DEF14A
<PAGE>
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Ryan's Family Steak House, Inc.
Ryan's Family Steak House, Inc.
PAYMENT OF FILING FEE (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
4) Proposed maximum aggregate value of transaction:
[ ] 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>
RYAN'S FAMILY STEAK HOUSES, INC.
405 LANCASTER AVENUE (29650)
POST OFFICE BOX 100
GREER, SOUTH CAROLINA 29652
March 24, 1995
TO OUR SHAREHOLDERS:
You are cordially invited to attend the Annual Meeting of Shareholders of
Ryan's Family Steak Houses, Inc. to be held on Thursday, April 27, 1995 at 11:00
a.m. at the Greenville/Spartanburg Airport Marriott in Greenville, South
Carolina.
The official Notice of Annual Meeting, Proxy Statement and Form of Proxy
are enclosed with this letter. The Notice of the Annual Meeting and Proxy
Statement describe the formal business to be transacted at the Annual Meeting.
The vote of every shareholder is important, and to ensure proper
representation of your shares at the meeting, please sign, date and return the
enclosed proxy card as soon as possible, even if you currently plan to attend
the Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote will be counted if you are unable to attend.
Sincerely,
(Signature of Janet J. Gleitz appears here)
Janet J. Gleitz
SECRETARY
<PAGE>
RYAN'S FAMILY STEAK HOUSES, INC.
405 LANCASTER AVENUE (29650)
POST OFFICE BOX 100
GREER, SOUTH CAROLINA 29652
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1995
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Ryan's Family Steak Houses, Inc. (the
"Company") will be held at the Greenville/ Spartanburg Airport Marriott,
Greenville, South Carolina, on Thursday, April 27, 1995 at 11:00 a.m. for the
following purposes:
(1) To elect seven (7) Directors to hold office until the next annual
meeting of shareholders or until their successors have been duly
elected and qualified; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on March 1, 1995 as
the record date for the determination of the shareholders entitled to notice of
and to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
(Signature of Janet J. Gleitz appears here)
Janet J. Gleitz
SECRETARY
March 24, 1995
Greer, South Carolina
A FORM OF PROXY IS ENCLOSED. TO ENSURE THAT YOUR SHARES WILL BE VOTED AT
THE ANNUAL MEETING, YOU ARE REQUESTED TO COMPLETE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE-PAID, ADDRESSED ENVELOPE. NO
ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN THE EVENT YOU ATTEND THE MEETING.
<PAGE>
RYAN'S FAMILY STEAK HOUSES, INC.
405 LANCASTER AVENUE (29650)
POST OFFICE BOX 100
GREER, SOUTH CAROLINA 29652
(803) 879-1000
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Ryan's Family Steak Houses,
Inc. (the "Company"), to be voted at the Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held at 11:00 a.m. on Thursday, April 27,
1995 at the Greenville/Spartanburg Airport Marriott, Greenville, South Carolina.
The approximate mailing date of this Proxy Statement is March 24, 1995.
Shareholders of record at the close of business on March 1, 1995 are
entitled to notice of and to vote at the Annual Meeting. As of such date, a
total of 53,432,005 shares of common stock, $1 par value, of the Company
("Common Stock") were outstanding. Holders of Common Stock are entitled to one
vote for each share held of record on March 1, 1995 upon all matters presented
at the Annual Meeting.
A shareholder giving a proxy may revoke it at any time before it is
exercised by written notice dated later than the date of the proxy. A
shareholder may revoke a proxy by: (i) delivery to the Secretary of the Company,
at or before the Annual Meeting, of an instrument revoking the proxy bearing a
date later than the proxy; (ii) delivery to the Secretary of the Company, at or
before the Annual Meeting, of a duly executed proxy bearing a later date; or
(iii) attending the Annual Meeting and giving notice of revocation to the
Secretary of the Company or expressing to the Secretary of the Company, before
his or her shares are voted, a desire to vote his or her shares in person in a
manner contrary to that set forth in his or her previous proxy, if any (although
attendance at the Annual Meeting will not in and of itself constitute a
revocation of a proxy). Any instrument revoking a proxy should be delivered to
the Secretary of the Company at the Annual Meeting or sent prior to the Annual
Meeting to Ryan's Family Steak Houses, Inc., 405 Lancaster Avenue, Greer, South
Carolina 29650 or P.O. Box 100, Greer, South Carolina 29652, Attn: Janet J.
Gleitz.
Unless revoked, such proxy will be voted in accordance with the
specifications thereon. If no contrary instructions are given, all shares
represented by a proxy will be voted FOR the proposal to elect as directors of
the Company the nominees named in this Proxy Statement, and in accordance with
the best judgment of the proxy holders on any other matter that may properly
come before the Annual Meeting. An automated system administered by the
Company's transfer agent tabulates the votes. Abstentions and broker non-votes
are each included in the determination of the number of shares present and
voting. Each is tabulated separately. In connection with the election of
directors, abstentions and broker non-votes are not counted for purposes of
determining the votes cast for directors.
The presence, either in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock at March 1, 1995 is necessary to
constitute a quorum at the Annual Meeting. Directors will be elected by a
plurality of votes cast at the Annual Meeting. Shareholders do not have a right
to cumulate their votes for directors.
