SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14-a6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
OUTBACK STEAKHOUSE, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined.):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee previously paid with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
(LOGO)
OUTBACK STEAKHOUSE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 23, 1997
Notice is hereby given that the Annual Meeting of Stockholders of
OUTBACK STEAKHOUSE, INC. (the "Company") will be held at the Tampa
Convention Center, 333 South Franklin Street, Tampa, Florida, on
Wednesday, April 23, 1997 at 10:00 A.M., Tampa time, for the following
purposes:
1. To elect four directors, each to serve for a term of three
years;
2. To vote on a proposal to amend the Company's Certificate of
Incorporation to increase the authorized number of shares of Common
Stock, par value $.01, from 100,000,000 shares to 200,000,000 shares;
3. To vote on a proposal to amend the Company's Amended and
Restated Stock Option Plan to increase the number of shares of Common
Stock for which options may be granted from 4,923,500 to 10,000,000, and
adopt certain other amendments regarding administration of the Plan; and
4. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on March 7,
1997 are entitled to notice of and to vote at said meeting or any
adjournment or postponement thereof.
By Order of the Board of Directors
March 20, 1997 JOSEPH J. KADOW
Secretary
Stockholders who do not expect to attend the meeting in person are urged
to complete, date and sign the enclosed proxy and return it in the
enclosed postage-prepaid envelope.
OUTBACK STEAKHOUSE, INC.
PROXY STATEMENT
This statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Stockholders of OUTBACK
STEAKHOUSE, INC., a Delaware corporation (the "Company"), to be held on
Wednesday, April 23, 1997 at 10:00 A.M., Tampa time, at the Tampa
Convention Center, 333 South Franklin Street, Tampa, Florida, and at any
adjournment or postponement thereof. The Notice of Annual Meeting, this
statement and the accompanying proxy, together with the Company's Annual
Report to Stockholders for the year ended December 31, 1996 are first
being sent to stockholders on or about March 20, 1997.
The close of business on March 7, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to
vote at the meeting. At that date, the Company had outstanding
48,030,588 shares of Common Stock, $.01 par value ("Common Stock"), each
of which will be entitled to one vote.
ELECTION OF DIRECTORS
The number of directors of the Company has been fixed by the Board
of Directors (the "Board"), pursuant to the Company's Bylaws, at eleven,
divided into two classes of four directors each, and one class of three
directors. At the meeting, Common Stock represented by proxies, unless
otherwise specified, will be voted for the election of the four nominees
hereinafter named, each to serve for a term of three years and until his
or her successor is duly elected and qualified.
The following information is set forth with respect to the persons
nominated for election as a director and each director of the Company
whose term of office will continue after the meeting.
<TABLE>
<CAPTION>
Nominees for Election at the Annual Meeting
Director Term
Name Age Since Expires
<S> <C> <C> <C>
Debbi Fields 40 1996 2000
Edward L. Flom 67 1991 2000
Robert S. Merritt 45 1992 2000
Chris T. Sullivan 49 1991 2000
</TABLE>
Debbi Fields - Founder of Mrs. Fields, Inc., an international franchisor
and operator of retail dessert stores specializing in chocolate
chip cookies, serving as President and Chief Executive Officer from 1979
to December 1993, and Chairman of the Board from 1992 to February 1996.
Mrs. Fields also serves as a director of Promus Hotel Corporation.
Edward L. Flom - Retired; former Chairman and Chief Executive Officer of
Florida Steel Corporation, a steel manufacturer and fabricator. Mr. Flom
also serves as a director of Teco Energy, Inc.
Robert S. Merritt - Senior Vice President-Finance, Chief Financial
Officer and Treasurer of the Company since April 1991.
Chris T. Sullivan - Chairman and Chief Executive Officer of the Company
since its formation in April 1991. Mr. Sullivan also serves as a
director of Sports and Recreation, Inc.
<TABLE>
<CAPTION>
Directors Whose Terms Will Continue After the Annual Meeting
Director Term
Name Age Since Expires
<S> <C> <C> <C>
Robert D. Basham 49 1991 1999
John A. Brabson, Jr. 56 1992 1998
Charles H. Bridges 66 1992 1998
W. R. Carey, Jr. 49 1992 1999
J. Timothy Gannon 48 1991 1998
Nancy Schneid 38 1995 1999
Lee Roy Selmon 42 1994 1998
</TABLE>
Robert D. Basham - President of the Company since its formation in April
1991.
John A. Brabson, Jr. - Chairman of the Board, Lykes Bros. Inc., a
privately owned holding company, since September 1996; and Chairman,
Chief Executive Officer, and President of Peoples Gas System, Inc., since
1989.
Charles H. Bridges - Vice President, Treasurer and director of Matilda
Management Company since November 1993, a franchisee of the Company which
operates Outback Steakhouse(R) restaurants in northern California; former
Chairman and Chief Executive Officer of Francois L. Schwarz, Inc., an
international food brokerage company representing manufacturers to U.S.
military commissaries and exchanges.
W. R. Carey, Jr. - President and Founder of Corporate Resource
Development, a sales and marketing consulting and employment training
firm, since its formation in April 1981. Mr. Carey also serves as a
director of Romac International.
J. Timothy Gannon - Senior Vice President of the Company since its
formation in April 1991.
Nancy Schneid - Vice President-Marketing of Outback Steakhouse of
Florida, Inc., the Company's predecessor and wholly-owned subsidiary,
since 1991.
Lee Roy Selmon - Associate Athletic Director for External Affairs,
University of South Florida, since 1993. From 1986 to 1993, Mr. Selmon
served as Vice President Marketing of Barnett Bank of Tampa.
The Board held four meetings in 1996. Each of the directors
attended all of the meetings of the Board and the committees thereof of
which he or she was a member. The Board has an Audit Committee and a
Compensation Committee, and until February 28, 1997, had a Stock Option
Committee. The Board does not have a Nominating Committee.
The members of the Audit Committee are Messrs. Brabson, Carey, and
Mrs. Fields. Mr. Carey serves as Chairman of the Audit Committee. The
Audit Committee held two meetings during 1996. The Audit Committee is
responsible for reviewing the audit plans of the Company's independent
auditors, evaluating the adequacy of and monitoring compliance with the
Company's accounting policies and reviewing the Company's annual
financial statements.
The members of the Compensation Committee are Messrs. Bridges, Flom,
and Selmon. Mr. Bridges serves as Chairman of the Compensation
Committee. The Compensation Committee held three meetings during 1996.
The Compensation Committee is responsible for establishing the
compensation to be provided to executive officers, and effective February
28, 1997, benefits provided under the Company's Amended and Restated
Stock Option Plan.
The members of the Stock Option Committee were Messrs. Sullivan and
Basham. The Stock Option Committee held one meeting during 1996. The
Stock Option Committee was responsible for administering the Company's
Amended and Restated Stock Option Plan (the "Stock Option Plan"),
including selecting employees to whom options will be granted, and
determining the type and amount of options granted, the terms and
conditions thereof, and the terms and conditions of the agreement entered
into with optionees. As a result of changes to the Securities and
Exchange Commission rules under Section 16(b) of the Securities Exchange
Act of 1934, the Board has disbanded the Stock Option Committee and the
Stock Option Plan is now administered by the Compensation Committee.
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 7, 1997
(except as noted) by each person known to the Company to own beneficially
more than five percent of the Company's Common Stock, each director, each
nominee for election as a director, each executive officer, and all
executive officers and directors as a group.
