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The Committee of Concerned Luby's Shareholders
P. O. Box 6983
Tyler, Texas 75711
800/657-2286
November __, 2000
Dear Fellow Shareholders of Luby's, Inc.:
As shareholders of Luby's, Inc. ("Luby's"), we have become
dissatisfied with the performance of Luby's in recent years and have
formed The Committee of Concerned Luby's Shareholders ("Committee") to
nominate five (5) persons for election as Directors of Luby's. In the
Committee's opinion, the financial performance, operating policies and
corporate governance practices of Luby's reflect entrenched Directors
and that Luby's needs new blood at the most senior level. The
Committee believes that the experience of its Nominees will help
revitalize Luby's. We have nominated: (1) Elisse Jones Freeman; (2)
Herbert Leslie ("Les") Greenberg; (3) Thomas C. Palmer; (4) Davis W.
Simpson; and (5) William P. Snyder. The Committee needs you to vote
for its Director nominees.
The Committee is seeking your support because it believes that
Luby's is a company in some trouble.
In 1997, the Board of Directors ("BOD") of Luby's, knowing that
Luby's faced fierce competition in the food service industry, hired
Mr. Barry J.C. Parker ("Parker"), a person with NO prior working
experience in the food service industry, as the President and Chief
Executive Officer of Luby's for a period of three (3) years. From
1989 to June 1996, Mr. Parker was employed as the Chairman of the
Board, Chief Operating Officer and President of County Seat Stores,
Inc., an apparel retailer which filed for bankruptcy protection in
October 1996. Mr. Parker caused Luby's to embark upon a "strategic
plan" which, among other concerns of the Committee, deviated from the
long standing tradition of serving food "made-from-scratch" and the
"60/40" incentive plan whereby Unit Managers were compensated based
upon a percentage of the respective Unit's profits.
The Committee believes that the aforesaid deviations have caused
a substantial deterioration to the financial condition of Luby's and
to the market price of its stock. Sales and net profits at Luby's
have substantially declined. Further, Luby's has substantially
increased its level of long-term debt and associated interest expense.
Dividends have recently been cut in half. In October 2000, the market
price of Luby's stock sunk to $4-5/16, down from its all time high of
$25-7/8 in 1993 and $21-1/8 on October 3, 1997. The market
capitalization of Luby's has decreased approximately $1/3 billion
since October 3, 1997.
In spite of the aforesaid results, the BOD extended Mr. Parker's
employment contract. On September 25, 2000, he "tendered his
resignation ... subject to finalizing a separation agreement."
SHAREHOLDERS NEED THEIR OWN "WATCHDOGS" TO MIND THE STORE
AND TO MAKE SURE THAT THEIR CONCERNS ARE HEARD
The Committee believes that the success of any company is based
upon the performance of its top executive officers and that close
scrutiny of their performance is required by the BOD. The Committee
believes that the BOD rewarded Mr. Parker in the face of negative
financial results, let questionable spending go unchecked and has a
history of permitting conflicts of interest. The Committee believes
that the BOD should be accountable for its acts. Further, the
Committee believes that the input of independent Directors is
essential for the improvement of corporate governance and financial
results.
To this end, the Committee proposes the following:
[X] Vote FOR our Nominees: Elisse Jones Freeman; Herbert Leslie
("Les") Greenberg; Thomas C. Palmer, Davis W. Simpson and William P.
Snyder (Item 1). (If three Director positions are subject to election,
the nominations of Mrs. Freeman and Mr. ___ shall be withdrawn. If
four Director positions are subject to election, the nomination of
Mrs. Freeman shall be withdrawn.)
[X] Vote FOR Shareholder Proposal (Item 2), a resolution
requesting that the BOD provide for the annual election of all
Directors and that the BOD be declassified.
[X] Vote FOR Shareholder Proposal (Item 3), a resolution
requesting that the Cash Incentive Bonus Plan be amended so that
bonuses only be paid to the CEO in those years where the prior year's
financial performance has been exceeded.
[X] Vote FOR Shareholder Proposal (Item 4), a resolution
requesting that the Corporate Governance Guidelines be amended to
provide any Director with the unfettered right to have items he/she
submits for discussion at BOD meetings placed upon the meeting's
agenda.
[X] Vote FOR Shareholder Proposal (Item 5), a resolution
requesting the removal of all anti-takeover defenses.
Shareholders are urged to attend the Annual Meeting in person.
If you are unable to attend in person and wish to have your shares
voted, please sign and date the enclosed BLUE proxy card and return it
by mail or fax as promptly as possible. IF YOU VOTE FOR US, PLEASE DO
NOT USE THE WHITE PROXY CARD OF LUBY'S AS IT WOULD REVOKE YOUR VOTE
FOR US.
Sincerely,
The Committee of Concerned Luby's Shareholders
By: HERBERT LESLIE("LES")GREENBERG
HERBERT LESLIE("LES")GREENBERG
PLEASE PROMPTLY SIGN, DATE AND RETURN BY MAIL OR
FAX THE ENCLOSED PROXY CARD TO:
Committee of Concerned Luby's Shareholders
P.O. Box 6983
Tyler, Texas 75711
Fax Nos. (903) 581-4000 or (903) 534-0613
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PROXY STATEMENT
OF
THE COMMITTEE OF CONCERNED LUBY'S SHAREHOLDERS
IN CONNECTION WITH A SHAREHOLDER SOLICITATION
REGARDING THE ELECTION OF INDEPENDENT DIRECTORS
AND SHAREHOLDER PROPOSALS AT THE
2001 ANNUAL MEETING OF SHAREHOLDERS
OF LUBY'S, INC.
November __, 2000
This Proxy Statement and the accompanying BLUE proxy card are
being furnished to shareholders of Luby's, Inc. ("Luby's") in
connection with the solicitation of proxies by The Committee of
Concerned Luby's Shareholders ("Committee") for use at the Annual
Meeting of Shareholders of Luby's or at any postponement or
rescheduling thereof ("Annual Meeting"). Luby's has indicated that
the Annual Meeting will be held on Friday, January 12, 2001, at 9:00
A.M., at the Omni San Antonio Hotel, 9821 Colonnade Boulevard, San
Antonio, Texas. The Board of Directors ("BOD") of Luby's has fixed the
close of business on November __, 2000 as the record date for
determining the shareholders of Luby's entitled to notice of and to
vote at the Annual Meeting. Only holders of record of the shares of
common stock ("Common Stock") on the record date are entitled to vote
at the Annual Meeting. Luby's has stated that there were 22,420,375
shares of Common Stock outstanding as of June 30, 2000. The exact
number of shares of Common Stock outstanding on the record date is
more fully described in Luby's proxy materials. Each share of Common
Stock is entitled to one vote on such matters as may properly come
before the Annual Meeting.
