<SUBMISSION>
<ACCESSION-NUMBER>0000703351-04-000064
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20040630
<FILING-DATE>20040913
<DATE-OF-FILING-DATE-CHANGE>20040913
<EFFECTIVENESS-DATE>20040913
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BRINKER INTERNATIONAL INC
<CIK>0000703351
<ASSIGNED-SIC>5812
<IRS-NUMBER>751914582
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>001-10275
<FILM-NUMBER>041027399
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>6820 LBJ FREEWAY
<CITY>DALLAS
<STATE>TX
<ZIP>75240
<PHONE>9729809917
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>6820 LBJ FREEWAY
<CITY>DALLAS
<STATE>TX
<ZIP>75240
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CHILIS INC
<DATE-CHANGED>19910528
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>proxy04g1.htm
<DESCRIPTION>PROXY STATEMENT
<TEXT>
<html>

<head>

<title>Proxy Statement</title>

</head>

<body link=blue vlink=purple>

<p align="center"><img width=250 height=230
src="image001.gif"></p>





<p align="center"><b>6820 LBJ Freeway<br>
Dallas, Texas 75240<br>
(972) 980-9917</b></p>


<div align=center><b><img height=10 width=600
src="image002.gif" alt=---></b></div>


<p align=center><b>NOTICE OF ANNUAL MEETING OF SHAREHOLDERS<br>
To Be Held November 4, 2004</b></p>


<div align=center><b><img height=10 width=600
src="image002.gif" alt=---></b></div>


<p align=right>September 13, 2004</p>



<p>Dear
Shareholder:</p>



<p>You are cordially invited to attend the annual meeting
of shareholders of Brinker International, Inc. (the &quot;Company&quot;) to be held at
10:00 a.m., on Thursday, November 4, 2004, at the InterContinental Hotel,
located at 15201 Dallas Parkway, Dallas, Texas 75248.&nbsp; At the meeting, shareholders will elect nine directors for
one-year terms, vote on the ratification of the appointment of KPMG LLP as
independent auditors for fiscal 2005, and vote on such other matters, including
a shareholder proposal, as may properly come before the meeting.&nbsp; </p>





<p>Shareholders of record at the close of business on
September 7, 2004, are entitled to vote at the annual meeting or any
adjournment thereof.</p>



<p>Whether or not you plan to be present at the meeting,
please take the time to vote, by internet, telephone or mailing in your
proxy.&nbsp; The giving of such proxy will
not affect your right to vote in person, should you later decide to attend the
meeting.</p>





<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Very
  truly yours,</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>Ronald
  A. McDougall</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Chairman
  of the Board</p>
  </td>
 </tr>
</table>



<hr><P STYLE="page-break-after: always"></P>

<p align=center><b>BRINKER
INTERNATIONAL, INC.<br>
6820 LBJ Freeway<br>
Dallas, Texas 75240<br>
(972) 980-9917</b></p>

<p align=center><b>&nbsp;==================</b></p>

<p align=center><b>PROXY STATEMENT<br>
For<br>
ANNUAL MEETING OF
SHAREHOLDERS</b></p>

<p align=center><b>To Be Held November 4, 2004</b></p>

<p align=center><b>=================</b></p>

<p>The Board of Directors of Brinker International,
Inc., a Delaware corporation (the &quot;Company&quot; or &quot;Brinker International&quot;),
requests your proxy for the annual meeting of shareholders to be held on
November 4, 2004.&nbsp; If you sign and
return the enclosed proxy, or vote by telephone or internet, you authorize the
persons named in the proxy to represent you and vote your shares for the
purposes we mentioned in the notice of annual meeting.&nbsp; This Proxy Statement and related proxy are
being distributed on or about September 13, 2004.&nbsp; The record date for shareholders entitled to vote at the annual
meeting is September 7, 2004.&nbsp; At the
close of business on August 24, 2004, the Company had 89,834,485 shares of
common stock, $0.10 par value (&quot;Common Stock&quot;), issued and outstanding and
entitled to vote at the meeting.&nbsp; </p>



<p>At the annual meeting, shareholders will (a) elect
nine directors of the Company for one-year terms, (b) ratify the appointment of
KPMG LLP as independent auditors for fiscal year 2005, and (c) vote on such
other matters, including a shareholder proposal, as may properly come before
the meeting.&nbsp; The Board of Directors
asks you to vote FOR the director nominees and FOR the ratification of the
auditors, and to vote AGAINST the shareholder proposal.&nbsp; This Proxy Statement provides you with
detailed information about each of these matters.</p>



<p>If you come to the meeting, you will be able to vote
in person.&nbsp; If you are unable to come to
the meeting, your shares can be voted only if you have returned a properly
executed proxy or followed the telephone or internet voting instructions on the
proxy card.&nbsp; You may revoke your authorization
at any time before the shares are voted at the meeting by giving written notice
or a subsequently dated proxy (either by mail, telephone or internet), to the
Secretary of the Company, or by voting in person.</p>



<p>A quorum of shareholders is necessary to hold a valid
meeting.&nbsp; If at least a majority of the
shares of Common Stock issued and outstanding and eligible to vote are present
in person or by proxy, a quorum will exist.&nbsp;
Abstentions and broker non-votes are counted for purposes of determining
the presence or absence of a quorum.&nbsp; However,
only the number of shares voted in person or by proxy and abstentions are
counted for purposes of determining presence or absence of a quorum for a
specific proposal.&nbsp; The total number of
votes cast FOR each proposal will be counted for purposes of determining
whether sufficient affirmative votes have been cast.&nbsp; If you grant a proxy, the person named in the proxy will have the
discretion to vote your shares on any additional matters properly presented for
a vote at the meeting.&nbsp; The Company does
not expect any matters to be presented for a vote at the annual meeting other
than those matters described in this Proxy Statement.</p>



<p>Certain shareholders who hold their shares in street
name and live in the same household may receive only one copy of this Proxy
Statement and Annual Report.&nbsp; This
practice is known as &quot;householding.&quot;&nbsp; If
you hold your shares in street name and would like additional copies of these
materials, please contact your broker.&nbsp;
If you receive multiple copies and would prefer to receive only one,
please contact your broker as well.&nbsp;
Brinker International does not currently use householding for record
holders and will send notice to record holders before using householding,
giving record holders the opportunity to continue to receive multiple copies in
the same household.</p>



<hr><P STYLE="page-break-after: always"></P>



<p align=center><b>PROPOSAL 1</b></p>

<p align=center><b>&nbsp;ELECTION OF DIRECTORS</b></p>

<p align=left>Nine directors are to be elected at the meeting.&nbsp; Each nominee will be elected to hold office
until the next annual meeting of shareholders.&nbsp;
All nominees are currently serving as directors of the Company.&nbsp; All directors were elected by the
shareholders at the annual meeting of shareholders held on November 13,
2003.&nbsp; 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.&nbsp; Should any
nominee become unable or unwilling to accept nomination or election, the Board
of Directors can name a substitute nominee and the proxies will be voted for
such substitute nominee unless an instruction to the contrary is written on the
proxy card.</p>



<p><b>Information
About Nominees</b></p>



<p>Information about the nine persons nominated as
directors is provided below.&nbsp; The shares
represented by proxy cards returned to us will be voted <b>FOR</b> these
persons unless you specify otherwise.</p>



<p><b>Douglas H. Brooks</b>, 52, was elected Chief Executive Officer of the Company in January
2004, and has served as President of the Company since January 1999.&nbsp; Previously, Mr. Brooks served as Chili's
Grill &amp; Bar President from June 1994 to May 1998, Executive Vice President of
the Company from May 1998 until January 1999, and Chief Operating Officer from
May 1998 until June 2003.&nbsp; Mr. Brooks
joined the Company as an Assistant Manager in 1978 and was promoted to General
Manager later that year.&nbsp; 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.&nbsp; He held this
position until becoming President of Chili's in 1994.&nbsp; Mr. Brooks serves on the Board of Directors of Limbs for Life and
is a member of the Professional Advisory Board for St. Jude Children's Research
Hospital.&nbsp; Mr. Brooks has been a member
of the Board of Directors since November 1999.</p>



<p><b>Dan W. Cook, III</b>, 69, is a Senior Advisor to MHT Partners, L.P., an investment banking
firm, a position he has held since December 2001.&nbsp; Mr. Cook also is a Retired Partner of Goldman Sachs, an
investment banking firm.&nbsp; Mr. Cook
joined Goldman Sachs in 1961, was a general partner when he retired in 1992,
and then served as a Senior Director from 1992 until becoming a Retired Partner
in December 2000.&nbsp; Mr. Cook serves on
the Board of Directors of Centex Corporation and GreatLodge.Com and is an
Advisory Director of Deep Nines.&nbsp; Mr.
Cook is on the Executive Board of the Edwin L. Cox School of Business at
Southern Methodist University.&nbsp; Mr. Cook
has served as a member of the Board of Directors since 1997 and is a member of
the Compensation, Executive, and Governance and Nominating Committees of the
Company.</p>



<p><b>Robert M. Gates</b>,
61, is President of Texas A&amp;M University, having been appointed to this
position in 2002.&nbsp; From 1999 to 2001,
Dr. Gates served as the Dean of the George Bush School of Government and Public
Service at Texas A&amp;M University.&nbsp;
Prior to this time, Dr. Gates was a consultant, author and
lecturer.&nbsp; From 1991 to 1993, he served
as Director of Central Intelligence for the United States.&nbsp; Dr. Gates is a member of the Board of Trustees
of The Fidelity Funds and a member of the Board of Directors of Parker Drilling
Company and NACCO Industries, Inc.&nbsp; Dr.
Gates serves on the National Executive Board of the Boy Scouts of America and
is President of the National Eagle Scout Association.&nbsp; Dr. Gates has served as a member of the Board of Directors since
September 2003 and is a member of the Audit Committee of the Company.</p>



<p><b>Marvin J. Girouard</b>, 65, is the Chairman and Chief Executive Officer of Pier 1 Imports,
Inc., having been elected to the position of Chairman in February 1999 and
Chief Executive Officer in June 1998. &nbsp;Mr. Girouard previously served as Chief Operating Officer from
1988 to 1998 and as President from 1988 until February 1999.&nbsp; Mr. Girouard joined Pier 1 Imports in 1975
and has served on its Board of Directors since 1988.&nbsp; He is an honorary member of the Board of Directors for the United
States Committee for UNICEF - The United Nations Children's Emergency
Fund.&nbsp; Mr. Girouard has served as a
member of the Board of Directors since 1998 and is a member of the Audit, Compensation
and Executive Committees of the Company.</p>



<p><b>Ronald Kirk</b>,
50, has been a partner in the law firm of Gardere Wynne Sewell, L.L.P since
1994 and served as the Mayor of the City of Dallas from 1995 until November
2001.&nbsp; Mayor Kirk also serves on the
Board of Directors for Dean Foods Company and PetsMart, Inc.&nbsp; Mr. Kirk has served on the Board of
Directors since 1997 and is a member of the Audit Committee of the Company.</p>



<hr><P STYLE="page-break-after: always"></P>



<p><b>George R. Mrkonic</b>, 52, has served as a Director of Borders Group, Inc. since 1994,
having served as Vice Chairman from December 1994 until January 2002 and
President from December 1994 until January 1997.&nbsp; Mr. Mrkonic also serves as a Director for Guitar Center, Inc.,
Syntel, Inc., and Nashua Corporation.&nbsp;
Mr. Mrkonic has served as a member of the Board of Directors since September
2003 and is a member of the Compensation Committee of the Company.</p>



<p><b>Erle Nye</b>,
67, has been Chairman of the Board of TXU Corp. since 2004, having served as
Chairman of the Board and Chief Executive from 1997 to 2004, President and
Chief Executive from 1995 to 1997, and President from 1987 to 1995.&nbsp; Mr. Nye has served on the Board of Directors
of TXU Corp. since 1987.&nbsp; Mr. Nye also
serves as Director of Oncor Electric Delivery Company, TXU Energy Company LLC,
TXU Gas Company, and is on the Executive Board of the Edwin L. Cox School of
Business at Southern Methodist University.&nbsp;
Mr. Nye was elected to the Board of Directors in November 2002 and is a
member of the Executive and Governance and Nominating Committees of the
Company.</p>



<p><b>James E. Oesterreicher</b>, 63, 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.&nbsp; Mr. Oesterreicher served as President of
JCPenney Stores and Catalog from 1992 to 1995 and as Director of JCPenney
Stores from 1988 to 1992.&nbsp; Mr.
Oesterreicher joined J.C. Penney Company in 1964 as a management trainee.&nbsp; He serves as a Director for TXU Corp., Texas
Health Resources, Circle Ten Council - Boy Scouts of America, March of Dimes,
and Spina Bifida Birth Defects Foundation.&nbsp;
Mr. Oesterreicher has served as a member of the Board of Directors of
the Company since 1994 and is a member of the Audit and Compensation Committees
of the Company.</p>



<p><b>Cece Smith</b>,
59, is Managing General Partner of Phillips-Smith-Machens Venture Partners, a
venture capital firm investing in retail and consumer businesses that she
co-founded in 1986.&nbsp; Previously, Ms.
Smith held senior management positions with Pearle Health Services and S&amp;A
Restaurant Corp.&nbsp; Ms. Smith currently
serves as a Director of Michaels Stores, Inc. and is on the Executive Board of
the Edwin L. Cox School of Business at Southern Methodist University.&nbsp; Ms. Smith has served on the Board of
Directors since January 2002 and is a member of the Audit, Compensation, and
Governance and Nominating Committees of the Company.</p>





<p><b>YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE <i>FOR</i>
EACH OF THE NOMINEES FOR DIRECTOR.</b></p>

