<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the 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 sec. 240.14a-11(c) or sec. 240.14a-12
Piccadilly Cafeterias, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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:
[ ] 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.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
PICCADILLY CAFETERIAS, INC.
3232 SHERWOOD FOREST BOULEVARD
BATON ROUGE, LOUISIANA 70816
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 3, 1997
---------------------
TO THE SHAREHOLDERS OF PICCADILLY CAFETERIAS, INC.:
Notice is hereby given that the 1997 Annual Meeting of Shareholders of
Piccadilly Cafeterias, Inc. (the "Company"), will be held at the general offices
of the Company, 3232 Sherwood Forest Boulevard, Baton Rouge, Louisiana, on
Monday, November 3, 1997, at 10:00 a.m., for the following purposes:
1. To elect three persons to serve as directors on the Board of Directors
for a three-year term and until their successors are elected and have
qualified;
2. To act upon such other matters as may properly come before the meeting
or any reconvened meeting following any adjournment thereof.
Only holders of record as of the close of business on September 5, 1997 are
entitled to notice of and to vote at the meeting. A complete list of
shareholders entitled to vote at the meeting will be available for inspection by
shareholders at the offices of the Company immediately prior to the meeting.
The Annual Meeting may be adjourned from time to time without notice other
than announcement at the Annual Meeting, and any business for which notice of
the Annual Meeting is hereby given may be transacted at a reconvened meeting
following such adjournment.
By Order of the Board of Directors,
Mark L. Mestayer
Corporate Secretary
Baton Rouge, Louisiana
September 24, 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, PLEASE VOTE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED BUSINESS REPLY
ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN
PERSON.
<PAGE> 3
PICCADILLY CAFETERIAS, INC.
3232 SHERWOOD FOREST BOULEVARD
BATON ROUGE, LOUISIANA 70816
---------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 3, 1997
The proxy furnished herewith, for use only at the Annual Meeting of
Shareholders to be held November 3, 1997 (the "Annual Meeting"), and any
adjournments thereof, is solicited on behalf of the Board of Directors of
Piccadilly Cafeterias, Inc. (the "Company"). Solicitation is being made by mail
and may also be made by personal contact. Arrangements have been made with the
Company's stock transfer agent, Wachovia Bank, N.A., to mail the proxy materials
to shareholders of record (as defined below) and to nominees holding shares for
beneficial owners. All expenses incurred in the solicitation of proxies will be
paid by the Company. This proxy statement and the accompanying proxy are first
being mailed to shareholders on or about September 24, 1997.
Any shareholder executing a proxy retains the right to revoke it by
delivery of notice in writing, or delivery of a proxy bearing a later date, to
the Secretary of the Company at any time prior to its use, or by voting in
person at the Annual Meeting. All properly executed proxies received by the
Company and not revoked will be voted as specified and, in the absence of
instructions to the contrary, will be voted FOR the election of all of the
nominees for director identified below.
Only shareholders of record at the close of business on September 5, 1997
(the "Record Date") are entitled to notice of the Annual Meeting and to vote or
to execute proxies. At the close of business on the Record Date, the Company had
outstanding 10,528,368 shares of common stock, without par value ("Common
Stock"). Each shareholder is entitled to one vote on each matter considered at
the Annual Meeting per share of Common Stock held by the shareholder as of the
Record Date.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum. With
respect to the election of directors, withholding authority to vote with respect
to one or more nominees will be counted as present for purposes of determining
the existence of a quorum. If a quorum is present, directors will be elected by
a plurality vote.
1. ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide for three classes of
directors with staggered terms of office and provide that, upon the expiration
of the term of office for a class of directors, nominees for each class shall be
elected for a term of three years to serve until the election and qualification
of their successors or until their earlier resignation, death or removal from
office.
At the Annual Meeting, three nominees for director are to be elected;
accordingly, proxies can not be voted for more than three persons. The remaining
directors will have two years and one year, respectively, remaining in their
terms of office.
