SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Permit-
ted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 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):
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(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:
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(4) Date Filed:
<PAGE>
<TABLE>
(LOGO)
OUTBACK STEAKHOUSE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 2000
Notice is hereby given that the Annual Meeting of Stockholders of
OUTBACK STEAKHOUSE, INC. (the "Company") will be held at the Tampa Bay
Performing Arts Center Playhouse, 1010 MacInnes Place North, Tampa,
Florida 33602, on Thursday, April 27, 2000 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 and
until his or her successor is duly elected and qualified; and
2. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on March 2, 2000
are entitled to notice of and to vote at the meeting or any adjournment or
postponement of the meeting.
By Order of the Board of Directors
March 28, 2000 JOSEPH J. KADOW
Secretary
Stockholders who are unable to attend the meeting in person are urged to
complete, date and sign the enclosed proxy and return it in the enclosed
postage-paid envelope.
<PAGE> 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 Thursday, April 27, 2000
at 10:00 A.M., Tampa time, at the Tampa Bay Performing Arts Center Playhouse,
1010 MacInnes Place North, Tampa, Florida 33602, and at any adjournment or
postponement of the meeting. 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, 1999 are first being sent to
stockholders on or about March 28, 2000.
The close of business on March 2, 2000 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 77,638,739 shares
of Common Stock, $.01 par value ("Common Stock"), each of which will be
entitled to one vote.
ELECTION OF DIRECTORS
The Board of Directors (the "Board") has fixed the number of directors of
the Company, pursuant to the Company's Bylaws, at thirteen. The thirteen
directors are divided into two classes of four directors each and one class of
five directors. At the meeting, the stockholders will vote on the election of
the four nominees named below, each to serve for a term of three years and
until his or her successor is duly elected and qualified. A plurality of the
shares of Common Stock present in person or represented by proxy at the
meeting is required for the election of directors. Consequently, the four
nominees who receive the greatest number of votes will be elected as directors
of the Company. Common Stock represented by proxies, unless otherwise
specified, will be voted for the election of the four nominees named below.
The following information identifies the persons nominated for election as
a director and each director of the Company whose term of office will continue
after the meeting.
Nominees for Election at the Annual Meeting
Director Term
Name Age Since Expires
---- --- -------- -------
Debbi Fields-Rose. . . . . . . . . . . . . . . . 43 1996 2003
Edward L. Flom . . . . . . . . . . . . . . . . . 70 1991 2003
Robert S. Merritt. . . . . . . . . . . . . . . . 48 1992 2003
Chris T. Sullivan. . . . . . . . . . . . . . . . 52 1991 2003
Debbi Fields-Rose Founder of Mrs. Fields, Inc., an international
franchisor and operator of retail dessert stores,
serving as Chairman of the Board from 1992 to 1996.
<PAGE>Edward L. Flom Retired; until 1993, 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., a retail electric
service company.
Robert S. Merritt Senior Vice President-Finance, Chief Financial Officer
and Treasurer of the Company since 1991.
Chris T. Sullivan Founder, Chairman and Chief Executive Officer of the
Company since its formation in 1991. Mr. Sullivan also
serves as a director and audit committee member of
Mannatech, Incorporated, which develops and sells
proprietary nutritional supplements and topical products.
Directors Whose Terms Will Continue After the Annual Meeting
Director Term
Name Age Since Expires
---- --- -------- -------
Paul E. Avery. . . . . . . . . . . . . . . . . . 40 1998 2001
Robert D. Basham.. . . . . . . . . . . . . . . . 52 1991 2002
John A. Brabson, Jr. . . . . . . . . . . . . . . 59 1992 2001
Charles H. Bridges . . . . . . . . . . . . . . . 69 1992 2001
W. R. Carey, Jr. . . . . . . . . . . . . . . . . 52 1992 2002
J. Timothy Gannon. . . . . . . . . . . . . . . . 51 1991 2001
Nancy Schneid. . . . . . . . . . . . . . . . . . 41 1995 2002
Lee Roy Selmon . . . . . . . . . . . . . . . . . 45 1994 2001
Toby S. Wilt . . . . . . . . . . . . . . . . . . 55 1997 2002
Paul E. Avery. President of Outback Steakhouse of Florida, Inc.