<p><b>&nbsp;Stock
Ownership of Directors</b></p>



<table cellspacing=0 cellpadding=0>
 <tr>
  <td width=213 valign=top>

  <p><br>
  Name</p>
  </td>
  <td width=213 valign=top>
  <p align="justify">Number
  of Shares of Common Stock Beneficially Owned as of August 24, 2004 (1) (2)
  (3)</p>
  </td>
  <td width=213 valign=top>
  <p align="justify">Number
  Attributable to Options Exercisable Within 60 Days of August 24, 2004 (4)</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>Douglas
  H. Brooks</p>
  </td>
  <td width=213 valign=top>
  <p align=right>626,554</p>
  </td>
  <td width=213 valign=top>
  <p align=right>475,001</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>Dan
  W. Cook, III</p>
  </td>
  <td width=213 valign=top>
  <p align=right>49,753</p>
  </td>
  <td width=213 valign=top>
  <p align=right>49,753</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>Robert
  M. Gates</p>
  </td>
  <td width=213 valign=top>
  <p align=right>0</p>
  </td>
  <td width=213 valign=top>
  <p align=right>0</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>Marvin
  J. Girouard</p>
  </td>
  <td width=213 valign=top>
  <p align=right>37,123</p>
  </td>
  <td width=213 valign=top>
  <p align=right>32,682</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>Ronald
  Kirk</p>
  </td>
  <td width=213 valign=top>
  <p align=right>36,509</p>
  </td>
  <td width=213 valign=top>
  <p align=right>35,360</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>George
  R. Mrkonic</p>
  </td>
  <td width=213 valign=top>
  <p align=right>5,301</p>
  </td>
  <td width=213 valign=top>
  <p align=right>0</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>Erle
  Nye</p>
  </td>
  <td width=213 valign=top>
  <p align=right>2,206</p>
  </td>
  <td width=213 valign=top>
  <p align=right>0</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>James
  E. Oesterreicher</p>
  </td>
  <td width=213 valign=top>
  <p align=right>11,134</p>
  </td>
  <td width=213 valign=top>
  <p align=right>7,639</p>
  </td>
 </tr>
 <tr>
  <td width=213 valign=top>
  <p>Cece
  Smith</p>
  </td>
  <td width=213 valign=top>
  <p align=right>11,288</p>
  </td>
  <td width=213 valign=top>
  <p align=right>7,667</p>
  </td>
 </tr>
</table>







<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=55 valign=top>
  <p>(1)</p>
  </td>
  <td width=583 valign=top>
  <p>Beneficial ownership has been determined in accordance
  with the rules of the Securities and Exchange Commission.&nbsp; 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.</p>
  </td>
 </tr>
 <tr>
  <td width=55 valign=top>

  <hr><P STYLE="page-break-after: always"></P>
  <p>

  </td>
  <td width=583 valign=top>

  </td>
 </tr>
 <tr>
  <td width=55 valign=top>
  <p>(2)</p>
  </td>
  <td width=583 valign=top>
  <p>Includes shares of Common Stock which may be
  acquired by exercise of options vested, or vesting within 60 days of August
  24, 2004, under the Company's 1991 Stock Option Plan for Non-Employee Directors
  and Consultants, 1992 Incentive Stock Option Plan, Stock Option and Incentive
  Plan, and 1999 Stock Option and Incentive Plan for Non-Employee Directors and
  Consultants, as applicable.</p>
  </td>
 </tr>
 <tr>
  <td width=55 valign=top>

  </td>
  <td width=583 valign=top>

  </td>
 </tr>
 <tr>
  <td width=55 valign=top>
  <p>(3)</p>
  </td>
  <td width=583 valign=top>
  <p>Each director owns less than 1% of the Company's
  Common Stock.</p>
  </td>
 </tr>
 <tr>
  <td width=55 valign=top>

  </td>
  <td width=583 valign=top>

  </td>
 </tr>
 <tr>
  <td width=55 valign=top>
  <p>(4)</p>
  </td>
  <td width=583 valign=top>
  <p>Mr. Brooks owns 787,501 stock options, 475,001 of
  which have vested, or will vest, within 60 days of August 24, 2004.&nbsp; Mr. Cook owns 73,858 stock options, 49,753
  of which have vested, or will vest, within 60 days of August 24, 2004.&nbsp; Dr. Gates owns 26,678 stock options, none
  of which have vested, or will vest, within 60 days of August 24, 2004.&nbsp; Mr. Girouard owns 53,070 stock options,
  32,682 of which have vested, or will vest, within 60 days of August 24, 2004.&nbsp; Mr. Kirk owns 54,079 stock options, 35,360
  of which will have vested, or will vest, within 60 days of August 24,
  2004.&nbsp; Mr. Mrkonic owns 24,000 stock
  options, none of which have vested, or will vest, within 60 days of August
  24, 2004.&nbsp; Mr. Nye owns 29,970 stock
  options, none of which have vested, or will vest, within 60 days of August
  24, 2004.&nbsp; Mr. Oesterreicher owns
  28,567 stock options, 7,639 of which have vested, or will vest, within 60
  days of August 24, 2004.&nbsp; Ms. Smith
  owns 31,000 stock options, 7,667 of which have vested, or will vest, within
  60 days of August 24, 2004.</p>
  </td>
 </tr>
</table>





<p align=center><b>PROPOSAL 2</b></p>

<p align=center><b>&nbsp;RATIFICATION OF AUDITORS</b></p>

<p align=left><b>&nbsp;</b>The Audit Committee of the Board of Directors has
selected KPMG LLP as independent auditors for fiscal 2005, subject to
ratification by the shareholders.&nbsp;
Representatives of KPMG LLP 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.</p>



<p><b>Audit Fees</b></p>



<p>The following table sets forth the aggregate fees
billed, or estimated to be billed, to the Company for the fiscal years ended
June 30, 2004 and June 25, 2003, by the Company's principal accounting firm,
KPMG LLP:</p>





<table cellspacing=0 cellpadding=0>
 <tr>
  <td width=120 valign=top>
  <p align=center>Fiscal Year</p>
  </td>
  <td width=131 valign=top>
  <p align=center>Annual Audit Fees</p>
  </td>
  <td width=120 valign=top>
  <p align=center>Audit-Related Fees</p>
  </td>
  <td width=136 valign=top>
  <p align=center>Tax Fees</p>
  </td>
  <td width=131 valign=top>
  <p align=center>All Other Fees</p>
  </td>
 </tr>
 <tr>
  <td width=120 valign=top>
  <p align=center>2004</p>
  </td>
  <td width=131 valign=top>
  <p align=center>$338,000 (1)</p>
  </td>
  <td width=120 valign=top>
  <p align=center>$44,000 (2)</p>
  </td>
  <td width=136 valign=top>
  <p align=center>$41,000 (3)</p>
  </td>
  <td width=131 valign=top>
  <p align=center>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</p>
  </td>
 </tr>
 <tr>
  <td width=120 valign=top>
  <p align=center>2003</p>
  </td>
  <td width=131 valign=top>
  <p align=center>$168,000 (4)</p>
  </td>
  <td width=120 valign=top>
  <p align=center>$27,000 (5)</p>
  </td>
  <td width=136 valign=top>
  <p align=center>$242,000 (6)</p>
  </td>
  <td width=131 valign=top>
  <p align=center>$33,000 (7)</p>
  </td>
 </tr>
</table>



<p>(1) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For
fiscal 2004, annual audit fees relate to professional services rendered for the
audit of the consolidated financial statements of the Company ($238,000),
subsidiary and statutory audits ($5,000), the issuance of consents for
franchise circulars ($3,000), review of documents filed with the Securities and
Exchange Commission ($77,000), and Sarbanes-Oxley consultations ($15,000).</p>

<p>(2) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For
fiscal 2004, audit-related fees are for audits of the Company's 401(k) Savings
Plan and Savings Plan II.</p>

<p>(3) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For
fiscal 2004, tax fees are for tax planning ($10,000), tax consultation
associated with gift cards, benefit plans and insurance and other international
tax consultation ($13,000), and the review of tax returns ($18,000).</p>

<p>(4) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For
fiscal 2003, annual audit fees relate to professional services rendered for the
audit of the consolidated financial statements of the Company ($158,000),
subsidiary and statutory audits ($5,500), the issuance of consents for franchise
circulars ($3,000), and review of documents filed with the Securities and
Exchange Commission ($1,500).</p>

<p>(5) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For
fiscal 2003, audit related fees are for audits of the Company's 401(k) Savings
Plan and Savings Plan II.</p>

<p>(6) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For
fiscal 2003, tax fees are for tax planning ($8,000), tax consultation
associated with a cost segregation study ($222,000), and the review of tax
returns ($12,000).</p>

<p>(7) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For
fiscal 2003, all other fees are for franchise-related audit services and other
consultation and review services ($13,000) and outsourcing of internal
audit-related information technology services ($20,000).&nbsp; As of January 2003, in response to
regulatory changes regarding use of external auditors for assistance with
internal audit work, the Company ceased using KPMG LLP as provider of
franchise-related audit services and internal audit-related information
technology services.</p>



<p>The Audit Committee has established policies and procedures for the approval
and pre-approval of audit services and permitted non-audit services.&nbsp; The
Audit Committee has the responsibility to engage and terminate </p>



<hr><P STYLE="page-break-after: always"></P>



<p>the Company's independent auditors, to pre-approve their performance of audit
services and permitted non-audit services, to approve all audit and non-audit
fees, and to set guidelines for permitted non-audit services and fees.&nbsp; All
of the fees for fiscal 2003 and 2004 were pre-approved by the Audit Committee or
were within pre-approved guidelines for permitted non-audit services and fees
established by the Audit Committee, and there were no instances of waiver of
approval requirements or guidelines during the same periods.</p>



<p><b>YOUR Board
of Directors recommends a vote <i>FOR</i> the ratification of thE appointment
of KPMG LLP as independent auditors for fiscal 2005.</b></p>





<p align=center><b>PROPOSAL 3</b></p>

<p align=center><b>SHAREHOLDER PROPOSAL</b></p>

<p>The Adrian Dominican Sisters, 1257 East Siena Heights
Drive, Adrian, Michigan 49221-1793, beneficial owner of 150 shares of Common
Stock of the Company, have notified the Company that they intend to present the
following resolution at the annual meeting.&nbsp;
The Board of Directors and the Company accept no responsibility for the
proposed resolution and supporting statement.&nbsp;
<b>The Board of Directors recommends a vote AGAINST this shareholder
proposal.</b>&nbsp; As required by federal
regulations, the resolution and supporting statement are printed below.</p>



<p>RESOLVED: that shareholders request the Board to
adopt, by May 1, 2005, a smoke-free policy for all Brinker International
company-owned restaurants.&nbsp; The
proponents also ask the Company to consider ways of including the same policy
in future franchise agreements.</p>

<p>Supporting Statement:</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Scientific data shows
that banning smoking in restaurants does not hurt business.&nbsp; (Tobacco Control. 12 [2003], 13).</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Despite warnings from
the tobacco industry to the contrary, restaurant business for the entire
industry in California continued to grow after the smoking ban (California
State Sales Tax Figures).</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This growth occurred on
a per-unit basis as well.&nbsp; The bar
smoking ban kicking in three years later did not slow things down either. (California
State Sales Tax Figures).</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
According to Cornell
University's Hotel and Restaurant Administration Quarterly (07/14/03),
restaurants and hotels that go smoke-free do not lose dollars.&nbsp; In fact, some may even gain revenues.</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
According to TOBACCO
CONTROL (2003; 12:13-20), &quot;all of the best designed studies report no impact or
a positive impact of smoke-free restaurant and bar laws on sales or
employment.&nbsp; Policymakers can act to
protect workers and patrons from the toxins in secondhand smoke confident in rejecting
industry claims that there will be an adverse economic impact.&quot;</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After one year of New
York's sweeping restrictions on indoor smoking, city officials released
statistics claiming the ban has been an unqualified success for the city's
restaurants and bars.&nbsp; Despite
opponents' earlier predictions of economic doom to these establishments, both
business-tax receipts and employment rose over the past year.&nbsp; (Vanessa O'Connell, &quot;New York Cites
Smoking-Ban Success,&quot; WSJ 03/29/04).</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Annually environmental
tobacco smoke (ETS) causes 150,000-300,000 lower respiratory infections (LRI),
7,500-15,000 hospitalizations for LRI, 400,000-1,000,000 attacks of asthma,
8,000-26,000 new cases of asthma, respiratory symptoms of irritation, middle
ear effusion, and significant reduction in lung functions in children.</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An October, 1997
National Cancer Institute study showed that blue-collar and service industry
workers have the lowest rates of smoke-free workplaces.&nbsp; Food service operators had the lowest rates
of all occupations surveyed - only 21% said their workplaces had a smoke-free
policy in place.&nbsp; For employees in
restaurants, waiters and bartenders, lung cancer risks are 50% higher than for
others because of second hand smoke (The Journal of the American Medical
Association 10 [2003], 123-143].&nbsp;
&quot;Restaurant waiters had about 1.5 times as great a likelihood of
developing lung cancer as the general public&quot; (NYT 7/28/93).</p>

<hr><P STYLE="page-break-after: always"></P>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Millions of children
visit our facilities.&nbsp; Without a
smoke-free policy they are involuntarily exposed to ETS.</p>

<p>o&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The tobacco industry
settled a Class Action lawsuit in Florida between present and former flight
attendants vs. their employees and the tobacco companies for diseases tied to
ETS; such could easily happen with Brinker, given the closed situations within
which many of our employees work.</p>

