SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. )
Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only [as permitted by Rule 14a-
6(e)(2)]
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
LUBY'S CAFETERIAS, INC.
_____________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
_____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ________________________________________
2) Form, Schedule or Registration Statement No.:
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<PAGE>
December 1, 1997
Dear Shareholders:
You are cordially invited to attend the 1998 Annual Meeting of Shareholders of
Luby's Cafeterias, Inc. to be held on Friday, January 9, 1998, at 10:00 a.m.,
at the Omni San Antonio Hotel, 9821 Colonnade Blvd., San Antonio, Texas. We
hope that you will be able to attend the meeting. Matters on which action
will be taken at the meeting are explained in detail in the notice and proxy
statement following this letter.
We hope as many of you as possible will attend the meeting in person. Whether
or not you expect to be present and regardless of the number of shares you
own, please mark, sign, and mail the enclosed proxy in the envelope provided.
Sincerely,
BARRY J.C. PARKER
__________________________
Barry J.C. Parker
President and
Chief Executive Officer
DAVID B. DAVISS
__________________________
David B. Daviss
Chairman of the Board
<PAGE>
LUBY'S CAFETERIAS, INC.
2211 Northeast Loop 410
P. O. Box 33069
San Antonio, Texas 78265-3069
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 9, 1998
To the Shareholders of
LUBY'S CAFETERIAS, INC.
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders of
Luby's Cafeterias, Inc., a Delaware corporation, will be held at the Omni
San Antonio Hotel, 9821 Colonnade Blvd., San Antonio, Texas, on
Friday, January 9, 1998, at 10:00 a.m., local time, for the following
purposes:
(1) To elect three directors to serve until the 2001 Annual Meeting of
Shareholders;
(2) To approve the appointment of auditors for the 1998 fiscal year; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
In accordance with the Bylaws of the Company and a resolution of the
Board of Directors, the record date for the meeting has been fixed at
November 12, 1997. Only shareholders of record at the close of business on
that date will be entitled to vote at the meeting or any adjournment thereof.
A complete list of shareholders entitled to vote at the meeting will be
on file at the Company's corporate office at 2211 Northeast Loop 410, San
Antonio, Texas, for a period of ten days prior to the meeting. During such
time, the list will be open to the examination of any shareholder during
ordinary business hours for any purpose germane to the meeting.
Shareholders who do not expect to attend the meeting in person are urged
to sign the enclosed proxy and return it promptly. A return envelope is
enclosed for that purpose.
LUBY'S CAFETERIAS, INC.
James R. Hale
Secretary
Dated: December 1, 1997
<PAGE>
LUBY'S CAFETERIAS, INC.
2211 Northeast Loop 410
P. O. Box 33069
San Antonio, Texas 78265-3069
PROXY STATEMENT
_______________
The accompanying proxy is solicited by the Board of Directors of Luby's
Cafeterias, Inc., a Delaware corporation (the "Company"), to be voted at the
1998 Annual Meeting of Shareholders on January 9, 1998, or at any adjournment
thereof. This proxy statement and the accompanying proxy are being mailed to
shareholders on or about December 1, 1997.
THE COMPANY
The Company was restructured into a holding company on February 1, 1997,
at which time all of the operating assets were transferred to Luby's
Restaurants Limited Partnership, a Texas limited partnership composed of two
wholly owned indirect corporate subsidiaries of the Company. All cafeteria
operations are conducted by the partnership. Unless the context indicates
otherwise, the word "Company" as used herein includes the partnership and the
consolidated corporate subsidiaries of Luby's Cafeterias, Inc.
VOTING AND PROXIES
Only holders of record of common stock of the Company as of the close of
business on November 12, 1997, will be entitled to vote at the meeting. There
were 23,270,675 shares of common stock outstanding on the record date,
exclusive of 4,132,392 treasury shares. Each share of common stock
outstanding is entitled to one vote. A majority of the shares outstanding will
constitute a quorum at the meeting.
All shares represented by proxies will be voted in accordance with the
shareholders' directions. If the proxy card is signed and returned without
any direction given, shares will be voted in accordance with the
recommendations of the Board of Directors as described in this proxy
statement. Any shareholder giving a proxy may revoke it at any
time before the proxy is voted by giving written notice of revocation to the
Secretary of the Company, by submitting a later-dated proxy, or by attending
the meeting and voting in person.
The election of nominees for director requires a plurality of the votes
cast. Approval of the appointment of auditors requires the affirmative vote
of a majority of the shares present at the meeting in person and by proxy.
Abstentions and broker nonvotes will be included in determining the presence
of a quorum at the meeting. Broker nonvotes and abstentions will not be
included in determining the number of votes cast on any matter.
The Company's Bylaws provide that candidates to stand for election as
directors at an annual meeting of shareholders shall be nominated by the Board
of Directors. Candidates may also be nominated by any shareholder of record
entitled to vote at the meeting, provided the shareholder gives timely notice
thereof. To be timely, such notice shall be delivered in writing to the
Secretary of the Company at the principal executive offices of the Company not
later than 90 days prior to the date of the meeting of shareholders at which
directors are to be elected and shall include (i) the name and address of the
shareholder who intends to make the nomination, (ii) the name, age, and
business address of each nominee, and (iii) such other information with
respect to each nominee as would be required to be disclosed in a proxy
solicitation relating to an election of directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934.
