SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Ryan's Family Steak Houses, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
RYAN'S FAMILY STEAK HOUSES, INC.
405 LANCASTER AVENUE (29650)
POST OFFICE BOX 100
GREER, SOUTH CAROLINA 29652
March 28, 1997
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, May 1, 1997 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 MAY 1, 1997
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, May 1, 1997 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 5, 1997 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 28, 1997
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, May 1, 1997
at the Greenville/Spartanburg Airport Marriott, Greenville, South Carolina. The
approximate mailing date of this Proxy Statement is March 28, 1997.
Shareholders of record at the close of business on March 5, 1997 are
entitled to notice of and to vote at the Annual Meeting. As of such date, a
total of 47,538,336 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 5, 1997 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 5, 1997 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 5,
1997 of or by each nominee for director.
<TABLE>
<CAPTION>
AGGREGATE NUMBER NUMBER OF SHARES
OF SHARES (INCLUDED IN AGGREGATE
BENEFICIALLY NUMBER) ATTRIBUTABLE TO
OWNED AS OF OPTIONS EXERCISABLE
PRINCIPAL DIRECTOR MARCH 5, 1997 WITHIN 60 DAYS OF
NAME AGE OCCUPATION SINCE (6) MARCH 5, 1997
<S> <C> <C> <C> <C> <C>
Charles D. Way 44 Chairman of the Board, President 1981 436,900(8) 300,000
(1,2) and Chief Executive Officer of
the Company
G. Edwin McCranie 48 Executive Vice President of the 1991 97,600 90,000
(2) Company
Barry L. Edwards 49 Executive Vice President, 1982 55,731 40,000
(3,4,5) Treasurer and Chief Financial
Officer, AMRESCO, Inc.
Harold K. Roberts, Jr. 46 Chairman and Chief Executive 1988 51,422(9) 40,000
(1,2,4) Officer, Statewide Title, Inc.
James M. Shoemaker, Jr. 64 Member, Wyche, Burgess, Freeman 1982 62,735(10) 40,000
(3,4,5) & Parham, P.A.
Brian S. MacKenzie 45 President and Chief Executive 1993 17,000(11) 15,000
(2,3,5) Officer, Builder Marts of
America, Inc.
James D. Cockman 64 Chairman and Chief Executive 1993 17,000 15,000
(1,2) Officer, Ocean Fresh Express
International Seafood
<CAPTION>
PERCENT OF
OUTSTANDING
REPRESENTED BY
AGGREGATE NUMBER
OF SHARES
BENEFICIALLY
NAME OWNED (7)
<S> <C>
Charles D. Way .9%
(1,2)
G. Edwin McCranie .2%
(2)
Barry L. Edwards .1%
(3,4,5)
Harold K. Roberts, Jr. .1%
(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 1996 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 1998 Annual Meeting of
Shareholders. See "Proposals of Shareholders".
(2) Member of the Long Range Planning Committee. The Committee met three times
during fiscal 1996 for the purpose of providing long-term direction for the
Company.
(3) Member of the Compensation Committee. The Compensation Committee met twice
during fiscal 1996 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 1996 for the
purpose of reviewing the scope and results of such firm's audit.
(5) Member of the Stock Option Committee. The Stock Option Committee met once
during fiscal 1996 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) Includes shares that may be acquired within 60 days of March 5, 1997
through the exercise of exercisable options.
(7) 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 are outstanding, but no
other such shares similarly subject to acquisition by other persons are
outstanding.
(8) The figure shown includes 10,380 shares owned by Mr. Way's wife. Mr. Way
may be deemed to share voting and investment power with respect to such
shares.
(9) The figure shown includes 615 shares held by Statewide Title, Inc., of
which Mr. Roberts is Chairman, Chief Executive Officer, and owner of 95% of
the outstanding common stock.
(10) The figure shown includes 2,000 shares owned by Mr. Shoemaker's wife and
2,000 shares in a trust, of which Mr. Shoemaker is a co-trustee, for the
benefit of one of Mr. Shoemaker's 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 .1%.
