UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Brinker International, Inc.

(Name of registrant as specified in its charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):

BRINKER

INTERNATIONAL_^®

B R I N K E R

INTERNATIONAL_^®

3000 Olympus Blvd.

Dallas, Texas 75019

(972) 980-9917

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held November 20, 2019

October 4, 2019

Dear Shareholder:

We invite you to attend the annual meeting of shareholders (“Annual Meeting”) of Brinker International, Inc. (sometimes referred to here as “Brinker,” “we,” “us,” “our,” or the “Company”) to be held at 9:00 a.m. (CST), on Wednesday, November 20, 2019, at Brinker’s principal executive office located at 3000 Olympus Blvd., Dallas, Texas 75019. At the Annual Meeting, we will: (1) elect nine (9) directors for one-year terms; (2) vote on the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal 2020 year; (3) cast an advisory vote to approve executive compensation; and (4) conduct any other business properly brought before the meeting.

Your Board of Directors chose September 23, 2019 as the date used to determine the shareholders who will be able to attend and vote at the Annual Meeting. If you owned shares in Brinker at the close of business on that day, you are invited to attend the Annual Meeting. Seating at the meeting will be limited to our shareholders, proxy holders and our invited guests. If you own shares in your name, please bring photo identification to the meeting. If you hold your shares through a bank, broker, or other third party, please bring photo identification and a current statement from that party showing your ownership. Please note that cameras, recording equipment, and other electronic devices will not be permitted at the meeting.

Your vote is important. Whether or not you plan to be present at the meeting, please take time to vote. If you decide not to attend the Annual Meeting, you may vote on these proposals by proxy. To do so, please cast your vote as instructed in the Notice of Internet Availability of Proxy Materials you received online or by telephone after your review of the proxy materials at www.proxypush.com/EAT (by using your 12-digit control number on the Notice of Internet Availability of Proxy Materials to access the website) or, upon your request, after receipt of hard copies of proxy materials. We ask that you cast your vote as promptly as possible. You may also request a paper copy of the proxy card to submit your vote if you prefer. We encourage you to vote online. It is convenient and saves postage and processing costs. If you vote online, by mail, or by telephone and later decide to attend the Annual Meeting, you may come to the meeting and vote in person.

This Notice, the Notice of Internet Availability of Proxy Materials, the Proxy Statement, and the 2019 Annual Report are first being made available to shareholders on October 4, 2019.

We look forward to seeing you at the meeting.

Very truly yours,

Wyman T. Roberts

President and Chief Executive Officer and

President of Chili’s Grill & Bar

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 20, 2019

Brinker’s Proxy Statement and 2019 Annual Report for the year ended June 26, 2019

are available at www.proxypush.com/EAT

BRINKER INTERNATIONAL, INC.

INDEX

PROXY SUMMARY

This summary highlights selected information that is provided in more detail throughout this Proxy Statement. This summary does not contain all of the information you should consider before voting. Please read the entire Proxy Statement before casting your vote.

ANNUAL MEETING INFORMATION

				Wednesday, November 20, 2019 9:00 AM CST
				Brinker International, Inc. Principal Executive Office 3000 Olympus Blvd. Dallas, Texas 75019

SHAREHOLDERS ACTION

VOTING YOUR SHARES

Your vote is important. Whether you plan to attend the Annual Meeting or not, we encourage you to follow the instructions on the Notice of Internet Availability of Proxy Materials. You may vote:

Online Visit www.proxypush.com/EAT, and enter your 12-digit control number needed to access the site (you may find this number on your Notice of Internet Availability of Proxy Materials)

By Mail Request, complete and mail a paper proxy card, as outlined in the Notice of Internet Availability of Proxy Materials

By Phone Call phone number located on proxy card

In Person Attend Annual Meeting and vote by ballot

If you submit your proxy by telephone or online, you do not need to return your proxy card by mail.

ANNUAL MEETING ADMISSION

INFORMATION ABOUT THE BOARD OF DIRECTORS

Committees of the Board of Directors

The Board of Directors has the following standing committees and current committee composition:

C—Committee Chair

M—Member

Board Skills and Diversity

PROPOSAL 1

ELECTION OF DIRECTORS

The Board of Directors recommends that you vote FOR the election of all of the nominees named below. Each person nominated for election has agreed to serve if elected, and we have no reason to believe that any nominee will be unavailable to serve. However, if any nominee becomes unable or unwilling to serve as a nominee at the time of the Annual Meeting, the individuals named as proxies may vote for a substitute nominee selected by the Board of Directors. Alternatively, the Board of Directors may reduce the size of the Board of Directors, or the proxies may vote just for the remaining nominees, leaving a vacancy that the Board of Directors may fill at a later date. All nominees are currently serving as directors of the Company and all except Ms. Davis and Messrs. Chidsey and Ranade were elected by the shareholders at the 2018 annual meeting of shareholders. Ms. Davis and Messrs. Chidsey and Ranade were duly appointed by the Board of Directors during fiscal 2019 after being recommended by the Governance and Nominating Committee for appointment to serve on the Company’s Board of Directors following the process outlined in the section titled Internal Process of Identifying Candidates in this Proxy Statement, which included recommendations for appointment by a third-party search firm. After more than six years of service on the Board, Mr. George has decided not to stand for re-election due to other commitments. The Board thanks him for his many contributions to the Company.

Information About Nominees

We are furnishing below certain biographical information about each of the nine nominees for director. Also included is a description of the experience, qualifications, attributes and skills of each nominee:

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR.

PROPOSAL 2

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors appointed KPMG LLP as our independent registered public accounting firm for fiscal 2020. Although we are not required to submit this matter to you, the Board of Directors believes that it is good corporate governance to do so. This proposal asks you to ratify this selection. If the appointment of KPMG LLP is not ratified, the Audit Committee will reconsider the appointment. Representatives of KPMG LLP are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they so desire and they will be available to respond to appropriate questions that you may have.

Audit Fees

The following table sets forth the aggregate fees billed, or estimated to be billed, to us for the fiscal years ended June 26, 2019 and June 27, 2018 by our independent registered public accounting firm, KPMG LLP:

For fiscal 2018, annual audit fees related to professional services rendered for the audit of our annual consolidated financial statements, reviews of our quarterly consolidated financial statements, and the audit of internal control over financial reporting ($1,169,300) and the issuance of a consent for franchise disclosure documents ($5,500).

For fiscal 2018, audit-related fees related to consultations on new accounting standards and the evaluation of technical accounting treatment of certain transactions.

For fiscal 2018, all tax fees were for review of income tax returns, sales tax returns and consultations regarding federal, state, local and international tax matters.

