FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2211 Northeast Loop 410, P. O. Box 33069
San Antonio, Texas 78265-3069
______________________________________________________________________________
(Address of principal executive offices) (Zip Code)
210/654-9000
______________________________________________________________________________
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock: 23,270,675 shares outstanding as of February 28, 1998
(exclusive of 4,132,392 treasury shares)
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
LUBY'S CAFETERIAS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
February 28, February 28,
1998 1997 1998 1997
____ ____ ____ ____
(Amounts in thousands except per share data)
Sales $123,204 $118,830 $247,876 $241,117
Costs and expenses:
Cost of food 30,889 28,654 62,746 59,043
Payroll and related costs 37,402 35,268 76,712 71,279
Occupancy and other operating
expenses 37,866 36,324 75,874 73,230
General and administrative
expenses 5,232 5,617 10,506 11,180
_______ _______ _______ _______
111,389 105,863 225,838 214,732
Income from operations 11,815 12,967 22,038 26,385
_______ _______ _______ _______
Interest expense (1,259) (955) (2,525) (1,608)
Other income, net 222 453 903 754
Income before income taxes 10,778 12,465 20,416 25,531
Provision for income taxes 3,837 4,061 7,268 8,961
_______ _______ _______ _______
Net income $ 6,941 $ 8,404 $ 13,148 $ 16,570
_______ _______ _______ _______
Net income per share - basic and
assuming dilution $.30 $.36 $.57 $.71
Cash dividends per share $.20 $.20 $.40 $.40
Average number of shares outstanding 23,271 23,380 23,270 23,498
See accompanying notes.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
February 28, August 31,
1998 1997
____ ____
(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents $ 3,730 $ 6,430
Trade accounts and other receivables 683 510
Food and supply inventories 5,939 4,507
Prepaid expenses 4,530 3,586
Deferred income taxes 1,258 937
________ ________
Total current assets 16,140 15,970
Property held for sale 9,650 12,680
Investments and other assets - at cost 8,592 6,111
Property, plant, and equipment - at cost, net 334,383 334,017
________ ________
$368,765 $368,778
________ ________
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 11,200 $ 13,584
Dividends payable 4,654 4,653
Accrued expenses and other liabilities 22,090 25,038
Income taxes payable 1,453 2,406
________ ________
Total current liabilities 39,397 45,681
Long-term debt 86,000 84,000
Deferred income taxes and other credits 20,646 20,257
Shareholders' equity:
Common stock 8,769 8,769
Paid-in capital 26,945 26,945
Retained earnings 279,915 276,140
Less cost of treasury stock (92,907) (93,014)
________ ________
Total shareholders' equity 222,722 218,840
________ ________
$368,765 $368,778
________ ________
See accompanying notes.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
February 28,
1998 1997
____ ____
(Thousands of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,148 $ 16,570
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 10,422 9,793
Decrease in accrued expenses
and other liabilities (2,948) (5,915)
Other, net (7,778) (4,695)
________ ________
Net cash provided by operating activities 12,844 15,753
________ ________
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of property held for sale 3,568 1,052
Purchases of land held for future use (948) (11,608)
Purchases of property, plant, and equipment (10,899) (30,617)
________ ________
Net cash used in investing activities (8,279) (41,173)
________ ________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under
stock option plan 42 2,775
Proceeds from long-term debt 454,000 486,000
Reductions of long-term debt (452,000) (432,000)
Purchases of treasury stock --- (18,260)
Dividends paid (9,307) (9,450)
________ ________
Net cash provided by (used in)
financing activities (7,265) 29,065
________ ________
Net increase (decrease) in cash and
cash equivalents (2,700) 3,645
Cash and cash equivalents at beginning of period 6,430 2,687
________ ________
Cash and cash equivalents at end of period $ 3,730 $ 6,332
________ ________
See accompanying notes.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
<TABLE>
LUBY'S CAFETERIAS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Six Months Ended February 28, 1998 and 1997
(UNAUDITED)
<CAPTION>
Total
Common Stock Paid-in Retained Shareholders'
Issued Treasury Capital Earnings Equity
______ ________ ________ ________ _____________
(Thousands of dollars)
<S> <C> <C> <C> <C> <C>
Balance at August 31, 1996 $8,769 $(77,415) $26,945 $267,374 $225,673
Net income for the period --- --- --- 16,570 16,570
Common stock issued under employee
benefit plans, net of shares
tendered in partial payment and
including tax benefits --- 4,195 --- (1,055) 3,140
Cash dividends --- --- --- (9,336) (9,336)
Purchases of treasury stock --- (17,102) --- --- (17,102)
______ ________ _______ ________ ________
Balance at February 28, 1997 $8,769 $(90,322) $26,945 $273,553 $218,945
______ ________ _______ ________ ________
Balance at August 31, 1997 $8,769 $(93,014) $26,945 $276,140 $218,840
Net income for the period --- --- --- 13,148 13,148
Common stock issued under employee
benefit plans, net of shares
tendered in partial payment and
including tax benefits --- 107 --- (65) 42
Cash dividends --- --- --- (9,308) (9,308)
______ ________ _______ ________ ________
Balance at February 28, 1998 $8,769 $(92,907) $26,945 $279,915 $222,722
______ ________ _______ ________ ________
See accompanying notes.
</TABLE>
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
(UNAUDITED)
Note 1: The accompanying unaudited financial statements are presented in
accordance with the requirements of Form 10-Q and, consequently, do
not include all of the disclosures normally required by generally
accepted accounting principles. All adjustments which are, in the
opinion of management, necessary to a fair statement of the results
for the interim periods have been made. All such adjustments are of
a normal recurring nature. The results for the interim period are not
necessarily indicative of the results to be expected for the full
year.
These financial statements should be read in conjunction with the
consolidated financial statements and footnotes included in Luby's
annual report on Form 10-K for the year ended August 31, 1997. The
accounting policies used in preparing these consolidated financial
statements are the same as those described in Luby's annual report on
Form 10-K.
Note 2: During the quarter ended February 28, 1998, the company adopted
Statement of Financial Accounting Standards No. 128, Earnings Per
Share. Statement 128 replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings per
share. Unlike primary earnings per share, basic earnings per share
excludes any dilutive effects of options, warrants, and convertible
securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. Earnings per
share amounts for all periods have been restated to conform to
the requirements of Statement 128.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
_______________________________
Cash and cash equivalents decreased by $2,700,000 from the end of the
preceding fiscal year to February 28, 1998. All capital expenditures for
fiscal 1998 are being funded from cash flows from operations, cash
equivalents, and long-term debt. Capital expenditures for the six months
ended February 28, 1998, were $11,847,000. As of February 28, 1998, the
company owned four undeveloped land sites and one Water Street joint venture
restaurant was under construction.
