SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No.____)No. )
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LUBY'S CAFETERIAS, INC.
_____________________________________________________________________________
(Name of Registrant as Specified in itsIts Charter)
LUBY'S CAFETERIAS, INC._____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)Statement if other than the Registrant)
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the filing fee is calculated and state how it was determined):
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December 1, 19952, 1996
Dear Shareholders:
You are cordially invited to attend the 19961997 Annual Meeting of Shareholders of
Luby's Cafeterias, Inc. to be held on Friday,Tuesday, January 12, 1996,14, 1997, at 10:00
a.m., at the San Antonio Airport Hilton, 611 Northwest Loop 410, San Antonio,
Texas. We hope that you will be able to attend the meeting. Matters on which
action will be taken at the meeting are explained in detail in the notice and
proxy statement following this letter.
We hope as many of you as possible will attend the meeting in person. Whether
or not you expect to be present and regardless of the number of shares you
own, please mark, sign, and mail the enclosed proxy in the envelope provided.
Sincerely,
JOHN B. LAHOURCADE
_____________________
John B. LahourcadeRALPH ERBEN
__________________________
Ralph Erben
Chairman of the Board RALPH ERBEN
_____________________
Ralph Erbenand
Chief Executive Officer
JOHN E. CURTIS, JR.
__________________________
John E. Curtis, Jr.
President and
Chief ExecutiveOperating Officer
LUBY'S CAFETERIAS, INC.
2211 Northeast Loop 410
P. O. Box 33069
San Antonio, Texas 78265-3069
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 12, 199614, 1997
To the Shareholders of
LUBY'S CAFETERIAS, INC.
NOTICE IS HEREBY GIVEN that the 19961997 Annual Meeting of Shareholders of
Luby's Cafeterias, Inc., a Delaware corporation, will be held at the San
Antonio Airport Hilton, 611 Northwest Loop 410, San Antonio, Texas, on
Friday,Tuesday, January 12, 1996,14, 1997, at 10:00 a.m., local time, for the following
purposes:
(1) To elect threefour directors to serve until the 19992000 Annual Meeting of
Shareholders;
(2) To authorize restructuring of the Company into a holding company as
described herein;
(3) To approve the appointment of auditors for the 19961997 fiscal year; and
(3)(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
In accordance with the Bylaws of the Company and a resolution of the
Board of Directors, the record date for the meeting has been fixed at
November 15, 1995.1996. Only shareholders of record at the close of business on
that date will be entitled to vote at the meeting or any adjournment thereof.
A complete list of shareholders entitled to vote at the meeting will be
on file at the Company's corporate office at 2211 Northeast Loop 410, San
Antonio, Texas, for a period of ten days prior to the meeting. During such
time, the list will be open to the examination of any shareholder during
ordinary business hours for any purpose germane to the meeting.
Shareholders who do not expect to attend the meeting in person are urged
to sign the enclosed proxy and return it promptly. A return envelope is
enclosed for that purpose.
LUBY'S CAFETERIAS, INC.
James R. Hale
Secretary
Dated: December 1, 19952, 1996
LUBY'S CAFETERIAS, INC.
2211 Northeast Loop 410
P. O. Box 33069
San Antonio, Texas 78265-3069
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Luby's
Cafeterias, Inc., a Delaware corporation (the "Company"), to be voted at the
19961997 Annual Meeting of Shareholders on January 12, 1996,14, 1997, or at any adjournment
thereof. This proxy statement and the accompanying proxy are being mailed to
shareholders on or about December 1, 1995.2, 1996.
THE COMPANY
The Company is a Delaware corporation and was formerly a wholly-owned
subsidiary of Luby's Cafeterias, Inc., a Texas corporation ("Luby's Texas").
On December 31, 1991, Luby's Texas was merged with and into the Company for
the purpose of reincorporating in Delaware. Unless the context indicates
otherwise, the word "Company" as used herein includes Luby's Texas as
predecessor.
VOTING AND PROXIES
Only holders of record of common stock of the Company as of the close of
business on November 15, 1995,1996, will be entitled to vote at the meeting. There
were 23,334,50323,271,600 shares of common stock outstanding on the record date,
exclusive of 4,068,5644,131,467 treasury shares. Each share of common stock
outstanding is entitled to one vote. A majority of the shares outstanding will
constitute a quorum at the meeting.
All shares represented by proxies will be voted in accordance with the
shareholders' directions. If the proxy card is signed and returned without
any direction given, shares will be voted in accordance with the
recommendations of the Board of Directors as described in this proxy
statement. Any shareholder giving a proxy may revoke it at any time before
the proxy is voted by giving written notice of revocation to the Secretary of
the Company, by submitting a later-dated proxy, or by attending the meeting
and voting in person.
The election of nominees for director requires a plurality of the votes
cast. Authorization of the restructuring of the Company into a holding
company requires the affirmative vote of a majority of the outstanding shares
entitled to vote at the meeting. Approval of the appointment of auditors
requires the affirmative vote of a majority of the shares present at the
meeting in person and by proxy. Abstentions and broker nonvotes will be
included in determining the presence of a quorum at the meeting. Broker
nonvotes and abstentions will not be included in determining the number of
votes cast on any matter.
The Company's Bylaws provide that candidates to stand for election as
directors at an annual meeting of shareholders shall be nominated by the Board
of Directors. Candidates may also be nominated by any shareholder of record
entitled to vote at the meeting, provided the shareholder gives timely notice
thereof. To be timely, such notice shall be delivered in writing to the
Secretary of the Corporation at the principal executive offices of the Company
not later than 90 days prior to the date of the meeting of shareholders at
which directors are to be elected and shall include (i) the name and address
of the shareholder who intends to make the nomination, (ii) the name, age, and
business address of each nominee, and (iii) such other information with
respect to each nominee as would be required to be disclosed in a proxy
solicitation relating to an election of directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934.
ELECTION OF DIRECTORS
The Bylaws of the Company provide for a Board of Directors divided into
three classes, as nearly equal in number as possible, with the members of each
class to serve three-year terms. The directors whose terms expire at the 19961997
Annual Meeting of Shareholders who have been nominated by the Board
of Directors for reelection to serve until the 19992000 Annual Meeting of
Shareholders and until their successors are duly elected and qualified are
David B. Daviss, Roger R. Hemminghaus,John E. Curtis, Jr., Ralph Erben, Walter J. Salmon, and William E. Robson.Joanne Winik.
The Board of Directors recommends a vote FOR such nominees.
The proxies named in the accompanying proxy, who have been designated by
the Board of Directors, intend to vote for the above mentioned nominees for
election as directors, unless otherwise specified. Such nominees have
indicated a willingness to serve as directors, but should any of them
decline or be unable to serve, the persons named as proxies may vote for
another person in the place of such nominee according to their best judgment
in the interest of the Company.