1
<PAGE> 4
The Company's By-laws provide that no person who is or would be 70 years of
age or older at the beginning of a term of office would be eligible for
nomination or election to the Company's Board of Directors. Ms. Julia H. R.
Hamilton, a member of the class of directors with terms expiring at the Annual
Meeting, has not been renominated in accordance with the Company's By-laws. It
is the intention of the Board of Directors, that as its first order of business
in its regular meeting scheduled for November 3, 1997, it will appoint Ms.
Hamilton an advisory director. Advisory directors are appointed for one-year
terms. Ms. Hamilton was a partner in the first Piccadilly Cafeteria in 1944 and
is principally engaged in personal investments. She has served as a director
since 1977.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION OF EACH OF THE
NOMINEES FOR DIRECTOR LISTED BELOW.
The Company has no reason to believe that any of the director nominees will
be unable to serve, if elected. If any such person is unable to serve for any
reason, proxies will be voted for a substitute nominee selected by the Board of
Directors of the Company.
The following tables set forth certain information regarding the three
nominees for director proposed by the Board of Directors and those directors
whose current terms of office will not expire at the Annual Meeting. For
information concerning membership on committees of the Board of Directors, see
"Other Information about the Board and its Committees" below.
NOMINEES FOR DIRECTOR
NOMINEES FOR THREE-YEAR TERM EXPIRING AT THE 2000 ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR
NAME SINCE AGE POSITION(S) WITH THE COMPANY
---- -------- --- ----------------------------
<S> <C> <C> <C>
Ralph P. Erben......................... N/A 66 N/A
Ronald A. LaBorde...................... 1992 41 Chief Executive Officer, President, and
Director
Paul W. Murrill........................ 1994 63 Chairman of the Board and Director
</TABLE>
Mr. Erben is principally engaged in personal investments. He was formerly
the Chairman and Chief Executive Officer of Luby's Cafeterias, Inc. having
served as an officer of that Company from 1978 to 1996 and a director from 1985
to 1997.
Mr. LaBorde joined the Company in 1982. From June 1986 to January 1992, he
was executive vice president, secretary and controller. In January 1992, he was
elected treasurer and chief financial officer. In June 1995, he was elected
chief executive officer and in July 1995, he was also elected president. He is a
director of AMEDISYS, Inc.
Mr. Murrill is retired. He has served as a director of Gulf States
Utilities Company and its successor company, Entergy Corporation, since 1978. He
was chairman and chief executive officer of Gulf States Utilities Company for
five of those years. Mr. Murrill was Chancellor of Louisiana State University
for seven years. He is a director of Tidewater, Inc., ChemFirst Corporation,
Howell Corporation, and ZYGO, Inc.
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE 1999 ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR
NAME SINCE AGE POSITION(S) WITH THE COMPANY
---- -------- --- ----------------------------
<S> <C> <C> <C>
Robert P. Guyton....................... 1996 60 Director
Edward M. Simmons Sr................... 1992 69 Director
Christel C. Slaughter.................. 1996 42 Director
</TABLE>
2
<PAGE> 5
Mr. Guyton is a financial consultant. He was formerly a vice president and
financial consultant for Raymond James & Associates, Inc. from 1993 to 1996.
From 1981 to 1991 he was president and chief executive officer of Bank South
Corporation. Mr. Guyton is a director of ChemFirst Corporation.
Mr. Simmons is the chairman of the board and chief executive officer of
McIlhenny Co., the makers of TABASCO brand pepper sauce. He is also a director
of Pan American Life Insurance Company, First Commerce Corporation, First
National Bank of Commerce and Central Louisiana Electric Company.
Ms. Slaughter is co-owner of and management consultant with Slaughter and
Associates, SSA Consultants, Inc. Ms. Slaughter earned a Ph.D. in management
from Louisiana State University in 1979. Ms. Slaughter serves as a regional
director of BankOne Corporation. Since 1979, she has been an active lecturer and
consultant for both governmental and private entities.
