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Buffalo Wild Wings Inc – ‘PRER14A’ on 4/5/17

On:  Wednesday, 4/5/17, at 5:16pm ET   ·   Accession #:  930413-17-1413   ·   File #:  0-24743

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/05/17  Buffalo Wild Wings Inc            PRER14A                1:2.0M                                   Command Financial

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14A     Revised Preliminary Proxy Solicitation Material     HTML    699K 

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 (Amendment No. 1)

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

BUFFALO WILD WINGS, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

to be held

         , 2017

TO THE SHAREHOLDERS OF BUFFALO WILD WINGS, INC.:

You are cordially invited to attend our 2017 Annual Meeting of Shareholders, to be held at          , Central Daylight Time on          , 2017, for the following purposes:

Accompanying this Notice of Annual Meeting is a Proxy Statement, a form of Proxy, and our Annual Report on Form 10-K for the year ended December 25, 2016.

Your vote will be especially important for our 2017 Annual Meeting of Shareholders. Marcato Capital Management (together with its affiliates and related parties, “Marcato”) has notified Buffalo Wild Wings that Marcato intends to nominate nominees for election to the Board of Directors at the meeting in opposition to the nominees recommended by our Board of Directors. You may receive a proxy statement, [color] proxy card and other solicitation materials from Marcato. Buffalo Wild Wings is not responsible for the accuracy of any information provided by or relating to Marcato or its nominees contained in solicitation materials filed or disseminated by or on behalf of Marcato or any other statements that Marcato may make.

The Buffalo Wild Wings Board of Directors does not endorse any Marcato nominees other than Sam B. Rovit and unanimously recommends that you vote FOR the election of each of the nominees proposed by the Board of Directors, including Sam B. Rovit, on your YELLOW proxy card. Although you are permitted to grant a proxy to anyone who provides you with a valid form of proxy, the Board of Directors strongly urges you not to sign or return any [color] proxy card sent to you by Marcato. If you have previously submitted a [color] proxy card sent to you by Marcato, you can revoke that proxy and vote for our Board of Directors’ nominees and on the other matters to be voted on at the 2017 Annual Meeting of Shareholders by using the enclosed YELLOW proxy card.

Whether or not you will attend the meeting, we hope that your shares will be represented and voted. In advance of the meeting on          , 2017, please cast your vote through the Internet, by telephone or by mail as described in your YELLOW proxy card. Instructions on how to vote are found in the section titled “Outstanding Shares and Voting Rights” on page 21.

Only shareholders of record as shown on our books at the close of business on          , 2017 will be entitled to vote at our 2017 Annual Meeting of Shareholders or any adjournment thereof. Each shareholder is entitled to one vote per share on all matters to be voted on at the meeting.

We encourage you to attend the meeting, but whether or not you plan to attend the 2017 Annual Meeting of Shareholders, please submit your completed proxy via phone, mail or internet as soon as possible. Proxies are revocable and will not affect your right to vote in person in the event you revoke the proxy and attend the meeting. The prompt return of proxies will help us avoid the unnecessary expense of further requests for proxies.

Important Notice Regarding the Availability of Proxy Materials for the Meeting of Shareholders to be held on          , 2017:

This Notice, the Proxy Statement, Form of Proxy and Annual Report on Form 10-K are available at

table of Contents

2017 Annual Meeting of Shareholders   |   i

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

BUFFALO WILD WINGS, INC.

PROXY STATEMENT FOR

ANNUAL MEETING OF SHAREHOLDERS

to be held

, 2017

Our Board of Directors is soliciting proxies from our shareholders to vote their shares of Common Stock at the Buffalo Wild Wings, Inc. 2017 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on           , 2017, at the location and for the purposes set forth in the Notice of Annual Meeting, and at any adjournment thereof. Buffalo Wild Wings, Inc. is referred to in this document as “we,” “us,” “our,” and the “company.”

The cost of soliciting proxies, including the preparation, assembly, and mailing of the proxies and soliciting material, as well as the cost of forwarding such material to the beneficial owners of stock, will be borne by us. In addition to solicitation by the use of the mails, certain of our directors, officers and employees may solicit proxies by telephone, email or personal contact, and have requested brokerage firms and custodians, nominees and other record holders to forward soliciting materials to the beneficial owners of our stock and will reimburse them for their reasonable out-of-pocket expenses in so forwarding such materials. Our company has retained MacKenzie Partners, Inc. to assist in the solicitation of votes and the distribution of proxy materials for a fee not to exceed $750,000, plus out-of-pocket expenses. MacKenzie Partners, Inc. expects that approximately 30 of its employees will assist in the solicitation of proxies. In addition, MacKenzie Partners, Inc. and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement. The total amount estimated to be spent for our proxy solicitations related to an annual meeting of shareholders is estimated to be approximately $         , approximately $          of which has been incurred to date. Costs representing amounts historically spent for a solicitation of proxies for the election of directors in the absence of a contest have not been excluded from these estimates, while costs represented by salaries and wages of any regular employees and officers of our company have been excluded. Additional information about persons who are participants in this proxy solicitation is set forth in Appendix B.

Any shareholder giving a proxy may revoke it any time prior to its use at the Annual Meeting (1) by giving written notice of such revocation to the Secretary or any one of our other officers (2) by submitting a timely, later dated written proxy (or voting instruction form if you hold shares through a broker), or (3) providing timely subsequent telephone or Internet voting instructions. Personal attendance at the Annual Meeting is not, by itself, sufficient to revoke a proxy unless written notice of the revocation or a later dated proxy is delivered to an officer before the revoked or superseded proxy is used at the Annual Meeting. Proxies will be voted as directed therein. Proxies which are signed by shareholders, but which lack specific instruction with respect to any proposal, will be voted in favor of the number and slate of directors proposed by the Board of Directors and listed herein, for the say-on-pay approval, for the say-when-on-pay approval, for the 2017 Incentive Compensation Plan, and for the ratification of our independent registered accounting firm.

The presence at the Annual Meeting in person or by proxy of the holders of a majority of our outstanding shares of Common Stock entitled to vote shall constitute a quorum for the transaction of business. If a broker returns a “non-vote” proxy, indicating a lack of voting instructions by the beneficial holder of the shares and a lack of discretionary authority on the part of the broker to vote on a particular matter, then the shares covered by such non-vote proxy shall be deemed present at the meeting for purposes of determining a quorum but shall not be deemed to be represented at the meeting for purposes of calculating the vote required for approval of such matter. If a shareholder abstains from voting as to any matter, then the shares held by such shareholder shall be deemed present at the meeting for purposes of determining a quorum and for purposes of calculating the vote with respect to such matter, but shall otherwise not be deemed to have been voted on such matter. As a result, an abstention on any proposal will have no effect on the outcome of the proposal, except it will have the same effect as a vote against the 2017 Incentive Compensation Plan and against ratification of our independent registered accounting firm.

The mailing address of the principal executive office of Buffalo Wild Wings is 5500 Wayzata Boulevard, Suite 1600, Minneapolis, Minnesota 55416. We expect that this Proxy Statement, the related Form of Proxy, and Notice of Annual Meeting will first be mailed to shareholders on or about          , 2017.

2017 Annual Meeting of Shareholders   |   1

proxy summary

Below is a summary of the information included in this Proxy Statement. Please refer to the complete Proxy Statement for full information and before you vote.

Meeting Information

How to Cast your Vote

YOUR VOTE IS IMPORTANT! Please cast your vote using the enclosed YELLOW proxy card and play a part in the future of Buffalo Wild Wings, Inc.

Marcato Capital Management (together with its affiliates and related parties, “Marcato”) has notified Buffalo Wild Wings that Marcato intends to nominate four nominees for election to the Board of Directors at the meeting in opposition to the nominees recommended by our Board of Directors. You may receive a proxy statement, [color] proxy card and other solicitation materials from Marcato. Buffalo Wild Wings is not responsible for the accuracy of any information provided by or relating to Marcato or its nominees contained in solicitation materials filed or disseminated by or on behalf of Marcato or any other statements that Marcato may make.

The Buffalo Wild Wings Board of Directors unanimously recommends that you vote FOR the election of each of the nominees proposed on the YELLOW proxy card. Although you are permitted to grant a proxy to anyone who provides you with a valid form of proxy, our Board strongly urges you not to sign or return any [color] proxy card sent to you by Marcato. If you have previously submitted a [color] proxy received by you from Marcato, our Board encourages you to revoke that proxy card and vote for our Board’s nominees and on the other matters to be voted on at the meeting by completing, signing and returning the enclosed YELLOW proxy card.

If you have any questions or need assistance voting, please contact MacKenzie Partners, Inc., our proxy solicitor assisting us in connection with the Annual Meeting, toll-free at 1-800-322-2885.

2017 Annual Meeting of Shareholders   |   2

PROPOSALS and Board Recommendations

If you sign and return the YELLOW proxy card or submit a proxy by telephone or over the internet and do not specify how your shares are to be voted, your shares will be voted in accordance with the recommendations of the Board of Directors.

COMPANY HIGHLIGHTS

Corporate Governance

Executive Compensation

The Compensation Discussion and Analysis section includes a detailed description of our executive compensation practices and the 2016 compensation decisions and payouts.

2017 Annual Meeting of Shareholders   |   3

Background of the solicitation

The following timeline is provided in order to help shareholders understand the extent to which we have engaged with Marcato Capital Management (together with its affiliates and related parties, “Marcato”) during 2016 and 2017 regarding our strategic plan, our use of capital and our directors and nominees. These discussions have not led to an agreement between the parties, and Marcato has nominated four persons for election to serve as directors in place of four of the directors nominated and recommended for election by our Board of Directors. Our Board does not endorse the Marcato nominees other than Sam B. Rovit and unanimously recommends you vote the YELLOW proxy card FOR the election of each of the nominees recommended by our Board, including Sam B. Rovit.

On May 17, 2016, our Director of Investor Relations, Heather Pribyl, received and responded to an email from Matthew Hepler, a partner at Marcato, indicating that Marcato had acquired a 3.0% ownership position in the company.

On May 20, 2016, Mr. Hepler and Marcato Partner Mick McGuire had a phone conference with Ms. Pribyl. During this call Mr. McGuire and Mr. Hepler asked questions about the performance and operations of the company and asked about our current restaurant ownership profile.

On June 17, 2016, Mr. McGuire, Mr. Hepler and Eric Shapiro, Marcato analyst, met in Minneapolis with our CEO, Sally Smith, and other representatives from senior management. During this meeting, they toured a restaurant and Mr. McGuire, Mr. Hepler and Mr. Shapiro delivered a presentation calling for a change in compensation practices, cost-saving actions, increased international expansion, increased debt leverage and an immediate transition to a 90% franchised restaurant ownership profile (“refranchising”).

On June 28, 2016, Ms. Smith and Ms. Pribyl held a follow-up conference call with Mr. McGuire. On that call, Ms. Smith informed Mr. McGuire that Buffalo Wild Wings was already in the process of implementing many of the proposals made in Marcato’s presentation. Specifically, Ms. Smith highlighted Buffalo Wild Wings was in the process of amending future compensation plans, evaluating the capital allocation policy, initiating a cost-savings program and continuing to look for ways to quickly expand internationally. Mr. McGuire indicated to Ms. Smith that he expected the company to publicly commit to refranchising, within weeks. During this discussion, Mr. McGuire also disclosed to Ms. Smith that Marcato had increased its ownership to 4.9%.

On June 30, 2016, the Board of Directors held a meeting and invited representatives from its financial advisor, Lazard Freres & Co. (“Lazard”) to review the Marcato presentation in detail with our Board and to discuss the proposals presented.

On July 22, 2016, Ms. Smith and other members of our senior management team and a representative from Lazard met in person in Minneapolis for the second time with Mr. McGuire, Mr. Hepler and Mr. Shapiro, in the company’s home office. During that discussion, Ms. Smith provided background on our current restaurant ownership profile and explained some preliminary concerns with Marcato’s proposal of a 90% franchised model. Mr. McGuire stated that refranchising was central to his investment thesis for Buffalo Wild Wings. The same day, Marcato representatives and Lazard representatives held a follow-up call to review and discuss the assumptions used by Marcato in its presentation.

On July 25, 2016, the day prior to our second quarter earnings call, Marcato filed a Schedule 13D disclosing beneficial ownership of 5.1% of our outstanding common stock. That same day, Ms. Smith exchanged emails and a phone call with Mr. McGuire. The following day, Mr. McGuire emailed Ms. Smith a summary of analyst reactions to Marcato’s Schedule 13D.

On July 27, 2016, Ms. Pribyl held a follow-up call with Mr. Hepler and Mr. Shapiro during which they discussed our published results for the second quarter. During the days that followed, Ms. Smith and representatives of Lazard engaged in multiple phone calls and email exchanges with representatives of Marcato.

On July 30, 2016, Mr. Hepler informed representatives of Lazard by phone that Marcato expected a major announcement with respect to recapitalization and refranchising at the company’s upcoming Analyst Day. During this phone call, Mr. Hepler indicated his expectation that Marcato receive a commitment on refranchising plans from the company by August 2, 2016, three days following the phone call.

On July 31, 2016, advisors to the company provided Marcato with a non-disclosure agreement. Marcato executed the agreement on August 2, which allowed Marcato to see the materials to be presented at our Analyst Day on August 16, 2016.

2017 Annual Meeting of Shareholders   |   4

On August 3, 2016, we shared our preliminary Analyst Day script with Marcato.

On August 4, 2016, Lazard representatives held a call with Mr. McGuire regarding the draft materials. Mr. McGuire also had a phone conversation with our director, Oliver Maggard, on August 4. On August 5, 2016, in an effort to better understand the assumptions underlying Marcato’s financial models in its presentations, representatives of Lazard had a phone call with Mr. Hepler and Mr. Shapiro.

On August 7, 2016, Mr. Shapiro informed Lazard that Marcato was not willing to share any additional underlying financial analysis with respect to the models in Marcato’s presentation.

During the week of August 8, 2016, we furnished Marcato with further drafts of the Analyst Day materials. Mr. McGuire told Ms. Smith that he felt the company was not responding to the refranchising proposal effectively. He spoke with then-Chairman of our Board, James Damian, on the phone on August 10, and sent an email to Ms. Smith on August 11 regarding certain chief financial officer candidates that he felt should not be considered for the position.

On August 16, 2016, Buffalo Wild Wings held our Analyst Day, during which we shared details about our operations, growth plans and capital allocation strategy. Mr. Hepler and Mr. Shapiro attended the meeting. The following day, Marcato filed an amendment to its Schedule 13D that included a letter to Mr. Damian and a slightly revised version of the presentation that had been shared with management on June 17, 2016.

On August 18, 2016, at the company’s direction, Lazard had a discussion with Marcato’s counsel concerning the negotiation of a potential standstill and settlement. The parties were unable to come to an agreement during these discussions, as Mr. McGuire was only willing to consider such an agreement if two Marcato representatives (Mr. McGuire and Mr. Hepler) and three other Marcato-selected directors – a majority of the Board of Directors – were added. Marcato also demanded decision rights with respect to the appointment of our new chief financial officer.

On August 22, 2016, Marcato sent a letter demanding inspection of certain books and records of the company. We agreed to share shareholder list materials, in compliance with Minnesota law.