SENIOR MANAGEMENT CHANGES
Ralph Erben served as Chief Executive Officer of the Company from 1988 to
1997. John E. Curtis, Jr. served as President, Chief Operating Officer, and
Chief Financial Officer of the Company from 1996 to 1997. In January 1997
Mr. Curtis was elected President and Chief Executive Officer.
Following the death of Mr. Curtis on March 13, 1997, the Board of
Directors met on March 17, 1997, at which time Mr. Erben resigned as Chairman
of the Board, and John B. Lahourcade was elected as Chairman of the Board
and Acting Chief Executive Officer. On May 9, 1997, Mr. Lahourcade resigned
as Acting Chief Executive Officer, and David B. Daviss was elected as Acting
Chief Executive Officer.
Effective October 1, 1997, several changes occurred. Mr. Lahourcade
resigned as Chairman of the Board and was succeeded by Mr. Daviss in that
position. Barry J.C. Parker was elected President and Chief Executive
Officer, and Mr. Daviss resigned as Acting Chief Executive Officer.
Mr. Parker was elected as a director for a term expiring in the year 2000.
ELECTION OF DIRECTORS
The Bylaws of the Company provide for a Board of Directors divided into
three classes, as nearly equal in number as possible, with the members of each
class to serve three-year terms. In accordance with the Bylaws, the
Board has fixed the number of directors at nine. The directors whose terms
expire at the 1998 Annual Meeting of Shareholders who have been nominated by
the Board of Directors for reelection to serve until the 2001 Annual Meeting
of Shareholders and until their successors are duly elected and qualified are
Lauro F. Cavazos, John B. Lahourcade, and George H. Wenglein. The Board of
Directors recommends a vote FOR such nominees.
The proxies named in the accompanying proxy, who have been designated by
the Board of Directors, intend to vote for the above mentioned nominees for
election as directors, unless otherwise specified. Such nominees have
indicated a willingness to serve as directors, but should any of them decline
or be unable to serve, the persons named as proxies may vote for another
person in the place of such nominee according to their best judgment in the
interest of the Company.
The following information is furnished with respect to each of the
nominees and for each of the other six directors whose terms will continue
after the meeting. Such information includes all positions with the Company
and principal occupations during the last five years.
Nominees for Election to Terms Expiring in 2001
LAURO F. CAVAZOS is Professor of Family Medicine and Community Health,
Tufts University School of Medicine (since 1996), Acting Chair,
Department of Family Medicine and Community Health, Tufts
University School of Medicine (since 1997), and education and
management consultant (since 1991). He was Acting Chair, Community
Health, Tufts University School of Medicine (1994-1997) and
Adjunct Professor, Community Health, Tufts University School of
Medicine (1992-1994). He is 70 and has been a director of the
Company since 1993 and is Chairman of the Audit Committee and
a member of the Corporate Governance Committee. He is a director of
New England Education Loan Marketing Corporation.
JOHN B. LAHOURCADE is an investor. He served as Chairman of the Board of
the Company from 1988 to 1996 and from March to October 1997. He
served as Acting Chief Executive Officer from March to May 1997. He
is a member of the Executive Committee. He has been employed by the
Company as a consultant since January 1996. He is 73 and has been a
director of the Company since 1970.
GEORGE H. WENGLEIN is an investor and one of the founders of the Company.
He is a member of the Compensation Committee. He has been employed
by the Company as a consultant since 1988. He is 80 and has been a
director of the Company since 1959.
Incumbent Directors Whose Terms Expire in 1999
DAVID B. DAVISS is Chairman of the Board of the Company (since October
1997). He was Acting Chief Executive Officer from May to October
1997. He is an advisory director of Austin Trust Company. He is 61
and has been a director of the Company since 1984. He is Chairman of
the Executive Committee and a member of the Corporate Governance
Committee. He served as Chairman of the Audit Committee prior to May
1997.
ROGER R. HEMMINGHAUS is Chairman of the Board, Chief Executive Officer,
and a director of Ultramar Diamond Shamrock Corporation, where he
also served as President until December 1996. He is also Chairman of
the Federal Reserve Bank, Eleventh District, and a director of New
Century Energies, Inc. He is 61 and has been a director of the
Company since 1989 and is a member of the Executive Committee, the
Compensation Committee, the Audit Committee, and the Corporate
Governance Committee.
WILLIAM E. ROBSON is Executive Vice President-Operations of the Company.
He was Senior Vice President-Operations from 1992 to 1995 and was
Senior Vice President-Operations Development from 1988 to 1992. He
is 56 and has been a director of the Company since 1993 and an
officer since 1982.
Incumbent Directors Whose Terms Expire in 2000
BARRY J.C. PARKER is President and Chief Executive Officer of the Company
(since October 1997). From 1989 to 1996 he was Chairman of the
Board, President, and Chief Executive Officer of County Seat Stores,
Inc., a casual apparel chain. He was a principal of Hoak Capital
Corporation from January to October 1997. He is a trustee of
Prentiss Properties Trust. He is 50 and has been a director and
officer of the Company and a member of the Executive Committee since
October 1997.
WALTER J. SALMON is Emeritus Professor, Harvard Graduate School of
Business Administration (since 1996). Prior thereto he was Stanley
Roth, Sr. Professor of Retailing, Harvard Graduate School of
Business Administration. He is 67 and has been a director of the
Company since 1979. He is Chairman of the Compensation Committee and
a member of the Corporate Governance Committee. He is a director of
Circuit City Stores, Inc., Cole National Corporation, The Neiman
Marcus Group, Hannaford Bros. Co., Harrah's Entertainment, Inc.,
Petsmart, Inc., The Quaker Oats Company, and Tufts Associated Health
Plans, Inc.
