<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
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
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 29, 1996
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 25, 1996 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. 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,
/s/ Janet J. Gleitz
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 25, 1996
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 25, 1996 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 6, 1996 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,
/s/ Janet J. Gleitz
Janet J. Gleitz
SECRETARY
March 29, 1996
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 PRECLUDE 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
(864) 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 25,
1996 at the Greenville/Spartanburg Airport Marriott, Greenville, South Carolina.
The approximate mailing date of this Proxy Statement is March 29, 1996.
Shareholders of record at the close of business on March 6, 1996 are
entitled to notice of and to vote at the Annual Meeting. As of such date, a
total of 53,462,830 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 6, 1996 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 delivered 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 6, 1996 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 6,
1996 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 43 Chairman of the Board, President 1981 234,581(7) 375,000 609,581(7)
(1,2) and Chief Executive Officer of
the Company
G. Edwin McCranie 47 Executive Vice President of the 1991 1,600 101,000 102,600
(2) Company
Barry L. Edwards 48 Executive Vice President, 1982 38,478(8) 35,000 73,478(8)
(3,4,5) Treasurer and Chief Financial
Officer, AMRESCO, Inc.
Harold K. Roberts, Jr. 45 Partner in the firm of Roberts 1988 11,422(9) 35,000 46,422(9)
(1,2,4) and Morgan, CPAs; Chairman and
Chief Executive Officer,
Statewide Title, Inc.
James M. Shoemaker, Jr. 63 Member, Wyche, Burgess, Freeman 1982 37,725(10) 35,000 72,725(10)
(3,4,5) & Parham, P.A.
Brian S. MacKenzie 44 President and Chief Executive 1993 2,000(11) 10,000 12,000(11)
(2,3,5) Officer, Builder Marts of
America, Inc.
James D. Cockman 63 Chairman and Chief Executive 1993 2,000 10,000 12,000
(1,2) Officer, Ocean Fresh Express
International Seafood
<CAPTION>
PERCENT
OF TOTAL
NAME OUTSTANDING (6)
<S> <C>
Charles D. Way 1.1%
(1,2)
G. Edwin McCranie .2%
(2)
Barry L. Edwards .1%
(3,4,5)
Harold K. Roberts, Jr. (12)
(1,2,4)
James M. Shoemaker, Jr. .1%
(3,4,5)
Brian S. MacKenzie (12)
(2,3,5)
James D. Cockman (12)
(1,2)
</TABLE>
(1) Member of the Nominating Committee. The Nominating Committee met once
during fiscal 1995 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 1997 Annual Meeting of
Shareholders. See "Proposals of Shareholders".
(2) Member of the Long Range Planning Committee. The Committee met once during
fiscal 1995 for the purpose of providing long-term direction for the
Company.
(3) Member of the Compensation Committee. The Compensation Committee met once
during fiscal 1995 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.
(4) Member of the Audit Committee. The Audit Committee met with representatives
of the Company's independent auditors once during fiscal 1995 for the
purpose of reviewing the scope and results of such firm's audit.
(5) Member of Stock Option Committee. The Stock Option Committee met once
during fiscal 1995 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. Mr. Way
may be deemed to share voting and investment power with respect to such
shares.
(8) The figure shown includes 3,287 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.
(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, for the
benefit of two of Mr. Shoemaker's adult children. Mr. Shoemaker may be
2
<PAGE>
deemed to share voting and investment power with respect to such shares.
The trust filed a late Form 3 with respect to its ownership of shares;
however, all transactions with respect to the trust's shares have been
timely reported.
(11) The figure shown includes 500 shares held in trust for the benefit of Mr.
MacKenzie's minor child.
(12) Less than .1%.
The Board met four times during fiscal 1995. 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
and Moovies, Inc.