("OSF"), the Company's predecessor and wholly owned
subsidiary, since April 1997. From 1993 to 1997, Mr.
Avery served as Senior Vice President of OSF.
Robert D. Basham Founder, President and Chief Operating Officer of the
Company since its formation in 1991.
John A. Brabson, Jr. President of Brabson Investments, Inc., since January,
2000. From 1996 to January, 2000, Mr. Brabson served
as Chairman of the Board of Lykes Bros. Inc., a
privately owned holding company. From 1989 to 1996,
Mr. Brabson served as Chairman, Chief Executive
Officer and President of Peoples Gas System, Inc., a
gas service utility company.
Charles H. Bridges Vice President, Treasurer and director of Matilda
Management Company, a private restaurant management
company and a franchisee of the Company that owns
Outback Steakhouse(R) restaurants in northern California.
<PAGE>W. R. Carey, Jr. President and Founder of Corporate Resource
Development, a sales and marketing consulting and
training firm since 1981. Mr. Carey also serves as a
director of Romac International, Inc. and
Crosswalk.com, Inc.
J. Timothy Gannon Founder and Senior Vice President of the Company since
its formation in 1991.
Nancy Schneid Vice President-Marketing of OSF since 1991.
Lee Roy Selmon Associate Athletic Director for External Affairs,
University of South Florida since 1993.
Toby S. Wilt Chairman of Christie Cookie Company since 1989, and
President of TSW Investment Company since 1987.
The Board held four regular meetings and two special meetings in 1999. Mr.
Carey did not attend two Board meetings. The Board has an Audit Committee and
a Compensation Committee. The Board does not have a Nominating Committee.
The members of the Audit Committee are Messrs. Brabson, Carey, and Wilt and
Mrs. Fields-Rose. Mr. Carey serves as Chairman of the Audit Committee. The
Audit Committee held two meetings during 1999. 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. Selmon serves as Chairman of the Compensation Committee. The
Compensation Committee held three meetings during 1999. The Compensation
Committee is responsible for establishing the compensation of executive
officers, and benefits provided under the Company's Amended and Restated Stock
Option Plan.
<PAGE> SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table describes the beneficial ownership of the Company's
Common Stock as of March 2, 2000 (except as noted) by each person known to the
Company to beneficially own 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.
<CAPTION>
Amount Percent
Beneficially of
Name of Beneficial Owner Owned <F1> Class
- ------------------------ ------------- ---------
<S> <C> <C>
Chris T. Sullivan<F2><F3> 11,586,459 14.92%
Robert D. Basham<F2><F4> 11,420,590 14.71%
J. Timothy Gannon<F2><F5> 11,197,737 14.42%
Robert S. Merritt<F6> 256,590 *
Paul E. Avery<F7> 346,830 *
Joseph J. Kadow<F8> 88,000 *
John A. Brabson, Jr.<F9> 40,675 *
Charles H. Bridges<F10> 0 *
W. R. Carey, Jr.<F11> 45,000 *
Debbi Fields-Rose<F12> 45,000 *
Edward L. Flom<F13> 129,328 *
Nancy Schneid<F14> 147,876 *
Lee Roy Selmon<F15> 45,000 *
Toby S. Wilt<F16> 60,000 *
Multi-Venture Partners, Ltd.<F2> 11,197,737 14.42%
T. Rowe Price Associates, Inc.<F17> 5,450,450 7.02%
FMR Corp. <F18> 7,754,900 9.99%
All directors and executive
officers as a group (14 persons) 13,013,611 16.76%
________________________
*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 sole general partner, SBG Investments, L.L.C.
("SBG"), a limited liability company. The management of MVP is controlled
by SBG, which owns a .6559% general partnership interest in MVP.
Mr. Sullivan owns a 27.4877% limited partner interest in MVP and 40% of
the member interests in SBG; Mr. Basham owns a 49.5249% limited partner
interest in MVP and 40% of the member interests in SBG; and Mr. Gannon
owns a 22.3314% limited partner interest in MVP and 20% of the member
interests in SBG.
