<PAGE>
[LOGO]
6820 LBJ FREEWAY
DALLAS, TEXAS 75240
(972) 980-9917
September 23, 1997
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Brinker International, Inc. (the "Company") to be held at 10:00 a.m., on
Thursday, November 6, 1997, at the General Cinema NorthPark Theater I & II,
located at 1100 NorthPark Center, Dallas, Texas. At this meeting you will be
asked:
(A) to elect eleven (11) directors of the Company to serve until the next
annual meeting of shareholders or until their respective successors shall
be elected and qualified;
(B) to approve the Company's Long-Term Performance Share Plan; and
(C) to transact such other business as may properly come before the meeting
or any adjournment thereof.
Our agenda for the meeting will also include a strategic overview of the
Company.
It is important that your shares be represented at the meeting, whether or
not you attend personally. I urge you to sign, date and return the enclosed
proxy at your earliest convenience.
Very truly yours,
NORMAN E. BRINKER
CHAIRMAN OF THE BOARD
<PAGE>
BRINKER INTERNATIONAL, INC.
6820 LBJ FREEWAY
DALLAS, TEXAS 75240
(972) 980-9917
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 6, 1997
To our Shareholders:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Brinker
International, Inc., a Delaware corporation (the "Company"), will be held at the
General Cinema NorthPark Theater I & II, located at 1100 NorthPark Center,
Dallas, Texas, on Thursday, November 6, 1997, at 10:00 a.m., local time, for the
following purposes:
(A) to elect eleven (11) directors of the Company to serve until the next
annual meeting of shareholders or until their respective successors shall
be elected and qualified;
(B) to approve the Company's Long-Term Performance Share Plan; and
(C) to transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on September 8, 1997,
are entitled to notice of, and to vote at, the meeting or any adjournment
thereof.
It is desirable that as large a proportion as possible of the shareholders'
interests be represented at the meeting. Whether or not you plan to be present
at the meeting, you are requested to sign and return the enclosed proxy in the
envelope provided so that your stock will be represented. The giving of such
proxy will not affect your right to vote in person, should you later decide to
attend the meeting. Please date and sign the enclosed proxy and return it
promptly in the enclosed envelope.
By Order of the Board of Directors,
ROGER F. THOMSON
SECRETARY
Dallas, Texas
September 23, 1997
<PAGE>
BRINKER INTERNATIONAL, INC.
6820 LBJ FREEWAY
DALLAS, TEXAS 75240
(972) 980-9917
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 6, 1997
------------------------
This Proxy Statement is first being mailed on or about September 23, 1997,
to shareholders of Brinker International, Inc., a Delaware corporation (the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the annual meeting of shareholders to be
held on November 6, 1997. Proxies in the form enclosed will be voted at the
meeting if properly executed, returned to the Company prior to the meeting and
not revoked. The proxy may be revoked at any time before it is voted by giving
written notice or a duly executed proxy bearing a later date to the Secretary of
the Company, or voting in person.
OUTSTANDING CAPITAL STOCK
The record date for shareholders entitled to vote at the annual meeting is
September 8, 1997 (the "Record Date"). At the close of business on the Record
Date, the Company had issued and outstanding and entitled to vote at the meeting
65,367,320 shares of Common Stock, $0.10 par value ("Common Stock").
ACTION TO BE TAKEN AT THE MEETING
The accompanying proxy, unless the shareholder otherwise specifies in the
proxy, will be voted (i) for the election as directors of the Company of the
eleven (11) persons named under the caption "Directors and Executive
Officers--Directors", (ii) for the approval of the Company's Long-Term
Performance Share Plan, and (iii) at the discretion of the proxy holders, on any
other matter that may properly come before the meeting or any adjournment
thereof.
Where shareholders have appropriately specified how their proxies are to be
voted, they will be voted accordingly. If any other matter or business is
brought before the meeting, the proxy holders may vote the proxies at their
discretion. The directors do not know of any such other matter or business.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock as of the Record Date is necessary to
constitute a quorum at the annual meeting. Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. Abstentions are counted in tabulations of votes cast on
proposals presented to shareholders. Broker non-votes are not counted for
purposes of determining whether a proposal has been approved. In deciding all
questions, a holder of Common Stock is entitled to one vote, in person or by
proxy, for each share held in his or her name on the Record Date.
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as to the number of
shares of Common Stock of the Company beneficially owned by the principal
shareholders of the Company.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------------
NUMBER OF
NAME AND ADDRESS SHARES(1) PERCENT
- -------------------------------------------------------------------- ------------- -----------
<S> <C> <C>
The Capital Group Companies, Inc.................................... 11,281,700 17.26%
333 South Hope Street
Los Angeles, California 90071
</TABLE>
- ------------------------
(1) As of June 30, 1997. Based on information contained in Schedule 13G dated as
of February 12, 1997, as supplemented via subsequent telephone
communication.
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SECURITY OWNERSHIP OF MANAGEMENT
AND ELECTION OF DIRECTORS
Eleven (11) directors are to be elected at the meeting. Each nominee will be
elected to hold office until the next annual meeting of the shareholders or
until his or her successor is elected and qualified. To be elected a director,
each nominee must receive a plurality of all of the votes cast at the meeting
for the election of directors. Should any nominee become unable or unwilling to
accept nomination or election, the proxy holders may vote the proxies for the
election, in his or her stead, of any other person the Board of Directors may
recommend. All nominees have expressed their intention to serve the entire term
for which election is sought. The following table sets forth certain information
concerning security ownership of management and nominees for election as
directors of the Company:
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK NUMBER ATTRIBUTABLE
BENEFICIALLY TO OPTIONS
OWNED AS OF EXERCISABLE WITHIN
SEPTEMBER 8, 60 DAYS OF PERCENT OF
NAME 1997(1)(2) SEPTEMBER 8, 1997 CLASS
- ---------------------------------------------------------------- ----------------- ------------------- -----------
<S> <C> <C> <C>
Norman E. Brinker............................................... 2,109,009(3) 1,058,750 3.23%
Douglas H. Brooks............................................... 470,350 453,028 *
F. Lane Cardwell, Jr............................................ 266,022 246,000 *
Gerard V. Centioli.............................................. 334,462(4) 30,000 *
Ronald A. McDougall............................................. 840,022 815,000 1.29%
Debra L. Smithart............................................... 237,910(5) 203,841 *
Roger F. Thomson................................................ 146,000 142,500 *
Daniel W. Cook, III............................................. -0- -0- *
Rae F. Evans.................................................... 22,127(6) 20,542 *
J.M. Haggar, Jr................................................. 84,354 22,584 *
Frederick S. Humphries.......................................... 10,317 9,667 *
Ronald Kirk..................................................... -0- -0- *
Jeffrey A. Marcus............................................... -0- -0- *
James E. Oesterreicher.......................................... 11,500 11,000 *
Roger T. Staubach............................................... 23,500 13,000 *
All executive officers and directors as a group (20 persons).... 4,932,671 3,380,944 7.55%
</TABLE>
- ------------------------
* Less than one percent (1%)
(1) Beneficial ownership has been determined in accordance with the rules of the
Securities and Exchange Commission. Except as noted, and except for any
community property interests owned by spouses, the listed individuals have
sole investment power and sole voting power as to all shares of stock of
which they are identified as being the beneficial owners.