TERM EXPIRING AT THE 1998 ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR
NAME SINCE AGE POSITION(S) WITH THE COMPANY
---- -------- --- ----------------------------
<S> <C> <C> <C>
Norman C. Francis...................... 1995 66 Director
Dale E. Redman......................... 1995 49 Director
C. Ray Smith........................... 1992 62 Director
</TABLE>
Mr. Francis is the president of Xavier University of Louisiana, New
Orleans, Louisiana, a position that he has held for more than five years. He is
a director of The Equitable Life, New York, First National Bank of Commerce, New
Orleans, Louisiana and the Entergy Corporation. He is chairman of the Board of
Liberty Bank and Trust, New Orleans, Louisiana.
Mr. Redman has been executive vice president and chief financial officer of
United Companies Financial Corporation since 1988 and a director since 1983.
Mr. Smith is the Tipton R. Snavely professor of business administration and
interim dean of the Darden Graduate School of Business Administration,
University of Virginia. Mr. Smith has taught at the University of Virginia since
1961.
OTHER INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The Board of Directors held six meetings during the fiscal year ended June
30, 1997. No director during the last full fiscal year attended fewer than 75%
of the aggregate of (a) the total number of meetings of the Board of Directors
(held during the period for which he or she has been a director) and (b) the
total number of meetings held by all committees of the Board on which he or she
served (during the periods served).
The Board presently has four standing committees. Certain information
regarding the functions of the Board's committees, their present membership and
the number of meetings held by each committee during the fiscal year ended June
30, 1997 is described below:
Executive Committee. The Executive Committee is authorized, to the
extent permitted by law, to exercise substantially all powers of the Board
of Directors between meetings of the Board. The Executive Committee did not
meet during the fiscal year ended June 30, 1997. Paul W. Murrill
(Chairman), Dale E. Redman and Julia H.R. Hamilton are members of the
Executive Committee.
Audit Committee. The Audit Committee reviews with the Company's
independent auditors the plan, scope and results of the annual audit and
the procedures for and results of internal controls. The Audit Committee
reviews the audit services performed by the Company's independent auditors
and the possible effect on the independence of the auditors of the
performance of nonaudit services. The Audit Committee held two meetings
during the fiscal year
3
<PAGE> 6
ended June 30, 1997. C. Ray Smith (Chairman), Norman C. Francis, Julia H.R.
Hamilton, and Christel C. Slaughter are members of the Audit Committee.
Compensation Committee. The Compensation Committee, which has
authority to consider and make recommendations to the Board of Directors
regarding compensation of officers of the Company, held three meetings
during the fiscal year ended June 30, 1997. This committee also administers
the Company's 1993 Incentive Compensation Plan. Edward M. Simmons
(Chairman), Paul W. Murrill, Robert P. Guyton, and Dale E. Redman are
members of the Compensation Committee.
Nominating Committee. The Nominating Committee, which makes director
recommendations to the Board of Directors on an as needed basis, did not
meet during the year ended June 30, 1997. This committee will consider
nominees recommended by shareholders. Shareholders wishing to make a
recommendation may do so by sending a letter to the Nominating Committee.
Julia H.R. Hamilton (Chairman), Edward M. Simmons, and C. Ray Smith are
members of the Nominating Committee.
Compensation of Directors. Each director who is not an officer of the
Company receives, in addition to reimbursement of reasonable and necessary
costs and expenses incurred, a retainer of $1,000 per month, a fee of
$1,000 for each regular and special meeting of the Board of Directors that
he or she attends, and $500 for each meeting of a committee of the Board of
Directors that such director attends. In the case of directors who are
officers of the Company, a fee of $350 is received for each regular meeting
of the Board of Directors attended. Beginning July 1, 1997, the retainer is
paid 50% in cash and 50% in the Company's Common Stock and has been
increased to $15,000 per year. Also effective July 1, 1997, directors who
are officers of the Company no longer receive a fee for attending regular
meetings of the Board of Directors.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information on groups and individuals known
to the Company to be beneficial owners of more than five percent of the
outstanding Common Stock of the Company.
