SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.1a-11(c) or 240.1a-12
LUBY'S CAFETERIAS, INC.
(Name of Registrant as Specified in its Charter)
LUBY'S CAFETERIAS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(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;*
4) Proposed maximum aggregate value of transaction:
*Set forth amount on which the filing is calculated and state how
it was determined.
[ ] Check box if any part of the filing fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify 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:<PAGE>
December 1, 1995
Dear Shareholders:
You are cordially invited to attend the 1996 Annual Meeting of Shareholders of
Luby's Cafeterias, Inc. to be held on Friday, January 12, 1996, 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. Lahourcade
Chairman of the Board
RALPH ERBEN
_____________________
Ralph Erben
President and
Chief Executive Officer
<PAGE>
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, 1996
To the Shareholders of
LUBY'S CAFETERIAS, INC.
NOTICE IS HEREBY GIVEN that the 1996 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,
January 12, 1996, at 10:00 a.m., local time, for the following purposes:
(1) To elect three directors to serve until the 1999 Annual Meeting of
Shareholders;
(2) To approve the appointment of auditors for the 1996 fiscal year; and
(3) 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. 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, 1995
<PAGE>
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
1996 Annual Meeting of Shareholders on January 12, 1996, or at any
adjournment thereof. This proxy statement and the accompanying proxy are
being mailed to shareholders on or about December 1, 1995.
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, will be entitled to vote at the meeting. There
were 23,334,503 shares of common stock outstanding on the record date,
exclusive of 4,068,564 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. 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.
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 1996
Annual Meeting of Shareholders who have been nominated by the Board of
Directors for reelection to serve until the 1999 Annual Meeting of
Shareholders and until their successors are duly elected and qualified are
David B. Daviss, Roger R. Hemminghaus, and William E. Robson. 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 seven 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 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 59 and has been a director of the Company since
1984 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 59 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 54 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, the Board of Directors held
six 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 is paid $1,200 for each meeting of the Audit
Committee which he attends.
Nonemployee Director Stock Options
On January 13, 1995, the shareholders of the Company approved the
Nonemployee Director Stock Option Plan (the Nonemployee Director Plan) under
which nonemployee directors are periodically granted nonqualified options to
purchase shares of the Company 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, for the following number
of option shares at an option price of $22.75 per share: Lauro F. Cavazos -
5,000 shares; David B. Daviss - 1,666 shares; Roger R. Hemminghaus - 1,666
shares; Walter J. Salmon - 3,333 shares; and Joanne Winik - 3,333 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 three times
during the 1995 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 four times during the 1995 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, 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 and Chief
Financial Officer of the Company and a member of the Board of Directors. For
the fiscal year ended August 31, 1995, architectural fees paid to Mr. Hesson's
firm by the Company amounted to approximately $889,000. 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, the Company paid such
firm approximately $439,000. In the opinion of the Company, such fees are
comparable to those charged by other law firms for similar services.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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, all Section 16(a) filing
requirements were satisfied.
PRINCIPAL SHAREHOLDERS
To the knowledge of the Company, no person owned beneficially as of
November 15, 1995, more than five percent of the outstanding common stock of
the Company.
<PAGE>
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:
Name of Individual or Shares Beneficially Owned Percent
Identity of Group as of November 15, 1995(1) of Class
Lauro F. Cavazos (2) 650 ---%
John E. Curtis, Jr. (3) 37,218 0.16%
David B. Daviss (4) 3,037 0.01%
Ralph Erben (5) 181,080 0.77%
Roger R. Hemminghaus 3,400 0.01%
John B. Lahourcade (6) 203,305 0.87%
William E. Robson (7) 37,446 0.16%
Walter J. Salmon (8) 2,255 0.01%
George H. Wenglein 750,000 3.21%
Joanne Winik 450 ---%
All directors and officers of
the Company, as a group (9) 1,944,077 8.24%
(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 26,150 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 42,350 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 36 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,
943 shares held for his benefit in the Company's Dividend Reinvestment
Plan, and 26,150 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
245,216 shares which they have the right to acquire within 60 days
under the Company's employee benefit plans.
<PAGE>
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, 1995, 1994,
and 1993:
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
_____________________________________________________ _______________________________
Other Securities All
Annual Under- Other
Compen- Restricted lying LTIP Compen-
Name and Fiscal sation Stock Options/ Payouts sation
Principal Position Year Salary Bonus(1) (2) Awards SARs(3) (4) (5)
__________________ ______ ______ ________ _______ __________ __________ _______ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ralph Erben 1995 $340,000 $ ---- $0 $0 4,500 $65,629 $32,027
President and 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. 1995 240,000 ---- 0 0 2,100 32,815 14,096
Executive Vice 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 1995 240,000 ---- 0 0 2,100 32,815 19,308
Executive Vice 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 1995 182,500 ---- 0 0 1,250 10,938 14,096
Vice President- 1994 180,000 33,750 0 0 1,250 ---- 2,380
Operations 1993 175,000 33,750 0 0 1,800 ---- 4,020
<FN>
(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 1995 under the Company s Performance Unit Plan relate to
the three-year performance cycle ended August 31, 1994. No amounts were paid out under
the Company's Performance Unit Plan in fiscal years 1993-1994.
