BRINKER INTERNATIONAL
LOGO
September 26, 1995
6820 LBJ Freeway
Dallas, Texas 75240
(214) 980-9917
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 2, 1995, at the General Cinema NorthPark Theater I & II,
located at 1100 NorthPark Center, Dallas, Texas. At this meeting you will be
asked
(A) to elect thirteen (13) directors of the Company to
serve until the next annual meeting of shareholders or
until their respective successors shall be elected and
qualified;
(B) to approve an amendment to the Company's 1992
Incentive Stock Option Plan; and
(C) to transact such other business as may properly come
before the meeting or any adjournment thereof.
Our agenda for the meeting will also include a strategic overview of the
Company.
It is important that your shares be represented at the meeting, whether
or not you attend personally. I urge you to sign, date and return the
enclosed proxy at your earliest convenience.
Very truly yours,
NORMAN E. BRINKER
Chairman of the Board
BRINKER INTERNATIONAL, INC.
6820 LBJ Freeway
Dallas, Texas 75240
(214) 980-9917
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 2, 1995
To our Shareholders:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
Brinker International, Inc., a Delaware corporation (the "Company"), will be
held at the General Cinema NorthPark Theater I & II, located at 1100 NorthPark
Center, Dallas, Texas, on Thursday, November 2, 1995, at 10:00 a.m., local
time, for the following purposes:
(A) to elect thirteen (13) directors of the Company to
serve until the next annual meeting of shareholders or
until their respective successors shall be elected and
qualified;
(B) to approve an amendment to the Company's 1992
Incentive Stock Option Plan; and
(C) to transact such other business as may properly come
before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on September 1,
1995, are entitled to notice of, and to vote at, the meeting or any
adjournment thereof.
It is desirable that as large a proportion as possible of the
shareholders' interests be represented at the meeting. Whether or not you
plan to be present at the meeting, you are requested to sign and return the
enclosed proxy in the envelope provided so that your stock will be
represented. The giving of such proxy will not affect your right to vote in
person, should you later decide to attend the meeting. Please date and sign
the enclosed proxy and return it promptly in the enclosed envelope.
By Order of the Board of Directors,
ROGER F. THOMSON
Secretary
Dallas, Texas
September 26, 1995
BRINKER INTERNATIONAL, INC.
6820 LBJ Freeway
Dallas, Texas 75240
(214) 980-9917
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 2, 1995
This Proxy Statement is first being mailed on or about September 26,
1995, 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 2, 1995. Proxies in the form enclosed will be voted at
the meeting, if properly executed, returned to the Company prior to the
meeting and not revoked. The proxy may be revoked at any time before it is
voted by giving written notice or a duly executed proxy bearing a later date
to the Secretary of the Company, or voting in person.
OUTSTANDING CAPITAL STOCK
The record date for shareholders entitled to vote at the annual meeting
is September 1, 1995 (the "Record Date"). At the close of business on the
Record Date, the Company had issued and outstanding and entitled to vote at
the meeting 76,562,063 shares of Common Stock, $0.10 par value ("Common
Stock").
ACTION TO BE TAKEN AT THE MEETING
The accompanying proxy, unless the shareholder otherwise specifies in
the proxy, will be voted (i) for the election as directors of the Company of
the thirteen (13) persons named under the caption "Security Ownership of
Management and Election of Directors", (ii) for the amendment to the Company's
1992 Incentive Stock Option Plan, and (iii) at the discretion of the proxy
holders, on any other matter that may properly come before the meeting or any
adjournment thereof.
Where shareholders have appropriately specified how their proxies are to
be voted, they will be voted accordingly. If any other matter or business is
brought before the meeting, the proxy holders may vote the proxies at their
discretion. The directors do not know of any such other matter or business.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock as of the Record Date is necessary to
constitute a quorum at the annual meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum
for the transaction of business. Abstentions are counted in tabulations of
votes cast on proposals presented to shareholders. Broker non-votes are not
counted for purposes of determining whether a proposal has been approved. In
deciding all questions, a holder of Common Stock is entitled to one vote, in
person or by proxy, for each share held in his or her name on the Record Date.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as to the number of
shares of Common Stock of the Company beneficially owned by the principal
shareholders of the Company.
Beneficial Ownership
Number of
Name and Address Shares Percent
The Capital Group Companies 7,672,450 (1) 10.7%
333 South Hope Street
Los Angeles, California 90071
Fidelity Management Research 7,089,600 (2) 9.8%
82 Devonshire Street
Boston, Massachusetts 02109
Massachusetts Financial Services 5,326,460 (3) 7.4%
500 Boylston Street
Boston, Massachusetts 02116
(1) As of June 28, 1995. Based on information contained in Schedule 13G dated as of July 10,
1995, as supplemented by subsequent communication.
(2) As of August 28, 1995. Based on information supplied via direct communication.
(3) As of August 11, 1995. Based on information supplied via direct communication.