On August 23, 2016, a representative of Lazard, at the Company’s direction, contacted Marcato’s counsel to express openness to considering Marcato’s independent director suggestions.

On August 25, 2016, Marcato filed an amendment to its Schedule 13D that included a presentation criticizing certain elements of the Analyst Day presentation.

On August 29, 2016, we hosted a third in-person meeting in Minneapolis with Mr. McGuire and his team. During this meeting we further discussed the refranchising analysis and shared that we disagreed with the assumptions in the model. On August 31, 2016, Lazard representatives held a follow-up call with Marcato to further discuss these assumptions.

On September 12, 2016, Mr. Damian agreed to meet in person with Mr. McGuire and set October 18 as the date for that meeting.

On September 14, 2016, Marcato filed an amendment to its Schedule 13D.

On September 20, 2016, Mr. McGuire and Mr. Hepler met in person with Lazard representatives, during which meeting the parties continued to discuss modeling assumptions and other financial analysis. That same day, Marcato sent a second letter demanding inspection of certain books and records of the company, and we shared a shareholder lists from the company’s transfer agent and a list of shareholders through employee benefit plans.

On September 26, 2016, Ms. Smith held a call with Mr. McGuire during which they discussed Mr. McGuire’s proposals.

On October 5, 2016, Mr. McGuire presented Buffalo Wild Wings as an investment idea at the Ira Sohn Conference in San Francisco and, the next day, Marcato filed this presentation as an amendment to its Schedule 13D.

On October 11, 2016, after a thorough search process led by a leading national search firm and direct input from certain shareholders, the Board of Directors announced the addition of three new directors: Harmit Singh (Chief Financial Officer, Levi Strauss & Co.), Harry “Hal” Lawton (Senior Vice President of North America, eBay, Inc.) and Andre Fernandez (President, CBSRadio). The new directors were elected to fill vacancies created by the concurrent resignations of Dale Applequist and Warren Mack and an increase in the size of our Board by one.

On October 14, 2016, Marcato filed an amendment to its Schedule 13D reporting its demand for additional information relating to its earlier letters demanding inspection of books and records of the company.

2017 Annual Meeting of Shareholders   |   5

On October 18, 2016, Mr. Damian met in person with Mr. McGuire in Minneapolis, during which Mr. McGuire delivered to Mr. Damian his June presentation and provided additional feedback on the recent director appointments.

On October 24, 2016, following a thorough search with a leading national search firm, we announced the appointment of Alexander Ware as our new Chief Financial Officer.

On October 26, 2016, we held our regularly scheduled third quarter earnings call. The next day, Ms. Pribyl and our Chief Operating Officer, James Schmidt, held a follow-up call with Mr. Hepler and Mr. Shapiro to answer questions regarding our published results for the third quarter.

On October 26 and 27, 2016, Mr. McGuire and Mr. Maggard exchanged a series of emails, during which Mr. McGuire requested that he be permitted to address the full Board of Directors.

On November 18, 2016, during a regularly-scheduled meeting of the Board of Directors, our Board discussed Marcato’s latest interactions with management and directors. With assistance from its financial advisors, our Board also reviewed financial analysis of multiple refranchising scenarios, focusing on the impact to shareholder value.

On December 6, 2016, Marcato filed amendment to its Schedule 13D that included an open letter to our franchisees and announced the launch of a proxy solicitation campaign website.

On December 16, 2016, Mr. Ware, Mr. Singh, Mr. Lawton, and Ms. Pribyl held an in-person meeting with Mr. McGuire at his office in San Francisco. They were joined by Mr. Damian and an additional company director, Jerry R. Rose, on the phone. During this meeting, Mr. McGuire restated his thoughts on the performance of the company, the strength of the refranchising model and expectations of immediate action.

On December 19, 2016, the Board of Directors announced the appointment of Mr. Rose as its new Chair and Mr. Singh, Ms. Davis and Mr. Fernandez as the new chairs of its audit, compensation and governance committees, respectively.

On December 22 and 23, 2016, Mr. McGuire and Mr. Ware exchanged multiple emails and had a phone conversation regarding Marcato’s refranchising proposal and the timing of any action to be taken by Buffalo Wild Wings.

On December 23, 2016, Mr. McGuire sent emails to our management and certain directors regarding the announcement YUM! Brands had made about further refranchising efforts.

On January 18, 2017, the Board of Directors held a meeting during which it conducted a thorough review of sales driving and cost savings initiatives and evaluated our company’s capital allocation plans.

On January 24, 2017, we issued a press release announcing an expansion of our share repurchase program, as well as an acceleration of the time frame in which we will reach our leverage target.

On January 31, 2017, and February 6, 2017, Mr. Emil Lee Sanders, a Marcato Board nominee, contacted multiple franchisees to say he was interested in buying Buffalo Wild Wings restaurants from franchisees.

On February 6, 2017, Marcato filed an amendment to its Schedule 13D to announce its intention to nominate four director candidates for election at the Annual Meeting.

On February 7, 2017, we held our regularly scheduled fourth quarter and fiscal year earnings call. Ms. Pribyl and Mr. Ware held a follow-up call with Mr. Shapiro the following day to discuss our published results for the fourth quarter and full fiscal year.

On February 14, 2017, the Board of Directors met and discussed the Marcato nominations and settlement options.

The Board of Directors held a teleconference meeting on February 17, 2017, to further discuss initiating settlement negotiations with Mr. McGuire.

On February 20, 2017, at the company’s direction, the company’s financial advisor spoke with Mr. McGuire regarding a settlement. The company offered Marcato representation on its Board of Directors. Mr. McGuire indicated that he was only interested if all four of his nominees would be seated on the Board.

On February 22, 2017, Marcato filed an amendment to its Schedule 13D, which included a presentation directed to our shareholders.

On February 24, 2017, Mr. Fernandez spoke with Mr. McGuire on the phone to discuss scheduling interviews for each

2017 Annual Meeting of Shareholders   |   6

of the four Marcato nominees as part of the Governance Committee’s customary evaluation process. Mr. McGuire did not commit that he or his nominees would participate during this call.

On February 25, 2017, Mr. McGuire called Mr. Fernandez to inform him that Marcato’s director nominees would participate in director interviews, but that Mr. McGuire himself would not submit to the inverview process. Over the next few days, Marcato and Buffalo Wild Wings, through their respective counsel, arranged for telephone interviews with each of Marcato’s nominees, other than Mr. McGuire.

On March 6 and 7, 2017, the Governance Committee conducted telephone interviews with Marcato nominees Emil Lee Sanders, Sam Rovit and Scott Bergren. The Governance Committee met later in the day on March 7, 2017, to discuss the interviews and further evaluate the candidates, including whether they might recommend any of the director nominees to the Board of Directors.

On March 8, 2017, Marcato issued a press release with a presentation that documented stock sales of members of management and our Board of Directors.

On March 13, 2017, the independent association of Buffalo Wild Wings franchisees, Franchise Business Services, issued a press release announcing their support of management and their strategies for Buffalo Wild Wings.

On March 22, 2017, Mr. Rose conducted an additional telephone interview with Mr. Rovit.

On March 23, 2017, Marcato filed a preliminary proxy statement.

On March 24, 2017, a representative of Spotlight Advisors, a financial advisor to the company, spoke with Mr. McGuire on the phone to discuss settlement opportunities, but the parties were unable to come to agreement on a settlement.

On March 26, 2017, Mr. Rose spoke with Mr. Rovit by telephone and Mr. Rovit confirmed his prior written statements indicating his willingness to be nominated by the company for election to the Board of Directors. After interviewing multiple candidates and considering the Marcato nominees, the Board of Directors announced its decision to include Janice L. Fields (former President of McDonalds USA, LLC) and Sam B. Rovit (CEO of CTI Foods), on our 2017 slate of director nominees. The Board also announced that Mr. Damian and Michael Johnson will not be standing for re-election in 2017.

On March 27, 2017, the company issued a press release and filed a current report on Form 8-K announcing its 2017 slate of director nominees.

On March 28, 2017, the company announced that it had retained The Cypress Group, a restaurant and franchise investment banking firm, to manage the company’s previously announced portfolio optimization initiative, and filed its preliminary proxy statement for the Annual Meeting. Marcato filed a comment on the company’s engagement of The Cypress Group in the form of additional soliciting materials.

On March 29, 2017, Mr. Rovit sent an email to Mr. Fernandez, the chair of our Governance Committee, inquiring about the use of a “universal proxy ballot.” Mr. Fernandez responded by indicating that the Board had carefully considered the use of such a ballot and, for a variety of reasons some of which Mr. Fernandez enumerated, the company would not be using such a novel approach for the solicitation of proxies for the Annual Meeting.

On April 4, 2017, Marcato filed an Amendment No. 1 to its preliminary proxy statement.

On April 5, 2017, the company filed this Amendment No. 1 to its preliminary proxy statement.

2017 Annual Meeting of Shareholders   |   7

ELECTION OF DIRECTORS (Proposal #1)

Our Bylaws provide that the number of directors shall be the number set by the shareholders at each regular meeting (though the Board of Directors may increase and the shareholders may increase or decrease the number between regular meetings). The Bylaws require that we have at least one director. In accordance with our principles of corporate governance, which require at least seven directors, and the recommendations of the Governance Committee, the Board of Directors set the number of directors at nine and selected the persons listed below as nominees to be elected at the Annual Meeting. Unless otherwise instructed, the proxies will be voted to elect the nine nominees listed below, thereby setting the number of members of the Board at nine. The election of the nominees to the Board requires the affirmative vote of a plurality of the shares represented in person or by proxy at the Annual Meeting with authority to vote on such matter. As such, the nine directors receiving the most votes at the Annual Meeting will be seated as Directors.

You may receive a proxy statement, [color] proxy card and other solicitation materials from Marcato. The Buffalo Wild Wings Board of Directors does not endorse any Marcato nominees other than Sam B. Rovit and unanimously recommends that you vote FOR the election of each of the nominees proposed by the Board of Directors, including Sam B. Rovit, on the YELLOW proxy card.  Please note that voting to “withhold” with respect to any Marcato nominee on a [color] proxy card sent to you by Marcato is not the same as voting for your Board’s nominees because a vote to “withhold” with respect to any Marcato nominee on its [color] proxy card will revoke any YELLOW proxy you may have previously submitted. To support the Board of Directors’ nominees, you should vote FOR the Board’s nominees on the YELLOW proxy card and disregard, and not return, any [color] card sent to you by Marcato. If you have previously submitted a [color] proxy card sent to you by Marcato, you can revoke that proxy and vote for the Board of Directors’ nominees and on the other matters to be voted on at the meeting by using the enclosed YELLOW proxy card.

Your vote is very important. Even if you plan to attend the Annual Meeting, we request that you vote your shares by signing, dating and returning the enclosed YELLOW proxy card in the postage-paid envelope provided or by voting via the Internet or by telephone using the instructions provided on the enclosed YELLOW proxy card. If your brokerage firm, bank, broker-dealer or other similar organization is the holder of record of your shares (i.e., your shares are held in “street name”), you will receive voting instructions from the holder of record. You must follow these instructions in order for your shares to be voted. Your broker is required to vote those shares in accordance with your instructions. Because of the contested nature of the proposals, if you do not give instructions to your broker, your broker may not be able to vote your shares with respect to the election of directors or any of the other proposals. We urge you to instruct your broker or other nominee, by following those instructions, to vote your shares in line with the Board’s recommendations on the YELLOW proxy card.

The persons named as proxies intend to vote the proxies FOR the election of each of the Board’s nominees unless you indicate on the YELLOW proxy card a vote to “WITHHOLD” your vote with respect to any of the nominees.

If elected, the individuals listed below shall serve until the next annual meeting of shareholders and until their successors are duly elected and qualified. Seven of the nine nominees identified in this proxy statement are current members of the Board of Directors. If, prior to the Annual Meeting, it should become known that any one of these nominees will be unwilling or unable to serve as a director after the Annual Meeting by reason of resignation, death, incapacity, or other unexpected occurrence, the proxies will be voted for such substitute nominee(s) as may be selected by the Board. Alternatively, the proxies may, at the Board’s discretion, be voted for such fewer number of nominees that may result from such resignation, death, incapacity, or other unexpected occurrence. Each of the nominees identified in this proxy statement has agreed in writing to be named as a nominee in our proxy soliciting materials for the Annual Meeting and to serve as a director if elected at the Annual Meeting. The Board has no reason to believe that any of the nominees listed below will withdraw or become unable to serve.

THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES
IDENTIFIED IN THIS PROXY STATEMENT AND THE YELLOW PROXY CARD.

2017 Annual Meeting of Shareholders   |   8

BUSINESS EXPERIENCE AND QUALIFICATIONS
	Jerry R. Rose   Director Since: 2010   Age: 66   Board Roles: Chairman of the Board		Cynthia L. Davis   Director Since: 2014   Age: 55   Board Roles: Compensation Committee Chair Governance Committee
Career Highlights and Experience: Mr. Rose served as Corporate Vice President of Cargill, Inc. from 2004 to September 2012. Mr. Rose began his career at Cargill as a Financial Management Trainee and, during his 40-year tenure there, had multiple roles in the Accounting and Finance departments and gained extensive restaurant and supply chain expertise. Mr. Rose spent almost one half of his career working directly with a large number of restaurant chains, many of which were multi-national. Mr. Rose’s responsibilities included approving major dedicated supply chain operations and major innovation models, all of which required a significant understanding of each chain’s strategy. He drove the strategy for Cargill’s international investment activities and acquisitions, as well as serving as chair of the Cargill Business Excellence Committee, which focused on developing high-performance businesses in Cargill worldwide. Mr. Rose was assigned to Sunny Fresh Foods, where he worked for 12 years, rising to President in 1995. Under Rose’s leadership, Sunny Fresh Foods became the first food company to receive the Malcolm Baldrige Quality Award in 1999. He was a member of the Corporate Center and a platform leader for the Cargill Animal Nutrition, Animal Protein & Salt Platform and the Cargill BioFuels, BioIndustrial & Emerging Business Platform. He is a past member of the North Dakota and Arkansas State Societies of Certified Public Accountants and the American Institute of Certified Public Accountants.   Other Affiliations:   ·        Daybreak Foods, a privately-held large egg production company operating in the United States, board and chairman since January, 2013.   Additional Qualifications and Skills: Mr. Rose is a financial expert who brings to our Board of Directors experience in strategic planning, acquisitions and capital allocation. He has senior management experience in a large global organization and brings experiences from the many restaurant companies he supported. He brings expertise in food production and processing, food manufacturing, financial markets, transportation and animal nutrition.		Career Highlights and Experience: Ms. Davis served as an executive at Nike for 10 years, most recently as Vice President of Nike Inc. and President of Nike Golf from 2008 until her retirement in December 2014. In her role with Nike Golf, she led the $800 million global golf business, including all product, marketing, sports marketing, sales, operations, finance, legal, and human resources responsibilities. Davis drove innovative profitable growth and a team of elite athletes headlined by two of the most iconic golf athletes. To that end, in 2013, she was recognized as one of Sports Illustrated’s “50 Most Powerful People in Sports.” Prior to joining Nike in 2005, Davis was the Senior Vice President of Golf Sponsorships, Sports Marketing and New Media for the Golf Channel. Leading up to that, she was the President and CEO of The Arnold Palmer Golf Company after serving as Vice President of the Ladies Professional Golf Association (LPGA). Davis is a former chairperson of the National Golf Foundation (NGF) and has served on the Golf 20/20 Executive Committee.   Other Affiliations:   ·        Kennametal Inc. board of directors, including service on its audit and governance committees, since December 2012   Additional Qualifications and Skills: Through her business background, Ms. Davis brings to the Board of Directors significant global business leadership skills. She has experience in strategic planning, innovation and consumer initiatives, go-to-market profitable growth plans, and expertise in the sports industry. She also brings corporate governance experience to the Board, through her experience with other public companies.