During fiscal year 1997 the company purchased 897,500 shares of its common
stock at a cost of $19,918,000, which are being held as treasury stock. To
complete the treasury stock purchases and fund capital expenditures, the
company required external financing and borrowed funds under a $125,000,000
line-of-credit agreement. As of February 28, 1998, the amount outstanding
under this line of credit was $86,000,000. The company believes that
additional financing from external sources can be obtained on terms acceptable
to the company in the event such financing is required.
Results of Operations
_____________________
Quarter ended February 28, 1998 compared to the quarter ended February 28,
1997.
______________________________________________________________________________
Sales increased $4,374,000, or 3.7%, due to the addition of five new
cafeterias in fiscal 1998 and 27 in fiscal 1997, and due to a slight increase
in average sales volume at cafeterias opened over one year. This increase was
partially offset by the closing of five units, two in August 1997, two in
September 1997, and one in January 1998.
Cost of food increased $2,235,000, or 7.8%, due primarily to the increase in
sales. As a percentage of sales, food costs were higher versus the prior year
due to higher commodity prices resulting from poor weather conditions.
Payroll and related costs increased $2,134,000, or 6.1%, due primarily to the
increase in sales and the higher federal minimum wage which increased first on
October 1, 1996, and again on September 1, 1997. Occupancy and other
operating expenses increased $1,542,000, or 4.2%, due primarily to the
increase in sales. This increase was partially offset by lower preopening
expenses due to fewer new store openings as compared to the prior year.
General and administrative expenses decreased $385,000, or 6.9%, due primarily
to a lower profit sharing contribution estimated for fiscal 1998 as compared
to the estimate of the contribution for the same period in the prior year.
The decline was partially offset by higher legal and professional fees
associated with the company's strategic planning project.
Interest expense increased $304,000 due to higher average borrowings under the
line-of-credit agreement and lower capitalized interest on qualifying
properties as a result of less construction in the current period.
The provision for income taxes decreased $224,000, or 5.5%, due primarily to
lower income from operations. The effective income tax rate increased from
32.6% to 35.6% since the rate in the second quarter of fiscal 1997 was
significantly impacted by the company's restructuring into a holding company.
Six months ended February 28, 1998 compared to the six months ended
February 28, 1997.
______________________________________________________________________________
Sales increased $6,759,000, or 2.8%, due primarily to the addition of five new
cafeterias in fiscal 1998 and 27 in fiscal 1997. The sales increase from new
cafeterias was partially offset by a decrease in sales volume at cafeterias
opened over one year and the closing of five units, two in August 1997, two in
September 1997, and one in January 1998.
Cost of food increased $3,703,000, or 6.3%, due primarily to the increase in
sales. As a percentage of sales, food costs were higher versus the prior year
due to higher commodity prices resulting from poor weather conditions and
product promotions featured during the period which had slightly higher food
costs. Payroll and related costs increased $5,433,000, or 7.6%, due primarily
to the increase in sales and the higher federal minimum wage which increased
first on October 1, 1996, and again on September 1, 1997. Occupancy and other
operating expenses increased $2,644,000, or 3.6%, due primarily to the
increase in sales. With the decline in same-store sales for the six months
ended February 28, 1998`, certain fixed expenses in this category have
increased as a percentage of sales, including depreciation, property taxes,
utilities, and repairs. These increases were partially offset by lower
preopening expenses due to fewer store openings as compared to the prior
period. In addition, managers' salaries, which are based on the profitability
of the cafeterias, decreased as a percent of sales due to lower store profits.
General and administrative expenses decreased $674,000, or 6.0%, due primarily
to a lower profit sharing contribution estimated for fiscal 1998 as compared
to the estimate of the contribution for the same period in the prior year.
Interest expense increased $917,000 due to higher average borrowings under the
line-of-credit agreement and lower capitalized interest on qualifying
properties as a result of less construction in the current period.
The provision for income taxes decreased $1,693,000, or 18.9%, due primarily
to lower income from operations. The effective income tax rate increased from
35.1% to 35.6%.
The Year 2000
_____________
Some of the company's older computer programs were written using two digits
rather than four to define the applicable year. As a result, those computer
programs have time-sensitive software that recognizes a date using "00" as
the year 1900 rather than the year 2000. This could cause a system failure
or miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, code invoices, or
engage in similar normal business activities.
The company has assessed the issue and will modify or replace its software
so that its computer systems function properly with respect to dates in
the year 2000 and thereafter. The company does not expect that the year
2000 issue will materially affect future financial results.
Forward-Looking Statements
__________________________
The company wishes to caution readers that various factors could cause the
actual results of the company to differ materially from those indicated by
forward-looking statements made from time to time in news releases, reports,
proxy statements, registration statements, and other written communications
(including the preceding sections of this Management's Discussion and
Analysis), as well as oral statements made from time to time by
representatives of the company. Except for historical information, matters
discussed in such oral and written communications are forward-looking
statements that involve risks and uncertainties, including but not limited to
general business conditions, the impact of competition, the success of
operating initiatives, changes in the cost and supply of food and labor, the
seasonality of the company's business, taxes, inflation, and governmental
regulations.
<PAGE>
Part II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The 1998 annual meeting of shareholders of Luby's Cafeterias, Inc. was
held on January 9, 1998.
(b) The directors elected at the meeting were Lauro F. Cavazos, John B.
Lahourcade, and George H. Wenglein. The other directors whose terms
continued after the meeting are David B. Daviss, Roger R. Hemminghaus,
Barry J.C. Parker, William E. Robson, Walter J. Salmon, and Joanne Winik.
(c) The matters voted upon at the meeting were (i) the election of three
directors to serve until the 2001 annual meeting of shareholders and (ii)
the approval of the appointment of Ernst & Young LLP as auditors for the
1998 fiscal year.
(d) With respect to the election of directors, the results of the voting
were:
Shares Voted Shares Broker
Nominee For Abstained Nonvotes
____________________ _____________ _________ ________
Lauro F. Cavazos 19,603,134 1,173,185 -0-
John B. Lahourcade 19,913,321 862,998 -0-
George H. Wenglein 19,914,645 861,674 -0-
(e) With respect to approval of the appointment of auditors, the results of
the voting were:
Shares voted "for" 20,688,629
Shares voted "against" 22,469
Shares abstaining 65,221
Broker nonvotes -0-
<PAGE>
Part II - OTHER INFORMATION (continued)
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
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 by
the Board of Directors on March 19, 1998.