ELECTION OF DIRECTORS
(ITEM #1 ON THE PROXY)
The following seven persons are nominees for election at the Annual Meeting
as Directors to serve until the next annual meeting of the Company or until
their successors are duly elected and qualified: Charles D. Way, James D.
Cockman, Brian S. MacKenzie, G. Edwin McCranie, Barry L. Edwards, Harold K.
Roberts, Jr. and James M. Shoemaker, Jr. Unless authority to vote for the
Board's nominees in the election of directors is withheld, it is the intention
of the persons named in the enclosed proxy to nominate and vote for such
nominees.
Management believes that all of the nominees will be available and able to
serve as directors, but in the event any nominee is not available or able to
serve, the Common Stock represented by the proxies will be voted for such
substitute as shall be designated by the Board of Directors.
1
<PAGE>
The following table sets forth the name, age, principal occupation, years
of service as a director, and Common Stock beneficially owned as of March 1,
1995 of or by each nominee for director.
<TABLE>
<CAPTION>
SHARES
THAT
CAN BE
ACQUIRED
OUTSTANDING WITHIN 60 TOTAL OF
SHARES DAYS UPON SHARES
PRINCIPAL DIRECTOR BENEFICIALLY EXERCISE BENEFICIALLY
NAME AGE OCCUPATION SINCE OWNED OF OPTIONS OWNED
<S> <C> <C> <C> <C> <C> <C>
Charles D. Way 42 Chairman of the Board, President 1981 314,081(7) 345,000 659,081(7)
(3,4) and Chief Executive Officer of
the Company
G. Edwin McCranie 46 Executive Vice President of the 1991 1,600 91,000 92,600
(4) Company
Barry L. Edwards 47 Executive Vice President, 1982 38,588(8) 30,000 68,588(8)
(1,2,3,5) Treasurer and Chief Financial
Officer, AMRESCO, Inc.
Harold K. Roberts, Jr. 44 Partner in the firm of Roberts & 1988 11,422(9) 30,000 41,422(9)
(2,3,4) Morgan, CPAs; Chairman and Chief
Executive Officer, Statewide
Title, Inc.
James M. Shoemaker, Jr. 62 Member, Wyche, Burgess, Freeman 1982 39,325(10) 30,000 69,325(10)
(1,2,5) & Parham, P.A.
Brian S. MacKenzie 43 President and Chief Executive 1993 2,000(11) 5,000 7,000(11)
(1,4,5) Officer, Builder Marts of
America, Inc.
James D. Cockman 62 Chairman and Chief Executive 1993 1,000 5,000 6,000
(4) Officer, Ocean Fresh Express
International Seafood
<CAPTION>
PERCENT
OF TOTAL
NAME OUTSTANDING (6)
<S> <C>
Charles D. Way 1.2%
(3,4)
G. Edwin McCranie 0.2%
(4)
Barry L. Edwards 0.1%
(1,2,3,5)
Harold K. Roberts, Jr. 0.1%
(2,3,4)
James M. Shoemaker, Jr. 0.1%
(1,2,5)
Brian S. MacKenzie (12)
(1,4,5)
James D. Cockman (12)
(4)
</TABLE>
(1) Member of the Compensation Committee. The Compensation Committee met once
during fiscal 1994 for the purpose of reviewing and submitting to the Board
recommendations respecting the salary, bonus and other non-stock
compensation to be provided to the Company's executive officers.
(2) Member of the Audit Committee. The Audit Committee met with representatives
of the Company's independent auditors once during fiscal 1994 for the
purpose of reviewing the scope and results of such firm's audit.
(3) Member of the Nominating Committee. The Nominating Committee met once
during fiscal 1994 for the purpose of recommending members of the Board.
The Company's Nominating Committee will consider nominees to the Board
recommended by shareholders of the Company for the 1996 Annual Meeting of
Shareholders. See "Proposals of Shareholders".
(4) Member of the Long Range Planning Committee. The Committee met twice during
fiscal 1994 for the purpose of providing long-term direction for the
Company.
(5) Member of Stock Option Committee. The Stock Option Committee met twice
during fiscal 1994 for the purpose of considering option grants under the
Company's 1991 Stock Option Plan to the Company's executive officers and
key employees.
(6) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), percentages of total outstanding shares have
been computed on the assumption that shares that can be acquired within 60
days upon the exercise of options by a given person or group are
outstanding, but no other such shares similarly subject to acquisition by
other persons are outstanding.
(7) The figure shown includes 29,380 shares owned by Mr. Way's wife and an
aggregate of 6,000 shares owned by Mr. Way's wife as custodian for Mr.
Way's sons. Mr. Way may be deemed to share voting and investment power with
respect to such shares.
(8) The figure shown includes 3,282 shares held in an individual retirement
account for the benefit of Mr. Edwards and his wife and an aggregate of
4,460 shares held by Mr. Edwards' sons, as to which shares Mr. Edwards may
be deemed to share voting and investment power.
(9) The figure shown includes 615 shares held by Statewide Title, Inc., of
which Mr. Roberts is Chairman, Chief Executive Officer, and an owner of 95%
of the outstanding common stock.
2
<PAGE>
(10) The figure shown includes 2,000 shares owned by Mr. Shoemaker's wife and
4,000 shares in a trust, of which Mr. Shoemaker is a co-trustee and
trustee, for the benefit of Mr. Shoemaker's two adult children. Mr.
