Edgar Filing: OUTBACK STEAKHOUSE INC

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OUTBACK STEAKHOUSE INC.
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(LOGO)

OUTBACK STEAKHOUSE, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON APRIL 24, 2002

Notice is hereby given that the Annual Meeting of Stockholders of
OUTBACK STEAKHOUSE, INC. (the "Company") will be held at the A la Carte Event
Pavilion, 4050-B Dana Shores Drive, Tampa, Florida 33634, on Wednesday, April
24, 2002 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 February 28,
2002 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, 2002 JOSEPH J. KADOW
Secretary

STOCKHOLDERS ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED POSTAGE-PAID 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 24,
2002 at 10:00 A.M., Tampa time, at the A la Carte Event Pavilion, 4050-B Dana
Shores Drive, Tampa, Florida 33634, 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, 2001 are first being sent to stockholders on or about March
28, 2002.

The close of business on February 28, 2002 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 77,302,211 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 13. The 13 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
---- --- ----- -------

Robert D. Basham....................................................... 54 1991 2005
W. R. Carey, Jr........................................................ 54 1992 2005
Nancy Schneid.......................................................... 43 1995 2005
Toby S. Wilt........................................................... 57 1997 2005

Robert D. Basham............... Founder, President and Chief Operating
Officer of the Company since its formation
in 1991.

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
kforce.com, Inc. and Crosswalk.com, Inc.

Nancy Schneid.................. Senior Vice President - Marketing and
Advertising of Outback Steakhouse of
Florida, Inc. ("OSF"), the Company's
predecessor and wholly owned subsidiary,
since October 2000. From 1991 to October
2000, Vice President-Marketing of OSF.

Toby S. Wilt................... Chairman of Christie Cookie Company, a
privately owned multi-faceted gourmet cookie
manufacturer, retailer and wholesaler since
1989, and President of TSW Investment
Company, a privately owned investment
company since 1987.

DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING

DIRECTOR TERM
NAME AGE SINCE EXPIRES
---- --- ----- -------

Paul E. Avery.......................................................... 42 1998 2004
John A. Brabson, Jr.................................................... 61 1992 2004
Charles H. Bridges..................................................... 71 1992 2004
Debbi Fields-Rose...................................................... 45 1996 2003
Edward L. Flom......................................................... 72 1991 2003
J. Timothy Gannon...................................................... 53 1991 2004
Robert S. Merritt...................................................... 50 1992 2003
Lee Roy Selmon......................................................... 47 1994 2004
Chris T. Sullivan...................................................... 54 1991 2003

Paul E. Avery.................. President of OSF since April 1997. From 1993
to 1997, Mr. Avery served as Senior Vice
President of OSF.

John A. Brabson, Jr............ President of Brabson Investments, Inc., a
privately owned investment company 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.

Charles H. Bridges............. Retired; until 1998, Vice President,
Treasurer and director of Matilda Management
Company, a private restaurant management
company that formerly operated Outback
Steakhouse(R) restaurants in northern
California as a franchisee of the Company.

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.

Edward L. Flom................. Retired; until 1993, Chairman and Chief
Executive Officer of Florida Steel
Corporation, a steel manufacturer and
fabricator.

J. Timothy Gannon.............. Founder and Senior Vice President of the
Company since its formation in 1991.

Robert S. Merritt.............. Senior Vice President-Finance, Chief
Financial Officer and Treasurer of the
Company since 1991.

Lee Roy Selmon................. Director of Athletics, University of South
Florida, a state university since May, 2001.
From 1993 to May, 2001, Mr. Selmon served as
Associate Athletic Director for External
Affairs, University of South Florida.

Chris T. Sullivan.............. Founder, Chairman and Chief Executive
Officer of the Company since its formation
in 1991.

The Board held four meetings in 2001. Each of Mrs. Fields-Rose and Mr.
Wilt attended fewer than 75% of the total combined number of Board meetings and
committee meetings on which each serve, respectively. The Board has an Audit
Committee, a Compensation Committee and 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 2001. 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
Board of Directors has adopted the Audit Committee Charter (the "Charter"),
which was provided to stockholders as an attachment to the proxy statement for
the 2001 annual meeting.

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 two meetings during 2001. The Compensation Committee
is responsible for establishing the compensation of executive officers and
administers the Company's Amended and Restated Stock Option Plan.

