SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
(xx) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
(xx) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Ryan's Family Steak Houses, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
(xx) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
( ) Filing Fee of $ was previously paid on , 199 ,
the date the Preliminary Proxy Statement was filed.
RYAN'S FAMILY STEAK HOUSES, INC.
405 LANCASTER AVENUE
POST OFFICE BOX 100
GREER, SOUTH CAROLINA 29652
March 25, 1994
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of Shareholders of
Ryan's Family Steak Houses, Inc. to be held on Thursday, April 28, 1994 at 11:00
a.m. at the Hyatt Regency in Greenville, South Carolina.
The official Notice of Annual Meeting, Proxy Statement and Form of Proxy
are enclosed with this letter. The Notice of the Annual Meeting and Proxy
Statement describe the formal business to be transacted at the Annual Meeting.
The vote of every shareholder is important, and to ensure proper
representation of your shares at the meeting, please sign, date and return the
enclosed proxy card as soon as possible, even if you currently plan to attend
the Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote will be counted if you are unable to attend.
Sincerely,
(Signature of Janet J. Gleitz)
Janet J. Gleitz
SECRETARY
RYAN'S FAMILY STEAK HOUSES, INC.
405 LANCASTER AVENUE
POST OFFICE BOX 100
GREER, SOUTH CAROLINA 29652
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 28, 1994
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Ryan's Family Steak Houses, Inc. (the
Company) will be held at the Hyatt Regency, Greenville, South Carolina, on
Thursday, April 28, 1994 at 11:00 a.m. for the following purposes:
(1) To elect seven (7) Directors to hold office until the next annual
meeting of shareholders or until their successors have been duly
elected and qualified;
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on March 2, 1994 as
the record date for the determination of the shareholders entitled to notice of
and to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
(Signature of Janet J. Gleitz)
Janet J. Gleitz
SECRETARY
March 25, 1994
Greer, South Carolina
A FORM OF PROXY IS ENCLOSED. TO ENSURE THAT YOUR SHARES WILL BE VOTED AT
THE ANNUAL MEETING, YOU ARE REQUESTED TO COMPLETE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE-PAID, ADDRESSED ENVELOPE. NO
ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN THE EVENT YOU ATTEND THE MEETING.
RYAN'S FAMILY STEAK HOUSES, INC.
405 Lancaster Avenue
Post Office Box 100
Greer, South Carolina 29652
(803) 879-1000
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the Board) of Ryan's Family Steak Houses,
Inc. (the Company), to be voted at the Annual Meeting of Shareholders of the
Company (the Annual Meeting) to be held at 11:00 a.m. on Thursday, April 28,
1994, at the Hyatt Regency, Greenville, South Carolina. The approximate mailing
date of this Proxy Statement is March 25, 1994.
Shareholders of record at the close of business on March 2, 1994 are
entitled to notice of and to vote at the Annual Meeting. As of such date, a
total of 53,416,405 shares of common stock, $1 par value, of the Company (the
Common Stock) were outstanding. Holders of Common Stock are entitled to one vote
for each share held of record on March 2, 1994 upon all matters presented at the
Annual Meeting.
A shareholder giving a proxy may revoke it at any time before it is
exercised by written notice dated later than the date of the proxy. A
shareholder may revoke a proxy by: (i) delivery to the Secretary of the Company,
at or before the Annual Meeting, of an instrument revoking the proxy bearing a
date later than the proxy; (ii) delivery to the Secretary of the Company, at or
before the Annual Meeting, of a duly executed proxy bearing a later date; or
(iii) attending the Annual Meeting and giving notice of revocation to the
Secretary of the Company or expressing to the Secretary of the Company, before
his or her shares are voted, a desire to vote his or her shares in person in a
manner contrary to that set forth in his or her previous proxy, if any (although
attendance at the Annual Meeting will not in and of itself constitute a
revocation of a proxy). Any instrument revoking a proxy should be delivered to
the Secretary of the Company at the Annual Meeting or sent prior to the Annual
Meeting to Ryan's Family Steak Houses, Inc., 405 Lancaster Avenue, Greer, South
Carolina 29650 or P.O. Box 100, Greer, South Carolina 29652, Attn: Janet J.
Gleitz.
Unless revoked, such proxy will be voted in accordance with the
specifications thereon. If no contrary instructions are given, all shares
represented by a proxy will be voted FOR the proposal to elect as Directors the
nominees named in this Proxy Statement, and in accordance with the best judgment
of the proxy holders on any other matter that may properly come before the
Annual Meeting. An automated system administered by the Company's transfer agent
tabulates the votes. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting. Each is tabulated
separately. In connection with the election of directors, abstentions and broker
non-votes are not counted for purposes of determining the votes cast for
directors.