Copies of the Proxy Statement and BLUE proxy card are being
mailed or furnished on or about November 24, 2000.
You are urged to sign and date the enclosed BLUE proxy card
and return it in the enclosed envelope or fax it to (903) 581-4000 or
(903) 534-0613 whether or not you plan to attend the Annual Meeting.
A shareholder may revoke any proxy (whether such proxy was solicited
by the Committee or by Luby's) at any time prior to its use by
submitting a duly executed proxy bearing a later date or written
revocation, and, in addition, any shareholder who attends the
Annual Meeting in person may vote at the Annual Meeting thereby
canceling any proxy previously given.
The Proxy Statement and form of proxy will be delivered to
holders of at least the percentage of Common Stock of Luby's required
under applicable law to carry the proposals set forth hereinafter.
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY CARD TO:
THE COMMITTEE OF CONCERNED LUBY'S SHAREHOLDERS
P. O. BOX 6983
Tyler, Texas 75711
(800) 657-2286
Fax Nos. (903) 581-4000 or (903) 534-0613
E-mail: [email protected]
ELECTION OF DIRECTOR(S) (ITEM 1)
The Committee believes that its Nominees will be the type of
independent, effective Directors that Luby's needs to protect
Shareholder interests and increase Shareholder value. Each of the
Committee's Nominees has consented to being named in the Proxy
Statement and to serve as a Director of Luby's if elected. There is
no agreement or understanding between such Nominees and any other
person pursuant to which the Nominee was selected as a Nominee of the
Committee. The Nominees are:
[X] ELISSE JONES FREEMAN ("Mrs. Freeman") is 57 years old and a
Volunteer Professional. Her business address is P. O. Box 1231,
Lewisville, Texas 75067. She owns 53,562 shares of Luby's. She has
been a Shareholder since 1980. Her father was Henry O. Jones, one of
the founders and formerly a Chief Operating Officer and Executive Vice
President of Luby's. She has dined at Luby's for almost her entire
life.
Mrs. Freeman earned a Bachelors of Arts degree from Southern
Methodist University in 1964. She holds a Secondary Teaching
Credential and taught from 1964 to 1968. She held a real estate
license in the early 1980s.
Mrs. Freeman has served as a national/international officer of
Alpha Delta Pi Sorority for 18 years. She now serves as the
International Vice President of Collegiate Membership for Alpha Delta
Pi Sorority. She has served as Vice President on the Grand Council
since 1997.
Mrs. Freeman is married and has three children.
[X] HERBERT LESLIE ("LES") GREENBERG ("Mr. Greenberg")is 57 years
old and a semi-retired business litigation attorney, arbitrator,
mediator and investor. His business address is P.O. Box 5445, Culver
City, CA 90231.
Mr. Greenberg and Paulette D. Greenberg (formerly Nebrat)("Mrs.
Greenberg") own 5,300 shares of Luby's. They first became
Shareholders in 1996. Mrs. Greenberg commenced dining at Luby's more
than fifty (50) years ago in Corpus Christi, Texas. She graduated
from the University of Texas in 1965. Mr. and Mrs. Greenberg have
dined at Luby's for about thirty (30) years.
In the early 1970s, as Director of Compliance of a New York Stock
Exchange Member Firm, Mr. Greenberg and his staff audited and enforced
legal/regulatory compliance.
From 1973 until semi-retirement in 1994, Mr. Greenberg was
engaged in the practice of law with emphasis upon business litigation.
He represented many individuals and corporations before arbitration
panels and in various state and federal courts. He has served as an
arbitrator on the panel of the National Association of Securities
Dealers since 1976. Also, he has served on the panels of arbitrators
of the American Arbitration Association, Pacific Stock Exchange and
New York Stock Exchange. He has served the Los Angeles
Superior/Municipal Courts as an arbitrator, settlement officer
(mediator) and Judge Pro Tem.
From 1976 to 1980, Mr. Greenberg served as an instructor of Real
Estate Law and Finance at West Los Angeles Community College. From
1976 to 1996, he was licensed as a Real Estate Broker.
During April through May 2000, Mr. and Mrs. Greenberg visited
many units of Luby's from Arizona to Tennessee and from Texas to
Missouri in order to determine the quality of the product/service.
[X] THOMAS C. PALMER ("Palmer") is 52 years old and an investment
manager. His business address is P.O. Box 6983, Tyler, Texas 75711.
Mr. Palmer owns 4,000 shares of Luby's common stock. Mr. Palmer
has regularly dined at Luby's in Tyler, Texas since 1980. He has also
dined at many other Luby's Units from Texas to Arizona.
Mr. Palmer has been involved in the investment management
profession since 1974. He has been President of Ridglea Investor
Services, Inc. of Tyler, Texas since 1979. He achieved his Bachelors
and Masters degrees in Business Administration from Texas Christian
University ("TCU") where he taught a graduate level course on
investments in 1974.
In addition to the common stock of Luby's, Mr. Palmer and his
clients own long-term investments in Brinker International, Tricon
Global Restaurants as well as several branded food companies.
Mr. Palmer has been married, since 1975, to Marjorie
T. Palmer (formerly Thomas)("Mrs. Palmer"), who is also a graduate of
TCU. They have three children.
[X] DAVIS W. SIMPSON ("Mr. Simpson") is 62 years old and retired.
His address is 1318 Twilight Ridge, San Antonio, TX 78230.
Mr. Simpson has been a shareholder of Luby's since 1965. He owns
6,000 shares.
Mr. Simpson received his Bachelors in Business Administration
degree from the University of Texas in 1963.
Mr. Simpson was employed by Luby's for 32 years, his last
positions being that of Director of Management Training (1973-1985)
and Vice President of Managerial Personnel (1985-1995). His duties in
the latter position involved recruiting, training and managing
placements at Units.
Mr. Simpson is married and has two children.
[X] WILLIAM P. SNYDER ("Mr. Snyder") is 49 years old and employed in
elementary school special education. His address is 9541 Highedge
Drive, Dallas, Texas 75238.
Mr. Snyder presently owns 500 shares of Luby's.
Mr. Snyder received his Bachelors in Journalism from the
University of Texas in 1974.
Mr. Snyder was employed by Luby's for 24 years. He served as an
Area Vice President (1995-2000), Unit Manager (1981-1995), Associate
Manager (1979-1981) and Assistant Manager (1976-1979).
