Bloomin' Brands, Inc. 10-Q

Item 5. Other Information 2021 Short-Term Incentive Plan (“STIP”) As previously disclosed, the Compensation Committee of the Board of Directors of the Company (the “Committee”) implemented a qualitative bonus design for the first-half of fiscal 2021, with an intention to implement a formal set of financial and/or strategic goals for the second-half of fiscal 2021 due to the uncertainty caused by the COVID-19 pandemic. The Committee’s qualitative review of the first-half reflects a strong emphasis on relative performance as compared to key competitors and will be based on the Company’s performance in navigating and recovering from the COVID-19 pandemic, the Company’s relative performance on year-over-year comparable sales growth when compared to casual dining competitors, and the Company’s progress on continued sustainable savings targets set for 2021. The first-half payout will be capped at 50% of the aggregate annual target amount, with the full amount earned if target performance is achieved. On August 2, 2021, the Committee established the goals for the second half of fiscal 2021 and determined that it was appropriate to return to the metrics established under the Company’s pre-COVID STIP design, which was previously disclosed in the Company’s Proxy Statements on Schedule 14A filed on April 9, 2020 and March 30, 2021, and approved the following: 2021 Second-Half Metric Weight Adjusted Revenue Growth (2-year basis) 40% Adjusted Operating Margin Expansion (2-year basis) 40% Strategic Objective – Cost Savings 20% The second-half payout will be capped at 100% of the aggregate annual target amount (100% of the second-half payout will be earned if target metrics are achieved and 200% of the second-half payout will be earned if maximum metrics are achieved). The full-year payout will be capped at 150% of the aggregate annual target amount. The 2021 STIP design, including the second-half metrics and weighting approved by the Committee, reflects the Company’s continued commitment to following a performance-based incentive compensation strategy and positions the Company for success in the second-half of fiscal 2021 and in the long-term. The Committee will evaluate the results of the 2021 STIP following completion of fiscal 2021, and as in all performance years, may apply positive or negative discretion in approving the final STIP payout. 57 Table of Contents BLOOMIN’ BRANDS, INC. Carrabba’s Italian Grill Purchase and Sale of Royalty Payment Stream and Termination of Royalty Agreement On August 2, 2021, Carrabba’s Italian Grill, LLC (“CIG”) and OSI Restaurant Partners, LLC (“OSI”), both of which are indirect, wholly-owned subsidiaries of the Company, entered into the Purchase and Sale of Royalty Payment Stream and Termination of Royalty Agreement (the “Royalty Termination Agreement”) by and among CIG, OSI, Mangia Beve, Inc. (“MBI”), Mangia Beve II, Inc. (“MBI II”), Original, Inc. (“Original”), Voss, Inc. (“Voss”), John C. Carrabba, III, (“Johnny Carrabba”), Damian C. Mandola (“Damian Mandola”) and John C. Carrabba, Jr. (“John C. Carrabba, Jr.”, and together with MBI, MBI II, Original, Voss, Johnny Carrabba, and Damian Mandola, the “Carrabba’s Founders”). Pursuant to the Royalty Termination Agreement, the Royalty Agreement, dated April 1995, by and among CIG, OSI and the Carrabba’s Founders, as amended, and CIG’s obligation to pay future royalties on U.S. Carrabba’s Italian Grill restaurant sales and lump sum royalty fees on Carrabba’s Italian Grill restaurants opened outside the U.S. was terminated as of August 2, 2021. In addition, the Royalty Termination Agreement provides that each of CIG and the Carrabba’s Founders will accept and redeem Carrabba’s gift cards of the other party consistent with past practices and subject to certain conditions, confirms and acknowledges CIG’s sole and exclusive ownership of all intellectual property related to the Carrabba’s Italian Grill restaurant concept, and gives CIG a right of first refusal to acquire the two original Carrabba’s restaurants owned and operated by the Carrabba’s Founders subject to certain conditions and exceptions. CIG agreed to pay the Carrabba’s Founders Sixty-One Million Eight Hundred and Eighty Thousand Dollars (USD $61,880,000) in consideration of the Carrabba’s Founders’ entry into the Royalty Termination Agreement. The foregoing summary of the Royalty Termination Agreement does not purport to be complete and is qualified in its entirety by the full text of the Royalty Termination Agreement, a copy of which is filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q and is incorporated herein by reference. 58 Table of Contents BLOOMIN’ BRANDS, INC. Item 6. Exhibits EXHIBIT NUMBER DESCRIPTION OF EXHIBITS FILINGS REFERENCED FOR INCORPORATION BY REFERENCE 3.1 Third Amended and Restated Certificate of Incorporation May 19, 2021 Form 8-K, Exhibit 3.1 4.1 Indenture, dated as of April 16, 2021, by and among Bloomin’ Brands, Inc., OSI Restaurant Partners, LLC, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee April 20, 2021 Form 8-K, Exhibit 4.1 4.2 Form of 5.125% Senior Notes due 2029 April 20, 2021 Form 8-K, Included as Exhibit A to Exhibit 4.1 10.1 Second Amended and Restated Credit Agreement, dated April 16, 2021, by and among Bloomin’ Brands, Inc., OSI Restaurant Partners, LLC, the guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative Agent April 20, 2021 Form 8-K, Exhibit 10.1 10.2 Purchase and Sale of Royalty Payment Stream and Termination of Royalty Agreement dated August 2, 2021 by and among Carrabba’s Italian Grill, LLC , OSI Restaurant Partners, LLC Mangia Beve, Inc., Mangia Beve II, Inc., Original, Inc., Voss, Inc., John C. Carrabba, III, Damian C. Mandola and John C. Carrabba, Jr. Filed herewith 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1) Furnished herewith 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1) Furnished herewith 101.INS Inline XBRL Instance Document Filed herewith 101.SCH Inline XBRL Taxonomy Extension Schema Document Filed herewith 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed herewith 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed herewith 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) Filed herewith (1) These certifications are not deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. These certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates them by reference. 59 Table of Contents BLOOMIN’ BRANDS, INC. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 5, 2021 BLOOMIN’ BRANDS, INC. (Registrant) By: /s/ Christopher Meyer Christopher Meyer Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) [Remainder of page intentionally left blank]