The presence, either in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock at March 2, 1994 is necessary to
constitute a quorum at the Annual Meeting. Directors will be elected by a
plurality of votes cast at the Annual Meeting.
ELECTION OF DIRECTORS
(ITEM #1 ON THE PROXY)
The following seven persons are nominees for election at the Annual Meeting
as Directors to serve until the next annual meeting of the Company or until
their successors are duly elected and qualified: Charles D. Way, James D.
Cockman, Brian S. MacKenzie, G. Edwin McCranie, Barry L. Edwards, Harold K.
Roberts, Jr. and James M. Shoemaker, Jr. Unless authority to vote for the
election of Directors is withheld, it is the intention of the persons named in
the enclosed proxy to nominate and vote for such nominees.
Management believes that all of the nominees will be available and able to
serve as Directors, but in the event any nominee is not available or able to
serve, the Common Stock represented by the proxies will be voted for such
substitute as shall be designated by the Board of Directors.
1
The following table sets forth the name, age, principal occupation, years
of service as a Director, and Common Stock beneficially owned as of March 2,
1994 of or by each nominee for Director.
SHARES
THAT
CAN BE
ACQUIRED
OUTSTANDING WITHIN 60 TOTAL OF
SHARES DAYS UPON SHARES
PRINCIPAL DIRECTOR BENEFICIALLY EXERCISE BENEFICIALLY
NAME AGE OCCUPATION SINCE OWNED OF OPTIONS OWNED
Charles D. Way 40 Chairman of the Board, 1981 332,856(7) 285,000 617,856
(3, 4) President and Chief
Executive Officer
G. Edwin McCranie 45 Executive Vice 1991 1,000 71,000 72,000
(4) PresidentPurchasing
Barry L. Edwards 46 Vice-President and 1982 38,588(8) 25,000 63,588
(1, 2, 3, 5) Treasurer, The Liberty
Corporation
Harold K. Roberts, 43 Partner in the firm of 1988 8,845 25,000 33,845
Jr. (2, 3, 4) Roberts and Morgan,
CPAs; Chairman,
Statewide Title, Inc.
James M. Shoemaker, 61 Member, Wyche, Burgess, Freeman 1982 41,325(9) 25,000 66,325
Jr. (1, 2, 5) & Parham, P.A.
Brian S. MacKenzie 42 President, Builder Marts 1993 1,000 5,000 6,000
(1, 4, 5) of America, Inc.
James D. Cockman 61 Chairman and Chief 1993 1,000 0 1,000
(4) Executive Officer,
Ocean Fresh Express
International Seafood
PERCENT
OF TOTAL
NAME OUTSTANDING (6)
Charles D. Way 1.2%
(3, 4)
G. Edwin McCranie (10)
(4)
Barry L. Edwards (10)
(1, 2, 3, 5)
Harold K. Roberts, (10)
Jr. (2, 3, 4)
James M. Shoemaker, (10)
Jr. (1, 2, 5)
Brian S. MacKenzie (10)
(1, 4, 5)
James D. Cockman (10)
(4)
(1) Member of the Compensation Committee. The Compensation Committee met three
times during fiscal 1993 for the purpose of reviewing and submitting to the
Board recommendations respecting the salary, bonus and other non-stock
compensation to be provided to the Company's executive officers.
(2) Member of the Audit Committee. The Audit Committee met with representatives
of the Company's independent auditors once during fiscal 1993 for the
purpose of reviewing the scope and results of such firm's audit.
(3) Member of the Nominating Committee. The Nominating Committee met once
during fiscal 1993 for the purpose of recommending members of the Board.
The Company's Nominating Committee will consider nominees to the Board
recommended by shareholders of the Company for the 1995 Annual Meeting of
Shareholders. See Proposals of Shareholders.
(4) Member of the Long Range Planning Committee. The Committee met twice during
fiscal 1993 for the purpose of providing long-term direction for the
Company.
(5) Member of Stock Option Committee. The Stock Option Committee met once
during fiscal 1993 for the purpose of considering option grants under the
Company's 1991 Stock Option Plan to the Company's executive officers and
key employees.
(6) Pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the Exchange Act), percentages of total outstanding
shares have been computed on the assumption that shares that can be
acquired within 60 days upon the exercise of options by a given person or
group are outstanding, but no other such shares similarly subject to
acquisition by other persons are outstanding.
(7) The figure shown includes 29,380 shares owned by Mr. Way's wife and an
aggregate of 6,000 shares owned by Mr. Way's wife as custodian for Mr.
Way's sons. Mr. Way may be deemed to share voting and investment power with
respect to such shares.