JOANNE WINIK is President, General Manager, and a director of KLRN-TV,
San Antonio's Pubic Broadcasting Service affiliate. She is also a
director of Southern Educational Communications Association. She is
57 and has been a director of the Company since 1993. She is
Chairman of the Corporate Governance Committee and a member of the
Audit Committee.
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
Meetings and Compensation of Directors
During the fiscal year ended August 31, 1997, the Board of Directors held
seven meetings. Each director who is not an officer of the Company is paid
$3,000 for each meeting of the Board of Directors which he or she attends
plus $12,000 per year for his or her services as a director. In addition,
each director who is not an officer of the Company is paid $1,000 for each
meeting of any committee of the Board which he or she attends, except that the
Chairman of the Audit Committee and the Chairman of the Compensation Committee
are each paid $1,200 for each meeting of such committee which he attends.
During the fiscal year ended August 31, 1997, Roger R. Hemminghaus
attended six of the seven meetings of the Board of Directors but he attended
fewer than 75 percent of the meetings of committees of the Board on which he
served. A number of these were specially called meetings during the search
for a new chief executive officer.
Nonemployee Director Stock Options
The Company has a Nonemployee Director Stock Option Plan (the
"Nonemployee Director Plan") under which nonemployee directors are
periodically granted nonqualified options to purchase shares of the Company's
common stock at an option price equal to 100% of fair market value on the date
of grant. Each option terminates upon the expiration of ten years from the
date of grant or one year after the optionee ceases to be a director,
whichever first occurs. An option may not be exercised prior to the
expiration of five years from the date of grant, subject to certain exceptions
specified in the Nonemployee Director Plan.
Pursuant to the provisions of the Nonemployee Director Plan, options were
granted to nonemployee directors on January 14, 1997, for the following number
of option shares at an option price of $20.25 per share: Walter J. Salmon -
5,000 shares and Joanne Winik - 5,000 shares.
Audit Committee
The Audit Committee of the Board of Directors, which currently consists
of Lauro F. Cavazos, Roger R. Hemminghaus, and Joanne Winik, met two times
during the 1997 fiscal year. The functions of the Audit Committee
are to review the qualifications and independence of the independent auditors;
to recommend the appointment of the independent auditors; to approve the
assignment of new audit partners; to review the scope of the annual audit and
the annual audit process; to review the annual audited financial statements;
to review the annual reporting process; to review internal audit, accounting,
data processing, financial functions, and personnel; to review accounting and
data processing controls and procedures; to review legal matters that may have
a significant effect on the financial statements; to review the internal audit
function; to provide regular opportunities for the director of internal audit
and the independent auditors to meet privately with the Audit Committee; to
review the Company's policies on standards of conduct; and to report the
activities of the Audit Committee to the Board of Directors on a regular
basis.
Compensation Committee
The Compensation Committee of the Board of Directors currently consists
of Walter J. Salmon, Roger R. Hemminghaus, and George H. Wenglein. The
Compensation Committee met two times during the 1997 fiscal year. The
functions of the Compensation Committee are to review the compensation of
officers and other management personnel and to make recommendations concerning
such compensation. The Compensation Committee also administers those employee
benefit plans of the Company which provide for administration by a Board
committee.
Compensation Committee Interlocks and Insider Participation
George H. Wenglein, a member of the Compensation Committee, is a former
officer of the Company and is employed by the Company as a consultant at a
salary of $10,417 per month under a contract which expires in January 1998.
During fiscal 1997 income tax services were provided at the Company's expense
for Mr. Wenglein in the amount of $3,000.
Corporate Governance Committee
On October 17, 1997, the Board of Directors established a Corporate
Governance Committee composed of Lauro F. Cavazos, David B. Daviss, Roger R.
Hemminghaus, Walter J. Salmon, and Joanne Winik. The functions of the
Corporate Governance Committee are to review and make recommendations to the
Board regarding matters of corporate governance and to nominate persons for
election as directors.
The Corporate Governance Committee will consider nominees for election as
directors recommended by shareholders. A shareholder desiring to submit such
a recommendation should deliver to the Secretary of the Company at the
principal offices of the Company not later than 90 days prior to the date of
the meeting of shareholders at which directors are to be elected a notice
which includes (i) the name and address of the shareholder making the
recommendation, (ii) the name, age, and business address of the proposed
nominee, and (iii) such other information regarding the proposed nominee as
would be required in a proxy solicitation relating to an election of directors
pursuant to Regulation 14A under the Securities Exchange Act of 1934.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
John E. Curtis, Jr., formerly President and Chief Executive Officer of
the Company, was the son-in-law of Paul A. Hesson. Mr. Hesson is a principal
in an architectural firm which regularly renders architectural services for
the Company. For the fiscal year ended August 31, 1997, the Company paid
Mr. Hesson's firm architectural fees of approximately $922,000. In the
opinion of the Company, such fees are comparable to those paid by the Company
to other architectural firms for similar services.
John B. Lahourcade, a director of the Company, is employed by the Company
as a consultant at a salary of $7,083 per month under a contract which expires
in 2001.
James R. Hale, Secretary of the Company, is a member of the law firm of
Cauthorn Hale Hornberger Fuller Sheehan & Becker Incorporated. The firm
performs legal services for the Company on a regular basis. For services
rendered during the fiscal year ended August 31, 1997, the Company paid
such firm approximately $584,000. In the opinion of the Company, such fees
are comparable to those charged by other law firms for similar services.