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
OF BENEFICIAL OWNER OWNED OF CLASS
------------------- ------------ --------
<S> <C> <C>
Brinson Partners, Inc. and related companies(1)............. 758,074 7.3%
O.Q. Quick.................................................. 865,602(2) 8.2%
#26 Sugar Creek Place
Waco, Texas 76712
</TABLE>
- ---------------
(1) Based upon information included in Schedule 13G dated February 12, 1997
filed with the Securities and Exchange Commission by Brinson Partners, Inc.
("BPI") on behalf of itself, Brinson Trust Company ("BTC"), Brinson
Holdings, Inc. ("BHI"), SBC Holding (USA), Inc. ("SBCUSA") and Swiss Bank
Corporation ("SBC"). BTC is a wholly-owned subsidiary of BPI. BPI is a
wholly-owned subsidiary of BHI. BHI is a wholly-owned subsidiary of SBCUSA.
SBCUSA is a wholly-owned subsidiary of SBC. The address of BPI, BTC and BHI
is 209 South LaSalle, Chicago, Illinois 60604-1295. SBCUSA's address is 222
Broadway, New York, NY 10038. The address for SBC is Aeschenplatz 6 CH-
4002, Basel, Switzerland.
(2) Includes 751,002 shares held by Mr. Quick as trustee or co-trustee under
several trusts, 30,000 shares held by Mr. Quick's spouse as trustee under
several trusts, and 84,600 shares held beneficially and of record jointly
with his spouse or individually by Mr. Quick or his spouse.
------------------------
4
<PAGE> 7
COMMON STOCK OWNERSHIP OF MANAGEMENT
Based on available information, the Company believes that set forth in the
table below is information in connection with the beneficial ownership of Common
Stock of the Company by the Named Executive Officers (as defined under
"Executive Compensation and Other Benefits" herein), the directors, nominees for
director and executive officers of the Company as a group (26 persons) as of
August 4, 1997:
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT RIGHTS TO ACQUIRE
OF BENEFICIAL OF BENEFICIAL
NAME OWNERSHIP(1) CLASS OWNERSHIP(7)
- ---- ------------------ ------- -----------------
<S> <C> <C> <C>
Norman C. Francis................................... 555 * --
Robert P. Guyton.................................... 1,000 * --
Julia H. R. Hamilton................................ 1,162,510(2) 11.0 --
Ronald A. LaBorde................................... 150,265(3)(4) 1.4 65,000
Paul W. Murrill..................................... 8,000 * --
Dale E. Redman...................................... 1,000 * --
Edward M. Simmons Sr................................ 1,262 * --
Christel C. Slaughter............................... -- * --
C. Ray Smith........................................ 554(5) * --
J. Fred Johnson..................................... 34,745 * 30,000
Joseph S. Polito.................................... 36,835 * 31,000
Warriner C. Siddle.................................. 19,749 * 18,600
Brian G. Von Gruben................................. 29,862(6) * 19,800
Directors, Nominees and Executive Officers as a
Group............................................. 1,594,935 14.8 273,000
</TABLE>
- ------------
* Less than 1%.
(1) Information relating to the beneficial ownership of Common Stock by
directors, nominees for director and Named Executive Officers is based upon
information furnished by each such individual using "beneficial ownership"
concepts set forth in rules promulgated by the Securities and Exchange
Commission under Section 13(d) of the Securities Exchange Act of 1934.
Except as indicated in other footnotes to this table, directors, nominees
and Named Executive Officers possessed sole voting and investment power
with respect to all shares set forth by their names. The table includes, in
some instances, shares in which members of a director's, nominee's or
executive officer's immediate family have a beneficial interest, and as to
which such shares the director, nominee or executive officer disclaims
beneficial ownership. The address of each owner is P.O. Box 2467, Baton
Rouge, Louisiana 70821.
(2) Includes 26,000 shares held as trustee of a charitable trust.
(3) A portion of the shares are held beneficially and of record jointly with
spouse.