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BUSINESS EXPERIENCE AND QUALIFICATIONS
	Andre J. Fernandez   Director Since: 2016   Age: 48   Board Roles: Governance Committee Chair Audit Committee		Janice L. Fields   Director Since: N/A   Age: 61   Board Roles: N/A
Career Highlights and Experience: Mr. Fernandez is the President and Chief Executive Officer of CBS RADIO. In this role, Mr. Fernandez is responsible for the overall direction and management of that company, which includes 117 over-the-air radio stations in 26 major markets, production and distribution of original content in sports, news and entertainment, and production of live events and festivals. Prior to joining CBS RADIO, Mr. Fernandez worked for Journal Communications Inc. from October 2008 to March 2015, where he served in multiple operating, financial and strategy roles, most recently as the President and Chief Operating Officer. Previously, Mr. Fernandez served in a number of leadership roles of increasing responsibility at the General Electric Company, including Chief Financial Officer of Telemundo Communications; Chief Financial Officer and Controller of GE Latin America; Chief Financial Officer of GE Digital Energy; Assistant Treasurer of GE Corporate Treasury; and Chief Financial Officer of GE Capital Information Technology Solutions (ITS) Brazil. Additionally, Mr. Fernandez has been named to Billboard’s “Power 100” list which recognizes the most influential executives in the music industry and was ranked the second most powerful person in radio on Radio Ink’s “40 Most Powerful People in Radio” list.   Other Affiliations:   ·        National Association of Broadcasters board of directors since May 2016.   ·        Froedtert Health, a $2 billion academic healthcare system based in Wisconsin, board of directors since July 2011, Vice Chair from 2014-2016.   ·        Television Bureau of Advertising, board member from 2014-2015.   Additional Qualifications and Skills: Mr. Fernandez brings to the Board of Directors global executive leadership skills. He has experience in mergers & acquisitions, P&L management, strategic planning, marketing, digital, global operations and sales.		Career Highlights and Experience: Ms. Fields served as President of McDonald’s USA, LLC, a subsidiary of McDonald’s Corporation, a fast food chain operator and franchiser, from January 2010 until her retirement in November 2012. Ms. Fields career at McDonald’s spanned more than 35 years. Ms. Fields held numerous other roles at McDonald’s, having started her career as a crew member. Prior to serving as President, she held several executive positions within McDonald’s USA, including U.S. Division President for the Central Division from 2003 through 2006 and Executive Vice President and Chief Operating Officer from 2006 through January 2010.   Other Affiliations:   ·        Monsanto Corporation board of directors since 2008, chair of Sustainability and Corporate Responsibility Committee since 2015.   ·        Chico’s FAS board of directors since 2013, chair of Corporate Governance and Nominating Committee since 2014.   ·        Ronald McDonald House Charities Global Brand, a nonprofit organization supporting children’s health, board of directors since 2012.   Additional Qualifications and Skills: Ms. Fields will bring to the Board of Directors a wealth of restaurant industry experience. She has expertise related in operations franchising, marketing, risk management, supply chain, human resources and strategic planning.

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BUSINESS EXPERIENCE AND QUALIFICATIONS
	Harry A. Lawton   Director Since: 2016   Age: 42   Board Roles: Compensation Committee		J. Oliver Maggard   Director Since: 1999   Age: 62   Board Roles: Audit Committee
Career Highlights and Experience: Mr. Lawton has served as Senior Vice President of North America at eBay, Inc. since May 2015. At eBay, Mr. Lawton’s responsibilities include all functions for the Americas business unit, including merchandising, marketing, operations, business selling, consumer selling, and advertising. He also has global responsibility for shipping, payments and risk, and trust functions. Before joining eBay, Mr. Lawton held a number of leadership positions at Home Depot, Inc. from May 2005 until May 2015, including Senior Vice President of Merchandising of Hardlines, and Senior Vice President and President of that company’s online business. Prior to Home Depot, Mr. Lawton served as an Associate Principle for McKinsey & Company from 2000 to 2005.   Other Affiliations:   ·        Children’s Discovery Museum of San Jose board of directors since 2015   ·        UVA Darden School corporate advisory board since 2011   Additional Qualifications and Skills: Mr. Lawton brings to our Board of Directors extensive experience in retail, technology, and global operations. He also contributes to the general management and strategic business development skills of our Board.		Career Highlights and Experience: Mr. Maggard has served as Managing Partner of Caymus Partners LLC, an investment banking firm, since October 2002, and as a Managing Partner of its affiliate Caymus Equity Partners, LLC, a private equity firm, since its founding in 2012. From January 1995 to October 2002, Mr. Maggard was a Managing Director and Partner of Regent Capital Management Corp., a private equity firm which he co-founded. Prior to founding Regent Capital, Mr. Maggard held various positions with Bankers Trust Company, Kidder Peabody & Company, Inc., Drexel Burnham Lambert Incorporated, and E.F. Hutton & Co.   Other Affiliations:   ·        Serves as a director of four portfolio companies of Caymus Equity Partners, LLC, all privately held companies, including a chain of physical therapy facilities, a unit play in the consumer/wellness space, since 2016   Additional Qualifications and Skills: Mr. Maggard has significant financial experience and brings strong leadership to our Board of Directors and its Audit Committee. Throughout his career, he has advised and invested in numerous consumer oriented businesses, including multiple restaurant concepts. While reviewing hundreds of investment opportunities each year, he has a thorough understanding of the drivers of value in both public and private companies. He understands the importance of unit level economics as one of those value drivers, as well as how they have an impact on the financials of the overall company.

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BUSINESS EXPERIENCE AND QUALIFICATIONS
[Photo to Come]	Sam B. Rovit   Director Since: N/A   Age: 59   Board Roles: N/A		Harmit J. Singh   Director Since: 2016   Age: 54   Board Roles: Audit Committee (Chair)
Career Highlights and Experience: Since October 2015, Mr. Rovit has served as President and Chief Executive Officer of CTI Foods, a leading provider of custom food solutions to major chain restaurants and food manufacturers. From September 2013 until March 2015, Mr. Rovit served as President of the Refrigerated Meals Business Unit at Kraft Foods, where he was responsible for managing iconic brands such as Oscar Mayer, Lunchables and Claussen Pickles. From February 2011 until August 2013, Rovit served as Kraft’s EVP, Strategy, and President of Planters Nuts. Prior to that, Mr. Rovit was President and CEO of Swift & Company, and he also served as Partner and Director at Bain & Company, Inc. where he led the firm’s Global Mergers & Acquisitions Practice. Additional Qualifications and Skills: Mr. Rovit is a seasoned executive with over 20 years of experience in the food services industry. He has built and led consumer retail brands, and managed and serviced complex manufacturing supply chains. He will provide the Board and company with valuable industry knowledge, management experience and insight into value-maximizing strategies.		Career Highlights and Experience: Mr. Singh has served as Executive Vice President and Chief Financial Officer at Levi Strauss & Co. since January 2013. He is responsible for managing that company’s finance, information technology, strategic sourcing and global business services functions globally. Previously, Mr. Singh was Executive Vice President and Chief Financial Officer of Hyatt Hotels Corporation from 2008 to December 2012. Prior to that, he spent 14 years at Yum! Brands, Inc. in a variety of global leadership roles including Senior Vice President and Chief Financial Officer of Yum! Restaurants International (2005-2008) and Pizza Hut (2003-2005). Before joining Yum!, Mr. Singh worked in various financial capacities for American Express India & Area Countries.   Other Affiliations:   ·        CNBC Global CFO Council, member 2015   ·        Wall Street Journal CFO Network, member 2014   ·        Avendra, LLC, board of directors and audit committee chair from 2009 to 2012.   ·        Chartered Accountant from India   Additional Qualifications and Skills: Mr. Singh brings to our Board of Directors broad financial knowledge across a variety of industries, including financial services, restaurants, hospitality and retail apparel. He also brings global experience in franchisee management, real estate and development, growth expansion and business turnarounds. He has worked with a diverse group of shareholders - both of public and private companies. During his professional career he has lived in 3 countries and 5 cities.

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BUSINESS EXPERIENCE AND QUALIFICATIONS
	Sally J. Smith   Director Since: 1996   Age: 59
Career Highlights and Experience: Ms. Smith has served as our Chief Executive Officer and President since July 1996. She served as our Chief Financial Officer from 1994 to 1996. Prior to joining Buffalo Wild Wings, she was the Chief Financial Officer of Dahlberg, Inc., the manufacturer and franchisor of Miracle-Ear hearing aids, from 1983 to 1994. Ms. Smith began her career with KPMG LLP, an international accounting and auditing firm. Ms. Smith is a CPA.   Other Affiliations:   ·        Hormel Foods Corporation board of directors since 2014   ·        Alerus Financial Corporation, a private chain of financial institutions based in Grand Forks, North Dakota, board of directors since 2007   ·        Allina Health, a not-for-profit health care system with 13 hospitals and more than 90 clinics, board of directors since 2012   ·        National Restaurant Association board of directors, including service as its chairperson in 2011   Additional Qualifications and Skills: Ms. Smith has led our company through significant growth and success. Her financial background gives her focus on the details of restaurant economics and her involvement in the National Restaurant Association exposes her to the current issues in the restaurant industry. Her election as 2011 chairperson demonstrates that she is respected as an industry leader.

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CORPORATE GOVERNANCE

Our business affairs are conducted under the direction of our Board of Directors in accordance with the Minnesota Business Corporation Act and our Articles of Incorporation and Bylaws. Members of our Board are informed of our business by discussing matters with management, reviewing materials provided to them, and participating in meetings of our Board and its committees. The corporate governance practices that we follow are summarized below.

Recent Key Governance Actions

Our Board of Directors and its Governance Committee took significant actions in 2016 to enhance the composition of our Board and its effectiveness in guiding us through our future strategy. The Governance Committee, as part of its Board review and composition duties, conducted a thorough search process, which resulted in the nomination of three highly-qualified directors. The search process began with a review of the skills and experience of the current Board, as well as the diversity of backgrounds and expertise represented by the directors. The Governance Committee worked with a leading executive and director search firm to refine the profile of their desired candidates and then conducted a screening process of more than 20 candidates, which included resume reviews, interviews and background checks. The Committee interviewed the final three candidates and decided to recommend all three to our Board for election, given the breadth of their experience and qualifications. In conjunction with the election of these new directors, two of our longer-tenured directors resigned from our Board. Our Board and the Governance Committee are committed to an enhanced Board refreshment plan ongoing into the future.

The Governance Committee also recommended, and our Board approved, new leadership appointments in December 2016, which took effect on January 3, 2017. As a result, Jerry Rose was appointed Chairman of the Board, Cindy Davis was appointed Chair of the Compensation Committee, Andre Fernandez was appointed Chair of the Governance Committee, and Harmit Singh was appointed Chair of the Audit Committee. Each of these appointments reflects the strengths of the individual in those positions, and the Board is confident these are the appropriate leaders for success. Our Board is committed to a robust leadership rotation plan for the future. In addition, the Governance Committee, following their established nomination process, interviewed and considered each of the independent directors proposed by Marcato and interviewed and considered additional nominees.This process led to our Board, upon recommendation of its Governance Committee, nominating both Janice L. Fields and Sam B. Rovit to stand for election by our shareholders at the Annual Meeting.

Independence

Our Board of Directors has determined that a majority of its members and nominees are “independent directors” as defined by the listing standards of The Nasdaq Stock Market LLC (“NASDAQ”). The independent directors serving on our Board are Janice L. Fields, Cynthia L. Davis, Andre J. Fernandez, Sam B. Rovit, Harry A. Lawton, J. Oliver Maggard, Jerry R. Rose and Harmit J. Singh. In determining independence, our Board considered that Mr. Fernandez is the President of CBS Radio, which received payment for advertising. The amount involved was significantly less than 5% of either party’s gross revenue. It was determined that this relationship does not interfere with Mr. Fernandez’s ability to exercise independent judgment in carrying out the responsibilities of a director.

Code of Ethics & Business Conduct

Our Board of Directors has approved a Code of Ethics & Business Conduct, which applies to all of our Team Members, directors, and officers, and also a Code of Ethics (“Executive Code of Ethics” and together with our Code of Ethics & Business Conduct, the “Codes”), which applies to our principal executive officer, principal financial officer, principal accounting officer, controller, executive and senior vice presidents, vice presidents, and select financial leaders. The Codes address such topics as protection and proper use of our assets, compliance with applicable laws and regulations, accuracy and preservation of records, accounting and financial reporting, conflicts of interest, and insider trading. The Codes are available free of charge on our website at www.buffalowildwings.com and are available in print to any shareholder who sends a request for a paper copy to Buffalo Wild Wings, Inc., Attn. Investor Relations, 5500 Wayzata Boulevard, Suite 1600, Minneapolis, Minnesota 55416. We intend to include on our website any amendment to, or waiver from, a provision of our Executive Code of Ethics that applies to

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our principal executive officer, principal financial officer, principal accounting officer, or controller and relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K.

Meeting Attendance

Board and Committee Meetings. During fiscal 2016, our Board of Directors held seven meetings. Each director attended at least 75% of the meetings of the Board and the committees on which such director served.

Annual Meeting of Shareholders. Our policy is that all directors are expected to attend our annual meeting of shareholders. If a director is unable to attend an annual meeting, the director must send a written notice to our Secretary at least one week prior to the meeting. All of our directors attended our 2016 Annual Meeting of Shareholders.

Executive Sessions of the Board

An executive session of independent directors is generally held at the time of each regular Board of Directors meeting.

Board Leadership Structure

Our principles of corporate governance give the Board of Directors the authority to choose whether the roles of Chairman of the Board and Chief Executive Officer are held by one person or two people. Our Board has chosen to have separate people fill the role of Chairman and CEO, and we believe that our current leadership structure is appropriate at this time.

Our Chief Executive Officer and Chairman have an excellent relationship that has given the Chief Executive Officer the freedom to successfully manage our company under the strong and insightful guidance of the Board of Directors. Our Board has eight independent members and one non-independent member, who is also our Chief Executive Officer. We believe that the number of independent, experienced directors that make up our Board, along with the independent oversight of the Board by the non-executive chairman, benefits us and our shareholders. All our independent directors have demonstrated leadership in other organizations and are familiar with Board processes.

Board’s Role in Risk Oversight

While each of the committees of the Board of Directors evaluate risk in their respective areas of responsibility, our Governance Committee is primarily responsible for overseeing the risk management processes on behalf of the full Board. We believe that designating a committee to be specifically focused on our company’s risk profile is beneficial, given the increased importance of monitoring risks in the current economic and business climate. We employ a risk management team that oversees day-to-day company risks as well as enterprise and strategic risk management. The Governance Committee meets with a member of the risk management team at every regular meeting to discuss our company’s risk profile and hear a report on specific issues as well as an enterprise risk assessment, and the member of the risk management team is given the opportunity for an executive session with the Governance Committee. The Governance Committee reports to the full Board on the most significant risk issues.