Barry J.C. Parker is employed as President and Chief Executive Officer of
the Company under a three-year employment contract effective October 1, 1997.
Mr. Parker's employment contract provides, among other things, for (i) a
minimum base salary of $360,000 per year, (ii) a guaranteed bonus for the
fiscal year ending August 31, 1998, of at least $132,000, (iii) the initial
grant of options to purchase 100,000 shares of the Company's common stock at
an option price of $20.75 per share, and (iv) a loan from the Company not to
exceed $200,000 to be applied to the purchase of 20,000 shares of the
Company's common stock (with forgiveness of principal over five years,
contingent upon continued employment). A copy of Mr. Parker's employment
contract is filed with the Securities and Exchange Commission as an exhibit to
the Company's annual report on Form 10-K for the fiscal year ended August 31,
1997.
Mr. Parker was Chairman of the Board, President, and Chief Executive
Officer of County Seat Stores, Inc. from 1989 until his resignation in July
1996. County Seat Stores, Inc. filed a petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in October 1996. The Board of
Directors of the Company does not believe that such filing reflects adversely
upon Mr. Parker's integrity or upon his abilities as a director and executive
officer of the Company.
SECTION 16(a) OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and any persons holding more than ten
percent of the Company's common stock to report their initial ownership of the
Company's common stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange, and to
provide copies of such reports to the Company. Based upon the Company's
review of copies of such reports received by the Company and written
representations of its directors and executive officers, the Company believes
that during the year ended August 31, 1997, all Section 16(a) filing
requirements were satisfied, except with respect to a late report filed
by Clyde C. Hays III, Senior Vice President-Operations. In October 1997 he
filed a late report on SEC Form 4 reflecting a transaction that was not
reported on a timely basis.
PRINCIPAL SHAREHOLDERS
To the knowledge of the Company, no person owned beneficially as of
October 31, 1997, more than five percent of the outstanding common stock of
the Company, except as follows:
Shares of Common Stock
Name and Address of Beneficially Owned as of Percent of
Beneficial Owner October 31, 1997 Class
___________________ ________________________ __________
NBD Bank, N.A. (1)
611 Woodward Avenue
MS 8115
Detroit, MI 48226 1,235,270 5.31%
(1) The shares held by NBD Bank, N.A. ("NBD") are held in advisory and
discretionary accounts of investors. NBD has sole power to dispose
of 1,231,120 shares in such accounts and has shared dispositive
power with respect to 1,600 shares. NBD has sole power to vote
1,192,626 shares held in such accounts and has no shared voting
power. As of October 31, 1997, none of such accounts contained more
than five percent of the outstanding common stock of the Company.
The foregoing is based upon information furnished by NBD.
MANAGEMENT SHAREHOLDERS
According to information furnished by the persons concerned, each
director, each nominee for director, and all directors and officers of the
Company as a group, owned beneficially the indicated number and percentage of
outstanding shares of common stock of the Company as of November 12, 1997:
Name of Individual or Shares Beneficially Owned Percent
Identity of Group as of November 12, 1997(1) of Class
_____________________ __________________________ _________
Lauro F. Cavazos (2) 1,550 .01%
David B. Daviss (3) 5,037 .02%
Roger R. Hemminghaus 3,800 .02%
John B. Lahourcade (4) 199,405 .86%
Barry J.C. Parker 20,000 .09%
William E. Robson (5) 28,840 .12%
Walter J. Salmon (6) 2,255 .01%
George H. Wenglein 730,000 3.14%
Joanne Winik 1,910 .01%
All directors and officers of
the Company, as a group (7) 1,367,262 5.85%
(1) Except as indicated in the following notes, each person named in the
table owns directly the number of shares indicated and has sole
power to vote and to dispose of such shares.
(2) The shares shown for Dr. Cavazos are held jointly with his wife.
(3) The shares shown for Mr. Daviss are held for his benefit in a custodial
account.
(4) The shares shown for Mr. Lahourcade include 1,125 shares held jointly
with his wife.
(5) The shares shown for Mr. Robson include 20 shares held jointly with his
wife, 64 shares held jointly with his son, 866 shares held for his
benefit in an Individual Retirement Account, 15 shares held by his wife
as trustee for his grandchildren, 2,376 shares held for his benefit in
the Company's Dividend Reinvestment Plan, and 10,650 shares which he
has the right to acquire within 60 days under the Company's employee
benefit plans.
(6) The shares shown for Dr. Salmon are held for his benefit in an
Individual Retirement Account.
(7) The shares shown for all directors and officers as a group include
81,441 shares which they have the right to acquire within 60 days under
the Company's employee benefit plans.
