 16, 2024, are as follows:

Name

    

Age

    

Position

Ira Fils

58

Chief Financial Officer

Maria Hollandsworth

58

Chief Operating Officer

Ira Fils was appointed our Chief Financial Officer on June 27, 2022. Prior to joining El Pollo Loco, Mr. Fils joined The Habit Restaurants, LLC (“Habit”) in August 2008 as Chief Financial Officer and Secretary, where he helped lead Habit’s successful IPO in 2014, and actively participated in the sale of Habit to YUM! Brands in 2020. During his tenure, he was a key member of the Executive Team that grew Habit restaurants from 20 locations to over 300 locations. Prior to his time at Habit, Mr. Fils served as Chief Financial Officer of Mimi’s Café from 2005 to 2008, after joining the company as Vice President of Finance in 2003. From 1998 to 2003, he served in various financial capacities with increasing responsibility which led to him becoming Chief Financial Officer at Rubio’s Restaurants, Inc. He holds an undergraduate degree in economics and an MBA from the University of California, Irvine.

Maria Hollandsworth was appointed our Chief Operating Officer on October 31, 2022 and has served as our President since March 2024. She previously served as our interim Chief Executive Officer and President from November 2023 to March 2024. Before joining El Pollo Loco, Ms. Hollandsworth was the Regional Vice President of Operations for Dunkin’, a division of multi-brand restaurant company Inspire Brands, Inc. During her tenure, she worked closely with Dunkin’ franchisees to establish and execute a strategic market plan. She also led the leadership team in building strong relationships with franchisee leaders and increasing profitability through a culture of trust, respect, and improved guest satisfaction. Prior to Inspire, Ms. Hollandsworth worked for over 20 years at Jack in the Box, most recently serving as the Vice President of Strategic Initiatives and Operations Services from 2013 to 2018, where she successfully executed the creation and implementation of enterprise-wide strategic initiatives across over 2,000 restaurants. Prior to this role, Ms. Hollandsworth held leadership roles in both company and franchise operations at Jack in the Box.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) provides an overview of our overall executive compensation program, including the philosophy and goals, main components of pay and the decision-making process with respect to each of our Named Executive Officers (“NEOs”) for 2023. We believe our compensation programs reflect our commitment to adhere to best practices and only reward positive performance.

For 2023 our NEOs were:

Maria Hollandsworth, Interim Chief Executive Officer, President and Executive Vice President, Chief Operating Officer (beginning November 4, 2023)
Laurance Roberts, Former President and Chief Executive Officer (through November 3, 2023)
Ira Fils, Chief Financial Officer

Executive Summary

Fiscal 2023 – Year in Review

While our top line performance throughout the year was below our expectations as the restaurant industry faced another challenging year in operating environment, we continued to stay aligned around our five key operational pillars including:

Attracting, hiring, and retaining top talent;
EPL hospitality;
Being known for our famous fire-grilled chicken;
Promoting digital in service of improving the customer experience; and
Expanding as an asset light company.

This continued focus drove improved drive-thru times, higher social media ratings and less customer complaints across both company and franchise restaurants which resulted in 230 basis-point improvement in restaurant contribution margin for the year compared to last year. Restaurant contribution margin is not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and is defined below in Appendix A.

As we look ahead, we remain confident that our menu innovations, marketing initiatives and renewed focus on four-wall operational excellence will build upon the foundation we have laid down last year to unlock the immense potential we have ahead of us.

Share Repurchase Program

During fiscal 2023, the Company repurchased 2,030,850 shares of common stock under the 2022 Stock Repurchase Plan, using open market purchases, for total consideration of approximately $20.0 million. In addition, on August 7, 2023, the Company entered into a Stock Repurchase Agreement with FS Equity Partners V, L.P. and FS Affiliates V, L.P. (together, the “Sellers”), pursuant to which the Company agreed to purchase an aggregate of 2,500,000 shares of the Company’s common stock from the Sellers at a price of $10.63 per share, representing the closing price of such shares as listed on Nasdaq on August 7, 2023, for a total purchase price of $26.6 million. The repurchase was completed in August 2023.

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Further, on November 29, 2023, the Company entered into another Stock Repurchase Agreement with FS Equity Partners V, L.P. and FS Affiliates V, L.P., pursuant to which the Company agreed to purchase an aggregate of 1,500,000 shares of the Company’s common stock from the Sellers at a price of $8.40 per share, representing the closing price of such shares as listed on Nasdaq on November 29, 2023, for a total purchase price of $12,600,000. The repurchase was completed on December 4, 2023.

Financial Results (Fiscal 2023)

Total revenue was $468.7 million compared to $470.0 million in 2022.
Income from operations was $39.8 million compared to $30.1 million in 2022.
Restaurant contribution (1) was $61.9 million, or 15.5% of company-operated restaurant revenue, compared to $53.1 million, or 13.2% of company-operated restaurant revenue in 2022.
Adjusted EBITDA (1) was $57.4 million compared to $48.7 million in 2022.
Net income was $25.6 million, or $0.74 per diluted share, compared to net income of $20.8 million, or $0.57 per diluted share in 2022.

(1)Restaurant contribution and adjusted EBITDA are not presented in accordance with GAAP and are defined below in Appendix A.

Overall Compensation Philosophy

We believe our compensation programs serve three primary purposes.