Shoemaker may be deemed to share voting and investment power with respect
to such shares.
(11) The figure shown includes 500 shares held in trust for the benefit of Mr.
MacKenzie's minor child.
(12) Less than one-tenth of one percent.
The Board met four times during fiscal 1994. All directors attended
personally or by telephone all meetings of the Board and committees on which
they served.
BUSINESS EXPERIENCE OF NOMINEES FOR DIRECTOR
CHARLES D. WAY became the Chairman of the Board of the Company on October
29, 1992. Mr. Way assumed the position of President and Chief Executive Officer
of the Company in October 1989. From June 1988 to October 1989, he served as
President. From May 1986 to June 1988, he served as Executive Vice President,
Treasurer and Secretary. From January 1981 through April 1986, he served as Vice
President-Finance, Treasurer and Secretary. Mr. Way joined the Company in June
1979 as Controller. Mr. Way is also a Director of World Acceptance Corporation.
G. EDWIN MCCRANIE joined the Company in 1986 as Director of Purchasing. He
assumed the position as Executive Vice President of the Company in January 1995.
From November 1991 to December 1994, he served as Executive Vice
President-Purchasing. From January 1989 to October 1991, he served as Vice
President-Purchasing. From 1986 until 1989, he served as Director of Purchasing
of the Company.
BARRY L. EDWARDS has served as Executive Vice President, Treasurer and
Chief Financial Officer of AMRESCO, Inc., an asset management company, since
November 1994. He served as Vice President and Treasurer of The Liberty
Corporation from 1979 to November 1994.
HAROLD K. ROBERTS has been a partner in the firm of Roberts & Morgan,
certified public accountants, since October 1989 and was a partner in the firm
of Hinkle and Roberts, certified public accountants, from 1983 until 1989. Mr.
Roberts has served as Chairman and Chief Executive Officer of Statewide Title,
Inc., a real estate title insurance agency, since 1989. From 1972 to 1982, Mr.
Roberts served as Controller and Assistant Treasurer of Food Lion, Inc.
JAMES M. SHOEMAKER has been a member of Wyche, Burgess, Freeman & Parham,
P.A., the law firm which is general counsel to the Company, since 1965. Mr.
Shoemaker is a director of Palmetto Bancshares, Inc., One Price Clothing Stores,
Inc., and Span-America Medical Systems, Inc.
BRIAN S. MACKENZIE has served as President and Chief Executive Officer of
Builder Marts of America, Inc. ("BMA") since November 1993. From April 1991 to
July 1991, he served as its Chief Operating Officer. From July 1990 to April
1991, Mr. MacKenzie served as President of the Building Materials Retail
Division of BMA. BMA is a wholesale distributor of building materials and
supplies. From January 1990 to June 1990, Mr. MacKenzie served as Senior Vice
President of Franchise Retailing of Coast To Coast Stores, Inc. ("Coast To
Coast"), a hardware distributor, and served as Senior Vice President of
Marketing and Merchandising of Coast To Coast from 1987 through January of 1990.
Coast To Coast was acquired by Amdura, Inc. as a wholly-owned subsidiary in
December 1988. In April 1990, Amdura, Inc., and its subsidiaries, including
Coast To Coast, filed under Chapter 11 of the Federal Bankruptcy Laws. Coast To
Coast was sold to a third party three months after the Chapter 11 filing,
following which Mr. MacKenzie joined BMA.
JAMES D. COCKMAN has served as Chairman and Chief Executive Officer of
Ocean Fresh Express International Seafood, which is engaged in the business of
distributing and processing seafood, since September 1992. From 1989 until 1992,
he served as Chairman of the Sara Lee Food Service division of Sara Lee Corp.,
which engaged in the business of processing and distributing food products, and
from 1985 to 1989, he served as Chairman of the Board and Chief Executive
Officer of PYA Monarch, Inc., also a division of Sara Lee Corp. Mr. Cockman also
serves as a director of Dollar General Stores and Clayton Homes, Inc.
COMPENSATION OF DIRECTORS
During 1994, directors who are not officers of the Company were paid an
annual retainer of $10,000, plus $500 per meeting of the Board, and $250 for
attendance at committee meetings. Pursuant to this arrangement, Messrs. Cockman,
Edwards, Mackenzie, Roberts and Shoemaker were paid $12,500, $13,250, $13,250,
$13,000, and $13,000, respectively, during fiscal 1994. Directors who are also
officers of the Company were paid $100 per board meeting attended in 1994 and
received no payments for committee meetings attended.
3
<PAGE>
In addition, each director who is not an officer of the Company receives
options for 5,000 shares of Common Stock in January of each year. Pursuant to
such arrangement, on each of January 31, 1994 and January 31, 1995, options were
granted with respect to 5,000 shares of Common Stock to each of Messrs. Edwards,
Roberts, MacKenzie, Cockman and Shoemaker. The options granted on January 31,
1994 had an exercise price of $7.68 per share (the per share market value on the
date of grant) and the options granted on January 31, 1995 had an exercise price
of $8.0625 per share (the per share market value on the date of grant). The
options granted on January 31, 1994 became exercisable on July 31, 1994 and
expire January 31, 2004; the options granted on January 31, 1995 become
exercisable on July 31, 1995 and expire on January 31, 2005.