The following information is furnished with respect to each of the
nominees and for each of the other sevensix directors whose terms will continue
after the meeting. Such information includes all positions with the Company
and principal occupations during the last five years.
Nominees for Election to Terms Expiring in 2000
JOHN E. CURTIS, JR. is President, Chief Operating Officer, and Chief
Financial Officer of the Company and a member of the Executive
Committee. Prior to January 1996, he was Executive Vice President.
He was Senior Vice President and Chief Financial Officer from 1988
to 1995 and was Treasurer from 1990 to 1995. He is 49 and has been
a director of the Company since 1991 and an officer since 1982.
RALPH ERBEN is Chairman of the Board and Chief Executive Officer of the
Company and Chairman of the Executive Committee. Prior to January
1996, he was President. He is 65 and has been a director of the
Company since 1985 and an officer since 1978.
WALTER J. SALMON is Stanley Roth, Sr. Professor of Retailing, Senior
Associate Dean, and Director of External Relations, Harvard Graduate
School of Business Administration. He is 66 and has been a director
of the Company since 1979 and is Chairman of the Compensation
Committee. He is a director of Circuit City Stores, Inc., The Neiman
Marcus Group, Hannaford Bros. Co., Harrah s Entertainment, Inc., The
Quaker Oats Company, and Tufts Associated Health Plans, Inc.
JOANNE WINIK is President, General Manager, and a director of KLRN-TV,
San Antonio s Pubic Broadcasting Service affiliate. She is also a
director of Southern Educational Communications Association. She is
56 and has been a director of the Company'since 1993 and is a member
of the Audit Committee.
Incumbent Directors Whose Terms Expire in 1998
LAURO F. CAVAZOS is Professor of Family Medicine and Community Health,
Tufts University School of Medicine (since 1996), Acting Chair of
Community Health, Tufts University School of Medicine (since 1994),
and a management and education consultant (since 1991). He was
Adjunct Professor of Community Health, Tufts University School of
Medicine from 1992 to 1994. He is 69 and has been a director of the
Company since 1993 and is a member of the Audit Committee. He is a
director of Diamond Shamrock, Inc. and New England Education Loan
Marketing Corporation.
JOHN B. LAHOURCADE is an investor. Prior to January 1996, he was
Chairman of the Board of the Company. He is a member of the
Executive Committee. He has been employed by the Company as a
consultant since January 1996. He is 72 and has been a director of
the Company since 1970.
GEORGE H. WENGLEIN is an investor and one of the founders of the Company.
He is a member of the Compensation Committee. He has been employed
by the Company as a consultant since 1988. He is 79 and has been a
director of the Company since 1959.
Incumbent Directors Whose Terms Expire in 1999
DAVID B. DAVISS is an investor. Prior to 1991 he was Executive Vice
President-Chief Operating Officer and a director of La Quinta
Motor Inns, Inc. He is an advisory director of Austin
Trust Company. He is 5960 and has been a director of the Company since
19841984. He is a member of the Executive Committee and is Chairman of
the Audit Committee.
ROGER R. HEMMINGHAUS is Chairman of the Board, President, Chief Executive
Officer, and a director of Diamond Shamrock, Inc. He is also Deputy
Chairman of the Federal Reserve Bank, Eleventh District, and a
director of Southwestern Public Service Company. He is 5960 and has
been a director of the Company since 1989 and is a member of the
Compensation Committee.
WILLIAM E. ROBSON is Executive Vice President-Operations of the Company.
He was Senior Vice President-Operations from 1992 to 1995 and was
Senior Vice President-Operations Development from 1988 to 1992. He
is 5455 and has been a director of the Company since 1993 and an
officer since 1982.
Incumbent Directors Whose Terms Expire in 1997
JOHN E. CURTIS, JR. is Executive Vice President and Chief Financial
Officer of the Company. He was Senior Vice President and Chief
Financial Officer from 1988 to 1995 and was Treasurer from 1990 to
1995. He is 48 and has been a director of the Company since 1991
and an officer since 1982.
RALPH ERBEN is President and Chief Executive Officer of the Company and a
member of the Executive Committee. He was Chief Operating Officer
of the Company from 1988 to 1990, when he was elected Chief
Executive Officer. He is 64 and has been a director of the Company
since 1985 and an officer since 1978.
WALTER J. SALMON is Stanley Roth, Sr. Professor of Retailing, Senior
Associate Dean, and Director of External Relations, Harvard Graduate
School of Business Administration. He is 65 and has been a director
of the Company since 1979 and is Chairman of the Compensation
Committee. He is a director of Circuit City Stores, Inc., The
Neiman Marcus Group, Hannaford Bros. Co., Harrah's Entertainment,
Inc., The Quaker Oats Company, and Tufts Associated Health Plans,
Inc.
JOANNE WINIK is President, General Manager, and a director of KLRN-TV,
San Antonio's Pubic Broadcasting Service affiliate. She is also a
director of Southern Educational Communications Association. She
is 55 and has been a director of the Company since 1993 and is a
member of the Audit Committee.
Incumbent Directors Whose Terms Expire in 1998
LAURO F. CAVAZOS is Adjunct Professor of Community Health, Tufts
University School of Medicine (since 1992), Acting Chair of
Community Health, Tufts University School of Medicine (since 1994),
and a management and education consultant (since 1991). He was U.S.
Secretary of Education from 1988 to 1990. He is 68 and has been a
director of the Company since 1993 and is a member of the Audit
Committee. He is a director of Diamond Shamrock, Inc. and New
England Education Loan Marketing Corporation.
JOHN B. LAHOURCADE is Chairman of the Board of the Company and Chairman
of the Executive Committee. He was Chief Executive Officer of the
Company from 1984 to 1990. He is 71 and has been a director of the
Company since 1970 and an officer of the Company since 1969.
GEORGE H. WENGLEIN is an investor and one of the founders of the
Company. He is a member of the Compensation Committee and a member
of the Executive Committee. He has been employed by the Company as
a consultant since 1988. He is 78 and has been a director of the
Company since 1959.
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
Meetings and Compensation of Directors
During the fiscal year ended August 31, 1995,1996, the Board of Directors held
sixfive meetings. Each director who is not an officer of the Company is paid
$3,000 for each meeting of the Board of Directors which he or she attends plus
$12,000 per year for his or her services as a director. In addition, each
director who is not an officer of the Company is paid $1,000 for each meeting
of any committee of the Board which he or she attends, except that the
Chairman of the Audit Committee isand the Chairman of the Compensation Committee
are each paid $1,200 for each meeting of the Auditsuch Committee which he attends.
