SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. )
Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only [as permitted by Rule 14a-
6(e)(2)]
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
LUBY'S, INC.
_____________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
_____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ________________________________________
2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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December 1, 1999
Dear Shareholders:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders of
Luby's, Inc. to be held on Friday, January 14, 2000, at 9:00 a.m., at the Omni
San Antonio Hotel, 9821 Colonnade Boulevard, San Antonio, Texas. We hope that
you will be able to attend the meeting. Matters on which action will be taken
at the meeting are explained in detail in the notice and proxy statement
following this letter.
We hope as many of you as possible will attend the meeting in person. Whether
or not you expect to be present and regardless of the number of shares you own,
please mark, sign, and mail the enclosed proxy in the envelope provided.
Sincerely,
BARRY J.C. PARKER
__________________
Barry J.C. Parker
President and
Chief Executive Officer
DAVID B. DAVISS
__________________
David B. Daviss
Chairman of the Board
LUBY'S, INC.
2211 Northeast Loop 410
P. O. Box 33069
San Antonio, Texas 78265-3069
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 14, 2000
To the Shareholders of
LUBY'S, INC.
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of
Luby's, Inc., a Delaware corporation, will be held at the Omni San Antonio
Hotel, 9821 Colonnade Boulevard, San Antonio, Texas, on Friday, January 14,
2000, at 9:00 a.m., local time, for the following purposes:
(1) To elect four directors to serve until the 2003 Annual Meeting of
Shareholders;
(2) To approve the amendment and restatement of the Nonemployee Director
Stock Option Plan;
(3) To approve the appointment of auditors for the 2000 fiscal year;
and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
In accordance with the Bylaws of the Company and a resolution of the Board
of Directors, the record date for the meeting has been fixed at November 16,
1999. Only shareholders of record at the close of business on that date will
be entitled to vote at the meeting or any adjournment thereof.
A complete list of shareholders entitled to vote at the meeting will be on
file at the Company's corporate office at 2211 Northeast Loop 410, San Antonio,
Texas, for a period of ten days prior to the meeting. During such time, the
list will be open to the examination of any shareholder during ordinary
business hours for any purpose germane to the meeting.
Shareholders who do not expect to attend the meeting in person are urged
to sign the enclosed proxy and return it promptly. A return envelope is
enclosed for that purpose.
LUBY'S, INC.
James R. Hale
Secretary
Dated: December 1, 1999
LUBY'S, INC.
2211 Northeast Loop 410
P. O. Box 33069
San Antonio, Texas 78265-3069
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Luby's,
Inc., a Delaware corporation (the "Company"), to be voted at the 2000 Annual
Meeting of Shareholders on January 14, 2000, or at any adjournment thereof.
This proxy statement and the accompanying proxy are being mailed to
shareholders on or about December 1, 1999.
THE COMPANY
The Company was restructured into a holding company on February 1, 1997,
at which time all of the operating assets were transferred to Luby's
Restaurants Limited Partnership, a Texas limited partnership composed of two
wholly owned indirect corporate subsidiaries of the Company. All restaurant
operations are conducted by the partnership. Unless the context indicates
otherwise, the word "Company" as used herein includes the partnership and the
consolidated corporate subsidiaries of Luby's, Inc. On January 11, 1999,
Luby's Cafeterias, Inc. changed its name to Luby's, Inc.
VOTING AND PROXIES
Only holders of record of common stock of the Company as of the close of
business on November 16, 1999, will be entitled to vote at the meeting. There
were 22,420,375 shares of common stock outstanding on the record date,
exclusive of 4,982,692 treasury shares. Each share of common stock outstanding
is entitled to one vote. A majority of the shares outstanding will constitute a
quorum at the meeting.
All shares represented by proxies will be voted in accordance with the
shareholders' directions. If the proxy card is signed and returned without any
direction given, shares will be voted in accordance with the recommendations of
the Board of Directors as described in this proxy statement. Any shareholder
giving a proxy may revoke it at any time before the proxy is voted by giving
written notice of revocation to the Secretary of the Company, by submitting a
later-dated proxy, or by attending the meeting and voting in person.
The election of nominees for director requires a plurality of the votes
cast. Approval of the amendment and restatement of the Nonemployee Director
Stock Option Plan requires the affirmative vote of a majority of the shares
present at the meeting in person and by proxy. Approval of the appointment of
auditors requires the affirmative vote of a majority of the shares present at
the meeting in person and by proxy. Abstentions and broker nonvotes will be
included in determining the presence of a quorum at the meeting. Broker
nonvotes and abstentions will not be included in determining the number of
votes cast on any matter.
The Company's Bylaws provide that candidates to stand for election as
directors at an annual meeting of shareholders shall be nominated by the Board
of Directors. Candidates may also be nominated by any shareholder of record
entitled to vote at the meeting, provided the shareholder gives timely notice
thereof. To be timely, such notice shall be delivered in writing to the
Secretary of the Company at the principal executive offices of the Company not
later than 90 days prior to the date of the meeting of shareholders at which
directors are to be elected and shall include (i) the name and address of the
shareholder who intends to make the nomination, (ii) the name, age, and
business address of each nominee, and (iii) such other information with respect
to each nominee as would be required to be disclosed in a proxy solicitation
relating to an election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934.
ELECTION OF DIRECTORS
The Bylaws of the Company provide for a Board of Directors divided into
three classes, as nearly equal in number as possible, with the members of each
class to serve three-year terms. In accordance with the Bylaws, the Board has
fixed the number of directors at twelve. The persons who have been nominated
by the Board of Directors for election to serve until the 2003 Annual Meeting
of Shareholders and until their successors are duly elected and qualified are
Robert T. Herres, Barry J.C. Parker, Walter J. Salmon, and Joanne Winik. The
Board of Directors recommends a vote FOR such nominees.
The proxies named in the accompanying proxy, who have been designated by
the Board of Directors, intend to vote for the above mentioned nominees for
election as directors, unless otherwise specified. Such nominees have
indicated a willingness to serve as directors, but should any of them decline
or be unable to serve, the persons named as proxies may vote for another person
in the place of such nominee according to their best judgment in the interest
of the Company.
The following information is furnished with respect to each of the
nominees and for each of the other eight directors whose terms will continue
after the meeting. Such information includes all positions with the Company
and principal occupations during the last five years.
Nominees for Election to Terms Expiring in 2003
ROBERT T. HERRES is Chairman and Chief Executive Officer of USAA
(insurance and financial services) since 1993. He is 67 and is a
director of USAA. He is a retired General (USAF) and was formerly
Vice Chairman the Joint Chiefs of Staff.
BARRY J.C. PARKER is President and Chief Executive Officer of the Company
(since 1997). From 1989 to 1996 he was Chairman of the Board,
President, and Chief Executive Officer of County Seat Stores, Inc., a
casual apparel chain. He was a principal of Hoak Capital Corporation
from January to October 1997. He is 52 and has been a director and
officer of the Company and a member of the Executive Committee since
October 1997. He is a trustee of Prentiss Properties Trust.
WALTER J. SALMON is Emeritus Professor, Harvard Graduate School of
Business Administration (since 1996). Prior thereto he was Stanley
Roth, Sr. Professor of Retailing, Harvard Graduate School of Business
Administration. He is 69 and has been a director of the Company
since 1979. He is a member of the Audit Committee and the Corporate
Governance Committee. He is a director of Circuit City Stores, Inc.;
Cole National Corporation; The Neiman Marcus Group; Hannaford Bros.