In addition, the Company issued in March 1995 to Mr. Cockman, as a
consulting fee, an aggregate of 1,000 shares of Common Stock for his work in
leading three strategic planning meetings for the Company during 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1994, Messrs. Edwards, MacKenzie and Shoemaker, each a
non-employee director, served on the Company's Compensation Committee of the
Board and on the Stock Option Committee of the Board. Mr. Shoemaker is a member
of the law firm of Wyche, Burgess, Freeman & Parham, P.A., which serves as
general counsel to the Company.
On April 11, 1994, the Company entered into a contract with Restaurant
Development, Inc. ("RDI"), a North Carolina corporation with its principal
office in Salisbury, North Carolina. Under the contract, RDI agreed to provide
to the Company a total comprehensive package of services, including legal
services, related to the acquisition of real estate sites for restaurant
facilities to be constructed and operated by the Company. For their services,
the contract provides that RDI shall be paid 3% of the contract purchase price
of each transaction. Prior to the Company's contract with RDI, similar real
estate services were provided by two different parties. Statewide Title, Inc.
("Statewide Title") provided title and other closing services, and independent
attorneys performed the related legal services. The Company paid RDI
approximately $173,500 during 1994 and Statewide Title approximately $33,700,
$70,200, and $76,400 during 1994, 1993 and 1992, respectively, for services
pursuant to this contract (and its predecessor). The Company estimates that for
1995, RDI will receive approximately $300,000 for their services. Mr. Roberts is
Chairman and Chief Executive Officer of Statewide Title. Mr. Roberts also owns
95% of the outstanding stock of Statewide Title. Statewide Title owns 35% of the
outstanding stock of RDI. The Company believes that the amounts that it has paid
to RDI and Statewide Title and that it proposes to pay to RDI for the services
described above are less than the amounts that it would have to pay to third
parties for similar services.
CERTAIN BENEFICIAL OWNERS OF COMMON STOCK
To the extent known to the Company, other than Trimark Investment
Management Inc. ("TIM"), which owned 4,295,000 shares of Common Stock (8% of the
Company's total outstanding Common Stock), as of February 10, 1995 (according to
information provided by TIM), there is no person or group that beneficially owns
5% or more of the outstanding shares of Common Stock of the Company as of March
1, 1995. According to the Amendment No. 1 to Schedule 13-G filed by TIM, each of
Trimark Fund and Trimark Select Growth Fund (the "Funds") are record owners of a
portion of the 4,295,000 shares of Common Stock. TIM is the manager of the
assets of the Funds and sole trustee of the Funds and, as such, has sole voting
power and sole dispositive power with respect to such shares of Common Stock,
and consequently may be deemed to be the beneficial owner of such shares of
Common Stock. The address of Trimark Investment Management Inc. is One First
Canadian Place, Suite 5600, Toronto, Ontario, Canada, M5X 1E5.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
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 Common Stock, to file with the Securities and Exchange Commission initial
reports of beneficial ownership and reports of changes in beneficial ownership
of Common Stock. Executive officers, directors and greater than ten-percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. To the Company's knowledge, based solely
on review of the copies of such reports furnished to the Company and written
representations that no other reports were required for the fiscal year ended
December 28, 1994, all Section 16(a) filings required of its executive officers
or Directors for fiscal 1994 were made on a timely basis.
4
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the name, age, principal occupation, years
of service as an officer of the Company and Common Stock beneficially owned as
of March 1, 1995 of or by each executive officer of the Company, and all
executive officers and directors as a group.
<TABLE>
<CAPTION>
SHARES
THAT
CAN BE
ACQUIRED
OUTSTANDING WITHIN 60 TOTAL OF
COMPANY SHARES DAYS UPON SHARES
COMPANY OFFICES OFFICER BENEFICIALLY EXERCISE BENEFICIALLY
NAME AGE CURRENTLY HELD SINCE OWNED OF OPTIONS OWNED
<S> <C> <C> <C> <C> <C> <C>
Charles D. Way 42 Chairman of the Board, 1981 314,081(2) 345,000 659,081(2)
President and Chief
Executive Officer
G. Edwin McCranie 46 Executive Vice President 1989 1,600 91,000 92,600
and Director
John C. Jamison 36 Vice President-Real 1988 0 124,000 124,000
Estate
James R. Hart 47 Vice President-Human 1988 0 51,000 51,000
Resources
Fred T. Grant, Jr. 39 Vice President-Finance, 1990 0 50,000 50,000
Treasurer and Assistant
Secretary
Morgan A. Graham 58 Vice 1991 585 50,000 50,585
President-Construction
Alan E. Shaw 36 Vice 1990 167 74,500 74,667
President-Operations
Janet J. Gleitz 52 Secretary 1988 0 18,000 18,000
All executive officers and 408,768 903,500 1,312,268
directors as a group (13
persons)
<CAPTION>
PERCENT
OF TOTAL
NAME OUTSTANDING (1)
<S> <C>
Charles D. Way 1.2%
G. Edwin McCranie .2%
John C. Jamison .2%
James R. Hart .1%
Fred T. Grant, Jr. .1%
Morgan A. Graham .1%
Alan E. Shaw .1%
Janet J. Gleitz (3)
All executive officers and 2.4%
directors as a group (13
persons)
</TABLE>
(1) Pursuant to Rule 13d-3 under the Exchange Act, percentages of total
outstanding shares have been computed on the assumption that shares that can
be acquired within 60 days upon the exercise of options by a given person
are outstanding, but no other such shares similarly subject to acquisition
by other persons are outstanding.