Nonemployee Director Stock Options
On January 13, 1995, the shareholders of theThe Company approved thehas a Nonemployee Director Stock Option Plan (the
Nonemployee Director Plan) under which nonemployee directors are periodically
granted nonqualified options to purchase shares of the Company sCompany's common stock
at an option price equal to 100% of fair market value on the date of grant.
Each option terminates upon the expiration of ten years from the date of grant
or one year after the optionee ceases to be a director, whichever first
occurs. An option may not be exercised prior to the expiration of five years
from the date of grant, subject to certain exceptions specified in the
Nonemployee Director Plan.
Pursuant to the provisions of the Nonemployee Director Plan, options were
granted to nonemployee directors on January 13, 1995,12, 1996, for the following number
of option shares at an option price of $22.75$21.625 per share: Lauro F. Cavazos -
5,000 shares; David B. Daviss -
1,666 shares;5,000 shares and Roger R. Hemminghaus - 1,666
shares; Walter J. Salmon - 3,333 shares; and Joanne Winik - 3,3335,000 shares.
Audit Committee
The Audit Committee of the Board of Directors, which currently consists
of David B. Daviss, Lauro F. Cavazos, and Joanne Winik, met threetwo times during
the 19951996 fiscal year. The functions of the Audit Committee are to review the
qualifications and independence of the independent auditors; to recommend
the appointment of the independent auditors; to approve the assignment of new
audit partners; to review the scope of the annual audit and the annual audit
process; to review the annual audited financial statements; to review the
annual reporting process; to review internal audit, accounting, data
processing, financial functions, and personnel; to review accounting and data
processing controls and procedures; to review legal matters that may have a
significant effect on the financial statements; to review the internal audit
function; to provide regular opportunities for the director of internal audit
and management to meet privately with the Audit Committee; to review the
Company's policies on standards of conduct; and to report the activities of
the Audit Committee to the Board of Directors on a regular basis.
Compensation Committee
The Compensation Committee of the Board of Directors currently consists
of Walter J. Salmon, Roger R. Hemminghaus, and George H. Wenglein. The
Compensation Committee met fourthree times during the 19951996 fiscal year. The
functions of the Compensation Committee are to review the compensation of
officers and other management personnel and to make recommendations concerning
such compensation. The Compensation Committee also administers those employee
benefit plans of the Company which provide for administration by a Board
committee.
Compensation Committee Interlocks and Insider Participation
George H. Wenglein, a member of the Compensation Committee, is a former
officer of the Company and is employed by the Company as a consultant at a
salary of $10,417 per month under a contract which expires in 1998. During
fiscal 1995,1996, income tax services were provided at the Company's expense for
Mr. Wenglein in the amount of $3,000.
Nominating Committee
The Board of Directors does not have a standing nominating committee or a
committee performing similar functions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
An architectural firm in which Paul A. Hesson is a principal regularly
renders architectural services for the Company. Mr. Hesson is the
father-in-law of John E. Curtis, Jr., Executive Vice President, Chief Operating Officer,
and Chief Financial Officer of the Company and a member of the Board of
Directors. For the fiscal year ended August 31, 1995,1996, architectural fees paid
to Mr. Hesson's firm by the Company amounted to approximately $889,000.$963,300. In
the opinion of the Company, such fees are comparable to those paid by the
Company to other architectural firms for similar services.
James R. Hale, Secretary of the Company, is a member of the law firm of
Cauthorn Hale Hornberger Fuller Sheehan & Becker Incorporated. The firm
performs legal services for the Company on a regular basis. For services
rendered during the fiscal year ended August 31, 1995,1996, the Company paid
such firm approximately $439,000.$563,000. In the opinion of the Company, such fees
are comparable to those charged by other law firms for similar services.
COMPLIANCE WITHJohn B. Lahourcade is a former officer of the Company. He is employed by
the Company as a consultant at a salary of $7,083 per month under a contract
which expires in 2001.
SECTION 16(a) OF THE EXCHANGE ACTOWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and any persons holding more than ten
percent of the Company's common stock to report their initial ownership of the
Company's common stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange, and to
provide copies of such reports to the Company. Based upon the Company's
review of copies of such reports received by the Company and written
representations of its directors and executive officers, the Company believes
that during the year ended August 31, 1995,1996, all Section 16(a) filing
requirements were satisfied.satisfied, except with respect to certain late reports filed
by Joanne Winik, a director of the Company. In September 1996 she filed two
late reports on SEC Form 4 reflecting four transactions that were not reported
on a timely basis.
PRINCIPAL SHAREHOLDERS
To the knowledge of the Company, no person owned beneficially as of
November 15, 1995,1996, more than five percent of the outstanding common stock of
the Company.
MANAGEMENT SHAREHOLDERS
According to information furnished by the persons concerned, each
director, each nominee for director, and all directors and officers of the
Company as a group, owned beneficially the indicated number and percentage of
outstanding shares of common stock of the Company as of November 15, 1995:1996:
Name of Individual or Shares Beneficially Owned Percent
Identity of Group as of November 15, 1995(1)1996(1) of Class
Lauro F. Cavazos (2) 650950 ---%
John E. Curtis, Jr. (3) 37,218 0.16%38,749 .17%
David B. Daviss (4) 3,037 0.01%.01%
Ralph Erben (5) 181,080 0.77%179,267 .77%
Roger R. Hemminghaus 3,400 0.01%.01%
John B. Lahourcade (6) 203,305 0.87%202,405 .87%
William E. Robson (7) 37,446 0.16%35,497 .15%
Walter J. Salmon (8) 2,255 0.01%.01%
George H. Wenglein 750,000 3.21%730,000 3.14%
Joanne Winik 4501,096 ---%
All directors and officers of
the Company, as a group (9) 1,944,077 8.24%1,819,161 7.75%
(1) Except as indicated in the following notes, each person named in the
table owns directly the number of shares indicated and has the sole
power to vote and to dispose of such shares.
(2) The shares shown for Dr. Cavazos are held jointly with his wife.
(3) The shares shown for Mr. Curtis include 602 shares held for his
benefit in the Company's Dividend Reinvestment Plan and 26,15025,950 shares which he has
the right to acquire within 60 days under the Company's employee
benefit plans.
(4) The shares shown for Mr. Daviss are held for his benefit in a custodial
account.
(5) The shares shown for Mr. Erben include 42,35042,100 shares which he has the
right to acquire within 60 days under the Company's employee benefit
plans and 26,815 shares which he holds as trustee for himself and his
children.
(6) The shares shown for Mr. Lahourcade include 1,125 shares held jointly
with his wife.