Co.; Harrah's Entertainment, Inc.; Petsmart, Inc.; The Quaker Oats
Company; and Tufts Associated Health Plans, Inc. When Dr. Salmon
reaches age 70 on November 16, 2000, he will be required under the
Company's Corporate Governance Guidelines to tender his resignation
as a director, effective at the 2001 Annual Meeting of Shareholders.
JOANNE WINIK is President, General Manager, and a director of KLRN-TV,
San Antonio's Pubic Broadcasting Service affiliate. She is 59 and
has been a director of the Company since 1993. She is Chairman of
the Corporate Governance Committee. She is a director of PBS (Public
Broadcasting System).
Incumbent Directors Whose Terms Expire in 2001
RONALD K. CALGAARD is an investor. He was President of Trinity University
from 1979 to 1999. He is 62 and has been a director of the Company
since 1998. He is a member of the Compensation Committee. He is a
director of Plymouth Commercial Mortgage Company and Valero Energy
Corporation and is Chairman of The Trust Company, N.A.
LAURO F. CAVAZOS is Professor of Family Medicine and Community Health,
Tufts University School of Medicine (since 1996) and education and
management consultant (since 1991). He was Acting Chair, Department
of Family Medicine and Community Health, Tufts University School of
Medicine (1997-1999) and Acting Chair, Community Health, Tufts
University School of Medicine (1994-1997). He is 72 and has been a
director of the Company since 1993. He is Chairman of the Audit
Committee and a member of the Corporate Governance Committee. He is
a director of the Nellie Mae Foundation.
JOHN B. LAHOURCADE is an investor. He served as Chairman of the Board of
the Company from 1988 to 1996 and from March to October 1997. He
served as Acting Chief Executive Officer from March to May 1997.
He is a member of the Executive Committee. He has been employed by
the Company as a consultant since January 1996. He is 75 and has
been a director of the Company since 1970.
GEORGE H. WENGLEIN is retired Chairman of the Board and one of the
founders of the Company. He was employed by the Company as a
consultant prior to January 1998. He is 82 and has been a director
of the Company since 1959. He is a member of the Executive
Committee.
Incumbent Directors Whose Terms Expire in 2002
JUDITH B. CRAVEN is a Physician Administrator. She was President of
United Way of the Texas Gulf Coast (1992-1998). She is 54 and has
been a director of the Company since 1998. She is a member of the
Compensation Committee. She is a director of A.H. Belo Corporation,
Compaq Computer Corp., Sysco Corporation, VALIC, and the Houston
Branch of the Federal Reserve Bank of Dallas.
DAVID B. DAVISS is Chairman of the Board of the Company (since 1997). He
was Acting Chief Executive Officer from May to October 1997. He is
63 and has been a director of the Company since 1984. He is
Chairman of the Executive Committee and a member of the Corporate
Governance Committee. He is an advisory director of Austin Trust
Company and a director of Bartlett Cocke, Inc.
ARTHUR R. EMERSON is Vice President and General Manager of the Texas
Stations of the Telemundo television network. He is 55 and has been
a director of the Company since 1998. He is a member of the Audit
Committee. He is a director of USAA Federal Savings Bank.
ROGER R. HEMMINGHAUS is Chairman of the Board and a director of Ultramar
Diamond Shamrock Corporation, where he also served as Chief Executive
Officer until 1999 and as President until 1996. He is 63 and has
been a director of the Company since 1989. He is Chairman of the
Compensation Committee and a member of the Executive Committee and
the Corporate Governance Committee. He is Chairman of the Federal
Reserve Bank, Eleventh District, and a director of New Century
Energies, Inc., and billserv.com.
INFORMATION CONCERNING DIRECTORS AND COMMITTEES
Meetings and Compensation of Directors
During the fiscal year ended August 31, 1999, the Board of Directors held
six meetings. Each nonofficer director is paid an annual retainer of $20,000
plus a meeting fee of $1,500 for each meeting of the Board of Directors which
he or she attends and a meeting fee of $1,000 for each meeting of any Board
committee which he or she attends (except that the meeting fee for the chair of
the committee is $1,200 per meeting). The Chairman of the Board, in his
discretion, may reduce meeting fees by 50% when the meeting involved is brief
or telephonic.
Nonemployee Director Stock Options
Under the Company's Nonemployee Director Stock Option Plan (the "Option
Plan"), nonemployee directors are periodically granted nonqualified options to
purchase shares of the Company's common stock at an option price equal to 100%
of fair market value on the date of grant. Each option terminates upon the
expiration of ten years from the date of grant or one year after the optionee
ceases to be a director, whichever first occurs. An option may not be
exercised prior to the expiration of five years from the date of grant, subject
to certain exceptions specified in the Option Plan.
Pursuant to the provisions of the Option Plan, options were granted on
January 8, 1999, to Ronald K. Calgaard, Judith B. Craven, Arthur R. Emerson,
and Roger R. Hemminghaus for 5,000 shares each at an option price of $15.4375
per share.
The Option Plan is proposed to be amended and restated as discussed
elsewhere in this proxy statement.
Nonemployee Director Phantom Stock Plan
Under the Company's Nonemployee Director Phantom Stock Plan (the "Phantom
Stock Plan"), nonemployee directors may elect to defer all or a portion of
their director retainer fees into a phantom share account which is credited
with dollar amounts in the form of phantom shares priced at current market
value of the Company's common stock. The phantom share accounts are also
credited with dollar amounts equal to dividends paid on the common stock. When
a participant ceases to be a director, the number of phantom shares in his or
her account is converted into an equal number of shares of the Company's common
stock.
Audit Committee
The Audit Committee of the Board of Directors, which currently consists of
Lauro F. Cavazos (Chairman), Arthur R. Emerson, and Walter J. Salmon, met three
times during the 1999 fiscal year. The functions of the Audit Committee are to
review the qualifications and independence of the independent auditors; to
recommend the appointment of the independent auditors; to approve the
assignment of new audit partners; to review the scope of the annual audit and
the annual audit process; to review the annual audited financial statements; to
review the interim reporting process; to review internal audit, accounting,
data processing, financial functions, and personnel; to review accounting and
data processing controls and procedures; to review legal matters that may have
a significant effect on the financial statements; to review the internal audit
function; to provide regular opportunities for the director of internal audit
and the independent auditors to meet privately with the Audit Committee; to
review the Company's policies on standards of conduct; and to report the
activities of the Audit Committee to the Board of Directors on a regular basis.
Compensation Committee
The Compensation Committee of the Board of Directors currently consists of
Roger R. Hemminghaus (Chairman), Ronald K. Calgaard, and Judith B. Craven. The
Compensation Committee met three times during the 1999 fiscal year. The
functions of the Compensation Committee are to review and to make
recommendations to the Board of Directors concerning compensation and benefits
of officers and employees. The Compensation Committee also administers those
employee benefit plans of the Company which provide for administration by a
Board committee.
Compensation Committee Interlocks and Insider Participation
The only persons who served as members of the Compensation Committee of
the Board of Directors during the 1999 fiscal year were Ronald K. Calgaard,
Judith B. Craven, Roger R. Hemminghaus, and Walter J. Salmon, none of whom is
an officer or employee, or a former officer or employee, of the Company.