EXECUTIVE COMPENSATION
The table below contains information concerning annual and long-term
compensation of the chief executive officers and the other four most highly
compensated executive officers (the "Named Officers") for services in all
capacities to the Company for the fiscal years ended August 31, 1997, 1996,
and 1995:
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
_____________________________________________________ ____________________________ ________
Securities All
Other Under- Other
Name and Annual Restricted lying LTIP Compen-
Principal Fiscal Compen- Stock Options/ Payouts sation
Position Year Salary Bonus(1) sation(2) Awards SARs(3) (4) (5)
_____________________________________________________ ____________________________ ________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ralph Erben 1997 $179,167 $ --- $0 $0 4,500 $60,770 $770,000
Chairman of the 1996 350,000 --- 0 0 5,000 119,146 33,786
Board and Chief 1995 340,000 --- 0 0 4,500 65,629 32,027
Executive Officer
John E. Curtis, Jr. 1997 182,500 --- 0 0 2,500 28,359 0
President, Chief 1996 283,333 --- 0 0 2,500 58,528 14,062
Operating Officer, 1995 240,000 --- 0 0 2,100 32,815 14,096
Chief Financial
Officer, and
Chief Executive
Officer
John B. Lahourcade 1997 198,400 --- 0 0 0 0 2,973
Chairman of the 1996 147,782 --- 0 0 0 0 14,062
Board, Acting 1995 212,500 --- 0 0 0 0 14,096
Chief Executive
Officer, and
consultant
David B. Daviss 1997 125,000 --- 0 0 0 0 0
Acting Chief 1996 32,400 --- 0 0 5,000 0 0
Executive 1995 33,600 --- 0 0 1,666 0 0
Officer and
Director
William E. Robson 1997 275,000 --- 0 0 2,300 28,359 9,279
Executive Vice 1996 263,333 --- 0 0 2,500 58,527 19,795
President - 1995 240,000 --- 0 0 2,100 32,815 19,308
Operations
Jimmy W. Woliver 1997 197,500 --- 0 0 1,500 19,316 2,973
Senior Vice 1996 190,000 --- 0 0 1,600 31,354 14,062
President - 1995 182,500 --- 0 0 1,250 10,938 14,096
Operations
Clyde C. Hays III 1997 190,000 --- 0 0 1,500 19,316 2,973
Senior Vice 1996 174,167 --- 0 0 1,600 22,993 14,062
President - 1995 156,250 --- 0 0 1,250 0 14,096
Operations
Raymond C. Gabrysch 1997 156,667 --- 0 0 1,000 0 2,973
Senior Vice 1996 148,750 3,761 0 0 1,200 0 14,062
President - 1995 137,500 37,120 0 0 950 0 14,096
Human Resources
<FN>
(1) Reflects incentive-based cash bonuses awarded under the Company's Incentive Bonus Plan
and Area Vice President Bonus Plan. Awards are stated as compensation in the year with
respect to which the award was earned, even if actually paid in the following year.
(2) Perquisites and other personal benefits received by the executive officers are not
included because the aggregate amount of such compensation does not exceed the lesser of
$50,000 or 10% of the total amount of annual salary and bonus for any Named Officer.
(3) The Company has not issued any stock appreciation rights to the Named Officers.
(4) The long-term incentive plan (LTIP) amounts paid out in fiscal 1997, 1996, and 1995 under
the Company's Performance Unit Plan relate to the three-year performance cycles ended
August 31, 1996, 1995, and 1994, respectively.
(5) Amounts for Mr. Erben include payments under a retirement agreement in 1997 and
contributions under the Profit Sharing Plan of $14,062 and $14,096 in 1996 and 1995,
respectively. Remaining amounts for Mr. Erben for 1996 and 1995 are for amounts accrued
under a deferred compensation agreement. Amounts for Mr. Curtis include contributions
under the Profit Sharing Plan of $14,062 and $14,096 in 1996 and 1995, respectively.
Amounts for Messrs. Lahourcade, Robson, Woliver, Hays, and Gabrysch for 1997, 1996,
and 1995, respectively, include contributions under the Profit Sharing Plan of $2,973,
$14,062, and $14,096, respectively. Remaining amounts for Mr. Robson are for amounts
under a deferred compensation agreement.
</TABLE>
The following table reports the grant of stock options and stock
appreciation rights ("SARs") to the Named Officers during fiscal 1997.
Options were granted under the Company's Management Incentive Stock Plan.
The Company has not granted SARs to any of the Named Officers.
<TABLE>
Option/SAR Grants in Last Fiscal Year
<CAPTION>
Potential Realized
Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term (3)
________________________________________________________________________ ____________________
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (1) Fiscal Year (2) ($/sh) Date 5%($) 10%($)
________________________________________________________________________ ____________________
<S> <C> <C> <C> <C> <C> <C>
Ralph Erben 4,500 13.36% $23.125 10-16-2002 $35,373 $80,242
John E. Curtis, Jr. 2,500 7.42% 23.125 10-16-2002 19,651 44,579
William E. Robson 2,300 6.83% 23.125 10-16-2002 18,079 41,013
Jimmy W. Woliver 1,500 4.45% 23.125 10-16-2002 11,791 26,747
Clyde C. Hays III 1,500 4.45% 23.125 10-16-2002 11,791 26,747
Raymond C. Gabrysch 1,000 2.97% 23.125 10-16-2002 7,861 17,832
<FN>
(1) Options were granted at fair market value of the common stock on the date of grant.
Options may not be exercised during the first 12 months following the date of grant.
(2) Based upon a total of 33,675 options granted to employees in fiscal 1997.
(3) The dollar amounts in these columns are the result of calculations at the 5% and 10%
rates set by the Securities and Exchange Commission and should not be considered as a
forecast of future stock prices.
</TABLE>
The table below reports exercises of stock options and SARs by the Named
Officers during fiscal 1997 and the value of their unexercised stock options
and SARs as of August 31, 1997. The stock options were granted under the
Company's Management Incentive Stock Plan. The Company has not granted SARs
to any of the Named Officers.