To successfully execute our organizational strategy, it is critical to attract, retain, and motivate our employees.
We hold our executive officers accountable for Company performance using performance-based incentive compensation.
We align the interests of management with our stockholders using equity incentives that vest over time and stock ownership requirements. At the heart of our compensation programs is a pay-for-performance philosophy. Our named executive officers have a significant percentage of their compensation “at risk,” meaning that if the Company performs at, above, or below its target goals, the named executive officer will be paid at above or below his or her target compensation. If the Company performs below its target goals, the named executive officer will be paid below his or her target compensation.

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WHAT WE DO

Pay-for-Performance Philosophy: A significant portion of our NEO’s target compensation is variable tied to achievement of performance goals or stock price appreciation.

Emphasize Long-Term Performance: Our long-term incentive (“LTI”) program focuses on achieving strategic objectives with vesting over a four-year period.

Independent Compensation Consultant: The consultant is retained by and reports directly to the Compensation Committee and does not have any other consulting engagements with management or the Company.

Provide Limited Perquisites: Our NEOs receive perquisites consistent with industry practices and participate in the same plans generally at the same level and offering made available to other employees.

Mitigate Risk: The Compensation Committee reviews and revises our compensation programs annually to mitigate undue risk and align with market best practices.

Clawback Policy: Clawback provisions provide the ability to recover compensation in accordance with recently approved SEC and Nasdaq rules.

WHAT WE DON’T DO

No Tax Gross-Ups: We do not provide any tax gross-ups on perquisites or benefits.

Reprice or buyout of underwater stock options: We do not allow the repricing of stock options without stockholder approval.

No Short Sale Transactions. Hedging and Pledging transactions are not permitted: We do not permit any director or officer to engage in short sales, put or call transactions, hedging, or other similar transactions, subject to a limited exception applicable to pledges that requires Company pre-approval. Directors or officers may not margin or borrow against any Company stock.

We believe these practices, along with our pay-for-performance philosophy, combine to create a compensation program aligned with the interests of our stockholders.

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Elements of Executive Compensation

The following table provides information regarding the elements of our executive compensation program.

ELEMENT

    

FORM

    

OBJECTIVE AND BASIS

Base Salary

Cash

Attract and retain highly qualified executives.
Determined based on skills, experience, contribution, external benchmarking and performance when reviewed on an annual basis.

Annual Incentive Plan

Cash

Linked to the Company’s annual financial and strategic performance.
Target Annual Incentive Plan award is a percentage of base salary.
Actual payout based on financial performance against established adjusted EBITDA and revenue targets and an individual performance factor as a modifier.

Long-Term Incentive

Restricted Share Awards (“RSAs”) and Stock Options

Align the interests of our NEOs with those of our stockholders; motivate them to create value in the Company over a longer term.
Options provide value only if share price increases.
RSAs supplement options and promote long-term retention and alignment with stockholders.

Stockholder Advisory (Non-Binding) Vote on Executive Compensation

In 2023, stockholders voted on the compensation of our NEOs (this vote is commonly referred to as a “say on pay” vote).  At our 2023 annual meeting, approximately 96% of the votes cast supported our say-on-pay proposal. The Compensation Committee believes this high degree of stockholder support for our 2023 say-on-pay proposal, together with similar levels of stockholder support for our say-on-pay proposals in prior years, affirms stockholders’ support of our executive compensation program.

We will have our fifth say on pay vote this year and going forward annually, so that our stockholders may annually express their views on our executive compensation program. The Compensation Committee intends to consider the outcome of stockholders votes on our executive compensation program when making future compensation decisions for our NEOs.

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Our Executive Compensation Process

Compensation Committee

The Compensation Committee oversees and approves key aspects of executive compensation with input from our Board and its independent compensation consultant. This includes our Chief Executive Officer’s and other executive officers’ salaries, targets and payouts under the Annual Incentive Plan, LTI structure and awards and any executive perquisites or other benefits.
The Compensation Committee considers the factors above, consults with its independent compensation consultant, as well as data provided by the Chief Executive Officer regarding the performance of executive officers who report to him or her in determining compensation for our NEOs. The Compensation Committee also reviews the Chief Executive Officer’s performance against his or her Board-approved Company and business objectives. (The Chief Executive Officer is not present during any deliberations or determinations regarding his compensation.)
The Compensation Committee considers competitive market and peer data to align the Company’s total pay opportunities and outcomes.

Management

The Chief Executive Officer and Chief People Officer work closely with the Compensation Committee in managing the executive compensation program, provide input and attend meetings of the Compensation Committee.
The Chief Executive Officer makes recommendations to the Compensation Committee regarding compensation for each executive officer (other than his or her own).
The Chief People Officer presents recommendations supported by market data to the Compensation Committee on the full range of annual executive compensation decisions, including (i) annual and long-term incentive compensation plans, (ii) target competitive positioning of executive compensation, and (iii) target total direct compensation for each executive officer.

Independent Compensation Consultant

The Compensation Committee’s independent compensation consultant, Semler Brossy, provides research, survey information and analysis, incentive design expertise and other analyses related to compensation levels and design. Semler Brossy also updates the Compensation Committee on trends and developments related to executive compensation design and provides its views to the Compensation Committee on best practices, including competitiveness when evaluating executive pay programs and policies.
Semler Brossy has been retained by and reports directly to the Compensation Committee and does not have any other consulting engagements with management or the Company.