(2) Includes shares of Common Stock which may be acquired by exercise of
exercisable options granted or vesting under the Company's 1983 Incentive
Stock Option Plan, the 1984 Non-Qualified Stock Option Plan, the 1992
Incentive Stock Option Plan and the 1991 Stock Option Plan for Non-Employee
Directors and Consultants, as applicable.
(3) Includes 20,250 shares of Common Stock held of record by a family trust of
which Mr. Brinker is trustee.
(4) Includes 2,000 shares of Common Stock held of record by a family trust of
which Mr. Centioli is trustee.
(5) Effective September 1, 1997, Ms. Smithart resigned from the Board of
Directors and from her position as Executive Vice President and Chief
Financial Officer of the Company.
(6) Includes 1,875 shares of Common Stock held of record by a family trust of
which Mrs. Evans is trustee.
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The Company has established a guideline that all senior officers of the
Company own stock in the Company, believing that it is important to further
encourage and support an ownership mentality among the senior officers that will
continue to align their personal financial interests with the long-term
interests of the Company's shareholders. Pursuant to the guideline, the minimum
amount of Company Common Stock that a senior officer will be required to own
will be determined by such officer's position within the Company as well as
annual compensation. The Company has established a program with a third-party
lender pursuant to which the senior officers will be able to obtain financing
for purposes of attaining the minimum stock ownership levels referred to above.
Any loans obtained by such senior officers to finance such stock acquisitions
are facilitated by the Company pursuant to an agreement in which the senior
officer pledges the underlying stock and future incentive payments which may be
receivable from the Company as security for the loan.
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
A brief description of each person nominated to become a director of the
Company is provided below. Except for Daniel W. Cook, III, all nominees are
currently serving as directors of the Company. Each of the current directors
were elected at the last annual meeting of the Company's shareholders held on
November 7, 1996, except Ronald Kirk and Jeffrey A. Marcus, both of whom were
appointed to the Board of Directors in January 1997.
NORMAN E. BRINKER, 66, served as Chairman of the Board of Directors and
Chief Executive Officer of the Company from September 1983 to June 1995, with
the exception of a brief period during which Mr. Brinker was incapacitated due
to an injury. Mr. Brinker continues to serve as Chairman of the Board of
Directors. Mr. Brinker is a member of the Nominating Committee of the Company.
He was the founder of S&A Restaurant Corp., having served as its President from
February 1966 through May 1977 and as its Chairman of the Board of Directors and
Chief Executive Officer from May 1977 through July 1983. From June 1982 through
July 1983, Mr. Brinker served as Chairman of the Board of Directors and Chief
Executive Officer of Burger King Corporation, while simultaneously occupying the
position of President of The Pillsbury Company Restaurant Group. Mr. Brinker
currently serves as a member of the Board of Directors of Haggar Clothing
Company.
RONALD A. MCDOUGALL, 55, was elected President and Chief Executive Officer
of the Company in June 1995 having formerly held the office of President and
Chief Operating Officer since 1986. Mr. McDougall joined the Company in 1983 and
served as Executive Vice President--Marketing and Strategic Development until
his promotion to President. Prior to joining the Company, Mr. McDougall held
senior management positions at Proctor and Gamble, Sara Lee, The Pillsbury
Company and S&A Restaurant Corp. Mr. McDougall has served as a member of the
Board of Directors of the Company since September 1983 and is a member of the
Executive and Nominating Committees of the Company. Mr. McDougall serves on the
Board of Directors of Excel Communications, Inc.
GERARD V. CENTIOLI, 43, was elected Senior Vice President--Emerging Concepts
President in April 1997. Mr. Centioli joined the Company as Senior Vice
President--Maggiano's/Corner Bakery Concepts President in August 1995 and was
named Senior Vice President--Italian Concepts President in January 1996. Mr.
Centioli previously served as Senior Partner of Lettuce Entertain You
Enterprises, Inc. and President and Chief Executive Officer of the Maggiano's
Little Italy and The Corner Bakery Divisions. Prior to joining Lettuce Entertain
You Enterprises, Inc. in 1984, Mr. Centioli served as Vice President--Division
President of Collins Foods International, Inc. Mr. Centioli has served as a
member of the Board of Directors of the Company since November 1995.
DANIEL W. COOK, III, 62, is a limited partner with The Goldman Sachs Group,
L.P. Mr. Cook started with The Goldman Sachs Group, L.P. in 1961 and was a
partner when he retired in 1992. Mr. Cook also
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serves on the Board of Directors for Centex Corporation. Mr. Cook is a member of
the Board of Trustees of Southern Methodist University as well as Vice-Chair of
the Edwin L. Cox School of Business Executive Board.
RAE F. EVANS, 49, is currently President of Rae Evans & Associates, a firm
specializing in Washington corporate strategies. From 1982 until January 1995,
Mrs. Evans held the title of Vice President, National Affairs of Hallmark Cards,
Inc. Mrs. Evans is a member of the Nominating and Audit Committees of the
Company and has served as a member of the Board of Directors since January 1990.
She is a member of the Business Government Relations Council and is a past
president of that organization. She is a member of The Board of Directors of the
National Women's Museum, the Meridian International House and a member of the
Economic Club of Washington. Mrs. Evans is also a member of the Catalyst Board
of Advisors and the National Women's Economic Alliance. Mrs. Evans also serves
on the Board of Directors of Haggar Clothing Company.
J. M. HAGGAR, JR., 72, is currently the owner of J.M. Haggar, Jr.
Investments, a business he has operated since retiring as Chairman of the Board
of Directors of Haggar Clothing Company in February 1995. Mr. Haggar previously
held the positions of President and Chief Executive Officer of Haggar Clothing
Company until 1991. Mr. Haggar is a member of the Compensation and Audit
Committees of the Company and has served as a member of the Company's Board of
Directors since April 1985.