(8) The figure shown includes 3,282 shares held in an individual retirement
account for the benefit of Mr. Edwards and an aggregate of 4,460 shares
held by Mr. Edwards' sons, as to which shares Mr. Edwards may be deemed to
share voting and investment power.
(9) The figure shown includes 2,000 shares owned by Mr. Shoemaker's wife and
6,000 shares in a trust, of which Mr. Shoemaker is a co-trustee, for the
benefit of Mr. Shoemaker's three adult children. Mr. Shoemaker may be
deemed to share voting and investment power with respect to such shares.
(10) Less than one-half of one percent.
2
The Board met four times during fiscal 1993. All Directors attended
personally or by telephone all meetings of the Board and committees on which
they served.
BUSINESS EXPERIENCE OF NOMINEES FOR DIRECTOR
CHARLES D. WAY became Chairman of the Board of the Company on October 29,
1992. Mr. Way assumed the position of President and Chief Executive Officer of
the Company in October 1989. From June 1988 to October 1989, he served as
President. From May 1986 to June 1988, he served as Executive Vice President,
Treasurer and Secretary. From January 1981 through April 1986 he served as Vice
President-Finance, Treasurer and Secretary. Mr. Way joined the Company in June
1979 as Controller. Mr. Way is also a director of World Acceptance Corporation.
G. EDWIN MCCRANIE joined the Company in 1986 as a Director of Purchasing.
Mr. McCranie assumed his present position as Executive Vice President-Purchasing
of the Company in November 1991. From January 1989 to October 1991, he served as
Vice President-Purchasing. From 1986 until 1989, he served as Director of
Purchasing of the Company.
BARRY L. EDWARDS has served as Vice President and Treasurer of The Liberty
Corporation since 1979. The Liberty Corporation is a holding company whose
subsidiaries are active in insurance, broadcasting and real estate.
HAROLD K. ROBERTS has been a partner in the firm of Roberts and Morgan,
Certified Public Accountants, Salisbury, North Carolina since 1983, as well as
Chairman of Statewide Title, Inc., a real estate title insurance agency, since
1987. From 1972 to 1982, Mr. Roberts served as Controller and Assistant
Treasurer of Food Lion, Inc.
JAMES M. SHOEMAKER has been a member of Wyche, Burgess, Freeman & Parham,
P.A., the law firm which is general counsel to the Company, since 1965. Mr.
Shoemaker is a director of Palmetto Bancshares, Inc., One Price Clothing Stores,
Inc., and Span-America Medical Systems, Inc.
BRIAN S. MACKENZIE has served as President and Chief Executive Officer of
Builder Marts of America, Inc. (BMA) since November 1993. From April 1991 to
July 1991 he served as its Chief Operating Officer. From July 1990 to April
1991, Mr. MacKenzie served as President of the Building Materials Retail
Division of BMA. BMA is a wholesale distributor of building materials and
supplies. From January 1990 to June 1990, Mr. MacKenzie served as Senior Vice
President of Franchise Retailing of Coast To Coast Stores, Inc. (Coast To
Coast), a hardware distributor, and served as Senior Vice President of Marketing
and Merchandising of Coast To Coast from 1987 through January of 1990. Coast To
Coast was acquired by Amdura, Inc. as a wholly-owned subsidiary in December
1988. In April 1990, Amdura, Inc., and its subsidiaries, including Coast To
Coast, filed under Chapter 11 of the Federal Bankruptcy Laws. Coast To Coast was
sold to a third party three months after the Chapter 11 filing, following which
Mr. MacKenzie joined BMA.
JAMES D. COCKMAN has served as Chairman and Chief Executive Officer of
Ocean Fresh Express International Seafood, which is engaged in the business of
distributing and processing seafood, since September 1992. From 1989 until 1992,
he served as Chairman of the Sara Lee Food Service division of Sara Lee Corp.,
which engaged in the business of processing and distributing food products and
from 1985 to 1989, he served as Chairman of the Board and Chief Executive
Officer of PYA Monarch, Inc., also a division of Sara Lee Corp. Mr. Cockman also
serves as a director of Dollar General Stores and Clayton Homes, Inc.
COMPENSATION OF DIRECTORS
During 1993, Directors who are not officers of the Company were paid an
annual retainer of $7,000, plus $500 per meeting of the Board, and $250 for
attendance at committee meetings. Pursuant to this arrangement, Messrs. Cockman,
Edwards, MacKenzie, Roberts and Shoemaker were paid $4,250, $10,350, $9,400 and
$9,750, and $10,600, respectively, during fiscal 1993. Effective in 1994, the
annual retainer component of non-officer directors' compensation was increased
to $9,000. Directors who were also officers of the Company were paid $100 per
meeting in 1993.