Corporate Governance Committee
The Corporate Governance Committee of the Board of Directors currently
consists of Joanne Winik (Chairman), Lauro F. Cavazos, David B. Daviss,
Roger R. Hemminghaus, and Walter J. Salmon. The Corporate Governance Committee
met two times during the 1999 fiscal year. The functions of the Corporate
Governance Committee are to define and to periodically review the
responsibilities of directors; to maintain a current statement of, and to
monitor compliance with, Corporate Governance Guidelines; to make
recommendations regarding the size of the Board and its committee structure; to
assign committee members and chairs, subject to Board approval; to review
committee charters and changes therein; to assist in identifying and screening
Board candidates; to decide issues regarding conflicts of interest and
independence of directors; to consider appropriateness of continued Board
service when significant changes occur in a director's professional role and
responsibilities; to survey annually the performance of directors and the
effectiveness of the Board; to solicit suggestions for improving Board
performance; and to review and make recommendations regarding
director compensation.
The Corporate Governance Committee will consider nominees for election as
directors recommended by shareholders. A shareholder desiring to submit such a
recommendation should deliver to the Secretary of the Company at the principal
offices of the Company not later than 90 days prior to the date of the meeting
of shareholders at which directors are to be elected a notice which includes
(i) the name and address of the shareholder making the recommendation, (ii) the
name, age, and business address of the proposed nominee, and (iii) such other
information regarding the proposed nominee as would be required in a proxy
solicitation relating to an election of directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Barry J.C. Parker is employed as President and Chief Executive Officer of
the Company under a three-year employment contract effective October 1, 1997.
Mr. Parker's employment contract provides, among other things, for (i) a
minimum base salary of $360,000 per year, (ii) a guaranteed bonus for the
fiscal year ending August 31, 1998, of at least $132,000, (iii) the initial
grant of options to purchase 100,000 shares of the Company's common stock at an
option price of $20.75 per share, and (iv) a loan from the Company not to
exceed $200,000 to be applied to the purchase of 20,000 shares of the Company's
common stock (with forgiveness of principal over five years, contingent upon
continued employment). The contract also provides that Mr. Parker will be
entitled to receive his compensation and benefits until September 30, 2000, if
prior to that date, the Company terminates his employment without "cause" (as
defined) or if he resigns "for good reason" (as defined). Mr. Parker was
Chairman of the Board, President, and Chief Executive Officer of County Seat
Stores, Inc. from 1989 until his resignation in July 1996. County Seat
Stores, Inc. filed a petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in October 1996. The Board of Directors of the Company does
not believe that such filing reflects adversely upon Mr. Parker's integrity or
upon his abilities as a director and executive officer of the Company.
John B. Lahourcade, a director of the Company, is employed by the Company
as a consultant at a salary of $7,083 per month under a contract which expires
in 2001.
James R. Hale, Secretary of the Company, is a member of the law firm of
Cauthorn Hale Hornberger Fuller Sheehan & Becker Incorporated. The firm
performs legal services for the Company on a regular basis. For services
rendered during the fiscal year ended August 31, 1999, the Company paid such
firm approximately $475,000. In the opinion of the Company, such fees are
comparable to those charged by other law firms for similar services.
SECTION 16(a) OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and any persons holding more than ten
percent of the Company's common stock to report their initial ownership of the
Company's common stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange, and to
provide copies of such reports to the Company. Based upon the Company's review
of copies of such reports received by the Company and written representations
of its directors and executive officers, the Company believes that during the
year ended August 31, 1999, all Section 16(a) filing requirements were
satisfied.
PRINCIPAL SHAREHOLDERS
To the knowledge of the Company, no person owned beneficially as of
October 31, 1999, more than five percent of the outstanding common stock of the
Company.
MANAGEMENT SHAREHOLDERS
According to information furnished by the persons concerned, each
director, each nominee for director, and all directors and executive officers
of the Company as a group, owned beneficially the indicated number and
percentage of outstanding shares of common stock of the Company as of
November 16, 1999:
Name of Individual or Shares Beneficially Owned Percent
Identity of Group as of November 16, 1999(1) of Class
Ronald K. Calgaard (2) -0- ---
Lauro F. Cavazos (3) 6,550 0.03%
Judith B. Craven (4) 1,500 0.01%
David B. Daviss (5) 7,477 0.03%
Arthur R. Emerson (6) 1,237 0.01%
Roger R. Hemminghaus (7) 5,766 0.03%
Robert T. Herres -0- ---
John B. Lahourcade (8) 192,405 0.86%
Barry J.C. Parker (9) 128,377 0.57%
Walter J. Salmon (10) 7,768 0.03%
George H. Wenglein 730,000 3.26%
Joanne Winik (11) 5,698 0.03%
All directors and executive
officers of the Company,
as a group (12) 1,265,988 5.59%
(1) Each person named in the table owns directly the number of shares
indicated and has the sole power to vote and to dispose of such
shares, except as indicated in the following notes.
(2) The shares shown for Dr. Calgaard do not include 1,383 shares of
phantom stock held under the Nonemployee Director Phantom Stock Plan.
(3) The shares shown for Dr. Cavazos are held jointly with his wife.
Such shares do not include 1,148 shares of phantom stock held under
the Nonemployee Director Phantom Stock Plan. The shares shown
include 5,000 shares which he has the right to acquire within 60 days
under the Nonemployee Director Stock Option Plan.
(4) The shares shown for Dr. Craven are held for her benefit in a
custodial account. Such shares do not include 691 shares of phantom
stock held under the Nonemployee Director Phantom Stock Plan.
(5) The shares shown for Mr. Daviss are held for his benefit in custodial
accounts and include 774 shares held by a 401(k) custodian. The
shares shown include 1,666 shares which he has the right to acquire
within 60 days under the Nonemployee Director Stock Option Plan.
(6) The shares shown for Mr. Emerson include 1,237 shares held jointly
with his wife in a custodial account. Such shares do not include 691
shares of phantom stock held under the Nonemployee Director Phantom
Stock Plan.
(7) The shares shown for Mr. Hemminghaus are held for his benefit in a
custodial account. Such shares do not include 2,297 shares of
phantom stock held under the Nonemployee Director Phantom Stock Plan.
The shares shown include 1,666 shares which he has the right to
acquire within 60 days under the Nonemployee Director Stock Option
Plan.
(8) The shares shown for Mr. Lahourcade include 1,125 shares held jointly
with his wife.
(9) The shares shown for Mr. Parker include 92,500 shares which he has
the right to acquire within 60 days under the Company's benefit
plans.
(10) The shares shown for Dr. Salmon are held for his benefit in an
Individual Retirement Account. Such shares do not include 1,148
shares of phantom stock held under the Nonemployee Director Phantom
Stock Plan. The shares shown include 3,333 shares which he has the
right to acquire within 60 days under the Nonemployee Director Stock
Option Plan.
(11) The shares shown for Ms. Winik are held for her benefit in a
custodial account. Such shares do not include 3,484 shares of
phantom stock held under the Nonemployee Director Phantom Stock Plan.
The shares shown include 3,333 shares which she has the right to
acquire within 60 days under the Nonemployee Director Stock Option
Plan.
(12) The shares shown for all directors and executive officers as a group
include 221,830 shares which they have the right to acquire within 60
days under the Company's benefit plans.