SECURITY OWNERSHIP OF MANAGEMENT
AND ELECTION OF DIRECTORS
Thirteen (13) directors are to be elected at the meeting. Each nominee
will be elected to hold office until the next annual meeting of the
shareholders or until his or her successor is elected and qualified. Proxy
holders will not be able to vote the proxies held by them for more than 13
persons. To be elected a director, each nominee must receive a plurality of
all of the votes cast at the meeting for the election of directors. Should
any nominee become unable or unwilling to accept nomination or election, the
proxy holders may vote the proxies for the election, in his or her stead, of
any other person the Board of Directors may recommend. All nominees have
expressed their intention to serve the entire term for which election is
sought. The following table sets forth certain information concerning
security ownership of management and nominees for election as directors of the
Company:
Number of Shares
of Common Stock
Beneficially Owned as Percent of
Name as of September 1, 1995 (1) Class
Norman E. Brinker 1,759,009 (2) 2.30%
Douglas H. Brooks 376,225 *
F. Lane Cardwell, Jr. 146,022 *
Gerard V. Centioli 296,462 *
Creed L. Ford, III 822,854 1.08%
Ronald A. McDougall 395,022 *
Debra L. Smithart 117,910 *
Jack W. Evans, Sr. 81,092 *
Rae F. Evans 12,835 (3) *
J.M. Haggar, Jr. 140,020 *
J. Ira Harris 17,000 (4) *
Frederick S. Humphries -0- -0-
James E. Oesterreicher 500 *
Roger T. Staubach 7,000 *
All executive officers
and directors as a
group (18 persons) 4,450,960 5.82%
* Less than one percent (1%)
(1) Includes shares of Common Stock which may be acquired by exercise of exercisable options
granted under the Company's 1983 Incentive Stock Option Plan, the 1984 Non-Qualified Stock
Option Plan, the 1992 Incentive Stock Option Plan and the 1991 Stock Option Plan for Non-
Employee Directors and Consultants, as applicable.
(2) Includes 20,250 shares of Common Stock held of record by a family trust of which
Mr. Brinker is trustee.
(3) Includes 1,875 shares of Common Stock held of record by a family trust of which Ms. Evans
is trustee.
(4) Total shares of Common Stock held of record by a trust of which Mr. Harris 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 required
to own will be determined by such officer's position within the Company as
well as annual compensation. The guideline would require that each Senior
Vice President own an amount of Common Stock equal in value to such officer's
base salary, each Executive Vice President own an amount of Common Stock equal
in value to twice such officer's base salary, the President own an amount of
Common Stock equal in value to three times his base salary, and the Chief
Executive Officer own an amount of Common Stock equal in value to four times
his base salary. The guideline also encourages all other officers of the
Company to similarly acquire Common Stock in the Company. Phase-in of the
guideline began in October 1994 for those senior officers who did not meet the
minimum stock ownership levels as established by the guideline; senior
officers will have until December 31, 1999 to achieve the requisite level of
Common Stock ownership.
DIRECTORS
A brief description of each person nominated to become a director of the
Company is provided below. All nominees, except Gerard V. Centioli, are
currently serving as directors of the Company, each having been elected at the
last annual meeting of the Company's shareholders held on November 3, 1994.
Norman E. Brinker, 64, served as Chairman of the Board of Directors and
Chief Executive Officer of the Company from September 1983 to June 1995, with
the exception of a brief period during which Mr. Brinker was incapacitated due
to an injury. On June 28, 1995, Mr. Brinker relinquished his position as
Chief Executive Officer of the Company, but continues to serve as Chairman of
the Board of Directors. Mr. Brinker is a member of the Executive and
Nominating Committees of the Company. He was the founder of S&A Restaurant
Corp., having served as its President from February 1966 through May 1977 and
as its Chairman of the Board of Directors and Chief Executive Officer from May
1977 through July 1983. From June 1982 through July 1983, Mr. Brinker served
as Chairman of the Board of Directors and Chief Executive Officer of Burger
King Corporation, while simultaneously occupying the position of President of
The Pillsbury Company Restaurant Group. Mr. Brinker currently serves as a
member of the Board of Directors of Haggar Apparel Company.
F. Lane Cardwell, Jr., 43, was elected Executive Vice President -
Strategic Development in June 1992, having formerly held the position of
Senior Vice President - Strategic Development since December 1990.
Mr. Cardwell joined the Company as Vice President - Strategic Development in
August 1988, having been previously employed by S&A Restaurant Corp. from
November 1978 to August 1988, during which time he served as Vice President -
Strategic Planning and Senior Vice President - Strategic Planning.
Mr. Cardwell has served as a member of the Board of Directors of the Company
since September 1991.
Gerard V. Centioli, 41, was elected Senior Vice President - Maggiano's/
Corner Bakery Concepts President in August 1995. Mr. Centioli previously
served as Senior Partner of Lettuce Entertain You Enterprises, Inc. and
President and Chief Executive Officer of the Maggiano's Little Italy and The
Corner Bakery Divisions. Prior to joining Lettuce Entertain You in 1984,
Mr. Centioli served as Vice President - Division President of Collins Foods
International, Inc.
Creed L. Ford, III, 42, joined the Company's predecessor in September
1976 as an Assistant Manager and was promoted to the position of Restaurant
General Manager in March 1977. In September 1978, Mr. Ford became Director of
Operations of the Company. He was elected Vice President - Operations of the
Company in October 1983, Senior Vice President - Operations in November 1984,
and Executive Vice President - Operations in April 1986. Mr. Ford has served
as a member of the Board of Directors of the Company since April 1985.
Ronald A. McDougall, 53, was elected President and Chief Executive
Officer of the Company in June 1995 having formerly held the office of
President and Chief Operating Officer since 1986. Mr. McDougall joined the
Company in 1983 and served as Executive Vice President - Marketing and
Strategic Development until his promotion to President. Prior to joining the
Company, Mr. McDougall held senior management positions at Proctor and Gamble,
Sara Lee, The Pillsbury Company and S&A Restaurant Corp. Mr. McDougall has
served as a member of the Board of Directors of the Company since September
1983 and is a member of the Executive and Nominating Committees of the
Company. He is active in numerous civic, charitable and professional
organizations.
Debra L. Smithart, 41, joined the Company as Assistant Controller in
June 1985. In February 1986 she was promoted to the position of Controller
and served in this capacity until December 1988 when she was elected Vice
President -Controller. In March 1991, Ms. Smithart was promoted to Vice
President - Finance and held this position until September 1991 when she was
promoted to Executive Vice President - Chief Financial Officer. Prior to
joining the Company, Ms. Smithart worked in various financial/accounting
capacities in the public accounting, oil & gas, real estate, and manufacturing
industries. Ms. Smithart has served as a member of the Board of Directors of
the Company since September 1991.