In addition, each Director who is not an officer of the Company receives
options for 5,000 shares of Common Stock each year. Pursuant to such
arrangement, on January 29, 1993, options were granted with respect to 5,000
shares of Common Stock to each of Messrs. Edwards, Roberts and Shoemaker. Such
options had an exercise price of $10.375 per share (the per share market value
on the date of grant) and became exercisable on July 29, 1993. Such options
expire on January 29, 2003.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1993, Messrs. Edwards, MacKenzie and Shoemaker, each a
non-employee Director, served on the Company's Compensation Committee of the
Board. Mr. Shoemaker is a member of the law firm of Wyche, Burgess, Freeman &
3
Parham, P.A., which serves as general counsel to the Company. In addition,
during fiscal 1993, Messrs. Shoemaker, Edwards and MacKenzie, each a
non-employee Director, served on the Stock Option Committee of the Board.
CERTAIN BENEFICIAL OWNERS OF COMMON STOCK
To the extent known to the Company, other than Trimark Investment
Management Inc. (TIM), which owned 3,635,000 shares of Common Stock (6.8% of the
Company's total outstanding Common Stock), as of December 29, 1993 (according to
information provided by TIM), there is no person or group that beneficially owns
5% or more of the outstanding shares of Common Stock of the Company as of March
2, 1994. According to the Schedule 13-G filed by TIM, each of Trimark Fund and
Trimark Select Growth Fund (the Funds) are record owners of a portion of the
3,635,000 shares of Common Stock. TIM is the manager of the assets of the Funds
and sole trustee of the Funds and, as such, has sole voting power and sole
dispositive power with respect to such shares of Common Stock, and consequently
may be deemed to be the beneficial owner of such shares of Common Stock. The
address of Trimark Investment Management Inc. is One First Canadian Place, Suite
5600, Toronto, Ontario, Canada, M5X 1E5.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who own more than ten percent of
the Common Stock, to file with the Securities and Exchange Commission initial
reports of beneficial ownership and reports of changes in beneficial ownership
of Common Stock. Executive officers, Directors and greater than ten-percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. To the Company's knowledge, based solely
on review of the copies of such reports furnished to the Company and written
representations that no other reports were required for the fiscal year ended
December 29, 1993, all Section 16(a) filings required of its executive officers
or Directors for fiscal 1993 were made on a timely basis.
EXECUTIVE OFFICERS
The following table sets forth the name, age, principal occupation, years
of service as an officer and Common Stock beneficially owned as of March 2, 1994
of or by each executive officer of the Company, and all executive officers and
Directors as a group.
SHARES
THAT
CAN BE
ACQUIRED
OUTSTANDING WITHIN 60 TOTAL OF
COMPANY SHARES DAYS UPON SHARES
COMPANY OFFICES OFFICER BENEFICIALLY EXERCISE BENEFICIALLY
NAME AGE CURRENTLY HELD SINCE OWNED OF OPTIONS OWNED
Charles D. Way 40 Chairman of the Board, 1981 332,856(2) 285,000 617,856
President and Chief
Executive Officer
G. Edwin McCranie 45 Executive Vice 1989 1,000 71,000 72,000
President-
Purchasing and Director
John C. Jamison 35 Vice President-Real 1988 0 104,000 104,000
Estate
James R. Hart 46 Vice President-Human 1988 0 31,000 31,000
Resources
Fred T. Grant, Jr. 38 Vice President-Finance 1990 0 30,000 30,000
Morgan A. Graham 58 Vice President- 1991 585 30,000 30,585
Construction
Alan E. Shaw 35 Vice President- 1990 167 54,500 54,667
Operations
Janet J. Gleitz 51 Secretary 1988 0 11,000 11,000
All executive officers and 425,366 696,500 1,121,866
directors as a group (13
persons)
PERCENT
OF TOTAL
NAME OUTSTANDING (1)
Charles D. Way 1.2%
G. Edwin McCranie .1%
John C. Jamison .2%
James R. Hart .1%
Fred T. Grant, Jr. .1%
Morgan A. Graham .1%
Alan E. Shaw .1%
Janet J. Gleitz (3)
All executive officers and 2.1%
directors as a group (13
persons)
(1) Pursuant to Rule 13d-3 under the Exchange Act, percentages of total
outstanding shares have been computed on the assumption that shares that can
be acquired within 60 days upon the exercise of options by a given person
are outstanding, but no other such shares similarly subject to acquisition
by other persons are outstanding.
(2) The figure shown includes 29,380 shares owned by Mr. Way's wife and an
aggregate of 6,000 shares owned by Mr. Way's wife as custodian for Mr. Way's
sons. Mr. Way may be deemed to share voting and investment power with
respect to such shares.