(2) The figure shown includes 29,380 shares owned by Mr. Way's wife and an
aggregate of 6,000 shares owned by Mr. Way's wife as custodian for Mr. Way's
sons. Mr. Way may be deemed to share voting and investment power with
respect to such shares.
(3) Less than .1% of the outstanding shares of stock as of March 1, 1995.
BACKGROUND OF EXECUTIVE OFFICERS
Below is a summary of the background of the Company's executive officers
who are not also directors of the Company.
Mr. John C. Jamison joined the Company in 1980 and served as a manager
trainee and store manager until February 1983. Since that time he served as
Assistant Director of Development and Director of Development until January 1988
when he assumed the position of Vice President-Development. In May 1991 he
assumed his present position as Vice President-Real Estate.
Mr. James R. Hart joined the Company in 1979 and served as a store manager
until September 1983. Since that time he served as Director of Human Resources
until April 1988 when he became Vice President-Human Resources.
Mr. Fred T. Grant, Jr. joined the Company in January 1990 as Director of
Finance. He served in that position until April 1990 when he became Vice
President-Finance. In January 1994, Mr. Grant was named Vice President-Finance,
Treasurer and Assistant Secretary. Prior to joining the Company, Mr. Grant was a
Senior Manager with the Greenville, South Carolina office of KPMG Peat Marwick,
an international accounting and consulting firm, since 1985.
Mr. Morgan A. Graham has been Vice President-Construction since November
1991. After joining the Company in July 1987 as a Construction Superintendent,
he served in several construction-related positions, including Project Manager,
Architectural Coordinator, Procurement Manager and Director of Construction,
until assuming his present position.
Mr. Alan E. Shaw joined the Company in 1979 and served as a store manager
until being promoted to Supervisor in 1982. From 1984 through 1989, he served as
Assistant Director of Operations and Regional Director of Operations prior to
5
<PAGE>
his promotion to Regional Vice President-Operations in January 1990. In November
1991, Mr. Shaw assumed his present position as Vice President-Operations.
Ms. Janet J. Gleitz joined the Company in 1981 and served as Corporate
Relations Administrator until June 1988 when she assumed her present position of
Secretary.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years 1994, 1993 and 1992, the
cash compensation paid by the Company and its subsidiaries, as well as certain
other compensation paid or accrued for those years, to the five executive
officers of the Company whose salary and bonus in fiscal 1994 exceeded $100,000
(collectively the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
FISCAL SALARY UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) BONUS ($) OPTIONS COMPENSATION ($)(1)
<S> <C> <C> <C> <C> <C>
Charles D. Way, 1994 $204,558 $30,600 60,000 $61,246
Chairman of the Board, 1993 $184,474 0 30,000 $57,768
President and Chief Executive 1992 $162,895 0 0 $26,117
Officer
Alan E. Shaw, Vice 1994 $101,150 $42,300 20,000 $32,771
President-Operations 1993 $ 90,172 $25,313 10,000 $31,448
1992 $ 81,383 $38,437 0 $ 6,567
G. Edwin McCranie, Executive Vice 1994 $106,024 $10,500 20,000 $34,175
President 1993 $ 97,257 0 10,000 $33,992
1992 $ 89,593 0 0 $ 3,360
John C. Jamison, Vice 1994 $104,197 $13,936 20,000 $25,948
President-Real Estate 1993 $ 98,502 0 10,000 $24,509
1992 $ 95,552 0 0 $ 5,707
Fred T. Grant, Jr. 1994 $104,198 $13,936 20,000 $31,035
Vice President-Finance, 1993 $ 94,196 0 10,000 $29,876
Treasurer and Assistant 1992 $ 85,498 0 0 $ 6,178
Secretary
</TABLE>
(1) "All Other Compensation" for 1994 includes the following: (i) contributions
of $2,250, $2,012, $1,542, $1,519, and $1,527 to the Company's 401(k) Plan
(the "Plan") on behalf of Mr. Way, Mr. Shaw, Mr. McCranie, Mr. Jamison, and
Mr. Grant, respectively, to match 1994 pre-tax elective deferral
contributions (included under Salary and Bonus) made by each to such Plan;
(ii) premium payments of $6,300 on behalf of each of Mr. Way, Mr. Shaw, Mr.
Jamison and Mr. Grant and $2,700 for Mr. McCranie for a policy of health
insurance providing a level of coverage not otherwise available under the
Company's standard health plan; (iii) premium payments of $72 on behalf of
Messrs. Way, Shaw, McCranie, Jamison, and Grant for an additional $50,000 in
life insurance above the coverage available to salaried employees generally;
(iv) a premium payment of $2,428 for disability insurance coverage for Mr.
