FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended August 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________________ to ______________________
Commission file number: 1-8308
LUBY'S CAFETERIAS, INC.
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 74-1335253
_________________________ ___________________________________
(State of Incorporation) (I.R.S. Employer Identification No.)
2211 Northeast Loop 410
Post Office Box 33069
San Antonio, Texas 78265-3069 Area Code 210 654-9000
_______________________________________ _______________________________
(Address of principal executive office) (Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange on
Title of Class which registered
______________ ______________________
Common Stock ($.32 par value) New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
____
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
___ ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the shares of Common Stock of the registrant
held by non-affiliates of the registrant as of November 15, 1996, was
approximately $476,448,000 (based upon the assumption that directors and
officers are the only affiliates).
As of November 15, 1996, there were 23,271,600 shares of the registrant's
Common Stock outstanding, exclusive of 4,131,467 treasury shares.
Portions of the following documents are incorporated by reference into the
designated parts of this Form 10-K: annual report to shareholders for the
fiscal year ended August 31, 1996 (in Part II) and proxy statement relating to
1997 annual meeting of shareholders (in Part III).
<PAGE>
Item 1. Business.
Luby's Cafeterias, Inc. (the "Company") operates 221 cafeterias under the
name "Luby's" located in suburban shopping areas in Arizona, Arkansas,
Florida, Kansas, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma,
Tennessee, and Texas. Of the 221 cafeterias operated by the Company, 128 are
at locations owned by the Company and 93 are on leased premises.
Luby's Cafeterias, Inc. was originally incorporated in Texas in 1959 and
was reincorporated in Delaware on December 31, 1991. The Company's executive
offices are at 2211 Northeast Loop 410, P. O. Box 33069, San Antonio, Texas
78265-3069.
Marketing
The Company's product strategy is to provide a wide variety of freshly-
prepared foods in an attractive and informal environment. The Company's
research has shown that its products appeal to a broad range of value-oriented
consumers with particular success among senior citizens, families with
children, shoppers, and business people looking for a quick, healthy meal at a
reasonable price.
Prior to 1991 the Company relied primarily on customers' word-of-mouth
recommendations and community relations activities to promote its business,
spending approximately .5% of sales annually on these efforts. In 1991 the
Company began developing a new marketing program. Based on favorable
results of radio and television advertising tests, the marketing budget
increased to approximately two percent of sales for fiscal 1996. The Company
intends to continue expending the majority of the marketing budget on
television and radio advertising, as well as supporting the increased
local marketing activities of the individual cafeterias.
Operations
The Company's operations combine the food quality and atmosphere of a
good restaurant with the simplicity and visual food selection of cafeteria
service. Food is prepared in small quantities throughout serving hours, and
frequent quality checks are made. Each cafeteria offers a broad and varied
menu and normally serves 12 to 14 entrees, 12 to 14 vegetable dishes, 22 to 25
salads, and 18 to 20 desserts.
The Company's cafeterias cater primarily to shoppers and office or store
personnel for lunch and to families for dinner. The Company's cafeterias are
open for lunch and dinner seven days a week. All of the cafeterias sell
take-out orders, and most of them have separate food to go entrances. Take-
out orders accounted for approximately ten percent of sales in fiscal 1996.
Each cafeteria is operated as a separate unit under the control of a
manager who has responsibility for day-to-day operations, including food
purchasing, menu planning, and personnel employment and supervision. Each
cafeteria manager is compensated on the basis of his or her cafeteria's
profits. Management believes that granting broad authority to its cafeteria
managers and compensating them on the basis of their performance are
significant factors in the profitability of its cafeterias. Of the 221
cafeteria managers employed by the Company, 166 have been with the Company for
more than ten years. Generally, an individual is employed for a period of
seven to ten years before he or she is considered qualified to become a
cafeteria manager.
Each cafeteria cooks or prepares substantially all of the food served,
including breads and pastries. The cafeterias prepare food from the same
recipes, with minor variations to suit local tastes, although menus are not
uniform in all of the Company's cafeterias on any particular day. Menus are
prepared to reflect local and seasonal food preferences and to take advantage
of any special food purchasing opportunities. Substantially all of the food
served by each cafeteria is purchased from local suppliers. None of the
cafeterias are dependent upon any one supplier, and the Company believes that
alternative sources of supply are readily available.
Quality control teams, each consisting of experienced cooks and a
supervisor, help to maintain uniform standards of food preparation. The teams
primarily assist in the training of new personnel during the opening of new
cafeterias. The teams also visit the cafeterias periodically and work with
the regular staffs to check adherence to the Company's recipes, train
personnel in new techniques, and evaluate procedures for possible use
throughout the Company.
The Company conducts a training program comprised of both on-the-job
training and classroom instruction in its training facilities in
San Antonio. The training program is approximately three months in duration.
Management personnel receive one week of classroom instruction and spend
the remaining time on practical training in operating cafeterias. In order to
draw management trainees from regional talent pools, the Company has set
up satellite training schools in several key cafeterias to make on-the-job
training more accessible on a local level.
As of August 31, 1996, the Company had approximately 11,680 employees,
consisting of 10,890 nonmanagement cafeteria personnel; 659 cafeteria
managers, associate managers, and assistant managers; and 131 executive,
administrative, and clerical personnel. Employee relations are considered to
be good, and the Company has never had a strike or work stoppage.
Expansion
During the fiscal year ended August 31, 1996, the Company relocated one
cafeteria in Port Arthur, Texas, closed one cafeteria in El Paso, Texas, and
opened 18 new cafeterias in Surprise, Arizona; Wichita, Kansas; Nashville,
Tennessee; and Arlington, Corpus Christi, Dallas, Fort Worth, Houston,
Kerrville, McKinney, San Antonio, and Tomball, Texas; for a net increase of
17 units for the fiscal year.
On September 16, 1996, the Company acquired from Triangle FoodService
Corporation (formerly Wyatt Cafeterias, Inc.) 20 cafeteria locations,
consisting of 12 owned sites and 8 leased locations. On October 2, 1996,
the Company opened 15 of those units as "Luby's" cafeterias, located in
Hot Springs, Arkansas; Joplin, Missouri; and Abilene, Dallas, Del Rio,
Houston, Irving, Jacinto City, Laredo, McAllen, Mesquite, and Rosenberg,
Texas. In addition, since August 31, 1996, the Company has relocated a
cafeteria in Longview, Texas, and opened two new cafeterias in College Station
and San Antonio, Texas.
Ten new cafeterias are under construction in Peoria and Phoenix,
Arizona; Little Rock, Arkansas; St. Petersburg, Florida; Albuquerque, New
Mexico; Memphis, Tennessee; and Mesquite and San Antonio, Texas. During
fiscal 1997, the Company expects to open in excess of 30 new cafeterias,
including the reopened units acquired from Triangle FoodService Corporation.
The Company continually evaluates prospective new cafeteria sites and
typically has several sites for new cafeterias under active consideration at
any given time. The rate at which new cafeterias are opened is governed by
the Company's policy of controlled growth, which takes into account the
resources and capabilities of all departments involved, including real estate,
construction, equipment, and operations. It has been the Company's experience
that new cafeterias generally become profitable within three months after
opening.
The costs of opening new cafeterias vary widely, depending on whether the
facilities are to be leased or owned, and if owned, on site acquisition and
construction costs. The Company estimates that in recent years it has cost
$2,300,000 to $2,600,000 to construct, equip, and furnish a new cafeteria in a
freestanding building under normal conditions, including land acquisition
costs. The approximate cost to finish out, equip, and furnish a new cafeteria
in a leased facility has ranged from $1,200,000 to $1,400,000. A new building
prototype is now being utilized to reduce the initial investment in a typical
new location.
Waterstreet Joint Venture
In January 1996 the Company announced a joint venture agreement with
Waterstreet, Inc., a seafood restaurant company operating in Corpus Christi,
Fort Worth, and San Antonio, Texas. The Company plans to build three "Water
Street Seafood Company" restaurants during fiscal 1997. They will be leased
to the joint venture and operated by Waterstreet, Inc. One joint venture
restaurant was opened in San Antonio in August 1996.
Service Marks
The Company uses several service marks, including "Luby's" and believes
that such marks are of material importance to its business. The Company has
federal service mark registrations for several of such marks.
The Company is not the sole user of the name "Luby's" in the cafeteria
business. One cafeteria using the name "Luby's" and one cafeteria using the
name "Pat Luby's" are being operated in two different cities in Texas by two
different owners not affiliated with the Company. The Company's legal counsel
is of the opinion that the Company has the paramount right to use the name
"Luby's" as a service mark in the cafeteria business in the United States and
that such other users can be precluded from expanding their use of the name as
a service mark.
Competition and Other Factors
The food service business is highly competitive, and there are numerous
restaurants and other food service operations in each of the markets where the
Company operates. The quality of the food served, in relation to its price,
and public reputation are important factors in food service competition.
Neither the Company nor any of its competitors has a significant share of the
total market in any area in which the Company competes. The Company believes
that its principal competitors are conventional restaurants and other
cafeterias.
The Company's facilities and food products are subject to state and local
health and sanitation laws. In addition, the Company's operations are subject
to federal, state, and local regulations with respect to environmental and
safety matters, including regulations concerning air and water pollution and
regulations under the Americans with Disabilities Act and the Federal
Occupational Safety and Health Act. Such laws and regulations, in the
Company's opinion, have not materially affected its operations, although
compliance has resulted in some increased costs.
Item 2. Properties.
The Company owns the underlying land and buildings in which 128 of its
cafeterias are located. In addition, the Company owns several cafeteria sites
being held for future development.
Of the 221 cafeterias operated by the Company, 93 are at locations held
under leases, including 51 in regional shopping malls. Most of the leases
provide for a combination of fixed-dollar and percentage rentals. Most of the
leases require the lessee to pay additional amounts related to property taxes,
hazard insurance, and maintenance of common areas.
See Notes 4 and 7 of Notes to Financial Statements for information
concerning the Company's lease rental expenses, lease commitments, and
construction commitments. Of the 93 cafeteria leases, the current terms of 26
expire from 1997 to 2001, 25 from 2002 to 2006, and 42 thereafter.
Seventy-six of the leases can be extended beyond their current terms at the
Company's option.
A typical cafeteria seats 250 to 300 guests and contains 9,000 to 10,500
square feet of floor space. A new building prototype is now being utilized
for new store openings in the latter part of fiscal 1997 which contains
approximately 8,000 square feet and seats 220 guests. Most of the cafeterias
are located in modern buildings and all are in good condition. It is the
Company's policy to refurbish and modernize cafeterias as necessary to
maintain their appearance and utility. The equipment in all cafeterias is
well maintained. Several of the Company's cafeteria properties contain excess
building space which is rented to tenants unaffiliated with the Company.
<PAGE>
The 221 cafeterias operated by the Company are located as follows
(locations are in Texas except as otherwise indicated):
Number Number
Location of Units Location of Units
Abilene 2 Lubbock 1
Albuquerque, New Mexico 2 Lufkin 1
Amarillo 2 McAllen 3
Arlington 3 McKinney 1
Austin 6 Memphis, Tennessee 3
Bartlesville, Oklahoma 1 Mesa, Arizona 2
Baytown 1 Mesquite 2
Beaumont 1 Midland 1
Bedford 1 Mission, Kansas 1
Bellmead 1 Mission, Texas 1
Bossier City, Louisiana 1 Morristown, Tennessee 1
Broken Arrow, Oklahoma 1 Murfreesboro, Tennessee 1
Brownsville 2 Muskogee, Oklahoma 1
Bryan/College Station 2 Nashville, Tennessee 3
Carrollton 1 New Braunfels 1
Chandler, Arizona 1 North Little Rock, Arkansas 1
Clearwater, Florida 1 Oak Ridge, Tennessee 1
Conroe 1 Odessa 1
Corpus Christi 4 Okalahoma City, Oklahoma 3
Dallas 13 Pasadena 1
Deer Park 1 Pharr 1
Del Rio 1 Phoenix, Arizona 4
Denton 1 Pinellas Park, Florida 1
DeSoto 1 Plano 2
Duncanville 1 Port Arthur 2
El Paso 5 Richardson 1
Fayetteville, Arkansas 1 Rosenberg 1
Fort Smith, Arkansas 1 Round Rock 1
Fort Worth 9 San Angelo 1
Franklin, Tennessee 1 San Antonio 21
Galveston 1 San Marcos 1
Garland 1 Santa Fe, New Mexico 1
Glendale, Arizona 1 Scottsdale, Arizona 1
Grand Prairie 1 Sebring, Florida 1
Grapevine 1 Shawnee, Oklahoma 1
Harlingen 2 Sherman 1
Hattiesburg, Mississippi 1 Shreveport, Louisiana 1
Hot Springs, Arkansas 1 Stafford 1
Houston 31 Sugar Land 1
Humble 1 Surprise, Arizona 1
Independence, Missouri 1 Tampa, Florida 2
Irving/Las Colinas 2 Temple 1
Jacinto City 1 Texarkana 1
Joplin, Missouri 1 The Woodlands 1
Kansas City, Missouri 2 Tomball 1
Kerrville 1 Topeka, Kansas 1
Killeen 1 Tucson, Arizona 2
Kingwood 1 Tulsa, Oklahoma 2
Lake Jackson 1 Tyler 2
Laredo 2 Victoria 1
Las Cruces, New Mexico 1 Waco 1
Leavenworth, Kansas 1 Weslaco 1
Lewisville 1 Wichita, Kansas 2
Little Rock, Arkansas 1
Longview 1
The Company's corporate offices are located in a building owned by the
Company containing approximately 40,000 square feet of office space. The
Company utilizes the space for its executive offices and related facilities.
The Company maintains public liability insurance and property damage
insurance on its properties in amounts which management believes to be
adequate.
Item 3. Legal Proceedings.
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the Company is a
party, or of which any of its property is the subject. There are no material
legal proceedings to which any director, officer, or affiliate of the Company,
or any associate of any such director or officer, is a party, or has a
material interest, adverse to the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the fourth quarter of the fiscal year
ended August 31, 1996, to a vote of security holders of the Company.
Item 4A. Executive Officers of the Registrant.
Certain information is set forth below concerning the executive officers
of the Company, each of whom has been elected to serve until the 1997 annual
meeting of shareholders and until his successor is duly elected and qualified.
Served as
Officer Positions with Company and
Name Since Principal Occupation Last Five Years Age
________________________ ________ ____________________________________ ___
Ralph Erben 1978 Chairman of the Board (since Jan. 65
1996), Chief Executive Officer,
Chairman of the Executive
Committee, and Director; President
prior to Jan. 1996.
John E. Curtis, Jr. 1982 President, Chief Operating Officer 49
(since Jan. 1996), Chief Financial
Officer, member of the Executive
Committee, and Director; Senior
Vice President 1988-1995; Treasurer
1990-1995.
William E. Robson 1982 Executive Vice President-Operations 55
and Director (since 1993); Senior
Vice President-Operations 1992-1995;
Senior Vice President-Operations
Development prior to 1992.
Clyde C. Hays III 1985 Senior Vice President-Operations 45
(since Jan. 1996); Vice President-
Operations 1993-1995; Area Vice
President prior to 1993.
Jimmy W. Woliver 1984 Senior Vice President-Operations 59
(since Jan. 1996); Vice President-
Operations prior to 1996.
Ronald E. Riemenschneider 1990 Vice President and Treasurer (since 38
1995); Controller 1990-1995.
James R. Hale 1980 Secretary; Member of law firm of 67
Cauthorn Hale Hornberger Fuller
Sheehan & Becker Incorporated
since 1992; member of law firm of
Cox & Smith Incorporated prior
to 1992.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
Stock Prices and Dividends
The Company's common stock is traded on the New York Stock Exchange under
the symbol LUB. The following table sets forth, for the last two fiscal
years, the high and low sales prices on the New York Stock Exchange from the
consolidated transaction reporting system and the per share cash dividends
declared on the common stock.
Fiscal Quarters Quarterly
Ended High Low Cash Dividend
_________________ ______ ______ ______________
November 30, 1994 $24.63 $22.00 $.165
February 28, 1995 23.25 22.00 .165
May 31, 1995 22.88 18.50 .165
August 31, 1995 21.25 19.25 .18
November 30, 1995 22.88 19.88 .18
February 29, 1996 23.00 20.13 .18
May 31, 1996 25.25 20.38 .18
August 31, 1996 25.25 22.50 .20
As of September 13, 1996, there were approximately 4,142 record holders of
the Company's common stock.
