BRINKER INTERNATIONAL
LOGO
6820 LBJ Freeway
Dallas, Texas 75240
(972) 980-9917
September 22, 2000
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 9, 2000, at the
Cinemark 17 Theater, located at 11819 Webb Chapel Road, Dallas,
Texas. The meeting is being held for the following purposes:
(A) to elect eleven directors of the Company
to serve until the next annual meeting of
shareholders; and
(B) 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, or vote via telephone
as set forth in the proxy, at your earliest convenience.
Very truly yours,
Norman E. Brinker
Chairman of the Board
BRINKER INTERNATIONAL, INC.
6820 LBJ Freeway
Dallas, Texas 75240
(972) 980-9917
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 9, 2000
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 Cinemark 17
Theater, located at 11819 Webb Chapel Road, Dallas, Texas, on
Thursday, November 9, 2000, at 10:00 a.m., local time, for the
following purposes:
(A) to elect eleven directors of the Company
to serve until the next annual meeting of
shareholders; and
(B) 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 11, 2000, 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 (or follow the instructions set forth in the enclosed
proxy to vote your proxy by telephone) 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 (or follow the instructions set forth on
the enclosed proxy to vote your proxy by telephone).
By Order of the Board of Directors,
Roger F. Thomson
Secretary
Dallas, Texas
September 22, 2000
BRINKER INTERNATIONAL, INC.
6820 LBJ Freeway
Dallas, Texas 75240
(972) 980-9917
==============
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 9, 2000
==============
This Proxy Statement is first being mailed on or about
September 22, 2000, 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 9, 2000. 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, or if voted by telephone
in accordance with the instructions set forth in the enclosed
proxy, and not revoked. The proxy may be revoked at any time
before it is voted by giving written notice or a subsequently
dated proxy (either by mail or by telephone), 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 11, 2000 (the "Record Date"). At the
close of business on the Record Date, the Company had 66,056,817
shares of Common Stock, $0.10 par value ("Common Stock"), issued
and outstanding and entitled to vote at the meeting.
ACTION TO BE TAKEN AT THE MEETING
The annual meeting is being held to elect eleven directors
of the Company to serve until the next annual meeting of
shareholders. 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. However, only the number of shares
voted in person or by proxy and abstentions are counted for
purposes of determining the presence or absence of a quorum for a
specific proposal. A majority of the number of shares voted in
person or by proxy and abstentions must vote in favor of a
proposal in order for it to be 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.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as to all
persons known by the Company to beneficially own more than five
percent of the outstanding shares of Common Stock of the Company:
Beneficial Ownership
Name and Address Number of Shares Percent
FMR Corp. 5,143,495 (1) 7.79%
82 Devonshire Street
Boston, Massachusetts 02109
Capital Research and Management 4,450,000 (2) 6.74%
Company
333 South Hope Street
Los Angeles, California 90071
(1) Based on information contained in Schedule 13G dated as
of March 31, 2000.
(2) Based on information contained in Schedule 13G dated as
of December 31, 1999.
SECURITY OWNERSHIP OF MANAGEMENT
AND ELECTION OF DIRECTORS
Eleven directors are to be elected at the meeting. Each
nominee will be elected to hold office until the next annual
meeting of shareholders. 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 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:
Number of Shares Number Attributable to
of Common Stock Options Exercisable
Beneficially Owned Within 60 Days of Percent
Name as of September 11, 2000 (1)(2) September 11, 2000 of Class
Norman E. Brinker 1,346,112 (3) 909,370 2.01%
Ronald A. McDougall 890,397 819,400 1.33%
Douglas H. Brooks 503,454 378,875 *
Todd E. Diener 96,660 66,411 *
Russell G. Owens 215,619 171,175 *
Roger F. Thomson 43,812 25,000 *
Donald J. Carty 18,584 7,818 *
Dan W. Cook, III 7,997 7,997 *
Marvin J. Girouard 1,149 0 *
Frederick S. Humphries 25,283 25,000 *
Ronald Kirk 6,291 5,525 *
Jeffrey A. Marcus 10,000 0 *
James E. Oesterreicher 15,649 14,000 *
Roger T. Staubach 40,031 27,999 *
All executive officers
and directors as a
group (18 persons) 3,761,061 (3) 2,769,445 5.46%
* Less than one percent
(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 options vested, or vesting within 60 days of
September 11, 2000, under the Company's 1983 Incentive Stock
Option Plan, 1992 Incentive Stock Option Plan and 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.