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).
4(f) First Amendment to Credit Agreement dated January 24, 1997,
among Luby's Cafeterias, Inc., Certain Lenders, and
NationsBank of Texas, N.A. (filed as Exhibit 4(f) to the
company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1997, and incorporated herein by
reference).
4(g) ISDA Master Agreement dated June 17, 1997, between Luby's
Cafeterias, Inc. and NationsBank, N.A., with Schedule and
Confirmation dated July 7, 1997 (filed as Exhibit 4(g) to
the company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1997, and incorporated herein by
reference).
4(h) ISDA Master Agreement dated July 2, 1997, between Luby's
Cafeterias, Inc. and Texas Commerce Bank National
Association, with Schedule and Confirmation dated July 2,
1997 (filed as Exhibit 4(h) to the company's Annual Report
on Form 10-K for the fiscal year ended August 31, 1997,
and incorporated herein by reference).
4(i) Second Amendment to Credit Agreement dated July 3, 1997,
among Luby's Cafeterias, Inc., Certain Lenders, and
NationsBank of Texas, N.A. (filed as Exhibit 4(i) to the
company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1997, 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) Form of Amendment to Deferred Compensation Agreement between
Luby's Cafeterias, Inc. and various officers and former
officers adopted January 14, 1997 (filed as Exhibit 10(b) to
the company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1997, and incorporated herein by
reference).
10(c) 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(d) Amendment to Annual Incentive Plan for Area Vice Presidents
of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed
as Exhibit 10(d) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1997, and
incorporated herein by reference).
10(e) 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(f) Amendment to Incentive Bonus Plan of Luby's Cafeterias, Inc.
adopted January 14, 1997 (filed as Exhibit 10(f) to the
company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1997, and incorporated herein by
reference).
10(g) Luby's Cafeterias, Inc. Incentive Bonus Plan for Fiscal 1998
adopted by the Board of Directors on January 9, 1998.
10(h) 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(i) Amendment to Performance Unit Plan of Luby's Cafeterias,
Inc. adopted January 14, 1997 (filed as Exhibit 10(h) to the
company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1997, and incorporated herein by
reference).
10(j) 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(k) 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(l) Amendment to Management Incentive Stock Plan of Luby's
Cafeterias, Inc. adopted January 14, 1997 (filed as
Exhibit 10(k) to the company's Quarterly Report on Form 10-Q
for the quarter ended February 28, 1997, and incorporated
herein by reference).
10(m) 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(n) Amendment to Nonemployee Director Deferred Compensation Plan
of Luby's Cafeterias, Inc. adopted January 14, 1997 (filed
as Exhibit 10(m) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1997, and
incorporated herein by reference).
10(o) Amendment to Nonemployee Director Deferred Compensation Plan
of Luby's Cafeterias, Inc. adopted by the Board of Directors
on March 19, 1998.
10(p) 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(q) Amendment to Nonemployee Director Stock Option Plan of
Luby's Cafeterias, Inc. adopted January 14, 1997 (filed as
Exhibit 10(o) to the company's Quarterly Report on Form 10-Q
for the quarter ended February 28, 1997, and incorporated
herein by reference).
10(r) 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(s) Luby's Cafeterias, Inc. Supplemental Executive Retirement
Plan dated May 30, 1996 (filed as Exhibit 10(j) to the
company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1996, and incorporated herein by
reference).
10(t) Amendment to Luby's Cafeterias, Inc. Supplemental Executive
Retirement Plan adopted January 14, 1997 (filed as
Exhibit 10(r) to the company's Quarterly Report on Form 10-Q
for the quarter ended February 28, 1997, and incorporated
herein by reference).
10(u) Amendment to Luby's Cafeterias, Inc. Supplemental Executive
Retirement Plan adopted by the Board of Directors on
January 9, 1998.
10(v) Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated
July 18, 1996 (filed as Exhibit 10(k) to the company's
Annual Report on Form 10-K for the fiscal year ended
August 31, 1996, and incorporated herein by reference).
10(w) Retirement Agreement dated March 17, 1997, between Luby's
Cafeterias, Inc. and Ralph Erben (filed as Exhibit 10(t) to
the company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1997, and incorporated herein by
reference).
10(x) Employment Agreement dated September 15, 1997, between
Luby's Cafeterias, Inc. and Barry J.C. Parker (filed as
Exhibit 10(u) to the company's Annual Report on Form 10-K
for the fiscal year ended August 31, 1997, and incorporated
herein by reference).
10(y) Term Promissory Note of Barry J.C. Parker in favor of Luby's
Cafeterias, Inc., dated November 10, 1997, in the original
principal sum of $199,999.00 (filed as Exhibit 10(v) to the
company's Annual Report on Form 10-K for the fiscal year
ended August 31, 1997, and incorporated herein by
reference).
10(z) Stock Agreement dated November 10, 1997, between Barry J.C.
Parker and Luby's Cafeterias, Inc. (filed as Exhibit 10(w)
to the company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1997, and incorporated herein by
reference).
10(aa) Luby's Cafeterias, Inc. Nonemployee Director Phantom Stock
Plan adopted by the Board of Directors on March 19, 1998.
11 Statement re computation of per share earnings.
99 Corporate Governance Guidelines of Luby's Cafeterias, Inc.
adopted by the Board of Directors on March 19, 1998.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter
for which this report is filed.
SIGNATURES
Pursuant to the requirements 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.
LUBY'S CAFETERIAS, INC.
(Registrant)
By: BARRY J.C. PARKER
_____________________________
Barry J. C. Parker
President and
Chief Executive Officer
By: LAURA M. BISHOP
_____________________________
Laura M. Bishop
Senior Vice President and
Chief Financial Officer
Dated: April 13, 1998
<PAGE>
EXHIBIT INDEX
Number Document
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 by the Board of Directors on March 19, 1998.
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).
4(f) First Amendment to Credit Agreement dated January 24,
1997, among Luby's Cafeterias, Inc., Certain Lenders,
and NationsBank of Texas, N.A. (filed as Exhibit 4(f)
to the company's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1997, and incorporated
herein by reference).
4(g) ISDA Master Agreement dated June 17, 1997, between
Luby's Cafeterias, Inc. and NationsBank, N.A.,
with Schedule and Confirmation dated July 7, 1997
(filed as Exhibit 4(g) to the company's Annual Report
on Form 10-K for the fiscal year ended August 31,
1997, and incorporated herein by reference).