In addition to the Governance Committee’s role in enterprise risk management oversight, other committees also play a role in risk oversight. Our Compensation Committee is responsible for the oversight of our talent and compensation risk. With respect to compensation-related risk, the Compensation Committee completes an annual review of the Team Member compensation plans in order to determine whether any of the plans or policies are reasonably likely to have a material adverse effect on our company. To complete this review, we first considered all compensation policies and practices for our Team Members, including the base salaries, annual/quarterly cash incentive and long-term equity incentive award plans of our executive officers, as well as the compensation plans of our management-level Home Office Team Members, Field Leadership Team and Restaurant General Managers. This review is assisted by our outside compensation consultant. As part of our review, we considered whether any of our compensation policies and practices varied significantly from the overall risk and reward structure of our company and whether any of our compensation policies and practices incent individuals to take short-term risks that are inconsistent with our long-term goals. Upon completion of this review, our Compensation Committee determined there are no risks arising from our company’s compensation policies and practices that are reasonably likely to have a material adverse effect on our company.

Our Audit Committee is responsible for the oversight of our internal control and financial reporting risk. Internal control and financial reporting risk relates to the reliability of our financial reporting and compliance. Our Audit Committee receives regular updates from our legal department, internal audit department and representatives of our independent registered public accounting firm, which include updates on any risks arising from changes in government regulation to which we are subject. Our

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Audit Committee and, when appropriate, the full Board of Directors provides input on data risk as the processes, procedures and internal controls we have established concerning our data privacy and protection are integrally related to the internal controls we have established for financial reporting and compliance.

Our Board of Directors is also responsible for the oversight of our competitive environment, brand damage and cyber security risk. Competitive environment risk is monitored by the full Board through the periodic review of our operating performance and strategic plan. Brand damage risk is the risk to our company’s brand and reputation that may arise from a major incident or negative comments in the media, including social media. The Board receives periodic reports from management on potential incidents or media exposure that may cause damage to our brand and the risks relating to such damage. The full Board, and the Governance Committee in particular, regularly hears reports on management’s work upgrading and maintaining its information technology and systems to protect our company, to the greatest extent possible, against cyber risks and security breaches.

While the Board of Directors and the Governance Committee provide oversight to our risk management team, management is ultimately responsible for day-to-day risk management activities. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company, and our Board leadership structure supports this approach.

Committees of the Board

Our Board of Directors has established the following committees: Audit Committee, Compensation Committee, Governance Committee, Executive Committee and Compliance Committee.

Audit Committee. The Audit Committee reviews, in consultation with our independent registered public accounting firm, our financial statements, accounting and other policies, accounting systems, internal audit reports, and the adequacy of internal controls for compliance with corporate policies and directives. The Audit Committee is responsible for the engagement of our independent registered public accounting firm and reviews other matters relating to our relationship with our independent registered public accounting firm. The Audit Committee also oversees the administration of our related party transactions policy, which is described in “Certain Relationships and Related Transactions” on page 59. The “Report of Audit Committee” is included on page 61. The Audit Committee held twelve meetings during fiscal 2016.

The current members of the Audit Committee are Harmit J. Singh, Chair, James M. Damian, Andre J. Fernandez, and J. Oliver Maggard. All members of the Audit Committee are “independent directors” as defined by NASDAQ’s listing standards and meet the additional independence criteria for audit committee members set forth in the listing standards and SEC Rule 10A-3. The Board of Directors has determined that Andre J. Fernandez, J. Oliver Maggard, and Harmit J. Singh are “audit committee financial experts” as defined by Item 407(d)(5) of Regulation S-K under the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We acknowledge that the designation of Mr. Fernandez, Mr. Maggard, and Mr. Singh as audit committee financial experts does not impose on Mr. Fernandez, Mr. Maggard, and Mr. Singh any duties, obligations, or liability greater than the duties, obligations, and liability imposed on Mr. Fernandez, Mr. Maggard, and Mr. Singh as a member of the Audit Committee and the Board in the absence of such designation or identification.

Compensation Committee. The Compensation Committee develops and administers compensation policies and plans and is responsible for producing the “Compensation Committee Report,” which is on page 41 of this Proxy Statement. The Compensation Committee designs and oversees our compensation programs for our Chief Executive Officer, Chief Operating Officer, Executive Vice Presidents, and Senior Vice Presidents. Our independent directors are responsible for final approval of the Chief Executive Officer’s compensation. The Compensation Committee is vested with the same authority as the Board of Directors with respect to the granting of awards and the administration of our equity and non-equity plans. As part of its annual performance review of the Chief Executive Officer, which is conducted in connection with recommending the Chief Executive Officer’s compensation, the Compensation Committee may interview other executive officers. In approving compensation for other executive officers, the Compensation Committee takes into account recommendations from the Chief Executive Officer, among other factors. The Compensation Committee held seven meetings during fiscal 2016.

The current members of the Compensation Committee are Cynthia L. Davis, Chair, Michael P. Johnson, and Harry A. Lawton. All members of the Compensation Committee are “independent directors” as defined by NASDAQ’s listing standards; “non-employee directors” as defined by Rule 16b-3 of the Exchange Act; and “outside directors” as defined in Section 162(m) of the Internal Revenue Code. All of the committee members also meet the additional independence criteria for compensation committee members set forth in the listing standards and SEC Rule 10C-1 promulgated under the Exchange Act.

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In setting 2016 compensation, the Compensation Committee retained Frederic W. Cook, Inc. (“FW Cook”) as its compensation consultant. FW Cook was retained by and reported directly to the Compensation Committee. The Compensation Committee consulted with FW Cook regarding our compensation plans, policies, and annual programs, with FW Cook attending most of the Committee’s meetings. FW Cook did not provide any other consulting services to us. We have concluded that the work of the compensation consultant in fiscal 2016 did not raise any conflict of interest.

Governance Committee. The Governance Committee, acting as a nominating committee, screens and recommends to the Board of Directors candidates for nomination. The Committee also recommends to the Board the members of various committees, addresses corporate governance matters and oversees enterprise risk management. The current members of the Governance Committee are Andre J. Fernandez, Chair, Cynthia L. Davis, and Michael P. Johnson. All members of the Governance Committee are independent directors. The policies of the Governance Committee are described more fully in the “Governance Committee Report” on page 18. The Governance Committee held eleven meetings during fiscal 2016.

In recommending the non-employee director compensation to the Board of Directors, the Governance Committee retained FW Cook as its consultant. Also during 2016, the Governance Committee engaged a professional search firm to assist in identifying and evaluating candidates to serve as directors.

Executive Committee. During the intervals between meetings of the Board of Directors, the Executive Committee has all the powers of the Board in the management of our business, properties and affairs, including any authority to take action provided in our Bylaws to be taken by the Board, subject to applicable laws. The Executive Committee, however, is not authorized to fill vacancies of the Board or its committees, declare any dividend or distribution or take any action which, pursuant to the Bylaws, is required to be taken by a vote of a specified portion of the whole Board. On December 19, 2016, the Board of Directors dissolved the Executive Committee effective January 3, 2017. The members of the Executive Committee were Sally J. Smith, J. Oliver Maggard, and James M. Damian. The Executive Committee held one meeting during fiscal 2016.

Compliance Committee. On December 4, 2008, to comply with Nevada gaming laws, the Board of Directors formed a Compliance Committee, which was empowered to exercise its best efforts to identify and evaluate situations arising in the course of our business that may adversely affect the objectives of gaming control. As established, the Compliance Committee was to have at least three members, including a director and at least one person who is familiar with gaming regulatory laws and procedures and is independent of our company. For approximately the past eight years, the three members of the Compliance Committee were now-retired board member Warren E. Mack, our Chief Operating Officer, James M. Schmidt, and an outside independent member. The Compliance Committee held four meetings during fiscal 2016.

After eight years of operating its gaming compliance program in good standing, we, with approval from the Board of Directors, has petitioned the Nevada Gaming Control Board (“NGCB”) to request administrative consideration and approval to modify its gaming compliance plan so as to remove the plan’s requirement to maintain a Compliance Committee; the pending request also seeks to have the plan’s Compliance Officer (who is an employee of our company) now provide semi-annual compliance reports directly to the Chief Operating Officer—instead of quarterly reports to the Compliance Committee—and an annual compliance summary to the Governance Committee. Outside gaming counsel will provide the semi-annual compliance reports to the NGCB and will continue to advise the Compliance Officer, and, as needed, the Governance Committee, on relevant compliance issues. With direction from the Governance Committee, the Compliance Officer may use any of our resources and whatever means she/he deems appropriate to support the objectives of gaming control. We expect to receive a response to our modification request later this year.

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Communications with the Board

Shareholders may communicate directly with the Board of Directors. All communications should be directed to our Secretary at the address below and should prominently indicate on the outside of the envelope that it is intended for the Board of Directors or for non-management directors. If no specific director is named, the communication will be forwarded to the entire Board. The communication will not be opened before being forwarded to the intended recipient, but it will go through normal security procedures. Shareholder communications to the Board should be sent to the attention of our “Corporate Secretary” at:

Buffalo Wild Wings, Inc.
5500 Wayzata Boulevard, Suite 1600
Minneapolis, MN 55416

GOVERNANCE COMMITTEE REPORT

The Governance Committee is comprised of independent directors. In accordance with its written charter, as well as the principles of corporate governance adopted by the Board of Directors and the nominating policies, the Governance Committee assists the Board with fulfilling its responsibilities regarding any matters relating to corporate governance, including selection of candidates for our Board. Its duties include oversight of: the principles of corporate governance by which Buffalo Wild Wings and the Board are governed; the codes of ethical conduct and legal compliance by which Buffalo Wild Wings and its directors, executive officers, Team Members, and agents are governed; policies for evaluation of the Board and the chairperson; policies for election and reelection of directors; and policies for succession planning for the Chief Executive Officer, Board chairperson, and other Board leaders. In addition, the Committee is responsible for ongoing review of the composition of the Board, focusing on the governance and business needs and requirements of our company, screening of director candidates and recommending nominees to the Board, evaluating the performance of directors, recommending director compensation to the Board and recommending the reelection of directors who are performing effectively and who continue to provide a competency needed on the Board. The Governance Committee is committed to an active Board refreshment process and chairperson rotation program. In 2016 and early 2017, pursuant to these goals, the Governance Committee recommended three directors be added to the Board, two directors rotate off the Board, and introduced a new Chair for the Board and each Committee. The Committee also has recommended two new directors to be added to the slate for the 2017 Annual Meeting. Our principles of corporate governance provide that there should be at least seven directors on the Board, with a majority being independent.

Each year, the Governance Committee oversees the evaluation process for the Board of Directors and its committees. Each director completes a written evaluation of the Board and their respective Committees, and the Secretary also conducts a follow-up evaluation phone call, accompanied by the Board Chair and Governance Committee Chair. The Board and each Committee discuss the results of the evaluations in Executive Session.

The Governance Committee will consider candidates for nomination as a director recommended by shareholders, directors, third-party search firms, and other sources. Director candidates should have certain minimum qualifications, including being able to read and understand basic financial statements, being familiar with our business and industry, having high standards of personal ethics and mature judgment, being able to work collegially with others, having commitment to shareholder value and being willing to devote the necessary time and energy to fulfilling the Board’s responsibilities. Independent directors are not permitted to serve on more than two other boards of public companies without approval from the Board. The Governance Committee may modify these minimum qualifications from time to time. In addition, factors such as the following may be considered:

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During its ongoing review, the Governance Committee evaluates the overall composition of the Board, the skills and experiences represented by incumbent directors and the need for new directors to replace retiring directors or expand the Board. In seeking new director candidates, the Governance Committee considers the skills, expertise and qualities that will be required to effectively oversee the current and future strategic plans of our company. The Governance Committee, in conjunction with these needs, also considers the diversity of the Board in terms of geographic representation, gender and ethnic makeup of its members. The Board evaluates the makeup in the context of the Board as a whole with the objective of recommending a group that can work together using its diversity of experience and perspective to ensure that our company is well managed, performance is optimized and that decisions represent the best interests of our company and its shareholders.

Shareholders who wish to recommend one or more persons as a director candidate must provide a written recommendation to our Secretary. Notice of a recommendation must include the shareholder’s name, address, and the number of Buffalo Wild Wings shares owned, along with information with respect to the person being recommended, i.e. name, age, business address, residence address, current principal occupation, five-year employment history with employer names and a description of each employer’s business, the number of shares beneficially owned by the prospective nominee, whether such person can read and understand basic financial statements, and other board memberships, if any. The recommendation must be accompanied by a written consent of the prospective nominee to stand for election if nominated by the Board of Directors and to serve if elected by the shareholders. We may require a nominee to furnish additional information that may be needed to determine the eligibility of the nominee.

Shareholders who wish to present a proposal at an annual meeting of shareholders must provide a written notice to our Secretary at the address below. For each proposal, the notice must include a brief description of the matter to be brought before the meeting, the reasons to bring the matter before the meeting, the shareholder’s name, address, and number of shares owned, and any material interest that the shareholder may have in the proposal. The Secretary will forward the proposals and recommendations to the Governance Committee. See “Shareholder Proposals” on page 61.

Buffalo Wild Wings, Inc.

5500 Wayzata Boulevard, Suite 1600

Minneapolis, MN 55416
Attention: Corporate Secretary

A copy of the current Governance Committee Charter can be found on the Buffalo Wild Wings website at www.buffalowildwings.com.

Compensation to Non-Employee Directors

Cash Compensation. In addition to being reimbursed for out-of-pocket expenses incurred while attending Board of Directors or committee meetings, the non-employee directors received the following cash compensation in 2016. The director compensation is determined by the full Board, upon recommendation from the Governance Committee, and is effective at the May meeting each year. The fees are paid at the quarterly Board meetings.

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Equity Compensation. The non-employee directors are entitled to an annual grant of fully-vested stock units for the number of shares with a grant date fair value equal to approximately $95,000. To determine the number of stock units to grant, we divide $95,000 by the average of the twenty data points that represent the daily high and low stock price of the ten preceding trading days. Because of this methodology, the value of the stock awards will not likely be exactly $95,000. In 2016, each of our outside directors received a grant of 707 stock units, which were credited to the directors on May 13, 2016. In 2017, the annual grants are expected to be approved at a meeting of the Board of Directors scheduled for          .

Stock Ownership Guidelines. We require our non-employee directors to maintain a minimum level of stock ownership to strengthen alignment with our shareholders. Our current guidelines require non-employee directors to own stock (including stock units) equal to five times the annual cash retainer within six years of joining the Board of Directors. Additional details regarding our stock ownership guidelines for non-employee directors and executives can be found on page 39 of this proxy statement.

Deferred Compensation. Our Deferred Compensation Plan permits the directors to defer up to 100% of compensation, including fees and stock unit grants. Currently, no director has elected to defer any portion of compensation.

Compensation Consultant. In recommending the non-employee director compensation to the Board of Directors, the Governance Committee retained FW Cook as its consultant.

Director Compensation Table. The table below summarizes the compensation paid by us to our non-employee directors during fiscal year 2016.