EXECUTIVE COMPENSATION
The table below contains information concerning annual and long-term
compensation of the chief executive officer and the six most highly compensated
executive officers (the "Named Officers") for services in all capacities to the
Company for the fiscal years ended August 31, 1999, 1998, and 1997:
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
_____________________________________________________ ____________________________ ________
Securities All
Other Under- Other
Name and Annual Restricted lying LTIP Compen-
Principal Fiscal Compen- Stock Options/ Payouts sation
Position Year Salary Bonus(1) sation(2) Awards SARs(3) (4) (5)
_____________________________________________________ ____________________________ ________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Barry J.C. Parker 1999 $375,000 $ 93,500 $0 $0 106,000 $ 0 $ 3,696
President and 1998 330,000 132,000 0 0 170,000 0 0
Chief Executive 1997 --- --- 0 0 0 0 0
Officer
Laura M. Bishop 1999 175,000 28,000 0 0 41,785 0 3,696
Senior Vice 1998 165,000 34,000 0 0 20,000 0 4,015
President and 1997 146,667 --- 0 0 850 0 2,862
Chief Financial
Officer
Robert P. Burke 1999 175,000 27,000 0 0 41,980 0 3,696
Senior Vice 1998 165,000 34,000 0 0 20,000 0 4,015
President- 1997 153,333 --- 0 0 1,000 0 2,973
Marketing
Alan M. Davis 1999 177,500 27,000 0 0 42,370 0 0
Senior Vice 1998 43,750 8,750 0 0 25,000 0 25,000
President- 1997 --- --- 0 0 0 0 0
Real Estate
Development
Sue Elliott 1999 177,500 28,000 0 0 42,205 0 0
Senior Vice 1998 52,088 10,208 0 0 25,000 0 25,000
President- 1997 --- --- 0 0 0 0 0
Human Resources
Raymond C. Gabrysch 1999 175,000 26,000 0 0 41,965 0 3,696
Senior Vice 1998 165,000 34,000 0 0 20,000 0 4,015
President- 1997 156,667 --- 0 0 1,000 0 2,973
Operations
Clyde C. Hays III 1999 201,000 26,000 0 0 44,800 0 3,696
Senior Vice 1998 200,000 40,000 0 0 20,000 0 4,015
President- 1997 190,000 --- 0 0 1,500 19,316 2,973
Operations
(1) Reflects incentive-based cash bonuses awarded under the Company's Incentive Bonus Plan.
Awards are stated as compensation in the year with respect to which the award was earned,
even if actually paid in the following year.
(2) Perquisites and other personal benefits received by the executive officers are not
included because the aggregate amount of such compensation does not exceed the lesser of
$50,000 or 10% of the total amount of annual salary and bonus for any Named Officer.
(3) The Company has not issued any stock appreciation rights to the Named Officers.
(4) The long-term incentive plan (LTIP) amounts paid out in fiscal 1997 under the Company's
Performance Unit Plan relate to the three-year performance cycle ended August 31, 1996.
(5) Amounts for Ms. Bishop and Messrs. Burke, Gabrysch, Hays, and Parker are contributions
under the Profit Sharing Plan. Amounts for Mr. Davis and Ms. Elliott are employment
signing bonuses.
</TABLE>
The following table reports the grant of stock options and stock
appreciation rights ("SARs") to the Named Officers during fiscal 1999. Options
were granted under the Company's Incentive Stock Plans. The Company has not
granted SARs to any of the Named Officers.
<TABLE>
Option/SAR Grants in Last Fiscal Year
<CAPTION>
Potential Realized
Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term (3)
________________________________________________________________________ ____________________
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (1) Fiscal Year (2) ($/sh) Date 5%($) 10%($)
________________________________________________________________________ ____________________
<S> <C> <C> <C> <C> <C> <C>
Barry J.C. Parker 53,300 3.52% $14.3750 10-14-2004 $260,577 $591,160
16,700 1.10% 15.4375 01-07-2005 87,679 198,913
36,000 2.38% 14.7500 02-03-2005 180,591 409,699
Laura M. Bishop 19,040 1.26% 14.3750 10-14-2004 93,084 211,176
5,960 0.39% 15.4375 01-07-2005 31,291 70,989
16,785 1.11% 15.1875 01-20-2005 86,698 196,688
Robert P. Burke 19,040 1.26% 14.3750 10-14-2004 93,084 211,176
5,960 0.39% 15.4375 01-07-2005 31,291 70,989
16,980 1.12% 15.0625 01-27-2005 86,983 197,335
Alan M. Davis 19,040 1.26% 14.3750 10-14-2004 93,084 211,176
5,960 0.39% 15.4375 01-07-2005 31,291 70,989
17,370 1.15% 15.1875 01-20-2005 89,720 203,543
Sue Elliott 19,040 1.26% 14.3750 10-14-2004 93,084 211,176
5,960 0.39% 15.4375 01-07-2005 31,291 70,989
17,205 1.14% 15.1875 01-19-2005 88,867 201,610
Raymond C. Gabrysch 19,040 1.26% 14.3750 10-14-2004 93,084 211,176
5,960 0.39% 15.4375 01-07-2005 31,291 70,989
16,965 1.12% 14.9375 02-01-2005 86,185 195,525
Clyde C. Hays III 19,040 1.26% 14.3750 10-14-2004 93,084 211,176
5,960 0.39% 15.4375 01-07-2005 31,291 70,989
19,800 1.31% 15.3750 01-14-2005 103,534 234,882
_______________________________________
(1) Options were granted at fair market value of the common stock on the date of grant.
Options may not be exercised during the first 12 months following the date of grant.
(2) Based upon a total of 1,512,732 options granted to employees in fiscal 1999.
(3) The dollar amounts in these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission and
should not be considered as a forecast of future stock prices.
</TABLE>
The table below reports exercises of stock options and SARs by the Named
Officers during fiscal 1999 and the value of their unexercised stock options
and SARs as of August 31, 1999. The stock options were granted under the
Company's Incentive Stock Plans. The Company has not granted SARs to any of
the Named Officers.
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options/SARS Options/SARs
Acquired at FY-End at FY-End(1)
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
______________________________________________________________________________
Barry J.C. Parker --- $ --- 37,500/238,500 $0/$0
Laura M. Bishop --- --- 10,499/60,786 0/0
Robert P. Burke --- --- 13,000/62,980 0/0
Alan M. Davis --- --- 6,250/61,120 0/0
Sue Elliott --- --- 6,250/60,955 0/0
Raymond C. Gabrysch --- --- 9,100/56,965 0/0
Clyde C. Hays III --- --- 10,600/59,800 0/0
_________________________
(1) The value of unexercised options is based on a price of $13.375 per common
share at August 31, 1999.
DEFERRED COMPENSATION
The Company's Nonemployee Director Deferred Compensation Plan permits
nonemployee directors to defer all or a portion of their directors' fees in
accordance with applicable regulations under the Internal Revenue Code.
Deferred amounts bear interest at the average interest rate of U.S. Treasury
ten-year obligations. The Company's obligation to pay deferred amounts is
unfunded and is payable from general assets of the Company.
Nonemployee directors are permitted to defer all or a portion of their
director retainer fees pursuant to the Company's Nonemployee Director Phantom
Stock Plan. See the discussion under the caption "Nonemployee Director Phantom
Stock Plan."
The Company has a Supplemental Executive Retirement Plan which is designed
to provide benefits for selected officers at normal retirement age with 25
years of service equal to 50% of their final average compensation offset by
Social Security, profit sharing benefits, and deferred compensation. Three of
the officers designated to participate in the plan have retired and are
receiving benefits under the plan. Accrued benefits of all actively employed
participants become fully vested upon termination of the plan or a change in
control (as defined in the plan). The plan is unfunded, and the Company is
obligated to make benefit payments solely on a current disbursement basis.
The Company has a Deferred Compensation Plan for all of its highly
compensated employees, effective as of June 1, 1999, which permits deferral of
a portion of annual compensation. See the discussion under the caption
"Deferred Compensation Plan."
The following table illustrates the approximate annual pension that the
Named Officers in the Summary Compensation Table would receive under the
Supplemental Executive Retirement Plan if the plan remained in effect and the
Named Officers retired at age 65 and elected an individual life annuity.