The members of the Nominating Committee are Messrs. Brabson, Carey and
Wilt. Mr. Brabson serves as Chairman of the Nominating Committee. The Nominating
Committee held one meeting during 2001. The Nominating Committee determines the
Company's requirements for directors and officers and recommends to the full
Board nominees for election. The Nominating Committee met in 2002 to recommend
the nominees presented in this Proxy Statement. The Nominating Committee does
not accept nominations from stockholders.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table describes the beneficial ownership of the Company's
Common Stock as of February 28, 2002 (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 named
executive officer, and all named executive officers and directors as a group.

AMOUNT PERCENT
BENEFICIALLY OF
NAME OF BENEFICIAL OWNER OWNED (1) CLASS
------------------------ --------- -----

Chris T. Sullivan(2)(3)................................................ 8,201,038 10.61%
Robert D. Basham(2)(4)................................................. 9,972,913 12.90%
J. Timothy Gannon(2)(5)................................................ 8,195,060 10.60%
Robert S. Merritt(6)................................................... 287,531 *
Paul E. Avery(7)....................................................... 389,830 *
John A. Brabson, Jr.(8)................................................ 39,009 *
Charles H. Bridges(9).................................................. 771 *
W. R. Carey, Jr.(10)................................................... 45,000 *
Debbi Fields-Rose(11).................................................. 0 *
Edward L. Flom(12)..................................................... 126,028 *
Nancy Schneid(13)...................................................... 85,626 *
Lee Roy Selmon(14)..................................................... 15,000 *
Toby S. Wilt(15)....................................................... 75,000 *
Multi-Venture Partners, Ltd.(2)........................................ 7,820,060 10.12%
T. Rowe Price Associates, Inc.(16)..................................... 5,461,400 7.06%
FMR Corp(17) .......................................................... 10,558,730 13.66%

All directors and executive officers as a group (13 persons)........... 11,792,686 15.26%

*Less than one percent.

(1) 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.

(2) 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 .94% general
partnership interest in MVP. Mr. Sullivan owns a 37.67% limited partner
interest in MVP and 40% of the member interests in SBG; Mr. Basham owns
a 38.36% limited partner interest in MVP and 40% of the member
interests in SBG; and Mr. Gannon owns a 23.03% limited partner interest
in MVP and 20% of the member interests in SBG.

(3) Includes (i) 7,820,060 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.

(4) Includes (i) 7,820,060 shares owned by MVP; and (ii) 1,940,000 shares
owned by the Robert D. Basham Revocable Trust Agreement of 1992 of
which Mr. Basham is the sole beneficiary. Mr. Basham shares voting and
dispositive power with respect to Common Stock owned by MVP.

(5) Includes 7,820,060 shares owned by MVP. Mr. Gannon shares voting and
dispositive power with respect to Common Stock owned by MVP.

(6) Includes 150,000 shares underlying stock options that Mr. Merritt has
the right to acquire at an exercise price of $24.875 per share. Does
not include 600,000 shares underlying stock options that are not
exercisable within 60 days of February 28, 2002.

(7) Includes 112,500, 150,000, and 103,000 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 500,000
shares underlying stock options that are not exercisable within 60 days
of February 28, 2002.

(8) Includes (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 share
equivalents representing shares held under the Directors' Deferred
Compensation and Stock Plan.

(9) Does not include share equivalents representing shares held under the
Directors' Deferred Compensation and Stock Plan.

(10) 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 share equivalents representing shares held under the Directors'
Deferred Compensation and Stock Plan.

(11) Does not include share equivalents representing shares held under the
Directors' Deferred Compensation and Stock Plan.

(12) Consists of 126,028 shares held by the Edward Leonard Flom Revocable
Trust of which Mr. Flom is the grantor and sole trustee. Does not
include share equivalents representing shares held under the Directors'
Deferred Compensation and Stock Plan.

(13) Includes 30,000, 30,000 and 15,000 shares underlying stock options that
Mrs. Schneid has the right to acquire at exercise prices of $17.50,
$15.00 and $24.875 per share, respectively. Does not include 160,000
shares underlying stock options that are not exercisable within 60 days
of February 28, 2002.