2017 Director Compensation Actions. In order to simplify the compensation for the directors, the Board approved a revised cash payment compensation program for 2017. This program will go into effect as of May 11, 2017. The Board of Directors approved the following compensation changes for 2017:

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OUTSTANDING SHARES AND VOTING RIGHTS

Our Board of Directors has fixed          , 2017 as the record date for determining shareholders entitled to vote at the Annual Meeting. Persons who were not shareholders on such date will not be eligible to vote. At the close of business on the record date, there were         shares of our Common Stock issued and outstanding. The Common Stock is our only outstanding class of capital stock. Each share of Common Stock is entitled to one vote on each matter to be voted upon at the Annual Meeting. Holders of Common Stock are not entitled to cumulative voting rights.

Under applicable Minnesota law, the voting requirement for each proposal included in this proxy statement is as follows:

If a shareholder indicates on their proxy that they wish to abstain from voting, including brokers holding their customers’ shares who cause abstentions to be recorded, these shares are considered present and entitled to vote at the Annual Meeting and those shares will count toward determining whether or not a quorum is present at the meeting. However, an abstention on any proposal will have no effect on the outcome of the proposal, except that it will have the same effect as a vote against the 2017 Incentive Compensation Plan and against the ratification of our independent registered accounting firm. A shareholder (including a broker) who does not give authority to vote, or withholds authority to vote, on a certain proposal will not be considered present and entitled to vote on that proposal.

If a shareholder who holds their shares through a broker does not give instructions to the broker as to how to vote the shares, the broker has authority under New York Stock Exchange rules to vote those shares for or against “routine” proposals, such as the ratification of the auditors. Brokers cannot vote on their customers’ behalf on “non-routine” proposals such as the election of directors or approval of the compensation of our named executive officers. These rules apply to brokers holding our shares even though our common stock is traded on the NASDAQ Global Select Market. If a broker votes shares that are unvoted by its customers for or against a “routine” proposal, these shares are counted for the purpose of establishing a quorum and also will be counted for the purpose of determining the outcome of “routine” proposals. If a broker does not receive voting instructions as to a non-routine proposal, or chooses to leave shares unvoted on a routine proposal, a “broker non-vote” occurs and those shares will be counted for the purpose of establishing a quorum, but not for determining the outcome of those proposals. Shares that are subject to broker non-votes are considered not entitled to vote on the particular proposal, and effectively reduce the number of shares needed to approve that proposal. In the event of a contested vote at the Annual Meeting, none of the proposals presented will be deemed “routine” and, as such, no broker will be permitted to vote its customer’s shares without receiving instructions from that customer.

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SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT

The following table provides information as of March 24, 2017, concerning the beneficial ownership of our Common Stock by (i) the named executive officers in the Summary Compensation Table, (ii) each of our directors, (iii) all current directors and executive officers as a group, and (iv) each shareholder who we know beneficially owns more than 5% of our outstanding Common Stock. Except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock owned by them.

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COMPENSATION DISCUSSION AND ANALYSIS

INTRODUCTION

The Compensation Discussion and Analysis (“CD&A”) describes our executive compensation program, including the objectives and elements of compensation as well as determinations made by the Compensation Committee (referred to in this CD&A as the “Committee”) regarding our named executive officers (“NEOs”). For 2016, the following six current executive officers were determined to be NEOs as a result of their positions during the year (chief executive officer or chief financial officer) or their total compensation making them the three other highest paid continuing executive officers for the fiscal year:

In addition, two other former executive officers were also determined to be NEOs for 2016, as noted below:

The objective of our executive compensation program is to enable us to recruit, retain and motivate a highly qualified management and leadership team by providing market-based levels of compensation in a way that builds a strong leadership team as a model for the entire organization. Our overall executive compensation design philosophy reflects the Committee’s desire to align management’s actions with the interests of our shareholders. Accordingly, a substantial percentage of the compensation for our named executive officers is at-risk and based primarily on company performance. Our executives, as a team and individually, will benefit from larger rewards when performance objectives are exceeded and conversely will receive lower or no rewards when performance falls below targeted levels.

Buffalo Wild Wings is focused on profitable growth that builds shareholder value. To accomplish this goal, we attract, motivate, retain, and fairly reward executive talent with a competitive compensation plan composed of three main elements, which we collectively refer to as “total direct compensation”: (1) base salaries; (2) annual cash incentive compensation; and (3) equity incentive compensation in the form of performance-based restricted stock units (“PRSUs”) and stock options. The Committee makes its compensation design decisions based on the following principles: holding executives accountable for our company’s goals, ensuring alignment with shareholder interests, encouraging team member engagement and optimizing results.

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EXECUTIVE SUMMARY

Company Performance Metrics for 2016

We continued to deliver on our strategy to remain a differentiated category-leading restaurant concept while investing in the future. In, 2016, we opened 34 new company-owned Buffalo Wild Wings. Our franchisees in the United States opened 28 Buffalo Wild Wings locations. Same-store sales at company-owned Buffalo Wild Wings decreased 2.4%. Our revenue increased 9.6%, net earnings decreased 0.3% and were tempered by higher costs for traditional chicken wings and lower same store sales performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Buffalo Wild Wings, Inc., the NASDAQ Composite Index,
and S&P 600 Restaurants Index

*$100 invested on December 25, 2011 in company stock or December 31, 2011 in applicable index, including reinvestment of dividends. Indices calculated on month-end basis.

Copyright© 2017 Standard & Poor’s, a division of S&P Global. All rights reserved.

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Alignment between Pay and Performance

2016 was a challenging year for same store sales performance in the casual dining industry and for Buffalo Wild Wings. As a result of company performance for 2016 being below Plan, there was a significant decline this year in the value of performance-based compensation for our named executive officers. The following chart shows the year-over-year decline for our CEO, comparing what was earned for 2016 versus 2015. See the “2016 Executive Compensation” section of this CD&A for a more detailed explanation of the payouts earned under these components of our executive compensation program.

Our President and Chief Executive Officer’s total compensation as shown in the summary compensation table on page 51 declined by 8.4%. This is dramatically different than the decline of 54% we are showing in the table above for total realized compensation, which we feel is a better reflection of the change in performance-based compensation from one year to the next. The differences between these two definitions are described below, which is primarily in how long term incentives are valued and included:

In addition, the chart below on the right reinforces the alignment between our annual incentive payouts and shareholder outcomes. In 2014, a year with strong shareholder returns, the CIP paid to our CEO was well above target. However, in the 2015 and 2016 years where we didn’t achieve our pre-established Plan goals, the annual incentive play payouts were significantly below target.

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elements of our executive compensation program for 2016

At Buffalo Wild Wings, there are three main components to the total direct compensation opportunity for our executive officers: base salary, annual cash incentive and long-term equity incentive compensation. A large proportion of total direct compensation is performance-based, not guaranteed, and fully at risk. This results in a close alignment between executive rewards and the creation of long-term shareholder value. Our incentive plans are also focused on rewarding our executive team for driving sales and earnings growth. The chart below provides a view of each of the three main components of total direct compensation for our CEO and the average of our other named executive officers. Each of these components is described in more detail in the section “2016 Executive Compensation”.

Component	CEO Target Pay Mix	Other NEOs Target Pay Mix	Description
Base Salary			Base Salary: Base salary represents the fixed pay component and is set at a level that reflects the executive’s internal role as well as the external market value from competitive benchmarking
Annual Cash Incentive Program (CIP)			2016 CIP award opportunity: Payout can range from 0 to 200% of target on most metrics, which include company performance (80% weighting in total) and individual performance (20% weighting). Company performance metrics include total revenue, net income, same store sales, and restaurant openings. Individual performance includes key initiatives or results that are needed to support business growth and success.
Equity Incentive Program (EIP) ·  PRSUs   ·  Stock Options			The 2016 EIP is comprised of two components: 75% in Performance-Based Restricted Stock Units (PRSUs): From 0 to 200% of target PRSUs can be earned based on achievement of cumulative net income over a three-year performance period 25% in Stock Options: Tied to shareholder value, and only have value if the future share price is above the exercise price
Total Direct Compensation			For the CEO, 78% of the target total direct compensation is performance-based and at risk to ensure that a significant portion of pay is directly linked to company results and the creation of long-term shareholder value. For the other named executive officers, they had an average of 66% of their target total direct compensation that is performance-based and at risk.

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PREVIEW OF DESIGN CHANGES FOR 2017

The Committee regularly reviews the design of the executive compensation program to ensure that incentive plans are appropriately aligned with or company strategy and interests of shareholders. As a result of this review, the Committee approved in February 2017 a number of changes to the metrics for the CIP and PRSUs. In making these changes, the Committee considered the shifts in our strategy, which now includes an added focus on optimizing capital allocation, increasing debt leverage, and improving margins. The Committee also considered input from its Consultant and some of our largest shareholders. The table below summarizes these changes, which will be described in more detail in next year’s Proxy Statement.

The 2017 CIP is a simplified design that will have three company performance-based metrics instead of the five that are currently in the plan. This will align the CIP metrics with the changes in our strategic and operational focus for 2017. Within the three metrics, there is a focus on earnings (income from operations), revenue (same store sales), and efficiency (operating margin %).

For the 2017-2019 PRSUs, cumulative income from operations after-tax (“NOPAT”) will be the new earnings metric replacing net income. Average ROIC has been added as a new second metric, which will have a weighting of 25%. The payout for the 2017-2019 PRSUs will be based on the cumulative NOPAT (75% weighting) and Average ROIC (25% weighting) achieved for the performance period vs. goals for threshold, target, and maximum. In addition, the agreements for these PRSU awards incorporate the change in control definition used in the 2017 Incentive Compensation Plan, for which shareholder approval is being sought at the Annual Meeting, and amend the award agreements for currently outstanding equity awards to executive officers to incorporate the same change in control definition.

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SUMMARY OF 2016 EXECUTIVE pay ACTIONS

The following is a summary of the pay actions for 2016 approved by the Committee for our named executive officers. Refer to the “2016 Executive Compensation” section later in this Compensation Discussion & Analysis for a more detailed explanation of how the payouts were determined under these cash and equity incentive programs for 2016.

Base Salaries

The Committee approved base salary adjustments for certain named executive officers during 2016 that were effective March 21, 2016. For the CEO, there was no adjustment made to her salary during 2016. It has remained at the current level since the last adjustment was made in March 2015. For the other named executive officers, the average base salary adjustment was 3.0% and considered market position, performance and time since last increase.

2016 Cash Incentive Program (CIP)

Refer to the “2016 Executive Compensation” section starting on page 34 of this CD&A for a more detailed explanation of how the payouts were determined under these cash and equity programs for 2016.

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Executive Compensation Governance and practices

At Buffalo Wild Wings, our executive compensation program operates within a corporate governance framework that is designed to ensure independent oversight, objective advice and analysis, appropriate risk management, and transparency. Our executive compensation program is designed with our shareholder long-term interests in mind. The following are some of the key elements of our governance framework and the key executive compensation practices that demonstrate our commitment to pay for performance and our total rewards philosophy.

Governance

Practices

THE EXECUTIVE COMPENSATION PROCESS

The Role of the Compensation Committee

The Committee met seven times during 2016. In these meetings, the Committee reviewed and discussed the regular agenda items that are part of its annual planning calendar. Our CEO, COO and Senior Vice President, Talent and Organizational Performance attend the meetings on behalf of management, except when their own compensation is being discussed.

The Committee’s responsibilities are described in the Committee Charter and include the following:

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The Role of the Compensation Consultant

To assist in reviewing and setting 2016 compensation, the Committee again retained FW Cook as its independent compensation consultant. FW Cook reports directly to the Committee, independent of management. The Committee assessed the independence of FW Cook and took into account related factors in accordance with SEC and NASDAQ rules and concluded that the work of FW Cook did not raise any conflict of interest that would prevent them from independently advising the Committee. In addition:

The Role of the Chief Executive Officer

After the end of each fiscal year, the CEO completes a performance evaluation for each executive officer, which includes an evaluation of performance against individual objectives. Based on these evaluations, the CEO makes a recommendation on the portion of the cash incentive tied to individual performance that each executive officer should receive as well as a recommendation for each executive officer’s base salary and target payout opportunities for the upcoming year under the CIP and EIP. The evaluations and recommendations are then provided to and discussed with the Committee, which makes the final compensation determinations for each executive officer. The CEO does not make any recommendations and is not present during voting or deliberations on her compensation.

Outcome of the 2016 Shareholder Advisory Vote

We conduct an annual shareholder advisory vote on the compensation of the company’s named executive officers. This vote is not binding on the company; however, the Committee does take into account the outcome of the vote when making future compensation decisions.

Our 2016 Say-on-Pay proposal was supported by over 99.4% of our shareholders who voted on the proposal. Although the Committee always considers changes to the compensation programs, based upon various inputs, among them our regular engagement with our shareholders, to enhance effectiveness and alignment, it did not make any significant changes to the executive compensation program for 2016 because it felt that the compensation program fairly motivated and compensated our named executive officers under our then-current strategy and plans. As noted earlier in the Compensation Discussion & Analysis, however, the Committee considered additional shareholder input and our evolving financial strategies in designing the

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compensation programs for 2017. For more information, see Proposal #2, ADVISORY VOTE ON EXECUTIVE OFFICER COMPENSATION starting on page 41.

PEER GROUP

The Committee uses information gathered from our peer group as one of multiple factors in analyzing executive compensation. Data from these peer group companies was used to inform decisions regarding executive compensation for 2016. FW Cook assists the Committee in determining which companies belong in our peer group. The Committee annually evaluates the composition of the peer group and makes appropriate changes to the peer group to ensure that we maintain a group of restaurant and retail companies whose operations and size are similar to ours. Based on this evaluation and on the recommendation of FW Cook, the Committee approved in August 2016 the replacement of Chico’s FAS and Hibbett Sports with Dave & Buster’s Entertainment, Inc. and Five Below, Inc. The peer group as approved by the Committee currently consists of the following 17 companies:

TOTAL REWARDS PHILOSOPHY

As a long-term growth company, our total rewards philosophy strives to maximize the principles of accountability, alignment, engagement and optimization among our Team Members. Our philosophy is to “pay for performance” by designing our compensation programs to reward Team Members for company and individual success.

Our philosophy is supported by four specific Total Rewards Principles, which serve as the guiding framework to our specific compensation programs and approaches we use to drive performance. The following chart outlines the key objectives and purpose of our rewards programs for each of these four principles.

Our executive compensation program is structured so that our base salaries and targeted total direct compensation opportunity are positioned around the median of the competitive market. Actual competitive positioning varies by executive officer depending on a number of factors that may include the executive’s experience level, scope of responsibilities, and impact on the organization. We set aggressive annual and long-term goals in order to drive behaviors and results that will provide shareholder value that meets or exceeds expectations. Our annual cash incentive and long-term equity incentive programs are designed so that we provide total rewards that are commensurate with actual results. We believe that a substantial portion of the compensation for our executives should be at risk and received only to the extent Buffalo Wild Wings and the executive accomplish goals approved by the Committee and the Board of Directors. At-risk compensation comprises a greater percentage of target total direct compensation for our executives than other Team Members.