FREDERICK S. HUMPHRIES, 61, is the President of Florida A&M University in
Tallahassee, Florida having held this position since 1985. Prior to joining
Florida A&M University, Dr. Humphries was President of Tennessee State
University in Nashville for over 10 years. Dr. Humphries serves as Chairman of
the State Board of Education Advisory Committee on the Education of Blacks in
Florida and Chairman of the Board of Regents, Five-Year Working Group for
Agriculture, State University System of Florida, in addition to being involved
in various civic and community activities. Mr. Humphries has served on the Board
of Directors of the Company since May 1994 and is a member of the Audit
Committee of the Company. He is also a member of the Board of Directors of
Wal-Mart, Inc.
RONALD KIRK, 43, is currently Mayor of the City of Dallas and a partner in
the law firm of Gardere & Wynne. He was elected Mayor in 1995, and previously
served as Secretary of State of the State of Texas from 1994 to 1995. Mr. Kirk
was engaged in the private practice of law from 1989 to 1994, served as an
Assistant City Attorney for Dallas from 1983 to 1989 and as a legislative aide
to U.S. Senator Lloyd Bentsen from 1983 to 1989. Mayor Kirk is an honors
graduate of Austin College and earned his law degree from The University of
Texas. Mayor Kirk was appointed to the Board of Directors in January 1997 and is
a member of the Nominating Committee of the Company.
JEFFREY A. MARCUS, 50, is currently Chairman, President and Chief Executive
Officer of Marcus Cable, with headquarters in Dallas. He formed the company in
1990 after spending more than 20 years in the cable television industry, a
career Mr. Marcus embarked upon while a student at the University of California
at Berkeley. Mr. Marcus is one of the owners of the Texas Rangers Baseball Club
and is active in several civic and charitable organizations. Mr. Marcus was
appointed to the Board of Directors in January 1997 and is a member of the
Executive Committee of the Company.
JAMES E. OESTERREICHER, 56, is the Chairman of the Board and Chief Executive
Officer of J.C. Penney Company, Inc., having been elected to the position of
Chairman in January 1997 and to the position of Chief Executive Officer in
January 1995. Mr. Oesterreicher served as Vice Chairman of the Board from 1995
to 1997, as President of JCPenney Stores and Catalog from 1992 to 1995 and as
Director of JCPenney Stores from 1988 to 1992. Mr. Oesterreicher has been with
the J.C. Penney Company since 1964 where he started as a management trainee. He
serves as a Director for various
5
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entities, including Texas Utilities Company, Presbyterian Healthcare Systems,
National Retail Federation, Circle Ten Council--Boy Scouts of America, National
4-H Council, National Organization on Disability and March of Dimes Birth
Defects Foundation. He also serves as a member of the Policy Committee of the
Business Roundtable. Mr. Oesterreicher has served as a member of the Board of
Directors of the Company since May 1994 and is a member of the Compensation and
Nominating Committees of the Company.
ROGER T. STAUBACH, 55, has been Chairman of the Board and Chief Executive
Officer of The Staubach Company, a national real estate company specializing in
tenant representation, since 1982. He has served as a member of the Board of
Directors of the Company since May 1993 and is a member of the Executive and
Compensation Committees of the Company. Mr. Staubach is a 1965 graduate of the
U.S. Naval Academy and served four years in the Navy as an officer. In 1968, he
joined the Dallas Cowboys professional football team as quarterback and was
elected to the National Football League Hall of Fame in 1985. He currently
serves on the Board of Directors of Halliburton Company, American AAdvantage
Funds and Columbus Realty Trust and is active in numerous civic, charity and
professional organizations.
EXECUTIVE OFFICERS
The following persons are executive officers of the Company who are not
nominated to serve on the Company's Board of Directors:
DOUGLAS H. BROOKS, 45, joined the Company as an Assistant Manager in
February 1978 and was promoted to General Manager in April 1978. In March 1979,
Mr. Brooks was promoted to Area Supervisor and in May 1982 to Regional Director.
He was again promoted in March 1987 to Senior Vice President--Central Region
Operations and to the position of Concept Head and Senior Vice
President--Chili's Operations in June 1992. Mr. Brooks was promoted to his
current position of Senior Vice President--Chili's Grill & Bar Concept President
in June 1994.
F. LANE CARDWELL, JR., 45, was elected Executive Vice President--Eatzi's
Concept President in June 1996, having formerly held the positions of Executive
Vice President--Strategic Development from June 1992 until October 1995 and
Executive Vice President and Chief Administrative Officer from October 1995
until June 1996. Mr. Cardwell joined the Company as Vice President--Strategic
Development in August 1988 and became Senior Vice President--Strategic
Development in December 1990. Before joining the Company, Mr. Cardwell was
employed by S&A Restaurant Corp. in various capacities from November 1978 to
August 1988. Mr. Cardwell served as a member of the Board of Directors of the
Company from 1991 to 1996.
LESLIE CHRISTON, 43, was elected Senior Vice President--On The Border
President in April 1997, having previously served as Vice President of
Operations/On The Border since joining the Company in July 1996. Prior to this
time, Ms. Christon held the position of Senior Vice President of Operations of
Red Lobster Restaurants from November 1994 to June 1996 and she was with El
Chico from June 1981 to November 1994. Ms. Christon serves on the Board of
Directors of the Women's Foodservice Forum and is the past president of the
Roundtable for Women in Foodservice, Inc.
KENNETH D. DENNIS, 44, joined the Company as a Manager in November 1976 and
was promoted to General Manager in June 1978. In February 1979, he became
Director of Internal Systems and in September 1983 became Director of Marketing.
Mr. Dennis was promoted to Vice President of Marketing in August 1986 and to
Senior Vice President of Marketing in August 1993. In February 1997, Mr. Dennis
became Senior Vice President--Chief Operating Officer of Cozymel's and was
elected to Senior Vice President--Cozymel's President in September 1997. Mr.
Dennis serves on the Board of Directors of the Marketing Executives Group and is
the past Co-Chairman.
6
<PAGE>
CAROL E. KIRKMAN, 40, was appointed Executive Vice President of Human
Resources in June 1997 after serving as Senior Vice President of Human Resources
since April 1996. Ms. Kirkman joined the Company as Corporate Counsel in 1990
and was promoted to Vice President/Assistant General Counsel in 1994. Ms.
Kirkman was an attorney in private practice in Dallas, Texas from 1982 until
1987 and worked as a commercial and retail real estate broker in southern
California from 1987 until 1990.