For fiscal 2018, there were no other fees.

The Audit Committee has established policies and procedures for the approval and pre-approval of audit services and permitted non-audit services. The Audit Committee has the responsibility to do the following:

All of the fees for fiscal 2018 and 2019 were pre-approved by the Audit Committee or were within pre-approved guidelines for permitted non-audit services and fees established by the Audit Committee. For fiscal year 2019, the Audit Committee set a pre-approved maximum total fee expenditure for unscheduled, on-going audit and tax services with KPMG LLP of $100,000. In addition, if the fee for a particular item exceeded $40,000, Audit Committee approval was required.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2020.

PROPOSAL 3

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

As required by Section 14A of the Securities Exchange Act of 1934, as amended (“the Exchange Act”), we are asking you to cast an advisory, non-binding vote to approve the compensation awarded or paid to our named executive officers as we have described it in the Executive Compensation section of this Proxy Statement.

As described in detail in the Compensation Discussion and Analysis section, the Compensation Committee (the “Committee”) oversees our compensation program and the compensation awarded to our executive officers; adopts changes to the program; and awards compensation as appropriate to reflect the Company’s circumstances and to promote the main objectives of the program. These objectives include:

We are asking you to indicate your support for our named executive officer compensation as described in this Proxy Statement. We believe that the information we have provided in this Proxy Statement demonstrates that our compensation program is designed appropriately and works to ensure that the interests of our executive officers, including our named executive officers, are aligned with your interest in long-term value creation.

Accordingly, we ask you to approve the following resolution at the Annual Meeting:

RESOLVED, that the shareholders of the Company approve the compensation awarded to the Company’s named executive officers, as disclosed, pursuant to U.S. Securities and Exchange Commission (“SEC”) rules, in the Compensation Discussion and Analysis section, the accompanying compensation tables and related narrative in this Proxy Statement for the Company’s 2019 Annual Meeting.

This advisory resolution is non-binding on the Board of Directors. Although non-binding, the Board and the Committee will review the voting results and consider your concerns in their continued evaluation of the Company’s compensation program. Because this vote is advisory in nature, it will not affect any compensation already paid or awarded to any named executive officer; it will not be binding on or overrule any decisions made by the Board of Directors or Committee; and it will not restrict or limit the ability of the shareholders to make proposals for inclusion in proxy materials related to executive compensation. The Board of Directors has adopted a policy of providing for annual advisory votes to approve executive compensation. Unless the Board of Directors modifies its policy, the next such advisory vote will occur at the Company’s 2020 annual meeting of shareholders.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION.

INFORMATION ABOUT THE BOARD OF DIRECTORS AND

GOVERNANCE OF THE COMPANY

Qualifications to Serve as Director

Each candidate for director must possess at least the following specific minimum qualifications:

1. Each candidate shall be prepared to represent the best interests of all the Company’s shareholders and not just one particular constituency.

2. Each candidate shall have demonstrated integrity and ethics in both personal and professional settings and have established a record of professional accomplishment in their chosen field.

3. No candidate shall have any material personal, financial or professional interest in any present or potential competitor of the Company.

4. Each candidate shall be prepared to participate fully in activities of the Board of Directors, including active membership on at least one Committee of the Board of Directors and attendance at, and active participation in, meetings of the Board of Directors and the Committee(s) of the Board of Directors of which he or she is a member, and not have other personal or professional commitments that would, in the Governance and Nominating Committee’s sole judgment, interfere with or limit their ability to do so.

5. In addition, the Governance and Nominating Committee also desires that candidates possess the following qualities or skills:

(a) Each candidate shall contribute to the overall diversity of the Board of Directors—diversity being broadly construed to mean a variety of opinions, perspectives, personal and professional experiences and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics.

(b) Each candidate should contribute positively to the existing chemistry and collaborative culture among the members of the Board of Directors.

(c) Each candidate should possess professional and personal experiences and expertise relevant to the Company’s business. Relevant experiences may include, among other things, large company CEO experience, senior level multi-unit restaurant or retail experience, and relevant senior level experience in one or more of the following areas: finance, accounting, sales and marketing, organizational development, strategic planning, information technology and public relations.

Although not an automatic disqualifying factor, the inability of a candidate to meet the independence and other governing standards of the NYSE or the SEC will be a significant factor in any assessment of a candidate’s suitability.

Current Nominations

The Governance and Nominating Committee conducted an evaluation and assessment of all of the current directors, for purposes of determining whether to recommend them for nomination for re-election to the Board of Directors. After reviewing the assessment results, the Governance and Nominating Committee recommended to the Board that Messrs. Chidsey, DePinto, George, Giles, Katzman, Mrkonic, Ranade and Roberts and Mms. Davis and Edelman be nominated for election to the Board of Directors. The Board accepted the recommendations and nominated such persons. Mr. George subsequently decided not to stand for re-election. The Governance and Nominating Committee did not receive any recommendations from shareholders of candidates for election to the Board at the Annual Meeting.

Director Independence

The Board reviews the independence of each non-employee director annually to confirm that the director continues to meet our standards, as well as the applicable requirements of the New York Stock Exchange (“NYSE”) and rules of the SEC. No member of the Board will be considered independent unless the Board determines that he or she has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The Board will not determine any director to be independent if he or she has or has had any of the relationships set forth in the NYSE rules during the time periods specified in such rules. The Board will describe in this Proxy Statement the basis for determining whether any relationship is immaterial.

The Board of Directors has affirmatively determined each of the following directors is an “independent” director as such term is defined in our Corporate Governance Guidelines and the requirements of the SEC and NYSE.

The Board previously determined each of the former directors Elaine L. Boltz, Gerardo I. Lopez and Jose Luis Prado and retiring director, Michael George, were independent in connection with the 2018 annual meeting of shareholders.

The only member of the Board who is not independent is Wyman T. Roberts. Mr. Roberts, as President and Chief Executive Officer (“CEO”) of the Company, is the only employee member of the Board. The Board has further determined that no material relationship exists between the Company and each non-employee director outside of their service as a member of the Board of Directors. In this Proxy Statement we may refer to these directors individually as an “Independent Director” and collectively as the “Independent Directors.”

Board Structure

Each director serves for a one-year term and is subject to re-election by you each year. Prior to recommending a director for nomination for re-election, the Governance and Nominating Committee considers many things, including:

Board Committees

The charters for each of the committees, as well as our Corporate Governance Guidelines, are available at no charge to you in the Corporate Governance section of our website (http://investors.brinker.com/corporate-governance/highlights) or by written request directed to us at 3000 Olympus Blvd., Dallas, Texas 75019, Attention: Corporate Secretary.