Use of Quantitative and Qualitative Measurements. We believe compensation should be based on factors that can be objectively determined, such as how well we have attained our earnings goals. For 2023, our Annual Incentive Plan awards were determined based 80% on our adjusted EBITDA and 20% on our revenue achieved against target goals for the year. In addition, the Compensation Committee may adjust the payout under the Annual Incentive Plan from 0% to 140% of the amount attributable to the Company performance metrics based on an individual performance factor. This individual performance factor is assessed based on an individual’s contribution to the Company’s objectives.

Market Data. As part of the annual executive compensation process, the Compensation Committee reviews compensation levels, practices, and pay of executives serving in comparable positions at peer group companies. In 2023, both peer group proxy data and industry-comparative compensation surveys were reviewed.

The Compensation Committee reviews the composition of the peer group on an annual basis in consultation with its independent compensation consultant. In selecting our peer group, we focus on similar companies in terms of industry, size and business characteristics.

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Our Compensation Committee compared our compensation with that of the following companies considered as a group (collectively the “Peer Group”):

PEER GROUP

    

    

BJ’s Restaurants Inc.

Fiesta Restaurant Group, Inc.

Potbelly Corporation

Chuy’s Holdings, Inc.

Jamba Juice Co.

Red Robin Gourmet Burgers, Inc.

Denny’s Corporation

Krispy Kreme Doughnuts Inc.

Sonic Corp.

Dine Brands Global, Inc.

Noodles & Company

Named Executive Officer Compensation

Compensation to our named executive officers consists of four elements: base salary, annual cash incentive awards, long-term incentive awards, and “other” compensation items (including perquisites, benefits and severance).

Distribution of Compensation

We weight a greater proportion of total compensation toward performance-based components such as annual cash incentive awards, which can increase or decrease to reflect changes in corporate and individual performance on an annual basis, and long-term compensation, which can reinforce management’s commitment to enhancing profitability and stockholder value over the long-term.

A significant percentage of our named executive officers’ total direct compensation is variable based on performance factors (including our share price, in the case of long-term incentive awards). We believe this type of variable compensation supports our pay-for-performance philosophy. For 2023, 67% of Ms. Hollandsworth’s total direct compensation as Interim Chief Executive Officer was variable, based on performance factors, and for all other named executive officers, 66% of their total direct compensation as named executive officers was variable, based on performance factors.

Graphic

Base Salary

Base salaries are intended to provide a base level of compensation and are paid in recognition of the skills, experience, and business contribution of our named executive officers. Salaries for our named executive officers are reviewed on an annual basis. In setting base salary, we consider the performance of the named executive officer, Company performance, tenure of the named executive officer, prior changes to the named executive officer’s compensation,

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internal equity, and external benchmarking of similarly situated executives in our Peer Group described above. For newly hired executives, we also consider the level of compensation necessary to attract the executive to the Company.

The Compensation Committee determined to increase each named executive officer’s base salary for 2023 based on its assessment of each executive’s performance in 2022. The base salaries for each of the NEOs during fiscal 2023 and 2022 are set forth below.

Base Salary

Annualized Rate

Named Executive Officer

    

Fiscal 2023

    

Fiscal 2022

    

% Change

Maria Hollandsworth (1)

$

400,000

$

340,000

 

17.6%

Ira Fils

$

416,000

$

400,000

 

4.0%

Laurance Roberts

$

700,000

$

600,000

 

16.7%

(1)In connection with Ms. Hollandsworth’s appointment as our Interim Chief Executive Officer on November 4, 2023, her base salary was increased by $60,000 to $400,000 as of such date.

Annual Incentive Plan

Our named executive officers participate in an annual cash incentive plan which provides them an opportunity to earn a cash award based on the attainment of certain pre-determined goals of the Company. For 2023 these goals were based on: (i) adjusted EBITDA, and (ii) revenue comprised of company sales and franchisee royalty income. Payouts based on the attainment of these performance goals may range from 0% to 180% of the target award. Payouts are also subject to an individual performance factor (“IPF”). The individual performance factor can adjust the achievement of the Company performance metrics range from 0% to 140% of the amount attributable to the Company performance metric. See our Appendix A, for more details on how our adjusted EBITDA is calculated, and a reconciliation of adjusted EBITDA to net income as determined under GAAP.

Goals are established by the Board in the first quarter of the applicable fiscal year and range from a minimum (or threshold) level to a maximum level, with a target level in between. Each named executive officer has a targeted award potential expressed as a percentage of salary. Notwithstanding such targets, our Board has discretion to reduce the size of any award if it believes the interests of our stockholders would be better served thereby.

For fiscal year 2023, our named executive officers’ target Annual Incentive Plan award (as a percentage of their base salary) were as follows:

Annual Incentive Plan Target

Percentage of Base Salary

Named Executive Officer

    

Fiscal 2023

Maria Hollandsworth (1)

 

50/75/100%

Ira Fils

 

75%

Laurance Roberts (2)

 

100%

(1)Ms. Hollandsworth’s target Annual Incentive Plan award was first increased from 50% to 75% of her base salary for 2023 as Chief Operating Officer in connection with her promotion to EVP, Chief Operating Officer. In addition, for as long as Ms. Hollandsworth served as Interim Chief Executive Officer, her target Annual Incentive Plan award was increased to 100% of her base salary for the portion of the year following her appointment (such that Ms. Hollandsworth’s target award was 50% prior to November 4, 2023, and 100% of her base salary from November 4, 2023, through the end of 2023).