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 encouraged 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 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. All nominees are
currently serving as directors of the Company. Each of the
current directors was elected at the last annual meeting of the
Company's shareholders held on November 4, 1999.
Norman E. Brinker, 69, has served as Chairman of the Board
of Directors since 1983. He was also Chief Executive Officer of
the Company from September 1983 to June 1995, with the exception
of a brief period during which he was incapacitated due to an
injury. Mr. Brinker is a member of the Executive and Nominating
Committees of the Company. He was the founder of S&A Restaurant
Corp. in 1966, and served as its Chairman of the Board of
Directors and Chief Executive Officer from 1977 through 1983.
From 1982 through 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 and Petsmart, Inc.
Ronald A. McDougall, 58, was elected Vice Chairman and Chief
Executive Officer in January 1999, having formerly held the
office of President and Chief Executive Officer of the Company
since June 1995 and President and Chief Operating Officer from
1986 to 1995. 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 1983 and is a member of
the Executive and Nominating Committees of the Company. Mr.
McDougall also serves on the Board of Trustees of the Cooper
Institute for Aerobics Research.
Douglas H. Brooks, 48, became President and Chief Operating
Officer of the Company in January 1999. Previously, Mr. Brooks
served as Chili's Grill & Bar ("Chili's") President from June
1994 to May 1998 and Executive Vice President and Chief Operating
Officer from May 1998 until January 1999. Mr. Brooks joined the
Company as an Assistant Manager in 1978 and was promoted to
General Manager later that year. He was named Area Supervisor in
1979, Regional Director in 1982, Senior Vice President - Central
Region Operations in 1987, and Senior Vice President - Chili's
Operations in 1992. He held this position until becoming
President of Chili's in 1994. Mr. Brooks serves on the Board of
Directors of Limbs for Life and Circle Ten Council - Boy Scouts
of America and is a member of the Professional Advisory Board for
St. Jude Children's Research Hospital.
Donald J. Carty, 54, was named Chairman, President and Chief
Executive Officer of AMR Corp. and American Airlines, Inc. in May
1998, after serving as President from March 1995 until May 1998.
From 1989 to 1995, he served American Airlines, Inc. and AMR
Corp. as Executive Vice President - Finance and Planning. He
joined American in 1978 and held numerous finance and planning
positions, with the exception of a two-year hiatus as President
and Chief Executive Officer of CP Air in Canada. He serves on the
Board of Directors of Dell Computer Corporation and is a member
of the Dallas Citizens Council and the Southern Methodist
University Board of Trustees. Mr. Carty has served on the Board
of Directors since June 1998 and is a member of the Executive
Committee of the Company.
Dan W. Cook, III, 65, is a Senior Director of Goldman Sachs,
an investment banking firm. Mr. Cook joined Goldman Sachs Group
in 1961 and was a general partner when he retired in 1992. Mr.
Cook is a member of the Executive and Compensation Committees of
the Company and has served as a member of the Board of Directors
since October 1997. Mr. Cook also serves on the Board of
Directors for Centex Corporation and GreatLodge.com. 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.
Marvin J. Girouard, 61, is the Chairman, President and Chief
Executive Officer of Pier 1 Imports, Inc., having been elected to
the position of Chairman in February 1999, President in August
1988 and Chief Executive Officer in June 1998. Mr. Girouard
previously served as Chief Operating Officer from 1988 to 1998.
Mr. Girouard joined Pier 1 Imports in 1975 and has served on its
Board of Directors since 1988. He serves as a Director for Tandy
Brands Accessories, Inc. and is a member of the Executive
Committee for the United States Committee for UNICEF - The United
Nations Children's Emergency Fund. Mr. Girouard has served as a
member of the Board of Directors since September 1998 and is a
member of the Audit, Compensation and Executive Committees of the
Company.