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2016 EXECUTIVE COMPENSATION

Base Salary

We set base salaries for our executive officers to be competitive with the market median of our peers and to allow us to attract and retain executive talent. In our target pay mix for 2016, base salaries are the smallest component, comprising 22% of the target total direct compensation opportunity for our CEO. For our other continuing named executive officers, base salary represent 34% of the target total direct compensation opportunity. Our committee reviews base salaries annually, and considers competitive market data provided by its independent consultant and performance of the executive officer when making base pay decisions. The Committee at its meeting on February 11, 2016 approved the base salary adjustments shown in the following table. For the CEO, there was no adjustment made to her salary during 2016. It has remained at the current level since the last adjustment was made in March 2015. For the other named executive officers, their adjustments were merit increases that considered market position, performance and time since last increase. These base salary adjustments were effective beginning March 21, 2016.

Cash Incentive Program (CIP)

Our CIP provides our executive officers with an annual incentive opportunity that is tied to company performance and individual performance. The 2016 CIP metrics for company performance are focused on driving sales and earnings growth. Company performance is weighted at 80% of the CIP opportunity. The other 20% weighting is on individual performance, which are specific goals for each executive officer. They generally include the key initiatives or results that are needed to support business growth and success. The individual objectives for our CEO are agreed upon at the beginning of each year between our CEO and the Committee when the Committee reviews CEO performance for the previous year. The individual performance objectives for the remaining executive officers are agreed upon by the CEO and the respective executive officers and are reviewed by the Committee.

The Committee approved the following target annual CIP opportunities for the named executive officers for 2016. Note that Mr. Ware was not eligible for the 2016 CIP as a result of his hire date of October 31, 2016. His target CIP opportunity would have been 80% of salary if he had been eligible for the 2016 CIP. Each CIP opportunity is entirely at risk, meaning that if threshold performance is not met on any of the metrics including individual performance, then no CIP award is earned. The Committee considered competitive market data provided by its Consultant in establishing these target CIP levels for 2016.

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The following table shows the performance goals and range of payout opportunity for each of the metrics in the 2016 CIP. For performance between any of the levels specified in the table, there is an interpolation of the payout that is in proportion to the performance actually achieved.

Company Performance. The following table shows the company performance results achieved on each metric for 2016, and the resulting payout that was earned under the CIP. On an overall basis, a CIP payout of 29.9% of target was earned for the company performance metrics for 2016, which has a weighting of 80% of the CIP opportunity. This compares to a CIP payout of 76.2% of target on company performance for 2015 and 155.8% of target on company performance for 2014.

Individual Performance. In addition to the company performance metrics identified above, our named executive officers also have an opportunity to earn a portion of their CIP award based on their individual performance against objectives. This portion of CIP allows us to reward executives for their contributions to key initiatives or results that are needed to support business growth and success. The following table shows the % of target payout earned for 2016 on individual performance (range in potential payout is 0% to 200% of target).

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The Committee and the Board of Directors conduct a CEO evaluation at the end of the year to assess the extent to which the CEO’s individual performance was achieved. This evaluation begins first with the CEO providing a self-assessment of her results on each objective. Each Board member then does an evaluation of the CEO’s performance using a third party service to combine and report on the results. The Committee and Board then discuss the evaluation results and agree upon an overall performance rating and payout on the CEO’s individual performance objectives. The CEO’s performance objectives for 2016 included the following: (1) achieve the financial plan for the company, (2) identify and execute key growth opportunities for Buffalo Wild Wings, North America, (3) redefine the emerging brands strategy including the growth plan for R Taco, and (4) fill key leadership roles on the executive team and continue focus on succession planning and talent development. A payout of 75% of target was approved for the CEO considering her results in partially meeting these individual performance objectives for 2016. This is down from the payout on individual performance for the CEO of 110% of target for 2015 and 166.7% of target for 2014.

The Committee approved the payout earned on individual performance for the other named executive officers after reviewing and discussing the results that were achieved toward individual objectives of each executive for 2016. Our named executive officers had financial and team objectives, as well as strategic objectives that were specific to their area of responsibility. The average payout for the named executive officers other than CEO was 99.0% of target, down from an average of 107.5% of target for 2015 and an average of 147.4% of target for 2014.

Total CIP Award Earned. The 2016 total CIP award earned by each named executive officer is determined by adding together the payout earned for company performance and the payout earned for individual objectives, as shown below:

The table below shows the final total CIP payout earned for 2016 by each named executive officer, with a comparison to actual total CIP payouts earned for 2015. This shows that the total CIP payouts for all of the named executive officers were down significantly over last year as a result of the company missing its 2016 Plan.

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Equity Incentive Program (EIP)

The Committee believes that equity incentives are a critical component of the total compensation mix for our executive officers and other key leaders. They provide a reward opportunity for our executive team that is directly aligned with the long-term interests of shareholders. As an incentive, there is only payout value if certain long term company performance goals are achieved or shareholder value is created.

The Committee establishes a target EIP award value for each named executive officer, as shown in the table below. These percentages, when multiplied by base salary, determined the total value of EIP annual awards that our named executive officers were eligible to receive during 2016. The Committee considered competitive market data provided by its Consultant in establishing these target EIP levels for 2016, which were unchanged from 2015.

The EIP target award opportunity is used to determine the total grant date fair value of equity awards for our named executive officers, which is then split between grants of Performance-Based Restricted Stock Units (PRSUs) and stock options: 75% in PRSUs and 25% in stock options. We believe that this combination appropriately rewards management for achieving long-term profitable growth and the creation of shareholder value. It is important to note that PRSUs and stock options are performance-based awards, meaning that they only have value if performance conditions are met or our share price increases. Further, the Committee believes equity incentives with their vesting requirements assist in the retention of our executive team, which is critical to the success of our long-term growth strategy.

Annual Grant of PRSUs. Under the EIP, the company makes annual grants of PRSUs subject to certain vesting and performance conditions. During 2016, our named executive officers received a new grant of PRSUs representing the three-year performance period ending with fiscal 2018 (“2016-2018 PRSUs”). The performance condition for the 2016-2018 PRSUs is three-year cumulative net income. Cumulative net income is defined as the sum of reported net income for each year in the three year performance period, subject to adjustments, if any, as specified in the EIP Exception Guidelines approved by the Committee for this award. The EIP Exception Guidelines generally provide for adjustments to net income for such items as acquisition losses related to a reacquisition of a franchise right, asset impairments and store closure costs from restaurant relocations in an acquisition, intangible asset impairment charges, increases or decreases in stock-based compensation expense that result from a change in the grant date, goodwill impairment due to market capitalization falling below book value, and impact of newly adopted accounting pronouncements. The Committee approved cumulative net income goals that determine the percentage of share units earned at threshold, target and maximum for the 2016-2018 PRSUs. No share units are earned if threshold performance is not achieved.

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The target number of 2016-2018 PRSUs that can be earned for each named executive officer is determined according to the following formula: 75% of the executive’s target total EIP award opportunity, divided by the grant date fair value per share, equals the target number of PRSUs.

The number of PRSUs actually granted is equal to the maximum number of PRSUs that can be earned, which is twice the target number of PRSUs. The company grants the maximum number of PRSUs that can be earned at the start of the performance period in order to lock in the share price that is used in expensing the PRSUs. Under the EIP, the grant date fair value per share for PRSUs is the average of the twenty data points representing the high and low stock price on the ten trading days prior to the date of grant. The annual grant of PRSUs is made on the first trading day of the second quarter. For the 2016-2018 PRSUs this was a grant date of March 28, 2016. The grant date fair value per share for this grant was $152.48.

Annual Grant of Stock Options. Under the EIP, the company makes annual grants of stock options to named executive officers subject to certain vesting conditions. During 2016, our named executive officers received an annual grant of stock options at the same time that the PRSUs were granted. The stock options vest in four equal annual installments at the end of each fiscal year starting with the year of grant. The stock options have a term that expires at the seventh fiscal year end following the date of grant. The company grants Incentive Stock Options (ISOs) up to the maximum allowable limit for each executive, with the balance of the option value in Non-Qualified Stock Options (NQSOs). By granting ISOs, which can have favorable tax treatment, executives are encouraged to retain and hold for a longer period of time any stock acquired from an option exercise.

The number of stock options granted for each named executive officer is determined according to the following formula: 25% of the executive’s target total EIP award opportunity, divided by the grant date fair value per option share, equals the number of stock options granted (which are then either ISOs or NQSOs as described above).

Under the EIP, the grant date fair value per option is the estimated Black-Scholes Value (“BSV”) for each option granted. The BSV is based on the updated valuation assumptions used for estimating the company’s option expense under generally accepted accounting principles. Annual grants of stock options are made on the first day of the second fiscal quarter each year. For the stock options granted during 2016, the grant date was March 28, 2016. This grant had a BSV of $47.65 per option and an exercise price of $147.55, which was the closing share price on the date of grant.

Payout Earned on 2014-2016 PRSUs. Our named executive officers who were employed with the company in 2014 received a grant in 2014 of PRSUs (“2014-2016 PRSUs”) that vested at the end of 2016 based on the degree to which the performance condition was satisfied. The performance condition for the 2014-2016 PRSUs was three-year cumulative net income. The Committee approved in February 2014 the following cumulative net income goals that determined the percentage of PRSUs earned at threshold, target and maximum for the 2014-2016 PRSUs. For performance between the specified levels, there is an interpolation of the payout that is in proportion to the performance actually achieved. No share units are earned if threshold is not achieved.

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For the three year performance period of 2014-2016, the company achieved cumulative net income of $283.9 million, which slightly exceeded the goal for target payout of $280.6 million. There were no adjustments made to reported net income for this performance period. Based on these results, the Committee approved a payout for the 2014-2016 PRSUs of 115.8% of target, which then determined the number of 2014-2016 PRSUs that were earned and paid out in February 2017. This payout is included in the “Option Exercises and Stock Vested in Fiscal 2016” table on page 55.

Other Benefits

Deferred Compensation Plan. Our named executive officers are eligible to participate in a nonqualified deferred compensation plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan is an unfunded plan that allows executives to defer up to 100% of their salary, CIP award, and/or PRSU payout. The company makes a monthly contribution to the plan on behalf of our named executive officers to provide additional retirement benefits and assist with retention. This contribution for our named executive officers is 10% to 12.5% of base salary and vests ratably over five years from date of hire. The Deferred Compensation Plan is described in more detail in the “Non-Qualified Deferred Compensation” section on page 56.

Perquisites and Benefits. Consistent with our commitment to emphasize pay for performance in our mix of total compensation, our executive officers receive very few perquisites. We believe the perquisites we provide are reasonable and comparable to other companies we compete with for executive talent. The Committee periodically reviews the levels of perquisites and other personal benefits provided to our executive officers, and approved reductions in these benefits as noted below.

In addition to benefits available to all Team Members under company-wide health, dental, life, and disability insurance plans, the company provides executive officers the perquisites and benefits described below, which are quantified in the column “All Other Compensation” of the “Summary Compensation Table” on page 51.

Stock Ownership Guidelines

We believe the executive officers and directors should have an appropriate level of equity ownership in order to align their interests with those of our shareholders. We encourage executive officers to own stock by providing opportunities for stock ownership through the exercise of stock options, payout of earned PRSUs, and purchase of stock through the Employee Stock Purchase Plan. For non-employee directors, a significant portion of their total remuneration is made out in fully-vested stock units annually. In May 2011, our company instituted the following stock ownership guidelines to encourage ownership among its executives and non-employee directors:

Executives and non-employee directors have six years from the implementation date of the guidelines (or date of hire, promotion or appointment) to reach their stock ownership guidelines. Under the guidelines, share ownership includes: shares held outright by the individual, shares acquired from the payout of PRSUs, vested “in the money” stock options, shares purchased through the Employee Stock Purchase Plan, and share equivalents held in deferred compensation accounts. As the table below indicates, each of the currently employed named executive officers, with the exception of Mr. Ware, have current ownership levels that are well in excess of the ownership guidelines. Mr. Ware was hired on October 31, 2016 and has until October 31, 2022 to satisfy the ownership guidelines. Our non-employee directors who were reelected to the Board in May 2016 have either met the guideline or are approaching the guideline in compliance with our phase-in period.

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Anti-pledging/Anti-hedging Policies

Executive officers and non-employee directors are prohibited from using Buffalo Wild Wings stock as collateral for margin loans, whether for the purchase of Buffalo Wild Wings stock or any other securities. Executive officers and directors also must not “sell short” or otherwise hedge their holdings of Buffalo Wild Wings stock.

Separation and Change in Control Arrangements

The named executive officers, in accordance with the terms of their respective employment agreements and award agreements under equity compensation plans, are eligible for benefits and payments upon terminations of employment by our company without cause or by an executive for good reason as described under “Potential Payments Upon Termination or Change in Control” on page 56. We believe that severance arrangements generally are appropriate given the service provided, the additional time that may be required for senior executives to secure other employment, and the benefit to our company of obtaining non-compete and non-solicitation commitments and a general release of liability from each executive. In the context of a change in control, the Committee believes the use of a “double trigger” arrangement, requiring both a change in control and a termination of employment not for cause before accelerating vesting and exercisability of equity awards, appropriately addresses several goals. It reflects the value to our company of avoiding the distraction and loss of key executives that may occur in connection with any potential or actual change in control, without providing accelerated benefits to executives who continue to enjoy employment after such a transaction. At the same time, the arrangement is believed to be more attractive to acquiring companies, who may place significant value on retaining members of our company’s executive team. Consistent with best practices, no excise tax or income tax gross-ups are provided to offset any tax liability as a result of any Change in Control separation or compensation plan payments.

Clawback Policy

Our company has an Incentive Compensation Recovery Policy for all executive officers (“Covered Executives”). Under this policy, our company will seek to recover or cancel cash or equity-based incentive compensation previously provided to a Covered Executive if within three years from the date such incentive compensation was provided, our company is required to prepare an accounting restatement due to material noncompliance with any then applicable financial reporting requirement under the securities laws and misconduct by the Covered Executive caused or contributed to the noncompliance. The Committee believes that the officers who certify our company’s financial reporting should not be unjustly enriched for prior reporting periods in the event of such a restatement.

Special Tax Considerations

Section 162(m) of the Internal Revenue Code can potentially disallow a federal income tax deduction to our company for annual compensation in excess of $1 million paid to our CEO and certain of our executive officers. One exception to Section 162(m)’s disallowance of a federal tax deduction applies to “performance-based compensation” paid pursuant to shareholder-approved plans.

To ensure that 2016 annual cash incentive awards for executive officers could qualify as “performance-based compensation” for purposes of Section 162(m), the Committee approved a maximum annual incentive opportunity under the CIP for 2016 for each of the named executive officers expressed as a percentage of the individual’s annual salary (Ms. Smith, 200%; Mr. Schmidt, 170%; Ms. Shoulak and Ms. Benning, each 160%; and Ms. Decker, 120%). The maximum incentive opportunity would become payable for each executive officer if our company achieved positive operating earnings for 2016, but the Committee retained and expected to exercise discretion to reduce the amount payable based on our company and individual performance factors described earlier in this section. After certifying that our company had achieved positive operating earnings for 2016 and that maximum payouts could be made for each executive officer, the Committee exercised its discretion to reduce the amounts payable and approved the 2016 actual CIP payouts as set forth in the table on page 36.

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Compensation Committee Interlocks and Insider Participation

No member of the Committee was an officer or employee of our company during fiscal year 2016 or in any prior year, and no member of the Committee had a relationship which would require disclosure under Item 404(a) of Regulation S-K. There were no compensation committee interlocks as described in Item 407(e)(4) of Regulation S-K.