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(2)Mr. Roberts remained eligible to receive a pro-rata performance bonus based on actual performance pursuant to the terms of his employment agreement.

For fiscal year 2023, the threshold, target and maximum Company Annual Incentive Plan targets were weighted at 80% for achievement of EBITDA targets and at 20% for revenue based on the following performance target amounts, and the Company’s actual results.

The Annual Incentive Plan percentage payout for Company performance are as follows:

Fiscal Year 2023 Annual Incentive Plan

Company Performance Factor

    

Adjusted EBITDA

    

Revenue

    

% Payout

Threshold

$56.7 million

$446.9 million

 

25%

Target

$63.1 million

$460.7 million

 

100%

Maximum

$71.9 million

$481.4 million

 

180%

Actual

$57.4 million

$427.9 million

 

32.6%

The Annual Incentive Plan payout received by each NEO is set forth in the table below.

Fiscal Year 2023 Annual Incentive Plan

2023 Payout

    

    

    

Actual

    

Fiscal

Fiscal

2023

2023

Annual

Annual

Incentive

Incentive

Named

Fiscal

Plan

Plan

Executive

2023

Target

payout

Officer

Salary

(%)

($)

Rationale for IPF Adjustment

Maria Hollandsworth

$

400,000

 

50/75/100%

$

80,702

 

For 2023, Ms. Hollandsworth’s 2023 Annual Incentive Plan payout was pro-rated based on her time in role as (i) Chief Operating Officer and (ii) Interim Chief Executive Officer.

Ira Fils

$

416,000

 

75%

$

101,712

 

Laurance Roberts

$

700,000

 

100%

$

186,196

 

As set forth in “Potential Payments Upon Termination or Change in Control” below, Mr. Roberts received a pro-rated portion of his Annual Incentive Plan Bonus based on actual performance for the portion of the year that he served as Chief Executive Officer of the Company.

In addition to the Annual Incentive Plan opportunity, Ms. Hollandsworth was awarded a retention bonus pursuant to the terms of her employment agreement described below.

Long-Term Incentive Awards

We provide long-term incentive compensation to our named executive officers pursuant to our Equity Incentive Plan (the “Incentive Plan”). We believe that long-term incentive awards help to align the interests of our named executive officers with those of our stockholders, motivate them to create value in the Company over a longer term than annual cash incentive awards, and encourage our named executive officers to avoid taking excessive risks. We have previously granted three types of long-term incentive awards applicable to our named executive officers: restricted stock awards, restricted stock unit awards, and stock option awards.

In determining the aggregate amount of long-term incentive awards to grant each named executive officer, we consider the individual’s performance, the expense recognized by the Company for equity grants, the potential dilutive effect

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equity grants may have on existing stockholders, the number of shares available for grant in our Incentive Plan, comparisons to our Peer Group and the accumulated wealth prior equity awards have created. In considering which type of equity grant to make our named executive officers, we consider the motivational effect each award will have and prefer to use restricted stock or unit awards as an incentive vehicle for newly hired or promoted employees in order to increase the executive’s ownership position in the Company. While stock options motivate our named executive officers by providing potential gain if our stock price increases, our stock awards, more directly expose our named executive officers to the effects of a decrease in our stock price. For 2023, we determined to structure our annual equity awards so that the grant date value of the equity awards granted to the named executive officers consisted of an approximately equally weighted mix of restricted share awards and stock options. As noted above, new hire or promotional awards generally consisted of 100% restricted share awards.

Restricted Share and Option Awards

Our restricted shares and stock options generally vest in four equal annual installments commencing on the one-year anniversary of grant. During the period while the restricted shares remain unvested, the grantees have all the rights of a stockholder with respect to the restricted shares except the right to transfer the restricted shares (including the right to vote restricted shares and to receive ordinary dividends paid to or made with respect to the restricted shares, if any, subject to the same vesting conditions as the underlying restricted shares). The grantees have no stockholder rights with respect to their stock option awards until the options are actually exercised.

Restricted Shares & Options

Named Executive Officer

    

# of Shares

# of Options

    

Grant Date Fair Value of Shares and Options

Maria Hollandsworth

13,797

28,802

$

250,000

Ira Fils

 

27,594

57,604

$

500,000

Laurance Roberts (1)

 

55,188

115,207

$

1,000,000

(1)Mr. Roberts’ restricted shares and stock options were forfeited in connection with his resignation of employment, effective November 3, 2023.  In connection with Mr. Roberts’ separation agreement, his stock option exercise period was extended for three years.

The aggregate amount of the 2023 long-term incentive awards granted to each named executive officer was determined by our Compensation Committee based on the factors described above.

These shares will vest 25% each year on the anniversary of the grant date over four years.

The table above excludes an additional award of restricted shares and stock options having a grant date value of approximately $300,000 each that was granted to Mr. Roberts on August 8, 2023 in connection with his appointment as our Chief Executive Officer and in order to more closely align Mr. Roberts compensation with that paid to the Chief Executive Officers of our peer companies described above.