4
(3) Less than .1% of the outstanding shares of stock as of March 2, 1994.
BACKGROUND OF EXECUTIVE OFFICERS
Below is a summary of the background of the Company's executive officers
who are not also Directors of the Company.
Mr. John C. Jamison joined the Company in 1980 and served as a manager
trainee and store manager until February 1983. Since that time he served as
Assistant Director of Development and Director of Development until January 1988
when he assumed the position of Vice President -- Development. In May 1991 he
assumed his present position as Vice President -- Real Estate.
Mr. Morgan A. Graham has been Vice President -- Construction since November
1991. After joining the Company in July 1987 as a Construction Superintendent,
he served in several construction-related positions, including Project Manager,
Architectural Coordinator, Procurement Manager and Director of Construction,
until assuming his present position.
Mr. James R. Hart joined the Company in 1979 and served as a store manager
until September 1983. Since that time he served as Director of Human Resources
until April 1988 when he became Vice President -- Human Resources.
Mr. Fred T. Grant joined the Company in January 1990 as Director of
Finance. He served in that position until April 1990 when he became Vice
President -- Finance. Prior to joining the Company, Mr. Grant had been a Senior
Manager with the Greenville, South Carolina office of KPMG Peat Marwick, an
international accounting and consulting firm, since 1985.
Mr. Alan E. Shaw joined the Company in 1979 and served as a store manager
until being promoted to Supervisor in 1982. From 1984 through 1989, he served as
Assistant Director of Operations and Regional Director of Operations prior to
his promotion to Regional Vice President -- Operations in January 1990. In
November 1991, Mr. Shaw assumed his present position as Vice
President -- Operations.
Ms. Janet J. Gleitz joined the Company in 1981 and served as Corporate
Relations Administrator until June 1988 when she assumed her present position of
Secretary.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years 1993, 1992 and 1991, the
cash compensation paid by the Company and its subsidiaries, as well as certain
other compensation paid or accrued for those years, to the two executive
officers of the Company whose salary and bonus in fiscal 1993 exceeded $100,000
(the Named Executive Officers):
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
FISCAL SALARY UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) BONUS ($) OPTIONS COMPENSATION ($)(1)
Charles D. Way, 1993 $184,474 0 30,000 $57,798
Chairman of the 1992 $162,895 0 30,000 $26,088
Board, President 1991 $150,268 0 30,000 --
and Chief Executive Officer
Alan E. Shaw, 1993 $ 90,172 $29,063 10,000 $31,430
Vice President 1992 $ 81,383 $35,625 10,000 $ 6,501
Operations 1991 $ 73,204 $20,063 10,000 --
(1) All Other Compensation for 1993 includes the following: (i) contributions of
$2,755 and $1,758 to the Company's 401(k) Plan (the Plan) on behalf of Mr.
Way and Mr. Shaw, respectively, to match 1993 pre-tax elective deferral
contributions (included under Salary) made by each to such Plan; (ii)
premium payments of $5,033 on behalf of each of Mr. Way and Mr. Shaw for a
policy of health insurance providing a level of coverage not otherwise
available under the Company's standard health plan; (iii) premium payments
of $102 and $54 on behalf of Messrs. Way and Shaw, respectively, for an
additional $50,000 in life insurance above the coverage available to
salaried employees generally; (iv) a premium payment of $2,428 for
disability insurance coverage for Mr. Way; (v) an accrual of $19,163
pursuant to the Deferred Compensation -- Salary Continuation Agreement
between the Company and Mr. Way; and (vi) the Company's
5
estimate of the imputed benefit to Messrs. Way and Shaw of $28,317 and
$24,585, respectively, of split-dollar life insurance coverage (including
the value of the term insurance portion) purchased by the Company on each
officer's life in the policy amounts of $1,005,000 and $910,000,
respectively. Under the Company's insurance plan, the Company pays premiums
on such policies on the life of participating executive officers for a
period of ten years. The Company owns the policy for the first five years of
the policy. After the fifth year, the Company transfers ownership of the
policy to the participating executive. The Company is repaid the aggregate
amount of the premiums, without interest, at the earlier of the executive's
dying, reaching age 60 or the termination of the policy. All Other
Compensation includes only amounts earned for fiscal years 1992 and 1993.
SUMMARY OF OPTION GRANTS AND HOLDINGS
The following table illustrates the value of the stock options granted to
the Named Executive Officers during fiscal 1993:
OPTION GRANTS IN 1993 FISCAL YEAR
INDIVIDUAL GRANTS
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES
OPTIONS IN 1993 EXERCISE
GRANTED FISCAL PRICE EXPIRATION GRANT DATE
NAME (POUND) YEAR ($/SH) DATE (1) PRESENT VALUE (2)
Charles D. Way 30,000 6.4% $10.3125 1/28/03 $ 150,700
Alan E. Shaw 10,000 2.1% 10.3125 1/28/03 $ 50,200
(1) These options became exercisable in full on July 28, 1993.