<PAGE><F3> Consists of (i) 11,197,737 shares owned by MVP; (ii) 346,938 shares owned
by Sullivan Family Investments, Ltd., a family limited partnership of
which Mr. Sullivan serves as general partner; and (iii) 2,568 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 11,197,737 shares owned by MVP. Mr. Basham shares voting and
dispositive power with respect to Common Stock owned by MVP.
<F5> Consists of 11,197,737 shares owned by MVP. Mr. Gannon shares voting and
dispositive power with respect to Common Stock owned by MVP.
<F6> Consists of 112,500 shares underlying stock options that Mr. Merritt has
the right to acquire at exercise price of $17.59 per share. Does not
include 750,000 shares underlying stock options that are not exercisable
within 60 days of March 2, 2000.
<F7> Consists of 112,500, 150,000, and 60,000 shares underlying stock options
that Mr. Avery has the right to acquire at exercise prices of $14.33,
$17.67 and $15.00 per share, respectively. Does not include 90,000 shares
underlying stock options that are not exercisable within 60 days of March
2, 2000.
<F8> Consists of 70,000 and 18,000 shares underlying stock options that
Mr. Kadow has the right to acquire at exercise prices of $16.11 and $15.00
per share, respectively. Does not include 177,000 shares underlying stock
options that are not exercisable within 60 days of March 2, 2000.
<F9> Consists of (i) 15,003 shares underlying stock options that Mr. Brabson
has the right to acquire at an exercise price of $6.67 per share; and (ii)
1,500 shares owned by The John A. Brabson, Jr. Money Purchase Pension Plan
f/b/o John A. Brabson, Jr. Does not include shares deferred under the
Directors' Deferred Compensation and Stock Plan.
<F10>Does not include shares deferred under the Directors' Deferred
Compensation and Stock Plan.
<F11>Consists of 45,000 shares underlying stock options that Mr. Carey has
the right to acquire at an exercise price of $10.67 per share. Does not
include shares deferred under the Directors' Deferred Compensation and
Stock Plan.
<F12>Consists of 45,000 shares underlying stock options that Mrs. Fields-Rose
has the right to acquire at an exercise price of $21.00 per share. Does
not include shares deferred under the Directors' Deferred Compensation and
Stock Plan.
<F13>Consists of 129,328 shares held by the Edward Leonard Flom Revocable
Trust of which Mr. Flom is the grantor and sole trustee. Does not include
shares deferred under the Directors' Deferred Compensation and Stock Plan.
<F14>Consists of 89,250, 30,000 and 12,000 shares underlying stock options
that Ms. Schneid has the right to acquire at exercise prices of $.75,
$17.47 and $15.00 per share, respectively. Does not include 93,000 shares
underlying stock options that are not exercisable within 60 days of March
2, 2000.
<PAGE><F15>Consists of 45,000 shares underlying stock options that Mr. Selmon has
the right to acquire at an exercise price of $17.50 per share. Does not
include shares deferred under the Directors' Deferred Compensation and
Stock Plan.
<F16>Includes 30,000 shares underlying stock options that Mr. Wilt has the
right to acquire at an exercise price of $15.00 per share. Does not
include 15,000 shares underlying stock options that are not exercisable
within 60 days of March 2, 2000. Does not include shares deferred under
the Directors' Deferred Compensation and Stock Plan.
<F17>Based on a Schedule 13G filed by T. Rowe Price Associates, Inc., a
Maryland corporation ("T. Rowe Price") with the Securities and Exchange
Commission ("SEC") on February 8, 2000, reflecting beneficial ownership as
of December 31, 1999. These shares are owned by various individual and
institutional investors for which T. Rowe Price serves as investment
adviser with power to direct investments. T. Rowe Price has sole power to
vote 556,300 of the shares. For purposes of the reporting requirements of
the Securities Exchange Act of 1934 ("Exchange Act"), T. Rowe Price is
deemed to be a beneficial owner of such shares; however, T. Rowe Price
expressly disclaims that it is, in fact, the beneficial owner of such
shares.