The Board of Directors has affirmatively determined that each member of the Audit, Compensation, and Governance and Nominating Committees meets the independence requirements of the NYSE and the SEC applicable to those committees.

Audit Committee

The role of the Audit Committee is described in the Report of the Audit Committee later in this Proxy Statement. The Board of Directors has determined that Mr. Giles and Mr. Chidsey are each an “audit committee financial expert” as such term is defined in the SEC’s Regulation S-K. Further, the Board of Directors has determined the members of the Audit Committee are “financially literate” as such term is defined by the NYSE and the Audit Committee satisfies the “financial management expertise” standard required by the NYSE.

Compensation Committee

A discussion of the specific nature of the Compensation Committee’s responsibilities and compensation philosophy as they relate to our executive officers is provided to you in the Compensation Discussion and Analysis and Report of the Compensation Committee later in this Proxy Statement.

Governance and Nominating Committee

The Governance and Nominating Committee performs the following functions:

On the basis of this year’s review, the Governance and Nominating Committee delivered a report to the full Board of Directors, and the Board made its “independence” and “audit committee financial expert” determinations.

Board Member Meeting Attendance

During the fiscal year ended June 26, 2019, the Board of Directors held seven meetings. Each incumbent director attended at least 75% of the aggregate total of meetings of the Board of Directors and Committees on which he or she served. Also, all members of the Board of Directors serving as of the date of the Company’s 2018 annual meeting of shareholders attended such meeting, except that Mr. DePinto was not able to attend as a result of unusual circumstances. As set forth in our Corporate Governance Guidelines (http://investors.brinker.com/corporate-governance/highlights), directors are expected to attend the Annual Meeting absent unusual circumstances. Such attendance allows for direct interaction between our shareholders and the Board members.

Chairman of the Board

The business and affairs of the Company are managed under the direction of the Board of Directors. Generally, it is management’s responsibility to formalize, propose and implement strategic choices and the Board’s role to approve strategic direction and evaluate strategic results, including both the performance of the Company and the performance of the Chief Executive Officer.

The roles of Chairman of the Board of Directors and CEO for the Company are separated. Mr. DePinto, who is an Independent Director, serves as Chairman of the Board. The Board believes that the current board leadership structure promotes the ability of the Board of Directors to exercise its oversight role over management by having a director who is not an officer or member of management serving in the role of Chairman of the Board, thus ensuring a continued significant role for independent directors in the leadership of the Company. This structure allows Mr. Roberts, as CEO, to focus his time and energy on leading and managing the Company’s business and operations. An independent Chairman of the Board also simplifies the Company’s corporate governance structure by allowing the Chairman of the Board to convene executive sessions with independent directors. The Chairman presides over all executive sessions. Any decision to change the structure in the future will be based on what the Board believes is the most effective and efficient structure for the Company.

The Chairman of the Board’s duties include:

The Board’s Role in Risk Oversight

The Board has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks, including the Company’s enterprise risk management process that monitors and manages key business risks facing the Company. Throughout the fiscal year, the Board regularly reviews information regarding the Company’s strategic, financial and operational risks.

The Compensation Committee oversees the management of risks relating to the Company’s compensation policies and practices.

The Audit Committee oversees the management of risks associated with accounting, auditing, financial reporting, and internal control over financial reporting, as well as the effectiveness of the Company’s enterprise risk management process. The Audit Committee also:

The Governance and Nominating Committee oversees risks associated with the independence of the Board of Directors and the Company’s governance structure. It is also responsible to annually review the Company’s policies and programs relating to social responsibility and environmental sustainability matters, and makes recommendations to management with respect to such matters.

While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed about such risks through updates provided at full Board meetings, attendance at committee meetings, and committee reports.

Directors’ Compensation

The Governance and Nominating Committee annually reviews and periodically benchmarks the Board’s compensation to assure that non-employee directors are being fairly and reasonably compensated in relation to the restaurant industry and to comparable U.S. companies. The public companies in the proxy peer group used for the Board are also used for our named executive officers (“NEOs”) (identified in more detail in the Benchmarking section of the Compensation Discussion and Analysis of this Proxy Statement). For fiscal 2019, non-employee directors of the Company received the following compensation in addition to reimbursement for costs incurred in attending meetings of the Board:

Annual Retainer

An annual retainer of $265,000 was granted in restricted stock units.

An annual retainer of $75,000 was paid or granted in a combination of cash or restricted stock units, as elected by each director.

Annual Grant (all non-employee directors, including Chairman)

Restricted Stock Unit Distribution Timing

Each director, other than the Chairman of the Board, has a choice between cash and restricted stock units for the annual retainer, thus allowing each director to receive compensation in a manner that best fits individual needs. The Chairman of the Board is required to take at least 50% of his annual retainer in restricted stock units. Providing a combination of equity and cash provides incentive for our directors to focus on long-term performance and shareholder value while still recognizing their energy and effort throughout the year.

Equity grants have historically been made on the first business day of the calendar year following the annual shareholders meeting. Directors appointed after this date received a pro-rated grant following their appointment. For fiscal 2019, directors received restricted stock units for all of their equity compensation with variable distribution dates ranging from four years after grant to two years following departure from the Board (as described above). During the May 2, 2019 Board meeting, the decision was made to begin granting director equity awards in quarterly installments beginning with the appointment of Prashant Ranade.

Board Committee Retainers

Committee members receive the following supplementary annual retainer in light of their additional responsibilities:

Additionally, the Committee Chairs received a further supplementary retainer to compensate them for the additional Chair responsibilities as follows:

Directors are expected to attend the Board and their respective Committee meetings. No additional compensation was paid for attendance at these meetings.

The stock ownership guidelines applicable to our Directors are set forth in the Stock Ownership Guidelines table of this Proxy Statement.

Fiscal 2019 Director Compensation Table

The grant date fair value of the restricted stock units granted to the directors is determined pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”) and does not include any reduction in value for the possibility of forfeiture. For restricted stock units, dividends are accumulated and paid upon distribution.

Board Assessments

Our Board conducts an annual evaluation of itself and its committees to determine the Board’s effectiveness and to identify ways in which to enhance effectiveness. Additionally, the Board conducts periodic evaluations of each of its members. The Board utilizes the feedback and results from these

evaluations to determine the need for board refreshment, and the Governance and Nominating Committee utilizes the evaluation process as part of its determination of nominees recommended for election by shareholders at our Annual Meeting.