Pension Plan Table
Years of Service
Final Average ______________________________________________
Earnings 15 20 25
_____________ ________ ________ ________
$150,000 $ 45,000 $ 60,000 $ 75,000
300,000 90,000 120,000 150,000
450,000 135,000 180,000 225,000
600,000 180,000 240,000 300,000
Amounts shown as Afinal average earnings@ in this table represent the
average of the last five years of compensation, which is substantially the same
as the total of salary, bonus, and LTIP payouts as shown in the Summary
Compensation Table for the Named Officers. As of November 30, 1999, the
credited years of service under the Supplemental Executive Retirement Plan for
Barry J. C. Parker, Laura M. Bishop, Robert P. Burke, Alan M. Davis,
Sue Elliott, Raymond C. Gabrysch, and Clyde C. Hays III are 4, 7, 4, 1, 1, 25,
and 26, respectively. The annual benefit amounts shown above are subject to an
offset by benefits payable under the profit sharing plan and Social Security.
Net benefits under the plan are prorated by credited years of service less than
25; after 25 years of service, the net benefits are unchanged.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee")
presents the following report on executive compensation. The report describes
the Company's executive compensation programs and the bases on which the
Committee made compensation decisions for fiscal 1999 with respect to the
Company's executive officers, including those named in the compensation tables.
Compensation Objectives
The Committee conducts an annual review of the Company's executive
compensation program. The objectives of the executive compensation program
include the following:
To offer fair and competitive base salaries consistent with the Company's
position in the foodservice industry;
To reward executives for corporate and individual performance through an
annual incentive bonus program;
To encourage future performance through the use of long-term incentives
such as stock options and performance units; and
To encourage executives to acquire and retain ownership of the Company's
common stock.
The Company's executive compensation program is designed to enable the
Company to attract, retain, and motivate the highest quality of management
talent. To achieve that objective, the Committee has developed a compensation
program which combines annual base salaries with annual and long-term
incentives tied to corporate performance and to increases in shareholder value.
Annual Base Salaries
The Committee annually establishes the base salaries to be paid to the
Company's executive officers during the coming year, subject to approval by the
Board of Directors. In setting base salaries, the Committee takes into account
several factors, including the executive's experience, responsibilities,
management abilities, and job performance, as well as performance of the
Company as a whole and competitive compensation data.
Annual Incentive Bonuses
The Company's annual incentive bonus plan for executive officers and other
key personnel links annual cash incentive payments to the attainment of
predetermined earnings per share goals and strategic objectives established by
the Committee and approved by the Board of Directors. Eligible executives are
assigned threshold, target, and maximum bonus levels as a percentage of base
salary, based upon the executive's responsibility level, achievement of
earnings per share targets, and the degree of achievement of specific strategic
objectives.
On October 22, 1998, based upon the recommendation of the Committee, the
Board of Directors adopted an Executive Bonus Plan for fiscal 1999 for officers
and key personnel providing for the payment of cash bonuses from a bonus pool
to be established based upon achievement of earnings per share targets and
strategic objectives. Bonuses paid under such plan for fiscal 1999 to the
Named Officers are included in the Summary Compensation Table.
On October 15, 1999, the Committee recommended, and the Board of Directors
adopted, an Executive Bonus Plan for Fiscal 2000, in which all of the Named
Officers are eligible to participate. Bonuses under the plan will be
determined by achievement of goals based upon earnings per share and comparable
store sales and upon achievement of strategic objectives.
Stock Options
The Committee normally grants incentive stock options annually to eligible
executive officers and other key employees. The options, which are granted at
100% of market price on the date of grant, are usually for six-year terms. The
number of option shares granted each year is normally determined by a formula
based upon the executive's responsibility level and base salary. The number of
option shares granted will vary based upon position level, with the more senior
officers receiving larger grants. The number of option shares held by an
executive is not considered in determining stock option awards.
Stock Purchase Loans
During January and February 1999, pursuant to Luby's Incentive Stock Plan,
the Company guaranteed loans by an institutional lender to several officers,
including the Company's president and five senior vice presidents for the
purpose of purchasing shares of the Company's common stock. The Named Officers
obtaining such loans, the number of shares purchased by each, and the amount of
each loan are: Laura M. Bishop - 5,595 shares for $85,000; Alan M. Davis -
5,790 shares for $87,500; Sue Elliott - 5,735 shares for $87,500; Raymond C.
Gabrysch - 5,655 shares for $85,000; Clyde C. Hays III - 6,600 shares for
$100,000; and Barry J.C. Parker - 12,000 shares for $180,000.
Performance Units
Prior to fiscal 1998 the Committee normally granted annually to eligible
executive officers and other key employees performance units based upon
attainment by the Company of predetermined earnings and equity goals
established by the Committee over a performance cycle of three consecutive
fiscal years. The number of performance units granted was normally determined
by a formula based upon the participant's responsibility level and base salary
and the market price of the common stock. Performance units are payable at the
end of each performance cycle in cash or shares of stock, or both, if the
performance goals for the cycle are attained. No payments were made for the
three-year performance cycles ended August 31, 1997, 1998, and 1999.
The Committee did not grant any performance units during fiscal 1998 and
1999, based upon the Committee's determination that other types of incentive
awards were more appropriate during the development and implementation of the
Company's new strategic plan.
Stock Ownership Guidelines
The Board of Directors has adopted guidelines for ownership of the
Company's common stock by executives and nonemployee directors. The guidelines
provide that each person in the following categories is expected to attain the
indicated level of stock ownership within five years:
(a) Chief Executive Officer - shares having a value equal to four times
annual base salary;
(b) President and Senior Vice President - shares having a value equal to
two times annual base salary; and
(c) Vice President - shares having a value equal to annual base salary.
(d) Nonemployee Director - shares having a value equal to five times his
or her annual director retainer fees. Phantom stock is considered
common stock for purposes of the guidelines. Until a nonemployee
director attains the minimum level of stock ownership, he or she is
obligated to defer at least 50% of annual retainer fees in the form
of phantom stock.
Change in Control Agreements
In January 1999, based upon recommendations of the Committee, the Company
entered into a Change in Control Agreement with each of Barry J.C. Parker (CEO)
and the six senior vice presidents (SVP's). The agreements provide for
benefits to become effective if a change in control of the Company (as defined
therein) occurs and if, within 24 months thereafter, there is involuntary
termination of employment unrelated to gross negligence, malfeasance or
incompetence, or there is voluntary termination of employment for good reason
(as defined therein). Benefits payable under such circumstances include
(i) lump sum severance payments equal to three times annual base pay for the
CEO and two times annual base pay for SVP's; (ii) lump sum severance payments
equal to three times for the CEO and two times for SVP's the average of the
short-term incentive bonuses for the prior fiscal year and the target for the
year of termination; (iii) continuation of health and welfare benefits for 36
months for the CEO and 24 months for SVP's; (iv) immediate vesting of all stock
options; and (v) other benefits described in the agreements, copies of which
are on file with the Securities and Exchange Commission.
Deferred Compensation Plan
Based upon the recommendation of the Committee, the Board of Directors
adopted a Deferred Compensation Plan for all highly compensated employees,
including the president and all senior vice presidents. The plan, which became
effective June 1, 1999, permits highly compensated employees to defer a portion
of their annual compensation into unfunded accounts with the Company. The
deferrals mirror the results of a phantom investment portfolio theoretically
(but not actually) invested in funds selected by each participant, including a
Luby's, Inc. stock fund. A participant's account balance will be paid in cash
upon death, termination of employment, change in control of the Company,
disability, or retirement.