JOHN C. MILLER, 42, joined the Company as Vice President--Special Concepts
in September 1987. In October 1988, he was elected as Vice President--Joint
Venture/Franchise and served in this capacity until August 1993 when he was
promoted to Senior Vice President--New Concept Development. Mr. Miller was named
Senior Vice President--Mexican Concepts in September 1994 and was subsequently
elected as Senior Vice President--Mexican Concepts President in October 1995. In
April 1997, Mr. Miller was elected Senior Vice President--Romano's Macaroni
Grill President. Mr. Miller worked in various capacities with the Taco Bueno
Division of Unigate Restaurants prior to joining the Company.
RUSSELL G. OWENS, 38, joined the Company in 1983 as Controller. He was
elected Vice President of Planning in 1986 and Vice President of Operations
Analysis in 1991. Mr. Owens was promoted to Senior Vice President of Operations
Analysis in 1993 and was named Senior Vice President of Strategic
Development--Italian Concepts in 1996. Mr. Owens was elected Executive Vice
President and Chief Strategic Officer in June 1997 and assumed the position of
Chief Financial Officer in September 1997. Prior to joining the Company, Mr.
Owens worked for the public accounting firm Deloitte & Touche.
ROGER F. THOMSON, 48, joined the Company as Senior Vice President, General
Counsel and Secretary in April 1993 and was promoted to Executive Vice
President, General Counsel and Secretary in March 1994. In June 1996, Mr.
Thomson was promoted to the position of Executive Vice President, Chief
Administrative Officer, General Counsel and Secretary and was a Director of the
Company from 1993 until 1995. From 1988 until April 1993, Mr. Thomson served as
Senior Vice President, General Counsel and Secretary for Burger King
Corporation. Prior to 1988, Mr. Thomson spent ten years at S&A Restaurant Corp.
where he was Executive Vice President, General Counsel and Secretary.
CLASSES OF DIRECTORS
For purposes of determining whether non-employee directors will be nominated
for reelection to the Board of Directors, the non-employee directors have been
divided into four classes. Each non-employee director will continue to be
subject to reelection by the shareholders of the Company each year. However,
after a non-employee director has served on the Board of Directors for four
years, such director shall be deemed to have been advised by the Nominating
Committee that he or she will not stand for reelection at the subsequent annual
meeting of shareholders and shall be considered a "Retiring Director".
Notwithstanding this policy, the Nominating Committee may determine that it is
appropriate to renominate any or all of the Retiring Directors after first
considering the appropriateness of nominating new candidates for election to the
Board of Directors. The four classes of non-employee directors are as follows:
Messrs. Humphries and Oesterreicher and Mrs. Evans comprise Class 1 and will be
considered Retiring Directors as of the annual meeting of shareholders following
the end of the 1998 fiscal year. There are no members of Class 2. Messrs.
Haggar, Kirk and Marcus comprise Class 3 and will be considered Retiring
Directors as of the annual meeting of shareholders following the end of the 2000
fiscal year. Messrs. Cook and Staubach comprise Class 4 and will be considered
Retiring Directors as of the annual meeting of shareholders following the end of
the 2001 fiscal year.
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COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has established an Executive
Committee, Audit Committee, Compensation Committee, and Nominating Committee.
The Executive Committee (currently comprised of Messrs. McDougall, Marcus, and
Staubach) met four (4) times during the fiscal year and has authority to act for
the Board on most matters during the intervals between Board meetings.
All of the members of the Audit and Compensation Committees are directors
independent of management who are not and never have been officers or employees
of the Company. The Audit Committee is currently comprised of Messrs. Haggar and
Humphries and Mrs. Evans and the Committee met five (5) times during the fiscal
year. Included among the functions performed by the Audit Committee are: the
review with independent auditors of the scope of the audit and the results of
the annual audit by the independent auditors; consideration and recommendation
to the Board of the selection of the independent auditors for the next year; the
review with management and the independent auditors of the annual financial
statements of the Company; and the review of the scope and adequacy of internal
audit activities.
The Compensation Committee is currently comprised of Messrs. Haggar,
Oesterreicher and Staubach and it met six (6) times during the fiscal year.
Functions performed by the Compensation Committee include: ensuring the
effectiveness of senior management and management continuity, ensuring the
reasonableness and appropriateness of senior management compensation
arrangements and levels, the adoption, amendment and administration of
stock-based incentive plans (subject to shareholder approval where required),
management of the various stock option plans of the Company, approval of the
total number of available shares to be used each year in stock-based plans,
approval of the adoption and amendment of significant compensation plans and
approval of all compensation actions for officers, particularly at and above the
level of executive vice president. The specific nature of the Committee's
responsibilities as it relates to executive officers is set forth below under
"Report of the Compensation Committee."
The purpose of the Nominating Committee is to recommend to the Board of
Directors potential non-employee members to be added as new or replacement
members to the Board of Directors. The Nominating Committee will consider a
shareholder-recommended nomination for director to be voted upon at the 1998
annual meeting of shareholders provided that the recommendation must be in
writing, set forth the name and address of the nominee, contain the consent of
the nominee to serve, and be submitted on or before May 26, 1998. The Nominating
Committee is composed of Messrs. Brinker, Kirk, McDougall and Oesterreicher and
Mrs. Evans and it met four (4) times during the fiscal year.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company receive $1,000 for each
meeting of the Board of Directors attended and $1,000 for each meeting of any
committee of the Board of Directors attended. The Company also reimburses
directors for costs incurred by them in attending meetings of the Board.
Directors who are not employees of the Company receive grants of stock
options under the Company's 1991 Stock Option Plan for Non-Employee Directors
and Consultants. A new director who is not an employee of the Company will
receive as compensation (a) 20,000 stock options at the beginning of such
director's term, and (b) an annual cash payment of $36,000, at least 25% of
which must be taken in the form of stock options. If a director is appointed to
the Board of Directors at any time other than at an annual meeting of
shareholders, the director will receive a prorated portion of the annual cash
compensation for the period from the date of election or appointment to the
Board of Directors until the meeting of the Board of Directors held
contemporaneous with the next annual meeting of shareholders. If a director
elects to receive cash, the first payment will be made at the
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Board of Directors' meeting held contemporaneous with the next annual meeting of
shareholders. The stock options will be granted as of the 60th day following
such meeting (or if the 60th day is not a business day, on the first business
day thereafter) at the fair-market value on the date of grant. One-third ( 1/3)
of the options will vest on each of the second, third and fourth anniversaries
of the date of grant. If a director is a Retiring Director who is being
nominated for an additional term on the Board of Directors, each such
renominated director will receive an additional grant of 10,000 stock options at
the beginning of such director's new term.