(2) The dollar amounts under this column are the result of calculations using
the Black-Scholes based option valuation model. The valuation assumes an
expected volatility of .3019, a 0% dividend yield, a 7 1/2-year exercise
term, a risk free rate of 6 1/2% reflecting the yield on a zero coupon U.S.
Treasury security for the term of the option, and a grant price and exercise
price equal to $10.3125. No adjustments have been made for
non-transferability or risk of forfeiture. The actual value of the options,
if any, will depend on the extent to which the market value of the Common
Stock exceeds the price of the option on the date of exercise.
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during the last fiscal
year, and unexercised options held as of the end of the fiscal year and the
value of such options:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS AT IN-THE-MONEY
1993 FISCAL OPTIONS
SHARES YEAR-END AT FISCAL
ACQUIRED ON (POUND) YEAR-END $ (1)
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (POUND) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
Charles D. Way 0 n/a 285,000/ -- $ 558,750/ --
Alan E. Shaw 7,500 $ 49,688 54,500/ -- $ 79,938/ --
(1) The value of unexercised in-the-money options is calculated for each officer
as follows: market price of the Common Stock as of December 29, 1993 times
the number of shares covered by such in-the-money options held by such
officer minus the product of the exercise price with respect to such options
and the number of shares covered by such options.
DEFERRED COMPENSATION -- SALARY CONTINUATION AGREEMENTS
In April 1987, the Board of Directors approved a Deferred
Compensation -- Salary Continuation Agreement between the Company and Mr.
Charles Way. The agreement with Mr. Way provides for cash payments of $60,000
per year for each of the 10 years following Mr. Way's retirement, death or total
disability, with retirement age set at 55, such benefits to vest 10%
6
per annum commencing in 1987. The total deferred compensation liability as of
December 29, 1993 relating to this agreement was $85,433. An aggregate of
$19,163 of deferred compensation was accrued under this agreement for the
benefit of Mr. Way during fiscal 1993. The Company is the owner and beneficiary
of a life insurance policy on the life of Mr. Way. On the basis of reasonable
assumptions as to mortality, dividends and other factors, it is expected that
the cost of benefits under this arrangement will be recovered through a
combination of general corporate funds and the cash surrender value of the
insurance policy.
REPORT OF THE COMPENSATION COMMITTEE
AND STOCK OPTION COMMITTEE
The Compensation Committee (the Compensation Committee) of the Board of
Directors periodically submits to the Board recommendations respecting the
salary, bonus and other non-stock compensation to be provided to the Company's
executive officers. The Stock Option Committee (the Stock Option Committee) of
the Board grants options for the Company's Common Stock to the Company's
executive officers and employees. These Committees provide the following joint
report.
EXECUTIVE OFFICER COMPENSATION
The Committees attempt to act on the shareholders' behalf in establishing
executive compensation programs, for the Company's shareholders ultimately bear
the cost of these programs. The Company's executive compensation policies and
specific executive compensation programs are adopted and administered in
accordance with that belief. The Committees annually review the Company's
corporate performance and that of its executive officers to determine
appropriate compensation. The Committees seek to achieve a balance between the
Company's need to attract and retain qualified and motivated executives, on the
one hand, and the maximization of the Company's operating performance, on the
other.
The Committees' executive compensation philosophy is to provide for
compensation opportunities that reflect Company and individual performances. In
addition, the Committees attempt to ensure compensation fairness and consistency
in accordance with individual responsibility and performance, taking into
account industry peer group compensation programs, and to emphasize both short
and long-term Company performance by looking at measures such as earnings per
share, operating margins, return on equity, and increase in revenues. The
Company's current executive compensation structure consists of base salary and
stock options, with an incentive cash bonus arrangement.
Over the years, the Company has attempted to set executive officer cash
compensation amounts at levels somewhat lower than comparable peer group
industry norms, and has complemented these cash amounts with significant stock
option grants. The Compensation Committee does not use any formula to set
executive salary levels, but takes into account the qualitative factors
described above.
The stock option grants are generally made on an annual basis at the then
stock market price and have the purpose of providing the Company's executive
officers and key employees with an equity ownership opportunity in the Company
and with incentives to maximize shareholder values. In determining the size of
any stock option grant, the Stock Option Committee considers the Company's
performance, the individual's performance, the potential effect which the
individual's future performance may have on the Company, and the number of
options previously granted to the individual.