<p><b>Board of Directors' Statement In Opposition</b></p>

<p><b>&nbsp;</b>Your Board of Directors recommends a vote AGAINST
this shareholder proposal for the following reasons:</p>



<p>While your directors appreciate both sides of the
debate on smoking, for the Company to unilaterally ban smoking where it is
otherwise lawful would put the Company's restaurants at a competitive
disadvantage and is clearly not in the best interest of our shareholders.&nbsp; Where smoking in restaurants is permitted,
the Company maintains equal footing with competitors by providing an
environment inviting to both our smoking and non-smoking customers.&nbsp; Eliminating smoking where it is permitted
would hurt business as a portion of our customers who prefer to smoke would
likely take their business elsewhere, resulting in lost sales and diminished
shareholder value.&nbsp; In those cities and
states that have banned smoking in restaurants, the Company's restaurants are
smoke-free.&nbsp; In all other areas, our
restaurants have designated non-smoking and smoking areas.&nbsp; Additionally, our Company's policy prohibits
employees from smoking while on duty in every one of our restaurants.</p>



<p>FOR THE FOREGOING REASONS, YOUR
BOARD OF DIRECTORS BELIEVES THAT THIS PROPOSAL IS NOT IN THE BEST INTEREST OF
THE COMPANY AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE <i>AGAINST</i> THIS
PROPOSAL.</p>

<p align=center><b>GOVERNANCE OF THE COMPANY</b></p>

<p><b>Director Independence</b></p>



<p>The Board of Directors has
determined each of the following directors to be an &quot;independent&quot; director as
such term is defined by the listing standards of the New York Stock Exchange
(&quot;NYSE&quot;) and the rules of the Securities and Exchange Commission (&quot;SEC&quot;).&nbsp; These directors are referred to individually
as an &quot;Independent Director&quot; and collectively as the &quot;Independent Directors.&quot;</p>



<p>Dan
W. Cook, III<br>
Robert
M. Gates<br>
Marvin
J. Girouard<br>
Ronald
Kirk<br>
George
R. Mrkonic<br>
Erle
Nye<br>
James
E. Oesterreicher<br>
Cece
Smith</p>



<p><b>Classes
of Directors</b></p>



<p>Each director serves for a one year term and is
subject to re-election by the shareholders of the Company each year.&nbsp; However, the Governance and Nominating
Committee has divided the non-employee directors into four classes.&nbsp; The classes are staggered so that each year
the members of one of the classes shall have served on the Board of Directors
for four consecutive years.&nbsp; At such
time, the members of such class are considered &quot;Retiring Directors&quot; and will,
as determined by the Governance and Nominating Committee, either leave the
Board of Directors or serve an additional four year term on the Board of
Directors (subject to annual re-election by the shareholders of the
Company).&nbsp; All decisions of the
Governance and Nominating Committee are made after considering, among other
things, the quality of past director service, attendance at Board of Directors
and Committee meetings, whether the Director continues to possess the qualities
and capabilities considered  </p>



<hr><P STYLE="page-break-after: always"></P>



<p>necessary or desirable for director service, input
from other members of the Board of Directors concerning the performance of that
director, and the independence of the director.&nbsp; Mr. Ronald A. McDougall is leaving the Board of Directors after
twenty-one years of service, including serving as Chairman of the Board for the
past four years.&nbsp; Mr. Roger T. Staubach
is leaving the Board of Directors after eleven years of service.&nbsp; Mr. Ron Kirk is a Retiring Director who has
been renominated by the Governance and Nominating Committee.&nbsp; The four classes of non-employee directors
are as follows:&nbsp; Messrs. Girouard, Nye,
and Oesterreicher comprise Class 1 and will be considered Retiring Directors as
of the annual meeting of shareholders following the end of the 2006 fiscal
year.&nbsp; Messrs. Gates and Mrkonic are
members of Class 2 and will be considered Retiring Directors as of the annual
meeting of shareholders following the end of the 2007 fiscal year.&nbsp; Mr. Kirk comprises Class 3 and will be
considered a Retiring Director as of the annual meeting of shareholders
following the end of the 2008 fiscal year.&nbsp;
Mr. Cook and Ms. Smith comprise Class 4 and will be considered Retiring
Directors as of the annual meeting of shareholders following the end of the
2005 fiscal year.</p>



<p><b>Committees of the Board
of Directors</b></p>



<p>The Board of Directors of the Company has
established an Executive Committee, Audit Committee, Compensation Committee,
and Governance and Nominating Committee.&nbsp;
The charters for each of these committees, as well as the Company's
Corporate Governance Guidelines, are available at no charge in the Corporate
Governance section of the Company's internet website (http://www.brinker.com/corp_gov/)
or by written request directed to the Company, at 6820 LBJ Freeway, Dallas,
Texas 75240, Attention: General Counsel.</p>



<p>The Board of Directors has determined that each member
of the Audit, Compensation, and Governance and Nominating Committees meets the
independence requirements applicable to those committees prescribed by the NYSE
and the SEC.</p>



<p>The Executive Committee (currently comprised of
Messrs. Cook, Girouard, Nye, and McDougall) did not meet during the fiscal
year.&nbsp; The Executive Committee reviews
material matters between Board meetings, provides advice and counsel to Company
management, and has the authority to act for the Board on most matters between
Board meetings.&nbsp; In addition, the
Executive Committee is also charged with assuring that the Company has a
satisfactory succession management plan for all key management positions.</p>



<p>The Audit Committee is currently comprised of
Messrs. Girouard, Kirk, Gates, and Oesterreicher and Ms. Smith and met ten
times during the fiscal year.&nbsp; The Board
of Directors has determined that Ms. Smith is an &quot;audit committee financial
expert&quot; as such term is defined in Item 401(h) of Regulation S-K promulgated by
the SEC.&nbsp; A discussion of the role of
the Audit Committee is provided under &quot;Report of the Audit Committee&quot; below.</p>



<p>The Compensation Committee is currently comprised of
Messrs. Cook, Girouard, Mrkonic, and Oesterreicher and Ms. Smith and met four
times during the fiscal year.&nbsp; 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
compensation and stock-based incentive plans (subject to shareholder approval
where required), management of the various stock option plans of the Company,
and approval of the total number of available shares to be used each year in
stock-based plans.&nbsp; The specific nature
of the Committee's responsibilities as they relate to executive officers is set
forth below under &quot;Report of the Compensation Committee.&quot;</p>



<p>The Governance and Nominating Committee is currently
composed of Messrs. Cook, Kirk, Nye, and Staubach and Ms. Smith and met three times
during the fiscal year.&nbsp; The purposes of
the Governance and 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.&nbsp; The Governance and
Nominating Committee reviewed the applicable legal standards for &quot;independence&quot;
and the criteria applied to determine &quot;audit committee financial expert&quot;
status, as well as the answers to annual questionnaires completed by each of
the Independent Directors.&nbsp; On the basis
of this review, the Governance and Nominating Committee delivered a report to
the full Board of Directors and the Board of Directors made its &quot;independence&quot;
and &quot;audit committee financial expert&quot; determinations.&nbsp; </p>



<hr><P STYLE="page-break-after: always"></P>



<p><b>Board Member Meeting
Attendance</b></p>



<p>During the fiscal year ended June 30, 2004, the
Board of Directors held six meetings.&nbsp;
Each director attended at least 75% of the aggregate total of meetings
of the Board of Directors and Committees on which he or she served.</p>



<p>It is a policy of the Board of Directors to
encourage directors to attend each annual meeting of shareholders.&nbsp; Such attendance allows for direct interaction
between shareholders and members of the Board of Directors.&nbsp; Ten of eleven directors attended the
Company's 2003 annual meeting of shareholders.</p>



<p><b>Presiding Director</b></p>



<p>The Independent Directors have selected from their
group an Independent Director to serve as chair at each meeting of the
Independent Directors (an &quot;Executive Session&quot;).&nbsp; Mr. Girouard currently serves as the Chairman of the Executive
Session of the Board.&nbsp; The Independent
Directors meet in Executive Session at each Board Meeting.</p>



<p>As the Chairman of the Executive Session of the
Board, Mr. Girouard's duties include presiding at all meetings of the Board of
Directors when the Chairman of the Board is not present, serving as liaison
between the Chairman of the Board and the Independent Directors, approving
information sent to the Board of Directors, approving meeting agendas and
schedules for the Board of Directors, having the authority to call a meeting of
the Independent Directors, and being available for consultation and direct
communication with major shareholders.</p>



<p><b>Directors' Compensation</b></p>



<p>Directors who are not employees of the Company
receive (a) annual compensation of $40,000, at least 25% of which must be taken
in the form of stock options or restricted stock, (b) an annual grant of 4,000
stock options, (c) $2,000 for each meeting of the Board of Directors attended,
and (d) $2,000 for each meeting of any Committee of the Board of Directors
attended.&nbsp; The Chair of the Audit
Committee receives additional annual compensation of $7,500 and the Audit
Committee financial expert receives additional compensation of $7,500.&nbsp; The Chair of each of the Compensation,
Executive, and Governance and Nominating Committees and of the Executive
Session of the Board receives additional annual compensation of $5,000.&nbsp; Mr. McDougall, as the non-employee Chairman
of the Board, also receives annual compensation of $100,000 (payable
quarterly).&nbsp; The Company also reimburses
directors for costs incurred by them in attending meetings of the Board.&nbsp; A new director who is not an employee of the
Company will receive 20,000 stock options at the beginning of such director's
term.&nbsp; The stock options and restricted
stock are granted pursuant to the Company's 1999 Stock Option and Incentive
Plan for Non-Employee Directors and Consultants as of the sixtieth day
following the Board of Directors' meeting held contemporaneous with the annual
meeting of shareholders (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.&nbsp;
One-third of the stock options will vest on each of the second, third
and fourth anniversaries of the date of grant.&nbsp;
All of the restricted stock will vest on the fourth anniversary of the
date of grant.&nbsp; A Retiring Director who
is being nominated for an additional term on the Board of Directors will
receive an additional grant of 10,000 stock options at the beginning of such
director's new term.</p>



<p><b>Shareholder Communications
With the Board of Directors</b></p>



<p>Any Company shareholder who wishes to communicate
with the Board of Directors or with an individual director may direct such
communications to the General Counsel, 6820 LBJ Freeway, Dallas, Texas
75240.&nbsp; The communication must be
clearly addressed to the Company's Board of Directors or to a specific
director.&nbsp; The Board of Directors has
approved a process pursuant to which the General Counsel will review and
forward any such correspondence to the appropriate person or persons for
response.</p>



<p><b>Qualifications
to Serve as Director</b></p>



<p>Each candidate for director must possess at least the
following specific minimum qualifications:</p>



<hr><P STYLE="page-break-after: always"></P>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each candidate shall be prepared to represent the best
interests of all the Company's shareholders and not just one particular
constituency.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each candidate shall be an individual who has
demonstrated integrity and ethics in his/her personal and professional life and
has established a record of professional accomplishment in his/her chosen
field.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No candidate shall have any material personal, financial
or professional interest in any present or potential competitor of the Company.</p>



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



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition, the Governance and Nominating Committee
also considers it desirable that candidates possess the following qualities or
skills:</p>



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



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each candidate should contribute
positively to the existing chemistry and collaborative culture among the
members of the Board of Directors.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each candidate should possess professional
and personal experiences and expertise relevant to the Company's business.&nbsp; Relevant experiences might include, among
other things, large company CEO experience, senior level multi-unit restaurant
or retail experience, and relevant senior level experience in one or more of
the following areas - finance, accounting, sales and marketing, organizational
development, information technology and public relations.</p>



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



<p><b>Internal
Process of Identifying Candidates</b></p>



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



<p><b>Nomination
Rights of Shareholders</b></p>



<p>Any shareholder of the Company may recommend one or more candidates to be
considered by the Governance and Nominating Committee as a potential nominee or
nominees for election as director of the Company at an </p>



<hr><P STYLE="page-break-after: always"></P>



<p>annual meeting of shareholders if the shareholder complies with the notice,
information and consent provisions contained in the Company's Bylaws (current
copies of the Company's Bylaws are available at no charge from the Secretary of
the Company and may also be found in the Company's public filings with the SEC).&nbsp;
In order for the candidate recommendation to be timely for the Company's 2005
annual meeting of shareholders, a shareholder's notice to the Company's General
Counsel must be delivered to the Company's principal executive offices no later
than May 16, 2005.&nbsp; Any such recommendations received by the General
Counsel will be presented to the Governance and Nominating Committee for
consideration.&nbsp; All candidates (whether identified internally or by a
shareholder) who, after evaluation based upon the criteria and process described
in &quot;Internal Process of Identifying Candidates&quot; above, are then recommended by
the Governance and Nominating Committee and approved by the Board of Directors,
will be included in the Company's recommended slate of director nominees in its
proxy statement.</p>



<p><b>Code of Ethics</b></p>



<p>The Company has adopted a code of ethics that
applies to all members of the Board of Directors and employees of the
Company.&nbsp; A copy of the code is
available at no charge in the Corporate Governance section of the Company's
internet website (http://www.brinker.com/corp_gov/) or by written request
directed to the Company, at 6820 LBJ Freeway, Dallas, Texas 75240, Attention:
General Counsel.</p>





<p align=center><b>EXECUTIVE OFFICERS</b></p>

<p>The Board of Directors generally elects executive
officers annually at its final meeting preceding the annual meeting of
shareholders.&nbsp; Certain information about
the Company's executive officers is set forth below.&nbsp; Information about Mr. Brooks is included under the caption
&quot;Election of Directors - Information About Nominees.&quot;</p>