(4) Includes 89,716 shares held by Mr. LaBorde as trustee or co-trustee
(together with Mr. O.Q. Quick, see "Common Stock Ownership of Certain
Beneficial Owners" above) under several trusts.
(5) Includes 300 shares held by his spouse.
(6) Includes 62 shares held by his spouse.
(7) Beneficial ownership includes rights to acquire shares under the 1993
Incentive Compensation Plan and are included in "Amount and nature of
beneficial ownership."
5
<PAGE> 8
EXECUTIVE COMPENSATION AND OTHER BENEFITS
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for fiscal years
ending June 30, 1997, 1996 and 1995, of (i) the Chief Executive Officer as of
June 30, 1997, and (ii) the other four most highly compensated executive
officers of the Company as of June 30, 1997 (for the purposes of this and the
following tables and discussion concerning executive compensation, such five
executive officers shall be referred to as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------------------------------- ------------ ALL
OTHER SECURITIES OTHER
ANNUAL UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS/SARS SATION(2)
--------------------------- ---- -------- -------- --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Ronald A. LaBorde............... 1997 $274,976 $133,504 -- -- $ 2,550
President and Chief Executive 1996 274,976 111,000 -- -- 2,900
Officer 1995 155,826 -- $23,771 250,000 3,250
Joseph S. Polito................ 1997 132,870 56,259 -- -- 800
Executive Vice President and 1996 120,952 26,250 -- 16,000 800
General Manager................. 1995 121,952 -- 23,697 -- 800
Brian G. Von Gruben............. 1997 141,804 30,968 -- -- 800
Executive Vice President and 1996 141,804 -- -- -- 800
Director of Marketing 1995 142,804 -- 22,902 -- 800
J. Fred Johnson(3).............. 1997 124,548 47,341 -- -- 800
Executive Vice President, 1996 79,084 13,125 -- 30,000 800
Treasurer and Chief Financial
Officer
Warriner C. Siddle.............. 1997 140,400 29,492 -- -- 800
Executive Vice President and 1996 140,400 -- -- -- 800
Director of Development 1995 141,400 -- 27,067 -- 800
</TABLE>
- ---------------
(1) Excludes perquisites and other benefits unless the aggregate amount of such
compensation is the lesser of either $50,000 or 10% of the annual salary
reported for the named executive officer. Amounts shown include the value of
personal use of company-owned vehicles and payments made to cover personal
income taxes related to use of these vehicles.
(2) Includes $800 per named executive per year paid by the Company for insurance
premiums for a group policy which afforded term life insurance and long-term
disability insurance for all officers and for a group accidental death
policy which afforded coverage for all executive officers. Remaining amounts
for Mr. LaBorde are for director fees.
(3) Mr. Johnson joined the Company in November, 1995.
------------------------
6
<PAGE> 9
OPTION GRANTS IN FISCAL YEAR 1997
No stock options were granted during 1997 to the Named Executive Officers.
Subsequent to the fiscal year-end, the Compensation Committee of the Board of
Directors granted options for 117,000 shares of Common Stock at its fair market
value on the date of grant of $12.00 per share. The Named Executive Officers
were granted options for 53,400 of these shares and such shares are included in
the table set forth in "Common Stock Ownership of Management."
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS (SARS)
The following table sets forth information with respect to the Named
Executive Officers concerning unexercised options and SARs held as of June 30,
1997. No options or SARs were exercised during the fiscal year ended June 30,
1997.
OPTION/SAR VALUES AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
JUNE 30, 1997 JUNE 30, 1997
----------------------------------- -----------------------------------
NAME EXERCISABLE(1) UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE
---- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Ronald A. LaBorde................... 50,000 200,000(2) $50,000 $200,000(2)
J. Fred Johnson..................... 25,000 5,000 25,000 5,000
Joseph S. Polito.................... 16,000 -- 16,000 --
</TABLE>
- ------------
(1) All options were awarded at the fair market value of the shares on the date
of grant.