(7) The shares shown for Mr. Robson include 3620 shares held jointly with his
wife, 64 shares held jointly with his son, 866 shares held for his
benefit in an Individual Retirement Account, 30 shares held by his
wife, 15 shares held by his wife
as trustee for his grandchildren, 9431,307 shares held for his benefit in
the Company's Dividend Reinvestment Plan, and 26,15020,950 shares which he has
the right to acquire within 60 days under the Company's employee benefit
plans.
(8) The shares shown for Dr. Salmon are held for his benefit in an
Individual Retirement Account.
(9) The shares shown for all directors and officers as a group include
245,216204,305 shares which they have the right to acquire within 60 days under
the Company's employee benefit plans.
EXECUTIVE COMPENSATION
The table below contains information concerning annual and long-term
compensation of the chief executive officer and the other four most highly
compensated executive officers (the "Named Officers") for services in all
capacities to the Company for the fiscal years ended August 31, 1996, 1995,
1994,
and 1993:1994:
Summary Compensation Table
Long-TermAnnual Compensation AnnualLong-Term Compensation
Awards Payouts
_____________________________________________________ _______________________________
Other______________________________________________________ _____________________________ _________
Securities All
AnnualOther Under- Other
Compen-Name and Annual Restricted lying LTIP Compen-
Name andPrincipal Fiscal sationCompen- Stock Options/ PayoutsLTIP sation
Principal
Position Year Salary Bonus(1) (2)sation(2) Awards SARs(3) (4)Payouts(4) (5)
__________________ ______ ____________________________________________________________ ______________________________ ________ _______ __________ __________ _______ _______
Ralph Erben 1995 $340,0001996 $350,000 $ ------- $0 $0 5,000 $119,146 $33,786
Chairman of the 1995 340,000 --- 0 0 4,500 $65,629 $32,027
President65,629 32,027
Board and Chief 1994 330,000 148,500 0 0 4,500 ------- 18,681
Chief Executive 1993 315,000 148,500 0 0 5,700 ---- 18,839
Officer
John B. Lahourcade 1995 212,500 ---- 0 0 ---- ---- 14,096
Chairman of 1994 225,000 ---- 0 0 ---- ---- 2,380
the Board 1993 237,500 ---- 0 0 ---- ---- 4,020
John E. Curtis, Jr. 1996 283,333 --- 0 0 2,500 58,528 14,062
President, Chief 1995 240,000 ------- 0 0 2,100 32,815 14,096
Executive ViceOperating Officer, 1994 230,000 69,000 0 0 2,100 ------- 2,380
President and 1993 225,000 69,000 0 0 2,800 ---- 4,020 Chief Financial
Officer
William E. Robson 1996 263,333 --- 0 0 2,500 58,527 19,795
Executive Vice 1995 240,000 ------- 0 0 2,100 32,815 19,308
Executive VicePresident - 1994 230,000 69,000 0 0 2,100 ------- 7,118
President- 1993 221,500 69,000 0 0 2,800 ---- 8,327
Operations
Jimmy W. Woliver 1996 190,000 --- 0 0 1,600 31,354 14,062
Senior Vice 1995 182,500 ------- 0 0 1,250 10,938 14,096
Vice President-President - 1994 180,000 33,750 0 0 1,250 ------- 2,380
Operations
1993 175,000 33,750Clyde C. Hays III 1996 174,167 --- 0 0 1,800 ---- 4,0201,600 22,993 14,062
Senior Vice 1995 156,250 --- 0 0 1,250 --- 14,096
President - 1994 150,000 28,125 0 0 1,250 --- 2,380
Operations
(1) Reflects incentive-based cash bonuses awarded under the Company's Incentive Bonus Plan.
Awards are stated as compensation in the year with respect to which the award was
earned, even if actually paid in the following year.
(2) Perquisites and other personal benefits received by the executive officers are not
included because the aggregate amount of such compensation does not exceed the lesser of
$50,000 or 10% of the total amount of annual salary and bonus for any Named Officer.
(3) The Company has not issued any stock appreciation rights to the Named Officers.
(4) The amounts paid out in fiscal 1996 and 1995 under the Company sCompany's Performance Unit Plan
relate to the three-year performance cyclecycles ended August 31, 1994.1995 and 1994,
respectively. No amounts were paid out under the Company's Performance Unit Plan in
fiscal years 1993-1994.1994.
(5) Includes contributions under the Profit Sharing Plan of $14,062, $14,096, $2,380, and $4,020$2,380 per
Named Officer for 1996, 1995, 1994, and 1993,1994, respectively. Remaining amounts for Messrs.
Erben and Robson are for amounts accrued under deferred compensation agreements.
The following table reports the grant of stock options and stock
appreciation rights ("SARs") to the Named Officers during fiscal 1995.1996.
Options were granted under the Company's Management Incentive Stock Plan. The
Company has not granted SARs to any of the Named Officers.
Option/SAR Grants in Last Fiscal Year
Potential Realizable
Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term(3)
____________________________________________________________________ _________________________Term (3)
_________________________________________________________________________ __________________
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Expira-
Options/SARs Employees in price tion
Granted(1)Price Expiration
Name Granted (1) Fiscal Year(2)Year (2) ($/sh) Date 5%($) 10%($)
____________________________________________________________________ _______________________________________________________________________________________________________________________
Ralph Erben 4,500 3.31% $23.75 10-9-2000 $36,348 $82,461
John B. Lahourcade ----- ----- ----- ----- ----- -----5,000 2.52% $21.00 10-08-2001 $35,691 $80,965
John E. Curtis, Jr. 2,100 1.54% 23.75 10-9-2000 16,962 38,4822,500 1.26% 21.00 10-08-2001 17,846 40,483
William E. Robson 2,100 1.54% 23.75 10-9-2000 16,962 38,4822,500 1.26% 21.00 10-08-2001 17,846 40,483
Jimmy W. Woliver 1,250 .92% 23.75 10-9-2000 10,097 22,9061,600 .81% 21.00 10-08-2001 11,421 25,909
Clyde C. Hays III 1,600 .81% 21.00 10-08-2001 11,421 25,909
(1) Options were granted at fair market value of the common stock on the date of grant.
Options may not be exercised during the first 12 months following the date of grant.
(2) Based upon a total of 136,100198,650 options granted to employees in fiscal 1995.1996.
(3) The dollar amounts in these columns are the result of calculations at the 5% and 10% rates
set by the Securities and Exchange Commission and should not be considered as a
forecast of future stock prices.