Aggregated Options/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARS Options/SARs
Acquired at FY-End at FY-End(1)
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
______________________________________________________________________________
Ralph Erben 35,600 $174,659 11,500/0 $0/$0
John E. Curtis, Jr. 23,000 80,163 5,450/0 0/0
David B. Daviss --- --- 0/6,666 0/0
William E. Robson 10,000 42,500 10,950/3,550 18,206/0
Jimmy W. Woliver --- --- 3,300/2,300 0/0
Clyde C. Hays III 3,358 14,272 5,750/2,300 8,109/0
Raymond C. Gabrysch 8,600 40,763 4,950/1,600 8,109/0
(1) The value of unexercised options is based on a price of $19.6875 per
common share at August 31, 1997.
The following table reports performance units granted to the Named
Officers during fiscal 1997 under the Company's Performance Unit Plan and the
Company's Management Incentive Stock Plan:
Long-Term Incentive Plans - Awards in Last Fiscal Year
Performance Estimated Future Payouts under
Number or Other Non-Stock Price Based Plans
of Shares, Period Until ______________________________
Units, or Maturation
Name Other Rights or Payout Threshold Target Maximum
______________________________________________ ______________________________
Ralph Erben 4,500 1997-99 $48,837 $97,675 $146,512
John E. Curtis, Jr. 2,600 1997-99 28,217 56,434 84,651
William E. Robson 2,300 1997-99 24,961 49,923 74,884
Jimmy W. Woliver 1,200 1997-99 13,023 26,047 39,070
Clyde C. Hays III 1,200 1997-99 13,023 26,047 39,070
Raymond C. Gabrysch 800 1997-99 8,682 17,364 26,047
The performance units described in the above table were granted in
October 1996 for the three-year performance cycle ending August 31, 1999. At
the end of the performance cycle, performance awards are made in cash or in
shares of common stock, or both, based upon the attainment by the Company of
certain performance goals during the three-year cycle. Each performance unit
is assigned a performance factor, which is a percentage (not exceeding 150%)
resulting from achievement of the performance goals established at the date of
grant. Each performance unit is assigned a payment value, which is a dollar
amount determined by multiplying the performance factor by the average market
price of the common stock of the Company on 20 trading days immediately
preceding the end of the performance cycle. If the performance goals are not
achieved, a lesser performance factor is assigned (not below 50%), with no
future payouts if achievement is below 80% of goal - "Threshold." The values
included in the above table assume a 5% annual growth rate in the price of the
Company's common stock subsequent to August 31, 1997; however, this assumption
should not be considered as a forecast of future stock prices.
DEFERRED COMPENSATION
The Company's Nonemployee Director Deferred Compensation Plan permits
nonemployee directors to defer all or a portion of their directors' fees in
accordance with applicable regulations under the Internal Revenue Code.
Deferred amounts bear interest at the average interest rate of U.S. Treasury
ten-year obligations. The Company's obligation to pay deferred amounts is
unfunded and is payable from general assets of the Company.
The Company has deferred compensation agreements with several officers
and former officers of the Company. Under the agreements, the Company is
obligated to provide annual benefits for each such officer or his
beneficiaries during a period of ten years after his death, disability, or
retirement. The agreements are unfunded, but the Company has purchased life
insurance as a means of partially offsetting the cost of such benefits. No
estimated annual benefits are payable upon retirement at normal retirement age
for any of the Named Officers except $24,200 for William E. Robson.
The Company has a Supplemental Executive Retirement Plan, which is
designed to provide benefits for selected officers at normal retirement age
with 25 years of service equal to 50% of their final average compensation
offset by Social Security, profit sharing benefits, and deferred compensation.
Three of the officers designated to participate in the plan have retired and
are receiving benefits under the plan. Accrued benefits of all actively
employed participants become fully vested upon termination of the plan or a
change in control (as defined in the plan). The plan is unfunded, and the
Company is obligated to make benefit payments solely on a current disbursement
basis.
The following table illustrates the approximate annual pension that the
Named Officers in the Summary Compensation Table would receive under the
Supplemental Executive Retirement Plan if the plan remained in effect
and the Named Officers retired at age 65 and elected an individual life
annuity.
Pension Plan Table
Years of Service
Final Average ____________________________________________
Earnings 15 20 25
_______________ ___________ _________________ ____________
$150,000 $ 45,000 $ 60,000 $ 75,000
300,000 90,000 120,000 150,000
450,000 135,000 180,000 225,000
600,000 180,000 240,000 300,000
Amounts shown as "final average earnings" in this table represent the
average of the last five years of compensation, which is substantially the
same as the total of salary, bonus, and LTIP payouts as shown in the
Summary Compensation Table for the Named Officers. As of December 1, 1997,
the credited years of service under the Supplemental Executive Retirement Plan
for Messrs. Robson, Hays, and Gabrysch are 31, 24, and 24, respectively.
Messrs. Erben, Lahourcade, and Daviss are not covered by the plan. The annual
benefit amounts shown above are subject to an offset by benefits payable under
deferred compensation agreements, if applicable, the profit sharing plan,
and Social Security. Net benefits under the plan are prorated by years of
service less than 25; after 25 years of service, the net benefits are
unchanged.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee")
presents the following report on executive compensation. The report describes
the Company's executive compensation programs and the bases on which the
Committee made compensation decisions for fiscal 1997 with respect to the
Company's executive officers, including those named in the compensation
tables.