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 January 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, JR. has been a partner in the firm of Roberts and
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. In addition, 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, JR. 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
processing and distributing 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 1995, directors who are not officers of the Company were paid an
annual retainer of $10,000, plus $1,500 per meeting of the Board, and $250 for
each committee meeting attended. Pursuant to this arrangement, Messrs. Cockman,
Edwards, MacKenzie, Roberts and Shoemaker were paid $15,250, $16,000, $15,750,
$14,750, and $15,750, respectively, during fiscal 1995. Directors who are also
officers of the Company were paid $100 per board meeting attended in 1995 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, 1995 and January 31, 1996, 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,
1995 had an exercise price of $8.0625 per share (the per share market value on
the date of grant), and the options granted on January 31, 1996 had an exercise
price of $6.875 per share (the per share market value on the date of grant). The
options granted on January 31, 1995 became exercisable on July 31, 1995 and
expire January 31, 2005; the options granted on January 31, 1996 become
exercisable on July 31, 1996 and expire on January 31, 2006.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, 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 provided that RDI 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") provided title and other closing services, and independent
attorneys performed the related legal services. The Company paid RDI
approximately $142,400 and $173,500 during 1995 and 1994, respectively, and paid
Statewide approximately $36,800, $33,700, and $70,200 during 1995, 1994 and
1993, respectively, for services pursuant to this contract (and its
predecessor). RDI was dissolved during 1995, and the Company intends to use
Statewide in 1996 to perform services similar to those provided prior to the RDI
arrangement. On May 10, 1995, the Company entered into a contract with Statewide
for such services pursuant to which Statewide will receive 1% of the contract
purchase price of each transaction with respect to title and other closing
services. Attorney fees will be paid separately. The Company estimates that for
1996, Statewide will receive approximately $130,000 for its services. Of this
amount, the Company believes that approximately $75,000 will represent amounts
that Statewide will pay to third parties for title insurance and other fees on
behalf of the Company. Mr. Roberts, a director of the Company, is Chairman and
Chief Executive Officer of Statewide. Mr. Roberts also owns 95% of the
outstanding stock of Statewide. Statewide owned 35% of the outstanding stock of
RDI prior to its dissolution. The Company believes that the amounts that it has
paid to RDI and Statewide and that it proposes to pay to Statewide 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 Financial
Corporation ("TFC"), which owned 4,737,300 shares of Common Stock (8.9% of the
Company's total outstanding Common Stock) as of February 12, 1996, 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 6, 1996. According to the Amendment No.
2 to Schedule 13-G filed by TFC with the Securities and Exchange Commission
("SEC") on February 12, 1996, each of Trimark Fund and Trimark Select Growth
Fund (the "Funds") are record owners of a portion of the 4,737,300 shares of
Common Stock. Trimark Investment Management Inc. ("TIMI") 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.
TFC owns 100% of the voting equity securities of TIMI, and consequently may be
deemed to be the beneficial owner of such shares of Common Stock. The address of
Trimark Financial Corporation is One First Canadian Place, Suite 5600, Toronto,
Ontario, Canada, M5X 1E5.
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 6, 1996 of or by each executive officer of the Company, and all
executive officers and directors as a group.
4
<PAGE>
<TABLE>
<CAPTION>
SHARES
THAT
CAN BE
ACQUIRED
OUTSTANDING WITHIN 60
COMPANY SHARES DAYS UPON
COMPANY OFFICES OFFICER BENEFICIALLY EXERCISE
NAME AGE CURRENTLY HELD SINCE OWNED OF OPTIONS
<S> <C> <C> <C> <C> <C>
Charles D. Way 43 Chairman of the Board, 1981 234,581(2) 375,000
President and Chief Executive
Officer
G. Edwin McCranie 47 Executive Vice President 1989 1,600 101,000
and Director
John C. Jamison 37 Vice President-Real Estate 1988 1,500 132,500
James R. Hart 48 Vice President-Human Resources 1988 250 61,000
Fred T. Grant, Jr. 40 Vice President-Finance, 1990 200 60,000
Treasurer and Assistant
Secretary
Morgan A. Graham 59 Vice President-Construction 1991 585 60,000
Alan E. Shaw 37 Vice President-Operations 1990 167 84,500
Ilene T. Turbow 45 Vice President-Marketing 1995 0 14,000
Janet J. Gleitz 53 Secretary 1988 1,000 21,500
All executive officers and 331,508 1,034,500
directors as a group (14
persons)
<CAPTION>
TOTAL OF
SHARES PERCENT
BENEFICIALLY OF TOTAL
NAME OWNED OUTSTANDING (1)
<S> <C> <C>
Charles D. Way 609,581(2) 1.1%
G. Edwin McCranie 102,600 .2%
John C. Jamison 134,000 .3%
James R. Hart 61,250 .1%
Fred T. Grant, Jr. 60,200 .1%
Morgan A. Graham 60,585 .1%
Alan E. Shaw 84,667 .2%
Ilene T. Turbow 14,000 (3)
Janet J. Gleitz 22,500 (3)
All executive officers and 1,366,008 2.5%
directors as a group (14
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. 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 6, 1996.
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.
JOHN C. JAMISON joined the Company in 1980 and served as a 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.
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.
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.
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.
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
his promotion to Regional Vice President-Operations in January 1990. In November
1991, Mr. Shaw assumed his present position as Vice President-Operations.