Frederick S. Humphries, 64, 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 a member of
the USDA Task Force of 1890 Land-Grant Institutions in addition
to being involved in various civic and community activities.
Dr. 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
WalMart, Inc.
Ronald Kirk, 46, is currently Mayor of the City of Dallas
and a partner in the law firm of Gardere & Wynne, L.L.P. 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
has served on the Board of Directors since January 1997 and is a
member of the Nominating Committee of the Company.
Jeffrey A. Marcus, 53, is the Chairman and Chief Executive
Officer of eVentures Group, Inc., an internet communications
holding company, a position he has held since April 2000. He
previously served as a Partner of Marcus & Partners, a private
equity investment firm, from March 1999 until April 2000 and
President and Chief Executive Officer of AMFM, Inc. (formerly
Chancellor Media Corporation), from May 1998 until March 1999.
Previously, Mr. Marcus was Chairman, President and Chief
Executive Officer of Marcus Cable Company, a company he formed in
1990 after spending more than 20 years in the cable television
industry. Mr. Marcus is active in several civic and charitable
organizations. Mr. Marcus has served on the Board of Directors
since January 1997 and is a member of the Executive and
Nominating Committees of the Company.
James E. Oesterreicher, 59, is the Retired Chairman of the
Board of J.C. Penney Company, Inc., having served as Chairman of
the Board and Chief Executive Officer from January 1997 until
September 2000 and Vice Chairman and Chief Executive Officer from
January 1995 until January 1997. Mr. Oesterreicher served 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
entities, including The Dial Corporation, TXU Corp., Texas Health
Resources, National Retail Federation, Circle Ten Council - Boy
Scouts of America, March of Dimes Birth Defects Foundation, and
The Conference Board. Mr. Oesterreicher has served as a member of
the Board of Directors of the Company since May 1994 and is a
member of the Audit, Compensation and Nominating Committees of
the Company.
Roger T. Staubach, 58, 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.
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 American
AAdvantage Funds and is active in numerous civic, charity and
professional organizations. He has served as a member of the
Board of Directors of the Company since 1993 and is a member of
the Nominating Committee of the Company.
Executive Officers
The following persons are executive officers of the Company
who are not nominated to serve on the Company's Board of
Directors:
Kenneth D. Dennis, 47, has been Mexican Concepts (Cozymel's
Coastal Mexican Grill ("Cozymel's") and On The Border Mexican
Grill & Cantina) President since October 1999, having previously
served as Cozymel's President since September 1997, and Senior
Vice President and Chief Operating Officer of Cozymel's since
February 1997. Mr. Dennis joined the Company as a Manager in
1976 and was named General Manager in 1978, Director of Internal
Systems in 1979, and Director of Marketing in 1983. Mr. Dennis
was promoted to Vice President of Marketing in 1986 and to Senior
Vice President of Marketing in 1993, a position he held until
February 1997.
Todd E. Diener, 43, was elected Chili's Grill & Bar
President in May 1998, having previously served as Chili's Senior
Vice President and Chief Operating Officer since July 1996. Mr.
Diener joined the Company as a Chili's Manager Trainee in 1981
and was promoted to General Manager in 1983, Area Director in
1985, and Regional Director in 1987. Mr. Diener became Regional
Vice President in 1989, a position he held until July 1996.
John C. Miller, 45, has served as Romano's Macaroni Grill
President since April 1997. Mr. Miller joined the Company as
Vice President-Special Concepts in 1987. In 1988, he was elected
Vice President - Joint Venture/Franchise and served in this
capacity until 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 Senior Vice President and Mexican Concepts
President in October 1995, a position he held until April 1997.
Prior to joining the Company, Mr. Miller worked in various
capacities with the Taco Bueno Division of Unigate Restaurants.
Russell G. Owens, 41, has served as Executive Vice President
and Chief Financial and Strategic Officer since September 1997.
Mr. Owens 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, a position he held until being elected Chief Strategic
Officer in June 1997. Prior to joining the Company, Mr. Owens
worked for the public accounting firm, Deloitte & Touche.