<p><b>Jean Birch</b>, 44, joined the Company as Senior
Vice President and Corner Bakery Cafe President in August 2003.&nbsp; Mrs. Birch was previously employed by Yum!
Brands, Inc. for 12 years.&nbsp; During that
time, she served as Vice President of Operations for Taco Bell from October
2001 to August 2003, Senior Director of Concept Development for Pizza Hut from
July 2000 to October 2001, and Director of Operations for Pizza Hut from
January 1999 to July 2000.</p>



<p><b>Wilson L. Craft</b>, 51, was elected Senior Vice
President and Chili's Grill &amp; Bar President in June 2003, having previously
served as Senior Vice President and Big Bowl Asian Kitchen President since
November 2000, and as Senior Vice President and Chief Operating Officer of
Chili's from May 1998 to November 2000.&nbsp;
Mr. Craft joined the Company in 1984 as a Chili's Manager Trainee and
was promoted to General Manager in 1985, Area Director and then Regional
Director in 1987, and Regional Vice President of Operations in 1991, a position
he held until May 1998.</p>



<p><b>Valerie Davisson,</b> 42, joined the Company as Senior Vice President of Human Resources in
June 2004.&nbsp; Before joining the Company,
Ms. Davisson served as Vice President, Human Resources for Yum! Brands, Inc.
from January 2003 to June 2004, Vice President, Field Human Resources for
Kentucky Fried Chicken from July 2002 to January 2003 and Director, Field Human
Resources for Pizza Hut from December 1998 to January 2001.</p>



<p><b>Todd E. Diener</b>, 47, was elected Executive
Vice President and Chief Operating Officer in June 2003, having previously
served as Senior Vice President and Chili's Grill &amp; Bar President since May
1998, and Senior Vice President and Chief Operating Officer of Chili's since
July 1996.&nbsp; 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.&nbsp; Mr. Diener became Regional Vice President in
1989, a position he held until July 1996.</p>



<p><b>John J. Hatton</b>, 37, was elected Vice
President and Big Bowl Asian Kitchen President in August 2004, having
previously served as Vice President of Marketing for Big Bowl since September
2003.&nbsp; Prior to joining the Company, Mr.
Hatton was Vice President of Branding &amp; Marketing for SIR Corp from
December 2001 to August 2003, and Vice President, Operations for Spectra Group
of Great Restaurants from January 1999 to December 2001.</p>



<hr><P STYLE="page-break-after: always"></P>



<p><b>Starlette Johnson</b>, 41, was elected Executive
Vice President and Chief Strategic Officer in June 2001.&nbsp; Mrs. Johnson joined the Company in 1995 as
Director of Planning.&nbsp; She was promoted
to Vice President of Strategic Development in 1996 and was named Senior Vice
President of Human Resources in June 2000.</p>



<p><b>John C. Miller</b>, 49, has served as Senior Vice
President and Romano's Macaroni Grill President since April 1997.&nbsp; Mr. Miller joined the Company as Vice
President-Special Concepts in 1987.&nbsp; 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.&nbsp; Mr. Miller was
named Senior Vice President - Mexican Concepts in 1994 and was subsequently
elected Senior Vice President and Mexican Concepts President in 1995, a
position he held until April 1997.</p>



<p><b>David M. Orenstein</b>, 46, was elected Senior
Vice President and On The Border President in August 2002, having previously
served as Chief Operating Officer of On The Border since May 2002 and Vice
President of Operations for On The Border since June 1999.&nbsp; Mr. Orenstein joined the Company as a
Chili's Manager in Training in 1984, was promoted to General Manager in 1986,
and Area Director in 1988.&nbsp; Mr.
Orenstein became a Regional Director in 1993, a position he held until
1997.&nbsp; Between 1997 and 1999, Mr.
Orenstein owned and operated his own restaurant.</p>



<p><b>Charles M. Sonsteby</b>, 51, was elected
Executive Vice President and Chief Financial Officer in May 2001.&nbsp; Mr. Sonsteby joined the Company as Director
of the Company's Tax, Treasury and Risk Management departments in 1990.&nbsp; In 1994 he was named Vice President and
Treasurer and was promoted to Senior Vice President of Finance in 1997, a
position he held until May 2001.</p>



<p><b>Roger F. Thomson</b>, 55, has served as Executive
Vice President, Chief Administrative Officer, General Counsel and Secretary
since June 1996.&nbsp; 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.&nbsp; Mr. Thomson served as a Director
of the Company from 1993 until 1995.</p>



<p><b>Mark F. Tormey</b>, 51, has served as Senior Vice
President and Maggiano's Little Italy President since November 1997, having
joined the Company as Senior Vice President and Chief Operating Officer of
Maggiano's in 1995.&nbsp; Prior to joining
the Company, Mr. Tormey worked for Lettuce Entertain You Enterprises, Inc. for
16 years and opened the first Maggiano's restaurant in 1991.</p>



<p><b>Michael B. Webberman</b>, 44, was elected
Executive Vice President of Concept Services in June 2003.&nbsp; Mr. Webberman joined the Company in 1989 as
a Senior Financial Analyst for Chili's.&nbsp;
He was promoted to Vice President of Operations Analysis in 1996 and
Vice President of Planning and Analysis in 2000.&nbsp; Mr. Webberman was named Senior Vice President of Concept Services
in April 2001.</p>





<p align=center><b>EXECUTIVE COMPENSATION</b></p>

<p><b>Summary Compensation
Table</b></p>



<p>The following summary compensation table sets forth
the annual compensation for those individuals serving as Chief Executive
Officer, and the next four highest compensated executive officers in fiscal
2004.</p>

<table cellspacing=0 cellpadding=0 width=684>
 <tr>
  <td width=348 colspan=4 valign=top>

  </td>
  <td width=240 colspan=3 valign=top>
  <p align=center>Long-Term Compensation</p>
  </td>
  <td width=96 valign=top>

  </td>
 </tr>
 <tr>
  <td width=144 valign=top>

  </td>
  <td width=48 valign=top>

  </td>
  <td width=156 colspan=2 valign=top>
  <p align=center>Annual Compensation</p>
  </td>
  <td width=162 colspan=2 valign=top>
  <p align=center>Awards</p>
  </td>
  <td width=78 valign=top>
  <p>Payouts</p>
  </td>
  <td width=96 valign=top>

  </td>
 </tr>
 <tr>
  <td width=144 valign=top>
  <p>Name and Principal<br>
  Position</p>
  </td>
  <td width=48 valign=top>

  <p><br>
  Year</p>
  </td>
  <td width=78 valign=top>

  <p><br>
  Salary</p>
  </td>
  <td width=78 valign=top>

  <p><br>
  Bonus</p>
  </td>
  <td width=84 valign=top>
  <p>Restricted Stock Awards
  (1)</p>
  </td>
  <td width=78 valign=top>
  <p>Securities Underlying
  Options</p>
  </td>
  <td width=78 valign=top>
  <p>Long-Term Incentive
  Payouts</p>
  </td>
  <td width=96 valign=top>
  <p>All Other<br>
  Compensation (2)</p>
  </td>
 </tr>
 <tr>
  <td width=144 rowspan=3 valign=top>
  <p>Ronald A. McDougall,<br>
  Chairman of the Board<br>
  and Chief Executive<br>
  Officer (3)</p>

  </td>
  <td width=48 valign=top>

  <p>2004</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 853,400</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 871,309</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 429,144</p>
  </td>
  <td width=78 valign=top>
  <p align=right>275,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$1,369,098</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 19,500</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2003</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$1,096,923</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$1,110,087</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 805,462</p>
  </td>
  <td width=78 valign=top>
  <p align=right>275,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 484,746</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 20,000</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2002</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$1,000,000</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$1,100,001</p>
  </td>
  <td width=84 valign=top>

  <p align=right>$&nbsp;&nbsp; 466,039</p>
  </td>
  <td width=78 valign=top>

  <p align=right>275,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 515,660</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 18,000</p>
  </td>
 </tr>
 <tr>
  <td width=144 rowspan=3 valign=top>
  <hr><P STYLE="page-break-after: always"></P>
  <p>Douglas H. Brooks, <br>
  President
  and Chief<br>
  Executive Officer (3)</p>
  </td>
  <td width=48 valign=top>

  <p>2004</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 796,731</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 712,477</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 275,689</p>
  </td>
  <td width=78 valign=top>

  <p align=right>125,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 293,100</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 29,915</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2003</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 749,231</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 659,323</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 508,874</p>
  </td>
  <td width=78 valign=top>

  <p align=right>125,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 311,400</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 25,986</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2002</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 723,462</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 578,770</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 294,441</p>
  </td>
  <td width=78 valign=top>
  <p align=right>125,000</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$ 325,791</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 21,043</p>
  </td>
 </tr>
 <tr>
  <td width=144 rowspan=3 valign=top>
  <p>Todd E. Diener,<br>
  Executive Vice<br>
  President and Chief<br>
  Operating Officer</p>
  </td>
  <td width=48 valign=top>

  <p>2004</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 529,077</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 289,505</p>
  </td>
  <td width=84 valign=top>

  <p align=right>$&nbsp;&nbsp; 308,887</p>
  </td>
  <td width=78 valign=top>

  <p align=right>45,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 280,524</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 21,854</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2003</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 508,077</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 284,423</p>
  </td>
  <td width=84 valign=top>

  <p align=right>$&nbsp;&nbsp; 602,195</p>
  </td>
  <td width=78 valign=top>

  <p align=right>45,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 348,920</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 19,965</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2002</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 457,115</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 269,077</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 290,521</p>
  </td>
  <td width=78 valign=top>
  <p align=right>45,000</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$ 385,528</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 21,677</p>
  </td>
 </tr>
 <tr>
  <td width=144 rowspan=3 valign=top>
  <p>Roger F. Thomson,<br>
  Executive Vice<br>
  President, Chief <br>
  Administrative Officer,<br>
  General Counsel and<br>
  Secretary</p>
  </td>
  <td width=48 valign=top>

  <p>2004</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 459,539</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 246,262</p>
  </td>
  <td width=84 valign=top>

  <p align=right>$&nbsp;&nbsp; 111,424</p>
  </td>
  <td width=78 valign=top>

  <p align=right>46,500</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 118,461</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 21,601</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2003</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 445,292</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 234,544</p>
  </td>
  <td width=84 valign=top>

  <p align=right>$&nbsp;&nbsp; 212,315</p>
  </td>
  <td width=78 valign=top>

  <p align=right>46,500</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ 125,858</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 21,799</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2002</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 419,385</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 251,631</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 122,843</p>
  </td>
  <td width=78 valign=top>
  <p align=right>46,500</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$ 135,922</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 20,561</p>
  </td>
 </tr>
 <tr>
  <td width=144 rowspan=3 valign=top>
  <p>Charles M. Sonsteby,<br>
  Executive Vice<br>
  President and Chief<br>
  Financial Officer</p>
  </td>
  <td width=48 valign=top>

  <p>2004</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 423,461</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$ &nbsp; 226,941</p>
  </td>
  <td width=84 valign=top>

  <p align=right>$&nbsp;&nbsp; &nbsp; 76,568</p>
  </td>
  <td width=78 valign=top>

  <p align=right>45,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 97,700</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 19,608</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2003</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 373,462</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 197,188</p>
  </td>
  <td width=84 valign=top>

  <p align=right>$&nbsp;&nbsp; 109,309</p>
  </td>
  <td width=78 valign=top>

  <p align=right>45,000</p>
  </td>
  <td width=78 valign=top>

  <p align=right>$&nbsp;&nbsp; 86,500</p>
  </td>
  <td width=96 valign=top>

  <p align=right>$&nbsp;&nbsp; 16,290</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>

  <p>2002</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 323,462</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 161,731</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 39,396</p>
  </td>
  <td width=78 valign=top>
  <p align=right>40,000</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 70,577</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 20,253</p>
  </td>
 </tr>
 <tr>
  <td width=144 rowspan=3 valign=top>
  <p>Wilson L. Craft, Senior<br>
  Vice President and<br>
  Chili's Grill &amp; Bar<br>
  President</p>
  </td>
  <td width=48 valign=top>
  <p>2004</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 404,018</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 221,095</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</p>
  </td>
  <td width=78 valign=top>
  <p align=right>45,000</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$ 166,444</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 26,757</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>
  <p>2003</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 330,481</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; &nbsp; 28,533</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; 102,255</p>
  </td>
  <td width=78 valign=top>
  <p align=right>26,000</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 20,789</p>
  </td>
 </tr>
 <tr>
  <td width=48 valign=top>
  <p>2002</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 337,371</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 224,654</p>
  </td>
  <td width=84 valign=top>
  <p align=right>$&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0</p>
  </td>
  <td width=78 valign=top>
  <p align=right>26,000</p>
  </td>
  <td width=78 valign=top>
  <p align=right>$&nbsp;&nbsp; 66,015</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 16,041</p>
  </td>
 </tr>
</table>





<p>(1) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Restricted
stock is valued at the closing price of the Company's Common Stock on the grant
dates.&nbsp; Mr. McDougall was awarded 13,457
shares of restricted stock during the last fiscal year, 4,486 shares of which
vested on August 15, 2004, 4,485 shares of which will vest on August 15, 2005,
and 4,486 shares of which will vest on August 15, 2006.&nbsp; Mr. Brooks was awarded 8,645 shares of
restricted stock during the last fiscal year, 2,882 shares of which vested on
August 15, 2004, 2,881 shares of which will vest on August 15, 2005, and 2,882
shares of which will vest on August 15, 2006.&nbsp;
Mr. Diener was awarded 9,686 shares of restricted stock during the last
fiscal year, 3,229 shares of which vested on August 15, 2004, 3,228 shares of
which will vest on August 15, 2005, and 3,229 shares of which will vest on
August 15, 2006.&nbsp; Mr. Thomson was
awarded 3,494 shares of restricted stock during the last fiscal year, 1,165
shares of which vested on August 15, 2004, 1,164 shares of which will vest on
August 15, 2005, and 1,165 shares of which will vest on August 15, 2006.&nbsp; Mr. Sonsteby was awarded 2,401 shares of
restricted stock during the last fiscal year, 801 shares of which vested on
August 15, 2004, 800 shares of which will vest on August 15, 2005, and 800
shares of which will vest on August 15, 2006.&nbsp;
Mr. Craft did not receive an award of restricted stock during the last
fiscal year.&nbsp; The dollar value of the
restricted stock held by each of the named executive officers at the end of the
last fiscal year (at $34.12 per share, the closing price of the Company's
Common Stock on June 30, 2004) is as follows:</p>