Internal Process of Identifying Candidates

The Governance and Nominating Committee uses a variety of means for identifying potential nominees for director, including the use of outside search firms and recommendations from current members of the Board of Directors and shareholders. In determining whether to nominate a candidate, the Governance and Nominating Committee considers the current composition and capabilities of serving directors, as well as additional capabilities considered necessary or desirable in light of existing and future Company needs. One or more of the members of the Governance and Nominating Committee interviews, and may have an outside search firm interview, a prospective candidate who is identified as having high potential to satisfy the expectations, requirements, qualities and responsibilities for membership on the Board of Directors. Prospective candidates may also be interviewed by other directors who are not members of the Governance and Nominating Committee. Reports from those interviews or from Governance and Nominating Committee members with personal knowledge and experience with the candidate, résumés, information provided by other contacts, and other information deemed relevant by the Governance and Nominating Committee are then considered in determining whether a candidate shall be nominated. The Governance and Nominating Committee also exercises its independent business judgment and discretion in evaluating the suitability of a candidate for nomination.

Nominations By Shareholders

As a shareholder, you may recommend one or more candidates to be considered by the Governance and Nominating Committee as a nominee or nominees for election as director of the Company at an annual meeting of shareholders. To do so, you must comply with the notice, information, and consent provisions contained in the Company’s Bylaws (current copies of the Company’s Bylaws are available at no charge from the Secretary of the Company and may also be found in our public filings with the SEC). In order for the candidate recommendation to be timely for the Company’s 2020 annual meeting of shareholders, your notice to the Secretary of the Company must be delivered or mailed to and received at our principal executive office no later than June 6, 2020. Any such recommendations received by the Secretary will be presented to the Governance and Nominating Committee for consideration. Suitable candidates (whether identified internally or by a shareholder) who, after evaluation based upon the criteria and process described in “Internal Process of Identifying Candidates” above, are then recommended by the Governance and Nominating Committee and, if approved by the Board of Directors, will be included in our recommended slate of director nominees in our Proxy Statement.

Code of Conduct

Our Brinker International Code of Conduct—Making People Feel Special applies to all our team members. We also have a Code of Conduct for the Board of Directors. Both of these codes are reviewed by the Governance and Nominating Committee annually and revised as appropriate. You may obtain a copy of either Code free of charge in the Corporate Governance section of our website (http://investors.brinker.com/corporate-governance/highlights) or by written request directed to us at 3000 Olympus Blvd., Dallas, Texas 75019, Attention: General Counsel.

Communications with the Board of Directors

If you or any other interested party wishes to communicate with the Board of Directors as a group or with an individual director, you or the interested party may direct such communications to the intended recipient in care of the General Counsel, 3000 Olympus Blvd., Dallas, Texas 75019. The communication must be clearly addressed to the specific group or director. Your Board of Directors has instructed the General Counsel to review and forward any such correspondence to the appropriate person or persons for response.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

Our compensation programs are structured to reinforce our strategies and company culture—to be a premier and progressive company with a balanced approach towards growing sales, increasing profits, bringing back guests and engaging team members. Our strategies and culture are intended to differentiate our brands from the competition, reduce the costs associated with managing our restaurants and establish a strong presence for our brands in key markets around the world.

Our fiscal 2019 compensation programs were designed to grow sales and profits while improving the guest experience. Our annual bonus program for the CEO, CFO, Chief Concept Officer (“CCO”) and Chief Administrative Officer (“CAO”) (the “Brinker Profit Sharing Plan”) provided incentives based on adjusted net income (“Adjusted Net Income”), comparable same-restaurant sales (“Comp Sales”) and guest feedback scores on food quality at Chili’s Grill & Bar (“Food Great”). Equity awards granted under our performance share plan for these same NEOs (the “Brinker Performance Share Plan”) are earned based on our compound annual growth rate (“CAGR”) in adjusted earnings per share (“EPS”). For the President of Maggiano’s, our annual bonus program (the “Maggiano’s Profit Sharing Plan”) provided incentives based on Maggiano’s adjusted profit before taxes (“Maggiano’s PBT”), Maggiano’s Comp Sales and Maggiano’s guest scores. Equity awards granted under our performance share plan for the President of Maggiano’s (the “Maggiano’s Performance Share Plan”) are earned based on Maggiano’s adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Maggiano’s Comp Sales.

During the year, we delivered high-quality, craveable food and drinks at a compelling everyday value while maintaining our focus on our core equities of burgers, ribs, fajitas and margaritas. Our efforts included making our successful 3 for $10 offering a feature of our menu and continuing our $5.00 margarita of the month platform. We also looked to improve our guest experience by emphasizing hospitality, improving systems and standards for consistency across operations, and reimaging more than 200 restaurants. We expanded the Chili’s brand domestically through four new Company-owned restaurants and four new franchise-operated restaurants in strategically desirable markets. We also expanded internationally through our franchise partners opening 18 Chili’s restaurants around the world, including our first restaurant in China. Our first franchised Maggiano’s location also opened at Dallas-Fort Worth International Airport. In the fourth quarter of the year, we partnered with DoorDash to make delivery of Chili’s and Maggiano’s food convenient to our guests from most company-owned restaurants. We remain competitive with our value offerings at both lunch and dinner and are committed to offering consistent, quality products at a compelling every day value. We will continue to seek opportunities to reinforce value, improve the guest experience, leverage our DoorDash partnership, and create interest in our brands with new and varied offerings to further enhance sales and drive incremental traffic.

Our progress this year enabled us to deliver against our goals with actual Adjusted Net Income for the Brinker Profit Sharing Plan of $174.3 million, Food Great scores above target, and Comp Sales achievement above target, resulting in a short-term incentive payout of 158.9% of target to our CEO, CFO, CCO and CAO. The President of Maggiano’s received a short-term incentive payout of 83.8% under the Maggiano’s Profit Sharing Plan.

