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 May 31, 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 May 31, 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 Nine Months Ended
May 31, May 31,
1998 1997 1998 1997
____ ____ ____ ____
(Amounts in thousands except per share data)
Sales $131,230 $127,630 $379,106 $368,747
Costs and expenses:
Cost of food 33,151 30,978 95,897 90,021
Payroll and related costs 38,765 37,265 115,477 108,544
Occupancy and other operating
expenses 39,059 38,317 114,933 111,547
General and administrative
expenses 6,658 6,337 17,164 17,517
________ ________ ________ _______
117,633 112,897 343,471 327,629
________ ________ ________ _______
Income from operations 13,597 14,733 35,635 41,118
Interest expense (1,288) (1,078) (3,813) (2,686)
Other income, net 342 926 1,245 1,680
________ ________ ________ _______
Income before income taxes 12,651 14,581 33,067 40,112
Provision for income taxes 4,504 4,998 11,772 13,959
________ ________ ________ _______
Net income $ 8,147 $ 9,583 $ 21,295 $ 26,153
________ ________ ________ _______
Net income per share - basic and
assuming dilution $.35 $.41 $.92 $1.12
________ ________ ________ _______
Cash dividends per share $.20 $.20 $.60 $.60
________ ________ ________ _______
Average number of shares
outstanding 23,271 23,366 23,270 23,453
See accompanying notes.
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
May 31, August 31,
1998 1997
____ ____
(Thousands of dollars)
ASSETS
Current assets:
Cash and cash equivalents $ 2,312 $ 6,430
Trade accounts and other receivables 684 510
Food and supply inventories 4,950 4,507
Prepaid expenses 4,239 3,586
Deferred income taxes 1,071 937
________ ________
Total current assets 13,256 15,970
Property held for sale 9,652 12,680
Investments and other assets - at cost 7,549 6,111
Property, plant, and equipment - at cost, net 336,459 334,017
________ ________
$366,916 $368,778
________ ________
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 10,853 $ 13,584
Dividends payable 4,654 4,653
Accrued expenses and other liabilities 25,140 25,038
Income taxes payable 2,706 ` 2,406
________ ________
Total current liabilities 43,353 45,681
Long-term debt 77,000 84,000
Deferred income taxes and other credits 20,294 20,257
Shareholders' equity:
Common stock 8,769 8,769
Paid-in capital 26,999 26,945
Retained earnings 283,408 276,140
Less cost of treasury stock (92,907) (93,014)
________ ________
Total shareholders' equity 226,269 218,840
________ ________
$366,916 $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)
Nine Months Ended
May 31,
1998 1997
____ ____
(Thousands of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 21,295 $ 26,153
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 15,802 14,913
Increase (decrease) in accrued expenses
and other liabilities 143 (1,617)
Other, net (5,561) (1,354)
________ ________
Net cash provided by operating activities 31,679 38,095
________ ________
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of property held for sale 3,568 2,300
Purchases of land held for future use (948) (12,134)
Purchases of property, plant, and equipment (17,498) (40,839)
________ ________
Net cash used in investing activities (14,878) (50,673)
________ ________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under
stock option plan 42 2,878
Proceeds from long-term debt 658,000 760,000
Reductions of long-term debt (665,000) (711,000)
Purchases of treasury stock --- (21,077)
Dividends paid (13,961) (14,144)
________ ________
Net cash provided by (used in)
financing activities (20,919) 16,657
________ ________
Net increase (decrease) in cash and cash equivalents (4,118) 4,079
Cash and cash equivalents at beginning of period 6,430 2,687
________ ________
Cash and cash equivalents at end of period $ 2,312 $ 6,766
________ ________
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 Nine Months Ended May 31, 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 --- --- --- 26,153 26,153
Common stock issued under
employee benefit plans, net
of shares tendered in partial
payment and including
tax benefits --- 4,320 --- (1,027) 3,293
Cash dividends --- --- --- (14,001) (14,001)
Purchases of treasury stock --- (19,919) --- --- (19,919)
Balance at May 31, 1997 $8,769 $(93,014) $26,945 $278,499 $221,199
______ ________ _______ ________ ________
Balance at August 31, 1997 $8,769 $(93,014) $26,945 $276,140 $218,840
Net income for the period --- --- --- 21,295 21,295
Common stock issued under
employee benefit plans, net
of shares tendered in partial
payment and including
tax benefits --- 107 54 (65) 96
Cash dividends --- --- --- (13,962) (13,962)
______ ________ _______ ________ ________
Balance at May 31, 1998 $8,769 $(92,907) $26,999 $283,408 $226,269
______ ________ _______ ________ ________
See accompanying notes.