Roger F. Thomson, 51, has served as Executive Vice
President, Chief Administrative Officer, General Counsel and
Secretary since June 1996. Mr. Thomson joined the Company as
Senior Vice President, General Counsel and Secretary in 1993 and
was promoted to Executive Vice President, General Counsel and
Secretary in 1994. Mr. Thomson served as a Director of the
Company from 1993 until 1995. From 1988 until 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.
Mark F. Tormey, 47, has served as Maggiano's Little Italy
President since November 1997, having joined the Company as
Senior Vice President and Chief Operating Officer of Maggiano's
Little Italy in 1995. Prior to joining the Company, Mr. Tormey
worked for Lettuce Entertain You Enterprises, Inc. since 1979. In
1991, Mr. Tormey opened the first Maggiano's Little Italy
restaurant and worked with the Maggiano's Little Italy group at
Lettuce Entertain You Enterprises, Inc. until its acquisition by
the Company in 1995.
David Wolfgram, 42, has served as Corner Bakery Cafe
("Corner Bakery") President since November 1997, having joined
the Company as Senior Vice President and Chief Operating Officer
of Corner Bakery in August 1995. Mr. Wolfgram joined Lettuce
Entertain You Enterprises, Inc. in 1980 and served as Vice
President and Managing Partner with Lettuce Entertain You
Enterprises, Inc. from 1989 until Corner Bakery was acquired by
the Company in August 1995.
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. Mr. J.M.
Haggar, Jr. is a Retiring Director and is leaving the Board of
Directors after fifteen years of service. The four classes of
non-employee directors are as follows: Messrs. Girouard,
Humphries and Oesterreicher comprise Class 1 and will be
considered Retiring Directors as of the annual meeting of
shareholders following the end of the 2002 fiscal year. There
are no members of Class 2. Messrs. Kirk and Marcus comprise
Class 3 and will be considered Retiring Directors as of the
annual meeting of shareholders following the end of the 2004
fiscal year. Messrs. Carty, 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.
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. Brinker, McDougall, Carty, Cook, Girouard,
and Marcus) met one time during the fiscal year. The Executive
Committee reviews material matters during the intervals between
Board meetings, provides advice and counsel to Company management
during such intervals, and has the authority to act for the Board
on most matters during the intervals between Board meetings. In
addition, the Executive Committee is also charged with assuring
that the Company has a satisfactory succession management plan
for all key management positions.
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. Girouard, Haggar,
Humphries, and Oesterreicher, and it met five times during the
fiscal year. Included among the functions performed by the Audit
Committee are: the review with independent auditors of the audit
strategy, plan and scope and the results of the annual audit
conducted by such independent auditors, consideration and
recommendation to the Board of the selection of the independent
auditors for the next fiscal 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. Cook, Girouard, Haggar and Oesterreicher, and it met
three times during the fiscal year. Functions performed by the
Compensation Committee include: reviewing the performance of the
Chief Executive Officer, approving key executive promotions,
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, and approval of the adoption and amendment of
significant compensation plans. The specific nature of the
Committee's responsibilities as they relate to executive officers
is set forth below under "Report of the Compensation Committee."
The purposes of the Nominating Committee are to recommend to
the Board of Directors potential members to be added as new or
replacement members to the Board of Directors, to review the
compensation paid to non-management Board members, and to
recommend corporate governance guidelines to the full Board of
Directors. The Nominating Committee will consider a shareholder-
recommended nomination for director to be voted upon at the 2001
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 25, 2001. The Nominating Committee is
composed of Messrs. Brinker, McDougall, Kirk, Marcus,
Oesterreicher, and Staubach and it met two times during the
fiscal year.
During the fiscal year ended June 28, 2000, the Board of
Directors held four meetings; each incumbent director attended at
least 75% of the aggregate total of meetings of the Board of
Directors and Committees on which he served.