Item 6. Selected Financial Data.
<TABLE>
Five Year Summary of Operations
(Thousands of dollars except per share data)
Years ended August 31,
<CAPTION>
1996 1995 1994 1993 1992
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Sales $450,128 $419,024 $390,692 $367,757 $346,359
Costs and expenses:
Cost of food 110,008 103,611 98,223 92,957 86,507
Payroll and related costs 124,333 113,952 104,543 99,233 95,963
Occupancy and other operating
expenses 132,595 123,907 113,546 104,958 99,590
General and administrative
expenses 20,217 18,672 15,330 15,967 15,101
________ ________ ________ ________ ________
387,153 360,142 331,642 313,115 297,161
Income from operations 62,975 58,882 59,050 54,642 49,198
Other income (expenses):
Interest expense (2,130) (1,749) - - -
Interest and other 1,697 1,805 1,385 1,574 1,319
________ ________ ________ ________ ________
(433) 56 1,385 1,574 1,319
________ ________ ________ ________ ________
Income before income taxes
and accounting change 62,542 58,938 60,435 56,216 50,517
Provision for income taxes 23,334 21,923 22,663 20,687 17,924
________ ________ ________ ________ ________
Income before accounting
change 39,208 37,015 37,772 35,529 32,593
Cumulative effect of change in
accounting for income taxes - - 1,563 - -
________ ________ ________ ________ ________
Net income (a) $ 39,208 $ 37,015 $ 39,335 $ 35,529 $ 32,593
Income per share before accounting
change $ 1.66 $ 1.55 $ 1.45 $ 1.31 $ 1.19
Net income per common share $ 1.66 $ 1.55 $ 1.51 $ 1.31 $ 1.19
Cash dividend declared per common
share $ .74 $ .68 $ .62 $ .56 $ .51
At year-end:
Total assets $335,290 $312,380 $289,668 $302,099 $276,319
Long-term debt $ 41,000 $ - $ - $ - $ 1,384
Number of cafeterias 204 187 176 168 162
<FN>
(a) Net income in 1994 includes the cumulative effect of change in accounting
for income taxes of $1,563, or $.06 per share.
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
During the last three years the Company has funded all capital
expenditures from internally-generated funds, cash equivalents, short-term
borrowings, and long-term debt. Capital expenditures for fiscal 1996 were
$48,529,000, a 30% increase from fiscal 1995. This increase in capital
expenditures resulted from the opening of 19 new cafeterias in fiscal 1996,
including one relocation, as compared to 12 in fiscal 1995, which also
included one relocation. In addition, the Company also purchased eight
sites as land held for future use compared to ten land sites purchased
during fiscal 1995.
Capital commitments budgeted for fiscal 1997 include the purchase of 20
cafeteria locations from Triangle FoodService Corporation, formerly Wyatt
Cafeterias, Inc., for approximately $14 million in cash. On October 2, 1996,
15 of these locations opened as "Luby's." Capital expenditures during
fiscal 1997 to repair and refurbish these units will range from $2 million
to $3 million. In addition to these locations, plans for fiscal 1997 include
the opening of approximately 15 new cafeterias: seven on sites owned by the
Company, two on land held under long-term ground leases, and six in regional
shopping malls. In addition, two existing units will be relocated: one from
a neighborhood shopping center to a regional mall, and one from a leased
premise to a freestanding cafeteria on land held under a long-term ground
lease. Therefore, a net increase of approximately 30 cafeterias is
anticipated in fiscal 1997.
As part of a joint venture agreement with Waterstreet, Inc. signed in
January 1996, the Company also plans to build three seafood restaurants during
fiscal 1997: two on sites owned by the Company and one on land held under
a long-term ground lease. These "Water Street Seafood Company" restaurants
will be leased by the joint venture from the Company and operated by
Waterstreet, Inc. In addition, as of August 31, 1996, the Company owned 11
undeveloped cafeteria sites, and several land site acquisitions were in
varying stages of negotiation. As a result of all the capital commitments
discussed above, the Company expects a substantial increase in the total
capital expenditures for fiscal 1997. Construction costs for the new
cafeterias and seafood restaurants are expected to be funded by cash flow from
operations, cash currently held in cash equivalent investments, and long-term
debt.
The Company generated cash from operations of $60,354,000 in fiscal 1996.
The Company had a balance of $41,000,000 outstanding at August 31, 1996, under
a $100,000,000 credit facility with a syndication of four banks. At
August 31, 1996, the Company had a working capital deficit of $35,096,000
which compares to the prior year's working capital deficit of $79,316,000.
The working capital position improved during fiscal 1996 due primarily to the
renegotiation of the short-term facility to long-term debt.
The Board of Directors authorized the purchase in the open market of up
to 1,000,000 shares of the Company's outstanding common stock through
December 31, 1997. During fiscal 1996 the Company purchased 252,200 shares
of its common stock at a cost of $5,997,000, which are being held as treasury
stock.
The Company believes that funds generated from operations and short-term
or long-term financing from external sources, which can be obtained on terms
acceptable to the Company, are adequate for its foreseeable needs.
Results of Operations
Fiscal 1996 Compared to Fiscal 1995
Sales increased $31,104,000, or 7%, due in part to the addition of 18 new
cafeterias in fiscal 1996 and 11 cafeterias in fiscal 1995. The average sales
volume of cafeterias opened over one year increased slightly to $2,332,000 in
fiscal 1996 from $2,321,000 in fiscal 1995 due primarily to higher average
tray prices over the prior year. The same-store customer count trend was
negative for the first time since 1992. This decline was not wholly
unexpected because all but four of the current year openings occurred in
existing markets. Accordingly, our market share improved in these areas;
however, customer traffic and sales at established cafeterias were negatively
impacted. This, combined with increased competition and the lack of full
recovery from the peso devaluation in fiscal 1995, resulted in the negative
same-store customer count trend.
Cost of food increased $6,397,000, or 6%, due primarily to the increase
in sales. Food cost margins improved from the price increase on the Lu Ann
Platter, which took effect on December 1, 1995. Payroll and related costs
increased $10,381,000, or 9%, due primarily to the increase in sales, higher
wages for hourly employees in existing cafeterias, and higher wage costs
associated with increased expansion over the prior year. As the expansion
rate increases for fiscal 1997 and the new Federal minimum wage increases
effective October 1, 1996, the Company anticipates that payroll and related
costs will increase as a percentage of sales over fiscal 1996. The Company
implemented a 3% to 4% price increase on September 15, 1996, to help offset
the pressure on profit margins. Occupancy and other operating expenses
increased $8,688,000, or 7%, due primarily to the increase in sales and the
opening of 18 new cafeterias. Since all preopening costs are expensed as
incurred, the preopening expense amount included in occupancy and other
operating expenses for fiscal 1997 will significantly increase due to the
higher expansion rate, especially in the first quarter. During fiscal 1997
the Company plans to maintain the budget for advertising expense at 25 of
sales. General and administrative expenses increased $1,545,000, or 8%, due
primarily to two additional area vice president positions, higher management
trainee salaries, and higher moving expenses, all associated with the
increased expansion.
Interest expense of $2,130,000 for fiscal 1996 was incurred in
conjunction with borrowings under the credit facility and is net of $1,100,000
capitalized on qualifying properties. The increase over fiscal 1995 of
$381,000, or 22%, was due to higher average outstanding borrowings.
The provision for income taxes increased $1,411,000, or 6%, due to higher
income before income taxes. The Company's effective income tax rate increased
slightly from 37.2% in fiscal 1995 to 37.3% in fiscal 1996.
Fiscal 1995 Compared to Fiscal 1994
Sales increased $28,332,000, or 7%, due in part to the addition of 11 new
cafeterias in fiscal 1995 and eight cafeterias in fiscal 1994. The average
sales volume of cafeterias opened over one year increased to $2,321,000 in
fiscal 1995 from $2,287,000 in fiscal 1994. The increase resulted from the
implementation of new marketing programs and from higher average tray prices
over the prior year.
Cost of food increased $5,388,000, or 5%, due primarily to the increase
in sales. Food cost margins improved from the price increase on the Lu Ann
Platter, which took effect on December 1, 1994, and an additional price
increase on selected individual items effective June 10, 1995. Payroll and
related costs increased $9,409,000, or 9%, due primarily to the increase in
sales, higher wages for hourly employees in existing cafeterias, and higher
wage costs associated with increased expansion over the prior year.
Occupancy and other operating expenses increased $10,361,000, or 9%, due
primarily to the increase in sales, the opening of 11 new cafeterias, higher
advertising expenditures, higher costs for a new uniform program, and higher
costs for paper supplies. General and administrative expenses increased
$3,342,000, or 22%, due primarily to the higher Company contribution to the
profit sharing and retirement plan as determined by the plan's provisions,
which increased approximately $3,000,000 over fiscal 1994.
Interest expense for fiscal 1995 was incurred in conjunction with
borrowings under the line-of-credit agreement and is net of $895,000
capitalized on qualifying properties.
The provision for income taxes decreased $740,000, or 3%, due in part to
lower income before income taxes. The Company's effective income tax rate
decreased slightly from 37.5% in fiscal 1994 to 37.2% in fiscal 1995.
Inflation
The Company's policy is to maintain stable menu prices without regard to
seasonal variations in food costs. General increases in costs of food, wages,
supplies, and services make it necessary for the Company to increase its menu
prices from time to time. To the extent prevailing market conditions allow,
the Company intends to adjust menu prices to maintain profit margins.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
LUBY'S CAFETERIAS, INC.
FINANCIAL STATEMENTS
Years Ended August 31, 1996, 1995, and 1994
with Report of Independent Auditors
Report of Independent Auditors
The Board of Directors and Shareholders
Luby's Cafeterias, Inc.
We have audited the accompanying balance sheets of Luby's Cafeterias,
Inc. at August 31, 1996 and 1995, and the related statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended August 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Luby's Cafeterias,
Inc. at August 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended August 31, 1996, in
conformity with generally accepted accounting principles.
As discussed in Note 6 to the financial statements, in 1994 the Company
changed its method of accounting for income taxes.
ERNST & YOUNG LLP
San Antonio, Texas
October 1, 1996
<PAGE>
Luby's Cafeterias, Inc.
Balance Sheets
August 31
1996 1995
________ _______
(Thousands of Dollars)
Assets
Current assets:
Cash and cash equivalents $ 2,687 $ 12,392
Trade accounts and other receivables 541 311
Food and supply inventories 4,517 4,034
Prepaid expenses 3,195 2,849
Deferred income taxes 418 629
________ ________
Total current assets 11,358 20,215
Investments and other assets - at cost:
Land held for future use 8,040 9,820
Other assets 4,303 3,188
________ ________
Total investments and other assets 12,343 13,008
Property, plant, and equipment - at cost, less
accumulated depreciation and amortization 311,589 279,157
________ ________
Total assets $335,290 $312,380
________ ________
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings $ - $ 57,000
Accounts payable - trade 14,568 10,969
Dividends payable 4,796 4,196
Accrued expenses and other liabilities 24,336 24,895
Income taxes payable 2,754 2,471
________ ________
Total current liabilities 46,454 99,531
Deferred income taxes and other credits 22,163 20,145
Commitments - -
Shareholders' equity:
Common stock, $.32 par value; authorized
100,000,000 shares, issued 27,403,067 shares 8,769 8,769
Paid-in capital 26,945 26,945
Retained earnings 267,374 248,973
Less cost of treasury stock, 3,425,525
shares in 1996 and 4,089,935 shares in
1995 (77,415) (91,983)
________ ________
Total shareholders' equity 225,673 192,704
________ ________
Total liabilities and shareholders' equity $335,290 $312,380
________ ________
See accompanying notes.<PAGE>
Luby's Cafeterias, Inc.
Statements of Income
Years Ended August 31
1996 1995 1994
________ ________ ________
(Thousands of dollars except per share data)
Sales $450,128 $419,024 $390,692
Costs and expenses:
Cost of food 110,008 103,611 98,223
Payroll and related costs 124,333 113,952 104,543
Occupancy and other operating
expenses 132,595 123,907 113,546
General and administrative expenses 20,217 18,672 15,330
________ ________ ________
387,153 360,142 331,642
________ ________ ________
Income from operations 62,975 58,882 59,050
Interest expense (2,130) (1,749) -
Other income, net 1,697 1,805 1,385
________ ________ ________
Income before income taxes and
cumulative effect of change in method
of accounting for income taxes 62,542 58,938 60,435
Provision for income taxes:
Current 20,940 21,750 18,909
Deferred 2,394 173 3,754
________ ________ ________
23,334 21,923 22,663
________ ________ ________
Income before cumulative effect of
change in method of accounting for
income taxes 39,208 37,015 37,772
Cumulative effect of change in
method of accounting for income
taxes - - 1,563
________ ________ ________
Net income $ 39,208 $ 37,015 $ 39,335
________ ________ ________
Earnings per share:
Income before cumulative effect of
change in method of accounting for
income taxes $ 1.66 $ 1.55 $ 1.45
Cumulative effect of change in
method of accounting for income
taxes - - .06
________ ________ ________
Net income per share $ 1.66 $ 1.55 $ 1.51
________ ________ ________
See accompanying notes.
<PAGE>
<TABLE>
Luby's Cafeterias, Inc.
Statements of Shareholders' Equity
<CAPTION>
Common Stock Total
Issued Treasury Paid-In Retained Shareholders'
Shares Amount Shares Amount Capital Earnings Equity
__________________________________________________________________________________________
(Amounts in thousands except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
August 31, 1993 27,403 $ 8,769 (176) $(3,072) $ 27,037 $206,214 $238,948
Net income for the
year - - - - - 39,335 39,335
Common stock issued
under stock option
plan, net of shares
tendered in partial
payment - - 159 3,360 (92) (744) 2,524
Cash dividends,
$.615 per share - - - - - (15,791) (15,791)
Purchases of treasury
stock - - (2,268) (51,490) - - (51,490)
______ ______ ______ _______ _______ _______ _______
Balance at
August 31, 1994 27,403 8,769 (2,285) (51,202) 26,945 229,014 213,526
Net income for the
year - - - - - 37,015 37,015
Common stock issued
under employee bene-
fit plans, net of
shares tendered in
partial payment - - 195 4,395 - (1,086) 3,309
Cash dividends,
$.675 per share - - - - - (15,970) (15,970)
Purchases of treasury
stock - - (2,000) (45,176) - - (45,176)
______ ______ ______ _______ _______ _______ _______
Balance at
August 31, 1995 27,403 8,769 (4,090) (91,983) 26,945 248,973 192,704
Net income for the
year - - - - - 39,208 39,208
Common stock issued
under employee bene-
fit plans, net of
shares tendered in
partial payment and
including tax benefits - - 916 20,565 - (3,218) 17,347
Cash dividends,
$.74 per share - - - - - (17,589) (17,589)
Purchases of treasury
stock - - (252) (5,997) - - (5,997)
______ ______ ______ _______ _______ _______ _______
Balance at
August 31, 1996 27,403 $ 8,769 (3,426) $(77,415) $ 26,945 $267,374 $225,673
______ ______ ______ _______ _______ _______ _______
See accompanying notes.
</TABLE>
<PAGE>
Luby's Cafeterias, Inc.