</TABLE>
<PAGE>
Part I - FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued).
LUBY'S CAFETERIAS, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 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
reviously 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 $4,118,000 from the end of the
preceding fiscal year to May 31, 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 nine months ended May 31, 1998,
were $18,446,000. As of May 31, 1998, the company owned three undeveloped
land sites and one land site on which a cafeteria is 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 May 31, 1998, the amount outstanding under
this line of credit was $77,000,000. 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 May 31, 1998 compared to the quarter ended May 31, 1997.
______________________________________________________________________
Sales increased $3,600,000, or 2.8%, 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 $2,173,000, or 7.0%. As a percentage of sales, food
costs were higher versus the prior year due to higher commodity prices
resulting from poor weather conditions, new menu item testing, and higher
fish prices. Payroll and related costs increased $1,500,000, or 4.0%, 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 $742,000, or 1.9%, 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 increased $321,000, or 5.1%,
due to higher legal and professional fees associated with the company's
strategic planning project. This increase was partially offset by 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. Lump
sum severance agreements were recorded during both periods.
Interest expense increased $210,000 due primarily to lower capitalized
interest on qualifying properties as a result of less construction in the
current period.
The provision for income taxes decreased $494,000, or 9.9%, due primarily to
lower income from operations. The effective income tax rate increased from
34.3% to 35.6% since the rate in the third quarter of fiscal 1997 was more
significantly impacted by the company restructuring into a holding company.
Nine months ended May 31, 1998 compared to the nine months ended May 31,
1997.
_____________________________________________________________________________
Sales increased $10,359,000, 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 slight 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 $5,876,000, or 6.5%, 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,
new menu item testing, and product promotions featured during the period
which had slightly higher food costs. Payroll and related costs increased
$6,933,000, or 6.4%, 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
$3,386,000, or 3.0%, due primarily to the increase in sales. With the slight
decline in same-store sales for the nine months ended May 31, 1998, certain
fixed expenses in this category have increased as a percentage of sales,
including depreciation, property taxes, utilities, rent, repairs, and group
insurance. 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 $353,000, or 2.0%, 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. This decrease was partially offset by higher legal and professional
fees associated with the company's strategic planning process.
Interest expense increased $1,127,000 due to lower capitalized interest on
qualifying properties as a result of less construction in the current period
and slightly higher borrowing rates under the interest rate swap agreements.
The provision for income taxes decreased $2,187,000, or 15.7%, due primarily
to lower income from operations. The effective income tax rate increased
from 34.8% 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 (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) Bylaws of Luby's Cafeterias, Inc. as currently in effect
(filed as Exhibit 3(c) to the company's Quarterly Report
on Form 10-Q for the quarter ended February 28, 1998,
and incorporated herein by reference).
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 (filed as Exhibit 10(g) to the company's Quarterly
Report on Form 10-Q for the quarter ended February 28,
1998, and incorporated herein by reference).
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 (filed as Exhibit 10(o) to
the company's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1998, and incorporated herein
by reference).
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 (filed as Exhibit 10(u) to
the company's Quarterly Report on Form 10-Q for the
quarter ended February 28, 1998, and incorporated
herein by reference).
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 (filed as Exhibit 10(aa) to the
company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1998, and incorporated herein by
reference).
10(bb) Agreement of Resignation, Severance, Confidentiality,
Non-Solicitation, Arbitration and General Release of All
Claims dated April 30, 1998, between Luby's Cafeterias,
Inc. and William E. Robson.
10(cc) Salary Continuation Agreement dated May 14, 1998,
between Luby's Cafeterias, Inc. and Sue Elliott.
10(dd) Salary Continuation Agreement dated June 1, 1998,
between Luby's Cafeterias, Inc. and Alan M. Davis.
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
(filed as Exhibit 99 to the company's Quarterly Report
on Form 10-Q for the quarter ended February 28, 1998,
and incorporated herein by reference).
(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)
BARRY J.C. PARKER
By: _____________________________
Barry J. C. Parker
President and
Chief Executive Officer
LAURA M. BISHOP
By: _____________________________
Laura M. Bishop
Senior Vice President and
Chief Financial Officer
Dated: July 6, 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) Bylaws of Luby's Cafeterias, Inc. as currently in effect
(filed as Exhibit 3(c) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1998, and
incorporated herein by reference).
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 (filed
as Exhibit 10(g) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1998, and
incorporated herein by reference).
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 (filed as Exhibit 10(o) to the company's
Quarterly Report on Form 10-Q for the quarter ended
February 28, 1998, and incorporated herein by reference).
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 (filed as Exhibit 10(u) to the company's
Quarterly Report on Form 10-Q for the quarter ended
February 28, 1998, and incorporated herein by reference).