<blockquote>



<table cellspacing=0 cellpadding=0 style="text-align: center" width="554">
 <tr>
  <td width=162 valign=top>
  <p>Executive</p>
  </td>
  <td width=178 valign=top>
  <p>Shares of Restricted Stock</p>
  </td>
  <td width=214 valign=top>
  <p>Value of Restricted Stock</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style="text-align: left">
  <p>Ronald A. McDougall</p>
  </td>
  <td width=178 valign=top>
  <p align=center>38,372</p>
  </td>
  <td width=214 valign=top>
  <p align=center>$1,309,253</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style="text-align: left">
  <p>Douglas H. Brooks</p>
  </td>
  <td width=178 valign=top>
  <p align=center>24,385</p>
  </td>
  <td width=214 valign=top>
  <p align=center>$&nbsp;&nbsp; 832,016</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style="text-align: left">
  <p>Todd E. Diener</p>
  </td>
  <td width=178 valign=top>
  <p align=center>27,525</p>
  </td>
  <td width=214 valign=top>
  <p align=center>$&nbsp;&nbsp; 939,153</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style="text-align: left">
  <p>Roger F. Thomson</p>
  </td>
  <td width=178 valign=top>
  <p align=center>10,061</p>
  </td>
  <td width=214 valign=top>
  <p align=center>$&nbsp;&nbsp; 343,281</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style="text-align: left">
  <p>Charles M. Sonsteby</p>
  </td>
  <td width=178 valign=top>
  <p align=center>&nbsp; 5,457</p>
  </td>
  <td width=214 valign=top>
  <p align=center>$&nbsp;&nbsp;&nbsp; 186,193</p>
  </td>
 </tr>
 <tr>
  <td width=162 valign=top style="text-align: left">
  <p>Wilson L. Craft</p>
  </td>
  <td width=178 valign=top>
  <p align=center>&nbsp; 2,358</p>
  </td>
  <td width=214 valign=top>
  <p align=center>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 80,455</p>
  </td>
 </tr>
</table>



</blockquote>



<p>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.&nbsp; 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 objectives are attained.</p>



<hr><P STYLE="page-break-after: always"></P>



<p>(2) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All
other compensation represents Company match on deferred compensation and
various fringe benefits including car allowance and reimbursement of tax
preparation, financial planning, and health club expenses.</p>

<p>(3) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.
McDougall relinquished his responsibilities as Chief Executive Officer
effective January 1, 2004.&nbsp; Mr. Brooks
became Chief Executive Officer on that date.</p>



<p><b>Option Grants During 2004
Fiscal Year</b></p>



<p>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.</p>



<table cellspacing=0 cellpadding=0 width=696>
 <tr>
  <td width=138 valign=top>



  <p><br>
  <br>
  <br>
  Name</p>
  </td>
  <td width=78 valign=top>



  <p><br>
  <br>
  <br>
  Options<br>
  Granted</p>
  </td>
  <td width=96 valign=top>
  <p>% of Total<br>
  Options<br>
  Granted to<br>
  Employees in<br>
  Fiscal Year</p>
  </td>
  <td width=87 valign=top>



  <p><br>
  <br>
  <br>
  Exercise or<br>
  Base Price</p>
  </td>
  <td width=97 valign=top>



  <p><br>
  <br>
  <br>
  Expiration <br>
  Date</p>
  </td>
  <td width=200 colspan=2 valign=top>

  <p>Realizable Value of
  Assumed<br>
  Annual Rates of Stock
  Price<br>
  Appreciation for Option
  Term<br>
  (1)<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  10%</p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top>
  <p>Ronald A. McDougall</p>
  </td>
  <td width=78 valign=top>
  <p>275,000</p>
  </td>
  <td width=96 valign=top>
  <p align=center>9.55%</p>
  </td>
  <td width=87 valign=top>
  <p>$32.50</p>
  </td>
  <td width=97 valign=top>
  <p>11/13/13</p>
  </td>
  <td width=101 valign=top>
  <p>$5,621,000</p>
  </td>
  <td width=100 valign=top>
  <p>$14,245,000</p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top>
  <p>Douglas H. Brooks</p>
  </td>
  <td width=78 valign=top>
  <p>125,000</p>
  </td>
  <td width=96 valign=top>
  <p align=center>4.34%</p>
  </td>
  <td width=87 valign=top>
  <p>$32.50</p>
  </td>
  <td width=97 valign=top>
  <p>11/13/13</p>
  </td>
  <td width=101 valign=top>
  <p>$2,555,000</p>
  </td>
  <td width=100 valign=top>
  <p>$&nbsp; 6,475,000</p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top>
  <p>Todd E. Diener</p>
  </td>
  <td width=78 valign=top>
  <p>45,000</p>
  </td>
  <td width=96 valign=top>
  <p align=center>1.56%</p>
  </td>
  <td width=87 valign=top>
  <p>$32.50</p>
  </td>
  <td width=97 valign=top>
  <p>11/13/13</p>
  </td>
  <td width=101 valign=top>
  <p>$&nbsp;&nbsp; 919,800</p>
  </td>
  <td width=100 valign=top>
  <p>$&nbsp; 2,331,000</p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top>
  <p>Roger F. Thomson</p>
  </td>
  <td width=78 valign=top>
  <p>46,500</p>
  </td>
  <td width=96 valign=top>
  <p align=center>1.62%</p>
  </td>
  <td width=87 valign=top>
  <p>$32.50</p>
  </td>
  <td width=97 valign=top>
  <p>11/13/13</p>
  </td>
  <td width=101 valign=top>
  <p>$&nbsp;&nbsp; 950,460</p>
  </td>
  <td width=100 valign=top>
  <p>$&nbsp; 2,408,700</p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top>
  <p>Charles M. Sonsteby</p>
  </td>
  <td width=78 valign=top>
  <p>45,000</p>
  </td>
  <td width=96 valign=top>
  <p align=center>1.56%</p>
  </td>
  <td width=87 valign=top>
  <p>$32.50</p>
  </td>
  <td width=97 valign=top>
  <p>11/13/13</p>
  </td>
  <td width=101 valign=top>
  <p>$&nbsp;&nbsp; 919,800</p>
  </td>
  <td width=100 valign=top>
  <p>$&nbsp; 2,331,000</p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top>
  <p>Wilson L. Craft</p>
  </td>
  <td width=78 valign=top>
  <p>45,000</p>
  </td>
  <td width=96 valign=top>
  <p align=center>1.56%</p>
  </td>
  <td width=87 valign=top>
  <p>$32.50</p>
  </td>
  <td width=97 valign=top>
  <p>11/13/13</p>
  </td>
  <td width=101 valign=top>
  <p>$&nbsp;&nbsp; 919,800</p>
  </td>
  <td width=100 valign=top>
  <p>$&nbsp; 2,331,000</p>
  </td>
 </tr>
</table>



<p>(1) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.</p>



<p><b>Stock Option Exercises
and Fiscal Year End Value Table</b></p>



<p>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.&nbsp; In
addition, this table includes the number of shares covered by both exercisable
and non-exercisable stock options at fiscal year end.&nbsp; Also reported are the values for &quot;in-the-money&quot; options which
represent the positive spread between the exercise price of any such existing
options and the $34.12 fiscal year end price of the Company's Common Stock.</p>



<table cellspacing=0 cellpadding=0 width=684>
 <tr>
  <td width=144 rowspan=2 valign=top>


  <p><br>
  <br>
  Name</p>
  </td>
  <td width=84 rowspan=2 valign=top>
  <p align=center>Shares<br>
  Acquired<br>
  On Exercise</p>
  </td>
  <td width=90 rowspan=2 valign=top>
  <p align=center><br>
  Value<br>
  Realized</p>
  </td>
  <td width=180 colspan=2 valign=top>
  <p align=center>Number of Unexercised<br>
  Options at Fiscal Year End</p>
  </td>
  <td width=186 colspan=2 valign=top>
  <p align=center>Value of Unexercised<br>
  In-the-Money Options at<br>
  Fiscal Year End</p>
  </td>
 </tr>
 <tr>
  <td width=89 valign=top>
  <p>Exercisable</p>
  </td>
  <td width=91 valign=top>
  <p>Unexercisable</p>
  </td>
  <td width=90 valign=top>
  <p>Exercisable</p>
  </td>
  <td width=96 valign=top>
  <p>Unexercisable</p>
  </td>
 </tr>
 <tr>
  <td width=144 valign=top>
  <p>Ronald A. McDougall</p>
  </td>
  <td width=84 valign=top>
  <p align=right>180,001</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$1,750,536</p>
  </td>
  <td width=89 valign=top>
  <p align=right>137,500</p>
  </td>
  <td width=91 valign=top>
  <p align=right>687,500</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 855,250</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$2,246,750</p>
  </td>
 </tr>
 <tr>
  <td width=144 valign=top>
  <p>Douglas H. Brooks</p>
  </td>
  <td width=84 valign=top>
  <p align=right>167,500</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$4,478,250</p>
  </td>
  <td width=89 valign=top>
  <p align=right>640,001</p>
  </td>
  <td width=91 valign=top>
  <p align=right>312,500</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$10,506,193</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$1,021,250</p>
  </td>
 </tr>
 <tr>
  <td width=144 valign=top>
  <p>Todd E. Diener</p>
  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp; 0&nbsp; </p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0&nbsp; </p>
  </td>
  <td width=89 valign=top>
  <p align=right>214,465</p>
  </td>
  <td width=91 valign=top>
  <p align=right>112,500</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp; 3,269,164</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 367,650</p>
  </td>
 </tr>
 <tr>
  <td width=144 valign=top>
  <p>Roger F. Thomson</p>
  </td>
  <td width=84 valign=top>
  <p align=right>46,501</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp; 182,789</p>
  </td>
  <td width=89 valign=top>
  <p align=right>&nbsp; 0&nbsp; </p>
  </td>
  <td width=91 valign=top>
  <p align=right>116,250</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0&nbsp; </p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 379,905</p>
  </td>
 </tr>
 <tr>
  <td width=144 valign=top>
  <p>Charles M. Sonsteby</p>
  </td>
  <td width=84 valign=top>
  <p align=right>&nbsp; 0&nbsp; </p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0&nbsp; </p>
  </td>
  <td width=89 valign=top>
  <p align=right>38,001</p>
  </td>
  <td width=91 valign=top>
  <p align=right>110,000</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 253,318</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 352,100</p>
  </td>
 </tr>
 <tr>
  <td width=144 valign=top>
  <p>Wilson L. Craft</p>
  </td>
  <td width=84 valign=top>
  <p align=right>16,286</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp; 315,406</p>
  </td>
  <td width=89 valign=top>
  <p align=right>64,215</p>
  </td>
  <td width=91 valign=top>
  <p align=right>84,000</p>
  </td>
  <td width=90 valign=top>
  <p align=right>$&nbsp;&nbsp;&nbsp;&nbsp; 748,098</p>
  </td>
  <td width=96 valign=top>
  <p align=right>$&nbsp;&nbsp; 243,200</p>
  </td>
 </tr>
</table>



<p><b>Equity Compensation Plan
Information</b></p>



<p>The following table sets forth information
concerning the shares of Common Stock that may be issued upon exercise of
options, warrants and rights under all of the Company's equity compensation
plans as of June 30, 2004, consisting of the 1991 Stock Option Plan for
Non-Employee Directors and Consultants, 1992 Incentive Stock Option Plan, Stock
Option and Incentive Plan, and 1999 Stock Option and Incentive Plan for
Non-Employee Directors and Consultants.&nbsp;
All of such plans have been approved by the shareholders of the Company.</p>



<hr><P STYLE="page-break-after: always"></P>



<p>&nbsp;</p>



<table cellspacing=0 cellpadding=0>
 <tr>
  <td width=176 valign=top>

  </td>
  <td width=142 valign=top>
  <p>(a)</p>
  </td>
  <td width=138 valign=top>
  <p>(b)</p>
  </td>
  <td width=199 valign=top>
  <p>(c)</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Plan category</p>
  </td>
  <td width=142 valign=top>
  <p>Number of securities<br>
  to be issued upon<br>
  exercise of<br>
  outstanding options,<br>
  warrants and rights</p>
  </td>
  <td width=138 valign=top>
  <p>Weighted-average<br>
  exercise price of<br>
  outstanding options,<br>
  warrants and rights</p>
  </td>
  <td width=199 valign=top>
  <p>Number of securities
  remaining<br>
  available for future
  issuance<br>
  under equity compensation
  plans<br>
  (excluding securities
  reflected<br>
  in column (a))</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Equity compensation<br>
  plans approved by<br>
  security holders</p>
  </td>
  <td width=142 valign=top>

  <p><br>
  10,347,346</p>
  </td>
  <td width=138 valign=top>

  <p><br>
  $26.78</p>
  </td>
  <td width=199 valign=top>

  <p><br>
  3,218,229</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Equity compensation<br>
  plans not approved by<br>
  security holders</p>
  </td>
  <td width=142 valign=top>