4(h) ISDA Master Agreement dated July 2, 1997, between
Luby's Cafeterias, Inc. and Texas Commerce Bank
National Association, with Schedule and Confirmation
dated July 2, 1997 (filed as Exhibit 4(h) to the
company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1997, and incorporated herein
by reference).
4(i) Second Amendment to Credit Agreement dated July 3,
1997, among Luby's Cafeterias, Inc., Certain Lenders,
and NationsBank of Texas, N.A. (filed as Exhibit 4(i)
to the company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1997, 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) Form of Amendment to Deferred Compensation Agreement
between Luby's Cafeterias, Inc. and various officers
and former officers adopted January 14, 1997 (filed
as Exhibit 10(b) to the company's Quarterly Report
on Form 10-Q for the quarter ended February 28, 1997,
and incorporated herein by reference).
10(c) 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(d) Amendment to Annual Incentive Plan for Area Vice
Presidents of Luby's Cafeterias, Inc. adopted
January 14, 1997 (filed as Exhibit 10(d) to the
company's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1997, and incorporated
herein by reference).
10(e) 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(f) Amendment to Incentive Bonus Plan of Luby's
Cafeterias, Inc. adopted January 14, 1997 (filed
as Exhibit 10(f) to the company's Quarterly Report
on Form 10-Q for the quarter ended February 28,
1997, and incorporated herein by reference).
10(g) Luby's Cafeterias, Inc. Incentive Bonus Plan for
Fiscal 1998 adopted by the Board of Directors on
January 9, 1998.
10(h) 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(i) Amendment to Performance Unit Plan of Luby's
Cafeterias, Inc. adopted January 14, 1997 (filed as
Exhibit 10(h) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28,
1997, and incorporated herein by reference).
10(j) 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(k) 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(l) Amendment to Management Incentive Stock Plan of Luby's
Cafeterias, Inc. adopted January 14, 1997 (filed as
Exhibit 10(k) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1997,
and incorporated herein by reference).
10(m) 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(n) Amendment to Nonemployee Director Deferred Compensation
Plan of Luby's Cafeterias, Inc. adopted January 14,
1997 (filed as Exhibit 10(m) to the company's Quarterly
Report on Form 10-Q for the quarter ended February 28,
1997, and incorporated herein by reference).
10(o) Amendment to Nonemployee Director Deferred Compensation
Plan of Luby's Cafeterias, Inc. adopted by the Board
of Directors on March 19, 1998.
10(p) 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(q) Amendment to Nonemployee Director Stock Option Plan
of Luby's Cafeterias, Inc. adopted January 14, 1997
(filed as Exhibit 10(o) to the company's Quarterly
Report on Form 10-Q for the quarter ended February 28,
1997, and incorporated herein by reference).
10(r) 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 10Q for the quarter ended February 29, 1996, and
incorporated herein by reference).
10(s) Luby's Cafeterias, Inc. Supplemental Executive
Retirement Plan dated May 30, 1996 (filed as Exhibit 10(j)
to the company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1996, and incorporated
herein by reference).
10(t) Amendment to Luby's Cafeterias, Inc. Supplemental
Executive Retirement Plan adopted January 14, 1997
(filed as Exhibit 10(r) to the company's Quarterly
Report on Form 10-Q for the quarter ended February 28,
1997, and incorporated herein by reference).
10(u) Amendment to Luby's Cafeterias, Inc. Supplemental
Executive Retirement Plan adopted by the Board of
Directors on January 9, 1998.
10(v) Luby's Cafeterias, Inc. Welfare Benefit Plan Trust dated
July 18, 1996 (filed as Exhibit 10(k) to the company's
Annual Report on Form 10-K for the fiscal year ended
August 31, 1996, and incorporated herein by reference).
10(w) Retirement Agreement dated March 17, 1997, between
Luby's Cafeterias, Inc. and Ralph Erben (filed as
Exhibit 10(t) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28,
1997, and incorporated herein by reference).
10(x) Employment Agreement dated September 15, 1997, between
Luby's Cafeterias, Inc. and Barry J.C. Parker (filed as
Exhibit 10(u) to the company's Annual Report on Form 10-K
for the fiscal year ended August 31, 1997, and
incorporated herein by reference).
10(y) Term Promissory Note of Barry J.C. Parker in favor of
Luby's Cafeterias, Inc., dated November 10, 1997, in
the original principal sum of $199,999.00 (filed as
Exhibit 10(v) to the company's Annual Report on Form 10-K
for the fiscal year ended August 31, 1997, and incorporated
herein by reference).
10(z) Stock Agreement dated November 10, 1997, between Barry J.C.
Parker and Luby's Cafeterias, Inc. (filed as Exhibit 10(w)
to the company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1997, and incorporated herein
by reference).
10(aa) Luby's Cafeterias, Inc. Nonemployee Director Phantom
Stock Plan adopted by the Board of Directors on March 19,
1998.
11 Statement re computation of per share earnings.
99 Corporate Governance Guidelines of Luby's Cafeterias, Inc.
adopted by the Board of Directors on March 19, 1998.
Exhibit 3(b)
AMENDMENT TO BYLAWS OF
LUBY'S CAFETERIAS, INC.
On March 19, 1998, the Board of Directors of Luby's Cafeterias, Inc., by
unanimous vote of the whole Board, elected to be governed by paragraph (2) of
subsection (c) of Section 141 of the Delaware General Corporation Law and
unanimously adopted the following resolution:
RESOLVED: That Section 9 of Article III of the Bylaws of Luby's
Cafeterias, Inc. is hereby amended so as to read in its entirety as
follows:
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 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, and may authorize the seal of the Corporation to be affixed
to all papers which may require it; provided, however, that the
Executive Committee shall have no power or authority with reference to
(i) approving or adopting, or recommending to the stockholders, any
action or matter expressly required by the Delaware General Corporation
Law to be submitted to stockholders for approval or (ii) adopting,
amending or repealing any Bylaw of the Corporation. 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.
<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
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, and may authorize the seal of the Corporation to be affixed to
all papers which may require it; provided, however, that the Executive
Committee shall have no power or authority with reference to (i) approving or
adopting, or recommending to the stockholders, any action or matter expressly
required by the Delaware General Corporation Law to be submitted to
stockholders for approval or (ii) adopting, amending or repealing any Bylaw of
the Corporation. 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(g)
LUBY'S CAFETERIAS, INC.