<F18>Based on a Schedule 13G filed by FMR Corp., a Massachusetts corporation,
with the SEC on February 14, 2000, reflecting beneficial ownership as of
December 31, 1999. Includes (i) 7,754,900 shares beneficially owned by
Fidelity Management & Research Company ("Fidelity"), (ii) 377,047 shares
beneficially owned by Fidelity Management Trust Company ("FMTC") and (iii)
427,410 shares beneficially owned by Fidelity International Limited
("International"). Fidelity is the beneficial owner of shares as a result
of acting as investment adviser to several investment companies registered
under Section 8 of the Investment Company Act of 1940 ("Fidelity Funds").
International is the beneficial owner of shares as a result of providing
investment advisory and management services to a number of non-U.S.
investment companies (the "International Funds"). Edward C. Johnson, III,
Chairman of FMR Corp., FMR Corp., through its control of Fidelity, and the
Fidelity Funds, each have sole power to dispose of the 7,754,900 shares
owned by the Fidelity Funds. Neither FMR Corp. nor Edward C. Johnson, III
has the sole power to vote or direct the voting of the shares owned
directly by the Fidelity Funds, which power resides with the Fidelity
Funds' Boards of Trustees. FMTC is the beneficial owner of shares as a
result of its serving as investment manager for institutional accounts of
a bank as defined in Section 3(a)(6) of the Exchange Act. Edward C.
Johnson, III and FMR Corp., through its control of FMTC, each has sole
dispositive power over 377,047 shares and sole power to vote or direct the
voting of 377,047 shares owned by the institutional accounts.
International has the sole power to vote and the sole power to dispose of
427,410 shares. Edward C. Johnson, III owns 12.0% and Abigail P. Johnson
owns 24.5% of the outstanding voting common stock of FMR Corp. Strategic
Advisers, Inc. ("Strategic") is an investment adviser registered under
Section 203 of the Investment Company Act and is beneficial owner of its
shares as a result of providing investment advisory services to
individuals. Strategic does not have sole power to vote or direct the
voting of the shares. Fidelity, FMTC and Strategic are wholly-owned
subsidiaries of FMR Corp.
The mailing address of the Company and of Messrs. Sullivan, Basham and
Gannon is 2202 North West Shore Boulevard, 5th Floor, Tampa, Florida 33607.
The address 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. The address of FMR Corp. is 82 Devonshire Street,
Boston, Massachusetts 02109.
<PAGE> EXECUTIVE COMPENSATION
The following table describes the compensation earned by the Company and
its subsidiaries to the Chief Executive Officer and the Company's four other
most highly compensated executive officers:
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payouts
Securities
Other Under-
Annual Restricted lying 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 1999 $430,500 $363,147 8,956<F2>
Chairman and Chief 1998 $410,000 $ 0
Executive Officer 1997 $400,000 $ 0
Robert D. Basham 1999 $430,500 $363,147 8,761<F2>
President and Chief 1998 $410,000 $ 0
Operating Officer 1997 $400,000 $ 0
J. Timothy Gannon 1999 $320,250 $270,147 9,709<F2>
Senior Vice President 1998 $305,000 $ 0
1997 $290,000 $ 0
Paul E. Avery 1999 $420,000 $695,006 2,304<F2>
President of OSF 1998 $400,000 $651,273
1997 $200,000 $379,213 150,000
Nancy Schneid 1999 $300,000 $ 56,250 75,000
Vice President-Marketing 1998 $198,957 $ 98,608
of OSF 1997 $168,000 $ 13,608 30,000
<F1> Messrs. Sullivan, Basham, and Gannon each received an annual cash award
based upon the Company meeting or exceeding specific targets for earnings.
Bonus amounts paid in 1998 and 1999 to Ms. Schneid represent amounts paid
under the Company's Corporate Employee Bonus Plan and a discretionary
bonus. Bonus amounts paid in 1997-1999 to Mr. Avery represent amounts paid
under the quarterly bonus plan established for him by the Compensation
Committee and the Company's Corporate Employee Bonus Plan. See "Executive
Compensation-Report by the Compensation Committee on Executive
Compensation-Cash Incentives" for a discussion of these plans.