Statements of Cash Flows
Years Ended August 31
1996 1995 1994
________ ________ ________
(Thousands of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 39,208 $ 37,015 $ 39,335
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 17,693 16,417 15,700
Cumulative effect of change in
method of accounting - - (1,563)
(Gain) loss on disposal of land
held for future use - (106) 69
(Gain) loss on disposal of
property, plant, and equipment 31 (313) 23
________ ________ ________
Cash provided by operating
activities before changes in
operating assets and liabilities 56,932 53,013 53,564
Changes in operating assets and
liabilities:
(Increase) decrease in trade
accounts and other receivables (230) (36) 327
Increase in food and supply inventories (483) (183) (425)
Increase in prepaid expenses (346) (9) (373)
Increase in other assets (1,115) (353) (460)
Increase (decrease) in accounts
payable - trade 2,441 1,368 (87)
Increase (decrease) in accrued
expenses and other liabilities (337) 3,082 (4,832)
Increase (decrease) in income
taxes payable 1,263 (479) 157
Increase (decrease) in deferred
income taxes and other credits 2,229 (5) 4,275
_______ ________ ________
Net cash provided by operating
activities 60,354 56,398 52,146
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of land
held for future use - 495 955
Proceeds from disposal of property,
plant, and equipment 153 474 182
Purchases of land held for future use (5,776) (7,531) (3,470)
Purchases of property, plant, and
equipment (42,753) (29,715) (26,252)
_______ ________ ________
Net cash used in investing
activities (48,376) (36,277) (28,585)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common
under stock option plans 16,145 3,196 2,524
Net proceeds (payments) of
short-term borrowings (57,000) 40,000 17,000
Proceeds from long-term debt 268,000 - -
Reductions of long-term debt (227,000) - -
Purchases of treasury stock (4,839) (45,916) (50,750)
Dividends paid (16,989) (15,918) (15,731)
_______ _______ _______
Net cash used in financing activities (21,683) (18,638) (46,957)
_______ _______ _______
Net increase (decrease) in cash
and cash equivalents (9,705) 1,483 (23,396)
Cash and cash equivalents at
beginning of year 12,392 10,909 34,305
________ ________ ________
Cash and cash equivalents at end
of year $ 2,687 $ 12,392 $ 10,909
________ ________ ________
See accompanying notes.
<PAGE>
Luby's Cafeterias, Inc.
Notes to Financial Statements
August 31, 1996, 1994, and 1994
1. Significant Accounting Policies
Nature of Operations
Luby's Cafeterias, Inc. (the Company), based in San Antonio, Texas, owns
and operates cafeterias in the southern United States. As of August 31, 1996,
the Company operated a total of 204 units. The Company locates its cafeterias
convenient to shopping and business developments as well as to residential
areas. Accordingly, the cafeterias cater primarily to shoppers, store and
office personnel at lunchtime, and to families at dinner.
Inventories
The food and supply inventories are stated at the lower of cost
(first-in, first-out) or market.
Depreciation and Amortization
The Company depreciates the cost of plant and equipment over their
estimated useful lives using both straight-line and accelerated methods.
Leasehold improvements are amortized over the related lease lives, which are
in some cases shorter than the estimated useful lives of the improvements.
Long-Lived Assets
In March 1995, the Financial Accounting Standards Board (FASB) issued
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of," which requires impairment losses to
be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount.
Statement No. 121 also addresses the accounting for long-lived assets that are
expected to be disposed of. The Company will adopt Statement 121 in the first
quarter of 1997 and, based on current circumstances, does not believe the
effect of adoption will be material.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers all
highly liquid financial instruments purchased with an original maturity of
three months or less to be cash equivalents.
Preopening Expenses
New store preopening costs are expensed as incurred.
Advertising Expenses
Advertising costs are expensed as incurred.
Income Taxes
Deferred income taxes are computed using the liability method. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and
liabilities (temporary differences) and are measured using the enacted tax
rates and laws that will be in effect when the differences are expected to
reverse.
Stock Options
Proceeds from the sale of common stock issued under the stock option
plans and related tax benefits which accrue to the Company are accounted for
as capital transactions, and no charges or credits are made to income in
connection with the plans.
Use of Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amount of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period. Actual
results could differ from these estimates.
2. Property, Plant, and Equipment
The cost and accumulated depreciation of property, plant, and equipment
at August 31, 1996 and 1995, together with the related estimated useful lives
used in computing depreciation and amortization, are reflected below:
Estimated
1996 1995 Useful Lives
________ ________ _______________
(Thousands of dollars)
Land $ 74,699 $ 66,405 -
Cafeteria equipment and
furnishings 117,227 106,540 3 to 10 years
Buildings 209,404 181,389 20 to 40 years
Leasehold and leasehold
improvements 46,403 43,752 Term of leases
Office furniture and equipment 2,536 2,271 5 to 10 years
Transportation equipment 688 674 5 years
Construction in progress 7,506 9,225 -
________ ________
458,463 410,256
Less accumulated depreciation
and amortization 146,874 131,099
________ ________
$311,589 $279,157
________ ________
Total interest expense incurred for 1996, 1995, and 1994 was $3,230,000,
$2,644,000, and $288,000, respectively, which approximated the amount paid
in each year. The amounts capitalized on qualifying properties in 1996,
1995, and 1994 were $1,100,000, $895,000, and $288,000, respectively.
3. Debt
As of August 31, 1995, $57,000,000 in short-term borrowings was
outstanding under a $100 million line-of-credit which expired in December
1995. The weighted average interest rate for short-term borrowings based on
the number of days outstanding was 6.4% for 1995.
During 1996 the Company entered into a new $100 million credit facility
with a syndication of four banks. As part of this credit facility, the
Company has a revolving credit agreement which allows borrowings for varying
periods through February 27, 2001, at the lower of the prime rate or other
rate options available at the time of borrowing. The credit facility includes
a maximum commitment for letters of credit of $20 million. The Company pays a
facility fee of .1% on the total commitment. The credit facility contains
business covenants which, among other things, impose certain financial
restrictions on the Company relating primarily to leverage and net worth. As
of August 31, 1996, the balance outstanding under the revolving credit
agreement was $41 million at an interest rate of 5.7%.
At August 31, 1996, letters of credit of approximately $4,244,000 have
been issued as security for the payment of insurance obligations classified as
accrued expenses on the balance sheet.
4. Leases
The Company conducts a major part of its operations from facilities which
are leased under noncancelable lease agreements. Most of the leases are for
periods of ten to 25 years and provide for contingent rentals based on sales
in excess of a base amount. Approximately 80% of the leases contain renewal
options ranging from five to 30 years.
Annual future minimum lease payments under noncancelable operating leases
as of August 31, 1996, are as follows:
(Thousands of dollars)
Years ending August 31:
1997 $ 6,386
1998 6,570
1999 6,623
2000 6,470
2001 6,231
Thereafter 52,516
_______
Total minimum lease payments $84,796
_______
Total rent expense for operating leases for the years ended August 31,
1996, 1995, and 1994 was as follows:
1996 1995 1994
________ ________ ________
(Thousands of dollars)
Minimum rentals $ 5,807 $ 5,477 $ 5,141
Contingent rentals 1,126 1,229 1,436
________ ________ ________
$ 6,933 $ 6,706 $ 6,577
________ ________ ________
5. Employee Benefit Plans and Agreements
Incentive Compensation
The Company has various incentive compensation plans covering officers
and other key employees that are based upon the achievement of specified
earnings goals and performance factors. Awards under the plans are payable in
cash and/or in shares of common stock. Charges to expense for current and
future distributions under the plans amounted to $400,000, $431,000, and
$1,481,000 in 1996, 1995, and 1994, respectively. During the years ended
August 31, 1996, 1995, and 1994, 10,590, 4,820, and -0- shares of common stock
were issued under the plans out of treasury stock, respectively.
Stock Option Plans
The Company had an Employee Stock Option Plan for executive and other key
salaried employees. Under the terms of the stock option plan, nonqualified
options and incentive stock options totaling 225,000 shares of the Company's
common stock could be granted at prices not less than 100% of fair market
value at date of grant. Options were exercisable for such periods as the
Compensation Committee determined, but not for more than ten years from
date of grant. All options outstanding under this plan either expired or were
exercised as of August 31, 1995.
In 1990 the Company adopted a new Management Incentive Stock Plan to
replace the Employee Stock Option Plan and to provide for market-based
incentive awards, including stock options, stock appreciation rights,
restricted stock, and performance share awards. Under the terms of the
Management Incentive Stock Plan, nonqualified options and incentive stock
options totaling 2,700,000 shares of the Company's common stock are reserved
for grants to the officer group, certain administrative personnel, and
cafeteria management personnel. Stock options may be granted at prices not
less than 100% of fair market value at date of grant. Options granted to the
participants of the plan are exercisable over staggered periods and expire,
depending upon the type of grant, in five to seven years. The plan provides
for various vesting methods, depending upon the category of personnel.
Following is a summary of activity in the stock option plans for the
three years ended August 31, 1996, 1995, and 1994:
<TABLE>
<CAPTION>
Common
Option Price Shares Options Options
Per Share Reserved Outstanding Exercisable
________________ _________ ___________ ___________
<S> <C> <C> <C> <C>
Balances - August 31, 1993 $14.83 to $23.25 2,654,694 1,876,169 212,434
Granted 21.75 to 21.75 - 370,725 -
Became exercisable 15.00 to 23.25 - - 246,327
Cancelled or expired 15.00 to 23.25 - (139,294) (41,633)
Exercised 14.83 to 17.88 (191,366) (191,366) (191,366)
_________ _________ _______
Balances - August 31, 1994 15.00 to 23.25 2,463,328 1,916,234 225,762
Granted 22.75 to 23.75 - 136,100 -
Became exercisable 15.00 to 23.75 - - 582,379
Cancelled or expired 15.00 to 23.75 - (95,467) (43,552)
Exercised 15.00 to 21.75 (209,753) (209,753) (209,753)
_________ _________ _______
Balances - August 31, 1995 15.00 to 23.75 2,253,575 1,747,114 554,836
Granted 21.00 to 21.63 - 223,648 -
Became exercisable 15.00 to 23.75 - - 1,167,766
Cancelled or expired 16.42 to 23.75 - (53,415) (38,903)
Exercised 15.00 to 23.25 (980,600) (980,600) (980,600)
_________ _________ ________
Balances - August 31, 1996 $15.00 to $23.75 1,272,975 936,747 703,099
_________ _________ ________
</TABLE>
Deferred Compensation
Deferred compensation agreements exist for several key management
employees, all of whom are current or former officers. Under the agreements,
the Company is obligated to provide for each such employee or his
beneficiaries, during a period of ten years after the employee's death,
disability, or retirement, annual benefits ranging from $15,500 to $43,400.
The estimated present value of future benefits to be paid is being
accrued over the period from the effective date of the agreements until the
expected retirement dates of the participants. The net expense incurred for
this plan for the years ended August 31, 1996, 1995, and 1994 amounted to
$239,000, $79,000, and $78,000, respectively.
The Company also has a Supplemental Executive Retirement Plan (SERP) for
key executives and officers. The SERP is a "target" benefit plan, with the
annual lifetime benefit based upon a percentage of average salary during the
final five years of service at age 65, offset by several sources of income
including benefits payable under deferred compensation agreements, if
applicable, the profit sharing plan, and Social Security. SERP benefits will
be paid from the Company's assets. The net expense incurred for this plan for
the year ended August 31, 1996, was $80,000, and the unfunded accumulated
benefit obligation as of August 31, 1996, was approximately $250,000.
Profit Sharing
The Company has a profit sharing plan and retirement trust covering
substantially all employees who have attained the age of 21 years and have
completed one year of continuous service. The plan is administered by a
corporate trustee, is a "qualified plan" under Section 401(a) of the Internal
Revenue Code, and provides for the payment of the employee's vested portion of
the plan upon retirement, termination, disability, or death. The plan is
funded by contributions of a portion of the net earnings of the Company. The
plan provides that for each fiscal year in which the Company's net income
(before income taxes and before any contribution to the plan) meets certain
minimum standards, the Company is obligated to contribute to the plan, at a
minimum, an amount equal to a defined percentage of the participants'
compensation. In no event will the required contribution exceed 10% of the
Company's income before income taxes and before any contribution to the plan.
The Company's annual contribution to the plan amounted to $5,100,000,
$4,888,000, and $1,886,000, for 1996, 1995, and 1994, respectively.
6. Income Taxes
The Company adopted FASB Statement No. 109, "Accounting for Income
Taxes," in 1994. The effect of the change on pretax income from continuing
operations for the year ended August 31, 1994, was not material; however, the
cumulative effect of the change increased net income in fiscal 1994 by
$1,563,000, or $.06 per share.
The tax effect of temporary differences results in deferred income tax
assets and liabilities as of August 31 as follows:
1996 1995
________ ___________
(Thousands of dollars)
Deferred tax liabilities:
Amortization of capitalized interest $ 494 $ 522
Depreciation and amortization 19,085 17,566
Deferred compensation (779) (766)
Other 1,083 378
_______ _______
Total deferred tax liabilities 19,883 17,700
Deferred tax asset:
Workers' compensation insurance 418 629
_______ _______
Net deferred tax liabilities $19,465 $17,071
_______ _______
The reconciliation of the provision for income taxes to the expected
income tax expense (computed using the statutory tax rate) is as follows:
1996 1995 1994
Amount % Amount % Amount %
_______ ____ _______ ____ _______ ____
(Thousands of dollars and as a percent of pretax income)
Normally expected
income tax expense $21,890 35.0% $20,628 35.0% $21,152 35.0%
State income taxes 1,488 2.4 1,616 2.7 1,625 2.7
Jobs tax credits (1) - (151) (.2) (260) (.4)
Other differences (43) (.1) (170) (.3) 146 .2
_______ ____ _______ ____ ______ ____
$23,334 37.3% $21,923 37.2% $22,663 37.5%
_______ ____ _______ ____ ______ ____
Cash payments for income taxes for 1996, 1995, and 1994 were $19,677,000,
$22,229,000, and $18,752,000, respectively.
7. Commitments
At August 31, 1996, the Company had seven cafeterias under construction.
The aggregate unexpended costs under the construction contracts were
approximately $5,469,000.
The Company has unconditionally guaranteed a $2,000,000 loan under a line
of credit for an unrelated limited partnership in exchange for advertising
rights and a participation in future profits of the venture.
8. Common Stock
In 1991 the Board of Directors adopted a Shareholder Rights Plan and
declared a dividend of one common stock purchase right for each outstanding
share of common stock. The rights are not initially exercisable. The rights
may become exercisable under circumstances described in the Plan if any person
or group (an Acquiring Person) becomes the beneficial owner of 15% or more of
the common stock. Once the rights become exercisable, each right will be
exercisable to purchase, for $27.50 (the Purchase Price), one-half of one
share of common stock, par value $.32 per share, of the Company. If any
person becomes the beneficial owner of 15% or more of the common stock, each
right will entitle the holder, other than the Acquiring Person, to purchase
for the Purchase Price a number of shares of the Company's common stock having
a market value of four times the Purchase Price.
The Board of Directors authorized the purchase in the open market of up
to 1,000,000 shares of the Company's outstanding common stock through December
31, 1997. During 1996 the Company purchased 252,200 shares of its
common stock at a cost of $5,997,000, which are being held as treasury stock.
9. Per Share Information
The weighted average number of shares used in the net income per share
computation was 23,688,813 for 1996, 23,908,087 for 1995, and 25,981,840 for
1994.
10. Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities at August 31 consisted of:
1996 1995
_______ _______
(Thousands of dollars)
Salaries and bonuses $ 6,185 $ 7,542
Rent 777 841
Taxes, other than income 5,742 4,886
Profit sharing plan 5,057 4,888
Insurance 6,273 6,417
Other 302 321
_______ _______
$24,336 $24,895
_______ _______
11. Quarterly Financial Information (Unaudited)
The following is a summary of quarterly unaudited financial information
for 1996 and 1995:
Three Months Ended
November 30, February 29, May 31, August 31,
1995 1996 1996 1996
________ ________ ________ _________
(Thousands of dollars except per share data)
Sales $108,337 $108,835 $117,132 $115,824
Gross profit 51,027 52,634 57,140 54,986
Net income 8,565 9,322 10,964 10,357
Net income per share .37 .40 .46 .43
Three Months Ended
November 30, February 28, May 31, August 31,
1994 1995 1995 1995
________ ________ ________ _________
(Thousands of dollars except per share data)
Sales $101,446 $100,570 $106,899 $110,109
Gross profit 48,361 48,446 51,523 53,131
Net income 8,683 8,582 9,907 9,843
Net income per share .35 .36 .42 .42
12. Subsequent Event
On September 16, 1996, the Company purchased the assets of 20 cafeteria
locations from Triangle FoodService Corporation, formerly Wyatt Cafeterias,
Inc., for approximately $14 million in cash.<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
There is incorporated in this Item 10 by reference that portion
of the Company's definitive proxy statement for the 1997 annual
meeting of shareholders appearing therein under the captions "Election
of Directors" and "Information Concerning Directors and Executive
Officers." See also the information in Item 4A of Part I of this
Report.
Item 11. Executive Compensation.