For purposes of applying this compensation program to the current
non-employee directors of the Company, the previous compensation program was
blended with this compensation program in order to determine annual compensation
payable to non-employee directors until such directors become Retiring Directors
and leave the board or are approved by the Nominating Committee to serve for an
additional four years. Mrs. Evans previously has received a grant of 15,000
stock options and will receive an annual cash retainer of $16,000; Dr. Humphries
previously has received a grant of 15,000 stock options and will receive an
annual cash retainer of $16,000; Mr. Oesterreicher previously has received a
grant of 15,000 stock options and will receive an annual cash retainer of
$6,000; Mr. Staubach previously has received a grant of 10,000 stock options and
has received an annual cash retainer of $6,000. If Mr. Cook is elected to the
Board of Directors, he will be compensated according to the new compensation
plan. As Mr. Staubach is currently a Retiring Director, if he is re-elected to
the Board of Directors, he will be compensated according to the new compensation
plan. Messrs. Haggar, Kirk and Marcus are being compensated according to the new
compensation plan.
During the year ended June 25, 1997, the Board of Directors held seven (7)
meetings; each incumbent director attended 75% of the aggregate total of
meetings of the Board of Directors and Committees on which he or she served.
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EXECUTIVE COMPENSATION
The following summary compensation table sets forth the annual compensation
for the Company's five highest compensated executive officers, including the
Chief Executive Officer, whose salary and bonus exceeded $100,000 in fiscal
1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------
AWARDS PAYOUTS
----------- -----------
ANNUAL COMPENSATION SECURITIES LONG-TERM
------------------------ UNDERLYING INCENTIVE ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS PAYOUTS COMPENSATION(1)
- ------------------------------------ --------- ----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ronald A. McDougall................. 1997 $ 825,000 $ 396,000 200,000 $ 67,289 $ 29,194
President and Chief 1996 $ 744,808 $ -0- 375,000 $ 69,860 $ 18,396
Executive Officer 1995 $ 574,038 $ 278,839 125,000 $ 86,565 $ 50,555
Debra L. Smithart................... 1997 $ 350,000 $ 115,500 50,000 $ 40,374 $ 11,225
Executive Vice 1996 $ 304,423 $ -0- 90,000 $ 46,574 $ 6,828
President and Chief 1995 $ 264,038 $ 95,714 30,000 $ 63,481 $ 11,805
Financial Officer(2)
Douglas H. Brooks................... 1997 $ 333,654 $ 120,462 50,000 $ 33,645 $ 20,818
Senior Vice President 1996 $ 311,058 $ -0- 90,000 $ 31,049 $ 12,830
--Chili's Grill & Bar 1995 $ 266,249 $ 77,212 30,000 $ 40,397 $ 15,636
Concept President
F. Lane Cardwell, Jr................ 1997 $ 320,000 $ 105,600 3,000 $ 40,374 $ 23,845
Executive Vice 1996 $ 290,385 $ -0- 90,000 $ 46,574 $ 15,007
President--Eatzi's 1995 $ 224,422 $ 81,353 30,000 $ 63,481 $ 19,236
Concept President
Roger F. Thomson.................... 1997 $ 317,231 $ 104,940 50,000 $ 40,374 $ 16,680
Executive Vice 1996 $ 256,827 $ -0- 90,000 $ 31,049 $ 6,641
President, Chief 1995 $ 227,019 $ 82,294 30,000 $ -0- $ 13,024
Administrative Officer,
General Counsel
and Secretary
</TABLE>
- ------------------------
(1) All other compensation represents Company match on deferred compensation.
(2) Ms. Smithart resigned from her position as Executive Vice President and
Chief Financial Officer effective September 1, 1997.
10
<PAGE>
OPTION GRANTS DURING 1997 FISCAL YEAR
The following table contains certain information concerning the grant of
stock options pursuant to the Company's 1992 Incentive Stock Option Plan to the
executive officers named in the above compensation table during the Company's
last fiscal year:
<TABLE>
<CAPTION>
REALIZABLE VALUE OF ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK PRICE
OPTIONS APPRECIATION FOR OPTION
GRANTED TO TERM(1)
OPTIONS EMPLOYEES IN EXERCISE OR EXPIRATION ----------------------------
NAME GRANTED FISCAL YEAR BASE PRICE DATE 5% 10%
- -------------------------------- --------- ------------ ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald A. McDougall............. 200,000 10.85% $ 11.125 2/6/07 $ 1,399,291 $ 3,546,077
Debra L. Smithart............... 50,000 2.71% $ 11.125 2/6/07 $ 349,823 $ 886,519
Douglas H. Brooks............... 50,000 2.71% $ 11.125 2/6/07 $ 349,823 $ 886,519
F. Lane Cardwell, Jr............ 3,000 0.16% $ 11.125 2/6/07 $ 20,989 $ 53,191
Roger F. Thomson................ 50,000 2.71% $ 11.125 2/6/07 $ 349,823 $ 886,519
</TABLE>
- ------------------------
(1) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and,
therefore, are not intended to forecast possible future appreciation, if
any, of the Company's stock price.
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUE TABLE
The following table shows stock option exercises by the named officers
during the last fiscal year, including the aggregate value of gains on the date
of exercise. In addition, this table includes the number of shares covered by
both exercisable and non-exercisable stock options at fiscal year-end. Also
reported are the values for "in-the-money" options which represent the position
spread between the exercise price of any such existing options and the $14.00
fiscal year-end price of the Company's Common Stock.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED ON VALUE -------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------- ----------- --------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald A. McDougall.............. -0- -0- 658,750 731,250 $ 396,653 $ 1,075,000
Debra L. Smithart................ -0- -0- 166,341 177,500 $ 15,838 $ 263,750
Douglas H. Brooks................ 5,700 $ 78,643 419,278 173,750 $ 2,673,559 $ 263,750
F. Lane Cardwell, Jr............. -0- -0- 208,500 130,500 $ 245,005 $ 128,625
Roger F. Thomson................. -0- -0- 105,000 177,500 $ -0- $ 263,750
</TABLE>
LONG-TERM EXECUTIVE PROFIT SHARING PLAN AND AWARDS
Executives of the Company participate in the Long-Term Executive Profit
Sharing Plan. See "Report of the Compensation Committee--Long-Term Incentives"
for more information regarding this plan. The following table represents awards
granted in the last fiscal year under the Long-Term Executive Profit Sharing
Plan.