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
(filed as Exhibit 10(aa) to the company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1998, and
incorporated herein by reference).
10(bb) Agreement of Resignation, Severance, Confidentiality, Non-
Solicitation, Arbitration and General Release of All Claims
dated April 30, 1998, between Luby's Cafeterias, Inc. and
William E. Robson.
10(cc) Salary Continuation Agreement dated May 14, 1998, between
Luby's Cafeterias, Inc. and Sue Elliott.
10(dd) Salary Continuation Agreement dated June 1, 1998, between
Luby's Cafeterias, Inc. and Alan M. Davis.
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 (filed as
Exhibit 99 to the company's Quarterly Report on Form 10-Q for
the quarter ended February 28, 1998, and incorporated herein
by reference).
Exhibit 10(bb)
AGREEMENT OF RESIGNATION, SEVERANCE, CONFIDENTIALITY,
NON-SOLICITATION, ARBITRATION AND GENERAL RELEASE OF ALL CLAIMS
This AGREEMENT OF RESIGNATION, SEVERANCE, CONFIDENTIALITY, NON-SOLICITATION,
ARBITRATION AND GENERAL RELEASE OF ALL CLAIMS (hereinafter "Agreement") is
made and entered into between William E. Robson (hereinafter "Robson" or
"Employee") and Luby's Cafeterias, Inc. and its subsidiaries and affiliate
organizations and Luby's Restaurants Limited Partnership (hereinafter
"Luby's" or "Employer"), for the consideration and mutual promises
hereinafter stated, as follows:
1. This Agreement shall become effective on the date of execution by Robson.
The parties agree that Robson will receive the following compensation in
exchange for and consideration of this Agreement:
a. Robson will receive his regular monthly salary through July 1, 1998.
b. Beginning on August 1, 1998 and ending on November 1, 2006, Robson
will receive a single monthly check representing the following two (2)
components:
(1) Component One: Three Thousand Dollars ($3,000.00) gross. Component
One is considered previously earned by Robson under a deferred
compensation agreement dated April 5, 1982, and amended thereafter,
as well as a Supplemental Executive Retirement Plan (SERP) effective
December 31, 1995 under which Robson is covered. Component One shall
be paid until November 1, 2006 in 100 monthly payments to Robson, his
spouse or his estate.
(2) Component Two: Five Thousand Dollars ($5,000.00) gross. Component
Two shall be paid until November 1, 2006 in 100 monthly payments,
except as otherwise provided in this Agreement. In the event of
Robson's death before the age of 65, the $5,000.00 per month sum
shall be reduced to $2,500.00 per month which will thereafter be paid
to Robson's surviving spouse during her lifetime for the duration of
the 100-month period.
NOTE: The parties agree that Component One monthly payments will be reported
to Robson and the IRS on Form 1099-R, and Component Two monthly payments will
be reported to Robson and the IRS on Form W-2. The issuance of W-2
statements does not imply that Robson continues in the capacity of an
employee of Luby's.
c. Luby's will continue payment of premiums for Robson's current health
insurance until September 1, 1998. Thereafter, Robson may continue coverage
under Luby's' health insurance program until he reaches the age of 65 as long
as Robson pays the premium (set at the cost to Luby's). Failure by Robson to
timely reimburse Luby's for the cost of health insurance premiums will result
in cancellation of coverage. The provisions of this paragraph dealing with
Robson's right to continue purchasing health insurance benefits under an
existing Luby's program shall remain effective only for so long as Luby's
health plan(s) permit.
d. The parties understand and agree that this Agreement is not intended to
and in no manner waives any existing rights Robson has to exercise stock
options pursuant to the Management Incentive Stock Plan. Provided, however,
that by execution of this agreement, Robson does in all particulars waive his
rights, if any, to receive any benefits under any performance unit awards
granted to Robson. Robson further understands and agrees that he must continue
to abide by the terms of the Management Incentive Stock Plan in order to
preserve and/or avoid waiving his rights under said Plan.
e. The parties understand and agree that Robson has been a participant in
the Luby's Profit Sharing Plan, and said Plan provides him the option to remain
a participant therein until he reaches the age of sixty-five (65). Nothing in
this Agreement is intended to in any way limit Robson's right to participate in
said Plan pursuant to the Plan's policies. Similarly, the parties understand
and agree that Robson has participated in a 401K Plan adopted by Luby's in March
of 1997. Robson, likewise, has the option of continuing to participate in said
401K Plan, provided he pays the annual fee required of all retired participants.