ILENE T. TURBOW joined the Company in April 1993 as Director of Marketing.
She served in that position until August 1995, when she became Vice
President-Marketing. Prior to joining the Company, Ms. Turbow was General
Manager with Kaminsky's from 1992 to 1993, where she was responsible for store
operations of a prototype restaurant concept. From 1985 to 1992, she was Vice
President with Dawson Foodservice, Inc., a senior-level management position at a
foodservice marketing firm.
5
<PAGE>
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 1995, 1994 and 1993 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 1995 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, 1995 225,561 78,975 30,000 65,482
Chairman of the Board, 1994 204,558 30,600 60,000 61,246
President and Chief Executive 1993 184,474 0 30,000 57,768
Officer
Alan E. Shaw, Vice 1995 112,161 47,700 10,000 33,831
President-Operations 1994 101,150 42,300 20,000 32,771
1993 90,172 25,313 10,000 31,448
G. Edwin McCranie, Executive Vice 1995 116,027 26,910 10,000 36,628
President 1994 106,024 10,500 20,000 34,175
1993 97,257 0 10,000 33,992
John C. Jamison, Vice 1995 110,200 29,480 10,000 27,197
President-Real Estate 1994 104,197 13,936 20,000 25,948
1993 98,502 0 10,000 24,509
Fred T. Grant, Jr., 1995 115,194 30,820 10,000 32,148
Vice President-Finance, 1994 104,198 13,936 20,000 31,035
Treasurer and Assistant 1993 94,196 0 10,000 29,876
Secretary
</TABLE>
(1) "All Other Compensation" for 1995 includes the following: (i) contributions
of $2,250, $2,285, $1,894, $1,866, and $1,939 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 1995 pre-tax elective deferral
contributions (included under Salary and Bonus) made by each to such Plan;
(ii) premium payments of $7,500 on behalf of each of Mr. Way, Mr. Shaw, Mr.
Jamison and Mr. Grant and $6,100 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 $117 on behalf of
each 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 $26,230 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 $26,957, $23,929, $28,517, $17,714 and
$22,592, 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 $840,000, respectively. Under the Company's insurance plan,
the Company pays premiums on such policies on the life of participating
executive officers for a period of ten years. The Company owns the policy
for the first five years of the policy. After the fifth year, the Company
transfers ownership of the policy to the participating executive. The
Company is repaid the aggregate amount of the premiums, without interest, at
the earlier of the executive's dying or reaching age 60, or the termination
of the policy.
6
<PAGE>
SUMMARY OF OPTION GRANTS AND HOLDINGS
The following table illustrates the value of the stock options granted to
the Named Executive Officers during fiscal 1995:
OPTION GRANTS IN 1995 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES
UNDERLYING IN 1995 EXERCISE
OPTIONS FISCAL PRICE EXPIRATION GRANT DATE
NAME GRANTED (#) YEAR ($/SH) DATE PRESENT VALUE (1)
<S> <C> <C> <C> <C> <C>
Charles D. Way 30,000 5.1% 7.50 10/17/05 (2) $ 107,400
Alan E. Shaw 10,000 1.7% 7.50 10/17/05 (2) $ 35,800
G. Edwin McCranie 10,000 1.7% 7.50 10/17/05 (2) $ 35,800
John C. Jamison 10,000 1.7% 7.50 10/17/05 (2) $ 35,800
Fred T. Grant, Jr. 10,000 1.7% 7.50 10/17/05 (2) $ 35,800
</TABLE>
(1) In accordance with SEC 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 .307, a 0% dividend yield, a 7 1/2-year holding
term prior to exercise, and a risk free rate of return of 5.97% for the
options expiring October 17, 2005, 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 become exercisable in full on April 17, 1996. In addition, the
stock option plan and/or stock option agreements set forth certain earlier
expiration dates.
The following table sets forth information with respect to the Named
Executive Officers concerning option exercises, the unexercised options held as
of the end of the fiscal year and the value of such options.
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 1995 OPTIONS
SHARES FISCAL YEAR- END AT 1995 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 345,000/30,000 307,500/0
Alan E. Shaw 0 n/a 74,500/10,000 45,000/0
G. Edwin McCranie 0 n/a 91,000/10,000 90,375/0
John C. Jamison 0(2) n/a(2) 124,000/10,000(2) 121,500/0(2)
Fred T. Grant, Jr. 0 n/a 50,000/10,000 24,375/0
</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 January 3, 1996
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.
(2) Mr. Jamison exercised 1,500 options in January 1996. In accordance with SEC
rules, this exercise will be reported in tabular format in the Company's
proxy statement for the 1997 Annual Meeting.