(14) Consists of 15,000 shares underlying stock options that Mr. Selmon has
the right to acquire at an exercise price of $17.50 per share. Does not
include share equivalents representing shares held under the Directors'
Deferred Compensation and Stock Plan.

(15) Includes 45,000 shares underlying stock options that Mr. Wilt has the
right to acquire at an exercise price of $15.00 per share. Does not
include share equivalents representing shares held under the Directors'
Deferred Compensation and Stock Plan.

(16) 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 22, 2002, reflecting beneficial
ownership as of December 31, 2001. 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 576,000 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.

(17) Based on a Schedule 13G filed by FMR Corp., a Massachusetts
corporation, with the SEC on February 14, 2002, reflecting beneficial
ownership as of December 31, 2001. Includes: (i) 9,867,680 shares
beneficially owned by Fidelity Management & Research Company
("Fidelity"); (ii) 474,650 shares beneficially owned by Fidelity
Management Trust Company ("FMTC"); and (iii) 212,000 shares
beneficially owned by Fidelity International Limited ("International").
FMR Corp. has the sole power to vote or direct the vote of 682,950
shares and no shared voting power. FMR Corp. has the sole power to
dispose of all 10,558,730 shares.

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 B-101, 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.

EXECUTIVE COMPENSATION

The following table describes the compensation earned by the Chief
Executive Officer and the Company's four other most highly compensated executive
officers of the Company and its subsidiaries (each, a "named executive
officer"):

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 ($) ($)(1) ($) ($) (#) ($) ($)(2)
--------------------------- ---- --- ------ --- --- --- --- ------

Chris T. Sullivan 2001 452,025 0 10,070
Chairman and Chief 2000 430,500 0 9,482
Executive Officer 1999 430,500 363,147 8,956

Robert D. Basham 2001 452,025 0 10,071
President and Chief 2000 430,500 0 9,482
Operating Officer 1999 430,500 363,147 8,761

John Timothy Gannon 2001 336,265 0 9,474
Senior Vice President 2000 320,250 0 8,884
1999 320,250 270,147 9,709

Robert S. Merritt 2001 313,110 0 3,941
Chief Financial Officer, 2000 298,200 0 3,695
Treasurer and Assistant 1999 298,200 0 3,580
Secretary

Paul E. Avery 2001 440,600 479,643 300,000 2,447
President of OSF 2000 420,000 669,330 200,000 2,348
1999 420,000 695,006 2,304

(1) In 1999, Messrs. Sullivan, Basham and Gannon each received an annual
cash award based upon the Company meeting or exceeding specific targets
for earnings. During 1999 - 2001, Mr. Merritt did not receive a bonus.
Bonus amounts paid in 1999-2001 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.

(2) Reflects the present value of the economic benefit for 1999, 2000 and
2001, respectively, of the portion of the premium paid by the Company
during 1999, 2000 and 2001 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, 2001. 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 years,
ending in November 7, 2009. The Company paid the premium for the year
2001. The Company also paid 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

% OF
NUMBER OF TOTAL POTENTIAL REALIZABLE VALUE AT
SHARES OPTIONS/SARS EXERCISE ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO OR BASE STOCK PRICE APPRECIATION
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION FOR OPTION TERM
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ------- ----------- ------ ---- --------------------------------

Paul E. Avery (1) 300,000 11.24% $28.06 04/25/2011 $5,294,035 $13,416,124

--------------------

(1) Exercisable as follows: (a) 60,000 shares on or after April 25, 2004;
(b) 60,000 shares on or after April 25, 2005; and (c) 180,000 shares on
or after April 25, 2006.

Messrs. Sullivan, Basham, Gannon and Merritt did not receive option
grants during 2001.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR

AND FY-END OPTIONS/SAR VALUE TABLE

NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS OPTIONS/SARS AT
ACQUIRED VALUE AT FY-END (#)(1) FY-END ($)*
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------- ----------- ------------- ----------- -------------

Bob Merritt (1) --------- --------- 150,000 600,000 $1,376,250 $5,505,000
Paul E. Avery (2) --------- --------- 365,500 500,000 $5,690,400 $3,619,000

----------

* Based on $34.05, the average high and low sales prices of the Company's Common
Stock on December 31, 2001 as quoted on the New York Stock Exchange.