There is incorporated in this Item 11 by reference that portion
of the Company's definitive proxy statement for the 1997 annual
meeting of shareholders appearing therein under the caption "Executive
Compensation."
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
There is incorporated in this Item 12 by reference that portion
of the Company's definitive proxy statement for the 1997 annual
meeting of shareholders appearing therein under the captions
"Principal Shareholders" and "Management Shareholders."
Item 13. Certain Relationships and Related Transactions.
There is incorporated in this Item 13 by reference that portion
of the Company's definitive proxy statement for the 1997 annual
meeting of shareholders appearing therein under the caption "Certain
Relationships and Related Transactions."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Documents.
1. Financial Statements
The following financial statements are filed as part of this Report:
Balance sheets at August 31, 1996 and 1995
Statements of income for each of the three years in the period
ended August 31, 1996
Statements of shareholders' equity for each of the three years in
the period ended August 31, 1996
Statements of cash flows for each of the three years in the
period ended August 31, 1996
Notes to financial statements
Report of independent auditors
2. Financial Statement Schedules
All schedules are omitted since the required information is not present
or is not present in amounts sufficient to require submission of the schedule
or because the information required is included in the financial statements
and notes thereto.
3. Exhibits
The following exhibits are filed as a part of this Report:
2 - Agreement and Plan of Merger dated November 1, 1991,
between Luby's Cafeterias, Inc., a Texas corporation,
and Luby's Cafeterias, Inc., a Delaware corporation
(filed as Exhibit 2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended November 30, 1991,
and incorporated herein by reference).
3(a) - Certificate of Incorporation of Luby's Cafeterias, Inc., a
Delaware corporation, as in effect February 28, 1994 (filed
as Exhibit 3(a) to the Company's Quarterly Report on Form
10-Q for the quarter ended February 28, 1994, and
incorporated herein by reference).
3(b) - Amendment to Bylaws of Luby's Cafeterias, Inc. adopted July 12,
1996.
3(c) - Bylaws of Luby's Cafeterias, Inc. as currently in effect.
4(a) - Description of Common Stock Purchase Rights of Luby's
Cafeterias, Inc., in Form 8-A (filed April 17, 1991, effective
April 26, 1991, File No. 1-8308, and incorporated herein by
reference).
4(b) - Amendment No. 1 dated December 19, 1991, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(b) to the Company's
Quarterly Report on Form 10-Q for the quarter ended November 30,
1991, and incorporated herein by reference).
4(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(d) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
February 28, 1995, and incorporated herein by reference).
4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(d) to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 31,
1995, and incorporated herein by reference).
4(e) - Credit Agreement dated February 27, 1996, among Luby's
Cafeterias, Inc., Certain Lenders, and NationsBank of Texas,
N.A. (filed as Exhibit 4(e) to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 29, 1996, and
incorporated herein by reference).
10(a) - Form of Deferred Compensation Agreement entered into between
Luby's Cafeterias, Inc. and various officers (filed as Exhibit
10(b) to the Company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1981, and incorporated herein by
reference).
10(b) - Annual Incentive Plan for Area Vice Presidents of Luby's
Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit
10(d) to the Company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1983, and incorporated herein by
reference).
10(c) - Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted
October 19, 1983 (filed as Exhibit 10(e) to the Company's
Annual Report on Form 10-K for the fiscal year ended
August 31, 1983, and incorporated herein by reference).
10(d) - Performance Unit Plan of Luby's Cafeterias, Inc. approved by
the shareholders on January 12, 1984 (filed as Exhibit 10(f) to
the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1984, and incorporated herein by reference).
10(e) - Employment Contract dated January 8, 1988, between Luby's
Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h)
to the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1988, and incorporated herein by reference).
10(f) - Management Incentive Stock Plan of Luby's Cafeterias, Inc.
(filed as Exhibit 10(i) to the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1989, and incorporated
herein by reference).
10(g) - Nonemployee Director Deferred Compensation Plan of Luby's
Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit
10(g) to the Company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 1994, and incorporated herein by
reference).
10(h) - Nonemployee Director Stock Option Plan of Luby's Cafeterias,
Inc. approved by the shareholders on January 13, 1995 (filed
as Exhibit 10(h) to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1995, and
incorporated herein by reference).
10(i) - Employment Contract dated January 12, 1996, between Luby's
Cafeterias, Inc. and John B. Lahourcade (filed as Exhibit 10(i)
to the Company's Quarterly Report on Form 10-Q for the quarter
ended February 29, 1996, and incorporated herein by reference).
10(j) - Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan
dated May 30, 1996.
10(k) - Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July
18, 1996.
11 - Statement re computation of per share earnings.
21 - Subsidiaries of Luby's Cafeterias, Inc.
99(a) - Consent of Ernst & Young LLP.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the last quarter of
the period covered by this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
Date: November 26, 1996 LUBY'S CAFETERIAS, INC.
(Registrant)
By: JOHN E. CURTIS, JR.
___________________________
John E. Curtis, Jr., President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature and Date Name and Title
RALPH ERBEN Ralph Erben, Chairman
_______________________________ of the Board, Chief Executive
November 26, 1996 Officer, and Director
JOHN E. CURTIS, JR. John E. Curtis, Jr., President,
_______________________________ Chief Operating Officer, Chief
November 26, 1996 Financial Officer, and Director
WILLIAM E. ROBSON William E. Robson, Executive Vice
________________________________ President-Operations, and
Director
November 26, 1996
RONALD E. RIEMENSCHNEIDER Ronald E. Riemenschneider, Vice
________________________________ President, Treasurer, and
November 26, 1996 Principal Accounting Officer
LAURO F. CAVAZOS Lauro F. Cavazos, Director
________________________________
November 26, 1996
DAVID B. DAVISS David B. Daviss, Director
________________________________
November 26, 1996
ROGER R. HEMMINGHAUS Roger R. Hemminghaus, Director
________________________________
November 26, 1996
JOHN B. LAHOURCADE John B. Lahourcade, Director
________________________________
November 26, 1996
WALTER J. SALMON Walter J. Salmon, Director
________________________________
November 26, 1996
GEORGE H. WENGLEIN George H. Wenglein, Director
________________________________
November 26, 1996
JOANNE WINIK Joanne Winik, Director
________________________________
November 26, 1996
<PAGE>
EXHIBIT INDEX
Exhibit
Page
2 - Agreement and Plan of Merger dated November 1, 1991,
between Luby's Cafeterias, Inc., a Texas corporation,
and Luby's Cafeterias, Inc., a Delaware corporation
(filed as Exhibit 2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended November 30, 1991,
and incorporated herein by reference).
3(a) - Certificate of Incorporation of Luby's Cafeterias, Inc., a
Delaware corporation, as in effect February 28, 1994 (filed
as Exhibit 3(a) to the Company's Quarterly Report on Form
10-Q for the quarter ended February 28, 1994, and
incorporated herein by reference).
3(b) - Amendment to Bylaws of Luby's Cafeterias, Inc. adopted July 12,
1996.
3(c) - Bylaws of Luby's Cafeterias, Inc. as currently in effect.
4(a) - Description of Common Stock Purchase Rights of Luby's
Cafeterias, Inc., in Form 8-A (filed April 17, 1991, effective
April 26, 1991, File No. 1-8308, and incorporated herein by
reference).
4(b) - Amendment No. 1 dated December 19, 1991, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(b) to the Company's
Quarterly Report on Form 10-Q for the quarter ended November 30,
1991, and incorporated herein by reference).
4(c) Amendment No. 2 dated February 7, 1995, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(d) to the Company's
Quarterly Report on Form 10-Q for the quarter ended
February 28, 1995, and incorporated herein by reference).
4(d) Amendment No. 3 dated May 29, 1995, to Rights Agreement
dated April 16, 1991 (filed as Exhibit 4(d) to the Company's
Quarterly Report on Form 10-Q for the quarter ended May 31,
1995, and incorporated herein by reference).
4(e) - Credit Agreement dated February 27, 1996, among Luby's
Cafeterias, Inc., Certain Lenders, and NationsBank of Texas,
N.A. (filed as Exhibit 4(e) to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 29, 1996, and
incorporated herein by reference).
10(a) - Form of Deferred Compensation Agreement entered into between
Luby's Cafeterias, Inc. and various officers (filed as Exhibit
10(b) to the Company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1981, and incorporated herein by
reference).
10(b) - Annual Incentive Plan for Area Vice Presidents of Luby's
Cafeterias, Inc. adopted October 19, 1983 (filed as Exhibit
10(d) to the Company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1983, and incorporated herein by
reference).
10(c) - Incentive Bonus Plan of Luby's Cafeterias, Inc. adopted
October 19, 1983 (filed as Exhibit 10(e) to the Company's
Annual Report on Form 10-K for the fiscal year ended
August 31, 1983, and incorporated herein by reference).
10(d) - Performance Unit Plan of Luby's Cafeterias, Inc. approved by
the shareholders on January 12, 1984 (filed as Exhibit 10(f) to
the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1984, and incorporated herein by reference).
10(e) - Employment Contract dated January 8, 1988, between Luby's
Cafeterias, Inc. and George H. Wenglein (filed as Exhibit 10(h)
to the Company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1988, and incorporated herein by reference).
10(f) - Management Incentive Stock Plan of Luby's Cafeterias, Inc.
(filed as Exhibit 10(i) to the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1989, and incorporated
herein by reference).
10(g) - Nonemployee Director Deferred Compensation Plan of Luby's
Cafeterias, Inc. adopted October 27, 1994 (filed as Exhibit
10(g) to the Company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 1994, and incorporated herein by
reference).
10(h) - Nonemployee Director Stock Option Plan of Luby's Cafeterias,
Inc. approved by the shareholders on January 13, 1995 (filed
as Exhibit 10(h) to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1995, and
incorporated herein by reference).
10(i) - Employment Contract dated January 12, 1996, between Luby's
Cafeterias, Inc. and John B. Lahourcade (filed as Exhibit 10(i)
to the Company's Quarterly Report on Form 10-Q for the quarter
ended February 29, 1996, and incorporated herein by reference).
10(j) - Luby's Cafeterias, Inc. Supplemental Executive Retirement Plan
dated May 30, 1996.
10(k) - Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated July
18, 1996.
11 - Statement re computation of per share earnings.
21 - Subsidiaries of Luby's Cafeterias, Inc.
99(a) - Consent of Ernst & Young LLP.
Exhibit 3(b)
LUBY'S CAFETERIAS, INC.
RESOLUTIONS OF BOARD OF DIRECTORS
July 12, 1996
Bylaw Amendment
RESOLVED: That Section 1 of Article III of the Bylaws of Luby's
Cafeterias, Inc. is hereby amended by adding thereto the following:
Candidates to stand for election as directors at an annual
meeting of stockholders shall be nominated by the Board of
Directors; and candidates may also be nominated by any
stockholder of record entitled to vote at the meeting,
provided the stockholder 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 Corporation not later than 90 days prior to
the date of the meeting of stockholders at which directors
are to be elected and shall include (i) the name and address
of the stockholder 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.<PAGE>
Exhibit 3(c)
BYLAWS
OF
LUBY'S CAFETERIAS, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board
of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Time and Place of Meeting. All meetings of the
stockholders shall be held at such time and at such place within or without
the State of Delaware as shall be designated by the Board of Directors and
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Annual Meetings. An annual meeting of the stockholders
shall be held each year on such date and at such time as shall be designated
from time to time by the Board of Directors, and stated in the notice of the
meeting, at which meeting the stockholders shall elect, in accordance with the
Certificate of Incorporation, a board of directors and transact such other
business as may properly be brought before the meeting.
Section 3. Special Meetings. Special meetings of the stockholders,
for any proper purpose or purposes, unless otherwise prescribed by statute or
by the Certificate of Incorporation of the Corporation, may be called at any
time by (a) the Board of Directors, (b) the President or (c) the holders of at
least fifty percent of all shares entitled to vote at the proposed special
meeting. Such request shall state the purpose or purposes of the proposed
meeting. Business transacted at special meetings shall be confined to the
purpose or purposes stated in the notice of the meeting.
Section 4. Notice. Written or printed notice stating the place,
date and hour of any meeting of stockholders, and in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than 10 nor more than 60 days before the date of the
meeting, either personally or by mail, by or at the direction of the
President, the Secretary, or the person calling the meeting, to each
stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail, postage prepaid, addressed to the stockholder at his address as it
appears on the stock ledger of the Corporation.
Section 5. Record Date. The Board of Directors may fix in advance a
record date for the purpose of determining stockholders entitled to notice of
or to vote at a meeting of stockholders, such record date to be not less than
10 nor more than 60 days prior to such meeting; or the Board of Directors may
close the stock ledger for a stated period which shall not exceed 60 days and
shall be for at least 10 days immediately preceding such meeting. In the
absence of any action by the Board of Directors, the date upon which the
notice of the meeting is mailed shall be the record date.
Section 6. List of Stockholders. The officer or agent of the
Corporation having charge of the stock ledger of the Corporation shall prepare
and make, at least 10 days before each meeting of the stockholders, a complete
list of the stockholders entitled to vote at such meeting or any adjournment
thereof, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list, for a period of 10 days prior to such meeting, shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice
of the meeting or, if not so specified, at the place where the meeting is to
be held. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any stockholder
during the whole time of the meeting. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine such list or stock
ledger, or to vote at any meetings of stockholders.
Section 7. Quorum. The holders of a majority of the capital stock
issued and outstanding and entitled to be cast thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time until a
quorum shall be present or represented without notice of the adjourned meeting
other than announcement of the time and place thereof at the meeting at which
the adjournment is taken. When any adjourned meeting is reconvened and a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the original meeting. If the adjournment is
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 8. Voting. When a quorum is present at any meeting, the vote
of the holders of the shares present or represented by proxy at such meeting
and representing a majority of the votes entitled to be cast by each class of
stock shall decide any question brought before such meeting, unless the vote
of a different number is expressly required by statute, the Certificate of
Incorporation or these Bylaws. The Board of Directors, in its discretion,
or the officer of the Corporation presiding at a meeting of stockholders in
his discretion, may require that any votes cast at such meeting shall be cast
by written ballot.
Section 9. Proxy. Unless otherwise provided in the Certificate of
Incorporation, each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share having voting power
held by such stockholder. Every proxy must be executed in writing (which
shall include telegraphing, facsimile transmission or cabling) by the
stockholder or by his duly authorized attorney-in-fact, but no proxy shall be
voted or acted upon after three years from its date, unless the proxy provides
for a longer period.
Section 10. Notice of Business. At any meeting of stockholders, only
such business shall be conducted as shall have been brought before the meeting
(a) by or at the direction of the Board of Directors or (b) by any stockholder
of the Corporation who is a stockholder of record entitled to vote at such
meeting who complies with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
ARTICLE III
DIRECTORS
Section 1. Number, Election and Terms of Directors. The business and
affairs of the Corporation shall be managed by a Board of Directors which
shall consist of not less than nine nor more than fifteen persons, who need
not be residents of the State of Delaware or stockholders of the Corporation.
The exact number of directors within the minimum and maximum limitations
specified in the preceding sentence shall be fixed from time to time by the
Board of Directors pursuant to a resolution adopted by a majority of the
entire Board of Directors. The directors shall be divided into three classes,
as nearly equal in number as possible, with the term of office of the first
class to expire at the first following Annual Meeting of Stockholders, the
term of office of the second class to expire at the second following Annual
Meeting of Stockholders and the term of office of the third class to expire at
the third following Annual Meeting of Stockholders. At each Annual Meeting of
Stockholders following such initial classification and election, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding Annual Meeting of
Stockholders after their election. A directorship to be filled by reason of
an increase in the number of directors may be filled (i) by election at an
Annual or Special Meeting of Stockholders called for that purpose or (ii) by
the Board of Directors for a term of office continuing only until the next
election of one or more directors by the stockholders; provided that the Board
of Directors may not fill more than two such directorships during the period
between any two successive Annual Meetings of Stockholders. Candidates to
stand for election as directors at an annual meeting of stockholders shall be
nominated by the Board of Directors; and candidates may also be nominated by
any stockholder of record entitled to vote at the meeting, provided the
stockholder 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 Corporation not later than 90 days prior to the date
of the meeting of stockholders at which directors are to be elected and shall
include (i) the name and address of the stockholder 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.