  <p><br>
  None</p>
  </td>
  <td width=138 valign=top>

  <p><br>
  None</p>
  </td>
  <td width=199 valign=top>

  <p><br>
  None</p>
  </td>
 </tr>
 <tr>
  <td width=176 valign=top>
  <p>Total</p>
  </td>
  <td width=142 valign=top>
  <p>10,347,346</p>
  </td>
  <td width=138 valign=top>
  <p>$26.78</p>
  </td>
  <td width=199 valign=top>
  <p>3,218,229</p>
  </td>
 </tr>
</table>





<p align=center><b>REPORT OF THE COMPENSATION COMMITTEE</b></p>

<p align=left><b>&nbsp;Compensation Philosophy</b></p>



<p>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.&nbsp; To this end, the following principles have
guided the development of the executive compensation program:</p>



<ul>
  <li>Provide competitive levels of compensation to attract
and retain the best qualified executive talent.&nbsp; The Compensation 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.<br>
&nbsp;</li>
  <li>Embrace a pay-for-performance philosophy by placing
significant amounts of compensation &quot;at risk&quot; - that is, compensation payouts
to executives will vary according to the overall performance of the Company.<br>
&nbsp;</li>
  <li>Directly link executives' interests with those of
shareholders by providing opportunities for long-term incentive compensation
based on changes in shareholder value.</li>
</ul>



<p>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.</p>



<p><b>Base Salaries</b></p>



<p>Executives' base salaries and total compensation are
targeted to be competitive at the 75<sup>th</sup> percentile 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.&nbsp; Positioning executives' base
salaries at this level is necessary for attracting, retaining and motivating
executives with the essential qualifications for managing the Company's growth.&nbsp; 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.&nbsp; Individual base salary levels are determined
by considering market data for each officer's position, level of
responsibility, performance, and experience.&nbsp;
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.</p>



<p><b>Annual Incentives</b></p>



<p>The Company's Profit Sharing Plan is a non-qualified annual incentive
arrangement in which all corporate employees, including executives, and certain
restaurant concept team employees, including executives, participate.&nbsp; The
program is designed to reflect the participating employees' contribution to the
growth of the </p>



<hr><P STYLE="page-break-after: always"></P>



<p>Company's Common Stock value by increasing the earnings of the Company.&nbsp;
The plan reinforces a strong teamwork ethic by making the basis for payouts to
corporate executives the same as for all other 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 participating members of such restaurant concept's
team.</p>



<p>At the beginning of a fiscal year, each executive is
assigned an Individual Participation Percentage (&quot;IPP&quot;) of the base salary for
such executive that targets overall total cash compensation for executives at
the 75<sup>th</sup> percentile of the market.&nbsp;
The IPPs reflect the Compensation Committee's desire that a significant
percentage of executives' total compensation be derived from variable pay
programs.</p>



<p><b>401(k) Savings Plan and
Savings Plan II</b></p>



<p>The Company's 401(k) Savings Plan (&quot;Plan I&quot;) and
Savings Plan II (&quot;Plan II&quot;) are designed to provide the Company's employees
with a tax-deferred long-term savings vehicle.&nbsp;
All amounts of a salaried participant's contribution up to a maximum of
5% of such participant's base compensation are matched by the Company in an
amount equal to 25% of such salaried participant's contribution.</p>



<p>Plan I is a qualified 401(k) plan.&nbsp; Participants in Plan I elect the percentage
of eligible pay they wish to contribute in an amount not to exceed the lesser
of (a) 50% of base salary and 100% of eligible bonus or (b) the annual maximum
as established by the Internal Revenue Service ($13,000 in 2004) as well as the
investment alternatives in which their contributions are to be invested.&nbsp; The Company's matching contribution for all
salaried Plan I participants is made in cash.&nbsp;
All participants in Plan I are considered non-highly compensated
employees as defined by the Internal Revenue Service.&nbsp; A participant's contributions vest immediately while Company
contributions vest twenty-five percent annually, beginning in the participant's
second year of eligibility.</p>



<p>Plan II is a non-qualified deferred compensation
plan.&nbsp; Plan II participants elect the
percentage of eligible pay they wish to defer into their Plan II account in an
amount not to exceed 50% of base salary and 100% of eligible bonus.&nbsp; They also elect the percentage of their
deferral account to be allocated among various investment options.&nbsp; The Company's matching contribution is made
in cash.&nbsp; Participants in Plan II are
considered a select group of management and highly compensated employees
according to the Department of Labor.&nbsp; A
participant's contributions vest immediately while Company contributions vest
twenty-five percent annually, beginning in the participant's second year of
eligibility.</p>



<p><b>Long-Term Incentives</b></p>



<p>All salaried employees of the Company, including
executives, are eligible for annual grants of tax-qualified and non-qualified
stock options.&nbsp; 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.&nbsp; 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 retirement.</p>



<p>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.&nbsp; Grantees do
not receive a benefit from stock options unless and until the market price of
the Company's Common Stock increases.&nbsp;
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.&nbsp;
Stock options are typically granted annually in November as part of a
fixed grant, based on a target value approved by the Compensation
Committee.&nbsp; The Compensation Committee
has the authority to substitute shares of restricted stock for stock options as
part of this fixed grant.</p>



<p>The Executive Long-Term Incentive Plan is a
performance-related plan using overlapping three-year cycles paid
annually.&nbsp; For corporate officers, the
criterion for payment is the Company's cumulative earnings per share over a
three-year period relative to a target established by the Compensation
Committee.&nbsp; For a restaurant concept
officer, the criterion is the three-year cumulative profit before taxes for
such restaurant concept relative to the target established by the Compensation
Committee.</p>



<hr><P STYLE="page-break-after: always"></P>



<p>Each participant will be assigned a specific dollar
target at the beginning of each three-year cycle for payout in a combination of
cash and restricted stock at the end of the designated three-year performance
period based on achievement relative to plan.&nbsp;
These three-year targets are established/revised as part of the annual
planning process.&nbsp; Once established and
approved, targets are fixed for the upcoming three-year cycle.&nbsp; The actual cash payment and number of shares
granted of restricted stock will vary based on the achievement to plan of
earnings per share for corporate officers, and profit before taxes for
restaurant concept officers.&nbsp; The
participant will receive the target payment if the target performance is
achieved for the three-year cycle; an above or below target payout will be made
based on actual performance compared to planned performance for the ending
three-year cycle.&nbsp; Any payouts made
under the Executive Long-Term Incentive Plan shall be made one-half in cash and
one-half in restricted stock, which restricted stock will vest one-third per
year over the next three years.</p>



<p>For fiscal year 2005, however, the Compensation
Committee has determined that grants under the Executive Long-Term Incentive
Plan shall be made on the following terms: Each participant will be assigned a
specific dollar target for the fiscal year to be paid in restricted stock at
the end of the fiscal year based on achievement relative to plan.&nbsp; The criterion for payment of corporate
officers is the Company's earnings per share for the fiscal year relative to a
target established by the Compensation Committee.&nbsp; For restaurant concept officers, the criterion is based on the
profit before taxes and the gross sales for such restaurant concept, and the
Company's earnings per share, for the fiscal year and all relative to the
target established by the Compensation Committee.&nbsp; The participant will receive the target payout if the target
performance is achieved for the fiscal year; an above or below target payout
will be made based upon actual performance compared to planned performance for
the fiscal year.&nbsp; Any payouts for fiscal
year 2005 shall be made all in restricted stock, which will vest one hundred
percent three years from the grant date of such stock.</p>



<p>All payouts under the Executive Long-Term Incentive
Plan will have a 150% payout cap, subject to override by the Chief Executive
Officer of the Company (except for payouts to the Chief Executive Officer,
which shall be subject to override by the Compensation Committee).&nbsp; No participant in the Executive Long-Term
Incentive Plan may receive a payout of more than 100,000 shares of restricted
stock and $1,500,000 in cash in any fiscal year.</p>



<p><b>Pay/Performance Nexus</b></p>



<p>The Company's executive compensation program has
resulted in a direct relationship between the compensation paid to executive
officers and the Company's performance.&nbsp;
See &quot;Five-Year Total Shareholder Return Comparison&quot; below.</p>



<p><b>CEO Compensation</b></p>



<p>Mr. McDougall was granted 275,000 stock options and
13,457 shares of restricted stock under the Company's Stock Option and
Incentive Plan.&nbsp; Approximately 51% of
Mr. McDougall's cash compensation for fiscal 2004 was incentive pay pursuant to
the Company's Profit Sharing Plan.&nbsp; Due
in part to Mr. McDougall relinquishing his responsibilities as Chief Executive
Officer to Mr. Brooks effective January 1, 2004, Mr. McDougall's total cash
compensation in fiscal year 2004 decreasedapproximately 22% from its
level in the 2003 fiscal year.</p>



<p>In January 2004, Mr. Brooks was elected Chief
Executive Officer.&nbsp; For fiscal 2004, Mr.
Brooks was granted 125,000 stock options and 8,645 shares of restricted stock
under the Company's Stock Option and Incentive Plan.&nbsp; Approximately 47% of Mr. Brooks' cash compensation for fiscal
2004 was incentive pay pursuant to the Company's Profit Sharing Plan.&nbsp; Like all Company executives, Mr. Brooks'
compensation is significantly affected by the Company's performance.&nbsp; In the 2004 fiscal year, Mr. Brooks' total
cash compensation increased approximately 7% from its level in the 2003 fiscal
year.</p>



<p><b>Federal Income Tax
Considerations</b></p>



<p>The Compensation Committee has considered the impact of Section 162(m) of the
Internal Revenue Code adopted under the Omnibus Budget Reconciliation Act of
1933.&nbsp; 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.&nbsp; It is the intent of the Company and </p>





<hr><P STYLE="page-break-after: always"></P>



<p>the Compensation Committee to qualify to the maximum extent possible its
executives' compensation for deductibility under applicable tax laws.&nbsp;
However, the Compensation Committee does not believe that compensation decisions
should be based solely upon the amount of compensation that is deductible for
federal income tax purposes.&nbsp; Accordingly, the Compensation Committee
reserves the right to award compensation that is or could become non-deductible
when it believes that such compensation is consistent with the strategic goals
of the Company and in its best interests.&nbsp;&nbsp; The Compensation
Committee's administration of the executive compensation program is in
accordance with the principles outlined at the beginning of this report.&nbsp;
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.&nbsp; The Company's financial performance supports the compensation
practices employed during the past year.&nbsp; No member of the Compensation
Committee serves or previously served as an employee or officer of the Company.</p>





<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Respectfully submitted,</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>COMPENSATION COMMITTEE</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>CECE SMITH (Chair)</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>DAN W. COOK, III</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>MARVIN J. GIROUARD</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>GEORGE R. MRKONIC</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>JAMES E. OESTERREICHER</b></p>
  </td>
 </tr>
</table>





<p align=center><b>REPORT OF THE AUDIT COMMITTEE</b></p>

<p>In accordance with its written charter adopted by
the Board of Directors, the Audit Committee assists the Board of Directors in
fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing and financial reporting practices of the Company.&nbsp; Company management is responsible for the
Company's internal controls and the financial reporting process.&nbsp; KPMG LLP, the Company's independent
auditors, is responsible for performing an independent audit of the Company's
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and for issuing a report
thereon.&nbsp; The Audit Committee's
responsibility is to monitor and oversee these processes.&nbsp; The Audit Committee also is responsible for
the selection of the Company's independent auditors.&nbsp; The Audit Committee is composed solely of independent directors
who are qualified for service under NYSE listing standards and SEC rules.</p>



<p>In this context, the Audit Committee held
discussions with management of the Company, who represented to the Audit
Committee that the Company's audited financial statements were prepared in
accordance with generally accepted accounting principles.&nbsp; Such discussions also involved an evaluation
of the independence of KPMG LLP.&nbsp; The
Audit Committee has reviewed and discussed the audited financial statements
with both management and the independent auditors.&nbsp; The Audit Committee also discussed with the independent auditors
the matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).&nbsp;
The Audit Committee has received the written disclosures and the letter
from the independent auditors required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees) and have discussed with
the independent auditors its independence in connection with its audit of the
Company's financial statements.</p>



<p>Based on the discussions with KPMG LLP concerning
the audit, the independence discussions, and the financial statement review,
and such other matters deemed relevant and appropriate by the Audit Committee,
the Audit Committee recommends to the Board that the financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2004 for filing with the SEC.&nbsp;
The Audit Committee approved the appointment of KPMG LLP as the
Company's independent auditors for the 2005 fiscal year.</p>



<hr><P STYLE="page-break-after: always"></P>



<p>&nbsp;</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Respectfully submitted,</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>AUDIT COMMITTEE</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>JAMES E. OESTERREICHER
  (Chair)</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>ROBERT M. GATES </b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>MARVIN J. GIROUARD </b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>RON KIRK</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>CECE SMITH</b></p>
  </td>
 </tr>
</table>







<p align=center><b>STOCK OWNERSHIP OF CERTAIN PERSONS</b></p>

<p>The following table shows (a) certain information as
to all persons known by the Company to beneficially own more than 5% of the
Common Stock of the Company and (b) the ownership of the Company's Common Stock
by the named executive officers, and all executive officers and directors as a
group.</p>



<table cellspacing=0 cellpadding=0 width="658">
 <tr>
  <td width=202 valign=top>