2019 Compensation Highlights

Following are some of the highlights of our fiscal 2019 executive compensation programs:

Highlights of Our Compensation Programs

Compensation Philosophy

Our compensation programs are structured to reinforce our strategic principles—to be a premier and progressive company with a balanced approach towards growing sales, increasing profits, bringing back guests and engaging team members. Our programs also reflect the competitive environment in which we operate and align with a pay-for-performance philosophy. More specifically we:

Structure and Role of the Compensation Committee

The Committee is comprised entirely of Independent Directors. The Board has also determined that each Committee member meets the qualifications as a “non-employee director” for purposes of Rule 16b-3 of the Exchange Act and as an “outside director” for purposes of Section 162(m) of the Internal Revenue Code. The Committee is responsible for aligning our compensation programs with our compensation philosophy of rewarding performance. Specifically, the Committee reviews and approves any compensation decisions regarding our CEO and, with input from the CEO, the Executive Officers identified in this Proxy Statement (the “Executive Officers”). The CEO does not provide input on his own compensation. Further information about the duties of the Committee can be found in the Compensation Committee Charter, which is located on our website at http://investors.brinker.com/corporate-governance/highlights. To ensure the Committee is able to effectively carry out its responsibilities, it takes the following actions:

Say-on-Pay Feedback from Shareholders

At the annual meeting of shareholders in 2018, we submitted our executive compensation program for an advisory vote to you, our shareholders, and it received the support of over 96% of the total votes cast on the proposal. The Committee reviewed the results of the advisory vote while completing its annual review of each pay element and total compensation packages for our NEOs with respect to next fiscal year. As shareholder support for our current programs was strong, no changes were made based on the results of the advisory vote.

Pay for Performance

The Company’s compensation programs are aligned with our business initiatives and have been designed to pay commensurate with the level of performance generated. This philosophy is most evident in the mix of pay used to compensate our executives.

Our fiscal 2019 compensation packages for our CEO and other NEOs were heavily weighted towards variable compensation. The variable compensation awarded in fiscal 2019 included above target payment of an annual incentive under the Brinker Profit Sharing Plan, a below target payment under the Maggiano’s Profit Sharing Plan, and the economic value of stock options, restricted stock units (“RSUs”), performance RSUs (at target) and special performance-based stock options granted during the year.

As the graphs below show, long term incentives constitute the largest portion of target total direct compensation for our CEO and other NEOs:

Roles of the Compensation Committee, Consultants and Management

The Committee is responsible for determining the compensation of the CEO and Executive Officers. All compensation recommendations are reviewed and approved by the Independent Directors of the full Board. The Committee utilizes three sources during their evaluation process: (1) Pearl Meyer, the Board’s independent consulting firm; (2) Meridian Compensation Partners, LLC (“Meridian”); and (3) management. The Committee annually reviews the performance of it’s consultants. The Committee has also affirmatively determined that Pearl Meyer and Meridian are “independent” and their respective engagements do not raise any conflicts of interest as required by the SEC and NYSE.

Pearl Meyer has been retained by and reports directly to the Committee. Pearl Meyer does not have any other consulting engagements with the Company. The Committee regularly asks Pearl Meyer to provide independent advice on current trends in compensation design, including compensation levels, the merits of particular forms of compensation, relative weighting of compensation elements and compensation best practices.

Meridian is also retained by the Committee and provides detailed benchmarking data based on our benchmarking peer group. Meridian does not have any other consulting engagements with the Company. Meridian generates an independent report that is utilized in determining compensation levels for the CEO and Executive Officers. A more detailed discussion of the benchmarking process is provided in the Benchmarking section below. Based on the benchmark data and individual performance, the CEO provides input and recommendations to the Committee in setting total compensation for the Executive Officers, excluding his own compensation. The Committee considers these data sources and applies its own independent judgment in establishing a total compensation program comprised of base salary, short-term incentives targeted as a percentage of base pay and long-term incentives, which aligns the interests of the executives with those of our shareholders.

Benchmarking

Meridian provides market data regarding base salary, short-term incentive targets, long-term incentive values and total compensation. The benchmarking proxy peer group is carefully selected based on

criteria including restaurant and brand product industries, operating structure, location and size. As of the time this peer group was selected, we were near the median in terms of revenue size as compared to our benchmarking proxy peer group. Proxy data from our benchmarking proxy peer group was blended with data from Meridian’s database, as well as data from other restaurant companies that participate in the Chain Restaurant Total Rewards Association (CRTRA) Compensation Survey, to provide us with benchmark information that we believe accurately reflects the market in which we compete for executive talent. The following table lists the companies used in fiscal 2019 as our benchmarking proxy peer group:

Benchmarking Proxy Peer Group

Meridian’s benchmark information was used to establish ranges for total compensation (base salary + short-term cash incentives + long-term equity incentives). We strive to be competitive in the marketplace by appropriately balancing all elements of compensation (short-term versus long-term and fixed versus variable) while recognizing our performance, as well as the individual’s performance, criticality, experience, and internal equity. There is no fixed percentage which determines the mix between cash and non-cash compensation, but compensation is significantly weighted towards variable compensation (short- and long-term). The table below shows the percentage of fixed versus variable compensation elements for 2019 targeted total compensation.

Targeted Fixed Versus Variable Compensation Mix for the Named Executive Officers for Fiscal 2019

Fiscal 2019 Executive Compensation and Benefit Components

For the fiscal year ended June 26, 2019, the principal components of compensation and benefits for our NEOs were:

In the sections that follow we detail what each element of compensation is intended to reward and how each component of compensation is evaluated. It is important to note that, while each individual component is reviewed, all decisions are made in a total compensation context.

Base Salary

Base salaries provide our executives with a level of certainty about their compensation. Annually, we review base salaries during our benchmarking process. An individual’s base salary is dependent on the size and scope of the position, his or her experience and, most importantly, his or her performance.

For fiscal 2019, our CEO received no increase to his base salary. The CFO, CCO and CAO received a 2.5% merit increase on average, and the President of Maggiano’s starting salary remained unchanged since his hire date in July 2018.

Short-Term Incentives

Our Brinker Profit Sharing Plan is a cash-based annual incentive arrangement in which the CEO, CFO, CCO and CAO participate, together with all restaurant support center team members that do not work for the Maggiano’s brand. Our Maggiano’s Profit Sharing Plan is a cash-based annual incentive arrangement in which the President of Maggiano’s participates, together with restaurant support center team members that work for the Maggiano’s brand. These plans measure both financial performance and achievement of key performance indicators (“KPIs”).

The maximum award that any individual can receive is 200% of his or her individual short-term incentive target, but minimum thresholds must be achieved to earn any payout. The following table details the actual short-term incentive payout for fiscal 2019 versus targets set for the NEOs:

Fiscal 2019 Short-Term Incentive Payout versus Target

Fiscal 2019 Profit Sharing Plans

The CEO, CFO, CCO and CAO participate in the Brinker Profit Sharing Plan, and the President of Maggiano’s participates in the Maggiano’s Profit Sharing Plan. Each plan may be referred to as a “Profit Sharing Plan.”