During 1992, the Company engaged an independent consultant to survey its
cash compensation and stock option grants to provide the Committees with a
comparison of the aggregate compensation paid by the Company with the
compensation paid by other companies in the Company's peer group. The peer group
selected for this purpose consisted of companies operating chain restaurants
which responded to the 1992 Chain Restaurant Compensation Association survey.
This group is different from the companies used for purposes of the performance
graph set forth below because detailed information regarding compensation was
readily available with respect to the companies which responded to the Chain
Restaurant Compensation Association survey. As a result of this survey, the cash
compensation of certain of the Company's executives was adjusted, taking into
account qualitative factors, so that the total compensation, including stock
option grants, received by the Company's executives would in most instances be
reasonably comparable to peer group compensation for the same or similar
positions. The Committee believes that, even after adjustment, the cash
compensation of its executive officers is somewhat lower than comparable peer
group industry norms.
During 1993, two executive officers were paid a cash bonus. Alan Shaw, Vice
President -- Operations, was paid a bonus based on four factors: (1) same-store
sales comparisons; (2) store profits compared to the immediately preceding year;
7
(3) customer service as reported through a hidden shopper program; and (4)
various other considerations, including management turnover, team work and
creativity. Morgan Graham, Vice President -- Construction, was paid a bonus
based upon qualitative factors associated with his department's performance in
completing scheduled construction projects.
During 1993, the Compensation Committee adopted an Executive Bonus Plan to
provide additional incentives to its executive officers, effective for the 1994
fiscal year. The bonus plan will cover seven of the Company's eight executive
officers. Alan Shaw already participates in the plan described above. Pursuant
to the plan, each year the Compensation Committee establishes a percentage of
each participating executive's annual base salary, ranging from 10%-30%, as a
target bonus amount. The executive is eligible to receive this bonus amount, or
a portion thereof, if the executive meets objectives set by the Compensation
Committee. In the case of all executive officers other than Charles Way and
Edwin McCranie, the receipt of 2/3 of the bonus is based upon the achievement of
Company objectives and the receipt of 1/3 of the bonus is based upon the
achievement of departmental and personal objectives. In the case of Messrs. Way
and McCranie, the receipt of their entire target bonus is based upon the
achievement of Company objectives.
Commencing in 1994, the Omnibus Budget Reconciliation Act of 1993 denies
publicly traded companies the ability to deduct for federal income tax purposes
certain compensation paid (including gains on exercised stock option grants) to
top executive officers in excess of $1 million per person. The Compensation
Committee and the Stock Option Committee intend in 1994 to determine the
Company's response to the new rules.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Way joined the Company in 1979, has served as its President and Chief
Executive Officer since 1989, and became Chairman of the Board in 1992. The
Compensation Committee believes that Mr. Way's cash compensation in recent years
has consistently been significantly below that of the average cash compensation
paid by peer group companies. This has been partly the result of his personal
desire to emphasize shareholder value instead of cash compensation in his
compensation package and partly the result of the policy described above of
emphasizing stock option grants rather than cash compensation. The Committees
believe that this approach to Mr. Way's compensation has resulted in an
appropriate alignment of his long-term rewards from the Company with the
interests of shareholders.
Mr. Way's cash compensation in fiscal 1993 increased 13% over his fiscal
1992 cash compensation. At fiscal 1993 year-end, the value of his outstanding
in-the-money stock options was $558,750 as compared to $1,065,000 at fiscal 1992
year-end. The Company's per share earnings decreased 3.6% from 1992 to 1993.
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
James M. Shoemaker, Jr., Chairman James M. Shoemaker, Jr., Chairman
Barry L. Edwards Barry L. Edwards
Brian S. MacKenzie Brian S. MacKenzie
8
PERFORMANCE GRAPH
A line graph comparing the cumulative, total shareholder return on the
Common Stock of the Company for the last five fiscal years with the cumulative
total return of the NASDAQ Market Index and a peer group consisting of all
publicly traded companies whose SIC code is 5812, the code for eating places,
over the same period (assuming a $100 initial investment) is presented below.
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
(Performance Graph appears here--see appendix)
AUDITORS
KPMG Peat Marwick, independent certified public accountants, have been
appointed as auditors for the Company for the current fiscal year and to examine
and report to shareholders upon the financial statements as of and for the year
ending December 28, 1994. Representatives of KPMG Peat Marwick will be present
at the Annual Meeting, and such representatives will have the opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions which the shareholders may have. KPMG Peat Marwick has
acted for the Company in this capacity since 1981, and neither the firm nor any
of its members has any relation with the Company except in the firm's capacity
as auditors and tax advisors.