INCENTIVE BONUS PLAN FOR FISCAL 1998
1. Purpose. The Incentive Bonus Plan for Fiscal 1998 (the "Plan") of
Luby's Cafeterias, Inc. (the "Company') is intended to provide (i) additional
incentives for Participants to improve their job performance, (ii)
encouragement for outstanding employees to become officers, and to help retain
and attract highly talented executives.
2. Participants. Participants include the Executive Vice President,
Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents, and
Assistant Secretary.
3. Cash Bonus Pool. The Company shall establish a Cash Bonus Pool based
upon the sum of target award percentages multiplied by each Participant's
salary. The target award percentages have been set for each level of
Participants by the Compensation Committee.
4. Performance Goals. At the recommendation of the Chief Executive
Officer, the Compensation Committee of the Board of Directors has approved
certain Strategic Objectives and a threshold earnings goal for the Company for
fiscal 1998. If the threshold earnings goal is met or exceeded, the
Compensation Committee will then evaluate the performance of the Company in
achieving the Strategic Objectives and determine what portion of the Cash
Bonus Pool will be approved for awards.
5. Job Performance Evaluations. At the end of each fiscal year, the
management of the Company shall review the job performance of each Participant
during the fiscal year and shall evaluate his or her performance based upon
the achievement of goals and objectives established during the course of the
year. In addition, each Participant will be evaluated on the basis of general
job performance criteria. Such criteria shall include all aspects of job
performance, such as attitude, responsiveness, resourcefulness, initiative,
and ability to communicate effectively with others.
6. Cash Bonuses. Upon completion of the Job Performance Evaluations of
all Participants at the end of the fiscal year, the management of the Company
shall allocate the approved Cash Bonus Pool among the Participants based upon
the performance evaluations. The Company's evaluation of each Participant's
job performance and the Company's determination of the amount to be awarded to
each Participant out of the Cash Bonus Pool shall be final and conclusive and
shall be binding upon all Participants in the Plan. The amount awarded to
each Participant out of the Cash Bonus Pool shall be in addition to his or her
base salary and other benefits.
7. Withholding Tax. The Company shall have the right to deduct from all
payments made under the Plan any taxes required by law to be withheld with
respect to such payments.
8. Interpretation of the Plan. Any disagreement or dispute with respect
to the interpretation or application of the Plan shall be resolved by the
Executive Committee of the Board of Directors of the Company. The decision of
the Executive Committee with respect to any such matter shall be final and
conclusive and shall be binding upon all participants in the Plan.
9. Amendment and Discontinuance of the Plan. The Plan may be
discontinued or amended by the Board of Directors of the Company at any time.
No participant shall be entitled to receive a bonus under the Plan until such
time as the bonus has been awarded in accordance with the Plan.
<PAGE>
Exhibit 10(o)
AMENDMENT TO LUBY'S CAFETERIAS, INC.
NONEMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
On March 19, 1998, the Board of Directors of Luby's Cafeterias, Inc. duly
adopted the following resolution:
RESOLVED: That the Luby's Cafeterias, Inc. Nonemployee Director Deferred
Compensation Plan is hereby amended by adding thereto a new Section 12 reading
as follows:
12.Transfers
At any time during the period from April 1, 1998 through May 31,
1998, any Nonemployee Director may deliver to the Company a written
notification that he or she elects to transfer to the Luby's Cafeterias,
Inc. Nonemployee Director Phantom Stock Plan (the "Phantom Stock Plan")
the entire balance of his or her deferred compensation account
established under this Plan. In the event of such notification to the
Company, the entire balance of the account of the notifying Nonemployee
Director under this Plan as of the date of receipt by the Company of said
notification shall be transferred to and credited to the account of such
Nonemployee Director under the Phantom Stock Plan.
<PAGE>
Exhibit 10(u)
AMENDMENT TO SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN (SERP) OF
LUBY'S CAFETERIAS, INC.
On January 9, 1998, the Board of Directors of Luby's Cafeterias, Inc.
duly adopted the following resolution:
RESOLVED: That Section 1.9 of the Supplemental Executive Retirement Plan
(SERP) of Luby's Cafeterias, Inc. is hereby amended, effective as of
January 1, 1998, to read as follows:
1.9 "Compensation" means only the regular annual base salary
payable to a Participant during the Plan Year, as well as all
bonuses paid to the Participant during the Plan Year (whether
discretionary, formula or contractual). No other forms of
remuneration shall be included as Compensation.
<PAGE>
Exhibit 10(aa)
LUBY'S CAFETERIAS, INC.
NONEMPLOYEE DIRECTOR PHANTOM STOCK PLAN
1. Purpose and Effectiveness. The purpose of the Luby's Cafeterias,
Inc. Nonemployee Director Phantom Stock Plan (the "Plan") is to provide for
the payment to Nonemployee Directors of Luby's Cafeterias, Inc. (the
"Company") of all or a portion of their director retainer fees in the form of
shares of phantom stock ("Phantom Shares") in order to align further the
interests of the directors with those of the shareholders of the Company and
thereby to promote the long-term growth and performance of the Company. The
Plan shall be effective on April 1, 1998 (the "Effective Date").
2. Participants. Participants shall be directors of the Company who
are not employed by the Company or a subsidiary of the Company or any other
business entity in which the Company, directly or indirectly, owns 50% or more
of the capital or profit interest (the "Nonemployee Directors"). A
Nonemployee Director may become a participant by electing to defer all or a
portion of his or her director retainer fees ("Retainer Fees") as provided in
the Plan.
3. Deferral of Retainer Fees. By written notice to the Treasurer of
the Company, a Nonemployee Director may elect to defer all or a portion of his
or her Retainer Fees. Such notice must be received by the Treasurer, or
postmarked, not later than (i) March 31, 1998, for the period April 1 through
December 31, 1998 ("first Plan year") and (ii) December 31 preceding the
beginning of any subsequent calendar year. Deferral elections made under the
Plan with respect to the first Plan year or any subsequent calendar year will
be final and, upon commencement of such year, cannot be amended or revoked in
respect of Retainer Fees for director services rendered during such year.
4. Participants' Accounts. Retainer Fees deferred by a Participant
pursuant to the Plan shall be credited to a Phantom Share account ("Account")
maintained on the books of the Company for such Participant. Deferred
Retainer Fees shall be credited to a Participant's Account on the date such
Retainer Fees would otherwise have been paid.
5. Phantom Shares. Dollar amounts to be credited to an Account shall
be credited in the form of Phantom Shares. The number of Phantom Shares
credited shall be determined in each instance by dividing the dollar credit by
an amount equal to the closing price of a share of the Company's common stock
("Common Stock") as reported by the composite tape of the New York Stock
Exchange (or other reporting system selected by the Board of Directors of the
Company) on the relevant date; or, if no sale of Common Stock is reported for
such date, the next following day for which there is a reported sale. Phantom
Shares shall be credited in whole shares and in fractional shares to the
nearest thousandth of a share.