Section 2. Vacancies in the Board of Directors and Removal of
Directors. Any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause
shall be filled by a majority vote of the directors then in office, and
directors so chosen shall hold office for a term expiring at the Annual
Meeting of Stockholders at which the term of the class to which they have been
elected expires. No decrease in the number of directors constituting the
Board of Directors shall shorten the term of any incumbent director. Any
director, or the entire Board of Directors, may be removed from office at any
time, but only for cause and only by the affirmative vote of the holders of at
least 80% of the voting power of all of the shares of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class.
Section 3. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors, which may exercise all
powers of the Corporation and do all such lawful acts and things as are not by
statute, or by the Certificate of Incorporation or by these Bylaws directed or
required to be exercised or done by the stockholders.
Section 4. Place of Meetings. The Directors of the Corporation may
hold their meetings, both regular and special, either within or without the
State of Delaware.
Section 5. Annual Meetings. The first meeting of each newly elected
Board of Directors shall be held without notice immediately following the
annual meeting of stockholders, and at the same place, unless by unanimous
consent of the directors then elected and serving such time or place shall be
changed.
Section 6. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and place as shall from time
to time be determined by the Board of Directors.
Section 7. Special Meetings. Special meetings of the Board of
Directors may be called by the President on five days' written notice to each
director delivered personally or by mail or telegram. Special meetings shall
be called by the President or Secretary in like manner and on like notice on
the written request of a majority of the directors.
Section 8. Quorum. Unless otherwise provided by statute, the
Certificate of Incorporation or these Bylaws, at all meetings of the Board of
Directors, the presence of a majority of the number of directors constituting
the whole Board shall be necessary and sufficient to constitute a quorum for
the transaction of business, and the affirmative vote of a majority of the
number of Directors present at any meeting at which there is a quorum shall
be the act of the Board of Directors. If a quorum shall not be present at any
meeting of directors, the directors present may adjourn the meeting from time
to time without notice other than announcement at the meeting, until a quorum
shall be present.
Section 9. Executive Committee. The Board of Directors, by
resolution adopted by a majority of the number of directors constituting the
whole Board, may designate two or more directors to constitute an Executive
Committee, one of whom shall be designated as Chairman. The Executive
Committee shall meet monthly or at such times as the Committee may determine
to be appropriate. A majority of the Committee shall constitute a quorum and
the act of a majority of a quorum shall constitute the act of the Committee.
Meetings of the Executive Committee may be called at any time by the Chairman
upon three days' notice. During the intervals between the meetings of the
Board, the Executive Committee shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, except where action of the Board of Directors is
required by law; provided, however, that the Executive Committee shall have no
power or authority with reference to (a) amending the Certificate of
Incorporation, (b) adopting an agreement of merger or consolidation, (c)
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, (d) recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, (e) amending the Bylaws of the Corporation, (f) declaring a
dividend or (g) authorizing the issuance of stock. The Executive Committee
shall keep regular minutes of its proceedings and all actions of the Executive
Committee shall be reported promptly to the Board. Such actions shall be
subject to review by the Board, provided that no rights of third parties shall
be affected by such review. Any member of the Executive Committee may be
removed, for or without cause, by vote of a majority of the number of
directors constituting the whole Board.
Section 10. Other Committees. The Board of Directors, by resolution
adopted by a majority of the number of directors constituting the whole Board,
may designate other committees, each committee to consist of two or more
directors and to have and exercise such powers and authority as may be
provided in such resolution. Each such committee shall keep regular minutes
of its proceedings and make reports to the Board of Directors when and as
required by the Board.
Section 11. Compensation of Directors. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors or of any committee of the Board of
Directors and may be paid a fixed sum for attendance at each such meeting, or
may be paid stated salaries as directors, or both; provided that nothing
herein contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 12. Action Without a Meeting. Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee designated by the Board of Directors, may be taken without a meeting
if all members of the Board or committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
Section 13. Meetings by Conference Call, Etc. Unless otherwise
restricted by the Certificate of Incorporation or these Bylaws, members of the
Board of Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
Section 14. Reliance Upon Books. Directors and members of any
committee designated by the Board of Directors shall, in the performance of
their duties, be fully protected in relying in good faith upon the books of
accounts or reports made to the Corporation by any of its officers, or by an
independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Corporation.
ARTICLE IV
NOTICES
Section 1. Form of Notice. Whenever under the provisions of the
Certificate of Incorporation, these Bylaws or by statute, notice is required
to be given to any director or stockholder, and no provision is made as to how
such notice shall be given, it shall not be construed to mean personal notice,
but any such notice may be given in writing and personally delivered or sent
by mail, postage prepaid, addressed to such director or stockholder at such
address as appears on the books of the Corporation, and any such notice
required or permitted to be given by mail shall be deemed to be given at the
time when the same be thus deposited in the United States mail as aforesaid;
such notice may also be given by some form of electronic transmission, in
which case it shall be so addressed as to be received by such director or
stockholder at the address of such director or stockholder as it appears on
the books of the Corporation or at a regular place of such director's or
stockholder's business, in which case such notice shall be deemed to be given
at the time when the recipient of such transmission acknowledges its receipt.
Section 2. Waiver. Whenever any notice is required to be given to
any director or stockholder of the Corporation under the provisions of the
statutes, the Certificate of Incorporation or these Bylaws, a waiver thereof
in writing signed by the person or persons entitled to such notice, whether
before or after the time stated in such notice, shall be deemed equivalent to
the giving of such notice. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the stockholders, directors,
or members of a committee of directors need be specified in any written waiver
of notice. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the attendance is for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
ARTICLE V
OFFICERS
Section 1. In General. The officers of the Corporation shall be
elected by the Board of Directors and shall be a President, one or more Vice
Presidents, a Secretary and a Treasurer. The Board of Directors may also
elect additional officers, including but not limited to a Chairman of the
Board, a Vice Chairman of the Board, one or more Executive Vice Presidents,
one or more Senior Vice Presidents, one or more Assistant Vice Presidents, one
or more Assistant Secretaries and one or more Assistant Treasurers, and a
Controller. Two or more offices may be held by the same person, except that
the office of President and Secretary shall not be held by the same person.
Section 2. Election and Removal. The Board of Directors shall elect
officers at its first meeting after each annual meeting of the stockholders.
The salaries of all officers shall be fixed by the Board of Directors from
time to time. Each officer shall hold office until his successor is elected
and qualified. Any officer may be removed, for or without cause, at any
time by vote of the Board of Directors. Election or appointment of an officer
or agent of the Corporation shall not of itself create contract rights.
Section 3. Chairman. The Chairman of the Board of Directors, if
there be a Chairman, shall preside at all meetings of the stockholders and the
Board of Directors. In the absence or disability of the Chairman of the
Board, the President shall preside at meetings of the stockholders and the
Board of Directors. The Chairman of the Board may be designated by the Board
of Directors as the Chief Executive Officer of the Corporation, in which event
he shall have the general and active management of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The Chairman of the Board may sign
certificates for shares, deeds, mortgages, bonds, contracts and other
instruments on behalf of the Corporation, except as otherwise required by law
or where the signing thereof is expressly delegated by the Board of Directors
or these Bylaws to some other officer or agent.
Section 4. President. The President may be designated by the Board
of Directors as the Chief Executive Officer of the Corporation, in which event
he shall have the general and active management of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. If the President is not so designated as
the Chief Executive Officer, he shall be the Chief Operating Officer of the
Corporation. The President may sign certificates for shares, deeds,
mortgages, bonds, contracts and other instruments on behalf of the
Corporation, except as otherwise required by law or where the signing thereof
is expressly delegated by the Board of Directors or these Bylaws to some other
officer or agent. The President shall, in the absence or disability of the
Chairman of the Board, perform the duties and exercise the powers of the
Chairman of the Board, except as otherwise expressly provided in these Bylaws.
Section 5. Vice Presidents. If there be an Executive Vice President,
he shall, in the absence or disability of the President, perform the duties
and exercise the powers of the President. If the President is designated as
the Chief Executive Officer of the Corporation pursuant to these Bylaws, the
Executive Vice President shall be the Chief Operating Officer of the
Corporation. In the absence or disability of the President and the Executive
Vice President, the Senior Vice Presidents in the order of their seniority
shall perform the duties and exercise the powers of the President. All Vice
Presidents of the Corporation shall generally assist the President and the
Chairman of the Board and shall perform such other duties as the President or
the Chairman of the Board or the Board of Directors may prescribe.
Section 6. Secretary. The Secretary shall attend all sessions of the
Board of Directors and all meetings of the stockholders and record all votes
and the minutes of all proceedings in a book to be kept for that purpose, and
shall perform like duties for the Executive Committee and any other committees
of the Board when required. He shall give, or cause to be given, notice of
all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the
Board of Directors or the President. He shall keep in safe custody the seal
of the Corporation.
Section 7. Assistant Secretaries. Any Assistant Secretary shall, in
the absence or disability of the Secretary, perform the duties and exercise
the powers of the Secretary and shall perform such other duties as may be
prescribed by the Board of Directors or the President.
Section 8. Treasurer. The Treasurer shall have the custody of all
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements of the Corporation, and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the President and directors, at the regular meetings of the Board or whenever
they may require it, an account of all his transactions as Treasurer and of
the financial condition of the Corporation, and shall perform such other
duties as may be prescribed by the Board of Directors or the President.
Section 9. Assistant Treasurers. Any Assistant Treasurer shall, in
the absence or disability of the Treasurer, perform the duties and exercise
the powers of the Treasurer and shall perform such other duties as may be
prescribed by the Board of Directors or the President.
ARTICLE VI
CERTIFICATES REPRESENTING SHARES
Section 1. Form of Certificates. The Corporation shall deliver
certificates representing all shares to which stockholders are entitled.
Certificates representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors and shall be numbered
consecutively and entered in the books of the Corporation as they are
issued. Each certificate shall state on the face thereof the holder's name,
the number, class of shares, and the par value of the shares or a statement
that the shares are without par value. They shall be signed by the President
or a Vice President, and by the Secretary or an Assistant Secretary, or the
Treasurer or an Assistant Treasurer, and may be sealed with the seal of the
Corporation or a facsimile thereof if the Corporation shall then have a seal.
If any certificate is countersigned by a transfer agent or registered by a
registrar, either of which is other than the Corporation or an employee of the
Corporation, the signatures of the Corporation's officers may be facsimiles.
In case any officer, transfer agent or registrar who has signed, or whose
facsimile signature has been placed on such certificate, shall cease to be
such officer, transfer agent or registrar, whether because of death,
resignation or otherwise, before such certificate has been delivered by the
Corporation or its agents, such certificate may nevertheless be issued and
delivered with the same effect as if he were such officer, transfer agent or
registrar at the date of issue.
Section 2. Lost Certificates. The Board of Directors may direct that
a new certificate be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate to
be lost, stolen or destroyed. When authorizing the issue of a new
certificate, the Board of Directors, in its discretion and as a condition
precedent to the issuance thereof, may require the owner of the lost, stolen
or destroyed certificate, or his legal representative, to advertise the same
in such manner as it shall require and/or give the Corporation a bond in such
form, in such sum, and with such surety or sureties as it may direct as
indemnity against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
Section 3. Transfer of Shares. Shares of stock of the Corporation
shall be transferrable in the manner prescribed by law and in these Bylaws.
Shares of stock shall be transferable only on the books of the Corporation by
the holder thereof in person or by his duly authorized attorney and, upon
surrender to the Corporation or to the transfer agent of the Corporation of a
certificate representing shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation or the transfer agent of the Corporation to issue a
new certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 4. Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether
or not it shall have express or other notice thereof, except as otherwise
provided by law.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the outstanding shares of the
Corporation may be declared by the Board of Directors at any regular or
special meeting, subject to the provisions of law and of the Certificate of
Incorporation. Dividends may be declared and paid in cash, in property, or in
shares of the Corporation, provided that all such declarations and payments of
dividends shall be in strict compliance with all applicable laws and the
Certificate of Incorporation. The Board of Directors may fix in advance a
record date for the purposes of determining stockholders entitled to receive
payment of any dividend, such record date to be not more than 60 days prior to
the payment date of such dividend, or the Board of Directors may close the
stock ledger for such purpose for a period of not more than 60 days prior to
the payment date of such dividend. If the stock transfer books are not closed
and no record date is fixed by the Board of Directors, the date upon which the
Board of Directors adopts the resolution declaring such dividend shall be the
record date.
Section 2. Fiscal Year. The fiscal year of the Corporation shall be
the twelve-month period ending August 31 of each year unless otherwise fixed
by resolution of the Board of Directors.
Section 3. Seal. The Corporation shall have a seal and said seal may
be used by causing it or a facsimile thereof to be impressed or affixed or in
any manner reproduced. Any officer of the Corporation shall have authority to
affix the seal to any document requiring it.
Section 4. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contracts or execute
and deliver any instruments in the name of and on behalf of the Corporation,
and such authority may be general or confined to specific instances.
Section 5. Loans. No loans shall be contracted on behalf of the
Corporation, and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
ARTICLE VIII
Section 1. Power to Indemnify in Actions, Suits or Proceedings Other
Than Those by or in the Right of the Corporation. Subject to Section 3 of
this Article VIII, the Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or
in the Right of the Corporation. Subject to Section 3 of this Article VIII,
the Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a director or officer, of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification
under this Article VIII (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in
Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made (i) by the Board of Directors by a majority vote
of a quorum consisting of directors who were not parties to such action, suit
or proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders. To the
extent, however, that a director or officer of the Corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith, without the
necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination
under Section 3 of this Article VIII, a person shall be deemed to have acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation, or, with respect to any criminal
action or proceeding, to have had no reasonable cause to believe his conduct
was unlawful, if his action is based on the records or books of account of the
Corporation or another enterprise, or on information supplied to him by the
officers of the Corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Corporation or another enterprise. The term "another enterprise" as used
in this Section 4 of this Article VIII shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise
of which such person is or was serving at the request of the Corporation as a
director, officer, employee or agent. The provision of this Section 4 of this
Article VIII shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in Section 1 or Section 2 of this Article VIII,
as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under
Sections 1 and 2 of this Article VIII. The basis of such indemnification by a
court shall be a determination by such court that indemnification of the
director or officer is proper in the circumstances because he has met the
applicable standards of conduct set forth in Section 1 or Section 2 of this
Article VIII, as the case may be. Neither a contrary determination in the
specific case under Section 3 of this Article VIII nor the absence of any
determination thereunder shall be a defense to such application or create a
presumption that the director or officer seeking indemnification has not met
any applicable standard of conduct. Notice of any application for
indemnification pursuant to this Section 5 of this Article VIII shall be given
to the Corporation promptly upon the filing of such application. If
successful, in whole or in part, the director or officer seeking
indemnification shall also be entitled to be paid the expense of prosecuting
such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a
director or officer in defending or investigating a threatened or pending
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of any
undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to his Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any Bylaw, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of
any court of competent jurisdiction or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VIII shall be made to
the fullest extent permitted by law. The provisions of this Article VIII
shall not be deemed to preclude the indemnification of any person who is not
specified in Section 1 or Section 2 of this Article VIII but whom the
Corporation has the power or obligation to indemnify under the provisions of
the General Corporation Law of the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation would
have the power or the obligation to indemnify him against such liability under
the provisions of this Article VIII.
Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors and officers, so that any person who is or was a
director or officer of such constituent corporation, or is or was a director
or officer of such constituent corporation serving at the request of such
constituent corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, shall stand in the same position under the
provisions of this Article VIII with respect to the resulting or surviving
corporation as such indemnification relates to his acts while serving in any
of the foregoing capacities, of such constituent corporation, as he would have
with respect to such constituent corporation if its separate existence had
continued. For purposes of this Article VIII, references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests
of the Corporation" as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VIII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5 of
this Article VIII), the Corporation shall not be obligated to indemnify any
director or officer in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was
authorized or consented to by the Board of Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. These Bylaws may be altered, amended or
repealed and new Bylaws may be adopted by the Board of Directors at any
regular meeting or at any special meeting called for that purpose.
Section 2. When Bylaws Silent. It is expressly recognized that when
the Bylaws are silent as to the manner of performing any corporate function,
the provisions of Delaware law shall control.
Section 3. Entire Board of Directors. As used in this Article IX and
in these Bylaws generally, the term "entire Board of Directors" means the
total number of directors which the Corporation would have if there were no
vacancies.