2
<PAGE>
The Board met five times during fiscal 1996. 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, engaged primarily in the life insurance business, from 1979 to
November 1994.
HAROLD K. ROBERTS, JR. was a partner in the firm of Roberts and Morgan,
certified public accountants, from October 1989 until December 1996. In
addition, Mr. Roberts has served as Chairman and Chief Executive Officer of
Statewide Title, Inc., a real estate title insurance agency, since 1989.
JAMES M. SHOEMAKER, JR. has been an attorney with 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 October 1993. From May 1991 to
October 1993, he served as BMA's President and Chief Operating Officer after
serving as President of its Building Materials Retail Division from July 1990 to
May 1991. BMA is a wholesale distributor of building materials and supplies.
JAMES D. COCKMAN has served since 1992 as Chairman and Chief Executive
Officer of Ocean Fresh Express International Seafood, which is engaged in the
business of processing seafood, and of American Culinary Equipment, Inc., a
distributor and manufacturer of professional culinary and other equipment to the
foodservice industry. 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. Mr. Cockman also serves as a director
of California Culinary Academy, Inc. and Clayton Homes, Inc.
COMPENSATION OF DIRECTORS
During 1996, directors who were 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 $17,250, $17,250, $17,500,
$17,500 and $17,250, respectively, during fiscal 1996. Directors who are also
officers of the Company were paid $100 per board meeting attended in 1996 and
received no payments for committee meetings attended.
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, 1996 and January 31, 1997, 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,
1996 had an exercise price of $6.875 per share (the per share market value on
the date of grant), and the options granted on January 31, 1997 had an exercise
price of $7.79 per share (the per share market value on the date of grant). The
options granted on January 31, 1996 became exercisable on July 31, 1996 and
expire January 31, 2006; the options granted on January 31, 1997 become
exercisable on July 31, 1997 and expire on January 31, 2007.
3
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, Messrs. Edwards, MacKenzie and Shoemaker, each a
non-employee director, served on the 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.
CERTAIN BENEFICIAL OWNERS OF COMMON STOCK
To the extent known to the Company, the only persons or groups that in any
case beneficially owned as of March 5, 1997 5% or more of the outstanding shares
of the Common Stock of the Company are shown in the following table:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
<S> <C> <C>
Mellon Bank Corporation (1) 2,556,000(1) 5.38
One Mellon Bank Center
Pittsburgh, PA 15258
Trimark Financial Corporation (2) 4,737,300(2) 9.97
One First Canadian Place
Suite 5600
Toronto, Ontario
Canada M5X 1E5
</TABLE>
(1) The information with respect to the beneficial ownership of Mellon Bank
Corporation ("Mellon") is based on information provided by it as of December
31, 1996. All of the shares shown are beneficially owned by Mellon or direct
or indirect subsidiaries of Mellon in their various fiduciary capacities. Of
the total amount of shares shown as beneficially owned by Mellon, it or its
subsidiaries has sole voting power as to 2,074,000 shares, shared voting
power as to 19,000 shares, sole dispositive power as to 2,369,000 shares and
shared dispositive power as to 176,000 shares of Company Common Stock.
(2) The information with respect to the beneficial ownership of Trimark
Financial Corporation ("TFC") is based on information provided by it as of
December 31, 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 shown in the table. 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.