Jack W. Evans, 73, is currently President of Jack Evans Investments,
Inc. and Chairman of the Board of American Title Company. Mr. Evans is a
member of the Executive, Nominating and Compensation Committees of the Company
and has served as a member of the Company's Board of Directors since September
1983. He served as Chairman, Chief Executive Officer and President of Cullum
Companies, Inc., a retail food and drugstore chain from 1977 to 1990. He
served as Mayor of the City of Dallas from May 1981 to May 1983. He is also a
director of Texas Utilities Corporation, Randall's-Tom Thumb, and Morning Star
Group.
Rae F. Evans, 46, is currently President of Rae Evans & Associates, a
firm specializing in Washington corporate strategies. From 1982 until January
1995, Mrs. Evans was the Vice President, National Affairs of Hallmark Cards,
Inc. Mrs. Evans is a member of the Nominating Committee of the Company and
has served as a member of the Board of Directors since January 1990. She is a
member of the Business-Government Relations Council and is a past president of
the organization. She is President of the Capitol Forum and a member of the
Economic Club of Washington. Mrs. Evans is also a member of the Catalyst
Board of Advisors and the National Women's Economic Alliance. Mrs. Evans
serves on the Board of Directors of Haggar Apparel Company.
J. M. Haggar, Jr., 70, retired as Chairman of the Board of Directors of
Haggar Clothing, a clothing manufacturer, in February 1995, having previously
held the positions of President and Chief Executive Officer until 1991. He is
also a director of ENSERCH Corporation. Mr. Haggar is a member of the
Executive Committee and Audit Committee of the Company and has served as a
member of the Company's Board of Directors since April 1985.
J. Ira Harris, 57, is a Managing Director with Lazard Freres & Co., LLC,
an investment banking firm, having held such position since joining the firm
in January 1988. Mr. Harris has served as a member of the Board of Directors
of the Company since September 1993 and is a member of the Audit Committee and
Compensation Committee of the Company. He was previously a General Partner of
Salomon Brothers and served as a member of its Executive Committee from 1978
to 1983. Mr. Harris serves as a Director for various entities including
Manpower, Inc. and Caremark International, Inc. He is also Trustee of
Northwestern University.
Frederick S. Humphries, 59, 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 11 years. Dr. Humphries serves as Chairman
of the State Board of Education Advisory Committee on the Education of Blacks
in Florida and is Chairman of the Board of Regents, Five-Year Working Group
for Agriculture, State of University System of Florida in addition to being
involved in various civic and community activities. Mr. Humphries has served
on the Board of Directors of the Company since May 1994 and is a member of the
Audit Committee of the Company. He is also a member of the Board of Directors
of Pride of Florida and Wal-Mart, Inc.
James E. Oesterreicher, 54, is the Vice Chairman and Chief Executive
Officer of J.C. Penney Company, Inc., having been elected to this position in
January 1995. Mr. Oesterreicher served as President of JCPenney Stores and
Catalog from 1992 to 1995 and as Executive Vice President and 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 Presbyterian Hospital of Plano,
Circle Ten Council, Boy Scouts of America, National 4-H Council and National
Organization on Disabilities. He also serves as an advisory board member for
the Center for Retailing, Education and Research at the University of Florida.
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 and Nominating Committees
of the Company.
Roger T. Staubach, 53, has been Chairman of the Board and Chief
Executive Officer of The Staubach Company, a national real estate company
specializing in tenant representation, since 1982. He has served as a member
of the Board of Directors of the Company since May 1993 and is a member of the
Executive and Compensation Committees of the Company. Mr. Staubach is a 1965
graduate of the U.S. Naval Academy and served four years in the Navy as an
officer. In 1968, he joined the Dallas Cowboys professional football team as
quarterback and was elected to the National Football League Hall of Fame in
1985. He currently serves on the Board of Directors of Halliburton Company,
First USA, Inc., Life Partners Group, American AAdvantage Funds and Columbus
Realty Trust and is active in numerous civic, charity and professional
organizations.
EXECUTIVE OFFICERS
The following persons are executive officers of the Company who are not
nominated to serve on the Company's Board of Directors:
Douglas H. Brooks, 43, joined the Company as an Assistant Manager in
February 1978 and was promoted to General Manager in April 1978. In March
1979, Mr. Brooks was promoted to Area Supervisor and in May 1982 to Regional
Director. He was again promoted in March 1987 to Senior Vice President-
Central Region Operations and to the position of Concept Head and Senior Vice
President-Chili's Operations in June 1992. Mr. Brooks was promoted to his
current position of Senior Vice President - Chili's Grill & Bar Concept
President in June 1994. Prior to joining the Company, Mr. Brooks helped
manage the first two Luther's Barbecue units.
Arthur J. DeAngelis, 41, has worked with the Company through one of its
franchise groups as a manager and later as a Company area director since 1984.
In 1991, Mr. DeAngelis joined the Company under the Grady's American Grill
concept and in June 1991 was promoted to Vice President-Operations.
Mr. DeAngelis was promoted to his current position of Senior Vice President-
Grady's American Grill Concept Head in June 1994. Mr. DeAngelis began his
restaurant career with S & A Restaurant Corp. in 1976 prior to joining the
Company.
Richard L. Federico, 41, joined the Company as Director of Operations
for Grady's in February 1989. Upon the Company's acquisition of Romano's
Macaroni Grill in November 1989, Mr. Federico became the Concept Head of this
new restaurant group. He was promoted to Vice President-Romano's Macaroni
Grill Operations in December 1990 and in June 1992 was promoted to Concept
Head and Senior Vice President-Macaroni Grill Operations. In February 1994,
Mr. Federico assumed responsibility for the operations of Spageddies Italian
Kitchen and was promoted to his current position as Senior Vice President and
Italian Concepts President in June 1994. Prior to joining the Company,
Mr. Federico worked in various management capacities with S & A Restaurant
Corp. and Houston's Restaurants and was a co-founder of Grady's Goodtimes,
predecessor to Grady's American Grill.