<TABLE>
<CAPTION>
Amount Percent
Beneficially of
Name of Beneficial Owner Owned <F1> Class
<S> <C> <C>
Chris T. Sullivan<F2><F3> 8,646,401 18.00%
Robert D. Basham<F2><F4> 8,502,511 17.68%
J. Timothy Gannon<F2><F5> 8,458,761 17.61%
Robert S. Merritt<F6> 504,894 1.05%
Paul E. Avery<F7> 271,220 *
Joseph J. Kadow<F8> 75,000 *
John A. Brabson, Jr.<F9> 28,117 *
Charles H. Bridges<F10> 20,001 *
W. R. Carey, Jr.<F11> 30,000 *
Debbi Fields<F12> 30,000 *
Edward L. Flom<F13> 86,219 *
Nancy Schneid<F14> 127,351 *
Lee Roy Selmon<F15> 30,000 *
Multi-Venture Partners, Ltd.<F2> 8,373,761 17.43%
T. Rowe Price Associates, Inc.<F16> 4,302,400 8.96%
All directors and executive officers
as a group (13 persons) 10,062,953 20.95%
_______________________
*Less than one percent.
<F1> The named stockholders have sole voting and dispositive power with
respect to all shares shown as being beneficially owned by them, except
as otherwise indicated.
<F2> Multi-Venture Partners, Ltd. ("MVP") is an investment partnership
formed by Chris T. Sullivan, Robert D. Basham and J. Timothy Gannon.
Messrs. Sullivan, Basham and Gannon are the only limited partners in MVP
and are the only members of MVP's general partner, SBG Investments, a
limited liability company. The management of MVP is controlled by its
sole general partner, SBG Investments, L.L.C. ("SBG"), which owns a
.61343% general partner's interest in MVP. Mr. Sullivan owns 27.16255%
of the limited partner interests in MVP, and 40% of the member interests
in SBG; Mr. Basham owns 49.76678% of the limited partner interests in
MVP, and 40% of the member interests in SBG; and Mr. Gannon owns
22.45724% of the limited
partner interests in MVP, and 20% of the member interests in SBG.
<F3> Includes (i) 8,373,761 shares owned by MVP; (ii) 231,292 shares
owned
by Sullivan Family Investments, Ltd. for which Mr. Sullivan serves as
general partner; and (iii) 1,712 shares owned by Mr. Sullivan's children
for whom Mr. Sullivan serves as custodian. Mr. Sullivan shares voting
and dispositive power with respect to Common Stock owned by MVP.
<F4> Includes (i) 8,373,761 shares owned by MVP. Mr. Basham shares
voting and dispositive power with respect to Common Stock owned by MVP.
<F5> Includes (i) 8,373,761 shares owned by MVP; and (ii) 85,000 shares
owned by The John Timothy Gannon Family Charitable Remainder Unitrust of
1993. Mr. Gannon has voting but not dispositive power with respect to
Common Stock owned by The John Timothy Gannon Family Charitable Remainder
Unitrust of 1993, and shares voting and dispositive power with respect
to Common Stock owned by MVP.
<F6> Includes 429,873 and 75,000 shares underlying stock options which
Mr. Merritt has the right to acquire at exercise prices of $0.28 and
$26.38 per share, respectively.
<F7> Includes 96,220, 75,000, and 100,000 shares underlying stock options
which Mr. Avery has the right to acquire at per share exercise prices of
$0.98, $21.50, and $26.50 per share, respectively.
<F8> Includes 75,000 shares underlying stock options which Mr. Kadow has
the right to acquire at an exercise price of $24.17 per share.
<F9> Includes 10,002 shares underlying stock options which Mr. Brabson
has the right to acquire at an exercise price of $10.00 per share; and
(ii) 1,000 shares owned by The John A. Brabson, Jr. Money Purchase
Pension Plan f/b/o John A. Brabson, Jr.
<F10> Includes 20,001 shares underlying stock options which Mr. Bridges
has the right to acquire at an exercise price of $10.00 per share.
<F11> Includes 30,000 shares underlying stock options which Mr. Carey has
the right to acquire at an exercise price of $16.00 per share.
<F12> Includes 30,000 shares underlying stock options which Mrs. Fields
has the right to acquire at an exercise price of $31.50 per share.
<F13> Shares are held by the Edward Leonard Flom Revocable Trust of which
Mr. Flom is the grantor and sole trustee.
<F14> Includes 96,000 and 20,000 shares underlying stock options which
Ms. Schneid has the right to acquire at exercises prices of $1.12 and
$26.21 per share, respectively.
<F15> Includes 30,000 shares underlying stock options which Mr. Selmon
has the right to acquire at an exercise price of $26.25 per share.
<F16> Based on a Schedule 13G filed by T. Rowe Price Associates, Inc.
("T. Rowe Price") with the Securities and Exchange Commission on February
14, 1997, these securities are owned by various individual and
institutional investors for which T. Rowe Price serves as investment
adviser with power to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, T. Rowe Price is deemed to be a beneficial owner
of such securities; however, T. Rowe Price expressly disclaims that it
is, in fact, the beneficial owner of such securities.
</TABLE>
The address of each of Messrs. Sullivan, Basham and Gannon is 550
North Reo Street, Suite 200, Tampa, Florida 33609. The address of each
of MVP and SBG is 3111 South Valley View, Suite A-219, Las Vegas, Nevada
89102. The address of T. Rowe Price is 100 East Pratt Street, Baltimore,
Maryland 21202.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to
compensation paid by the Company and its subsidiaries to the Chief
Executive Officer and the Company's four other most highly compensated
executive officers:
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long Term Compensation
Awards Payouts
Other
Annual Restricted All Other
Compen- Stock Options/ LTIP Compen-
Salary Bonus sation Award(s) SARs Payouts sation
Name and Principal Position Year ($) ($)<F1> ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Chris T. Sullivan 1996 $280,000 $120,000
Chairman and Chief 1995 $250,000 $198,809
Executive Officer 1994 $235,000 $299,178
Robert D. Basham 1996 $280,000 $120,000
President and Chief 1995 $250,000 $198,809
Operating Officer 1994 $235,000 $299,178
J. Timothy Gannon 1996 $220,000 $ 60,000
Senior Vice President 1995 $205,000 $163,024
1994 $190,000 $241,889
Robert S. Merritt 1996 $200,000 $ 50,000
Senior Vice President 1995 $185,000 $147,118 75,000
Finance, Chief 1994 $170,000 $216,427
Financial Officer, and
Treasurer
Paul E. Avery 1996 $200,000 $280,400
Senior Vice President 1995 $200,000 $120,500 100,000
1994 $180,000 $157,453
_______________
<F1> Bonus amounts paid in 1996 to Messrs. Sullivan, Basham, Gannon, and
Merritt represent amounts paid under their quarterly bonus plan. This
quarterly plan provides for bonuses to be paid to each executive officer
based upon meeting specific corporate and individual goals, both
quantitative and qualitative, and subjective considerations such as
overall employee morale, succession planning, and competitive positions.
Messrs. Sullivan, Basham, Gannon, and Merritt also are each entitled to
receive an annual cash award based upon the Company meeting or exceeding
specific targets for earnings. No annual cash bonuses for 1996 were
awarded under this plan. Bonus amounts paid in 1996 to Mr. Avery
represent amounts paid under his quarterly bonus plan. See "Executive
Compensation-Joint Report by the Compensation Committee and the Stock
Option Committee on Executive Compensation Cash Incentives" for a
discussion of these plans.