Mr. Snyder is married and has two children.
Luby's employs a staggered system of electing Directors whereby
only a minority of the Director positions are subject to election at
the Annual Meeting. At the time the Committee filed this Proxy
Statement, the terms of four Directors were expected to expire at the
Annual Meeting and at least one Director was expected to resign.
However, Luby's has indicated that it has the right to increase or
decrease the number of Director positions and, thus, the number of
Director positions subject to election at the Annual Meeting. If
three Director positions are subject to election, the nominations of
Mrs. Freeman and Mr. ___ shall be withdrawn. If four Director
positions are subject to election, the nomination of Mrs. Freeman
shall be withdrawn.
Proxies sought hereby cannot be voted for a greater number of
persons than the nominees named.
The Election of Directors is more fully described in the proxy
materials of Luby's.
REASON(S) FOR ELECTING INDEPENDENT DIRECTORS
The Committee believes, in part, that it is the duty of each
member of the BOD to monitor and consult with Management to cause
continuing betterment of net profits, quality of product/service,
reputation and employee relations at Luby's.
The following sets forth material concerns of the Committee as to
serious errors committed by the BOD, the problems facing Luby's and
specific suggested solutions.
A. Questions of Quality of Management Decisions
and Oversight of Management by the BOD
Unfortunately, Luby's is a somewhat troubled corporation after
embarking on a "long-term strategic plan." In the opinion of the
Committee, the strength of Luby's has been in its niche market of the
cafeteria segment of food service providers; and it is not and should
not be expected to be all things to all people.
Certain problems have become apparent. It is the hope of the
Committee that Luby's can return to the ranks of one of the premier
food service providers, but, in the opinion of the Committee, it
cannot occur without changes to the current BOD of Luby's.
(1) Declining Sales, Net Profits and Market Stock Prices
Prior to October 1997, Luby's was financially very healthy.
"'Nobody is building any new cafeterias except us,' Ralph 'Pete'
Erben, Luby's president and chief executive officer, told about 350
people attending the company's annual meeting .... Hard economic times
and the FIERCELY COMPETITIVE cafeteria market have hurt Luby's
COMPETITORS, but will NOT slow Luby's growth, he said." (Emphasis
added.) (San Antonio Express-News ["SAEN"], 3/7/92) "'Luby's is a very
healthy company,' said David B. Daviss, who was appointed acting chief
executive officer by the company's board last Friday. 'We make a lot
of money and we generate a lot of cash IN A VERY COMPETITIVE
INDUSTRY.'" (Emphasis added.) (SAEN, 5/15/97)
Since October 1997, the market capitalization of Luby's has
declined approximately $1/3 billion. Net profits have declined
substantially. Sales have declined. Dividends have been cut. Units
have been eliminated.
(2) Choice of CEO by BOD
In or about October 1997, the BOD hired Mr. Barry J.C. Parker
("Parker") as President and CEO of Luby's for a term of three (3)
years. Mr. Parker's background included absolutely NO employment
experience in the food service industry. Mr. Parker had been employed
as a member of the Executive Committee, Chairman of the Board,
President and CEO of County Seat Stores, Inc. ("County Seat") from
1989 to June 1996. In October 1996, County Seat filed a petition for
bankruptcy.
County Seat did an analysis of the events which lead to its
filing for bankruptcy protection. "During the period from 1992 to
1994, the Company expanded from 605 stores, ... and an EBITDA margin
of 9.3%, to 701 stores, ... and an EBITDA margin of 8.2%. However, by
1995 the Company's EBITDA margin declined to 5.6% primarily due, in
the Company's view, to the following: (i) the Company, in an attempt
to further its expansion strategy, opened stores without sufficient
regard to the profitability of each location; (ii) in response to
increased price competition ..., the Company unsuccessfully expanded
its offering of branded apparel ...; (iii) the Company failed to
competitively source merchandise ...; and (iv) apparel retailers
generally experienced weak sales. By 1996, ... the Company was unable
to meet scheduled interest payment obligations .... As a result of the
foregoing, in October 1996, the Company filed a petition ... for
reorganization relief ... with the United States Bankruptcy Court
...." (County Seat, SEC Form S-1/A, 6/1/98) In the Committee's
opinion, Mr. Parker should have been able to exercise some control
over Items (i)-(iii), inclusive, and, as to Item (iv), many other
apparel retailers survived that "weak sales" period.
"Parker had said in a late August interview that his three-year
contract, which will expire at the end of the month, had been extended
by the board of directors, ..." (SAEN, 9/26/00)
The Luby's Press Release dated September 25, 2000, states, "Barry
J.C. Parker has tendered his resignation ... subject to finalizing a
separation agreement." "Some former managers, who had said in
interviews that they were unhappy with Parker's strategy and personal
approach, greeted the news of Parker's resignation with glee." (SAEN,
9/25/00)
In the Committee's opinion, with Luby's facing fierce competition
and Mr. Parker having NO prior employment experience in the food
service industry and producing questionable results at County Seat, it
was an obvious mistake of the BOD to hire Mr. Parker. Further, after
witnessing the financial/operational results of the prior three (3)
years, the BOD's decision to extend Mr. Parker's employment is
incomprehensible and inexcusable.
(3) "Made-From-Scratch" to Outsourced Food
"RECIPE For SUCCESS --- Take liberal quantities of: Luby's Fresh
Foods and Variety." (The Luby's Story --- Good food from good people
by Steve Barnhill, 1988) "Luby and Johnston ... built ... the Luby's
Cafeterias of the future. It was a huge success because - then as now
- Luby's Cafeterias provided greater value than the competition. From
the very start, Luby and Johnston made the commitment to good service
and good food MADE FROM HIGH-QUALITY FRESH INGREDIENTS, attractively
presented, and served generously at a reasonable price." (Emphasis
added.) (Luby's Cafeteria --- Good food from good people, 50th
Anniversary Recipe Collection, 1996)
"'Luby's built up its reputation by making food from scratch,'
said food services coordinator Janet Duckham." (SAEN, 5/10/95) "Close
your eyes and imagine a dining experience that includes dozens of your
favorite foods - all of which have been prepared from scratch. Mmmm.
... So is it just a dining fantasy? No, it's any day in the food
line at one of Luby's 224 cafeterias ...." (SAEN, 7/18/97)
Mr. Parker felt that he had a mandate to change everything at
Luby's. "'Now, for the first time, we're questioning everything,' he
said. 'That's the reason I'm here.'" (SAEN, 1/9/98)
Mr. Parker conceived and implemented a "long-term strategic
plan." "'This is the first time that the company has developed a
long-term strategic plan,' company spokeswoman Karen Sparks said. The
plan - 10 months in the making - has six key initiatives, including
four that the company is setting in motion this week, she said."