Way; (v) an accrual of $22,457 pursuant to the Deferred Compensation-Salary
Continuation Agreement between the Company and Mr. Way; and (vi) the
Company's estimate of the imputed benefit to Messrs. Way, Shaw, McCranie,
Jamison, and Grant of $27,739, $24,387, $29,861, $18,057, and $23,136,
respectively, of split-dollar life insurance coverage (including the value
of the term insurance portion) purchased by the Company on each officer's
life in the policy amounts of $1,005,000, $910,000, $1,101,000, $675,000,
and $840,000, respectively. Under the Company's insurance plan, the Company
pays premiums on such policies on the life of participating executive
officers for a period of ten years. The Company owns the policy for the
first five years of the policy. After the fifth year, the Company transfers
ownership of the policy to the participating executive. The Company is
repaid the aggregate amount of the premiums, without interest, at the
earlier of the executive's dying, reaching age 60 or the termination of the
policy.
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<PAGE>
SUMMARY OF OPTION GRANTS AND HOLDINGS
The following table illustrates the value of the stock options granted to
the Named Executive Officers during fiscal 1994:
OPTION GRANTS IN 1994 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES
UNDERLYING IN 1994 EXERCISE
OPTIONS FISCAL PRICE EXPIRATION GRANT DATE
NAME GRANTED (#) YEAR ($/SH) DATE PRESENT VALUE (1)
<S> <C> <C> <C> <C> <C>
Charles D. Way 30,000 2.9% 7.625 01/27/04 (2) $ 107,444
30,000 2.9% 6.1875 10/27/04 (3) $ 97,008
Alan E. Shaw 10,000 .95% 7.625 01/27/04 (2) $ 35,815
10,000 .95% 6.1875 10/27/04 (3) $ 32,336
G. Edwin McCranie 10,000 .95% 7.625 01/27/04 (2) $ 35,815
10,000 .95% 6.1875 10/27/04 (3) $ 32,336
John C. Jamison 10,000 .95% 7.625 01/27/04 (2) $ 35,815
10,000 .95% 6.1875 10/27/04 (3) $ 32,336
Fred T. Grant, Jr. 10,000 .95% 7.625 01/27/04 (2) $ 35,815
10,000 .95% 6.1875 10/27/04 (3) $ 32,336
</TABLE>
(1) In accordance with Securities and Exchange Commission rules, the dollar
amounts under this column are the result of calculations using the
Black-Scholes based option valuation model. The Company's use of this model
should not be construed as an endorsement of its accuracy at valuing
options. All stock option models require a prediction about the future
movement of stock price. The valuation assumes an expected volatility of
.3127, a 0% dividend yield, a 7 1/2-year holding term prior to exercise, a
risk free rate of return of 5 1/2% for the options expiring January 27,
2004, and a risk free rate of return of 7.7% for the options expiring
October 27, 2004, reflecting the yield on a zero coupon U.S. Treasury
security for the holding term prior to exercise of the option. No
adjustments have been made for non-transferability or risk of forfeiture.
The actual value of the options, if any, will depend on the extent to which
the market value of the Common Stock exceeds the exercise price of the
option on the date of exercise.
(2) These options became exercisable in full on July 26, 1994.
(3) These options become exercisable in full on April 25, 1995.
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<PAGE>
The following table sets forth information with respect to the Named
Executive Officers concerning the unexercised options held as of the end of the
fiscal year and the value of such options. No Named Executive Officer exercised
any options during 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT 1994 OPTIONS
SHARES FISCAL YEAR-END AT 1994 FISCAL
ACQUIRED ON (#) YEAR-END $ (1)
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Charles D. Way 0 n/a 315,000/30,000 $210,938/26,250
Alan E. Shaw 0 n/a 64,500/10,000 $ 23,906/8,750
G. Edwin McCranie 0 n/a 81,000/10,000 $ 64,125/8,750
John C. Jamison 0 n/a 114,000/10,000 $ 87,281/8,750
Fred T. Grant, Jr. 0 n/a 40,000/10,000 $ 9,375/8,750
</TABLE>
(1) The value of unexercised in-the-money options was calculated for each
officer as follows: market price of the Common Stock as of December 28, 1994
times the number of shares covered by such in-the-money options held by such
officer minus the product of the exercise price with respect to such options
and the number of shares covered by such options.
DEFERRED COMPENSATION-SALARY CONTINUATION AGREEMENTS
In April 1987, the Board of Directors approved a Deferred
Compensation-Salary Continuation Agreement between the Company and Mr. Charles
Way. The agreement with Mr. Way provides for cash payments of $60,000 per year
for each of the 10 years following Mr. Way's retirement, death or total
disability, with retirement age set at 55, such benefits to vest 10% per annum
commencing in 1987. The total deferred compensation liability as of December 28,
1994 relating to this agreement was $107,890. An aggregate of $22,457 of
deferred compensation was accrued under this agreement for the benefit of Mr.
Way during fiscal 1994. The Company is the owner and beneficiary of a life
insurance policy on the life of Mr. Way. On the basis of reasonable assumptions
as to mortality, dividends and other factors, it is expected that the cost of
benefits under this arrangement will be recovered through a combination of
general corporate funds and the cash surrender value of the insurance policy.
REPORT OF THE COMPENSATION COMMITTEE
AND STOCK OPTION COMMITTEE
The Compensation Committee (the "Compensation Committee") of the Board of
Directors periodically submits to the Board recommendations respecting the
salary, bonus and other non-stock compensation to be provided to the Company's
executive officers. The Stock Option Committee (the "Stock Option Committee") of
the Board grants options for the Company's Common Stock to the Company's
executive officers and employees. The Compensation Committee and the Stock
Option Committee are referred to collectively as the "Committees". The
Committees provide the following joint report.