<F2> Reflects the present value of the economic benefit for 1999 of the portion
of the premium paid by the Company during 1999 with respect to the split-
dollar life insurance agreement for the named individual (see "Employee
Agreements" below for a description of such agreements), based on the time
period between the date on which the premium was paid by the Company and
December 31, 1999 which, as of November 7, 2000 is the earliest date on
which the Company could terminate the agreement and receive a refund, without
interest, of the premium it paid. Under the split-dollar life insurance
agreement, the Company was obligated to pay the premium for the split-dollar
policy for only one year, and may pay the premiums annually for ten
<PAGE> years, ending in November 7, 2009. The Company paid only the
premium on a related "key man" policy of which the Company is a
beneficiary, resulting in the substantial reduction in the total premium
payment.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
% of
Total Potential Realizable Value at
Number of Options/SARs Assumed Annual Rates of
Shares Underlying Granted to Exercise Stock Price appreciation
Options/SARs Employees in or Base Price Expiration for Option Term
Name Granted Fiscal Year ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Nancy Schneid <F1> 75,000 2.14% $24.8750 01/27/2009 $1,173,282 $2,973,325
- ------------
Messrs. Sullivan, Basham, Gannon and Avery did not receive option grants during 1999.
<F1>Exercisable as follows: (a) 15,000 shares on or after January 27, 2002;
(b) 15,000 shares on or after January 27, 2003; and (c) 45,000 shares on or
after January 27, 2004.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Options/SAR Value Table
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
Shares Acquired Value at FY-End (#) FY-End ($)*
Name on Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Nancy Schneid <F1> 13,500 $ 415,676 125,250 99,000 $2,582,390 $ 354,562
Paul E. Avery<F2> 114,330 $3,408,986 202,500 210,000 $2,155,331 $2,082,825
_______________________
*Based on the average high and low sales prices of the Company's Common Stock on December 31, 1999 as
quoted on the Nasdaq National Market System.
<F1>Of the 224,250 stock options held by Ms. Schneid as of December 31, 1999,
(i) 89,250 were granted in May 1991, expire on May 3, 2001, and were
exercisable in full as of December 31, 1999 at an exercise price of $0.75
per share, (ii) 30,000 were granted on July 1, 1994, expire on July 1,
2004, and were exercisable in full as of December 31, 1999 at an exercise
price of $17.47 per share, (iii) 30,000 were granted on July 23, 1997,
expire on July 23, 2007, and are exercisable as follows at an exercise
price of $15.00 per share: (a) 6,000 shares on or after January 1, 1999,
(b) 6,000 shares on or after January 1, 2000, and (c) 18,000 shares on or
after January 1, 2001, and (iv) 75,000 were granted on January 27, 1999,
expire on January 27, 2009, and are exercisable as follows at an exercise
price of $24.8750 per share: (a) 15,000 shares on or after January 27,
2002, (b) 15,000 shares on or after January 27, 2003, and (c) 45,000
shares on or after January 27, 2004.
<PAGE><F2>Of the 412,500 stock options held by Mr. Avery as of December 31, 1999,
(i) 112,500 were granted in September 1993, expire on September 1, 2003,
and were exercisable in full as of December 31, 1999 at an exercise price
of $14.33 per share; (ii) 150,000 were granted on January 25, 1995, expire
on January 25, 2005, and are exercisable as follows at an exercise price
of $17.67 per share: (a) 30,000 shares on or after January 1, 1998, (b)
30,000 shares on or after January 1, 1999, and (c) 90,000 shares on or
after January 1, 2000; and (iii) 150,000 were granted on July 23, 1997,
expire on July 23, 2007, and are exercisable as follows at an exercise
price of $15.00 per share: (a) 30,000 shares on or after January 1, 1999,
(b) 30,000 shares on or after January 1, 2000, and (c) 90,000 shares on or
after January 1, 2001.