In addition, the table above excludes one-time awards made to Ms. Hollandsworth and Mr. Fils in November 2023. Pursuant to Ms. Hollandsworth’s employment agreement entered into in connection with her appointment as Interim Chief Executive Officer, effective as of November 4, 2023, Ms. Hollandsworth received a one-time grant of restricted stock units with a grant date value of $200,000 as a retention incentive and to provide an additional compensation opportunity for her in such role. The award will cliff-vest on the one-year anniversary of the effective date of the employment agreement (subject to Ms. Hollandsworth’s continued employment with the Company through such date) or earlier in the event of a termination of her employment with the Company without cause or for good reason. Further, in connection with such leadership transition, on November 7, 2023, Ira Fils received a grant of restricted stock units with a grant date value of $155,000 and stock options with a grant date value of $155,000, as a retention incentive. Both of these awards will cliff-vest on the one-year anniversary of the grant date (subject to Mr. Fils continued employment with the Company) or earlier in the event of termination of his employment with the Company without cause.

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Stock Ownership Guidelines Applicable to our Chief Executive Officer

We believe that in order to align the interests of our Chief Executive with those of our stockholders, our Chief Executive Officer should have direct ownership in shares of our common stock. Accordingly, our Board has adopted Stock Ownership Guidelines. The Stock Ownership Guidelines require our Chief Executive Officer to own shares of our common stock having a value equal to at least five times his or her annual base salary. Upon the approval of the Board, our Chief Executive Officer may designate other officers to be subject to the Stock Ownership Guidelines. Shares subject to stock options and unvested stock or stock unit awards subject to performance-based vesting are not considered owned for purposes of these guidelines. Our Chief Executive Officer is required to be in compliance with the required ownership level within five years of first becoming subject to the Stock ownership Guidelines.

Other Compensation

Perquisites & Benefits. In fiscal 2023, we provided our named executive officers certain perquisites and benefits, generally at the same level and offering made available to other employees, including our 401(k) Plan, health care plans, life insurance plans, and other welfare benefit programs. In addition, each of our named executive officers was entitled to an automobile allowance and fuel costs. Each named executive officer also received supplemental disability insurance coverage and reimbursement of certain out-of-pocket medical expenses.

The Company sponsors a 401(k) plan that permits its employees, subject to certain eligibility requirements, to contribute up to 25% of their qualified compensation to the plan. The Company matches 100% of the employees’ contributions of the first 3% of the employees’ annual qualified compensation, and 50% of the employees’ contributions of the next 2% of the employees’ annual qualified compensation. The Company’s matching contribution immediately fully vests.

Sign-on Bonuses, New Hire Equity Awards and Relocation Payments. The Company occasionally provides sign-on bonuses, new hire equity awards, and relocation payments when the Compensation Committee determines it necessary and appropriate to attract top executive talent. These awards are utilized to help offset compensation an executive forfeits from their previous company to join the Company. We typically require the newly hired executive to return the full award amount of any sign-on bonuses and relocation payments if they voluntarily leave the Company within a certain period of time after hire and new hire equity awards are subject to a time-based vesting period.

Other Compensation Policies

Policy on Hedging and Pledging Transactions

We do not permit any director or officer of the Company to engage in short sales, transactions in put or call options, hedging transactions or other similar transactions designed to allow an individual to “lock in” appreciation in value or hold securities of the Company without the full risks and rewards of ownership, and all other employees are discouraged from doing so. In addition, no director or officer of the Company may margin, or make any offer to margin, any of the Company’s stock, or pledge any Company stock, subject to a limited exception applicable to pledges that requires Company pre-approval, and all other employees are discouraged from doing so.

Description of Employment Agreements

We have entered into employment agreements with Maria Hollandsworth and Ira Fils. In addition, we entered into an employment agreement with Elizabeth Williams in 2024 and a separation, release and consulting agreement with Mr. Roberts in connection with his termination of employment in 2023. Each of the employment agreements provides for an initial term ranging from one year to eighteen months, and automatically renews for an additional one-year term, unless either party provides 60 days’ notice prior to the end of the term. We have also entered into indemnification agreements with each of our named executive officers.

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Maria Hollandsworth

We entered into an employment agreement with Ms. Hollandsworth in connection with her appointment as the Company’s Interim Chief Executive Officer, effective November 4, 2023. Under the employment agreement, Ms. Hollandsworth will serve as the Company’s Executive Vice President, Chief Operating Officer, with a base salary of $400,000, which may be increased in our sole discretion, and a target annual bonus equal to 75% of base salary. The employment agreement also provides that Ms. Hollandsworth will also serve as the Company’s Interim Chief Executive Officer. During the period that Ms. Hollandsworth serves as Interim Chief Executive Officer, her target annual bonus will be increased to 100% of her base salary. Ms. Hollandsworth’s position as Interim Chief Executive Officer of the Company concluded on March 11, 2024 in connection with Ms. Williams’ appointment as Chief Executive Officer of the Company on such date, after which Ms. Hollandsworth continued to serve as the Company’s Executive Vice President, Chief Operating Officer.