(1) The 750,000 stock options held by Mr. Merritt as of December 31, 2001,
were granted on January 27, 1999, expire on January 27, 2009, and are
exercisable as follows at an exercise price of $24.875 per share: (a)
150,000 shares on or after January 27, 2002, (b) 150,000 shares on or
after January 27, 2003, and (c) 450,000 shares on or after January 27,
2004.

(2) Of the 865,500 stock options held by Mr. Avery as of December 31, 2001,
(i) 112,500 were granted on September 1, 1993, expire on September 1,
2003, and were exercisable in full as of December 31, 2001 at an
exercise price of $14.33 per share; (ii) 150,000 were granted on
January 25, 1995, expire on January 25, 2005, and were exercisable in
full as of December 31, 2001 at an exercise price of $17.67 per share;
(iii) 150,000 were granted on July 23, 1997, expire on July 23, 2007,
and were exercisable in full as of December 31, 2001 at an exercise
price of $15.00 per share; (iv) 200,000 were granted on February 2,
2000, expire on February 2, 2010, and are exercisable as follows at an
exercise price of $24.94 per share: (a) 40,000 shares on or after
January 1, 2003, (b) 40,000 shares on or after January 1, 2004, and (c)
120,000 shares on or after January 1, 2005; and (v) 300,000 were
granted on April 25, 2001, expire on April 25, 2011, and are
exercisable as follows at an exercise price of $28.06 per share: (a)
60,000 shares on or after April 25, 2004, (b) 60,000 shares on or after
April 25, 2005, and (c) 180,000 shares on or after April 25, 2006.

Messrs. Sullivan, Basham and Gannon do not have any options.

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. 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 and an Outside Director within the meaning
of Section 162(m) of the Internal Revenue Code of 1986, as amended.

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 2001
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 facilitate the
retention of talented executives and encourage 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 2001, 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 for certain executives. 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 Dow Jones US Restaurant 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. In 2001, the base salary of
Chris T. Sullivan, the Company's Chief Executive Officer, was increased from
$430,500 to $452,025, and was based on such factors as the Company's
profitability, cash flow and capital spending for the prior fiscal year, the
aggregate number of new 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 lower than the range of salaries paid by the
companies surveyed.

CASH INCENTIVES. In 2001, 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 performance objectives are met or
exceeded.

Annual Cash Incentives for Messrs. Sullivan, Basham, Gannon and
Merritt. Messrs. Sullivan, Basham, Gannon and Merritt 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 2001 Messrs.
Sullivan, Basham, Gannon and Merritt 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. In 2001, because financial
targets were not met, no cash bonuses were paid to Messrs. Sullivan, Basham,
Gannon and Merritt.

Annual Cash Incentives for Mr. Avery. All executive officers, other
than Messrs. Sullivan, Basham, Gannon and Merritt, 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
2001, no cash bonuses were paid to eligible executive employees.

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 2001, 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 2001, Mr. Avery earned quarterly bonuses aggregating
$479,643 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 and has been amended from time to time.
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), 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.

Mr. Avery is the only named executive officer of the Company who was
granted stock options in 2001. As of February 28, 2002, the named executive
officers appearing in the Summary Compensation Table held stock or the right to
acquire stock representing 14.75% of the Company's outstanding Common Stock,
assuming all outstanding options exercisable within 60 days of February 28, 2002
held by executive officers are exercised. Neither Messrs Sullivan, Basham or
Gannon, the Company's founders, have ever 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. 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

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.

On November 7, 2000, the Company opened a restaurant named "Lee Roy
Selmon's." This restaurant is owned by Selmon's/Florida-I, Limited Partnership.
OS Southern, Inc., a wholly owned subsidiary of the Company, is the sole general
partner and 70% owner of Selmon's/Florida-I, Limited Partnership. Lee Roy
Selmon, a director of the Company, owns a 10% limited partner interest in
Selmon's/Florida-I, Limited Partnership. Mr. Selmon acquired his interest in the
partnership in exchange for the use of his name and a capital contribution of
$101,000. The purchase price was established by the Board based on the value of
Mr. Selmon's name and the partnership's cash expenditure necessary to open the
restaurant.

