EXHIBIT 10(c)
BRINKER INTERNATIONAL, INC.
1992 INCENTIVE STOCK OPTION PLAN
Brinker International, Inc., a Delaware corporation (the
"Company"), hereby adopts the following plan, as approved by the
Company's stockholders:
1. PURPOSE. The purpose of the Plan is to provide
employees with a proprietary interest in the Company through the
granting of options which will
(a) increase the interest of the employees in the
Company's welfare;
(b) furnish an incentive to the employees to
continue their services for the Company; and
(c) provide a means through which the Company may
attract able persons to enter its employ.
2. ADMINISTRATION. The Plan will be administered by the
Committee.
3. PARTICIPANTS. The Committee shall, from time to time,
select the particular employees of the Company and its
Subsidiaries to whom options are to be granted, and who will,
upon such grant, become participants in the Plan.
4. STOCK OWNERSHIP LIMITATION. No Incentive Option may be
granted to an employee who owns more than 10% of the voting power
of all classes of stock of the Company or its Parent or
Subsidiaries. This limitation will not apply if the option price
is at least 110% of the fair market value of the stock at the
time the Incentive Option is granted and the Incentive Option is
not exercisable more than five years from the date it is granted.
5. SHARES SUBJECT TO PLAN. The Committee may not grant
options under the Plan for more than 7,875,000 shares of Common
Stock of the Company, but this number may be adjusted to reflect,
if deemed appropriate by the Committee, any stock dividend, stock
split, share combination, recapitalization or the like, of or by
the Company. Shares to be optioned and sold may be made
available from either authorized but unissued Common Stock or
Common Stock held by the Company in its treasury. Shares that by
reason of the expiration of an option or otherwise are no longer
subject to purchase pursuant to an option granted under the Plan
may be re-offered under the Plan.
6. LIMITATION ON AMOUNT. The aggregate fair market value
(determined at the time of grant) of the shares of Common Stock
which any employee is first eligible to purchase in any calendar
year by exercise of Incentive Options granted under this Plan and
all incentive stock option plans (within the meaning of
Section 422A of the Internal Revenue Code) of the Company or its
Parent or Subsidiaries shall not exceed $100,000. For this
purpose, the fair market value (determined at the respective date
of grant of each option) of the stock purchasable by exercise of
an Incentive Option (or an installment thereof) shall be counted
against the $100,000 annual limitation for an employee only for
the calendar year such stock is first purchasable under the terms
of the option. The maximum number of shares with respect to
which options may be granted pursuant to the Plan to any
individual employee during any fiscal year of the Company may in
no event exceed 500,000.
7. ALLOTMENT OF SHARES. The Committee shall determine the
number of shares of Common Stock to be offered from time to time
by grant of options to employees of the Company or its
Subsidiaries. The grant of an option to an employee shall not be
deemed either to entitle the employee to, or to disqualify the
employee from, participation in any other grant of options under
the Plan. No participant may receive in any calendar year in
excess of twenty percent (20%) of the options granted in such
calendar year.
8. GRANT OF OPTIONS. The Committee is authorized to grant
Incentive Options and Nonqualified Options under the Plan
(additionally, the Board may grant nonqualified options outside
of the Plan as determined in its discretion). The grant of
options shall be evidenced by stock option agreements containing
such terms and provisions as are approved by the Committee, but
not inconsistent with the Plan, including provisions that may be
necessary to assure that any option that is intended to be an
Incentive Option will comply with Section 422A of the Internal
Revenue Code. The Company shall execute stock option agreements
upon instructions from the Committee.
9. OPTION PRICE. The option price for any option granted
pursuant to this Plan shall not be less than one hundred percent
(100%) of the fair market value per share of the Common Stock on
the date the option is granted. The Committee shall determine
the fair market value of the Common Stock on the date of grant,
and shall set forth the determination in its minutes, using any
reasonable valuation method.
10. OPTION PERIOD. The Option Period will begin on the
date the option is granted, which will be the date the Committee
authorizes the option unless the Committee specifies a later
date. No option may terminate later than ten years from the date
the option is granted. The Committee may provide for the
exercise of options in installments and upon such terms,
conditions and restrictions as it may determine. The Committee
may provide for termination of the option in the case of
termination of employment or any other reason.
11. RIGHTS IN EVENT OF DEATH OR DISABILITY. If a
participant dies or becomes disabled (within the meaning of
Section 22(e)(3) of the Internal Revenue Code) prior to
termination of his right to exercise an option in accordance with
the provisions of his stock option agreement without totally
having exercised the option, the option may be exercised subject
to the provisions of Paragraph 13 hereof, by (i) the
participant's estate or by the person who acquired the right to
exercise the option by bequest or inheritance, or (ii) by reason
of death of the participant.
12. PAYMENT. Full payment for shares purchased upon
exercising an option shall be made in cash or by check at the
time of exercise, or on such other terms as are set forth in the
applicable option agreement. No shares may be issued until full
payment of the purchase price therefor has been made, and a
participant will have none of the rights of a stockholder until
shares are issued to him.