In addition, under the employment agreement, Ms. Hollandsworth will receive retention bonuses of $75,000 on each of December 1, 2023 and May 1, 2024 (subject to her continued employment with the Company through each such date). Ms. Hollandsworth is also entitled to receive a grant of restricted stock units with a grant date value of $200,000 (the “Interim CEO RSUs”) that will cliff-vest on the one-year anniversary of the agreement’s effective date (subject to her continued employment with the Company through such date) or earlier in the event of termination of her employment with the Company without “cause” or for “good reason” (as such terms are defined in Ms. Hollandsworth’s employment agreement), or in the event the employment agreement (for either position) is not renewed by the Company (a “Qualifying Termination”).

In the event Ms. Hollandsworth’s employment is terminated as a result of a Qualifying Termination, provided that she signs a release of claims, she will be entitled to receive continued payment of her base salary for one year, a pro-rata portion of any annual bonus earned for the year of termination based on performance and full accelerated vesting of the Interim CEO RSUs.

The employment agreement contains a perpetual confidentiality covenant, a one-year post-termination non-interference covenant applicable to the Company’s relationships with suppliers, customers and partners and a one-year post-termination non-solicitation covenant applicable to Company employees.

Ira Fils

In connection with his appointment as the Company’s Chief Financial Officer in 2022, we entered into an employment agreement with Ira Fils. The employment agreement provides that Mr. Fils will receive a salary equal to $400,000, which may be increased in our sole discretion, will receive a $600 per month transportation allowance, will be eligible to earn annual cash incentive awards with a target of 75% of his then current base salary, will be eligible to participate in the Company’s equity-based compensation plan, and will be entitled to certain other benefits and perquisites as more fully described above in the “Perquisites & Benefits” section. Mr. Fils’ employment with us may be terminated at any time by either party, provided that Mr. Fils is required to provide us with 90-day advance notice in case of resignation. If we terminate Mr. Fils’ employment without “cause” or he resigns for “good reason” (as such terms are defined in Mr. Fils’ employment agreement) and provided that he signs a general release of claims, Mr. Fils will be entitled to continuation of base salary for 12 months following termination of employment. In addition, in case of any termination of employment, except termination by us for cause or voluntary resignation by Mr. Fils without good reason, Mr. Fils will be entitled to a Pro-Rata Annual Cash Incentive for the year of termination based on our actual performance. Mr. Fils’ employment agreement contains an indefinite confidentiality covenant and 12-month post-termination covenants relating to non-interference with the Company’s business relationships and non-solicitation of the Company’s employees and consultants.

Elizabeth Williams

We entered into an employment agreement with Ms. Williams in connection with her appointment as the Company’s Chief Executive Officer, effective March 11, 2024 (the “Effective Date”). The employment agreement provides that Ms. Williams will receive an annual base salary of $725,000, which may be increased in our sole discretion, and a

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target annual bonus equal to100% of base salary. For purposes of the 2024 annual bonus, the bonus will not be prorated from the effective date of the Employment Agreement through the close of fiscal year 2024.

At the discretion of the Board, during the employment term, Ms. Williams will be eligible to receive an annual equity grant with a target equity value of $1,800,000 (the “Annual Equity Incentive”), with the terms of each such award to be determined by the Compensation Committee and the Board. If we terminate Ms. Williams’ employment without “cause” or she resigns for “good reason” within the four-month period before or 12-month period after a “change of control” (as such terms are defined in Ms. Williams’ employment agreement) and provided that she signs a general release of claims, Ms. Williams will be entitled to full vesting of any unvested Annual Equity Incentive awards (such acceleration, a “Double Trigger Acceleration”).

In addition, as soon as practicable during the first open window following the Effective Date, Ms. Williams will receive a one-time signing equity grant with a grant date value of $1,200,000 (“Signing Grant”), subject to the terms and conditions of the Company’s Equity Incentive Plan and applicable award agreement. The Signing Grant consists of time-vested restricted stock awards (“RSAs”) with a grant date value of $400,000, time-vested stock options (“Options”) with a grant date value of $400,000, and performance stock units (“PSUs”) with a target grant date value of $400,000. The time-vested portion of the Signing Grant will vest 25% each year for the first four years from the Effective Date, subject to Ms. Williams’ continued employment with the Company. The PSUs will vest according to the plan established by the Compensation Committee and will be subject to the performance terms and conditions established by the Compensation Committee after consultation with Ms. Williams. In addition, 100% of the Signing Grant will vest upon (i) Ms. Williams’ employment being terminated at any time prior to the vesting date as a result of a termination by the Company without cause; (ii) a termination by Ms. Williams for good reason; (iii) the Company’s decision not to renew the term of the employment agreement; provided that the vesting acceleration of PSUs will be subject to future mutual agreement in connection with the development by the Company of performance terms and conditions thereof; or (iv) a Double Trigger Acceleration. Any accelerated vesting in connection with such a qualifying termination of employment will be subject to Ms. Williams complying with the release requirements of her employment agreement.

Ms. Williams will also be eligible to receive a one-time cash signing bonus of $200,000 (“Signing Bonus”), to be paid 120 days following the Effective Date, provided that she does not receive any bonus from her prior employer. If we terminate Ms. Williams’ employment for cause or she resigns without good reason within 12 months of the Effective Date, Ms. Williams will be obligated to repay the Signing Bonus.