</TABLE>
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Percent of
Total
Number of Options/SARs
Shares Underlying Granted to Exercise
Options/SARs Employees in or Base Price Expiration Grant Date
Name Granted Fiscal Year ($/Sh) Date Value ($)*
<S> <C> <C> <C> <C> <C>
None.
</TABLE>
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Options/SAR Value Table
Number of Value of
Unexercised In-the-Money
Options/SARs Options/SARs at
Shares Acquired Value at FY-End (#) FY-End ($)*
Name on Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Robert S. Merritt<F1> 25,000 $969,875 429,873 75,000 $11,271,271 $ 9,000
Paul E. Avery<F2> 10,000 340,200 141,220 130,000 2,680,534 150,000
*Based on the average high and low sales prices of the Company's Common
Stock on December 31, 1996 as quoted on the NASDAQ National Market
System.
<F1> Of the 504,873 stock options held by Mr. Merritt, 429,873 were
granted in January 1990, expire on January 1, 2000, and were exercisable
in full at December 31, 1996 at an exercise price of $0.28 per share.
The remaining 75,000 stock options were granted in April 1995, expire on
April 25, 2005, and are exercisable as follows at an exercise price of
$26.38 per share: (a) 15,000 shares on or after January 1, 1998, (b)
15,000 shares on or after January 1, 1999, and (c) 45,000 shares on or
after January 1, 2000.
<F2> Of the 271,220 stock options held by Mr. Avery at December 31, 1996,
(i) 96,220 were granted in October 1990, expire on January 1, 2000, and
were exercisable in full at December 31, 1996 at an exercise price of
$0.98 per share; (ii) 75,000 were granted in September 1993 and expire
on December 31, 2003, and are exercisable as follows at an exercise price
of $21.50 per share: (a) 45,000 shares on or after December 31, 1996,
(b) 15,000 shares on or after September 1, 1997, and (c) 15,000 shares
on or after September 1, 1998; and (iii) 100,000 were granted on January
24, 1995, expire on January 25, 2005, and are exercisable as follows at
an exercise price of $26.50 per share: (a) 20,000 shares on or after
January 25, 1998, (b) 20,000 shares on or after January 25, 1999, and (c)
60,000 shares on or after January 24, 2000.
</TABLE>
Joint Report by the Compensation Committee
and the Stock Option Committee on Executive Compensation
The Company's executive compensation program is administered by the
Compensation Committee of the Board, which has responsibility for all
aspects of the compensation program for the executive officers of the
Company. A component of overall compensation is the granting of stock
options, awards of which were made by the Stock Option Committee until
February 28, 1997. The Compensation Committee consists of three
Directors whose names are listed at the end of this report, none of whom
is a current or former employee of the Company.
The Compensation Committee's primary objective with respect to
executive compensation is to establish programs which attract and retain
key managers and align their compensation with the Company's overall
business strategies, values, and performance. To this end, the
Compensation Committee established and the Board endorsed an executive
compensation philosophy for 1996 which included the following
considerations:
* a "pay-for-performance" feature that differentiates
compensation results based upon the Company's annual financial
performance;
* stock incentives, in certain cases, as a component of total
compensation in order to closely align the interests of the Company's
executives with the long-term interests of shareholders which facilitates
retention of talented executives and encourages Company stock ownership
and capital accumulation;
* emphasis on total compensation versus cash compensation, under
which base salaries are generally set somewhat lower than competitive
levels but which motivates and rewards Company executives with total
compensation (including incentive programs) at or above competitive
levels, if the financial performance of the Company meets or exceeds
goals established for the year; and
For 1996, the Company's executive compensation program was comprised
of the following primary components: (a) base salaries; (b)cash incentive
opportunities; and (c) long-term incentive opportunities in the form of
stock options. Each primary component of pay is discussed below.
Base Salaries. The Committee generally attempts to set base
salaries of executive officers at levels which are below "market" rates,
as determined from information gathered by the Company from companies
which are similar in size and in the same industry group as the Company
and which were used by Dow Jones in compiling the Entertainment and
Leisure-Restaurants Index. Base salaries are subject to annual review
and adjustment on the basis of individual and Company performance, level
of responsibility, individual experience, and competitive, inflationary,
and internal equity considerations. The base salary of Chris T.
Sullivan, the Company's Chief Executive Officer was increased from 1995
to 1996 from $250,000 to $280,000, based on such factors as the Company's
profitability, cash flow and capital spending for the prior fiscal year,
the aggregate number of new Outback Steakhouse(R) restaurants and new
Carrabba's Italian Grill(R) restaurants opened during the prior fiscal
year, increases in percentage of same store sales versus budget
forecasts, and subjective considerations such as overall employee morale,
succession planning, general personnel problems, and competitive
positions. The Committee believes that the executive salaries
established by the Committee, including the salary paid to Mr. Sullivan,
the Company's Chief Executive Officer, are less than the range of
salaries paid by the companies surveyed.
Cash Incentives. In 1996, Company executives were eligible to
receive quarterly and annual cash bonus awards to focus attention on
achieving key goals pursuant to the following bonus plans which are
designed to provide competitive incentive pay only in the event such
objectives are met or exceeded.
Quarterly Cash Incentives for Messrs. Sullivan, Basham, Gannon,
and Merritt. Messrs. Sullivan, Basham, Gannon, and Merritt were eligible
to receive a specified quarterly bonus based upon meeting specific
corporate and individual goals, including the Company's profitability,
cash flow and capital spending for the prior fiscal quarter, the
aggregate number of new Outback Steakhouse(R) restaurants and new
Carrabba's Italian Grill(R) restaurants opened during the prior fiscal
quarter, increases in percentage of same store sales versus budget
forecasts, and subjective considerations such as overall employee morale,
succession planning, general personnel problems, and competitive
positions. The Committee reviews the specific corporate and individual
goals both quantitative and qualitative each quarter, and determines
payment of the quarterly bonuses. For 1996, Messrs. Sullivan and Basham
were eligible to receive a quarterly bonus of $30,000 each, Mr. Gannon
was eligible to receive a quarterly bonus of $15,000, and Mr. Merritt was
eligible to receive a quarterly bonus of $12,500. In 1996, Messrs.
Sullivan, Basham, Gannon, and Merritt earned aggregate quarterly bonuses
of $120,000, $120,000, $60,000, and $50,000, respectively.
Quarterly Cash Incentives for Mr. Avery. The Committee
believes that the success of restaurant operations is essential in the
Company's success, and established a separate incentive program for Mr.
Avery. In 1996, Mr. Avery was eligible to receive a quarterly bonus
based upon the Company meeting its operational plan. If the operational
plan for a specific quarter was met, Mr. Avery was entitled to earn a
bonus of $100,000 for that calendar quarter, subject to increase or
decrease according to the following schedule: (i) 0% (plan met), 0%
adjustment; (ii) 2% above or below plan, 8% adjustment; (iii) 4% above
or below plan, 16% adjustment; (iv) 8% above or below plan, 32%
adjustment; and (v) 10% above or below plan, 40% adjustment. In 1996,
Mr. Avery earned quarterly bonuses aggregating $280,400.