REPORT BY THE AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company is
responsible for overseeing the Company's financial reporting process on behalf
of the Board of Directors and operates under a written Charter adopted by the
Board of Directors, which was provided to stockholders as an attachment to the
proxy statement for the 2001 annual

meeting. The Audit Committee is composed of three independent directors, as
required by the New York Stock Exchange listing standards. The Audit Committee
annually recommends to the Board of Directors the selection of the Company's
independent auditors. For the year 2001, PricewaterhouseCoopers LLP was the
Company's independent auditor.

Management is responsible for the Company's financial statements and
the financial reporting process, including the systems of internal controls. The
independent auditors are responsible for performing an independent audit of the
Company's consolidated financial statements in accordance with generally
accepted auditing standards and expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting principles,
their judgments as to the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments and the clarity of
disclosures in the financial statements.

The Committee reviewed with the independent auditors the Company's
accounting principles and such other matters as are required to be discussed
with the Committee under generally accepted auditing standards. In addition, the
Committee has discussed with the independent auditors the auditors' independence
from management and the Company including the matters in the written disclosures
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). The Audit Committee further considered
whether the provision by PricewaterhouseCoopers LLP of the non-audit services
described elsewhere in this Proxy Statement is compatible with maintaining the
auditors' independence.

Based upon (i) the Audit Committee's discussion with management and the
independent auditors, (ii) the Audit Committee's review of the representation of
management and (iii) the disclosures by the independent auditors to the Audit
Committee, the Audit Committee recommended to the Board of Directors that the
Company's audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001, for filing with
the Securities and Exchange Commission. The Audit Committee and the Board of
Directors have also recommended the selection of PricewaterhouseCoopers LLP as
the company's independent auditors for 2002.

W.R. Carey, Jr., Chairman
John Anderson Brabson, Jr.
Debbi Fields-Rose
Toby Stack Wilt

During fiscal year 2001, PricewaterhouseCoopers LLP provided various
audit, audit-related and non-audit services to the Company as follows:

a) Audit Fees: Aggregate fees billed for professional services
rendered for the audit of the Company's fiscal year 2001
annual financial statements and review of financial statements
in the Company's Form 10-Q Reports: $177,525.

b) Financial Information Systems Design and Implementation Fees:
None.

c) All Other Fees: $34,000.

The Audit Committee of the Board has considered whether provision of
other services is compatible with maintaining the independent accountant's
independence and has determined that such services have not adversely affected
PricewaterhouseCoopers LLP's independence. Upon recommendation of the Audit
Committee, the Board of Directors has appointed PricewaterhouseCoopers LLP as
independent auditors to examine the consolidated financial statements of the
Company for the fiscal year ending December 31, 2002.

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 reimbursement of the expenses of attending
meetings. In July 1997, the Board adopted the Outback Steakhouse, Inc.
Directors' Deferred Compensation and Stock Plan ("Deferred Compensation Plan").
Under the terms of the Deferred Compensation 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 and held as share
equivalents under the Deferred Compensation Plan for a period of time, as
determined by each director. In 2001, Mr. Brabson received $10,250 in cash and
$10,250 in Common Stock; Mr. Bridges received $5,000.00 cash and $15,000 in
Common Stock; Messrs. Carey and Flom, and Mrs. Fields-Rose each elected to
receive their fees of $20,500, $20,000 and $18,000 respectively, all in Common
Stock; Mr. Selmon received $10,000 in cash and $10,000 in Common Stock; and Mr.
Wilt received $9,750 in cash and $9,750 in Common Stock. All of the fees taken
in the form of Common Stock have been deferred for the year 2001. During the
year 2001, Mr. Bridges received 571 shares of Common Stock pursuant to the
settlement of a deferral election under the Deferred Compensation Plan.

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 on the date of the grant as reported on the Nasdaq
National Market System for grant dates before June 15, 2000, or the New York
Stock Exchange for grant dates on or after June 15, 2000. 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

Mr. Avery is employed with the Company pursuant to an Employment
Agreement dated October, 1990. In October 2000, 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 ending October, 2005.
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 New York Stock Exchange 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 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 New York Stock Exchange 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 a Split Dollar Agreement and Limited
Collateral Assignment as of November 7, 1999, with each of 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 a Policy Employee's family upon the death of that Policy
Employee. 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 February 28, 2002, Messrs. Sullivan, Basham, and Gannon
beneficially owned an aggregate of 10,728,891 shares of the Company's Common
Stock with a value of approximately $382,592,253 based on the closing sale price
of the Company's Common Stock on that date as quoted on the New York Stock
Exchange.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company believes that during the fiscal year 2001, 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 D. Basham filed one Form 4
late with respect to a change in form of beneficial ownership.