SOLICITATION OF PROXIES
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by mail, proxies may be solicited by officers
and other regular employees of the Company by telephone, telegram or personal
interview for no additional compensation. The Company has engaged W. F. Doring &
Company to solicit proxies and distribute materials to brokerage houses, banks,
custodians, nominees and fiduciaries for an estimated fee of approximately
$10,000. Arrangements will be made with brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation material to beneficial owners
of the stock held of record by such persons, and the Company will reimburse such
persons for reasonable out-of-pocket expenses incurred by them in so doing.
9
PROPOSALS OF SHAREHOLDERS
Any shareholder who wishes to present a proposal at the 1995 Annual Meeting
of Shareholders of the Company and have such proposal included in the proxy
statement and form of proxy relating to that meeting must cause such proposal to
be received by the Company not later than November 16, 1994. Shareholders
desiring to make a recommendation to the Nominating Committee of the Board of
Directors should submit the name(s) and business background of the proposed
nominee(s) for the Board no later than November 16, 1994. Such proposal should
be sent to the Company, attention Janet J. Gleitz, Post Office Box 100, Greer,
South Carolina 29652. The proposal must comply with the rules of the Securities
and Exchange Commission relating to shareholder proposals.
FINANCIAL INFORMATION
THE COMPANY'S 1993 ANNUAL REPORT IS ENCLOSED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF RECORD AS OF MARCH 2, 1994, WHO SO
REQUESTS IN WRITING, A COPY OF SUCH FISCAL 1993 ANNUAL REPORT OR THE COMPANY'S
1993 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. ANY SUCH REQUEST SHOULD BE DIRECTED TO RYAN'S FAMILY STEAK
HOUSES, INC., 405 LANCASTER AVENUE, GREER, SOUTH CAROLINA 29650, OR POST OFFICE
BOX 100, GREER, SOUTH CAROLINA 29652, ATTENTION: JANET J. GLEITZ.
OTHER BUSINESS
As of the date of this Proxy Statement, management was not aware that any
business not described above would be presented for consideration at the
meeting. If any other business properly comes before the meeting, it is intended
that the shares represented by proxies will be voted with respect thereto in
accordance with the judgment of the person voting them.
By Order of the Board of Directors,
(Signature of Janet J. Gleitz)
Janet J. Gleitz
SECRETARY
Greer, South Carolina
March 25, 1994
10
P
R
O
X
Y
Please sign
on reverse side
and return in
the enclosed
postage-paid
envelope.
RYAN'S FAMILY STEAK HOUSES, INC.
P.O. Box 100, Greer, South Carolina 29652
The undersigned hereby appoints Charles D. Way and Janet J. Gleitz,
and each of them, as Proxies, each with the power to appoint his/her
substitute, and hereby authorizes them to represent and to vote, as
designated below, all the shares of Common Stock of Ryan's Family
Steak Houses, Inc. (the "Company") held of record by the undersigned
on March 2, 1994, at the annual meeting of shareholders to be held
on April 28, 1994 (the "Meeting"), or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
James D. Cockman, Barry L. Edwards, Brian S. MacKenzie, G. Edwin McCranie,
Harold K. Roberts, Jr., James M. Shoemaker, Jr., Charles D. Way
Instruction: To withhold authority to vote for any individual nominee(s)
write the name of the nominee(s) on the space provided below.)
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE
WITH INSTRUCTIONS CONTAINED HEREIN. IN THE ABSENCE OF SUCH INSTRUCTIONS,
THIS PROXY WILL BE VOTED "FOR" ALL OF THE FOREGOING PROPOSALS.
Date , 1994
Signature
Signature
Please sign this proxy exactly as
your name or names appear hereon. If
stock is held jointly, signatures
should appear for both names. When
signing as attorney, executor,
administrator, trustee, guardian or
agent, please indicate the capacity in
which you are acting. If stock is held
by a corporation, please sign in full
corporate name by authorized officer
and give title of officer.
******************************************************************************
APPENDIX
On The Shareholders Letter page the signature of Janet J. Gleitz appears
where indicated.
On the Notice of Annual Meeting of Shareholders page the signature of Janet
J. Gleitz appears where indicated.
On Page 9 the Performance Graph appears where indicated. The Plot Points
are as listed below:
FISCAL YEAR ENDING
COMPANY 1988 1989 1990 1991 1992 1993
RYANS FAMILY STEAK HOUSE 100 148.84 106.98 174.42 204.65 162.79
PEER GROUP 100 138.93 119.31 169.85 217.04 249.23
BROAD MARKET 100 112.89 91.57 117.56 118.71 142.40
On Page 10 the signature of Janet J. Gleitz appears where noted.