Annual Cash Incentives for Messrs. Sullivan, Basham, Gannon,
and Merritt. Messrs. Sullivan, Basham, Gannon, and Merritt were also
eligible to receive an additional annual cash bonus award based upon the
Company meeting or exceeding specific targets for earnings as reflected
in the Company's financial plan submitted by management and approved by
the Compensation Committee and the Board based on a variety of factors,
including viability of the target growth rate and amount of earnings
appropriate to satisfy shareholder expectations. In the event the
Company met or exceeded the after-tax earnings portion of the Company's
financial plan for the year, in 1996 Messrs. Sullivan, Basham, Gannon,
and Merritt would earn a bonus of 25% of each executive's base salary.
Additionally, the Compensation Committee would establish a bonus pool
equal to 25% of the difference between the after-tax earnings of the
financial plan target, less the aggregate annual bonus amounts previously
paid to Messrs. Sullivan, Basham, Gannon, and Merritt, and would award
this sum to Messrs. Sullivan, Basham, Gannon, and Merritt, pro rata,
based on their respective base salaries. No annual cash bonuses for 1996
were awarded to the named executive officers, including Mr. Sullivan.
Long-Term Stock Incentives. Long-term stock incentives, which are
a component of compensation, have historically been awarded by the Stock
Option Committee of the Board under the Company's Amended and Restated
Stock Option Plan (the "Stock Option Plan"). Until February 28, 1997,
the Stock Option Committee consisted of two Directors whose names are
listed at the end of this report. Both members of the former Stock
Option Committee are executive officers of the Company.
The Stock Option Plan provides for the issuance of "incentive stock
options," within the meaning of Section 422 of the Internal Revenue Code,
and nonqualified stock options, for federal income tax purposes, to
officers and other employees of the Company. The Stock Option Plan was
originally adopted by the Board and shareholders in 1992. Grants to
executives under the Company's Stock Option Plan are designed to align
a portion of the executive compensation package with the long-term
interests of the Company's shareholders by providing an incentive that
focuses attention on managing the Company from the perspective of an
owner with an equity stake in the business.
Grants of stock options generally are limited to officers (other
than Messrs. Sullivan, Basham, and Gannon), managing partners of Company
restaurants, and other key employees and managers, of the Company or its
subsidiaries who are in a position to contribute substantially to the
growth and success of the Company and its subsidiaries. Stock options
are designed to reward exceptional performance with a long-term benefit,
facilitate stock ownership, and deter recruitment of key Company
personnel by competitors and others. In evaluating annual compensation
of executive officers (other than Messrs. Sullivan, Basham, and Gannon),
the Compensation Committee takes into consideration the stock options as
a percentage of total compensation, consistent with its philosophy that
stock incentives more closely align the interests of company managers
with the long-term interests of shareholders. In granting stock options
to executive officers, the Stock Option Committee has considered the
number and size of stock options already held by an executive officer
when determining the size of stock option awards to be made to the
officer in a given fiscal year. The terms of stock options are
established by the Compensation Committee.
No executive officer of the Company was granted stock options in
1996. At March 7, 1997, the executive officers appearing in the Summary
Compensation Table held stock or the right to acquire stock representing
1.62% of the Company's outstanding Common Stock, assuming all outstanding
options held by executive officers are exercised. Neither Mr. Sullivan,
Mr. Basham, nor Mr. Gannon, the Company's founders, have been granted
options to acquire shares of the Company's Common Stock.
Section 162(m). Section 162(m) to the Internal Revenue Code of
1986, as amended (the "Code"), which prohibits a deduction to any
publicly held corporation for compensation paid to a "covered employee"
in excess of $1 million per year (the "Dollar Limitation"). A covered
employee is any employee who appears in the Summary Compensation Table
who is also employed by the Company on the last day of the Company's
calendar year. The Compensation Committee does not expect the
deductibility of any material amount of compensation paid in 1996 to any
executive officer to be affected by Section 162(m). The Compensation
Committee may consider alternatives to its existing compensation programs
in the future with respect to qualifying executive compensation for
deductibility.
The Company generally is entitled to a tax deduction upon an
employee's exercise of nonqualified options in an amount equal to the
excess of the value of the shares over the exercise price. Such
deduction is considered compensation for purposes of the Dollar
Limitation with respect to options having an exercise price less than
fair market value at the date of grant. Deductibility of compensation
in future years to Messrs. Merritt and Avery may be affected by the
Dollar Limitation if they remain covered employees and exercise certain
of their options in amounts which would result in compensation to Mr.
Merritt or Mr. Avery exceeding the Dollar Limitation in any year.
Messrs. Merritt and Avery have each agreed to cooperate with the Company
in exercising their options so as to minimize any loss of deductibility
due to the Dollar Limitations.
Conclusion. As described above, the Company's executive
compensation program is designed to provide a link between total
compensation and the Company's performance and long-term stock price
appreciation consistent with the compensation philosophies set forth
above. This program has been established since the Company's inception,
and has been a significant factor in the Company's growth and
profitability and the resulting gains achieved by the Company's
shareholders.
Compensation Committee Stock Option Committee
Charles H. Bridges, Chairman Chris T. Sullivan
Edward L. Flom Robert D. Basham
Lee Roy Selmon
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Charles H. Bridges, Lee Roy
Selmon, and Edward L. Flom. Mr. Bridges serves as Chairman of the
Committee. Until February 28, 1997, the Stock Option Committee of the
Board consisted of Chris T. Sullivan, Chairman of the Board and Chief
Executive Officer of the Company, and Robert D. Basham, President of the
Company.
Directors Fees
Directors of the Company who are not executive officers receive fees
of $10,000 per year, $750 per Board meeting attended, and $500 per
committee meeting attended, plus the expenses of attending meetings.
During 1996, Messrs. Brabson, Bridges, Carey, Fields, Flom, and Selmon
were paid directors' fees of $14,000, $14,500, $14,000, $13,000, $14,500,
and $14,500, respectively.
Generally, upon election to the Board, each director who is not an
executive officer has been granted a one-time stock option to acquire
30,000 shares of Common Stock. The exercise price for such shares is
equal to the closing sale price of the Common Stock as reported on the
NASDAQ System on the date of grant. Options granted to Directors
generally are granted upon the same terms and conditions as options
granted to executive officers and key employees.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
In October 1995, the Company entered into an extension of the term
of the Employment Agreement with Mr. Avery, extending the term of his
employment for an additional five-year period. The employment agreement
restricts the ability of Mr. Avery to compete with the Company for a
period of two years following termination of his employment.
Effective February 29, 1996, the Company and each of Chris T.
Sullivan, Robert D. Basham, and J. Timothy Gannon, each of whom are
executive officers, directors, and founders of the Company (individually,
an "Executive"), entered into Stock Redemption Agreements (each an
"Agreement"). Under the terms of each Agreement, following the
Executive's death the Personal Representative of the Executive will have
the right to require the Company to purchase up to $30,000 million worth
of Common Stock beneficially owned by the Executive at the date of death,
for a per share price equal to the mean (rounded to the nearest one-tenth
of one cent) of the last sale price of the Company's Common Stock for 30
consecutive trading days ending on the business day prior to the
Executive's death as quoted on the NASDAQ National Market System or the
principal exchange on which the Company's Common Stock is then traded.