(SAEN, 6/25/98) "'This past year was a real transition for Luby's,'
Barry J.C. Parker ... said Friday at the company's annual meeting ....
Parker said he believes Luby's accomplished 'a great deal' by
implementing a new strategic plan." (SAEN, 1/9/99)
Under a "long-term strategic plan" conceived and implemented by
Mr. Parker, Luby's switched from its food preparation process of
"made-from-scratch" to the use of outsourced food. The public
detected a change in the quality of the food at Luby's. "If you think
homemade food is a thing of the past, you just may be right. But at
Luby's? We noticed some subtle changes at the popular San
Antonio-based cafeteria chain, WHICH BUILT ITS REPUTATION ON such
homemade (as in MADE FROM SCRATCH) specialties as .... You can still
find these items ... at the cafeteria chain, of course. ... IT'S JUST
THAT SOME OF THE OLD FAVORITES DON'T TASTE AS, WELL, HOMEMADE AS THEY
USED TO." (Emphasis added.) (SAEN, 9/17/99)
The Committee finds it absolutely inconceivable and indefensible
that a business whose reputation is based upon "made-from-scratch"
would change from "made-from-scratch" and that the BOD would allow it
to occur.
(4) Reduced Compensation of Unit Management
"RECIPE For SUCCESS --- .... Add large portions of: Luby's
Organization and Entrepreneurship ...." (The Luby's Story --- Good
food from good people, 1988)
Luby's used to pride itself on the entrepreneurial spirit of its
Unit Managers. The "60/40" compensation plan, i.e., division of Unit
net profits whereby 60% went to Luby's and 40% to be divided by Unit
Management, was well known before the arrival of Mr. Parker.
In 1997, John B. Lahourcade, then Chairman of the Board and a
former CEO of Luby's stated, "A key ingredient of our profitability
and success is the experience of our managers. ... With our incentive
compensation system, our managers have always been our 'partners,' and
we will strive to provide them with the greatest opportunity for
success." (Letter to Our Shareholders, 6/12/97)
In 1998, the compensation plan was adjusted on three (3)
occasions with the result that the former "60/40" compensation plan no
longer exists and that Unit Manager compensation was substantially
reduced.
It is the Committee's opinion that a reduction in the Unit
Manager compensation has caused the decline of the entrepreneurial
spirit which had made Luby's into the premier cafeteria business.
The Committee advocates a return to an effective incentive
compensation program at the Unit level.
(5) Questionable Market Testing of "Bundled Meals"
The Committee believes in the general concept of "change";
however, it should only be done after adequate testing and the
demonstration of positive financial results. The Committee believes
that Luby's, during the past three (3) years, has implemented
significant changes and significant financial performance declines
have followed. The roll out of the "new marketing strategy"
associated with "bundled meals" was one of those significant changes.
The Luby's News Release dated May 23, 2000 states, "Parker ...
today announced a new strategy designed to increase same-store sales.
The program focuses on new bundled meals .... Parker added, 'Based on
customer feedback, we are optimistic about the ability of this new
strategy to drive sales. ... Luby's WILL roll out the new program in
almost 60 restaurants initially, ...." (Emphasis added.) In The
Luby's Letter to Our Shareholders dated June 12, 2000, Mr. Parker
stated, "The new program WILL BE rolled out to approximately 70
restaurants by the end of June, ..." (Emphasis added.) The Luby's
News Release dated July 21, 2000 states, "Parker added, ... By the
end of July, we will have COMPLETED the roll out of our new bundled
meal offerings to ALL of our major markets.' ... The San Antonio
company operates 231 Luby's restaurants ..." (Emphasis added.) The
Luby's News Release dated August 18, 2000 states, "During July the
company AGGRESSIVELY rolled out the new marketing strategy to all
major markets, .... It is, however, early in the new campaign,
and the ultimate financial impact is still UNCERTAIN. According to
Parker, 'Most of our markets have had this offering for just a few
weeks. ...'" (Emphasis added.)
One can reasonably argue that Mr. Parker did, at the least, cause
insufficient testing of the "new marketing strategy" before
implementing an aggressive system-wide roll out of the new program.
The decision for the aggressive roll out to all major markets was made
approximately 21 days after a roll out to 60 Units was completed.
Also, the financial impact was best described as "uncertain" at the
time the ultimate roll out decision had been made.
The Committee believes that the BOD should implement measures to
ensure that there is adequate testing of proposed future changes and
that major changes are not implemented when the chance of success can
only be described as "uncertain."
(6) Management and Vendor Turnover
"Some store managers of the San Antonio-based cafeteria chain
have left the company in the past several years following changes
imposed by senior management." (SAEN, 9/21/00) The past Annual
Reports to Shareholders have identified Area Vice Presidents of
Luby's. Since the August 31, 1997, many are no longer employed by
Luby's.
Ending a twenty (20) year relationship between Luby's and its
former advertising agency, the advertising agency cited "fundamental
concerns about the turmoil within the company" and "operational issues
which marketing cannot solve." (SAEN, 5/24/00)
The Committee advocates effective/impartial exit-interviews of
former management employees and/or inquiries of former long time
vendors to learn the cause(s) of the separations so that appropriate
remedies may be implemented.
(7) Legal Fees
Luby's has paid legal fees to the law firm of Cauthorn Hale
Hornberger Fuller Sheehan & Becker ("Cauthorn Firm"), of which James
R. Hale, former Secretary of Luby's, was/is a member. The legal fees
were as follows: 1999 ($475,000), 1998 ($416,000), 1997 ($584,000),
1996 ($563,000), 1995 ($439,000).
The Committee asks whether the legal services were necessary. By
the nature of its business, Luby's should not be engaged in other than
mundane legal matters. "Slip, trip and fall" matters are probably
handled by attorneys paid through insurance coverage. Contractual
matters should be so routine that they can be handled with a word
processor and an attorney review of changes from previously used
forms. However, for five (5) years, Luby's paid legal fees to the
Cauthorn firm which averaged $41,284 per month.
Certain questions arise. What additional amount of legal fees,
if any, is Luby's paying to other law firms? When was the last time,
if ever, the BOD caused an independent legal fee audit to be conducted
as to the reasonableness and necessity of those fees? When was the
last time, if ever, the BOD required competitive bidding from law
firms which might seek business from Luby's?