John C. Miller, 40, joined the Company as Vice President-Special
Concepts in September 1987. In October 1988, he was elected as Vice
President-Joint Venture/Franchise and served in this capacity until August
1993 when he was promoted to Senior Vice President-New Concept Development.
Mr. Miller was named Senior Vice President - Mexican Concepts in September
1994. Mr. Miller worked in various capacities with the Taco Bueno Division of
Unigate Restaurants prior to joining the Company.
Roger F. Thomson, 46, joined the Company as Senior Vice President,
General Counsel and Secretary in April 1993 and was promoted to Executive Vice
President, General Counsel and Secretary in March 1994 and was a Director of
the Company from 1993 until 1995. From 1988 until April 1993, Mr. Thomson
served as Senior Vice President, General Counsel and Secretary for Burger King
Corporation. Prior to 1988, Mr. Thomson spent ten years at S & A Restaurant
Corp. where he was Executive Vice President, General Counsel and Secretary.
Classes of Directors
For purposes of determining whether non-employee directors will be
nominated for reelection to the Board of Directors, the non-employee directors
have been divided into four classes. Each non-employee director will continue
to be subject to reelection by the shareholders of the Company each year.
However, after a non-employee director has served on the Board of Directors
for four years, such director shall be deemed to have been advised by the
Nominating Committee that he or she will not stand for reelection at the
subsequent annual meeting of shareholders and shall be considered a "Retiring
Director". Notwithstanding this policy, the Nominating Committee may
determine that it is appropriate to renominate any or all of the Retiring
Directors after first considering the appropriateness of nominating new
candidates for election to the Board of Directors. The four classes of non-
employee directors are as follows: Mr. Haggar comprises Class 3 and will be
considered a Retiring Director as of the annual meeting of shareholders
following the end of the 1996 fiscal year. Messrs. Harris and Staubach
comprise Class 4 and will be considered Retiring Directors as of the annual
meeting of shareholders following the end of the 1997 fiscal year. Messrs.
Evans, Humphries, and Oesterreicher and Ms. Evans comprise Class 1 and will be
considered Retiring Directors as of the annual meeting of shareholders
following the end of the 1998 fiscal year. Messrs. Ray L. Hunt and William F.
Regas comprise Class 2 and are considered Retiring Directors as of the annual
meeting of shareholders on November 2, 1995.
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,
Evans, Haggar and Staubach) met three (3) times during the fiscal year and has
authority to act for the Board on most matters during the intervals between
Board meetings.
All of the members of the Audit and Compensation Committees are
directors independent of management who are not and never have been officers
or employees of the Company. The Audit Committee is currently comprised of
Messrs. Haggar, Harris, Humphries and Oesterreicher and the Committee met one
(1) time during the fiscal year. Included among the functions performed by
the Audit Committee are: the review with independent auditors of the scope of
the audit and the results of the annual audit by the independent auditors;
consideration and recommendation to the Board of the selection of the
independent auditors for the next year; the review with management and the
independent auditors of the annual financial statements of the Company; and
the review of the scope and adequacy of internal audit activities.
The Compensation Committee is currently comprised of Messrs. Evans,
Harris, Hunt and Staubach and it met five (5) times during the fiscal year.
Functions performed by the Compensation Committee include: ensuring the
effectiveness of senior management and management continuity, ensuring the
reasonableness and appropriateness of senior management compensation
arrangements and levels, the adoption, amendment and administration of stock-
based incentive plans (subject to shareholder approval where required),
management of the various stock option plans of the Company, approval of the
total number of available shares to be used each year in stock-based plans,
approval of the adoption and amendment of significant compensation plans and
approval of all compensation actions for officers, particularly at and above
the level of executive vice president. The specific nature of the Committee's
responsibilities as it relates to executive officers are set forth below under
"Report of the Compensation Committee."
The purpose of the Nominating Committee is to recommend to the Board of
Directors potential non-employee members to be added as new or replacement
members to the Board of Directors. The Nominating Committee met one (1) time
during the fiscal year and is composed of Messrs. Brinker, Evans, McDougall,
and Oesterreicher and Mrs. Evans.
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 (unless such committee meeting is
held in conjunction with a meeting of the Board of Directors, in which event
compensation for attending the committee meeting will be $750). The Company
also reimburses directors for costs incurred by them in attending meetings of
the Board.
Directors who are not employees of the Company receive grants of stock
options under the Company's 1991 Stock Option Plan for Non-Employee Directors
and Consultants. New directors who are not employees of the Company will have
the option at the beginning of each Director term to receive as additional
compensation for serving on the Board of Directors either an annual cash
payment of $30,000 during the term such non-employee serves as a director, a
one-time grant of 12,000 stock options under the Company's 1991 Stock Option
Plan for Non-Employee Directors and Consultants, or a combination of cash and
stock options. If the 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 the director elects to receive cash, the first
payment will be made at such Board of Directors meeting and the following
payments will be made on the date of each annual meeting of shareholders
thereafter. If the director elects to receive stock options, they will be
granted as of the 60th day following such meeting (or if the 60th day is not a
business day, on the first business day thereafter). The stock options will be
granted at the fair market value on the date of grant. One-third of the
options will vest on each of the second, third and fourth anniversaries of the
date of grant.
If a Retiring Director is renominated to serve on the Board of Directors
for an additional four-year period, such Retiring Director will be treated as
a new director for purposes of determining compensation during such additional
four-year period.
During the year ended June 28, 1995, the Board of Directors held six (6)
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.
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 1995.