4
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the name, age, position with the Company,
years of service as an officer of the Company and Common Stock beneficially
owned as of March 5, 1997 of or by each executive officer of the Company, and
all executive officers and directors as a group. The Company's executive
officers are appointed by and serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
AGGREGATE NUMBER
OF SHARES
COMPANY BENEFICIALLY
COMPANY OFFICES OFFICER OWNED AS OF
NAME AGE CURRENTLY HELD SINCE MARCH 5, 1997 (1)
<S> <C> <C> <C> <C>
Charles D. Way 44 Chairman of the Board, 1981 436,900(3)
President and Chief Executive
Officer
G. Edwin McCranie 48 Executive Vice President 1989 97,600
and Director
John C. Jamison 38 Vice President-Real Estate 1988 115,000
James R. Hart 49 Vice President-Human Resources 1988 50,780
Fred T. Grant, Jr. 41 Vice President-Finance, 1990 60,865
Treasurer and Assistant
Secretary
Morgan A. Graham 60 Vice President-Construction 1991 55,585
Alan E. Shaw 38 Vice President-Operations 1990 50,167
Ilene T. Turbow 46 Vice President-Marketing 1995 11,000
Janet J. Gleitz 54 Secretary 1988 20,000
All executive officers and 1,101,785
directors as a group (14
persons)
<CAPTION>
NUMBER OF
SHARES (INCLUDED IN PERCENT OF
AGGREGATE NUMBER) OUTSTANDING
ATTRIBUTABLE TO REPRESENTED BY
OPTIONS AGGREGATE NUMBER
EXERCISABLE WITHIN 60 OF SHARES
NAME DAYS OF MARCH 5, 1997 BENEFICIALLY OWNED (2)
<S> <C> <C>
Charles D. Way 300,000 .9%
G. Edwin McCranie 90,000 .2%
John C. Jamison 113,300 .2%
James R. Hart 49,000 .1%
Fred T. Grant, Jr. 59,000 .1%
Morgan A. Graham 54,000 .1%
Alan E. Shaw 49,000 .1%
Ilene T. Turbow 9,800 (4)
Janet J. Gleitz 19,000 (4)
All executive officers and 893,100 2.3%
directors as a group (14
persons)
</TABLE>
(1) Includes shares that may be acquired within 60 days of March 5, 1997 through
the exercise of exercisable options.
(2) 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 or
group are outstanding, but no other such shares similarly subject to
acquisition by other persons are outstanding.
(3) The figure shown includes 10,380 shares owned by Mr. Way's wife. Mr. Way may
be deemed to share voting and investment power with respect to such shares.
(4) Less than .1% of the outstanding shares of stock as of March 5, 1997.
In 1996, the Company implemented a policy with respect to executive officer
ownership of Company Common Stock in order to further encourage an ownership
mentality among the executive officers and to more closely align the personal
financial interests of executive officers with shareholders' interests. The
policy provides that over a thirteen-year period, the value of an executive
officer's share ownership should increase so that by the end of 2008 the value
of such stock holdings equals 100% of the individual's base salary. If an
executive officer does not meet a year's target ownership value, up to one-half
of any bonus payable to such officer for that year will be paid in Company
Common Stock.
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 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.
JAMES R. HART joined the Company in 1979 and served as a store manager
until September 1983. From that time he served as Director of Human Resources
until April 1988, when he became Vice President-Human Resources.
FRED T. GRANT, JR., a certified public accountant, 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.
5
<PAGE>
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, in which position he served until 1984.
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 foodservice marketing firm.
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 1996, 1995 and 1994 the cash
compensation paid by the Company and its subsidiaries, as well as certain other
compensation paid or accrued for those years, to the chief executive officer and
the four other executive officers with the highest total salary and bonus in
1996 (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, 1996 240,414 144,000 30,000 38,453
Chairman of the Board, 1995 225,561 78,975 30,000 39,252
President and Chief Executive 1994 204,558 30,600 60,000 38,789
Officer
Alan E. Shaw, Vice 1996 121,997 52,100 10,000 33,334
President-Operations 1995 112,161 47,700 10,000 33,831
1994 101,150 42,300 20,000 32,771
G. Edwin McCranie, Executive Vice 1996 123,935 49,446 12,000 36,978
President 1995 116,027 26,910 10,000 36,628
1994 106,024 10,500 20,000 34,175
John C. Jamison, Vice 1996 116,092 46,632 10,000 27,177
President-Real Estate 1995 110,200 29,480 10,000 27,197
1994 104,197 13,936 20,000 25,948
Fred T. Grant, Jr., Vice 1996 123,114 49,446 10,000 31,947
President-Finance, Treasurer 1995 115,194 30,820 10,000 32,148
and Assistant Secretary 1994 104,198 13,936 20,000 31,035
</TABLE>
(1) "All Other Compensation" for 1996 includes the following: (i) contributions
of $2,250, $2,250, $2,253, $2,184 and $2,283 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 a portion of the 1996 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. McCranie, Mr. Jamison and Mr. Grant 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 $144 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; and (v) the
6
<PAGE>
Company's estimate of the imputed benefit to Messrs. Way, Shaw, McCranie,
Jamison, and Grant of $26,131, $23,440, $27,081, $17,349 and $22,020,
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 $840,000, respectively. Under the Company's insurance plan, the Company
pays premiums on such a policy on the life of a participating executive
officer for a period of ten years. The Company owns the policy for the first
five years of the policy. After the fifth year, the Company transfers
ownership of the policy to the participating executive. The Company is
repaid the aggregate amount of the premiums, without interest, at the
earlier of the executive's dying or reaching age 60, or the termination of
the policy.