Nothing in this Agreement is intended to in any way affect Robson's rights to
participate in said 401K Plan, subject to the limitations applicable to retired
participants.
f. The parties understand and agree that this Agreement shall in all
particulars terminate Robson's Supplemental Executive Retirement Plan (SERP)
and Robson's deferred compensation Agreement.
g. Effective as of the effective date of this Agreement or sooner, Luby's
will transfer title to the company vehicle (as of March 31, 1998, said vehicle
having a book value of $11,671.00) currently being driven by Robson into
Robson's name. As of the date of transfer of title in said vehicle to Robson
from Luby's, Luby's shall cause to be issued to Robson a statement of the book
value of said vehicle as of the last day of the month immediately preceding the
date of transfer. The meal card as currently available to Robson will continue
as available to other individuals retired from Luby's.
h. Luby's will provide Robson with out-placement service for six (6) months
from the date of execution of this Agreement and will consider extending such
out-placement service if, pursuant to the written opinion of a representative of
the out-placement firm, Robson is actively and aggressively engaged in finding
employment.
2. Robson agrees, contemporaneous with the signing of this Agreement, to resign
as an employee of Luby's Restaurants Limited Partnership as of September 1,
1998, subject to his right to resign prior to said date by giving notice of such
intent, in writing, to Luby's and Robson further agrees to resign as an Officer
and Director of Luby's Cafeterias, Inc. and its subsidiaries effective
immediately upon the execution of this Agreement and as set forth in Exhibit "A"
to this Agreement, attached hereto and incorporated by reference herein. Robson
may (at his election) remain on Luby's Restaurants Limited Partnership's payroll
in a leave of absence capacity for purposes of Luby's' Profit Sharing Plan to
September 1, 1998. In order to protect Robson's rights, Luby's' Board of
Directors will approve his retirement from Luby's Restaurants Limited
Partnership under its current retirement program, effective September 1, 1998.
Upon resignation by Robson, all benefits of employment with Luby's will
terminate except as those specifically set forth in this Agreement. Only those
rights, benefits and payments as specifically set forth herein will be preserved
and, by this Agreement, Robson waives claim to any other benefits. Robson
further acknowledges that, except as specifically set forth elsewhere in this
Agreement, the above payments constitute full satisfaction of all salary,
bonuses, vacation and compensation obligations to Robson on behalf of Luby's.
3. Robson, with full understanding of the contents and legal effect of this
Agreement, promises to and does hereby completely release and forever discharge
Luby's, and any of its respective parent, affiliated or related companies,
divisions, or subsidiaries and its respective officers, directors, agents,
employees, attorneys, successors and assigns ("Released Parties") from any and
all claims, of any and every kind, nature and character, known or unknown,
including any and all claims which Robson may now have, or has ever had, against
the Released Parties which arose or may have arisen, in whole or in part, before
the date of this Agreement, back to the beginning of time, regardless of whether
such claims are real or fanciful or known to Robson at this time, including, but
not limited to, any and all claims, rights, demands, or causes of action,
including, but not limited to causes of action arising out of or in connection
with the employment relationship between Employee and Employer prior to, and as
of the effective date hereof. The foregoing Release includes, but is not
necessarily limited to, any and all claims arising under any federal law such as
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. section 2000
e et seq., the Age Discrimination in Employment Act, 29 U.S.C. section 621 et
seq., the Older Workers' Benefit Protection Act of 1990, 29 U.S.C. section 623
et seq., the Employment Retirement Income Security Act of 1975, as amended,
"ERISA", 29 U.S.C. section 1001 et seq., the Civil Rights Acts appearing at
42 U.S.C. section 1981-88, the Civil Remedies Provisions available pursuant to
18 U.S.C. section 1964, the Americans With Disabilities Act, 42 U.S.C. section
12101 et seq., the Fair Labor Standards Act, 29 U.S.C. section 201 et seq.,
and as amended, the Equal Pay Act of 1963, 29 U.S.C. section 206, any claim
arising out of any state law including the Texas Commission on Human Rights
Act, Texas Labor Code Sections 21.001 et seq.; the Texas Workers' Compensation
Act, Texas Labor Code Sections 401.001 et seq., including Section 451.001
et seq. and any and all other federal, state or local legislation relating to,
governing or protecting employment relationships, employment practices or any
other matters. Also released are any and all claims arising under common law,
including, but not limited to, those for breach of contract, wrongful
termination, breach of the covenant of good faith and fair
dealing, termination for reasons violative of public policy, constructive
discharge, intentional and/or negligent infliction of emotional distress,
inducing breach of contract, interference with contractual relationship,
interference with prospective economic advantage, retaliation, or defamation,
including self-compelled publication. Robson acknowledges that this Agreement
includes a release of any and all damages of whatever nature or extent for which
Robson could have sought recovery.