Compensation Objectives
The Committee conducts an annual review of the Company's executive
compensation program. The objectives of the executive compensation program
include the following:
To offer fair and competitive base salaries consistent with the
Company's position in the food service industry;
To reward executives for corporate and individual performance
through an annual incentive bonus program;
To encourage future performance through the use of long-term
incentives such as stock options and performance units; and
To encourage executives to acquire and retain ownership of the
Company's common stock.
The Company's executive compensation program is designed to enable the
Company to attract, retain, and motivate the highest quality of management
talent. To achieve that objective, the Committee has developed a compensation
program which combines annual base salaries with annual and long-term
incentives tied to corporate performance and to increases in shareholder
value.
Annual Base Salaries
The Committee annually establishes the base salaries to be paid to the
Company's executive officers during the coming year, subject to approval by
the Board of Directors. In setting base salaries, the Committee takes into
account several factors, including the executive's experience,
responsibilities, management abilities, and job performance, as well as
performance of the Company as a whole and competitive compensation data.
Annual Incentive Bonuses
The Company's annual incentive bonus plan for executive officers and
other key personnel directly links annual cash incentive payments to the
attainment of predetermined earnings per share goals established by the
Committee and approved by the Board of Directors. Eligible executives are
assigned threshold, target, and maximum bonus levels as a percentage of base
salary, based upon the executive's responsibility level and increase in
earnings per share over the prior year.
For fiscal 1997 the incentive compensation targets for executive
officers ranged from 14% to 30% of base salary if targeted earnings per share
were attained, with maximums ranging from 20% to 45% of base salary. No cash
incentive bonuses were paid to the executive officers for fiscal 1997.
Stock Options
The Committee normally grants incentive stock options annually to
eligible executive officers and other key employees. The options, which are
granted at 100% of market price on the date of grant, are usually for six-year
terms exercisable 50% after one year and 100% after two years. The number
of option shares granted each year is normally determined by a formula based
upon the executive's responsibility level and base salary and the market price
of the common stock. The number of option shares granted will vary based upon
position level, with the more senior officers receiving larger grants. The
number of option shares held by an executive is not considered in determining
stock option awards.
Performance Units
The Committee normally grants performance units annually to eligible
executive officers and other key employees based upon attainment by the
Company of predetermined earnings and equity goals over a performance
cycle of three consecutive years. The goals are established by the Committee.
During fiscal 1997 performance awards were granted to eligible executive
officers for the three-year performance cycle ending August 31, 1999. The
number of performance units granted is normally determined by a formula based
upon the executive's responsibility level and base salary and the market
price of the common stock. Performance units are payable at the end of each
performance cycle in cash or shares of common stock, or both, if the
performance goals for the cycle are attained. No payments were made for the
three-year performance cycle which ended August 31, 1997.
Stock Ownership Guidelines
In January 1996, pursuant to recommendations of the Compensation
Committee, the Board of Directors adopted guidelines for ownership of Company
common stock by executives and nonemployee directors. The guidelines provide
that each person in the following categories is expected to attain the
indicated level of stock ownership within five years:
(1) Chief Executive Officer - shares having a value equal to four times
annual base salary;
(2) President, Executive Vice President, and Senior Vice President -
shares having a value equal to two times annual base salary;
(3) Vice President - shares having a value equal to annual base salary;
and
(4) Nonemployee director - shares having a value equal to 3.5 times
annual retainer fees.
Compensation of Chief Executive Officer
Mr. Erben was paid a base salary of $350,000 per year for services as
Chief Executive Officer from March 1, 1995, until January 1, 1997. He was
paid a base salary of $250,000 per year for services as Chairman of the Board
from January 1, 1997, until his resignation on March 17, 1997. He was paid a
lump-sum severance payment of $550,000 and a lump-sum payment of $220,000 in
satisfaction of his deferred compensation benefits. Mr. Erben's base salary
was not increased subsequent to March 1, 1995.
Mr. Curtis was paid a base salary of $330,000 per year for services as
Chief Executive Officer from January 1, 1997, until his death in March 1997.
Prior to January 1, 1997, he was receiving a base salary of $300,000 per year
for services as President, Chief Operating Officer, and Chief Financial
Officer.
Mr. Lahourcade was paid a base salary of $25,000 per month for services
as Acting Chief Executive Officer from March 1997 until May 1, 1997. His base
salary as Chairman of the Board was $20,000 per month from May 1, 1997, to
October 1, 1997.
Mr. Daviss was paid a base salary of $25,000 per month for services as
Acting Chief Executive Officer from May 1, 1997, to October 1, 1997. His
salary as Chairman of the Board, effective October 1, 1997, is $120,000 per
year.
On October 17, 1996, Mr. Erben was granted an incentive stock option for
4,500 shares, which number of shares was determined in accordance with the
formula discussed above. During fiscal 1997 he exercised options granted to
him in prior years for a total 35,600 shares. On January 14, 1997, Mr. Erben
was granted 4,500 performance units, which number of units was determined in
accordance with the formula discussed above.
On October 17, 1996, Mr. Curtis was granted an incentive stock option for
2,500 shares, which number of shares was determined in accordance with the
formula discussed above. Prior to March 1997, he exercised options granted to
him in prior years for a total of 17,500 shares. During the remaining months
of fiscal 1997, Mr. Curtis's executrix exercised options for 5,500 shares
which were granted to him in prior years. On January 14, 1997, Mr. Curtis
was granted 2,600 performance units, which number of units was determined in
accordance with the formula discussed above.