Luby's has failed and, thus, refused to respond to inquiries and
suggestions concerning the aforesaid legal fees. On March 24, 2000,
Mr. Greenberg wrote to Mr. David B. Daviss ("Daviss"), Chairman of the
Board, asking: (1) if and when Luby's last conducted an audit of the
aforesaid legal fees; and, (2) when Luby's last "shopped the market"
with respect the cost of legal services being provided. On March 27,
2000, Mr. Daviss forwarded a non-responsive reply. On March 31, 2000,
Mr. Greenberg forwarded the aforesaid correspondence to the General
Counsel of Luby's stating, "I want to bring the matter of what appears
to be exorbitant legal costs directly to your attention." The General
Counsel did not respond. On June 1, 2000, Mr. Greenberg wrote to the
General Counsel stating, "Approximately two months ago, I wrote to you
with respect to what I considered exorbitant legal (sic) corporate
legal fees incurred by Luby's and suggested means by which those fees
could be reduced." Again, the General Counsel did not respond.
Other very serious questions are raised. What are the underlying
problems which are causing the expenditure of such amounts of legal
fees? What has the BOD done, if anything, to reduce and/or eliminate
the underlying causes of the expenditures?
The Nominees, if elected to the BOD, are committed to learn the
answers to the aforesaid questions and, if appropriate, advocate
remedial relief.
B. Conflict of Interests at the Highest Level
A conflict of interest occurs when one is required to be loyal to
two masters at the same time where the interests of the masters oppose
one another. An officer and/or employee of Luby's owes Luby's a duty
of undivided loyalty. However, there are situations at the highest
levels of Luby's where conflicts have been allowed to occur.
(1) Legal Fees
It was the duty of the former Corporate Secretary of Luby's to
render unbiased legal advice to the BOD as to how to deal with
Management, but Management was paying his law firm, on average, more
than $40,000 per month. (One should note that, under federal
securities law, Luby's is no longer required to disclose to
Shareholders any legal fees paid to the Cauthorn Firm as the former
Secretary resigned, but that does not mean that the payments have
ceased.)
The Nominees, if elected to the BOD, are committed to investigate
whether the legal fees were reasonable and necessary, and, if not,
advocate that Luby's seek appropriate remedial relief.
(2) Consulting Fees
Since at least 1996, Luby's has employed a Director (former
officer of Luby's) as a "consultant" and paid that Director $7,083 per
month. His original contract is to expire in 2001. Prior to January
1998, another Director and previous officer of Luby's received
"consulting fees" of $10,417 per month.
Such arrangements constitute conflicts of interest. A Director
owes a fiduciary duty to the Shareholders to supervise Management to
determine whether Management has properly performed its functions. On
the other hand, a "consultant" who is receiving funds from Management
is obligated to Management. The situation jeopardizes the
effectiveness of both Management and the Director to the detriment of
the Shareholders.
The Committee believes that Directors should never receive
compensation from Luby's in other than their capacity as a Director.
It is fundamental that Directors should have undivided loyalty to the
Shareholders.
(3) Management Bonus Compensation
The Committee believes that Management should be fairly
compensated and awarded bonus compensation only when it produces
results which exceed the prior year's performance and meet or exceed
objective criteria specified by the BOD. See, Proposals, Restriction
on Cash Bonus Plan Proposal, below.
As stated in the Luby's Bonus Incentive Plan for Fiscal Year
2000, Mr. Parker established his own goals and the BOD agreed. "[A]t
the recommendation of the Chief Executive Officer, the Compensation
Committee of the BOD has approved certain Strategic Objectives and a
threshold earnings goal for the Company for fiscal 2000." The phrase,
"Strategic Objectives," is so vague that one cannot determine whether
the BOD had any objective basis to distribute Shareholders' money.
Part of the potential bonus "will be based on performance versus the
strategic objectives as determined by the CEO and approved by the
Compensation Committee of the BOD." "[M]anagement of the Company
shall review the job performance of each Participant ..." In other
words, under the Plan, Mr. Parker, who was a potential recipient of
funds, was authorized by the BOD to establish performance targets and
evaluate his own performance.
Under the Cash Bonus Plans, Mr. Parker received $93,500 (1999)
and $132,000 (1998) while other participants in the Plan have received
much lesser amounts. At the same time, Mr. Parker and the BOD
implemented a series of compensation reductions for Unit Managers.
C. Possible Corporate Waste
(1) Architectural Design Fees
It is the concern of the Committee that Luby's may have been
charged and recharged for substantially the same design work. As of
June 4, 2000, according to the Press Releases posted on the Luby's
Internet web-site, there had been thirteen (13) new openings with an
additional 96,968 square feet of facilities with 2,724 more seats.
The new Units, large and small, are very similar in design. However,
Luby's employed four (4) different architectural firms to design the
five (5) Community sized facilities and employed four (4) different
architectural firms to design the eight (8) full sized Units. A total
of five (5) different architectural firms were
involved. The Units at Dallas (3/24/00) and San Antonio (3/16/00)
were each described as 8,000 square feet, 262 seats and 70 employees.
However, Luby's employed two (2) different architectural firms to
design those locations.
The Nominees, if elected to the BOD, are committed to advocate
the implementation of measures to ensure the elimination of
duplication of expenses.
(2) CEO Base Salary Increases
In substance, the BOD donated extra compensation to Mr. Parker.
On September 15, 1997, Luby's and Mr. Parker entered into an
Employment Agreement whereby he agreed to perform services and Luby's
agreed to pay him a "minimum base salary of $360,000 per year." On
January 8, 1999, Luby's and Mr. Parker entered into an amendment to
the Employment Agreement which states, "Pursuant to the authorization
by the BOD ... to increase your minimum base salary to $390,000 per
year." Mr. Parker did not incur any additional obligation. On
October 15, 1999, Luby's and Mr. Parker enter into another amendment
to the Employment Agreement which states, "Pursuant to authorization
by the BOD ... to increase your minimum base salary to $405,000 per
year." Mr. Parker did not incur any additional obligation.
The Nominees, if elected to the BOD, are committed to investigate
whether the compensation increases occurred without legal
"consideration," and, if so, would advocate appropriate remedial
relief.
D. Potential to Stifle Dissent on the BOD
It is the Committee's opinion that the Corporate Governance
Guidelines of Luby's ("Guidelines") has the potential to stifle
Director dissent. The CEO and the Chairman of the Board, in effect,
controlled the issues upon which the Directors might deliberate. Item
No. 18 of the Guidelines stated, "Board Agenda. The CEO in
conjunction with the COB ... will establish and publish an agenda for
each meeting of the Board. Board members may suggest items for
inclusion on the agenda and, SUBJECT TO the authority of the COB AND
the will of the majority, may raise for discussion at any Board
meeting subjects not on the agenda." (Emphasis added.) No member of
the BOD has been assured the unfettered right to place any item for
discussion on the agenda.