4. Luby's and any of its respective parent, affiliated or related companies,
divisions, or subsidiaries and its respective officers, directors, agents,
employees, attorneys, successors and assigns with full understanding of the
contents and legal effect of this Agreement, promises to and does hereby
completely release and forever discharge Robson, his assigns, heirs,
administrators and executors from any and all claims, of any and every kind,
nature and character, known and unknown including any and all claims which
Luby's may now have, or has ever had, against Robson which arose or may have
arisen, in whole or in part, before the date of this Agreement, back to the
beginning of time, regardless of whether such claims are real or fanciful or
known to Luby's at this time, including, but not limited to, any and all claims,
rights, demands, or causes of action, including, but not limited to causes of
action arising out of or in connection with the employment relationship between
Employee and Employer prior to, and as of the effective date thereof. The
parties understand and agree that the indemnification portions of Article VIII
of Luby's' bylaws remain in effect. The parties further understand and agree
that nothing in this Agreement shall be construed to amend and/or provide any
greater rights to indemnity for Employee than those provided in Article VIII of
Luby's' bylaws.
5. In consideration of the mutual covenants set forth herein, Robson and Luby's
agree that Employer's participation in and execution of this Agreement does not
in any way constitute an admission by the Employer of any liability to Employee
for any breach of any aspect of the employment relationship which existed
between Employer and Employee, including, but not limited to the commission of
any tortious or other acts by Employer against Employee or any other unlawful
act whatsoever. Employee understands that this Agreement does not constitute an
acknowledgment by Employer of any liability to or any wrongful act toward him.
6. It is mutually agreed and understood by Robson and Luby's that this
Agreement shall resolve any and all obligations the parties have to one another
arising out of the employment relationship and contractual terms which existed
between Robson and Luby's, except as specifically set forth in this Agreement.
It is also the understood purpose and intent of this Agreement to resolve any
and all claims which Employee may have against Employer and which could be
asserted against Employer arising out of the relationship which has at any time
existed between Robson and Luby's.
7. Employee acknowledges that the previously existing employment relationship
between him and Employer has at all times been one of employment at will, with
either party having had the right to terminate the employment relationship at
any time, with or without cause, or other justification. Such mutual right of
termination is and has been in full force and effect throughout the entire
period of the employment relationship.
8. Robson acknowledges that Luby's has heretofore paid him all wages, bonus
and vacation pay to which Employee was due as of the close of business on the
effective date of this Agreement. These payments were due to Employee and are
not consideration for this Agreement. Robson agrees and understands that the
compensation provided pursuant this Agreement includes any and all benefits
owing and due to him arising from the employment relationship prior to and as of
the effective date hereof, including, but not limited to all unused vacation,
bonus pay, wages, salaries or other compensation and all other terms and
conditions of employment.
9. Robson, having been an officer and member of the Board of Directors of
Luby's prior to his resignation, agrees that in said capacities he owed a duty
of loyalty to Luby's as well as a fiduciary duty to Luby's and its stockholders,
and, therefore, Robson agrees not to use or provide to any third party any trade
secrets, confidential or proprietary information obtained by him from Luby's
unless specifically agreed to in writing by Employer. In addition, Robson
specifically agrees to refrain from solicitation for employment and agrees to
refrain from assisting another in the solicitation for employment of any current
or future management level employee of Luby's or its affiliates (including, but
not limited to Water Street) or any non-management level employee who, at the
date of solicitation, has ten (10) years of service with Luby's and/or its
affiliate(s) (including, but not limited to, Water Street) organizations. In
this regard, the parties understand and agree that the term "management level
employee" shall include all officers and/or directors of Luby's or any of its
affiliate organizations and all cafeteria managers, associate managers,
assistant managers and/or manager trainees. Robson agrees that he will not
interfere in any employment relationship which exists between Luby's and any
current or future management level employee or non-management level employee
with ten (10) or more years of service with Luby's. Should Robson commence
employment with and/or provide services of any form on behalf of any enterprise
whose primary line of business is the operation of conventional cafeterias, all
Component Two payments referenced in Paragraph 1(b)(2) of this Agreement shall
cease as of the date of such violation. Robson and Luby's agree that if Robson
violates any non-solicitation provisions, Employer's obligation to make the
Component Two monthly payments as set forth in this Agreement will cease as of
the date of such violation. Termination of these payments under this provision
will not affect the remaining obligations, waivers and releases contained in
this Agreement. The parties agree that Luby's can enforce Robson's promises not
to solicit employees, above described, through a court proceeding seeking
injunctive and monetary damage relief in addition to the other provisions of
this Agreement. Robson further agrees that he will not make derogatory or
disparaging remarks regarding Luby's, its officers, directors, and/or members of
management. Additionally, Robson shall make no derogatory or disparaging
remarks concerning his employment with or the circumstances surrounding his
resignation from Luby's and Luby's agrees to make no derogatory or disparaging
remarks concerning Robson's employment with Luby's or in regards to the
circumstances surrounding his resignation.