In the event, however, that the Executive's death results (i) from an
illness that was diagnosed or an accident that occurred within one year
of the Executive's death, and (ii) the accident or illness was publicly
disclosed, then the per share purchase price will be equal to the mean
(rounded to the nearest one-tenth of one cent) of the last sale price of
the Company's Common Stock for 30 consecutive trading days ending on the
business day prior to the date of public disclosure of the accident or
illness as quoted on the NASDAQ National Market System or the principal
exchange on which the Company's Common Stock is then traded. The maximum
dollar amount of Common Stock which the Company is obligated to purchase
from the estate of the Executive is $30,000,000. The Company's
obligation to purchase Common Stock beneficially owned by a deceased
Executive is funded by an insurance policy on the life of the Executive
owned by the Company providing a death benefit of $30,000,000.
As of March 7, 1997, Messrs. Sullivan, Basham, and Gannon
beneficially owned an aggregate of 8,860,151 shares of the Company's
Common Stock with a value of approximately $215,966,181 based on the
closing sale price of the Company's Common Stock on that date as quoted
on the NASDAQ National Market System. The Agreements will remain in
place for so long as the Board of Directors deem appropriate.
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
shareholder return with the cumulative total shareholder return of the
Dow Jones Equity Market Index and the Dow Jones Entertainment and
Leisure-Restaurants Index for the last five full fiscal years of the
Company ending December 31, 1996:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN COMPARISON
Among Outback Steakhouse, Inc., Dow Jones Equity Market Index and
Dow Jones Entertainment & Leisure - Restaurant Index
[Note: A line graph appears here depicting the information in the
following table.]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
<C> <C> <C> <C> <C>
Outback Steakhouse, Inc. $100 $132 $122 $186 $138
Dow Jones Equity Market Index $100 $110 $111 $153 $189
Dow Jones Entertainment & Leisure - Restaurant $100 $117 $111 $159 $162
</TABLE>
PROPOSAL ONE
Proposed Amendment to the Certificate of Incorporation
to Increase the Number of Authorized Shares of Common Stock
There will be submitted to the stockholders at the meeting a
proposal to amend Article FOURTH of the Company's Restated Certificate
of Incorporation (the "Certificate") to increase the authorized number
of shares of Common Stock, $.01 par value, from 100,000,000 to
200,000,000. The full text of Article FOURTH of the Certificate
reflecting this amendment is set forth as Exhibit A to this proxy
statement.
The Company is presently authorized to issue 100,000,000 shares of
Common Stock, of which 48,030,588 were issued and outstanding at March
7, 1997, and 5,196,708 were reserved for issuance under certain stock
option agreements and stock option plans. A balance of 46,712,704
authorized shares of Common Stock remained available for issuance without
stockholder action. The 100,000,000 additional shares of Common Stock
for which authorization is sought would have the same rights and
privileges as the Common Stock presently outstanding. Holders of Common
Stock have no preemptive rights to subscribe for any additional Common
Stock of the Company.
The Board believes that it is desirable to have additional
authorized shares of Common Stock available for possible future stock
dividends, splits or other issuances, acquisition transactions, employee
benefit programs, and for other general corporate purposes. The proposed
amendment could discourage attempts to acquire control of the Company.
The issuance of Common Stock could be used to dilute the share ownership
of a party seeking to obtain control of the Company or the Common Stock
could be sold to persons who might support incumbent management. However,
the Board believes that the availability of additional shares to assist
in meeting corporate needs and goals makes their authorization important
without regard to any possible anti-takeover effects. The Company does
not have any present plans or commitments with respect to the issuance
of the additional shares of Common Stock for which authorization is
sought. If the amendment is approved, the additional shares would be
available for issuance without further action by the stockholders, unless
such action is required by applicable law or the rules of the NASDAQ
National Market System or any stock exchange or other quotation system
on which the Company's securities may be listed or quoted in the future.
Under Delaware law, the affirmative vote of a majority of the
outstanding Common Stock is required for approval of this proposal.
The Board of Directors recommends that the stockholders vote FOR
this proposal to amend the Certificate.
PROPOSAL TWO
Proposed Amendments to the Company's
Amended and Restated Stock Option Plan
The Board has approved amendments (the "Amendments") to the
Company's Amended and Restated Stock Option Plan (the "Stock Option
Plan") (i) to increase the number of shares for which options may be
granted under the Stock Option Plan by 5,076,500, or from 4,923,500 to
10,000,000; (ii) to clarify that the exercise price of any option granted
under the Stock Option Plan cannot be reduced except to reflect the
impact of stock splits, stock dividends, mergers, recapitalization,
changes in capital structure, or other transactions having similar
effect; (iii) provide that the Stock Option Plan shall be administered
by a Committee of the Board (or, at the Board's option, the full Board)
that will be composed of such members and operated in a manner to permit
options granted under the Stock Option Plan to be exempt from the
short-swing profits provisions of Section 16(b) of the Securities
Exchange Act of 1934; and (iv) eliminate the requirement for stockholder
approval to make any alteration or amendment to the Stock Option Plan
necessary for continued applicability of Rule 16b-3 under the Securities
Exchange Act of 1934 because the Rule no longer requires stockholder
approval.
The Amendments do not change the Stock Option Plan in any other
manner. A copy of the Stock Option Plan, as amended, is attached as
Exhibit B and the description of the Stock Option Plan is qualified in
its entirety by reference to Exhibit B.
The Board believes the increase in the number of shares for which
options may be granted under the Stock Option Plan is necessary to have
sufficient options available (i) for regular one-time grants of options
to managing partners of Company restaurants at the start of their five-year
term of employment; (ii) for grants of options to managing partners
of Company restaurants who will complete their five-year term of
employment and who extend their employment for an additional five-year
term; and (iii) for grants of options to officers and other key employees
as determined by the Compensation Committee.
Although stockholder approval of the Amendments are not required
under Delaware law, such approval is required under the terms of the
Stock Option Plan and is being sought in order to: (i) allow certain
options granted under the Stock Option Plan to qualify as incentive stock
options under the Internal Revenue Code of 1986, as amended; and (ii)
permit options granted under the Stock Option Plan to qualify as
"performance based compensation" for purposes of Section 162(m) of the
Code.
The Compensation Committee (the "Committee") of the Board
administers the Stock Option Plan. Incentive and nonqualified stock
options may be granted under the Stock Option Plan at any time until the
expiration of the Stock Option Plan on May 1, 2001. The maximum number
of options that may be granted pursuant to the Stock Option Plan, as
amended is 10,000,000, and the maximum number of options that may be
granted to any one individual is 600,000, in each case subject to
adjustment for stock dividends, stock splits and certain other changes
in the Company's capitalization.
Options have been in the past and the Company anticipates that in
the future options will be granted to certain officers, directors, and
other key employees of the Company or its subsidiaries who are in a
position to contribute substantially to the growth and success of the
Company and its subsidiaries. As of December 31, 1996, options to
purchase approximately 5,478,917 shares had been granted under the Stock
Option Plan, 1,159,809 of which have been exercised and 1,886,381 of
which were currently exercisable. As of December 31, 1996, three
executive officers, five nonexecutive officers, six outside directors,
and 348 current and former employees had been granted options. Any shares
not purchased under an option which has terminated or lapsed may
be used for the further grant of options under the Stock Option Plan.