EXECUTIVE OFFICER COMPENSATION
The Committees attempt to act on the shareholders' behalf in establishing
executive compensation programs, for the Company's shareholders ultimately bear
the cost of these programs. The Company's executive compensation policies and
specific executive compensation programs are adopted and administered in
accordance with that belief. The Committees annually review the Company's
corporate performance and that of its executive officers to determine
appropriate compensation. The Committees seek to achieve a balance between the
Company's need to attract and retain qualified and motivated executives, on the
one hand, and the maximization of the Company's operating performance, on the
other.
The Committees' executive compensation philosophy is to set compensation
levels in its discretion to provide for compensation opportunities that reflect
Company and individual performances. The Company's current executive
compensation structure consists of base salary and stock options, with an
incentive cash bonus arrangement.
8
<PAGE>
Over the years, the Compensation Committee has attempted to set executive
officer cash compensation amounts at levels somewhat lower than levels that the
committee believes prevail within the restaurant industry, and has complemented
these cash amounts with significant stock option grants.
In the case of all executive officers except Mr. Way, the Compensation
Committee adjusted their salaries in 1994 based upon the recommendations of Mr.
Way. Factors considered by Mr. Way were generally subjective, such as his
perception of individual performance and the level of individual responsibility.
Mr. Way recommended increases in the base salaries of executive officers ranging
from 5% to 10%. The Compensation Committee determined that these increases were
appropriate to compensate executive officers for the increased level of
responsibility associated with the increase in the Company's size.
The stock option grants are generally made on an annual basis at the then
stock market price and have the purpose of providing the Company's executive
officers and key employees with an equity ownership opportunity in the Company
and with incentives to maximize shareholder values. During 1994, the Stock
Option Committee made two option grants to each executive officer: one with
respect to 1994 and one with respect to 1995. In determining the size of any
stock option grant, the Stock Option Committee considers the following
qualitative factors: the Committee's perception of the Company's overall
performance, the individual's performance, the potential effect which the
individual's future performance may have on the Company and the number of
options previously granted to the individual. Each of these factors was given
approximately equal weight.
During 1994, Alan Shaw, Vice President-Operations, was paid quarterly
bonuses based on three factors: (1) same-store sales comparisons; (2) profits
compared to the immediately preceding year; and (3) customer service as reported
through a "hidden shopper" program and various other subjective considerations,
including management turnover, team work and creativity. Each of these factors
was weighted equally. The Compensation Committee considered each of these
factors and awarded bonuses to Mr. Shaw as noted in the Summary Compensation
Table.
During 1994, the Compensation Committee adopted an Executive Bonus Plan to
provide additional incentives to its other executive officers, effective for the
1994 fiscal year. The bonus plan covers seven of the Company's eight executive
officers. Alan Shaw already participates in the plan described above. Pursuant
to the plan, each year the Compensation Committee establishes a percentage of
each participating executive's annual base salary, ranging from 10%-30%, as a
target bonus amount. The executive is eligible to receive this bonus amount, or
a portion thereof, if the executive meets objectives set by the Compensation
Committee. In the case of all executive officers other than Charles Way and
Edwin McCranie, the receipt of the target bonus was based upon the achievement
of Company objectives in: (i) increase in average unit sales; (ii) increase in
net earnings; and (iii) subjective departmental and personal objectives. Each of
these factors was weighted equally. In the case of Messrs. Way and McCranie, the
receipt of their entire target bonus was based upon the achievement of Company
objectives in: (i) increase in average unit sales; and (ii) increase in net
earnings. Each of these factors was weighted equally. At the end of 1994, the
Compensation Committee considered each of these objectives and awarded bonuses
as noted in the Summary Compensation Table in accordance with the bonus plan.
Commencing in 1994, the Omnibus Budget Reconciliation Act of 1993 denies
publicly traded companies the ability to deduct for federal income tax purposes
certain compensation paid (including gains on exercised stock option grants) to
top executive officers in excess of $1 million per person. The Compensation
Committee and Stock Option Committee intend to administer the Company's
executive compensation programs in such a way that compensation to executive
officers will be fully deductible under the Internal Revenue Code, including
submitting plans for shareholder approval where necessary and determining
compensation on an objective basis where necessary.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Way joined the Company in 1979, has served as its President and Chief
Executive Officer since 1989, and became Chairman of the Board in 1992. In
setting Mr. Way's compensation, the Compensation and Stock Option Committees
tend to set a relatively low base salary for an individual with Mr. Way's
responsibilities and emphasize option grants as a component of his overall
compensation package. The Committees believe that this approach to Mr. Way's
compensation has resulted in an appropriate alignment of his long-term rewards
from the Company with the interests of shareholders.
During 1994, the Compensation Committee adjusted Mr. Way's base salary
upward by approximately 10.9%. In making this adjustment, the Compensation
Committee considered subjective factors including the perception of the
committee as to Mr. Way's overall performance and objective factors such as the
increase in the Company's earnings per share, operating margins, and return on
equity. Each of these factors was given approximately equal weight. In addition,
Mr. Way received a
9
<PAGE>
bonus of $30,600 pursuant to the bonus plan described above because of the
Company's attainment of its average unit sales objectives. The Company's per
share earnings increased 7.5% from 1993 to 1994.