The table below reports exercises of stock options and SARs by the Named
Officers during fiscal 19951996 and the value of their unexercised stock options
and SARs as of August 31, 1995.1996. The stock options were granted under the
Company's Management Incentive Stock Plan. The Company has not granted SARs
to any of the Named Officers.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares FY-End FY-End(1)
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
__________________________________________________________________________________________
Ralph Erben 3,975 $30,131 39,400/10,000 $106,178/$6,906
John B. Lahourcade 6,000 40,980 ----- -----
John E. Curtis, Jr. 1,875 12,103 23,688/5,650 61,312/5,313
William E. Robson ----- ----- 21,550/5,650 53,925/5,313
Jimmy W. Woliver ----- ----- 3,525/3,875 7,288/4,250
(1) The value of unexercised options is based on a price of $19.875 per common share at
August 31, 1995.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARS Options/SARs
Acquired at FY-End at FY-End(1)
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
______________________________________________________________________________
Ralph Erben 4,800 $23,784 42,350/7,250 $238,438/$13,125
John E. Curtis, Jr. 2,138 9,792 26,150/3,550 149,425/6,563
William E. Robson 7,500 52,188 18,650/3,550 102,550/6,563
Jimmy W. Woliver 4,900 25,625 1,875/2,225 2,344/4,200
Clyde C. Hays III 5,242 35,772 7,683/2,225 39,828/4,200
(1) The value of unexercised options is based on a price of $23.625 per
common share at August 31, 1996.
The following table reports performance units granted to the Named
Officers during fiscal 19951996 under the Company's Performance Unit Plan and the
Company's Management Incentive Stock Plan:
Long-Term Incentive Plans - Awards in Last Fiscal Year
Performance
or Other Estimated Future Payouts Under
Number of Period Until Non-Stock Price Based Plans
Shares, Units, Maturation __________________________________
Name or Other Rights or Payout Threshold Target Maximum
___________________ _______________ _____________ __________ ________ _________
Ralph Erben 4,400 1995-97 $48,202 $96,404 $144,606
John B. Lahourcade ----- ----- ----- ----- -----
John E. Curtis, Jr. 2,100 1995-97 23,000 46,011 69,017
William E. Robson 2,100 1995-97 23,006 46,011 69,017
Jimmy W. Woliver 900 1995-97 9,860 19,719 29,579
Long-Term Incentive Plans - Awards in Last Fiscal Year
Performance Estimated Future Payouts under
Number or Other Non-Stock Price Based Plans
of Shares, Period Until ______________________________
Units, or Maturation
Name Other Rights or Payout Threshold Target Maximum
______________________________________________________________________________
Ralph Erben 5,000 1996-98 $65,118 $130,235 $195,353
John E. Curtis, Jr. 2,350 1996-98 30,605 61,210 91,816
William E. Robson 2,350 1996-98 30,605 61,210 91,816
Jimmy W. Woliver 1,200 1996-98 15,628 31,256 46,885
Clyde C. Hays III 1,200 1996-98 15,628 31,256 46,885
The performance units described in the above table were granted in
October 1994,1995 for the three-year performance cycle ending August 31, 1997.1998. At
the end of the performance cycle, performance awards are made in cash or in
shares of common stock, or both, based upon the attainment by the Company of
certain performance goals during the three-year cycle. Each performance unit
is assigned a performance factor, which is a percentage (not exceeding 150%)
resulting from achievement of the performance goals established at the date of
grant. Each performance unit is assigned a payment value, which is a dollar
amount determined by multiplying the performance factor by the average market
price of the common stock of the Company on 20 trading days immediately
preceding the end of the performance cycle. If the performance goals are not
achieved, a lesser performance factor is assigned (not below 50%), with no
future payouts if achievement is below 80% of goal - "Threshold." The values
included in the above table assume a 5% annual growth rate in the price of the
Company's common stock subsequent to August 31, 1995;1996; however, this assumption
should not be considered as a forecast of future stock prices.
DEFERRED COMPENSATION
The Company's Nonemployee Director Deferred Compensation Plan permits
nonemployee directors to defer all or a portion of their directors' fees in
accordance with applicable regulations under the Internal Revenue Code.
Deferred amounts bear interest at the average interest rate of U.S. Treasury
ten-year obligations. The Company's obligation to pay deferred amounts is
unfunded and is payable from general assets of the Company.
The Company has deferred compensation agreements with several officers
and former officers of the Company. Under the agreements, the Company is
obligated to provide annual benefits for each such officer or his
beneficiaries during a period of ten years after his death, disability, or
retirement. The agreements are unfunded, but the Company has purchased life
insurance as a means of partially offsetting the cost of such benefits. The
estimated annual benefits payable upon retirement at normal retirement age
for each of the Named Officers are as follows: Ralph Erben, $32,100; John B.
Lahourcade, $43,400; John E.
Curtis, Jr., $0;$-0-; William E. Robson, $24,200; and Jimmy W. Woliver, $0.
On October 27, 1994,$-0-; and
Clyde C. Hays III, $-0-.
The Company has a Supplemental Executive Retirement Plan, effective as of
December 31, 1995. The objective of the Boardplan is to provide benefits for
selected officers at normal retirement age with 25 years of Directors adopted a Nonemployee
Director Deferred Compensation Plan, which became effective January 1, 1995.
Suchservice equal to
50% of their final average compensation offset by Social Security, profit
sharing benefits, and deferred compensation. Of the 28 officers designated to
participate in the plan, permits nonemployee directors to defertwo have retired and are receiving benefits under the
plan. Accrued benefits of all actively employed participants become fully
vested upon termination of the plan or a portion of their
directors' feeschange in accordance with applicable regulations undercontrol (as defined in the
Internal
Revenue Code. Deferred amounts bear interest at the average interest rate of
U.S. Treasury ten-year obligations.plan). The Company's obligation to pay deferred
amountsplan is unfunded, and the Company is payable from general assetsobligated to make benefit
payments solely on a current disbursement basis.
The following table illustrates the approximate annual pension that the
Named Officers in the Summary Compensation Table would receive under the
Supplemental Executive Retirement Plan if the plan remained in effect and the
Named Officers retired at age 65 and elected an individual life annuity.
Pension Plan Table
Years of Service
Final Average ____________________________________________
Earnings 15 20 25
_______________ ___________ _________________ ____________
$150,000 $ 45,000 $ 60,000 $ 75,000
300,000 90,000 120,000 150,000
450,000 135,000 180,000 225,000
600,000 180,000 240,000 300,000
Amounts shown as "final average earnings" in this table represent the
average of the Company.last five years of compensation, which is substantially the
same as the total of salary, bonus, and LTIP payouts as shown in the Summary
Compensation Table for the Named Officers. As of December 1, 1996, the
credited years of service under the Supplemental Executive Retirement Plan for
Messrs. Curtis, Robson, Woliver, and Hays are 17, 30, 32, and 23,
respectively. Mr. Erben is not covered by the plan. The annual benefit
amounts shown above are subject to an offset by benefits payable under
deferred compensation agreements, if applicable, the profit sharing plan, and
Social Security. Net benefits under the plan are prorated by years of service
less than 25; after 25 years of service, the net benefits are unchanged.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee")
presents the following report on executive compensation. The report describes
the Company's executive compensation programs and the bases on which the
Committee made compensation decisions for fiscal 19951996 with respect to the
Company's executive officers, including those named in the compensation
tables.