Summary Compensation Table
Long-Term Compensation
Awards Payouts
Securities Long-Term
Name and Annual Compensation Underlying Incentive All Other
Principal Position Year Salary Bonus Options (2) Payouts Compensation (3)
Norman E. Brinker(1) 1995 $ 699,038 $ 339,558 125,000 $ 86,565 $ 37,489
Chairman of the 1994 $ 659,135 $ 706,592 202,500 $ 93,940 $ 26,439
Board and Chief 1993 $ 573,708 $ 753,887 225,000 $ 93,940 $ 6,904
Executive Officer
Ronald A. McDougall 1995 $ 574,038 $ 278,839 125,000 $ 86,565 $ 50,555
President and Chief 1994 $ 529,327 $ 567,439 202,500 $ 93,940 $ 22,547
Operating Officer 1993 $ 444,538 $ 585,842 225,000 $ 93,940 $ 2,729
Creed L. Ford, III 1995 $ 359,615 $ 130,361 30,000 $ 63,481 $ 8,795
Executive Vice 1994 $ 343,942 $ 275,154 56,250 $ 68,889 $ 7,305
President-Operations 1993 $ 306,692 $ 309,847 67,500 $ 68,889 $ 1,814
Debra L. Smithart 1995 $ 264,038 $ 95,714 30,000 $ 63,481 $ 11,805
Executive Vice 1994 $ 232,500 $ 186,000 56,250 $ 50,101 $ 5,471
President and Chief 1993 $ 183,309 $ 186,640 67,500 $ 31,313 $ -0-
Financial Officer
Douglas H. Brooks 1995 $ 266,249 $ 77,212 30,000 $ 40,397 $ 15,636
Senior Vice 1994 $ 232,884 $ 135,772 45,000 $ 43,839 $ 12,582
President-Chili's 1993 $ 206,231 $ 174,199 38,250 $ 43,839 $ 2,475
Grill & Bar Operations
(1) Effective June 29, 1995, the beginning of the Company's 1996 fiscal year, Mr. Brinker
relinquished his position as Chief Executive Officer and Mr. McDougall was elected
President and Chief Executive Officer.
(2) Stock options awarded have been restated to reflect the March 1994 and May 1993 stock
splits effected in the form of 50% stock dividends.
(3) All other compensation represents Company match on deferred compensation.
Option Grants During 1995 Fiscal Year
The following table contains certain information concerning the grant of
stock options to the executive officers named in the above compensation table
during the Company's last fiscal year:
Realizable Value
of Assumed Annual Rates
of Stock Price Appreciation
for Option Term (1)
Name Granted Fiscal Year Base Price Date 5% 10%
Norman E. Brinker 125,000 9.69% $16.50 12/05/2004 $ 1,297,095 $ 3,287,094
Ronald A. McDougall 125,000 9.69% $16.50 12/05/2004 $ 1,297,095 $ 3,287,094
Creed L. Ford, III 30,000 2.33% $16.50 12/05/2004 $ 311,303 $ 788,903
Debra L. Smithart 30,000 2.33% $16.50 12/05/2004 $ 311,303 $ 788,903
Douglas H. Brooks 30,000 2.33% $16.50 12/05/2004 $ 311,303 $ 788,903
(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. The Company
did not use an alternative formula for a grant date valuation, as the Company is not aware
of any formula which will determine with reasonable accuracy a present value based on
future unknown or volatile factors.
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 $17.38 fiscal year-end price of the Company's Common Stock.
Shares Value of Unexercised
Acquired Number of Unexercised In-the-Money Options at
On Value Options at Fiscal Year End Fiscal Year End
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Norman E. Brinker -0- -0- 618,750 440,000 $ 3,073,275 $ 109,375
Ronald A. McDougall -0- -0- 375,000 440,000 1,207,665 109,375
Creed L. Ford, III -0- -0- 790,644 120,000 8,615,849 26,250
Debra L. Smithart -0- -0- 95,350 120,000 3,973,669 26,250
Douglas H. Brooks -0- -0- 370,603 94,125 234,568 26,250
Long-Term Executive Profit Sharing Plan and Awards
Executives of the Company participate in the Long-Term Executive Profit
Sharing Plan. See "Report of the Compensation Committee -- Long-Term
Incentives" for more information regarding this plan. The following table
represents awards granted in the last fiscal year under the Long-Term
Executive Profit Sharing Plan.
Number of Estimated Future Payouts
Name Units Awarded Under Non-Stock Based Plans
(Dollars)
Threshold Target Maximum
Norman E. Brinker 1,000 $66,667 $100,000 *
Ronald A. McDougall 1,000 $66,667 $100,000 *
Creed L. Ford, III 600 $40,000 $ 60,000 *
Debra L. Smithart 600 $40,000 $ 60,000 *
Douglas H. Brooks 500 $33,333 $ 50,000 *
* There is no maximum future payout under the Long-Term Executive Profit Sharing Plan.
REPORT OF THE COMPENSATION COMMITTEE
Compensation Philosophy
The executive compensation program is designed as a tool to reinforce
the Company's strategic principles -- to be a premier and progressive growth
company with a balanced approach towards people, quality and profitability and
to enhance long-term shareholder value. To this end, the following principles
have guided the development of the executive compensation program:
Provide competitive levels of compensation to attract and retain the
best qualified executive talent. The Committee strongly believes that
the caliber of the Company's management group makes a significant
difference in the Company's sustained success over the long term.
Embrace a pay-for-performance philosophy by placing significant amounts
of compensation "at risk" -- that is, compensation payouts to executives
must vary according to the overall performance of the Company.
Directly link executives' interests with those of shareholders, by
providing opportunities for long-term incentive compensation based on
changes in shareholder value.
The executive compensation program is intended to appropriately balance
the Company's short-term operating goals with its long-term strategy through a
careful mix of base salary, annual cash incentives and long-term performance
compensation including cash incentives and incentive stock options.