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 or restricted stock under the Company's
1999 Stock Option and Incentive 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 payment
of $36,000, at least 25% of which must be taken in the form of
stock options or restricted stock. 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 Board of
Directors' meeting held contemporaneous with the next annual
meeting of shareholders. The stock options and restricted stock
will be granted as of the sixtieth day following such meeting (or
if the sixtieth day is not a business day, on the first business
day thereafter) at the fair market value of the underlying Common
Stock on the date of grant. One-third of the stock options will
vest on each of the second, third and fourth anniversaries of the
date of grant. All of the restricted stock will vest on the
fourth anniversary 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.
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 2000.
Summary Compensation Table
Long-Term Compensation
Awards Payouts
Restricted Securities Long-Term
Annual Compensation Stock Underlying Incentive All Other
Name and Principal Year Salary Bonus Awards (1) Options Payouts Compensation (2)
Position
Ronald A. McDougall
Vice Chairman and 2000 $ 978,462 $1,357,616 $973,204 120,000 $174,187 $ 29,112
Chief Executive 1999 $ 929,154 $1,080,142 $ 0 200,000 $106,100 $ 20,652
Officer 1998 $ 861,442 $1,033,731 $ 0 200,000 $ 76,633 $ 30,397
Douglas H. Brooks
President and 2000 $ 624,231 $ 866,121 $605,398 75,000 $110,050 $ 19,803
Chief Operating 1999 $ 541,154 $ 555,515 $ 0 125,000 $ 69,505 $ 17,491
Officer 1998 $ 387,308 $ 255,623 $ 0 60,000 $ 45,980 $ 16,595
Russell G. Owens
Executive Vice 2000 $ 398,462 $ 368,578 $435,337 50,000 $ 66,504 $ 16,124
President and Chief 1999 $ 350,000 $ 271,251 $ 0 75,000 $ 62,898 $ 14,220
Financial and 1998 $ 286,577 $ 229,262 $ 0 50,000 $ 37,473 $ 13,319
Strategic Officer
Roger F. Thomson
Executive Vice 2000 $ 374,231 $ 346,164 $320,804 31,000 $ 45,914 $ 33,886
President, Chief 1999 $ 349,885 $ 271,161 $ 0 50,000 $ 79,575 $ 13,909
Administrative 1998 $ 334,692 $ 267,754 $ 0 50,000 $ 57,475 $ 16,501
Officer, General
Counsel and Secretary
Todd E. Diener
Chili's Grill & 2000 $ 355,962 $ 293,354 $200,731 25,000 $107,346 $ 57,531
Bar President 1999 $ 330,673 $ 259,929 $ 0 60,000 $ 0 $ 16,840
1998 $ 231,385 $ 160,917 $ 0 20,000 $ 0 $ 11,179
(1) Restricted stock was granted to the named officers on August
13, 1999 and November 4, 1999 and such restricted stock is valued
at the closing price of the Company Common Stock on the grant
dates. Mr. McDougall was awarded 39,700 shares of restricted
stock during the last fiscal year, 6,210 shares of which vested
on August 13, 2000, 3,105 shares of which will vest on August 13,
2001, 15,193 shares of which will vest on November 4, 2001, and
15,192 shares of which will vest on November 4, 2002. Mr. Brooks
was awarded 24,700 shares of restricted stock during the last
fiscal year, 3,806 shares of which vested on August 13, 2000,
1,903 shares of which will vest on August 13, 2001, 9,496 shares
of which will vest on November 4, 2001, and 9,495 shares of which
will vest on November 4, 2002. Mr. Owens was awarded 17,754
shares of restricted stock during the last fiscal year, 3,105
shares of which vested on August 13, 2000, 1,552 shares of which
will vest on August 13, 2001, 6,549 shares of which will vest on
November 4, 2001, and 6,548 shares of which will vest on November
4, 2002. Mr. Thomson was awarded 13,013 shares of restricted
stock during the last fiscal year, 3,105 shares of which vested
on August 13, 2000, 1,552 shares of which will vest on August 13,
2001, 4,178 shares of which will vest on November 4, 2001, and
4,178 shares of which will vest on November 4, 2002. Mr. Diener
was awarded 8,180 shares of restricted stock during the last
fiscal year, 1,402 shares of which vested on August 13, 2000, 701
shares of which will vest on August 13, 2001, 3,039 shares of
which will vest on November 4, 2001, and 3,038 shares of which
will vest on November 4, 2002. The aggregate value of the
restricted stock owned by each of the named executive officers at
the end of the last fiscal year (at $29.5625 per share) was
$1,173,631 for Mr. McDougall, $730,194 for Mr. Brooks, $524,321
for Mr. Owens, $384,697 for Mr. Thomson and $241,821 for Mr.