Compensation Committee Report

The Committee evaluates and establishes compensation for executive officers and oversees the deferred compensation plan, the equity plan, and other management incentive, benefit, and perquisite programs. Management has the primary responsibility for our company’s financial statements and reporting process, including the disclosure of executive compensation. With this in mind, the Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” found on pages xx-xx of this Proxy Statement. Based on the review and discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for filing with the Securities and Exchange Commission.

A copy of the current Compensation Committee Charter can be found on the Buffalo Wild Wings website at www.buffalowildwings.com.

ADVISORY VOTE ON EXECUTIVE OFFICER COMPENSATION
(Proposal #2)

Our company seeks a non-binding advisory vote from its shareholders to approve the compensation of the named executive officers as described in this proxy statement under “Executive Compensation” and “Compensation Discussion and Analysis.”

This proposal gives our shareholders the opportunity to express their views on our company’s named executive officer compensation. Because the vote is advisory, it will not be binding upon the Board of Directors. However, the Committee will take into account the outcome of the vote when making future compensation decisions. Our 2015 compensation was supported by over 99% of our shareholders voting at the meeting, and the Committee did not make any significant changes to the compensation design for 2016 because it felt that the compensation program fairly motivated and compensated our named executive officers under our then-current strategy and plans. As noted in the Compensation Discussion & Analysis, however, the Committee considered additional shareholder input and our evolving financial strategies in designing the compensation programs for 2017 and beyond.

The executive compensation program has been designed so that our targeted total direct compensation opportunity is competitive with the median of our peer group, with the opportunity through cash and equity incentives to earn above this level when our company’s performance warrants it. The Committee looks to implement a compensation program that promotes consistent strong long-term growth in shareholder value and provides balanced incentives to executives and managers that reward a mix of annual and long-term financial performance.

As discussed under “Compensation Discussion and Analysis,” our company believes that under our compensation policies and decisions, the named executive officers have an opportunity to be rewarded for achievement of performance goals and long-term sustained growth in company value. The key drivers of named executive officer compensation were our fiscal 2016 company performance, our performance for the previous three years and the individual performance of our named executive officers.

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We are presenting this proposal, which gives you as a shareholder the opportunity to approve our named executive officer compensation as disclosed in this proxy statement by voting for or against the following resolution:

RESOLVED, that the shareholders approve the compensation of our company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the company’s proxy statement for the annual meeting of shareholders to be held           , 2017.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
APPROVAL OF THE FOREGOING RESOLUTION
USING THE YELLOW PROXY CARD.

ADVISORY VOTE ON the frequency of the advisory vote to approve our executive officer compensation practices
(Proposal #3)

Our company is required to seek a non-binding advisory vote from its shareholders to determine the frequency of the non-binding advisory vote to approve the compensation of our executive officers as described in the Compensation Discussion and Analysis section and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in our annual proxy statements.

This proposal gives our shareholders the opportunity to express their views as to whether the non-binding advisory vote to approve our executive officer compensation practices should occur every one, two, or three years. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Board of Directors will take into account the outcome of the vote when deciding the frequency of the non-binding advisory approval of our future executive officer compensation decisions.

At our 2011 Annual Meeting of Shareholders, a plurality of the votes cast were in favor of holding the non-binding advisory vote to approve our executive officer compensation practices every year and we have requested the non-binding advisory vote at each subsequent annual meeting of shareholders.

We recommend that the frequency of the non-binding advisory vote to approve our executive compensation practices continue to occur annually. Although we believe that our executive compensation program cannot be reasonably judged based on the results in a single year, we believe that an annual vote provides shareholders with the most effective means for expressing their views on the effectiveness of our executive compensation over time and gives them an opportunity to provide meaningful input each year. An annual vote provides the Committee with more frequent indications of the shareholders’ views and should permit those views to be taken into consideration earlier than would be the case if votes are conducted every two or three years.

While we believe our recommendation is appropriate, the shareholders are not voting to approve or disapprove our recommendation and are instead asked to provide an advisory vote on whether the non-binding advisory vote on the approval of our executive officer compensation practices will be held every one, two or three years.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS CAST THEIR VOTE USING THE YELLOW PROXY CARD FOR ONE YEAR, TO CONTINUE OUR PRACTICE OF HOLDING THE NON-BINDING ADVISORY VOTE TO APPROVE OUR EXECUTIVE OFFICER COMPENSATION PRACTICES EVERY YEAR USING THE YELLOW PROXY CARD.

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Approval of the 2017 incentive COMPENSATION plan
(Proposal #4)

Introduction

On March 21, 2017, our board of directors, at the recommendation of our Compensation Committee (the “Committee”), approved the Buffalo Wild Wings, Inc. 2017 Incentive Compensation Plan (the “2017 Plan”), subject to approval by our shareholders at the Annual Meeting. The 2017 Plan will become effective on the date it is approved by our shareholders, and will replace our existing Amended and Restated 2012 Equity Incentive Plan (the “2012 Plan”), which is the only plan under which equity awards may currently be granted.

The number of shares of our common stock that may be the subject of awards and issued under the 2017 Plan is 2,250,000, less the number of shares granted under the 2012 Plan after December 25, 2016 and before the date the 2017 Plan becomes effective. After the 2017 Plan becomes effective, no new awards may be granted under the 2012 Plan and all new grants will be made under the 2017 Plan. Shares subject to awards outstanding under the 2012 Plan or its predecessor 2003 Equity Incentive Plan (the “2003 Plan”) that expire, are forfeited, or settled in cash after December 25, 2016 will become available for grant under the 2017 Plan. Except as provided in the previous sentence, no shares remaining available for future awards under 2012 Plan on the effective date of the 2017 Plan will be carried forward into the 2017 Plan.

As of December 25, 2016, a total of 347,671 shares were subject to outstanding awards under the 2012 and 2003 Plans, of which 145,624 shares were subject to outstanding stock options with a weighted average exercise price of $129.89 per share and a weighted average remaining contractual term of 4.1 years, and 202,047 shares were subject to unvested PRSU awards or time-based restricted stock unit awards. As of the same date, 641,933 shares were available for future awards under the 2012 Plan. We anticipate making annual equity awards under the 2012 Plan effective March 27, 2017 that will include stock options and PRSUs representing the three year performance period ending with fiscal 2019. The authorized share reserve of the 2012 Plan is reduced by one share of our common stock for every one share subject to an option or SAR award and by 2.0 shares for every one share subject to a full-value award. The same ratio will apply under the 2017 Plan.

The 2017 Plan also allows for our company to make performance-based cash incentive awards. As a result of incorporating this type of award in the 2017 Plan, we will no longer be maintaining its Amended and Restated Cash Incentive Plan, which was last approved by shareholders in 2012.

Shareholder Approval Requirement

Shareholder approval of the 2017 Plan is being sought in order to satisfy the shareholder approval requirements of (i) the NASDAQ Stock Market, (ii) Section 162(m) of the Internal Revenue Code (“Code”) in order to permit compensation provided under the 2017 Plan to qualify as performance-based compensation under that Section of the Code, and (iii) Code Section 422 to enable options granted under the 2017 Plan to qualify as incentive stock options under that section of the Code. Our Board of Directors believes that shareholder approval of the 2017 Plan is critical to providing the additional shares and the greater flexibility in terms of types and sizes of awards that will be crucial factors in enabling us to continue to provide a competitive mix of compensation to our key employees.

Factors Considered in Setting Size of Requested Share Reserve

In setting the proposed number of shares reserved and issuable under the 2017 Plan, the Committee and our board of directors considered a number of factors, including the following:

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Expectations regarding future share usage under the 2017 Plan are naturally based on a number of assumptions regarding factors such as future growth in the population of eligible participants, the rate of future compensation increases, the rate at which shares are returned to the 2017 Plan reserve through forfeitures, cancellations and the like, the level at which performance-based awards pay out, and our future stock price performance. While the Compensation Committee believes that the assumptions utilized are reasonable, future share usage will differ from current expectations to the extent that actual events differ from the assumptions utilized.

Key Compensation Practices

The 2017 Plan includes a number of features that we believe are consistent with the interests of our shareholders and sound corporate governance practices, including the following:

Description of the 2017 Incentive Compensation Plan

The major features of the 2017 Plan are summarized below. The summary is qualified in its entirety by reference to the full text of the 2017 Plan, which is attached to this proxy statement as Appendix A.

Eligible Participants

Employees of, and consultants and advisors to, our company or any subsidiary, as well as all non-employee directors of our company, will be eligible to receive awards under the 2017 Plan. As of February 19, 2017, there were approximately 42,300 employees, nine of whom are executive officers, eight non-employee directors and an indeterminate number of consultants and advisors who would be eligible to participate in the 2017 Plan. Although not necessarily indicative of future grants under the 2017 Plan, as of the same date, approximately 200 eligible recipients will be recommended for an annual grant in March 2017 under the predecessor 2012 Plan. Consultants and advisors were not eligible to receive awards under the 2012 Plan.

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Administration

The 2017 Plan will be administered by the Committee. To the extent consistent with applicable law, the Committee may delegate its duties, power and authority under the 2017 Plan to any one or more of its members, or, with respect to awards to participants who are not themselves our directors or executive officers, to one or more of our other directors or executive officers or to a committee of the Board comprised of one or more directors. The Committee may also delegate non-discretionary administrative duties to other persons, agents or advisors.

The Committee has the authority to determine the persons to whom awards will be granted, the timing, type and number of shares covered by each award, the terms and conditions of the awards and the manner in which the awards are paid or settled. The Committee may also (i) adopt sub-plans or special provisions applicable to awards, (ii) cancel or suspend an award, accelerate the vesting or extend the exercise period of any award, or otherwise amend the terms and conditions of outstanding awards to the extent permitted under the 2017 Plan, (iii) establish, modify or rescind rules to administer the 2017 Plan, interpret the 2017 Plan and any related award agreement, reconcile any inconsistency, correct any defect or supply any omission in the 2017 Plan, (iv) grant substitute awards under the 2017 Plan, and (v) require or permit the deferral of the settlement of an award and establish the terms and conditions of any such deferral. Unless an amendment to the terms of an award is necessary to comply with applicable laws or stock exchange rules, a participant who would be adversely affected by such an amendment must consent to it.

Subject to certain limits in the 2017 Plan, the Committee may also establish sub-plans or modify the terms of awards under the 2017 Plan with respect to participants who reside outside of the United States or are employed by a non-U.S. subsidiary in order to comply with local legal requirements or otherwise meet the objectives of the 2017 Plan.

Except in connection with equity restructurings and other situations in which share adjustments are specifically authorized, the 2017 Plan prohibits the Committee from repricing any outstanding “underwater” option or SAR awards without the prior approval of our shareholders. For these purposes, a “repricing” includes amending the terms of an option or SAR award to lower the exercise price, canceling an option or SAR award in conjunction with granting a replacement option or SAR award with a lower exercise price, canceling an underwater option or SAR award in exchange for cash, other property or grant of a new full value award, or otherwise making an underwater option or SAR award subject to any action that would be treated under accounting rules as a “repricing.”

Available Shares and Limitations on Awards

The number of shares of our common stock that may be the subject of awards and issued under the 2017 Plan is 2,250,000, less the number of shares granted under the 2012 Plan after December 25, 2016 and before the date the 2017 Plan becomes effective. After the 2017 Plan becomes effective, no new awards may be granted under the 2012 Plan and all new grants will be made under the 2017 Plan. Shares subject to awards outstanding under the 2012 Plan or the 2003 Plan that expire, are forfeited, or settled in cash after December 25, 2016 will become available for grant under the 2017 Plan. Except as provided in the previous sentence, no shares remaining available for future awards under 2012 Plan on the effective date of the 2017 Plan will be carried forward into the 2017 Plan.

Under the terms of the 2017 Plan, the number of shares of common stock subject to options or SARs that may be granted to any one participant during a calendar year may not exceed 300,000. With respect to performance-based compensation, the number of shares subject to full value awards that are denominated in shares or share equivalents that may be granted to any one participant during any calendar year may not exceed 200,000 and the maximum amount payable with respect to full value awards and cash incentive awards that are not denominated in shares or share equivalents that may be granted to any one participant during any calendar year may not exceed $5,000,000. These share limitations are subject to adjustment for changes in our corporate structure or shares, as described below. The shares of common stock covered by the 2017 Plan are authorized but unissued shares.

Shares of common stock that are issued under the 2017 Plan or that are potentially issuable pursuant to outstanding awards will reduce the 2017 Plan’s share reserve by one share for each share issued or issuable pursuant to an option or SAR award, and by 2.0 shares for each share issued or issuable pursuant to a full value award.

Any shares of common stock subject to an award under the 2017 Plan, or to an award under either of the 2012 or 2003 Plans after December 25, 2016, that expires, is forfeited, or is settled or paid in cash will, to the extent of such expiration, forfeiture or settlement, automatically become available for issuance under the 2017 Plan. Each such share that becomes available for issuance will be added back to the 2017 Plan share reserve as (i) one share if the share was subject to an option or SAR award under the 2017 Plan or either of the 2012 or 2003 Plans and (ii) as 2.0 shares if the share was subject to a full value

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award under the 2017 Plan or the 2012 Plan. However, any shares tendered or withheld to pay the exercise price or satisfy a tax withholding obligation in connection with any award, any shares repurchased by our company using option exercise proceeds and any shares subject to a SAR award that are not issued in connection with the stock settlement of the SAR award on its exercise may not be used again for new grants.

Awards that may be settled solely in cash will not reduce the share reserve and will not reduce the shares authorized for grant to a participant in each calendar year. Awards granted or shares of our common stock issued under the 2017 Plan upon the assumption of, or in substitution or exchange for, outstanding equity awards previously granted by an entity acquired by us or any of our subsidiaries (referred to as “substitute awards”) will not reduce the share reserve under the 2017 Plan. Additionally, if a company acquired by us or any of our subsidiaries has shares available under a pre-existing plan approved by its shareholders and not adopted in contemplation of such acquisition, the shares available for grant pursuant to the terms of that pre-existing plan may be used for awards under the 2017 Plan and will not reduce the share reserve under the 2017 Plan, but only if the awards are made to individuals who were not employed by or providing services to us or any of our subsidiaries immediately prior to such acquisition.

Share Adjustment Provisions

If certain transactions with our shareholders occur that cause the per share value of our common stock to change, such as stock splits, spin-offs, stock dividends or certain recapitalizations (referred to as “equity restructurings”), the Committee will equitably adjust (i) the class of shares issuable and the maximum number and kind of shares subject to the 2017 Plan, (ii) outstanding awards as to the class, number of shares and price per share, and (iii) award limitations prescribed by the 2017 Plan. Other types of transactions may also affect the common stock, such as reorganizations, mergers or consolidations. If there is such a transaction and the Committee determines that adjustments of the type previously described in connection with equity restructurings would be appropriate to prevent any dilution or enlargement of benefits under the 2017 Plan, the Committee will make such adjustments as it may deem equitable.

Types of Awards

The 2017 Plan permits us to award stock options, SARs, restricted stock awards, stock unit awards, other stock-based awards and cash incentive awards to eligible recipients. These types of awards are described in more detail below.