Financial Measure (2/3 Weighting)

For fiscal 2019, the Committee established Adjusted Net Income and Maggiano’s PBT targets which were consistent with our long-term goal of annual growth. The Company’s income measures are calculated in accordance with generally accepted accounting principles (“GAAP”). Consistent with prior years, and as permitted under the terms of the relevant underlying plan documents, the Committee can make adjustments to the Company’s income measures in order to include or exclude specified items, for example, restructuring and impairment costs, as determined by the Committee in its sole discretion. During fiscal 2019 the Committee excluded from Adjusted Net Income gains from sale-leaseback transactions and sales of assets, in addition to expenses from restaurant impairment charges, remodel-related asset write-offs, and relocation of our principal executive office. For 2019, the actual Adjusted Net Income for the Brinker Profit Sharing Plan was $174.3 million compared to a target Adjusted Net Income for the Brinker Profit Sharing Plan of $161.8 million, resulting in above target (177.7%) achievement under the financial measure for the Brinker Profit Sharing Plan. For 2019, the actual Maggiano’s PBT for the Maggiano’s Profit Sharing Plan was $50.6 million compared to a target Maggiano’s PBT for the Maggiano’s Profit Sharing Plan of $53.4 million, resulting in a below target (74.4%) achievement under the financial measure for the Maggiano’s Profit Sharing Plan.

KPI Measure (1/3 Weighting)

For the Brinker Profit Sharing Plan, the KPI performance portion was based on two equally weighted KPIs: Guest Food Great scores and Comp Sales. The Company utilized the Food Great metric as a KPI due to the focus at Chili’s to improve food experience for guests. The performance goals for Food Great scores and Comp Sales achieved above target performance, which resulted in a 121.3% achievement under the KPI performance portion under the Brinker Profit Sharing Plan. The KPI performance portion for the Maggiano’s Profit Sharing Plan was based on two equally weighted KPIs: Guest Intent to Return scores and Comp Sales at Maggiano’s. The performance goal for Intent To Return scores achieved above target performance while the performance goal for Comp Sales achieved below target performance, resulting in a 102.5% achievement under the KPI performance portion for the Maggiano’s Profit Sharing Plan.

Payout

The resulting payout for NEOs except the President of Maggiano’s was 158.9% of target based upon the goal achievement listed above and calculated as such: (2/3 x 177.7% actual Adjusted Net Income achievement + 1/3 x 121.3% KPI achievement). The resulting payout for the President of Maggiano’s was 83.8% of target based upon the goal achievement listed above and calculated as such: (2/3 x 74.4% actual Maggiano’s PBT achievement + 1/3 x 102.5% KPI achievement).

Long-Term Incentives

For each of our NEOs other than the President of Maggiano’s, we grant a mix of stock options, performance shares and restricted stock units with the belief that meeting our long-term strategic goals will increase our stock price. Target long-term incentive values are determined by the Committee by analyzing benchmark data, performance, program cost and total compensation targets. Once the target value is established, the number of shares granted is based on delivering 50% of the value in

performance shares, 25% of the value in stock options and 25% of the value in restricted stock units. In his role as President of Maggiano’s, Mr. Baltes received 100% of his long-term incentive in the form of performance shares under the Maggiano’s Performance Share Plan, which are described further below. Our equity programs give officers a stake in the potential rewards provided to shareholders as a result of officers’ efforts.

All equity-based awards, including stock options, are generally granted on the last Thursday of each August. The number of shares granted each year fluctuates based on our stock price and other equity unit valuation methods (i.e., Black-Scholes for stock options). However, the grant date may be adjusted if the Committee anticipates the release of material nonpublic information.

Performance Shares

To balance out the volatility of stock options while still aligning participants with shareholder interests, we also grant performance shares. We target a certain value for each performance share grant. The number of performance shares granted is determined by the stock price at the date of grant, and is calculated using the formula of (A) targeted value of performance share grant divided by (B) the stock price at grant.

Performance shares granted in fiscal 2019 for all NEOs other than the President of Maggiano’s will be earned based on our CAGR in Adjusted EPS as compared to a targeted growth of 10.0% over a three-year measurement period. The Company’s Adjusted EPS will be calculated in accordance with the terms of the underlying plan document, which allows the Committee to make adjustments to the Company’s EPS calculated in accordance with GAAP in order to include or exclude specified items, for example, restructuring and impairment charges.

The target award (which is granted near the beginning of the measurement period) is adjusted by the payout percentage which ranges from 0% to 200% (see chart below). To earn 100% of a target award, the Company must achieve 10.0% CAGR in Adjusted EPS over the measurement period. To determine earned shares, the number of performance shares awarded will be multiplied by the distribution percentage corresponding to the Company’s CAGR at the end of the measurement period. The distribution percentage is determined using linear interpolation between 0.1% CAGR up to 20.0% CAGR (Ex. 15.1% CAGR = 151.0% earned share distribution), as demonstrated in the table below.

Earned shares are further subject to continued employment through completion of the three-year performance period and are distributed shortly thereafter. Earned shares are not subject to further vesting requirements, although they may need to be retained to meet stock ownership guidelines (see discussion below).

Maggiano’s Performance Shares

To align the President of Maggiano’s to the business results of the Maggiano’s brand, the performance shares granted in fiscal 2019 to Mr. Baltes will be earned based on Maggiano’s Adjusted EBITDA as compared to a targeted Adjusted EBITDA over a three-year measurement period. The Committee set the targeted Adjusted EBITDA for the 2019 Maggiano’s Performance Share Plan at levels requiring

significant growth in EBITDA over the measurement period. Maggiano’s Adjusted EBITDA will be calculated in accordance with the terms of the Maggiano’s Performance Share Plan, which allows the Committee to make adjustments to the Maggiano’s Adjusted EBITDA in order to include or exclude specified items, for example, restructuring and impairment charges.

The target award is adjusted by the payout percentage which ranges from 0% to 220% (see charts below). To earn 100% of a target award, Maggiano’s must achieve the target Adjusted EBITDA at the end of the measurement period and Maggiano’s Comp Sales of 1.5% to 1.99%. To determine earned shares, the number of performance shares awarded will be multiplied by the distribution percentage corresponding to the Maggiano’s Adjusted EBITDA at the end of the measurement period. The distribution percentage is determined using linear interpolation between modeled Adjusted EBITDA achievement levels (Ex. $225,000 Adjusted EBITDA greater than the target Adjusted EBITDA = 110% Distribution Percentage), as demonstrated in the following table.

The number of shares earned as determined by Adjusted EBITDA above will be further modified by multiplying the earned shares by the Achieved Shared Modifier that corresponds to the Comp Sales achieved by Maggiano’s for the last fiscal year of the Measurement Period as demonstrated in the table below.