Diener. If dividends are paid by the Company on its Common
Stock, the owners of restricted stock will be entitled to receive
dividends on shares of restricted stock owned by them. For those
named officers who have compensation in excess of $1,000,000 in
any year in which shares of restricted stock are granted, the
vesting of such restricted stock shall occur on the designated
vesting dates only if performance objections are allocated.
(2) All other compensation represents Company match on deferred
compensation and various fringe benefits including car allowance
and reimbursement of tax preparation, financial planning, health
club expenses and, in the case of Mr. Diener for fiscal 2000,
reimbursement of relocation expenses.
Option Grants During 2000 Fiscal Year
The following table contains certain information concerning
the grant of stock options pursuant to the Company's Stock Option
and Incentive Plan to the executive officers named in the above
compensation table during the Company's last fiscal year.
% of Total Realizable Value of
Options Assumed Annual Rates of
Granted to Stock Price Appreciation
Options Employees in Exercise or Expiration for Option Term (1)
Name Granted Fiscal Year Base Price Date 5% 10%
Ronald A. McDougall 120,000 7.19% $24.1875 11/04/09 $1,825,368 $4,625,832
Douglas H. Brooks 75,000 4.49% $24.1875 11/04/09 $1,140,855 $2,891,145
Russell G. Owens 50,000 2.99% $24.1875 11/04/09 $ 760,570 $1,927,430
Roger F. Thomson 31,000 1.86% $24.1875 11/04/09 $ 471,553 $1,195,007
Todd E. Diener 25,000 1.50% $24.1875 11/04/09 $ 380,285 $ 963,715
(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 $29.5625 fiscal year end price of
the Company's Common Stock.
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired Value Fiscal Year End Fiscal Year End
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Ronald A. McDougall 335,000 $6,407,263 777,500 545,000 $9,324,611 $4,834,063
Douglas H. Brooks 50,625 $1,085,957 348,875 260,000 $5,206,085 $1,718,438
Russell G. Owens 20,000 $ 322,225 155,708 180,000 $2,301,523 $1,365,625
Roger F. Thomson 247,500 $2,467,829 0 136,000 $ 0 $1,193,188
Todd E. Diener 18,202 $ 194,988 56,411 95,000 $ 841,700 $ 458,750
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 premiere
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 will 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, stock options and shares of restricted
stock.
Base Salaries
Executives' base salaries and total compensation are
targeted to be competitive between the 75th and 90th percentiles
of the market for positions of similar responsibility and scope
to reflect the exceptionally high level of executive talent
required to execute the growth plans of the Company. Positioning
executives' base salaries at these levels is necessary 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 third-party executive salary surveys
that reflect both the chain restaurant industry as well as a
broader cross-section of companies from many industries.
Individual base salary levels are determined by considering
market data for each officer's position, level of responsibility,
performance, and experience. 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 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 non-restaurant concept executives the same as for all
other non-restaurant concept corporate employees and by making
the basis for payouts to executives of one of the Company's
restaurant concepts the same as for all other members of such
restaurant concept's corporate team.
At the beginning of a fiscal year, each executive is
assigned an Individual Participation Percentage ("IPP") of the
base salary for such executive that 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.
401(k) Savings Plan and Savings Plan II
The Company's 401(k) Savings Plan ("Plan I") and Savings
Plan II ("Plan II") are designed to provide the Company's
employees with a tax-deferred long-term savings vehicle. The
Company provides a matching contribution equal to twenty-five
percent of a salaried participant's contribution, up to a maximum
of five percent of such participant's base 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. A participant's
contributions vest immediately while Company contributions vest
twenty-five percent annually, beginning in the participant's
second year of eligibility.