Base Salaries
Executives' base salaries are targeted to be competitive at the 75th
percentile of the market for positions of similar responsibility and scope at
the Vice President and Senior Vice President levels and, to reflect the
exceptionally high level of executive talent required to execute the growth
plans of the Company, at the 90th percentile of the market for Chief Executive
Officer, President and Executive Vice Presidents. Positioning executives'
base salaries at these levels is needed for attracting, retaining and
motivating executives with the essential qualifications for managing the
Company's growth. The Company defines the relevant labor market for such
executive talent through the use of reliable executive salary surveys that
reflect both the chain restaurant industry as well as a broader cross-section
of high growth companies from many industries. Individual base salary levels
are determined by considering each officer's level of responsibility,
performance, experience, and tenure. The overall amount of base salary
increases awarded to executives reflects the financial performance of the
Company, individual performance and potential, and/or changes in an officer's
duties and responsibilities.
Annual Incentives
The Company's Profit Sharing Plan is a non-qualified annual incentive
arrangement in which all Dallas-based corporate employees, including
executives, participate. The program is designed to reflect employees'
contribution to the growth of the Company's common stock value by increasing
the earnings of the Company. The plan reinforces a strong teamwork ethic by
making the basis for payouts to executives the same as for all other Company
employees.
Each executive is assigned an Individual Participation Percentage
("IPP") which is tied to the base salary for such executive and targets
overall total cash compensation for executives between the 75th and 90th
percentiles of the market. The IPPs reflect the Committee's desire that a
significant percentage of executives total compensation be derived from
variable pay programs.
401(k) Savings Plan and Savings Plan II
On January 1, 1993, the Company implemented the 401(k) Savings Plan
("Plan I") and Savings Plan II ("Plan II"). These Plans are designed to
provide the Company's salaried employees with a tax-deferred long-term savings
vehicle. The Company provides a matching contribution equal to 25% of a
participant's contribution, up to a maximum of 5% of participant's
compensation.
Plan I is a qualified 401(k) plan. Participants in Plan I elect the
percentage of pay they wish to contribute as well as the investment
alternatives in which their contributions are to be invested. The Company's
matching contribution for all Plan I participants is made in Company common
stock. All participants in Plan I are considered non-highly compensated
employees as defined by the Internal Revenue Service. Participants'
contributions vest immediately while Company contributions vest 25% annually,
beginning in the participant's second year of eligibility since Plan
inception.
Plan II is a non-qualified deferred compensation plan. Plan II
participants elect the percentage of pay they wish to defer into their Plan II
account. They also elect the percentage of their deferral account to be
invested into various investment funds. The Company's matching contribution
for all non-officer Plan II participants is made in Company common stock, with
corporate officers receiving a Company match in cash. Participants in Plan II
are considered highly compensated employees according to the Internal Revenue
Service. A participant's contributions vest immediately while Company
contributions vest 25% annually, beginning in the participant's second year of
eligibility since Plan II inception.
Long-Term Incentives
All salaried employees of the Company, including executives, are
eligible for annual grants of tax-qualified stock options. By tying a
significant portion of executives' total opportunity for financial gain to
increases in shareholder wealth as reflected by the market price of the
Company's common stock, executives' interests are closely aligned with
shareholders' long-term interests. In addition, because the Company does not
maintain any qualified retirement programs for executives, the stock option
plan is intended to provide executives with opportunities to accumulate wealth
for later retirement.
Stock options are rights to purchase shares of the Company's Common
Stock at the fair market value on the date of grant. Grantees do not receive
a benefit from stock options unless and until the market price of the
Company's common stock increases. Fifty-percent (50%) of a stock option grant
becomes exercisable two years after the grant date; the remaining 50% of a
grant becomes exercisable three years after the grant date.
The number of stock options granted to an executive is based on grant
guidelines that reflect an officer's position within the Company. The
Compensation Committee reviews and approves grant amounts for executives.
Executives also participate in the Long-Term Executive Profit Sharing
Plan, a non-qualified long-term performance cash plan. This plan provides an
additional mechanism for focusing executives on the sustained improvement in
operating results over the long term. This is a performance-related plan
using overlapping three-year cycles paid annually. Performance units (valued
at $100 each) are granted to individuals and paid in cash based upon the
Company's attainment of predetermined performance objectives. Long-term
operating results are measured by evaluating both pre-tax net income (weighted
70%) and changes in shareholders' equity (weighted 30%) over three-year
cycles.
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. Brinker's
compensation package according to the guidelines discussed in the preceding
sections. Mr. Brinker was awarded a 7.4% base salary increase, effective
January 1, 1995, 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. During the 1995 fiscal
year, Mr. Brinker's incentive payout under the Annual Profit Sharing Plan was
72.5% of his target, reflecting the Company's short-fall from plan.
Mr. Brinker was granted 1,000 units under the Long-Term Executive Profit
Sharing Plan for the cycle which includes fiscal years 1995, 1996, and 1997.
Mr. Brinker was also awarded a grant of 125,000 stock options under the
Company's stock option plan. Approximately 53% of Mr. Brinker's compensation
for 1995 was incentive pay. Like all Company executives, Mr. Brinker's
compensation is significantly affected by the Company's performance. In the
1995 fiscal year, Mr. Brinker's total compensation declined 22% from its
level in the 1994 fiscal year.
On June 29, 1995, Ronald A. McDougall was named Chief Executive Officer
and President of the Company and Mr. Norman Brinker was named Chairman of the
Board of the Company. Mr. Brinker has 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 current compensation.
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 payments shall be made pursuant to this agreement.
Upon the expiration of the agreement described above, Mr. Brinker will
remain a consultant to the Company through the 2021 fiscal year. Mr. Brinker
will be compensated commensurate with his continuing contributions to the
Company; however, during this time, he will no longer participate in any of
the Company's profit sharing plans or benefit programs. Upon Mr. Brinker's
death, retirement or termination for cause, no further payments 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 a year until the earlier of July 1, 2021 or
his death.