Earned shares are further subject to continued employment through completion of the three-year performance period and are distributed shortly thereafter. Earned shares are not subject to further vesting requirements, although they may need to be retained to meet stock ownership guidelines (see discussion below).

Stock Options

Stock options are intended to motivate participants to increase our stock price as they only have value if the market price of our stock increases over the closing price of our common stock on the date of grant. The actual value realized from stock options is dependent on both the increase in our stock price and each participant’s decision on when to exercise. Our stock options vest 25% per year over four years and have a term of eight years. We target a certain value for each stock option grant. The number of stock options granted is determined by the option fair value at the date of grant, and is calculated using the formula of (A) targeted value of stock option grant divided by (B) the grant date fair value as determined by the Black-Scholes valuation method.

Restricted Stock Units

Restricted stock units are intended to align participants to increase our stock price while acting as a retention tool, with shares only vesting with continued employment for three years. The number of units granted is determined by the stock price at the date of grant, and is calculated using the formula of (A) the targeted value of the restricted stock unit grant divided by (B) the stock price at grant.

Career Equity

Career Equity was a restricted stock unit program that worked as a retention device since the shares only vest upon retirement (detailed information concerning our retirement provisions can be found below in the paragraph titled Retirement Definitions and Payouts). The program was discontinued after fiscal 2016, but some NEOs still have outstanding unvested restricted stock units related to this program.

Retention Awards

Retention Awards are grants of restricted stock units designed as a retention tool, with shares only vesting with continued employment for either three- or five-year cliff-vesting horizons. The number of units granted is determined by the stock price at the date of grant, and is calculated using the formula of (A) the targeted value of the restricted stock unit grant divided by (B) the stock price at grant.

Performance-Based Options

Executive Special Equity Awards (“Performance-Based Options”) were approved in fiscal 2018 and fiscal 2019 by the Committee to incentivize a select group including Mr. Roberts and Mr. Provost to continue leading the Company during a transformative period in the industry and to further align their compensation with Company performance and increases in shareholder value. All or a portion of the Performance-Based Options may vest in accordance with the following terms and conditions, subject to continued employment through the applicable vesting date:

(i) One-half of the Performance-Based Options will vest at the end of fiscal 2021 if the Company achieves EPS (as defined in the Performance-Based Options Award Agreement) equal to or greater than the target of $4.86 (the “2021 EPS Performance Condition”) for the Company’s 2021 fiscal year. The original target was $4.40 and subsequent to the grant the Committee adjusted the 2021 EPS Performance Condition to neutralize the impact of a decreased corporate tax rate related to the Tax Cut and Jobs Act.

(ii) One-half of the Performance-Based Options will vest at the end of the fiscal 2022 if the Company achieves the target of EPS equal to or greater than $5.54 for the Company’s 2022 fiscal year (the “2022 EPS Performance Condition”). In the event that the 2021 EPS Performance Condition is not met in the Company’s 2021 fiscal year, then all of the Performance-Based Options will vest at the end of the 2022 fiscal year of the Company if the 2022 EPS Performance Condition is satisfied during the Company’s 2022 fiscal year. The original target was $5.00 and subsequent to the grant the Committee adjusted the 2022 EPS Performance Condition to neutralize the impact of a decreased corporate tax rate related to the Tax Cut and Jobs Act.

If the Performance-Based Options vest, they must be exercised on or before August 31, 2025. The Performance-Based Options also accelerate following certain specified terminations of employment, including in connection with a change of control, death and disability. The Performance-Based Options do not provide for acceleration of vesting for early or normal retirement.

As previously disclosed, in August of 2017, the Company granted 500,000 Performance-Based Options to Mr. Roberts, which, when coupled with other stock option grants made at the same time,

exceeded the maximum number of options that could be granted to any single individual under our Stock Option and Incentive Plan. We therefore determined, and Mr. Roberts acknowledged, on October 1, 2018 that 203,347 of such Performance-Based Options were void and canceled. As of such date, the voided Performance-Based Options had a fair value of approximately $3.2 million. The Committee reaffirmed that the Performance-Based Options, including the voided portion, were an integral part of Mr. Roberts’ fiscal 2018 compensation package and were aligned with the interests of the Company’s shareholders. Therefore, in order to satisfy the original intent with respect to Mr. Roberts’ compensation and taking into account the interests of the Company’s shareholders, the Committee granted Mr. Roberts a number of Performance-Based Options on November 1, 2018 having a grant date fair value equal to the voided options’ fair value on October 1, 2018. Such Performance-Based Options are conditioned on achievement of the same performance targets and vest on the same schedule outlined above and are reported as 2019 compensation as required under SEC disclosure requirements in the Summary Compensation Table and Grants of Plan-Based Awards Table below.

Equity Compensation Plan Information

The following table summarizes, as of June 26, 2019, the equity compensation plans under which we may issue shares of stock to our officers and team members under the Stock Option and Incentive Plan (“1998 Plan”) and to directors under the 1999 Stock Option and Incentive Plan for Non-Employee Directors and Consultants (“1999 Plan”):

Stock Ownership Guidelines

We have stock ownership guidelines for members of our Board of Directors and our senior vice presidents and above, including the NEOs. Stock ownership aligns the interests of these officers and directors with shareholders and promotes good corporate citizenship. Guidelines are reviewed annually by the Board of Directors, including a comparison of market prevalence and guideline designs.

The guidelines for all senior vice presidents and above, including all of our NEOs, define stock ownership to include the value of any shares currently owned; vested, in-the-money stock options (which are valued based on the “in the money” value of the stock option); the value of any unvested

restricted stock or restricted stock units; and the value of one-third of any unvested performance shares. We include the value of one-third of the unvested performance shares because on average it is expected that at least one-third of the shares will vest over multiple performance cycles.

The guidelines for our directors define stock ownership to include the value of any shares currently owned and the value of unvested restricted stock or restricted stock units.

The guidelines are based on a multiple of base salary (annual retainer in the case of the Board) which is used to calculate the desired value of holdings by position and are as follows:

Stock Ownership Guidelines

Executive Officers, including the NEOs subject to the guidelines, have five years to accumulate the necessary shares. The five-year period begins on the date the officer is promoted to the applicable position. If, however, such officer was not previously an employee of the Company, then the officer will be provided six years to meet the guideline. Should any officers be below the guidelines after being in the program for five years (or six, as applicable), they may receive half of any short-term incentives in shares until the guidelines are met. Directors have four years to accumulate the necessary shares. Currently, all officers and directors are in compliance with the guidelines or have additional time to meet the guidelines pursuant to the standards described in this paragraph.