Pursuant to the powers contained in the Guidelines, the Chairman
of the Board could stifle internal dissent and, thus, arguably,
violate a fiduciary duty to Shareholders. For all practical purposes,
Mr. Parker and the Chairman of the Board controlled the agenda. In
substance, if the Chairman of the Board did not want an item
discussed, pursuant to the power conferred in the Guidelines, it would
not have been discussed.
The Committee believes that the Guidelines should be amended to
assure each Director an unfettered right to cause subjects he/she
wishes discussed to be placed upon the BOD meeting agenda and
discussed. See, Proposals, Corporate Guideline Meeting Agenda
Proposal, below.
E. Nominees' Specific Proposed Remedies
The following, not in order of significance, is a list of some
ideas which the Nominees would advocate in an attempt to improve
product/service, reputation, employee relations and profits at Luby's.
They would:
(1) encourage the free flow of information among employees,
former employees, Shareholders, customers and fellow Directors as to
concerns about Luby's, including, but not limited to a customer
cost-free hotline to obtain and utilize customer opinions and
suggestions and impartial exit interviews of former employees and
long-term vendors.
(2) solicit proposals (with specific reasoning) from Unit
Managers as to means to change Luby's for the better. (The Nominees
anticipate that suggestions will deal with issues related to
"made-from-scratch " and revival of a system of Unit Manager incentive
compensation.)
(3) at BOD meetings, advocate the implementation of promising
proposals obtained from Unit Managers and others.
(4) require Management to conduct adequate tests before
implementing strategic roll outs to ensure that profits are likely to
derive from changes, require Management to provide detailed
information as to the results of changes and, if the results are not
satisfactory, advocate a cessation of the respective changes.
(5) investigate, through individual efforts and/or through use
of personnel of Luby's, conflicts of interest and spending for legal
fees, architectural fees, consultants and other matters, to ferret out
underlying problems and/or waste.
(6) encourage accountability of Management by advocating
compensation based upon production of positive financial results.
(7) advocate Director active participation and accountability.
The Committee believes that, through implementing such proposed
remedies, operating profits would increase and, hopefully, stock price
appreciation would follow. However, no assurance can be given by the
Committee that its Nominees, if elected, will be successful in
achieving those results.
ADDITIONAL INFORMATION
The Committee has prepared portions of this Proxy Statement based
upon publicly available information on Luby's and assumes no
responsibility for the accuracy or completeness of any such
information contained herein. Consent of the respective authors has
not been obtained to use their publication(s) as proxy solicitation
materials.
The Committee has also prepared this Proxy Statement without the
benefit of reviewing the proxy statement of Luby's. As of the date of
this Proxy Statement, Luby's has not filed its proxy statement to be
employed in conjunction with the Annual Meeting.
The information concerning the Nominees has been furnished by the
respective Nominees.
CONCLUSION
In the Committee's opinion, the above described history does NOT
suggest that Luby's is a well-managed company whose affairs are
overseen by a capable BOD. The Committee believes that the current
problems justify the step of electing independent Directors. Luby's
needs Directors who can be relied upon to exercise the sort of
effective oversight that is required to adequately protect the
interests of the Shareholders.
Shareholders need independent members on the BOD who, as
Shareholders' advocates, will ask and demand answers to the "tough
questions" and are willing to make independent inquiries.
Allow Mrs. Freeman and Messrs. Greenberg, Palmer, Simpson and
Snyder to be your advocates as independent members of the BOD. (Mrs.
Freeman is only to serve if five Director positions are subject to
election at the Annual Meeting. Mr. ___ is only to serve if four or
five Director positions are subject to election at the Annual
Meeting.) Vote your proxy for these candidates.
PROPOSALS
A. DECLASSIFIED BOARD PROPOSAL (ITEM 2)
The Shareholder Proposal, by Mr. Greenberg, is as follows:
"RESOLVED, the Shareholders of Luby's, Inc. request that
the Board of Directors take the necessary steps to
declassify the elections of Directors by providing that
at future Board elections new Directors be elected annually
and not by classes as is now provided. The declassification
shall be phased in so that it does not affect the unexpired
terms of Directors previously elected."
Information on this subject appears in the proxy materials of
Luby's. You are urged to vote IN FAVOR of the proposal.
B. RESTRICTION ON CASH INCENTIVE BONUS PLAN PROPOSAL (ITEM 3)
The Shareholder Proposal, by Mrs. Greenberg, is as follows:
"RESOLVED, the Shareholders of Luby's, Inc. request that the
Board of Directors take the necessary steps to cause conditions
to be added to the terms of Cash Investment (sic) Bonus Plans so
that no bonus payment will be paid to the Chief Executive
Officer from those plans for a fiscal year if either
(1) the Earnings Per Share; or, (2) the Total Sales; or, (3) the
year-end market price of common stock of Luby's, Inc. do/does
not exceed those respective amounts of the prior fiscal year."
Information on this subject appears in the proxy materials of
Luby's. You are urged to vote IN FAVOR of the proposal.
C. CORPORATE GUIDELINE MEETING AGENDA PROPOSAL (ITEM 4)
The Shareholder Proposal is as follows:
"RESOLVED, the Shareholders of Luby's, Inc. request that
the Board of Directors take the necessary steps to allow
each member of the Board of Directors an unfettered right
to establish items for inclusion on the agenda for each
meeting of the Board of Directors."
Information on this subject appears in the proxy materials of
Luby's. You are urged to vote IN FAVOR of this proposal.
D. REMOVAL OF ANTI-TAKEOVER DEFENSES PROPOSAL (ITEM 5)
The Shareholder Proposal is as follows:
"RESOLVED, the Shareholders of Luby's, Inc. request
that the Board of Directors take the necessary steps to
remove all anti-takeover provisions."
Information on this subject appears in the Proxy Materials of
Luby's. You are urged to vote IN FAVOR of this proposal.
INFORMATION CONCERNING THE COMMITTEE
The Committee is composed of: L.L. Davis, a semi-retired
businessman, whose address is 4 Greyfriars Lane, San Antonio, Texas
78257 and who owns 100,000 shares of Luby's common stock; Mr.