Exhibit 10(j)
LUBY'S CAFETERIAS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
PREAMBLE
The principal objective of this supplemental Executive Retirement Plan (SERP)
is to ensure the payment of a competitive level of retirement income in order
to attract, retain and motivate selected executives. The plan is designed to
provide benefits in excess of the limitations under Section 415 and certain
other provisions of the Internal Revenue Code (the "Code"). The effective
date of this plan is December 31, 1995.
SECTION I
DEFINITIONS
1.1 "Accrued Benefit" means a monthly benefit payable as a Life Annuity
equal to 50% of Final Average Compensation offset by (1) Primary Social
Security, (2) the Annuitized Value of the Profit Sharing Plan and (3) the
Annuitized Value of any Deferred Compensation Agreement divided by twelve.
The net benefit is prorated by Service less than 25 years.
1.2 "Actuarial Equivalent" means a benefit of equivalent value based on
the 1983 Group Annuity Mortality Table (50% Male - 50% Female) and 8.5% annual
rate of interest.
1.3 "Affiliate" means any corporation, partnership, joint venture, trust,
association or other business enterprise which is a member of a controlled
group of corporations or a member of an affiliated service group (as defined
in Section 414 of the Code) which includes the Employer.
1.4 "Annuitized Value of Deferred Compensation Agreement" means the
Participant's deferred compensation value multiplied by a 10-year installment
factor divided by an Actuarial Equivalent life annuity factor.
1.5 "Annuitized Value of Profit Sharing Plan" means the Participant's
account balance in the Profit Sharing Plan including cash surrender value at
date of termination or Retirement, increased at 8.5% interest to Retirement,
divided by an Actuarial Equivalent life annuity factor.
1.6 "Beneficiary" means the person(s) designated by the Participant who is
entitled to receive benefits upon the death of the Participant.
1.7 "Board of Directors" means the board of directors, the executive
committee or other body given management responsibility for the Employer.
1.8 "Committee" means the Compensation Committee appointed by the Board of
Directors of the Employer, which has been given authority by the Board of
Directors to administer this Plan.
1.9 "Compensation" means compensation (whether or not payment is deferred)
earned by a Participant and shall include the Participant's wages, salaries,
fees for professional service and other amounts for personal services actually
rendered in the course of employment with an Employer maintaining the Plan
(including, but not limited to, commissions paid salespersons, compensation for
service on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). Compensation for this purpose does not include
reimbursement for expenses.
1.10 "Contingent Annuitant" means the Participant's spouse designated to
receive any payments due after the death of the Participant under the Joint
and Survivor Annuity forms of payment.
1.11 "Effective Date" means the effective date of the Plan, December 31,
1995.
1.12 "Employer" means Luby's Cafeterias, Inc.
1.13 "Final Average Compensation" means the average of the last five
calendar years of Compensation immediately prior to termination of employment.
1.14 "Joint and Survivor Annuity" means either the Joint and 50% Survivor
Annuity or the Joint and 100% Survivor Annuity described in Section III of
this Plan.
1.15 "Life Annuity" means an annuity payable for the life of the
Participant, with no monthly payments made thereafter.
1.16 "Participant" means an employee of the Employer who is an Officer or
Area Vice President who has been named by the Committee as eligible to
participate in this Plan.
1.17 "Plan" means Luby's Cafeterias, Inc. Supplemental Executive Retirement
Plan.
1.18 "Plan Year" means any twelve month period beginning on September 1st
and ending on the last day of August.
1.19 "Primary Social Security" means the actual Social Security Benefit
paid to the Participant at initial retirement.
1.20 "Profit Sharing Plan" means the Luby's Cafeterias, Inc. Profit Sharing
and Retirement Trust.
1.21 "Rabbi Trust" means the Trust under the Luby's Cafeterias, Inc.
Supplemental Executive Retirement Plan which may be established by the
Employer to provide itself with a source of funds to assist in the meeting of
its liabilities under the Plan.
1.22 "Retirement" means a Participant's actual retirement from the Employer
following his or her Normal, Early or Delayed Retirement Date.
1.23 "Service" means a Participant's total completed years and months of
employment whether or not continuous.
1.24 "Vesting" means ownership. A Participant's Accrued Benefit becomes
100% vested upon attainment of age 65. There is no vesting prior to age 65
unless approved by the Board of Directors.
SECTION II
ELIGIBILITY FOR BENEFITS
In accordance with the distribution provision contained in Section III of the
Plan, each Participant is eligible to receive an Accrued Benefit under this
Plan upon attainment of Normal Retirement Date, Delayed Retirement Date or
Early Retirement Date (as each is defined in this Section II).
2.2 "Normal Retirement Date" means the December 31 following the date the
Participant attains age 65 and completes five years of Service.
2.3 "Early Retirement Date" means, at the discretion of the Board, the
first day of the month on or after the Participant attains age 55, or any
subsequent month thereafter.
2.4 "Delayed Retirement Date" means the first day of the month on or after
the Participant's Normal Retirement Date and retirement from the Employer.
SECTION III
FORM OF RETIREMENT BENEFIT
3.1 By a Participant's 64th birthday, a Participant shall elect to have
his or her Accrued Benefit payable in the normal form of payment, a Life
Annuity as defined in Section 1.15, or under one of the optional forms of
payment as defined in Sections 3.6 or 3.7. The optional forms of payment
defined in Sections 3.4 and 3.5 will not automatically be available to
Participants but will be offered at the discretion of the Board of Directors.
All optional forms of payment are the Actuarial Equivalent of the Accrued
Benefit payable as a Life Annuity. All benefit payments will commence on the
first day of the month on or after the date the Participant is eligible to
receive payment. If an election is not made at least one year prior to
commencement of benefit, a married Participant shall be deemed to have elected
a Joint and 50% Survivor Annuity and a Participant who is not married shall be
deemed to have elected a Life Annuity. However, Participants who are already
at age 64 or older as of the effective date of the Plan will be allowed to
make an election as soon as administratively feasible after Plan
implementation, but no later than August 1, 1996.
3.2 The monthly benefit payable at an Early Retirement Date will equal the
Actuarial Equivalent of the Accrued Benefit determined under Section 1.1 with
the Primary Social Security offset delayed until age 62.
3.3 The monthly benefit payable at a Delayed Retirement Date will be equal
to the Accrued Benefit determined under Section 1.1 based on the Participant's
Delayed Retirement Date.
3.4 "Five Years Certain Annuity" means a modified monthly income payable
for a five year period. In the event of the Participant's death within the
five year period following the date payments start, the same income will be
payable to the Participant's Beneficiary for the remainder of the five year
period.
3.5 "Ten Years Certain Annuity" means a modified monthly income payable
for a ten year period. In the event of the Participant's death within the ten
year period following the date payments start, the same income will be payable
to the Participant's Beneficiary for the remainder of the ten year period.
3.6 "Joint and 50% Survivor Annuity" means a modified monthly income
payable for the Participant's lifetime. At the Participant's death, 50% of
such amount is continue to the Participant's Contingent Annuitant for his or
her lifetime.
3.7 "Joint and 100% Survivor Annuity" means a modified monthly income
payable for the Participant's lifetime. At the Participant's death, 100% of
such amount is continued to the Participant's Contingent Annuitant for his or
her lifetime.
3.8 "Small Lump Sum Payment" means a single lump sum payment in lieu of
annuity payments. This option will be payable at the discretion of the Board
of Directors in cases where the amount of the monthly benefit otherwise
payable is less than $100.
SECTION IV
DEATH BENEFITS
4.1 If a Participant dies before attaining age 55, no death benefit shall
be payable under the Plan.
4.2 If a Participant dies after attaining age 55 but prior to his or her
Normal Retirement Date, at the discretion of the Board, the Participant's
surviving spouse may be paid the 50% survivor benefit that would have been
payable if the Participant had retired, elected a Joint and 50% Survivor
Annuity, and commenced payments on the first of the month immediately prior to
the date of death. If the Participant dies after his or her Normal Retirement
Date but before commencement of benefits, the Particpant's surviving spouse
will be paid the 50% survivor benefit under the Joint and 50% Survivor
Annuity commencing on the first day of the month following the date of the
Participant's death. There is no death benefit if the Participant is not
married and had not commenced benefit payments at the time of death.
4.3 If a Participant dies after commencement of benefits, the death
benefit, if any, is dependent on the form of payment elected.
SECTION V
ADMINISTRATION
5.1 The Committee will be appointed by the Board of Directors of the
Employer. Each Committee member will serve until his or her resignation or
removal. The Board of Directors of the Employer will have the sole discretion
to remove any one or more Committee members and appoint one or more replacement
or additional Committee members from time to time.
5.2 The Committee will select from among its members a chairman who will
preside at all of its meetings and will elect a secretary without regard to
whether that person is a member of the Committee. The secretary will keep all
records, documents and data pertaining to the Committee's supervision and
administration of the Plan. A majority of the members of the Committee will
constitute a quorum for the transaction of business and the vote of a majority
of the members present at any meeting will decide any questions brought before
the meeting. In addition, the Committee may decide any question by vote,
taken without a meeting, of a majority of its members. A member of the
Committee who is also a Participant will not vote or act on any matter
relating solely to himself.
5.3 The Committee will have the exclusive responsibility for the general
administration of the Plan according to the terms and provisions of the Plan
and will have all poers necessary to accomplish those purposes, including but
not by way of limitation the right, power and authority:
A. to make rules and regulations for the administration of the Plan
which are not inconsistent with its terms and provisions;
B. to construe all terms, provisions, conditions and limitations of the
Plan and its construction of the Plan made in good faith and without
discrimination in favor of or against any Participant will be final as to all
parties;
C. to determine whether a Change In Control has occurred;
D. to correct any defect, supply any omission or reconcile any
inconsistency that may appear in the Plan in the manner and to the extent it
deems expedient to carry the Plan into effect for the greatest benefit of all
parties at interest and its judgment in those matters will be final as to all
parties;
E. to determine all controversies relating to the administration of the
Plan, including but limited to:
(1) differences of opinion arising between the Employer and a
Participant except when the difference of opinion relates to the
entitlement to, the amount of, or the method or timing of a
benefit affected by a Change in Control, in which event, it
shall be decided by judicial action; and
(2) any question it deems advisable to determine in order to promote
the uniform administration of the Plan for the benefits of all
parties at interest; and
F. to delegate by written notice those clerical and recordation duties
of the Committee, as it deems necessary or advisable for the proper and
efficient administration of the Plan.
5.4 The Committee will be reimbursed by the Employer for all expenses
properly and actually incurred in the performance of their duties under
the Plan.
5.5 The Committee, in exercising any power or authority granted under
this Plan or in making any determination under this Plan shall perform or
refrain from performing those actions using its sole discretion and judgment.
Any decision made by the Committee or any refraining to act or any act taken
by the Committee in good faith shall be final and binding on all parties.
The Committee's decision shall never be subject to de novo review.
Notwithstanding the foregoing, the Committee's decisions, refraining
to act, or acting is to be subject to judicial review for those incidents
occurring during the Plan Year in which a Change In Control occurs and during
the Plan Year following a Change in Control.
SECTION VI
MISCELLANEOUS
6.1 The Board of Directors may, in its sole discretion, terminate, suspend
or amend this Plan at any time or from time to time, in whole or in part.
However, no amendment or suspension of the Plan will affect a Participant's
right or the right of a Beneficiary to the Accrued Benefit calculated as of
the date of termination or amendment unless with the written consent of the
Participant or the Beneficiary. Further, no amendment will affect a
Participant's rights under any provision relating to a Change In Control
after a Change In Control has previously occurred without his or her consent.
6.2 Nothing contained herein will confer upon any Participant the right
to be retained in the service of the Employer, nor will it interfere with the
right of the Employer to discharge or otherwise deal with Participants
without regard to the existence of this Plan, nor shall it give a Participant
or any person claiming through him any interest or right under this Plan
other than that of any unsecured general creditor of the Employer.
6.3 This Plan is unfunded, and the Employer will make Plan benefit
payments solely on a current disbursement basis. However, the Employer
may establish a Rabbi Trust to invest assets to be held by an independent
trustee. It is also specifically recognized by both the Employer and the
Participants that this Plan is only a general corporate commitment and
that each Participant must rely upon the general credit of the Employer
for the fulfillment of its obligations hereunder.
6.4 To the maximum extent permitted by law, no benefit under this Plan
shall be assignable or subject to any manner to alienation, sale, transfer,
claims of creditors, pledge, attachment, or encumbrances of any kind. If
any Participant, spouse, or Beneficiary becomes bankrupt or attempts to
alienate, anticipate, sell, assign, pledge, or encumber any right or benefit
under this Plan, that right or benefit will, in the discretion of the
Committee, cease.
6.5 The Committee may adopt rules and regulations to assist in the
administration of the Plan.
6.6 The Committee will furnish information to the Employer concerning
the amount and form of distribution to any Participant entitled to a
distribution so that the Employer may make or cause the Rabbi Trust
to make the distribution required. It will also calculate the deductions
from the amount of the benefit paid under the Plan for any taxes required
to be withheld by federal, state, or local government and will cause them
to be withheld.
6.7 Should a Participant become incompetent or should a Participant
designate a Beneficiary who is a minor or incompetent, the Committee is
authorized to pay the funds due to the parent of the minor or to the guardian
of the minor or incompetent or directly to the minor or to apply those
funds for the benefit of the minor or incompetent in any manner the
Committee determines in its sole discretion.
6.8 The Committee will not be liable for any decision or action taken in
good faith in connection with the administration of this Plan. Without
limiting the generality of the foregoing, any decision or action taken by
the Committee when it relies upon information supplied it by any officer
of the Employer, the Employer's legal counsel, the Employer's actuary, the
Employer's independent accountants or other advisors in connection with the
administration of this Plan will be deemed to have been taken in good faith.
6.9 If any term, provision, covenant, or condition of the Plan is held
to be invalid, void, or otherwise unenforceable, the rest of the Plan
will remain in full force and effect and will in no way be affected,
impaired, or invalidated.
6.10 Any notice or filing required or permitted to be given to the
Committee or a Participant will be sufficient if in writing and hand delivered
or sent by U.S. mail to the principal office of the Employer or to the
residential mailing address of the Participant. Notice will be deemed to
be given as of the date of hand delivery or if delivery is by mail,
as of the date shown on the postmark.
6.11 This Plan is established under and will be construed according to
the laws of the State of Texas.
6.12 Vesting in Accrued Benefits In Event of Change In Control or
Termination of the Plan.
A. Notwithstanding any other provisions of the Plan, in the event
of Change in Control (as hereinafter defined) or termination of the
Plan, the Accrued Benefit of all actively employed Participants
shall become fully vested.
B. For purposes of this Section 6.12, a Change In Control shall
occur if any one of the four following events occur:
(1) any "person," including a "syndication" or "group"
as those terms are used in Section 13(d)(3) of the Securities
Exchange Act of 1934, is or becomes the beneficial owner,
directly or indirectly, or securities of the Employer
representing 40% or more of the combined voting power of
the Employer's then outstanding voting securities;
(2) the Employer is merged or consolidated with another
corporation and immediately after giving effect to the merger
or consolidation less than 80% of the outstanding voting
securities of the surviving or resulting entity are then
beneficially owned in the aggregate by (i) the stockholders of
the Employer immediately prior to such merger or consolidation,
or (ii) if a record date has been set to determine the
stockholders of the Employer entitled to vote on such merger
or consolidation, the stockholders of the Employer as of such
record date;
(3) if at any time during a calendar year a majority of the
directors of the Employer are not persons who were directors at
the beginning of the calendar year (unless the lack of majority
is the result of the death of one or more directors);
(4) the Employer transfers substantially all of its assets to
another corporation which is a less than 80% owned subsidiary of
the Employer.
C. The provisions of this Section 6.12 may not be amended after the
date a Change In Control occurs without the written consent of a
majority in number of Participants and Beneficiaries. The Board of
Directors reserves the right to amend or eliminate this Section 6.12
prior to the date a Change In Control occurs.
D. In the event of a Change In Control, a contribution shall be made
to the Rabbi Trust to fully fund the Actuarial Equivalent value of
all Accrued Benefits.
EXECUTED this 30th day of May, 1996.