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK BASED PLANS
NUMBER OF ----------------------
NAME UNITS AWARDED THRESHOLD TARGET MAXIMUM
- ---------------------------------------------------- --------------- --------- ----------- -----------
<S> <C> <C> <C> <C>
(DOLLARS)
Ronald A. McDougall................................. 1,000 $ 66,667 $ 100,000 *
Debra L. Smithart................................... 750 $ 50,000 $ 75,000 *
Douglas H. Brooks................................... 600 $ 40,000 $ 60,000 *
F. Lane Cardwell, Jr................................ 750 $ 50,000 $ 75,000 *
Roger F. Thomson.................................... 750 $ 50,000 $ 75,000 *
</TABLE>
- ------------------------
* There is no maximum future payout under the Long-Term Executive Profit
Sharing Plan.
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION PHILOSOPHY
The executive compensation program is designed as a tool to reinforce the
Company's strategic principles--to be a premier and progressive growth company
with a balanced approach towards people, quality and profitability and to
enhance long-term shareholder value. To this end, the following principles have
guided the development of the executive compensation program:
- Provide competitive levels of compensation to attract and retain the best
qualified executive talent. The Committee strongly believes that the
caliber of the Company's management group makes a significant difference
in the Company's sustained success over the long term.
- Embrace a pay-for-performance philosophy by placing significant amounts of
compensation "at risk"--that is, compensation payouts to executives must
vary according to the overall performance of the Company.
- Directly link executives' interests with those of shareholders by
providing opportunities for long-term incentive compensation based on
changes in shareholder value.
The executive compensation program is intended to appropriately balance the
Company's short-term operating goals with its long-term strategy through a
careful mix of base salary, annual cash incentives and long-term performance
compensation including cash incentives and incentive stock options.
BASE SALARIES
Executives' base salaries and total compensation are targeted to be
competitive at the 75th percentile of the market for positions of similar
responsibility and scope at the Vice President and Senior Vice President levels
and, to reflect the exceptionally high level of executive talent required to
execute the growth plans of the Company, between the 75th and 90th percentile of
the market for the Chief Executive Officer, Executive Vice Presidents, and
Concept Heads. Positioning executives' base salaries at these levels is needed
for attracting, retaining and motivating executives with the essential
qualifications for managing the Company's growth. The Company defines the
relevant labor market for such executive talent through the use of reliable
executive salary surveys that reflect both the chain restaurant industry as well
as a broader cross-section of high growth companies from many industries.
Individual base salary levels are determined by considering each officer's level
of responsibility, performance, experience, and tenure. The overall amount of
base salary increases awarded to executives reflects the financial performance
of the Company, individual performance and potential, and/or changes in an
officer's duties and responsibilities.
ANNUAL INCENTIVES
The Company's Profit Sharing Plan is a non-qualified annual incentive
arrangement in which all Dallas-based corporate employees, including executives,
participate. The program is designed to reflect employees' contribution to the
growth of the Company's common stock value by increasing the earnings of the
Company. The plan reinforces a strong teamwork ethic by making the basis for
payouts to executives the same as for all other Company employees.
At the beginning of a fiscal year, each executive is assigned an Individual
Participation Percentage ("IPP") which is tied to the base salary for such
executive and targets overall total cash compensation for executives between the
75th and 90th percentiles of the market. The IPPs reflect the Committee's desire
that a significant percentage of executives' total compensation be derived from
variable pay programs.
12
<PAGE>
401(k) SAVINGS PLAN AND SAVINGS PLAN II
On January 1, 1993, the Company implemented the 401(k) Savings Plan ("Plan
I") and Savings Plan II ("Plan II"). These Plans are designed to provide the
Company's salaried employees with a tax-deferred long-term savings vehicle. The
Company provides a matching contribution equal to 25% of a participant's
contribution, up to a maximum of 5% of such participant's compensation.
Plan I is a qualified 401(k) plan. Participants in Plan I elect the
percentage of pay they wish to contribute as well as the investment alternatives
in which their contributions are to be invested. The Company's matching
contribution for all Plan I participants is made in Company common stock. All
participants in Plan I are considered non-highly compensated employees as
defined by the Internal Revenue Service. Participants' contributions vest
immediately while Company contributions vest 25% annually, beginning in the
participant's second year of eligibility since Plan I inception.
Plan II is a non-qualified deferred compensation plan. Plan II participants
elect the percentage of pay they wish to defer into their Plan II account. They
also elect the percentage of their deferral account to be allocated among
various investment options. The Company's matching contribution for all
non-officer Plan II participants is made in Company common stock, with corporate
officers receiving a Company match in cash. Participants in Plan II are
considered highly compensated employees according to the Internal Revenue
Service. A participant's contributions vest immediately while Company
contributions vest 25% annually, beginning in the participant's second year of
eligibility since Plan II inception.
LONG-TERM INCENTIVES
All salaried employees of the Company, including executives, are eligible
for annual grants of tax-qualified stock options. By tying a significant portion
of executives' total opportunity for financial gain to increases in shareholder
wealth as reflected by the market price of the Company's common stock,
executives' interests are closely aligned with shareholders' long-term
interests. In addition, because the Company does not maintain any qualified
retirement programs for executives, the stock option plan is intended to provide
executives with opportunities to accumulate wealth for later retirement.
Stock options are rights to purchase shares of the Company's Common Stock at
the fair market value on the date of grant. Grantees do not receive a benefit
from stock options unless and until the market price of the Company's common
stock increases. Fifty percent (50%) of a stock option grant becomes exercisable
two years after the grant date; the remaining 50% of a grant becomes exercisable
three years after the grant date.
The number of stock options granted to an executive is based on grant
guidelines that reflect an officer's position within the Company. The
Compensation Committee reviews and approves grant amounts for executives.
Executives also participate in the Long-Term Executive Profit Sharing Plan,
a non-qualified long-term performance cash plan. This plan provides an
additional mechanism for focusing executives on the sustained improvement in
operating results over the long term. This is a performance-related plan using
overlapping three-year cycles paid annually. Performance units (valued at $100
each) are granted to individuals and paid in cash based upon the Company's
attainment of predetermined performance objectives. Long-term operating results
are measured by evaluating both pre-tax net income (weighted 70%) and changes in
shareholders' equity (weighted 30%) over three-year cycles. The Long-Term
Executive Profit Sharing Plan has been replaced by the Long-Term Performance
Share Plan commencing with the cycle which includes fiscal years 1998, 1999, and
2000. The Long-Term Performance Share Plan is based on the Company's total
shareholder return in comparison to the S&P 500 Index and the S&P Restaurant
Industry Index. For executives to receive the target
13
<PAGE>
payout, the Company must perform at the 75th percentile of each index over the
three-year cycle and must average at least 90% of its planned annual profit
before taxes over the same three-year cycle.