Greenberg; Tommy H. Griggs, is a retired former 39-year employed of
Luby's where his last position was that of Director and Senior Vice
President - Management Personnel, whose address is 15 Westelm Circle,
San Antonio, Texas 78257 and who owns 300,000 shares of Luby's common
stock; Mr. Palmer; Mr. Simpson; and Mr. Snyder. They may be deemed
participants in this solicitation, and they collectively hold
approximately 1.85% of the Common Stock of Luby's.
VOTING PROCEDURES
The proxy statement and proxy card of Luby's include the
Shareholder Proposals, but NOT the names of Mrs. Freeman and Messrs.
Greenberg, Palmer, Simpson and Snyder, our nominees for Director.
Even if you have already returned a proxy to Luby's by using the
proxy card of Luby's, you still can cast your vote for our Nominees,
or any of them, and for the Shareholder Proposals, or any of them, by
returning the enclosed BLUE proxy card. (See the discussion of
"Revocation Rights," below.)
The presence, in person or by proxy, of the holders of shares of
Common Stock entitled to cast a majority of the votes entitled to be
cast at the Annual Meeting is required to constitute a quorum for the
transaction of business at the Annual Meeting. Under applicable
Delaware law, abstentions and broker non-votes (i.e., shares held in
street name as to which the broker, bank or other nominee has no
discretionary power to vote on a particular matter, has received no
instructions from the persons entitled to vote such shares and has
appropriately advised the Company that it lacks voting authority) are
counted for purposes of determining the presence or absence of a
quorum for the transaction of business. A plurality of the votes
present, in person or by proxy, is necessary for the election of
directors. With regard to the election of directors, votes may be
cast in favor or withheld; votes that are withheld or broker non-votes
will be excluded entirely from the vote and will have no effect on the
outcome. Abstentions may not be specified in the election of
directors. A stockholder may, with respect to each other matter
specified in the notice of the meeting (i) vote "FOR," (ii) vote
"AGAINST" or (iii) "ABSTAIN" from voting. An affirmative vote of a
majority of the shares present in person or by proxy and entitled to
vote at the annual meeting is required for approval of the other
matters presented. Shares represented by proxies that are marked
"ABSTAIN" on such matters and proxies relating to broker non-votes
will be counted as shares present for purposes of determining the
presence of a quorum. Such shares, however, will not be treated as
shares voting and therefore will not affect the outcome of the vote on
matters. The Shareholder Proposals are advisory in nature and cannot
be implemented without approval of the BOD.
The accompanying BLUE proxy card will be voted at the Annual
Meeting in accordance with your instructions on the card. You may vote
FOR the election of Mrs. Freeman and Messrs. Greenberg, Palmer,
Simpson or Snyder or all of them as Directors, or you may withhold
authority to vote for the election of any or all of them by marking
the proper box or boxes on the BLUE proxy card. It will not be
possible to vote on the election of any nominee of Luby's, who has
been nominated by its BOD to serve as a Director, by using the BLUE
proxy card. As required by SEC Regulation 240.14a-4(d)(iv), the
Committee hereby states that there is no assurance that the Luby's
nominees will serve if elected with any of our nominees. However, we
have no reason to believe that they will not serve.
Unless otherwise directed on the enclosed BLUE proxy card, as
more fully described below, the Committee will vote FOR Mrs. Freeman,
FOR Mr. Greenberg, FOR Mr. Palmer, FOR Mr. Simpson and FOR Mr. Snyder
to serve as the Directors (Item 1) (with Mrs. Freeman only to serve if
five Director positions are subject to election at the Annual Meeting
and Mr. ___ only to serve if four or five Director positions are
subject to election at the Annual Meeting); will also vote FOR the
Declassified Board Proposal (Item 2), FOR Restriction on Cash
Incentive Bonus Plan Proposal (Item 3), FOR Corporate Guideline
Meeting Agenda Proposal(Item 4), and FOR Removal of Anti-Takeover
Defenses Proposal(Item 5) described herein. We will vote against any
and all proposals of Luby's to enhance the compensation of its senior
officers and/or Directors.
IF NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A
DIRECTION TO VOTE THE SHARES REPRESENTED BY THE BLUE PROXY CARD FOR
THE ELECTION OF MRS. FREEMAN AND MESSRS. GREENBERG, PALMER, SIMPSON
AND SNYDER AS DIRECTORS (ITEM 1) (with Mrs. Freeman only to serve if
five Director positions are subject to election at the Annual Meeting
and Mr. ___ only to serve if four or five Director positions are
subject to election at the Annual Meeting), AS WELL AS FOR THE
DECLASSIFIED BOARD PROPOSAL (ITEM 2), FOR RESTRICTION ON CASH BONUS
INCENTIVE PROPOSAL(ITEM 3), FOR CHANGE OF CORPORATE GUIDELINES MEETING
AGENDA PROPOSAL (ITEM 4) AND FOR REMOVAL OF ANTI-TAKEOVER DEFENSES
PROPOSAL (ITEM 5), PROVIDED THAT YOU HAVE SIGNED AND DATED THE PROXY
CARD.
REVOCATION RIGHTS
You may revoke a proxy vote any time before the tally by: (1)
executing a later proxy card; (2) appearing at the meeting to vote;
or, (3) delivering to the proxy holder or the Secretary of Luby's
written notice of revocation prior to the date of the Annual Meeting.
The Secretary of Luby's is Ms. Karen Hess, and the offices of Luby's
are located at 2211 Northeast Loop 410, San Antonio, Texas 78217-4673,
telephone (210) 654-9000.
The Committee will keep the content of all proxy cards it
receives confidential from everyone except those working directly with
it and its staff until the Annual Meeting, at which time the proxy
cards must be presented to the inspectors of election in order to be
counted.
SOLICITATION
The persons who may be considered participants in this
solicitation are: Mr. L.L. Davis; Mrs. Freeman; Mr. and Mrs.
Greenberg; Mr. Tommy H. Griggs; Mr. and Mrs. Palmer; Mr. Simpson; and
Mr. Snyder.
None of the persons who may be considered "participants" has any
arrangement or understanding with any person with respect to (1) any
future employment with Luby's or (2) any future transaction to which
Luby's or any of its affiliates may be a party. To the best of the
knowledge of the participants, none has been, within the past year, a
party to any contract, arrangement or understanding with any person
with respect to any securities of Luby's.
The participants intend to vote their shares of Common Stock in
accordance with the recommendations as to Director nominees of the
Committee as set forth herein.