Compensation Objectives
The Committee conducts an annual review of the Company's executive
compensation program. The objectives of the executive compensation program
include the following:
To offer fair and competitive base salaries consistent with the
Company's position in the food service industry;
To reward executives for corporate and individual performance
through an annual incentive bonus program;
To encourage future performance through the use of long-term
incentives such as stock options and performance units; and
To encourage executives to acquire and retain ownership of the
Company's common stock.
The Company's executive compensation program is designed to enable the
Company to attract, retain, and motivate the highest quality of management
talent. To achieve that objective, the Committee has developed a compensation
program which combines annual base salaries with annual and long-term
incentives tied to corporate performance and to increases in shareholder
value.
Annual Base Salaries
The Committee annually establishes the base salaries to be paid to the
Company's executive officers during the coming year, subject to approval by
the Board of Directors. In setting base salaries, the Committee takes into
account several factors, including the executive's experience,
responsibilities, management abilities, and job performance, as well as
performance of the Company as a whole and competitive compensation data.
Annual Incentive Bonuses
The Company's annual incentive bonus plan for executive officers and
other key personnel directly links annual cash incentive payments to the
attainment of predetermined earnings per share goals established by the
Committee and approved by the Board of Directors. Eligible executives are
assigned threshold, target, and maximum bonus levels as a percentage of base
salary, based upon increase in earnings per share over the prior year.
For fiscal 1995,1996, the incentive compensation targets for executive
officers ranged from 10%14% to 30% of base salary if targeted earnings per share
were attained, with maximums ranging from 15%20% to 45% of base salary. As a
result of the 6.9%7% increase in earnings per share for fiscal 19951996 over fiscal
1994,1995, no cash incentive bonuses were paid to executive officers for fiscal
1995.1996.
Stock Options
The Committee normally grants incentive stock options annually to
eligible executive officers and other key employees. The options, which are
granted at 100% of market price on the date of grant, are usually for six-year
terms exercisable 50% after one year and 100% after two years. The number
of option shares granted each year is normally determined by a formula based
upon the executive's base salary and the market price of the common stock.
The number of option shares granted will vary based upon position level, with
the more senior officers receiving larger grants. The number of option
shares held by an executive is not considered in determining stock option
awards.
Performance Units
The Committee (with the approval of the Board of Directors) normally
grants performance units annually to eligible executive officers and other key
employees based upon attainment by the Company of predetermined earnings per
shareand
equity goals over a performance cycle of three consecutive years. The
goals are established by the Committee and approved by the Board of Directors.
During fiscal 1995,1996, performance awards were granted to eligible executive
officers for the three-year performance cycle ending August 31, 1997.1998. The
number of performance units granted is normally determined by a formula based
upon the executive's base salary and the market price of the common
stock. Performance units are payable at the end of each performance cycle in
cash or shares of common stock, or both, if the performance goals for the
cycle are attained. Performance unit payments were paidmade in November 1995October 1996 for
the three-year performance cycle which ended August 31, 1995,1996, amounting to
$372,067.$191,971.
Stock Ownership Guidelines
In January 1996, pursuant to recommendations of the Compensation
Committee, the Board of Directors adopted guidelines for ownership of Company
common stock by executives and nonemployee directors. The guidelines provide
that each person in the following categories is expected to attain the
indicated level of stock ownership within five years:
(1) Chief Executive Officer - shares having a value equal to four times
annual base salary;
(2) President, Executive Vice President, and Senior Vice President -
shares having a value equal to two times annual base salary;
(3) Vice President - shares having a value equal to annual base salary;
and
(4) Nonemployee director - shares having a value equal to 3.5 times
annual retainer fees.
Compensation of Chief Executive Officer
During the period March 1, 1993, through February 28, 1995, Mr. Erben's
base salary was $330,000 per year. The Company's net income for fiscal 1994
increased 11% over fiscal 1993 and net income per share was up 15%. On the
basis of that performance, and on the basis of competitive market data
provided by an independent consultant, the Committee recommended (and the
Board approved) an increase in Mr. Erben's annual base salary to $350,000,
effective March 1, 1995. His annual base salary has not been increased since
that date.
On October 9, 1995, Mr. Erben was granted an incentive stock option on October 10, 1994, for
4,5005,000 shares under the incentive stock plan. The number of shares was
determined in accordance with the formula discussed above. During fiscal
1995,1996, Mr. Erben exercised an option for 3,975 sharesstock options granted to him in 1988
under the Company's employee stock option plan.prior years for
a total of 4,800 shares.
On October 10, 1994,9, 1995, Mr. Erben was granted 4,4005,000 performance units under
the Company's management incentive stock plan for the three-year performance
cycle ending August 31, 1997.1998. The number of units was determined in
accordance with the formula discussed above. Mr. Erben received a
performance unit payment for the three-year performance cycle which ended
August 31, 1995,1996, having a payment value of $119,146.$60,770.
Members of the Committee:
Walter J. Salmon, Chairman
Roger R. Hemminghaus
George H. Wenglein
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Company's common stock for the five fiscal years ended August 31, 1995,1996,
with the cumulative total return on the S&P 500 Index, the S&P Restaurant
Industry Index and an industry peer
group index. The peer group index is comprised of Buffets, Inc.; Hometown
Buffet, Inc.; Luby's Cafeterias, Inc.; Morrison RestaurantsFresh Cooking, Inc.; Perkins
Family Restaurants, L.P.; Piccadilly Cafeterias, Inc.; Ryan's Family Steak
Houses, Inc.; Shoney's, Inc.; and Sizzler International, Inc. These
companies are multiunit family restaurant operators in the mid-price range,
with similar stock market capitalization.
Although the Company is one of the six companies in the S&P Restaurant
Industry Index, this index is significantly impacted by McDonald's
Corporation, which comprises approximately 85% of the market capitalization of
this group.
The cumulative total shareholder return computations set forth in the
performance graph assume the investment of $100 in the Company's common stock,
the S&P 500 Index, the S&P Restaurant Index, and the peer group index on September 1, 1990,August 31, 1991, and
reinvestment of all dividends.