(2) The Company has entered into an agreement with Mr. LaBorde pursuant to which
he has been granted a long-term incentive right to receive a cash payment
equal to the increase in price of 200,000 shares of the Common Stock between
June 9, 1995 and June 8, 1999. This long-term incentive right will vest
immediately upon a change of control and will vest in four annual 25%
increments to be paid in the event Mr. LaBorde ceases to serve as Chief
Executive Officer prior to June 8, 1999 and is in good standing with the
Board of Directors.
7
<PAGE> 10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has provided the following Compensation
Committee Report:
The Company maintains a Compensation Committee comprised entirely of
outside, independent directors. The Compensation Committee sets compensation for
the chief executive officer, approves the compensation of executive officers of
the Company, and administers the Company's stock option plan. In general, levels
and methods of compensation approved by the Committee are designed to:
- recognize individual initiative and performance;
- assist the Company in attracting and retaining qualified executives; and
- align the interests of executives with the long-term interests of
shareholders through award opportunities that can result in ownership of
Common Stock.
Compensation of the Company's executives consists primarily of a base
salary, bonus compensation based primarily on increases in pre-tax income over
the prior fiscal year, and the periodic grant of long term incentive
opportunities in the form of stock options. For purposes of computing such
bonuses, fiscal 1996 net income does not include the negative impact of certain
adjustments including those made in the fourth quarter of fiscal 1996 to record
interest reserves relating to Internal Revenue examinations and to record the
impact of the adoption of Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of." Total bonuses paid for fiscal year 1997 was $633,029 of which
the Named Executive Officers were paid $317,056. Certain other executives
received bonuses for fiscal 1997 on a discretionary basis. These were approved
by the Committee in recognition of individual initiative and levels of
responsibility with respect to the Company's performance for fiscal 1997. These
bonuses totaled $12,000 of which the named executives were paid $10,000.
In setting executive salary compensation, the Committee generally bases its
decisions on recommendations presented to it by the Company's management. The
Committee's decisions are made using subjective evaluations and, except as
described above, no formulas measuring Company or individual performance are
used. In May 1995, the Committee received a previously commissioned report from
an independent compensation consultant who the Committee had engaged to review
the Company compensation practices generally as well as to provide a comparison
of the Company's executive compensation practices to other comparable companies.
Based on the consultant's report, the Committee determined that the Company's
overall level of executive compensation at that time was generally in line with
executive compensation practices at other peer companies. Although the
Compensation Committee did not retain a compensation consultant during 1997, it
is satisfied that the Company's executive compensation practices remained
consistent with those for 1995 and remained in line with the practices of its
competitors.
Legislation enacted in 1993 imposes a $1 million annual limit on the tax
deductibility of compensation paid to certain executive officers. The Company's
1993 Incentive Compensation Plan has been structured such that stock-based
incentives granted under that plan can be excluded from the $1 million limit.
The cash compensation currently paid by the Company to executive officers is
substantially below $1 million and, accordingly, will continue to be deductible
by the Company.
Submitted by the Compensation
Committee
Edward M. Simmons Sr., Chairman
Robert P. Guyton
Paul W. Murrill
Dale E. Redman
8
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee have been officers or
employees of the Company or any of its subsidiaries. No executive officer of the
Company served in the last fiscal year as a director or member of the
compensation committee of another entity, one of whose executive officers served
as a director or on the Compensation Committee of the Company.
PENSION PLAN
The Company maintains a defined benefit pension plan for employees. Annual
benefits payable on normal retirement at age 65 are equal to a participant's
number of years of service multiplied by 1% of the participant's final average
annual compensation, which is defined as the average annual remuneration paid
for the five highest consecutive years of the 10 most recent years preceding
retirement. Remuneration consists of a participant's total earnings during
applicable periods, including bonuses. The Named Executive Officers have the
following credited years of service under the plan: Mr. LaBorde - 15; Mr.