Report by the Compensation 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. The
Compensation Committee consists of three directors whose names are listed at
the end of this report, each of whom is a Non-Employee Director within the
meaning of Rule 16b-3 under the Exchange Act.
The Compensation Committee's primary objective with respect to executive
compensation is to establish programs that 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 1999 that
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 to closely align the interests of the Company's executives
with the long-term interests of stockholders that facilitates retention of
talented executives and encourages Company stock ownership and capital
accumulation; and
* emphasis on total compensation versus cash compensation, under which
base salaries are generally set somewhat lower than competitive levels but
that 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.
For 1999, 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 Compensation Committee generally attempts to set base
salaries of executive officers at levels that are below "market" rates, as
determined from information gathered by the Company from companies that are
similar in size and in the same industry group as the Company and that 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 1998 to 1999 from $410,000 to $430,500 based on such
<PAGE>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 the Company's competitive
position. The Compensation Committee believes that the executive salaries
established by the Compensation 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 1999, Company executives were eligible to receive
quarterly and/or annual cash bonus awards to focus attention on achieving key
goals pursuant to the following bonus plans that are designed to provide
competitive incentive pay only in the event such objectives are met or
exceeded.
Annual Cash Incentives for Messrs. Sullivan, Basham, and Gannon. Messrs.
Sullivan, Basham and Gannon were eligible to receive annual cash bonus awards
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. In
the event the Company met or exceeded the after-tax earnings portion of the
Company's financial plan for the year, in 1999 Messrs. Sullivan, Basham and
Gannon would earn a bonus of 25% of each executive's base salary. Also, in
such event, the Compensation Committee would establish a bonus pool equal to
25% of the difference between the actual after-tax earnings and 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.
Annual Cash Incentives for Mr. Avery and Ms. Schneid. All executive
officers other than Messrs. Sullivan, Basham and Gannon participate in the
Company's Corporate Employee Bonus Plan, which provides for a bonus based upon
the percentage that the after-tax earnings of the Company meets or exceeds the
after-tax earnings goal of the Company's annual financial plan, determined by
dividing the Company's after-tax earnings for the year by the after-tax
earnings reflected in the financial plan (the "Percentage of Plan Achieved").
For fiscal 1999, the Percentage of Plan Achieved equaled 103.5% and eligible
executive employees earned a bonus equal to 18.75% of their base salary.
Quarterly Cash Incentives for Mr. Avery. The Compensation Committee
believes that the success of restaurant operations is essential to the
Company's success, and established a separate quarterly incentive program for
Mr. Avery. In 1999, 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 $150,000
for that calendar quarter, subject to a 1% adjustment for each 1% above or
below the operational plan. In 1999, Mr. Avery earned quarterly bonuses
aggregating $616,256 under this plan.
Long-Term Stock Incentives. The Company's Amended and Restated Stock Option
Plan (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 stockholders 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
stockholders 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 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 stockholders. In granting
stock options to executive officers, the Compensation 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.
Ms. Schneid is the sole named officer of the Company granted stock options
in 1999. As of March 2, 2000, the named executive officers appearing in the
Summary Compensation Table held stock or the right to acquire stock
representing 15.76% of the Company's outstanding Common Stock, assuming all
outstanding options exercisable within 60 days of March 2, 2000 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) of the Internal Revenue Code of 1986, as amended (the
"Code"), 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 Company generally structures its
compensation programs to avoid limitation on deductibility of compensation
paid to covered employees. However, in 1999, one covered employee exercised
expiring stock options which may result in $3.6 million of compensation that
may not be deductible by the Company. The Compensation Committee may consider
alternatives to its existing compensation programs in the future with respect
to qualifying executive compensation for deductibility.
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 stockholders.
Compensation Committee
Charles H. Bridges
Edward L. Flom
Lee Roy Selmon, Chairman
<PAGE> Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Charles H. Bridges, Lee Roy Selmon,
and Edward L. Flom, none of whom is or was an officer or employee of the
Company or any of its subsidiaries. Mr. Selmon serves as Chairman of the
Compensation Committee.