6. Dividend Equivalents. On each date when a cash dividend is paid by
the Company on the Common Stock, the Account of each Participant shall be
credited with a dollar amount equal to such dividend on one share of Common
Stock multiplied by the number of Phantom Shares in the Account at the close
of business on the dividend record date, which credit shall be converted into
additional Phantom Shares in the manner described in Section 5 hereof.
7. Adjustments. In the event the outstanding shares of Common Stock
are increased or decreased or changed into or exchanged for a different number
or kind of shares or other securities of the Company or another corporation,
through reorganization, merger, consolidation, liquidation, recapitalization,
stock split-up, combination of shares, or dividend payable in Common Stock,
appropriate adjustment in the number and kind of Phantom Shares credited to
the Account of each Participant shall be made so as to provide, as nearly as
practicable, an equivalent interest in the Account. No such adjustment shall
be made in any Account after the Termination Date applicable to that Account.
8. Termination of Directorship. When a Nonemployee Director ceases to
be a director of the Company on account of resignation, retirement, death,
disability, removal, or any other circumstance, his or her last day of service
shall constitute the "Termination Date" for purposes of the Plan. No credits
of Phantom Shares shall be made to the Account of a Participant after his or
her Termination Date.
9. Designation of Beneficiary. A Participant may designate a
beneficiary ("Beneficiary") to whom the Participant's benefits under the Plan
shall be distributed in the event of death of the Participant prior to
settlement of his or her Account. If there is no designated Beneficiary, or
no designated Beneficiary surviving at a Participant's death, his or her
benefits under the Plan shall be distributed to his or her estate. A
Participant's Beneficiary designation must be in writing on a form prescribed
by the Company and must be delivered to the Company prior to the Termination
Date.
10. Payment of Accounts. When a Participant ceases to be a director of
the Company, the Phantom Shares in his or her Account shall be converted on
his or her Termination Date into an equivalent number of shares of Common
Stock (with any fractional share being rounded up to a whole share). As soon
as practicable after the Termination Date, the Company shall issue and deliver
to such Participant, or his or her Beneficiary, a certificate for the number
of shares of Common Stock determined in accordance with this Section 10.
11. Total Shares. The number of shares of Common Stock which may be
issued in satisfaction of Phantom Shares pursuant to the Plan shall not exceed
100,000 shares, unless increased by the Board of Directors in an amendment to
the Plan.
12. Listing and Registration. The Company, in its discretion, may
postpone the issuance and delivery of shares of Common Stock until completion
of such stock exchange listing, or registration, or other qualification of
such shares, under any federal or state law, rule, or regulation, as the
Company may consider appropriate. The Company may require the recipient of
such shares to make such representations and to furnish such information as
the Company may consider appropriate in connection with the issuance of such
shares in compliance with applicable law.
13. Payment of Taxes. It shall be a condition to the Company's
obligation to issue shares of Common Stock pursuant to the Plan that each
Participant or his or her Beneficiary shall pay, or make provision
satisfactory to the Company for payment of, any federal or state taxes which
the Company may be obligated to withhold or collect with respect to the
issuance of such shares.
14. Shareholder Rights. No Participant shall have any rights as an
owner or holder of Common Stock by virtue of his or her Account or by virtue
of his or her ownership of phantom shares. No such rights shall exist or be
deemed to be created until such time as the Phantom Shares in the Account are
converted into shares of Common Stock pursuant to Section 10 hereof.
15. No Right to Continued Service. Nothing contained in the Plan shall
be deemed to confer upon any Nonemployee Director the right to continue to
serve as a director of the Company or the right to be renominated or reelected
as such.
16. Assignment. No right or interest of any Participant or his or her
Beneficiary (or any person claiming through or under either of them) in such
Participant's Account or any distribution or benefit under the Plan shall be
assignable or transferrable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance, or other legal process or in any
manner liable for or subject to the debts or liabilities of such Participant.
17. Unfunded Plan. The Plan and the rights of Participants to receive
benefits under the Plan shall be unfunded and shall not create or be construed
to create a trust or other fiduciary obligation of the Company. All rights of
Participants to receive benefits under the Plan shall constitute unsecured
claims against the general assets of the Company.
18. Tax Consequences. The Plan is intended to be treated as an unfunded
deferred compensation plan under the Internal Revenue Code so that amounts by
which Participants elect to have their compensation reduced pursuant to the
Plan shall not be included in their gross income until such time as the
amounts credited to their Accounts are distributed to them or their
Beneficiaries in the form of shares of Common Stock.
19. Successors and Heirs. The Plan and all properly executed elections
and designations made by any Participant shall be binding upon the Company and
each Participant, and upon any successor in interest or assignee of the
Company, and upon the Beneficiary, heirs and legal representatives of each
Participant.
20. Administration and Interpretation. The Plan shall be administered
by the Board of Directors of the Company. The decision of the Board of
Directors on any matter concerning the administration or interpretation of the
Plan shall be final, conclusive and binding upon all Participants and their
Beneficiaries, heirs and legal representatives. The Board of Directors shall
have no liability for any action taken in good faith with respect to the Plan.
21. Expenses. All costs and expenses incurred in the operation and
administration of the Plan shall be borne by the Company.
22. Amendment or Termination of the Plan. The Plan may be amended, from
time to time, or terminated, at any time, by the Board of Directors; provided,
however, that no amendment or termination shall adversely affect the Account
of any Participant without his or her consent.
23. Term of the Plan. The Plan shall continue in effect from the
Effective Date until terminated by the Board of Directors or until the maximum
number of shares of Common Stock issuable under the Plan have been issued.
24. Governing Law. The Plan shall be governed by, construed under, and
enforced in accordance with the laws of Delaware and, where applicable, the
laws of the United States.
25. Transfers. At any time during the period from the Effective Date
through May 31, 1998, a Nonemployee Director who has previously elected to
defer director's fees pursuant to the Luby's Cafeterias, Inc. Nonemployee
Director Deferred Compensation Plan (the "1995 Plan") may deliver to the
Company a written notification that such Nonemployee Director elects to
transfer to this Plan the entire balance of his or her deferred compensation
account established under the 1995 Plan, to be credited to his or her Account
under this Plan in the form of Phantom Shares. In the event of such
notification to the Company, the Account of the notifying Nonemployee Director
under this Plan shall be credited with the transferred amount as of the date
of receipt by the Company of said notification, which credit shall be in the
form of Phantom Shares determined in accordance with the provisions of Section
5 hereof.