Proxies will be sought by mail, courier service, advertising,
telecopier, Internet, telephone and/or personal interview. The
Committee may request that brokers, nominees, fiduciaries and other
custodians forward soliciting material to the beneficial owners of
shares and reimburse those intermediaries for their expenses. The
Committee and the aforesaid participants will bear the costs of this
solicitation. Although no precise estimate can be made at the present
time, those costs are expected to be approximately $15,000 and to date
the Committee has expended approximately $1,200. The Committee and
the aforesaid participants will seek reimbursement from Luby's for the
costs of the solicitation. Such issue will not be submitted to a vote
of the Shareholders.
RECORD DATE/SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS/EXECUTIVE COMPENSATION/ELECTION OF DIRECTORS
Information on these subjects appears in the proxy materials of
Luby's.
SHAREHOLDER PROPOSALS FOR 2002 MEETING
Proposals that shareholders intend to present at the 2002 annual
meeting of stockholders (other than those submitted for inclusion in
proxy materials of Luby's pursuant to Rule 14a-8 of the Proxy Rules of
the Securities and Exchange Commission) must be received in writing by
Luby's no earlier than ___ 2001, and no later than October ___ 2001 to
be presented at the meeting. Proposals from shareholders owning over
$2,000 in stock for more than one year that are submitted under Rule
14a-8 for inclusion in the proxy materials of Luby's must be received
in writing by Luby's no later than August ___ 2001. Any such
stockholder proposals must be sent to the Secretary of Luby's at its
executive offices at 2211 Northeast Loop 410, San Antonio, Texas
78217-4673.
PLEASE VOTE FOR MRS. FREEMAN AND MESSRS. GREENBERG, PALMER,
SIMPSON AND SNYDER, AND IN FAVOR OF ALL SHAREHOLDER PROPOSALS. (Mr.
____ and Mrs. Freeman are only to serve if five Director positions are
subject to election at the Annual Meeting. Mr. ___ is only to serve
if four Director positions are subject to election at the Annual
Meeting.)
Sincerely,
THE COMMITTEE OF CONCERNED LUBY'S SHAREHOLDERS
By: /s/ HERBERT LESLIE ("LES")GREENBERG
HERBERT LESLIE ("LES")GREENBERG
=== PRELIMINARY COPY ===
(BLUE PROXY CARD)
PROXY
LUBY'S, INC.
2001 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY
THE COMMITTEE OF CONCERNED LUBY'S SHAREHOLDERS
FOR USE AT THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 12, 2001
AND AT ANY ADJOURNMENT THEREOF.
By signing this proxy, you revoke all prior proxies and appoint
Herbert Leslie ("Les") Greenberg, Paulette D. Greenberg and Thomas C.
Palmer, and each of them, as Proxies, each with full power of
substitution, to vote, as designated on the reverse side and below, at
the Annual Meeting of Shareholders of Luby's, Inc. to be held on
January 12, 2001, and at any adjournment thereof, all shares of the
Common Stock of Luby's, Inc. registered in your name at the close of
business on November __, 2000.
This proxy when properly executed will be voted as specified on the
reverse side, but, if no direction is given, this proxy will be voted
FOR Elisse Jones Freeman, Herbert Leslie ("Les") Greenberg, Thomas C.
Palmer, Davis W. Simpson and William P. Snyder (with Mrs. Freeman only
to serve if five Director positions are subject to election at the
Annual Meeting and Mr. ___ only to serve if four or five Director
positions are subject to election at the Annual Meeting), on FOR Item
2, FOR Item 3, FOR Item 4, and FOR Item 5. Notwithstanding the
foregoing, if this proxy is to be voted for any nominee and such
nominee is unwilling or unable to serve, this proxy will be voted for
a substitute in the discretion of the Proxies. The Proxies are
authorized to vote in their discretion upon such other matters as may
properly come before the Annual Meeting or any adjournment,
postponement or rescheduling thereof. Securities and Exchange
Commission Regulation 240.14a-4(d)(iv) requires the following
statement on this card: There is no assurance that the registrant's
nominees will serve if elected with any of the soliciting party's
nominees.
(See reverse side for voting instructions.)
THE COMMITTEE OF CONCERNED LUBY'S SHAREHOLDERS
P. O. Box 6983
Tyler, Texas 75711
(800) 657-2286
Fax Nos. (903) 581-4000 or (903) 534-0613
E-mail: [email protected]
(BLUE PROXY CARD)
The Committee of Concerned Luby's Shareholders recommends a vote FOR
Elisse Jones Freeman, Herbert Leslie ("Les") Greenberg, Thomas C.
Palmer, Davis W. Simpson and William P. Snyder on Item 1, FOR Item 2,
FOR Item 3, FOR Item 4 and FOR Item 5. (Mr. ____ and Mrs. Freeman only
to serve if five Director positions are subject to election at the
Annual Meeting. Mr. ___ only to serve if four Director positions are
subject to election at the Annual Meeting.)
1. Election of Directors:
Elisse Jones Freeman
[ ] FOR [ ] AGAINST [ ] WITHHELD
Herbert Leslie ("Les") Greenberg
[ ] FOR [ ] AGAINST [ ] WITHHELD
Thomas C. Palmer
[ ] FOR [ ] AGAINST [ ] WITHHELD
Davis W. Simpson
[ ] FOR [ ] AGAINST [ ] WITHHELD
William P. Snyder
[ ] FOR [ ] AGAINST [ ] WITHHELD
2. Shareholder proposal to amend By-Laws to eliminate staggered
terms of office for and conduct annual elections all members
of the Board of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Shareholder proposal to withhold executive officer cash bonuses
unless financial status of Luby's improves from year to year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Shareholder proposal to amend Corporate Guidelines so that
each Director has the right to place items for discussion on
agenda at meetings of the Board of Directors without
permission of Chairman of the Board.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Shareholder proposal to remove all anti-takeover defenses.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. 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 Elisse Jones Freeman, Herbert
Leslie ("Les")Greenberg, Thomas C. Palmer, Davis W. Simpson and
William P. Snyder (Item 1), and FOR Shareholder Proposals 2, 3, 4 and
5.
The undersigned revokes any prior proxies to vote the shares covered
by this Proxy.
DATED: ______, 200_
_____________________________ _______________________________
(PLEASE PRINT YOUR NAME) (PLEASE PRINT YOUR NAME)
_____________________________ _______________________________
Signatures (Signature, if held jointly)
_______________________________
Title
Jointly owned shares will be voted as directed if one owner signs
unless another owner instructs to the contrary, in which case the
shares will not be voted. Trustees, administrators, etc., should
include title and authority. Corporations and Partnerships should
provide the full name of the entity and title of authorized person
signing the proxy.
To vote in accordance with the recommendations of The Committee of
Concerned Luby's Shareholders, just sign and date this proxy. No
boxes need be checked.
