Grill Concepts (GRIL)

Standard Director Compensation Arrangements

We compensate non-employee members of the Board through a mixture of cash and equity-based compensation. Each non-employee director receives an annual retainer of $15,000, payable in quarterly installments of $3,750, for his services as a director. Each member of the audit committee receives an annual retainer of $5,000, payable in quarterly installments of $1,250. Each member of the compensation committee receives an annual retainer of $5,000, payable in quarterly installments of $1,250. In addition, the chairman of the audit committee and compensation committee each receives an annual retainer of $5,000 payable in quarterly installments of $1,250. We also reimburse expenses incurred by non-employee directors to attend board and committee meetings, and provide to each non-employee director a food credit of $2,000 annually.

On the date of the initial appointment or election of each non-employee director, the non-employee director receives a stock option grant to purchase 6,250 shares of our common stock at a price equal to the fair market value of our common stock on the date of grant. On the date of each annual meeting of stockholders following initial appointment or election, each non-employee director receives an annual stock option grant to purchase 5,000 shares of our common stock, plus 1,000 shares for each committee on which a non-employee director serves, at a price equal to the fair market value of our common stock on the date of grant.

Directors who are also our employees do not receive cash or equity compensation for service on the Board in addition to compensation payable for their service as employees of Grill Concepts.