(5) Includes contributions under the Profit Sharing Plan of $14,096, $2,380, and $4,020 per
Named Officer for 1995, 1994, and 1993, respectively. Remaining amounts for Messrs. Erben
and Robson are for amounts accrued under deferred compensation agreements.
</TABLE>
The following table reports the grant of stock options and stock
appreciation rights ("SARs") to the Named Officers during fiscal 1995.
Options were granted under the Company's Management Incentive Stock Plan. The
Company has not granted SARs to any of the Named Officers.
<PAGE>
<TABLE>
Option/SAR Grants in Last Fiscal Year
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term(3)
____________________________________________________________________ _________________________
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base Expira-
Options/SARs Employees in price tion
Granted(1) Fiscal Year(2) ($/sh) Date 5%($) 10%($)
____________________________________________________________________ _________________________
<S> <C> <C> <C> <C> <C> <C>
Ralph Erben 4,500 3.31% $23.75 10-9-2000 $36,348 $82,461
John B. Lahourcade ----- ----- ----- ----- ----- -----
John E. Curtis, Jr. 2,100 1.54% 23.75 10-9-2000 16,962 38,482
William E. Robson 2,100 1.54% 23.75 10-9-2000 16,962 38,482
Jimmy W. Woliver 1,250 .92% 23.75 10-9-2000 10,097 22,906
<FN>
(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 136,100 options granted to employees in fiscal 1995.
(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.
</TABLE>
The table below reports exercises of stock options and SARs by the Named
Officers during fiscal 1995 and the value of their unexercised stock options
and SARs as of August 31, 1995. 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.
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
<CAPTION>
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
__________________________________________________________________________________________
<S> <C> <C> <C> <C>
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
<FN>
(1) The value of unexercised options is based on a price of $19.875 per common share at
August 31, 1995.
</TABLE>
The following table reports performance units granted to the Named
Officers during fiscal 1995 under the Company's Performance Unit Plan and the
Company's Management Incentive Stock Plan:
<TABLE>
Long-Term Incentive Plans - Awards in Last Fiscal Year
<CAPTION>
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
___________________ _______________ _____________ __________ ________ _________
<S> <C> <C> <C> <C> <C>
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
</TABLE>
The performance units described in the above table were granted in
October 1994, for the three-year performance cycle ending August 31, 1997. 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; however, this assumption
should not be considered as a forecast of future stock prices.
DEFERRED COMPENSATION
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; William E. Robson, $24,200;
and Jimmy W. Woliver, $0.
On October 27, 1994, the Board of Directors adopted a Nonemployee
Director Deferred Compensation Plan, which became effective January 1, 1995.
Such 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.
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 1995 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, the incentive compensation targets for executive officers
ranged from 10% to 30% of base salary if targeted earnings per share were
attained, with maximums ranging from 15% to 45% of base salary. As a result
of the 6.9% increase in earnings per share for fiscal 1995 over fiscal 1994,
no cash incentive bonuses were paid to executive officers for fiscal 1995.
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
share 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, performance awards were granted to eligible executive
officers for the three-year performance cycle ending August 31, 1997. 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 paid in November 1995 for the
three-year performance cycle which ended August 31, 1995, amounting to
$372,067.
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.
Mr. Erben was granted an incentive stock option on October 10, 1994, for
4,500 shares under the incentive stock plan. The number of shares was
determined in accordance with the formula discussed above. During fiscal
1995, Mr. Erben exercised an option for 3,975 shares granted to him in 1988
under the Company's employee stock option plan.
On October 10, 1994, Mr. Erben was granted 4,400 performance units under
the Company's management incentive stock plan for the three-year performance
cycle ending August 31, 1997. 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,
having a payment value of $119,146.
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,
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 Restaurants 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, 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 RETURN
Years Ended August 31,
________________________________________________
1990 1991 1992 1993 1994 1995
Luby's Cafeterias, Inc. $100 97 87 144 135 118
Peer Group $100 134 136 170 150 127
S&P 500 $100 127 137 158 166 202
S&P Restaurants $100 121 153 195 202 256
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 1996
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 1997 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 1997
Annual Meeting of Shareholders must be received in writing by the Company
at its corporate office no later than August 5, 1996. 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 to assist in the proxy solicitation. 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, 1995
<PAGE>
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, 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, at the Annual Meeting
of Shareholders to be held on January 12, 1996, or any adjournment thereof.
Election of Directors, Nominees:
David B. Daviss, Roger R. Hemminghaus, William E. Robson
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 and 2. Please mark, sign, date, and return the proxy
card promptly, using the enclosed envelope.
[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 approve the appointment of Ernst & Young LLP as the
independent public accountants of the corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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 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.