7
<PAGE>
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 January 3,
1996 relating to this agreement was $134,120. An aggregate of $26,230 of
deferred compensation was accrued under this agreement for the benefit of Mr.
Way during fiscal 1995. 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 with respect to shares of 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.
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 1995 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 1995, the Stock
Option Committee made one option grant to each executive officer. 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 1995, Alan Shaw, Vice President-Operations, was paid quarterly
bonuses based on four factors: (1) same-store sales comparisons; (2) pre-tax
earnings compared to the immediately preceding year; (3) customer service as
reported through a "hidden shopper" program; and (4) various other subjective
considerations, including management turnover, team work and creativity. Factors
(1) and (2) were given a combined weight of approximately 60%. The Compensation
Committee considered each of these factors and awarded bonuses to Mr. Shaw as
noted in the Summary Compensation Table.
8
<PAGE>
During 1995, the Compensation Committee continued an Executive Bonus Plan
to provide additional incentives to its other executive officers, effective for
the 1995 fiscal year. The bonus plan covers eight of the Company's nine
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 1995, the Compensation Committee considered each of these objectives
and awarded bonuses as noted in the Summary Compensation Table in accordance
with the bonus plan.
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 1995, the Compensation Committee adjusted Mr. Way's base salary
upward by approximately 10.3%. 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 bonus of $78,975 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 8.8% from 1994 to 1995.
In addition, during 1995, the Stock Option Committee granted Mr. Way
options with respect to an aggregate of 30,000 shares of Common Stock. 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 1995
year-end, the value of Mr. Way's outstanding exercisable in-the-money stock
options was $307,500 as compared to $210,938 at the end of 1994, an increase of
45.8%. 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 Brian S. MacKenzie, Chairman
Barry L. Edwards Barry L. Edwards
Brian S. MacKenzie James M. Shoemaker, Jr.
</TABLE>
9
<PAGE>
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 6, 1996, 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 JANUARY 3, 1996
(Comparison chart appears here. Plot points are below)
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
(circle) RYAN'S FAMILY STEAK HOUSES, INC.
(diamond) NASDAQ MARKET INDEX (Customer to fill in plot points)
(plus) SIC CODE INDEX 5812
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 1, 1997. 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
10
<PAGE>
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 1997 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, 1996. 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, 1996. 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 SEC
relating to shareholder proposals.
FINANCIAL INFORMATION
THE COMPANY'S 1995 ANNUAL REPORT IS ENCLOSED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF RECORD AS OF MARCH 6, 1996, WHO SO
REQUESTS IN WRITING, A COPY OF SUCH FISCAL 1995 ANNUAL REPORT OR THE COMPANY'S
1995 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,
/s/ Janet J. Gleitz
Janet J. Gleitz
SECRETARY
Greer, South Carolina
March 29, 1996
11
*******************************************************************************
APPENDIX
<PAGE>
RYAN'S FAMILY STEAK HOUSES, INC.
P.O. Box 100, Greer, South Carolina 29652
P The undersigned hereby appoints Charles D. Way and Janet J. Gleitz, and
R each of them, as Proxies, each with the power to appoint his/her
O substitute, and hereby authorizes them to represent and to vote, as
X designated below, all the shares of Common Stock of Ryan's Family
Y Steak Houses, Inc. (the "Company") held of record by the undersigned
on March 6, 1996, at the annual meeting of shareholders to be held
on April 25, 1996 (the "Meeting"), or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all 7 nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all
nominees listed below
Please sign James D. Cockman, Barry L. Edwards, Brian S. MacKenzie,
on reverse G. Edwin McCranie, Harold K. Roberts, Jr., James M.
side and return Shoemaker, Jr., Charles D. Way
in the enclosed
postage-paid (Instruction: To withhold authority to vote for any
envelope. individual nominee(s) write the name of the nominee(s)
on the space provided below.)
_________________________________________________________
2. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH INSTRUCTIONS CONTAINED HEREIN. IN THE ABSENCE OF
SUCH INSTRUCTIONS, THIS PROXY WILL BE VOTED "FOR" ALL OF THE
FOREGOING PROPOSALS.
Date____________________________, 1996
_____________________________________
Signature
______________________________________
Signature
Please sign this proxy exactly as your
name or names appear hereon. If stock is
held jointly, signatures should appear for
both names. When signing as attorney,
executor, administrator, trustee, guardian
or agent, please indicate the capacity in
which you are acting. If stock is held
by a corporation, please sign in full
corporate name by authorized officer and
give title of officer.
</TABLE>