Options. Employees of our company or any subsidiary may be awarded options to purchase common stock that qualify as “incentive stock options” within the meaning of Section 422 of the Code, and any eligible recipient may be awarded options to purchase common stock that do not qualify as incentive stock options, referred to as “nonqualified stock options.” The exercise price to be paid by a participant at the time an option is exercised may not be less than 100% of the fair market value of one share of our common stock on the date of grant, unless the option is granted as a substitute award as described earlier. “Fair market value” under the 2017 Plan as of any date means the closing sale price of a share of our common stock on NASDAQ on that date. As of March 24, 2017, the closing sale price of a share of our common stock on the NASDAQ Global Select Market was $148.25.

The total purchase price of the shares to be purchased upon exercise of an option will be paid by the participant in cash unless the Committee allows exercise payments to be made, in whole or in part, (i) by means of a broker-assisted sale and remittance program, (ii) by delivery to us (or attestation as to ownership) of shares of common stock already owned by the participant, or (iii) by a “net exercise” of the option in which a portion of the shares otherwise issuable upon exercise of the option are withheld by us. Any shares delivered or withheld in payment of an exercise price will be valued at their fair market value on the exercise date.

An option will vest and become exercisable at such time, in such installments and subject to such conditions as may be determined by the Committee, and no option may have a term greater than 10 years from its date of grant. No dividends or dividend equivalents may be paid or credited with respect to shares subject to an option award.

The aggregate fair market value of shares of our common stock with respect to which incentive stock options granted to any participant may first become exercisable during any calendar year may not exceed $100,000. Any incentive stock options that become exercisable in excess of this amount will be treated as nonqualified stock options. The maximum number of shares that may be issued upon the exercise of incentive stock option awards under the 2017 Plan is 2,250,000, subject to adjustment for changes in our corporate structure or shares, as described above.

Stock Appreciation Rights (SARs). A SAR award provides the right to receive a payment from us, in the form of

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shares of our common stock, cash or a combination of both, equal to the difference between (i) the fair market value of a specified number of shares of our common stock on the date of exercise of the SAR, and (ii) the aggregate exercise price under the SAR of that number of shares. SARs will be subject to such terms and conditions, consistent with the other provisions of the 2017 Plan, as may be determined by the Committee. The Committee will have the sole discretion to determine the form in which payment of SARs will be made to a participant.

The exercise price per share of a SAR award will be determined by the Committee, but may not be less than 100% of the fair market value of one share of our common stock on the date of grant, unless the SAR is granted as a substitute award as described earlier. A SAR award will vest and become exercisable at such time, in such installments and subject to such conditions as may be determined by the Committee, and no SAR award may have a term greater than 10 years from its date of grant. No dividends or dividend equivalents may be paid or credited with respect to shares subject to a SAR award.

Restricted Stock Awards. A restricted stock award is an award of our common stock that vests at such times and in such installments as may be determined by the Committee. Until an award vests, the shares subject to the award are subject to restrictions and the possibility of forfeiture. The Committee may impose such restrictions or conditions to the vesting of restricted stock awards as it deems appropriate, including that the participant remain continuously employed by, or in the service of, us or a subsidiary of ours for a certain period or that we, or any of our subsidiaries or business units or the participant satisfy specified performance criteria.

Any dividends or distributions payable with respect to shares that are subject to the unvested portion of a restricted stock award will be subject to the same restrictions and risk of forfeiture as the shares to which such dividends or distributions relate. Participants are entitled to vote restricted shares prior to the time they vest.

Stock Unit Awards. A stock unit award is a right to receive the fair market value of a specified number of shares of our common stock, payable in cash, shares, or a combination of both, that vests at such times and in such installments as may be determined by the Committee. Until it vests, a stock unit award is subject to restrictions and the possibility of forfeiture. Stock unit awards will be subject to such terms and conditions, consistent with the other provisions of the 2017 Plan, as may be determined by the Committee. The Committee may provide for the payment of dividend equivalents on stock unit awards and other stock-based awards, but any such dividend equivalents will be subject to the same restrictions and risk of forfeiture as the underlying units or other share equivalents to which such dividend equivalents relate.

Other Stock-Based Awards. The Committee may grant awards of common stock and other awards that are valued by reference to and/or payable in shares of our common stock under the 2017 Plan. The Committee has discretion in determining the terms and conditions of such awards.

Cash Incentive Awards. Cash incentive awards are dollar-denominated performance-based awards the payment of which will be contingent upon the degree to which one or more specified performance goals are achieved over the specified performance period. Cash incentive awards may be granted upon the terms and at the times determined by the Committee.

Effective Date and Term of the 2017 Plan

The 2017 Plan will be effective on the date it is approved by our shareholders. No awards will be made under the 2017 Plan prior to its effective date. If the company’s shareholders fail to approve the 2017 Plan by June 30, 2017, the 2017 Plan will be of no further force or effect. Unless terminated earlier, the 2017 Plan will terminate on the tenth anniversary of the effective date. Awards outstanding under the 2017 Plan at the time it is terminated will continue in accordance with their terms and the terms of the 2017 Plan unless otherwise provided in the applicable agreements. Our board of directors may suspend or terminate the 2017 Plan at any time.

Amendment of the Plan

Our board of directors may amend the 2017 Plan from time to time, but no amendments to the 2017 Plan will be effective without shareholder approval if such approval is required under applicable laws, regulations or stock exchange rules, including shareholder approval for any amendment that seeks to modify the prohibition on underwater option or SAR re-pricing discussed above.

Termination, suspension or amendment of the 2017 Plan will not adversely affect any outstanding award without the consent of the affected participant, except for amendments necessary to comply with applicable laws or stock exchange rules.

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Transferability of Awards

In general, no right or interest in any award under the 2017 Plan may be assigned, transferred, exchanged or encumbered by a participant, voluntarily or involuntarily, except by will or the laws of descent and distribution. However, the Committee may provide that an award (other than an incentive stock option) may be transferable by gift to a participant’s family member or pursuant to a domestic relations order. Any permitted transferee of such an award will remain subject to all the terms and conditions of the award applicable to the participant.

Performance-Based Compensation Under Section 162(m)

The Committee may grant full value awards or cash incentive awards under the 2017 Plan to employees who are or may be “covered employees” as defined in Section 162(m) of the Code, that are intended to be “performance-based compensation” within the meaning of Section 162(m) in order to preserve the deductibility of those awards for federal income tax purposes. Under current IRS interpretations, “covered employees” of a company are its chief executive officer and any other executive officer (other than the chief financial officer) who is among the three other most highly compensated executive officers employed by our company at a year end. Participants are entitled to receive payment for a Section 162(m) performance-based award for any given performance period only to the extent that pre-established performance goals set by the Committee for the performance period are satisfied. Options and SAR awards granted under the 2017 Plan need not be conditioned upon the achievement of performance goals in order to constitute performance-based compensation for Section 162(m) purposes.

The pre-established performance goals set by the Committee must be based on one or more of the following performance measures specified in the 2017 Plan: (i) revenue; (ii) net earnings; (iii) earnings before income taxes; (iv) earnings before one or more of interest, taxes, depreciation, amortization and other adjustments; (v) operating income; (vi) profitability as measured by return ratios (including, but not limited to, return on assets, return on equity, return on investment and return on revenue) or by the degree to which any of the foregoing earnings measures exceed a percentage of revenue; (vii) margins (including, but not limited to, one or more of gross, operating and net earnings margins); (viii) shareholders’ equity; (ix) share price; (x) total shareholder return; (xi) improvement in or attainment of cost and/or expense levels or cost and/or expense savings; (xii) cash flow; (xiii) market share; (xiv) same-store sale increases; (xv) increases in the number of store locations; (xvi) asset quality; (xvii) non-performing assets; (xviii) operating assets; (xix) operating expenses; (xx) economic value added; (xxi) improvement in or attainment of working capital levels, (xxii) employee retention; (xxiii) customer satisfaction; (xxiv) implementation or completion of critical projects; (xxv) balance of cash, cash equivalents and marketable securities; (xxvi) inventory levels; (xxvii) inventory or operating asset turnover; (xxviii) accounts receivable levels; and (xxix) net operating profit after taxes.

The Committee may select one measure or multiple measures for assessing performance, and the measurement may be based upon company-wide, subsidiary, business unit or individual performance, and may be expressed in absolute amounts, on a per share basis (basic or diluted), relative to one or more other performance measures, as a growth rate or change from preceding periods, or by relative comparison to the performance of other companies or other external measures. The Committee will define in an objective fashion the manner of calculating the performance goals based on the performance criteria it selects to use in any performance period, and will establish such performance goals within the time period prescribed by, and will otherwise comply with the requirements of, Section 162(m). In determining the actual amount to be paid with respect to an individual performance-based award for a performance period, the Committee may reduce (but not increase) the amount that would otherwise be payable as a result of satisfying the applicable performance goals.

Approval of the 2017 Plan at the Annual Meeting will be deemed to include, among other things, approval of the eligibility of executive officers and other employees to participate in the 2017 Plan, the performance measures upon which awards intended to be “performance-based compensation” under Section 162(m) may be made, and the qualification of option and SAR awards granted under the 2017 Plan as “performance-based compensation” for purposes of Section 162(m).

Change in Control

If a change in control of our company occurs, our board of directors or the Committee may, in its discretion, provide for one or more of the following with respect to awards under the 2017 Plan: (i) the continuation, assumption or replacement of outstanding awards; (ii) the acceleration of vesting and exercisability of outstanding awards; (iii) the cancellation of unvested and unexercised awards; or (iv) the cancellation of awards in exchange for payment to participants in cash equal to the difference, if any, between the fair market value of the consideration that would be received in the change of control transaction for the number of shares subject to the award and the aggregate exercise price (if any) of the shares subject to the award. For these purposes, a “change in control” generally occurs if (i) a person or group acquires 30% or more of our outstanding stock, (ii) our “continuing directors” cease to represent a majority of our board of directors, (iii) a sale or other disposition of all or substantially

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all of the assets of the company, or a merger, consolidation, share exchange or similar transaction involving the company, is consummated (unless the company’s outstanding stock immediately prior to the transaction continues to represent over 50% of the outstanding stock of the company or the surviving entity immediately after the transaction), or (iv) our shareholders approve a complete liquidation or dissolution of the company.

Effect of Termination of Employment

The effect of a termination of a participant’s service on any outstanding awards granted under the 2017 Plan will be as provided in the applicable award agreement. Under the 2017 Plan, “cause” is generally defined as (i) the commission of a felony or conviction of a criminal misdemeanor involving fraud, misrepresentation or theft; (ii) gross misconduct or any act of fraud, disloyalty or dishonesty related to a participant’s employment or otherwise likely to cause material harm to the company; (iii) a material violation of the company’s policies or codes of conduct; or (iv) the willful or material breach of any agreement between the participant and the company.

Deferral of Payouts

The Committee may permit or require the deferral by a participant of the receipt of shares or cash in settlement of any full value award under the 2017 Plan, and will prescribe the terms, conditions and procedures for such deferrals, which may include effecting a deferral in accordance with our existing deferred compensation plan. Shares to effect the settlement of any such deferral will be drawn from and charged against the 2017 Plan’s share reserve.

U.S. Federal Income Tax Consequences

The following is a summary of the principal United States federal income tax consequences to our company and to participants subject to U.S. taxation with respect to awards granted under the 2017 Plan, based on current statutes, regulations and interpretations.

Non-qualified Stock Options

If a participant is granted a non-qualified stock option under the 2017 Plan, the participant will not recognize taxable income upon the grant of the option. Generally, the participant will recognize ordinary income at the time of exercise in an amount equal to the difference between the fair market value of the shares acquired at the time of exercise and the exercise price paid. The participant’s basis in the common stock for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of our common stock on the date the option was exercised. Any subsequent gain or loss will be taxable as a capital gain or loss. Our company will generally be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes as ordinary income.

Incentive Stock Options

If a participant is granted an incentive stock option under the 2017 Plan, the participant will not recognize taxable income upon grant of the option. Additionally, if applicable holding period requirements (a minimum of two years from the date of grant and one year from the date of exercise) are met, the participant will not recognize taxable income at the time of exercise. However, the excess of the fair market value of the shares acquired at the time of exercise over the aggregate exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If shares acquired upon exercise of an incentive stock option are held for the holding period described above, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the shares will be treated as a long-term capital gain or loss, and our company will not be entitled to any deduction. Except in the event of death, if the holding period requirements are not met, the incentive stock option will be treated as one that does not meet the requirements of the Code for incentive stock options and the tax consequences described for nonqualified stock options will generally apply.

Other Awards

The current federal income tax consequences of other awards authorized under the 2017 Plan generally follow certain basic patterns. An award of restricted stock results in income recognition by a participant in an amount equal to the fair market value of the shares received at the time the restrictions lapse and the shares vest, unless the participant elects under Code Section 83(b) to accelerate income recognition and the taxability of the award to the date of grant. Stock unit awards generally result in income recognition by a participant at the time payment of such an award is made in an amount equal to the amount paid in cash or the then-current fair market value of the shares received, as applicable. SAR awards result in income recognition by a participant at the time such an award is exercised in an amount equal to the amount paid in cash or the then-current fair market value of the shares received by the participant, as applicable. In each of the foregoing cases, our company will generally have a corresponding deduction at the time the participant recognizes ordinary income, subject to Code Section 162(m) with respect to covered employees.

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Section 162(m) of the Code

Code Section 162(m) denies a deduction to any publicly-held corporation for compensation paid to certain “covered employees” in a taxable year to the extent that compensation to the covered employee exceeds $1,000,000, unless, among other exceptions, the compensation qualifies as “performance-based compensation.” The 2017 Plan is intended to meet the requirements of Section 162(m), but full value awards granted under the 2017 Plan will only be treated as qualified performance-based compensation under Section 162(m) if the awards and the procedures associated with them comply with all other requirements of Section 162(m), including that the maximum amount of compensation a covered employee may receive is based on the satisfaction of pre-established objective performance goals.

Section 409A of the Code

The foregoing discussion of tax consequences of awards under the 2017 Plan assumes that the award discussed is either not considered a “deferred compensation arrangement” subject to Section 409A of the Code, or has been structured to comply with its requirements. If an award is considered a deferred compensation arrangement subject to Section 409A but fails to comply, in operation or form, with the requirements of Section 409A, the affected participant would generally be required to include in income when the award vests the amount deemed “deferred,” would be required to pay an additional 20 percent income tax on such amount, and would be required to pay interest on the tax that would have been paid but for the deferral.

Awards Under the 2017 Plan

Because the 2017 Plan will not become effective until it is approved by our shareholders, the Committee has not yet approved any awards under, or subject to, the 2017 Plan. In addition, because all awards under the 2017 Plan are discretionary with the Committee, neither the number nor types of future 2017 Plan awards to be received by or allocated to particular participants or groups of participants is presently determinable.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
APPROVAL OF THE 2017 INCENTIVE COMPENSATION PLAN USING THE YELLOW PROXY CARD

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EXECUTIVE COMPENSATION DISCLOSURES

Summary Compensation Table

The following table contains compensation information for the last three fiscal years relating to the named executive officers identified for fiscal year 2016. Note that the CIP awards earned for each fiscal year are reported under the heading “Non-Equity Incentive Plan Compensation”. The values shown under the headings of “Stock Awards” and “Option Awards” are the grant date fair values of the awards received in each fiscal year. Refer to the footnotes below for further explanation of all the items included in the Summary Compensation Table.