Polito - 33; Mr. Von Gruben - 26; Mr. Johnson - 1; and Mr. Siddle - 22. Benefits
are not subject to deductions for Social Security benefits or other offset
amounts. The following table shows estimated annual benefits payable on
retirement to persons in specified remuneration and years-of-service
classifications:
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
FINAL AVERAGE ---------------------------------------------------------------
ANNUAL COMPENSATION 15 20 25 30 35 40
- ------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000..................... $15,000 $20,000 $ 25,000 $ 30,000 $ 35,000 $ 40,000
125,000..................... 18,750 25,000 31,250 37,500 43,750 50,000
150,000..................... 22,500 30,000 37,500 45,000 52,500 60,000
175,000..................... 26,250 35,000 43,750 52,500 61,250 70,000
200,000..................... 30,000 40,000 50,000 60,000 70,000 80,000
225,000..................... 33,750 45,000 56,250 67,500 78,750 90,000
250,000..................... 37,500 50,000 62,500 75,000 87,500 100,000
300,000..................... 37,500 50,000 62,500 75,000 87,500 100,000
400,000..................... 37,500 50,000 62,500 75,000 87,500 100,000
500,000..................... 37,500 50,000 62,500 75,000 87,500 100,000
</TABLE>
The amount of fiscal 1997 compensation from which benefits would be
calculated is limited to $250,000 for Mr. LaBorde.
EMPLOYMENT, MANAGEMENT CONTINUITY AND RETIREMENT AGREEMENTS
Each of the Named Executive Officers has entered into a management
continuity agreement with the Company that provides benefits to the officer if
the officer's employment is terminated other than because of disability, death,
cause (as defined in the agreement) or by the officer for good reason (as
defined in the agreement) within 36 months following a change of control of the
Company. The benefits include a cash payment equal to one and one-half times the
officer's base salary and bonus (with the exception of Mr. LaBorde for which the
multiplier is two and one-half) and the vesting of all outstanding stock
options, stock appreciation rights or other incentive awards.
9
<PAGE> 12
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly cumulative total
shareholder return ("shareholder return") on the Company's Common Stock against
the shareholder return of the S&P's 500 Stock Index and a Peer Group Composite
Index (structured by the Company as set forth below) for the five year period
commencing June 30, 1992 and ended June 30, 1997.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
PICCADILLY CAFETERIAS, INC., S&P 500 INDEX & PEER GROUP COMPOSITE INDEX**
<TABLE>
<CAPTION>
MEASUREMENT PERIOD PICCADILLY
(FISCAL YEAR COVERED) CAFETERIAS, INC. PEER GROUP S&P 500
<S> <C> <C> <C>
1992 100 100 100
1993 96 98 114
1994 102 72 115
1995 97 62 145
1996 122 56 183
1997 130 44 247
</TABLE>
Assumes $100 invested on June 30, 1992 in the Company's Common Stock. S&P's
500 Stock Index and a Peer Group Composite Index constructed by the Company as
set forth below.
- ---------------
* Total return assumes reinvestment of dividends.
** Fiscal year ending June 30.
In constructing the Peer Group Composite Index ("Peer Index") for use in
the performance graph above, the Company used the shareholder returns of various
publicly held companies (weighted in accordance with each such Company's stock
market capitalization at June 30, 1992 and including reinvestment of dividends)
that compete with the Company in the family dining segment (the group of
companies included in the Peer Index competing with the Company are hereinafter
referred to as the "Peer Group"). Included in the Peer Group are mid-priced
family restaurant companies with large multi-unit operations and similar stock
market capitalization. The Peer Group includes Buffets, Inc., Fresh Choice Inc.,
Furr's/Bishop's Inc., Stacey's Buffet Inc., Lubys Cafeterias, Inc., Morrison
Restaurants Inc., Perkins Family Restaurants, L.P., Ryans Family Steak Houses,
Inc., Shoney's, Inc. and Sizzler International Inc.