Compensation of Chief Executive Officer
Barry J.C. Parker was elected President and Chief Executive Officer on
October 1, 1997, at which time he entered into a three-year employment contract
with the Company providing for a base salary of $360,000 per year. Based upon
his performance, the Committee recommended and the Board of Directors approved,
an increase in Mr. Parker's base salary to $390,000 per year, effective as of
March 1, 1999, and to $405,000 per year, effective as of November 1, 1999.
For the fiscal year ended August 31, 1998, Mr. Parker was paid a bonus of
$132,000 in accordance with his employment contract. Based upon his
performance, the Committee recommended and the Board approved payment of a cash
bonus of $93,500 to Mr. Parker for fiscal 1999. During fiscal 1999, the
Committee granted Mr. Parker stock options as follows: on October 15, 1998, a
stock option for 53,300 shares at an option price of $14.375 per share; on
January 8, 1999, a stock option for 16,700 shares at an option price of
$15.4375 per share; and on February 4, 1999, a stock option for 36,000 shares
at an option price of $14.75 per share.
Salary Continuation Agreements
Mr. Parker's employment contract, referred to above, provides that he will
be entitled to receive all of his compensation and benefits under the contract
until September 30, 2000, if his employment is terminated by the Company
without cause (as therein defined) or if he terminates his employment for good
reason (as therein defined).
On May 14, 1998, the Company entered into a contract with Sue Elliott,
Senior Vice President-Human Resources, which provides that if her employment is
terminated by the Company without good cause (as therein defined) prior to
May 14, 2000, the Company will continue to pay her monthly salary until the
later of May 14, 2000, or 12 months after termination, but not after she
accepts other employment.
On June 1, 1998, the Company entered into a contract with Alan M. Davis,
Senior Vice President-Real Estate Development, which provides that if his
employment is terminated by the Company without good cause (as therein defined)
prior to June 1, 2000, the Company will continue to pay his monthly salary
until the later of June 1, 2000, or 12 months after termination, but not after
he accepts other employment.
Members of the Committee:
Roger R. Hemminghaus, Chairman
Ronald K. Calgaard
Judith B. Craven
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Company's common stock for the five fiscal years ended August 31, 1999,
with the cumulative total return on the S&P SmallCap 600 Index and an industry
peer group index. The peer group index is comprised of Bob Evans Farms, Inc.;
Buffets, Inc.; Furr's/Bishop's, Inc.; Piccadilly Cafeterias, Inc.; Ryan's
Family Steakhouses, Inc.; Shoney's, Inc.; Sizzler International, Inc.; and
Vicorp Restaurants, Inc. These companies are multiunit family restaurant
operators in the mid-price range with similar stock market capitalization.
The cumulative total shareholder return computations set forth in the
performance graph assume the investment of $100 on August 31, 1994, and the
reinvestment of all dividends. The returns of each company in the peer group
index have been weighted according to the respective company's stock market
capitalization.
The performance graph has been omitted in the EDGAR filing. A table of
the graph's data points is shown below.
Five-Year Cumulative Return
Years Ended August 31,
1994 1995 1996 1997 1998 1999
______________________________________________
Luby's, Inc. $100 87 107 93 75 70
Peer Group $100 85 71 71 69 69
S&P SmallCap 600 $100 122 139 186 158 196
NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
The Company's Nonemployee Director Stock Option Plan was approved by the
shareholders on January 13, 1995, and was amended by the Board of Directors on
January 14, 1997. The plan, as so amended, is referred to herein as the
"Original Plan."
On October 15, 1999, the Board of Directors adopted an amendment and
restatement of the Original Plan, subject to approval of the shareholders at
the 2000 annual meeting. The amended and restated plan (referred to herein as
the "Amended Plan") is intended to restate the Original Plan, effective as of
January 1, 2000.
Original Plan. The Original Plan became effective on January 13, 1995.
It provides for automatic grants to directors who are not employees of the
Company or its subsidiaries or affiliated entities of options to purchase
common stock of the Company. The maximum number of shares of common stock
issuable under the Original Plan is 100,000, subject to the adjustment
provisions of the plan.
Options have been issued under the Original Plan to each of the following
persons to purchase shares of common stock of the Company at option prices
equal to 100% of market value on the date of grant for the number of option
shares indicated:
Optionee Number of Shares
_____________________ ________________
Ronald K. Calgaard 6,666
Lauro F. Cavazos 10,000
Judith B. Craven 6,666
David B. Daviss 6,666
Arthur R. Emerson 6,666
Roger R. Hemminghaus 11,666
Walter J. Salmon 8,333
George H. Wenglein 5,000
Joanne Winik 8,333
None of these options have been exercised and all are outstanding.
Exercise prices for such options range from $15.4375 to $22.75 per share. The
closing price of the Company's common stock on the New York Stock Exchange on
November 16, 1999, was $12.00 per share.
Principal Changes. The principal changes in the Original Plan to be
effected by the Amended Plan are:
(a) increasing the total number of shares issuable from 100,000 to
200,000;
(b) making the grant of options discretionary with the Board of Directors
in lieu of automatic grants;
(c) making options exercisable one year after date of grant instead of
five years; and
(d) providing that no optionee may be granted options for more than 5,000
shares in any year.
Summary. The following summary of the Amended Plan is qualified in its
entirety by reference to the complete text of the Amended Plan attached as
Appendix A to this Proxy Statement. The term ACompany@ as used in this summary
refers only to Luby's, Inc.
Purpose. The purpose of the Amended Plan is to promote the interests of
the Company and its shareholders by strengthening the Company's ability to
attract and retain the services of experienced and knowledgeable directors. To
accomplish these objectives, the Amended Plan authorizes the awards of options
to purchase shares of the Company's common stock to Nonemployee Directors,
thereby encouraging them to acquire an increased proprietary interest in the
Company.
Administration. The Amended Plan will be administered by the Board of
Directors.
Types of Options. Options granted under the Amended Plan will be options
which do not meet the requirements of Section 422 of the Internal Revenue Code,
known as "nonqualified stock options."
Participants. Options under the Amended Plan will be issued only to
directors of the Company who are not employees of 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 profits interest ("Nonemployee
Directors").
Shares. Subject to the adjustment provisions of the Amended Plan, the
number of shares which may be issued upon the exercise of options may not
exceed 200,000 shares.
Grants. The Board of Directors shall select the Nonemployee Directors who
are to be granted options under the Amended Plan and shall determine the terms,
conditions, and limitations applicable to each option. No Nonemployee Director
may receive options under the Amended Plan for more than 5,000 shares in any
12-month period.
Adjustments. In the event of changes in outstanding shares of the
Company's common stock described in the Amended Plan, appropriate adjustments
in the shares as to which options are granted shall be made so that the
proportionate interest of each optionee shall be maintained.
Option Price. The option price shall be 100% of fair market value on the
date of grant, determined with reference to the closing price of the Company's
common stock on the New York Stock Exchange.
Payment. Payment for shares purchased upon the exercise of an option may
be made in cash, in shares of the Company's common stock, or in a combination
of the two, at the time of purchase.
Option Terms. Each option granted under the Amended Plan shall terminate
ten years from the date of grant or one year from the date on which the
optionee ceases to be a director of the Company, whichever first occurs. An
option may not be exercised prior to the expiration of one year from the date
of grant, with certain exceptions. Each option becomes exercisable immediately
in the event of (i) death of the optionee, (ii) resignation or removal of the
optionee as a director because of long-term disability, (iii) resignation of
the optionee as a director after having served at least two full terms, and
(iv) expiration of the optionee's term without being reelected after having
served at least two full terms.