Incentive stock options granted under the Stock Option Plan may not
be exercised more than ten years after the date of grant (or five years
in the case of an option granted to an individual who at the time of the
grant owns more than 10% of the total combined voting power of all
classes of stock of the optionee's employer corporation and its parent
or subsidiary corporations (a "10% Owner")). Nonqualified stock options
granted under the Stock Option Plan may be exercised within such time
period as the Committee determines at the time of grant. The aggregate
fair market value (determined at the time the option is granted) of the
stock with respect to which incentive stock options are exercisable for
the first time by any employee during any calendar year may not exceed
$100,000. The Stock Option Plan provides that the option price in the
case of incentive stock options shall be not less than 100% of the fair
market value of the Company's Common Stock at the time the option is
granted or 110% of such fair market value in the case of an option
granted to a 10% Owner. In the case of nonqualified stock options the
option price may be less than the fair market value of the Company's
Common Stock on the date of grant. The purchase price must be paid in
full by the optionee at the time of exercise in either cash or Common
Stock.
No cash consideration will be received by the Company for granting
options under the Stock Option Plan. Options will be granted in
consideration of the services rendered or to be rendered to the Company
by the employees receiving the options.
With respect to nonqualified stock options granted with an exercise
price not less than fair market value, in general, for federal income tax
purposes under present law:
(i) The grant of a nonqualified stock option, by itself, will not
result in income to the optionee.
(ii) Except as provided in (v) below, the exercise of a nonqualified
stock option (in whole or in part, according to its terms) will result
in ordinary income to the optionee at the time in an amount equal to the
excess (if any) of the fair market value of the stock on the date of
exercise over the option price.
(iii) The tax basis of the stock acquired upon exercise of a
nonqualified stock option, which will be used to determine the amount of
any capital gain or loss on a future taxable disposition of such stock,
will be the fair market value of the shares on the date of exercise.
(iv) No deduction will be allowable to the Company upon the grant
of a nonqualified stock option, but, subject to Section 162(m) of the
Code, upon exercise of a nonqualified stock option, a deduction will be
allowable to the Company at that time in an amount equal to the amount
of ordinary income realized by the optionee exercising such option if the
Company deducts and withholds appropriate federal withholding tax.
(v) With respect to the exercise of a nonqualified stock option and
the payment of the option price by the delivery of Common Stock, to the
extent that the number of shares received does not exceed the number of
shares surrendered, no taxable income will be realized by the optionee
at that time, the tax basis of the shares received will be the same as
the tax basis of the shares surrendered, and the holding period of the
optionee in the shares received will include his holding period in the
shares surrendered. To the extent that the number of shares received
exceeds the number of shares surrendered, ordinary income will be
realized by the optionee at that time in the amount of the fair market
value of such excess shares, the tax basis of such excess shares will be
such fair market value, and the holding period of the optionee in such
shares will begin on the date such shares are transferred to the
optionee.
With respect to incentive stock options, in general, for federal
income tax purposes under present law:
(i) Neither the grant nor the exercise of an incentive stock option,
by itself, will result in income to the optionee; however, under Section
57 of the Code, the excess of the fair market value of the stock at the
time of exercise over the option price is an item of tax preference
(unless there is a disposition of the shares acquired upon exercise of
an incentive stock option in the taxable year of exercise) which may,
under certain circumstances, result in an alternative minimum tax
liability to the optionee under Section 55 of the Code.
(ii) Except as provided in (v) below, if the shares acquired upon
exercise of an incentive stock option are disposed of in a taxable
transaction after the later of two years from the date on which the
option is granted or one year from the date on which such shares are
transferred to the optionee, long-term capital gain or loss will be
realized by the optionee in an amount equal to the difference between the
option price and the amount realized by the optionee.
(iii) If the shares acquired upon exercise of an incentive stock
option are disposed of within the two-year period for the date of grant
or the one-year period after the transfer of the shares to the optionee:
(a) Ordinary income will be realized by the optionee at the time
of such disposition in the amount of the excess, if any, of the fair
market value of the shares at the time of such exercise over the option
price, but not in an amount exceeding the excess, if any, of the amount
realized by the optionee over the option price.
(b) Short-term or long-term capital gain will be realized by the
optionee at the time of any such taxable disposition in an amount equal
to the excess, if any, of the amount realized over the fair market value
of the shares at the time of such exercise.
(c) Short-term or long-term capital loss will be realized by the
optionee at the time of any such taxable disposition in an amount equal
to the excess, if any, of the option price over the amount realized.
(iv) No deduction will be allowed to the Company with respect to
incentive stock options granted or shares transferred upon exercise
thereof, except that if a disposition is made by the optionee within the
two-year period or the one-year period referred to above, the Company
will be entitled to a deduction, subject to Section 162(m) of the Code,
in the taxable year in which the disposition occurred in an amount equal
to the amount of ordinary income realized by the optionee making the
disposition.
(v) With respect to the exercise of an incentive stock option and
the payment of the option price by the delivery of Common Stock, to the
extent that the number of shares received does not exceed the number of
shares surrendered, no taxable income will be realized by the optionee
at the time, the tax basis of the shares received will be the same as the
tax basis of the shares surrendered and the holding period (except for
purposes of the one-year period referred to above) of the optionee in
shares received will include his holding period in the shares
surrendered. To the extent that the number of shares received exceeds
the number of shares surrendered, no taxable income will be realized by
the optionee at that time, such excess shares will be considered
incentive stock option stock with a zero basis and the holding period of
the optionee in such shares will begin on the date such shares are
transferred to the optionee. If the shares surrendered were acquired as
the result of the exercise of an incentive stock option and the surrender
takes place within two years from the date the option relating to the
surrendered shares was granted or within one year from the date of such
exercise, the surrender will result in the realization of ordinary income
by the optionee at that time in the amount of the excess, if any, of the
fair market value on the date of exercise of the shares surrendered over
the exercise price of such shares. If any of the shares received are
disposed of within one year after the shares are transferred to the
optionee, the optionee will be treated as first disposing of the shares
with a zero basis.
The Board may at any time amend the Stock Option Plan or any part
thereof as it shall deem advisable. However, no amendment may be made
in any option then outstanding under the Stock Option Plan which would
impair the rights of the optionee without the consent of such optionee.
Under Delaware law, the affirmative vote of a majority of the
outstanding Common Stock is required for approval of this proposal.
The Board recommends that the stockholders vote FOR this proposal
to amend the Amended and Restated Stock Option Plan.
SELECTION OF INDEPENDENT AUDITORS
At the meeting of the Board of the Company held on January 22, 1997,
the Board selected Deloitte & Touche to serve as the independent auditors
for the Company and its subsidiaries for the year ending December 31,
1996. Representatives of Deloitte & Touche are expected to be present
at the stockholders' meeting to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the 1998 Annual
Meeting of Stockholders for inclusion in the proxy statement and form of
proxy relating to that meeting is advised that the proposal must be
received by the Company at its principal executive offices not later than
November 20, 1997. The Company will not be required to include in its
proxy statement or form of proxy a stockholder proposal which is received
after that date or which otherwise fails to meet requirements for
stockholder proposals established by regulations of the Securities and
Exchange Commission.
OTHER MATTERS
The solicitation of proxies is made by and on behalf of the Board.
The cost of the solicitation will be borne by the Company, including the
reasonable expenses of brokerage firms or other nominees for forwarding
proxy materials to beneficial owners. In addition to solicitation by
mail, proxies may be solicited by telephone, telegraph or personally.
Proxies may be solicited by directors, officers and employees of the
Company without additional compensation.
If the enclosed proxy is executed and returned, the shares
represented thereby will be voted in accordance with any specifications
made by the stockholder. In the absence of any such specification, they
will be voted to elect the directors as set forth under "Election of
Directors" above, and FOR Proposals ONE and TWO. Pursuant to the
Company's Certificate and applicable law, broker nonvotes and abstaining
votes will not be counted in favor of or against the election of any
nominee for director or any of the proposals to be presented at the
meeting.