10
<PAGE> 13
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to file with the Securities and Exchange Commission
(the "SEC") initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Directors, executive
officers and greater than ten percent shareholders are required by SEC
regulation to furnish the Company the copies of all Section 16(a) reports they
file. To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 1997, all Section
16(a) filing requirements applicable to directors, executive officers and
greater than ten percent beneficial owners were complied with by such persons.
2. OTHER MATTERS
The Board of Directors of the Company knows of no matters to be presented
at the Annual Meeting other than those listed in the accompanying Notice of
Annual Meeting of Shareholders. If other matters, not now known, properly come
before such meeting or any adjournment thereof, the persons named in the
enclosed form of proxy will vote the proxy in accordance with their best
judgment.
IF YOU CANNOT ATTEND THIS MEETING, PLEASE SIGN, DATE AND MAIL PROMPTLY THE
ENCLOSED PROXY.
SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Shareholders may submit proposals for the 1998 Annual Meeting of
Shareholders by sending such proposals to the attention of Mark L. Mestayer,
Corporate Secretary, P.O. Box 2467, Baton Rouge, Louisiana 70821. In order to be
considered for inclusion in the proxy statement for the 1998 Annual Meeting of
Shareholders, such proposals must be received by the Company on or before May
26, 1998. All shareholder proposals must comply with Rule 14a-8 promulgated by
the Securities and Exchange Commission.
THE COMPANY WILL FURNISH WITHOUT CHARGE COPIES OF ITS ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED JUNE 30, 1997 TO INTERESTED SECURITYHOLDERS ON
REQUEST. THE COMPANY WILL FURNISH TO ANY SUCH PERSON ANY EXHIBITS DESCRIBED IN
THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF REASONABLE FEES RELATING TO
THE COMPANY'S FURNISHING SUCH EXHIBITS. REQUESTS FOR COPIES SHOULD BE DIRECTED
TO J. FRED JOHNSON, TREASURER AND CHIEF FINANCIAL OFFICER, P.O. BOX 2467, BATON
ROUGE, LOUISIANA 70821.
11
<PAGE> 14
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------- 1. Election of Directors
PICCADILLY CAFETERIAS, INC. For All With For All
- --------------------------------------------------- Nominees Hold Except
Ralph P. Erben
Ronald A. LaBorde [ ] [ ] [ ]
Paul W. Murrill
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the names(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
RECORD DATE SHARES:
2. In their discretion the Proxies are authorized to vote on such other
business as may properly come before the meeting or any adjournment(s).
This Proxy may be revoked at any time prior to voting thereof.
---- Mark box at right if no address change or comment has been noted on [ ]
Please be sure to sign and date this Proxy. Date the reverse side of this card.
- ----------------------------------------------------
- ----------------------------------------------------
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARD
PICCADILLY CAFETERIAS, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot. There are a number of issues related to
the management and operation of your Company that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will be voted. Then sign the card, detach it and
return your proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, November 3, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Piccadilly Cafeterias, Inc.
</TABLE>
<PAGE> 15
PICCADILLY CAFETERIAS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of the 1997 Annual
Meeting of Shareholders and Proxy Statement and does hereby appoint Paul W.
Murrill and Mark L. Mestayer, and either of them, with full power of
substitution, as proxy or proxies of the undersigned to represent and to vote
all shares of Piccadilly Cafeterias, Inc. Common Stock, which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Shareholders of Piccadilly Cafeterias, Inc., to be held at the general offices
of the Company, 3232 Sherwood Forest Boulevard, Baton Rouge, Louisiana at 10:00
a.m. on November 3, 1997 and at any adjournment(s) thereof.
This Proxy, when properly executed, duly returned and not revoked, will be
voted. It will be voted in accordance with the directions given by the
undersigned shareholder. If no direction is made, it will be voted in favor of
the nominees listed in Proposal 1.
- ------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) hereon, and when signing as
attorney, executor, administrator, trustee or guardian, give your full title as
such. If the signatory is a corporation, sign the full corporate name by a duly
authorized officer.
- -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- --------------------------------- --------------------------------
- --------------------------------- --------------------------------
- --------------------------------- --------------------------------