The Company has a written insider trading policy that, among other things, prohibits its directors, officers and all employees from engaging in short-sale transactions of Company securities, pledging Company securities, placing Company securities in margin accounts, or engaging in hedging transactions, including trading in any derivative security relating to Company securities. You may obtain a copy of the Policy Governing the Improper Use of Material Nonpublic Information and Trading in Brinker’s Securities in the Corporate Governance section of our website (http://investors.brinker.com/corporate-governance/highlights).

Retirement Benefits

Savings Plans

Our 401(k) Plan and Deferred Income Plan (“Deferred Plan”) are designed to provide the Company’s team members with competitive tax-deferred long-term savings vehicles. The 401(k) Plan is a qualified 401(k) Plan and the Deferred Plan is a non-qualified deferred compensation plan.

401(k) Plan

All of our team members, including those who may be classified as highly compensated by the IRS, who have attained the age of 21 and completed both one year and 1,000 hours of service with the Company are eligible to participate in the 401(k) Plan. We currently match 100% of each participant’s contribution for the first 3% of the participant’s base salary and bonus and 50% for the next 2% of the participant’s base salary and bonus up to the IRS limits. All Company contributions vest immediately.

Deferred Plan

The Deferred Plan is a non-qualified deferred compensation plan for all of our officers, including the NEOs; however, none of our NEOs currently participate in the Deferred Plan.

Retiree Medical Benefits

Select officers, including the NEOs, are eligible to receive retiree medical insurance from us if they meet our definition of retirement (described below in the section entitled Retirement Definitions and Payouts). This fully insured policy is paid for by both the retiree and the Company. The cost split between the retiree and the Company mimics that of the cost split for our active employees and their medical benefits. Currently, that percentage is approximately 70% of the cost paid by the Company and 30% of the cost paid by the participant. Participants are eligible to receive this coverage until age 65.

Health and Welfare Benefits

All of our salaried employees are eligible for health and welfare benefits, including the NEOs. Our salaried employees, including the NEOs, also receive term life insurance, short-term disability and long-term disability. The level of Company-provided coverage for the senior vice presidents and above, including the NEOs, is provided at a higher level than is provided for other employees for some Company-provided benefits. We have provided detailed information in the chart below for the NEOs.

Company-Paid Benefits for the Named Executive Officers

Limited Perquisites

We provide our officers, including the NEOs, with perquisites that are generally intended to promote their well-being and efficiency. The Committee reviews the perquisites during our annual benchmarking process for reasonableness and consistency with competitive practice. We currently provide our officers (including the NEOs, with the exception of the CEO) with the following perquisites:

The CEO receives only a dining card, an annual executive physical and a mobile communication allowance.

We do not own or lease any aircraft for the benefit of management. Providing perquisites separately and not rolling them into base salary ensures those dollars are not included in our calculations for benefits such as life insurance, or other programs that use base salary in their calculation such as the Profit Sharing Plans and our 401(k) Plan.

Tax Implications

As one of the factors in the review of compensation matters, the Committee considers the anticipated tax treatment to the Company. The deductibility of some types of compensation for the CEO and other NEOs depends upon the timing of the vesting or exercise of previously granted rights. Prior to the 2017 Tax Cuts and Jobs Act, compensation that satisfied conditions set forth under Section 162(m) of the Internal Revenue Code to qualify as “performance-based compensation” was not subject to a

$1 million limit on deductibility, and the limit did not apply to compensation paid to the CFO. The 2017 Tax Cuts and Jobs Act eliminated the performance-based compensation exception and additionally applies the limit to the CFO and certain former executive officers. However, it provides a transition rule with respect to remuneration which is provided pursuant to a written binding contract which was in effect on November 2, 2017, and which is not materially modified after that date. With the elimination of the exemption for performance-based compensation, we expect that we will be unable to deduct all compensation in excess of $1 million paid to our CEO, CFO and our other NEOs covered by the new tax law, other than previously granted awards that comply with the transition rules. We monitor the application of Section 162(m) and the associated Treasury regulations on an ongoing basis and the advisability of qualifying executive compensation for deductibility. Notwithstanding the repeal of the exemption for “performance-based compensation,” the Committee intends to maintain its commitment to structuring the Company’s executive compensation programs in a manner designed to align pay with performance.

Recoupment Provisions

Our individual plan documents and our grant agreements contain language stating that if the Board of Directors determines any fraud, negligence or intentional misconduct by an officer was a significant contributing factor to the Company having to restate all or a portion of its financial statements, the Board or Committee shall take, in its discretion, such action as it deems necessary to remedy the misconduct and prevent its recurrence. Further, under Section 304 of Sarbanes-Oxley, if the Company is required to restate its financials due to material noncompliance with any financial reporting requirements as a result of misconduct, the CEO and CFO must reimburse the Company for (1) any bonus or other incentive-based or equity-based compensation received during the 36 months following the first public issuance of the non-complying document and (2) any profits realized from the sale of securities of the Company during those 36 months.

Consideration of Prior Amounts Realized

In furtherance of the Company’s philosophy of rewarding executives for future superior performance, prior stock compensation gains (or the lack thereof) are not considered in setting future compensation levels.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Respectfully submitted,

COMPENSATION COMMITTEE

GEORGE R. MRKONIC (Chair)

JOHN W. CHIDSEY

CINDY L. DAVIS

MICHAEL A. GEORGE

WILLIAM T. GILES

Compensation Policies and Practices As They Relate to the Company’s Risk Management

We believe that our compensation policies and practices for all team members, including officers, do not create risks that are reasonably likely to have a material adverse effect on the Company. We believe that the Company has appropriate safeguards in place with respect to the compensation programs that assist in mitigating excessive risk-taking that could harm our value or reward poor judgment by our officers and team members. These safeguards include: managing pay opportunities to market levels through peer benchmarking; balancing performance focus between near-term objectives and long-term shareholder value creation; issuing equity awards that vest over multi-year time horizons; capping cash incentive plan payments; maintaining stock ownership guidelines for our executive officers; and maintain no employment agreements. Furthermore, the Committee retains its own independent compensation consultants to provide input on executive pay matters, meets regularly, and approves all performance goals, award vehicles and pay opportunity levels.

In fiscal 2019, the Committee reviewed the concept of risk as it relates to our compensation programs and determined that our programs do not encourage excessive or inappropriate risk. In reaching this conclusion, the Committee noted that long-term incentives are predominately equity-based and tied to shareholder returns, market comparisons are used, ownership guidelines are applied, and the majority of variable pay is tied to Company performance.

FISCAL 2019 SUMMARY COMPENSATION TABLE

Fiscal 2019 Grants of Plan-Based Awards Table