10. On or before the effective date of this Agreement, Robson shall return to
Employer any and all property of Employer, except as provided in paragraph
(1)(g) of this Agreement, in his possession or custody, such as keys, credit
cards and documents.
11. Robson acknowledges that, except as expressly set forth herein, no
representations of any kind or character have been made by or on behalf of
Employer to induce his execution of this document. Robson further states that
the only representations made in order to obtain his consent to this Agreement
are stated herein and that he is signing this Agreement voluntarily and without
coercion, intimidation or threat of retaliation. Robson hereby acknowledges
that he has been advised (and has had an adequate opportunity) to have this
document reviewed by an attorney or representative of his choice acting on his
behalf and that the contents of this document have been explained to the
Employee and he understands them in full.
12. Employee further understands and acknowledges that Employer has offered to
provide him a period of at least twenty-one (21) days to consider whether to
execute this Agreement. Both Employee and Employer further understand and
acknowledge that Employee is not required to wait until the expiration of said
21-day period to advise Employer whether he has determined to execute this
Agreement.
13. Employer understands and acknowledges that, should Employee in fact execute
this Agreement, he shall have a period of seven (7) calendar days following the
date of such execution in which to revoke this Agreement. Both Employee and
Employer further understand and acknowledge that this Agreement shall not become
effective or enforceable until Employee has executed this Agreement and the
seven calendar day period has expired without Employee exercising his right to
revoke this Agreement. If Employee chooses to revoke this Agreement, he shall
do so in writing by delivering such writing in person to Barry J.C. Parker at
the offices of Luby's.
14. The parties agree that, except as expressly provided herein, all disputes
related to the terms and conditions of this Agreement, including interpretation
of those terms and conditions and claims that this Agreement has been breached,
shall be submitted to final and binding arbitration in accordance with the
provisions of the Federal Arbitration Act ("FAA"), 9 U.S.C. section 1, et seq.
If for any reason the FAA is found to be inapplicable, such action may be
commenced pursuant to the Texas General Arbitration Act, TEX. CIV. PRAC. &
REM. CODE ANN. section 171.001 (Vernon Supp. 1998). The parties agree to the
following terms:
a. Agreement to Arbitrate. The parties recognize and agree, in lieu of any
other state or federal law, statute, provision, and/or requirement that should
any dispute, claim, or controversy arise between the parties concerning the
interpretation and/or application of the terms of this Agreement and/or any
other disputes between the parties that arose, or may have arisen, as a result
of the employment relationship between Robson and Luby's and/or its affiliates
and/or Robson's status as an officer and/or director of Luby's, the parties must
submit such dispute(s) to final and binding arbitration as the exclusive remedy
to all parties herein. The forum will be Bexar County, San Antonio, Texas.
Employer and Employee further agree that such agreement to arbitrate shall not
encompass any claims by Employer or Employee for injunctive or equitable relief.
b. Selection of Arbitrator. Employer and Employee agree that any dispute,
claim or controversy described above which cannot otherwise be settled amicably
between the parties in a mutually agreeable fashion, shall, upon the written
request of one party served upon the other, be submitted to and settled by
arbitration in accordance with the provisions of the Federal Arbitration Act, 9
U.S.C. section 1-15, as amended. Each of the parties to this Agreement shall
appoint one person as an arbitrator to hear and determine such disputes, and if
they should be unable to agree, then the two arbitrators shall choose a third
arbitrator from a panel made up of experienced arbitrators selected pursuant to
the rules and procedures set forth in the "Employment Dispute Mediation and
Arbitration Procedure" manual of Conflict Solutions, LLC ("CSL"). "CSL" may be
contacted at: 112 E. Pecan, 25th Floor, San Antonio, Texas, 78205; (210) 227-
8060; fax (210) 227-4268.
c. Authority of Arbitrator. The parties agree that a decision by the
arbitrator so selected shall be final and binding upon both parties, their
heirs, representatives, and/or assigns. The arbitrator shall have exclusive
authority to determine the arbitrability of any dispute. The arbitrator shall
issue a written report in which he fully explains the reasons for his decision
and the results reached. The arbitrator shall issue such report within thirty
(30) calendar days following the close of the hearing and/or the date of the
receipt of the transcript (if any) of the hearing, or within such further time
as is mutually agreed to by the parties. The award of the arbitrator shall be
final and judgement upon the award may be entered in any state or federal court
having jurisdiction.
