Exhibit 10(a)
BRINKER INTERNATIONAL
PERFORMANCE SHARE PLAN DESCRIPTION
Purpose
Pursuant to Section 3 of The Brinker
International, Inc. Stock Option and Incentive Plan
(“SOIP”), as approved by the shareholders of the
Company on October 20, 2005, the Committee may grant stock awards
subject to such conditions, restrictions and contingencies as the
Committee may determine. The Brinker International Performance
Share Plan (the “Plan”) is adopted pursuant to the
Committee’s authority under the SOIP to provide greater
incentive to officers and key employees of Brinker International,
Inc. (“Brinker” or the “Company”) or any of
its affiliates to achieve the highest level of individual
performance and to meet or exceed specified goals which will
contribute to the success of the Company.
Definitions
For purposes of the Plan, the following
definitions will control:
“Affiliate” is defined as a
subsidiary of Brinker or any entity that is designated by the
Committee as a participating employer under the Plan, provided that
Brinker directly or indirectly owns at least 20% of the combined
voting power of the common stock of such entity.
“Change in
Control” is defined as:
(i)
a sale, transfer or other conveyance
of all or substantially all of the assets of the Company on a
consolidated basis; or
(ii)
the acquisition of beneficial
ownership (as such term is defined in Rule 13d-3 promulgated under
the Securities and Exchange Act of 1934, as amended (the
“Exchange Act”)) by any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Company, directly or indirectly, of securities
representing 50% or more of the total number of votes that may be
cast for the election of directors of the Company; or
(iii)
the failure at any annual or special
meetings of the Company’s shareholders held during the
three-year period following a “solicitation in
opposition” as defined in Rule 14a-6 promulgated under the
Exchange Act, of a majority of the persons nominated by the Company
in the proxy material mailed to shareholders by the management of
the Company to win election to seats on the board of directors
(such majority calculated based upon the total number of persons
nominated by the Company failing to win election to seats on the
Board divided by the total number of Board members of the Board as
of the beginning of such three year period), excluding only those
who die, retire voluntarily, are disabled or are otherwise
disqualified in the interim between their nomination and the date
of the meeting.
1
“Committee” is defined as the
Compensation Committee, or its successor, of the Company’s
Board of Directors.
“Comparative Group” is defined as
Brinker and such other companies as designated by the
Commitee.
“Measurement Period” is defined as a
consecutive three fiscal year period, or such other period as the
Committee shall designate prior to making an award pursuant to the
Plan, beginning on the date described in the applicable award
letter, except in the event of a Change in Control, in which case
the Measurement Period shall end on the effective date of the
Change in Control.
“Total Shareholder Return (TSR)” is
defined as the rate of return reflecting stock price appreciation
plus the amount of cash dividends paid during the Measurement
Period. The average Daily Closing Stock Price (adjusted for splits
and dividends) for each company in the Comparative Group for the 90
calendar days prior to the beginning and ending points of the
Measurement Period will be used to smooth out market
fluctuations.
“Daily Closing Stock Price” is
defined as the stock price at the close of trading of the National
Exchange on which the stock is traded.
“National Exchange” is defined as
the New York Stock Exchange (NYSE), the National Association of
Stock Dealers and Quotes (NASDAQ), or the American Stock Exchange
(AMEX), or a generally recognized successor-in-interest if any such
exchange no longer exists.
“Performance Share” is defined as
the right to receive a share of Common Stock of the Company upon
satisfaction of any performance metrics and/or other requirements
established by the Committee.
Accumulation of Performance
Shares
A Participant shall receive an award
(“Award”) of a target number of Performance Shares. The
target number of Performance Shares awarded to each Participant
shall be determined by (a) the Committee and (b) the terms and
conditions of the applicable award letter provided to the
Participant by the Committee. The final number of shares issued to
individual participants as payout for vested Performance Shares is
determined by (i) the Company’s TSR rank within the
Comparative Group at the end of a Measurement Period and (ii) the
terms and conditions of the applicable award letter. The
distribution percentage of target Performance Shares, based on
rank, shall be as designated by the Committee taking into account
that there will be no payout if the Company’s rank is at or
near the bottom of the Comparative Group.
2
In the event that the Company’s TSR over
the Measurement Period is a negative number, the payout percentage
as set by the Committee shall be reduced by 20 percent, regardless
of the Company’s rank within the Comparative
Group.
Vesting of Performance
Shares
Participants who are vested
in their Performance Shares wil