Directors' Compensation
Directors of the Company who are not employees of the Company receive fees
of $15,000 per year, $1,000 per Board meeting attended, and $500 per committee
meeting attended, plus the expenses of attending meetings. In July 1997, the
Board adopted the Outback Steakhouse, Inc. Directors' Deferred Compensation
and Stock Plan ("Stock Plan"). Under the terms of the Stock Plan, directors
who are not employees of the Company are required to receive 50% of their
total fees in Common Stock of the Company and may choose to receive the
remaining 50% in cash and/or shares of Common Stock in the Company. The
receipt of any portion in shares of Common Stock of the Company may be
deferred for a period of time, as determined by each director. In 1999,
Messrs. Brabson, Carey and Wilt each received $10,000 in cash and $10,000 in
Common Stock; Messrs. Bridges and Selmon received $10,250 in cash and $10,250
in Common Stock; and Mr. Flom and Mrs. Fields-Rose each elected to receive
their fees, in the respective amounts of $20,500 and $20,000, all in Common
Stock. All of the fees taken in the form of Common Stock have been deferred.
Generally, upon election to the Board, each director who is not an
executive officer is granted a one-time stock option to acquire 45,000 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 National Market
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, all 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
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 as
quoted on the Nasdaq National Market System or the principal exchange on which
the Company's Common Stock is then traded for 30 consecutive trading days ending
on the business day before the Executive's death. 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
<PAGE>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 as
quoted on the Nasdaq National Market System or the principal exchange on which
the Company's Common Stock is then traded for 30 consecutive trading days
ending on the business day before the date of public disclosure of the
accident or illness. The maximum dollar amount of Common Stock that 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.
The Agreements will remain in place for so long as the Board of Directors
deems appropriate.
The Company entered into Split Dollar Agreement and Limited Collateral
Assignments as of November 7, 1999 with the respective trusts established by
Messrs. Sullivan, Basham, Gannon, Merritt and Avery ("Policy Employees"),
pursuant to which the Company pays the premium costs of life insurance
policies that pay a death benefit of not less than $5 million to one or more
members of the Policy Employee's family upon the death of a Policy Employees.
Under the agreements, the Company pays that portion of each annual policy
premium that, in general terms, is equal to the annual increase in the cash
value of the policy. The Company may cause the agreements to be terminated and
the policies to be surrendered at any time upon 30 days' prior notice. Upon
surrender of the policy or payment of the death benefit under the policy, the
Company is entitled to repayment of an amount equal to the cumulative premiums
previously paid by the Company, with all remaining payments to be made to the
respective trusts. The Company continues to pay the premium on a related "key
man" policy of which the Company is the sole beneficiary and which is designed
to work in conjunction with the agreements to insure the repayment to the
Company of the aggregate amount of the premiums paid by the Company. See
footnote (2) to the "Summary Compensation Table" above for further information
on premium payments made by the Company under these policies.
As of March 2, 2000, Messrs. Sullivan, Basham, and Gannon beneficially
owned an aggregate of 11,809,312 shares of the Company's Common Stock with a
value of approximately $299,661,292 based on the closing sale price of the
Company's Common Stock on that date as quoted on the Nasdaq National Market
System.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that during the fiscal year 1999, all filings with the
Securities and Exchange Commission of its officers, directors and 10%
stockholders complied with requirements for reporting ownership and changes in
ownership of the Company's Common Stock pursuant to Section 16(a) of the
Securities Exchange Act of 1934, except that Robert S. Merritt filed one Form
4 with respect to exercising stock options after the applicable date.
<PAGE> PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
stockholder return with the cumulative total stockholder return of the Dow
Jones Equity Market Index, the Dow Jones Entertainment and Leisure Index, and
the Dow Jones Restaurants Index for the last five full fiscal years of the
Company ended December 31, 1999:
[Note: A line graph appears here depicting the data in the following table.]