During the employment term, the Company will provide Ms. Williams with an automobile allowance substantially similar to the allowance provided by the Company to other similarly-situated senior executives of the Company. The Company will also reimburse up to $10,000 for any reasonable, documented attorneys’ fees incurred by Ms. Williams in connection with the employment agreement.

If we terminate Ms. Williams’ employment without cause (other than by reason of death or disability), she resigns with good reason, or the Company does not renew the term of her employment agreement, provided that she signs a general release of claims and continues to comply with the restrictive covenants set forth in her employment agreement, Ms. Williams will be entitled to receive: (i) the annual bonus, if any, that she would have been entitled to receive in respect of the year in which such termination occurs based on actual performance, prorated based on the number of days employed during such year, payable when such bonus would have otherwise been paid; (ii) continued payment of her annual base salary for 12 months; (iii) reimbursement for the cost of her continued medical, dental and vision coverage until the earlier of (x) the end of the 12-month period following such termination, or (y) the date on which she becomes eligible for medical, dental and/or vision coverage from a subsequent employer; and (iv) the Signing Grant will fully vest.

To the extent that the payments and benefits provided under Ms. Williams’ employment agreement and any other Company plan or agreement (such payments or benefits, the “Benefits”) would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended, the Benefits will be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Ms. Williams retaining a larger amount, on an after-tax basis, than if Ms. Williams received all of the Benefits.

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The employment agreement contains a perpetual confidentiality covenant, a one-year post-termination non-interference covenant applicable to the Company’s relationships with suppliers, customers and partners and a one-year post-termination non-solicitation covenant applicable to Company employees.

Laurance Roberts

In connection with Mr. Roberts’ termination of employment, the Company entered into a separation, release and consulting agreement with Mr. Roberts, dated November 1, 2023 (the “Consulting Agreement”). In accordance with his existing employment agreement, dated March 9, 2022, the Consulting Agreement provides that Mr. Roberts will receive continued payment of his base salary of $700,000 for one year and a pro-rata portion of any annual bonus earned for the year of termination based on performance. In addition, to help facilitate the transition from Mr. Roberts to Ms. Hollandsworth, the Company retained Mr. Roberts as a consultant from November 4, 2023 through December 28, 2023. Pursuant to the Consulting Agreement, Mr. Roberts is entitled to a gross payment of $53,846, and the Company is extending the exercise period for all stock options vested as of the date of his termination of employment (“Vested Options”) such that the Vested Options will remain exercisable until the earliest of (1) the three-year anniversary of the date of his termination of employment, (2) the normal expiration date of the applicable Vested Options, and (3) the date of any termination of the Vested Options as a result of any corporate transaction provided for under the equity plan under which the Vested Options were awarded. Mr. Roberts will also be entitled to reimbursement of his premiums charged to continue medical coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (commonly known as COBRA) through April 30, 2024.

Change in Control Provisions in Equity Awards

The Incentive Plan provides that, except as otherwise provided in an award agreement, if a “change in control” of the Company occurs (as such term is defined in the Incentive Plan) and the award holder’s employment or service is terminated by the Company without “cause” or by the award holder for “good reason” (as such terms are defined in the Incentive Plan) within 12 months following the change in control, then the outstanding and unvested equity awards will fully vest (with any performance conditions deemed to be achieved at target performance levels). The Compensation Committee, which administers the Incentive Plan, may also provide for the acceleration of outstanding and unvested equity awards upon a change in control of the Company.

Compensation Policies and Practices as They Relate to Risk Management

In 2023, our Compensation Committee reviewed our compensation policies and practices and concluded that the mix and design of these policies and practices are not reasonably likely to encourage our employees to take excessive risks. In connection with its evaluation, our Compensation Committee considered, among other things, the structure, philosophy and design characteristics of our primary incentive compensation plans and programs in light of our risk management and governance procedures, as well as other factors that may calibrate or balance potential risk-taking incentives. Based on this assessment, our Compensation Committee concluded that risks arising from our compensation policies and practices for all employees, including executive officers, are not reasonably likely to have a material adverse effect on us.

Tax Considerations

Prior to its amendment by the Tax Cuts and Jobs Act (“Tax Legislation”), which was enacted December 22, 2017, Section 162(m) of the Internal Revenue Code disallowed a tax deduction to public companies for compensation paid in excess of $1 million to “covered employees” (generally, such company’s chief executive officer and its three other highest paid executive officers other than its chief financial officer). Prior to the Tax Legislation, there was an exception to this $1 million limitation for performance-based compensation if certain requirements were met.

The Tax Legislation generally amended Section 162(m) to eliminate the exception for performance-based compensation. The $1 million compensation limit was also expanded to apply to a public company’s chief financial officer and apply to certain individuals who were covered employees in years other than the then-current taxable year. The Tax Legislation provides for “grandfathering” of awards in effect as of November 2, 2017, if certain conditions are met, including lack of modification of the terms of the awards. As in prior years the Company will continue to

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consider the tax and accounting implications (including with respect to the expected lack of deductibility under the revised Section 162(m)) when making compensation decisions, but it reserves its right to continue to make compensation decisions based on other factors if it determines that it is in the best interests of the Company and its stockholders to do so. Further, the Company may determine to make changes or amendments to the Company’s existing compensation programs in order to revise aspects of our executive compensation programs that were initially designed to comply with Section 162(m) but that may no longer serve as an appropriate incentive measure for our executive officers.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed our Compensation Discussion and Analysis section with management and, based on the review and discussions, recommended to the Board that the Compensation Discussion and Analysis section be included in this proxy statement on Schedule 14A.