Federal Income Tax Considerations
The Compensation Committee has considered the potential 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 will continue to monitor the impact of such
limitations on tax deductions and will take other appropriate actions if
warranted in the future.
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 continued strong financial
performance supports the compensation practices employed during the past year.
Respectfully submitted,
COMPENSATION COMMITTEE
JACK W. EVANS, SR.
J. IRA HARRIS
RAY L. HUNT
ROGER T. STAUBACH
FIVE-YEAR TOTAL SHAREHOLDER RETURN COMPARISON
The following is a line graph presentation comparing cumulative, five-
year total shareholder returns on an indexed basis with the S&P 500 Index and
the S&P Restaurant Industry Index. A list of the indexed returns follows the
graph.
[GRAPH INCLUDED IN SUPPLEMENTAL FILED COPY]
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.
1990 1991 1992 1993 1994 1995
Brinker International 100.00 158.28 204.85 318.90 293.30 240.92
S&P 500 100.00 107.40 121.80 138.40 140.35 176.94
S&P Restaurants 100.00 97.10 132.59 143.92 166.52 219.00
STOCK OPTIONS
In 1992, the Shareholders of the Company adopted the 1992 Incentive
Stock Option Plan ("Plan"). See "Amendment of Stock Option Plans - 1992
Incentive Stock Option Plan" below for a more detailed description of the
Plan.
In 1991, the Shareholders of the Company adopted the 1991 Stock Option
Plan for Non-Employee Directors and Consultants (the "1991 Plan"). The 1991
Plan originally permitted the issuance of 100,000 shares of Common Stock,
which amount was increased to 337,500 shares of Common Stock as the result of
three stock splits, effected in the form of 50% stock dividends.
The 1991 Plan is designed to permit the granting of options to purchase
Common Stock to directors of the Company who are not employees of the Company
or its subsidiaries and to certain consultants and advisors. The purpose of
the 1991 Plan is to provide such directors, consultants and advisors with a
proprietary interest in the Company through the granting of options which will
increase their interest in the Company's welfare, furnish them an incentive to
continue their services for the Company and provide a means through which the
Company may attract able persons to serve on its Board of Directors and act as
consultants or advisors.
The exercise price of options is payable in cash or, if an option
agreement so provides, the holder of an option may request approval from the
Company to exercise an option or a portion thereof by tendering shares of
Common Stock at the fair market value per share on the date of exercise in
lieu of cash payment of the exercise price.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's directors
and executive officers, and persons who own more than ten percent of the
Company's Common Stock are required to report their initial ownership of the
Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates have been established
for these reports and the Company is required to disclose in this proxy
statement, any failure to file by these dates. Through an inadvertent
omission there was one late filing on behalf of each of Messrs. McDougall
and Oesterreicher (each of which relates to a purchase of the Company's Common
Stock) and Mr. William F. Regas (relating to the disposition of indirectly
owned Common Stock of the Company) during the 1995 fiscal year. Except as set
forth herein, the Company believes that all filing requirements were
satisfied. In making these disclosures and filing of the reports, the Company
has relied solely on written representations from certain reporting persons.
CERTAIN TRANSACTIONS
The policy of the Company is, to the extent practicable, to avoid
transactions (except those which are employment related) with officers,
directors, and affiliates. In any event, any such transactions will be
entered into on terms no less favorable to the Company than could be obtained
from third parties, and such transactions will be approved by a majority of
the disinterested directors of the Company. Except for the transactions
described above under "Report of the Compensation Committee - CEO
Compensation" there were no transactions required to be reported in the last
fiscal year.
AMENDMENT OF 1992 INCENTIVE STOCK OPTION PLAN
To strengthen the Company's ability to attract and retain key employees
and to furnish additional incentives to such persons by encouraging them to
become owners of Common Stock, the Board of Directors and the shareholders of
the Company adopted the Plan in 1992. The Plan initially covered the issuance
of up to 1,500,000 shares of Common Stock, which amount was increased to
3,375,000 shares of Common Stock as the result of two stock splits, effected
in the form of 50% stock dividends. In May 1995, the Board of Directors of
the Company, relying upon the recommendation of the Compensation Committee of
the Board of Directors, approved an amendment to the Plan increasing the
number of shares of Common Stock which may be issued under the Plan from
3,375,000 to 5,375,000. At the Annual Meeting, the shareholders of the
Company are being asked to approve such amendment.
As of June 28, 1995, options to purchase an aggregate of 2,757,062
shares of Common Stock had been granted pursuant to the Plan and 617,938
shares remain available for future grant. As of June 28, 1995, the market
value of all shares of Common Stock subject to outstanding options granted
pursuant to the Plan was $47,909,165 (based upon the closing sale price of
Common Stock as reported on the New York Stock Exchange on such date). As of
June 28, 1995, Norman E. Brinker, Ronald A. McDougall, Creed L. Ford, III,
Debra L. Smithart and Douglas H. Brooks had been granted options covering an
aggregate of 327,500; 327,500; 86,250; 86,250 and 75,000 shares of Common
Stock pursuant to the Plan, respectively. Since adoption of the Plan in 1992,
all current executive officers, as a group, have been granted 1,214,500
options covering shares of Common Stock pursuant to the Plan.
Summary of the Plan
The Plan is designed to permit the granting of options to all employees
of the Company and its subsidiaries (for which there were approximately 37,500
employees as of June 28, 1995), although the Company has historically granted
options only to salaried employees. The administration of the Plan is
provided by the Compensation Committee which has the authority to determine
the terms on which options are granted under the Plan. The Compensation
Committee determines the number of options to be granted to eligible
participants, determines the purchase price and option period at the time the
option is granted, and administers and interprets the Plan.
The exercise price of options is payable in cash or the holder of an
option may request approval from the Compensation Committee to exercise an
option or a portion thereof by tendering shares of Common Stock at the fair
market value per share on the date of exercise in lieu of cash payment of the
exercise price.