The performance graph has been omitted in the EDGAR filing. A table of
the graph's data points is shown below.
FIVE-YEAR CUMULATIVE TOTAL RETURNFive-year Cumulative Return
Years Ended August 31,
________________________________________________
1990_________________________________________
1991 1992 1993 1994 1995 1996
Luby's Cafeterias, Inc. $100 97 87 144 135 11890 150 140 122 150
Peer Group $100 134 136 170 150 12797 119 98 83 85
S&P 500 $100 127 137 158 166 202
S&P108 124 131 159 189
PLAN OF INTERNAL RESTRUCTURING
Introduction
The Company currently does business primarily as an operating entity --
holding the majority of its operating assets directly and conducting
operations solely in the Company. The growth of the Company, the L & W Seafood
venture, as well as other joint venture proposals and investment proposals
which have been made to the Company in recent years have caused the Company to
reexamine its current corporate structure. The Board of Directors has
determined that it would be in the best interests of the Company and its
shareholders for the Company to have the flexibility to transfer some or
substantially all of the Company's operating assets to direct or indirect
wholly-owned subsidiaries, in which case the Company would become a holding
company. Toward this end, the Board of Directors has unanimously
approved, subject to shareholder approval, the transfer of some or all of the
Company's operating assets and liabilities to one or more direct or indirect
wholly-owned subsidiaries (the Subsidiaries) of the Company (the
Restructuring).
The Company may choose to implement at one time or in stages over time
all or any portion of the Restructuring or may elect not to effect the
Restructuring at all. The Company anticipates that some or all of the
employees of the Company would be transferred to the Subsidiaries in
connection with any implementation of the Restructuring. Restructuring is not
contingent upon any government or regulatory approval.
The Restructuring will not have a material effect on the consolidated
financial statements of the Company. Notwithstanding the new structure, the
Company will continue to report its financial operations and condition on a
consolidated basis. The net income of the Subsidiaries, reflected as income
on the Company's consolidated financial statements, will be available for the
payment of dividends to shareholders of the Company to the extent the Company
has received dividends or other distributions from the Subsidiaries. The
Restructuring will not have a material effect on the payment of dividends to
shareholders of the Company.
Shareholder approval is necessary under Delaware law to implement the
Restructuring because the Company believes the Restructuring, if fully
implemented, would involve the transfer of substantially all of the Company's
assets. The submission of the Restructuring for shareholder approval will not
affect the Company's rights, under applicable Delaware law, to dispose of less
than substantially all of its assets (including by transfer to one or more
subsidiaries) without shareholder approval. Thus, even if the Restructuring
is not approved by the shareholders, the Company may from time to time in the
future transfer portions of its assets to subsidiaries or other affiliated
entities or to third parties on terms and for consideration approved by the
Board of Directors, subject to applicable Delaware law, without seeking
shareholder approval. Approval of the Restructuring by shareholders will not
preclude the shareholders right to challenge any future dispositions by the
Company of the stock or assets of the Subsidiaries or of other subsidiaries or
affiliated entities if such dispositions are not made as part of the
Restructuring or in compliance with applicable Delaware law.
Reasons for the Restructuring
If the Restructuring is fully implemented, the principal operations of
the Company would be conducted by the Subsidiaries. The Company believes that
the new structure would permit greater flexibility in the management and
financing of existing and future business operations. The holding
company structure would also facilitate the Company's entry into new
businesses and the formation of joint ventures or other business ventures with
third parties, and may enable the Company to achieve certain tax benefits.
Finally, the Restructuring would further the objective of operating the
Company's businesses, and any additional businesses acquired in the future, on
a more self-sufficient, independent economic basis while decreasing the risk
that liabilities attributable to any one of the Company's businesses could
be imposed upon one or more of the Company's unrelated businesses.
Transfer of Assets; Effects of the Restructuring
The Company currently plans that the Restructuring would result in the
transfer of substantially all its trademark rights and copyrights and certain
other intellectual property rights to an indirect wholly-owned subsidiary of
the Company. The Company also currently plans to transfer substantially all
of the remaining assets and related liabilities to an indirect wholly-owned
subsidiary, which is a limited partnership. The Company currently intends to
implement these transfers as soon as practicable following shareholder
approval of the Restructuring. The following diagrams show the present
structure of the Company and the structure that would result from the
implementation of the Restructuring as currently planned:
CURRENT STRUCTURE AFTER RESTRUCTURING
Luby's Cafeterias, Inc. Luby's Cafeterias, Inc.
(80% Ownership) Luby's Holdings, Inc.
L & W Seafood, Inc.
(80%
Ownership)
L & W Seafood, LUBCO, Luby's Limited
Inc. Inc. Partner, Inc.
Luby's
Management,
Inc.
(1% Ownership) (99% Ownership)
Luby's Restaurants
$100 121 153 195 202 256Limited Partnership
The foregoing diagrams illustrate the effect of the Restructuring as
currently planned. However, if the shareholders approve the Restructuring,
the Company will have the authority to transfer some or substantially all of
its assets to any one or more new or existing direct or indirect wholly-owned
subsidiaries formed under the laws of any state, and the final structure may be
similar to or substantially different from the illustration. In addition, the
Company may choose not to implement the Restructuring at all.
Effect on Shareholders' Rights
The Restructuring will not alter shareholders percentage ownership
interests in the Company, and the Company's common stock will not be affected
by the proposed Restructuring. The shareholders of the Company will continue
as such, with the same voting, dividend and liquidation rights, and ownership
interests as before. As a result of the Restructuring, the shareholders of
the Company will not directly elect the directors of the Subsidiaries.
Directors of the Subsidiaries will be elected at the direction of the Board
of Directors of the Company. Notwithstanding that fact, however, the overall
management of the affairs and operations of the Subsidiaries will be under the
direction of the Board of Directors and is not expected to change
significantly as a result of the Restructuring.
Other Effects on the Company and Shareholders
Except for the changes described herein, consummation of the
Restructuring is not expected to result in any material change in the overall
operations of the Company. Similarly, the Restructuring will not result in
any changes in the current membership of the Board of Directors, and the
executive officers of the Company are expected to remain the same after
consummation of the proposed Restructuring. Persons who are currently serving
as officers or directors of the Company may become officers and/or
directors of the Subsidiaries.
While the Restructuring is not expected to create any conflicts of
interest between the Company and its shareholders, in the event that the
Subsidiaries, through public or private sale, should be owned
in part by persons other than the Company or its shareholders, such conflicts
could arise. However, the Company has no plans to effect a public or private
sale of any part of the ownership of the Subsidiaries.