Transferability. An option shall not be assignable or transferable other
than by will or the laws of descent and distribution. During an optionee's
lifetime, an option can be exercised only by the optionee or his or her
guardian or legal representative.
Term, Amendment, and Termination. To the extent permitted by law, the
Board of Directors may amend, suspend, or terminate the Amended Plan. However,
shareholder approval is required of any amendment which (i) increases the
maximum number of shares issuable under the plan other than pursuant to the
adjustment provisions, (ii) changes the class of persons eligible to receive
options, or (iii) must be approved by shareholders under rules of the
Securities and Exchange Commission. Subject to earlier termination, the
Amended Plan will remain in effect until the maximum number of shares issuable
under the plan have been issued.
Tax Consequences. The tax consequences of the issuance and exercise of
options granted under the Amended Plan are set forth in Appendix B to this
proxy statement.
Shareholder Vote. The affirmative vote of a majority of the shares
present at the meeting in person and by proxy is required for approval of the
Amended Plan. The Board of Directors recommends that the shareholders vote FOR
approval of the Amended Plan.
APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed the firm of Ernst &
Young LLP to audit the accounts of the Company for the 2000 fiscal year.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting of Shareholders with the opportunity to make a statement if they desire
to do so and are expected to be available to respond to appropriate questions.
Approval of the appointment of auditors is not a matter which is required
to be submitted to a vote of shareholders, but the Board of Directors considers
it appropriate for the shareholders to express or withhold their approval of
the appointment. If shareholder approval should be withheld, the Board would
consider an alternative appointment for the succeeding fiscal year. The Board
recommends that the shareholders vote FOR approval of the appointment of
Ernst & Young LLP. The affirmative vote of a majority of the shares present at
the meeting in person and by proxy is required for approval.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of shareholders for inclusion in the Company's proxy statement
and form of proxy for the Company's 2001 Annual Meeting of Shareholders
submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 must
be received in writing by the Company at its corporate office no later than
August 2, 2000. Notice of a shareholder proposal submitted outside the process
of Rule 14a-8 with respect to the Company's 2001 Annual Meeting of Shareholders
will be considered untimely if received by the Company after October 16, 2000.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. The transfer
agent and registrar for the Company's common stock, American Stock Transfer &
Trust Company, as a part of its regular services and for no additional
compensation other than reimbursement for out-of-pocket expenses, has been
engaged to assist in the proxy solicitation. Proxies may be solicited through
the mail and through telephonic or telegraphic communications to, or by
meetings with, shareholders or their representatives by directors, officers,
and other employees of the Company who will receive no additional compensation
therefor.
The Company requests persons such as brokers, nominees, and fiduciaries
holding stock in their names for others, or holding stock for others who have
the right to give voting instructions, to forward proxy material to their
principals and to request authority for the execution of the proxy, and the
Company reimburses such persons for their reasonable expenses.
OTHER MATTERS
No business other than the matters set forth in this proxy statement is
expected to come before the meeting, but should any other matters requiring a
vote of shareholders arise, including a question of adjourning the meeting, the
persons named in the accompanying proxy will vote thereon according to their
best judgment in the interest of the Company.
LUBY'S INC.
James R. Hale
Secretary
Dated: December 1, 1999
APPENDIX A
LUBY'S, INC.
AMENDED AND RESTATED
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Introduction. This Amended and Restated Nonemployee Director Stock
Option Plan (the "Plan") of Luby's, Inc. (the "Company"), upon approval of the
Plan by the shareholders of the Company at their 2000 annual meeting, shall
amend and restate the Nonemployee Director Stock Option Plan approved by the
shareholders of the Company on January 13, 1995, and amended by the Board of
Directors on January 14, 1997 (the "Original Plan").
2. Effectiveness. Upon approval of the Plan by the shareholders of the
Company at their 2000 annual meeting, the Plan shall become effective as of
January 1, 2000. If the Plan is not approved by the shareholders at such
meeting, it shall not become effective, and the Original Plan shall continue in
force and effect.
3. Purpose. The Purpose of the Plan is to promote the interests of the
Company and its shareholders by strengthening the Company's ability to attract
and retain the services of experienced and knowledgeable Nonemployee Directors.
To accomplish these objectives, the Plan authorizes awards of options (the
"Options") to purchase shares of the Company's common stock par value $.32 per
share ("Common Stock") to Nonemployee Directors, thereby encouraging such
directors to acquire an increased proprietary interest in the Company.
4. Administration. The Plan shall be administered by the Board of
Directors of the Company (the "Board"). The decision of the Board on any
questions concerning the interpretation or administration of the Plan shall, as
between the Company and the Option holders, be final and conclusive. The Board
may consult with counsel, who may be counsel to the Company, and shall not
incur any liability for any action taken in good faith in reliance upon the
advice of counsel.
5. Types of Options. Options granted under the Plan do not meet the
requirements of Section 422 of the Internal Revenue Code and are commonly
referred to as "nonqualified stock options."
6. Participants. Participants shall be the directors of the Company who
are not employees of 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 ("Nonemployee Directors").
7. Shares. Subject to the adjustment provisions of Section 10, the
number of shares of Common Stock of the Company which may be issued upon
exercise of Options granted pursuant to the Plan shall not exceed 200,000
shares. If, however, any Option granted under the Plan shall expire,
terminate, or be canceled without having been exercised in full, the
unpurchased shares shall continue to be available for purposes of the Plan.
More than one Option may be granted to the same participant.
8. Grant of Options. The Board shall select the Nonemployee Directors
who are to be granted Options under the Plan and, subject to the provisions of
the Plan, shall determine the terms, conditions, and limitations applicable to
each Option. No Nonemployee Director may receive, under the Plan, Options for
more than 5,000 shares in any 12-month period.
9. Listing and Registration. The Company, in its discretion, may
postpone the issuance and delivery of shares, upon exercise of an Option, 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
any person exercising an Option to make such representations and to furnish
such information as the Company may consider appropriate in connection with the
issuance of the shares in compliance with applicable law.
10. Adjustment Provisions. In the event the outstanding shares of Common
Stock of the Company 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, reclassification, stock split-up, combination of
shares, or dividend payable in stock of the class which is subject to the Plan,
appropriate adjustment in the number and kind of shares as to which Options may
be granted and as to which Options or portions thereof then unexercised shall
be exercisable, and in the option price thereof, shall be made to the end that
the proportionate number of shares or other securities as to which Options may
be granted and the Option holder's proportionate interest under outstanding
Options shall be maintained as before the occurrence of such event.
11. Option Price. The option price shall be 100% of the Fair Market Value
of the shares at the time of the granting of the Option. Such Fair Market
Value shall be determined by the Board and shall be the closing price of the
Common Stock on the New York Stock Exchange on the day on which the Option is
granted or, if no sale of the Common Stock shall have been made on the Exchange
on that day, then on the next preceding day on which a sale was made.
12. Payment for Shares. Payment for shares purchased upon exercise of an
Option shall be made in full at the time of exercise of the Option. No loan
shall be made or guaranteed by the Company for the purpose of financing the
purchase of any optioned shares. Payment of the option price shall be made in
cash, or by delivering Common Stock of the Company having a Fair Market Value
(determined as provided in Section 11) at least equal to the option price, or a
combination of Common Stock and cash. Payment in shares of Common Stock shall
be made by delivering to the Company certificates, duly endorsed for transfer,
representing shares of Common Stock having an aggregate Fair Market Value on
the date of exercise equal to that portion of the option price which is to be
paid in Common Stock. Whenever payment of the option price would require
delivery of a fractional share, the optionee shall deliver the next lower whole
number of shares of Common Stock and a cash payment shall be made by the
optionee for the balance of the option price.