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 a select group of
management and highly compensated employees according to the
Department of Labor. A participant's contributions vest
immediately while Company contributions vest twenty-five percent
annually, beginning in the participant's second year of
eligibility.
Long-Term Incentives
All salaried employees of the Company, including executives,
are eligible for annual grants of tax-qualified and non-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 of the underlying Common
Stock as of 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 of a stock option
grant becomes exercisable two years after the grant date; the
remaining fifty percent of a grant becomes exercisable three
years after the grant date.
The number of stock options granted to an executive is
determined by the Compensation Committee and is based on grant
guidelines set by the Compensation Committee that reflect market
data and the officer's position within the Company. Commencing
with the 2000 fiscal year, annual grants of stock options to
officers of the Company were reduced and such officers began to
receive annual grants of restricted stock. Fifty percent of the
restricted stock becomes vested two years after the grant date;
the remaining fifty percent becomes vested three years after the
grant date.
Pursuant to the Executive Long-Term Incentive Plan, the
value of each officer's long-term compensation package,
previously payable in cash, was reallocated among restricted
stock and cash. At the beginning of a three-year performance
period, target payouts of both cash and restricted stock are
determined for each participant. At the end of the performance
period, these payouts will be made (in cash and in restricted
stock) based upon performance against the three-year target
earnings per share (for corporate officers) or profit before
taxes (for restaurant concept officers) amounts established by
the Compensation Committee of the Board of Directors. The
restricted stock vests one-third each year commencing one year
after the date of award. The Executive Long-Term Incentive Plan
is being phased in over a three-year period beginning in the 2000
fiscal year. Full target payouts will become effective after the
completion of the 2002 fiscal year when the performance results
for the full 2000, 2001, and 2002 three-year cycle are known.
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 2.04%, effective June 29, 2000,
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 120,000 stock options and 39,700 shares of restricted
stock under the Company's Stock Option and Incentive Plan.
Approximately 58% of Mr. McDougall's cash compensation for fiscal
2000 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
2000 fiscal year, Mr. McDougall's total cash compensation
increased 16% from its level in the 1999 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
DAN W. COOK, III
MARVIN J. GIROUARD
J.M. HAGGAR, JR.
JAMES E. OESTERREICHER
FIVE-YEAR TOTAL SHAREHOLDER RETURN COMPARISON
The following is a line graph presentation comparing
cumulative, five-year total shareholder return on an investment
in the Common Stock of the Company against the returns of the S&P
500 Index and the S&P Restaurant Industry Index. A list of the
returns follows the graph.
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.
1995 1996 1997 1998 1999 2000
Brinker International 100.00 89.21 80.58 113.67 158.27 170.15
S&P 500 100.00 126.00 169.73 220.92 271.19 290.85
S&P Restaurants 100.00 117.67 123.06 166.71 209.00 160.78
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. The Company
believes that all filing requirements were satisfied. In making
these disclosures and filing the reports, the Company has relied
solely on written representations from certain reporting persons.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists
of Messrs. Dan W. Cook, III, Marvin J. Girouard, J.M. Haggar,
Jr., and James E. Oesterriecher, none of whom serve or previously
served as employees or officers of the Company.
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 or bonus plans. 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.
Companies controlled by Roger T. Staubach, a director of the
Company, provided real estate brokerage services during the 2000
fiscal year in connection with the lease of land by the Company
for use as a new restaurant and the sublease by the Company of a
closed restaurant to an unrelated third party. These companies
were paid $45,000 by the Company's landlord for the services
provided on the new restaurant lease and $55,000 by the Company
for the services provided on the sublease of the closed
restaurant.
SHAREHOLDERS' PROPOSALS
Any proposals that shareholders of the Company desire to have
presented at the 2001 annual meeting of shareholders must be
received by the Company at its principal executive offices no
later than May 25, 2001.
INDEPENDENT AUDITORS
Representatives of KPMG LLP, independent certified public
accountants and auditors of the Company's financial statements,
are expected to be present at the meeting with the 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 28, 2000,
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 22, 2000