d. Costs. The parties will share equally the cost of the arbitrator as to
fees and expenses. Each party will be required to pay their own expenses, such
as cost of counsel, witnesses, and copies of transcript (if any) ordered, except
that the arbitrator shall have the authority to assess costs against the losing
party and to award reasonable attorney's fees to the prevailing party where such
award would be permitted under the law governing the claims involved.
e. Status, Pending Arbitration. Both parties hereto agree that in the
event that either party alleges a violation of this agreement that either party
may seek injunctive relief. In the event a Court of competent jurisdiction
determines that injunctive relief is proper, then both parties hereto agree that
the term of any injunctive relief will continue through the date of the decision
of the arbitrator becomes final.
15. Robson and Luby's agree that the monies paid to Robson hereunder are gross
amounts due, with Luby's being required to make such deductions therefrom as
required by applicable State and/or Federal taxing authorities. Robson is
solely responsible for the payment of all assessments and/or taxes due, or
allegedly due, by him to such taxing authorities for the sums received. Robson
further agrees to indemnify Luby's in the event of any taxing authority seeking
payment from Luby's of Robson's taxes and/or assessments that are due by Robson
to any taxing authority.
16. This Agreement shall be binding on Robson's representatives, counsel,
heirs, legatees, executors, administrators, successors and assigns, and shall
inure to the benefit of Luby's and the released parties, its successors, and
assigns and its officers, directors, agents and Employees.
17. This Agreement shall be construed and governed by the laws of the State of
Texas with venue in Bexar County. The parties hereto further agree that if, for
any reason, any provision hereof is unenforceable, the remainder of this
Agreement shall nonetheless remain binding and in effect.
18. This Agreement constitutes the complete understanding between Robson and
Luby's and supersedes any and all prior agreements, promises and inducements
concerning the subject matter, except as expressly set forth herein.
DATED at San Antonio, Bexar County, Texas this 30th day of April, 1998.
WILLIAM E. ROBSON
____________________________________
William E. Robson
LUBY'S CAFETERIAS, INC. AND ITS
SUBSIDIARIES AND AFFILIATE
ORGANIZATIONS AND LUBY'S
RESTAURANTS LIMITED PARTNERSHIP
BARRY J.C. PARKER
___________________________________
By: Barry J.C. Parker
President
STATE OF TEXAS
COUNTY OF BEXAR
BEFORE ME, this day personally appeared William E. Robson, who after first
being sworn, did state and depose on his oath that he is the person whose
signature appears above, and that he has executed the foregoing Agreement of
Resignation, Severance, Confidentiality, Non-Solicitation, Arbitration and
General Release of All Claims for the purposes and consideration therein
expressed.
WITNESS MY HAND AND SEAL OF OFFICE, this 30th day of April, 1998.
RENE ALFARO, JR.
___________________________________________
Notary Public in and for the State of Texas
STATE OF TEXAS
COUNTY OF BEXAR
BEFORE ME, this day personally appeared Barry J.C. Parker, who after first
being sworn, did state and depose on his oath that he is the person whose
signature appears above, and that he has executed the foregoing Agreement of
Resignation, Severance, Confidentiality, Non-Solicitation, Arbitration and
General Release of All Claims for the purposes and consideration therein
expressed.
WITNESS MY HAND AND SEAL OF OFFICE, this 7th day of April, 1998.
DEBRA L. WAINSCOTT
___________________________________________
Notary Public in and for the State of Texas
<PAGE>
EXHIBIT "A"
TO: Barry J.C. Parker
FROM: William E. Robson
SUBJECT: Resignation
DATE: April 30, 1998
I hereby resign from employment with Luby's Restaurants Limited Partnership
effective September 1, 1998, which resignation is irrevocable and, as an
Officer and Director of Luby's Cafeterias, Inc. and its subsidiaries and
affiliate organizations and Luby's Restaurants Limited Partnership, effective
as of the date of this memorandum.
WILLIAM E. ROBSON
______________________________
William E. Robson
<PAGE>
Exhibit 10(cc)
SALARY CONTINUATION AGREEMENT
This agreement is made and entered into as of May 14, 1998, between LUBY'S
CAFETERIAS, INC., a Delaware corporation (the "Company"), and SUE ELLIOTT
("Employee").
1. Employment. Employee has accepted employment with the Company as its
Senior Vice President-Human Resources. In connection with such
employment, the Company has agreed to a continuation of Employee's salary under
certain circumstances, as set forth herein.