ATTEST: LUBY'S CAFETERIAS, INC.
DEBRA L. WAINSCOTT By: JOHN E. CURTIS, JR.
________________________________ _____________________________
Title: President
<PAGE>
Exhibit 10(k)
LUBY'S CAFETERIAS, INC.
WELFARE BENEFIT PLAN TRUST
This Agreement made and entered into by and between Luby's Cafeterias,
Inc., a corporation, and John E. Curtis, Jr., an individual, as trustee.
W I T N E S S E T H:
WHEREAS, Luby's Cafeterias, Inc. (hereinafter sometimes referred to as
the "Company") has previously adopted an employee welfare benefit plan known
as the Luby's Cafeterias, Inc. Welfare Benefit Plan which provides group
medical benefits for the exclusive benefit of its eligible employees and the
eligible dependents thereof (hereinafter referred to as the "Plan"); and
WHEREAS, the Company desires to establish the trust embodied herein and
to designate it as a part of the Luby's Cafeterias, Inc. Welfare Benefit
Plan, so as to comply with applicable provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA");
NOW, THEREFORE, in consideration of the mutual undertakings of each of
the parties hereto, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used herein the words and phrases next below set out shall have the
meaning next below attributed to them unless the context in which such word
or phrase appears reasonably requires a broader, narrower or different
meaning.
1.1. "Company" shall mean Luby's Cafeterias, Inc. Welfare Benefit
Plan or any successor thereof which shall adopt and continue the Plan and
Trust.
1.2. "Contract" or "Contracts" shall mean all insurance contracts in
place under the Plan from time to time.
1.3. "Effective Date" shall mean the effective date of this Trust,
which date shall be July 18, 1996.
1.4. "Employer" shall mean the Company and any other entity which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) or which is a trade or business (whether or not
incorporated) which is under common control (within the meaning of
Section 414(c) of the Code).
1.5. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.6. "Member" shall mean any individual who meets the eligibility
requirements set forth in the Plan, as it may be amended from time to time.
1.7. "Plan" shall mean Luby's Cafeterias, Inc. Welfare Benefit Plan,
as amended from time to time, which shall be set forth in a separate Plan
document, but is incorporated herein for all purposes.
1.8. "Plan Administrator" shall mean the Company, unless another
entity or person is appointed by the Company to administer the Plan pursuant
to the terms of the Plan.
1.9. "Trust" or "Trust Fund" shall mean all cash, fixed income
investments, money market instruments and other properties actually held by
the Trustee pursuant to the provisions of this agreement.
1.10. "Trustee" shall mean the qualified and acting Trustee under this
agreement whether it be one or several individuals or a corporate institution
or any successor Trustee appointed by the Board of Directors of the Company
in accordance with applicable provisions of this Trust agreement.
1.11. "Trust Year" shall mean initially the year beginning on the
Effective Date and ending August 31, 1996. Thereafter, the Trust Year shall
commence on September 1 and end on the following August 31 of the following
calendar year. Unless otherwise provided in the Plan, the Plan year shall
correspond with the Trust Year.
ARTICLE II
ESTABLISHMENT OF TRUST
2.1. A Trust is hereby established by the Company and the Trustee for
the sole purpose of creating a fund to provide for the payment of medical,
and other related benefits to Members (and their dependents who are eligible
to receive benefits under the Plan).
ARTICLE III
ADOPTION BY EMPLOYERS
3.1. Any business organization which is a member of the Company's
controlled group of corporations or is under common control (as defined in
Section 1.4 hereof) and which obtains the consent and approval of the Board
of Directors of the Company and which by a resolution of its Board of
Directors (or equivalent governing authority) elects to participate herein
and make contributions hereto shall be deemed to have adopted the Plan and
this Trust agreement and agreed to be bound by all the terms, provisions,
conditions and limitations of the Plan and this Trust agreement, a copy of
which resolution shall be certified and deposited with the Trustee.
3.2. Neither the adoption of this Trust agreement by any such
Employer nor any act performed by it in relation to this Trust shall ever
create a joint venture or partnership relationship between it and any other
Employer.
ARTICLE IV
CONTRIBUTIONS
4.1. At such time or times and in such manner as shall be determined
by the Plan Administrator, each Employer shall contribute in cash to the
Trust such sums as it receives from time to time as refunds from any premium
stabilization reserves under any Contracts.
ARTICLE V
DIVISION OF RESPONSIBILITY
5.1. The Trustee shall be a fiduciary with respect to the Trust and
except as otherwise provided herein shall have the exclusive responsibility
for the Trust Fund and all the powers necessary to receive, hold, preserve,
manage, invest and reinvest the Trust Fund as provided generally in this
Trust agreement and to pay all costs and expenses incident thereto. The
Trustee shall be responsible only for such sums actually received by it as
Trustee and shall not be responsible for collecting any contributions from
any Employer.
5.2. The Plan Administrator shall be charged with the administration
of the Plan and shall decide, subject to the terms of the Plan, all questions
pertaining to its administration, interpretation and application. In this
regard it is contemplated that the Plan Administrator may delegate portions
of its ministerial functions to a third-party administrator provided that any
such arrangement shall comply with the applicable provisions of Part 4 of
Subtitle B of Title I of ERISA and further provided that the Plan
Administrator shall always retain the ultimate control of and the
responsibility for the administration of the Plan. The Trustee shall not be
responsible for or in any way concerned with the administration of the Plan.
5.3. Any investment manager employed by the Plan Administrator is
hereby expressly given the power to direct the Trustee with respect to the
management, investment and reinvestment of the Trust Fund. If at any time
and from time to time, any such investment manager, as a co-fiduciary,
exercises its power (given under the Plan and this Trust) by written notice
to the Trustee, to direct the Trustee in the management, investment and
reinvestment of the Trust Fund, the Trustee shall be subject to all proper
written directions of such investment manager provided that such direction(s)
are made in accordance with the terms of this agreement and ERISA.
ARTICLE VI
THE POWERS, DUTIES AND RESPONSIBILITIES
OF THE TRUSTEE
6.1. The Trustee is authorized and empowered to invest or reinvest
only in fixed income investments in the form of marketable debt issues with
remaining maturities of not more than five years. These would include but
not be limited to U.S. government and agency obligations, overnight and term
repurchase agreements, bankers acceptances, tax exempt instruments issued by
states, municipalities or similar agencies, or Euro dollar certificates of
deposit. Specifically precluded are investments in letter stock, short sale
contracts, investments in foreign companies not traded on principal
exchanges, commodities, foreign currencies and/or equity securities. When
investing in money market instruments, those instruments should be rated "A-
1" (as rated by Standard & Poor's) or "P-1" (as rated by Moody's) as defined
by recognized rating services or the equivalent for negotiable certificates
of deposit of the thirty largest banks in the United States, as measured by
assets. Money market fund investments should be invested in one of the
following categories: (i) primarily invested in government securities, (ii)
P-1 commercial paper or (iii) negotiable certificates of deposits of the
thirty largest banks in the United States.
Whenever the Trustee receives funds to be invested or determines that
assets in the Trust Fund should be sold and the proceeds held for a period of
time pending reinvestment or other purpose, such funds may be held uninvested
in cash or invested in short term investments such as certificates of deposit
with the Trustee, U. S. Treasury bills, savings accounts with the Trustee
commercial paper or other similar assets which may be offered by the Trustee
and as may be determined by the Trustee in its sole discretion, which assets
shall remain a part of the Trust Fund.
6.2. The Trustee shall have the following powers relating to the
receipt, preservation, management, investment and reinvestment of both
principal and income of this Trust, as it may be composed from time to time
in addition to all of the powers granted the Trustee under common law and the
laws of the state of the situs of the Trust and all other applicable
statutes:
(a) To handle, deal with and dispose of the property and
estate of the Trust Fund as if it were the simple fee owner of such
property and estate;
(b) To keep any and all property in the name of some other
person, partnership or corporation with a power of attorney for
transfer attached, or in its name without disclosing its fiduciary
capacity;
(c) To collect the principal and income of the Trust Fund as
the same may become due and payable and to give binding receipt
therefor;
(d) To take any action, whether by legal proceeding,
compromise, or otherwise, as the Trustee in its sole discretion deems
to be in the best interest of the Trust if there is a default in the
payment of any principal or income of the Trust at any time; and
(e) To invest, sell and reinvest the Trust assets in such
assets as it shall select within the permitted limits described in
Section 6.1.
The Trustee shall not be required to take any legal action to collect,
preserve or maintain any Trust property unless it has been indemnified either
by the Trust itself, with the approval of the Plan Administrator, or by the
Employer with respect to any expenses or losses to which it may be subjected
by taking such action. Any property acquired by the Trustee through the
enforcement or compromise of any claim or claims it has as Trustee of this
Trust will become a part of the Trust Fund.
6.3. The Trustee in discharging its duties with respect to the
management, investment and reinvestment of the Trust Fund shall do so solely
in the interest of the Members (and their eligible dependents), using the
care, skill, prudence and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character; shall
diversify the investments of the Trust so as to minimize the risk of large
losses unless under the circumstances it is clearly prudent not to do so; and
shall otherwise act in accordance with the provisions of this Trust agreement
and ERISA.
6.4. The Trustee shall have the following powers relating to payments
and distributions to be made from the Trust Fund:
(a) Upon direction of the Plan Administrator, to convey,
assign and deliver, upon full termination of the Plan and Trust, to
such persons as then shall be entitled thereto under the Plan and
Trust, the Trust Fund, or the net cash proceeds of the Trust Fund after
conversion of non cash assets into cash;
(b) To pay out of the Trust Fund the following: amounts due
and payable on any advance made by the Trustee or on any loan made by
anyone to the Trust Fund, and all taxes of any nature levied, assessed
or imposed upon the Trust Fund, reasonable expenses of the Trustee,
including counsel fees, and the Trustee's compensation as provided
herein;
(c) To make distributions out of the Trust Fund only to the
person or persons as directed by the Plan Administrator or any agent
appointed by the Plan Administrator. If such person or persons cannot
be found or the correct distributee cannot be ascertained, to hold such
payment or deposit same in a bank, including the Trustee, for the
credit of said person or persons without liability for interest
thereon. If any check or draft in payment of the benefit hereunder,
which has been mailed by regular U.S. mail to the last address of the
payee furnished the Trustee by the Plan Administrator is returned
unclaimed, the Trustee shall notify the Plan Administrator and shall
discontinue further payment efforts until it receives instructions from
the Plan Administrator. The Trustee shall not be required to make any
investigation to determine the whereabouts or mailing address of any
such person or persons. The Trustee may make payment of any benefit
hereunder by mailing its check or draft for the amount thereof to the
person certified to the Trustee by the Plan Administrator as the person
to whom such payment is to be made; and
6.5. All persons dealing with the Trustee are entitled to rely upon
the representations of the Trustee as to its authority and are released from
any duty to inquire into its authority for taking or omitting any action or
to verify that any money paid or other property delivered to the Trustee is
used by the Trustee for Trust purposes. Any action of the Trustee under this
Trust shall be conclusive evidence of the facts recited in it. All persons
shall be fully protected when acting or relying upon any notice, resolution,
instruction, direction, order, certificate, opinion, letter, telegram or
other document believed by such persons to be genuine, to have been signed by
the Trustee, and to be the act of the Trustee.
6.6. The Trustee may engage and consult with legal counsel of its
choice, who may be counsel for any Employer or Trustee's own general counsel,
with respect to the meaning or construction of the Plan, this Trust agreement
or the Trustee's obligations or duties hereunder.
6.7. The Trustee shall not be required to give bond or other security
for the faithful performance of its duties unless required by law which
cannot be waived; and the Trustee shall not be required to make any
inventory, return, or report of any kind to any court unless required by law
which cannot be waived.
ARTICLE VII
NOTICES AND DIRECTIONS
7.1. The Trustee shall not be bound by any certificate, notice,
resolution, consent, order, information or other communication unless and
until it shall have been received in writing at a location which is mutually
agreeable to the parties hereto.
7.2. The Trustee may accept as evidence of the authority of (i) any
persons acting as members of the Plan Administrator or (ii) the proper
representative(s) of the investment manager, if one is appointed, a copy of
a resolution of the Board of Directors of the Company as certified by the
Secretary or an Assistant Secretary together with a specimen signature of the
Plan Administrator members and/or the proper representative(s) of the
investment manager, if one is appointed, and shall be entitled to recognize
them as such and act upon the instructions, directions, consents, and
requests of the members of the Plan Administrator and/or the proper
representative(s) of any appointed investment manager last certified to it.
The Trustee may continue to act in accordance with any such notice until the
receipt by it of notice rescinding or superseding such action or resolution.
7.3. Instructions, directions or notices of the Plan Administrator
to the Trustee, certified to by any one or more members thereof shall be
accepted as conclusive evidence of the proper issuance and contents thereof.
7.4. The Trustee, in all matters pertaining to its management,
investment and distribution of this Trust, when it acts in good faith, may
rely upon any such notice, resolution, instruction, direction, order,
certificate, opinion, letter, telegram or other document believed by the
Trustee to be genuine, to have been signed by a proper representative of the
Plan Administrator (or the investment manager, if one is appointed) and to be
the act of the Plan Administrator or the investment manager, as the case may
be. It shall accept any certificate or other instrument duly signed by a
proper representative of the Plan Administrator or any duly appointed
investment manager which purports to evidence an instruction, direction, or
order of the Plan Administrator, or the investment manager, as the case may
be, as conclusive evidence thereof.
7.5. Notices or communications from the Trustee to the Plan
Administrator and/or any duly appointed investment manager shall be addressed
to such person or persons as shall have been certified to the Trustee by the
Plan Administrator and shall be sent to such person or persons at the
principal office of the Company unless the Trustee shall have been instructed
in writing to send such communications to another address.
ARTICLE VIII
TRUSTEE'S FEE AND EXPENSE
8.1. Any corporate Trustee hereunder shall receive fair and
reasonable compensation for services rendered in any amount not exceeding the
customary and prevailing charges for services of a similar character at the
time and at the place such services are performed. No individual Trustee
hereunder shall receive compensation for services rendered but, like any
corporate Trustee hereunder, shall be reimbursed for expenses properly and
actually incurred in the performance of its duties under the Plan and Trust.
The Trustee's compensation and the expenses of this Trust shall be paid by
the Employer unless an Employer elects to have the Trustee's compensation and
the expenses of the Trust paid out of its contribution to the Trust Fund.
Each Trust Year each Employer shall bear that portion of such compensation
and expense as the amount contributed to the Trust for such year on behalf of
Members employed by such Employer bears to the total amount contributed for
such year to the Trust on behalf of all Members employed by all participating
Employers.
ARTICLE IX
LIABILITY OF THE TRUSTEE
9.1. The Trustee shall not be liable to the Trust or to any person
having a beneficial interest in the Trust for any losses or decline in value
which may be incurred upon any investment of the Trust Fund, or for failure
of such Fund to produce any or greater earnings, interest, or profits, so
long as the Trustee acts in good faith and in accordance with the
responsibilities, obligations and duties placed on it under ERISA.
9.2. The Trustee shall not be liable for any act or omission by it
because of a direction of an investment manager appointed by the Plan
Administrator nor for any act or omission of the Plan Administrator, or an
investment manager appointed by the Plan Administrator or any other agent
appointed by the Plan Administrator except to the extent required by ERISA,
and any other applicable state or federal law, which liability cannot be
waived. When the Trustee has made any payment out of the Trust Fund in
accordance with the directions of the Plan Administrator or any agent
appointed by the Plan Administrator, it shall not be responsible for the
correctness of the amount of the payment to the recipient, or the method by
which it is paid. The Trustee shall also be protected in relying upon any
certificate, notice, resolution, consent, order, or other communication
purporting to have been signed on behalf of the Plan Administrator or an
investment manager appointed by the Plan Administrator which it believes to
be genuine, without any obligation on the part of the Trustee to ascertain
whether or not the provisions of the Plan are thereby being complied with.
9.3. The Trustee shall not be liable for any act or omission on its
own part except to the extent required by the terms of ERISA, and any other
state or federal law applicable, which liability cannot be waived.
9.4. The Trustee may, in its sole discretion withhold from
distribution all or any part of the Fund which the Trustee considers
necessary and proper for the payment of taxes under present or future laws,
which the Trustee is obligated to pay or withhold.