SUMMARY OF OPTION GRANTS, OPTION EXERCISES AND HOLDINGS
The following table illustrates the value of the stock options granted to
the Named Executive Officers during fiscal 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
% OF TOTAL
OPTIONS MARKET PRICE
NUMBER OF GRANTED TO REQUIRED TO
SECURITIES EMPLOYEES REALIZE
UNDERLYING IN 1996 EXERCISE GRANT DATE
OPTIONS FISCAL PRICE EXPIRATION GRANT DATE PRESENT VALUE
NAME GRANTED (#) YEAR ($/SH) DATE PRESENT VALUE ($)(1) ($/SH)(3)
<S> <C> <C> <C> <C> <C> <C>
Charles D. Way 30,000 4.5% 6.97 11/22/06 (2) 99,900 10.30
Alan E. Shaw 10,000 1.5% 6.97 11/22/06 (2) 33,300 10.30
G. Edwin McCranie 12,000 1.8% 6.97 11/22/06 (2) 39,960 10.30
John C. Jamison 10,000 1.5% 6.97 11/22/06 (2) 33,300 10.30
Fred T. Grant, Jr. 10,000 1.5% 6.97 11/22/06 (2) 33,300 10.30
</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 .331, a 0% dividend yield, a 7 year holding term
prior to exercise, and a risk free rate of return of 6.06% for the options
expiring November 22, 2006, 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 May 22, 1997. In addition, the
stock option plan and/or stock option agreements set forth certain earlier
expiration dates.
(3) In order to obtain the Grant Date Present Value shown, the market price of
the Common Stock would need to be $10.30 in present value terms.
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<PAGE>
The following table sets forth information with respect to the Named
Executive Officers concerning option exercises, the unexercised options held as
of the end of the fiscal year and the value of such options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS
OPTIONS AT 1996 AT 1996 FISCAL
SHARES FISCAL YEAR- END YEAR-END
ACQUIRED ON (#) ($)(2)
EXERCISE VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($)(1) UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Charles D. Way 45,000 53,344 300,000/30,000 200,625/0
Alan E. Shaw 29,500(3) 107,023(3) 50,000/10,000 (3) 6,875/0(3)
G. Edwin McCranie 6,000 3,000 90,000/12,000 63,125/0
John C. Jamison 10,500(3) 14,085(3) 113,500/10,000 (3) 77,563/0(3)
Fred T. Grant, Jr. 0(3) n/a(3) 60,000/10,000 (3) 14,375/0(3)
</TABLE>
(1) The value realized of exercised options is the product of (a) the excess of
the per share fair market value of the Common Stock on the date of exercise
over the per share option exercise price, multiplied by (b) the number of
shares acquired upon exercise.
(2) The value of unexercised in-the-money options was calculated for each
officer as follows: market price of the Common Stock as of December 31, 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.
(3) Messrs. Jamison and Grant exercised options covering 200 and 1,000 shares,
respectively, in January 1997, and Mr. Shaw exercised options covering 1,000
shares in February 1997. In accordance with SEC rules, these exercises will
be reported in tabular format in the Company's proxy statement for the 1998
Annual Meeting.