2. Salary Continuation. If the employment of Employee is terminated by
the Company without good cause (as hereinafter defined) prior to May 14, 2000,
the Company will continue to pay Employee's regular monthly salary until the
later of (a) May 14, 2000, or (b) the expiration of 12 months after the date
such employment is terminated by the Company; provided, however, that no salary
payments shall be made subsequent to the date on which Employee accepts
employment with another employer.
3. Good Cause Defined. The term "good cause" as used in this Agreement
shall mean (a) willful and continued failure of Employee to substantially
perform his duties as a senior officer of the Company, or (b) Employee's
willfully engaging in gross misconduct materially injurious to the Company.
4. Termination for Good Cause. If the Employment of Employee is
terminated by the Company for good cause, no salary payments shall thereafter
be made by the Company to Employee.
Executed in duplicate originals as of the date first above written.
LUBY'S CAFETERIAS, INC.
BY: BARRY J.C. PARKER
________________________
Barry J.C. Parker
President and
Chief Executive Officer
SUE ELLIOTT
________________________
Sue Elliott
<PAGE>
Exhibit 10(dd)
SALARY CONTINUATION AGREEMENT
This agreement is made and entered into as of June 1, 1998, between LUBY'S
CAFETERIAS, INC., a Delaware corporation (the "Company"), and ALAN DAVIS
("Employee").
1. Employment. Employee has accepted employment with the Company as its
Senior Vice President-Real Estate Development. In connection with such
employment, the Company has agreed to a continuation of Employee's salary under
certain circumstances, as set forth herein.
2. Salary Continuation. If the employment of Employee is terminated by
the Company without good cause (as hereinafter defined) prior to June 1, 2000,
the Company will continue to pay Employee's regular monthly salary until the
later of (a) June 1, 2000, or (b) the expiration of 12 months after the date
such employment is terminated by the Company; provided, however, that no salary
payments shall be made subsequent to the date on which Employee accepts
employment with another employer.
2. Good Cause Defined. The term "good cause" as used in this Agreement
shall mean (a) willful and continued failure of Employee to substantially
perform his duties as a senior officer of the Company, or (b) Employee's
willfully engaging in gross misconduct materially injurious to the Company.
3. Termination for Good Cause. If the Employment of Employee is
terminated by the Company for good cause, no salary payments shall thereafter
be made by the Company to Employee.
Executed in duplicate originals as of the date first above written.
LUBY'S CAFETERIAS, INC.
By: BARRY J.C. PARKER
_________________________
Barry J.C. Parker
President and
Chief Executive Officer
ALAN DAVIS
_________________________
Alan Davis
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 nine months ended May 31, 1998 and 1997.
Three months ended May 31, 1998:
23,270,675 x shares outstanding for 92 days 2,140,902,100
Divided by number of days in the period 92
_____________
23,270,675
Nine months ended May 31, 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 229 days 5,328,984,575
_____________
6,352,731,916
Divided by number of days in the period 273
_____________
23,270,080
Three months ended May 31, 1997:
23,410,574 x shares outstanding for 31 days 725,727,794
23,406,574 x shares outstanding for 30 days 702,197,220
23,280,909 x shares outstanding for 31 days 721,708,179
_____________
2,149,633,193
Divided by the number of days in the period 92
_____________
23,365,578
Nine months ended May 31, 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
23,410,574 x shares outstanding for 31 days 725,727,794
23,406,574 x shares outstanding for 30 days 702,197,220
23,280,909 x shares outstanding for 31 days 721,708,179
_____________
6,402,753,219
Divided by the number of days in the period 273
_____________
23,453,308
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> MAY-31-1998
<CASH> 2,312
<SECURITIES> 0
<RECEIVABLES> 684
<ALLOWANCES> 0
<INVENTORY> 4,950
<CURRENT-ASSETS> 13,256
<PP&E> 506,800
<DEPRECIATION> 170,341
<TOTAL-ASSETS> 366,916
<CURRENT-LIABILITIES> 43,353
<BONDS> 0
0
0
<COMMON> 8,769
<OTHER-SE> 217,500<F1>
<TOTAL-LIABILITY-AND-EQUITY> 366,916
<SALES> 379,106
<TOTAL-REVENUES> 379,106
<CGS> 211,374
<TOTAL-COSTS> 211,374
<OTHER-EXPENSES> 114,933
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,813
<INCOME-PRETAX> 33,067
<INCOME-TAX> 11,772
<INCOME-CONTINUING> 21,295
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,295
<EPS-PRIMARY> 0.92
<EPS-DILUTED> 0.92
<FN>
<F1>Other stockholders' equity amount is less cost of treasury stock of $92,907.
</FN>
</TABLE>