13. Terms and Exercise of Options.
(a) Term. An Option shall terminate upon the expiration of ten years
from the date the Option is granted or one year from the date the
optionee ceases to be a director of the Company, whichever first
occurs (the "Expiration Date"). In no event shall an Option be
exercised after the Expiration Date.
(b) Exercise. To the extent that an Option is exercisable, it may be
exercised by the optionee or the legal representative of the
optionee or the legal representative of the optionee's estate.
Except as provided in subsection (c) below, an Option may not be
exercised prior to the expiration of one year from the date the
Option is granted. Once an Option becomes exercisable, it may
thereafter be exercised, wholly or in part, at any time prior to
its Expiration Date.
(c) Acceleration. Upon the occurrence of any of the following events
prior to the Expiration Date of an Option, the Option shall
become immediately and fully exercisable:
(i) death of the optionee;
(ii) resignation or removal of the optionee as a director of
the Company by reason of a physical or mental impairment
which prevents the optionee from performing the duties of
his or her directorship for a period of six months or
more;
(iii) resignation of the optionee as a director of the Company
after having served at least two full terms as a director;
or
(iv) expiration of the optionee's term of office as a director
of the Company, without being reelected to the Board,
after having served at least two full terms as a director.
14. Transferability. No Option shall be assignable or transferable other
than by will or the laws of descent and distribution. During an optionee's
lifetime, only the optionee or his or her guardian or legal representative may
exercise an option.
15. Provision for Taxes. It shall be a condition to the Company's
obligation to issue or reissue shares of Common Stock upon exercise of an
Option that the optionee pay, or make provision satisfactory to the Company for
payment of, any federal or state income or other taxes which the Company is
obligated to withhold or collect with respect to the issuance or reissuance of
such shares.
16. Term of Plan. Subject to the provisions of Section 18, the Plan
shall continue in effect until the maximum number of shares of Common Stock
issuable under the Plan has been issued.
17. Restrictions on Exercise. Any provision of the Plan to the contrary
notwithstanding, no Option granted pursuant to the Plan shall be exercisable at
any time, in whole or in part, (i) prior to the shares of Common Stock subject
to the Option being authorized for listing on the New York Stock Exchange or
(ii) if issuance and delivery of the shares of Common Stock subject to the
Option would be in violation of any applicable laws or governmental
regulations.
18. Amendment and Termination. Subject to the limitation that the
provisions of the Plan shall not be amended more than once every six months
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder, the Board may at any
time amend, suspend or discontinue the Plan or alter or amend any or all
Options under the Plan to the extent permitted by law. However, no such action
by the Board may, without approval of the shareholders of the Company, alter
the provisions of the Plan so as to:
(a) increase the maximum number of shares of Common Stock that may
be issued upon exercise of Options granted under the Plan except
pursuant to Section 10;
(b) change the class of individuals eligible to receive Options
under the Plan; or
(c) effect any other amendment to the Plan for which approval of the
Company's shareholders is required by Rule 16b-3 under the
Securities Exchange Act of 1934.
19. Unfunded Plan. The Plan shall be unfunded. Neither the Company nor
the Board shall be required to segregate any assets in connection with Options
issued pursuant to the Plan. Any liability of the Company to any Nonemployee
Director with respect to an Option shall be based solely upon contractual
obligations created by the Plan and any Option agreement. No such obligation
shall be deemed to be secured by any pledge or any encumbrance on any property
of the Company.
20. Governing Law. This Plan shall be governed by, construed, and
enforced in accordance with the internal laws of the State of Delaware, and,
where applicable, the laws of the United States.
APPENDIX B
CERTAIN FEDERAL INCOME TAX ASPECTS
The following is only a general summary of the federal income tax effects
to the participants and the Company of nonqualified stock options to be granted
under the Amended Plan. There are a number of special tax rules which may be
applicable under certain circumstances. This discussion is based on the
provisions of the Internal Revenue Code of 1986 as amended (the "Code"), and
regulations and rulings in effect on the date of this Proxy Statement, all of
which are subject to change at any time. This summary does not address state,
local, or non-U.S. taxation of options under the Amended Plan, which may differ
significantly from federal income tax rules and regulations.
For federal income tax purposes, the grant of a nonqualified stock option
should not result in recognition of income by the optionee. Upon exercise of a
nonqualified stock option by an employee who is not an officer or director, the
excess of the fair market value of the shares on the exercise date over the
option price will be considered as compensation taxable as ordinary income.
If, however, at the time of exercise of the option, the optionee is a director
of the Company or an "officer" as defined in Rule 16a-1 of the Securities and
Exchange Commission, and if the sale of the stock at a profit within six months
could subject such person to suit under Section 16(b) of the Securities
Exchange Act of 1934 (the "Exchange Act"), the fair market value of the stock
is determined, and the tax applicable thereto is incurred, at the end of such
six-month period or at such earlier time as may be determined (i) by such
person's election made within 30 days of the date of exercise to be taxed
sooner, or (ii) by the occurrence of an event which causes Section 16(b) of the
Exchange Act to become inapplicable to such person. In the event of a gain or
loss realized upon the sale of the shares received upon exercise of a
nonqualified stock option, the optionee will recognize long-term or short-term
capital gain or loss, depending on the optionee's holding period for the
shares.
With regard to nonqualified stock options, the Company will generally be
entitled to a deduction for Federal income tax purposes at the same time and in
the same amount as the ordinary income will be recognized by the optionee,
provided that the amount of the compensation is reasonable and any Federal
income tax reporting and withholding requirements are satisfied.
Under certain circumstances, the Company's deduction may also be limited
by the provisions of Section 162(m) of the Code. Section 162(m) generally
limits the Company's deduction for certain types of compensation paid to each
of its Chief Executive Officer and its four highest compensated officers (other
than the Chief Executive Officer) to no more than $1 million per year.
Under the so-called Agolden parachute@ provisions of the Code, certain
awards vested or paid in connection with a change of control may also be
nondeductible by the Company and may be subject to an additional twenty percent
(20%) federal excise tax. Nondeductible Aparachute payments@ will in general
reduce the $1 million limit on deductible compensation described above.
PROXY
LUBY'S, INC.
c/o American Stock Transfer & Trust Company
40 Wall Street, New York, New York 10005
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints John B. Lahourcade, George H. Wenglein, and
David B. Daviss, and each of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side of this card, all the shares of Common Stock of
Luby's, Inc. held on record by the undersigned on November 16, 1999, at the
Annual Meeting of Shareholders to be held on January 14, 2000, or any
adjournment thereof.
(SEE REVERSE SIDE)
Please mark your votes as in this example.
FOR WITHHELD
1. ELECTION ____ ____ Nominees: Robert T. Herres
OF Barry J.C. Parker
DIRECTORS Walter J. Salmon
Joanne Winik
For, except vote withheld from the following nominee(s):
_______________________________________________________
2. Proposal to approve the amendment and restatement of the Nonemployee
Director Stock Option Plan
FOR AGAINST ABSTAIN
____ ____ ____
3. Proposal to approve the appointment of Ernst & Young LLP as the
independent public accountants of the corporation.
FOR AGAINST ABSTAIN
____ ____ ____
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted for proposals 1, 2, and 3.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
SIGNATURE ______________________________________ DATE ________________________
SIGNATURE ______________________________________ DATE ________________________
IF HELD JOINTLY
Note: Please sign exactly as name appears. When shares are held by joint
tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If
a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name
by authorized person.