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 six months ended February 28, 1998 and
1997.
Three months ended February 28, 1998:
23,270,675 x shares outstanding for 90 days 2,094,360,750
Divided by number of days in the period 90
_____________
23,270,675
Six months ended February 28, 1998:
23,266,374 x shares outstanding for 18 days 418,794,732
23,266,921 x shares outstanding for 17 days 395,537,657
23,268,328 x shares outstanding for 9 days 209,414,952
23,270,675 x shares outstanding for 137 days 3,188,082,475
_____________
4,211,829,816
Divided by number of days in the period 181
_____________
23,269,778
Three months ended February 28, 1997:
23,329,990 x shares outstanding for 31 days 723,229,690
23,404,092 x shares outstanding for 31 days 725,526,852
23,409,028 x shares outstanding for 28 days 655,452,784
_____________
2,104,209,326
Divided by number of days in the period 90
_____________
23,380,104
Six months ended February 28, 1997:
23,892,819 x shares outstanding for 30 days 716,784,570
23,666,720 x shares outstanding for 31 days 733,668,320
23,281,927 x shares outstanding for 30 days 698,457,810
23,329,990 x shares outstanding for 31 days 723,229,690
23,404,092 x shares outstanding for 31 days 725,526,852
23,409,028 x shares outstanding for 28 days 655,452,784
_____________
4,253,120,026
Divided by number of days in the period 181
_____________
23,497,901
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> FEB-28-1998
<CASH> 3,730
<SECURITIES> 0
<RECEIVABLES> 683
<ALLOWANCES> 0
<INVENTORY> 5,939
<CURRENT-ASSETS> 16,140
<PP&E> 500,023
<DEPRECIATION> 165,640
<TOTAL-ASSETS> 368,765
<CURRENT-LIABILITIES> 39,397
<BONDS> 0
0
0
<COMMON> 8,769
<OTHER-SE> 213,953<F1>
<TOTAL-LIABILITY-AND-EQUITY> 368,765
<SALES> 247,876
<TOTAL-REVENUES> 247,876
<CGS> 139,458
<TOTAL-COSTS> 139,458
<OTHER-EXPENSES> 75,874
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,525
<INCOME-PRETAX> 20,416
<INCOME-TAX> 7,268
<INCOME-CONTINUING> 13,148
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,148
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.57
<FN>
<F1>Other stockholders' equity amount is less cost of treasury stock of
$92,907.
</FN>
</TABLE>
Exhibit 99
Luby's Cafeterias, Inc.
Corporate Governance Guidelines
Adopted March 19, 1998
ROLE AND RESPONSIBILITIES OF BOARD
1. Ethical Business Environment
The Board believes that the long-term success of Luby's is dependent on
the maintenance of an ethical business environment that focuses on
adherence to both the letter and spirit of the law and regulations and
the highest standards of corporate citizenship.
2. Oversight
The Board acknowledges that Luby's has many different stakeholders.
However, the paramount duty of Luby's Board and management is to the
shareholders; the interests of other stakeholders are relevant as a
derivative of the duty to shareholders. The Board is the ultimate
decision making body except for those matters reserved by law to the
shareholders. The management team approved by the Board is charged by
the Board with the day-to-day management of Luby's affairs. The Board
monitors corporate performance against business plans on a regular
basis to evaluate whether the business is being properly managed.
3. Senior Management
The Board selects and regularly evaluates the CEO. The appointment and
regular evaluation of a Chief Operating Officer, if any, will be made
by the Board in conjunction with the CEO. The Board determines the
CEO's compensation and reviews and approves the compensation of senior
management. It periodically reviews succession planning and
management development with the CEO.
4. Strategy
The Board ensures that a strategic planning process is in place, is
used, and produces sound choices. It reviews and approves major
corporate strategies and monitors the implementation of current
strategic initiatives to assess whether they are on schedule, on
budget, and producing effective results.
5. Material Transactions
The Board reviews and approves material transactions not in the
ordinary course of business including significant capital allocations
and expenditures.
6. Internal Controls, Reporting, and Compliance
The Board satisfies itself as to the adequacy of internal controls,
risk management, financial reporting, and compliance with laws and
regulations.
7. Corporate Governance
The Board nominates directors to serve on the Board and ensures that
the structure and practices of the Board provide for sound corporate
governance.
COMPOSITION OF THE BOARD
8. Independent Director
An "Independent Director" is a person who is not a current and,
generally, not a former member of management and has no relationship
or activity that could affect or appear to affect his or her ability
to exercise independent judgment as a director. The Governance
Committee reviews the circumstances in each case and determines when a
Board member or candidate is not independent. The Board will seek to
maintain a substantial majority of independent directors. Various
regulatory agencies have adopted differing concepts of independence
(e.g. SEC, NYSE, IRS). These external definitions are not part of
these Guidelines and should be consulted only for the specific
purposes for which they were intended.
9. Number of Directors
Luby's Bylaws provide for the Board to fix the number of directors at
not less than nine or more than fifteen. The Board currently has nine
members. The Board may adjust this upward to accommodate an
outstanding potential candidate or during periods of transition when
new directors may overlap with retiring directors.
10. Membership Criteria
The Governance Committee is responsible for recommending to the Board
the appropriate skills and characteristics for prospective Board
candidates in the context of the current Board makeup and the perceived
needs of Luby's at that point in time. This assessment should include
issues of general business experience, specialized knowledge,
functional skills, other Board and time commitments, personal
characteristics, age, independence, and diversity.
11. Screening, Selection, and Invitation to Serve
Luby's Bylaws provide that director candidates standing for election by
the shareholders shall be nominated by the Board or by a shareholder as
provided in the Bylaws. Vacancies in the Board shall be filled by
selection of the current directors. The Governance Committee is
responsible for screening potential candidates with input from all
Board members. The COB will coordinate the extension of an invitation
to Board membership.
12. Directors Who Change Principal Job Responsibility
Directors should as a matter of course tender their resignation from
the Board upon retirement, a change of employer, or other significant
change in their professional roles and responsibilities. The Board,
through its Governance Committee, should then consider whether it is in
the best interest of Luby's to accept this resignation or to ask the
director to continue to serve.