PERFORMANCE GRAPH

The following line graph compares the Company's cumulative total
stockholder return with the cumulative total stockholder return of the Dow Jones
U.S. Total Market Index, the Dow Jones U.S. Leisure Goods & Services Index, and
the Dow Jones U.S. Restaurants Index for the last five full fiscal years of the
Company ended December 31, 2001:

1996 1997 1998 1999 2000 2001

OUTBACK STEAKHOUSE INC. 100 107.48 149.07 145.44 145.09 192.06
DOW JONES U.S. TOTAL MARKET 100 131.82 164.63 202.05 183.32 161.47
DOW JONES U.S. LEISURE GOODS & SERVICES 100 121.32 152.70 166.47 139.68 131.74
DOW JONES RESTAURANTS 100 104.09 144.33 140.93 132.38 129.47

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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.

In 2001, OSF paid to Tampa Bay Devil Rays, Ltd., the owners of the
Tampa Bay Devil Rays National League Baseball Franchise, the aggregate amount of
$382,454 to lease four signs for advertising pursuant to a contract entered into
on September 9, 1996 that extends through 2002. The amount to be paid to Tampa
Bay Devil Rays, Ltd., under the contract for 2002, the final year of the
contract, is $393,928.

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 plus sales
tax. In 2001, the sum of $110,994 was paid.

Charles H. Bridges, a member of the Board of Directors, owns a 10%
interest in a limited partnership that owns and operates an Outback Steakhouse
restaurant pursuant to a franchise agreement with OSF.

SELECTION OF INDEPENDENT AUDITORS

At the meeting of the Board of the Company held on January 24, 2001,
the Board selected PricewaterhouseCoopers LLP to serve as the independent
auditors for the Company and its subsidiaries for the year ended December 31,
2001, and at the meeting held on January 23, 2002, the Board selected
PricewaterhouseCoopers LLP to serve as the independent auditors for the Company
and its subsidiaries for the year ending December 31, 2002. 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 2003 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 28, 2002. 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.

As to any proposal that a stockholder intends to present to stockholders
other than by inclusion in the Company's Proxy Statement for the 2003 Annual
Meeting of Stockholders, the proxies named in management's proxy for that
meeting will be entitled to exercise their discretionary voting authority on
that proposal unless the Company receives notice of the matter to be proposed
not later than February 11, 2003. Even if proper notice is received on or prior
to February 11, 2002, the proxies named in the Company's proxy for that meeting
may nevertheless exercise their discretionary authority with respect to such
matter by advising stockholders of that proposal and how they intend to exercise
their discretion to vote on such matter, unless the stockholder making the
proposal solicits proxies with respect to the proposal to the extent required by
Rule 14a-4(c)(2) under the Securities Exchange Act of 1934, as amended.

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.

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 directors as set forth under "Election of Directors" above. 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, 2002 JOSEPH J. KADOW
Secretary

OUTBACK STEAKHOUSE, INC.
2202 N. WEST SHORE BLVD., 5TH FLOOR
TAMPA, FL 33607

COMMON STOCK PROXY

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON APRIL 24, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Chris T. Sullivan, Robert S. Merritt
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 A
la Carte Event Pavilion, 4050-B Dana Shores Drive, Tampa, Florida 33634, on
Wednesday, April 24, 2002, 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 shares 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 executed and dated on the other side.)

OUTBACK STEAKHOUSE, INC.
P.O. BOX 11062
NEW YORK, N.Y. 10203-0062

[ ]

1. ELECTION OF DIRECTORS FOR all nominees [ ] WITHHOLD AUTHORITY to vote for all [ ] *EXCEPTIONS [ ]
listed below nominees listed below

Nominees: Robert D. Basham, W. R. Carey, Jr., Nancy Schneid and Toby Stack Wilt

(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:

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2. In their discretion to act on any other business as may properly come FOR [ ] AGAINST [ ] ABSTAIN [ ]
before the Annual Meeting or any adjournment or postponement thereof.

Change of Address and
or Comments Mark Here [ ]

Your signature on this Proxy form should be exactly
as 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
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| Signature
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| 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. [ ]