Unless sooner terminated by action of the Board of Directors, the Plan
will terminate on September 7, 2002, and no options may thereafter be granted
under the Plan. The Plan may be amended, altered or discontinued by the
Compensation Committee without the approval of the shareholders, except that
the Compensation Committee does not have the power or authority to materially
increase the benefits accruing to participants under the Plan, materially
change the participants or class of participants who are eligible to receive
options, or materially increase the aggregate number of shares that may be
issued under the Plan. The Compensation Committee, however, may make
appropriate adjustments in the number of shares covered by the Plan, the
number of outstanding options, and the option prices, to reflect any stock
dividend, stock split, share combination, merger, consolidation,
reorganization, liquidation or the like, of or by the Company.
Both incentive stock options ("ISOs") and non-qualified stock options
may be granted under the Plan. The Plan requires that the exercise price of
each ISO will not be less than 100% of the fair market value of the Common
Stock on the date of the grant of the option. No ISO, however, may be granted
under the Plan to anyone who owns more than 10% of the outstanding Common
Stock unless the exercise price is at least 110% of the fair market value of
the Common Stock on the date of grant and the option is not exercisable more
than five years after it is granted. There is no limit on the fair market
value of ISOs that may be granted to an employee in any calendar year, but no
employee may be granted ISOs that first become exercisable during a calendar
year for the purchase of stock with an aggregate fair market value (determined
as of the date of grant of each option) in excess of $100,000 and no employee
may be granted more than 20% of the total options granted in a calendar year.
An option (or an installment thereof) counts against the annual limitation
only in the year it first becomes exercisable.
Tax Status of Stock Options
Pursuant to the Plan, the Compensation Committee may provide for an
option to qualify either as an "ISO" or as a "non-qualified option."
Incentive Stock Options. All stock options that qualify under the rules
of Section 422 of the Internal Revenue Code, will be entitled to ISO
treatment. To receive ISO treatment, an optionee is not permitted to dispose
of the acquired stock (i) within two years after the option is granted or (ii)
within one year after exercise. In addition, the individual must have been an
employee of the Company for the entire time from the date of granting of the
option until three months (one year if the employee is disabled) before the
date of the exercise. The requirement that the individual be an employee and
the two-year and one-year holding periods are waived in the case of death of
the employee. If all such requirements are met, no tax will be imposed upon
exercise of the option, and any gain upon sale of the stock will be entitled
to capital gain treatment. The employee's gain on exercise (the excess of
fair market value at the time of exercise over the exercise price) of an ISO
is a tax preference item and, accordingly, is included in the computation of
alternative minimum taxable income.
If an employee does not meet the two-year and one-year holding
requirement (a "disqualifying disposition"), but does meet all other
requirements, tax will be imposed at the time of sale of the stock, but the
employee's gain on exercise will be treated as ordinary income rather than
capital gain and the Company will receive a corresponding deduction at the
time of sale. Any remaining gain on sale will be short-term and long-term
capital gain, depending on the holding period of the stock. If the amount
realized on the disqualifying disposition is less than the value at the date
of exercise, the amount includable in gross income, and the amount deductible
by the Company, will equal the excess of the amount realized on the sale or
exchange over the exercise price.
An optionee's stock option agreement may permit payment for stock upon
the exercise of an ISO to be made with other shares of Common Stock. In such
a case, in general, if an employee uses stock acquired pursuant to the
exercise of an ISO to acquire other stock in connection with the exercise of
an ISO, it may result in ordinary income if the stock so used has not met the
minimum statutory holding period necessary for favorable tax treatment as an
ISO.
Non-Qualified Stock Options. In general, no taxable income will be
recognized by the optionee, and no deduction will be allowed to the Company,
upon the grant of an option. Upon exercise of a non-qualified option an
optionee will recognize ordinary income (and the Company will be entitled to a
corresponding tax deduction if applicable withholding requirements are
satisfied) in an amount equal to the amount by which the fair market value of
the shares on the exercise date exceeds the option price. Any gain or loss
realized by an optionee on disposition of such shares generally is a capital
gain or loss and does not result in any tax deduction to the Company.
Internal Revenue Code Section 162(m). Under Section 162(m) of the
Internal Revenue Code, a limitation was placed on tax deductions of any
publicly-held corporation for individual compensation to certain executives of
such corporation exceeding $1,000,000 in any taxable year, unless compensation
is performance-based. It is intended that the Plan meet the performance-based
compensation exception to the limitation on deductions.
Amendments
The Plan provides for the issuance of up to 3,375,000 shares of Common
Stock, which amount may be adjusted to reflect any stock dividend, stock
split, share combination, recapitalization, or the like, of or by the Company.
The Board of Directors recommends that the shareholders vote in favor of
amending the Plan to allow the issuance of up to 5,375,000 shares of Common
Stock, which amount may be adjusted to reflect any stock dividend, stock
split, share combination, recapitalization, or the like, of or by the Company.
The Board of Directors believes this to be in the best interest of the Company
as having shares available to be issued under the Plan will strengthen the
Company's ability to attract and retain key employees and furnish additional
incentives to such persons by encouraging them to become owners of Common
Stock of the Company.
Required Vote
The favorable vote of the holders of a majority of the shares of Common
Stock present and entitled to vote at the Annual Meeting in person or by proxy
is required to approve the proposed amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THIS
PROPOSAL TO AMEND THE PLAN.
SHAREHOLDERS' PROPOSALS
Any proposals that shareholders of the Company desire to have presented
at the 1996 annual meeting of shareholders must be received by the Company at
its principal executive offices no later than May 28, 1996.
INDEPENDENT AUDITORS
Representatives of KPMG Peat Marwick, LLP, independent certified public
accountants and auditors of the Company's financial statements, are expected
to be present at the meeting with the 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, 1995, 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 26, 1995