13. EXERCISE OF OPTION. Options granted under the Plan may
be exercised during the Option Period, at such times, in such
amounts, in accordance with such terms and subject to such
restrictions and vesting requirements as are determined by the
Committee and set forth in the applicable stock option
descriptions. If the employment of an officer of the Company is
terminated for reason other than for cause, such officer will be
permitted to exercise stock options which were fully vested as of
the date of termination in accordance with the following
schedule, but in no event may such options be exercised later
than ten (10) years from the date of the original grant of the
stock option:
Level Exercise Period
President and Executive Vice 36 months from date of
President termination, with no more than
one-third of the total number
of stock options being
exercisable during the first 12
months and no more than two-
thirds of the total number of
stock options being exercisable
during the first 24 months
Senior Vice President 24 months from date of
termination, with no more than
one-third of the total number
of stock options being
exercisable during the first 8
months and no more than two-
thirds of the total number of
stock options being exercisable
during the first 16 months
Vice President 12 months from date of
termination, with no more than
one-third of the total number
of stock options being
exercisable during the first 4
months and no more than two-
thirds of the total number of
stock options being exercisable
during the first 8 months
In the event a key operations employee of the Company leaves the
Company to join a franchisee of the Company, then the Chief
Executive Officer of the Company, in his sole discretion, may
extend the exercise period for stock options that are fully
vested at the time of termination of employment with the Company
from ninety (90) days to a time period not to exceed twenty-four
(24) months (the "Extension"); provided, however, that if the
employment of such key operations employee is subsequently
terminated by such franchisee "for cause" (as defined below),
such options shall immediately terminate and shall not be
exercisable; provided further, however, that if the employment of
such key operations employee with such franchisee is terminated
for any reason other than "for cause", such employee shall have
an additional period of time to exercise all stock options that
were fully vested at the time of termination of employment with
the Company (the "Additional Exercise Period") equal to the
greater of (a) ninety (90) days or (b) one (1) day for each two
(2) days that such employee worked with such franchisee.
Notwithstanding the foregoing, the Additional Exercise Period
shall automatically terminate at the end of the Extension, if
any, granted by the Chief Executive Officer of the Company. For
purposes hereof, "for cause" is intended to include, but not be
limited to, willful and continued failure to perform duties,
conviction of a felony, any crime involving moral turpitude under
federal, state, or local laws, or any crime involving the
Company, engagement in acts which might, beyond reasonable doubt,
bring the Company into disrepute, contempt, scandal and ridicule,
or conviction of fraud, misappropriation or embezzlement in the
performance of duties for the Company.
14. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of
shares of Common Stock covered by each outstanding option granted
under the Plan and the option price may be adjusted to reflect,
as deemed appropriate by the Committee, any stock dividend, stock
split, share combination, exchange of shares, recapitalization,
merger, consolidation, separation, reorganization, liquidation or
the like, of or by the Company. Notwithstanding anything in this
Plan to the contrary, all options granted pursuant to the Plan
shall become fully vested and exercisable at the election of the
Participant at any time prior to the expiration date of such
option upon a material change in control of the Company. For
purposes hereof, a "material change in control of the Company"
shall be deemed to include, but not be limited to, the
dissolution or liquidation of the Company, a merger of the
Company into another corporation, partnership, trust or other
business entity, (other than a merger into a subsidiary or parent
of the Company, or a merger the primary purpose of which is
reincorporation), the acquisition of the Company by another
corporation, partnership, trust, or other business entity, the
sale or conveyance of all or substantially all of the assets of
the Company, or change in control of the majority of the voting
securities of the Company, or any other event as determined by
the Committee.
15. NON-ASSIGNABILITY. Options may not be transferred
other than by will or by the laws of descent and distribution.
During a participant's lifetime, options granted to a participant
may be exercised only by the participant.
16. INTERPRETATION. The Committee shall interpret the Plan
and shall prescribe such rules and regulations in connection with
the operation of the Plan as it determines to be advisable for
the administration of the Plan. The Committee may rescind and
amend its rules and regulations.
17. AMENDMENT OR DISCONTINUANCE. The Plan may be amended
or discontinued by the Committee without the approval of the
stockholders of the Company, except that any amendment that would
(a) materially increase the benefits accruing to participants
under the Plan, (b) materially increase the number of securities
that may be issued under the Plan, or (c) materially modify the
requirements of eligibility for participation in the Plan must be
approved by the stockholders of the Company.
18. EFFECT OF PLAN. Neither the adoption of the Plan by
the Board nor any action of the Committee shall be deemed to give
any officer or employee any right to be granted an option to
purchase Common Stock of the Company or any other rights except
as may be evidenced by the stock option agreement, or any
amendment thereto, duly authorized by the Committee and executed
on behalf of the Company and then only to the extent and on the
terms and conditions expressly set forth therein.
19. TERM. Unless sooner terminated by action of the Board,
this Plan will terminate on September 7, 2002. The Committee may
not grant options under the Plan after that date, but options
granted before that date will continue to be effective in
accordance with their terms.
20. DEFINITIONS. For the purpose of this Plan, unless the
context requires otherwise, the following terms shall have the
meanings indicated:
(a) "Board" means the board of directors of the Company.
(b) "Committee" means the Compensation Committee of the
Board, composed of independent and disinterested members of the
Board qualified to be members of the Committee pursuant to
Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended.
(c) "Common Stock" means the Common Stock which the Company
is currently authorized to issue or may in the future be
authorized to issue.
(d) "Incentive Option" means an option granted under the
Plan which meets the requirements of Section 422A of the Internal
Revenue Code.
(e) "Nonqualified Option" means an option granted under the
Plan which is not intended to be an Incentive Option.
(f) "Option Period" means the period during which an option
may be exercised.
(g) "Parent" means any corporation in an unbroken chain of
corporations ending with the Company if, at the time of granting
of the option, each of the corporations other than the Company
owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in
the chain.
(h) "Plan" means this 1992 Incentive Stock Option Plan, as
amended from time to time.
(i) "Subsidiary" means any corporation in an unbroken chain
of corporations beginning with the Company if, at the time of the
granting of the option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain, and
"Subsidiaries" means more than one of any such corporations.