In addition, during 1994, the Stock Option Committee granted Mr. Way
options with respect to an aggregate of 60,000 shares of Common Stock. These
grants consisted of options with respect to an aggregate of 30,000 shares of
Common Stock granted for 1994 and options with respect to an aggregate of 30,000
shares of Common Stock granted for 1995. In determining the size of each of
these grants, the committee considered the following qualitative factors: the
committee's perception of the Company's overall performance, Mr. Way's
performance, the potential effect of his future performance on the Company and
the number of options previously granted to him. Each of these factors was given
approximately equal weight. At fiscal 1994 year-end, the value of Mr. Way's
outstanding exercisable in-the-money stock options was $210,938 as compared to
$558,750 at the end of 1993, a decrease of 62.2%. The Stock Option Committee
believes that the stock options provide Mr. Way with appropriate incentives to
promote long-term shareholder value.
<TABLE>
<S> <C>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
James M. Shoemaker, Jr., Chairman James M. Shoemaker, Jr., Chairman
Barry L. Edwards Barry L. Edwards
Brian S. MacKenzie Brian S. MacKenzie
</TABLE>
PERFORMANCE GRAPH
A line graph comparing the cumulative, total shareholder return on the
Common Stock of the Company for the last five fiscal years with the cumulative
total returns of the NASDAQ Market Index and a peer group consisting of all
publicly traded companies whose SIC code is 5812, the code for eating places,
over the same period (assuming a $100 initial investment) is presented below.
The Company will promptly furnish without charge to any shareholder of record on
March 1, 1995, the identity of the companies included in the peer group.
Requests should be directed to the Company, Post Office Box 100, Greer, South
Carolina 29652; attn: Shareholder Relations.
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURNS
AMONG RYAN'S FAMILY STEAK HOUSES, INC.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
FOR THE FIVE-YEAR PERIOD ENDING DECEMBER 28, 1994
(Plot points appear below for chart:
1989 1990 1991 1992 1993 1994
Ryans Family Steaks 100 70 115 140 110 90
NASDAQ Market Index 100 85 105 108 127 132
SIC Code Index 100 90 120 158 180 160
ASSUMES $100 INVESTED ON JAN. 3, 1990
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 28, 1994)
10
<PAGE>
AUDITORS
KPMG Peat Marwick LLP, independent certified public accountants, has been
appointed as auditors for the Company for the current fiscal year and to examine
and report to shareholders upon the financial statements as of and for the year
ending January 3, 1996. Representatives of KPMG Peat Marwick LLP will be present
at the Annual Meeting, and such representatives will have the opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions which the shareholders may have. KPMG Peat Marwick LLP has
acted for the Company in this capacity since 1981, and neither the firm nor any
of its members has any relation with the Company except in the firm's capacity
as auditors and tax advisors.
SOLICITATION OF PROXIES
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by mail, proxies may be solicited by officers
and other regular employees of the Company by telephone, telegram or personal
interview for no additional compensation. The Company has engaged W. F. Doring &
Company to solicit proxies and distribute materials to brokerage houses, banks,
custodians, nominees and fiduciaries for an estimated fee of approximately
$10,000. Arrangements will be made with brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation material to beneficial owners
of the stock held of record by such persons, and the Company will reimburse such
persons for reasonable out-of-pocket expenses incurred by them in so doing.
PROPOSALS OF SHAREHOLDERS
Any shareholder who wishes to present a proposal at the 1996 Annual Meeting
of Shareholders of the Company and have such proposal included in the proxy
statement and form of proxy relating to that meeting must cause such proposal to
be received by the Company not later than November 15, 1995. Shareholders
desiring to make a recommendation to the Nominating Committee of the Board of
Directors should submit the name(s) and business background of the proposed
nominee(s) for the Board no later than November 15, 1995. Such proposal should
be sent to the Company, attention Janet J. Gleitz, Post Office Box 100, Greer,
South Carolina 29652. The proposal must comply with the rules of the Securities
and Exchange Commission relating to shareholder proposals.
FINANCIAL INFORMATION
THE COMPANY'S 1994 ANNUAL REPORT IS ENCLOSED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF RECORD AS OF MARCH 1, 1995, WHO SO
REQUESTS IN WRITING, A COPY OF SUCH FISCAL 1994 ANNUAL REPORT OR THE COMPANY'S
1994 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS) FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. ANY SUCH REQUEST SHOULD BE DIRECTED TO RYAN'S FAMILY STEAK
HOUSES, INC., 405 LANCASTER AVENUE, GREER, SOUTH CAROLINA 29650, OR POST OFFICE
BOX 100, GREER, SOUTH CAROLINA 29652, ATTENTION: JANET J. GLEITZ.
OTHER BUSINESS
As of the date of this Proxy Statement, management was not aware that any
business not described above would be presented for consideration at the
meeting. If any other business properly comes before the meeting, it is intended
that the shares represented by proxies will be voted with respect thereto in
accordance with the judgment of the person voting them.
By Order of the Board of Directors,
(Signature of Janet J. Gleitz appears here)
Janet J. Gleitz
SECRETARY
Greer, South Carolina
March 24, 1995
11