Members of the Committee:
Walter J. Salmon, Chairman
Roger R. Hemminghaus
George H. Wenglein
PERFORMANCE GRAPH
This year the Company has changed the equity market index and has altered
the composition of the peer group used to compare the cumulative total
shareholder return on the Company's common stock from that used in prior
proxy statements. Effective January 1, 1997, Standard and Poor's transferred
the Company from the S&P 500 Index to the S&P SmallCap 600 Index as part of a
restructuring of the Restaurants industry group in the S&P Indexes. The
transfer was based on market capitalization. Therefore, the Company will now
use the S&P SmallCap 600 Index as the published industry index for comparison
purposes. In addition, in prior years the Company has included itself in
the peer group index. In the 1997 Peer Group, Luby's Cafeterias, Inc. has
been removed so as not to impact the performance of the peer group. The peer
group in the prior year also included Hometown Buffet, Inc. which was
subsequently acquired by Buffets, Inc.
The following graph compares the cumulative total shareholder return on
the Company's common stock for the five fiscal years ended August 31, 1997,
with the cumulative total return on the S&P 500 Index, the S&P SmallCap
600 Index, and an industry peer group index. The 1997 Peer Group is comprised
of Buffets, Inc.; Morrison Restaurants, Inc. (formerly Morrison Fresh Cooking,
Inc.); Perkins Family Restaurants, L.P.; Piccadilly Cafeterias, Inc.;
Ryan's Family Steak Houses, Inc.; Shoney's, Inc.; and Sizzler International,
Inc. These companies are multiunit family restaurant operators in the
mid-price range with similar stock market capitalization.
The cumulative total shareholder return computations set forth in the
performance graph assume the investment of $100 on August 31, 1992, and the
reinvestment of all dividends. The returns of each company in the
1996 Peer Group and the 1997 Peer Group have been weighted according to the
respective company's stock market capitalization.
The performance graph has been omitted in the EDGAR filing. A table of
the graph's data points is shown below.
Five-year Cumulative Return
Years Ended August 31,
____________________________________________
1992 1993 1994 1995 1996 1997
Luby's Cafeterias, Inc. $100 165 155 135 166 143
1997 Peer Group $100 114 90 76 71 68
1996 Peer Group $100 122 100 86 86 80
S&P 500 $100 115 122 148 175 246
S&P SmallCap 600 $100 136 140 172 195 261
APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed the firm of Ernst &
Young LLP to audit the accounts of the Company for the 1998 fiscal year.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting of Shareholders with the opportunity to make a statement if
they desire to do so and are expected to be available to respond to
appropriate questions.
Approval of the appointment of auditors is not a matter which is required
to be submitted to a vote of shareholders, but the Board of Directors
considers it appropriate for the shareholders to express or withhold their
approval of the appointment. If shareholder approval should be withheld, the
Board would consider an alternative appointment for the succeeding fiscal
year. The Board recommends that the shareholders vote FOR approval of the
appointment of Ernst & Young LLP. The affirmative vote of a majority of the
shares present at the meeting in person and by proxy is required for approval.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Proposals of shareholders intended to be presented at the 1999 Annual
Meeting of Shareholders must be received in writing by the Company at its
corporate office no later than August 4, 1998. The Company's corporate
office is located at 2211 Northeast Loop 410, P. O. Box 33069, San Antonio,
Texas 78265-3069.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. The
transfer agent and registrar for the Company's common stock, American Stock
Transfer & Trust Company, as a part of its regular services and for no
additional compensation other than reimbursement for out-of-pocket expenses,
has been engaged to assist in the proxy solicitation. Proxies may be
solicited through the mail and through telephonic or telegraphic
communications to, or by meetings with, shareholders or their representatives
by directors, officers, and other employees of the Company who will receive no
additional compensation therefor.
The Company requests persons such as brokers, nominees, and fiduciaries
holding stock in their names for others, or holding stock for others who have
the right to give voting instructions, to forward proxy material to their
principals and to request authority for the execution of the proxy, and the
Company reimburses such persons for their reasonable expenses.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is
expected to come before the meeting, but should any other matters requiring a
vote of shareholders arise, including a question of adjourning the meeting,
the persons named in the accompanying proxy will vote thereon according to
their best judgment in the interest of the Company.
LUBY'S CAFETERIAS, INC.
James R. Hale
Secretary
Dated: December 1, 1997
<PAGE>
PROXY
Luby's CAFETERIAS, INC.
c/o American Stock Transfer & Trust Company
40 Wall Street, New York, New York 10005
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints John B. Lahourcade, George H. Wenglein, and
David B. Daviss, and each of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes each of them to represent and to vote,
as designated below, all the shares of Common Stock of Luby's Cafeterias, Inc.
held on record by the undersigned on November 12, 1997, at the Annual Meeting
of Shareholders to be held on January 9, 1998, or any adjournment thereof.
Nominees: Lauro F. Cavazos, John B. Lahourcade, George H. Wenglein
[x] Please mark your votes as in this example.
1. Election of Directors
[ ] FOR [ ] WITHHELD
For, except vote withheld from the following nominee(s):
_______________________________________________________
2. Proposal to approve the appointment of Ernst & Young LLP as the
independent public accountants of the corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this
proxy will be voted for proposals 1 and 2.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE.
SIGNATURE __________________________________ DATE __________________
SIGNATURE __________________________________ DATE __________________
IF HELD JOINTLY
Note: Please sign exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership
name by authorized person.