  <p><br>
  Name</p>
  </td>
  <td width=201 valign=top>
  <p>Number of Shares of Common<br>
  Stock Beneficially Owned
  as of <br>
  August 24, 2004</p>
  </td>
  <td width=176 valign=top>
  <p>Number Attributable to <br>
  Options Exercisable Within<br>
  60 Days of August 24, 2004</p>
  </td>
  <td width=79 valign=top>

  <p><br>
  Percent</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>
  <p>Barclays Global Investors,
  NA<br>
  45 Fremont Street<br>
  San Francisco, CA 94105</p>

  </td>
  <td width=201 valign=top>

  <p><br>
  10,295,495&nbsp; (1)</p>
  </td>
  <td width=176 valign=top>

  <p><br>
  (4)</p>
  </td>
  <td width=79 valign=top>

  <p><br>
  11.46%</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>
  <p>FMR Corp.<br>
  82 Devonshire Street<br>
  Boston, MA&nbsp; 02109</p>
  </td>
  <td width=201 valign=top>

  <p><br>
  5,597,580&nbsp; (2)</p>
  </td>
  <td width=176 valign=top>

  <p><br>
  (4)</p>
  </td>
  <td width=79 valign=top>

  <p><br>
  6.23%</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>
  <p>Barrow, Hanley, Mewhinney
  &amp;<br>
  Strauss, Inc.<br>
  One McKinney Plaza<br>
  3232 McKinney Avenue, 15<sup>th<br>
  </sup>
  Floor<br>
  Dallas, TX 75204</p>
  </td>
  <td width=201 valign=top>

  <p><br>
  5,390,330&nbsp; (3)</p>
  </td>
  <td width=176 valign=top>

  <p><br>
  (4)</p>
  </td>
  <td width=79 valign=top>

  <p><br>
  6.00%</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>

  <p>Ronald A. McDougall</p>
  </td>
  <td width=201 valign=top>

  <p>175,872&nbsp; (5) (6)</p>
  </td>
  <td width=176 valign=top>

  <p>137,500 (7)</p>
  </td>
  <td width=79 valign=top>

  <p>*</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>

  <p>Douglas H. Brooks</p>
  </td>
  <td width=201 valign=top>

  <p>626,554 (5) (6)</p>
  </td>
  <td width=176 valign=top>

  <p>475,001 (7)</p>
  </td>
  <td width=79 valign=top>

  <p>*</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>

  <p>Todd E. Diener</p>
  </td>
  <td width=201 valign=top>

  <p>263,445 (5) (6)</p>
  </td>
  <td width=176 valign=top>

  <p>214,465 (7)</p>
  </td>
  <td width=79 valign=top>

  <p>*</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>

  <p>Roger F. Thomson</p>
  </td>
  <td width=201 valign=top>

  <p>15,792 (5) (6)</p>
  </td>
  <td width=176 valign=top>

  <p>&nbsp; 0&nbsp; (7)</p>
  </td>
  <td width=79 valign=top>

  <p>*</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>

  <p>Charles M. Sonsteby</p>
  </td>
  <td width=201 valign=top>

  <p>59,607 (5) (6)</p>
  </td>
  <td width=176 valign=top>

  <p>38,001 (7)</p>
  </td>
  <td width=79 valign=top>

  <p>*</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>

  <p>Wilson L. Craft</p>
  </td>
  <td width=201 valign=top>

  <p>77,534 (5)(6)</p>
  </td>
  <td width=176 valign=top>

  <p>64,215 (7)</p>
  </td>
  <td width=79 valign=top>

  <p>*</p>
  </td>
 </tr>
 <tr>
  <td width=202 valign=top>
  <p>All Executive Officers<br>
  and Directors as a<br>
  Group (22 persons)</p>
  </td>
  <td width=201 valign=top>

  <p>1,928,976 (5) (6)</p>
  </td>
  <td width=176 valign=top>

  <p>1,536,521 (7)</p>
  </td>
  <td width=79 valign=top>

  <p>2.11%</p>
  </td>
 </tr>
</table>



<p>*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less than 1%.</p>



<p>(1) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based
on information contained in Schedule 13G dated August 10, 2004.&nbsp; The Schedule 13G reported that Barclays
Global Investors, NA owned and had sole dispositive power over 10,295,495
shares of Common Stock, and had sole voting power over 9,123,534 of such
shares.</p>

<p>(2) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based
on information contained in Schedule 13G dated February 13, 2004.&nbsp; The Schedule 13G reported that FMR Corp.
owned and had sole dispositive power over 5,597,580 shares of Common Stock, and
had sole voting power over 375,780 of such shares.</p>

<hr><P STYLE="page-break-after: always"></P>

<p>(3) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based
on information contained in Schedule 13G dated February 16, 2004.&nbsp; The Schedule 13G reported that Barrow,
Hanley, Mewhinney &amp; Strauss, Inc. owned and had sole dispositive power over
5,390,330 shares of Common Stock, and had sole voting power over 2,942,330 of
such shares.</p>

<p>(4) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not
Applicable</p>

<p>(5) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beneficial
ownership has been determined in accordance with the rules of the Securities
and Exchange Commission.&nbsp; 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.</p>

<p>(6) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Includes
shares of Common Stock which may be acquired by exercise of options vested, or
vesting within 60 days of August 24, 2004, under the Company's 1992 Incentive
Stock Option Plan, and Stock Option and Incentive Plan, as applicable.</p>

<p>(7) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.
McDougall owns 825,000 stock options, 137,500 of which have vested, or will
vest, within 60 days of August 24, 2004.&nbsp;
Mr. Brooks owns 787,501 stock options, 475,001 of which have vested, or
will vest, within 60 days of August 24, 2004.&nbsp;
Mr. Diener owns 326,965 stock options, 214,465 of which have vested, or
will vest, within 60 days of August 24, 2004.&nbsp;
Mr. Thomson owns 116,250 stock options, none of which have vested, or
will vest, within 60 days of August 24, 2004.&nbsp;
Mr. Sonsteby owns 148,001 stock options, 38,001 of which have vested, or
will vest, within 60 days of August 24, 2004.&nbsp;
Mr. Craft owns 148,215 stock options, 64,215 of which have vested, or
will vest, within 60 days of August 24, 2004.&nbsp;
All Executive Officers and Directors as a Group own 3,565,692 stock
options, 1,536,521 of which have vested, or will vest, within 60 days of August
24, 2004.</p>







<p align=center><b>FIVE-YEAR TOTAL SHAREHOLDER RETURN COMPARISON</b></p>

<p>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&amp;P 500 Index and the
S&amp;P Restaurant Industry Index.&nbsp; A
list of the returns follows the graph.</p>





<p><img border="0" src="image003.gif" width="550" height="406"></p>











<p>The graph assumes a $100 initial investment and the
reinvestment of dividends.&nbsp; The values
shown are neither indicative nor determinative of future performance.</p>



<table cellspacing=0 cellpadding=0 width=642>
 <tr>
  <td width=132 valign=top>

  </td>
  <td width=90 valign=top>
  <p>1999</p>
  </td>
  <td width=84 valign=top>
  <p>2000</p>
  </td>
  <td width=96 valign=top>
  <p>2001</p>
  </td>
  <td width=96 valign=top>
  <p>2002</p>
  </td>
  <td width=72 valign=top>
  <p>2003</p>
  </td>
  <td width=72 valign=top>
  <p>2004</p>
  </td>
 </tr>
 <tr>
  <td width=132 valign=top>
  <p>Brinker International</p>
  </td>
  <td width=90 valign=top>
  <p>$100.00</p>
  </td>
  <td width=84 valign=top>
  <p>$107.50</p>
  </td>
  <td width=96 valign=top>
  <p>$135.59</p>
  </td>
  <td width=96 valign=top>
  <p>$175.46</p>
  </td>
  <td width=72 valign=top>
  <p>$196.24</p>
  </td>
  <td width=72 valign=top>
  <p>$186.10</p>
  </td>
 </tr>
 <tr>
  <td width=132 valign=top>
  <p>S&amp;P 500</p>
  </td>
  <td width=90 valign=top>
  <p>$100.00</p>
  </td>
  <td width=84 valign=top>
  <p>$107.25</p>
  </td>
  <td width=96 valign=top>
  <p>$91.34</p>
  </td>
  <td width=96 valign=top>
  <p>$74.91</p>
  </td>
  <td width=72 valign=top>
  <p>$75.10</p>
  </td>
  <td width=72 valign=top>
  <p>$89.45</p>
  </td>
 </tr>
 <tr>
  <td width=132 valign=top>
  <p>S&amp;P Restaurants</p>
  </td>
  <td width=90 valign=top>
  <p>$100.00</p>
  </td>
  <td width=84 valign=top>
  <p>$76.93</p>
  </td>
  <td width=96 valign=top>
  <p>$75.08</p>
  </td>
  <td width=96 valign=top>
  <p>$85.28</p>
  </td>
  <td width=72 valign=top>
  <p>$71.85</p>
  </td>
  <td width=72 valign=top>
  <p>$94.00</p>
  </td>
 </tr>
</table>





<hr><P STYLE="page-break-after: always"></P>





<p align=center><b>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</b></p>

<p>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.&nbsp; Except for one late filing by Mr. Brooks in fiscal 2004 for one
transaction in fiscal 2004, and three late filings by Mr. Mark Tormey in August
2004 for one transaction in fiscal 2003 and two transactions in fiscal 2004,
the Company believes that all filing requirements were satisfied.&nbsp; In making these disclosures and filing the
reports, the Company has relied solely on written representations from certain
reporting persons.</p>



<p align=center><b>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</b></p>

<p>The policy of the Company is, to the extent
practicable, to avoid transactions (except those which are employment related)
with officers, directors, and affiliates.&nbsp;
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.&nbsp; Except as noted below,
there were no transactions required to be reported.</p>



<p>Companies controlled by Roger T. Staubach, a
director of the Company, provided real estate brokerage services during the
2004 fiscal year in connection with the sale by the Company of three closed
restaurant properties to unrelated third parties and the sublease by the
Company of one closed restaurant property to an unrelated third party.&nbsp; These companies were paid $149,531 by the Company
for the services provided on the disposition of these surplus properties.</p>



<p>On August 26, 2004, Mr. McDougall agreed to serve as
a consultant to the Company following the termination of his service on the
Board of Directors effective November 4, 2004.&nbsp;
Under this agreement, Mr. McDougall will thereafter remain a consultant
to the Company through November 3, 2006.&nbsp;
During the term of the agreement and for three years after termination,
Mr. McDougall has also agreed to not be employed by or consult for any
competitor of the Company.&nbsp; Mr. McDougall
will receive for his services during the term of the agreement annual
compensation of $150,000 (payable quarterly), plus reimbursement of reasonable
expenses incurred in connection with his consulting services.&nbsp; Upon Mr. McDougall's death, termination for
cause or voluntary termination of services by Mr. McDougall, no further payment
shall be made pursuant to the consulting agreement except for accrued and
unpaid compensation and reimbursements.</p>



<p align=center><b>SHAREHOLDERS' PROPOSALS</b></p>

<p>Any proposals that shareholders of the Company
desire to have presented at the 2005 annual meeting of shareholders must be
received by the Company at its principal executive offices no later than May
16, 2005.</p>



<hr><P STYLE="page-break-after: always"></P>



<p align=center><b>MISCELLANEOUS</b></p>

<p>The accompanying proxy is being solicited on behalf
of the Board of Directors of the Company.&nbsp;
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.&nbsp; 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.&nbsp;
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.</p>



<p>The Annual Report to Shareholders of the Company,
including financial statements for the fiscal year ended June 30, 2004,
accompanying this Proxy Statement is not deemed to be a part of the Proxy
Statement.</p>



<table border=0 cellspacing=0 cellpadding=0>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p><b>By Order of the Board
  of Directors,</b></p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>ROGER F. THOMSON</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>

  </td>
  <td width=319 valign=top>
  <p>Secretary</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>Dallas, Texas</p>
  </td>
  <td width=319 valign=top>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top>
  <p>September 13, 2004</p>
  </td>
  <td width=319 valign=top>