DEFERRED COMPENSATION-SALARY CONTINUATION AGREEMENT
The Company is party to a Deferred Compensation-Salary Continuation
Agreement with Mr. Charles Way. The agreement 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 1, 1997 relating to this agreement was $164,670. An aggregate of $30,550
of deferred compensation was accrued under this agreement for the benefit of Mr.
Way during fiscal 1996. The Company is the owner and beneficiary of a life
insurance policy on the life of Mr. Way. 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 objective. 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.
8
<PAGE>
The Committees' executive compensation philosophy is to set compensation
levels in their discretion that 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 1996 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 6% to 20%. 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 an
exercise price equal to 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
value. During 1996, 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 1996, 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 70%. The Compensation
Committee considered each of these factors and awarded bonuses to Mr. Shaw as
noted in the Summary Compensation Table.
During 1996, the Compensation Committee continued an Executive Bonus Plan
to provide additional incentives to its other executive officers. The bonus plan
covers eight of the Company's nine executive officers. Alan Shaw 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, 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 per share; and (iii) subjective departmental and
personal objectives. Each of these factors was weighted approximately equally in
setting the target bonus. In the case of Mr. Way, the receipt of his entire
target bonus was based upon the achievement of Company objectives in: (i)
increase in average unit sales; and (ii) increase in net earnings per share.
Each of these factors was weighted approximately equally in setting the target
bonus. At the end of 1996, 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 income 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 anticipated 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 stock 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 1996, the Compensation Committee adjusted Mr. Way's base salary
upward by approximately 6.7%. 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
9
<PAGE>
margins, and return on equity. Each of these factors was given approximately
equal weight. In addition, Mr. Way received a bonus of $144,000 pursuant to the
bonus plan described above because of the Company's attainment of its average
unit sales and net earnings per share (as adjusted) objectives. The Compensation
Committee adjusted the net earnings per share calculation for Mr. Way, as well
as for all other executive officers under the Executive Bonus Plan, for two
items: (i) 2.2 cents were deducted from 1995 net earnings per share to account
for the effect of 1995's 53rd week; and (ii) 13.75 cents were added to 1996 net
earnings per share to offset 85% of the impact of adopting Statement of
Financial Accounting Standards No. 121 in 1996. Accordingly, on this adjusted
basis, the Company's net earnings per share increased 15% from 1995 to 1996. Per
the Company's financial statements, actual net earnings per share decreased 11%
from 1995 to 1996.
In addition, during 1996, 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 this grant, 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 1996
year-end, the value of Mr. Way's outstanding exercisable in-the-money stock
options was $200,625 as compared to $307,500 at the end of 1995, a decrease of
34.8%. 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>
10
<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 and dividend
reinvestment) is presented below. The Company will promptly furnish without
charge to any shareholder of record on March 5, 1997, 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.
COMPARISON OF CUMULATIVE TOTAL RETURNS
AMONG RYAN'S FAMILY STEAK HOUSES, INC.,
NASDAQ MARKET INDEX AND SIC CODE INDEX FOR THE
FIVE-YEAR PERIOD ENDED JANUARY 1, 1997 (YEAR-END 1996)
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
(Performance graph appears here. The plot points are listed in the table
below.)
YEAR-END
1991 1992 1993 1994 1995 1996
RYAN'S FAMILY STEAK
HOUSES, INC. 100 117.33 93.33 75.33 78.67 73.33
NASDAQ MARKET INDEX 100 100.98 121.13 127.17 164.96 204.98
SIC CODE INDEX 5812 100 127.79 146.74 128.51 175.98 184.48
11
<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 December 31, 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 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 1998 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 by no later than November 28, 1997. 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 by no later than November 28, 1997. 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 1996 ANNUAL REPORT IS ENCLOSED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF RECORD AS OF MARCH 5, 1997, WHO SO
REQUESTS IN WRITING, A COPY OF SUCH FISCAL 1996 ANNUAL REPORT OR THE COMPANY'S
1996 ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS), INCLUDING FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, 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, SECRETARY.
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 Annual
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 28, 1997
12