Some possible disadvantages of the proposal to the Company include the
requirement for observing corporate formalities between and among the Company
and the Subsidiaries, together with some possible increases in accounting and
administrative costs and possible duplication of some administrative
functions. The Board of Directors believes that these disadvantages are not
significant or material. In addition, management of the Company believes that
the cost to implement the Restructuring as currently planned (consisting
primarily of legal and accounting costs and real estate transfer taxes) will
not be material.
Shareholders of the Company will continue to have the same voting,
dividend, and liquidation rights before and after implementation of the
Restructuring. However, as discussed above under Effect on Shareholders
Rights, shareholders of the Company will not be entitled to elect the
directors of the Subsidiaries. Instead, shareholders of the Company will
elect the directors of the Company who will have overall responsibility for
the management of the Company and its subsidiaries and affiliated entities.
Similarly, the shareholders statutory right to inspect the books and records
of the Company under applicable Delaware law may not extend to the books and
records of the Subsidiaries. However, because the Company is a public company
subject to the reporting requirements of the Securities Exchange Act
of 1934 and the rules of the New York Stock Exchange, information regarding
the Company and its subsidiaries and affiliated companies is readily available
to shareholders without resort to the statutory right to inspect the Company's
books and records.
It is also possible that the sale by any one or more of the Subsidiaries
of substantially all of the assets of the Subsidiaries (including through the
sale of the stock of Subsidiaries) following the Restructuring would not
require the approval of the shareholders of the Company under Delaware law
even though the sale of substantially all of the assets by the Company under
the current structure would require shareholder approval. However, the
Company has no plans to sell material assets.
The Board of Directors believes that the advantages of the proposal, as
described under Reasons for the Restructuring above, outweigh the possible
disadvantages described above. For that reason, the Board of Directors has
approved and recommends that the shareholders approve the Restructuring.
The Board of Directors further notes that numerous national and international
corporations conduct their operations through holding company structures.
Federal Tax Consequences Of The Restructuring
Any assets transferred pursuant to the Restructuring will be conveyed to
the Subsidiaries on a tax-free basis pursuant to Section 351 of the Internal
Revenue Code. The Subsidiaries will be directly or indirectly wholly-owned by
the Company. Although the Company has no plans to change the ownership
of the Subsidiaries, it is possible that one or more of the Subsidiaries may
not be wholly-owned in the future.
Rights Of Dissenting Shareholders
Approval or consummation of the Restructuring will not entitle a
shareholder objecting to its terms or voting against the Restructuring to any
appraisal or similar rights under Delaware law.
Vote Required
The affirmative vote of the holders of a majority of the shares of common
stock outstanding and entitled to vote at the meeting is required to approve
the Restructuring. Shares not voted (whether by abstention, broker nonvote,
or otherwise) have the same effect as a vote against the proposal. The Board
of Directors recommends that the shareholders vote FOR approval of the
Restructuring.
APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed the firm of Ernst &
Young LLP to audit the accounts of the Company for the 19961997 fiscal year.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting of Shareholders with the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.
Approval of the appointment of auditors is not a matter which is required
to be submitted to a vote of shareholders, but the Board of Directors
considers it appropriate for the shareholders to express or withhold their
approval of the appointment. If shareholder approval should be withheld, the
Board would consider an alternative appointment for the succeeding fiscal
year. The Board recommends that the shareholders vote FOR approval of the
appointment of Ernst & Young LLP. The affirmative vote of a majority of the
shares present at the meeting in person and by proxy is required for approval.
SHAREHOLDER PROPOSALS FOR 19971998 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 19971998 Annual
Meeting of Shareholders must be received in writing by the Company at its
corporate office no later than August 5, 1996.1997. The Company's corporate office
is located at 2211 Northeast Loop 410, P. O. Box 33069, San Antonio, Texas
78265-3069.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. The
transfer agent and registrar for the Company's common stock, American
Stock Transfer & Trust Company, as part of its regular services and for
no additional compensation other than reimbursement for out-of-pocket
expenses, has been engaged toTo assist
in the proxy solicitation.solicitation, the Company has engaged W.F. Doring & Co. for a fee
of $3,000 plus reimbursement of out-of-pocket expenses. Proxies may be
solicited through the mail and through telephonic or telegraphic
communications to, or by meetings with, shareholders or their representatives
by directors, officers, and other employees of the Company who will receive no
additional compensation therefor.
The Company requests persons such as brokers, nominees, and fiduciaries
holding stock in their names for others, or holding stock for others who have
the right to give voting instructions, to forward proxy material to their
principals and to request authority for the execution of the proxy, and the
Company reimburses such persons for their reasonable expenses.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is
expected to come before the meeting, but should any other matters requiring a
vote of shareholders arise, including a question of adjourning the meeting,
the persons named in the accompanying proxy will vote thereon according to
their best judgment in the interest of the Company.
LUBY'S CAFETERIAS, INC.
JAMES R. HALE
_________________________
James R. Hale
Secretary
Dated: December 1, 19952, 1996
LUBY'SPROXY
Luby's CAFETERIAS, INC.
c/o American Stock Transfer & Trust Company
40 Wall Street, New York, New York 10005
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Ralph Erben, John B. Lahourcade, and George H.
Wenglein,John E.
Curtis, Jr., and each of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated below, all the shares of Common Stock of Luby's Cafeterias, Inc.
held on record by the undersigned on November 15, 1995,1996, at the Annual Meeting
of Shareholders to be held on January 12, 1996,14, 1997, or any adjournment thereof.
Election of Directors,Please mark your votes as in this example.
Nominees: David B. Daviss, Roger R. Hemminghaus, WilliamJohn E. RobsonCurtis, Jr., Ralph Erben, Walter J. Salmon, Joanne Winik
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted for proposals 1, 2, and 2. Please mark, sign, date, and return the proxy
card promptly, using the enclosed envelope.
[X]3.
[x] Please mark your votes as in this example.
1. Election of Directors
[ ] FOR [ ] WITHHELD
For, except vote withheld from the following nominee(s):
_______________________________________________________________________________________
2. Proposal to authorize restructuring of the Company into a holding company.
[ ] FOR [ ] WITHHELD [ ] ABSTAIN
3. Proposal to approve the appointment of Ernst & Young LLP as the
independent public accountants of the corporation.
[ ] FOR [ ] AGAINSTWITHHELD [ ] ABSTAIN
3.4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
SIGNATURE(S)_________________________________________DATE_________________
SIGNATURE(S)_________________________________________DATE_________________
NOTE:PLEASE MARK, SIGN, DATE, AND RETURN THE
PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.
SIGNATURE __________________________________ DATE __________________
SIGNATURE __________________________________ DATE __________________
IF HELD JOINTLY
Note: Please sign exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership
name by authorized person.