9.5. The Trustee shall not be liable for its failure or inability to
file any tax return or other report which it is unable to file because of the
failure of the Employer, after written demand by the Trustee, to furnish the
information necessary for the preparation thereof.
9.6. If at any time the Trustee is in doubt concerning the course
which it should follow in connection with any matter relating to the
administration of the Trust, it may request the Plan Administrator to advise
it with respect thereto and shall be protected in relying upon any written
advice or direction which may be given by the Plan Administrator in response
to such request.
9.7. Further, it is specifically provided that upon direction by the
Plan Administrator the Trustee may purchase out of the Trust Funds hereof
insurance for the Trustee and for the Trust Fund itself to cover liability
and losses occurring by reason of the act or omission of the Trustee provided
such insurance permits recourse by the insurer against the Trustee in the
case of a breach of fiduciary obligation by it.
ARTICLE X
SETTLEMENT OF THE ACCOUNTS
OF THE TRUSTEE
10.1. The Trustee shall keep such records as may be necessary in the
conduct of this Trust. The Trustee's books and records of the Trust Fund
shall be open to inspection by the Employer and the Plan Administrator at all
reasonable times during business hours of the Trustee.
10.2. All income, profits, recoveries, contributions, refunds, and any
and all monies, securities and properties of any kind at any time received or
held by the Trustee hereunder shall be held for investment purposes as a
commingled Trust Fund except as otherwise provided herein. Although separate
accounts or records may be maintained for operational and accounting
purposes, no such account or record shall be considered as segregating or
earmarking any specific assets of the Trust Fund from any other assets of the
commingled Trust Fund.
10.3. Within sixty (60) days after the close of each Trust Year and
such other times as requested in writing by the Plan Administrator and as of
the date of the removal or resignation of the Trustee, the Trustee shall
render to the Employer and the Plan Administrator an account and report of
the Trust Fund during such Trust Year or covering the period since the
previous account and report, whichever is applicable. The report shall
reflect the transactions for the period covered and shall reflect the cost of
assets and investments, and the fair market value thereof held in the Trust
as of the end of the Trust Year or such other date as is applicable. Said
report shall be open for inspection for ninety (90) days from date of receipt
by the Plan Administrator and Employer and if objections are not filed within
that period of time it shall be deemed to have been approved and shall
constitute a full and complete discharge and release to the Trustee from the
Employer and the Plan Administrator and all persons having or claiming any
interest in the Trust Fund.
ARTICLE XI
ACTION RESIGNATION, REMOVAL AND SUBSTITUTION
OF TRUSTEE
11.1. There shall be one (or more) individual(s) who serve(s) as
Trustee or one corporate Trustee, as determined from time to time by the
Board of Directors of the Company. When more than one individual serves as
Trustee, action by the individual trustees shall be determined by the
majority of the individual trustees. Such action shall be binding upon all
parties at interest. The individuals who collectively act as Trustee may act
by vote at a meeting or by writing without a meeting. Any act of the
individual or individuals serving as Trustee shall be sufficiently evidenced
if certified to by an individual Trustee, and, if there is more than one
individual serving as Trustee, one of the individual trustees may be given
authority to perform all administrative and ministerial duties. Any
individual who serves as Trustee hereunder shall be an employee of an
Employer. Each individual Trustee shall serve until a successor Trustee
shall be named by the Board of Directors of the Company or until his
resignation, death, incapacity or removal, in which event such Board of
Directors shall name a successor individual Trustee. An individual Trustee
otherwise eligible to participate in the Plan and Trust shall not be excluded
on the ground that he is an individual Trustee.
11.2. The Trustee or any successor Trustee may resign as Trustee
hereunder at any time by filing with the Company its written resignation. No
such resignation shall take effect until sixty (60) days from the date
thereof unless prior thereto a successor Trustee shall have been appointed
and accepted.
11.3. The Trustee or any successor Trustee may be removed by the
Company at any time. No such removal shall take effect until sixty (60) days
from the date that the notice in writing was delivered to the Trustee unless
prior thereto a successor Trustee shall have been appointed and accepted and
the Trustee consents to such earlier date.
11.4. Any vacancy in the office of Trustee created by the resignation
or removal of the Trustee shall not terminate the Trust. Upon removal or
resignation of the Trustee, the Board of Directors of the Company shall
appoint a successor Trustee.
11.5. The appointment of a successor Trustee hereunder shall be
accomplished by the delivery to the resigning or removed Trustee, as the case
may be, of an instrument in writing by the Company appointing such successor
Trustee, and its acceptance in writing of the appointment as successor
Trustee hereunder. Any successor Trustee hereunder shall be one or more
individuals who are employees of an Employer or a corporation authorized and
empowered to conduct a trust business in the state of the sinus of the Trust.
All of the provisions set forth herein with respect to the Trustee shall
relate to each successor Trustee.
11.6. Any successor Trustee, after acknowledging acceptance of this
Trust and accepting the Trust assets and the accounting of the retiring
Trustee, shall be vested with all the estates, titles, rights, powers,
duties, and discretions granted to the retiring Trustee. The retiring
Trustee shall execute and deliver all assignments or other instruments as may
be necessary or advisable in the discretion of the successor Trustee.
11.7. Any corporation into which any corporate Trustee or any
successor corporate Trustee may be merged or consolidated, or any corporation
resulting from any merger or consolidation to which any corporate Trustee or
any successor corporate Trustee may be a party, or any corporation to which
all or substantially all of the Trust business of any corporate Trustee or
any successor corporate Trustee may be transferred, shall be a successor of
such Trustee hereunder without the filing of any instrument or the
performance of any other act.
ARTICLE XII
AMENDMENT AND TERMINATION
12.1. Subject to the provisions of Article II, the Board of Directors
of the Company shall have the sole right (i) to amend the Plan and (ii) to
amend this Trust with the consent of the Trustee. Any amendment shall be
made by a certified copy of a resolution of the Board of Directors of the
Company setting forth the nature of the amendment and its effective date and,
in the event of an amendment of the Trust, a written consent of the Trustee.
In the event of an amendment, each other Employer will be deemed to have
consented to and adopted the amendment unless an Employer notifies the Plan
Administrator and the Trustee to the contrary in writing within thirty (30)
days after receipt of a copy of the amendment, in which case the rejection
will constitute a withdrawal from the Plan and this Trust by that Employer.
12.2. The Company shall make such amendments to this Trust as may be
necessary to maintain compliance with the various federal and state laws and
all such amendments may be made retroactively.
12.3. An Employer may withdraw from this Trust either by rejecting an
amendment to the Plan or this Trust or by giving written notice of its intent
to withdraw to the Company, the Plan Administrator and the Trustee. The Plan
Administrator will then determine, within sixty (60) days following the
receipt of the rejection or notice, the portion of the Trust Fund that is
attributable to the Members employed by the withdrawing Employer and shall
forward a copy of the determination to the Trustee. Upon receipt of the
determination, the Trustee will immediately segregate those assets
attributable to the Members employed by the withdrawing Employer and will
transfer those assets to the successor Trustee or Trustees when it receives
a designation of such successor from the withdrawing Employer.
The determination of the Plan Administrator, in its sole discretion, of
the portion of the Trust Fund that is attributable to the Members employed by
the withdrawing Employer will be final and binding upon all parties at
interest; and, the Trustee's transfer of those assets to the designated
successor Trustee shall relieve the Trustee of any further obligation,
liability or duty to the withdrawing Employer, the Members employed by that
Employer and the successor Trustee or Trustees.
12.4. Any Employer may terminate this Trust with respect to itself by
executing and delivering to the Trustee a notice of termination which
specifies the date on which the Plan and Trust shall terminate. Likewise,
this Trust will automatically terminate with respect to any Employer upon the
adjudication of that Employer as a bankrupt, the general assignment by that
Employer to or for the benefit of its creditors, or the dissolution of that
Employer without a successor. Upon the termination of this Trust by any
Employer, the Trustee shall thereupon use and apply the Trust Fund for the
payment of all obligations of the Trust which are incurred on behalf of the
terminating Employer. Except as otherwise provided herein, remaining funds
shall be used and applied by the Trustee, as directed by the Plan
Administrator, to provide additional benefits of the kind and type described
in Article II hereof to the Members then participating hereunder or for such
other similar or related purposes.
The termination of this Trust as to any one or more Employers will not
constitute a termination of this Trust with respect to the other remaining
Employers.
12.5. This Trust will not automatically terminate with respect to an
Employer in the event it consolidates, merges, and is not the surviving
corporation, sells substantially all of its assets, is a party to a
reorganization and its Employees and substantially all of its assets are
transferred to another entity, liquidates or dissolves if there is a
successor corporation which is a member of the Company's controlled group of
corporations, or under common control (as set forth in Section 1.4 herein).
Instead, such resulting successor corporation may continue this Trust by
adopting a resolution providing for the continuance of the Trust simultaneous
with or within one year after such consolidation, merger, sale,
reorganization, liquidation or dissolution. If, after the one year period
such successor corporation has not adopted this Trust, this Trust will then
automatically terminate with respect to such successor corporation on the
first day next following the one year period and the Trust will be handled as
provided above in Section 12.4.
ARTICLE XIII
MISCELLANEOUS
13.1. The adoption and maintenance of this Trust shall not be deemed
to be a contract between any Employer and its employees which gives any
employee the right to be retained in the employment of any Employer; to
interfere with the rights of any Employer to discharge any employee at any
time; or to interfere with the employee's right to terminate his employment
at any time.
13.2. No benefit payable or to become payable from this Trust will be
subject: to anticipation or assignment by any Member or other person
entitled to receive benefits under the Plan and Trust; to attachment by,
interference with, or control of any creditor of a Member or other person
entitled to receive benefits under the Plan and Trust; or to being taken or
reached by any legal or equitable process in satisfaction of any debt or
liability of a Member prior to its actual receipt by such Member. Any
attempted conveyance, transfer, assignment, mortgage, pledge, or encumbrance
is intended to take place or become effective before or after any
distribution of trust assets or the termination of this Trust Fund, itself.
And, the Trustee will never under any circumstances be required to recognize
any conveyance, transfer, assignment, mortgage, pledge or encumbrance by a
Member or other person entitled to receive benefits under the Plan and Trust
of the Trust Fund, any part of it, or any interest in it, or to pay any money
or thing of value to any creditor or assignee of a Member or other person
entitled to receive benefits under the Plan and Trust for any cause
whatsoever.
13.3. Whenever the context requires such, words of the masculine
gender used herein shall include the feminine and the neuter; and words used
in the singular shall include the plural.
13.4. The provisions of this Trust shall be construed, according to
the laws of the State of Texas. The Trustee or any Employer may at any time
initiate a legal action or proceeding for the settlement of the account of
the Trustee, or for the determination of any question or for instructions.
The only necessary parties to any such action or proceeding are the Trustee
and the Employer concerned; however, any other person or persons may be
included as parties defendant at the election of the Trustee and the
Employer.
13.5. Each provision of this Trust is severable and if any provision
is found to be void or against public policy, it shall not affect the
validity of any other provision hereof.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
agreement to be executed this 18th day of July, 1996.
Luby's Cafeterias, Inc.
By: JOHN E. CURTIS, JR.
________________________________________
Title: President
______________________________________
ATTEST:
SUSAN L. BEGGS
_____________________________________________________
Title: Assistant Secretary
______________________________________________
JOHN E. CURTIS, JR.
_______________________________________________
John E. Curtis, Jr.
TRUSTEE
Exhibit 11
COMPUTATION OF PER SHARE EARNINGS
The following is a computation of the weighted average number of shares
outstanding which is used in the computation of per share earnings for Luby's
Cafeterias, Inc. for the three and twelve months ended August 31, 1996 and
1995.
Three months ended August 31, 1996:
24,125,505 x shares outstanding for 30 days $ 723,765,150
24,125,419 x shares outstanding for 31 days 747,887,989
24,072,780 x shares outstanding for 31 days 746,256,180
______________
2,217,909,319
Divided by number of days in the period 92
______________
24,107,710
Twelve months ended August 31, 1996:
23,313,132 x shares outstanding for 21 days 489,575,772
23,315,089 x shares outstanding for 21 days 489,616,869
23,320,721 x shares outstanding for 18 days 419,772,978
23,331,311 x shares outstanding for 8 days 186,650,488
23,334,503 x shares outstanding for 23 days 536,693,569
23,340,118 x shares outstanding for 11 days 256,741,298
23,345,163 x shares outstanding for 21 days 490,248,423
22,398,704 x shares outstanding for 30 days 701,961,120
23,529,859 x shares outstanding for 13 days 305,888,167
23,590,511 x shares outstanding for 16 days 377,448,176
23,693,381 x shares outstanding for 31 days 734,494,811
23,925,105 x shares outstanding for 30 days 717,753,150
24,043,597 x shares outstanding for 31 days 745,351,507
24,125,505 x shares outstanding for 30 days 723,765,150
24,125,419 x shares outstanding for 31 days 747,887,989
24,072,780 x shares outstanding for 31 days 746,256,180
_______________
8,670,105,647
Divided by number of days in the period 366
______________
23,688,813
Three months ended August 31, 1995:
23,310,232 x shares outstanding for 26 days 606,066,032
23,310,732 x shares outstanding for 38 days 885,807,816
23,311,932 x shares outstanding for 4 days 93,247,728
23,313,132 x shares outstanding for 24 days 559,515,168
______________
2,144,636,744
Divided by the number of days in the period 92
______________
23,311,269
Twelve months ended August 31, 1995:
25,074,982 x shares outstanding for 18 days 451,349,676
24,941,910 x shares outstanding for 12 days 299,302,920
24,934,917 x shares outstanding for 16 days 398,958,672
24,713,278 x shares outstanding for 15 days 370,699,170
24,520,641 x shares outstanding for 17 days 416,850,897
24,416,386 x shares outstanding for 13 days 317,413,018
24,383,698 x shares outstanding for 14 days 341,371,772
24,270,808 x shares outstanding for 20 days 485,416,160
24,189,103 x shares outstanding for 28 days 677,294,884
23,851,100 x shares outstanding for 28 days 667,830,800
23,660,154 x shares outstanding for 14 days 331,242,156
23,575,659 x shares outstanding for 17 days 400,786,203
23,424,790 x shares outstanding for 12 days 281,097,480
23,310,232 x shares outstanding for 75 days 1,748,267,400
23,310,732 x shares outstanding for 38 days 885,807,816
23,311,932 x shares outstanding for 4 days 93,247,728
23,313,132 x shares outstanding for 24 days 559,515,168
_____________
8,726,451,920
Divided by the number of days in the period 365
_____________
23,908,087
Exhibit 21
SUBSIDIARIES OF LUBY'S CAFETERIAS, INC.
L & W Seafood, Inc., a Delaware corporation (owned 80% by Luby's Cafeterias,
Inc.)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<CASH> 2,687
<SECURITIES> 0
<RECEIVABLES> 541
<ALLOWANCES> 0
<INVENTORY> 4,517
<CURRENT-ASSETS> 11,358
<PP&E> 458,463
<DEPRECIATION> 146,874
<TOTAL-ASSETS> 335,290
<CURRENT-LIABILITIES> 46,454
<BONDS> 0
<COMMON> 8,769
0
0
<OTHER-SE> 216,904<F1>
<TOTAL-LIABILITY-AND-EQUITY> 335,290
<SALES> 450,128
<TOTAL-REVENUES> 450,128
<CGS> 234,341
<TOTAL-COSTS> 234,341
<OTHER-EXPENSES> 132,595
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,130
<INCOME-PRETAX> 62,542
<INCOME-TAX> 23,334
<INCOME-CONTINUING> 39,208
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,208
<EPS-PRIMARY> 1.66
<EPS-DILUTED> 1.66
<FN>
<F1>Other stockholders' equity amount is less cost of treasury stock of
$77,415.
</FN>
</TABLE>
Exhibit 99(a)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-36791) pertaining to the Luby's Cafeterias, Inc. Management
Incentive Stock Plan and (Form S-8 No. 33-10559) pertaining to the Luby's
Cafeterias, Inc. Performance Unit Plan of our report dated October 1, 1996,
with respect to the financial statements of Luby's Cafeterias, Inc.
incorporated by reference in the Annual Report (Form 10-K) for the year
ended August 31, 1996.
ERNST & YOUNG LLP
San Antonio, Texas
November 25, 1996