13. Retirement Age and Term Limits
A director shall not be eligible to stand for election or reelection to
the Board after reaching the age of 70 years. Except for incumbent
directors as of March 19, 1998, a director will offer his or her
resignation from the Board upon reaching the age of 70 years effective
at the next annual meeting of shareholders. The Board does not believe
that there should be term limits for directors. Rather, the Board
believes that the Governance Committee should consider each Director's
contribution to the Board every three years, prior to his of her
nomination for reelection.
14. Selection of CEO and COB
There is no policy as to whether the offices of the CEO and COB should
be separate and, if separate, whether the COB should be an independent
director. The Board remains free to make these choices in any way it
deems best at the time.
15. Lead Director
If the offices of the CEO and COB are not separate or if the COB is not
considered by the Board to be an independent director, the independent
directors will elect one of their number to serve as Lead Director.
The Lead Director will chair meetings of independent directors, will
facilitate communications between other members of the Board and the
CEO and COB, and will assume other duties which the independent
directors as a whole may designate from time to time. Directors are
always free to communicate directly with the CEO and COB.
16. Limitations on Tenure as Independent COB or Lead Director
An Independent COB or Lead Director serves at the pleasure of the
Board. It is the sense of the Board that a director's service as
Independent COB or Lead Director should generally not extend beyond the
annual meeting of shareholders after three consecutive years of
service.
FUNCTIONING OF THE BOARD
17. Board Meetings
Article III of Luby's Bylaws spells out required procedures for calling
and conducting meetings of the Board in order to conduct corporate
business. The Board sets the number and schedule of Regular Board
meetings for the entire year at the annual meeting of the Board in
January. Currently the Board has five Regular Meetings each year. The
President, Secretary or a majority of directors may call Special
Meetings of the Board as necessary.
18. Board Agendas
The CEO in conjunction with the COB or Lead Director will establish and
publish an agenda for each meeting of the Board. Board members may
suggest items for inclusion on the agenda and, subject to the authority
of the COB and the will of the majority, may raise for discussion at
any Board meeting subjects not on the agenda.
19. Board Materials Distributed in Advance
Information and data that are important to the Board's understanding of
the business of the meeting and presentations on special subjects
should, when practical, be distributed at least one week in advance of
the meeting to permit directors to prepare for the meeting. This will
conserve Board meeting time and allow discussion to focus on questions
and analysis of these materials. Management will try to keep materials
as brief as possible while still providing the desired information.
Lengthy reports or documents, when practical, should be accompanied by
executive summaries. Directors are encouraged to comment on the
adequacy and effectiveness of materials provided.
20. Attendance of Nondirectors at Board Meetings
The CEO may invite members of senior management who are not Board
members to regularly participate in portions of the Board meeting.
Further, the Board encourages the participation at Board meetings of
managers who can provide additional insight into items being discussed
or who have future potential in the Company and who should be given
exposure to the Board. Portions of all Board meetings will be reserved
for private deliberation among Board members.
21. Meetings of Independent Directors
Independent directors will, from time to time, meet privately at the
request of the COB (or Lead Director) or upon the Board's own motion.
These meetings may include a discussion with the CEO.
FUNCTIONING OF COMMITTEES OF THE BOARD
22. Board Committees
The current standing committees of the Board are: Executive, Audit,
Compensation, and Governance. From time to time the Board may create a
new or disband an existing Committee depending on particular interests
of the Board, issues facing the Company, or legal requirements.
23. Committee Charters
Each Committee should, with leadership from its Chair, develop and
maintain a charter describing its duties and responsibilities.
Charters developed or amended will be reviewed by the Governance
Committee and approved by the full Board.
24. Assignment and Rotation of Committee Membership
The Governance Committee in consultation with the COB or Lead Director,
the CEO, and individual Board members, will assign Board members and
chairs to various Committees, subject to Board approval. Assignments
should comply with various applicable regulations (e.g. SEC, NYSE, IRS)
and with the desires of individual members insofar as possible.
Consideration should be given to rotating committee membership and
chairs from time to time generally on a three to five year schedule.
25. Scheduling of Committee Meetings and Committee Agendas
The Chair of each Committee, in consultation with its members, the COB,
and management, determines the frequency, length, and agenda of each
meeting of the Committee.
26. Committee Reports to the Board
The Chair of each Committee will report to the full Board as soon as
practical following a Committee meeting all matters discussed,
decisions reached, and recommendations made for Board approval. The
Chair will have an opportunity to comment on Committee activities at
each Board meeting. Minutes of all Committee meetings will be
distributed to all Board members.
MISCELLANEOUS
27. Board Access to Management
Board members have complete access to Luby's management. Board members
should use judgment to insure that this contact is not distracting to
business operations or that it could be perceived as infringing on the
responsibilities of the CEO. Correspondence from a Board member to a
member of management should be copied to the CEO and COB.
28. Communications with the Public and Various Constituencies
The CEO is responsible for establishing effective communications with
Luby's various constituencies, i.e. press, shareholders, potential
investors, customers, communities, suppliers, creditors, and corporate
partners. Management speaks for Luby's, and Board members should
communicate with these constituencies only with the consent and
generally at the request of management.
29. Assessing Board Performance
Approximately annually, the COB will survey Board members on their
perceptions of the performance and effectiveness of the Board and
solicit suggestions for improving its performance. The objective is to
increase the effectiveness of the Board and not to target individual
Board members. The results of this survey will be reported by the COB
to the full Board.
30. Board Compensation
Luby's policy is to compensate nonmanagement directors competitively
relative to companies of comparable size. The Governance Committee
will annually recommend to the full Board for its consideration
director compensation for the next year.
31. Stock Ownership Guidelines for Directors
The Board believes that each Luby's director should accumulate a
meaningful investment in Luby's stock and has established guidelines
for share ownership. Currently, directors are expected to accumulate,
over time, common shares with a market value of at least $100,000.
Luby's has established a tax deferred Nonemployee Director Phantom
Stock Plan. Beginning in 1999 and until the ownership guidelines are
met, the nonemployee director will receive at least $10,000 of the
annual retainer in phantom stock units to be redeemed for a like number
of common shares when he or she ceases for any reason to be a director.
Once ownership guidelines have been met, the director will not be
obligated to acquire additional phantom stock units or common shares.
32. Review of Guidelines
The Governance Committee is responsible for periodic review of these
Guidelines, as well as consideration of other corporate governance
issues that may, from time to time, merit consideration of the entire
Board.
33. Intent
These Guidelines are intended to be a statement of general principles
to guide the Board in formulating corporate policy. The Guidelines are
not rules or bylaws. They may be amended from time to time by the
Board. In addition, the Board may on occasion depart from the
Guidelines when circumstances indicate that a departure is in the best
interest of the Company and its shareholders.