PAY/PERFORMANCE NEXUS
The Company's executive compensation program has resulted in a direct
relationship between the compensation paid to executive officers and the
Company's performance. See "Five-Year Total Shareholder Return Comparison"
below.
CEO COMPENSATION
The Compensation Committee made decisions regarding Mr. McDougall's
compensation package according to the guidelines discussed in the preceding
sections. Mr. McDougall was awarded a salary increase in the amount of 3%,
effective June 26, 1997, to recognize his vast experience in the restaurant
industry, the Company's performance under his leadership and his significant
contributions to the Company's continued success. Mr. McDougall was granted
1,000 units under the Long-Term Executive Profit Sharing Plan for the cycle
which includes fiscal years 1997, 1998, and 1999. Mr. McDougall was also awarded
200,000 stock options under the Company's stock option plan. Approximately 30.1%
of Mr. McDougall's compensation for 1997 was incentive pay pursuant to the
Company's Profit Sharing Plan. Like all Company executives, Mr. McDougall's
compensation is significantly affected by the Company's performance. In the 1997
fiscal year, Mr. McDougall's total compensation increased 58.1% from its level
in the 1996 fiscal year.
FEDERAL INCOME TAX CONSIDERATIONS
The Compensation Committee has considered the impact of Section 162(m) of
the Internal Revenue Code adopted under the Omnibus Budget Reconciliation Act of
1993. This section disallows a tax deduction for any publicly-held corporation
for individual compensation to certain executives of such corporation exceeding
$1,000,000 in any taxable year, unless compensation is performance-based. It is
the intent of the Company and the Compensation Committee to qualify to the
maximum extent possible its executives' compensation for deductibility under
applicable tax laws. The Compensation Committee believes that the Company's
compensation programs provide the necessary incentives and flexibility to
promote the Company's performance-based compensation philosophy while being
consistent with Company objectives.
The Compensation Committee's administration of the executive compensation
program is in accordance with the principles outlined at the beginning of this
report. The Company's financial performance supports the compensation practices
employed during the past year.
Respectfully submitted,
COMPENSATION COMMITTEE
J.M. HAGGAR, JR.
JAMES E. OESTERREICHER
ROGER T. STAUBACH
14
<PAGE>
FIVE-YEAR TOTAL SHAREHOLDER RETURN COMPARISON
The following is a line graph presentation comparing cumulative, five-year
total shareholder returns on an indexed basis with the S&P 500 Index and the S&P
Restaurant Industry Index. A list of the indexed returns follows the graph.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BRINKER INTERNATIONAL S&P 500 S&P RESTAURANTS
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 155.68 113.63 108.54
1994 143.18 115.23 125.59
1995 117.61 145.27 165.17
1996 102.27 183.04 194.35
1997 97.16 246.32 203.25
</TABLE>
The graph assumes a $100 initial investment and the reinvestment of
dividends. The Common Stock prices shown are neither indicative nor
determinative of future performance.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Brinker International.............................. 100.00 155.68 143.18 117.61 102.27 97.16
S&P 500............................................ 100.00 113.63 115.23 145.27 183.04 246.32
S&P Restaurants.................................... 100.00 108.54 125.59 165.17 194.35 203.25
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors and
executive officers, and persons who own more than ten percent of the Company's
Common Stock are required to report their initial ownership of the Company's
Common Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates have been established for these reports
and the Company is required to disclose in this proxy statement, any failure to
file by these dates. Through an inadvertent omission, there was one late filing
representing one transaction by each of Messrs. Haggar, Kirk and Marcus relating
to the acquisition of stock options during the 1997 fiscal year. Except as set
forth herein, the Company believes that all filing requirements were satisfied.
In making these disclosures and filing of the reports, the Company has relied
solely on written representations from certain reporting persons.
15
<PAGE>
CERTAIN TRANSACTIONS
The policy of the Company is, to the extent practicable, to avoid
transactions (except those which are employment related) with officers,
directors, and affiliates. In any event, any such transactions will be entered
into on terms no less favorable to the Company than could be obtained from third
parties, and such transactions will be approved by a majority of the
disinterested directors of the Company. Except for the transactions described
below, there were no transactions required to be reported in the last fiscal
year.
On June 28, 1995, Mr. Norman Brinker contractually agreed to remain as
Chairman of the Board (subject to annual reelection by the shareholders) through
the 2001 fiscal year. Under this agreement, Mr. Brinker's compensation will not
materially differ from his compensation on June 28, 1995. However, Mr. Brinker's
total base compensation and profit sharing distributions in the 1998 through
2001 fiscal years will not exceed $1,000,000 per year. Upon Mr. Brinker's death,
retirement or termination for cause, no further payment shall be made pursuant
to this agreement.
Upon the expiration of the agreement described above, Mr. Brinker will
remain a consultant to the Company through the 2021 fiscal year. Mr. Brinker
will be compensated commensurate with his continuing contributions to the
Company; however, during this time, he will no longer participate in any of the
Company's profit sharing plans or benefit programs. Upon Mr. Brinker's death,
retirement or termination for cause, no further payment shall be made pursuant
to the consulting agreement.
The Company also entered into an agreement with Mr. Brinker whereby Mr.
Brinker conveyed to the Company his likeness, biography, photo, voice and name
to be used by the Company in all media, promotions, advertising, training, and
other materials as the Company deems appropriate. He will receive as
compensation $400,000 per year until the earlier of July 1, 2021 or his death.
The Company owns an office building and an adjacent office complex
containing three buildings in order to allow for the expansion of its corporate
headquarters. A company controlled by Roger T. Staubach is a tenant in this
office complex and paid approximately $410,000 in rent to the Company during the
1997 fiscal year pursuant to a lease entered into with an unrelated party prior
to the acquisition of the office complex by the Company.
APPROVAL OF LONG-TERM PERFORMANCE SHARE PLAN
The Company adopted the Long-Term Performance Share Plan effective June 26,
1997, the beginning of the current fiscal year (the "Long-Term Plan"). The
Long-Term Plan is a non-qualified annual long-term performance cash plan in
which all officers of the Company participate. The Long-Term Plan provides an
additional mechanism for focusing executives on total shareholder return over
the long term. Under Section 162(m) of the Internal Revenue Code, a limitation
was placed on tax deductions of any publicly-held corporation for individual
compensation to certain executives of such corporation exceeding $1 million in
any taxable year, excluding certain forms of compensation including
performance-based compensation. In order that the Company might continue to
provide incentive compensation to its executive officers, and continue to
receive a federal income tax deduction for the payment of such compensation, the
Long-Term Plan has been designed in a manner intended to meet the
performance-based compensation exception to the limitation on deductions. The
Long-Term Plan has been adopted by and will be administered by the Compensation
Committee of the Board of Directors.