Compensation Committee

Douglas J. Babb

Samuel Borgese

Mark Buller

Carol (“Lili”) Lynton

The foregoing report of the Compensation Committee is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this proxy statement and irrespective of any general incorporation language in such filing.

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EXECUTIVE COMPENSATION TABLES

2023 Summary Compensation Table

The following table summarizes the compensation for 2023, 2022, and 2021 awarded to, earned by or paid to our NEOs.

    

    

    

    

    

    

Non-Equity

    

    

Stock

Option

Incentive Plan

All Other

Bonus

Awards

Awards

Compensation

Compensation

Total

Name and Principal Position

Year

Salary ($)

($)

($) (1)

($) (2)

($) (3)

($) (4)

($)

Maria Hollandsworth

 

2023

$

348,901

$

75,000

$

325,000

$

125,000

$

80,702

$

28,758

$

983,361

Interim President & Chief Executive Officer

 

2022

$

56,558

$

50,000

$

$

$

4,762

$

111,320

2021

$

$

$

$

$

$

Ira Fils

 

2023

$

416,000

$

$

405,000

$

405,000

$

101,712

$

32,075

$

1,359,787

Chief Financial Officer

 

2022

$

205,000

 

$

500,000

$

$

76,236

$

94,397

$

875,633

2021

$

 

$

$

$

$

$

Laurance Roberts

 

2023

$

594,231

$

$

800,000

$

800,000

$

186,196

$

780,838

$

3,161,265

Former President and Chief Executive Officer

 

2022

$

582,665

$

500,000

$

500,000

$

$

162,198

$

1,744,863

 

2021

$

420,136

$

450,000

$

250,000

$

348,430

$

31,266

$

1,499,832

(1)Amounts shown in this column represent the aggregate grant date fair value of restricted share awards computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions used in calculation of these amounts, see Note 11 to our audited financial statements, included within our Annual Report.
(2)Amounts shown in this column represent the aggregate grant date fair value of stock option awards computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions used in calculation of these amounts, see Note 11 to our audited financial statements, included within our Annual Report.
(3)Amounts shown in this column represent any performance-based compensation earned by our NEOs pursuant to achievement of performance criteria set by the Board under our Annual Incentive Plan. The material terms of the Annual Incentive Plan compensation paid to our named executive officers with respect to the 2023 fiscal year are described above in the section entitled “Named Executive Officer Compensation – Annual Incentive Plan.
(4)All Other Compensation” includes the following perquisites and benefits with respect to fiscal 2023:
Gas Card Benefits: Messrs./Mme. Hollandsworth, Fils and Roberts received amounts of $4,347, $0 and $2,064, respectively.
401(k) Plan Matching Contribution: Messrs./Mme. Hollandsworth, Fils and Roberts received amounts of $7,670, $12,983, and $10,154, respectively.
Auto Allowance: Messrs./Mme. Hollandsworth, Fils and Roberts received amounts of $7,200, $7,200, and $6,425, respectively.
Other Benefits (including health and welfare benefits): Messrs./Mme. Hollandsworth, Fils and Roberts received amounts of $2,786, $11,286 and $14,642, respectively.
Severance: In connection to Mr. Roberts’ termination of employment, ended on November 3, 2023, Mr. Roberts’ is entitled to receive continued payment of his salary of $700,000 for one year, payment of his COBRA premiums through April 30, 2024, and a cash payment of $53,846 as consideration for consulting services rendered following Mr. Roberts’ termination date through December 28, 2023. Outstanding Equity Awards at 2023 Fiscal Year End.

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The following table sets forth outstanding equity awards as of December 27, 2023. For more information on the equity awards granted in fiscal 2023, see the “Named Executive Officer Compensation – Long-Term Incentive Awards” section above.

Option Awards

Stock Awards

Equity

    

    

    

    

Incentive

    

    

    

Number

Plan Awards;

of

Market

Number of

Number of

Number of

Shares

Value of

Securities

Securities

Securities

or units

Shares or

Underlying

Underlying

Underlying

of Stock

Units of

Unexercised

Unexercised

Unexercised

Option

That

Stock That

Options

Options

Unearned

Exercise

Option

Have

Have Not

Exercisable

Unexercisable

Options

Price

Expiration

Not

Vested

Name

    

Grant Date

    

(#)

    

(#) (2)

    

(#)

    

($)(5)

    

Date

    

Vested

    

($)(3)(4)

    

Maria Hollandsworth

5/9/2023

 

 

28,802

 

$

9.06

 

5/9/2033

13,797

 

124,863

 

11/7/2023

 

 

 

23,641

 

213,951

 

Ira Fils

8/23/2022

 

 

 

-

 

40,107

 

362,968

 

5/9/2023

57,604

$

9.06

5/9/2033

27,594

249,726

11/7/2023

37,272

$

8.46

11/7/2033

18,322

165,814

Laurance Roberts

5/10/2017

29,484

$

12.45

11/3/2026

8/8/2018

39,684

$

9.85

11/3/2026

5/8/2019

42,736

$