The presence of a stockholder at the meeting will not operate to
revoke his proxy. A proxy may be revoked at any time insofar as it has
not been exercised by giving written notice to the Company.
If any other matters shall come before the meeting, the persons
named in the proxy, or their substitutes, will vote thereon in accordance
with their judgment. The Board does not know of any other matters which
will be presented for action at the meeting.
By Order of the Board of Directors
March 20, 1997 JOSEPH J. KADOW
Secretary
EXHIBIT A
PROPOSED AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Two Hundred and Two Million
(202,000,000), consisting of Two Hundred Million (200,000,000) shares of
Common Stock, $.01 par value (the "Common Stock"), and Two Million
(2,000,000) shares of Preferred Stock, $.01 par value (the "Preferred
Stock").
EXHIBIT B
OUTBACK STEAKHOUSE, INC.
AMENDED AND RESTATED STOCK OPTION PLAN
1. Purpose. The purpose of this Stock Option Plan ("Plan") is to
provide long-term incentives to key employees and members of the board
of directors ("Directors") of OUTBACK STEAKHOUSE, INC., a Delaware
corporation (the "Corporation"), its subsidiaries and affiliated
partnerships; to compensate existing key employees and Directors for
their efforts on behalf of the Corporation and its subsidiaries; to
assist in retaining people of ability and initiative in professional,
management and other key positions; and to induce such key employees to
refrain from competing with the Corporation and its subsidiaries. These
purposes are intended to be achieved, in part, through the grant of stock
options ("Options"), some of which are intended to qualify as "Incentive
Stock Options" within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"). In the event and to the extent
that in connection with the grant of Options intended to qualify as such
"Incentive Stock Options" this Plan shall not conform with a pertinent
mandatory requirement under Section 422 or any related Treasury
Regulation, then this Plan shall be deemed to have incorporated such a
mandatory provision and shall be construed accordingly, notwithstanding
any other provision contained in this Plan to the contrary.
2. Administration of the Plan. The Plan shall be administered by
a committee of the board of directors of the Corporation (the "Board")
or, at the Board's election, by the full Board (such committee or the
Board, if it administers the Plan, the "Committee"). Any Committee
designated by the Board to administer the Plan shall consist of two or
more members. The Committee shall be composed of such members and shall
be operated in a manner that will permit Options granted under the Plan
to be exempt from the short-swing profit provisions of Section 16(b) of
the Securities Exchange Act of 1934 and the rules promulgated by the
Securities and Exchange Commission thereunder.
The Committee shall have full power to interpret and administer the
Plan and full authority to select the eligible individuals to whom
Options will be granted and to determine the type and amount of Options
to be granted to each participant, the terms and conditions of Options
granted under the Plan and the terms and conditions of the agreements
which will be entered into with participants.
The Committee shall have the authority to adopt, alter and repeal
such rules, guidelines and practices governing the Plan as it shall, from
time to time, deem advisable; to interpret the terms and provisions of
the Plan and any Option issued under the Plan (and any agreements
relating thereto); to direct employees of the Corporation or other
advisors to prepare such materials or perform such analysis as the
Committee deems necessary or appropriate; and otherwise to supervise the
administration of the Plan.
Any interpretation or administration of the Plan by the Committee,
and all actions of the Committee, shall be final, binding and conclusive
on the Corporation, its stockholders, subsidiaries, and all participants
in the Plan, their respective legal representatives, successors and
assigns, and upon all persons claiming under it through any of them. No
member of the Board or of the Committee shall incur any liability for any
action taken or omitted, or any determination made, in good faith in
connection with the Plan.
3. Shares Subject to this Plan. The total number of shares which
may be issued and sold upon exercise of Options granted pursuant to this
Plan shall not exceed 10,000,000 shares of the Corporation's Common
Stock, $.01 par value ("Common Stock"), except to the extent of
adjustments authorized by Paragraph 7 of this Plan. The maximum number
of shares of Common Stock as to which options may be granted to any one
individual under the Plan during its term is 600,000, except to the
extent of adjustments authorized by Paragraph 7 of this Plan. Such
Common Stock may be treasury shares or authorized but unissued shares or
a combination of the foregoing. If an Option granted under this Plan
shall expire or terminate for any reason other than its exercise, the
shares subject to, but not delivered under, such Option shall be
available for the grant of other Options to the same employee or other
employees. The Committee will maintain records showing the cumulative
total of number of shares of Common Stock subject to Options outstanding
under the Plan.
4. Eligibility. The Committee may, from time to time and upon such
terms and conditions as it may determine, authorize the granting of
Options to Directors, officers and to other key salaried employees of the
Corporation or any of its subsidiaries or affiliated partnerships (each
an "Optionee") to purchase from the Corporation shares of Common Stock
and may fix the number of shares to be covered by such Option.
Successive Options may be granted to the same person whether or not the
Option or Options first granted to such person remain unexercised.
Options granted under the Plan may be (i) options which are intended
to qualify as incentive stock options under Section 422 of the Code
("Incentive Stock Options"); (ii) options which are not intended to
qualify under Section 422 of the Code; or (iii) both of the foregoing if
granted separately, not in tandem. No option granted under the Plan
shall be an Incentive Stock Option unless the stock option agreement
evidencing such option specifically states that the option is intended
to be an Incentive Stock Option.
5. Term of Option and Transferability. The term of each Option
granted under the Plan shall be established by the Committee, but the
term of Incentive Stock Options shall not exceed ten years from the date
of grant; provided, however, that in the case of an Optionee who owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or of its parent or subsidiary
corporations at the time an Option which is intended to qualify as an
Inventive Stock Option is granted, the term of such Option shall not
exceed five years from the date of grant. No Option shall be
transferable by the Optionee otherwise than by will or the laws of
descent and distribution. Options shall be exercisable during the
Optionee's lifetime only by the Optionee or by his or her legal guardian
or legal representative.
6. Option Price and Payment. The Option price (which may be less
than fair market value) shall be established by the Committee, provided
that in the case of an Option intended to qualify as an Incentive Stock
Option the Option price shall be not less than the fair market value of
the shares covered by the Option at the time the Option is granted (110%
of such fair market value in the case of an Option intended to qualify
as an Incentive Stock Option granted to an individual who, at the time
the Option is granted, owns shares possessing more than 10% of the total
combined voting power of all classes of shares of the Corporation, its
parent or any of its subsidiaries). If Common Stock of the same class
as the stock subject to Incentive Stock Options granted or to be granted
hereunder are at any time traded on a national securities exchange, the
term "fair market value" shall mean (i) the mean between the highest and
lowest selling prices reported by the consolidated stock exchange network
for such stock on the date as of which the determination is to be made;
or (ii) if there are no sales of such Common Stock reported by the
consolidated stock exchange network on such date, the mean between the
highest and lowest reported selling prices on the consolidated stock
exchange network on the nearest trading date before such date and on
which there were such sales. If such shares of Common Stock are at any
time traded only otherwise than on a national securities exchange, the
term "fair market value" shall mean the mean between the bid and asked
prices of the stock as reported by such sources as shall be, in the
judgment of the Committee, appropriate evidence of such prices or, if
quoted on NASDAQ, the mean between NASDAQ high and low selling prices,
as of the close of business on the date for which a determination is
being made. If there shall be no trading in such Common Stock at any
time, then the term "fair market value" means the value per share of
stock as determined by the Committee upon consideration of such financial
and market data as the Committee may deem necessary and appropriate. The
Option price shall be payable (i) in cash, (ii) by check acceptable to
the Corporation, (iii) by delivery of Common Stock of the sale class of
stock subject to the Option, or (iv) a combination of the above so that
the sum of the fair market value of any such cash, check or Common Stock
equals the Option price.