At the Annual Meeting, the shareholders of the Company are being asked to
approve the adoption of the Long-Term Plan by the Compensation Committee of the
Board of Directors.
16
<PAGE>
SUMMARY OF THE LONG-TERM PLAN
The Long-Term Plan is a performance-related plan using overlapping 3-year
cycles paid annually. Performance units (valued at $100 each) are granted to
officers of the Company and paid in cash based upon the Company's attainment of
pre-established performance objectives. The number of performance units assigned
to an officer is determined by the Compensation Committee after receipt of
recommendations from the Chief Executive Officer.
Long-term operating results are measured by evaluating the Company's total
shareholder return in comparison to both the S&P 500 Index and the S&P
Restaurant Industry Index (collectively, the "Indices") over a 3-year cycle. For
an executive to receive the target payout under the Long-Term Plan, the Company
must perform at the 75th percentile of each of the S&P 500 Index and the S&P
Restaurant Industry Index over a 3-year period. In addition, there will be no
payout unless the Company achieves at least an average of 90% of the planned
annual profit before taxes as approved by the Board of Directors during the same
3-year period. The Company's total shareholder return will be compared against
each of the stated Indices. As each of the Indices will be weighted equally, the
results will be added together for the valuation of the performance units at the
end of the 3-year period. For each 1 percentage point difference between the
Company's total shareholder return as compared to the combined weighted return
of the Indices over the 3-year period, there will be a comparable increase or
decrease in the value of the performance units. The value of the units is then
multiplied by the number of performance units awarded to an officer for the
period to determine the cash payment to be made to such officer.
The current Long-Term Executive Profit Sharing Plan (the "Current Plan") is
based on both pre-tax net income and changes in shareholders' equity over a
3-year cycle. In replacing the Current Plan with the Long-Term Plan, the
Compensation Committee intended to more closely align the interests of its
officers with those of its shareholders. By eliminating pre-tax net income as a
factor in determining payments to officers and replacing it with a comparison of
the Company's performance against the Indices, the officers of the Company will
not be rewarded unless the shareholders of the Company are rewarded with a high
shareholder return. In addition, by eliminating an annual calculation and
replacing it with an evaluation of the Company's performance over a 3-year
cycle, the maximization of long-term shareholder wealth becomes of paramount
importance to officers of the Company and they will be correspondingly rewarded
for the achievement of this objective.
REQUIRED VOTE
A favorable vote of the holders of a majority of the shares of Common Stock
present and entitled to vote at the Annual Meeting in person or by proxy is
required to ratify adoption of the Long-Term Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THIS
PROPOSAL TO APPROVE THE ADOPTION OF THE LONG-TERM PLAN.
SHAREHOLDERS' PROPOSALS
Any proposals that shareholders of the Company desire to have presented at
the 1998 annual meeting of shareholders must be received by the Company at its
principal executive offices no later than May 26, 1998.
INDEPENDENT AUDITORS
Representatives of KPMG Peat Marwick LLP, independent certified public
accountants and auditors of the Company's financial statements, are expected to
be present at the meeting with the
17
<PAGE>
opportunity to make a statement if they so desire and to be available to respond
to appropriate questions.
MISCELLANEOUS
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expense of preparing, printing and mailing the
form of proxy and the material used in the solicitation thereof will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by directors, officers, and employees
of the Company. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and the
Company may reimburse them for reasonable out-of-pocket expenses incurred by
them in connection therewith.
The Annual Report to Shareholders of the Company, including financial
statements for the fiscal year ended June 25, 1997, accompanying this Proxy
Statement is not deemed to be a part of the Proxy Statement.
By Order of the Board of Directors,
ROGER F. THOMSON
SECRETARY
Dallas, Texas
September 23, 1997
18
<PAGE>
BRINKER INTERNATIONAL, INC.
PROXY
The undersigned hereby (a) acknowledges receipt of the Notice of Annual
Meeting of Shareholders of Brinker International, Inc. (the "Company") to be
held at the General Cinema NorthPark Theater I & II, 1100 NorthPark Center,
Dallas, Texas, on Thursday, November 6, 1997 at 10:00 a.m., local time, and
the Proxy Statement in connection therewith, and (b) appoints Norman E.
Brinker and Ronald A. McDougall, and each of them, his proxies with full
power of substitution and revocation, for and in the name, place and stead of
the undersigned, to vote upon and act with respect to all of the shares of
Common Stock of the Company standing in the name of the undersigned or with
respect to which the undersigned is entitled to vote and act at said meeting
or at any adjournment thereof, and the undersigned directs that his proxy be
voted as shown on the reverse side hereof.
If more than one of the proxies listed on the reverse side shall be
present in person or by substitute at the meeting or any adjournment thereof,
all of said proxies so present and voting, either in person or by substitute,
shall exercise all of the powers hereby given.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED AS FOLLOWS: FOR ALL NOMINEES
FOR DIRECTOR NAMED; AND FOR THE PROPOSAL TO APPROVE THE COMPANY'S LONG-TERM
PERFORMANCE SHARE PLAN.
The undersigned hereby revokes any proxy or proxies heretofore given to
vote upon or act with respect to such stock and hereby ratifies and confirms
all that said proxies, their substitutes, or any of them, may lawfully do by
virtue hereof.
(CONTINUED ON REVERSE SIDE)
FOLD AND DETACH HERE
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
/X/
(a) ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
/ / / /
NOMINEES: Norman E. Brinker, Ronald A. McDougall, Gerard V. Centioli,
Daniel W. Cook, III, Rae F. Evans, J.M. Haggar, Jr., Dr. Frederick S. Humphries,
Ronald Kirk, Jeffrey A. Marcus, James E. Oesterrsicher and Roger T. Staubach.
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominees's name in the space below.
_____________________________________________________________________________
(b) PROPOSAL TO APPROVE THE COMPANY'S LONG-TERM PERFORMANCE SHARE PLAN.
FOR AGAINST ABSTAIN
/ / / / / /
(c) IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTER THAT MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
FOR AGAINST ABSTAIN
/ / / / / /
Signature ___________________ Signature ____________________ Date ____________
Please date this proxy and sign your name exactly as it appears hereon. Where
there is more than one owner, each should sign. When signing as an attorney,
administrator, executor, guardian, or trustee, please add your title as such.
If executed by a corporation, the proxy should be signed by a duly
authorized officer. Please sign this proxy and return it promptly whether
or not you expect to attend the meeting. You may nevertheless vote in person
if you do attend.
FOLD AND DETACH HERE