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
OUTBACK STEAKHOUSE INC. 100 152.66 113.83 122.34 169.68 165.56
DOW JONES EQUITY MARKET 100 138.37 170.84 227.18 291.64 351.05
DOW JONES ENTERTAINMENT & LEISURE 100 132.34 145.08 177.44 234.48 255.30
DOW JONES RESTAURANTS 100 142.98 145.60 150.62 227.71 223.61
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1999, OSF paid to Tampa Bay Devil Rays, Ltd., the owners of the Tampa
Bay Devil Rays National League Baseball Franchise, the aggregate amount of
$360,500 to lease four signs for advertising pursuant to a contract entered
into on September 9, 1996 that extends through 2002. The amounts to be paid to
Tampa Bay Devil Rays, Ltd., under the contract for future years is: $371,315
for 2000, $382,454 for 2001, and $393,928 for 2002.
<PAGE> On February 20, 1995, OSF entered into a Private Suite License Agreement
with Tampa Bay Devil Rays, Ltd., for a private suite at Tropicana Field
located in St. Petersburg, Florida, commencing on March 31, 1998, and ending
on December 31, 2007. The license fee is $100,000 per year.
Mr. Sullivan, through his corporation Out of the Park, Inc., and
Mr. Basham, through his corporation Touch 'Em All, Inc., each own a percentage
of Tampa Bay Devil Rays, Ltd., as general partners. Messrs. Sullivan and
Basham own all of the outstanding common stock of their respective
corporations and serve as their only directors and officers.
On July 19, 1999, the Company purchased an 18% membership interest in
Louisville Motor Speedway Associates, LLC ("LMS") from Multi-Venture Partners,
Ltd. ("MVP"). Messrs. Sullivan, Basham and Gannon are the sole members of SBG
Investments, LLC, the sole general partner of MVP, and also the only limited
partners of MVP. The purchase price paid by the Company to MVP for the 18%
membership interest was $592,000. The Board established the purchase price
based upon the initial cost of $592,000 to MVP in March 1998 for the 18%
membership interest in LMS and an appraisal opinion from Deloitte & Touche
LLP.
SELECTION OF INDEPENDENT AUDITORS
At the meeting of the Board of the Company held on January 27, 1999, the
Board selected PricewaterhouseCoopers LLP to serve as the independent auditors
for the Company and its subsidiaries for the year ended December 31, 1999.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the stockholders' meeting with the opportunity to make a statement, if they
desire to do so, and to respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the 2000 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 26, 2000.
The Company will not be required to include in its proxy statement or form of
proxy a stockholder proposal that is received after that date or that
otherwise fails to meet requirements for stockholder proposals established by
regulations of the SEC.
OTHER MATTERS
The solicitation of proxies is made by the Board on behalf of the Company.
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 internet, telephone, telegraph or personally. Proxies may
be solicited by directors, officers and employees of the Company without
additional compensation.
<PAGE> If the enclosed proxy is executed and returned, the shares represented by
the proxy 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 four directors as set forth under "Election of Directors" above and
FOR Proposal ONE. Pursuant to 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 proposal presented at the meeting.
Your presence at the meeting will not operate to revoke your proxy. You may
revoke your proxy at any time if 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 that will be presented
for action at the meeting.
By Order of the Board of Directors
March 28, 2000 JOSEPH J. KADOW
Secretary
</TABLE>
<PAGE> FRONT SIDE OF PROXY CARD
OUTBACK STEAKHOUSE, INC.
2202 N. West Shore Boulevard, 5th Floor
Tampa, Florida 33607
COMMON STOCK PROXY
ANNUAL MEETING OF SHAREHOLDERS
To be held on April 27, 2000
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Robert D. Basham, John 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 Bay Performing Arts Center Playhouse, 1010 MacInnes Place North Street,
Tampa, Florida, on Thursday, April 27, 2000, 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 proposal set forth below.
(Continued, and to be executed and dated on the other side.)
OUTBACK STEAKHOUSE, INC.
P.O. BOX 11016
NEW YORK, N.Y. 10203-0016
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-ROSE, EDWARD LEONARD FLOM, ROBERT S. MERRITT AND
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. 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 _____________________, 2000
_________________________________
SIGNATURE
_________________________________
SIGNATURE, IF HELD JOINTLY
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. [ ]