7. Adjustments. The Committee shall make or provide for such
adjustments in the Option price and in the number or kind of shares of
Common Stock or other securities covered by outstanding Options as the
Committee in its sole discretion, exercised in good faith, may determine
are equitably required to prevent dilution or enlargement of the rights
of Optionees that would otherwise result from (i) any share dividend,
share split, combination of shares, issuance of rights or warrants to
purchase shares, recapitalization or other change in the capital
structure of the Corporation; (ii) any merger, consolidation, separation,
reorganization or partial or complete liquidation; or (iii) any other
corporate transaction or event having an effect similar to any of the
foregoing. The Committee shall not have the power to reduce the Option
price for outstanding Options except in the case of transactions
described in the preceding sentence. The Committee shall also make or
provide for such adjustments in the number or kind of shares of Common
Stock which may be sold under this Plan as the Committee in its sole
discretion, exercised in good faith, may determine are appropriate to
reflect any transaction or event described in this Section.
8. Other Terms. Each grant of Options hereunder shall be evidenced
by a stock option agreement. Each stock option agreement shall contain
provisions established by the Committee setting forth the manner of
exercise of such Option, whether the Option granted is intended to
qualify or not to qualify as an Incentive Stock Option and such other
terms and conditions not inconsistent herewith as shall be approved by
the Committee.
9. Cancellation. The Committee may, with the concurrence of the
affected Optionee, cancel any Option granted under this Plan. In the
event of any such cancellation, the Committee may authorize the granting
of new Options (which may or may not cover the same number of shares
which had been subject to any prior Option) in such manner, at such
Option price and subject to the same terms and conditions as would have
been applicable had the cancelled Options not been granted.
10. Amendment. This Plan may be amended from time to time by the
Board but, without further approval by the stockholders of the
Corporation, no such amendment shall (i) increase the aggregate number
of shares of Common Stock that may be issued and sold under this Plan
(except to the extent authorized by Paragraph 7), (ii) change the
designation in Paragraph 4 of the class of employees eligible to receive
Options, or (iii) materially increase the benefits accruing to Optionees.
11. Time of Granting Options. The date of grant of an Option under
this Plan shall, for all purposes, be the date on which the Committee
makes the determination to grant such Option. Notice of the
determination shall be given to each employee to whom an Option is so
granted within a reasonable time after the date of such grant.
12. Termination of Plan. This Plan shall be terminated and no
further Options shall be granted hereunder as of the tenth anniversary
of the earlier of (i) the date the Plan is adopted by the Board or (ii)
the date this Plan is approved by the Corporation's stockholders.
13. General Provisions. Neither the adoption of this Plan nor its
operation, nor any document describing or referring to this Plan or any
part thereof, shall confer upon any Optionee any right to continue in the
employ of the Corporation or an parent or subsidiary corporation, or
shall in any way affect the right and power of the Corporation or any
parent or subsidiary corporation to terminate the employment of any
Optionee under the Plan at any time with or without assigning a reason
therefor, to the same extent as the Corporation might have done if the
Plan had not been adopted.
14. Compliance with Law and Approval of Regulatory Body. No Option
shall be exercisable and no stock will be delivered under this Plan
except in compliance with all applicable federal and state laws and
regulations, including, without limitation, compliance with applicable
withholding tax requirements, if any, and the rules of all domestic stock
exchanges on which the Corporation may be listed. Any stock certificates
issued to evidence stock as to which an Option is exercised may bear such
legends and statements as the Committee shall deem advisable to assure
compliance with federal and state laws and regulations. No Option shall
be exercisable, and no stock will be delivered under this Plan, until the
Corporation has obtained such consent or approval from the regulatory
body, federal or state, having jurisdiction over such matters as the
Committee may deem advisable.
In the case of the exercise of an Option by a person or estate
acquiring the right to exercise such Option by bequest or inheritance,
the Committee may require reasonable evidence as to the ownership of such
Option and may require such consents and releases of taxing authorities
as the Committee may deem advisable.
<PAGE> FRONT SIDE OF PROXY CARD
OUTBACK STEAKHOUSE, INC.
550 North Reo Street, Suite 200
Tampa, Florida 33609
COMMON STOCK PROXY
ANNUAL MEETING OF SHAREHOLDERS
To be held on April 23, 1997
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Robert D. Basham, J. Timothy Gannon,
and Joseph J. Kadow, and each of them, as Proxy holders and attorneys,
with full power of substitution, to appear and vote all the Common Stock
of Outback Steakhouse, Inc. (the "Company"), which the undersigned shall
be entitled to vote at the Annual Meeting of Stockholders of the Company,
to be held at the Tampa Convention Center, 333 South Franklin Street,
Tampa, Florida, on Wednesday, April 23, 1997, at 10:00 a.m., Tampa time,
and at any adjournments or postponements thereof, hereby revoking any and
all proxies heretofore given, and authorizes and directs said Proxy
holders to vote all the Common Stock of the Company represented by this
Proxy as follows, with the understanding that if no directions are given
below, said changes will be voted FOR the election of the four Directors
nominated by the Board of Directors and FOR the proposals set forth
below.
(continued, and to be continued and dated on the other side.)
OUTBACK STEAKHOUSE, INC.
P.O. BOX 11187
NEW YORK, N.Y. 10203-0187
<PAGE> BACK PAGE OF PROXY CARD
(Note: Entire pack page of proxy card printed in red.)
1. ELECTION OF DIRECTORS
FOR ALL NOMINEES LISTED BELOW [ ]
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW. [ ]
*EXCEPTIONS [ ]
NOMINEES: DEBBI FIELDS, EDWARD L. FLOM, ROBERT S. MERRITT, CHRIS T.
SULLIVAN
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, MARK THE "EXCEPTIONS BOX AND WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED BELOW.)
*EXCEPTIONS:_______________________________________________________
2. AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01, FROM
100,000,000 SHARES TO 200,000,000 SHARES.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. AMEND THE COMPANY'S AMENDED AND RESTATED STOCK OPTION PLAN TO INCREASE
THE NUMBER OF SHARES OF COMMON STOCK FOR WHICH OPTIONS MAY BE GRANTED
FROM 4,923,500 TO 10,000,000, AND ADOPT CERTAIN OTHER AMENDMENTS
REGARDING ADMINISTRATION OF THE PLAN.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. IN THEIR DISCRETION TO ACT ON ANY OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
CHANGE OF ADDRESS AND OR COMMENTS MARK HERE [ ]
YOUR SIGNATURE ON THIS PROXY FORM SHOULD BE EXACTLY AS THE NAME APPEARING
HEREON. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS, TRUSTEES AND
SIMILAR CAPACITIES SHOULD SO INDICATE. FOR JOINT ACCOUNTS IN THE NAME
OF EACH JOINT OWNER SHOULD BE SIGNED.
DATED _____________________, 1997
_________________________________
SIGNATURE
_________________________________
SIGNATURE, IF HELD JOINTLY
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
VOTES MUST BE INDICATES (X) IN BLACK OR BLUE INK. [ ]