  </td>
 </tr>
</table>



<hr><P STYLE="page-break-after: always"></P>



<hr size="5" noshade>
<table WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
  <tr valign="TOP">
    <td width="81%"><font face="Arial, Helvetica, sans-serif" size="2"><b>THIS
    PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.</b>
    </font></td>
    <td width="7%" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">Mark Here<br>
    for Address<br>
    Change or<br>
    Comments </font></td>
    <td width="12%" valign="bottom"><font size="6">__ </font></td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="81%">&nbsp;</td>
    <td colspan="2"><font face="Arial, Helvetica, sans-serif" size="1"><b>PLEASE
    SEE REVERSE SIDE</b> </font></td>
  </tr>
</table>
<p><br>
</p>
<table cellpadding="0" cellspacing="0" width="100%">
  <tr valign="TOP">
    <td colspan="6"><font face="Arial, Helvetica, sans-serif" size="1"><b>THE
    BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL. </b></font>
    </td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td colspan="8"><font face="Arial, Helvetica, sans-serif" size="1"><b>THE
    BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL AS DESCRIBED
    IN THE PROXY STATEMENT. &nbsp;</b></font></td>
  </tr>
  <tr valign="TOP">
    <td colspan="5"><font face="Arial, Helvetica, sans-serif" size="1">
    1.&nbsp;ELECTION OF DIRECTORS </font></td>
    <td>&nbsp;</td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td valign="bottom"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td valign="bottom"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">FOR</font></td>
    <td align="center" valign="bottom">
    <font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">AGAINST</font></td>
    <td align="center" valign="bottom">
    <font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">ABSTAIN</font></td>
  </tr>
  <tr valign="TOP">
    <td>&nbsp;</td>
    <td colspan="2" align="center">
    <font face="Arial, Helvetica, sans-serif" size="1"><b>FOR</b> all nominees
    <br>
    listed below <br>
    (except as marked <br>
    to the contrary)</font></td>
    <td colspan="2" align="center">
    <font face="Arial, Helvetica, sans-serif" size="1"><b>WITHHOLD<br>
    AUTHORITY</b> <br>
    to vote for all nominees <br>
    listed below</font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font face="Arial, Helvetica, sans-serif" size="1">2. </font></td>
    <td><font face="Arial, Helvetica, sans-serif" size="1">RATIFICATION OF
    APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS FOR FISCAL 2005</font></td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center"><br>
    __</td>
    <td align="center">&nbsp;</td>
    <td align="center"><br>
    ___</td>
    <td align="center">&nbsp;</td>
    <td align="center"><br>
    ___</td>
  </tr>
  <tr valign="TOP">
    <td>&nbsp;</td>
    <td colspan="2" align="center" rowspan="2">
    <br>
    ____</td>
    <td colspan="2" align="center" rowspan="2">
    <br>
    ____</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="8"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr valign="TOP">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="8"><font face="Arial, Helvetica, sans-serif" size="1"><b>THE
    BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE FOLLOWING PROPOSAL AS
    DESCRIBED IN THE PROXY STATEMENT.</b></font></td>
  </tr>
  <tr valign="TOP">
    <td rowspan="4"><font face="Arial, Helvetica, sans-serif" size="1">NOMINEES:
    </font></td>
    <td rowspan="4"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td rowspan="4"><font face="Arial, Helvetica, sans-serif" size="1">01
    Douglas H. Brooks<br>
    02 Dan W. Cook, III <br>
    03 Robert M. Gates <br>
    04 Marvin J. Girouard <br>
    05 Ronald Kirk </font></td>
    <td rowspan="4"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td rowspan="4"><font face="Arial, Helvetica, sans-serif" size="1">06 George
    R. Mrkonic<br>
    07 Erle Nye <br>
    08 James E. Oesterreicher <br>
    09 Cece Smith </font></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td valign="bottom"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td valign="bottom"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">FOR</font></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">AGAINST</font></td>
    <td align="center" valign="bottom">&nbsp;</td>
    <td align="center" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">ABSTAIN</font></td>
  </tr>
  <tr valign="TOP">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font face="Arial, Helvetica, sans-serif" size="1">3. </font></td>
    <td><font face="Arial, Helvetica, sans-serif" size="1">ADOPTION OF A
    SMOKE-FREE POLICY FOR ALL COMPANY OWNED RESTAURANTS.</font></td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center"><br>
    ___</td>
    <td align="center">&nbsp;</td>
    <td align="center"><br>
    ___</td>
    <td align="center">&nbsp;</td>
    <td align="center"><br>
    ___</td>
  </tr>
  <tr valign="TOP">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td>&nbsp;</td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="TOP">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font face="Arial, Helvetica, sans-serif" size="1">4. </font></td>
    <td colspan="7"><font face="Arial, Helvetica, sans-serif" size="1">IN THE
    DISCRETION OF THE PROXIES ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
    THE MEETING OR ANY ADJOURNMENT THEREOF&nbsp;</font></td>
  </tr>
  <tr valign="TOP">
    <td colspan="6">&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center"><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
  </tr>
  <tr valign="TOP">
    <td colspan="6" valign="bottom">
    <font face="Arial, Helvetica, sans-serif" size="1">INSTRUCTION: To withhold
    authority to vote for any individual nominee, write that nominee's name in
    the space below. </font><font size="1"><br>
    <br>
    </font><hr size="1" noshade></td>
    <td>&nbsp;</td>
    <td colspan="8" align="center"><hr size="1" noshade>
    <p><font face="Arial, Helvetica, sans-serif" size="1"><b>*** IF YOU WISH TO
    VOTE BY TELEPHONE OR INTERNET, <br>
    PLEASE READ THE INSTRUCTIONS BELOW *** </b></font></p>
    <hr size="1" noshade></td>
  </tr>
</table>
<p></p>
<table width="100%" border="0" cellpadding="0">
  <tr valign="bottom" align="left">
    <td width="7%" valign="top">
    <p align="left"><font face="Times New Roman, Times, serif" size="2"><b>
    Signature<br>
    </b></font></td>
    <td width="28%"><br>
    <hr size="1" noshade></td>
    <td width="7%" valign="top">
    <font face="Times New Roman, Times, serif" size="2"><b>&nbsp;&nbsp;Signature<br>
    </b></font></td>
    <td width="28%"><br>
    <hr size="1" noshade></td>
    <td width="4%" valign="top">
    <font face="Times New Roman, Times, serif" size="2"><b>&nbsp;&nbsp;Date </b></font>
    </td>
    <td width="28%"><br>
    <hr size="1" noshade></td>
  </tr>
  <tr>
    <td colspan="6" height="28">
    <p align="left"><font face="Arial, Helvetica, sans-serif" size="1"><b>Please
    date this proxy and sign your name exactly as it appears hereon. Where there
    is more than one owner, each should sign. When signing as an attorney,
    administrator, executor, guardian, or trustee, please add your title as
    such. If executed by a corporation, the proxy should be signed by a duly
    authorized officer. Please sign this proxy and return it promptly whether or
    not you expect to attend the meeting. You may nevertheless vote in person if
    you do attend. </b></font></td>
  </tr>
</table>
<p></p>
<hr width="100%" size="1" noshade>
<div align="center">
  <font face="Arial, Helvetica, sans-serif" size="2"><b>^ FOLD AND DETACH HERE ^</b></font>
</div>
<p align="CENTER"><font FACE="Arial, Helvetica, sans-serif" SIZE="2"><b>
<font size="4">Vote by Internet or Telephone or Mail <br>
</font><font size="3">24 Hours a Day, 7 Days a Week </font></b></font></p>
<p ALIGN="CENTER"><font face="Arial, Helvetica, sans-serif" size="3"><b>
Telephone and Internet voting is available through 11:59 PM EST<br>
the day prior to annual meeting day. </b></font></p>
<p ALIGN="CENTER"><font face="Arial, Helvetica, sans-serif" size="3"><b>Your
Telephone or Internet vote authorizes the named proxies to vote your shares in
the same manner as if you marked, signed and returned your proxy card. </b>
</font></p>
<table WIDTH="100%" CELLPADDING="0" CELLSPACING="0" height="131">
  <tr VALIGN="TOP" align="center">
    <td><font face="Arial, Helvetica, sans-serif" size="2"><b>Internet <br>
    http://www.eproxy.com/eat</b></font></td>
    <td valign="middle">&nbsp;</td>
    <td valign="middle" colspan="2">
    <font face="Arial, Helvetica, sans-serif" size="2"><b>Telephone <br>
    1-800-435-6710</b></font></td>
    <td valign="middle">&nbsp;</td>
    <td><font face="Arial, Helvetica, sans-serif" size="2"><b>Mail</b></font></td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="30%">
    <p align="center"><br>
    <font face="Arial, Helvetica, sans-serif" size="2">Use the Internet to vote
    your proxy. <br>
    Have your proxy card in hand when <br>
    you access the web site. </font></td>
    <td align="center" width="5%" valign="middle">
    <div align="center">
      <font face="Arial, Helvetica, sans-serif" size="3"><b>OR</b> </font>
    </div>
    </td>
    <td align="center" width="5%" valign="middle">&nbsp;</td>
    <td WIDTH="25%">
    <p align="center"><br>
    <font face="Arial, Helvetica, sans-serif" size="2">Use any touch-tone
    telephone to <br>
    vote your proxy. Have your proxy <br>
    card in hand when you call. </font></td>
    <td WIDTH="5%" valign="middle">
    <div align="center">
      <font face="Arial, Helvetica, sans-serif" size="3"><b>OR</b> </font>
    </div>
    </td>
    <td WIDTH="30%">
    <div align="center">
      <br>
      <font face="Arial, Helvetica, sans-serif" size="2">Mark, sign and date <br>
      your proxy card <br>
      and <br>
      return it in the <br>
      enclosed postage-paid envelope. </font>
    </div>
    </td>
  </tr>
</table>
<div align="center">
  <br>
  <b><font face="Arial, Helvetica, sans-serif" size="3">If you vote your proxy
  by Internet or by Telephone, <br>
  you do NOT need to mail back your proxy card. </font></b>
</div>
<hr size="5" noshade>
<p ALIGN="center">&nbsp;</p>
<hr size="5" noshade>
<p ALIGN="center"><font FACE="Arial, Helvetica, sans-serif" SIZE="3"><b>BRINKER
INTERNATIONAL, INC. </b></font></p>
<p ALIGN="CENTER"><font FACE="Arial, Helvetica, sans-serif" SIZE="2"><b>PROXY
</b></font></p>
<p><font FACE="Arial, Helvetica, sans-serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
hereby (a) acknowledges receipt of the Notice of Annual Meeting of Shareholders
of Brinker International, Inc. (the &quot;Company&quot;) to be held at the InterContinental Hotel, 15201 Dallas Parkway, Dallas, Texas 75248, on Thursday,
November 4, 2004 at 10:00 a.m., local time, and the Proxy Statement in
connection therewith, and (b) appoints Douglas H. Brooks and Marvin J. Girouard,
and each of them, as the undersigned's proxies with full power of substitution
and revocation, for and in the name, place and stead of the undersigned, to vote
upon and act with respect to all of the shares of Common Stock of the Company
standing in the name of the undersigned or with respect to which the undersigned
is entitled to vote and act at said meeting or at any adjournment thereof, and
the undersigned directs that the undersigned's proxy be voted as shown on the
reverse side hereof or as directed via Telephone or Internet. </font></p>
<p><font FACE="Arial, Helvetica, sans-serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If more than one
of the proxies shall be present in person or by substitute at the meeting or any
adjournment thereof, all of said proxies so present and voting, either in person
or by substitute, shall exercise all of the powers hereby given or given via
Telephone or Internet. </font></p>
<p><font FACE="Arial, Helvetica, sans-serif" SIZE="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS PROXY WILL
BE VOTED AS SPECIFIED ON THE REVERSE SIDE OR BY TELEPHONE OR INTERNET. </b>
</font></p>
<p><font FACE="Arial, Helvetica, sans-serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
hereby revokes any proxy or proxies heretofore given to vote upon or act with
respect to such stock and hereby ratifies and confirms all that said proxies,
their substitutes, or any of them, may lawfully do by virtue hereof. </font></p>
<p ALIGN="CENTER"><font FACE="Arial, Helvetica, sans-serif" SIZE="2"><b>
(Continued On Reverse Side) </b></font></p>
<div align="center">
  <hr noshade size="1">
  <p><b><font face="Arial, Helvetica, sans-serif" size="2">Address
  Change/Comments <font size="1">(Mark the corresponding box on the reverse
  side)</font></font></b> </p>
  <hr noshade size="1"><hr noshade size="1">
  <p><br>
</div>
<p></p>
<hr width="100%" size="1" noshade>
<div align="center">
  <font face="Arial, Helvetica, sans-serif" size="2"><b>^ FOLD AND DETACH HERE ^</b></font>
</div>
<p></p>
<p ALIGN="CENTER"><font FACE="Arial, Helvetica, sans-serif" SIZE="5"><b>YOUR
VOTE IS IMPORTANT! </b></font></p>
<p ALIGN="CENTER"><font FACE="Arial, Helvetica, sans-serif" SIZE="4"><b>You can
vote in one of three ways: </b></font></p>
<table WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
  <tr valign="TOP">
    <td width="5%"><font face="Arial, Helvetica, sans-serif" size="3"><b>1.</b>
    </font></td>
    <td>&nbsp;</td>
    <td width="95%"><font face="Arial, Helvetica, sans-serif" size="3">Mark,
    sign and date your proxy card and return it promptly in the enclosed
    envelope. </font></td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="5%">&nbsp;</td>
    <td>&nbsp;</td>
    <td WIDTH="95%">&nbsp;</td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="100%" colspan="3">
    <div align="center">
      <font face="Arial, Helvetica, sans-serif" size="3"><b><i><u>or</u></i></b></font></div>
    </td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="5%">&nbsp;</td>
    <td>&nbsp;</td>
    <td WIDTH="95%">&nbsp;</td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="5%"><font face="Arial, Helvetica, sans-serif" size="3"><b>2.</b></font></td>
    <td>&nbsp;</td>
    <td WIDTH="95%"><font face="Arial, Helvetica, sans-serif" size="3">Call <b>
    toll free 1-800-435-6710</b> on a Touch Tone Telephone and follow the
    instructions on the reverse side. There is <b>NO CHARGE</b> to you for this
    call.</font></td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="5%">&nbsp;</td>
    <td>&nbsp;</td>
    <td WIDTH="95%">&nbsp;</td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="100%" colspan="3">
    <div align="center">
      <font face="Arial, Helvetica, sans-serif" size="3"><b><i><u>or</u></i></b></font></div>
    </td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="5%">&nbsp;</td>
    <td>&nbsp;</td>
    <td WIDTH="95%">&nbsp;</td>
  </tr>
  <tr VALIGN="TOP">
    <td WIDTH="5%"><font face="Arial, Helvetica, sans-serif" size="3"><b>3.</b></font></td>
    <td>&nbsp;</td>
    <td WIDTH="95%"><font face="Arial, Helvetica, sans-serif" size="3">Vote by
    Internet at our Internet Address: http://www.eproxy.com/eat</font></td>
  </tr>
</table>
<p><br>
<font face="Arial, Helvetica, sans-serif"><b>PLEASE VOTE </b></font></p>
<p>&nbsp; </p>
<hr size="5" noshade>
<p align="center">&nbsp;</p>



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